Strategic Human resource management is considered as one of the major integral part of any organisation or company. People are now considered as more important resources as compared to the other resources of the company, competitive advantage of the organisations or companies now days are based on their employees. And to build this competitive advantage effective strategic human resource management is very much important.
This report is basically concentrated on the importance of the strategic human resource management in different organisations. Increase in competition made a very tough environment for the organisations or companies to survive in. Sustainable competitive advantage is very much important for the organisations to survive, and this sustainable competitive advantage can be achieved with effective human resource management.
In this report importance of ethical and legal matters as well as the importance of measuring the effectiveness of the HR strategy will also be explained with the example of telecommunication company (Telecom).
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Due to increase in competition, day by day it's becoming very hard for the companies and organisation to survive. To survive and to sustain their survival, companies and organisation always looking to build their competitive advantage in such a way or on such factors, so that their competitors cannot copy or imitate there uniqueness. In early days these factors were based on effective supply chain or highly effective value chain mechanism or company's competitive advantage is directly based on their Information technology. But as the time passed by and as the number of competitors increased in market it became very hard for companies to sustain their competitive advantage based on these factors. To sustain in this kind of environment companies or organisation need to put their focus on long term competitive advantage and how they can sustain their competitive advantage. One of the major factor thatattracts the huge interest of higher management of the companies or organisation in past recent years is there Human resource department. Now days employees are consider as companies resources and different companies and organisations are now tries to build their competitive advantage on their employees. Proper Human resource strategies are formulated now days to attain the objective or the goals of the organisation. These Human resource strategies are directly aligned with organisation business strategies, so they can complement the business strategy and achieve the desired output for the organisation.
As the human resource department moving up in organisational hierarchy, management of this department as well as the resources attach to this department is also plays a very vital role in the organisational performance. The major aim of the human resource management is to make sure that organisation or company obtains and retain the skilled, committed and highly motivated workforce. And this is done by providing proper training to the deserving employees, continuous development opportunities.
On the other hand side Human resource management also consider the ethical issues as well as the legal issues, while formulation their HR strategies. For example if there is any ethical issue that is bothering the employees or in case of whistle blowing, proper steps are taken by HR department to handle these kind of situation (steps like counselling periods with employees).
Management also regularly check the impact of the HR strategy, weather its working properly or need some changes to enhance the organisational performance. Different tools are used for this check; two major tools are Balance Score Card and Benchmarking. With the help of thesetools organisational management compares the actual output with the desired output; proper measures are taken in consideration to achieve the desired output.
Main objectives of this report are:
Understanding the importance of effective HRM strategy and how organisation can measure the effectiveness, overview of different tools used for this measurement. (Balance score card and benchmarking)
Importance of the ethical as well as the legal issues and how HR management can handle these issues.
Understand the importance of the HR training and further study schedule for the deserving employees.
To understand these issues more deeply this report is based on Telecom (Telecommunication Company in New Zealand). All the issues and study will addressed with Telecom examples, that how they address there ethical codes and how there HR strategy complement their business strategy.
Factors involved in measuring the impact of given HRM strategy and tools that are used to measure this impact
Always on Time
Marked to Standard
Human resource strategy and functions plays a very important role in organisational performance and frequent checks on these strategies are very much important to sustain the organisational high performance. These checks and measures are done through different tools or organisations uses different tools to measure the impact of current Human resource strategy; some of these tools are Balance score card and Benchmarking. Human resource performance cannot be measure in numbers but it can be measure by comparing the current status and desired status of other departments, for example financial department or department that include customer relations or sales.
Balance score card is one of the major tools, which is widely used in measuring the current status compared to the desired status of the organisation. Now days not only machinery or facilities or computers drives value for the organisation, employees skills and knowledge also plays a very important role (Niven, 2005). And to make sure that employees are gaining right knowledge for right task becomes the most important aspect for the human resource management. If one department is not performing well or not producing desired output that means there is something lacking, may be not right people for right job or may be not enough knowledge or motivation to carry out the task. In this case training programs or motivation with incentives is done by the HR management. To check this kind of scenarios balance score card is used by the management.
