Strategic HRM & Organizational Performance

This assignment delves into the crucial relationship between strategic human resource management (SHRM) and organizational performance. It examines various academic studies that analyze the influence of SHRM practices on employee turnover, firm performance, and overall organizational success. The paper also explores contemporary HR challenges faced by organizations in Australia, drawing upon online news articles and industry reports. Furthermore, it presents a visual illustration depicting major HR challenges identified by researchers.

STRATEGIC HRM

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................2
QUESTION 2 ..................................................................................................................................2
Part A: Identifying and explaining the main HR challenges faced by the companies in
Australia .....................................................................................................................................2
Part B: Suggesting the HR strategies with an aim to overcome the assessed challenge ............6
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

ILLUSTRATION INDEX
Illustration 1: Major HR challenge..................................................................................................3
1

INTRODUCTION
Strategic HRM is the practice which establishes link between the corporate strategy and
human resource (HR) tactic of an enterprise. It is a new and evolving concept which depicts the
importance of human resources within firm (Davidson, McPhail and Barry, 2011). This essay
will showcase major HR (Human resource) challenges which are being faced by companies in
one specific country. For this purpose, Australia is selected. In addition to this, the essay will
also depict strategies which can be employed by the respective Australian firms with an aim to
deal with the major HR challenges that are being faced.
QUESTION 2
Part A: Identifying and explaining the main HR challenges faced by the companies in Australia
There are different types of challenges that are being faced by firms which are operating
their functions in Australia. In accordance with the given context, as per the human resource
magazine of Australia's top ASX companies, attracting and retaining the talent within the
company is being regarded as the major challenge. This challenge is being faced by most of the
Australian firms (HR's burning issues, 2016). The firms are facing challenges because of a very
tight labour market. It is the type of market where job opportunities are more but individuals
which are required with an aim to perform the respective job are very less. Here, due to the tight
labour market, Australian firms have to put their double efforts on the work of carrying out the
recruitment of talented and skilled individuals. However, with an aim to deal with the given
issue, some Australian firms are using the tactic such as employee referral. By using this
approach, firms are able to manage some of their employee’s related demand. But, still many
Australian firms especially the corporations which require skilled individual face the problem of
employee shortage (Francis and D'Annunzio‐Green, 2005). For example, the given type of
problem is also faced by one of the famous auto-makers of Australia named as Holden. Here, the
firm requires huge team of talented employees but it is unable to meet the given demand because
of tight labour market. Furthermore, the mining sector of Australia is also going through with the
given type of problem. This sector faces problem of skill shortage because of tight and stressful
work schedule of the respective job (HR issues challenge Bowen Basin growth, 2016).
2

The above figure depicts that among all the given options retaining the talent within the
firm for the long period of time is being regarded as one of the most significant challenges which
is being faced by most of the Australian enterprises.
In addition to this, motivating people and improving the performance of them is being
regarded as another most crucial HR issue which is being faced by most of Australian
companies. This issue is faced by the corporation because of diverse characteristics of people
who are working within firm. Due to the tight Australian labour market, managers of different
firms have to employ people from some other country or region. This situation develops
diversity among workers (Nigam and et.al., 2011). Furthermore, employees who are employed
from different nation have varied opinions upon the way of motivation. In this context, it is
assessed that some people feel motivated when firm gives them monetary rewards. However,
some employees feel highly motivated when they receive non-monetary rewards. Thus, it is
responsibility of HR manager that he or she must consider the given factors in an effective way.
This is because, lack of consideration about the same will lead to hamper the motivation of
3
Illustration 1: Major HR challenge
(Source: Theriou and Chatzoglou, 2009 )

employees in a negative way. Due to this, overall performances of Australian firms are
impacting. It is due to the presence of given aspect that the need of motivating Australian
employees is emerging as the major HR issue in front of many Australian enterprises. But, if
firm will not take timely action towards the issue, it will become difficult to attract as well as
retain talented and skilled employees within corporation for the longer period of time (Bratton,
2007). Due to this, overall sales and profitability related condition of firm will be impacted.
Further, organizational cultural change is being regarded as another human resource issue
which is affecting the employees of many firms operating in Australia. In this context, it is
assessed that there is a significant change that is being seen in business environment. Changes
which are occurring in the external environment of firms are forcing respective manager with
regard to perform significant changes within enterprise. Here, in order to corporate with the
different external changes, manager of firm will have to bring different types of changes within
its organizational culture (Rogers and Wright, 2008). Changes in the culture of organization will
lead to cause direct impact upon the motivation of employees. This is because, employees of the
firm do not accept changes promptly. As a result of it they resist towards the same. If their
resistance is not being considered by the respective managers of Australian firms, so at that time
they feel highly demotivated and dissatisfied. Due to this, they will not being able to carry out
their efforts with regard to deliver best services to the firms in an effective way. As a result of
this, it becomes difficult for the Australian enterprise with regard to achieve the strategic goals
and objectives of firm in an effectual way. Furthermore, it is also assessed that many Australian
firms have poor management culture (Corporate Australia 'needs culture change', 2016). In this
context, it is analysed that in many Australian firms, several cases have been seen with respect to
sexual harassment and bullying. There are famous global firms such as Toyota, Enron and
Goldman that are involved in the given type of cases. This is an issue as this thing will lead to
hamper the firm probability of attracting the highly talented and skilled employees. Thus, several
types of problems will be faced by the corporation if they will continuously comply with the
given type of culture. This thing will also hamper the brand image of firm in the market. Due to
this, direct impact will be seen upon the profits of firm (Tiwari and Saxena, 2012).
In addition to this, developing the leadership skill among the people is being regarded as
another most significant HR issues which many Australian firms are going through. It has been
evident from the many literatures that in present scenario leadership skill is required among each
4

