Strategic HRM and Organizational Effectiveness

This essay critically analyzes the impact of strategic HRM on organizational effectiveness. It examines theories, empirical evidence, and ethical aspects of SHRM. The research suggests that strategic HRM plays a crucial role in improving organizational performance.

Assessment Task 1: Critical Analysis Essay
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Introduction
The effective management of human resources is regarded to be highly critical in
promoting the success and growth of a business organization. The linking of the human resource
functions as per the strategic objectives of the organization is highly essential for enhancing the
organizational effectiveness. Organizational effectiveness can be assessed by analysis of its
ability in achieving the desired outcomes. It depends on the presence of right people ate the right
jobs and time to meet the external changing requirements and this can be ensured by the presence
of an effective HRM strategy within an organization. In this context, the present essay is
developed for analyzing the thesis statement that whether strategic HRM contributes to
increasing the organizational effectiveness. This has been carried out through conducting an
analysis of the strategic HRM theories and by providing relative empirical research evidence.
Critically Analyzing the impact of Human Resource Management Strategy on
Organizational Performance
The research by Albrecht and Bakker (2015) has stated that the major objective of
business organizations is to achieve high level of competency in the external marketplace for
promoting sustainable growth and development. This can be achieved through developing
distinctive set of employment policies, programs and practices through ensuring the presence of
an effective HRM strategy. This is because employees are responsible for promoting
organizational development through improving its productivity and thus profitability. Employees
are regarded as the most valuable asset promoting an organization to achieve competitive
advantage. Therefore, the effective management of human resources is regarded as highly
important for improving the organizational performance and development. The strategic role of
human resources is very important for influencing the attitudes and behaviors of employees
contributing to organizational growth and development (Albrecht and Bakker, 2015).
Richard and Johnson (2010) have examined the research studies conducting in relation to
examining the impact of SHRM practices have argued that there is higher impact of the strategic
human resource management on the productivity, financial performance and employee turnover.
Strategic human resource management can be regarded as the practice of attaining, developing,
rewarding and retaining employees for improving the organizational performance. It can be
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regarded as strategies developed for aligning the employee goals with the long-term objectives of
an organization by driving improvement in the strategic human resource planning process. The
aligning of the human resources with the strategic goals and objectives leads to driving the
business performance through developing a healthy workplace environment (Richard and
Johnson, 2010). In this context, Ashraf (2012) has stated on the basis of the process approach
theory of organizational effectiveness that that an organization need to uses its resources in an
optimal manner for achieving the desired outcomes. The organizational effectiveness is
dependent on its efficient internal health that is dependent on a healthy workplace environment.
There is need for developing relations based on trust, honesty and goodwill between the
employees for improving their morale and achieving higher organizational performance. The
importance of developing a committed and dedicated workforce team is very important to
improve the internal capabilities of an organization and thus driving its effectiveness.
The study by Schuler and Jackson (2014) has regarded the most effective function of
strategic HRM can be regarded as strategic recruitment and selection that has important role in
driving the employee performance and influencing the organizational outcomes. The presence of
employees having relevant knowledge, skills and attitudes is very critical for improving the work
performance. Thus, strategic staffing can help in reducing the operational costs associated with
poor performance, high staff turnover and customer dissatisfaction. The inappropriate selection
of selection can result in negatively impacting the organizational performance and thus
sustaining the organizational growth (Schuler and Jackson, 2014). Also, there is higher
importance of providing effective training and development programs in improving the
employee and thus organizational performance. The training and development ensures that there
is presence of right people at the right job and leads to improving the quality of work
performance of employees. The goal of the training sessions is to enhance the employee
motivation to carry out their various roles and responsibilities in an effective manner. This is
because its leads to significant improvement in their skills and expertise and providing them
chances of career advancement and growth. The increased employee performance contributes in
optimizing the productivity of an organization (Cascio, 2019).
As per Fitz-Enz and Mattox (2014) the strategic compensation is also used by the
companies for improving the work performance of the employees. The human resource
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managers tend to incorporate the use of performance based returns for assessing and providing
rewards to the employees. It can be regarded as the most effective encouragement strategy that
can be adopted by the human resource managers for motivating the employees to attain a desired
set of objectives and goals. The use of performance based compensation can effectively lead in
aligning the employee goals with the organizational objectives. In this context, it has been stated
by the goal-setting theory that employees can be motivated to attain a desired set of objectives
that can contribute to better task performance. The goals such as attaining increased rewards or
incentives can provide encouragement to the employees regarding work motivation. The
alignment of the employee goals with the organizational goals can have a positive impact on the
organizational performance as stated on the basis of goals-setting theory of strategic HRM (Fitz-
Enz and Mattox, 2014).
Kramar and Holland (2015) has argued that the role of performance management and
appraisal systems can be regarded as highly critical for providing help to the organizations for
attaining their productivity goals. The performance management framework can enable in
improving the employee performance and meeting the organizational goals. The performance
management system of an organization emphasis on conducting reviews of employee
performance on regular basis and thus identifying the gaps in their performance that need to be
removed for promoting organizational growth. The feedback regarding the employee
performance needs to be communicated to all the employees so that they can gain awareness
regarding the improvement required in their work performance. The sue of performance
appraisal feedback system such as 360 degree feedback enables in evaluation of an employee
performance on the basis of feedback received from colleagues and through self-evaluation. The
use of such performance evaluation system enables the human resource managers to compare the
performance of employees against the standard set of objectives and goals and thus held in
designing adequate strategies to improve their focus (Kramar and Holland, 2015).
