Organisational Strategy And Human Resources

Overview

Organisational strategy drives long-term success, but its impact depends on people. HR plays a pivotal role through recruitment, quality improvement, performance management, and training, thus ensuring alignment with strategic goals. By linking HR interventions to financial, customer, process, and learning outcomes, businesses enhance productivity, adaptability, and profitability while embedding sustainable organisational growth.

Introduction

An organisational 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 Organisational Strategy

1. What re-configurations, reach extensions, and strategic relationships will be necessary to deliver the intended organisational 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 organisational strategy.

The Human Factor

Most successful organisations consider the human resource factor to be very important in implementing their strategies. 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 Organisational Strategy

1. Recruitment and selection

An important function of HR is the ability to attract and select human resources with the proper knowledge, skills, and attitude. If HR is successful in this work, it will significantly support the organisation’s strategy. Productivity, quality, and service are the most critical issues in any organisation, and any positive contribution of HR in these areas will be of paramount importance.

The organisation 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 be evident in planning, processes, supervision, techniques, and other areas, resulting in increased productivity.  This, in turn, will directly affect the organisation’s profitability. In such cases, HR is adding value to the organisation.

Similarly, HR, through proper hiring, may add value to the organisation 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 organisational strategy

Quality improvement has a positive impact on a wide range of other areas. You will find that quality improvement leads to reduced production or service costs, which in turn provides customer satisfaction and results in customer retention. An increase in sales follows, thereby improving the market reputation and reducing marketing expenses, which in turn contributes to improved profitability. The data will show that the human resource intervention has had a direct influence on 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 have a direct and positive impact on employee motivation, clearly articulate the organisation’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 top employees. HR can add value by properly formulating and implementing these important functions, thus supporting organisational strategy.

4. Training and development

In any organisation, continuous learning involves growth through various learning events and experiences for individual employees, teams, and the organisation 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 are part of the learning process. A system that fosters an environment conducive to learning through experience, coaching, mentoring, self-learning, and training and development is essential in a learning organisation. HR is the main organiser, director, and controller of learning.  Learning must be applied to processes to bring about improvements. Once again, HR has successfully added value to the organisation.

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 encompasses all areas of an organisation, and organisational strategy must be aligned with the possibilities inherent in the available human capital. To capitalise on this leverage, organisations need to adopt a new perspective on HR.

HR systems must align with the organisational strategy. When HR is strategic and involved in, or linked to, an organisation’s performance, it plays a crucial role in the organisation’s success.

Alignment Between HR Activities And Organisational Strategy

HR must expand beyond the administrative function.  It must focus more on supporting the organisation in strategic planning and implementation. For that purpose, measuring itself from a business perspective and by the value it brings to an organisation 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.

Organisational Development And Human Resources Matrix

This matrix directly links HR strategies to organisational goals, integrating financial performance, customer satisfaction, internal processes, learning and growth, and overall organisational 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.