SHRM

and
Employee Relation
Table of Contents
Task – 1......................................................................................................................................3

Introduction................................................................................................................................3

Relationship between business strategy and HRM strategy......................................................4

Theoretical basis and models of SHRM.....................................................................................6

Performance management and reward system...........................................................................8

Conclusion and recommendations.............................................................................................9

Task – 2....................................................................................................................................10

Introduction..............................................................................................................................10

The nature and theoretical perspective of employment relations.............................................11

Roles of actors within the employment relationship................................................................13

Conclusion and recommendations...........................................................................................15

References................................................................................................................................16

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 Task – 1

Introduction
Strategic human resource management is based on the assumption that the company
strategies will be compatible with the human resource strategies of the companies. This
matching of strategies helps the companies to gain competitive advantages more effectively.
The relationship between strategic human resource management and human resource
management is discussed in the early stage of this report. The theoretical basis of the strategic
human resource management is also discussed in this report. Performance management and
reward systems and the influence of this system on the success of the companies are
explained in the last portion of this report.

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Relationship between business strategy and HRM strategy
Business strategy can be considered as the directions of the destination where a company
wants to go in long-term through its activities. A company generally selects the business
strategies which are compatible with the internal resources and competencies of it. However,
for implementing the formulated business strategies, a company divides its whole structure
into some functional units. These units help a company through providing guidelines of how
to achieve the overall objectives and goals. HRM is one of the functional units of a company.
Human resource department is responsible for gathering the key element of a company which
is employees. However, the study is focused on examining the relationship between business
strategy and human resource strategy. Most used business strategies are prospector, defender
and analyser.

Firstly, Chadwick, Super, and Kwon, (2015) explained that prospector strategy helps the
companies grow their business and deploy resources specially management and technical
personnel continuously. Human resource units support this strategy through identifying and
selecting skilled and efficient human resources and through developing them for becoming
compatible with the company. On the other hand, Farndale, and Paauwe, (2018) said that
prospector strategy enhance company performance and increase the possibility of gaining
company objectives through supporting for employing right person for the company.
Secondly, Chadwick, Super, and Kwon, (2015) argued that the defender strategy helps the
companies ensure a safe and secure market for reducing the intense of competition. The
strategy also supports the companies for growing market share with steady and moderate
growth. However, the human resource units also support this strategy in gathering skilled
employees, training them professionally and placing them based on their potentiality. Thirdly,
Su, Wright, and Ulrich, (2018) mentioned that analyser strategy helps the company gaining
competitive advantage not only in the early stage of product development but also when there
is necessity of efficient mass production. So, human resource units also play very crucial
roles in this strategy. Su, Wright, and Ulrich, (2018) also stated that the human resource units
are responsible for developing innovative products and for producing goods effectively and
efficiently for meeting excess demand in the market.

However, vertical alignment is also another good strategy where a company acquires either
its supplier or its distributor. On the other hand, in horizontal integration, a company acquire
other company either from its own industry or from other industry. Uysal, (2015) mentioned

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that the human resource strategy also helps the company for supporting the vast amount of
activities after acquiring others.

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Theoretical basis and models of SHRM
Strategic human resource management deals with the concept that the businesses will
perform better when their human resources are managed effectively and efficiently in such
ways that ensure right people in the right place with the right skills and competencies. In sum,
the strategic human resource management is concerned with the integration of overall
business strategies with human resource strategies of the businesses. However, there are three
main models or theories of strategic human resource management. The models are explained
as follows:

Universalistic approach: Bagga, and Srivastava, (2014) stated that universalistic approach
considers that the companies have a set of best HRM practices which will help the companies
gain good outcomes regardless of their internal conditions. Besides, Iqbal, (2019) mentioned
that universalistic approach follows the combination of best practices with HR issues
including recruiting skilled people and training and retaining them for a long-time for getting
their best outcomes. The approach deems that the combination of best practices with HR
issues is equal to all the organisations regardless their uniqueness and internal environment.
However, there are some criticisms about the universalistic approach of SHRM. Iqbal, (2019)
argued that the approach might hamper the creativity of the organisations and might hamper
the ability of the organisations to develop good strategies which might be perfect for those
organisations' culture and environment. Moreover, Uysal, (2015) added that the application
of the universalistic approach has not been found very effective in various countries.

Contingency approach: The best fit or contingency approach follows the opposite direction
of universalistic approach. Wright, and Ulrich, (2017) stated that contingency approach
indicates the organisations to align their human resources with the congruent business
strategies to increase the performance of the organisations. When the human resource
practices are not compatible with the business strategies and culture of the organisations, the
companies can’t derive the best outcomes from the human resources. Shields, et al., (2015)
added that the incompatibilities of the human resource management with business strategies
of the companies, they can’t increase their performance and become surrounded with the
confusion and ambiguity. Wright, and Ulrich, (2017) mentioned that the practice is very good
because it ensure the organisations for obtaining employees at a cheaper costs for operating
mass production so that their production cost become lowest.

