Interrelationship between HRM an organisation and its environment


The aim of this assignment is to examine the interrelationship between Human Resource Management (HRM), an organization and its environment. This essay will cover four main topics which will be discussed in detail. First part is The Strategic HRM with reference to Armstrong and Long (1994). Second part is Policies and practices with reference to Devanna, Fombrun & Tichy (1984). Third part is challenges in human resource planning and fourth part is stages in planning process.

Human resource management is defined as a tactical and coherent approach to the group of an organization’s most cherished assets; the people working at hand who individually and collectively contribute to the accomplishment of its objectives. Boxall et al (2007) illustrates HRM as the management of job and people en route for desired ends. Strategic HRM is an approach that explores how the organization’s goals will be achieved throughout individuals by means of HR strategy and incorporated HR policy and practices.

Strategic human resource management

“Strategic HRM addresses broad organisational concerns relating to changes in structure and culture, organizational effectiveness and performance, matching resources to future requirements and the management of change. Overall it will consider any major ‘people’ issues (Armstrong and Long 1994)

Pak and save is best known as a supermarket retailer for grocery goods in NZ. It believes that they have a variety of employment policies to make certain that their workforce is as representative of the wider community.( 2012) For changes in structure and culture employees usually has several options of employment including part time, flexible contracts for retail employees, job share, enhanced maternity leave/pay, paternity leave, special leave for personal development. ( may be well argued that in many cases the human feature is over and done in relative to how they deal with people, leaving most employees unhappy creating a high staff turnover which harms organisational performance. It is then a great importance that individuals as opposed to just workers want to be managed in a way that dependable with broad organisational requirement such as effectiveness. Mainly organisational efficiency relies on they’re being a fixed ‘fit’ amongst human resource and business strategies. Overall strategies illustrate the general intentions of the association about how individuals must be managed on which potions must be taken to make sure so that as far as possible workers are dedicated, inspired and occupied. All operations regard quality as an important part whereby customers find is easy to judge the operation. As far as customer satisfaction is concerned, the empirical findings demonstrate that most of respondents are satisfied with the overall level of performance of their most preferred supermarket while others are neutral and dissatisfied. Department managers and staff are accountable for the way they communicate and conduct business within the organization. It engages the staff in learning and training techniques to improve their own management skills to meet up the everyday challenges of the working environment. Matching resources to future requirement for Pak and save is by keeping communicating support to employees. The employer develops clear goals, expresses the company’s commitment so that staff can work hard and achieve them, it assigns responsibilities such as training job analysis etc to designated staff members to achieve their set goals, and it ensures that assigned responsibilities are fulfilled. Also it provides appropriate resources for future. Management of change is adapting of knowledge to increase its capabilities. In order to keep Pak and save competitive it has to adopt strategic changes. It enables the organization to widen their services and provides the customers diverse options. It enables the customers to derive information about various products and services.

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Policies and Practices

The formulation of HRM policies and implementation of personnel practices and procedures must be based on fundamental philosophies of controlling behaviour and employee relationships.

Often referred to as the original model of strategic HRM the ‘matching model’ developed by Devanna, Fombrun & Tichy (1984) shows how HR policies and practices are inextricably linked to the formulation and implementation of strategic corporate or business objectives. This model emphasises the need for ‘tight fit’ between HR and business strategies but also recognises the role of external forces and environmental circumstances in determining just what an organization’s mission and strategies might be. HRM is a top-level activity concerned with setting board directions and strategies. In this model planning is used. There is logical approach to the plan and organization of HR systems based on an employment policy and staffing strategy often underpinned by a philosophy. HR policies and activities are matched to some explicit business strategy.

The Michigan model shown recognises the external and internal forces of HRM as a triangle. Management decides the mission and strategy, it designs the organisational structure to meet the strategy and mission, and integrates and organises HRM to ¬t in with the structure and to ful¬l the mission and strategy. The mission, strategy, organisational structure and human resource management cannot operate in isolation. They also need to respond to the external forces of politics, economics and culture. Once these have been taken into account, managers can commence to plan the human resource system. The Michigan model is based on strategic control, organisational structure and systems putting place for managing people. (Blog spot 2012). It explores the need for human assets to be managed to achieve strategic goals. Motivation and rewards are important but only as a means of achieving the organisational mission and goals. Economic forces that affect Pak and save are income, inflation, recession and interest rate. Political forces are either positively or negatively depending on the existing circumstances in the country. It mostly forms the outside factors which are a fraction of the macro-environment which controls the ability of individuals. Cultural forces are dealing with different ethnic groups of people for example like in Pak and save we deal with all kinds of races like asian, polynesian etc. Mission and strategies is the description of what the organization does. Every staff member’s actions in Pak and save express the mission statement by the behaviour and attitude in action. Organisational structure of any organization will vary upon the size and type of business. In retail store (Pak and Save) creates a variety of divisions for every particular function along with many layers of management. It has employees consisting of a manager, assistant manager and sales associates.

An organisation operating ‘hard’ HRM would aim to have a rational ¬t among the organisation’s strategy, structure and HRM systems. The management style would see employees as a means of achieving business goals, and employees would be valued only if their worth had a positive effect on business strategy. The hard model of HRM is much closer in its philosophy to free market thinking with the use of hiring, ¬ring and cost-cutting to ensure that the human resource is fully utilised.

