Lecture 1 & 2 Strategic Hrm 2006


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  • Lecture 1 & 2 Strategic Hrm 2006

    1. 1. HUMAN RESOURCE MANAGEMENT Dr. Ernesto Dimaculangan, Ph.D. Singapore Institute of Commerce
    2. 2. Schedule <ul><li>October 10 9:30am – 5:30 pm </li></ul><ul><ul><li>Lecture 1 & 2 – Introduction to HRM and Strategic HRM </li></ul></ul><ul><ul><li>Lecture 3 – Recruitment, Selection and Placement </li></ul></ul><ul><ul><li>Lecture 4 & 5 – Employee Learning, Training, Development and Career Management </li></ul></ul><ul><ul><li>Lecture 6 & 7 – Employee’s Compensation </li></ul></ul><ul><ul><li>Lecture 8 - Managing Diversity </li></ul></ul>
    3. 3. Schedule <ul><li>October 15 2:00 pm – 5:30 pm </li></ul><ul><ul><li>Lecture 8 - continuation </li></ul></ul><ul><ul><li>Lecture 9 – Performance Management </li></ul></ul><ul><ul><li>Lecture 10 – Managing a Global Workforce </li></ul></ul>
    4. 4. Lecture 1 & 2 Introduction to HRM and Strategic Human Resource Management
    5. 5. Definitions <ul><li>HRM: </li></ul><ul><ul><li>Refers to the policies, practices and systems that influence employees’ behaviour, attitudes and performance. </li></ul></ul><ul><ul><li>(Di Cieri, 2003) </li></ul></ul><ul><ul><li>HRM includes anything and everything associated with the management of employment relations in the firm. </li></ul></ul><ul><ul><li>(Boxall, Purcell, 2003) </li></ul></ul>
    6. 6. Attempt to Clarify the Approaches in Managing People Guest 1987; Storey 1992 <ul><li>“ soft” variants of HRM – used to describe approaches aimed at enhancing the commitment, quality and flexibility of employees </li></ul><ul><li>“ hard” variants of HRM – describes the emphasis on strategy where human resources are deployed to achieve business goals in the same way as any other resource. </li></ul><ul><ul><li>Cost minimization as in low wages, minimal training, close supervision </li></ul></ul><ul><ul><li>Lean production (downsizing) </li></ul></ul>
    7. 7. New Terms for HRM <ul><li>High commitment management (HCM) instead of soft HRM </li></ul><ul><li>Strategic HRM instead of hard HRM </li></ul>
    8. 8. Two Models Influential in the Interpretation of HRM <ul><li>The Matching Model </li></ul><ul><ul><li>Developed by Michigan Business School </li></ul></ul><ul><ul><li>Introduced the concept of strategic HRM </li></ul></ul><ul><ul><li>A tight fit between HR and business strategy </li></ul></ul><ul><ul><li>Use of HR policies and practices integrated with each other and with the goals of the organization </li></ul></ul><ul><li>The map of HRM territory model </li></ul><ul><ul><li>Harvard Model </li></ul></ul>
    9. 9. Assumptions of Matching Model <ul><li>Managing people will vary from organizations to organizations and is dependent on organizational context </li></ul><ul><li>Unitarism – the assumption that conflict or differing views cannot exist in the workplace because everyone (managers and employees) are working to achieve the same goal. </li></ul><ul><li>The model formed the basis of ‘Best Fit” school of HRM </li></ul>
    10. 10. Matching Model <ul><li>Key areas for the development of appropriate HR policies and systems; </li></ul><ul><ul><li>Selection of the most suitable people to meet business objectives </li></ul></ul><ul><ul><li>Performance in the pursuit of business objectives </li></ul></ul><ul><ul><li>Appraisal, monitoring performance and providing feedback to the organization and its employees </li></ul></ul><ul><ul><li>Rewards for appropriate performance </li></ul></ul><ul><ul><li>Development of skills and knowledge required to meet business objectives </li></ul></ul>
    11. 11. The Matching Model of HRM FIRM Organization Structure HRM Mission and Strategy Economic Forces Political Forces Cultural Forces
