Strategic HRM
Purcell and Hutchinson's research into the importance of Front-line managers?
The HR practices perceived or experienced by employees will, to a growing extent, be those delivered or enacted by line managers, especially front-line managers (FLMs) with direct supervisory responsibility It is often observed that there is a gap between what is formally required in HR policy and what is actually delivered by FLMs The role of FLMs in people management, enacting HR practices and engaging in leadership behaviour means that they have to be included in any causal chain seeking to explain and measure the relationship between HRM and organisational performance Using an employee survey in 12 'excellent' companies we explore the extent to which employee commitment towards their employer and their job are influenced by the quality of leadership behaviour and by satisfaction with HR practices.
What is one question HRM writers are concerned with?
Whether there is one best way to implement HRM ('best practice') or whether HR policies should be tailored to the needs of each individual firm ('best fit')
Problems of linking HRM and performance?
Whilst monetary measures are often used to define performance, they're not the only gauges. Most organisations are assessed on many different performance metrics. Not only are there a range of often contradictory performance metrics, but it is also important to decide whose benefit we are assessing Even when appropriate bundles are put into practice, we do not know which practices are particularly important and which are marginal
HRM and causality?
Whilst studies have established a link between profits and good HRM, it might be that firms which perform strongly and make good profits have the additional resources to spend on good HRM, rather than that HRM causes good performance. This leads to the problem of causality The issue with majority of research is it only shows effects of HRM after its been implemented, which leads to results showing correlation rather than causality
What does Sisson state about rhetoric and reality?
that HRM is an optimistic model that aims for economic efficiency as well as improving the quality of working life, but its rhetoric often camouflages an unpleasant reality
Miles and Snow's three types of strategic behaviour they've linked to various HR practices
'Defenders' will have narrow, relatively stable products and will emphasise internal, process-oriented training and internal pay equity; 'Prospectors' have changing product lines and rely more on innovation leading to the use of external recruitment, results-oriented compensation and external pay equity; 'Analysers' have changing and stable product lines leading them to use internal and external recruitment and pay equity measures and process-oriented performance appraisal
What are Pfeffer's 7 key HR practices that all firms should aim to deploy?
1. Employment security. 2. Selective hiring 3. Self-managed teams or team-working 4. High pay contingent (subject to) on company performance 5. Extensive training 6. Reduction of status differences 7. Sharing information These practices often reinforce one another. I.e. high pay encourages more applicants and thus enabling selective hiring. Extensive training enables more skills to be learnt and adding more contribution in achieving organisational objectives. Reducing status differences better facilitates the team-working processes.
Key distinction between HRM and personnel management? Where are HR practitioners in the classical approach to strategy?
A key distinction between HRM and personnel management was that writers viewed HRM as strategic and personnel was not In the classical approach to strategy, which relies on careful and thorough planning, and in which plans are cascaded down from the top, HR practitioners are downstream of the planners. Their role is to implement those plans
What is Pluralism?
Pluralism= Each will have different viewpoints, that such differences are natural, and that managing these differences is what the employment relationship is all about See's the workforce as a miniature democracy where there are common interests but there are also diverse ones and conflict, disagreement and varying perceptions of the same activity are a natural consequence of this. A key task is managing the differences that exist and creating consultative structures that help manage this process such as trade unions and works councils
Definition of radicalism?
Radicalism= Differences between employers and employees are natural, inevitable and permanent and should never be reconciled The very nature of employment relationship is for workers to be exploited. That exploitation may be hidden or overt, but it always exists, so it is in workers' interests to resist management wherever and whenever possible
Harvey and Turnbull's relationship on 'high-road' and 'low-road' HR policies in the aviation industry?
'High road' employee relations are generally characterized as high wage, high skill, high trust systems founded on high performance work systems (e.g. quality circles, multi-skilling, employee involvement, team-working and the like) and a 'partnership' with (organized) labour based on the principles of 'mutual gains' The low road is the very antithesis, where regimented jobs, hierarchical systems of managerial control and antagonism between the parties are the order of the day. Go placed great emphasis on recruiting the 'right' people to the organization. The company's flight crew recruitment policy was focused on evaluating pilots on the merits of their skills outside technical competency Organization of work was also paramount to the success of the employment relations strategy at Go. A key factor in determining the overall job satisfaction of flight crew is satisfaction with flight rosters In the case of easyJet, for example, the 'Orange culture' might inspire check-in staff, 'backroom' workers (e.g. sales and booking staff) and even cabin crew, but it simply irritated pilots. Go, in contrast, combined a low-frills/low cost business strategy with high road employee relations, founded on the commitment and job satisfaction of key employee groups such as flight crew. The difference between Easyjet and Go was that Easyjet opted for matching HRM with their low-cost business strategy, having low-road relationships between employers/employees, whereas Go strategically used HR policies that adopted a high-road approach and considered their employees' needs - ultimately led to far greater job satisfaction and this was reflected in their organisational performance
How do HR practices bring about competitive advantage?
