The Essay On HRM's Strategic Role In Organizations.

This task concerns the broad theories and processes related to HRM as a strategic activity.Write an essay in which you:

1. Explain and justify how effective HRM policy and process can help organisations deliver  strategic  effect,  by contributing  to  competitive  advantage.  Use  at  least  one evidenced example of an organisation that has achieved this in the last 15 years, with clear analysisof how their HRM practice has contributed to organisational success.

2. Provide  three  evidenced  examples  of  how  Internal (Organisational)  or  External Environmentfactors have affected the delivery of HRM policy and practice within the United Kingdom in the last 25 years. Clearly demonstrate how HRM practice has been affected along with any legislation that is relevant to the issue.

Human resource management is the branch in an organization that is responsible for the strategic approach to ensure that the management works effectively, in a bid to aid the business to have a competitive advantage. It is commonly known as the HRM or HR department and is responsible for employee administration. A strategic approach in management is where the on organization comes formulates and implements actions and decisions which are aimed in achieving the set objectives of the organization and thus giving it a competitive edge over rivals. The key and primary responsibilities of the Human Resource Management include; staffing and job analysis, utilizing the workforce efficiently and to the maximum, workforce performance appraisal and measurement, aid workers in developing professionally, maintaining the workforce and implementation of reward systems for employees. By doing all this, it ensure smooth and efficient running of the company and also cutting on costs thus gaining a competitive advantage thus ensuring maximum profits. It should also be noted that the failure or success of any organization heavily relies on their Human Resource Management.

1. All organizations aim to be profitable and also have an edge over its competitors in order to sustain and gain competitive advantage. In order to achieve this, companies have given strategic attention in aligning human resources in a way that is meant to sub-serve this cause. Organizations find it very hard when recruiting, developing, retaining the useful workforce motivate in a fiercely competitive environment. The basis of this report is to establish how Human Resource management aids a company deliver strategic effect thus contributing to competitive advantage drawing an example in the United Kingdom.

For companies/organization to have a competitive edge, they rely on their Human resource management to recruit the most qualified and competent employees, come with the most efficient and effective training institutes and programs, and retention programs and incentives to ensure they maintain their most productive and efficient workforce. In so doing, it ensures that while competitors or rival firms struggle with maintaining their most productive workers, the organization will be more focused on sales increment and more production ensuring efficiency and more profitability. This will also ensure that the organization saves the heavy costs associated with regular hiring and training to replace the high turnover of the efficient workforce. Albrecht, et al, (2015).

The focus of the report will be based on the Barclays Financial Services Company which is a Multinational Corporation with a global workforce of 150,000 and is headquartered in London. The company is one of the oldest in Britain having being established in 1690. Jones, (2013). Its product includes; retail banking, commercial banking, wealth management and investment banking. The company has established a strong human resource management strategy for competitive management given it many competitors in Britain such at the Royal Bank of Scotland, the Standard Chartered Bank, Lloyd Banking Group among others. A strategic Human Resource Management will ensure that the company has an advantage over its many competitors thus remaining relevant and profitable. Capie and Webber, 2013). .

Explaining how Effective HRM Can Contribute to Competitive Advantage with a Case Study of Barclays

In the Barclays Financial Services Company, the human resource department is mandated with the task of workforce recruitment and their job analysis, maximizing the workforce to their capacity, measuring and appraising their performance in work, maintenance and development of their workforce and also coming up with reward systems that are conditional in order to motivate employee. Schuler and  Jackson, (2014). In the Barclays organization, the human resource department works closely with each of their business unit in a bid to aid them to stay ahead of their rivals by retaining and also attracting the best workforce and also utilizing their talent accordingly. This will ensure that the business customers and stakeholders are satisfied with the services offered thus creating an edge over rivals. Besides recruiting and retaining the best talent, the human resource department in Barclays also ensures that there is a conducive working relationship between workmates across the horizontal and vertical level and also monitors closely their training programs. Triandis, (2018). 

Barclays attributes its success via competitive advantage to their human resource management and the mandate of the human resource management is as follow:

1. Job analysis and recruitment

Job analysis can be explained as the procedure that is adopted to gather information about the responsibilities, duties, the needed skills, work environment and anticipated outcomes involved in a particular job. On the other hand, recruitment involves the process of attracting, shortlisting and appointing the most suitably placed people for a particular job in an organization either on a temporary or permanent basis. McGraw, (2013). The human resource department is charged with the task of job analysis so as to ensure that it recruits the most suitable personnel for the job description ensuring that they are competent thus giving the organization a competitive edge. Without the right personnel or having the wrong job description would lead compromising of the services thus bringing about incompetency. This will thus enable other organizations that are efficient to have a competitive advantage.  

Barclays bank has a team of dedicated personnel who are charged with the task of recruitment for their numerous positions in the organization. The team establishes the skills required for the job at hand, the experience needed to perform efficiently in a given position, and also anticipation of future trends in the industry. Also, in order to attract the most suitable candidates available, they determine the most appropriate remuneration. The recruitment of candidates will be screened against the job analysis to determine the most suitable candidate for the job in hand.

