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There are increased challenges the organizations are acing in the changing and competitive environment. The organizations are using different strategies tools and techniques to deal with the changes in the external environment of the organization. The organization can utilize the strategic human resource management to deal with the issues and the challenges to the organization. To understand the strategic human resource management it is important to understand the Human recourse management.
Definition of Human Resource Management
Price A (2004) described human resource management as "Human resource management is a philosophy of people management based on the belief that human resources are uniquely important to a sustained business success"
Definition of Strategic Human Resource Management
"Strategic human resource management is the process of linking
the human resource function with the strategic objectives of the
organization in order to improve performance".
Importance of Strategic Human Resource Management:
The strategic human resource management helps the organizations to achieve the goals of organization through meeting the needs of employees in best way. The human resource management deals with the issues and the processes related to the employees such as recruitment, selection, hiring, firing training and development, pay determination, benefits and administration of employees. Due to the globalization and the increased communication the HRM importance has been increased as the organizations HRM departments are facing the challenges related to the employee participation, performance management, and HR flow, high commitment work systems and reward systems.
Strategic human resource management helps organizations by developing relationship of Human resource strategy with the core business strategy, analyse and manage demographic trends on labour market and employment, integration of the skills required in human resource development and knowledge management.
The strategic human resource management link people and the strategy of the business of the organization. The strategic human resource management also analyses the activities and behaviours which affect individuals of the organization. Schuler and Schuler (1992)
In these new challenges of quickly changing environment and globalization, the organizations improvement and modification is believed to be as professional field of social actions as well as an area of scientific inquires and innovations. Amongst recent development in this area of restructuring and development of organization there are several considerable changes need to be noticed in order to recognize the key issue and role of Strategic HRM innovations.
Purpose of Strategic Human Resource Management:
The strategic human resource management determines the significance of Human resource management in achieving the organizational goalsproviding guidance on what to measure, how to measure and how to report on the outcomes of measurement. The SHRM determine the link between the business strategy and human resource management. The strategic human resource management leads to the superior people management to attain the good business results. Strategic human resource management will also
defining the link between HRM and business strategy
strengthening the HRM belief that people are assets rather than costs
Emphasising role of HR specialists as business partners.
"Hence both HCM and HRM can be regarded as vital components in the process of people management and both form the basis for achieving human capital advantage through a resource-based strategy".Â The strategic human resource management helps organization to achieve the goals and objectives of firms by providing the intellectual capital and managing the human capital of the organization in the best way to achieve the goals of the organization. There are different functions performed by the strategic human resource management to make the availability of human recourses best useable for the organization such as development of human resource planning, recruitment, selection, training and development, rewarding, compensation and the other issues related to the people of the organization.
The strategic human resource management is associated with the development of new techniques required to do effective business. The human resource is the analysis and acquisition of the energetic talent of people who are available to organizations to potentially contribute towards the realization and creation of the company's mission, vision, goals, objectives and strategies leading to the improved organizational performance. (Jackson and Schuler, 2000)
CARPHONE WAREHOUSE plc
Charles Dunstone established Carphone warehouse in 1989. The founder and the chief executive of the organization are still working with the organization and also in charge of strategic initiatives and development of the organization. The organization is dealing with the mobile retail communication and internet access services to the customers both residential and business customers. The organization has more than 1500 stores in ten countries of the world. The organization is managing its business at wholesale level through the subsidiary company of the organization named as Opal Telecom Limited (Opal). The strategy of the organization is based on the following important core values of the organization are,
The organization wanted to be first to serve the customers.
The organization advised the employees not to argue with the customers because it will only loose customer of organization.
Always deliver the promised product to customer
The organization prefers to treat customers as the employees wanted to be treated.
The organization believe the reputation of the customer
The reputation of the whole company is in the hands of each individual.
Due to changes in the business environment and to meet the objectives of organization Carphone warehouse decided to take over the Onetel. Both organizations were dealing with the retailing of the fixed retail communication services to the business and residential customers. The HR representative of the organization described the merger necessary to compete with the market leader BT. the market value and the image of the organization enhanced as a result of the acquisition process by the Carphone Warehouse.
HR function in the process of acquisition:-
The human resource functions played a curtail role in the process of acquisition of the One tel. The organization recognized the importance of human resource management an important tool for the performance enhancement and knowledge management. In the change process the major problems faced by the organizations is the problem related to the managing issues from the people of the organization. There is resistance from the people while the organizations implement change weather it is of any nature like the change in people, structure or change in the organizational structure or merger or acquisition. People of the organizations resist due to various reasons and the effective management and leadership skills can be utilised to resolve the disputes regarding the issues of employees and the members of organization.
Human resource requirements in the process of merger and acquisition:-
There are the following best practices which should be implemented to attain the superior organizational performance as a result of the acquisition of the other large organization by CPW. There are following seven best practices of Hr described by the Pfeiffer (1994) which should be implemented by the organization to manage the employees and the members of the organization.
