By Rosemund R. Warrington, HR/ODE Specialist, CARICAD T here has been extensive research in the past decade directed at the relationship between Human Resource Management practices and organisational strategy. “Strategy”, according to Gerry Johnson and Kevan Scholes, authors of "Exploring Corporate Strategy, "determines the direction and scope of an organisation over the long term, and should therefore determine how resources should be configured to meet the needs of stakeholders”. Similarly, Michael Porter, a strategy expert and professor at Harvard Business School, emphasises the need for strategy to define and communicate an organisation's unique position, and says that it should determine how organisational resources, skills, and competencies should be combined to create competitive advantage. In this article, we will examine how human resource management connects with organisational strategy for the effective structuring and development of organisations. Human Resource Management (HRM) is a strategic approach to managing employment relations which emphasizes that leveraging people’s capabilities is critical to achieving competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices. (Bratton and Gold,2007). It can be seen from this definition that HRM is a combination of people-oriented management practices and its main aim is to create and maintain a skillful, valued and committed workforce to achieve organisational outcomes. The definition also supports the perspectives of author, John Storey (Storey.J, 1992 — Development in the Management of Human Resources) who distinguishes between soft and hard variants of HRM. Soft HRM focuses on employee training, development, commitment and engagement. This covers the fields of staffing (hiring people), retention of people, pay setting and management, performance management, talent enablement and change management, among others. Hard HRM, on the other hand, focuses largely on strategy where human resources are used to achieve organisational goals. This definition considers people in organisations from a more macro perspective. Multi-contextual HRM Human Resource Management, as we can see, is not a standalone approach. It is a meaningful approach that assists organisations in aligning their people-related strategies e.g. values-based systems and skills of employees, to the strategic goals of the organisation. The end result is that the organisation is able to achieve success through people. In today’s reality, particularly in some countries in the Caribbean region, it can be safely said that not many public sector organisations have incorporated HRM in strategic management at the levels of organisation and function. It seems that the most significant challenge for organisations is ensuring that HR practices are aligned with other strategic plans and approaches and support each other. In the context of the definition, a model has been developed that emphasises that HR strategy and functions must be aligned to the organisational strategy (vertical integration). Better still, HR strategy should be an integral part of the organisational strategy, contributing to the strategic planning process as it happens. The following model depicts the vertical and horizontal alignment of HRM and organisational strategy. This model goes further to recognise the impact of multi-contextual factors on HRM systems and practices, and it highlights three distinctive types of fit where HRM is concerned. Strategic Linkage: the relationship between the HR system and strategy. As mentioned earlier, effective HR practices can facilitate organisational strategy. By so doing employees are able to focus on the achievement of organisational goals since the implementation of strategy is based on the alignment between HR system and strategy. Individual Performance Management systems and Corporate Planning systems must therefore be inter-linked, and clear lines of accountability established so that fit can be created between organisational performance and performance at the individual level. Such a fit is evident in a number of CARICAD Member States, where the National Development Plan lays the foundation for focused sector level plans and provides an avenue for ministries and Continues on the next page 16
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