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Table of Contents

Strategic Human resource management....................................................................2

Relationship between strategic and SHRM..............................................................2
Best fit:.................................................................................................................... 2
Best practice:.......................................................................................................... 3
Human Resource Departments are responding to the challenge of SHRM.................4
Change management models..................................................................................... 5
HR development......................................................................................................... 7
Competence Model..................................................................................................... 8
Learning Organisation................................................................................................ 9
Performance management system...........................................................................10
Training and development........................................................................................ 11
For developmental activity to be deemed strategic organizations need to shift the
focus from a training to a learning approach. Discuss this proposition in the context
of development activity supporting individual and organizational change...............12
Outline the main principles of HR planning..............................................................13
You have been asked to address a regional audience from a management institute
on the subject of Getting the most from your Human Resources function A cost
effective value added service for the 21st century. What would you recommend and
how you go about implementing this?......................................................................14
What issues do organizations face in managing complex change? How can
organizations maximize the success of change management programs?................15
How would you present the case for an organization to adopt a strategic approach
to the management of people? What would be the potential advantages and
disadvantages that an organization might face? Please use case illustrations to
support your argument............................................................................................. 16

Strategic Human resource management

The way to relationship and manage all employee to achieve goals
Main objective:

Integration between HR strategies and business strategies

Provide direct sense to need of business and individual to develop and implement of
coherent and practical HR policies and program

Hendry and Pettigrew (1986), four meanings of SHRM:

Planning in HRM
Integrated approach to design and implementation of HR system
Matching HRM policies and activities with the business strategy of the organization
Viewing people as a strategic resource for the achievement of competitive advantage

Relationship between strategic and SHRM

Best fit:
a model of HRM that focus on connection (alignment) between HRM, BS and the external context
of the company
Based on the idea that HR strategies flow from business strategy
The success depends on its ability to:

Integrate into the strategic plans

Provide horizontal or vertical integration of the key policy areas
Allows organizations to determine whether a hard or soft approach needs to be taken in a
given circumstance
Hard includes outsourcing, enhanced productivity, emphasis on tighter contracting
Soft relies on involvement, partnership and communication and sharing

Adapted to fit a wide range of business contexts

Related between life cycle models and competitive advantages models
Life cycle:
Stage
Start up

HR practices
Flexible patterns of work
Recruitment of highly motivated and committed
employees
Little formality
No unions
More sophisticated recruitment and selection
Training and development
Performance management processes
Reward system
Focus on high commitment
Developing stable employee relation

Growth

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Control compensation
Attention to the control of labour costs
Focus on increasing productivity
Strained employee relations
Control compensation
Emphasis on rationalization of workforce and
downsizing
Abandoning some longstanding practices to cut
costs
Trade unions have a marginalized role
Retaining and career consulting services

Maturity

Decline

Competitive advantage model

Three key bases of competitive advantage:

o cost leadership/utilization HR strategy: short term performance measure result or
outcome. Hierarchical pay, few incentives. Narrow career path, limited training
o differentiation/facilitation HR strategy: broad career paths. Extensive training. Equal
and fair pay or many incentives for creativity
o focus/accumulation HR strategy: equal and fair pay with many incentives. Hiring
employees belonging to the new target market
The cost reduction: led HR strategy focus on hard HR technique, quality enhancement
The innovation: led HR strategy focus on soft HR techniques and policies

Advantages:

Desire competitive strategy (lost cost)

Require operation cost decrease
Supportive HR practices
HR outsourcing (reduce labour cost)

Disadvantages:

Reliance on the classical rational-planning approach to strategy marking

Ignore employee interests in pursuit of enhanced economic performance
Lack of emphasis on the internal context of individual business within the same sector

