Strategic Human Resource Management Report: Business Strategy and HRM

This report delves into the realm of Strategic Human Resource Management (SHRM), emphasizing its evolution and significance in aligning human capital with business objectives. It investigates the crucial relationship between business strategy and HRM plans, exploring various theoretical models ...Read More

Strategic Human Resource
Management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
The relationship between business strategy and HRM plans.................................................1
Models of SHRM...................................................................................................................3
Performance Management and Rewards................................................................................4
Recommendations for improvement......................................................................................7
TASK 2............................................................................................................................................8
Employment relations, role of actors, its changing nature and recommendations.................8
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic human resource management is field that has outgrown the scope of HRM as a
discipline. Today, organisation tries to use their manpower in a strategic way to gain a better
competitive position in market. There are several issues and problems that come up between
management and human resources of company that is solved with a strategic approach.
Basically, it allows managers in finding out the actual variance because of which issues are there.
If organisations need to extract the best out of people then they have to use strategic human
resource management techniques (Armstrong and Taylor, 2014). They will assist them in finding
the best path that can be followed by individuals to achieve their specified goals and objectives.
This report states about the relationship that exist in between business strategy and human
resource plans. While different theoretical basis and models will be used to enlarge the scope of
study. Tesco is chosen as a company that will be used to determine how various HRM activities
take place in it.
TASK 1
The relationship between business strategy and HRM plans
Today, it is very important for organisations to ensure that they are able to use their
manpower in a highly effective manner. The managers always try to align employee’s
capabilities with organisation requirements as to achieve goals and objectives of company in an
effective manner. In TESCO, the HR managers assist top management in preparing strategies
that will ensure an optimum utilisation of available resources (Armstrong, 2011). The people
element is a highly dynamic element that has to be managed by implementing right strategies as
well as plans. If the managers are not able to direct them effectively then company will suffer
from conflicts and lower productivity. If the HR strategy is different from business plans then
also there will be failure.
This is why it is very essential to ensure that all plans and polices that are prepared to
maintain people element effectively, are aligned with the business strategies. In Tesco, every
strategy is prepared while aligning resources and integrating various functions together (Boxall
and Purcell, 2011). The company follows divisional and matrix style to delegate authority and
power while keeping all factors of production integrated and aligned. Basically whenever HR
strategy is being prepared, it is given special important due to the fact that it will assist
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organisation in managing as well as boosting the productivity level of people who are working.
This is the very reason a business strategy contains special provisions for HR plans and polices.
There are certain points that will state about the relationship in a well-defined manner: HR plans and polices are business strategy: There is almost a line of sand that
differentiates the two of the stated terms. TESCO understands that an effective manpower
will aid the company in achieving its goals and objectives. As stated by the top
management of organisation, that developing capital is far more important to them as to
ensure longevity and success in business (Guest, 2011). In past, Personnel management
as well as HRM were focused on managing payroll, task of people, recruitment, etc. But
today it is completely concentrated to assist business in gaining competitive advantage. HR strategy and business productivity: Strategic approach in managing human resource
is paramount in developing a workforce which is highly productive. All the strategies that
are prepared by the HR department has to focus on enhancing job satisfaction which will
lead to higher level of productivity. As stated by TESCO official, human capital is the
most important factor and maintaining it is our priority. Impact of trends on HR and business strategies: The business houses in today's era are
focusing on blending human resources and company strategies as to achieve a better
alignment and integration of resources (Jabbour and et. al., 2013). As stated by Towers
Watson, that today HR management is at a point where it is integrating and becoming an
engine to achieve broader goals and objectives of company.
 Interaction between executive leadership: The quality of communication between HR
managers and top management states about the focus of company on human resource. If
there are differences between these two, then the workforce employed will also be dis
satisfied.
TESCO management is trying to integrate the HR plans with business strategies as to
gain better market positioning and competitive advantage (Jackson and et. al., 2011). Basically,
vertical alignment aids in ensuring that all hierarchical level are directed in same direction while
resources and different task are integrated according to organisational requirements. There are
certain theories and models of SHRM that are employed by TESCO to evaluate and implement
right strategies within company.
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Strategic human resource management including typical HR components such as
recruiting, hiring, payrolls and also involving working with employees in a collective manner in
order to boost retention and improve the quality of work. As it will help to organisation in
maximising their profits during the year. In contrary to this, SHRM is supporting to organisation
in making long-term business goals and outcomes. Along with this it is also focusing on longer-
term resourcing issues where company can achieve their existing goals and objective in effective
manner.
Apart from that it is essential for organisation to analyse internal and external factors. As
it will represent the core competencies of organisation also identifying the opportunities which
are not currently using by entity due to scarcity of resources. Moreover, this framework had
gained the widespread acceptance because of simplicity and power in making strategy.
