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Defining Strategic HR Management

Question:

What are the key strenghts and limitations of the 2 HR systems in the context of the workplace.How do the 2 HR management systems relate to the accomplishment of strategic goals? What assumptions are you basing these views on? Compare how the 2 HR management systems effectively contribute to the management of human capital to achieve the strategic of the organisation .

Introduction

A strategic HR management is a procedure that makes such strategies of human resource that are incorporated with the association's business objectives and help the general methodology of the association. As per Walker (1992), it is characterized as the method for adjusting the administration of human resources with the strategic substance of the business. The reconciliation can either be vertical or it may be horizontal. Vertical integration gives consistency between HR system and the business with the previous supporting of the achievement of the latter one. The horizontal integration attempts to verify that the different human resource methodology components fit together and mutually help one another (Armstrong, M., 1999). Despite the fact that key human resource administration framework is a developing framework today, there are a few issues relating to its practice (Joanna, 1996).

Basically, the strategic human resource administration is about the key part of human resource administration in gathering the targets of the organisation. Human Resources is very firmly connected with the execution and viability of a business. In any case, the way through which the human resource practices impact authoritative viability were constantly addressed upon by some critics (Marler, 2012). A considerable measure of explores have been directed upon the clarification of the significance of human resource administration in the execution of a business. The studies have for the most part embraced an asset based perspective of the firm (Delery, 1998) which stresses that the company's competitive advantage is expanded by the sort of assets it has. Also, this underscores that the HR management doubtlessly increases the value of an association since the HR management practices are the primary variables that a firm utilizes to deliver or hold the fundamental work force. The prevalent center of examination on key HR management is basically on the vertical as well as horizontal fits (Joanna, 1996).

In strategic HR management, horizontal fit accentuates the interior consistency of the HR rehearses with the fundamental suspicion that for any specific arrangement, to have greatest impact, it is essential that alternate policies which are in effect are properly functioning (Strohmeier, 2007). The complexity in this hypothesis is the non-presence of the description about which the internally reliable practices make up a framework. There is no robust hypothetical structure for picking the HR rehearses. It was contended that there are a few blends of practices that will bring about the same hierarchical results (Delery & Doty, 1996). For instance, a firm needs to distinguish the practices of human resources that would create work force with superior in the event that they are to have advantage over their rivals. However, any HR practice prompts various results and numerous HR practices can be utilized to attain to the same result. This is a basic issue in the strategic HR management. Actually, the recent models related to competency have furnished analysts with a system that helps formation of a horizontal fit. In these models, a set of behavioral abilities are characterized that are important to the business focused around which HR practices can be utilized to guarantee improvement of those practices in people. Actually, an answer is yet to be arrived at, in the issue of horizontal or inner fit. How it is produced and measured is a parkway that offers sufficient open doors for future specialists to address (Gibb, 2001).

Vertical and Horizontal Integration in HR

An imperative discourse in strategic human resource management is a synergistic relation between the distinctive human resource practices. Essentially, there are two types of this synergistic relationship. First one portrays how various practices can cooperate and advance one another's viability and that upgrades the association's adequacy bringing about a positive result. This is called a capable association by Becker et al. The other combination which is termed as deadly connection is the point at which the practices conflict with one another and the result is negative. Hence, it is essential in strategic HR management to distinguish and measure HRM practices and frameworks while recognizing these connections among the practices (Becker & Gerhart, 1996).

The next critical issue in strategic human resource management is the level of examination. It is focused around what level the human resource rehearses in an organisation are measured. As indicated by a structure proposed, it is critical that the work force center for vital objectives be represented by a performance based work framework (Lepak, Liao, Chung & Harden, 2006). While this practice will pick up the association’s higher scores on their center work drive, the issue with this methodology is that the non-center work force might likewise have measured up to vitality or more noteworthy weight (Keating & Thompson, 2004). Hence, while measuring the practices of human resources, closer consideration must be paid to the level at which they are measured. Averaging the utilization of practices may indicate that all the workers be it center or non-center gatherings are similarly vital. Associations must utilize distinctive HR practices for diverse worker levels and gatherings. This recommends that for a specific occupation a specific HRM framework is needed. Focussing on HR practices at diverse employment levels in an association would hence give an understanding into how advantage over rivalry can be attained to utilizing work power (Wei, 2006).

