In todays dynamic and high tech environment it is very important for a business or an organisation to keep up with the pace and manage its resources in the most effective and efficient manner. It is not one man's job to run the show but requires a workforce and to utilise this resource in the most successful manner, some sort of management is required. This defines the need of Human Resource Management in any organisation. Further to manage the workforce well derives the need of thinking and planning. This essay discusses Human resource management, its importance, defines strategic thinking, examines the need of strategic thinking in human resource management and also discusses the key aspects of strategic Human Resource management. Also, through a case study on IKEA, to analyse how strategic human resource management can be a competitive advantage.
Firstly analysing what is human resource management and its need in an organisation. (Byars and Rue, 2006) defined human resource management as a system of activities and strategies that focus on successfully managing employees at all levels of organisation to achieve organisational goals. Managing people is an important task and is of great strategic relevance as employees are the most valuable asset of an organisation. The goal of any organisation is to achieve success through its employees by developing good relations with them and working towards common goals. This is where thinking and planning to effectively manage human resource comes into the picture. (Therith, C.T , 2009) states 'HRM is the main department which push the organization to meet the goal because it work with line manager, have a good communication with all department in organization, know clear about organization's goal and objective. So HRM is very important to gain success and can be making Human Resource a competitive advantage.' It includes tasks like keeping the right employees in the organisation, increase productivity by training and development programmes, improving job satisfaction, creating employment opportunities etc. Thus, this implies to have a win win situation for any organisation it is important to have a well-built human resource management and to do so a strategic approach is most needed.
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Further, for Human resource management to administer a large workforce need to think strategically. This brings in the need of Strategic Thinking in Human Resource Management. Wotton S. & Horne T. (2000, pg 5) states 'Stratetegic Thinking involves gathering information, formulating ideas and planning action.' Strategic thinking is purely a concept of having a plan of action for goodwill of a firm. Human resources tend to plan, arrange and apply strategy from the hiring of employees. While creating a human resources plan it is important to consider employees wants and needs and what can company deliver. Flourishing management of people requires such planning for a company to meet requirements of employees which affect the way things are done at a business place, beginning from hiring practices , trainings , assessments & technique. Being able to plan for the needs of employees by thinking ahead can help to improve the rate of skilled employees who chose to remain working for a company or are considered as an asset to a company for their smooth operations. And that is where a strategic thinking takes place for human resources better management.
There are various approaches for managing Human resources; however the most important aspect of human resource management is strategic thinking which is applied over employees which acts as the most important element for a company to stand in market. Taylor, S., Beechler, S., & Napier, N. (1996, pg 960) states that 'Strategic Human resource Management is used to explicitly link HRM with the strategic management processes of the organization and to emphasize coordination or congruence among the various human resource management practices.' Human resource management department becomes a factual business partner by helping achieve strategic objectives with employee growth leading heighten the business competitive advantage. Analysing the strengths and weaknesses of human resource management can prove to be helpful in classifying the characteristics of which help or hinder the achievement of strategic objectives (Dr Chaneta, I., 2010, pg 5). Organizations that adapt strategies of Human Resources and practice their internal and external environment consistently surely out-perform their stability in market. Since Human Resources Management set their objectives and strategies by overlooking organizations mission or purpose, and objectives. While recruiting and selection human resources keep organizations strategies in concern and rather work as one of their strategy for selection. Such approach like strategies produce more informed and purposeful Human Resource Management. Thus, Strategic thinking and human resources play hand in hand for successful operations in organization.