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Resource-based view: Resource-based view approach is very helpful for understanding the
internal resources of the organisations. Su, Wright, and Ulrich, (2018) stated that the
resource-based view of SHRM helps the organisations to identify the situations when human
resources become scarce, valuable and organisation-specific. Besides, Uysal, (2015) argued
that to apply the concept of value, rareness, sustainability and rareness, the HR practices are
not perfect for gaining sustainable advantage. Rather, human resources especially highly
skilled and highly trained employees have the potentials to be a source of competitive
advantage. High level of expertise and motivation among employees can lead to exhibit
productive outputs. In contrast, Wright, and Ulrich, (2017) mentioned that resource-based
view approach requires that HR practices should be outstanding for extracting best talents for
the companies for getting sustainable competitive advantage. However, company’s may
gather highly skilled and trained employees but the mismanagement of the employees or poor
design of work may not help them to extract the best outcomes from those human resources.
So, the companies should have good HR practices with valuable and rare human resources.

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Performance management and reward system
Performance management is the system of appraising and evaluating the work of employees.
Performance management system is very helpful for understanding the real level of
performance of employees after the recruitment process. Ibrar, and Khan, (2015) mentioned
that the whole responsibility of managing the performance of employees lies with HR
department. So, the managers should develop good methods for accurately evaluating the
performance of employees. However, Bartram, et al., (2015) stated that a performance
management system that has too many objectives can be ineffective due to lack of focus.
Rather, the organisations should develop the performance management system that is
organisation-specific and is compatible with the organisational culture and environment.
Performance management system has some process including performance planning, ongoing
feedback, employee input, performance evaluation and performance review.

Performance planning involves reviewing the behaviours of employees and expected results
of the employees. The behaviours of employees will reflect how they can achieve the
expected results. Shields, et al., (2015) argued that the system may fail to evaluate an
employee who is highly skilled, helpful and considerate but could not achieve the expected
results. So, the companies should review the behaviours and expected results of the
employees prior to the inception of performance management process. Bartram, et al., (2015)
mentioned that the managers should provide ongoing feedback for any inefficient
performance to the employees. The day-to-day feedback helps the employees become aware
of the mistakes in coming periods. Employee input includes asking employees to give self-
ratings on their performance. Uysal, (2015) stated that the managers then compare the
employees' ratings with their ratings. This is very easy for a manager to compare and provide
feedback to the employees. On the other hand, Ibrar, and Khan, (2015) claimed that this
approach can lead to disagreement between employees and managers. So, the managers can
ask the employees to provide the information of their key performance rather than rating
themselves. The managers can then analyse their performance and rate them according to
their performance. This is the performance evaluation stage of performance management
system. Finally, the managers can review the performance of their employees so that they can
reward the best performers for motivating them.

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Conclusion and recommendations
Strategic human resource management is very effective for combining the company strategies
with the human resource strategies of an organisation. As human resources are the key
drivers of an organisation, so their performance should be congruent with the objectives of
the organisation. Performance management system is another important factor which
motivates the employees for performing in a better way. However, around 40 percent of
employees claimed that their managers are not interested to evaluate their performance
effectively. So, the managers should be aware of the importance of appraising the
performance of employees.

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 Task – 2

Introduction
Employee relation plays very important role in the success of an organisation because the
retention and motivation of the employees depend on the good relation with the employees.
However, various perspectives impact the employee relation differently. Unitary perspective
insists the employees and top management to work together as a team whereas pluralist
perspective insists the employees to work separately based on their abilities. However, the
roles of the actors which affect the employee relation are explained in this report. The
changing nature of the employee relation is also explained in this report. Finally, some
recommendations are provided to ensure good employment relationship in various
organisations.

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The nature and theoretical perspective of employment relations
Employee relation is very important element of human resource management. Employee
relation determines the possibility of whether a company can gain business objectives or not
in future. For this reason, every company wants to maintain good relationship with their
employees so that they can motivate the employees and utilise their potentials. Tansel, and
Gazîoğlu, (2014) mentioned that the relationship between employees and managers helps the
organisation gain sustainable competitive advantage. Good employee relation increases
satisfaction of employees and motivates the employees for working effectively. However,
there are three main perspectives of employee relation including unitary, pluralist and radical
perspective. These perspectives are explained in the following paragraphs.

Unitary perspective: The unitary perspective considers employee relation as a combined

team for achieving common objectives of a company. Kabak, et al., (2014) stated that the
unitary perspective considers an organisation as a combined unit where all employees work
together with the help of their managers for helping the organisation to achieve objectives.
The unitarists think that third-parties are not needed for achieving the success of an
organisation. Xi, Zhao, and Xu, (2017) mentioned that the perspective thinks conflict as the
disruptive and a mistake of poor management. The perspective says that conflict between
employees or managers and employees can distract the organisation from its objectives.
Unitarists wants a peaceful and friendly workplace where all the employees and managers
will be committed and loyal. So, they consider conflict as a threat which should be
eliminated. Tansel, and Gazîoğlu, (2014) stated that the unitary concept insists the employees
and managers to focus on resolving conflict and continue working procedures for attaining
common goals and objectives.