Balance score card is divided into four different prospective, first one is Financial prospective and the second one is Customer prospective, third and fourth are Learning and development and Internal business process. Each of these parts are subdivided into further parts to calculate or measure the performance of the organisation in that particular department, for example financial prospective is subdivided into four parts that are objectives, measures, targets and initiatives. That's what the objective and what is the actual performance and what is the desired output and what measures should be taken to achieve the desired outputs (Niven, 2005)
On the other hand these different balance score card propective are also the major factors that are involved in measuring the impact of the current HR strategy, for example if Telecom follows the HR strategy of differentiation in terms of their customer relations and sales, and to measure weather their strategy is working or not or is there any need of amendments, balance score card will be the one of the best tool to measure the impact of their current strategy (differentiation). Factors like customer relation and financial will be directly taken under consideration in balance score card. Actual status will be compared with the desired output and if there is a lacking proper measure should be taken to avoid or overcome the lacking. Proper training programmes will be considered and if there is lack of motivation in the team, incentives structure will be reconsidered.
So the regular checks for the current HR strategies to measure their impact is very much a vital part of Human resource management. And tools that are used to done this checks are Balance scorecard and Benchmarking.
Connection between HRM strategy and organizational strategy
Alignment between companies' business strategy and HRM strategy is very much important, if these two complement each other companies performance will be definitely on right track or will definitely boom. Human resource activities should dovetail and support the overall organisational activities. To make sure that the company have sustainable high performance, human resource should move in the same direction with the organisational mission and vision. Clear picture of companies' mission and vision and objectives is very important, while formulating companies HR strategies and should make sure that HR activities should follow the mission and vision of the company (Krishnan, 2005)
When HR strategies are congruent with the culture of the organisation or company and fit with business strategy is called vertical integration. And this vertical integration is one of the major aspects in order to attain the competitive advantage for the company on the basis of Human resource. For example in Telecom if there business strategy is differentiation, there HR activities and functions should be congruent with their organisational culture and should fit perfectly with their business strategy. There HR strategy will be more focused on short term planning; perfect training schedule should be run.
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So to make sure company have sustainable performance and sustainable competitive advantage, vertical integration between HR strategy and Business strategy is very much important
Ethical code of conduct
Morals and ethical codes of conduct are the building blocks of organisational performance, if a company is looking to build their competitive advantage on their employees. It's very much important that the HR department made their strategies or conduct their activities based on ethics and morals. Form past years its being the biggest question that should managers consider ethics, when making decisions. And the answer for this question which is now consider by different organisations and companies is that make as much profit or many you can, while considering the basic rules of the society and these rules comprising both legal and ethical codes.
Sometimesit's become very hard to understand that what is ethical and what is unethical, and to understand this so that companies or organisation management do the right decision five moral judgment principles are taken in consideration. These principles are 1) Utilitarian principle: this means that what action will do the most good and least harm for everyone who is affected. 2) Rights principle: this means that what action do have the moral right to take in the situation under consideration. 3) Justice principle: this principle is based on what action produces a fair distribution of benefits and costs for all of the stakeholders. 4) Care ethics principle: this principle is based on what action appropriately cares for your needs and also appropriately cares for those people with whom you have special relationship. 5) Virtue ethics principle: this principle states that what action displays virtuous character traits. So these are the five major principles that are taken in consideration, while judging what is ethical and what is not.
Every company or organisation has their own code of ethics that they rely on to avoid any discrepancies in the management or employees behaviour. For example Telecom have their own code of ethics that they consider very important and make sure that all their employees are well aware with these ethics. These ethics are one of the integral parts of the training process, each and every employee that is hired by Telecom has understand and comply with these code of ethics. Some these ethics are 1) Conflict of Interest: A conflict of interest occurs when anindividual's interests interfere, orappear to interfere, with Telecom'sinterests. Telecom expects its peopleto act in Telecom's best interests at all times.(http://www.telecom.co.nz/binarys/code_of_ethics_dec11.pdf). This first and far most important rule or principle that employees have to follow, that they have to take care about their companies' interest. 2) Telecom people will not without the prior written consent of Telecom: Engage in any other business orcommercial activities which mayconflict with their ability to perform their duties to Telecom. 3) Telecom people will not accept gifts or personal benefits of any value frominternal or external parties if it could beperceived this could compromise orinfluence any decision by Telecomtaking into account OperationalSeparation and the perceptions of keystakeholders. So these are some of the major code of ethics that are taken in account by Telecom management to make sure that there will be no discrepancies in employee's behaviour towards the company.
