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environment than ever before. SHRM that ‘focusing on the linking of all HR activities with the organization’s strategic objectives’ (Raymond, 2010) will become a critical issue to business success. Globalization with international competitive threats due to a large number of foreign competitors entering the domestic market (D'Aveni, 1994; Hafsi, 2002) will cause three main challenges that have great impacts on companies relating to SHRM. These are profitability, work-life conflict and increasing competitiveness pressure. Accordingly, a fit SHRM can help an organization to build significant bottom line, attract labor with the conditions insuring standard work-life balance and enhance competitive advantages. I. Strategic human resource management issues HRM concentrates on the employer – employee relationship to help organizations to archive their business goals or improve their performance (Raymond, 2010). We recognize that HRM is a part of management category which means HRM consists of planning, organizing, leading and control human resource. HRM is also considered as a major discipline that ‘affect customers, business results and ultimately shareholder value’ and therefore this is a great contributor to business success (Gubman, 1995). Strategic Human Resource Management (SHRM) is defined as follows: ‘The process of linking the human resource function with the strategic objectives of the organization in order to improve performance’ (John et al., 2003; Raymond, 2010) HRM activities are implemented following the reasonable SHRM of the organization will guarantee that employees contribute to archive its business targets (Raymond, 2010; Baird & Meshoulam, 1988; Delery & Doty, 1996; Huselid, et al., 1997; Jackson & Schuler, 1995). There are 13 activities including: (1) Job analysis defines a job in terms of specific tasks and
trade and investment potential and resource accessibility (i. work-life balance and increased global competitions Globalization which means. 1988. 1993.responsibilities and identifies core skill and essential criteria to perform it successfully (2) Human resource planning is the process by which an organization attempts to ensure that it has right number of qualified people in the right jobs at the right time (3) Recruitment (4) Selection (5) Performance appraisal accompanied with the plan for performance improvement (6) Human resource development activities focus on training employees for effective performance (7) Career planning and development (8) Employee motivation contribute to improve employees’ productivity (9) Remuneration (10) Benefits (11) Industrial relations (IR) deals with employee attitudes and employee – organization relationship (12) Health and safety program (13) Diversity management (Raymond. 2010.e. 1983). Jones. etc (Raymond. II. 2002. Levitt. It is apparently that globalization increases market potential. Marquardt (1998) suggested 11 factors that create the global marketplace and global organizations including: (1) Global technology and telecommunications (enhance by fiber-optics) (2) Satellites and computer technology (3) Competitiveness of global corporations (4) Converging of global lifestyles and values. foreign government policies and . work-life balance and globalization 1. in short. the free flow of human and financial capital) of firms especially in the developed countries of EU. developing market globally is a major trend of world economy in 21st century. resources and services (8) Emergence of the knowledge economy and era (9) Workforce mobility (10) Privatization and globalization of government services (11) Emergence of open and unrestricted (free) trade. NAFTA. 2010). accelerated by global languages (5) Emergence of global market drivers (6) Lowering of cost doing business globally (7) Globalization of financial markets. The challenge of profitability. ASEAN. Contractor & Lorange. SHRM as response to challenge of profitability. Fawcett et al. There are also a number of external influences accompanied with globalization to firms such as multicultural workforce..
1990. 1990). To sum up. Marquardt. Milkovich. D'Aveni. 1990). Research suggests that companies which lose their competitive advantages in globalization context often consider SHRM issues as peripheral (Welch et al. profitability involves crucially SHRM and HR should be regarded as profit center (Ken. 2008). laying off employees.. 1997). selling assets. employees and thus encourage them to devote their time and creativity to get more profit (Osmond. 1998. the business to a competitor or even bankruptcy (Osmond). Abowd. Hafsi. Gerhart. HRM strategies need to developed as an essential part of an organization’s overall strategy (Debrah.. At any time.. increased global competitors and so on (Raymond. Gerhart et al. Along with gaining competency pressure is the demand of reducing cost and reaching profitability for cost advantage of firms. cross – culture issue. David.e.. Abowd. 1999. 1998. As a result. Leonard. Osmond. Under competitive pressure. 1990. work or life) make it difficult to comply with the demands of the . 2010). It also can improve the livelihood of its shareholders. Poole et al. loss can force the company into closing underperforming manufacture. 1994. Grundy. A profitable company can spend a fraction of its profits on reinvesting in another segment or grow up its current business. 1928. 1990. profitability is always believed to be a measure of business success (Littleton.economic situations. 2011). This situation is called the implication of work – life conflict that ‘is out of kilter when the pressures from one role (i. 1994. ‘This symbiotic relationship allows the business to generate more profits from business operations and pay a fraction of these profits to employees based on their performance’ said Osmond. 2002).. workforce are more expected to work harder and even overwork but in harsh workplace norms that give employers unexpected results (Fox. Consistent with this some researches show that companies with higher pay-for-performance initiatives retained better long-term financial objectives than did those with lower pay-for-performance initiatives (eg. 1996) to archive competitive edge. 2010. In contrast. Briggs et al. Stening et al. 1997.
