Strategic Human Resource Management

THE EVOLVING/ STRATEGIC ROLE OF

HUMAN RESOURCE MANAGEMENT

Copyright © 2005 South-Western. All rights reserved. 1–2

Strategic Human Resource Strategic Human Resource ManagementManagement

Strategic Human Resource Strategic Human Resource ManagementManagement

• Involves development of consistent, Involves development of consistent, alignedaligned collection of collection of practices, programs, and policies to facilitate achievement practices, programs, and policies to facilitate achievement of strategic objectivesof strategic objectives

• Requires abandoning mindset and practices of “personnel Requires abandoning mindset and practices of “personnel management,” and focusing on strategic issues, rather than management,” and focusing on strategic issues, rather than solely on operational issuessolely on operational issues

• Integration of all HR programs within larger framework, Integration of all HR programs within larger framework, facilitating mission and objectivesfacilitating mission and objectives

• Writing down strategy facilitates involvement and buy-in Writing down strategy facilitates involvement and buy-in of senior executives and other employeesof senior executives and other employees

• Involves development of consistent, Involves development of consistent, alignedaligned collection of collection of practices, programs, and policies to facilitate achievement practices, programs, and policies to facilitate achievement of strategic objectivesof strategic objectives

• Requires abandoning mindset and practices of “personnel Requires abandoning mindset and practices of “personnel management,” and focusing on strategic issues, rather than management,” and focusing on strategic issues, rather than solely on operational issuessolely on operational issues

• Integration of all HR programs within larger framework, Integration of all HR programs within larger framework, facilitating mission and objectivesfacilitating mission and objectives

• Writing down strategy facilitates involvement and buy-in Writing down strategy facilitates involvement and buy-in of senior executives and other employeesof senior executives and other employees


Exhibit 4-1 (Ulrich, 1997)Exhibit 4-1 (Ulrich, 1997)

Possible Roles Assumed by HR Possible Roles Assumed by HR FunctionFunction

Exhibit 4-1 (Ulrich, 1997)Exhibit 4-1 (Ulrich, 1997)

Possible Roles Assumed by HR Possible Roles Assumed by HR FunctionFunction


HR Roles in Knowledge-Based HR Roles in Knowledge-Based EconomyEconomy


• Human capital stewardHuman capital steward– Creates an environment and culture in which employees Creates an environment and culture in which employees

voluntarily contribute skills, ideas, and energyvoluntarily contribute skills, ideas, and energy– Human capital is not “owned” by organizationHuman capital is not “owned” by organization

• Knowledge facilitatorKnowledge facilitator– Procures necessary employee knowledge and skill sets that Procures necessary employee knowledge and skill sets that

allow information to be acquired, developed, and allow information to be acquired, developed, and disseminateddisseminated

– Provides a competitive advantage Provides a competitive advantage – Must be part of strategically designed employee Must be part of strategically designed employee

development plandevelopment plan

• Human capital stewardHuman capital steward– Creates an environment and culture in which employees Creates an environment and culture in which employees

voluntarily contribute skills, ideas, and energyvoluntarily contribute skills, ideas, and energy– Human capital is not “owned” by organizationHuman capital is not “owned” by organization

• Knowledge facilitatorKnowledge facilitator– Procures necessary employee knowledge and skill sets that Procures necessary employee knowledge and skill sets that

allow information to be acquired, developed, and allow information to be acquired, developed, and disseminateddisseminated

– Provides a competitive advantage Provides a competitive advantage – Must be part of strategically designed employee Must be part of strategically designed employee

development plandevelopment plan




• Relationship builderRelationship builder– Develops structure, work practices, and culture that Develops structure, work practices, and culture that

allow individuals to work togetherallow individuals to work together– Develops networks that focus on strategic Develops networks that focus on strategic

objectivesobjectives

• Rapid deployment specialistRapid deployment specialist– Creates fluid and adaptable structure and systemsCreates fluid and adaptable structure and systems– Global, knowledge-based economy mandates Global, knowledge-based economy mandates

flexibility and culture that embraces changeflexibility and culture that embraces change

