Strategic Human Resource Management: Business and Employment

This report provides a comprehensive analysis of Strategic Human Resource Management (SHRM). It begins with an executive summary and an introduction outlining the role of SHRM in organizations. The report delves into theoretical foundations and models, including Best Fit/Contingency Theory, Best Practice Theory, and Resource-Based View, illustrating their application in aligning HR with business strategies. It examines specific HR practices like performance management and reward systems, including the design of a performance management system. The report further explores the nature of employment relations, the roles of actors within the employment relationship, and mechanisms for employee participation and voice to improve relations. The report concludes with recommendations for enhancing employment relations and summarizes key findings, supported by illustrations and references.

Strategic Human
Resource
Management

EXECUTIVE SUMMARY
The following report focuses on analysing the issues of strategic human resources in an
organisation. For understanding the topic more clearly various theoretical and models are
described. Along with this it includes other theories like Best Fit/ Contingency Theory, Best
Practice Theory and Resource Based View Theory which helps to clearly understand the role of
SHRM in organization. Every business organization varies, depending on ways to manage the
human resources. Following report will elaborate completely the role of strategies HR and
business relationship. Moreover, the other part involves the improvement in the employment
relationship in the organisation. For this purpose critically evaluation of various topics are done.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Introduction............................................................................................................................1
Main Body..............................................................................................................................1
Theoretical basis and models of SHRM................................................................................5
Strategic perspectives of Best fit/Contingency, Best Practice/Universalist and Resource Based
View, (RBV)...........................................................................................................................7
Specific HR practices of Performance Management and Reward.........................................9
Design/re-design a performance management system........................................................10
Conclusion ...........................................................................................................................11
TASK 2..........................................................................................................................................11
Introduction..........................................................................................................................11
Main Body ...........................................................................................................................11
The nature and theoretical perspectives of Employment Relations....................................11
Roles of the actors within the Employment Relationship with analysis of the changing nature
of employment relations.......................................................................................................12
Recommendations of how mechanisms of employee participation and employee voice can
contribute to improved employment relations......................................................................13
Conclusion............................................................................................................................14
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................15

Illustration Index
Illustration 1: Vertical alignment of HR and Business strategy.....................................................4
Illustration 2: Strategic HRM Model with business strategy ..........................................................5
Illustration 3: Behavioural theory ...................................................................................................6
Illustration 4: Model of SHRM........................................................................................................7
Illustration 5: Best-fit model for HR strategy..................................................................................8
Illustration 6: Resources Based View of SHRM.............................................................................9
Illustration 7: Performance Management Cycle............................................................................10