2. Organization, utilization and maintenance

Organization refers to a company’s arrangement of resources so as to enable it achieve its goals and strategies. Organization is implemented in what is called an organization structure which is a system that directs how certain activities will be conducted to achieve the company’s goals. This includes the rules to follow and the and also the communication channel to be followed within the different ranks. Robbins and Judge, (2014). Good communication enhances coordination in the organization. Utilization involves how the human resource department effectively maximizes the human and capital resources available in order to achieve the organization set goals. Okoye. and Ezejiofor, (2013). Maintenance by the human resource refers to the activities they undertake to ensure loyalty and commitment among the organization’s employees. It also entails the maintaining the productive workforce. Marchington, et al (2016).

The Impact of Internal and External Environmental Factors on HRM in the UK

In order to maintain their workforce, the Barclays human resource department has frameworks designed like the health and safety of the workforce. In maintaining the workforce by keeping them satisfied, the organization is thus assured of maximum productivity by its workforce. It has also established an efficient communication system that ensures the organization works in a manner that is unified thus creating a common mission and cooperation among employees. The communication channel involves a way of handling grievances such as theft or sexual harassment allegations. Barclays has a policy that endeavors to negate all forms of discrimination based on, gender or sexual, disability and ethnicity.

3. Performance appraisal

Performance appraisal is the process that involves the evaluation and documenting the report of the assessed employee performance and productivity in relation to the organizations set objectives. Performance appraisal is quite crucial as it helps identification of areas that need improvement thus giving the company a competitive advantage. For the areas that are identified as needing improvement, the company may carry out a survey to determine the reason behind it and remedies such as training or addition of remuneration to motivate the workforce may be employed.

The human resource department in Barclays bank job performance by its employees and then gives the employees a report on their performance both negative and positive. The bank carries out the performance appraisal annually. Performance appraisal is very crucial as it is used to determine promotions and salary increment. Good performance is rewarded thus motivating the employees while negative performance may lead to disciplinary measures such as dismissal thus keeping the employees on their toes. All this aids in helping the organization have a competitive advantage in that performance will be of the highest standards.

4. Reward system

This involves requite both intrinsic and extrinsic that a company gives to its employees for good performance. The rewards are not part of the employees’ salary and may either be monetary or non-monetary and are geared towards motivating the employees. The rewards are aligned the targeted goals of the organization where if an employee achieves a given goal they are rewarded. Shields, et al, (2015).  Intrinsic rewards are meant to give individuals personal satisfaction and include acknowledgment and feedback. On the other hand, extrinsic rewards are those that are concrete and they include bonuses, gifts, raises and promotions. Dysvik and Kuvaas, (2013).

The human resource department in Barclays is responsible for managing the reward system. It is quite important for the human resource department of Barclays bank to come up with a mechanism that will give their employees specific rewards for their past achievement and also rewarding their future high performance with incentives. The reward system also formulates the necessary disciplinary measures to be undertaken within the work force to address the various specific problems. The reward system creates a systematic way that helps the organization to achieve its objectives by motivating the employees to provide good performance.

5. Employee development and training

Employee training is a program that is geared towards aiding employees in learning certain skills and knowledge in order to improve their performance in their current roles and is a short-term project normally to 6 months. Employee development on the other hand is aims at growing of the employees’ performance for future roles and is normally a continuing project. Jehanzeb and Bashir, (2013).

In Barclays, the human resource department has the mandate of identifying the training needs of its employees. Once the needs are identified, the human resource department comes up with the most suitable development programs tailored to cater for those needs. It provides orientation programs for new employees to help them understand their roles ad also adapt to the policies and objectives if the company. It also provides ambitious education .programs to help the existing work force learn and adapt new and future trends especially given how the banking industry changes rapidly, for example, new software in the Barclays Digital Wing. This ensures employees are up to date and also ensure that they are able to meet the company’s objectives nullifying any advantage other rivals may have in future and current trends.

2. Internal environment is that which constitutes of a company’s strengths and weakness while the external environment are outside factors that affect a business and include social, competition, legal, technological changes, political and economic.