'irrespective of business strategy and context, there is a positive association between the adoption of more 'progressive', 'high performance'. Or 'high commitment' HR practices and organisational outcomes Assumption: Positive performance outcomes flow via positive employee outcomes Outcomes include reduced turnover and absenteeism, reduced costs through reduction in control and monitoring Three ways this can happen: via enhanced ability/discretion/well being = better individual performance via enhanced organisational commitment = motivated to perform better Signalling theory
What is the challenge of linking HR practices and organisational performances in today's knowledge-based economy?
As organisations operate within the knowledge-based economy they are typically part of complex networks made up of various parties such as clients, suppliers and partners. They rely not only on their own human capital to generate valuable outputs such as client solutions, but they are increasingly reliant upon inter-organisational resources to create sustained competitive advantage. Work tends to be organised into projects which span the boundaries of the firm and employees are engaged intensively in network-based activities. Firms may find they employ people whom cannot directly manage (outsourced) and conversely, they manage people whom they do not employ (in-sourced). In this context we therefore need to reassess our notion of the boundary of both the firm and of HR and adapt the HRM models accordingly to ensure that they are fit-for-purpose within and across that newly understood boundary. Employees working across organisational boundaries interact with a series of representatives from external parties including clients, partners and suppliers. This creates the opportunity for them to become committed to these parties rather than to the organisation which employs them (Kinnie and Swart, 2012). Indeed, these parties may be competing for the commitment of these employees.
What is the Best-Fit HRM framework?
Best fit concerned with how to optimise HR policies to specific business strategies & contexts Should be tailored to each organisation HR strategies that fit with the external environment There is a link between HRM practices and competitive advantage BUT HRM activity is contingent upon the particular circumstances of each business Practices depend on how closely they fit with the internal and external context of the organisation: Internal being things such as Miles and Snows strategic behaviours, companies life cycle, organisational culture and complexity of organisation External being PESTEL factors, market predictability, availability in external labour markets
What are three reasons for this dissonance (lack of agreement or harmony between people or things)?
HRM's business focus means that while its justifications are all in terms of developmental 'soft' HRM; its realities are cost-cutting 'hard' HRM. Gauged on the grandiose claims they make for themselves, many HR practices simply cannot work Simple cock-up. Most organisations, whatever they do and whatever sector they are in, are not hives of flawless efficiency Workers are neither mindless believers nor cultural dupes. They may genuinely appreciate and engage with an HRM initiative but they may also reject, resist, be cynical about, mock, or simply ignore it and some of these reactions can be predicted by looking at the employment context outside the individual HR practices to consider what employees do, what they are paid, how they are treated and what else management does to them.
What is HRM? What activities is it associated with?
HRM= A distinctive approach to employment management entrepreneurship which seeks to achieve competitive advantage through strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques HRM refers to all those activities associated with the management of work and people in organisations
Perhaps HRM is more about being a 'good' employer rather than efficiency of HRM? Bacon's Steel Mill example?
Many of these studies may be capturing not the efficiency of HRM, but whether or not an employer is a 'good' employer If what we are seeking is a 'good' employer, then HR practices are a pretty unreliable proxy. Decent treatment does not always take the form of sophisticated HRM Bacon (1999) reviewed a steel mill having impressive HR practices that gave employees vocational qualifications, using contingent pay, encouraging teamwork, individual performance appraisals.. but in tandem there were less attractive practices. Training was compulsory and absenteeism was at 1% only because people absent were harassed and encourages to take holiday if they were sick The argument indicates that whilst in many studies this would have indicated an organisation that had exemplary HRM, in reality it was being manipulated and is difficult to argue whether they're really a 'good' employer The mere presence of HR policies does not guarantee that it will be implemented, nor will it be implemented effectively
What is the Best Practice Strategic HRM model? What are the alternate names for it?
Suggests that there is one superior bundle of HR practices which result in positive outcomes regardless of the nature of the business, the labour market or the product or service being delivered This idea has many acronyms such as: High Performance Work Systems (HPWS), High Commitment Management HCM, High Involvement Management HIM, HPP etc - the underlying assumptions are essentially the same. Whilst there is a consensus that there is one bundle of best practices, there is no consensus on what that bundle should consist of (hence so many acronyms)
What is the AMO model? By who?
The AMO Model by Boxell and Purcell is a theory that links HRM and organisational performance The AMO theory suggests that there are three independent work system components that shape employee characteristics and contribute to the success of the organization. According to the theory, organisational interests are best served by a system that attends to the employees ability, motivation, and opportunity (AMO). If HR policies help increase individual employees' ability to perform, motivation to perform and Opportunity to perform, then it'll enhance individual outcomes
What are Unilateralism, Pluralism and Radicalism briefly?
Unilateralism, pluralism and radicalism are all different frames/ways of looking at the workplace and interpreting what happens
What is the HRM model? Beliefs and assumptions? Strategic qualities? Critical role of managers? Key levers?
