,Week 1 Chapter 1
Characteristics of SHRM in the 21st century
- Bigger impact of organizational change
- Competitiveness
- Three perspective (MHRM, IHRM, SHRM)
- Stakeholder perspective
- Balanced approach
Employees are according to HRM theory
- The organisations most valuable asset
Possible benefits of the HRM principles:
- Higher productivity levels
- Improvement of service quality toward customers
- Expansion of sales
- Higher profits
How to pay attention to organisational goals and individual employee’s well-being while operating in
dynamic and continuously changing environments:
- Flexibility
- Good people management
- (multiple-stakeholder perspective used in the book)
What is multiple-stakeholder perspective:
- The strategy of a business has to be in line with the strategy of an employee
What is the 1990’s The new economy:
- Concept mainly focused on the shift from a manufacturing and production economy into a
service sector asset-based economy
Emerging branches in the new economy:
- IT sector
- Telecom sector
- Financial sector
Characteristics of the new economy:
- Technological developments caused risk of the service industry
- Assets are less tangible and embedded in reputation, brands and knowledge of employees
- Flexible work arrangements due to internet (web based organisations and contact)
- Outsourcing and offshoring businesses to developing countries
What is outsourcing and offshoring:
- Outsourcing = activities are done by other companies
- Offshoring = moving business activity to another country (stays same company)
What is organisational change:
- Change in working life which has an impact on organisations and employees
- i.e. global crisis, reorganization, aging of the population
2
,Competitive advantage:
- the stronger position of an organisation in comparison to another company
- relative outcome = doing better than other parties
- If employees know how to act with a organisational change = an advantage
- HRM determine partly the advantage
Definition HRM:
- Involves management decisions related to policies and practices that together shape the
employment relationship and are aimed at achieving individual, organizational, and societal
goals.
Three types of HRM:
- Micro HRM (MHRM)
o Individual employee level
o Recruitment & selection, induction & socialization, training and development.
o Inflow / throughflow / outflow employees
- International HRM (IHRM)
o International context
o HRM for expats, large MNC’s and IGO’s (multinationals have different HRM per
country)
- Strategic HRM (SHRM)
o Internal and external organizational context
o Alignment of fit between business strategy and HRM strategy
Perspectives SHRM:
- Multi-actor perspective
o Multiple stakeholders (employee, managers, top management, shareholders)
- Broad societal view
o Emphasis on different institutional contexts (level of industry, regions and country
branches)
- Multi-level perspective
o Individual and strategic organizational perspective
Stakeholders:
- Internal and external groups that affect the strategic decision making.
Paauwe (2004):
- Human resources are more than just resources (people have feelings, emotions, interests,
norms and values)
- HRM not only concerned financial performance, broader stakeholder management and
relating labour legislation (well-being, happiness, health)
- HRM focus = exchange relationship between employer and organization
Paauwe said employment relationship shaping takes place at an area with tension between:
- Added values = Soft HRM = human side of organizing
- Moral values = Hard HRM = economics
4 types of contract types in the exchange relationship:
- Legal contract (rights and obligations of both parties, vacation days)
- Economic / transactional contract (salary & working hours
- Psychological contract (unwritten expectations)
3
, - Sociological contract (social aspects, bonding with colleagues)
2 types of HRM models (Europe & USA)
- Anglo-American model
o USA, Hard HRM
o Shareholder value creating, such as profits and market value
- Rhineland Model
o Europe, Soft HRM
o Employment relationship in organisations
Boxall and Purcell (2003):
- HRM covers all workforce groups
- HRM not only for employees, also line- and specialist managers
- All about managing work and people (collectively and individually)
- HRM is embedded in industries and societies
3 workforce groups according to Boxall and Purcell:
- Core employees (work permanently at the organisation, have contract)
- Peripheral employees (do important work but not vital,temporary)
- Contingent workers (like cleaner, temporary)
Contingent and peripheral workers are often neglected, this can decrease motivation.
HRM practices are:
- Recruitment and selection
- Training and development
- Appraisal and rewards
- Promotion
- Participation
- Job autonomy
- Job rotation
- Job design (tasks,job enlargement and responsibilities, job enrichment)
Traditional HRM model = focuses only on valuable employees
The new HRM model: focusses on the whole workforce
What is the balanced approach:
- Insights from an economic and institutional perspective to create balance and sustainability
within the organization.
o Goals of the individual employee
o Organizational goals
o Societal goal
4 perspectives for studying organizations by Bolman & Deal (2008):
- Structural frame
o Understanding of the structural parts of organizations (rules, roles, goals, policies,
technology and environment)
- HR frame
o Psychological background for needs, skills and relationships
- Political frame
o Use of power (power, conflict, competition and organizational politics)
- Symbolic frame
4
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