HRM Strategy, System, Models and Typology

Dr. G C Mohanta, BE(Mech), MSc(Engg), MBA,

PhD(Mgt)
Professor
Al-Qurmoshi Institute of Business
Management, Hyderabad - 500005

Human Resource Strategy

HR strategy is designed to develop skills,

attitudes & behaviors among staff that will help

the organization meet its goals
HR strategy consists of principles for managing
the workforce through HR policies and
practices
It covers various areas of human resources
functions: recruitment, compensation,
performance management, reward,
recognition, employee relations and training

Human Resource Strategy

(Contd.)

In such workplaces, managers must rely on employees to cope with the uncertainties inherent in the labour process and
monitor and evaluate the outcomes of work. HR strategy aims at developing highly committed and exible people, internal
markets that reward commitment with promotion and a degree of job security, and a participative leadership style that forges
a commonality of interest and mobilizes consent to the organizations goals.

HR strategy must be aligned with the

organization's vision, mission and goals

In developing an HR strategy, the company
must analyze the characteristics of its
industry, determine its competitive
advantage, identify key processes & key
people
Creating different strategies for all groups of
people in the organization may be necessary,
depending on their skills, knowledge and
responsibilities
The strategy must look at the organization's
culture, structure, people and systems

Human Resource System

Human resource management operates through human
resource systems that bring together in a coherent way:
HR philosophies describing the overarching values and
guiding principles adopted in managing people.
HR strategies defining the direction in which HRM
intends to go.
HR policies, which are the guidelines defining how these
values, principles and the strategies should be applied
and implemented in specific areas of HRM.
HR processes consisting of the formal procedures and
methods used to put HR strategic plans and policies
into effect.

Human Resource Strategy (Contd.)

HR practices comprising the informal

approaches used in managing people

HR programmes, which enable HR strategies,
policies & practices to be implemented
according to plan
Becker and Gerhart have classified these
components into three levels:
the system architecture (guiding principles)
policy alternatives and
processes & practices

Models of HRM
The following are the three models of HRM:
Matching Model of HRM
Guest Model of HRM
Harvard Model of HRM

Matching Model of HRM

As per matching model of HRM:
HR systems & organization structure should be
managed in a way that is congruent with
organizational strategy
There is a HR cycle, which consists of 4 generic
processes or functions that are performed in all
organizations

Matching Model of HRM (Contd.)

These are:
Selection matching available human
resources to jobs
Appraisal performance management
Rewards the reward system must be short
& long-term, bearing in mind that business
must perform in the present to succeed in the
future
Development developing high quality
employees

Guest Model of HRM

As per Guest Model, individuals can be

motivated for helping the organization to achieve

excellence by concentrating on six core values
The superior organizational excellence will only
be achieved if these six core values are
integrated with organizations strategic
objective & are implemented coherently.

Guest Model of HRM (Contd.)

The six core values are:
Ategy: This will set the long term goals of where the
company is viewed, examples of this could be a to
make x amount of profit over the next 5 years or to
gain worldwide customer base within 3 years.
HRM policies need to be set and examples of these
are Attendance policies, Leave policies or Dress
code policies.
A set of outcomes, an example of this could be a
reduction in the headcount which meet the objectives
of 2010 or expansion into the Far East has been
achieved.

Guest Model of HRM (Contd.)

The behavioral outcomes are examples of the

way employees react & resolve certain issues

and these can include analytical,
communication or decision making behaviors
Performance outcomes are objectives which
will monitor an employees performance over
the year and will feed into his/her yearly
appraisal
Financial outcomes are the result of HR
strategy and determine the financial
performance of the organization

Harvard Model of HRM

Harvard model is based upon situational

factors and stakeholder interests

Situational factors are not within the
organizations control, such as, legal,
environmental and trade unions
Stakeholder interests are factors which are
inuenced by any person or body with a
vested interest in the organization
The managers can affect a number of factors
by means of the policy choices they make

Harvard Model of HRM

(Contd.)
The 4 Cs of this model are listed below:
Commitment
Competence
Costs effectiveness
Congruence

Harvard Model of HRM

(Contd.)
Commitment of employees to an organization

will lead to better loyalty and improved

performance
Competence is the skill and knowledge of the
employee, highly skilled & knowledgeable
employee should be retained & developed
Cost effectiveness has impact on salaries,
benefits, and the reward system
Congruence is the quality of agreement
between the employees and the organizations
goals

Human Resource Typologies

HR typologies are abstractions that may not be

existing in workplace, but they help in

understanding nature of HR strategies
Academics have proposed three models to
differentiate between ideal types of HR
strategies
First model is control-based model & is
grounded in the way in which management
attempts to monitor and control employee role
performance

Human Resource Typologies (Contd.)

