MASTER OF BUSINESS ADMINISTRATION Strategic Human Resource Management

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1 MASTER OF BUSINESS ADMINISTRATION Strategic Human Resource Management Contact details: Regenesys Business School Tel: +27 (11) Fax: +27 (11)

2 Version Control: 4_f Date of Publication: March 2014 Publisher: Regenesys Management Place of Publication: Sandton Document Change History Date Version Initials Description of Change 7 February CT New study guide (New textbook and Emerald and HBR journal articles) 27 February LC Subject matter expert (SME) review 28 February CT Amendments per SME review 3 March PL Final Review 4 March _f FVS Formatting 4 March _e_f CJ Transfer of editing changes from MBA_SHRM_v1 This study guide highlights key focus areas for you as a student. Because the field of study in question is so vast, it is critical that you consult additional literature. Copyright Regenesys, 2014 All rights reserved. No part of this publication may be reproduced, stored in or introduced into a retrieval system, or transmitted, in any form, or by any means (electronic, mechanical, photocopying, recording or otherwise) without written permission of the publisher. Any person who does any unauthorised act in relation to this publication may be liable for criminal prosecution and civil claims for damages.

3 CONTENTS 1. WELCOME TO REGENESYS INTRODUCTION TEACHING AND LEARNING METHODOLOGY ALIGNING ORGANISATIONAL, TEAM AND INDIVIDUAL OBJECTIVES ICONS USED IN THIS STUDY GUIDE STUDY MATERIAL FOR THE MODULE RECOMMENDED AND PRESCRIBED RESOURCES RECOMMENDED READING PRESCRIBED ARTICLES ADDITIONAL SOURCES TO CONSULT LEARNING OUTCOMES CONTENT SCOPE AND LEARNING GUIDANCE AN INTRODUCTION STRATEGIC HUMAN RESOURCE MANAGEMENT WHAT IS STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)? SHRM A SYSTEMS THINKING APPROACH DISTINCTIVE FEATURES OF SHRM STRATEGIC HUMAN ASSET MANAGEMENT (SHAM) SHRM TRENDS SHRM PLANNING PROCESS SHRM AND ORGANISATIONAL STRUCTURE, CULTURE AND LEADERSHIP SHRM ALIGNMENT SHRM AND ORGANISATIONAL STRUCTURE SHRM AND ORGANISATIONAL CULTURE SHRM AND LEADERSHIP EMPLOYEE RESOURCING AND DEVELOPMENT SYSTEMS RESOURCING PROCESS OVERVIEW HUMAN RESOURCE SUPPLY RECRUITMENT AND SELECTION EMPLOYEE PERFORMANCE MANAGEMENT REWARD MANAGEMENT TRAINING AND DEVELOPMENT EMPLOYEE RELATIONS LABOUR RELATIONS EMPLOYEE RELATIONS USING EMOTIONAL AND SPIRITUAL INTELLIGENCE TO MANAGE PERFORMANCE CONCLUDING THOUGHTS REFERENCES APPENDIX 1: MULTI-GENERATIONAL EMPLOYEES APPENDIX 2: OVERVIEW OF SOUTH AFRICAN LABOUR LEGISLATION GLOSSARY OF TERMS... 86

