HR Strategy Development for a Small Company

by Jason Shaw

Table of Contents

  • Introduction
  • HR Strategy Content
  • HR Strategy Process Issues
  • HR Strategy Implementation
  • Employee Resourcing (ER)
  • Human Resource Development (HRD)
  • Performance and Rewards
  • Employee Relation
  • Conclusion
  • References


Yorklab is a small unit of manufacturing company which deals with glassware. The company provides assistance to other companies such as the pharmaceutical, medical research and other sectors. It follows a simple management style to accomplish the commitment regarding quality material. The objective of the company is to produce high quality product rapidly and efficiently and to ascertain quality product and service to the customers. In this regard, the organisation tries to follow a developed Human Resources (HR) strategy for the employees to work efficiently and produce quality products. The business aims to maintain its clients by maintaining the prompt distribution of merchandise, which in turn helps the company to assess its growth over the year. Yorklab embraces a flat hierarchical framework that guarantees a broad control period for less management layers. The arrangement encourages the business to be less profitable, with fewer layers of management. This arrangement would mean the actions inside the company flow smoother and easily. In addition, the communication of management messages would be simple and transparent, guaranteeing a timely and reliable product. This system enables the organisation to maintain a careful account of the profits and the resources rendered. The company’s HR strategy allows it possible to hire employees who have experience of the procedure who are cooperative and eager for collaboration. The main motive of the corporation is to please the client and this is the key explanation behind the organization’s existence for years. The firm wants to extend its market into different segments of the industry. In this case, management recognizes that demand development would not be sufficient to support the new HR framework or management structure. The definition of HRM used is to link the personnel and the management to accomplish the company’s aim. This includes arranging, overseeing and coordinating the workforce to bring value to their operation and accomplish the required targets. In this regard, the aim of the paper is to address the successful structural requirements of the business in order to alleviate the problem of market expansion. In order to generate benefit and success in the sector, the upgraded HR strategies must be applied by Yorklab.

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HR Strategy Content

Management of human capital is a systematic approach to the management of jobs and partnerships to gain competitive advantage. A company’s competitiveness relies on the manager, personnel and the expertise and preparation offered. In this respect, Yorklab adopted the flat management system with a few workers and a large span of influence. There were various benefits to this structure, such as the swift exchange of knowledge and the fast decision to change the procedure. Yorklab is often benefited by smaller management strata to provide stronger recurring contact between the higher level of authority and the workers. The company’s goal is to grow its market, taking into consideration the efficiency and degree of consumer satisfaction. With the latest flat HR approach used by the organization, this was not necessary. There was no adequate cooperation as the degree of direction and coordination between the management and the workers was lower. The current number of workers will not be adequate for the organization to grow its market. The complications would rise with the increase in company activity and the existing flat layout would not support the demand. The flat solution with a broader control period requires less time to rely on specific choices. This may therefore be a huge drawback in making crucial business choices that would have a long-term influence on Yorklab (Education-Portal, 2013). This is because the management would get lesser time on determining the best strategy to expand the business and make it a profitable venture. Furthermore, the promotion opportunity in Yorklab was less which would restrict the employees from being motivated and perform. Moreover, a large number of experienced superior would be required for expansion which was not possible with the current HR strategy. The implementation of the strategic human resource management was to adopt a user-friendly structure in relevance to the environmental factors of the company. Therefore, to expand the business and manage the people in an efficient manner the company would require a new HR strategy. The challenge of the management of Yorklab is to strategize a policy which would aid in determining the cost efficiency of the labour, managerial power and human resource. Yorklab should implement the strategy with its sustaining policies and processes, which is developed to and applied for managing the people of the organisation to their optimum (Armstrong, 2009).

