Question

The overall strategy of a company directly impacts its HR practices. Discuss, and give specific examples of, various HR practices that should be used related to the following three business strategies: growth strategy, stability strategy, and reduction strategy.

Answer 1

Solution -

Growth Strategy - When an organization is pursuing the growth strategy then the HR department needs to ensure that the organization has an optimum availability of resources and at the same time ensure that the resources are provided with relevant trainings. The other strategy that the HR department needs to implement during this growth phase is the resource scalable strategy by providing the optimum promotion opportunities with a lucrative compensation package to retain and acquire better talent from the market. The best example of HR practices can be seen in start-up technology companies which pick a growth strategy and starts to acquire resources and bring about a scalability in their resorce management strategy.

Stability Strategy - In this phase the HR department is concerned more on the retention of talent and looks to implement a training and development plan to keep employees motivated. The other strategy in such a phase is when the organization keeps reviewing their compensation package to ensure that employees are motivated and stay with the organization. The HR also starts to look at the employee wellbeing and starts to extend support towards employee delight and allow for maintenance of productivity levels. These policies are seen active in large companies which have a stable trajectory and look to pursue that strategy such as CITI Bank where employee wellbeing is given due importance and are encouraged to have better work-life balance.

Reduction Strategy - In this phase the HR department has to look at better communication and transparent handling of employees. This is where the HR department has to ensure that the employees who have been asked to leave are provided with respectable compensation as per company policies and also the employees that are retained are clearly communicated their status so that they are assured and remain motivated. Such strategies are seen as active in airlines companies where due to lack of business employees are sacked and certain employees are retained.