Human Resource Strategies: Understanding HR Objecives and Strategies

The need to manage a workforce increases as a business grows, this is usually dedicated to a certain department or personnel.
HR is based on the principle that employees are the most important asset to a business and must be managed to yeild maximium effiiciency for the business.

HR Objectives: targets the HR management hopes to achieve by implementing HR strategies, in order to achieve the businesses corporate objectives

HRM: (Human resource management) making the best use of all employees to achieve corporate goals
E.g.

• Matching workforce skills/size/location to business needs
• Minimising labour costs
• Making full use of the workforces potential
• Maintaining good employer-employee relations

• Matching workforce skills to business needs
  Changes in technology, international growth, and new product development can mean that the skills of your workforce need to change appropriately to reflect the requirements of the change. HR planning processes plan the training and recruitment for this
• Matching workforce size the the business needs
  Lean production, technological change and expansion can lead to changes in the size of the workforce the business needs. Employees who retire or leave need to be replaced and it is the job of HRM to manage this
• Matching workforce location to the business needs
  When moving on to operating in a global market/going multinational it means that current employees may have to relocate or the business needs to employ local staff when required.
• Minimising labour costs
  It may be that it is more efficient to employ less administrative or support staff, or even certain layers of the organisational structure to increase productivity. HRM need to assess this.

• Making full use of a workforces potential
  Just the same as making full use of a businesses productive capacity, they should make full use of the skills available. This can involve HRM implementing flexible working arrangements or appraisal systems to reduce labour turnover and retain valuable members of staff
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• Maintaining good employer-employee relations
  Needs to be maintained to avoid internal disputes or industrial action taking place which would lead to bad publicity for a business. HRM need to ensure there are good industrial relations and effective channels of communication

Influences on the HRM objectives will come from both internal and external sources; dependant on the objectives of the other departments in a business (the other sections) and the external environment, the HRM department need to manage the workforce effectively to reflect the needs of the other departments and environment.

Internal influences

• Corporate objectives: depending on the nature of these objectives it will impact on the workforce; new skills may be required, more staff, relocation of employees or job losses
• Operational/production strategies: capital intensive strategies or innovation or relocation will lead to job losses, whereas lean production or technology changes may require team working or training
• Marketing strategies: strategies such as market development and product development may impact on future recruitment and selection, as well as training for existing employees
• Financial strategies: decisions such as outsourcing to reduce costs will result in new training programmes, dependant on the training budget and expenditure

External influences

• Market changes: dependant on market share or market environment such as changes in demand or geographical locations will lead to the HRM needing to manage staff in the appropriate places in order to keep its place in the market
• Economic changes: if in a poor economic climate then HRM need to ensure that the business can suit the incomes of consumers
• Technological changes: if in a market where production is dependant on technology, and this is changing, employees will need to be trained to operate new equipment or staff may be lost
• Social/population changes: for example if there is a growing number of single owner householders, or demand for flexible working options for those with children and other commitments to deal with
• Political/government/legal changes: legislation on maximum working hours, wages and workforce planning and redundancies

There is no singular approach to HRM that runs across a business, there are two categorical approaches; Soft HRM and Hard HRM, but there is evidence of some businesses using elements of both.

Soft HRM: concerned with the communication and motivation of employees; people are led rather than managed and employees are seen as the most important element of the business. Each member of staff is seen as a long term investment oppurtunity

Key features of soft HRM:

• Focus on the needs of employees- rewards, motivation
• Training and development oppurtunities, employees empowered to seek delegation and take responsibility
• Strategic focus on longer-term workforce planning
• Competitive wages- eg. profit share and shares
• Flatter organisational structures suiting a democratic leadership style
• Strong and reguar two way communication

Benefits:

• Reward systems designed to encourage employees- work at consistantly high standard
• Training, development and appraisal allow employees to fulfill individial needs and needs of the business, improved motivation
• Recruitment costs reduced because retention rates should be high, labour turnover below average and absenteeism not a problem

Drawbacks:

• The role of trade unions is unclear so could lead to tension
• Relies on organisational culture which embraces commitment to long term training and development and acceptance to delegating responsibilty- not easy to implement in practice without needing time consuming and expensive training for senior management

Hard HRM: emphasises costs and control is firmly in the hands of management, they manage numbers effectively and focus highly on resources and costs; employees are simply a resource of the business

Key features of hard HRM:

• Focuses on workforce needs of the business rather than the workforce themselves, in order to managem hire and fire accordingly
• Employees on fixed term contracts and often use external recruitment
• Judgemental appraisal systems
• Limited delegation of authority for decision making- all in the hands of management
• Minimum wages and little incentive to work
• Taller organisational structures suiting a autocratic leadership style

Benefits:

• Lower training and development costs- focus can be on lower costs for the business so that productivity is at its maximum
• Competitive advantage can be achieved through cost minimisation- lean production methods and minimum wages
• Reward systems are linked to output so it's possible to achieve a positive correllation between quantity produced and pay

Drawbacks:

• Little attnetion is paid to the employees; they are only a resource which are necessery in order to achieve the corporate objectives. This can lead to high labour turnover and absenteeism due to de-motivation, costing the business
• Difficult to recruit new employees if the company has a reputation for hiring and firing, from previous staff taking industrial action.
• Limited delegation and lack of empowerment- lower down employees will not have much say in decision making when they could be closer to the customer needs