SHRM CHAPTER 1-2

Strategic Human Resource Management (SHRM)

Strategic Human Resource Management (SHRM)

Process of making decisions on the intentions of the organizations concerning people.

Focuses on the need to ensure that the organization's goals are achieved through its human resources by means of the integration of HR strategies with the business strategy and with each other.

Based of the fundamental propositions that the human resources of an organization play a strategic role in its success.

Approach to the development and implementation of HR strategies.

General notion of how integration or "fit" between HR business strategies is achieved.

Talks of benefits of taking a longer-term view of where HR should be going;

How to get there, and how coherent and mutually supporting HR strategies should be developed and implemented;

Also about members of the HR function should adopt a strategic approach on a day-to-day basis.

Human Resource Management (HRM)

Concerned with all aspects of how people are employed, managed and developed in organizations.

Originated in 1980s in the form of philosophy on how people should be managed.

term which is still most commonly used, although it generally refers to a set of practices - the HR system as described in a later section of this chapter - rather than the original philosophy

Boxall 2013 HRM

Human resources include the knowledge, skills, networks and energies of people and, underpinning them, their physical and emotional health, intellectual capabilities, personalities, and motivations.

Boxall 2007 HRM

HRM as the management of work and people towards desired ends

Osterby and Coster 1992 HRM

The term "human resources" reduces people to the same category of value as materials, money and technology - all resources, and resources are only valuable to the extent they can be exploited or leveraged into economic value.

Armstrong 2008 HRM

Strategic and coherent approach to the management of an organization's most valued assets - the people working there, who individually and collectively contribute to the achievement of its objectives.

John Storey 1989 HRM

HRM can be regarded as a set of interrelated policies with an ideological and philosophical underpinning'
4 aspects that constitutes the meaningful version of HRM:
- a particular constellation of beliefs and assumptions;
- a strategic thrust informing decisions about people management;
- the central involvement of line managers;
- reliance upon a set of 'levers' to shape the employment relationship.

Nature of HRM

1st conceived had a conceptual framework consisting of philosophy underpinned by a number of theories drawn from the behavioral sciences and from the fields of strategic management, human capital management and industrial relations.

HRM Philosophy

Based on the guiding principles that identify and characterize the value and treatment of employees covered within a particular HRM system

simply refers to any system of people management (Storey, 2007)

Underpinning theories of HRM

Human resource management appears to lean heavily on theories of commitment and motivation and other ideas derived from the field of organizational behavior.

Resource-based theory - competitive advantage is achieved if a firm's resources are valuable, rare and

costly to imitate.

Harvard model of HRM

Developed by Boxall

Proposition: HRM involves all management decisions and actions that affect the nature of the relationship between the organization and employees - its human resources.

This framework is based on their belief that the problems of historical personnel management can only solve when: general managers develop a viewpoint of how they wish to see employees involved in and developed by the enterprise, and of what HRM policies and practices may achieve those goals.

Beer and his colleagues believed that:
a. Demand for broader, comprehensive, and
strategic perspective;
b. Long-term perspective in managing people;
C. Consideration of people as potential assets rather than merely a variable cost.

They were the 1st to underline the HRM tenet that it belongs to line managers.

Harvard school suggested that HRM had 2 characteristic features:
1. Line managers accept more responsibility for
ensuring the alignment of competitive strategy
and personnel policies.
2. Personnel has the mission of setting policies
that govern how personnel activities are developed and implemented in ways that make them more mutually reinforcing.

Boxall (1992) the advantages of this model are that it
1. Incorporates recognition of a range of stakeholder interests;
2. Recognizes the importance of of 'trade offs', either explicitly or implicitly, between the interests of owners and those of employees as well as between various interest groups;
3. Widens the context and the associated question of supervisory style;
4. Acknowledges a broad range of contextual influences on management's choice of strategy, suggesting a meshing of both product-marker and sociocultural logics;
5. Emphasizes strategic choice - it is not driven by situational or environmental determinism.

