Context and Role of Strategic Human Resource Management - Case Study

Strategic human resource management and its importance

Strategic human resource management (SHRM) involves the acquisition of the best talent, its training, development, and reward for the benefit of both the organization and its employees (Boon et al. 2017). Therefore, this essay will analyse the context and role of strategic human resourcing management (HRM) including the usage of a balanced in a strategy framework.

Moreover, this essay will analyze how HRM strategies is connected with broader management strategies and organizational capability and performance. Therefore, an organization must understand the context and role of strategic human resource management and how its strategies relate to the larger considerations of the company goals and methods for achieving them.

A modern organization models itself on the knowledge that its most significant resource is its human capital (Alkhazali & Halim 2016). The improvement of employee skills and knowledge ultimately lead to an enhancement of the organization’s value due to its developed key competencies especially those that are unique. Therefore, its human strategy must be aligned to its business strategy, this is known as vertical integration (Alkhazali & Halim 2016). Also, for maximum effectiveness, the different components that form the HR strategy must be congruent to ensure they support each other; this is known as horizontal integration.

The environmental changes of an organization’s industry are another consideration of SHRM (Alkhazali & Halim 2016). It should be active enough to ensure quick reaction to change in the operating environment. New organizational goals should be easily transmissible through the organization via human resource (HR). Employee cohesion should also be maintained despite environmental upheavals (Alkhazali & Halim 2016). The strategic pressures that SHRM may face is threefold. Competitive advantage in the industry that can be gained through innovation, cost reduction and quality improvement (Greer 2001).

Innovation requires that employees be influenced to display behavior and qualities necessary for the differentiation of products, productivity gains and improved quality. Cost reduction occurs because of HR policies developed strategically to fit relevant business practices (Greer 2001).

SHRM adds value to an organization through aiding it to achieve its goals. This is only possible if HR is made part of the process of identifying, developing, and implementing programs that lead to the achievement of the main goals of an organization (Sondhi 2018). Consequently, HR and its management becomes a strategic partner within the organization. Several aspects of its operations must then be considered critical to add value to the organization. The first one being the clients it serves.

Context and role of strategic human resource management

A clear definition of the clients HR caters to must include employees, the upper management of the organization and any potential recruits (Sondhi 2018).  HR must then identify the specific needs of each and their expectations to deliver the best service possible. Further optimization and improvement for better delivery requires HR to have a thorough understanding of the services it offers.

This will create value for the organization in such areas as operational efficiency, employee engagement, creation of performance evaluation systems and corporate culture with an emphasis on ethics (Rees and Leatherbarrow 2021). Finally, HR should manage the organizational goals by serving its clients in a proactive manner and ensuring synergy among employees and management in operations. Once HR is comfortable with its initiatives and programs for serving its clients, there should be an effort to measure the progress of each. Such measurements should then be compared with industry standards for bench-marking purposes.

This involves the consideration of the human resources of an organization as an ongoing investment as opposed to a cost to business that may vary with time. This investment should be directed towards the staffing and training of employees, designing of jobs to be filled by them and the appraisal and compensation of the said employees (Shamim et al. 2016). Staffing in an organization should be done after considering the knowledge and skills required for a given job (Shamim et al. 2016).

As such, it is important to first identify the jobs and their specific tasks. Subsequently, a screening process can be completed to identify the right kind of candidate to fill a given position. This requires adequate investment in time, money, and HR expertise. Once the appropriate staffing is complete, employee learning programs should be developed to ensure they are up to date with industry knowledge and standards (Shamim et al. 2016). It ensures continuous innovation and maintenance of optimum operational performance of the organization.

Training should be designed to enhance relevant hard and soft skills of individual employees and their multitasking capabilities. Also, teamwork, problem solving, and mentorship programs should be included. Employee compensation should not only be for their contribution to the organization’s success, but it should reflect their efforts and group performance (Shamim et al. 2016).  Coupled with overall organizational performance, it can be used to develop a reward system as a form of incentive to further improve performance. This implies that the proactive activities of HR have measurable impacts that can then be used to justify current and future programs.

SHRM and its strategic pressures

Investment in such HR programs requires budgeting and its effective utilization. Once programs have been developed and their impacts understood with reports being generated, it becomes easier to promote and defend their value to management. A proper budgeting process involving identification of clients, their needs and difficulties, possible solutions and how to implement them should always be carried out. There must be a comprehensive but quick way of reviewing the impact of HR programs in relation to an organization’s goals (Chalutz Ben-Gal 2019). This is easily achieved using balanced scorecards as they can provide a multidimensional view of a given program in relation to relevant financial information. This way, the value of HR programs can be assessed from non-financial information that it generates. A proper scorecard also allows for the communication of the intentions of HR programs and the prioritization of programs.

The quantities to be assessed by the scorecard must first begin with measuring alignment to company goals (Lakshmi and Pratap 2016). Beyond that, the scorecard should be valid, accountable, actionable and contain measurable results. Validity requires the use of measurable quantities that are easily understood and backed by real data and are part of company objectives. Accountability needs that the element being assessed should include the individuals responsible for ensuring its success. Therefore, performance of employees tasked with certain actions is also measured.

