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STRATEGIC HUMAN RESOURCE MANAGEMENT

Contents

INTRODUCTION .......................................................................................................................... 2

Task 1: Understand how the strategic management of human resource contributes to the

achievement of organizational objectives ................................................................................. 2

1.1 Explain the importance of strategic human resource management in organizations. ....... 2

1.2 Assess the purpose of human resource management activities in an organization ........... 3

1.3 Evaluate the contribution of strategic human resource management to the achievement

of an organization’s objectives .................................................................................................. 4

Task 2: Be able to develop human resource plan for an organization ...................................... 4

2.1 Analyse the business factors that underpin human resource planning in an organization.

.................................................................................................................................................... 4

2.3 Develop the human resources plan for an organization ..................................................... 5

2.4 Critically evaluate how a human resources plan can contribute to meeting an

organization’s objectives ........................................................................................................... 6

Task 3: Understand human resources policy requirements in an organization ........................ 7

3.1 Explain the purpose of human resource management policies in an organization. ........... 7

3.2 Analyse the impact of regulatory requirements on human resource policies in an

organization. .............................................................................................................................. 8

Task 4: Be able to examine human resources management in an organization ....................... 8

4.1 Analyse the impact of an organisational structure on the management of human

resources .................................................................................................................................... 8

4.2 Analyse the impact of an organizational culture on the management of human resources

.................................................................................................................................................... 9

4.3 Examine how the effectiveness of human resource management is monitored in an

organization ............................................................................................................................... 9

4.4 Make justified recommendations to improve the effectiveness of human resources

management in an organization. ............................................................................................. 10

References ............................................................................................................................... 10

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INTRODUCTION

According to Afiouni (2013), both academics and commentators are discussing on human

resource management as a complex process which keeps on evolving. The opinion on its

definition and relationship with other aspects of business planning and strategy is varied

among the writers. As per Ward and Tripp (2013), Strategic HRM can be regarded as the

general approach to the strategic management of human resources in accordance with the

intentions of the organizations on the future directions it wants to take. It includes number

of strategies like the one to improve the performance or to streamline structure or to

deliver fair and equitable reward. To be precise, it is actually strategy which is incorporated

with the concepts of HRM principles. Hence it can be said that Strategic HRM is a planned

way to integrate organizational goals with policies and action sequences whereas HRM is a

coherent approach to the management of people (Amah and Ahiauzu, 2013).. In this

assignment the organizations that we will use to gain an in-depth knowledge of Strategic

Human Resource Management are HSBC and British Airways.

Task 1: Understand how the strategic management of human resource contributes to the

achievement of organizational objectives

1.1 Explain the importance of strategic human resource management in organizations.

According to Afiouni (2013), in the current competitive market, in order to create benefits

human resources is the key factor for an organization. If human resources are properly

developed and managed then they can create a tough competition in the market. As per

Ward and Tripp (2013), Wal-Mart and Tesco employ over 3 million people in their

organization. It is not easy to manage such a huge amount of workforce. This is where

Strategic Human Resource Management (SHRM) comes into use. It helps in the

identification of long-term goals by improving employee skills and erasing business issues.

Human Resource Management plays an important part due to the following reasons:

1. Growth and Development of organization: The growth and development of an

organization by HRM is ensured by improving the capabilities of individuals, strengthening

teamwork and by obtaining necessary co-operation. Utilizing the employees to the

maximum and by motivating them is how HRM meets the goals of the organization (Azmi,

2010).

2. Human Resource maintenance: HRM looks after the development of Human Resource.

HRM is gaining popularity with each passing day as human beings form a vital part of

production. When it comes to modern management and societal development, HRM is its

heart, states (Harris, 2012).

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3. Creating healthy culture in the organization: The growth and development of people in

the organization is maintained by creating a friendly environment in the organization

(Chanda and Shen, 2009).

There are certain core values of HRM which are:

1. The personality, traits, behaviour and attitude of an individual should be considered as a

whole as he brings all of these to the organization (Truss, Mankin and Kelliher, 2012).