• Relationship builderRelationship builder– Develops structure, work practices, and culture that Develops structure, work practices, and culture that

allow individuals to work togetherallow individuals to work together– Develops networks that focus on strategic Develops networks that focus on strategic

objectivesobjectives

• Rapid deployment specialistRapid deployment specialist– Creates fluid and adaptable structure and systemsCreates fluid and adaptable structure and systems– Global, knowledge-based economy mandates Global, knowledge-based economy mandates

flexibility and culture that embraces changeflexibility and culture that embraces change


SHRM Critical CompetenciesSHRM Critical CompetenciesSHRM Critical CompetenciesSHRM Critical Competencies

• HR’s success as true strategic business partner HR’s success as true strategic business partner dependent on dependent on fivefive specific competencies: specific competencies:

– Strategic contribution - development of strategyStrategic contribution - development of strategy– Business knowledge - understanding nuts and bolts of Business knowledge - understanding nuts and bolts of

organizationorganization– Personal credibility - measurable value demonstrated in Personal credibility - measurable value demonstrated in

programs and policiesprograms and policies– HR delivery - serving internal customers through effective HR delivery - serving internal customers through effective

and efficient programsand efficient programs– HR technology - using technology to improve organization’s HR technology - using technology to improve organization’s

management of peoplemanagement of people

• HR’s success as true strategic business partner HR’s success as true strategic business partner dependent on dependent on fivefive specific competencies: specific competencies:

– Strategic contribution - development of strategyStrategic contribution - development of strategy– Business knowledge - understanding nuts and bolts of Business knowledge - understanding nuts and bolts of

organizationorganization– Personal credibility - measurable value demonstrated in Personal credibility - measurable value demonstrated in

programs and policiesprograms and policies– HR delivery - serving internal customers through effective HR delivery - serving internal customers through effective

and efficient programsand efficient programs– HR technology - using technology to improve organization’s HR technology - using technology to improve organization’s

management of peoplemanagement of people


Exhibit 4-4Exhibit 4-4

Lepak & Snell’s Employment ModelsLepak & Snell’s Employment ModelsExhibit 4-4Exhibit 4-4

Lepak & Snell’s Employment ModelsLepak & Snell’s Employment Models



Traditional HR Versus Strategic HRTraditional HR Versus Strategic HRExhibit 4-5Exhibit 4-5

Traditional HR Versus Strategic HRTraditional HR Versus Strategic HR


Barriers to Strategic HRBarriers to Strategic HRBarriers to Strategic HRBarriers to Strategic HR

• Short-term mentality/focus on current performanceShort-term mentality/focus on current performance• Inability of HR to think strategicallyInability of HR to think strategically• Lack of appreciation for what HR can contributeLack of appreciation for what HR can contribute• Failure to understand line managers’ role as an HR Failure to understand line managers’ role as an HR

managermanager• Difficulty in quantifying many HR outcomesDifficulty in quantifying many HR outcomes• Perception of human assets as higher-risk Perception of human assets as higher-risk

investmentsinvestments• ““Incentives” for changes that might ariseIncentives” for changes that might arise



Outcomes of Strategic HROutcomes of Strategic HRExhibit 4-7Exhibit 4-7

Outcomes of Strategic HROutcomes of Strategic HR



Model of Strategic HR ManagementModel of Strategic HR ManagementExhibit 4-8Exhibit 4-8

Model of Strategic HR ManagementModel of Strategic HR Management


Reading 4.1 (Rodriguez & Ordonez de Pablos)Reading 4.1 (Rodriguez & Ordonez de Pablos) Strategic HR as Organizational Strategic HR as Organizational

LearningLearning

Reading 4.1 (Rodriguez & Ordonez de Pablos)Reading 4.1 (Rodriguez & Ordonez de Pablos) Strategic HR as Organizational Strategic HR as Organizational

