There are views in abundance on whether human resource management is important in an organizational strategy. Among the many components in which human resource management plays an important part, the components that have been considered for discussion are recruitment & selection, training & development and motivation & reward. "Human Resource Management is defined as a strategic and coherent approach to the management of an organization's most valued assets- the people working there who individually and collectively contribute to the achievement of its objectives". Armstrong (2006) P-3. According to Hendry (1995) "Human Resource Management has gained rapid and widespread acceptance as a new term for managing employment." Human Resource Management is the organizational function that deals with issues relate d to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.
Heathfield (2008) "Human Resource Management has gained rapid and widespread acceptance as a new term for managing employment." Hendry (1995) p-3. Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Heathfield (2008). Storey (1995) argues that "Human Resource Management is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an array of cultural, structural, and personnel techniques." (Cited in Beardwell and Claydon, 2007, p-5)
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Among the many available models, there are two models which have been particularly influential in the interpretation of Human Resource Management and are known as the Michigan model and the Harvard model. Beardwell and Claydon (2007). The Michigan model or the hard model of human resource management emphasizes the quantitative, calculative, and business-strategic aspects of managing the headcount resource in as rational a way as for any other economic factor. It adopts a business oriented philosophy which focuses on the need to manage people in ways that will obtain added value from them and thus achieve competitive advantage. Armstrong (2003). According to Beardwell and Claydon (2007) the Harvard model or the soft model recognizes that there are a variety of stakeholders in the corporation, which include shareholders, various groups of employees, the government and the community. The Harvard model points out the legitimate interests of various groups, and assumes that the creation of Human Resource strategies will have to reflect these interests and fuse them as much as possible into the human resource strategy and ultimately the business strategy.
Whether or not human resource management is an important part of organizational strategy, among the many key components of human resource management, three components have been taken into consideration for discussion and an analysis towards their contribution to the organization has been carried out.
As mentioned above, human resource management plays an important role in the recruitment and selection of the employees of an organization, it is an extremely crucial element of HRM in all organizations, irrespective of their size, structure or sector. Marchington and Wilkinson (2002). Anderson (1994) suggests that it is a process which is concerned with identifying, attracting, and choosing suitable people to meet an organization's human resource requirements. These activities are integrated and where recruitment ends, selection begins. (Cited in Beardwell and Claydon, 2007, p-190). Whithill (1991) describes the recruitment process as a positive one which builds a roster of potentially qualified candidates as opposed to the negative process of selection. However, selection is concerned more with predicting as to which candidates will make the appropriate contribution towards the organization. Hackett (1991) as cited in Beardwell and Claydon, 2007, p-190). Recruitment and selection which comes under the Michigan model is done by the human resource management who uses a job analysis to identify the kind of personal characteristics needed to perform the job adequately. Then a person specification is created which is dependant on the requirements of the job. Harrison (1994). However, very often decisions are made in an informal and reactive manner without an appropriate analysis of whether or not specific jobs are needed, other than to fill a vacancy. Marchington and Wilkinson (2002) The procedure of selection attempts to predict, as accurately as possible, a person's likely performance in a particular job or where there are several vacancies. Boella and Goss-Turner (2005). However, recruitment & selection cannot be overcome by the problem of high labour turnover. This has to be tackled by keeping all conditions of employment under constant review and by making appropriate improvements to conditions as circumstances dictate. The nature of the hospitality industry, however, that most people who hold supervisory or management positions are faced frequently with the need to recruit people to fill vacancies. The human resource management of an organization at times does not realize that they recruit not just from their primary markets, but also from secondary labour markets. Also recruitment needs to appeal to passive job seekers and not just the active job seekers. Boella and Goss-Turner (2005). However, according to Boella and Goss- Turner (2005) the human resource management of an organization needs to make appropriate plans in the process of recruitment and selection which should be made applicable in the context of employment legislation, which covers issues such as the employment of women and children, age, sex and race discrimination as well as the employment of disabled people. Working in hotels (1991), a Commission for Racial Equality report, found that some organizations had done little for the achievement of equal opportunities in regard to ethnic groups and communities which are considered a minority. (Cited in Boella and Goss-Turner 2005). Also, the HRM of various organizations faced with declining markets should start planning well in advance for reductions in the numbers of employees so as to maintain long term security for as many staff as possible. Marchington and Wilkinson (2002)
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Moving on to the second component which is the training and development of employees in an organization it is to be pointed out that training and development of employees ensure the productivity and profitability of an organization. According to McNamara (2008), "Training involves an expert working with learners to transfer to them certain areas of knowledge or skills to improve in their current jobs." The right employee training, development and education at the appropriate time provides big payoffs for the employer in increased productivity, knowledge, contribution and loyalty towards the organization. Heathfield (2008). Training and development is extremely necessary so as to ensure the continuous assessment of learning and development opportunities for its employees and thereby enabling them to advance their careers and support organizational growth. Wilson (2004). Development is a broad, ongoing multi-faceted set of activities (training activities among them) to bring someone or an organization up to another threshold of performance, often to perform some job or new role in the future. McNamara (2008) However, the business cycle of peaks and troughs tends to have a significant effect on the delivery of training and development because it is sometimes seen as a cost rather than an investment. When there are budgetary constraints in an organization, training and development is often seen as a relatively easy target as it is assumed that the consequences are not immediately apparent. McNamara (2008) In the field of hospitality services, staff training is provided in a very well thought out way but it proves to be ineffective due to the very high turnover of labour.