INTRODUCTION
Human Resources strategies are developed to maintain the administration, development,
recruitment, safety & Health and welfare in the organizations. For this HRM helps to
communicate with the employees and raise their issues in front of management and try to resolve
them. Along with this, they play great role in the managerial and operative function of the firms.
There are various ways by which employees performance can be improved. Such improvement
help the organization to achieve their goals and objectives at faster rate (Albrecht and et.al.,
2015). However, to improve the performance various strategies and planning are required which
requires HRM role. Following report evaluates the operation of Human Resource and business
strategies in the organization. Further, it comprise of the strategies made by them to provide
shape and structure to the firm. Moreover, theoretical knowledge regarding the basic of SHRM,
performance management and reward system is evaluated. At last, nature and theoretical
perspective of employment relationship is discussed which includes the employee participation
and their voice in decision-making process for the organisation. The study shows how business
goals and objectives are formulated through HR strategies.
TASK 1
Introduction
HRM is the procedure to integrate employees and organizations together so that firm can
achieve their goals and objectives. They play main role in affecting the bottom line and strategic
role in the companies. To achieve long-term productivity, success and profit, firm owner
understands the inter-relation between them. This section of the report comprise of relationship
between the HR and business strategies. Further, it involves the vertical alignment and horizontal
integration across the firms. Moreover, it comprise of different strategic perspectives and HR
practices. At last, structure of the performance management system is given.
Main Body
The main focus of the business strategies is to earn profit and succeed in their respective
markets. It helps organization to understand the internal and external environment. This supports
firm to focus on the competitive environment and gain advantage over it. Further, it shows the
organizational and manager approach to customers, market and competitors. For this purpose,
the strategies must be made on the basis of the changing needs and available resources to achieve
goals and aims along with pursuing competitive advantage.
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To attend the goals, objectives and long-term productivity, firm prepare annual business
plans (Alfes and et.al., 2013). Such things includes the strategies related to improvement in the
product quality, quantity, supply chain, innovation, leadership, values, price reduction, customer
focus, suppliers, growth and various other things. Business strategies are mainly focus on the 3
question: what, how and who. These question includes the aim, mission, goals, vision, budget,
cost, design, planning, strategies, resource utilization, performance management and
development.
Before making any strategies firms need to consider external environment. Other things
that can included are scope, ability and governing bodies. There are many other factors which are
included in the external business environment. Besides this, firm distinctive competencies
comprise of the success they achieved in the market by competing with others in terms of cost,
brand, price, product development and innovation. The governing bodies may include the
directors, government, business partners and stockholders. Firm success can be defined by
established long-term market position and competitive advantages achieved by the them.
Competitive advantage in the market can be gained through providing better services at lows cost
and having more market shares (Ali and et.al., 2015). For this, there is necessity of customer
satisfaction and profit maximization. Though, the firms have large capital and technology but the
major development and improvement can be made through the human resource. Moreover,
companies can gain competitive advantages if their employees have commitment, skills and
values to achieve organisational goals. Thus, HR strategies are made to manage the human-
capital in the firm. For this various policies and practises are implemented in the company.
Various roles such as recruitment, engagement, monitoring and deployment are performed by
HRM with consideration of the mission and goals of the organization. Further, their role includes
the to add the values in the organisation. HR strategies are enforced to allocate the role and
obtain the routine, uniformity and consistency in the HR efforts. Both the strategies serves the
stakeholders of the firm who want the organisation to deliver outcomes. External environmental
impacts are understood by the organization so that HR professionals can make strategies to
control or minimized its adverse impact (Aswathappa, 2013). For this purpose, leadership,
direction, training, monitoring and development are the important activities implemented by the
HR management. The role of implementing the HR strategies is the develop effective work
environment which have employee commitment, morale values, service and positive approach.
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Such approach enables the workers to serve customer better. For the integration of the HR and
business strategies, HR professional should consider the life-cycle stages of their firms. This
must also include the financial control system. Business strategies can be achieved if competitive
strategies are focused with HR strategies. To accomplish this task, vertical alignment and
horizontal integration method is adopted. Firms have the dynamic system, where task can be
easily completed through the alignment. It is the approach made by the company to accomplish
their goals and objectives (Babalola and et.al., 2016). The main focus is given on the mission,
vision and values. HR strategies need to aligned in such a way that firm uses all its resources
effectively and in sustainable way so that success can be achieved. However, horizontal
integration are required to maintain the competitive business. Through this companies can get the
idea of industrial development, economic scales and how to increase the efficiency of the
organisation through integration. This will helps the business in achieving the higher production
at lower cost, more featured product, increased in market power and capability to enter new
market.
To accomplish all the task, HR needs to make planning related to various things. One of
the main task is to provide the manpower to the organization who have technical skills,
knowledge and values which firm can utilize to achieve success. Further, they need to be in
communication with them so that development can be made. For the alignment of both
strategies verbal acknowledgements and progressive involvement is required. Along with this
leaders guidance and vision should be there (Hameed, Ramzan and Zubair, 2014). Effective
communication and workforces diversity must be provided in the organisation so that every
employee can get equal opportunities. Additional to it, health and safety must be ensured. All
this things will improve the performance and productivity of the firm which will ultimately lead
to achievement of organisational goals and objectives.
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Illustration 1: Vertical alignment of HR and Business strategy
Sources: Technical Information on Customs Valuation, 2017.