2. No two people are the same. Their personality, religion, nature and abilities are all

dependent upon the kind of social economic and environmental factors that they have been

exposed to (Pynes, 2013).

3. Both organization and employees have needs and it is their satisfaction which determines

a company’s success. Managers and subordinates form the hierarchical levels of an

organization. The relationship between both of them as well as with the consumers,

entrepreneurs, suppliers, government and shareholders are also essential (Gupta, 2014).

4. The success of the organization is directly proportional to the commitment of human

resources (Pynes, 2013).

5. Equipment, building and resources are only productive because of the people handling

them so everyone is part of the organization (Hartel and Fujimoto, 2014).

6. High performance is attained by acquiring, developing, motivating and retaining human

resources (Storey, 2014).

7. Different people in an organization are able to work with each other effectively due to

human relations (Simons, 2011).

1.2 Assess the purpose of human resource management activities in an organization

As stated by Ali (2013), every organization tries to maintain a good level of employees with

necessary skills and for doing so they formulate strong HR policies. Motivation and training

is used to increase the effectiveness of employees which is a major purpose of every activity

regarding human resources. This is ensured by SHRM that the resources are being

effectively utilized. According to Bahl (2013), it formulates human resource strategies based

on the organization’s missions, actions and purpose by looking into its mission, purpose and

actions. It can be divided into three sections:

1. One-way Connection: In this activity a business plan is formulated and the employees are

informed about the plan. As per the roles of each employee, the manager implements the

formulated business plan. The information is flowed from upper to lower level in this

activity (Banfield and Kay, 2012).

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2. Administrative Connection: In this activity the HR manager focuses on the day to day

activities. Regarding the day to day activities of employees the HR manager takes decisions

for effective utilization of the resources (Karikari and Boateng, 2015).

3. Two-way Connection: In this activity better working environment is provided by the HR

manager by asking feedbacks from the employees. The feedbacks from the employees help

in the formulation of strategies. In this activity order flows from upper to lower level and

feedbacks flow from lower to upper level (Bahl, 2013).

1.3 Evaluate the contribution of strategic human resource management to the

achievement of an organization’s objectives

Lo, Macky and Pio (2015) is of the opinion that right skills at right place at the right time are

what are included in SHRM. In order to achieve the long term goals set by the organization

the workforce has to be utilized to its optimum based on their respective strengths. Without

the effort of the workforce it is impossible to survive in today’s competitive market.

Motivation and other techniques are used by SHRM to involve the employees in attaining

the goals of the organization. Bahl (2013) state that health and safety of the employees,

HRD, labour relationship and compensations are offered as regards for the activities. As per

Simons (2011), in HRD employees are prepared for challenging tasks, health and safety

increases their confidence, labour relationship is in which skilled employees are supplied

and compensation programmes motivates the employee to give their best for the company

and to create a sound working environment. All these regards helps in attaining the long-

term goals of an organization.

Task 2: Be able to develop human resource plan for an organization

2.1 Analyse the business factors that underpin human resource planning in an

organization.

This task can be explained by considering HSBC Bank as example.

Strategic HRM Strengths: Identifying right people at the right place is the strategic HRM

strength of HSBC. According to Chauhan (2014), the HR activities that HSBC uses in order to

enhance the activities in their organization are what strategic HRM focuses upon. In order to

bring HSBC into the forefront in HR practice and to make the outcomes satisfactory the

application of the strengths of strategic HRM are applied. There are various factors that

strength the HR planning of HSBC, mentions Armstrong (2008). HSBC were able to identify

their weak sectors as they came up with successful business factors especially in the

economic downtown.

The business factors that underpin human resource planning in a HSBC are:

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1. Business Growth: Managers, cashiers, customer service assistants and individuals should

follow the Strategic HR activities which have been the impact of Strategic HRM in the world

giant bank of business growth. HSBC spent £2.1 million to open a new retail branch in

Glasgow thereby creating 18 jobs across Scotland. AS per the reports of HSBC (2012), the

firm also opened a premium branch in Thailand in 2011 the investments of which were

authorized by the HSBC regulatory committee.