Employment security: - the organization should provide the existing employees of both organizations a job security as a result of the acquisition then there will be support from the employees towards the process of change.
Selective hiring: - at the time of recruitment the organization must analyse and access what types of the talent, knowledge and skills are needed by the organization. These people should be able to analyse the organizational culture and they can be fit into the organizational culture and system professionally.
Self managed teams: - to enhance the performance standard of the organization the company should develop self managed teams which can take their own initiatives to resolve a problem. The self managed team's development will lead the organization to be more innovative.
Appropriate reward system:-a comprehensive and effective reward system should be developed to motivate the employees and increased employee satisfaction with working with the organization.
Training: - training should be given to employees to work in a better way to provide more effective customer services to enhance the market share and the credibility of the organization. Training will lead to the increased performance and the output from the employees.
Reduction of status differentials: -
The status difference should be encouraged in the organizational culture to make people share their ideas, information and problems in a friendly atmosphere in a professional way.
Sharing Information: -
There must be system developed in which the members of the organization share information. This should be developed for two reasons the first is the development of trust between the employees and management and the second reason is the motivation of the employees to attain the objectives of the organization in a best way.
Human resource Plan for Carphone Warehouse:-
Sharlyn Lauby described that the planning is the basis of the sound decision making for the organization. To be successful the organization should develop both the long-term and short-term strategic and human resource planning. The human resource planning describes the future needs of the human capital required by the organization. The human resource plan should reflect the overall strategy of the organization.
Strategic planning and the decisions are made for the long term o the organizational needs of the human resources error in the formation of the strategic planning can lead to the deficiency in the skills and the people required while effective planning will lead to the proper development of the organizational human resources to enhance organisational performance.
The human resource plan for the CPW will be developed for the two reasons. The first is the participation in the decision making in the following options,
Recruitment needs and cost
Outplacement or redevelopment of opportunities
The evaluation of the available skilled workforce within the organization
Analysis of the available persons in the market to be recruited by the organization
Analysis and development of the training needs and the methods to be used by the organization
The information regarding the above listed human issues is collected from the whole organization.
The second is the process to support the line managers to deal in the best way to the people of the organization.
The human resource plan starts with the need assessment regarding the human resources. This assessment is done by analysing the past data of the organization like how many people hired in past and the issues and difficulties regarding the hiring people. The good need assessment will provide effective information regarding the clear picture of skills and the personal characteristics should be to perform operations of the organization. The first step is the forecasting the need of the people to be recruited by the organization. There are different forecasting techniques which can be used by CPW. The employee forecasting techniques include the followings,
Analysis of past trends
Employee turnover analysis
Projected sales/ production
And scenario building is the few important methods of forecasting used by the organizations to assess the need for the human capital.
The next step is the creation of the human resource plan for the job description form from the management role to the operational employees. Job description is an important management tool helpful for the recruitment, selection and the employee performance analysis.
"The job description lists the specifics of the particular occupation, clearly stating the employee's duties. Benefits are becoming more and more important to prospective employees. Include a list of benefits, such as housing, profit sharing and retirement plans, including detailed descriptions and the dollar value of each benefit."
Recruitment and selection:-
The next step in the human resource plan development is the recruitment and selection of the right people for the job based on the analysis of the job description and job specifications. Job description describes the analysis of the tasks to be performed and the job specification is the analysis of attitudes, skills, knowledge and experience required to perform a particular task. For recruitment the organization can use the internal and external marketing tools. The internal marketing is used to fill the positions within the organization by hiring the internal employees or by the references of the employees. The organization can also use the external marketing to attract new talent in the market for the recruitment of the employees.
There are three basic steps for the selection process. These steps include the interviews and testing, reference cheeking and offer of employment. The selection and hiring process can vary depending upon the nature of job and there may be other steps followed by the organization.
Overall HR plan includes the following steps to be followed by the organization,
Selection and hiring
Training and development of employees
Analysis of legislative requirements
Appraisal of employees
In order to effectively manage the human resources of the organization CPW should follow the steps of the human resource plan. The effective planning will lead to the achievement of the organizational goals through attaining the right individuals for the right job in the organization.
Importance of strategic plan:-
The total HR plans of the organization make it possible for the organization to ensure that the right people in right number are hired for the right positions in the organization to achieve the stated goals of the organization.
The human resource planning can benefit the organization by linking the organizational planning with the human resource planning. This will provide the human capital needed by the organization at the right time to fulfil the short-term and long-term objectives of the organization.
The strategic planning is based on the organizational overall strategy and the mission and vision plays important role while developing the human resource strategy and the human resource planning.
Without proper human resource planning the organization can suffer from the deficiency in the human capital or can hire wrong people for the jobs to be performed. So the effective analysis of the jobs will provide the organization detail about how many and what kind of people should be hired and trained to deal in the best way of the organization.
