Role of Theory in Human Resource Management Strategy Analysis - Essay Example

?Human Resources Table of Contents Table of Contents 2 Introduction 3 Role of Theory in Human Resource Management Strategy Analysis 4 Contingency Theory 5 Behavioural Theory 6 Human Capital Theory 6 Resource based Theory 8 Conclusion 9 References 10 Introduction The dynamic world is changing quickly. Thus, human resource management (as a part of organisation) needs to be prepared to deal with the impacts of the dynamic world. To formulate HR strategy, there is need to understand the consequence of globalisation, employee diversity, changing talent necessities, corporate rationalizing, total quality management, reengineering, the dependent personnel, regionalized work places, and employee participation. Developing and applying a comprehensive strategy is needed to remain competitive in this dynamic environment. A human resource strategy can help to strengthen the employee base of any organisation. This paper will describe the importance of theory in analysis of human resource strategy in this dynamic environment and will analyse whether the role played by theory in human resource strategy is irrelevant or vice-versa (IFRC, 2010). Role of Theory in Human Resource Management Strategy Analysis Handling human resources is one of the most vital duties of organisation. The managerial theory is vital for supervising the employees in enterprises with complex organisational structure. Managers who have blended theory in their regular activities have better managed the organisation more effectively for accomplishing both individual as well as organisational goals (Olum, 2004). Theory is a methodical combination of interdependent thoughts and philosophies which provides an outline about an important base of knowledge. Only scattered data is not helpful for analysing the human resource strategy, the observer must have knowledge regarding theory that can explain the relationship between variables. In the deepest form, theory can be regarded as a set of rules, a particle cabinet in which truths with respect to human resource strategy can be gathered. Management theory had evolved through the World War II and had been studied comprehensively later on. The industrial revolution had generated high demand of mass production, product specialisation and thus organisations started to look towards the employees as critical resources. There is need for strategic planning for managing the human resources for high productivity (Olum, 2004). The role of theory is vital for analysing the human resources. Theories are essential facts, and it elucidates the correlation among variables, usually independent and dependent variables. Theory has the capability to anticipate future difficulties which may occur in the organisation. In contrast to theory, techniques are the method of performing jobs. The techniques replicate the theories and these are the means of assisting managers to commence activities most efficiently. In the area of human resource management strategy, the role of theory is to deliver an understanding of organising significant and relevant management knowledge. For example, in devising strategy for effective culture in organisation, there are several theories which are interconnected and have an analytical worth for managers. The importance of theory in analysis of human resource management strategy can be gauged from the following: Theory can provide criteria about what is appropriate for employees in any organisation In human resource strategy, theory can enable to communicate effectively and therefore change into more difficult association Theory can help to learn about the fundamental concept of developing strategy and thus make easy to analyze them (Olum, 2004) Theories assist in understanding the dynamic nature of contemporary organizational environments. The HR strategy is made on the basis of theories. Human resource strategy is all about how an organisation can manage their human capital. This provides a basis for formulating strategy and developing packages for analysis. The human resource strategy is the improvement of competency within an organisation for providing competitive advantage. There are several theories in the field of human resource that help to analyse strategy (Grant, 2001). The benefits of a few of the theories for analysing human resource strategy are discussed in the next few lines. Contingency Theory According to contingency theory, the HR strategy should be apt with the competitive strategy of organisation. Contingency theory accepts that managers implement strategy for competing in the dynamic environment (Seyedjavadin & Zadeh, n.d.). Through this theory the managers can understand the economic desirability of fitting HR strategy with a company’s objective. A proper analysis of economic aspects of human resources can help organisation to formulate the budget for any human resource strategy. Behavioural Theory The behavioural theory gives an understanding about the interdependent role of behaviour which serves as making blocks for administrative system. The role behaviours are regular activities of an employee properly interconnected with the repetitive actions of others to yield expectable results (Pieper, 1990). The behavioural theory is useful for linking HR activities with competitive strategy of a company. Through this theory managers can learn the need of different behaviour and thus help to formulate and analyse the human resource strategy. This theory works as a means of managing activities of employees. Human Capital Theory Human Capital theory helps to understand the logic behind selecting strategies for managing human resources. The root concept of this theory is that employees are worthy in a company because they can make an organisation productive. This theory is also used to gain insights into the decision of the organisations about the methods of operation. This theory helps in analysis of make or purchase decision of human capital with respect to dynamic business environment (Barker & Et. Al., 2010). Resource based Theory In a company, the human resource division can be held to be controlling limited resources to the level that it can gain the skills required for accomplishment of strategic goals. In a broader sense, a company can accomplish a competitive advantage by applying human resource exercises, for instance, a good compensation system to maintain best talent. It can be sustained by proper training, good culture, selection procedure, and other customary human resource exercises. The resource based theory provides the reason behind why HRM structure leads to persistent competitive advantage for company (Schuler & Jackson, 2007). Thus, it helps to make strategy for human resource management which cannot be copied simply by competitors. Theories can help to make appropriate HR strategy which is associated with company objectives and thus copying the strategy may not be fruitful for other companies. Conclusion From the overall critical analysis, it has been recognised that theory is relevant for managers to understand the central idea with respect to management of human resources. In the field of human resources, several researchers had developed theories that have their own specialties. It is important to know how human resources of an organisation can help to achieve competitive advantage in this dynamic environment. The culture and employees of each organisation is different. Theory can help to develop strategy for improving performance of employees and analysis of the strategy for success. References Barker, B. & Et. Al., 2010. Human Resource Management in Education: Contexts, Themes and Impact. Taylor & Francis. Grant, R. M., 2001. The Resource – Based Theory of Competitive Advantage: Implications for Strategy Formulation. Skynet - University of Limerick Computer Society. [Online] Available at: http://www.skynet.ie/~karen/Articles/Grant1_NB.pdf [Accessed September 06, 2011]. IFRC, 2010. Human Resource Management Strategy. Plan 2010 – 2011. [Online] Available at: http://www.ifrc.org/docs/appeals/annual10/MAA0003410p.pdf [Accessed September 06, 2011]. Olum, Y., 2004. Modern Management Theories And Practices. Makerere University. [Online] Available at: http://unpan1.un.org/intradoc/groups/public/documents/AAPAM/UNPAN025765.pdf [Accessed September 06, 2011]. Pieper, R., 1990. Human Resource Management: An International Comparison. Walter de Gruyter. Seyedjavadin, S. R. & Zadeh, M. H., No Date. HR Strategy and Its Aligning With Organizational Strategy and Human Capabilities. University of Tehran. [Online] Available at: http://www.ijms.ir/pg/02/ijms0201.pdf [Accessed September 06, 2011]. Schuler, R. S. & Jackson, S. E., 2007. Strategic Human Resource Management. Wiley-Blackwell. Read More