INTEGRATING THE HR STRATEGY

Valentina Mihaela GHINEA

Academy of Economic Studies, Bucharest, Romania
valentina_ghinea@yahoo.com

Abstract : Successful companies are built on successful strategies which rely on successful creation and
implementation. Out of all the strategies that need to be put in place and arranged with the organizational
objectives and vision, the HR strategy is the most complex one, for the simple reason that it involves people,
those intelligent, talented and innovative assets which can bring that unbeatable competitive advantage that
the rivals are so afraid of.
Keywords: alignment, coherence, innovation, organizational culture, strategy

1. INTRODUCTION

Realized or not, the work-place generally has a major impact on people, on their life-professional as well as
personal. Somethimes, talking about life, about what happened in terms of career development and about personal
satisfaction, one has to rephrase even simple ideas. It could seem weird, but aparently not everyone is speaking the
same language. Some speaks the company’s language at office and at home as well - without being conscious or
able to separate anymore the principles applied at work from the ones applied in personal life. It is also the case of
the vocabulary used, understood by colleagues but not in the same manner by families and friends.
The organizational culture definitely leaves a mark on each individual. And, because the organizational culture is
made by everyting that is reinforced through various ways (including general strategy of a company and its HR
one), some can ask what about those persons that have already been working in a company for years? Can they still
correspond to the initial reason that they were hired for? Is there any place left where the personal beliefs and talents
of the individual can manifest or everything is filtered through company’s value, as it is necessary?
Sometimes happen than even the most successful company in the industry can fail to notice all the consequences
brought in by an organizational culture and a well defined strategy. If all the small pieces of a system are perfect, it
does not necessarily mean that the system as a whole is perfect, because those pieces must interact and complete
mutually in order for the system to function at its real potential. So that the present paper is designed to analyze
some effect of the organizational culture when designing and implementing a HR strategy.

2. THEORETICAL ASPECTS

It is said that the strategy is the direction and scope of an organization over the long term: which achieves
advantage for the organization though its configuration and resources within a challenging environment, to meet
the needs of market and to fulfill stakeholder expectations (Johnson and Scholes, 1998). Besides the very well
known Porter’s strategies, one can find other classifications as well (for example, low-cost strategy, differentiation
strategy, customer relationship strategy and network effect strategy) (***, 2006). Regardless which classification is
preferred, in order for a general strategy to achieve its desired outcomes, it needs to be integrated within all the
functional strategies and systems that compose the organization, including the HR’s. There is everytime an
interdependency relationship among the corporate strategy and HR functional strategy, such that whatever it is
requested on one side will definitely find a resolution on the other side.
Each general strategy has a certain effect on the way that human capital is perceived, more specific, on the HR
strategy. There is no best strategy; still there is everytime a strategy mostly fitted to the organizational goals and
vision. This must be backed by a coherent set of supportive practices and structure. More than that, the secret of the
competitive advantage achieved relies on the perfect vertical and horizontal integration of the HR strategy (vertical
integration – the HR strategy has to be aligned with the general strategy of the company, horizontal integration –
individual HR strategies should cohere by being linked to each other to provide mutual support) (Armstrong, M.,
2001). SHRM techniques, when properly practiced, are expressive of the goals and operating practices of the
enterprise overall. SHRM is also seen by many to have a key role in risk reduction within organizations (Towers,
D., 2006). Employees being individuals with varying goals and needs, the HR strategy can create an indestructible
competitive advantage, if properly chosen.
There are various ways to organize the HR department in order to meet the overall strategy and ease the
implementation of the chosen HR strategy. Taking into consideration all (dis)advantages of each structure, none can
be the best, but the most efficient serving the CO’s needs in the most productive way. Each structure has unique
features (strategic impact, use of technology, degree of centralization, implementation difficulty), therefore in order
to be effective CO must take into account its priorities, the type of business and the conditions in which it operates.
3. COMPANY’S OVERVIEW

