An organizational strategy is a creation, implementation, and evaluation of decisions within an organization that enables it to achieve its long-term and short- term objectives.
Key strategic considerations of organization strategy
(1) What re-configurations, reach extensions and strategic relationships will be necessary to deliver the intended strategy.
(2) What new skills and capabilities will be needed and what changes in the procedures relating thereto.
(3) What performances will be required and how these can be achieved.
(4) What changes (if any), are required in the corporate culture to meet the new requirements.
(5) How to integrate operational activities to align them with the new strategic objectives and plans.
Once the strategy is formulated the most important phase of implementation has to be undertaken.
Most of the organizations successful in strategy implementation consider the human resource factor as very important in making strategies happen because, according to them, consideration of human resources requires that management thinks about the organization’s communication needs. That they articulate the strategies so that those charged with developing the corresponding action steps fully understand the strategy they’re to implement. In addition, human resource function understands the effects each new strategy will have on their human resource needs.
HR Activities That Support Organizational Strategy
Recruitment And Selection
The ability to attract and select human resource having the right knowledge, skills, and attitude is an important function of HR. If it is successful in this work, it will be providing support to organization strategy in a big way. Productivity, quality, and service are the most critical issues in any organization and any positive contribution of HR in these areas will be of paramount importance.
Starting with productivity, induction of employees in the production area who are a complete fit with the jobs requirement will result in visible improvements in planning, processes, supervision, techniques etc. leading to improvement in productivity, which in turn directly affect the organization profitability. HR in such cases is adding value to the organization.
Similarly, HR through right hiring may add value to the organization in service also. Here if customer satisfaction shows an upward trend and cost of service delivery and rate of errors show a downward trend due to initiatives of recently inducted employees, then again HR is credited with adding value.
Quality is one of the most critical issues for any organization. Improvement in quality positively affects a host of other areas. Just like the loops of a chain, they are connected with one another. Improvement in quality leads to a reduction in production or service cost and, providing customer delight resulting in customer retention. Increase in sales follows thus improving market reputation leading to reduction in marketing expenses which contributes towards improved profitability
It is, however, important to remember that to qualify as a value adding activity, improvements must be shown to have happened in consequence of the activity started by human resource function. In this context, the most important thing is the availability of the correct data and the right interpretation. In every case right measuring tools have to be found and the reasons for improvements are to be correctly determined.
Performance Appraisal And Compensation
Performance Appraisal and Compensation are the most critical areas of HRM. Formulating a system which is fully aligned with organizational strategy, and implementing the same in an objective and transparent manner not only make the system acceptable but also positively affects the employee’s motivation. The system not only enunciates organization’s expectations regarding employee’s performance but also helps in employee training and development. Similarly, laying down a sound and fair compensation policy goes a long way in attracting, maintaining, developing and retaining good employees. HR can add, value by proper formulation and implementation of these important functions and thus support organization strategy.
Training And Development
A learning organization is fast becoming a reality. In any organization, continuous learning means growth through learning events and experiences for individual employees as well as teams, and the organization as a whole. HR plays an important role in developing a culture of continuous learning. Identifying, training and development needs and arranging, training and development programs for employees is part of the whole learning process. A system which creates an environment conducive to learning through experience, coaching, mentoring, self-learning as well as through training and development is a must in the learning organization. HR which is the main organizer, director and controller of learning must ensure that actual learning is followed by its application for bringing about improvements in different areas of operations. If that happens, the learning objective is achieved and HR is successful in adding value to the organization.
The Role of HR Function In The Overall Success Of The Business
Human capital leverages all the areas of an organization. Therefore, the HR department needs to ensure the human asset is effectively aligned with the strategy determined by the organization. To capitalize on the leverage, organizations need to adopt a new perspective of HR.
The HR systems should be created / adopted in alignment with the organization’s strategy. HR must ensure that employees are strategically focused. Every element of HR function, from hiring, compensation, training etc. needs to be developed in order to enlarge the human capital in the organization. When HR is strategic and involved with and / or linked to organizational performance, it plays an important role in the success of an organization. In essence, an organization’s competitive advantage is more easily achieved when HR is effectively lined with its strategy.
Alignment between HR activities and strategic planning can be formed by HR. HR must expand beyond administrative function and focus more on how it can support the organization in strategic planning and implementation. By increasing the competencies of HR personnel, the department will increase its credibility and be integrated into a strategic role. For that purpose, measuring itself from a business perspective and by the value, it brings to an organization is the key to its elevation to the role of a strategic business partner. Once there is a clear understanding of how HR affects the bottom line from a business / and or strategic point of view, the role of the HR function in the overall success of the organization will become crystal clear.