Matching model of HRM

Fombrun, Tichy, and Devanna (1984) held that HR systems and the organization structure should be managed in a way that is congruent with organizational strategy (hence the name 'Matching Model')

Classic Statement: The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization.

They further explained that there is a human resource cycle, which consists of 4 generic processes or functions that are performed in all organizations.
1. Selection - matching available human resources to jobs.
2. Appraisal - performance management
3. Rewards - 'the reward system is one of the
most under-utilized and mishandled managerial tools for driving organizational performance; it must reward short- as well as long term achievements, bearing in mind that business must perform in the present to
succeed in the future;
4. Development - developing high-quality
employees.

HR philosophies

Describing the overarching values and guiding principles adopted in managing people

HR Strategies

Defining the direction in which HRM intends to go

HR policies

The guidelines defining

HR processes

Formal procedures and methods used to put hr strategic plans and policies into effect.

HR practices

Informal approaches used in managing people

HR programs

Enable HR strategies, policies, and strategies, policies, and practices to be implemented according to plan.

HR Architecture

Comprehensive representation of all that is involved in HR, not simple the structure of the HR function.

describe the continuum from the HR professionals within the HR function, to the system of HR related policies and practices, through the competencies, motivation and associated behaviors of the firm's employees.

Transformational activities

organization development and the formulation and implementation of HR strategies

Transactional activities

cover the main areas of HR service delivery - resourcing, learning and development, reward, employment relations and employee wellbeing.

Organizational effectiveness

HRM strategies aim to support programs for improving organizational effectiveness by developing policies in such areas as knowledge management, talent management and generally creating 'a great place to work'

Human Capital Management

Consists of the people who work there and on whom the success of business depends.

Represents the human factor in the organization; the combined intelligence, skills, and expertise that gives the organization are those that are capable of learning, changing, innovating and providing the creative thrust which if properly motivated can ensure the long-term survival of the organization.

Regarded as the prime asset of an organization, and businesses need to invest in that asset to ensure their survival and growth.

HRM aims to ensure that the organization obtains and retains the skilled. Committed and well- motivated workforce it needs.

Also means engaging in talent management - the process of acquiring and nurturing talent, wherever it is and wherever it is needed, by using a number of interdependent HRM policies and practices in the fields of resourcing, learning and development, performance management and succession planning.

Knowledge Management

Any process/practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance learning and performance in organizations' (Scarborough et al, 1999)

Reward management

Enhance motivation, job engagement and commitment by introducing policies and processes that ensure that people are valued and rewarded for what they do and achieve and for the levels of skills and competence they reach.

Employee relations

The aim is to create in which productive and harmonious relationships can be maintained through partnerships between management and employees and their trade unions.

Meeting diverse needs

To develop and implement policies that balance and adapt to the needs of its stakeholders and provide for the management of a diverse workforce, taking into account individual and group differences in employment, personal needs, work style and aspirations and the provision of equal opportunities for all.

Bridging the gap between rhetoric and reality

Managements may start with good intentions to do some or all of these things, but the realization of them - 'theory in use' - is often very difficult.

Overarching aim of HRM is to bridge this gap by making every attempt to ensure that aspirations are translated into sustained and effective action.

Characteristics of HRM

1. Diverse
2. Strategic, with an emphasis on integration;
3. Commitment-oriented;
4. Based on the belief that people should be as assets
(Human capital);
5. Unitarist rather than pluralist, individualistic rather
than collective, in its approach to employee
relations;
6. A management-driven activity - the delivery of
HRM is a line management responsibility;
7. Focused on business values, although this emphasis is being modified in some quarters and more recognition is being given to the importance
of moral and social values.

Strategic Management

Way of managing a business that stresses the need to think and act strategically, that is, to be concerned with where the business is, where it should be going and how it is going to get there.

Deals with both ends and means.
- End: vision of what something looks like in the
future
- Means: shows how it is expected that the vision will
be realized.