Boles & Babin. 2001. There’re also the link between the provision of flexible work options <HR policies and activities such as child care. Galpin et al. ‘the costs of hiring and training new personnel.. All these things point out work-life balance becomes HR policies and activities or a SHRM issue and affects directly to business success.other’ (Greenhaus et al. 2. Netemeyer et al. 1985). Frye & Breaugh. 1996. shows that competitive pressure (i. Companies can obtain achievements by making choices about HR activities that are compatible and support the corporate strategy (Shuler et al. 2004. 1997). In summary. 2000. etc> and reduction turnover (Capelli. ‘merging business and HRM strategies is a critical source of competitiveness for organizations’ (Ulrich. 1987. seeking for sales. An executive survey of Professor David Ulrich of the University of Michigan. maternity and parental leave. less committed to and satisfied with their organization and more likely to be absent and leave the organization (Adams. The indicators prove that employees who have to suffer stress from work – life conflict and decreased perception of control over work or non-work demands will be less productive. a leading expert on HR competency models. 1992. Boles. Nord et al..e. according to these theoretical points mentioned above we can say that SHRM plays a crucially important role for firms to deal with work-life balance. Howard & Donofrio. 2001). as well as the costs of not having departed employees working toward organisational goals’ are really expensive (Boles et al. Pleffer. 2002). ‘Ernst & Young estimated that the costs incurred for turnover in client service roles averaged 150% of a departing employee’s annual salary’ (Abbott. 1996). The role of strategic human resource management Basing on theoretical SHRM presented. 1998). telecommuting. De Cieri & Iverson. 1996.. But the question is that how SHRM can help companies to overcome these challenges and achieve their business objectives. In additional. 1996) which means higher labour turnover. talent and profits) in a fast changing business world . profitability and increased global competitions.
and refusing to tolerate poor performance or compromise their long-term objectives for short-term gains (Raymond. McNamara. General Electric. Firms attempting to compete on price will emphasize the need for significant cost reduction in any aspect of an organization’s functions (including HRM) (Takeuchi. in turn. Microsoft and Stockland maximize HR activities: focusing on selecting. Top firms such as BHP Billiton. In the intensely competitive global market. Foster’s.forces 60% of the executives to want the HR department to be interdependent with others departments to increase the company’s core competencies and competitive advantages (cf. Johnson & Johnson. Spreier. Coca-Cola. Macquarie. human resource planning and performance appraisal had a critical impact on employee productivity. have a responsibility to ensure that SHRM is totally fit in organizations’ strategies (Raymond. Ken. Guest (2002) found that job design. HR managers. 2003. Macquaire Bank. 2010). 2010. developing and rewarding top talent. employee participation and open communication. 2010). family-friendly practices and anti-harassment practices are with higher work and life satisfaction. As we mentioned before there is a variety of HR activities representing the core HRM. teamwork and collaboration. 2009). equal opportunities. 1999. 2003). encouraging open communication. We can conclude some major points relating to HR solution for business success in the globalization context that are (1) view SHRM as integral part of an organization’s strategy and intense implementing HR activities of SHRM (2) matching it with business strategy of an organization (3) the requirements and role of HR manager in insuring fit implementation of SHRM. companies which want to gain competitive advantages will mainly follow three major business strategies such as: (1) cost reduction to gain price advantage (2) differentiation that is tailoring a product or service to meet the unique needs of a particular market (3) quality-enhancing to maintain customers. Minimizing . Research of Chang and Chen (2002) pointed out that HR activities such as training and development.
