(Business strategy, p-3)The meaning and nature of HRM has aggravated much debate (for an overview see Legge, 1995).Sisson (1990) Distinguished HRM by explaining four distinguishing features, that is the assimilation of personnel policies with business planning; responsibility From specialists to line managers responsibility has to be shifted; uniqueness in the management of employee relations and an emphasis on securing employee dedication and initiative.
Guest (1992, p.42) argues that HRM is designed to produce, ``Strategic integration, high commitment, high quality and flexibility'' and that, Strategic integration refers to the ability of the organisation to integrate HRM issues into its strategic plans, to ensure that the various aspects of HRM cohere and for line managers to fit in an HRM perspective into their decision-making.
Hendry and Pettigrew (1986) contrast that strategic HRM is featured by four fundamentals: the use of planning; the design by a coherent approach and management of workforce systems underpinned by some philosophy; business approach is coordinated with the HRM actions and policy; and considering the people of the organisation as strategic resources in the accomplishment of competitive strategy.
Human resource requires in an organisation will vary at different stages in the business life cycle and so HR policy choices need to be personalized to the appropriate stage (Kochan and Barocci,1985; Lengnick-Hall and Lengnick-Hall, 1988).
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Sisson (1994) suggests that it was the pursuit of competitive advantage in the.There is a number of different approaches in HRM to aid the development of business strategy. It can be professed as social ethics, reminding the senior management about their social responsibilities.HRM department spent most of time functioning on personal welfare problems. The main concern of HRM is the control of personnel as well as reduces the absent rate of employee, work force budgeting and headcount. In other way of HRM helps to develop the business, likewise, to adapt the company with the change and strives to have positive influences by using social science applications to man agreement problems by via job redesign, job satisfaction scheme and techniques of communication. Sometimes HRM deals with job recruitment, transfer and termination by the request from manager. Moreover, human resource management concerned strategic business planning, developing long-term human resources plan and industrial relation strategy.
HR planning and acquisition
Organisation design & structure
Management of employee relations
HR mobility management
HR toolbox management
Figure: Human Resource Management system
The key success of any business organisation is human resource. So HRM use these human resources effectively to meet the strategic business objectives of the organisation.
2. Necessity of alignment between organisation's corporate strategy and objectives and its human resource strategy:
P-133,134.In perfect world, the business and strategic organisational plan are the translated form of organisational mission and goals. According to the principle of alignment, to achieve corporate goals in every aspects of an organisation's activities have to be incorporated and pull together. The performance of the people within the organisation depends on the achievement of strategy and vision which in turn calls for high level of motivation and dedication among employees. The organisational mission, goals and values is reflected by the performance of the employees and their excellent performance relies on the opportunities how much they are getting from the business.
P-75.In an organisation different functional area like: marketing, manufacturing and human resource, after formulating corporate and business level strategy managers need to translate strategic precedence into these areas. This contains all the different aspects of business but predominantly have to be comprehensible between the requirements of organisation's strategy and HR policy. There are two types of fit that HR policy and practices require to attain:
a) Internal alignment
b) External alignment
Internal Alignment: In internal alignment managers must have to make sure that their HR practices are all associated with one another within the organisations to set up a formation that is reinforced mutually. From organisations point of view the whole variety of HR practices-job design, training, staffing, performance appraisal and compensation must have to be focused on the same personnel objectives.
External Alignment: The link between business strategies and key initiatives in human resource are mainly focused by external alignment.
3. The processes required in order to assess the effectiveness of human resource strategy and its impact on overall corporate strategy:
Always on Time
Marked to Standard
Diagram: Typical strategic recruitment process
Strategic business plan
Human resource strategy
Human resource plans and policy
Pool of applicants
Source: Nankervis A, Compton, R, Braid, M, 2005, Strategic Human Resource Management (6th edition),
Cengage, South Melbourne.
A major concern is a recruitment and retention of staff; especially where the pool of availability of workforce is limited. However, due to the requirement of high skill personnel, a shortage of prospective recruits exists in an organisation. [Business .s 2.ref].The decision of staffing has been formalised by the HRM department at head office.
Organisation [Managing people: fresh perspectivesÂ By Bates Bronwynne, p-214] provide work for people in different position to achieve their own goals. Most of the organisations have vacancy at different time around the year and they need to be filled them on time to continue their work effectively. For recruit and select the best person for the vacancy organisations have to follow certain processes. The personnel decision process helps the organisation to make a decision about the person to who is going to appoint. It makes sure that it will be fairly treated with all the individuals who are going to apply for the post. All the candidates are evaluated on the basis of related skills and behaviours.
