Strategic decisions of human resource management

Introduction

The intention of this report is to analyse and evaluate communication systems which impact upon strategic decisions with reference to modern-day views of human resource management within a medium sized contracting firm. Taking a look at relevant theorist’s views and whether they would fit in to the medium sized contracting firm model

The following areas are to be analysed and considered

Types of communication systems:

1. How these impact on strategic decisions
2. Strategic resource management overview
3. Theorists relevant to Human resource management (HRM)
4. How these impact on a medium contracting firm

Reference is to be made specifically to theorists models (e.g., Guests 1997 model and Legge 1995) how they compare and weather they fit into the modern HR model

Communication methods

See Appendix 1. Within the modern working environment the problem for management and employees alike is how to select the most effective method of communicating with other individuals and groups many factors can help to determine this selection:

Formal or informal content of message;

Speed and delivery and response;

Individual or small group or large group as receiver;

Cost of communications;

Availability of information and communication technology

Communication systems

There are many communication systems which are relied on within the modern working environment but are we sure that we mean the telephone, meetings, computer or even written these themselves have become mobile with the introduction of the mobile phone and lap top linked to a wifi network constantly giving access to internet and emails. These are the tools for communication.

Communication can be broadly classified as verbal communication and non-verbal communication.

Verbal communication includes written and oral communication

Non-verbal communication includes body language, facial expressions and visuals diagrams

Verbal Communication

Verbal communication can be further divided into written and oral communication. The oral communication refers to the spoken words. Oral communication can either be face-to-face communication or a conversation over the phone. The other type of verbal communication is written communication. Written communication can be by email or written. The effectiveness of written communication depends on the style of writing, vocabulary used, grammar, clarity and precision of language

Nonverbal Communication

Non-verbal communication includes overall body language of the person who is speaking, which includes body posture, hand gestures, and overall body movements. The facial expressions also play a major part since facial expressions say a lot.

Non verbal communication can also be in the form of pictorial representations, signboards, or even photographs, sketches and paintings

Communication is a process that involves exchange of information, thoughts, ideas and emotions. It’s important that the delivery of communication is received and under stood by all subordinates; this will then allow communications to play an active role within strategic decisions. Would this be relevant within a medium sized contracting firm?

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Most would find it difficult to operate without effective communication. Communication can take various forms as described above but all forms involve the transfer of information from one party to the other. In order for the transfer of information to qualify as communication, the recipient must understand the information conveyed to them. If the recipient does not understand the meaning of the information conveyed to them, communication has not taken place. Communication is the life source of all organisations because organisations involve people. People cannot interact with each other without communication.

Internal/Organisational Communication

Communication that takes place within an organisation, in addition to the usual face to face, telephone, fax or mail; modern organisations will more often than not use technology to communicate internally. Technology may be used for e-mails or a linked internal communication system such as the intranet which is an internet system designed solely for use by those working within the organisation.

External communications

conversely external communication is communication between the organisation and those outside the organisation. Modern organisations may design technological systems so that they can communicate with customers and undertake e-Commerce. Alternatively they communicate with other businesses through the internet or similar systems and undertake e-Business.

Upward and Downward communication

Downward communication is communication created by directors and managers and passed down the hierarchy of workers in the organisation. In traditional organisations this is the preferred method of communication i.e. Managers decide what the systems, rules and procedures will be and then they pass these down to employees they manage and supervise. Downward Communication can increase efficiency by synchronising organisational procedures and can ensure that everybody is working towards the same overall aims and objectives. Types of downward communication include job descriptions, appraisals/evaluations, organisational policy, and organisational systems

Effective communication is the foundation for effectiveness (McNamara) “experts on organisations; management and leadership avow there can’t be too much communication”. Leaders and managers have realised that there is a need to effectively convey and receive information,

To reiterate (McNamara Carter) subordinates need to be given proper communication from managers, as this is believed to lead to an increase in absenteeism amongst workers thus effecting productivity, there should be two-way communication in an organisation. It’s enviable that the Manager should have personal contact with his subordinates. He should clearly communicate goals and policies of the organization to his subordinates and should get feedback on these goals and policies. Feedback plays a very important role in the communication process. It enables us to evaluate the effectiveness of our message. Giving the subordinates chance to provide feedback is important for maintaining an open communication within the organisation. The manager must create an environment that encourages feedback

Performance appraisal

Performance appraisals the process of obtaining, analysing and recording information about the relative worth of an employee. The focus of the performance appraisal is measuring and improvingthe actual performance of the employee and also the future potential of the employee. Its aim is to measure what an employee does andencourage employee communications about job-related and professional matters. (Harris, F 2006)Forms of communication include coaching, counselling, training and feedback on job performance.

