Valtech Company: Role of HRM in Strategic Management

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Introduction

HR management is one of the factors that increase the organization’s leadership in the competition. It relates to one of the company’s internal competencies, which is unique and challenging to reproduce. HR management allows successful companies to lead the market thanks to their high-quality performance. It includes “performance management, human resource planning and recruitment and selection, compensation management, diversity management issues, leadership, organizational culture, talent management, etc.” (Bhattacharyya, 2018, p. 13). There is a direct correlation between the degree of progressiveness of personnel management, the satisfaction of employees with the process and the results of their labor activity. This, in turn, affects customer satisfaction, profit, the value of shares and other financial aspects. The purpose of this paper is to discuss the main issues related to the HR management of an IT company Valtech.

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Changing Nature of Contemporary HRM in Valtech

Due to the process nature of HR management activities, there is a need to build an organizational and role structure for personnel. This structure positions employees in horizontal interaction and allows to establishing teamwork formats (Zeuch, 2016). The Valtech HR department started working on this process during the creation of the company. First of all, HR managers approached this issue from the inside and created a corporate system of human resources management technologies. To achieve this goal, consistent corporate standards based on shared values ​​have been created. These standards have been documented and each employee can use them to get accurate information about their place in the company. The main values in this regard are quality of work, joint efforts and customer level of satisfaction.

The HR department of the company also created the corporate and job competency models of the organization’s personnel which made it possible to identify the strengths of each employee. This allows the company to concentrate on the competitive advantages that determine the success of the company through the constant self-development of employees. Special attention is paid to core employees, “carrying out important activities for the organization that required unique skills and firm-specific knowledge critical to organizational competitiveness” (Wilkinson and Johnstone, 2016, p. 78). These people are playing a vital role in the work of the whole company; thus, their skills and abilities are appreciated and developed continually. They have an opportunity to participate in study sessions and multiple conferences.

In addition, the company’s senior managers analyzed the economic side of HR management. The state of the economy is constantly changing, so this external factor has to be always kept in mind. Due to the economic justification of the effectiveness of the work with personnel, they were able to assess its impact on the increase in the cost of the final product. This allowed limiting the budget for the needs of the HR department (hiring employees, events and other activities) in a fair framework that gives the necessary level of freedom.

A specific problem of HR management is the insufficient level of infrastructure development for professional services in the field of HR management. Personnel managers who do not have a methodology and systematic approach to work often do not take into account the patterns and algorithms of influence. It makes it impossible to predict the results and increase the efficiency of management activities (Bratton and Gold, 2017). This kind of technocratic approach to management eliminates the strategic view of labor resources. To resolve this issue, Valtech HR managers have studied several different HR courses. First of all, they learned the value-based management methods; in addition, they discuss approaches to work among themselves and keep developing their HR management system. This allows them to make work with staff much more efficient and reduce staff turnover.

In response to external factors, such as changes in society and the workplace, career growth deviates from the traditional “ladder” model. Often, the upward movement was the only acceptable career path (Stewart and Brown, 2019). At Valtech, however, the HR department helps employees choose a flexible career path, including horizontal and vertical models. Communicating with each person individually, HR managers reveal their strengths and aspirations (Mathis et al., 2016). This cross-functional work experience benefits both individual employees and the company as a whole. For instance, some of the employees of the sales department are now also involved in HR activities since they know sales processes from the inside.

Planning for changes in the field of human resources management should include analytical and forecasting activities, the development of specific measures and the selection of an appropriate strategy. It should take into account various levels of interference in the organizational structure and variable regulatory parameters. In particular, when developing a planned event, it is necessary to take into account the reaction of personnel to ongoing changes. To overcome staff opposition to planned changes, it is required to use a set of motivational and administrative management methods (Martin and Whiting, 2016). To avoid the difficulties of adopting innovations, Valtech management engages HR representatives in the discussion of strategic issues. Such meetings discuss how best to present information to employees, what steps this process should include. For example, the introduction of a new reporting system could cause a strong negative response, since it implies increased control. However, HR managers presented this news in a favorable light, so employees calmly accepted this need.

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Regulatory and Social Changes and Contemporary HRM in Valtech

The ongoing globalization process is visible at present. This is reflected, for instance, in the economy, in social issues and in computer technology. In particular, its influence can be seen in the field of HRM. First of all, it is worth noting that, thanks to globalization, Valtech got the opportunity to become an international company. The branches in each country hire employees of different nationalities who came to work in large cities. Thus, the internationality of the company forces the HR department to adapt to this situation and develop a system of interaction within and between branches (Reiche et al., 2017). This system allows to set certain standards for all departments of the company and follow them from anywhere in the world. It also affects the relationship between employees who can contact each other at any time, even if they are in different cities. In other words, despite the difficulties in managing people located in various geographical locations, globalization has given company-wide opportunities for development.

