Strategic Human Resource Management: A Case Study of Rio Tinto

This case study discusses challenges faced by Rio Tinto in strategic human resource management, including labor absenteeism, inadequate workforce planning and management, unsatisfied workers, labor unrest, and unfavorable working conditions. The resource-based view is a better strategy for the firm to retain its competitive advantage through effective resources like manpower in the firm.

Running Head: Strategic Human resource Management
Strategic Human Resource Management
A case study of Rio Tinto
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Running Head: Strategic Human resource Management
Table of Contents
Introduction...........................................................................................................................................3
Body......................................................................................................................................................3
Unsatisfied workers...........................................................................................................................3
Workforce planning and management...............................................................................................3
High labour absenteeism and turnover...............................................................................................5
Labour unrest.....................................................................................................................................6
Work condition..................................................................................................................................7
Conclusion.............................................................................................................................................7
References.............................................................................................................................................9
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Introduction
Rio Tinto is a multinational mining firm based in Australia. The firm is engaged in the
production of iron ore, copper, metal, diamonds, uranium and coal, and aluminum. This essay
is going to discuss some challenges like labor absenteeism, inadequate workforce planning
and management, unsatisfied workers, labor unrest and unfavorable working conditions.
Applicability of SHRM framework has been discussed to curb the challenges in the context
of the firm.
Body
Unsatisfied workers
Dissatisfaction among workers, in relation to the firm Rio Tinto, causes poor productivity in
the company. This is a challenge to strategic HRM of the firm. The cause behind this may be
poor working conditions for the employees during underground work where smoke and smell
of poisonous gas causes harm to the health of workers. This problem could be solved by the
firm concentrating on making better working conditions. SHRM has a popular theoretical
model which considers the behavioral perspective. This suggests that there is an intermediary
effect on the relationship strategy of business and performance. Jackson, Schuler, and Jiang,
(2014), argued about the efficiency of the model on another if to optimize the performance.
Kramar, (2014), stated about the resource-based view as a most important perspective which
will enable the firm to focus on its resources for using to its advantage for improving working
conditions and environment for the sake of the workers. Possibly this could assist in
controlling the unsatisfied workers. Employees no matter how much talented if not assured of
their health and safety then cannot perform to their full potential and remain unsatisfied and
cannot perform better and the firm suffers from low productivity in the industry leading to
loss of reputation (Budhwar and Debrah, 2013).
Workforce planning and management
Inadequate workforce planning and management have crippled the efficiency of Rio Tinto.
Even mass recruitment drive by the firm could not ensure the firm of its ability to meet the
additional demand. This made the firm believe that productivity among staffs was not
adequate to produce the required volume of supply for customers. The firm also thought of
going for additional recruitment. Since the low productivity is reflected here, it is easy to
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understand that the firm has the problem of In Inefficient workforce planning and
management (Marler and Fisher, 2013. The firm Rio Tinto by following a strategic
framework for workforce planning can ensure its overall workforce management. Under this
framework business strategy and HR strategies are aligned for reaching to final results which
pass through numbers of activities such as planning of recruitment, retention of employees,
their development, engagement in organizational work, gap analysis or further planning and
further recruitment based on requirement.
Figure 1- Workforce planning
(Source: www.prescientstrategists.com)
Theory of Universalistic or best approach is a suitable principle for the firm in this category
which complements Guest model of HRM for achieving better results from workforce
planning of the firm.
According to the Guest model of HRM, Strategy of human resource management leads to
financial achievement through HR practices and results, behavior outcomes, and
performance-based results by managing the workforce. Baluch and Ridder ( 2017), criticised
the theory of universalistic stating that there is hardly any kind of universal strategy for
strategic HRM. This view is not supported by Bratton and Gold (2017).
