Strategic Human Resource Management Analysis

This assignment requires you to analyze the role of strategic human resource management (SHRM) in influencing both organizational performance and employee well-being. You will examine various theoretical perspectives and empirical research on SHRM, exploring its impact on factors such as productivity, turnover, job satisfaction, and overall organizational success. The analysis should draw upon relevant academic literature to support your arguments and demonstrate a comprehensive understanding of the complexities involved in SHRM.

HUMAN RESOURCE MANAGEMENT

Table of Contents
INTRODUCTION......................................................................................................................1
TASK 1......................................................................................................................................1
1.1 Difference between personnel management and human resource management..............1
1.2 Function of the human resource management in contributing to organisational purposes
................................................................................................................................................2
1.3 Role and responsibilities of line managers in human resource management...................3
1.4 Impact of the legal and regulatory framework on human resource management............3
TASK 2......................................................................................................................................4
2.1 Reasons for human resource planning in organisations...................................................4
2.2 Stages involved in planning human resource requirements.............................................4
2.3 Recruitment and selection process in two organisations..................................................5
2.4 Effectiveness of the recruitment and selection techniques in two organisations.............5
TASK 3......................................................................................................................................6
3.1 Link between motivational theory and reward.................................................................6
3.2 Process of job evaluation and other factors determining pay..........................................6
3.3 Effectiveness of reward systems in different contexts.....................................................7
3.4 Methods organisations use to monitor employee performance........................................8
TASK 4......................................................................................................................................8
4.1 Reasons for cessation of employment with an organisation............................................8
4.2 Employment exit procedures used by two organisations.................................................9
4.3 Impact of the legal and regulatory framework on employment cessation arrangements
..............................................................................................................................................10
CONCLUSION........................................................................................................................10
REFERENCES.........................................................................................................................11

INTRODUCTION
Human resource management is the process of managing people in a well-organised
and structured manner. In the recent times, severe competition at the market place has
modified the role of human resource manager to successfully compete with others and remain
in the competition. The demand of skilled and knowledgeable person is also increasing as the
demand of human resource managers increasing. Most of the companies are facing problem
related to the gap between the actual existing persons employed by the company and the
required workforce. In order to gain competitive advantage companies are required to focus
on activities related to human resource management. Company together with human resource
manager have to comply with all the new policies and practices of HRM because of the
changes in labour law. The below report illustrates some of the functions of HRM in small
and medium enterprises as Posh Nosh limited which is newly forming HR department.
TASK 1
1.1 Difference between personnel management and human resource management
Personnel management is a traditional method of managing persons present in the
company. Whereas, Human Resource Management is a modern way of managing personnel
employed by the company. In other words human resource management is an advanced
version of personnel management with some modifications, carve in and carve out. In recent
times, personnel management has completely switched to new version of human resource
management (Need, 2006). The main differences between old and new system are as follows:
Basis for comparison Personnel management Human resource
management
Meaning The main function is related
to pay scale and
remuneration and other
functions as stated under
employment laws.
The functions are broad as
from planning recruiting,
directing, managing, and
controlling humans under
employment by company.
Purposes type Monotonous functions Strategic and detailed
functions
Training Less training and
qualification needed.
Trained employee needed to
manage and this system
1

provides more development
opportunities
Action related to manpower In order to achieve desired
output, employees are
treated as an input
Human resource is treated as
a valuable asset of the
company.
Remuneration basis Through evaluating job Through analysing
performance of an employee
Authority to take decision Decision making authority
lies with the top level
management only
Employees are invited to
take participation in decision
making
Methods Traditional or outdated Modern and advanced
Frequency of decision
making
Slow Faster than traditional
method
Designing of job Through groups of labour On the basis of teams and
groups
It is determined from the above differences as adopting the human resources
management in the company will increase the overall efficiency of Posh Nosh Limited.
Further, there will be misunderstanding and confusion in the company if there is no any direct
communication between managers and employees (Armstrong and Taylor, 2014).
1.2 Function of the human resource management in contributing to organisational purposes
The main functions of human resource management is recruiting right person for the
right job at right time, delegating appropriate work to an employee on the basis of skills and
abilities possessed by that employee, and the last main function is to provide adequate
remuneration to employees after duly evaluating their performance. One wrong person
appointed by the company may reduce the overall productivity of the Posh Nosh limited as
human resource is considered as a valuable asset of the company. The basic objective of
human resource management is to improve the productivity of the company by augmenting
the effectiveness and efficiency of the human resource of an organisation. As a result their
distribution is also a strategic decision which should be taken after duly authorisation.
2

