Why Is the Role of Human Resource Critical in the Success of an Organization - Literature review Example

Running Header: Strategic Human Resource Management Customer Inserts His/Her Name Customer Inserts Grade Course Customer Inserts Tutor’s Name 25, 02, 2011 Introduction Human resource can be identified as a set of skills and workforce that an organization’s employees have which can be used to create a substantial competitive advantage in the market through value addition. Human resource is thus the most important asset that an organization has because of the critical role that the collective human resource does. There has been a critical evaluation of how to manage this resource in the past decades in order to create a substantial competitive advantage in the ever increasing competitive market as a result of globalization. This paper critically analyses the concepts of strategic human resource practise design and implementation. It also shades more light on issues related to coherence and consistency which emerge as a result of poor understanding of alignment strategies or how to fit the relevant human resource strategically in order to create competitive advantage. It also analyses the current and future development in the field of human resource management. Strategic human resource practise Despite the importance of human resource to an organization, incoherence and inconsistency has diminished the relevance of human resource in many organizations. The concept of “fit” which implies all spheres of human resource management has not been fully managed to get optimum results. The incoherence and inconsistency has been the genesis of employees’ issues which leads to job dissatisfaction and hence low performance of the organization. Some of the major yet assumed human resource functions include; formulating motivational strategies, training services through seminars constant performance evaluation and reward scheme. These issues are the main source of inconsistency in the human resource department and also the genesis of poor ‘fit’ as a result of inconsistent handling of the core competencies which is a source of the organizations competitive advantage. Set of core competencies is the most essential element that distinguishes a company from its competitors (Mcwilliams & Van Fleet, 2001). The lack of understanding or assumed relevance of these fundamental issues relating to employees is the cause of poor performance of organizations in the 21st century. Innovative and collective diverse and talented human resource can only be achieved through strategies that give employees reason to perform. The fundamental function of the human resource is to align the human resource with the goals of the organization or “fit” the human resource at the disposal of the organization with its visions and missions. Inconsistency and incoherence is caused by lack of this basic understanding which translates to poor organization performance. The concept of “fit’ or alignment can only be achieved by considering all the spheres of human resource and not some. By considering all the spheres of human resource, the gaps created by incoherence and inconsistency can be closed in order to mitigate chances of poor “fit”. As described by Thompkins (2002) despite the growth and spread of technology which is critical in creating value necessary for an organization to stay in the market, human resource has remained the major tool critical in enhancing the competitiveness of an organization. This is mainly because the human resource is the backbone of an organization and responsible for controlling integrated technology in charge of creating competitive advantage (Lee, 1999). It is thus clear that the relevance of human resource in an organization cannot be overemphasised. The management of human resource has however failed many organizations in the past despite the shift from personnel management to human resource management in the early 19th century. The rationale for the shift was mainly because of the need to increase the performance of employees through addressing issues related to them. Some of the issues related to employees are employee disputes, motivation, diversity and pay or reward among other factors. The lack of insight on these issues has made the concept “fit” in the field of human resource lack consistency and coherence and thus leads to poor design and implementation of strategic plans of the human resource (Rowden, 1999). The human resource department is still faced with issues related to consistency of employee which is as a result of poor analysis of the workplace environment and how best to handle issues without letting such issues get out of hand. In essence, the concept of “fit” is still not well understood or rather not well covered in modern organizations. With increase in globalization, the success of a company depends entirely on the performance of its human resource (Stoev & Karadjova, 2009). As stated by Michie & Sheeha (2005) despite the central role of human resource in an organization, the design and implementation sets within the organization have not been fully realised because of poor insight on coherence and consistency. The concept of “fit” is still not well understood and as a result there are still a number of issues related to management of human resource especially in large organization. The concept of “fit” varies in scope but mainly surrounds areas related to human resource management issues like pay and reward schemes, motivational schemes, ways of handling employee’s grievances. Most organization worldwide still finds it difficult to handle issues related to employees in the best way possible where a win/win situation is created. In essence, handling of employees requires an in-depth understanding of human behaviour which is complex in nature. There are some key points to consider when handling employee related issues; one of them is taking