Strategic Management

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Approaches to the strategic management
of people
There are a number of models of SHRM and in this unit we will look at three:
• The best practice view.
• The best fit view.
• The resource­based approach.
The best practice view
This view starts from the premise that a single set or ‘bundle’ of HR policies and practices will lead to better organisational performance, sustained over a lengthy period, whatever the prevailing business circumstances.

What are these so­called best practices? Various ‘bundles’ have been suggested in research studies (Huselid, 1995; Becker & Gerhart, 1996), and we would like you to consider one example, the list of eighteen key practices referred to in the next activity.

CASE STUDY
Read the following article which represents a contemporary view of the best practice model.
Piece by Piece
by David Guest and Angela Baron, (People Management 20 July 2000) Evidence showing that it pays to pursue progressive people management practices continues to mount. After US research findings to this effect came convincing UK evidence of the link, provided by a University of Sheffield study of manufacturing companies.

Now, management perceptions of this link are being confirmed by initial evidence emerging from the first phase of research being carried out for the CIPD at Birkbeck College, London. The programme is exploring HR management, workplace reorganisation and performance as part of the ESRC’s Future of Work programme. It has the advantages of being based on a large cross-section of companies of varying sizes in the UK, and of presenting the views of both the chief executives and those responsible for HR. The Birkbeck research comprises three phases. The first, a survey of 462 chief executives and 610 managers responsible for HR in private-sector 13

Strategic Management of Human Resources
Unit 1 – Definition and Purpose of SHRM
University of
Sunderland
organisations, aimed to obtain information about HR practices and business strategy. This part of the research, which has been completed and is described in this feature, obtained matched information from both the chief executive and the manager responsible for HR in 237 organisations.

The second phase will link this information to the financial performance of the firms. Its results are expected at this year’s CIPD national conference. The third phase will consist of case studies looking at the jobs of the future and exploring how people management practices influence performance in the financial and pharmaceuticals sectors.

In the initial survey of HR managers, we identified 18 key practices that were similar to those described by US academic Jeffrey Pfeffer and often associated with “high-performance” or “high-commitment” HRM (see below). The 18 Key practices

Realistic job previews;
Use of psychometric tests for selection;
Well-developed induction training;
Provision of extensive training for experienced employees;
Regular appraisals;
Regular feedback on performance from many sources;
Individual performance-related pay;
Profit-related bonuses;
Flexible job descriptions;
Multi-skilling;
Presence of work-improvement teams;
Presence of problem solving groups;
Information provided on firm’s business plan;
Information provided on the firm’s performance targets;
No compulsory redundancies;
Avoidance of voluntary redundancies;
Commitment to single status;
Harmonised holiday entitlement.
The main findings
Chief executives are waking up to the importance of good people management.
Most chief executives acknowledge that there is a link between HR practices and business performance.
But, despite asserting that people are their greatest asset, most businesses still fail to prioritise employee issues.
Only 10 per cent of chief executives agree that people are top priority ahead of finance or marketing.
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Unit 1 – Definition and Purpose of SHRM...
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