The CO in case began as a small, family-operated business and has become a very appreciated one. It has always
been one step ahead of its competitors coming with innovative ideas which added value not only to customer’s lives
through superior products, but also to its employees through initiatives meant to increase the work satisfaction level.
CO’s purposes, values and principles go along with the CO’s manual applied to every employee in every part of the
world, providing clear and relevant expectation of conduct and tools for dealing with potentially delicate situations.
The CO believes that an engaged diverse work force represents a strong competitive advantage, so it acts towards
developing this advantage by fostering an inclusive culture: a) creating brands/products which improve the lives of
the world’s consumers (deep understanding of the diversity’s needs and aspirations); b) being among the best places
to work and leveraging diversity as an opportunity for gaining mastery (its people need to practice and passionately
believe in diversity and inclusion). The CO’s diversity refers to multiple categories of personal characteristics (race,
age, sex, educational background, geographical location). Combining these specifics with collaboration between
the employees can only lead to innovative and creative ideas which eventually can turn into surprising and
profitable solutions (not less than 140.000 employees all over the world, representing 140 nationalities, the average
age – 32, and an approximate equal distribution males - females: 57% vs. 43%).
The stated organizational culture is considered to be the Dionis type’s (Charles Handy typology): the CO treasures
the individual who is in the epicenter of all activities and considers that the organization has a purpose only if it
serves to accomplishing the interests of the people who are part of it. Depending on its contribution to the overall
performance and business results, it seems that the organizational culture is a positive one.
The recruitment/selection procedures are perceived as severe, but this is designed to ensure that only the most
capable and suitable persons, serving the best the profile required are selected (general criteria searched for hiring:
technical mastery, capability of building networks, of innovating continually and holistically, of envisioning,
anticipating gaps or improving system). The employees are considered a long term investment with a significant
return, so even if it is very difficult to enter into the organization, once an individual has become an employee, he
will definitely benefit of all the attention he needs in order to achieve excellence. In consequence: a) related to
recruiting - the CO is searching for the potential candidates in approximately 100 schools every year and it does not
take into consideration the criteria of graduation (CO’s population is composed of young students, young graduated
and persons with experience in different fields of activity); b) career development philosophy is to promote from
within (creates a strong culture of trust and shared experience); c) selection of the applicants is realized in several
stages (online application, perspicacity test and situational interviews, meant to identify the future intellectual assets
of the CO). Actually, the CO has been recognized as one of the most innovative COs in terms of hiring procedures.
No CO can assume the risk of educating people which do not correspond to its expectations, this CO more than the
others because none of its employees will be fired, regardless of the external factors that might influence CO’s
financial position. The CO is not offering a hob, but an opportunity to grow and to transform into one of the future
leaders. However there is one situation in which an individual would be required to leave the CO: whenever he does
not respect the fundamental principles and values deployed within the organization.
As a “build from within” organization, 95% of CO’s employees start at entry level and then progress throughout the
organization. The CO provides two different career opportunities: administrative jobs and managerial jobs. The
difference between the two career paths is made by the score obtained in a test which represents the second stage of
the recruitment process. The transition from an administrative career to a managerial is an unusual procedure.
The selection process and the evaluation one are linked by some common characteristics, the employees having to
prove that they possess some distinguishing capabilities in the moment they are hired, but they also must make
evidence of their evolution in the moment of the periodical evaluation.
From motivational perspective, the CO is offering a financial package composed of base salary and compensation
benefits (meal tickets, life insurance, medical insurance and a stock ownership reward whenever an individual has
achieved extraordinary results which drove to strategic results). CO tries also to motivate its employees through
organizational exposure and visibility of their results, a much appreciated image of an individual being that of a
professional, ethical, dependable, mature and take more calculated risks person.
From career development point of view, CO is offering a broad range of trainings dedicated to all the employees
willing to increase their overall knowledge in project management, negotiation skills, leadership or having a
personal–professional balanced relationship, but it also deploys specialized trainings focused on particular topics or
tasks (perceived as needs for closing some gaps identified in the evaluation process of the individual, due to some
poor results or feedback from peers and clients). The performance appraisal is based on the MBO method.
Taking into consideration the CO’s mission, objectives and all its great initiatives and breakthroughs in the
consumer’s market, it can be easily detected the corporate strategy of differentiation through innovation, in terms
of products for the customers and best place to work for the employees.
The CO’s stated intent is to develop its employees to their full potential so that it has developed a strong HR system
with main functions: recruitment of the most skilled individuals, their personal training/development with the view
to raise up to the organizational standards, the reward/recognition for their outstanding results, also the employees’
periodic evaluation in order to measure the extent to which their outcomes and plans meet the CO’s expectations.
All the previous mentioned things lead to the idea of a human capital management HR strategy (use of metrics to
guide an approach of managing people and regarding them as assets that could help at the competitive advantage
achievement, if strategic investments such as employee engagement & retention, talent management & learning /
development programs are made). The strategy is performed by a HR function belonging to a corporate function
pillar in charge with verifying whether the methodologies and strategies established at global level are applied in the
entire organization. Taking into account the CO’s size and strategic objectives, it is normal to have a complex HR
function (using centers of excellence and an e-HR tool based support, every business unit having an HR specialist at
country level which reports to the corporate level’s HR generalist in charge with regional regulation and legislation).

