Contemporary issues in HR management

Contemporary issues in HR management

Contemporary issues in HR management Question # 2: Employee engagement Introduction With regard to the SHRM practices, the contingency theory combines a number of management theories assuming contingency approaches that were mainly developed over the late 1960s. The contingency theory suggests that previously applied theories such as Taylors scientific management and Webers bureaucracy failed since they have overall neglected the fact that organizational structure and management style were actually impacted by contingency (environmental) factors. The theory assumes that there is no universal approach in terms of leadership or organization. Over the years of its evolution, the contingency formulated wide generalizations regarding the formal structures associated with the use of various technologies. Joan Woodward (1958) argued that technologies determine variations in such organizational aspects as centralization of authority, span of control, and the formalization of procedures and rules, while Fred Fiedlers contingency model entirely emphasized on individual leadership. In terms of contingency theory implementation, W. Scott argued that the nature of the organizational environment particular to an organization largely determines the best way to organize. In turn, Jay Lorsch, Paul Lawrence, and James Thompson mainly emphasize on the way contingency factors impacted organizational structure, while their thoughts dominated the evolution of the organizational structural theories in the 1970s. Further on, Johannes Pennings examined the interaction between organization structure, environmental uncertainty, and various aspects of performance, which provided an invaluable contribution in terms of SHRM applications (Delery and Doty, 1996). General discussion Conceptually, SHRM is regarded by HRM theorists either as a process or an outcome (Bamberger and Meshoulam, 2000). As an outcome SHRM primarily aims to attain

competitive advantage through effective management of human resources. As a process, SHRM links HR practices into business strategy, whereby an organization seeks to combine social, human and intellectual capital to fulfill its strategic goals (Bamberger and Meshoulam, 2000). Hence, SHRM primarily focuses on the link between strategic HR formulation and organizational strategy formulation. SHRM is therefore applied as corporate, business and organizational-level strategy by defining a set of implemented HR policies and practices. At that, HR strategy implementation is closely linked with the business strategy to facilitate the chosen competitive strategy. To achieve this, HR strategy involves the philosophy, programs, policies, processes, and practices that reinforce and stimulate various behaviors of employees appropriate for the competitive strategy of an organization (Peters and Waterman, 1982). The selection of appropriate HR strategy largely depends on the organizational form variations such as: organizations structure, size, competitive pressures, as well as labor markets stability, as well as worker resistance and manager-subordinate relations (Thompson & McHugh, 2002). Furthermore, HR strategy variations reflect two strategic management directions. The first one is the direct process-based control, wherein the focus is put on the managers monitoring and controlling workers performance. The second one is referred to as the indirect outcomes-based control, wherein the focus is put on the actual results, which assumes that managers widely engage intellectual capital, cooperation and commitment of their workers. The abovementioned management directions are empirically evident through the variety of organizational designs n HR strategy, assuming inevitable structural tensions that occur between managers and employees. Consequently, it is apparent that any HR strategy is a priori featured by inherent contradictions (Hammer and Champy, 1993). The analysis of HR typologies indicates that HR models are abstractions that are not necessarily implemented in the workplace, though can help us to genuinely comprehend the specific nature of HR strategies. The research findings indicate that the structural models that

determine SHRM approach are featured by several limitations, namely: the absence of internal strategies, the focus on strategic decision-making, and the lack of conceptualization of managerial control. Hence, SHRM conceptualizations evolve from the traditional perspective to managerial decision-making. However, organizational and management theorists have recently shifted these assumptions assuming that the role of todays manager has dramatically transformed from the conventional reflective strategist and planner towards the flexible decision-maker and respected role-model in internal relations with the employees (Brewster, 2001). In the early 1990s, researchers in management forwarded three models to make difference among the ideal types of HR strategies. The control-based model assumes that management permanently controls and monitors employee role performance. The resourcebased model primarily emphasizes on the interaction between employer and employees, while examining employee attitudes and behaviors under the conditions of manager subordinate relationships. The final structural model that defines SHRM approach is an integrative model combining the control-based and resource-based typologies. One of the most applicable structural approaches to SHRM strategy is defined as a resource-based approach, which is a tool applied to develop HR strategy typologies. The approach is based on the rewardeffort exchange, whereby managers tend to regard human resources as a strategic asset, rather than a variable cost. Hence, a genuine source of competitive advantage is composed of peoples knowledge, skills and expertise, as well as social relationships that potentially ensure non-substitutable capabilities (Grint, 1994). According to Selznick (1957), organizations possess particular competences enabling them to win competition over their rivals. Thus, the contemporary organization is conceptually viewed as a synergy of productive resources (in Mintzberg, 1989). Thus, the sustained competitive advantage is attained through thorough analysis of its capabilities and skills, as

