Report: Strategic Human Resource Management and Employment Relations

This report provides a comprehensive overview of Strategic Human Resource Management (SHRM) and Employment Relations. It begins by exploring the relationship between business and HR strategies, including vertical alignment, horizontal integration, and various SHRM models like the Integrated System Model and the Matching Model. The report then delves into the strategic perspectives of Best Fit, Best Practice, and the Resource-Based View of SHRM. Additionally, it examines HR practices such as performance management and reward systems. The second part of the report focuses on Employment Relations, defining the relationship between employees and employers, the role of actors within this relationship, and the changing nature of employment relations. It concludes with recommendations for mechanisms to enhance employee participation and voice, such as open-door policies and soliciting opinions on job roles. The report aims to provide a thorough understanding of how effective HRM practices and strong employee relations contribute to organizational success.

Strategic Human Resource
Management

Executive Summary
This report included strategic human resource management that is linking HRM practices with
strategic goals of business and concepts that are covered under strategic human resource
management. These concepts are relation between business strategy and HR strategy, strategy
integrations in vertical and horizontal forms, various models of SHRM and strategic perspective
of various approaches of Strategic human resource management like best practice, best fit. In
second part report includes employment relations that are relations between employee and
employer created voluntarily and then governed by legislation and related concepts like its
nature, changing nature and role of various actors in employment relations. Recommendation for
employee participation have also been included in this report which are open door policy and
opinion regarding their job role.

Table of Contents
Strategic Human Resource Management.........................................................................................1
INTRODUCTION...........................................................................................................................4
TASK 1............................................................................................................................................4
Relationship between business strategies and HR strategies......................................................4
Vertical alignment and Horizontal Integration...........................................................................5
Theoretical models of SHRM.....................................................................................................6
Strategic perspective of Best fit and Best Practice and Resource based approach to SHRM.....6
HR practices of performance management and rewards.............................................................7
TASK 2............................................................................................................................................8
Employment relations.................................................................................................................8
Role of actors within employment relationship..........................................................................9
Changing nature of Employment relations...............................................................................10
Mechanism for employee participation and employee voice (Recommendation)....................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Strategic human resource management refers to practice of linking strategic goals and
objectives of the organisation to human resources so that performance of organisation can be
improved and organisation can create culture of innovation, flexibility and competitive
advantage. For this organisation includes and accept human resources as strategic partners of the
organisation. This report includes discussion over strategic human resource management,
performance management, rewards and management of employee relations. These are very
important as no matter how well designed strategies company have these will never be able to
get desired result if company do not have efficient employees to work on that strategies. This is
why it is very important that company employs best candidates include them in strategic thinking
and planning, manage their performance and provide adequate rewards while managing cordial
relations with employees. These concepts have been discussed in report by discussing various
theories and models of strategic human resources management (SHRM).
TASK 1
Relationship between business strategies and HR strategies
Availability of effective and efficient employees is necessary in order to achieve goals
and objectives of the organisation effectively in a timely and cost friendly manner. For this
reason organisations design and develop human resources strategies so that they can manage
employees and enable them to work for organisation and achieve organisational goals. Business
strategies and HR strategies are related to each other as to work on business strategies
organisations need employees and HR strategies are directly concerned with employees. This can
be better explained as,
HR strategy is Business Strategy- strategies that business develop are all business strategies no
matter if they are concerned with core business activities or are concerned with human
resources . Human resource is part of business and hence strategies for them are also business
strategies (Delery and Roumpi, 2017). Presently businesses seek to develop and create human
capital for their organisation for longevity this is also a pert of their long term business strategies
that they are having efficient employees in future as well. This clarifies relationship between HR
strategies and business strategies.
Business productivity and HR strategies- Businesses design their employee strategies so that
they can increase their productivity. All the important consideration in HR strategies whether

