Strategic Human Resource Management
A Balanced Approach
Chapter 1 – Strategic HRM in the Twenty-first Century
New economy: a service sector asset-based economy, high knowledge intensity, web-based
organizing
Definitions by Boselie:
HRM = management decisions related to policies and practices that together shape the employment
relationship and are aimed at achieving individual, organizational and societal goals
- Relevance of stakeholders and the goals linked to them
SHRM = HRM with extra attention to the organizational context, business strategy and institutional
context
Definitions by Boxall et al.:
- HRM = the management of work an d people towards desired ends
- MHRM = sub-functions of HR policy and practice (recruitment, socialization). The effect of HR
practices on employee attitudes.
- IHRM = HRM across borders, transferability
- SHRM = linking HRM with business strategy, ‘fit’
(Key characteristics from the multidimensional strategic HR model: multi-actor perspective, broad
societal view (different institutional contexts) and a multi-level perspective.)
The employment relationship is the focus om HRM (exchange relationship), elements:
1. Legal contract
2. Economic contract (or transactional)
3. Psychological contract
4. Sociological contract
Anglo-Saxon or Anglo-American model = focus on creating shareholder value in terms of profits, little
attention to other stakeholders
Rhineland models = focus on multiple stakeholders and taking their interests into account
Strategic balance model = organizational success can only be achieved when financial performance
and societal performance of an organization are above average
Frames: For a balanced approach
- Structural frame: Gain understanding of the various parts of an organization (machine)
- HR frame: Focuses upon the employment relationship (needs and skills) (family)
- Political frame: Examines issues of power(jungle)
- Symbolic frame: Build on meaning and identity (carnival, temple, theatre)
1
,Chapter 2 – Strategic HRM and Context
Pfeffer’s seven best practices:
1. Selective recruitment and selection
2. Extensive training
3. Performance-related pay (PRP)
4. Teamworking
5. Information sharing and communication
6. Reduction of status differences
7. Employment security
Best-practice (universalistic) versus best-fit (context). Best-fit exists of internal (history,
administrative heritage and culture) and external (market mechanisms and institutional mechanisms)
context.
Market mechanisms = the degree of competition between organizations in terms of products,
services, technology and people
Institutional mechanisms = pressures that stem from legislation, protocols and procedures, routines,
habitats, norms and values and social-cultural issues
SHRM = focused on the alignment or fit between the business strategy and the HR strategy of an
organization.
- Business strategy = 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
General environment = all the market and institutional mechanisms that affect all organizations in a
country
Population environment (organizational field) = a community of organizations that partakes of a
common meaning system and whose participants interact more frequently with one another than
with actors outside the field (sector).
Two most common forms of fit in strategic fit approaches:
Strategic (vertical) fit = an alignment between the overall business strategy and the HR strategy is
necessary. Four linkages:
1. Administrative linkage = no linkage between the business strategy and HR strategy
2. One-way linkage = HR strategy is derived and affected by the overall business strategy
3. Two-way linkage = HR issues can become part of the overall business strategy and the business
strategy pushes towards certain HR interventions that help the organization to achieve goals
4. Integrative linkage = full alignment of HRM and strategy
Internal (horizontal) fit = reflects the link between individual HR practices
The idea of HR system approaches is that linking HR practices strengthens the HR strategy and
philosophy of an organization, signalling the organization’s intentions and aims through the different
elements of people management.
Organizational fit = the necessary fit between the HR strategy, policies and practices on the one
hand and the organizational systems on the other
2
,Environmental (institutional) fit = the link between the HR strategy and the institutional
environment of an organization
New institutionalism = organizations are confronted with both market mechanisms (competition)
and institutional mechanisms:
- Coercive mechanisms = legislation and procedures, Normative mechanisms = professions of
employees, Mimetic mechanisms = Uncertainty or hype
Strategic choice = the degree of leeway in strategic decision making given the organizational context
- Hyper-determinisms = organizations have no leeway for strategic choice, choices are fully
determined by the contextual conditions
- Hyper-voluntarism = an organization is free to do what it wants to do, no restrictions
The HR Strategy Scan: Relevant for determining the degree of fit between HRM and the context of an
organization. Better fit -> Better performance.
Six-component model:
1. External general market context: Market mechanisms; macroeconomic situation (economic
growth or decline, money value) and labour market situation (ageing population, quality
employees).
2. External population market context: Direct competitors (and suppliers and consumers). Also
dependent on maturity and growth of the market, prospects of the market, technology en nature
of products/services
3. External general institutional context: Legislation and societal norms and values.
4. External population institutional context: Sector-specific legislation, trade unions, other relevant
stakeholders.
5. Internal organization context (configuration): History of an organization, organizational culture,
technology and systems used, ownership structure and workforce.
6. HR strategy: Defining the overall business strategy and determining the HR strategy (recruitment
and selection; training and development; appraisal and PM; compensation; employee
participation).
Underlying assumptions:
- The four external factors and the configuration affect the HR strategy.
- The external general market context affects the external population market and the HR strategy.
- The external general institutional context affects the external population institution and the HR
strategy.
