Importance of Strategic Human Resource Management

Strategic Human Resource Management is a vital element in the establishment and existence of an organisation, as it concerns one of the very important aspects of resources that pertain to the existence of organisations. It is the platform, upon which, well implemented and managed, an organisation would be able to apportion and utilise other resources such as, Raw materials, physical and financial resources that are also of major implication to the existence of the organisation.

Many scholars in the field of management studies have since come up with different definitions and ideas of strategic human resource management. And in the ideas itself, gives definitive reasons and basis on the importance of strategic human resource management. An example is two of the following scholars;

1. According to Schuler (1992)

“Strategic Human Resource Management is largely about integration and adaptation. It concerns ensuring

Human Resources (HR) management is fully integrated with the strategy and strategic needs of the organisation;

Human Resource policies cohere both across policy areas and across hierarchies;

Human Resource practices are adjusted, accepted and used by the line managers and employees as part of their every day work.”

2. Michael Armstrong (2008) states Strategic Human Resources Management as being

” A mindset underpinned by certain concepts rather than a set of techniques, that provide the foundation of strategic reviews in which the analysis of the organisational context and existing Human Resource practices leads to choices on strategic plans for the development of overall or specific Human Resource strategies. It also concerns implementing and monitoring of these strategies, so as to ensure that the organisation’s objectives are achieved and its values are put into practice.”

Strategic Human Resource Management

Human Strategies – overall/specific

Strategic management – strategic role of Human Resources

Strategic Choice

Strategic Analysis

Figure 1.1 – Strategic Human Resource Management Model

Source: Michael Armstrong (2008)

Michael Armstrong further states that the rationale of strategic Human Resource Management is based on three of the following propositions

Human resources or human capital of an organisation play a strategic role in its success and are a major source of competitive advantage

Human Resource strategies should be integrated with business plans (vertical integration)

Individual Human Resource strategies should cohere by being linked to each other to provide mutual support (horizontal integration)

To be able to run and operate an organisation effectively, management must have the best skilled people or specialist in place that will are able to formulate strategies and implement them accordingly so as to attain the overall organisations’ objectives, by aligning strategies in relation to set targets. The very aspect of people management is of a vital and sensitive element as, it enables for the everyday operations of the organisation to function both effectively and efficiently, for as long as the right and best practices are in place. Without which, operation of the organisation may cease due to lack of commitment and work will suffer tremendously, as the resources are not well managed, in the end, affecting other resources such as physical and financial.

1.2 THE PURPOSE OF STRATEGIC HUMAN RESOURCE MANAGEMENT

ACTIVITIES IN AN ORGANISATION – A CASE OF MORRISON [P2]

Morrison was founded in 1899, by Mr William Morrison, as an egg and butter merchant in bradford. His son ken Morrioson took over the running of the company in 1952 and in 1958, it opened it’s a small shop in the town centre. Ken Morrison has since since retired and the current Chief Executive Officer – Mr Dalton Phillips.

As of 1967, it became a pulic limited company under the London Stock exchange.

Morrison grew even bigger when it acquired safeway – another british supermarket at the time. Currently Morrison is the fourth biggest supermarket in the United Kingdom with over 400 stores spread across.

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The supermarket’s Human Resources systems of the embrace a vast variety of strategic management approaches that have been formulated and implemented to enable the supermarket attain market growth and compete effectively with its competitors.

The Supermarket’s Strategic Human Resource Management encompasses a wide range of activities that the management have to undertake, in order to integrate the organisation’s human resources with its objectives. These include;

Staffing

This involves among other things, Selection and Recruitment – this is the sourcing of skilled and qualified manpower labour to fill in vacancies for the specified job, and matching the available human resources with the right jobs. The sourcing of human resource may be done either internal or external of the organisation.

Performance Management and Reward Systems

This involves appraisal of staff input and overall performances on their jobs. Jobs were analysed and defined accordingly and the employee’s performance gauged in accordance with their tasks and responsibilities as per the job specifications. The reward system at the company were mishandled and mismanaged and those employees that did perform effectively did feel they needed to be rewarded not only on short term achievements, but also long term.

