Activity - B

A Report:- Why not to reduce the size or close the HR functions.

Organisation strategy:

The organisation strategy for our group of companies for the next 5 years is Product/Service Diversification. This will be achieved through setting up a bigger pharmaceutical & medical equipment distribution company, by acquiring 2 identified small pharmaceutical distribution companies and also, setting up a critical care medicine manufacturing unit separately in collaboration with a Turkish company.

3 ways HR activities support the organisational strategy:

Three core HR activities that support the organisational strategy are;

1. Recruitment & selection:-

The ability to attract and select candidates having the right knowledge, skills and attitude is an important function of HR. If it is successful in this task, it will be contributing to the organisation strategy successfully. Productivity, quality and service are the most critical issues in the organisation and any positive contribution of HR in these areas will be of supreme importance.

HR through right hiring may add value, if customer satisfaction shows an upward trend and, cost of service delivery and rate of errors show a downward trend due to initiatives of recently inducted employees. Improvement in quality leads to reduction in production or service cost and, providing customer satisfaction. Increase in sales follows thus improving market reputation leading to reduction in marketing expenses which contributes towards improved profitability

2. Performance appraisal and compensation:-

Performance appraisal and compensation are the most critical areas of HR. Formulating an appraisal system which is fully aligned with organizational strategy, and implementing the same in an objective and transparent manner makes it acceptable and affects the employee's motivation. It also helps in employee training and development.

Similarly, laying down a sound and fair compensation...