Because of this, providing remuneration after analysing all the aspects is a critical function of
HRM (Yahya and Goh, 2002).
In addition to above functions, the next main function of HRM is to delegate work to
employees on the basis of their skills, knowledge, ability, and experience. It is recommended
to provide short training to employees before assigning them their job task. This creates
enthusiasm among newly appointed staff and motivates them to contribute their best to the
company. However, it is also very much required to communicate corporate goals, objectives
and expectations to workforce so that they are well guided what they have to achieve (Daley,
2006).
1.3 Role and responsibilities of line managers in human resource management
Line managers are the just next supervisor of employees employed by the company to
whom they have to report their work first. Their main role is to direct supervise their
subordinates. The critical responsibility of line managers are to manage their subordinates
and deal with the issues arising with employees in the company and try to solve in their hands
(Guest and et.al., 2003). The other different responsibilities of line managers are as follows:
 Appointing right person whose skills matches to the requirement of company
 Providing them training at work
 Enhancing employees performance and efficiency
 Building cooperation and coordination among employees
 Controlling cost related to HR
Though organizations have HR specialists to oversee human resource policies and
procedures, its line managers who have the responsibility to implement those HR initiatives.
For a performance driven organization, often the pay structure is based on performance
outcome of employees. In such circumstances, line manager plays significant role of
determining the performance rating of staff which have direct influence on the amount of
incentives. Moreover, in case of performance appraisal, where HR professionals design the
appraisal process, but its line managers duty to assess employees appraisal and provide one-
to-one feedback. Thus it can be seen that line managers exercise HR duties under many
different situations.
1.4 Impact of the legal and regulatory framework on human resource management
Human resource management of small and medium sized organisation should comply
with all the laws and regulation related to labour law pertaining to the jurisdiction under
3

which company is operating. It includes all the local laws, state laws, and federal law related
to HR of company. The law involves proper management regarding remuneration,
recruitment, safety and security of employees, recruitment, retirement, and other different
benefits to be provided to employees. There is high penalties of company if they do not
comply with such laws related to HR (Boxall and Purcell, 2000).
Federal laws: It provides provisions related to wages, minimum working hours,
compensation to workers, safety and security of workers, termination related rules which
should be followed by the company.
State laws: Such laws includes compliance of provision related to medical, family leave,
workers compensation, safety to be provided to workers, required notice period before
terminating any worker, working hours and further related to wages (Cole, 2002).
TASK 2
2.1 Reasons for human resource planning in organisations
Planning the human resource in a small and medium sized business like Posh Nosh
limited is one the critical and challenging part of business planning. As human resource are
regarded as asset of the company, it should managed properly which is possible only through
adequate planning. It helps company to take decisions about recruiting, delegating work,
providing training, and rewarding through monetary or non-monetary factors. Business
planning and HR planning goes hand in hand as it helps business to find out resources
required to achieve goals and objectives. The proper HR planning supports business and
prepare it to recruit employees and staff turnover (Heneman, Tansky and Camp, 2000).
Though there is an increase in unemployment, there is a shortage of supply of
manpower with required skills, ability, experience, efficiency and knowledge. Hence,
effective HR planning helps business to cope up with such issues. Moreover, with the change
in technology and globalisation there is need to change the method of production,
distribution, and marketing in Posh Nosh Limited. Such changes may require the fresh
recruitment of employees having required changed skills. This could be possible only with
the effective planning of HR (Purcell and Hutchinson, 2007).
2.2 Stages involved in planning human resource requirements
The effective planning of HR includes the following stages:
4

