The use of strategy in human resource management has become a new cornerstone in business. More and more firms are now developing their organizations with independent human resource departments. These practices have transformed organizational productivity and worker satisfaction enormously and have led organizations to work more effectively and efficiently. Organizations, recently troubled by economic turmoil and the hard global financial crisis are now making sure that the assets (human resource) of the company are retained especially those employees who have the required training and are properly developed. Though a number of people have been downsized; the employees that the organization knows have uniqueness are retained even at higher pay scales.
Human resources basically determine every organization’s success. The HR department basically exists to support the managers and the employees of the company and to pursue the company’s goal and objectives. The human resource objectives not only reflect the intention of the management but also balance the organizational challenges, the HR function and the people who are affected by it. If the company fails to succeed in its objectives it would then harm the company’s profits, performance and even its survival in the market. Though managers are optimistic about the effects of human resource management on competitive success of an organization, studies show that a positive association between HRM and productivity exists, but there is no concrete empirical evidence to state that whether HRM resulted in the increase of productivity or not.
The company that has been chosen for this research paper is LTQ Engineering. LTQ Engineering was formerly known as Jet Turbine Services. The headquarters of the company are situated in adjacent to Melbourne International Airport in Australia. LTQ Engineering is considered to be an independent maintenance repair and overhaul (MRO) company. The company was formed in the year 2003 in the month of September, but in July 2008 the company became a joint venture two major companies; the Qantas Airways Limited and the Lufthansa Technik AG. (LTQ, 2010)
There are some external pressures on the company and these external pressures are as follows; the MRO business is heavily dependent on the customers of the company and the customers are the main shareholders of the company as well. The dependence on the customers provides a steady flow of work (i.e. in the form of aircraft). Another external pressure has been identified and that is the recent global financial crisis known as the ‘credit crunch’ has created a downward spiral for the company by decreasing the volume of work that is being passed through the production lines of LTQ Engineering Ltd. and this decrease in the work has put a great deal of pressure in the effective use of the labor workforce (because a great deal of companies had to let go a lot of it employees to survive the global financial crisis) which is employed by the company to perform its tasks(Daft, 2008).
The paper shall be demonstrating thorough research of the organisation and its environment, the theoretical aspects of its SHRM and an analysis of alternative HRM strategies and activities that lead to suitable recommendations for the organisation to action.
Strategic Human Resource Management (SHRM)
Traditional human resource management is quite different from the strategic human resource management (SHRM). There are two things that differentiate them and they are as follows; organizational performance (the overall performance of the company and not individual employee performance) and human resource management system.
The quality of the employees ensures the success or failure of any organization. Recruiting, training & developing and retaining qualified personnel are considered one of the biggest challenges for any organization. It is important to involve the management of managerial, technical and clerical staff when the management of the organization is managing the information system functions. It is important for the managers to recruit personnel’s who are qualified for the job and are also able to organize, develop and direct the capabilities of the existing staff of the company. It is important that the employees of the company are trained in a continuous manner so that they are to keep up with the latest trends in a fast moving technological field. To use the human resources of the company in an effective and efficient manner is the main objective of human resource management (Miles & Snow, 2003). Thus, human resource systems are designed in such a way that they are able to support the following:
- Need to meet the personal needs of the organization and its business processes
- Training and developing employees so that they are able to meet their potential
- Policies and programs need to be controlled.
More and more organizations are clearly stating their SHRM policies in writing to integrate it into the organizational culture and values. There relations with their organizations have drastically changed and workable compromises are now sought after, because most of their needs are already being filled through organizational HR sectors. Thus, LTQ Engineering not only has to be pro-active but to a certain degree, has to be reactive as well. (Jackson, 2002)
It has become important for LTQ engineering to improve its performance in the production line and to motivate its employees to do their utmost in the tasks that have been assigned to them. Performance management is a process which helps to create and develop an environment within the organization that helps the employees of the company to perform their best. To achieve the strategic goals of LTQ Engineering SHRM requires to add communication which is relevant and to take action which actually predetermines the set goals and objectives of the organization (Storey, 2007).
Training and Development: Training and development ensures that the employees are able to expanded their duties and greater responsibilities. It must be remembered that training only helps the employees with their current job and develop the employee for the future whereas development helps the employees to handle their future responsibilities. The management must also remember that training and development programs are not solutions to every challenge of the company. Effective job designs, selection, placement and other activities of the HR department are also very important. (Armstrong, 2000)
Methods of motivation: Motivation can be defined as a reason to do something, over here the case would be to provide en employee to perform better on his or her job. In a work environment there are three characteristics that affect the motivation of the employees. Motivation is a process that is divided into 3 elements and they are as follows intensity, direction and the persistence of effort of an individual or a group towards the achievement of a goal or an objective. But if it is viewed generally motivation is concerned with effort towards any goal and here we are talking about the attainment of an organizational goals and objectives. As we know that there are three elements in motivation they are:
- Intensity which is concerned with hard working that is how hard a person tries to achieve a goal or an objective
- Direction is mostly based with effort that is directed towards the achievement
- Persistence is mostly based the effort of an individual. (Robbins, 2000)
Labor Flexibility: Human resource management is increasingly being shaped by cost efficient behavior and competition enhancing behavior. Labor flexibility has been the greatest outcome of this drive, followed by outsourcing and downsizing. In this respect, it is essential that organizations are now ‘learner’ organizations. When making decision regarding human resources these points must be kept in mind, they are as follows:
- Creating a productive and enjoyable work environment is the dual responsibility of human resource managers and human resource experts.
