Role and Importance of Strategic HRM – CIT case study

Activity 1

Introduction

An organization is constructed of people. These people who assemble together as an organization’s workforce are recognized as human resources. Human resources department clutches all the scopes of employee concerns like recruiting, training and motivating. Basically, the function that focuses on how to manage the people within an organization is known as Human Resource Management (HRM). HRM deals with issues related to people such as compensation, recruiting,performance management, organization development and employee concerns like- safety, wellness, benefits, motivation, communication, administration, and training. HRM thrives to manage the workplacecultureand environment. Effective HRM enables employees to contribute efficiently and productively to the overall company direction and the accomplishment of the organization’s goals and objectives.

HRM is not managed using the traditional approaches anymore. Rather, the increased use of outsourcing has created the urge for building up new and innovative ways to manage the workforce in today’s workforce. It calls for comprehensive and thorough strategies to respond to the contemporary issues of globalization and diversity.

Company overview:

Complete IT (CIT) is an UK based IT support Service Company that has been providing with local IT support to SMEs for over 20 years now. They tend to maintain the highest levels of technical expertise and accreditations to resolve IT issues. They hold the motto of not just fixing problem, but finding ways to improve systems and positively impact on their clients’ tea, and business. Their services range from reactive support to proactive management of the clients’ IT, but each built specifically for each client. They promise to deliver IT support with passion and commitment with a friendly, honest and simple approach.

1. Role and Importance of Strategic HRM

1.1 Strategic HRM

Strategic HRM is known as the preventive management system of the employees in an organization. More elaborately speaking, it is a technique of managing human resources that brings a strategic outline to upkeep long-term business objectives and outcomes.

There are three major theories of strategic HRM used in today’s HRM. Like many other companies, CIT also uses these theories into application.

1. Universalist Approach:

Also known as Best Practice Approach, this theory assumes that high performance output in an organization can be achieved via a set of HRM practices. These practices are described in a set of four policy goals-

• Commitment: Confirming the faithfulness of employees to the organization so that they provide with their best of performance.
• Strategic Integration: The integration of the HRM to the company’s strategic planning so that HRM can be a part of company’s overall strategy should be ensured. Moreover it should also be ensured that the line managers use HRM strategies in their everyday work.
• Quality: The fact that employees should always be kept satisfied and motivated in order to bring out their optimum performance so that they can deliver products and of the highest of quality should be ensured.
• Flexibility: Today’s workforce seek out flexibility in their workplace. Administration should ensure this aspect in order to keep the staff driven enough to deliver the maximum productivity.

However, it is to be noted that Guest believed all of these theories shall work only together, and not individually, to attain the company objectives.

2. Fit or Contingency Approach:

HR plans and practices must be coordinated with the organization’s plans and practices for the maximum performance to be produced. This synchronization of HR and Company strategies can be labeled as the “vertical fit”. This approach is also known as the “best fit approach”.

The best fit approach:The best fit approach supports that HR strategies and organizational policies have to be aligned. There are three available simulations of this best fit approach-

• Lifecycle model: Organizational development is done in four stages – Start-up, Growth, Maturity and Decline. The HR department should be well aware of the company’s ongoing stage so they can select the correct strategies to match up the company’s current stage.
• Strategic configuration: In this model it is said that companies can be on the operative front if they can implement tactical configuration policy (market-type structure or internal type structure), coordinated with company types (namely Defenders, Prospectors and Reactors, Analyzers), and (classified as; Machine Bureaucracy, Divisionalised form, Simple Structure, Adhocracy Professional and Bureaucracy).
• Best fit and competitive strategy: three competitive strategies are; Quality, Cost-Leadership and Focus (Niche). Companies should adopt competitive strategies in order to maximize performances. This is more important because of the increasing competition in today’s business world. It is always better to have a competitive edge and to use that edge in the best way possible.

3. The Configurationally Perspective:

This model deals with the importance of the outline of several HR policies and in what way these outline of HR policies (independent variables) affect the Organizational performance (dependent variable). The term configuration is explained differently by various scholars and writers for two reasons. The first one being “the scope to which HR policies are associated into an overall HR structure” and the second one- “the notch of fit amid an overall HR structure and an administrative type”.

