Effective Human Resource Strategy For Formulation And Implementation Of Business Strategy

Significance of the Relationship Between Business and HR Strategies

Discuss about the Human Resource Strategy for Formulation , Implementation.

An effective business strategy facilitates in improving the business performance as it helps in achieving the business goals and objectives. Business strategy is composed of different tactics and methods which are used by the business which are executed in order to increase the sales and profits of the business. In addition to this, execution of the strategies has made best utilization of the available resources which in turn facilitates in achieving a competitive advantage over its rivals. Business strategies also facilitates in exploring different opportunities available in the market for expansion of the business operations.  Initiatives and processes of human resources are developed in a manner that helps in achieving the overall business strategy.  It is requisite for the company to align its human resource strategy with the business strategy as it facilitates in improving the overall business performance (Cania, 2014). Human resource strategy includes creation of the workforce plan in order to attract and retain existing and new employees in the organization in order to meet future needs. This report emphasizes on the relationship exists between human resource strategy and business strategy and impact of human resource strategy on organizational performance (Bamberger, Biron and Meshoulam, 2014).  

It is significant that there is a presence of close relationship between organizational human resource strategy with the business strategy. Human resources are an important resource of the organization that helps in achieving the goals of the business by directing their efforts towards the use of other available resources in an effective manner. Companies make effective human resource strategy such as providing flexible working hours, provision of financial incentives and provision of training which helps in increasing the commitment level of the employees which in turn results in increasing their productivity. Besides this, nowadays, employees also have an opportunity to have full participation in decision making process due to which they feel a sense of belongingness with the organization. This results in reducing the rate of employee absenteeism in the organization (Brewster, Mayrhofer and Morley, 2004).

In addition to this, such type of strategies also helps employees to make a proper balance between professional and personal life. Besides this, decline in employee turnover helps in reduction in the costs incurred by the company in recruiting and provide training to new employees. Effective and successful human resource strategy helps in achievement of financial goals of the business in an efficient manner. Along with this, human resource department of the organization emphasize on keeping the focus of employees of the organization on its financial goals. Besides this, nowadays, companies provide different opportunities to employees for growth and development that motivate employees to provide their full potential to meet the goals of the business. Employees also get an opportunity to discover their hidden capabilities by performing challenging tasks which in turn increase their productivity in the organization (Hoque, 2013).

Impact of Organizational HR Strategy on Organizational Performance

Besides this, handling of customer complaints in an effective manner by human resources results a in an increase in the number of customers which leads to an increase in the sales and profitability of the business.  Along with this, it is important for the human resource managers to provide information regarding the policies and programs developed in a manner that provide a feeling of partners among the employees. This helps in encouraging them to attain the business goals effectively in reasonable time (Rothwell and Kazanas, 2003).  

In addition to this, human resource managers inform business managers regarding the problems faced by employees and solutions are given by them in order to satisfy the needs of employees. This also increases the morale of the employees and enhance their productivity levels thereby increases the overall productivity of the organization in order to meet its common goals. In addition to this, changes in the social and culture environment force companies to adapt the changes by making relevant strategies so that the needs of the employees can be fulfilled and overall organizational strategy can be adopted. Nowadays companies make effective training programs that help in upgrading and developing required skill set of the employees so the business strategy can be achieved in an easy manner. This results in attainment of competitive advantage over its rivals (Storey, 2007). 

Increase in the competition in the market forces companies to increase its overall performance by adoption of effective human resource strategies. This is because human resources directs their efforts towards achievement of the organizational performance. Besides this, the performance and productivity of employees can easily be measured in terms, of number of customers’ satisfied, effective handling of the customers objections and employee turnover rate. Organizations with low employee turnover have increased organizational performance as it has experienced human resources which provide high level of customer satisfaction. In addition to this, the human resource strategies should aligned with each other which helps in meeting the organizational performance standards. Along with this, alignment of the human resource strategy with business strategy helps in increasing the overall productivity of the company and results in increasing the profitability of the company (Gilmore and Williams, 2012). In this manner, there is a positive impact of human resource strategies on the organizational performance.

Besides this, provision of the opportunity to employees to participate in different decision making processes helps in increase in the employee engagement in different practices of the organization facilitates in increasing their satisfaction level. This leads to an effective achievement of the organizational goals and objectives (Marchington and Wilkinson, 2005).

In addition to this, proper alignment of the human resource system with the business strategy helps in fulfilling the assigned tasks by the employees in an effective manner which also results in achieving the performance standards and give advantage in competitive rivalry. There is a significant impact of policies and practices of human resource management on the attitudes and behavior of the employees due to which there is a positive impact of human resource strategy on organizational performance (Bamberger, Biron and Meshoulam, 2014). Different human resource management practices which have a positive impact on the organizational performance include recruitment, development, compensation, human resource planning, employee relations and selection. Presence of strong harmonious relationship between the employees of the organization helps them to achieve the objectives of the organization effectively and efficiently as the efforts made by them are well coordinated (Price, 2011).

Establishment of the self managed teams and delegation of the authority to employees helps them to take instant decisions effectively which helps them to complete the task in a given time and has a positive impact on the organizational performance. Besides this, other human resource management practices that have a positive impact on the organizational performance are sharing of the financial and performance information in the organization which in turn helps in bringing transparency in the business operations and attract potential employees towards the organization (Holbeche, 2012).

This also helps in improving the overall performance of the employees that has a direct and positive impact on the overall organizational performance. Such practices helps in reducing the employee turnover of the company and enhances the productivity of the organization by reducing the cost of recruiting new employees and provide training to them to upgrade their skill set (Wilson, 2005).

Conclusion

It can be concluded that human resource strategies are integrated with business strategies in an effective manner in the organization. Human resources are the scarce and vital resource of the organization that helps in achieving the business goals in a successful manner. Besides this, effective human resource strategy helps in upgrading and developing the existing and new skills of the employees that facilitates in achieving high level of customer satisfaction. Human resource management also has a positive impact on the organizational performance but it is not difficult to determine its impact on organizational performance as it facilitates in overcoming the competition exists in the market. It can be easily measured in terms of employee turnover, productivity of workers and the time spent by the workers on the job.

References

Bamberger, P.A., Biron, M. and Meshoulam, I. 2014. Human Resource Strategy: Formulation, Implementation, and Impact. Routledge.

Brewster, C., Mayrhofer, W. and Morley, M. 2004. Human Resource Management in Europe: Evidence of Convergence. Routledge.

Cania, L. 2014. The Impact of Strategic Human Resource Management on Organizational Performance Economia, Seria Management, 17(2), pp. 373-383.

Gilmore, S. and Williams, S. 2012. Human Resource Management. OUP Oxford.

Holbeche, L. 2012. Aligning Human Resources and Business Strategy. Routledge.

Hoque, K. 2013. Human Resource Management in the Hotel Industry: Strategy, Innovation and Performance. Routledge.

Marchington, M. and  Wilkinson, A. 2005. Human Resource Management at Work: People Management and Development. CIPD Publishing.

Price, A. 2011. Human Resource Management. Cengage Learning.

Rothwell, W.J. and Kazanas, H.C. 2003. Planning and Managing Human Resources: Strategic Planning for Human Resources Management. Human Resource Development.

Rowley, C. and Warner, M. 2013. Globalizing International Human Resource Management. Routledge.

Storey, J. 2007. Human Resource Management: A Critical Text. Cengage Learning EMEA.

Wilson, J.P. 2005. Human Resource Development: Learning & Training for Individuals & Organizations. Kogan Page Publishers.