HRM Practices That Lead To Organization Commitment And Employees Engagement In Huawei Technologies Co. Ltd.

The research is about analysing the extent of HR function being strategic at Huawei. This research aims to analyse how HRM practices results in commitment and engagement of employees in a Chinese MNC. Firstly, it is investigated how HR strategy in Huawei is contributing in the success of the company. Secondly, it is analysed how role of strategic alignment of HR strategy with corporate strategy and success of the company. Thirdly, it recommends how strategic HRM should be practiced in Huawei. This research sheds light on those HR policies and strategies which are resulting in employee commitment and employee engagement. It uses qualitative methods where interviews with the HR and line managers are conducted. The sample of 10 HR and line managers from Huawei is selected. Findings of the research show that HR function is strategic but still there exist room for becoming fully strategic. Future research directions are provided.

1.Introduction

1.1.Background

HRM (HRM) is one of the most important functions in organizations. It is human resource which allows firms to gain and sustain competitive advantage because this is resource which can never be replicated (Campbell, Coff, & Kryscynski, 2012). Human resource of organization is valuable, inimitable, non-substitutable asset of every organizations. HRM involves searching for employees, selecting them through appropriate means, providing them training and development opportunities and give equitable compensation to employees (Boxall, Purcell, and Wright, 2008). Nowadays, role of strategic HRM is crucial. In knowledge economy, there is a need of such skills and talent that are suitable with current competitive environment (Alcázar, Fernández and Gardey, 2005). Talent and skills are critical for success of organizations because these become foundation of all organizational functions, hence, these allow to perform all functions in an effective manner. Only those organizations become successful which ensure strategic alignment of HRM practices with its business strategies because unless and until HRM practices are not aligned with strategy, HRM does not enforce strategy which can have disastrous impacts. This research is specifically about HRM of Huawei which is a Chinese organization. China is a developing country and it has attracted a large amount of FDI since 1978. Even before financial crisis, there was FDI of US$283 billion in China. This investment growth slowed down during Asian financial crisis in 1997. However, when Asian economy recovered, growth of FDI increased again with a significant speed (State Statistical Bureau, 1998). With this increasing growth of FDI in China, there are many multinational companies (Li et al., 2000) which are striving for HRM as Chinese context is different, so is culture and other factors, therefore, effective practices and policies are different for China ( Luo and Park, 2001). There are many aspects like ‘guanxi’ [i.e. social networks and influential relationships in business dealings] which makes organizational practices of this country different from other countries’ practices (Buller and McEvoy, 2012). Therefore, a Chinese organization is selected to investigate this issue in a greater detail. HRM practices are developed in a different manner in all countries. According to Cooke (2004), strategic aspect is often found missing in development of HRM practice. HRM strategy development is one of core functions which must be critically executed by organizations. However, many organizations remain unable to focus on strategic aspect of HRM. Therefore, it is worthwhile to analyse how Strategic human resource management (SHRM)  is done in context of China.

One of the important aim of HRM and its strategy is to keep employees motivated. There are numerous functions of HRM that are directly or indirectly targeting employee engagement (Zalcman, 2014). Employee engagement is an important issue for organizations. According to Menguc et al., (2015), this term employee engagement refers to association that exists among employees and organization. An employee who is engaged is fully absorbed at the work. Employees of Huawei are engaged at the same time and these employees are ready to take an extra mile for the success of organization (Huawei Investment & Holding Co., Ltd. 2012). Moreover, it is also being reported that they have high level of commitment (Cremer and Tao, 2015). Therefore, this research explores that how HRM practices of Huawei are leading towards commitment and engagement of employees.

1.2.Research Aim

From above section, it has become clear that strategic aspect of HRM is important for organizations, however, it is not practiced and implemented effectively in organizations. There are various concerns about usefulness of SHRM. It is imperative to explore usefulness of this concept so organizations’ managers may become certain that how strategic HRM could help their organization. Therefore, this research aims to analyse how strategic HRM results in commitment and engagement of employees in a Chinese MNC.

1.3.Research Objectives

  1. To investigate how HR strategy in Huawei is contributing in the success of the company.
  2. To analyse role of strategic alignment of HR strategy with corporate strategy and how this is resulting in success of company.
  3. To recommend how strategic HRM should be practices in Huawei.

1.4.Research questions

1. How human resources strategies at Huawei resulted in company success. 

2. What are HR policies and strategies which are used by Huawei for employee commitment, and engagement? Are these policies successful?

3. What are recommendations for strategic HRM practices at Huawei?

1.5.Problem Statement

This research specifically targets Huawei organization. Rebecca (2015) stated employees of Huawei has high level of employee engagement and commitment. This makes it more interesting to study that whether this employee related outcome is being achieved by strategic HRM or not. Pillai (2013) has stated that it is due to HR strategy which is being adopted by Huawei that employees of this organization are committed and engaged. Pillai (2013) has theoretically argued, there is lack of empirical evidence whether or not HRM strategy of Huawei is helping this company to succeed (Chow, Huang, and Liu, 2008). According to Cremer and Tao (2015), Huawei has an important role of human resources committee in its board of directors. This shows attempt of this organization to adopt principles of strategic HRM which says that HRM members must have a place in board room (Warner, 2009). Initiatives related to HR are managed under this committee such that policies of organization are transformed in manner that business objectives are accomplished. One of core purposes of this HR committee is to align management philosophy with HR policy (Lamond and Zheng, 2010). This shows that SHRM exists in this company, as per their books, this needs to be further explored by actually observing how Huawei is doing this in its Chinese subsidiaries. Moreover, this committee also strives to foster policy consistency to ensure that both HR policy and business policy are aligned to each other. Recently, it has formulated strategic plan for HRM such that all of requirements of board of directors are fulfilled. This research will further analyze that how this HR strategy is helping in engaging and motivating employees. This research will focus on strategic alignment of HRM strategies with business strategies. As per suggestion of Need (2006), it will analyse how various concepts related to strategic HRM are implemented in this Chinese company. Huawei is heavily investing in its HR activities, but it is yet to explore with empirical evidence that how its HR strategy and other initiatives are helping in developing employee commitment and engagement. The problem statement of this research study is ‘to analyse whether strategic HRM is effectively implemented or not and how strategic HRM is influencing employee engagement and employee commitment level.’

1.6.Outline of dissertation

  • First chapter sets context of study. It introduces key terms and variables, research aim and objectives and problem statement.
  • Second chapter reviews the relevant literature. Both theoretical and empirical research studies about these variables are reviewed.
  • Third chapter explains the methodology which is adopted for this research.
  • Forth chapter reports and analyses the findings of the research.
  • Fifth chapter concludes this research where research limitations and future research directions are discussed.

 

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2.Literature Review

2.1.HRM

According to Johnason (2010), this function is specifically concerned with the management of human resources. The purpose of this function is to maximize employee performance such that strategic objectives of the employer organizations are fulfilled. HR has primary concentration of management of people along with the systems and policies that facilitate in managing the workforce within an organization (Collings and Wood, 2009). The issues and needs of employees are tackled with the human resource department. Without HRM department, many of the organizational functions’ effectiveness will come into question, hence, the implication is that HRM function could not be ignored which contributes to the organizational success.

HR strategy helps the organization to achieve the overall goals, mission and future aspirations. Purpose of HR strategy is to align the direction of company and needs and attitudes of employees (Purce, 2014) and to develop skills, behaviours and attitudes in employees such that the goals of the organization are effectively accomplished (Bamberger, Biron, and Meshoulam, 2014). With the skills, attitude and behaviour which help in accomplishing goals, organizational efforts could be directed towards organizational goals. HR strategy ensures that HRM practices are developed such that they are  consistent with organizational mission and objectives and it focuses on needs of employees.

