unit 1_intro - definition and purpose of smhr
TRANSCRIPT
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Strategic Human Resource
Management
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Introduction
In the past, people were viewed in 3different ways:
1. As a cost
2. As a resource
3. As an asset
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3
Defining Human Resource
Management (1)
HRM is a strategic and coherent approachto the management of an organisationsmost valued assets: the people workingthere who individually and collectivelycontribute to the achievement of its
objectives(Armstrong, 2006,)
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Introduction (Cont)
But for now, the organisation view thepeople as a central to the successfulperformance of the organisation
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The Changing Business
Environment
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The Changing Business Environment
Throughout the years, human resourcebecome the organisationsmost importantasset:
Strategic Management People=Finance and Capital Resources
(SHRM is link with the success and failure of anorganisation)
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The Changing Business Environment
(Cont)
In the modern time, SHRM becomes themost powerful competitive advantage ofone organisation.
Organisations concentrate more intoIntellectual assets to compete with theothers.
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The Changing Business Environment
(Cont)
Some problematic to control and access thatknowledge:
1. Insecure and flexible work
2. The notion of organisation boundaries issometimes less clear.
3. Employees long-term relationship with
organisation, the normal route to developingand securing access to expertise.
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The Changing Business Environment
(Cont)
Personnel Management includes anoperational, system-based approachto managing people.
HR policies, leadership style, andemployees reaction should be takencare at the same time.
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The Changing Business Environment
(Cont)
3 challenges facing organisations thatmust be met are:
1. Managing intangible assets
2. Managing strategic change
3. Innovation in terms of what organisations
produce by way of goods and services, and the
way they approach the task.
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The Changing Business Environment
(Cont)
New skills are needed to engage allorganisations resources:
1. Tacit knowledge
2. Recognising core competencies and
attending to stakeholder views
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The Changing Business Environment
(Cont)
Tacit knowledge includes:
1. Action-centered skillsartforms
2. Learning from errorsreactions of people,anticipation
3. Learning from interaction with otherscustomer needs and expectations,
contextualisation, sensing expectations4. Learning from work routinesquickest
pathways, sensing success
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The Changing Business Environment
(Cont)
Core Competencies are the abilities such
as reasoning, analytical skill, problem-solving, etc
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Linking People Management and Strategic
Management
An organisationsresponse to external challenge
can come from a cascade of environmental
triggers.
Active business strategy and SHRM response canbe found out by classifying strategy in order to
gain an overview.
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Linking people management and
strategic management
There are 2 main ways to classify
strategy:1. Using life cycle model of the product or
service
2. In terms of single, diversified or multiple
products or services
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The life cycle model
Product andService
HR function
Introduction Product enters themarket
Attracting qualifiedemployees to the company
Growth Sales of productincrease quickly
Reach the right number ofqualified employees;develop the managementprocess within a company
Maturity Get the peak of itssales
Minimise layoffs byreorganising shift job
Decline Sales and profits fall Reductions and reallocationthe workforce
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Single, diversified or multiple products
modelHR strategy Single product in one
company
Multiple products globally
Selection Functional orientation usingspecialist job criteria
Functional and generalistorientation using systematicand objective criteria
Appraisal Subjective and measuredby personal contact
Objective, based onmultiple organisationalgoals
Rewards Unsystematic, allocated
perhaps paternalistically
Based on multiple, planned
goals. Some topmanagement discretion
Development Largely through jobexperience. Usually a single
function focus
Formal and systematic,across divisions and
subsidiaries
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Linking People Management and Strategic
Management
These models above help us to:1. Establish the links between SHRM and
corporate strategy.
2. Indicate the SHRM levers that canbring about effective and appropriateemployee behaviour.
3. Develop the role of SHRM inunderpinning change depending oncircumtances.
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UK VERSIONS OF THE HRM MODEL
British academics
David Guest (1987, 1989a, 1989b 1991)has taken the Harvard model and
developed it further by defining four
policy goals which he believes can be usedas testable propositions:
1. Strategic integration ability of the
organization to integrate HRM issues intoits strategic plans
S O S O O
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2. High commitment a behavioural
commitment to pursue agreed goals and
attitudinal commitment reflected in a strongidentification with the enterprise
3. High quality this refers to all aspects of
managerial behaviour which bear directly on
the quality of goods and services provided.