Models of SHRM
There are different theories and models which allows managers to tackle with workforce
in a strategic manner. It is vital to ensure that they are used in an effective manner so that all
plans are implemented ad right results are gained. There are basically three models that are used
by managers for managing their resources and task effectively. They are stated below: Control Based Model: This is a model that is used by management to keep a tight grip
over employee movement and activities. Basically, managers are tasked with monitoring
situations as well as the task that are allotted to people. The model finds its roots from
Karl Marx's 'Transformation of labour power into labour'. It is a concept that allows
management in ensuring that the hierarchy as well as practices taking place within
company are being fulfilled or not (Jiang and et. al., 2012). It is a way that can be used to
secure every single aspect of work. It also assist in enhancing higher level of labour
profitability and productivity. The way this model is used by HR in company are with the
help of control and written rules and regulations. In TESCO this is used for ensuring that
the supply chain as well as store management is being done properly or not. When this
model is applied, it allows managers to use various tools and techniques to direct, control,
monitor and evaluate employee performance.
 Resource Based Model: Managers in an organisation are tasked with management of
resources. This is a very important task and has to be done in a required form or else
company will suffer from losses. This is a model that states that it is important for a
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manager to evaluate internal capabilities and skills before he analyse the market.
Basically, it is used to establish a reward-effort relationship and also analyse how
company looks at its employees (Kehoe and Wright, 2011). The managers need t9o keep
on evaluating organisation internal capabilities to ensure that all the required abilities are
there and company has potential to overcome issues. The prime focus remains to be on
exploiting strengths of company while neutralising weakness. There are four major
characteristics of this approach:
◦ Value
◦ Rarity
◦ Inimitability
◦ Non- Sustainability
These are very important for sustaining competitive advantage. Basically, this model put
special emphasis on developing competitive advantage by making process more efficient.
 Integrative Model: This model is a combination of the above stated approaches.
Basically, it states about control mechanism while emphasizing on developing reward-
effort based relationship. It is a model that characterizes two different yet main
dimensions of HR strategy that includes, development, locus of control and acquisition
(McWilliams and Siegel, 2012). The managers are focused on developing qualitative
human capital while also maintaining the control mechanisms. This leads to better
achievement of goals and objectives. The two dimensions of HR strategy after inclusion
states about four different type of dominant plan of action that can be used by managers
in TESCO:
◦ Commitment
◦ Collaboration
◦ Paternalistic
◦ Traditional
Managers can use any of the strategies to target market and ensure that internal strengths
are properly developed. These leadership approach will allow him in grabbing right
opportunities.
The above stated are the models that can be used by management in TESCO to make sure
that they are able to strategically direct human resource in the company (Renwick, Redman and
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Maguire, 2013). They also need to develop a better Performance Management System which will
assist in gaining workers unconditional support.
Performance Management and Rewards
The human resource department is constantly analysing and evaluating the performance
of people who are working within its premises. There are different methods and practices that are
conducted for ensuring that each task is completed with higher efficiency levels. In TESCO, the
HRM department has its own way of managing performance of people in an effective manner
(Sani, 2012). They use Steering Wheel as a tool to manage employee’s performance and engage
them in a proper manner. It has four quadrants that represents an important area. The managers
ensure that employees have a quality to strive for growth so that better effectiveness can be
achieved.
There are four different quadrants that represent a specified area that has to be managed
by employee on his own. They are as following:
 Customer- Quadrant 1
 Operations- Quadrant 2
 People- Quadrant 3
 Finance- Quadrant 4
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(Source: TESCO, 2017)
All these respective quadrants are further divided into different segments that has their
own set of key performance indicators (Sheehan, 2014). For example, a store attendant has to
deal with customer (who are divided on the basis of their own requirements, needs and wants).
He has to analyse what he requires and offer him products that can give him satisfaction. The
feedback from customer will allow managers in understanding the effectiveness of attended.
Basically, this method resembles 360 degree feedback method. It aids company as well as
managers in ensuring that each task is completed in a set period of time. Also, assist managers in
evaluating individual performance in all aspect. Every time when company analyse its people, it
checks if they providing more returns to organisation than the firm is investing in them. It is
clearly stated to employees in TESCO that they have to perform well or outstanding for gaining
rewards and incentives (Tan and Nasurdin, 2011). They have to excel in all four quadrants to
gain better returns.