and every individual irrespective of their level within firm. This is because, leadership skill
guides the employees towards the right direction. The given ability motivates manager with
regard to put significant efforts which is being taken by them. However, on the basis of analysis
it is assessed that many Australian firm manager are lacking in leadership skill. For example, this
problem is also being faced by the Coca-Cola Amatil. Due to this, the sales and profits of the
corporation is impacting in a negative way. Thus, the issue of developing the leadership skill
among workers is emerging in front of the Australian firm manager (Chang and et.al., 2013).
Hence, for the firms it is essential that it must take timely action with regard to the given issue.
This is because, if not taken then the issue of retaining employees within firms will be emerged.
Further, it can be critically evaluated identifying and hiring candidates is being
considered as another HR issue for the Australian firms. In this context, it has been seen that one
of the most significant challenge which each firm face is to place right employee at the right
position. The Australian firms are going through with the given issue because of their ineffective
recruitment policy. In this regard, it is examined that the many organizations in Australia are
using traditional way of carrying out the recruitment of workers (Su and Wright, 2012). Due to
this, they will not being able to carry out their efforts with regard to place right employees at
right position. Thus, the recruitment process of firm is evolving as the major HR challenge for
the enterprise. In addition to this, succession planning can also be one of the types of HR
challenge for the Australian enterprise. Here, it is examined that Australian firms are not finding
the right successor who can replace the person which is residing in most prominent position. The
given issue is occurring within firm due to the unavailability of skilled and talented employees.
In addition to this, the Australian firms are also lacking in many activities and resources which
can be used by them with an aim to develop the necessary skills among the individual. This is
because, it has assessed that with an aim to get prominent position within firm an individual will
require the combination of several types of skills and abilities (Kim, 2012). However, varied
skills will be learned by the individuals if respective firms will take significant action with regard
to the same. It is due to the presence of given aspect only, Australian firms has been going
through with the given issue in an effective way.
Additionally, rewarding the performance of employees is another HR challenge. This is
challenge because each employee has different opinions when it comes to the distribution of
reward. Here, some employees demand for monetary benefits however some will require non
5

monetary benefits (Hayton, 2012). Thus, the major problem which is confronted by the manager
of Australian firm is to assess the right or most effective way of rewarding the employees in an
effectual way.
Part B: Suggesting the HR strategies with an aim to overcome the assessed challenge
Among all the given challenges there are two basic HR issues identified which are casing
major impact upon the smooth going work of Australian firms. The assessed challenges are
attracting and retaining employees along with motivating workers for delivering high quality of
performance. Thus, with an aim to resolve the respective challenges number of strategies are
assessed which could be employed by the corporations operating in Australia. In this context, it
is examined that tight and stressful work schedule of Australian firms is being regarded as the
major factor which is creating hurdle in the process of attracting and retaining talented and
skilled employees (Hoque, 2013). This is because, during the tight work schedule it became
difficult for the respective employees with regard to maintaining the proper balance between
their social and work life. Due to this, they feel highly demotivated and dissatisfied also.
However, this problem can be resolved by using the flexible working type of timing tactic. This
strategy will provide opportunity to the Australian employees with respect to choose the time of
their working as per own convenience. For example, some employees prefer to work in night
shift but some people prefer to work during the day shift. Here, with the help of given tactic
proper balance can be establish by the employees between their family and social life. As a result
of it they will feel highly motivated and satisfied.
Furthermore, employees can be attracted towards the organization with the help of
positive work culture. This is the type of culture which gives importance to the needs and
demands of the employees. However, such type of culture can be developed by the Australian
firms by using the democratic type of leadership style. The given leader also gives importance to
employees demand. In addition to this, with an aim to make them feel like they are the part of
organization such leader involves workers in the decision making process (Machado and Davim,
2014). This leads to attract many employees within firm in an effective way. Further, with this
firm can attract employees by preparing an effective career path for them. Here, each employees
which works within firm expect some growth after working for the specified period of time.
Additionally, it is also assessed that while making the selection of suitable firms, employee give
first priority to the career opportunity related aspect. In this regard, they love to get associated
6