2. Locations of operation: The headquarters of HSBC is located in London and it appears in

80 countries over 8000 locations with territories across Europe, North, Central and South

America, Middle East and Africa and the Asia Pacific region thereby making it a giant local

bank. In UK alone HSBC has over 1500 branches (HSBC, 2012).

3. Business change: After venturing into the Online Banking System, HSBC has underwent a

radical business change as even after the closing hours of the bank, consumers can carry on

with business activities. The services have become conducive and flexible for the customers

as a result of Online Banking System. Application for loan, application for credit card,

mortgage and job application as well as transferring money can be easily done through

online banking (HSBC, 2012).

2.2 Assess the human resource requirements in a given situation

In order to make a big change in the competitive market any organization has to have a

higher workforce. Skilled employees are a must as they can keep a healthy relationship with

the customers. A mistake from the employee’s side can damage the image of the whole

organization.

Royal Bank of Scotland’s (R.B.S.L.) Indian retail and commercial businesses has been bought

by HSBC bank. According to Rebello (2012), it has been revealed that it would pay a

premium of up to $95 million over the tangible net asset value (TNAV) of the business. The

policies of Government regarding the acquisitions of employees of RBS in India have

remained unchanged as RBS in India is owned 83% by the British Government.

In order to work on the personal development programme of each the HSBC Strategic

Human Resource Program has started running academies online which would yield more

skilled and productive employees. In the academy tests are conducted online where the

users get an idea about where they currently stand in the organization and they can match

it with the skills of what position they can look for.

2.3 Develop the human resources plan for an organization

This task comprises the development of human resource plan for HSBC.

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The human resource management of HSBC is very rich as it is one of the biggest banks in the

world. In order to evaluate its performance of Human Resource it has to develop a human

resource plan. As a human resource manager the HR plan of HSBC is as follows:

Organizational objectives: The basis of the plan of HSBC must be SMART. According to

Clegg, Kornberger and Pitsis (2011) SMART stands for Specific, Measurable, Achievable,

Realistic and Time based. All staffs have to follow these objectives in order to supply with

the best services.

Selection and Recruitment: An organization needs the right people to attain its long-term

goals and Selection is the first stage of it. Then is the recruitment process where people

based on the organizational structure are recruited.

Employee Development: One of the major roles in the organization is played by employee

development (Hameed and Waheed, 2011). The training programme of HSBC needs to be

revised. HSBC has 16 training centres worldwide where it conducts training programme for

which it spends around $600 per employee. Around 173,000 learning days has been

recorded in UK with over 33,000 employees attending the face to face training.

Retention: Skilled people in an organization are kept for a long period by retention. HSBC

needs to avoid potential recruitment in their organization by developing a promotion and

career plan aspect.

2.4 Critically evaluate how a human resources plan can contribute to meeting an

organization’s objectives

Optimum use of Human Resources is planned with the help of Human Resource Planning.

Employing right people in the right place and at the right time is dealt by HR planning.

Hence the organizational objective is fulfilled by HR planning.

HR is responsible for making the best use of people. Hiring right people for the right job

comes under this process (Hameed and Waheed, 2011). When the capabilities of the

employees are put to the best use and utilized to the maximum then all the organizational

objectives can be achieved.

HR planning helps in cases when there are shortages of employees and in cases of surplus

employees. The skilled and unskilled labour markets are planned with the help of the HR

planning (Amah and Ahiauzu, 2013). In cases of excess employees then early retirement are

given to the senior employees or the staffs are made redundant. In cases of shortage of

employees the staffs are hired or are trained from within. All the organization practices

multi-tasking. The right number of staff for the right job is the responsibility of the HR.

