Importance and Purpose of Strategic Human Resource Management
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Strategic Human Resource Management (SHRM) is a concept which defines how the objective of the organization will be accomplished with the policies and strategies adopted by the human resource managers (Chand, 2015). The HR manager defines the organization's plan and intentions and the ways to achieve the business goals through people.
In the task 1, this report stresses on the importance, purpose and contribution of SHRM in achieving organization's objectives. Through analysing various factors, assessing the HR requirement in Aldi and then develop the human resource plan for the organization. Further, the task 2 is explained, in which the major focus is on the aspect of HR policies and the impact of regulatory requirements on these policies. The impact of Organization structure and culture on the management of human resource are also taken into consideration. At the last, the effectiveness of human resource management will be monitored by considering various factors.
1.1 Importance of Strategic human resource management:
The importance of strategic Human Resource management is as follows:
- Performance Appraisals- HRM encourages the employees of the organization to work as per their potential and capabilities and also provide them the direction which can bring improvement in their working. The SHRM can time to time appreciate the work of employees and guide them which will assist in enhancing the performance of individual (Gannon, Doherty and Roper, 2012). This helps the HR manager to motivate their employees and results in better performance of the company.
- Maintaining Work Atmosphere- SHRM is beneficial and plays a very important role in creating friendly environment in the organization. It is the responsibility of the SHRM for maintaining the healthy relations between all the employees and staff (Truss, Makin and Kelliher, 2012). It develops and supports the work culture in order to encourage the team work and sense of belongingness.
- Managing Disputes- SHRM creates a better work culture and motivates the employees to co-ordinate with each other. This can be beneficial for the organization as the Human resource manager’s assists in solving the disputes between the employees and because of it the work will not get affected (Armstrong, 2008).
- Recruitment and selection- The main work of the Human resource manager is to select the efficient staff as it will help the firm to be successful. Recruitment and selection helps in fulfilling the requirement of the staff by hiring the best candidate for the organization.
- Motivate Employees- SHRM encourages mangers to think ahead which helps the company in achieving the organizational goal (Schuler, and Jackson, 2008). By appreciating the work of the employees and by providing them with timely training, workers feel motivated and work with more efficiency and zeal.
- Development and Growth of the Organization- SHRM helps in enhancing the skills of manpower through various seminars and workshops. By the help of efficient staff, the organization can develop and achieve the overall organizational objective.
1.2 Purpose of SHRM activities in Aldi
The purpose of Strategic Human Resource Management activities in Aldi are as follows:
- Recruitment- Recruitment is the process of identifying or searching for the suitable candidates for fulfilling the specific requirement of the job. The purpose of recruitment is to attract pool of candidates to fill the job vacancies. Aldi is planning to expand its business, in that case company have to hire new employees in fulfilling the vacancies (Zhang, Dolan and Zhou, 2009). Recruitment process helps in differentiating the employees as per their qualification and as per the job profile demanded by the company. . It helps in finding the best talent out of many candidates.
- Selection- Selection is the process of choosing the best candidates which fits in the profile. The purpose of the SHRM is to get the right people to do the right job and in the right place. This activity is a very difficult and important for the company's success and for achieving organizational goal. The overall working of the company is depended on the employees working in the organization (Harness, 2009). If the employees are talented, hard-working and efficient. This will help the organization in running successfully in the market. So, SHRM needs to critically evaluate the potential of candidate and select the best person for the specified job. For Example- Aldi is planning to expand their business, in that case company needs to hire the new employees, so SHRM department of the Aldi need to be very efficient to hire the best candidates for fulfilling the vacancies.
- Training and development- The purpose of training and development is to improve the efficiency of the employees. Training helps in updating the knowledge of manpower . It assists in upgrading the skills of employees and they can able to learn the new tactics for performing the same work (Gannon, Doherty and Roper, 2012). The reason for introducing For Example- Aldi is planning to expand their business, in that case company needs to hire the new employees, so SHRM department of the Aldi need to be very efficient to hire the best candidates for fulfilling the vacancies. Morkshops is to enhance the capabilities of employees and to make them aware about the new technologies which can help in making their work easier. By attending these workshops, employees feel motivated and by learning they can increase their working efficiency and will feel motivated. For Example- HR manager hires the professional trainee and arranges the workshops which upgrade the knowledge and skills of the employees and fulfil their responsibilities by train and develop the employees.