Ways to effectively manage ethical dilemmas regarding whistle-blowing, multinational workforce, equal opportunities and diversity
In workplace, employees are continuously faced with ethical dilemmas. And some time they are confronted with such issues and situations that need sound ethical judgment to overcome the situation, but in most of the cases its find difficult to do so because lack of requisite skills comes in the question. These situation ranges from simple issues like employees decision weather or not to cheat his or her boss to complex scenarios where organisations are faced with value conflict that pits their short term survival interests against their long term interest and those of the community. Ethical dilemmas are often arise in conflict of interest, use of company resources and staff issues and it's become very important to solve these dilemmas otherwise it will directly affect the business operations and staff productivity. For example a scenario comes up where Human resource officer encounter an ethical dilemma when he asked to give preference to CEO's relative in interview process. It's not going to be easy for Human resource officer to overcome this kind of dilemma as proper skills and knowledge is required to overcome this kind of situation (Mhonderwa, 2012)
So some of the steps that can be taken into consideration to overcome these kind dilemmas are: 1) Identify the unethical behaviour in question, determine how it affects you and your organisation and is it worth reporting to senior management or not. 2) Other way that can help to manage the ethical dilemma is by creating a support group, explain the unethical behaviour to your co-workers or peers and ask their opinion on the situation. 3) Determine the correct supervisor or authority figure to which you can report the problematic behaviour. 4) Other way that can help to manage the situation is by Blowing the whistle.
Now day's companies and organisation have proper structures to overcome the ethical dilemmas. For example in Telecom proper whistle blowing framework is present to report any unethical and illegal behaviour. "Any Telecom employee (including a contractor) who becomes aware of a legal, regulatory, policy or other compliance issue has a responsibility to report it using Telecom's breach reporting/whistle-blowing frameworks which include a financial compliance escalation procedure. In addition, Telecom has a procedure whereby accounting, auditing or internal control breaches or concerns may be reported confidentially to the Audit and Risk Management Committee" (http://www.telecom.co.nz/content/0,8748,204684-203840,00.html#3
Different training methods
Training is one of the major factor that works as building block in organisational performance, highly skilled and trained workforce is one of the major key factor for organisation management to build their competitive advantage on. To use this factor effectively it's very much important for HR management to understand the aspects related to this tool, first of all management need to identify the need of the training, that which area needs the training or which employee needs training. This need can be identify by conducting formal performance review, direct observation, discussion and by surveys. In second phase proper planning of training is done by management, targets are set to measure the effect of the training in future (Al-Ajlouni & Athamneh, 2010)
After the second phase proper training methods or techniques are opted by the management to conduct the training. Two categories of training that are widely used by the organisations or companies are: 1) On job training and 2) Off job training. On job training category have different methods of training like: 1) Orientation, 2) Apprentice, 3) Assignments. On the other hand side in Off the job category have methods like: 1) Vestibule,2) Role playing, 3) Lecture, 4) Case discussion and 5) Conferences (Al-Ajlouni & Athamneh, 2010)
So these are the some of the training methods that are widely used by different organisation and companies to conduct their training procedures.
Importance of professional development and further education for employees
In today's highly competitive world day by day it's becoming very hard for organisations to retain their employees, retention of employees is becomes one of the biggest issues for the organisations and companies in past few years. To overcome this kind of situations companies and organisation tries to put their main focus on providing career options to the employees, more development options are now provided to the employees so they can make themselves more committed toward the organisation or company (Merchant, n.d.)
This career development is done by different ways, for example by providing further education opportunities for the employees. So they can enhance their abilities and core competencies, this will indirectly help the organisation as well by increase in organisational performance and employees more commitment towards the company.
In context of New Zealand organisation some of the NZ organisations provide opportunities to their employees for further studies, so they can enhance their abilities.
For surviving in competitive world its very much important for organisations and companies to build their competitive advantage in such a unique and different way, so that no one can imitate or copy it. And competitive advantage build on human resources in one of the most sustainable competitive advantage a company can get. But it's not easy task for organisation or companies management to build their competitive advantage on human resources, they have to consider allot of factors before they get to point, where they can enjoy high performance criteria. Some of the major factors that they have to consider or taken under consideration are: 1) Human resource strategy should be aligned with organisational business strategy, mission and vision of the organisation should be very clear to human resource management, they should know the companies goals and how they can achieve those goals. 2) Proper and regular checks for the current HR strategy should be done, so if there is any need for amendment it should be done straight away. Tools like Balance score card and Benchmarking should be used for this checks or measurement. 3) Companies and organisation should also give their high consideration toward the moral and ethical codes conduct. 4) Proper training and development opportunities should be provided to their employees, so they can enhance their abilities and commitment towards their organisation or companies.
So these are some of the very important factors that need to be considered by different organisation and companies in order to survive in hard competition.