Strategic Human Resource Management and Employee Relations

This document provides insights into the importance of Strategic Human Resource Management (SHRM) and Employee Relations in improving organizational performance. It discusses the relationship between business strategy and HR strategy, vertical alignment and horizontal integration, theoretical models of SHRM, and critical evaluation of HR practices. It also explores the nature of employment relations, the role of employee participation and voice in improving relations, and the changing nature of employment relations.

Human Resource
Management

Executive Summary
Strategic Human Resource Management or SHRM is important for an organization
because it contributes to the company’s overall performance. This is because it aligns the
performance of the company along with the overall business strategy of the organization.
Employee relations is another important component that ensures that a healthy and positive
environment is maintained in the workplace and that both employers as well as employees are
comfortable in working with each other.

Contents
Executive Summary...................................................................................................................................2
Task 1.........................................................................................................................................................4
INTRODUCTION.....................................................................................................................................4
MAIN BODY.............................................................................................................................................4
Relationship between Business Strategy and the Human Resource Strategy...........................................4
Vertical alignment and horizontal integration across an organization......................................................5
Theoretical basis and models of SHRM..................................................................................................5
Strategic perspectives of Best fit/Contingency, Best Practice/Universalist and Resource Based View
(RBV)......................................................................................................................................................6
Critical evaluation of specific HR practices of Performance Management and Reward..........................7
Recommendations...................................................................................................................................7
CONCLUSION..........................................................................................................................................8
Task 2.........................................................................................................................................................8
INTRODUCTION.....................................................................................................................................8
MAIN BODY.............................................................................................................................................9
Nature and theoretical perspectives of Employment Relations................................................................9
Roles of the actors within the Employment Relationship........................................................................9
Analysis of the changing nature of employment relations.....................................................................10
Contribution of employee participation and employee voice in improvement of employment relations11
CONCLUSION........................................................................................................................................12
REFERENCES........................................................................................................................................13

Task 1
INTRODUCTION
SHRM or Strategic Human Resource Management can be defined as linking human
resources within an organization with its overall strategic goals. This helps in improving overall
performance or the organization and developing a culture that encourages innovation, creativity
which helps in gaining a competitive advantage (Ameh and Daniel, 2017). This task describes
the relationship between business strategy and human resource strategy, along with an
explanation of vertical and horizontal integration within an organization. An evaluation of
different models of SHRM is also included with a critical analysis of the strategic perspectives of
Best fit/Contingency, Best Practice as well as Resource Based View (RBV). A critical evaluation
of specific HR practices of Performance Management and Reward is also included in the task.
MAIN BODY
Relationship between Business Strategy and the Human Resource Strategy
A business strategy can be defined as a set of competitive actions that organizations use
in order to attain desired goals and objectives. Whereas Human Resources Strategy is referred to
as an organization’s overall plan so as to manage its human capital and align with its business
operations. The HR strategy helps in setting direction all he different key areas of Human
Resources like hiring, compensation, performance appraisal etc. Both business strategy as well
as human resource strategy are related with each other (Armstrong and Taylor, 2020). This is
because if an organization will have an effective human resource strategy, there will be positive
relation among employer and employees, the work environment will be healthy and right people
will be hired for vacant positions.
While a human resource strategy is only limited to the activities relating to managing
human capital, the business strategy, on the other hand creates a direction as well as vision for
the whole organization. This is because all employees working in the organization should be
clear about the goals and should follow the same direction. There are a number of factors that
can affect the relationship between human resource as well as business strategy. Therefore, it is

important to have an effective human resource strategy so that best employees can be recruited
and selected.
Vertical alignment and horizontal integration across an organization
Vertical alignment can be defined as the arrangement of strategies, action plans and
objective throughout the different levels of an organization. In simple words, it means that
everyone working in the organization is aware of its goals, objectives and understand how their
individual work can contribute towards these goals. This helps in ensuring that all the work that
is done supports these goals and objectives. Vertical alignment makes sure that everyone in the
organization contributes to common goals and works effectively for the company’s overall
success (Define Vertical Alignment, 2020). It encourages efficiency among employees because if
they will have an understanding of the company’s goals, they will put in more efforts to
complete the work assigned to them.
In a horizontal integration, an organization takes over another organization that operates
at the same level of the value chain either in a similar or a different industry. For example, the
merger of Morrison’s with Subway can be referred to as a horizontal integration. One of the
benefits of a horizontal integration is that the organization gains increased power in the market
and also acquires that ability to capture ne markets significantly. Other benefits include larger
share in the market, bigger base of customers as well as increased revenue for the company.
Theoretical basis and models of SHRM
The SHRM helps in improving the overall organizational performance by aligning with
the overall business strategy. Dyer classified models of SHRM into four groups, organizational
SHRM content models, functional SHRM content models, organizational SHRM process models
as well as functional SHRM process models (Bailey and et. al., 2018). SHRM’s Competency
model differentiates between four different levels of careers, namely- early, mid, senior and
executive. This is because the Human Resource titles as well as needs of the organizations vary
from each other. The Competency model also identifies specific behaviors that define expertise
at each stage of career of an HR professional. It acts as a resource and helps in understanding
how an individual should perform so as to succeed in the next level of their respective careers.
Also, as per the view point of Patrick M. Wright, there are six theoretical models of
SHRM namely, behavioral perspective, cybernetic models, resource-based view of the firm,