The final component in this essay in which HRM plays an important role in organizational strategy is motivation & reward. Motivation is important and helps to ensure better organizational performance. The concept of motivating and rewarding deals with the strategies, policies and processes required to ensure that the contribution of people towards the organization is recognized by both financial and non-financial means. It is about the design, implementation, and maintenance of reward systems which aim to meet the needs of both, the organization and its stakeholders which come under the Harvard model. Armstrong (2007)
People's needs are considered by another theory which helps the HRM of an organization to direct its motivational efforts, that of Abraham Maslow. As Maslow suggested that people's needs are satisfied in a progressive manner and it is only when the basic needs are met, do their aspirations rise and other goals set. Efforts to motivate by the human resource management of an organization must always reflect the reality of the jobs people do and the circumstances in which people do them. Forsyth (2007)
According to the basic premise of Maslow's theory, once a need of a lower level has been satisfied, it does not act as a motivator any longer. "The needs of the next highest level in the hierarchy demand satisfaction and become the primary motivating influence." Mullins (1992), p-201. However, it is essential to notice that Maslow points out that a particular need at one level does not necessarily have to be satisfied completely before a subsequent need arises. Mullins (1992)
According to Armstrong (2007) p-4, the human resource management can achieve their aims of rewarding by developing and implementing strategies and policies, processes and practices that are built on a philosophy, operate in accordance with the principles of distributive and natural justice, functioning fairly, equitably and consistently and are aligned to the organizational strategy. These are deemed fit for purpose and help to develop a high performance culture.
Therefore, after the analysis of three key components, it can be pointed out that Human Resource Management is important in organizational strategy as strategic HRM addresses broad organizational issues relating to changes in structure and culture, organizational effectiveness and performance, matching resources to future requirements, the development of distinctive capabilities, knowledge management and the management of change. Armstrong (2006). As Boxall (1996) remarks, "the critical concerns of HRM, such as choice of executive leadership and formation of positive patterns of labour relations, are strategic in any firm." (Cited in Armstrong, 2006, p-30)
Boxall and Purcell cited in CIPD (2008) argue that strategic Human Resource Management is concerned with explaining how Human Resource Management influences organizational performance. According to Armstrong (2006) p-31, "There are five approaches to strategic human resource management. These consist of resource-based strategy, achieving strategic fit, high-performance management, high commitment management and high involvement management." In the majority of organizations people are now the biggest asset. The knowledge, skills and abilities have to be deployed and used to the maximum effect if the organization is to create value. The intangible value of an organization which lies in the people it employs is gaining recognition and is generally now accepted that this has implications for long term sustained performance. CIPD (2008) It is therefore too simplistic to say that human resource management stems from the business strategy. "The way in which people are managed, motivated and deployed, and the availability of skills and knowledge help to shape the organizational strategy." CIPD (2008) Human Resource Management also plays an important role in the focus and framework of an organization. Organizational strategies are driven by business and focus strictly on organizational effectiveness. Therefore, people are viewed primarily as resources to be managed towards the achievement of strategic business goals. Considering the importance of framework in an organization, strategies by their very nature provide unifying frameworks which are broad and contingency based. CIPD (2008). They incorporate a full complement of HR goals and activities designed specifically to fit extant environments. CIPD (2008)
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Human Resource Management also plays an important role in creating and maintaining an organization's mission and vision statement which comes under the Michigan model. Heathfield (2008) The mission and vision statement of an organization makes the reason evident for the existence of the organization. It also helps the employees to understand the mission and goals of the organization. The HR solely plays the role of creating the mission and vision which gives shape and direction to the organization's future. Another important area where human resource management plays an important area is in maintaining the expenses of an organization. This has lead to outsourcing in organizations which has become increasingly popular to improve basic services while allowing human resource professionals time to play a more strategic role in their organizations. This proves to be a good way to potentially cut costs. Heathfield (2008). Human Resource Management acts as a valuable organizational asset as human capital can be enhanced by the further investment of education and training.
Human Resource Management helps the organization to achieve success through people. As Ulrich and Lake (1990) point out, "Human Resource Management systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities." (Cited in Armstrong, 2003, p-4)
In adopting a strategic approach to human resource management, there is concern with the ability of the business to manage its people-related activities effectively, to mesh these together and to facilitate human resource activities supporting the corporate objectives. Harrison (1994). "Sisson (1989) suggests that human resource management features include stress on the integration of personnel policies, giving line management key personnel responsibilities, a shift in emphasis from collectivism to individualism, and a desire for employee commitment and "ownership"." (Cited in Harrison, 1994, p-140) Management have a key role in setting the relevant human resource objectives, making sure that all subset objectives are congruent and feasible and changing approaches and practices where necessary. Therefore, any organization wishing to move to a more holistic approach to the management of its human resources needs to consider how the existing in-house system of industrial relations or employment relations will fit in and in what areas changes will be necessary to achieve the desired results. Harrison (1994)