Human Resource Management Report: Business Strategy and HRM

This report delves into the realm of Human Resource Management (HRM), focusing on the strategic alignment of HRM with business objectives, using ALDI as a case study. It explores the relationship between business strategy and HRM, highlighting the importance of employee recruitment, development, and retention in achieving organizational goals. The report examines horizontal and vertical integration, models of Strategic HRM (SHRM), and the significance of performance and reward management systems. It also discusses the nature and theoretical perspectives of employment relations, including the factors that influence these relations and the role of employee voice and participation in improving them. The report emphasizes the design and redesign of performance management systems, emphasizing the importance of simplicity, purpose, and goal-setting in these systems. The analysis covers financial and non-financial reward packages, and stresses the need for a balanced approach to employee compensation and recognition to enhance performance and retention.

Human Resource
Management

Table of Contents
TASK 1............................................................................................................................................1
INTRODUCTION...........................................................................................................................1
Business Strategy........................................................................................................................1
Human resource management and relationship between business strategy and human
relationship strategy....................................................................................................................1
Horizontal and vertical integration..............................................................................................3
Model and theoretical basis of SHRM........................................................................................4
Performance and reward management........................................................................................4
Redesign a performance management system............................................................................5
TASK 2............................................................................................................................................6
Nature and theoretical perspective of employment relations......................................................6
Factors of employment relations and their roles in employment relations.................................7
Nature of employment relations..................................................................................................8
Employee voice and participation can contribute to improvement of employment relations.....9
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

TASK 1
INTRODUCTION
Strategic human resource management is related with human resources discipline that
consists hiring, retaining and different payroll activities with training of employees. It is consider
as a branch of HRM that make strategic planning for recruit and retain skilled workers (Akong'o
Dimba, 2010). Mainly this support in manage activities of workers working in an enterprise for
achieve long term objectives. ALDI, a firm that deal in various type of products such as
beverages, food, households goods and many more, based in UK is consider in this report for
study. Relationship between human relationship strategy and business strategy is all given in this
report. Further reward and performance management of employees is all mentioned under this.
Business Strategy
Business strategy is define as a firm's plan to achieve business goals and objectives.
Strategies formulated and implemented by enterprise is succeed when it results in business
growth, provide a competitive position to enterprise and leads to strong financial performance.
When strategy fails to achieve set sales objective then it either do some modifications in that or
formulate an another effective strategy. Business strategy also known as working plan adopted
by enterprise to achieve its vision, mission and to utilise all resources at an optimum level.
Human resource management and relationship between business strategy and human relationship
strategy
ALDI is an organisation that operate on a global level and various department are there
that work in company and perform various functions so company can achieve its set target.
Finance, marketing, HR and production are the major departments of enterprise. Department of
human resource management play an effective role various functions perform by this department
largely affect success and failure of enterprise. HR manager is the one that carry out process of
recruitment and selection in order to fill the vacancies at workplace. Further training and
development, performance appraisal, reward management is all done by manager of human
resource department (Gurbuz and Mert, 2011). Strategic human resource management is related
with hire, develop and retain skilled employees so enterprise can achieve its set goals and can get
a competitive position in market. This reduce employee turnover and provide long term benefits
to organisation. Mainly SHRM (Strategic human resource management) is related with business
1

