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  • Business Management Study Manuals

    Advanced Diploma in Business Management

    STRATEGIC HUMAN RESOURCE MANAGEMENT

    The Association of Business Executives

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  • © Copyright, 2008

    The Association of Business Executives (ABE) and RRC Business Training

    All rights reserved

    No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form, or by any means, electronic, electrostatic, mechanical, photocopied or otherwise, without the express permission in writing from The Association of Business Executives.

  • Advanced Diploma in Business Management

    STRATEGIC HUMAN RESOURCE MANAGEMENT

    Contents

    Unit Title Page

    1 Introduction to Strategic Human Resource Management 1 Introduction 2 What is Strategy? 3 What is Strategic HRM? 6 How is Strategic HRM Different from Other Aspects of HRM? 12 How Does Research Show that Strategic HRM Adds Value to an Organisation? 15 How Does Strategic HRM Support the Management of Change? 18 Who Holds the Responsibility for Strategic HRM? 19 When is it Appropriate to Create a Dedicated HR Function? 19

    2 Vertical Integration and Human Resources Strategy 23 Introduction 25 What are the Benefits of Vertical Integration? 31 How do we Promote the Vertical Integration of Our HR Strategy? 31 What is Horizontal Integration? 31 Bundling and Best Fit 36 Resource Based View (RBV) 39 What are the Benefits of Horizontal Integration? 43 What Different Approaches Can Be Taken to Achieve Strategic Alignment? 43 Putting Strategy into Practice 47 Barriers to Implementation of HR Strategy 48

    3 The Alternatives to Strategic Human Resource Management 49 Introduction 50 What is High Performance Working? 51 What is High Commitment Management? 54 What is High Involvement Management? 54 Which Model is RIght? 55 What Other Approaches Are There? 55

    4 Designing Strategic Human Resource Management 59 Introduction 61 HRM Strategy - Design Principles 62 What is the External Context for a HRM Strategy? 64 What is the Internal Context for a HRM Strategy? 65 Developments in Human Resources 72 HRM Strategy and Lifecycle Stage 82 What if the Organisation is going through Structural Change? 85 Implications of Globalisation 85 Skills Needed to Implement Strategic Human Resource Management 86

  • Unit Title Page

    5 Evaluating Strategic Human Resource Management 95 Introduction 96 How Easy is it to Link Cause and Effect? 97 How Can you Measure the Impact of Strategic Human Resource Management? 97 Tools Available to help Measure Strategic Human Resource Management 99

    6 The Ethical Implications of Strategic Human Resource Management 103 Introduction 104 Main Ethical Issues in People Management and Development 105 Equality and Diversity 108 Advantages of an Ethical Approach to People Management and Development 115 Promoting and Enforcing Ethical Behaviour 117 'Hard' and 'Soft' Human Resource Strategies 117

    7 The Strategic Approach to People Resourcing 119 Introduction 121 Employment Flexibility 122 Human Resource Planning 127 How Do We Take a Strategic Approach to Recruitment? 130 What Does it Mean to be an 'Employer of Choice'? 132 How Do We Take a Strategic Approach to Staff Selection? 133 How Do We Take a Strategic Approach to Staff Deployment? 135 How Do We Take a Strategic Approach to Staff Retention? 141 How Do We Take a Strategic Approach to Performance Management? 143

    8 The Strategic Approach to Learning and Development 149 Introduction 150 How Do We Take a Strategic Approach to Staff Induction? 151 How Do We Take a Strategic Approach to Training and Development? 153 How Do We Create a Learning Organisation? 160 How Do We Take a Strategic Approach to Appraisal? 161 How Do We Take a Strategic Approach to Management Development? 162

    9 The Strategic Approach to Employee Relations 167 Introduction 168 What are the Different Strategic Approaches to Employee Relations? 169 What can be Gained from Partnership Working? 174 How do we Promote Employee Engagement? 175 How do we Increase Discretionary Behaviour? 178 How do we Take a Strategic Approach to Communicating with Employees? 180

