Strategic Management of HR: Employee Relations, Theories & Impact

This report explores the strategic management of human resources, focusing on employee relations and its impact on organizational growth. It examines theoretical perspectives like unitarism and pluralism, highlighting how improved employee relations enhance organizational productivity. The roles of employees, managers, and employers are analyzed in the context of evolving employee demands. Factors such as employee voice and participation are discussed as key elements in fostering better employee relations. The report also delves into the relationship between business strategy and human resource management, considering horizontal and vertical integration, and evaluates different SHRM models like the Universalist, Contingency, and Resource-Based View models. Furthermore, it addresses performance management and reward systems, recommending strategies for effective implementation. The report concludes that aligning business and HR strategies is crucial for organizational success, emphasizing the importance of adapting and redesigning HR models to meet organizational objectives and promote a positive working environment. The second task evaluates the theoretical perspective of employment relation and provides details regarding the various actors involved in employee relation. The role of the actors in relation to the changing nature of the employee relation will help in understanding the different ways by which employee relations can be improved.

Strategic Management of Human Resources

Executive summary
This report will discuss about the employee relations and the impact of good employee relation on the
growth of the industry. There theoretical perspectives such as unitarism and Pluralism help in the
development of employee relation. Improving employee relation helps in enhancing the productivity
of the organization. The roles of the different actors of employee relation such as the employee,
manager, the employers and the managers keeps changing as per the changing nature of the employee
demands and wants. There are certain factors such as employee voice and employee participation that
helps in enhancing the employee relation of an organization.

Table of Contents
Task 1....................................................................................................................................................4
Introduction...........................................................................................................................................4
Discussion.............................................................................................................................................4
Conclusion.............................................................................................................................................7
Task 2....................................................................................................................................................8
Introduction...........................................................................................................................................8
Conclusion...........................................................................................................................................11
Reference List......................................................................................................................................12

Task 1
Introduction
In the present scenario, the human resource management is the indispensable part of the
organizational structure as it helps in maintaining a cordial relationship between the management and
the employees (Boxall and Purcell, 2011). In this report, the linkage between the human resource
management and business strategy has been explained with inclusions of horizontal and vertical
integration. Additionally, several human resource models – best fit and best approach have been dealt
with to analyze the concept of reward and performance management. The aim of the assignment is to
discuss about the strategic management of Human Resource Department of current business
environment.
Discussion
Relationship between business strategy and human resource management
Consideration of human resource is one of the most significant components of the business strategy.
The link between the two concepts is established by referring to employee relations model, strategic
leadership. The findings of the Separation model, which considered to be the advanced model in
business strategy, states that no link exists between the two stated concepts (Bratton and Gold, 2017).
However, the Fit model negates the findings of Separation model and states that human resource
consideration stems from organizational demand and strategy formulation.
As per the Holistic model, labour markets and employees provide competitive advantage, which can
be achieved through HR strategic planning. The Dialogue model focuses on two way communication
process as it helps in strategy formulation and alternative identification. One of the most used models
is HR driven model where the strategy formulation is linked to organizational demands. As per the
model, the workforce of an organization is considered before formulating strategies of HRM
department.
Horizontal integration and vertical alignment
The effectiveness of human resource is judged based on their functions and its contributions to
achieve the organizational vision, mission and objectives. The HR functions should be aligned with
corporate identity, objectives and organizational structure. On the other hand, horizontal integration is
effectiveness of strategy after being integrated with the several company functions. This helps an
organization to provide an overall development opportunity to the employees by considering their
needs while formulating strategy.
Theoretical basis and models of SHRM

