You are on page 1of 36

Human Resource Management

Table of Contents
Activity 01..........................................................................................2
1.1 Strategic Human Resource Management.................................2
1.2 The importance of Strategic Human Resource Management. . .3
1.3 The Framework of strategic Human Resource Management....4
1.3.1 Harvard Model....................................................................5
1.3.2 Ulrich Model........................................................................8
2.1 Analysing the Strategic Human Resource Process..................11
2.2 The roles in Strategic Human Resource Management............14
2.2.1 The strategic role of HR directors.....................................14
2.2.2 The strategic role of heads of HR functions......................14
2.2.3 The strategic role of HR business partners.......................14
2.2.4 The HR role of line managers...........................................14
2.2.5The strategic contribution of HR advisors or assistants....15
2.3 The development and implementation of human resource
Formulating HR strategy............................................................16
Implementing HR strategy.........................................................18
Activity 02........................................................................................19
Activity 03........................................................................................29

Activity 01
1.1 Strategic Human Resource Management
According to Armstrong (2011), when HR strategies become integrated with business
strategies and they support business achievements then the approach to these HR
strategies are called Strategic Human Resource Management. Many others such as
Boxall (1996) described Strategic Human Resource Management (SHRM) as the
interface between strategic management and Human resource management. Another
definition of SHRM portrays it as a process to link the workforce with the
organisation (Schuler and Jackson, 2007).
Emphasizing on strategic perspective, Baird and Meshoulam (1988) defined SHRM
as practices, strategies and systems that are formed and enacted in needs of the
organisation. Wright and MacMahan (1992) referred the idea to integrate HRM with
strategic management to achieve the goals of the organisation to be Strategic Human
Resource Management.
Strategic Human Resource Management is rather conceptual, depicting the integration
between HR and business strategies. It is a way of looking ahead in the future and
comprehending where HR should be achieving and how to attain those achievements.
It is a concept where personnel in HR act as the members of management team and
continuously support the organisation to achieve the business strategies of that

Key Features of Strategic Human Resource Management

The key aspects of Strategic Human Resource Management are:

There exists a visible connection between the policy and implementations of

HR and the strategic goals of the organisation as well as its environment.

There exists a systematic association between the interventions of HR

individuals in order to make them commonly supportive

Most of the responsibilities of Human Resource Management relinquish down

the line.

1.2 The importance of Strategic Human Resource


The essentialities of SHRM or Strategic Human Resource management cannot be

overstated in an organisation as human workforce is driving force for any existing
organisation. Therefore, organisations must formulate and execute well-planned
strategic human resource strategies in order to increase the productivity of the
workforce. A well-thought-out strategy will see better relationship between the
organisation and its workforce and mutual beneficial relationship between the
organisation and the host community.

One of the fundamental benefits of strategic human resource management is that aptly
formulated and executed strategic human resource strategy will assist the company to
achieve its objectives. As companys set objectives or targets to achieves, the
employees are the ones that ensure these goals are achieved. Human Resource
Management identifies the key areas of the organisation that need manpower and
HRM carries out the necessary duties and responsibilities to not only fill those gaps,
but to assist the organisation to attain its short-term and long-term goals and
consequently to attain its vision.
Strategic Human Resource management also ensures that appropriate strategies are
undertaken to ensure employees are motivated to achieve greater productivity for the
organisation. HRM takes certain approaches to motivate the employees. Some HR
offers incentives in the form of promotions or bonus pay. This motivates employees to
work hard in order to acquire those promised bonuses and promotions. Some HRM
organise awards to recognise employees for their hard work. Employees are presented
with awards in the form of money as well as other prizes to keep them motivated in
attaining organisational objectives. These awards take place monthly, quarterly or
yearly. This reward system works as a motivational factors for employees to
ultimately increase the productivity of the company.

1.3 The Framework of strategic Human Resource

For this chapter, Harvard framework and Ulrich Model for SHRM will be illustrated
and discussed in details

1.3.1 Harvard Model

Richard Walton in his 1985 article From Control to Commitment in the Workplace
published in that years Harvard Business Review proposed soft HRM, a new
approach to Human Resource Management. He argued that efficacious HRM is
dependent on the strategies that focus on attaining employee commitment rather than
controlling those employees.
Waltons Harvard Model proposed four categories in which all the labour relations
activities can be categorised. These categories are:

Employee Influence
Human Resource Flow
Reward Systems
Work Systems.

