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An Introduction Of Hrm And Shrm Business Essay

Paper Type: Free Essay Subject: Business
Wordcount: 4427 words Published: 1st Jan 2015

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A lack of clear direction prevails in global HR research which is expressed by scholars and practitioners across a wide front as a concern for the profession, including the resultant role personnel ought to play in organizations’ objective achievement (Goshal 2005; Hendry 2003; Holbeche 2006; Morris, Snell & Lepak 2005; Meisinger 2005).

Various researchers have pointed out during the last few years (Browning & Edgar 2004;

Becker, Huselid & Ulrich 2001; Birchfield 2002; Brewster , Dowling , Grobler, Holland & Warnich 2000; Mayrhofer & Brewster 2005; Nel 2007; Ruona & Gibson, 2004; Storey, 2001) that a revised approach to Human Resources Management (HRM) is evolving. This includes the strategic role and functions of the HR profession as business partners in organizations and the way they ought to direct personnel to optimize their contributions to the organization. Transformational leadership expressed in terms of the high-level capabilities and management skills are also assuming a significant place in the future of the HR profession in organizations as well as the ability to add value.

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Human Resource Management is an approach to the management of employees, it involves the process of employing people, developing their skills/capacity and utilizing their services. The traditional aspects of HRM methods are more towards the selection of recruitment process and imparting training. This HRM process does not have any specific riles for different areas like recruitment, training and utilizing the services.

SHRM is defined by Little (2003) as the process of achieving the best possible alignment of personnel behavior with the organization’s strategy and hence align with the profit and loss in the short and long term. The personnel behavior-strategy relationship is dynamic because it changes as the environment changes and as the precise goal and performance requirements of the strategy emerge.

As the term itself denotes, Strategic HRM deals with strategic aspects of HRM. Unlike HRM, Strategic HRM mainly focuses on the programs with long-term objectives. Though HRM and Strategic HRM focus on increasing employee productivity, Strategic HRM uses many strategic methods. Unlike HRM, Strategic HRM uses a more sophisticated method for improving the overall employee motivation and production as well as it focuses on the sage of more systematic tools to achieve focus on partnerships with internal and external customers through the development of long term goals.

Little (Little 2003) has argued that the organization is independent of personnel it then

follows that the central questions are: First, since the organization is separate from personnel, then what are the factors intrinsic to the organization that can be identified as most influencing the behavior of personnel? Second, once the intrinsic organization factors have been identified, how do they link to influencing behavior? Third, once identified, how can the factors intrinsic to the organization that most influence behavior then be better managed to improve human performance and so improve alignment of personnel behavior with the goals and aim of the organization? Fourth, what are the intrinsic psychological factors personnel bring to the organization that will impact management’s effort at improving the alignment of behavior with organization goals and aims?

Introduction of how the role of HR in the 21st century is becoming increasingly vital.

HR Departments are increasingly expected to operate as a business within a business rather than as a disconnected and isolated set of HR Practices. As such, like many business, the HR Department must have a vision of strategy that defines the way they are headed, a set of goals (objectives, outcomes and deliverables) that focus the priorities for the work and investment essential to carry out this vision and an organizational structure for the HR to accomplish these goals.

The new focus for the HR department is to create value (Ulrich and Brockbank,2005) for the key holders. The goals and outcomes of the HR Department has been well documented, the value of HR contribution has traditionally been measured by the quantity of cost of activities (eg: How many people hired over period of time, training given to the employee or the financial cost of delivering employee benefits)

Instead of focusing on the relatively easy to measure activities of staffing, training and other functional operations, HR departments are better assessed by the outcomes created that support the companies objectives. These outcomes generally may be defined as the capabilities an organization requires for its strategy to succeed on a sustained basis (Ulrich & Smallwoord,2004)

The diversification of the HR Departments role towards adapting to the 21st century can seen through the requirements of the organizations for competitive superiority and speed to market, collaboration, cultural exchange, efficiency, service, innovation, accountability or even leadership branding. These and other capabilities represent the organization for what it is known for and the identity of these practices can be enhanced by the HR practice is aligned to the desired focus of the company.

With a HR vision of value and outcomes of capabilities, a HR Department can now focus its attention to how it can and should be organized to deliver the vision to reach the desired outcomes (Chirstensen,2005) The diversification from traditional HR practices is a major requirement for companies to adapt to the changes and be focused on the mimicking of the business organization on which it operates and from there it should focus on adopting a concept to reflect the vision and direction of the company in order to stay in line with the charter of the company itself.

