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www.company.com Strategic human resource management Mandy Waber & Ana Grethe Company LOGO

Presentation SHRM

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Page 1: Presentation SHRM

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Strategic human resource management

Mandy Waber & Ana Grethe

Company LOGO

Page 2: Presentation SHRM

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Agenda• Problem statement• Modes of theorizing in SHRM• Strategic human capital management in SME’s• HR and the resource based view of the firm• Case• Conclusion

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Problem statement

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How can HRM be a contribution to the strategic management of

operations?

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Modes of theorizing in strategic human resource management

Tests of universalistic, contingency, and configurational performance predictions

Which are the 3 modes of theorizing in SHRM?• Universalistic perspective• Contingency perspective• Configurational perspective

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Universalistic perspective

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“ Best practices” approach, some HR practices are always better than others

It requires 2 steps:-Important strategic HR practices must be identified-Arguments that relate individual practices to organizational performance

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• Internal career opportunities• Formal training systems• Appraisal measures• Profit sharing• Employment security• Voice mechanisms• Job definition

What are the 7 strategic HR practices?

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Contingency perspective

• Organisations HR policies must be consistent with other aspects of the organization (vertical fit).

• The HR practices must interact with the firm’s strategy to result in organizational performance.

• The relationship between the use of a specific employment practice and organizational performance is contingent on organization’s strategy.

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What are the 3 ideal strategic profiles?

• Prospectors: highly innovative, experimentation and not efficient.

• Analyzers: Moderately innovative, not initiative of change, but followers.

• Defenders: Rarely innovative, narrow and stable product domain, efficient production and little R&D.

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Configurational perspective

• Based on holistic principle of inquiry.• Assumption of equifinality.• Equifinality: multiple unique configurations of

relevant factors that can result in maximum performance.

• How is a pattern of multiple independent variables related to a dependent variable? The combination of HR practices has a bigger effect than the sum of individual practices

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Configurational perspective

• In order to be effective, companies need both horizontal and vertical fit.

• Vertical fit: Congruence of the HR system with other organizational characterstics (strategy)

• Horizontal fit: Internal consistency of the organization’s HR policies and practices.

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Characteristics of employment systems

Market-type system Internal system

Can a company also use a hybrid structure, as combination of the systems just mentioned?

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Characteristics of employment systems

Market-type system Internal system

-Hiring outside organization-No formal training-Little socialization-Results-oriented measures-Use of profit sharing-Little employment security-Little voice for employees-No clear job definitions

-Hiring inside organization-Formal training provided- Great amount of socialization-Behavior-oriented results- Little use of profit sharing- much employment security-Employees participate in decision making-Jobs very tightly defined

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Market-type system vs. internal system, which one is better?

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Advantages market-type system

Advantages internal system

-You can look for talented people outside your organization.-People from outside organization can bring new ideas-Results-oriented measures leads to good results-The use of profit sharing reduces the agency problem

-Employees feel secure-Employees feel that they have a say in the company-Employees know that they can get promotions, which leads to more motivation-Behavior-oriented results leaves room for failure, and therefore also innovation

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Human resources and the resource based view of the firm

The resource based view

is another way for HRM

to justify its position in

an organization.

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Value proposition of HRM

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• HRM is definitely valuable. • Human capital advantage refers to talented and motivated

employees, which are valuable, and human resource practices support that.

• People are becoming more and more important in organizations, especially because of the knowledge and expertise people have.

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• Off course every company has human resources, so in that way HRM is not heterogenously divided.

• However, the different HR practices companies use are heterogeneously divided.

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• Human resource management on its own is not immobile.

• However a good system of human resource practices, which is well aligned with the human capital pool and the whole organization, is often difficult to copy, which may be based on 3 things:

- The role of history- Causal ambiguity- Social complexity

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Can good human resource practices create a sustainable competitive advantage?

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Areas in HRM that can create a sustainable competitive advantage

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Empirical SHRM research

• HR practices can have a profound impact on accounting and market-based measures of performance (Huselid, 1995).

• HR practices are related to labor productivity (Koch and McGrath (1996).

• The value and uniqueness of skills are associated with different types of HR systems within the same organization (Lepak and Snell 1999)

• Most emperical research applying the RBV has failed to test its fundamental hypotheses, it only assesses 2 variables: HR practices and performance

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The convergence of RBV and SHRM

Potential bridges between HR and strategy:

• Core competencies• Dynamic capabilities• Knowledge-based views of the firm Potential

bridges between HR and strategy:

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Core competencies as a bridge between HR and strategy

• Core competences and skills are inseperable of the employees who comprise the competences.

• The behavioral aspects of employees and the supportive nature of people management systems to development/maintenance of the competency.

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Dynamic capabilities as a bridge between HR and strategy

• Dynamic capabilities are resources that can match and create market change.

• Dynamic capabilities require that organizations establish processes that enable them to chnage their routines, services, products and even markets.

• Human resource practice can create flexibility and adaptability to the market.

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Knowledge-based theories as a bridge between HR and strategy

• The generation, transferring, integrating and protecting of knowledge is becoming more important in every firm.

• Many firms start recognizing that the key to successful knowledge management requires attending to the social and cultural systems of the organization.

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• Movie: Is HRM strategic?

• http://www.youtube.com/watch?v=AzNL0gEZcLU