Second model, the resource based model, is

grounded:
in the nature of the employeremployee
exchange
in the set of employee attitudes
in behaviours and
in the quality of the managersubordinate
relationship
Third approach creates an integrative model
that combines resource-based and control-based
typologies

Control Based Model

First approach to modeling different types of HR

strategy is based on:

Workplace control and
Managerial behaviour to direct & monitor
employee role performance
According to this perspective, management
structures and HR strategy are instruments &
techniques:
to control all aspects of work
to secure a high level of labour productivity and
a corresponding level of profitability

Control Based Model

(Contd.)
When organizations hire people, they have

only a potential or capacity to work

To ensure that each worker exercises his or
her full capacity, managers must organize the
tasks, space, movement and time within which
workers operate
Sometimes workers own counter
management behaviour causes managers to
control & discipline the interior of the
organization

Control Based Model

(Contd.)
There are two types of control: bureaucratic

control and technical control

Bureaucratic control includes written rules
and procedures covering work
Technical control includes machinery or
systems assembly line, surveillance cameras
that set the pace of work or monitor
employees behaviour in the workplace
Managers can also use a divide and rule
strategy, using gender and race, to foster
managerial control

Control Based Model

(Contd.)
Frst is the logic of direct, process-based

control, in which the focus is on efficiency &

cost containment
Whereas the second is the logic of indirect
outcomes-based control, in which the focus is
on actual results

Resource Based Model

Second approach to developing typologies of

HR strategy is grounded in:

the nature of the rewardeffort exchange and
the degree to which managers view their
human resources as an asset as opposed to a
variable cost
The sum of peoples knowledge & expertise
and social relationships, has the potential to
provide
non-substitutable capabilities that serve as a
source of competitive advantage

Resource Based Model (Contd.)

Sustained competitive advantage is achieved

not through an analysis of a firms external

market position
but through a careful analysis of its skills and
capabilities, characteristics
that competitors find themselves unable to
imitate
The resource-based perspective emphasizes
the strategic importance of exploiting internal
strengths and neutralizing internal
weaknesses

Resource Based Model

(Contd.)
The resource-based approach exploits the

distinctive competencies of a work

organization: its resources and capabilities
An organizations resources can be divided
into tangible and intangible resources
The capabilities are the collective skills
possessed by the organization to coordinate
effectively the resources

Resource Based Model

(Contd.)
Four characteristics of resources and capabilities:
value, rarity, inimitability and non-substitutability are

important in sustaining competitive advantage.

From this perspective, collective learning in the
workplace on the part of managers & non-managers on:
how to coordinate workers diverse knowledge & skills
and
integrate diverse information technology,
is a strategic asset that rivals find difficult to replicate
In other words, leadership capabilities are critical to
harnessing the firms human assets

Integrative Model
Bamberger and Meshoulam integrate the two

main models of HR strategy:

one focusing on the strategys underlying
logic of managerial control
the other focusing on the rewardeffort
exchange
They build a model that characterizes the two
main dimensions of HR strategy involving
acquisition & development and
locus of control

Integrative Model (Contd.)

Acquisition and development are concerned

with developing internal human capital

Locus of control is concerned with the degree
to which HR strategy focuses on monitoring
employees compliance with process-based
standards

Integrative Model (Contd.)

These two main dimensions of HR strategy yield
four
different ideal types of dominant HR strategy:
Commitment,
Collaborative,
Paternalistic and
Traditional.

Integrative Model (Contd.)

The commitment HR strategy is characterized as

focusing on the internal development of employees

competencies and outcome control
The traditional HR strategy is viewed as focusing on the
external recruitment of competencies and behavioural
or process-based controls
The collaborative HR strategy involves the organization
subcontracting work to external independent experts,
giving extensive autonomy and evaluating their
performance primarily in terms of the end results
The paternalistic HR strategy offers learning
opportunities and internal promotion to employees for
their compliance with process-based control
mechanisms

Integrative Model (Contd.)

Organizations HR strategy is strongly related

to its competitive strategy

The traditional HR strategy is most likely to be
adopted by management:
When there is certainty over how inputs are
transformed into outcomes and/or
When employee performance can be closely
monitored or appraised

Integrative Model (Contd.)

The other dominant HR strategy, the

commitment HR strategy, is most likely to be

found in workplaces
in which management lacks a full knowledge
of all aspects of the labour process and/or
the ability to monitor closely or evaluate the
efficacy of the worker behaviours required for
executing the work
This typically refers to knowledge work.

Integrative Model (Contd.)

In such workplaces, managers must rely on

employees to cope with the uncertainties inherent

in the labour process and monitor and evaluate
the outcomes of work.
HR strategy aims at developing highly committed
& exible people,
internal markets that reward commitment with
promotion and a degree of job security,
a participative leadership style that forges a
commonality of interest and
mobilizes consent to the organizations goals.