Strategic Human Resource Management

Strategic Human Resource Management

Introduction

Human resource management can be broadly defined as the use of strategy to manage the most important asset of the organization i.e. the employees. It deals with brining the philosophies, strategies, policies, programs, practices and processes together to achieve the coherent goals of the organization. The overall purpose of the function is to make sure that the people are the cause of success of the organization. (Armstrong, M. , 2012)
People resourcing always has operational, knowledge and indicative indicators. The operational ones include the use of optimization tools for the current tool and process. The knowledge indicators include the understanding of the benefits of the current ways used by the HR professionals. The indicative tools include the strategic intent and the coherent corporate strategy leading to good HR processes. There is also the concept of contingency based resourcing where specific features existing in every sector especially the sectors facing high turbulence.  It is not necessary a predicament of only bigger organization. The employees need to be resourced in a way that the organization’s goals match with the goals of the employees as well (Iles, P. 2009). It is a much known fact that today; employee management has become very crucial for any organization. One o f the most important goal of the human resources function if the mobility of the entire workforce. An organization can only achieve its goals if it has the right set of people with the sufficient skills and attitude and who are willing to work for achieving the organization’s goals. This is one aspect of resourcing. Another aspect is when there are so many options that the employees have these days, how to motivate them to stay with the organization. Also, underperforming employees need to be asked to leave and this also forms a part of people resourcing. (Hults, B. 2011)

Why do we need HR?

Coming to the question of why an organization needs an HR, most organizations need a clear of of achievable goals can should be aggressive in one aspect and also practical in another aspect. HR helps them  improve productivity levels and create a whole set of new and better ideas. It helps them understand their customers and their requirements better. (Hussain, S. I. 2013). The number of customer concerns and queries get minimized because the whole work gets streamlined in the first place itself. The function links the role of the different people to the actual needs of the customer. The service time would be reduced and hence a significant portion of redundant costs can be avoided with the same. (Hussain, S. I. 2013) So by adding an HR unit, the processes like staffing, hiring and job description management would be streamlined for better competitiveness and efficiency and at the same time ensure that they are getting the best people to do the job (Armstrong, M. , 2012). The main aims of having an HR function in an organization are:
  • Organizational effectiveness
  • Human capital management
  • Knowledge management
  • Reward management
  • Employee relation management
  • Bridging gaps between reality and existing space
  • Meeting different kinds of needs

What value does HR add to an organization?

When we talk about why we really need HR in an organization, we try to look at what added value is it giving to the organization. Today all economies are so volatile and susceptible to continuous changes that create need to check what is good and what is adding to profit growth. Transaction automation, handling of HR functions etc is aiding the streamlining of processes in organizations today(Hults, B. 2011). Important areas like compensation management for the senior executives which was a difficult task earlier has not become easier with the involvement of the HR involvement. It has been found that in many cases, even manufacturing companies have been able to reduce their costs. The basic reason for this was the use of HR tools to redesign their business processes, redesign jobs and develop models that are competent in the competitive landscape. This helps companies to align their processes to match up with the changing environment. Waste costs can be eliminated current resources can be managed in a better and easier manner. HR management was earlier connected to only day-to-day roles like transaction management, payroll handling etc. But now it has expanded to a more strategic role including other spaces and horizons and assisting in the whole decision making process (Hults, B. 2011).It is obviously a known fact that to have a good strategy the organization needs to have a clear understanding of its own capability. The capability of any organization is its people and this forms the crux of the HR function. These people need to be trained and supported so that they work towards achieving the goal of the organization. HR provided assistance in this sphere as well. 
Another aspect that may have been overlooked is that HR helps in the spread of information in a proper and structured format so that employees are well informed about what the organization wants to do (Hussain, S. I. 2013).There are other things like performance, productivity and gratification that can be aided with the HR function in place. 

