HRM325 Strategic Human Resource Management

Vertical Alignment in Competitive Business Strategy is a strategy with the help of which an organization attains total control over one or more stages of production and distribution of the company. The companies look for this type strategy in the business if they want to ensure that they have full control over the supply of raw material to produce the goods.  Whereas, Horizontal Integration in Competitive Business Strategy refers to the strategy that initiates the procurement of business functions that are at the similar level of the value chain in same or different industries. This type of strategy is mainly used by the fast-food restaurant chains that merge with companies present in the similar industry in order to capture a greater market share in the international market base (Marginson 2015).

The above mentioned diagram explains the way in which vertical alignment and horizontal integration process is used in an organization. The advantages of vertical alignment states that this process helps in smoothening the supply chain of the company by help the employees to meet the expectations of the customers. Further, it also initiates after sale services efficient and effective. It also helps in reducing the cost to company and increase the entry barriers for new entrants as well  (Taylor, Doherty, and McGraw 2015). However, disadvantage of this process can be seen as a way to lose the core competencies of the company as it only focuses on the new product stream or integration. Further, advantages of horizontal integration are that it helps the business in aligning the HR practices of the company with the competitive strategies. It also helps in increasing the differentiation for the companies and attaining market power as well. Disadvantage of this integration is that the decisions made under this process are rigid due to which organization loses its flexibility to operate in the market (Sikora, and Ferris 2014).

Theoretical Basis and Models of SHRM

Strategic Human Resource Management refers to approach that defines the ways in which an organization will achieve its goals with the help of people by the means of HR strategies and integrated HR policies and practices as well. Further, there are various theories that explain the activities of SHRM in the business. The comparison and critical evaluation of such practices are discussed below:

Best Fit Model

This strategic perspective of the SHRM model is related to the contingency theory as it emphasize on the HR strategies that should be consistent with the context and situations of an organization. According to this approach, best-fit can be achieved only when there is presence of vertical integration between the HR practices and the business as well. There are generally three models used under this process that are strategic configuration, lifecycle and competitive strategy (Kim, and Bae 2017). The lifecycle model explains that an organization takes place between four stage that are start-up, growth, maturity and decline. The competitive strategy model explains that there are three strategic aims of the organization that are innovation, quality and cost leadership for which the company works. The last model that strategic configuration states that the company would be more effective if they adopt strategic configuration policy by aligning the strategies with the business type (Rathi, and Lee 2015).

Best Practice Model

This approach is based on the supposition that the set of best Human Resource Management practices are universal and it is assumed that these practices are best in any kind of situation. It is also assumed that if an organisation adopt such practices then they will become profitable in the target market. Below mentioned is the list of best practices that were produced by Pfeffer (1998a), namely:

• High compensation and contingent on performance
• Selective hiring
• Training to increase skills and motivation of workforce
• Employment security
• Self-managed teams (Jackson, Schuler, and Jiang 2014)

However, this type of practice was attacked by various practitioners stating that a single set of tools and guidelines cannot explain the ways in which all organization should work and succeed. Every business have their circumstances to deal and it is not important that this set of practices will eliminate all those problems in the environment.

Resource Based View

The resources and capabilities of an organization are the most important aspect for formulating strategies in a company. These are the primary aspects on which an organization establishes their identity and frame strategies as well. They are the primary source of profitability in a company. This type of strategy is initiated in the business by understanding the relationship between the profitability, resources, competitive advantage and capabilities of a company (Liu, et. al., 2017).

Specific HR Practices of Performance Management and Reward

The HR practices that should be initiated by companies in context to performance management are discussed below:

Offer training and development programs: Training and development is the best way to help the employees to get settle in an organization. With the help of adequate training program it becomes easy for the employees to understand the requirement of the business work according to th expectations of the company (Paauwe, and Boon 2018).

Offer actionable feedback: actionable feedback will help the employees to realize the areas where they are lacking behind and work on them as well. Feedback will guide the employees to manage their performance and grow as well. Feedback from managers also show that top level management keeps a check of the activities of the employees.

Leverage technology: technology successfully helps the companies in generating greater success in the market without increasing the workload. With the help of technology, employees can easily work in the direction of success (Brewster 2017).

Reward Success: The company should offer additional rewards and benefits to the employee if they deliver more than expected to the company. Rewards can be given in monetary as well as non-monetary form to the employees.

Recommendations

It is very important for the company to initiate a good and attractive performance management system so that customers get attracted to work with the organization.

The above mentioned is the format with which an organization should design its performance management system in an organization. In this process, the company make use of individual development plans, list of accomplishments, 360-degree feedback, supervisor ratings etc. to promote the interest of employees in an organization. Further, the performance management system should also be fair and reliable, it should also establish adequate performance measures to increase the satisfaction level of human resource management of the company (Collings, Wood, and Szamosi 2018). The performance measures should be designed in such a way that it motivates the employees to work and provide them adequate benefits as well. Such a PMS will surely help the companies in the process of SHRM (Kramar 2014). 

Task 2

Introduction

The purpose of this report is to enlighten the reader about different perspectives of employment relations. The report provides brief information about the roles of the actors present in the process of employment relations along with the changing nature of environment as well. More details about the report are discussed below:

Nature and Theoretical Perspectives of Employment Relations

Employment relationship is a authorized link between the employees and employers of an organization. This relationship occurs when group of people performs tasks in an organization together for the purpose of attaining remuneration. Further, below mentioned are the theories of employment relations present in the society:

Unitarist perspective: According to this perspective, the organization is looked as a group of people working together with harmony under one loyal culture. According to this theory, the company presents a mutual cooperation with employees in the society (Boon, et. al., 2018). Paternalism shows a greater degree of requirement for the loyalty of employees in the organization. The management of organizations working according to this process is outstanding as it involves ultimately loyalty in organization along with good mutual relationships as well. Conflicts according to this environment are considered as a disruptive outcome of the communication breakdown and interpersonal friction.

