Planning a Successful HR Strategy

Introduction

Planning a successful human resource strategy requires an understanding of a number of factors. According to Gold and Fraser (2006), managing human resources is one of the most challenging tasks because it requires a deep understanding of the people the leader is working with, internal and external factors that influence them, and how they are likely to react when faced with different environmental forces. Some of the internal issues that a manager will need to understand include aims and objectives, organisational culture, the style of leadership, nature of work that employees engage in quite often, employees’ composition, and the employment relationship. These are factors that can be managed to fit various contexts. External factors may include legislation, the economic environment, competition in the market, and the nature of the industry. When developing an effective plan, all the relevant stakeholders must understand that there is a way in which these internal and external factors interact and define various factors within an organisation. For instance, it may define whether an organisation will have to employ a soft or hard HR system, Resource-Based Review, tailored policies, or industry’s best practice. Different models may be appropriate when using different HR strategies. These issues will have a direct impact on the design used in individual human resource components such as the system of selection, training, and rewards. As Bozionelos (2009) says, there is no single strategy that can be considered effective in all scenarios of human resource planning. Sometimes it may be necessary to develop unique plans to help solve unique human resource problems within an organisation. In this paper, the aim is to critically discuss factors associated with planning a successful human resource strategy with reference to training and reward.

Factors Associated with Constructing a Successful HR Strategy

According to Uhl and Graen (2008), constructing a successful human resource strategy needs a deep understanding of factors that influence employees in a given setting. Human resources are not machines that can be programmed to work in a given way. Individual employees are unique in their rights and making them embrace a given strategy may involve a thorough investigation of various factors. In this section, the researcher will look at these factors to understand how they may influence the process of constructing an effective human resource plan (O’Riordan 2004).

Culture

Research conducted by Castaneda and Kolenko (2009), shows that culture is one of the major factors associated with constructing a successful human resource strategy. Most American firms have failed in their attempt to enter a number of foreign markets because of the inability of the firm to understand the culture of people in the foreign countries. One of the best examples is one of the leading American retailers, Target. When Target first entered the Canadian market, it believed that there were no significant cultural differences between Canadians and Americans. It is important to note that the two countries were neighbours. For that matter, the management imported the successful human resource strategies and other management practices used in the United States. The main assumption was that Canada could be easily considered part of the United States (Vos, Stobbeleir, & Meganck 2009).

The outcome was disastrous. As the firm came to notice, the Canadian culture was very different from that of the United States. Their approach to work, the time they spend at work and the way they view the relationship between top managers and junior employees are very different from what is the case in the United States. Sturges, Guest and Davey (2004) say that the Japanese are workaholics and when planning a strategy in an area they are the majority, it may be necessary to take into consideration this factor. On the other hand, the Dutch like spending very few hours working (Guest & Liefooghe 2005). It is easy to consider these factors as stereotypes that lack any scientific evidence but when they are ignored when developing strategies, then achieving success in the implementation of such policies may be impossible. Telling a Japanese to work for 11 hours in a day may be normal. However, to a Dutch or Italian that may seem irrational and unacceptable. Bozionelos (2009) says that the existing legislation within a given country may influence the work culture of people within a given country. This may affect the productivity of the workforce.

When planning a training program, the issue of culture is very important and must be considered. For instance, many organisations in the United States are now requesting their employees to spend about one hour after their normal duties in training programs that are always organised within these firms (Castaneda & Kolenko 2009). When this is used as the main strategy for training, then it will be important to understand the culture of the employees, especially on the idea of spending an extra hour at work after spending the whole day within the same setting. Vos, Stobbeleir, and Meganck (2009) say that it is possible to create a unique culture within an organisation to make employees act in a given way. However, it may be difficult to create such a culture if it goes against some of the practices they consider acceptable in their society.

Planning rewards also requires an understanding of cultural factors within a given setting (Guest & Liefooghe 2005). Rewards are meant to make employees happy and motivated to deliver the best results they can. A good example can be giving employees gifts wrapped in different colours. When developing such a reward system, the management will be careful not to pass a wrong message with the gifts they give because different colours have different meanings in different cultural settings. In most Western countries, red is a colour of love and passion. It is a sign of affection, and wrapping a gift using this colour may reassure them that they are treasured and cherished by their firm. In South Africa, the same red colour is a sign of mourning and loss. When they get a gift wrapped in such a colour, they may easily believe that it is a warning sign, an indication that they might lose their job any time because of issues related to their output. O’Riordan (2004) says that the approach used in rewarding employees may differ between soft and hard HR systems (Mavin & Minocha 2006). Understanding this difference may help in defining an appropriate reward. Failure to understand these cultural factors may lead to a situation where fear is created instead of motivation. Having a team of motivated employees may help in attracting, recruiting, and retaining highly skilled employees