Pluralist perspective: The pluralist perspective considers an organisation as a combination

of individuals and groups who have diverse values and objectives. Crisóstomo, and Freire,
(2015) said that employees in an organisation has distinct roles both separately and together.
The main areas of difference are leadership, authority and loyalty. Pluralist perspective
supports third-parties and so the presence of trade unions is seen in this perspective. Odhong,
and Omolo, (2014) stated that conflict has great impact on this perspective. Conflicts between
employees and managers for various things are manifested in this perspective. The pluralist
perspective insists that the organisations have various groups and subgroups which have their
own goals and objectives. Moreover, the company-specific conflicts help the managers make

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their bonding stronger. The managers can identify the mismatch between their decision and
the interest of employees and then can resolve the issues with effective decisions. This
system is very helpful for the companies.

Radical perspective: Radical or Marxist perspective view unions as the weapons of social
revolution. Xi, Zhao, and Xu, (2017) stated that radical perspective believes that conflicts
between employees and employers will continue to occur due to disparities. The perspective
thinks that the employees will opposed to cooperate and there will remain conflict between
managers and employees. This perspective perceives inequality of power and financial
conditions as fundamental characteristics of capitalist system. Tansel, and Gazîoğlu, (2014)
mentioned that the disparity of basic needs encourages unions to talk on behalf of general
employees. Unions keep the rights of asking for the interest of employees to the top
management. They want to maintain good relation with employers when the employers value
their rights and interests. However, the common interest of the workers is to make friendly
workplace where they have influence on decision-making process.

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Roles of actors within the employment relationship
Employment relationship is one of the key motivators for the employees. Crisóstomo, and
Freire, (2015) good employment relation resolves all the problems of the employees and
indirectly force the employees to become concentrated to their works. However, there are
some factors which affect the employee relation. Those factors are explained in the following
paragraphs.

Collective bargaining: Collective bargaining is a process where one party discuss and
negotiate with other party for their rights. This bargaining is very important for gaining ones
rights properly. Odhong, and Omolo, (2014) mentioned that collective bargaining in the
context of organisations is a process where employees demand for their rights and interests.
Realising the importance of collective bargaining, business personalities employ this process
to their organisation. However, the collective bargaining has vital role in the good
employment relationship of an organisation. When the organisations ensure effective
bargaining process about their salaries, promotion and work policies, the employees feel
satisfied and work effectively.

Remuneration: Remuneration is another important factor which also impacts the employee
relation. Chandani, et al., (2016) stated that every employee expect handsome remuneration
based on their work standards. Besides, the employees also expect their remuneration to be
increased according to their experience. Tansel, and Gazîoğlu, (2014) said that when the
employees feel that they are not compensated based on their experience and expertise; they
become dissatisfied and leave the company.

Recruitment: Recruitment process also impacts the employee relation. Recruitment is the
system of finding and selecting skilled and talented employees. Odhong, and Omolo, (2014)
said that there are two types of recruitment including internal and external recruitment. The
companies follow recommendation of employees and experience and expertise of employees
to recruit employees internally. However, the external recruitment includes recruiting
employees from outside through various screening process. When the company use internal
process for recruiting employees, the employees become satisfied.

Communication: Good communication with employees also impacts the employee relation.
When the companies allow the employees to communicate with superiors for their problems
and demands, the employees become motivated and encouraged. In contrast, when the

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employers don’t listen to any problems or recommendations of employees, the employees
become discouraged and decide to leave the company. Chandani, et al., (2016) mentioned
that when the companies value the opinions of the employees while making various
decisions, the employees feel themselves as one of the part of the company. So, the good
communication strengthens the relationship of employees.

Working conditions: Working conditions are one of the non-financial motivators. Working
conditions include training, employability, environment, health and safety of the employees.
The employees enjoy working with the companies which offer good working conditions to
the employees. Good employers always ensure high quality working conditions for their
employees so that the employees become motivated and feel relaxed while working with the
companies (Xi, Zhao, and Xu, 2017). For this reason, good working conditions impact the
relationship of employees. However, the work hours also impact the employees. When the
employees get suitable work hours, they become loyal to the company.

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Conclusion and recommendations
The reason behind the success of most of the companies in the world is good relation with
their employees. The successful companies always value their employees first so that their
employees feel motivated and think the company as their own company. So, the priority of
the employees is the main source of success. So, every company should ensure the priority of
their employees in various cases. For this reason, some recommendations are provided for
ensuring employee participation and employee voice. First, the companies should allow the
employees to participate in decision-making process of the company. The employees will be
motivated when their opinions will be taken as very important. Second, the companies should
allow the employees to recommend their relatives for recruiting. The employees will be
happy when their recommendations will be considered seriously. Thirteen, the companies
should allow the employees to uphold their problems and anxiety. When the companies will
resolve their all problems, the employees will feel happy and will think they are valuable for
the company. These thoughts will lead to increased performance. Fourth, the companies
should ensure competitive compensation for their employees. In this case, they can reward
the employees based on their performance. This process will increase the motivation of the
employees because the main reason of working of the employees is earning money. Finally,
the companies should ensure friendly working conditions for their employees so that
employees feel relaxed and motivated for working with enjoyment. These processes will
strengthen the relationship of employees.

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