Order # 9601
tutorthammy
9601_humanresourcemanagement2strategyandcomparativesc.zip03_Strategic_HRM.pdf
SCHRM Lecture 3 Strategic HRM
The development of strategic HRM
Dr Yvonne Rueckert
SCHRM Lecture 3 Strategic HRM
Introduction
� The competitive advantage of a firm is seen as relying more on knowledge and service activities
� Strategic management depends very much on what people know and how they
behave – products and services often originate in individuals
� This makes human resources within a firm and they way they are managed a potentially unique source of strategic leverage
� However, it is still rare for texts on strategy to pay much attention to HRM issues…
� The study of HRM has adopted a cross-functional approach and expanded its breadth of analysis – SHRM has been particularly influential
� SHRM theory draws on the Resource Based View of the firm
SCHRM Lecture 3 Strategic HRM
Strategy and HRM
� HR practices are thought to be strategic if they contribute to organisational performance and if they are aligned with the strategy of the organisation…
… what is strategy? Does a small organisation which does not have a strategic plan and strategic objectives have a strategy?
� The links between strategy and HR might take a variety of forms depending on the predictability of and knowledge about the environment…
Predictability of the environmentHigh Low
Strategy
as plan
Strategy as
process
Strategy
evolving
Source: Wilkinson and Redman, 2013: 43 (The strategy continuum)
SCHRM Lecture 3 Strategic HRM
� SHRM remains one of the most powerful and influential ideas in business and management during the past 35 years
� Policy makers promote ‘high performance workplaces’ and ‘human capital
management’
� Business corporations: the way people are managed could be one of the most crucial factors with regard to competitiveness
� Labour is viewed as an ‘asset’ not an ‘unfortunate cost’
� In the 1980’s: British Airways started talking about ‘commitment’, Jaguar introduced its programme for ‘winning hearts and minds’…
� Development was also influenced by the wider economic context (de-regulation,
privatization etc)
The significance of SHRM
SCHRM Lecture 3 Strategic HRM
A definition of SHRM?
� SHRM plays an important role in theories of and attempts to describe, understand, critique and change organizations and theories of organizational structures…
SHRM is virtually impossible to define
SHRM is not a unitary phenomenon but a collection of phenomena (prescription, models, theories, critiques)
SHRM changes over time (programmes of organizational change are themselves highly changeable)
The idea of SHRM can be regarded as a ‘discursive formation’ (set of interconnecting propositions)
A distinctive approach to employment management which seeks to achieve competitive advantage
through the strategic deployment of highly committed and capable workforce using an array of
cultural, structural and personnel techniques (Storey, 2001: 6).
SCHRM Lecture 3 Strategic HRM
SHRM as a field of study
� SHRM is concerned with the strategic choices associated with the organization of work and the use of labour in firms and its management…
Such an analysis would not be straightforward
Problems of measuring HR performance
Source: Boxall and Purcell, 2011: 66
SCHRM Lecture 3 Strategic HRM
Strategic HRM components
Human capital pool Knowledge
Skill
Ability
Employee relationships
and behavior Psychological contracts
Job related / Required
Discretionary
Organizational citizenship
People Management Practices
Staffing Training Rewards Appraisal
Work design Participation Recognition Communication
Source: Salaman et al, 2006: 21
SCHRM Lecture 3 Strategic HRM
Categories of SHRM literature
(I) Literature concerned with identifying and
seeking to understand the features of
organizations (improvement of organizational
performance)
(II) Prescriptive literature: the focus is on the
ideas underpinning prevalent practices (e.g.
culture change, knowledge management,
transformational leadership)
- Academic research-based analyses and
assessments of the factors which may
influence levels of performance (selection
processes, types of training etc)
- Consultancy literature: advocates particular
‘solutions’
Source: table based on Salaman, Storey and Billsberry, 2006
SCHRM Lecture 3 Strategic HRM
SHRM – Changing ideas
� SHRM can be considered as a repository of the ways in which academics, consultants, senior managers etc think about and attempt to change organizations
� SHRM changes affect how organizations are changed and how they perform, how
employees are treated, the nature and security of employment…
� Approaches to organizational change arise from wider societal and political ways of thinking or ideologies or from societal values and established ways of thinking, e.g.
- Ideas of ‘excellence’ (Peters and Waterman, 1982)
- Business Process Re-engineering (BRP, Grint, 1994)
- The management of innovation (Storey and Salaman, 1998)
- Ideas around the importance of ‘leadership’
SCHRM Lecture 3 Strategic HRM
The RBV and SHRM
� The Resource Based View (RBV) has significantly influenced the field of strategy and SHRM
� Framework from which HR researchers and practitioners can better understand the challenges of strategy and how firms might build competitive advantage
� The RBV has been instrumental to the development of SHRM – particularly as the emphasis of the RBV was shifting from external factors (e.g. industry position) towards internal firm resources of competitive advantage (CA)
People are strategically important to firm success!
� Literature reviewing RBV, e.g.: Wright, McMahan and McWilliams (1994) / Cappelli and Singh (1992) / Boxall (1996)
� Wright et al proposed that the human capital pool could constitute a source of CA – must have high levels of skills and motivation to exhibit productive behaviour
SCHRM Lecture 3 Strategic HRM
Origins of the RBV
� The Resource Based View (RBV) goes back to Edith Penrose (1959) – developed a theory of the growth of firms
� The firm is ‘an administrative organization and a collection of productive resources’; ‘physical’ and ‘human resources’
� Her understanding of the quality of the firm’s human resources placed emphasis on the knowledge and experience of the management team and their subjective interpretation of the firms’ environment
� The RBV draws attention to the intangible assets of the firm which make up its distinctive competencies and routines
� It provided a counter-weight to the marketing oriented models of strategic management
� The RBV has achieved a re-balancing of the literature on strategy – reminding people of the strategic significance of internal resources and their development over time
SCHRM Lecture 3 Strategic HRM
Objectives of the RBV
� The RBV involves looking at how HR can develop the following (Golding, 2004: 51):
Value – how does the firm seek to distinguish itself from its competitors? What part does HR play in this?
Rarity – is the firm doing something with its employees that its competitors are not?
Inimitable – casual ambiguity means that the unique history of each firm makes it difficult to ascertain what causes advantage and therefore make it difficult to copy.
Non-substitutability – these internal resources are integrated into coherent systems so advantage is sustainable and cannot be substituted by other resources
SCHRM Lecture 3 Strategic HRM
Criticisms of the RBV
� The RBV is imbalanced and places too much emphasis on the internal side of the SWOT acronym…
Source: Boxall and Purcell, 2011: 99
� The RBV does not generate testable hypotheses (Barney, 2001)
� The concept lacks a theory of the employment relationship (Bacon, 2003)
SCHRM Lecture 3 Strategic HRM
The convergence of RBV and SHRM
� The RBV has put ‘people’ on the strategy radar screen – strategy researchers acknowledge human capital, intellectual capital and knowledge
� Convergence of strategy and SHRM?
� Core competency concept (Prahalad and Hamel 1990): competencies refer to organisational processes, engaged in by people, resulting in superior products
� In order to understand the competency one must examine the people who engage in the process, skills they must possess, behaviour they must engage in to implement the process
� Dynamic capabilities: organizational and strategic routines by which firms can achieve new resource reconfigurations as markets emerge, split, die… (Eisenhardt and Martin, 2000)
� Changes required entail different organizational processes implying new networks and new behavioural repertoires of employees
SCHRM Lecture 3 Strategic HRM
Conclusion
� SHRM is an approach to managing human resources that supports long-term business goals
� It is a complex process, constantly evolving, and subject of ongoing discussion by
academics and other commentators
� The RBV has significantly influenced the fields of strategy and SHRM
� SHRM can encompass a number of individual HR strategies, e.g. to improve employee performance, to deliver fair and equitable reward
� However, these single strategies are not strategic HRM in themselves – strategic HRM is the overall framework which determines the shape and delivery of these
strategies
� SHRM links people systematically with organisations by integrating HRM strategies into corporate strategies to deliver organisational value
SCHRM Lecture 3 Strategic HRM
References
� Boxall, P. and Purcell. J. (2011) Strategy and Human Resource Management, 3rd ed., Basingstoke, Palgrave Macmillan.
� Budhwar, P. and Aryee, S. (2008): An Introduction to Strategic Human Resource Management. In M. J. R.
Butler (Ed.), Strategic human resource management: building research-based perspective (pp. 191-212). London (UK): CIPD.
