Designing And Implementing An HR Scorecard To Align Corporate And HR Strategies

Corporate and Human Resource Strategies

Discuss about the Designing and Implementing an HR Scorecard.

Corporate Strategy is the overall strategy of a business organisation. It relates to the primary direction path and corporate growth for business organisation. Its scope is relevantly wide and concerned with resource allocation, transfer of resources among businesses and overall management of different portfolio of business. It deals with the uphill task of managing broad range of business portfolio in terms of allocating resources and maximisation of their respective contribution. Corporate Strategy provides a common direction to all business portfolio, ultimately leads to overall corporate objective, mission and vision. Corporate Strategy works as guide to business organisation in planning, organising, implementing and controlling all the aspects of different functions of business management. Alignment between corporate strategy and Human Resource Strategy largely depends on the employee consideration part within the corporate strategy. Any organisation, which is aiming to achieve aspirational corporate goals, must include a serious effort to draft its corporate strategy while considering all human resources aspects. Now-a-days, human resources are treated as human capital and they are the most important asset of an organisation. While corporate strategy focuses on the broadest aspect of organisations, it must include the most important aspect of organisations namely human aspect (Purce, 2014). This report discusses the various aspect of corporate strategy including human resources aspect. Further in this report, a detailed analysis of international aspect of human resources has been discussed. In recent business arena, consideration of key elements of HR strategy is most important while developing corporate strategy. A proper balance between corporate strategy and aspects of human resources can help an organisation to achieve more while making happy human capital. It is very basic that, employees are the ground workers who will make every strategy successful if strategies are well connected and concerned with the aspects of human resources (Chung, 2015). 

Corporate Strategy is a long term strategy which is developed by every organisation to achieve its objectives and business success in long run. It is concerned with top level decision making to guide overall organisation. Human Resource is a management function through which an organisation attracts, hire, train, motivate and maintain people in order to achieve their corporate goals. It is concerned with employees of the organisation. Through human resource planning and strategy, every organisation tries to manage their human resources and employee pool in a better manner to perform and achieve its corporate objectives which is long term. From today’s perspective, deciding about human resource is more strategic as it is taken as an investment decision by organisations.  The concept of employee management within organisation changed in various aspects from personnel management to human resource management and now it is about human resource development. Organisations understood that human resource is the best asset available to achieve the aspiration goals, mission and vision of the organisation. Regarding HR landscape, the scope has broaden more from compensation and benefits management, compliance and safety, recruitment, training and development to employee relations, employee welfare, human resource accounting and many more (Wright, Coff & Moliterno, 2014). In long run, to increase productivity of business, organisation must consider about effective development of human resources through HR strategy.

Need for Alignment of Corporate and HR Strategies

Above discussed meaning of corporate strategy and human resource strategy initiates the thought of need for alignment of corporate and human resource strategy. Bringing selected human resources in an organisation and making them organisation ready, is a costly task as it requires huge investment in terms of money and time. Human Resource Development is not cost free but it a strategic investment decision to be taken by organisations. The long term success and failure of an organisation largely depends on HR strategy of that organisation. In a diversified business organisation, top management must plan about their human resource allocation in between different business portfolios in such a manner that it can deliver the optimum results as intended. Consideration of HR strategies and different elements of HR aspect must be included within corporate strategy for better management and performance of organisation (Sikora & Ferris, 2014). The issue of linking HR strategy with corporate strategy is emerging an impactful decision aspect due to further discussed reasons. First, employee turnover ratio is increasing in business organisations, which is a strategic issue to be considered into top level decision criteria. Employees are recruited and trained and then they start working for organisation. At the time of leaving organisation, the training and recruiting cost incurred by organisation become sunk cost. Outgoing employees are the trained resources who are developed by the business organisation. In such way, a business organisation must think how it can develop its HR strategy linking with its corporate strategy. Second, it has researched and found that a large number of employees leave their company as they feel they are not the part of the company’s journey. Sometimes, employees are unable to integrate themselves with company’s vision, mission and goal. They feel disconnected with corporate strategy due less consideration of employees’ aspect in corporate strategy. Third, when employees become non-productive and get involved in corporate politics; then within organisation, employees’ contribution towards company’s vision decreases. Fourth, for better return on investment, every business organisation must consider an active interaction between human resources executives and c-level executives. This will improve employees satisfaction, job satisfaction and along with better performance. Fifth, a large number of factors influence the much needed alignment between HR strategy and corporate strategy. In some organisation, HR is still considered to be only personnel administration; but HR must be included in corporate strategy and it will enable business organisation in fast forward thinking (Collier & Zheng, 2016).

