Relationship Between Business And Human Resource Strategy And Models Of SHRM

Vertical and Horizontal alignment of SHRM with Business Strategy

Human resource is one of the most important departments of any business organization, primarily because it is the human resource team which ensures that the goals and objectives of the employees are aligned with those of the organization. Strategic human resource management is the bigger umbrella under which human resource component such as hiring, discipline, payroll and works along with the employees in a collaborative manner to boast the retention , improve the quality of the work experience and maximize the mutual benefit of employment for both the employee and the employer.

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The assignment here is divided in two tasks; one of the tasks will discuss and explain the relationship between business strategy and the human resource strategy with detailed explanation of vertical alignment and horizontal integration across the organization. The assignment will critically evaluate, compare and contrast the theoretical basis and models of SHRM. The client has to be informed on the strategic perspectives of best fit/contingency fit, contingency, best practices and resource based view. The second task will critically discuss the nature and theoretical perspectives of the employment relations. The roles of the actors within the employment relationship will be explored at length. Towards the end, a set of recommendation will be produced for the client on how employees and voice their opinion and contribute to the improved employment relations within the context of the organization.

Task 1: Explain the relationship between business strategy and the human resource strategy with further explanation of vertical alignment and horizontal integration across the organisation.

The growth and sustainability of a business is dependent on variety of management function and department such as the marketing, sales, human resources, R&D, Production, Operations and many more. The underlying aim of the entire department is to ensure that they have a right alignment with the goals and objectives of the organization.  Strategic HRM centres on the planned human resource usage and activities with the intention of success and growth of the organization (Armstrong & Taylor, 2014). The following type of alignment is required for the concurrence of SHRM with the organization:

Vertical Fit or Alignment

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Vertical fit can be understood as categorizing the alignment of the HRM practices and the strategic management with the processes of the business organization. This fit in the organization is managed by generally directing the human resources towards the primary activities or initiatives of the organization. This alignment is the main idea or of the SHRM and is further linked to a contingency based approach, thus creating an overall fit of various management strategies encompassing the SHRM is the long term goal of the organization(Bailey et. al., 2018).

Theoretical Models of SHRM: Resource-based View and Contingency Approach

Horizontal Fit or Alignment

The Horizontal fit alignment has more to do with the alignment amongst the various SHRM practices in the organization. This alignment can be achieved and realized to its maximum advantage only with the effective allocation of resources to all the departments and the employees. Horizontal fit thus ensures that the resources are effectively distributed across the organization and all the process and activities are directed towards ensuring a perfect vertical alignment (Kerzner & Kerzner, 2017).

The central idea of SHRM here is to empower the organization and the employees by achieving the stature of “Fit” whilst still being “Flexible” in nature and in a position to better adapt to the changing dynamics of business environment.

Theory and Models of SHRM

Strategic human resources can be seen as a statement of the “Intent” in the organization in context to how the resources of the organization are being managed. These intentions basically reflect the plans, development and the programs for change for the business organization (Reynolds & Yetton, 2015). This section will discuss two models of SHRM to develop a better understanding for the organization.

Resource Based View/Resource Based Approach

This view states that the resources ingrained in the company’s human capital reflects one of the most important strategic factors the company holds, this is also called the competencies of the employees. The model states that in order to achieve sustainability within the organization it is important not only to analyse the external environment, but also to identify the skills and the capabilities of the employees. Hence, the competitive advantage lies within the organization; analysis of the human capital, resources and capabilities is an indication of the same.

The resource based view of SHRM explains the distinction between the resources and capabilities of the organization. The resources for better analysis have been divided into both the tangible (human, physical, technological and financial) and intangible (Brand name, know-how and the reputation). The resources have to be unique and must have some value, on the other hand capabilities is the accumulation of the collective skills of the organization (Phillips & Gully, 2015).

Thus, according to the resource based view, the HR strategy has to be created in the way that the core competency and capabilities of the employees are built and enhanced, and such high functioning employees have to be retained.

The Contingency Approach

It is on the basis of contingency theory that there must be a fit between the internal HR strategy and the competitive strategy and also a fit between the different elements of HR strategy. The business and the HR strategy are considered to be reactive in nature as the HR strategy is not subordinate to the product market logic and the corporate strategy. A lot of business theorist are of the opinion that the HR strategy depends on the business strategy, on the other hand, change management argue that it is more closely related to the degree of change (Hill, 2017).

HR Practices of Performance Management and Reward

HR Practices of Performance Management & Reward

It has been observed that the organization to a large extent is still reliant on yearly appraisal of the employees working in the business organization. The employees have to wait for a year to get appraised and at the same time this strategy is not that effective, neither does it lead to desired results for the organization (Junni et. al., 2015).

