STRATEGIC HUMAN RESOURCE DEVELOPMENT 1
Strategic Human Resource Development and
Improvement of individual and Organisational Behaviour
In order to achieve improved individual and organisational performance through strategic HRD, organisational strategies need to be translated into HRD practices. This will assist the organisation in three ways (Sims, 2006). First, an organisation is capable of achieving financial performance through its effective way of executing strategy. Second, the demands of the customers are satisfied in a better manner because organisational customer service strategies have been turned into specific policies and practices (Sims, 2006). Third, adapting to change can now be easily achieved since the time needed to conceive and execute a strategy is reduced. In short, strategic HRD require consideration of both internal and external requirements in a simultaneous manner in order to achieve a superior performance in an organisation. Indeed, this improved performance advantage is achieved through strategic HRD in three ways. This essay explains how strategic human resource development leads to improved individual and organisational performance.
Today, HRD is increasingly becoming a vital element that gives an organisation its competitive advantage. Indeed, HRD involves the process of providing learning, training and development opportunities to organisational members for purposes of improving individual, team and organisational performance (Armstrong, 2007). In essence, HRD is a business-led approach that is organised towards development of people in a particular strategic framework. This gives rise to strategic human resource development (SHRD). SHRD can be defined as the process of identifying the needed skills and actively managing learning for the long range future (Armstrong, 2007). On the other hand, Walton (1999) defined SHRD as
“introducing, eliminating, modifying, directing and guiding processes in a such a way that all individuals and teams are equipped with skills, knowledge and competences they require to undertake current and future tasks required by the organisation”.
Strategic HRD is developed by clearly identifying the abilities and potential of people operating within the overall organisational strategic framework. It is not surprising that strategic HRD takes a wider and long-term perspective about how HRD policies and practices can be utilised in supporting realisation of business strategies (Armstrong, 2007). It is a business-led approach that encompasses learning and development strategies established by an organisation as part of its entire HRD practices. Strategic HRD is expected to a have positive role in assisting an organisation ensure that its goals are attained.
The appropriate goals of HRD have been debated for a very long time. There are those who argue that the focus of HRD should be to increase performance requirements of an organisation and in a more direct manner the productivity of employees (Swanson & Arnold, 1996). Yet others argue that HRD should focus on broadly developing individuals without using the underlying results as a way to gauge the worthiness of intervention. However, the importance of HRD to an organisation is not debatable since it has been found to assist the organisation towards achievement of its objectives. In particular, strategic HRD is important to organisations in the current environment where factors such as globalisation and intense competition significantly affect an organisation. Nonetheless, an organisation can use strategic HRD in order to improve itself and its members.
Strategic HRD can lead to improved organisational performance. The basis of this view stems from the premise that HRD should attempt to contribute directly to the goals of an organisation when productive organisations practice it. These goals are based on a system that needs both efficiency and effective at minimum in order to survive. Therefore, they are performance-oriented (Swanson & Arnold, 1996). As a result, focusing on performance is the responsibility of HRD. Since an organisation is a productive venture with mission and various goals, it can be considered as a system characterised by a number of inputs, processes and outputs (Gilley & Eggland, 2002). By characterising an organisation in such a manner, strategic HRD can be thought as its subsystem that operates within the entire system of an organisation. Indeed, many organisations aligned its overall goals and strategies with that of HRD. Additionally, performance is the primary means that organizations realise its goals and strategies. It then follows that the primary concern of HRD is improvement of individual and organisational performance. It is no wonder that managers are continually concern with the performance of the organisation since HRD can lead to an improved workforce and organisational performance.
Strategic HRD has been emphasised as an important contributor that ensures organisational effectiveness (Sloan, Becker, & Hyland, 2005). In addition, in order to get the maximum results from an organisation most important asset, the people, strategic HRD should be aligned with organisational goals. It has been argued on several occasions that organisations are able to capture and entrench knowledge and skills when they effectively manage and develop innovative approaches when developing employees (Sloan et al., 2005). Organisations seeking to survive and maximise its operational effectiveness should ensure that strategic HRD strategy is aligned with broader strategic imperatives at all organisational levels.