Factors Influencing the Alignment of Corporate and HR Strategies

Inclusion of HR aspect in corporate strategy became a topic of discussion in every organisation in recent era. Importance of employees in organisation is increasing day to day as organisations are becoming more and more knowledge-driven and technology driven. Organisations became more individualised as focus on human resources increases in manifold. Human Resource function is now centre focus of any business organisation as business organisations understood that people orientation can only contribute to effective objective achievement. With increasing global competition, organisations need to work on sustainable strategies to develop their human capital (Ulrich & Dulebohn, 2015). In today’s business environment when lot of merger and acquisitions are happening, business organisation must take care about their human resources strategies more comprehensively. Pre-merger planning and post-merger integration must be linked with overall corporate strategy. It is important to plan organisation’s HR strategy in accordance with the business environment in which it is operating; also it must consider the strategic issues faced by the organisation while planning for recruitment, selection and deciding about downsizing. In uncertain and volatile market environment, business organisation should adopt suitable HR policies and practices which are well planned in connection with overall corporate strategy. To link corporate strategy with HR strategy, inclusion of HR professional into operational details of organisation is very much needed (Beer et al., 2015). It will increase the business understanding of HR professionals about their own company’s business. In manufacturing business aspect, HR must work to decrease the gap between human resource strategy and real word industrial relations. The integration of corporate strategy and HR strategy can work well when HR people will consider them as knowledge worker and they will facilitate the process of knowledge flow with the organisation. From decade, it has been seen and experienced that HR function is considered as support function within organisation, but now HR function is seen and practiced as value creation function within organisation (Kehoe & Wright, 2013).

The above diagram shows and explains that how HR strategy can be aligned with corporate strategy and business strategy. While considering corporate strategy at very top level, it can influence HR performance at the bottom level.

While companies are expanding their operation in different countries, then it is necessary to consider the international aspect of HR manager in detail for the benefit of overall organisation. Companies which are having their offices in different countries and being international, transnational, global and multinational company; face more complicated and multidimensional aspect as compared to companies operating in one country only. HR aspect of a global company must handle different global HR issues and challenges such as deployment, knowledgebase sharing and innovation dissemination and development of global talent pool. When global workforce increases, aligning HR concerns also increase (Sparrow, Brewster & Chung, 2016).

Inclusion of HR Aspect in Corporate Strategy

HR should plan effective about deployment strategy of company. Human Resource strategy must focus on getting appropriate human skills and placing at right place irrespective of diversified geographical location. Human Resource Strategy must consider the fact that within the organisation, accumulated knowledge base must be well shared among the employees and innovation dissemination must be practised whenever it is required. An effective approach of developing talent pool in a global organisation must be well adopted by Human Resource strategy. Developing global talent pool is much needed aspect as it will help organisation to accomplish its goals and objectives in efficient manner (Sparrow, Brewster & Chung, 2016).  

Cultural aspects are having wide ranging impact on HR policies. HR policies must be designed and implemented in accordance with different country specific cultural aspect. Relationship between employees and managers, power and authority relationship, individual consideration, group dynamics and workforce diversity are directly and indirectly impacted differently in different cultural context. HR strategy must be implemented in consideration with specific detailed oriented approach as employees are defined by their culture in individual aspect. Local cultural norms are to be taken into consideration while designing HR strategy in different cultural context. Employees understanding, needs and expectations are defined and influenced by their respective social cultural groups. It is an important decision consideration from HR aspect while planning for HR strategy in a new country, HR professional must study and understand about local social culture and cultural groups (Vaiman & Brewster, 2015).

