Strategy & Human Resources Portfolio

Table of Contents

Title Page

Table of Contents

1. Introduction

2. Understand what a Strategy is

3. Describe the Components of HR

4. Identify the Relevance of HR to an Organization

5. Apply Basic HR Functions

6. Recognize the Concept of Change

7. Conclusion

8. Critical Appraisal

Reference List

Appendix

1. Introduction

This chapter will deal with the general approach of this portfolio and the structure in which this portfolio is written. It will be about the topics Human Resources and Strategy and will be in most times based on the online edumundo book we worked with throughout the semester of the course PM9 and the lectures, including the guest lecture we had in this course of Strategy & HR.

As Strategy & HR are both topics that are more essential from day to day, I am focusing on these two topics in this report and will later in this report also look at the changes Strategy and HR were going through and will be going through on the future. Before I write about the changes, I will rather concentrate on definitions and components of both topics.

The now following will shortly describe the structure of this portfolio. In chapter two, a general explanation of the term strategy will be given. In chapter three, I will write about the most essential components of human resources. Chapter four, will be about the relevance HR has to an organization.

In chapter five, basic HR functions will be applied with the help of a self-made video and the reflection on it.

Chapter 6 deals with the concept of change and how it affects HR and Strategy.

Afterwards a general conclusion on the importance of Strategy & HR will be drawn in the last chapter of this portfolio.

2. Understand what a Strategy is

In this very first chapter based on the edumundo book we worked with throughout the whole second semester, I am going to explain what the term “strategy” is including.

“So, you could say that a question like “What is strategy?” is actually not as easy to answer as you would think” (Custers, et. al., 2018).

As it already says in the second chapter of the edumundo book “Strategy & HR”, it is not simple to define “strategy” in just a few sentences.

Referring to the Cambridge dictionary strategy is: “a detailed plan for achieving success in situations such as war, politics, business, industry, or sport, or the skill of planning for such situations” (www.dictionary.cambridge.org/).

But that is in my opinion far to superficial when looking at the term in a businesswise context. In our first semester, we learned in marketing that a marketing strategy is the ground work for any marketing plan. The marketing strategy of a company should consist of all marketing goals a company has.

I think that this is not only applicable for marketing itself, but for every basic module strategy of any company.

According to Simon Sinek’s golden circle, an organization should be clear about its WHY, and then base its strategies on it. So according to the TED talker, Strategy is about HOW; How can we “live” our WHY? (cf. Custers, et. al., 2018) (see appendix 1)

When looking at strategies at a corporate level, you can find for instance Michael Porter’s generic strategies which states that an organization should either strive for overall cost leadership, or for differentiation, or for a focus strategy, last but not least there are also Treacy & Wiersema’s value disciplines which show similarities to Porter’s strategies.

An example of an extremely felicitous strategy would be the former startup Airbnb, whose strategy it was right from the beginning to “Make sure customers know exactly what they're getting” (cf. Airbnbs official website). They tightly held onto this strategy and did not embellish any houses they offered for rent with photoshop or other prettifying programs and this brought them honest success for their company.

In a nutshell, you can say that strategy is an extremely important topic, not only when it comes to company founding, but also throughout the whole life cycle of a company or organization, otherwise companies like Airbnb would not be this successful.

3. Describe the Components of HR

The practicing of Human Resources (HR) could not exist if there were not the ground modules to build it up with.

In the following, I will write about the most relevant components that bear Human Resources. Whereas the best fit approach claims that there is no definite way of applying HR and that it should just fit to the business strategy of a company, the best practice approach gives clear instructions on how to practice HR, like offering employees security or improving informationsharing, regardless on the organization’s context (cf (Custers, et. al., 2018).)

The most important components in regard to Human Resources are:

1. Recruitment
2. Talent management
3. Performance Management
4. Work and well-being
5. Equality & Diversity
6. Reward Management

In the following I will give short descriptions on all of these components, starting with the primary listed point “recruitment”.

1. Recruitment

For most of the people, the term “recruitment” just means hiring the right person for a job, which is properly correct in view of only considering the essence of recruitment. However, there is more than just the essence to the meaning of recruitment, you also have to initiate the steps until you find the right candidate for the announced vacancy.

According to the business dictionary “recruitment” is "The process of finding and hiring the best-qualified candidate (from within or outside of an organization) for a job opening, in a timely and cost-effective manner. The recruitment process includes analyzing the requirements of a job, attracting employees to that job, screening and selecting applicants, hiring, and integrating the new employee to the organization" (www.businessdictionary.com/)

Basically, the definition and additional information from the edubook claim that recruitment is a process, organizations have to primarily build up an application pool from the internal or external job market (cf. Custers, et. al., 2018).