LearningLearning

• Stages of knowledge managementStages of knowledge management– Generating or capturing knowledgeGenerating or capturing knowledge– Structuring and providing value to gathered Structuring and providing value to gathered

knowledgeknowledge– Transferring knowledgeTransferring knowledge– Establishing mechanisms for use and reuse Establishing mechanisms for use and reuse

of knowledge for individuals and groupsof knowledge for individuals and groups

• Stages of knowledge managementStages of knowledge management– Generating or capturing knowledgeGenerating or capturing knowledge– Structuring and providing value to gathered Structuring and providing value to gathered

knowledgeknowledge– Transferring knowledgeTransferring knowledge– Establishing mechanisms for use and reuse Establishing mechanisms for use and reuse

of knowledge for individuals and groupsof knowledge for individuals and groups


Figure 1Figure 1

Knowledge Management CycleKnowledge Management CycleFigure 1Figure 1

Knowledge Management CycleKnowledge Management Cycle


Figure 2Figure 2

Knowledge ManagementKnowledge ManagementFigure 2Figure 2

Knowledge ManagementKnowledge Management


Reading 4.1Reading 4.1 Strategic HR as Organizational Strategic HR as Organizational

LearningLearning


LearningLearning• Knowledge creationKnowledge creation

– Single-loop learning: Single-loop learning: • Comparing consequences of actions with desired Comparing consequences of actions with desired

outcomesoutcomes

• Modifying behaviorModifying behavior

– Double-loop learning: Double-loop learning: • Goes beyond detection and correction of errorsGoes beyond detection and correction of errors

• Entails examining actions and outcomes, as well as Entails examining actions and outcomes, as well as underlying assumptionsunderlying assumptions

• Knowledge creationKnowledge creation– Single-loop learning: Single-loop learning:

• Comparing consequences of actions with desired Comparing consequences of actions with desired outcomesoutcomes

• Modifying behaviorModifying behavior

– Double-loop learning: Double-loop learning: • Goes beyond detection and correction of errorsGoes beyond detection and correction of errors

• Entails examining actions and outcomes, as well as Entails examining actions and outcomes, as well as underlying assumptionsunderlying assumptions



LearningLearning


LearningLearning

• Without purposeful analysis of Without purposeful analysis of underlying assumptions and systems, underlying assumptions and systems, organizations may become victims of organizations may become victims of ‘competency traps’‘competency traps’

• Organizational learning: Organizational learning: – Inherently rareInherently rare– Inimitable Inimitable – ImmobileImmobile

• Without purposeful analysis of Without purposeful analysis of underlying assumptions and systems, underlying assumptions and systems, organizations may become victims of organizations may become victims of ‘competency traps’‘competency traps’

• Organizational learning: Organizational learning: – Inherently rareInherently rare– Inimitable Inimitable – ImmobileImmobile



LearningLearning


LearningLearning• How HR management systems can How HR management systems can

contribute to development of organizational contribute to development of organizational knowledgeknowledge– Labor markets can be exploited in order to attract Labor markets can be exploited in order to attract

and select individuals with high cognitive abilitiesand select individuals with high cognitive abilities– Internal labor markets can contribute to Internal labor markets can contribute to

development of firm specific assetsdevelopment of firm specific assets– Cross-functional and inter-organizational teams can Cross-functional and inter-organizational teams can

be utilizedbe utilized

• How HR management systems can How HR management systems can contribute to development of organizational contribute to development of organizational knowledgeknowledge– Labor markets can be exploited in order to attract Labor markets can be exploited in order to attract

and select individuals with high cognitive abilitiesand select individuals with high cognitive abilities– Internal labor markets can contribute to Internal labor markets can contribute to

development of firm specific assetsdevelopment of firm specific assets– Cross-functional and inter-organizational teams can Cross-functional and inter-organizational teams can

be utilizedbe utilized



LearningLearning


LearningLearning

• How HR systems can support and How HR systems can support and enhance knowledge transferenhance knowledge transfer– Apprenticeship and mentoringApprenticeship and mentoring– Cross-functional teamsCross-functional teams– Stimulate and reward information sharingStimulate and reward information sharing– Provide free access to informationProvide free access to information– Job rotationsJob rotations

• How HR systems can support and How HR systems can support and enhance knowledge transferenhance knowledge transfer– Apprenticeship and mentoringApprenticeship and mentoring– Cross-functional teamsCross-functional teams– Stimulate and reward information sharingStimulate and reward information sharing– Provide free access to informationProvide free access to information– Job rotationsJob rotations


Reading 4.1Reading 4.1 Knowledge InstitutionalizationKnowledge Institutionalization

Reading 4.1Reading 4.1 Knowledge InstitutionalizationKnowledge Institutionalization

• Walsh and Ungson’s five ‘storage bins’ in which Walsh and Ungson’s five ‘storage bins’ in which organizational memory can resideorganizational memory can reside