Forecasting of demand – The first stage in the HR planning is analysing the current status of
company and forecasting the future demand of company regarding employees. This also
includes proper analysis of internal and external environment of the company and does the
current number of employees help business to achieve objectives or not (Storey, 2007).
Analysis of inventory and forecasting supply – The next step is to analyse if there is any gap
between the forecast and the present staff and inventory available with the company. The
methods which can be used by the company are Markov analysis, succession planning,
transitional matrices, replacement schedules, etc (HUMAN RESOURCES PLANNING,
2012).
Audit – Audit simply means checking. This step includes reconciling inventory with
forecasting using a systematic analysis. It also includes determining the fields where surplus
and shortage is present.
Reconciliation – This stage requires development of proper action plan to be executed for
bridging the gap between supply and forecast.
Control – At this last stage, the implemented plan related to HR is controlled and monitored
as whether everything is according to the planning done by management. If there is any
misappropriation in the plan then appropriate actions are taken by the HR manager (Bowen
and Ostroff, 2004).
2.3 Recruitment and selection process in two organisations
Now, the recruitment and selection process of Posh Nosh Limited is compared to the
process of Wipro which is a leading and well-known company in the market. The main
difference in the two process is due to the method adopted for internal recruitment and final
selection. The internal recruitment like job positioning, job bidding, and employee referral is
encouraged more in the small and medium sized company as compared to big business
tycoons like Wipro. However, In Wipro more comprehensive method is used for hiring a
person which give assurance of right person employed with required skills. Further, Wipro
follows multiple stage selection process which makes the recruitment process more laborious
and practical as paralleled to Posh Nosh Limited (Umble, Haft and Umble, 2003).
In small enterprises like Posh Nosh Limited, the prime focus on organization is on
production, marketing and other areas and less attention is paid to HR practices. Therefore,
there has been limited HR forecasting done to identify the future needs of human resources.
5

Whereas in larger organizations like Wipro, there is a dedicated and formally structured HR
department which takes care of all activities right from the HR planning up to recruitment
and selection processes. This is the reason why due importance is given to recruiting
candidates with required qualification, skills and experience.
2.4 Effectiveness of the recruitment and selection techniques in two organisations
It is significant to evaluate the recruitment process of both Wipro and Posh Nosh
Limited so that necessary rectification can be done in order to achieve objective. Posh Nosh
Limited follows a simple and cost effective process. The company first find out a right person
through internal hiring and then in case of need make external invites. Whereas, Wipro
follows external hiring only and terminate the excess employee which are no further needed
in the company (Bratton and Gold, 2012).
Further, for evaluating the effectiveness it is required to analyse the time utilised under
full recruitment process. It has been analysed that the time invested in Wipro is more than the
time spent in Posh Nosh Limited. The above process of evaluating the effectiveness of HR
planning is rigorous process which requires high talent and skill. This evaluation also shows
if there is any shortage of interest of potential candidate (Guest, 2002).
TASK 3
3.1 Link between motivational theory and reward
The reward system in a company follows two motivational theories reinforcement and
expectancy theory. Expectancy theory defines the manner in which workers analyse the
relation between the efforts employed by them and rewards expected to be received by them.
The motivation increases with the increase in expectation level. However, reinforcement
theory means use of incentives like increment in wages, promotion, as a method to reinforce
better performance of employees at work. Also there are manner to discourage poor
performance of employees and improper behaviour like attitude by using negative
reinforcements in this theory (Lepak and et.al., 2006).
In addition to above theories, there are many motivational theories to enhance the
productivity of employees by motivating them through different ways. Hertzberg theory
defines that employees get motivated by employing two factors such as motivation and
hygiene factor (Majumder, 2014). The motivation factor includes working environment,
condition at the workplace, recognition and appraisal, challenging work etc. Whereas,
hygiene factor includes compensation and pay scale. Hence it is analysed that there is a direct
link between motivation and reward. Hence, it is recommended that Posh Nosh Limited
6