- Having a diverse culture in a company is considered to be a beneficial process that will help in an employee’s growth while it also increases the cultural sensitivity and as well as the mentoring skills of the HR department members
- HRM is one of the ways a company can gain a competitive advantage, which is not easily duplicated by any other company.
- If the company wants to maximize the employee’s motivation, the HR department has to understand and respond to diversity. You must be thinking how? The word to guide the HR managers would be flexibility. The managers must be ready to design work schedules, compensation plans, and benefits, work settings and like to reflect upon the employees varied needs. (Kaplan & Norton, 2006)
The Link between Theory and Practice in Aspects of Strategic Human Resource Management
Training & Development
The following example of training and development is going to show the link between theory and practice in aspects if strategic human resource management. For example, in a company like LTQ Engineering there are a lot of learning opportunities that range from skilled orientation training to seminars that deal with development issues, they basically help the managers to face the issues that might arise in the future. The employees of the company are not bothered that the class is intended for training or development. It is only concerned with whether the program has helped the employees and the organization or not. The role of HR department at LTQ is that it helps to prepare the individuals for future job responsibilities. And it also attempts stops the employees from obsolesce, work force diversity, technological changes, affirmation action and employee turnover etc. The management of LTQ does use 7 of these methods while training and developing their employees.
It is a known fact that needs always result in training and development objectives and these objectives then state the behavior that is desired by the company and the conditions under which these objectives will occur. And finally the objectives of the company become the standards against which the employee’s performance is measured along with the program. For example, the objectives for LTQ can be that it strongly believes in customer satisfaction, if the customers of the company are happy they will return and bring with them more customers, which means that their sales and profits will increase. Therefore customer service is considered to be one of the most important operations of LTQ.
This is based on that how the company can overcome it problems and can win in the future. With strategy architect the HR department will be able to identify and incorporate the impacts of the business trends on the business, and they will be able to obstacles which are considered to potential can be forecasted to ensure success for the company (for achieving its strategic goals) by facilitating the process (David, 2006).
- Administrative Linkage: this is based on the treatment of the employees within an organization there was a time since HR department was just considered a burden, now this concept is changing and now it is considered very critical for the organization. Because it is with the help of the HR professionals the employees of the company remain motivated and empowered. The HR department has a long term effect and impact on the organization. With this the company is able to handle problems like cultural change, development of the employees, productivity and compensation and reward management. (Schuler & Jackson, 2007)
- Global Human Resources Scorecard: A management tool that is used in the human resource is the global human resources scorecard; it is an important part of the strategic scorecard because it considers the group as a whole. Success factors and performance measurement criteria are the key performance indicators in the scorecard; this makes it possible to compile global key figures based on human resources in the targeted market plus it makes it possible to measure it successfully and measure the success of HR processes and strategies. The information which is gained through these measurements can help the HR directors to make decisions, this tool also provides targeted support to the business strategies of the company and its processes in different divisions of the company and it also creates the foundation for mutual but continual leaning processes throughout the group with the help of best practices target support. (Schuler & Jackson, 2007)
- Organizational Structure: an organization would be able to maintain strong strategic partnerships and system integration with their suppliers, buyers, clients and shareholders and stakeholders etc. The network of alliances will provide the company with a flexible structure and it will help LTQ to move towards new market opportunities.
- People and Culture: As we know that people and culture are an important part of a company and with the networked organization that uses technology it will be able to delegate the authority and collaboration, which will be expected and rewarded by the management of an organization.
- Coherence: Coherence in a networked organization, which is based upon embedded vision in all the individuals of an organization and it, is also based on the impact, which is projected externally. (Schuler & Jackson, 2007)
- Needs to be more flexible
- Innovation as a functional system and anticipate any sort of change within the company and its environment
- Train and develop the employees so that they are more adaptable towards change
- Monitor the environment and evaluate the impact of the challenges on the company
- Take proactive measures, i.e. implement approaches that would help the company to achieve its goals and lastly obtain and analyze the feedback
HR is defined by many companies as a combination of the administrative functions with the performance of the company’s employees and their relations along with the company’s planning. Basically it helps the company to achieve the goals and objectives that are set for them by the management. Human resource activities also make a large contribution to the company’s success in many ways but the HR activities mostly support the strategies of the organization. When HR functions are integrated within the business strategies of the company, it enhances the organization’s performances. Strategic human resource management, help by participating in formulating overall organizational strategic plan by aligning HR functions with the company strategy, and it is concerned with all the managers and employees of the company.
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