Organisations are composed of many functional areas that interact for purposes of organisational success. Human resources management and operational management are areas of strategic management that are critical to the strategic success of the modern organisations. Human resource development (HRD) is an area of strategic management that must be managed properly to achieve organisational success. HRD have been linked with many aspects of the organisation. For example, Welbourne and Andrews (1996) linked HRD with organisational survival. Furthermore, HRD have been linked with organisational turnover, firm value, productivity and financial returns. It is often said that an organisation that managed its human resources properly are in a better position to achieve its goals and objectives. HRD affects many organisational functions and without it, an organisation cannot function. It is therefore not surprising that HRD is one of the important areas of strategic management normally referred to as strategic HRD.
Strategic HRD is developed in order to accomplish certain objectives. Indeed, the fundamental objective of strategic HRD involves enhancing resource capability of an organisation (Armstrong, 2007). This objective is expected as a result of organising organisation functions according to the belief that human capital is the main source of organisational competitive advantage. Therefore, strategic HRD is concerned with ensuring that there is presence of correct quality manpower that meet the current as well as future needs of the organisation. This is realised through production of coherent and comprehensive framework for people’s development.
Specifically, strategic HRD is aimed at developing intellectual capital (Wilson, 2005). Additionally, its aim is to promote individual, team and organisational learning by creating an environment which encourages employees to learn and develop and the management of knowledge is done in a systematic manner. Its function is achieving organisational objectives by directing employees’ skills and competence (Swart, 2011). It is concern with procuring, developing, integrating and maintaining personnel in an organisation so they can contribute towards achievement of organisational goals or objectives. As earlier stated, strategic HRD is business-led approach. However, its policies should consider the aspirations and needs of an individual organisational member. In fact, HRD objectives of individual, group and department should be in alignment with that of an organisation. This is essential to a continued success of an organisation (Armstrong, 2007). Increasing employability within and outside the organisation is a crucial element that should be taken into account in consideration of HRD policy.
Strategic HRD leads to improved organisational performance and gives an organisation its performance advantages in three ways. An organisation can marshal human resources that are tailored towards supporting an organisational strategy. It then implements the chosen strategy in an efficient and effective manner. It can also utilize full potential of its human resources to its advantage. Lastly, an organisation can achieve performance advantages by leveraging other resources such as capital and physical assets in order to complement and enhance the advantages brought by human resources. All these cannot be achieved without HRD professionals. Indeed, Werner and DeSimone (2006) assert that substantial progress has been achieved by HRD professionals towards the move to have a more “strategically integrated HRD”. In particular, capabilities of strategic perspective of HRD can be demonstrated in three basic ways. The first one is through its direct participation in strategic management process as outlined above. Secondly, it can be seen through provision of training to line managers in areas of strategic management and planning. Lastly, HRD can demonstrate its strategic capability by giving training to all employees aligned with organisational goals and strategies.
The field of human resource development strategy has considerably developed in the last two decades in both literature and in practice. Strategic HRD is the new area in HRD that is different from the traditional HRD. Traditional HRD focus is on the development of individual performance (Richard & Johnson, 2001). In contrast, strategic HRD emphasises the functions of HRD systems that acts as solutions to various challenges that the business faces. Furthermore, strategic HRD focuses on the performance of the entire organisation rather than what individuals contribute to the organisation (Becker & Huselid, 2006). Even though strategic HRD is a strategic concept that focuses on the systems and financial performance among other things, the strategy entails more than these. Strategy concerns with the creation of sustainable competitive advantage that helps an organisation to register financial performance that is above average. In simple terms, strategic HRD model can be thought as relationship that exists between the structure of organisational human resource and its performance (Becker & Huselid, 2006). Human resource structure is comprised of practices, competencies as well as behaviours of employee that are needed to enhance their performance. Strategic HRD is the step that managers have to carry out in putting their organisations in a strategic position towards the achievement of organisational success.