recruitment, selection, motivation have only one objective and that is to increase productivity of
organisation which is then followed by business strategies and their linkage with HR and HR
strategies. This can be explained as that almost all businesses have strategies to motivate their
employees to work for organisational objectives, and then they have strategies to achieve that
objectives using other resources of organisation like machine, land etc. (Akter and et.al., 2016).
Eventually how well these resources are being used and productivity of organisation is
contributed by one factor that is concerned with employees and that is their motivation.
Vertical alignment and Horizontal Integration
Vertical Alignment- it refers to alignment of various HR strategies to business strategies.
In vertical alignment align HR strategies with overall organisational strategies to support that
strategies and fit neatly with those activities and strategies. This links goals of organisation to
HR strategies. It requires movement of HR strategies in the direction of company's vision and
mission. It can be understood from the instance that if company employs new technology so that
it can increase its production and profitability to achieve its goals then HR strategies of the
company should focus and include that employees in the organisation are able to work on that
technology so that organisation can achieve its objectives of increasing productivity and
profitability. This is vertical alignment that HR strategies that are concerned with training are
directly supporting organisational goal and objective achievement.
Horizontal integration- it refers to integration and connection between and within various
HR processes in organisation (de Oliveira and et.al., 2017). These strategies need to be
connected to each other to ensure that they are promoting the same goal and are being employed
to achieve same goal of the organisation. In horizontal integration HR activities and strategies
support each other and feed into each other. It can be understood through an example that
integrating learning and development strategies to other HR strategies like recruitment and
selection, performance management and reward management. When company recruit employees
their learning and development needs should be identified so that later they are able to perform
effectively. Similarly, company through performance management can identify and evaluate
learning and development needs of the employees. It clarifies that strategies concerned with
learning and development needs to be integrated with other strategies like recruiting and
performance management.

Theoretical models of SHRM
Integrated system Model- this model considers that employees like any other
stakeholder are equally important in influencing organisational outcomes. According to this
model interest of various groups must be factored in creation of HRM strategies and business
strategies (Gulati, 2016). This model is deeply rooted to human relations tradition and influence
of employees is visible through motivation and creation of organisational culture of mutual trust
and teamwork. When HR strategies includes factors like reward system, HR flows the outcomes
of such setup are high congruence, commitment, competencies etc. the achievement of these
have impact on long term consequences, increased productivity, organisational effectiveness.
This model can be concluded that when employee of the organisation are treated as assets and
not as cost they enable organisation to have competitive advantage.
Matching Model- this model focuses on tight fit between business strategies and HR
strategies. It ask that human resources available in organisation must be matched with their jobs
in the organisation. According to this model HR strategies concerned with quantity of human
resources required for achieving objectives that are enshrined in strategies must be highly
calculative. This model is based on product market logic and according to that to gain higher
profits labour must be obtained cheaply, used sparingly, developed and exploited fully.
These theories are based on two different perspective where integrated system model
focuses on relationship aspect of the strategic human resources management whereas Matching
model focuses on calculative aspect of the strategic HRM (Qi and et.al., 2017). Integrated model
includes soft side of HRM whereas Matching Model includes hard side of the HRM. Matching
model of HRM consider labour as cost whereas integrated model considers that employees needs
to be trated as assets and not like cost to achieve organisational goals.
Strategic perspective of Best fit and Best Practice and Resource based approach to SHRM
Best fit/contingency approach- according to this theory practices that company adopts
needs to be best fit rather than best practice. This considers that practices adopted should be
based on the situation and strategy of organisation is primary contingency variable and the
impact of HR strategy on the performance depends on the interaction of organisation's strategy
and HR strategy. This approach is comparatively better as organisation can choose HR practice
as per their organisational strategies.

Best Practice/universalist- according to this approach organisation will have to adopt a
best set of HRM practices that will lead to superior performance. In this approach 'Pfeffer' listed
few best practices that organisations can employ for superior performance. These are-
 Employment security
 Selective hiring
 Self-managed teams
 High compensation contingent on performance training
 Reduction of status differentials sharing information.
However this theory was criticised and commented by many that there is no such thing as
universal best practices as no practice can be best fit in all the work environment and company
culture (Zehir and et.al., 2016). As strategies, management style, working practices and
technology is different at all the companies.
Resources Based view- According to this approach organisation must achieve resources
and opportunity so that they can be deployed and used in order to achieve competitive advantage.
In this context employees of the organisation are also considered as resources and this view says
that resources/ employees should be managed strategically so that firm enables itself to
outperform and stay ahead from competitors. For this companies facilitate development of
competencies and generate implied organisational knowledge. This approach also considers that
to achieve competitive advantage companies will have to link its strategies with resources
available to organisation that should be valuable, rare and imperfectly imitable.
HR practices of performance management and rewards
Performance management on of the most important function of human resource
management refers to managing performance of those who are working towards achievement of
organisational objectives. In starts from determination of organisational objectives and followed
by determination of practices required to achieve that objectives and end at giving feedback to
the performer of the functions.
There are various practices that are followed by organisations in order to manage performance.
Organisational Alignment- organisations use various tools to align different employees, teams
and divisions with objectives of organisations. This serves as competitive assets and enable
better decision making and increase workforce engagement. Perfect articulation of roles and
responsibilities drastically improve business and productivity. This also contribute to rational

