Strategic Human Resource Management and Competitive Strategy
The performance of the human resources departments can be evaluated using the way the department involves and engages workers in understanding and implementing various aims of an organization. Rather than just handle administrative tasks for employees, effective HR management calls for leadership practice in employee relationships to make sure that workers contribute, believe in, and strive to achieve the organization’s goal. This section of the paper establishes the various incidents of strategic HR management as precursors for evaluating the identified practices, according to theory and best practices. The operating business environment at Innocent is complex. The company successfully moved from being a small business entity with predictable outcomes in its various operations and marketing strategies to become a multinational corporation with different aspects of stakeholder engagement and a colossal number of employees.
Evidence of Strategic Human Resource Management at Innocent
The case study has no illustration of collective bargaining instances, implying that Innocent has no unionized workers. Nevertheless, elements of employees forming groups to challenge or support positions are common in organisations of its scale. It is upon the HR department to handle the issue appropriately. Based on the case study, Innocent has a foundation that enhances the corporate image of the firm and helps to improve its brand association with community development and humane practices. The mention of the Innocent Foundation at this part of the paper is essential because it contributes to the illustration of the next point about employee involvement. Rather than just form the Foundation as a requirement for gaining a competitive threshold, the firm uses the Foundation as an extension of its employee-training program. It does so to cement its values and core beliefs of the employees so that they can embrace citizenship behaviour and support the business in its endeavour to become a global leader in healthy smoothies (Armstrong, 2010).
Rather than consider employees as another cost parameter in the business, the three directors of the company help and continue to hold the belief that the business can only succeed externally after it triumphs over its internal challenges (Michaels, Handfield-Jones & Axelrod, 2001). Thus, Innocent consistently provides training opportunities for employees; in a formal way, as in the case of partner NGO participation, and informally by the employees taking part in management deliberations and decision-making. In the last part, Innocent relies on entrepreneurial activities and thinking of employees to allow them to explore personal abilities and express them for the benefit of the company.
Throughout its history, Innocent aimed to make its employees as the sources of competitive advantage for the business. The practice started with the company’s directors, who signed pacts to remain together, and the senior management staffs, who deliberated every new decision and sponsored it to turn it into practical action in the firm. Delegated decision-making behaviour also contributed to the priorities that the firm had in employing new workers. It relied on five values that prospective employees had to exhibit. They included natural, entrepreneurial, commercial, generous, and responsible behaviour. With these qualities, it is easy to see the purpose that the company places on employees. Employees serve as idea generation resources for Innocent. Resultantly, the firm’s first strategy for managing its HR resources is to get the best employees who align with the company’s objectives, values, and beliefs.
Other than the alignment of values, Innocent also tends to train employees through its induction program. Here, the directors personally inform recruits of Innocent’s values and their desired interpretation. Thus, not only does Innocent train its employees in an academic way, but it also influences their habits, behaviours, and orientations to fit into the existing company culture. It helps the employees behave cohesively and present a uniform outlook of Innocent. It also portrays Innocent as capable of handling its competitive advantage challenges.
Appealing to personal conduct and cultural attributions of employees was an effective way of ensuring that most Innocent employees would still behave according to top leadership expectations, even in situations that lacked absolute guidelines on preferred employees conduct. The company’s induction program facilitated employee participation in decision-making. Consequently, employees could debate with the leaders and question any practices that were new to them. Beyond that, the induction program and the communication of the five value propositions of Innocent serve as examples of top-level communication flow to the bottom of the organization and the reverse way.
The earlier mentioned decision and action support system that required sponsors of ideas and extensive debate on their validity to the firm are examples of think tank behaviour necessary to solve complex organisational problems. The practice is an effective means of recommending solutions and revealing hidden alternatives to agreements with the employees and management when applied to HR management. Employees make the most of their resources to achieve individual and organizational benchmark goals through participation in decision-making. Most importantly, engagement enhances trust in the organization, thereby allowing the employees and management to work cohesively as a unit.
Connecting HR Practices to Competitive Strategy
The competitive environment of Innocent is dynamic. The company has to consider external factors like economic, legal, and political influences in its growth prospects. It must also deal with the competitive forces available in the countries where it operates, with the main ones being the threat of rivals in the industry and the power of substitute products, such as artificially sweetened beverages and alternative natural drinks.
