HR Differentiation: Essential Yet Challenging Requirement of Strategic Decision Making

HR Differentiation

In today’s competitive business world, the importance of effective human resource
management has increased substantially because the requirements of talented employees
have increased across the globe. The corporations focus on effectively managing their
human capital by implementing strategies policies in order to retain qualified employees in
the organisation which provides them a competitive advantage over their competitors. The
concept of HR differentiation is gaining popularity among organisations as more and more
companies adopt this method to improve their strategic HR policies and achieve common
corporate objectives. This concept focuses on the fact that HR service delivery in different
sections of a company differ from each other, therefore, implementing an HR trend towards
differentiated delivery system ensure that the needs of each segment of employees is
considered by the HR departments (Gelens et al., 2013). This essay will evaluate the concept
of HR differentiation and understand why it is essential yet challenging requirement of
strategic decision making. Moreover, this essay will consider the concepts of various HR
architecture and strategic choice along with their impact on various stakeholders in dynamic
organisational contexts.
The HR systems of a corporation are valuable when the HR department is able to recruit
highly talented people at the right time and build strong long-term relationships with them
along with optimising the quality of their interactions (Krausert, 2017). These policies enable
the organisation in gaining a competitive advantage over its competitors by leveraging its
HR capabilities. The concept of HR differentiation is playing a crucial role in managing
employees across the globe. The HR policies have come a long way due to divergence and
convergence view of the HR management which focuses on incorporating the HR policies
along with overall strategies goals of the company. The HR researchers focus on
implementing Best fit, and best practices approach in the corporation in order to align the
goals of the organisation along with strategic policies. The HR differentiation is considered
as the new strategic imperative which is focused on addressing the needs of different
segments of employees by evaluating the challenges faced by them and incorporating them
with the policies of the company. Disney is a good example since the company has
incorporated HR differentiation policies in the company due to which it invests more time
and resources in supporting, hiring and integration the employees who are responsible for
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cleaning the parks and people who wear the suits to become characters from movies and
television series (Cook, 2010).
This concept provides that employees operate in small posts have relevancy in the
organisation as well, and their performance influences the overall operations of the
company. In the case of Disney, the spot clean parks and friendly interactions with their
favorite characters is the main reason due to which the Disneyland is so popular among
children as well as adults. The concept of HR differentiation is a new way of thinking about
HR strategies in a company. Conceptually, the new way to address the HR issues is referred
as Differentiated HR. As per this concept, the HR department of the corporation invests its
resources on a differential basis while at the same time focusing on the position potential of
employees who are the key reason for delivering value to the organisation (Marescaux, De
Winne and Sels, 2013). These roles have a significant impact on the organisation’s strategy;
therefore, it is important that these factors receive more focus and utilisation which are
designed to optimise their contribution to the company. These policies are opposite to the
traditional approach of HR policies which provides that everyone should be treated at the
same level. It provides that HR managers should focus on driving the value of the employees
by engaging with them in order to achieve the goal of the company (Xiaolang, Shanshi, and
Hongli, 2015).
Although the implementation of HR differentiation policies has become an essential
requirement, however, there are various challenges faced by companies relating to strategic
decision making. One of the key challenges which are faced by the HR department is the
limitation of resources. The HR differentiation requires the HR department to focus on the
role of different segments of employees on the overall performance of the enterprise
(Schmidt, Pohler and Willness, 2018). They are also required to assess the needs of
employees and implementing separate policies to achieve the concept of HR differentiation.
However, these policies require the HR department to invest a large portion of their
resources and time which makes it difficult for the company. Most corporations did not
prefer to invest heavily in HR practices since they believe in investing in other resources
such as machinery or technologies. However, studies and examples of leading corporations
have shown that effective and positive relationship with employees is a successful way to
achieve the organisational goal.
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