For example: Conducting a Make Versus Buy Evaluation for a Best-Fit HR Sourcing Model
A Top 5 Canadian bank wanted to evaluate the optimal sourcing model for its human resources (HR)
function. It engaged Everest Group to conduct a make versus buy assessment, and when the decision
was made to outsource HR services, Everest Group developed the specifications, prepared the RFP,
and crafted the necessary service level agreements (SLAs) for the third party relationship. Everest
Group also assisted in the evaluation of potential service providers, and supported the negotiation and
contracting phases. The client achieved C$30 million in savings, significantly improved services, and
improved time to market
Best practice:
Enhance organizational performance by the potential of HM practices. Usually categorized as high
commitment, high involvement or high performance
Pleffer (1994) list of seven practices:
1. employment security 2. Selective hiring 3. Team working 4. High pay contingent on company
performance 5. Extensive training 6. Reduction of status difference 7. Information sharing.

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Johnsons (2000) : the best practice or the high performance work practices are describe as HR
methods and system that have universal, additive and positive effect on organization performance.
This relates to the fact that the best practices that the organization employs, each will add to previous,
thus compounding the resulting performance of the organization.
Difficult arise here, as best practice models vary significantly in their constitution and in their
relationship to organizations from research and empirical data difficult.
For example:
Develop academic and business plans that address university objectives as well as changing
economic, industry, and regulatory environments.
Clearly define areas of responsibility. Assign responsibility and delegated authority to deal
appropriately with the organization's goals, objectives, operating functions, and regulatory
requirements.
Establish performance objectives and provide regular appraisals to all employees. Specify the level of
competence needed for particular jobs in requisite skills and knowledge requirements. Communicate
clearly to all personnel the responsibilities and expectations for the unit's activities.
Establish open communication channels to facilitate the flow of information across all activities and to
those who need the information. Consult with individuals who have the expertise to make informed
decisions.
Provide the appropriate training, cross-training, and resources to help personnel perform their duties
successfully. Assign duties to individuals who have been properly trained, can make sound judgments,
do not have conflicting duties, and fully understand what is expected.
Protect the university's assets by establishing procedures that properly dispose of, and secure
sensitive and/or private information. Document key controls that provide evidence that various
reconciliation and tracking functions are being adequately performed on a regular and periodic basis.

Human Resource Departments are responding to the challenge of SHRM

Auditing performance:
To ensure that the investment in HR can be justified in business terms
Audit and measurement of HR cost and benchmarking of service
Information to audit, operational data, cost, time spent on activities, the cost of external service, and
departmental structure
Devolution
Moving of power and responsibility from a main organization to a lower level
Reallocation Devolution to the line benefit and risks
Devolution activities, training, recruitment, appraisal, and so on
E.g: service center and the consultancy imperative, use of technology and devolution and the
maintenance of people relationship and support.
Decentralisaton:

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Getting closer to the business or diluting HR intent
Type A, Type B, Type C
Outsourcing:
Passsing activities previously carried out by HR
New role for HR, base on cost or service criteria, taking it back in house or outsourcing everything
Torrinton, Ulrick and Schule
Challenges for HRM today
Diversity in the workforce
Result of changes in government requirements
Organisational structures
Technology
Management approaches

Change management models

George Box, a statistician, famously wrote that essentially, all models are wrong , but some are
useful. The field of change management continues to prove him right.
Organisational change management (OCM) is a structure approach in an organization for ensuring
that changes are smoothly and successfully implemented, and the lasting benefit of change are
achieved.
Organisation change is described as the intended or unintended rearrangement of the organizations
resources in order to exhibit different characteristics and relate differently to its environment.
A comparison of five popular models. By no means is this list complete. The complexity and
unpredictability of human behavior will ensure that the field of change management will continuously
produce more framework to study and more model to adopt
Dr John Kotter: 8 step process for leading change
Thirty years of research by leadership guru Dr. John Kotter have proven that 70% of all major change efforts in
organizations fail. Why do they fail? Because organizations often do not take the holistic approach required to see the
change through.
However, by following the 8-Step Process outlined by Dr. Kotter, organizations can avoid failure and become adept at
change. By improving their ability to change, organizations can increase their chances of success, both today and in
the future. Without this ability to adapt continuously, organizations cannot thrive.
Dr. Kotter has proven over his years of research that following The 8-Step Process for Leading Change will help
organizations succeed in an ever-changing world.

