Strategic Human Resource

profileAG7400
ch06.ppt
Home>Business & Finance homework help>Management homework help>Strategic Human Resource

Type author names here

© Oxford University Press, 2018. All rights reserved.

Strategic Human Resource Management, 2nd edition

Chapter 6: The foundations of

strategic human resource

management

Bailey, Mankin, Kelliher, and Garavan

Bailey et al: Strategic Human Resource Management 2e

Learning objectives

By the end of this session you will be able to:

  • appreciate how the field of SHRM has developed over the past 35 years;
  • outline the differences between personnel management, HRM, and SHRM;
  • explain the core features of universalist (best practice) approaches to SHRM;
  • understand the diverse ways in which contingency theory (best fit) has been applied to SHRM;
  • evaluate configurational approaches to SHRM such as high-performance work systems (HPWSs) and high-commitment work systems (HCWSs);
  • critically evaluate the universalist, contingency, and configurational perspectives on SHRM.

Bailey et al: Strategic Human Resource Management 2e

What is SHRM?

  • Early commentators were interested in the difference between personnel management and HRM (Martin-Alcazar et al., 2005)
  • A key distinguishing feature was felt to be the linking of HR practices to the strategic aims of the organization (Miles & Snow, 1984; Storey, 1992).
  • However, the advent of the term ‘strategic HRM’ served to muddy the waters (Wright & McMahan, 1992).

Bailey et al: Strategic Human Resource Management 2e

What is SHRM? (cont.)

  • If HRM is concerned with how HR practices linked with strategy, then what is SHRM (Wright & Boswell, 2002)?
  • Truss and Gratton (1994: 666) suggest the following distinction:

  • ‘we should, perhaps, regard SHRM as the over-arching concept that links the management and deployment of individuals within the organization to the business as a whole and its environment, while HRM could be viewed as an organizing activity that takes place under this umbrella’.

Bailey et al: Strategic Human Resource Management 2e

Typology of HRM research

Bailey et al: Strategic Human Resource Management 2e

Definitions of SHRM

Bailey et al: Strategic Human Resource Management 2e

The universalist approach

  • The universalist approach assumes that there is one ‘best way’ to manage people that is applicable across all contexts.

  • Best-practice is the most cited example (for instance, Pfeffer, 2005).

  • Although the best-practices approach is very persuasive in theory it is much more difficult to achieve in practice.

Bailey et al: Strategic Human Resource Management 2e

Pfeffer’s 13 interrelated ‘best practices’ (2005)

  • Employment security
  • Selective recruitment
  • High wages
  • Incentive pay
  • Employee ownership
  • Information sharing
  • Participation and empowerment
  • Self-managed teams
  • Training and skill development
  • Cross-utilization and cross training
  • Symbolic egalitarianism
  • Wage compression
  • Promotion from within

Bailey et al: Strategic Human Resource Management 2e

  • Little agreement over which practices matter most
  • Great variety of different approaches advocated
  • Approaches are too generic
  • No account taken of costs of implementation
  • A-theoretical
  • No account of context
  • Aspirational not realistic
  • Who are they ‘best’ for?

Critiques of the universalist perspective

Bailey et al: Strategic Human Resource Management 2e

Contingency approaches to HRM

  • Contingency approaches, or best-fit, are premised on the notion that the way in which people are managed in organizations will vary according to circumstances.
  • Whereas the universalist perspective suggests that there is one best way of managing people, the contingency approach takes account of factors such as organizational size, location, sector, strategy, and the nature of work.

Bailey et al: Strategic Human Resource Management 2e

Contingency approaches (cont.)

  • Appropriate HRM approaches will vary according to the different lifecycle stages from start-up to maturity (Baird & Meshoulam, 1988).
  • HRM is contingent upon the strategic direction of the organization (Devanna et al., 1984; Miles & Snow, 1984).
  • The Harvard model (Beer et al., 1984) stresses the importance of stakeholder interests and situational factors in HRM decision making.

Bailey et al: Strategic Human Resource Management 2e

Contingency approaches (cont.)

  • Miles & Snow (1984) link HR approaches with the 3 strategic options of:

  • Defender: operating in a stable market and concerned with defending their position.
  • Prospector: with a strategy of innovation and operating in a dynamic market.
  • Analyser: operating in an intermediary position.

  • Schuler & Jackson (1987) argued that performance will improve if HR policies and practices are aligned to strategic focus because employees will be encouraged to behave in ways that support the overarching strategic direction of the organization.
  • HR practices should be aligned with the prevailing strategic focus of the organization using the strategic options outlined by Porter (1985) of cost leadership, quality, or innovation.

Bailey et al: Strategic Human Resource Management 2e

Schuler & Jackson, 1987

  • Innovation strategy:

will require behaviours focused around creativity, cooperation, risk-taking, and tolerance of ambiguity.

  • Fostered through HR techniques such as selecting highly-skilled staff, appraisals focusing on individual and group performance, broad career paths, high levels of discretion, and tolerance for failure.