Introduction of the organization

Duty Free Shop (DFS) in Malaysia are licensed under Section 65D, Customs Act 1967. DFS typically operates at international airports, seaports, downtown and at borders. DFS is set up for the purpose of promoting the tourism industry in Malaysia, especially to foreign tourists. Foreign tourists as well as eligible local tourists are able to purchase goods free of duty and GST at any DFS

The QM Group of Companies offers a broad assortment of premier liquor, wines and spirits including prominent global brands. Its extensive variety of goods is gladly presented at its diverse duty-free outlets at Bukit Kayu Hitam, Padang Besar as well as in Langkawi. The QM Group of Companies also offers numerous other premier duty free products such as stylish apparels, perfumes, cosmetics, cigarettes, tobacco, confectionery, souvenirs etc as well as locally finished handicraft.

The Qm Group of Companies has also diversified into private bonded warehousing operations with the inauguration of its first private bonded warehouse facility at Prai, Penang offering abundant storage, distribution and logistics services as well as other value adding activities.

The QM Group of Companies, led by its main corporation – QM Sdn Bhd is a fast growing stable of dynamic companies with its core focus involved in the duty-free business dealing in wholesale and retail. QM Sdn Bhd is today an recognized industry leader and key player in the country`s duty-free industry. The QM Group of Companies has been able to build its achievement upon its decades of industry knowledge, proven reliability and stringent vow to giving only the best quality products and services to both visiting tourists and business travelers to discover a truly new dimension in duty-free shopping.

Evaluate how the HR practitioner should proceed in ensuring that alignment between business and HR strategies is effective.

The HR professional has more challenging roles to perform under SHRM – the emergent business partner model. Unlike the traditional HRM, which is transactional in nature and is concerned with administrative activities, SHRM is a value-added core responsibility that aligns the HR system, policies and practices with business strategy to gain sustained competitive advantage for the firm. In performing the new challenging roles, the HR professional must think outside the traditional organizational box of HRM and develop a more systematic and radically different approach to manage the human element to effectively support the firm’s business strategy formulation and implementation. For successful implementation of the business partner role, the HR manager needs to understand the company’s business direction and its competitive position in the market place. Apart from this, to become a successful strategic partner, the HR manager must have competencies that have to do with the business issues involved in strategy and strategy development, and ability to contribute to organizational design and change management (Lawler, III and Mohrman, 2003).

The HR function, according to Rowden (1999) must change from a staff function that delivers prepackaged HR services to a service that helps managers create customized strategic plans to influence the effectiveness of company performance. The HR manager can play an important role in the formulation of strategy and providing the human resource required to support various strategies and strategic initiatives in the organization. He provides the leadership role in developing the human capital and the necessary capabilities to enact the st

rategy and drive the implementation and change management processes to success (Lawler III & Mohrman, 2003). Good human capital management is a prerequisite for successful execution of business strategies.

According to Ulrich (1998), the modern HR professional must perform four complementary roles. The first role, administrative excellence, is important because it is an immediate way of contributing to the overall efficiency of the organization. As administration expert, he must rethink how work is done throughout the organization. The second role HR professionals must realize is that of employee champion. The HR manager must play the crucial role of employee advocate. He should be the employee’s voice in management discussion, offer employee opportunities for personal and professional growth; and provide resources that employees need to meet the demands put on them. The new role might also involve suggesting, that employees be given more control over their own work schedules. This is the issue of employee empowerment.

Two additional roles the modern HR professional must realize are those of strategic partner

and change agent. Being a strategic partner calls for an ongoing evaluation of the alignment between current HR practices and the business objectives of the firm, and a continuing effort to design policies and practices that maximize this alignment. HR practitioner should be held responsible for defining an organizational architecture – that is, identifying the organization’s way of doing business. Such framework as looking at the organizational components – strategy, structure, rewards, processes, people, style and shared values may be adopted. This new knowledge will allow HR to add value to the executive team with confidence. Being a change agent the HR manager must play a key role in implementing and managing organization change, assessing potential, sources of resistance to change, and collaborating with line managers to overcome these barriers. The HR professional’s role as a change agent is to replace resistance with resolve, planning with results and fear of change with excitement about its possibilities. These last two roles – strategic partner and change agent – are of particular interest to us because they represent the emerging strategic dimension of HR function – SHRM.

In addition to the above roles the HR practitioner needs to be a model and take on the specific

role of integrating people strategies with business strategies in a way that advances the bottom line. Metzler (1998) adds that: the HR manager must play an active and guiding role in enabling the organization to choose its human resources well, invest in these people, support that growth and respect their needs, while fostering innovations needed to achieve the strategic business objectives. The HR professional operating under the SHRM system must chart roles that include early and active involvement in key strategic business choices. He must become the partner of decision makers in the organization, and sharing accountability for organizing and performing work. He must carry out effective monitoring to see that everyone in the organization, and at every organizational hierarchy, stay focused on share strategic priorities. He must challenge old ways and constantly promote innovation to enhance corporate performance and the firm’s competitiveness.