� Salaman, G., Storey, J. and Billsberry, J. (2006): Strategic Human Resource Management. 2nd ed., Sage.
� Truss, C., Mankin, D. and Kelliher, C. (2012): Strategic Human Resource Management. Oxford University Press.
� Wilkinson, A. and Redman,T. (2013) Contemporary Human Resource Management,4th ed., Pearson.
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08_Employee_commitment.pdf
SCHRM Lecture 8 Strategic HRM
SHRM – performance and employee commitment
Dr Yvonne Rueckert
SCHRM Lecture 8 Strategic HRM
Introduction
� The question of whether people are managed and treated at work contributes to overall performance of an organization has been much debated
� High Performance Work Practices (HPWPs): emphasizes high quality goods and
services and an engaged and empowered workforce
� Argument: effective HR policies help an organization to establish a robust CA (‘high road’ approach to management)
� HPWS literature focuses on different aspects: high-commitment management (HCM), high-involvement management (HIM)…
� The keystone of the HPW system is the organizational culture – the worker is
considered as the ‘thinking performer’…
SCHRM Lecture 8 Strategic HRM
High performance working
High-performance work practices: bundle of HR practices that is expected to yield positive performance outcomes at the individual and organizational levels.
There is little consensus as to the precise practices that should be in the bundle.
High-performance working could be understood as having characteristics such as:
- Sustained market success
- Innovation in quality and customer satisfaction
- Customer and continuous improvement focus
- Use of self-managed work teams
- Clear links between training and development and organisational objectives
- Support for organizational and individual learning
SCHRM Lecture 8 Strategic HRM
Appropriate selection and recruitment processes
Comprehensive induction programmes
A sophisticated and wide coverage of training
Coherent performance management systems with wide coverage
Flexibility of workforce skills
Job variety and responsibility
Frequent and comprehensive communication to employees
Use of quality improvement teams
Market competitive pay
The use of rewards related to individual and/or group performance
High performance working and HR practices
SCHRM Lecture 8 Strategic HRM
Source: https://www.youtube.com/watch?v=C-n3hyz-sSY
How does a high-performance work organization look like?...
SCHRM Lecture 8 Strategic HRM
Characteristics of HR policies and practices
� Employee autonomy and involvement should be integrated into decision-making processes
� Development of people capabilities and capacities through learning at all levels –
focus on self-management, teamwork and project based activities
� Appropriate awards should be earned by those employees who delivered a high performance
� Sharing of information and knowledge…
Patterson et al (1997): 17% of the variation in company profitability could be explained by HRM practices
SCHRM Lecture 8 Strategic HRM
Employee commitment (I)
� Elorza et al (2011): up to now there have been relatively few employee-focused behavioural studies – some black-box studies assess attitudes and behaviours through a single informant at management level
� Behavioural perspective: employee may have an effect on organizational performance through certain attitudes and behaviours
� SHRM and AMO (ability, motivation and opportunity) – satisfaction and commitment…
SCHRM Lecture 8 Strategic HRM
Employee commitment (II)
Organizational commitment can be defined as ‘…a strong belief in and acceptance of an organization’s goals and values, a willingness to exert considerable effort on behalf
of the organization, and a strong desire to maintain membership in the organization’ (Mowday, Steers and Porter, 1979, p. 226)
� Likely to be positively related to organizational change
� In this context employee perceptions of voice are crucial – voice relates to employees’ ability to influence the outcome of organizational decisions
� Employee voice can be examined in different ways: existence of mechanisms to
facilitate voice, climate that encourage employees to put forward their ideas, the extent to which voice is related with influence…
SCHRM Lecture 8 Strategic HRM
Analysing participation
SCHRM Lecture 8 Strategic HRM
Forms of employee involvement
▫ Downward Communication: newsletters
▫ Upward Problem Solving: quality circles, suggestion
schemes
▫ Task Participation: team-working, job redesign, job
enrichment
▫ Consultation and Representative Participation: Joint
Consultative Committees (JCC)
▫ Financial involvement: profit sharing, share ownership
SCHRM Lecture 8 Strategic HRM
Role of line managers in bringing HR practices to life
� Line manager behaviour contributes towards the development or absence or an organisational process advantage
� Recent studies (e.g. Purcell and Hutchinson, 2007, Purcell et al 2009) show that the way line manager implement and enact HR practices strongly influences employees’ attitudes
� Bartel (2000): study in banking industry in Canada / HR environment has a significant positive effect on loan sales
� Line managers play a key role in the generation of operational process advantage…
� How are these line managers managed themselves?
� Organisational commitment: work-life balance, ability to discuss problems with their managers, existence of career opportunities
Values and culture of an organisation can be a form of organisational process advantage
SCHRM Lecture 8 Strategic HRM
Source: WERS, 2011
Consultation over changes at work (UK)
SCHRM Lecture 8 Strategic HRM
Workplaces using incentive schemes (UK)
Source: WERS, 2011
Difference between private and public sector!
Changes in the types of schemes used by employers
SCHRM Lecture 8 Strategic HRM
Impact of employee involvement
� Employee involvement and participation (EIP) allow employees to exercise influence over the processes and outcomes of decision making
� EIP is a cornerstone of the AMO model (Appelbaum, 2000) – higher levels of organizational citizenship behaviours should improve firm performance
� DiMaggio and Powell (1990): adoption of EIP can be related to managers’ self-interest (impression management)
� Riordan et al (2005): firms with stronger EI climates (power, information, training, reward) report higher corporate financial performance and lower employee turnover
� Bach (2004): study on public health organizations (UK): performance targets climate militated against the effectiveness of both direct and indirect forms of employee voice
� Cox (2006): embeddedness of EIP schemes reflects the centrality of EIP to the workplace
� Batt (2004): cosmetic schemes tend not to be effective for anyone…
SCHRM Lecture 8 Strategic HRM
Source: http://www.managers.org.uk/insights/news/20
17/october/the-20-best-uk-companies-by- workplace-culture-chosen-by-employees
Facebook (Rank 11):
Managers at Facebook are said to be self- selecting, with the company adopting a ‘very flat’
culture, recognising that not everyone enjoys a purely management role and that becoming a manager is seen as ‘lateral move, not a
promotion’.
SCHRM Lecture 8 Strategic HRM
Changing ways of working – HR practices and organisational performance
� Organisations operate within the knowledge-based economy – they rely not only on their own human capital to generate valuable outputs (work tends to be organized into
projects, network-based activities)
� E.g. marketing and advertising agencies – work is organised in a series of project teams
� Outsourcing and in-sourcing – impact on management of people?
� Success now depends on being able to leverage human capital within and across organizational boundaries (Wright and McMahan, 2011) challenges for HR and line managers
� More traditional employee could tie their identity to the organization – ‘networked’
citizens anchor their identity in their skills (employability comes first)
SCHRM Lecture 8 Strategic HRM
References
� Boxall, P. and Purcell. J. (2011) Strategy and Human Resource Management, 3rd ed., Basingstoke, Palgrave Macmillan.
� Dietz, G., Wilkinson, A. and Redman, T. (2009): Involvement and Participation, in Sage Handbook of
Human Resource Management.
� Salaman, G., Storey, J. and Billsberry, J. (2006): Strategic Human Resource Management. 2nd ed., Sage.
� Truss, C., Mankin, D. and Kelliher, C. (2012): Strategic Human Resource Management. Oxford University
Press.
� Wilkinson, A. and Redman,T. (2013) Contemporary Human Resource Management,4th ed., Pearson.
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08_SHRM_employee_engagement.pdf
SCHRM Lecture 9 Strategic HRM
SHRM and the concept of employee engagement
Dr Yvonne Rueckert
SCHRM Lecture 9 Strategic HRM
Introduction
� Employee engagement has become an international phenomenon over the past few years – the ‘hot’ HR concept of the new millennium
� It is a relatively new and broad concept, closely related to motivation
� CIPD: named it as one of the 10 required ‘professional areas’ for HR managers
� MacLeod Review 2009: engaged organizations grow profits three times faster
than their competitors, reduce turnover by 87% and improve performance by 20%
� Academic perspective: employment engagement is still in its infancy (origins: paper published in 1990 by William Kahn)
SCHRM Lecture 9 Strategic HRM
What is employee engagement?