The activities that fall under these four categories must warrant the focus of the
management whether or not the workforce is unionised and regardless of management
style of the organisation. The focus must also be given in times of organisational rise
as well as decline. Employee Influence

The extent of which authority, control and leadership is delegated voluntarily by
management to the employees. According to the Walton, if management is to share
their influence it must create congruence between the employees and the
management. Walton stressed that this share of influence between management and
employees must be compatible with the motive and priorities of the employees. Human resource flow

According to Harvard model, Human Resource flow indicates the circulation of
people into the organisation, through the organisation and out of the organisation.
Indicating the relevant decisions of hiring, selecting, promoting and terminating
employees as well as the associated matters of career progression, individual
development, leadership training, fair treatment of employees, job securities etc.
Walton emphasized that HR managers must work with the relevant personnel to
ensure that the organisation has the correct flow of human resource in order to ensure
that it meets the strategic requirement of the organisation. Reward systems

According to this model, employees are to be rewarded for their work in the
organisation. These rewards are categorised into two distinct classes: extrinsic and
intrinsic rewards. The tangible pay and benefits are extrinsic rewards such as wages,
bonus pays, and holiday pays, profit sharing, employee healthcare, pension schemes
as well as flexibility at work. On the other hand, intrinsic rewards are intangible
rewards such as the satisfaction of completing work, the sense of achievement, the
sense of purpose, feeling involved, overcoming challenges etc. This model proposes
that employees are to be motivated through intrinsic and extrinsic rewards but the
final outcome must be in line with management philosophy, the overall strategy of the
organisation as well as other Human Resource Management policies. Work systems

These systems organise the employees, activities, information and technology in an
organisation in order to ensure that organisational operations are performed
coherently and effectively. The systems provide the blue print to allocate and manage
the resources of an organisation.

Strategies in these above areas must be formulated and implemented in a way that is
cohesive and cogent. Beer et al. (1984) argued that disjointed policies are the main
reasons for the failure of HR strategies along with uneven combination of past
practices and extemporaneous responses to external changes. They went on to say that
policies in these four areas must satisfy the stakeholders of the organisation, such as
the employees, the customers, the shareholders, the suppliers, the trade unions, the
government etc. Beer et al. (1984) placed employees at the centre of HR system and
they argued that employees are the most important stakeholders and they encouraged
managers to create an environment that will promote employee influence. Figure 1.3.1
shows the HR system they proposed.

Figure 1.3.1 HR system

This model further recommends managers to follow four Cs when they formulate
HRM policies. These are: Commitment, Competence, Compatibility (Congruence) and
Cost-effectiveness. Therefore, managers must consider how the policies will enhance
the employee commitment, how the organisation will attract, attain and retain the
competent people that are necessary and develop them, how compatibility will be
sustained between management and employees and finally how cost-effectiveness can
be achieved when it comes to employee wages, and salaries and employee turnover
while sustaining employee satisfaction.

Figure 1.3.2 Harvard Model of HRM (source: Beer et al., 1984)

The proposed Harvard model categorised as soft Human Resource Model because it
puts attention on the outcomes of employees, their well beings and their commitments
towards the organisation. This model aligns business performance and interests of
shareholders in the same line as the interests of unions and the interests of the
communities. The effectiveness of the organisation is viewed as the long-term
outcome of Human Resource Management. This model encourages employees to be
involved in the organisation as well as employee inputs are considered in
organisational decision-making. This model suggests that formulation of Human
Resource policies would enhance employee influence, however any influence will be
bound by the management philosophy and overall organisational strategy. Figure 1.3.2
illustrates the summary of the discussion.

