Relationship Between Business Strategy And The Human Resource Strategy

Explaining the relationship between business strategy and the human resource strategy

Discuss about the Relationship Between Business Strategy And The Human Resource Strategy.

According to Jackson, Schuler and Jiang (2014, p.3), the emphasis on the plans and strategies of an organisation are provided by the implementation of Strategic Human Resource Management (SHRM). The method used is approachable to understanding the nature of the external environment of an organisation. This approach needs to be explained in a manner so that a link can be maintained between business strategies of HR and plans. It is used to connect the HR objectives with the functions used in an organisation. In the modern world, SHRM and HR are linked to ensure that an organisation receives full productivity. The report highlights these relationships between the two components and analyses the effectiveness of SHRM by using certain models and approaches. For the purpose of the report organisations, various companies in Hong Kong and other international companies have been considered.

In the modern world, HR strategy and business strategy are used simultaneously in organisations. However, there are certain factors that differentiate between the two strategies. For example, HR strategy does not have any set of specific rules that can be used to govern an organisation. However, the application of business strategy fills an organisation with a set of rules that are required for the wellbeing of an organisation. According to Cascio (2018, p.34), business strategy is used to focus on the long-term goals such as expansion into the foreign territory by analysing the external environment factors whereas HR strategy is used to make short-term goals that are required for the immediate success of an organisation. In companies such as Feeding Hong Kong the application of the business strategies can be used for the making long-term goals (Feedinghk.org 2018). To understand the application of HR strategies in a detailed manner, Harvard model can be used.

The five factors that compose the Harvard HRM model have characteristics that provide an effective contribution to an organisation. One of the important aspects of the model is that it connects the strategies made by the HR department with the strategies of business (Hollenbeck and Jamieson 2015, p.370). The sustainability of the business is important to maintain competition in the business. In this regard, it can be said that the Harvard HR model is used in specific areas of an organisation such as recruitment, selection, training and development. One of the primary focuses of human resource management is the reward system of the employees. For example in Methodist College, the use of the Harvard HR model can help in reaching the people in Hong Kong that wants higher education. The application of this term can be based on the investors that want the betterment of an organisation. In the case of McLaren, the reward is earned based on the sale of cars and the promotion of the brand through sports people (Mclaren.com 2018).

Harvard HRM Model

Figure: Harvard HR model

(Source: Beer, Boselie and Brewster, 1984, p.16)

According to Benn, Teo and Martin (2015, p.492), vertical alignment in a business comprises of a competitive strategy that is used by companies to take control over the business. For example, an NGO like Aberdeen Kai-fong Welfare Association can use this strategy to gain control of the factors that affect the company in the external environment. On the other hand, horizontal integration includes acquiring the activities that exist in the same value chain level. This existence can be in different industries as well (Sparrow, Brewster and Chung 2016, p.65). The acquisition of a related business can help a company to gain more popularity in the competitive business environment. For example, Ferrari acquired the Formula One team to gain more recognition in the market. The difference between the two concepts and the application of horizontal integration can be analysed with the help of the Management by Objective (MBO) model.

The objective of performance management is to ensure that the quality of performance of every employee is accessed and the motivated. It can be performed by various methods such as 360-degree appraisal and MBO. The suitable manner in which performance evaluation can be done is by getting the feedback from every staff including the person on whom the appraisal is done. As stated by Sikora and Ferris (2014, p.271) Management by Objective (MBO) is a process that requires the employees and the employers to work together so that they can attain targeted goals. The achievement of the targeted goals can be in the form of applying vertical alignment or horizontal integration. Some of the benefits provided the vertical alignment is the fact that it provides opportunities to companies to reduce the total costs by providing an internal analysis of the business. On the other hand, horizontal integration acquires other organisations and thereby gains the resources and capabilities of the organisations. This helps to increase the potential of the merger organisation and gain recognition in the market. MBO is carried on in an organisation by the application of five major steps (McDonald and Thompson 2016, p.69). These steps are aligned with one another in a systematic form and the best methods that can be used in an organisation are formulated from these steps. It encourages organisations to venture into new markets. Thus, keeping the analysis in mind it can be said that an organisation like Hong Kong Express can apply the horizontal process in the organisation by implementing the MBO practice. This also acts as rewards for the employees that help in maintaining the motivation of the employees. Thus, it can be said that a proper development and learning can take place with the help of the performance appraisal systems adopted in the organisations.

