The association between human resource practices and also a firm’s business plan are aligned in a lot of ways. The best intention of the orientation would be to utilize human capital as tool to make the most of the business resources to the benefit of the stakeholders. Below are a few of the association between human resource practices and company strategy.
Human resource practices produce the procedure for the development of workers’ knowledge and the skill-set across the organization to promote its core competencies that support and maintain its competitive advantage in the industry.
Human resource strategies manage human resource so that the goals set by the organization can be achieved. The focus is directed on what the business intentions are as they relate to human resource policies and practices. Therefore, how human resource is spread across the organization’s units and departments, motivated, managed and retained will affect the performance outcome after the business strategy has been implemented. The relationship between business strategy and human resource practices also would determine the organization competitive and performance outcome.
A glimpse into Oya Erdil & Ayse Gunsel’s ‘BUSINESS STRATEGY AND HUMAN RESOURCE STRATEGY- THE INTERACTION’ shows there is a relationship between human resource management practices and an organization business strategy, which also could be referred to as the business environment and organizational development. Another defining aspect of that relationship is the across the board acceptance that an organization’s human resource management practices have a link to the firm’s decision making process, in other words, the HR practices be closely aligned with the strategy of the whole business. While there is not much disagreement as pertaining to the relationship between HR practices and business strategy, there is a tendency not to acknowledge the deeper nature of the relationship. The theory of human resource management opined that should employees be considered and managed as a valued strategic asset, the organization in practice would be able to achieve a competitive advantage, and the outcome will be a superior performance. This again, means managing human resource in such a way that it will correspond to the business strategy, being that the goals and process of each of the strategy profiles are different.
According to Oya Erdil & Ayse Gunsel, this relationship is further entrenched when you look at how human resource practices are selected based on competitive strategy espoused by the organization. An organization that coordinates its business strategy and human resources policies and practices achieve a superior performance outcome than those that do not.
ALIGNING PERFORMANCE MANAGEMENT TO STRATEGY AND CULTURE
As explained by Rob Gray’s ‘Aligning performance management with company plan,’ some companies could be overlooking the essential aspect that connects performance management to culture and strategy. For it is a company’s existing culture and practices which will choose the best use of its precious asset (human beings) if its company plan is aligned with its human resource practices. The proper tools are required if companies are to succeed in simplifying their human resource direction to its company plan. The age of utilizing performance review and evaluation as the sole tools for functionality, management alternatives have since been duplicated by an entire suite of proficiency measurement tools. These instruments have the ability to aid workers to comprehend the way and learning tools whereby they are able to effectively develop their abilities and ability. Tech is just one of the enablers but requires commitment from leading down that’s essential to get a high performance culture.