The people in Yorklab need to be managed with proper co-ordination between the management and the employees. Correspondingly, the Strategic Human Resource Management (SHRM) practices facilitate to enhance the productivity of the employees to achieve their mission and goals. In order to understand the real scenario of Yorklab, the strategic human management concept can be implemented, which includes understanding the vision or goals of the company and its current situation. Analysing the internal and external environment to comprehend the key issues with regard to employee resourcing and the management approach would play a vital role. This analysis is done to understand the strengths and weaknesses as in the case of Yorklab, a major weakness was the lack of motivation among the employees. The next step is the strategic formulation involves the assessment of the management to meet the goals. The choice of the strategy and decision making process renders an insight regarding the relation between the management and the employees. In case of Yorklab, the management approach was strict and maintained distance hence the decision were not favouring the employees. The strategic implementation stage signifies the incorporation of effective leadership style in order to control the organizational and the human resources. The final step is to evaluate the strategy implemented to determine the actual changes in the company such as Yorklab in order to achieve the profit level (Bratton, n.d.). The strategic human resource management steps can be determined by using the following pictorial diagram:

HR Strategy Development for a Small Company

Fig. The Strategic Management Model Source: (Bratton, n.d.)

In this context, the management needs to follow a proper leadership style which would support the employees to perform better in a proper co-ordinated manner. A manager with the transformational style is a true leader, as he/she inspires the team to improve and shares the vision of the company to motivate the employees (Northouse, 2012). The managers spend a lot of time with the employees in communicating as well as to increase the coordination and procure better result. Moreover, the employees in Yorklab need to be motivated and enhance productivity with high visibility. The employees are highly knowledgeable and friendly, thus the manager with proper enthusiasm would support in delivering quality and proper customer satisfaction. Expansion, quality assurance and profit making with better performance are possible by Yorklab with proper implementation of HR strategy. The HR philosophy is used to reflect the fundamental approach through which the management relates the competitive market with the employees. Yorklab requires following prudent HR philosophy so that people pertain to fair and beneficial business practices towards the workers. Yorklab faces certain barriers and issues regarding motivated, loyal and free-spirited workforce and thus the HR policy needs to be implemented. The transformational leadership style used by management can be beneficial as it would create enthusiasm and would motivate the employees to perform better and increase productivity. The philosophy is to create conducive and healthy climate with the values of openness, enthusiasm and collaboration (Cristian & Stefania, 2007). A better formal HR strategy would encourage the employees to build in a feeling of belongingness towards the company along with making them feel committed towards the work and Yorklab. The new HR strategy is to motivate the employees by providing promotions, monetary benefits and to satisfy the higher level needs. A proper formal organisational structure would increase the efficiency, growth of the company and support it to attain its mission and vision. The HR philosophy assists in providing a clear direction and operational practices to make the organisation grow and expand in the new markets (Brown University, 2013). Yorklab needs to have a clear mission statement which would summarize what the company is doing and what it aims to achieve. The mission and vision of the company should be clear to every individual in the workplace. With a formal organisational structure, Yorklab needs to follow certain code of ethics to deal with different types of behaviour. Until execution of the plan, the external and internal climate of the business and the industry are considered. Strategy is the action that the managers employ to achieve the objective of the organisation. The HR strategy implemented will be effective for the business and the employees as well when everyone in the organisation will share the same thought process. The resource based view of strategy is the strategic capability of the business which depends on the resource capability. The strategy will need to analyse the current state of the organisation, its competencies, frame the mission and vision as was being done for Yorklab. The leadership style required a change and required to follow the transformational form as well as to expand the business and improve the informal structure. In keeping with the concerned scenario, it can be affirmed that Yorklab can follow the matrix organisational structure in order to be efficient in expanding its business and producing quality along with satisfying the customers’ needs accordingly. Matrix organisational structure divides authority into functional and divisional structure. In this form of organisation, the employees report on a regular basis to the manager whose authority flows sideway across departmental boundaries. They also report about their overall performance to the head of their department whose authority flows downward. This structure adds numerous command and control, and thus necessitates new support mechanism and pattern of the behaviour. With the implementation of this form of organisational structure, the management of Yorklab will be able to concentrate on strategic planning which was not being possible in the flat structure (Montana & Charnov, 1993).

