gins to take shape. It is clearly important that an HRM functional strategy be closely integrated and coordinated with the corporate, business, and other functional strategies. Indeed, without such integration and coordination, organizational competitiveness will clearly suffer.
As effective partners in helping organizations successfully achieve their goals, HRM managers need to have a clear understanding of exactly what are the organization’s strategies, and then they must ensure that their own efforts are consistent with and provide support for those strategies. To the extent that the HRM function is seen as a strategic partner and/or a center of expertise, of course, its managers should also be actively involved in the formulation of corporate and business strategies as well as other
functional strategies.
ord keeping; legislative compliance (affirmative action, EEO, etc.); and labor relations.
The traditional personnel department is often both physically and psychologically separated from the
‘‘real work” of the organization. Traditional personnel involves a limited number of functional tasks, and personnel activities and staff are relatively isolated from the “profit-making heart” of the
organization.
In the strategic view of HRM, the functional duties remain important. Certainly hiring, training, and providing pay and benefits to employees are essential tasks that must be accomplished in any
organization. However, given the changes discussed earlier, many organizations are developing new structural and cultural patterns to meet the competitive demands of their dynamic and often global marketplace.
The fact that employees (or human resources) today can be a competitive advantage has led to the development of this new field known as SHRM. Strategic human resources management has been defined as “the linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility (Truss and Gratton, 1994, p. 663). Put another way, it is “the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals” (Wright and McMahan, 1992, p. 292).
Strategic human resources management means accepting the HRM function as a strategic partner in both the formulation of the organization’s strategies and the implementation of those strategies through HRM activities such as recruiting, selecting, training, and rewarding personnel.
HRM strategies refer to the specific HRM courses of action the organization uses to achieve its aims. As noted earlier the efforts to formulate and implement sound HRM strategies at the three levels (corporate, competitive, and functional) are designed to achieve desirable end results such as high-quality products and services and socially responsible behavior. In other words, sound strategies are intended to result in growth, profits, and survival.
Strategic planning by an organization leads to informed, purposeful actions. By articulating a clear common vision of why the organization exists, now and in the future, a strategic plan provides direction and a cornerstone for making important HRM decisions. Planning HRM activities expands awareness of possibilities, identifies strengths and weaknesses, reveals opportunities, and points to the need to
evaluate the probable impact of internal and external forces.
A well-designed organizational strategic plan permits the HRM department to develop HRM plans and be better prepared to cope with changes in both the internal and external environments. More will be said about HRM planning later in this chapter. Today’s organizations need more than a traditional personnel model of HRM activities that simply involve putting
out small fires—for example, ensuring that people are paid on the right day, that the job advertisement meets the newspaper deadline, that a suitable supervisor is recruited for the night shift by the time it goes ahead, and that the same manager remembers to observe due process before sacking the new rep who didn’t work out. In an effort to offer new models of HRM a number of theoretical views of SHRM have been proposed as highlighted in the next section.
Theoretical Views on SHRM
Given the changes in the business environment many organizations are developing new structural and cultural patterns to meet the competitive demands of their dynamic and often international marketplace.
As a result of the new strategic view of HRM in organizations, HRM plays a role in helping the organization reach its strategic objectives and it interacts fully with other functional areas within the organization. For example, HRM must help select employees able to innovate, train them to provide top- class customer service, and measure and reward entrepreneurial behavior.
A number of theoretical models have been developed to explain exactly what SHRM requires in an organization and the processes by which SHRM contributes to the bottom-line success of the
organization. A summary of these theoretical perspectives is given in Exhibit 2.1.
As is often the case with theories about human behavior in organizations, the question for HRM practitioners is, “Which theoretical approach is correct, and from a practical perspective, what does it suggest are the important aspects of creating a good, strategically oriented HRM function within an organization?” In the case of the theoretical perspectives of SHRM in Exhibit 2.1, the answer to the question is not a simple one. Like many theories about organizations, none are completely correct.
Predicting the effect of various HRM practices on an organization’s performance and long-term success is not as straightforward as predicting the effect of gravity on a stone dropped from the roof of your house.
Rather than focusing on right or wrong, it is important to recognize that there are many different theoretical perspectives that one can rely on in the process of developing an effective strategic HRM function. What is important to take away from the different theoretical perspectives is that there is no
“one best way” to view or operationalize HRM practices.