4 List of Tables TABLE 1: STRATEGIC VERSUS TRADITIONAL HRM TABLE 2: SHRM ACTIVITIES TABLE 3: HIGH-PERFORMANCE WORK PRACTICES (HPWPS) TABLE 4: FACTORS TO CONSIDER IN ORGANISATIONAL STRUCTURE TABLE 5: PREREQUISITES TO RECRUITMENT TABLE 6: RECRUITMENT PRACTICES TABLE 7: VIEWS ON THE MOST EFFECTIVE WAY FOR PEOPLE TO LEARN TABLE 8: EMPLOYEE RELATIONS UNITARY AND PLURALIST PERSPECTIVES TABLE 9: EXTENDED TYPOLOGY OF RELATIONS TABLE 10: GENERATIONAL DIFFERENCES TABLE 11: SOUTH AFRICAN LABOUR LAW List of Figures FIGURE 1: EXTERNAL AND INTERNAL ENVIRONMENTS FIGURE 2: INTEGRITY OF SHRM ACROSS ALL LEVELS OF THE ORGANISATION FIGURE 3: SHRM ALIGNED TO A STRATEGIC MANAGEMENT MODEL FIGURE 4: FRAMEWORK FOR JOB DESIGN FIGURE 5: AVERAGE TURNOVER RATE IN THE PAST THREE MONTHS BY SIZE OF COMPANIES (HONG KONG) FIGURE 6: DETERMINATION OF REWARDS FIGURE 7: ROLE PLAYERS IN LABOUR RELATIONS FIGURE 8: INDUSTRIAL RELATIONS VS EMPLOYEE RELATIONS... 73

5 1. WELCOME TO REGENESYS Have a vision. Think big. Dream, persevere and your vision will become a reality. Awaken your potential knowing that everything you need is within you. Dr. Marko Saravanja At Regenesys, we assist individuals and organisations to achieve their personal and organisational goals, by enhancing their management and leadership potential. We approach education and development holistically, considering every interaction not only from an intellectual perspective but also in terms of emotion and spirituality. Our learning programmes are designed to transform and inspire your mind, heart and soul, and thus allow you to develop the positive values, attitudes and behaviours, which are required for success. Having educated over students based in highly reputable local and international corporations across over 100 countries since Regenesys' inception in 1998, we are now one of the fastest-growing and leading institutions of management and leadership development in the world. Regenesys ISO 9001:2008 accreditation bears testimony to our quality management systems meeting international standards. Regenesys is accredited with the Council on Higher Education. Our work is rooted in the realities of a rapidly changing world and we provide our clients with the knowledge, skills and values required for success in the 21 st century. At Regenesys, you will be treated with respect, care and professionalism. You will be taught by business experts, entrepreneurs and academics who are inspired by their passion for human development. You will be at a place where business and government leaders meet, network, share their experiences and knowledge, learn from each other, and develop business relationships. You will have access to a campus, in the heart of Sandton, with the tranquillity of a Zen garden, gym and meditation room. We encourage you to embark on a journey of personal development with Regenesys. We will help you to awaken your potential and to realise that everything you need to succeed is within you. We will be with you every step of the way. We will work hard with you and, at the end celebrate your success with you. Areas of Expertise Regenesys Business School 1

6 2. INTRODUCTION Welcome to the module on Strategic Human Resource Management (SHRM). Over the years many profound statements have been made about the world of work one in particular resonates with strategic human resource management: "At the end of the day you bet on people, not strategies." (Larry Bossidy) SHRM is an approach to human resource management that uses people most wisely with respect to the strategic needs of the organisation. Whereas in the past human resources were perceived as a cost, plentiful and dispensable, they are now seen as an asset with extensive thought being given to recruitment, induction, training and development, performance management and more especially engagement not simply compliance but commitment. The aim of this module is to focus your attention on strategic human asset management, a "distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce using an array of cultural, structural and personal techniques," (Storey in Salaman, Storey and Billsberry, 2005). 2.1 TEACHING AND LEARNING METHODOLOGY Regenesys uses an interactive teaching and learning methodology that encourages self-reflection and promotes independent and critical thinking. Key to the approach utilised is an understanding of adult learning principles, which recognise the maturity and experience of participants, and the way that adult students need to learn. At the core of this is the integration of new knowledge and skills into existing knowledge structures, as well as the importance of seeing the relevance of all learning via immediate application in the workplace. Practical exercises are used to create a simulated management experience to ensure that the conceptual knowledge and practical skills acquired can be directly applied within the work environment of the participants. The activities may include scenarios, case studies, self-reflection, problem solving and planning tasks. Training manuals are developed to cover all essential aspects of the training comprehensively, in a user-friendly and interactive format. Our facilitators have extensive experience in management education, training and development. Please read through this study guide carefully, as it will influence your understanding of the subject matter and the successful planning and completion of your studies. Regenesys Business School 2