1.3.2 Ulrich Model

David Ulrich, a pioneer in the field of Human Resource Management argued that HR
professionals act as strategic partner, administrative expert, change agent and
employee champion. These are shown in figure 1.3.2

Figure 1.3.2: Ulrich HR Model

These distinctive four roles and the responsibilities that are undertaken by these roles
are described below: HR Strategic Partner
Ulrich (1997) argued that one of the key roles of HR is to participate in formulating
business strategies rather than simply responding to strategy changes by senior
management. HR personnel are to participate in business decision-making and
aligning HR policy formulation and implementation in line with business strategies.
HR professionals are to be able to signify and implement the practices that will ensure
overall business success. According to Ulrich (1997) as strategic partner, HR
professionals act as an interface between the Human resources and business strategies. Administration Expert

Ulrich (1997) stated that HR professionals are to design and implement HR processes
for recruitment, training, development and promotion of employees as well as their
appraisal and reward management. HR professionals must to able to ensure the flow
of human resource throughout the organisation according to Ulrich (1997). These are
necessary responsibilities of HR professionals and Arthur (2001) and Ulrich (1997)

both argued that these responsibilities couldnt be neglected when HR professionals

shift their focus to strategic role. Employee Champion
HR professionals must safeguard the interests of employees. The needs of employees
must be heard and understood by HR professionals and attempts must be made to
meet those needs (Ulrich, 1997). HR professionals must ensure that employee
influence is increased throughout the organisation. Ulrich (1997) stated that HR
professionals must take steps to satisfy the interests of the employees but it is to be
bound by the interests of the organisation. Ehrlich (1997) argued that creating an
employee-friendly work environment is the primary role of an HR professional.
Ulrich (1998) and Csoka (1995) believe that through championing employee interests
HR professionals will increase the contribution and commitment of the employees. Change Agent

Transforming and managing changes fall under the job description of HR
professionals (Ulrich, 1997). Kesler (2000) emphasized HR professionals role of
change agent. According to him, despite the nature of implementing changes vary
from organisation to organisation, the purpose of HR professionals will be defeated if
they fail to define and deliver changes in the organisation. The role of HR
professionals is to make the organisation capable of implementing changes.

2.1 Analysing the Strategic Human Resource Process

Strategic Human Resource process does not have a defined set of steps. Different
organisation will have different steps. In this paper, we discuss a strategic Human
Resource Process with the following six steps:

Defining strategic direction

Designing Human Resource Management system
Arranging the complete workforce
Generating the required Human Resources
Investing Human Resource Development and Performance
Assessing and sustaining organisational competence and performance

The figure 2.1.1 illustrates the steps of the proposed model of Strategic Human
Resource Management

Figure 2.1.1: A model of SHRM (source: Naval Personnel Task Force, 2000)
The first three steps are concerned with planning and the later three steps are
concerned with implementation. In traditional strategic management, the planning
was top-down as the changes to the environment were not too frequent. However, in
modern times this has changed.

Strategic planning process became more agile as changes take place much more
frequently than before and changes are incorporated in planning continuously rather
than at a predetermined schedule. Traditionally planning was the reflection of changes
to the environment, however in modern times, companies plan to anticipate changes.
Moreover, top-down planning process has been replaced as inputs from employees at
the front line are considered more vigorously than before. And finally, front line
leadership in contemporary world drives the planning process.
The aftermath of strategic planning is to align the HRM policies and procedures in
order to attain the organisational goals and to determine the quality and quantity of
human resources required.
These remaining three processes are to implement those plans that will generate the
correct set of skills, support the development and performance of the workforce. The
very last process extends a mode that will evaluate and sustain the performance and
core competence of the organisation and the workforce of that organisation.
a) Defining strategic direction
Each organisation has its own mission, vision and objectives. This process aligns the
HR policies in line with those mission, vision, objectives and strategies. A successful
HR strategy will have business goals at the centre of it and successful companies
consider their Human Resource their primary source of competitive advantage. Those
companies are able to design HR policies, design training, development and reward
system in a way that will allow them to achieve the desired targets and objectives.
b) Designing the HRM system
In this stage, focus shifts to designing and selecting the plans, practices and policies of
Human Resources that will support strategic objectives of the organisation.

