Strategic Human Resource Management

This document discusses the relationship between business strategy and human resource strategy, the theoretical basis and models of strategic human resource management (SHRM), and HR practices of performance management and reward. It also provides recommendations for designing a performance management system. The subject is Strategic Human Resource Management, and the document type is an essay.

STRATEGIC HUMAN
RESOURCE
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK 1............................................................................................................................................3
Relationship between business strategy and human resource strategy........................................3
Theoretical basis and model of SHRM........................................................................................5
Strategic perspective of best fit/contingency, best practice/universalist and resource based
view..............................................................................................................................................6
HR practices of performance management and reward. .............................................................7
Recommendation.............................................................................................................................8
TASK 2............................................................................................................................................8
Nature and theoretical perspective of employment relations.......................................................8
Role of actors within the employment relationship...................................................................10
REFERENCES..............................................................................................................................13

INTRODUCTION
According to Armstrong, M (2016) Strategic management human resource is the act of
linking the human resources with organization's strategic goals and objectives to improve
business performance and boosting development, organizational culture, innovation and to gain
competitive advantage. Asda is a supermarket chain in Britain which was founded by Peter and
Fred Asquith in 1949. it has its headquarters in Leeds, West Yorkshire, England. They have a
product line of groceries, general mechanize and financial services. In the further report light will
be put on relationship between business strategy and human resource strategy. Comparing the
theoretical basis and models of SHRM. Informing about strategic perspective of best fit,
contingency, best practice, universalist and resource based view to the clients. It will also include
specific HR practices of performance management and reward. Lastly making the
recommendation of designing and redesigning a performance management system to support
organizational development and change.
MAIN BODY
TASK 1
Relationship between business strategy and human resource strategy.
Globalization, technological advancement and changing work culture influence the
human resource of the organization and forcing them to be more strategic and business oriented.
Business strategies are the set of competitive moves and actions that the company takes to
achieve their business goals and gain a competitive edge. Human resource strategy is the
business's overall plan for managing the HR activities of hiring, performance appraisals.
Training, development etc. A good HR strategy requires analysis of the organization and the
external environment. The Relationship between Asda business strategy and human resource
strategy is that on the basis of business strategies, HR strategies will be formulated as business
strategy have a broader perspective than HR strategy. And if HR strategies of hiring, training,
developing skills, fairly compensating is appropriate and properly formulated and implemented
then it will lead to achievement of business strategies of accomplishment of sales targets,
improving customer service, innovation etc. As good employees will help in achieving the
business objective and a successful owner realizes the strong connection between these two
strategies (Shrouf. and et.al., 2020).

Vertical alignment and horizontal integration are also the strategies used by the
businesses which are in the same industry or production process.
Vertical alignment
In vertical alignment the company acquires another company that operates in the
production process of the same industry. Asda uses this strategy to strengthen its supply chain,
reducing production costs, capturing upstream and downstream profits or accessing new
distribution channels. Asda can achieve this vertical alignment through internal expansion,
acquisition or merger.
(Source: Vertical integration and horizontal integration, 2020)
Horizontal integration
In horizontal integration the company acquires a similar company in the same industry.
Asda can do this in two ways backward integration and forward integration. Backward
integration occurs when acquisition is done of input products company and forward integration
takes places when company decides to acquire the post-production process company (Pérez-
Lara. and et.al., 2018). Asda does horizontal integration to increase their size, diversify products
and service offerings, achieve economies of scale or sometimes to reduce competition.
Illustration 1: vertical integration

(Source : Vertical integration and horizontal integration, 2020)
Theoretical basis and model of SHRM
Strategic human resource management is defined as the integration of human resource
management and the strategic management of the organization. They are linked to advance
flexibility innovation and competitive advantage, develop a fit for purpose organization culture
and improve business performance.
Human capital theory
This theory is associated with the study of human resource management as found in the
practice of business administration. Asda believes that education or training increases the
productivity of workers by imparting useful knowledge and skills. Hence, the organization
focuses on raising worker’s future income by increasing their lifetime earnings.
Criticisms of this theory is, it is difficult to measure key concepts including future income and
central idea of human capital. There is problem in measuring both worker productivity and the
future income. It was also accused of blaming individuals for the defects of the system and
fudging the real conflict of interest.