performance, business strategy and management of employees so enterprise can get its desired
outcome. It is very essential for top managers of ALDI to formulate and implement an effective
strategy so firm can sustain in market for long run can achieve its set business objectives. One of
the main benefit of formulate strategy is that it provide direction to managers and employees
which help them in perform their job roles in an effective manner. HR strategy is related with
plan which help in integrate culture and bring cooperation among employee's actions so firm can
provide quality services to its customers (Chaneta, 2010) . Effective structure and organisational
culture is required to for formulate and implement human resource strategy. Workers play a big
role in success and growth of enterprise so monitor and measure their performance is very
essential and human resource strategy provide an opportunity to manager to do the same. HR is
known as one of the most significant part of every organisation and this aspect is related with
strategy adopt by business. Relationship between business strategy and human relationship
strategy is given below under the following points: HR strategy and business productivity: Function of recruitment and selection is very
essential for develop a skilled workforce. Formulate a strategy related with human
resource for select a bet applicant affect the workforce of enterprise. It is very important
for top management of ALDI to to create and provide a environment in which workers
can enjoy high job satisfaction and job security as with this company can attain its set
business objective. As human capital and human resources are known as a valuable
resources of a business organisation so maximum efforts should be done by manager to
develop and retain a skilled workforce for long time period. HR strategy is business strategy: HR strategy is also known as business strategy, for
attain success and growth it is very essential that there should be a good connection
between human resource strategy and business strategy (Kaufman, 2012). Develop and
retain human capital is very essential for ALDI for sustain in market for long run and to
attain set goal. Today human resource strategy consists executive leadership teams that
confer with experts in field of human resource in order to develop business goals and
objectives for human resource. Interaction among executive leadership: Quality of interactions that take place between
executive of human resource department with other executives of company indicate the
2

relationship between overall business strategy and human resources. Many times, leaders
of human resources complain that enterprises do not value human capital. Considerations: Different factors are there which affect the relationship between business
strategy and human resources. Managers first require to analyse the benefits of align
business goals with HR goals (Kim and Wright, 2011). It is very essential for manager to
adopt forward thinking concepts as with this skepticism can be avoid.
 Develop business solutions and strategies: It is very important that there should be a
cooperation between top managers and manager of human resource department. With this
a positive working environment can be offer which results in employee's job satisfaction
and help in retain them for a long time period. When top management provide its support
to human resource manager then it help in develop and retain a skilled workforce for long
time and support entity in attain its set goals.
It is very important that effective communication channels should be use at workplace as
this help in bring cooperation among manager of various department working in organisation and
with this an effective relationship can be maintain between human relationship strategy and
business strategy.
Horizontal and vertical integration
Expansion and growth are the two needs of every business enterprise whether it is small
or large in size and for this entities can go for integration. Horizontal and vertical are the two
major forms of integration.
Horizontal integration is a strategy of expansion in which firm acquire the business that
operate in same sector as this help in decrease competition. With this entity can capture a larger
market share and can generate more number of profits (Lengnick-Hall, Beck and Lengnick-Hall,
2011). As ALDI is retail firm so if organisation merge operations with another firm deal in retail
sector then this will be known as horizontal integration.
Vertical integration is the one in which organisation wants to operate in different sector.
One of the main feature of this is that it increase profits of company and also help in utilise
business resources at an optimum level.
Model and theoretical basis of SHRM
Mainly concept of strategic human resource management is related with integration of
HR with strategic objectives of organisation to improve business performance, create a positive
3

work environment, improve flexibility and provide job satisfaction to workers. Models of SHRM
are given below under the following points: Corporate strategy: This strategy is developed at top management. For this manager first
identify and examine the various internal and external factors exist in business
environment (Marler and Fisher, 2013). It is also known as overall strategy of business
which provide direction to manager so they can take better and informed decision. Business Strategy: This is another strategy which is formulated by managers after
develop corporate strategy. It help in utilise all resources at an optimum level and
improve efficiency of by business operations. This support firm in attain short and long
term business objectives.
 Information system: For formulate an effective strategy, it is very essential for manager
to utilise various sources in order to collect relevant information. With this manager can
develop skills of employees and ensure completion of all business operations in time.
Performance and reward management
In today's business environment every business enterprise indicate a high degree of
commitment towards reward practices that are related with HR practices and final goals of entity
for attract, develop, retain and encourage employees. One of the main benefit of efficient
rewards practices is that it help enterprise in attract skilled candidates that contribute more in
growth of enterprise. Reward act as a element that encourage employees to work well and
directly improve profits of organisation but this require to be implement in effective manner. An
effective reward system should be link with the performance development system, that should
focus on performance based pay and should provide various growth opportunities to workers
with a healthy work environment (Marler, 2012). Variable pay play an effective role in boost
boost up employee's morale and performance at workplace as compare to fixed pay packages. An
efficient reward management affect the performance of employees in positive manner and at the
same time help in retain them for a long time period. It is very essential for manager of ALDI to
review compensation and reward packages of employees on continuous basis as with this entity
can offer them job satisfaction and can get competitive benefit. Performance management of
employees is related with measure and monitor employees performance so they can perform
their job roles in an effective manner. Proper training and development should be offer to
employees so they can contribute more in success and growth of enterprise. Reward and
4