� The term has been used in a variety of ways – there is no single agreed definition or measure (MacLeod and Clarke (2009) found over 50 different definitions)
� Kahn (1990: 694): ‘the harnessing of organization members’ selves to their work roles; in engagement, people employ and express themselves physically, cognitively, and emotionally during role performances’
� Schaufeli et al (2002: 74): ‘a positive, fulfilling, work-related state of mind that is characterized by vigor, dedication and absorption’
� May et al (2004): developed three-component measure of engagement: cognitive, emotional physical dimensions
� Alfes et al (2010): distinguishes between intellectual engagement, affective engagement and social engagement
Engagement is something the employee has to offer – it cannot be required as part of the employment contract
SCHRM Lecture 9 Strategic HRM
Comparing engagement with other constructs
Job satisfaction
� Describes a state of personal fulfilment in relation to one’s job
� Engagement is a multidimensional construct – it does not just comprise feelings but also cognitions and behaviours
Commitment
� Commonalities have been found between affective commitment and emotional engagement
� But: commitment is simply attitudinal and engagement has additional dimensions
Job involvement
� Job involvement suggests a psychological identification with one’s work and cognitive preoccupation (Little and Little, 2006)
� There are commonalities but this concept does not reflect behavioural or attitudinal elements
SCHRM Lecture 9 Strategic HRM
Engagement and commitment
� Employee commitment is still relevant but is has been replaced by engagement as the primary tool in the HR consultants toolbox…
� Engagement has been described in trait-like (e.g. extraversion, emotional stability, proactivity) and behavioural terms (employees go above and beyond the call of duty with energy)
� These behaviours make it such an appealing concept – but this definition includes drawbacks…
� E.g. the definition is tautological, it is difficult to monitor the performance of employees on a regular basis, and what happens if employees are not performing effectively?
� For that reason organizational engagement surveys have become so popular…
� Gallup Corporation developed Gallup Workplace Audit (also known as Gallup 12 – includes 12 items such as ‘At work, my opinion seem to count’…)
� Employee engagement increased in popularity: consulting firms rebranded their products and services
SCHRM Lecture 9 Strategic HRM
Source: Meyer, 2017: 91
SCHRM Lecture 9 Strategic HRM
Measuring engagement
The Utrecht Work Engagement Scale (UWES)
� Best established and most widely adopted measure of engagement
� Engagement comprises three facets: vigour, dedication, extent to which employees are fully focused on and engrossed in their work
Maslach Burnout Inventory (MBI)
� Maslach and Leiter (2008): engagement can be regarded as the antipode of burnout
� MBI was originally developed to measure psychological burnout
� Schaufeli and Bakker (2004): it is not clear whether the opposite of burnout is the
absence of burnout rather than engagement
SCHRM Lecture 9 Strategic HRM
Measuring engagement - UWES
Source: Schaufeli and Bakker, 2003
SCHRM Lecture 9 Strategic HRM
The outcomes of engagement – some findings
� Improved individual health and well-being (e.g. Soane et al, 2010; Bakker et al, 2008)
� Reduced sickness absence (Harter et al 2002)
� Reduced turnover (Alfes et al, 2010)
� Higher levels of individual productivity and organizational citizenship behaviour
� Higher levels of corporate performance (Gallup, 2006)
� Higher levels of customer service (MacLeod and Clarke, 2009)
� Higher levels of innovation (Worrall and Cooper, 2007)
� Higher levels of commitment, organizational advocacy and job satisfaction
SCHRM Lecture 9 Strategic HRM
Theoretical model of engagement
Source: Saks and Gruman, 2014: 173
SCHRM Lecture 9 Strategic HRM
Drivers of engagement
Individual
Manager Job
Employer
Engagement
Source: Truss et al, 2012: 228
SCHRM Lecture 9 Strategic HRM
Barriers which organizations must overcome…
� Engagement Definition Barrier
What is engagement and how should we define it in our organization?
� Engagement Referent Barrier
What are different referents for engagement and what referent should we focus on?
� Engagement Measurement Barrier
How should we measure it in our organization?
� Engagement Driver Barrier
What are the main drivers of engagement and what drives engagement in our organization?
� Engagement Strategy Barrier
How can we develop an effective engagement strategy that will result in a highly engaged workforce?
SCHRM Lecture 9 Strategic HRM
Source: https://www.youtube.com/watch?v=BQ_qiTp7PGo
BAE Systems – engagement – working practices
SCHRM Lecture 9 Strategic HRM
Implications for HR professionals
� There is yet no single agreed measure of employee engagement – those used by practitioners differ substantially from those developed by academics
The measure to use depends on the particular organization
� Engagement is regarded by many organizations as one central pillar or their HR
strategy
HR professionals need to think how to interlink engagement strategies and other areas of the people strategy
� HR professionals need to consider whether their line managers have the skills and knowledge to create an engaging work environment
� HR professionals will be required to consider engagement holistically –
emotional, cognitive and behavioural impact
SCHRM Lecture 9 Strategic HRM
Conclusion
� There is no single agreed definition or measure but there is consensus that engagement is a state experienced by individuals in relation to their work
� It involves intellectual energy, physical energy and positive emotional energy
� So far, we do not know what causes employee engagement, the effect of
engagement on employees and the most effective programs for improving engagement
� A top priority is to develop a valid measure of employee engagement that is truly distinct from other constructs (UWES measure is a positive representation of burnout)
� It does not make much sense to continue to study employee engagement if it remains
plagued by concerns about its meaning and measurement…
� Engagement might one day be supplanted as the next ‘hot topic’ in the HR literature and consulting world
SCHRM Lecture 9 Strategic HRM
References
� Boxall, P. and Purcell. J. (2011) Strategy and Human Resource Management, 3rd ed., Basingstoke, Palgrave Macmillan.
� Meyer, J.P. (2017): Has engagement had its day: What’s next and does it matter?, Organizational
Dynamics, 46, pp. 87-95.
� Saks, A.M. and Gruman, J.A. (2014): What do we really know about employee engagement? Human Resource Development Quarterly, 25(2), pp. 155-182.
� Saks, A.M. (2017): Translating employee engagement research into practice, Organizational Dynamics, 46, pp. 76-86.
� Truss, C., Mankin, D. and Kelliher, C. (2012): Strategic Human Resource Management. Oxford University
Press.
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Lecture 4 - Best practice SHRM skeleton notes PJS.docx
2
U22056 Strategic & Comparative HRM
Lecture 4: ‘Best practice’ strategic human resource management
Peter Scott
Outline notes (please ‘fill in the gaps’ as we go along)
Overview of session
Introduction
Characteristics of best practice approaches
Evolution of best practice approaches
Criticisms of BP approaches
Conclusion
Introduction
Last week’s lecture explained the origins and development of the concept of strategic HRM.
Where the next few weeks are going. Critical exposition of three main schools of thought about how HRM could / should be strategic:
· Best practice HRM (today)
· Two varieties of best fit HRM
· Contingency approaches (next week)
· Configurational approaches (has some overlap with today’s best practice approach – ‘high involvement management’, etc.) (week 6)
· The ‘resource based view’ (RBV) (week 7)
Characteristics of best practice approaches
Lists / combinations of beneficial or ‘successful leading-edge’ practices – notably various BP lists by Jeffrey Pfeffer (take your pick between 7-16 BP components) based on discussions with successful US execs.
BP approaches are ‘universal’ approaches: suggest ‘one best way’ of managing human beings.
Suggests use of these techniques will be of measurable benefit to various performance indicators in all circumstances. Context-free.
Contents of the available ‘lists’ vary, but there is considerable commonality across them
Evolution of best practice approaches
Numerous antecedents.
Back into the inter-war reaches of the personnel management discipline: ‘neo-human relations’ and psychological explanations of well-being
‘Harvard model’ of soft HRM (Beer et al, 1985): 6 elements – flexibility, selection, appraisal, learning, reward, participation → 4 outcomes – commitment, competence, congruence, cost-effectiveness
Lean production model:
Key text: Womack et al – The Machine that Changed the World (1990). Inspired by the Japanese domination of the international auto sector from the late 1980s onward. What can the West learn?
· Relatively high pay
· High job security
· Elimination of many status differentials between workers
· Emphasis on worker participation
· Team-working
Broad LP techniques applied more recently to other sectors, e.g. financial services, parts of the public sector… although without some of the aspects that are advantageous to workers’ terms and conditions or job security.
Womack et al, 1990, p. 225: ‘Our conclusion is simple: Lean production is a superior way for humans to make things.… It provides more challenging and fulfilling work for employees at every level…. It follows that the whole world should adopt lean production, and as quickly as possible’
High performance work systems / working practices (HPWS / HPWP), high involvement management
· Extensive in-company training, learning and development
· Use of decentralised teams
· Sophisticated recruitment and selection practices
· Sharing information with employees / employee involvement
· High rewards, but dependent on (usually) individual performance
· Reduction in status differentials
· High levels of job security / internal labour markets
Sung and Ashton (2005, 4): ‘the level of HPWP adoption as measured by the number of practices adopted, is linked to organisational performance.’
