Importance of Strategic Human Resource Management
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Keywords: importance of strategic hrm, m and s hrm strategy, shrm case study
The business that I have chosen to study as part of this assignment is TESCO. TESCO is a public limited company, which is very successful and renowned in all over the world. I am always interested about TESCO and do my shopping very regularly from there. So I chosen to do my study about this particular business and it will help me to get information quite effectively and efficiently than any other organisation or business.
- Human resource management is the organisational function which is focused on recruitment, management, and providing direction for the employees of an organization.
- Strategic human resource management is linking of human resources with objectives and strategic goal in order to develop business culture and performance with flexibly, innovative.
- In an organisation SHRM means involving the HR function and implementing company's strategies through recruiting, selecting, training and rewarding personnel.
1.1-Importance of Strategic Human Resource Management:
Strategic human resource management is a part of human resource management.
Rather than focusing on internal issues of HR, SHRM focus on addressing and solving problems what effect people management related issues in the long run globally. So the main importance of strategic human resources is to increase employee skills by focusing on business problems that happens outside of human resources. The actions that needed to be taken at first for a strategic human resource manager is to identify key HR areas ,where strategies will be implemented in the future to improve employees productivity, motivation and skill.
Human Resource managers are facing with some issues such as performance management, employee participation, human resource flow, reward systems and high commitment work systems in the context of globalization. These are some of the major issues that HR management involved in SHRM that implemented in the first decade of the 21st century:
- Internationalization of market integration.
- Significant technological change.
- New concepts of general management.
- Cross-cultural factors
- The economic trend transferring from developed to developing countries in the world.
SHRM also reflects some of the contemporary challenges faced by Human Resource Management. Such as aligning HR with core business strategy, demographic trends on employment and the labour market, integrating soft skills in HRD and finally Knowledge Management.
1.2-The Purpose of Strategic Human Resource Management:
The purpose of SHRM is to stimulate interest in the field of Human Resources by inviting HR professionals to speak about different aspects of their job and other HR issues. SHRM was created to provide assistance for development of its members, to provide leadership opportunities, and establish and support standards of excellence in Human Resource Management.
SHRM aims to provide a sense of direction in an often turbulent environment so that organizational and business needs can be translated into coherent and practical policies and programmes. SHRM should provide guidelines for successful action, and the ultimate test of the reality of strategic HRM is the extent to which it has stimulated such action.
There is an overall corporate purpose and that the human resource dimensions of that purpose are evident.
A process of developing strategy within the organization exists and is understood, and that there is explicit consideration of human resource dimensions.
The organization at all levels establishes responsibility and accountability for human resource management.
It includes the responsibility to identify and interact in the social, political, technological and economic environments in which the organization is and will be doing business.
1.3-Contribution of SHRM to the achievement of TESCO's objectives:
SHRM is normally helps us to achieve knowledge about strategic goals in different ways. The main thing of using this strategic advance is maintain the level of the organization for the organizational goals. Different HR policies are providing some good replies that are very necessary for the organizational strategy. HRM task helps us to achieve corporate goals such as growth and development by recruiting, training and orientating, and put them in new job role. The growth plan of an organization requires staffs and recruitment is the only functions that make sure that employees got sufficient skill. The retention policy enable to differentiation through retaining best of the ability force. Retaining appropriately of the employees enables to provide quality works, customer pleasure, and higher proficiency. The strategic approaches boost its performance management of the whole organization.
The training and development process enables employees to know that they have proper skills that are required to achieve the whole tasks. The training plans are structured to train the human resources for particular skills that will enable them to achieve the essential goals. So that the organization is benefited as in there appropriate utilization of financial resources available to accomplish the training and development process. This process also maintains the growth of the organization through career improvement of the staffs.
