Businesses are increasingly looking at human resources as a unique asset that can provide sustained competitive advantage. The changes in the business environment with increasing globalisation, changing demographics of the workforce, increased focus on profitability through growth, technological changes, intellectual capital and the never-ending changes that businesses are undergoing, have led to increased importance of managing human resources (Devanna, Fombrum, & Tichy, 1981; Wright, 1998).
Strategy has always been considered a critical success factor in all areas of human activity. This has been a dominant viewpoint in theory and practice, not only in business enterprises but also in areas such as military action and diplomacy,
…show more content…
Human resource activities are claimed to be related to the performance of a firm. Appelbam et al. (2000) investigated the link between high performance work systems (implemented through HRM) and company performance. The results showed that HRM helped employees in three vital areas; ability, motivation and opportunity.
Human resource (HR) department that is highly administrative and lacks strategic integration fails to provide the competitive advantage needed for survival, thus losing its relevance. Huselid and Becker (1997) found that there were noticeable financial returns for the organisations whose human resource management (HRM) systems have achieved operational excellence and are aligned with business strategic goals. According to Ulrich (1998), one of the four roles of HR personnel is to become strategic business partner. Youndt and Snell (1996) find that firms employing HR practices according to the stated strategy are regarded to have better performance.
How human resource(s) (departments) can contribute to the competitive advantages of the firm has been described thoroughly since the mid-1980s (e.g., Paauwe (2004) for an overview). In particular during the last years HR has had the opportunity to prove, that it can contribute to organizational success through the development of a more strategic role, i.e. delivery of efficient
Human resource departments today have a more distinct, calculated position within organizations, and human resource strategy influences the bottom line. “One of the challenges for HR leaders is convincing executive leadership teams that human capital is one of the most important resources in which the company can invest” (Mayhew, 2014, p.). Subsequently, “this return on investment is an essential part of the argument for including HR as part of an overall business strategy” (Mayhew, 2014, p.). Human resource departments utilize the information given to them from company executives and leaders, coupled with their respective expertise on all things personnel, and they plan and implement staffing concerns for the betterment of the organization. From preparing job analysis, to comparing inventory and forecasting, it is the responsibility of human resources to consider the objectives of an organization and fulfill those goals while operating the specific planning relative to HR.
In today’s competitive and ever changing economy, the challenges of Human Resource Management (HRM) is becoming more demanding of strategic responses to its functions as the new era unfolds. The primary function of human resources is to use strategic goals and objectives in order to improve performance outcomes and develop organisational culture that foster innovation and flexibility. Staffing, training and performance management are important functions of human resources, if carried out effectively the success of a setting becomes imminent.
Today 's fast-paced, competitive business environment has resulted in "rediscovery" of the human resource management function as a group that may be able to enhance firm competitiveness and performance by being "strategic" (Dyer & Kochan, 1995; Ulrich, 1997). Strategic Human Resource Management is a term describing an integrated approach to the development of Human Resource Strategy that will enable the organization to achieve its goals (Armstrong, 2005). Whiles strategy is an action that managers take to attain one or more of the organization’s goals. Strategy presents a general direction set for the company and its various components to achieve a desired state in the future. This results from the detailed
The role of HR in the present scenario has undergone a sea change and its focus is on evolving such functional strategies which enable successful implementation of the major corporate strategies. In a way, HR and corporate strategies function in alignment. Today, HR works towards facilitating and improving the performance of the employees by building a conductive work environment and providing maximum opportunities to
There are many factors that can determine the success of any organisation. It is not only limited to the physical assets such as machinery and technology, however it is the people working within the organisation bringing new ideas and special skills that can make a difference. This essay will investigate the influence of Human Resource Management (HRM) on the wider organisational strategy. A short description of HRM will be followed by a summary of its primary roles. Also, this paper will then critically assess these roles using qualitative examples in an attempt to determine the degree to which HRM really helps or hinders the organisation in achieving its strategic goals.
Human resource management has gained atmost importance in the past few years. Studies have found that there is a relationship between human resources of an organization and performance. From an era of slaves to an era of knowledge resources, People have been regarded differently throughout the years. People are now considered to be energy resources which are directly responsible for the effective working of the organization. An organization with good human resources and its effective management forms an effective organization.