HOWEVER:
· Uncertainty over which are the key techniques and which ‘bundles’ of HR techniques are most effective together leads us into the ‘configurational’ approach – to follow.
· The nature of the link between HRM and performance will be discussed in a later week.
Pfeffer’s approach. Influential US commentator.
Pfeffer’s list of universal best practices (well, one of them, anyway) said to link to organisational performance
· Job security
· Sophisticated recruitment and selection
· Above-average rewards
· Incentive-based pay
· Share ownership
· High degree of information and communication
· ‘Empowerment’, devolved decision-making
· Team-working (i.e. with a strong degree of self-management)
· Training and development
· Multi-skilling
· Single status
· Low degree of internal wage dispersion
· Internal labour market
Criticisms of BP approaches
See particularly Purcell (1999) and Marchington and Grugulis (2000) for the main critiques of BP.
Main criticisms:
Which practices? Which are more important than others? (The debate about best-fit HRM takes this further.) Can some practices be mutually contradictory? While it might be possible to identify bad practice to avoid and ‘good’ HR micro-practices to adopt in the abstract, and to identify well-known practitioners of both (Ryanair / Sports Direct vs Gore / Google) can we generalise this to a ‘best’ HR system?
Costly? Will companies invest in this?
Applicable everywhere? BP can be an overly prescriptive, generalised approach, a ‘utopian cul-de-sac’ (Purcell, 1999, 36).
· Can BP be found in practice, and where might it be particularly beneficial? See e.g. Sung and Ashton (2005, 11-12) survey of CIPD members or Wood and Bryson (2009) for UK. Wood and Bryson: uneven usage of practices, more common in private sector where TQM and LP used, and in multi-site workplaces. So how much evidence that BP has been adopted, in full, in practice?
· Only useful where product / service highly dependent on employee skills and training times long (Marchington and Grugulis, 2000).
· Contextually / culturally bound (see e.g. James and Jones, 2014). Cultural and legal barriers.
Best for whom? For everybody? Execs v workforce, e.g. on the issues of employment security or remuneration levels or devolution of decision-making in teams. Where is union recognition in all this? Murray et al (2002), Godard (2004), Danford et al (2005) and others: most research concludes, at best, that the jury is out on the outcomes for work and employment relations.
If everybody adopts BP, then surely there is no way for anyone to gain competitive advantage.
Methodological problems with BP studies. An atheoretical wish list? We’ll deal with the problems of large-scale quantitative questionnaire-based studies, positing associations with profitability / productivity, in later weeks.
Conclusion
BP as a soft HRM approach. Why is it persuasive, despite relatively low diffusion in its ‘pure’ form? How to the weaknesses of BP lead on to further theories of strategic HRM that have been proposed?
References
Beer, M. et al (1985) Human Resource Management, New York, Free Press.
Danford, A. et al. (2005) Partnership and the High Performance Workplace: Work and Employment Relations in the Aerospace Industry, Basingstoke, Palgrave Macmillan.
Godard, J. (2004). A critical assessment of the high-performance paradigm, British Journal of Industrial Relations, 42, 2, 349-78.
James, R. and Jones, R. (2014) Transferring the Toyota lean cultural paradigm into India: implications for human resource management, International Journal of Human Resource Management, 25, 15, 2174-2191.
Marchington, M. and Grugulis, I. (2000) “Best practice” HRM: Perfect Opportunity or Dangerous Illusion?, International Journal of Human Resource Management, 11, 6, 1104-1124.
Murray, G., Bélanger, J., Giles, A. and Lapointe, P.-A. (2002) Work and Employment Relations in the High-Performance Workplace, London, Continuum.
Pfeffer, J. (1994) Competitive Advantage through People, Boston, Harvard Business School Press.
Purcell, J. (1999) Best Practice and Best Fit: Chimera or Cul-de-Sac?, Human Resource Management Journal, 9, 3, 26-41.
Sung, J. and Ashton, D. (2005) High Performance Work Practices: Linking Strategy and Skills to Performance Outcomes, London, Department of Trade and Industry.
Womack, J.P., Jones, D.T. and Roos, D. (1990) The Machine that Changed the World, New York, Macmillan, (esp. chs. 9-10).
Wood, S. and Bryson, A. (2009) ‘High involvement management’, in W. Brown, A. Bryson, J. Forth, and K. Whitfield (eds.), The Evolution of the Modern Workplace Cambridge, Cambridge University Press, 151-75.
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Lecture 2 - HR roles PJS 2017-18.pptx
SCHRM lecture 2 Approaches to the role(s) of the HR function: a ‘strategic’ role?
Peter Scott
Outline of session
Strategy and how it relates to HRM (briefly)
Classifications of HR responsibilities and roles
The Ulrich ‘business partnering’ model and its influence
Consequences and criticisms
Textbook places to look for further information relevant to today’s session
Full refs for these in unit programme
Farnham – HRM in Context, section 3.7
Rees and Smith – Strategic HRM, ch. 4
Truss et al – Strategic HRM, ch. 4.
The two journal article readings set for seminar 3 are also good references for this topic (links on unit Moodle site)
1, Strategy and the relationship to HRM
Military origins
Strategy = broad game plan to achieve set future goals
Academic discipline, applied to business, only really emerges through US business schools
How would HRM fit into first-order business strategy decision-making, given that ‘personnel management’ conceived traditionally as an administrative and welfare function?
The two main models of HRM see the nature of HRM and its relationship to wider business strategy very differently…
The Nature and Purpose of HRM
Selection
Performance
Appraisal
Rewards
Development
The Human Resource Cycle of Michigan Model (Hard HRM model)
6
Work System
Rewards
HR Flow
Employee Influence
HR System of Harvard HRM Model (Soft HRM model)
7
The breadth of HR roles and responsibilities
Let’s build up a list…
Various classifications of HR roles…
… but most incorporate some variations of:
traditional personnel management,
advice and problem-solving,
involvement in new policies and initiatives
managing and decision-making
See Table from Farnham, 5/e, pp. 111-112.
3. Introduction to HR Business Partnering
The ‘HR Business Partner’ model is popularly called the ‘Ulrich model’ and is named after Dave Ulrich, a professor at the University of Michigan.
“Should we do away with HR?” (Ulrich, 1997, p vii). If not, how to give it new influence
Ulrich’s work was widely seen as pioneering and has been very influential.
Many HR departments have been re-organised around the ‘Ulrich model’ (perhaps a majority).
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The Ulrich Business Partnering Model
Strategic Partner
Change Agent
Admin Expert
Employee Champion
Processes
People
Day-to-Day/Operational Focus
Future Strategic Focus
Adapted from Ulrich, (1997)
“When HR professionals work as strategic partners, they work with line managers to institute and manage a process that creates an organization to meet business requirements.”
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Ulrich revisited the model in 2001*
‘HR professionals must be more than Partners; they must be Players…in the game, not at the game’. The new roles as players were:
Coach
Leader
Facilitator
Conscience
Architect
Builder
HR as Player
*Adapted from Ulrich and Beatty (2001)
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Revisited again in 2005**
HR Leader
Strategic Partner
Functional Expert
Employee Advocate
Human Capital Developer
**Adapted from Ulrich and Brockbank (2005)
Stresses on the role of ‘HR Leader’
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Central to business partnering is the devolution of much HR activity to line managers, freeing up HR to take a strategic role helping to align HR strategy to business strategy. HR activities deemed ‘non-strategic ’ face the possibility of being outsourced, unless they can demonstrate that they sufficiently ‘add value’ to the business
Business partnering approach very much supported by CIPD in UK
CIPD viewpoint
The key value of Ulrich’s model does not lie in outlining new structures but in his analysis of HR roles.
Business partnering refocuses attention on some basic issues about how HR is to achieve its aims: supporting line managers, aligning HR activities with the business and delivering efficient services.
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4. Consequences and criticisms - 1
‘HR in crisis’ because it has not been close enough to the business and demonstrated its worth to senior management (Ulrich) or because it has been too eager to embrace a BP role (Kochan)?
Business partnering and the idea of a generalist HR profession rather than business-led specialisms. Does BP support or undermine the quest for a professional identity?
