The Relationship Between Human Resource Practices And Business Strategy In A Business Organization

The relationship between human resource practices and a company’s business strategy are aligned in many ways. The ultimate goal of the alignment is to use human capital as instrument to maximize the organization assets for the benefit of the stakeholders. Below are some of the relationship between human resource practices and business strategy.

STRATEGIC HUMAN RESOURCE MANAGEMENT

Human resource practices create the process for the development of employees’ knowledge and the skill-set across the organization to promote its core competencies that support and maintain its competitive advantage in the industry. The term “strategic HRM” is the new template in the management of modern organization that is anchored on the concept that the most valuable asset an organization provides itself is HR, since it is the tool that is responsible for the coordination and implementation of other factors of production that spurs corporate performance journals

The business strategy adopts by an organization is meant to showcase how it intend to succeed by using the factors of production at its disposal to build a competitive advantage, strategy-business. Business strategy helps to identify the direction that the organization wishes to go in relation to its environment. Human resource strategies manage human resource so that the goals set by the organization can be achieved. The focus is directed on what the business intentions are as they relate to human resource policies and practices. Therefore, how human resource is spread across the organization’s units and departments, motivated, managed and retained will affect the performance outcome after the business strategy has been implemented. The relationship between business strategy and human resource practices also would determine the organization competitive and performance outcome.

A glimpse into Oya Erdil & Ayse Gunsel’s ‘BUSINESS STRATEGY AND HUMAN RESOURCE STRATEGY- THE INTERACTION’ shows there is a relationship between human resource management practices and an organization business strategy, which also could be referred to as the business environment and organizational development. Another defining aspect of that relationship is the across the board acceptance that an organization’s human resource management practices have a link to the firm’s decision making process, in other words, the HR practices be closely aligned with the strategy of the whole business. While there is not much disagreement as pertaining to the relationship between HR practices and business strategy, there is a tendency not to acknowledge the deeper nature of the relationship. The theory of human resource management opined that should employees be considered and managed as a valued strategic asset, the organization in practice would be able to achieve a competitive advantage, and the outcome will be a superior performance. This again, means managing human resource in such a way that it will correspond to the business strategy, being that the goals and process of each of the strategy profiles are different.

According to Oya Erdil & Ayse Gunsel, this relationship is further entrenched when you look at how human resource practices are selected based on competitive strategy espoused by the organization. An organization that coordinates its business strategy and human resources policies and practices achieve a superior performance outcome than those that do not.

ALIGNING PERFORMANCE MANAGEMENT TO STRATEGY AND CULTURE

As explained by Rob Gray’s ‘Aligning performance management with business strategy,’ some employers could be missing the key factor that links performance management to strategy and culture. For it is an organization’s prevailing culture and practices that will determine the optimum use of its valuable asset (human beings) when its business strategy is aligned with its human resource practices. The right tools are needed if employers are to succeed in aligning their human resource management to its business strategy. The era of using performance review and appraisal as the only tools for performance, management solutions have since been replicated by a complete suite of competency measurement tools. These tools are able to assist employees to understand the means and learning resources through which they can effectively develop their skills and talent. Technology is one of the enablers but needs commitment from top down that is important for a high performance culture.

TALENT MANAGEMENT

Edward E. Lawler lll’s, ‘What should HR Leaders Focus On In 2014’ gives a deep insight into how business entities could achieve a superior outcome for their shareholders. While technology is a valued enabler that spurs performance leading to superior outcome for an organization, another thing that should be a thing of focus for HR is the aspect of talent management that assesses the necessary skills every organization needs to implement its business strategy, the plan for recruitment and the management of critical talent. Even though, talent has long been determined to be important, it is of recent becoming more so given that many businesses are performing knowledge based work that is more complex, and with operations in the global markets. This has led to the situation of performance talent having a great impact on the organization’s bottom line. Google, Amazon, Apple, and other techs and service organizations have done a tremendous job of recruiting and managing people around the world that have the needed critical knowledge based skills. Their talented workforce have been able to perform well, differentiate their companies from competitors across industries which have translated to a pattern of communication that relays their type of employees and the jobs they offer.

INNOVATION

Innovation is another standard of performance management, Innovation.Tools.com, that when effectively coordinated with an organization business objectives lead to a superior performance outcome. When an organization devote a substantial amount of time to innovation and business strategy, and both are valued equally, promoted across the board, and well communicated, a culture would exist naturally which will foster a relationship of the two. The fostered culture creates a top down business objectives that are communicated across the board in the organization, that enable all units to focus in addressing the organization’s short and long-term goals. From then, it becomes the innovators’ task to forge an alignment of their activities in support of the organization’s goals. The various ways to naturally coordinate both camps is the joint development of technology/product, and business road maps that encourage discussion and debate, forging links that guides actions. Successful performance outcome are highlighted through internal business and fairs, using the avenue to raise visibility for long term opportunities.

DIVERSITY

Diversity in an organization plays a significant role in forging a link between performance management and business strategy. There is a business case for diversity in the organization based on the evidence and arguments that both believe that when diversity is leveraged in an organization, it can contribute to the achievement of the company’s goals and priorities. To understand the relevance of diversity to the attainment of business objectives, the type of diversity under consideration has to be relevant to business performance and innovation accaglobal.com

Why Human Resources Training Is Essential For Your Business

In today’s business world proper training in human resources is imperative. Any company with aspirations of success should insist that their managers and supervisors attend HR training. Because managers, especially first-time managers, often lack the skills and problem-solving ability when conflicts arise, they are not equipped with the capability of dealing with them. Far from being a desirable extra this is essential for any forward looking company.

