Human Resources Management the Key to Strategic Success - Coursework Example

University: Human Resources Management – the key to strategic success. Name: Date: Human Resources Management – the key to strategic success INTRODUCTION. Human resource management is an essential department in every organization. Essentially, the human resource department facilitates implementation of an organization’s policies, oversees employee behavior while also ensuring there is fair treatment of employees by the employers. Human resource management is pivotal for linking the strategy of the business to the activities related to the employees in an organization (Billsberry et al 2005 p.58). Organizations are recruiting human resource managers who assist them to maximize staff capabilities and talents. The fundamental concept in HR management is that both the company and the employees stand to benefit from this mutual relationship. By definition, human resource management is a branch of managementwhich deals with the process through which organizations manage people in a structured way. This also constitutes that=e decisions made by management, the skills nurtured to the employees by the management as well as the improving employee competency and working standards. In the contemporary work environment, most large corporations endeavor to retain their top talent of their workforce. Ensuring a low employee turnover is a daunting task and requires that organizations reward these employees with attractive benefits to alleviate the risk of losing their knowledgeable workers. Moreover, the fact that the hiring process is expensive and further costs are incurred in training employees makes the objective ofhiring the best and striving to retain them a paramount objective of any human resource department in an organization. It is very critical that organization address a strategic approach to human resource management to so as to attain competitive advantage above their competitors in any industry. Achieving huge profit margins, high sales, and great organizational reputation are proponents that are deeply rooted in a functional human resource department. Survival of organizations in all highly competitive industries require that the businesses master the competitive forces of their rivals(Regis 2008 p.47). It is, therefore, crucial that human resource managers align the human resource with the overall strategy of the business. Fundamentally, this requires that employees get motivated to engage in the ultimate goals of the organization. Further, improving organizational performance requires that human resource activities complement the organization’s efforts of ensuring service, productivity and quality. These activities are interlinked and takes consideration of the external business environment which includes technological, legal, social, political, and cultural environments when addressing the activities. This term paper deals with two major HR activities and gives their detailed responsibilities and also goes further to elaborate how they are interlinked and ultimately focuson the overall organizational strategy. COMPENSATION AND BENEFITS. Compensation refers to rewards received by employees for performing their jobs to the required standards. These rewards can be either extrinsic or intrinsic. While extrinsic rewards are the major motivation behind the concept of compensation, it is undeniable that intrinsic motivation is of equal significance in ensuring stellar performance by employees(Hernandez et al 2010 p.61). On the other hand, benefits are value forms that do not come in payment but are provided by employers as a reward for their positive contribution towards the organization. With this understanding, it is clear why organizations keep adjusting the benefit packages for their employees. The fact that benefits are expensive for organizations means that they provide a package that are essential for the employees and at the same time attractive enough to keep the package competitive and retain the employees. Employees compensation are subdivide into four major categories. 1. Variable Pay – This refers to the non-fixed cash rewards give to employers that is dependent either on the employee performance or the company’s performance. This is also known as performance pay. The main objective of variable pay is to recognize and appreciate the employee’s contribution over and above his or her normal job requirements. Basically, the variable pay comes as a percentage of the fixed pay(Armstrong 2010, p.18). The approach of using variable pay has gain exceeding popularity over the recent years as companies seek to reduce fixed costs while increasing variable costs since the latter is payable based on achievements of results. Further, organizations also embark on variable pay to instill and accelerate performance culture in organizations and strategically position the organization in at a level where it’s able to retain and attract its top talents especially due to the fact that high performing employees prefer to be differentiated for their high performance. 2. Fixed Pay - Also known as guaranteed pay, this payment package offers a fixed monetary reward to an employee. Essentially, the fixed pay is independent of level of business done by the organization or the day to day performance of the employee. Fixed pay entails a periodic payment as agreed by the contact of engagement between the employer and employee. In every organization, the fixed pay package is the most critical compensation component that attracts skilled professional into organizations(Hernandez et al 2010 p143). Therefore, it is important for organizations to conduct comparative studies of market pay rates for individuals in the same industry at a similar job level. Moreover, employers should ensure salary ranges and pay rates are levelled to enable consistency within different job levels. The amount of fixed pay is also majorly a factor of the number of qualified personnelavailable for the specific job in the market. 1. Benefits – Employee benefits encompasses health insurance, retirement benefits, stock ownership plan for employees, and vacations among others. Moreover, there are intangible benefits which include giving employees nice offices, appreciation from mangers and bosses, and possibility for giving promotion to the employees(Aswathappa, 2013 p.98). Employers should try as much as possible to offer employees the benefits they value the most. The positive effect of this is that employees are less likely to quit, skip job on working days and will generally display better commitment towards the organization’s goals. 