Step 1: Establishing a Sense of Urgency

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Help others see the need for change and they will be convinced of the importance of acting
immediately. E.g.:

Examine market and competitive realities

Indentify and discuss crisis, potential crisis or major opportunities
Provide evidence from outside the organization that change is necessary

Step 2: Creating the Guiding Coalition

Assemble a group with enough power to lead the change effort, and encourage the group to work as a
team.
Attract key change leaders by showing enthusiasm and commitment
Encourage the group to work together as a team
Step 3: Developing a Change Vision
Create a vision to help direct the change effort, and develop strategies for achieving that vision.
Step 4: Communicating the Vision for Buy-in
Make sure as many as possible understand and accept the vision and the strategy.

Build alignment and engagement through stories

Use vehicle possible to communicate the new vision and strategies
Keep communicate simple and heartfelt
Teach new behavior by the example of the guiding coalition

Step 5: Empowering Broad-based Action

Remove obstacles to change, change systems or structures that seriously undermine the vision, and
encourage risk-taking and nontraditional ideas, activities, and actions.
Step 6: Generating Short-term Wins
Plan for achievements that can easily be made visible, follow-through with those achievements and
recognize and reward employees who were involved.
Step 7: Never Letting Up
Use increased credibility to change systems, structures, and policies that don't fit the vision, also hire,
promote, and develop employees who can implement the vision, and finally reinvigorate the process
with new projects, themes, and change agents.
Plan for and create visible performance improvements
Recognize and reward personnel involved in the improvements
Reinforce the behavior shown that led to the improvements
Step 8: Incorporating Changes into the Culture
Articulate the connections between the new behaviors and organizational success, and develop the
means to ensure leadership development and succession.

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Bridges Transition model
The ideas of Bridge (1991) on transition provide a good understanding of what is going on when an
organization change take place
He differentiates between change and transition:
Change is situational and happened without people transitioning and transition is psychological and is
a three phase process where people gradually accept the detail of the new situation and the changes
the come with it.
People need to transition through change. They do this through three stages:
Ending: people need to let go of the past first before the can embrace the new.
Neutral Zone: people begin to explore their comfort with the new change
Beginnings: people begin to embrace the new change
All of us go through these stages. But some of us may move through them quickly while other very
slowly. And some people will not make the transition at all.
Change (is fast) is situation and happens without people transitioning
Transition (is slow) is psychological and is a 3 phase process where people gradually accept the detail
of the new situation and the changes that come with it.

HR development
A set of systematic and planned activities designed by an organization to provide its members with
the necessary skills to meet current and future job demand.
HRD defined as any activities contributing to the development of people working for an organization
HRD focus on theory and practice related to training, development and learning within organization,
both for individual and in the context of business strategy and organization competence formation
Gourlay (2000)
Nature of HRD

A behavior of science
HRD is a system
Quality of life
Addition in productivity

Human resource wheel (MCLagan )

Human Resources has become an essential part of any organization. The Human Resource department or wing is
multi-functional. HRM or Human Resources Management and HRD or Human Resources Development are two parts
of HR.
The HR in an organization look to increasing the productivity of the employees, enhancing the quality of their work,
fostering innovation, fulfilling other of the HR objectives, and bring in change into the organization with their activities.
With these aims in view, the functions of the HR are categorised into HRM (Human Resources Management)
activities and HRD (Human Resources Development) activities.
The functions that the HR undertakes in its management aspect include activities like HR planning for recruitment and
staffing of the organization, managing the performance appraisals of the employees, recruitment, selection and
appointment of staff, determining the compensations and benefits that are due to the employees, assisting the
employees whenever there is any problem, maintaining relations with the union and labor organizations, research into
the information systems deployed in their department, Training and Development of the employees in their individuals
and group capacity, development of the organization with regard to the Human Resource efficiency, Helping the
career development of employees and designing of the organizational and job requirements for better staffing
solutions.
Out of these, the first seven are management oriented and concerned with the primary functions of personnel
recruitment and its connected activities and labor relations. The last four functions belong to the development of the
employees and the organization. McLagan defined these activities of the HRD in 1989. There have been a spate of
HRD activities in organizations in the last decade when the management realized the need for the training and
development of the employees that will ultimately reflect in the general and overall development of the organization
and its business activities.

