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HRMT20024 Managing Human Resource- Sustainable HR Capability

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Case Study: The role of HR in creating sustainable organisations

A hospital is operating with about 400 staff members across multiple sites in a geographically dispersed are in Australia. Currently, the organisation has a payroll department but does not have a dedicated HR department and senior HR manager. In fact, the CEO and his finance manager are currently running HR at the facility. They have devolved virtually all of the key HR functions of HR planning and job analysis, recruitment and selection, training and development, performance management, occupational health and safety to middle managers. Unfortunately, many of the middle managers don’t really know much about HRM or think it is actually their job! The CEO thinks the organisation is in good hands because they have a consultant who comes in once a week to oversee the development of HR policies and practices. The outcome of this model of HRM has been significant challenges in terms of inconsistent application of HR policies and practices by middle and supervisory management, which has led to industrial disputation, high level of staff grievances, absenteeism and turnover, and staff shortages. Consequently, this has led to challenges for the quality of care and even serious accidents involving patients and staff.

A similar-sized hospital operating under similar conditions has a very different story to tell when it comes to HR and its impact on staff and the quality of patient care. The CEO is passionate about HR and its impact on staff engagement, organisational commitment and subsequent effect on the quality of patient care. He is passionate about creating a HR function that prides itself on creating sustainable management practices, process and policies. This hospital has a dedicated HR manager and highly motivated HR team. The HR team meet regularly and have developed a strategic HR capability that is congruent with the goals of the organisation. A dedicated member of the HR team is responsible for managing each HR function, such as HR planning and job analysis, recruitment and selection, training and development and occupational health and safety. The HR team meets regularly and has developed a number of key performance indicators (such as employee turnover, absenteeism, accidents, employee morale, complaints) for each of the HR functions so that they can monitor the effects of their HR policies, practices and processes. This organisation has an excellent track record of staff retention, morale and overall quality of patient care and patient safety. They are engaged in the industry as a leading healthcare provider.

Based on this case study, write a business report that answers all of the following questions:

1. What course of action would you recommend to the CEO in the first hospital as a way to improve the operation of HRM at the hospital?

2. What are the key features of building a sustainable HR capability?



Human resource department helps in recruitment, hiring process, training, professional development, appraisals, management of work culture, conflict management, reward and incentive decisions, payroll management, and management of employees’ relation. Human resource department helps to make connectivity between organization and the employees. The work of human resource managers is not easy as the managers have to maintain transparency and they have to provide all the important information to the employees (Hendry, 2012).

Thesis statement: Study on the role human resource department and its effectiveness.

The report is giving focus on the case study, where two hospitals of same size are located in Australia. First hospital does not have a HR department and the CEO and financial manager are mainly running HR functions in the hospital. This hospital is facing several problems such as staff turnover, staff shortages, staff grievances, industrial dispute and absenteeism. These problems are giving bad impact on patients also as they are getting proper quality of care. Other hospital of similar size has a different story. In second hospital human resource department is available. The HR department contains dedicated HR manager and highly motivated HR team. In this hospital HR managers do all the HR activities like recruitment, selection, training and development properly and also provide motivation to staff members so that they can perform their work effectively. The CEO of first hospital can improve the human resource management by using given methods.

Ways to improve the operation of HRM

Human resource operations are related to services provided by Human resource department. HRM operations are mainly administrative, job analysis, recruitment and employee relationship. The CEO of the first hospital can improve the operations by establishing a proper human resource department as the human resource department plays a very important role. Human resource department helps in formulating strategies and plans. Human is the most important resource of any organization and for managing people a dedicated HR department is required. The CEO should hire capable members in HR department. A best method to hire employees is hiring through employee’s reference. A strong HR department will give competitive advantage to the hospital. HR department’s members will help to deal with staff members’ problems easily as they contain required knowledge and skills (Lengnick-Hall et al., 2009). HR department will not only help employees of the hospital but also help will to maintain good work environment and culture in the hospital. HR department will also help in developing motivation in the staff members and by this the problems of lack of motivation, employees’ turnover and absenteeism can be reduced (Guest, 2011). HR managers monitor the performance of employees and they also provide guidance to them. HR manager works as a coach, mentor and mediator. HR managers search employees from various possible sources. HR managers do recruitment process in which they recruit capable employees for the job description and select the best candidate (Kehoe & Wright, 2013). HR manager will help to hire talented staff members in the hospital. Through proper human resource department the staff members will get proper direction to achieve goals and objectives. Staff members can directly talk to HR mangers and HR managers can pass necessary information to senior managers. Through this method effective communication can be established in the hospital. HR department will also help in growth as the managers will use effective methods to improve the system in the hospital.