Relatedly, do ‘Balkanised’ HR roles lead to distinct recruitment routes for different HR specialisms and role conflict between different HR specialisms? Yes – Wright (2008); no (Roche and Teague (2012)
Consequences and criticisms - 2
d) If different HR roles are mutually incompatible, can the more business-facing ones run the risk of leading HR into ethical conflicts? See the current CIPD Code of Professional Conduct. E.g. blacklisting in the construction industry and on the Crossrail Project.
e) Can HR safely be devolved to line managers? Some evidence on line managers’ poor conflict management abilities and the increasing remoteness of HR to provide support in dealing with conflict suggests not (Saundry et al; Foster and Scott).
References
Francis, H. and Keegan, A. (2005) Slippery slope. People Management. 30 June. pp26-28,30-31.
Hunter, I., Saunders, J., Boroughs, A. and Constance, S. (2006) HR Business Partners, Gower Publishing Ltd.
Kenton, B and Yarnall, J. (2005) HR- The Business Partner, Butterworth-Heinemann.
Ulrich, D. (1997) Human resource champions: the next agenda for adding value and delivering results. Boston, MA: Harvard Business School Press.
Ulrich, D. and Beatty, D. (2001) From players to partners: extending the HR playing field. Human Resource Management. Vol 40, No 4. pp293-307.
Ulrich, D. and Brockbank, W. (2005) Role call. People Management. 16 June. pp24-28.
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Employee centric HRMOrganisational centric HRMSoft(Beer et al, 1985-Harvard model)Hard(Guest, 1987; Storey, 1987;1992; Fombrun et al, 1984; Michigan model)Human (Guest, 1987)Resource (Guest, 1987) Loose(Guest, 1987)Tight(Guest, 1987)Weak(Storey, 1992)Strong(Storey, 1992)High trust(Noon, 1992)Low trust(Noon, 1992) Humanist approach (Goss, 1994)Instrumental approach (Goss, 1994)Developmental-Humanist(Legge, 1989)Utilitarian-Instrumentalist(Legge, 1989)Flexibility and Adaptability(Storey and Sisson, 1993)Performance centred(e.g. High Performance Work Systems or HPWS-Pfeffer, 1994; 1998) Hermeneutical man(Noon, 1992)Modern man(Noon, 1992)Human relations(Truss et al, 1997)Head count resource(Storey, 1992; Legge, 1995)Control through commitment(e.g. High Commitment Management or HCM-Walton, 1985;
Wood, 1986)
Control through strategic fit(external/internal fit-Hendry and Pettigrew, 1986)Descriptive-functional(Legge, 1995)Critical-evaluative(Legge, 1995) Theory Y (McGregor, 1960; Truss et al, 1997; Guest, 1997) Theory X (McGregor, 1960; Truss et al, 1997; Guest, 1997)Rhetoric? (Truss et al, 1997)Reality?(Truss et al, 1997) Employee champion (Ulrich, 1997) Strategic HR business partner (Ulrich, 1997)Personnel management (Delbridge et al, 2011; Batt and Banerjee, 2011) Strategic HRM (Delbridge et al, 2011; Batt and Banerjee, 2011)
| Employee centric HRM | Organisational centric HRM |
| Soft (Beer et al, 1985- Harvard model) | Hard (Guest, 1987; Storey, 1987;1992; Fombrun et al, 1984; Michigan model) |
| Human (Guest, 1987) | Resource (Guest, 1987) |
| Loose (Guest, 1987) | Tight (Guest, 1987) |
| Weak (Storey, 1992) | Strong (Storey, 1992) |
| High trust (Noon, 1992) | Low trust (Noon, 1992) |
| Humanist approach (Goss, 1994) | Instrumental approach (Goss, 1994) |
| Developmental-Humanist (Legge, 1989) | Utilitarian-Instrumentalist (Legge, 1989) |
| Flexibility and Adaptability (Storey and Sisson, 1993) | Performance centred (e.g. High Performance Work Systems or HPWS- Pfeffer, 1994; 1998) |
| Hermeneutical man (Noon, 1992) | Modern man (Noon, 1992) |
| Human relations (Truss et al, 1997) | Head count resource (Storey, 1992; Legge, 1995) |
| Control through commitment (e.g. High Commitment Management or HCM- Walton, 1985; Wood, 1986) | Control through strategic fit (external/internal fit- Hendry and Pettigrew, 1986) |
| Descriptive-functional (Legge, 1995) | Critical-evaluative (Legge, 1995) |
| Theory Y (McGregor, 1960; Truss et al, 1997; Guest, 1997) | Theory X (McGregor, 1960; Truss et al, 1997; Guest, 1997) |
| Rhetoric? (Truss et al, 1997) | Reality? (Truss et al, 1997) |
| Employee champion (Ulrich, 1997) | Strategic HR business partner (Ulrich, 1997) |
| Personnel management (Delbridge et al, 2011; Batt and Banerjee, 2011) | Strategic HRM (Delbridge et al, 2011; Batt and Banerjee, 2011) |
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ATT00005.htm
Lecture 5 - Contingency best fit SHRM additional notes and exercise PJS.docx
2
U22056 Strategic & Comparative HRM
Lecture 5: ‘Best fit’ strategic human resource management. I: Contingency models
Peter Scott
Extra outline notes and exercise
Best fit models argue that situational factors inevitably affect choices in HRM, including:
· business strategy and conditions, workforce characteristics, management philosophy, the labour market, unions, tasks, technology, laws and societal values
Best fit models usually imply the use of a rather blunt and unrealistic classical rational-planning approach to strategy-making rather than an emergent approach to strategy
EXERCISE: Applying the contingency HR recipe to various business strategies
Here is Jeffrey Pfeffer’s list of thirteen ‘best practice’ HR practices.
· Job security
· Sophisticated recruitment and selection
· Above-average rewards
· Incentive-based pay
· Share ownership
· High degree of information and communication
· ‘Empowerment’, devolved decision-making
· Team-working (i.e. with a strong degree of self-management)
· Training and development
· Multi-skilling
· Single status
· Low degree of internal wage dispersion
· Internal labour market
From a ‘best fit’ perspective, please consider, either on your own or in a small group, which of the above HR practices you think would be particularly important to adopt, and which would be relatively unimportant, for different firms that wished to pursue the following types of business strategy:
1) A quality improvement strategy, or
2) A strategy of maximising innovation, or
3) A cost reduction strategy.
Think in terms of what sort of employee behaviour would be necessary in the case of each strategy and what sort of HR practices would particularly encourage / discourage such behaviour. Just concentrate on what you think would be the most and least important few practices in the case of each strategy. Remember to justify your answers.
Do organisations adapt to the characteristics of the societies in which they are located and are they wise to do so?
The evidence shows that different laws and institutions, economic conditions, and cultural norms account for major differences in HRM.
So firms do adapt to societies in important ways, and both social legitimacy and economic interests argue that they should.
Think: How do cultural attitudes affect the acceptability of HR practices such as individually-based performance-related pay?
Much more about this kind of thing in teaching block 2.
Industry fit
This encapsulates the relationship between firms and the economic, technological and socio-political factors that are specific to their particular industry.
Industry fit encompasses:
· sectoral differences (e.g. private versus public sector)
· differences between industries within a sector
· differences within industries between customer segments or ‘strategic groups’.
Think: What differences are there in production technology across manufacturing industries and how do these affect HRM?
Think: What sort of differences are there in HRM within a service industry such as hotels, banks, IT organisations etc?
Organisational fit
Do managers mould their HR strategies to fit in with other critical features of their particular business, including its wider strategy and its structural features, and should they?
Question: What does research show on how HRM is affected by:
· organisational size? (i.e. does one size fit all?)
· organisational life-cycle stage? (i.e. does one fit encompass all stages?)
Among the most influential models of organisational fit in HRM are those that have argued that the key issue in organisational fit concerns the link between competitive strategy and HR strategy.
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Lecture 5 - Contingency best fit SHRM.ppt
SCHRM Lecture 5
‘Best Fit’ strategic HRM
I: contingency models
Peter Scott
Plan of session
Emergence of best fit models and differences with ‘best practice’
Two types of ‘best fit’ HRM
Contingency approaches to ‘best fit’
Life cycle models
Competitive advantage models
Limitations of these models and available evidence
1. Emergence: objections to Best Practice
Best Practice – a set of positive, desirable, general HRM principles and practices from which all firms can (allegedly) benefit
Origins in ‘soft HRM’
Long-term orientation
Universalist
Some objections
A ‘utopian cul de sac’ (Purcell, 1999).
