The Strategic Context of Human Resource Management

This report discusses contemporary issues and key theories of human resource management in the context of Trufflebags ltd. It assesses strategic HRM approaches, analyzes internal and external factors that impact HRM practices and strategies, proposes solutions to business problems with STEEPLE analysis, and evaluates stakeholder interest and market recommendations about HRM activities.

The Strategic Context
of Human Resource
Management

Table of Contents
Introduction................................................................................................................................3
Main Body..................................................................................................................................3
Analyse contemporary issues and key theories relating to human resource management.....3
Assess strategic HRM approaches in practice in given context.............................................4
Analyse internal and external factor of an organisation which impact the development of
role of HR, strategies of HR and practices.............................................................................5
Propose the solution to a specified business problem which are as under:............................6
STEEPLE analysis..................................................................................................................6
Identify socio-culture and socio-economic factors from the analysis which impact the
choice of intervention.............................................................................................................7
Critically evaluate stakeholder interest and market recommendation about the HRM
activities which can help the organisation in moving forward without conflict....................8
Conclusion..................................................................................................................................8
References................................................................................................................................10

Introduction
Human resource management is the process recruiting, selecting and hiring employees and
make their development so that they can be valuable for the company. HRM is a department
in a business concern which perform various function like human resource planning,
conducting job analysis, recruitment, interviews, hiring, orientation, training, compensation
and other benefits, appraisals, retaining and so on(Stone, Cox and Gavin, 2020). In this
report, Trufflebags ltd. has been taken into consideration which is a manufacturer of
confectionary products such as chocolates, toffees, soft drinks and ice creams etc. in UK. The
report will cover the contemporary issues and theories relating to the human resource
management. Further, it will discuss the strategic approaches of human resource management
and internal and external factors of an organisation which cam impact the role, strategies and
practices of HR. Apart from this, it will explained the steeple analysis of the organisation and
analysis will be made of socio-culture and socio-economic culture factors. In addition to this,
it will evaluate the stakeholder interest and recommendation about the HRM activities.
Main Body
Analyse contemporary issues and key theories relating to human resource management
The contemporary issues and the theories has been discussed in context to the company
which are described as under:
Contemporary issues relating to human resource management
 Compliance with laws and regulation: This the big issue to remain updated with the
laws for the human resource department because the HR team is not sure that they are
following the rules. They are responsible to track, make updation and provide
assurance that the all job which are posted by them include the required
wording(Chelladurai and Kim, 2022). When they do all work manually then this takes
a lot of time which leads to high cost occurring. In relation to Trufflebags ltd. the HR
department should ensure the compliance with the regulations from hiring practices,
to wage payment, to workplace safety.
 Employee retention: This is also another issue to retain the employee in an
organisation because the company bears the greater cost to hire the new employees
when existing employee leave or resign. This situation occurs when employee feel no
security, consider lower wages and so on which force them to leave the organisation.
With reference to Trufflebags ltd., the employees are not getting proper wages that

why they are forcing to leave their job. Therefore, the company should offer
appropriate wages to their workers and also rewarded them for their better
performance.
Key theories related to human resource management
 Strategic contingency theory: In this theory, a leader becomes the central part of the
organisation for his or her unique skills and knowledge which helps in providing
solution to the problems. Therefore, the organisation depends too much on the leader
and is not easily replaceable. The contingencies are controlled by the subunit of the
organisation. Thus a leader is can affect the organisation when it may leave or resign
because the entire department rely on that leader which may hinder the working if the
organisation.
 Transactional cost theory: This is a part of the corporate governance and agency
theory which is based on the principle that when someone hires the other to perform
the work then this will occur cost(Armstrong and Taylor, 2020). This theory suggest
that each type of transaction produce the coordination cost of monitor the transaction,
controlling the transaction and managing the transaction. All the transaction are
determined by the nature of cost. Therefore, it helps the HR in understanding the
transaction so that the extra cost can be removed which protect the company from the
risk and uncertainties.
Assess strategic HRM approaches in practice in given context.
There are various approaches in human resource management which are described as under
in relation to the Trufflebags ltd.:
Performance based approach: This is an approach which contribute to the success of the
business and also evaluated how it is done. This helps in aligning the individual goals
according to the priorities of the businesses by effective use of resources. This help the
organisation in establishing goals for the businesses and enable it to develop a plan to achieve
the objective of the business(Emeagwal and Ogbonmwan, 2018). In relation to Trufflebags
ltd., it monitors the performance of each individuals in a business concern so that the can
observe how well the employee are doing. Then they asses it and provide reward for the good
performance and organise training program for those who have shortcoming in performing
their work.

