Chris Jarvis 1

HRM Strategy

Human Resource Strategy

Chris Jarvis 2

HRM Strategy

The Idea of Strategic HRM

No definitive, robust theory.

No agreement on meaning, factors, outcomes.

how is SHRM linked with organisational performance? difficult to establish firm relationships given intervening factors: structure, culture & wider environment

various typologies of business and associated HR strategies

Empirical studies tend to use large-scale questionnaire surveys (Storey) case-studies on SHRM.

Theoretical &empirical gaps between rhetoric and real experience - downsizing and redundancies etc.

Chris Jarvis 3

HRM Strategy

Stages in a Corporate Strategy Process

Organisation Organisation Mission and GoalsMission and Goals

(Define the business)(Define the business)

Strategic AnalysisStrategic Analysis(current situation, programmes and performance)(current situation, programmes and performance)

Strategic AnalysisStrategic Analysis(current situation, programmes and performance)(current situation, programmes and performance)

Strategic ChoiceStrategic Choice(bounded rationality, shaping the environment)(bounded rationality, shaping the environment)

Strategic ChoiceStrategic Choice(bounded rationality, shaping the environment)(bounded rationality, shaping the environment)

Strategy ImplementationStrategy Implementation(programmes, resources & responsibilities)(programmes, resources & responsibilities)

Strategy ImplementationStrategy Implementation(programmes, resources & responsibilities)(programmes, resources & responsibilities)

Rational, logical versus interpreted & political

Rational, logical versus interpreted & political

Chris Jarvis 4

HRM Strategy

Planning Levels

CEOCorporate

Level Corporate HQ

BusinessLevel

Aviation Heating Trucks Plastics Consultancy

FunctionalLevel Manufacturing

Marketing

Accounting

R & D

Chris Jarvis 5

HRM Strategy

Strategy Formulation

Managers analyse the situation & develop strategies to achieve the mission.

SWOT analysis: planning to identify

Organizational

Strengths: manufacturing ability, marketing skills

Weaknesses: high labor turnover, weak financials.

Environmental

Opportunities: new markets

Threats: economic recession, competitors

Long-term - 5+ yrs

Intermediate-term 1- 5 yrs. Corporate & business plans

Short-term - less than 1 yr. Functional plans?

Rolling cycle - amend plans constantly?

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HRM Strategy

Corporate strategydevelop a plan of policies, allocations, programmes to maximise long-run value

SWOT + STEEPLEInternal & external analysis

• Grow• Stabilize• Retrench• React/Panic

• Concentrate• Diversify• Globalize• Vertically Integrate• Down-size• Flexible firm

Standard Corporate Planning Picture

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HRM Strategy

Manifestation of Strategy and Policy

Maintenance

Standing plans (programmed decisions)

policies, rules, and standard operating procedures (SOP). general and specific guides to action. Programme arrangements and allocations.

Innovations

New initiatives, programmes and projects

What are th

ese for H

RM?

What are th

ese for H

RM?

Chris Jarvis 8

HRM Strategy

Schools of Strategy

Prescriptive Design School

Strategy (formation as a process of conception)

Planning (formal process)

Positioning (analytical process and techniques)

Descriptive Schools (metaphors) Enterpreneurial (visionary)

Cognitive (mental)

Learning (emergent, adaptation, incremental)

Power (a process of negotiation between interests)

Cultural (collective values, beliefs and behaviours)

Environmental (reactive, contingent)

Configuration (process of transformation from one state to another - management of change)

Source: Mintzberg, Ahlstrand, Lampel, 1998, Strategy Safari, Prentice Hall

Source: Mintzberg, Ahlstrand, Lampel, 1998, Strategy Safari, Prentice Hall

Chris Jarvis 9

HRM Strategy

Michael Porter -- Value-Added Chain Analysis

Technology development

Procurement

Employee management

Firm’s infrastructure

Inboundlogistics

Operations Outboundlogistics

Marketingand sales

Aftersales

service

SupportActivities

PrimaryActivities

SupportActivities

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HRM Strategy

Mintzberg on Strategy

Plan (intended) direction, guide, a course of action.

Pattern (realised) consistency in behaviour over time e.g. high end, low risk,

patterns evolved out of the past. What plan have we actually pursued over the last 5 years?

Position Locating our HRM in a position, unique and valuable, involving

a set of activities, X marks the spot.

Perspective look inwards and upwards to a grand vision of the enterprise.

The “theory” (mind-set) of the business. Less easy to change than position e.g. from bureaucracy to innovation.