In relation to SHRM, three theoretical approaches and models have been identified. Efficient
management of company productivity and performance helps in measuring the HRM contribution.
The employment laws and policies have to be aligned with company objectives to achieve the desired
results.
Universalist model or best practice approach
The approach helps in creating a skilled and committed workforce. In the concept of labour
management, the management has to choose between two options – high performance or high
commitment (Stavrou et al., 2010). Based on the choice, the competitive advantage in the labour
market is defined. The HRM strategy helps in establishing links between high performance system,
organizational strategy and committed workforce. The model converges the concept of strategic
human resource with skilled employees to achieve the desired organizational goals and objectives.
The employee needs and demands are also assessed before making strategic human resource plans or
strategies. Ensuring flexibility in workforce management and planning involves alignment of goals
with employee needs. The high commitment of the employees and involvement in business practices
helps in increasing the overall organizational performance and productivity leading to higher profits.
The Contingency or Best fit model focuses on the concept that the management should align the
organisational strategies with that of the HR department. It focuses on two integrations, which include
the horizontal integration that is also known as internal fit, and vertical integration that is also known
as external fit. HR strategies are created according to vertical integration by analysing the demand and
supply of human resources, while the internal requirements and strategies are assessed before creating
these strategies in horizontal integration (Armstrong and Taylor, 2014). If any organization
implements this model, then the management team will put special focus on the requirements of both
the company as well as its employees for creating a comprehensive HR strategy. The needs of the
retail organisation can be analysed by using technology, structure, culture, process of work indication
and behaviour as analysis criteria, because of which the best possible strategy can be created.
Another model that an organization can consider is the Resource Based View (RBV) model, which
focuses on using the existing resources for exploiting external opportunities in a new way instead of
wasting resources in acquiring new skills for separate opportunities. As per this model, organisational
performance can be improved by effectively utilising the tangible as well as intangible resources of
the company. The existing human resources of the company are valued highly if this model is
followed, and are considered to be an important source of competitive advantage. Thus, HR manager
of an organization should ensure that it values its existing employees and focus on improving their
performance by providing training to them for enhancing its current performance. The company can
also implement the VRIO framework in its operations, where resource’s ability to bring sustainable
competitive advantage in the company is judged on four requirements – valuable, costly to imitate,

rare and organised to capture value. Human resources fall in the valuable segment of the model, as the
availability of effective workforce will lead to increased organisational value of an organization.
HR practices of Performance Management and Reward: It is important for an organization to
implement an effective model and align it with its HR practices for improved organisational
performance (Van De Voorde et al., 2012). Apart from this, the company should also focus on giving
rewards to its employees for keeping them motivated. It is important for the management to integrate
both extrinsic and intrinsic rewards in the company, which will lead to higher employee satisfaction
and motivation. There are various ways in which rewards can be provided to the employees for their
effective performance, which includes, giving promotion, incentives, bonus, increment and higher
skills training.
Performance management is another strategy that the company can implement for fulfilling its goals
and objectives. Along with improving individual performance, it can improve the skills,
encouragement and motivation of all employees. This can be done by assessing the performance of all
employees and providing feedback to them on a periodical basis (Phillips and Phillips, 2016). An
organization can also modify its remuneration system and redesign the strategic HR system and
policies.
Recommendations
In order to manage an organization successfully, it is highly essential for the management department
of business organizations to develop and maintain effective performance management system. As
there are certain discrepancies in the performance management system of an organization, relevant
recommendations can help the organization to bridge the gap and support their process of
organizational change and development. Informing the employees about the importance of change and
development and its contribution towards the organizational objectives and goals, will help the
organization and its management to reach new heights of business and enhance the overall
performance level of the entire workforce (Kim and Bae, 2017). To fulfil these business objectives
and carry out the human resource strategies properly, HRM department focuses on hiring people with
relevant work experience and skills set. In order to redesign the current performance management,
improve the decision-making process of the human resource management of an organization and
initiating a better human resource approach, it is vital for the company to evaluate the effectiveness of
its current approaches, models and strategies.
After analysing these areas, the HR managers would be able to analyse the areas of weaknesses based
on which the company would be able to design or redesign that particular human resource strategy,
approach or model. Redesign can facilitate an organization and its management to assess the unique
culture and qualities of the workforce. Developing SMART objectives, measuring the outcome of

