Strategic Human Resource Management
Abstract
Over the last few decades, HRM has undergone a number of changes that have given it a more central role in many organizations today. This has seen the human resource management (HRM) transform into more of a strategic partner rather than primarily focusing on administrative and operational roles. This transformation has seen the HR departments playing an important role in enabling different organizations achieve their strategic goals. Rather than play a supporting role to the organization, HRM has now aligned its functions with the strategic plans of the organization. This transformation has seen more and more organizations, such as Apple Inc. achieve competitive advantages in their respective markets, ensure successive planning, retain and attract the best talents in the market, ensure legal compliance and manage a labor-cost effective workforce. Human resource is the most important resource in the organization, and hence its strategic management would result in an organization achieving higher profit margins and its strategic goals.
Introduction
According to Dias (2012), “Human Resource Management (HRM) is the process of employing people, training them, compensating them, developing policies related to them, and developing strategies aimed at retaining them” (pg. 8). Historically, the role of HRM was more administrative than strategic as it involved actions such as payroll processing, arrangement of company outings and making sure that forms were filled out correctly among many others (Dias, 2012, pg. 8). The traditional role of HRM involved the dealing with individual relationships and employee relationships with management. In basic terms, traditional HRM was involved in the traditional, maintenance-oriented and administrative roles which did not involve the senior management of the company. Consequently, the roles of the personnel HRM include roles such as employment, compensation, employment relations, training and development. These roles often involve lower levels of management hence making HRM a separate function from the organizations main management. Strategic HRM, on the other hand, focuses on the aligning of all the HR functions of a company with the operational strategy that the company operates with. Strategic HRM is all about the management of the human resource of an organization to achieve a competitive advantage (Lawler et al, 2006, pg. 6). HRM is not only crucial to the success of an organization but should be part to the organization’s overall strategic plan. This is due to the fact that human resources play the most important role in the success of an organization. As a result, it is necessary for organizations to shift from personnel HRM to strategic HRM, as strategic HRM determines how productive the organization would be.
Competitive Advantage
It is no doubt that the human resource is the most important resource in an organization. Many companies all over the world rely on human resources for their profits. Having this in mind, employees are assets to the organization and should always be maximized. In relation to the HR function of staffing, strategic HRM develops a strategic plan that determines how many people to hire. The strategic plan would hence help in the hiring process to recruit the best suited candidates and assign them the right jobs (Dias, 2012, pg. 27). Many great companies in the world today, such as Apple, have adopted strategic HRM that enables them to hire the right people who care and would actually lead the organizations to the right direction. Apple, for example, works with its HR team in figuring out what kind of a person they need, not only a person that they need to fill out a position, but one that can contribute greatly to the achievement of the company’s goals and objectives. Through the hiring of an individual that would contribute to the achievement of the company’s goal, the individual becomes more of an asset to the company rather than an expense (Lawler et al, 2006, pg. 9).The organization would hence experience a greater return on investment which would enable it achieve a competitive advantage in the market.
Strategic HRM is all about making an organization achieve a competitive edge through its workforce (Dessler, 2000, pg. 12). A company that employs dedicated, experienced, well-trained and motivated employees is most likely to achieve an increase in productivity and efficiency in operations. Strategic HRM is concerned with hiring of workers that possess a high potential for professional growth. Thereafter, it gives the employees ample time to learn and grow in their different roles in the organization. The determination of the training needs and the implementation of training programs are very important tasks in any given organization. The developing of the workers with the highest-level expertise in their respective fields can grant an organization with the access to the brightest minds in the market (Dessler, 2000, pg. 14). This may ultimately put an organization on the leading edge of innovation. Apple is the leading innovative company in the world, a position it had held for the last few decades. The company has dedicated much time on the training and development of its employees and setting up of research centers that are filled with the brightest minds in the world. The company’s ground-breaking innovations that include the iPod, iPhone and the iTunes music store have changes the electronics industry. Currently, many other organizations, including Samsung, are aping Apple’s innovation strategy. Apple dedicates time to address the training needs of its employees and aims at developing them to realize their full potential. Consequently, the employees increase the productivity and product quality of the different products offered by the company.
