Organisational Structure of Strategic Human Resource Management

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Executive Summary

HSBC is one of the largest banking services and financial organization in the world. There are around 7,500 offices in over 80 countries that comprise the international network of the company (Hsbc.co.in, 2016).  Strategic Human Resource Management of the HSBC aims to provide high-quality service and products to their customers and client. This is performed by aligning the strategic structure of the company with the strategic cultural program. The positive changes can easily be implemented in the human resource practice of HSBC by implementing and adapting to the existent structural and cultural exercises and utilisation of the resources. Another effective step towards increasing the human resource proficiency and productivity will be regular report and meetings thereby improving the effectiveness of the organisation. An internal performance program standard can also be utilised for scrutinising the performance of the human resource department of the company so as to gain competitive advantage. The existence strategic human resource groups can put themselves to effect by benchmarking against the competitive banks instead of a single bank. The organisation is bound to lose the edge over other competitors if it fails to justify the needs and requirements of their customers.

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Introduction

1.1   Importance of strategic human resource management in organizations
Strategic human resource management is a critical field that can help any organization to increase its competitiveness and benefit in reaching new heights. Currently, HSBC is considering the human equations in order to manage their objectives and goals in the marketplace or while implementing a new technology along with developing the knowledge of the organization, improving the product quality or the customer services. The strategic human resource management is critical to the selected organization for enabling them to survive in the ever-competitive world. Therefore SHRM will assist the organization to come up with a strong strategy so as to gain competitive advantage (Armstrong, M. & Baron, A., 2002). HSBC being a service industry requires a great support and backing from its employee so as to perform efficiently. Therefore the company needs to manage its risk alongside managing its employees; the success will be evaluated on the basis of managing capability of HSBC. In order to attain success, the organization requires its people to be highly efficient and skilled (Kaufman, 2001).
This report aims to establish the importance of SHRM within the organization for evaluating the development of the human resources and its successful implementation, HR policies affecting the HSBC and the role of the human resource management in the organization. 
Report
1.2 Assessing the purpose and role of SHRM within HSBC and evaluation of its contribution to achieving organizational objectives.
The human capital is one of the most critical components of the organisations that are present in the banking sector for achieving the strategic success. The organisations should aim to align the human resource management with the strategy, attitudes, critical human resource skills, behaviour and performance so as to attain successful implementation of the planned strategies. The management of the HSBC should ascertain that they are contributing to the organization while evaluating the effectiveness of the Human Resource management practices. The practices of the human resource management must be linked to the bank performance and its strategy in order to understand the SHRM of the company.  According to Jacques (1999), the level of the contribution being delivered by the human resource functioning to the organization is a vital factor for explaining the SHRM.
SHRM, at the strategic level, can be regarded as an establishment towards achieving the overall objectives, goals and direction of the areas related to the HRM so as to make sure that the management is supporting the business objectives and is coherent to its. On considering it on the 
Administrative level, SHRM can be considered as a daily routine. On the policy level, the strategic framework can easily be defined by the development and implementation of the processes in the system (Osman-Gani, 1999; Wang, 2000). 
The financial performance along with the operational performance are dependent on the strategic human resource management of HSBC. Therefore we can say that the bank performance and the strategic human resource management are highly intertwined suggesting HSBC to take a considerable step. A competitive edge is gained when the activities and operations of the bank are linked to the strategy followed by the bank and the source of this advantage is the human resources of the bank (Barney, 1991; Becker & Gerhart, 1996).

