HRM & Strategy
HRM & Strategy
HRM & Strategy
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TABLE OF CONTENTS
Founded in the year 1998, Google has been ranked among the top most organizations to work
for in the past decade. Google is one of the few technology companies which continue to
have one of the fastest growth rates in the world. It began by creating a search engine that
combined PageRank system, developed by Larry Page (ranking the importance of websites
based on external links), and Web search engine, created by Sergey Brin (accessing a website
and recording its content), two co-founders of the company (Jarvis, 2011; Downes, 2007).
Google’s achievements absolutely do not come from any luck. Google has made extra efforts
in creating an index of a number of websites, which have been up to 25 billion websites. This
also includes 17 million images and one billion messages to Usenet group (Downes, 2007).
Besides searching for websites, Google users are able to search for PDF files, PostScript,
documents, as well as Microsoft, Lotus, PowerPoint and Shockwave files. Google processes
nearly 50% of search queries all over the world. Moreover, it is the number one search option
for web users and is one of the top five websites on the Internet, which have more than 380
million users and 28 billion visits every month, and more than 50% of access from countries
The policies and rules of the company are known to be employee centric and have
been formulated to provide the maximum number of perks and benefits to its employees. The
company has evolved over time and so has its Human Resource Department that focuses on
the growth of the employees while the company is reaching new heights each quarter. The
company has offices in 14 states and 36 countries across the globe. Some of these include
India, China, Australia, Israel, United Arab Emirates and Turkey etc. Its headquarters is
located in California with the largest number of infrastructure benefits to the employees that
the world has ever seen. Today it can be said that the success of the company owes to its high
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quality human resources (Lombardo, 2015). In fact, one of the co-founders of the company
believed that for Google, people are the core to its operation and success (Matsangou, 2015).
committed and capable workforce, using an integrated array of cultural, structural and
personnel techniques”; while Byars and Rue (2004) see HRM as “activities designed to
provide for and coordinate the human resources of an organization”. Adding to this,
Armstrong (2016) states that it is the “strategic and coherent approach to the management of
an organization’s most valued assets which are the people working there, who individually
and collectively contribute to the achievements of its objectives”. However, the four key
ii. Flexibility: Employees are expected to adapt willingly to change within the
iii. Quality: High levels performance attainment of organization depends on the quality of
iv. Integration: It involves the matching of human resources strategies to the needs of the
business strategy.
(Guest, 2011)
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2.0 LITERATURE REVIEW
align human resources practices to business strategy (Wright & McMahan, 1992). By a
resource (HR) policies and practices to be linked with the strategic objectives of the
organization. Wright and Nishii (2007) defined strategic management as the set of managerial
decisions and actions that determines the long-run performance of a corporation. Becker and
Huselid (2006) take a similar view when they define strategy as an action a company takes to
that requires a constant adjustment of three major interdependent poles namely the values of
Strategic human resource management (SHRM) theory centers on a basic premise that
research supports the hypothesized link between HR practices (and the total HR system) and
practices and the HR system as a whole (Gerhart, 2007; Wright et. al., 2005). SHRM theory
uses the concept of HR alignment as the bridge between HR practices (and the HR system)
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2.2 Aligning HRM and Strategy
There is a growing realisation among organisations to align its Human resource practices
with corporate strategies to meet the needs of its business in order to gain strategic advantage
from its human resources. Human resource management is significantly aligned to strategic
human resource management and is one of the fundamental policy objectives to ensure that
human resources policies and practices are applied by managers as part of their everyday
work. Ehlers and Lazenby (2007) maintain that successful strategy implementation can be
achieved if resources are allocated in a manner that supports the organisations long- and
More importantly, Ehlers and Lazenby (2007) argue that the knowledge era is
important for strategy implementation in that employees are allocated the most important task
in implementing the strategy. Organisations can no longer generate profits without the ideas,
skills, and talent of knowledgeable workers. Technologies, factories, natural resources, and
capital are no longer difficult to obtain and are increasingly less important in developing and
sustaining a competitive advantage for the organisation. While capital is becoming less
scarce, the opposite may be said of talent and skills, especially in developed countries.
This approach, emphasising human resource management, echoes Nel et. al.’s (2008)
comment on human resource practices, which emphasises that human resource practices may
be successful if they are aligned with the strategic objective of the business, make business
sense, and are focused on business operations. Nel et al. (2008) concludes that the strategic
partner role focuses on aligning HR strategies (including policies and procedures) with the
business strategies and the execution thereof. Armstrong (2006) is of the opinion that the
distinction between strategic human resource management and human resource management
accordance with the plans of the organisation concerning the future direction it wants to take.