well as the distinctive features from those of the competitors, rather through the analysis of an external position of an organization on the competitive marketplace. The resource-based approach assumes the exploitation of distinctive competencies within organization, its capabilities and resources. The latter are widely known as tangible assets, including physical, technological, financial, and human resources, as well as intangible assets (reputation, brand-name, know-how etc. The distinctive competency can be achieved only by an organization wherein organizational resources are valuable and unique. In turn, the understanding of capabilities assume that an organization possess collective skills to effectively coordinate its resources. Strategic management theorists claim that it is rather important to make the difference between capabilities and resources to genuinely understand the core factors that generate a distinctive competency (Hill and Jones, 2001). For instance, providing that organization possesses distinctive (unique) managerial capabilities, it may not need a unique workforce to achieve a distinctive competency. At that, most organizations tend to adopt one of the control-based HR strategies. In most cases, capabilities and resources are featured by value, inimitability, rarity, and non-substitutability. These characteristics are vital whenever organization strives to sustain its competitive advantage on the market. The integrative model is a synergy of two key models of HR strategy, wherein one focuses on the strategys that underlies the direction of managerial control, while the other focuses on the reward-effort exchange. Neither of the abovementioned structural forms (control-based and resource-based models) provides a sufficient framework to encompass the direction and the flow of HR strategy intensity. At that the models define two core HR strategy dimensions, namely acquisition and development, and the locus of control. The first dimension is emphasized on the extent the HR strategy develops its human capital. At that, organization either invests into training of its own workforce or buys qualified employees from the external market (Clegg, 1992). According to Bamberger and Meshoulam (2000),

this approach to SHRM strategy is known as make-or-buy. On the other hand, locus of control is focused on the application of HR strategy while monitoring employees adherence to the process-based standards. While the focus is placed on the outcomes, this dimension therefore excludes the development of any psychological contract that would nurture social relationships by encouraging mutual respect and trust (Brunsson and Olsen, 1993). Corporate HR strategies are shaped by contextual contingencies, while the ResourceBased View (RBV) literature trends emphasize on the studies of learning processes, intellectual capital, and organizational adaptability, indicating that namely large companies employ professional and mobile people. In particular, best practice model assumes that the companies will enhance their revenues providing they design and adopt best practice to manage human resources. The best practice approach to SHRM assumes the extended use of the same HR practices that are consistently and collectively pursued and eventually result in better performance, thus benefiting all organizations that adopt the best practice approach to SHRM. Best Practice HR components involve careful recruitment and selection; extensive use of communications; strong focus on training; teamwork based on flexible job design; performance appraisal; responsibility in decision-making; adaptive and fluid organizational structure; the use of internal practices; high employee commitment to enterprise goals; and high-quality staff and to reach high quality performance (Guest, 1997). HRM best practices are widely employed to achieve and maintain competitive advantage. The resource-based approach assumes that competitive advantage cannot be achieved only owing to the HR best practices application. In other words, HR best practices cannot be a source of sustained competitive advantage since they are not inimitable, rare, or non-substitutable. Boxall and Purcell (1999) forwarded best fit SHRM model grounded on the RBV as well as social aspects of HRM. The best fit model assumes that HR strategies are more effective providing they are appropriately integrated with its specific environmental and