Also, globalization has allowed the HR department to use many modern technologies, such as a CRM system common to the entire company. This allows storing information about all employees in one place, making the work process convenient and quick. Also, thanks to this, HR managers can communicate with all company workers at once. This is useful when inviting to various events or when announcing important information to all employees. New convenient technical tools appear daily and it is necessary to monitor updates and implement the necessary ones (Kavanagh and Johnson, 2017). Therefore, globalization gives many opportunities for business development and the working processes of the organization.

Other phenomena also affect the work of any company: demographic, social and technological. For example, in recent years, one can note a trend in increasing birth rates, which indirectly affects Valtech. This influence is ambiguous and has both advantages and disadvantages. On the one hand, an increase in the number of applicants for each job offer increases the opportunity to find the most suitable candidate. However, on the other hand, this increases the workload of the HR department, which requires reorganization and the hiring of new HR managers (Itani, 2017). In any case, this trend is rather positive, since as a result, it leads to better work of the entire company.

Social changes also indirectly affect the functioning of the Valtech company. For example, over the past few decades, there has been active emancipation of women, which continues to this day. This allows them to receive a much better education and strive for career growth (Reiche et al., 2017). For this reason, Valtech hires more women every year, many of them in programming. It cannot be said whether this phenomenon is positive or negative since the quality of work of all employees is checked at the initial stages. They all work equally well, and it depends entirely on their education, skills and motivation.

Technological changes also affect the HR management of the company to some extent. The use of new personnel management systems in the company was noted above. Researchers state that “significant technological developments have occurred, with digital recorders, ubiquitous desktop and notebook computers, transcription or voice recognition software, computer-aided qualitative data analysis software all becoming readily available to support the qualitative researchers” (Townsend, Loudoun and Lewin, 2016, p. 30). Undoubtedly, this helps HR managers in the assessment of various performance indicators and employees’ conditions. In addition, by following technological news, HR managers can make the company’s offices much more cozy and comfortable. Often this does not affect management, but everyday issues; however, these details have a positive effect on the mood of most members of the team. Thanks to this, they invest more in work and like being in the office and any organization strives for this.

Government policy and legal regulations also affect any area of ​​the business, which could not bypass Valtech. For example, it is worth noting the complexity of electronic document management: there is no system to implement it fully. Therefore, any department of the company has to spend time and effort working with documents that affect the HR department since any innovations must be documented. In addition, sometimes, it is necessary to get signatures from each employee. Periodically, this creates the need to gather them all in the office and may not be convenient for everyone since some people work from home. In the event of such emergency meetings and gatherings, the HR department tries to brighten up the negative emotions of employees, letting them understand the causes of these situations.

The government does not always take into account the needs of companies and does not provide adequate support in times of crisis. Thus, many organizations have to cut resources for different days and more global needs, including work with staff. Reducing the cost of maintaining a good atmosphere at work affects the overall mood of the team. This leads to the need to provide psychological support to employees, which is sometimes a difficult task. In addition, getting used to various regular events, people feel uncomfortable without them. These inconveniences are usually temporary, but several times they led to the loss of employees. With more government support, Valtech would be able to survive financial problems with fewer difficulties.

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Role of HRM in Strategic Management of Valtech

The role assigned to the traditional HR department consists of achieving the tasks set for it at the moment and solving operational issues. Under this role, which is usually reactionary, personnel are attributed to the expense item of the enterprise and not to its strategic assets. However, strategic planning requires that HR managers be proactive and focus on the future. According to Armstrong and Taylor (2017, p. 35), “strategic activities are concerned with developing organizational effectiveness and the alignment and implementation of HR and business strategies.” HR managers should contribute to the formation of a business strategy and the creation of programs for the development of labor resources by this strategy. For each specific situation, HR managers can play a strategic or traditional role. Strategic HR management always takes into account the impact that actions can have on the productivity of staff and the achievement of business goals. According to Tyagi (2017, p. 27), “its main concern is with integrating what HR does and plans to do with what the business does and plans to do.” This correlation should be constantly followed to help companies achieve success.

The HR function for the organization has always been and will be strategic. However, this role has traditionally been performed by “top management” without the participation of the HR department. In this situation, HR specialists must become partners in the strategic process. They should expand their capabilities in evaluating the business as a whole and in exploring how HR can contribute to business development (Bailey et al., 2018). HR management can be strategically developed only if HR specialists understand the business and are constantly improving. In addition, they must have a solid knowledge of the basic principles of HR, manage the organizational culture and build trusting relationships between departments in the organization (Itani, 2017). The combination of these qualities allows specialists to have a widespread positive impact on all areas of the company.