Pluralist perspective: According to this perspective, an organization is divided in various sectional groups and every group has its own legalities, leaders and differential goals as well. Trade union and management are considered as the most important groups present in this type of society. The main role of the management according to this theory is to persuade and coordinate and not enforce and control. Conflict is seen as inevitable and it is resolved using collective bargaining (Lin, and Wu 2014).

Marxist perspective: This perspective is also called radical perspective as it works to disclose the real nature of the capitalist society. This perspective believes that the workplace relations work against the history as it recognizes the inequalities present in the society on a whole. The perspective believes that there is inequality in the power of employment relations in the society. A significant response against the capitalism and for the workers is seen as the trade union.

There is difference among the three perspective as the Unitarist perspective conflicts as a word with a derogatory sense while the Marxist on focus on the conflict between the capitalist and the labour. Only the Pluralistic view pays attention on the approach to resolve conflicts and work effectively in an organization. All the three perspective believes that conflicts in an organisation are inevitable and all the three aspects have their own differential ways to deal with it (Garavan, et. al., 2016).

Roles of the actors within Employment Relationship

Three major actors present in the employment relationship are employer / management, employee / trade union and the state. The role of worker and the trade union is to contribute the necessary skills and efforts for the purpose of producing goods and services. Whereas, it is the role of the employers or management to make provisions and rules for the human resources, finance, raw material along with manufacturing of goods in the society. The role of the government and different agencies is to initiate rules and regulations in the environment for the production of goods and services (Marler, and Parry 2016). Along with this, it is the role of the government to monitor the activities of the employer so that they do not breach and law and provide adequate benefits to the employees in the environment. Each and every actor has a differential role to perform in the process of employment relations that cannot be performed by other. Like, it is duty of the trade union and the employees to contribute their share in the fulfilment of organizational objective. Further, it is the duty of the employer to perform certain actions that are expected by the employees in the society that means that they need to reward the employees for the work that they perform for the organization in the environment. Lastly, the government and the state are expected to deduct taxes and initiate orderliness of returns as well (Ding, and Cai 2018).

Changing Nature of Employment Relations

The current environment in which organizations work is changeable and fluctuating. The companies faces difficulty in managing their business functions in the target market. Resulting to which, it can be said that the external environmental changes affect the internal changes in an organization as well due to which the employment relations also changes. Sometimes the managers might be right at their place while taking decision and sometimes they might be not. Globalization plays a lead role in affecting the employment relations present in an environment. The act of globalization re-shape the whole environment that results in increase in competition, demand for technology etc. (Brewster, Chung, and Sparrow 2016). Resulting to which, the responsibilities of manager also changes due to which they faces issues in conducting the business functions. Some challenges faced by managers are personnel management, widening job scope, cross training and interdepartmental communication. Irregular flow of information and rising cost also acts as a problem for both manager and the employee in completing their personal objectives effectively. With inadequate flow of information inside and outside the organization, the managers faces difficulty in effectively operation their business functions by satisfying all the requirements of the customers along with the employees in the target market. Managing work force diversity also a difficult task considered by the employers in the society. Because of the process of globalization and open market systems, the managements have started facing diversity issues. Along with diversity cultural changes also take place in the organization that increase the level of changes in the process of employment relations (Bratton, and Gold 2017).

The above-mentioned stanzas explain the different aspects due to which changes in the employment relations takes place in an organization. Increasing demand of the employees or the customers may bring a shift in the requirement. The industries have become very fragile due to which changes takes place in the internal process of an organization in a regular basis. In order to manage all the changes and align the interest of the employees in the activities of the organization, changes in employment relations take place in the society (Das, and Kodwani 2018).

Recommendations

Yes, it is true that the aspect of employee participation and employee voice can help the organization to improve the employment relations within an organizational context. As communication is the key to resolve the issues present in an organization, similarly initiation of the process of communication from the side of employees can effectively help the management in resolving conflicts in an organization. Employee participation in the activities of organization will effectively help the management in understand their point of view for different aspect. This activity alone holds the ability to reduce most of the problems in an organization. With the help of employees’ voice, the company will get to know about the opinion of the employees on different aspects as well. Most of all, it can be said that the communication between both the parties will result in enhanced internal environment as well (Backman, Verbeke, and Schulz 2017). If only one party tries to resolve the conflicts in an organization then it is not possible at all but if both the parties attempts to effectively communicate with each other and think for resolution instead of problems then the organizational environment along with employment relations will definitely improve. The management of the organization should ask the employee to offer their piece of advice for the issues present in the organization. The management should create a friendly environment for the employees and should consider their advices as well.

Conclusion

Thus, in the limelight of above mentioned events, the fact should be noted that the report concludes the aspects of strategic human resource management along with the aspects of employment relations in an organisation. The part one of the report evaluates the relation between SHRM with the human resource management practices. It also evaluates different models of SHRM with performance management. The second part of the report covers the employment relation perspective in the society. It also evaluates the role of actors present in this process along with the importance of employee participation in the organization. The report adequately satisfies the requirements of the task.

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