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Figure-2 Guest model of HRM
(Source: www. professionalshiksha.blogspot.com)
High labor absenteeism and turnover
This is the challenge to SHRM and is confronted by Rio Tinto. The reason is employees’
resentment probably linked to workplace dissatisfaction further complicated by poor and
unhealthy working conditions. For controlling this problem the firm needs to improve
working conditions and appropriate model of strategic HRM in this context is the
contingency approach that highlights the importance of adopting Resource-based view for
minimizing the problem. Resource-based view help to understand the resources that help the
firm to achieve a sustainable competitive advantage. Wood and Kispál-Vitai (2014) argued
that motivation therefore in this hypothesis is least considered while it is stated by Purce
(2014), that motivation is all about encouraging people to achieve organizational mission.
Since RBV is helpful for understanding the relationship among HR practices and competitive
advantage, the issues like high absenteeism and turnover must be looked into from
perspective of employees and better strategies backed by RBV could origin within the HRM
realm to set a balance between motivation among employees and competitive advantages in
the industry. It is also anticipated that the firm once gets over this issue will find absenteeism
controlled by HRM of the firm (Nankervis et al, 2016).
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Figure 3- The Resource-Based View
(Source: www.researchgate.net)
The firm needs to analyze the core competencies of the business. Employees are to be looked
upon as resources for retaining the best value that is human resource. It is important for the
firm to maintain its competitive advantage. Motivation program integrated into the RBV
framework can generate useful aspects of performance and behaviors among the employees.
This analysis of the issues and strategies for mitigating the same are possibly for ensuring
better results for the firm through its sustained competitive advantage in the mining industry
(Taylor, Doherty and McGraw, 2015).
Labour unrest
The case study shows that employee resentment is a most habitual aspect of employee
behaviors and this is attributable to the firm’s part for not adequately understanding their
problems. The primary reason for this is an unhealthy working condition and inadequate
workforce planning and management. Within theoretical interpretation, if these are
interpreted then contingency approach prevails over universalistic theory. Best approach on
basis of the universalistic theory is often compared with contingency approach for managing
employees better. In the rise of the problem of labor unrest, the contingency approach is most
helpful for managing as a firm like Rio Tinto often views such happening as sudden and
unpredictable. Scholars like (Alfes et al, 2013), also preferred the contingency approach over
other methods for managing people when there is certain unrest within an organizational
setting. This is also highlighted that contingency approach often rectifies other associated
inadequacies such as poor control or management whereas this view is nullified by
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Akingbola, (2013), as it was opined that contingency approach only mends a long drawn
issue but in the process inadequacies if any are existent that can be spotted rather than getting
rectified. This has also been agreed upon by Lengnick-Hall et al,( 2013). Moreover, the
problem like labor unrest is manageable by the firm with its application of Strategic HRM.
Work condition
The working condition in the firm is not congenial to the development of employees’
motivation. This is another issue found in the company which is the cause of low motivation
among them. These are viewed as a challenge to HRM of the company as performance
delivery and productivity both become uncertain and hamper the overall performance of the
business. From the case study, it is apparent that the firm’s employees work in an unhealthy
condition. They are exposed to poisonous gas which is harmful to their health. These factors
are a negative aspect of manpower management and the working culture of the firm and
affect the productivity and motivation among employees (Storey, 2014). Moreover, other
problems like absenteeism, dissatisfaction among employees are also due to this condition of
working in the firm. This situation makes it obligatory on the firm’s part to implement a
strategy for improving overall employee performance caused by the better level of
motivation. The resource-based view does appear as a better strategy for keeping business
ahead by focusing on core competence and its retention by altering the working situation in
the firm. Better working aspects under favorable working conditions along with healthy
environment become a positive factor for increasing productivity and the firm is likely to
achieve its supply target.
Conclusion
Human resource management is an integral part that connects employees with the vision and
mission of firms and as a result, manages and motivate employees.
Self - Reflection
From the case study, I have understood the importance of strategic human resource
management and its application with several theoretical frameworks within a firm. The
significance of culture of the firm reflects through HRM which based on a strategy for
managing working forces keep HR strategy aligned with motivation boosting approach and
overall objectives of the firm. For becoming an effective hr manager it becomes imperative
for understanding several challenges which may appear in course of people management.
