Strategy and Human Resource Management

Strategy and Human Resource Management

Human Resource Management (HRM) frameworks must be both agile enough to respond to the increasing pace of disruptive change while at the same time strong and hardened to sustain organizational structures to strategic initiatives and plans can be achieved (Kevin, Groves, Pat, Winny, 2008). The intent of this analysis is to evaluate how HRM frameworks make a significant contribution to the strategic plans and long-term performance of companies. Beginning with an application of concepts and theories of an HRM framework, following by an analysis of the pragmatic value of HRM frameworks in competitive market, this analysis evaluates how leaders need to encompass both transactional and transformational leadership styles to be effective in their roles. The contributory effects of Emotional Intelligence (EI) are also explored throughout this analysis as is the proactivity of agile, market focused HRM frameworks and their contributions to the long-term viability of a firm. The attributes of transformational leadership that contribute to team cohesion and consistency of performance are also critical for the development of trust over the long-term as well. With trust emerging as the catalyst of effective transformational leadership, the need for creating and sustaining a strategic approach to creating and maintaining HRM frameworks is also crucial. Trust is also critical for the cultural fit of leadership, emotional intelligence and an HRM framework into the changing ethical landscape companies are operating in globally today as well.

Introduction

The development of Human Resource Management (HRM) best practices and frameworks for the 21st century vary drastically from their 20th century counterparts, with a focus being more on integrative knowledge management and integration throughout each functional and strategic area of the enterprise. As a result, there is an overwhelming need to create HRM frameworks and models that are agile enough to scale to the needs of organizations as they grow, yet stable and secure enough to withstand significant shifts in external environmental factors and market conditions (Drew, Kelley, Kendrick, 2006). The combining of these factors in the context of any HRM framework or model defines the type and brand of leadership in the firm, and the leadership of the senior managers including the CEO and chief strategies of the firm (Dave, Norm, 2007).

Implicit in the development of any effective HRM model or framework is the comparative value of transformational vs. transactional leadership. The value of these two approaches to leadership are analyzed from an HRM strategy perspective, with specific focus on the hybrid model approach to using transactional leadership to ensure the performance and attainment of short-term goals and transformational leadership relied on for creating greater commitment and buy-in to a given company's vision, mission and values. The ability to have a hybrid leadership style that can scale across various situations is crucial for the overall growth of a business and the successful transformation of HRM strategies into competitive differentiators (John, McGuire, Rhodes, 2008). For hybrid transactional/transformational leadership styles to be effective there must be a strong component of emotional intelligence (EI) within any leaders' skill set to successfully determine when to use a specific leadership approach (Joan, Marques, 2007). This analysis covers this aspect of leadership in the context of HRM models designed to balance leadership and the objectives of an organization. This is also critically important to consider when creating strategic plans for future growth, which include incentive plans and staffing levels to attain specific objectives. Finally, there are the many challenges of how to use HRM frameworks and models as a means to continual measure, monitor and improve service (Winston, Patterson, 2006). All of these aspects of HRM strategies taken together need to create a platform of trust within any organization, specifically linking employees and managers, ensuring a high level of communication, collaboration and ongoing accomplishment (Cshawn, Dana, Sims, Eduardo, 2007). The disruptive innovations occurring in HRM frameworks have more to do with the advances made in transformational leadership practices, accentuated by social media and social networking technologies that enable greater levels of communication and collaboration over time (Carsten, Uhl-Bien, West, Patera, McGregor, 2010).

Applying Concepts and Theories to the HRM Framework

The HRM frameworks are evolving rapidly due to the disruptive innovations of technology enabling much greater levels of communication and collaboration throughout globally-based organizations (Carsten, Uhl-Bien, West, Patera, McGregor, 2010). The combining factors of disruptive innovation, greater levels of information sharing and exchange predicated on transformational leadership approaches, and the development of flatter yet more market-driven organizational structures are factors forcing HRM frameworks to be more integrated at the system and process level than ever before (Ann, Pamela, Jerry, 2008). HRM frameworks must have an architecture that allow for as many integration points as possible, distributed across a wide variety of human resource strategies, programs, and initiatives all interlinked to the strategic plan of a business. This many integration points throughout an HRM framework are what are also critically important from the standpoint of ensuring governance to both internal requirements and those outside the company as well, especially those required by regulatory agencies and laws in the case of Sarbanes-Oxley (Carcello, 2009).