The top management keep on evaluating the performance of individuals as this allows
them in identifying performers and non-performers. This is done in every quarter to keep
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Illustration 1: Steering Wheel

variances at their minimum and ensure higher productivity levels. The salaries as well as their
incentives are based on the very achievement of key performance indicators. Basically, the
concept of Steering wheel allows management in evaluating individuals from all aspects that are
directly attached to their workplace. It enhances employee engagement as well as ensure that
they are motivated to accomplish various task.
Though, there are certain shortcoming of the system. They are stated below: Time consumption: The first one is time consumption which is very high. Managers
have to make sure that whole is system keeps on running without any hindrance or there
will be massive consumption of time. Resource requirements: The second issues that exist in this system is higher requirement
of resources that will be consumed to conduct whole activity. Less than overall feedback: This is far less than the total feedback that is required to
analyse and evaluate people performance in a set period of time (Tooksoon, 2011).
Though, it covers many aspects but still it lacks in understanding the main factor and that
is employee inner stability.
 Biases: There can be biased response from people who are not in good terms with the
individual. Basically, this sometimes promotes unbiased reviews regarding an individual
performance. There is another reason behind this and that is, the communication is
always one sided and feedback provider never receives any follow up.
Recommendations for improvement
There are certain shortcoming that can be improved by the managers in TESCO. This can
be done by introducing changes in the existing system or developing a new technique. The
requirement here is to make the existing system more effective, speedy and change the one way
communication pattern (Truss, Mankin and Kelliher, 2012). There is a process which will state
how changes will be made in the system:
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(Source: Amin, 2017) PHASE 1: Instead of management, letting employees start the feedback process as per
their needs and requirements. PHASE 2: The manager and employees will decide which factors and people they deal
with daily as to get right feedback. PHASE 3: Letting employee keep the feedback private and include it in enhancing his
own self learning process. They only need to share same if it is required.
 PHASE 4: Allowing both, feedback provider and receiver to rate one another. This assist
in bringing in more transparency and accountability.
This new design will enhance the current system and aid in boosting employee
confidence (McWilliams and Siegel, 2012). At present there is no way in which feedback
provider will receive any information. Also, employees do not know how the whole process will
take place. The recommended changes will bring in higher level of transparency into the system
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Illustration 2: Making 360 Degree Feedback More Effective

and make employees more responsible. This will also boost the employee management relations
within organisation.
TASK 2
Employment relations, role of actors, its changing nature and recommendations
The employment relations are very important for a company. It is basically a legal link
that exist between an employer and an employee. In simple terms, when a person performs
certain task to earn monetary benefits then it is known as employment relations. Today,
employee relations are focused on developing individual as well as collective relationship
between the recruiter and candidate (Renwick, Redman and Maguire, 2013). A special emphasis
is put up by this concept where the line managers are encouraged to develop trust based
relationship with their sub-ordinates. In TESCO, managers are focused on the fact that people
and management relationship stays at par with requirements. This is necessary to keep a
workforce loyal towards company. There are specified ways managers tries to enhance employee
relations within TESCO. They are stated below: Improving Interaction between levels of management: This is very important step, it
allows managers in making sure that the flow of information is maintained and smooth.
This reduces doubts from people minds as well as makes sure that they are able to
complete task in an effective manner. There are several issues that exist in the mind of
people and has to be solved by a proper communication and information. Assisting workers in their career development: This is second most effective step that
allows managers in keeping loyalty of employees towards organisation (Sani, 2012). In
TESCO, the workers are guided by their seniors as to improve in the field of interest as
well as in their career. Putting up challenges in front of people: It is necessary to keep on challenging
individuals as to keep them away from boredom. For this, managers can use job rotation
in stores, such as a person can be placed at an attendant place and then next day he can be
placed at transaction counter.
 Engaging them in their favourite task: This is the best way to motivate people and that
is by engaging them in their preferred job type.
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These methods are used by managers in TESCO to ensure that the employee relations are
maintained and a proper strategic approach is used to enhance their capabilities as well as direct
them towards same goals (Sheehan, 2014). There are different actors who play a major role in
developing and maintaining these relations and they are as follows: Top management: They are the policy makers who ensures that business goals and task
are achieved in a set period of time. They analyse market and try to maintain decorum in
organisation by implementing rules and regulations. Negotiators: They are the managers who tries to ensure that employee understand
changes that are being made in the system. Unions: These are the organisations made by people for protecting them against any
discrimination or oppression. Employees: These people are the one who work for company to gain monetary benefits.
They are in legal contract with the parties and have to fulfil required duties.
 HR department: It is concerned with relationship between management and employees
and that is why it makes sure that each person is satisfied with job and is motivated to do
more.
