The Effect of Strategic Human Resources Management on the Practices - Term Paper Example

?Human Resources Management Table of Contents Introduction 3 3 Review of Pertinent Literatures 5 Organisations’ Examples 8 Unilever plc 8 BT Group plc 12 GlaxoSmithKline plc 15 Conclusion 17 References 18 Introduction Human resources are a key constituent for the management and expansion of the multinational organisations. The dimension of human resources management is used by the organisations for their successful development in the local along with the global context. The growth and expansion of an organisation depends a lot on the human resource department and its performance level. In keeping with the theme of globalisation, the expansion of a business depends largely on the integration of the organisations operations with the prevailing culture of a region. Strategic planning is an essential form for the management of the business in accordance with the derived objectives. The planning helps in deciding the goals of the organisation, making management of resources for the future along with observing whether the structure is aligned to meet the needs of the business (Lawrence, n.d.; Free Courseware Project, 2008). Human resources management is important for recruiting the right person, managing the talent within the organisation and also handling the performance of the management and the employees. This would help the company to progress in the economically volatile marketplace and expand the business in the global market for long-term sustainability. Moreover, the business model used by human resources management to coordinate the design, talent management and many strategies effectively is useful for the purpose of expansion. The HR management takes considerable steps to manage the employees effectively and motivate them which lead to the increase in the organisations’ growth. A proper management style followed within the organisation, along with its effects on the internal and the external environment facilitates a business to expand. Human resources management acts as a mediator which manages the perspective of the employees and the goals of the management by understanding the needs of the organisation for its success. The effectiveness of the HR management will certainly facilitate to retain the talented employees and empower a pool of employees to take up challenging roles and responsibilities which in turn would assist the organisation to achieve its goals regarding expansion in the global market with profit and sustainability (Mohrman, 2007; Tan & Mahoney, 2012; Pearson Education Ltd, 2013). The objective of the study is to evaluate the role played by strategic human resource management in augmenting the responsibility of human resources’ for monitoring the external environment. The implication of the human resource strategies and policies on the organisation is evaluated in lieu of the internal and external contexts. The study evaluates the effect of strategic HRM on the HR management practices of three of the leading organisations based in the United Kingdom namely Unilever plc, BT plc and GlaxoSmithKline plc. The successful implementation and the negative effects of the organisations’ strategic HR management practices are also evaluated in the study Review of Pertinent Literatures According to Schuler and Jackson (2008), “in recent years, the evolution of strategic human resource management has meant that human resource’s responsibility for monitoring the external environment has grown.” The statement is feasible to a certain extent for the effectiveness as the management resources must be capable of understanding the objectives of the people and the organisation. Moreover, it leads to the increase in the effectiveness of the organisational performance. Human resources management of every organisation depends essentially on planning, staffing, performance appraisal, compensation and the retention of labour. As affirmed by Rioux & et. al. (2000), the HR management not only maintains the internal environment but also manages the culture, organisational design, and other activities in accordance with the internal and external environment for the betterment of the organisation by achieving the goals of the employees (Rioux & et. al., 2000). The HRM activities contribute to the business effectiveness as it manages the issues with regard to the employees and the strategies to be implemented for the success of the business. The facet of vertical integration assists in organising the policies of the organisation in alliance with the strategic policies of HR to make the organisation effective. The traditional concepts of benefit packages, bargaining with the union and then evaluating the employees’ performance are no longer followed as they do not meet the management policies of expansion. In the present business paradigm, the HRM strategies depend mainly on the professional and the technical standards in order to evaluate the effectiveness of the policies and the practices and this would be the primary criterion for judgement. The coordination between the management and the employees is one of the main criteria, which is evaluated to get the benefits from the external environment (Schuler & Jackson, 2008; Gratton & Truss, 2003). Using innovative ideas and focusing on using the motivational factors as a part of leadership style affect the organisation and the employees in managing their performance. Employees are the major point of focus wherein the link between the management practices and the employees helps a lot in determining the success or failure of the business. An organisation with a better pool of talented and motivated employees will gain more importance in the business and the global world (2McGraw-Hill Education, n.d.). The effectiveness of the management can be examined through the market response. The better the response the better will be the management structure and the design to derive the effectiveness of the HRM. According to Farnham (2010), managing the rights of the people within the organisation from the unfair and unsafe employee practices is one of the key objectives of strategic human resources management. The legal and regulatory issues are also an effective part of the SHRM policy. It needs to ensure that the internal environment provided to the employees in the organisations meets the ethical and the environment law requisites. The labour pay packages and their performance measurement within the organisation are a matter of significance and the primary objective of the HR professionals. Therefore, it can be affirmed that these factors have both negative and positive