Critically analyze how Human Resource Management achieves competitive advantage and what factors limit Human Resource Management’s ability to act. Use the current organizational practices as reference.

Johnson (2000) details, best practices or high performance work practices are described as HR methods and systems that have universal, additive, and positive effects on organizational performance. These practices maximize their influence on Company’s performance through increased customer satisfaction, productivity, innovation and development of favorable reputation, HR planning, Recruitment & Selection, Training and development, compensation, Performance management and employee relations are some such practices

Why are employees in some companies happy to stick with the company while others look for a change? The reason is that some companies know how to take good care of their employees and provide a working environment that helps them retain their identity, while proving themselves and growing along with the company. HR practices encourage the growth of the organization as employees after all play a major role in the well-being of a company they deal with enhancing competencies, commitment and culture building

Pfeffer (1998) proposed HR practices which according to the literature, can be expected to influence the firm’s performance. In his seminal work, Pfeffer (1998) proposed the following seven HRM practices:-

(1) Employment Security

(2) Selective Hiring,

(3) Self-managed teams and Decentralization of Decision making

(4) Comparatively high compensation contingent on Organizational performance,

(5) Extensive Training,

(6) Reduced status distinctions and barriers, including dress, language, office arrangements, and wage differences across levels, and

(7) Extensive sharing of financial and performance information throughout the organization.

A number of contemporary and good HR practices have resulted in effectively managing human resources, managing attrition problems and keeping them happy. Some of the best HR practices that are worth mentioning that have helped organizations in the creation of a highly satisfied and motivated work force may be identified as:-

Selective Hiring- practice can ensure that the right people, with the desirable characteristics and knowledge, are in the right place..

Training and Development- may be related to firm performance in many ways. Firstly, training programmes increase the firm specificity of employee skills, which, it turn, increases employee productivity and reduces job dissatisfaction that results in decrease in employee turnover

Job Security- creates a climate of confidence among employees which cultivates their commitment on the company’s workforce. This develops a feeling of confidence and employees commit themselves to expend extra effort for the company’s benefit.

Flexi-time- Flexi-time is a practice, wherein an organisation gives its employees the opportunity of a flexible working hours arrangement.

Performance-linked Incentives and Bonus- Every good performance is appreciated in the form of a pat on the back, bonuses or giving some other compensation for a job well done. The incentives can be implemented at the individual as well as the team level and it has been seen that this works wonders in getting the best out of the employees and boosts their morale.

Performance Evaluation- A good evaluation and a fair evaluation system links the employees’ performance to the business goals and the priorities of an organization.

Highlight Performers- High performers get better results, faster and closer to the targets. Organizations create profiles oftheir top performers and makethem visible through their intranet, display boards etc.

Open House Discussions & Rewarding Ideas- Employees are the biggest source of ideas. Successful organizations nurture ideas and they understand that employees who are actually working and know the business can provide the best ideas. Through this system, talented employees are identified and developed. DLF and Infosys have implemented the I4 Teams ( Ingenious, Idea, Incubation & Implementation).

Rewards and Recognition- recognition of talentis highly important, the primary goal of rewards and recognition is to improve performance of employees.

Non-monetary recognition can be very motivating, helping to build feelings of confidence and satisfaction. Another importantgoal is increased employee retention and encourages others to give their best.

Coaching and Mentoring – Organisations use coaching and mentoring to train managers

to address specific skill deficits, enhance performance and grow into expanded leadership roles.

Cross-Functional Training- Organisations foster and harness talent by imparting in-house cross functional training to make their professionals multi-skilled and multitalented. Many organizations encourage their employees to be multi-skilled and add value to other functional aspects as well.

Employees Assistance Programmes-These programmers are offered by many organizations in the corporate sector for the employees’ benefit. Every employee is challenged by personal problems and concerns. The EAPs are intendedto help employees deal with their personal problems that might adversely impact their work performance. Clearly Defined and Measurable KRAs- KRA is an acronym for `Key Results Area’. Knowledge Sharing -Knowledge sharing sessions are periodically organized by the organizations to widen knowledge base of their employees and improve their effectiveness.

Work Environment- A safe an]d happy workplace makes the employees feel good about being there. Each one is given importance and provided the security that gives them the motivation and incentive to stay.