resource dependence model, institutional theory and transaction cost theory (Theoretical
Perspectives of Strategic Human Resource Management, 2001). Therefore, all these models of
HRM ensure that the overall performance of the organization is improved. Also, the models help
in identifying various stages within the planning as well as decision making process which
includes designing the mission of the company to formulating and implementing plans relating to
Strategic Human Resource Management.
Strategic perspectives of Best fit/Contingency, Best Practice/Universalist and Resource Based
View (RBV)
Best fit is an approach in human resource management which focuses on the importance
of making sure that strategies relating to human resources are appropriate and in sync with the
circumstances of the organization (Bratton and Gold, 2017). This can include its culture,
operational processes as well as the external environment. On the other hand, best practice
approach is related to a viewpoint that there is a set of best HRM practices and their adoption
generates positive results despite of the circumstances that are associated with the organization.
Resource-based View is a framework that is basically used in order to determine the strategic
resources that an organization can utilize in order to gain a competitive advantage.
VRIO Model
Resources Valuable Rare Inimitable Organized
Products ✓
Customers ✓ ✓
Patents ✓ ✓ ✓
Employees ✓ ✓ ✓ ✓
Valuable
 Valuable resources help an organization in gaining competitive advantage and include
products, customers, patents and employees (Brewster and Hegewisch, 2017).

 This is because products provide a brand image to the organization, customers contribute
to its overall profitability, patents ensure that the products are not copied by any
competitor and employees contribute to the overall success of the company.
Rare
 These are those resources that are rare and difficult to obtain and can be considered as
assets for the company. Customers, patents and employees are rare resources.
 This is because the customers of a particular company are difficult to find elsewhere,
patents are of the nature that they cannot be copied and employees of the company are
also limited to a particular company.
Inimitable
 These are those resources that are difficult to be imitated by the competitors and are an
asset for the company that has them (Chelladurai and Kerwin, 2018). This helps in
creating a competitive advantage for the firm.
 Patents and employees are inimitable because patents cannot be imitated legally and
employees working for the company cannot work for other company at the same time.
Organized
 Employees of an organization will have to be organized and trained from time to time so
that they acquire important skills.
Critical evaluation of specific HR practices of Performance Management and Reward
Performance Management can be defined as a process that different business activities
and outputs generated meet the organizations goals and objectives effectively and efficiently.
Employees who perform effectively are provided with reward in order to increase their levels of
motivation. As per the viewpoint of Leen Sawalha, HR practices of performance management
and reward include setting goals and establishing a performance plan, conducting frequent
coaching and training the employees (11 Performance Management Best Practices Everyone
Should Know, 2017). Managers of the organization should be provided effective training so that
they can help their team members to be successful and perform efficiently. The training can
include how to coach employees, direct them and providing regular feedbacks. Part from this,

latest technology can also be implemented so that the employees get a chance to learn how to
operate the same as well as the unnecessary amount of manual work is also eliminated from the
system.
Recommendations
A performance management system is important for an organization because it enables it
to track as well as monitor the overall performance of the employees and departments. It is
generally based on specific job competencies within the company. A performance management
help managers and employees of the company to track progress as well as set goals. Also, with a
performance management system employees and managers can work more collaboratively and
ensures that expectations are met. In order to design a performance management system, the
client is recommended to first evaluate its current performance appraisal performance, identify
organizational goals and set performance expectations. Once this is done, performance
throughout the year should be developed and monitored along with an evaluation of the same.
Lastly, it is recommended that the client should set performance expectations for the next year.
This will support overall development of the organization.
CONCLUSION
From the above report, it can be concluded that strategic human resource management
plays an important role in an organization. This is because it helps in improving the company’s
overall performance by aligning goals relating to human resources to the overall business
strategy of the company. Also, human resource strategy and businesses strategy are related to
each other and ensure that organizational goals and objectives are achieved.
Task 2
INTRODUCTION
Employee relations can be defined as the efforts made by an organization to manage
relationships between employers as well as employees. Organizations that have positive and
healthy employee relations treat their employees in a fair and consistent manner. The main
purpose of employee relations is to strengthen the relation between employer and employees as
well as resolve issues at the workplace (Delery and Roumpi, 2017). This also helps in enhancing
overall morale and confidence of the employees which leads to an increase in their productivity.