Tesco is the UK's largest supermarket. It has more than 240000 employees, and is making constant profit over the last few years. During the last few years Tesco used participative management which helped the organization for its development. The organization tried to apply of competitive circumstances by developing the technique how they can relate with the customers. Tesco used constant improvement, customer relation, welfare management in combination with the HRM strategies to achieve this reputable place in the UK supermarket industry. It makes employees champions and makes them able to make decisions. It also enables to increase employee pleasure, motivation, work proficiency and make able to adopt in any change. Overall the development of the organizational employees is the most important strength of Tesco. It is mainly focus on proper accomplishment and utilization of HR strategies that help it to do well in the market. In Tesco Human Resource policies perform with marketing strategies that is placed into the operation. The management practice and its participation helped Tesco to improve its employees and the whole company. These steps enable them to obtain appropriate performance through their participation and engagement. The strategic human resource practice enables to produce competencies that distinguish product and service.
In this part of my assignment I am going to explain about Marks and Spencer
2.1-Internal and external business factors that underpin human resource planning:
At this time of year lots of companies are thinking a strategic plan for the coming period.
There are some external and internal business factors that effecting Mark and Spencer business policy. Some of them are in below:
- Labor cost control
- Increase efficiency and productivity
- Employee development
- Business decline
- Business growth
- Business change
Marks and Spencer is one of the leading companies in UK. Internal business factor like as business growth can strengthen human resource plan on Marks and Spencer. When the whole company's business is growing then definitely management make different human resource plan for the organizational success. It can include recruitment of new personnel or making the existed personnel more efficient through a better training. Similarly when Marks and Spencer business is going through a bad time Marks and Spencer management make a different HR plan, like as redundancies of staff or other HR related expenses. Sometimes for other changes in business its Marks and Spencer Company make some change on the HR planning. Control of labor cost is one of the important factors on Marks and Spencer business policy. Computing a labour cost percentage in addition to other used way of labour efficiency.
- Justifying labour productivity
- Maintaining a Productive Workforce
- Measuring Current Labour Productivity
- Managing Payroll Costs
- Dropping Labour-Related Costs
Now a days IT is making a huge change in the field of industrial, agricultural and human resources of Marks and Spencer. In this present 21st century IT has been playing a very important role on human resource planning. Due to technological advancemans it's been taking some changes on the basis of HR planning in Marks and Spencer.
2.2-Human resource requirements:
Marks and Spencer is always looking for particular amount of skills from the employees of different department. Among of these department specific skills is generally required by the employers. Similarly experience and other qualifications also required from the employees.
These skills are related with their ability. Depends on the making plan, organize, design, implementation. It also helps his goal-setting. Some of them are in below:
- Honesty, integrity and morality.
- Adaptability, Flexibility.
- Dedication and hard working.
- Positive Attitude/Motivation/Energy/Passion.
- Self-Motivated/Ability to Work with Little or No Supervision.
- Willingness to Learn.
In the specific areas whoever is weak can develop these skills by better training, acquiring knowledge on specific field, professional development from the people who possess these skills.
Internal factors e.g. (labour requirements, Skill requirements, Workforce profiles etc):
Marks and Spencer consider skill requirement, labour requirement and workforce profile. HR planning ensures that Marks and Spencer has suitable access to talent and ensure future business success. Talent means the knowledge, skills and ability to assume some activities like as decision making. HR resource plan consider some iterative discipline.
External factors e.g. demand for labour, Supply of labour:
Sector Skills Councils, government departments, professional bodies or dedicated employer or trade associations are likely to produce specific labour market studies. Specialist recruitment agencies and local further and higher education establishments will have useful insights into the labour markets they serve.
Government polices e.g. employment, Education, Training, Industrial, Regional:
Government role and activity can have a good role on the basis of human resource requirements. If government keep a good look on how peoples can develop their skills and requirement. The answers definitely indicate a few things, one of them is education. This is the key factors for the development of a nation. So the developments of Marks and Spencer, even a country's development mainly depend on educational development. Government need to analyse every single point and focus on that point after that must be taken step by step action to reach the success, the another key point is employment. Government should have developed the opportunity in the job market, need to think about how to make job market better. Must need to try the best how to create vacancies according to the people's interest and skill. For this reason employees must be skilled, and to be a skilled worker he must be properly trained in both practically and theoretically. Government can support that directly or indirectly. It can be regional basis or industrial basis.
2.3-Human resource planning:
HR planning is the process by which a company can ensure that it got right personnel.
