SHR016-2

People Resourcing and

Development

Week 2 – Human Resource

Management Strategy
 Lecture Content

• Models of the employment relationship: Personnel

management
• Definition of strategic human resource management
• What is strategy?
• Evaluation of strategy
• Perspectives on strategic human resource management
• The universalistic perspective
• The contingency perspective
• The configurational perspective
 Models of the employment
relationship: Personnel
management
Origins of Strategic HRM in personnel management – personnel
managers as service providers within the organisation:
• Recruitment and selection
• Payroll and pensions
• Welfare schemes
• Communications
• Dismissals and redundancies
• Staff records (absenteeism, sickness, turnover etc.)

 Reactive, routine work, though important

 Advisors

…to line managers:

• on effects of change
• on implementing new legislation

 Ad hoc internal consultancy

 Regulators

Formulation of:
• Rules on personnel policy
• Staff manuals
• Grievance procedures
• Disciplinary procedures
• Consultation and negotiation (collective bargaining)
with unions
 Change makers

But need increasingly to integrate personnel policy with business

needs:
• Proactive
• Emphasis on organisational culture and motivation
• Human resources input at board level (directors of HRM)
• New techniques:
Total quality management
Performance-related pay
Flexibility
Strategic ‘fit’ between HR and Business Strategy
 At this point, ‘personnel management’ becomes ‘human resource
management’
 Definition of strategic human resource
management

Strategic human resource management is “the choice,

alignment, and integration of an organisation’s HRM system so
that it’s human capital resources most effectively contribute to
strategic business objectives” (Cascio, 2015: 423).

SHRM is at the interface between between HRM and strategic

management (Boxall, 1996).

HR policies should be integrated into the business strategy

(Storey, 2001)
 What is strategy?

Strategy is the approach selected to achieve specified aims in the

future.
– It is forward looking
– It explains how goals can be reached
– Guide purposeful action to deliver results

However, in practice the formation of strategy may not be as

rational and linear as some researchers describe it.
Strategy may not always be easy to discern, the processes of
decision making may be implicit, incremental, negotiated and
compromised (Mabey et al., 1998: 74).
 Evaluation of strategy

Research on business ‘strategy’ reveals variety of meanings:

– Ad hoc – make it up as you go along
– Post-hoc rationalisation – after the event, the term
strategy is used so managers sound good, competent.
– Processual – no single plan, isolated and above others –
strategy evolves or emerges in action
– ‘No one knows anything’ – film and creative industries, but
also applied across fast changing sectors, e.g. ICT
– Break-up of large organisations – strategy becomes more
diffused
– HRM has a very simple ‘plan for future’ view of strategy
Perspectives on strategic HRM

» The universalistic perspective

» The contingency perspective

» The configurational perspective

 The Universalistic perspective

• This perspective suggests that there is a set of HR practices

that work in all organisations, regardless of context and that all
firms should use them (Pfeffer, 1998).

• There is a universal relationship between ‘best’ practices and

firm or organisational performance.

• Examples of best practices developed by Pfeffer (1998):

employment security, selective hiring, self-managed teams,
high compensation contingent on performance, training to
provide a skilled and motivated workforce, reduction of status
differentials, and sharing information.
 The Contingency perspective

• The impact of HR practices on organisational performance depends

on their “fit” or alignment with a firm’s internal and external
contingencies.

• Organisations need to focus on designing HR systems that develop

employee skills, knowledge and motivation so that employees behave
in ways aligned with organisational goals.

• To be effective, an organisation’s HR policies must be consistent with

other aspects of the organisation’s strategy.

• Under what circumstances does HRM practices have an impact on

organisational performance? (Guest, 2011).
 The Configurational
perspective

• This perspective holds that it is not sufficient to address the

vertical fit of HR practices with contingencies that are both
internal and external to the organisation. The congruence of
HR practices within the system is equally important.

• It is the combination of HR practices rather than any single

practice that drives organisational performance.
 References

• Armstrong, M. (2017) Armstrong’s Handbook of

Human Resource Management Practice (14th
ed). London, Kogan Page. 
 This Week

• Read the Week 2 Session Plan.

• Engage in Online Activity (final slide).
• Participate in the Interactive Activities in the
Seminar.
• Engage in the Individual Activities during the
week.
 Next Week

• Next Week our topic will be:

Strategic Resourcing and Labour Markets

• To Prepare:
Read the Session Plan for Week 3 on BREO,
attend the Seminar and engage in the activities.
 Activity

Please read the Peabody Trust Case Study, located in the folder Your
study programme, Week 2
Based on the case study, please complete the following tasks & share
on the Discussion Board – Week 2:
• Identify and assess the HR strategy used by the Peabody Trust.
• Discuss the effectiveness of the strategy identified and explain how
the strategy could add value to the organisation.
• Make recommendation to the chief executive of the Peabody Trust
on how to further improve their HR strategy.