HR Strategy Process Issues

The successful implementation of matrix organisational structure might face certain issues in Yorklab due to its complex nature. To increase the understanding of the environment and the strategic plans, the human resource managers can indulge themselves in external environment analysis. The analysis typically includes scanning of the organisation and the market trend to identify the growth prospective. The issue regarding the implementation is the confusion and conflict that is created over roles and responsibilities of the team managers. The delegation of responsibility and the roles in this matrix structure creates confusion because of the increase in the level of authority. The reporting system is complex as the employees need to report to the different authoritative heads, this increases the complexity. Whereas, this reporting system increases the monitoring efficiency of the employees as they have to undergo many managers (Kuprenas, 2003). The HR strategy has issues regarding the unity of command in a particular department as the subordinates have two bosses. In case of failure, in the forecasting of the internal and external environment, the manager may tend to shift their responsibility and blame the other functional manager. Yorklab for its expansion and growth prospective requires more employees in order to increase the market share and maintain its quality and customer satisfying. Moreover, in order to achieve the organisational strength the HR needs to implement training for the employees to deliver effective and efficient output. Also, with the increase in the number of members and the implication of the matrix structure the employees will be required to work in a team. In this form of structure, the HR absorbs people who are adaptive and comfortable regarding changes in their process with motivation and positive attitude. The training of the skill would be costly but would yield better result in the future. Besides, with the implementation of this strategy the employees might face issues regarding stability as their will be a change in the position of the managers based on their performance. Assessing the trend of the employees, and their performance would assist the managers in implementing strategies for the expansion of Yorklab, ensuring quality product. The environmental analysis of the strategies might help in analysing the potential opportunity both for Yorklab and the employees (Armstrong, 2012).

The issue regarding the matrix structural policies can be mitigated by following a strategic direction of providing training to the new employees and making them efficient to produce quality products along with ensuring  the satisfaction of the customers. A proper co-ordination between the managers and the employees should be maintained in order to increase the efficiency of the employees and the manager. The new strategy adopted by Yorklab to increase the efficiency of the company requires many skilled employees and thus necessitates training to enhance the skills. Moreover, this structure would provide sound decisions as they are taken by the experts. The top management can concentrate on strategic planning to ensure more quality as Yorklab was not able to concentrate on the plans due to flat structure which they followed. A matrix structure based organisation can rapidly reply to the negative fluctuations in the environment, which is because of the quick decisions taken by the management. The conflict between the managers can be overcome by the soundness of the managers in the departments. The managers are required to be specialised in their department and have the required knowledge about the business structure and the market environment (Davis & Lawrence, 2013; Janicijevic & Aleksic, 2007).

The successful implementation of the matrix structure would motivate the employees to work as they will have greater scope for promotion and rewards due to the new structure. The matrix organisation effects in higher efficiency of Yorklab and provides higher return at lower costs. Also, with the increase in the number of employees and work due to expansion of the business the human resources will be used to their optimal. Thus, implementation of the process will reduce the chances of wastage of both the physical and human resources. In addition, with the process of training the employees, their skill set will develop by a considerable extent which in turn would benefit the various departments. The communication of the information is smooth in this form of structure to ensure efficiency within the employees of the organisation. The matrix structure permits supervisors to give emphasis on their areas of proficiency for better result.

HR Strategy Implementation

The HR policies and interferences have an essential responsibility of organisational and effective change in the management which is developed in accordance with the goals and objectives of the company to attain. The HR strategy focuses on the best practices of employee resourcing, employee relation and reward to achieve the overall goal of Yorklab which is to expand the business. Yorklab is implementing the best HR policies for the company to increase the market share, enhance quality and maintain the integrity of the company. The HR strategy implemented in Yorklab is the matrix organisational structure, a better leadership style for the employees to understand the goal of the company and work as a part of the organisation (Slide Share, 2012).