2.2.Strategic HRM

SHRM is referred as an approach to manage human resources to achieve long-term objectives with a complete strategic architecture/framework (Hollenbeck, Gerhart, and Wright, 2004). This definition is not the end line; many issues are raised among researchers regarding design and implementation of consistent internal practices and policies so that ‘strategic framework’ could cater business objectives. SHRM is considered as a subjective construct; therefore, one widely accepted definition does not exist. Researchers define differently that how they perceive consistency of internal practices of HRM (Guest, 2011). Tactical HRM covers broader range of HR functions including, recruitment and selection, training and development, compensation and benefits, performance management, occupational safety and health and administrative issues. However, combination of strategy with technical HRM functions, SHRM elicits a more dynamic architecture of organizational HRM function catering HR needs and making HR functions more strategic in nature; giving HRM activities and functions a more broader-look; and making use of them up to their full potential to achieve organizational objectives, mission and goals while also aligning with organizational culture, values and beliefs (Boxall and Purcell, 2011). It can be analysed that both strategic and tactical HRM has their own place. For an organization to have effective HR strategies, there is a need to have appropriate attention for both tactical and strategic aspects of HRM.

Every organization must has to give desired appropriate position to both tactical and strategic HRM. Both have their own functions and amalgamation of both give rise to strategic HRM that leads towards success of organization. Tactical HRM involves performing administrators tasks which are visible to employees as these tasks are related to ongoing and daily work issues (Kaufman, 2002). Most common tactical HRM tasks involve activities like interviewing, recruitment, payroll administration,  risk management and hiring etc. On the other hand, strategic HR considers overall picture of business’s growth and it emphasizes on ways to implement long term goals that contribute in organizational success (Harris and Ogbonna, 2001). Future of HR is secured with its strategic role. Both roles are important and none of them could be neglected for being competitive in market (Need, 2006). According to Cooke (2004), many of organizations remain unable to provide appropriate importance to tactical and strategic functions. The purpose of this research is to analyse strategic HRM in Huawei, therefore, it is analysed that how strategic and tactical roles are performed by HRM of Huawei.

Werbel and DeMarie (2005) and Wei (2006) have emphasized to establish a ‘fit’ between total business strategy and HR practices. Most important aspect of strategic HRM is to ensure alignment in decisions which are related to human resource with other decisions of organizations. Integration is about mixing of HRM activities with organizational planning process, mission and goals (Perry, 1993; Lengnick-Hall &Lengnick-Hall, 1988). One of the most important features of Strategic HRM is ‘fit’, that depicts integrative role of practices in HRM and how they are rationalized to total organizational strategy of a firm. Fit refers to full employment of human resources to achieve organizational goals (Delery and Doty, 1996). Bratton and Gold (2012) defined ‘fit’ or ‘integration’ as total pattern of all human resource activities planned that are aimed to achieve overall organizational goals. Scholars imply two types of ‘fits’: vertical fit and horizontal fit. According to Alagaraja (2013), horizontal integration is referred as harmonization of different human resource activities, whereas, vertical integration is defined as the congruence of strategic management process of organization and HRM practices (Giannakis and Harker, 2014). Horizontal integration needs to be operationalized while making effective and efficient use of human resources, while vertical integration is analysed as a crucial step towards achieving organizational objectives through initiation of human resource activities that are made parallel with strategic objectives of a firm (Kepes and Delery 2007). Though, it has always remained a challenge for management to ensure both vertical and horizontal integration at same time (Gerhart, 2007). Though, integration is often ensured for other functions in an effective manner. It was found by Ngo, Lau, and Foley (2008),  that HRM integration is often missing in even many renown organizations. Leepak et al., (2006) and Gerhart (2007) found vertical integration was missing in many Chinese organizations. This makes it more worthy to explore that how vertical and horizontal integration of HRM is ensured in Huawei.

Beer (2015) and Marler and Fisher (2013) asserted that horizontal integrations is important . This is what actually horizontal integration of HRM practices is. This is highly important for managers to ensure that HRM practices are not cancelling out each other. There must be harmony and consistency in all HRM practices (Allen and Wright, 2006; Khatri and Budhwar, 2002). Vertical integration is to design HR activities that could achieve business objectives. According to Schalk, Timmerman and Van den Heuvel (2013), vertical integration implies alignment of strategic management process and organizational HRM activities and practices. Schultz, Bennett and Ketchen  (2015) is of view that vertical alignment is central to human resource system (Sheilds et al., 2015).  For making HR to play a strategic role in an organization, it is important to achieve both horizontal and vertical fit. Though there is a consensus on achieving these fits but there are several factors such as organizational internal and external environment that actually influence these fits. The examples of challenges from external environment are pressures from regulatory groups to implement certain HR policies and economic conditions (Ding and Akhtar, 2001). On the other hand, internal environment puts challenges in form of organizational culture, employees willingness and top management commitment towards achieving horizontal and vertical fit (Warner, 2004). Following literature covers internal organizational factors that may influence on HR becoming strategic.

2.3.Strategic Role of HRM

There are various typologies offered by researchers for HR roles. Martell and Carroll (1995) presented HR roles in terms of delegator, technical expert and innovator. Storey (2007) presented HR roles of advisors, handmaidens, regulators and change makers. Jackson and Schuler (2000) have presented HR roles of partnership, change facilitator, enabler, strategic, innovator, and monitors. Up till now, typology presented by Ulrich (1997) is considered more viable because it considers people, processes, strategic and operational aspects and presents role of administrative expert, employee champion, change agent and strategic partner. But with time, role of HRM is changing and there is intense need for developing a strong link in HRM and organizational strategy to make HR more strategic in nature. Resource based theories has emphasized this need (Prahalad and Hamel, 1990) and researchers like Barney and Wright (1998) has highlighted role of HR in attaining sustainable competitive advantage. Changes have redefined role of HR and many researchers (like Ulrich, 1997; Bowen, Galang and Pillai, 2002) suggested the HR role as business partner. Borckbank (1999) mentioned that there are three roles of HR professionals i.e. to analyse and understand context of business, to strategically plan HR on basis of high-value added business objectives and to ensure that all HR practices are aligned with business objectives. Huselid, Jackson and Schuler (1997) further elaborated that strategic HR capabilities are more important than technical HR capabilities (Wright et al, 1998). This analysis shows that HR is supposed to play strategic role in order to ensure strategic HRM practices in MNEs. The strategic role of HRM suggests that HR department should work as business partner. This research will analyse how HR is acting as business partner to ensure strategic horizontal and vertical alignment. Moreover, HR must has to analyse and understand context of business, to develop strategic plan and ensure alignment of HR practices with business objectives. In this research, these arguments related to strategic role of HRM are used to assess how HR department of Huawei is performing these functions. This research analyses the strategic functions of HR to analyse strategic HRM (Hutchinson, 2014). Literature has identified role of strategic HR in effective implementation of international business strategies as well because horizontal and vertical alignment is as important for international business as it is for domestic businesses (Jamali, El Dirani and Harwood, 2015; Shields et al., 2015). As Taylor, Beechler, and Napier (1996) stated that irrespective of fact that whether organization is working in domestic or international environment, it has to be ensured that human resource strategy is dropped down from business strategy.

