Strategic Human Resource Management: to fly or to soar
Human resources management is a function in the organisation that maximises the productivity and effectiveness of the employees through set of policies and procedures. Strategic Human resources management (SHRM) on the other hand is concerned with the introduction of the business strategy into the wider organisation to achieve a value added advantage through long term strategic view.
SHRM was defined by Storey as: ‘A distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of highly committed and capable workforce using an array of cultural, structural and personnel techniques.’ (Storey, 2001, p. 6)
In this report we shall review how applying the configurational approach of SHRM to the business ensures the agility of the organisation by enhancing the values of the all important three core fronts namely economical, customer and people added value to the organisation, and reviewing the drawbacks of the SHRM addressing the gap between the SHRM and performance. Then reviewing how competitors utilising the approach to achieve competitive advantage.
SHRM is a valuable tool when implemented in the organisation correctly. As the literature shows, the different approaches to the SHRM stemming from the basic reasoning; that is, the need for a high-performance culture in the organisation that would generate a distinct sustainable competitive advantage.
There are numerous empirical research papers that support the notion that there is a clear measurable link between an organisation strategic human resource management and its performance. One example of such can be found in the work of Huselid. In his works Huselid states that ‘ a one standard deviation increase in High Performance Work Practices yield a $27,044 increase in sales and a $3,813 increase in profits’ Huselid (1995: 648). This is a significant piece of work as it demonstrate and quantify a direct link between the SHRM and performance Now, in order to achieve such a valuable link between SHRM and performance, we shall consider the configurational approach of the best-fit model as vehicle thereto.
The configurational model approach of the SHRM focuses on the relation between the dependent variables and the uniquely configured independent variable with the aim on developing a fusion between both business strategy and HR strategy. The followers of this model argue that since organisations face continuous external environmental changes, the need to develop a new set of strategies is key. A quality-focused strategy for example can be infused with elements of cost-cutting and innovative strategic elements. The Tech Group Europe (an injection moulding, medical devices company) for example has introduced redundancies to employees last year, in order to save cost on one hand, however a few months later has introduced new incentive schemes and embarked on hiring new employees. This is representative of the daily reality of the changing business environment. So to compensate and ensure the agility of the organisation to cope, a bundle of HR practices and policies need to be implemented to secure the much needed flexibility if the organisation is to survive; ‘ The logic in favour of bundling is straightforward… Since employee performance is a function of both ability and motivation, it makes sense to have practices aimed at enhancing both.’ Dyer and Reeves (1995: 656-7)
David Ulrich maintains that, the structure should always follow the strategy rather than control it; hence a single HR model is not favourable. He argues that the HR in the organisation should take one of three forms: Functional organisation model
Shared service organisation model
Embedded HR model
In order for this model (the configurational model, or any other SHRM model for that matter) to be effective, it has to be delivered in such a manner that ensures...
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