organizational context. This notion features the open matching model (Purcell, 1999). The abovementioned approach to SHRM is widely known as the open matching model (Devanna et al., 1984). This structural model assumes that organizational structure and HR systems are coherently managed with organizational strategy. The matching model envisages the HRM-strategy-structure combination that is impacted by the environmental factors. At that, the internal HR strategy and external competitive strategy of an organization are fit, which circumstance makes the HRM model genuinely advanced (Beer et al., 1984). Such relationship is referred to as reactive, wherein HR strategy is subordinate to the corporate strategy and product market logic (Boxall and Purcell, 2002). This indicates that HRM is never conceptualized as a stand-alone issue in the corporate environment (Miller, 1987). Conversely, proper HRM strategy flows from and depends on the corporate (marketoriented) strategy of an organization. Strategically, HRM is therefore viewed by virtue of its close-knit interrelation with the internal consistency of an organizations business strategy (Boxall and Purcell, 2002). Within the strong alignment between human resource strategy and business strategy, HR strategy is viewed as a pattern of decision-making with regard to HR practices and policies applied by management to designate working processes and select, lead, manage, guide, motivate, appraise, develop and control staff (Bamberger and Meshoulam, 2000). The control-based model is regarded as a relevant approach to modeling various types of HR strategy. The model is grounded on the specificity of workplace control as well as managerial behavior to guide and monitor employee performance. Herewith, HR strategy and management structures are applied as certain tools and techniques to gain full control over all aspects of work performance, assure high quality of labor productivity, and eventually the high level of profitability. The model is entirely emphasized on controlling and monitoring employee behavior that enables to distinguish various HR strategies. The model stresses on

the fact that whenever organizations hire people, they should ensure that every single worker performs his/her own individual capacity. For this purpose, managers should arrange tasks, time, and working conditions wherein workers operate. In turn, workers hold their own interests in terms of rewards, pace of work, and job security while demonstrating both formal and informal behaviors that often counteract with the job controls set by management. Thus, the maintenance of control and discipline are the vital prerequisites of internal performance within organization; at that according to Keat and Abercrombie (1991), control should not be regarded as an ultimate goal, but rather as an effective means to transform individual working capacity into profitable production. Apart from the control-based model implementation, so far managers have developed and utilized alternative HR strategies to render employees and their behaviors. According to Edwards (1979), there are two successive dominant modes of control reflecting worker resistance and changing competitive conditions. The previous system of individual control exercised by the employers who held direct authority over their subordinates had been substituted by such complex structural forms of control as bureaucratic and technical control. The former mode of control is based on the written procedures and rules applicable to the work process, whereas technical control assumes wide application of systems and machinery such as surveillance cameras and assembly lines to monitor employees performance and behavior in the workplace. The typology of HR strategies is structured into direct control and responsible autonomy, whereby control depends on the nature of labor market and the manufactured product. Alternatively, Burawoy (1979) had categorized HR strategies development in terms of replacement of despotic regime by the hegemonic regime. At that, despotic regime assumed the full dominance of the mandatory manager-subordinate relations; whereas the hegemonic regime was based on the idea of the industrial citizenship, wherein

employment relations where regarded through the prism of bargaining and grievance processes. The mutual gains enterprise assumes the achievement of top-class quality performance through the fundamental transformation of SHRM practices. Most often the contemporary organizations face numerous challenges on this path, among others are as follows: (1) insufficient HR considerations within the internal structure of organization; (2) insufficient theoretical and practical comprehension of organizational change; (3) improper management systems that discourage long-term HR investments; (4) ineffective and unproductive unions; and (5) inadequate training system and skill-base for the staff. Thus the new mutual gains policy framework should consider the approaches to SHRM as well as relevant SHRM models discussed in this research paper (Kochan and Osterman, 1994). Conclusion Considering this, corporate, business and organizational environment should determine proper SHRM policies incorporated into appropriate structural forms. Thus, the strong link between environment, business strategy, and human resource strategy will extend the strategic importance of strategic management concepts (Bamberger and Meshoulam, 2000). In turn, there are contextual variables that influence HR strategy, including: markets, government policies, technologies and innovations etc (Boxall and Purcell, 2003). HRM practices and policies are therefore compatible with the organizational strategy, business conditions it faces, as well as the competitive environment (Beer et al., 1984). Overall, the process of SHRM approach and organizational strategy is conceptually integrated through: (1) the combination of the strategic management process of the organization with relevant HR practices and policies; (2) the internalization of HR importance by line managers; and (3) the workforce integration into organization to link commitment and interest identity with the strategic goals of an organization.

