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Human resource management strategy is a significant part of HR today (Delery & Doty, 1996).Most modern Human Resource Departments in many companies work hard to help the company grow. The heads of these departments hold meetings to consider the new ways that the company and its image should be marketed not just in order to attract more clientele but also to attract the best workers. It's hard to find good workers as work environment and competition from other firms keeps on changing. Research has shown that the moral and the attitude of the workforce of companies is a very big contributing factor to the company's overall image in the trading market.
What does theory say about Human resource management strategy
Because of the rapid change in working environment, organizations need to develop a more focused and coherent approach to managing people. In just the same way a business requires a marketing or information technology strategy it also requires a human resource or people strategy (accel 2008).
In developing such a human resource strategy, two critical questions must be addressed. What kinds of people do you need to manage and run your business to meet your strategic business objectives? What people programs and initiatives must be designed and implemented to attract, develop and retain staff to compete effectively? .In order to effectively answer these questions four key dimensions of an organization must be addressed. These are: Culture beliefs, values, norms and management style of the organization Organizations structure, job roles and reporting lines of the organization, People's skill levels, staff potential and management capability, human resources systems: the people focused mechanisms which deliver the strategy - employee selection, communications, training, rewards, career development and many other dimensions.
Relatively, in managing the people element, senior managers will only focus on one or two dimensions and neglect the others. Generally, companies reorganize their structures to free managers from bureaucracy and drive for more entrepreneurial flair but fail to adjust their training or reward systems (accel (2008). When the desired entrepreneurial behavior does not emerge, managers frequently look confused at the apparent failure of the changes to deliver results. What is required is a strategic perspective aimed at identifying the relationship between all four dimensions.
There has been a dramatic change in the field of human resource management (Delery and Doty, 802, 1996). These changes have been fueled by the organizations' attempt to integrate the human resource management with other goals of an organization to facilitate the process of their realization. As a result of these shifts, the focus of the human resource research has widened from micro analytic research that dominated the field to a more strategic perspective (Delery and Doty, 802, 1996).
Accordign to accel (2008), if a company require values, quality and service for its clients, then it should retrain staff, review the organization, reward, appraisal and communications systems. its good to note that the pay and reward system is a classic problem in this area. Additionally, organizations should have payment systems which are designed around the volume of output produced. If you seek to develop a company which emphasizes the product's quality you must change the pay systems. The consequences of not changing the pay systems, is a contradiction between quality and what your payment system is encouraging staff to do (accel 2008)
There are several Impacts of culture and organizational strategy on employee motivation and reward management . A theoretical background by Herzberg (1966) looked at the job satisfaction and dissatisfaction in order to understand the key drivers for motivation among employees and therefore proposed two factors. The first group of factors is the motivation factors, related to the sense of achievement. The second group is the hygiene factors, which refer to components such as job security, conditions prospective at work, salary and interpersonal communications at work. In order to avoid dissatisfaction, the organization will need to focus on the improvement of the hygiene factors (Lundberg C. et al., 2009). Additionally, the satisfaction can only be increased by motivators (Behling et al., 1968). Vroom (1964), in his theory, looked at motivation as a process in which each employee can choose between the available alternatives for them and which are more likely to lead to those rewards that they desire. The Vroom's theory consists in two outcomes; first of all productivity and turnover and the second one rewards or punishment. According to Kermally (2005) Vrooms theory consists of two expectancies. One of them is effort performance that greatly reflects the employee's perception of how hard he needs to work to achieve the desired outcomes and the probability of achievement. The other expectancy is performance-outcome, focused on the behavior of employee. These theories show how motivators support the achievement of overall goals through the satisfaction of employees. Motivators have to be supported by HR policies (Dressler, 2010)
Importance of human resource strategy activity/function
There are various benefits that are gained by a firm in its human resource strategy. One of the main benefits of strategic human resource management is that it helps a company to realize its strengths and weaknesses (Buzzle, n.d.). This is important to a company as it assists in making the best decisions on sensitive matters. In today's world, It is very important for every organization to be aware of its weaknesses and strengths as it will determine their success. Awareness of potential threats is also very important to the firm as it will help in reduces risks in the future. According to Ahluwalia, strategic human resource management is important in assessing the environmental uncertainties (2008).
Another notable contribution of strategic human resource management to the firm is that it helps in development and retention of competence among the employees. The level of employee's competence is the major criteria which determine the productivity of the employees. An organization can reduce its operational costs if it manages to maintain a high level of competence for its employees. In other words, the competence of employees will contribute in improving profits by reducing the cost margins. Ahluwalia asserts that strategic human resource management has a significant impact in increasing the productivity of employees.
Strategic human resource management can also be very important in helping multinational companies in gaining global competitive advantage (Schular & Jackson, 2007, p.140). This enables the domestic companies to build their competitive advantage over their global counterparts. This again has a benefit of leading a firm to improvement in the profit margins since the organization can be able to reach its customers fast without incurring much.
In conclusion, strategic human resource management is a key factor which determines the profitability of an organization. Despite the fact that several researchers has carried research on this field, there is no much attention given on examination of the contributions of strategic human resource management on labor productivity.
This study has shown that strategic human resource management vital in improving the general quality of the employees as well as streamlining the structure in an organization. By so doing, it reduces the costs of production consequently increasing the profit margins.