lecture5.SHRM.VUMBA class lecture pre.ppt

Management, Organizational
Policies and Practices
Lecture 5
4/24/2024 Lecture 2/MS (HRM) class

Recap Lecture 4
 Resource Based View
 Threshold Resources & Competencies
 Core Resources & Competencies
 Robustness of Strategic Capability
 Value Chain
 Outsourcing
 Qualitative and Quantitative Analysis

Lecture 5
Dr. Amna Yousaf
PhD (HRM)
University of Twente,
the Netherlands
Strategic Human Resource
Management

The Skeleton
 Introducing SHRM
 Elements of HR
 Critical HR goals
 Strategic Tensions
 Best Fit/Best Practices
 Critique of the views

Management, Organizational
Policies and Practices
Lecture 5
4/24/2024

Defining…
HRM is the 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 the objectives of the
business

HR: Who is Managed?
 Covering all workforce groups
 All employee cadres including
managers thesmsevles
 Difference in way of treatment “ high
trust” manner!
 All kinds of employment relations
(e.g mananement-worker relations,
management-union relations)

Who is Involved?
 Specialist managers
 Designing selection process
 Formation of policies and laws such as EEO
 Training needs analyses
 Formulation of performance incentive plans
 Line managers
 Stay in the loop

Management Styles
 Variety depending on nature of contract
 Permanent or contractual
 Part time or full time
 With in and between firm differences
 Ultimate goal is competitive advantage
 Overall aim
 Design of work systems around firm’s strategy
 Deployment of workers around technogoloies and
production processes
 Other aspects of employee’s life cycle

Critical HR Goals (1/3)
 Labor productivity/cost effectiveness
 Investment in HR resources
 Formal feedback/appraisal systems
 Training and selective selection
programs
 Firm size/economies of scale

 Organizational felxibility
 Managing change – capability to change
 Short Run agiligy (adjusting the price of exisiting
labour)
 Functional flexibility
 Numerical flexibility
 Long Run agility (meeting long term targets such as
change in technology or market demands)
 Tension between the two – contractuals v/s
permanent staff e.g.

 Social legitimacy
 Government regulations
 Protection of natural environment
 Occupational safety and health
 EEO
 Tripple bottom line ( financial, environmental and
social)
 Incentives as best comapnies to work for
 Social Accountability 8000 – certified auditors or
accredited audit agency
 Consult employees and unions for complaints and
non compliance of HR practices

Goals: At a Close (1/5)
 Getting the Best Employees
 Staffing – Workforce Planning
 Staffing – Specifying Jobs & Roles
 Staffing – Recruiting
 Staffing – Outsourcing (having services and
functions performed by non-employees)
 Staffing – Screening Applicants
 Staffing – Selecting (Hiring) New Employees

 Employee’s due Benefits & Compensation
 Training Employees
 Career Development
 Employee Orientation
 Leadership development
 Management Development
 Personal Development
 Supervisional Development

 Ensuring Compliance to Regulations
 Personnel Policies & Records
 Employee Laws, Topics & Issues
 Ethics – Practical Toolkit
 To comply all Statutory Requirements
under Labour Laws

 Ensuring Safe Work Environments
 Diversity Management
 Dealing with Drugs at the Work Place
 Employee Assistance Programs
 Ergonomics : Safe facilities at the Work Place
 Personal Wellness
 Preventing Violence at the Work Place
 Ensuring Safety at the Work Place
 Supporting Spirituality at the Work Place

 Sustaining High-Performing
Employees
 Employee Performance Management
 Group Performance Management
 Interpersonal Skills
 Personal Productivity
 Retaining Employees

Strategic Tensions in HR (1/3)
 Labor scarcity (Health Care and IT)
 Elimination of forced labor
 Globalization
 Mobility of labor
 Survival of well resourced organizations
 Small firms under pressures

4/24/2024 Lecture 1/SHRM
 Labor Motivation
 Employment relationship not completely
defined.
 Conflicts can arise
 Unitarist approach – improve cooperation
 Plurist approach - improve intrinsic and
extrinsic incentives
 Conflicts can be detrimental to worker
motivation and trust

 Labour management
 Dependanle and disposable workers!
 Flexibility pressures
 Emregence of core/periphery models
 Clever balance between short term and
long term demands required

Boxall and Purcell chapter three 21
Strategic HRM: the Best-Fit School
In strategic HRM, there is a fundamental
debate over how HRM is, and should, be
linked to wider business strategy.
To many scholars, it seems obvious that
strategic HRM rests on a contingency
position: firms fit their HRM to their
particular strategies and environment and
are wise to do so (the best-fit school).

Strategic HRM: the Best-Fit School ...
 HR stratgy should be context specific and
argued that situational factors inevitably
affected choices in HRM, including
 Environment
 Industry
 Government policies
 Work Systems evolve accordingly
 Small business (SME’s): limited HR function
 Large companies (corporates): HR
departments at sopisticated level

Major Factors Affecting management choices in HR strategy
Economic & Technological
factors, inside & outside the
firm:
•Choice of sector &
competitivestrategy
•Nature of the dominant
productive technology
•
• Size & structure of the firm
& stage in the industry life cycle
•Quality of business capital
( well funded or under-
capitalize?)
•General economic conditions
Management
Choices in HR strategy
Social & Political factors, inside
& outside the form:
•Degree of labor scarcity
•Expectations & power of
employees( including union
strategies, where these exist)
•Managerial capabilities &
politics
•Labor laws & social norms
•General educational levels &
vocational training systems