Bailey et al: Strategic Human Resource Management 2e

  • Cost reduction strategy:

will require predictable behaviours, a short-term focus, concern for quantity rather than quality, and low risk-taking.

  • Achieved through HR policies focused on concern for results, use of flexible working practices, little attention to training and development, tightly defined jobs, and work simplification.

Schuler & Jackson, 1987

Bailey et al: Strategic Human Resource Management 2e

  • Quality enhancement:

tends to require a high concern for quality, low risk-taking, high commitment to organizational goals, and long- to medium-term focus.

  • Fostered by HR practices that encompass fixed job descriptions, high focus on empowerment, concern for feedback, job security, and training and development.

Schuler & Jackson, 1987

Bailey et al: Strategic Human Resource Management 2e

Criticisms of the contingency approach

  • Little empirical evidence supporting the idea that matching HR practices to business strategy leads to positive outcomes (Truss & Gratton, 1994; Huselid, 1995).
  • Concept of ‘fit’ implies rigidity and inflexibility that may be incommensurate with positive outcomes (Lengnick-Hall & Lengnick-Hall, 1990).
  • It is also not clear which contextual aspects may be most important and relevant for HRM in terms of creating a ‘fit’ (Boxall & Purcell, 2008; Marchington & Wilkinson, 2008).

Bailey et al: Strategic Human Resource Management 2e

Criticisms of the contingency approach

  • Matching HR and business strategies implies that all organizations have an articulated strategy with which HR approaches can be matched, which is frequently not the case (Boxall, 1991; Purcell, 1999).
  • There are a variety of ways in which HRM and strategy can be linked, and the best-fit approach implies that corporate strategy precedes HR strategy.
  • There are different perspectives on strategy and the best-fit approach is commensurate with only one of these, the ‘classical’ approach (Truss & Gratton, 1994; Purcell, 1999).

Bailey et al: Strategic Human Resource Management 2e

Criticisms of the contingency approach

  • Role of human agency needs to be taken into consideration: The negotiation and interpretation that takes place in the development of HR strategies at these varying levels militates against the emergence of a coherent system.
  • Disconnect between intended HR strategy and implemented HR strategy is to be expected given the Processual perspective on strategy.
  • Organizations are complex and comprise different employee groups.
  • Contingencies do not of themselves determine the approach that should be taken towards HRM.

Bailey et al: Strategic Human Resource Management 2e

Configurational approaches

  • The suggestion is that there are patterns of choices available to organizations in their approach to SHRM (Martin-Alcazar et al., 2005), and that where logical bundles of practices are adopted, then they are more likely to impact positively on performance.
  • ‘High-peformance work systems’ (HPWSs) first used in 1990s, has become dominant perspective.

Bailey et al: Strategic Human Resource Management 2e

HPWSs are generally regarded as comprising categories of practices aimed at enhancing the following 3 areas:

  • employee skills (e.g. selective staffing, extensive training, competitive pay, and internal promotions);
  • employee motivation (e.g. performance contingent pay and results-oriented appraisals);
  • employee empowerment (e.g. voice and participation, formal complaint resolution, and teamwork).

(Chi & Lin, 2011)

High-performance work systems

Bailey et al: Strategic Human Resource Management 2e

  • High-involvement work systems typically comprise HRM approaches focusing on enhancing involvement and participation, and generally span hiring, performance appraisal, and development practices that foster greater levels of skill, teamworking, and problem-solving (Boxall & Macky, 2009).
  • High-commitment work systems generally focus on fostering convergence of employee interests with organizational goals by means of flexible job design, selective hiring, high involvement, team-based productions systems, and job rotation (Hauff et al., 2014).

Variants of HPWSs

Bailey et al: Strategic Human Resource Management 2e

  • HPWSs and their variants are contrasted favourably with control-oriented HR approaches (Jiang et al., 2012).
  • However in practice hybrid systems are likely to exist (Hauff et al., 2014).
  • What should be included? There is some confusion over:

  • Constituent elements
  • How they are inter-related

HPWSs

Bailey et al: Strategic Human Resource Management 2e

  • Many of the criticisms of the universalist approach apply.
  • Little empirical support for coherent ‘bundles’ of HR practices.
  • Some industries more likely to have HPWSs than others.
  • High-commitment systems likely to be costly.

Critiques of the configurational approach

Bailey et al: Strategic Human Resource Management 2e

  • Most organizations adopt a variety of HR policies and practices (Clinton & Guest, 2013).
  • Human capital theory suggests firms will accrue more benefits from a commitment-based approach to managing those with rare, high-level skills only.
  • However, research found that employees in all types of work are more committed when managed with High-Commitment Work Systems (Clinton & Guest, 2013).

Architectural approaches

Bailey et al: Strategic Human Resource Management 2e

  • Having different approaches to different employee groups raises questions of fairness, justice, and equity and may be illegal in certain contexts.
  • It may also undermine social capital.

Critiques of architectural approaches