Lecture 1 & 2 Strategic Hrm 2006

HUMAN RESOURCE MANAGEMENT

Dr. Ernesto Dimaculangan, Ph.D.Singapore Institute of Commerce

Schedule October 10 9:30am – 5:30 pm

Lecture 1 & 2 – Introduction to HRM and Strategic HRM

Lecture 3 – Recruitment, Selection and Placement

Lecture 4 & 5 – Employee Learning, Training, Development and Career Management

Lecture 6 & 7 – Employee’s Compensation

Lecture 8 - Managing Diversity

Schedule

October 15 2:00 pm – 5:30 pm Lecture 8 - continuation Lecture 9 – Performance Management Lecture 10 – Managing a Global

Workforce

Lecture 1 & 2 Introduction to HRM and

Strategic Human Resource Management

Definitions

HRM: Refers to the policies, practices and

systems that influence employees’ behaviour, attitudes and performance.

(Di Cieri, 2003)

HRM includes anything and everything associated with the management of employment relations in the firm.

(Boxall, Purcell, 2003)

Attempt to Clarify the Approaches in Managing PeopleGuest 1987; Storey 1992

“soft” variants of HRM – used to describe approaches aimed at enhancing the commitment, quality and flexibility of employees

“hard” variants of HRM – describes the emphasis on strategy where human resources are deployed to achieve business goals in the same way as any other resource. Cost minimization as in low wages, minimal

training, close supervision Lean production (downsizing)

New Terms for HRM

High commitment management (HCM) instead of soft HRM

Strategic HRM instead of hard HRM

Two Models Influential in the Interpretation of HRM The Matching Model

Developed by Michigan Business School Introduced the concept of strategic

HRM A tight fit between HR and business

strategy Use of HR policies and practices

integrated with each other and with the goals of the organization

The map of HRM territory model Harvard Model

Assumptions of Matching Model Managing people will vary from

organizations to organizations and is dependent on organizational context

Unitarism – the assumption that conflict or differing views cannot exist in the workplace because everyone (managers and employees) are working to achieve the same goal.

The model formed the basis of ‘Best Fit” school of HRM

Matching Model Key areas for the development of

appropriate HR policies and systems; Selection of the most suitable people to meet

business objectives Performance in the pursuit of business

objectives Appraisal, monitoring performance and

providing feedback to the organization and its employees

Rewards for appropriate performance Development of skills and knowledge

required to meet business objectives

The Matching Model of HRM

FIRM

OrganizationStructure

HRM

Mission andStrategy

Economic Forces

Political Forces

Cultural Forces

Map of HRM Territory Model

“the map of HRM territory” model or Harvard Model (Beer et al.at Harvard Univ.) Recognizes the legitimate interest of

various groups of stakeholders assumes the creation of HRM

strategies reflect the stakeholder interests fuse them into the HR and business

strategies.

The Map of HRM Territory

Stakeholders Interest

ShareholdersManagementEmployees

Govt, CommunityUnions

Situational FactorsWorkforce

Characteristics,Business strategy

And conditionsManagement

PhilosophyLabor market

Unions, tasks techLaws and societal values

Long Term Consequences

Individual Well being

OrganizationalEffectiveness

Societal Well being

HR outcomesCommitmentCompetenceCongruence

Cost-effectiveness

HRM PolicyChoices

Employees InfluenceHR flow

Reward systemWork system

HR hr

Map of HRM Territory Model

Balance the integration of hard and soft HRM which led to “best practice” school of HRM

“Best practice” is based on universalism A set of practices aimed at high

commitment or high performance will benefit all organizations regardless of context.

Elements of best practices (Pfeffer) are universally acceptable

Elements of Best Practice Model (Pferrer 1998)

Employment security Sophisticated selection Team working and decentralization High wages linked to

organizational performance Extensive training Communications and involvement

Strategic HRM

Strategy defined (Chandler)

The determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for the goals.

