Impact of HRM Practices on Employee Turnover

The assignment analyzes various scholarly articles that examine the relationship between human resource management (HRM) practices and employee turnover. It focuses on the impact of HRM practices on intention to leave, voluntary turnover rates, and financial performance in different industries, including service, non-governmental, tourism & hospitality, public sector, and banking. The analysis considers mediating factors like organizational commitment and strategic orientations within multinational companies.

STRATEGIC HUMAN
RESOURCE
MANAGEMENT

Table of Contents
INTRODUCTION....................................................................................................................................................3
TASK 1.....................................................................................................................................................................3
TASK 2.....................................................................................................................................................................8
CONCLUSION......................................................................................................................................................10
REFERENCES.......................................................................................................................................................11

INTRODUCTION
Strategic HRM have the same role as HRM but they have defined certain goals for
this process. It is the advance form of the human resource management (Armstrong, 2010).
Whenever they goes for recruiting or training they create a plan and decided some goals, so
through this there is a greater chance of the success because the training and hiring are done
by just focusing on the goals. All the assignment will be dealing with the various aspects of
the strategic HRM like its models, strategies and its role in the firm.
TASK 1
Relationship between Business Strategy and the Human Resource Strategy.
An organisation has to focus more on this department as well as developing a
relationship between the businesses strategy and human resources strategy. (Binyamin and
Carmeli, 2010). It have the role of analysing, evaluating the employees and motivating them
through various strategies. Human resource is the basic need of any business, whenever
business strategy is made it cannot be implemented without the support of the HRM because
they decide who would better fit for this strategy and what all resources this strategy will
need (Boselie, 2010). In the existing business there are no particular line between the HR and
business strategy. A bonding between them will give no term profit to organisation. For any
enterprise developing human capital is crucial for success. It involves executive leadership
teams consults with human resource officials to develop goals for HR and overall business.
HR people recruit right people by looking at the business operation. Those hired employees
will help them in achieving business objective. There can be two types of business
environment i.e., internal and external. External environmental factors like changes to the
economy, threats from competition, political factors, government regulations can directly
impacts the internal environment. It would lead to change in the management, employee
morale, culture change and any other financial change. An analysis can be done to find
relationship between them. All these have to align with the business strategy so that business
goals can be achieved. A PESTLE analysis can be done to know the external environment of
the business because they are the factors which are uncontrollable. These can bring a
company to downfall and their business would be badly affected by this. So they should make
their strategy and policies by keeping these elements in mind and this way they will able to
adapt in the changing market. They should clearly look at the political, economical, social,

technological, legal and environmental factors. Human resource department can find it easy
to look at the changes and inform other departments about it. The department will shape the
things according to it. With the SWOT analysis they can know their strengths and
weaknesses as they are the internal factors. When they will have more strengths then
weaknesses that would be an advantage for them. They will feel easy to adapt in changing
external surrounding.
Vertical Alignment and Horizontal Integration across the Organisation.
Alignment in the organisation make sure that every staff is working in same direction
and no one is deviating from the goals. All the training tasks are vertically aligned when tasks
for a higher skill level are built on behaviour and knowledge gained in the performance of
tasks at lower skill level.
Horizontal Integration is defined as the merger of the companies to form a single
chain. It is the situation where companies who are at the same level of production or sale in
the same or different sector combine together to form a single company. When two
competitors merge together they create a monopoly in the market (DeCenzo, Robbins and
Verhulst, 2010). Two companies who has the business of retail stores expanded in the UK
decided to merge together and started their business from a single name can be the example
of this. Every business has some goals and in order to achieve that businesses need different
working conditions to reach their respective objectives. Company's structure provides the
foundation for these working con conditions. If they want to design the structure an analyse
of the internal and external environment is required. When a company wishes to grow
through a horizontal integration, it is seeking to increase its size, diversify its product or
service, achieve economies of scale, reduce competition or gain access to new customers or
markets. Horizontal alignment and vertical alignment combined together can be the
controlling element. With the horizontal alignment manager can know the demand and they
can meet those demands in quick time. If any company wants to select one of the alignment
they have to look at the current environment and should look at the impact which it has on the
business. The horizontal alignment should be in balance with the vertical alignment.