HRD is the adding of value to the human resources or employees through training and developmental activities to
enhance their skills, knowledge, talent and vitality. This training is need based and should be focussed on the
objectives of the organization if it is to be effective.

Competence Model
Boyatzis (1982): an underlying characteristic of and employee (i.e., motive, trait, skill, aspect of ones
self-image, social role or a body of knowledge) which results in effective and superior performance
Core competence in organization

An unique capability the organization that create high value and that differentiates the
organization from its competition.
Core competencies are seen as giving and organization its competitive edge, and in many case
is viewed as essential to its survival

Used widely in:

Job analysis:

Systematically model jobs

Underpin changes
Contribute to performance planning reward decision

Candidate selection process

Profile people for their development in jobs

Underpin selection decision
Focus education, training personal development plans.

5 competence models:
Hanunel and Prahaled (1994)

Bundle of skills (7 competency terms): Core competence, Threshold competence,

Differentiator competence, Emerging or decision, competence, Life cycle competence,
Functional competence, Personal behavior/effectiveness competence
Supply side analysis strategy of HR plans

Nordhaug (1993)

Comprehensive view for employment system:

Meta competences, industry competences, intra organizational competences, standard
technical competences, technical trade competences, unique competences

Tony Cockerall (1989)

Management competencies and management developmental needs.

11 high performance management competencies: information search, concept formation,
conceptual flexibility, interpersonal search, managing interaction, developmental orientation,
impact, self confidence, presentation, proactive orientation, achievement orientation.

Pedlar and Burgoyne (1994)

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11 qualities of a successful manager

Importance of personal and interpersonal aspects.

WH Smith

Used to underpin graduate recruitment and development

Cover nine competences, written communication, oral communication, leader ship, team
membership, planning and organizing skills, decision marking, motivation, personal strength,
analytical reasons.

Learning Organisation
Pedlar et al (1991) An organization which facilities the learning of all its member and continuously
transform itself
Burgoynee (1999) 7 features

Company aware of internal politics and question existing practices and beliefs
Managers aware of collective learning process and knowledge reside, in peoples heads,
technology or archives.
Strategies are required to enable collective learning, and centralization answered.
Organisation create own development tools
Stakeholder interest not in conflict.
Issue of ownership of competence and intellectual property addressed.
Processes needed to deal with interaction between tacit and explicit knowledge.

Learning organization (strategic approach):

Important in strategic HRD approach to organizing development (create knowledge as strategic asset
and release potential assets of company)
Pedlar et al (1988) Reflects a strategic approach

A learning approach to strategy

Participative policy making
Information used for understanding
Formative accounting and control
Internal exchange
Reward flexibility
And enabling structure
Boundary worker such as customer and supplier act as environmental scanner
Inter-company learning
A learning climate with help and support when things go wrong
Self-development opportunities for everyone

Possible means used in a Learning organization

Individual learning and development:

Formal training
Learn from teams
Coaching or mentoring
Observation
University programs
Individual development plans

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Job rotation

Performance management system

Armstrong and Baron (1988) strategic integrated approach to delivering sustained success to
organisation by improving the performance of the people who work in them and by developing the
capabilities of teams and individual contributors
Main features are:

Objective setting
Ongoing review of objectives
Develop personal improvement plans linked to training and development
Formal appraisal with feedback
Pay review
Competence based organizational capability review

Steps for PMS:

Step
Step
Step
Step

1: Objective setting
2: Formal appraisal
3: Personal development plan, training plan and career plan
4,5,6: organizational capability and competence review

Alan flowler, Performance Management: The new MBO

The process approach (no coherent set of organization goals and priorities)

High performance secured by analyzing work.

