TASK 1

The Positioning of Human resource management in relation to business strategies

In business management, human resource strategy is the guild-lines for an organization in handling
its human capitals and dealing with employment-related issues. Several scholars had made
attempts to theorize what is human resource management. For Tyson (2016), human resource
strategy is the development of capability within the company, to give the business a competitive
advantage, in other words, human resource is one of the input ingredients for development.
Meanwhile, others conceptualize HR strategy as an output or a tools to achieve companys goals.

The relations of HR strategies with organizational policies is a part-whole relation. Therefore, it

is evident that a company needs to appropriately align its HR strategies with relative policies and
within its range of HR practices. There are two types of alignment: vertical and horizontal. While
vertical alignment refers to the consistency between HR strategies and companys competitive
strategies; horizontal alignment concerns the degree of correspondence among different HR
practices such as work design, recruitment, selection. For example, if a company want to incentize
employees to contribute more to create competitive edges, from vertical aligment, it would want
to lessen the power distance in HR approach. In terms of horizontal alignment, this perspective
will be synchonozied among all HR activities, such as: designing small-team tasks, organizing
sharing and feedback session, rewarding constructive comments.

One of the main responsibilities of company strategy is to manage companys resources

including human capitals. The relationship between business strategy and human resource strategy
can be categorized into three aspects. Firstly, human capitals is one types of companys investment
in terms of payment and trainings. Secondly, when employees fail to perform their tasks could
devastate company business. Thirdly, the managers play a key role in meditating between business
and people relations by balancing between financial gains of company, economic benefits of
employees as well as their legal and social intestates (Bagga & Srivastava, 2014). If HRM
practices are implemented effectively, employees could reap ample benefits: high satisfaction of
employment, strong commitment to organization and efficiency. Meanwhile, a company can
achieve its desired goals by applying suitable HRM strategies (Delery & Shaw, 2001). Theoretical
frameworks also imply a strong link between business strategy and HRM strategies, including
recruitment, development, remuneration and monitoring.
Strategic human resource management (SHRM)

From above, it is arguable that strategic value is one of the most important determinants of HR
strategy. This trend towards a strategic long-term orientation of HR management has give rise to
a new concept coined strategic human resource management (SHRM). The fundamental concern
of this model is a highly interrelated linkage between competitive management and HR practices
(Lengnick-Hall et al., 2009). The idea is, strategic human resource management is the pattern of
planned human resource deployments focusing on securing a firms best interests. The distinction
between SHRM and tradition employment practices are two key aspects: First, SHRM pays more
attention to organizational strategy than individual employees. Secondly, SHRM underlines the
significance of human resource practices as solutions to resolve business conflicts in lieu of
employee strategies. Besides, human is considered the key component of company structure.

The idea of SHRM has gained significant attention in academia as well as the management of
professional businesses for the last decades. Advocates for SHRM argue this approach can
tactically contributes to a organizations profits and resources. By implementing particular HRM
practices with the organizational strategy, company can effectively allocate its employees in
suitable positions for both individual and company goals.

Strategic human resource management concerns companys capacity to strategize its plans to
incorporate human goals across other aspects (horizontal integration) such as marketing, public
relations as well as the degree of integration (vertical integration) of strategic company values
(Armstrong, 2010). Fundamental, SHRM is based on the idea that there is a positive connection
between human resource, business strategy and external factors. Consequently, so as to improve
the performance of employees, it is important that SHRM activities are synchronized across all
departments and from top to bottom level (Chew and Chong, 1999).

Major SHRM Approaches (Best fit/Contingency, Best Practice/Universalist and Resource

Based View, (RBV).

These different approaches represent four different aspects of human resource, each represents a
specific dimension of the reality in workplace employement management.

The Contingency Approach

This approach centers around the idea that there is a vertical relation between HRM practices and
organizational management and that the planning of the organization directly influences how
human resource activities are dealt with. According to Stiles and Kulvisaechana (2004), it is
critical that HRM department works closely with firms management board in order to utilize their
effects.

There is two types of fits in contingency approach: vertical and horizontal. While the two types of
fit have their own advantages, generally the vertical approach is more widely applied. The
difference between two types are: vertical integration focuses on the alignments of HRM and
business plans with its external environment. On the other hand, horizontal integration emphasizes
the degree of fit between different internal HRM activities whether they assist each other or
counter effective (SHRM: Progress and Return, 2013). This means HRM practices need to be
synergistic and interconnected. Horizontal integration could be realized through the practice of
shared system incorporating performance monitoring and evaluation (Armstrong, 2010). This
refers to the cohesion of not only human aspects but also the cooperation between the use of
internal resources and opportunities.

