Chapter 1+2: linking strategy to the field of HRM
Chapter 3+4: focused on the added value of employees for organizations
Chapter 5+6: a balanced perspective and the relevance of specific HRM called high performance work
systems (HPWS)
Chapter 7 t/m 11: focus on specific HPWS
Chapter 12: relevance of the HR function
Chapter 13: International HRM
Chapter 14: focus on the implementation of HRM
Chapter 1 - Introduction: Strategic HRM in the 21st Century
The old economy = traditional industries, physical tasks, job design and work design based on mass
production, relatively low-skilled employees and unionization.
The new economy = dominated by emerging branches of industry, including IT, telecommunications and
financial institutions. Technological developments acted as a facilitator for the rise of the services industry
in the new economy. Assets (activa = geld) are less tangible (tastbaar), they are embedded in reputation,
brands and knowledge of employees. Web-based organizing, high knowledge intensity, centres on the
other side of the world etc. Organizational change = common practice.
Competitive advantage = important for organizational survival and is at least partly manageable bij HRM.
A company with competitive advantage is doing better than its competitors IRRESPECTIVE (ongeacht)
the actual firm performance.
Changing role of work:
• Technology (working at home, requiring different knowledge and skills)
• Better work-life balance (flexible working)
• Ageing population
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.
• MHRM = micro-hrm = mainly focused on the shaping of the employment relationship on the
individual employee level. Covers the sub-functions of HRM policy and practice, including
recruitment and selection, induction and socialization, and training and development.
ORGANIZATIONAL BEHAVIOUR AND OCCUPATIONAL PSYCHOLOGY.
• IHRM = international-hrm = HRM in multinationals and HRM across boraders. Focuses on issues
such as transferability of HR practices across business units in different countries.
• SHRM = strategic-hrm = focuses on issues of linking HRM to the business strategy, designing
high-performance work systems and adding value through good people management in attempt to
gain sustained competitive advantage. Alignment between HRM and the organizational internal
and external context. STRATEGIC MANAGEMENT AND ORGANIZATION STUDIES.
Legislation (wetgeving) affects people management and HRM (laws on flexibility, working conditions,
collective bargaining agreements and unemployment regulations.
Internal stakeholders = employees, line managers, top management, employee representatives
External stakeholders = shareholders, financiers, trade unions, national government, local government,
other interest groups (Greenpeace)
,Multidimensional strategic HRM model - normative perspectives on HRM:
• A multi-actor perspective: multiple stakeholders
• A broad societal view: different institutional contexts (branches of industry/regions/countries)
• A multi-level perspective: individual employee perspective and strategic organizational
perspective
Paauwe (2004)
• Human resources are more than just resources
• HRM is not concerned solely with financial performance
• HRM focuses on the exchange relationship between employee and organization
• The shaping of the employment relationship takes place in an era of continuous tension between
the added value and moral values.
Four contract elements of HRM:
• Legal contract
• Economic or transactional contract
• Psychological contract (concerning all things that are not written down but are expected from both
actors)
• Sociological contract (bond with colleagues)
HRM operates in an area of continious tension between added value and moral values
Added value (hard HRM) = economic value and increasing financial performance
Moral value (soft HRM) = employees as human beings with feelings, emotions, opinions, norms and
values
Boxall & Purcell (2013):
• HRM covers all workforce groups, including core employees, peripheral employees and
contingent workers (parttime workers and flexworkers)
• HRM involves line and specialist managers, and is not solely aimed at employees
• HRM is all about managing work and people, colllectivily and individually
• HRM is embedded in industries and societies.
There is made a distinction between:
• Anglo-Saxon or Anglo-American models (USA) = approaches in Industrial Relations (IR) and
HRM. Focus on one stakeholder: the shareholder. Value in terms of profit and market value.
• Rhineland models (West-Europese landen waar Rijn doorheen stroomt) = acknowledge
multiple stakeholders and their interests explicitly taking into account employee interests in terms
of well-being and societal interests.
In the strategic balance model organizational success can only be achieved when both financial as
societal performance are above average in the particular population in which the organization is operating.
Frames = mental models, maps, mind-sets, schemes and cognitive lenses that people apply consciously
but mostly unconsciously. Framing HRM:
• Structural frame = about understanding the various (structural) parts of an organization. Rules,
roles, goals, policies, technology and environment.
• HR frame = about employment relationship (family metaphor). Looking at organizations focusing
, on needs, skills and relationships of those involved.
• Political frame = the issues of power. Jungle metaphor --> power, conflict, competition and
organizational politics.
