HRM Strategic Integration and Organizational Performance
During the past decade, organizations have experienced the pressures of innovation, globalization, speed, international competition, adaptability, alternate products and services that are increasingly available at lower costs. Furthermore, slower growth and declining markets have forced some companies to reduce their costs and focus on human assets to deliver profi table results. How can an organization be created that adds value to its clients, investors and employees? In this scenario, HRM is increasingly seen as one of the key functions in the development and implementation of strategic responses to this pressure.in this essay will talk about the emprtances activities of human resurce management.
Recruitment and selection strategic integration may be defi ned as the pro-cess of identifying and selecting potential candidates based on their skills and knowledge which are planned and implemented for the purpose of achievement of strategic goals of the organization.important element in recruitment and selection is the conduct of staffi ng process. The staffi ng process is generally driven by HR experts; however, the purpose of the staffi ng is to fulfi ll the requirements of business. The skill levels required from each new recruit can be judged only if the line managers are involved in the entire recruitment and selection process. Budhwar and Sparrow suggest that in business strategy implementation, the involvement of line managers in the entire staffi ng process, that is, drafting of job descriptions, setting section criteria and being on the panel of recruitment is vital for ensuring recruitment and selection to meet business needs. Therefore, for a successful recruitment and selection process to happen in an organization, the line managers need to be the owner of the recruitment and selection process along with HR playing a facilitator role.
Training and development is a major human resource management (HRM) function. In the current war for talent acquisition and retention, the training and development has become a critical success factor and as a means of aiding or substituting for recruitment and fulfi lling skill requirements in the light of technological change in every organizations The training and development of employees at all levels within organizations are now considered a vital component in maintaining competitiveness in the international arena as training and development provides a means by which a number of key organizational outcomes can be achieved and some most common cited in literatures including quality, employee empowerment, teamwork and multi-skillingTraining and development may be defi ned as a planned effort to facilitate the learning of job-related knowledge, skills and behavior by employees and is aimed at relatively permanent change in behaviors and skills that occurs as a result of experience and from reinforced practices.
Involvement of HR in business strategy formulation is a fi rst contributing factor of reward and compensation strategic integration. Empirical evidence shows that high involvement of HR in organizational strategy is strongly related to HR effectiveness . Human resources involvement in business strategy formulation is possible by three ways: fi rst, presence of HR representative on the board of directors; second, HR specialists’ involvement in business strategy formation process team and third, the existence of informal consultation of HR . For example, when HR is represented at board level, it would provide a formal mechanism of consultation while major organizational decisions related to reward and compensation are taken. Similarly, in strategy formulation phase, it is important that HR executives or experts are integrally involved in strategy team in order to provide HR inputs into business strategy. he greater the extent at which HR managers or experts are allowed to let reward and compensation matters infl uence organizational strategy, the more likely it is that effective, internally consistent and strategically focused reward and compensation polices are designed which subsequently would help achieve business goals
identifi ed three factors that help HR input into business strategy, and they are, fi rst, the presence of HR representation on the board of directors; second, HR specialists’ involvement in business strategy formation and third, the existence of a formalized HR strategy. These indicators are equally applicable in the ER strategic integration approach. For example, the presence of HR on board of the company would mean that a formal mechanism of consultation exists while taking major organizational decisions related to ER.
Human resource management also involves considerable change in the role of line managers. A recent survey of 15 companies found that line managers were becoming far more important in the management of HR. Their responsibilities can include allocating individualized pay awards, appraisal, training and development, motivating teams, on-the-job coaching, reducing costs, improving quality, responding to customer needs, continuous improvement and deploying labour. Line managers are expected to develop into ‘business managers’ with an awareness of the total organization
Many opportunities are rather transient in today’s dynamic environment; making the HR manager an integral part of business strategy may serve to slow the responsiveness of the organization resulting in poor performance.A fi nal possibility is that the relationship between integration and performance should be examined within the context of a con-fi gurational perspective. Organizational confi gurations can be defi ned as groups of organizations that are alike within and different between groups along important variables . While most studies, including this one, provide evidence regarding the direct association between an independent and a dependent variable, a confi gurational study would focus on whether or not performance varies across different confl uences of important variables; one of which would be integration .ConclusionThis research found that HRM strategic integration is possible if HRM practices and the approach to business strategy use various means to make strategic integration relevant to overall HRM integration. This research contributes to SHRM by examining the level of HRMstrategic integration and its relative effects on organizational perfor-mance. The research also found that higher integration of HRM does contribute positively to organizational performance and results in higher performance and vice versa. However, the level of HRM strategic integration has virtually no or less impact on the control or retention of employees by reducing the rate of employee turnover. That is all the organizational performance measures are not necessarily the results of HRM strategic integration. However, to remain com-petitive with other fi rms, HRM strategic integration emerges as an appropriate competitive strategy for every business.