should incorporate practice in management to follow good system of rewarding so that
employees are motivated and contribute their best to achieve organisational objectives. In this
regards, Hertzberg theory should be followed by company (Gagné and Deci, 2005).
3.2 Process of job evaluation and other factors determining pay
The proper job evaluation helps in guiding the management of company as to which job
should be paid more than others. There are various ways for evaluating job like job grading,
comparison based on different factors, job ranking etc. In Posh Nosh Limited, job evaluation
is a basis for determining salary and wages to employees (Bassett-Jones and Lloyd, 2005).
For conducting proper job evaluation, following guidelines can be followed by company:
 Rate a job instead of person
 Analyse differentiating features of job
 Evaluation should be based on actual figures and information
 The results should be unbiased, rational and fair (Bianca, 2016).
The following benefits can be achieved by firm if the above mentioned guidelines is
systematically followed:
 Systematic job structure
 Support in next job
 A well-organised process for determining value of job
In addition to above all factors, in order to determine salary following factors should be given
emphasis:
Labour unions: They influence management for getting high wages and allowances by
negotiating collectively.
Personal perception: whether the wages are appropriate and equitable does not only depends
on its payment but also depends on the perception of receiving the amount (Schuler and
Jackson, 2008).
Ability to pay: Based on the company’s ability union often demand increment.
3.3 Effectiveness of reward systems in different contexts
Improved performance is not only shown by increased pay but also can be proved
through different other factors like appraisal, non-monetary benefits, non-contributory
pension scheme, assistance towards child, different other non-cash perquisites and
7

allowances, Life insurance, other insurance etc. However, increased pay generally provides
assistance to the enhanced quality and performance at the workplace. Company also
implements other schemes through which performance can be increased (Kelley, 2004).
As a result from above discussion, Posh Nosh Limited should adapt rewards system in
their company based on the strategy developed by human resource management and focusing
on business objectives. Not only a single reward satisfies the employees in order to contribute
more to the organisation but an enterprise should provide their employees a mix of both
intrinsic and extrinsic rewards so that the objectives are achieved (Judge, Bono and Locke,
2000).
The proper reward system not only complement quantitative criteria in employee’s
performance but also regarding qualitative aspects like attendance, loyalty etc. Further, there
may be some person employed by the company which expects intrinsic reward and their
motivation boost up by involving them in the decision making process in the company (Price,
2007).
3.4 Methods organisations use to monitor employee performance
Presently, in order review performance of employees, a simple rating system is adopted
by Posh Nosh Limited. But with the increase in more skilled workforce and high competition
in the market, company should adopt behavioural checklist method. It is a form of statements
containing the option as effective and ineffective behaviour of employees at job. Such
behaviours should be related to the expected behaviour identified to be related to job and
work. It is well-suited method for the development of employees of small and medium sized
company like Posh Nosh limited. Because this checklist is used to concentrate on outcome
and behaviour and also for absolute instead of comparative standards (Armstrong and Murlis,
2007).
In posh Nosh Limited behavioural checklist is significant as it helps in asking
evaluators to define instead of evaluating behaviours of subordinates at work. Hence, this
checklist method is preferred by most of the companies to evaluate performance. It is
effective because this method is based on employee’s personal experience and not on the
basis of comparison (Gilley, Eggland and Gilley, 2002).
TASK 4
4.1 Reasons for cessation of employment with an organisation
The employees resign from the office because of many some of which are explained as
follows:
8

 Personal issues – This shows that proper information is not received by company and
proper exit interview is not conducted by management. In order to retain employees,
company should conduct proper exit interview and the actual reason is known by HR
managers.
 Growth factors – This happens when employee do not see any growth while working in
the current company and then they switch over to new job. Managers should provide
their employees better opportunities so that they are retained in the company
(Marchington and Wilkinson, 2005).
 Family reason – It includes migrating of employees to some other place because of
maternity, family issues, etc.
 Compensation – Employees leave their job if improper compensation is provided to
them. Hence management should give emphasis on proper compensation strategy.
 Performance – many of the employees leave the company because of this region. This
happens when employees are not satisfied with their performance in the present
company (Hurd and et.al., 2016).
In order to reduce the staff turnover, Posh Nosh employee can follow the below mentioned
strategies:
 Improve recruitment process – As there are frequent changes in the operating method of
the company, managers should employ such person who are not resistance to change.
 Effective communication – There is a great need to effectively communicate with the
employees frequently so that their issues can be resolved on time (Crump, 2014).
 Appreciation – in order to motivate and retain skilled employees in the company it is
required to praise employees and appreciate them about their contribution to
organisation.
 Training and development – In order to improve employee’s performance managers
should provide them timely training and develop their personality personally as well as
professionally (Phillips and Phillips, 2016).
4.2 Employment exit procedures used by two organisations
A different approach and exit procedure is followed for their employees by different
companies according to the type of resignation and capability of HRM. Below are the
different methods used by the two companies such as Wipro which is a public company
having integrated system and IT service consulting organisation and Posh Nosh Limited.
9

