Management, Organizational Policies and Practices Lecture 5 06/14/22 Lecture 2/MS (HRM) class
Jan 17, 2016
Management, Organizational Policies and Practices
Lecture 5
04/21/23 Lecture 2/MS (HRM) class
Recap Lecture 4
Resource Based View Threshold Resources & Competencies Core Resources & Competencies Robustness of Strategic Capability Value Chain Outsourcing Qualitative and Quantitative Analysis
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Lecture 5
Dr. Amna YousafPhD (HRM)
University of Twente, the Netherlands
Strategic Human Resource Management
04/21/23 Lecture 2/MS (HRM) class
The Skeleton
Introducing SHRM Elements of HR Critical HR goals Strategic Tensions Best Fit/Best Practices Critique of the views
Management, Organizational Policies and Practices
Lecture 5
04/21/23
04/21/23 Lecture 2/MS (HRM) class
Defining…
HRM is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business
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HR: Who is Managed? Covering all workforce groups All employee cadres including
managers thesmsevles Difference in way of treatment “ high
trust” manner! All kinds of employment relations
(e.g mananement-worker relations, management-union relations)
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Who is Involved? Specialist managers
Designing selection process Formation of policies and laws such as EEO Training needs analyses Formulation of performance incentive plans
Line managers Stay in the loop
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Management Styles Variety depending on nature of contract
Permanent or contractual Part time or full time With in and between firm differences Ultimate goal is competitive advantage
Overall aim Design of work systems around firm’s strategy Deployment of workers around technogoloies and
production processes Other aspects of employee’s life cycle
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Critical HR Goals (1/3)
Labor productivity/cost effectiveness Investment in HR resources Formal feedback/appraisal systems Training and selective selection
programs Firm size/economies of scale
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Critical HR Goals (2/3) Organizational felxibility
Managing change – capability to change
Short Run agiligy (adjusting the price of exisiting labour) Functional flexibility Numerical flexibility
Long Run agility (meeting long term targets such as change in technology or market demands)
Tension between the two – contractuals v/s permanent staff e.g.
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Critical HR Goals (3/3) Social legitimacy
Government regulations Protection of natural environment Occupational safety and health EEO Tripple bottom line ( financial, environmental and
social) Incentives as best comapnies to work for Social Accountability 8000 – certified auditors or
accredited audit agency Consult employees and unions for complaints and
non compliance of HR practices
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Goals: At a Close (1/5) Getting the Best Employees
Staffing – Workforce Planning Staffing – Specifying Jobs & Roles Staffing – Recruiting Staffing – Outsourcing (having services and
functions performed by non-employees) Staffing – Screening Applicants Staffing – Selecting (Hiring) New Employees
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Goals: At a Close (2/5) Employee’s due Benefits & Compensation
Training Employees
Career Development Employee Orientation Leadership development Management Development Personal Development Supervisional Development
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Goals: At a Close (3/5)
Ensuring Compliance to Regulations Personnel Policies & Records Employee Laws, Topics & Issues Ethics – Practical Toolkit To comply all Statutory Requirements
under Labour Laws
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Goals: At a Close (4/5) Ensuring Safe Work Environments
Diversity Management Dealing with Drugs at the Work Place Employee Assistance Programs Ergonomics : Safe facilities at the Work Place Personal Wellness Preventing Violence at the Work Place Ensuring Safety at the Work Place Supporting Spirituality at the Work Place
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Goals: At a Close (5/5)
Sustaining High-Performing Employees Employee Performance Management Group Performance Management Interpersonal Skills Personal Productivity Retaining Employees
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Strategic Tensions in HR (1/3) Labor scarcity (Health Care and IT)
Elimination of forced labor Globalization Mobility of labor Survival of well resourced organizations Small firms under pressures
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Strategic Tensions in HR (2/3) Labor Motivation
Employment relationship not completely defined.
Conflicts can arise Unitarist approach – improve cooperation Plurist approach - improve intrinsic and
extrinsic incentives Conflicts can be detrimental to worker
motivation and trust
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Strategic Tensions in HR (3/3)
Labour management Dependanle and disposable workers! Flexibility pressures Emregence of core/periphery models Clever balance between short term and
long term demands required
Boxall and Purcell chapter three 21
Strategic HRM: the Best-Fit School
In strategic HRM, there is a fundamental debate over how HRM is, and should, be linked to wider business strategy.
To many scholars, it seems obvious that strategic HRM rests on a contingency position: firms fit their HRM to their particular strategies and environment and are wise to do so (the best-fit school).
Boxall and Purcell chapter three 22
Strategic HRM: the Best-Fit School ...
HR stratgy should be context specific and argued that situational factors inevitably affected choices in HRM, including Environment Industry Government policies Work Systems evolve accordingly
Small business (SME’s): limited HR function Large companies (corporates): HR
departments at sopisticated level
Major Factors Affecting management choices in HR strategy
Economic & Technological factors, inside & outside the
firm:•Choice of sector & competitivestrategy
•Nature of the dominant productive technology
• • Size & structure of the firm & stage in the industry life cycle
•Quality of business capital
( well funded or under- capitalize?)