In today’s organisations, paying attention to the development of human resource remains an important function. Indeed, human resource is a vital asset in organisational development. It is required by any organisation that intends to grow, stabilise itself, improve its processes and services and change and become more dynamic (Rani & Khan, 2014). Strategic HRD is particularly important in achievement of these objectives. This is because it improves individuals and organisational performance. Strategic HRD has a number of subsystems that can be used in developing competencies of employees and organisation (Rani & Khan, 2014). It includes performance appraisal and training and development. Evaluating performance of employees has become an important function that should be continually conducted in an organisation. In this case, performance appraisal is an important tool that an organisation can use in knowing its employees. The top management can thus be able to make strategic and accurate decisions regarding all the jobs. In turn, the overall quality of organisational processes, products and services are improved. Performance appraisal is a formal process that provides a clear picture of employee’s performance (Deb, 2008). It is done with a certain objective. As a subsystem of strategic HRD, performance appraisal can be done with an objective of improving individual and organisational performance. The areas that need to be improved are identified and measures taken to rectify the situation by developing strategies that improve performances. As such, through strategic HRD, individual and organisational performances are improved.
In various strategic HRD texts, the emphasis is on each level of organisational strategy that forms a strategic environment for the business. Implementation of the strategy for human resource development is undertaken at a functional level in order to facilitate organisational strategic goals (Wright, Dunford, & Snell, 2001). In fact, HRD strategy is a tool that is closely associated with the strategy of the business. HRD function in order to complement corporate strategy that determines the organisational human resource development policies and practices. These policies and practices are subsequently implemented in supporting competitive strategy that has been chosen by the organisation. Strategic planning that has been developed by a company is used in creating these policies and practices. It is a technique used in the management of the important aspects of the organisational environment. It helps managers to improve their decision-making process which affect positively the financial performance of an organisation (Cesnovar, 2006). Strategic HRD sets the direction for the company by aligning human resources towards the achievement of organisational plans and objectives.
The relationship between strategic HRD and organisational performance has been recognized by various studies. However, the mechanisms through which HRD leads to improved organisational performance has not been explored (Katou, 2014). Notwithstanding this, strategic HRD positively affect organisational performance in a number of mechanisms. Competitive advantage can be gained by an organisation through attraction and subsequently retaining the best human resources in the market. The universal and contingency human resource performance linkage models have been developed to explain how this occurs. First, universalistic model argues that the set of various human resource practices (‘best practices’) often produce results that are superior regardless of the underlying circumstances (Arshad, Azhar, & Khawaja, 2014). On the other hand, contingency model suggests that human resource management policies and practices are effective when they are consistent with other strategies of the organisation (Katou, 2014). Under the two models, training and development of employees are the basic components that people can acquire competencies and in turn improve organisational performance to a great extent (Holton & Naquin, 2005). Indeed, through training, employees are equipped with skills which result in better attitudes and behaviour hence leading to a better organisational performance. The whole process discussed above can be illustrated as below:
From time to time, change is needed in an organisation. This change is important to alter the performance of employees and the entire organisation. It has been proposed by many researchers that HRD has a potential of significantly contributing to change efforts of an organisation (Jorgesen & Paul, 2007). These change efforts are in turn important in improvement of individual and organisational performances. Pearn, Roderick and Mulrooney (1995) assert that HRD professionals are in an optimal position to develop an organisational environment that is conducive to change. Moreover, they are capable of facilitating strategic learning that is important to attainment of the desired change. Change brings new attitudes, knowledge, skills and processes to the organisation. Schuler (2000) argues that successful organisations are those that integrate human resource practices into relevant parts of their businesses. Change is one of these parts which can be integrated with strategic HRD in order to improve individual and organisation performance and ultimately organisational success.
The importance of human resources to an organisation cannot be overemphasised. Traditionally, organisations used to heavily rely on human resource function in order to manage employees and functions such as recruitment, selection and assigning of duties. Leveraging skills, abilities and knowledge of employees in order to be a source of competitive advantage continues to be the ambitious goal of human resource departments (Alagaraja, 2012). However, through strategic HRD, organisations can achieve this goal. By developing human resources to be better competent in undertaking their tasks, HRD transform the entire performance of an organisation. Improved human competencies lead to increased efficiency and effectiveness that most organisations need. An organisation that is effective and efficient is considered to be utilizing well its human resources hence better performance. Strategic HRD is critical to organisational performance and can improve organisational performance through its collaboration with various departments in an organisation. At the department level, an organisation can use strategic HRD to design and execute the best practices in selection, training and coaching of manpower in order to improve performance.
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