every practice, choosing the right scheme and setting appropriate assessment criteria can help HRM
department to support the change (Jimenez-Jimenez and Sanz-Valle, 2012). Apart from these
measures, the management of an organization can also look forward to bring relevant changes in the
current hiring and selection process based on which the training and development process of the
employees can also be changed. This would have a significant effect on the quality of the performance
of the workforce. Modifying the current documentation procedure can assist the HR managers to keep
right track of the performance activities and progress of the employees.
As human resource strategies are mostly based on the work-culture and environment, the changes in
the training, hiring, development and documentation process should have effect on the remuneration
strategies. Creating remunerations slabs and introducing incentives can help the organization to
motivate the employees in both intrinsic and extrinsic manner.
Conclusion
The business strategies and human resource management strategies are interrelated and they are
applied while implementing leadership and management models and strategies. For a global
organization, it is important to analyse the needs and requirements of effective human resource
strategies and compare the current strategies with the required strategies. Necessary changes can be
made by the management in order to benefit the organization in the most effective and positive
manner. A management committee has the potentiality to redesign or design its strategic human
resource models and plans in order to meet the organizational objectives, goals, mission and vision.
This would also ensure effective performance of the workforce, which would also lead to a positive
working environment of the business organization. Implementing the above-mentioned
recommendation can facilitate the human resource department of an organization to achieve all its
targets.

Task 2
Introduction
Employee relation is referred to the industrial relation that is concerned with the physical, emotional,
contractual and practical relationship between the employee and the employer. Employee relation is
necessary for the development of organization and the HRM of the organization is responsible to
maintain the workforce of the company and enhance the employee engagement within the firm. This
report will evaluate the theoretical perspective of employee relation and provide details regarding the
various actors involved in employee relation. The role of the actors in relation to the changing nature
of the employee relation will help in understanding the different ways by which employee relations
can be improved.
Critically evaluate the nature and theoretical perspective of employment relation
The manager of the company is responsible for maintaining the employee relation of the firm; they
are required to manage the expectations and demands of their employees. Maintaining employee
relation can be complex due to a number of factors such as the presence of a diverse workforce with
different personalities, thoughts, beliefs and emotions. According to Nikoloski et al., (2014) the
difference in the power between the employer and the employee is one of the most significant features
of the employee relationship. Power becomes essential when there is a difference between the
interests of the individuals. For example, employees generally want job security, higher pay, career
progression and other things, which help them to advance in their career path. Employers and
employee cooperates with one another in order to understand their duties and responsibilities. The
cooperation can also result in conflicts between the employer and the employee that can be resolved
with the help of grievance procedure or other forms of listening employee complaints.
Theoretical perspective of employee relation helps in analysing the employee relations of an
organization.
Some of the common theories that are used by the HRM of organizations are
Unitarism: It starts by a set of values and assumption that helps in holding workplace conflicts.
Employees and employers of the organization have same area of interests, values and goals; this helps
the organization to ensure that there is no conflict within the organization. Reducing conflicts allows
in enhancement of employee relations. For example, the HRM of Tesco motivates their employees to
work as per the guidance of the managements so that all the employees work towards a common
objective without any conflict (Businessperspectives.org, 2018).
Pluralism: Some organizations are made with different groups of people having different goals and
interests, in this theory the organization there is a high chance of conflicts and misunderstanding. The