Explaining vertical alignment and horizontal integration

Table: Comparison, evaluation and contrast of theories

(Source: Created by author)

Performance management and rewards are essential to ensure that the employees are motivated and the vision, mission and objectives of an organisation are attained. One of the biggest advantages of managing performance effectively is to increase the efficiency and productivity of an organisation. Hollenbeck and Jamieson (2015, p.370) stated that it is important that organisations continue to evaluate the performances of the employees to retain the talents that exist. In a company like Chi Lin Nunnery, the performance management is done on an annual basis that provides opportunities for the managers to understand the potential of the employees. According to Benn, Teo and Martin (2015, p.492), performance management is linked to the rewards provided by the employers. This is mainly because of the fact that employees are motivated by the rewards as it helps them feel appreciated by the performance. The rewards can be of various types depending upon the mentality of the employees and the position of the organisation. The change management model required to be followed can be Lewin’s change management model. This is because this particular model is simple and consists of only three steps that are required for maintaining changes in an organisation.

Based on the analysis of the effectiveness of performance management, it can be said that it is important for every organisation to maintain the performance management system. This can be done by implementing a 360-degree feedback process that can help in gaining valuable feedbacks from every people in an organisation. In the case of the organisation mentioned above, this process can be used to ensure that the performance management is directly linked to the quality of service and products provided by the organisations. Rewards need to be provided frequently to encourage the employees to continue the effective productivity.

Issues in workplace always remain a concern for every manager. To ensure that the issues are mitigated it is necessary for managers to implement certain theories that can help in mitigating the issues that arise between the people working in the organisations. These theories help in addressing the employment relations that exist in an organisation (Schuler and Jackson 2018, p.123). The theories related to the employment relations are highlighted.

According to Cullinane and Dundon (2014, p.2573), this theory provides the nature of co-dependency that exists between the employees and the employers. According to this theory, organisations need to be integrated and collaborate with every department so that employee relations can be maintained. This theory believes that loyalty and trust among the people in an organisation help in maintaining proper employee relation. The fact that a group of people maintains an organisation that focuses on personal gains lead to the rise of employment issues (Greenwood and Van Buren 2017, p.663). Hence, it is important to refrain from organisational politics so that issues related to the internal matters of organisation can be controlled. In the case of Emmanuel Church, such issues may arise due to the lack of hierarchy as this a Government sector with the free will of people being applied.

Management by objectives (MBO)

The pluralist theory is solely based on the purpose of managing the trade unions. Smith (2014, p.78) stated that this theory supports collective bargaining and helps in recognising the guanine nature of organisations and trade unions. The main function of this theory is to ensure that the communication and coordination between the management and the unions are maintained in a peaceful manner. The theory outlines the role of managers in maintaining collaboration and cordial existence with the trade unions rather than make demands. Williams, Scott and Welch (2016, p.55) stated that organisations could select this particular theory to maintain conflict between the trade unions and the managers. It has been seen that the participation of the stakeholders in the case of bus transport company like MTR Corporation it is important while managing conflicts in an organisation.

According to Kramar (2014, p.1069), the Marxist theory is of the opinion that organisations focus on gaining profit in a manner that compels employees to leave the business. Most organisations such as Sino Land remain corrupted because the reigns of the organisation are on one particular person. This exposes the age gap between the different generations of people in the organisation. Hence, it is necessary that the employees are run by the state government so that the performance of the employees can be analysed and based on it compensation can be provided. As per the Marxist theory, it is necessary to encourage the employees to maintain their efficiency. However, the theory also states that conflict within organisations is necessary for its betterment. Valters (2015, p.67) stated that the Marxist theory focuses on the power relations that exist between the employees and the employers. This is considered as the main cause for the rise of conflict in an organisation.

