Functional Strategies
In the previous section, we discussed the impact of business strategies on human resource management (HRM). In this section, we will delve deeper into the concept of functional strategies and how they influence HRM practices within an organisation.
Understanding Functional Strategies
Functional strategies refer to the specific plans and actions taken by different functional areas within an organisation to achieve the overall business objectives. These functional areas include marketing, finance, operations, and, of course, human resources. Each functional area develops its own strategies based on its unique goals and responsibilities.
Functional strategies are closely linked to business strategies, as they are designed to support and align with the overall direction and goals of the organisation. The HRM function plays a crucial role in developing and implementing functional strategies related to human capital management.
The Impact of Functional Strategies on HRM
Functional strategies have a significant impact on HRM practices, as they shape the way organisations manage their human resources to achieve their objectives. Let’s explore some key ways in which functional strategies influence HRM:
- Workforce Planning
Functional strategies help HRM in determining the type and number of employees required to meet the organisation’s goals. For example, if the marketing department plans to launch a new product line, HRM needs to ensure that the organisation has enough skilled sales personnel to support the marketing efforts.
- Recruitment and Selection
Functional strategies guide HRM in identifying the specific skills and competencies needed for different functional areas. This information helps HRM in designing effective recruitment and selection processes to attract and hire the right talent. For instance, if the finance department plans to expand its operations internationally, HRM may focus on recruiting individuals with global financial expertise.
- Training and Development
Functional strategies determine the training and development needs of employees in different functional areas. HRM plays a vital role in identifying these needs and designing relevant training programs. For example, if the operations department plans to implement new technology, HRM may organise training sessions to ensure employees are equipped with the necessary skills to work with the new systems.
- Performance Management
Functional strategies provide the basis for establishing performance goals and expectations for employees in different functional areas. HRM uses this information to develop performance management systems and processes. For instance, if the marketing department aims to increase brand awareness, HRM may set key performance indicators related to market share and customer engagement.
- Compensation and Rewards
Functional strategies influence HRM in determining the compensation and rewards structure for employees. HRM ensures that the compensation plans align with the goals and objectives of different functional areas. For example, if the sales department aims to achieve aggressive revenue targets, HRM may design a commission-based incentive scheme to motivate and reward sales personnel.
Examples
Let’s look at some real-life examples to better understand the impact of functional strategies on HRM:
Example 1: A retail company wants to expand its online sales channel as part of its business strategy. The functional strategy developed by the marketing department includes creating engaging online content and implementing digital marketing campaigns. HRM supports this strategy by hiring digital marketing specialists and providing them with training on the latest digital marketing tools and techniques.
Example 2: A manufacturing company decides to adopt lean production techniques to improve operational efficiency. The functional strategy developed by the operations department includes implementing lean manufacturing principles and reducing waste in production processes. HRM supports this strategy by training employees on lean manufacturing principles and encouraging them to actively participate in process improvement initiatives.
Conclusion
Functional strategies play a crucial role in shaping HRM practices within an organisation. They guide HRM in areas such as workforce planning, recruitment and selection, training and development, performance management, and compensation and rewards. Understanding the impact of functional strategies on HRM is essential for HR professionals to effectively align their practices with the overall goals and objectives of the organisation.