Discuss about the Management Of Human Resource.
In any organisation there are two basic components that needs management those components are operating system and manpower. Operating system can only work effectively with the help of manpower; therefore the management of human resource is the most important part for the organisation (Alami, Iran, Sohaei, Iran, Berneti, Younesi, Farnia, and Mirzajani, 2015, p.252). Human resource management can be defined as the company which determines different ways how to deal with the people at the workplace. It deals with all the aspects of dealing with the employment relationships of the firm. The HRM function is managerial utilisation of knowledge, capabilities and skills of employees at workplace. It also relates to various theories and concepts relating to the organisational and human resource behaviour (Armstrong and Taylor, 2017, p.3). In the recent dynamic business environment growing importance is seen for the concept of strategic human resource management. Strategic human resource management can be defined as integrating human resource plans and policies with the organisational goals and policies. The term emphasises on the needs of changing environment. According to implications of the term the organisation’s HR strategies and policies should be in context with the overall strategy of the organisation. This strategy should also be responsive to the changes. In the context of strategic human resource management there are two basic factors that influences human resource plans policies and practices. These factors are internal fit and external fit. He internal fit means the internal factors of the organisation and external fit involves external environmental factors such as customer demands, market trends and competition (Waiganjo, Mukulu and Kahiri, 2012, p.63).
Two main elements identified in the Strategic human resource management are HR strategy and business strategy. HR strategy can be explained as where organisation wants to reach and in what direction it should go, in terms of human resource. It a strategy, that emphasizes on achieving goals by optimum utilisation of the workforce. Business strategy can be defined as the long term plan of business in terms of goals and objectives that it wants to achieve. HR strategy can be used as a tool for achieving the overall goals of the organisation (Jalagat, 2016, p.954). The link between HR strategy and business strategy should be established and also interpreted for individual and group levels. There are various other concepts related to strategic human resource management with links to both individual and group levels. One of the key concepts is the concept of strategic performance management. Traditional systems of managing the people failed because the communication from top to bottom was not much effective. There was a mismatch between the strategies of corporate level and the goals of individuals and teams. Strategic performance management has overcome this drawback of traditional systems. Strategic performance management system establishes this missing link. It is important for the top management to identify the competencies of human resource in accordance with the needs of business and also develop a plan of performance evaluation that links the performance of the employees with the strategic goals (Bagga and Srivastava, 2014). In the context of strategic human resource management literature, one of the important theoretical models is behavioural perspective (Bagga and Srivastava, 2014). Behavioural perspective provides a framework to understand in what ways employees make significant contribution to the organisation. This theoretical perspective describes and prescribes links between HRM system, strategy of business and stakeholders in association with the behaviour of the employee (Jackson, 2013, p.66).
It is clear from the above theories and concepts that strategic human resource management is important for an organisation. But there is an on-going debate on the implementation. Application of strategic human resource management in organisation can be done with the two contrasting approaches that are the best fit approach and best practice approach. Best fit approach is also known as contingency model. According to this concept the there is no fixed HR strategy that is suitable for all the organisational contexts. According to this theory the HR strategy that works well for one situation or one organisation may fail in the other. This approach implies that there should be a fit between organisational context and the HR strategy. There should be a well-tailored strategy for different contexts. This approach emphasises on the need of vertical integration, that is contingent or alignment of business strategy and HRM practices. This framework stresses that in a competitive environment, HR policies and practices must establish a perfect fit with the immediate conditions faced by the business (Wilton, 2016).