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As a result of this process, a stream of decisions over time emerges to form the pattern
adopted by the organisation for managing its human resource to identify areas in which
Because the world has become a global marketplace, the focus nowadays lies on
relationship, maintaining that staff is the major reason for the success of an organisation. The
human resource of an organisation represent one of its largest investments, illustrating that
employees should be supported in reaching their full potential and thus enjoy sound quality of
There are two types of human resource alignment that are thought necessary for
strategic impact, namely, vertical alignment and horizontal alignment (Delery, 1998; Gerhart,
2007; Wright & Snell, 1998). These have also been referred to as external fit and internal fit,
respectively. Numerous general definitions of vertical and horizontal alignment have been
advanced (e.g., Delery, 1998; Gerhart, 2007; Huselid, Becker, & Beatty, 2005; Wright &
Snell, 1998). Vertical alignment represents the degree to which HR practices (and the
practices on the other hand is the degree to which the practices work together in a mutually
system with a strategic impact that is greater than the sum of the individual HR practice
impacts.
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3.0 BUSINESS STRATEGY & HRM ALIGNMENT
HR Planning
Figure 1.1
Figure 1.1 outlines the four processes that are necessary in order for Google Inc. to achieve
connection between its strategy and HRM practices. This process indicates the integration of
strategy and the HRM strategy and policies to enable synergy between these two components
of management. Each of the steps involved in this process will be discussed in detailed
below.
The first step which is necessary in achieving synergy between business strategy and HRM is
the process of determining the organization’s business strategy. Business strategy emphasizes
how it intends to succeed in its chosen market place. It mainly focuses on competitive
advantage. Business strategy helps to establish the direction in which the organization is
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going in relation to its environment (Boxall & Purcell, 2003). The business strategy of an
organization must reflect the intentions of managers about what they expect to achieve over a
stated period of time. Business strategy is therefore, about beating competitors in meeting
customers’ needs by taking into account the changing needs and critical resources needed to
carry out the strategic aims. Thus, organizations must unavoidably make choices about how
Business plans are prepared to work on three to five years cycle and annual business
plans are formed within this. These plans consist of strategies like innovation, cost reduction,
quality leadership, cost leadership, value added, customer focus, growth through acquisition,
joint venturing etc. Business strategy answers three basic questions which are: what (vision,
mission, goals), how (organization design, functional strategies, resource and cost allocation,
In ensuring that there exists a connection between the business strategy and HRM
practices in an organization, the corporate strategy should set the agenda for human resource
i. Mission
This concerns setting the future of the organisation. What will the organisation
be like, serving which purposes and to what extent? This will provide some
indicators on the quantity and quality of staff that will be required to effectively
transform the functioning of the organisation to that level. This will form the
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ii. Organisational culture
organisation’s culture develops itself over a long time. Handy (1993) describes
an organisation culture as deep seated beliefs, values, norms, attitudes about the
The process of human resource acquisition will depend on business strategy. For
example, if new production lines are to be installed in three years’ time, there is
no doubt that new skills will be required. Plans have to be made including
training and recruitment so that there are qualified staffs of the right size to
manage the new production line. The same will apply to service provision
The relationship between the employee and the management as well as the
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grievance and disputes that could become very costly to the organisation. Such
The business strategy of Google is reflected in its mission statement which is “To make the
world’s information universally accessible and useful”. This statement showcases Google as
a resource for research and miscellaneous activities. There is no timeline but an end result. Its
broadness offers a lot of flexibility in how Google organizes information. Google’s business
To push existing technology’s limits to offer an accurate, fast, and user friendly
To have ads accessible on the mobile platform among other hardware appliances
From its mission statement and objectives, it is evident that Google’s primary
product differentiation through innovation. Google sets itself apart from competitors through
the uniqueness of its products. This uniqueness is achieved because Google is a highly
innovative company. The increasing variety of its products, inclusive of Google Search,
Google Fiber and Google Glass, is a manifestation of this innovation under the differentiation
generic strategy. The Google Search algorithm also evolves over time to ensure competitive
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advantage against Yahoo! and Bing, among others. The generic strategy of differentiation
means that Google must maintain its competitive advantage based on uniqueness. It is of
critical importance for the firm to continue innovating. A corresponding strategic objective is
to develop new products or continue improving existing products to maintain its competitive
Human resource strategies seek to manage the human resource in order to achieve the
organizational goals. It focuses on what the organization intends to do in relation to its human
resource policies and practices. Hence, the way human resource is deployed, motivated,
managed and retained will impact upon the business strategy implementation at Google.
