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Summary Boselie, Strategic Human Resource Management
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This is a summary of the latest edition of the book Strategic Human Resource Management Paul Boselie.
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Boselie – Strategic human resource managementChapter 1: Introduction: SHRM in the 21th century
MHRM, IHRM and SHRM
1. MHRM covers the sub-functions of human resource policy and practice, including recruitment
and selection, induction and socialization, and training and development. It is closely related to
the studies in organizational behavior and occupational psychology that focus on the impact of
single HR practices on employee attitudes and behavior.
2. IHRM is HRM in multinational companies (MNCs) and HRM across borders. It focuses on
transferability of HR practices across business units in different countries.
3. SHRM focus on issues of linking HRM to the business strategy, designing high-performance work
systems and adding value through good people management. The concept of ‘fit’ plays a central
role within SHRM.
HRM focuses on the exchange relationship between the employee and the organization. The
employment relationship contains different contract types:
1. Legal contract: the rights and obligations of both, number of vacation days.
2. Economic or transactional contract: working days, salary.
3. Psychological contract: trust the supervisor that a succesfull project will contribute to promotion
4. Sociological contract: team, the social relationship with employees.
There are two kind of approaches:
Anglo-Saxon / Anglo- American model: this approaches in the industrial relations (IR) and HRM,
mainly focus on creating shareholder value in terms of profits and market value. No attention to
other stakeholders.
Rhineland model: acknowledge multiple stakeholders and their interest explicitly taking into
account employees interests in terms of well-being and societal interests.
Stakeholders can be: shareholders, employees, managers, top management, works councils, trade
unions, financiers, local government, national government, other interest groups, suppliers and
customers.
Balanced approach: blends the economic and institutional interests in order to create a sustainable
position, or to create competitive advantage.
Chapter 2: SHRM and context
Best practice versus best fit
Best practice: universalistic perspective. All firms will be better off if they uses the ‘best practices’
in the way they manage people.
Best fit: this argues that HRM is more effective when it is aligned with its internal and external
context.
Pfeffer (1998) has seven HR practices for ‘building profits by putting people first’. This is an example
of the best practice:
1. Selective recruitment and selection: trying to recruit and select the best person for the job.
2. Extensive training (outside the organization): this may involve employee development
3. Performance-related pay (PRP): this can be linked to the profits of an organization, individual or a
team
4. Team working: break through the hierarchical model and decentralize responsibility.
5. Information sharing and communication: communication is essential in an organization change.
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,6. Reduction of status differences: avoiding symbols, parking places, separated elevators.
7. Employment security: mostly this is embedded through legislation.
In the best-fit proposition success can only be achieved through the appropriate fit between HRM
and its context. This means de circumstances that surrounds the organization. The internal context
represents the organizations history, administrative heritage and organization culture. The external
context reflect the outside mechanisms where the organization interact with. This can be:
Market mechanisms
Institutional mechanisms
Strategy: the intention to achieve certain goals through planned alignment between the organization
and its environment.
SHRM: is focused on the alignment or fit between the strategy of an organization and the HR strategy
of an organization.
Business strategy: overall strategy which covers all the different sections in the organization
HR strategy: one of the functional silos. This is the link between the business strategy and the HR
strategy.
Market mechanisms: include the degree of competition between organizations in terms of products,
services, technology and people.
Institutional mechanisms: represents several pressures that stem from legislation, protocols and
procedures, routines, habits, norms and values, and social-cultural issues.
General environment: all the market and institutional mechanisms that affect all organizations in a
country.
Population environment: this is a community of organizations that partakes of a common meaning
system and whose participants interact more frequently than outsiders.
Strategic fit: necessary alignment between the overall business strategy and the HR strategy.
1. Administrative linkage: lowest level of integration. There is no linkage between the business
strategy and their HR strategy. The HRM department is merely engaged in administrative work.
2. One-way linkage: the HR strategy is derived from the overall business strategy, but the
relationship is only one way
3. Two-way linkage: the HRM department determines certain external developments. These HR
issues can become part of the overall business strategy. On the other hand the strategy pushes
the HR department to interventions that help the organization to achieve its goals.
4. Integrative linkage: full alignment of HRM and strategy. The HR director is also part of the
directors.
Internal fit: this is the link between individual HR practices.
HR system: is a coherent and consistent set of HR practices that combined together results in higher
organizational performance than separately.
Organizational fit: this refers to the necessary fit between the HR strategy, policies and practices and
the other organizational systems. For example: production system, communication and information
system, technological system.
Environmental or institutional fit: is focused on the link between the HR strategy and the institutional
environment of an organization.
Coercive mechanisms: emerge from legislation and procedures
Normative mechanisms: origins in the professions of employees (education of lawyers and
accountants)
Mimetic mechanisms: are the result of uncertainly or fashion.
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, Figure 2.4: Strategic choice: the degree of leeway.
Hyper-determinism: a situation in which an organization has no leeway for strategic choice,
because it is fully determined by contextual conditions.
Hyper-voluntarism: there are no restrictions; the organization is free to do whatever they want.
In reality the strategic choice is probably somewhere between the two.
The strategy scan is relevant for determining the degree of fit between HRM and the context of an
organization:
1. External general market context: macroeconomic situation and labour market conditions in the
country or region.
2. External population market context: the competition, maturity of the market and new
developments in technology.
3. External general institutional context: country/ EU legislation and social norms and values.
4. External population institutional context: nature of the CBAs, the influence of social partners,
influence of other stakeholders.
5. Internal organization context: the history, culture, technology, systems and structure.
6. HR strategy: relates to managing employees through the HR practices
a. Selection and recruitment
b. Appraisal and performance management
c. Compensation
d. Training and development
e. Employee participation
The external general market context
This is about the market mechanisms that affects all the organizations in a specific country or region.
Macroeconomic examples: growth or decline in a country, oil prices, value of the dollar or euro.
Labour market situation examples: qualified personnel, lower wages.
The external population market context
The population of an organization consists of the direct competitors of the organization; it overlaps
the branch of industry. The market of an organization can be determined by: the number of
competitors, the maturity of the market, the growth or decline, the prospects for the market in
terms of growth opportunities and market share.
The external general institutional context
A difference can be made between laws/legislation and norms and values. Laws and legislation is on
paper, while norms and values are often not written down. There are also major difference between
countries.
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