Welch and Björkman, (2015) highlighted that in multinationals importance of strategic role of HR increases. Osabutey, Nyuur and Debrah (2015) asserted that HR managers are required to be sensitive to local conditions and maintain global perspective as same time. When a business goes into international market, it cannot work as seamlessly as it was doing in local market. There are many contextual factors which needs utmost attention from HR managers. Every country is characterized by its particular business system which consists of certain cultural and institutional factors. Cultural factors involve collectivism, masculinity, power distance, long term orientation and uncertainty avoidance (Hofstede and Peterson, 2000). Likewise, institutional factors are mimetic, coercive and normative pressures from institutions (Boon et al, 2009). Role of strategic HRM is to consider these contextual factors as well (Samnani and Singh, 2013). As previously mentioned, strategic HR must has to consider contextual conditions and then it should introduce any HR practice (Verma, and Sharma, 2015). This research also focuses on this aspect of strategic HRM where it is analysed that how Huawei ensures alignment of HRM practices with contextual factors.

Further, there are different levels of HR roles and all levels have some strategic element (Beadles et al., 2015). HR strategic role is an amalgamation of higher level plus operational level functions (Huselid et al, 1997) and all levels have some strategic aspect (Ugheoke, Isa and Noor, 2015). Levels identified by Morris et al., (2015) and many other researchers are strategic, managerial and operational levels and these roles complement each other. Kuipers and Giurge (2016) mentioned that operational level HR plays traditional functional role. Managerial level of employees is required to organize operational sub-functions and strategic level undertakes long term HR planning. According to Kaufman (2002), HRM functions are either tactical or strategic. Both these typologies have their own pros and cons. Strategic HRM focuses on entire organization and it is concerned that how overall objectives could be achieved. Such organizations are data driven where focus is more on productivity and it is continuously monitored that how objectives are achieved. Biggest advantages is that it allows to be responsive to both internal and external environment (Jacques, 1999). Importance of both strategic and tactical HRM is critical to success of organization (Kaufman, 2007). These all functions combined together to make strategic HRM. In this research, it is further analysed that which HR roles are played by tHR department of Huawei.

Though Huawei has presence of HR in its board room, it is critical to analyse which role is being played by its HRM department in strategy development process. Divergent views on strategic role of HR highlights that sometimes HR plays critical role in strategic decisions, however, majorly, it remains unable to perform function in development of corporate strategy (Schuler, 1994; Ulrich, 1997; Huselid et al, 1997). HR plays role of implementer rather than strategy developers because of false assumptions of top management that HR is a support function and it cannot have a significant place in strategy development (Huselid, 1997). Su, Wright and Ulrich (2015) stated lack of capability of HRM specialists as strategic business partner. However, it is emphasized that to ensure strategic HR, it is important for HR specialists to develop capabilities of strategic business partner and play role of strategic business partner effectively. However, Akingbola (2013) said HR must play strategic role because this helps in improving its effectiveness. Ridder, Baluch and Piening (2012) stated that strategic HRM contributes in organizational success. It will be analysed that how Huawei is playing strategic role by being strategic business partner. In this section, it has been analysed that strategic HRM is quite important for organizational effectiveness. Next sections shed light on outcome constructs of SHRM.

2.4.Employee engagement

Strategic HRM leads to higher level of employees engagement. This section aims to define and explain term ‘employee engagement’. Menguc et al., (2015) said employee engagement refers to association that exists among employees and organization. An employee who is engaged is fully absorbed at work. Engaged employees also have enthusiasm about their work and they are always ready to take such actions which are positive for success, interest and reputation of organization (Michel et al., 2015). Employee engagement is considered as an asset which is related to relationship that exists among employees and organization. Engaged employees refer to those employees that show full concentration and enthusiasm for their work (Menguc et al., 2013). These employees take such positive actions that are good for interest and reputation of organization (Crawford et al., 2014). Though, there are many academic critiques of this construct, this concept is well practiced and established in HRM (Carmeli, Dutton and Hardin, 2015). There are many advantages of employees engagement. According to Lockwood (2007), it is linked with employee satisfaction. Engaged employees are more likely to be satisfied. In a same manner, their productivity is also high. Engaged employees have low level of turnover hence, they are retained for long time. They become a source of innovation. Furthermore, they also increases productivity of organization. This shows that employee engagement has great implication for organizations. Therefore, even there are academic critiques of this concept, it is widely practices in organizations like Huawei.

The very first definition of this construct was being provided by Kahn. According to Kahn (1990), it refers to putting one’s selves into work roles. Those employees who are engaged are physically, cognitively and emotional present at work, hence, they perform their work with full dedication. Later on Harter, Schmidt and Hayes (2002) defined employee engagement as the commitment, involvement and satisfaction of employees to their work and job and they consider it as a component of employee retention (Huang et al., 2016).  There are certain approaches. Firstly, need-satisfying approach considers it as expression of an individual’s preferred self in his/her work and job (Luthans and Peterson, 2002; Kahn, 1990). Secondly, there is burnout antithesis in which engagement is considered as involvement, energy and efficacy which are opposite dimensions of burnout namely cynicism, exhaustion and lack of accomplishment (Schaufeli, Taris, and Van Rhenen, 2008; Macey and Schneider, 2008). Third approach is satisfaction-engagement which considers it as technical form of job satisfaction. As showed by Gallup’s survey, there exists strong correlation among employee engagement and job satisfaction (Harter, Schmidt, and Hayes, 2002). Forth one is multidimensional approach where there has been made a clear distinction among job and organizational engagement. This approach focuses more on antecedences and consequences of employee engagement (Saks, 2006). This research analyses employee engagement of employees of Huawei. As there are various definitions of employee engagement, it is important to decide most appropriate definition. For this research, definition of Kahn (1990) has been selected due to its proved validity. Rationale for selecting this definition is that it is more valid and it is widely accepted in academic literature related to employees engagement. Kahn (1990) defined employees engagement as it refers to putting one’s selves into work roles. Those employees who are engaged are physically, cognitively and emotional present at work, hence, they perform their work with full dedication. Therefore, while analysing engagement of employees at Huawei, it will be analysed how employees are physically, cognitively and emotionally present at work.

In this section, it has been analysed that what is employee engagement and how it is defined by various authors. Aim of this section was to conceptualize this variable, before it is explored in context of Huawei. This has been effectively done in this section. Like employee engagement, another employee related outcome is employee commitment which is also part of this research study. Therefore, next section sheds light on employee commitment.

2.5.Employee commitment

The aim of this section is to conceptualize ‘employee commitment’. This construct belongs to the field of industrial and organizational psychology and organizational behaviour. This refers to psychological attachment of an individual to organization. Many of research studies related to this variable were aimed to analyse how workers are feeling about their jobs and how these workers can become more committed (Shore, Barksdale and Shore, 1995). There are many positive outcomes of this construct. Most commonly, improved job performance, decreased turnover and improved organizational citizenship behaviour are few of consequences of employee commitment. When employees are committed, they become more likely to work for organizational well-being, therefore, their performance increases and their turnover intention decreases(Meyer, Becker and Vandenberghe, 2004). This tells that this employee commitment is an important outcome for organizations, as there are many advantages of this construct. 