1.2 Importance of HRM

In CIT, HRM is perceived as one of the most consequential drives of the corporation. HR management’s significance can be classified into the following subsequent activities:

• Enrollment and Training: Recruiting new people and training them as per the organizations’ needs are the key responsibilities of HRM. To fill up the vacant position in the organizations, HR managers plan test and trials for potential candidates. HR also fixes the terms and conditions of the contract that takes place between the employee and the organization.
• Performance Evaluations: HRM prompts the workforce to bring out their finest performance. It provides with feedbacks to the employees that creates a proper communication between the employees and the employers.
• Nourishing Work Atmosphere: Work ambiance is a crucial aspect for employee satisfaction and high level of performance. HRM manages to maintain a decent, safe and clean working environment for its employees. The performance of the workforce largely depend on the work atmosphere and company culture. So, HRM strives to keep up the best possible work environment for its staff.
• Handling Disputes: Inner disputes and conflicts among colleagues is a very common element in organizations. It is always the HRM’s duty to mediate in such situation so as to resolve such clashes and therefore establish an order in the workforce. While it’s important to take care of the disputes in a fair manner, the HRM must also be very cautious in handling such cases as sometimes, the methods can easily create employee displeasure.
• Increasing Public Relations: Developing public relation with numerous interested parties and stakeholders of the organization is a vital role played by the HRM. HRM stands responsible for organizing meetings, seminars, workshops etc. to interconnect with these parties. In some cases HR department even helps into business and marketing planning.

1.3 Analysis of different Frameworks of HRM

• The Harvard Analytical Framework for HRM: Produced by Beer et al. (1984), is a good equilibrium between the Universalist Approach and the Fit Approach. CIT relates this model in its HR management. This framework works on the conjecture that the problems of managing employees can be explained when the general managers of the company have their own perspective about how they want the employees to be involved in the company and what sort of policies are best for this method.
• Ulrich’s Multiple Role Model: Ulrich et al. (2009) proposes a multiple competency framework involving of four potentials for HR mangers other than recruiting, training, and motivating. It is specified below:

• Figure 2: Ulrich’s Multiple Role Model

HR roles are demonstrated in this framework into two axes. The horizontal axis designates the leading focus of HR—either Future Strategic or Day to Day Operational, and the vertical axis indicates leading actions of HR, either process and systems or people connected. These two axes form the four qualities of HR- Strategic Partner, Change Agent, Employee Champion and Administrative Expert. CIT’s HR managers ponder in these features with attention.

2. Formulation & Implementation of HR Strategies

2.1 Analyzing the Strategic Human Resource Process

Strategic HR Process can’t be constructed of any single approach, it can always vary between organizations. CIT uses a specific model for Strategic HR process that encompasses of the following key facts:

• Structuring the strategic course: When the HR policies are backed up by the company’s mission, vision and objective, this process is constructed. In CIT, the entire HRM process is established by concurring the company leaders’ long term objectives. So the entire process of recruitment, training, motivating and additional processes are planned to achieve long term company goal.
• Developing the HRM System: Since CIT is an IT based firm, it allows its employees to work from home by using internet. Also, CIT believes in creating variety in their workforce in lieu to which they are engaging female employees in definite positions.
• Planning the total workforce: Defining the essential future workforce depending on the company’s progress and necessity is a very challenging activity of the HRM, especially now-a-days.
• Producing the required human resources: The key focus of this process is to recruit, contract, organize, formulate and convey staffs grounded on the tactical provisions of the management’s workforce strategy.
• Dedicating to HR progress and performance: HR development process marks on the growth and use of business proficiency and the cooperating elements, all of which lead to a thriving organizational performance. A good encouragement program for the employees should comprise a mix of base pay, bonus, profit share, priority in company share etc. in overall. (Robert C. B., 2003).
• Evaluating and supporting managerial aptitude and performance: Basically, there is no exact approach to precisely measure the changes in HR policies or how performances affect the company’s output. This can be overcome by the usage ‘balance scorecards.’

2.2 Roles in Strategic Human Resource Management

The strategic roles of top management, front-line management, HR executive, HR specialists are the ones that sums up the roles of strategic HRM. Their roles in CIT are described below-

• Strategic Part of Top Management: The long term business goals of the company are set by the idealistic leaders of the company- the ones who forms the top management. This set consists of the CEO, CFO and President. They ensure the concurrence of the company growth and objectives with those of the individual departments.
• Strategic Part of Front-line Administration: According to Eduardo Salas et al (2001), front line managers ‘bring HR policies to life’. This means that if the managers are against a new HR strategy, it would be problematic to device the strategy which will gradually lead to dissatisfaction among employees.
• Tactical Role of the HR Director: Because they are the part of the top management, the HR Directors hold a great position in the strategic planning. They ensure the integration of HR policies and tactics with overall business goals and supervise the implementation of those plans.
• Strategic Part of HR Authorities: HR executives have various tasks like new preparation programs, performance management, granting employees, improving the work atmosphere etc. therefore, at any given point, they should work on a priority basis.

