Business Management Report: HRM Strategies and Competitive Advantage

This report delves into the evolution of Human Resource Management (HRM), tracing its progression to Strategic Human Resource Management (SHRM), where HR managers transition into strategic partners. It examines the essential components of HRM, including strategy, structures, and systems...Read More

Running Head: Business management 1
Business Management

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Abstract:
This paper reviews the history of HRM and also the movement which develops strategic
human resources management (SHRM), as in these movement HR managers are converted into
strategic partners. This paper also discusses other components of HR management such as
strategy, structures, and system which the company needs to implement. Necessary skills must
be developed by SHRM leaders for the purpose of playing successful strategic role in the
organization. Paper also discusses the factors which affect the HR management and major
objectives of HR planning. Lastly, paper is concluding with brief conclusion.

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Contents
Introduction:...............................................................................................................................................4
Evolution in HRM & difference between HRM and SHRM:..........................................................................5
Trends affecting human resource:...............................................................................................................6
Competitive advantage by HRM:.................................................................................................................7
Major objectives of HR planning:................................................................................................................8
Key areas used by HR manager:................................................................................................................10
Challenges faced by SHRM:.......................................................................................................................11
Conclusion:................................................................................................................................................12

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Introduction:
Human resource management is defined as set of activities used by the organization for
the purpose of managing the manpower of the organization, workforce, and human resources. It
is usually considered as the function which helps in maximizing the performance of the
employees for the purpose of achieving objectives stated by the organization. It is mainly
concerned with the management of the people and focused on the policies and system of the
organization.
There are number of functions and concepts which are introduced by the Human
Resource Management such as human capital, labor, and human resources. Various changes
occurred in these terms from time to time, and this also result in changes in the way human
resource managers’ plan their strategies while managing the employees.
The evolution in Human Resource Management was occurred from the time when people
were engaged in slavery to the present work environment when peoples are actually valued and
respected at workplace and considered as important part of the business.
Between the period of 2001 and 2004, organizations seriously realize the importance of
human resource management. This initiative of the organization result in movement which is
known as Strategic Human Resource Management (SHRM), and this movement aim two things
that are maintain the cost, and second to deliver the maximum benefit to the organization by
realigning the leaders of HR as strategic partners with the leaders of the business. In case HR
leaders are considered as strategic partner by the organization then it is necessary that such
leaders possess various skills and capabilities (The balance, n.d.). This paper discuss the various
best practices for the purpose of implementing a strategic-business-partner model for HR, with a
skill which must be developed by the SHRM leaders for the purpose of playing the strategic roles

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successfully. This paper discusses various components of HRM, and lastly concluded with brief
conclusion.
Evolution in HRM & difference between HRM and SHRM:
In the early stages, employees working in the factories were considered as slave and
treated in very harsh manner, and they are working with no wages or very minimum wages with
poor working conditions. Government interfere on basic protection for labors and employees by
frame various statutory regulations. All these statutory regulations lead in evolution in human
resource management where owners of the factors and other relevant persons agreed on the fact
and considered the issues related to employee welfare and wages.
Before the time of industrial revolution, the entire population was relied on the
agricultural economy with minimum production level. While comparing the production level to
post revolution it was clear that production level was less, because manpower was less and there
was inadequate communication among them. During industrial revolution, various changes
occurred in economy and people get aware on modernization. It determines various new ways of
industrial setup such as more focus on the wages and employee welfare. During the period of
industrial revolution, various new concepts were adopted by the company such as merger and
acquisition for the purpose of maximizing the workforce and uses automated web-based HR
systems.
As soon as industry grown various important changes result in industrial revolution such
as development of union labor, etc. For the purpose of managing the labors and their issues at
workplace, various organizations form separate department known as Personnel Management
department. During the period of 1980, new theories were introduced in the application of human