There are many other definitions of organizational commitment. Most common definition has been provided by Allen and Meyer (1991) in which many definitions has been integrated. This research also rely on three component model of commitment which was presented by Allen and Meyer (1991). It is proposed that there are three psychological states which refers to employee commitment. First psychological state is affective commitment which is positive emotional attachment of employees to their organization. This was said as ‘desire’ component of this construct. An employee that can be called affectively committed to organization is more likely to be identify himself/herself with organizational goals. Moreover, such employees also show their desire of being part of organization. There is no coercion on such employees to be part of the organization, but they stay with organization because they want to be (Meyer, Allen, and Smith, 1993). Second psychological state is named as continuance commitment which is based on ‘need’ component. An individual having continuance commitment is based on gains and losses of working in an organization. They stay with organization due to their investment they have made. Likewise, they do not leave organization due to costs associated with leaving organization. There might be very high economic and social costs of losing the organizational membership, therefore, such employees remain committed to organization (Allen and Meyer, 1996). The third psychological state is known as normative commitment. Due to certain feelings of obligation, such individual shows commitment to organization. Foundation of such feelings is on strain before and after joining an organization. For example, when organizations train their employees, they become morally obliged to stay with organization. They feel that as organizations have invested money on them, so they must stay with the organization because they are ought to do and they want to repay debt. Therefore, rationale for their commitment to organization is that employees feel obliged to be committed (Meyer et al., 2002). From literature, it can be observed that this is affective commitment which is actual commitment of employees, and it is expected that its outcome is better than other psychological states. Generally, when employees are committed to organization, there are higher chances of organizational success. Therefore, this research has considered this employee related outcome. This will be further explored in this research. In this research, all types of employee commitment will be analyzed. It is also important to mention that there is criticism on this model from few researchers. This model is criticized because it has less consistency with empirical findings. Researchers often criticize it saying that this is a model of turnover as it highlights why organizations are staying with organization (Hackett, Bycio, and Hausdorf, 1994). Though few have criticized it, but others has accepted that this three component model is a comprehensive model of organizational commitment and it considers various dimensions of commitment. Moreover, it is widely accepted in literature (Meyer and Herscovitch, 2001). Therefore, this model is being selected.

2.6.Strategic HRM and employee related outcomes

Strategic HRM is based on this tenet that way how HR practices are aligned with business and corporate level strategies help in achieving success. This organizational success is based on many employee related outcomes (Ding and Akhtar, 2001).  When a strategic role is played by HR department, there are higher chances that employees will show positive job related attitudes because all of HR practices complements each other and desired positive attitude of employees is reinforced through various HR practices. Many times, attitude of employees remain negative due to fact that there is no link in different HR practices.  employees do not understand that why certain practices are implemented in organization because all practices are not aligned with each other. This results in negative employee related outcomes (Kaufman, 2002). Storey (2007) said that with clear vertical and horizontal alignment, employees become committed to organization as they become able to see direct link that how they are performing and contributing in organizational success. Moreover, alignment with business strategy also improves employee engagement level (Daley, 2006; Alfes et al., 2013). When goals of every organizational function is consistent with business strategy, it enhances shared responsibility of employees. With this, all employees become able to develop shared responsibility of organizational goals such that they strive to do their job with full vigor and dedication (Rankin,  2013). This vigor and dedication indicates their engagement level for their work.  With consistent goals of all functions, employees do not come into competition with each other, this enhances their psychological safety. They know that they do not have to compete with each other and they all are working for welfare of organization. Their cooperation for working with each other enhances. With clarity of goals, it is ensured that there is no confusion that what is expected from them and which behavior is desired. This sets a clear direction for them to work on respective goals (Lepak et al., 2006). Moreover, when there is no confusion and employees could easily see link between their efforts and contribution in organizational goals, their enthusiasm improves which ultimately leads to improved employee engagement. When there are efforts to align departmental goals with business strategy, clearly established goals are developed (Chadwick, Super, and Kwon, 2015). This clarity in goals improves involvement level of employees which leads to employees engagement. When all of HRM practices are developed on basis of consistent goals, it is likely that they all are giving same message to employees. With this, they are in position to have improved level of engagement (Warner, 2009). Line managers play an important role in implementing HR strategies, therefore, their role could not be ignored when role of strategic HRM is under discussion (Albrecht et al., 2015). Therefore, this research also sheds light on role of line managers as implementer of strategy. As implementer of HR strategy, line managers are in better position to enhance commitment and engagement level of employees. Therefore, through source of line managers, strategic HRM improves organizational commitment and employees engagement (Cunningham, 2016; Truss et al., 2013). Though, there exists very few empirical studies to support these arguments, therefore, this research will further explore that whether or not strategic HRM is resulting in improved employee engagement and employee commitment.

Following figure depicts framework which is studied in this research.

 

 

 

 

 

 

 

 

2.7.Conclusion

In this chapter, strategic HRM and its role in developing employee commitment and employee engagement is analysed. While analysing importance of strategic HRM, it is found that all HRM functions are influenced with strategy. There is a need to ensure both horizontal and vertical fit for achieving effective position of HR strategy. Many internal organization factors helps in accomplishing strategic role. Though, many of these arguments are taken from previous studies, it is found that there exists gap in literature as strategic HRM and its role in developing employee commitment and employee engagement is not fully explored yet. Therefore, this research studies strategic HRM at Huawei.  In this research, strategic aspect of HRM at Huawei is explored with various angles. This has helped to develop better understanding about implications of strategic HRM.

 

 

3.Chapter Three: Research methods

3.1.Research philosophy

Commonly, business research uses either positivism or interpretivism research philosophy. As per nature of present study is about strategic HRM at one of Chinese enterprises, interpretivism research philosophy is selected where interpretation of elements of this research study is being done (Blaxter, Hughes and Tight, 2010). To explore strategic HRM at Huawei, human interest is also integrated as required by interpretivism research philosophy. As dictated by Goodwin (2002), the researcher assumed that reality can only be accessed through social constructions which are instruments, shared meaning, consciousness and language. This is assumed because research issue of strategic HRM is a socially constructed phenomena and it could be explored further with the help of shared meanings, consciousness and language. Meanings of current research phenomenon are explored through this philosophy as this is not a fully explored phenomenon and it could be explored in a subjective way. The belief of research is relativist ontology in which it is perceived that reality is based on meanings and understandings on experiential and social levels, therefore, strategic HRM is considered as a relativist concept where it is explored at social level.

3.2.Type of investigation

Bryman and Bell (2007) said there are two alternatives i.e. quantitative or qualitative. Consistent with research philosophy, qualitative research type is selected for this research. Rationale for its selection is it permits to conduct detailed and in-depth analysis (Blaxter, Hughes and Tight, 2010). Openness could be ensured and responses of participants could be provided with more openness. Individual experiences of participants could be stimulated through qualitative research type (Collins, 2010). Hence, this type of the study will allow to draw a clearer and detailed picture of influence of strategic HRM on organizational commitment and employee engagement. Other alternative which is not selected for this research is quantitative research type. Rationale for not selecting quantitative research type is that it provides superficial and narrower dataset (Mark, Philip and Adrian, 2009). It is not possible to provide detailed narrative through quantitative studies. However, qualitative studies allow analyze ‘how’ and ‘why’ relationship is developed between variables, hence, this study could be completed appropriately with help of qualitative type (Cooper and Schindler, 2007). Moreover, use of standard questions often lead to structural bias hence valid results could not be gathered (Guba and Lincoln, 1994). Structural bias refers to bias responses of respondents in which they are tend to either show their agreement or disagreement with given statement. With the use of quantitative type of study, structural bias which is quite dangerous could not be reduced, hence, it is considered appropriate to conduct qualitative study (Creswell, 2009; 2012). Therefore, to avoid these weaknesses of quantitative research type, in this research, qualitative research type is selected.