‘Where are we now? Where we . In this case. the study of 194 Singaporean firms.. Taiwan and Korea firms found that companies with higher employee compensation will have higher employee commitment and higher financial success (Khatri.. 100 best companies to work for in the United States. 2009). performance appraisal. enhancing use of temporary labour. Robert et al. p. maximize efficiency by using narrowly-designed jobs. higher performance-based compensation and remuneration. overall HRM activities including recruitment and staffing. there are four main roles for the HR manager can be identified: (1) strategic partner (2) administrative expert (3) employee champion (4) change agent (Raymond. 2000.. Bae et al. Companies should focus on product quality regarding stability strategy in HRM. 1995. 1993.overhead demand forces companies pursue retrenchment strategy that may consist of a reduction in the number of employees and/or in wage levels.. For example. 2000. Fortune 1000 companies. Regarding the role of HR managers. 2009. Innovative business strategy must match growth strategy in HRM which tend to depend heavily on employee skills and commitment as key components in the value creation process through careful recruitment. These HR managers must ask. 2000). 1987). Huang. 1996. selection. Chow et al.836. 2010). 1999). Lawler et al. Jackson. A company can also combine strategies to made a particular strategy that is best fit for the organization to achieve easily business objectives but have to ensure to adopt a particular SHRM matching with organization’s strategy. etc (Mark et al. Sanz-Valle et al. close monitoring and a minimal level of training and development (Takeuchi. Ulrich (1997) said they ‘play a strategic partner role when they have the ability to translate business strategy into action’. and training and development should be standardized to a large extent so that employees can be developed with the skills necessary to produce high quality products or services satisfying customer demands (Schular..
see HR as creating value. 2010).). share in economic gains and so on)’ (Ulrich. A requirement of HR managers is becoming administrative experts that is able to: ‘reengineer HR activities through the use of technology. clarify goals. Way. increase commitment. 1997. a customer orientation and an awareness of the competition to be able to link business strategy to HR policies and practices’. 1997). . 1999. 2000. ‘There is evidence to indicate that there is a growing awareness of the need for HR managers to become actively involved at the strategic level and recognition that organizations that have a CEO who recognizes the significance of HRM have a competitive advantage’ (Raymond. Bartlett et al. 2010). (1994) also expressed ‘It <HR function> has to be transformed to deal creatively and pragmatically with emerging challenges. By accomplishing new roles and acquiring new competencies. The HR professional must represent to employee’s voice in management decision by ‘being fair and principled. 1997.want to be? How are we going to get there? What do we do when we get there?’ to contribute to business decisions (Raymond. 2010.. by assuring employees that their concerns are being heard and by helping employees to find new resources that enable them to perform their jobs successfully (for example... Yeung et al. Way. the HR function will become more critical and strategic than ever before’. simplify complex processes. rethinking and redesigning work processes. The HR manager needs to act as a catalyst for change within the organization by ‘leading change in the HR function and by developing problem-solving communication and influence skills’ (Raymond. HR managers must ‘develop business acumen. eliminate non-value-added work. 2000. become involved in decision making. learn how to set priorities. Barlett et al. Fisher et al. and measure HR results in terms of efficiency (cost) and effectiveness (quality)’ (Ulrich. Yeung et al. 1994). Therefore. 2002). These activities ‘will help employees to contribute more fully because they will have the competence to do a good job and the commitment to do right’ (Ulrich.
There is the fact that human capital is always the key element to advance business plan and organizations have to consider and adopt SHRM fitting with business strategy in order to obtain organizations’ business objectives such as growth business strategy should be combined with differentiation/innovation strategy in HRM. De Cieri. R. ‘Costing turnover: Implications of . Companies also can combine all these business strategy to attain their broad business targets and therefore... D. and Iverson. stability business strategy with quality-enhancing strategy in HRM. (1996). competitive advantages with assuring work-life balance to retain employees in the tense and brutally competitive market. retrenchment business strategy supported by cost reduction strategy in HRM. strategic human resource management today becomes more important to business success than ever before especially when companies have to deal with the challenges coming from profitability pressure.Each companies can make a particular list of core business skill needed for HR manager that can help them to perform SHRM flawlessly and therefore contributes efficiently to business success. J. SHRM with its important role also is adjusted flexibly to meet their goals that are gaining profitable. H. REFERENCES Abbott. Conclusion In conclusion. Three main factors that we have to notice for high performance companies and overcoming challenges are that (1) respecting and strong implementing HR activities following adopted SHRM (2) Matching SHRM with business strategy (3) focusing on selecting HR manager and promoting their role into organization performance. work-life conflict and increased global competition.
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