Ploy (specific manoeuvres)

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HRM Strategy

Deliberate and emergent strategies

IntendedStrategy

IntendedStrategy

DeliberateStrategy

DeliberateStrategy

RealisedStrategy

RealisedStrategy

Unrealised Strategy

Unrealised Strategy

Source: Mintzberg, Ahlstrand, Lampel, 1998, Strategy Safari, Prentice Hall

Source: Mintzberg, Ahlstrand, Lampel, 1998, Strategy Safari, Prentice Hall

EmergentEmergent

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HRM Strategy

Form and Formation

Strategies have a form and they are formulated So what is the form of

HRM strategy of organisation X?

Steerage and Umbrellas Deliberate broad

outlines with details emerging en-route

Set direction but unknown waters, move quickly or slowly?

Focuses effortunity vs group-think & peripheral vision

Defines the organisationa shorthand but slogans may override complexity & distort reality

Provides consistencyProvide order, a cognitive structure to simplify, explain & facilitate action but creativity thrives on “loose” order

Set direction but unknown waters, move quickly or slowly?

Focuses effortunity vs group-think & peripheral vision

Defines the organisationa shorthand but slogans may override complexity & distort reality

Provides consistencyProvide order, a cognitive structure to simplify, explain & facilitate action but creativity thrives on “loose” order

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HRM Strategy

CEO and HR Director as strategists

Conceive the big idea? Let everyone else get on

with the details? But the job is not like this Mintzberg on managerial

roles

Interpersonal

figurehead

leader

Information Processing

liaison

monitor

disseminator

Spokesperson

Decision-making

initiator/changer

resource allocator

disturbance handler

negotiator(after H Mintzberg)

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HRM Strategy

Corporate-Level Strategies

Stick to the knitting - focus on core business Diversification

Related : similar areas - build upon existing divisions synergy & core competencies

Unrelated - portfolio business in new areas

No declared strategy? Corporate failure? Implicit strategy? Avoid resource-consuming activity Disdain for formal planning but reliance on consistency of

behaviour at all levels. No frills, non-bureaucratic organisation

No recipe to decrease flexibility, block learning & adaptation

Tension between control and discretionary freedom.

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HRM Strategy

International HRM Strategy

Global: HRM diversity for different conditions single, standard scheme across all countries? adaptation &acceptance of national differences? values, ethics in decision-making

Domestic: Common national schemes?

public sector institutions? Common professions/occupations

personnel system discretion for semi-autonomous divisions to take advantage of local circumstances?

Chris Jarvis 16

HRM Strategy

HRM Services and the Product Life Cycle

£/volume

Implications for

• Recruitment?• Rewards?• Training & Development?• Employee Relations?• Organisational development?

Profit

Loss

Sta

rt-u

p

Growth

Maturity

Develop or decline

Time

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HRM Strategy

Analysis of HR Services

Deliverables: capacity and capability Can we deliver? What do we deliver and how well?

Efficiency How well is the process offered, managed and controlled?

What are the transformation indicators and service quality ratios?

cost/unit, cost/recruit, performance/employee, cost/HR intervention?

Adaptability short + long term responses to pressure and change

Benchmarking efficiencies, processes & outputs investment - £, technical and human quality, systems, research and intelligence

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HRM Strategy

Common-sense propositions on quality

No focus on quality - lose market share and reputation.

Good reputation is easier to lose than regain.

People trust and become accustomed to favourites

They remember the bad. "I'll never go there again".

New loyalties with substitute suppliers.

Complacency breeds neglect.

It takes a major operational and psychological effort to maintain quality vigilance (entropy).

regain a lost reputation.

Common-sense either forgotten or only realised post hoc

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HRM Strategy

What is Quality?

....... a perception of class, excellence, a type of "referential" standard or (in definition) reflecting needs and expectations of customer.

Guru definitions :

product or service, nature or features reflecting capacity to satisfy express or implied statements of need (Deming)

conformance to requirements (Crosby)

fitness for purpose or use (Juran)

product/service characteristics as offered by design, marketing, manufacture, maintenance and service that meet customer expectations (Feigenbaum)

Oakland (1995) - perceivable, measurable move from mere satisfaction to "delight and reputation for excellence".

Reliability. “Next door swears by her 8-year old Zanussi!”

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HRM Strategy

Elements of a Quality Policy

organisation structure for quality: roles, responsibilities

how client/customer needs and perceptions will be identified

technical/economic resource allocation

QMS scheme & operation

how suppliers & supplies will be required to meet standards

prevention & zero defects/CQI approach vs. "inspect-out"

communication, knowledge, information & staff development

audit of QMS in operation

Partnership with staff, customers and suppliers.

Physical manifestation not just conceptual

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HRM Strategy

TQM - a Strategy and Discourse

an approach to improving the competitiveness, effectiveness and flexibility of a whole organisation..... a way of planning, organising and understanding each activity and it depends on each individual at each level. TQM is a way of ...... bringing everyone into the processes of improvement

Oakland 1995

a TQM programme requires re-evaluation of how organisational members address the quality of their work and the service processes.

