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This is a report detailing the importance of a Human Resources Department (“HR”) within a company and defines the role it plays in strengthening the organization. This report explains the role of a strategic HR in an organization, barriers to a strategic HR, and mechanics of a strategic HR. This report is useful for small businesses or other entities that want to learn more about strategic HR placement within their company.
This is a report detailing the importance of a Human Resources Department (“HR”) within a company and defines the role it plays in strengthening the organization. This report explains the role of a strategic HR in an organization, barriers to a strategic HR, and mechanics of a strategic HR. This report is useful for small businesses or other entities that want to learn more about strategic HR placement within their company. Strategic Human Resource in Strengthening the Organization 3 Table of Contents INTRODUCTION .......................................................................................... 4 MECHANICS OF STRATEGIC HR: ............................................................ 5 Role of Strategic HR in Organization ............................................................. 7 BARRIERS TO STRATEGIC HR: .............................................................. 11 CONCLUSION:............................................................................................ 12 References ..................................................................................................... 13 © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 3 4 INTRODUCTION The report is about how important HR is in any company and what role does it plays in strengthening the organization. Globalization/Internationalization and its effects can be seen everywhere in the modern world. It may be defined as technological, constant economic, cultural, political and social integration of the whole world. By the free flowing technology and HR strategies all around the world symbolizes globalization in a very structural and productive way. A competitive business may be seen in today's world irrespective of the boundaries between the countries. In order to strenghten the organization and its policies a special attention should be paid to human resourcing. Strategic HR can solve many issues within the organization. Strategic HR is a process to solve and address business issues and directly participate into the main and basic long- term goals and objectives. Corporate social responsibility, head count reduction, outsourcing, mergers, acquisitions and brandings, talent planning and succession, enhanced shareholder value, increased performance, maximization of efficiency and productivity of an organization are some of the areas where strategic HR plays an important role, as a result better supervising in these areas results in strenghthing the organization. This report also tells the role played by HR in an economy of knowledge-based as a human capital steward, knowledge facilitator, rapid deployment specialist and relationship builder and more helps the organization to strenghthen. Strategic HRM includes a bunch of internal policies and after planning everything is implemented to make sure that HR of the organization contributes to achievement of company's goals and objectives. Practice of strategic HRM is macro oriented, long term focused, proactive, views HR as an asset ,focuses on the implementation of policies ,not at all expensive, develops relations to enhance organizational performance and focuses on © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 4 5 the synchronization of HR with the firm's strategy which means competitive advantage is achieved (Armstrong,2006). MECHANICS OF STRATEGIC HR: As globalization is taking place the world is becoming one single place where you can do your business irrespective of the borders. As a matter of fact globalization is becoming a threat for all the multinational companies as due to internationalization competition is increasing day by day and it is more difficult now to further improve the quality with nominal rates. The worldwide HR function is the area whose involvement is to be assessed. In the past 50 years HR strategies have been developed radically and showed dramatic changes in organizations in 1980's. New business thinking and market situation of the labours depend upon the changes in strategic HR. According to research it is said that increased strategic HR policies will be required in order to build ethical and cultural leadership within the organization. According to (Armstrong, 2006), today's most critical and crucial goal is to strenghthen the HR strategy. According to past researches it has been proved that a company' human resource is the basis of ultimate success or growth and sustained competitive advantage. If importance is given to the employees in any organization, many strategic HR departments consider the managerial competencies and capabilities of the most important goal. Such creative strategic operations distinct with conventional HR departments which are responsible to control and manage human costs considering them liabilities for example benefit expenses and incurring In the past years the role of human resource has been changed allot, the conventional HR has been transformed into strategic HR which plays a vital role in strenghthing the organization in the following ways: © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 5 6 By emphasizing more on partnerships with both external and internal customers rather than paying importance on relations with the employee, Strategic HR also plays role in change initiator & leader in strengthening the infra structure of organization Main job of strategic HR is participating in corporate strategy and not just in admin support. Strategic HR is more integrated than reactive, fast, and proactive and fragmented in its relation with other functional sectors. Managers of strategic HR do not wait for orders or directions, as they have to be spontaneous. They keep on doing their research, homework and propose solutions and guidance strategies Strategic HR is more preventive rather than punitive as well as progress in orientation. The strategy views the workers or employs as their asset which should not be waster in order to strenghten the organization. Strategic HR aims to develop a work place with favorable, conductive and motivation for workers to do things right the very first