Management, Organizational Policies and Practices Lecture 5 12/7/2015Lecture 2/MS (HRM) class

Management, Organizational Policies and Practices

Lecture 5

04/21/23 Lecture 2/MS (HRM) class

Recap Lecture 4

Resource Based View Threshold Resources & Competencies Core Resources & Competencies Robustness of Strategic Capability Value Chain Outsourcing Qualitative and Quantitative Analysis


Lecture 5

Dr. Amna YousafPhD (HRM)

University of Twente, the Netherlands

Strategic Human Resource Management


The Skeleton

Introducing SHRM Elements of HR Critical HR goals Strategic Tensions Best Fit/Best Practices Critique of the views

Management, Organizational Policies and Practices

Lecture 5

04/21/23


Defining…

HRM is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business


HR: Who is Managed? Covering all workforce groups All employee cadres including

managers thesmsevles Difference in way of treatment “ high

trust” manner! All kinds of employment relations

(e.g mananement-worker relations, management-union relations)


Who is Involved? Specialist managers

Designing selection process Formation of policies and laws such as EEO Training needs analyses Formulation of performance incentive plans

Line managers Stay in the loop


Management Styles Variety depending on nature of contract

Permanent or contractual Part time or full time With in and between firm differences Ultimate goal is competitive advantage

Overall aim Design of work systems around firm’s strategy Deployment of workers around technogoloies and

production processes Other aspects of employee’s life cycle


Critical HR Goals (1/3)

Labor productivity/cost effectiveness Investment in HR resources Formal feedback/appraisal systems Training and selective selection

programs Firm size/economies of scale


Critical HR Goals (2/3) Organizational felxibility

Managing change – capability to change

Short Run agiligy (adjusting the price of exisiting labour) Functional flexibility Numerical flexibility

Long Run agility (meeting long term targets such as change in technology or market demands)

Tension between the two – contractuals v/s permanent staff e.g.


Critical HR Goals (3/3) Social legitimacy

Government regulations Protection of natural environment Occupational safety and health EEO Tripple bottom line ( financial, environmental and

social) Incentives as best comapnies to work for Social Accountability 8000 – certified auditors or

accredited audit agency Consult employees and unions for complaints and

non compliance of HR practices


Goals: At a Close (1/5) Getting the Best Employees

Staffing – Workforce Planning Staffing – Specifying Jobs & Roles Staffing – Recruiting Staffing – Outsourcing (having services and

functions performed by non-employees) Staffing – Screening Applicants Staffing – Selecting (Hiring) New Employees


Goals: At a Close (2/5) Employee’s due Benefits & Compensation

Training Employees

Career Development Employee Orientation Leadership development Management Development Personal Development Supervisional Development


Goals: At a Close (3/5)

Ensuring Compliance to Regulations Personnel Policies & Records Employee Laws, Topics & Issues Ethics – Practical Toolkit To comply all Statutory Requirements

under Labour Laws


Goals: At a Close (4/5) Ensuring Safe Work Environments

Diversity Management Dealing with Drugs at the Work Place Employee Assistance Programs Ergonomics : Safe facilities at the Work Place Personal Wellness Preventing Violence at the Work Place Ensuring Safety at the Work Place Supporting Spirituality at the Work Place


Goals: At a Close (5/5)

Sustaining High-Performing Employees Employee Performance Management Group Performance Management Interpersonal Skills Personal Productivity Retaining Employees


Strategic Tensions in HR (1/3) Labor scarcity (Health Care and IT)

Elimination of forced labor Globalization Mobility of labor Survival of well resourced organizations Small firms under pressures

04/21/23 Lecture 1/SHRM

Strategic Tensions in HR (2/3) Labor Motivation

Employment relationship not completely defined.

Conflicts can arise Unitarist approach – improve cooperation Plurist approach - improve intrinsic and

extrinsic incentives Conflicts can be detrimental to worker

motivation and trust


Strategic Tensions in HR (3/3)

Labour management Dependanle and disposable workers! Flexibility pressures Emregence of core/periphery models Clever balance between short term and

long term demands required

Boxall and Purcell chapter three 21

Strategic HRM: the Best-Fit School

In strategic HRM, there is a fundamental debate over how HRM is, and should, be linked to wider business strategy.

To many scholars, it seems obvious that strategic HRM rests on a contingency position: firms fit their HRM to their particular strategies and environment and are wise to do so (the best-fit school).


Strategic HRM: the Best-Fit School ...

HR stratgy should be context specific and argued that situational factors inevitably affected choices in HRM, including Environment Industry Government policies Work Systems evolve accordingly

Small business (SME’s): limited HR function Large companies (corporates): HR

departments at sopisticated level

Major Factors Affecting management choices in HR strategy

Economic & Technological factors, inside & outside the

firm:•Choice of sector & competitivestrategy

•Nature of the dominant productive technology

• • Size & structure of the firm & stage in the industry life cycle

•Quality of business capital

( well funded or under- capitalize?)

