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So what should mean a Strategic Human Resource Management? Does it mean a very strategic mother in a family? Ericksen & Dyer assert that a Strategic human resource management (SHRM) is concerned with the contributions human resource strategies make to organizational effectiveness, and the ways in which these contributions are achieved 2004, p. 4). So if an organisation would like to success, then it is important that they are aligning the human resource management strategy toward the organisation strategy. And ensure the human capital within the organisation is developed toward the strategy goal contribution.
Strategic HRM is based on HRM principles then incorporate business strategy and align with its departmental strategy. So if HRM is a logical approach to the human management, strategic HRM should now be elaborate that it is conducted in a well planned way that integrates organisational goals with policies.
David Guest has come out below model in 1992 (see Figure 1 below). He suggests that if the HR has properly practiced the Human resource Management policies in the model. Then they are likely to achieve the four Human resource management outcomes, and lead to those four organizational outcomes and providing a sustainable HR system with leadership, culture and strategy factors.
Figure 1: (Guest, 1992, A model of HRM)
As the statement Strategic human resource management (SHRM) is the key to improved business performance" (Armstrong & Baron, 2002). Human resource department can play an important role for organization development. "When organizations have a strategy that focuses on knowledge and information, HR is much more likely to be a full strategic partner." (Lawler, & Mohrman, 2003). Otherwise, HR department will only be seen as a "cost center" or an administrative department.
There are three key elements for strategic human resource management:
All managers are HR manager as people they are managing.
All employees are considers as human capital as right investment of human capital will generate return and value.
Human resource management is a matching process by integrating the organisational goals and strategy with the right management approach of human capital.
As organisations battle to get the most from their existing people in an environment characterised by skill shortages, the role of human resource management in fostering employee attachment and commitment is paramount" (Leland, 2005). It simply mean a successful human resource management can be logically judged base on the employee turnover rate and how well they can retain good employee.
The manager's role
Not only Human resource manager has to play the role to manage people. Human resource is also important to all managers, one of the key reasons is most of the managers or companies do not wish to see high turnover. Or legal or becoming a public issue due to mismanage of human resource.
As manager play important role in setting objective for organisation or department. It is important the manager always setting a "SMART" goals, the smart goal are referring to specific (what to achieve), measurable, attainable, relevant (to the goal is set) and Timely. With the SMART goals, employees are more likely to participate without much complaint. And they are likely performs better.
All managers should always listen to the voice from bottom, because "Voice is not a one-sided process" (Landau, 2009), with open ears, manager is likely able to invite more ideas regardless if they are constructive.
Manager should inspire trust between manager and employee. High trust from employ can create a high performance work system within their department to promote the organisational effectiveness. "Low trust will incur high cost to the company" (Covey, 2008)
In general, manager should perform the following HR function to ensure employees are well taken care off:
To ensure right people are doing right job. (at right time and right place if possible)
Give a good orientation. So employee understands the expectation and will able to perform better.
Train employee when they performing a new job in first time.
Supervise and improving the job performance for employee by mentoring them.
Create a smooth working relationship.
Developing staff's potential and ability.
Create and maintain work morale within the work place.
Protecting staff's health and physical condition.
What Employee should know
Employee should understand basic acts to protect their best interest, such like Civil Right acts, Equal Pay act, Age Discrimination in Employment act and Vocational Rehabilitation Act.
Employee should always try their best to accommodate with human resources plan or strategy set by the company. Employee also needs to understand what they should do and should not to achieve the "win-win situation between employee and employer in the organisation.
Why I think employee retention is the key objective to achieve to an organisation? Because without the right people in the right place to do the right thing. The company is unlikely to attain the organisational goal or sustain the business.
The founder of Retention Institute and author of Rethinking Retention in Good Times and Bad - Mr. Finnegan said that, a number of management studies conducted in the past few years all point to one trend: The majority of your current employees will look for work elsewhere when the economy improves, if they are not already looking. And employee retention can also be a risk management issue: "One study showed that 50 percent of all truck accidents in one company were caused by first-year truck drivers," Finnegan said. "The more experienced the worker, the fewer mistakes," Finnegan contends. So retain the employee you want could save company millions. As "In today's economic climate, organizations can no longer ignore retention strategies if they want to retain their top talent" (Germond, 2010)
Each Individual does have different reason when they opt to leave. Without knowing the factor causing individual leaving will result a challenge for an effective HRM.
People leaving can be due to some "pull" and "push" factors. "Both push and pull factors impact on the individual who makes a decision about moving to, leaving or staying in a job in many different ways. Any decision made by an individual will be the result of a complex interplay between these factors" (Lehmann, Dieleman, & Martineau, 2008). Below figure illustrate the factor causing people leaving.
Figure 2: (Lehmann, Dieleman, & Martineau, 2008, Different environments impacting attraction and retention.)