a human approach when addressing any issue in the workplace (Leug, 2003). This has been a major challenge to many organizations because of lack of understanding on better ways of encouraging and even motivating employees. This lack of understanding leads to poor management of human resource which then leads to poor design and implementation. Because of the increased level of competition in the world’s market, organizations must be adaptable, agile, and resilient and customer focused in order to be sustainable. According to Becto & Schraeder (2009) employee diversity is another source of concern to organizations; most organizations do not take advantage of their workplace diversity. Diversity in the workplace means an increased scope of talents that can be optimized to create competitive advantage. Unfortunately this is not always the case because of poor insight on the significance of workplace diversity. Most organizations lose their human resource to competitors because of improper management of its employees. Many companies are yet to learn how to leverage on their talent especially when facing a dynamic and challenging market place. Employees with different talents and different backgrounds can enhance the performance of a company if only utilised correctly. Having a large and diverse set of competencies does not guarantee performance of a company in question. How the human resource management aligns the company’s workforce to achieve its goals determines the performance of the company. As explained by Ngo (2008) when China opened its operations globally in 1980s, it relied on diversity to strategically place itself in the market; Singaporeans were the key workforce of china during this period. Singaporeans had adequate knowledge of the Chinese market because of their common origin; the Singaporeans had an added advantage since they had good understanding of the western market. They were therefore strategic enough to help Chinese companies expand globally. This is a good example of how a diverse workforce can enhance the competitiveness of a company (Higgins, 2005). Employees disputes and complains are another source of company’s inefficiencies in the human resource sector of an organization. Most organizations are still struggling to get better ways of solving employee’s disputes and also ensuring that the legal process of employee and employer is adequately followed in dispute resolution (Ijose, 2010). The human resource is mandated with the task of ensuring that that the legal process of dispute resolution is achieved. This is one crucial sector because it plays a critical role in the design and implementation of strategic human resource practise. Lack of coherence and consistency leads to poor alignment or “fit” a given organization. Solution of employees disputes and complains is yet to be analysed and solved with the seriousness it deserves (Huslid, 2003). The human resource department has a lot to learn about the importance of incorporating dispute resolutions as a fundamental way of improving the coherence and consistency of human resource practise. Proper solution of disputes improves the efficiency and the reliability of employees in an organization which then translates to performance of an organization. The concept of “fit” or alignment can also be analysed by consideration of the core roles of human resource which is to co-ordinate all factors related to human resource in order to achieve the goals of the organization in question. This includes the recruitment process, appraisal and reward and career development (Kaplan, 2002). These series of development are critical in enhancing the company’s competitive advantage. If one of the stages fails to meet the outline criteria or policy, the goals of the organization may be sabotaged (L. Van, 2004). This has however not been the case in most organization since one of the department fails to take adequate actions relating to one stage of career development process. Failing to handle professionally employee related issue leads to poor performance because of lack of willingness from the employee’s side. Such employees will feel that they are less regarded when it comes to their job performance. Conclusion As discussed in this analysis it is evident that the role of human resource is critical in the success of an organization. Human resource is also one of the most important resource that an organization has in its endeavours to enhance its competitive position. Human resource management is thus the ordering and co-ordination of human resource in order to achieve the goals of an organization. Human resource management therefore determines the success of an organization through its management strategies. When a company is setting its strategic plans, it uses its human resource as the main resource of aligning the several factors of productions that are critical for it to attain its visions and missions. This means that the more organized and co-ordinated the diverse human resource of a company, the more likely that the company will achieve its goals within a given period of time. It has also been established that despite the crucial role of human resource in an organization, its practise through implementation and design has lacked coherence and consistency because of inadequate knowledge on the concept of “fit” which is an agreeable alignment of several factors that results in successful human resource management. The concept varies with organization but unified in relevance since the human behaviour is similar in nature if the environment is the same. This analysis therefore opens gaps in the field of human resource that needs to be reinforced in order to ensure that the organization is successful as a result of human resource optimization. Some important and relevant issues discussed are employee disputes addressing, motivation and management of diversity in a workplace environment. Read More