Leadership style

The style of leadership may also influence the approach that is taken when constructing an effective human resource plan. Different organisations have different leadership systems that work for them. Transformational leaders believe in positively influencing the followers to take a given direction based on their capabilities. Their human resource strategies are always based on the current capabilities of the employees and what they believe such employees can accomplish without a lot of strain. On the other hand, an authoritarian leadership approach will involve developing HR strategies based on what the leader believes employees can achieve. Although rare, Roper, Ganesh and Inkson (2010) say that this leadership style is still common in various companies within Europe and North America. Such a leader believes in coming up with strategies that everyone has to follow irrespective of their views. When this form of leadership is working within that particular organisation, then such an approach of making HR strategies can work.

Developing a training plan will need an understanding of the leadership style within a particular organisation. In an organisation where leaders interact freely with junior employees when undertaking various tasks, then the plan should reflect this management approach. The plan must involve this free interaction between the managers and the employees.

When developing a plan for a reward system, the issue of leadership must be considered. In some organisations, leaders have the exclusive right of defining the kind of gifts that employees receive and the frequency with which they can receive these gifts. In a more democratic leadership system, employees are allowed to define the type of reward they may prefer. These are some of the factors that one has to consider when developing an effective human resource strategy for rewards.

Nature of work

According to Cappellen and Janssens (2010), the nature of work may have a major influence when planning a successful human resource strategy. High school teachers, engineers, doctors, and astronauts have very different settings in a workplace environment. When developing an effective HR plan for these employees, one has to start by understanding the nature of their work. One must understand what they can or cannot do precisely because of the nature of their work. When developing the plan, care should be taken to ensure the practicability of the plan based on the nature of the work.

Planning for a training process for employees will require the planner to evaluate the nature of work employees in a given setting engage in. For instance, in-house training may be very appropriate for an engineer that has just come out of college. He or she will work alongside more experienced engineers to ensure that he understands his work better. However, the same strategy cannot be employed for teachers. A more experienced teacher cannot go to class with a newly hired teacher to help him understand what is expected of him. Using such a strategy for a teacher may not only be demeaning, but it may also jeopardise the trust between the teacher under training and the learners. Developing a reward plan may also need an understanding of one nature of work. For instance, when giving a trophy to a football coach, he would prefer the one that emphasises the nature of his work.

Legislation

The existing laws and regulations developed by the national or local government are very important when developing an effective HR plan. Occupational laws are some of the major forces that may influence the kind of strategies that a firm may embrace. For example, employees working in the industrial sector are expected by law to have the equipment and a dress code that protects them from various environmental forces. When developing a plan, such legal requirements must be taken into consideration to avoid cases of litigation for failure to follow the law. When developing a training program for employees, these legal requirements must be followed. A firm that is planning to induct its new employees in their industrial complex will need to ensure that they have the necessary protective clothing. They will also need to ensure that they follow the law in terms of how they conduct the training and the content of the training program (Cappellen & Janssens 2010).

Employee composition

The composition of employees and their number will always influence the process of planning for an HR strategy within an organisation. The approach taken by a small restaurant in the streets of London is very different from that taken by a firm such as Wal-Mart which employs over 2.1 million people across the world. As Renn, Allen, and Huning (2011) state, when developing a plan for a highly diversified group of employees, then a number of factors will need to be considered. The diversity issue may be in terms of age, race, gender religion, or any other cultural practices that may have a direct impact on the manner an employee acts when at work. Such a plan may need to make compromises on these issues of diversity. Sometimes it may be even necessary to come up with different HR plans for different groups of employees based on their classes. On the contrary, a small firm with few employees sharing many factors in common may find it easy to develop effective HR plans.

To develop a training program, the issue of employee composition must be given serious consideration. It may not be prudent to have a system where highly experienced and older employees are trained alongside a newly recruited young workforce. Their training needs are definitely different, and this must be taken into consideration when developing the training plan (Guest & Liefooghe 2005). The reward system may also need to take into consideration the issue of employee composition. It may be easy to use financial rewards because it will be acceptable to everyone. However, when one is planning to use non-financial rewards, it may be necessary to consider analysing issues such as age, gender, race, and religion before coming up with a reward system that will be acceptable to all the stakeholders.

