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A Report On Strategic Role Of Human Resource In An Organization Add in library

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Question:

Prepare a Business Report that addresses the human resource issues raised in the case study as provided on the Moodle course site.

 

Answer:

Introduction:

This report is an analysis of a given case study that is based on the strategic role of human resource within the organizational environment. The case study highlights upon the key issues related to the strategic human resource management depicted throughout the case scenario. It lays importance upon the need to develop a strategic as well as coordinated approach within any organizational environment for developing the most essential assets of any organization, its workforce (Bowen and Ostroff, 2004). The report provides important information about the various aspects of strategic human resource management and the roles that it has in the present business environment. Within the context of any organization the development of effective strategies is possible once organizational approaches for managing human resource are effectively understood by the firm. Various approaches which serve creation of particular strategies like developing capability of resources, higher performance, effective practices, higher commitment of management, etc. Human resource is considered to be one of the competitive advantages of any firm.

Human resource management forms an integral part of the organization which deals with the welfare of both the organization and its employees (Chadwick, 2005). It basically coordinates the functions of al employees. In the context to human resource management, the changing situation of the competitive environment has led to the development of the concept of strategic human resource management. In the latest competitive environment, roles and responsibilities of the strategic human resource management have been increasing at a much wider pace (Bowen and Ostroff, 2004).

 

Legal issues involved in Redundancy policy:

The concept of redundancy as a human resource approach refers to a situation whereby the position of an employee is or will be becoming surplus towards the requirements of a business. As mentioned in the case study, the company Wordsmiths had acquired the book retailer Mainly Books, and this has raised the number of workforce and in turn exceeded the overall requirement of business (Campos e Cunha and Cunha, n.d.). There are excessive workforces and not all of them are equally productive to the organization. So, the CEO of Wordsmiths had a consultation with Gemma who is the human resource manager at the organization. It was decided upon to implement the redundancy policy. Commonly, redundancies are implemented for commercial reasons, and not due to any other causes like performance or capability issues. Any provisions of redundancy would be clearly stated in the Individual Employment Agreement or Collective Agreement on how a business would deal with the circumstance (Chadwick, 2005). As referred to in the case study, the organization and its employers need to act in good faith that extends towards employers consulting with employees regarding the changes to organization such as how this would impact upon the workforce, informing the employees clearly about the selection criteria for redundancy, providing the employees with a reasonable notice period if chosen, and also advising them regarding any resource or assistance to be offered to redundant employees. Another important aspect the employer must take an account of is the impacts the redundancies upon the existing workforce. Since the process of downsizing might sometimes have adverse impact upon staff morale and productivity, it is important that the organization or its employers adopt a fair means to incorporate the process within the organization. If workforce within the mentioned organization bears a perceived idea that the employer does not treat the employees fairly in the process of redundancy, they would rather prefer moving on themselves since they would grow a belief that the organization would treat them the similar way during their turn. This would prove to be harmful for the organization in the long run.

With reference to the given case study about Gemma, the Chief Executive Officer of Wordsmiths, Allan had suggested target individuals who are closer to retirement age while adopting the process of redundancy. This approach of Allan is quite justified and feasible since these are the individuals who have completed several successful years of employment and now at the verge of retirement. These individuals would not regret if few more years of their employment are cut off (Chen, 2009). Rather they would prefer taking a break after such a successful career. On the other hand, the younger generation of employees who are in the middle way of their career or have just started their career would prefer continuing with their services. And so, if the organization chose to redundant employees of the younger generation, then it would have created lot of buzz and resentment among the employees (Warner, 2013). So, the decision taken up by Allan was justified and feasible in terms of organizational approach.