The main development strategy of Valtech is to get more profit by expanding the company in different countries and increasing the number of products and services offered. Valtech pays great attention to strategic planning and HR managers are directly involved in it. HR managers are engaged in market analysis, studying what products customers need and then exploring how many potential employees can work on it. HR managers are also building a communication system between company departments in different countries, for example, looking for new messengers and creating documentation. Thanks to this, the creation of new branches becomes much easier, as all their employees quickly integrate into the company.

All the stakeholders, as business owners and employees, always support the participation of the HR department in the life of the company. Leaders consider it necessary to attract HR managers to discuss various strategic issues and listen to them. Employees trust the HR department and are always interested in the new activities that they offer. All participants in the work process are confident in the need to build a quality team and are happy to contribute to the process. Sometimes the company gets into a negative environment related to economic problems and lack of demand on the market. However, the work of the HR department is aimed at creating of an atmosphere of confidence in the company. Thanks to these efforts, the employees and even the managers feel protected and united and thus believe that they can solve all their problems together.

HRM in Different Organisational Contexts

One of the most important tasks of the company in the early stages of its existence was the organization of productive interaction between different departments within the same office. In addition to coordinated completion of tasks, employees also need to know each other well and have a team spirit. Thanks to this, they will be able to work much more productively, help each other and be in a favorable, friendly atmosphere (Zeuch, 2016). Customization of the company’s work takes place within several organizational contexts. First, it is a cultural context in which corporate culture and norms of behavior are developed. It is also a collective context, in other words, it is a unity of people who are endowed with similar, matching qualities. Valtech also operates in a technological context, as it is an IT company and all its employees use a certain set of tools.

HR managers carried out some activities that contribute to team building. First, all employees participated in the creation of the company’s mission. At general meetings, everyone spoke out about their values ​​at work. Using common efforts, the employees compiled a document that reflects all their needs and aspirations. Thanks to this, they understand exactly what paradigm they need to work within (Kavanagh and Johnson, 2017). Second, weekly team building events were organized in the office: people got together, had dinner and played board games. Third, the company also organized several outdoor events during weekends. At these events, the employees also participated in various team-building games. In addition, they discussed important strategic issues related to the company in order to understand that they have the same outlook on work precisely. All these events allowed the company to make the team united and strong in a few weeks.

Another challenge was the creation and rallying of the team among offices located in different countries: Valtech branches. The need for these contacts is to establish common principles and values ​​within the company. The confidence of each employee that he will be accepted at the company’s office anywhere in the world also makes the working atmosphere more favorable (Brewster et al., 2016). To achieve this goal, the company conducted several business trips for the best employees. Periodically, online conferences are organized for all interested employees, at which strategic issues are discussed. As part of this challenge, each employee can also participate in making changes to the mission of the company to clarify the direction of its movement. Thus, the relations in the team both inside the local office and between different branches are warm and friendly.

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Conclusion

Competent personnel management is one of the critical success factors for any company. HR managers need to have a knowledge base associated with this to benefit the organization. In addition, it is important to always monitor new developments in this area and timely implement the most useful ideas and tools. This will help to build a cohesive, successful and satisfied team. Such people are usually more motivated and interested in the quality of tasks, which has a beneficial effect on most of the company’s performance indicators.

References

Armstrong, M. and Taylor, S. (2017) Armstrong’s handbook of human resource management practice. London: Kogan Page Publishers.

Bailey, C., et al. (2018) Strategic human resource management. Oxford: Oxford University Press.

Bhattacharyya, D. K. (2018) Statistical tools and analysis in human resources management. Hershey: IGI Global.

Bratton, J. and Gold, J. (2017) Human resource management, 6th edition: Theory and practice. London: Macmillan Education UK.

Brewster, C., et al. (2016) International human resource management. London: Chartered Institute of Personnel and Development.

Itani, S. (2017) The ideological evolution of human resource management: a critical look into HRM research and practices. Bingley: Emerald Publishing Limited.

Kavanagh, M. J. and Johnson R. D. (2017) Human resource information systems: basics, applications, and future directions. Los Angeles: SAGE Publications.

Martin, M. and Whiting, F. (2016) Human resource practice. London: Kogan Page Publishers.

Mathis, R. L., et al. (2016) Human resource management. Boston: Cengage Learning.

Reiche, B. S. et al. (2017) Readings and cases in international human resource management. New York: Routledge.

Stewart, G. L. and Brown, K. G. (2019) Human resource management. Hoboken: John Wiley & Sons.

Townsend, K., Loudoun, R. and Lewin, D. (2016) Handbook of qualitative research methods on human resource management: innovative techniques. Cheltenham: Edward Elgar Publishing.

Tyagi, Dr. A. (2017). Strategic measurement of human resource management. Seattle: Horizon Books.

Wilkinson, A. and Johnstone, S. (2016) Encyclopedia of human resource management. Cheltenham: Edward Elgar Publishing.

Zeuch, M. (2016) Handbook of human resources management. Berlin: Springer Berlin Heidelberg.

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