Best Practice/Universalist Approach

The second concept in strategic human resource management is universalist or best practice.
This concept underlines the importance of consistency among different elements of HRM
strategies to maximize its effects. According to Chew and Chong, this approach refers to the
simplest form of theoretical statement in the SHRM literature by indicating the universally-
proved linkage between individual practices and the total effects of HRM approach in a unit (1999).
From that, they suggest best practice as the simplest yet powerful model of SHRM and strongly
advocate the use of universalist perspective over other models. However, a number of scholars
have expressed concerns regarding the ambiguity of the approach how to determine which
practice is best practice and how to ensure the consistency in a given organization (Stiles &
Kulvisaechana, 2004).

Resource Based View Approach (RBV)

The resource-based view (RBV) is one of the most highly applied among HRM theories, largely
because of both its academic acclaim and its functionality to articulate the interaction between HR
and economic success of firms. This model proposes the origin of a companys competitive edges
are its internal resources including human capitals (Barney, 1991). From this foundation, RBV
advocates argue that people as one of the main input in a firm plays a critical role in business
performance as well as how should business strategies are designed (Deadrick and Stone, 2009).
It is evident that this approach underlines the level of competency of a firms employees both
intellectually and professionally in producing the extra values and revenues in a sustainable
manner.

One key achievement of Resource Based View Approach is that it acknowledges the theoretical
significance of internal resources to the success of a firm, thus strengthening its argument in favor
of human resource (Wright & McMahan, 2005). Further, the focus on employees regarding
recruitment and training is expected to create long-term sustainable development and companys
values. On the other hand, skeptical researchers add that there need to be more empirical researches
so as to validate the approachs desired effects and to clarify its application methods.

Performance management and Reward

Performance management in HRM is the evaluation system of employees performance and room
for development. It is one of the oldest and widely used management practices. This appraisal
activity is an integral instrument for an organization since it provides concrete insights for
decision-making process regarding promotion, merit-based bonus, discharge, training and
development. Apart from being instrumental for company managers, it also has positive effects
such as increasing employees commitment and satisfaction. However, more and more people
acknowledge that the practice of defining, planning and managing performance might be more
important and more effective the the actual appraisal of employees works (Pareek, 2002).
Moreover, in recent years, the rising competition and changing economic environment have posed
notable challenges for firm in monitoring and evaluating employees performance. Many
companies have switched from reactive system to proactive system of appraisal with the purpose
of producing a detailed, personal evaluation result, boosting productivity and improving existing
development and training programs (Bouckaert and Peters, 2002).

Reward system is an important issue in any organisation because it is a key factor in energizing
employees behavior. In particular, reward is used to direct human performance, encouraging
positive results and maintaining beneficial attitudes (Dodlova and Yudkevich, 2009). However, it
is important to remember the improvements in performance from rewards such as merit pay may
simultaneously be resulted from the effectiveness of goal planning and performance evaluation
activities, and not merely from incentives such as money or gifts employees receive. Therefore,
reward in SHRM practices underlines the maintenance and encouragement of human factors such
as job satisfaction, people sense of recognition rather than financial gains (Dulebohn et al., 2009).

Several reward practices have been proposed with regards to performance management. First, goal
setting can be done personally as individual employees can discuss desired forms of rewards with
supervisors (Dulebohn et al., 2009). In this practice, employees take part in the development of
goals planning, thus, they are more likely to perceive the outcome as achievable and to be
energized to achieve them. Besides, managers play a proactive role in this negotiation to guarantee
proposed goals are in line with corporate objectives while provide opportunities for employees to
apply and improve their skills and capacity. Another practice is public acknowledgment which
aims to reinforce desired behaviors of employees (Robbins et al., 1998). This could be undertaken
in the form of a quarterly and annual achievement award and presentation. Also in this approach,
it is important to make sure these rewards are customized to individuals since different employees
have different preferences of achievement recognition. For example, while some prefer material
rewards, others might feel more valued if they receive personal compliments. These strategies,
though initially aimed at improving individual performance, should also be conceived and thus
planned in regard to increase job commitment and promote companys values and culture.

TASK 2:

Employment Relations

Employment relations refers to the interrelationships, both formal and informal between different
stakeholders in a workplace. Huiskamp defines employement relationship as the terms and
circumstances in which labor is sold and put into untility (1995). It is also considered as a bridging
term that incorporates both industrial relations and employment relations, thus, it has a wider
scope and involves multiple stakeholders as well as external players (Balnave, 2009).

Traditionally, employment relationship focus on key actors such as managers, employees,

government. In this relation, a certain level of collaboration from both employers and employees
is required in the effort of achieving respective goals. For example, employers provide investment
by preparing facilities, goods and other working conditions while employees are the one to deliver
added values by turning these inputs into marketable products. This relationship is reciprocal in
which employers could only achieve their desired objectives by facilitating employees in their
performances as well as in achieving their personal goals.

In employment relationship play, each actor play different roles that are equally irreplaceable. To
be specific:

Employees

Employee is the first and one key player in this relationship. One of the fundamental factor to
categorize employees is anyone who sells their labor. Considering this, even managers and director
are also employees to their respective superiors oftentimes company owners and investor. In
this perspective, the ultimate goal of employees is dened as to gain both income and leisure while
maximizing their utility to the organization. In the employers view, employees are a factors of
production, a tool that should be effective managed to increase profits (Kaufman, 1999). However,
it is worth mentioning that employees are also economic and behavioral beings that are influenced
by social factors. They are motivated by not only material rewards but also social concerns, and at
the same time are entitle to universal human rights such as justice and fairness.

