Introduction

The core of Human Resource management can be regarded as a strategic aspect

which acts as a fundamental factor in determining the success of overall organizational
strategies. It is necessary that the strategic approach of an organization is aligned with
the Human resources pillar for obtaining the maximum output from utilization of human
resources in the organization (Becker, 2001)

1. Theoretical review
1.1 HRM
(Abraham, 1991) defines human resources as a way of planning, organizing, directing,
controlling and development of human resources in a way the organizational objectives
are met. (DeCenzo, 2016) further describes this as a dimension that is concerned with
people in terms of recruitment, development, and motivation for a higher performance
with the objective of being committed to achieve goals of the organization.

Human resources management is an evolution from the personnel management pillar

which was a management system that was used to manage people (Boudreau, 2005).
Elton Mayo was one of such personnel who was involved in research and experiments
on human resource behavior during 1924. He had a strong opinion on the idea of
enhancing productivity through the emphasis of managing human resource (Bruce,
2011).

1.1.1 The importance of human resource management

Human resources management plays a vital role in the process of maintaining the
survival of any organization whereas the human resource managers are having a
fundamental responsibility in ensuring a right set of people with right skills are recruited
to the organizations, advancing skills among the employees, dispute resolution,
upliftment of motivation, fair share and adhering to the legal requirements.

Therefore, we can regard that human resources are built upon the fundamental idea of
proper utilization of skilled employees and bringing out the maximum efficiencies within
the prevailing human resources in the organization.

The future of human resources can be in challenging hands given that most of the
factories are automated with the rise of artificial intelligence and it is likely that the
lower-level routine jobs will be destroyed.
However, the machines and technology developed by humans are only capable of
operating for routine tasks and they need to be monitored by people. Therefore, the
human resource requirements in the future will be most nestled around the
fundamentals like talent, skills, professionalism, creativity, and emotional intelligence.

1.2 Strategy
As per (Wheelen, 1995), a strategy can be defined as a combination of management
decisions and arrangements that are accustomed together to regulate the future
performance of an organization. (Hill, 2014.) suggests a similar opinion by stating that
strategy as an integrated set of actions that are aimed at advanced performance.

The formulation of strategy originated from senior management of an organization who

are evaluating the interactions among the strategic factors that are aimed at
determining strategic choices as a base for decision making for the managers to attain
organizational goals (Hamnett, 1988).

1.2.1 Integration of HRM along with strategy

(Becker, 2001) states that human resources of an organization should be firmly adopted
with the organizational strategy. This emphasizes that HR should stop being a cost
center and instead should be focusing on ensuring the compliance which is itself
aligned to the strategy of the organization. The HR department needs to determine that
they are a strategic asset to the organization whereas it needs to focus more on value
creation while convincing the tip management that their supportive role is critical in
strategic planning.

The skills of the employees should be developed in accordance with the organizational
strategy to ensure that the human assets are strategically prepared to achieve the
goals. All the aspects of HR functions should be accustomed to enhancements and
development of the human capital within the organization. It needs to be initiated from
recruitments, training, compensation feedback and other relevant areas (Becker,
2001).

As per (Righemer, 2002) HR requires the extension of influence towards administrative

roles while being more strategic when influencing the strategic roles. This implies that
HR should be parallelly working on both strategic administrative roles without
abandoning one another. This notion can be realized through an advanced automation
or outsourcing mechanism whereas it would permit the HR to focus more on strategic
levels and turn up with more strategic initiatives (Galford, 1998). (Frangos, 2002) states
that employees of the organization would require a sound knowledge in business,
financial understanding, and technological skills to effectively contribute towards the
organizational strategy. This implies that the organization needs to have competent
employees in place who can carry forward strategic initiatives. The strategic
engagements will lead HR to play a strategic managerial role with more technical skills
leading to bring an alignment between the goals of the HR department and the
organization.

2. Levels of strategy
The levels of strategy explain the application of strategic issues with respect to the
various levels of the organization in terms of corporate, business, and functional.
These different levels of strategies are interrelated whereas the corporate level
strategies are needed to build upon the lower-level strategies. However, it is important
to understand the all the business units in the organization are required to synergize to
accommodate overall corporate strategies (Wheelen, 2011)

2.1 Corporate-level strategy

Corporate level strategy is a notion that demonstrates the overall direction of an
organization with respect to the general philosophy towards organizational growth and
managing numerous business units (Goold, 1998). The type of business that the
organization is intending to be involved in and business acquisitions, modifications and
terminations are determined through this strategy (Bowman, 2001).

2.1.1 Linking HR to Corporate strategy

The HRM policies of the organization should be closely aligned with the corporate
strategy of the organization whereas it will enable a higher level of corporate
performance achievement. Following describes three major corporate strategies
aligned to the HR policies.

GROWTH STRATEGY

A company will be persuading a growth strategy when it identifies a niche market

segment that can aggressively expand within a particular market (Carman, 1980).

When an organization has employed a growth strategy, a key challenge for the HR
department involves recruitment and training of numerous employees to support the
growth strategy. Therefore, the top management needs to consult the HR for ensuring
that they are having enough capacities and capabilities for attracting and training many
employees.