Resource dependency theory
This theory is associated with the study of the impact of resource acquisition on
organizational behaviour. This theory suggests that Asda must engage in transactions with other
organizations in its environment in order to acquire resources. It created dependencies and
resulting unequal exchanges generate differences in power, authority and access to further
resources (Sommerfeldt, 2018). To avoid such dependencies, organization develop strategies and
structures to enhance their bargaining positions in resources based transactions. Strategies like
taking political actions, diversifying and developing links to other organization etc are adopted.
Criticisms of this theory is it mainly focuses on power, structures and process of an
organization. The theory ignores the economic factors like costs, efficiency and mergers between
firms etc. it does not include the consumers of the resources from the environment which plays
an important role. It fails to explain the relationship between the organization and environment.
Strategic perspective of best fit/contingency, best practice/universalist and resource based view.
Best-fit/ Contingency model
This model believes that there is no universal prescription for HRM practice. Asda also
adopts this model and makes HRM policies according to business strategy. This approach to
HRM explores the close relationship between strategic management and HRM by considering
the influence and nature of vertical integration. This approach claims that HR strategy become
more and more efficient when its linked to its environment of the business.
Criticism of this approach is limited by the impossibility of modelling all the contingent
variables, the difficulty of showing interconnection and also the way in which changes in one
variable have an impact on others. There is also a lack of alignment with employee’s interests.
Best Practice / Universalist model
This model believes that there are some pre-determined set of activities of HR that exist
and is universal and helps in reaching the goals and get a competitive edge. This model does not
take organizational setting or the industry in mind as it is based on the idea of superiority of the
organizational performance that requires higher commitment management therefore this model is
not adopted by Asda. This approach claims that there are certain HR practices that is universal
and would result in enhanced organizational performance, quality and efficiency, lower level of
absenteeism etc. (Xi, Chen. and Liu, 2020). It is also referred to as high commitment model.

Criticism of this approach is the organization run risk of introducing mutually prohibited
combinations like team working and compensation based on individual performance. That results
in deterioration of employee collaboration through over exaggeration competition. It lacks direct
linkage organizational strategies.
Resource based view
This approach is based on the concept that Asda have different types of resources
available to them like tangible and intangible. When these resources are combined they create
capabilities that provide a sustainable competitive advantage to the firm. Key insight of this
approach is that not every resource is of equal importance and nor do they possess the potential
to become a source of competitive advantage.
Criticism of this approach is there is limited focus on capabilities. Different resource
configuration can generate same value and would not give the firm a competitive advantage.
HR practices of performance management and reward.
Performance management is the tool to manage the performance of the employees and
includes a set of activities and systems that aimed to monitor and evaluate their work. It is an
ongoing process of communication between supervisor and employees.
Some HR practices of Asda for performance management
 Defining and communicating the company's goals and performance objective to the
employees clearly. Outline of the work to be performed should be clear by the
employees. Asda does in many ways like the use goal-tracking software, creates chat
within the office, send email about the work to be performed, holding meeting etc.
 HR offering frequent performance feedback to the employees, Asda HR gives 360-
degree feedback which motivates their employees and it also helps managers in
organizing training and development of the employees. In this practice everybody gives
feedback for each other (Chahal, Jyoti. and Rani, 2016).
 Organizing reward and recognition programmes by the company is a great HR
practice or managing the employee’s performance. Asda uses this practice as they believe
that if employees good performance goes unrecognised and is not rewarded then
employee disengages from the company's overall objective. They give both financial and
non-financial rewards to their employees.

