Topic 1 Introducing HRM part 3

Transcription

1 Topic 1 Introducing HRM part 3 Theoretical basis of HRM The matching model of HRM (Fombrun, Tichy and Devanna, 1984) or Michigan model of HRM proposed that an important source of competitive advantage lay in the alignment of HR strategy, employee management activities and corporate strategy The Harvard model recognised the influence that various stakeholders have on the development of HR policies (Beer et al. 1984) The model suggested that effective implementation of HR policies had a number of long-term consequences, one of which was organisational effectiveness Theoretical basis of HRM cont d David Guest (Guest, 1989) in the UK built upon this model to develop a theory of HRM founded on four key policy propositions that he proposed, if followed, will combine to increase organisational effectiveness - Strategic integration - High Commitment - Flexibility - High Quality 1

2 Strategic Human Resource Management (SHRM) The integration between HRM and business strategy is believed to contribute to the effective management of human resources, to an improvement in organisational performance and finally to the success of a particular business When referring to SHRM we are referring to the linkage between human resource management policies and practices and the strategic objectives of the organisation In differentiating between SHRM and HRM we see that SHRM takes a macro level approach within the context of organisational performance, whereas HRM operates at the micro level SHRM Perspectives: Contingency Proponents of this view believe there is no universal answer to the choice of HRM polices and practices the choice is contingent on the context of the organisation and its business strategy (external fit) Each organisation can choose a different set of polices and practices, depending on their organisational specific context and strategy SHRM Perspectives: Contingency The adoption of a contingency HRM strategy is then associated with optimised organisational performance, where the effectiveness of individual HR practices is contingent on firm specific strategy The most effective way to manage people will depend on issues specific to the organisation, such as industry sector, organisational size and economic conditions - Best-fit approach 2

3 SHRM Perspectives: Universalism Focuses on the existence of one set of HRM best practices aimed at creating and enhancing high levels of employee commitment and performance These will result in superior levels of organisational performance, regardless of the context in which the organisation operates and the competitive strategy of the firm SHRM Perspectives: Universalism Pfeffer s (1998) work identified seven practices which result in higher performance - Recruiting the right people - High wages clearly linked to organisational performance - Employment security - Information sharing - Investment in training and skill development - Self managed teams and decentralised decision making - Reduced status differentials SHRM Perspectives: Configurations In the configurational or bundling approach the distinction between best practice and contingency models begins to blur (Becker & Gerhart 1996:788) The view is that effective combinations, or arrangements of HR practices will work by supporting and complementing each other (Huselid & Becker, 1995; Delery & Doty, 1996) MacDuffie (1995) highlights that implicit in the idea of a bundle is that HR practices within a bundle are internally consistent and interrelated 3

4 Impact of environmental context on HRM choices At its simplest, the environment is anything outside an organisation which can affect an organization s present or its future activities The environment is context dependent and is unique to each organisation Organisations have one of two choices about how they manage their relationships with their environment Reactive Proactive This context is normally identified as comprising (i) the internal organisational environment and (ii) the external organisational environment Internal organisational environment Organisations are effectively all distinctive This distinctiveness is created by many different factors The size and structure of the organisation The sector the organisation operates in The length of time the organisation has been operating Workforce characteristics The financial health of the organisation Established custom and practice The organisational culture The values and managerial ideology of the senior management team External organisational environment The factors are often classified as PESTLE or more recently as STEEPLE: Social Technological Economic Environmental Political Legal Ethical 4

5 Cause and effect at macro level Does the income tax rate impact on Aer Lingus recruitment policies.? Does the fact that Millennials want to achieve work-life balance but Baby-boomers don t impact on employment practices at PWC.? Political Governments the EU trade union movements Economic economic prosperity/recession interest rates demand for goods and services 5

6 Socio-cultural demographic changes lifestyle MNCs Technology communication energy sources medicine and science Legal introduction of new laws interpretation of legislation Environmental global warming recycling 6

7 HRM in Context Internal Environment: Org size & structure Workforce characteristics Established HR practice Competitive strategy Managerial values/ideology HRM policy choice and practices are contingent on internal and external environments Key Learning Points Topic 1 What have you learned about Human Resource Management. As a term? Where it fits in the organisation..? Its activities? The impact of the external and internal environment.? The contingent nature of the environment and HRM policies and practices.? 7