Employee Development

Development of employees is a vital tool that has to be in place in all given circumstances. The ever changing business environment, due to new and advanced technology and work approaches, requires for employees to be trained accordingly so as to have and maintain a standardisation in work practices. Having a performance appraisal can help in mapping out the desired needs for training for employees. Newly employed staff may be put under some training during their induction, whereas, old time staff is from time to time sent to do refresher courses, as well as professional trainings and this enhances employee’s career development.

Employee Retention

With proper motivation incentives in place, employees tend to be of high morale and there is normally an increased commitment in their work, thus a high performance and quality output is the resultant of this dedication. There tends to be little or no unnecessary absenteeism and on the other hand, a high turnover in target margins.

Employee relations

This entails having a proper and formalised communication system for both within the organisation and its external environment. All work procedures have to be made known to both parties, that is, the management and employees at large. Employees have the right to be involved or participate in schemes such as Unions in their work places. This helps in times of disputes with management, as negotiations may be held in order to resolving whatever disputes, which may include; discriminations, harassment, etc.

Employee Maintenance

This is the administration and monitoring of workplace in terms of;

healthy and safety

Welfare policies that will help to retain the overall workforce

Statutory policies and regulations in regards to the employment contracts.

Morrison strategic Human resource strategies have implemented some incentives that are in recognition of its employees by the following (Morrison.com):

Staff Discount – employees are entitled to a staff discount card on commencement of their contract- an additional is given for the staff’s nominated person, saving a 10% every time you shop.

Profit sharing – given as a bonus at year end

Holidays – Entitlement of up to 29 days a year -includes bank holidays

Service awards – for long serving employees, given after 5 years of working with Morrison’s

Pension Scheme – On offer is an independent run contributory scheme.

Share save Scheme – staff are offered opportunities to join a three – five year share save scheme providing the chance to save monthly, with the option of buying shares at a discounted rate at the end of the scheme

Morrison is embarking on a new set of vision and values, principles that have a dynamic effect on their teams and placing Human Resource at the heart of their business agenda. They have introduced initiatives like ‘can-do’, ‘great shop-keeping’ and ‘one team’ that is meant to motivate its employees in their efforts and reward them for their performances accordingly.

1.3 EVALUATION OF CONTRIBUTION OF STRATEGIC HUMAN RESOURCE

MANAGEMENT TO THE ACHIEVEMENT OF AN ORGANISATION [P3]

By having a strategic human resources management system in place, Morrison Supermarket will be able to operate its businesses effectively, for as long as the strategies are in alignment with the overall company objective. The contributions that may be impacted on the organisation, includes;

Market growth. The company may be able to improve and expand its potential by adopting strategies that will assist in employee motivations, performance appraisals and developments. Hence there would be less labour turnover, and employees would commit in their jobs and endeavour to reach set time frames and targets with a lot of enthusiasm.

Increase of Revenue – the high morale and dedication of employees will no doubt see a rise in revenue, as employees are enthusiastic on their jobs and aim to have a high quality of productivity in their output.

Shareholders and stakeholder alike will be pleased and satisfied with the overall performance and this may well be the route into winning of more customers, as the company may just well be rebranding itself in terms of its reputation.

Expansion – the company may then seize the opportunity of expanding into other provinces of the country, as it is currently only based in the capital city. It may well invest in other telecommunication line of business, such as mobile networking.

Organisational development (OD)- this is defined as the

“The system wide application and transfer of behavioural science knowledge to the planned development, improvement and refinement of the strategies, structures and processes that leads to organisational effectiveness” (Cummins and Worley [2005])

OD aims to help employees work more effectively together to improve the processes in the organisation, such as formulation and implementation of strategy and facilitate the transformation of the organisation and the management of change.

Team work – it encourages individuals to recognise the importance of working as a team. Many jobs in organisation are a continuous process where the possibility that an employee may only being doing an area in which they have the expertise and someone else, may be doing the other part, before it is actually a completed task. Therefore, having the most effective strategic human resource management systems will enhance this process.

Strategic Human Resource Management overall purpose is to ensure that the organisation is able to achieve success through people. Therefore the different elements and activities that make up for its procedure to be effective, contributes largely to the achievement of organisation’s objectives in that it critically addresses issues relating to the management of people (employees). The various activities enable for the formulation and implementation of strategic plans and decisions that have a long term impact on the welfare of both the employees and the organisation alike.

Other factors that stimulate the importance of strategic human resource are government regulations, globalisation, changing laws for labour unions