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resource management, and these new theories related to change management, motivation and
team building. At similar time, there were number of companies which opt for merger and
acquisitions. This result in optimization of the workforce and increased use of computers result
in the rise of automated procedures and Web-based HR systems.
All these issues increased the need and responsibility of human resource management,
and the major responsibility of this department was to resolve politics and diplomacy. Therefore,
after all these issues actual evolution in the human resource management takes place.
It must be noted, at the end of the 20th Century, both strategic and tactical elements were
present in the human-resources practices. However, tactical side was more widely practiced in
the human resource management. Before the Second World War, human resource only handles
the functions of hiring and firing, compensation, payroll, and benefits (groysberg & McClean,
2006).
On the basis of above discussion, it is clear that strategic HR and administrative HR are
two different elements of human resource management. It must be noted that both the functions
cannot work separately. Administrative function of HR is an ongoing process and it includes
benefit administration, revising and publishing workplace policies, and investigating workplace
issues. On the other hand, strategic element of HR includes the long term HR strategy which is
framed for complementing the organizational strategy (Walsh & Sturman, 2010).
Trends affecting human resource:
Numbers of challenges are created for human resource managers because of the
demographic changes occurred in society and compositions of the workforce. Technological
advancement in health care aware the people to live healthy and longer life by remaining in the

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workplace for longer time period. This awareness of workforce result in number of challenges
for human resource department, and these challenges are both real and perceived in nature. It is
considered that older workers are more resistant to change as compared to young workers,
especially in implementing new programs and using new technology. It must be noted that older
workers have increased health-care cost as compared to young workers. Because of the longer
stay of older workers in the organization, very few opportunities are left for young workers.
There are number of cases in which older employees get higher salaries in comparison of
younger workers, despite of fact that they have less training and knowledge in terms of
technology. However, it must be noted that older employees are more loyal towards their
employer as compared to younger employees. All these changes occurred in the society
parameters and workforce trends affect the HR operations directly. It increase the responsibility
of HR manager to ensure the balance between the older and younger employees, and also ensure
that older employees adopt the changes occurred in the working trends (Swearing, n.d.; SHRM,
2004).
Competitive advantage by HRM:
Organization can gain competitive advantage by relying on their HR department for the
purpose of recruiting best employees, ensure training programs which are effective in nature, and
implement successful retention programs. When competitors dealing with the issue of maintain
the motivated workforce, at that time organization can focus on productivity and increased sales
if their HR managers play integral role. Following are the factors which help in gaining
competitive advantage for the organization:
 Give HR leadership positions- Usually; job descriptions are given to HR department with
the instructions to fill the positions. For the purpose of getting the competitive advantage,

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it is necessary that organization must involve the human resource manager completely in
the hiring process. Allow HR to play more active role in determining the appropriate
recruitment pay and tactics, cost of recruiting the talent, and how to amend the policies in
recruiting best (Christ university, n.d.).
 Professionals in HR department- professionals in human resource department vary in
kinds of skill and job they bring in their profession. Among these professionals, many
have ability to handle processing payroll and executing benefits programs, but they does
not have leadership status in the organization. Organization can get competitive
advantage by including the recruitment specialist in the HR department who actually
understand his strategic role in the organization and play important role in shaping the
success of the organization. However, organization can also include professionals of
executive level which help the organization in designing job descriptions and training
programs. It also helps the organization in finding best candidates and also participates in
salary levels.
 HR frame training programs- organization must ensure that HR department participates
in determining and implementing goals of the company, by relying on your human
resource team for the purpose of considering the profitability of the company with each
decision taken by HR department (Ray, n.d.).
Major objectives of HR planning:
HRM is useful not only for the organization but also for the employees working in the
organization. HR planning is the important element of HR management and it is the only element
which directs the complete process of HR department. Following are the Major objectives of HR
planning and these points also state the importance of objectives in organization:

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 Organizational objectives: HRM is the way through which organization achieve
efficiency and effectiveness, and it also serves other functional areas which help them in
attaining efficiency in their operations and also help in achieving the goals of
organization in efficient manner. Therefore, the most important objective of HR planning
is to ensure to acquire right man for the right job, and at right time. It also ensures that
employees are getting right type of training to the employees, and utilizing the workforce
of the organization in efficient manner and maintain the workforce also. Therefore,
accompanied the HR panning with organizational goals is considered as an important
issue which must be determined by HR manager.
 Functional objectives- HRM performs number of functions for other departments, and it
is also the duty of HR manager to ensure while making the plans that facilities does not
cost more than the benefits retrieved by the department (Ogedegbe, 2014).
 Personal objectives. Other major objective of HR planning is personal objectives, as
stated in today’s world there is short of requisite talent which increase the responsibility
of manager to acquire, develop, utilize, and maintain employees. Competitive firms
encourage the employees to change the jobs, which increase the responsibility of HR
manager. However, HR manger can only retain the talent when it helps the employees of
the organization to achieve their personal goals. Creating work-life balance for the
employee is a personal objective which must be included by HR manager in their
planning.
 Societal objectives- last major objective of HR planning is to achieve social objectives. It
is the duty of HR manager to ensure that legal, ethical, and social environmental issues
are considered by the HR department while making plans. This can be understood

