Introduction to Strategic Human Resource Management
Strategic human resource management (SHRM) is a process which integrates the traditional human resource management with organisation's overall strategic planning and implementations. It helps organisation's in setting their goals and objectives and in solving their problems or issues. It helps in identifying the external opportunities and threats, increase productivity, meeting expectations of customers, etc.
Sometimes firms face resistance due yo lack of cooperation from the employees, fear of incompetency, improper strategic assignments, conflicts among the employees ad economic and market pressure influence the SHRM (Aghazadeh, 2003). The present study consists of challenges and issues faced by the management companies in managing their people, analysis of SHRM models, theories, and approaches. Along with this, it also contain impact of strategic approaches of the people management . In the end, conclusion consists of the key findings and recommendations.
Critically Analyse the Context, Challenges and Issues Facing the Management of People at Work
Organisations are facing challenges and issues in many fields which effects the working environment of them. According to the Underwood, 2000, “The biggest challenges of organisations are to managing change.” (Underwood, 2000) Employees resist to change due to the fear of economic status, position, reputation,etc. As per the Armstrong, 2008, “Due to going global companies changes their working environment which affects its performance”(Armstrong, 2008). It takes time in managing these changes and making employees to adjust and accept those changes.
For example, Shell faced oil reserves crisis, the changes taken for solve this problem affects more than 80 Shell operating units (The 5 greatest examples of change management on business history. 2015). Similarly as per the view point of Sheehan, 2005, “Long working hours, target pressures and high competition increase stress and conflicts in organisation” (Sheehan, 2005). Companies are facing challenges in managing their work and employees. Work burden and targets leads to stress which impacts on the environment of the company. Due to the increase in stress, conflicts and disputes among the workers also increases. By his study Armstrong, 2008, said that “Managers need to solve these problems of stress and conflicts effectively and on time before it damage to employee's personality.” (Armstrong, 2008). Conflicts ad disputes affects the production and working of organisation along the life of employees. For example, the conflict among the employees of British Airways leads to decrease in number of customers.
On the other hand, Perkins and Shortland, 2006, demonstrate that “The reason behind the stress and conflicts is imbalanced between work and personal life” (Perkins and Shortland, 2006). It is the responsibility of Human Resource Manager to create a balance between professional and personal life of employees. This imbalance sometimes affects the personal life of employees and create conflicts ad misunderstandings. To solve this issue, companies are providing flexi work hours, paternity leaves, vacations, etc to the employees. Deb, 2006, found that “Acquisitions and mergers creates diverse work culture”(Deb, 2006). Acquisitions and mergers leads to increase in organisational structure which increases diversities among the employees. Companies needs to manage diversities and help employees in adopting them.
In the favour of the above Mattacks, 2004, identified that “Different employees are from different backgrounds which create diversities in companies”(Mattacks, 2004). Companies face challenges in making employees comfortable with each other and working as a team. This diversities effect the relations and create conflicts. For example, DiversityInc.com is one of the leading firm which is working for diversity management In respect to the same context Dhar, 2008, said that “Working environment of company should have ethics and values” (Dhar, 2008), Ethics and values helps organisations in running long race and achieving sustainability. This feature of companies help them in satisfying their customers and employees which in result creates a good brand image of it (Challenges facing 21st century HR managers. 2015).
The Role and Priorities of the HR Function
Different organisations have same HR functions but have various roles and priorities. To explain this, two companies are taken into consideration which are Hotel Hilton and Next Plc. HR functions of both the companies are same but have different roles and responsibilities. In recruitment process of Hilton, it hire those candidates which have good communication skills, convincing power, who has knowledge of hotel management on the other hand Next Plc hires candidate on the basis of retail knowledge, sales strategies, innovative marketing strategies, etc.
In hotel, training is provided on the basis of communication skills, interpersonal skills and in ext plc, training is provided on the basis of technical skills, sales and marketing skills, manufacturing skills, etc. In Hilton, HR department evaluate the performance by the employee's skills for satisfying the demands of customers by providing them delicious food of their requirement and I Next plc, the performance of employee's are evaluated by the targets they achieve, effective strategies they form, innovative ideas they give, participation in meetings and group discussions, etc.In Hilton, HR department look after house keeping, laundry, food department, front office department, accounting department whereas in Next Plc HR department looks after the information and technology, marketing, finance, store operations and merchandising.