Strategic Human resource management

What is strategic human resource management? Strategic human resource management (SHRM) could be defined as a process which is constantly evolving within many organisations, and should be constantly reviewed to suite employees and employers needs. Its definition and relationships with other aspects of business planning and strategy is not conclusive and opinion varies between many different theorists

Theorist’s views

“Strategic HRM is the key to improved business performance within which there is comprehensive coverage of the various definitions and approaches to HRM, strategy and strategic HRM” Armstrong, M and Baron, A. (2002)

Is this statement a true reflection on what is believed to be the contemporary views of human resource management?

Strategic HRM is regarded as a general approach to the strategic management of human resources in harmony with the intentions of the organisation on the future direction it wants to take. Strategic HRM is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need.

Boxall and Purcell argue that strategic HRM is concerned with explaining how HRM influences organisational performance. They also point out that strategy is not the same as strategic plans. Strategic planning is the formal process that takes place, usually in larger organisations, defining how things will be done, Purcell, J. (2003)

To simplify these statements Strategic HRM is based on HRM principles incorporating the concept of strategy. So if HRM is a rational approach to the management of people, strategic HRM now implies that that is done in a planned way. Individuals, who are highly skilled, highly motivated and have the opportunity to participate within the organization by being given tasks to undertake. However, this will only feed through into higher levels of organisational performance if these individuals have positive management relationships with their superiors in a supportive environment with strong values. All these factors will support the willingness of individuals to perform above the minimum. It also could be said that the case is made for building the worker into the analysis of HRM, on the one hand, by incorporating worker attitudes and behaviour in the study of the HRM-performance relationship, and on the other, by paying serious attention to the association between HRM and worker-related outcomes. Evidence is presented to suggest that worker attitudes and behaviour mediate the HRM-performance relationship and that certain HR practices are associated with higher work and life satisfaction. (Guest, D 1997)

Models on Strategic human resource management

Human resource policies and practices have been linked with strategic objectives of many organisations. A number of British academics have made major contributions to the concept of HRM and their work is summarized below.

Guest, D (1991) has taken the Harvard model and developed it further by defining four policy goals which he believes can be used as testable propositions:

1. Strategic integration: the ability of the organisation to integrate HRM issues into its strategic plans, ensure that the various aspects of HRM cohere and provide for line managers to incorporate an HRM perspective into their decision-making.

2. High commitment: A behavioural commitment to pursue agreed goals and attitudinal commitment reflected in a strong identification with the enterprise.

Guest (1989) believes that the driving force behind HRM is the pursuit of competitive advantage in the market-place through provision of high-quality goods and services, through competitive pricing linked to high productivity and through the capacity swiftly to innovate and manage change in response to changes in the market-place or to breakthroughs in research and development.

Legge, K (1989) considers that the common themes of typical definitions of HRM are that: Human resource policies should be integrated with strategic business planning and used to reinforce an appropriate (or change an inappropriate) organizational culture, that human resources are valuable and a source of competitive advantage, that they may be tapped most effectively by mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the ‘adaptive organisations’ pursuit of excellence

Summary

Overall a medium sized contracting firm needs strategic systems in place especially taking into account the current economic climate, situations may arise where downsizing of the company and redundancies that may be prevalent due to the expected down turn in work load.

