HRM Strategy

This article discusses HRM strategy, Amazon's external and internal environment, evolution of HR functions, critical roles of HR, and future trends in HRM. It also highlights the importance of psychological contracting, high-involvement work system, and HR outsourcing. The article concludes with the HR scorecard and the competencies required for SHRM professionals.

Running head: HRM STRATEGY
HRM Strategy
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Answer 1
Planned indicates deciding and making arrangements for any action in advance for the benefit of
an organization. Future indicates time period coming ahead. Competitive advantage refers to
the strategic edge, based on resources or capabilities that a firm achieves when other competitors
cannot imitate that. Changing environment refers to the dynamic situations in which an
organization operates. The conditions or situations are internal and external, which influences the
actions and performances of an organization, and these are extremely dynamic. Configuration
of resources and competencies means adaptation of the capabilities of the organization based
on the available resources and the environment. This is done to meet the organizational goals and
objectives according to the resources and competencies. Stakeholders are those who have
interest in the organization and its growth. Stakeholder expectation refers to the hope of
meeting their needs by the organization. All these concepts imply that a business has
stakeholders, whose needs must be fulfilled by planning and taking actions with the available
resources and capabilities in a dynamic working situation.
Answer 2
Amazon is the world’s biggest e-commerce retail giant. External environment includes overall
industry trend, industry structure, similar business, competitors and customers. Analysis of
external environment leads to the information on the opportunities and threats for the firm.
Opportunities of amazon are product differentiation, global expansion, acquisitions and opening
of physical stores like Amazon Go. The threats are the low barriers to entry in e-commerce

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business, government regulations in different countries and local competition from other e-
commerce sites.
Internal environment includes resource, capabilities and core competencies, value chain, and
7S framework, that is, strategy, structure, systems, styles, skills, staff and shared values. This
analysis results in the information on strengths and weakness. Strengths of Amazon are cost
leadership, efficient delivery system, customer centric approach. The weaknesses are very small
profit margin, leading to unprofitable business in some location, failure of innovations, like the
Fire TV and Fire phone, and thus negative reputations for its product innovations.
Answer 3
HR functions have been existing in the business world since long but in different forms and
perspectives. These functions evolved overtime to meet the demands of the technology and
business environment. Up to 1940s, HR functions were present in the form of labor welfare. The
environment involved minimum government intervention, owner’s attitudes and beliefs played a
major role in labor exploitation, and the functions were passive and reactive. During 1950s to
1960s, there was a continuous economic and job growth, and employee motivation and ethics,
job classification, growth of the trade unions and development of the job categories occurred,
focusing on personnel admin or industrial relations. In 1970s to 1980s, the concept of HRM was
developed. During this time, labor legislations developed and professionalism emerged, leading
to the development of framework for the HR functions. Between 1990s and 2000s, growing
globalization, competitiveness, outsourcing, cost reduction and technological advancement
required strategic HR activities and management functions. Since 2010, smart or digital HRM is

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in practice that involves innovation, creativity, agility, ambidexterity, sustainability, labor
mobility and diverse workforce.
Answer 4
The seven key themes of Strategic HRM (SHRM) as proposed by Lengnick-Hall et al., 2009 are:
1. Contingency perspectives & fit: HR strategies are dependent and aligned with business
strategies, settings like manufacturing, public, private, service, small and large act as
contingencies and the competing frameworks through universal and contingency
perspectives.
2. Shift in focus from managing people to creating strategic contributions: this focuses
on the resources of the firm, strategic contribution of the HR practices, and strategic
importance of the human and social capital
3. HR System Components & Structure: This focuses on organisational performance as a
whole and not on individual performance and includes high performance system.
4. Expanding the Scope of SHRM: This explores multiple stakeholder perspectives and
international context
5. Achieving HR Implementation & Execution: Translation of rhetoric into practice
6. Measuring the Outcomes of SHRM: Balanced scorecard approach, metrics and
analytics are applied

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7. Research Methodological Issues: This is evidence based and examines reliability of the
research approach, research instruments and interpretation; and includes quantitative and
qualitative data.
Answer 5
Psychological contracting refers to a set of unrecorded reciprocal or mutual expectations
between the individual employees and the organisations. The needs of the employee and the
organization should be coordinated in this contracting and it assumes that there would be long
term commitment between the employees and the organization even though the employees
change over the lifetime. The moral traits included in this contracting are equity, reciprocity and
fairness. These traits increase employee motivation. Employees believe or expect that their
efforts will be successful, that will be recognized and rewarded, and those rewards would be
worth of their efforts. Psychological contracting allows the employer to reciprocate to the
employee’s expectations. If they follow equity in work culture and maintains fairness in
recognizing the efforts of the employee and give him justified rewards, then that would increase
the motivation of the employee. If the employer does not reciprocate to match the needs and
expectation of the employee, then he gets demotivated.
Answer 6
High-involvement work system refers to the system in which employees are empowered and
given more responsibilities to increase their power of decision making. High-commitment work