2. Equity Compensation – This is another effective way of retaining and attracting employees especially for startup companies. With this package, employees are privileged to buy stock options at an exercise price(Billsberry et al 2005 p.105). This arrangement gives employees the opportunity to purchase shares of the company and consequently gain control of the purchased stock option after working with the company for a considerable time. Primarily, this motivates employees to have the organization’s interest at heart, exercise good judgment and also strive to improve performance since employees attach sense of ownership in the company. It is the primary responsibility of the HR manager to foster reasonable and competitive compensation terms and packages to attract potential employees. A thorough research on the previous benefits and compensation arrangements of potential employees is vital for employers to ensure that they remain competitive in their recruitment procedures. Similarly, as employees climb up the corporate ladder, it is appropriate that the Human Resource professionals identify the additional qualities that are needed for the tasks and embark the employees on further training, seminars, and workshops in a bid to improve their managerial capabilities(Aswathappa, 2013 p.109). RECRUITING AND STAFFING. Recruiting is the process of selecting, attracting and appointing prospective employees and motivating them to apply for job openings in an organization. Staffing is the set of activities involved in identifying people with the right skills and knowledge and retaining them to ensure improvement in the organization’s reputation and performance (Aswathappa, 2013 p.67). Staffing and recruitment are integral parts of the human resource process. Recruitment is a systematic process that involves seeking the most appropriate candidates and those who fit in with the job description, organization’s culture and competitive nature of the job vacancy in question. In order that an organization comes up with the most suitable candidate, the Human ResourceDepartment should, in practice, come up with a suitable recruitment procedure. . The recruitment process involves five major steps. 1. Performing job analysis - Recruiters should make inter departmental consultations before declaring a job vacancy in any department. This analysis should entail considerations such as the need for a new employee in the department, introduction of a new department in an organization, firing or quitting of a previous employee or death. 2. Designing a job description – This should consist of a detailed description of the duties and responsibilities of the specific job vacancy. Here, recruiters explains much as possible the day to day activities of the potential employee and the responsibilities that he or she will be tasked with, whom he/she shall report to and the scope of his work in relation to the department and the entire organization. (Armstrong 2010, p.33). 3. Identify the job specification – Recruiters should then design a comprehensive list of the qualities and expected qualification of the intended potential employee of the post. In this stage, recruiters, thought he human resource department, make use of the job description to determine the ideal candidate required for the post. 4. Attracting recruits in large numbers –Undoubtedly, recruiters want to attract as many job candidates as possible so as to ascertain that they have made a well informed decision. The surest way of achieving this is through attracting a large pool of recruits. Through newspaper ads, the company’s website, televisionadvertisements, and posters, the HR department is able topublicize a vacancy(Regis 2008 p.84). Depending on the urgency, level of expertise, duties and responsibilities, and professional qualifications required, the human resource personnel are able to determine the most efficient mode of conveying the information.] 5. Selecting the best recruits – Based on the skills, qualifications, and a guideline set prior to the interview, recruiters are able to determine the best candidate for the job. These recruits can be shortlisted and a final comprehensive interview set at a future date where only the required number of employees are selected. Further, managers engage a systematic socialization process where the newly recruited employees are integrated into the organization(Hernandez et al 2010 p70). The recruiting and staffing activity is critical for an organization. Putting the right person in the right job inevitably sustains high performing organizations. Moreover, organizations should carefully consider whether the job vacancies they intend to advertise can also be filled though internal recruitment(Armstrong 2010, p.74). Internal recruitment is the process of identifying internal candidates who have the potential of filling vacant organizational positions and encouraging them to apply for these positions. Internal recruitment is a competitive strategy for organizations especially in top level management positions. This is because the organization is able to retain top talent and since these employees are already familiar with the organization’s culture and objective, they are able to focus on the core mission and vision of the organization. RELATIONSHIP BETWEEN THE TWO ACTIVITIES Compensation and recruitment are fundamental activities in any human resource department. These two activities go hand in hand. Recruiters always recognize that the best candidates invariably have multiple offers and they therefore have to offer an attractive compensation package to retain these type of candidates(Billsberry et al 2005 p.86). Coordination between the recruitment and compensation personnel is important since quick decision should be made after interviews where the recruiters and those tasked with offering employee remuneration are required to find the candidate who offers the right match. Compensation professionals should, therefore, desist from undervaluing talent as this can have serious implication of the overall professionals brought on board after a rigorous recruitment procedure that not only takes up important organizational time but is also financially taxing. To achieve a successful merge of these two activities, the HR department should motivate recruiters. One of the ways of doing this is by linking a significant amount of the earnings to the conduct of a successful recruiting. Moreover, the compensation professionals should be encouraged to conduct comprehensive salary surveys within the geographical region to determine the market compensation(Regis 2008 p.97). CONCLUSION. Successful recruiting and compensation undeniably demands integrated team work. A high level of cooperation and team effort between the two interlinked HR departments is necessary to attain optimal results. Each professionals in these departments needs to understand the direct impact that their actions have on each department and the overall success attainable for the entire organization if they would work together. Recruiters ultimately require a highly accountable compensation department. Similarly, the compensation professionals require prudent recruiters who ensure only the very best talent is incorporated into the organization(Armstrong 2010, p.115). Altogether, these two activities clearly play a pivotal role in promoting the strategic success of a business and further in ensuring that organizations maintain competitive advantage in the highly competitive and dynamic business world. REFERENCES. ARMSTRONG, M. (2010). Strategic human resource management: a guide to action. London, Kogan Page. ASWATHAPPA, K. (2013). Human resource management: text and cases. New Delhi, McGraw Hill Education BILLSBERRY, J., SALAMAN, G., & STOREY, J. (2005). Strategic human resource management: theory and practice. London [u.a.], SAGE. HERNANDEZ, S. R., & O'CONNOR, S. J. (2010). Strategic human resources management in health services organizations. Clifton Park, NY, Delmar Cengage Learning. REGIS, R. (2008). Strategic human resource management and development. New Delhi, Excel Books. . Read More