7 2.2 ALIGNING ORGANISATIONAL, TEAM AND INDIVIDUAL OBJECTIVES This course will draw on a model developed by Regenesys Management, which demonstrates how the external environment, the levels of an organisation, the team and the components of an individual are interrelated in a dynamic and systemic way. The success of an individual depends on his/ her self-awareness, knowledge and ability to manage successfully these interdependent forces, stakeholders and processes. The degree of synergy and alignment between the goals and objectives of the organisation, the team and the individual determines the success or failure of an organisation. It is, therefore, imperative that each organisation ensures that team and individual goals and objectives are aligned with the organisation s strategies (vision, mission, goals and objectives, etc.); structure (organogram, decision-making structure, etc.); systems (HR, finance, communication, administration, information, etc.); culture (values, level of openness, democracy, caring, etc.). Hence, an effective work environment should be characterised by the alignment of organisational systems, strategies, structures and culture, and by people who operate synergistically. Regenesys Integrated Management Model Regenesys Business School 3

8 3. ICONS USED IN THIS STUDY GUIDE Icons are included in the study guide to enhance its usability. Certain icons are used to indicate different important aspects in the study guide to help you to use it more effectively as a reference guide in future. The icons in this study guide should be interpreted as follows: Definition The definitions provide an academic perspective on given terminology. They are used to give students a frame of reference from which to define a term using their own words. Examples The example icon is used to indicate an extra/ additional text that illustrates the content under discussion. These include templates, simple calculation, problem solution, etc. Video clip or presentation This icon indicates a URL link to a video clip or presentation on the subject matter for discussion. It is recommended that students follow the link and listen/ read the required sources. Interesting source to consult The source icon is used to indicate text sources, from the Internet or resource centre, which add to the content of the topic being discussed In a nutshell This icon indicates a summary of the content of a section in the workbook and to emphasise an important issue. Calculations This icon indicates mathematical or linguistic formulae and calculations. Self-reflection Students complete the action of selfreflection in their own time. It requires students to think further about an issue raised in class or in the learning materials. In certain instances, students may be required to add their views to their assignments. Tasks The task icon indicates work activities that contact students must complete during class time. These tasks will be discussed in class and reflected upon by students and facilitators. E-learning students can use these tasks simply to reinforce their knowledge. Note This icon indicates important information of which to take note. Regenesys Business School 4

9 4. STUDY MATERIAL FOR THE MODULE You have received material that includes the following: Study guide Recommended reading Assignment These resources provide you with a starting point from which to study the contents of this module. In addition to these, other resources to assist you in completing this module will be provided online via the link to this module. Guidance on how to access the material is provided in the Academic Handbook that you received when you registered for this qualification. 5. RECOMMENDED AND PRESCRIBED RESOURCES A number of prescribed and recommended resources have been identified to assist you in successfully completing this module: 5.1 RECOMMENDED READING The following textbook is recommended and must be used to complete the module: McKenna, E. and Beech, N. 2014, Human Resource Management: A Concise Analysis, 3 rd ed., United Kingdom: Pearson Education Ltd. Please ensure you order or download your textbook before you start with the module. Regenesys Business School 5

