Importance of Strategic Human Resource Management (SHRM)
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Keywords: importance of strategic hrm, shrm benefits
The importance of Strategic Human Resource Management in organization: According to my understanding during the lecture period Human Resource Management Strategy as a central philosophy of the way that people in the organization are managed and the translation of this into HR policies and practices. To be affective, policies and practices need to be integrated so that they make a coherent whole that is integrated with the business or organizational strategy (Torrington and Hall)
Strategic Human Resource Management is the vital factor for an organization to achieve its strategic goals as it has increased in importance since 1980's by considering the following factors which are discussed below:
Globalization is the current phenomenon of the world which has integrated all the business environments under one umbrella where Strategic Human Resource Management in only way to show the business what is the actual goals of that business. By its activities business organization can overcome global needs as SHRM learns organizations to sort out what is their positions and where they want to go in global business arena.
Government rules and regulations which are the important issues for organizations, because it affects the organizations, business activities, through its own policy and procedures. An organization which can be overcome these issues through its strategic Human Resource policy, because organizations prepare its staffs, employees, stakeholders to be aware regarding these issues and do accordingly.
Knowledge and research based activities have impacted the organization dramatically in today's world, where Strategic Human Resource management helps the organization to nursing their Human Resource management accurately as well as make ready them to overcome future goals.
Labour unions which is the combined activities of Labours in the business that has affected the business strategic activities vigorously, but in this place, Strategic Human Resource Management gives treatments to them to be proactive and taking initiatives regarding labour's demand and benefits which help the organization to meet up the staffs problems. (According to my own understanding)
1.2 The purpose and contribution of Strategic Human Resource Management activities in an organization: Case Study ASDA
ASDA is one of the reputed retailer companies of WAL-MART which was formed in 1965 by a group of farmers from Yorkshire and its activities are still mainly based in the north of Britain. It expanded south in 70's and 80's , in 1989 buying rival change Gateways Superstores which is offering shoppers everything from Frank furthers to Diamond rings. ASDA is the second largest food seller that operates 370 stores from where primarily sell groceries and apparel, also the stores which are situated in different parts of the UK sell CDs, books, DVD's, House wear financial services, take away meal etc.
The Strategic Human Resource Management of ASDA which has developed its overall activities, because every year ASDA recruits 10,000 workers, 10,000 permanent staffs to work as little as 10 weeks a year. ASDA always targeted people over 50 and it has already employed 22,000 people aged over 50. For managing their SHRM ASDA's employees trainings is the highest in the market. Every year they recruit fresh trainee employee to build a proactive team for the management. (http://www.allbusiness.com/retail-treade/4297631-1.html)
As the part of SHRM management ASDA follows following structures of management:
- Corporate level Business level Operational level
- Board of Directors All regional managers Line managers
- Chief executive officer(CEO) Line Supervisors etc.
- Country Directors
- Chief Financial Officer (CFO)
- Chief Technical Officer(CTO)
By this structure ASDA monitored and supervised all the activities while they ensure the power and position of that structure by its unique policy. For managing Strategic Human Resource Management ASDA assists organization to meet the needs of their employees in the best way they can, so that company goals can be promoted. It also managing people proactively, because it requires planning ways for ASDA to meet the needs of its employees, thinking ahead and also helping the employees to meet the needs of the organization. This process changes the outlook and affects the way things are done at this business site, in others words it help to integrate modern ideas and models into the traditional Human Resource practices to come up with better solutions which not only benefit the employees, but the organization. It helps the organization from the hiring of employees, to the training, assessment and discipline [http://www.mba-tutorials.com/human-resource-management/487-shrm-strategic-human-resource-management.html]
For proper employee management by ASDA it has affected the organization significantly, because ASDA be aware about the employees career and development resulting reducing time frame of recruitment and selection process, retention staff in the organization, creates the productivity of the employee by developing training programs. It also arranges career programs for the employee which builds the employees loyalty towards ASDA which gives them unique efforts to fight with competitors in the market.