The outputs of every decision affect the working lives of employees, whose requirements must be met. The organisational productivity increasingly depends on these employees because of hiring right person for the job. The human resources decisions based on the following seven steps:
1. Getting job oriented information through job analysis.
The process of identifying tasks, duties and responsibilities is job analysis. Once it has been completed, job analysis leads to identify the knowledge, abilities and skills required to do the job that is job description. After that, organisations will continue through job specification.
2. Identify the measures of job success:
There is way of measuring job success called criteria and that is measured through organisational psychologist.
3. Identify predictors and measures
4. Determining the relationship between and predictors job success
5. Developing a recruitment strategy
6. Implementing the selection process
7. Determining the worth of selection system
An organisation basically follows two strategies for recruiting suitable qualified individuals. These are-
An Organisation first tries to fill an open position internally through current employees inside the organisation by advertising.
There are wide range of strategies for recruiting people from outside the organisation like-giving advertisement at newspaper by providing information about job requirements, job duties and responsibilities. The other way of recruiting is through internet. It will create problems for them who don't have the access the internet. Large organisations visit campuses of universities of technologies to recruit their candidates is known as campus recruitment. Sometimes organisations employ human resources recruitment agencies and their services are to provide the whole recruitment process. These are not on low-cost. The least costly external recruitment technique is employee referrals technique. This is a technique by which ask to someone in current employees about they have someone who is interested for this open position. The main advantages of external recruitment are that helps to get new ideas and skills into the organisation. Sometimes it does create problems for them because they don't have knowledge about the new environment and culture. Employees need to spend more time on that.
Selection: The process of choosing appropriate candidates for the organisation when it has received applications for open jobs is known as selection. This is the final steps of recruitment process. It is the combinations of eight basic steps.
Carrying out application form
Checking of reference
Arrangement of psychological test
Arrange interview for selection
Medical check up
Making an offer to successful candidates
There are some additional terms which used by the organisational psychologist during the process of selection. This are-job selection ratio, realistic preview of job and cut-off.
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It is very important and ongoing issue. It's a serious problem when an organisation will have to face continuously for the estimated future. An organisation always wants to retain employees in short of supply and they want to have alternatives. Organisations always keep going on developing their own plan to retain employees by conveying responsibility. The main base of retention job description, recruitment, selection and orientation. (Keeping your valuable employees: retention strategies for your organization's most important resource, By Suzanne Dibble, p-27, 31).Mainly retention focus on job satisfaction and fit with the organisational culture and the strategies based on this should focus on maximising three types of satisfaction. These are personal, professional and social. If organisation fails to recruit right person for the right track then organisations has to suffer and employees has to suffer as well. For example; hidden cost incurred by the management to fix that problems. For that reason organisation has to loss their productivity. From the employees' point of view-they have to face problems due to not having proper skills in specified job. They have to spent more time and energy on finding new position. Overall they become frustrated. Communication, recognition and future orientation are the key attributes for successful strategies for retention. There are different types of retention strategies based on organisational situations-strategies based on compensation, strategies based on work environment and strategies based on career orientation(Strategies for managing IS/IT personnel,Magid Igbaria, Conrad Shayo,Idea Group Inc (IGI), 2004 - Business HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0"&HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0" Economics,p-13).
Strategy based on compensation: There are some organisation focuses on compensation such as IT firms.
Strategies based on work environment: Most of the organisations focus on internal environment of the organisation or the culture of the organisation.
Strategies based on career development: some companies focus on retention strategies through career development.
Training, Learning and Development:
Training plays an important role for the development of all employees which responds to individuals and helps to achieve organisational requirements by improving performance and understanding (Armstrong, 1992).Considering with the strategic direction, how the organisation's core competencies of employees can be identified and advantages taken from environmental factors. From the training and development terms, this can implement the classical training cycle and business planning come close to determining training needs (Mayo and Pickard, 1998). [Human resource development: learning & training for individuals & organizationsÂ By John P. Wilson, p-88]
Figure: Business objectives within the training life cycle (Winter, 1995).
The training strategy is a system that determines the competencies required for the organization in the future and how it can be achieved. Organisations need these training strategies for different perspectives like-
-To increase the productivity through expenditure on capital improvements
-To increase the productivity through spending on developing human capital
(http://ezinearticles.com/?How-to-Develop-a-Training-Strategy&id=1608871; How to Develop a Training Strategy-By Janine Sergay; 18.08; 2.50pm).