The role of the human resources (HR) department can play a significant role in the success and achievements of an organization. The department, which has evolved from the
But, it is very difficult to imagine measures for these quantities. Hence, in the current state of HR there is a clear rift between what is measured and what needs to be measured. As mentioned in the introduction, the role of HR is no more just administrative. It has a much broader, connected and strategic role to play. But, these statements must be substantiated. The reasons why HR must be considered as a strategic asset must be highlighted. A strategic asset is something difficult to trade or imitate. They are normally a set of scarce, special or even exotic resources and capabilities that bestow a firm its competitive advantage. An unlikely paradox is that the very intangibility of human capital that makes it so difficult to measure and evaluate, also proves to be the one quality that makes it a strategic asset. Consider the difference between being able to align employee efforts with the company’s strategic goals and instead having innovative policies of performance appraisals. The latter is a policy. It is visible to competitors and can be easily copied. The former on the other hand is a strategic move. It is not easy to imitate since it is a very circumstantial effort, which depends on the specific firm, its goals and its people. This proves to be a strategic asset i.e. something that competitors cannot see but that can be utilised to gain a competitive advantage. It is thus
The role of the Human Resource Manager is evolving with the change in competitive market environment and the realization that Human Resource Management must play a more strategic role in the success of an organization. Organizations that do not put their emphasis on attracting and retaining talents may find themselves in dire consequences, as their competitors may be outplaying them in the strategic employment of their human resources. With the increase in competition, locally or globally, organizations must become more adaptable, resilient, agile, and customer-focused to succeed. And within this change in environment, the HR professional has to evolve to become a strategic partner, an employee sponsor or advocate, and a change mentor within organization. As the area of human resource management becomes more strategic and more global it is becoming more important and critical to the organization. While not all companies are recognizing this yet, those that are most effective and most admired, seem to be the ones that are. As a consequence they are doing many things that make
The Department of Human Resources (HR) is viewed by some organizations as an administrative function and they tend to overlook the need and opportunity to align them within the organizations strategic plans and goals (Kokemuller, 2015). The design and
The field of human resources (HR) plays a critical role in the performance and success of organizations. As organizations have become increasingly more complex, the effective management of HR has become even more important. The traditional perception of HR as only an administrative office is no longer valid. Instead, contemporary HR is directly involved with the internal organizational structure, business operations, and variety of functions carried out by employees on a daily basis (Reed & Bogardus, 2012). HR functions impact the organization’s strategic planning, improvement processes, and goal achievement. Six core bodies of knowledge provide the foundation for all of these HR functions. These areas are: strategic
This essay will discuss and analyse Strategic Human Resource strategies and how these strategies impact on an organization 's performance and how literature supports or dispels these claims. This essay will focus specifically on High Performance Work Systems and how they impact the organisation and also the individual employee as “The proponents of Strategic human resource management make bold claims about its relevance to and its positive impact on organisational performance.” This essay will discuss those bold claims and determine how positive it is for the organisation’s performance.
* Two-way linkage allows for HR issues during strategy formulation process; various strategies are made, then presented to HR, HR evaluates each strategy, gives feedback to strategic unit
Certain combinations of human resource management practices lead to superior outcomes for organizations. The HR combination department is at the heart of organizational performance, productivity, turnover, profits, and market value outcomes. Employees are considered a source of non-duplicable and sustainable competitive advantage. By using the combinations in capabilities, resources, relationships and decisions presented by employees, organizations strategically position themselves thus avoiding threats and maximizing opportunities. Organizations and HR combinations managers aim to generate strategic capacity by ensuring that an organization acquires a skilled, committed and motivated workforce. Integration of HR combinations issues, organization performance and HR management systems in organizational strategic processes serve as a solution to business problems. The need to create and manage capabilities and skills and align such capabilities to organizational performance and future needs drives Human Resource Management. As such, the HR department plays a greater role in planning and implementing a coherent approach in designing and managing personnel systems and matching HR activities and policies to the overall business goals.
Growing acceptance of internal resources as sources of competitive advantage brought legitimacy to HR’s assertion that people are strategically important to organisational success. HRM should ideally work to enhance the firm’s competitive position by creating superior human capital skills, experience and knowledge that contribute to firm economic value (Snell and Dean, 1992). Employing the resource-based view, HR effectiveness relates directly to firm-level outcomes, particularly when considering firm context (Wernerfelt, 1984). In the RBV, bundles of resources,