UK VERSIONS OF THE HRM MODEL
British academics (cont.)
UK VERSIONS OF THE HRM MODEL
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4.
Flexibility
functional flexibility and theexistence of an adaptable organization
structure with the capacity to manage
innovation.
UK VERSIONS OF THE HRM MODEL
British academics (cont.)
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Guest (1989a) believes that the driving force
behind HRM is, the pursuit of competitive
advantagein the market-place through:
Provision of high-quality goods and services,
Competitive pricing linked to high productivity,
The capacity swiftly to innovate and manage
change in response in the market-place or to
breakthroughs in R&D.
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He considers that HRM values are:
Unitarist to the extent that they assume no
underlying and inevitable differences of interest
between management and workers.
Individualistic in that they emphasize the
individual-organization linkage in preference to
operating through group and representative
systems.
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Guest has asserted (1989b) that HRM has been
talked up and its impact has been on
attitudes rather than behaviour. He stated
(1989a) that the term runs the risk of
becoming a catch-all phrase, reflecting general
intentions but devoid of specific meaning.
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Approaches to The Strategic Management
of People
The 3 models of SHRM:
1. The best practice view.
2. The best fit view.
3. The resource-base approach.
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The Best Practice View
It is based on a single set or bundle of HR
policiesand practices.
The company will follow these policies and
practices as its standard in any prevailing
business circumstances.
Using 18 key practices (see p.14) in case study
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The Best Practice View
The criticism of this view is came from:
1. Cost of implementation.
2. Tensions between the need for production and cost
minimisation, and issues of flexibility, creativity and
skills enhancement.
3. The restricted applicability of the model mainly to the
western private sector (because of legal and economical
choice)
4. The doubtful ability to assess the impact of HR interestsusing financial measures.
5. The belief that it is easier to establishand sustain the
model on the green-field sites.
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The Best Fit View
This model is based on the idea that HR
strategies flow from business strategy.
Much of what was outlined earlier in this unit
can be related to the bestfitmodel
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The Best Fit View
The success of a best fit model depends on its
ability to:
1. Integrate into the organisations strategic
plans.
2. Provide horizontal or vertical integration of
the key policy areas.
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The Best Fit View
How far the organisational objectives will be metis dependent on:
1. The level of fit between the business strategy
and the environment at one level.
2. The HR strategy and business strategy at a
second level.
3. The internal coherence of the policy.
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The Best Fit View
Best fit can determine whether a hard or asoftapproach.
A hard may include outsourcing, enhanced
productivity, and emphasis on tightercontracting.
A soft relies on involvement, partnership andcommunication and sharing.
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Best Fit Integration
It is an open template to interpret the
environment in which business operates and to
evaluate the integrated reaction or responses
that are necessary.
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Best Fit Integration (Cont)
The SHRM role is focus not on external
relationships but on how staff and their
abilities are used
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Best Fit Integration (Cont)
According to Storey (1995, p.4-5), a sustainedcompetitive advantage derives from internal
resources, which must:
1. Add value.
2. Be unique or rare.
3. Be difficult to imitate.
4. Be non-substitutable, for example, by technology.
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Resource-based approach
This third model of SHRM is a bottom-up
view.
This view focuses on the organisation and
its potential, and develops ways to
exploit or enhance the availableresources.
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According to Mueller (1998), the resource-
based view includes 5 proposition about
the creation of strategic assets or
capabilities.
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Proposition 1
Assets is only developed in slow,
incremental and uncertain ways, not in
any linear or planned way.
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Proposition 2
Assets require broad-based commitment
over a lengthy period, not a single
initiative.
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Proposition 3
The evolutionary view stresses the
importance of routinising skill formation
activities.
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Proposition 4
This view concerns the development of
cultures that will allow potential to be
used and developed.
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Proposition 5
Barriers to imitation and loss of their
resources, both in patents, copyright and
so on, and their people resources should
need to build.
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The end of Unit 1