In late 1980s and early 1990s, Harvard framework provided major insights to the approach. According to this framework, HR strategies should vary on the basis of situational factors. It was argued that this fit between the HR strategy and environment should be followed by the consistency at internal level in HR choices. After Harvard model various models came into existence that supported this approach the models. Dryer and Holder’s model (1988) advised the management that there should be consistency between the three HRM policies, business policies and the external environment. Another model in this regard was given by Baron and Kreps in the year 1999. In this framework mangers are recommended to take into account impact of five forces on the HR policy of the organisation. These forces include workforce, organisation culture, technology used in production, strategy of the organisation and the external environment which included political, legal, economic and social environment. On the basis of research three analytical levels for reviewing contingencies that may have an impact on HRM in the organisation are – societal fit, organisational fit and industrial fit. Societal fit involves varied economic and social factors. It is basically concerned with various nation features that impact HRM. Societal fit implies that HR strategy of the organisation is aligned with the environment factors. It requires integration between HRM and cultural norms & social institutions (Huemann, 2016, p.20). Organisational fit can be described as alignment between HRM practices and other organisational systems (Stahl, Bjorkman and Morris, 2012, p.109). Linking HR practices to competitive strategy of the organisation is a four step process the first is determining the desired competitive strategy, identifying required employee behaviours & skills, formulating supportive HR practices and accessing HR outcomes. Industrial fit involves the factors that are significant for a particular industry. It involves alignment with various implications of the particular industry. Establishing a fit at all the three levels is important for an organisation to effectively implement best fit approach.
Best fit approach offers various advantages. Key advantage derived from this approach is that the outcomes of this approach are more likely to be positive. It is so because they are designed with reference to particular context. This approach enables the organisation to utilise full potential of employees depending upon the different situations. The approach offers various advantages but it is also criticised on various grounds. The main reason for criticism is that it is practically impossible to make changes in the entire HR system to align with the demands of the situation and contingencies that arise. Another major drawback related to this approach is that inconsistency in the HR practices may lead to the inconsistency in the organisational culture.
There are few proven practices that are been identified in researches, according to best practices approach these predefined HRM practices should be applied in the organisation to achieve desired outcomes. This approach emphasises that if organisations apply appropriate practices it affects the organisational performance in a positive way. This approach in human resource management helps to achieve the stated goals of organisation through achieving the desired abilities of employees, motivation, behaviour and results (Sikyr, 2015, p.1405). Some authors argue that whether the practices that are labelled good are actually beneficial to the organisation or not. They argue that the literature on best practices of HRM may seem superficially attractive but it is problematic under different perspectives (Price, 2007, p. 207).
The most influential paper on this approach was given by Huselid. He identified 13 practices as high performance work practices. For the purpose of research he surveyed 968 specialist of HR in US firms and asked them the extent to which their firms use these practices. These practices include quality of work life programmes, employment tests, promotion on merit, extent to which firms use information sharing, formal appraisals, grievance procedures, individual performance based pay, performance incentives, job analysis, attitude surveys, promotion from within, group incentives such as training and profit sharing and the proportion to which firms are selective in the recruitment of employee.
The major critic associated with this approach is that best practice is best for whom. Some practices may be good for the shareholders and executive board but may not serve the interest of customers and environmentalist. Some practices may seem best or good for mangers but not for the labours. Some practices may bring out the positive corporate returns but on the other hand may not serve the interest of workers. One best practice cannot serve the interest of all the parties at one time.There will always be a problem of conflicting interest in the application of best fit approach. This approach emphasises that the same practices of HRM, if applied consistently and collectively will always result in providing better outcomes. It ignores the nature of situation and organisation and believes that all the organisations can be benefited from the same set of recognised HRM practices (humdyn, 2017). It is argued that the organisations will gain advantage and improvements in the performance of the organisation, if they identify and implement the set of best HRM practices. There is abundant literature that supports this approach but various authors have criticised this approach. The major criticism is about there are conflicting views about determining the set of ideal practices. It is very difficult to determine the ideal set of practices for different organisations some emphasise on high performance practices while others determined high involvement and high commitment practices as the set of ideal practices (Wisdom, 2017).Another drawback associated with this theory is that there is only one way to reach a particular objective. This may seem simplistic but sometimes turns out misleading. This approach only gives an idea about the outcomes, it does not guarantee outcomes. The outcomes from this approach can be unintended or unhelpful for the organisation (Banfield and Kay, 2012, p.26).
