Term Paper: Strategic HRM Analysis Human Resources

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[. . .] Many outside of the Strategic paradigm have suggested that the shift to this new system of business governance will only work in specific case, but the research belies that assumption. Taking the size argument for an example, a great deal of research has been conducted on whether this is a factor in implementing SHRM in a firm. "In a study of 293 American firms, it was found that strategic HRM practices such as total quality initiatives, empowerment programs, and employee job design programs positively influenced firm performance" (Tocher & Rutherford, 2009). This was a study conducted with large, multinational firms that were tasked with implementing small SHRM initiatives. All of the firms announced some positive gains as a result. In another study, "U.S. steel mini-mills, it was found that mills that emphasized strategic HRM practices such as formal employee participation programs, team-based problem solving, and detailed employee socialization, experienced higher productivity, as well as lower turnover and lower scrap rate in comparison with mills that did not emphasize such practices" (Tocher & Rutherford, 2009).

Thus, small and large firms have found that SHRM practices gave the firms positive productivity improvements. The province of British Columbia, with its 30,000 employees, also discovered the utility of using SHRM practices and SME's were also tested in some studies with positive results. It does not matter the size or types of organization, strategic methods have been found to be efficacious.

A final thought comes by way of research conducted by Guido Strunk in 2009. He says that;

"According to strategic management [research] it inevitably involves some thinking and planning ahead of time & #8230; As the business environment becomes steadily more turbulent, it is increasingly problematic for firms to create clear, coherent strategic plans. Thus, measurements of "turbulence" & #8230; may be of some use for monitoring not only individual careers but also the business ."

Strunk is pointing out that employees are not static and that they are not alike. He is also saying that the business environment basically functions as a distinct individual with a definite culture and personality. Because people, and organizations, are prone to chaos, it behooves the HR department to take this "turbulence" into consideration during planning phases.


One of the functions that HR has been left out of in the past is planning the course that the business will take. This seems counterintuitive because HR does work closest with who the employees are and how they can be supported, but that has been a fact of the old business paradigm. However, the planning function of HR has often been quieted, even in HR circles, because it requires much more of the department. According to Schuler and Jackson (2009);

"HR professionals who accept responsibility for the design and management of HRM systems must develop an understanding of HR that cuts across all HRM activities (policies and practices). That is, strategic HRM implies that HR professionals must nurture their capacity to operate as HR generalists rather than HR specialists."

The overall scope of this practice means that the HR department will have a more important place in the company, but it also means that the individuals within the HR department will be tasked with more work. Of course, the only consideration should be for the company's employees, but that is often not the case. But the businesses themselves may make the change necessary as they realize "HRM research has [demonstrated] that more sophisticated HRM systems create more economic value" (Schuler & Jackson, 2005). Research has also determined if "staff is developed in strategic capabilities such as business knowledge, strategic mind-set and change process skills .. [they] add value to line managers and senior executives" (Teo, 2000). Since the stated goal of any business is to make money, when the executives discover that this new HRM focus adds actual monetary value, they will demand that these changes be implemented.

However, this research has not become a part of the thinking on most stakeholders in global business. These stakeholders question "the relevance of the function and consequently the appropriateness of the considerable resources expended & #8230; [which] places practitioners in an environment of defense and justification, rather than one of being able to move forward quickly and be involved in planning to meet organizational goals" (Teo & Crawford, 2005). The issue here is that "the level of strategic HRM effectiveness is influenced by the strategic role played by the senior HRM practitioner in the strategic management process" (Teo & Crawford, 2005). Unfortunately, many of these senior managers of HR are not themselves versed in the efficacy of strategic practices vs. old school HRM. Thus, they do not advocate for a greater planning role for HR. This makes little sense as it has been shown already the value of the HR function within a company, and external to it. Again, "Recent studies have suggested that a strategic approach to HRM offers an opportunity for practitioners to break out of the personnel management mold, and that it offers a logical framework for practitioners to add value in the HRM function" (Teo & Crawford, 2005). This finding should be trumpeted to HR managers because the greater value-added means that the HR manager becomes a more important cog in the company machine.

Another aspect of the SHRM best fit and practices models is that they help to influence employee retention to a great degree. Intan-Soraya and Chew (2010) found;

"Applications of the resource-based theory to strategic HRM have shown how HRM policies and practices can be used to effectively acquire and retain human resources with rare, and difficult to imitate characteristics, and to develop individual competencies into organizational competencies capable of becoming sources of sustainable competitive advantage to firms."

Employees that have skills vital to the company can be hard to retain if they are courted by others in the industry. That is why many advocate a bottom-up, as opposed to a top-down style of management. When the employees are involved in the strategic decisions, they are more committed and willing to work harder to see the company become a success. However, top-down management often comes across as a "my way or the highway" authoritarian approach that does not lead to employee satisfaction. Research has demonstrated that SHRM practices can be a boon in maintaining employees if the proper steps are used from the recruiting process through company decision making. It must be understood that decisions impact the employees to a great degree, so they should be involved in the decision making process.

Employee Relations

How exactly does SHRM influence employees and their relation to the company? It would seem that if employees believe a company treats them poorly, there is very little that the HR department can do to change that attitude. But, research has shown that this is not the case. Due to the varying nature of the functions of the HR department, they have a greater effect on how employees view a company than any other department as a whole. When employees discuss their dissatisfaction with the actions of the company, they are generally discussing functions of the HR department. Thus, there needs to be a method by which employees change their attitudes toward the HR department and realize that it stated function is to benefit them. By implementing SHRM, the company invariably accomplishes this goal.

Various researchers, with different goals in mind, have come to the same conclusion, workers matter in the scheme of a company. While this may not come as a great surprise, it may be surprising to see what was discovered. Cunningham and Kempling (2011) found that "Skilled and knowledgeable workers who are not motivated are unlikely to contribute any discretionary effort. Motivated workers who lack skills may contribute discretionary effort with little impact on performance." This means that the services of the HR department are working to a greater degree for the some employees than for others. Skilled employees are the most difficult to retain and their loss has the greatest impact on the company. The goal of SHRM is to motivate every employee, and to seek employees who have an attitude and commitment that fits within the parameters needed within the specific company's culture. Teo (2000) stated "HRM implies a strategic approach to the people management function, which emphasizes the strategic direction of the organizations." HR is an important function within the company because its policies directly impact where the employees are presently, and where they are going in the future.

One particular study found that "The Australian experience with strategic HRM shows health care as a service industry that is not particularly people focused and this has led to greater job insecurity and lower job satisfaction" (Hogan, Moxham, & Dwyer, 2007). This can be said of many industries and has been noted in many… [END OF PREVIEW]

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