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"A company is known by the people it keeps"
Honestly I am not aware of the person behind this great line but its true what else can be a good start to my topic on Human Resource Management. To put it in a simple way HRM is managing skilled labour in the best interest of the organization. But in corporate perspective Human resource management is an internal business function that is responsible for recruitment and management of personnel as well as guiding them in the right direction in order to achieve organisational goals. HRM function is generally performed by specialist individuals with HR skills but in some rare instances, it is also performed by department and unit managers. It is a strategic approach of managing the individuals employed by the organisation in order to drive them towards achieving the objectives of the organisation. The employees are considered to be the most valued possession or asset a company has. Therefore it is a vital process that involves hiring individuals, enhancing their skills, developing their ability and utilising, maintaining and rewarding their performance in line with their tasks and business goals.
The aim of HR is to add value to the ROI (return on investment) through the capital employed by the organisation while reducing the risk in an effective way. There are certain key features of HR managers which include management of the organisation, handling personnel issues, managing staff and managing the industry. Strategy defines the direction and potential of the organisation in the long run which aims to achieve competitiveness for the business by aligning its resources in a stiff environment in order to satisfy market and stakeholder needs. A strategy can further be defined as providing direction to the business from a longer term perspective and analysing markets that can be focused on and the type of offerings that can be made in order to determine the ways of improving the performance of the business while gaining competitive advantage. The strategy also decides the various skills, resources, capital and other components required to achieve that competitiveness while taking in to account the external and internal factors that influence the performance of the business and determines the values and expectations of stakeholders. However, there are different types of strategies that exist at various levels of the business.
2.0 Corporate strategy:
Corporate strategy deals with the organisational goals as a whole to determine the aims and scope of the firm in order to satisfy stakeholder expectations. Strategy at this level is considered to be vital as it is massively determined by the actions of stakeholders in the business and aims to assist in strategic decision making across the organisation. Therefore corporate strategy is strictly and exclusively stated in the mission statement of the company.
3.0 Business strategy:
Business strategy deals with excelling in the field of competition in the market of its presence. The focus is on strategic decisions products, customer needs, competitive advantage and exploring new opportunities. Businesses have to strike a balance while ensuring that every business unit performs under tough circumstances and sustains the challenges. They also have to explore opportunities in their own individual business units since such an approach ensures that each department within the organisation makes the highest possible contribution towards the over goals of the organisation.
According to the experts, a business consists of a combination of resources which must have a striking balance with the needs of the market. Therefore, this is considered as the heart of strategic management. A business strategy can be defined as balancing the internal capabilities and external factors where value is added through gaining competitive advantage by utilising individual capabilities. However, some of these capabilities are distinctive and managing them effectively by aligning them relevantly inside the business is based on the understanding the responsibilities. The responsibilities of HRM personnel to be effective include becoming part of strategic management and adding value while contributing to the development and implementation of the firm's strategic policies and programmes. Such a contribution of expertise reflect on HRM's support provided to the business strategy and is highly regarded by the higher management within the firm allowing personnel or HR specialists to take part in strategic decision making. To achieve such goals, the firm needs to employ the right people assigning them the right tasks at the right time cost effectively.
4.0 Alignment between HRM and corporate strategies
Right from the beginning HR's role was to establish compliance with the rules and regulations or the various laws of the organization. But in recent times some developments have been made to the roles of HRM although this would still be and remain the primary function of the HRM. In the new developments HRM has got to broaden up its focus of aligning these primary functions with the company's objectives and goals. I totally agree with these developments because alignment of human resource management with company's goals would pave a much faster way to accomplishing organizations objectives and missions.
4.0 Assessing the effectiveness of HR strategy and its impact on overall corporate strategy:
Measuring the effectiveness of HR strategy on the overall corporate strategy can be carried out by identifying key performance measures to analyse the return on investment of HR products and services. It is essential to link the corporate strategy with strategic HR priorities and performance measures from both HR and the employee's perspective. Such activities help in identifying the relevant performance measures and strike a balance between value and cost effectiveness and assists with designing and implementing the HR scorecard to assess the real impact of HR, its value and cost effectiveness. The scorecard works as a tool to measure the contribution of HR towards the overall performance of the firm. It consists of critical performance indicators on HR investments, costs, practices and competencies. As HR responds to the challenge of making a greater strategic contribution to the organisation, HR functions are using scorecards in order to manage HR as a strategic asset.
