Critical Evaluation And Comparison Of SHRM Models: Theoretical Basis Essay.

Explain the relationship between business strategy and the human resource strategy with further explanation of vertical alignment and horizontal integration across the organisation.

Critically evaluate, compare and contrast, the theoretical basis and models of SHRM. You should explain, critically analyse and inform your client of the strategic perspectives of Best fit/Contingency, Best Practice/Universalist and Resource Based View, (RBV). Your work will then critically evaluate the specific HR practices of Performance Management and Reward. You will make recommendations to propose how your client could design/re-design a performance management system, to support organisational development and change. This task will be supported by, and make reference to, authoritative and reliable academic sources.
Explain and critically discuss the nature and theoretical perspectives of Employment Relations. You will Identify and critically evaluate the roles of the actors within the Employment Relationship with analysis of the changing nature of employment relations. You will make recommendations of how mechanisms of employee participation and employee voice can contribute to improved employment relations within an organisational context. This task will be supported by, and make reference to, authoritative and reliable sources.

Business strategy and HR strategy

This task focuses on the company called Tesco and the concept of alignment of business and the HR strategy of the company. Various aspects of the business and the HR strategy are being discussed in the task. This task provides the information about the models that are related to the strategic human resources. This task also deals with the rewards and recognition practices in the company and their importance for the same.

Business strategy can be defined as the strategy that helps the organization to achieve its final and ultimate goals. It also helps in developing the competitive advantage of the company. It provides the direction that the company needs to follow in order to achieve the set targets. There are different levels at which the business strategies are formed that is the functional, corporate and the operational level (Schuler and Jackson, 200. It is very important to dissociate these business strategies so that these can be linked with the different departments. The ideal business strategies of the company should be such that it provides the idea of the overall business intentions as well as the intentions of the managers. The business strategies have different components such as scope of the business, business competencies and the governance. There are several environmental factors as well that affect the business strategies of the company. This is because; it is not only the objective of the company but the situation of the industry mad the strategies of the competitors also affect the strategies of the company (Kumar, 2007). It is very important for the organization to choose the appropriate strategy in order to support all the functions of the company. It is necessary to match the human resource strategies with the business strategies of the company (Daley, 2012). Development and the implementation of the human resource strategy should be linked with the business strategy and its planning. The strategies that are made for managing the human resources act as the source of attaining competitive advantage for the company. On the other hand, the business strategies of the company are also formed to attain the competitive advantage thus linking both of these is mandatory for the company. It is very important that the human resource of the company should have the potential to make the organizational performance efficient (Lengnick-Hall, Lengnick-Hall, Andrade and Drake, 2009).

It has been analysed that the goals and the objectives of the company drives the strategies of the company. Vertical alignment of these strategies can be determined as the relation of the strategies to the mission and the vision of the company. The vertical alignment of the strategies of the company is done in order to align them with the objectives directly as the strategies provide the path by which the goals of the company can be obtained. On the other hand, horizontal alignment can be defined as the alignment of the strategies in the non-competitive manner (Storey, 2007). That is, the strategies of the company should not be contrasting with each other for different departments. As far as the company called Tesco is considered, it has been analysed that the company has the mission that it wants to be the high value brand for the customers by being sustainable. After analysing the business strategies of the company, it has been identified that the strategies are very much linked with the mission and the vision of the company. Sustainability is the strategy that the company used to attain its goals.  In case of horizontal alignment, it has been analysed that the business strategy of the company is sustainability and the HR strategy of the company is to hire the employees or the people who are innovative and committed to their work (Armstrong and Taylor, 2014). The company also has the strategy of rewards and recognition so that the employees can retain in the organisation. This suggests that the strategies of different departments of the company are aligned horizontally as well.

Vertical and horizontal integration across the organization

There are many factors that affect the strategies of the company. The internal factors are the factors that are reacted to the company and the external factors are related to the environment outside the company (Holbeche, 2009). The internal factors that affect the company’s strategies are the leadership style, the culture of the company, the efficiency of the human resources etc. The external factors that are also need to be considered at the time of making the strategies are:

There are different models of SHRM that are being used by different companies in order to support the employees at the company as well as the human resource activities at the company. The major 3 models are best fit model, best practice model and the resource based view model.

Best fit model: the best fit approach of strategic human resource management is the model that focuses on the integration of the HRM practices with the strategic management. The vertical integration is the basis of this approach. In this approach, the HR strategy of the company is linked very closely with the business strategy of the same. Best fit approach is used in the organization so that the activities that are majorly conducted in the organization should be fit with the culture of the organization (Chow and Liu, 2009). The vertical linkage or the integration of these activities result in consistency in the processes of the company and also make the process of attaining goals very easy.

