Overview of Amazon
Discuss about the Importance Of Strategic Human Resource Management In Company.
The essay will explain the importance of strategic human resource management in the company as it facilitates to attain the target of the company in an efficient manner. Amazon is a well known company around the world that provides high quality of products and services to many customers in every area. It is developed company that covers a number of countries such as India, France, Canada, Australia, Japan, Brazil, Netherlands, Spain, Germany and so on in which more than 2.3 millions employee provide efficient services to the customers. However, every company has to face some critical situation which may impact the entire operation of the company adversely. In the context of Amazon, two major issues of the company will be recognized which can be the cause of failure in future. The role of strategic human resource management provides emphasis to the need for the strategies and activities of human resource to be initiated within the strategies of the organization. The model of SHRM will be evaluated in an efficient manner that would be assisted to understand the role of it in removing the obstacles of the company
Amazon is well-known company that headquarter is situated on Seattle’s beacon hill, Washington, US. The product lines of the company are in books, music &movies, consumer electronics, foods &households and Clothing & Jewellery, home &garden, Tools &automotive and Computer &office. I am currently working with this company as an Employee relations project manager. The company has many competitors that deal with same work and has the potential to attract a number of employees in an adequate manner. However, the marketing strategy and the financial condition of this company are effective that become the strength of it to protect any kind of challenges. The recent revenue of the company is 17,786 crores USD that shows the high goodwill of the company in the market of e-commerce.
There can be a number of challenges faced by a company that may impact the overall productivity of the entire organization. Two challenges of them will be elaborated below that help company to take appropriate actions before implementing them. These two challenges will tell about to retain the employees as there is a number of competitors available in the market that has the ability to attract skilled employees of the company which would be the biggest loss for the company. In next, increasing concern with life balance management will be defined in the context of maintaining the life balance of employees so that they can perform in a well efficient manner within the organization. Two challenges are defined below:
Major Challenges Faced by Amazon
The competition has increased day by day due to the adoption of latest technology by many companies of e-commerce. It would be the biggest challenge for the company in which the employees of the company can attract towards other companies. The other company can offer them a high salary in comparison to Amazon that being the major cause of losing a skilled employee. It is essential for the company to retain the employees by offering them various benefits factors such as progress platform, increment slab of 6 months and training program where they can attain personal growth. It is required by the company to understand those areas that require change so that the employee can learn new things in the organization. It has been found that the layoffs of Amazon are the outcome of the rapid success of late that saw it end up with too much staff in some units (Ritala, Golnam and Wegmann, 2014). The employees of the company are under pressure to grasp out lower caliber employee and represent more spending discipline (Heskett, 2015). It is vital for the company to find out skilled employees who can be considered as the valuable asset for the company.
The company can face the issue regarding work-life balance as it has been analyzed that the work load in the company is high which can be considered as the over burdened. Overburden is pressuring the number of employees of the company in which they do not make work-life balance. It has been said by some former Amazonians that nurturing bosses are liable for slow separations protected them for the pressure of unmanageable conditions, on the other hand, many said that the effective culture of the company motivated them to remove work-life boundaries (Braun and Peus, 2016). For example, employees of the company are spending most of their time from home at nights and on the weekend. It has been analyzed in against of these statements that one of the employees of the company did not sleep for four days straight (Kantor and Streitfeld, 2015).
It is necessary for the company to identify the appropriate strategy which enhance the productivity of the employee and reduce the impact of potential issues over the company. The appropriate strategy can be competitive advantages, business strategy, corporate culture and external market that can help to increase the productivity of the employees. These strategies help business to emphasize how it defines to do well in its opted market place (Michie and Sheehan, 2005). It is the effective strategy which targets competitive advantages. It helps to decide the way in which the business is ready to create its own environment. Along with that, there is another strategy such as
Strategies to Increase Productivity of Employees
Strategic human resource management is the process in which the manager can design the components of human resource system to be consistent with each other. It is considered as the strategy of the proactive and tactical management of HR processes which aim to deliver short-term strategic goals of the company. It has special alignments of the processes of HR with interim goals of the business. The model of strategic human resource management entails various aspects that support business to attain the objectives of the company. This model will be helpful for the company to increase the efficiency of the employee in a significant manner (Diehl and Bishop, 2017).
Figure 1: SHRM Model
Source: (Schuler and Jackson, 2008).
It is the model that is fit for external fit (vertical integration) and internal fit (horizontal integration) in which vertical integration covers the competitive strategy by which company is able to control the one or more steps in the commodity. In the context of horizontal integration, it can be said that it is the competitive strategy which helps to increase the company value. In the context of reducing the possible chance of potential challenges of the company, the role of SHRM model is huge. With help of management by objectives, the company can retain the employees significantly. There are some major steps of the company such as revise the objectives of the organization, explaining the objectives of the company to the employees, involve the employees in the decision-making process, monitoring the progress of the company in the context of attaining the objectives and the last step of the management by objective is to evaluate the performance and reward them appropriately (Sajeevanie, 2015).
According to this model it is vital for the human resource department of the Amazon to keep focus on retention strategy. There is a huge challenge of increasing employee turnover that may impact the entire organization adversely (Mahapatra, 2018). With the component of performance management and total rewards system, the company will be able to retain the employees (Kramar, 2014). Employees of the Amazon are facing issues regarding less pay, the overburden of work, inefficient hiring techniques and improper training that can increase the high employee turnover in coming years for the company. The strategic human resource management should be implemented within the operation of the company as it facilitates to reduce the chance of attrition rate of the employees.