with the firm which has good career path with respect to the respective position. Thus, with the
help of all these measures significant action towards the HR problem of attracting and retaining
employees can be solved by Australian manager (Schuler and Jackson, 2008).
Besides this, several strategies are also suggested towards enhancing the motivation of
workers. The Australian workers are feeling demotivated as firms are not appreciating them for
the exceptional performance. This problem can be resolved by implementing performance
management tactic. It is the type of tool which forms the comparison between the actual and
standard performance of respective employees. Here, reward will be given by manager to those
employees who perform more than the set standard. For example, Australian bank has given
target to the employees that they have to sale 500 credit cards during the month. Suppose, if
employees has sold 600 cards during the month at that time respective employees will be
consider as eligible for the reward or incentives. Here, with the help of such means motivation of
workers can be enhanced (Tiwari and Saxena, 2012). Furthermore, they will also make measure
with regard to deliver the high quality of services to the organization in an effective way.
Furthermore, the motivation of Australian workers can be enhanced by conducting training and
development. With the help of such programs, significant improvement in the skill of workers
can be carried out. As a result of it they feel motivated in terms of delivering the best services to
the organization. Moreover, the motivation of workers can also be enhanced by giving timely
feedback regarding the performance which is being given by them. Such efforts of managers
make the employees feel like that the work which is being carried out by them is being seen by
their respective manager. Thus, in the need of taking positive feedback from the manager,
employees will put their extra efforts towards the work which is being given to them. Thus,
through this way positive benefit can be gained by the corporation in the form of increased
profits and sales (Kim, 2012).
CONCLUSION
It can be concluded from the given report that, there are many Human resource related
challenges and issues being faced by the manager of Australian firms. Thus, for them it is
essential that they must consider these given issues very seriously. It is due to the fact that, lack
of consideration about the same will lead to hamper the profitability related condition of
enterprise. In addition to this, the given thing will also reduce the firm probability of attaining its
strategic goals and objectives within specified time period. However, the assessed issues can be
7

resolved by the firms by working upon the suggested solution. Through this way, manager of
firm can enhance as well as maintain the motivation level of its respective employees.
Furthermore, it is through this way only high quality of performance can be carried out by the
manager from the respective employees.
8

REFERENCES
Books and Journals
Bratton, J., 2007. Strategic human resource management. Human Resource Management içinde,
Der: John Bratton,-Gold, Jeffrey, London: Palgrave Macmillan, London. pp.37-71.
Chang, S. H. and et.al., 2013. Decision support model for employee selection: A strategic human
resource management (HRM) perspective. African Journal of Business Management.
7(7). pp. 559-571.
Davidson, G. C. M., McPhail, R. and Barry, S., 2011. Hospitality HRM: past, present and the
future. International Journal of Contemporary Hospitality Management. 23(4). pp.498 –
516.
Francis, H. and D'Annunzio‐Green, N., 2005. HRM and the pursuit of a service culture:
Managerial encounters with competing discourses. Employee Relations. 27(1). pp.71 –
85.
Hayton, J., 2012. Global Human Resource Management Casebook Global HRM. Taylor &
Francis.
Hoque, K., 2013. Human Resource Management in the Hotel Industry: Strategy, Innovation and
Performance Routledge Research in Employment Relations. Routledge.
Kim, S., 2012. The impact of human resource management on state government IT employee
turnover intentions. Public Personnel Management, 41(2), pp.257-279.
Machado, C. and Davim, P. J., 2014. Work Organization and Human Resource Management
Management and Industrial Engineering. Springer. Cengage Learning
Nigam, K. A. and et.al., 2011. The impact of strategic human resource management on the
performance of firms in India: A study of service sector firms. Journal of Indian Business
Research. 3(3). pp.148 – 167
Rogers, E. W. and Wright, P. M., 2008. Measuring organizational performance in strategic
human resource management: Problems, prospects and performance information markets.
Human resource management review. 8(3). pp.311-331.
Schuler, R. S. and Jackson, S. E., 2008. Strategic human resource management. John Wiley &
Sons.
Su, Z. X. and Wright, P. M., 2012. The effective human resource management system in
transitional China: a hybrid of commitment and control practices. The International
Journal of Human Resource Management. 23(10). pp.2065-2086.
9

Theriou, N. G. and Chatzoglou, D. P., 2009 Exploring the best HRM practices‐performance
relationship: an empirical approach. Journal of Workplace Learning. 21(8). pp.614 – 646.
Tiwari, P. and Saxena, K., 2012. Human resource management practices: A comprehensive
review. Pakistan Business Review. 9(2). pp.669-705.
Online
Corporate Australia 'needs culture change'. 2016. [Online]. Available through:
<http://www.abc.net.au/news/2010-09-24/corporate-australia-needs-culture-change/
2273392>. [Accessed on 19th January 2016].
HR issues challenge Bowen Basin growth. 2016. [Online]. Available through:
<http://www.australianmining.com.au/news/hr-issues-challenge-bowen-basin-growth>.
[Accessed on 19th January 2016].
HR's burning issues. 2016. [Online]. Available through: <http://www.hcamag.com/hr-
resources/hr-strategy/hrs-burning-issues-113449.aspx>. [Accessed on 19th January 2016].
10