List of references Bamberger, P., and Meshoulam, I. 2000, Human resource strategy: Formulation, implementation, and impact, Sage Publications. Thousand Oaks, Calif. Beer et al. (1984). Managing human assets, 1984, p. 25. Boxall, P. and Purcell, J. 2003, Strategy and Human Resource Management, Basingstoke: Palgrave Macmillan. Boxall, P and Purcell 2002, Strategy and Human Resource Management Brunsson, N. and Olsen, J. 1993, The Reforming Organisation, London: Routledge. Brewster, C. (2001). HRM: The comparative dimension. In J. Storey (ed.), Human resource management: A critical text (pp. 25571). London: Thompson Learning. Burawoy, M. 1979, Manufacturing Consent: Changes in the Labour Process under Monopoly Capitalism, University of Chicago Press Delery, J. and Doty, D. (1996). Modes of Theorizing in Strategic Human Resource Management: Tests of Universalistic, Contingency, and Configurational Performance Predictions. Academy of Management Journal, 39(4), 802-835. Clegg, S. 1992, Modernist and post modernist organization, in Salaman, G (ed.) Human Resource Strategy Devanna, M., Fombrun, C., Tichy, N. and Warren, L. (1984): Strategic planning and human resource management. In: Human Resource Management, 21: 11-17. Grint, K. (1994) Re-engineering history: Social resonances and business process reengineering, Organisation, 1: 179-201.

Guest, D. (1992) Right enough to be dangerously wrong, in Salaman, G. (ed.), Human Resource Strategies, London: Sage, pp. 5-19. Guest, D. (1997). Human resource management and performance: a review and research agenda. The International Journal of Human Resource Management, 8(3), 263-276. Hammer, M. and Champy J. (1993) Reengineering the Corporation, London: Nicholas Brealey. Hill, C., and Jones, G. 2001, Strategic Management. Houghton Mifflin. Keat, R. and Abercrombie, N. (1991) Enterprise Culture, London: Routledge. Kochan, T., and Osterman, P. (1994). The Mutual Gains Enterprise: Forging a Winning Partnership among Labour, Management, and Government, Harvard Business School Press Mintzberg, H (1989) The structuring of organizations' in Asch, D & Bowman, A (eds) Reading in Strategic Management Peters, J. and Waterman, R. 1982, In Search of Excellence. New York: Harper & Row. Purcell, J. (1999). The Search for Best Practice and Best Fit in Human Resource Management: Chimera or Cul-de-Sac? Human Resource Management Journal, 9(3), 26-41.

Thompson, P. and McHugh, D. 2002, Work Organisations, 3rd edition, Palgrave.

Question # 4: National cultures Introduction Almost 30 years ago Professor Geert Hofstede pioneered the study of cultural diversity in 56 world countries. At that, he applied IBM global database in an attempt to impose uniform corporate culture worldwide to enable better collaboration (Lester, 2007).

As an IBM psychologist Hofstede performed a research during 1967-1973, wherein he gathered necessary data on the basis of over 116,000 questionnaires from approximately 100.000 multinational IBM employees representing 40 world countries. Herewith, he largely aimed to assess main differences in their values and attitudes (Hill, 2000). Over 1978-1983, Hofstede moved forward and conducted his next research study, including 53 world countries (Marcus and Gould, 2000). Therefore, as is widely known, Geert Hofstede identified five cultural dimensions, namely: (1) power distance; (2) collectivism vs. individualism; (3) femininity vs. masculinity; (4) uncertainty avoidance; and (5) long-term vs. short-term orientation (Cook and Finlayson. 2005). General discussion Geert Hofstedes methods enabled him to detect and evaluate the core components of national cultural systems of the studied countries, which have an influence on employees behaviours in work-related situations. The initial dimensions that indicated cultural differences were power distance, uncertainty avoidance, individualism, and masculinity, on which basis each studied country was provided with a relevant score (Hofstede, 1980). Further research on some Asian countries had added the final fifth element of cultural dimension, known as long-term orientation. On the basis of Hofstedes scoring system human resource managers are able to better understand and assess cultural peculiarities of a certain country, and further apply relevant practices appropriate for that culture (Cook and Finlayson. 2005). Initially, it might seem rather difficult to understand differences between various cultures, yet over almost 30 years cultural differences seem more approachable to all of us due to comprehensive research conducted by Geert Hofstede. His theoretical framework widens our perception of various differentiating features that exist among cultures (Lere and Portz, 2005). Today, Hofstedes cultural framework is extensively applied in a variety of

