What is “(S)HRM”?

Dr Phil Jones
MBM211 Human Resource Management
Dubai EMBA
The Meaning of ‘HRM’
1. Specialised organisational department.
2. Generic term denoting any approach to
employment management.
3. Specific, distinctive, minority(?) approach to
achieving competitive advantage through the
strategic deployment of a highly committed
and capable workforce using an array of
cultural, structural and personnel techniques
(SHRM). (Storey, 1995)
HRM: Beliefs & Assumptions
• Human resources can give competitive
advantage
• Aim should be employee commitment not
mere compliance with the rules
• Employees should therefore be very carefully
selected and developed
HRM: Strategic Qualities

• HR decisions are of strategic importance

• Top management involvement is necessary
• HR policies should be integrated into the
business strategy – stemming from it and even
contributing to it.
HRM: Critical Role of Managers
• HR practice is critical to the core activities of
the business = “much too important to be left to
personnel specialists”.
• Line managers need to be closely involved both
as deliverers and drivers of HRM policies.
• Much greater attention is paid to the
management and development of managers
themselves.
HRM: Key Levers for Change

• Managing culture is more important than

managing procedures and systems.
• Integrated action on selection, training,
communication, rewards and development.
• Organisational restructuring and job redesign
allow devolved responsibility and
empowerment.
Common (S)HRM Themes
Sisson & Storey: Torrington & Hall:
• People = strategic • Flexibility
resource • Quality
• Use of planning • Customer Orientation
• Internal Integration • Employee Commitment
• External Integration • Continuous Learning
• Proactive
• Senior Management
Support
Strategic Human Resource Management
(Boxall & Purcell, 2003, 2008)

• Concerned with explaining performance

differences between businesses via the
analysis of people management practices and
the organisation of work.
• ‘Strategic’ = critical to survival; seriously
consequential; significant to firm’s future.
• Two strategic problems:
• ‘Viability’ – ‘table stakes’; similarity to competitors.
• ‘Sustained Advantage’ – superior return on assets;
different from competitors.
Boxall & Purcell cont…
• linking work and related employment practices
needed to carry out that work to Business
Performance
• Creating sustained competitive advantage via
outstanding mix of:
1. Labour productivity – cost effectiveness
2. Organisational flexibility – responsiveness &
agility.
3. Social legitimacy – social standing as an
employer (brand?); employer of choice for ‘talent’.
Strategic HRM (Daft, 2006)

Company Strategy

Attract an Effective Work

Force: HRM Planning; Job
Analysis; Forecasting;
Recruiting; Selecting

Maintain an Effective Develop an Effective

Work Force: Work Force: Training;
Remuneration; Benefits; Development; Appraisal
Labour Relations;
Terminations
Integration of SHRM with Organisation
Strategy?

OS HR Separation OS HR Holistic

OS HR Fit
OS HR HR Driven

OS HR Dialogue
Dialogue vs HR Driven SHRM

Dialogue…
1. What business are we in?
2. How are we going to make money?
3. How should we organise work and manage people to do this?

HR Driven…
1. What are the core competencies of our people?
2. How do we leverage these to make money?
3. What business should we be in?
Resource-Based View (RBV)
(Prahalad & Hamel, 1990)

• Temporary Advantage vs. Sustained

Competitive Advantage.
• Resources offering ongoing advantage:
•Add value
•Are unique or rare
•Are difficult to imitate
•Are non-substitutable
“People are our most Important
Asset”
• Identifying, utilising & renewing core
competencies.
• Competence in SHRM = strategic resource?
• Emphasis on learning + developing capacity
to learn: “Learning Organisations”.
• Unique skills = emphasis on training &
development.
• “Hard” vs. “Soft” HRM
CEOs No Longer Say ‘People Are Our Greatest
Asset’

• 2017 Korn Ferry Survey of 800 ‘CEOs & Leaders at global

firms’.
• 67% see people as ‘bottom line cost, not top line value
generator.’
• 67% believe technology is more valuable
• 44% believe automation, artificial intelligence and robotics
will make people ‘largely irrelevant’ in years to come.
• ‘5 most prized assets in 5 years time?’ did not include
‘people’.
 Strategic HRM
Big Ideas, Key Issues, Strategic
Choices
Developing & Sustaining a High Commitment/High Quality
Work Force (David Guest, 1989)

HRM Policies Human Resource Organisational

& Techniques Outcomes Outcomes
Organisational/ High
Job Design Strategic Job performance
Integration
Management of High
Change Problem-solving
Commitment Change
Recruitment
Selection Innovation
Socialisation Flexibility High
Cost effectiveness
Appraisal, training,
development Quality Low
Turnover
Communication
Absence
Grievances
SHRM – Big Ideas, Key Issues &
Strategic Choices (1)
• Proactive approach to HRM at level of
strategic management with the organisation.
• HRM professional become ‘Business
Partners’; HR practice is devolved back to line
managers.
• Identify core competencies & focus on these;
outsource non-core functions and processes.
• Increase flexibility – functional; numerical;
temporal; financial…
The Flexible Firm – Atkinson 1984