Successive Planning
Labor-Cost Effectiveness
A human resource management that transforms to a strategic partner from being primarily administrative and operational is likely to achieve labor-cost efficiency (Lawler et al, 2006). The administrative and traditional HR departments always dispense pay raises, compensation and benefits based on arbitrary metrics such as the number of years an employee has served the organization. Experience has always been used to determine the compensation of the employee rather than the input and output of the employee. Using strategic planning, HR departments learn to promote, reward and compensate the top performers. The top performers are those that contribute the most to the achievement of the organizational goals and the long-term success of the organization. A strategic HRM philosophy would ensure that the employees with the most contribution to the organization are highly compensated rather than those that have done little for the company (Lawler et al, 2006, pg. 10). It is common that many organizations are paying highly people that have little contribution to them or promote people that have stayed longest in the organization rather than those that are highly productive. Consequently, these organizations do not receive returns on investments. The organizations end up spending much on ‘expenses’ rather than ‘assets.’ With strategic planning, organizations are able to invest wisely and compensate handsomely the employees that truly deserve.
Compliance with the Law
As a strategic partner, the HRM would ensure legal compliance with all the relevant legal issues related to the organization (Dias, 2012, pg. 27). Whereas administrative human resource departments handle legal issues reactively by putting in place policies that would prevent the re-occurrence of costly incidents, strategic HRM react proactively by ensuring that the organization with all the legal issues. Though strategic HRM, the company develops policies that abide by all the employment laws including discrimination, sexual harassment and equal opportunity employment among many others. A strategic HR plan would identify the flaws that are existent in the company even before the problem occurs. For example, an organization can easily identify lack of facilities to be used by the disabled even before such a problem occurs.
Employee Retention
A key problem facing many organizations today is retention of employees. Due to the demanding nature of the different markets and the highly demanding workforce, it has become an issue of increasing concern to retain employees, especially the best talents (Mello, 2002, pg. 12). Human resource departments are faced with the herculean tasks of trying to come up with the best methods to motivate and encourage the workers, and also build their loyalty to the organization. Administrative HR departments often have a hard time to identify the different training needs of the employees and how to effectively manage them (Mello, 2002, pg. 12). A strategic HRM, on the other hand, would identify all the needs of the employees and come up with the best methods of motivating and encourage them. Such motivation methods may include promotions based on performance, training and development to build their skills and attractive compensation packages among many others. All these motivational methods would enable the organization retain its best talents and also attract new talents in the market. Also, it would inculcate loyalty among the employees hence enabling the organization to retain them.
Conclusion
In a world where competitive advantage is the main driver of business, it is highly important to effectively manage the human resources to ensure that they perform to their fullest potential. Human resources are the most important assets that any given organization possesses and organizations rely on them heavily for their huge returns. An organization can only effectively achieve its strategic goals if it aligns them with the different functions of the HRM. Accordingly, it is important for companies to shift from the primary administrative and operational HRM towards a more strategic partner. This way they are going to have a competitive edge over their competitors and also enjoy huge profit margins. Great companies such as Apple have employed this strategy and are doing tremendously well in their respective markets.
References
Dessler, G. (2000). Human resource management. Upper Saddle River, NJ: Prentice Hall.
Dias, L. P. (2012). Human resource management.Flatworld Knowledge.
Lawler, E. E., Boudreau, J. W., Mohrman, S. A., Mark, A. Y., Neilson, B., Osganian, N., & University of Southern California. (2006). Achieving strategic excellence: An assessment of human resource organizations. Stanford, Calif: Stanford Business Books, an imprint of Stanford University Press.
Mello, J. A. (2002). Strategic human resource management. Australia: South-Western College Pub.
Ulrich, D. (1997). Human resource champions: The next agenda for adding value and delivering results. Boston: Harvard Business School Press.
