Description
Question:
Discuss about the Theoretical Basis Models And Practices Of SHRM.
The relationship between human resource strategy and business strategy are supported in many ways. Business strategy emphasises the competitive advantages and assists to determine the direction in which the business is able to build its own environment. Human resource strategy is a description for making long term plan to attain aims of human resource and human capital management and development within the organization. An organization that synchronizes its business strategy and the policies and practices of human resources attain a better performance result than those that do not.
Vertical integration is the component of the competitive strategy where a company enlarge its business into various steps on the similar path of production. It helps to determine the control over the supply of the raw materials to produce (Prajogo, Mena and Nair, 2018). The example of it can be a produce distribution business and a green grocery. Apple Company is vertically integrated and the most advantageous point of it provides organization to engrave the entire costs by incorporating the value of customers. It is Hardware Company, Retail Company, Software Company and Services Company which makes it vertically integrated. On the other hand, horizontal integration is also a competitive strategy that assists to enhance the company’s value. The organization can expand its business and enter into new market with help of it. Cadbury and Volkswagen are the perfect example of it. Horizontal fit between the HR strategy and the HR functions such as recruitment, performance management, rewards, learning and voice. There is another example of IKEA and Google in which IKEA has adopted vertical strategy and build human resources while Google has adopted horizontal strategy and acquire human resources.
Harvard HRM model is comprised with six components such as stakeholder interest, HRM policy changes, long term results, feedback, HR outcomes and situation factors. It is facilitated to link human resource strategy and business strategy. The Harvard model recognizes the existence of various stakeholders within the organization. The multiple stakeholders involve shareholders such as government, employees and community at large.
It has been shown in this mode that the situational factors and stakeholder interest assist to link human resource strategy with business strategy. Human resource strategies help to attain the objectives of the organization. This model highlights the soft side of HRM and the importance of employee within the organization is equivalent with any other shareholders.
The SHRM Competency Model identifies the factor which helps organization to be a successful. It demonstrates the relationship between human resource strategy and business strategy in which it explains the knowledge and competencies for effective practice of HR professional (SHRM, 2016). The centre of the model involves the core competencies of “HR Expertise and practices” comprising Human Resource Development, compensation and advantages, workforce planning and Employee Labour Relations. It is the model that widely used in the business for explaining and assessing competencies within organization by using both hard as well as soffit skills (Redman and Wilkinson, 2009). There are some examples of competencies such as team working, decision making, awareness, leadership, communication and commercial awareness.
Vertical Integration and Horizontal Integration
Management by objectives is the process of attaining the goals of the organization by involving the incorporation of employees and managers. Vertical integration is related to the competitive strategy by which an organization control over various steps in the distribution. There are five steps of management by objectives like changes in the organizational objectives, explaining it to employees in concise manner, stimulate the involvement of the employees in decision making process, monitoring the progress and evaluating the performance and provide rewards and recognition. In the context of horizontal integration, MBO helps many companies to enter into new market. Intel is the company that adopts MBO in its strategy. The manager of Intel provides the directions and set a list of objectives and evaluates the performances. As per the performance, rewards are distinguished to the employee.
Best practice
It is a Universalist approach that increases the connection between organizational performance and HR practices and linked with high commitment management. It is based on the superiority idea of the performance of the organization. This practice will make mutual combination such as compensations and collaboration on the basis of the individual performance (HR ease, e.d).
Best fit
The best fit model emphasizes the importance of HR strategies and organizational strategies. It is necessary that the feature of HR strategies should be compatible with various conditions through operational process. According to Armstrong, (2006), it is necessary for this theory to focus on the needs of the employees and the organization. It has been found that this strategy has various limitations as it is hard to manage the challenges within the organization sue to lack perfection in HR system (Ahimbisibwe, Cavana and Daellenbach, 2015).
Resource based view
The resource based view is the approach that impacts the strategic human resource management of the firm. This approach facilitates to determine remains resources within the organization and link them with the potential of the company in an adequate manner (Wu and Chiu, 2015). It is compulsory that organization deals with resources and products or services and to attain the competitive advantages, organization need to utilize the resources in efficient manner.
It has been found after evaluating the models of SHRM that it provide powerful tools for structuring the process of human resource management. It is not possible to define that which model will be suitable for the organization as each model has different features and quality to manage the workforce but after considering the three models of SHRM, it can be said that the best fit model will be good to work better in comparison of others. It has the quality of entire appeal to HR practioners due to the actual fact that enables it to keep position in the organization.