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system refers to system in which employees are highly committed to perform and accomplish the
goals and take responsibilities to improve their skills and efforts. High-performance work
practices are those, which are aimed at enhancing the skills and performance of the employees ,
such as, incentives, training, remunerations, performance appraisal, flexible working condition,
grievance address, information sharing, job security, promotion, etc. All these systems are highly
valued as these are integrated and have the broad objective of improving the individual as well as
organizational performance. The employers empower the employees to motivate them and in
turn, they put effort through their commitment towards the organization. During this process, the
employees go through high performance work systems, which enhance their skills and improve
performances.
Answer 7
The critical roles of HR functions are to develop and manage the human resources or human
capital of the organization by applying various strategies and techniques. It should do correct
selection and recruitment, arrange relevant training to enhance their skills, ensure a supportive
work environment, facilitate strategy creation and implementation, establish communication,
ensure work-life balance to increase productivity, develop HR metrics, and plan and implement
ethics and CSR activities.
The HR practitioners should have the following competencies to fulfill the above mentioned
functions. They should be strategic positioner to understand the business goals and objectives
and plan the HRM accordingly. They must be credible activist, building interpersonal
relationships, capacity builder, HR innovator and integrator, and should have the ability to

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implement required changes, and differentiate between the strategic and administrative work to
increase effectiveness and efficiency among the human resources.
Answer 8
HR outsourcing is a fastest growing trend. It helps in achieving operational efficiencies, access
to expert individuals, greater control in process, risk reduction, and it enables a major factor, that
is, international mobility of labor. However, it faces the challenges of long term impact on the
costs, lack and loss of organizational knowledge during labor mobility. On the other hand,
devolution of HR to the line managers is another new trend, in which the line managers are
delegated with the task of HR management. These integrations are beneficial for strengthening
the capabilities of the HR professionals. The reasons are that, in this devolution and outsourcing
process, the HR managers can focus on specific segments of the organization. The line managers
can look after the strategic functions along with the human resource development in specific
teams, which reduces cost and effort from the HR department. At the same time, the HR
professionals can look after the overall HR development and labor mobility by aligning with the
line managers. Thus, these functions are beneficial.
Answer 9
Technological advancement sweeping all the industries and the HR activities are also no
exception. In the digital world, the need for strategic management of the human resources is
more crucial. Hence, digital HRM deals with emerging technologies, such as, SMAC (social,

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mobile, analytics and cloud) and other technologies to deliver efficient and effective HR
services. Technology covers the operational or transactional HR activities, that includes the
activities of payroll, record keeping, policy updation, internal reports generation and
dissemination, benefits administration and labor contracts and legislation; relational HR
activities involving HR planning, recruitment and selection, training and development,
remuneration, performance and reward management; and lastly it covers transformational HR
activities, which focus on strategic changes, leadership development, organisatioanl cultural
changes, and knowledge management. Thus, technology covers all types of HR activities that
helps in strategic aspects like predictive analytics, managerial insights and information security
required for organizational functions.
Answer 12
HR scorecard includes the aspects of HR practices, HR system and HR workforce
competencies. These aspects effectively link the people, strategy and performance in the
organization. Benchmarking of the HR practices helps in establishing a comparison of
productivity between their employees and other competitors, external recognition from the
industry and focus on the system than on individual performance. It assesses the HR
competencies like administrative efficiency, employee advocacy, strategy execution and change
agency. These covers competencies of growth rate and retention of employees under employee
advocacy, perception of business strategy and alignment with line management under execution
of strategy, processing benefits and costs and response rte under administrative efficiency and
under change agency, the infusion of new recruits with the existing employees successfully is

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considered as competency assessment. Lastly, the HR systems are incorporated through
alignment of operational excellence, product leadership through innovations, customer intimacy
and value propositions, communication, integration of the HR functions and differentiation in
terms of value or competitive advantage and unique characteristics of human capital. In the end,
it measures the workforce success.
Answer 13
As the business environment is dynamic and changing rapidly, along with the technological
transformation, demographics, and employee expectation, the strategic HRM also needs to adapt
to the changes and innovations. The future trends in the business comprise of increasing rate of
globalization and new technologies in connectivity, cloud, artificial intelligence, innovations.
There is sustainability issue. The demographic changes comprise of longevity of people, work-
life balance, generational cohesion and rapid urbanization, and employee expectations include
more benefits, rewards, career growth opportunities, fair working conditions and efficient
leadership. Thus, for future, the competencies of SHRM professionals must include strong sense
of business acumen, technological expertise, efficient communication and consultation ability,
ethical practice, strong and effective interpersonal relationships, integration of global culture, and
critical decision making power, along with expertise in HR practices. The professionals should
also be able to apply the HR metrics and scorecards efficiently for effective performance
management in the organization.