3.3.Data collection

Ramamurthy (2011) and Easterby-Smith, Thorpe and Jackson (2012) stated that data can be collected either through primary or secondary sources. Primary data sources are first hand data while secondary sources are second hand data. Present research study uses primary data sources. This research does not directly rely on secondary sources because it is important to understand assumptions which were used when data was collected for first time. Therefore, it often becomes difficult to define data as used by primary researcher (Saunders, Lewis and Thornhill, 2007; Mark, Philip and Adrian, 2009). As secondary sources permit researcher to rely on some other researcher’s effort, there is no surety that primary researcher collected data by avoiding all sorts of bias and his/her data is not questionable, so it becomes riskier to use secondary sources (Remenyi et al., 1998).  It was not possible to access secondary data related to strategic HRM, organizational commitment and employees engagement at Huawei. Hence, secondary data sources are not preferred for present research. However, it is noteworthy to mention secondary sources are used in literature review and it is ensured that only relevant studies are used. Bias related to secondary sources are minimized by selecting articles from peer reviewed journals.

Primary data source permits researcher to address targeted issue in a direct manner. Researcher has complete control over data collection process, therefore, it is possible to handle research issue in a better manner. Primary data can be interpreted and examined in a better way as per need of research. It provides recent data which permits researcher to answer research questions in an accurate manner (Easterby-Smith, Thorpe and Jackson, 2012). Therefore, this research relies on primary data collection for examining role of strategic HRM on organizational commitment and employees engagement.

3.4.Methods of data collection

For data collection, interview method has been selected. Purpose of interviews is to explore views of managers from Huawei related to role of strategic HRM in organizational commitment and employee engagement. Rationale for selecting interview over other methods like questionnaire is that it will provide ‘deeper’ understanding of research problem (Bryman and Bell, 2015). Currently, field of strategic HRM is not fully developed and it is not fully known that how this has an influence on organizational commitment and engagement (Muqaj, 2006). Focus of present research is on how strategic HRM could lead to employee engagement and commitment, specifically, in context of Huawei, and this is not explored yet, hence it was more feasible to rely on interview methods to explore this view. One of challenges related to this data collection method was related with access to study participants. However, with help of authorized cover letter from university, it was communicated to Huawei that this research is conducted for academic purposes. Hence, access challenge was effectively managed.

Semi-structured interviews are selected. This type of interviews has several key questions which help in defining research areas that has to be explored. This type also permits to diverge from pre-determined questions in order to pursue an idea in a greater detail (Saunders, Lewis and Thornhill, 2003). This flexibility allows to discover or explore information that is not previously considered important by researcher. Most importantly, this type of interview provides opportunity to conduct in-depth analysis (Mark, Philip and Adrian, 2009). Hence, considering these characteristics of semi-structured interviews, this type is selected for this, research. This has helped to answer research questions by directing interviews as per responses of interviewees.

3.5.Interview guide

As per suggestion of Saunders, Lewis and Thornhill (2009), before conducting interviews, an interview guide was being developed. This interview guide is constructed using emergent themes from literature review. On the basis of key themes, interview guide was designed. Key themes which were used for interview guide are ‘HRM strategies’ ‘Strategic alignment’ ‘Organizational Commitment’ and ‘Employees Engagement’. Moreover, relationship between these key themes is also explored in the interview questions. Arguments of various researchers has led to development of neutral interview questions. To get as much information as possible, it is ensured to ask good questions that answer research question. As Sekaran and Bougie (2010) suggested all questions were open-ended which were understandable and neutral.

3.6.Pilot study

As Tharenou, Donohueis and Cooper (2007) recommended, before starting actual data collection process, pilot interview was being scheduled. Purpose of this interview was to confirm whether or not interview guide is understandable, clear and capable of answering research questions. As per response of interviewee, interview guide is modified. Feedback of interviewee was also taken to ask him/her about difficulty he/she faced while answering questions.

3.7.Process of conducting interviews

As Sekaran (2003) suggested before starting interviews, it was ensured to provide sufficient information to participants regarding current research. Aim and objectives of current research study were communicated to participants. It was being communicated that interview may last for 30-45 minutes and it will be tape-recorded which will later be transcribed. It was also communicated to interviewees that how ethical standards of research are followed in this research (Blaxter, Hughes and Tight, 2010). Most importantly,  anonymity and confidentiality of participants was being assured (Bell, 2010). It was ensured that interview takes place in an area which is distraction free (Bryman and Bell, 2007). However, majority of interviews were being conducted in ‘meeting room’ of Huawei. To gain access to interviewees was challenging, but university authorized letter helped to solve concerns of managers of Huawei. Initially, they were reluctant to participate but when it was told to them that this is an academic project, they participated wilfully.

3.8.Sampling and sample size

This research is specifically conducted about Huawei, hence, it is most feasible to select sample from this organization. Sample size of 10 managers is decided for this research. The purposive sampling technique is used for selecting sample. Purposive sampling technique sets the certain criteria for selection of sample (Alvesson and Deetz, 2000; Collins, 2010). The criteria set for this research is knowledge, understanding and experience of participants related to the research issue. Those managers of Huawei are selected for this research that possess sufficient knowledge, experience and understanding related strategic HRM.

3.9.Data analysis

In this research, qualitative data has been collected through the interviews. To analyse qualitative data, thematic analysis technique is selected for exploring the role of strategic HRM in employees engagement and organizational commitment. This technique is selected because it helps in presenting and analysing responses as per certain themes which could answer research questions (Altheide, 1996). Interview data was being transcribed into simple English language. Then researcher started to analyse data for identification, examination and record of themes and patterns related to strategic HRM and its role in employees engagement and organizational commitment.  As suggested by Angen (2000), there were six stages which helped to conduct thematic analysis. Firstly, researcher familiarized himself with data by reading it again and again. Secondly, initial codes were generated. Thirdly, researcher searchers for themes among codes. Then, these themes were reviewed. Then, these themes were named and defined. Finally, the final report of analysis chapter is produced. Examples of themes are ‘strategic HRM’, ‘organizational commitment’ and ‘employees engagement’. While examples of sub-themes which are constructed for this research were ‘organisational culture’, ‘business partners’, ‘vertical and horizontal alignment’, ‘devolution’ etc.

3.1.Generalizability, validity and reliability

Reliability refers to collecting consistent data for research and for this, the interview guide is developed which has provided a structure to interview. This ensured that only those standardized questions are asked which could fulfil aim (Alvesson, and Deetz, 2000). Validity is to ensure that instrument collects intended data, therefore, themes from literature were used to ensure validity (Altheide, 1996). Furthermore, validity is ensured by taking the suggestion of one of the teachers of strategic HRM.  Their expert suggestion has helped to ensure that valid data is collected for this research. This is a qualitative study, and generalizability is not the purpose of qualitative studies. Focus of qualitative studies is on transferability. This research has ensured the validity and reliability, hence, its results could be transferred to different context.

3.2.Ethical considerations

In this research, all ethical standards for conducing business research are duly followed. Anonymity and confidentiality of participants is ensured. Personal data will not be shared with anyone without getting consent from participants (Saunders,  Lewis and Thornhill (2012). Interviewees were not being forced to answer the interview questions. Consent form was being signed from them before their participation [Appendix B]. If any of them wanted to withdraw, he/she was not forced to continue. Interview process did not harm any one in any manner. Moreover, while analysing data, no fabrication was done. Secondary sources used in literature review are properly referenced and cited (Easterby-Smith, Thorpe and Jackson, 2012). It is also considered that good will of Huawei is not affected negatively with this research.