Strategic Human Resource Management is the process of Human resource Management for a long period of time which helps organization to achieve its long term goals. As a part of these activities ASDA maintains high standard of Human Resource Management through its unfair and competitive employees selection, motivation and training which given ASDA to be almost a market leader in the UK super market. It has established companies overall growth, revenue and satisfaction of stakeholders. (According to my understanding during the class period)
From the ASDA business site it is viewed that it has announced plans to create 9000 jobs in the UK through a mixture of new stores (20+new stores + extensions to existing stores), product range extensions in terms of non-food selling space named 'ASDA living' and others business expansion like home shopping, online shopping via-ASDA direct.
It sounds like an ambitious growth plan, although ASDA needs to keep growing quickly just to maintain its relative market share, where ASDA planed 179000 employees employ in the year. [http://tutor2u.net/blog/index.php/business-studies/comments/asd-goes-for-growth/]
President and CEO of Wal-Mart International, Dong McMillan thanked Andy Clarke for his leadership role in the development of the ASDA business during his times as president and CEO and in other roles during his 16 year career at the retailer ''I am extremely proud of the management team at ASDA and the contribution that each of our nearly 170,000 colleagues makes every to serve our customer. We are very well positioned to continue to win in the UK market'' [http://your.asda.com/2010/4/12]
From the discussion above it has been found that ASDA has been serve the customer promptly through their proactive management team which has impacted ASDA to improve its business growth revenue which attracts stakeholders such as employees, customers, suppliers, government, local community and competitors etc. Nowadays ASDA stakeholders feel confident as they invest as they could. Therefore, as a global company ASDA which is maintain its SHRM policies resulting to achieve overall growth of its business.
As a part of HRM development ASDA has been taking more initiatives in its operation, because every year ASDA recruited highly educated trainee officer in their organization. As well as they arranges graduate programmes for hunting talents to their organization. Moreover, they provide training for improving the skills of employees and prepared them to perform duties for next designation. There are so many others programs which has been conducted by ASDA such as communication with all levels of employees, stakeholders etc. Therefore, the HRM management of ASDA has got success in its operation by which organization achieves its strategic goals.
Human Resource Planning
2.1 The business factors that underpin human resource planning and the human resource requirements in an organization:
Tesco is considered as one of the Britain's biggest and most profitable super market chain and according to the website of Tesco which states that "is the darling-of the City".
Tesco PLC which is an overseas retailer that principal activity is retailing and associated activities in the UK, China, Czech Republic, Hungary, the republic of Ireland, India, Japan, Malaysia, Poland etc.
The main activity of the company is that of retailing, retailing service and financial services, retailing services which includes the company's online shopping channels, Tesco.com, Tesco.direct, Tesco personal finance (TPF) and dunhumby which is consumer research business.
Tesco is 2nd largest super market in Europe and 4th largest in the World operates 2318 stores in twelve countries around the world and employs 326,000 people. According to Terry Lehy Tesco is market leader in six out of twelve countries it operates in with its largest stores not in Bristol or Birmingham but in Budapest. It operates 1878 stores in the UK, 261 stores in Europe and 179 stores across Asia and plans to open 184 stores worldwide over the next year.
In the UK there are 83 Tesco extra stores, 4447 Tesco super store, 161 Tesco Metro stores, 277 Tesco express stores and 910 recently acquired T & S stores to be converted. [http://www.corporatewatch.org.uk/?lid=252]
Recently Tesco has started business in petroleum named Tesco petroleum as well as it operates Tesco finance and Tesco CNG conversion. Every Tesco involve with so many accusation, joint venture, merger etc. locally and internally. As a part of these expansion activities Tesco maintains high standard of quality staff that have facilitated Tesco to operate its business successfully. However, the business factors that underpins the Human Resource of Tesco which are given below:
Human Resource planning is the term use to describe how companies ensure that their staffs are the right staff to do the jobs. Sub topics include planning for staff retention, planning for candidate search, training and skills analysis and much more.