Human resource strategy serves human resource professionals who want to add value to their
business. These are devised in respect of recruitment, employee deployment, and engagement
by considering the mission and objectives of organizations (Dessler, 2005). By doing this
organizations put itself in the position of being able to achieve its goals through its human
resources. Human resource strategies play an implementation role and are valuable means of
obtaining path, uniformity and consistency in human resources efforts. The process of linking
human resource strategies with business strategies serves investors, customers and employees
of the organization who want the business to deliver results (Sluijs & Klyutmans, 1994).
Thus, the main focus of human resource strategy at Google must be one that serves to
have operational linkages to fit human resource management with the strategic thrust of the
organization. Interaction between business strategy and human resource strategy of Google
also need to particularly take care of uncontrollable factors which exist in external
resource professionals should try to minimize their adverse impact during implementation
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process of strategies. External environmental factors could be controlled or minimized with
the help of leadership and direction provided by departmental managers, training and
instructions given to employees, key implementation tasks and activities which must be
defined with enough details, and information systems used for monitoring the process of
implementation which also should be adequate enough (Baird & Meshoulam, 1988). An
Economic instability may threaten Google’s overall operation and this is evident in the case
of credit crunch. The credit crunch has generally slowed down the demand for gadgets.
According to Times Online (2008) Google's fellow residents of Silicon Valley have been
badly hit by the credit crunch. With consumer spending down, so, too, are sales of gadgets.
And, with the cost of credit so high, companies are cutting back as far as they can on IT
spending.
achieve successful interaction between Google’s business strategy and human resource
strategy, human resource professionals need to consider the lifecycle stages of the
organization and each stage to be linked with human resource strategies such as: starting
phase needs to attract the best technical and professional talent with attractive compensation.
Human resource professionals in this phase need to define future skill requirements and
design career ladder map for their employees. Organizations in starting phase need to set
basic employee relations philosophies as well; growing phase needs to recruit adequate
number of employees with multi-skills so as to build up talent pool. In this stage organization
has to meet external market status and need to provide compensation and benefits to their
employees according to that. In this stage professionals need to mould an effective employee
training and development programme as well; maturity phase needs to encourage sufficient
turnover to minimise redundancies and provide new openings along with mobility of
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employees by shifting of jobs. In this phase organization needs to control compensation
structure and control labour costs with improved productivity; and decline phase needs to
plan and implement redundancies and reallocations with tight cost control measures. In this
phase employees need to be retrained and career counselling need to be provided (Wright &
McMahan, 1992).
Google is currently in the growth stage of the industry life cycle. Google has been
able to maintain a period of rapid growth since the search engine took off in the 1990’s. The
slow internet connections of the 1990’s helped Google to attract customers due to the faster
load time of the site. The search engine was able to retain customers as well as draw in new
customers because the search engine was simple, provided better results, and loaded faster
than competitor’s search engines (Weber, 2007). Considering that Google is currently in the
growth stage of its organizational life cycle, its human resource strategy therefore needs to
focus on the way to attract more talented and knowledgeable talents to be part of its human
resource to ensure innovation within the company. Google has been able to maintain rapid
growth over such a long period of time because they are driven by innovation. That being
said, in order to ensure that Google’s strategy of pioneering innovation within the IT sector
can be achieved, its human resource strategy therefore must be one that will be able to outline
the specific policies, actions, and objectives of the human resource management of the
company in order to recruit and retain high quality people with innovative skills and a good
track record in innovation. The human resource strategy of Google also must be one that will
be able to develop the strategic capability of the company while providing encouragement
and facilities for enhancing innovative skills and intellectual capital within the organization.
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3.3 Human resource planning
Developing and implementing human resource strategy ensures that actions in managing
human resource are aligned with competitive demands which need to be reflected in the
strategic planning. The integration between business strategy and human resource strategy
and planning is very closely linked. As organization’s human resources are utilized more
Through planning, organizations prepare to match resources with the requirements needed for
environmental scanning and an interface with strategic planning, forecasting human resource
demand and inventory, examining external supplies of labour, and developing plans to deal
with shortage and surplus of manpower (Garavan, 2007). Human resource planning signals
the need for change and serves to guide the activities within human resource management
towards better compatibility with the business. For an example, one of the ways in which
recruiting can be more strongly linked to business strategy is to focus on those sources that
provide the greatest number of desirable employees. Thus, this would require human resource
executives to be able to forecast the future availability of manpower having knowledge. This
is how human resource planning will help to create a connection between the strategy and
human resource management. In addition, human resource planning requires human resource
professionals to communicate with other managers, senior executives and staff members
about the future human resource environment and other associated staffing issues. This will
help to have complete integration of every business strategy with human resource strategy.