Best practice approach: This approach of strategic human resource management claims that there are certain HR activities that are universally accepted and support all the companies to attain the competitive advantage. This model argues about the integration of the HR practices and the performance of the organization. It has been analysed that certain set of activities related to HR are used by the conies of all types irrespective of the environment and other business strategies of the company (Wang and Shyu, 2008). The practices that provide the company with the most efficient and the powerful workforce and to make the use of these resources at optimum are termed as best practices.

Resource based view: this is the approach that has been used by the organization in ore to attain the competitive advantage by the resources of the organizations itself. The companies that support this approach try to find out the resource availability of the company and attain the competitive advantage from those available resources only (Nishii, Lepak and Schneider, 2008). The capabilities and the resources of the firm can be considered as the central part for developing the strategies of the firm. This approach if resource based view suggests that the company should have the understanding of the relationship between the capabilities of the firm, the resources and the competitive advantage of the company. Resource based view suggests that the human resource is the basic resource hat has been required by the company in order to support its activities. The major aim of this view is to develop the firm that is intelligent and efficient in its functioning.

Internal and external factors that affect the strategies

Rewards can be defined as something that has been given to the person in return of their doing. In terms of organizations, the rewards are given to the employees if they are working efficiently in their department (Aguinis, 2013). This is to motivate the employees to work more efficiently. The rewards can be given in non-monetary or monetary terms. Monetary rewards are the rewards that can be given in the form of money while non-monetary rewards are the rewards that are given in the form of other non-monetary term such as gifts, flexibility, coupons etc. Direct rewards are those rewards that are given directly in the form of wages; salaries etc. While the indirect pay rewards are given in non-cash form.

Intrinsic versus extrinsic rewards: Intrinsic rewards are the rewards that are related to the internal environment of the job such as the pride and the recognition that the people get at the workplace. On the other hand, the extrinsic rewards can be the other benefits such as gifts, cars, bonuses, etc.

Financial versus non-financial rewards: as the name suggests that financial rewards are related to the cash and the non-financial rewards are related generally to the extra benefits that are non-monetary in nature such as recognition at the workplace, awards, gifts etc.

Performance based versus membership based rewards: In the organizations, the rewards are allocated to the employees on two bases (Kusic, Kephart, Hanson, Kandasamy and Jiang, 2009). The first one is the performance based rewards in which the employees who are performing good, get the rewards according to the level of their performance. On the other hand, the membership based rewards are basically depends not only on performance but some other factors such as time period in the organization, skills etc.

As far as Tesco is considered, it has been analysed that Tesco is the company that focuses on providing rewards to the employees in terms of motivating them for the more efficient performance (Tesco-careers.com., 2017). There are certain forms in which the rewards have been given to the employees.

Annual bonus: Annual bonus is the form of rewards in which the financial rewards has been given to the employees after completing one year of their employment in the company. This is given every year. This is a performance based rewards.

Share incentives: the executive and the managers of the company reviewed the incentives in terms of company’s shares. These shares are deferred for the period of two or three years.

SHRM models

Colleagues as shareholders: This is the benefits that the entire employee if the Tesco have that they can be the part of the company by taking shares of the company and becoming the shareholders of the same. It has been identified that around 240,000 employees of the company have around 129millions share of the company under share incentive plan (Moynihan, 2008).

Performance management can be defined as the process in which the mangers and the employees mutually discuss and monitor the performance of the employees at individual as well as team level (Lewis and Thomas, 1990). This is to evaluate the level of performance of the employees and to find out the gap between the actual and the expected performance.

Tesco is the company that uses two methods of performance management:

• Balance scorecard method
• 360 degree method

Balance scorecard method is used by the company in order to management the performance of the company as well as the employees in the company. That scorecard helps the managers to measure the actual performance to the objectives that has been set for the employees at individual or team level in the different departments of the organizations (Tesco-careers.com., 2017).

360 degree method: This is the method that has also been used by the company in order to manage the performance. In this method all the employees have been assessed on all the factors possible such as their behaviour with others, discipline, performance, honestly, relations with other etc (Munusamy and Wong, 2008). The mangers as well as the peer employees are also involved in providing the ratings or the marks to the employees so that the judgement can be taken from all the aspects covered.

Recommendations: As discussed that the company is using two of the performance management methods to manage the performance of the employees. Some recommendations have been made that can be involved in the methods to improve the same. The first recommendation is that the employees of the organization in the 360 degree method should be monitored on the performance basis more and the personal basis less (Van Dooren, Bouckaert and Halligan, 2015). This is because performance is the major thing that needs to be considered at the time of appraisal of the employees. The weightage of performance should be more in the management methods used.