Expansion of IT department in HSBC

2.1 The business factors that underpin human resource planning in an organization
The business factors underpinning the human resource planning in HSBC are:
Business growth: It is one of the most critical factors influencing the HR planning of HSBC. A considerable amount of knowledgeable and skilled human resources is required during the growth of the business for meeting the needs of the business. As HSBC has been expanding ever since its establishment, it required a skilled human resource for handling the new branches.
Strategic HRM strengths: It is another most important factor for HR planning. The company must identify important people who can meet their organizational goals and objectives.  The HR practices of HSBC are seen to be met in a satisfactory manner and therefore the HR planning is seen to be affected by the strengths in the HR policy of HSBC.
Business change: While implementation of the change plans and the programs, the staff is made to meet new demands of the company. In order to meet the new demands of the customers, the online banking system was introduced by HSBC. In order to maintain its success, the company required skilled professionals for working on the online banking software.
2.2 Assess the human resource requirements in a given situation
The process where all the human resource requirements are identified, evaluated and then met with implementation of the relevant policies is termed as HR planning (Randall and Susan¸ 2007). During this process, the human resource needs are evaluated so as to satisfy the demands of the customers. HSBC being a service organization always tries to deliver best insurance and banking services to their customers and constantly is in need of skilled and qualified professionals.
HSBC needs to increase its technical workforce while expanding their IT department. The company requires skilled and professional technical employees to deal with the change and for its successful implementation and maintenance. These employees will be responsible review the system time and again.
Secondly, the current employees will be trained and educated regarding the change so as to equip them with the tools required for adapting towards the organizational change, changing skills requirements and increment of the complexity in the organizational structure. 
2.3 A Human Resource Plan
The HR plan depends on the decisions being made by the management. While preparing an effective HR plan, the business goals must be identified along with supporting the long-term business goals and objectives. The HR plan proposed for HCBS is provided below:

  • Step 1: Determining the business goals: The Company aims to expand its IT department so as to take a step towards innovation and to meet the emerging needs of their customers. 

  • Step 2: Scan the environment: The current human resource objectives along with the organizational structure will be evaluated, and the marketing environment will be analysed. This will help in forecasting the HR supply and demand and supply of the company as per the planned expansion. The expansion of the IT department along with the possible inefficiencies in the plan and the organisation will be assessed.

  • Step 3: Conduct a Gap Analysis: This will help in understanding and analyzing the organization and to organize and allocate the resources for the company. 

  • Step 4: Setting the HR priorities: The HR department will set their priorities so as to achieve all the goals and objectives. The strategies for setting these priorities include developing of a talent pool, engagement of the employee, improvement in the working environment, workplace well-being, retention and motivation of the employees. This part of the plan also includes the training programs of the employees where the expansion efforts, goals and processes will be shared and communicated with the employees. The HR department will align all its strategies with respect to the plan.

2.4 Contribution of the human resources plan to meet an organization’s objectives
The human resource planning can enable the organization to hire skilled and professional employees. Therefore one can add that the organization is able to hire right people with the help of proper and efficient human resource plan. Mentioned below are the methods and ways in which the human resource plan can contribute to the objectives of the organization. 

  • Effective use of employees: The HR department is responsible for hiring skilled people, and these employees must be utilized effectively by the organization so as to attain the pre-defined goals and objectives of the organization.

  • Planning for surplus staff: The adequate and correct HR planning will help the company to cater their surplus and additional staff and will help in placing the extra employees at right place without putting the extra burden on a budget of the organization.

  • Performance improvement: an efficient HR planning will contribute towards a considerable improvement in the organization performance. In order to improve the performance of the organization, the skilled staff will be hired along with motivating the current ones. 

  • Succession planning: Training and education are provided to the employees so as to prepare them for the future important organizational positions. Therefore HR planning helps in securing the place in the organization. 

Purpose of human resource management policies

The human resource policies are seen to play an impactful role in the employee management. It can be regarded as an important tool for managing the risk by letting people know about the current trends and employment standards are per the legislations (Jackson and Seo, 2010). 
The HR policies and their formulation are beneficial in fulfilling the training, ethics and other related requirements so as to commit themselves towards the governmental regulations associated with the welfare of the employees. These policies further help in setting out the corrective measures and behaviour standards for building an effective and cooperative working environment within the organization. Formulation of the policies helps to manage skilled and proficient employees and also support the management by defining their set of rules by outlining the penalty for unacceptable conduct or behavior. 
HSBC, with the expansion of IT department, the major challenges for the company would be ensuring the role play of each and every employee and to formulate a training policy. The proposed training program will incorporate the core purpose, values, business objectives, financial aims, operations and marketing strategy and the commitment of the company towards providing best services to the customers. 
The prime purpose of introducing a training policy is to introduce the new technical employees to the values of the company and to make current employee familiar with the change management. The strong HR policies will lead to providing an edge over their rivals, especially amid the fiercely-competition. Further, the aim of this strategic policy will be to work as per the emerging demands of the customers and to improve the customer services. The company already utilizes various management techniques for improving the skills and abilities of their workforce which include HR policy as well. HSBC will also aim to hire woman employees so as to create a proportion among the gender and to avoid gender bias by formulating strict gender-based policies. The other purpose of the HR policies can be understood from the points mentioned below:

  • Structure: The HR policy will define the organizational structure to avoid chaos and confusion among the employees.