1. Legal factors

Legal factors affecting businesses are legislations set by a government to regulate business practices. Organizations are obliged to comply the regulations as they are mandatory. Kelsen, (2017).  The United Kingdom has passed various laws to regulate organizations and they are as follows. Acharya, Baghai, and Subramanian, (2013).

a. Statutory increases to maternity / paternity pay and sickness

In 2013, the United Kingdom government declared that there should be an increment in paternity, maternity pay and sickness leave. The government increased paternity and maternity pay from £135.45 to £136.78 a week. However, I order to qualify for the paternal and maternal pay, individuals should be earning at least £109.00 a week up from £107.00 a week in 6^th of April 2013. For the sick pay, it increased to £86.70 in 6^th April 2013 to £85.85. Also, in order to qualify for this payment should earn at least £109.00 a week.

b. Unfair dismissal

The United Kingdom passed a law that stipulates that individuals who are dismissed unfairly will be compensated one year’s salary from the existing £74,200. This regulates that the HRM in that they should follow the right protocol while dismissing employees.

c. Parental leave

As of 8^th March 2013, the human resource department is required to give their employees an 18 week parental leave up from 13 weeks.  It is important that the human resources department update their handbooks and any other documents so that employees are aware of the changes to the law.           

d. PAYE information

Her Majesty's Revenue and Customs (HMRC) introduced requirement that will give-time information being part of PAYE. HMRC is a non-ministerial department in the UK that is mandated with tax collection. The requirement states that the Human Resource department should provide their PAYE returns to Her Majesty's Revenue and Customs. The real time information submitted should include any deductions including National Insurance Contributions, the amount paid and Income Tax and also the leaving and starting date where applicable. Revenue, (2014).     

2. Technological factors

Technology by the human resource management can be defined software and its corresponding hardware for automating the human resources function in organizations. The services to be automated include remuneration and payroll, management and talent acquisition, performance management, and workforce analysis and benefits administration. Bailey, et al (2018).  The Human Resource Departments have changed the delivery of their policies in the following ways:

a. Recruitment

Amongst the most crucial responsibilities of the Human Resource is recruitment.

• Sourcing - Nowadays, majority of people are members of social media group. The Human resource management uses this to profile the candidate’s user data in a bid to give insight on the candidate’s personality, aspirations, career and personal goal without conducting any interview.  El Ouirdi, et al(2016).
• Screening – Given the large number of candidates who apply for a given job, then the number of resumes is also high and cumbersome to look into all of them. However, Human Resource departments have adopted intelligent technology that is capable of screening the resumes to identify unique specifications given the job available. Nikolaou, (2014).
• Pre-selection – In the elimination stage, many human resource departments have adopted the online psychometric assessment of similar personality traits. The technology is meant to come up with candidates with the most suitable attitudes and values. Some examples of these technologies include the Thomas Profiling and the Myers Briggs Type Indicator.Bond, Lloyd and Guenole, (2013).
• Selection – Majority of organizations are now turning to technology to probe interviews. The smart technology changes the next question with regards to a candidate’s response. This ensures the answers are not predetermined thus selecting the most suitable candidate for the Stone, et al (2013).

b. Data storage

Organizations have adopted the Human resource management system that is a form of technology/software that is used by the Human Resource department to store data. The data stored include payroll information, recruitment processes, employee attendance and performance among other employee and business data. Unlike in the past where data was stored in files, the Human Resource has turned to software such as the Cloud for data storage making it easy to retrieve and also saves on office space. Yang and Jia, (2013).

c. Competitive factors

Competitors are business rivals and if rivals have a competitive advantage then, this would lead the downfall of a company. Thus, action taken by competitors changes the practices and policies made by the Human resource management. Organization therefore review actions by competitors such as salary and wage increment, training, gender composition, benefits to employees and other support programs to employees and come with action to synchronize them with rivals and eliminate the advantage or create an advantage of their own based on the same.  This ensures the employees are satisfied and thus improve their productivity.

d. Economic changes

Economic change is when the economic system structure shifts and is an external influence which plays a major role in how the Human Resource department formulates its policies and practices. Van den Berg, (2016). Putting into consideration both current and the anticipated future economic changes, the human resource department may changes its policies and practices which include hiring, remuneration structure among others. For example, during a boom economic, the Human Resource Department may decide to hire more employees while during the slump period, the department may decide to lay off some workers or cut on compensation in order to remain profitable. Schaal, (2017).

e. Organization Culture

These are the beliefs, assumptions and core values that are common by an organization’s members. This simply involves what the company stands for and believes in. As such, the Human Resource Management formulates policies and practices that give their employees a sense of direction, the code of conduct in terms of attitudes and behavior so as to be in line with an organization’s culture. However, factors such an organization’s traditions, history and past practices may induce resistance to changes in policies and practices among the employees and stakeholders thus forcing the human resource to compromise some of their policies and practices. Hogan and Coote, (2014).

Conclusion 

The Human Resource is responsible for giving a company competitive advantage over rival firms. Thus the Human Resource Management is crucial to ensure that a business remains relevant and profitable by wading off unfair competition from rivals. Human resource practices and policies are affected by both internal and external factors as highlighted in the answer. Different factors have different impacts on the policies and practices. On the other hand, it should be noted that different organizations have different reactions in the formulation of their practices and policies for the various factors involved. Also, when changing the policies and practices, the Human Resource Department has to have consultation with stakeholders and this may slow down decision making due to resistance by stakeholders or board members. However, this ensure there is democracy and inclusivity in formulation of policies and practices.

References 

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