effects on the organisation and thus in the recent times they are affecting the external environment as well (Farnham, 2010). Schuler & Jackson (2008) further recognised that the external environment does affect the organisations human resources management system. It influences the approach of the HR towards the management and the related employees. The political aspects of the country, industry dynamics, culture of the country and the economic factors affect the strategic HRM. Thus, it is evaluated that the HRM needs to scan the environment on a regular basis and help the organisation to strategize its policies and practises in accordance with the changing environment. In the words of Schippmann, the most important thing that a strategic modeller can execute is to identify the problem and understand the relevant framework to be made to evaluate the development of the business (Schuler & Jackson, 2008). The HRM needs to understand the broader prospect of the business to be successful by understanding and analysing the environment. To get requisite advantage, the HRM needs to pursue two different approaches in which the generic policies are taken into consideration, which is effective in many other organisations. The organisation with effective strategic human resource management policies wherein the pay is linked to the performance of the employees outperforms the competitors effectively. The policies which are adopted by various organisations are stated as the best policies which are useful for the organisation to have a competitive edge over others (Filippone & et. al., 2012; Pityn & Helmuth, 2007). The external environment is affected only when the policies are adopted in accordance with the business type and its required competitive market. The working culture within the organisation affects the performance of the employees and the management. The performance of the employees is affected significantly on the basis of the motivational factors. The better the performance of the organisation the better will be the outcome of the HRM policies. The aim of the HRM should be to evaluate the mission and vision of the organisation with reference to the external world to gain a competitive edge over others on the basis of the policies and practices. The values of the organisation help in assessing the internal and external environment (McGraw-Hill Education, n.d.; Farnham, 2010). To be effective, the HRM needs to evaluate the business agenda as per the needs of the employees, investors and consumers. Another strategy is to provide better work condition so that the safety of the workers is followed which would help the organisation and the external environment. Moreover, focusing on the green HR policy as a part of the business initiative is effective to maintain the organisation and its competition in the external environment (Farnham, 2010; Kovach, 1996). Organisations’ Examples Unilever plc Unilever plc is multinational company which has a global presence and recognition as a high quality consumer goods provider. It is one of the largest consumer goods companies with its products being supplied in nearly every part of the world. In relation to this context, it has been determined that the operations of the company are depicting a steady growth over the years because of a key focus of the company on ensuring a work culture wherein the same mission and vision are shared by both the organisation and its employees. The vision of the company is to have a clear objective about the future achievements and to provide better services to the people to inspire them in reducing the environmental footprints and increasing the impact of the organisation on the social front. To achieve the vision and objective of the company, the operating model is so designed to deliver the decision on a faster pace (4Unilever, 2013). This model is operated by the leaders to share the profit and loss and expand its operating regions and the categories which are affected by the strategic human resources management. The strategy followed by Unilever’s HRM dimension for the ensuring the leading position of the organisation is to maintain competitive advantage over others and enjoy the long-term sustainability. The effective leadership strategy depends on the behaviour of the external and the internal environments which changes with time. Unilever as a fast moving company has absorbed the leadership strategy into the corporate strategy to deliver proper results to satisfy the consumers throughout the world. Unilever has focussed on the behavioural aspect in order to win the global market. The competency model strategy used by Unilever is “Leadership for Growth Profile” (LGP) which is implemented throughout the world to be effective and get profitability. Moreover, Unilever has changed its leadership strategy in according with the tastes of the people of the region and concentrated upon operating as a “multi-local multinational company.” The strategic HR strategy followed by Unilever makes it most effective in the local as well as the global market as it follows the culture of the market. To meet the external demands and in order to achieve the goals, the organisation in collaboration with the HRM changed its strategy by reducing the product portfolio from 1200 to 400 to create space for the growth in the global market. The importance of the work culture within the organisation is significant as it helps the employees to replicate a winning behaviour in the marketplace through their motivation and frame of mind within the organisation. The strategy to meet the employees’ behaviour is based on restructuring of the organisation, conducting workshops to train the employees and rewarding them on the basis of their performance. These features make them motivated and help them in enhancing their performance to achieve the objectives of the company along with benefiting their own-selves. ‘Leadership For Growth Profile’ is the new policy which enables the employees to perform within the organisation with the commitment to grow keeping in mind the vision and the changing external environment. This strategy not only facilitates to change the behaviour of the employees of Unilever but also enables to alter the management style and their behaviour to achieve the goals. The approach of the management towards their employees is a vital aspect for the company to succeed (International Leadership Association, 2005; Wright, 2013). The recruitment and selection process is an important aspect of human resources professionals as the employees are the main source of the business for its steady survival in the global market. With the adherence to better