4. INNOVATION AND HUMAN CAPITAL SENIORITY

The concept of innovation is strongly connected to a certain level of performance, improving the productivity and
the efficiency, increasing the quality and most of all increasing the competiveness; so that, in order to sustain a
differentiation strategy, the CO must benefit at maximum level of its human capital because, besides the
technological development, the successful key to innovation is ensured by the human factor and his performance.
As seen, the selection is actually built on the success drivers that the CO promotes so that only if the candidate
corresponds to the stereotype that falls within these success drivers, he will receive a job offer (this type of
behaviour/personality has already been tested with the existent employees). Unfortunately that could lead to some
other stereotypes: standardization of information deployed within the organization, standardization of the necessary
competences, attitudes, behaviors and level of knowledge. Practically the level of standardization could overwrite
the one of innovation. The more standardized an individual is in terms of information, knowledge, vocabulary and
attitude, the smaller is the chance for that individual to breakthrough with new and creative ideas. The risk involved
by this standardization is to replace a very innovative person with a business expert.
In order to understand what is the risk for decreasing creativity level by standardizing employees, an empirical
analysis was performed on a sample of 60 individuals from
management / leadership teams, working in Marketing,
Purchasing, IDS (Implementation of Development Solutions) and
Research&Development (these departments contribute the most to
the corporate strategy of differentiation) - 15 people out of each of
the four departments, with 3-4 years seniority in the CO.
The analysis comprised 20 sentences with particular emphasis on
the creativity and innovation dimension. Each question was
marked on a scale from 1 to 5 and the persons interviewed were
requested to provide a single score for every single sentence
(Carter, P., 2005). Taking into consideration the individual type
Fig.1 Innovation test results per depts. supposed to work in CO, the results of the analysis should have
revealed a very high level of creativity. A maximum score of 5 for more than 16 questions (a total score greater than
90) would indicate that the people interviewed have probably tried out many different pursuits during their lifetime
and they would continue to do so in the next coming years, as they are not afraid to try something new.
The results of the test actually revealed an average score of 75 points for the entire sample which falls on the median
of creativity level. Out of the 60 individuals interviewed, 12 of them had an average score of 90, 40 had an average
score of 86 while the other 8 had an average score of 55. The explanation for the results falling into the category 65-
89 points indicated an average level of innovation and creativity. Although the individuals might exhibit innovation
tendencies, a score at the lower end of this range suggests that it is possible that the individuals have neither the time
nor the confidence to try out new creative pursuits (solution could be developing more confidence and being more
relaxed about taking intellectual risks). A score within the higher range of this group suggests some degree of
creativity, and the possibility to take advantage of underdeveloped talents waiting to be cultivated. Generally, any
score within the range of 65-89 points does suggest that the employees are in the fortunate position of being able to
balance their creative tendencies with logical and analytically formed judgments in order to turn many of their ideas
into a single, realistic, and workable concept.
According to the test results, the 8 individuals with an average score of 55 prove a decreased level of creativity and
innovation. They might possess a rich variety of ideas and thoughts, but they feel more comfortable to be guided by
a set of principles and traditional conventions (possible potential of creativity, not explored yet).
However creativity and intellectual are two separate brain functions, it is not entirely possible to be highly
intellectual in some fields and not a little bit creative, and vice versa. It is possible to be trained to make use of latent
creative talents. So not surprisenly, almost all the individuals that obtained the maximum score are working for
R&D department, as well as for IDS, while the individuals who obtained the minimum score are from Purchasing
Department (figure 1). However, the results on which the CO should focus on belong to Marketing (thought the
most experienced in the CO, this department being the first one created here, people seem to exploit their talent).
The average seniority of the persons who took part in the test is of 3-4 years, reflecting that the employees had time
to adhere to the company’s purposes, principles, values and attitudes. However those that obtained the highest score
joined the company 1 year ago, while the lowest score owners joined the company around 5-6 years before. The
main issue that arises from this is the standardization of human capital, as the seniority of individuals within the CO
grows. In the moment of being recruited, a new hire shares with the organization only the common success drivers
based on which the selection is done and that individual will experience a personal development. The danger here is
that he might lose his identity as single individual, diluting his personality and character (what actually CO bought)
and replacing them with thoughts and ideas promoted by the organizational culture. It is not that the people are
“brainwashed”, it’s just the fingerprint of such a strong organizational culture that diminishes the personal ideas.
In order to understand the impact of the seniority on the innovation level, a similar empirical analysis was performed
on a similar sample of 60 individuals working in the same departments, but who have joined the CO less than 1 year
before. The results were completely different from the one previously obtained. Out of the sample of 60 new hires,
43 obtained more than 90 points, 13 were ranged between 65 and 89 points and 4 were below 65 points. The overall
results for this sample fall in the category of high level of innovation and creativity (new hires did not have the time
to completely assimilate the set of values deployed by the organization and they did not experience their first
performance appraisal). CO’s employees do follow the same pattern in the moment of recruitment: they are all
talented, innovative and potential leaders, but somehow, during their personal development within the CO, tending
to follow the same guidelines, they lose their originality and become risk adverse. It’s not that those people will not
deliver the results, it’s not that CO’s products will not be anymore appreciated by consumers, it is the fact that the
individuals might lose their potential, just because of the commodity of associating with values and typologies world
wide agreed and recognized. A diversity coming from numerous nationalities, religions and cultures will not ensure
a stable high innovation level (craziest and inventive ideas, thoughts or dreams that the more challenging they are,
the greatest is the chance for not falling within the jeopardize of standardization).
Objectively seeing the case, it is not the Dionis organizational culture type, but the Athens’s (concentrated on task
fulfilment and trying to bring together adequate resources and right people in the right place, giving them a certain
degree of liberty in adopting decisions and the strict orientation towards the proper realization of projects).