c) Planning the Complete workforce

The success of a company depends on its ability to select, hire and retain the right
workforce. In this stage, companies are to identify the necessary competencies of the

workforce that is required to attain the organisational objectives as well as designing

strategies to attain the workforce with those particular skills.
d) Generating The required Human Resources
In this stage, the designed strategies to attain the right workforce are executed.
Selecting, recruiting, training and allocating employees take place in this stage. A
successful implementation of this process will see the company equipped with the
required workforce with necessary skills.
e) Investing in Human Resource development and Performance
The investment of human resource development will yield better performance in the
short and in long run for any organisation. The development plan is to be designed in
a way that the outcome will complement the strategic objectives of the company.
f) Assessing and sustaining organisational competence and performance
Successful organisations have performance measures in place in order to determine
the effectiveness of the planning and implementation strategies. Any chances in
policies, processes and systems must be judged in order to identify their efficacy.
Performance measures such as balanced scorecard can assist organisations to
determine how effective is their HR strategic plan.

2.2 The roles in Strategic Human Resource Management

The various roles in SHRM are discussed as below:

2.2.1 The strategic role of HR directors

The strategic role of Human Resource directors is as follows

Designing and delivering Human Resource strategies that complement

organisational strategies. They ensure that both sets of strategies and mutually

Safeguarding the ethical aspects of Human Resource Management
Assuring that adapted strategic approach to Human Resource activities
complement the core business and adds value

2.2.2 The strategic role of heads of HR functions

The head of HR functions have similar strategic role to the HR directors. Their
responsibilities include formulating and deploying HR strategies to achieve business
goals. They focus on HR functions that will add value to the organisation, support the
overall operation and most important they are ethical.

2.2.3 The strategic role of HR business partners

The strategic role of HR business partners is to work with top management ensures
that strategies for the organisations are formulated in a way that is achievable through
the human resource of the organisation.

2.2.4 The HR role of line managers

The line-managers implement the strategies formulated by the above HR personnel.
Guest emphasized on the role of line managers in HR by saying, HRM is too
important to be left to personnel managers. If strategies are designed in a way that
will not interest the line managers, those strategies are not yield success for the
organisation. According to Guest and King (2004), better HR depended not so much
on better procedures but better implementation and ownership of implementation by

line managers. Purcell et al. (2003) agreed with the above statement, according to
them how policies and practices are implemented are much more important than just
simply formulating them. And line managers are the vital parts in implementing those
policies and practices. They communicate with front line employees and they
influence the employees in a way that will successfully implement those policies and
procedures. Therefore, it is the line managers who bring the HR policies to life.

2.2.5The strategic contribution of HR advisors or assistants

The strategic role of HR assistants and advisors is not to design HR policies rather
play an advisory role within the confinement of their speciality. They must understand
the business goal of an organisation in order to offer their services. They must also be
aware of the ethical implications of any proposal.

2.3 The development and implementation of human

resource strategies

2.3.1 Formulating HR strategy

When it comes to formulating strategies, Wright et al. (2004) proposes 2 approaches.
These are:
1) The inside-out approach
2) The outside-in approach
1) The inside-out approach
This approach works with existing HR functions. It identifies the connection of HR
functions to business and makes necessary adjustments to HR activities.
2) The outside-in approach
This approach starts with business, its customers, its competition and the issues faced
by that business. It then formulates HR strategies in order to add value to the business.
According to Wright et al. (2004) the formulation of HR strategies flow from the
business strategies that are highly influenced by the financial aspects, product and
market considerations. However, they argue that HR can contribute in forming
business strategies for instance determining business strategies that will comparative
with the current resources. This becomes more important when evolutionary process
is followed for strategy formulation.
Cipd (2005) proposed the following stages to develop HR strategy for organisations.
These are:

Defining business strategy

Analysing the context
Identifying business needs
Identifying key business issues
Developing the strategic framework
Defining specific HR strategies
Evaluating required HR capability and resources

a) Defining business Strategy

If HR professionals are active in the board, human resource considerations have
already been made but even if this is not the case, HR strategy must align with
business needs.