2.3 Development of HR Strategies

There is no single way to advance HR strategies. For example, CIT uses the six step method proposed by Gratton (1999):

1. Figure the superintendent association: Comprising people from all parts of the professional.

2. Envisaging the upcoming: Building a shared idea for the regions of strategic prominence.

3. Identifying present abilities and pinpoint the gap: Assessing the company’s present point and analyzing the break between company’s upcoming goals and current condition.

4. Shape a map of the system: This is done to safeguard the small stages taken can be expressed into a whole plan.

5. Model the refinements of the structure: All possible future results should be taken into account to evade any unexpected change or uncertainty in the strategic plan.

6. Bridge into action: Involving line managers, creating guiding principles, forming cross-functional collections to recognize objectives and performance devices.

2.4 Implementation of HR Strategies

HR strategies implementation can always vary from organization to organization, it has no perfect model. CIT practices the following tasks to implement HR policies.

1. Supporting employees to understand the strategy: Employees must have the proper understanding of the ‘what and why’ of the policy to actually execute it in the workplace. A failure to comprehend the company policy properly will prohibit the employees from using their full level of talent to achieve company objective.
2. Improving employee responsibility to the strategy: It is always known that change causes disharmony. Any kind of modification in strategy can easily cause displeasure among employees. Employees must be given the understanding that accepting the current change will lead to a better outcome.
3. Reforming local work with the strategy: The proper understanding of the strategies by the employees is not always enough, it must also be executed by dismissing off-strategy works and starting on-strategy works with new vigor.
4. Generating inter-departmental assistance: Creating bridging relation among the employees of different subdivisions is always a little challenging because of their different work nature.

Activity 2

3. Contemporary Issues in Strategic HR Management

3.1 Identification of Contemporary Issues Affecting Strategic HRM

Strategic HRM is mostly affected by the following issues-

• Job Stress: The adverse reaction that people tend to show when they’re incapable of coping up with the pressure and atmosphere of work can be defines as Job Stress. It can lead to illness, absenteeism, low efficiency rate, frustration, personal problems etc.
• Work-Life Stability: Everyone is always busy in today’s competitive corporate world. The use of advanced technology allows employers to engage employees in work even after office hours, via internet.
• Diversity: In any organization today, people from diverse backgrounds come together to work. Globalization has become a major issue in today’s HR management.
• Downsizing: Many companies are economizing their workforce due to recent economic recession, as a measure of cost cutting.

3.2 Analysis of Contemporary Issues Affecting Strategic HRM

The increasing challenges in HRM management are forcing today’s organizations to consider strategic HRM in a different way. Recruitment procedure is now a two-way approach. Employers can use a resume record or ‘corporate poaching’.

Because job switching has become a very common issue today, keeping employees, specially the most adept ones, motivated and satisfied is becoming much tougher. Even CIT has not been able to keep a hold of many of its most capable employees. So, they’re now forming new strategies to keep their staff driven.

Activity 3

4. Assessing the range of HR Strategies & its Application

This section discusses different types of strategies in HR and their application in business organizations.

4.1 Range of HR Strategies

The ranges of HR strategies include different tools. The ones used by CIT are discussed below:

• Strategies for improving organizational effectiveness:

• Concrete leadership from the upper management.
• A strong management team.
• Continual pressure to renovate and expand.
• Ability to react fast to opportunities and threats.

• Strategies for Learning and Expansion: This ensures the correct training of the employees in order to achieve organizational goals. This is related with housing a learning culture, encouraging organizational knowledge, providing for individual learning and launching a learning organization.
• Strategies for Performance Measurement: Performance Management “carries a mean of joining business strategy and technical assembly to direct the whole organization to achieving mutual organizational objectives” (Purcell et al, 2005), it delivers the best means to attain organizational goals.
• Strategies for Employee Relations: Here, the intents of the organization about what is required to be done and what is needed to be altered in the customs in which the organization maintains its relationships with employees and their trade unions is explained. It is to be noted that employee policies are different than strategies. Strategies are dynamic.

3.2 Application of HR Strategies

CIT attempts to achieve its organizational goals by applying all the strategies defined above, including resourcing strategy and reward strategy.

It can be quite impossible to measure the exact amount of return these applications of HR strategies bring; nonetheless, there are some indicative measures that can help us towards greater understanding of the impact of change in HR policies. For example, if the workforce management program has been integrated properly with the company’s goals and company is performing well, it can be said that we are getting good return on HR strategies. Another example of good HR outcomes is found on Michael Armstrong et al (2006) research reports on hospitals which decreased mortality rate by creating efficient HRM.

Conclusion

It can be concluded that human resource management is one of the crucial activities in today’s organizations. No workplace can be run proficiently without correctly trained and motivated employees. And with the increasing globalization today, proper Human Resource Management is becoming more and more challenging.