Providing equal employment opportunities for all, value of trained human resource, providing flexibility to employees especially to women at various life stages, sabbatical from corporate life, and extended maternity leave promoting practice of entrepreneurship by employees within the organization. Human Resource Management has taken a leading role in encouraging CSR activities at all levels. Companies like Wipro inculcate CSR values amongst its workforce right at the beginning during the induction process.

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The focus and attention of HRpractices today are on creating HR policies based on trust, openness, equity and consensus .Creating conditions in which people are willing to work with zeal, initiative and enthusiasm; make people feel like winners. Fair treatment of people and prompting redressal of grievances would pave the way for healthy work-place relations, prepare workers to accept technological changes by clarifying doubts

External factors affecting Human Resource Planning

Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management.

1. Employment :-

HRP is affected by the employment situation in the country i.e. in countries where there is greater unemployment; there may be more pressure on the company, from government to appoint more people. Similarly some company may force shortage of skilled labour and they may have to appoint people from other countries.

2. Technical changes in the society :-

Technology changes at a very fast speed and new people having the required knowledge are required for the company. In some cases, company may retain existing employees and teach them the new technology and in some cases, the company have to remove existing people and appoint new.

3. Organizational changes :-

Changes take place within the organization from time to time i.e. the company diversify into new products or close down business in some areas etc. in such cases the HRP process i.e. appointing or removing people will change according to situation.

4. Demographic changes :-

Demographic changes refer to things referring to age, population, composition of work force etc. A number of people retire every year. A new batch of graduates with specialization turns out every year. This can change the appointment or the removal in the company.

5. Shortage of skill due to labour turnover :-

Industries having high labour turnover rate, the HRP will change constantly i.e. many new appointments will take place. This also affects the way HRP is implemented.

6. Multicultural workforce :-

Workers from different countries travel to other countries in search of job. When a company plans it’s HRP it needs to take into account this factor also.

7. Pressure groups:-

Company has to keep in mind certain pleasure. Groups like human rights activist, woman activist, media etc. as they are very capable for creating problems for the company, when issues concerning these groups arise, appointment or retrenchment becomes difficult.

Elaborate on what HR strategies can be implemented in this organization, to meet or exceed employees’ psychological contract in SOME (two or more) differing HR areas like HR planning, Reward Management, Performance Appraisals, Career Development, Recruitment, Training and Development and Industrial Relations.

Psychological Contract

A psychological contract represents the mutual beliefs, perceptions, and informal obligations between an employer and an employee. It sets the dynamics for the relationship and defines the detailed practicality of the work to be done. It is distinguishable from the formal written contract of employment which, for the most part, only identifies mutual duties and responsibilities in a generalized form

Selective Hiring

-The respondents were also asked to rank these practices in order of importance given to them by the organizations to each of them. 85% of the respondent agreed that Selective hiring was given most importance by their employers. Selectivity in recruitment is an important practice and is undertaken by almost every organization. This perhaps is the first step in achieving edge over others. Organisation follow the approach of selecting the right person with the right attitude and personality make up to provide the right kind of abilities and capabilities to take the organization toward higher growth. This is an aspect of talent retention as it implies matching a person’s inherent skills, traits and personality to the jobs. Moreover when employees go through a rigorous selection process, they feel that their knowledge, experience, abilities and capabilities have got them the jobs in the organization. They feel valuable and high responsibility for performance is created , and the message is that person matters.

They are selected as they possess the desire to succeed and have the capacity for growth, learning and develop skills and capabilities beneficial to the organization.

Reward Management

99% of the respondents agreed that good performance should be highlighted as it is motivating and leads to better performance.People are motivated by recognition and fair treatment. Higher the motivation higher will be the performance. When this performance is clubbed with adequate rewards employees are further motivated to perform. Such practices induce other employees to traverse on the same route of performance and reward, taking their firm on a path of growth and gaining competitive advantage. This dictates that people are responsible for enhanced levels of performance and profitability. However rewarding performance should be fair and equitable based on and linked to the performance of an employee

Training & Development

– 60% rated training and development as next important activity followed by knowledge sharing and job security in the order. However all the respondent agreed that training was extremely essential for their growth and development. 92% respondent that training should be need based and specific to the employees need and requirements. Worker autonomy, self managed teams, and even a high salaries are practices that equip and provide employees to make changes and improvements in products and processes . However, training will produce good resultsonly if the trained workers are permitted to employ their skills. If employees are to be given more information about operations, they need skills in employing that information to diagnose problems and suggest improvements. Training is an attempt to improve current or future employee performance by increasing an employee’s attitude or increasing their capabilities. Training provides the opportunity to raise the profile development activities in the organization. Training increases the commitment levels of employees and reduces the perceived growth inequality. Development reduces the turnover rate of employees provides advancement opportunities and also reduces absenteeism


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