Linking Human Resources To Strategic Goals

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Human resources management is a wide term and is based on the effective usage of workers and employees to accomplish the objectives of the organization. It presents in each and every organization. Human resources management is a planned approach of managing people effectively for performance. It aims to establish a more open, flexible and a caring style so that staff will be motivated, developed and managed in a way that they can and will give their best to improve business performance and develop organization culture.

Good human resource management depends on the organization having a clear vision, purpose, mission and values. The vision is needed to motivate staff. The purpose is needed to ensure that staffs are all working towards the same goal. Without a mission, it is impossible for organization to know what works need to be done, job descriptions cannot be identified. Values show how the organization will do its work what kinds of staffs are needed to do it.

Why does HRM??

In recent years, business management has successfully managed to start to change the culture of organization away from a bureaucratic mentality to a service minded & innovation based culture. This is a long-term process that requires a careful management. The change of mentality cannot be carried out overnight, and require skilful and balanced management. In most companies, there is a human resources department which plays a very important role in managing, controlling, developing and maintaining the workforce which significantly contribute to the profitability of the organization. They are in continuous contact with the top-level management and are responsible for assisting the management for running the process effectively. They are also responsible for attracting a skillful workforce and carrying out recruitment and induction procedures, training and development, and settlement of the employee in a particular work environment, he comfortable in.

The filed of HUMAN RESOURCES MANAGENEMT has been evolving to address newly emerging and increasingly complex areas of responsibility within the organization. Human resource specialist are being asked to understand and deal with variety of functions, including implementing and interpreting legal policy and procedure, administrating intricate benefit and compensation programs, and dealing with potentially litigious workplace complaints. Today's Human resources specialists are faced with unprecedented challenge in meeting the staffing needs of constantly changing organizations in an era of highly competitive labor market. From strategic planning, human resources play a key role in all facets of an organization.

Meaning and Basic Functions of HRM:

The definition of HRM emphasizes the sphere of influence to encompass 'the strategic approach to manpower management in an organization'. The manpower management has come in application because the employees of an organization, individually or collectively, are the main contributors to the achievement of business performance. HRM thrives on the strength of the relationship between the top management and workers of the company.

HRM involves the development of a perfect blend between traditional administrative functions and the well-being of all employees within an organization. In most companies, there is a human resource department, which is further divided into main two sections depending on the type of the organization.

The first one is HR administration section. The section of HR is responsible for taking care of employees' general work related problems such as working environment, extra work pressure, conflict between employees, bosses and top management.

Where as, the other section is responsible for handling the recruitment functions, training employees according to the corporate policies, providing information about company, corporate education etc.

In this way, they handle most of the functions in an establishment; as a result, the top management highly depends on them.


"Well done is better than well said"

- Benjamin Franklin

By that he was implying that words alone cannot achieve much. Rather, they should be supported by well thought actions. In the language of business this means that strategic planning allows companies to put down on paper where they are, where they want to go, and how they plan to get there. But the best planning in the world does nothing for a company if it does not act. In this aspect strategic human resources management has been defined as, "the linking of human resources with strategic goals and objectives in order to improve business performance and develop an organizational culture that foster innovation and flexibility."(Chaturvedi, 2006)

In the modern business world, rather than playing a supportive HRM plays a strategic role.


The above figure proposes to divide the process of HRM into three stages. The process of HRM is dynamic and the three stages are closely inter-linked. The first stage is that of formulating of business strategy and translating it into HRM strategic objectives. The second stage is implementing HRM systems based on HR strategy. The final stage is that of evaluating/reviewing the effectiveness and strategic integration of the HRM systems.

Stage 1: Organizational context

The first stage provides ground for the happening effective HRM. In the first stage, the composition of team formulating is very important. The presence of head of HR department in Top management strengthens the pro-active linkage of organizational goals & HRM systems.

Factors to be considered in formulating business & HR strategy:

An important factor in success of strategy formation is availability of required competencies in Human resources. Strategy formulation is influenced by factors like whether they are needed competencies in the organization; possibility of training the employees for developing them and the gaps that exist in terms of the human resources. A critical factor that is important in the formation in HR strategy is the understanding of required organizational competencies for the implementation of the business strategy. Elements of HRM like acquiring, managing and developing the competencies are important for the success of strategy implementation.

Factors like,

Internal factors,

Finance factor

Marketing factors

Cultural factors

External Factors,

Product market,


Labour market,

External Stakeholder

During strategy formation, the head of HR department should be able to appraise the top management about the various policies and practice that are followed and the changes that are necessary for effective implementation of business strategy.

Stage 2: Implementing HRM system based on HR strategy

The vertical, horizontal and temporal linkage conceptualized by GRATTON, HOPE-HAILEY, STILES AND TRUSS (1999) fit here. Various HRM systems like recruitment and selection, performance and management, compensation, training and development, career management, etc. need to be aligned with HR strategy. This is a vertical linkage.

