Strategic Human Resource Management In The Global Economy

1. Introduction

For the recent years, global economy has experienced high economic volatility and has caused challenges to human resource management (HRM) to sustain both employees and businesses performance during bad times. The purpose of this paper is to understand how the strategy human resource management (SHRM) assists in organization efficiency in both good and bad economic times and the outcomes of strategies used during good times and bad times.

1.1. Global economy GDP and the impact in industry

The concept of global economy refers to the gains of comparative advantage that causes countries to generate goods the countries are most useful in terms of lowest production that causes to increase volumes of world output (Globalization

As these industries are the most contributor to the growth of the country economy. Retail industry has been known to contribute to economy growth. Retail industry produced almost $22 trillion in sales in 2014, which contributing for approximately 28.4% of total GDP. Thus, it can be concluded that retail industry is responsible in contributing a lot to economic growth. However, because of high volatility economic times, retail industry may suffer and in turn, this situation causes significant number of unemployment, small business retail closures.

1.2. Strategic human resource management (SHRM)

Strategic human resource management (SHRM) is the process of combining the human resource function of an organization with the strategic goals of the organization in order to improve performance (Bratton, 2001).

Strategic human resource management (SHRM) is vital to the organization 's success. The reason is because strategic human resource management represent a more flexible structure and the use of human resource to obtain organizational objective and assists in achieving competitive advantage (Wei, 2006).

2. Strategy human resource management

Strategy that human resource adopt during bad times

In bad economic times, industry may suffer greatly because of this. And it includes retail industry. In order for organization and industry to survive strategic human resource management discover strategy in order to prevent more losses due to the bad economic times. The strategy that human resource adopt in bad economic times are motivation, retaining talent and employee engagement.

Firstly, when encounter with economic tough times, human resource is motivating employees to keep committed. The reason is because in bad economic times, usually employees are more likely to be stressed and thus leads to high absenteeism (Paton, 2010). Retail industry big issue is always dealing with high absenteeism. When in most organizations, the strategy used is cutting the employee 's wages per hour. However, in order for Costco to avoid this issues, Costco is providing employees with monetary motivation by paying all the employees with $1.50 hour wage increase during recession times. In return, the turnover rate of employees over year is 5% (Forbes,