strategic recruitment process, it has enabled to replicate a prudent management style which in turn has facilitated the company to increase its presence in the external management (Nisen, 2012; Adeel, 2013). The purpose of Unilever is to work in an integrated manner wherein the human resource policies play a vital role to make the people within the organisation to respect each other and achieve the corporate responsibility. The strategic HRM is committed to provide continuous improvement to manage the environment and attain long- term sustainability. This facilitates the company to retain its global market position keeping in mind the changing environment and tastes of the people (3Unilever, 2013). Conclusively, it can be affirmed that such kind of decisive HRM practices are assisting Unilever in providing better dividend to the shareholder as in 2012 the dividend provided was 8% more than the previous year (Unilever plc, 2012). The ability of the HR to meet the volatile environment requirements has been a vital factor to develop the performance of the company. It has been attained through the use of high-end technologies, which has enhanced the speed of production and services. The strategy of recruiting the right person keeps the internal environment of the business better along with upholding the working culture aligned with the values. These strategies help in creating a Virtuous Cycle of Growth as depicted in the diagram. Source: (Unilever plc, 2012) To keep up with the external environmental demands, the HRM is taking steps to manage the leaders and the employees to focus on the performance regarding the reduction in the environmental impact by creating greenhouse gas effect and by saving water by 2020. Furthermore, the growing level of competition has allowed Unilever to come up with a low cost business model along with making proper partnership with the suppliers, improving the eco-efficiency and operational excellence by maintaining the training and development programs within the organisation and by scanning the external environment (Unilever plc, 2012; 3Unilever, 2013). The other key core reason for the success of Unilever is because of the concept of employee engagement wherein the HR encourages and motivates the employees by taking their views in order to maintain the culture of respect and growth in the organisation. The “Global People Survey” conducted by the HR of Unilever helps in determining the level of engagement as it was observed that in 2012 the engagement score was 75% which is an achievement for a company (Unilever plc, 2012). The providence of rewards on the basis of ‘everyday heroes’ makes the employees motivated and more enthusiastic to work which affects the business environment both internally as well as externally. This positive response of the management towards the employees helps in the growth of sales and operating margin. This is depicted through the graphical representation for the year 2012. Source: (Unilever plc, 2012) The growth in the sales and the operating margin depicts the success of Unilever due to the adoption of prudent strategic HRM in the modern world (Unilever plc, 2012). BT Group plc BT Group plc is the leading telecommunication service provider in the United Kingdom. It is one of the foremost telecommunication companies, which has its strong presence in the global market. The company has a strong customer base primarily because of the quality services provided to the customers with efficiency. The organisation has a trading name BT which provides services to the corporates and the customers with a widespread network throughout the world. Due to the growing competition in the market of the UK, the company is analysing the external factors along with the internal factors based on the human resource management strategies. The external environment is making the company to take initiative to meet the technological advancement and innovation to provide better customer services. The objective of BT is to emerge as the “Brand for Business” in the UK by becoming the best provider of services (1BT plc, 2013; 2BT plc, 2013). The purpose of the company is to offer better service to its customers. The expertise of their people is the main reason for the success in creating connections and expansions. Managing the employees has been one of the key attributes of the company, as the growth of the company depends largely on the behaviour of the internal customers. The better implementation of the HRM strategy within the organisation will enhance the life of the people. On the other hand, the external scanning is important as the telecommunication sector depends largely on the external factors to meet the changing customer needs. The aim of the company in accordance with the employees is to provide a better service to the customers based on the individual needs to make the better future, especially in the UK. The HRM assists in managing the demands and needs of the shareholders by ensuring profit and expansion (3BT plc, 2013; Swift, 2012). The HRM strategy implemented facilitates BT in managing the integrity of the company by following the best practices. The ethical approach followed by the management and the employees is the major norm that is upheld to meet the standards of the business in terms of financial reporting and corporate governance. The role of the HR is to provide proper remuneration structure, meet the shareholders’ objective and manage the risks of the business to be effective in the global market. The critical success of the HR in BT is based on the appointment process in which the aim of the HR is to establish a better management team. The choice of the management is critical as HR needs to understand and evaluate the effect of it on the internal customers. The leadership style used and the employees’ objective are to be aligned by the HR for the success and growth of the company in the global market to meet the external environmental necessities. Moreover, the retention of the employees is another aspect of the HRM in BT Group. The need for the retention strategy had been analysed in order to meet the requirements of the legislative consultation and provide best services to the people. The retention of the employees has been a useful strategy to ensure the number of stakeholders who are engaged to the company. Also, the aim of the HRM is to improve employee engagement and communication process to make the business sustainable. The level of commitment of the employees and the management is important for the business to sustain in the external environment (Kelly, 2008; DGAEP, 2005). The code of ethics is an important practise which is to