The Importance Of An Organisation's HR Strategy On Organisational Performance

INTRODUCTION

Presently, businesses need to face the changing circumstances in the world like the advancement of technological innovation and manufacturing technology, globalization, intensification of customer expectations, and competitive business environments. Hence, it needs a business strategy to sustain changes by incorporating them into business processes (Panwar et al., 2016). Basically, the strategy itself is plans of how your business achieves its objectives and maintains its position in the industry. As stated by Durai, P. (2010), effective alignment of human resource (HR) strategies with business strategies is an essential for an organisation’s success. It is believed that HR strategy improves organisational performance, but there is little or no convincing evidence for this proposition (Huselid, 1995).

In this report will cover the importance of having a close relationship between an organisation’s HR strategy and business strategy along with the difficulty to determine the impact of an organisation’s human resource strategy on organisational performance.

RELATIONSHIP BETWEEN BUSINESS STRATEGY AND HR STRATEGY Dhar, R., L. (2008) asserted that it is important

The organisation size has also become a key factor, where small and medium-sized enterprises (SMEs), which account for 94 percent of all employers in the UK economy, are less likely to using the HR practices, such as sophisticated selection, extensive training, team-working, etc., than larger organisations (Forth et al., 2007). Since there are some companies are not implementing the HR strategy, so it becomes one of the reasons why it is difficult to measure the