Theoretical perspectives and models of SHRM.
SHRM has five different perspectives which include normative, critical, behavioural,
systems and transaction cost.
Normative perspectives is based on the concept of hard and soft HRM. Soft HRM
considers human capital as assets rather than resources and focuses more on the leadership.
Critical Perspective say that the resource management are much important than the
employees or human capital.
Behavioural perspective suggest that the behaviour of the staff could act as mediator
in between the strategy and organizational performance (Ferguson and Reio, 2010). This
states that the HR interference can control the employee behaviour.
Systematic Perspective describes that the management requires certain skills and
ability to perform the task. This defines the purpose of HR in handling the performance and
attitudes of employees.
Transaction cost perspective of HRM suggest that there might be some conflicts in the
workplace which could reduce the output, so their role is to inspect the employees behaviour.

Their are four strategic HRM models which are as follows :-
Fombrun:- Also called as the matching model concludes that organized structure is
managed in such a way that it maintains harmony. It had focus on four functions of HRM that
is selection, appraisal, development and rewards.
Harvard Model:- This model concentrate on six critical parts of HRM like the
interests, situational factors, HRM policy choices, stakeholders, HR outcomes, long term
consequences and feedback. The outcomes flow directly into the organization (Guchait and
Cho, 2010). Stakeholders include shareholders, management, employees unions, government
and the community it is operating in. Its policies influences flow of resources required by
business operations, motivation and employees. There are various situational factors which
can affect the its operation and they are labour market, technologies, business strategy and
management philosophy.
Guest Model:- This model claims that the HR managers has a specific strategies to
start which require specific practices and this will results on outcomes. It focuses on HR
strategy, outcomes, performance results and financial consequences.
The Warwick:- It centred around five elements like the outer, inner , business strategy,
HRM content. Those companies achieving an balance between the external and internal
contexts will grow more.
Strategy is basically the skill and planning that are used for governing resources.
There are two ways through which workforce can be managed one is the operational and the
other one is through strategic method. Through strategic the long term goals and making
corporate strategies for the future. In operational there is eye on the day to day work of the
company.
Classical Approach: With this there is analysis of the internal and external resources.
More focus is given on the “long term, formal and analytical planning”. The tasks are
simplified in this process.
Evolutionary Approach: By the use of the analysis the competitive environment so
that they can look for the competitive opportunities and risks.
Strategic perspectives of Best fit/Contingency, Best Practice/Universalist and Resources
Based View.

Best fit/ Contingency:- It explains that the most suitable way of management depends
on background of the situation and adopting only single style every time for a longer period
of time will not give much benefits. (Haines, Jalette and Larose, 2010). It focuses on
operational, marketing and HRM strategies. If says that HR strategies become more efficient
if it is developed by keeping internal and external environment. If they want to gain
competitive advantage, it has to work on cost reduction, developing new innovation, quality
improvement.
Best Practice/Universalist:- It relate a relationship with the HR practices and
organizational performance and are attached with the high commitment management. This is
used to maintain the quality of the product. There are some firms who has a specialization in
this area and provide ways through which an organization can be developed (Kusluvan and
et. al. 2010).
Resource Based View:- This model explains that a firm should search or look inside
their own company to find the sources of competitive advantage and stop looking at
competitive environment. Identifying or discovering the organisation's potential key
resources. Analyse the identified key resources on the basis of different criteria like what is
its value in the market. If it has value in the market then it means that it has rare. If that
valuable resource is owned by a single company so it will have competitive advantage.
Practices of Performance Management and Reward.
The reward system is based on the performance of the teams and the employees.
Certain reward like bonuses, team based incentives, profit sharing and distribution of the
shares can be some of the way of appreciating the employees (Perry, 2010). There can be
many benefits of this to the organization like it promotes team work, increase the interest of
the employees. Through reward system companies can increase the moral of their employees
and this will result in better productivity and high growth. Workers will also feel that they are
valued in the organisation and will try to give their best because they know their work will be
appraised. Firms needs to know what are the things which could encourage their employees.
A competitive environment will make sure that employees works more and in efficient
manner. The objective of the performance management is to help the employees in reaching
the top standard in the work performance. With this they can also assist employees in

