Session 2 SHRM: models and

concepts

What is HRM?
The term personnel management [describes] the policies,
processes and procedures involved in the management of
people in work organisations..primarily concerned with
employment regulation the ways in which people are
selected, appraised, trained, paid, disciplined (Sisson, 1989)
The main dimensions of HRM [involve] the goal of integration
[with business strategy and between HR policies], the goal of
employee commitment, the goal of flexibility, the goal of
quality
(Guest, 1987)

Defining Human Resource

Management
Generic

approach:

Performs personnel management activities

Distinctive

approach:

Carries out people-oriented organisational

activities.

The human factor

Managing people is an impossibility (Watson,
2001)
When people go to work their intentions are to
use the organisation for their own ends as
the organisation is concerned to use them
Negotiated Order and Contested Terrains
(Edwards, 1983; Silverman, 1970)
4

The human factor (2)

[PM] is concerned with assisting [senior management]
to meet their purposes by obtaining the work effort of
humans, exploitation of those efforts and dispensing
with them when they are no longer required.
Concern may be shown with welfare, justice or
satisfaction, but only insofar as this is necessary for
controlling interests to be met and always at least
cost. (Watson, 1986)

The human factor (3)

SHRM is the means of aligning the management of
human resources with the strategy of the business
(Walker, 1992)

SHRM aims to provide a sense of direction in an

often turbulent environment so that organisational
needs can be translated into coherent and practical
policies (Armstrong and Long, The Reality of Strategic HRM, 1994)

Aligning the Organizational Strategy

with HRM / HRD strategy
Defining
Defining human
human resource
resource issues
issues

Developing
Developing human
human resource
resource strategies
strategies

Aligning
Aligning employee
employee expectations
expectations with
with strategy
strategy

Designing
Designing the
the
organisation
organisation
Defining
Defining
staffing
staffing
needs
needs

Sharing
Sharing success
success
Managing the
HR function

Enabling
Enabling and
and
evaluating
evaluating performance
performance
Developing
Developing
effective
effective
managers
managers

Strategic
Strategic
staffing
staffing
Developing
Developing
capabilities
capabilities

Source: Walker, 1992, p. 12

Managing organisations strategically

Strategies are patterns that emerge over time (planned
and unplanned) to allow the organisation to carry on
into the future (Quinn, 1980; Mintzberg, 1994)
The application of over-rationale, linear programmes of
HRM as a means of securing competitive success is
shown to be at odds with experience in the UK and
elsewhere (Whipp, 1992:33)
In short, integrating human resourcing with broader
strategies is highly complex

Managing HR strategically
Leopold, et al (2005:21) suggest that
strategic human resourcing must involve the
establishing of clear principles about how
people are to be treated and the shaping of
practices that implement these values and
principles.

Generic term: HRM objectives

10

Organisation: Job design and role building

Resourcing: HR planning, R & S
Performance management: agreed objectives and
employment assessment
HRD: Training and Development
Reward management: pay and other benefits
Employee Relations: communication, industrial
relations, employee involvement and participation.

HRM roles and objectives

performance
Change
mgt

staffing

Line mgrs

admin
HRM

Consultants
advisers
Subcontractors

11

HR
Generalists
HR
Specialists

Models of the HR Function

How should HR be organised as a function to be most

effective?

Karen Legge (1978) identified 3 types of personnel

practitioners:
Conformist innovator helps the organisation
achieve its objectives through cost saving,
increasing productivity and reducing conflict.
Deviant innovator stands outside the conventional
organisation aims. Independent, innovative,
challenging. Modern examples may be proposals on
work-life balance, engagement, knowledge
management.
Problem solver conventional role providing day to
day assistance to line managers.

Personnel vs. HRM (Guest, 1987)

13

Personnel Mgt

HRM

Time and planning

perspective

Short term, reactive, ad hoc

marginal

Long term, proactive,

strategic, integrated

Psychological contract

Compliance

Commitment

Control systems

External controls

Self- control

Employee relations
perceptive

Pluralist, collective, low trust

Unitarist, individual, high

trust

Preferred
structures/systems

Bureaucratic/mechanistic,
centralised, formal defined
roles

Organic. Devolved, flexible

roles

Roles

Specialist/professional

Largely integrated into line

mgt

Evaluation criteria

Cost minimisation

Maxi utilisation (human

asset accounting)