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Strategic Human resource management is a broad approach to study but has certain key features which are to be kept in mind by the department at all times in order to reach the competencies. However , another important aspect discussed by Gravan,T.N. (1991, pg 22) 'The strategically oriented HRD function must have continuous knowledge of its external environment.' Many scholars have discussed various aspects of human resource management strategies. Dr. Fan, D.(2013) have explained the key aspects as Long Term Focus ; New Linkages between Human Resources and Strategic Planning ; Proposed linkage between HRM and organisational performance ; Inclusion of line managers in HRM policy making process. Firstly discussing, Long Term Focus , which focuses on long term planning of all human resource strategies. Gravan T.N. (1991, pg 27) states 'Strategic decisions are usually concerned with the whole organisation and their ability to affect the long term direction of the organisation'. Strategic human resource management requires a long term planning , goals and involvement among the top management. Second, New Linkages between Human Resources and Strategic planning has come out to be the most important element in strategic HRM. Baker, D. (1999, pg 52) explained one of the major key aspects as 'SHRM requires a holistic approach, with not only an internal integration between personnel systems (recruitment, selection, rewards mechanisms, appraisal performance management), but also an integration between those systems - summarised in an HR strategy - and the organisation's strategy overall. It can be two sort of linkage, First One way linkage which takes place when Human resources involves in the organization from the time of implementation. Second Two way Linkage takes place when HR takes place right from the point of formulation and acts as a support by applying there strategies with organization for its betterment. The third aspect is Proposed Linkages between HRM and organisational performance. Katou, A.A (2008, pg 120) explains this aspect as 'the literature points out is that the link between HRM and organisational performance is considered like a 'black box', i.e., lack of clarity regarding 'what exactly leads to what.' This means the HR strategy should be always be aiming towards organisational performance. There should be a direct link between the two. Last but not the least the fourth key aspect is Inclusions of line managers in the HRM policy making process. Where Strategic Human resources involves line managers actively by conducting training sessions involves in coaching and analysis of inferiors. They are held responsible on fulfilling and considering Human resources needs within their respective departments. And more importantly plays an active role in making sure that operations run on Human resources policies, planning and processes. Such involvement of line managers evident itself in the set strategies and helps in achieving targets. ' Martell K. & Carroll S.J. (1995, pg 255) states 'A CEO of a large trucking department echoed his statement saying Human resources management is too important to be left in Human resource department.'. Three proportions of the line manager's role are Analysing skills, Coaching skills, and share learning style.
Further to analyse the importance of strategy human resource management, discussing a case study on IKEA's strategy. (Maxwell, G. , 2008, pg 11-13) IKEA is one of the largest Swedish retailer companies dealing into well designed furniture and at the low or affordable prices. IKEA also had its vision and mission which was 'to create a better every day life for many people'. According to IKEA their vision always depended on the business idea and human resource idea which deliver their employees a motivation to excel both as individuals and professionals so that they can get together and work on one mission which was to make a better life for themselves and their customers. Human resources of IKEA has surely provided facilities to their employees like flexible timings, part time and full time hours, emergency leaves, sick leaves, casual leaves, leaves for caring of dependent or kids, employee assistance programs, information , advices on work life balance and health promotion. While talking of IKEA's example one of their phase in the journey of the industry was when they did health promotion programme in IKEA Glasgow ,which was not expected to be a particular priority. However, in addition to provide healthy meals and large public cafeteria all employees could take an advantage of free medical footcare and massage session during work time. Offering such service and activities was to relax their body and mind since they invest their so much time on sop floor.
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On an individual level, it becomes sometimes a very hectic phase of life when the try to balance their profession and personal life. And IKEA human resource department realizes and tend to work on their strategies for making their employees feel relax even at the work environment where at the same time they also work efficiently on the organization's mission or goal. The idea was to make them enjoy their work. So, this is surely one of the successful example for importance of role of HR which made appositive impact upon co-workers , they felt that the company cares about them as an individuals and insisted them well to feel loyal towards the company. Such arrangements resulted a positive and improved effect up on attendance and staff retention, raised the profile of fitness and health and insisted staff to feel that there is an investment on them.
Therefore, Human Resources and their set strategies play a crucial role in order to make a considerable involvement to the success of organisation. Since they participate majorly in how closely the skills of the organisation are aligned with its strategic mission and plans, individual performance and productivity, quality amongst the employees of decision making which is a very important aspect for an HR to judge amongst people to people before hiring more specifically amongst line managers. Adapting SHRM approach requires the alignment of HR strategies and overall business strategy. Hence, HR involves into various theories to live up to the organisation's mission and vision which is the overall strategy of any organisations. While explaining the importance of a strategic human resources in an organisation it concludes fairly that no matter how small and large scale firms are there, the role of human resources cannot be played by any department as a secondary responsibilities. Since one department of one skilled employee cannot work on strategies of a business and their responsibilities at the same time. Since every firm have different departments or areas, highly skilled employees, with categorized responsilities within one firm to achieve a common goal. Human resources strategies involve regular training, counselling and guidance for the employees and also involve people to extra activities which take care of the employee's stressful environment.