There are three basic skills that human resources training offers managers to help deal with the personnel problems that can come up in the workplace. One of the three challenges those managers and supervisor’s face is conducting a good and compliant interview. Interaction with new staff can be a potential minefield and this is where the real value of those human resources training can brought to the fore.

When reviewing the applications of applicants it is important to be aware of what is appropriate. For example, a question as innocent as “How many children do you have?” is a violation of Equal Employment Opportunity laws. There are skills that supervisors learn in basic human resources training to help them know the questions to ask and hire the right person for the job. If you want the right staff to suit your needs, it is essential to ask the right questions.

Preparation is the best ally that you can have when it comes to finding and hiring good staff and this is another area where good Human resources training can be an asset. Another problem that HR training can help managers solve is the ability to work with others efficiently and effectively. When put into a managerial position, a person is expected to make demands and expectations for others to meet or exceed. Good Human resources training will help you to both find the right staff and use then to their full capacity.

Also, the ability to communicate effectively can be learned in human resources training. This will give the manager not only excellent oral and written communication skills, but also effective listening skills. Communicating well with your staff will help you to know what will enable them to work better and also of any problems that needs your attention.

The third basic fundamental skill taught in HR training is to make your company’s values and goals known to all of your employees, including new hires. Giving your employees a clear idea of the company’s goals and aspirations will give them something to work towards.

Good feedback when they are on their way to achieving those goals will also help to encourage them and let them know that they are making progress. It creates and fosters a positive work environment in which employees can thrive. Human resources training is necessary in a modern business environment if you want to get the best from your employees.

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Human Resources – Strategic Business Partner

Human Resources, with its diverse internal and external customer base, the ability to touch all levels of the organization and the legendary understanding of the organization’s environment could not be more suited for the critical role of a strategic business partner.

In General Electric’s recently published 2008 annual letter to shareholders, the CEO Jeff Immelt stated the following: “…..The secret to all of these dimensions of developing leaders is to have a great team of human resource professionals. Enduring companies must have a passion for people. GE has a great HR team that protects our valuable human assets. I want to give them special recognition this year….” For years, GE has acknowledged the success of Bill Conaty, their Senior Vice President of Corporate Human Resources. Bill Conaty is highly valued for his continued contribution to the organization. His insight and input have been invaluable. In a 2004 article written by Anne Freedman, Conaty himself stated: “I consider my real core competency and my value to the organization as being a human resource leader, but without having the business grounding, I don’t think I would be an effective HR partner.”

Organizations that consider their employees to be the most valuable asset cannot afford to not have human resources functioning in a true strategic business partner role. Human Resource professionals are equipped with the knowledge, skills, and abilities, the talent to partner with senior leadership to not only be involved in the strategic management of the organization but drive the implementation of it. As stated in “The 8 Practices of Exceptional Companies, How Great Organizations Make the Most of Their Human Assets” by Jac Fitz-Enz, “Strategic plans must be laid on a core strategy, a solid wall of values. Core strategies lead to strategic plans, organizational charts, operating plans, quantitative objectives, and ultimately, to specific human behavior and task performance.” Business oriented HR professionals can help design a strategic plan that balances the needs of the organization, its employees, and other stakeholders. It can help align the efforts of the various functions in the organization with the plan’s strategic goals, and it can support those functions by ensuring that they can recruit, develop, and retain the necessary company team members. HR, as strategic business partners should be the drivers of the organizations values thus the drivers of the strategic plan.

HR should be made responsible for owning the leadership and employee development, as well as direct all communication efforts, especially as it relates to the pulse of the employee population. Succession planning is an area that a strategic HR business partner should be involved in. As discussed in “Good to Great” by Jim Collins, having the right people on the bus, the wrong people off the bus, and the right people in the right seats is the key element to the success of any organization – who better than to manage the people process than a strategic HR business partner.

To fulfill a strategic business partner role, HR leaders must understand the organization’s business. In addition to fully understanding the business, HR must understand the environment in which it operates, the competition, and the circumstances that could influence the progress of the organization. HR can no longer focus on its own internal tasks. It must be responsible for ensuring that HR’s strategy, goals and priorities are driven by and aligned with the overall business needs. It must establish key business partnerships with senior management, as well as key figures in other functions within the organization. Although the operational role of HR, the day-to-day tasks required to run an organization are not strategic in nature, the responsibilities must mirror the goals of the organization. There needs to be a more integrated global company-wide process that considers how each of the HR programs can help move the entire organization in the right direction.

In addition to HR increasing its own knowledge of the organization and creating solid partnerships through collaborative communication efforts, increasing its knowledge in other areas is extremely important to being a successful strategic business partner. HR must increase its knowledge of Finance and Accounting, Marketing and Sales, Operations, and Information Technology and hone in on key business skills. Almost every activity in an organization can be referred to as a project. That is why it is important for professionals in HR to improve their project management skills. In addition to project management skills, strategic HR business partners must fully understand the strategic planning process. HR must be able to manage change, perform environmental scanning, and understand the importance of outsourcing and the process associated with outsourcing. Being able to manage technology and measure the effectiveness of all company-wide programs and efforts are equally important. HR should also be playing a vital role in leadership coaching, should be responsible for implementing strategies to become an employer of choice, and should be responsible for leading programs to safe guard your company performance from external elements.

To summarize, Human Resource professionals touch every level and every department in the organization. Due to the involvement across the company, employees at all levels get to know and trust the members of the HR team. Because of HR’s familiarity with the change management process and human capital development, successful companies benefit from having HR fully functioning in a strategic business partner role. If your company is not already doing so, allow Human Resources to be represented in meetings along side other senior leaders. There is not a more suitable functional group within the company to be responsible for leading the development of strategic plans, implementing key tactics, and measuring the organizations success in executing its plan than Human Resources.