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The importance of strategic human resource planning
Trace of the historical emergence of human resource management
The importance of strategic human resource planning
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Today, human resources are seen as "the available talents and energies of people who are available to an organization as potential contributors to the creation and realization of the organization's mission, vision, strategy and goals" (Jackson and Schuler, 2000, p. 37).There exist two models that seek to describe what strategy is and how an organization should develop such strategy. The first model known as the Industrial Organization (I/O) model is based on the assumption that firms competing in the same industries are homogenous and emphasizes the external environment as the basis for organizational decision making. The second model, called the Resource Based View contrasts the I/O model by assuming that individual firms are unique and composed of distinct bundle of resources. According to the resource based perspective, firms attempt to develop and exploit distinctive competencies based on the physical, organizational and human capital resources under their control. Eventually, these distinctive competencies may lead to sustainable competitive advantages and superior performance. The emphasis on human capital resources leads to understanding the role of strategic human resource management in gaining competitive advantage.
Wright and McMahan defined Strategic Human Resource Management (SHRM) as "the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals" (1992:298). This field moves away from traditional personnel management' and heads toward the view that employees play an integral role in the development of an organization's competitive advantage and as such carefully planned HR initiatives should be implemented to increase their value to the firm. SHRM conceptualized with Walker's (1978) article, which highlighted the need for linkage between strategic planning and human resource planning. However, it originated with Devanna, Fombrum and Tichy's (1984) article which analyzed in great detail the link between business strategy and HR. The field of SHRM has enjoyed a remarkable ascendancy during the past two decades as both an academic literature and focus of management practice.
While RBV may not have contributed directly to this evolution of SHRM, it did play a major role in its development. The development of SHRM only initiated when HR researchers realized that RBV provided a compelling explanation as to why HR practices led to competitive advantage. RBV highlights the necessity of internal factors and resources as sources of competitive advantage and this conjecture catapulted the great importance of employees (human resource) to the forefront of HR theory. RBV has placed people' on the HR map thereby justifying the concepts laid out by SHRM.
In a competitive economic environment, human resource management has taken more of a strategic, hands-on role in many companies to handle the challenges they face to stay competitive. Companies must find ways to bring in customers and keep good, well-motivated employees on the job. With this in mind, companies that are successful must have sound HRM practices and provide a positive workplace for employees. Looking at the Top 10 Companies to work for, we want to know if HRM practices have an effect on that company being one of the best places to work. We will look at REI, number 9 in the top ten companies to work, to see if Strategic Human Resource Management plays a role in their success.
Lengnick-Hall M.L.; Lengnick-Hall, C.A.; Andrade, L.S.; Drake, B. 2009. “Strategic human resource management: The evolution of the field.” Human Resource Management Review, 19, pp. 64-85.
Ramlall, S., Welch, T., Walter, J., & Tomlinson, D. (2009). Strategic HRM at the Mayo Clinic: A case study. Journal of Human Resources Education, 3(3), 13-35. Retrieved from http://business.troy.edu/jhre/Articles/PDF/3-3/31.pdf
In the 1980’s, the birth of a new concept called ‘Human Resource Management’ was born. This trend comes after an intense period of Taylorisation, Fordism and now, McDonaldisation. HRM came to counter balance these trends and to consider the concept of the Man as a Man and not as a machine. For the last several decades, the interests of companies in "strategic management" have increased in a noteworthy way. This interest in strategic management has resulted in various organizational functions becoming more concerned with their role in the strategic management process. The Human Resource Management (HRM) field has sought to become integrated into the strategic management process through the development of a new discipline referred to as Strategic Resource Management (SHRM). In current literature, the difference between SHRM and HRM is often unclear because of the interconnections linking SHRM to HRM. However, the concepts are slightly different. Thus, we can ask, what is strategic human resource management? What are the main theories and how do they work? What do they take into account and how are they integrated? What are the links between SHRM and organization strategy? In order to answer to these questions, we will precisely define strategic human resource management, followed by a look at the different approaches built by theorists, and finally, we will see the limits between the models and their applications depending on the company’s environment. Discussion Strategic Human Resource Management: definition Strategic human resource management involves the military word ‘strategy’ which is defined by Child in 1972 as "a set of fundamental or critical choices about the ends and means of a business". To be simpler, a strategy is "a statement of what the organization wants to become, where it wants to go and, broadly, how it means to get there." Strategy involves three major key factors: competitive advantages (Porter, 1985; Barney, 1991), distinctive capabilities (Kay, 1999) and the strategic fit (Hofer & Schendel 1986). Strategies must be developed with a relevant purpose to sustain the organizational goals and aims. SHRM is one of the components of the organizational strategies used to sustain the business long-term. SHRM defined as: “all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business. (Schuler, 1992)” or as “the pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals.