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Challenges in human resource planning

Human Resource Planning (HRP) could be expressed as a procedure by which the organization ensures the right number of people and right kind of people, at the right place, at the right time doing the right things for which they are recruited and positioned for the accomplishment of goals of the business.(Mullick.H 2013). It is a procedure of deciding what positions the firm will have to fill up, and how to fill up them. (Mullick.H 2013).It also determines HR needs of the organization in the context of its strategic planning. Human resource planning is a continuous process. According to Dale S Beach (2013) “Human Resource Planning is a procedure of determining and assuring that the business will have an satisfactory quantity of skilled people on hand at the appropriate time, performing jobs which meet up the requirements of the enterprise and which give satisfaction for the people involved”. Some of the challenges of HRP are firstly, Economic and Technological Changes which is shift jobs for developing and to examine industries and telecommunications, pressures of global competition cause firms to adjust by lowering costs and rising production, growth of information technology (Thomson Business & Professional Publishing.(2005). Secondly, Workforce Availability and Quality which is insufficient contribution of employees with required skills for “knowledge jobs”, education of workers in basic skills. Thirdly, Growth in Contingent Workforce which is Increases in short-term employees, independent contractors, leased workers, and temporary staff members caused by necessitate for flexibility in recruitment levels, greater than before trouble in sacking usual workers, reduced legal accountability from contract workers.( 2013) Fourthly, demographics and diversity Issues which are more diversity of race, gender, age and ethnicity. Fifth, balancing Work and Family such as dual-career couples, single-parent households, decline in the “traditional family”, working mothers and family/childcare, single employee “backlash” against family-oriented programs. Lastly, Organizational Restructuring, Mergers, and Acquisitions which is “Right-sizing”—eliminating of layers of management, closing facilities, integrating with other organizations such as Intended results are flatter organizations, increases in production, quality, service and lower costs, expenses are survivor approach, loss of employee loyalty, and turnover of priceless workers. HR managers must work in the direction of ensuring cultural compatibility in mergers.

Stages in Planning Process

Human resource planning is a strategy for the acquisition, utilisation, improvement & retention of an organization’s human resources.(Scribed Inc 2013).It is the procedure of analyzing and identifying the requirement for and accessibility of human resources so that the business can meet up its objectives. There are six steps in this approach: first is strategic business plans .The organization’s mission and strategies form the foundation for all human resources planning. By analysing the strategies and plans managers gain a clear view of the organizations directions and to be able to find out what type of organizational skills and proficiency are essential to achieve strategic goals and planned targets. Relation to Pak and save supermarket uses strategies to attract attention of consumers and to increase the sales. Different techniques are implemented so that they can achieve the goals and managers are being guided by the store manager on how planning has to be done prior to the activities. Secondly, human resource requirements the organization must plan how it will organize and manage the work involved. Whether it is necessary to change the structure of the organization and how the workload can be distributed. This stage involves job design, job analysis and person profiles. For example in Pak and savethe store manager instructs the department managers on their duties and the managers assign their department staff member’s duties. On checkout department, my manager instructs on which shifts I should be working and tells in detail on how the job should be done. Thirdly human resource availability – The supply side of the equation requires equally carefully analysis. It involves the assessment of the organisations current human resources stock and the prediction of movement likely to occur in future. For example in Pak and savethe stock is ordered before a day so that shortage doesn’t arise and by having available stock all the time makes customers happy to do shopping rather than discouraged to come in store. For future it shows a positive view for the customers and the job is secured for the staff members. It is the estimation number and value of customers necessary to gather future desires for the business. Fourthly, assessment of human resources needs is comparing human resources needs with existing resources is at the heart of HR successful planning. It covers internal and external sources of supply.Fifthly action planning which involves planning of organizations current human resources and its future needs which are preparations of new organizations charts, job descriptions, and job evaluations, development of remuneration management plans, performance appraisal, career development and counseling activities. Sixthly, implementation and monitoring Implementation and monitoring – The planning effort can be wasted if the resulting plans aren’t carefully implemented and monitored. HR planning however is not a static or one time exercise. It is a continuous process which requires constant checking and adjustment as circumstances and needs change, at the quantitative level, supply and demand forecast should be updated from time to time. At the quantitative level there is need of checking required so that the recruitment selection, development and training, retention activities and downsizing plan.

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The aim of this assignment has been to investigate the connection between the function of an organization’s HRM within its wider strategy. This essay argued that the development of strategic HRM in the literature is a clear indication and also provided a literature review of specific areas for developing strategic approach to HRM.


Armstrong, M and Long, P (1994) the Reality of Strategic HRM, Institute of Personnel and Development, London. Sinsbury Case Study. Retrieved from

Blog (2012). Michigan model. Retrieved from

Dale.S.(2013). What is Human Resource. Retrieved from

Mullick.H(2013).Human Resource Planning. Retrieved from

Rudman, R. (2000).Human resources management in New Zealand.(4th ed.).Auckland, New Zealand: Pearson Education New Zealand Limited

Scribd Inc. (2013).Human Resource Planning.Retrieved from

Singh, S (2013). Human Resource (handout). Auckland, New Zealand: Aotearoa Tertiary Institute: Diploma in Business.

Thomson Business & Professional Publishing.(2005).Nature of human resource management. Retrieved from Retrieved from

UK Current and Future Conditions of HRM Management. Retrieved from

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