Strategic human resource management in New Zealand organizations
- Introduction
Organizations in New Zealand face stiff competition not only within the country but also from other firms across the globe. This has therefore made it necessary for executives in these organizations to come up with strategies that would enable these organizations achieve a competitive advantage over their rivals. One way through which this can be attained is through effectively managing the organization’s human resource. This is because people are among the most important resources of organizations and the manner in which they are handled would have a very huge impact on the performance of these organizations. This paper therefore looks into the meaning and importance strategic human resource management in relation to the performance of New Zealand organizations (Parry, Stavrou and Lazarova, 2013). The paper begins by outlining the meaning of strategic human resource management. This is then followed by an examination of the strategic human resource management practices of organizations in New Zealand and the impact these practices have on the organization’s performance.
- The Meaning of Strategic Human Resource Management
Strategic human resource management can be defined as the process of formulating and implementing human resource management policies which bring forth employees that are competent enough to enable the company to achieve its aims (Armstrong & Armstrong, 2011). This therefore means that as one of the most important elements in the management of an organization, strategic human resource management ensures that the people involved in the running of the business have acquired the requirement competencies as well as behaviors in order to ensure that their performance leads to the attainment of the organization’s aims and objectives. One can also define strategic human resource management as the process through which the human resource function of an organization is linked with its strategic objectives. This is done with the main aim of improving the performance of this organization; profit-oriented organization usually has different objectives each of which can be achieved as long as the right people are brought on board. Such objectives include maximizing profits, reducing costs of operations, increasing the company’s productivity among others. All these objectives can only be achieved if the organization’s management employs people who are competent and ensures that they are adequately motivated to achieve high levels of performance.This is the reason why it is important for the management of an organization to ensure that the human resource function of an organization is linked with the organization’s strategic function (Boxall, Purcell and Wright, 2007). This process, as conducted by the organization’s strategic human resource management function ensures that all employees in the organization are well aware of its objects and that they are all working towards achieving them. Consequently, these employees would be taken through intensive training programs to ensure that they are competent enough to perform the tasks assigned to them. Moreover, it is also the duty of the organization’s human resource managers to ensure that these employees are adequately motivated for them to achieve high levels of productivity.
3.0 Strategic Human Resource Management in the Context of New Zealand Organizations
Organizations in New Zealand have attempted to employ the strategic human resource management practice. This has been evident not only in large businesses but also in small ones. It is important to note that a majority of businesses in New Zealand are small in size (Price, 2011). These businesses employ less than twenty people who carry out all the tasks that are necessary for the company’s continued existence. In these small businesses, the owner is usually the manager and therefore responsible for making all decisions regarding the running of the business.it is therefore this manager who would decide on whether a particular team of employees need training or not. Since the owner is still the manager of the business, it can be safely concluded that such business do not have specialized management personnel. This therefore gives room for poor decision making processes. This challenge notwithstanding, small businesses have been able to employ qualified personnel and ensure that they well motivated to bring forth high quality output within the businesses (Boxall, Purcell and Wright, 2007).
As far as strategic human resource management is concerned, the large businesses within this country have indeed performed well. This is the case because these businesses have professional managers as opposed to the small businesses which are run by the owners with no skills in the management profession. In these large businesses, the ownership and management of the business has been separated thus allowing to the managers to use their skills and experience in management to ensure that the company in question is performing well. Moreover, the management in these large enterprises has also been at the forefront in ensuring that the company’s employees are well trained for them to be able to perform their function accordingly (Price, 2011). This has been possible because the companies’ management have employed the strategic human resource management principles of looking the human resource management function and the company’s objectives. Since one of the most important objectives of these companies was to attain an improvement in productivity; training employees was therefore very crucial in order to enhance their capacity to achieve levels of performance. This is the role that was played by the strategic human resource management function in these organizations.
3.1 Strategic Human Resource Management in New Zealand and its Challenges
It is important to note that the strategic human resource management in organizations in New Zealand faces a number of challenges. One of these challenges is the fact that human resource management is not considered as a top career choice. This is very challenge to this profession because this poor attitude that people have towards this career has resulted into this career getting the poorest quality of employees. As a result of this, it has been very challenging to develop the human resource management profession to a level that would bring forth satisfactory performance of organizations through optimal employee recruitment and training programs (Schuler, 2001). Most people in this country believe that the requirement for one to work as a human resource management specialist is simply the ability to work with people. This position alone discourages people who would have turned out to be the most productive human resource management specialists. This is because such people are always on the lookout for employment opportunities that are challenging to them and which enable them to utilize their skills accordingly. As a result they feel that human resource management would not enable them to meet their career objectives. This therefore leaves the human resource management with people who are in fact les interested in the profession (InteArmstrong, 2008). This challenge has not only affected small businesses but also large business entities thus significantly lowering their performance. It is a challenge that ought to be addressed accordingly.