 

Human Resource Information System:

As depicted in the case scenario, strategic human resource involves the implementation of human resource information management system. Basically this refers to the intersection of organizational human resources and that of information technology by means of human resource software (Warner, 2013). This concept permits all activities as well as processes of human resource to take place electronically. The CEO of the company Wordsmiths, Allan, had asked Gemma to configure the human resource information system for providing useful data regarding the workforce of the organization. In order to incorporate as desired, Gemma must lay effort in developing an effective system of information to maintain all confidential data nad information about the organizational workforce. The system must be developed and controlled in such a manner that the higher level authorities may extract and use the given set of information during the time of need. This human resource information system (HRIS) developed by Gemma would offer payroll, recruiting, benefits, training, and compliance solutions. Most of these would be flexibly designed as well as integrated databases, comprehensive attributes, effective reporting functions as well as analysis abilities which would be needed to manage the entire workforce.  This system would provide Gemma with effective assistance. For an instance, an effective human resource information system would allow the organization to manage its employees by means of effective elements like HR and Payroll. Besides these essential software solutions, this human resource information system must offer various other options for helping the organizations to understand as well as utilize the collective skills, experiences, and talents of the employees (Warner, 2013). When Gemma would be implementing this system in the organization, it would enhance the process of communication and also prevent tedious paperwork by replacing it with easily-accessible and centralized location for all policies of the organization, announcements, etc. Employee activities like time-off requests and W-4 form changes may be automated, thereby leading to fast approvals as well as less paperwork.

Human Resource Planning:

As referred to the given case study, it is evident that the organization Wordsmiths had immense of market reputation and recognition. The firm conducts its business in an effective manner and possess adequate market share in the country of Australia. Now, with the acquisition of another firm Mainly Books, the organization has rather increased its size and dimension, and with this it has taken up additional roles and responsibilities upon it (Chen, 2009). So, some changes are now required to be introduced in the process of human resource planning. The concept of strategic human resource planning links the management of human resource directly with the strategic planning the firm. Therefore, the company must incorporate the qualitative form of human resource planning (Collings and Mellahi, 2009). This type of planning process would ensure sufficient human resources for meeting the strategic goals as well as operational plans within the firm. It would enable it to assign the right kind of job to the right employee at the right time to bring about the desired positive outcome. The qualitative planning process would keep up the economic, social, technological, and legislative trends which effect upon the organizational human resources of Wordsmiths. This form of strategic human resource planning would enable the organization to predict the required needs of the HR management within the firm after thorough analysis of the present inventory of human resource, the availability of labor in the external market and also the environment where it would operate in (Wang, 2012).

Qualitative form of human resource planning would be effective for this organization as it means after successful determination of number of employees in each department within the firm, it is necessary to determine the various types of jobs that would state the minimum qualification required by the hired employees. Quantitative nature of human resource planning includes forecasting of demand as well as supply. It refers to the perfect number of individuals while qualitative approach shows the right quality of workforce required at the firm (de Waal and Roobol, 2014). Generally three methods exist with the process of demand forecasting. Statistical approaches are the reliable means for long range employee forecasting. It includes regression analysis as a significant forecasting technique for estimating the requirements of the workforce depending on sales, output, etc, while both dependent as well as independent variables are related to each other. Managerial judgment is another important aspect of demand forecasting (Townsend et al., 2011). When this organization uses the approach of qualitative method of human resource planning, it would enable managers to think and stay ahead by predicting successfully the actual requirements of the organization.

 

Advantages and Disadvantages of Outsourcing HR functions:

The human resource department of an organization is solely responsible to conduct different functions. The department is responsible to oversee employee payroll as well as tax filing including that of employee benefits as well as health of an organization. This department is responsible to manage legal compliance, oversee training and development, and maintain files as well as records (Thompson, 2011). Often, due to greater dimension of responsibilities of the human resource department, it has been becoming excessively complex and comprehensive. This results in the business to outsource its major functions of human resource management. The concept of outsourcing human resource activities has its own advantages and disadvantages.