performance rating and offers to new opportunity so that employees can grow. This practice is
very beneficial as it removes ambiguity and allows thinking more critically and deeply about the
work that needs to be performed.
Constant Appreciation- This is another effective practice of performance management as this
contribute in job satisfaction of the employee (Hamadamin and Atan, 2019). When employees
are constantly appreciated for their every small achievement their confidence get increased and
they take risk that eventually benefit organisation. For appreciation simple thank you and well
done is enough but constructive feedback can do wonders.
On the other hand reward refers to monetary and non-monetary benefits availed to individuals
working in the organisation for specific achievements that adds value to the organisational
practices. Reward practices are as follows-
Performance linked Reward- Rewards should be and needs to be linked with performance so
that they can directly contribute to improved performance (Saebi, Lien and Foss, 2017). Reward
when linked to performance not only improves percentage by means of in creased rewards with
increased performance but also differentiate high performers from average or low performers.
TASK 2
Employment relations
Employment relations refers to relationship that exist between employee and employer
which is created by them and later rationalised by legislation. This relations need to be cordial so
that it becomes easy for employees and employer to work together and neither of them feel
unsatisfied. This relationship starts from the time employee decides to work in an organisation
and employer decides to let employee work in their organisation. Later government has made
legislation regarding this set up so that employer can have a idea of how they need to treat
employee and employees also do not get exploited and are aware of their rights and interest
(Bianchi and Tomaselli, 2015). Legislation that govern IR provides machinery for both co-
operation and conflict resolution. This is because co-operation and conflict are two faces of a
coin.
Nature of employment relationship is as follows-
 Employment relations is based on business or organisational functions. As there would
be no relationship that is known as employment relationship if there will be no employer
that requires to have a business organisation to employ employee for its operations.

 This relation is both individual and collective. When employee and employer have a
relation that is between employer and employee it is individual relation and when
relationship exist in employers' association and employee association it becomes
collective relationship.
 This relationship is multidimensional as this is regulated as well as unregulated,
individualized as well as collective(institutionalized), this also includes government in it
so it is multidimensional. It is not always governed by legislation and attitude of both
parties towards each other is an important factor that contributes to this relationship and
decide whether it is harmonious or conflicting.
 Employment relationship is dynamic. This relation is dynamic as it gets affected because
if many reason like change in industrial nature, change in legislation, personal factors like
cooperation and conflict (Ryan, Murphy and Troy, 2019). This also gets affected by
many social institutions that exist in the society where a relationship do exist.
 Different from human resource management. Employment relations are different from
human resource management. Though employment relations are also a part of human
resource management. But various practices concerned with HR are dependent on
employment relations and its legislation. Practices for human resource also get affected
by employment relation when these are not based o any legislation. Like cordial
employment relations will contribute to motivation of employees and their job
satisfaction.
 Main objective of employee employer relations is to maintain harmonious relations in
labour and management parts so that management can achieve their objective of higher
productivity and employees can secure and exercise their right.
 Collective bargaining. Collective bargaining is an essential and important part of
employment relations because even when employee and employer are having individual
relations terms of employment are decided collectively.
Role of actors within employment relationship
Relationships are made of two or more parties and these parties are also considered as
actors in relationship. Similarly in employment relationship there are parties that get involved in
relationship and are also known as actors in this relationship (Fiorito, 2015). In this relationship
main and key actors are employee, employer and government. Role of each party is as follows-