Another challenge facing organizations in New Zealand as far as strategic human resource management is concerned is the difficulty in finding staff with the right skills. A good number of organizations in New Zealand are encountering this challenge (Deb, 2009). One of these firms is Kiwi whose human resource management has continuously experienced challenges in finding the right engineers, sales representatives and IT staff. This has been the case because these skills have been very scarce within this business environment regardless of the fact that many potential employees are coming out of colleges each year. This means that there is probably a mismatch between the skills required in the market and what is being taught in the institutions of higher learning. This problem has really affected the company’s strategic human resource management function because it has not been possible to get the right people on board who would ensure that the companies’ objectives are net accordingly (Zanko, 2003). This is true because when an organization’s management finds it challenging to fill a particular employment position, it becomes very difficult for the company to meet its objectives because this only possible when the right people are employed to carry out the organizational tasks. Other employment positions that have also been difficult to fill include the accounting profession as well executive and management positions. These positions are very important to the performance of the organization and therefore it is very important for the managers concerned to make sure that all has been done to resolve this issue in order to bring about an improvement in the productivity of these companies.
4.0 Importance of Strategic Human Resource Management
Strategic human resource management has played a very important role in enabling organizations within New Zealand to attain a competitive advantage over their rivals. This is the case as a result of using the strategic human resource management practices; the organizations were able link to the human resource management function to organization’s objectives. One of the objectives of these organizations is to improve productivity. It was therefore crucial for the management of these organizations to come up with strategies through which it would be able to improve productivity (Regis, 2008). One of these strategies is to put mechanisms through which the remuneration of organizations is based on their level of performance. This remuneration structure has been employed on thirty-six per cent of employees within this country. Improvement in productivity has been realized by all firms which have linked their employees’ remuneration to their performance (Deb, 2009).Such organizations have been able to realize an improvement in productivity and hence improved financial performance as compared to those firms which do not. This is the case because when employees realize that their level of performance influences their level of remuneration; they always put in greater efforts to ensure that they get satisfactory remunerations. For those organizations which have not employed this very important strategic human resource management practice, their financial performance has not been as satisfactory. It is therefore worthwhile to conclude that as far as organizations in New Zealand are concerned, strategic human resource management plays a very important role in giving them a competitive edge over their competitors (Pravin, 2010).
Another very important organizational objective is attaining high level of employee loyalty and therefore reducing the staff turnover ratio. This is a very crucial objective because it results into a reduction in the costs of running the business. It is important to note that when employees leave an organization; the organization ends spending huge amounts of resources in recruiting others to replace them. This in long ruin reduces the company’s profitability. It is therefore important for the company’s human resource management to ensure that the staff turnover ratio is as low as possible (Mathis and Jackson, 2010). This is only possible if the organization puts in place a working environment that encourages the employees to stick with the company. One of the strategies that can be used to achieve this objective is by putting in place flexible working schedules. For instance, it would be very beneficial to a company is it out in place measures to enable employees to work from home. Such a move has been practices a by a number of organizations in New Zealand which in turn has not only resulted into an improvement in these employees’ performance but also an increase their loyalty to the organization. This therefore led to reduction in the organizations’ employee turnover hence improve productivity and profitability(Armstrong and Baron,2002).
In a very competitive business environment, there are very many c0ases of organizations ‘poaching’ employees from their competitors. This therefore calls upon the management to ensure that its employees enjoy working in the company and that they are satisfied with the company’s working environment in order to enable them resist the temptation of moving to other organizations (Price, 2011). This is the reason why some organizations in New Zealand came up with policies by which employees would by choose decide to work from home as long as they consistently deliver a high quality of service. This was very well received by employees who believed that working from how would give them opportunity to even deliver higher levels of output and therefore cause the organizations to perform even better. This is therefore of the strategic human resource management practices that was employed by a section of the organizations in New Zealand in order to attain a competitive advantage over their rivals.
5.0 Conclusions
In conclusion, strategic human resource management is very important as far as the performance of an organization is concerned. This is the case because it links an organization’s human resource function to the objectives of the organization thus ensuring that the organization is posting superior levels of performance as compared to its rivals. In this paper, the author looked into the meaning of strategic human resource management and examined the concept in respect to the performance of organization in New Zealand. It was established that in New Zealand, this human resource management concept has been better implemented by large businesses than small ones. It has also been established that improvement in financial performance has been achieved by firms that have practices strategic human resource management because it has given them a competitive edge over their rivals.
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