Strategic Human Resources Management The emergence of strategic human resources management is rooted in manpower planning but it is the work of affirming the importance of managing people effectively as well as pursuing towards more flexible and innovative in order to be able to deliver services in constantly changing environment. Most of the literature review suggested that the advantage of valuable knowledge, unique set of skills and decision making capabilities can results in firm’s competitive advantage and value creation as well (Rochling et all, 2005).
Therefore, an appropriate Human Resources practices can develops organizational capabilities such as empowerment, selective hiring, extensive training, performance evaluation, team based work and performance based pay work. Based on these six practices, the initial impact is on what employees have and feel. Selective hiring and extensive training are all aimed at building certain skills that enabling employees to effectively perform their jobs.
In the addition on these practices along with rewards, performance evaluation, empowerment and team based work will create employee’s perceptions on the company’s fairness and desirability and then, will influence their commitment, motivation and motivation where it will directly affect on the firm’s performance. However, although these six practices being analyzed individually, they are not necessarily being practiced individually. This means that some of these can be combined together in order to get better results such as the combination of empowerment, team based work and rewards.
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This can be proved from the Whole Food Market case. The unique human resource practices in Whole Food Market was well known and thought to be the main drivers of its growth and profitability in the industry of natural and organic food retailers. The work culture in Whole Food Market was centered on the firm’s grassroots, which are the frontline level of management which helped to eliminate bureaucracy. The firm empowered the existing team member to choose their own new recruits where they feel comfortable with in their team.
Besides that, the firm also uses team based incentive (combination of team based work and reward) to improve cost saving as well as productivity. Each department within a store that runs by a team will be given a monthly payroll budget where the unspent payroll money at the end of the month will be divided among the team members. This method has successfully reduces unwanted costs and increases the firm’s performance financially. Extensive training has the potential side where training tends to develop more skillful expertise that eventually will boost up the employees confidents and motivation while performing their job.
Whenever the firm did not provide sufficient training and development to the less skillful employees, this may lead to demoralization among the employees and then, reduces the productivity and firm’s performance. For example, Delta Airline, where the firm focuses more on cost reduction and did not put much effort on employee commitment. The firm has deducted training costs which considers as crucial expenses in the airline industry and causes lack of employee engagement in the firm. Consequently, Delta has dropped to the bottom of the industry in performance as compared to its competitors such as Southwest Airline.
Every human resource practices costs money to develop and time to implement and these costs however, will go directly to the organization bottom line. For example, being selective in hiring may result in better employees but it will cost more in term of interviewing and testing. Providing more extensive training will increase their skills and potentially their attitudes but it will cause substantial amount of money spent to the firm. Thus, it is vital to implement a high performance human practices that increases productivity and at the same time do not let their costs surpass the benefits or that will bring no real gain for the firm.
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