Strategic HRM: Aligning Business Strategy with Employee Relations

This report provides a comprehensive analysis of Strategic Human Resource Management (SHRM), focusing on the relationship between business strategy and human resource strategy, including vertical alignment and horizontal integration. It compares and contrasts theoretical bases and models of SHRM, examining the strategic perspectives of Best Fit, Best Practice, and Resource-Based View. The report also delves into HR practices such as performance management, employee relations, and communication, highlighting their impact on organizational success. Case studies of Tesco (private sector) and NHS (public sector) are used to illustrate these concepts. Recommendations are provided to improve performance management, customer satisfaction, and communication of organizational goals. The report emphasizes the importance of understanding and managing employee relations to enhance organizational performance and achieve strategic objectives.

STRATEGIC
MANAGEMENT
HUMAN
RESOURCES

EXECUTIVE SUMMARY
The importance of employees in an organisation should included in the business strategy
and human resource strateg. Their performance should be measured and make strategies to
perform. They should understand the relation of employees and should help them in
understanding organisational goal.

Table of Contents
EXECUTIVE SUMMARY.................................................................................................................................2
INTRODUCTION...........................................................................................................................................4
TASK 1..........................................................................................................................................................4
2.Compare and contrast the theoretical basis and models of SHRM.......................................................5
Models of SHRM......................................................................................................................................5
3.Analyse the strategic perspective of Best fit, Best practice and resource based view..........................7
4.The HR practices of performance management...................................................................................8
5.Recommendations................................................................................................................................8
TASK 2..........................................................................................................................................................9
6. Employees Relation and its perspective...............................................................................................9
7. Role of actors within the employment relations with analysis of changing nature...........................10
8.Recommendations..............................................................................................................................12
CONCLUSION.............................................................................................................................................13
REFERENCES..............................................................................................................................................14

INTRODUCTION
Strategic Management Human resource is the management of human resource by making
strategies to make them work effectively (Armstrong, 2016). HRM is the process of selecting the
best employees for the organisation and strategically use them to achieve organisational goals.
Management of human resource in an organisation involves making strategies to make them
satisfied and helps in increasing profits. The chosen organisation for this report will be Tesco for
private sector and NHS for public sector. Tesco was founded in 1919. It is a UK based
organisation. They have supermarkets which are the largest in UK and have stores worldwide.
NHS(National Health Services) was founded in 1948 by the health department of UK and it is
funded by government. The report includes relationship between human resource strategy and
business strategy and their vertical and horizontal integration in an organisation. The models of
SHRM and theories for public and private sector.
TASK 1
1.The relationship between business strategy and human resource strategy with vertical
alignment and horizontal integration.
Human resource management is the process of employing people to achieve the
organisational goal and business strategy. They bring people to achieve business strategy. The
functions of HR should be contributing to the success of business strategies (DeCenzo, Robbins,
and Verhulst, 2016).
The relationship between business strategy and human resource strategy
 Integrating HR strategy with Business Strategy- The successful businesses understood
that there is a little difference between HR strategy and business strategy as they both
work in improving the productivity of the employees so that they can increase profits.
Tesco employee 150-180 people to meet its business strategy of expansion.
 Competitive advantage- The organisations make strategies to achieve the competitive
advantage over its competitors and increase profits which is the function of HR strategy
also as they make the human resource competent so that they can be better than others in
market. The HR strategies help businesses in achieving their management strategy. The

organisation can win when they have good human resource. Tesco satisfies its employees
by giving them incentives so that they perform better and achieve organisational goal.
 Hierarchy- The strategy of human resource is to maintain hierarchy in an organisation so
that employees can take decisions based on their position. The business strategy focuses
on maintaining relationship in an organisation so that employees can perform
effentiently. The HR department forms the hierarchy in an organisation (Han and et.al.,
2019).
The HR strategies and business strategies in vertical alignment and horizontal
integration
Vertical alignment- It is the alignment of HR strategies and business strategies which
helps in achieving organisational goal by managing human resource at different positions in
an organisation. It helps in maintain relationship between hierarchies of organisations. Tesco
has managers at different positions which are employed by HR and made strategies to
achieve organisational goal. They have campus placements for selecting best employees
(Brewster, Mayrhofer and Farndale, 2018).
Horizontal integration- It is maintaining relationship between different HR functions
and helps in increasing profits of an organisation. It is achieved by allocating the resources
efficiently. The strategies made by organisations to achieve success and the management of
resources are important for making business strategies. Tesco focuses on making strategies
for employees to help them achieve profits.
2.Compare and contrast the theoretical basis and models of SHRM
Models of SHRM
The HR executives at different positions should be making strategies for achieving individual
and organisational goals. The models of SHRM help in making strategies and evaluating the
performance of it.
 Organisational SHRM content model and functional SHRM content model- The
Organisational SHRM model helps in understanding the internal and external factors that
impacts the business strategy and HR strategy. The functional SHRM model focuses on