10 5.2 PRESCRIBED ARTICLES Ananthram, S., Nankervis, A. and Chan, C. 2013, 'Strategic human asset management: evidence from North America', Personnel Review, 42 (3), Bateson, J., Wirtz, J., Burke, E. and Vaughan, C. 2013, 'When hiring, first test, and then interview', Harvard Business Review, November Bloom, N. 2014, 'To raise productivity let more employees work from home', Harvard Business Review, January February Brotheridge, C.M. 2013, 'Explaining bullying: Using theory to answer practical questions', Team Performance Management', 19 (3/4), Gallup Inc. 2013, 'The state of the global workplace', (accessed 27 January 2014). Garvin, D.A. 2014, 'Can a strong culture be too strong?' Harvard Business Review, Case Study and Commentaries by Natarajan, G. and Dowling, D. January February George, M. 2006, 'Practical application of spiritual intelligence in the workplace', Human Resource Management International Digest, 14 (5), 3 5. Guinn, S.L. 2013, 'Predicting successful people', Strategic HR Review, 12 (1), Goffee, R. and Jones, G. 2013, 'Creating the best workplace on earth', Harvard Business Review, May HayGroup. 2005, Hay job evaluation: Foundations and applications, (accessed 4 February 2014). Mathew, S.K. and Jones, R. 2013, 'Toyotism and Brahminism: Employee relations difficulties in establishing lean manufacturing in India', Employee Relations, 35 (2), Michael, B. and Michael, R. 2012, 'Interest-based bargaining: Efficient, amicable and wise?' Employee Relations, 35 (5), Rowland, C.A. and Hall, R.D. 2013, 'Perceived unfairness in appraisal: Engagement and sustainable organisational performance', EuroMed Journal of Business, 8 (3) Zenger, J.H., Folkman, J.R. and Edinger, S.K. 2011, 'Making yourself indispensable', Harvard Business Review, October Additional articles that may prompt discussions and further assist you in completing this course will be saved on Regenesys Online under the relevant course. Please visit the site regularly to access these additional sources. Regenesys Business School 6

11 5.3 ADDITIONAL SOURCES TO CONSULT As a higher education student, you are responsible for sourcing additional information that will assist you in completing this module successfully. Below is a list of sources that you can consult to obtain additional information on the topics to be discussed in this module: Emerald NetMBA: MindTools: Brunel Open Learning Archive: ProvenModels: 12manage.com: Alliance Online: The Free Management Library: The Charity Village: HRM Guide International Human Resources: CIPD: This is an online database containing journal articles that are relevant to your modules. Please refer to the attached Emerald manual to assist you to download required articles. Information on how to access Emerald is provided to you in your Academic Handbook. You will receive access to the database once you register as a student. This is one of several web addresses that provide a selection of MBA constructs and discussion. It is one of the better of these addresses. MindTools.com is a very useful source of ideas, constructs, management models, etc. with even more useful commentary and description. A Brunel University support-site that provides an easily accessible library of ideas, concepts, constructs techniques, tools, models, etc. ProvenModels' Digital Model Book presents digitalised management models categorised in a clear, consistent and standardised information structure to improve the usability and reusability of management literature. Management models are important generalisations of business situations when applied in context and are powerful tools for solving business issues. This is a website on which one can access numerous models as well as global comments on the models and principles. This could also serve as a place where you could voice your ideas and get feedback from all over the world. The Alliance for Non-profit Management's general introduction to strategic planning is built around 15 questions that cover just about all aspects in brief. (Click on Strategic Planning ) The Free Management Library can be used to improve your organisation, and for your own personal, professional and organisational development. This is by far the most comprehensive overview of all aspects of strategic planning covering all stages of the process. A series of twelve very short articles, by Ron Robinson, an independent Canadian consultant, appeared on Charity Village between November 2001 and October These articles are refreshing in that they do not advocate a one best way for all types of non-profit organisations. They discuss various way of approaching the strategic planning process. https://charityvillage.com/topics/management/planning/strategic-planning.aspx?page1424=2 HRM Guide is an independent online publisher of articles and information about Human Resource Management and related subjects. Articles are aimed at HR Practitioners, researchers and students throughout the world. The professional body for HR and people development (independent and not for profit organisation). They bring together extensive research and thought leadership, practical advice and guidance. There are many more sites and articles available that can help you to successfully complete this module. You are encouraged to post the website addresses or URLs of any additional interesting sites that you come across on the Regenesys Learning Platform. In this way, you can assist other students to access the same wonderful information that you have discovered. Regenesys Business School 7