 Adoption of management by objective practice in this organization goals are described
and the employees are given a set of targets to achieve within a certain period. In Asda
performance of the employees are managed based on the same practice. The ones who
attain the target gets the reward and benefit and who does not attain goes through
corrective action.
 Using behaviourally Anchored Rating Scales (BARS) , it is more technical method
that tries to create rating scales based on narratives and incidents that occur at workplace.
Asda uses this practice in a complex task.
 Peer reviews is also a practice adopted by HR to manage performance. In this practice of
performance management by Asda they allow employees to praise other employees and
highlight positive aspects of their performance. This motivates the employees to strive for
better performance in the future and maintains a healthy atmosphere at the workplace.
Recommendation
Apart from the practices that Asda uses, it is recommended to use SMART criteria for
performance management system. The performance management system which is specific,
measurable, attainable, reliable and is time bound. Asda can design or design their performance
management system by following these simple steps : first evaluating the current performance
process then identify the organizational goals. Set performance standards, monitor the
performance throughout the year and then evaluate the performance and lastly set the new
performance goals for the next year. They should also experiment with new apps and latest
technologies.
TASK 2
Nature and theoretical perspective of employment relations
The term employment relations refer to the efforts of the company in managing the
relationship between its employer and employees. Asda implement good employee relations
program which provides consistent and fair treatment to all its employee which results in
employees being committed for the job and loyal to the company.
Nature of employment relationship
Nature of employment relation is that it is the managerial hierarchy which ensures that
employees of the company do what its employer wants them to do. The concept of this relation is

complex and multi-dimensional as it undergoes change with the changing structure and
environment of company. It leads to heightened employee’s loyalty where they don't leave their
jobs as they are highly motivated which improves their trust and confidence in company
(Lopes,2018).
It may also certainly lead to developing inappropriate relationship between management
and employee, as employer and employee might become too personally involved which can lead
to gossips and resentment among people at the workplace (Aloisi, De Stefano,2020). It can lead
to more conduct issues as formal procedures are not followed which can lead to employee and
employer loosen attitude towards their conduct in informal environment which can lead to poor
time management and decreased productivity among employee’s performances.
Changing nature
The nature of employment relationship is changing and developing rapidly. As the
business environment is changing drastically where in early employment relations, managers and
employees were supposed to work with data and systems, equipments and performing traditional
tasks, currently the scenario is all different as it has resulted in building the relationship between
the employees and employer through cross training, personnel management and
interdepartmental communication (Potocka-Sionek,2020).
Regular shifts in economic, political and social structure has resulted in the changes in
employment relations of Asda which includes changes in more part-time, contingent and female
workers in the company. Changes in the employment relationship likely to occur as the
population ages which has includes changes in understanding, developing a good working
attitude between employer and employees of the company. It also resulted in changing the
relationship in positive way between the employee's and employers of the company
(Farnham,2017). Earlier employment relations were subject to getting the work done by the
employee's by hook or crook but as the world has evolved employment relationship theories
have come up where the experts have realized for a company most important and valuable
resources are its employees who contribute productive towards efficient and effective
achievement of the goals of the organization. It is required by the company to implement good
policies of employment relationship in order to retain its top talented employees which can turn
out to be success for the company.(The changing nature of employment relations,2014).
Theoretical perspective of employment relationship

Unitarist Theory-
This theory highlights on Asda employees and employers co-dependency. It states that
company is friendly, collaborative and integrated as they do not favour trade unions and strongly
believes that company loyalty will detract from its employees loyalty (Harsh, Prasad,2020).
Advantage of this approach is it is more concerned about the goal of the company and the
simplest way is to make its employee concerned towards the common objective of the company
rather than thinking of their personal interest in company. Limitation of this approach is
inequality in the power distribution may lead to inefficiency in company which may result in
managers taking harsh decision to meet their own interest which will create negativity and will
hinder employees' efficiency.
Pluralist theory
This theory highlights on the functions & processes of management and trade union. It
says the primary function of the management is to interact, communicate, persuade rather than
demand and control.
Advantage of this approach is it assumes that workplace in Asda is full of different kind
of people who all have different values, cultures and beliefs. It says that there will be conflict
which will make the employees more competent and effective. It believes that trade unions are
the best source of bargaining between employees and employer. Limitation of this approach is
trade union in Asda can focus too much too workers interest that will create inefficiency in
collective bargaining process which may be thorough the process of resolving the conflict.
(Appication And Theories of Employment Relation,2019) .
Role of actors within the employment relationship
There are 3 actors that play major role in employment relationship that are trade unions,
employers and government/agencies
Role of worker’s/trade unions in employment relationship is to supply of skills necessary
for the production of goods and services. Their role is to enhance and sustain the terms and
condition of work for their members which is being done by the collective bargaining with the
employer. It can be by negotiating about the pay, discussing business and workplace issues and
others. Their role is to ensure the welfare of its members by safeguarding the interest of its
members, achieving higher wage by securing benefits that are economical (Bozionelos,Lin, Lee,
2020).