Wipro:
 Employee go to the portal of the company and request for exit
 The resignation letter of employee is automatically system generated and goes to
employee’s manager
 The manager then approach employee to know the reason for their resignation
 The manager try some way to retain them by having words with them
 If then also employee wishes to leave then they mutually decide the last working day and
the date of leaving
 Last day, employee return ID card and all documents and leave the company.
Posh Nosh Limited:
 Proper policy of exit – As per the required notice period, employee submit the resignation
letter to manager and during the notice period perform routine job and at last handover the
replacement or current team (Brown and Reilly, 2009).
 Exit checklist – the supervisor completes the checklist from employee
 Exit interview – in the last days, managers conduct an exit interview with the resigning
employee and try to find out the reason for leaving and if possible try to resolve if any
conflict has arisen (Mowday, Porter and Steers, 2013).
4.3 Impact of the legal and regulatory framework on employment cessation arrangements
Posh Nosh Limited adopts a fair and lawful employment practices after duly
compliance with all the laws and regulations as led by government of UK. The law provides
security to employees as they cannot be terminated from the company without any genuine
reason. Employees can file a suit against employers for following any unlawful and
unjustifiable action by terminating employees from the work. Further, Posh Nosh Limited
prohibit termination of employees on the basis of discrimination of age, culture, sex,
nationality, ethic etc. Also, retiring employees because of the reason of any physical
condition is illegal practice for which employees have right to file a suit against company
(Harackiewicz, 2000). Further, in a planned retirement, company provide various benefits to
retiring employees like pension fund, retirement benefits etc.
CONCLUSION
It has been concluded from the above report as due to effective function of human
resource management, it is beneficial for small and medium size company like Posh Nosh
10

Limited to form HRM practices in their company. Also, it is analysed that effective
management of employees provides various benefits to company in addition to improve
productivity of the company. Moreover, it is concluded that company should adopt formal
exit procedures to be followed by employees at the time of resigning the company.
11

REFERENCES
Online and Books
Armstrong, M. and Murlis, H., 2007. Reward management: A handbook of remuneration
strategy and practice. Kogan Page Publishers.
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Bianca, A., 2016. The Role of Human Resource Management in Organizations. [Online].
Available through: <http://smallbusiness.chron.com/role-human-resource-management-
organizations-21077.html>. [Accessed on 30 August 2016].
Bratton, J. and Gold, J., 2012. Human resource management: theory and practice. Palgrave
Macmillan.
Brown, D. and Reilly, P., 2009. Measuring the effectiveness of pay and reward practices.
[Online]. Available through:
<http://www.employment-studies.co.uk/system/files/resources/files/mp84.pdf>.
[Accessed on 1 September 2016].
Cole, G.A., 2002. Personnel and human resource management. Cengage Learning EMEA.
Crump, K., 2014. 8 Tips for New Team Leaders. [Online]. Available through:
<https://www.liquidplanner.com/blog/8-tips-new-team-leaders/>. [Accessed on 31
August 2016].
Gilley, J.W., Eggland, S.A. and Gilley, A.M., 2002. Principles of human resource
development. Basic Books.
Harackiewicz, J.M., 2000. Intrinsic and extrinsic motivation: The search for optimal
motivation and performance. Academic Press.
HUMAN RESOURCES PLANNING. 2012. [Online]. Available through:
<http://www.hrwale.com/human-resources-planning/>. [Accessed on 28 August 2016].
Hurd, R. A. and et.al., 2016. Recreation managers can use rewards to improve employee
motivation, retention. [Online]. Available through:
<http://www.humankinetics.com/excerpts/excerpts/recreation-managers-can-use-
rewards-to-improve-employee-motivation-retention>. [Accessed on 30 August 2016].
Majumder, S., 2014. Importance of Human Resource Planning in Organizational Success.
[Online]. Available through: <http://www.hrcsuite.com/human-resource-planning/>.
[Accessed on 28 August 2016].
Marchington, M. and Wilkinson, A., 2005. Human resource management at work: People
management and development. CIPD Publishing.
Mowday, R.T., Porter, L.W. and Steers, R.M., 2013. Employee—organization linkages: The
psychology of commitment, absenteeism, and turnover. Academic press.
Phillips, J.J. and Phillips, P.P., 2016. Handbook of training evaluation and measurement
methods. Routledge.
Price, A., 2007. Human resource management in a business context. Cengage Learning
EMEA.
12

