MGMT3724 Lecture Week 1

Strategic Human Resource

Management : Introduction

Content

Course details summary

What is SHRM?
Historical development of SHRM
Different models of SHRM
Aims of SHRM
Debates/reservations about SHRM
SHRM in wider social context

Key Course Details

LIC Contact: Michael Quinlan

Room 557 Business School

Phone 93857149
Email: m.quinlan@unsw.edu.au

Assessment

Class Test (40%)

Project Presentation by Individuals (20%)
Group Project Report (40%)

What is strategic HRM?

Traditional HRM or personnel management is reactive,
instrumental, and mostly concerned with administration
and implementation of policies and procedures

Conducting job analyses

Selecting job candidates
Providing incentives and benefits
Training and developing staff
OHS and workers compensation
Administering leave and worker discpline

In contrast, SHRM is more than a set of practices. It is

proactive, meshed with an organisations business
strategy and entails long term goal-based planning and
monitoring

Some definitions of SHRM

Salaman, Storey, & Billsberry (2005: p. 4) define SHRM as:
A distinctive approach to employment management
which seeks to achieve competitive advantage through
strategic deployment of a highly committed and capable
workforce using an array of cultural, structural, and
personnel techniques
It has a diverse range of theories, models and practices
SHRM ensuring that human resource management is
integrated into strategic planningHRM practices are
accepted and used by line managers as part of their
everyday work
Macro organisational approach to viewing the role and
function of HR (Wright & McMahan, 1992)

Some distinguishing
elements of SHRM
strategic focus informing decisions about
people management
Reliance upon a set of levers to shape the
employment relationship e.g., HR practices
focus on achieving fit with strategy and
other environmental factors (e.g., culture)
1. Vertical fit = congruence of the HR system
with other organisational systems (e.g. strategy)
2. Horizontal fit = HRM practices congruent with
each other

Historical development of
SHRM
1917-18: First formal personnel department created to
deal with issues such as a tight labour market, high
turnover, waste and inefficiency, etc (link to WW1 & rise of
scientific management
1920s: HR begins to be used to win worker cooperation
1930-50s: Human relations school of thought begins to
emerge, which recognises that there are psychological
and social influences on job satisfaction, etc. Initial focus
is on teams (e.g., Hawthorne studies)
1960s: Work design discussed as key to increasing worker
motivation, small group design to enhance worker effort,
group work provides opportunities for self actualisation

Historical development of
SHRM cont.
1970s: Quality of work life techniques are popular, which focus
on the value of employee involvement. Personnel management
is increasingly discussed as HR
1980s customer focus business strategies, renewed union
avoidance strategies, labour market flexibility & decline in
collectivist IR coincides with rise of HRM
1990s-present: High performance work systems, high
commitment work practices, SHRM are increasingly discussed
First explicit statements of the SHRM concept was made by
Fombrun, Tichy, & Devanna (1984)
The matching model of HRM (or the Michigan Model):
HR systems and organisational structure should be managed in a
way that is congruent with the organisations strategy hence, the
matching model

The Matching Model

Discussed the human resource cycle which
consists of four generic processes that are
performed in all organisations

1.Selection matching available human resources to jobs

2.Appraisal performance management
3.Rewards short-and long-rewards must be in place
4.Development training activities

Hard approach to SHRM is often attributed to this

model. Emphasises the role of managers - focused on idea
that people should be obtained cheaply, used sparingly,
and developed and used to their maximum capacity.
Attempts to enhance the efficiency of individuals

The Harvard Framework

Soft model of HRM (Beer et al., 1984)
Without a central philosophy or a strategic vision
HRM is likely to remain a set of independent
activities, each guided by its own practice tradition
Called for a broader, more comprehensive strategic
approach with regard to the organisations human
resources
HRM has two characteristic features
Line managers accept more responsibility for ensuring the
alignment of competitive strategy and personnel policies
Personnel has the mission of setting policies that are
mutually reinforcing and, therefore, add value.

Advantages of Harvard
Model and Warwick Model
revisions
1. Recognises stakeholder
interests

2. Recognises trade-offs between the interests of

owners and those of employees
3. Widens HRM to include employee influence, the
organisation of work, and the related question of
leadership style
4. Acknowledges a broad range of contextual influences
5. Emphasises strategic choice it is not driven by
situational or environmental determinism (Boxall, 1992).
The Warwick Model Hendry and Pettigrew (1990) adapted
the Harvard Model. Characterised by a greater emphasis
on aligning HR with business strategy

Aims of SHRM
Overall aim of SHRM is to ensure that the organisation is
able to achieve success through its people. Specific
objectives
1.Organisational effectiveness-support effectiveness by developing
practices and processes in areas such as knowledge management and
generally creating a great place to work
2.Human capital represents the combined intelligence, skills and
expertise that gives an organisation its distinctive character. SHRM
aims to ensure that the organisation obtains and retains the skilled,
committed, and well-motivated workforce it needs.
3.Knowledge Management process or practice of creating, acquiring,
capturing, sharing, and using knowledge, wherever it resides to
enhance learning and performance in organisations (Scarborough et
al., 1999). SHRM aims to support the development of firm-specific
knowledge and skills that result in organisational learning processes

Aims of SHRM cont.

4. Reward Management SHRM aims to enhance
motivation, job engagement, and commitment by
introducing policies and procedures that ensure people
are valued and rewarded for what they do and achieve,
and the level of skills and competence they achieve.
5. Employee relations the aim is to create a climate in
which productive and harmonious relationships can be
maintained.
6. Meet diverse needs SHRM aims to develop and
implement policies that balance and adapt to the needs
of its stakeholders and provide for the management of a
diverse workforce.

Some debates/reservations
about SHRM
Often lacks key elements of theory that is,
variables and hypotheses are often not made
explicit
Outcomes are often unrealistically high
Gap between talking about SHRM and what is done
in practice -SHRM requires major effort, outsourcing
HR)
Internal contradictions (eg commitment & fliexbility?
Lean v innovation?)
Criticism that SHRM is manipulative i.e., developing
commitment to achieve control. Is it manipulation?

Wider debates over SHRM

Individualism versus collectivism
Influence of psychology on theory/practice
(Godard)
Organisational focus & community/ethics
Should labour be viewed as a commodity (ILO
1944)