The concept of best fit and best practice is clear from the above discussion. Now question of choosing between the best practice and best fit becomes more difficult. Each approach has its own pro’s and corns. Organisation in today’s era deals in a dynamic business environment and different product markets. But contingency models basically rely on link establishment between static variables. In addition to this HR techniques of similar kind may be perceived in dissimilar ways (Truss, Mankin and Kelliher, 2012, p.99). From the view of dynamic business environment best fit approach seems more useful and appropriate for the organisation. It is because the changes in the environment and functioning can easily be dealt with. The HR strategies, policies and practices will be with regard to a particular scenario. Today the firms usually go for this approach because they want to arrive at immediate solution to the problem. But this does not mean the best practice approach can be ignored. The value can also be extracted from this approach. The firms can apply this approach in generalised and superficial matters. This will save their time and resources for formulating HR policies and practices. Although it is agreed that the best fit is the most appropriate approach for the organisations in today’s scenario but best practice approach can also turn out useful in some situations. The fact cannot be neglected that the best practices or the ideal set of practices are based on experimentations on practical situations for years. It is important for the organisation to differentiate the layers of different levels that are undermining in HRM. In the case of superficial or surface layers the best practice approach can be applied. For example for deciding the interview procedure, generally advocated approaches can be utilised. For the interior layer or the issues such as management of diverse workforce best fit approach can be applied. There is the need to identify the situations and contexts, in order to determine which approach to use. There should be balance between both the approaches in order to gain competitive advantage. The firm must strive to gain the benefits of both the approaches. If it will rely only on best fit approach it may lead spending lot of time and resources for the much generalised issues. The chosen resource should be cost effective. On the other hand if the firm completely relies on the best practices approach it may fail to deal with the challenges of dynamic business environment. Therefore it is important to attain an optimum balance between best fit and best practice approach.
Managing change in the organisation is not an easy task for human resource management. There are various complex and challenging issues that may arise in an organisation while implementing the change. Human resource strategies help to support changes in the organisation. The challenging issues can be divided into three categories HR strategies, HR processes and practices and HR services & technology (Coopers, 2005).Most important challenges that SHRM face while supporting the change are economic & technological, organisational restructuring, demographics & diversity issues and workforce availability and quality concerns. Major changes in economic and technological environment affected the employment and occupational patterns. Jobs have shifted from manufacturing & agriculture industry to telecommunications and service industry. Use of internet has forced various changes to the organisations. This change has different implications for different organisations. Some organisations need to reduce workforce while others need to hire and retain ne workforce. The challenges regarding demographics & diversity are also increasing. Today’s organisations have workforce from different races, nationalities, caste, regions and ethnicity. The participation of women has increased in the workforce. To manage the changing diversity in the workforce is another major challenge for the workforce. The concern for balancing work and family is another major challenge for the management. In the changing environment there is growing importance of work life balance. Employees have realised the significance of managing the demands for family along with the work. Therefore for HR department it is important to establish work life balance in the routines of employees to reduce employee stress levels. Another challenge that organisations face today is organisational restructuring. This restructuring involves eliminating the different layers of managers, merging with other organisations, closing facilities and outplacing workers. Now a day’s major change seen in the organisation is organisation structure is the flattening of organisation structure. The organisation structures have now become less formal. The reason for this change is to increase productivity, services, quality and reducing the cost. Workforce availability and quality is another major concern for organisations in today’s scenario. Now a day’s organisation a facing the challenge because of workforce deficit and the available workforce lacks skills that are needed to perform the jobs of change nature. Workforce quality deficit and growth in contingent workforce is the major concern for the organisation (gfknowledgecenter, 2017). Various issues related to supporting the change in the organisation can be address by few efforts from the HR manager. Training programmes should be organised to make employees aware about the diverse workforce and the behaviour that they are expected to portray, formulised approach should be adopted for understanding diversity related problems (Shaban, 2016, p.76). To address the challenges it is important that the HR manger should not play the role of administrator; his role should be more strategic in nature. HR manager should prove his existence and effectiveness on regular basis (Singh and Dhawan, 2013).