To fulfil organisational requirement M&S make some HR planning for the development of human resource these are:
- Employee development
- Succession planning
Fulfil recruitment requirement: an organised process of recruitment can avoid the problem of unpredicted wastage, shortage, blockages in the promotion flow, redundancies and so on.
Determining training needs: It is very important to have a planning training programme. And in the term of skills requirement these programmes are improving not only quantity but also in quality in Marks and Spencer.
Management development: One of the main purposes of HR planning is management development. Because a well trained and experienced manager is very important for the effectiveness of Marks and Spencer Industry. This thing depends on accurate information for both present and future requirement.
To engage SMART objectives in Mark and Spencer is focus on all the SMART criteria to meet with every objective.
The full abbreviation of SMART is Specific, Measurable, Achievable or Agreed, Realistic and Time phased. These criteria can help M&S to achieve the goal on the basis of HR management.
The goal must be specific. It can be done by drafting a goal statement. For an example M&S aimed to make sure this year that they will make a specific amount of profit this year, to reach that goal they planned to make the HR department more skilled. That plan must be specific.
M&S aim must be measurable so that the benchmark of the metrics will be used and it can be tricky. Strategic goals of M&S are basically measured making earning or profit. So that it must be careful that it may find that employees use unethical behaviours to achieve the specific goal.
The goal must be achievable. If the mission is then it will be easier to fix that the goal is whether achievable or not. An awareness campaign or a meeting can ensure that how it can be achieved.
There is no point of making a goal that necessitates the resources which are unavailable. A tactful session might help to make that realistic. To help and find new alternative M&S use empowering staff if its resources are considered.
The goals must have deadline. If the deadline is not affix properly the whole SMART will be useless. Every year M&S got an agenda on HR management, which means it plan, its agenda on the basis of a time limitation. That specific deadline allows it to create a benchmark to ensure the goals achievement is on the plan.
The purposes of HR planning are to enable organizations to anticipate their future HRM needs and to identify practices that will help them to meet those needs. HR planning may be done on a short- or long-term basis. Its aim is to ensure that people will be available with the appropriate characteristics and skills when and where the organization needs them. The use of HR planning enables companies to gain control of their future by preparing for likely events.
When failing to properly plan for their human resources, employers are forced to respond to events after they occur, rather than before; they become reactive, rather than proactive. When this outcome occurs, an organization may be unable to correctly anticipate an increase in its future demand for personnel. At best, such a company would be forced to recruit personnel at the last minute and may fail to find the best candidates. At worst, the company may become seriously understaffed.
In spite of of the size of the human resources department it is essential to have the necessary personnel in position to develop, apply and monitor a suitable written human resources plan.
2.4-how a human resource plan contributes to the meeting of organisational objectives:
A comprehensive Human Resource plan plays a very important role on the achievement of organisational objectives. Human resource plan support some strategic objectives related with marketing, financial, technological and operational departments.
HR strategy is aim to explain about the people element, what an organisation is expecting to achieve in medium to long term, which ensure that:
- The organisation has right people
- It got perfect mix of skills
- Employees present good attitudes and behaviours
- Staffs are improving in the proper way.
Fundamental issues which are addressed by the organisation. It identified if employees are motivated, committed and operate successfully. In M&S these fundamental issues are:
- Employees planning issues
- Employees skills and equity plans
- Motivation and fair treatment issues
- Keep level on the basis of payment, recruit and motivate people.
A career development framework which is normally focusing on the development of organisation, organising the staffs with employability so they can adopt with regular changes in the employment pattern.
HR plan is showing a careful planning of the people issues that make it quite easier for the achievement of the organisation. HR plan have major impact on the changes in the wider market environment which are:
- Changes in the overall market.
- Cultural changes that will effect on the future employment pattern.
- Changes in the legal framework
Providing and implementing practical idea on HR planning and making it stronger an organisational performance can be developed such as focusing on good management practice.