identifying their strengths and weaknesses. What all things are coming as hurdle for the
organisation in performing well can be identified through this system.
Designing and Re-designing performance management system.
Companies need to give more attention to the performance management. While
designing the performance management system various things need to make sure. Decide a
purpose that what performance management process you want to achieve. Consider some
questions like what ideas can be implemented to increase the communication between the
officials and the workers (Progoulakin and Theotokas, 2010). Think over why you want to
redesign your system what are the previous goals which will be revived in this system. Try to
set regular goals which are useful through they can track the performance of the employees
and can motivate them regularly. Through checking performance of the employees, they can
evaluate the performance of all company. If organisation is reaching new heights, that means
performance of their workers are good. To increase the productivity all the staff should be
trained in their respective field. HR team should clearly monitor the working of each
personnel in the company.
TASK 2
Theoretical Perspectives on Employee Relations.
Trade unions are considered as lawful representatives of the employees (Quresh and et. al.,
2010). Management team should set a coordination between them and built a strategy in
which communication can became easy. Any conflict arising should be solved by a table
meeting and will include people from both sides. They can agree on a common platform and
demand. The development of the firm is impossible without labour management corporation
and industrial harmony. This also deals with relationship between various unions between the
state and the unions as well as those between the employers and the parliament. There should
be a common platform on which both the parties can sit together and can address each others
views. Through transparency in the process and decision they can maintain a healthy relation
between each other. The workers should also be involved in the decision making process.
Marxist Perspective:- The aim of this is to know the nature of the capitalist society. It
is also called as radical perspective. Marxist perspective is only limited to the workers and are

of only one sided approach. There should be no discrimination at the work place and any
problem arising should be sorted by making proper decisions.
Unitarist Perspective:- This perspective says that firm or organization is regarded as a
melodious group of people with one particular culture. All the employees working in the
organization shares or work for a common goal. It says trade unions are not required for any
understanding or to solve any conflict. Whatever conflict or issues caused is by the
communication gap or by the breakdown of the link. There is a single goal of each person
working in the organisation to focus on achieving higher productivity. So any issue or
conflict between them could result into disturbance. It will directly impact the decision
making of the HRM because things will become messed up. So each activities should be
sorted out according to their preference and priority.
There might be lots of issues which may arise at the workplace or these are the common
issues that a employees faces:-
 Interpersonal Conflict
 Communication issues
 Gossips
 Bullying
 Harassment
 Discrimination
 Low motivation and job satisfaction
 Performance problem
Role of the actors within the Employment Relation.
Organisational relation system is the relation between the employees and employers.
A sound relationship between the management and employees grow productivity and
motivate all organisation through a mutual trust (Rasmussen, Andersen and Haworth, 2010).
There can be three actors in this relationship they are employers, employees and the
government. Employers are the people who hire,recruit or terminate the labours. They are the
decision making body who take all the decisions like what will be the plans, goals, vision and
the policies. Employees are the people who work under the decision making authority and
follows the rules or orders of the higher level employees. They can be termed as labours or

staff. Whenever they face any issue, problems or whenever they want some changes they
appeal to the management team to look into the particular issue. Workers come together to
form unions against the management. Government is a body which governs the relation
between the employers and employee through creating laws to safeguard the rights of both
groups (Ridder and McCandless, 2010). All the three actors in the employment relation have
to coordinate with each other to ensure the smooth functioning of the organisation. On the
other hand the employees should also be loyal towards the organisation and work more
efficiently. The government should also make sure that both the government are given equal
priority. In the employee relation their can be three actors i.e., employee, employ and
government. Each of them have different role to play and a coordination between them is
necessary to achieve competitive advantage. Employee is the person who work in the
company in exchange of money, employ is the person who gives employment to employee
and government is external body which make makes law. Government is develops a plan to
encourage them to work together. They both have to understand their demand and
requirements to get success in whatever they are doing.
There are lots of ways through relation between the employees and employers can be
improved and for that the actors play a crucial role. They should involve team members and
these people should be assigned work according to their interests. There should be relation
between the actors and for that a coordination is required. All the people should organise
meetings regularly and put forward their suggestion. This way a mutual understanding can be
developed.
Changing nature of Employment Relations.
There are so many labour laws which are protecting the rights of employees.
Changing nature of employment relationship has its impact on the wages of the workers. As
the demand grown the organisation has also increased the production so that require more
labour they will need wages (Stavrou, Brewster and Charalambous, 2010). So conflicts in
relation with the total working hours and the are concerned issue in the relationship between
the employees and employers. Government is acting as a middle man in the relationship and
trying to sort out any issue or conflict. Labours need to have various skills for the work they
are doing because the advancement in the technology is a must step which need to be taken.

