Human resources and strategic planning - Essay Example

?Running head:  Human Resources and Strategic Planning Insert        Insert Grade Insert 15 January Human Resources and Strategic Planning Introduction Human resource management constitutes an area of management that has embraced strategy management as dynamics continue to characterize business function and people in the organization. Today, convectional human resource practices can no longer be the basis to respond to the needs of market demands in the modern world and this has forced many organizations to remain adept in identifying the best management practices. As organizations look for the best practices of management, it is always advisable that, organizations should identify and adopt human resources practices that fit with the organization’s competitive business strategies (Savage 2010). This will ensure the practices are not outside the goals of the business in the market hence greater success is likely to be achieved. Many organizations adopt two basic human resource strategies. They include universalistic approach and contingency approach (Savage, 2010). Universalistic approach is concerned in identifying the best practices that can be used by diverse organizations (Savage, 2010). On the other hand, contingency approach is concerned with identifying practices that match and align human resource practices with competitive business strategies (Savage, 2010). Adopting any of these two strategies depend on varied factors that each unique organization has, therefore, it is always important for an organization to carry out thorough business and environmental scanning to know the position of the business before deciding to adopt any of the strategies. Human Resource Practices Human resource has been identified to play key role to an organization especially where an organization is attempting to asserts in the market and achieve competitive edge. Strategic human resource management has emerged as an area of human resource management that looks at Functionability of business from an innovative perspective. According to this new field, organizations are not insulated from looking for the best and appropriate strategies that can help them achieve established goals and objectives in the business environment. At the same time, strategic decisions are seen to give an organization an upper hand in determining the level of participation in the dynamic business environment (Allani, Arcand, and Bayad, 2003). Therefore, by innovating best practices to apply in the business or organization, the management may just be motivated by desire to have the best policies and practices in place that accelerate and enhance the performance of the organization as compared to its competitors. Two empirical approaches have emerged to explain the strategic decision-making in an organization as far as human resource management is concerned. The approaches consent that an organization cannot be effective and properly functional if it does not identify the best practices of managing people (Allani, Arcand, and Bayad, 2003). In addition, for human resource management to be effective, they should be seen to increase performance for the organization. Universalistic approach is the first approach perfect human resource management practices can be identified. This approach postulates that, there are human resource practices that are better than others are, and all organizations have the responsibility of adopting the identified best practices. Accordingly, the approach establishes that there is a universal relationship between an individual identified practice and the performance of the organization that adopt the practice (Armstrong, 2012). Contingency approach, which is another approach widely used, hold slight contradiction position when compared with universalistic approach. The contingency approach posits that organization cannot divorce from the particulate aspects in the organization if it has to achieve the best strategy of management (Armstrong, 2012). In this way, an organization has to identify and understand the various aspects in the organization likely to impact the management practice and subsequently be able to identify the best strategy that fit with the wider strategy of the organization. Universalistic Approach Universalistic approach is concerned with internal analysis of the organization before selecting the best ‘fit’ practice. Universalist approach is based on four major principles that operate to explain how the model helps in achieving the best practices to apply in the business. The first principle is that, human resource management practices are superior when they reflect universal applicability (Allani, Arcand, and Bayad, 2003). The approach categorically observes that there are some human resource management practices that are superior to others and those that reflect superiority should be adopted by an organization. The second principle, asserts that, organizations have to select superior universal HRM practices that translate into increased performance of the organization (Allani, Arcand and Bayad 2003). According to proponents of this approach, not all HMR practices can be regarded as strategic and it is in this essence that only those HRM practices with capability of generating highest financial performance can be adopted by the organization. The third principle of universalistic approach postulate that, HRM practices are independent hence each practice is likely to impact different the organization (Allani, Arcand and Bayad 2003). It is in this understanding that, an organization should evaluate and analyze the impact of each practice to the organization individually, and the practice found to have highest performance is one to be adopted (Allani, Arcand, and Bayad, 2003). Last principle state that, organizations experience unique situations and it is from the particular knowledge that, HRM practices should be adopted in aim to address the unique nature of organization’s situations (Armstrong, 2012). Universalistic approach as it has been highlighted tend to emphasize internal fit, horizontal fit, or alignment of human resources practices that have been identified to be superior and accord excellent performance. This approach has been found to be appropriate and the best especially given that organizations are in a better position to understand their internal