Managing People Strategically (6314M0117Y) - Assignment 1
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Course
Managing People Strategically (6314M0117Y)
Institution
Universiteit Van Amsterdam (UvA)
Assignment 1 of Managing People Strategically, Assignment = explain what is meant by “strength of the HR system” and why it is important. You give a short example on what such a system looks like in a company - preferably an existing company - or make up an example on what this looks like in th...
In this email I will explain what I have learned as a management trainee so far, by highlighting
the importance of strategic human resource management and giving examples of human
resource architecture theory.
Within organizations, employees are part of the key resources that contribute to
organizational success. Therefore, these human resources should be managed strategically, by
aligning employees’ skills, knowledge and behaviour with the strategic needs of the business
(Wright & Ulrich, 2017). Strategic human resource management therefore entails vertically
aligning human resource management with the organization’s strategy as well as horizontally
coordinating human resource practices within the organization (Wright & McMahan, 1992).
Furthermore, according to resource-based theory, an organization can create a sustained
competitive advantage when human capital is valuable, rare, difficult to imitate and supported
by the organization (Barney, 1991; Wright & Ulrich, 2017). Therefore, I learned that
strategically managing our employees, or ‘human capital’, is crucial to an organization’s
success.
An important contributor to organizational success through strategic human resource
management is the adoption of a human resource architecture perspective (Lepak & Snell,
1999). This is because the economy is influenced by rapid technological changes, demanding
for both flexibility and efficiency to stay competitive. Therefore, firms should make important
considerations about internal and external employment, where internal employment includes
greater stability and predictability of e.g. the firms skills and capabilities and external
employment leads to more discretion in number and types of workers used, also contributing to
innovation (Lepak & Snell, 1999; Pfeffer & Baron, 1988). When strategic human resource
managers incorporate different combinations of employment modes, this can lead to a
competitive advantage.
To incorporate the human resource architecture, Lepak & Snell (1999) argue that human
resource managers should define their human capital in terms of value and uniqueness. Value
refers to the core competencies of human capital that contribute to the competitive advantage
of a firm. Uniqueness refers to the firm specificity of human capital, whether tacit knowledge
and expertise is involved. A HR manager should thus define an employee in terms of his/her
contribution to the competitive advantage of the firm and whether the employees’ knowledge
and skills are easily imitated and accessible on the market. Based on these considerations, the
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