There are rapid changes in the organizations due to changes in the external environments of the organization so the need for the skills, knowledge and the behaviours of the people should also changed or the employees are asked to change their working styles and patrons. So to deal with these issues the organization should plan and develop diverse work force.
Purpose of human resource policies:-
The human resource policies are the system and the guidelines for making decisions and the actions to be performed by the members of the organization, these policies are developed to support the administration functions related to the personal management, managing performance and the employee relation and planning resources. The human resource planning is developed for the following reasons,
These policies will describe the nature of the organization
The policies describe what employees can expect from organization
These will also explain what organization expecting from employees
The detail of the guidelines and procedures for work
The policies will tell the acceptable and unacceptable behaviours
The policies will describe the consequences or costs of unacceptable belabours within the organization
The human resource policies can help the organization to express internally and externally the organizations requirements for diversity, training and ethics and the organizational commitment to the regulations of corporate governance. The development of policies will set up the standards of behaviours, ethics and the attitudes to be followed by the members of the organization.
Impact of regulatory requirements on human resource policies:-
There should be a proper system develop to evaluate and regulate the human resource policies and procedures developed by the organization in order to effectively implement the human resource policies in the organization. There are the following impacts of the regulatory requirements on the human resource policies.
The regulatory procedures will help the organization to evaluate whether the policies are being implemented properly or not.
The effective regulation will communicate the policies to the members of the organization
The effective regulation will lead to the development of the organization culture supporting the human resource policies within the organization.
In the absence of effective regulation and feedback management cannot assess the effectiveness and the flaws in the policies developed by the organization.
The organizational structure can be defined as, "the formal or informal set of rules, policies and procedures within the organization to develop the lines of authority and the hierarchy levels of the organization. The organizational structure determines the communication and the allocation of rights and duties. The organizational structure also determines the powers, manners and the roles of the members of the organization to determine the levels of the, management.
Impact of organizational structure on the Human resource management:-
The structure of the organization has very important impact on the performance of the human resource management. The variation in the structure of the organization also affects the functions of the human resources within the organization. There are different kinds of structures followed by the organizations depending upon the nature of the business of the organisation
The people working within the organization need a system to define the coordination and the levels of authority and responsibility to work effectively and this s defined by the structure of the organization.
Some organizational structures are very lat while some are mechanistic and rigid. There is different specialization levels involved in different structures o the organization. So the human resource management of the organization fist evaluate the structure of the organization and then they develop the plan for the strategic human resource to manage the people working in the organization.
Cultural impact on human resource management:-
Culture is another important variable affecting the performance of the organization in a collective environment. The culture makes the organization different from the other organizations. Every organization has its own internal culture developed by the founder of the organization. The organizational culture also represents the values, ethics and the attitudes of the members of the organization.
The culture of the organization has positive effect on the performance of the human resource management. The culture attracts the people towards the organization. The organizations with the strong organizational culture are more successful as compared to the organizations with weak organizational culture. The national ad organization's culture has positive impact on the functions of the human resource management like career development and compensation.
The couture of the organization effect positively on the human resource management of the organization in the following two main areas,
Staffing and the training and development
The strong culture is also the replacement of the policies and procedures of the organization. The organizational culture also represents the policies of the human resources in the organization.
The human resource management and the performance of employees are monitored through the process of the performance appraisal. This is the evaluation of the actual performance with the stated or the defined goals of the organization. The difference may be positive or negative depending upon the performance. There are different methods which can be used to evaluate the performance of the employees.
There are two types of the systems used by the organizations to evaluate the performance of the employees of the organization. These are traditional appraisal methods and the advanced appraisal methods.
The traditional appraisal methods include the followings,
Essay appraisal method
Straight ranking method:-
Critical incident methods
Check list methods
Graphical rating scale
The straight ranking method is used to rank the performance of employees on a scale of best to poorest. Essay appraisal method is about the performance of the employees is written by the manager of the related department. This is very easy and simple method for the appraisal of the performance of employees but there are flaws in this system which includes the irrelevant data and information.
There are following advanced methods used by the organizations to evaluate the effectiveness of the human resources of organization.
360 degree appraisal
Self appraisal method
To enhance the effectiveness of the response and feedback evaluation the Carphone warehouse should use the modern methods of appraisal along with the traditional. The overall analysis determines that the strategic human resource management is very essential tool for the development and the achievement of the organizational goals and objectives in long term. So the organization should properly plan their human resource needs and the resources to effectively manage the needs of organization. The organization should use the 360 degree analysis and self appraisal techniques because the 360 degree provides the feedback about the per romance of employees not only from supervisors but also from the suppliers and the customers of the organization. So the management will be able to effectively evaluate the weaknesses and the positivity's of performance related to the members of the organization.