4.Chapter Four: Findings and Analysis

Purpose of this chapter is to analyse interview results. Interview results are presented in a narrative manner, where thematic analysis technique is used. This chapter has presented findings for two objectives of this researcher where it is explored that how strategic HRM could contribute to organizational commitment and employees’ engagement.

4.1.Strategic HRM at Huawei

4.1.1.Long term Vision

Long term vision of Huawei is becoming “First choice for everyone”. Huawei wants to lead market through its innovative product line and this innovation will be driven by its employees. While interviewing HR manager she explained that:

“Here comes role of HR, in order to achieve such a mission of Huawei of being market leader through innovative products, company is offering its employees benchmark salaries. Paying employees with high salaries makes employee satisfied and hence they work with their full potential for better performance of company.”

Interviewee continued that though paying high salaries add to cost of company, it is balanced through having a leaner structure with right number of people at right job attaining high productivity level. This also results in improved commitment level of its employees. This is consistent with previous findings of Rauch, Frese and Utsch (2005) where it was found that high monetary rewards which are paid to employees are helpful for retaining best talent from market.

4.1.2.Organisational Culture

Huawei has an open culture where employees are encouraged to interact with each other and share knowledge. This helps in improving commitment and engagement of employees. Interviewee stated:

We are encouraged by the HR to have regular interaction and conversation with employees and to know about their problems and grievances. We believe in motivating and helping each other to achieve organisation goals”

It is analysed that Huawei has a high performance culture with HR having major responsibility of holding up to this culture through designing right compensation mix and training policies. Embedded value within Huawei could be easily understood through the HR manager stressing on HR being a cost saver, it considers HR as the cost saver. As it is showed in literature that strategic role of HRM allows it to be a cost saver, hence, this explanation found at Huawei is quite consistent with the arguments Renwick (2003). This explanation certainly clarifies culture of Huawei of viewing HR as investment. This is useful in highlighting the strategic orientation of Huawei. The organizations that do not believe in implementing strategy implementation see HR as a cost (Strohmeier, 2006). But this organisation has considered it as an investment, this empasizes how it has successfully adopting the strategic orientation of HRM. HR is involved in all important decision making process, showing trust of top management on HR. The interviewee stated:

“Two years back we had to layoff hundreds of third party employees due to several issues relating to business cost but this couldn’t be done without the approval of HR head that had the ultimate decision of employee layoff”

The above quote of interviewee showed that importance is given to HR department for taking all the important decisions.

Culture within Huawei is certainly of empowering its employees by giving them the freedom of choosing actions to achieve organisational goals but with responsibility resting on them. As one of the interviewees mentioned that:

“The culture of Huawei has provided us with sufficient authority for decision making. But this authority does not come alone. We are also considered responsible and accountable for our actions.”

“Managers of Huawei are quite supportive. They are always ready to take steps for the benefits of employees.”

This is consistent with the findings of Aaker (2008) who stated that management beliefs and values have constituted a culture where people are seen as more important than the company products. The underlying value behind this notion is that it’s the people which drive business not its product.

4.1.3.Ability and Support of Senior Managers    

Interviews with line managers and HR manager made it clear that Huawei has a culture where top management takes more interest in people related activity. This is consistent with the internal environment characteristics that contribute in strategic HRM (Warner, 2004). HR in Huawei has clearly moved to a place where it is seen as important function of the company. HR manager mentioned that HR representatives are in the top meeting where strategy formulation is done. One line manager stated:

“HR people are not only part of these meeting but also have the equal opportunity to contribute towards better achievement of organisational goals.”

4.1.4.HR Role preference

Evidence clearly suggests that HR is involved in process of strategy formulation to its implementation. As the HR manager explained the instance when workers refused to go to market due to the lesser incentive given to them and HR in Huawei worked with top management to design policy that helps in motivating employees to go in market, this helped them to increase the commitment and engagement of employees. This shows that HR is really considered an important role of the Huawei. Many of its aspects could not be managed without the integration of human resource department at the strategy and development process. Though, it could be negative in certain situations as HRM is expected to be involved in those issues as well, in which it lacks expertise. This is consistent with the views of Schuler, Jackson and Storey (2001).

4.1.5.Business Partners

Basically, business partners are front-line HR persons who have responsibility to directly interact with business stakeholders, provide them solutions and help them in achieving their objectives. (Wright, 2008). At Huawei, the responsibility of business partners is to interact with management employees and deal with their people related issues. So all departments have one junior and senior business partner, who has office in their department and deal with all of their HR related issues. The implementation of HR functions like promotion and talent identification and rewards is being done by these business partners. One of the line managers from Huawei mentioned that:

“I am from finance department and my all HR related issues are handled by business partner. I do not have to find out who is dealing with payroll, recruitment issues, benefits, pays or promotions in HR department. All I have to do is that I have to contact Finance-Business Partner of my company, and he guides me and resolves my all HR related issues”

This shows that when business partners are made, it creates an ease for top management of HR to work on strategic issues in an effective manner. the conflict between line and HR is also reduced, hence, it becomes more easy to focus on strategic aspects (Järvenpää, 2007). One the interviewees from HR department mentioned that:

“Strategy formulation is from HR back-end, but somehow business partners are responsible for execution of strategies and policies formulated by us.”

4.1.6.Employee Services Unit (ESU)

ESU is a centralised globally influenced centre that develops policies that are standardized plus locally customised. So, all policies and procedure guidelines are formulated by ESU. Examples of policies made by ESU include maternity leave, annual leave, company car, bonus, monthly payroll, pension liquidity settlement, and insurance and medical insurance policy. Along with policy formulation, this unit also is responsible for payroll and employee data. The HR manager of Huawei mentioned that:

“I am working as a grade 35 business support officer. Now, the model of the car that is being given to me, fuel allowance, driver, everything is being decided through policies made at ESU. Similarly, if my supervisor wants to give me non-cash benefit e.g. family trip to Singapore, then all particulars about this benefit are decided through policies developed by ESU.”

So to summarise, everything that is related with policies of tangible and intangible rewards or benefits is handled by the ESU. Few policies are standardised and few are locally adopted in accordance with needs of market. The HR manager of Huawei mentioned that:

“In Huawei, few things are pegged with market and others are standardised. For example, we use market anchor for salary determination. We calculate market anchor by taking average of salaries offered by other companies and then we determine the pay ranges for each grade. Everyone who joins the company gets the 75% (that is equal to market rate) of that range and with performance improvements increments up to 130% are being given to the employees. Now, this market anchor differs in every market but the decided pay range that is 75% to 130% is a global parameter and it remains same in all countries.”

So this is how standardised and global policies are developed by ESU. This standardization puts as limit on the role of  HRM (Markos and Sridevi, 2010). But this is also important for implementation of three-legged model which was presented by Ulrich (Boglind, Hällstén, and Thilander, 2011). Though, it is observed previously that HR is having a crucial role in strategy development. But this response showed that it was not true to all extent. This was proved that many of policies are already developed by ESU and very little relaxation is provided for modifying these policies and strategies.

4.1.7.Centralised and Decentralised Structure

Huawei is having a structure that is balance of both decentralised and centralised structure. It has few characteristics of centralisation where policies are developed by top managers. However, many of its HR policies and practices follow the bottom-up approach. HR manager of Huawei mentioned that:

“An ESU manager can never deal with the issues of unionized workforce. He cannot develop policies for unionised workforce. This is the IR manager who remains in interaction with them all over the day. He knows better that which policy needs to be introduced and execute as well.”

Consistent with the findings of Shuck and Wollard (2010), this practice has helped Huawei to ensure the high level of commitment and engagement of employees. This showed that by providing little relaxation for modification in strategies and policies, the company has become able to be more effective in strategic management.