- Motivation- Motivation is the inner state that energizes and sustains human behaviour. The purpose of motivation is to increase the morale of the employees (Dowling, Festing and Engle, 2008). By adopting various motivational techniques, like Maslow's hierarchy theory, Herzberg two factor theories, company can raise morale of the employee. It is very necessary to boost up the human resource so that they can perform well and company can able to achieve its objectives. For Example- Employee can be motivated through the recreational activity, training and rewards can boost up the morale of employee.
1.3 Evaluate contribution of strategic Human resource management in achieving the objective of Aldi
The contribution of HR management in achieving the objective of Aldi is as follows:
- Making contribution to organization's Efficiency and effectiveness- The HR department provides the company with the efficient staff by measuring the work performance of employee and properly training them (Chand, 2015). HR management is responsible for solving the difficulties of employees and making them comfortable with the work. The objective of the organization is achieved by the proper management of work by all the employees. So, it is responsibility of the HR department by timely supervising the work of staff and motivate them to work with greater efficiency and effectiveness. For Example, HR manager can arranges the performance appraisal program to motivate the employee. Also, HR manger can plan a activities for the employees which will results in creating new energy in the employees and they can able to perform well which improve the overall organizational efficiency.
- Improve quality and productivity- HR department always boost up the employee morale and solve the problems of employees. By providing training and guidance, the efficiency of employees can be increased (Ananthram,Nankervis and Chan, 2013). Through training, employees can be able to learn new techniques of work which results in greater productivity and results in better output from the employees. The satisfaction level of employees motivates them to give them better quality of work and they can perform their best and it will also help in achieving organization's objective. Example- HR manager of Aldi can use total quality management techniques to judge the performance of the employees and if any improvement is needed it can be timely sought out. This will results in improving the efficiency of the employees and ultimately helps in achieving the objective of Aldi.
- Employee Turnover- HR department contributes in increasing employee turnover by hiring efficient employees. By the hard-working and efficient employees, the quality and productivity of work can be improved (Dowling, Festing and Engle, 2008). It will result in gaining more profits to the company. The more satisfied employees, means more quality of work and by which the company may not have to hire the new employees which reduces the cost to the company. For Example- Aldi can give incentives and involve the employees in the decision making which results in boosting the morale of employees and they will work with greater efficiency.
- Employee retention- Human Resource Manager helps in building the employee morale and raises the confidence. This results in employee retention and creates more satisfied employees. By this, the reputation of the organization in the market increases and the share price of the organization gets enhanced (Maley, 2011). Aldi is planning to expand its business as in that case, they need more employees and for this Company have to create their positive image in the market. By building positive image in market more number of candidates may apply for job in the company. This helps HR department of Aldi to choose the best candidate out of many options available. For Example- Aldi always work in the beneficial of employee. The HR manager works in the direction of developing the employees through training and development program, this helps in motivating the employees morale and by this company can able to retained the employees.
2.1 Analyse the business factors that underpin HR planning in Aldi
There are different factors which can affect the HR planning of Aldi. These factors include Labour cost control, location of operation, and changing nature of work, technological impact, and labour market competition and employee development. All these business factors are described as under:
- Location: Aldi wants to start its business operation in different location of greater London. It is developed country and organization will face huge competition in this market. So, it will also affect HR plan in negative manner. This is because because manager of the organization will face difficulty in hiring new employees at different location. For example, if Aldi transfers present employees to new location then may face travelling issues and are likely to demand more salary (Schuler, and Jackson, 2008).
- Labour cost control: Aldi needs to focus on reducing unnecessary labour cost. So, human resource budget and labour cost are also considered as major factors which can also affect HR plan of Aldi. This is as if Aldi is able to fix the labour budget then there will not be a need to employ surplus labour. It can thus save company from unnecessary expenses.
- Technological impact: Technologies are also changing day by day and it affects the labour requirements of the organization. Sometimes it has positive and negative impacts on HR plan. For example, the technological change can benefit Aldi in terms of reducing time. However training on technology can be a costly affair for the company. Aldi needs to hire all those employees who have appropriate technical knowledge and skills which can increase the total cost of Aldi. So, it can affect whole HR plan.
