HRM Managers Have Choice in Designing and Implementing an HR Strategy - Coursework Example

Name Course Instructor’s Name June 17, 2010 HRM managers have choice in designing and implementing an HR strategy Introduction Strategy is a theme that unifies decisions and actions of an organization or individual through provision of direction and coherence. It is the process through which the objectives of a firm or organization are achieved. It involves specific goal focusing, resource allocation and consistency, cohesiveness or integration of actions and decisions (Belanger, Edwards & Wright 60). It ensures that an individual or an organization wins in its goals and objectives. The strategy is different from a plan and usually is not made explicit. It involves putting resources to good use in order to establish a competitive edge over other firms (Pfeffer 105). Human resource management involves the management of people. Human resource strategy is a process of management, which forms part of the formation of emergent strategy (Paauwe & Boselie 60). Human resource strategy helps in creating ways that manages people in such a way that the goals of an organization are realized. The successful performance of many companies is a result of outstanding management of employees. Thus, HR practices which are innovative result in increased output per employee. It is widely agreed that human capital if well managed can offer a firm a competitive advantage and that human capital is directly influenced by the HR practices of a firm. Furthermore, it is agreed that inimitability of a company system can be enhanced by the complex HRM systems. People contribute to the efficiency and effectiveness of a firm and cannot be replicated by competing firm. They also fulfill a unique function in an organization and they cannot be bought in the market. Best HRM practices Various factors influence the performance of employees. These include job security, new personnel hiring process that is selective, teams which are self managed and a process of decision making which is decentralized, compensation contingent which is comparatively high, training which is extensive, reduced barriers and distinction in status and sharing of information concerning the performance and financial status of the company (Purcell 35). A company that has invested much in the selection and training of employees loses these strategic assets when it layoff these employees. Thus, it incurs more costs and loses competitive edge over other firms since they can employ this work force and become more competitive than the company that retrenched these employees. Selection of outstanding personnel ensures sustained advantage in terms of competition of a firm. Teams that are self-managed act as a building block to the organization. Compensation contingent who is high is critical in attracting and retaining personnel, which is of high quality (Belanger, Edwards & Wright 54). Training of personnel ensures that employees remain outstanding in professional expertise, are able to utilize opportunities in all situations and are forefront in the product knowledge. Reducing the status difference encourages open management and thus encourages equality at work place. Information sharing encourages communication and trust in a company setting. Therefore, a firm that has employees with unique and valuable skills and capabilities has a competitive advantage over other firms. Roles of strategy Strategy supports decision. Through strategy, decisions of an organization or an individual become coherence. Thus, a strategy enables an organization or an individual to position himself and help him to create opportunities by offering him decision criteria and guidelines. Through strategy, decision-making process is made simple since the range of decisions is constrained and the strategy acts as a heuristic. The strategy making process also allows pooling together and integration of knowledge from different persons (Marchington & Grugulis 1119). Through the process of making a strategy, analytical tools are used. Strategy is also used as a device for coordination. To do this, a strategy is used as a device of communication by the top management to outline the identity of the firm, its goals and its position to other members of the organization (Paauwe & Boselie 69). Through strategic planning views from different individuals are exchanged and consensus is developed. The implementation of the formulated strategy ensures that the organization is forward moving. Strategy is also used as a target for the firm. It ensures that the firm is competitive now and in the future. Thus a strategy gives the organization both direction and aspiration that are sources of motivation to the organization’s members (Pfeffer 121). Designing and implementation of HR strategy The process of designing and implementing a strategy involves four major steps. First, they include setting goals that are simple but consistent and in most cases are long term. The second factor is a clear understanding of the environment, which is competitive. Thirdly, the strategy should appraise resources objectively in order to be able to exploit the strengths of an organization or an individual and guard against the weaknesses of the firm or an individual. Finally, the strategy should be implemented effectively (Marchington & Grugulis 1121). This ensures that the strategy spurs the organization or an individual to success. Thus without implementation of the strategy in an effective manner little if any success will be realized from the well laid down strategy. The HR managers have a role of making sound decisions coupled with the ability to put into place these decisions by encouraging other employees to be loyal and committed to the objectives of an organization. The success of a strategy depends on the consistency that exists between the internal and external environment of a firm. Failure of a firm to align its strategies with its capabilities in most cases result in the failure of the firm. Strategic decisions are important, ensures that resources are committed to a significant use and in most cases; they are irreversible (Grant 11). The turbulent business environment makes long term planning difficult and thus strategic management ensures that the firm is positions the firm strategically in the market to ensure continued profitability and success. Thus, strategy ensures that capabilities and resources of the firm are increased in order to maximize the profitability of the firm (Boxall, Purcell & Wright76). This offers the company a competitive advantage over other related companies. This element differentiates competing companies from one another even though they may be involved in production of a similar product. Thus, a strategy that is competitive should set the firm apart from its competing partners. The constant changes in competition and technology is transforming the strategy to be more responsive and flexible in order to create short lived advantages rather than positioning a business in such a way that it always has competitive advantage over other firms (Purcell 30). Thus, firms are forced to reconfigure their resources and capabilities through strategic alliances within networks. The changing concept of the firm’s strategy from long-term comprehensive strategic plan to a strategy that is interested in the success of the firm is a result instability and unpredictability of