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Alignment is all about the integration of the decisions that the company take with respect to its employees and the decisions which the company take with respect to the results which the company want to achieve. Before we understand the alignment, it is necessary for us to know the hierarchy of accountability.
Hierarchy of Accountability
Figure 1. Hierarchy of Accountability
It is clear from the shown HRM hierarchy that the alignment of HRM with the strategic goals of the organization forms the ultimate level of the HRM accountability
Need for Alignment
In the earlier days, the primary role of the HRM was to ensure compliance with laws, rules and regulations. Though it is an important and necessary function, there are latest developments that had led the primary function of HRM towards emphasis on results.
The companies which have the competitive edge over the other companies have recognized that human capital was the primary reason rather than financial or technological capital. So it is accepted nowadays that people are the company's most important asset. Hence a huge amount of money is spent on human resources like the compensation, incentives, work life programs, etc. If a company invests such a huge amount in anything else, it can measure the return but it is the one in which the return is not measured.
Strategic planning is considered by some companies as a way of life. Some companies consider it as an exercise. But in today's world, strategic planning is a requirement to all. The general steps followed by companies in the strategic planning process is shown in the diagram below
Figure 2. Strategic Planning Process
The strategic planning process consists of three steps namely
Annual performance plan
Strategic plan deals with the high level goals, strategies and needed resources. The Annual Performance Plan deals with the operational level strategies and the time frames to support the strategic goals. The Performance Reports are used to submit the status report on the goals and its accomplishment.
The process of strategic planning differs from company to company. In certain company the planning process may be confined to top level management but in certain companies the planning authority may be delegated to lower level managers and line managers. Hence it is up to the company to decide the hierarchy of strategic planning process.
The strategic planning is the formulation of plans that are to be implemented. The implementations of these plans are very important to align the HRM with the mission accomplishment.
Strategic HRM Activities
There are many activities that make the organization to achieve its strategic goals. Some of them are listed below:
Linking performance management to mission accomplishment
HR Self Assessment
Reorganization: in recent days there are more amounts of downsizing and streamlining activities going on in many industries. Hence in order to accomplish the missions the organization must restructure its human resource.
Workforce planning: workforce planning in an important activity that leads to the mission accomplishment. A very good example of workforce planning leading to the mission accomplishment is seen in the Army of any country.
Linking performance management to mission accomplishment: now the organizations must insist that any action that the HR performs must be related in some way to the mission accomplishment. When the workforce is motivated towards the mission accomplishment, then the organizational goals are achieved easily.
HR Self Assessment: the self assessment programs must be conducted so that the performance is measured as and when the employees perform their jobs. Proper rewards in the case of merit and proper counselling at the time of default can improve the performance of the workforce.
Finally whatever the actions are performed they must be measured. If the actions and their usefulness are not measured, then actions are meaningless. Usually these actions are tracked by the HR office. In many organizations the people find the measuring is very useful for the goal accomplishment.
There are many methods in which the performance can be benchmarked. Some of the important methods are explained below:
Activity based costing
Malcolm Baldrige quality award criteria
Benchmarking is the process of setting standard based on the company which excel in the particular field. This is done to focus more on the organizational results.
Balanced scorecard is the basic framework which is used by many organizations to convert the strategy into operational terms. It concentrates and measures various aspects like financial aspects, customer related aspects, internal aspects and regarding learning and growth.
Activity based costing is the cost management technique in which the true cost is determined including the overhead for any product or service. ABC is used by various companies.
Malcolm Baldrige quality award criteria define a set of values to be followed. When the company strives for the award, it automatically exhibits excellence. This is an strategic advantage of any company to measure the alignment.
In the past, there is not much relationship between the corporate HR and the top management. But this relationship is necessary in the strategic human resource alignment. The relationship of the corporate HR with the top management and the line management are described below:
Corporate HR and Top Management
The relationship between the corporate HR and top management varies with different companies but there are certain relationships which is common in all organizations. They are listed below:
Reporting relationships: the reporting relationship must be direct
Management advocates: there must be a HR representing the HR department in the top management committee so that the decisions taken by the HR regarding the alignment can be implemented effectively.
Credibility: the HR managers who are formerly program managers gain credibility. Hence the decisions taken by the HR will impact the program and good level of communication will take place.
Culture: the culture plays a very important role in the strategic HR alignment and it has to be given the proper importance.
Value: when the actions are implemented they must make sure that it adds value to the business otherwise the actions performed are useless.
The HR Office and Line Management:
To know the real problem faced by the employees in mission accomplishment can be known well by interacting with the line managers because they are directly involved with the maintenance of the employees towards the business goal. This may be in production or programming environment. The following are the relationships between the HR office and the line management:
HR as consultant: HR must act as a consultant with the line manager and assist them in handling the people. He must get the complaints or problems faced by the employees and then suggest measures to overcome them.
HR as a contributor to mission accomplishment: HR managers must identify the importance of HR office for mission accomplishment. There are a lot of activities that an HR can do to accomplish the mission. This includes the recruitment, employee development and staffing.
HR as strategic partner: many mangers believe that HR managers are the true strategic partners and they expect the HR office to have high level of knowledge and concentration towards the mission. They want the HRs to get more involved in the planning process.
When the strategic HR alignment is implemented, then the journey of the company is towards the integration of the HR department in the business planning process. The several steps that follow the Strategic human resource alignment are:
Involve the HRM into the Business Planning Process completely: in the business planning process, the representatives must be made involved so that the human resource goals can be integrated with the strategic plans and in the areas in which the organizations lack the performance.
Give more importance to those activities that assist in decision making: the HR department must also concentrate on the functions and the effectiveness of their aims and goals. They must assist in the decision making and the decision making process. The HR department must make an impact so that the top management believes that they are capable of decision making. To make that impact, the goals of the HR must be decided based on the actual business needs.
Measure the outcome of the human resource management: as the HR is evolving to be more broader, HRM should evaluate their activities to increase the organization's performance as a whole
Enhance the environment between the HR and the top management: the working environment so that the responsibility and accountability are shared between the top management and the share holders.
The concepts and the activities discussed in relation to Strategic HR management and alignment seem to be easy theoretically. But when we start implementing this concept in any organization we come across many barriers and it is really very difficult to implement and measure. But if these barriers are crossed, then the company can see improvements in terms of profit, performance and increased employee satisfaction. All the companies today strive towards this coordination between the Human resource management and the mission accomplishment.