How Business Strategy and Hr Strategy Are or Should Be Linked Together

Institute of Tourism and Hotel Management Anna Morozova Essay How problem strategy and HR strategy ar or should be linked together? Moscow, 2011 Departments be the entities organizations form to organize community, reporting relationships, and work in a way that best supports the accomplishment of the organizations goals. Departments ar usually organized by functions such as human resources, marketing, administ ration, and sales. The for struggled thinking human resource department is devoted to providing effective policies, procedures, and muckle-friendlyguidelines and support deep down companies.Additionally, the human resource function serves to take a crap sure that the company mission,vision,valuesorguiding principles, the company rhythmic pattern, and the factors that keep the company guided toward success are optimized. Of executives surveyed, 20% currently use the HR department as active and innovative blood solution colleagues. 20% consider that the HR department s hould cover as administrative overhead and only perform transactional work. But, 60% of theexecutives are starting to expect the HR department to partner with others departments to break the companys core competencies and competitive advantages.Competitive pressure in a fast changing business world pressures for sales, talent, and profits. Most CEOs are held accountable for deuce-ace general but powerful results Increasing revenue, generating cash, and reducing costs. In order to focus on these three accountabilities, executives are discarding paradigms that no longer work as companies seek to stay in and grow their business. Many CEOs and CFOs are more interested in the payoff and are asking appropriate questions Whats in it for the company? Where is the improvement in the revenue stream? How does this get us new customers and retain our current customers.Where is the proof of corporate performance enhancement metrics? Once they get solid answers to these questions from compete nt HR leaders, the CEOs are quick to change their thinking. To answer the payoff questions, recognize that a continual company-wide value strand analysis is critical to the success of any organization. Over the past decade, CEOs began demanding that their humans Resources departments deliver flawless functional work and become a k nowadaysledgeable partner with all other disciplines to advance the business plan of the company. Individual professional silos are breaking down.Disciplines such as finance, sales, marketing, operations, and HR no longer make it as stand-alone entities. They are inter-dependent with one another. Weakness of any one of the links inhibits other links from maximizing their efficiency and productivity. These three emerging concepts in the practice of HR bear examination * What value does the HR department brings to the organization. Many HR aggroups lack a vision that includes their value to the organization. Do the HR departments activities directly enc ourage the company achieve its broad business objectives?Are the HR team ups arguments for or against a business strategy credible to the other department heads at the decision making table? How are the HR department strategies that upbeat the employees, the shareholders, the customers, and all other stakeholders in the organization, selected and implemented? * What value does the HR department generate for the customer the end user of the companys product or serve salutary? Sales and tincture are no longer restricted to the sales and musical note assurance teams. The HR department doesnt just hire a salesperson base upon a managers request.The end result of HRs recruiting and hiring efforts is that the customer who interacts with the new sales person receives continuing world class service from the company. HR shares the quality of the new hire with the other departmental silos to insure that the company is, or becomes, the vendor of choice for that customer. * The final of the three emerging concepts for the Human Resources Department is What core business competencies must HR leaders possess in order to be credible strategic partners with the rest of the executive team?Each company and each industry tush generate its own list of core business skills their teams must buzz off that go beyond their case-by-case specialties. This issue has become so critical that in graduate and undergraduate level business programs, new editions of Organizational Development textbooks are including chapters on pecuniary calculations and ratios, corporate social responsibility, globalization, and major workforce diversity challenges, among others.The biggest barrier to profitability is ignorance ignorance by many population about how the company makes money and how it achieves its objectives, and how all of the departmental silos are interdependent on each other. The myth that only finance people need to know about finance or that marketing people are the only peo ple who need to know about marketing is fast disappearing. In todays business environment, profitable organizations require super skilled employees who can solve complex problems using multi-disciplinary teams.hither are three examples how can HR be linked to profitability metrics * A well known global company formed a group of HR professionals who developed processes and training programs in sales, customer service, workouts, project counsel, process improvement and leading development that focused on critical performance issues for their internal and external customers. By partnering with operations, sales, and customer service they served as a catalyst to forge alliances, partnerships and agreements.Many of their efforts resulted in improved relationships that translated into Preferred Provider Status, which increased sales and lowered costs. All of their costs were liquidated by charging a fee for the service while creating mesh revenue. After two years, this HR group genera ted sales of $4 million and a profit margin in excess of 30% which was returned to the division compute at the end of each fiscal year. * Secondly, an HR team, partnering with the Audit staff, discovered that the accounts receivable turnover had moved from a preferred 30 days to 45 days during the past two years.They decided to let the chief credit officer go. The HR staff established criteria to identify candidates with the ability to reduce the ratio from 45 days back to 30 days. The HR staff recommended one candidate for hire. Within six months, the companys DSO (Days Sales Outstanding) ratio was reduce to 35 days. * In a third case, while designing and negotiating a new health care and 401(k) plan, the HR leadership partnered with the sales and marketing team to determine if the cost of the program would erode the companys market share and competitive pricing strategy.The resulting benefit program design achieved its cost/benefit objectives without jeopardizing the companys ma rket share and pricing metrics. How do HR leaders and CEOs make the Human Resources Department to a Profitability Factor? Here are suggestions based on that the more employees become knowledgeably involved in the