One best way
Assumption:
o Employees will follow method
o Base on logical viewpoint and patently obvious the best way of working

Categories of management techniques: work study, critical path analysis, operational research,
planning and review, cost benefit analysis, job evaluation, statistical manpower planning management
by objects.
The people approach (degree of competence)

High performance achieved through people

Need to train:
o Right people, right jobs, right number
o Appropriate skills, effectively led and motivated
Assumption

Categories of management techniques: selection test techniques, training needs analysis, training
techniques, joint consultation, industrial democracy, merit rating, quality circles, human resource
planning, performance related pay.

Training and development

Learning/training:

Short term, specific occupation/skills, ensuring organizations with SKF to fulfill objectives
specific to job orientation

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Purpose:

Productivity, labour turnover (keep up to date skills), customers complaints, motivation (gap,
catalyst for change, complement HRD for integrating business planning with human capacity
and combining individual need with organization need in development)

Development/Education

Long term, broader in scope, grow with SKE, career rather the job orientation

Purpose of employee and management development:

Personal growth/future resources

Intangible and strategic assets
Ensure firms meet current and future performance
Improvement of individual, growth, maximum potential and promotion
Development activities: training, career planning, appraisal, job rotation, learning, etc.

Forms of training/learning:

Introduction training:
o Rule, policies, historical nature, etc
Apprentice training:
o Induction, skills (basic, application), etc
Operative training:
o Task, standard, instruction, process, feedback, etc
Supervisory training:
o Recording, process, behavioural studies, etc
Management training:
o Team building, strategic retreat, leadership, etc

Type of training/learning:

Off-the job (formal training):

o Internal courses, online training, distance learning, block release, day release, etc
Ob-the job
o Consideration
Assignment, tolerate mistake, non-complex
o Method used:
Demonstration, coaching, mentoring, job rotation, project work, committees, probation,
action learning, etc

For developmental activity to be deemed strategic organizations need to shift the focus
from a training to a learning approach. Discuss this proposition in the context of
development activity supporting individual and organizational change
Purpose of learning and development:
Employees require:
a Formal learning
b Self-development orientation
To engage in flexible, high performance organizations
Processes of learning:
c Learning as the formally designed process of staff development
d Development as a wide range of individual and collective activities for developing skills
and personal abilities
e Vocational (career) and educational training (VET) continues the development of
knowledge and skill for current and future work

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Strategic purpose of learning:
Defined in four ways:
f
Addressing skill gaps for individuals and organizations involving the development of
skills for new forms of work organization
g Using human resource development (HRD) as a catalyst for change
h Using HRD as a basis for competitive advantage in terms of the HRD content and the
way it is delivered
i
Creation of learning environment as a way of focusing individual learning needs
towards organizational learning objectives on a continuous basis
HRD in the context of organizational development:
An increased focus on organizational development in the quest for (to seek for) a highperformance culture
Organizational development is undertaken:
j
To achieve a flexible and creative organization
k To constantly seek to improve and reinvent the way it carries out its business, and
serves its customers
Organizational development is long term effort to improve the organizations visioning,
empowerment, learning and problem-solving processes
If HRD is strategic, it needs to be promoted and embraced at the top and be cascaded to every
part of the organization
The role of learning:
Central process in achieving an SHRM approach
Organizations want to improve performance, need to develop capacity to change
learning
is essential to capacity
The management of learning and of performance are closely associated because of some
important points:
The concept of learning organization
The practice of managing learning and overcoming barriers
The process of learning to meet requirements of integrated approach

Outline the main principles of HR planning

Organizations are increasingly focusing on HR planning for reasons:

Supply of skills to address strategic and demographic change

Need to focus more on demand and supply from an external and internal perspective
of the organization

Value of using scenario planning to model the fit with future business environment

HR planning needs to alter the way work is performed where securing the supply of some
skills is important.