  • Best practices: Best practices with respect to the organization will analyzed using HR policies.

  • Fairness: One of the prime aspects of the HR policies is to indicate that all the individuals are treated equally and fairly.

  • Strategy: HR policies also help the organization to make long-term business plans and help it to that long-term decisions.

3.2 Regulatory requirements on human resource policies in HSBC Bank and its impacts.
The impact of regulatory requirements on human resource policies in HSBC Bank is critical to ensuring that all the policies are being practices fairly and efficiently and organization is abiding by the regulations. HSBC has always been exercising the legal and regulatory requirements and Employment legislation encapsulating the employment rights, employment discrimination, responsibilities and pay (Maamari and Alameh, 2016).
The impact of these regulatory requirements on the HR policies in HSBC bank are being discussed below:

  • Race relation act: The Company considers it to be illegal to differentiate among the employees on the basis of their race, nationality, ethic, colour, philosophical or religious beliefs or minority origin, etc. The person who fails to abide by this law would be terminated from the organization. 

  • Sex discrimination act: The Company considers it to be illegal to discriminate among the employees on the basis of their marital status (including the civil partnerships), gender and sex (includes the reassignment of gender), discrimination on the maternity or pregnancy or on the basis of their actual or perceived sex orientation under the 1995/1997 Discrimination ACT. 

  • Employment Act: Employment law has been introduced by the HSBC which involves discrimination against employees on the basis of race, sexual orientation, age, disability and sex under the employment 2008 Act. This law also ascertains that the part-time employees have to be treated equally as the full-time employees. Further, the tax contributions and NI has to be deducted and are made to pay for HM and customs revenue for their payment. Additionally, the law states that it is unfair to dismiss an employee on the basis of her pregnancy reasons. 

The impact of organizational structure for the management of human resources. 

It has been stated by Mintzberg (1979) that contingency approach and the configuration approach are two vital approaches for the formation of the organizational structure. On the basis of the contingency approach, the organizational structure is dependent on the size, strategy, age, history, nature and geographical span of the activities and environment of the organization. According to Mintzberg, the company should base their structure following the configuration approach which is seen to take factors like the span of control, formalization centralization, planning system and decentralization system in consideration as compared to contingency approach. The company should configure the approach in a logical and consistent manner (Stonehouse & Campbell, 2004) as this approach is a clear indication of the imposed obligations of the individuals and segmented management level.
Weber’s organizational structure (1997) was an ideal organizational culture which was based on the bureaucracies. He proposed his model on the basis of order, legal and absolute authority and logic. The obligations and responsibilities of employees will be defined clearly where their behavior will be monitored using the procedures, rules, regulations and policies of the company. The Weberian bureaucracy depends on  Clear defined roles and responsibilities
A hierarchical structure
Respect for merit
Weberian model and theory reflect primarily on the impersonal attitudes towards the employees. The imperfect employees having personal frailties are considered to be a detriment towards the effectiveness of the company. The Weber bureaucracy and its fact assist in getting familiar with the concepts of process efficiency, authority and labour but the theories of Weber bureaucracy are considered to be mechanistic and outdated at the same time.
There is a need for HSBC to adapt its organizational structure as per the standards of Weber (1997) and Mintzberg (1979) and to focuses its organizational structure on the basis of the strategies, geographic span of activities, size along with respecting the clear defined responsibilities and merit for employees in order to achieve an organized hierarchical structure.

The impact of an organisational structure for the management of human resources. 