– Individuals (assumptions, beliefs, and cause maps)Individuals (assumptions, beliefs, and cause maps)– Culture (stories, myths, and symbols)Culture (stories, myths, and symbols)– Transformations (work design, processes, and routines)Transformations (work design, processes, and routines)– Structure (organizational design)Structure (organizational design)– Ecology (physical structure and information systems)Ecology (physical structure and information systems)

• Institutionalized knowledge tends to be firm Institutionalized knowledge tends to be firm specific, socially complex, and causally specific, socially complex, and causally ambiguousambiguous

• Walsh and Ungson’s five ‘storage bins’ in which Walsh and Ungson’s five ‘storage bins’ in which organizational memory can resideorganizational memory can reside

– Individuals (assumptions, beliefs, and cause maps)Individuals (assumptions, beliefs, and cause maps)– Culture (stories, myths, and symbols)Culture (stories, myths, and symbols)– Transformations (work design, processes, and routines)Transformations (work design, processes, and routines)– Structure (organizational design)Structure (organizational design)– Ecology (physical structure and information systems)Ecology (physical structure and information systems)

• Institutionalized knowledge tends to be firm Institutionalized knowledge tends to be firm specific, socially complex, and causally specific, socially complex, and causally ambiguousambiguous


Figure 3Figure 3

Alternative Orientations of Fit in Alternative Orientations of Fit in SHRMSHRM

Figure 3Figure 3

Alternative Orientations of Fit in Alternative Orientations of Fit in SHRMSHRM


Reading 4.2 (Bowen & Ostroff)Reading 4.2 (Bowen & Ostroff) Understanding HRM-Performance Understanding HRM-Performance

LinkagesLinkages

Reading 4.2 (Bowen & Ostroff)Reading 4.2 (Bowen & Ostroff) Understanding HRM-Performance Understanding HRM-Performance

LinkagesLinkages

• Scholars have often assumed two perspectivesScholars have often assumed two perspectives

• Systems view considers overall configuration or Systems view considers overall configuration or aggregation of HRM practicesaggregation of HRM practices

• Strategic perspective examines “fit” between Strategic perspective examines “fit” between various HRM practices and organization’s various HRM practices and organization’s competitive strategycompetitive strategy

• Overall set of HRM practices generally associated Overall set of HRM practices generally associated with firm performance and competitive advantagewith firm performance and competitive advantage

• Scholars have often assumed two perspectivesScholars have often assumed two perspectives

• Systems view considers overall configuration or Systems view considers overall configuration or aggregation of HRM practicesaggregation of HRM practices

• Strategic perspective examines “fit” between Strategic perspective examines “fit” between various HRM practices and organization’s various HRM practices and organization’s competitive strategycompetitive strategy

• Overall set of HRM practices generally associated Overall set of HRM practices generally associated with firm performance and competitive advantagewith firm performance and competitive advantage


Reading 4.2Reading 4.2 Understanding HRM-Performance Understanding HRM-Performance

LinkagesLinkages


LinkagesLinkages• Psychological climate:Psychological climate:

– Experiential-based perception of what people “see” Experiential-based perception of what people “see” and report happening to them as they make sense and report happening to them as they make sense of their environmentof their environment

• Climate:Climate:– Critical mediating construct in exploring multilevel Critical mediating construct in exploring multilevel

relationships between HRM and organizational relationships between HRM and organizational performanceperformance

• Psychological climate:Psychological climate:– Experiential-based perception of what people “see” Experiential-based perception of what people “see”

and report happening to them as they make sense and report happening to them as they make sense of their environmentof their environment

• Climate:Climate:– Critical mediating construct in exploring multilevel Critical mediating construct in exploring multilevel

relationships between HRM and organizational relationships between HRM and organizational performanceperformance



LinkagesLinkages


LinkagesLinkages

• Two interrelated features of HRM Two interrelated features of HRM system:system:– Content Content – ProcessProcess

• Must be integrated effectivelyMust be integrated effectively

• Two interrelated features of HRM Two interrelated features of HRM system:system:– Content Content – ProcessProcess