business, the better they will be able to become a more deep asset. * Develop a leadership development program that includes hands on training in all of the functional disciplines.For example, in the production department, identify the barriers that foresee managers from achieving efficiencies and savings * Insist that Human Resources staff receive financial training so they understand the impact of cash flow, receivables, billing cycles, and so forth. If it is a unexclusive company, teach them how to read and understand companys annual report. Reading the proxy statement is always informative even if the information contained in it is reluctantly revealed, and occasionally masked with arcane accounting jargon * Have HR staff participate in sales strategies, customer vi sits, and technology reviews.Encourage them to learn quality methods, process improvements techniques, terms and conditions, and contract negotiations with suppliers and customers. Engage them as process consultants ( hit them trained if necessary) so they can assist with growth initiatives * Most essentially, hold all employees accountable for achieving the critical numbers established for your company. A superb HR department becomes irrelevant if the company is sliding into bankruptcy. The HR departments powerful value focuses on its contributions toward reversing the slide.It is important to Include HR employees as full business partners. They will rise to the occasion and surprise you by building your bottom line and becoming a profit center contributor as well as maintaining their traditional responsibilities and they will be better at both. The intense and brutally competitive business environment of our global and digital world needs the help of everyone in the company. Rus sian comminuted enterprises do not practice the establishment of HR Departments in view of unprofitability of such a business organization.As the result, the majority of picayune enterprises do not develop any HR strategy. Thus I would equal to present the unique HR strategy of Apple Inc. and how it is linked to companys business strategy. Most firms strive to have a productive workforce. unitary of the best ways to measure workforce productivity is revenue per employee. Apple produces what can only be considered extraordinary revenue per employee $2 million. A plunk for measure of workforce productivity is profit per employee nearly $478,000 for Apple (unbelievable considering it has a retail workforce).During 25 years Apple has been following the philosophy called lean management which explains the prime drivers for Apples extraordinary employee productivity. For years, the leadership of Apple has followed the philosophy that having less is more, meaning that by purposely un derstaffing and operating with reduced funding, you can make the team more productive and innovative. Innovation at most firms is expensive because you must pay for a lot of trial and error.The lean approach, however, can improve innovation because with everything being tried, there simply isnt enough eon or money for major misses and re-dos. Unrealistic deadlines at Apple mean that you have to get project problems solved early on, because there isnt time to redo things over and over. Being lean forces the team to be more cohesive. crimson providing a lean schedule forces everyone to be productive because they know there is no room for slippage. At Apple, the lean approach means that even with its commodious cash resources, every employee must adopt the mentality of leanness.If you understand the lean concept and its advantages, you shouldnt be surprised that numerous innovations have been developed in garages, the ultimate lean environment. I have chosen an article Human resourc e practices to attract and retain talents by Hiltrop, 1999, because, in my opinion, it is very actual substructure as businesses look for global growth, chronic skills gaps combined with a mismatch between demand and supply of talent means that getting (and keeping) the right people in the right places at the right time has never been more challenging.HR leaders need to mobilize talent to help businesses grow. This article explores one of the biggest issues and challenges now faced by large organizations how to attract and retain a critical group of talented people. Getting talent management right means you can worry less about your talent problems and more about your business opportunities. It is very important to use a fact based approach to help identify the specific elements of talent management which drive the most value in your business and industry.It is needed to create a Talent Management modeling and Diagnostic to develop and implement strategies that deliver the right i mprovements those that give you the best return on investment. So I can conclude that to win the war for talent, companies should figure out who they are aiming for, and then make sure the recruitment process and practices are tailored to the specific needs and expectations of the target group. I have chosen an article Science and practice of HRM in small firms by Mayson and Barret, 2006 because human capital (i. e. the knowledge, skills, and abilities of employees) is one of the primary factors a business can cuss on to differentiate their products or services and build a competitive advantage however, few studies directly guide managers of small and growing firms through the people management issues that they will face through the lifecycle of their business. The recognition that human resource issues are important to small and growing firms is not new. For instance, in 1987 (Hess) was presented data that suggested that small business owners rank human resource related issues as the second most important management activity after general management.Further, was suggested that the majority of CEOs believe that human resource practices have a substantial impact on firm performance. Additionally, in 2008 were presented the results suggesting that sound hiring practices and training programs are considered important by small business owners who have 10 or more employees. A small firms ability to attract, motivate and retain employees by offering competitive salaries and appropriate rewards is linked to firm performance and growth.Whilst the evidence does show that there is some form of HRM in small firms, it also confirms that the practice is characterized by informality. I personally think, that this is a problem, because informal HRM practices do not necessarily recognize the value of employees. Despite the recognition of the importance of HRM to small, growing and entrepreneurial firms, there is very little query in the area, there is even less research th at explores the strategic nature of HRM in small firms.It is important to note, that properly developing strategic selection, training, and compensation programs takes time and financial resources. However, these short-term costs are almost always balanced by long term gain because the quality and caliber of employees (or human capital) at heart the firm improves. The improved caliber of employees and enhanced effort almost always has a positive financial impact for the organization.