MH010 Human Resources Management Strategic HR Management Charmi Patel
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Human Resources Strategic HR Management Charmi Patel
Human Resources Contents Introduction... 6 1 Evolution from personnel management to strategic human resource management... 8 1.1 Strategic human resource management... 10 1.2 Human resources planning and SHRM... 11 1.3 Case study: Google s HR practices: A strategic edge?... 13 1.4 Summary... 14 2 Models and theories of strategic human resource management... 15 2.1 Resource-based view... 16 2.2 Integration approaches... 19 2.3 The general causal model of the HRM-performance relationship... 21 2.4 The AMO model of HRM-performance relationship... 24 2.5 The psychological contract model of the HRM-performance relationship... 25 2.6 Strategic/tactical model of SHRM... 27 2.7 Human resources leader model.... 28 2.8 Summary... 30 3 Human resources planning/workforce planning... 31 3.1 Strategic HRM models and workforce planning... 34 3.2 Approaches of workforce/hr planning................................ 35 3.3 Techniques of workforce/hr planning... 36 3.4 Strategic role of job analysis... 37 3.5 Case study: Big Lottery Fund... 38 3.6 Summary... 39 Solutions for exercises... 40 Bibliography... 43 About the author... 56
6 Human Resources Introduction Over the past two decades or so, there have been a number of important changes within the field of human resource management (HRM). The first is the transformation from personnel management to HRM, and the second is a leap forward into what is commonly referred to as looking at macro or strategic issues as well as focusing on outcomes and performance, which is often labelled as strategic HRM (SHRM) (Delery and Doty, 1996; Schuler and Jackson, 2007). This new orientation is concerned with the causal links between HRM and business performance and has attracted significant academic and practitioner debate (Purcell and Kinnie, 2007; Katou, 2012; Katou and Budhwar, 2006; 2010; 2014). Moreover the resultant changes within the international labor market due to the globalization and liberalization of economies, coupled with international social and economic change, pose particular challenges regarding HRM function, in terms of assisting in the development of human resource planning (HRP) initiatives that match changes in the demand and supply for labor (Sheehan, 2012). This course explores the transformation of HRM function from personnel management to SHRM. We then examine the interaction between HRM and business strategies in determining organizational performance, by investigating the relationships between HRM, business strategy and firm s performance. By discussing both the various theoretical and conceptual models of SHRM, we will explore the different perspectives on which the HRM-performance relationship is based. At the same time as critically analyzing the competing conceptualization of high-performance work systems, the course will also shed light on the nature of the causal link that takes place between the two end points, that is, HRM and performance. Moving on, we will evaluate some of the strategic responses to issues associated with the demand and supply of labor. We will further review and synthesize the approaches and techniques to HRP as well as a discussion on job analysis, highlighting the connections between analyses of job requirements and the HRP required. Having explained issues around SHRM and HRP, the discussion will then move on to reveal some of the global and ethical issues that underpin SHRM and HRP research and sensitize the reader to the potential gaps that remain between the policy and practice of SHRM.
Strategic HR Management 7 General learning outcomes After you have studied this course, you will be able to: Recognize the dynamic transformation from personnel management to strategic HRM (SHRM). Discuss how human resources can be a source of competitive advantage by reviewing and discussing theories and models of SHRM. Explore the relationship between SHRM and firm s performance. Critically analyze the competing conceptualizations of high-performance work systems. Highlight the rise of HRP as a strategic priority by exploring the relationship between SHRM and HRP. Explain the techniques and approaches associated with demand and supply of human resources. Outline the role of job analysis in the HRP process. Critically discuss issues within SHRM and HRP research.
8 Human Resources Chapter 1: Evolution from personnel management to strategic human resource management Learning outcomes After you have worked through this chapter you will be able to: Reflect upon the transformation of the HR function from personnel management to SHRM. Understand the meaning of key terms such as strategic management, strategic HRM and HRP. Evaluate the link between strategic HRM and HRP. The traditional personnel management approach prevalent in the first part of 20th century adopted a uniquely inward and operational focus much to do with administrative functions within an organization (Guest, 1987; 1997; 2011; Reedman and Wilkinson, 2009). As Jamali and Afiouni (2012) explain, this approach was commonly characterized as a transactional, low-level, record keeping and maintenance function with a short-term micro-orientation and a preoccupation with operational issues, practices and policies, to the neglect of broader business issues and the overall direction of the organization (Jamali and Afiouni, 2012: 34). Labor was essentially regarded as a commodity which needed to be used efficiently in order to meet organizational objectives. The exemplars within organizational behavior and human relations brought about the first major turning point with respect to the study of human resources (Mahoney and Deckop, 1986). The models within these fields highlighted the importance of softer aspects of management, including leadership, motivation and its impact on work outcomes in a positive way. Much of the research then emphasized and repositioned employees as valued organizational resources (Dunn, 2006: 71) and to better policies and practices that affected their behavior and productivity at work (Schuler and Jackson, 2007).