Staffing

This activity makes sure that the organization has the required number of employees to meet its needs. The employees are hired in a lot of different way. The only end result is that they should be able to deliver the required performance standards set for them. This means that it should be able to get the best place, in the optimum place and when required.  To achieve its goals, the organization needs to hire new people, retain the current employees and then fire the old employees who do not fit into the vision of the company. Firing is generally considered very negative but at times it is as important as hiring. \This strategy is as important as other aspects like finance and marketing (Shiri, S. 2012). The concept of employer brands comes into play here. The whole scheme offered by employers to their prospective employees could be in the form of a compensation package or the other negotiable terms in the agreement. Along with these, employees should also feel a part of the culture of the organization and seek a superior feeling for themselves. The feeling should relate to the feeling of achievement for the employees. 
Recruitment and selection are two different things in any organization. 
  1. Recruitment- Getting the prospective list of candidates that meet the requirement specification and are eligible to fill in the vacancies of the desired post is called potential recruits. For example, an organization has uploaded a vacancy online and people apply for it. The list of all the people who actually applied for the post become prospective recruits for the company.
  2. Selection- Out of the recruitment pool, we pick the candidates that best suit our requirements and these are the final selected candidates. 

Performance management

Once we are done with our staffing process, the performance measures come into picture. The whole aim of to motivate the workforce to achieve the organizational goals. They should be self motivated and see a benefit for themselves if the company does well. It has been seen that attrition rates of companies are rising these days (Medina, E. 2012). The reason for most of this is not bad compensation but rather an unfriendly work environment is one of the major causes that employees do not want to work for a company. Employee would assess the job in a more positive manner when the surrounding workplace is more supportive and friendly. The culture of the organization permeates to every single individual eventually and affects the performance in the long run. In order to monitor the performance of the employees and to keep them motivated. The organization should first monitor how the employee has performed as an individual and as a group. After this they need to decide how they will work on improving his/her performance.  This can be divided into two types of activities:
  1. Identification of underperforming employees and working on improving their relative performance
  2. Maximize the delivered performance of all the employees

Administration

This process aims at employees get the perfect justice in the eyes of the law and ethical practices. The governance of the organization should be such that employee-employers relations are on healthy terms at all times and employees do not have any concerns. The whole procedures, laws and rules are laid down on standard documents. The documents serve as the standing guidelines for what is marked as correct and what is marked as incorrect. The organization design should be very effective along with the design of the job description. People often say that this does not add any value to the organization but in the long terms it lays the base for sustainable Human Resources policies. Every department needs an administrative element to function effectively (Razali, M. Z., & et all, 2010).

Change Management

Change is a very continuous process in nature. In order to cope up with the changing requirements of customers and the market an organization should be able to adopt change as a necessary factor. The resourcing function is responsible for communicating the change and motivating the employees to accept the change as a necessary procedure for the company to work properly.  The organizations that are most acceptable to changes are the ones that survive competition in the most efficient manner. 
Workforce planning or resourcing has moved way beyond only hiring, firing and retention. It needs a whole plan to keep and the employees. The beginning is with a strategic plan that is based on analysis of internal as well as external constraints. We need to observe the general trends happening on a national, industry and international level so that the organization can keep pace with the kind of skills needed to stay competitive in this changing business environment. The main goal is always about keeping the individual goals of the employees aligned with the goals of the company. Strategic planning involves analyzing the current assets in terms of the workforce, planning future requirements and establishing a need gap to fulfill. The solutions for fulfilling this need gap are then laid out according to the mission statement of the company. (Cotten, A. 2007)

Based on a working model developed, seven steps have been developed for effective workforce planning.