The human resource activities in the organization are increased by the contribution of

strategic human resource plan. In order to improve the business performance it plays a vital

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role of providing the effectiveness in its action. Personal management practices and hard

outcomes is the link which is attempted to get profit. According to Mostaghim et al. (2013)

the stages of contribution kept by human resource plan are defined below:

Improve performance: To improve the HR activities in the organization Human Resource

Management in the HSBC bank contributes immensely. In order to provide extreme

performance, an HR activity identifies what all needs are to be developed or to be

improved.

Business case (cost): The cost of unwanted expense in HR practice is reduced by the

contribution of strategic human resource management. The key element of practising

extreme human resource activities in HSBC bank is minimizing the cost.

Succession planning: In order to behave formal and friendly relationship between staffs the

key objective of HSBC is “Managing Growth”. As a result they can have perspective and

skilful people in the organization.

Task 3: Understand human resources policy requirements in an organization

3.1 Explain the purpose of human resource management policies in an organization.

Here HSBC bank is considered as an organization. The policies of HR in HSBC bank are:

Health and Safety: There is always a measure of risk of possible terrorist attack, accident,

diseases and fire so HSBC puts great emphasis on Health and Safety so that safe

environment exists in the organization (Jarvis, 2014).

Equity and Diversity: HSBC also lays great emphasis on equity and diversity. They conduct

and interactive diversity competition on the employees’ intranet to enhance the

consciousness of the issue and to develop a database of the cultural and business etiquette

(Hameed and Waheed, 2011).

Bullying and Harassment: HSBC has laid strict policies to ensure that employees treat each

other with utmost respect and without any Discriminations, Harassments and Victimizations

(Amah and Ahiauzu, 2013).

Working time and time off: In the working week HSBC staffs are required to work for an

average of 48 hours. There are also regulations for maximum rest period. According to

Rebello (2012), Employees are allowed a maximum of 5-6 weeks of paid leave per year.

Other kinds of absence like the paternity leave, maternity leave, abortion leave or leave due

to family reasons are also allowed.

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3.2 Analyse the impact of regulatory requirements on human resource policies in an

organization.

For the proper practice of regulatory policies and to abide by the rules there should be

regulatory requirements on the Human Resource policies. The impact of regulatory

requirements policies in HSBC bank are discussed below:

Sex discrimination act: It is illegal for a person to discriminate other person on the basis of

his/her sexual orientation, marital status or on the basis of sex according to the sex

discrimination act 1995/1997 (Bahl, 2013).

Race relation act: No person can discriminate the other person on the grounds of colour,

nationality, race or ethnic minority origins or on philosophical beliefs and religion as per the

race relation act of 1992 (Banfield and Kay, 2012).

Employment act: HSBC has employed basic employment law to the staff under the

employment act of 2008. Under this law discrimination on the grounds of race, sex, age,

disability, sexual orientation is illegal. Both full-timers and part-timers should be treated

with equal respect. Also tax contributions and NI should be paid to Customs and HM

revenue from the wages of the employees. Dismissing an employee for reasons such as

pregnancy or any childbirth reason is also not acceptable (Jarvis, 2014).

Task 4: Be able to examine human resources management in an organization

4.1 Analyse the impact of an organisational structure on the management of human

resources

This task can be explained by considering British Airways as example.

According to Aslam and Aslam (2013), Contingency approach and Configuration approach

are the two basic approaches to the formation of organizational structure. Under the

contingency approach come the nature of the business, its size, its age and history, the

geographical span of its activities and the nature of the environment. As per Jarvis (2014),

under the configuration approach comes the factors like span of control, the need for

formalization centralization and decentralization and planning system should be logically

configured into internal consistent grouping. Voorde and Paauwe (2011) stated that the

segmented management level and the imposed responsibilities belonging to the individuals

are indicated by the organizational structure. Reducing unwanted vacancies and making

constructive and positive formation in the organization the framework set up by the impact

of strategic HRM on the British Airways organizational structure. The organizational

structure of the British Airways is as follows:

Geographical impact: The impact of British Airways all over the world is pretty great as it is

one of the biggest airline companies (Jarvis, 2014). The human resource of the company is

highly influenced by its organizational structure. From the recruitment process to the

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promotion in the organization the strategic HR and its functions are highly involved thereby

employing right people at the right time.