- Labour market competition: Labour market competition is also increasing day by day and it creates difficulty in terms of reduced sales, decreased profitability, employee turnover and dissatisfied consumers. Including this, due to high competition Aldi cannot fulfil the all requirements of roles and responsibilities. Therefore, high competition in labour market also affects the Hr plan of Aldi (Alcázar,Fernández andGardey, 2013).
- Nature of the business- The HR planning is a very important concept and it changes with the various factors. The nature or type of the business in which the organization is dealing affects the HR planning policy. The number of persons hired, planning for the training of the employees is all decided on the basis of nature of the business. The HR planning is affected by various similar kinds of factors like the size, nature, type of business which makes a lot of difference in the planning activity. Aldi is a retailing company, and the sales people of retailing company needs time to time training for upgrading the skills and knowledge of sales people to deal with the customers.
- Business environment- The internal and external environment of the business affects the planning of the HR. For example, internal business changes in terms of organization policies, changes in department may led to conflict and change in status quo. On the other hand, external environment changes such as decreased consumer demand, increased cost of raw material may affect productivity of company. Through self-assessment of the company, HR manager have to identify the need of the employees and according to that, he will do the HR planning. As per the need, HR will plan for the training and workshop of the employees to make them update about the current scenario and the latest technology (Ananthram,Nankervis andChan, 2013).
- Culture of Organization- Every company is having their own rules, regulation and the working environment. Employees abide by the system which company sets for their staff. All the planning is done according to the prescribed rules and regulation of the company (Zhang, Dolan and Zhou, 2009). HR department cannot apply their own rules over any HR functions. The culture of the organization depicts the working style and the limitations according to which all employees have to work in the organization.
- Demand and Supply of labour : The demand and supply factor also affect the planning of HR. For example- If the demand of the employees are more but the HR manager not getting the qualified candidates, in that case the company needs to hire the professional trainee and train the existing staff to fulfil their requirement. In this way the factor of demand and supply affect the decision of HR planning.
- Policy of Management- The policy of management is the criteria or style of the company beyond which the company will never go. So, HR department while preparing the Human resource plan have to go through policies of management and according to that, all the plans and policies will be structured. Aldi is planning to hire 600 more employees and the recruitment and selection process is designed according to the policies of the company (Armstrong, 2008).
- Impact of technology- By the development of technologies and various tools and techniques, more skilled staff is required to work in those tools and technologies (Alcázar,Fernández andGardey, 2013). HR planning needs to be revised according to the current requirement of the organization.
2.2 Assess the HR requirement in Aldi
As per the given case study, Aldi wants to expand its business in greater London by starting eight stores. This establishment increases the requirements of human resources. According to the case, there are 600 new job openings in organization so; organization needs to hire 600 people for different job positions. There are different source of recruitment and selection such as internal and external source of recruitment. In addition each and every person will require different skills and knowledge to complete their roles and responsibilities in effective manner (Bhattacharya, 2009). Aldi is planning for opening eight more stores in the Greater London, which will create 600 new jobs. This that means there is a need for hiring new staff in the organization for the stores which are going to open by the Aldi. In recruitment and selection process, HR manager plays a very important role (Ross, 2014). All the activities right from the recruitment till the selection and training of employees are done by the HR manager only. HR department is required for:
- For the proper workforce planning.
- To accomplish the work of recruitment and deployment.
- To maintain the work environment and for the healthy relation between the employees.
- For the job satisfaction of employees and also assist the human resource in career development through various training and development program.
- HR department requires financial resources for fulfilling all the process successfully.
Employees will be required in each areas like the finance, marketing, Operations etc. HR needs to update themselves withthe requirements of the company and assign the right job to the right person (Schuler, and Jackson, 2008). HR is responsible for managing all the activities related to the employees training and development and should enhance the skill of employees and make them efficient as well as aid in improving the performance. After hiring appropriate personnel, Aldi needs to make suitable arrangements of training and development programs for improving skills and capabilities of employees for fulfilling their roles and responsibilities in effective manner.
2.3 Human Resources requirements
According to the given situation, it has been analysed that personnel requirements of the human resource working in the organization are of core need. HR department make complete efforts to identify the aspects about new employees at Aldi. Following points will be considered as a need for which new requirements of the new personnels are required at this organization. Identification of these points with respect to the given situation has been stated as follows:
- Number: HR planning is made by considering the number of people who are required. At Aldi, this will depend on the vacancy post or new the demand for new employee.