Advantage of role trade union in building employment relation in Asda are it helps in
bringing productive deal where the company can bring new working practices which can
increase the worker’s productivity and helps in cooperation where it helps workers closer to
management & represent their interest. Disadvantage of trade union it may lead to
unemployment as labours demanding higher wages above the equilibrium which company can't
pay leading to strikes which results in loss of productivity.
Role of employers in employment relation is to make sure that employer of the company
ensures workplace is safe and its employees are not exposed to hazards& harmed by the work.
Employer role is to provide information, instruction, training and development to its employees
in order to make them work safely.
Advantage of role of employer in employment relationship is it helps Asda to retain top
talented workers which can help the company in achievement of goals resulting in increased
productivity of the employees and leading to less conflict and increased morale in company.
Disadvantage of role of employer in employment relationship is it may lead to communication
complexity as when there is more communication with the employees the line of management
level and employee level become blur which result in conflicts at workplace.
Role of Government/ agencies in employment relationship is that it helps in providing
safe working environment in order to promote satisfaction of employer and employee. Role of
the government is to maintain high employment rate which reflect on the positive side of
government and directly addresses on the issues such as unemployment and many others.
Advantages of role of government in employment relationship is it helps in an infusion of
funding in the company from which the company can grow consistently and can help in deriving
the culture which satisfy both the employer and employees job satisfaction in the company and
boost their morale. Disadvantage of this could be government may impose restriction in certain
operational processes of company leading to conflicts in the employer and employee's as goals
are not achieved.
Mechanism for Employee participation and Employee voice
It is very important on the part, that employees of Asda should participate and raise their
voice in building employment relation from which they can derive job satisfaction and will help
them in boosting their morale to perform effectively and efficiently.

Employees of Asda should recognize their role-played which will help in fostering better
employment relationship as employee's of Asda will realize the line of distinction from its
employers which its employees will not cross in order to maintain healthy relations with the
employer of company (Ahmad,Rizvi, Bokhari,2017).
Employee Participation and voice can contribute towards better employment relationship
as in Asda the employees of it can use buddy system where some employees who are to shy to
perform activities alone can use this system in which they can perform in groups which will
boost their confidence and will help to network with others employees of the company to
strengthen relations between them in the company. Employee's of Asda can themselves
participate in setting their own goals which will help to strengthen the relations with its employer
when goals are achieved as what goals employees achieve are the ultimate goals ofAsda.
Employee can raise their voice in promoting healthy habits in company as their small
efforts to change within the workplace hygiene by posting creative posters and posting them on
companies walls may help in increasing the awareness among the fellow employees which will
in turn lead to good employment relation with fellow employees as well as employer of Asda.
CONCLUSION
From the above report it is understood that human resource strategy of the company
should be aligned with business strategy in order to achieve the goals of the company. It is also
understood that company can opt for vertical and horizontal integration when it wishes to
exercise control over the distributor or suppliers of its goods. It is also understood that company
should follow certain specific HR models and theories for proper functioning of its operation.
Above report analysed approaches to best fit/contingency, best practice/universalist and resource
base approach which are applied by the company in different situation. It further briefed on what
is the nature of employment relation and how it has evolved in modern era by covering various
theoretical aspects of employment relations adopted by the company. It also critically evaluates
roles of actors in employment relations and how employment voice and their participation
contribute towards employment relationship for achieving organizational goals.

REFERENCES
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