performance management of employees is an effective way to encourage them to perform well.
Financial and non financial both are the two main categories of reward package. These can be
better understood by the points given below: Financial reward package:
Compensation: It involve basic salary and incentive of short and long term which is offer
by firm to its employees is also include in this (Martín Alcázar and et. al., 2013). One of the
main benefit of this is that it help in attract skilled candidates towards the enterprise.
Incentives: This contain financial reward given to employees in addition to salary. It is
based on employee's performance and encourage them to perform well. Non Financial package:
Work life balance: It is very important for top management to create and encourage
healthy balance between professional and personal life of workers. Otherwise employees will
feel frustrated and this increase employee's turnover.
Performance recognition: Employees who perform well at workplace should given an
extra reward for their as this enhance their morale and also motivate other employees to work
well.
Overall compensation package of employees should be a combination of financial and
non financial reward.
Redesign a performance management system
Formulate or design performance management system is known as responsibility of
manager but this is not an easy task. This system is the one that largely affect the relations of
employer employee, promotional opportunities of employees at workplace and payroll. Various
factors are there that require to be consider by manager in performance management system: It should be simple: Different methods and tools that utilise by manager to collect
feedback from employees should be simple and effective (Mitchell, Obeidat and Bray,
2013). This make the process more effective and reduce complexity. Have a purpose: A manager should be aware about the major purpose of formulate
performance management system. For this manager can do a conversation with other
business executives. When purpose is clear then it help manager in better attain the final
objective.
5

 Set useful goals: End objective and final goal of performance management system
should be effective as this encourage employees to work well. Final goal of performance
management system should be align with final objective of entity.
 Upward feedback: Collection of feedback from employees should flow to upward as this
make the manager inform about the areas of improvement and help in identify training
needs of workers. All this help in improve employee's performance and increase
profitability of company.
TASK 2
Nature and theoretical perspective of employment relations
Concept of employment relations indicate the relation between employer and employees
working in enterprise. It is very important for employer to create and maintain good relation with
employees as this help in get their commitment and support to achieve set business objectives.
One of the main benefit of good employee relations is that it support in resolve conflicts and
disputes arise at workplace (Ridder and Baluch, 2017). When employer and employees share a
good relation then it enhance employee's morale and increase profitability of organisation. Its is
very important for employer to provide healthy working environment to employees, offer fair
wages, provide them training and many more as all this help in retain employees for long time
period. Perspectives of employee relations is given below under the following points: Unitarist perspective: This perspective of employee relations is based in the assumption
that the organisation and unitary perspective organisation can be integrated or
management and other members of enterprise all share a common purpose and they have
a common values, objectives, interests. This approach require loyalty of workers which is
very essential so for enterprise to sustain in long run. There are two major implications
related with this approach one is conflict as the expressions of employee differences and
dissatisfaction. Other one is trade unions that are regraded as unnecessary. Pluralist perspective: Under this approach of employee relations the enterprise is
perceive as made up of powerful groups with their own set of objectives and leaders
(Snow and Snell, 2011). Two major groups of this are management and trade union.
Manager remain responsible to control and measure all business activities so entity can
attain its set goal and provide better services to its clients. Proper communication
6