Employment relationship

According to Marsden and Richardson (2004), developing an effective HR plan will require a detailed understanding of the employment relationship. The strategy that will be used for the permanently employed workforce may be different from that used for the casuals or those who are hired only for a given period. A firm shouldn’t spend a lot of resources on employees who are hired only for a short period. Training programs are particularly very sensitive when it comes to the employment relationship. Firms in the United Kingdom, United States, and many other parts of the world are currently spending a lot to ensure that their employees have the right training. However, the expensive training is always meant for the permanent employees. It may be illogical to spend a lot of money on people who are only working for the firm for a short period. They can easily be hired by rival firms after they have used the resources of their trainer.

Planning for the reward strategy for a permanently employed workforce should also be different from that of casuals. Casual employees may need rewards that fit the nature of their relationship with their employer. In fact, a strong recommendation may be considered a reward for these casual employees. On the other hand, a permanently employed workforce may demand a reward that will show appreciation and concern.

Human Resource Management Models

When developing an effective human resource model, it may be necessary to consider some of the human resource models to inform the approach that is taken. As Dries (2009) notes, there is no single model that can be considered universally acceptable. Different organisational settings and factors may determine the appropriate model that should be used. Sometimes a firm may even be forced to develop its unique model to solve a unique problem. The following are some of the models that a firm may consider based on the prevailing environmental circumstances.

Harvard model for HRM

The Harvard model may be used when developing an HR strategy. The factor that makes this model appropriate when making HR plans on issues such as training and reward is that it focuses on six critical components of human resource management (Irena, Vincent, & Hebson 2009). The components are shown in the figure below.

Harvard Framework for HRM. Source (Meifert, Ulrich, & Potter 2013, p. 89)
Figure 1: Harvard Framework for HRM. Source (Meifert, Ulrich, & Potter 2013, p. 89)

This model will help in ensuring that the developed strategy takes into consideration the interest of the firm and all other stakeholders. According to Aguinisl and Kraiger (2009), the Harvard model may be classified as a soft HRM. It falls under this category because it considers its employees as a very important part of the organisation that cannot be compared to the machines and other factors of production. It is based on the premise that employees are a source of competitive advantage within the firm. This model emphasises the need for regular training and effective rewards for the employees to make them more effective. This model may be appropriate in promoting creativity and innovation among employees. It can work well under a transformational leadership approach.

Michigan model

The Michigan model may also be necessary when planning a successful HR strategy. It emphasises the fact that employees are factors of production whose primary duty is to ensure that the objectives of a firm are accomplished. It means that when planning, employees should be considered part as factors of production, just like the machines. Their cost and functionality should be the central focus when planning. It looks at both the internal and external factors of HRM as shown in the figure below.

Source (Boxall & Purcell 2000)
Source (Boxall & Purcell 2000)

The resource-based view (RBV)

Resource based review is another popular model that has been in use when planning human resource strategies. Bozionelos (2005) says that this model considers resources, especially human resources, as superior to the performance of a firm. For a firm to achieve superior performance, it must start by having superior resources. The superior resources will automatically bring about superior performance. The following figure shows some of the critical issues that should be considered when using this model.

Source (Armstrong 2007, p. 88)
Source (Armstrong 2007, p. 88)

When using this model, a human resource manager may easily see the relevance of training and rewards as means of having a superior resource that would lead to superior performance. Training them directly brings about the issue of superiority in their service delivery. Once they are turned into superior resources, then a firm has the responsibility of retaining them. The rewards are meant to ensure that they are retained. This model can help HR professionals to come up with effective training and reward programs for their employees. This model is classified as a soft HRM based on its principles.

Best practice

The concept of best practice has become very popular all over the world. Firms are coming to appreciate the fact that some methods or techniques of addressing different tasks are just superior to others. According to Turner, Mavin and Minocha (2006), best practices in various industries are always developed by industry leaders. These industry leaders are always under pressure to come up with effective ways of approaching different tasks to ensure that they remain at the top. They also have the needed human and financial resources to engage in expensive research that helps in developing these superior techniques. That is why in many cases firms will always try to emulate these market leaders when it comes to addressing some of the complex tasks. This concept may be used in defining the approach of training and reward within an organisation. Instead of spending a lot of time trying to come up with a new strategy, a firm may just adopt the industry’s best practices.

Conclusion

Planning a successful human resource strategy may require an understanding of internal and external forces that affect the workforce. The discussion clearly shows that strategies used in managing human resources are always different from those used in managing other resources. People are always affected by a number of environmental factors such as culture, laws, style of leadership within an organisation, the nature of work they do among others. These factors must be put into consideration in order to come up with a plan that will help achieve the expected results.

List of References

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