b) Analysing the context

HR professionals not only need to understand the business strategies, they also need
to under the context in which the strategies are formulated and implemented
indicating the comprehension of organisations strengths and weaknesses when it
comes to human resource of that organisation.
c) Identifying Business needs
HR strategies must address the business issues. For instance, if the strategy is to
produce certain products, HR professionals must identify the number of labours and
skills that are required to produce those products.
d) Identifying HR issues
The issues related to human resource that have direct implications must be identified
and addressed in HR strategy. For instance, improve reporting practice or better
e) Developing the strategic framework
Strategic framework defines the structure of strategic objectives, the associations
among those objectives and the priorities. The identified association will help to
specify mutually supporting processes.
f) Defining specific HR strategies
HR strategies are to be formulated to satisfy the business needs, explanation will be
accompanied explaining how the needs will be met and how resources will be

g) Evaluating HR capability and resources required

Assessment of current human resource will be made, their strengths and weaknesses
will be identified, their competencies will be listed and the skills gap will be signified
and their capabilities will be questioned.

2.3.2 Implementing HR strategy

Implementation or execution of HR strategies is much more important than
formulating those strategies (Gratton, 2000). However, the intention does not
automatically translate to action. And strategies that remain abstractions or aspirations
have no values. According to Kanter (1984), Human Resource strategies are to be
translated into HR policies that will act as guidelines when it comes to HR practices
enabling the strategies to be actionable. Strategies are to be transfigured into
attainable objectives and deliverables. And it is the job of line managers to implement
those activities to achieve the deliverables. Purcell et al. (2003) emphasized the role
of line managers as according to them line managers are the ones that bring strategies
to life. The implementation of the activities is responsibilities of the line managers.
Therefore, Purcell et al. (2003) suggested the involved of line managers in strategy
development. One another aspect is that while implementing strategies, focus must be
given the available resources. Questions are to be asked if the proposed strategies can
be implemented with the existing resources. And finally, the line managers are to
given adequate training, support and guidelines to implement those strategies in order
to ensure that desire outcomes are achieved.

Activity 02

Employees that are sent to a foreign countries by their employer are known as
expatriates. The country is called host country and the company is known as
parent company.
The Factors that determine the success of expatriates

Technical skills and competence

Relational skills
Being able to cope with different environment
Familys ability to adjust in the new environment

Reasons for expatriate failure:

Unable to cope with new environment

Familys inability to adjust in the new environment

Lack of skills or competence

Lack of ability to cope with larger responsibilities in a foreign territory

Other family difficulties and issues.

Activity 03
3.1 & 3.2 A report to discuss the range of HR strategies
and their application in an organisation

HR Strategies
HR strategies generally refer to the aspects of what an organisation intends to do with
its HRM policies and procedures and how integration to overall business strategies
takes place. The strategies reflect intentions that subsequently converted into actions
(Chesters, 2011). These strategies are the collective endeavour of the organisation.
Defining HR strategies, Richardson and Thompson (1999 wrote:
A strategy, whether it is an HR strategy or any other kind of management
strategy must have two key elements: there must be strategic objectives
(ie things the strategy is supposed to achieve), and there must be a plan of
action (ie the means by which it is proposed that the objectives will bemet).
Purcell (2001) emphasizes on the nature of continuity and emerging aspects of
strategy. According to them HR strategies are to be evolved overtime in response to
different changes. Pettigrew and Whipp (1991) argued that, far from being a
straightforward, rational phenomenon, is in fact interpreted by managers according to
their own frame of reference, their particular motivations and information.
Among many researches conducted by the academics, Armstrong and Baron (2002)
and Armstrong and Long (1994) concluded that a varity of HR strategies are practiced
in organisations. Different organisations define and implement different strategies in
order to achieve their goals.
The main three versions of HR strategies are