Chapter 3 – HRM and Performance: Adding Value through People
The HR Value Chain:
1. Determine the competitive advantage for an organization
2. Determine the critical factors that create competitive advantage
3. Determine the employee attitudes etc. that positively affect the critical success factors
4. Determine HR practices that positively affect employee attitudes
Resource-based view (RBV) = thinking from an inside-out approach: internal resources constitute the
starting point for organizational success
VRIO Framework = Value, Rareness, Inimitability and Organization
3
, For temporary advantage value, rareness and inimitability are needed. For a sustained competitive
advantage, support by the organization is also needed.
Inimitability can come from: unique historical conditions (path dependency), ambiguity between
possessed resources and sustained competitive advantage (causal ambiguity) and the resource
generating advantage is difficult to understand (social complexity).
Boxall & Purcell: Link competitive advantage to UBG and organizational performance by critical goals.
Ultimate business goals are twofold: 1) They create and maintain viability with adequate returns to
shareholders 2) They strive for sustained competitive advantage.
UGBs can also be linked to critical HR goals and critical non-HR goals.
Three desired levels of outcomes of critical HR goals:
1. Labour productivity (cost-effectiveness): productivity + delivering quality
2. Organizational flexibility:
- Numerical flexibility: Flexibility in the use of employees
- Functional flexibility: Employees capable of performing multiple tasks and functions
- Mental flexibility: Employees’ ability and willingness to change without resistance
3. Social legitimacy and employment citizenship
HR outcomes – Proximal outcomes: outcomes (almost) directly affected by HR interventions or
practices.
Distinctions between HR practices: 1) Intended HR practices 2) Actual HR practices 3) Perceived HR
practices
The HR Value chain:
- Uses a reversed approach, starting with the organization’s ultimate business goals Critical HR
goals and critical non-HR goals HR outcomes HR practices Link all to the organization
strategy
- Main critical HR goals: 1) Labour productivity (cost-effectiveness) 2) Organizational flexibility
3) Social legitimacy
- The three types of HR practice can be linked to three different employee groups: employees
(perceived), line managers (actual) and HR professionals (intended).
Zie figuur 3.7 en 3.8 (p. 64)!!
Chapter 7 – Selective recruitment and Selection
Recruitment = The different activities of attracting applicants to an organization
Selection = Shifting through the pool of applicants and making decisions about their appropriateness
Three employee groups:
1. Stars = core employees that can add value through knowledge, skills and abilities
2. Guardians = core employees that avoid major losses
3. Foot soldiers = peripheral workers necessary to run the business and support other employee
groups.
4
A Balanced Approach
Chapter 1 – Strategic HRM in the Twenty-first Century
New economy: a service sector asset-based economy, high knowledge intensity, web-based
organizing
Definitions by Boselie:
HRM = management decisions related to policies and practices that together shape the employment
relationship and are aimed at achieving individual, organizational and societal goals
- Relevance of stakeholders and the goals linked to them
SHRM = HRM with extra attention to the organizational context, business strategy and institutional
context
Definitions by Boxall et al.:
- HRM = the management of work an d people towards desired ends
- MHRM = sub-functions of HR policy and practice (recruitment, socialization). The effect of HR
practices on employee attitudes.
- IHRM = HRM across borders, transferability
- SHRM = linking HRM with business strategy, ‘fit’
(Key characteristics from the multidimensional strategic HR model: multi-actor perspective, broad
societal view (different institutional contexts) and a multi-level perspective.)
The employment relationship is the focus om HRM (exchange relationship), elements:
1. Legal contract
2. Economic contract (or transactional)
3. Psychological contract
4. Sociological contract
Anglo-Saxon or Anglo-American model = focus on creating shareholder value in terms of profits, little
attention to other stakeholders
Rhineland models = focus on multiple stakeholders and taking their interests into account
Strategic balance model = organizational success can only be achieved when financial performance
and societal performance of an organization are above average
Frames: For a balanced approach
- Structural frame: Gain understanding of the various parts of an organization (machine)
- HR frame: Focuses upon the employment relationship (needs and skills) (family)
- Political frame: Examines issues of power(jungle)
- Symbolic frame: Build on meaning and identity (carnival, temple, theatre)
1
,Chapter 2 – Strategic HRM and Context
Pfeffer’s seven best practices:
1. Selective recruitment and selection
2. Extensive training
3. Performance-related pay (PRP)
4. Teamworking
5. Information sharing and communication
6. Reduction of status differences
7. Employment security
Best-practice (universalistic) versus best-fit (context). Best-fit exists of internal (history,
administrative heritage and culture) and external (market mechanisms and institutional mechanisms)
context.
Market mechanisms = the degree of competition between organizations in terms of products,
services, technology and people
Institutional mechanisms = pressures that stem from legislation, protocols and procedures, routines,
habitats, norms and values and social-cultural issues
SHRM = focused on the alignment or fit between the business strategy and the HR strategy of an
organization.
- Business strategy = 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
General environment = all the market and institutional mechanisms that affect all organizations in a
country
Population environment (organizational field) = a community of organizations that partakes of a
common meaning system and whose participants interact more frequently with one another than
with actors outside the field (sector).