• Must be integrated effectivelyMust be integrated effectively



LinkagesLinkages


LinkagesLinkages• ContentContent

– Set of practices adoptedSet of practices adopted– Ideally driven by strategic goals and valuesIdeally driven by strategic goals and values– No single most appropriate set of practices for particular No single most appropriate set of practices for particular

strategic objectivestrategic objective– Different sets of practices may be equally effective so long Different sets of practices may be equally effective so long

as they allow particular type of climate around some as they allow particular type of climate around some strategic objective to developstrategic objective to develop

• ProcessProcess– How HRM system can be designed and administered How HRM system can be designed and administered

effectively by defining meta-features of overall HRM systemeffectively by defining meta-features of overall HRM system

• ContentContent– Set of practices adoptedSet of practices adopted– Ideally driven by strategic goals and valuesIdeally driven by strategic goals and values– No single most appropriate set of practices for particular No single most appropriate set of practices for particular

strategic objectivestrategic objective– Different sets of practices may be equally effective so long Different sets of practices may be equally effective so long

as they allow particular type of climate around some as they allow particular type of climate around some strategic objective to developstrategic objective to develop

• ProcessProcess– How HRM system can be designed and administered How HRM system can be designed and administered

effectively by defining meta-features of overall HRM systemeffectively by defining meta-features of overall HRM system


• To create strong situations with To create strong situations with unambiguous messages about unambiguous messages about appropriate behavior, HRM systems appropriate behavior, HRM systems should have:should have:– DistinctivenessDistinctiveness– ConsistencyConsistency– ConsensusConsensus

• To create strong situations with To create strong situations with unambiguous messages about unambiguous messages about appropriate behavior, HRM systems appropriate behavior, HRM systems should have:should have:– DistinctivenessDistinctiveness– ConsistencyConsistency– ConsensusConsensus

Reading 4.2 Reading 4.2

Understanding HRM-Performance Understanding HRM-Performance LinkagesLinkages





LinkagesLinkages


LinkagesLinkages• DistinctivenessDistinctiveness

– VisibilityVisibility• Degree to which practices are salient and readily observableDegree to which practices are salient and readily observable

– Understandability Understandability • Lack of ambiguity and ease of comprehension of practice Lack of ambiguity and ease of comprehension of practice

contentcontent

– Legitimacy of authority Legitimacy of authority • Leads individuals to submit to performance expectations as Leads individuals to submit to performance expectations as

formally sanctioned behaviorsformally sanctioned behaviors

– Relevance Relevance • Whether situation is defined so that individuals see it as Whether situation is defined so that individuals see it as

relevant to important goalrelevant to important goal

• DistinctivenessDistinctiveness– VisibilityVisibility

• Degree to which practices are salient and readily observableDegree to which practices are salient and readily observable

– Understandability Understandability • Lack of ambiguity and ease of comprehension of practice Lack of ambiguity and ease of comprehension of practice

contentcontent

– Legitimacy of authority Legitimacy of authority • Leads individuals to submit to performance expectations as Leads individuals to submit to performance expectations as

formally sanctioned behaviorsformally sanctioned behaviors

– Relevance Relevance • Whether situation is defined so that individuals see it as Whether situation is defined so that individuals see it as

relevant to important goalrelevant to important goal






• ConsistencyConsistency– Instrumentality Instrumentality

• Unambiguous perceived cause-effect relationship Unambiguous perceived cause-effect relationship between system’s desired content-focused between system’s desired content-focused behaviors and associated employee consequencesbehaviors and associated employee consequences

– Validity Validity • HRM practices must display consistency between HRM practices must display consistency between

what they purport to do and what they actually dowhat they purport to do and what they actually do

• ConsistencyConsistency– Instrumentality Instrumentality

• Unambiguous perceived cause-effect relationship Unambiguous perceived cause-effect relationship between system’s desired content-focused between system’s desired content-focused behaviors and associated employee consequencesbehaviors and associated employee consequences

– Validity Validity • HRM practices must display consistency between HRM practices must display consistency between

what they purport to do and what they actually dowhat they purport to do and what they actually do



LinkagesLinkages


LinkagesLinkages

• ConsensusConsensus– Agreement among message sendersAgreement among message senders– Fairness Fairness

• Composite of employees’ perceptions of Composite of employees’ perceptions of whether practices adhere to three whether practices adhere to three dimensions of justice: distributive, dimensions of justice: distributive, procedural, and interactionalprocedural, and interactional