Employers

Simply put, an employer is the purchaser of labor. Most employers are owners of an organization,
either it is private, state-owned, shared or non-profit. In this sense, managers and directors can be
viewed as a part of employer group as they mostly act upon the benefits of employers while dealing
with employees. The fundamental incentive of employers are to maximize their returns from
investments (Manning, 2003).

Within the context of the employment relationship, then, an employe is a collection of stakeholders
that seeks to balance employee interests with the interests of other shareholders and entities. It is
worth mentioning that employers are also multifacet social institutions that operate with their own
rules, ethics and structures (Perrow, 1986).

Government
Government is the third party in employment relationship. Governemnt is a special actor in the
relationship as they are both play a part and control by enforcing a set of economic and labor laws
(Nolan, 2012). It regulates the employment relationship through employment law or individual
labor law that speculate individual employee rights and employment standards such as minimum
wages and nondiscrimination, and through labor laws concerning different parties: works councils,
unions, employers and professional associations. Moreover, it also play a suportive role by
establising social norms, enforcing economic policies that inuence the economic environment,
type of socio-politico-economic system.

The nature of employment relationship is interdependency. The complexity of the employment

relationship is apparent considering the dimensions of interests and tensions. The employment
relationship involves an agreed transcation realized by the buyers and sellers of labor. At the same
time, employment laws notably direct this relationship to ensure smooth and fair operation of the
market. Labor and thus employees capacity is viewed both as a commodity and a social beings
that demand special rights. This means that different stakeholders from employees to employers
and unions might seek varying interests, which could lead to tensions and conflicts of interests.
Among those, the fundamental source of tension is how to draw the line between employers
interest to maximize profits from their investments employees pay, and employees interest to
secure their economic gains as well as other nonphysical satisfaction including job satisfaction,
freedom of creativity and sense of contribution (Sparrow and Cooper, 2012). For example, while
tight management is expensive, time-consuming and might interfere with employees creativity
realm, from employers perspective, it minimizes risks of unsatisfactory performances and ensure
desired returns across all departments of company (Sisson, 2008).

Mechanisms of employee participation and employee voice

It is worth mentioning that the recent trend has shifted towards more people-oriented approach,
involving stakeholders like individual employees, unions as well as customers and other interest
groups (Turner and O'Sullivan, 2013). They also take into account social factors such as sex and
complexity of employment arrangements. These broadening areas of interests have significantly
acknowledged the active participation and influence of employees. Employee participation has
become more highlighted in new HR management strategies which emphasize the importance of
teamwork, team spirit and support network.
Employee voice is one key factor in facilitating employee participation. If employee participation
is acknowledged to have positive relationship with performance improvement, it is self-
explanatory that the participation of employee voice is one key aspect in encouraging their
engagement. Accroding to McCabe and Lewin, this idea is based on the mutually agreed base that
employees possess sufficient ability, skill, knowledge, and interest to participate in business
decisions and by encourage employee voices, managers could leverage these resources (1992).

The management approach that centers on employees participation and employee voice has
become more and more recognition. This model focuses on empowering low-level employees in
order to involve the employee with the firms planning process. According to Stueart and Moran
(2007), by flattening the hierarchical structure through direct involvement of small teams,
employees are able to voice their opinions in the decision making process of an organization. This
also includes team work circumstances when individuals which may take turn in being the leader
or has one specific leader for different tasks. Overall, these employees have the opportunity to take
more direct roles in the decision making, thus a higher level of participation and sense of
responsibility. Additionally, it allows for individual growth and self-control.

There are several mechanisms that explain employee voices contribution to improved
employment relationship within an organizational context. In one way, it increases the degree that
employees identify themselves with a firm and willing to contribute to organization beyond
personal economic interests. As the study by Tangirala and Ramanujam (2008) shows, there exists
a positive connection between the highest amount of employee voice and a high level of autonomy
and a high team spirit. Besides, Mitlacher suggests high degree of commitment to the organization,
resulted from the employee voice participation can bring tremendous benefits such as lower
percentage of absentees, lower rate of job switching, less minor crimes and offense and more
willing to work overtime (2006). Finally, this practice gives employees a sense of conformity.
Gorden (1988) interprets that conformity is not synonymous with obedience, but that employees
share similar visions and goals with their employers, which minimizes tensions and conflicts of
interests and accelerate working processes.

Conclusion

This paper explores and critically analyses two key HR concept: (1) Human resource strategy and
its relation with business strategy and (2) Employment Relations. By studying and evaluating
dominant theories in respective subjects, the paper suggests a complex and interdependent
relationship between human resource strategy and employment relationship with the success of an
organization, as well as delivers critical comments on the application of the theories in pragmatic
work situations.

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