As per earlier discussion, there is no understanding about what practices constitute an intelligible HRM framework. It is likewise important to focus on the HR policies alongside the practices as well as the problem related to construct definition. Advancement of hypothesis would tackle this issue. Strategic human resource administration has dependably been scrutinized for absence of hypothetical establishment (Neal, West & Patterson, 2005). The researches have demonstrated that there are three diverse hypothetical structures in Strategic HRM, which are, Universal, Contingency as well as Configuration hypotheses (Delery & Doty, 1996). The Universalistic hypothesis shows that some HR practices are powerful universally. Selection of these practices by an association will bring about expanded profits. As per the Contingency hypothesis, the viability of HR practices is unforeseen with the strategy of an organisation. Associations must receive the strategies of human resources that are proper for its technique to have higher viability. Furthermore, the configuration hypothesis manages the synergistic connections between the practices (The Writepass Journal, 2012).

Other researches utilizes six hypothetical models for talking about strategic HR management; viz Behavioral perspective, computerized or cybernetic models, transaction or agency cost hypothesis, institutional hypothesis, resource based perspective of the association, and power or resource reliance models. These speculations are helpful for the understanding of strategic and along with non-strategic determinants of HR rehearses (Wright & Mcmahan, 1992). The behavioral point of view is concerned with how strategy, HR behaviours and practices are related to each other. Cyberne tic models as well as transaction cost models is concerned with the relationship among the HR practices, a firm strategy and the HR capital pool and practices (Heffernan & Flood, 2000). The institutional hypothesis as well as resource dependence hypothesis concerns the impacts of institutional and political variables on the HR practices.

Challenges in Strategic HR Management

These hypothetical systems are not without their limits. Yet as indicated by the critical analysis of the strategic HR management, the majority of the issues concerning the SHRM can be understood by creating a solid hypothetical premise of administration. Qualitative as well as quantitative examination of two organizations in the same business and diverse execution levels could be developed to help in the development of particular and general practices (Bized, 2015). It additionally helps in summing up the procedure inside a firm that drafts the standards and the methodology of effectively interpreting these standards in HR strategies that are productive. This line of examination in strategic HR management could help enhance the way associations are examined and managed (Colbert, 2004).

Utilizing information from forty five specialties units and related HR practices from past, present as well as future operations related practices, it was observed that connections with all operational measures were high and invariant. Further, it was discovered that controlling over a significant time span execution practically wiped out the association of HR practices with that without bounds. This gave strategic HR management analysts’ preventative proof on making easy-going surmisings on the relationship between HR rehearses and the execution of the association (Wright, Snell, & Dyer, 2005).

A company’s performance relies on how the HR frameworks are measured. Execution in association differs focused around that, it is so close to the planned impact of HR practices and what level it is accumulated. Examination of strategic HR management in developing nations show that it is more probable that private organizations will embrace this procedure than general society associations. More center is being paid on the execution issues of strategic HR management lately (Boxall & Purcell, 2003). The business firms are perceiving that the proposed and acknowledged practices are not the same as each other and depending upon a set of expressed standards will bring about insufficient results. Likewise, more consideration is being focussed on strategic HR management’s part in mergers and acquisitions. Understanding the human capital investment choice making procedure, understanding the contrast between interests in center and non-center work power, and a superior understanding of the differing qualities of work faculty and their consequences for association's execution are helping in understanding the strategic HR management. The test is to fill the hole between learning that has been recognized and break new ground (Hall, Andrade & Drake, 2009).

The human resource management system includes various practices related to the human resources. Human resource management systems are basically the work and procedures which are performed by the human resource managers of the organization. Human resource managers in organizations basically manages the human resource of the company, these human resource practices includes the recruitment and selection, performance management, outsourcing, HR planning, motivation of the staff, ethics, work design, OHS etc. (Devanna, Fombrun & Tichy, 1981). These systems help in increasing the strength of the organization by creating an enthusiasm between the employees towards the work. This not only creates enthusiasm but also trains the employees of the organization and utilizes the right talent at right place.

Internal Consistency of HR Practices

The two human resource management systems are as follows

Recruitment and selection

Recruitment and selection of the human resource is a very important activity of the human resource management of an organization (Brewster & Suutari, 2005). It’s really important to recruit a right employee for the right purpose in the organization because these only work for an organization and help in accomplishing the goals for organization. Thus, the basic purpose of the recruitment is to select the right person for the right job for the organization. The recruitment process includes various steps (Ichipwski, 1996). The main step is identifying or analysing the requirement of the recruitment. This step first includes identifying the need of human resources, for this, the human resource managers, first need to identify the workload and the requirement of the projects. The second step is to identify the purpose and objectives of the recruitment. The purpose of the recruitment should also be very clear as this will help in setting the quality and the educational requirements of the desired candidates.