In my opinion, HR practices can make positive contributions to organisational performances, because except the unpredictable external environments, human resource management can improve the most factors that affect employees’ performances which finally influence organisational performances in long-term perspectives. This essay is aim to prove human resource practices can positively effect organisational performances based on literature discussion and empirical evidences. The next section briefly brings few negative views about the limitation of HRM related to improving organisational performances. The third section discuss the positive relationship between HR practices and organisational performances are established by applying HRM processes of hiring, selecting, placing employees as well as creating employment relationships within organisations. The final section is going to analyse an example company Mark & Spensers successfully utilised HR practices to improve their organisational performances and created competitive advantages.
Armstrong ( 2010) defined Strategic Human Resource Management (SHRM) as “an approach to making decisions on the intentions and plans of the organisation in the shape of the policies, programmes and practices concerning the employment relationship, resourcing, learning and development, performance management , rewards and employee relationships,” ( p. 115). There is a paradigm shift from a functional role to a tactical one through the strategic management process. SHRM is very important to the effectiveness of my learning organisation because it ensures that the needs of the learning community are met and provides the opportunity for instructional leaders to “add value to the learning community” (Introduction to Human Resource Management, 2012, p.6) while achieving the goals and objectives of the institution.
...an approach of partnership is critical for organizations that want to gain competitive advantages. Butler, Ferris & Napier (1991) state this as, “the more management believes that HRM contributes to corporate success, the more its role will be integrated into the firm’s strategic planning process.” (as cited by Rose & Kumar, 2006, pg. 3). Additionally, organizations that apply energy and resources to HRD benefit from an increase in human capital. López-Cabrales, Real & Valle (2011) state the benefits of building human capital as, “If the company adopts appropriate procedures of personnel management, human capital can be orientated to the achievement of sustainable competitive advantages” (pg. 5).
Introduction A comprehensive Human Resource Management Strategy plays a vital role in the achievement of an organisation’s overall strategic objectives and visibly illustrates that the human resources function fully understands and supports the direction in which the organisation is moving. A comprehensive HRM Strategy will also support other specific strategic objectives undertaken by the marketing, financial, operational and technology departments. In essence, an HRM strategy’s aim should be to capture the ‘people’ part of an organisation and its medium to long-term projection of what it wants to achieve, ensuring that. It employs the right people, those have the right mix of skills, employees show the correct behaviours and attitudes, and employees have the opportunity to be developed the right way.
It seems that HRM is so crucial to the organization, for what it does has nearly covered all aspects of the business – from strategic planning to the training and development, but unfortunately, its importance has not been accepted by everyone. As proposed by Morton, C, Newall, A. & Sparkes, J. (2001) there are three different views of HR function within the...
However you define the activities of management, and whatever the organisational processes are, an essential part of the process of management is that proper attention be given to the Human Resource function. The human element provides a major part in the overall success of the organisation. Therefore there must be an effective human resource function. In the past, most organisations viewed Human Resource Management (HRM) as an element function, that is an activity that is supportive of the task functions and does not normally have any accountability for the performance of a specific end task. Because of the emphasis on analysis and precision there is a tendency for strategists to concentrate on economic data and ignore the way in which human elements and values can influence the implementation of a strategy. 'Economic analysis of strategy fails to recognise the complex role which people play in the evolution of strategy - strategy is also a product of what people want an organisation to do or what they feel the organisation should be like.?(1).
This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).
In the fields of management and business, Strategic Human Resource Management (SHRM) has been a powerful and influential tool in order to motivate employees to perform productively. (Ejim, Esther, 2013). According to Armstrong (2011), SHRM refers to the way that the company use to approach their strategic goals through people with a combination of human resource policy and practices. The purpose of SHRM is to produce strategic capability that the organisation must ensure such that employees are skilled, committed, and well-motivated in order to achieve a sustainable competitive advantage, (Armstrong, 2011). Particularly, the organisation must be able to carefully plan strategic human resource ideas, aimed to increase the productivity.
Noe, Raymond A., John R. Hollenbeck, Barry Gerhart, and Patrick M. Wright. Human Resource Management: Gaining a Competitive Advantage. 7th ed. Boston: McGraw-Hill Irwin, 2010. Print.
Human Resource Management (HRM) is fundamentally another name for personnel management. It is the process of making sure the employees are as creative as they can be. HRM is a way of grouping the range of activities associated with managing people that are variously categorised under employee relations, industrial/labour relations, personnel management and organisational behaviour. Many academic departments where research and teaching in all these areas take place have adopted the title department of human resources management. HRM is a coordinated approach to managing people that seeks to integrate the various personnel activates so that they are compatible with each other. Therefore the key areas of employee resourcing, employee development, employee reward and employee involvement are considered to be interrelated. Policy-making and procedures in one of these areas will have an impact on other areas, therefore human resources management is an approach that takes a holistic view and considers how various areas can be integrated.
Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)