The goal of performance management system is to improve the effectiveness of the employees. There is a case study of Merrill Lynch who moved away from his traditional performance appraisal system to implement a performance management system (Shiyamala, 2012). It includes three phase of planning, monitoring and reviewing which are mentioned below;
Harvard HRM Model
Phase 1 – Plan
It is considered as the collaborative efforts in which managers and employees involve during which they will review the job description of the employee to verify if it shows the work that the employee is performing at present. The job description should be updated at the time of new responsibilities of employee (HRcouncil, n.d.).
Phase 2 – Monitor
Employee progress and performance must be monitored continuously for a performance management system to be effective. It is vital to recognize the barriers that might prevent employee to accomplish the task within time frame (Dutton and Ragins, 2017). Feedback should be shared on progress relative to the goals.
Phase 3- Review
The performance assessment is a chance to review, highlight and define the performance of employee over the way of the review period. It is necessary for Merrill Lynch to recognize the unseen barriers of the organization that prevent employees to attain the aims. This process facilitates to recognize the gaps between the views of the managers and the employees self-perceptions.
360 degree feedback
It is employee development feedback that comes from managers, colleagues and peers in the organization. It should be accepted by organization as it helps to improve the performance of the employees and the organization continuously and focuses agenda for development. It clarifies the critical performance aspects. It allows open feedback that perceived as more effective, lading to acceptance of results and actions needed.
A reward strategy explains the way of using the reward practices, policies and processes to sustain the delivery of its business strategy. There is an organization like the HK government that adopts of financial approach for reward system while others companies are moving towards a holistic approach to financial as well as non-financial total rewards schemes for encouraging staff and to deliberately align (Zadeh, 2009). The strength and weakness of traditional pay schemes and the new total reward approach are defined below.
Strength and weakness of traditional pay schemes
Traditional pay schemes sets pay level in a narrow term which increase annually with certain percentage as per the performance. There might be 3 to 4 percent increment done annually. The strength of traditional pay scheme is correlated with seniority and based on individual performance. Traditional pay schemes are matter to federal control that sustains consistency of pay scales. The weakness of this system is ineffective approach to judge the performance of the employee. It has less impact over the employee to encourage them (Nordmeyer, 2017).
Strength and weakness of total reward approach
A total reward approach is an effective that includes various benefits and pay. The strength of this reward approach is increasing the employee engagement and retention by motivating them. It helps business to communicate with employees who remove hesitation and meet with various new ideas and views regarding change. The weakness of this approach within the organization is lagging the market due to budgetary constraints (VanOrnum, n.d.). Total reward strategy is adopted by GSK which consists of three elements such as life style benefits (employee assistance, family support, and healthcare), total cash (incentives, salary and bonuses) and saving choices (pension plan, share reward).
SHRM Competency Model
It has been recommended by analyzing the different approach of reward system that total reward approach is beneficial for the organization. Google is a great example of it where employees of it are now more vocal. Google provides huge range of incentives to its employee as per their performance and endeavour to reduce the barriers that could distract its employees from their ability to be top performers.
Development and learning plans should maintain the goals and the benefits of the company and stakeholders. It is necessary for the company to involve needs analysis, design, delivery and evaluation in the process to design learning and development approach to meet performance gaps. It is required for the company to analyze the needs of the organization in an appropriate manner. Remploy is the government funded organization that developed the development and learning strategy from the bottom up which is effective approach. Google is the company that analyze the needs of the employee and provides number of services to its employees such as there are day care and elder care centres, spa and salons etc. design defines that company should design the strategy for developing the encouragement of the employees. Delivery refers the process of coordination with entire strategy of the company. Evaluation is necessary to judge the performance of the employee and the outcomes.
It is vital for the organization to consider the change model while implementing changes in the process of the organization. Kotter’s 8 step change model using a careful step by step model to be successful. The first step of create urgency that focus on develop a sense of urgency. Form a powerful coalition is the step that forces employees towards the change in the process. The vision is created in third step to create the strategy. The vision should be communicated in clear and concise manner. Empowering others to act on the vision and planning for visible performance improvement. Using enhanced credibility to change structures and policies. The last step is building the connections between corporate success and new approaches (Rajan and Ganesan, 2017).