If you have enough potential candidates in your application pool, you can start with the selection process, which is most of the time conducted as a typical job interview. Management always needs to have in mind a clear idea of what is needed to attract the best candidates, what the future employee should bring with and which tasks he exactly has to fulfill. After what most people think the actual recruitment process, the integration of the employee into your company comes to importance. Integration Is also a main component of the recruitment process.

Summarized, to survive in todays “War for Talent”, organizations have to have a fully developed recruitment strategy in order to gain competitive advantages over other organizations.

2. Talent management

When speaking of talent, nearly every human has a different image of a talented person in mind. It also describes a challenging word, since everyone wants to have a talented gift. People argue if talent if you are born with talent or if it is something that you can develop over a certain fraction of time.

But what exactly is meant when we speak about talent management?

The targets of talent management are attracting, developing, retaining and motivating a talent. That results in benefits for both the organization and the employee wellbeing. A well implemented talent management strategy is a benefit for the whole organization, because it all results in making more profit in the end (cf. Custers, et. al., 2018).

Talent management can be compared to supply chain management, due to the reason that the issues and challenges of both are highly similar (cf. Peter Cappelli, 2008). According to Peter Capelli, it still makes sense to develop talent internally in the own organization, it is cheaper and less disruptive way. But you also can not forget the aspect that also outside hiring can be fast, often even faster and more responsive. An optimal approach could be to use a combination of both approaches. The hugest barrier is to figure out how much of each approach to use (cf. Peter Cappelli, 2008).

Despite all these named aspects, in my opinion the most important fact still is that managers have to believe in their employees developing themselves.

3. Performance Management

Performance management is a process in which several actions are undertaken.

It is strategic, context-specific, dynamic, coherent, integrated, but not purely operational, static, fragmented or an isolated process.

Although performance management is an ambiguous term, it is certainly about the improving of performance. Therefore, management should ensure that employees are aware of what “high performance” means in regard to their company.

Performance management can include strategy, economics, accounting, organizational behavior, operations management and of course human resource management.

The performance equation, also called the AMO model or framework, shows precisely how the practice of Human Resources have an impact on the improvement of performance in an organization.

The “A” stands hereby for “abilities”, the “M” for mindset/motivation and the “O” for “opportunities”.

All together they build up a triangle of which everyone of the three components is essential for HRM to maintain.

In other words, performance is the function of Ability x Motivation x Opportunity.

However, the measuring of performance is a complicated task as you have to consider many points, like what exactly to measure or how to measure intangible aspects of performance management.

Managers have the challenging task to measure the good and the poor performance of their employees objectively and evidence-based in order to give useful feedback to them and track performance improvements.

Moreover, all these aspects vary in different countries and are contingent on (e.g. societal, economic, political and legal) factors.

The AMO framework can also be set in contrast to the Michigan model (Fombrun, Tichy and Devanna, 1984), which is an associated chain with the main aspect “performance” in it. Here you can say, that the letter “A” from the AMO framework can also replace the selection, development and appraisal aspect of the Michigan model, since the term “ability” includes all these three aspects.

4. Work and well-being

“Workplace Well-being relates to all aspects of working life, from the quality and safety of the physical environment, to how workers feel about their work, their working environment, the climate at work and work organization.” (ILO 2018)

Formerly work and well-being, or else said, health and safety issues were not a big topic in organizations. It only started to change recently, approximately 50 years ago.

One of the most known and generic implementable models on the topic of work and well-being is the job demand-resources model (JD-R model) (Bakker & Demerouti, 2007).

The basic statement of this model is the assumption that every job can be classified into two general categories: job demands and job resources. The job demands are hereby seen I a rather negative associated light, which can turn into job stressors, they cost energy, whereas the job resources can bring for instance authority or autonomy and give the employee the feeling of value for the organization.

In a nutshell, the job resources can bring in the balance for the stressing job demands, to have a compensated job life.

5. Equality & Diversity

Based on the oxford dictionary, equality means ‘The state of being equal, especially in status, rights, or opportunities.” or in a more businesswise context “an organization aiming to promote racial equality” (https://en.oxforddictionaries.com/).

A definition of diversity would be “A range of different things.” (https://en.oxforddictionaries.com/).

As equality and diversity is in this age mostly equalized with fairness, organizations who respects these aspects are considered as more “modern” and “fair” ones, because it is mostly preventing discrimination, which is of highly note at the present time.

Only a few issues of discrimination are covered by law, therefore organizations who accept equality and diversity have a good reputation and human resources are being put to better use.

An example of a new trend in HR is Sustainable Employability (Berenschot, 2017) which supports a healthy, inspiring and inclusive working environment and is also in my opinion the right thing to do to include all kinds of humans.

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