Challenges Faced by Organizations and the Role of Strategic HRM

This article discusses the challenges faced by organizations in today's highly competitive market and how a strategic approach to HRM can help them gain a competitive advantage. The challenges include employee motivation, competencies and recruiting, time management, and globalization. The article also explores five approaches to strategic HRM that can assist organizations in maintaining a competitive advantage.

Human resource management

HRM
What are some of the current challenges facing organizations today? How can a strategic
approach to HRM assist organizations gain a competitive advantage?
It has been observed that in the present scenario the companies have to face different challenges
that affect the overall growth and productivity in the highly competitive market. In this paper, the
discussion will be made on the topic “challenges faced by the organizations and how the
strategic approach to HRM assist the companies to attain competitive advantage”.
Challenges facing organizations today are: Employee motivation and Competencies and
recruiting the right talent can be considered as the current challenges faced by the companies in
the recent era. According to Kearney (2018), it is a challenging job for the management just
because of the changing workforce. There are many employees with different beliefs, values and
also backgrounds. The top authority has to face the difficulty in motivating the employees. There
are many cases in the workplace, where employees are not dedicated towards the assigned work.
The employee will not give their best if they are not satisfied with the assigned work. So, it is the
responsibility of the management to boost the motivation level of the employees. But there are
vigorous needs of the employees that pose a challenge for the higher authority to boost the
motivation level of the employees. This is just because the employees at a certain point of time
have diverse needs and expectations. The needs and expectations level of the employees keeps
on changing which create difficulty for the management to boost the motivation level of the
employees. For example: the workers who give more time at work just to fulfill their needs for
accomplishment might discover that the extra time spent by them clashes with their social needs
and also with the need for affiliation. So, by analyzing this it can be said that motivation among
the employees is one of the major challenge that is faced by the companies.
According to Hickman and Silva (2018), Competencies and recruiting the right talent is the
current challenge that is faced by the organizations. To attract the talented employees in the
workplace is considered as the huge investment of time and money. It is difficult for the higher
authorities to maintain the balance between the overall activities of the business and in hiring the
right candidate at the right job. In the present scenario, it is difficult to find skilled and dedicated
candidate for the organizational activities due to high level of competition. There are some
companies who don’t might need full time employee but at the time of peak, it is difficult for
them to find the right candidate who possesses the right skills and competencies. Therefore, it
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can be stated that the companies face challenge in relation to finding the right candidate for the
right job (Katzenbach and Smith, 2015).
The next challenge faced by the companies is related to Time management. There are many
employees in the workplace who are not able to manage their time according to the assigned task
and majority of the time on the other activities as depicted in the picture 1. According to,
Colling, Scullion and Caligiuri (2018), It creates difficulty for the companies to achieve the set
goals and objectives. One of the reasons that can impact the growth of the company in the highly
competitive market is time management. It is important for the management to recruit the
employees who know the value of time. If employees are aware about the importance of time
then it affects the performance level of the employees. Just because of lack of time management
skills among the employees, the companies have to face the issue related with poor quality. The
employees who feel stressed and also rush to complete the task make mistakes which directly
impact the growth and profitability ratio of the company in the highly competitive market. The
companies face the challenge of time management because they are not able to teach their
employees the importance of the time management. When employees don’t know the importance
of time management then they don’t focus on getting the job done on time and this creates a
challenge for the companies to achieve success in the competitive market.
(Source: Half, 2018).
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Globalization is also considered as a challenge that is faced by the companies in the highly
competitive business environment According to Sternin (2017), It has been seen that due to
globalization the expectation level if the customers has been heightened which create difficulty
for the companies to achieve large market share. Also, in context to globalization one of the
challenges is also related with the rise in the cost of doing business. Globalization has enhanced
the pressure on the companies to conduct the activities in the different locations and due to this
the companies has to face the challenge related with the increase in the cost ratio. When the cost
increases the companies has to face the challenge in context to earning more profits in the
market. So, it can be said that globalization has created a challenge for the companies to achieve
success in the market.
It can be said that Strategic approach to HRM assists organizations gain a competitive
advantage. There are five approaches to strategic HRM that should be considered by the
companies as it helps in managing the activities of the company. The five approaches to HRM
are resource based strategy, achieving strategic fit, high performance management, high
commitment management and high involvement management.
The first approach is resource based strategy that helps in creating the strategic capability.
According to Hitt, Xu and Carnes (2016), It assists in maintaining the ratio between the
resources and opportunities and also helps to add value from deployment of the resources. This
approach helps the companies to gain the competitive advantage as the goal is to create firms
that are more intelligent and flexible as compared to the competitors. It helps in hiring and
developing the talented employees who will give their best towards the activities of the
company. This approach also emphasizes on utilizing the resources in a proper manner which
will directly assist in maintaining competitive advantage.
The next approach is related with “Strategic fit” which states that the HR strategy should be
aligned with the business strategy. According to Paauwe and Boon (2018), this approach states
that the HR strategy is one of the essential parts of the company so it should be done with proper
planning. The vertical integration will help to maintain relation between the business and human
strategy which will help in attaining the competitive advantage in the market. This will help the
companies in maintaining the competitive advantage as it is analyzed that it will consider the
basic functions such as planning which is important for the business to grow in the market.
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Higher performance management approach will also assist the companies in the maintaining the
competitive advantage as it has been seen that high performance management focuses on the
maintaining the performance of the employees. This strategy states that the performance of the
employees should be maintained so that they will give their best towards the assigned activities.
According to Berman et al., (2019), In this approach, it is important for the top authorities to
focus on monitoring the attitude and behavior of the employees. It also provide promotion and
compensation scheme to the employees so that they can be efficient towards the assigned work.
By maintaining the performance it would be easy for the companies to boost the customer
service which will impact the profits and growth of the business in the highly competitive
business world.
It is stated by Latorre et al., 2016, that High commitment management approach also helps in
reducing the hierarchies and also maintains the quality circle and the activities completed by the
employees. Also, this approach emphasizes on treating the employees as the partners in the
companies so that they interest can be maintained and also the focus is given on listening to
their concerns which boost the efficiency of the employees. If the activities are completed
according to the set standards then it will help the companies to maintain its competitive
advantage in the highly competitive world.
The last approach is high involvement management that should be present in the workplace as it
is related with communication and involvement. According to Wood (2016), It is important to
create positive climate in the workplace so that it could be easy for the employees to meet the
expectation level of the managers and also then only the employees will emphasize on the
mission, values and objectives of the company. This approach assists in creating mutual
understanding that will help to develop the people through which it will ensure that goals will be
attained in the competitive market. So, these are the approaches that should be considered by the
companies so that it could be easy to achieve the competitive advantage in the market.
So, it can be concluded that there are various challenges which are faced by the companies such
as Employee motivation, competencies and recruiting, time management and globalization. So,
these challenges should be reduced by the companies so that it could be easy to focus towards
growth and earning more profits. Also, to attain competitive advantage the companies should
consider five approaches to HRM which are resource based strategy, achieving strategic fit, high
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performance management, high commitment management and high involvement management.
These approaches will assist in maintaining the competitive advantage in the market.
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References
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