Two most common forms of fit in strategic fit approaches:
Strategic (vertical) fit = an alignment between the overall business strategy and the HR strategy is
necessary. Four linkages:
1. Administrative linkage = no linkage between the business strategy and HR strategy
2. One-way linkage = HR strategy is derived and affected by the overall business strategy
3. Two-way linkage = HR issues can become part of the overall business strategy and the business
strategy pushes towards certain HR interventions that help the organization to achieve goals
4. Integrative linkage = full alignment of HRM and strategy
Internal (horizontal) fit = reflects the link between individual HR practices
The idea of HR system approaches is that linking HR practices strengthens the HR strategy and
philosophy of an organization, signalling the organization’s intentions and aims through the different
elements of people management.
Organizational fit = the necessary fit between the HR strategy, policies and practices on the one
hand and the organizational systems on the other
2
,Environmental (institutional) fit = the link between the HR strategy and the institutional
environment of an organization
New institutionalism = organizations are confronted with both market mechanisms (competition)
and institutional mechanisms:
- Coercive mechanisms = legislation and procedures, Normative mechanisms = professions of
employees, Mimetic mechanisms = Uncertainty or hype
Strategic choice = the degree of leeway in strategic decision making given the organizational context
- Hyper-determinisms = organizations have no leeway for strategic choice, choices are fully
determined by the contextual conditions
- Hyper-voluntarism = an organization is free to do what it wants to do, no restrictions
The HR Strategy Scan: Relevant for determining the degree of fit between HRM and the context of an
organization. Better fit -> Better performance.
Six-component model:
1. External general market context: Market mechanisms; macroeconomic situation (economic
growth or decline, money value) and labour market situation (ageing population, quality
employees).
2. External population market context: Direct competitors (and suppliers and consumers). Also
dependent on maturity and growth of the market, prospects of the market, technology en nature
of products/services
3. External general institutional context: Legislation and societal norms and values.
4. External population institutional context: Sector-specific legislation, trade unions, other relevant
stakeholders.
5. Internal organization context (configuration): History of an organization, organizational culture,
technology and systems used, ownership structure and workforce.
6. HR strategy: Defining the overall business strategy and determining the HR strategy (recruitment
and selection; training and development; appraisal and PM; compensation; employee
participation).
Underlying assumptions:
- The four external factors and the configuration affect the HR strategy.
- The external general market context affects the external population market and the HR strategy.
- The external general institutional context affects the external population institution and the HR
strategy.
Chapter 3 – HRM and Performance: Adding Value through People
The HR Value Chain:
1. Determine the competitive advantage for an organization
2. Determine the critical factors that create competitive advantage
3. Determine the employee attitudes etc. that positively affect the critical success factors
4. Determine HR practices that positively affect employee attitudes
Resource-based view (RBV) = thinking from an inside-out approach: internal resources constitute the
starting point for organizational success
VRIO Framework = Value, Rareness, Inimitability and Organization
3
, For temporary advantage value, rareness and inimitability are needed. For a sustained competitive
advantage, support by the organization is also needed.
Inimitability can come from: unique historical conditions (path dependency), ambiguity between
possessed resources and sustained competitive advantage (causal ambiguity) and the resource
generating advantage is difficult to understand (social complexity).
Boxall & Purcell: Link competitive advantage to UBG and organizational performance by critical goals.
Ultimate business goals are twofold: 1) They create and maintain viability with adequate returns to
shareholders 2) They strive for sustained competitive advantage.
UGBs can also be linked to critical HR goals and critical non-HR goals.
Three desired levels of outcomes of critical HR goals:
1. Labour productivity (cost-effectiveness): productivity + delivering quality
2. Organizational flexibility:
- Numerical flexibility: Flexibility in the use of employees
- Functional flexibility: Employees capable of performing multiple tasks and functions
- Mental flexibility: Employees’ ability and willingness to change without resistance
3. Social legitimacy and employment citizenship
HR outcomes – Proximal outcomes: outcomes (almost) directly affected by HR interventions or
practices.
Distinctions between HR practices: 1) Intended HR practices 2) Actual HR practices 3) Perceived HR
practices
The HR Value chain:
- Uses a reversed approach, starting with the organization’s ultimate business goals Critical HR
goals and critical non-HR goals HR outcomes HR practices Link all to the organization
strategy
- Main critical HR goals: 1) Labour productivity (cost-effectiveness) 2) Organizational flexibility
3) Social legitimacy
- The three types of HR practice can be linked to three different employee groups: employees
(perceived), line managers (actual) and HR professionals (intended).
Zie figuur 3.7 en 3.8 (p. 64)!!
Chapter 7 – Selective recruitment and Selection
Recruitment = The different activities of attracting applicants to an organization
Selection = Shifting through the pool of applicants and making decisions about their appropriateness
Three employee groups:
1. Stars = core employees that can add value through knowledge, skills and abilities
2. Guardians = core employees that avoid major losses
3. Foot soldiers = peripheral workers necessary to run the business and support other employee
groups.
4