1.    Define the strategic direction where the organization wants to go. 
Strategic planning have now become very important in all public and private organizations. Every Organization needs to have a clear and succinct plan that includes what the organization wants to achieve and what it will do to achieve it. We need to define the goals, objectives and mission of the company. Along with this, they should also decide how to link financial performance and results to their plans and align employees or human resources to the same plan. (Cotten, A. 2007)
2.    Compare with the external as well as internal environment in which the firm operates
It is important that we look at the political, social, cultural and technological aspects of the background in which the organization operates. To do a thorough analysis every organization needs to have a micro and a macro level focus. On the macroeconomic scale factors like industrial trends, labor markets and technology can be observed and put into the planning aspect. Some examples of these trends are expectation of workers from the company, access of information, change in demographics of the workforce etc. In the micro level, they need to understand what is happening in their own organization in terms of the labor and demand supply, the strength of the economy in which the company operates, the political factors etc. (Huls, J. 2014) The external analysis is conducted for the sole reason that it should be able to tell them how their planning will affect the workforce in the long run. Some of the factors in internal analysis would be the organizational culture that employees are familiar with, retirement risks, recruitment and retention data etc. Some other factors like need of overtime workers. This helps us track the need of hiring additional workforce for the organization.
3.    Model the existing workforce
Once the HR people understand the current workforce and how the desired goals  can be achieved. In order to model the workforce, they should include permanent employees, prospect new employees, and contract employees. They can analyze whether they would need additional workforce in form of new employees or contract workers by assessing the current resources and set objectives. For the same reason, companies can maintain an employee inventory that tracks the kind of skills and resources maintained by employees. (Cotten, A. 2007)
4.    Assess the need of additional employees and estimate demand of total employees in the future
Mathematical tools can help them assess the additional employees they would need to meet the goals in the future.  
5.    Identify gaps and develop gap closing strategy
In doing so, the HR personnel  should be able to list the prospective sources of additional recruitment and finalize a proper and official plan of hiring the additional employees.
6.    Implement gap- closing strategy
The HR department have to finally hire/ fire any additional workforce based on the set demand 
7.    Analyze effectiveness and revise the plan when needed
The aim of this step is to warn organizations that they need to continuously monitor their workforce needs and check that their strategies is being put to the best use. This occurs at two levels. First involves checking if the whole plan has been implemented properly or not. Second this involves checking what is being achieved by the current plan and if it is in line with the set plan. 
Talent management is tracking the need to have certain set of people and then taking measures to meet the set goals. Failure to have good talent management can actually lead to shortage of employees and eventually to failure (Capelli, P.  2008). This includes recruitment, selection, hiring, retention etc. On the narrow scope, these are stress of workforce planning and ensuring that future requirements of the company are served. The most commonly used tools are talent pools, talent recruits etc. 
Talent management has not been adopted by most companies but it is yet to be integrated in a proper manner. The anticipation of shortage of talent in the coming years forms the base of the whole talent management practice. Technology is now being vested into combing and coordinating processes. Companies still have different sets of databases for different things. Most of the organizations have shown very poor performance in terms of integration (Oladapo, V. 2014). Talent management practices like performance and learning can be integrated to generated better and easier to interpret results. All CEO have accepted the need to good talent management practices like performance management for meeting the goals of the organization. AT the same time, they have realized the importance of streamlining processes into single databases and combining the processes. 

Retention Strategies

Finding the right employees is important and so is keeping the employees with organization. Finding the perfect employees is very time consuming and hence companies are now directing their efforts to keep their employees motivated to stay with the company. Compensation and learning are some of the most important things for any employee and are a reason for employee satisfaction in most cases. In a study conducted it was observed that employees generally asked for two things:
  1. Clear goal setting
  2. Better career management and succession planning. (www.hr.com. 2012)
There is a need for better analysis when it comes to retaining employees. Some other factors that employees found important were better selection procedures. Retention requires the availability of all kinds of experts like compensation experts, benefit experts and organizational design experts (Oladapo, V. 2014).
It is also very important to especially retain the top performing employees of the organization. For the same reason, compensation is one of the most widely used tools/ aspects to retain employees. Most of the respondents in the study felt that compensation was the most important aspect for employee retention (Taylor, S. 2010). Another factor that came into picture. There are certain rewards that are not financial in nature. These include things like flexible work timings, maternity leaves, tax exemptions etc. It has been observed that employees with children find it difficult to struggle between work and home and hence value these kinds of non-financial rewards more than their financial rewards. It is more than compensation that can motivate the employees to stay with a company. For the younger employees especially, continuous learning plays a very important role. Training and development programs keep employees motivated. E-learning has now become a very important tool in employee learning due to its cost advantages and flexible options. Oracle has defined the goals for retention in any organization:
  • Hire the correct people in the first place
  • Immediate managers ability to manage should be improved
  • Constant feedback given to employees
  • Give freedom to the employees to manage their career goals
  • Drive movement of talent across the organization
  • Improve and measure the retention strategy with time.