environment more easily and in subsequent measure be able to initiate appropriate changes. In identifying a set of the best practices that increase organization performance and productivity, universality approach provide guideline on how the organization can utilize its internal resources (Brewster 2000). Furthermore, the process of developing the best HRM approaches is likely to be productive with fewer failures since it largely depends and rely on additive relationships and interactive relationships (Brewster 2000). Therefore, there is a greater possibility of the organization making wide comparison of practices before settling on the most appropriate ones. Universalistic approach is further seen to give and impact positively on business performance given the role it plays in creating the best human capital base. Human capital base is essentially unique skills, knowledge, and potentials humans in an organization exhibit. In ensuring there is adequate human capital base for strategic shift, universalistic approach provide the appropriate ways in which recruitment, selection, training and development in an organization can be realized more efficiently (Brewster 2000). Moreover, universalistic approaches have been found to give and encourage motivation in an organization, which is critical for strategic growth. Universalistic approaches suggest the best practices with regard to recognition, reward, and work systems that can give the highest level of motivation (Kabst and Matiaske, 2005). Lastly, it has been established that, universalistic approaches encourage and create opportunities for people in the organization to contribute more. For instance, the approach is associated with initiating excellent job design practices, involvement and empowerment strategies (Kabst and Matiaske, 2005). Despite being widely use, universalistic approaches have been found to exhibit several weaknesses. First, universalistic approaches consider management practices and HRM strategies across societies to be similar and homogenous. This is not true. Global society is heterogeneous and no particular HRM practices can be used across societies successfully without experiencing obstacles. Different societies have different and unique business environments, demographic characteristics, different regulatory regimes, different cultures, and so. All these aspects tend to different one society from the other and this uniqueness translate into business management practices. This unique and differences of societies can be captured in the scholarly work of Geert Hofstede who conducted research on national cultures which make societies different from each other (Needle 2004). Further, the internal analysis and emphasis upon which universalistic approaches rests cannot be said to provide an adequate analysis of how the best practices can be adopted. In deed, in an era of globalization and increased competition, an organization required and exhaustive analysis of both internal and external aspects before adopting the specific HRM practices (Needle, 2004). Contingency Approach Contingency approach is more involved in analyzing external environments of business before any decision to adopt particular HRM practice is arrived at. Organizations that end up having an appropriate grasp of their external environment are the ones that succeed in identifying the best practices. As a result, HRM practices cannot be separated from the overall strategy being pursued by an organization. In evaluating which practice to have in the organization, Contingency approach goes beyond the financial performance aspects and suggest that, organizations should analyze aspects like innovation, customer satisfaction, product quality, flexibility, and social before having any HRM practice for management (Allani, Arcand and Bayad 2003). External environment is seen to be the best way an organization can be guided into adopting the necessary HRM practice. In this manner, organizational and individual strategies are perceived to collaborate in order for an organization to achieve higher organizational performance. This makes it necessary for an organization to establish the key elements of individuals and organization that have to be modified or enhanced in order to have the best HRM practice for increased performance. Contingency approaches have received wide acceptance due to the fact that, they advocate for multiple alternatives and different perspectives an organization use to have the best practices of management. Equifinality is at the center of contingency approach, which gives the organization chance to explore the various multiple practices and identify the most appropriate ones for the organization (Martocchio 2008). Therefore, instead of organizations having one perspective to generate HRM practices from, contingency approach gives organizations chance to use multiple systems, which may enhance the chance of the organization developing the best practices for increased performance. Contingency approaches can be said to be appropriate given the modern world environment in which business has to take place. Organizations are today seen to be influenced by activities in their wider environment and any attempt to ignore these environmental aspects is likely to impact the business negatively. Therefore, an organization is perceived and required to develop the strategic approaches that resonate with the wider environment. In same measure, the best HRM practices depend on strategic positioning of the organization and its attempt to fit well in the market environment (Wood 2009). At the same time, contingency approach has been found to exhibit some weakness. First, these approaches are premised on top-down approach which deny participation of employees hence resistance is likely to be high (Martin and Fellenz, 2010). At the same time, human resource practice is seen to operate within a multi-disciplinary and environment situation, which does not guarantee particular aspects as the best that can increase results. This therefore, shows that contingency approaches have to widen their scope in order to capture the dynamic relationship of HRM in modern environment. Moreover, the analysis and emphasis of the approach largely regard employees as passive, a situation that in most cases has been found to lead to failure of many HRM strategies (Martin and Fellenz, 2010). Employees have to