Rewards and performance management

As Tesco has to being change in its performance management methods so this approach of Kurt Lewis can be used:

• Unfreeze: This is the step where the employees and the mangers think about removing the things that are not more productive for the firm. Thus, in this step the unfreezing of the already existing processes are done.
• Change: This is the step where the actual change is made after identifying the area where the change has to be done.
• Re-freezing: It is the last step where the employees or the organization adopts the change and accept the change in their own way.

Employment relation is the main focuses of this task. Developing employment relation is very important for the company. This task discusses various aspect of the employment relation in Tesco and also about the factors that affect the intensity of the relation between the employees and the employers.

Employment relation can be defined as the relation between the employees and the employer with the legal links involved in the relationship. This relationship is developed along with the legal considerations (Noe, Hollenbeck, Gerhart and Wright, 2003). This relation is developed in order to support the employees as well as the employer. It is considered as the vehicle that helps in providing the access to the rights that are being made by the government for the employees as well as the employers. The existence of the relationship between the employer and the employees results in implementation of the labour laws and the security laws in the organizational processes. Different organizations have different nature of employment relations (Huselid, 1995). This is because it is not only the legal factors that affect the relation but the organizational culture and the trust between the employees and the employers also affect the intensity of relationship the company has with its employees. Some of the factors are trust, fulfilment of needs, personality and emotions.

As far as the company called Tesco is considered, it has been analysed that legal consideration is one of the basis on which the employment relations of the company is based. This is because the company believes in being fair to all the employees. Trust and fairness is the basis of employment relations at Tesco. The company has the unions that represent the whole employee group in front of the management and the union leaders or the representative negotiate with the management and keep the demands of all the workers in front of them (Wright, Gardner, Moynihan and Allen, 2005).

There is different theoretical perspective that has been involved in understanding the concept of employee relations. The major perspectives are unitary and pluralist. Tesco is the form that uses the perspective of unitary in their organization. This is the perspective that deals with integrating the employers and the employee’s thinking regarding the issues. This perspective focuses on the framework that integrates the employee commitment and the shared interest of the organization or the workplace (Lawler III, 1986). Unitary theory believes that the interests of employer and the employees should be merged with each other so that the results would be combination of the employer’s as well as the employee’s choice. It also helps in enhancing the loyalty of the employees in the organization. This theory also provides the concept of the role of mangers in the employee relations. It suggests that involving with the employees, the mangers can develop the win-win situation. This is because if the policies or the decisions are made with the shared interest of employees and the employer then it benefits the employees also as well as the employers also at some extent.

There are different actions that may affect the relationship between the employees and the employers. The first action is the diversity management. If the workforce is diverse in nature, it becomes difficult for the employers to deal with every employee as they have different background and perspective, thus, using the unitary theory proves to be wrong. Economy is the aspect that also plays a great part in this (Liao, Chang, Cheng and Kuo, 2004). Economic situation of the country should be stable in order to support the employee relations. If any of the organization is well versed with the technology, then the organizations can easily have the access to the issues and the wishes or wants of the employees by using some of the technological methods such as company portals etc. Some other factors that can also affect the employment relation are environment, social and legal factors.

Downsizing: There are situation when the company needs to downsize the organization by eliminating some of the jobs and firing some of the employees from the organization. This results in negative impact on the employees of the company and also at the relation between the employees and the employer.

Outsourcing: Outsourcing is the practice in which one of the process of the organization is being practices by the third party and this also affect the relation of the employees and the employer first of all the employees may feel the danger of losing their jobs due to outsourcing practice and the employees of third party cannot be so trusted by the employer.

Change of leadership: it is another important event that affects the employer employee relation. Different leaders have different emotional quotient and thus have different type of relation and bond with the employees (Boulding, Staelin, Ehret and Johnston, 2005). Change in leaders requires the employees and the employer to adapt the new leader in his way.

Employee participation: It is the concept that involves the participation of the employees in the process such as decision making, social activities and other activities. Tesco is the company that has unions of the workers that helps in representing the whole group of the employees. This helps in sharing the views and the involvement of the employs in decision making process. These results in building trust among the employees regarding the employer and ultimately enhance the employment relationship.

Employee voice: Employee voice can be defined as the practice in the organization where every members of the organization have the chance or the right to speak and write about what they want and do not want in the organization or the workplace (Delaney and Huselid,  1996). There are several mediums that can be used as the channels for employee voice such as suggestion box, employee portal etc. Tesco is the firm that uses employee portal as the channel of employee voice., these channels is used by the employees and even by the workers to provide suggestion or make any complaints about any of the activity at the workplace. This also enhances the employee relationship as the employees feel important as they are being listened by the company management.

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