Conclusion

Today, the world is changing in terms of the business scenarios. The picture of talent management has also changed. It is no more linked to performance management only. The slow economic growth is affecting businesses drastically and so is the scarcity and necessity of good and efficient work pool. It is very difficult to get the right set of people to work for the organization. Also, increasing attrition rates are causing people to switch jobs continuously and employer loyalty is no more a question in picture. Digital media channels and social networking has changed the way businesses work. People are socially continuously and there is transparency regarding what other companies are doing. Hence it is very important that Human resources see the management of Human Resources and resources pooling as a very important tool. Talent recruitment and retention enjoys the status of being one of the most important policies in any human resource department. People’s expectations from the companies and the top management are growing and this has made HR a very strategic function now. It cannot be termed as a mere transactional entity now. The analytic nature of HR makes it a long term strategy entity rather than a short sighted entity. 
To achieve the set goals and objectives the senior management needs to give it sufficient importance which is not prevalent in the current practices and policies of most companies. Most companies view HR as a transactional entity now losing out to their competitors. It is important to integrate all the Employee resourcing tools and policies of talent management, recruitment, staffing, administration etc into a single entity. The clear vision and mission of the HR policies should be very clear to all the stakeholders of the company. The transactional nature of tasks like minimizing time required to fill vacancies, designing the best compensation practices, hiring the right set of people, identifying key performers in the organization etc cannot be ignored.
For all this to happen, the most important thing is access to key information and insights all rounds. It is important to continuously monitor and track what is working and what is not. An organization that follows these practices is said to be innovative in the true sense. Without access to this kind of information it is impossible to achieve the required goals. It is crucial to act to get the best people for the company in the least possible time. 

References:

1.Armstrong, M (2012), Armstrong's handbook of reward management practice: improving performance through reward.
2.Capelli, P.  (2008), Talent Management for the Twenty-First Century. Retrieved from Harvard Business review.
3.Cotten, A. (2007), Seven Steps of Effective Workforce Planning.
4.Hults, B. (2011). Why HR Really Does Add Value. Retrieved from https://hbr.org/2011/12/why-hr-really-does-add-value
5.Hussain, S. I. (2013). How HR can add value? Retrieved from http://whrppk.com/_files/SFT-018.pdf
6.Medina, E. (2012). Job Satisfaction and Employee Turnover Intention.
7.Oladapo, V. (2014). THE IMPACT OF TALENT MANAGEMENT ON RETENTION. Journal of Business Studies Quaterly .
8.www.hr.com. (2012). Driving Successful HR Leadership: Talent Management’s Role in Core Business Strategy.
9.www.hr.com (2012). Talent Retention: Six Technology Enabled Best Practices.
10.Huls, J. (2014). Talent Management: Powering Strategic Initiatives in the PMO. Thought Leadership Series Report .
11.Razali, M. Z., & Vrontis, D. (2010). The Reactions of Employees Toward theImplementation of Human ResourcesInformation Systems (HRIS) as a PlannedChange Program: A Case Study in Malaysia. Journal of Transnational Management , 229-245.
12.Shiri, S. (2012). Effectiveness of Human Resource Information System on HR Functions of the Organization?A Cross Sectional Study . US-China Education Review , 830-839.
13.Taylor, S (2010). Resourcing and Talent Management. 4th edn.
14. Illes, P. (2009). Employee Resourcing

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