Implementing a Strategic Approach to Human Resource Management Within Revolution Bars

Implementing a Strategic Approach to Human Resource Management within Revolution Bars
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Implementing a Strategic Approach to Human Resource Management within Revolution Bars
Table of Contents 1.    Introduction. 3 2.    Issues to Consider. 3 2.1.     Strategic HRM... 3 2.2.     HRM Academic Models. 5 2.3.     Devolving HR Responsibilities to the Line Managers. 7 3.    Conclusion. 8 References. 9
1 Introduction
This report provides a recommendation to the human resource (HR) team at Revolution Bars, advising them on how to implement strategic human resource management (HRM). A strategic approach to HRM involves deciding the different ways of managing employees in an organization and putting those decisions into practice to facilitate high organizational effectiveness (Stewart & Brown, 2020). This approach ensures that the people management practices align with the organizations’ competitive business practices. Organizations can take various strategic approaches to HRM. Wilton (2022) states that the theoretical approaches to strategic HRM include the best fit, best practice, and resource-based view. The best-fit approach aligns HR practices with the business strategy, the best-practice approach aligns HR practices with high organizational performance, and the resource-based view approach produces a human resource advantage by matching human resources and opportunities.
Revolution Bars is a private company focusing on premium drinks and foods in the UK's high streets. In light of recent profit warnings, a decline in share price, and expensive staff turnover, the company has been looking to address its HR issues to facilitate organizational growth. The recently hired People Development Director, Fiona Regan, believes implementing a strategic HR approach is necessary. This report defines Strategic HRM, explores some HRM models, and explains the importance and challenges of devolving HRM to line managers.
2 Issues to Consider
1 Strategic HRM
A strategic approach to HRM is a process that links HR practices to the long-term goals and strategies of the organization. According to Biswajeet (2020), strategic HRM is an integrated process that aligns HR decisions and policies with organizational mission and strategy. Its goal is to create a strategic fit between HR and business strategies. This means that the HR manager has to ensure that available human resources are used effectively and efficiently to support the organization's business goals. Therefore, a strategic approach to HRM ensures that human resources provide a competitive advantage to the organization. It allows HRM activities to support and contribute to the achievement of organizational goals in a competitive business environment (Wilton, 2022). As a result, the organization experiences improved employee performance and productivity. Stone et al. (2021) add that a strategic approach to HRM allows HR teams to achieve the best fit between an organization’s internal strengths and weaknesses and external threats and opportunities. This fit allows the organization to stay competitive and grow as the market environment evolves.
Firms can adopt various approaches to strategic HRM. One of the approaches is the best fit or contingency approach, which focuses on identifying the best fit of HR activities and aligning HR strategy to the business strategy (D'Annunizio-Green, 2004). It is founded on the idea that there is no single best approach to managing human resources. As such, organizations should engage in HR activities that meet their unique organizational needs. The best practice or universalistic approach holds opposite views from the contingency approach. It is formed on the basis that there is one best way of managing employees to improve performance (D'Annunizio-Green, 2004). The assumption is that applying a single set of HR practices will promote high employee performance. The third approach, the resource-based view of HRM, promotes sustainable competitive advantage by enhancing the relationship between internal resources, including human resources, strategy, and organizational performance (D'Annunizio-Green, 2004). This approach considers human resources a source of competitive advantage, achieved through effective HRM.
Revolution Bars show evidence of the contingency approach. It is willing to adjust its HR activities and practices to meet its unique needs at varying stages. It has considered its people-centered and fun culture when formulating its HR policies. For instance, Fiona Regan notes that the company moved from a “maintain” people plan to a big picture one focusing on costs, efficiency, and structured future-oriented people management. The firm's HR activities increased efficiency and reduced costs in alignment with the firm's business strategy of cost reduction. They also reduced staff turnover because staff training needs were met. According to Stewart and Brown (2020), when organizations try to meet employees' needs and reduce staff turnover to enhance internal labor orientation and reduce turnover costs, they apply the loyal soldier HR framework. This framework aligns the HR strategy of staff turnover reduction with the organization's business strategy of cost reduction.
Revolution Bars will experience cost reduction through reduced recruitment and hiring costs and also experience improved cooperation and efficiency among employees due to internal promotions and effective training. However, there is a potential risk of organizational inflexibility because the long-term employee commitment presented by the loyal soldier framework can hinder adaptability in times of change (Stewart & Brown, 2020). However, the framework ensures that the HR strategy is aligned with the business strategy. Revolution Bars can future-proof its business by training and allowing its employees to take up different roles. Stewart and Brown (2020) reveal that when employees contribute to the organization in various roles, organizations can experience sustained efficiency, which the company needs.
2 HRM Academic Models
Ulrich models allow HR teams to arrange functions and roles across the department. According to Ulrich (1997), HR functions include HR business partners, centers of excellence, and shared services (Crawshaw et al., 2020). The HR business partner function involves decentralizing the HR role to various departments to allow HR professionals to work closely with department managers and understand the organization’s business needs. The HR centers of excellence function involve small teams of highly skilled HR professionals who use their specialized knowledge to develop best HR practices in areas such as employee engagement, learning and development, and reward. Finally, the HR shared service function is more employee-centered, focusing on employee-related administrative tasks such as payroll, personnel record management, and recruitment. According to Crawshaw et al. (2020), this model allows organizations to unburden HR teams to enable them to focus more on their strategic roles. These strategic roles are well-explained by Ulrich (1998) and Ulrich and Brockbank (2005).
According to Ulrich (1998), HR can support organizations in achieving their goals by taking up four essential roles: strategic partner, change agent, administrative expert, and employee champion (Crawshaw et al., 2020). As strategic partners, HR managers must contribute to strategic decision-making, work with line managers to enhance performance and ensure HR strategies align with business strategies (D'Annunizio-Green, 2004). As change agents, HR managers must enhance the organization’s change capability, help line managers lead and manage change, and attract, ...