Different methods of training for people:
Generally there are two types of training methods.
a) On-site training methods
1) On the job training:
In this training method, trainees get training under the direction of someone and encouraging them to gain knowledge and observe more and more from the existing experienced employees. Though it's formal training so every employee get some initial knowledge from it.
2) Job rotation:
This training method allows people to move in different department of the organisations. Through this job rotation employees develop skills in different section more than they would get from staying in one department.
Apprenticeship is a particular form on the job training though which a particular level employees used to get information about skilled trade (Goldstein & Ford, 2002).For example; different company like:-electrician,plumber,carpenter,pipefitter,sheet metal worker etc. Is used this approach.
b) Off-site training methods
1) Classroom lectures:
It's one of the common methods of job training. It can provide large number of information at a time and easy to deliver it to the large no of trainees at a time.
2) Instruction in the form written material or forms based on computer.
3) Computer based training (CBT):
It's a way training by which trainees can communicate and transfer and get information from instructor through computer, television etc. (Goldstein & Ford, 2002).It's distance learning.( Work in the 21st Century: An Introduction to Industrial and Organizational Psychology By Frank J. Landy, Jeffrey M. Conte,p:331-334)
Development of HR:
Human Resource is the framework for employees can develop their personal and organizational skills, knowledge, abilities. Human resource development include; employee training, employee career, development, performance management and development, coaching, mentoring, succession planning, key employee identification.
<http://humanresources.about.com/od/glossaryh/f/hr_development.htm (23> o'clock, 23 March, 2010)
Understand the organizational needs' and future demand as well as future capability, and know what talent it has available to it. And prove, as far possible, a career challenge to individuals that helps them to meet their aspirations. In developing the organization, personal development also important for the organizational improvement, because a individual persons are the set of organizational power mean resources.
In bellow there the method of development:
Learning resource centres
360 degree feedback
Training facilities getting to grips with the requirements of a job quickly, and by improving the knowledge and skill of worker it allows the employee better quality, and enhance of skill based on the employee could lead to their job enrichment with benefits to both the individual and the organization.
Motivational impact of training in a manifest when staff feel a sense of reorganization when sent on training course, and after been trained they are motivated to acquire new skills, particularly when rewards follow the acquisition and use of skills.
Identification with organization could be fostered when a better understanding of mission statements and corporate objectives is achieved through training.
(Graham, H T, Bennet, R. (1995). Human resource Management (ME Book).Eight Editions. Singapore: PWD Redmond)
Strategies for positive employee relation:
(Employee relations: how to build strong relationships with your employees
Â By Laurie Dicker, p-2) Employees are the stake holder of the organisation and can't be compared with task, functions, process or products. Emotional support and personal considerations are required for them to understand them. It's very complicated to draw up employees' inventory and arrange them in warehouse in a systematic way. Any decisions regarding this will attempt a negative impact on them and may cause a break down in operations. So it is very important for the organisation to identify and value those differences and always give importance on the achieving positive and fruitful employee relations. The main concern of employee relations strategy:
-How to minimise the conflict by maintaining employee relations through building stable and cooperative relationships.
-How to achieve employee commitment though involvement of employee involvement and communication processes.
-How to develop interest in employees towards the achievement of organisational goals.
Strategic direction. ( Strategic human resource management: a guide to action
Â By Michael Armstrong)
The approaches of human resource management towards employee relations:
-To drive them for commitment: To get all the employees with the organisations by winning their heart and minds and make sure a fruitful return on training and development.
-A emphasizing on mutuality: getting the letter across that we are all together in this.
-A shifting of collective bargaining in the organisation to individual.
-By using of employee involvement techniques.
-Through applying total quality management (TQM)
-To use human resources more effectively sometimes increase flexibility in working environment, including multi skilling
-By giving more importance on team work
(Human Resource Management- By Derek Torrington, Laura Hall, Stephen Taylor,p-453)Once organisation has established it is very difficult to change the organisations culture, this means to change the employee relationships culture is also difficult. The organisation will become more successful when senior management think employee relationship strategically in employee perception rather than rival organisations. It can be achieved simply by aiming to recruit and retain more effectively and by developing employee relationship strategies to increase the overall satisfaction of employees though chances (like feeling interest in job, job security, positive completion, and influence them performance) and decrease the dissatisfaction.