Thus it can be concluded that human resource is the major element of asset of any organisation that needs to be managed. Organisation will only be able to achieve its objectives if the firm effectively manages its workforce. For managing human resource in the organisation there is an emerging concept called strategic human resource management. It links HR plans and policies to the organisational goals and objectives. It provides a clear direction to reach the goal. Two main element of this concept are HR strategy and business strategy. This concept establishes a link between both of them. One of the major theoretical concepts that can be linked to this approach is the behavioural perspective. This theoretical perspective describes and prescribes links between HRM system, strategy of business and stakeholders in association with the behaviour of the employee. The next question this arises is whether to apply best fit approach of best practice approach in strategic human resource management. After the deep analysis and comparison the arrived solution is to maintain the optimum balance between both the resources. That is using best practice approach for surface level generalised matters and using best fit approach for intense matters. There are also various complex challenges and issues to the strategic management. These issues occur on strategic level, practices & process level and technology & service level. The major challenges related to workforce diversity, workforce deficiency, organisation restructuring etc. These changes can be addressed with the help of effective training programs and strategic role played by the HR manager.
References
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Armstrong, M. and Taylor, S., 2017. Armstrong’s handbook of human resource management practice. Kogan Page Publishers.
Bagga, T. and Srivastava, S., 2014. SHRM: alignment of HR function with business strategy. Strategic HR Review, 13(4/5).
Banfield, P. and Kay, R., 2012. Introduction to human resource management. Oxford University Press.
Coopers, P.W., 2005. Human Resources management strategies to support organizational changes. Survey for the 44th meeting of the Directors general responsible for Public Administration of the EU member states, viewed on 4 August 2017 from https://www.eupan.eu/files/repository/HRManagement1.pdf
gfknowledgecenter, 2017. Changing Nature of Human Resource Management, viewed on 4 August 2017 from https://gfknowledgecenter.org/PDF_files/Human-Resource-Management.pdf
Huemann, M., 2016. Human Resource Management in the Project-Oriented Organization: Towards a Viable System for Project Personnel. Routledge
Humdyn, 2017. Strategic human resource management an overview of HR strategy perspectives, viewed on 4 August 2017 from https://www.humdyn.co.uk/downloads/SHRM%20UNPLUGGED.pdf
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Jalagat, R. C., 2016. A critical review of strategic human resource management and organizational performance. Global Journal of Advanced research, 3(10), pp.953 – 958.
Price, A., 2007. Human resource management in a business context. Cengage Learning EMEA.
Shaban, A., 2016. Managing and Leading a Diverse Workforce: One of the Main Challenges in Management. Procedia-Social and Behavioral Sciences, 230, pp.76-84.
Sikyr, M., 2015. Best practice approach to human resource management .Best practice approach to human resource management. The 9th International Days of Statistics and Economics, Prague, viewed on 4 August 2017 from https://msed.vse.cz/msed_2015/article/63-Sikyr-Martin-paper.pdf
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Business Atmosphere, viewed on 4 August 2017 from https://www.ijmbs.com/32/1/balwinder2.pdf
Stahl, Bjorkman and Morris, 2012. Handbook of Research in International Human Resource Management. Edward Elgar Publishing
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Waiganjo, E.W., Mukulu, E. and Kahiri, J., 2012. Relationship between strategic human resource management and firm performance of Kenya’s corporate organizations. International Journal of Humanities and Social Science, 2(10), pp.62-70.
Wilton, N., 2016. An introduction to human resource management. Sage.
Wisdom, 2017. Best-practice SHRM: high-commitment models , viewed on 4 August 2017 from https://www.wisdomjobs.com/e-university/hr-management-tutorial-69/best-practice-shrm-high-commitment-models-8742.html
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