• ConsensusConsensus– Agreement among message sendersAgreement among message senders– Fairness Fairness

• Composite of employees’ perceptions of Composite of employees’ perceptions of whether practices adhere to three whether practices adhere to three dimensions of justice: distributive, dimensions of justice: distributive, procedural, and interactionalprocedural, and interactional


Reading 4.3 (Greene)Reading 4.3 (Greene) Organization Culture QuestionnaireOrganization Culture Questionnaire

Reading 4.3 (Greene)Reading 4.3 (Greene) Organization Culture QuestionnaireOrganization Culture Questionnaire

• Topics to be included in questionnaire:Topics to be included in questionnaire:– How is performance defined, measured and How is performance defined, measured and

rewarded?rewarded?– How are information and resources allocated and How are information and resources allocated and

managed?managed?– What is operational philosophy of organization with What is operational philosophy of organization with

regard to risk-taking, leadership, and concern for regard to risk-taking, leadership, and concern for overall results?overall results?

– Does organization regard human resources as costs Does organization regard human resources as costs or assets?or assets?

• Topics to be included in questionnaire:Topics to be included in questionnaire:– How is performance defined, measured and How is performance defined, measured and

rewarded?rewarded?– How are information and resources allocated and How are information and resources allocated and

managed?managed?– What is operational philosophy of organization with What is operational philosophy of organization with

regard to risk-taking, leadership, and concern for regard to risk-taking, leadership, and concern for overall results?overall results?

– Does organization regard human resources as costs Does organization regard human resources as costs or assets?or assets?


Reading 4.3Reading 4.3 Interpreting Results & Formulating Interpreting Results & Formulating

StrategiesStrategies

Reading 4.3Reading 4.3 Interpreting Results & Formulating Interpreting Results & Formulating

StrategiesStrategies• Tendency to try to identify an “ideal” cultureTendency to try to identify an “ideal” culture• Not clear than any one culture will be effective for Not clear than any one culture will be effective for

all organizationsall organizations• Strategy consists of interrelated functional Strategy consists of interrelated functional

components that must be carefully integrated to components that must be carefully integrated to form an effective whole:form an effective whole:

– Selection and staffingSelection and staffing– Organizational and human resource developmentOrganizational and human resource development– RewardsRewards

• Tendency to try to identify an “ideal” cultureTendency to try to identify an “ideal” culture• Not clear than any one culture will be effective for Not clear than any one culture will be effective for

all organizationsall organizations• Strategy consists of interrelated functional Strategy consists of interrelated functional

components that must be carefully integrated to components that must be carefully integrated to form an effective whole:form an effective whole:

– Selection and staffingSelection and staffing– Organizational and human resource developmentOrganizational and human resource development– RewardsRewards


Reading 4.3Reading 4.3

Analyzing Dysfunctional CulturesAnalyzing Dysfunctional CulturesReading 4.3Reading 4.3

Analyzing Dysfunctional CulturesAnalyzing Dysfunctional Cultures

• Which components of culture are misaligned?Which components of culture are misaligned?• What priorities should be assigned to bridging What priorities should be assigned to bridging

gaps between what culture is and what people feel gaps between what culture is and what people feel it should be?it should be?

• What resources are needed and how should they What resources are needed and how should they be used to change culture?be used to change culture?

• How should change effort be managed, and who How should change effort be managed, and who does what?does what?

• What role should HR strategy play in signaling, What role should HR strategy play in signaling, making, and reinforcing necessary changes?making, and reinforcing necessary changes?

• Which components of culture are misaligned?Which components of culture are misaligned?• What priorities should be assigned to bridging What priorities should be assigned to bridging

gaps between what culture is and what people feel gaps between what culture is and what people feel it should be?it should be?

• What resources are needed and how should they What resources are needed and how should they be used to change culture?be used to change culture?

• How should change effort be managed, and who How should change effort be managed, and who does what?does what?

• What role should HR strategy play in signaling, What role should HR strategy play in signaling, making, and reinforcing necessary changes?making, and reinforcing necessary changes?

Strategic Human Resource Management

Documents

competitive

hr roles

strategic

1 strategic

strategic

loop learning

2 understanding

2understanding