HR planning is a basis for looking at achieving flexibility in the workforce to meet cost
requirements and to create environment, work and authority structures to encourage
retention of highly skilled employees

Stages of HR planning:

Reconciling future resourcing needs with future HR plans

Considering and applying HR policy so as to have an impact upon the flows of human
resources in an integrated way

Assessing the effectiveness of the HR policies in accessing, creating and using human
resource capability
HR planning process:

Investigation and analysis: gathering knowledge about:

The external environment and labor market

The internal environment and labor market (the age and gender balance of the
workforce, the number of employee)

The organizations systems, resources, culture

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Commercial performance requirements such as sales targets, product mix,

market segments and profits
Determination of demand: one of the key areas of forecasting in the short, medium
and long term
Determination of supply: determine supply of skills both internally and externally
Decision making: making plans to balance supply and demand of skills

Decisions are taken in areas:

Recruitment

Redundancy

Outsourcing

Development

Performance management
Professionalism in HR planning:

Vital for organizational success

The first aspect of professionalism is understanding the customer, the

customer requirements and providing customer satisfaction

HR is viewed as a service both to employees and to the business

Professionalism requires HR practices to be fair, open and transparent (in race,

disability, gender, religion, etc.)

Ensure equal opportunity regulations adhered to all levels

Policies and practices should cover recruitment, promotion,

remuneration, customer relations and the practices of suppliers and
partners

Procedures must ensure that managers do not limit the promotion prospects of particular groups or
minorities, or discriminate in the selection of new recruits

You have been asked to address a regional audience from a management institute on the
subject of Getting the most from your Human Resources function A cost effective value
added service for the 21st century. What would you recommend and how you go about
implementing this?
Human resource functions:

Recruitment, selection and staffing

Compensation and benefits

Employee training and development

Labor / employee relations

Some important trends in management of HR functions including the trend towards the audit
and measurement of personnel performance and the need to focus on core activities to reduce
costs. Recent trends in the management of HR functions are: auditing performance,
devolution, decentralization and outsourcing
In recruitment, strategic approaches are applied to get best results. Steps are used to attract
and select talents: broadening channels of recruitments, changing recruitment behavior and
changing recruitment measures.
Professionalism in recruitment has implications for cost effectiveness. HR departments make
the balance of the business case and professionalism for matters: recruiting quality staff,
objectivity and fairness and cost effectiveness and high retention
PMS provides important integrations in organization: integration of HR response to strategic
demand; integration of available skill, competence and attitudinal supply; integration of the HR
policy levers through setting and measuring objectives within PMS such as: productivity related

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objectives; job related objectives; person related objectives and the link to corporate
objectives
Reward strategies and systems can support the achievement of organizational objectives by
focusing employee behavior toward the following goals:

Performance orientated behavior

Assist recruitment and retention
Support an improvement culture
Assist with merging or organizations
Build commitment to organization and loyalty
Support structural change delayering / broad banding

HRD plays important role in assisting organization to achieve objectives through:

Addressing skill gaps for both individuals and organizations

Acting as a catolist for change
Providing a competitive advantage in terms of the content and delivery of HRD
Creating a learning climate as a way of focusing individual learning needs
towards organizational learning objectives

ER becomes useful tool in retention and motivation to employees in organization through

procedures and rules for protecting employees rights to show disagreement and getting
reasonable benefits
At a high-level, the role of HR in organizational development includes:

Aligning OD strategy with key corporate objectives

Promoting a high performance people management culture
Designing OD framework such as PMS and rewards system
Integrating OD into employee communications, HR development, team working
Building appropriate organization skills, competencies and capacity