4.1.8.Vertical and horizontal alignment of HR practices

Both vertical and horizontal alignment evidences are found through empirical findings of this study. The vertical and horizontal alignment of HRM practices shows how strategically HRM practices are implemented. The more horizontal and vertical alignment prevails, the greater is the strategic HRM (Way and Johnson, 2005).

4.1.8.1.Horizontal alignment

At Huawei, there exists alignment in few of HR practices, however, all practices are not linked with each other. For example, as said by Allen and Wright (2006) recruitment and selection cannot influence the salaries and benefits but salary and benefits are influencing recruitment at Huawei. Unless and until, competitive salaries are not being offered to employees, recruitment managers of Huawei remain unable to attract the talent from market.  One interviewee stated:

“However, recruitment managers cannot change the salaries and benefits policies developed by ESU. But, the salaries influence the recruitment function significantly.”

Furthermore, it was said by the interviewee that:

“Similarly, training and development and recruitment are also somehow linked with each other.”

Trainability of existing population depends on the people to whom you have recruited. If the organisation have recruited more old age employees who are experienced but having slow learning process, training practices must have to be customised accordingly. Likewise, if more young age people are hired and they are supposed to be trained, their training need, module, language preference, trainer and style of imparting training is quite different from old experienced employees (Ridder, Baluch and Piening, 2012). Giving a real example, HR manager highlighted that:

“In 2010, we used to recruit business support officers who had experience and we hired them through traditional interviews. Then we realised that this is the primary talent pool so we need to hire recruit the best people so shifted from traditional interviews to the assessment centre and we started hiring best people from the best universities. Now the training needs also shifted. We could not follow the training calendar that we used previous year.”

So according to recruited pool of employees, training practices are aligned. However, training practices do not influence the recruitment and selection.  Similar is found in study of Allen and Wright (2006). After recruiting the best available talent in the market, attracting and retaining with highly competitive pay structures, training & development is carried on from recognised professional institutes, nation-wide best development institutes. In case of Performance Management, the process is highly significant to total HR Function. Highly competitive salaries, highly engaged activities like use of ATS, campus drives and online portals, and extensive training and programs do not come with ease. Rather, the performance is monitored on the basis of ratings that come is three categories including; a) Excellent, b) Good and c) Requires Improvement and are exercised strictly to measure performance. This makes the argument further strengthened to say that there is high tendency of horizontal alignment in Huawei as per recommendation of Krishnan and Singh (2011).   

4.1.8.2.Vertical alignment

Vertical alignment or vertical fit is defined as linking of HR Strategy to total organisational, business and corporate strategy (Werbel and DeMarie, 2005). Huawei has a unique way of linking HR Strategy to total corporate strategy. The business strategy of the company is ‘innovation’. This needs designing and implementing HR strategies in shadow of this corporate ‘innovative strategy’. When alignment with the business strategy is ensured, this actually helps the business to achieve the its overall objectives. The all resources started to work in a synergetic manner. Hence, it becomes more easier to reach the intended goal and objectives of the business (Gratton and Truss, 2003).

In Huawei, HR department is contributing in terms of saving costs, making high performance work systems, injecting best human capital, retaining and keeping them motivated, learning and development of human capital. This is consistent with the arguments of Liu et al., (2007) on how strategic HRM is ensured with vertical alignment. Though, it is difficult to contribute in the firm and align the functions to the corporate strategy, where in Huawei, HR is being considered as an investment. This is consistent with the literature which shows that companies that implement strategic HRM consider HR as an investment, nor as the cost (Daley, 2006). It is working and struggling for its own survival and contributing strategically to the company’s objectives, goals and mission on contribution-based model of vertical-fit. This contribution based model sets aim for all departments of Huawei to contribute in the overall objectives. One of the interviewees stated that:

“All segments of HR has its own meanings of business strategy. Every strategy is cascaded to HR functions in a different manner. For example, if we have to increase profit by 20% in 2016. For ESU, it is to give savings through salary and benefits. For IR manager, workforce size needs to be managed in a manner that cost decreases and productivity increases. For talent development, it means to develop certain skills in its sales workforce so that they can sell more effectively and increase the revenue.”

From the above quotation, it is analysed that the vertical alignment is done in an effective manner. It is done in its real sense where every sub-function of HR is contributing in goal of HRM department which ultimately contributes in overall business (Wei, 2006). Any change in business strategy is cascaded to HR strategies.

4.1.9.Strategic Role of HRM

As identified in integrated model and literature, to assess strategic role of HRM four factors including HR role assessment, devolution and outsourcing of tactical functions is being analysed. Findings related to these factors are reported in this section.

4.1.9.1.Role of HR

In Huawei, HR is playing various roles. Being an advisor, it gives advice to line managers for implementation of HR practices like performance appraisal (Hiltrop, Despres and Sparrow, 1995). To some extent, HR is playing the role of regulators. For example, it is the responsibility of HR to monitor the HR related activities of line managers. They have to ensure that line managers are appraising employees on the basis of policy. HR also has to say ‘no’ to the decisions of line managers, if they find that something is going wrong. These characteristics of HR as a regulator (Need, 2006). HR is performing function of human capital developer through its talent management HR function. It provides various training, international exposure and learning opportunities to its employees, as recommended by Rimanoczy and Pearson (2010).

As an employee champion, HR maximises employee commitment and engagement by developing a culture where people are valued. Whenever, a new decision is to be made, HR always considers concerns of all employees. HR manager quoted example:  

“Recently, our marketing people who had to visit the markets were de-motivated and this was influencing their performance. The marketing head discussed this problem with HR head. It was responsibility of HR to take certain steps to motivate these employees. HR introduced few increments in allowances to motivate these people. Interestingly, while introducing this increment in allowance of marketing people only, HR had to consider its influence on whole workforce. For example, factory people who are working on production lines get de-motivated if they get to know that marketing people are getting increments because of market visits are they are not being given any such increment.”

So this is how, HR played the role of employee champion at that time. As told by Martín-Alcázar Romero-Fernandez and Sánchez-Gardey (2005), by handling the employee related issues, it actually shows that it playing an effective role. Likewise, every time it has to make sure that with any HR initiative, commitment or engagement of anyone is not compromised. This shows that through strategic role of HR, Huawei is enabled to have high level of engagement and commitment of its employees.

Most importantly, HR performs the role of strategic partner. Being strategic partner, HR helps in execution of the business strategy of Huawei. As told in literature i.e. Loosemore, Dainty and Lingard (2003), it is also involved in strategic formulation process. HR has successfully created such culture where everyone ultimately works for the business objectives, hence, the role of HR as a strategic partner is quite dominating. It ensures business strategy of Huawei is fulfilled through taking right steps for ensuring right people at right job who have right remuneration package. Interviewee stated:

“Chinese market is different so we have to manage things differently. Even the day-to-day business activities are quite challenging. The role of Guanxi (i.e. social ties) is dominant in all activities.  The processes become effective only when there are right people in the company and this is what HR has to ensure”

From the  above analysis, it is showed that that HR is playing a strategic partner role in Huawei (Budhwar and Sparrow, 1997). One interviewee told:  

“Three years back, our marketing department had to layoff third party employees because of extra required training and cost implications. So to ensure that right steps are being taken for this layoff activity, HR buy-in was ensured by involving HR in the execution of retrenchment strategy.”

Furthermore, for every HR action, being strategic partner it does consider its influence of all functions of the business to ensure the successful execution of strategy. The analysis of different roles played by HR showed that HR was not playing few roles like change agents.