Boxall and Purcell (2016: 46) SM

'Strategic management is best defined as a process. It is a process of strategy making, of forming and, if the firm survives, reforming its strategy as the environment changes.'

Johnson et al (2005: 6) SM

'Understanding the strategic position of an organization, making strategic choices for the future, and turning strategy into action'

Chandler (1962: 13) Strategy

The determination of the long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for carrying out those goals.

Boxall and Purcell (2016: 54) Strategy

Strategies are the ways in which managers of firms understand their goals and develop resources - both human and non-human - to reach them. Some strategies may be formally planned but it is inevitable that much of a firm's strategy emerges in a stream of action over time.

Julian Richer (2017: 144) Strategy

Process of identifying the direction we should be moving in.

Characteristics of Strategy

1. Forward looking - about deciding where you want to go and how you mean to get there.
2. Recognition that the organizational capability (the quality and quantity of its resources and their potential to deliver results) - resource based view
3. It aims to achieve strategic fit - the need when developing functional strategies such as HR to achieve congruence between them and the organization's business strategies within the context of its external and internal environment.

Hambrisk and Fredrickson (2001) Strategy

1. Where the organization will be active - what type of products and services it will offer, what markets it will serve.
2. How it will operate - where it will operate or gets its products and services.
3. How it will win - what its competitive advantage will be.
4. What its moves will be - how it will change and grow.
5. How it will be profitable - what business model it will follow.

Business model innovation

A picture of the business that explains how it achieves competitive advantage and makes money.

Process followed by an organization to introduce a new business model or change an existing one in order to improve its performance.

Developing strategy

Matter of creating a sense of direction and purpose and ensuring strategic fit.

Whittington (1993) Classical approach

Strategy formulation as a rational process of deliberate calculation

this model assumes that the development of corporate strategy is a logical, step-by-step affair, the outcome of which is a formal written statement that provides a definitive guide to the organization's intentions.

1. Define the mission and the business model that will be used to achieve that mission
2. Set objectives
3. Conduct internal and external scans to assess
internal SWOT and to understand the political, economic, social, technological, legal and environmental factors affecting the organization (PESTLE analysis)
4. Analyse esixting strategies and the business model to determine their relevance in the light of the internal and external appraisal.
5. Define in the light of this analysis the distinctive capabilities of the organization.
6. Define the key strategic issues emerging from the previous analysis.
7. Determine corporate and functional strategies for achieving goals and competitive advantage, taking into account the key strategic issues.
8. Prepare integrated strategic plans for implementing strategies.
9. Implement the strategies.
10. Monitor implementation and revise existing
strategies or develop new strategies as necessary

Maybe et al (1998: 74) developing strategy

'The reality is... that strategies may not always be easy to discern, that the processes of decision making may be implicit, incremental, negotiated and compromised.'

Sparrow et al (2010: 4) developing strategy

'Strategy is not rational and never has been.' Strategy formulation can best be described as 'problem solving in unstructured situations'

Mintzberg (1987) developing strategy

rather than being consciously and systematically developed, strategy reorientation happens in what he called brief 'quantum loops'. A strategy, according to Mintzberg, can be deliberate - it can realize the intentions of senior management, for example to attack and conquer a new market.

Pettigrew and Whipp (1991: 9) developing strategy

'Strategy does not move forward in a direct linear way, nor through easily discernable sequential phases. Quite the reverse; the pattern is much more appropriately seen as continuous, iterative, and uncertain.'

Boxall and Purcell (2003: 34)

'it is better if we understand the strategies of firms as sets of strategic choices some of which may stem from planning exercises and set- piece debates in senior management, and some of which may emerge in a stream of action'

Implementation of strategy

Converting the strategic plan into action and then into results

The changes taking place through strategy implementation impact on people. They involve employees in planning and putting them into effect. They are therefore the concern of the HR function as well as operational management. HR has a major role in ensuring that innovation or change is carried out effectively through people. HR needs to be involved in planning the change and in implementing it by developing and facilitating the introduction of appropriate HR strategy.