Tesco has to consider some external factors such as supply and demand, labour market, image/goodwill, PESTEL, unemployment rate, housing, childcare, competitors, spouse/partner career, location etc. and internal factors such as recruitment policy, HR planning, size of the farm, cost of recruitment, travel time, recognition, temporary part time employees, work culture, growth and expansion, timeliness. [http://www.enotes.com/business/q-and-a/human-resource-planning-crutial-process-an-172645]
All part of these factors influence the Tesco in case of expanding its business locally and globally, but Human Resource management overtake these factors by its unique features such as training, motivating, recruiting, learning, coaching etc.
World is changing rapidly, where all the business organization has come to the global umbrella. Every year Tesco has to do so many accusation, mergers and joint ventures all over the world to fulfil the global needs of customers, but for these expanded business activities it requires thousands and thousands skilled employees who have proper local and global knowledge to handle the business swiftly.
For example, recently Tesco has started its operation in Asian countries while it requires some skilled people who have local knowledge of Asia, in terms of Asian Language, religion, culture, political and ethical matter. There also need a country director who has capability to lead the business in Asia with his strong hand. He must be well-known about Asian labour market, culture, political and legal situation as well as he should be capable enough to understand language of every people of that country. Manpower is the vital factor for Tesco to operate its business in Asia as it wants to penetrate the whole Asian market chronologically within next couple of years. As part of its activities they should be required to reserve some staffs to employ them in proper expansion. Furthermore, they should be needed for hiring some skilled employees from local organization to overcome competitive market in that environment. Tesco also should be considered employ some local employees by lower cost where they could be given the company better opportunity.
Expansion the business outlets which is the continuous process of ASDA as it tries to increase its outlets locally and globally every year, but for expanding its business HRM is the vital issue, because it ensures the overall expansion activities. As a part of that activities ASDA would be required to take following initiatives:
- Recruiting highly educated employees as a fresh trainee officer.
- Hiring highly experienced employees from others similar organization.
- Recruiting staff to adapt with new environment.
- Giving promotions to tolerate the new business outlets.
- Recruiting highly experience CEO or Country Director specially for global expansion.
Therefore, the requirement of Human Resource is very important issue for Tesco to expand its business locally and globally. So, it should be aware about HR management through proper selection, recruiting, motivation, communications, trainings etc.
Development of a human resource plan and its contribution on the meeting of organizations objectives as well as purpose of human resource management policies and impact of regulatory requirements on this policies in organization
Human Resource development plan for an organization is the important issue to on how the organizations are managing their activities well in the market, this includes following steps:
- Job analysis which identifies a job regarding specific roles and responsibilities and abilities, skills, qualifications need to perform the jobs successfully.
- Human Resource planning which is the initiative through which an organization tries to ensure right number of qualified people in the right jobs at the right times.
- Employee recruitment that is the way for seeking and attracting a pool of applicants from which qualified candidates can be selected for the organizations against of that job vacancy.
- Employees selections which involves offer the employee for recruitments from the available candidates applied for this job.
- Performance appraisal that is associated with identifying how well employees are performing their jobs, communicating that information to the employees and taking initiative for measurement their performance by their activities, i.e. arranging promotion for good performance.
- Training and development which help employees learn how to perform their jobs, improve their performance and prepare themselves for more senior positions.
- Career planning and development by which organization identifies employees career goals, possible future job opportunities and personal improvement by which it is ensured qualified employees are available when needed.
- Employee motivation which is the vital factor for any organization which focuses to make employees productive and lower rates of absenteeism and turnover.
- Every year Tesco collects so many bi-data from different sources from qualified applicant from which they select some people for recruitments. After recruiting they arrange training for fit themselves for their assign jobs. They also motivate staff by giving incentives, bonus, refreshment leave for motivation of employees, resulting a good employees structure for Tesco to implement its strategic goals.
Human Resource plan for an organization is the curse of action by which organization can manage its Human Resources efficiently and effectively by which achieve the organizations objectives. The role of Human Resource functions is explained by the key objectives to be achieved. The following diagram shows the role of Human Resources which is helped to organizational objectives.
Human resource plan can be contributed the organization for meeting its objectives by following ways:
- It strengthens human resource structures which helps organization to utilize all of the efforts of human resource into the organization resulting to achieve strategic goals.