external and internal fits of an organisation. The external fit helps in making strategies for
the development of the organisation and internal fir helps in making strategies for
maintain relationship of employees in an organisation.
In the context of private sector, Tesco uses these models as the organisation is affected by
both internal and external factors and they analyse the market ad make strategies for the
development of the business. It is important to identify internal fits to maintain
relationship of employees in an organisation (Brewster, 2017).
In the context of public sector, NHS focuses on Functional SHRM model as they are
funded by government and they are non-profit organisations so they are not impacted by
external and internal factors.
 Organisational SHRM process model and Functional SHRM process model-
Organisational SHRM model focuses on improving the organisational effectiveness by
making business strategies for achieving HR functions. The functional SHRM model
focuses on improving the performance of individual by identifying their skills.
In the context of private sector, Tesco uses these models to increase profits which are the
organisational goal.
In the context of Public sector, NHS focuses on functional SHRM because the employees
are important for the organisation (Alqahtani and Gupta, 2017).
Theories of SHRM
Theories Private Sector Public Sector
Behaviour Theory- This
theory focuses on the impact
of internal and external factors
on the business. The
employees should be skilled to
make decisions.
Tesco provides its employees
with good skills and
environment so that they
perform. They are not
impacted by external and
internal factors.
NHS (National Health
Services) gives free health
facilities to the people and they
focus on helping the
employees so that they can
achieve the organisational
goal.
Contingency Theory- This Tesco have good leaders and NHS is a public sector

theory focuses in the
behaviour of a leader. The
leader should have the power
to influence the behaviour of
others in an organisation
(Micu and et.al., 2017).
the company is successful
because of the leaders.
organisation and successful in
UK because the company is
operated by good leaders.
Need based Theory- This
theory focuses on the needs of
employees in an organisation.
It is important that
organisations satisfy the needs
of employees so that they are
motivated.
Tesco is a employee-centric
organisation which motivates
its employees by giving them
incentives. They attract the
employees by giving them
compensation and bonuses.
NHS provides facilities to its
employees and motivates them
to perform.
3.Analyse the strategic perspective of Best fit, Best practice and resource based view
The human resource management in an organisation is based on identifying and selecting
the best employees for the job. They have a strategic function of analysing the needs of the
organisation (Mondy and Martocchio, 2016).
The strategy of Best fit- This focuses on the strategy that different types of HRM
practices are important for different organisations. The HRM practices help them in achieving
the competitive advantage. The organisations need to identify the practice which is the best fit
and it is not important that it is for others in the industry. Tesco has used Cost leadership as its
best fit as they want to increase their profits by attracting customers.
The best practice model- This focuses on the strategy of HR as the best practice will
make the employees satisfied, increases their motivation and they will perform effectively and
efficiently. This is for improving the productivity of employees and it is employee-centric. Tesco
uses this strategy to increase the motivation of employees by giving them incentives. They
provide them environment to have a good relationship with employees in an organisation.

The resource based view- This focuses on understanding the internal factors of the
organisation and making strategies to understand the external factors. Tesco uses innovation as
its strategy where it helps in employees to innovate so that the organisation can understand the
needs of customers.
4.The HR practices of performance management
The organisation has to manage the performance of the employees to measure their
productivity. The HR should make strategies to effectively manage performance in an
organisation (Saif, 2015). The measurement of performance is a role of Human resource
department and management should make strategies with them to make the employees perform
effectively.
 Organisational goal and performance management- The HR should clear the
organisational goal when they are selecting the employees. They should help them in
achieving the goals and measure their performance. They should be informed about it so
that the employees should be effective. Tesco helps its employees as their incentives are
based on their performance so they work to achieve it. They have conveyed the goal of
the organisation to employees at different levels and they know the bases of their
performance management.
 Recognition- The employees are recognised when they perform and help in increasing
profits. This will motivate them as they will feel that they are the best and they should
perform so that employer believe in them. Tesco have recognised its employees potential
and made strategies to motivate their employees. They use promotion as a stretegy to
recognise the performance of employees. It is a employee-centric organisation and care
about the employees.
 Conduct discussions- The employees can inform the management of the problems faced
by them. They will have informal discussions where they can share things which are not
making them perform. The manager should understand the employees and provide them
the environment to increase profits of the organisation (Stewart and Brown, 2019).

5.Recommendations
 They communicate to its employees when they are not performing. Tesco should
understand that employees should be motivated so they should identify performance
management of employees by helping them in improving productivity. The Maslow’s
need hierarchy theory helps organisations to understand the employees and satisfy need
which is important for them and help them in achieving profits.
 The organisation should maintain its productivity and satisfy its customers. Tesco should
manage quality and provide services to the customers as they should feel that they are
important for the organisation. They should give them attracted benefits and understand
their needs. The organisation should maintain relationship with its customers and provide
them good products.
 The organisation should communicate its organisational goal to the employees. They
should analye the employees and make them flexible to their needs. Tesco should make
strategies to help employees in understanding the goals of the organisation. They should
convey the strategies of an organisation so that employees perform to achieve it.
TASK 2
6. Employees Relation and its perspective
Employee relation and communications is an important factor in influencing the
behaviour of employees in an organisation. Employee’s relations are an understanding of a
relationship between employees and employers. The employee’s relation will help in increasing
the profits of the organisation. The success of the organisation is determined by it satisfaction of
the employees (Armstrong and Taylor, 2020).
The nature of Employees relations
 Effective communication- The employees in an organisation has a power to take
decisions but they cannot take all as it can impact the organisation. The employee’s
relation with other employees helps them in understanding the impact and can make
strategies for achieving the organisational goal. The relations help employees