12 A word of caution not all information available on the Internet is necessarily of a high academic standard. It is, therefore, recommended that you always compare information that you obtain with that contained in accredited sources such as articles that were published in accredited journals. 6. LEARNING OUTCOMES Upon completing this course, students should be able to: Interrogate key human resource management models Diagnose behavioural problems across the organisation for the purpose of informing organisational strategy Evaluate the impact of different leadership theories, models, styles and roles on human resource management practices Review human resource systems and management trends that best inform successful business practices Integrate labour relations strategy within a strategic human resource management environment Incorporate all relevant legislation within current human resource management paradigms Formulate a strategic human resource planning process and align it with business strategy and business plans Explain and review the role of organisational culture and reward systems Analyse the integration of organisational processes, systems, structure and culture for use in strategic decision-making pertaining to human resource management Analyse how teams are managed in the implementation and monitoring of business strategy implementation Explain how you could use emotional and spiritual intelligence to manage the performance of a team Regenesys Business School 8

13 7. CONTENT SCOPE AND LEARNING GUIDANCE A number of topics will be covered to assist you in successfully achieving the learning outcomes of this module. It is important to study each of these sections to ensure that you expand your knowledge in the subject and are able to complete the required assessments. The sections that will be dealt with include: Section 1 Section 2 Section 3 Section 4 An Introduction to Strategic Human Resource Management (SHRM) SHRM and Organisational Structure, Culture and Leadership Employee Resourcing and Development Systems Employee Relations A more detailed framework of what is required for each of these topics follows under each section heading. A number of questions to probe discussion and guide you towards comprehension and insight are also provided. The timetable under each section heading provides guidance on the time to be spent to study each section. It is recommended that you follow the given timetable to ensure that you spend the appropriate amount of time on each section. Following the timetable will ensure that you have covered the required sections relevant to each assignment and have appropriate time to prepare for the examination. Regenesys Business School 9

14 7.1 AN INTRODUCTION STRATEGIC HUMAN RESOURCE MANAGEMENT Timeframe: Learning outcomes: Recommended Textbook Recommended reading: Section overview: Minimum of 20 hours Review human resource systems and management trends that best inform successful business practices Formulate a strategic human resource planning process and align it with business strategy and business plans Incorporate all relevant legislation within current human resource management paradigms Chapters 1, 2, and 12 in McKenna, E. and Beech, N. 2014, Human Resource Management, 3 rd ed., United Kingdom: Pearson Education Ltd. Ananthram, S., Nankervis, A. and Chan, C. 2013, 'Strategic human asset management: Evidence from North America', Personnel Review, 42 (3), Gallup Inc. 2013, 'The state of the global workplace', (accessed 27 January 2014). In our opening section, we consider the definitions of strategic human resource management (SHRM) and strategic human asset management (SHAM). Then, consistent with current management, we locate SHRM within the paradigm of Systems Thinking. This is followed by texts on current SHRM trends highlighting the significance of employee engagement, which remains a theme throughout this module. This section closes with an overview of the integration of SHRM in the strategic planning framework and process What is Strategic Human Resource Management (SHRM)? Strategic Human Resource Management (SHRM) is a discipline that bridges the gap between traditional human resource management and strategic management. As the definitions point out, the division between the two disciplines is, of necessity, much closer now. Strategic human resource management: "A distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce using an array of cultural, structural and personnel techniques." (Salaman, Storey and Billsberry, 2005) Strategic human resource management can be defined as "the linking of human resources with strategic goals and objectives in order to improve business performance and develop organisational culture that fosters innovation, flexibility and competitive advantage." (Sinha, 2013) Regenesys Business School 10