HRM Roles (Storey, 1992)

Strategic

Change
Maker

Advisor

Intervention

Non-Intervention

Facilitator
(handmaiden)

Regulator
Tactical

14

HRM vs. Personnel Management

More

strategic
Integrated
Managerial
Unitarist
Individualistic
Aimed at achieving organisational goals and
maximising competitive advantage
15

The Development of Personnel / HRM

Key

environmental developments

Internal developments
Social system
Technical system

External developments
Economic globalisation
Technological development

The social reformer mid 19C Robert Owen exploitation - managers

The acolyte of benevolence Welfare Officer Cadbury commitment
The humane bureaucrat Scientific mgt maximise efficiencies Personnel
The consensus negotiator - +WW2 expertise TU collectives
Organisation man late 60s integration with mgt
Manpower analyst 80s manpower planning
HRM 84 / Asset Mgt 2000+

HRM Strategy development

1. Separation Model
Torrington, et al (2005) point to 5 ways in which the
relationship between business strategy and HRM
strategy is played out:
1. Separation model: no relationship
Organisational
Strategy

17

No relationship

HR
Strategy

HRM Strategy development

2. Best Fit (Contingency) Model
Growing recognition of the importance of people in
the achievement of organisational strategy.
(Unitarist) E.g., Fombrum, et al, (1984) [slides 17
& 18]; Schuler & Jackson (1987)

Organisational
Strategy

18

HR
Strategy

External Fit (Vertical Integration)

(HR policies support business strategy)
Political
Forces

Economic
Forces

Cultural
Forces

Mission and
Strategy
Organisation
Structure

19

HRM

The Michigan HR resource cycle

Rewards
for
performance

Effective
selection

Employee
performance

Appraisal

Training
and
development

Internal Fit (Horizontal Integration)

(HR policies are consistent with each other)
Rewards

Selection

Performance

Appraisal

Training

21

HRM Strategy development

3. Dialogue Model
This requires the need for two-way
communication and some debate. Thus,
feasibility of the chosen strategy choice and
alternative possibilities are analysed (pluralist)

Organisational
Strategy

22

HR
Strategy

HRM Strategy development

4. Holistic Model
People in the organisation are the key to competitive advantage.
HR Strategy is not just the means for achieving organisational
Strategy (the ends), but an end in itself. HR strategy becomes
critical. Baird et al, (1983) there can be no strategy without HR
strategy. Boxall (1996) develops this idea in relation to the
resource based form, Where mutual development of strategies
is key.
Organisational HR
Strategy Strategy

23

HRM Strategy development

5. HR driven Model
If people are the key to competitive advantage, then we need to
build on our people strengths. Here, if the potential of an
organisation's people affects the achievement of any planned
Strategy, it would be sensible to take account of this
When developing the strategic direction. Butler (1988/89), a shift
from human resources as the implementors of strategy to the
drivers of strategy (resource based)
Organisational
Strategy

24

HR
Strategy

3 Theoretical Perspectives

25

1.

There is one best way (Universalist approach) of managing

human resources in order to improve business performance

2.

There is a need to align (fit) employment policies / practices

with the requirements of business strategy in order that the
latter will be achieved. Thus, different HR strategies needed
for different business strategies

3.

Resource Based View focus on the quality of human

resources available to the organisation and their ability to
learn and adapt more quickly than their competitors

Universalist approach
(Guest 1989)
Strategic integration: ensuring HRM is fully integrated into
strategic planning and that line managers use HRM
practices

26

Commitment: ensuring employees feel bound to the

organisation and are committed to high performance
via their behaviour

Flexibility: ensuring an adaptable organisation

structure, and functional flexibility based on
multiskilling

Universalist approach
(Guest 1989) (2)

Quality: ensuring a high quality of goods and services

through high-quality, flexible employees

One model of labour management a high-commitment

model is related to high organisational performance, in all
contexts, irrespective of the particular competitive strategy
of the organisation
Is this too prescriptive / are goals attainable (Purcell, 1991) /
what of internal tensions (Ogbanna & Whipp, 1999)

27

The Harvard model of HRM

Stakeholder
interests
HRM policy
choices
Situational
factors

HR
outcomes

Long term
consequences

Harvard Model of HRM (Beer et al.