The KPI ordinarily are created for the employees in the business organization according to the goals of the organization. This Key Performance Indicator has a vertical alignment with the organization and helps in creating HR strategy for the employee and the organization.

Another important aspect of the reward system the organization engaged is closely related to transactional in nature. This is most definitely something which needs an improvement, due to the fact that the employees who are not rewarded most definitely feel demotivated and lose their faith in the organization.

These are some of the practices organizations are engrossed while evaluating and assessing the models of SHRM, Best Practices and the evaluation of Performance Management System


A set of recommendation will be provided to bring some improvement in the PMS of business organization.

Need of the Hour-360 Degree PMS

The PMS model is definitely a good strategy to evaluate the performance of the organization. However, the present model is not comprehensive in understanding and does not assess the correct performance of the employees. Thus, it is recommended that the organization get engaged in a continuous monitoring and evaluation of the employees and provide them feedback on their performance. The 360 degree PMS program will evaluate the performance of the employee round the year and would also help them in giving a chance to improve their performance, before the final review date. Another benefit of 360 degree PMS is that the peers, superiors and colleagues are involved in giving the rating of the employee, which would serve a bigger and better purpose for the organization and the mployee Empowerment

Employee empowerment is engaging the employees in the activities of the organization and also to consider their views, opinion and say on matters of strategic importance of change management. The employee are the people who are maximum affected by any change in the business, thus, it is advised to empower them by considering their feedback on the same. Additionally, employee empowerment would lead to positive motivation, which would imply an increase in their productivity (Shin & Konrad, 2017).

Recommendations: 360-Degree PMS, Employee Empowerment, Balanced Scorecard

Balanced Scorecard

Balance scorecard can be understood as a model of strategic planning and management system which is used by the organization to communicate, aliening the day to day activities of the business, prioritizing the projects and measuring and monitoring the progress towards the strategic targets and objectives. The Balanced Scorecard is an extension of the Performance management system which can be applied to the entire organization.  The BSC is divided into four segments which covers all the process, activities and business function and give an overview of the entire organization and the lacunae in the current practices which can be further improved. Thus, the organizations have to implement Balanced score card to drive sustainability and continuous improvement in the business (Bratton & Gold, 2017).


In order to bring the discussion to a logical conclusion it can be said that SHRM is one of the most important component which finds utility in all the disciplines and activities of the human resource department. A continuous 360 degree PMS and a Balanced score card will bring a horizontal and vertical alignment within the organization harbingering the fit of the employee in the organization.

Task 2: Explain and critically discuss the nature and theoretical perspectives of Employment Relations. You will Identify and critically evaluate the roles of the actors within the Employment Relationship with analysis of the changing nature of employment relations. You will make recommendations of how mechanisms of employee participation and employee voice can contribute to improved employment relations within an organisational context.

Employment relation as the name suggest are the efforts of the company to manage and build its relationship between the employees and the employers.  Good employee relations imply that the program and policies of the organization are created in transparency and provides consistent treatment to all the employees. Good employment relations are necessary to earn the respect and loyalty of the employees. Thus, good employment relations contribute to the success and growth of the company (Burrell & Morgan, 2017).

Theories and Perspective of Employee Relations

In order to understand the essence and the theory of Employee relation and the various actors, it is important to understand the same with the perspective of Unitarist, Pluralist and Marxist.

Unitarist Perspective

The company here is considered as integrated and has a harmonious group of people with the culture of loyalty ingrained in them. Herein, the organization values mutual cooperation as everyone shares the same purpose. This kind of organization does not require a trade union, as the order to the day in such an organization is based on mutual goals and shared purpose (Blumer, 2018).

Pluralist Perspective

This perspective of employment relation states that there are different sectional groups in the organization who have their own team, loyalty and a leader. The responsibility of the organization here is persuasion and coordination amongst the employees. There is strong possibility of conflict in such relations and if not handled well, conflict can create severe damage to the organization (Scott, 2015).

Marxist Perspective

This is also called as the radical perspective and it reveals the true nature of the capitalist society. The underlying idea of Marxist Perspective is based on realizing inequalities in the power of employment relationship. This is one of the very early theories of employment relation and does not hold significance in the present context (Hislop, Bosua & Helms, 2018).

Role of Actors in Employment Relations

Different organizations have different people working under different managers. Thus, it is literally impossible to generalize the behaviour of the managers and the employees working in the organization. However, their roles can be analysed and critiqued using the theoretical understanding of the employment relations and can be put to good use.

Role of Employees

Employees have an equal role to play in the employment relations within the organization. They expect fair treatment, equality and fairness in every act of the management. Employees are significantly affected by the relations within the organization as it impacts their productivity directly. Their behaviour, attitude, commitment to work and loyalty are defined by the employment relations within the organization (Taylor, 2017).

