Strategic and Human Resource Management (MIDTERMS)

• Strategic HRM - It defines the intention of organizations an plans as well as how its business goals should be achieved through people.
• Strategic HRM is based on 3 propositions:

  1. Human Capital is a major source of competitive advantage.
  2. It is people who implement the strategic plan.
  3. A systematic approach should be adopted to defining where the organization wants to go and how it should get there.
• Strategic HRM - It is a process that involves the use of overarching approaches to the development of HR Strategies, which are integrated vertically with the business strategy and horizontally with one another.
• Hendry and Pettigrew - They suggested that Strategic HRM should have 4 meanings.
• These are the four meanings of Strategic HRM:

  1. It refers to the use of planning
  2. It refers to a coherent approach to the desig and management of personnel systems based on an employment policy and workforce strategy and often underpinned by a philosophy.
  3. It refers to the act of matching HRM activities and policies to some explicit business strategy.
  4. It refers to the act of seeing the people of the organization as a "strategic resource" for the achievement of "competitive advantage".
• True - Strategic HRM addresses broad organizational issues relating to changes in structure and culture.
• True - Strategic HRM addresses organizational effectiveness and performance.
• False - Strategic HRM does not address matching resources to future requirements.
• True - Strategic HRM addresses the development of distinctive capabilities.
• True - Strategic HRM addresses knowledge management and management of change.
• True - Strategic HRM is concerned with both human capital requirements and the development of process capabilities, that is, the ability to get things done effectively.
• Boxall - He remarks "the critical concerns of HRM, such as choice of executive leadership and formation of positive patterns of labour relations, are in any firm".
• True - One of the aims of Strategic HRM includes the perceived advantage of having an agreed and understood basis for developing approaches to people management in the longer term.
• Lengnick-Hall - He suggested that the aims of Strategic HRM should include the idea that underlying this rationale in a business is the concept of achieving competitive advantage through HRM.
• True - It is stated in the aims of Strategic HRM that Strategic HRM supplies a perspective on the way in which critical issues or success factors related to people can be addressed, and strategic decisions are made that have a major and long-term impact on the behaviour and success of the organization.
• True - According to the aims of Strategic HRM, the fundamental aim of strategic HRM is to generate strategic capability by ensuring that the organization has the skilled, committed and well-motivated employees it needs to achieve sustained competitive advantage.
• True - Included in the aims of Strategic HRM is that its objective is to provide a sense of direction in an often turbulent environment so that the business needs of the organization, and the individual and collective needs of its employees can be met by the development and implementation of coherent and practical HR policies and programmes.
• Dyer and Holder - They stated that strategic HRM should provide ‘unifying frameworks which are at once broad, contingency based and integrative’.
• Storey - In his/her terms, ‘soft strategic HRM’ will place greater emphasis on the human relations aspect of people management, stressing continuous development, communication, involvement, security of employment, the quality of working life and work–life balance. Ethical considerations will be important.
• Harvard Strategic HRM - It emphasizes the yield to be obtained by investing in human resources in the interests of the business.
• True - According to the aims of Strategic HRM, it should attempt to achieve a proper balance between the hard and soft elements. All organizations exist to achieve a purpose and they must ensure that they have the resources required to do so and that they use them effectively.
• Quin Mills - He/she stated that they should plan with people in mind, taking into account the needs and aspirations of all the members of the organization. The problem is that hard considerations in many businesses will come first, leaving soft ones some way behind.
• These are the five approaches to Strategic HRM:

  1. Resource-based strategy
  2. Achieving strategic fit
  3. High-performance management
  4. High- commitment management
  5. High-involvement management
• Resource-Based Approach - The fundamental aim of this approach is to develop strategic capability achieving strategic fit between resources and opportunities and obtaining added value from the effective deployment of resources.
• Barney - He/she stated that the resource-based approach indicates, is to develop strategic capability – achieving strategic fit between resources and opportunities and obtaining added value from the effective deployment of resources.
• Hamel and Prahalad - They stated that the resource-based approach is founded on the belief that competitive advantage is obtained if a firm can obtain and develop human resources that enable it to learn faster and apply its learning more effectively than its rivals.
• Barney - He/she defined the human resources as all the experience, knowledge, judgement, risk-taking propensity and wisdom of individuals associated with the firm.
• Boxall - He/she stated that in line with human capital theory, resource-based theory emphasizes that investment in people adds to their value in the firm. The strategic goal will be to create firms which are more intelligent and flexible than their competitors.
• Ulrich - He/she stated that ‘Knowledge has become a direct competeitive advantage for companies selling ideas and relationships. The challenge to organizations is to ensure that they have the capability to find, assimilate, compensate and retain the talented individuals they need".
• Grant - He/she stated that when the external environment is in a state of flux, the firm’s own resources and capabilities may be a much more stable basis on which to define its identity. Hence, a definition of a business in terms of what it is capable of doing may offer a more durable basis for strategy than a definition based upon the needs (eg markets) which the business seeks to satisfy.
• Vertical Fit - It states that HR strategy should be aligned to the business strategy.
• Strategic Fit - It states that HR Strategy should be an integral part of the business strategy, contributing to the business planning process as it happens.
• Vertical Integration - It is necessary to provide congruence between business and human resource strategy so that the latter supports the accomplishment of the former and, indeed, helps to define it.
• Horizontal Integration - It is the other aspect of HR Strategy is required so that its different elements fit together. The aim is to achieve a coherent approach to managing people in which the various practices are mutually supportive.
• High Performance Management - It is called in the United States as "high performance work systems or practices". It aims to make an impact on the performance of the firm through its people in such areas as productivity, quality, levels of customer service, growth, profits and, ultimately, the delivery of increased shareholder value.
• US Department of Labor - They produced a well known definition of a high-performance work system.
• Wood - He/she stated that a high commitment management is ‘A form ofmanagement which is aimed at eliciting a commitment so that behaviour isprimarily self-regulated rather than controlled by sanctions and pressures external to the individual, and relations within the organization are based on high levels of trust.’
• Beer and Walton - They descibed the approaches that is needed to be done in order to achieve high commitment.
• The approaches towards achieveing high commitment in the company includes:

  1. The development of career ladders and emphasis on trainability and commitment as highly valued characteristics of employees at all levels in the organization.
  2. A high level of functional flexibility with the abandonment of potentially rigid job descriptions.
  3. The reduction of hierarchies and the ending of status differentials.
  4. A heavy reliance on team structure for disseminating information (team briefing), structuring work (team working) and problem solving (improvement groups or quality circles).
• Wood and Albanese - They added 4 extra approaches towards attaining high commitment in a company.