Unit 1_Intro - Definition and Purpose of SMHR

8/13/2019 Unit 1_Intro - Definition and Purpose of SMHR

1/42

Strategic Human Resource

Management


2/42

Introduction

In the past, people were viewed in 3different ways:

1. As a cost

2. As a resource

3. As an asset


3/42

3

Defining Human Resource

Management (1)

HRM is a strategic and coherent approachto the management of an organisationsmost valued assets: the people workingthere who individually and collectivelycontribute to the achievement of its

objectives(Armstrong, 2006,)


4/42

Introduction (Cont)

But for now, the organisation view thepeople as a central to the successfulperformance of the organisation


5/42

The Changing Business

Environment


6/42

The Changing Business Environment

Throughout the years, human resourcebecome the organisationsmost importantasset:

Strategic Management People=Finance and Capital Resources

(SHRM is link with the success and failure of anorganisation)


7/42


(Cont)

In the modern time, SHRM becomes themost powerful competitive advantage ofone organisation.

Organisations concentrate more intoIntellectual assets to compete with theothers.


8/42


(Cont)

Some problematic to control and access thatknowledge:

1. Insecure and flexible work

2. The notion of organisation boundaries issometimes less clear.

3. Employees long-term relationship with

organisation, the normal route to developingand securing access to expertise.


9/42


(Cont)

Personnel Management includes anoperational, system-based approachto managing people.

HR policies, leadership style, andemployees reaction should be takencare at the same time.


10/42


(Cont)

3 challenges facing organisations thatmust be met are:

1. Managing intangible assets

2. Managing strategic change

3. Innovation in terms of what organisations

produce by way of goods and services, and the

way they approach the task.


11/42


(Cont)

New skills are needed to engage allorganisations resources:

1. Tacit knowledge

2. Recognising core competencies and

attending to stakeholder views


12/42


(Cont)

Tacit knowledge includes:

1. Action-centered skillsartforms

2. Learning from errorsreactions of people,anticipation

3. Learning from interaction with otherscustomer needs and expectations,

contextualisation, sensing expectations4. Learning from work routinesquickest

pathways, sensing success


13/42


(Cont)

Core Competencies are the abilities such

as reasoning, analytical skill, problem-solving, etc


14/42

Linking People Management and Strategic

Management

An organisationsresponse to external challenge

can come from a cascade of environmental

triggers.

Active business strategy and SHRM response canbe found out by classifying strategy in order to

gain an overview.


15/42

Linking people management and

strategic management

There are 2 main ways to classify

strategy:1. Using life cycle model of the product or

service

2. In terms of single, diversified or multiple

products or services


16/42

The life cycle model

Product andService

HR function

Introduction Product enters themarket

Attracting qualifiedemployees to the company

Growth Sales of productincrease quickly

Reach the right number ofqualified employees;develop the managementprocess within a company

Maturity Get the peak of itssales

Minimise layoffs byreorganising shift job

Decline Sales and profits fall Reductions and reallocationthe workforce


17/42

Single, diversified or multiple products

modelHR strategy Single product in one

company

Multiple products globally

Selection Functional orientation usingspecialist job criteria

Functional and generalistorientation using systematicand objective criteria

Appraisal Subjective and measuredby personal contact

Objective, based onmultiple organisationalgoals

Rewards Unsystematic, allocated

perhaps paternalistically

Based on multiple, planned

goals. Some topmanagement discretion

Development Largely through jobexperience. Usually a single

function focus

Formal and systematic,across divisions and

subsidiaries


18/42

Linking People Management and Strategic

Management

These models above help us to:1. Establish the links between SHRM and

corporate strategy.

2. Indicate the SHRM levers that canbring about effective and appropriateemployee behaviour.

3. Develop the role of SHRM inunderpinning change depending oncircumtances.


19/42

UK VERSIONS OF THE HRM MODEL

British academics

David Guest (1987, 1989a, 1989b 1991)has taken the Harvard model and

developed it further by defining four

policy goals which he believes can be usedas testable propositions:

1. Strategic integration ability of the

organization to integrate HRM issues intoits strategic plans

S O S O O


20/42

2. High commitment a behavioural

commitment to pursue agreed goals and

attitudinal commitment reflected in a strongidentification with the enterprise

3. High quality this refers to all aspects of

managerial behaviour which bear directly on

the quality of goods and services provided.