According to the resources based view (RBV) framework, internal resources can be effective sources of a competitive advantage when the management uses them appropriately. One of the resources available to a firm is its employee force. The human resources can be a source of non-imitable capability, thereby allowing a company to achieve results that its rivals may have no idea or capability of copying. It is assumed that a firm’s resources are heterogeneous when using the RVB method. It is also presumed that the resources are not mobile for the firm to remain competitive. Thus, human resources have to be immobile across competing firms to qualify as part of the resources that enabling the firm to achieve competitive advantages within the RBV framework (Scullion & Collings, 2011). Innocent implements several employee programs that ensure its talents remain valuable, rare, non-imitable, and organise to provide long-term distinctive competitive advantages.
In human resources, the skills and knowledge posed by employees are the main drivers of business growth and can offer sustainable competitive advantages. Thus, when looking at Innocent’s competitive advantage position, its human resources should have the ability to create competencies for the business. They have to remain rare and immobile, and then create value. However, they should not be substitutable (Sharma, 2011). At Innocent, human resources add value to the firm. They allow it to manufacture its products and deliver to the market in a timely way, while observing high-quality standards and adhering to consumer expectations, based on the company’s promise. The products from Innocent attract a premium price compared to the competitors’ products. Thus, the role of human resources management at the firm is to ensure that product quality remains high to guarantee premium prices charged at a retail store. The company also relies on the high reputation of its business and brand to sell a large number of products and sustain its growth momentum. Employees contribute to the reputation of the company by sticking to predefined, good conduct, adhering to the company’s code of ethics, and being good brand ambassadors (Silzer & Dowell, 2010). Also, Innocent is selective in the recruitment process when hiring; thus, it can derive maximum value from its human resources at a less expensive cost incurred in changing employee perspectives to align with the company’s perspectives.
The innocent can still fail to acquire competitive advantages, even with enough training and adequate employee culture management. That is where the strategic management of HR comes in to create an element of rarity. The actions of the leaders and administrators at Innocent endeavour to make employee knowledge and conduct strictly limited to Innocent (Glaveli & Karassavidou, 2011). Employees undergo a thorough induction process when joining the company so that they have no reason for leaving. On top of wages and monetary allowances given to the employees, Innocent also provides an avenue for the employees to self-actualize. The workers are encouraged to take part in worthy courses in their communities. They are also challenged to take time off regular work to give their skills to several community organisations that appeal to their values of giving back. Such opportunities are only available at Innocent, and they help to curb talent turnover at the firm. Consequently, Innocent can ensure that its employees are unique when compared to employees of rival companies (Truss, Mankin & Kelliher, 2012). At Innocent, the workers feel like part of the company. Innocent enjoys a favourable mention as one of the best employers in the industry. The main findings here include the fact that Innocent embraces a precise selection of employees and develops job positions that fit various employee capabilities, thereby allowing them to utilize their high-level abilities.
With value-addition and rareness of human resources, Innocent already enjoys a favourable position in its competitive advantage quest. Nevertheless, the company has to do more than hiring the best employees and giving them an attractive working environment to remain competitive over the long term. The two features may make employees love working at Innocent and help to limit the entry of less qualified employees. However, they still fall short of giving Innocent a valid defence against other firms that can copy the same strategy with ease. The healthy Innocent culture of striving for quality and delivering it to customers without compromise is a feature that makes its human resources inimitable. The strong Innocent culture has not only allowed the firm to enjoy a strong and favourable brand reputation, but it has also played a part in limiting employee turnover. It also helps in encouraging the workers to deliver their best in realizing the company’s objectives. As described earlier, the Innocent culture engages employees at multiple decision-making points in the organization. It also gives employees numerous opportunities for personal and professional growth. All these contribute to a strong company tradition that easily assimilates new employees into the closely-knit Innocent community.
An additional source of competitive advantage related to strategic human resource management is wage management. Innocent has a two-tier wage system. In the first case, employees receive monetary compensation as they would expect when working with any firm. Given that the case study does not highlight any employee grievances, this paper concludes that Innocent offers competitive wages. Beyond wages, the second tier of payment comes from the employee fulfilment opportunities that carry a high monetary value equivalent. The company provides workers with opportunities to advance themselves by providing them with both the time and the resources to do so. Otherwise, when left to their means, employees would probably never get opportunities or the time to follow opportunities for growing their connection with their communities and embracing natural and organic principles of living.
