STRATEGIC HUMAN RESOURCE MANAGEMENT

DISCUSSION

What is meant by the term “Strategic Human Resource Management” and how has it been used to study the employment relationship?

HUMAN RESOURCE MANAGEMENT

“… human resource management (alternatively, ‘employee relations’ or ‘labor management’) includes the firm’s work systems and its models of employment. It embraces both individual and collective aspects of people management. It is not restricted to any one style or ideology. It engages the energies of both line and specialist managers… and typically entails a blend of messages for a variety of workforce groups.”

Purcell & Boxall (2003) P. 24

HUMAN RESOURCE MANAGEMENT

“HRM as a subject of study assumes that the interests of employees and employers will coincide and is preoccupied with the shared goal of organizational effectiveness that marginalizes the interests of other stakeholders such as employees. HRM is also predominantly focused on the individual and seeks solutions to HR problems within the firm, with an analytical focus on the motivations and aspirations of individual employees.”

Bach (2005) P. 4

STRATEGY

“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 carrying out these goals.”

Alfred Chandler, Strategy and Structure, (MIT Press, 1962), P. 13

STRATEGY At the core, its is the debate between best fit

and best practice Used for gaining a competitive advantage

Innovation Offer something new; different from competitors

Quality Enhancement Products and services

Cost Reduction Attempt to be the lowest cost provider

Optimal strategy depends on the wants and nature of competitors

TYPES OF STRATEGYBusiness

Examines correspondence between each firm’s competitive strategy and its system of high performance work practices

OperationsAn internal approach; connected to the

work organization inside a firmResource View

Views human resources as sources of sustained competitive advantage

STRATEGIC HRM “(S)trategic HRM is about how the

employment relationships for all employees can be managed in such a way as to contribute optimally to the organization’s goal achievement.” Legge (2005) P. 223

HR PRACTICES LINKED WITH COMPETITIVE STRATEGY Recruitment Training Career Path Promotions Socialization Openness

HIGH PERFORMANCE PRACTICESFeatures

Comprehensive selection/recruitment procedures

Incentive compensationExtensive employee involvement/training

Expected Results Improve knowledge, skills, and abilities of

employees Increase motivationReduce shirkingEnhance retention of quality employees

(reduce tenure of non-performers)Huselid (1995) P. 635

HIGH COMMITMENT PRACTICESUnique to the High-Performance

ParadigmSophisticated selection and training

Emphasis on values, human relations skills, and knowledge skills

Behavior-based appraisalSingle status policiesContingent pay systems

Traditional Personnel Practices Job securityAbove market pay and benefitsGrievance systems

Godard (2004) P. 351

CONCLUSION

Model of the Basic Strategic HRM Components

HUMAN CAPITAL POOL:Knowledge, Skill, Ability

EMPLOYEE RELATIONSHIP BEHAVIORS:Psychological Contracts, Citizenship, Discretion

Wright, P. Dunford, B. and Snell, S. (2001) Human Resources and the Resource Based View of the Firm, Journal of Management, 27:6

PEOPLE MANAGING PRACTICES:Staffing, Training, Rewards, Appraisal,

Work Design, Participation, Recognition, Communication

CONCLUSION Effectiveness can be increased by

systematically melding human resource practices with the selected competitive strategy

The success or failure of a firm is not likely to turn entirely on its strategic human resource management practices, but these practices are likely to be critical