Strategic Human Resource Management: Concepts and Cases

Strategic human resource management (SHRM) is a tactical method for the management of an organization’s human resource function in line with organizational goals and objectives. SHRM enhances these functions by linking the traditional human resource practices to business strategy and the realization of organisational goals in order to enable the organization to achieve a competitive advantage.

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Importance of SHRM in Organisations

According to Wei (2006), properly designed and executed SHRM can facilitate the achievement of organizational goals. Clearly set goals require the dedication of all the organisation’s employees. It is the duty of the human resource department of the organisation to identify the business sectors that require human resource expertise. SHRM, therefore, help organisations to achieve their long-term and short-term objectives. It contributes by reinforcing and overseeing the successful implementation of the organisation’s business strategies.

Due to the increasingly competitive nature of the globalised business environment, organisations need to integrate their human resource functions with their business strategies to acquire a sustainable competitive advantage in the market. Strategic human resource management helps in the realization of organisational goals through its application of performance measurement approaches to assess the contribution of each employee to the organisation. In addition, SHRM helps by improving the relationship between the human resources function and line managers.

SHRM also helps in the attraction and retention of the most qualified workforce that can enable the organisation to achieve its goals (Becker & Huselid 2006). Moreover, strategic human resource function facilitates the organisation’s growth by ensuring the retention and proper management of the acquired talent. A motivated workforce is significant to organisational development.

SHRM also assists in the creation of an organisation’s vision and interlinked values which essentially create a good working environment for the attainment of the organisation’s objectives (Fitz-enz 2000). SHRM provides employees with authority in their responsibilities and affords them the flexibility that can motivate innovation. Such flexibility and responsibility can improve an organisation’s productivity.

Strategic human resource management expands the skill base of the organisation’s employees to enable them to acquire the necessary skills which are useful in the organisation’s strategic growth (Armstrong 2008). Constant learning and skill development is important due to the changing nature of business environments and information technology.

The Contribution of SHRM to the Achievement of an Organisation’s Objectives

At Merton Campaign Society, the organisation seeks to create an environment where people are safe by encouraging active participation in community affairs. The strategic human resource function of Merton Campaign Society is geared towards the transformation of the local community into a safe place for all residents. SHRM urges the organisation’s employees to identify with and contribute towards the realization of organisational values and objectives. It develops an environment of trust and a sense of unity among the employees of Merton Campaign Society.

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In addition, the SHRM at Merton Campaign Society has created a performance culture that inspires productivity, growth and customer service. The organisation applies strategic human resource management to improve the relationship between employees and encourage cooperation between managers and company employees. It has a reward management scheme where employees who demonstrate exemplary performance are identified and rewarded accordingly. This helps in encouraging employee commitment to company objectives and discretionary behaviour (Bamberger & Meshoulam 2000).

A five tier methodology can be implemented to establish the present and future resource demands of an organisation. The methodology includes the determination of business objectives, performing environmental analysis of internal and external factors, a gap evaluation, measuring progress, as well as evaluating and reporting on progress (Hall 2002).

Factors that Underpin Human Resource Planning

There are various internal and external business factors that affect the formulation and application of human resource plans. Once an organisation has established its objectives, it is important to perform a workforce analysis to determine the future needs of the organisation.

Some of the internal factors that an organisation needs to consider include organisational strategy, organisational culture and the location of the organisation (Beardwell & Claydon 2007). Merton Campaign Society, for instance, aligns its human resource plans according to its business location around London since a bulk of its employees come from and reside in the city.

The external factors that influence human resource planning include government regulations, economic conditions, technological advancements, and workforce demographics (Torrington et al. 2009). Economic trends influence the pool of talent available for employment as well as the ability of the organisation to acquire new employees. For instance, a bad economy may force the company to downsize. The organisation needs to understand the global and local economic trends to prepare for changes in the job market.

According to Sims (2002), human resource planning is also influenced by technological trends. New technologies can lead to downsizing, especially if the technological invention reduces the workload. Though such innovations can lead to reduced costs of production, they eventually affect human resource management since employees must be trained on how to use the technological gadgets and application.

An Assessment of Human Resource Requirements at Merton Campaign Society

Marchington and Wilkinson argue that successful recruitment needs to be consistent with the objectives and vision of the organisation (2008). Identification of present and future human resource needs of Merton Campaign Society can be conducted using a gap analysis. After assessing the human resource requirements of Merton Campaign Society, it is evident that most employees do not have the necessary recreational and volunteer skills needed to grow the company.

