Human Resource Management

This essay is going to discuss the essential role of human resource functions play in effective organisation and the implications of downsizing human resource management (HRM) in an expanding organisation. The essay will also discuss how HRM contributes to the bottom-line of an organisation. An organisation relies on three fundamental resources - financial, material and human (Nankervis, Compton, Baird, Coffey 2011, p. 3). The correct implementation of these resources contributes to the bottom-line of an organisation, helping in succeeding to achieve both short and long term goals. The field of HRM consists of practices that are focus on utilizing employees within an organisation. These practices include selection, train, appraisal and rewards. Human resource management can be defined as an organisations productive interactions with its employees (Nankervis et al, 2011, p.no). There are two forms of HRM. These are referred to as soft and hard approaches. The two strategies involve their own managerial approach. Soft HRM strategy focuses on developmental humanism, this methods is more compatible with business strategies that emphasise quality and product differentiation (Gill and Meyer 2011, p. 5-28). It also involves employees through communication, commitment, empowerment and consultation (Nankervis et al 2011, p. 14). Contrastingly, the hard HRM strategy focuses predominately on utilitarian instrumentalism of employees to achieve broad organisational goals and objectives (Nankervis et al 2011, p. 14). Hard HRM also emphasises on numerical flexibility. This strategy is better suited to organisations that value cost control and competition based primarily on price (Gill and Meyer 2011, p. 5-28). However, critiques of HRM have been raised with concerns regarding HRM direct value to the bottom-line of the organisations and how the faculty improves performance (Andersen,
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Cooper, Zhu 2007, p. 168179). As a result the development of strategic human resource management (SHRM) emerged. Strategic human resource management (SHRM) emerged around the mid-1970 and 2000s as a response to increasing growth of globalisation and is predominately utilized in larger organisations (Nankervis et al 2011, p. 9-129). SHRM is the correlation of human resource management and strategic management (Jain 2005, p. 166-179) and can be defined as the activities that affect the behaviour of employees in their efforts to partake in the pattern of planned HR deployments and activities intended to enable an organisation to achieve its strategic goal (Wright and McMahan 1992, p. 298). SHRM successfully integrates both soft and hard HRM practices in the organisation. This is demonstrated though in The Harvard model of SHRM (Nankervis et al 2011, p.12). The Harvard model HRM illustrates HRM as a broad set of strategic options available in response to the demands of organisations characteristics (Nankervis et al 2011, p.12). These characteristics can include: Stakeholders, business strategy and condition, management philosophy, laws and societal views and unions (Nankervis et al 2011, p12). SHRM can be defined as the effort to align personnel practices and goals with the organisational goals to achieve competitive advantage (Jain 2005, p. 166-179). Research by Huselid (1995) illustrates that internally consistent HRM policies and practices that ensure the employees' collective knowledge, skills and abilities contribute to the achievement of an organization's business objectives and goals. It ensures that the organisation has the right person at the right time at the right place. SHRM achieves this by ensuring that: HRM is completely integrated with the strategy and the strategic needs of the organisation; HR policies fit together both across policy areas and across hierarchies of the organisation; and HR practices are adjusted, accepted, and used by
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line managers and employees as part of their everyday work (Jain 2005, p. 166-179; Ikhlas and Jehad 2011, p. 242-255). The viewpoints outlined by Jain (2005) suggest that SHRM has to adapt to a range of different organisational components, including policies, practices, values, culture, philosophy and history (Jain 2005, p. 166-179; Nankervis, Compton, Baird, Coffey 2011, p. 129; Ikhlas and Jehad 2011, p. 242-255.). The values and culture of organisations have large impacts on human resource (HR) effectiveness in integrating itself into the goals of the organisation
(Min-Huei Chien 2004, p. 289-291). For example, organisations that function with dynamic