Strategic HR Management 9 This first transformation aimed at valuing employees as an important human capital, looking at human resources as an investment rather than a cost (Wright, McMahan, et al., 2001). As Keenoy (1990: 375) stated, the new era of humane people oriented employment management focused on profiting from systematic and professional management practices, and the improved coordination and integration of human resources practices (Jamali and Afiouni, 2012). The surge led to a methodical approach towards the practices of recruitment, the use of teamwork and group problem-solving, egalitarian work structures, a commitment to training, and performance and reward systems (Jamali and Afiouni, 2012: 35). The second transformation was as a result of pressures due to competitive global environment (Anthony, Perrewe, et al., 1996; Anthony, Kacmar, et al., 2002). In the context of increased mergers and acquisitions leading to corporate restructuring as well as prominence towards a services based industries, the need for organizational agility and efficiency has been heightened (Conner and Ulrich, 1996; Amit and Belcourt, 1999; Pilbeam and Corbridge, 2006). The idea that efficient use of human resources is related to a firm s performance, and in turn on the overall success of the organization, garnered much attention leading to the field of what is now known as SHRM (Boxall and Purcell, 2011). The nature of the interaction between HRM and performance, and particularly the search for conclusive evidence of the decisive positive impact of the former on the latter, is for much the whole subject area s Holy Grail (Boselie, Dietz, et al., 2005: 67). Figure 1 points the distinctions at both the sides of the field, demonstrating the evolution into SHRM. On the left-hand side we see a more operationally or administratively reactive personnel management function looking at day-to-day activities such as payroll; this contrasts with a more strategically proactive function on the right-hand side, which is generally concerned with implementing strategies in line with business mission and values, that create a competitive advantage. Figure 1: Evolution from personnel management to strategic human resource management (SHRM) Source: Adapted from Brockbank, 1999; Pilbeam and Corbridge, 2006; Jamali and Afiouni, 2012)
E005 / Title of this Strategic Course is HR Written Management in Gray 43 Bibliography Allen, M. R. & Wright, P. (2007). Strategic Management and HRM. In Boxall P. Purcell, J. & Wright, P. (eds.), The Oxford Handbook of Human Resource Management. New York: Oxford University Press. Amit, R. and Belcourt, M. (1999) Human resources management processes: A value-creating source of competitive advantage. European Management Journal, 17(2): 174 81. Anthony, W.P., Perrewe, P.L., and Kacmar, K.M. (1996) Strategic Human Resource Management. Fort Worth, TX: Dryden Press. Anthony, W.P, Kacmar, K.M., and Perrewe, P.L. (2002) Human Resource Management: A Strategic Approach (4th ed). Cincinnati, OH: Southwestern. Appelbaum, E., Bailey, T., Berg, P., and Kalleberg, A.L. (2000) Manufacturing advantage: Why high-performance work systems pay off. Economic Policy Institute: Cornell University Press Armstrong, M. (2006) A Handbook of Personnel Management Practice. London: Kogan Page. Armstrong, M. and Long, P. (1994) The Reality of Strategic HRM. London: Institute of Personnel Development. Barney, J. (1991) Firm resources and sustained competitive advantage, Journal, 17: 99 120. Becker, B.E. and Huselid, M.A. (2006) Strategic human resource management: Where do we go from here? Journal, 32: 898 925. Becker, B.E., Huselid, M.A., Pickus, P.S., and Spratt, M.F. (1997) HR as a source of shareholder value: Research and recommendations. Human Resource Management, 36(1): 39 47. Bies, R.J. and Tripp, T.M. (1995) Beyond distrust: Getting even and the need for revenue. In Kramer, R.M. and Tyler, T. (eds), Trust in Organizations, Newbury Park, CA: SAGE.
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56 Title Human of this Resources Chapter here in eight words About the author Dr. Charmi Patel is an assistant professor/lecturer in Human Resource Management within the Organisation Studies Group at the University of Edinburgh Business School in the United Kingdom. She holds an MSc in HRM and a PhD in work and organizational psychology from the Aston Business School at Aston University (Birmingham, UK). Her research interests include international and strategic HRM, counterproductive workplace behaviors and their effects on employee health and well-being, work-family interface, organizational justice, and the employee-organization relationship within cross-cultural contexts. Findings from her research have been published in refereed international journals such as Human Resource Management (Wiley, Financial Times 45), International Journal of Human Resource Management, Journal of World Business and European Journal of International Management.
Management MH010 Human Resources Strategic HR Management Charmi Patel