SHRM Model
Figure 2: Companies with least loyal employees
Source: (Mahapatra, 2018).
The above-mentioned figure shows that Amazon is one of them that payscale to the employees is least. It is vital for the company to improve the pay scale of the employees otherwise due to higher competition in this sector may increase the risk of employee turnover. The strategic human resource model can assist the company to retain employee by following the Harvard Model of HRM in which HR manager of Amazon will focus on assessment, promotion, recruitment, training, and development of the employees (Greve and Song, 2017). According to the Harvard model of SHRM the strategy of human resource focuses on the employee influence, reward system and proper work system which connect the company with business strategy.
There is another issue of increasing concern regarding work-life balance as the employee of the Amazon has overburdened work in which they are unable to manage the proper structure of maintaining work-life balance. However, it has been found from the article that Jeff Bezos does not like the idea of work life balance instead of this he has trust on word harmony to the word balance because balance involves a strict trade-off. According to review of the employees who has more than one year experience with Amazon, it has been found that there is no work life balance because the timing of working is flexible that creates the imbalance in the life of the employees. SHRM model can be helpful for the company to maintain the work life balance so that company cannot face issues of it in future. Resource-based view is the model of SHRM that defines influence on the strategic human resource management of the company (Prajogo, Mena and Nair, 2018).
It is certain that company runs with major two components such as resources and products or services. It is a helpful theory that helps organization to decide remain resources with the organization and link them with the abilities of the Amazon Company in silent way. It is essential for the company to keep the focus on the resources to maintain the work-life balance as this theory explains that Amazon can retain the excellent skills because of the availability of the non-suitable slot of resources in the company. It would be helpful for the company to connect with an economy of the world. The model of SHRM offers organization powerful tools by which company can perform in an efficient manner.
It has been found that the employee of the company has complained about bosses because they are unable to manage the work and the leader of the company does not support them efficiently. It is the major reason that increases within the business and raises the concern of imbalance because employees’ time consumes in making understanding about the software or other services which create work-life imbalance (Heskett, 2015).
it is necessary for the HR department of the company to have the proper system of training and development by which the employees will learn how to manage work with the smart way so that they can manage their work-life balance promptly. HR audits and employee value proposition would be beneficiary for the company because the proper evaluation of the human resource policies, system, and documentation can enhance the awareness of the employee as well as a company (Lussier and Hendon, 2017). Employee value proposition is considered as the set of associations as well as offerings offered by a company in return for the capabilities, skills and experiences an employee carries to the company.
From the above discussion, it can be concluded that Amazon can face issues regarding employee turnover and work-life imbalance in future. The role of SHRM model is efficient in reducing the impact of these issues on the company. There is number of factors that entail in the SHRM Model that is why it is required for the company to focus on each factor of this model to prevent the potential issues. HRM Harvard mode, management by objectives and resource-based view are some models that are a part of SHRM model. The description about them has been elaborated with efficient manner which make clear understanding about the SHRM Model and its use within the operation of the company to reduce the impact of potential concern.
References
Braun, S. and Peus, C., 2016. Crossover of Work-Life Balance Perceptions: Does Authentic Leadership Matter?. Journal of Business Ethics, pp.1-19.
Diehl, K. and Bishop, B., 2017. Strategic Analysis of Amazon Madison Morgan November 16, 2017 MGMT 275.
Greve, H.R. and Song, S.Y., 2017. Amazon Warrior: How a Platform Can Restructure Industry Power and Ecology. In Entrepreneurship, Innovation, and Platforms (pp. 299-335). Emerald Publishing Limited.
Heskett, J. 2015. What’s Wrong With Amazon’s Low-Retention HR Strategy? Available [online] https://hbswk.hbs.edu/item/is-something-wrong-with-amazon-s-low-retention-hr-strategy, Accessed on 15th May, 2018.
Kantor, J. and Streitfeld, D., 2015. Inside Amazon: Wrestling big ideas in a bruising workplace. New York Times, 15, pp.74-80.
Kramar, R., 2014. Beyond strategic human resource management: is sustainable human resource management the next approach?. The International Journal of Human Resource Management, 25(8), pp.1069-1089.
Lussier, R.N. and Hendon, J.R., 2017. Human resource management: Functions, applications, and skill development. Sage publications.
Mahapatra, L. 2018. Amazon.com Has Second Highest Employee Turnover Of All Fortune 500 Companies Available [online] https://www.ibtimes.com/amazoncom-has-second-highest-employee-turnover-all-fortune-500-companies-1361257. Accessed on 15th May, 2018.
Michie, J. and Sheehan, M., 2005. Business strategy, human resources, labour market flexibility and competitive advantage. The International Journal of Human Resource Management, 16(3), pp.445-464.
Prajogo, D., Mena, C. and Nair, A., 2018. The fit between supply chain strategies and practices: A contingency approach and comparative analysis. IEEE Transactions on Engineering Management, 65(1), pp.168-180.
Ritala, P., Golnam, A. and Wegmann, A., 2014. Coopetition-based business models: The case of Amazon. com. Industrial Marketing Management, 43(2), pp.236-249.
Sajeevanie, T.L., 2015. Strategic Human Resource Management and Theoretical Background; A Critical Review Perspective. Proceedings of the Third Asia-Pacific Conference on Global Business, Economics, Finance and Banking (APISSingapore Conference), 17-19 July 2015.
Schuler, R.S. and Jackson, S.E., 2008. Strategic human resource management. John Wiley & Sons.
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