The Financial Importance of Human Resources Department

The ‘‘best fit’’ approach promotes the concept that strategic HR should be inextricably linked to the formulation and implementation of strategic corporate and business objectives (Wilton, 2011). This means that the HR strategy is concerned with matching the employee’s role behaviour with the company‘s mission, values and goals. Wilton (2011) explains this by giving an example whereby if a company‘s business strategy is based on delivering a high quality service, then the HR strategies and policies need to focus on the quality of its employees. This would be achieved by rewarding attitudes and behaviour that match this approach. Boxall and Purcell (2008) support this idea by highlighting that companies may fail if they do not adapt to their environment. The best fit approach therefore aims to improve organisational performance by integrating all activities in such a

Indicative Content: Understand key contemporary business issues affecting the HR function within private, public and third sector organisations. Types of organisation; the role of management within them; ways in which HR is delivered; the main functional areas of management; the search for sustained organisational performance, business

LO3: Understand the role of HR in the managing of contemporary business issues and external contents.

The current function of HR can be defined as supporting “the delivery of the organisation’s strategy and objectives through the effective management of people and performance” (Taylor & Woodhams, 2012; 22). This definition is furthered by a CIPD survey (2007; 2-3), which indicated that the key functions of HR are: recruiting and retaining staff, progressing performance management to maximise the value of employees and increasing employee engagement.

Human resources management was defined as ‘a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations’ by Boxall and Purcell (2003). Noon, 1992 (as cited in Armstrong, 2014 a, p6) drew ‘doubts of whether HRM was a map, a model or a theory. But it is evident that the original concept could be seen as a philosophy’. The human

Wright and McMahan (1994) define strategic HRM as “the pattern of planned Human Resource deployments and activities intended to enable the organisation to achieve its goals.” A HR function should impact the success of an organisation; a policy must remain current and suitable to both the internal and external environment. Ulrich and Lake (1990) affirm, ‘HRM systems can be the source of organisational capabilities that allow organisations to learn and capitalise on new opportunities.’

The CIPD is the professional body for those working within a HR related role, to “manage the employer-employee relationship and align an organisation’s culture with its people” (CIPD). Researched through collaboration with business leaders the CIPD has developed a map of the activities, knowledge and behaviours required by the different HR roles to meet current business needs (diagram 1). The map consists of ten Professional areas, four Bands and eight Behaviours. Each area has an extended definition to clarify the key requirements of people who work in that area.

The economic environment in nowadays dynamic, it is fairly important for organisations and managers to recognise the curtail of Human Resource Management. It is clear that Human Resource Management (HRM) has become one of the most recommend management strategy in the modern business (Leopold and Harris, 2009). Human Resource Management is a technique process of managing people in the workplace to enable and enhance organization performance (Leopold and Harris, 2009). This theory involved the responsible to attracting, selecting, training and managing people which make employees become more valuable to the organisations. It invests effect in learning and development at work. Also to communicate with all employees at each level to reward successful employee relations (Wilton, 2011). Human Resource Management plays a very important role in the operation strategy and management concerns in work organisations of all kinds (Leopold and Harris, 2009). In aim to justify this statement by evaluate the benefit and importance of Human Resource Management in contemporary work organisations. This essay will focus on analysis the advantages of use Human Resource Management in business also underline by explain more detail about the different HRM strategy brings benefits and give competitive advantages impact to the organisation success. Then summarise by a general conclusion on the importance of HRM in contemporary work organisations.

In the past it was noted by Snell, Youngy and Wright (1996:62) that organisations would purposely 'take human resource out of the strategic equation'. Today it is widely accepted that linking HR to strategy because of a shift in ideas concerning competition and firm advantage (Snell, Shauder and Wright (2001:3)). This shift was identified by Quin (1992:241) "with rare exceptions, the economic and producing power of the firm lies more in its intellectual and service capabilities than in its hard assets"

Strategic HR responsibilities surpass transactional duties. These responsibilities have to do with an ongoing support of the organizational long-term goals. This is where “strategy meets the market place” so that when “the economy moves from recession to recovery” the company is prepared to move with it (Cascio, 2005). The Strategic HR process looks ahead using organizational strategy as the guideline to building organizational readiness.

Whether an organization consists of five or 25,000 employees, human resources management is vital to the success of the organization. HR is important to all managers because it provides managers with the resources – the employees – necessary to produce the work for the managers and the organization. Beyond this role, HR is capable of becoming a strong strategic partner when it comes to “establishing the overall direction and objectives of key areas of human resource management in order to ensure that they not only are consistent with but also support the achievement of business goals.” (Massey, 1994, p. 27)

More firms’ business strategy can be better realized using the integrative model of HRM. Both employees and firms’ aspirations can be met if the right strategy is used. . HR professionals must be well trained to implement this strategy.

Short-run responses and long-term strategies were finely defined by Storey (1992) and Guest (1987), making the key distinction where the emphasis is being placed on either ‘human’ or the ‘resource’. These widely adopted models of HRM are concerned with strategic issues

For nearly two decades, calls have been made for Human Resources (HR) to transform into strategic partner. Scholars and practitioners, alike, have embraced this idea, yet this field of study seems to be at a bit of a crossroads. The business community no longer needs to be convinced why strategic human resources management (SHRM) is important, instead many are grappling with how is SHRM implemented and measured (Becker & Huselid, 2006). While the literature has been rich in providing arguments to support of SHRM, there is little empirical evidence of what it takes to be a strategic partner and whether HR offices are actually making the changes needed to take on this role (Lawler & Mohrmann, 2003).

Aim: This research will help us understand the role played by Strategic Human Resources Management in Organizational success, what role a HR manager plays in improving organizational efficiency and how it differs from traditional Human Resources Management.