environments, people orientated with a positive culture towards HR practices are more likely to adopt and support the integration of HRM policies and practices (Nankervis, et al 2011, p. 129). Strategic HRM links, integrates, and coheres across different levels in organisations (Nankervis, et al 2011, p.17). HRM professionals form close relationships with all levels of management to achieve and promote the bottom line value of the strategic management of an organisations employees (Nankervis, et al 2011, p.17; Jain 2005, p. 166-179). Achieving the integration may include: Job design, recruitment, training, occupational health and safety (OH&S) recruitment and selection, performance management, remuneration and reward and many personnel functions. It is evidenced that integration of HRM has proven to enhance overall performance within an organisation as well as retain high achieving employees (Andersen, Cooper, Zhu 2007, p. 168179). Effective human resource management systems (HRMS) strategic planning can prove to be a profitable investment by reducing and avoiding potential organisational mistakes that could lead to financial loses (Ceriello 1992, p. 102). Potential internal problems that occur when HRM is not implemented within an organisation can include: the inability to attract and retain

qualified employees, complaints, strikes, covert resistance, lack of cohesion in work related activities, low psychological involvement and general lack of motivation from employees (Evens 1986, p.149). The most common external problems an organisation would face would include being disadvantaged to competitors because of lack of knowledge about the environment. Thus, it is especially important to implement SHRM when an organisation is expanding internationally. Without the involvement of HRM organisations are at risk of being disadvantaged to their competitors due to lack of cultural knowledge and the dynamic environments. HRM can help reduce these risks and successfully integrate their company into a country by professionally dealing with barriers that may be encountered such as foreign languages, culture, legal rights and obligations. With HRM management and planning, organisations can gain more control of their future with long term strategic planning, prepare for events likely to occur, anticipate opportunities, create contingency plans and evaluate any threats in their immediate and future environments. Without SHRM, the only alternative is to react to events as they occur (Ceriello 1992, p. 102). Thus, creating uncertainty within the organisation and leaving the organisation with less of a competitive advantage resulting in financial lose and low employee morale. The incorporation of strategic HRM in the strategic planning and decision-making process is a worthwhile investment in all organisations. Research by Huselid (1995) demonstrates that an investment in human resources is a potential source of competitive advantage. Huselid research demonstrates that the implementing of SHRM in all levels of the organisation supports that the implementation of SHRM creates positive outcomes. It also proves that HR policies and practices create high performance work; this thus creates superior market value and profits whist reducing turnover rates.

In conclusion, this essay supports the implementation of strategic human resource management by using theories, research and results to prove that organisations that tailor work practices and policies to their particular strategies and environmental contingencies are able to create higher performance from employees as well as increase profit for the organisation.

References Andersen, K. K., Cooper, B. K. and Zhu, C. J. 2007, The effect of SHRM practices on perceived firm financial performance: Some initial evidence from Australia. Asia Pacific Journal of Human Resources, 45: 168179. doi: 10.1177/1038411107079111 Ceriello, V.R. 1992, "How to Sabotage HRMS Planning", Personnel Journal, vol. 71, no. 10, pp. 102-102. Evans, P.A. 1986, "The Strategic Outcomes of Human Resource Management", Human Resource Management (1986-1998), vol. 25, no. 1, pp. 149-149. Gill, C. & Meyer, D. 2011, "The role and impact of HRM policy", International Journal of Organizational Analysis, vol. 19, no. 1, pp. 5-28. Huselid, M.A. 1995, "The impact of human resource management practices on turnover, productivity, and corporate financial performance", Academy of Management Journal, vol. 38, no. 3, pp. 635-635. Ikhlas, I.A. & Jehad, S.A. 2011, "Strategic Human Resources Management (SHRM) in Jordanian Hotels", International Journal of Business and Management, vol. 6, no. 10, pp. 242-255. Jain, P. 2005, "A comparative analysis of strategic human resource management (SHRM) issues in an organisational context", Library Review, vol. 54, no. 3, p. 166-179. Min-Huei Chien 2004, "A Study to Improve Organizational Performance: A View from SHRM", Journal of American Academy of Business, Cambridge, vol. 4, no. 1, pp. 289291. Nankervis, A., Compton, R., Baird, M., Coffey, J. 2011, Human Resource Management: Strategy and practice. South Melbourne, Vic: Cengage Learning. Wright, P, & McMahan, G 1992, 'Theoretical Perspectives for Strategic Human Resource Management', Journal Of Management, 18, 2, p. 295, Business Source Premier, EBSCOhost, viewed 13 December 2012.