Implementation stage also includes initiative interventions required for organizational development of effectiveness and managing change during process like reconstructing or mergers. The latter is an example of temporal linkage. Temporal changes deal with the sudden changes that are brought in due to strategic decisions.

Factors to be considered in making HR system:

Factors like,

High turnover of employees,

lack of morale and motivation,

low employee satisfaction,

Undesirable work-place politics etc. are looked into and their likely impact on strategy implementation is examined.

HR department plays a key role at the implementation stage. However, processes and practices are implemented for the employees and therefore line mangers, employees and customers play an important role in their successful implementation. The second stage has a two-way link with first stage. Not only are HRM systems aligned with the HR strategy, but HRM systems and their outcomes also provide information pertaining to organizational context for the formulation of business strategy. This two-way link strengthens the role of HR department as a strategic partner.

Stage 3: Evaluation/Review of HRM systems

The final stage of the process deals with the evaluation/review of the effectiveness of HRM system and their strategic integration. The evaluation stage in this process includes various surveys and evaluation processes. Evaluation of HRM systems is difficult because most of the organizations are not very clear as to what they want to evaluate - the efficiency of HR department, the services provided by HR department, financial returns in terms of employee productivity, turnover etc. or improved performance of employees of the organization (Ulrich, 1989). According to Gordon (1972), it is difficult to devise appropriate evaluation methods unless expected outcomes are unambiguous.


From the above figure & explanation it is simply said that the top management prepare an objective & strategy to improve business on the basis of internal and external factors with directly or indirectly affect the business. After that top management authority discuss the goal & mission of the organization with the head of HRM. The head of HRM discuss the strategies with existing employees and handling recruitment & selection process, motivation & training process & thus prepare HRM systems. The information and analyses on the evaluation metrics provide feedback for making necessary changes in the implementation process. The information is also important in the organizational context of business strategy formulation.

The process model provides a generic framework for the process of HRM. The outcomes at each stage may take different forms. For example, as Budhwar and Sparrow(2002) have stated, the importance of specific outcomes at different stage may different.

There are some case studies which applies the above HRM process.

Case Study 1. The railway strikes of 1982 in UK

The railway strikes of 1982 offer a parable of personnel management: It makes the central point of reality - that there is a constant clash of the long-term with day-to-day which erupts, distorts and aborts plans and hopes. It is hard to get any movement without friction or if there is no vision of the future. It is hard to deal day-to-day with what is wrong if there is no idea of what is right long-term. Change is hard to achieve in any organization in isolation of the social changes going on outside it. I look to Human resources management to help managers - and unions - to understand the interdependence of the different culture of the enterprise and of the community. (Personnel Management, January 1983, page 16)

Analysis and opinion:

Thus the immediate future of personnel management seems likely to centre on the concept of employees at work - their expectations have reasonable access to information and authority, to education and a career open to talent, to being consulted on matter which they feel shape their problems and prospects. Personnel managers will have much to say about employers diagnose, anticipate and cope with those expectations - recognizing the mutual interdependence of what any citizen looks for on and off the job to make something of him/himself.

From the above case study it is simply acceptable that Human resources managements are the most important that an organization has, and that success is most likely to be achieved if the achievement of the corporate objectives and strategic plans.

Case Study 2. Euro Disney and the lack of HR's strategic partnership

In 1983, the Walt Disney Company opened in Tokyo, Japan, their first theme park outside the United States. It was a success in Japan which motivated company to start searching for a site for a forth park. In1992,Walt Disney's fourth theme park, Euro Disneyland opened its door to the public with essentially the same attractions as in the other Disney theme parks in California, Florida and Japan. Thus, the company targeted Europe. Euro Disneyland's executive hoped to attract 11 million guests a year. Euro Disneyland was confident that with superior investment and professionalism it would succeed. But the dream of succeeding did not initially become a reality (Burgoyne, 1995).

Evaluation and analysis:

It was mentioned a couple of times, that nowadays, a company's HR management does not have just a supportive role, but plays a strategic role. HR strategies need to align with company's strategies. As a result, a company's HR department must comprehend the laws, the possibilities of the possible risks, the traditions, the culture, and the people of the country in order to minimize problems which can occur.

One of the biggest mistakes that Disney did that Disney's HR management didn't consider something very important - CULTURE DIFFERENCES and need of differentiation in the Euro Disney's project, which should have been dictated by the recognition of diversity.

Euro Disney's management also failed to recognize local employees for their contribution. It is important to involve and reward employees appropriately so that they can enhance the firm's overall success. When employees are ignored, the long-term success of organization is doubtful.

There were also the consequences of HR's ignorance as follows:

Miscalculation of drinking habits,

Misunderstanding of food taste,

Misunderstanding of vacation timing,

Miscalculation of per-capita spending,

Violation of government's law & policies,

It is the responsibility of Human Resources Department (HR) to work out the above preferences of customers. The Euro Disney's case is an example of how critical the consequences can be when a company's HR department is not aligns with company's strategy. Culture differences, labour laws and foreign risk - all of them are part of HR's responsibilities.

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