    12. 12. Map of HRM Territory Model <ul><li>“ the map of HRM territory” model or Harvard Model (Beer et al.at Harvard Univ.) </li></ul><ul><ul><li>Recognizes the legitimate interest of various groups of stakeholders </li></ul></ul><ul><ul><li>assumes the creation of HRM strategies </li></ul></ul><ul><ul><ul><li>reflect the stakeholder interests </li></ul></ul></ul><ul><ul><ul><li>fuse them into the HR and business strategies. </li></ul></ul></ul>
    13. 13. The Map of HRM Territory Stakeholders Interest Shareholders Management Employees Govt, Community Unions Situational Factors Workforce Characteristics, Business strategy And conditions Management Philosophy Labor market Unions, tasks tech Laws and societal values Long Term Consequences Individual Well being Organizational Effectiveness Societal Well being HR outcomes Commitment Competence Congruence Cost- effectiveness HRM Policy Choices E mployees Influence HR flow Reward system Work system HR hr
    14. 14. Map of HRM Territory Model <ul><li>Balance the integration of hard and soft HRM which led to “best practice” school of HRM </li></ul><ul><li>“ Best practice” is based on universalism </li></ul><ul><ul><li>A set of practices aimed at high commitment or high performance will benefit all organizations regardless of context. </li></ul></ul><ul><ul><li>Elements of best practices (Pfeffer) are universally acceptable </li></ul></ul>
    15. 15. Elements of Best Practice Model (Pferrer 1998) <ul><li>Employment security </li></ul><ul><li>Sophisticated selection </li></ul><ul><li>Team working and decentralization </li></ul><ul><li>High wages linked to organizational performance </li></ul><ul><li>Extensive training </li></ul><ul><li>Communications and involvement </li></ul>
    16. 16. Strategic HRM <ul><li>Strategy defined (Chandler) </li></ul><ul><li>The determination of the basic long-term goals and objectives of an enterprise, and the adoption of courses of action and the allocation of resources necessary for the goals. </li></ul>
    17. 17. Strategic HRM <ul><li>Strategic HRM is concerned with the strategic choices associated with the use of labor in firms and with explaining why some firms manage them more effectively than others. ( Boxall and Purcell 2000, p185) </li></ul>
    18. 18. Common Elements in Successful Strategies (Grant 2002) Successful Strategy Effective Implementation Profound Understanding of The competitive environment Objective Appraisal of Resources Long-term, simple. And agreed Objectives
    19. 19. Strategic HRM Models <ul><li>Models that attempted to explore the link between business strategy and HR policies and practices </li></ul><ul><ul><li>1. Lifecycle model (Kochan & Barocci, 1985) </li></ul></ul><ul><ul><li>2. Competitive advantage model (Miles and Snow 1978 ) </li></ul></ul>
    20. 20. Lifecycle Model (Kochan & Barocci Model, 1985) <ul><li>Policies and practices of the organization to fit the relevant stage of an organization’s development or lifecycle. </li></ul>
    21. 21. Lifecycle Model (Kochan & Barocci Model, 1985) <ul><li>Introductory stage </li></ul><ul><ul><li>Start up phase of the business – emphasis on “flexibility” in HR to enable the business to grow and foster entrepreneurialism </li></ul></ul><ul><li>Growth stage </li></ul><ul><ul><li>Business grows beyond a certain size – emphasis would move to the development of formal HR policies and procedures. </li></ul></ul>
    22. 22. Lifecycle Model (Kochan & Barocci Model, 1985) <ul><li>Maturity stage </li></ul><ul><ul><li>Markets mature and margins decrease, the performance of certain products or the organization plateaus, the focus of the HR strategy is cost control. </li></ul></ul><ul><li>Decline stage </li></ul><ul><ul><li>Emphasis shifts to rationalization, downsizing and redundancy implications for the HR functions. </li></ul></ul>
    23. 23. Lifecycle Model (Kochan & Barocci Model, 1985) <ul><li>Issues regarding the Lifecycle Model </li></ul><ul><ul><li>How can HR strategy secure and retain the type of human resources that are necessary for the organization’s continued viability, as industries and sectors developed? </li></ul></ul><ul><ul><li>Which HR policies and practices are more likely to contribute to sustainable competitive advantage as organizations go through their lifecycle? </li></ul></ul>
