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Strategic Human Resource Management Summary
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, Lecture 1 - Chapter 1→ Chapter 1 - Introduction: SHRM in the 21st century
– Employees are seen as the “organization's most valuable assets.”
– Successful organizational change depends on changing people in their
attitudes, behavior, and cognition. This demands flexibility and good people
management.
The New Economy
– The 1990s introduced a new economy: a concept mainly focused on the
shift from a manufacturing and production economy into a service sector
asset-based economy.
Organizational Change and Competitive Advantage
– Organisational change represents the changes in the nowadays working
life which has an impact on organisations and employees.
→ Examples of organisational changes are a global crisis, reorganisations,
and the aging of the population.
– Competitive advantage is the relatively stronger position of an organisation
in comparison to other organizations in the region or the same branch of
industry.
→ Concept represents a relative outcome which means that you are “doing
better” than other parties.
→ A business has a competitive advantage if the employees and all different
stakeholders in the business environment know how to cope with
organizational change.
→ HR determine at least partly the competitive advantage of a business.
,MHRM, IHRM, and SHRM
– Human Resources Management: involves management decisions related to
policies and practices that shape the employment relationship and aim to
achieve individual, organizational, and social goals (Bosele 2002).
– There are 3 types of HRM:
• Micro HRM/ MHRM: sub-field aimed at studying the shaping of the
employment relationship at the individual employee level. This includes
recruitment and selection; induction and socialization; training and
development. MHRM deals with the inflow, throughflow, and outflow of
employees.
• International HRM/ IHRM: studying the shaping of the employment
relationship in an international context with special attention to HRM
for expatriates, in large MNCs and IGOs. For example, some
multinationals have chosen the same strategy for all companies across
the globe - this can cause problems.
• Strategic HRM/ SHRM: studying the shaping of the employment
relationship taking into account the internal and external organizational
context in an attempt to gain sustainable competitive advantage. Special
attention to potential alignment of fit between the business strategy and
HRM strategy.
– There are 3 perspectives on SHRM;
1. A multi-actor perspective: multiple stakeholders including employees,
managers, HR professionals, top management, and shareholders.
2. Broader societal view: with an emphasis on different institutional
contexts, for example on the level of industry, regions, and countries
3. Multi-level perspective: includes the individual employee perspective
and the strategic organizational perspective.
, – HRM is focused on the employment relationship and can be characterized
by four contract elements:
• Legal contract: rights and obligations of both parties (vacation days).
• Economic/ transactional contract: salary and working hours.
• Psychological contract: unwritten expectations, from both actors.
• Sociological contract: social aspects in relations, for example, the
bond with colleagues.
Traditional distinction of the approaches:
• Anglo-American model or Anglo-Saxon model(USA) - focus on
creating shareholder value in terms of profits and market value with
little or no attention to other stakeholders.
• The Rhineland model(Europe) - acknowledge multiple stakeholders and
their interests explicitly taking into account employee interests in terms
of well-being and societal interests.
The Balanced Approach
– With globalization and increased competition, there is a growing awareness
that sustained competitive advantage depends on balancing market demands
and institutional pressures.
– In the strategic balance model, organizational success can only be achieved
when financial performance and societal performance of an organization
are above average in the particular population in which the organization is
operating.
– Using a narrow and unitarist view in the design of the employment
relationship in an organization results in bad people management. If the
stakeholder's interests and a broader view are used in the design of the
employment relationship in an organization then it will result in 'good' people
management.
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