Companies are terminating the employees who are lagging behind in the required skills. In
earlier time when the issues of employees were hardly heard the workers felt marginalised
and they did not know where to put forward their demand. But as time changes and different
modes of communication platforms developed there was drastic change in this context. More
pressure and trade unions came into existence with the purpose of dealing with the issues
faced by the workers at the factories. The concept of group-ism can into the limelight and
employees saw this as an opportunity to put forward their demand in front of the
management. Companies knew that employees are the most important stakeholders in the
business so it is necessary for them to satisfy their needs by taking care of their requirements.
Staff are considered as the assets for the company so all the things are done to make them
happy. Motivation, training and appraisal are provided to them.
Mechanism of employee participation and employee voice.
Employee voice refers to the participation or involvement of employees in impacting
the decisions of the organisation. . When a employee is facing discrimination or any other
issue in the employment relation he goes with to the leader of the organisation or the trade
union and address his issue (an den Born and Peltokorpi, 2010). When employees and
employs are clear with each other demands organisation make more profits and see increase
in revenues. Human resource management prime duty is to build a coordination between
them and make them engage in different activities. More they will do this more interest will
they give in different operation. Whatever demands employs have should be addressed
quickly to avoid future uproar. A feedback system should be introduced so that they can feel
free to put their views. For example; some of the employees are not happy with the working
environment because they have discrimination. So they can complain it to the management
about it. After this they can management sets a enquiry and finds the issue. After analysing
the problem they take certain decisions which aims at improving working conditions and
environment.
CONCLUSION
In the above assignment Three strategic perspectives of best fit/contingency,best
practice/universalist and resource based view are explained. Specific HR practices of
performance management and reward has been written down which explains that how

rewards are useful for the performance of the employee. Coming to the task 2 it basically
focused on the employment relation and its sub categories and applications. How the nature
of employment relation is changing and what is the use of the employee voice and
participation.
REFERENCES
Books and Journals

Armstrong, M., 2010. Armstrong's essential human resource management practice: A guide
to people management. Kogan Page Publishers.
Armstrong, M., 1928. Armstrong's handbook of strategic human resource management.
Taylor and et. al., 1952. Human resource management. Harlow Publishers.
Leopold and et. al., 1951. The strategic managing of human resources.
Binyamin, G and Carmeli, A., 2010. Does structuring of human resource management
processes enhance employee creativity? The mediating role of psychological
availability. Human Resource Management.49(6). pp.999-1024.
Boselie, P., 2010. Strategic human resource management: A balanced approach. Tata
McGraw-Hill Education.
DeCenzo, D.A., Robbins, S.P. and Verhulst, S.L., 2010. Fundamentals of human resource
management. John Wiley & Sons, Inc..
Ferguson, K.L and Reio Jr, T.G., 2010. Human resource management systems and firm
performance.Journal of Management Development.29(5). pp.471-494.
Guchait, P and Cho, S., 2010. The impact of human resource management practices on
intention to leave of employees in the service industry in India: the mediating role of
organizational commitment. The International Journal of Human Resource
Management.21(8). pp.1228-1247.
Haines III, V.Y., Jalette, P and Larose, K., 2010. The influence of human resource
management practices on employee voluntary turnover rates in the Canadian non
governmental sector. ILR Review.63(2). pp.228-246.
Kusluvan and et. al. 2010. The human dimension: A review of human resources management
issues in the tourism and hospitality industry. Cornell Hospitality Quarterly.51(2).
pp.171-214.
Perry, J.L., 2010. A strategic agenda for public human resource management
research. Review of Public Personnel Administration.30(1). pp.20-43.
Progoulaki, M and Theotokas, I., 2010. Human resource management and competitive
advantage: An application of resource-based view in the shipping industry. Marine
Policy.34(3).pp.575-582.
Quresh, T.M and et,al., 2010. Do human resource management practices have an impact on
financial performance of banks?. African Journal of Business Management.4(7).
p.1281.
Rasmussen, E., Andersen, T and Haworth, N., 2010. Has the strategic role and professional
status of human resource management peaked in New Zealand?. Journal of Industrial
Relations.52(1). pp.103-118.
Ridder, H.G and McCandless, A., 2010. Influences on the architecture of human resource
management in nonprofit organizations an analytical framework. Nonprofit and
Voluntary Sector Quarterly.39(1). pp.124-141.
Stavrou, E.T., Brewster, C and Charalambous, C., 2010. Human resource management and
firm performance in Europe through the lens of business systems: best fit, best
practice or both?. The International Journal of Human Resource Management.21(7).
pp.933-962.
van den Born, F and Peltokorpi, V., 2010. Language policies and communication in
multinational companies: Alignment with strategic orientation and human resource
management practices. The Journal of Business Communication (1973).47(2). pp.97-
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