•General economic conditions

Management Choices in HR strategy

Social & Political factors, inside & outside the form:

•Degree of labor scarcity

•Expectations & power of employees( including union strategies, where these exist)

•Managerial capabilities & politics

•Labor laws & social norms

•General educational levels & vocational training systems

Linking HR Practices to Competitive Strategy Internal fit

Between HR practices External fit

Matching HR strategy to competitive strategy of business unit

Selected HRM implications of Miles & Snow’s competitive types

Organizational/

Managerial Characterist

ics

Defenders Prospectors Analysers

Competitive Strategies

Limited, stable product line. Growth through penetration. Emphasis on efficiency

Changing Product lines. Growth through innovation & market

Stable & changing Product lines.

Staffing & Development Strategies

Emphasis on internal training & development (‘make’)

Emphasis on Recruitment (‘buy’)

Mixed Approaches( both ‘make’ and ‘Buy’ as needed)

Performance Appraisal

Process Oriented and linked to training needs analysis

Results oriented and linked to rewards

Mostly process Oriented

Pay Policies Focused on Internal equity

Focused on external competitiveness

Concerned with both internal equity & externel competitiveness

Examples

A study of 200 Spanish firms: Innovative firms follow employee participation, training and development opportunities, better wages, hiring of creative, innovative people, given greater powers and discretion to employees, reduced controls, extensive trainings, providing more resources for experimentation.

Internal Fit Complementry fit (single employee fit)

Use of expensive selection processes should be accompanied by training programs and retention programs

Consistecy (across employees) fit such as standarized employment and work

conditions for same occupational group such as clerks.

Temporal consistecy employee A should be treated the same way

today as yesterday by the employer. Reversal of employer behavior can be demotivating

Internal Fit

Avoid costly dupilcation of practices (structured interviewing or assesment center taking 5-6 tests or over designed selection systems where extra ‘ hurdles’ add no value)

Avoid deadly combinations (heavy training on teamwork but individualistic rewards)

Critique External Fit: Multiple fits needed – Plural HR

objectives Fit between HR strategy and competitive

goals BUT What about employee needs? – if ignored,

motivational problems can arise Legitimacy needs, social needs and rights

of employees ( max work hrs, minimum wages, safety laws etc).

A specific HR strategy can not be applied to ‘all rounder’ firms

Internal Fit - Critique Such kinds of fits not practical: high

commitment work systems but at same time organizational flexibility pressures force organziations for layoffs -job insecurity which erode commitment

Configurational thinking in HR strategy: two different scenarios

Firm’s Choice of Competitive

strategy

Nature of productive technology in the

sector

Implications for HR Strategy

Cost Leadership

High technology or highly capital- intensive; often low staff numbers but key specialist skills very important to operations

HR strategy should be based on developing & motivating workers to maximize the benefits of the technology (which will help to achieve the cost leadership strategy). Prediction: high-wage/high skill models of labor management are cost effective. Investments in creating ‘ high performance work systems’ are likely to be justified

Cost Leadership

Low-Technology, often highly labor intensive operations & large scale

HR strategy is dominated by the need to survive in an environment where wages are in competition.

Prediction: firm seek out low wage sites where productivity is high and quality is acceptable. Firms will pay the going rate in the local labour market but avoid paying premium conditions or over investing in training.

Internal Fit - Critique So both firms have same competetive

stragty but different nature of busines and production process wich drives different HR stratgy for both. Best fit theory is too thin and overly simple!

It is difficult to attain consistency keeping in view the uncertaity a firm faces – both temporal and among employees

Linking HR practices to competitive strategy (Schuler and Jackson 1987)

33

Desired competitive strategy

Required employee skills and behaviours

Supportive HR practices

HR outcomes


Strategic HRM: the Best-Practice School

There are HR practices which are best for firms regardless of context ( the best-practice or universalist school).

Some practices to be considered sensible or cost-effective for everyone in certain micro aspects of HRM (e.g. in employee selection and appraisal)

Best Practice School Enhance employee abilities through AMO Structured interviews (carefully designed

around job aspects) better over unstructured Performance appraisal tied to objective

results (profits ROI) better over Input based performance apprasial (such as measures of timekeeping)

High pay but lesser pay inequity to encourage teamworking

Promotion from within, high wages, participation and empowerment, teams, job redesign etc

Critique Best Practice

Difference in opinion as to what constitutes best practice ( 4-5 or a dozen)

Beyond a certain amount of uniformity, managers start thinking about diversity in HRP

What if a practice is good for corporate goals but not for employees such as layoffs – can we still call it a best practice?

Critique Best Practice Labor (government) laws, cultural

practices vary from country to country – union powers vary? Can best practiecs be universalistic?

Sectoral context: e.g. innovative firms make use of more job rotation, team working, TQM compared to low tech firms.

Organziational structure: Firm size; introductrion of new technology etc plays major role – such firms use more best practices.

Critique Best Practice Best practices more relevant for sectors

which emphasize quality, high tech where firms need motivated and skilled employees and pay them higher in return. Even in high tech sectors low skilled workers dont benefit as they are paid less and best practices not for them ( labor market very loose for them).

Employers will only invest in employees when they wil be sure of returns –to stay cost effective

Documents

Management, Organizational Policies and Practices Lecture 5 12/7/2015Lecture 2/MS (HRM) class