    10 The Strategic Approach to Reward and Recognition 181 Introduction 182 What are the Purposes of Reward and Recognition? 183 How Do We Take a Strategic Approach to Reward and Recognition? 185 How Effective are Financial and Non Financial Rewards? 187 How Do We Evaluate Performance Management? 191

  • 1

    © ABE and RRC

    Study Unit 1

    Introduction to Strategic Human Resource Management

    Contents Page

    A. Introduction 2

    Why is human resource management important? 2

    B. What is Strategy? 3

    Are strategies deliberate and planned? 5

    C. What is Strategic HRM? 6

    What are the outcomes of an HR strategy? 6

    What different models are there of HR strategy? 7

    D. How is Strategic HRM Different from Other Aspects of HRM? 12

    So what determines an organisation's HRM strategy? 12

    Is legal compliance strategic? 13

    So is responding to ethical issues strategic? 14

    So is corporate social responsibility strategic? 14

    E. How Does Research Show that Strategic HRM Adds Value to an Organisation? 15

    CIPD-Sponsored Research 15

    Linking Human Resource Strategy to Performance 17

    F. How Does Strategic HRM Support the Management of Change? 18

    What is the relationship between the psychological needs of employees and HR strategy? 18

    What are the features we should look for in a well-designed job? 18

    G. Who Holds the Responsibility for Strategic HRM? 19

    H. When is it Appropriate to Create a Dedicated HR Function? 19

    How do organisations use HR professionals? 19

    What is HR business partnering? 20

  • 2 Introduction to Strategic Human Resource Management

    © ABE and RRC

    How to Use the Study Manual

    Each study unit begins by detailing the relevant syllabus aim and learning outcomes or objectives that provide the rationale for the content of the unit. For this unit, see the section below. You should commence your study by reading these. After you have completed reading each unit you should check your understanding of its content by returning to the objectives and asking yourself the following question: "Have I achieved each of these objectives?"

    Ideally, you should not proceed to the next unit until you have achieved the learning objectives for the previous unit. If you are working with a tutor, he/she should be able to assist you in confirming that you have achieved all the required objectives.

    Objectives

    The aim of this unit is to critically evaluate the strategic approach to human resource management and describe the benefits of designing and implementing a human resource strategy

    When you have completed this study unit you will be able to:

     Describe and explain a human resource strategy – i.e. a set of principles and values governing expectations about the role of people as contributors to organisational effectiveness

     Distinguish human resource strategy from 'managing people', and enforcement of legal/ethical compliance

     Describe and explain the place of a human resource strategy in the organisation's value chain

     Describe and explain strategic human resource management as a driver, as a strategic partner and as an agent for both the leadership and implementation of organisational change

     Explain power and authority related to the human resource strategy and the role of the human resource strategist as executive, advisor or consultant

     Examine the arguments concerning the desirability of creating a dedicated human resource function

     Assess the relevance of research and theoretical evidence concerning the positioning for human resource strategies (especially Ulrich).

    A. INTRODUCTION

    Why is human resource management important?

    Ever since the earliest theories of management, the role of people within the organisation has been accepted and it is commonly recognised that someone in every organisation will need to be responsible for the various matters which arise in connection with the employment of people – commonly recognised as the 'HR function'. This traditional view of managing the employment of people tends to be associated largely with tasks, techniques and procedures and as a result is reactive in approach.

    Approaches to people management have changed. Social, cultural and political attitudes towards employment have been shaped by factors such as globalisation of the labour market; fluctuations in labour availability; the place of women into the workplace; economic fluctuations, from boom to recession and vice versa, the application of 'scientific' management methods and control systems in places such as call centres and the people versus technology divide.

  • Introduction to Strategic Human Resource Management 3

    © ABE and RRC

    Elton Mayo's Hawthorne experiments stressed the importance of human attitudes, values and relationships for the efficient and effective functioning of workers, adding motivation to the list of the traditional HR tasks such as hiring and firing. In the 1960s and early 70s government intervention in the labour market came in the form of legislative controls over the relationship between employer and employee and began a pattern, which continues today, of increa