E.g., careful selection, emphasis on training and internal development, formal appraisals, profit sharing, employee voice and participation, employment security
Hypothesis: The ‘more’ of this kind of HR the better
Evidence: A lot of support in US
Hypothesis 1: HR choices must fit internally
Hypothesis 2: HR choices must fit with strategy and other factors
Evidence: Strong support for internal fit argument
Evidence: Some support for external congruence
The Contingency Perspective The First Rule of Strategic Human Resource Management
EXTERNAL CONGRUENCE with the business strategy.
Does the strategy require HIGH QUALITY HUMAN RESOURCES or not?
Does the strategy require a cohesive workforce with a strong shared IDENTITY?
Does the strategy require DISCRETIONARY inputs (cooperation, helping, knowledge sharing)?
The Contingency Perspective The Second Rule of Strategic Human Resource Management
INTERNAL CONSISTENCY of HR Practices and Policies
INTERNAL CONSISTENCY CREATES SYNERGY
While each HR practice (selection, compensation etc) can have its own positive effect, when they are used in combination the whole is greater than the sum of the parts.
A Simplistic Illustration of EXTERNAL CONGRUENCE of HR System with the business strategy. Weak HRM Innovation Strategy Not supported HRM supports business strategy Overinvest In HRM Does not support Low Cost strategy HRM supports business strategy Low High Cost of HR System Innovation Generic Strategy Low Cost
Predictors of Positive Work Climate What drives Employee Satisfaction? (FLS) My supervisor removes obstacles so I can do my job better (LS) The leadership of our operating company spends a good amount of time talking with employees (R) Doing my job well leads to monetary rewards (FLS) My supervisor cares about me as a person (FLS) I have received constructive feedback on my performance within the last 6 months