The priorities of both the industries are different as Hilton's priority is to satisfy customers by providing quality services and facilities as per the demands and needs of customers on the other place priority of Next Plc, is to satisfy customers by providing effective products by using attractive marketing strategies.
Different Internal and External Influences Which have Brought these About
Internal force which is including HR function of Hilton Hotel is effective representation of management and staff during providing the services to the customers. On the other hand, the case of Next PLC, the internal element to influence HR function is taking car of the displaying the objects in the stores and keep the tight control over the merchandise allocation for buying the bestselling goods and services to the customers. Company is having the large number of suppliers within the UK and selling out diversified products to the target market.
In Hilton Hotel, the internal factor of influencing HR function is diversified employees who are dealing with the various service users within the firm on daily basis. Due to this, the HR department of organization has given the emphasised on provide the training to the staff members to learn the new languages. On the other hand, in the case of Next PLC, HR function has influenced by the rules and regulation of the government of UK because company is having some responsibilities towards the community.
Now the external environment, it includes various forces such as political, demographics, technology, etc. For Hilton Hotel, the political environment of UK has influenced HR function. The reason is the organization has to follow the various codes of conducts during performing the operations in the different areas of UK. On the other side, the technology is another factors which influenced HR function of Next PLC because for selling, billing and other work, the employees have deal with the new technologies. In this aspect, company has required to give the training to the employees to work with the new technological equipments.
Changes for Next PLC Organisation over the Next Three Years
With the time, market and perceptions of people are also changing and to fulfil the demands and needs of people to satisfy them, it is important to bring changes in the industry also. The economic changes In retail industry is arrived with the changes I environmental factors and technological factors. These changes affects the human resource department of Next plc also. The company starts its online website so that people easily access it and buy from it whatever they want.
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In last three years Next plc brings changes in may factors such as smart shopping, competitive prices, increased market position and brand reputation, increased profitability, etc. In this three years, there comes improvement in the economic conditions of the retail industry which leads to increase in number of customers. As per a research, it has bee found that hypermarkets ad superstore are decreases by 2.9% in recent years. From the last three years the fastest increasing channel is online shopping which has given retail industry a new height and growth. With the increasing use of internet sales are also increasing which provide may benifts to the retail industries. In these years, Next Plc is using modern and innovative marketing strategies for attracting more people of diverse backgrounds.
Analysis of the Application of Strategic HRM Models, Theories and Approaches in Practice
There are various strategic models, theories and approaches which help organisations in achieving their goals under effective performance. According to the Kumar, 2010, “HRM approaches consist of two factors, one is human factor and other is business surplus” (Kumar, 2010). The approach related to the human factor give emphasis to the employee satisfaction and its performance in companies. Firms can achieve competitive advantages by using its workers effectively as per their expertise. This help it in achieving its defined and planned objectives.
Similarly Druker, 2003, got that “Resource based approach is for increasing company's capability by developing its staff members” (Druker, 2003). Organisations can increase its production and operations by developing its employees by providing them various learning opportunities such as training and development programmes, various activities, etc. Investment in the employees and other staff members adds value to the organisations.
As per the research of Kelly, 2001, “Herzberg's two factor theory helps in determining the performance of employees and paying them accordingly” (Kelly, 2001). As per this theory, employees who are working well should be paid more and those who are not working should be paid less. Similarly Hernandez, 2009,said that “Herzberg's two factor theory leads to increase bin motivation level of employees” (Hernandez, 2009). The concept of this theory, leads to increase motivation level of employees which helps in improving their performance and brings development in them.
On the other hand Kumar, 2010, researched that “Maslow's need hierarchy theory brings improvement in the field of human resource management” (Kumar, 2010). This theory shows the basic needs of the employees which are necessary to fulfil. This theory gets societal popularity and also helps employees in knowing hierarchy of needs according to their importance and preferences. In contrast of the above Huang, 2001, identified that “Despite of getting popularity Maslow need hierarchy theory is unstable and superfluous” (Huang, 2001). It is complex to implement and operate the concepts of this theory I real life. The model is based on the wishes of man rather than reality.