4.1.10.Devolution to Line Managers

Devolution is being successfully ensured in Huawei. Devolution is an important dimension of strategic HRM. It sets free the HR department from many of administrative tasks and it allows HR to focus on strategic issues (Schuler and Jackson, 2008). There are many HR practices that are assigned to line managers. For example, HR manager mentioned about performance appraisal activity that is given to line managers. HR develops the performance appraisal form, communicates the promotion criteria, and guides line managers to appraise employees. However, the main duty of appraising employees is performed by line managers. Indeed, devolution exists in Huawei, where policy formulation and monitoring is ensured by HR managers and line managers are responsible for policy implementation. These findings are also consistent with the results of Lepak et al., (2006) who stated that devolution enhances the room for strategic function of HRM. While asking views of few of line managers, it became evident that even though it has started devolution, however, no specific training is being provided to line managers for performing HR functions. One line manager said:

“I am performing many HR functions for which I am not trained. Even, I feel this is an extra part of my work that I have to do. This is something for which I am not being rewarded even”

Another line manager said:

“I often find the performance appraisal process quite hectic and boring.”

When devolution is practiced and appropriate training is not being provided, it results in the decrease in commitment and engagement level of employees (Budhwar, 2000).

 

4.2.Discussion and Analysis

This section critically analyses the findings on strategic role of HRM. The internal environment within HUAWEI is a truly supportive and for HR function to be strategic in nature. Without having the support of top management, it is not possible for HR function to perform strategically. Top management clearly views HR as investment function which is again an essential ingredient for HR to become strategic. Apart from the supportive and participative culture, HUAWEI has involved the HR in the strategy designing process. HR representatives in HUAWEI are found to be present in all top management meetings. Thus all the internal factors such as cultures and values, HR role preferences and top management support are helping HR to be strategic in nature. Analysis of vertical and horizontal fit revealed that significant efforts are being done by management of HUAWEI to ensure vertical fit of HR. However, limited horizontal fit exists in HUAWEI where few of practices are aligned with each other.

Analysis of HR structure implemented in HUAWEI shows that it is using three-legged model in a customized manner. It has not fully adopted it yet. It has specific role of business partner and ESU is playing a function similar to shared services. However, it is not using third leg namely ‘centre of expertise’ but it has ‘talent development unit’ that handles HR activities like training and development, performance management, etc. Furthermore, analysis showed that function of business partner is not being performed in its full essence. Business partner at HUAWEI is taking part in execution of services. Interestingly, it is ensuring balance between between centralisation and decentralisation which is helping HR to become more strategic.

From various roles performed by HR of HUAWEI, analysis showed that most important function performed by organization is of strategic business partner. Along with operational functions, it is focusing on strategic role of HR for facilitating implementation of strategies and it is taking part in formulation of strategies and policies. Analysis of devolution at HUAWEI reveals that devolution exists in its initial stages at HUAWEI but it has not linked devolved HR activities with reward and compensation and performance appraisal; therefore, line managers are least interested in performing functions of HR. Most importantly, it is managing employees engagement and commitment in an effective manner through strategic HRM.

4.3.Summary

In this chapter, findings related to strategic role of HRM at Huawei are reported. It is concluded that strategic HRM positively improves employee engagement and employee commitment.

 

 

 

5.Chapter Five: Conclusion

In Huawei, it is analysed  that factors like culture, values and top management support  are all helping HR to become strategic in nature. Moreover, empowerment and devolution given to employees and managers within Huawei are all signals of Huawei’s HR department moving towards being totally strategic. There exist a vertical link between business unit strategy of Huawei and HR strategy while horizontal analysis is also observed between some practices of HR. It is concluded that HR department is strategic but full fruits of being strategic has not yet been achieved. Over the globe companies are making HR to play more of a strategic role than being a transactional part of company. Huawei is also part of this evolutionary process of HR getting strategic in organisations. Aim of this research was to analyse strategic role of HRM in employee engagement and employee commitment and this aim is effectively fulfilled. It could be concluded that strategic HRM is playing a critical role in employee engagement and employee commitment.

5.1.Recommendations

  • Though, many of strategic HRM aspects are implemented at Huawei, there is always a room for improvement. HR role should become more dominant so that it could manage internal factors like culture in a better way such that employees commitment and engagement could be enhanced further (Marler and Fisher, 2013).
  • It is analysed that role of business partner in Huawei is more of implementing practices as evident through HR manager holding Business Partner responsible for implementation of HR practices in organisation. It is recommended that Business Partner role could be made more efficient and effective through refining its responsibilities (Truss, Mankin and Kelliher, 2012). 
  • HR in Huawei needs to prioritise key activities that they need to do because it is felt as if they are holding on to some activities which could either be outsourced or devolved so as allowing more time for HR to focus on strategic issues such as employee reward and compensation designing (Jackson, Schuler and Jiang, 2014).
  • Even though, few other roles are also missing from HR role of Huawei, but it is believed that role of HR leader is most significant for Huawei. HR Leader role must be incorporated within Huawei as it is important for leading and valuing HR function, and implementing best practice HR initiatives within HR function itself (Martin et al., 2016).
  • For HR function to play a strategic role in Huawei, it is important for it to devolve authority to line managers. It’s really hard for HR to become strategic unless line managers are willing to share responsibility. Better training for employee handling should be provided to line managers so HR does not need to spend time in line managers responsibilities relating to employees rather HR could focus on long term imperatives of organisation (Jiang, Takeuchi and Lepak, 2013;  Purce, 2014).
  • Even though, it was encouraged to communicate and interact with each other, this research could not find any evidence of proper mechanism of where employees and HR managers could interact and communicate, effectively. There should be a mechanism where HR professionals come into direct contact with employees and they are able to give their feedback on HR policies (Berman et al., 2015; Alfes et al., 2015).  This will also improve commitment and engagement of employees.

5.2.Limitations and Future Research Directions

Interviews conducted were very few because of time and resource limitations. In order to capture true image of strategic role of HR more interviews from HR senior managers and line managers of Huawei should be conducted. This research has only focused on qualitative aspects and not on other quantitative aspects. For example quantitative aspects like impact on business performance in terms of profits could have been taken into account. Furthermore, there are various other personal factors other than competencies that contributes in strategic role of HRM. In this report, only HR competencies from personal factors are being studied. So in future it is recommended to integrate more personal factors to study strategic orientation of HRM.

 

 

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Appendix Interview questions

  1. What HRM strategies and policies  are used in your organisation?
  2. How HR is contributing in success of your organisation?
  3. How do you ensure strategic alignment of HR strategies with the business strategy?
  4. How do you ensure strategic alignment of all HR strategies with each other?
  5. How strategic role is played by HR department of Huawei?
  6. How tactical role is played by HR department of Huawei?
  7. How HR department plays the role of business partner?
  8. How HR is involved in the strategic planning of the business?
  9. How HR of Huawei ensures alignment with the external environment of the business?
  10. How HR performs the functional tasks and what is the importance of these tasks for the strategic HRM?
  11. What is level of employees engagement at your organisation?
  12. Which HR strategies are helping in achieving the employees engagement?
  13. What is level of commitment of employees at your organisation?
  14. How HR strategies are helping developing organisational commitment?
  15. How vertical alignment of HR strategy helps in employees engagement?
  16. How horizontal alignment of HR strategy helps in developing employees engagement?
  17. How vertical alignment of HR strategy helps in organisational commitment?
  18. How horizontal alignment of HR strategy helps in developing organisational commitment?

 

 

 


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