What issues do organizations face in managing complex change? How can organizations
maximize the success of change management programs?
Organizations are increasingly focusing on creating a high-performance culture to compete
effectively in the knowledge-based and globalized business environments they operates in.
Creating such culture often involves a paradigm shift in organizational thinking, working
practices and in the behavior of people.
The extent to which organization understand how different people react to change, and design
multifaceted and flexible policies to deal with this is important in designing effective change strategies.
Not all employees rationally accept or indeed rationally resist. Understanding this complexity is the key
to successful change
Change is a complex process. Organizations need to try to make sense of change for
management and employees, so it is frequently programmed into a series of steps or stages
Three stages of change process for organizational development: determining the future state,
diagnosing the present state and managing the transition
Determining the future state (where do we want to be?): agree organizational purpose and
mission

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Diagnosing the present state (where are we now?): assess outer and inner context, gather
data, gain involvement
Managing the transition: targets for change, implement change and developmental activities,
evaluate and reinforce change

To maximize the success, organizations need to:

Follow seven steps of the OD process

Recognize factors for the facilitation of successful change management: top level commitment,
widespread acceptance of the need to change, early success well communicated, long term sustained
view, considerable pressure for change internal and external, accepted crisis, multiple methods of
change; multi-faceted approach, well-informed staff, clear change goals and clearly communicated
culture and competence, careful performance monitoring and use of HR policies to reinforce changes,
external facilitator to enable performance issues to be fully surfaced and evaluated, developmental
orientation and provision of employee support to cope with change

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How would you present the case for an organization to adopt a strategic approach to the
management of people? What would be the potential advantages and disadvantages that
an organization might face? Please use case illustrations to support your argument.
Strategic approach asks different questions and requires different levels in the diagnosis of
requirements (culture and behavior)
Not only the content of HR policies
Also the process of management, creating the right climate or culture through leadership style, and
at the way the organization influences how employees interact.
Three challenges facing organization in gaining the competitive advantage:

Managing intangible assets: the ability to access scarce skills and to cope with the
implications of new forms of organization

Managing strategic change: including trends towards flexibility in organizations and in job
design, break up of bureaucracies and of traditional structures of employment

Innovation in terms of what organizations produce by way of goods and services, and the
way to approach the task: development, innovation and creativity become core intangible
assets
A strategic approach to HRM involves new ways of operating in organizations and demands new skills.
These include the need to understand tacit knowledge, recognize core competence and attend to
stakeholder views, to ensure that all aspects of the organizational resources are engaged. (More detail
on page 5 and 6)
Approaches to the strategic management of people: the best practice view, the best fit view and the
resource-based approach
Potential advantages and disadvantages that an organization might face:

Best practice view:

Advantages:

Link to business performance

Common agreement on many issues by the CEO and HR manager

Breadth and size of new HR practices in line with SHRM

Disadvantages:

Perception of the effectiveness of those practices which emphasize skills of

implementation

A suggestion that best practices do not fit business strategy which is

worrying when linked to the relevance of people management at the top of
the organization

A problem of real strategic choices HR is driven by outside factors which

point us toward the next model of SHRM, the best fit view
Best fit view:

Advantages:

HR strategies flow from business strategy, thus these strategies could be

adapted to fit a wide range of business contexts

The presence of linked planning and policy formulation provides an

opportunity for HR departments to operate at the strategic level and
address the criticisms of their lack of strategic and business focus.

Disadvantages: the success of a best fit model depends on its ability to:

Integrate into the strategic plans of the organization

Provide horizontal or vertical integration of the key policy areas

Resource based approach

Advantanges:

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Look first at the organization and its potential, and develops ways to exploit or enhance the
available resources
It is the coordination of activities and integration of various skills, technologies and business
processes to provide competitive advantage
It allows the integration of the intangible aspects of work alongside other more visible areas
such as patents, trademarks and other intellectual property

Disadvantages:
Although this model recognizes many aspects of capability which can be formally defined in skill terms
and developed accordingly, the truly distinctive aspects are often hard to define and are formed
through informal processes of learning in the workplace. The challenge for SHRM is to define ways to
support the process of learning, knowledge and skill development alongside more formal practices
which do not confine or destroy bottom up learning.

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