HR Strategy and Practice

Specific HR Strategy
Summary
Human resource management (HRM) is an integral part of organizational operations with greater impacts on financial performance. Modern HR strategies and practices have evolved to incorporate strategic HRM. HR strategies are divided into two categories: general HR strategies and specific HR strategies. General strategies in HR practices focus on high commitment, high involvement, and high-performance management. On the contrary, specific HR strategies focus on what the organization sets to do in relation to its HRM policies and practices. Business organizations are increasingly establishing specific HR strategies to enhance their competitive advantage and performance. Specific HR strategies differ from general strategies as they are based on the unique aspects of an organization’s operations.
An example of a specific HR strategy is IRM’s HR strategy, which reflects the general aspirations and intentions of the company. The HR strategy reflects four key areas of its overall business strategy: business value, innovation, global integration, and on-demand infrastructure. The goals of IBM’s HR Strategy include to lead transformation, anticipate and build skills, and grow the company. IBM seeks to achieve its HR strategy through leadership, performance-based opportunities, flexibility, creating a value-based culture, and hiring a diverse and talented workforce. IBM’s HR strategy is based on the matching or contingency approach to HR strategies and practices. Based on this approach, the HR strategy seeks to create a fit between competitive strategy and internal strategies for HRM. As evident in IBM’s case, the specific HR strategy based on a matching or contingency approach promotes vertical integration and horizontal integration. Vertical integration focuses on promoting the alignment between business strategy and HR strategy. On the other hand, horizontal integration ensures HR goals are linked to individual HR policy areas.
Specific HR Strategy
Human resource management (HRM) is an important part of organizational operations and has a greater impact on firm performance. Human Resource (HR) practices have evolved to adopt a strategic approach from its conventional focus on individual and organizational effectiveness. According to Richard & Johnson (2001), the current focus of human resource management is critical to the strategic processes of an organization as HR activities contribute to profitability rather than a cost of production. This implies that strategic HRM is essential in enhancing firm profitability in the increasingly competitive modern business environment. As a result, organizations are increasingly establishing HR strategies that seek to enhance employee productivity and financial performance while lessening employee turnover. This paper examines a specific HR strategy employed by organizations to enhance their productivity and performance.
Strategic Human Resource Management
Human capital is regarded as one of the critical constructs across various disciplines ranging from psychology to economics. Existing literature on strategy and HRM shows a significant link between human capital and organizational performance (Boon et al., 2017). Given the link between these two constructs, studies have been carried out to assess different aspects and levels of human capital in different organizations. The value of human capital to organizations is usually examined from a strategic or economic lens. Through this, the studies evaluate how value can be obtained and created from human capital as well as mobility of knowledge and skills.
The significance of human capital on organizational performance has contributed to changes in HRM practices. In recent years, HRM practices have adopted a strategic perspective to help in the management of people within organizations and the significance of organizational and individual outcomes. A strategic lens of HR practices focuses on how investment in human capital increases organizational performance. This is achieved through the establishment of systems and the use of practices that seek to develop and manage an organization’s human capital. Boon et al. (2017) state that interest in HR practices as strategic resources emerged as part of the development of the resource-based view (RBV) in strategic management. As part of strategic HRM, organizations are increasingly developing unique HR strategies to enhance the management of human capital and financial performance. Strategic HRM helps to establish specific HR strategies that contribute to improved management of people and better financial performance.
Specific HR Strategy
The adoption of a strategic lens in HRM has contributed to the development of different HR strategies employed by organizations. Existing HR strategies are classified into two: general HR strategies and specific HR strategies. General strategies in HR practices focus on high commitment, involvement, and performance management (Boon et al., 2019). Under these strategies, HR practices are bundled together in order to improve organizational performance. As a result, the strategies seek to enhance mutual commitment, establish systems for high performance of work, and improvement for employee decision-making.
On the contrary, specific HR strategies focus on what the organization sets to do in relation to its HRM policies and practices. These practices are integrated with the organization’s unique business strategy. While specific HR strategies are commonly set out as aspirations, they are converted into actions for improved performance. These strategies focus on talent management, continuous improvement within the organization, resourcing, knowledge management, and learning and development.