Centralization impact: The operation of the British Airways organizational structure can be

hugely impacted by centralization (Patel, 2014). Practicing centralization in the

organizational structure can impact the value adding activities of British Airways business.

British airways can produce competitive market by the decision making process of the

centralized activities.

4.2 Analyse the impact of an organizational culture on the management of human

resources

Jahanian and Modaresi (2014) stated that one of the key elements of management practice

as organizational culture. The central and dimensional location in the organization is kept by

the organizational life culture. An organization should properly percept organizational

culture to develop its cultural practice and performance hence the management of

organizational culture is very important. Ideas, values of the organization’s internal

behaviour, cognition and ideas form the organizational culture. British Airways keeps this in

mind and to develop the human resource they have to nurture the aspect of organizational

culture.

The relationship between HRM functions and culture is internally linked and very common.

Performance management, Development, Resourcing, pay and conditions and employees’

relationship has the contingency approach to each other (Voorde and Paauwe, 2011). In

order to develop and exercise the Strategic Human Resource Management in the

organization, functions of HRM and culture are practised at the same time. If British Airways

follows this culture HRM functions then the Human Resource in their organization can be

made effective.

4.3 Examine how the effectiveness of human resource management is monitored in an

organization

Improvement in the existing business in B.A. is the effectiveness of Human resource

management. According to Mostaghim et al. (2013) competitive advantages in the

organization are Human resource management strategy, Human resource operation and

Human resource policies. Achievement for organization is the contribution for HRM. It also

helps in reducing the cost, helping acquire BA goals and increasing the benefit by practising

it.

Organisational goals: The several fields of effectiveness in B.A. have been identified by

Strategic human resource. Customer focussed performance is one of the goals of HRM and

it offers benefits to individual performance and also recognizes different people in the

business along with providing training and development (Jarvis, 2014).

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Human resources efficiency: The people working for British Airways provide the activeness

of the operation. This is known as Human Resource Efficiency. The total manpower of British

Airways all across the operation is 36832. In order to increase the accountability of the

business and to improve the business, BA has finished restructuring of the management. It is

currently focussing on the employee improvement so that they can increase their efficiency

to get better value for customer (Banfield and Kay, 2012).

Performance indicator: The identification of individual employee activity measurements is

done by performance indicator. The managers in BA involve with their employee to yield

better outcomes from them hence they have the right human resource leader of right

support with motivation to create high performance HR culture. Survey report which

includes the engagement index is introduced quarterly by which managers measure the

individual performance of the employees Voorde and Paauwe (2011).

4.4 Make justified recommendations to improve the effectiveness of human resources

management in an organization.

UK’s highest and largest international scheduled airline is British Airways. The best located

airports around the world are some of the destinations of British Airways. They have 144

Boeing, 84 Airbuses, 3 Avros and 7 Embraer E-jets thereby making it the world leading global

premium airline. Jahanian and Modaresi (2014) stated that effective and outstanding

productivity in the organization can be brought by proper implementation of Human

resource practice. As a result the target markets and expected goals can be achieved by BA.

Justified Recommendation: Performing organisational performance of combination with

strategic cultural programme and strategic structure to provide better service to the

customer is the effectiveness of strategic human resource management in BA. It brings the

improvement in the practices of Human resource in the organization by adapting and

implementing existent structural and cultural exercises by utilising the resources it has. In

order to improve the effectiveness in performance of Human resource in BA, reporting and

meetings and regular monitoring programmes can be a very effective way (Amah and

Ahiauzu, 2013).

Benchmarking HR performance: In order to look at the comparative HR performance of

other airline companies of the same category and the similar airline company with the same

service internal performance programme standard can be used. The existing strategic HR

groups can be benchmarked against similar airline company rather than the individual to

have better HR performance (Jarvis, 2014).

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