•General economic conditions
Management Choices in HR strategy
Social & Political factors, inside & outside the form:
•Degree of labor scarcity
•Expectations & power of employees( including union strategies, where these exist)
•Managerial capabilities & politics
•Labor laws & social norms
•General educational levels & vocational training systems
Linking HR Practices to Competitive Strategy Internal fit
Between HR practices External fit
Matching HR strategy to competitive strategy of business unit
Selected HRM implications of Miles & Snow’s competitive types
Organizational/
Managerial Characterist
ics
Defenders Prospectors Analysers
Competitive Strategies
Limited, stable product line. Growth through penetration. Emphasis on efficiency
Changing Product lines. Growth through innovation & market
Stable & changing Product lines.
Staffing & Development Strategies
Emphasis on internal training & development (‘make’)
Emphasis on Recruitment (‘buy’)
Mixed Approaches( both ‘make’ and ‘Buy’ as needed)
Performance Appraisal
Process Oriented and linked to training needs analysis
Results oriented and linked to rewards
Mostly process Oriented
Pay Policies Focused on Internal equity
Focused on external competitiveness
Concerned with both internal equity & externel competitiveness
Examples
A study of 200 Spanish firms: Innovative firms follow employee participation, training and development opportunities, better wages, hiring of creative, innovative people, given greater powers and discretion to employees, reduced controls, extensive trainings, providing more resources for experimentation.
Internal Fit Complementry fit (single employee fit)
Use of expensive selection processes should be accompanied by training programs and retention programs
Consistecy (across employees) fit such as standarized employment and work
conditions for same occupational group such as clerks.
Temporal consistecy employee A should be treated the same way
today as yesterday by the employer. Reversal of employer behavior can be demotivating
Internal Fit
Avoid costly dupilcation of practices (structured interviewing or assesment center taking 5-6 tests or over designed selection systems where extra ‘ hurdles’ add no value)
Avoid deadly combinations (heavy training on teamwork but individualistic rewards)
Critique External Fit: Multiple fits needed – Plural HR
objectives Fit between HR strategy and competitive
goals BUT What about employee needs? – if ignored,
motivational problems can arise Legitimacy needs, social needs and rights
of employees ( max work hrs, minimum wages, safety laws etc).
A specific HR strategy can not be applied to ‘all rounder’ firms
Internal Fit - Critique Such kinds of fits not practical: high
commitment work systems but at same time organizational flexibility pressures force organziations for layoffs -job insecurity which erode commitment
Configurational thinking in HR strategy: two different scenarios
Firm’s Choice of Competitive
strategy
Nature of productive technology in the
sector
Implications for HR Strategy
Cost Leadership
High technology or highly capital- intensive; often low staff numbers but key specialist skills very important to operations
HR strategy should be based on developing & motivating workers to maximize the benefits of the technology (which will help to achieve the cost leadership strategy). Prediction: high-wage/high skill models of labor management are cost effective. Investments in creating ‘ high performance work systems’ are likely to be justified
Cost Leadership
Low-Technology, often highly labor intensive operations & large scale
HR strategy is dominated by the need to survive in an environment where wages are in competition.
Prediction: firm seek out low wage sites where productivity is high and quality is acceptable. Firms will pay the going rate in the local labour market but avoid paying premium conditions or over investing in training.
Internal Fit - Critique So both firms have same competetive
stragty but different nature of busines and production process wich drives different HR stratgy for both. Best fit theory is too thin and overly simple!
It is difficult to attain consistency keeping in view the uncertaity a firm faces – both temporal and among employees
Linking HR practices to competitive strategy (Schuler and Jackson 1987)
33
Desired competitive strategy
Required employee skills and behaviours
Supportive HR practices
HR outcomes
Boxall and Purcell chapter three 34
Strategic HRM: the Best-Practice School
There are HR practices which are best for firms regardless of context ( the best-practice or universalist school).
Some practices to be considered sensible or cost-effective for everyone in certain micro aspects of HRM (e.g. in employee selection and appraisal)
Best Practice School Enhance employee abilities through AMO Structured interviews (carefully designed
around job aspects) better over unstructured Performance appraisal tied to objective
results (profits ROI) better over Input based performance apprasial (such as measures of timekeeping)
High pay but lesser pay inequity to encourage teamworking
Promotion from within, high wages, participation and empowerment, teams, job redesign etc
Critique Best Practice
Difference in opinion as to what constitutes best practice ( 4-5 or a dozen)
Beyond a certain amount of uniformity, managers start thinking about diversity in HRP
What if a practice is good for corporate goals but not for employees such as layoffs – can we still call it a best practice?
Critique Best Practice Labor (government) laws, cultural
practices vary from country to country – union powers vary? Can best practiecs be universalistic?
Sectoral context: e.g. innovative firms make use of more job rotation, team working, TQM compared to low tech firms.
Organziational structure: Firm size; introductrion of new technology etc plays major role – such firms use more best practices.
Critique Best Practice Best practices more relevant for sectors
which emphasize quality, high tech where firms need motivated and skilled employees and pay them higher in return. Even in high tech sectors low skilled workers dont benefit as they are paid less and best practices not for them ( labor market very loose for them).
Employers will only invest in employees when they wil be sure of returns –to stay cost effective