Strategic Human resource development
Strategic Human Resource Development (SHRD) is a proactive system-wide intervention that is associated with cultural change and strategic planning (McCracken, & Wallace, 2000a). In addition, as part of strategic planning, the term SHRD entails the strategic management of training and development and it is applied to achieve the objectives of an organization. Additionally, McCracken and Wallace (2000b) pointed out that SHRD is mostly used in training and development literature. Garavan (2007) defined SHRD as a “coherent, vertically aligned and horizontally integrated set of learning and development activities which contribute to the achievement of strategic goals” (p. 25). Thus, SFRD is related to the long-run development of human resources in a certain organization. Additionally, SHRD places emphasizes on learning in order to enhance performance among human capital and the organization as well. Walton (1999) stated that “SHRD involves introducing, eliminating, modifying, directing and guiding processes and responsibilities in such a way that all individuals and teams are equipped with the skills, knowledge, and competencies that require to undertake current and future tasks required by the organisation” (p.). Moreover, SHRD is used to imply the proactive and planned learning and development of persons as groups and individuals in order to benefit themselves and the business as well.
There are a number of theoretical perspectives that are related to SHRD, but the common ones are the human capital theory, a behavioural perspective, and the resource-based theory. The two theories that can be applied to understand the contribution of SHRD to both organizations and individuals are human capital theory and resource-based theory. According to the Human capital theory, investment in education, experience, and training brings significant wages as well as job benefits to individuals (Garavan et al., 2001). For example, a company like Apple Inc. has invested in human capital and this has improved the skills and knowledge of the employees, hence increased profits. On the other hand, the resource-based perspective contributes to organizational performance because a company is able to differentiate itself from other competitors (Festing & Eidems, 2011).
The concept of SHRD is applied in organizations from a strategic point of view with the aim of ensuring that introduce, eliminate, modify, direct, and guide processes and responsibilities in such a manner that all the teams and persons with skills, competencies, and knowledge required ensuring that present and future tasks are executed. In reference to Woolworths, SHRD is implemented through human resource programs that ensure that human capital is trained and developed to equip them with the necessary skills and competencies required to promote productivity. For instance, according to the company’s 2016 annual report, the vision for its people is a “modern, compelling, unique, personalised, connected employment experience underpinned by an employment value proposition that attracts, inspires, engages, develops, rewards and retains the right, diverse leadership, and talent to deliver our strategy” (Woolworths Holdings Limited, 2016, p. 27). Based on this, the organization employs SHRD to amalgamate various knowledge elements, and join new and preceding knowledge to ensure the success of the company (Davenport, Prusak & Wilson, 2003). This can be related to the human capital theory and resource-based theory which are applied with the aim of benefiting an organization. Subsequently, the company has been able to create a competitive advantage through its people. Subsequently, the SHRD practice has been helpful in attracting, retaining, and developing of skilled, competent, and knowledgeable employees (Woolworths Holdings Limited, 2016).
Apple Inc. has also enacted SHRD as part of its human capital and development. For example, Apple has excellent human training programs enacted to ensure that competent and skilled employees are part of the organization (McCracken & Wallace, 2000b). Moreover, in Apple’s case, HR strategies and job design are founded on Steve Jobs’ emphasis on excellence in order to promote continued support for industry leadership. In this view, SHRD has been used to create a competitive advantage over its competitors, thus, making the company a market leader (Davenport, Prusak & Wilson, 2003). Human capital theory is applicable to enhance core competencies that are grounded in human capabilities. The skills have been developed over time among the employees in Apple Inc. to link its capabilities. Prahalad and Hamel (1990) analysed the competitiveness of organizations and established that having core competencies which are skills allows it to be competitive.
Having an SHRD implemented could result in an increased profit and revenues. For example, Apple Inc. has developed a culture of innovation and learning. The learning culture within Apple Inc. is based on the work-out philosophy and it is used to improve productivity. Through the use of the SHRD, Apple is able to make profits because human resources and capital are allocated in an appropriate manner. Apple Inc. has placed emphasis on the development of skills and competencies of HRD professionals. Apple Inc. places a strong emphasis on the development of the skills of HRD professionals (Schuler & Jackson, 2014). Therefore, the use of effective training programs plays a major role in developing HRD professionals’ skills. Mallin and Finkle (2011) noted that for a company such as Apple to be successful, it has invested highly in product portfolio analysis to help determine if its resources must be reallocated and applied to ensure the maximum profitability of the company. Additionally, Brandt (2011) pointed out resource utilization comprises planning, management, and deployment of the right people skills. For instance, the HRM of Apple strategically incorporates sales with its resource management system this provides the required information as well as confidence to bid and work on its new projects. Strategic HR planning is a significant element of strategic HR management.
The primary objective of any company is to be competitive, remain profitable, promote long-term viability, and, use the unique resources available, including employees. Apple Inc. is unique in the manner in which it operates its business and its profitability can be attributed to having skilled and competent employees (McCracken, & Wallace, 2000a; McCracken, & Wallace, 2000b). The SHRD is incorporated internally and externally in Apple’s Inc business objective to promote training and development activities as part of ensuring that human resources are skillful, interested, and motivated. Organizational effectiveness influences SHRD, and this has helped the company in promoting its profitability.
Woolworth Ltd has been using SHRD in its organizations as part of enhancing its operations. The company 2015 spent R117.7m on employee training; while $3.3m was spent on David Jones spend on employee training (Woolworths Holdings Limited, 2016). Following the training and development, the company has been able to “attract, develop and retain leaders to create a high performance, values-based, connected and employment experience by delivering a compelling employment brand” (Woolworths Holdings Limited, 2016, p. 26). In spite of the implementation and use of the SHRD strategy in Woolworths Holdings Limited, the company has been facing some problems which resulted in administrative bankruptcy. For example, in 2009, 300,000 people lost their jobs in the UK when it closed its operations. The company failed because it was making losses because of bad decisions related to expansion and operations in the UK. The administration led to bankruptcy because the advisers of the company also became the administrators and this culminated in a conflict of interests (Hall, 2009). Top management support is the most important to facilitating conditions required for making profits (McCracken and Wallace, 2000). According to Garavan, Hogan, and CahirO’Donnell (2003) executives should allocate valuable resources required to sustain resources, especially during periods of economic downturn. Contrary, the company failed to use SHRD to provide a clear vision and to commit the resources required to ensure Woolworths Holdings Limited UK was successful.
SHRD is perceived as both responding to business strategy and it can be used to shape the business strategy. McCracken and Wallace (2000a) envisaged that SHRD is made up of various characteristics that depend on the maturity levels of HRD in the organization. For instance, the Prescriptive models are open to criticism given that they assume that SHRD has an endpoint and that SHRD is an emergent process. The Garavan (2007) model is made on the supposition that SHRD operates within a context that is dynamic. The model of SHRD is founded on four different levels such as the global environment, local factors, national factors, and the multinational dimensions. This can be explained through the use of the General Electric (GE) case study. For instance, GE has placed strong emphasis on the SHRD which is used to build a strong culture of innovation and learning. Basically, the culture was driven by the former chief officer Jack Welch. Its work philosophy for instance is based on engendering self-confidence, promoting challenge and simplicity to systems, and the use of working practices that promote speed of responsiveness. Through these strategies, the company has been in a position to develop the skills of HRD professionals. The implementation of SHRD has failed in Woolworth and succeeded in Apple Inc. For example, in Woolworths, it resulted to making losses, closure of operations in the UK, and employment layoffs. This is because the company failed to effectively use the Garavan (2007) model.
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