Then the third step is to set the quality, experience, efficiency and educational background required for the recruitment process. Then the various types of tests and interviews are decided for examining the right candidate for those posts. This step should be performed very carefully as it will help in identifying the right candidate. Then the real process for recruitment starts (Armstrong, 2006). This step includes the physical process of selecting the right candidate.

For understanding the effect of this process, let’s take an example of the recruitment process of the Google organization. Google’s human resource managers follow these steps, starting from the identification of the requirement of the recruitment, for identifying the requirements at the right time human resource managers of organization keep track of the processes of organization on timely basis. This includes the interview of the team and employees as well as the current processes and projects running in the organization (McGraw, 2002). The organization then identifies the purpose for the recruitment like what posts are required by the organization. Suppose currently, the company requires an accountant and software developer. Then in the next step the organization sets the criteria for these posts like educational background requirement, experience required for these posts etc. and according to these posts human resource managers set the examination process for the recruitment e. g. for a software developer post, the examination process of the company includes the phone interview, aptitude test, professional test, technical interview and finally an HR interview (Lepak, Liao, Chung & Harden, 2006).

These strategies are very much successful for recruiting the right candidate for the organization as the processes described help in testing all the skills required for the posts like aptitude test help in checking the IQ of a candidate, professional test check the professional knowledge of the candidate and interviews help in checking various other requirements (Beckar & Gernart, 1996).

Thus, the recruitment process of an organization is very important for selecting a right candidate for the organization.

Synergistic Relationships between HR Practices

The strategic goal of the recruitment and selections process is to finding the best candidate for the organization which suits the requirements of the organization and also according to the culture of the organization. Thus, the recruitment process helps in accomplishing the goals of selecting the right candidate for the organization according to the need and requirement of the organization (Collings & Mellahi, 2009). An organization needs to work for growing in this competitive market and for accomplishing task and works of an organization needs the effective human resource and employees which can work efficiently and effectively within the organization and can fulfil the requirements of the task. Thus, the recruitment process helps in accomplishing the strategic goals (Huselid, 1995).

Outsourcing

Outsourcing is also a very important function of human resource managers. Outsourcing can be understood by the following way. Outsourcing is basically a process in which a company hires another company for providing some services to save the various costs related to manufacturing of those goods or services (Schuler & MacMillan, 1984). This can be understood by the following the example. Company needs to pay a high salary to a CFO but many companies use the strategies that they hire CFO who will visit the organization few times in each month and perform the financial analysis of the company. By this way, organization may save a lot of money each month (Birdi et al, 2008).

The outsourcing in any organization can be done in various terms. The outsourcing can be done in terms of employee, services as well as goods. Example of the outsourcing of employee is shown previously by referencing the CFO (Ichniowski, Kochan, Levine, Olson & Strauss, 1996). The example for the outsourcing of the services includes the software services, repairing of any items etc. are the examples of outsourcing of the services.

Dell is a very good example of outsourcing. Dell purchases various parts of the computers and laptops from the other manufacturing companies and then builds their full product. This is the best example of outsourcing of the goods by Dell Organization. For an effective and efficient outsourcing, first the company needs to identify the requirement of the outsourcing. Outsourcing is a very important decision by an organisation. Before taking this decision the company needs to analyse various points (Ahmad & Schroeder, 2003). The main point that should be considered is related to the basic purpose of outsourcing that is the cost and time saving. Thus, a company first needs to calculate the overall cost of the service, either if the company produces these services or if company outsources these services. The time is also important as the service will be performed by the company itself. By combining these two factors, the calculation should be performed.

The goal behind the outsourcing is to save the cost and the time for the service that is going to be outsourced. Let us understand this by an example. Suppose a company manufactures computers and laptop, another company manufactures hard disk. The computer manufacturing company may outsource the hard disk from the another company, the cost of manufacturing of the hard disk for the hard disk manufacturing company will of course be less than if the computer manufacturing company itself prepares the hard disk for the computer, as the company needs to set the full setup for developing the hard disk. It will need the extra space also (Huseldid, 1995).

