Vertical alignment between Human Resource strategies

Strategic HRM centers on the process of planned human resource usage and activities intended to help the firm, achieve its objectives and goals. Usually two types of congruence would help achieve this.

First is a vertical fit categorizing the alignment of HRM practices and the strategic management processes of the firm. Vertical fit is managed by directing human resources toward the primary initiatives of the organization. Vertical fit is the main idea of HRS, and is linked to a contingency based approach and hence creating an overall fit of the various management strategies (including HRS) in the long term goal.

The second congruence – horizontal fit Implies hand-shaking among the various HRM practices. Horizontal fit is achieved by efficiently allocating the resources. The horizontal fit is bothered as to how the processes and activities planned by the HR department and their management of the resources available to them, are applied within the organization and complements the vertical fit.

The whole idea is to empower the organization to achieve a “Fit” stature but being “flexible” enough to be able to manage the dynamic and complex environment. The contingency approach to HRM strategies, with ‘fundamentally hard’ practices will enable an organization to achieve a ‘vertical fit’, which integrates strategic human resource management “toward the primary initiatives of the organization”. However, the application of the above strategy cannot be successful without consulting, understanding and often inclusion of the other HR practices and theories such as the universalistic approach or theory, soft types of Human Resource strategy, and effective horizontal fit. In fact, these are very much part of the HR practices and activities that help built the outcome HR strategies target to achieve.

Human resource management has ‘hard’ and ‘soft’ magnitudes. These magnitudes of HRM have been adopted in HR strategy, and are a slice of the processes and activities included as part of a HR strategy. Through development of the processes, the various types introduced as part of a HR strategy can very well define the company’s objectives and means of attaining them.

The soft ‘type’ practices views the employee as a priceless resource with emphasis placed on the individual development. The worker is seen as a supply of competitive advantage and the HR department must concentrate on ‘people management’. This type certainly has its benefits and is helpful in service related businesses.

The ‘hard’ type differs fundamentally. The organizations performance is most vital and the firm’s HR strategy must fit with the overall organizational strategy. Under this view, the individual’s interests may be in contrast with the organizations interests. Strong and efficient managerial control must be emphasized over staff if long term goal is to be attained. The hard approach is related with the organizations success in the longer run, where and effective HRS plays its role.

Mabey, C. etal. (1998) Human resource management: A strategic introduction, Wiley-Blackwell, Oxford

2.0 Pfeiffer’s (1998) high commitment elements and their relation to ‘Best Fit’ and ‘Best Practice’

Globalization has an impact on each and every organization. It is a big challenge for the organizations. In such condition, the performance of the organization plays quite important role. The management has to think about the performance of the company, so that they can compete in the modern market. They should go through the latest and modern approaches of the human resources. They should focus on decision making process, training, profit sharing, rewards, and appraisal and high compensation systems. This practice is known as high commitment model.

Pfeiffer (1998) high commitment model states these practices in human resource: security of the employment, hiring of the staff, manageable teams and high decision making, high compensation schemes, wide-ranging training, involvement of employees in decision making and sharing of the information source. In a high commitment model, it is must that the employees work for the objective of the organization.

Secondly, they should be flexible according to the situation and third is that the employees use their hands and brains for completion of every task. The high commitment model refers to high performance work systems.

Theresa Sturm (2007) High commitment HRM organizations

COMPONENTS OF ‘BEST PRACTICE’/HIGH COMMITMENT HRM

1) Provide security to employees. If the employees do not perform, they can be fired but should not quickly because of strategic errors by senior management. Employees are the real power of any organization.

2) Selection of the employees using different criteria. Organizations should recruit the staff according to the cultural fit and attitude, rather than only for the skills which a new employee can easily learn through the training.

3) Decentralization and self-managed teams. There should be particularly interest on the ways that teams can be substituted for hierarchical control by peer-based control of work and hence allows the management layers elimination.

4) High compensation schemes on performance of organization. Economic success can be produced by High pay. There should be increase in the salary and then performance will increase accordingly.