Theoretical basis and models of SHRM
According to Hameed, Ramzan and Zubair (2014), there are several theories associated with the
given above strategies.
Major two are considered to understand it more clearly:
1. Behavioural Theories: It describes that development of business strategies involves the
involvement of the employee behaviour. This improves the firm performance and
relationship. In many literature reviews behavioural approach can be easily seen. For
instance, Kehoe and Wright (2013) concluded that, to achieve the goals and objectives
firms needs to understand the employee behaviour. Also, Marchington and et.al. (2016)
mentioned that policies and practises in the organisation are part of the development but
employee behaviour plays important role in it. Behavioural theory is required if firm
wants to achieve competitive advantage.
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Illustration 2: Strategic HRM Model with business strategy
Sources: Kehoe and Wright (2013)

2. 'Resource-based view of the company' theory: This theory is best described by the
Paillé and et.al. (2014), where they mentioned the competitive advantage and firm
resources can help the company to achieve their goals. The theory is based on the
assumption that every firm must have specific resource which their competitors are
unable to buy. It comprise of four main advantages which are positive value, unique
resource, imperfectly imitable and can not be replaced by the other similar companies.
Whereas, according to Purce, (2014), sustainable competitive advantages can be evolved
through resource identification rather than developed. Thus, focus on the resource can
help the firm to achieve competitive success.
As cited by Kehoe and Wright (2013), there are two basic models related to the SHRM. They
are:
1. High Performance Management model: The model is related to development of the manpower
to improve the performance level of the company. It includes the growth, customer's service,
productivity, profit and shareholder values. For this purpose, monitoring, performance
appraisals, job design, recruitment, training, selection, proper functioning, promotion and awards
are given to improve the performance.
2. High commitment and involvement model: It further includes the employee commitment,
organization value and goals, their interest and voice in organization decision-making. As per
Sheehan, (2014), more flexibility, structured work, problem solving ability, payment system,
profit sharing and employee involvement are considered for achieving the organisational goals
and objectives.
Below is the model which represent the model of SHRM in organisation.
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Illustration 3: Behavioural theory
Sources: Paillé and et.al., 2014

Strategic perspectives of Best fit/Contingency, Best Practice/Universalist and Resource Based
View, (RBV)
According to the Sheehan (2014), best fit strategies are based on the entire organization.
It includes the culture, external environment and operational activities are included in it. Here
demands of organization and employee are considered. It focus on the alignment of HR and
organization strategies. However, Sikora and Ferris (2014) criticizes that the model is unable to
handle the new challenges which are faced by the HR manager. Further, it is unable to show the
interrelation between each other.
Best-practise model is described by the Sparrow, Brewster and Chung (2016), which
states that HR must reach the competitive advantages without considering the firm
setting/structure. This will help to increase employee performance and commitment towards the
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Illustration 4: Model of SHRM
Sources: Kehoe and Wright, 2013

organization. For this purpose HR must perform their respective tasks properly. However, this
model was also subjected to critique. As stated by Sparrow, Brewster and Chung, (2016), it will
lead to deterioration as well as impact on the universal best-practise. So better solution are not
provided in the best-practise. Though, various organization have implemented this methods and
have gain success, but it is not necessary that it work on others.
Both models have their importance for achieving organizational goals but best-fit model
has better approach for overall management by HR practices.
There is another model which can be included which is resource-based view. As defined
by Albrecht and et.al., (2015), the resource helps to gain the competitive advantage and sustain
profit for the firm. It deals with the focus on the sources which provides the competitive
advantage rather than environment. The model suggest that there are two types of resources
physical and non-physical. This includes all the areas such as land, equipments, capital, brand
image, reputation, assets and various other things. Through this firm can have the sustainable
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Illustration 5: Best-fit model for HR strategy
Sources: Purce, 2014