The Importance of Workforce Differentiation

Both the services contribute a lot in the human capital. Recruitment process helps a company to recruit talented, experienced and required man force for the company. Recruitment process helps in strengthening the human capital of an organization. It also helps to create a base for the human resource of an organization which contributes in the human capital of the organization (Lengnich-hall, Lengnick-hall, Andrade & Drake, 2009).

Outsourcing also helps in human capital of the organization. Outsourcing helps the organization in saving the salary for the employees, cost for managing the employees etc. The fund saved from the sourcing can be spent in training of the existing human capital of the company. This will make human resource of the company strong, effective and efficient (Wright, Snell & Dyer, 2005).

Thus, both the systems help in making human capital of the organization strong and effective which can work for the company efficiently.

Conclusion                                                    

A good human resource management frameworks can make situations with little uncertainty in regards to key objectives of the association. Qualities, for example, perceivability of the HR forms, clarity of the data in the approaches, worthiness of the practices, and consistency of the administration in applying the arrangements to representatives consistently, adequacy of the strategies, inner consistency (horizontal fit) and power are the fundamentals representing the quality of an HR administration. Associations that endeavor to duplicate HR approaches and rehearses from effective associations discover those practices from alternate firms did not provide for them the same invaluable results (Wright & Boswell, 2002). Representative recognition about the HR practices assumes a significant part between HR practices as well as strategic objectives. In this way it is important to oversee the strategies of HR management that don't bring about different impression of the representatives (Devanna, Fombrun & Tichy, 1981). The correct portrayal of HR management can accordingly help with a superior understanding of the field of strategic HR advancement and help detail the policies of HR management that can affect absolutely on the execution of an association.

References

Marler, J. (2012). Strategic Human Resource Management in Context: A Historical and Global Perspective.Academy of Management Perspectives, 26(2), pp.6-11.

Joanna C. (1996). HUMAN RESOURCE MANAGEMENT: A CRITICAL ANALYSIS. Centre for Labour and Trade Union Studies. University of Waikato. pp 187-190.

Keating, M., & Thompson, K. (2004). International human resource management: overcoming disciplinary sectarianism. Employee Relations, 26(6), 595-612.

Wei, L. (2006). Strategic Human Resource Management: Determinants of Fit,Research and Practice in Human Resource Management, 14(2), pp. 49-60.

The WritePass Journal, (2012). Critical Analysis of the Strategic human resource management in India.

Heffernan, M. M., & Flood, P. C. (2000). An exploration of the relationships between the adoption of managerial competencies, organisational characteristics, human resource sophistication and performance in Irish organisations. Journal of European Industrial Training, 24(2/3/4), 128-136.

Colbert, B. (2004). The Complex Resource-Based View: Implications for Theory and Practice in Strategic Human Resource Management.The Academy of Management Review, 29(3), p.341.

Bized, (2015). Biz/ed - Critical Review of Human Resource Management - Activity | Biz/ed.

Strohmeier, S. (2007). Research in e-HRM: Review and implications. Human Resource Management Review, 17(1), 19-37.

Wright, P. (1992). Theoretical Perspectives for Strategic Human Resource Management.Journal of Management, 18(2), pp.295-320.

Boxall, P. and Purcell, J. (2003).Strategy and human resource management. Houndmills, Basingstoke, Hampshire: Palgrave Macmillan.

Kepes, S., & Delery, J. E. (2007). HRM systems and the problem of internal fit. Oxford Handbook of Human Resource Management, The, 385.

Armstrong, M. (1999).A handbook of human resource management practice. London: Kogan Page.

Delery, J. (1998). Issues of fit in strategic human resource management: Implications for research.Human Resource Management Review, 8(3), pp.289-309.

Gibb, S. (2001). The state of human resource management: evidence from employees’ views of HRM systems and staff. Employee Relations, 23(4), 318-336.

Delery, J. and Doty, D. (1996). Modes of Theorizing In Strategic Human Resource Management: Tests of Universalistic, Contingency, and Configurational Performance Predictions.Academy of Management Journal, 39(4), pp.802-835.

Devanna, M., Fombrun, C. and Tichy, N. (1981). Human resources management: A strategic perspective.Organizational Dynamics, 9(3), pp.51-67.

Lengnick-hall, C. and Lengnick-hall, M. (1988). Strategic Human Resources Management: A Review of the Literature and a Proposed Typology.Academy of Management Review, 13(3), pp.454-470.

Becker, B. and Gerhart, B. (1996). The Impact of Human Resource Management on Organizational Performance: Progress and Prospects. Academy of Management Journal 39, pp. 779-801.

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