Strategic Hrm

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Critically examine the potential role(s) of HR and HR professionals in contemporary organisations.

John Storey defined human resource management (HRM) as “…a distinctive approach to employment management which seeks to achieve competitive advantage through a strategic deployment of a highly committed capable workforce, using an integrated array of cultural, structural and personnel techniques” (Storey 1995, citied in Billsberry et al 2005). Using Storey’s definition as a starting point this essay will break down the way in which HRM has developed to become a part of business strategy. To assess the role of HRM professionals within a company this essay will look at the relationship between the use of human resources (HR) and the performance and success of an organisation. Focusing on popular models of HRM that are widely used, and seeing how HR policies are connected to performance. Though there are no definitive studies to show that there is a direct link between HRM and performance in a company, this essay will use examples and theories to show that there is a strong link between them. Human resource specialists are no longer just seen as personnel managers looking after solely administrative tasks, their role in and understanding of organisational strategies has allowed the profession to excel and become an integral part of the business structure. HRM professionals now work with managers to plan and control strategy implementation within a workforce. This shift in the role of HR professionals has occurred over the last twenty years or so where there has been a shift to focus more on recruitment, selection and training of staff to increase performance and effectively increase the profitability of a company. This can be summarised by Guest et al, “greater use of HRM is associated with lower labour turnover and higher profit per employee but not higher productivity” (Guest et al 2003, pg. 291).

The remit of HRM is yet to be specifically defined however using the soft and hard models of HRM it can be seen the two main areas of HRM, a combination of both approaches are usually used within a business. Soft HRM is model in which an individual’s skills and talent is utilised and motivational theory Y is mostly applied in this situation, this follows a ‘high commitment work system’ (Walton, 1985). This model aims to have a level of commitment from employees which will bring out self-management traits, giving the employee a level of trust. This in turn means that the employee has a strong communication pathway with his or her manager and they have an element of flexibility within their roles (Storey et al 1993). The soft approach will use more lucrative recruitment and selection processes.

Hard HRM focuses on “the quantitative, calculative and business-strategic aspects of managing the ‘headcount resource’ in as ‘rational’ a way as for any other factor of production” (Storey 1992 p.29 cited in Truss et al 1997 pg. 55). This approach is believed to be the most cost effective way of HRM, using elements of theory X, resources are acquired at a very low cost and used to their maximum, almost seeing employees as machines with goals to meet, the recruitment and selection process here would be more skill application based that skill development based. The structure of an organisation and the HR arrangement are both highly dependent on the organisation/business strategy. This model then has a top down system of HR management and includes little employee engagement, which does not promote citizenship or motivation. To an extent organisations use a combination of these two models to help achieve their strategic goals depending on the type of company, so suggesting that a company uses one or another is a limitation of this approach. HRM is now considered to be a major contributing factor to the strategic goals of a company according to Ulrich’s model the role of a HR manager encapsulates four key areas which are all eventually linked...
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