The Framework of Strategic Human Resource Management

Human Resource Management defined

as a 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)

believes that HRM can be regarded as a ‘set of interrelated policies with an ideological and philosophical underpinning’

John Storey suggests four aspects that constitute 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

HRM concept was made by the Michigan School

They 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’

selection

matching available human resources to jobs

appraisal

performance management)

rewards

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’

development

developing high-quality employees

The other founding fathers of HRM were the Harvard school of Beer et al (1984) who developed what Boxall (1992) calls the ‘Harvard framework’.

This framework is based on the belief that the problems of historical personnel management can only be solved: 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 longer-term perspective in managing people and consideration of people as potential assets rather than merely a variable cost

They were the first to underline the HRM tenet that it belongs to line managers. They also stated that: ‘human resource management involves all management decisions and action that affect the nature of the relationship between the organization and its employees – its human resources’

Beer and his colleagues

The Harvard school suggested that HRM had two 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

According to Boxall (1992) the advantages of this model are that it:

• incorporates recognition of a range of stakeholder interests;

• recognizes the importance of ‘trade-offs’, either explicitly or implicitly, between the interests of owners and those of employees as well as between various interest groups;

• widens the context of HRM to include ‘employee influence’, the organization of work and the associated question of supervisory style;

• acknowledges a broad range of contextual influences on management’s choice of strategy, suggesting a meshing of both product market and sociocultural logics;

• emphasizes strategic choice – it is not driven by situational or environmental determinism.

The overall purpose of human resource management is to ensure that the organization

is able to achieve success through people

Ulrich and Lake (1990) remark

HRM systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities

Organizational effectiveness

HRM strategies aim to support programmes for improving organizational effectiveness by developing policies in such areas as knowledge management, talent management and generally creating ‘a great place to work’. This is the ‘big idea’ as described by Purcell et al (2003), which consists of a ‘clear vision and a set of integrated values’. More specifically, HR strategies can be concerned with the d

Human capital

can be 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

Human capital

The human capital of an organization consists of the people who work there and on whom the success of the business depends.

Human capital has been defined by Bontis et al (1999) as follows

represents the human factor in the organization; the combined intelligence, skills and expertise that gives the organization its distinctive character.

Knowledge management

‘any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance learning and performance in organizations’ (Scarborough et al 1999)

Knowledge management

HRM aims to support the development of firm-specific knowledge and skills that are the result of organizational learning processes.

Reward management

HRM aims to 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 skill and competence they reach.

Employee relations

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

Meet diverse needs

HRM aims 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.

Rhetoric and reality

The research conducted by Gratton et al (1999) found that there was generally a wide gap between the sort of rhetoric expressed above and reality.

hard version of HRM

emphasizes that people are important resources through which organizations achieve competitive advantage. These resources have therefore to be acquired, developed and deployed in ways that will benefit the organization

soft version of HRM

human-relations school. It emphasizes communication, motivation and leadership.

Diverse

The main idea is that HRM is not a one-size-fits-all concept, and different organizations have different ways of managing their people

Strategic Integration

This involves aligning HRM with the overall strategic plans of the organization, ensuring consistency in HRM practices, and encouraging line managers to incorporate HRM perspectives into their decision-making

Strategic Integration

Various scholars, including David Guest, Karen Legge, Keith Sisson, and John Storey, emphasize the importance of integrating human resource policies with strategic-business planning as a key goal in HRM.

Commitment-oriented

This emphasizes the importance of commitment and mutual understanding between employees and the organization.

People as Human Capital

The notion that people should be regarded as assets rather than variable costs, in other words treated as human capital.

Unitarist philosophy

it is believed that employees share the same interests as employers

Unitarist philosophy

In the words of Gennard and Judge (1997), organizations are assumed to be ‘harmonious and integrated, all employees sharing the organizational goals and working as members of one team’

HRM as a management-driven activity

HRM can be described as a central, senior-management-driven strategic activity, which is developed, owned and delivered by management as a whole to promote the interests of the organization that they serve

HRM as a management-driven activity

John Purcell (1993) thinks that ‘the adoption of HRM is both a product of and a cause of a significant concentration of power in the hands of management

HRM as a management-driven activity

Purcell et al (2003) underlined the importance of line management commitment and capability as the means by which HR policies are brought to life.

Focus on business values

HRM is mainly focused on what’s best for the organization and its business goals. People’s interests are considered, but they come after the interests of the company.

Focus on business values

HRM policies are adjusted to support business values and are changed based on the organization’s objectives, leaning more towards practical approaches rather than softer ones.

human elements of 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