This task explains the nature of employment relations and how participation as well as the voice
of employees help in improving employment relations. An analysis of the changing nature of
employment relations is also included.
MAIN BODY
Nature and theoretical perspectives of Employment Relations
Employee relations are an organization’s efforts to create and maintain healthy and
positive relationship with its employees. An organization that encourages positive employee
relations in its workplace has employees who are engaged and committed to their jobs (Dumont,
Shen and Deng, 2017). The human resources department is usually responsible for managing
employee relations within the company. There are several benefits of having good employee
relationships, these include increased loyalty as well as motivation of employees within the
company, healthy workplace culture, enhancement in work-life balance, reduced chances of
workplace conflicts etc. Not having good employee relations can lead to a decline in overall
performance and productivity of the company. Due to this, the confidence and morale of
employees will also come down. Therefore, it is important to encourage effective employee
relations within the company in order to maintain its overall performance. Various measures can
be taken by the management of the organization in order to do so.
There are basically four major employment relationship theories, which are Pluralist,
Unitarist, Radical as well as Marxist. In the unitarist approach, all members within the company
share the same interest and are homogenous. Third parties in this approach are viewed as
irrelevant because employers and employees work with a mutual corporation. The managers and
employees share a common goal as they are loyal towards the company. In a radical perspective,
it is assumed that an organization exists within a capitalist society wherein product system is
privately owned. On the other hand, Marxism can be defined as a method of socioeconomic
analysis wherein relations and social conflicts use a materialistic interpretation. The last
approach is pluralism, which is the study of power and states that nothing about power can be
assumed for any community. Therefore, these are some of the major theoretical perspectives of
employment relations.

Roles of the actors within the Employment Relationship
There are three actors within the employment relationships, namely- the employees,
employers and the management of the organization and state (Guest, 2017). All of them play
different roles in the company, for example- the management is responsible for informing any
kind of change to the employers as well as employees. It also offers advice and trains the
employees relating to industrial issues. The employer is responsible for protecting and
maintaining the health, safety and welfare of the employees working in the company. And they
must take whatever measures are required in order to achieve this. Employers must also provide
important information about the risks within the workplace and also conduct training for the
employee of the company (Liu and et. al., 2017). They should also ensure that all employees
receive their salaries on time and that there is an overall improvement in their social being.
Employees on the other hand, also play an important role in employment relations. They ensure
that tasks provided to them by the employer are completed on time without any compromise on
quality.
The state is responsible for regulating the employers as well as employees to handle their
disagreements (Jensen, 2017). Apart from this, the state maintains and sustains harmony in the
industry. The Human Resource department within the company has the major responsibility of
monitoring and encouraging the employees as well as employers share a healthy relationship
with each other. This can be done by implementing different policies and adopting effective
measures. The HR professional should make sure that the employees and employers are
comfortable in working with each other. All the three actors within the employment relationship
are responsible for working together with a set of rules in order to improve their overall
relationships as well as understanding with each other. Therefore, all three actors must contribute
equally in order to maintain healthy employment relations.
Analysis of the changing nature of employment relations
Employment relations have changed significantly overtime and have impacted both
organizations as well as the employees working for it. There are many factors that have and
continue to contribute to the changing nature of employment relations (Kianto, Sáenz and
Aramburu, 2017). These factors can either be external or internal like changing nature of work
and employment, health and safety, industrial disputes, communication, technology,