take an active role in strategic planning of the organization to minimize resistance. Lastly, contingency approaches tend to remain static and ignore the wider dynamic processes taking place in the management sector and business at same time (Martin and Fellenz 2010). Therefore, this ignorance, or underestimation is likely to results into failure of the adopted HRM practices. Strategic Consideration Sometimes organizations find it difficult to choose the specific approach to pursue and end up in dilemma. Nevertheless, as much as the process of selecting the best approach might be difficult, managers have been advised to identify the best tools of decision making which can lead to the best approaches being adopted. The decision-making process need to be participative, open, and consultative, and further largely linked to market and business environment dynamics. The approach to be adopted has to be relevant and address the diverse needs of stakeholders and shareholders without forgetting the business environment. Hoque (2000) observers that modern day businesses operate in uncertainty and this makes it difficult to have any particular and specific approach of management. However, the author advises that, organizations should know the nature of their business, environment, and its people before selecting any HRM practice (Hoque 2000). In addition, the organization should consider aspects of customer response, satisfaction, employee needs, and the resources in the organization before selecting any particular approach. Conclusion Strategic planning and management have become the new aspects modern world businesses cannot ignore if they have objectives and goals of growth and continuity. Strategic management has drastically permitted in all sectors, businesses, and initiatives as people in the modern world look for effective practices to achieve growth and sustainability into the future. Strategic human resource is one of the strategic ways organization are addressing the needs of their stakeholders and shareholders in a more sound and planned manner. The result has been that, those organizations that adopt the best practices have been able to achieve and increase their competitive edge in the market. Reference List Allani, N., Arcand, M., and Bayad, M., 2003. Impact of Strategic Human Resources Management on Innovation. 12th International Conference on Management of Technology: IAMOT, 13-15 May, France. [Online]. Available from: http://www.guillaumegronier.com/cv_documents/_CDRom_CONFERE/communications/32.Allani.pdf [Accessed 15 January 2012]. Armstrong, M., 2012. Armstrong's Handbook of Strategic Human Resource Management. PA: Kogan Page Publishers. [Online]. Available from: http://books.google.com/books?id=kJfSzYIBpWwC&pg=PA55&dq=universalist%E2%80%99+and+the+%E2%80%98contingency%E2%80%99+approaches+to+HR+Strategy&hl=en&sa=X&ei=pLkST86yBNPa8QPuuujeDQ&redir_esc=y#v=onepage&q=universalist%E2%80%99%20and%20the%20%E2%80%98contingency%E2%80%99%20approaches%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Brewster, C., 2000. Human Resource Management in Northern Europe: Trends, Dilemmas, and Strategy. MA: Wiley-Blackwell. [Online]. Available from: http://books.google.com/books?id=FEpvP1WZGrIC&pg=PA40&dq=advantages+of+universalist+approaches+to+HR+Strategy&hl=en&sa=X&ei=F-AST_uaKpiqsgbNnsTdCA&sqi=2&redir_esc=y#v=onepage&q=advantages%20of%20universalist%20approaches%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Hoque, K., 2000. Human resource management in the hotel industry: strategy, innovation and performance. NY: Routledge. [Online]. Available from: http://books.google.com/books?id=AnILTklDgHAC&pg=PA126&dq=universalist%E2%80%99+and+the+%E2%80%98contingency%E2%80%99+approaches+to+HR+Strategy&hl=en&sa=X&ei=pLkST86yBNPa8QPuuujeDQ&redir_esc=y#v=onepage&q=universalist%E2%80%99%20and%20the%20%E2%80%98contingency%E2%80%99%20approaches%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Kabst, R., and Matiaske, W., 2005. Special Issue: Human Resource Management and Economic Success. Netherlands: Rainer Hampp Verlag. [Online]. Available from: http://books.google.com/books?id=cW-61KcvdY0C&pg=PA189&dq=weakness+of+universalist+approaches+to+HR+Strategy&hl=en&sa=X&ei=ieEST8XYGoOD8gPulciCBA&ved=0CDkQ6AEwAQ#v=onepage&q=weakness%20of%20universalist%20approaches%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Martin, J., Fellenz, M., 2010. Organizational Behavior & Management. OH: Cengage Learning EMEA. [Online]. Available from: http://books.google.com/books?id=keJu-dMltOEC&pg=PA446&dq=advantages+of+contingency++approach+to+HR+Strategy&hl=en&sa=X&ei=ndkST-7VK8ir8AO2i63ZAw&redir_esc=y#v=onepage&q=advantages%20of%20contingency%20%20approach%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Martocchio, J. J., 2008. Research in Personnel and Human Resources Management. PA: Emerald Group Publishing. [Online]. Available from: http://books.google.com/books?id=tL9mTLRf2qAC&pg=PA151&dq=advantages+of+contingency++approach+to+HR+Strategy&hl=en&sa=X&ei=ndkST-7VK8ir8AO2i63ZAw&redir_esc=y#v=onepage&q=advantages%20of%20contingency%20%20approach%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Needle, D., 2004. Business in Context: An Introduction to Business and its Environment. OH: Cengage Learning EMEA. [Online]. Available from: http://books.google.com/books?id=BArgnlksUc4C&pg=PA556&dq=weakness+of+universalist+approaches+to+HR+Strategy&hl=en&sa=X&ei=ieEST8XYGoOD8gPulciCBA&ved=0CD4Q6AEwAg#v=onepage&q=weakness%20of%20universalist%20approaches%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Savage, G. T., 2010. Strategic Human Resource Management in Health Care. Emerald Group Publishing. [Online]. Available from: http://books.google.com/books?id=2dkLaMSScG0C&pg=PA27&dq=universalist%E2%80%99+and+the+%E2%80%98contingency%E2%80%99+approaches+to+HR+Strategy&hl=en&sa=X&ei=pLkST86yBNPa8QPuuujeDQ&redir_esc=y#v=onepage&q=universalist%E2%80%99%20and%20the%20%E2%80%98contingency%E2%80%99%20approaches%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Wood, G., 2009. Human Resource Management: A Critical Approach. MA: Taylor & Francis. [Online]. Available from: http://books.google.com/books?id=ytaAMy7xEecC&pg=PA44&dq=advantages+of+contingency++approach+to+HR+Strategy&hl=en&sa=X&ei=ndkST-7VK8ir8AO2i63ZAw&redir_esc=y#v=onepage&q=advantages%20of%20contingency%20%20approach%20to%20HR%20Strategy&f=false [Accessed 15 January 2012]. Read More