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It is possible to predict future human resource needs of Merton Campaign Society using the methodology of forecasting labour demands. The bottom-up managerial judgement technique shows that managers are likely to need additional employees.

As a company grows and spreads its presence, its human resource needs are likely to expand. Merton Campaign Society needs to identify capable and caring employees who can assist the company in reaching its objective of ensuring security for residents. From the gap analysis, the areas of Merton Campaign Society that need additional attention include training, recruitment, and reward programs.

A Three-Year Human Resource Plan for Merton Campaign Society

A Three-Year Human Resource Plan for Merton Campaign Society

The human resource management plan outlined above covers key areas that require attention in the growth of Merton Campaign Society. Using SMART analysis, the objectives of the HRM plan have been set in a way that they are realistic and sustainable. However, the plan could have been supported by key indications about the available funds for human resource activities and the mechanisms used in prioritizing human resource projects. In addition, an outline of how the timelines would be achieved would have helped in clarifying the plan. Moreover, short term plans ought to have been distinguished from long term plans.

The Purpose of Human Resource Management Policies in Organisations

Human resource policies refer to a set of formal regulations and guidelines formulated by human resource departments to govern the hiring, assessment, training, remuneration and dismissal of employees. These policies and practices must comply with existing labour laws and regulations. Human resource management policies also cover equality and equity, benefits, working hours and leaves, employee discipline, intellectual property and drug use.

In the organisational setting, human resource policies contribute towards establishing organisational structure and culture. If certain policies such as those governing safety in the workplace, performance assessment and appraisal, employee discipline and working hours were to be eliminated, most work settings of organisations would be completely chaotic. In this respect, HR policies govern the relationships among employees as well as interactions between employees and managers.

Human resource policies are created to oversee employee welfare and ensure fairness (David 2004). These policies ensure equal opportunities for employment as well as equal treatment in the workplace. Human resource policies, therefore, protect employees from exploitation and unwarranted discrimination.

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In addition, HRM policies aid in performance management and maintenance of best HR practices (Boxall & Purcell 2003). These policies are significant during the analysis of business performance and human resource activities. Besides enhancing the adoption of best practices, HRM policies facilitate consistency and efficiency. This is important in Human resource management since inconsistency can cause worker discontent and conflict in the workplace. HRM policies not only assist in the formulation of strategic goals, but also assist in the definition and redefinition of an organisation’s strategic direction.

The Impact of Regulatory Requirements on Human Resource Policies in an Organisation

There are many legal provisions that govern the relationships between employers and employees and work environment. The Employment Act of 2008, for instance, describes the essential terms of labour for employees in the private and public sectors. The act applies to all forms of employment apart from the military and the police, who, due to the sensitive nature of their job descriptions, are covered under the Armed Forces Act of 2008 and the Police Act. The Employment Act prohibits forced employment as well as the employment of minors. It also forbids discrimination in the workplace and discusses working hours.

Other forms of legislation that cover human resource policies include Employment Relations Act of 2004 and the Employment Rights Act of 1996, which discuss the relationships between employees and employee rights and responsibilities. There are other Acts that prohibit all forms of discrimination in the workplace, which include the Disability Discrimination Acts of 1995 and 2005 and the Sex Discrimination Act of 1997. The Equal Pay Act of 1970 covers policies about salaries and wages.

In the formulation of strategic human resource management policies, organisations are compelled to adhere to the legal requirements of the areas in which they operate (Shih & Chiang 2005). Besides local laws, there are also international labour laws which affect the formulation of human resource management policies. Observing these laws can help a company to avoid the expenses associated with costly lawsuits and government penalties.

The Impact of Organisational Structure on the Management of Human Resources

Organisational structure can be perceived as the technique through which organisations apportion responsibility and distribute information within the company (Marchington & Wilkinson 2000). Types of organisational structures include tall, flat, hierarchical, centralised, decentralised, functional, matrix, networked, and divisional structures. Tall structures are difficult to manage since they have many levels of employee classes. Hierarchical structures are relatively easier to manage since employees are ranked in levels and sub-levels.

Unlike a decentralised structure where decision making authority is delegated to empowered company employees, centralised organisational structures prefer defined leadership and decision making roles headed by the company headquarters. Functional organisational structures, on the other hand, are easy to comprehend since the components of the organisations are well-defined. Since matrix organisational structure focuses on the development of teams of specialists from different parts of the organisation, it resembles the network structure. All these types of organisational structure influence the management of the human resource function of organisations since roles, relationships, responsibilities, and information flow rely on the existing structure.

