Strategic Human Resource Management

Published Date: 02 Nov 2017

Abstract

There is a radical raise in professional maturity in this field and thus personnel management is now shaped as HRM and further developed as strategic HRM. This involves the managerial personnel of an organization and regards. All over the world a great deal of emphasis is placed on strategic implementation of the HRM which indeed had been witnessed during the 1980s and 1990s. The success of the new policies depends on the introduction and implementation of new strategic HRM policies. This research paper makes an attempt to investigate the strategic human resource practices and policies of the Indian Electronics Industry and examine the SHRM effectiveness in electronics industries. It was hypothesized that HR policies and practices would be positively related to organizational effectiveness. The data used in this study were collected form 15 electronics and software companies which have been operating in National Capital region (NCR) undergoing quite a few changes, especially in term of managerial philosophies and tendencies. The Percentile, Chi-square, Mean, SD and Factor analysis were used to analyze the data. Results revealed that the most of the electronics industries practice the following Strategic practices were Strategic HRM focus, functional areas covered by SHRM, facilities, treatment of employees, adopted SHRM activities and SHRM activities. It is also examined that the Software companies those following Strategic HRM practices they achieve its effectiveness by the following practices were workforce plan, participative management, Executive development program, succession and development planning, advance issue identification strategic studies and communication between employee and manager.

Keywords : Electronic Industry, Strategic Human Resource Management, Employee Communication

Introduction

The field of Human Resources Management has undergone significant changes in scope, functions and activities over many years. There is a radical raise in professional maturity in this field and thus personnel management is now shaped as HRM and further developed as strategic HRM. This involves the managerial personnel of an organization and regards. All over the world a great deal of emphasis is placed on strategic implementation of the HRM which indeed had been witnessed during the 1980s and 1990s. The success of the new policies depends on the introduction and implementation of new strategic HRM policies. The strategy implements on job training, career planning, job rotation and management development. In this strategy the HR policies and practices has to be consistent emphasizing on team work, flexibility, employee involvement and organizational commitment. HR processes emphasizes on factors like hiring, maintaining the workforce, which are very much

needed for the highly competitive growing organizations.

Review of literature

Sivasubramaniam and Venkata Ratnam (1998) in their study on strategic perspective of HRM in Indian firms and the effects of alternative HRM strategies on firm and employee performance level, surveyed 109 senior managers in public and private Indian corporations. The results of the study indicated three coherent HR strategies in these organizations. The three strategies were based on the HR dimensions of inducement, investment, and involvement. The study found an amazing fact that HR strategy based on motivation through rewards and punishment accounted for 25 percent of the investment strategy sample. Great premium was placed on employee development. A paternalistic approach to management accounted for 33 percent of the sample. Involvement strategy to achieve a very high level of employee commitment accounted for 42 percent of the sample. business strategies are concerned; the four different business strategies prevalent among the 83 companies were defender (23 percent), analyzer (42 percent), prospector (27 percent), and reactor (8 percent). . In their survey of the relationship between HRM and firm performance, tracked the performance impact of HR strategy through HR performance, turnover rate, employee productivity, strategic performance, and financial performance.

Based on a study of the 15 companies, they revealed that 09 firms had aligned their HR strategy with their business strategy. Sangeeta Tripathi and Nachiketa Tripathi (2001), in their study attempted to investigate the relationship between downward influence strategies and organizational success, which includes Job satisfaction (JS), Effectiveness (EFF) and Intention to quit (IQ). The study is based on a sample of 300 middle level executives of 10 public and private sector organizations. The finding indicate that less use if Asserting Expertise and Negative sanction and frequent use of rewards and personalized relationship would enhance the Job satisfaction, Effectiveness is also likely to enhanced by the use of Rational Rewards. Asserting expertise may increase Intention to quit the organization. If manager’s use appropriate influence strategies, these would be more likely to result in organization success The recent findings of Miles and Snow (1984) suggests that the basic HRM strategy of Defenders will be to ‘build’ human resources, as opposed to ‘acquiring’ or ‘allocating’ them. This means that Defender Company typically engages in intensive training, capability building of people and recruiting people only at the entrée level. In contrast, prospectors typically follow "buy in talent" a strategy that involves sophisticated recruiting at all levels of the organization, limited training, and extensive psychological testing before hiring. By implication Miles and Snow suggest that analyzers should match their HRM strategy to the nature of the product-market, and thus engage in ‘make’ or ‘buy’ HRM approaches as appropriate to the different product-market domains.

An organization gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Integration of the business surplus to the human competency and performance required adequate strategies. Here the role of strategy comes into picture. The way in which people are managed, motivated and deployed, and the availability of skills and knowledge will all shape the business strategy? The strategic orientation of the business then requires the effective orientation of human resource to competency and performance excellence.