be followed by the business and its employees to maintain transparency in the dealings and honesty in the approach. The strategic HRM is implemented to view that the ethics is being complied by the management and the employees to make the business successful in the global market. The work culture within the organisation is an important aspect in maintaining the ethics and the best practices. The leaders in BT work towards the achievement of total quality, recognition of the performance of the employee and then rewarding them (4BT plc, 2013). The management of the performance by the leaders helps in motivating the employees. The involvement of the employees in the process of decision making makes them feel valued and enhances their services towards the customers and hence increases the profitability of the company. All these internal factors of the HRM are affecting the business. The activeness of HR in managing the team work in various departments has made the company more effective in the global market. The role of the HR is to manage the employees in working as a team along with respecting each other and providing quality services to the customers. Training and development is also an essential part of the HRM mainly in the telecom industry. The review of training is done by the management every three months to evaluate the enhancement of the performance of the employees in order to make a fair judgement. Talent and diversity are the key aspects of the strategic HRM as it helps in enhancing the financial condition of the company by providing better service delivery from the employees. The improvement in the customer service deliverance in BT is depicted through the graph below. Source: (BT Group plc, 2013) The service providence by the employees due to strategic HRM approaches has been replicated from the increase in the proposed divedend from 8.3p to 9.5p which depicts 14% change for the shareholders’ interest (BT Group plc, 2013). GlaxoSmithKline plc GlaxoSmithKline plc is a consumer healthcare company which has a global presence. The mission of the company is to aid the people to live longer. The aim of the company is expand its business, be financially strong and reduce the level of risk from the external and internal factors. The strategy followed by the company on the basis of the HRM is to maintain the ethics and compliance in the global market (1GlaxoSmithKline plc, 2013). The policy followed by the company is strict, as it follows the “Anti-Bribery and Corruption (ABAC) Programme” to maintain the global standards of the employees. The employees are the key assets of the company, the HRM policy believes that the long-term sustainability of the company depends on the people and the culture followed within the organisation (2GlaxoSmithKline plc, 2013). The HR team is dedicated towards promoting a decent and transparent culture within the organisation so that the efficiency of the employees increases. The performance management of the company is done using several tools such as balanced scorecard method. The employees are then rewarded on the basis of their performance which motivates them in following the responsibility towards the people. Moreover, the strategic HRM approach focuses on planning and formulating compensation plans such as incentive and bonus to motivate the employees and make them follow the basic ethics of the business. In the healthcare sector, the HR needs to formulate strategies to enhance the health of the employees. The HR operations of GlaxoSmithKline plc are also responsible for maintaining employee relations with the customers and the management. Diversity in the leadership and equality is the key concepts followed by the company as it helps in exchanging the views and opinions to improve the performance and make expansion planning (GlaxoSmithKline plc, 2012; Hernandez & O'Connor, 2009). One of the main objectives of the HR in the recruitment policy is to attract talented and qualified candidates to meet the global requirements in the healthcare field. The commitment of the leaders towards being transparent, integrated and patient focus exhibits a sense of responsibility of the management and the people towards the external world. Commitment of the employees towards the organisational goal is the reason for the implementation of the HRM policies. The behaviour of the employees is customer driven which focuses on building relationship and maintaining continuous change (GlaxoSmithKline, 2013). The behaviour of the customers and the internal management make the people to follow the ethical norms and refrain from engaging in fraudulent activities in the organisation. The HRM strategy in this sector is very sensitive as it is directly related to the life of the people. The environment health and safety is the key motivational factor which affects the business and its progress (GlaxoSmithKline plc, 2012; GlaxoSmithKline, 2004). The present stock market rate of 52.06 USD exhibits a strong market position for the company primarily owing to the incorporation of efficient HRM strategies (Thomson Reuters, 2013). Conclusion Strategic human resources management in an organisation has attained utmost prominence in the recent years in order to ensure that internal and external contexts are considered while preparing a strategy for growth and progression. The HRM policies are implemented by scanning the external environment in order to attain the market share and profitability for the stakeholders. The importance of the HRM in staffing, employee relations, performance measurements and devising rewards and compensation is the key factors affecting the business (Dhar, 2008). Organisations such as Unilever, BT plc and GlaxoSmithKline plc have established themselves leading multinational brands because of their global presence and a prudent focus on developing their strategic movements by analysing prevailing HRM requirements in the internal and external environment. Effective strategic HRM practices enable these companies to satisfy the requirements of the internal customers i.e. employees who in turn render their utmost focus on ensuring contentment of global customers. References Adeel, M. Q., 2013. Human Resource Management. Scribd. [Online] Available at: http://www.scribd.com/doc/27976387/Human-Resource-Management-at-Unilever1 [Accessed December 17, 2013]. 1BT plc, 2013. Our Company. About BT Group. [Online] Available at: http://www.btplc.com/Thegroup/Ourcompany/index.htm [Accessed December 17, 2013]. 2BT plc, 2013. The BT Story. BT Public Affairs Briefing Note, pp. 1-9. 3BT plc, 2013. Purpose and Strategy. Our Purpose. 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