Employee- employee is one of the most important actor and part of this relationship and
employment relationship cannot exist without an employee. Employee is the person who works
and renders his services to achieve organisational and employers goals in exchange of monetary
and non-monetary compensation. Role of employee in this relationship is to provide services and
ensuring that their rights and interests are safe (Kalleberg and Marsden, 2015). Behaviour of
employees is governed by legislation as employment legislation provides basis for terms and
condition that are required to be followed by employees during their employment. Employees
also play important role in employment relations as association of employees or trade union is
formed and regulated by employees. This association is very important part of employment
relations.
Employer- Just like employee for employment relations existence of employer is equally
important. Employer provide employment to employees so that employees can contribute to
achieve organisational goals. Employees are important as there will be no sense of any resource
of organisation is human element is not there to utilize these resources. Employers' attitude
towards is also decided by legislation. This help employers to decide and manage employees and
their relation with them. Employers' also play an important role by associating them with
employers' association that is an important part of employment relationship (Drahokoupil and
Fabo, 2016). Employers' association and trade union collectively determine terms and conditions
of employment.
Government- other important actor of employment relations is government. Government
influences this relationship through law, rules and regulations and by means of providing
machinery for conflict resolution.
Changing nature of Employment relations
One main feature of the employment relation is that nature of employment relations is
dynamic in nature and keep changing with the effect of change in its respective environment and
due to influence of changes in various factors like law, individual relations of employee and
employer. Employment relations have changed in many forms which is,
Increased number of speakers- this refers to those who speak for employees and their well
being. This are individuals and social organisations who are working for employee and workers
well being. These have increased in number and employers also think about that as any wrong

action taken by employer can create big difficulties for employers and hence they maintain good
relations with employees and workers.
Improved concern for internal people- In present business environment concern of
organisation have increased for customers who are also known as external people and at the
same time concern for well-being and development of internal people means employees have
also increased (Murphy, 2015). Employers have started considering employees as an important
part of organisation. Employers are concerned with various factors like motivation of employees
and their job satisfaction. That requires maintaining harmonious relations with employees.
Changed working environment- presently working environment have also changed and earlier
where men was important part of production and functioning of organisation presently
technology have taken that place, because of that demand for employees with technological skills
and knowledge have increased rather than manual job workers (Huang and et.al., 2016). This
have made significant impact on employment relations. Employees are now completely aware of
their rights and interests. Employers also are seeking for best fit employees and it requires to pay
good incentives and healthy employment conditions.
Mechanism for employee participation and employee voice (Recommendation)
Present employment environment have an important factor that is known as employee
participation that means that employees are asked for their opinion and thoughts while making
decision that are concerned with business. This is an practice that have two dimensions one is for
business that it can have benefit of knowledge and expertise of employees and other is for
employees that they get chance to express their thoughts. Concerned with participation and voice
of employees it is recommanded here that-
Asking their opinion for the matters that come under their job role- In this employees
should be asked their opinion about the matters that are concerned with their job in organisation
(Hu and Jiang, 2018). This will help organisation more as employees who are working at the job
on regular basis have a more clear and specific idea about the matter that are concern with their
job. This will allow organisation to make better decisions.
Open Door Policy- Employees do not take much interest in participation that does not ensure
that they will be recognized and their opinion would be considered (Im, Chung and Yang, 2017).
Like when employees are required to participate through schemes like suggestion box it is not
necessary that their idea and opinion would be given due importance but when employees

directly come to manager through open door policy, chances of being recognized and their idea
being given due importance and consideration increases. This enables employees to actively
participate and raise their voice.
CONCLUSION
On the basis of this report it can be concluded that strategic human resource management
that is managing employees in way that they contribute to strategic goals and objectives of an
organisation. This is an very important practice as human factor is very important when
organisation seek to achieve its goals. This report includes relationship between business strategy
and HR strategy. This is very crucial and success of business strategy depends on effective
implementation of human resource strategy and appropriate integration of strategies with
business objectives and other strategies of same functional area. Report then include employment
relations which refers to individual and collective relationship between employee and employer
and nature of employment relationship. Along with this as a nature of this relationship which is
dynamic changing nature of employment relations have also been included in this report. Lastly
report also includes recommendation for employee participation in the organisation.