Only suitable for certain types of firm in certain market segments?
Ignores context
Best practices applied to all staff?
Are some of the practices more key than others? (See next week’s lecture)
Strategic HRM: the best-fit school.
‘Outside – in’ models
In strategic HRM, there is a fundamental debate over how HRM is, and should, be linked to wider business strategy.
‘Best fit’ with what? – Aligning existing organisational HR practice with what is deemed to be the most applicable approach to meet the firm’s wider business strategy
(two main variants: this week and next week).
For many scholars, it seems obvious that strategic HRM rests on a contingency position: firms fit their HRM to their particular strategies and environment (the best-fit school).
Best fit models are also known as ‘outside – in’ models:
Looking at what the organisation ‘needs’ by reference to adaptation to the external environment
HR strategy is integrated upwards into the wider business strategy
2. Two types of ‘best fit’ approach
This week
- Contingency approaches
- Vertical integration between HR strategy and company strategy
- External fit between outside competitive environment and HR strategy
Next week
- Configurational approaches
- Horizontal integration between both the various different elements of HR strategy and wider company strategy
- Internal fit between bundles of HR practices
3. The ‘contingency’ best fit approach
- A ‘matching’ model
- A top-down approach. Senior management cascade strategic objectives down to functional areas. The role of HR is largely restricted to effective implementation
- HR practices should be closely integrated with organisational strategy. Different behaviours may be required to enact different competitive strategies
- Need to identify behaviours required by staff to achieve the organisation’s goals and ensuring these are consistent with the overall business activities of the organisation
Essentials of contingency ‘best fit’ approaches to strategic HRM
- As you’ll have gathered from the last slide, best fit is basically a hard HRM approach (‘needs’, ‘required’). No much room for workforce views here.
- Emphasises the contingent relationship or alignment between an organisation’s human resource policies and practices, and its business strategy and in turn the external context of the firm
- Vertical integration, where leverage is gained through HR procedures, policies and processes, is therefore acknowledged as a key element of best fit and SHRM
4. Models of different contingency approaches
- Life cycle models emphasise the alignment of appropriate HR policies and practices for the various life stages of a business.
- Competitive advantage models emphasise alignment of relevant HR policies and practices with generic competitive advantage strategies
4, contd – Life cycle models
Life-cycle models
In the start-up phases: Flexibility in HR
In the growth stage: Growth or size of organisation, development of more formal HR policies and procedures
In the maturity stage: Move to cost control by HR strategy
In the decline stage:
How can HR strategy secure and retain the type of HR that is necessary for the organisation’s continued viability, as industries and sectors develop?
Which HR policies and practices are more likely to contribute to sustainable competitive advantage as organisations go through their life-cycle….sustainability
5. Competitive advantage models
Competitive advantage models
- Three key bases of competitive advantage (Miles and Snow): innovation to outpace competitors, cost leadership, differentiation through quality and service. Implies different HR strategies, e.g.
- The ‘cost reduction’- led HR strategy is likely to focus on the delivery of efficiency through mainly ‘hard’ HR techniques, whereas ‘quality enhancement’ could be compromised?
- The ‘innovation’-led HR strategies focus on the delivery of added value through ‘softer’ HR techniques and policies
6. Limitations of best-fit models of SHRM
Can be applied to a single product firm or to an individual business unit, but rarely to the company as a whole
Best-fit models tend to ignore employee interests in the pursuit of enhanced economic performance.
Lack of emphasis on the internal context of individual businesses within the same sector, and the unique characteristics and practices that might provide its main source of sustainable competitive advantage.
Exploring ‘fit’ in more detail
- Societal fit
- Industry fit
- Organisational fit
More about some of these in later parts of the unit
Good textbook explanations of BF in:
- Truss, C., Mankin, D. and Kelliher, C. (2012) Strategic Human Resource Management, Oxford, Oxford University Press.
- Boxall, P. and Purcell. J. (2016) Strategy and Human Resource Management, 4th ed., Basingstoke, Palgrave Macmillan.
- Farnham, D. (2015) Human Resource Management in Context: Strategy, Insights and Solutions, 4th ed., London, CIPD.
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Lecture 6 - Configurational best fit HRM - PJS skeleton notes.docx
1
SCHRM Lecture 6
‘Configurational’ approaches to best fit strategic HRM
Peter Scott
Skeleton notes for session
Session plan
1. Locating configurational approaches within strategic HRM schools of thought
2. Essential elements of the configurational approach
3. Emergence of configurational approaches in the HRM literature (what’s in a name?)
4. Different types of configurational approach
5. Conclusions, and indication of how themes may be developed in future lectures
1. Locating configurational approaches within strategic HRM schools of thought
Best practice approach proposes use of a complete range of sophisticated HR techniques to enable high levels of employee commitment and company performance
The contingency best fit approach recommends use of a limited range of these HR techniques, depending specifically on which ones will contribute to enhancing the firm’s chosen business strategy in the external market it faces (external fit / vertical integration)
The configurational best fit approach to strategic HRM is concerned not only with how chosen HR practices contribute to external fit, but how HR practices gel and interact with each other within the firm to produce the desired outcomes (internal fit / horizontal integration)
2. Essential elements of the configurational approach
So, configurational approach slightly more complex, takes more variables into account in pursuit of the same ends.
Concerned with particular bundles of HR practices
Requires the chosen bundle to be applied as a whole and for the practices to be mutually reinforcing. Therefore achieving synergy between the different HR techniques and, in turn, maximising business outcomes.
Also assumes that HR practices will be applied consistently
More concern for what is going on inside the firm?
3. Emergence of configurational approaches in the HRM literature (what’s in a name?)
Mainly from the 1990s, a number of statistically-based studies claim to show numerical associations between the adoption of particular HR practices and various measures of firm performance and / or employee commitment. (See lectures 8 and 9 for more detailed critical evaluation of this strand of literature.)
Key studies include Huselid in Academy of Management Journal 1995, MacDuffie in Industrial and Labor Relations Review, 1995, Appelbaum et al Manufacturing Advantage: Why High Performance Systems Pay Off (ILR Press, 2000), Godard in British Journal of Industrial Relations 2004.
Even proposing a link between HR practices and ‘life or death’ organisational outcomes in some cases, e.g. West, M. et al (2002) The link between the management of employees and patient mortality in acute hospitals, International Journal of Human Resource Management, 13, 8, 1299-1310.
Important issue here is the claim that linking particular HR practices are the key to success. Numerous names for particular combinations, championed by various authors, e.g.
· high performance work systems (HPWS) / high performance work practices (HPWP)
· high involvement management (HIM), alternative work practices (AWPs), high commitment management (HCM), innovative work practices (IWPs)
Is this just different labels on the same bottles? Don’t get too hung up on this. Considerable similarity in the kinds of HR techniques proposed. The first group are more aimed at organisational performance; the second group are more allegedly designed to elicit employee involvement and commitment – tend to stress participation, team-working and skill development and decentralised management a bit more.
Again, a more-in depth critical look at the consequences of these paradigms in lectures 8 and 9.
4. Different types of configurational approach
Key issue: which bundles of HR practices to adopt (and which to avoid)?
In keeping with the best fit approach, there is a sense that different organisational strategies will lead to HR strategies centred on the concertation of different bundles. Based on value and uniqueness of employee skills, Lepak and Snell (2002) Examining the human resource architecture, Journal of Management, 28, 4, 517-543, combined with their earlier work, proposed four configurations: commitment-based, market-based, compliance-based, and collaborative-based.
|
Commitment-based HR system
· Commitment- based HR system nurtures employee involvement and maximises the firms’ return on human capital investments. · Firms will invest substantially to develop unique skills through extensive training initiatives. · Jobs are loosely defined to capitalise on employee potential. · Employees are encouraged to learn and master firm specific competences. · Pay will be designed to link to performance.
|
Collaborative-based HR system
· Collaborative- based HR systems encourage and reward cooperation, collaboration and information sharing. · Organisations are more likely to focus on process facilitation and team building. Communication, exchange, job rotations are established to facilitate information sharing and the transfer of knowledge. · Group-based rewards and appraisal will be used to develop and integrate interdependence trust and collaboration.
|
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Compliance-based HR system
· Compliance- based HR activities focus on securing compliance with the terms and conditions. · Firms are more likely to concentrate on enforcing rules /regulations, along with the attainment of pre-establish standards. · Training, performance and compensation are likely to be job-based.
|
Market-based HR system
· Market- based HR system emphasises staffing and deployment of skills for immediate contribution. It relies heavily on the external labour market for securing the right people to do the jobs. · Organisations are willing to pay market wage to attract the needed human capital with necessary skills and are less likely to invest heavily in training and development. · These skills are easily acquired in the market.
|
Huselid (1995) suggests that there are two bundles of HR practices associated in his research with higher levels of performance and productivity and lower employee turnover:
1) an employee skills and organisational structures bundle: job design, sophisticated recruitment, training, participation, profit sharing;
2) an employee motivation bundle: promotions linked to merit, appraisals linked to pay.