One of the actors of employment relations are the labour unions. These unions oppose the fact that the employers on the employees use equal bargaining power. This proves the fact that the main reason for the existence of a conflict of interest between employee and employer is the bargaining power imposed on them. According to Keynes (2016, p.345), the representatives of the union ensure that every employee gets fair and equal treatment from the managers. However, sometimes this cannot be done as the wages are set based on the position owned by the people. In this regard, the conflict that arises demands the minimum wages that employees are entitled so that they can be productive in the organisations. Labour unions ensure that the working atmosphere is improved by increasing the productivity of the employees. Godard (2014, p.3) stated that the training and development that is usually a part of the management people are proposed by the labour unions for the effective use of their skills and talents. Any negotiation that needs to be done is made by the labour unions on behalf of the employees.  

Critical evaluation, comparison and contrasting of models and theories of SHRM

The concern of the employees is to ensure that the job performed by them is satisfactory and provides them with the opportunity to display their skills. According to Cascio (2018, p.34), the motivation factor plays a vital role for employees, as they need to ensure that the performances given are well rewarded. Another aim of the employees includes bringing about improvement in the organisations and work in accordance with the legal laws. Thus, the conflict with the employees rises due to the lack of motivational factor in the organisations. It is necessary that the employees need to be aware of the organisational rules and policies and based on it, professionalism need to be maintained. However, it is also necessary for the managers to provide proper wages to the employees based on their performances.

This is a different concept as compared with the labour unions. The staff committee and the representative of the owners association represent these non-union forms. Bach and Bordogna (2016, p.12) stated that because of the less number of influential members in the association, the non-union form is not as effective as the labour unions. However, these forms help in the adoption of more than one strategy that involves employees in the decision-making process. It has also been seen that non-union forms play a crucial role in areas when the management takes control over the labour unions.

As stated by Kliot and Waterman (2015, p.90) employees need to communicate with the managers about the participation and the involvement that they can make. The participation is based on the decision-making process of the employees and the manner in which these decisions can help in improving the performance of the organisation. Analysis has shown that certain factors exist that lead to the rise of conflict in an organisation. These factors include lack of employee motivation, participation, work conditions and payment structure. Effective management of the employees can do the reduction of these issues and by ensuring, that the empowerment is provided based on the work done by the employees (Pollock, Jefferson and Wick 2015, p.44). It is the duty of the managers of an organisation to ensure that the employees maintain innovative ideas so that competence and target related to work can be achieved. The quality of the work, as well as the loyalty of the employees, is measured by the effectiveness of the employees. Thus, certain recommendations can be made that highlights the manner in which employee participation can be maintained. The relationship between the employees can be sustained by arranging conferences, department meeting and training.

HR practices for performance management and rewards

 Based on the analysis of the factors that lead to effective employee relations and the participation of the employees it can be said that the employees need to be treated as the assets of a company. Without skilled labour, it can be difficult for organisations to maintain its performance in the business environment. Managers need to ensure that employee participation is improved by making them make decisions that benefit the organisation. This is because the decision-making ability of employees highlights the fact that the employees are ready to take the responsibility of the organisations. The training and development of the employees need to be such that the employees can be well versed in the situations that may occur while working in the organisations. Furthermore, the rewards and recognition need to increase so that the employees can remain motivated and contribute to providing effective performance to organisations.

Conclusion

Hence, it can be concluded that the theories related to employment relations can prove effective while ensuring that conflict is managed in the organisations. The importance of motivating employees and training them needs to be done so that the effectiveness of organisations can be managed. Communication is important so that the feedback received from the employees and the employers can be maintained for future use. The analysis of the theories states that the use of Marxism theory is best for organisations as it evaluates organisations based on the historical perceptions it possesses. The ways to involve employees in decision-making is mainly done by ensuring that the employees have a positive impact on the overall policies of the organisation. Thus, the manner in which the employee participation is based on the experience of the employees and the position they hold in the organisation.

Reference

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