Thus, it is always advised to create positive and nurturing relations with the employees so as to extract their maximum productivity and make them accountable for their jobs and duties.

Role of Employer

Employer has an equally important role to play in the employment relations within the organization. It is the responsibility of the management to ensure inclusion at the workplace and treat employees with respect and be responsible towards them. A firm which is highly employee centric contributes towards positive and harmonious relationship between the employee and the employer. It is the employer who by virtue of various activities can create a positive workplace environment and build sustainable relationship with the employees. The relationship between the employee and employer is based on mutual respect, trust and faith and must be leveraged for the enhanced productivity of the organization (Habermas, 2015).

The Role of Government

The role of government in employee relation is mostly attributed to regulation of the relations between the employee and the employer. In the early days of industrial revolution the government across the globe adopted the policy of laissez faire. However due to increasing inequality and discrimination in business organization, the role of government has been changing and finding better role to play in the regulation of employment relations. For instance, despite several reforms being introduced in UK legislation related to the workforce diversity and inclusion at work, there is still a major scope of improvement in the implementation of the policies to provide for good employment relations (Dutton & Ragins, 2017).

These are the major players or actors who play an important role in managing the employment relations within the organization. It is the mutual duty of all the three identified actors to act in the best interest of the employees, organization and the country as a whole and March towards the goal of sustainability.

Recommendation to Enhance Employment Relations

This section will provide a set of best practices which will ensure a positive and a healthy workplace employment relation. These practices are based on evidence based research and on the understanding of the employment relations.

Access to the Decision Makers

Employees in the workplace are always looking for meaningful interaction and learning from their superiors. Some employees join the organization because they admire the leader, his vision and just to work under the guidance of the leader, they at times leave a better opportunity and be a part of this organization. Thus, it is advised that organization keep an open door policy, which gives the employees an easier access to the decision makers, this will help in boating their motivation levels as well as improve the employment relations (Ozkirimli, 2017).

Channels for Training and Development

The underlying purpose here is to engage the employees and provide them training and learning by utilizing the new channels such as social media, blogs, video conferencing and many more collaborative tools. This is most definitely a good practice by the employer and reflects their concern and care towards the development and growth of the employees. This will significantly help in improving the employment relations within the organization (Barkema et. al., 2015).

Employee Feedback

This is one strong and important area which most of the organization completely forgot while working towards the employment relation. Employers at times based on their understanding and learning create policies which are directed towards betterment of employment relations. However, what the employers think might not be in concurrence with the views of the employees. Thus, it is always advised and recommended that the employer should always ask the question to their Employee, as to what they think of the best ways to boast the practice of employment relations in the organization. This practice of taking employee feedback will boast the employment relations within the organization (Cooke, 2016).

Path for resolving Conflict

One of the biggest reasons behind poor employment relation in the organization is the absence of employee redressed policy in the business. For instance, if an employee had a fight with his supervisor, if he does not have a body or department to approach in such a case, the employment relation gets severely hampered.  This leads to conflict in the organization and the union is called upon to intervene in such matters. However, if there would have been a separate department or a body where the employees could go freely, talk about their grievances and concern in an open manner, this would really create a positive impact on the employment relations. The matter of the fact here is that conflicts are bound to arise in the organization, owing to workforce diversity, now if there is a separate body to effectively address the concern, and it would result in significant development in employment relations (Marsick & Watkins, 2015).

Opportunity of Work life Harmony for the Employees

Work like balance is the old concept; Jeff Bezos has created a new anthem of Work life harmony which makes more sense in the present business day. Work life harmony implies that an individual should carry the positive energy from his workplace to his home and vice-versa. This work life harmony will help in creating not only a good balance between his professional and professional life. At the same time, it would also help in improving his relations with his employer because of a positive state of mind. This can be ensured by the employer by not disturbing the employee post office working hours, providing employee with challenging tasks, giving the employees freedom to make their own decision and many more. Thus, this work life harmony will strengthen the existing ties between the employees and the employer (Collings, Wood & Szamosi, 2018).


Every individual within the workplace shares some relation or a bond with the employer. This bond is based on the pillars of mutual trust, faith, cooperation and the willingness to contribute towards the success of each other. It is the employment relations within the organization which is a pivotal to the success and growth of the organization.

The effectiveness of employment relation is not just the responsibility of the employer, employer do have a substantial role to play here, but there are accountable to providing and creating policies which nurtures positive workplace environment which is conducive to employment relations. It is the employees who have to act accordingly, and if they have some grievances they have to find a way to address them and not let the employment relation is disrupted. Employment relation is the about managing relationship between the different stakeholders in the business organization and ensure a happy and positive workplace environment.


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