15 Adopting these views, and other similar views, on human resource management means that the human resource (HR) function is a strategic partner in the development of organisational strategies and the implementation of those strategies through the HR functions of, for example: recruitment, performance management, and training and development. Consequently, it is argued that SHRM takes a more long-term (and, in some instances, global) view rather than merely focussing on the day-to-day issues. A second view on SHRM is given by Pfeffer and Sutton (in McKenna and Beech, 2014:19) 'evidence-based management'. Evidence-based management is about improving decision-making that impacts on employees. Consider their three arguments: 1. First, ideologies and 'gut feel' should be minimised. Robust and current research must inform SHRM decisions. Consider that Maslow's ideologies may no longer be relevant for the complexities that surround Generation Z employees. Refer to Appendix 1, where we provide a synopsis of generational theories. Pfeffer and Sutton (ibid) argue that managers make false assumptions about, for example, what motivates people and then act on those false assumptions. 2. Secondly, there should be a commitment to hearing the 'truth'. By this they mean SHRM practitioners must be able to access the opinions of employees and gather perceptions on decisions made even if those perceptions are negative. The company DaVita has its own town hall meetings where employees are invited to offer input and comment on decisions. 3. Thirdly, they argue that evidence-based management should lead to better decisionmaking but considers that it is not possible to make 'perfect' decisions. To do so might take too long and consume too many resources notwithstanding the changes in the environment that take place in the interim. They suggest viewing the process as ongoing. This argument reflects the realities of management and is consistent with the concept of continuous research and learning. Task Questions 1. What is the status of SHRM when organisations fall prey to severe economic downturn? Using the definition provided by Sinha (2013) and the 'evidence-based management' approach of Pfeffer and Sutton (in McKenna and Beech, 2014:19), debate the value of these approaches under such extreme conditions. 2. Companies worldwide engaged in draconian budget-cutting and staff reductions, employing excessive short-term thinking (and arguably non-strategic cost cutting) to survive the aftermath of the 2008 economic downturn. Some HR professionals felt that they were forced out of the loop while their companies undertook organisation-wide transformation to survive the economic crisis. Brainstorm other environmental factors that could cause a company to lose sight of SHRM. SHRM emphasises the need for flexibility the ability to react and adapt quickly to changes in an organisation's environment. Over and above this, SHRM is concerned with quality management, including high-calibre employees who are flexible and can enable sustained competitive advantage (McKenna and Beech, 2014:20). Regenesys Business School 11

16 7.1.2 SHRM A Systems Thinking Approach SHRM takes a systems approach to the analysis and management of organisations (Regenesys, 2013; McKenna and Beech, 2014) the different parts of the organisation function effectively together and move cooperatively toward the overarching strategic goals. Most notably, the HR systems (e.g. recruitment, performance management, etc.) must pull in the same direction to be effective, efficient and add value. The systemic view considers the broader macro and near micro issues (international, national, regional, and industry-related) as well as the internal issues (organisational, team and individual). This is consistent with 'Porter's Five Forces' representing the external view (external/ competitive forces) and the 'resource-based view' of the organisation (internal/ competency-based). Refer back to your module on Competitive Strategy to review your understanding of Porter's Five Forces and the resource-based view. FIGURE 1: EXTERNAL AND INTERNAL ENVIRONMENTS Outside environment (competitive forces) Inside environment (organisational competence) SHRM In the external environment, organisations must locate and attract the best talent optimally (e.g. in terms of time and cost) to achieve their strategic goals; in the internal environment organisations must retain and develop the talent (again using the optimal amount of resources in terms of time and cost to achieve strategic goals). Task Questions Mini Case Study You are the HR practitioner at one of the biggest construction companies in South Africa. There is a dire shortage of knowledgeable, experienced and competent civil engineers who also understand contract management. These engineers earn 'top dollar'. Not only do local construction companies compete for this talent, but international companies entering the African market are also headhunting these professionals. The challenge does not end there in your company you have several top class engineers, but you do not have enough and you are concerned that the engineers you have may be lured away. Notwithstanding all of this, the strategic goal of your company is to grow its market share in Africa. To do this your company will have to price contracts very keenly. This does not help you, especially when you know that you will have to pay above-average salary packages to Regenesys Business School 12