Advantages of Outsourcing: Some of the advantages that the mentioned firm may enjoy by outsourcing human resource activities are -

1. Managing risk – With respect to the provided case scenario, outsourcing would enable the mentioned business to minimize all risks. By outsourcing, the firms would remain abreast on multiple federal as well as state employment laws. When outsourced, the staffs help businesses to comply with all changing laws for avoiding costly lawsuits (de Waal and Roobol, 2014). It would also enable the firm to maintain as well as audit various policies of the firm for ensuring the entire organization to stay updated.

2. Saving cost – Outsourcing supports in reducing the maintenance cost. A completely functional human resource department requires separate office space with trained experts and human resource staffs. So, most of the small business firms prefer outsourcing all activities to external entities to meet the required objectives (Innes and Wiesner, 2012). This reduces all sorts of expenses considerably.
 
3. Efficiency – Outsourcing HR activities would create increased efficiency in the overall system. Advanced technology used in the human resource management would support in streamline vital functions like payroll, compliance management, benefit administration, etc. Outsourcing therefore helps in preventing wastage of time in tedious paperwork.
 
4. Employee development – The concept of outsourcing enables businesses to manage performance as well as development of employees. This enables periodic monitoring of performance as well as finding report for management (Janssens and Steyaert, 2009). This lessens the burden of the managers by reducing needless responsibilities. The managers may increasingly focus on the development of the workforce.

Disadvantages of Outsourcing HR activities: Some of the disadvantages of the outsourcing that the mentioned firm may face are -

1. Poor performance – Organizations often outsource activities for limiting costs. However, reduced costs leads to decreased quality of performance by the firm that serves the outsourced firms (Sheehan and Cooper, 2011). Any sort of poor performances in the work or human resource related activities may reduce the overall reputation and image of the firm. This also impacts negatively on the company recognition.

2. Distance – This concept of outsourcing often leads to a sense of distance amidst that of the company and its employees. When HR department is inaccessible instantly, the workforce faces delays within communication, and makes employees feel frustrated. This reduces the morale of the workforce.
 
3. Recruitment problems – Often that outsourced-employees lack the proper understanding of the organizational culture and practices internally. Since human resource department hire employees, this lack of understanding shifts to new employees who fail to fit within the organizational culture. Most importantly, the organizational success depends greatly upon the performance of organizational workforce (Janssens and Steyaert, 2009).
 
 
4. Information leaks – Outsourcing human resources activities often results in communicating important and sensitive information of the company. The process of outsourcing often causes release of essential information to the other organization where outsourcing activities are bestowed upon. This increases the chances of information leaks.
 
5. Loss of control or Dependency – Once human resource activities or functions are outsourced to external means, the organizational management or higher authority often relies upon the external means for getting their tasks done (Kaufman, 2001). This leads to loss of effective control upon the important activities, and they become increasingly dependent upon the external sources.

As mentioned in the case scenario, Gemma is the chief human resource manager. She is at such a position where she is solely responsible for taking effective decisions at the given situation. In this situation, before hopping on to any final decision, it is important for her to understand the internal as well as external circumstances of the organization (Kramar, 2013). Since she has been assigned with one of the greatest responsibilities of the organization that is to seek for strategic human resource management within the firm, she is responsible for taking key decisions regarding the human resource management and functions at Wordsmiths. With the company Wordsmiths acquiring the book retail store Mainly Books, the overall dimension of activities and organizational functions have widened and the scopes of human resource department have increased greatly. With the acquisition of Mainly Books, the responsibilities of Wordsmiths have increased greatly, and so the human resource department would have to put greater effort to maintain all activities and functions of the company.

Gemma, who is the concerned human resource manager at Wordsmiths, needs to make important decisions like whether to take up all activities within the firm or to outsource human resource activities to external means. Although outsourcing has great number of advantages, it is not justified on behalf of Gemma to adopt such an approach (Lange, 2013). It is better for the mentioned organization to conduct all activities within the organization itself and not outsource those. This would ensure increased quality and effectiveness of the incorporated functions.