time. It aims at finding the solution of the problems rather than punishing somebody for the mistake (Armstrong, 2006). Instead of driving the input strategic HR is totally output driven. The personnel of strategic HR are more result oriented. Despite that output results are not very easily measured. It keeps on finding innovative ways directly or maybe indirectly measure these more accurate and precise metrics of its effectiveness and success (Armstrong, 2006). Strategic HR lets synchronizes corporate objective with performance criteria systems, strategies and goals. Criteria of performance of employees and managers are strategic HR's job to find out in order to contribute objectives, strategies and goals. Strategic HR claims to change the behaviour as well as attitude of the employees by providing them with correct appraisal and incentives. It will motivate the employees and will direct their behaviour towards attendance, teamwork, neatness and boss satisfaction- (Dixit, 2009). © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 6 7 Strategic HR's job description is flexible, broad, teamwork and cross-training. Its key investments are knowledge and people (Armstrong, 2006). Role of Strategic HR in Organization Strategic HR plays a very vital role in strengthening the organization by a number of ways: CSR (Corporate Social Responsibility) in organizations depends upon the strategic HR personnel. All the corporate governance is covered by corporate social responsibility. It is about the ethical way through which companies conducts their business and taking their social part responsibility. Without strategic HR, CSR involves many kinds of risks .CSR is a very good opportunity for the companies and to enhance their strategic HR within and outside the organization and making a good reputation in the market. Companies need to work at their strategic HR policies in order to meet the corporate social responsible and show their commitment to the society. Social Corporate Responsibility can be fulfilled by combining or integrating the process into recruitment, employer branding, appraisals, retention and attraction, satisfaction and motivation, internal communications, rewards, training and coaching etc. CSR should be indulged in cultural and social activities in order to make a change in actions and attitudes, and the co operation of the team is crucial and critical to success. Strategic HR helps communicating and implementing the ideas, behavioral and cultural change within organization and policies with proper implementation. In order to maintain good relations with the stakeholders effective delivery is very important which can be achieved through CSR. Through strategic HR, CSR may be given realibilty, credibility, synchorization to business and trustworthiness (Armstrong, 2006). Strategic HR is very important in order to increase the productivity and performance of organization and employees, employee and customer satisfaction with enhanced © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 7 8 value of shareholders through efficient and effective management of retention,staffing,attraction and turnover through selection and recruitment of the employees with both culture and strategy of any organization ,through recognized capital for increased retention and attraction, through combined or integrated HR programs and policies that apparently follow strategy of any organization through change of facilitation ,adaption and transition through a dynamic and flexible organization and with focus on demands of customers, important ,key and quality- Jeffrey A. Mello 2008. The success of Merger and Acquisitions totally depends on the people who run business, their ability to carry or execute improvement, creativity and innovation. Strategic HR plays a vital role in the popularity of Mergers and Acquisitions. As globalization takes place, companies find new methods to improve strategic HR in order to gain more popularity and revenue out of their organization. . By organizing and managing the activities, strategic HR plays important role by advising the upper management and giving the right behaviour to the employees of the organization. By practicing and identifying the weaknesses within oneself, helps the company in its growth, develop and create new and innovative competencies (Dixit, 2009). In Employer Branding strategic HR plays a very important role. It is a difficult task to build an employer's image and it starts within the organization. If people just wants to join the company on the basis of the company's image then of course you are a proffered employer. Apart from strong business prospects and monetary policies, a prefer employer develops good reputation for himself and his organization and people show respect to its company. Strategic HR is very important in order to create a corporate culture in the work place Strategic HR also includes the management of human capital. HR personnel work with the higher management to assess them in decision making and creating ground rules for the organization. Strategic HR is like a mirror to the organization which keeps on giving them advices and show where there company stands. All the multinational companies have realized that how important © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 8 9 strategic HR is and also that it plays the main role in strategic capital management - (Dixit, 2009). Outsourcing is one of the major function of strategic HR. Strategic HR personnel outsource their people, processes and technology. Basically outsourcing improves the level of productivity, enables access to expertise, increases efficiency, cut costs, provides better and additional services, and keeps up to date with the latest technology and shares risk. In recent years strategic HR evolved really quickly, not just into the administrative work but also became a partner in decision making of the business of an organization. Strategic HR has now become the business leader for example ROI technology savvy. There is no particular reason why people outsource technology or people as they differ from organization to organization. Some companies are in need of good people, so some in seek of advanced technology (Dixit, 2009). In knowledge based economy strategic HR plays a very vital role as Human capital steward. Strategic HR is considered to be a knowledge facilitator. Knowledge based economy becomes the culture that has the power to accept the change. Human capital steward with strategic HR develops a culture or