channels should be use at workplace as this bring coordination among various functions
perform by business department (Van Buren, Greenwood and Sheehan, 2011). Trade
unions are the one that act as legal representative of employees as they help in resolve
conflicts with help of collective bargaining. Dispute create negative working environment
and affect productivity of employees in negative way. This approach is employee
relations is related with industrial relations that impact bad on society and its people.
 Marxist perspective: It is important which is observes towards the better and effective
employee relation from the community. It is identify as an essential assumption is that an
effective and long-lasting relation develop between employers and employees. In relation
to this, it identify that 3 is main inequalities via rendering authority in employee
relationship. Dispute affect the final results in negative way and all efforts should be
done by manager to deal with the factors that arise conflicts rat workplace.
Overall it is very essential for employer to create and maintain good relations with staff
members in this way entity can decrease employee turnover and at the same time can attract
skilled candidates towards entity. It is very essential for manager of ALDI to formulate all
strategies by consider the advantages related with good employee relations.
Factors of employment relations and their roles in employment relations
In making the better and effective relationship with employees and administration of the,
there are some main parties are concerned: Employer- The main duty and responsibility of administration is to recruit as well as fire
the workforce. It is the role of administration to render safe and friendly working
situation. The administration can effect on the employees interest from not selecting the
innovative or advanced technology (Wright and McMahan, 2011). Beside this, manager
of Aldi render accurate training and development program to employees with aim to
reducing instructions. Aldi manager give accurate guidance and direction about new
machinery and latest technology to the workers so that they work happily which
benefited to the business entity in order to maximise their sales and turnover within
predetermined period of time. Employees- They are known as important and main part of the company success and
development. In order to develop long-lasting and strong relationship,employees should
provide their more involvement in the business operations and activities for attaining the
7

long term goals and targets. The workforce should select the effective surround in
company so that they can consider advanced and also originative thought to doing their
business activities and functions effectively and efficiently. The employees should
organize with together and also perform as per the policies, rules, regulation and plan
which is regulated by the upper level management.
 Government- Main duty and responsibility of government is to develop policies and
regulation for business entity (Wright and McMahan, 2011). For creating the workplace
favouritism free, it present any acts such as equal opportunities acts, discrimination,
health and safety working environment and many other legislation in an appropriate
manner.
Nature of employment relations
In company, manager faces many problems and issues. At present era environment
changes at a very rapid state. There are many staff members who are not comfortable in the
working environment. Manager at present time performs all activities through old and traditional
tools and techniques. Thus as a result they cannot perform in an effective and efficient manner.
In this time manager faces many issues such as communicate with all departmental managers
and with managing the all personnel. There are various situations and problems in which
manager cannot give proper and sufficient training to all employees. Thus they cannot perform
better. It results in bad performance of staff members. It also lowers the relationship of manager
and the employees. Thus as a result company has to create various steps and problems so that
they can easily improve the performance of the company. Factors are described below:
 Expectations of the manager
 Changing aspects of work
 Appraisal of performance of employees
 Changing environment of company
Employee voice and participation can contribute to improvement of employment relations
If workers participate in all plans and policies of the company then they can directly
enhance performance of the company. It includes a process in which employees can participate
in all decisions and they can also take various decisions. Employees can also give the
suggestions and feedback to manager of company (Wright and McMahan, 2011). Thus as a
result they can easily enhance their performance. They can also solve their disputes by
8

interacting with all staff members. If workers can raise voice in a positive manner then they can
im0act in a positive manner and can also solve problems. Through this it can increase their
productivity and innovation in the firm. Through raising of employee voice they can directly
improve the relations among all staff members and management.
CONCLUSION
From the above given project report, it can be concluded that concept of strategic human
resource management improve flexibility at workplace, improve employee's performance and at
the same time help in retain employee's for a long time period. It is very important for employer
to create and maintain good relations with employees as this help in get their support in success
of company support in get a competitive position in market. Proper performance management
system require to be formulate and implement by manager as with this their contribution can be
maximise in growth of entity and ALDI can provide quality features to its customers.
9