Those factors can be explained as follows:
International environment: Is a pull factors due to higher pay, better working environment or conditions and better career opportunities in other countries.
National environment: Is both push and pull factors caused by the general political climate and social stability, as well as general labour relations, the situation of the public service, salary levels, or etc.
Local environment: Is the general living conditions and the social environment.
Work environment: Encompasses push and pull factors, like relationship between employee and employer, management or leadership styles, opportunities, availability of infrastructure, equipment and support.
Individual factors: Such as origin, family, age, gender and marital status.
Chenoweth, Jeon, Merlyn, & Brodaty, think that a "combined, rather than single, factors and strategies seem to be more effective in recruitment and retention." (2009). Effective human resource management will need to rely on multiple techniques, tools and innovative idea to retain employee. We will discuss the techniques, tools and innovative ideas on how to retain employee in details.
Techniques for employee retention
So is there any technique to solve employee retention problem? Kraft simple suggests that to "hire good people, train them well, supervise them properly, and keep them happy" (2010).
However, can this really works out for all type of employees? In my view that most likely can but could lead to a high cost without knowing their real needs. Therefore, some motivate theories below are always helps in this case to identify the person's need for manager to motivate them accordingly:
Maslow's hierarchy of needs theory, using people's five level of needs and fulfil each level toward the satisfaction level.
Herzberg' Two-factor theory, to remove work space's hygiene factors and increase motivators.
Vroom's Expectancy, by converting expectancy to performance and lead to the desired outcome.
McClelland's Content Theory, by understand of employee's needs for the achievement, affiliation and power.
Locke & Latham's Goal- setting Theory, using the goals that are specific, challenging, acceptable and allowed feedback.
Reinforcement Theory, by using the positive and negative enforcements to change employees' behaviours.
The appropriate job design will also help motivate employee's work morale. The job design should always focus based on:
Job simplification - by simplify the job process to ease the worker.
Job rotation - by rotate employee's job systematically so they can always learn new skills.
Job enlargement - by combine few tasks into one new task and allow employee variety and challenge.
Job Enrichment - using high motivators in the job allows employee gain intrinsic motivation.
Tools for employee retention
And are there any tools available to helps employee retention? Sure there are many and some of us might already use it in our day to day works.
A good job analysis during the hiring state and after a role change by using an effective job description and job specification.
A good recruitment and effective selection process by using a Realistic job preview (RJP)
A proper orientation and training
Continues Professional Development program
Fair and effective evaluation or performance appraisal
Career management method
Career management life cycle
Incentive and recognition program
At turbulence world today, speed and comprehensive of information is one of the key determinations of business differentiation. And same go to strategic human resource management. It needs comprehensive human resource information system for HR planning or decision making. With right implementation of such system, it can dramatically improve the HR effectiveness and efficiency of long term HR planning or decision making.
As today creativity mind can lead to a surprise success. See how Google take care their employee.
The CEO of Google, Schmidt said that"The goal is to strip away everything that gets in our employees' way. We provide a standard package of fringe benefits, but on top of that are first-class dining facilities, gyms, laundry rooms, massage rooms, haircuts, carwashes, dry cleaning, commuting buses - just about anything a hardworking employee might want. Let's face it: programmers want to program, they don't want to do their laundry. So we make it easy for them to do both."
A company provide those facilities at the work place. I believe majority of people will wish if they could become the employee of Google Company.
Generally, there are many innovative ideas to attract tenant and improve employee positive behaviours to the company as follows:
Employee referral program / incentive. Some people like to work in a network, allows employee introduce their network will benefit to attract similar group of tenants.
360 degree feedback performance appraisal. This allows employee or employee to see a clearer picture regard to employee's performance due to the multiple sources of evaluation.
Use a behaviourally-anchored rating scale system (BARS) to relate employee's performance to their specific job related incidents.
Merit bonus. This can be monetary or other type of extrinsic rewards.
Employee retirement gratuity funds. Allows increased of employees loyalty and safety feeling for their future retirement.
Performance based - Employee Stock Option Scheme (ESOS)
Jamrog & Overholt stated that "If organizational effectiveness is the measure of how successfully organizations achieve their missions through their core strategies, then for HR practitioners to be true strategic business partners in the future" (2004, p.4). Strategic human resources played an important role to assist organisation to achieve the organisational goal by effectively managing the human capital within the organisation.
Manager and employees also equally important in participate the human resource management, each has their own roles to play. As a successful organisation's human resource management cannot be rely only to either party.
This can be done by using techniques like motivation theories, job design, tools which is not only limited to information technology. Including innovative ideas.
After all, a family cannot be successful without a good mother. A company cannot be successful without a good strategic human resource management. But more important, all members have their own role to follow and to gain the personal or organisational goals together.