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Full elaboration of all lectures - Strategic HRM
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A full elaboration of all treated substances during the Strategic HRM college for the exam of 04/11/2021.
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Strategic HRMVideo #1 (chapter 1 + 2) + Lecture #1
- Analytical approach to studying SHRM:
Empirical description and theoretical explanation come before policy prescription
Empirical description: what managers actually do in HRM
Theoretical explanation: why they do what they do
Policy prescription: this analytical approach provides the basis for discussions of what
managers ought to do
- Human Resources:
Characteristics that are intrinsic to human beings, which people can apply to the various
tasks and challenges of their lives
Our knowledge, skills and abilities (KSAs)
Our physical and emotional health, motivations, intellectual capabilities and
personalities
Who owns Human Resources:
Individuals possess their own human resources and have rights over how and where
they use them. Thus, organizations are dependent on people who have the human
resources they need to be successful. HRM is an inevitable process in organizations.
- Human Resource Management:
The process through which management attempt to build a workforce with the kind of
human resources their organization needs and create the kind of human performances that
will make it successful
> HRM is a management activity carried out to achieve organizational goals
> Managers design and use HRM systems to be able to manage work and people
HRM systems:
Bundles of HRM policies and practices
> HRM policies and practices for work management
The design of jobs (can range from low-discretion jobs to highly autonomous
jobs)
The design of teamwork in team settings
Organizational change
> HRM policies and practices for people management
Workforce planning, recruitment & selection, training & development,
performance management, compensation, incentives and retention
- Involved in HRM:
1. Senior management, responsible for:
> aligning HRM with organizational goals and strategy (vertical fit)
> aligning HRM with other functional areas (marketing, product, finance; horizontal fit)
> aligning HR policies and practices with one another (internal fit)
> involving other stakeholders in the HRM process
,2. Line management:
> implementing and using HRM practices to hire, develop, motivate, reward and retain
employees
3. HR specialists:
> supporting managers to align HRM with the overall business strategy and to design and
implement HR policies and practices
4. Employees:
> developing perceptions of HRM policies and practices
> are involved in and use HRM practices
Strategic partner:
Supports senior and line managers to develop an HR strategy and to align the HR policies
and practices with the overall business strategy of the organization and the other functional
areas.
Change agent:
Build change capacity in an organization by helping to adapt to changing circumstances.
Administrative expert:
Develop and design HR practices, deliver HR instruments and services.
Employee champion:
Focus on protecting their employees’ interest, creating a positive work culture where people
like to work in.
,- The goals of SHRM:
1. Economic goals
> Ensuring cost-effective labor
Cost-effective labor is the basic economic goal that the management of a firm wants
to achieve with SHRM.
HRM needs to secure the economic viability of the firm (making a profit that
investors and lenders consider acceptable). Thus, a fundamental and economic goal
of HRM is making human resources productive at an affordable cost.
Low-cost strategy: low HR investments (discount retailer)
Operational backbone: a few long-term managers and experienced employees
Other workers:
- Short-term / zero-hours contracts
- Minimum wages, minimal training
- Simple, routine, low-autonomy jobs
- Low commitment, high turnover
Innovation strategy: high HR investments (capital-intensive, high-tech firm)
Workers:
- Permanent, complex jobs, high autonomy
- Extensive recruitment, selection, training, development and career
opportunities
- High wages, high commitment
Cost effective: high labor cost relatively low (10% total cost)
The SHRM of cost-effective labor:
- is aligned with a firm’s business strategy
- highly determines how work is designed and managed, and how people are
employed in organizations
- results in different HRM models across firms using different business strategies
> Building in organizational flexibility
- Short-run responsiveness:
1. Numerical flexibility (making it easier to hire labor; overtime, temporary/zero hours
contracts)
2. Financial flexibility (mix of wages, performance-based bonuses)
3. Functional flexibility (cross-trained or multiskilled employees)
- Long-run agility:
Capacity to create endurable changes to cope with radically changing environments
(offshoring production facilities > HRM model for dual workforce).
Long-run agility is difficult to achieve because established thoughts and routines in
organizations are hard to change.
, > Developing human resource advantages
Firms that survive (economic viability) try to develop a competitive advantage to
enhance their profitability
Competitive advantage: an advantage over competitors gained by offering
consumers greater value, either by means of lower prices (cost advantage),
or by providing greater benefits and service that justify higher prices
(differentiation advantage).
Competitive advantages are often temporary (e.g., offshoring production).
Most valuable competitive advantages are those that are sustainable (e.g., innovative
ecosystems for products and services through which Apple, Amazon, Google,
Facebook and Tesla have redefined the business and industry they operate in).
HRM plays a pivotal role in developing competitive advantages through building
human capital advantage and social capital advantage:
- Human capital advantage: when a firm attracts, hires, develops, motivates and
retains more highly talented employees (better KSAs) than its rivals
- Social capital advantage: when a firm develops superior ways of combining the
talents (KSAs) of individuals into collaborative activities leading to competitive
advantage and excellent organizational performance
The difference between elite and egalitarian models of HR advantage:
- Elite: in case of low-skill products and services, firms invest in the human capital
and social capital of their elite (management, marketing and supply chain experts)
and employ the operating workforce in cost-effective ways.
- Egalitarian: in case of high-skill products or services, firms invest extensively in the
human and social capital of the entire workforce to ensure the delivery of high
quality, highly priced products and services to their customers.
Firms are not only economic but also social actors operating in societies: managers need to
adapt their HRM to legal requirements and social values and norms relating to how people
should be employed and treated at work.
Institutional perspective:
1. Regulative: labor laws and legal rules
2. Normative: social values and norms (equal employment opportunities, inclusion)
3. Cultural-cognitive: adapt to how people think and behave in a society
2. Socio-political goals
> Legal compliance and social legitimacy
Employers differ in their social legitimacy goals:
- Some employers try to avoid their legal responsibilities (e.g., underpayment of staff,
breaches of health and safety at work)
- Most employers tend to adopt a baseline legitimacy goal to avoid prosecution and
bad publicity
- Some employers operate beyond the baseline by actively promoting equal
employment opportunities (EEO) and work-life and family-friendly employment
conditions
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