• Symbolic frame = builds on meaning and identity. Culture, meaning, metaphor, ritual, ceremony,
stories and heroes.
à Mainstream HRM is studied from the structural frame (Mintzberg, Porter) or de HR frame. Political and
symbolic frame are often neglected: a balanced approach implies the explicit inclusion of multiple frames.
The balanced approach blends economic and institutional interests in attempt to create sustained
competitive advantage.
Chapter 2 - Strategic Human Resource Management and Context
Best-practice school = universalistic perspective - one size fits it all. Pfeffer's 7 HR practices for 'building
profits by putting people first' is representative for the best-practice school.
- Lack of attention for contextual factors | + simplicity and clarity
Pfeffer's (1998) seven best practices:
1. Selective recruitment and selection - including intelligence tests, integrity tests, assesment centres
and structured interviews.
2. Extensive training - employee development through training programmes outside the organization,
training on the job, eLearning through training programmes via an intranet and coaching.
3. Performance-related pay (PRP) - for example the use of yearly bonuses based on performance.
4. Teamwork - autonomy and self-responsibility in work design.
5. Information sharing and communication - using intranet, Internet, newsletters, direct supervisor
talks and top management presentations (support of top management is crucial).
6. Reduction of status differences - by avoiding status symbols linked to hierarchy (like executive
parking spaces, separate elevators for top executives)
7. Employment security - employee benefits providing insurance for unemployment, disability and
death for employees and their families.
Best-fit school = argues that HRM is more effective when it is aligned with its internal and external
context. In other words, it is important to make sure the HR strategies are suitable in different
circumstances along with the culture and operational process as well. Success can only be achieved
through the appropriate fit between HRM and its context.
Context = set of facts or circumstances that surrounds the organization.
• Internal context = history, administrative heritage (structures, production systems, practices
installed) and culture.
• External context = outside mechnisms that affect the organization --> has huge impact on strategy
and decision making:
◦ Market mechanisms = the degree of competition between organizations in terms of
products, services, technology and people (Paauwe: PMT dimension: products, markets
and technology)
◦ Institutional mechanisms = several pressures that stem from legislation and procedures
(coercive), professions of employees (normative) and imitation as a result of uncertainty
or fasion (mimetic) s (Paauwe: SCL dimension: social, cultural and legal).
General environment (external general context)= all the market and institutional mechanisms that
, affect all organizations in a country (macroeconomic situation of a country)
Population environment = all the organizations who are operating in the same population, based on the
nature of their business and the geographical location of activities (Shell, Total and BP).
Population or organizational field (external population context)= a community of organizations that
partakes of a common meaning system and whose participants interact more frequently or fatefully with
one another than with actors outside the field (sector, but also suppliers and other types of organization)
Business model = the way an organization manages its business to make money.
Strategy = organization's intention to achieve certain goals through planned alignment (or fit) between the
organization and its environment. Strategy is also about the embeddedness and implementation of plans
at lower levels of the organization and with involvement of multiple actors, including middle-line managers,
works council and employees.
Anglo-American approaches tend to have a narrow definition of goals, while the European approaches
tend to apply a much broader definition including multiple stakeholders and interests.
SHRM focuses on the fit between the strategy of an organization and the HR strategy of that organization:
• Business strategy / competitive strategy = multiple strategies, covering marketing, operations,
finance and hrm --> the system of the firm's important choices, a system that could be well
integrated around common concerns or which might have various links and foul-ups.
• HR strategy = one of the functional silos
Early best fit models: like Miles and Snow and Schuler and Jackson. Were grounded on strategic
contingency approaches = emphasize the impact of internal contingencies (firm size, history, capital
intensity) and external contingencies (legislation etc) on the shaping and structuring of an organization.
They showed that certain contextual factors affect the shaping of an organization.
Strategic or vertical fit = fit between the overall business strategy and the HR strategy. One of the
strategic fit models (Golden and Ramanujam):
1. Administrative linkage between strategy and HRM. Lowest level of integration, little or no linkage.
HRM department (if in place at all) does administrative work --> Legislation.
2. One way linkage in organizations: HR strategy is derived from the overall business strategy.
3. Two-way linkage where HR experts determine certain external or internal developments that are
put on the tabel of the board of directors. HR issues can become part of the business strategy.
4. Integrative linkage --> full alignment. HR director has a seat at the 'high table'.
Internal or horizontal fit = the link between individual HR practices, crucial for gaining success. HR
system approaches = HR system is defined as a coherent and consistent set of HR practices that