- It keeps balance between management of employees & management of financial resources which brings results for the organization.
- It helps organization to create skilled employment by which organization could expand its business locally & globally.
These activities help organization to involving acquisition, merger & joint venture etc. in the own country as well as for operating business in the international countries.
It ensures good practices for employees employment policies such as promotions, retention, rewards, punishments, health & safety rules & regulations which ensure the loyalty of employees towards the organization resulting to achieve organizational goals by these joint efforts.
Tesco, making a human resource plan to set up a highly skilled person in the branch as a manager by whom it monitored & implemented all of the activities in the operations levels. As a result, a lot of outlets which are giving service to customers resulting to achieve good turnovers which make sure the overall goals of tesco.[ According to my own research & company websites of tesco]
Purpose of human resource management policies in the organization is important factors that ensures the right, rules & regulations of employees for doing works in the organization.
Impact of regulatory requirements on human resource policies confirms the right of employees & employers. These policies focus to ensure the best practices of human resource management & achieve organizational goals by employing them. Human resource policies revive all the rights of employees by which the inspire to invest all of the merits & talents to the organization resulting to achieve of company's long term goals. These policies include getting best employees in the company paying employees all benefits , ensuring training, ensuring compliance to regulation, implement fair, safe & equitable work environments, sustaining its performing employees & non- profit human resources.
All the policies mentioned above have unique features of its own by which organization can implement all of its strategic goals.
For example, Tesco, the largest superstore in UK which is assuring high standard products & services for customers through its performing team members while it reserves some rights for employees in the organization which has been sustained each employee management. According to part of that policies, Tesco maintains minimum national wages for employees, fixing up highly pay rates for its skilled employees where the arrange some training programmes, graduate programme, motivation, coaching, face to face discussion which has built its to make relationship with its employees. It also always aware about the health & safety policies of its employees as it ensures some free medical treatment, health & hygiene training for its employees for ensuring these policies. Tesco nowadays sustainable situation on human resource management. For proper human resource management gives Tesco power to bargain with customers, compete with rivals in price war, making bondage with its stake holders.
In an organization regulatory policies ensure discipline of organization because it limits it into its system as well as employees in their organizational activities. More over into increases the loyalties of employees towards employers resulting to achieve organizational goals. Furthermore, it teaches employees to be motivated, dedicative, energetic into their duties as well as ensures their present lives, future lives & family lives easier & happy. The important matter to consider that these factors protected everyone in the organizations from the discriminations in terms of age, sex, ethnic groups, dis ability etc. while it ensures equal opportunities for all levels of employees & making good relationship between employer & employees.
For example-When Tesco recruits people the meets these regulatory factors in their recruitment process as they make criteria for those people who are vulnerable for our society such as dis able, ethnic groups as well as they prioritize all levels of employees with their equal opportunities policies. In Tesco superstore who is working they do not know what is their origin of country, but they only know that they are the members of Tesco team which makes it very confident towards its staff management.
Reviewing Human Resource Management
4.1,4.2,4.3 : Impact of Organizational structure, culture and effectiveness on Human Resource Management: Organizational structure and Human Resource Management practices are two special factors involved in corporate entrepreneurship which achieve organizational goals. By selecting and implementing the appropriate structure and practices, Human Resource professional can systematically foster and facilities innovation and entrepreneurship within the organization. The more that new and different entrepreneurial activities are needed, the more that complete structural arrangement as well as policy and procedures flexibility are needed.
Proper organization structure is important for company to function effectively. Communicating clear paths of responsibility is key for a company to meet the needs the future growth as well as help in streaming the organization. The following diagram which shows the organizational structure for a company.
There are some important points which are essential for the structure of an organization which is given below:
Organizational Chart: Organizational chart which is the ideal manner for mapping the organization. It is an instrument for assessing personnel and managing the work force effectively. An organization which needs to visualize the company's structure in order to find out the role of each employee plays in the Human Resource chain.
Human Resource Software: Human Resource Software which assist management of Human Resources to take decisions for the following matter:
- Succession Planning
- Organizational development
- Human Resource management
- Corporate re-organization
- Efficient management of resources.