Paauwe and Boselie (2005): top 4 bundle practices:
· Training and development
· Pay and reward contingent on performance
· Performance management / appraisal schemes
· Sophisticated recruitment and selection
Becker et al (1997): the need to produce ‘powerful combinations’ of HR techniques and to avoid ‘deadly combinations’, e.g. introducing teamworking when the appraisal system is very focused on individual achievement.
5. Conclusions, and indication of how themes may be developed in future lectures
Perhaps a more sophisticated approach to best fit…
… but still vulnerable to many of the criticisms of best fit generally.
Much of the debate on contingency approaches turns on the reliability and validity of the claimed associations with firm performance and employee commitment. These issues to be interrogated in later lectures.
Further reading
10/17
ATT00008.htm
Lecture 7 PJS 2017-18 RBV and SHRM.pptx
SCHRM Lecture 7 Strategic HRM: the resource-based view
Peter Scott
Outline of session
How RBV fits into other SHRM approaches being discussed
Brief recap on main origins and assumptions of RBV
Specifically human resources and RBV
Applying RBV to HR strategy
Some criticisms of RBV
1. RBV compared to previous approaches discussed
Uses the firm’s internal resources and capabilities as its starting point
An ‘inside-out’ approach
More about creating advantage than fitting in to the external environment
2. Brief recap on main origins and assumptions of RBV
Modrn-day approach to RBV normally associated with Barney’s paper in Journal of Management, 1991.
RBV concentrates on firm’s strengths and weaknesses, not opportunities and threats
Human capital and competitive advantage. People at all levels in the organisation as an asset. Usually a ‘high road’ approach – although doesn’t have to be
The assets concerned are partly subjective, intangible and hard to pin down
Main Q: what has the firm got and can exploit that others haven’t got and how is it possible to keep it that way?
So, key resources (human or otherwise) need to be RVIS
Rare – not readily available
Valuable – capable of deriving some advantage
Non-Imitable – hard to copy
Non-Substitutable – hard to replace with something else that will have the same effect more easily and cheaply
3. What’s different about human resources?
They are free to leave the organisation
They work in return for wages and may want higher rewards
They can resist the firm’s authority in various ways
They may be more or less motivated
They expect reasonable conditions of employment and career advancement
Human resources within the RVIS framework, 1
Rare – how easily available on the external labour market? How long does it take to develop them to make them productive? Depends on absolute level of skill, and whether the skills are firm-specific or generic.
Think: possessors of very rare skills may also be very difficult to manage, especially if they are aware of their own value in the labour market (leadership, tech or intellectual skills)
Much obsession with this aspect in HR circles: concentration on ‘talent’
Valuable – does it alter customers’ perceptions of the benefits they derive in doing business with the firm, e.g. high quality of customer care?
Valuable human resources have the ability to create value and opportunities for the firm
Human resources within the RVIS framework, 2
Non-Imitable – how easy a human resource is to copy or imitate by other firms depends on:
Causal ambiguity: i.e. how easy is it to understand the link between the resource and how it leads to competitive advantage?
Social complexity, i.e. the subtlety of internal and external human relationships, synergies between team members, etc., that develop over time
Unique timing and learning, i.e. ‘knowing when to be in the right place at the right time, and knowing when and how to take advantage of it
Human resources within the RVIS framework, 3
Non-Substitutable – how difficult is it to substitute an alternative resource and get the same advantage, e.g. replace a human by a machine, or a well-trained human with an untrained one? Q: is HR itself substitutable – depends who does it?
Easily imitable or substitutable human resources could be candidates for outsourcing (see later lecture) or automation.
Competitors may be able to imitate if they can poach key staff, unless firm can legally prevent them from using the knowledge or contacts for a defined period (post-contractual restraint
4. Applying RBV to HR strategy. The question becomes: what role can HR play…
… in creating generic ‘core competencies’ (Hamel and Prahalad) or ‘distinctive competencies’ to enable competitive advantage through staff
Not an issue of having idiosyncratic competencies, because these may be good, bad or indifferent
Issue for HR strategy is about positively developing and maintaining the especially – or potentially - advantageous distinct competencies
RBV and HR strategy
Human resource advantage (positive differentiation through human resources) can be developed in two ways:
human capital advantage through superior forms of human capital (i.e. recruiting and retaining people with high-value tacit knowledge).
Implies recruitment and selection, training and development, development of firm-specific skills.
organisational process advantage through superior social capital (i.e. managing people in ways that create higher levels of trust, cooperation and commitment)
Implies employee voice, teamworking, training and development
‘Social capital’ can mean a number of things…
Implies development of an HR system rather than the development of individual HR policies to support these possible objectives
5. Criticisms of RBV approach to HR strategy, 1
Using RBV approach seems to give HR a key role in the organisation in turning ‘human capital’ into a source of sustained competitive advantage, but:
People = ‘human capital’? Instrumental
Is RBV aimed just at the ‘talent’ or the workforce as a whole? (Wright et al., Journal of Management, 1994) argue the latter; Lepak and Snell the former.
More relevant to private sector than public sector?
Use of metrics. Problems of what’s measured and how. How easy is it to measure how HR is leading to higher performance.
Criticisms, 2
Danger of exaggerating differences between firms in the same sector / market
In concentrating on the firm itself, underplays external sources of difference and competitive advantage (e.g. societal factors – see institutional literature and later lectures)
Not much detailed empirical research testing claims of RBV!
Key points
RBV has a very different departure point to other approaches to SHRM
Arguably, RBV gives HR a more proactive role in the firm
RBV is instrumental in considering there to be a potential theory of SHRM
Essentially an economist’s approach, though, and that can create problems for the HR role
Useful textbook references on RBV
Boxall and Purcell (2016) Strategy and Human Resource Management, 4/e, esp. ch. 4.
Farnham (2015) Human Resource Management in Context, 4/e, section 5.7.
Truss et al, sections 6.1-6.5
ATT00009.htm
Lecture 10 2017-18 PJS Content, process, implementation issues.pptx
SCHRM Lecture 10 HR strategy: content, process and implementation issues
Peter Scott
What this session is covering
In previous sessions we’ve covered the main different approaches to HR strategy
This session:
Content – what should go in an HR strategy, available choices?
Process – how are HR strategies developed?
Implementation – how are HR strategies put into practice, particularly considering the roles of line managers?
Ideally, normative models of HR → performance suggest there should be strong linkages between these three stages. This is difficult!
Key references and further reading
Truss et al, Ch 7.
Boxall and Purcell, 4/e, partic. pp. 161-168.
Hope-Hailey, V. et al (1997) A chameleon function? HRM in the ʼ90s, Human Resource Management Journal, 7, 3, 5-18.
Purcell, J. and Hutchinson, S. (2007) Front-line managers as agents in the HRM – performance causal chain, Human Resource Management Journal, 17, 1, 3-20.
Wright, P. et al (2004) Current approaches to HR strategies: inside –out versus outside – in, Human Resource Planning, 27, 4, 35-47.
1. Content issues
HR strategy = range of choices in people management. May be different strategies for different groups, e.g. managers and professionals vs contingent labour
Choices to achieve a particular purpose, i.e. a perceived improvement on what currently exists
HR strategy as a sub-division of wider business strategy (whether outside – in or inside – out)
Content issues, 2: Influences on HR strategy choices to consider
External influences
Labour markets
Economic climate and allied factors
Business situation facing organisation
Socio-political factors, e.g. Brexit. How might this impact on HR strategy?
Internal factors
Organisational culture
Organisational structure
Technology
General staffing levels
Employment relations climate
Content issues, 3: HR system levels
Becker, B. and Gerhart, B. (1996) The impact of HRM on organizational performance, Academy of Management Journal, 39, 4, 779-801.
System architecture – overall strategy level, broad approach, strategic ‘fit’ (‘missions’, ‘visions’, ‘values’, etc etc etc.). Sub-strategies for different occupational groups within overall strategy. Issues of ‘best fit’ important?