One of the most important criteria for making employee understand their roles and job profiles along with responsibilities is the clear understanding of organizational culture. The employee is able to grasp every change and upgrade if he has an appropriate understanding of his working culture (Lynch and Cruise, 2006).
Change in culture usually begins by introducing a small change in an organization which has a great impact (Schein, 1992). Therefore, the organization must have a systematic culture, and any change is culture must be introduced with the large change. With the implementation of IT expansion, the company is expecting a benefit and a considerable change in structure and culture of the company. The expansion of IT will help in efficient working of the bank. When the employees are equipped with IT skills and attitudes in the bank, the business culture will be enhanced, and stability will be provided to the company. The organization will be able to meet the emerging and increasing demands of the facilities and services. The bank will become more diverse and can easily capture the international markets and transform its culture into highly electronic. 

4.2 The effectiveness of human resources management is monitored in an organization.
The HR management of the organization aims to enhance the financial stability of HSBC and to provide a competitive advantage to the company by aligning the human asset approaches and operations with the human resource management system. The HR management of HSBC is committed to gaining high accomplishments and to gain the objectives set by the company, building an advantage and diminishing the expense. The company has an objective for creating the client centred along with successful execution of the HRM which will offer incentives and prices for individuals. The liveliness of the operation being conducted is determined by the human resource proficiency. In order to measure the effectiveness of the human resources management, policies for terminations, promotions, incentives can be introduced. Furthermore, the HRM can be evaluated from the attrition rate. High attrition rate will be considered as the greatest HRM drawback stating that the employees are not able to satisfy the needs of the company and the customers. Whereas, the lower attrition rates along with a comprehensive number of incentives and promotions along with the recruitment applications are an indication of the effectiveness of the human resource management. Additionally, the company can introduce the policy of performance markers for recognizing the movement estimated of the individual workers. 

Conclusion 

The IT implementation will bring about various positive changes in the organizational structure and culture. The company has successfully implemented IT expansion as a strategy for attaining competitive advantage. On linking the business strategy with the activities and functions, the company automatically attains the competitive edge over other companies, and the HR department plays the major role in this. The only way is to execute the strategy with the plan with the implementation of various policies so as to increase the productivity of the company.

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References

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  • Jacques, R. (1999). Developing a Tactical Approach to Engaging with `Strategic' HRM. Organization, 6(2), pp.199-222.

  • Ahad M. Osman?Gani, A. (1999). INTERNATIONAL TECHNOLOGY TRANSFER FOR COMPETITIVE ADVANTAGE: A CONCEPTUAL ANALYSIS OF THE ROLE OF HRD. Competitiveness Review, 9(1), pp.9-18.

  • Wang, Z. M. (2000). Managerial Psychology, People’s Education Press, Beijing (in Chinese).

  • Barney, J. (1991). “Firm Resources and Sustained Competitive Advantage,” Journal of Management, Vol. 17, pp. 99-120.

  • Armstrong, M. & Baron, A. (2002). Strategic HRM: The Key to Improved Business Performance, CIPD, London. BNLS Draft Strategic Plan 2001-2006 (n.d.). 

  • BECKER, B. and GERHART, B. (1996). THE IMPACT OF HUMAN RESOURCE MANAGEMENT ON ORGANIZATIONAL PERFORMANCE: PROGRESS AND PROSPECTS. Academy of Management Journal, 39(4), pp.779-801.

  • Lynch, T. and Cruise, P. (2006). Handbook of organization theory and management. Boca Raton, FL: Taylor & Francis.

  • Maamari, B. and Alameh, K. (2016). Talent Management Moderating the Relationship between Recruitment for the Highly Skilled and HR Policies. Contemporary Management Research, 12(1).

  • Business knowledge for IT in insurance. (2009). London: Essvale Corp.

  • Hsbc.co.in. (2016). Credit cards, home loans, business banking and more | HSBC India. [online] Available at: http://www.hsbc.co.in [Accessed 5 May 2016].

  • Mintzberg, H. (1979). Patterns in Strategy Formation. International Studies of Management & Organization, 9(3), pp.67-86.

  • Stonehouse, G. (2004). Global and transnational business. Chichester, West Sussex, England: Wiley.

  • Organizational Culture and Leadership, Edgar H. Schein. 1992. Jossey-Bass Publishers, San Francisco, CA. 418 pages. ISBN: 1-55542-487-2. $25.95. (1994). Bulletin of Science, Technology & Society, 14(2), pp.121-122.

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