At times of high unemployment, workers are thought to be concerned about losing their jobs and hence more conscientious and tolerant of strict management they become, it’s important to maintain communication in this situation. As states it’s important in difficult times for employees to become more flexible and “foster willingness” (Legge, K 1995)

Other areas where lack of communication creates animosity between clients and contracting firm it’s proven that advising client of their needs and subsequently bring the projects successfully to implementation will help secure a good working relationship. Added values such as back up service of experienced staff and well qualified staff in all the requested areas of the construction programme this fits in with Guests model of giving high-quality goods and services, through competitive pricing linked to high productivity. (Guest, D 1997)

If a business has highly motivated team then success will follow, this has to be lead from the top down and strategic integration from HR is paramount in the delivery of success as described in guests theory K, Legge at first contradicts Guests theory with what’s known as a hard model theory by stating that employees are a resource just as any other business resource. Thus, human resource should match business needs and help achieve objectives. Management may monitor their performances for recognition and rewards. Furthermore, organizations will always try to acquire them as cheaply as possible, and exploit them to maximise profits. This model may sound less humanistic but the objective of achieving humanism should not compromise the objectives of organisations (Legge 1995). Theorists then began to look at other types of models and agreed that a softer approach was more fitting in certain current climates Harvard Business School developed soft or developmental humanism model, also takes into consideration integration critical for the development of business strategies. At the same time, it also emphasises on treating people as valued assets. They should be treated as human capital, which is fundamentally different from other business resources. The soft model encourages developing employees so that they become proactive in organizational development and progress (Legge 1995). Many authors question the underlying practical applications of HRM models. Similar concerns are raised about SHRM. Its managerial focus, strategic perspectives and ‘realities‘ of HR practice have been questioned by several writers (Legge 1995; Guest 1997). SHRM is certainly concerned primarily with contributing to the ‘bottom line’ success of an organisation, which may sometimes involve a unitarist approach to the management of employees. SHRM may also infer a ‘hard’ HRM focus, which does not sit comfortably with some authors. However, as Legge (1995) points out, ‘If HRM, in either its ‘hard’ or ‘soft’ guises, involves the reassertion of managerial prerogative over the labour process, the strategies of flexibility reflect and constitute a path to this, employees as both resourceful humans and human resources

Conclusion

The above essay has analysed and evaluated various literature of human resource management, strategy and the links between these elements. While there is considerable discussion in relation to organisations using HRM strategically with a view to enhancing their organisation performance the actual implementation seems variable. The review of the literature also suggests there is a multi layer framework in which human resource management is located. (Guest, D. 2002)

The relationship between organisations and workers is increasingly secured through different forms of involvement, ranging from an alienative to a moral involvement and from compliance to commitment as the basis for the ongoing attachment. Relationship and the interaction between the worker and employer have focused attention on outcomes. These outcomes can be perceived in terms of whether they are processes, procedures or practices, but at another they can be seen to be a mechanism for securing the objectives (Manning K 2005)

Bibliography

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Bratton, J & Gold, J (2003), Human resource management theory & Practice 3rd edition, New York.

Chaffee, E (1985) ‘Three models of strategy’ Academy of Management Review, London.

Foot, M & Hook, C. (2005), Introducing Human resource management 4th edition, London

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Purcell, J. (2003), Strategy and human resource management, London.

Mintzberg, H. (1994), The Rise and Fall of Strategic Planning, Prentice-Hall.

Mintzberg, H., Ahlstrand, B. and Lampel, J. (1998), Strategy Safari: A guided tour through the wilds of strategic management, The Free Press.

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Internet

McNamara, C 1997 (http://managementmrktng/org) accessed 10th Dec 09

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=347150 accessed 5th Jan 10

http://www.business.vu.edu.au/Mgt/working_papers/2005/wp6_2005_worland_manning. Accessed 5th Jan 2010

Journal articles

Guest, D. E. 1997, ‘Human Resource Management and Performance: A Review and Research Agenda’, International Journal of Human Resource Management, vol. 8, no. 3, pp. 263-276.

Guest, D. 2002, ‘Human Resource Management, Corporate Performance and Employee-Well-Being: Building the Worker into HRM’, the Journal of Industrial Relations, vol. 44, no. 3. pp. 335-358.

Guest, D. E., Conway, N. & Dewe, P. 2004, ‘Using Sequential Tree Analysis to Search for ‘Bundles’ of HR Practices’, Human Resource Management Journal, vol. 14, no. 1, pp. 79-96.

Guest, D. E. Michie, J. Conway, N. & Sheehan, M. 2003, ‘Human Resource Management and Corporate Performance in the UK’, British Journal of Industrial Relations, vol.41, no. 2, pp. 291-314.

Reilly, P. (2008) Strategic HR? Ask yourself the questions.HR Director. No 44, February.

Richards, J. (2007) Aligning HR with the business: two steps forward, one step back. IRS Employment Review. No 866 March.