1984)
Stakeholder interests
Shareholders
Management
Employee groups
Government
Community
Unions

HR outcomes
Commitment

Employee
influence

Competence

Cost effectiveness

Workforce characteristic

Human resource
flow

Business strategy & conditions

Rewards systems

Management philosophy

Work systems

Situational factors

Labour market
Unions

29

HR policy
choices

Task technology
Laws and societal values

Congruence

Long term
consequences
Individual well
being
Organisational
effectiveness
Societal well
being

Best Fit: SHRM

Fit

or contingency approach (Fombrun et al.

1984)

30

External or vertical fit: HR policies support

business strategy

Internal or horizontal fit: HR policies are

consistent with each other

Resource-Based Approach
(Boxall, 1996)
Concerned with the relationships between internal resources
(human resources are only one), strategy and firm
performance. The focus is not just on the behaviour of human
resources (fit approach), but on the skills, knowledge, attitudes
and competencies which underpin this
Briggs & Keogh (1999): business excellence is not just about best
practice or leapfrogging the competition, but about the
intellectual capital and business intelligence to anticipate the
future, today.

31

Resource-Based Approach
(Barney, 1991)
States that in order for a resource to result in sustained
competitive advantage it must meet four criteria:
1.
2.
3.
4.

32

Valuable matching competencies with needs of the firm

Rarity cognitive ability
Inimitable history and difficulty of duplication (culture)
Non-substitutable over time may become unique and
transferable across other products

Resource-Based Approach
(Wright, et al (1994)

Business
Strategy

External
Forces
HRM Strategy
& Practices

Employee
Skills,
Abilities

33

Employee
Behaviour

Business
Performance
(Sustained CA)

Problems matching HR to
business strategy (Armstrong & Long)
Evolutionary

nature of business strategy

The absence of a clear business strategy
The qualitative nature of HR issues

such as commitment, motivation

National

34

Legal requirements
override any strategic requirements

Possible links between HRM and business

performance

HR effectiveness
Business
strategy
HR
practices

HR
outcomes

Quality of goods
and services

Financial
performance

HR
strategy
Productivity
Adapted from Guest et al (2003)

Role of HR

Organisational Performance
The Rational (Hard)

Emotional balance (Soft)

Corporate strategy

Results (Performance)

Successful HRM prescriptions

6 key requirements for HR departments to add value
and ensure organisational survival (Rucci 1997) :

Create

change eliminating unnecessary rules and encouraging

flexibility and risk-taking
Develop principled leaders courage and ethics
Promote economic literacy and big picture thinking amongst
managers
Centre on the customer external customer centred activity in
performance reviews, promotion criteria and reward decisions
Maximise service/minimise staff to internal customers at
minimum cost
Steward the values not just values police but embedding
values in R&S, training, performance management and reward.
See case study AEHN p71 Kew & Stredwick

References

39

Armstrong, M (2001) A Handbook of Human Resource Practice, 7th Edition, Kogan Page, Chapters 3 &19
Beardwell, I. & Holden, L. (2001) HRM: A Contemporary Approach (3rd edn) Harlow, FT/Prentice Hall Chs
1&2
Boxall, P. and Purcell, J. (2008) Strategy and HRM cited in Kew, J. and Stredwick, J. (2010, 4) Human
Resource Management in a Business Context. London, CIPD
Collins, J. C. & Porras, J. I. (1998) Built to Last, London: Century Ltd
Guest, D., J. Michie, N. Conway and M. Sheehan (2003) 'Human resource management and corporate
performance in the UK', British Journal of Industrial Relations, 41, 2, June. p. 291-304.
Higgs, M,. & Dulewicz, V. (2002) Making Sense of Emotional Intelligence, ASE, Granada Learning Ltd
Kew, J., and Stredwick, J., (2010) Human Resource Management in a Business Context, London, CIPD
Mintzberg, H. (1998) The Structuring of Organisations in Mintzberg, H., Quin, J.B. and Ghoshal, S., The
Strategy Process. Hemel Hempstead, Prentice Hall Europe.
Torrington, D, Hall, L and Taylor, S (2005) Human Resource Management, 6th edition, Prentice Hall,
Chapters 1&2
Walton J, (1999), Strategic Human Resource Development, 1st edition, Pearson Education, Chapter 5
Watson J, Harris L, Leopold J, (2005), The Strategic Management of Human Resources, 1st edition, FT
Prentice Hall, Chapter 1