cultural, management, Internet and information technology contexts, and therefore is considered as a lead cultural paradigm. In accordance with Hofstede, national culture is defined as the collective programming of the mind which enables to differentiate the members of one group/category of people from others (Hofstede, 1991, p. 5). Therefore, Hofstede claims that people tend to share collective national character which identifies their cultural mental programming. Such programming, in turn, predetermines our individual beliefs, values, assumptions, approaches, expectations, attitudes and behaviors. Hence, Hofstedes cultural dimensions vary within national cultures and are also a subject to ratings for world countries (Gong et al., 2007). Power distance is the first known cultural dimension, which determines an extent to which members of society accept and perceive the power. At that different societies have different perceptions of status. In particular, corporations apply the system of hierarchy and therefore power sharing is unequal due to boss-subordinate relationships. In other words, power inequality largely predetermines our social status. At that, the power is globally distributed between the leaders and the followers. At that, in accordance with the Hofstedes high power distance, a particular society puts a particular emphasis on power and wealth, whereas low power distance ranking presupposes that a particular country does not care much about power and wealth differences (Gorman, 2006). In 1991 Hofstede defined power distance as the measure within which the less powerful members of organizations in a particular country accept commands from more powerful members, and whether power is equally distributed (Lere and Portz, 2005, p.62). At that, Hofstede stated that workers in large power-distance countries tend to accept commands from others, whereas workers in small power distance countries expect to be consulted (Lere and Portz, 2005). The second dimension is called uncertainty avoidance, wherein we try to avoid those situations where expectations and results are not clear to us. Such situations are featured by

poorly defined or ambiguous conditions. Thus, employees prone to high uncertainty avoidance will never break corporate rules, even if it is necessary under certain conditions, and will remain loyal to the same company during decades. Such people totally avoid any changes, either temporary or permanent, and therefore would rather work with people they know for a long time, rather than strangers (Gannon, 2001). Furthermore, uncertainty avoidance suggests a societys tolerance in relation to ambiguity and uncertainty. At that, individuals are often put under the conditions of the so-called unstructured situations that are featured by the feelings of unknown, surprise, novelty. At that, cultures that tend to avoid numerous uncertainties tend to eliminate the possibility of such situations emergence by applying strict regulations and rules, often these may be security and safety measures. Conversely, the so-called uncertainty-accepting cultures are prone to alternative opinionsharing; they are rather flexible and open-minded. Representatives of such cultures act beyond the rule or/and norm, and attempt to overpass various conventions (Gorman, 2006). According to Hofstede, individualism refers to an individual-group interaction. In broader terms, Griffin and Pustay (1998) claim that individualism puts every person on the first place, and therefore our own interests naturally overtop those of others. At that, individualism permanently opposes collectivism. At that, we are able to understand whether individual or collective values are mainly shared by a particular country or society within certain achievements and interpersonal relationships. In addition, individualism determines the extent to which individuals are likely to integrate into groups. To this end, in accordance with Hofstede approach high individualism ranking assumes that a particular society has developed loose ties between its members, meaning that people are rather ego-centric and tend to care mainly about own interests and needs. On the other hand, low individualism ranking assumes collective approach, wherein people are tied by close-knit links and tend to