An organizational chart is specialized tool used by Human Resources professionals to be able to get a solid picture of the organization. An organizational chart is generally deployed in situation when management wants to identify areas throughout the enterprise that present opportunities for downscaling also known as down sighing.
Organizational culture is the workplace environment formulated from the interaction of the employees in the work environment. It is defined by all of the life experiences, strengths, weakness, education, up-bringing and so forth of the employees, while executive leaders play a great role in defining organizational culture by their actions and leadership, all employees contribute to the organizational culture. [http://humanresources.about.com]
Organizational culture and its environment factors in which organization exist determines the way of managing the organization(Saffold,1988:547).The relationship between Organisational Culture and Human Resources practices can be explained as follows:
When the member of organization i.e. employees, understand and internationalized the organizational culture which can be said as the way things are done around here, it will enable for employee to choose strategy and behaviour that fit with their personality as well as with the main routines of organization activities.
Human Resource Management policies which directly influence and are influenced by Corporate Culture, also significantly impact supply chain members. That is, Human Resource decisions are important because when firms hire personnel that meld with their company culture, these actions enhance shared social knowledge and increase consistency between employee and firm goals (Wilkens &Ouchi 1983), shared social knowledge guides employees in making the right decision when confronted with novel situation(Weitz and Jap 1995). [http://findarticles.com/p/articles/mi-qua3705/is-2002o1/ai-n9060287/]
Organizational effectiveness depends on having the right people in the right jobs at the right time to meet rapidly changing organizational requirements. Right people can be obtained by reforming the role of Human Resource function.
According to Bratton, J&Gold.J(2003),Human Resource Management is defined as a Strategic approach to managing employment relations which emphasizes that leveraging peoples' capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices.
According to this definition there is seen that Human Resource management should not merely handle recruitment, pay and discharging, but also should maximize the use of an organization human Resources in a most strategic levels.
Stuffing, training, compensation and performance management are basically important tools in the Human resources practices that shape the organizations role in satisfying the needs of its stakeholders. Team work among lower levels of staff and the management should be created and maintained to assisting various angles that would deem necessary in eliminating, communication breakdown and foster better relationship among workers. The management should emphasize a good corporate culture in order to develop employees and create a positive and conducive work environment.
In the summarization of Human Resource management there should have aim to capture 'the people element' of what an organization is hoping to achieve in the medium to long term, ensuring the following things:
- It has the right people in place.
- It has the right mix of skills.
- Employees display the right attitude and behaviours, and
- Employees are developed in the right way.
An organization which wants to achieve its goals it has to think before regarding the following Human Resource related issues in the organization:
- Work force planning issues.
- Succession planning.
- Workforce skills plan.
- Employment equity plans.
- Black economic empowerment initiatives.
- Motivation and fair treatment issues.
- Pay levels designed to recruit, retain and motivate people.
- The co-ordination of approaches to pay and grading across the organization to create alignment and potential unequal pay claims.
- A grading and remuneration system which is seen as fair and giving proper reward for contributions made.
- Wider employment issues which impact on staff recruitment, retention, motivation etc.
A consistent performance management framework which is designed to meet the needs of all sectors of the organization including its people. [http://ezinearticles.com/?human-resource-management-and-organizational-effectivenessandid=2844811]
Recommendations to improve the effectiveness of human resources management in an organization
Human Resource Management is the essential part of an organization as it ensures the strategic goals of organization. The effectiveness of Human Resource management could be improved by the following ways-
- Recruiting and hiring highly educated and skilled employees for the organization.
- Training and development of Human Resource plan for the organization.
- Appraising the performance of employees for preparing them for performing jobs in the higher rank.
- Motivating employees by giving incentives, bonus, rewards etc.
- Strengthen communication among all levels of employees.
- Maintaining regulator factors for employees such as health and safety, pension, promotion etc.
- Maintaining equal opportunities system into the management.
- Forming different committee to monitor and supervised the employees roles and regulations such as compensation committee, audit committee, ethic committee etc.
- Ensuring job rotation and job analysis for each employee at different department.
- Doing job enrichment for employees.
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