Another perspective linkage between business strategy and HRM is Miles and Snow’s 1994) model of organizational adaptation, which deals with alternative ways in which organizations

Define their product-market (strategy) and construct mechanisms (structures and processes) to pursue these strategies. Miles and Snow suggest that there are four basic types of organizational strategies which they term ‘Defender’ ‘Prospector’, Analyzer’ and ‘Reactor’. Each strategy has its own unique organizational features and supporting characteristics. Another survey carried out in 2003 by Accenture (Ashton, Heffner, & Lambert, 2004) confirms these findings; Among 1,000 leaders interviewed, only 34% evaluated the performance of the area as good, although 83% stated it was critical to the success of the business. From this last perspective, HRM should have three key capacities to be considered strategic. Firstly, it should distribute services related to HRM work processes, so all employees could have access to the internal and external channels related to them (communication). Secondly, the area should bring in HRM management consultancy services, performing as partners of executives, business units and business line managers. In this way, it would attend to the specific needs of each of the other departments of the company helping to develop core competences that are relevant to them and that may constitute business differentiating factors. Thirdly, the HRM department should provide more support and strategic services to the organization’s senior management, an option foreseen as the future of the area, but which has yet to be established. Gray L.Neilson, Karla L. Martin, and Elizabeth Powers (2008) in this research "The Secrets to Successful Strategy Execution", found that enterprises fail at execution because they go straight to structural reorganization and neglect the most powerful drivers of effectiveness decision rights and information flow.

They tested organizational effectiveness by having people fill out an online diagnostic, a tool comprising 19 questions (17 that describe organizational traits and two that describe outcomes). To determine which of the 17 traits in our profiler are most strongly associated with excellence in execution, they looked at 31 companies in our data base for which had response from at least 150 individual(anonymously completed) profiles, for a total of 26,73 responses. Applying regression analysis to each of the 31 data sets, they correlated the 17 traits with our measure of organizational effectiveness, which they defined as affirmative responses to the outcome statement "important strategic and operational decisions are quickly

Translated into action. Then they ranked the traits in order, according to the number of data sets in which the trait exhibited a significant correlation with our measure of success with in 90% confidence interval. Finally, they indexed the result a 100-point scale. The top- Everyone has a good idea of the decisions and actions for which he or she is responsible"- exhibited a significant positive correlation with our success indicator in 25 of the 31 data sets, for an index score of 81.

Objective of the study

The basic objective of this study is to know and examine the following areas :-

To examine the status of Strategic HRM practices in Indian Software companies and to understand the underlying factors of these practices.

To examine the extent of practicing of SHRM in software companies. To bring out the SHRM practices in Software companies.

To examine the SHRM effectiveness in Software companies.

METHODOLOGY

A list of few selected information technology software companies operating throughout India, but having operation in National Capital Region was drawn out for research. A total of 15 organizations which are in Electronics and IT companies employing more than 50 employees were selected as a responding unit. The sampling population for the study was chosen on the basis of convenient random sampling technique. Respondent were the employees in human resource management and line positions. The sample for the study consist of 300 respondent out of which 294 sample were from Electronics & IT companies.

FINDINGS : (RESULT AND DISCUSSION)

Strategic Human Resource Management practices are essential to achieve effectiveness in the organization. However, the strategic practices enable organization to monitor and control standards, agree on expectation and practices.

POPULAR SHRM PRACTICES IN ELECTRONICS & SOFTWARE (IT) COMPANIES

According to the percentile analysis the focus of Strategic HRM practices in the rank order is given below. These practices are followed in electronics & IT firms. The Rank % of the respondents of these industries is given below:-

Sl No.

SHRM Factors

Respondents (%)

1.

Organization polices and strategies linked to HRM polices

(94.2%)

2.

Strategic HRM focus

(67.3%)

3.

SHRM facilitate achievement

(65.4%)

4.

Treatment of employees

(64.4%)

5.

SHRM activities found related

(57.0%)

6.

SHRM facilitate Co-ordination

(57.2%)

7.

Functional Areas covered by SHRM

(56.2%)

8.

Organization diagnosis its strategic need

(53.8%)

9.

Line managers most touch with employee

(37.5%)

10.

Adopted SHRM activities

(33.7%)

This study also examined the relationship between the practices of "organization diagnosis its strategic needs by planning of human development talent and implementing strategies to achievement" and other practices. Such as Strategies are linked to HRM Polices, Areas Covered by Strategic HRM, Achievement of Organizational objectives, who ones most touch with employee, Strategic HRM Facilitate, Treatment of Employees, Strategic HRM Activities relates and Strategic HRM Activities Adopted.

The Chi square test was used to examine the relationship. The following practices have significant relationship to organization diagnosis its strategic need by planning of human development talent and implementing strategies to achievement i.e. Strategic HRM focus (P value=.0001), Functional Areas covered by SHRM (P value =.000), Line managers touch with employees (P value =.000), SHRM facilitate (P value =.000), Treatment of employees (P value =.000), SHRM activities relates (P value=0.00), Adopted SHRM activities (P value

=0.00) and other practices like Organization policies and strategies are linked to HRM policies and SHRM facilitates of no of objectives are not significant with diagnosis its strategic needs.