5) High level training. Successful organizations that focus on training do this all just as the matter of faith. Training should be given to the employees so that they can become more reliable and can help to achieve the common goal.

6) Reduce distinctions of status. There should not dress and language differentiation as well as the arrangements and wage differentiations.

7) Sharing financial as well as performance information. It is must to know the position of the organization. So there should be good information sharing system so that staff can have all the important information about the organization.

All these ideas can be helpful to improve the performance of an organization.

Dickson, T. (1998) Strategy+business

2.1 Human Resource strategies in operation at British Airways that could help solve the current industrial action

High commitment elements relate to ‘Best fit’ and ‘best practice’. They both are the best strategies for the HR. ‘Best fit’ maintains the reward system of the organizations for help to achieve of the competitive advantage. On the other hand, ‘Best practice’ sponsors the many HR policies and it also includes reward system that motivates the staff for the commitment for the organization. Pfeiffer also emphasis on the points given below:

Reward skills, every individual’s success, performance of the organization, work place fear factor.

‘Best practice’ helps in HRM to achieve the competitive advantage. It is also useful in the implementation of the HR practices with the flexible way, communication methods, training methods as well as the other modern techniques. The HR policies are influenced by the national market and other factors. HR practices are implied for the effectiveness for the performance of business.

Morris, D. (ND) Difference between ‘Best Fit’ and ‘Best Practice’

British airways use the best Human Resource strategies to achieve their set goals. It is working for the people effectiveness with the help of HR practices. After having the bitter experience in the past, it has a high standard in terms of performances and has excellent customer services. They are now working in the min criteria’s: shared services, specialized area of expertise. The different strategies used by British Airways are as under:

Firstly, British Airways has risen the retirement age. Also, British Airways adopted the various ways to facilitate the customers. British airways have started a management program from some years to encourage the fastest operational services and decision making process.

Secondly, British airways also have started new pension schemes. Retirement age as mentioned above, is increased by 65 years. Pension rates have increased. It should be proved as an effective way and affordable pay for the future. Pension scheme is established to clear the £ 1 billion past experience insufficiency.

Hrmguide 2010: British Airways Raises Retirement Age

The third is the People Management. British airways managers are trying to know about the two things:

What can be the Better jobs options? And carry out the things for the better job? With these questions they compete with the cost budget with clarification of the mission, objectives and aim of the organizations.

Heller, R. (2006) Thinking managers

The forth one is the Diversity Strategy. British airways strategies consist of the following: age, the people with disability, and flexibility within work, gender equality, no race bar, suppliers diversity, faith and trust and sexual orientation.

An age regulation has a great effect on the business and British airways have developed program for steadiness in the recruitment for the internal and external candidates, successful planning, improve age range.

For the disable people, there is facility of wheel chairs.

Flexible working hours is the important part of the work and always represents change of approach. Flexible hours are very fruitful for the women employees and they become more reliable for the job.

Gender equality is the part of British Airways so that everyone can get the equal opportunity.

Each department of the organization plays unique role. British airways never concerns with the race bar, each people is equal and works in an efficient way that encourage ideas for the growth of the organization.

As British airway is a global company, so it provides job opportunities for individual of all faith.

British airways 2010: diversity strategy

3.0 Self-managed learning, intellectual capital and knowledge management in an organization

3.0.1 Self-managed learning

This approach is concerned about encouraging managers to manage their own learning through available company software or within the laid down framework of the organization. It involves managers:

Negotiating their own objectives, deciding how to achieve these objectives, identifying how to measure the objectives, determine how to integrate their learning with organizational needs and each ‘learning set’ may be between five or six managers

3.0.2 Intellectual capital

It describes as the new wealth of organization. Knowledge circulates at every level of business (human, structural, customers). Information therefore is allowed to circulate for members of an organization to benefit, enrich and develop themselves from the intellectual capital of an organization. This approach has helped many organizations.