Conclusion
In summing up the views highlighted above about Innocent’s use of RBV in strategic HR management to achieve a competitive advantage, this part of the paper concludes with the following views. First, Innocent is in a favourable competitive position because it values employee engagement and has a systematic recruitment process. The management of employees as more than just cost factors has allowed the firm to withstand various business challenges, with the main one being the escape of talent. This part of the paper was organized into two parts. The first part provided evidence of strategic HR management at Innocent, while the second part linked the identified practices with the RBV framework to explain the way each element of HR management at Innocent contributes to the firm’s competitive advantage.
Factors to Consider During Designing and Introducing a Talent Management Program
Streamlined business processes and talent management are crucial to the success of any business. While good business processes are easy to acquire or design, the same does not apply to talent management. Difficulties in business operations cause overworking negation, and under-appreciation of talent, which can cause the exodus of the same talent at a great business cost. Many firms fail to handle talent management needs when they are in their fast-growing period. Consequently, they end up with a talent problem when they are too big to design effective systems without incurring substantial costs. Most businesses prioritize high-growth and fail to pay attention to sub-optimal opportunities like the talent processes.
When owners or managers of a business have no formal experience of dealing with organisational performance, they lack an understanding of how talent lapses limit or destroy the performance and the growth of the business they are building. At the same time, they rarely know what they should do. When the damage caused by talent lapses occurs, most business owners do not notice because the lapse hides behind an overwhelming success witnessed in various other aspects of the business. For example, when there is considerable sales growth and demand for expansion, a business will find individuals to fit the various roles without preparing those individuals for the roles assigned to them.
Design and the Introduction of Talent Management Programs
The essence of having talent tools or programs is to shift the management of talent from ad hoc strategies to well-calculated plans that take care of unforeseen challenges when they occur. Instead of dropping talent when business circumstances become hard, most organizations now realize that they can use adequate talent management programs to hold on to the redundant talent and make it available for future needs of the business. This saves the business the cost of recruiting new talent and training to align new talent capabilities with business demands (Wilska, 2015). One essence of talent management is to provide sustainable growth for organizations via empowerment. The main principles of talent management include governing talent management, advising firms to identify the right mix of talents, embracing communication, supporting and recognizing talent, and appreciating the talent accordingly.
Leaders of any organization must consider objective metrics when designing talent management programs. There are measures needed to evaluate talent and associate talent management with business opportunities. Most job descriptions go into a flux when businesses are experiencing high growth. Associated opportunities become blurry, and the business is unable to match talent with its required role. Nevertheless, companies still need to get the most out of their workforce. The only way to do so is through the identification and definition of clear goals. Moreover, companies must address arising issues, such as incentives in the form of compensation and career advancement. Failing to address these issues ensures that any prescribed programs for managing talent fail (Wilska, 2015). Questions worth asking at the design level of talent management systems would include the way the organization measures performance and whether all employees clearly understand the way they fit into the system.
Other than objective metrics, companies also have to consider the strategic alignment of talent. Instead of treating talent as an afterthought, they must place it at the forefront of their strategic objectives. Companies make a critical mistake when they fail to align talent strategies intimately with the overall strategic planning, yet they rely on people to execute. Consequently, it is appropriate for leaders to incorporate the views of HR, which entail putting talent as part of strategic planning. When this is done, talent management programs become useful tools for optimizing the overall performance of the organization.
The ability to manage talent successfully ensures that companies maximize the talent they have. Firms have benefited mostly when they include mentorship programs in the employee recruitment process (Gorrell & Hoover, 2009). Having senior managers and experienced executives develop relationships with employees who are just joining the firm at middle-level management levels, or subordinate employee levels help the firm to cultivate a close-knit relationship. Moreover, using rotational assignments, firms can ensure that high-potential employees receive enough exposure to different roles available in the organization. As they change roles, the overseers will also notice any compatibility with particular roles that the employees exhibit.
Talent programs can exist beyond the organization. For example, a partnership with a training institution can provide benefits to both the training facility and the organization to refine the existing talent and provide new talent that meets the needs of the employer. Nevertheless, additional factors must be considered for symbiotic relationships involving higher education institutions and commercial training firms to succeed.
First, companies must retain the power to identify key talent and retain it. After training and development, companies need to utilize the skills of their talent. An excellent way of achieving this is by ensuring that employees are engaged and satisfied. Companies have to look at issues, such as work-life balance, then address employee concerns beyond the wage compensation issues. Also, it is the company’s task to find work that satisfies employees and to align that work with the most critical talent in the organization. Secondly, firms need well designed career-pathing programs.