The HPWS Approach

Commitment vs. Control Strategies
The Value Matrix Approach

(a) The HPWS Approach

In his landmark study, Huselid (1995) proposed a framework known as Highperformance work system (HPWS). The framework radically changed the employeremployee relationship. This approach is a fundamental shift from control-oriented
approach, where employees at the lowest level perform simplified, standardized and
specialized tasks and they are tightly supervised and pay incentives is the only
motivational factor for them. In HPWS, the lowest level employees are responsible
for improving work methods and procedures as well as solving problems and are able
to coordinate their work with their peers.
In this approach they are self-managed to a larger extent. Pfeffer (1998) concluded
from a survey of 968 firms that there are clear evidence that this HR strategy
significantly reduce employee turnover and dramatically increase the productivity and
(b) Commitment vs Control Strategies
Control HRM strategy is generally characterized by a segmenting work into small
tasks and assigning them to individuals who can be held accountable for each tasks
(Walton, 1985). The aim of control approach is to reduce labour cost while improving
efficiency by forcing workforce to follow the defined rules and procedures
(Eisenhardt, 1985). In the contrary, commitment HRM approach is where managers
abandon their supervising roles in favour of facilitator role. Control is replaced by
trust and connections are established between personal goals of the employees and
organisational objectives. Commitment is established through the bond employees
develop with the organisation (Allen and Meyer, 1990).
In reality, the commitment strategy usually yields the best performance in an
organisation, while control strategy can be effective for organisations with a costbusiness strategy (Merchant, 1985; Snell, 1992; Burton, 2001; Wright, 2008).

Allen, N.J. and J.P. Meyer, (1990), The measurement and antecedents of affective,
continuance and normative commitment to the organization, Journal of Occupational
Psychology 63 (1), 1-18
Armstrong, M. (2011) Armstrongs Handbook of Human Resource Management Practice.
Kogan Page; 11th edition
Arthur, J .S. (2001). Seeking Equilibrium. Human Resource Executive. 15(7). Pages 34-38.
Arthur, J. B. (1992). The link between business strategy and industrial relations systems in
American steel minimills. Industrial & Labor Relations Review, 45, 488-506.
Beer, M., Spector, B., Lawrence, P. R., Mills, Q. D., and Walton, R. E. (1984) Managing
Human Assets. New York: Free Press.
Boxall, P F (1992) Strategic HRM: a beginning, a new theoretical direction, Human
Resource Management Journal, 2(3), pp 6179
Burton, M.D., 2001, The company they keep: founders models for organizing new firms, in:
Schoonhoven, Claudia Bird and E. Romanelli (eds.), The Entrepreneurship Dynamic: Origins
of Entrepreneurship and the Evolution of Industries, Stanford, CA: Stanford University Press.
Cipd (2005) HR Strategy [Online] Available at: [Accessed: 24/06/2015]
Csoka, Louis S. (1995) Rethinking Human Resources: A Research Report. New York. The
Conference Board.
Ehrlich, C. J. (1997). Human resource management: a changing script for a changing world.
(Special Issue on the Future of Human Resource Management) Human Resource
Management. 36(1), 85-90
Eisenhardt, K.M., (1985), Control: organizational and economic approaches, Management
Science 31, 134-149.
Huselid, M. A. (1995). The impact of human resource management practices on turnover,
productivity, and corporate financial performance. Academy of Management Journal, 38, 635673.
Merchant, K.A., (1985), Control in Business Organizations, New York: Ballinger, reprint
(original version: 1984, Boston: Pitman Publishing Inc.)

Pfeffer, Jeffrey. (1998). The Human Equation: Building Profits by Putting People First.
Boston: Harvard Business School Press.

Purcell, J, Kinnie, K, Hutchinson, Rayton, B and Swart, J (2003) People and Performance:
How people management impacts on organisational performance, CIPD, London
Schuler, R S and Jackson, S E (1987) Linking competitive strategies with human
resource management practices, Academy of Management Executive, 9(3), pp 20719
Snell, S.A. (1992) Control theory in strategic human resource management: the mediating
effect of administrative information, Academy of Management Journal 35 (2), 292-327.
Ulrich, D. (1997). Human Resource Champions: The Next Agenda for Adding Value and
Delivery Results. Harvard Business School Press
Walton, R.E., (1985), From control to commitment in the workplace, Harvard Business
Review March-April, 77-84.
Wright P. M. (2008) Human Resource Strategy [Online] Available at:
%20EPG-%20Final%20Online.pdf [Accessed: 24/06/2015]
Wright, P M and Snell, S A (1998) Towards a unifying framework for exploring fit and
flexibility in strategic human resource management, Academy of Management
Review, 23(4), pp 75672

Youndt, M. A., Snell, S. A., Dean, J. W., & Lepak, D. P. (1996). Human resource
management, manufacturing strategy, and firm performance. Academy of Management
Journal, 39, 836-867.