British academics (cont.)



21/42

4.

Flexibility

functional flexibility and theexistence of an adaptable organization

structure with the capacity to manage

innovation.


British academics (cont.)


22/42

Guest (1989a) believes that the driving force

behind HRM is, the pursuit of competitive

advantagein the market-place through:

Provision of high-quality goods and services,

Competitive pricing linked to high productivity,

The capacity swiftly to innovate and manage

change in response in the market-place or to

breakthroughs in R&D.


23/42

He considers that HRM values are:

Unitarist to the extent that they assume no

underlying and inevitable differences of interest

between management and workers.

Individualistic in that they emphasize the

individual-organization linkage in preference to

operating through group and representative

systems.


24/42

Guest has asserted (1989b) that HRM has been

talked up and its impact has been on

attitudes rather than behaviour. He stated

(1989a) that the term runs the risk of

becoming a catch-all phrase, reflecting general

intentions but devoid of specific meaning.


25/42

Approaches to The Strategic Management

of People

The 3 models of SHRM:

1. The best practice view.

2. The best fit view.

3. The resource-base approach.


26/42

The Best Practice View

It is based on a single set or bundle of HR

policiesand practices.

The company will follow these policies and

practices as its standard in any prevailing

business circumstances.

Using 18 key practices (see p.14) in case study


27/42

The Best Practice View

The criticism of this view is came from:

1. Cost of implementation.

2. Tensions between the need for production and cost

minimisation, and issues of flexibility, creativity and

skills enhancement.

3. The restricted applicability of the model mainly to the

western private sector (because of legal and economical

choice)

4. The doubtful ability to assess the impact of HR interestsusing financial measures.

5. The belief that it is easier to establishand sustain the

model on the green-field sites.


28/42

The Best Fit View

This model is based on the idea that HR

strategies flow from business strategy.

Much of what was outlined earlier in this unit

can be related to the bestfitmodel


29/42

The Best Fit View

The success of a best fit model depends on its

ability to:

1. Integrate into the organisations strategic

plans.

2. Provide horizontal or vertical integration of

the key policy areas.


30/42

The Best Fit View

How far the organisational objectives will be metis dependent on:

1. The level of fit between the business strategy

and the environment at one level.

2. The HR strategy and business strategy at a

second level.

3. The internal coherence of the policy.


31/42

The Best Fit View

Best fit can determine whether a hard or asoftapproach.

A hard may include outsourcing, enhanced

productivity, and emphasis on tightercontracting.

A soft relies on involvement, partnership andcommunication and sharing.


32/42

Best Fit Integration

It is an open template to interpret the

environment in which business operates and to

evaluate the integrated reaction or responses

that are necessary.


33/42

Best Fit Integration (Cont)

The SHRM role is focus not on external

relationships but on how staff and their

abilities are used


34/42

Best Fit Integration (Cont)

According to Storey (1995, p.4-5), a sustainedcompetitive advantage derives from internal

resources, which must:

1. Add value.

2. Be unique or rare.

3. Be difficult to imitate.

4. Be non-substitutable, for example, by technology.


35/42

Resource-based approach

This third model of SHRM is a bottom-up

view.

This view focuses on the organisation and

its potential, and develops ways to

exploit or enhance the availableresources.


36/42

According to Mueller (1998), the resource-

based view includes 5 proposition about

the creation of strategic assets or

capabilities.


37/42

Proposition 1

Assets is only developed in slow,

incremental and uncertain ways, not in

any linear or planned way.


38/42

Proposition 2

Assets require broad-based commitment

over a lengthy period, not a single

initiative.


39/42

Proposition 3

The evolutionary view stresses the

importance of routinising skill formation

activities.


40/42

Proposition 4

This view concerns the development of

cultures that will allow potential to be

used and developed.


41/42

Proposition 5

Barriers to imitation and loss of their

resources, both in patents, copyright and

so on, and their people resources should

need to build.


42/42

The end of Unit 1

Documents

Unit 1_Intro - Definition and Purpose of SMHR