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Strategic human resource management is a complex process which is constantly evolving and
being studied and discussed by academics and commentators. Its definition and relationship with
other aspects of business planning and strategy is not absolute and opinion varies between

The CIPD defines Integrated Human Resource Management as follows:

Strategic HRM can be regarded as a general approach to the strategic management of human
resources in accordance with the intentions of the organization on the future direction it wants to
take. It is concerned with longer-term people issues and macro-concerns about structure, quality,
culture, values, commitment and matching resources to future need. It has been defined as:

•All those activities affecting the behavior of individuals in their efforts to

formulate and implement the strategic needs of business.2
•The pattern of planned human resource deployments and activities intended to
enable the forms to achieve its goals (Armstrong, 2002, P 41)

The case study speaks about SFYL Company that employs around 700 employees and works in

the security industry. The company’s two categories of employees (full-time and part-time) are

recruited, motivated and compensated differently. Currently, the company attracts the workforce

by inviting them via different channels (job postings in mass-media or word-of-mouth). The

company recruits former police officers for Grade 1, and hires other people for Grade 2 and

Grade 3. Certainly it makes the employees pass different tests to qualify to work for SFYL. The

company strives to retain only the best employees providing them with growth opportunities and

training. It motivates them directly with different, proportionately-growing salaries and profit-

sharing options that the employees get once a year depending on the type of the contract (full-

time or part time and again depending on the grade of the employee). Speaking about the work

they do one should note that the part-time employees typically work as security guards for public

organizations (business centers or hospitals). The salaried staff (supervisors) works full time and

assures that the job of the part-time SFYL employees goes smoothly without any problems. The

following paper explores integrated human resource approach in a greater detail, and provides

recommendations on how to further improve the human resources and to benefit the


Middle Section – (could be called Findings or something like that)

First of all it is necessary to note that the HRM (human resource management) at SFYL has

many functions that strive to create more value for the organization by properly meeting the

organization people’s needs. HRM is all about management activities and influence people in a

given company. HRM at SFYL has the following functions:

1. Employment which is seen in planning and staffing functions of HRM.

2. Development which is seen in training and performance management functions of HRM.

3. Reward systems which are seen in compensations and benefits functions of HRM.

4. Labor-management functions which are seen in collective bargaining and other labor


5. Support which is seen in safety and health and wellness functions.

6. Compliance with the existing affirmative action (Luecke, 2006).

HRM strives for the long term benefits offered for a company which comprise the


1. Productivity increase. HRM has to properly motivate the employees to work


2. Quality of work life. HRM has to contribute to the environment conducive for

working, cooperation and trust.

3. Profit increase. HRM has to use the human resources to increase profits of an

organization (Mathis, 2005).

As for the good and bad aspects of the reward strategy that are in use at SFYL one should

note that the HR department developed strategy with its strengths and weaknesses:

Good aspects (strengths):

1. Employees are split into grades based on their experience. Each grade gets a different


2. The employees can grow (get promoted) or get demoted, so they are motivated to put

forth their maximum efforts.

3. Temporary contracts for new-comers so that the experienced staff members feel

privileged and more protected.

4. Small differentials between Grade 2 and 3 to make the newcomers feel well-compensated

and well-appreciated.

5. Salaried supervisors get 25% added to their salaries per month if they work from 9pm to

6am, thus compensating the employees for night shifts.

6. Unlike part-time employees who work 30 hours/week, the salaries employees work 40


7. Performance-based bonus to salaried employees of 4% of the salary level to show them

their exclusivity.

8. Sales staff gets a commission basis of 10% of a nominal figures represented by the

proportion of their base pay for all new contracts.

9. Formal appraisal for all employees once a year.

10. Profit-based bonus payment once a year to all staff equal to 5% of the firm’s profit for the

year allocated on a point-basis.

11. Pension scheme to all permanent workers with a contribution rate of 4% of base pay

added by company’s contribution of 3%

Bad aspects (weaknesses):

1. Bonus payment distribution is no really fair. Grade 2 and Grade 3 get 3 points. Grade 1

gets 4 points, most salaried people get 7points, sales staff get 8 points, managers get up to

15 points (for senior managers).