An example of a specific HR strategy is IBM’s HR strategy, which reflects the general aspirations and intentions of the company with respect to people management and organizational performance. Unlike many multinationals with general or overarching HR strategies, IBM has adopted a specific, well-articulated HR strategy that is aligned to business strategy. As previously indicated, specific HR strategies are usually aligned with the business strategy in order to generate the desired performance. In IBM’s case, the HR strategy reflects the four key areas of its overall business strategy: business value, innovation, global integration, and on-demand infrastructure (Wright, 2008). The goals of IBM’s HR Strategy include to lead transformation, anticipate and build skills, and grow the company. Anticipating and building skills is geared toward promoting innovation and business value while leading transformation focuses on the realization of on-demand infrastructure. On the other hand, the growth of the company focuses on promoting its global integration. The company seeks to achieve this through leadership, performance-based opportunities, flexibility, creating a value-based culture, and hiring a diverse and talented workforce.
IBM’s HR strategy reflects various aspects of a specific HR strategy adopted by a business organization to enhance performance. These include resourcing, talent management, continuous improvement, and knowledge management. Resourcing refers to attracting and retaining a highly-qualified workforce. As stipulated in the strategy, the company seeks to motivate employees through hiring and retaining a diverse and highly-talented workforce. Based on the HR strategy, the firm focuses on talent management by providing performance-based opportunities, leadership, flexibility, and creating a value-based organizational climate. With respect to continuous improvement, the firm focuses on transformation, innovation, and growth. Knowledge management in the company is achieved by the strategy through anticipating and building employees’ knowledge and skills.
The company’s HR strategy is influenced by the matching approach to strategic human resource management. Seyyedjavadin & Zadeh (2009) contend that there are different approaches to HR strategies. The matching approach, which is also known as the contingency approach, seeks to create a fit between competitive strategy and internal strategies for HRM. In this regard, the business strategy acts as a competitive strategy that guides the company’s HR strategy and practices. Elements of the HR strategy are designed to promote a fit between its competitiveness and human resource practices. This specific HR strategy effectively combines vertical integration and horizontal integration.
In relation to vertical integration, the organization’s HR strategy is aligned to the business strategy. To avoid being reactive, the organization has ensured that its corporate strategy is the premise for both HR and business strategies. As a result, the company’s HR strategy is not subservient to product-market logic. On the contrary, horizontal integration through ensuring HR goals are linked to individual HR policy areas. Therefore, HR practices do not conflict with existing policy areas and ensure effective people management.
In conclusion, HRM is an important part of the operations of an organization as it relates to people management and influences financial performance and success. As the modern business environment is becoming more competitive, organizations are adopting strategic measures for HR practices. Business organizations develop and utilize specific HR strategies to improve their competitive edge and performance. IBM is an example of a company that has adopted a specific HR strategy. As evident in the firm’s case, a specific HR strategy incorporates different aspects and approaches. A matching/contingency approach is one of the frameworks used for such strategies since it promotes vertical and horizontal integration.
References
Boon, C., Eckardt, R., Lepak, D.P. & Boselie, P. (2017, October 5). Integrating Strategic Human Capital and Strategic Human Resource Management. The International Journal of Human Resource Management, 29(1), 34-67.
Boon, C., Hartog, D.N.D. & Lepak, D.P. (2019, January 14). A Systematic Review of Human Resource Management Systems and Their Measurement. Journal of Management, 45(6), 2498-2537.
Richard, O.C. & Johnson, N.B. (2001, March). Strategic Human Resource Management Effectiveness and Firm Performance. The International Journal of Human Resource Management, 12(2), 299-310.
Seyyedjavadin, S.R. & Zadeh, M.H. (2009, June). HR Strategy and Its Aligning with Organizational Strategy and Human Capabilities. Iranian Journal of Management Studies, 2(2), 5-29.
Wright, P.M. (2008). Human Resource Strategy – Adapting to the Age of Globalization. Retrieved July 25, 2020, from https://www.shrm.org/hr-today/trends-and-forecasting/special-reports-and-expert-views/Documents/HR-Strategy-Globalization.pdf