Employee Resourcing (ER)

Employee resourcing of a company focuses on effective hiring and firing, attracting the best candidates and on the employee performance improvement. ER enables the company to meet their objectives, by staffing right candidates for the right position and performance evaluation along with measuring the appraisal and rewards. The major objective of employee resourcing is to employ people who have more competitive advantage over the rivals and are able to deliver efficiency in accordance with the goal of the company. The new management strategy implemented by Yorklab should focus on the required number of employees for the business to operate in efficient manner and make optimal usage of the employees. The skill and the behaviour required by the employee for the success of the business is the key strategy (University Narotama, 2012). Moreover, the measurement of the performance, quality, customer service and flexibility by the employees is the strategy of the Human Resource Department (HRD) can take to expand the business efficiently. The matrix structure thus implemented by Yorklab for the efficient functioning is the best HR strategy to meet its requirements for expansion, customer satisfaction and quality. The pay and benefit structure of the employees is the key motivational factor that drives them to work efficiently and effectively.  The mode of communication within the management and the employees should be strict but should also determine the welfare of the employees. The transformational leadership style is effective for Yorklab as it allows the employees to work efficiently with a sense of togetherness. With this approach, the leader shares the vision of the organisation with every employee and motivates them to attain the goal. This form of leadership style and structure implemented in Yorklab would help to increase the visibility of the employees and upsurge the changes of promotion and rewards. Employee resourcing deals with the strategic planning of the HR management and talent management for the company to attain market share, profit and retain efficient employees (Iles, 2009).

Human Resource Development (HRD)

The HRD includes the procedures and the processes that intentionally pursue to offer learning activities to enhance the skills and knowledge of the employee of the organisation. The purpose of the development team is to train and motivate the employees to make them competent, for efficient working of the organisation. HRD emphasizes the retention of the employee for long-term to add value to the company. The objective of the HRD team is to create a sense of loyalty and commitment among the employees for the sustainable growth of the company and the employees through promotion and rewards. The HRD deals with the training and development of the employees and also the management to improve co-ordination. This would also lead to proper development of business strategy, performance of the business and analysis of the future and present needs of the management with reference to expansion and quality of service. The facet of employee retention would be another objective of the HRD team in Yorklab to increase the level of efficiency (Slide Share, 2012).

Performance and Rewards

The new strategy to be implemented focuses on employee motivation for better service and quality of products. To be effective in an organisation, the reward system is an important component to motivate employees and influence their performance level. The matrix structure implemented in Yorklab will be effective when the reward system strategy is executed efficiently. This structure increases the visibility of the employees and also their right to compensation and recognition. With the expansion of the business, the number of employees and management levels would increase which would provide better opportunity. Along with upgraded motivational factors, enthusiasm of the employees is possible with the increase in salary, promotions and praise from the management. The enhanced management style and structure of the business would increase the productivity and quality of the operations in Yorklab. The company can motivate its employee through regular performance measures and place right employee at the right place (University Of Texas, 2013).

Employee Relation

The relation between the organisation and its member is of great significance as this factor helps in motivating the employees and increasing the efficiency of the company. The aspect of employee relation assists in managing the criticality of job performance and the behavioural issues. The adherence to profound employee relations would lead to sound communication, effective work environment and commitment amid the employees. The management should also be enthusiastic, open to feedback and unbiased towards the employees. The HR strategy should be effective to mitigate issues of the member and increase employee relations. Proper employee resourcing, rewards and recognition and proper training implemented would tend to develop the relation with the employees. Judging the cultural aspect of the company, employee behaviour and the outcome relates to the employee relations. The relation with the employee helps in increasing the efficiency of performance. The new transformational style of leadership and the structure would enable to augment the level of relation and help in bridging the gap. This would lead to the achievement of goals and objectives of Yorklab to expand its business, with quality and customer satisfaction (University of York, 2012).


The strategy implemented in Yorklab to expand the business and quality would be effective with the implementation of the new HR policies. The change in the informal HR structure and leadership style would help in improving the performance and productivity and enable the company to utilise its talents and resources to the optimal. The matrix structure would be effective for Yorklab to increase the effectiveness of the management and the employees. The structure of Yorklab and the use of the HR philosophy are the factors which help in strategizing the effectiveness of the company in relation to the employee and management. Thus, the new strategy would enhance the efficiency of the management, employees and would support in decreasing the issues. The proper implementation of the strategy would facilitate Yorklab to increase its market share and maintain the quality. Employee resourcing, retention, relation, performance and rewards are the factors that can be resolved in this new proposed matrix organisational structure. Consequently, with the development of the HR strategy in Yorklab, the business would exhibit a growth and increase the level of motivation in employees.

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