share group work, common values, and live in extended families that are highly loyal (Gorman, 2006). As is evident from the above analysis, individualism naturally versus collectivism, and therefore there are two different management dimensions to focus on an individual or a group instead. This is a particular example, therefore, of how cultural dimension impacts management behaviour (hiring technique) within an organization (Lere and Portz, 2005). In turn, Hofstedes masculinity or goal orientation predetermines materialistic and aggressive behaviour to reach one's goals and/or ambitions (Firoz et al, 2002). Overall, in Hofstedes terms, masculinity is focused on the extent to which society is able to reinforce the conventional masculine role model of male attainment, power and control. At that, masculinity distributes the socio-cultural roles between genders. In due context, Hofstede states that womens values are different from mens among various societies. Moreover, mens values are mainly competitive and assertive, whereas feminine values are caring and modest. Hence, high masculinity ranking assumes high degree of gender differentiation, with the dominance of masculine role-model, whereas low masculinity ranking assumes low differentiation between genders (Gorman, 2006). Thus, masculine/feminine controversy regards the cultural differences between gender roles. To this end, Lere and Portz (2005) state that Social gender roles are clearly distinct, meaning that men are predominantly tough, assertive, and focused on material success, whereas women are tender, modest and mainly concerned with the quality of life (p.63). Finally, long-term orientation determines our outlook on life, work, family and other important socio-cultural issues. To this end, Asian cultures, for example, are rather long-term oriented with an emphasis on dedication, perseverance and hard work, whereas other cultures focus much on their past experiences and present conditions while respecting their traditions and fulfilling present-day commitments (Firoz et al, 2002). Finally, according to Hofstede,

long-term orientation bears relation to the virtue regardless of truth. For instance, thrift and perseverance are the values particular to long term orientation, whereas short-term orientation is featured by fulfilling social obligations, respecting traditions, and saving face. Therefore, cultures with high long-term orientation ranking most value thriftiness and perseverance, whereas a high short-term orientation ranking most value traditions and social obligations. However, many experts regard this Hofstedes dimension as the least convincing compared to the first four. Hofstedes cultural dimensions are regarded as well-established means of assessing and comprehending the effect cultural differences have on various features of human activity, including information literacy, technology acceptance, engineering innovation professional negotiating skills etc (Gorman, 2006). Various behavioural and socio-cultural differences define diversity as a strategic approach to managing and leading the diverse teams with the consideration of inter-personal similarities and differences among staff. Such approach necessitates the application of flexible attitudes towards employees, selection of proper leadership staff depending on particular situations, and designation of proper incentives to motivate people and sustain loyal teams (Thomas, 1996). Consequently, both individual and collective performance is highly improved given that diversity management practices are applied as effective managerial tools. To this end, the diversity should be properly managed in harmony with other important operational tasks. This is to indicate that diversity management has much reinforced the classical McKinsey (1982) model of organizational management and strategic development consisting of core 7-S factors: structure, strategy, system, skills, style, staff, and shared values. The diversity management approaches to human management should be therefore applied with the consideration of: awareness building among the staff, development

of overall diversity vision, as well as resource allocation to boost the diversity-oriented practices within organization (OFlynn et al., 2001). Conclusion Taking this into account, it is rather important that the contemporary interpretation of diversity is properly understood by both managers and employees in the multi-cultural business environments. Both categories therefore need proper training and skills enhancement in terms of the diversity applications in the workplace. While properly managed, diversity in teams advances personal productivity and creativity, improves interpersonal communication among staff, fosters dispute solution, and establishes overall fair and equal working climate. The diversity management programs that are effectively applied by many competitive organizations in the hospitality industry like Starwood, Hilton, Four Seasons, Sheraton et al., produce positive emotions, behaviours and attitudes while focusing on the mutual respect and of appreciation of multiple social, cultural, educational and other differences among employees. The diversity management programs and trainings therefore much help the hospitality organizations to sustain loyal and productive staff and ensure low turnover of human resources. The effective diverse workforce management assumes that the hospitality organizations select the best graduates from a wide pool of talent as well as from a broad range of various backgrounds, which altogether result in the maintenance of highlyqualified, flexible and responsive workforce. Hence, to maintain competitive advantage, an organisation should permanently attract and retain skilled and talented graduates whose personalities and individual skills will be highly respected and valued, while they will benefit organization through their quality individual performance, dedication to the shared values and corporate principles, and overall loyalty to the organizations goals (Zeitz and Dusky, 1988). Those organizations that effectively attract sustain and promote their human capital from the various demographic backgrounds by regarding the latter as its most valuable asset should be

considered by the potential applicants as the ones that effectively apply the diversity management practices (Nicholas, et al., 2001). The contemporary codes of business ethics entirely exclude any instances of discrimination, unfairness or disrespect to the individual feature or traits, and therefore the concept of minority employees is highly eliminated in the todays competitive organizations (Taylor and Ilgen, 1981). Ostensibly, the more effective is the management of the diverse workforces, the more effectively the organization will serve its customers.

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