Employee relations refer the relationship between employees and employer that help to make the healthy environment at work. The nature of employee relationship is complex and including various influences. It is vital for the company to have the good employee relationship because conflicts are inevitable in the process (Edwards, 2009). There are so many companies that have good employee relations such as Netflix, Google, southwest airlines and many more. To decrease the prospective for issues to escalate, various companies use collective bargaining, grievance procedures and other ways of employee voices to define different interest.
There are various theories of employee relations such as unitarist theory, pluralist theory, Marxist theory.
Unitarist theory
The unitarist theory emphasises the co-dependency of employers and employee. It has been analyzed that this theory does not in favour of employee relations as it is based on the assumption that organization is the incorporated group with same objectives and aims shared by employees. It is necessary for the organization to keep focus on sustaining the loyalty within the organization. Schools, universities and HK government are some examples of this theory that are integrated group.
Approaches to HRM
Pluralist theory
Pluralist theory centres on the idea of how power is distributed and focuses the purpose of the trade unions and management. It is the belief of it to communicate in an effective manner with employees and focuses on primary functions. It is effective theory to resolve the conflicts within an organization. It indicates that power is distributed among many groups such as unions, professionals and associations (Fugate, Kinicki and Prussia, 2008). Airlines are the example of pluralist theory as it helps to reduce the conflicts and increase the participation of shareholders.
Marxist theory
The Marxist theory focuses on the nature of the society surrounding the organization. It has been assumed by this theory that the organization remains within an entrepreneur society where products are owned privately. The main consideration of this theory is to maintain the employee relations between employee and employer. It encourages employee to promote the efficiency of them. Foxcon electronic company is the example of this theory because it is in constant conflict that reflecting within society especially between the rich and poor.
The role of the actors within the employment relationship is given below:
Stakeholders
The stakeholders are the major actors in employee relations as they try to meet the needs of conflicting of the staff and the board and shareholders. The central and state government impacts and regulates employment relations through laws, agreements, rules and awards of courts. It involves the third parties and tribunal courts. The role of the Board is to meet the needs of the stakeholders and ensure the bottom line is profitable.
Labour union or Non-union form
The labour unions make ensures that the employees should be encouraged in effective manner in which it involves training and development program for employees to get progress. It has been ensured by union representatives that ER provides huge benefits to employee.
Employees
The employees are the major actors in employee relations as the needs of the employees are to enhance the improvement in the condition of their employment. The decision making process is shared by employees of the organization. It is vital for the employees to get aware of the changes in the organization.
The employee relations are changed now and many laws are initiated by Government that being the cause of fewer strikes and lost working days. Age Discrimination in Employment Act of 1967, Americans with Disabilities Act of 1990 and National Labour Relations Act (“NLRA”) in 1935 is some examples of act that are implemented by government to protect the rights of employees as well as employers. It helps to encourage collective bargaining. There are various rights of employees that provide power them to refuse unsafe work and to participate in workplace health and safety activities.
Employee voice is the concepts of employee participation and employee involvement. It refers the involvement in the decision making process of the organization (Morrison, 2011). There are three approaches such as representation, upward and downward communication and consultation. Representation of employee are considered as the part of the formal structure for including them in the decision making process (Miles and Mangold, 2014). Upward communication has the purpose of feedback and it does not occur frequently. Downward communication is the approach to provide the information with relevant structure. Consultations help to communicate about the health and safety process to hear the concerns of others and raise the concerns on the behalf of the company. There are various benefits of employee voice in the organization such as enhance performance by enhanced job motivation and satisfaction. It helps to fulfil needs and personal growth. The organization is also getting benefitted due to employee voice as it increase the productivity of the employee that give better outcomes to the organization.
The participation may fail if line managers are not trained. Employees of the organization are liable on manager and if manager are unable to provide them right guidance about how to accomplish the task or increase the productivity, it may lead the organization into adverse situation (Burris, 2012). As per the case study, Merril Lynch’s organization can grow progressively due to effective participation of employees in decision making process.
Conclusion
It can be concluded that Strategic Human Resource Management is made up of Strategy and Human Resource Management. Performance management has been described as it is the process in which employees and the managers of the organization work together to monitor plan and review the work objective of employee. Along with that it identifies the connection between the employee’s job description and goals of the organization. Various theories of SHRM and employee relations have been described in this assignment to provide better understanding about the concept of them. The case study of Armstrong has been considered and examples of different companies have been given in various strategies.
References
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