For the scorecard to be considered actionable, it should include references to the main objectives of an organizations strategic plan that will result in conclusions that are actionable. This implies that careful planning must be done to ensure that the balanced scorecard can contain all the required elements for it to be successful. Execution of the scorecard should be within a framework that goes hand in hand with the actual activities being assessed.

The most important aim of HRM is to create an above per strategic capability of an organization by ensuring that it has knowledgeable and skilled employees who are loyal, flexible, and sufficiently motivated (Gill 2006). The individual performance of various employees can be linked to the overall performance of the organization. This is because the organization’s ability to achieve its goals lies within its capabilities which includes its human resource (Chuang & Liao 2010). This can be achieved through proper recruitment and training of employees.

Beginning with the identification of requisite skills for the achievement of company goals to identify the right kind of personnel to hire. Training of employees follows closely to ensure their individual and group performance is at a high level. Added to this, mentorships and career path management can ensure employee satisfaction and loyalty.

Adding value through strategic HRM initiatives

Organizational development is concerned with the improvement of people and processes within an organization to improve their functioning (Sweetman 2018). This is mostly done through the introduction of the desired behavioral change mechanisms. Within the context of HR, this can be viewed as a continuous process to improve the personnel within an organization in line with its goals. HR can introduce several types of programs that in effect enhance the overall functioning of individuals and groups within the organization (Sweetman 2018).

Such programs can include individual interventions meant to improve interpersonal communication. Group interventions are also available for the purposes of improving their internal dynamics and ensuring success in the group tasks. Other interventions relevant in this context include confrontational meetings for solving organizational problems and setting priorities and strategic change interventions that are meant to change the organizational systems.

This is an employee focused approach to HR that takes into consideration all the processes involved in their management and approaches it as one (Boon et al., 2017). The main approach is to view the employees as an investment and to monitor all the aspects of this investment to ensure maximum returns. Individual employees are thus managed from the time of recruitment till they retire or leave the organization. Within this life cycle, the various elements to be managed collectively are recruitment, compensation and other benefits, work design and performance management. This can then be used to create a highly efficient and affordable system for managing employees.

The value of such a strategy to the organization is in cost cutting, workforce optimization, amalgamation of related processes thus improving efficiency and maximization of productivity. This is essential to organizational capability. Knowledge management involves the management of all organizational data and information that is crucial for its operations (El Farr and Hosseingholizadeh 2019). This includes all activities that generate, distribute, and maintain this knowledge to achieve company goals. HR integrates into this process by maintaining a central depository for all its information, policies, and documents to enable easy access for all employees and other interested parties of the organization.

Knowledge management of the organization can be integrated into the overall HR strategy as part of its communication process, management, and learning and training of employees (El Farr and Hosseingholizadeh 2019). Therefore, HR designs and develops work for the purpose of knowledge management both internally and in the larger organization. Consequently, further HR programs can be used to increase expertise and the efficiency of operations within this workflow. Corporate social responsibility (CSR) is a recent phenomenon in which an organization puts into consideration the environmental and social concerns of the locale in which it operates as part of its strategies (Di Stefano et al. 2018).

Investing in human capital

HR has the responsibility of ensuring that an organization identifies and develops beneficial CSR programs. This is important to not only attract employees and clients but create a respected company profile of a socially responsible brand. HR can then implement and monitor the CSR plan (Di Stefano et al. 2018). Other proactive measures that HR can engage in include measuring the impact of the CSR plan and celebrating key milestones. This information and any other valuable data about CSR should be communicated to employees of the organization to foster a culture of social consciousness and practices within the human capital of the organization.

The organizational performance strategy is meant to identify the goals of the organization and how to achieve them efficiently. It is the duty of HR to participate in this process as some of its aspects are functions of SHRM (Katou 2017, p. 3). This includes monitoring the processes involved to ensure they are successful while collecting the performance data. This can then be used to adjust the tasks to ensure the objectives are met efficiently. Some of HR activities involved in organizational performance strategy are recruitment, training and development and mentorship of employees to enhance their performance at work (Katou 2017, p. 7). Improvement of services that HR offers to its client is another part of the strategy and finally maintaining its competitive advantage against others. It is important that these strategies are complementary and clear for effectiveness and to eliminate half measures.

The most important element of HR is managing the performance of individuals employed in each organization (DeNisi and Murphy 2017). It must ensure that the working environment of the employees is conducive enough to ensure they meet their performance goals. This begins with identifying jobs and finding the right personnel to do it. Training and development may be required to ensure that the employee is adequately prepared (SHRM 2019). Group dynamics also must be managed such as interpersonal communication and team work to enhance individual performances. Expectations of employees should be set at the onset and regular appraisals done to evaluate performance.

Praise and reward can then be used to recognize good performance and to motivate further improvement (DeNisi and Murphy 2017).  Peer reviews are also useful as coworkers can spur each other on or correct errors visible to them.

In conclusion, value addition by HR breeds a strong corporate culture through employee engagement and motivation, behavior alignment and loyalty to the organization.