Strategic HRM

Strategic HRM is concerned with the strategic choices associated with the use of labor in firms and with explaining why some firms manage them more effectively than others. (Boxall and Purcell 2000, p185)

Common Elements in Successful Strategies (Grant 2002)

Successful Strategy

Effective Implementation

Profound Understanding of The competitiveenvironment

Objective Appraisal of Resources

Long-term, simple.And agreedObjectives

Strategic HRM Models

Models that attempted to explore the link between business strategy and HR policies and practices 1. Lifecycle model (Kochan &

Barocci, 1985) 2. Competitive advantage model

(Miles and Snow 1978)

Lifecycle Model (Kochan & Barocci Model, 1985)

Policies and practices of the organization to fit the relevant stage of an organization’s development or lifecycle.


Introductory stage Start up phase of the business –

emphasis on “flexibility” in HR to enable the business to grow and foster entrepreneurialism

Growth stage Business grows beyond a certain size –

emphasis would move to the development of formal HR policies and procedures.


Maturity stage Markets mature and margins decrease,

the performance of certain products or the organization plateaus, the focus of the HR strategy is cost control.

Decline stage Emphasis shifts to rationalization,

downsizing and redundancy implications for the HR functions.


Issues regarding the Lifecycle Model How can HR strategy secure and retain the

type of human resources that are necessary for the organization’s continued viability, as industries and sectors developed?

Which HR policies and practices are more likely to contribute to sustainable competitive advantage as organizations go through their lifecycle?


Two kinds of mature organizations that manage to survive industry development (Baden-Fuller 1995) 1. the firm that succeeds in dominating the

direction of industry change 2. the firm that manages to adapt to the

direction of change. The route to HR advantage lies in the

preparation for retaining viability and competitive advantage in the mature phase.


Organizational agility (Dyer and Shafer 1999) Built-in capacity to flex and adapt to

changes in the external context enables the business to change as

matter of course.

Competitive Advantage Model Porter’s Generic Strategies 1985

Cost leadership Cost reduction

Differentiation Quality enhancement

Focus innovation

Competitive Advantage Model Porter’s Generic Strategies 1985

Cost leadership Focus on the delivery of efficiency through

mainly “hard” HR techniques

Differentiation Focus on the delivery of added value

through “softer” HR techniques and policies.

Focus Softer HR techniques policies for the

delivery of added value.

Competitive Advantage Model Porter’s Generic Strategies1985

Competitive Advantage Model Schuler and Jackson model Business performance will improve

when HR practices mutually reinforce the organizations choice of competitive strategy

Mission and values are expressed through their desired competitive strategy

Schuler and Jackson (1987)

Company mission and values

Desired competitive strategy(cost leadership, differentiation or focus)

Required employee behaviours(for example, extent of predictability in behaviour, degree of teamwork,

extent of concern for quality, propensity for risk-taking)

Supportive HR practices(choices in staffing, appraisal, remuneration, training etc)

HR outcomes(employee behaviour aligned with company goals)

In summary, The best-fit models argue that HR

strategy becomes more effective when it is designed to fit certain critical contingencies in the firm’s specific context.

‘Best-practice’ model

Model that advocates universalism All firms will be better off if they

identify and adopt ‘best-practice’ in the way they manage people

Major criticism: Best fit model tend to ignore

employees’ interest in the pursuit of enhanced economic performance

Sheer diversity Endangers diversity rather than

uniformity in HR strategy management

Which way is best?

Analytical distinction between the surface level of HR policy and practices in a firm and an underpinning level of processes and principles.

Surface layer: HR policies and practices – heavily influenced by context (societal, sectoral, organizational)

Underpinning layer: generic HR processes and general principles of labor management

HR issues

Management of Human Knowledge

Development of ‘learning organisations’

End of discussion.

Lecture 1 & 2 Strategic Hrm 2006

Business

Transcript of Lecture 1 & 2 Strategic Hrm 2006