2. The managers frequently promise not salary increases but base point increases.

3. Neither salary not the basis point is directly linked to productivity of an individual


4. SFYL focuses only on monetary aspects in rewarding the employees completely ignoring

the so-called Hygiene factors and non-monetary motivation/compensation that can be

extremely rewarding and motivating to the employees without costing too much money.

It appears that the organization had a very smooth transition from the Grade 3 to Grade 2

employees creating rather small price differences and base point difference (if any at all), while

at the same time assuring permanent contract for the Grade 2 workers to reward them for their

loyalty. Then it appears that the company develops different compensation programs for various

employees without effectively tying those to employee learning, development and productivity.

After all, one needs to remember that HRM pays only to motivate the employees to improve

themselves and to benefit the organization even more. It tied pay to performance only slightly by

providing base points. In this case technically, the employee is not motivated to improve much

because his bonus depends on the overall corporate achievement/teamwork rather than on his

individual contribution. This may contribute to social loathing at SFYL.

Penultimate section – Conclusions

Drawing all the above together one should note that SFYL indeed did a great job dividing the

employees into different grades and providing different grades with various salary levels, bonus

and profit-sharing options. The main disadvantage is that SFYL appears to ignore its interests by

focusing only on the financial compensation/motivation which does not always appear to be the

cheapest option. The company should consider many other rewarding options that may include

various trainings, seminars, team-building initiatives, mentoring, etc to make people feel loved,

and appreciated. This will increase their commitment more than dry bonus figures.

Final section – Recommendations

Each employee at SFYL should understand that life-long learning nowadays is a norm rather

than a whim of superiors. The employees should pursue additional personal development and

training to benefit the organization, while the organization should be understanding to the

employees’ increased stress and should reward them for taking these risks. Just like many other

organizations, SFYL should pay for various trainings and to constantly promote those who strive

for the best. Here are some of the recommendations that one should make for SFYL:

Proper education. One should not forget that nowadays the technology and knowledge develops

at extremely fast pace meaning that if SFYL does not constantly learn new things it is going to

fall behind the more knowledgeable competitors(Fitzwater , 2007).

• SFYL needs to learn the new updates with respect to the industry innovations, the ways

to improve communication, and to create the organizational structure that would be the

most productive(Belker, 2006). The fact that the wireless office (a.k.a. wireless internet)

and lean organization are the most profitable things does not mean that they are going to

stay like this in the next 10 years(Ivancevich, 2006). Certainly that if we allow SFYL

Company’s employees to be diverse and to educate themselves it is going to keep on par

with the modern techno updates(Noe, 2007).

• Develop a proper implementation plan. If SFYL agrees that the organization lacks proper

communication structure, it should not panic but rather discuss the way to overcome the

given problem within the shortest time frames and with the least resources spent. SFYL

should allow risks and change to be present to a certain degree, and it should do the best

it can to maximize profit (Mondy, 2007).

• Human factor. SFYL needs to understand that whatever the organization does is in fact

done by SFYL Company’s human resources that are the company’s most precious

assets(Rollo, 2005). SFYL should therefore, constantly try to motivate the employees to

learn, to educate themselves, to remain diverse and to like their organization. The

company should not hesitate to plan and hire people from abroad and to conduct

internships and exchanges between companies from similar industries(Nkomo, 2007).

The SFYL should understand that it is always cheaper to make decisions regarding

communication, organization structure from within rather than from the outsourcing

consulting agency. Last but not least, the company should develop a proper compensation

system that would encourage innovation and productivity (Armstrong, 2005).

• Mentoring. Just like the new-hires, every employee at some point of his/her career at

SFYL needs guidance and encouragement. Mentors (who will be selected among the top-

performers and top-achievers) are going to teach the other employees on how to work

well in the organization and how to remain a productive part of this corporate

organism(Shepard, 2006).This development is expected to create better communication

lines within SFYL Company’s organization and to reduce errors and processing time that

SFYL now experiences(Fisher, 2005).

• Team-building/Trust-building games for the employees (French, 2006). Such games are

created first of all for building a team. It is a common knowledge that a team performs

better than an unmotivated, unrelated, group of co-workers, each of whom strives for

his/her personal accomplishments(Dessler, 2006). This type of training is expected to

create a better team that SFYL currently has, which in turn is expected to work more

efficiently/effectively, and thus to perform better and with less errors(Shepard, 2007).


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