- Define and clarify the role of each of the components using your own words.
External environment entails the factors outside any organization that complement a successful human resource strategy towards the mission and goals. It involves the factors that influence human resource activities that are necessary for maximizing recruitment and retention. These factors include: competition, government regulation, technology, market trends and economics. The internal factors are those components that should be considered in order to minimize employee issues and facilitate the achievement of organizational goals. The internal factors include: culture, structure, politics, employee skills past strategies just to mention but a few. These factors are considered by the human resource management in order to ensure that the employees receive appropriate training and development and serve the company to the best of their ability (Price, 2011).
Corporate strategy refers to the steps taken by the human resource management to set and implement the strategic direction of the organization that requires development and assessment of the organization’s human capital. It also requires the creation of the organizational capabilities required to support the strategic direction as well as giving particular perspectives that help understand the business strategy. Employee separation on the other hand refers to the process where employees parts ways with their employers due to various reasons such as: resignation, contract termination and when the employee decides to leave the company without handing in their resignation letters (McKinlay and Starkey, 2010). The laws regulating employment are those rules and regulations given by the organization that describe the relationship between employees, employers, trade unions and the government. This law elaborates on the employment arrangements as well defines the rights of the employees. Business unit strategy refers to the guiding principles and objectives that are set by the management to be followed by certain division of the company. It is a policy used by big companies to achieve different objectives that align with the organizational goals(Price, 2011).
Human resource strategy refers to the activities carried out by human resources in line with managers to solve problems related to the organization. It helps to assess the situations in the company and develop clear solutions for the company. Staffing is the process of acquiring, deploying and retaining employees who are capable and efficient in the production of quality services to the company (McKinlay and Starkey, 2010). It helps in recruiting and attracting talent within the organization as the workers will deliver their level best towards achieving the goals. Training involves teaching and sensitizing the employees on the company’s objectives and goals in order to enlighten them on the way to go. Training is important as it allows employees and employers to work on the same objective without collision. Performance management is the process of ensuring that the employees work efficiently and effectively to realize the organizational goals (Price, 2011).
Human resource information systems refer to software or rather database used by the human resource department to carry out services such as accounting, management and preparing payrolls. It also keeps records of all the employees within the organization. Compensation is another role of the human resource department that describes an insurance policy that provides wage replacement or provides medical benefits to employees who encounter accidents in the line of duty. Labor relations refer to the terms and conditions given by the human resources during the recruitment process. They define the roles and duties that the employees are supposed to carry out in the organization. They also help employees in association with trade unions for their rights (Price, 2011).
- Comprehensive definition of strategic Human Resource Management based on the exhibit.
The exhibit portrays the components that should be analyzed in defining the strategic human resource management. The environment consists of internal and external components that help create a better strategy. The external environment comprises of an analysis of the competition factor, the government regulation policies, the mode of technology used in the company, the market trends that may affect the company as well the economy. The internal environment examines the internal management systems that should be considered. These include: culture, the structure of the organization the politics that drive the organization, the skill set of the employees within the organization as well as strategies used in the past. This will help in developing a clear strategic human resource management system. The next issue is analyzing the strategy applied by the human resource management during the recruitment of employees as well as assessing the ones present (McKinlay and Starkey, 2010).
The business unit strategy defines the agendas to be followed after the corporate strategy has been defined. After defining these components the human resource management will consider factors such as employee separation that follow after employees have been hired. The laws regulating employment will be made clear to all the employees as well as subordinates. Staffing will follow up and define roles of the employees after which they will be trained in order to carry out their activities efficiently and effectively. The human resource will manage the performance of the employees and reward those are better (McKinlay and Starkey, 2010). The compensation terms will also be considered in order to have an understanding and avoid being sued by the employees. Soon after the labor relations will be communicated to the employees in order to alert them on the trade unions which are better to join as well give the benefits to the employees. All the employee information is then recorded in the human resources information systems.
Diagram: Strategic Human Resource Management
- Explain how the external and internal factors interact to formulate the business unit strategy.
The internal and external factors provide a basic layout of information which is relevant to the formation of the business unit strategy. The internal factors provide information on the internal environment in terms of strengths and weaknesses. The external factors on the other hand provide information on opportunities that can arise when changes are made in the external environment. This information may be relevant and valuable for making decisions within the organization as per the business unit strategy. The organization will use this information to make decisions and allocate different department distinct roles that will enable it to meet the mission and goals (McKinlay and Starkey, 2010).
- Explain the link between organizational strategy and human strategy based on the exhibit.
The human resource strategy outlines the different functions that should be carried out by the employees. It also gives the design of the job and work systems that clearly state what the workers are supposed to do or what is needed of them. It also explains the interface between jobs and how they are interrelated. This helps in defining the roles of the employees. The organizational strategy describes the objectives and goals of an organization that help in achieving the requirements of the company. The link between the two is that they all work towards achieving the objectives and goals of the organization. The human resource strategy helps the workers or employees realize the expectations and they will work towards achieving the roles given to them. This will develop the organizational strategy (Price, 2011).
- What are the main limitations of this model?
The model simplifies major environmental factors into categories in order reduce the situations into factors that are more manageable. The model also classifies the internal and external factors that do not necessarily refer to the situation.
McKinlay, Alan; Starkey, Ken. (2010). Strategy and human resource management. International Journal of Human Resource Management, 3 (3), 435-450.
Price, A. (2011). Human resource management in a business context. Andover: Cengage Learning EMEA.