Today’s and tomorrow’s managers must learn as much as possible about the HRM best practices
discussed throughout this book and then design a practice that’s consistent with what their organization wants to achieve. The reality is that organizational success is increasingly dependent upon flexibility in HRM practices (such as the organization’s reward system) and the ability of HRM personnel to change as competitive conditions continually pressure an organization to change its strategy.
Exhibit 2.1
Some Common Theoretical Perspectives on SHRM
Perspective Description
Universalistic There is one best way to manage human resources. Strategic HRM is the process of transforming traditional HRM practices into a limited set of “correct” HRM procedures and policies.
Strategic fit Strategic HRM involves matching specific HRM practices to the organization’s overall business strategy.
HRM as internal service provider
Strategic HRM involves HRM professionals providing HRM services to organizational units within the organization. The HRM goal is to enhance the effectiveness and efficiency of the operations of their organizational unit customers.
Configurational There are various configurations or “bundles” of HRM practices that go together and, collectively, can improve organizational performance. Certain bundles are effective in certain industries and/or in certain business conditions, where as other bundles should be used in other industries or underdifferent business conditions.
Resource/competency Strategic HRM engenders organizational success by enhancing an organization’s ability to acquire, develop, use, and retain employees with high competence levels relevant to organization activities.
It is important to recognize that the viability (and strategic future) of the HRM department means that HRM needs to focus more and more on activities that clearly add value to the organization’s success or bottom line—activities such as strategic planning, change management, corporate culture transitions, and developing human capital. One HRM expert has recently noted that “HRM can help deliver
organizational excellence in four main ways’’ (Ulrich, 1998). For example, if strategy implementation requires, say, a team-based organizational structure, HRM would be responsible for bringing state-of-the- art approaches for creating this structure to senior management’s attention. Second, HRM should
become an expert in the way work is organized and executed, delivering administrative efficiency to ensure that costs are reduced while quality is maintained. Third, with employee behavior increasingly the key to competitive advantage, HRM should become a champion for employees, vigorously
representing their concerns to senior management and at the same time working to increase employees’ commitment to the organization and their ability to deliver results. Fourth, HRM needs to ensure the organization has the ca-
pacity to embrace and capitalize on change, for instance by making sure that “broad vision statements get transformed into specific behaviors” (Ulrich, 1998). As the tasks they face grow more complex, the HRM field is also becoming more professionalized. Thus, thousands of HRM professionals have already passed one or both of the HRM professional certification exams offered by the Human Resource
Certification Institute. Those successfully completing all requirements earn the right to be designated a Professional in Human Resources (PHR) or a Senior Professional in Human Resources (SPHR).
Benefits of SHRM Planning
Successful organizations in the future must closely align their HRM strategies and programs (efforts) with the external opportunities, competitive strategies, and their unique characteristics and core competence. Organizations that fail to clearly define HRM strategy or competitive strategy that explicitly incorporates human resources will not be successful. Equally important to organizational success is ensuring that HRM programs or efforts help implement the organization’s HRM strategy effectively.
The process of formulating HRM strategies and establishing programs to implement them is SHRM planning. When done correctly SHRM planning provides a number of direct and indirect benefits for an organization.
• Identification of gaps between an organization’s current situation and desired future.
• Explicit communication of organizational goals.
• Encouragement of proactive rather than reactive behavior.
• Encouragement of line mangers’ participation.
• Stimulation of critical thinking and ongoing examination of assumptions on which they make their decisions.
• Creation of common bonds or a sense of shared values and expectations.
• Identification of the potential problems and opportunities with respect to the people expected to implement the business strategy.
Other benefits of SHRM planning include:
• HRM costs may be lower because management can anticipate imbalances before they become unmanageable and expensive.
• More time is available to locate talent because needs are anticipated and identified before the actual staffing is required.
• Better opportunities exist to include women and minority groups in future growth plans.
• Development of managers can be better planned.
To the extent that these results can be measured, they can form the basis for evaluating the success of SHRM planning. Another approach is to measure projected levels of demand against actual levels at some point in the future. But the most telling evidence of successful SHRM planning in an organization is when the human resources are consistently aligned with the needs of the organization over a period of time. There are several actions HRM personnel can take to link HRM planning to the organization’s strategic plans. These are discussed in the next section.