environment in which employees contribute ideas, skills and energy out of their own will voluntarily. Knowledge facilitator enables employees to provide with the necessary information which will help strengthening the organization and creates culture and structure where individuals can work together and simultaneously creates networks that focus on strategic goals. Strategic HR creates flexible, fluid and adaptable systems and structures- (Mello, 2005) Strategic HR bears the impact of transition to Crisis Management in initial stages as so much of the transition may affect people at different level of the company (Dixit, 2009). © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 9 10 Strategic HR also plays an important role in Head Count Reduction by how good or how fast it works and how gently it is carried out. Strategic HR helps find out what is there to be done and then help finding out the solution. Strategic HR's fairness, integrity and objectivity are tested. Strategic HR usually faces a dilemma as they are valuable assets but don’t have the proper budget to support them. Innovation and creativeness is required in order to attract them. Organizations need to cut down their budget by 20% to explain and demonstrate their leadership (Dixit, 2009). Talent planning and succession also comes in strategic HR field. Recession is the best time to analaylise that the deserving people are in the right place. Strategic HR doesn’t keep a person who knows no worth of money and does not make any mistake elevating somebody who did not show the potential. Strategic HR looks at the long term talent investment who they think will build the future (Dixit, 2009). Keeping the morals’ high of the employees is considered to be a job of strategic HR during the rough time. A slow developing economy produces discouraging environment by TV, blogs and newspapers. Strategic HR makes sure that the workers or employees are provided with correct and accurate information on time by the efforts of the company to survive in the market and achieve success in the new environment (Dixit, 2009). Strategic HR business partners depends on five traits which are strategic contribution- creation of strategy, Personal credibility-well explained policies, Business knowledge-knowing the inns and outs of the business,HR delivery- providing internal customers,HR technology- technology to improve organization (Mello, 2005). Strategic HR looks after the compensation of the employees which in normal HR services is given on the basis of profit. In recession cost cutting the main task of HR personnel and compensation is only based on four principle indicators which are operating profit, cash, customer satisfaction and working capital. Strategic HR © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 10 11 believes in giving proper compensations and bonuses in order to discover efficiencies in profits- (Dixit, 2009). Training is one of the most important parts that strategic HR has been playing over the years and it’s increasingly becoming the key function of HR department but in many organizations it has been seen that training is under rated and not given the proper importance. Training provides the employees with proper attitude and skills which can be applied to work in order to get efficiency in work. While training development environment and chances of growth within the organization is very important. Strategic HR provides visual aids and other stuff to train the employees. Strategic HR provides chances and opportunities to the employees within to become trainers in order to boost their confidence level and also because they are fully aware of company's policies and problems (Dixit, 2009). After reading all these points there is no doubt that strategic HR plays a vital role in the growth of any organization and contributes a lot in order the strenghten it. BARRIERS TO STRATEGIC HR: 1. Way of thinking or short termed mentality on the existing performance (Mello, 2005). 2. Lacking in strategic thinking (Mello, 2005). 3. No praise or appreciation for HR contribution (Mello, 2005). 4. Underestimating the role and power of HR manager (Mello, 2005). 5. Outcome of HR personnel is not given proper credit (Mello, 2005). 6. Considering human asset as an investment of higher risk (Mello, 2005). © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 11 12 7. Lack of incentives (Mello, 2005). CONCLUSION: To conclude it would be right to say that strategic HR plays a vital role in strengthening the organization through more than one ways with both external and internal customers rather than just emphasizing on relations with the employee, playing roles of transformational, in order to strenghthen the organization changing initiators and leaders and by taking complete part in business decision making rather than just administration support. Strategic HR is more fast, proactive fragmented in terms of relationships ,integrated, its preventive rather than corrective ,development oriented ,output driven, synchronizes performance with corporate goals, its flexible, broad, team oriented and basic investments are knowledge and people. Similarly Strategic HR also plays a very important role in CSR(Corporate Social Responsibility),count reduction, branding of the employer, outsourcing, acquisitions and mergers, talent planning and succession, enhanced performance, increased shareholder value, maximized efficiency and productivity of an organization , etc has made strategic HR an important aspect needed to strengthen th organization. Strategic HR is not just a support function or backroom but it is the main feature of any organization which handles sales, marketing and finance. Other things remain equal like physical, financial and product assets, customers or people always make the difference trying to compare organizations or companies. In order to make this difference happen strategic HR plays a vital role. © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 12 13 References 1. Armstrong, Michael (2006). A Handbook of Human Resource Management Practice (10th ed.). London: Kogan Page. ISBN 0-7494-4631-5. 2. Dixit, Saurabh, 2009. Personnel to Strategic HR to Talent Management. Posted by sd in Human Recourses and Talent Management, February 5, 2009 3. Mello, Jeffrey A., n.d, Strategic Human Resource Management. South-Western College Pub; 2 edition January 6, 2005 ISBN-10: 0324290438 © Copyright 2010 Docstoc Inc. registered document proprietary, copy not 13 14
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