qualifications of employers and employees etc. Employees within a company who feel that they
can communicate or share their concerns with others, usually have a higher morale as compared
to those who don’t feel so. Today, both employees as well as employers working in an
organization are so qualified that they are more confident and comfortable in working with each
other. This has led to a drastic change in employment relations. In earlier times, the concept of
having effective and positive employment relations was not encouraged or promoted in the
workplaces as much as it is done today.
Today, organizations have realized the importance of having good employment relations
and thus, adopt various measure to make sure that employers and employees are comfortable in
working with each other (Nica, 2018). The culture of the organization is made such in order to
make sure that all employees within the company are treated in a fair and consistent manner by
their employers. Previously, companies that had a strict culture and did not reward their
employees despite performing well, used to have employees who had a very less sense of
ownership of their work. As a result, they were not committed and engaged in their work and
there were conflict issues every now and then. But this is not the case today as companies
promote healthy relations among employers and employees. Due to this, they work
enthusiastically and are much more engaged in their jobs.
Contribution of employee participation and employee voice in improvement of employment
relations
Employee participation can be defined as the process wherein employees of an
organization are encouraged and involved by their managers or team leaders in the process of
decision making. It plays an important role in encouraging empowerment ad healthy employee
relations within the company. When employees are encouraged to participate in such processes,
they feel a sense of ownership and come forward to share their ideas. This helps in building a
positive and healthy relation of employees with their employer (Rana and Malik, 2017). There
are many benefits of employee participation like it helps in building a community wherein all
employees are treated fairly. There is less stress among employees within an increase in their
overall productivity and performance. Apart from this, the employees start feeling comfortable in
working with others which leads to creation of an effective and healthy employment relations.

On the other hand, employee voice can be defined as the means wherein employees
within a company communicate their views to their employers. It can significantly contribute in
the overall improvement of employment relations. Employees who find their voice within the
organization are more focused and committed to their work. Also, they are satisfied with their
jobs and utilize the opportunities that are provided to them in the most efficient way. As far as
employers are concerned, effective voice can contribute to overall innovation productivity as
well as an overall improvement of the organizations’ performance. Employee voice does not
only help in developing their overall capabilities, but also improve their engagement to their
work as well as retention in the company as well (Shuck, Adelson and Reio Jr, 2017). Therefore,
both employee participation as well as employee voice play an important role in improving
employee relations within the company.
CONCLUSION
From the above task, it can be concluded that healthy and positive employee relations are
necessary for an organization because it contributes to the overall performance as well as
productivity. Also, the efficiency of employers as well as employees working in the company
increase which further leads to an enhancement in the overall efficiency in which employees of
the company perform. Employee relations have changed a lot over time because organizations
have understood the importance of same. Lastly, encouraging employees to participate in the
decision-making process as well as providing them a means through which they can voice their
concerns, contributes to the overall improvement in employment relations.

REFERENCES
Books & Journals
Ameh, O. J. and Daniel, E. I., 2017. Human resource management in the nigerian construction
firms: Practices and challenges. Journal of Construction Business and Management. 1(2).
pp.47-54.
Armstrong, M. and Taylor, S., 2020. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Bailey, C. and et. al., 2018. Strategic human resource management. Oxford University Press.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Brewster, C. and Hegewisch, A. eds., 2017. Policy and practice in european human resource
management: The Price Waterhouse Cranfield survey. Taylor & Francis.
Chelladurai, P. and Kerwin, S., 2018. Human resource management in sport and recreation.
Human Kinetics.
Delery, J. E. and Roumpi, D., 2017. Strategic human resource management, human capital and
competitive advantage: is the field going in circles?. Human Resource Management
Journal. 27(1). pp.1-21.
Dumont, J., Shen, J. and Deng, X., 2017. Effects of green HRM practices on employee
workplace green behavior: The role of psychological green climate and employee green
values. Human Resource Management. 56(4). pp.613-627.
Guest, D. E., 2017. Human resource management and employee well‐being: Towards a new
analytic framework. Human Resource Management Journal. 27(1). pp.22-38.
Jensen, R. S., 2017. Pilot judgment and crew resource management. Routledge.
Kianto, A., Sáenz, J. and Aramburu, N., 2017. Knowledge-based human resource management
practices, intellectual capital and innovation. Journal of Business Research. 81. pp.11-20.
Liu, D. and et. al., 2017. Human resource systems, employee creativity, and firm innovation: The
moderating role of firm ownership. Academy of Management Journal. 60(3). pp.1164-
1188.
Nica, E., 2018. Will robots take the jobs of human workers? Disruptive technologies that may
bring about jobless growth and enduring mass unemployment. Psychosociological Issues
in Human Resource Management. 6(2). pp.56-61.
Rana, M. H. and Malik, M. S., 2017. Impact of human resource (HR) practices on organizational
performance. International Journal of Islamic and Middle Eastern Finance and
Management.
Shuck, B., Adelson, J. L. and Reio Jr, T. G., 2017. The employee engagement scale: Initial
evidence for construct validity and implications for theory and practice. Human Resource
Management. 56(6). pp.953-977.
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Theoretical Perspectives of Strategic Human Resource Management. 2001. [Online]. Available
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