Linking HR Practices to
Competitive Strategy
 Internal fit
 Between HR practices
 External fit
 Matching HR strategy to competitive
strategy of business unit

Selected HRM implications of Miles & Snow’s competitive types
Organizatio
nal/
Managerial
Characterist
ics
Defenders Prospectors Analysers
Competitive
Strategies
Limited, stable product
line. Growth through
penetration. Emphasis
on efficiency
Changing Product
lines. Growth
through innovation
& market
Stable & changing
Product lines.
Staffing &
Development
Strategies
Emphasis on internal
training & development
(‘make’)
Emphasis on
Recruitment (‘buy’)
Mixed Approaches(
both ‘make’ and
‘Buy’ as needed)
Performance
Appraisal
Process Oriented and
linked to training needs
analysis
Results oriented
and linked to
rewards
Mostly process
Oriented
Pay Policies Focused on Internal
equity
Focused on
external
competitiveness
Concerned with
both internal equity
& externel
competitiveness

Examples
 A study of 200 Spanish firms:
Innovative firms follow employee
participation, training and
development opportunities, better
wages, hiring of creative, innovative
people, given greater powers and
discretion to employees, reduced
controls, extensive trainings,
providing more resources for
experimentation.

Internal Fit
 Complementry fit (single employee fit)
 Use of expensive selection processes should
be accompanied by training programs and
retention programs
 Consistecy (across employees) fit
 such as standarized employment and work
conditions for same occupational group such
as clerks.
 Temporal consistecy
 employee A should be treated the same
way today as yesterday by the employer.
Reversal of employer behavior can be
demotivating

Internal Fit
 Avoid costly dupilcation of practices
(structured interviewing or assesment
center taking 5-6 tests or over
designed selection systems where
extra ‘ hurdles’ add no value)
 Avoid deadly combinations (heavy
training on teamwork but
individualistic rewards)

Critique External Fit:
 Multiple fits needed – Plural HR
objectives
 Fit between HR strategy and competitive
goals BUT
 What about employee needs? – if
ignored, motivational problems can arise
 Legitimacy needs, social needs and
rights of employees ( max work hrs,
minimum wages, safety laws etc).
 A specific HR strategy can not be
applied to ‘all rounder’ firms

Internal Fit - Critique
 Such kinds of fits not practical: high
commitment work systems but at same
time organizational flexibility pressures
force organziations for layoffs -job
insecurity which erode commitment

Configurational thinking in HR strategy: two different scenarios
Firm’s Choice
of
Competitive
strategy
Nature of productive
technology in the
sector
Implications for HR Strategy
Cost
Leadership
High technology or
highly capital-
intensive; often low
staff numbers but key
specialist skills very
important to
operations
HR strategy should be based on developing &
motivating workers to maximize the benefits of
the technology (which will help to achieve the
cost leadership strategy). Prediction: high-
wage/high skill models of labor management
are cost effective. Investments in creating ‘ high
performance work systems’ are likely to be
justified
Cost
Leadership
Low-Technology, often
highly labor intensive
operations & large
scale
HR strategy is dominated by the need to
survive in an environment where wages are in
competition.
Prediction: firm seek out low wage sites where
productivity is high and quality is acceptable.
Firms will pay the going rate in the local labour
market but avoid paying premium conditions or
over investing in training.

Internal Fit - Critique
 So both firms have same competetive
stragty but different nature of busines
and production process wich drives
different HR stratgy for both. Best fit
theory is too thin and overly simple!
 It is difficult to attain consistency
keeping in view the uncertaity a firm
faces – both temporal and among
employees

Linking HR practices to competitive
strategy (Schuler and Jackson 1987)
33
Desired competitive
strategy
Required employee skills and
behaviours
Supportive HR practices
HR outcomes

Strategic HRM: the Best-Practice
School
There are HR practices which are best
for firms regardless of context ( the
best-practice or universalist school).
Some practices to be considered
sensible or cost-effective for everyone
in certain micro aspects of HRM (e.g.
in employee selection and appraisal)

Best Practice School
 Enhance employee abilities through AMO
 Structured interviews (carefully
designed around job aspects) better
over unstructured
 Performance appraisal tied to objective
results (profits ROI) better over Input
based performance apprasial (such as
measures of timekeeping)
 High pay but lesser pay inequity to
encourage teamworking
 Promotion from within, high wages,
participation and empowerment, teams,
job redesign etc

Critique Best Practice
 Difference in opinion as to what
constitutes best practice ( 4-5 or a
dozen)
 Beyond a certain amount of uniformity,
managers start thinking about diversity
in HRP
 What if a practice is good for corporate
goals but not for employees such as
layoffs – can we still call it a best
practice?

 Labor (government) laws, cultural
practices vary from country to country –
union powers vary? Can best practiecs be
universalistic?
 Sectoral context: e.g. innovative firms
make use of more job rotation, team
working, TQM compared to low tech
firms.
 Organziational structure: Firm size;
introductrion of new technology etc
plays major role – such firms use more
best practices.

 Best practices more relevant for sectors
which emphasize quality, high tech
where firms need motivated and skilled
employees and pay them higher in
return. Even in high tech sectors low
skilled workers dont benefit as they are
paid less and best practices not for them
( labor market very loose for them).
 Employers will only invest in employees
when they wil be sure of returns –to
stay cost effective

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