understanding the pros and cons of the strategies. They will communicate it to employees
and they will give their opinion which will make them achieve productivity.
 Increases the performance of employees- The relationship with employees help
organisations in increasing performance. They will feel that they are important to the
organisation and their needs are fulfilled which motivates them improve the productivity.
The employees feel confidence and can trust the organisation (Bang, Joshi and Singh,
2016). They should understand that employees are motivated when the employer
understands the needs and helps them in achieving profits.
 Helps in growth- The employees are the important assets of the organisation as they can
win over competitors when they have competent employees. The employee’s relation is
important to achieve the growth as the employees will perform when they are having
good relations with employees (Hadjikhani, Lee and Park, 2016).
Perspective of employee’s relations
 Employee’s productivity- The productivity of employees is increased when they have
good relations with employees in an organisation. The employees and employers are
working together in an organisation and should relations so that they can benefit and
perform to increase performance. They should cooperate and manage so that the goal of
an organisation is achieved. The HR strategies should help the employees in achieving
performance and maintaining the relationship of employees in an organisation. The
management of strategic human resource helps organisations to achieve success.
 Expanding the business- The employees in an organisation helps the organisations to
expand the business as they help them in achieving the strategies of the organisation. The
relations of employees help them in making strategies and help to achieve it. The
employees should be communicated the need of customers and they should make
products for them as the customers are important for the organisation. The organisation
should understand the customers and employees and helps them in maintaining the
relations with them as it will help them in promotions of their goods. The success of the
organisation helps them in marinating relations with employees (Brewster, Mayrhofer
and Morley, 2016).

7. Role of actors within the employment relations with analysis of changing nature.
There are different actors which affects the relationship of employees in an organisation.
There are set of rules which governs the behaviour of employees and they work together to
maintain relations in an organisation. They have different roles which affect the relation of
employees. The importance of employees relations benefits the employers and employees in
their strategic management of human resource.
 Employer- The employer in an organisation understand the need of the business and
make strategies to hire employees. They hire employees, assign them work which they
are responsible for and give them compensation. They make strategies to maintain
relations with employees by motivating them. They decide activities and help the
employees in understanding the conflicts of interest and provide them solution. The
employers take the risk in hiring the employees. They train them which involves cost and
make selection plan for the employees. They have the right to hire and fire them when
they are not making it to the changing needs of the business. Tesco's Human Resource
Department helps the employees and maintains good relations with them as they
understands the importance of employees and they contribute to the success to the
organisation (Liu and Chou, 2016).
 Management- Management in an organisation makes plan for the success and increasing
the profits which will help them in making strategies. The management informs the
problems of employees to human resource department and helps them in training and
development of employees. Management can affect the interest of employees by
exercising their rights. They give power to employees to make decision and provide a
good environment to them which helps in maintaing relations with employees. They
introduce technological changes and helps them in adapting to it. The employees relation
with the management helps them in making the employees flexible and making strategies
for the organisation.
 Government- The employees in an organisation face problems with them as they do not
get payment or working conditions are not good for them. They want to want in an
organisation which understands their needs as they have individual goals which is why
they are working with them. The employer should make rules which are provided by

government and gives rights to employees. The central and state government make rules
for govern the bheviour of employers in an organisation. They influence the employees
relations in an organisation with agreements and laws pertaining to benefit the employees
(Peterson and Crittenden, 2020).
8.Recommendations
The relationship within the employees helps them in increasing productivity and success
of the organization. They with search for another job if they are not satisfied. The organizations
should have a mechanism for employee participation to contribute to the profits of Tesco.
 The employer should promote communication in an organization. The success of the
organization depends on the communication of the employer to its employees as it
helping in maintaining good relations with the employees. The effective communication
in an organisation avoids the confusion of employees and stress. It will helps in managing
conflicts between employer and employees.
Tesco should include participation of employees in managing the work will help them in
maintaining relations. They should ask question and clarify with employers in an organisation.
The projects and policies should be communicated to the employees so that they should
understand the expectations of employers. The organisations should be transparent with the
employees and feel that the organisation cares for them.
 The employees should feel they are important to the organisation. The employees should
feel recognized in an organisation as it motivates them to perform. The appreciation of
their job motivates them and when they are criticized they will take it when the
organisations have good relations with its employees.
Tesco should motivate its employees by providing them appreciation for their job and they
should recognize them so that they feel that they are important and employers care for them.
They should inform the employees when they can take power to make the decisions as it
motivates them and they will understand the expectations of the employer.
 Analyze the performance of individuals and help them in building relations with their
team members. The employees should give the work according to their interest and helps