Strategic human resource management is one of the most significant concepts in the field of business organizations and management. According to Bagga, and Srivastava (2014), SHRM promotes a high performance in employees and helps in the management of human capital. Along with that, SHRM is often referred to as the link between human resource management policies and organizational strategic goals, for improved business performance and development of an innovative and competitive organizational culture. Within the organizational setting, SHRM also means accepting and involving the functions of the HR as a strategic partner in the design and implementation of the business strategies. In essence, SHRM is the basic link that aligns HRM with the organizational strategy to achieve the competitive advantage through its workforce. Consistently, we analyze the fictional King Company case to address the current relationships between organizational strategy and HR activities accompanied by three examples and an analysis. We further analyze and discuss the improvements necessary to HRM’s strategic role at the company.
Current Relationship between Organizational Strategy and HR activities at The King Company
In the current competitive and dynamic business world, market stability has become uncertain. The intensity of the competition has increased and firms are trying to defeat one another to emerge the winner and enjoy the benefits of a market leader. The situation calls for managers to be ready to respond to any sudden changes that may happen. Besides, they must be sure the resources and capabilities available for the next step. In the past, product technology and process and stable access to capital sources were considered the most important element for business success in case a business was faced with stiff competition and sudden market changes. Unfortunately, the assets do not provide the necessary sustainability, competitive advantage, and improved performance. According to Lee, Lee, and Wu (2010), organizations now understand that human resources are the most valuable asset with the unequivocal ability to improve business success, boost their competitive advantage and improve overall organizational performance. Consistently, as an important part of human resource strategy, it is important to integrate business strategy with human resource practices. In this case, linking human resource practices and business strategy means integrating decisions about the organization’s workforce with decisions about the expected results (Alharthey, Khalaf, & Rasli, 2011). Additionally, it is important to understand that the relationship between human resource management and an organization’s strategy are aligned through several ways.
A close analysis of the King Company indicates a negative relationship between HR practices and business strategy. More specifically, the departure of Margo Honduras and the employees toasting to her departure followed by a sign of relief reflects a relationship that does not recognize and respond to employee needs, which is an important element of strategic human resource management. The relationship that Margo had with the employees favored some individuals and left others. The practice generally failed to align the most valuable asset – human capital with organizational objectives. Initially, during the tenure of Honduras at King Company, Jake Call – the compensation and benefits manager had set a merit bonus plan as a strategy to accomplish business objectives and control costs. The plan allowed everyone to set their annual performance goals. Unfortunately, Honduras only allowed Call’s staff to set their goals for compensation and benefits, and set for everyone else in the department. The staff expected to carry out the activities were also not allowed to participate in the process. The result was hard feelings and perceived inequity, which demoralized the employees and affected the organization performance. The HR practices do not view or recognize the employees as a key resource for the achievement of competitive advantage. Instead, they view them as just something downstream in the organization strategy. The HR practices fail to respond to the organizational strategic imperatives that target at boosting employee performance through compensation and benefits.
With the exit of Honduras, Alan Grant who was the manager of safety and security was promoted to take over the position of the director in the HR department. King was with the company for one year when he assumed the role of director. The company did not offer any training programs to inform Alan about the human resource department undertakings and operations. The lack of any formal introduction indicates that the organization was not committed to improving employee competency for improved business competitiveness. Nonetheless, despite his experience with the company and the HR department practices, Grant was focused on increasing the wellness activities. His management style was positive and unlike his colleague, he believed in encouragement and responsibility. By doing this, a positive relationship between the HR practices and the organizational strategy was created. The practices of the HR department aligned with the elements of strategic human resource management that focuses on integrating the functions of HR as a strategic partner in the design and implementation of business strategies.
Improvements needed to HRM’s Strategic Role at King
In the current business scenario at King Company, it is important to integrate human resource management policies and practices to turn around the current situation of the company and to ensure future success. Ideally, the wave of globalization has changed the trends and challenges of HRM. Currently, strategic human resource management one of the most important aspects of HRM practices that facilitates implementation of proper and effective policies and helped meet the requirements of employees. At King Company, it is clear that the company has several difficulties facing its human resource policies and practices. Consistently, the organization requires some improvements to ensure its continued survival. The relationship between human resources and organizational management should be improved and fortified. More specifically, the communication between the HR department and employees should be improved. The HR department should also encourage a culture where employees are not discriminated and their input and performance appreciated. The department should develop an open door policy where employees can raise their grievances with the department without fear of being discriminated or ignored. Along with that, it is important for the King Company to understand that even though they have not been affected by the latest downturn in the industry, rivalry can come up from any firm in the market including a new entrant into the market. The current issues being raised by the employees can affect the company’s public image if they continue leaking to the public and damage its current public relations. With a new entrant in the market, having a bad HR relationship with the employees is likely to increase employee turnover, especially if the new company poached some of King’s workforce. The HR should, therefore, address amicably the current situation with its employees, which will also enhance the relationship between human resource practices and organization strategy for increased competitive advantage and future success.
Besides, going through the emails exchanged between the different departments indicate an informal method of communication. Ideally, communication is an important part of any organization and effective communication is one of the ways in which businesses can coordinate their efforts (Isosim, Iancu, & Popescu, 2010). In organizations, communication involves two partners – the management and subordinates or between management. The manager has considerable power and influence over the other participants and their communication represents authority and facts with no speculations. This means communication from a higher rank should be formal and contain no gossip or rumors or any information that might implicate the organization in a legal mitigation. Unfortunately, that is not the case with the communication in King Company. With this information, it is important to restructure the communication structure, always insist on formal communications, and not include information that might implicate the company in a legal battle with its employees.
Human resource management plays a critically significant role in strengthening the relationship between the employees and the organization. SHRM is one of the concepts in the field of business organizations management that helps in linking human resource activities with organizational strategic goals and objectives. The integration of the human resource practices into the organizational strategies centers the HR practices on long-term objectives of the company. In a company such as King, it is evident that the relationship between the human resource and organizational strategies is negative. The HR department does not align with the company goals and objectives, which has affected the company immensely. It is important to build a positive and strong relationship between HR practices with the organizational strategy if the company wants to maintain their competitive advantage and achieve future success. Several recommendations have also been made necessary for HRM strategic role.
Alharthey, ., Khalaf, B., & Rasli, A. (2011). Key role of strategic human resource management (SHRM) in advancing the degree of team learning. African Journal of Business Management, 5(26), 10446-10451.
Bagga, T., & Srivastava, S. (June 03, 2014). SHRM: alignment of HR function with business strategy. Strategic Hr Review, 13(4/5), 1-5.
Isosim, I., Iancu, T., Popescu, G., & Orboi, M. D. (2010). The Impact of Informal Communications in Organizations. Bulletin UASVM Horticulture, 67(2), 125 – 130.
Lee, F. H., Lee, T. Z., & Wu, W. Y. (2010). The relationship between human resource management practices, business strategy, and firm performance: evidence from steel industry in Taiwan. The International Journal of Human Resource Management, 21(9), 1351-1372.
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