Human Resource Function

  

STRATEGIC HUMAN RESOURCE MANAGEMENT

•      SHRM is the pattern of planned human resource developments and activities intended to enable an organization to achieve its goals (Wright and McMahan). This means accepting the HR function as a strategic partner in both the formulation of the company’s strategy, as well as in the implementation of those activities through HR activities.

•      While formulating the strategic plan HR management can play a vital role, especially in identifying and analyzing external threats and opportunities. (Environmental scanning) that may be crucial to the company's  success.

•      HR management can also offer competitive intelligence (like new incentive plans being used by competitors, data regarding customer complaints etc.) that may be helpful while giving shape to strategic plans

•      While formulating the strategic plan HR management can play a vital role, especially in identifying and analyzing external threats and opportunities. (Environmental scanning) that may be crucial to the company's  success.

•      HR management can also offer competitive intelligence (like new incentive plans being used by competitors, data regarding customer complaints etc.) that may be helpful while giving shape to strategic plans

•      HR function can also throw light on company's internal strengths and weaknesses. For example, IBM's decision to buy Lotus was probably prompted in part by IBM's conclusion that its own human resources were inadequate for the firm to reposition itself as an industry leader in networking systems (Dessler).APBS

•      Some firms even develop their strategies based on their own HR- based competitive advantage. Apple , IBM… have not slowed down their recruitment efforts during the lean periods, pinning hopes on their own exceptionally talented employee teams. In fact they have built their strategic and operating plans around outsourcing sourcing contracts from US, Europe, Japan and Germany which would help them exploit the capabilities of their employees fully.

•      Globalization, deregulation and technological innovation have- in recent times- created the need for rather, faster and more competitive organizations. Under the circumstances, employee behavior and performance is often seen as the best bet to push competitors to a corner and enhance productivity and market share.

•      HR practices build competitiveness because they allow for strategic implementation, create a capacity for change and instill strategic unity.

USING HRM TO ATTAIN COMPETITIVE ADVANTAGE

•      Competitive advantage refers to the ability of an organization to formulate strategies to exploit rewarding opportunities, thereby maximizing its return on investment.

•      Competitive advantage occurs if customers perceive that they receive value from their transaction with an organization

•               This requires single-minded focus on customer needs and expectations. To achieve this, the organization needs to tune its policies in line with changing customer's requirements.

•      The second principle of competitive advantage derives from offering a product or service that your competitor cannot easily imitate or copy. An organization should always try to be unique in its industry along dimensions that are widely valued by customers.

•      For example Apple stresses its computers’ usability, Mercedes Benz stresses reliability and quality; Maruti emphasises affordability of its lower-end car Maruti 800.

•      In order to enjoy the competitive advantage, the firm should be a cost-leader, delivering value for money. It must have a committed and competent workforce. apbs

•      Workers are most productive if :

•      (i) they are loyal to the company, informed about its mission, strategic and current levels of success,

•      (ii) involved in teams which collectively decide how things are to be done and

•      (iii) are trusted to take the right decisions rather than be controlled at every stage by managers above them (Thompson). A good team of competent and committed employees will deliver the goals if the are involved in all important activities and are encouraged to develop goals that they are supposed to achieve. In recent years, a new line of thinking has emerged to support this view-known as strategic human resources management (SHRM).**

To sum up

•      Human Resource Management may be defined as the art of procuring, developing and maintaining competent workforce to achieve the goals of an organization in an effective and efficient manner. The Indian Institute of Personnel Management has specified the scope of HRM as Personnel aspect, Welfare aspect, Industrial relations aspect.

•      The principal objectives of HRM include to help the organization reach its goals, to employ the skills and abilities of the workforce efficiently.

•      HR has a great role to play in the execution of strategies. HR can help strategy implementation in other ways. It can help the firm carry out restructuring and downsizing efforts without rubbing employees on the wrong side- say, through out placing employees, linking rewards to performance, reducing welfare costs, and retraining employees.