Performance in an organisation cannot be defined but it can be measured. It's measurement of muti-dimentional construct depending on variety of factors (Bates and Holton, 1995). Bernadin el al (1995) concerned that Outcomes of work should be defined as performance because it creates a strong linkage with organisational goals, customer satisfactions and economic contributions. It is about managing of the organisation in the perspective of internal and external environment. There are different stages of performance management showed in figure 2.1:
Agreement of performance
Monitoring and review against agreement
Review of main performance
Figure 2.1: Different stages of performance management
Performance management involves continuous review of performance against organisational objectives, requirements and plans and the performance agreement, enhancement by implementation and developments line-up for the next. Business strategy, employee development and total quality management (TQM) are main processes in the business that should be linked with the performance management for achieving business performance (Hartle, 1995). Basically the force for vertical and horizontal integration is performance management.
Vertical integration: Vertically It can be achieved in two ways. Firstly, it facilitates the coalition of strategies and plans of the business with individuals and teams. There targeted aims are those that support the success of corporate goals.secondly, the organisational core values and capabilities should take place through vertical integration as well as values adopted and the level of potential achieved by individuals.
Horizontal integration: It is the association of performance management and human resource strategies that deals with valuing, paying, relating and developing people. Organisations effectiveness can be increased through the impact of performance management. The effectiveness of the organisations can be improved by adopting with various processes of managing, motivating and developing people through successful integration with performance management (Performance management: key strategies and practical guidelines Michael Armstrong Kogan Page Publishers, 2000 - 259 pages, P-2-10). It shows in figure 1.3:
Figure 1.3: Performance management as a central point for integrated HR activities
a handbook of remuneration strategy and practice
Michael ArmstrongHelen MurlisHay Group
Kogan Page Publishers, 2007 - Business HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0"&HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0" Economics - 722 pages
The main purpose of reward is to increase job performance, productivity, meet the customer expectation and to hold recognition. In other way-
-To achieve the goal
-To accomplish the task on time
-To take out boring from work place
-To promote the employee to work
-To meet the higher and lower order needs
Strategies for reward:
All employees are in the reward strategy for example: line managers, stake holders. All the employees work hard with skills and effort in return they get salary and other performance bonus from employers. It's also good relationships developed between employees and employers through good working environment and excellent communication. In broader sense strategic aims include:
-To introduce a more incorporated approach to reward management and encouraging the employees through continuous personal development.
-To develop flexible approach.
-To reward people according to employees contribution.
-To make a clear specification about what behaviour will be rewarded and why.
Reward management: a handbook of remuneration strategy and practice
Michael Armstrong, Helen Murlis, Hay Group
Kogan Page Publishers, 2007 - Business HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0"&HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0" Economics - 722 pages; p-35, 39
According to Contingency theory applied to reward:
-Different reward strategies are required for organisational diversity and cultures.
-Different reward strategies and its usefulness vary according the organisation's policies and practices.
- Business strategies may take forward the business strategy inside the organisation. The interrelationship between the employees and managers will influence the strategies at different levels in the organisations.
-performance related pay should depends on the way motivation of employees
Employee reward Michael Armstrong; CIPD Publishing, 2002 - Business HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0"&HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0" Economics - 528 pages; p-91, 94, 95
Initiatives for specific rewards:
It depends on the examination of present circumstances in the organisation and need of evaluation of the business and its employees. Examples of some possible initiatives:
1) The establishment of contribution pay scheme through replacing of present methods of contingent pay
2) The initialisation of new grades and pay structure
3) The substitution job evaluation scheme with more clarified scheme that shows values and needs of the organisation.
4) The improvement of flexible benefit system
5) The arrangement of announcement and training programmes to tell all the employees about the reward policies and practices.
Development of Reward strategy:
Development of strategy:
In today's organisation is facing fast changing economic environment, technological advancement and globalisation. Organisations have to cope up with these changes. The close fit between business strategy and HR strategy actually help to reach their desired target.
Aligning human resources and business strategy
Linda Holbeche Butterworth-Heinemann, 2009 - Business HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0"&HYPERLINK "http://www.google.co.uk/search?tbs=bks:1,bkv:a&tbo=p&q=+subject:"Business+&+Economics"&source=gbs_ge_summary_r&cad=0" Economics - 498 pages
From the business point of view, it has to take account on trend such as concentration on core business, market segments, get maximum values from reward system, and give more importance on flexibility. They have to change the old system with the best practices to meet these requirements. The design of reward system must need to be fair and need to operate consistently to recognize individual's needs. There are many steps for developing strategies:
Determine the main issues for business strategy that affects the reward and policy
To find out crucial success factors for the business and need to think implications for human resource and reward strategies.
Need to keep in eye on old reward strategies and identify any change require for that to adapt that with new changes of the organisations.
To identify the implications for HR plans to establish future needs.
Discuss with the consultant about how to develop reward strategies
Consider external factors like policies of government, income tax regulations, people's pay and pressure from local or international.