the business environment. Thus firms need to have clear ideas on what they intend to achieve and how to achieve these goals rather than a detailed written strategic plan. Thus, a strategy needs to give the firm direction and not to be used as a plan for the business. This implies that a strategy should be both responsive and flexible in order to ensure the success of the firm in the prevailing unstable and unpredictable business environment (Pfeffer 101). Therefore, these characteristic of a strategy ensures that the strategy can navigate the organization through unforeseen threats and helps in the utilization of the many opportunities involved in the stormy business environment. Strategy enables a firm to survive in the turbulent business environment and prosper. There are two types of strategies: corporate strategy and business strategy. Corporate strategy enables a firm to identify markets and industries that it is competing for (Grant 11). Business strategy enables a firm to strategize on how it competes for a certain market or industry. Thus, business strategy is also referred to as a competitive strategy. The high-level management and the staff in charge of corporate strategy are responsible for the corporate strategy while the divisional management is charged with business strategy (Marchington & Grugulis 1110). A strategy may result from rational analysis by managers or from the adaptation to prevailing circumstances. Many companies that are successful do not have comprehensive strategy designs. Thus, rational approaches to strategy design are inaccurate and poor (Garavan 28). Due to this inaccuracy in rational strategy design, strategy has been divided into intended strategy, realized strategy and emergent strategy. Intended strategy is what the top management perceives. However, intended strategy is not wholly a result of rational deliberation. It results from negotiation among the management team, bargaining and several compromises by those groups involved in the design of the strategy. Realized strategy is the strategy that is actually implemented (Boxall, Purcell & Wright80). This is about ten to thirty percent of what is actually intended by the top management. Emergent strategy is what determines the realized strategy. It involves making decisions by the managers because of interpretation of the intended strategy and at the same time adapt to the changing external business environment (Kochan, McKersie & Cappelli 22). Thus, continuous interaction that exists between formulation and implementation of strategy in emergent strategy enables the management to adapt and learn in addition to constant adjustment and revision of the strategy through experience gained. In cases where the business environment is turbulent and unpredictable strategy making uses guidelines rather than employing specific decisions (Tyson 280). Strategic human resource development can be either planned or emergent. When the strategy is planned, there is little role played by the SHRD in the formulation of the strategy (Paauwe & Boselie 60). However, SHRD will be instrumental in the implementation of the strategy. Emergent approach on the other hand is embedded in the social architecture of the organization. To be able to make strategic choice the parties involved should have good judgment over the decisions they make. Therefore, the instability of the environment should not limit the choice of decisions. Thus, good judgment should be a result of the set goals (Lengnick-Hall, Lengnick-Hall, Andrade & Brian 70). To widen the decision-making choice, the goal should be designed in such a way that they change with time or they should formulate vaguely to allow varied interpretations. To this end, the management needs to be creative in decision-making process to be able to come up with innovative strategies for achieving the set goals. Strategic decisions should also be able to alter the role or the relationship of the firm and other competing firms. In most cases, the effects of a strategy that is chosen are seen after a long period of time and sometimes may be seen indirectly (Boxall, Purcell & Wright78). These effects may result from unconscious plan. From this, we can say that the HRM managers can decide not to design a strategy since in most cases, it emerges and due to changing business environment, long-term strategic plans will have no use. This is because most firms that are successful have no well laid down design for their strategy (Kochan, McKersie & Cappelli 20). Designing and implementing plans, which may not be in line with the changing environment, may impact negatively on the business. Thus, HRM managers need to be flexible and adapt to changing environment rather than designing comprehensive strategies, which may be irrelevant to the prevailing business environment. This will ensure that employees are maintained and developed at the firm level and maintain a competitive edge of the firm (Garavan 15). Conclusion Strategy is usually emergent and flexible. Being a process, strategy is iterative lacking precise structure. Human resource management is thus concerned purely with implementation. The formation of a strategy should be done at the organization level. Strategies can be realized through policies and directives as well as actions. HRM plays a role of integrating the business and HRM strategies. A strategy describes a future action. Therefore, since the future is unknown strategy need to be both flexible and emergent. Thus, the HRM managers should be responsive to changing business environment rather than designing and implementing strategies which in most cases is not realized and if realized will be to the disadvantage of the firm. By being flexible and responsive, the HR strategy will emerge and make the firm more competitive and profitable. References Belanger Jaques, Edwards Paul & Wright Martyn. “Best HR Practice and the Multinational Company.” Human Resource Management Journal 9.3 (1999): 53-70 Boxall Peter, Purcell John & Wright Patrick. The Oxford Handbook of Human Resource Management. Oxford: Oxford University Press, 2007. Garavan Thomas. “A Strategic Perspective on Human Resource Development.” Advances in Developing Human Resources 9.11 (2007): 11-30 Grant Robert. Contemporary Strategy Analysis, 7th Ed. New York: Wiley Publishers, 2009. Pp. 3-30 Kochan Thomas, McKersie Robert & Cappelli Peter. “Strategic Choice and Industrial Relations Theory.” Industrial Relations 23.1 (1984): 16-39 Lengnick-Hall Mark, Lengnick-Hall Cynthia, Andrade Leticia & Brian Drake. “Strategic Human Resource Management: The Evolution of the Field.” Human Resource Management Review 19 (2009): 64-85 Marchington Mick & Grugulis Irena. “‘Best Practice’ Human Resource Management: Perfect Opportunity or Dangerous Illusion?” International Journal of Human Resource Management 11.6 (2000): 1104-1124 Paauwe Jaap & Boselie Paul. “Challenging ‘strategic HRM’ and the relevance of the institutional setting.” Human Resource Management Journal 13.3 (2003): 56-70 Purcell John. “Best Practice and Best Fit: chimera or cul-de-sac?” Human Resource Management Journal 9.3 (1999): 26-41. Pfeffer Jeffrey. “Seven Practices of successful organizations.” California Management Review 40.2 (1998): 96-122 Tyson Shaun. “Human Resource Strategy: A Process for Managing the Contribution of HRM to Organizational Performance.” The International Journal of Human Resource Management 8.3 (1997): 277-288 Read More