3.1-Purpose of human resource management policies:
Human resource management policies include different type of activities such as deciding about staffing need that M &S Company got. To fulfill these requirements M&S Company do recruiting and selecting employees then training for making them better skilled, ensuring their good performance, monitoring the performance issues. Activities also include managing the approach to employee's benefits and compensation, employee's personal policies and records. During the period of recruiting company must show the balance of equality on the basis of sex, culture, religion or cast.
- Pay workers according to the agreement. The agreement will maintain some areas such as work period, amount of paid holidays etc. The employment contract is the important legal document between the employer and staff.
- Pay men and women equally for doing the equal values of work, should not be discriminate between men and woman.
- Make sure they fulfil the requirements of Minimum Wage Act 1998 and pay at least the national minimum wage to appropriate the employees
Benefit and expenses:
Benefits are forms of value, other than payment, that are provided to the employee in return for their contribution to the organization, that is, for doing their job. Some benefits, such as unemployment and worker's compensation, are federally required.
Employee benefits typically refers to retirement plans, health life insurance, life insurance, disability insurance, vacation, employee stock ownership plans, etc. Benefits are increasingly expensive for businesses to provide to employees, so the range and options of benefits are changing rapidly to include, for example, flexible benefit plans.
Training and development
All managers at Mark & Spencer are making a career planning profile that helps them to think about next target. Then they can develop their career. Identifying staff, specific training such as technical skill and business competencies needs for the specific role. The profile highlighted what kind of training program Mark and Spencer need to take.
There are two forms of training are:
- On the job training: while employees are on the work then this training form take place.
- Off the job training: when employees are away from the work then it take place.
On-the-job training takes place while employees are carrying out an activity in their place of work. Involving a range of project and training can improve business competencies and technical skills. The purpose of the training is to make the enjoyable to their work, and make them feel that have all the skill that is needed for the role.
Off-the-job training, as its names suggests, takes place away from the workplace. For example, within M&S there is internet and staff finds required learning materials to develop their technical skills and business competencies.
3.2-Impact of regulatory requirements on human resource policies:
Employment legislation include different types of regulatory requirements which is related with business structure, pay, data protection, health and safety, discrimination, equality, employment right and responsibility, contractual terms and condition and data protection.
Employment relation act 2004:
This act is generally concerned with collective labour law and trade union rights. This is the reviewed one of Employment Relations Act 1999 that was announced on July 2002.
The act 1999 was conducted with connecting of interested parties, after that it included a public consultation. Government reviewed that and provides a detailed analysis that is known as Employment Relations Act 2004.
Equal Pay Acts 1970 and 1983
This act was came to force on 1975. Its intention was to remove discrimination between men and women in pay. This act allows someone to claim equal amount of payment for both of the gender.
Work rate as equal under a job estimation scheme
Work of Equal Value - in terms of weight made under such headings as attempt, skill and decision-making
Claims to be pursue on the basis of the "Employment Tribunal" system.
Disability Discrimination Act 1995
This act came to force on 2nd of December 1996. This act works like as Sex Discrimination Act and Race relation act. It also put the duty on the employer to make a reasonable adjustment in the premises to the disable people. Disable means physical disable, visual or hearing disable, mental problem such as Multiple Sclerosis and Aid, learning problem.
Data protection Act 1998:
The Data Protection Act 1998 requires every data controller who is processing personal data to notify the Information Commissioner unless they are exempt. Failure to notify is a criminal offence. The Information Commissioner maintains a public register of data controllers. Each register entry includes the name and address of the data controller and a general description of the processing of personal data by a data controller. Individuals can consult the register to find out what processing of personal data is being carried out by a particular data controller.
There is no requirement to notify manual records which come within the scope of the Data Protection Act 1998. However, it can be chosen to notify them voluntary to notify them voluntarily.
If notification is needed, there are two ways to notify:
- By internet - notification form can be completed on the internet, printing it and send the form by post with the notification fee or direct debit instruction
- By telephone - it can be telephone the notification help line and a draft notification form will be sent to which is based on the information that is been asked to provide on the telephone.
Further guidance and other publications can be accessed from the website of the Information Commissioner http://www.dataprotection.gov.uk/dpr/dpdoc.nsf
In this task of my assignment i am going to discuss about ACI Company Ltd Bangladesh.
