Introduction
This essay will tell the reader the general ideas of what is Human Resources Management strategy and its relation with a business strategy. In the report (Mayhew, 2016) said in an ideal world, there is not a line drawn in the sand between human resources strategy and business strategy, a successful business owner realizes the strong connection between the two. Azhdar, Samira and Babak (2015) declared it could be concluded that applying suitable Human Resources practices corresponding to firms’ strategies will result in improving organizational performance.
In an email response, Talim (2016) claimed that there is a big problem faced by every businesses (organization) is the impact or the output of Human Resource strategy that arduous to be measured. This essay will give the reasons as well as explanations why this problem is appeared.
The essay will be divided into three parts. The first part is about the relation between Human Resources Management strategy with business strategy and why is it important to have the relationship amongst them, the second part will be the impact of human resources strategy to the business organization and the final part is the conclusion of all the explanations in this essay.
The Relationship Between Human Resources Management Strategies and Business Strategies
Many people that are still misinterpret the definition of Human Resources Management Strategies and the business strategies itself. People sometimes think it is the same thing. In fact, they are not the same but they are relatable. They are supporting each other. On the other hand, people also sometimes liken the business strategies and the business (organization) goals. Business strategies appears if the business (organization) already set its goals. For example, if the organization wants to increase its profits they need to reduce their expenses. In the report (Ashe-Edmunds, 2016) pointed out that the best way to reduce the expenses is to asked the accountant to compare prices or find out competitive bids on expenses such as insurance policies, internet services, shipping and the other expenses.
Mission, vision, business strategy all made to make good experiences for the customer. Also, they are supported each other to achieve their business goals and having high performances in their businesses. This all connected to each other and all of this we can called it as a vertical alignment or integration (Tay, 2016). Wright et al. (1994) declared hence the vertical integration assure an obvious link or relationship between internal people (employers, managers, etc.) and policies and the external market or business strategy, and thereby ensures that competencies are created that have a potential to be a key source of competitive advantage.
When there is a vertical alignment, there should be a horizontal alignment. This is where the Human Resources Management strategies taking its part on supporting the business strategies as well as the business goals. Firstly, Human Resources strategies will do the recruitment for the organization’s employers. Then, they will do the second phase which is selection, they tested the people who are willing to do the job and fit in to the job. After that, they will do the training for the elect. Afterward, if the elect already does their job performances the upper management will do the performance appraisal. If they were doing the good job, they will receive the reward in reverse, if they are not performing their best performances they will get the punishments. If the employee done the performance excellent than, the employee will directly go straight to the succession planning phase, which the upper management can promote them to a higher level or they can also be transferred a skilled-employee to another place (other branch in other city, other island, other countries, etc.) The purpose of this besides to make the employee have more experiences and gaining more skills, this succession planning it is made for organizational career development. (Tay, 2016)
The explanation above is the main ideas of why Human Resource Management strategy needs to have close relationship with the business strategy.
First reason is, if the organization have good Human Resources strategies it will allowed the business (organization) to maintain its competitive advantages. Babalola (2015) proposed that ‘Successful Businesses maintain competitive advantage in their industry through the countless and rigorous effort that goes into developing, planning and selling its products/services to their customers.’ If the businesses (organization) have their own uniqueness or different with other competitors, they will have more chances to become successful business.
Second, Majumder (2014) interpret that Human Resources planning forms an integral part of any organization and it settles that an organization reached all its objectives. If Human Resource planned is good (which is also included in Human Resource strategy), they can make a forecast for the recruitment which leads to the manpower needs to support the business.
The third one, which is the last reason that will be explained in this essay is; one of the Human Resource outcomes is the flexibility. As Tay (2016) explained in his presentation if the organization choose the Human Resources practices in the correct way, the Human Resources strategy not only should ‘fit’ the business strategy but it is also need to be flexible and can adapt in any situations (included the changing in the market trends). If the organization can adapt, they will survive longer than others who cannot.
The good example for this is, the Kodak failure. As we know, lately Kodak company is one of the most successful company in photography section. But then, it was disappeared after the time goes by.
‘Kodak management’s inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades’ said Mui (2012). This shows that, Kodak do not accept the changes in the market trends. They are not flexible and they cannot ‘fit in’ to the newest trends, technology and customer demands. When they are suddenly realized to follow the trends, it is all too late because Kodak cannot compete with the other existing competitors.
The Reasons of Why It Might be Difficult to Determine the Impact of an Organization’s Human Resource Strategy on Organizational Performance
Organizations began to realize that the productivity, quality, and financial performance of one area could increase by a successful human resource policies and practices (Caliskan, 2010)
But it is somehow very hard to determine the impact on the organizations itself.
First reason is, the inconsistency in the practices of Human Resources make it very difficult to determine the impact. (Tay, 2016) The evidence of this reason is explained in the best practices model of Human Resource. Like what Amstrong (2006) has cited in his book, the best practices model has the inconsistency between a conviction of the model itself and the resource based view which is focusing on the intangible assets, including the Human Resource that enable the business to do better work than its competitors. (Purcell, 1999)
Secondly, the lack of accurate data collection during the research studies is also affects in determining the impacts. Robertson in Mahsun (2006) stated that the job performance is the appraisal of the work process towards the targets that have been set including the data about the efficiency use of resources in producing goods or services, the quality of the goods or services and also the results of activities compared with the intended meaning. So, if the organizations do not have accurate data, they cannot compare properly. In fact, the data that need to be collected is also depends on the performance of the employees. Some HR experts have their own way to measure the performances. But, from the experts’ opinion it can be concluded that it could only be obtained at the end of work (month / year) due to there should compare the previous data and the data that has been achieved. So, that would be abstract if it determines from the initial results of the performance.
The third reason is, the determinants to measure the organizational performances itself are beyond number. There are two variables that used to analyze the organization; which are external environment and internal environment. (Gayrea et al, 2011, p 288). And each variable has their own variables in it. Gayrea et al. (2011) asserted that external environment’s variables are; competition, customers and suppliers. While the variables in the internal environment are; strategy, leadership, employees, quality, performance measurement, innovation and development information technology and corporate governance.
Focusing on the internal environment on one’s own (more to the employees) there are too much aspects that can influence the appraisal of the organizations. Such as, the mood of the employees (which can be changed every time and affected their performance), their behavior, and also might be their culture as well. That is exactly why it is hard to determine the impacts to the organizations, and back to the reason number two (above) the data also not accurate because there is too much data that needed to be taken.
Conclusion
Finally, from the explanation above it can be concluded that Human Resource Management strategy and business strategy is not the same thing. But, they have both have a strong bonding or relationship between each other. Because, from the evidence that are already given in the essay, Human Resource strategies should be sure as a driver or a main cause to a successful business (organization) strategy and it leads the organization to achieve their vision, mission and goals. Furthermore, it is true that to discover the impacts of Human Resource strategy to the organizational performance is difficult. The main problems are in the inconsistency in the practices that the organization choose (in this case is best practices) and the deficiency of the collected data that may cause the data is inaccurate. So, it will be unfair if the organization performance only measured by looking at the data that haven’t been checked if it is reliable or not. Overall, there are still a lot of arguments and evidences that can explained this topic further, but these two are the most crucial one.
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