HUMAN RESOURCES IN ORGANISATIONS – hrmt 11011| The relationship between HRM and organisational strategic direction. | Assessment Item 1 – Essay| | Tracey Lee – s0048653| 8/4/2012| This essay discusses the role that HRM plays in the strategic direction of an organisation. | What role does HRM play within the strategic direction of an organisation? Within this essay it will be discussed how the effective management of human resources positively impacts the performance and success and hence direction of an organisation.
This opinion has been developed based on the review of numerous peer reviewed academic journal articles and other relevant resources. In order to be able to discuss this topic several key terms must be defined. So what is HRM? Human Resource Management ‘involves the productive use of people in achieving the organisation’s strategic objectives and the satisfaction of individual employee needs’, Stone (2010, p4). Strategic direction is the strategy used by an organisation which identifies the direction it intends to move and the framework for action by which it intends to get there, Stone (2010, p. 4). The HR manager plays a pivotal role in linking the organisations most valuable resource of humans to the strategic direction of the organisation and does so through the use of strategic HRM policies and practices. Chung et al (2008) proposed that the purpose of HRM is to manage one of an organisation’s most crucial sources, its workforce, to gain and retain sustained competitive advantage in a strategic manner, with its overall corporate strategies.
There are two contrasting approaches to HRM, the instrumental HRM which is the hard line approach to managing human resources and humanistic HRM (soft) which focuses on employee development, collaboration, participation, trust and informed choices, through the integration of HR policies and practices with the organisation’s business strategies, Stone (2010). As the role that HRM performs within an organisation develops so does that of the HR manager. Pritchard (2010) cited the work of Truss et al, 2002 which stated the HR ork covers a broad spectrum of activities and is manifest in a variety or organisational arrangements. There are four key functional roles that a successful organisational HR manager’s must perform as mentioned in the management revue article Getting the HR Message Across by Dorenbosch, Reuver and Sanders (2006) include being a strategic partner, an administrative expert, an employee champion and a change agent. As a strategic partner they have the ability to translate business strategy into action.
Pritchard (2010) investigated how HR practitioners work through, negotiate and manage the tensions of becoming strategic partners and concluded that HR practitioners’ own identity foregrounding was essential. The administrative expert role is the ability to re-engineer through the use of technology, work processes rethinking and redesign as well as the commitment to continuous improvement of all organisational process through HR activities. In order to fulfil the role of employee champion a HR manager needs to be able relate to and meet the needs of employees to enhance organisational performance.
Lastly the HR manager needs to act as a change agent by developing problem-solving communication and influence skills in an ever changing environment where organisations’ strive for competitive advantage. The HR manager is fundamentally responsible for the coordination of the core HRM activities which include the acquisition, development, reward and motivation, maintenance and departure of an organisation’s human resources according to Stone (2010, p. 11).
Therefore HR managers may be responsible for all or some of the following things, industrial and employee relations, position descriptions (PD’s), job performance reviews, organisational staff structures and roles, policy writing and enforcement, and the formulation of HRM strategies, just to name a few. Stone (2010) Given that HRM has now been defined in terms of its purpose, activities and the role of the HR manager it is now important to identify what strategic direction in an organisation is, in order to be able to discuss the role that HRM plays.
Strategic direction is the direction in which an organisation intends to aim for through the use of a strategy which establishes the framework for actions involved in achieving competitive advantage for the organisation and its stakeholders. Chung et al (2008) wrote that an organisations strategy must be appropriate for its resources, environmental circumstances, and core objectives and the processes involved must match the company’s strategic advantage to the business environment as current to the organisation.
By doing so the organisation will achieve one of its corporate strategy objective, this will hold them in a position to effectively and efficiently carry out the organisations mission and objectives. Chung et al 2008 states that an organisations strategic focus will be determined by which of the three types of strategy be it prospector, defender or analyser it places the most emphasis on. So what role does HRM play in the strategic direction of an organisation.
HRM strategies aim according to Stone (2010) to enable the organisation to achieve its strategic objectives by making sure that the business planning processes recognising that people are its ultimate source, ensuring that the those involved in strategic planning are aware of the HR implications of their proposals, that corporate business objectives and the objectives of the HR function are closely matched, that the culture, climate and organisational processes of the business are designed and managed to ensure maximum job performance and calibre of personnel can be achieved and maintained as well as the identification of an organisations core competencies and the human resources necessary to build and maintain those competencies.
The article by Tsai et al (2010) reaffirms my argument that effective Human Resource Management positively effects the strategic direction or an organisation by drawing on its finding based on the associations between organisation performance and employee attitudes. The findings in this article measured employee attitudes based on three measures, overall perceptions of work, job autonomy and the perceived link between reward and performance with the indication being that the better performing organisations workforce held a perceived positive attitude, and that organisational performance can have both a direct and indirect influence on these attitudes.
It is from this that I identified that an organisation’s human resources can be used as a business tool to gain a competitive advantage over a similar organisation by utilising the Human Resource Management within its strategic direction. This in turn supports the article by Wang (2008) in assessing if organisational support promotes citizenship and whether employees view citizenship behaviours as part of their formal role. Thus in conclusion I find based on individual interpretation of several peer reviewed academic journal articles empirical evidence suggests that HRM makes a positive contribution to the strategic direction of an organisation.
Chung et al 2008 cited the argument from Schuler & Jackson, 1987; Wright et al, 1995 that for an organisation to be competent and to achieve higher performance, then a strong fit or match must exist between HRM systems and strategic orientation. It is the HR managers’ function to act as strategic partner, administrative expert, employee champion and change agent to ensure that the organisations HRM systems reflect the organisations strategic direction. Business strategies are formed to achieve a firm’s missions and objectives and that HRM systems are a necessary requirement to formulated and implement these strategies. It is argued that a strong fit/match must exist between Human Resources Management and the strategic direction of a firm in order for it to achieve competency and higher performance.
Human Resource managers facilitate the human resources of an organisation by ensuring that the HRM policies and practices that the organisation implement are aligned with the strategic direction of the organisation and contribute the most effective and efficient use of the human resource. REFERENCE LIST Chung, D. , Jung, H. , Baek, S. and Lee, H. , (2008), “The Impacts of Strategic Orientation and HRM Systems on Firm Performance”, International Journal of Business Strategy, Vol. 8, No. 2, pp. 82-88. Dorenbosch, L. , Reuver, R. and Sanders, K. , (2006), “Getting the HR Message Across: The Linkage between Line – HR Consensus and “Commitment Strength” among Hospital Employees”, Management Revue, Vol. 17, No. 3, pp. 274-291. Pritchard, K. , (2010), “Becoming an HR strategic partner: tales of transition”, Human Resource Management Journal, Vol. 20, No. 2, pp 175-188.
Stone, R 2010, Managing Human Resources, 3rd edn, John Wiley & Sons Australia Ltd, Milton. Truss, C. , Gratton, L. , Hope-Hailey, V. , Stiles, P. and Zaleska, J. , (2002), ‘Paying the piper: choice and constraint in changing HR functional roles’, Human Resource Management Journal, Vol. 12, No. 2, pp. 39-63. Tsai, C. , Edwards, P. and Sengupta, S. , (2010), “The associations between organisational performance, employee attitudes and human resource management practices”, Journal of General Management, Vol. 36, No. 1, pp. 1-20. Wang, M. , (2008), “Does organisational support promote citizenship? The moderating role of market-focused HRM”, The Service Industries Journal, Vol. 30, No. 7, pp. 1077-1095.