It is important for Google’s human resource policies and practices to achieve two
types of fit which are external and internal. External alignment focuses on the association
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between Google’s business objectives and its major human resource initiatives. As mentioned
before, the main strategy underlying Google’s business is innovation. In the sense where the
organization stresses on innovation and new product development, then human resource
practices of the organization need to be more aligned with a view to promote creativity and
flexibility. This is the case for Google. Apart from external alignment, managers at Google
also need to ensure that their human resource practices are aligned with each other internally.
The entire range of human resource practices from job design, staffing, training, performance
appraisal and compensation need to be aligned. For this human resource departments need to
be organized so that it could play a role in the strategic planning for the organization. Human
resource departments need to become interdependent with the rest of the organization and
The recruitment and selection process arises directly from the human resource
strategic planning and ends once the new recruit has accepted the job offer. The process is
also linked very closely with both the induction and probation processes. Thus, to respond to
with the best practices and complied with all legislation. To place the right candidates at the
divisional levels, it is essential for Google to involve managers in planning for recruitment
and selection as they are well aware of job specifications and competencies.
Google’s human resource professionals need to ensure that human assets are
effectively trained not just to do specific jobs, but also to have a clear understanding of the
opportunities for personal and professional growth (Norton, 2001). This will allow achieving
high productivity, job satisfaction and enhanced career development opportunities for
workers. The performance targets set for employees need to be agreed jointly between
employees and their respective managers. The enhanced contribution of employees to achieve
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organizational goals and objectives could be best achieved through role clarity. Appropriate
goals. It would be mentor’s responsibility to bring out the talent within the individual and to
strategy and its human resource management, the board level management must regard
human resource as an important contributor towards achieving the business strategy. Senior
management’s support need to be ongoing and visible towards human resource departments.
The active leadership from top management is considered to be a critical source to maximize
the returns from human resource. A visible involvement of senior management sends
message to other employees that top levels are committed to strategy and strategic objectives.
Alignment of human resource strategy and business strategy required not only occasional
(Frangos, 2002). Board level involvement in the process of alignment would ensure
sensitivity to issues and help to minimize potential resistance to share mutual information.
The extent to which Google’s human resource functions are involved in both
organizational and human resource strategy development would be dependent on whether the
most senior human resource person was a member of the board of directors or not. But at the
same time the board membership of human resource professionals would not guarantee the
involvement of specialists in strategy as it is not necessary that they would act as active
members. Perhaps, that is why currently attention has been paid by organizations to assess the
percentage of human resource directors and professionals as policy makers. Aligning board
level challenges and human resource goals at Google will provide great opportunities for
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human resource professionals to put their hands into it. This would transform human resource
The designing and deployment of business strategies at Google are traditionally done
by top managerial people within the organization and human resource managers act as
champions for human resource excellence. Human resource managers are tasked with the
primary responsibility of leading and strategizing to support business strategies. That being
said, it is therefore important for human resource professionals at Google to become strategic
partners who focus on strategy and processes of an organization. As leaders human resource
managers need to be visionaries and a relists. For instance professionals might forecast
human resource needs and labour supplies, both within and outside the organization and side
by side integrate these with the organization’s capacity to perform effectively over a period of
time. It is essential that human resource practices to have the potential to make a difference to
Human resource professionals remain under dilemma about their roles that they need
to play and, thus, they need to realize how significant their role is. It is therefore important for
the human resource professionals at Google to have clarity regarding the following:
The mission statement defines what the business is and what makes it unique and who
the competitors are. From this a list of objectives, stating specific terms to be achieved
and where the organization hopes to be at some point in future are derived. Here,
human resource professionals need to offer their ideas and assist management in the
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ii. Analysis of internal and external factors operating in the business environment
This includes the strengths and weaknesses, as well as opportunities and threats. Here,
human resource professionals can assist and provide facts and figures about the labour
market;
Human resource professionals need to anticipate alternatives and evaluate its impact
Human resource department must keep ready access to key information and within
and with what resources (Norton, 1991). When there is a clear direction helping
human resource professionals to see how they are contributing to the whole, it can
4.0 CONCLUSION
Aligning HR and strategic plans is an important endeavour for every organization. Studies
strongly support the alignment between strategies, HR, and performance and thus show the
competitive advantage (Wright & McMahan, 1992). Alignment between HR activities and
function and focus more on how it can support the organization in strategic planning and
increase its creditability and be integrated into a strategic role. When HR measures itself
from a business perspective and by the value it brings an organization, top management will
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not ignore HR in the strategy process. Instead, top management will welcome HR input
because it will have a clear standpoint. By inter-locking HR measures with items concerning
the ongoing business, HR becomes aligned with strategy through dependent tasks that are
effectiveness of strategic plans, and its implementation. In its purest form, HR is best suited
for leveraging an organization’s personal that implements the organization’s strategic plans.
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