Effects of strategic human resource management on the profitability of a firm
Strategic human resource management is structured in such a way that it helps in fulfilling the needs of employees and meeting the organizational goals at the same time. Employees are very important in this form of human resource management since is all about the issues which affect employees significantly. Strategic management can affect the employees through firing, administration, hiring, pay, as well as the training of employees. The management of human resources may also give incentives, vacation days or safety procedure information which affects the performance of the employees. In other words, strategic human resource management has a very significant role to the employee as well as the organization.
There has been a dramatic change in the field of human resource management over the last decade (Delery and Doty, 802, 1996). These changes have fueled by the organizations' attempt to integrate the human resource management with other goals of an organization to facilitate the process of their realization. As a result of these shifts, the focus of the human resource research has widened from micro analytic research that dominated the field to a more strategic perspective (Delery and Doty, 802, 1996). These changes in perspective as already seen have increased the man's desire to integrate human resources with the organizational goal to facilitate the realization of organization's goals. These developments have raised the researcher's curiosity to discover new things in the field.
In the contemporary world, human resources are a significant factor which determines the success of any organization. Human resources determine the competitive advantage of an organization. However, this is determined by how the management of human resources is integrated with the objectives and strategic goals of an organization (Darwish, 2009, 2).
Relevance of my topic (strategic human resource management)
This study gives an analysis of how strategic human resource management affects the profitability of any organization. It is very important for a company to rethink ahead and plan ways for a company to meet the needs of its employees as well as the needs of the company. This study will help in proving the need of strategic human resource management in management.
There are several studies which have been carried down by on the strategic human resource management. However, there is no researcher who has given such a significant attention on the effects of strategic human resource management on the profitability of a firm. However, there is a close relationship between SHRM and the productivity of a firm.
This study will provide a deeper understanding on how the strategic human resource management affects the profitability an organization. As already seen, such understanding will be very important in shaping the future of an organization.
Importance of the taking a study on effects of strategic human resource management on the profitability of a firm to me as an individual
There are several reasons why the following research is justified. To start with, researchers have not paid much attention on the effects of strategic human resource management on the profitability of a firm. Most of the researchers have ignored this contribution despite of its significant contribution to the success of an organization. This study seeks to find out the significance of strategic human resource management on the profitability of an organization. This information is essential in making some of critical decisions in an organisation.
The results of this study will be important to various organizations in making decisions related with strategic human resource management. This information will enable firms to make decisions which are likely to increase rather than decrease the profitability of the firm.
How this topic will be meaningful to my future career
This topic is very meaningful to my career. The topic will give me a chance to conduct an intensive research on how the strategic management of a firm is related with the firm's profitability. This will see me through my career in management as I will equip my self with skills on how to maximize profits in my organisation.
This topic is also meaningful because of the fact that it raises my knowledge in managing human resources. This will prepare me for my future career by equipping me with the necessary skills in the field.
This topic will also increase my curiosity in this area. It will act as the driving force which may lead me to a level of finding solution to some of the main problems facing organizations in the department of human resources.
Background of what this topic is (Effects of strategic human resource management on the profitability of a firm)
Strategic human resource management can be defined as a general approach to the strategic management of human resources which is guided by the plans of the organization's future on the course it would like to take. Strategic human resource management is concerned with organization's issues in the long term as well as the concerns about the culture, quality, structure and relating the available resources to the future needs.
Strategic human resource management can also be defined as human resource deployments and activities planned pattern that is aimed at helping the organization to reach its goals.
According to Delery and Doty, the field of strategic human resource management has faced a lot of criticism on the ground that it does not have a solid theoretical foundation (Delery & Doty, 1996). There is therefore a reason to have a critical research on the area. In order for a company to meet its organizational goals, is advisable to integrate its human resource management within its strategic plans.
Perspectives of strategic human resource management
Perspectives of SHRM can take a number of dimensions. There are some strategies which are framed to bring a fair distribution of rewards in an organization. This strategy ensures that there is no bias in rewarding employees for their efforts. This will encourage employees to work harder towards realizing organizational goals.
The other category of strategies in human resource management is aimed at streamlining the structure. Such a strategy helps in improving the level of efficiency in an organization. It reduces time wastage hence maximizing the labor force.
Advantages of strategic human resource management in organization
One of the main advantages of strategic human resource management is that it helps a company to realize its strengths and weaknesses Buzzle, n.d.). This enables an organization in making the best decisions on sensitive matters. It is very important for every organization to be aware of its weaknesses and strengths as it will determine their success. Awareness of potential threats is also very important to the firm as it will help in reduces risks in the future. As Ahluwalia puts it, strategic human resource management is important in assessing the environmental uncertainties (2008).
Another contribution of strategic human resource management to the firm is that it helps in development and retention of competence among the employees. The level of employee's competence is the major criteria which determine the productivity of the employees. An organization can reduce its operational costs if it manages to maintain a high level of competence for its employees. In other words, the competence of employees will contribute in improving profits by reducing the cost margins. Ahluwalia asserts that strategic human resource management has a significant impact in increasing the productivity of employees.
Strategic human resource management can also be very important in helping multinational companies in gaining global competitive advantage (Schular & Jackson, 2007, p.140). It enables the domestic companies to build their competitive advantage over their counterparts. This again will lead to improvement in the profit margins since the organization can be able to reach its customers fast without incurring much.
In conclusion, this discussion has revealed that strategic human resource management is a key factor which determines the profitability of an organization. Despite the fact that several researchers has carried research on this field, there is no much attention given on examination of the contributions of strategic human resource management on labor productivity.
This study has shown that strategic human resource management vital in improving the general quality of the employees as well as streamlining the structure in an organization. By so doing, it reduces the costs of production consequently increasing the profit margins.