HRM frameworks are the catalyst of all successful strategic planning and long-range planning efforts, as they integrate the future human resources needs of an organization with the long-range business plans and programs the company plans over time (Marcel van, 2005). There are many examples of this in high technology for example, where the HRM frameworks are used for defining the overall structure and direction of the strategic plans. Google, Twitter, Intel and Hewlett-Packard are all more attuned to their HRM frameworks than they are to the limitations of technologies or even product lifecycles. The focus in these companies, especially those heavily involved in Web-based software development including Google, Twitter, Hewlett-Packard and Microsoft, is on creating a scalable and effective HRM framework that can compensate for drastic shifts in availability of resources and needs by each department. As the speed that each of these companies compete at is formidable for even their secondary competitors, the HRM framework must be designed to allow for support of very unique and difficult requirements for hiring engineers and technical staff. HRM frameworks also must scale to support the elements of corporate governance and align more precisely with the long-term strategic vision of the company as well (Drew, Kelley, Kendrick, 2006). The more rapid and abrupt the changes in product strategy in a given business, the more challenging this becomes over time.

The Pragmatic Value of an HRM Framework in Competitive Markets

The reliance on HRM frameworks as a means to create lasting value within the context of a strategic plan has been well proven in studies of how governance drives profitability over the long-term in any business (Carcello, 2009). Ensuring that the level of governance, strategic focus on HR as a core component of strategy, and the role of a strategic HRM framework in unifying all of these areas of a business model stay in sync with one another is the foundation of many leadership and management theories (Avolio, Walumbwa, Weber, 2009). The coordination of these three areas however is critical for any business to attain its strategic plans and profitably grow over time as well. The reliance on lean process control methods including Six Sigma continue to be adopted into the alignment of these three areas of strategy development, execution and continual monitoring over time (Mehrjerdi, Yahia, 2011). The concept of using approaches typically relied on for lean business process management and continual workflow improvement to HRM frameworks has however continued to show value and potential in being a disruptive innovation in how Human Resources is relied on as a strategic asset used for attaining long-range objectives (Mehrjerdi, Yahia, 2011).

What makes these programs and initiatives highly effective however is the reliance on transformational leaders creating value by bringing these many elements together effectively (Howard, Bromley, Kirschner, 2007). The reliance on transformational leadership as a means to gain greater insight and results is highly dependent on the emotional intelligence of a leader, CEO or entrepreneur as well (Schaubroeck, John, Simon, Sandra, 2007). While HRM frameworks are a strong catalyst of strategic planning synchronization in many organizations, the role of transformational leaders as the continual source of change is essential for any companies to continue growing profitably over time. An example of this dynamic between a transformational leader and HRM framework can be seen in the approach Apple is taking to selectively recruiting engineers for their Apple iOS operating system and the many geo-location-based services in this operating system. The focus is today on how to fuel innovation in the Apple iOS operating system timeline to drive greater adoption over time. The synchronization of the HRM framework, transformational leaders' skill sets in maintaining consistency and focus on the strategic goals of a business while also pursuing innovation is evident in how Apple is going about creating next-generation tablet PCs or iPads as well. When coordinated well, an HRM framework, transformational leader skill set, and disruptive technological innovation can lead to increasingly higher levels of profitability and long-term growth. For Apple, this strategy has translated into market dominance in the smartphone and tablet PC markets. The success of that company continues to underscore the inherent value in synchronizing these three elements of an HRM framework, transformational leadership, and a continual supply of disruptive innovation for heavy investment in R&D.

The Practicality of Agile HRM Frameworks and Their Impact on Long-Term Financial Viability

The creation of an effective HRM framework, continual improvement of transformational leaders and their skill sets, and the infusion of innovation can transform a company much like these approaches worked at Apple. For the majority of companies however the practicality of how best to manage these three areas and attain profitability remains a challenge. The majority of companies struggle with creating an agile HRM framework that can balance the urgent need to get employees hired and accomplishing tasks quickly using transactional leadership vs. getting employees to buy into the vision of an organization (Schaubroeck, John, Simon, Sandra, 2007). For the majority of businesses, the need for managing a much greater focus on creating a more transformational mindset in its managers to ensure employees take ownership of their jobs is far more critical to profitability than merely moving quickly through tasks. The focus on how to ensure the culture is one that embraces transformational leadership over transactional mindsets is crucial for growth and profitability (Avolio, Walumbwa, Weber, 2009). The focus also needs to shift away from a task orientation to one more focused on the attainment of a shared vision that is compelling enough to transform a company. This is the most critical aspect of having an HRM framework. Having a transformational leader that can bring all these factors together at the same time in the context of an HRM framework driven by a compelling business model can often make the difference between a company succeeding or failing or not.