Eventually the HR functions concentrating on such a strategy by balancing its products and capabilities with the organisational strategy will be able to separate itself as a strategic partner. HR alignment is bringing together the decisions about people with decisions about the outcomes the firm is aiming to achieve. Such integration of HRM into the organisational planning process, emphasising HR activities that support the overall organisation goals and constructing a sustainable link between HR and management, organisations become capable to ensure that the management of HR contributes to mission accomplishment and personnel become responsible for individual HRM decisions. Majority of firms concentrate on measuring the efficiency and effectiveness of the HR activities. Such measures are generally focused on output that concentrate on internal HR processes and functions and act as a performance metric to improve to HR policies and procedures. HR tends to focus its functions organisation wide while HRM is includes the process of measuring the need to reach out to assess the impact HRM has on organisational goals and objectives and the data obtained from that can be utilised for decision making.
Defining practices to measure the effectiveness of HR management and the support it provides to the organisation mission has been a challenge. The complexity and time consuming nature of assessing such performances make it even more complicated. Productivity is one of the few elements that can be measured easily by tracking the number of activities completed in a certain time period. However, in order to measure the human resource management, its appropriate measures need to be identified and included in strategic planning. Only a limited number of plans tend to identify relevant measures that are aligned with specific mission or support goals and offer provide specific information. However, even these fairly good measures tend to focus on HR processes rather than its outcomes. For instance some organisations measure the minimum numbers of employees require to perform a specific task in a specific time limit instead of all employees within a unit focusing on one single task to complete it before starting on other tasks etc.
5.0 HR strategies for mergers, acquisitions, strategic alliances and joint ventures:
Mergers and acquisitions are considered to be vital strategic tool for many organisations looking to achieve strategic goals and increase shareholder value. However, they offer massive instability such goals, functions and responsibilities of important individuals. The HR executive is one such individual who is critical in planning and managing while integrating various processes. The role consists of addressing talent and leadership capabilities, civilised misalignment, employee appointment, executive deployment and retaining talent. According to research over half of all the mergers and acquisitions fall short of meeting expected financial and organisational goals. Therefore, it is important that the performance and measurement of firms and human resource capital outcome meet expected targets in order to achieve the overall organisational goals.
A well designed HR strategy for mergers, acquisitions, alliances and joint ventures must look in to various past frame works and models that are successful. HR executives must be able to deal with the complexities of the issues arising from such ventures. HR plays an important role in mergers and acquisition in increasing the chances of success. Government laws, cultural differences etc present threats that can be dealt with efficiently by the HR. Joint ventures present valid business and revenue reasons with a firm that possesses balancing capacity and resources. For instance distribution network, tech advancement, equity finance etc making joint ventures a popular and attractive proposition to set up strategic alliances. Joint venture can be defined as two or more companies coming together under an agreement to share resources and form a new establishment under equal control. A successful joint venture includes identifying appropriate partners, jointly producing a business proposition and selecting appropriate partners who can support by contributing to such a plan, expected attention must be paid to check the credibility of the parties involves through verification of facts and information by engaging in meetings etc.
It may all look and sound so easy to say do this, do that, this is in alignment this isn't but we all know that this is all not very easy. Many private sectors, public sectors and big companies have been struggling with these issues. Now we have a wealth of information in our hands, many researches have been done, articles have been written, many of them have tried and some have fallen we need not fall but we can learn it from them. But the only way to begin is to BEGIN. It is in our interest to ensure that a highly skilled workforce is ready to face the demands of the 21st century. It might seem difficult, it may appear new but we are all aware that to accomplish something common we have to work together.
"Its kind a fun to do the impossible" - Walt Disney.
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