17 recruit the right type of engineers to carry out contracts across Africa the conditions are tough and unpredictable, and only the best engineers will do. Task Questions: 1. Using the simple scenario described above, discuss the external and internal issues and then brainstorm possible strategic human resource actions that you could take to help the organisation achieve its strategic expansion goals. 2. Given this scenario, discuss why HR should have been involved with strategic decision-making five years ago. What might you have done then to ensure that your company was better placed to achieve its strategic expansion goals now? 3. What have you learned from this simple scenario? How does this make you think differently about a long-term and strategic view of HRM? Distinctive Features of SHRM The list of distinctive features of SHRM in the literature is far-reaching. We have selected some of these to facilitate thoughtful discussion and prompt analysis and evaluation of the case studies in your recommended textbook and in this study guide. The distinctive features of SHRM include, inter alia the following (McKenna and Beech, 2014:10 11): 1. Employees are the assets that achieve the strategic goals of the organisation. 2. The uniqueness of human resources is recognised (potentially limitless). 3. National history and culture are acknowledged as influential in shaping SHRM practices (refer to Appendix 2 for a synopsis of South African labour law; use the South African scenario to reflect on the impact that legislation, for example, might have on SHRM in South Africa) and these need to be understood in the various locations in which the organisation operates. 4. Corporate culture is compatible with (must be matched to) the requirements of organisational strategies. 5. Seeking commitment (engagement) of employees to the organisation is considered far more valuable than forcing compliance to the demands of the organisation. 6. The reciprocal value-system of 'commitment' binds employees to the organisation and vice versa (this mutuality is bound up in the psychological contract; for example, management offers challenging and meaningful tasks and the employee reciprocates with loyalty and commitment). "Mutuality can be a tender creature but in a climate of mutuality, the cause of commitment is advanced resulting in both improved productivity and the development of people." (McKenna and Beech, 2014:11) Regenesys Business School 13

18 7. SHRM practitioners recognise that commitment alone by employees does not achieve strategic goals competence is required (and these competences change over time). 8. A climate of consent features prominently and it is considered wise to pursue inclusive/ participative decision-making relating to organisational and job design. 9. The role of trade unions is recognised in representing collective interests; however, a culture of respecting the rights of management to liaise directly with individuals and groups within the organisation must also be recognised. 10. A coherent set of HR policies and procedures targeted toward effective organisational performance is a prerequisite to achieving organisational goals (the integration of HR policies and procedures and organisational objectives must be pursued). 11. A 'fertile' environment supporting individual creativity and energetic endeavours must be created and maintained. The table below also serves to highlight the distinct features of strategic HRM, in this case, as compared to Traditional HRM. TABLE 1: STRATEGIC VERSUS TRADITIONAL HRM Dimensions of Analysis Planning and strategy formulation Strategic HRM Participates in formulating overall organisational strategic plan and aligning HR functions with company strategy Traditional HRM Is involved in operational planning only Authority Has high status and authority (executive level) Has medium status and authority Scope Is concerned with all managers and employees Is concerned primarily with hourly, operational and clerical employees Decision making Is involved in making ongoing strategic decisions Makes operational decisions only Integration Is fully integrated with other organisational functions, e.g. marketing, finance, production Has moderate to small integration with other organisational functions Coordination Coordinates all HRM activities Coordinates some HR functions (Grobler, Wärnich, Carrell, Elbert and Hatfield, 2006) Task Questions 1. Critically evaluate your own organisation against each of the eleven features of SHRM selected from McKenna and Beech (2014) above and those provided in Table 1. What is significant in your evaluation? 2. Consider McKenna and Beech's (2014:11) statement, "This [mutuality] refers to HRM policies that provide mutual goals, mutual influence, mutual respect, mutual rewards, and mutual responsibility." Provide examples to support this assertion. Reflect critically on the implications of this assertion in your organisation. 3. Carry out your own research into the concept of mutuality. What is the strategic advantage (or possible disadvantages) of applying this principle to HR practice? Regenesys Business School 14