Policy alternatives – choices within individual HR policy areas, such as reward, staff development, recruitment and selection, performance management, etc. Issues of ‘best practice’ important?
Practices – use of organisational processes to enable implementation
Content issues, 4: consistency in HR strategy
This relates back to ‘horizontal fit’ (lecture 6): configurational consistency across policy areas in HR strategy
Why?
‘Organisational justice’
Giving out a common message across policy areas. Reinforcement.
HR strategies take time to achieve benefits
2. Process issues: the ‘how’ questions
How will it work exactly, and who should be involved in the process, doing what, at which stages?
Wright et al (2004)
Scanning (cf. Mintzberg)
Identifying strategic business matters that need addressing
Identify key people in strategy process (e.g. ‘champions’, change agents)
Devise strategy and metrics
Communication of strategy
Process issues, 2. But…
Not much ‘scanning’
Not much ‘identification of strategic business issues’
Very variable involvement of line managers in strategy development, especially in any formal capacity
Indicative of a ‘top-down’ mentality and predominantly inward-looking
(More on these issues next week)
Wright et al therefore argue for more of an outside – in- rather than inside – out-driven approach
Process, 3. Maximising the likely effectiveness
Coherent and integrated HR strategies are only likely to be developed if the top team understands and acts upon the strategic imperatives associated with the employment, development and engagement of people.
More effective if there is an HR director as a member of the top management
Process needs to take account of how employees will experience the strategy. Need for consistent, equitable and distinctive HR system
3. Implementation issues: putting strategy into practice
Not a massive amount of good news here
Gratton, L. and Truss, K. (2003) The three-dimensional people strategy: putting human resources policies into action, Academy of Management Executive, 17, 3, 74-86.
Vertical alignment – between overall business strategy and HR strategy
Horizontal alignment – between different HR policy areas
Action dimension – HR policy as experienced by employees and behaviours and values of managers
Implementation, 2. Disconnections between the three dimensions can occur for various reasons
Lack of consistency or consensus between different dimensions
Lack of support from different parties to put strategies into action
Disembedded policies or strategies. Lip service is paid, but nobody really means it. ‘Reverse justification.’
Role of line managers may be crucial here…
Implementation, 3. Role of line managers
Key role in implementing HR strategies, as identified by Storey and by Hope-Hailey et al. Important conduit for how employees ‘experience’ HR and for transmitting ‘belief’ in overall strategies
‘Line managers are not simple conduits or pipelines. Line manager action or inaction is often responsible for the difference between espoused HR policies and their enactment. Many HR policies can only be converted to practice by line managers.’ (Boxall and Purcell, 2016, 166-7.)
Implementation, 4. Reasons not to be cheerful
Pursuit of own agendas
Role conflict / role overload
Lack of confidence or expertise. Line managers’ poor conflict management abilities (Saundry et al, 2014, 2016) ‘competence and confidence of line managers was a significant barrier to early resolution and managing conflict…. concerns appeared to be rooted in the impact on internal relationships’ (2016, 26).
Increasing remoteness of HR to provide support in dealing with conflict (Saundry et al, 2016, 30-31; Foster and Scott, 2015)
Key concluding points
Todays discussion feeds back into to the vonsideration of different types of HR strategy discussed in weeks 4-7
There are a number of dimensions of alignment that must be considered at all levels between the formulation and enactment of HR strategy
Alignment is affected by various aspects of organisational context
Much depends on the dangers of ‘falling at the last fence’: the HR – line manager connection
HR strategy implementation is one example on the management of change… see next week’s session
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Lecture 12 - HR and change management.ppt
U22056 Strategic & Comparative HRM
Lecture 11: HR and change management
Peter Scott
Aims of today’s session
To analyse different perspectives on organisational change and change management
To consider approaches to the roles of the HR function in change management
To evaluate available evidence about HR’s roles in change management
Textbook reading
On HR function and change management, see chapter 12 in 1st edition of Kramar & Syed text or ch. 15 in Truss et al text (full references for these books in unit programme)
Quite a conundrum…
Much is talked about organisational change – and much nonsense…
Particularly, change as a constant…
So why do so many change initiatives fail to deliver? Wide range of estimates. Balogun and Hope-Hailey quote failure rate for major changes as high as 70%
Extreme examples?
- The NHS and pathological serial reorganisation – see C Pollitt – ‘New Labour’s redisorganization’, Public Management Review, 2007.
Consequences:
- rate of change makes it impossible to assess organisational designs
- transition costs of organisational restructuring
- loss of faith and commitment
- Ahlstrand (1990)The Quest for Productivity, CUP – Esso Fawley refinery, managerial careers and 20 separate productivity deals in 20 years
1. Approaches to change
Several possible ways of sub-dividing
- How foreseen, or foreseeable: proactive vs. reactive
- How rapid, or extensive: transformational vs. incremental
- Its manageability as a process / how it occurs: rational / planned vs. emergent / processual
Rational vs processual approaches
Rational
- Quantitative / technicist
- Sequential / linear (design – plan – implement – review)
- Unitary / top-down
- Prescriptive
- Hard systems / functionalist
Emergent / processual
- Change as a social process with more uncertain trajectory and outcomes (even strategic change)
- Change as political, emotional and social
- Context-sensitive
Processual approaches
Important writers: Pettigrew and Whipp, Patrick Dawson
Dawson’s approach:
- Substance of change (what change)?
- Politics of change (internal and external to organisation) (change processes)
- Context of change (internal and external)
Processual approach criticised for being complex, difficult to use for predictive purposes, vague… but almost certainly a more accurate picture of how (messily) change actually occurs and the interplay of the circumstances, interests, ideologies and institutions involved.
Change as the product of agendas and opportunities rather than inevitability
2. Approaches to the role of HR in change management
Ulrich’s approach: HR as strategic and people-oriented, with a lead role as ‘an agent of continuous transformation’.
HR as change agents.
Established literature on the characteristics and skills of change agency as a highly political undertaking: Buchanan and Boddy, Buchanan and Badham
HR roles as change agents, 1
Caldwell (2001). 4 types of HR change agent. Note the overlap towards the top left corner with Ulrich’s schema
HR vision
HR expertise
Trensformative change
Incremental change
Champion
Adapter
Consultant
Synergist
HR roles as change agents, 2
Alfes, Truss and Gill (2010) – HR role depends on the content and the process of change
Content proactive
Content reactive
Process reactive
Process proactive
HR focused
Change driver
Change focused
Responsive
HR levers to affect the content of change
- Recruitment and skills needs
- Performance management
- Training and development needs
- Reward systems
- Changes in working practices
- Employee relations processes, notably participation, communication and negotiation
- Culture change
Communications processes are key to the content of HR intervention in several of the above!
Problems for HR professionals as change agents
- Role conflict, between HR and line managers on one hand and senior managers on the other
- Concern for equity and risks to the organisation’s legal position (e.g. consultation, discrimination)
- Need to see the change within the context of impact on the rest of the organisation (the bigger picture)
3. Evidence on HR role in change management. i) Technical change
WERS evidence: relatively little HR intervention in technical change initiatives. CIPD 2005 study – no HR intervention in roughly half of cases.
Why?
- Perceived as an engineering issue, requiring specialist expertise
- If involved at all, tends to be at the implementation and use phases rather than the design phases (oh dear, though, what about the human factor…?)
- Less workforce resistance to technical rather than organisational change
ii) HR involvement in organisational change
Tends to be much earlier involvement and greater number of employee relations problems. XpertHR Managing Change survey 2010:
- 60% of HR depts involved at initial proposal stage (4th highest category)
- 81% involved at planning stage (2nd highest category)
- 79% at implementation stage (highest category)
Main HR tasks in organisational change
XpertHR Managing Change survey 2010:
- Providing support for employees (93%)
- Analysing potential impact on employees (90%)
- Preparing information documents about change (83%)
- Developing timeline schedules (76%)
- Developing training programmes (70%)
However…
- Little evidence that HR is often involved in subsequent evaluation of change initiatives (only 27% of respondents)
- Some dissatisfaction that HR unable to intervene early enough in the change process
- Communication activity often to ensure legal compliance rather than for other reasons
- Greater satisfaction about how HR expertise is used within SMEs rather than large companies responding to survey
Overall picture
Mixed. Processes and outcomes of change are messy and difficult to manage and predict.
Considerable HR intervention, but little sign of Ulrich-style HR change agency. Dangers of role conflict between HR and other groups.
HR sometimes involved only at later stages. Alarming lack of evaluation of change, which bodes ill for organisational learning and the effectiveness of subsequent changes.