Conclusions:

As referred to in the case study, the organization and its employers need to act in good faith that extends towards employers consulting with employees regarding the changes to organization such as how this would impact upon the workforce, informing the employees clearly about the selection criteria for redundancy, providing the employees with a reasonable notice period if chosen, and also advising them regarding any resource or assistance to be offered to redundant employees  (Lee Cooke, 2011). Another important aspect the employer must take an account of is the impacts the redundancies upon the existing workforce.

Recommendations:

Since the process of downsizing might sometimes have adverse impact upon staff morale and productivity, it is important that the organization or its employers adopt a fair means to incorporate the process within the organization. Qualitative form of human resource planning would be effective for this organization as it means after successful determination of number of employees in each department within the firm, it is necessary to determine the various types of jobs that would state the minimum qualification required by the hired employees (Mahoney, 2000). Quantitative nature of human resource planning includes forecasting of demand as well as supply. It refers to the perfect number of individuals while qualitative approach shows the right quality of workforce required at the firm. Although outsourcing has great number of advantages, it is not justified on behalf of Gemma to adopt such an approach. It is better for the mentioned organization to conduct all activities within the organization itself and not outsource those. This would ensure increased quality and effectiveness of the incorporated functions.

 

References

Bowen, D. and Ostroff, C. (2004). Understanding HRM-Firm Performance Linkages: The Role of the "Strength" of the HRM System. The Academy of Management Review, 29(2), p.203.

Campos e Cunha, R. and Cunha, M. (n.d.). Impact of Strategy, HRM Strength and HRM Bundles on Innovation Performance and Organizational Performance. SSRN Journal.

Chadwick, C. (2005). The vital role of strategy in strategic human resource management education.Human Resource Management Review, 15(3), pp.200-213.

Chen, C. (2009). Strategic human resource practices and innovation performance: the mediating role of knowledge management capacity. Strategic Direction, 25(6).

Collings, D. and Mellahi, K. (2009). Strategic talent management: A review and research agenda.Human Resource Management Review, 19(4), pp.304-313.

de Waal, A. and Roobol, M. (2014). Applying evidence-based HRM: the case of bonuses in the home furnishing industry. Evidence-based HRM, 2(2), pp.192-208.

Innes, P. and Wiesner, R. (2012). Beyond HRM intensity: Exploring intra-function HRM clusters in SMEs. Small Enterprise Research, 19(1), pp.32-51.

Janssens, M. and Steyaert, C. (2009). HRM and Performance: A Plea for Reflexivity in HRM Studies.Journal of Management Studies, 46(1), pp.143-155.

Kaufman, B. (2001). The theory and practice of strategic HRM and participative management. Human Resource Management Review, 11(4), pp.505-533.

Kramar, R. (2013). Beyond strategic human resource management: is sustainable human resource management the next approach?. The International Journal of Human Resource Management, 25(8), pp.1069-1089.

Lange, T. (2013). Evidence‐based HRM: a scholarship perspective with a difference. Evidence-based HRM, 1(1), pp.4-15.

Lee Cooke, F. (2011). Researching HRM in China: challenges and research directions. Journal of Chinese Human Resources Management, 2(1).

Mahoney, J. (2000). Strategic Human Resource Management. Academy of Management Review, 25(3), pp.677-679.

Sheehan, C. and Cooper, B. (2011). HRM outsourcing: the impact of organisational size and HRM strategic involvement. Personnel Review, 40(6), pp.742-760.

Thompson, P. (2011). The trouble with HRM. Human Resource Management Journal, 21(4), pp.355-367.

Townsend, K., Wilkinson, A., Allan, C. and Bamber, G. (2011). Mixed signals in HRM: the HRM role of hospital line managers1. Human Resource Management Journal, 22(3), pp.267-282.

Wang, G. (2012). Indigenous Chinese HRM research: phenomena, methods, and challenges. Journal of Chinese Human Resources Management, 3(2), pp.88-99.

Warner, M. (2013). Originality: challenges in Chinese HRM research. Journal of Chinese Human Resources Management, 4(2), pp.117-120.

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