Schuler, R.S. and Jackson, S.E., 2008. Strategic human resource management. John Wiley &
Sons.
Storey, J., 2007. Human resource management: A critical text. Cengage Learning EMEA.
Journals
Bassett-Jones, N. and Lloyd, G.C., 2005. Does Herzberg's motivation theory have staying
power?. Journal of management development, 24(10), pp.929-943.
Bowen, D.E. and Ostroff, C., 2004. Understanding HRM–firm performance linkages: The
role of the “strength” of the HRM system. Academy of management review, 29(2),
pp.203-221.
Boxall, P. and Purcell, J., 2000. Strategic human resource management: where have we come
from and where should we be going?. International Journal of Management
Reviews, 2(2), pp.183-203.
Daley, D.M., 2006. Strategic human resource management. Public Personnel Management.
Current concerns, future challenges, 5, pp.120-134.
Gagné, M. and Deci, E.L., 2005. Self‐determination theory and work motivation. Journal of
Organizational behavior, 26(4), pp.331-362.
Guest, D., 2002. Human resource management, corporate performance and employee
wellbeing: Building the worker into HRM. Journal of Industrial relations, 44(3),
pp.335-358.
Guest, D.E., Michie, J., Conway, N. and Sheehan, M., 2003. Human resource management
and corporate performance in the UK. British journal of industrial relations, 41(2),
pp.291-314.
Heneman, R.L., Tansky, J.W. and Camp, S.M., 2000. Human resource management practices
in small and medium-sized enterprises: Unanswered questions and future research
perspectives. Entrepreneurship: Theory and Practice, 25(1), pp.11-11.
Judge, T.A., Bono, J.E. and Locke, E.A., 2000. Personality and job satisfaction: the
mediating role of job characteristics. Journal of applied psychology, 85(2), p.237.
Kelley, A.E., 2004. Ventral striatal control of appetitive motivation: role in ingestive
behavior and reward-related learning. Neuroscience & biobehavioral reviews, 27(8),
pp.765-776.
Lepak, D.P., Liao, H., Chung, Y. and Harden, E.E., 2006. A conceptual review of human
resource management systems in strategic human resource management
research. Research in personnel and human resources management, 25(1), pp.217-271.
Meier, K.J. and Hicklin, A., 2008. Employee turnover and organizational performance:
Testing a hypothesis from classical public administration. Journal of Public
Administration Research and Theory, 18(4), pp.573-590.
Need, W.C.D.H.P., 2006. Human resource management: Gaining a competitive advantage.
Purcell, J. and Hutchinson, S., 2007. Front‐line managers as agents in the HRM‐performance
causal chain: theory, analysis and evidence. Human Resource management
journal, 17(1), pp.3-20.
13

Umble, E.J., Haft, R.R. and Umble, M.M., 2003. Enterprise resource planning:
Implementation procedures and critical success factors. European journal of
operational research, 146(2), pp.241-257.
Yahya, S. and Goh, W.K., 2002. Managing human resources toward achieving knowledge
management. Journal of knowledge management, 6(5), pp.457-468.
14