The practicality of HRM frameworks and their role in changing organizational cultures is evident in how successful the Indian outsourcing companies are in responding to market requirements as diverse as ERP installations to orchestrating compliance for Sarbanes-Oxley initiatives in publically-held companies. The HRM framework within Indian outsourcing companies looks to organize practice areas first and then bring sin transformational leadership expertise to lead client engagements. This approach unifies the HRM framework, levels of process innovation and implementation expertise these outsourcing providers have access to, and also serves as a strategy for creating practice leaders that over time become transformational in their leadership approach. This model works well for the Indian outsourcers as it provides them with the necessary framework for continually adding innovation to their approach of selling services and expertise.

A Strategic Approach to Leading HRM Framework Design

Ethical leadership is the foundation of any effective HRM framework and strategy. It is responsible for integrating the values and vision of a company into each process and strategy relied on for goal attainment RM (Brown, Trevino, Harrison, 2005). This approach to integrating ethical leadership into the functioning of any company must begin with a strong focus on transformational leadership supported by emotional intelligence (EI) (Kevin, Groves, Pat, Winny, 2008). Studies have shown that the greater the EI a leader has the greater is their ability to support both a transactional and transformational Approach to management. This is a strategic advantage to companies who are seeking to create greater synchronization across their HRM frameworks, leadership, and unique differentiators including product and services strategies.

Making these three elements stay in sync with each other over time however is challenging. Having an HRM framework stay coordinated to a leadership approach, all galvanized either around a process or strategy (including the strategy of innovation) takes strong transformational leadership skill sets in managers and the CEO. In these situations where HRM frameworks and management strategies need to stay in sync with one another, the ability of a leader to earn trust is crucial if the business is going to succeed over the long-term (Ceasar, Suzanne, 2008). Trust then becomes a very strong catalyst for ensuring the continued success of any HRM framework and is also the catalyst that ensures it will continue to evolve with the needs of the business. One of the most effective strategies for transformational leaders to use in keeping the HRM framework aligned with the needs of the company is for leaders to regularly illustrate through example how they are willing to make sacrifices of their time to help attain the vision or goal (Niti, Venkat, 2008). The defining of a transformational leader is more in their daily actions and less in their e-mails or company-wide announcements of direction. In fact the validity of an HRM framework must be supported by self-sacrifice in order for it to succeed from an employee adoption standpoint (Niti, Venkat, 2008).

The Cultural Fit of an HRM Framework

The culture of every organization is significantly different and places unique stress and constraints on any HRM framework. The agility of any HRM framework to work with these constraints and still create a level of compliance to internal requirements is critical for the long-term growth is a key success factor that is difficult to attain (Carcello, 2009). Often the cultural constraints of an organization force an HRM framework to change drastically over time, completely redefining its purpose and roles. In addition, an HRM framework can change to such a great extent that the processes systems and approaches to completing work internally to a company go through a massive shift as well (Howard, Bromley, Kirschner, 2007). In the mid-1980s IBM went through a series of these transformations in an attempt to get its HRM framework better aligned to the needs of the market, including the need to catch up to the innovations inherent in the Internet and Web application development. Microsoft is another company who had to face the same daunting challenge and with the same predictability as IBM, turned to modifying its HRM framework to ensure competent Internet and Web application developers were brought on board over time.

This also led to the development of a more distributed organizational culture that placed greater value on the knowledge and capacity for self-sacrifice on the part of leaders instead of just relying on their traditional authority (Niti, Venkat, 2008). As IBM and Microsoft went through these transformations, their HRM frameworks served as the catalyst of keeping the company's talented engineers, marketers and executives focused on a common vision and objective. Over time, the pragmatism of transformational leadership began to pay off in these organizations (Howard, Bromley, Kirschner, 2007).

Ethics and Transformational Leadership: Implications on HRM Frameworks

The ethics of transformational leadership have an irony to them; as they must be transparent and honest, consistent and focused continually on a compelling vision to succeed over time (Brown, Trevino, Harrison, 2005). In this context, HRM frameworks have often become the crucible by which the ethics of a company or enterprise are measured against (Marcel van, 2005). An HRM framework needs to have the necessary integration points to specific process and strategy areas to succeed, yet also must be able to be responsive enough to changes in organizational direction and design to ensure the goals and vision of the company are achieved over time.