Organizational Strategy And Human Resources

How do you set organizational strategy?

An organizational strategy is the creation, implementation, and evaluation of decisions that enable an organisation to achieve its long-term and short-term objectives.

Vital strategic considerations of organization strategy

1. What re-configurations, reach extensions, and strategic relationships will be necessary to deliver the intended organizational strategy?
2. How will procedures change relating to any new skills and capabilities required?
3. What will the new level of performance be?
4. What changes to corporate culture will be needed?
5. How will operational activities be integrated?

The most critical phase of implementation is the formulation of the organizational strategy.

The human factor

Most successful organizations consider the human resource factor very important in making strategies happen. Human resource consideration requires management to think about communication needs. In addition, the human resource function understands the effects each new strategy will have on their people’s needs.

HR activities that support organizational strategy

1. Recruitment and selection

An important function of HR is the ability to attract and select human resources with the right knowledge, skills, and attitude. If HR is successful in this work, it will significantly support the organization’s strategy. 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.

The organization should recruit and induct employees who are a good fit for the jobs.  If so, this will result in a visible improvement in productivity.  Improvements will show in planning, processes, supervision, techniques, etc., leading to improvement in productivity.  This, in turn, will directly affect the organization’s profitability. HR, in such cases, is adding value to the organization.

Similarly, HR, through the right hiring, may add value to the organization if customer satisfaction shows an upward trend. HR adds value when costs and errors show a downward trend.

2. Quality is one of the most critical issues for any organizational strategy

Quality improvement positively affects a host of other areas. You will find quality improvement leads to reduced production or service costs and provides customer satisfaction, resulting in customer retention. An increase in sales follows, thus improving market reputation and reducing marketing expenses, which contributes to improved profitability. Data will show that the human resource intervention will have directly influenced any improvements.

3. Performance appraisal and compensation

Performance Appraisal and Compensation are the most critical areas of HRM. Any system must be fully aligned with organisational strategy. The system will directly positively impact employee motivation, articulate the organization’s expectations regarding employee performance, and support training and development.

Similarly, a sound and fair compensation policy goes a long way in attracting, maintaining, developing, and retaining good employees. HR can add value by properly formulating and implementing these important functions and thus support organization strategy.

4. Training and development

In any organization, continuous learning means growth through learning events and experiences for individual employees, teams, and the organization as a whole. HR plays a vital role in developing a culture of continuous learning. Identifying training and development needs and arranging employee training and development programs is part of the learning process. A system that creates an environment conducive to learning through experience, coaching, mentoring, self-learning, and training and development is necessary in the learning organization. HR is the main organizer, director, and controller of learning.  Learning must be applied to processes to bring about improvements. Once again, HR is successful in adding value to the organization.

HR can add value by properly formulating and implementing these critical functions, thus supporting organisational strategy. Having the right tools to manage all aspects of employee compensation is vital, and Benepass offers a guide that compares the best benefits administration software.

The Role of HR Function In The Overall Success Of The Business

Human capital leverages all areas of an organization, and organizational strategy must be aligned with the possibilities inherent in available human capital. To capitalize on this leverage, organizations need to adopt a new perspective of HR.

HR systems must align with the organizational strategy. When HR is strategic and involved with and/or linked to organizational performance, it plays an important role in an organization’s success.

Alignment between HR activities and organizational strategy

HR must expand beyond the administrative function.  It must focus more on supporting the organization in strategic planning and implementation. For that purpose, measuring itself from a business perspective and by the value it brings to an organization is the key to elevating 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 organisation’s overall success will become crystal clear.

Organizational Development And Human Resources Matrix

This matrix links HR strategies directly to organizational goals, integrating financial performance, customer satisfaction, internal processes, learning and growth, and organizational effectiveness. The scoring provides a clear picture of strategic alignment, highlighting areas where additional HR interventions can create measurable improvements in productivity, cost savings, and long-term strategic success.

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Tasneem Hameed

Human Resource Professional with three decades of experience, having worked in multinational companies of repute with distinction in senior positions. A certified ezinearticles.com expert author, poet, freelance consultant and owner of three blogs. An internationalist and a peace activist. A strong believer in a NEW EQUAL WORLD based on the principles of equality, equity and empathy.

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