When designing a career path from scratch, organizations will best be served if they follow the steps given below. First, they have to create a career roadmap. A career map shows the prototype career that an employee would follow. It includes sequential positions, roles, and stages. The organization can use a diagram so that it is easy to visualize where an employee will be at different progress points. Additional details to make the process successful include the number of employees that a particular job role may accommodate and the minimum threshold for the company’s survival. The second step in the career path design is building position profiles. It entails deciding which qualifications best define a given job position. The profiles can include industry recommendations and firm-specific needs for a role. The third step involves the incorporation of training and development. Linking career paths to employee development through the prioritization of position profile characteristics is a major condition for step four. Many firms unknowingly embrace the fourth step in career path building when they provide developmental opportunities for talent. The fifth step in the career path design is to establish accountability. Firms and employees need to be responsible for the actions that are critical to the firm’s performance. The organization must provide checks and balances to make sure the goals of the talent management program are achieved; more so, the career path design.
Beyond talent identification and career paths, organizations must also question the motivations of talent. Leaders must inquire and find out where employees want to go in their career, and then look for ways that they can be of use to the organization. On its part, the organization has to consider its opportunities for improving the work-life balance for its employees and offering any work experience and training that its employees would need. Success comes when employers can align the interests of individual employees with the interests of the entire organization. As a result, employee engagement and performance enhancement are improved.
A splendid strategy to use in organizations is talent mapping. This is a formalized process of ensuring that the talent on hand and the future talent are known. Most importantly, firms must realize that the process of creating a comprehensive and value-generating talent function does not appear immediately (Chang & Chen, 2011). Salient opportunities appear only when talent, strategy, and operations planning are knotted. Rather than pick talent when most needed, organizations need to rely on a formula that allows them to start with the areas that are most crucial to organizational performance and then address the fundamental factors in this section. The process can move on to less important areas. However, firms should not neglect talent altogether when they set up an appropriate system.
An organization can enhance its ability to gain from the process by incorporating the six pillars of talent management as explained below (Jackson, Schuler, & Werner, 2012). This can be done by designing and introducing talent management programs that are based on the factors and concerns that this second part of the paper raises and the concepts discussed so far. An effective plan for talent management needs structure, method, and measures, all incorporated into one framework. With the appropriate framework, any organization will be able to find talent actions and solutions that meet its strategic needs (Baqutayan, 2014). The six talent pillars provide the required structure, method, and measure. The pillars are reward and recognition, business strategy alignment, organizational design, talent resourcing, learning and development, and organisational performance.
Before applying the six pillars, organizations must embrace their uniqueness and use leadership as the mechanisms to hold the pillars together, according to a building analogy. Talent is a determinant of strategy, which has already been mentioned earlier in this paper. Therefore, employees are in charge of executing business strategy. The second pillar, organisational design, deals with the processes that prevail in the business, which canvas its structure and chain of command. They include the quality systems and financial mechanisms employed by the business to achieve success. They affect decisions, collaboration endeavours, customer service delivery, employee commitment, and talent satisfaction (Jackson, 2012).
Talent resourcing is all about meeting the current and foreseen need employee needs (Hatum, 2010). An organization will achieve talent resourcing by making talent identification a part of its daily business practice (Dimba, 2010). Learning and development, which is another pillar of the talent management framework, allow firms to improve the output of individual employees. It requires the organization to consider evolving needs and challenges that it encounters and create ways to make sure talent can cope with them (Davis, 2007). Organizational performance goes beyond performance reviews and looks at the culture of the business and the traditions followed by the managers and employees in keeping commitments, respecting others, and obeying appropriate codes of conduct (Kehinde, 2012). Finally, attracting excellent talent and retaining talent is tied to rewarding and recognizing the efforts of the employees. The organisation must strive to become an enviable employer by finding the right employee compensation and recognition stimuli and incorporating them into its human resource policy.
Conclusion
Organizations have to embrace the fact that people can be crucial business differentiators. When designed and introduced correctly, talent management systems can attract, retain, and develop employees, such that they gain most from the organization and the organization achieves salient competencies for realizing its corporate goals. Part two of this paper sought to deduce the factors that organizations have to consider when dealing with design and introduction aspects of talent management. The section first provided an overview of talent management and then proceeded to describe the tools that are needed for managing talent. In describing the tools, the section also highlighted the factors that affect talent management programs and validated the use of the prescribed tools. Having offered a background understanding of talent management program constitutes organization challenges and how they interact with the suitability of the programs, the section ended with a description of the six pillars of talent management as a framework for summarizing the factors worth considering.
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