The HRM model: Beliefs and assumptions: That it is human resource which gives competitive edge and that the aim is for rules to be met with not just compliance, but commitment from the employees. Employees should therefore be carefully selected and developed. Strategic qualities: HR decisions are of strategic importance. Top management involvement is necessary. HR policies should be integrated into business strategy - stemming from it and even contributing to it Critical role of managers: Because HR practice is critical to the core activities of the business, it is too important to be left to personnel specialists alone. Line managers need to be closely involved as both drivers and deliverers of HR policies. There is a much greater attention paid to the management of managers themselves. Key levers: Managing culture is more important than manging procedures and systems. Integrated action on selection, communication, training, reward and development. Restructuring and job redesign allow developed responsibility and empowerment
Disadvantages of Best-fit approach?
The biggest problem is that most firms exist within complex external environments with multiple contingencies that cannot all be isolated or identified. This raises the issue of the dynamic fit between policy and context: if the external environment changes should firms keep changing their practices to fit the market circumstances? There are strong arguments against this because HR practices are quite slow to change. The need to respond to external pressures creates problems of treating employees with consistency of treatment especially over time (Baron and Kreps, 1999). In reality, it is likely that a combination of practices will be needed depending on external circumstances: as products grow and decline there may need to be redundancies for some employees but also the need to retain good employees and to develop them Multiple influences on HRM - underplays variety of other contextual/institutional factors that influence HR practice -e.g fitness industry/hospitality industry there is no link Managers do not have total control Employers have choices - they can be in the same product market but choose to compete in a different way
What's going on with the language of HRM?
The language of HRM often has positive connotations that are impossible to disagree with. I.e. terms like pay and compensation turn into 'reward'. But in reality, words like reward may conceal low wages etc
What is Unilateralism?
Unilateralism= The assumption that management and workers share the same outlook, usually defined by management. HRM has a tendency to be unilateralist, suggesting the only perspective on work is management, with workers existing to carry out managements directions and that everyone shares the same goal. Managers can and should collectively speak on behalf of everyone as they all share the same viewpoint. All other conflict is pathologized as the only reason anyone could have a reason for disagreement is for the sake of being a trouble maker. From this viewpoint, staff may be told to work overtime and not be paid as that would be 'disloyal' to the firm. Allows managers to scream at workers to encourage greater efforts
What is the RBV and how does it contribute to SHRM?
The resource-based view (RBV) has developed from business strategy literature that competitive advantage is based on what is difficult to imitate not on what can be copied. The RBV involves looking at the internal resources of the firm and considering the ways in which HR can maximise their contribution to development of competitive advantage. This focuses on how human resources can become scarce organisation specific and difficult to imitate How HR can improve the following: Value - how does the firm seek to distinguish itself from its competitors? What part does HR play in this? Rarity - is the firm doing something with its employees that its competitors are not? Inimitable - casual ambiguity means that the unique history of each firm makes it difficult to ascertain what causes the advantage and therefore make it difficult to copy. Non-substitutability - these internal resources are integrated into coherent systems so advantage is sustainable and cannot be substituted by other resources. the resource-based perspective offers a way of theorising the contribution of HR strategy. We can divide the overall 'human resource advantage' into: 'human capital advantage': Because employment relationships are generally 'relational' rather than 'spot' contracts, firms have the possibility of generating human capital advantage through recruiting and retaining outstanding people 'human process advantage': a function of causally ambiguous, socially complex, historically evolved processes such as learning, co-operation and innovation which are very difficult to imitate.
What are the problems with Best Practice HRM?
There is no consensus on how many practices constitute the best practice bundle, nor what these are, nor how they should be implemented. There is no mention as to who they are best for, and often the real and ugly decisions that are made are excluded from the lists. It is difficult to argue best practice lists retain credibility when they omit real HR decisions as practiced by many organisations HRM cannot be both best practice and strategic. If there is one 'best' way of doing things that should apply regardless of context then we cannot argue that HRM is an integral and bespoke part of a business' strategy REMEMBER: METHODOLOGICAL, THEORETICAL AND CONTEXTUAL PROBLEMS
What are the advantages associated with Best Practice HRM?
These practices often mutually reinforce one another. I.e. high pay encourages more applicants and thus enabling selective hiring. Extensive training enables more skills to be learnt and adding more contribution in achieving organisational objectives. Reducing status differences better facilitates the team-working processes.
Guest's research on Best Practice and Organisational Performance
Through analysing 835 private sector firms he concluded that Incremental profit per employee proportional to the increase in number of HR practices This indicates that HR policies can both increase organisational performance and support workers' goals
What are the tensions of the RBV?
Truss (2001) notes one of the problems with the RBV is its emphasis on the importance of synergy and fit between the various elements of the HR system and asks how compatible a systems-based approach with flexibility is Who is actually the key resource? Managers or workers? Could workers be the key resource? Is the focus on people, practices or processes? Why does path dependency matter? How important are institutional forces?