    24. 24. Lifecycle Model (Kochan & Barocci Model, 1985) <ul><li>Two kinds of mature organizations that manage to survive industry development (Baden-Fuller 1995) </li></ul><ul><ul><li>1. the firm that succeeds in dominating the direction of industry change </li></ul></ul><ul><ul><li>2. the firm that manages to adapt to the direction of change. </li></ul></ul><ul><li>The route to HR advantage lies in the preparation for retaining viability and competitive advantage in the mature phase. </li></ul>
    25. 25. Lifecycle Model (Kochan & Barocci Model, 1985) <ul><li>Organizational agility (Dyer and Shafer 1999) </li></ul><ul><ul><li>Built-in capacity to flex and adapt to changes in the external context </li></ul></ul><ul><ul><li>enables the business to change as matter of course. </li></ul></ul>
    26. 26. Competitive Advantage Model Porter’s Generic Strategies 1985 <ul><li>Cost leadership </li></ul><ul><ul><li>Cost reduction </li></ul></ul><ul><li>Differentiation </li></ul><ul><ul><li>Quality enhancement </li></ul></ul><ul><li>Focus </li></ul><ul><ul><li>innovation </li></ul></ul>
    27. 27. Competitive Advantage Model Porter’s Generic Strategies 1985 <ul><li>Cost leadership </li></ul><ul><ul><li>Focus on the delivery of efficiency through mainly “hard” HR techniques </li></ul></ul><ul><li>Differentiation </li></ul><ul><ul><li>Focus on the delivery of added value through “softer” HR techniques and policies. </li></ul></ul><ul><li>Focus </li></ul><ul><ul><li>Softer HR techniques policies for the delivery of added value. </li></ul></ul>
    28. 28. Competitive Advantage Model Porter’s Generic Strategies 1985 <ul><li>Competitive Advantage Model Schuler and Jackson model </li></ul><ul><ul><li>Business performance will improve when HR practices mutually reinforce the organizations choice of competitive strategy </li></ul></ul><ul><ul><li>Mission and values are expressed through their desired competitive strategy </li></ul></ul>
    29. 29. Schuler and Jackson (1987) <ul><li>Company mission and values </li></ul><ul><li>Desired competitive strategy </li></ul><ul><li>( cost leadership, differentiation or focus) </li></ul><ul><li>Required employee behaviours </li></ul><ul><li>( for example, extent of predictability in behaviour, degree of teamwork, extent of concern for quality, propensity for risk-taking) </li></ul><ul><li>Supportive HR practices </li></ul><ul><li>(choices in staffing, appraisal, remuneration, training etc) </li></ul><ul><li>HR outcomes </li></ul><ul><li>(employee behaviour aligned with company goals) </li></ul>
    30. 30. <ul><li>In summary, </li></ul><ul><ul><li>The best-fit models argue that HR strategy becomes more effective when it is designed to fit certain critical contingencies in the firm’s specific context. </li></ul></ul>
    31. 31. ‘Best-practice’ model <ul><li>Model that advocates universalism </li></ul><ul><ul><li>All firms will be better off if they identify and adopt ‘best-practice’ in the way they manage people </li></ul></ul>
    32. 32. <ul><li>Major criticism: </li></ul><ul><ul><li>Best fit model tend to ignore employees’ interest in the pursuit of enhanced economic performance </li></ul></ul><ul><ul><li>Sheer diversity </li></ul></ul><ul><ul><li>Endangers diversity rather than uniformity in HR strategy management </li></ul></ul>
    33. 33. Which way is best? <ul><li>Analytical distinction between the surface level of HR policy and practices in a firm and an underpinning level of processes and principles. </li></ul>
    34. 34. <ul><li>Surface layer : HR policies and practices – heavily influenced by context (societal, sectoral, organizational) </li></ul><ul><li>Underpinning layer : generic HR processes and general principles of labor management </li></ul>
    35. 35. HR issues <ul><li>Management of Human Knowledge </li></ul><ul><li>Development of ‘learning organisations’ </li></ul>
    36. 36. <ul><li>End of discussion. </li></ul>