These are the roles which are played by each participant in the process of developing as
well as maintaining better employee relationship. But with time the nature of market is changing
which is impacting employee relations (Tan and Nasurdin, 2011). The actors who are involved in
the process needs to adopt changes that are taking place and ensure that the relationship is
maintained. At present, TESCO needs to develop a system that will allow managers in hearing
out issues that exist in the mind of people. There are certain recommendations that will improve
employee participation and their voice: Introducing dual feedback concept: The managers need to take not just one feedback but
multiple feedbacks as to ensure that collected information is right and fulfils the
parameters. Developing better communication channels: This is very important as the flow of
information has to be maintained. Basically, it has to happen from both sides and not just
top to bottom. If information is sent and no feedback is taken then there will be lower
level of performance.
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 Improving employee engagement: Company will need a system where people
requirements are fulfilled and all the task are performed in an effective manner. This can
be achieved by engaging them in different task which challenges them or providing them
with needed training.
These are some recommendations that has to be adopted by company for ensuring that
each task is completed in a set period of time (Tooksoon, 2011). Also, the efficiency and
effectiveness level will improve if they are implemented by management in a proper manner.
The managers have to make policies and procedures that will lead to better relationship between
management and employees.
An involvement of employee is concerned with the capacity of employees to influence
the decision of individuals which are taken by them. As it will encourage them to actively
participate in the activities which are conducting by administration to build strong relation
among them. Along with this it will also improve the morale of employees and increase the
overall efficiency of company morale.
CONCLUSION
The strategic human resource management is a field of study that allows managers as
well as companies in engaging with people in more effective way. They are able to utilise
employee’s capabilities as well as direct their efforts in same direction. Though, there are some
uncertainties in the field but it is better as it allows management in integrating various process
and making one strategy that can be used for attaining higher growth rates. The managers also
need to focus on different actors for making sure that employee relations are maintained and
assist organisation in gaining higher competitive advantage.
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REFERENCES
Books and Journals
Armstrong, M. and Taylor, S., 2014. Armstrong's handbook of human resource management
practice. Kogan Page Publishers.
Armstrong, M., 2011. Armstrong's handbook of strategic human resource management. Kogan
Page Publishers.
Boxall, P. and Purcell, J., 2011. Strategy and human resource management. Palgrave Macmillan.
Guest, D. E., 2011. Human resource management and performance: still searching for some
answers. Human resource management journal. 21(1). pp. 3-13.
Jabbour, C. J. C. and et. al., 2013. Environmental management and operational performance in
automotive companies in Brazil: the role of human resource management and lean
manufacturing. Journal of Cleaner Production. 47. pp. 129-140.
Jackson, S.E. and et. al., 2011. State-of-the-art and future directions for green human resource
management: Introduction to the special issue. German Journal of Human Resource
Management. 25(2). pp. 99-116.
Jiang, K. and et. al., 2012. How does human resource management influence organizational
outcomes? A meta-analytic investigation of mediating mechanisms. Academy of
management Journal. 55(6). pp. 1264-1294.
Kehoe, R.R. and Wright, P.M., 2013. The impact of high-performance human resource practices
on employees’ attitudes and behaviors. Journal of management. 39(2). pp. 366-391.
McWilliams, A. and Siegel, D.S., 2011. Creating and capturing value: Strategic corporate social
responsibility, resource-based theory, and sustainable competitive advantage. Journal of
Management. 37(5), pp. 1480-1495.
Renwick, D.W., Redman, T. and Maguire, S., 2013. Green human resource management: A
review and research agenda. International Journal of Management Reviews. 15(1). pp. 1-
14.
Sani, A.D., 2012. Strategic human resource management and organizational performance in the
Nigerian insurance industry: The impact of organizational climate. Business intelligence
journal. 5(1). pp. 8-20.
Sheehan, M., 2014. Human resource management and performance: Evidence from small and
medium-sized firms. International Small Business Journal. 32(5). pp. 545-570.
Tan, C. L. and Nasurdin, A. M., 2011. Human resource management practices and organizational
innovation: assessing the mediating role of knowledge management effectiveness.
Electronic journal of knowledge management. 9(2). pp. 155-167.
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Tooksoon, H.M.P., 2011. Conceptual framework on the relationship between human resource
management practices, job satisfaction, and turnover. Journal of Economics and
Behavioral Studies. 2(2). pp. 41-49.
Truss, C., Mankin, D. and Kelliher, C., 2012. Strategic human resource management. Oxford
University Press.
Online
Amin. 2017. Making 360 Degree Feedback More Effective. [Online]. Available through:
<https://7geese.com/360-degree-feedback/>. [Accessed on 6th October 2017].
TESCO. 2017. Steering Wheel. [Online]. Available through:
<https://www.bernardmarr.com/default.asp?contentID=1123>. [Accessed on 6th October
2017].
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