An attempt was also made to examine the order of importance of practices. Mean and standard deviation tools are used. The analysis yields the following practices in the firms. The

Following variables are dominant practices in these electronics industries. They are achievement of organizational objectives,

- Strategic HRM activities (Mean 3.1762, S D 1.23324),

- SHRM activities adopted (Mean 3.0363, SD 1.27628).

- Treatment of employees (Mean 2.6062, S D 1.17720),

- Areas covered by Strategic HRM (Mean 2.5440, SD .69924),

- Organization diagnosis its strategic need (Mean 2.1813, S D 1.05241) and

- Strategic HRM facilitate (Mean 2.0674, S D .79754).

The factor analysis was also done to ascertain dominant factors of SHRM practices. The factor analysis emerged explaining the 43.26%.The items loading on the first factor were SHRM facilitates, treatment of employees and Strategic HRM activities. It was named Strategic HRM process which explains 25.484 percentage of variance and the item loading on the second factor were strategic link to HRM polices and functional areas covered by SHRM practices. It was named as organizational goals accomplishment which explains 17.778 percentage of variance.

From the above Percentile, Chi-square, Mean, SD and factor analysis it is found that most of the software firms concentrate on the following strategic HRM practices:

● Strategic HRM Focus (strategic issues and operational issues)

● Functional Areas covered by SHRM (Finance, Marketing operation)

● SHRM facilitate (Transformation)

● Treatment of employees (Fairness and Equity, Favor balanced decision making and congenial work environment)

● Adopted SHRM activities (Team-based job design, Flexible work force, quality improvement practices)

● Strategic HRM activities (Innovation, Designing consistent policies and practices and strong expectation)

DOMINATE STRATEGIC HRM PRACTICES WHICH ACHIEVE ITS HIGHER EFFECTIVENESS IN ELECTRONICS INDUSTRY.

According to the percentile analysis the focus of Strategic HRM effectiveness in the rank order is given below:-

Rank

Practices

% of respondents

1

Workforce plan

93.8

2

Participative Management

90.3

3

Executive Development

86.1

4

Family work program

87.0

5

Succession and development planning

81.2

6

Advance issue identification strategic studies

72.0

7

Communication between employee and manager

56.7

8

Quality output

49.0

9

SHRM effectiveness attained

46.2

The Chi-square test also used to examine the relationship between "conducting work/family programme and other practices. The following variables have significant relationship. i.e. Participative management (P value = .00),Executive development program,(P value =0.04), Advance issue strategic studies (P value =.000), Communication between employee and managers (P value =.000). There is no significance relation with SHRM effectiveness attainment of all i.e., (team work, communication, enhancing quality, employee participation and empowerment), succession planning & development planning, work force plan support and quality output.

An attempt was also made to examine the order of importance of SHRM effectiveness practices. Mean and standard deviation tools are used. The descriptive statistical analysis of mean and standard deviation which gives higher rating effectiveness by strategic HRM in the organization by its Team work, communication, employee participation and empowerment (Mean 3.56842, S.D 1.5888002), secondly Employee and Manager Communication(Mean 2.5000, S.D .64856),Thirdly Work Force Productivity and Quality Output(Mean 2.2684, S.D .68742),fourthly Work force Planning (Mean 1.9632, S.D .92222),fifthly Executive Development Program and Succession Planning(Mean 1.1632, S.D .37049). Factor analysis combination of few variables will form a factor. Similarly four factors are used to know the effectiveness of the organization. Factor one consist of two items

namely planning and workforce productivity & quality factor were labeled as ‘Employee outcomes’. Factor two consist of two items namely participation management, advance issue

identification strategic studies and employee and manager communication was named as ‘Managerial Decision making and communication’. Factor three consisting of two factors namely management of executive development and succession planning was labeled as ‘Management Development’. Factor four consisting of only on factor workforce planning was labeled as ‘Work force planning’. From the above percentile, chi-square, Mean, SD and factor analysis it is found that most of the software firms achieve its effectiveness on the following Strategic HRM practices workforce plan, Participative management, Executive development program, Succession and development planning, Advance issue identification strategic studies, Communication between employee and manager.

Conclusion

Results revealed that the most of these electronics industries practice the following Strategic practices were Strategic HRM focus, functional areas covered by SHRM, facilities, treatment of employees, adopted SHRM activities and SHRM activities. It was further concluded that the industries under research were following Strategic HRM practices and they achieved the effectiveness by the following main strategies:-

workforce plan,

participative management,

Executive development program,

succession and development planning,

advance issue identification strategic studies and

Communication between employee and manager.

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