5. CONCLUSION

The CO in case is a very successful one, with a proundly stated differentiation general strategy based on innovation,
a complex HR function and a stimulating human capital management HR strategy. Referring to the last one, at the
first glance, this seems perfectly coherent and aligned, backing the general strategy the CO. However, time can
induce unforeseen consequences even in a company with a perfect defined and implemented strategy, mostly
because of the synergy and systems dynamics (for example, the organizational culture’s).
Studying attentively the situation in case, one can observe that the effect of the HR strategy is more similar to the
one of the employee resourcing HR strategy (concerned with ensuring that the organization obtains and retains the
people it needs and employs them efficiently), instead of human capital management HR strategy. The tones of
procedures and the fact that no employee is fired unless he does not respect the fundamental principles and values
deployed within the organization, could make one believes that, more exactly, this is the case of selecting
motivation – employees resourcing HR strategy: recruitment&selection process allows only motivational fitted
people inside.
On the one hand, seeking to hire creative people using a stereotyped recruitment/selection process (new hires only at
entry level and only if corresponding to the stereotype that falls within the success drivers), cannot be the key for
obtaining very innovative spirit. The CO will be provided only accidentally with more than one kind of creativity.
On the other hand, the organizational culture is what is reinforced so that people behave in a certain manner because
some types of behaviour/thinking model are productive, and some are not. This selective model of strengthening, if
not perfectly adequate, kills in time each individual’s creativity. Hiring only at entry level will provide the CO with
creative people at the beginning of their professional life: either easy to be proceeded, so standardized in time, either
difficult to be integrated by a very procedural organizational culture, so they will perceive the reality through the
glass of cognitive dissonance and eventually will choose to leave the vessel.
More than that, hiring only at entry level and doing it for a long employment period (in order to gain experience),
sustaining a low fluctuation of personnel, promoting only from within, not allowing to change the career path from
administrative to managerial job or viceversa, in-house developing talents on very specialised jobs (making rather
than buying talents), are some HR implications of the low-cost leadership strategy. That proves a not coherent HR
strategy and its misalignment to the general strategy of the CO.
It sounds dangerous. Still that does not mean that the CO will fail, and neither will ensure its long run success on the
market. That means only that the CO tailored its strategies and their alignment taking into consideration its
priorities, its type of business and the conditions in which it operates. Summing up, there is no generally valid recipe
for all situations.

BIBLIOGRAPHY:

 Armstrong, M. (2001): A handbook of human resources management practice, Kogan Page, London
▪ Carter P. (2005): The Complete Book of Intelligence Tests, Wiley, West Sussex
▪ Johnson G., Scholes K. (1998): Exploring Corporate Strategy, Prentice Hall Europe
▪ Towers, D. (2006): Human Resource Management essays, Birmingham Business School
▪ *** (2006): The Essentials of Strategy , Harvard Business School Press