Çalişkan (2010) has argued that the two-factor theory of motivation has identifying two
separate set of factors that can assist the human resource managers in improving the employee
commitment and thus organizational productivity. These are known as motivation and hygiene
factors that are required to be present within the workplace for improving the employee’s
performance. The hygiene factors need to be present as its absence could result in causing
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employee dissatisfaction. The factors are wage, salaries, working conditions, job security and
adequate company policies. On the other hand, there are separate set of motivational factors that
need to be present for achieving personal growth and satisfaction. These factors are challenging
work, job status, advancement opportunities, responsibility, sense of personal growth and
recognition. Thus, it can be said that strategic human resource managers need to ensure the
presence of both motivators and hygiene factors for improving employee morale and
commitment level towards an organization (Çalişkan, 2010).
In this context, empirical evidence has been provided by Alaraqi (2017) by adopting the
use of questionnaire and structural equation modeling for analyzing the relation between SHRM
and the organizational performance,. The study is conducted on 15 oil companies within Iraq and
it was inferred with the use of Structural Equation Modeling that SHRM practices such as
selection, training and compensation have a direct impact on the organizational performance. In
addition to this, ether has been wide scientific researches held within the US and the UK in this
content has inferred that HRM has a positive impact on improving the bottom line productivity.
Also, Abioro (2013) have also provided empirical evidence in relation to examining the effect of
employee motivation on the organizational performance. The study adopted the use of
questionnaire for collection of primary data and organizational performance is regarded as
dependent while employee motivation is independent variable, The testing of different
hypothesis with the sue of descriptive statistics have inferred that there is a positive impact of
employee motivation on the organizational performance.
Strategic human capital framework
The strategic human resource management main aim is to facilitate and achieve the
organization objectives through the development of consistent policies, programs and aligned
collection of practices. As per the views of Jackson, Schuler and Jiang, 2014, strategic HRM has
been defined as study of HRM systems or its subsystems and its relationship with elements of
organization system that includes organization’s external and internal environment and its
stakeholders. So, it can be said organization effective is critically dependent upon the strategic
framework used for managing the human capital. Author has provided an aspirational framework
for defining the multitude of strategic HRM elements and to incorporate all these elements in the
empirical piece of work (Jackson, Schuler and Jiang, 2014).
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(Source: https://smlr.rutgers.edu/sites/default/files/documents/faculty_staff_docs/Aspirational
%20Framework%20for%20Strategic%20HR%20Annals%202014%20%282%29.pdf)
There are many evidences that prove that implementing the right strategic human capital
framework will help the management with required people to increase the organizational
effectiveness. In this context, Belhaj and Tkiouat, 2017 have provided that human capital should
be managed with strategic vision i.e. the need of human capital must be aligned with general
strategic business. Hence, it has been proved that strategic human resource management plays an
important role in achieving the vision and objectives of an organization through providing
required employees and skills. Author, further analyzed in its research that SHRM begin with
developing the common business strategy, common goals and common vision so that whole HR
system can be developed on the ground which is effective and help in achieving the vision of
organization. Author has provided general strategic human capital framework that begin with
strategic planning and uses organizational quantitative and qualitative data to define the HR
strategy (Belhaj and Tkiouat, 2017). Below is general strategic framework and proper steps:
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(Source: https://thescipub.com/pdf/10.3844/ajassp.2017.286.293)
Ethical Aspect of Strategic Human Resource Management (SHRM)
The human resource managers also need to place high emphasis on developing ethical
human resource policies ad programs to overcoming the possibility of employee conflict and
maximizing their organizational commitment level. Ethical issues are regarded as the most
difficult one for handling the human resource management issues such as employee
remuneration, benefits, industrial relations and health and safety. The ethical HR issues can be
depicted as follows:
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(Source: https://www.omicsonline.org/open-access/relationship-between-shrm-and-organizational-
performance-among-iraqi-oil-companies-2375-4389-1000241.php?aid=87590)
 Compensation issues: These are the ethical issues relating to determining the adequate
salaries and wages for the employees. It is highly important for HR managers to develop
adequate compensation system that leads to improving employee productivity in support
of the top management (Pease, Byerly and Fitz-Enz, 2015).
 Discrimination: It is highly important for HR managers to draft specific policies and
programs that prevent discrimination of the employees on the basis of their race, gender
of origination to overcome gender equality (DeVoorde, Paauwe and Veldhoven, 2012).
 Employment Issues: The HR managers need to maintain fair employee hiring and
recruitment policy to prevent the ethical issue of recruiting someone on recommendation
 Performance Appraisal: the performance appraisal process should be fair and transparent
with employees receiving proper feedback regarding their performance and regarding the
employees on the basis of their performance. There should be no discrimination among
the employees regarding their promotion and increase in salaries and wages but it should
be strictly according to the performance appraisal system (Boxall and Purcell, 2016).
 Safety and Heath: It is highly important for the HR managers to ensure that there is
presence of proper occupational risk mitigation and emergency plans for ensuring the
safety and well-being of all employees. The development of a healthy workplace with
adequate infrastructure and technologies and systems is the responsibility of HR to
provide proper condition of work to the employees.
 Restructuring and Layoffs: The conditions and policies regarding the layoffs and
restructuring should be proper and well-communicated to the employees (Towler, 2018).
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Conclusion
It can be stated from the overall discussion held within the essay that human resources
are a source of promoting competitive advantage to the firms. The human resource strategy have
a critical role in improving the organizational performance through driving employee
motivational and commitment level. The HR role is highly important for an organization in
developing a committed and dedicated workforce team and thus influences the organizational
performance. As such, it can be re-stated on the basis of overall discussion that strategic HRM
contributes largely in improving the organizational effectiveness.
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References
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Gerencia Ciencia 1(3), pp. 18-26.
Alaraqi, A. 2017. Relationship between SHRM and Organizational Performance among Iraqi Oil
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