Inter-country differences in economic aspect make HR strategies more complicated. HR must consider various aspects of prevailing economic factors such as employment rate, productivity index, availability of workforce, cost of labour and various aspects of industrial relations. Labour cost differences can influence the decisions regarding performance based pay and in turn it can impact the efficiency of human resources. Relationship between employer, human resources and work union impacts the productivity matrix of any organisation operating in different countries (Welch & Björkman, 2015).

In International aspect, HR manager must strategically plan out different key elements of Human Resources impacting the overall performance of the organisation. This aspect becomes more crucial in case the organisation operates in different countries. Human Resource Management basically includes a process of recruitment, selection, training, development, performance management, compensation management, reward management and career management. While recruiting in an international organisation, then it became as a strategic approach and firms need to decide between centralised or decentralised recruitment strategies depends on required effectiveness (Brewster, Mayrhofer & Smale, 2016). Employment testing is also important to consider. In International context, employees must be screened through different stress, behavioural, situational and job-related interviews. Back ground check and final evaluation of candidates in term of skills, experiences, aptitude and personality must be done to increase the effectiveness of selection procedure. Employees should be introduced to organisation in an effective manner through well-planned new hire orientation program. It is the HR department’s responsibility to identify training needs time to time as per job requirements. Implementation of fair and effective performance management and reward management can efficiently increase the motivation of employees across the organisation. Career Management practices, HR’s suggestions about career development can create an effective employee relation practice within the organisation (Festing et al., 2013). In an International company, HR manager must manage host country nationals, parent country nationals and third country national in such a manner that they should feel like treated as one employee group within the organisation. In particular HR manager should draft and implement a proper leave policy, employee benefits programs in relevance with country specific considerations (Shaw, Park & Kim, 2013).

Importance of Sustainable HR Policies

In conclusion it can be said that with increasing focus on international business, functions of HR have broadened in its scope. HR strategy of any organisation should help it to achieve sustainable growth and help it to nurture good employee relations across the organisation irrespective of inter-country presence (Story et al., 2014).

References

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Brewster, C., Mayrhofer, W., & Smale, A. (2016). Crossing the streams: HRM in multinational enterprises and comparative HRM. Human Resource Management Review, 26(4), 285-297.

Chung, C. (2015). The Conceptualization of Global Integration and Local Responsiveness in International HRM Research: A Review and Directions for Future Research. Discussion Paper JHD-2015-02, Henley Business School.

Collier, D., & Zheng, H. (2016). What are some Effective HR Measures that can be Built out of Existing HR or Business Strategies to Measure the Impact and Success of HR Intervention?.

Festing, M., Budhwar, P. S., Cascio, W., Dowling, P. J., & Scullion, H. (2013). Current issues in International HRM: Alternative forms of assignments, careers and talent management in a global context. German Journal of Human Resource Management, 27(3), 161-166.

Kehoe, R. R., & Wright, P. M. (2013). The impact of high-performance human resource practices on employees’ attitudes and behaviors. Journal of management, 39(2), 366-391.

Purce, J. (2014). The impact of corporate strategy on human resource management. New Perspectives on Human Resource Management (Routledge Revivals), 67.

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Sikora, D. M., & Ferris, G. R. (2014). Strategic human resource practice implementation: The critical role of line management. Human Resource Management Review, 24(3), 271-281.

Sparrow, P., Brewster, C., & Chung, C. (2016). Globalizing human resource management. Routledge.

Story, J. S., Barbuto, J. E., Luthans, F., & Bovaird, J. A. (2014). Meeting the challenges of effective international HRM: Analysis of the antecedents of global mindset. Human Resource Management, 53(1), 131-155.

Ulrich, D., & Dulebohn, J. H. (2015). Are we there yet? What’s next for HR?. Human Resource Management Review, 25(2), 188-204.

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