- Skill sets: Once, the requirement for number has been made, the next thing which is required to be taken care is the set of skills (Millmore, 2007). Hiring of vacant or required post at the Aldi will be taken on the basis of qualification, skills and knowledge that are required.
- Experience: It is considered to be very vital for the post which is required to be made. The experience of the individual counts and therefore, it is essential as Aldi considered the same of an individual in recruiting. For example, for the post of training manager company will prefer experienced candidates as they have knowledge regarding the employees perception and how to train them which helps in better improvement of employees skills and abilities.
- Qualifications: The qualification of an individual who is hired for a position must possess the desired and suitable qualification for the vacant post. For example, if a candidate is applying for the post of HR recruiter then he must have proper education and experience in that field. Candidate having experience in finance field is not applicable for this post.
- Match personnel to organisational requirements: The hiring process done by the HR department of the Aldi is done through matching of personnel to organisational requirement. On the basis of same the, the final selection is made at Aldi. If there is requirement of more staff but organisation is not in condition to afford them then in such case personnel department will try to manage work among the existing employees rather then hiring new. Or it will find out if organisation can recruit members internally then it will not hire new employees externally.
2.4 Critically evaluate how a human resource plan can contribute in meeting an organization's objectives
The HR plan can contribute in meeting an organization's objectives:
- Hiring efficient employees- The HR manager by hiring efficient and qualified staff helps the organization to achieve its objectives. Efficient and hard-working employees can efficiently perform the work and meet the organizational need. For example- the efficient sales staff helps Aldi in increasing the sales by satisfying the customers. The sales people are in direct touch with the customers so, they can take the feedback from the customers and can also know about the preferences and choices of them (Harness, 2009). By satisfying the need of customers, company can increase the sales volume as well as can enhance the profits of the company. So, the HR manager of Aldi efficiently performs the work of hiring right persons at the right job. For example, Aldi may face an urgent need to hire employee s during peak work load. If the HR activities were properly planned then it could have saved the company from issues that may arise in hiring employees during load. The challenges may be with respect to training them, making them learn new responsibilities fast.
- Performance management program- HR is responsible in creating healthy relation between the employees. By this development and training program, employees can upgrade their knowledge and perform well for the Aldi. The firm can build their reputation in the market by hiring satisfied employees and creating healthy work culture (Gannon, Doherty andRoper, 2012).
- Objective of Administration- It is the responsibility of HR manager in Aldi to assist the smooth operation of the organization. They must maintain comprehensive and accurate data on individual employees working in varied departments of Aldi. They are required to maintain employee performance report, terms and condition of employment, training and attendance records, payroll, and the personal detail of human resource (Ruiz, 2015). All the data are properly managed and it helps in smooth functioning of Aldi by precise record-keeping of information related to employees.
- Create the reputation in the market- The more number of satisfied employees results in enhancing the image of Aldi in the market. The satisfaction level of employees keeps them attached with the organization. By working in the organization for a long period, make the employees expert in their work which is beneficial for the company (Millmore, 2007). The perfection comes in the employee work and by which the organization can able to give tough competition to the competitors and create their image in the market. By providing timely training to the existing employees, company can outshine the work of employees. However, the organization can also save the cost of hiring new employees.
Business expansion is one of the major objectives of Aldi and HR plan contributes in attaining this objective in effective manner. HR plan helps in recruiting appropriate number of personnel with suitable skills and knowledge. It helps in completing business operations in appropriate way which will help in business expansion of Aldi.
By summing up the project it has been observed that, the role of SHRM is very important in the organization to meet the objectives and goals. By focusing on various aspect of strategic human resource management, finally conclusion is drawn. Assessed the HR requirements in the Aldi because company is planning for the expansion of the business. The factors that underpin the HR planning in the organization were also discussed. The contribution of human resource plan in achieving the organizational objective is also identified in the project. The actual purpose of HR policies that is control over all the activities of the organization had been discussed and the impact of regulatory requirements on HR policies was also taken into consideration. So, it can be concluded that HRM is very important for the Aldi and the company should follow the policies, and time to time monitor the work of HRM department to improve the effectiveness of the overall organization.
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