Explain the linkage of Organizational and HR Strategies.
Answers
Profitability
Linking HR strategy to organizational strategy can be profitable. Towers Watson, a company specializing in human capital, reports in the study “Watson Wyatt's 2002 Human Capital Index” that shareholders’ total returns were 64 percent over five years under progressive HR practices, compared with total returns of 21 percent under weak HR practices. Using a progressive strategy, HR can identify the skills your business wants employees to have and close existing skill gaps through aggressive recruiting and training.
Obstructions
High turnover, excessive absenteeism, low productivity and overall employee dissatisfaction disrupt your business operations. These obstructions not only raise your operating costs -- hiring and retraining replacement staff is especially expensive for small businesses -- they also derail organizational strategies. As your chief “employee problem-solver,” HR often conducts exit interviews with departing employees to find out why they’re leaving and take corrective action, or the company might make managers more responsible for keeping staff on board by tying their pay to retention rates. To raise productivity and retention, HR can recommend such low-cost incentives as flexible work schedules, performance awards or money-saving discounts from retailers.