Commitment based approach: This is the practice of HR which enable the implementation
of the profit sharing and gain sharing such as bonus that is based on the performance of the
employees. This approach influence the retention of the employees and focus on the mutual
and long term relationship. With reference to Trufflebags ltd., the employee are compensated
according to their performance. When they have performed well then they would be provided
reward and recognition in an organisation but when they lack in performing their work and
low skills so they are provided training to enhance their ability to perform the work.
Resources based approach: This is an approach which provides the company strategic
resources to gain the competitive advantage. Therefore the resource based view identify the
function of the HR as a strategic key so that it can develop the sustainable competitive
advantage(Knezović, Bušatlić and Riđić, 2020). This has been understood by the VIRO
framework where it is measured that human resource are valuable for the company because
sometimes they are considered the cost by an entity but it is important as well as they
generate revenue. In context to Trufflebags ltd., the employees are rare in an organisation
because they are skilled and provide their best output to the business. The human resource of
the company develop such skills and characteristic that cannot be imitated by the competitors.
This help the company to gain the competitive advantage.
Analyse internal and external factor of an organisation which impact the development of role
of HR, strategies of HR and practices.
There are some internal and external factors which affect the role, strategies and practices of
HR which are depicted as under:
External factors
 Available labour pool: This main function of the HR department is to maintain the
staffing level through manpower planning. But, sometimes the external factors affect
the facility of the recruitment of the qualified people which is the availability of the
labour market. The labour market is affected by the unemployment rates and number
of the capable workers(Ahmed and et. al., 2021). They have the specialised skills
where an organisation find difficulty in identifying and attracting suitable candidates
especially when they have same skills. Therefore, the HR of the organisation focuses
on the recruitment efforts even outside the region and also make available the
relocation package to the qualified and skilled workers.

 Government regulation: There are various laws and regulation which a business
concern have to compliance in relation to the workers safety, health, training,
compensation and so on. The regulations impacts the organisation when these are not
complied because there may be situation arises where suit can be file by the
employee, customers, vendor and other people therefore, in order to save itself the
company should abide by the rules and regulation. This situation may occurs when the
company charge over prices for their products may adopting price discrimination
policy. The company may be held liable for its act and also be penalised for these
activities.
Internal factors
 Level of growth: The Expansion of the business may require its human resource
department to focus on the recruitment and staffing process. They should employee
the skilled and qualified staff which help in taking the company towards the success
or the growth. With reference to the Trufflebags ltd., the company should organise the
training and development program for its existing employees so that they can increase
their knowledge and capabilities(Amjad and et. al., 2021). This will help in boosting
the confidence of the workers which encourage them to be more productive and
retained in an organisation.
 Use of technology: This is another internal factor when the new technology is bring
in the organisation to provide easiness to the worker in performing their work. For
this purpose the company have to organise the orientation program for their worker so
that they can get aware about the new technology. This helps a business concern to
use such tools in order to enhance their performance which leads the business towards
the success. In relation to Trufflebags ltd. It hires the skilled workforce which assist
the business organisation in achieving the goals.
Propose the solution to a specified business problem which are as under:
STEEPLE analysis
It is a strategic planning tool which is used by the marketers to make the strategies
which assist in measuring the macro environmental factors. It help in checking the
reasonability or validity of the targets of the business and the strategies(Shah and Chan,
2021). With reference to the Trufflebags ltd., the factors are described as under:

Social: This is the factors which includes the cultural changes and market researches that
may affect the business and its profitability. This analysis helps in finding out the lack in the
marketing strategies and offers new ideas to the business. In context to Trufflebags ltd., it
provides the products according to the taste of the customers and adapt itself according to the
changing factors.
Technological: The technological factors involve the progress and developments of the
technologies, activities for the research and the development, automation and rate of change
in the latest technologies. In relation to the Trufflebags ltd., it adopts the technology which
help in eliminating the risk and enhance the efficiency of the production level.
Economic: This factors refers to the economic situation of the business which can be affected
by the interest rates, exchange rates, taxes, inflation rates and so on. With reference to the
Trufflebags ltd. It is affected by the interest rates and inflation rates where it increase the
prices of the products which affect the purchasing power of the customers and result in sales
decline.
Environmental: This factors is includes the legislation for the protection of the environment,
management of the waste and disposal, water, air, energy efficient technologies and so
on(Raybould, 2021). In context to the Trufflebags ltd., it makes the maintainable products
and bring sustainability to operate its business activities which may affect the business.
Political: This factors refers to the involvement of the government which may affect the
operation of the business organisation. This includes the, tax policies, employment laws,
trade restriction, tariffs, and stability of the ruling party and so on. Ion relation to Trufflebags
ltd., its business can be impacted and intervene by the authorities when it would not follow
the rules and regulation but the company have good relation with the government therefore it
can operate its business easily.
Legal: This factors includes the employment laws, minority protection act, compensation
laws and regulation and so on. With reference to Trufflebags ltd, it implement all the legal
regulation and policies to ensure the complete compliance.
Ethical: This refers to the ethical standard which is followed by the organisation. It includes
the morality, code of conduct, duties, integrity, behaviour and so on. In relation to
Trufflebags ltd., it follow the ethical culture and create its code of conduct so that everybody
perform the ethically.

Identify socio-culture and socio-economic factors from the analysis which impact the choice
of intervention
The socio culture factor is considered important in implementing the marketing
strategies because it stimulates the activities of the business. These factors affect the decision
of the customers which directly impact the business of the organisation(Lin and
Kaewkhunok, 2021). This factors may include the customs lifestyles and values that
symbolise the society. In relation to Trufflebags ltd., this is the common tradition, belief,
pattern that present in the population and used in sociologic and marketing context. The firms
aims to provide the products and services according to the taste to the people or the targeted
customers. This factors analyse the potential of the customers to accept the products.
Socio economic factors relate to the economic and social factors which studies the
economic activities that affect and shaped by the social processes. It analyses how the society
develop and deteriorate because of the regional economy(Jehan and et. al., 2022). In context
to Trufflebags ltd., these are the life style elements and quantity of the financial feasibility
and social standing which influence the social freedom and economic freedom. The income
and the occupation are the factors which contribute to the socio economic factors.
Critically evaluate stakeholder interest and market recommendation about the HRM activities
which can help the organisation in moving forward without conflict.
This is the process of identifying and assessing the needs of the people before starting
the project work and grouping them according to their interest and partition which may
influence the project. The stake holder interest has been evaluated as under in context to
Trufflebags ltd.:
High power, high interest: These are the most important stakeholders which help the
company in reaching to the success. With reference to Trufflebags ltd., a business concern
categorise the stakeholders ion the basis of the interest and level of participation(Moghaddasi,
Kerachian and Sharghi, 2022). These types of stakeholder invest the huge amount to the
company in order to gain the higher return on investment.
High power, low interest: These are the stakeholder which influence the company therefore
the company keep them satisfied. Win relation to the Trufflebags ltd., these are the
stakeholder who don’t have much interest in the projects but they invest the amount.
Low power high interest: In context to Trufflebags ltd., these rare the people to whom the
company encourage to engage with it and assure that no major issue are arising.

Low power and low interest: With reference to Trufflebags ltd., these are the stake holder
who have low inters in the project and are not interest in investing the amount(Sharpe,
Harwell, and Jackson, 2021). But company still engage them with the company.
Conclusion
From the above discussion it has been concludes that human resource department
plays an important role in an organisation. It is responsible to hire the qualified and skilled
candidates in an organisation in order to perform work in proper way which assist in
achieving the goal of the business. The report has discussed about the contemporary issue
that are faced by the human resource which may be employee retention or compensation and
so on. It has discussed the theories and approaches of HR with internal and external factors
which impact the role and strategies of the human resource. Further, it has discussed the
steeple analysis and also evaluated the stake holder analysis.

References
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