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through example which states that equal opportunity and equal pay to the employees are
the legal considerations which must not be violated by the organization (Chand, n.d.;
Shodhganga, n.d.).
Key areas used by HR manager:
Following are the key areas and tools which can be used by the HR manager to ensure
effective and efficient performance of the organization:
 Collaboration- HR manager and employees must be collaborating at the time off
performance review process. As per the 90% human resource managers, feedback of
employee from their mangers and other peoples in the organization creates clearer picture
of employee’s performance.
 Improve organization- reviews related to performance can become messy when
employers do not have proper system of HR processes in the organization. Proper HR
process helps the managers of the organization in ensuring attainment of organizational
goals.
 HR planning- it is the most important area and tool of HR management process. It is the
duty of manger to plan their work, and it also ensures efficient working in the
organization. Planning stands for setting the expectations and goals of organization for
the individuals and teams for the purpose of direct their efforts to achieve these
objectives. HR managers can involve the employees in the planning process, and this will
help them in understanding the goals of the organization, as what needs to be done, why
it needs to be done, and how well it should be done (Huhman, 2017).
 Monitoring- another important area which must be considered by HR manager is
monitoring the process conducted in the organization and also the performance of the

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employees on continuous basis. Monitoring also includes the measurement of
employee’s performance and providing feedback to the employees and work groups on
their progress towards reaching their goals. Regulatory environment related to monitoring
performance includes conducting progress reviews with the employees for the purpose of
comparing their performances against the standards of the organization (Hollon, 2011).
It must be noted that ongoing monitoring provides the opportunity to the supervisor to
check how employees upheld their performance against the standards set by organization,
and what changes need to made to the standards which create problems. Continuous
monitoring also helps the supervisor in identifying the unacceptable performance at any
time during the period of appraisal. However, continues monitoring help the supervisor in
assisting the performance of employees instead of wait until the end of the period when
summary rating levels are assigned (OPM.GOV, 2017).
Challenges faced by SHRM:
Reasons of outsourcing in the organization are divided into various categories, and these
categories are organizationally driven reasons, improvement-driven reasons, financially driven
reasons, revenue-driven reasons, cost-driven reasons and employee-driven reasons. Some
challenges of outsourcing in context of SHRM are stated below (Weiss, 2013):
 Lack of prior experience in outsourcing makes the things more difficult for the
organization, and sometime adversely affects the organization performance.
 Employees resist the outsourcing because it reduces the opportunities available to the
employees.
 Chances are present that services provided to the customer through employees get
affected.

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 Chances are present that outsourcing negatively impact the culture of the company.
 Organization usually loses its control after outsourcing.
 Jobs of HR and staff are in danger, as it reduces the need of HR department in the
organization.
 Outsourcing always resilient by the HR department (Awele & Edwin, 2015).
Conclusion:
This paper reviews the key issues related to the SHRM and also considers the strategic
role played by HR manager in the organization. It also identifies the areas of opportunity and
leverage. This research clearly states that scope of SHRM is wide and many aspects of HR must
be considered by the organization while taking any decision. After considering the above facts it
can be said that various changes occurred in the methods and practice of HR function. It can be
said that before the evolution of HR, manager of HR is only evolve in the activities like hiring
and firing, compensation, payroll, and benefits. Now, role of HR manager is changed and
manager is more involved in the strategies of the organization. Therefore, it is clear that HRM is
the most important factor of the organization processes.
References:
Awele, A. & Edwin, A. (2015). Strategic Management of the Benefits and Challenges of HR
Outsourcing in Effective Organizational Management. Journal of business studies
quarterly, Volume 7(2).

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Chand, S. 4 Important Objectives of Human Resource Management. Retrieved on 13th November
2017 from: http://www.yourarticlelibrary.com/management/4-important-objectives-of-
human-resource-management/5411.
Christ University. Role of HR in gaining competitive advantage. Retrieved on 13th November
2017 from: https://humanresourcetalks.wordpress.com/2012/08/15/role-of-hr-in-gaining-
competitive-advantage/.
Groysberg, B. & McClean, A. (2006). Delivering Strategic Human Resource Management.
Harvard Business Review, 30. Product # 405049-PDF-ENG.
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