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HRM Strategy

TQM underpinned by policy commitment

A culture and practice change strategy

Organisational renewal

Injection of energy

Staff encouraged in positive, initiative taking behaviours

Adopt a prevention and CQI ethic

Quality improvement teams/circles

Use of a variety of methods and techniques (tools)

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HRM Strategy

Kaizen: Continuous Quality Improvement (CQI)

critical view of organisational performance standards

continuously challenge & incrementally upgrade performance levels

contribution and role of HR team

attitude (ownership), involvement and team effort as the key to improvement

HR team - line manager relationships

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HRM Strategy

Classical functional, problem analysis cycle

Situation analysis

Problem definition

Objectives and resourcing

Solution development - options and best fit from DO NOTHING to DO EVERYTHING. Min/Max, optimistic/pessimistic, high/low budget etc.). Test models against objectives and constraints

Implementation analysis detailed planning for operational implementation. analysis for potential problems scheduling, work allocation, capacity management,

communicating, monitoring systems & overall coordination.

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HRM Strategy

Questions for Quality Strategy

Who are our direct and indirect clients Define characteristics, needs, requirements?

Design features of services? How do clients perceive these?

Bench-mark comparisons

Which features do not compete?

How can we delight beyond the basic specification?

Design improvement projects? Who, by when & at what cost?

Operational ability to bridge the gaps?

Information & monitoring systems?

Supply chain analysis - performance & communication?

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HRM Strategy

Specifying HR Quality

Essential contract for supply ensuring delivered quality in a contract of service. Implications of failure to draw up a clear specification?

Design quality dimensions include: Features, performance, delivery, cost, reliability,

durability, serviceability, response, aesthetics, reputation.

Conformance measurement: Degree to which service design specification is met

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HRM Strategy

The parties & organisational level?

Detailed specification what best practice will be (product & process definition)

contract volume, milestones, stage deliverables?

CSFs/CQFs for inputs, processes, outputs?

work done to plan, in the defined ways? QA/QC methods? inspection, testing and monitoring

staged prices and conditions? variation orders vs. extras

penalties?

audit trail

client liaison

ISO 9000 Certification for HR Services?

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HRM Strategy

Clauses of ISO 9000

4.14.24.34.44.54.64.74.84.94.104.114.124.134.144.154.164.174.184.194.20

ManagementQuality PlansContractsControlling design - not ISO 9002Controls using documents and dataPurchasing and supplyCustomer-supplied equipmentProduct identification and tracingProcess controlsInspection/testingMeasuring and test equipmentIdentify status of inspected goodsControl over non-conforming productsCorrective and preventative actionHandling, storage, packaging, preserving and deliveryRecords for qualityInternal auditsTrainingServicingUsing Statistics

Costs of initia

ting and maintaining the system?

Costs of initia

ting and maintaining the system?

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HRM Strategy

Leadership (weighting 125 points)

Strategic Planning (85)

Customer & Market Focus (85)

Information and Analysis (85)

Human Resource Focus (85)

Process Management (85)

Business Results (450)

USA Baldrige National Quality Award (1999)

Criteria forPerformanceExcellence

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HRM Strategy

References

Gratton L, Hope-Hailey V, Stiles P. and Truss C, (1999) Strategic HRM: Corporate Rhetoric and Human Reality, OUP.

Huselid M, (1995) The Impact of Human Resource Management Practices on Turnover, Productivity and Corporate Financial Performance . Academy of Management Journal, Vol. 38, No. 3, pp. 635-672.

Kamoche K. (1994) A Critique and a Proposed Reformulation of Strategic HRM . HRM Journal, Vol. 4, No. 4, pp.29-43.

Miles R and Snow C. (1984) Designing Strategic Human Resources Systems, Organizational Dynamics, Summer: 36-52.

Swiercz P. (1995) Strategic HRM, Human Resource Planning, 18,3, p.53-.

Truss C. (2001 — forthcoming) Complexities and Controversies in Linking HRM with Organisational Outcomes . Journal of Management Studies.

Truss C. and Gratton L. (1994) Strategic HRM: A Conceptual Approach . International Journal of HRM, 5,3, pp.663-686.

Truss C, Gratton L, Hope-Hailey V, McGovern P, & Stiles P. (1997) Soft & Hard Models of HRM: A Reappraisal . Journal of Management Studies, 34,1, pp.53-73.

Wright, P. and McMahan, G. (1992) Theoretical Perspectives for Strategic HRM , Journal of Management, Vol. 18, No. 2, pp. 295-320.