Intellectual capital simply means the sum of what everybody knows within an organization and therefore gives it a competitive advantage. It is not easy to identify. It is not easy to use this particular form of capital. However, it comes with extra ordinary benefits. In this information age, intellectual capital has become the most important factor of production.

3.0.3 Knowledge management

This is not the accumulation of masses of information. It is an open approach that recognizes learning as the core of the issue.

It involves effective knowledge sharing. Learning what is useful and what is not. How to utilize knowledge for commercial advantage?

Various activities associated with knowledge management are as under:

Capturing information, generating ideas, storing information and distributing information.

3.1 Employer brand

The term ’employer brand’ states what people currently associate with an organization, employer branding has been defined as the sum of a company’s efforts to communicate to existing and prospective staff what makes it a desirable place to work, and the active management of a company’s image as seen through the eyes of its associates and potential hires.

Wikipedia 2010: Employer branding

3.1.1 Employer brand management

Employer brand management expands the scope of this brand intervention beyond communication to incorporate every aspect of the employment experience, and the people management processes and practices (often referred to as ‘touch-points’) that shape the perceptions of existing and prospective employees. In other words, employer brand management addresses the reality of the employment experience and not simply its presentation. By doing so it supports both external recruitment of the right kind of talent sought by an organization to achieve its goals, and the subsequent desire for effective employees.

3.1.2 Becoming an employer of choice

Firstly, the proper training should be given to all the managers before you shift them to the supervisory positions. By doing so, it will cut the employee turnover as well as increase the engagement substantially.

Secondly, you should commit to invest 5-10% of the gross receipts for training a main driver of the retention. You will get appreciation from your staff and also will the customers.

Third is to make your mind on investing time with effort in the crafting superb on boarding programs for the new recruits who starts by their initial contact with organization and also ends at the end of the first year of employment.

Further, you should decide to start to offer a re-orientation to all your long-term employees. You should also think that how much has been changed within last 10 years.

Next is, you should replace the out-of-date authoritarian background with one, you know people matter. This will increase the mutual support and will create a caring inclusion culture.

Another is, commit to become “green” to promote a good commercial citizenship all through the community as well as your industry. You should be a leader within your industry that other companies look for. People would like to work in the companies that “make a difference” in support of the environment along with the community.

The last is to take a decision that in this year; there will be development and implementation of an efficient suggestion program for employee that will rewards employee for giving their great ideas to you.

Amble, B. (2010) Becoming an employer of choice

3.2 mergers, acquisitions, strategic alliances and joint ventures

3.2.1 Merger and Acquisition

This is one entry mode for international expansion. A merger is when two independent companies come together to form one whole company but they still keep their individual names.

Acquisition is another entry mode for international market expansion. This is when a company acquires another ailing or bankrupt company by swallowing up its brand identity.

McClure, B. (2010) Mergers and Acquisitions: Introduction

3.2.2 Strategic alliances and Joint venture

Similarly, Strategic alliances are another form through which organizations expand. The usage of strategic alliances & joint ventures is quickly becoming very popular with the growth of number of the multinational firms. This cooperation could be due to financial alliances, technical alliances or research and development, this strategic alliance is usually expected to produce a product or services that both companies will benefit from. It could also be viewed as a cooperative effort between two or more independent organizations to develop, manufacture or sell products or services. Partner members in strategic alliance can have various benefits in many aspects like: accessibility to unfamiliar and untapped markets, sharing of risk, shared technology as well as the decreased costs.

Joint venture is when two large companies come together to form a third corporate entity with its own brand identity, scope of business, management team, but the ownership equity is share between the two initial comes. Before anything can happen they must first agree.

The ownership strategy formula adopted by the British airways and Spanish airlines is merger and the potential new name of the agreement is international airlines group.

Waggoner, D. (2010) Joint ventures and strategic alliances

4.0 References

Banfield, P. & Kay, R. (2008) Introduction to Human Resource Management, Oxford University Press, New York

Mabey, C. etal.(1998) Human resource management: A strategic introduction, Wiley-Blackwell, Oxford