19 Grobler et al (2006) point out that whilst HRM participates at an executive level in strategic decision-making (and in the alignment of HR functions to the strategic direction of the organisation) it has clearly defined functions: Those exclusive to the function of HRM, and Those activities that it carries out jointly with other departments, as shown in the table below: TABLE 2: SHRM ACTIVITIES SHRM Functions Assigned Exclusively to HR Compensation and benefits issues Affirmative action and employment equity (AA and EE) Job analysis programmes Pre-employment testing Attitude surveys HR policy and critical policy issues relating to: Attrition (retention strategies) Reward systems Work systems, and International HRM Advisory (especially in terms of legislation and ethics) SHRM Activities (Jointly with Other Departments) Job analysis leading to job description Recruitment and selection Appraisal, training and development, and career management Compensation and health Labour relations Specific HR policy issues relating to individual functions (e.g. expatriates) Specific behavioural issues (e.g. sexual harassment) and the management of these Control functions (analysis of performance appraisal data, statistics on absenteeism, grievances and accidents, exit interviews, etc.) Research and problem solving (labour market trends nationally and internationally and emerging best practice) Diversity management Employee assistance and wellness programmes Human resource information systems (HRIS) including fully developed HRIS database, Intranets and Extranets (Grobler, Wärnich, Carrell, Elbert and Hatfield, 2006) Regenesys Business School 15

20 As Table 2 highlights, there are core SHRM functions and SHRM activities that take place in joint discussion and agreement across other departmental functions. SHRM's core functions are determined by the strategic direction of the company and other external factors (e.g. legislation, international standards and practices, industry wage agreements, and economic factors such as labour supply and demand) and SHRM's activities across other departments are guided by policy, best practices, and the needs of each department. Notably, as with all functions in an organisation, research and problem solving are core competences. Consider that organisational data shows a high rate of absenteeism relative to the industry standard. SHRM is responsible for measuring absenteeism, researching absenteeism, identifying the causes of absenteeism, and reducing absenteeism. The SHRM department (function) is comprised of professional, managerial and clerical employees and, notably, responsibilities do not only reside with the SHRM function "all managers at all levels share in the responsibility" (Grobler, et al, 2006). Given the cross-functionality of SHRM, Grobler et al (2006) emphasise two-way communication: Downward, through new employee orientation, bulletin boards (physical and electronic), meetings, newsletters and employee handbooks, and Upward, through employee suggestion programmes, complaints/ grievance procedures, attitude surveys and open-door meetings Read the following case study (McKenna and Beech, 2014: ) and then answer the questions below. When reading this case study, reflect critically on the interplay between the SHRM function and organisational strategy, and the interface with the organisation as a whole. Task Questions Mini case study Interface FLOR's green approach Interface FLOR is the modular flooring division of the global company, Interface, based in the US. It is a worldwide leader in the production of environmentally friendly floor coverings and other textiles. The carpet tile was invented in 1955, and Interface has continued to develop the market share ever since. Interface's goal is to move towards zero emissions, zero oil, and zero waste by This target is being approached on seven fronts: 1. Eliminate waste 2. Eliminate toxic substances from emissions 3. Operate facilities with renewable electricity sources 4. Redesign processes to close the technical loop by using recovered and bio-based materials 5. Resource efficient transportation 6. Sensitise stakeholders 7. Redesign the business model to demonstrate the value of sustainability-based commerce Regenesys Business School 16

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