When the growth strategy is in the form of mergers and acquisitions, the key challenge
for the HR involves the determination of an effective way to integrate two workforces
into a single cohesive unit. In certain situations, there can be employees who will idling
due to duplication whereas choices will include to transfer, lay off or retain. On the
other hand, it is most likely that the two organizations are accustomed to two different
HR philosophies whereas there can be issues rising in terms of training, promotion,
and compensation. Therefore, the HR decision makers will have to be strategic in
determining which strategies to retain and which to discard.

RETRENCHMENT OR TURNAROUND STRATEGY

Organizations are inclined to adopt a turnaround strategy when they discover that the
current operations are not yielding effective results. Thereby, the management will
terminate the operations, close product lines, shut down plants and lay off employees
to scale back to the current operations. The intention of this strategy is to retrench the
resources that were utilized over non yielding operations and reinvest them on high
yielding products can markets (Robbins, 1992).

Layoffs, labor contract renewals and retrenchments are the components that the HR is
responsive to in terms of turnaround strategies. Downsizing involves an increasing risk
of building up job insecurities within the employees whereas the HR need to maintain
the morale ensuring that their jobs are secured. At the same time, HR needs to ensure
the optimization of the transitional process to evacuate employees through equitable
severance packages and counselling concerning the outplacements.

DIVERSIFICATION STRATEGY

Diversification is a widely used another corporate strategy. This strategy is involved

with making decisions pertaining to ownership and operation of different business
modules which can either be related or unrelated (Palepu, 1985).

The various business units owned by an organization are interrelated to each other in
some ways are defined to be related to diversification whereas the markets. Policies,
procedures, recruitments, selection, compensation and training and development are
relatively uniform to each other (Rowe, 1997).
Unrelated diversification occurs when the organization is planning to expand into new
products and markets which are unrelated to the prevailing products and markets. This
provides a strategic advantage for the companies in terms of shielding adverse effects
pertaining to business cycles, competition, and environmental fluctuations (Rowe,
1997).

2.2 Business-level strategy

Business level strategy concentrates over the decision and actions that are concerning
to each business unit of the organization (Hambrick, 1980). The objective of the
business strategy is to make the respective business unit more competitive in the
market. This strategy is centered around the fundamental question of how are we
competing in the market?

The business level strategy is upstream of the corporate level strategy that is crafted to
a specific business unit. A significant contribution for understanding this strategy was
done by Porter between 1980 to 1985 where three framework strategies that are
describing the business level strategy were introduced as cost leadership,
differentiation, and focus (Nandakumar, 2010).

2.2.1 Linking HR with Business Strategy

DIFFERENTIATION STRATEGY

A company aims at achieving a competitive advantage by the employment of a

differentiation strategy. It targets enhancement of the image and reputation so that they
can stay ahead with the competition (Valipour, 2012). Differentiation can be applied in
terms of the design, quality, appearance, or delivery whereas this enables the
organization to charge premium prices with a higher profit margin (Wang, 2019). BMW
and Rolex can be regarded as such two companies who have employed differentiation
strategies successfully.

The role of HRM in this regard is that recruitment and retention of employees who can
provide quality work and innovative mindsets. Similarly, the performance of the
employees should be improved with suitable training programs, appraisals systems,
reward, and recognition programs.

COST LEADERSHIP STRATEGY

This strategy focuses over the minimization of cost as much as possible. This is aimed
at incurring lowest possible cost for the products that operate to achieve a high sales
volume that would enable to account for a large market share (Baack, 2008). Low cost
should be incorporated into all the aspects such as production, administration, and
distribution.

Role of HR in this strategy is that recruitment and retention of the employees who are
presumed to work simultaneously effective and productive at an optimal compensation
level. Training should be accustomed to emphasizing over efficient production
techniques and reward systems should be based upon the quantity rather than the
quality. For example, this strategy is often followed by the fast-food companies as a
means of reducing labor costs. Another famous HR approach for this strategy is the
outsourcing of the production to other countries with less labor wages. This can be
vividly observed with apparel, car manufacturing and electronic companies that their
production plants are in certain countries with lesser labor charges.

FOCUS STRATEGY

When an organization has employed a focus level strategy, it concerns targeting a

specific segment from the marketplace to its products (Ormanidhi, 2008). This focus
will be directed upon a specific geographical area or a segment with a different
demographical composition. The goal of HR in this strategy is the recruitment and
retention of employees who understand that new market and are accustomed to
languages and social behaviors within the said marketplace.

2.3 Functional-level strategy

Functional level strategy describes the major functional operations in a business unit in
terms of marketing, finance, HR, production, and research & Development (Nickols,
2016). This strategic level is mainly concerned about the maximization of the
productivity of the resources in each business unit. It answers the upstream question of
how are we supporting the business level strategy? The HR relates with the functional
level strategy as follows.

2.3.1 Linking HR with the Functional Strategy

Pre- selection – This includes the planning of human resources and job analysis
Selection – Decisions pertaining to staffing of various positions within the organization.
Here, they perform actions concerning recruitments and selection of right people in
adherence to the organizational strategic objectives.

Post- Selection – Actions concerning enhancing the job experience of the employees
are conducted in this stage. This can be actions like improving the job performances,
training, appraisals, rewards, recognitions, motivation and overall increasing the
employee satisfaction.
Conclusion
HRM is required to understand the importance of integrating their actions and
decisions in line with the organizational level strategies. The implementation of human
resource strategies should be concerned with the understanding of individual and
interpersonal behavioral processes whereas HRM managers need to attempt to
understand the role of the GRM function in supporting overall organizational strategies.
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