Organizational Strategy and Hrm Effectiveness

Executive Summary

There is broad agreement that a strategic approach to human resource management (HRM) involves designing and implementing a set of internally consistent policies and practices that ensure a firm's human capital (employees' collective knowledge, skills, and abilities) (Baird 1988, Jackson 1995 & Schuler 1987). Fundamental to the strategic HRM perspective is an assumption that firm performance is influenced by the set of HRM practices firms have in place. Recent empirical evidence supports this basic assumption (Arthur, 1994; Cutcher – Gershenfeld, 1991; Huselid, 1995; Huselid & Becker, 1996; MacDuffie, 1995)

In this paper, the author will discuss about some strategies that company used in generic sense and how human resource management can support these strategies and ways to measure the effectiveness of human resource management.

2.0 Detailed Description

2.1 Strategic Human Resource Management

A number of forces have converged to support the idea that HR management should be a major strategic focus in most organizations. Many recent articles, books and studies have argued that HR management can be an important source of competitive advantage if it becomes more strategic (Lawler, 1995; Ulrich, 1997; Brockbank, 1999; Lawler & Mohrman, 2003). The reason for this is clear: corporations are undergoing dramatic changes that have significant implications for how critical human resources are to their performance. Perhaps the most important of these changes is the rapid deployment of information technology and the increasing amount of knowledge work that organizations do. Also important is the rapidly changing business environment and the increasing complexity of modern organizations. These and other changes have created a growing consensus that effective human capital management is critical to an organization's success (Jackson, Hitt, & DeNisi, 2003).

Therefore, human resource management plays a vital role in supporting organizational strategies. We will now look into how HR management contributes to the success of an organization which emphasize on innovation, cost, quality and speed.

2.2 Innovation Strategy

Innovation required in the workforces highly skilled workers, workers who like to learn, who are creative and willing to experiment. This is due to the focus of the company who would like to create products through innovation which is distinctly different from the competitors eg. for such company is Amazon.com. The workers required is also those who are willing to take risk, those who are creative, like to experiment and high interest in learning. This group of workers are self – starter, and hence, an environment who does not control them tightly are required, the company must give them room for their own discretion and