The Impact of Organisational Culture on HRM

Organisational culture can be defined as a collection of shared meaning understood by members of the organisation, which sets them apart from members of other organisations. Organisational culture is, therefore, more important for the overall success of the organisation than structure and politics. Hofstede proposes certain cultural values that characterise organisational culture, including masculinity and femininity, individualism and collectivism, and the power of social hierarchy (Gerhart & Fang 2005). Other cultural theorists like Schein, Scholtz and Handy also tried to explain the link between organisational culture and human resource management.

The principal role played by organisational culture in HRM is the definition of processes and provision of meaning to life within and around the organisation. Culture affects key objectives, work techniques and interpersonal communication within the organisation. Different management styles such as autocracy, democracy, transactional, and laissez-faire rely on and impact organisational culture.

Other implications of culture on human resource management can be seen in conflict reduction due to consistency, coordination and motivation of employees. Organisational culture also contributes towards the achievement of competitive advantage.

How to Monitor the Effectiveness of Human Resource Management

Merton Campaign Society conducts succession planning for its employees to ensure that the right skills are available for the right jobs. In addition, training and development at Merton Campaign society are assessed through the evaluation of job-impact indicators. The profitability of the company is also evaluated using certain quantitative measures like the benefit-to-cost ratio.

A technique for monitoring HRM effectiveness is HR auditing where the value of a company’s human resource department is evaluated. The level at which employees are engaged with their employers can also provide an indication of management effectiveness. Assessment of employee engagement can be conducted through periodic surveys.

A workforce scorecard can also be used to assess the employee contribution to the organisation. For the purposes of benchmarking and monitoring HR effectiveness, many organisations successfully use human resource information systems. Benchmarking compares certain performance tools against the data collected using those tools by other companies.

Recommendations for Improvement of HRM at Merton Campaign Society

Though the Human resource function at Merton Campaign Society has registered considerable success in providing the labour required for company operations, there are areas that require improvement. The company can organise for more value assessment surveys to evaluate the direct contribution of company employees. In addition, external benchmarking can help the company to assess the progress made by other companies in the security industry.

Reflective Statement

The main themes in this unit have enabled me to understand the changing nature of human resource requirements and the need to formulate strategic human resource policies and plans that are flexible. The knowledge obtained in this course will assist me in my role as a human resource manager to effectively oversee the definition of human resource needs of my organisation as well as the effective management of my organisation’s employees. At the beginning of the course, I did not fully comprehend the factors played by the business environment on human resource decisions. This unit has certainly been an eye opener in that regard.

References

Armstrong, M 2008, Strategic human resource management: a guide to action, Kogan Page, London.

Bamberger, P & Meshoulam, I 2000, Human resource strategy: formulation, implementation, and impact, Sage Publications, Beverly Hills.

Beardwell, J & Claydon, T 2007, Human resource management: a contemporary approach, FT/Prentice Hall, Harlow.

Becker, B & Huselid, M 2006, ‘Strategic human resources management: where do we go from here?’ Journal of Management, vol. 32. no. 6, pp. 898-925.

Boxall, P & Purcell, J 2003, Strategy and human resource management, Palgrave Macmillan, New York.

David, F 2004, Strategic management: concepts and cases, Prentice Hall, New Jersey.

Fitz-enz, J 2000, The ROI of human capital: measuring the economic value of employee performance, American Management Association, New York, NY.

Gerhart, B & Fang, M 2005, ‘National culture and human resource management: assumptions and evidence’, International Journal of Human Resource Management, vol. 6. no. 6, pp. 971-986.

Hall, R 2002, Organisations: structures, processes, and outcomes, Prentice Hall, New Jersey.

Marchington, M & Wilkinson, A 2000, Core personnel and development, Institute of Personnel and Development, London.

Marchington, M & Wilkinson, A 2008, Human resource management at work: people management and development, CIPD, London.

Shih, H & Chiang, H 2005, ‘Strategy alignment between HRM, KM, and corporate development’, International Journal of Manpower, vol. 26. no. 6, pp. 582-603.

Sims, R 2002, Organisational success through effective human resource management, Quortum Books, Westport, CT.

Torrington, D, Hall, L, Taylor, S, & Atkinson, C 2009, Fundamentals of human resource management: managing people at work, Pearson Education Harlow.

Wei, L 2006, ‘Strategic human resource management: determinants of fit’, Research and Practice in Human Resource Management, vol. 14. no. 2, pp. 49-60.

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