19
Managing The Flexible Firm – Atkinson
1984
Core Workers Periphery
Focus for Mgt Employee Job/Role

Instrument of Control Effecting Deployment Delivery against Schedule

Management Style Participative Directive

Remuneration Wage for Time Worked Fee for Work Done

System
Incentive System Performance Appraisal Delivery on Schedule

Labour Supply Recruitment & Training Competitive Tender &

Severance
20
SHRM – Big Ideas, Key Issues &
Strategic Choices (2)
• Need to ‘Win the War for Talent’:
•Define, recognise, identify ‘Talent’.
•Attract, retain & develop ‘Talent’.
•Become ‘Employer of Choice’.
• Need to unlock discretionary effort:
•Adopt high commitment approach to HRM
•Design high motivation organisations, jobs &
work and allow employees to use their
creativity, skills and discretion.
 Assumptions of High
Commitment HRM

If you implement You will improve

high commitment, quality of working
high performance Then life, quality of
human resource customer service,
practices linked to organizational
strategy effectiveness

• Job Security • High Commitment

• Career Opportunities
• Performance Appraisals
• Training & Development
• Recruitment & Selection
• Pay & Rewards
• Work-life Balance
• Challenge & Variety
• Job Autonomy
• Involvement & Voice
• Well-being
• High Job Satisfaction
• Low Voluntary Turnover
• Low Grievance Rate
• +ve Discretionary Behaviour
• High Quality
• High Performance
Task Performance:

Task performance (P) depends on:

•Ability (A)
•Motivation (M)
•Opportunity (O)
P = AMO
•What are the implications for high
performance HRM?
Motivation: two major themes
Social Processes (external Cognitive Processes
influences) (internal influences)
• Leadership • Needs & Drives;
• Reward Systems • Values & Attitudes
• Design of Work • Personality;
• Group Influences • Learning;
• Negotiation • Decision making
• Social Power
Managing the Psychological Contract
“…the perceptions of both parties to the
employment relationship – organization and
individual – of the reciprocal promises and
obligations implied in that relationship.”
(Guest & Conway, 2002)

• What is the nature of the deal between

us?
• What should I be doing?
• What should you be doing?
The employment and psychological contracts between employer and
employee.
External contexts

Employment HRM Practices Psychological

Contract: Contract :
Employee effort Commitment
Expected & Motivation
& rule adherence
Outcome =
+
Employer reward Performance
& job security beyond
Leadership
expectation

(cf. Transactional vs Transformational Leadership)

 SHRM – Big Ideas, Key Issues &
Strategic Choices (3)
• Need to reconcile the tension between
‘differentiation’ and ‘integration’.
• Need to develop effective integrating
mechanisms:
•Management & Leadership
•Employee values & beliefs (organisation
culture and psychological contract)
•Technology
•Formalisation (rules, regulations,
bureaucracy)
SHRM – Big Ideas, Key Issues &
Strategic Choices (4)
• Need to identify and reward “the right”
attitudes and behaviours:
•Identify key attitudes, knowledge and
behaviours.
•Performance Management: Measure,
Appraise, Develop; Improve or Dismiss.
• Need to effectively manage change
• Develop coherent and strategically integrated
‘bundles’ of HRM policies and practices
SHRM polices and practices need to be externally
integrated with all organisational sub-systems

Task

Technology Management Structure

People
Summary of HRM Practice

• All those activities associated with the

management of employment relations in the
firm (Boxall & Purcell, 2008)
• Design of work and management of people
• Management of all groups including
managers
• Involves line & specialist managers
• Variety of management styles
 ‘Best Fit’ vs ‘Best Practice’?

• To what extent can we improve the performance of our

business by copying the HRM strategies, policies, approaches
and techniques exhibited by our successful competitors?
• How useful are (S)HRM and/or other organisational case
studies in informing our management decisions?
• Evidence informed management?
• Analytic vs Statistic generalisability?
 Evidence about SHRM Practice
(Boxall & Purcell 2003, 2008)

• Best Practice = ‘universal strategies’

• Best Fit = ‘critical contingencies’
• Role of National Context = International (S)HRM
• Role of Sectoral & Organisational Context
• Limited diffusion of ‘best practice’
• Innovative work practices = reaction to
competition?
• High Commitment HRM = adopted by large, high
tech, high value added, multinational & professional
services companies?
• Some evidence of increase perf in low skill jobs
SHRM – Summary of Strategic Goals
• Reconcile Differentiation & Integration
• ‘Joined-up’ policies and procedures
• Flexibility – functional; numerical; financial
• Motivation – unlocking discretionary effort
• Win the ‘War for Talent’ – identify, recruit, develop &
retain.
• HRM professionals = ‘Business Partners’; practice is
devolved back to line managers.