Evaluate the ways in which employee and industrial relation issues are related to strategic HRM - Essay Example

d strategic management of human resource assets could allow a company to outperform the competition therefore it is important to understand how strategic HRM can help a company. Businesses may have access to the same level of technology and the tools for production but access to the right kind of human resources is often far more important. Once recruited, keeping employees engaged becomes a difficult task as individuals have to be motivated and developed according to their needs in order to keep them performing at their peak.

Strategic HR management can help a company achieve that by earmarking those individuals who show promise and following a system where the highest performing employees are rewarded as well as promoted while the worst performers are asked to leave the company. GE is one company which uses a system of forced employee ranking based on their performance for the company and that system is an important part of the strategic management of human resources for them (Welch, 2005). The system used by GE is simple.

Employees are ranked according to their performance without any ties and then the top 20% are rewarded with training, bonuses, stock options and other rewards. Half of all bonuses and management time is spent with the middle 70% but the bottom ten percent of the pile is simply shown the door at the end of the year. They may be shifted to other departments or other divisions of the firm but they are not retained if their performance does not rise sufficiently (Welch, 2005). Welch (2005) suggests that in terms of strategic HRM, the middle 70% is the most valued asset for a company since they do most of the work.

With training and attention, this group can produce many stars for the company in the future. However, for the bottom ten percent, performance evaluation reports, employee performance meetings and a record of the missed targets need to be maintained so that when the time comes for the parting of ways, there is no uneasy surprise for