management of the organization is responsible to balance the interests of the different groups of the
organization. The management is required to develop strategies such as collective bargaining in order
to reduce the prevailing conflicts (Heery, 2016).
Identity the actors of employment relation and evaluate their roles in employment relation (or
the roles of the actors in employment relation)
There are a number of individuals involved in order to maintain the employee relation of an
organization. Some of the common actors of employee relation are employees, employers, managers
and the trade union. These members play a vital role in order to maintain the employee relation within
an organization. The employee of an organization are required to be clear about their needs and wants
and should be aware about the expectations of the firm from them. The employees should work as per
their job roles and achieve the targets that are set for them (Rahim, 2017). The managers of the
organization help the employees by communicating their needs and wants to the employers so that the
requirements of the employees can be fulfilled. This will assist in improving the work culture of the
organization, which enhances the business of the company. The employers of the firm is required to
look after the needs of their employees so that their employees are able to work in a stress free
environment, healthy work situations will increase the productivity and profit generation of the
origination. The trade union is the most essential body that helps the employees of various
organization in gaining acknowledgement and rights within their workplace. The trade union uses the
process of collective bargaining so that the employers provide the rights of the employees (Kaufman
and Bennett, 2017). They raise their voice for the monetary issues of the employee, any health issues
of the employees, for the security of the employees or for any unjust done to the employee. Thus, in
order to establish healthy employee relation all the actors of employee relations should work and
coordinate in an efficient manner so that the business of the organization runs in a smooth manner
without any complications.
Evaluate their roles in line with the changing nature of employment relation
Amendments in the employment legislation are considered as the most significant development of the
employment relations in a number of developed countries during the 20th century. There are certain
laws that provide special benefits and rights to the employees and obligations to the employers. In
UK, certain legislations have been introduced by the EU Directives encompassing wide range of
employment matters such as health and safety, working time, equality, parental leave, part-time,
fixed-time, maternity leave and more. With the changing nature of employment the role of the actors,
also change. The employees are more involved in the decision making process of the organization.
With the help of grievance system, the employees of certain organizations are able to express their
opinions, thus acting as industrial citizens (Mowbray et al., 2015). The managers have major role of
ensuring that all the rights of the employees are provided to them and that all the policies and

strategies of the organization are being followed in an effective manner. The employers are required
to ensure that their organization is working in accordance with the policies and regulations of the
government and there is no discrimination in their organization. Trade union is one of the most
significant actors of employee relation and the roles of trade union are evaluated with the changing
nature of the employments relations. The trade union also work in cooperation with the employers to
maintain their activities and ensure that all the rights of the employees are maintained in the most
effective manner. The cooperation results in mutual agreement and coordinated collective bargaining
procedure that is beneficial for the employers as well as the employees. Thus, the changing employee
relation alters the roles of the actors of employee relation in a better way (Marginson, 2015).
Similarly, if there is any kind of change in the demands of the employees, then the employers are
required to cooperate with the employees and fulfil their requirements so that employee relation of the
organization can be enhanced.
If there is change in the demands f the employer then the employees and the employers must come to
a mutual understanding and work in order to achieve the goals of the organization.
Make recommendations on how employment participation and employee voice can contribute
to the improvement of employment relation.
Employee voice is the medium by which employees of an organization are able to communicate their
views and opinions to their employers. It is the one of the significant way through which they are able
to convey the matters that are affecting their work to their employers or supervisors (CIPD, 2018).
This method is beneficial for the employers as effective voice of employees contributes towards the
productivity, innovation and improvement of the business of the firm. Employee voice helps in
improvement of employee relation as all the problems of the employees are communicated to the
employers and a solution is developed in order to resolve those problems. This makes the employees
feel valued and they work with their full potential in order to improve the working conditions of the
organization.
Employee participation is the process by which the management of an organization involves their
employees in the major decision making process of the business (Benn et al., 2015). This assists the
employees to feel responsible towards the firm and they actively participate in the activities of the
firm and try to provide efficient and creative solution for the problems of the company. Employee
participation also increases the coordination between the employees of the company and they work
together in order to achieve the goal and targets. Employee participation helps in improving the
employee relation of the company.

Conclusion
This report allows the learner to gain detailed information about the significance of employee relation
for the development of organization. As per the nature and theoretical purpose of employee relation,
the employees are effectively communicating with their employers about their needs and wants. There
are various theories such an utilarism that is applied by the employers in order to enhance employee
relation. The changing nature of the employee relation results in changing the roles of the actors of
employee relation. The report helps in understanding about the importance of employee voice and
participation in improvement of employee relation within the organization.

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