Key element to every organization has always been the people associated with it and it can not be replaced with any other factor under any circumstance. Success of an organization is dependent over the very fact that how efficiently it is able to take care of its people in different situations. This has given rise to the concept of strategic approach towards Human Resource Management. It not only stabilizes, but also channelizes various resources that are associated with both the organization and people associated with it. It is sometimes also referred to as SHRM, i.e. Strategic Human Resource Management. In simple words it can be explained as high degree of planning process followed in strategic management combined with human resource management. It has become an essential feature due to changing global conditions and continuously intensifying competitive nature of the organizations. (Strategic Approach To Hrm)
This has been explained with the help of a practical example of Aramex Co, which is an organization operating in transportation sector making vital contribution since 1982. Since its initiation, it has established its supremacy at global scale with the help of its competent workforce that has to be managed in an appropriate manner for which strategic approach for HRM is required.
Strategy in HRM
For a considerable period of time, HRM was considered not to be a part of strategic management, but with large number of alterations caused in all the industrial sectors, especially in transportation. This aspect has made both these features to operate in an integrated manner to make maximum possible benefit of the available opportunities. These changes are caused by the ultimate goals of the organization that are changing on a continuous basis that are taken care by the strategic department of the company. This relation has raised the difficulty for these two departments to co-exist together in an individualistic manner. It is due to this particular reason that Aramex has started following a strategic approach towards its HRM. (Sinha)
Advantages of strategic approach to HRM
There are some of the basic advantages associated with the strategic approach towards HRM that can be considered as the basic reason due to which Aramex could not afford to carry out its operations without integrating strategic management and HRM. Some of these advantages have been depicted below,
- It promotes developing of quality employees present and required by the company in accordance to its requirements.
- Increase cost effectiveness by proper utilization of labor as in transportation industry, workforce play a crucial role.
- Promotes planning and estimation of future uncertainties that can be avoided by molding its HR tactics.
- Best possible integration could be done by identifying strategic needs of the company.
- Increased employee participation in strategic planning and making their implementation with the help of HR department.
- Better utilization of analytical skills possessed by the individuals.
- HR department can make improvement in various strategic initiatives taken by Aramex for both short term and long term perspectives.
There is a vast difference between theoretical aspect of strategic approach to HRM and its practical implication. This factor became one of the primary concerns for Aramex when its implementation was initiated. This is due to the fact that in this feature, two different departments of the company have to operate in a mutual manner to achieve organizational goals that is quite a difficult process in practical purpose. Thus there was issues related to adaption, but they were resolved with proper actions and planning performed by its upper management.
In above shown diagram, every color has its own significance and signifies different stages of HR life cycle. When strategic approach is followed in HRM, there is an element of detailed planning associated with every stage in order to make sure that factor of failure can be violated from organizational functioning. Internal mobility between different stages can also be permitted by the strategic perspective of the cycle as any illegal change may disrupt entire cycle that may cost organization in various forms. One of the aspects in which Aramex lags behind its rivals is internal mobility. (Ahluwalia)
One of the elementary elements associated with the organizational conduct is proper structuring. Without this particular feature, various other aspects like planning and resource distribution would go waste, thus it acts as an obligation for strategic department to make optimum use of their authorities to rectify working of its HRM. Thus strategic approach to HRM has also brought better hold by strategic management over company. It is this particular structuring that has helped Aramex over a period of time to develop its express and freight to make proper implementation of latest technologies and make improvement in its operations. Now its customers can keep a regular track of their shipment along with periodic attractive offers that are made by Aramex. But still Aramex lacks in some of the domain due to which its structuring is unable to suffice its current needs and get an upper hand over its competitors.
Factors liking HRM and Strategies
There are a number of factors that act in a collaborative manner to make sure that link between HRM and strategic management acts in a beneficial manner for the organization. Weight age of all these factors is dependent over external situation, and can not be pre-determined in an accurate fashion. Only a rough estimation could be made that will allow strategic department of the organization to make preparations in accordance to the estimation, but even a slight modification in external condition may ruin entire preparation. Diagram 1 shows concerned factors,
These factors work over basic principal of demand and availability. Strategy and work culture of the organization determine demands that may be possessed by the company while competition in the market and current position of the Aramex acts as determining factors of availability of resources. These features finally in a combined format make a link between HRM and strategic management in the form of planning pursuing which organizational goals are achieved but seems to be missing from the basic functioning of Aramex due to which it has not been able to make suitable proceeding despite of availability of large resources. Some of the reasons to attain which planning is required are recruiting, selection, HR development, compensation, performance management, and staff adjustment. These characteristics would become ineffective on a comparative basis in the absence of strategic approach towards HRM.
Today organizational goals are highly influenced by the bottom line of the company, thus Aramex takes special care of its bottom line that exist in the form of HRM with the help of strategic planning. They are objective driven and make optimum use of technology and information available with the management of the company. This can be done by setting up priorities of the organization based over its final objectives and available opportunities. This can be done with the help of proper scanning procedures that has to be conducted at both internal like strategy, organizational culture, leadership style, etc and external level like government laws, economic conditions, labor force, etc so as to complete strategic research. As HR is related to the core of the organization, thus it should possess high correlation with the future aspects without any dilemma. This will result in turning Aramex entirely into a business focused organization that will be capable enough to manage change along with promoting values that will finally result into turning into a positive scenario with Aramex's point of view. Also it should not be considered as an instantaneous process; rather it should be carried out in a gradual manner so as to make sure that all its positive affects could be utilized in best possible mode.
Human Resource Management can be considered as the heart of the organization that control most important segment of the organization, i.e. employees. Success of organizations operating in some of the sectors, especially service sector is completely based over the human resource seized by the organization. It is this factor that helps it in gaining competitive advantage over its rivals. Thus its strategic concerns are merged with HRM to make maximum out of the available. It mainly makes an introduction of planning in functioning of company at every scale of its functioning as HR constitute from top to bottom management. It makes use of various issues like involving various employees into decision making procedure thus it can not be done without certain limitations. These limitations should initially be clarified from all the individuals involved in various processes, so as to avoid any discrepancies that may arise at later stages. Some of the factors act as links between strategic management and HRM, which have been mentioned in detail above. These links should be defined in a clear format otherwise strategic approach to HRM would not be able to prove itself effective to much extent. Thus strategic approach to HRM will only be considered as successful if it is implemented properly.
- Supreet Ahluwalia. (n.d). Strategic Human Resource Management. Retrieved March 7, 2010, from http://www.indianmba.com/Faculty_Column/FC722/fc722.html
- Rana Sinha. (n.d). What is Strategic Human Resource Management? Retrieved March 7, 2010, from http://ezinearticles.com/?What-is-Strategic-Human-Resource-Management?&id=549585
- Strategic Approach To Hrm. (n.d). Retrieved March 7, 2010, from http://www.oppapers.com/essays/Strategic-Approach-Hrm/149533