Key features of building a sustainable HR capability

A human resource manager must have certain skills that can help him to deal with different situations in the hospital. These skills are the key features for building sustainable HR capability.


A HR manger must be capable to handle multiple tasks. A HR manger has to do many tasks in a day and the HR manager must be comfortable with multi-tasking. In a day a HR manger has to do some planned and unplanned activities. The HR managers have to do multiple tasks like recruitment, selection, training, employee relation management, payroll management, etc.  HR mangers also handle some other tasks like event management, appraisal system, career development programs and conflict management (Schaufeli, Bakker, & Van Rhenen, 2009).


The HR manger must have leadership quality as the manager has to deal with situation where the manager has to take decision as a strong leader. Many leadership theories are given by experts like great man theory, trait theory, contingency theory, behavioral theory, situational theory, participative theory, management theory and relationship theory. All these theories focus on the point that human resource managers must have leadership quality through which the people become capable to manage people and the organization (Gond et al., 2011). In the first hospital to manage employees the HR manger must require leadership quality.

Continuous learning 

Continuous learning helps to expand the ability and capability. The HR mangers must learn new skills to increase knowledge. As the market conditions are changing rapidly so continuous learning helps to deal with the changes (Chew & Chan, 2008). This capability of HR mangers will help to solve the problems of the first hospital.    

Change agent

HR department is the main source that implements change in the organization. The top managers and staff members tell their issues to HR department as HR department’s members implement change. The HR managers possess skills and knowledge and they provide innovative solutions to solve problems (Wright & McMahan, 2011). First hospital is facing several problems so the human resource managers can solve issues by implementing essential change in the system.  


This skill is very important. A HR manager has to face a situation many times in which the manager gets opposing views and the manager has to give the solution that can be acceptable for all. The HR manager must have the capability to provide the solution through which all members can be satisfied but it is often not easy to achieve (Teece, 2012).

Problem solving and conflict management

In any organization many members work at same place and conflict situation can be occurred. The HR mangers use their conflict management skills to solve workplace conflict. The HR managers use their capabilities and skills to maintain harmony in the organization. HR managers also use different conflict resolution strategies according to the situation (Liao et al., 2009).

All these capabilities of human resource managers will give advantages to first hospital. The HR managers will provide solutions for the problems like industrial conflict, absenteeism, staff shortages and staff grievances. HR managers will use their capabilities and will provide innovative solutions to the hospital.  


From the report it can be concluded that human resource department is very essential as the department provides solution for various problems. HR managers help to maintain good human relationship in the organization. In the first hospital proper human resource department is required. The HR department must contain motivated and highly skilled HR managers. Some features for building sustainable HR capabilities are also discussed in the report. HR managers must have leadership, multitasking, conflict management, continuous learning, change agent, negotiation and problem solving skills.


Chew, J., & Chan, C. C. (2008). Human resource practices, organizational commitment and intention to stay. International Journal Of Manpower, 29(6), 503-522.

Gond, J. P., Igalens, J., Swaen, V., & El Akremi, A. (2011). The human resources contribution to responsible leadership: An exploration of the CSR–HR interface. Journal of business ethics, 98(1), 115-132.

Guest, D. E. (2011). Human resource management and performance: still searching for some answers. Human Resource Management Journal, 21(1), 3-13.

Hendry, C. (2012). Human resource management. Routledge.

Kehoe, R. R., & Wright, P. M. (2013). The impact of high-performance human resource practices on employees’ attitudes and behaviors. Journal of Management, 39(2), 366-391.

Lengnick-Hall, M. L., Lengnick-Hall, C. A., Andrade, L. S., & Drake, B. (2009). Strategic human resource management: The evolution of the field. Human Resource Management Review, 19(2), 64-85.

Liao, H., Toya, K., Lepak, D. P., & Hong, Y. (2009). Do they see eye to eye? Management and employee perspectives of high-performance work systems and influence processes on service quality. Journal of Applied Psychology, 94(2), 371.

Schaufeli, W. B., Bakker, A. B., & Van Rhenen, W. (2009). How changes in job demands and resources predict burnout, work engagement, and sickness absenteeism. Journal Of Organizational Behavior, 30(7), 893-917.

Teece, D. J. (2012). Dynamic capabilities: Routines versus entrepreneurial action. Journal of Management Studies, 49(8), 1395-1401.

Wright, P. M., & McMahan, G. C. (2011). Exploring human capital: putting ‘human’back into strategic human resource management. Human Resource Management Journal, 21(2), 93-104.

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