4.1- Impact of organisational structure on the management of HR:
Role of HR department on the development of ACI:
On the development of ACI Company Ltd Bangladesh, HR department got a huge role. Organisational development of ACI is based on some personnel assessment and HR audit. It's also depending on the basis of how personnel departments are being observed and evaluated. On the viewpoint of a HR consultant here I am going to describe some of them:
- Recruiting, interviewing and hiring
- New employee related factors
- Performance assessment
- Wages or compensation issues
- Staff benefit issues
- HR plan and policies
- Job categorization
- Training and interviewing
- Decision-making skills
4.2- Impact of organisational culture on the management of HR:
Organisational culture: organisational culture can be defined as thorough concept of knowledge, belief and thoughts of mind and customs in where peoples are expressing their organisational conditioning. Aci organisation have different shared belief and values which sometimes convert into policies and practice.
Aci organisational culture has some impact on the HR management that are:
- Decision making that can centralised of decentralised
- Freedom of different level of staff and management
- Frankness on communication
- Different leadership styles that is conducted by managers
- Educational involve and intelligence of employees
- Attitude of team then if needed training and development.
- Attitude to change specially with the technology.
- Commitment on the quality and service.
4.3- How the effectiveness of HRM is being monitored:
ACI Company's HRM effectiveness depends on some major components which are mentioned bellow and these components are being monitored by ACI regularly for the organizational development. These are:
Human resource strategy is indicating some objectives like as training and developing, motivation and control workers. ACI Company is one of the most successful organizations in Bangladesh, it achieving its success through business strategy and HRM strategy and company believe that the more successful it is likely to be in terms of achieving the organizational outcomes. So if the whole company's effectiveness is mostly depend on its HRM strategy.
There are lots of responsibility and functions required for running a business. Performance, productivity, each and every department must be monitored constantly and HR department is responsible for achieving these. These things ensure the overall success of ACI Company.
Using human resource properly:
Some people might think that HR department is not a most important factor in a company. It is totally a wrong concept. ACI Company's HR department basically focuses on hiring the people and which would build up the workforce of the company. If this department is not performing well then whole process of hiring and recruiting will be on the question for any company. So for the effectiveness of the ACI Company proper using of HR is very important.
Efficiencies and inefficiencies:
An organizational effectiveness mostly depends on having right people on the right post to fulfill organizational requirements on the appropriate time. Right people can only be obtained by measuring efficiencies. The more efficient the employee will, the more effective the company will be. On the other hand an inefficient employee is a great obstacle for the whole company. So making him efficient the company's development can be obtained. So monitor efficiencies and inefficiencies must be considered on the effectiveness of human resource management.
Overall monitoring the above few section ACI Company is performing its organizational success.
4.4- Recommendation to improve the effectiveness of human resource management in ACI:
To improve the effectiveness of human resource management in ACI Company, there must be a list of recommendation. The following few factors can be implemented for the improvements of its effectiveness.
Benchmarking HR performance:
Benchmarking provides an organization with a detail analysis of national and employee's satisfaction. It also provides HR effectiveness based on in detail feedback form and the whole company's surveys. ACI Company's benchmarking reports let it to compare the organization with the current and future industry norms. That's how the management can determine whether the present HR practices are fulfilling the company's need and the needs of employees.
Employees attitude survey:
Employee attitude survey provides information to improve efficiency and commitment on ACI industry. Finding out the root issues of attitude in the organization ACI Company must take the direct action to broaden its overall job satisfaction. Involving the information that was gathered from the survey will improve the productivity. Improving the attitude of the employees will lead to better cooperation and communication throughout the whole company. So employee's attitude must be considered for the future improvement of the effectiveness of HRM in ACI Company.
Employee retention is helping an organization to encourage employees to remain in the organization for a long time. Now a day's so many companies are facing a lot of problem in employee's retention. Hiring skilled and knowledgeable people for the job is very necessary for any company. But retention is more important than hiring. ACI Company is always looking for such a kind of talent employees. If an employee is not satisfied on his present job then he might try to find a better one, as a result it can be a huge lose for the company. So employee retention should be followed for the future development of the company.
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