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Therefore I think that several theories regarding strategic HRM hold importance for
minimizing challenges that cripple the organizational performances. The case study of Rio
Tinto has shed knowledge that offered me required insight about the existing problem there.
This has prepared my knowledge regarding several aspects of effective human resource
management that remain strategic and pivotal to the firm’s overall performance. Knowledge
of important and suitable theories and framework of strategic HRM helped me to increase my
level of confidence for becoming an efficient HR manager to serve a firm if will work in.
Conclusion
The case study of the company reflects some challenges relating to strategic HRM. Issues
like labor unrest, poor working conditions, inadequate workforce planning and management,
high absenteeism, dissatisfaction among workers have negatively affected the performance of
the company leading to inability to meet the supply targets. However, the issues are
manageable beforehand by taking suitable strategies for modifying working conditions,
motivating the workforce for performing better. The resource-based view is a better strategy
that is helpful for the firm to strategically retain its competitive advantage through effective
resources like manpower in the firm (Sikora and Ferris, 2014). Universalistic theory and
contingency approach are also suitable in different circumstances. Labour unrest,
Contingency approach is more suitable for managing issues like labor unrest, high
absenteeism, and turnover. The resource-based view is most essential and within strategic
framework serve better the HRM purposes of a firm. The universalist theory is somewhat
criticized as many scholars do think that there is no universal recommendation relating to
Strategic HRM worth implementation in varied situations in a firm.
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References
Akingbola, K., 2013. A model of strategic nonprofit human resource management. Voluntas:
International Journal of Voluntary and Nonprofit Organizations, 24(1), pp.214-240.
Alfes, K., Shantz, A.D., Truss, C. and Soane, E.C., 2013. The link between perceived human
resource management practices, engagement and employee behaviour: a moderated
mediation model. The international journal of human resource management, 24(2), pp.330-
351.
Baluch, A.M. and Ridder, H.G., 2017. Strategic Human Resource Management. In The
Nonprofit Human Resource Management Handbook (pp. 89-106). Routledge.
Bratton, J. and Gold, J., 2017. Human resource management: theory and practice. Palgrave.
Budhwar, P.S. and Debrah, Y.A. eds., 2013. Human resource management in developing
countries. Routledge.
Jackson, S.E., Schuler, R.S. and Jiang, K., 2014. An aspirational framework for strategic
human resource management. The Academy of Management Annals, 8(1), pp.1-56.
Kramar, R., 2014. Beyond strategic human resource management: is sustainable human
resource management the next approach?. The International Journal of Human Resource
Management, 25(8), pp.1069-1089.
Lengnick-Hall, M.L., Lengnick-Hall, C.A. and Rigsbee, C.M., 2013. Strategic human
resource management and supply chain orientation. Human Resource Management Review,
23(4), pp.366-377.
Marler, J.H. and Fisher, S.L., 2013. An evidence-based review of e-HRM and strategic
human resource management. Human Resource Management Review, 23(1), pp.18-36.
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Nankervis, A.R., Baird, M., Coffey, J. and Shields, J., 2016. Human resource management:
strategy and practice. Cengage AU.
Purce, J., 2014. The impact of corporate strategy on human resource management. New
Perspectives on Human Resource Management (Routledge Revivals), 67.
Sikora, D.M. and Ferris, G.R., 2014. Strategic human resource practice implementation: The
critical role of line management. Human Resource Management Review, 24(3), pp.271-281.
Storey, J., 2014. New Perspectives on Human Resource Management (Routledge Revivals).
Routledge.
Taylor, T., Doherty, A. and McGraw, P., 2015. Managing people in sport organizations: A
strategic human resource management perspective. Routledge.
Wood, G. and Kispál-Vitai, Z., 2014. Strategic Human Resource Management. Strategic
Human Resource Management: An International Perspective, p.72.
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