According to the Jackson, 2008, “Universalist approach is a high commitment which links with the enterprise's human capital” (Jackson, 2008). As per this approach, firm can improve its productivity and efficiency of human capital by using appropriate HR practices. Motivation programmes, Reward practices, training programmes improves the employees and this leads to employee satisfaction. In favour of above Inkson, 2008, got that “The key component of effective HR practices are horizontal integration and harmony between policies ” (Inkson, 2008).
This concept is somewhere is disputable as there is not any specific definition of the policies that have to be applied. On the other hand Armstrong, 2008, got that “It is difficult to measure the performance as it is determined by using various factors.” (Armstrong, 2008) This approach consists of various factors and strategies which are to be considered at the time of performance evaluation.
Impact of Strategic Approach to People Management in Contemporary Organisations
Strategic approaches in respect to the people management improves performance or the companies and bring effectiveness in human capital. According to the Deb, 2006, “Organisations which are using strategic approaches for managing their employees are accomplishing the goals and objectives in more better way in respect to others” (Deb, 2006). Strategic approaches leads to proper strategic planning and designing of strategies by keeping alternative with it. This concept helps at the time of any risk or problem and prevents from wastage of time and inadequate utilization of resources.
For example, Amazon is one of the best strategic player because it forms innovative strategies while keeping the market in mind. Similarly Jackson, 2008, found that “By using strategic approaches in development of human capital companies can improve its responsiveness and innovation potential” (Jackson, 2008). By providing learning opportunities in the form of training and development programmes, managerial games and activities firm can improve its member's potential and abilities. This also helps them in fulfilling their responsibilities towards the firm by achieving the objectives. For example, BIC Corporation uses defender strategic approach which helps in maintaining its growth and satisfying the customers (Different Theories of human resource management. 2015).
From the above figure, it is clear that 13% of the organisations are unfamiliar about the strategic approaches ad suffering from various issues and 87% organisations are familiar and by using various approaches they are achieving their objectives along with effective employee management. As per the view of Underwood, 2000, “Strategic human resource management benefits organisations by cost reduction, achieving sales levels, increasing number of users, quality of product, increase in productivity and increase in market position ” (Underwood, 2000).
As per the figure, it is cleared that 70% of the organisations have found positive change in their performance while using SHRM while 17% find minor changes and 13% does not find any kind of change in their performance. From the research of Huang, 2001, it has found that “Companies can strategically manage their various human resource factors which includes recruitment and selection, career management, job satisfaction, motivating employees, and training and development” (Huang, 2001). Use of strategic HRM impacts the organisation in many factors and this is in positive manner.
For example, Prospector strategy of 3M helps it in achieving growth in new market and bring various new opportunities for it. Similarly Dhar, 2008, demonstrate that “Strategic HRM improves the cooperation and coordination between the HRM department and line managers” (Dhar, 2008). This helps companies in maintaining good relations with employees and also helps them in working according to the HR practices ad policies (Caliskan, 2010).
Strategic human resource development is a part of human resource development which improves the various factors involved in HRM. It is also called as modern approach which works for improvement and development of companies along with their employees. Companies are getting change in their performance and management strategies while using strategic HRM.
There are various approaches, theories and models which help them in achieving their objectives and increasing market positions. There are both positive and negative views related to the strategic approaches but the result obtained is in favour of it and shows that firms can achieve their targets effectively by using strategic HRM.
Companies need to select appropriate strategy for effective people management at the workplace. Use of wrong strategy at wrong place can lead to wastage of time and resources as well.
Organisations not only use strategic approaches for achieving its objective and goals but also use it for employee development.
At the time of strategic planning for HRM, company should also take care of their competitors approaches and plan accordingly.
Firm should develop the different HRM policies in the favour of employees development for conducting training, educations etc for their future growth.
Organisation should create work cultural environment by using ethics and values.
For managing change, organisations should use effective strategies which encourage employees to adopt and accept the change.
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