Lecture 4
SHRM models
Rise of SHRM:
- 1980S – rise of HRM – passive assets
- 1990’s emphasises on strategic management of people- align people with
organizational objectives
- SHRM – basic assumption is that internal resources provide the basis for competitive
advantage
- SHRM is a new field of research between strategy and HRM.
What is SHRM?
- “The intentions of the corporation both explicit and covert, toward the management
of its employees expressed through philosophies, policies and practices”
Torrington et al., 2005:28
- “The development of a consistent aligned collection of practices, programs and
policies to facilitate the achievement of the organisation’s strategic objectives”
Mello, 2006: 152
-39% of UK firms did not have a written HR strategy (Guthridge and Lawson 2008)
Theoretical perfectives:
- The resource-based view
- The universalist/best practice and stakeholder approach
- The best fit/ contingency
Resource-based view of HRM
- HRM provides sustained competitive advantage when these 4 attributes are present:
o Valuable to the firm (VALUE)
o Scarce and hard to obtain (RARITY)
o Difficult for competitors to copy (IMITABILITY)
o Can be used and is readily replaced by alternative – is the firm organised to
capture value (ORGANISED)
Barney 1991
Resource based view (RBV) model:
, HCM – linked to RBV (critiques of RBV)
- High commitment management
- Look for scarce, valuable and unique workers
- Control approach
- Employees not considered equal to managers etc
- Lower-level employees less visible, less mobile and weaker bargaining power enables
firm to make greater profits
- Top managers/ professionals easily lost to competitors as highly visible and mobile –
demand high reward for performance
Is HRM difficult to copy?
- Three barriers to copying HRM:
o Imitation – path dependency
Employment practices and relationships develop slowly overtime
contexts – not easily replicated
o Socially complex and persistent routines
o Casual ambiguity – difficult to grasp precise ways employment practices
generated value
Single HR practices easily copied
Difficult to replicate culture, trust, tacit knowledge and
understanding,
Criticisms of RBV:
- Difficult to find resources that meet the criteria
- External pressures and market are ignored
- Generalised guidance
Definition of best practice HRM:
- Universalist approach
- (AKA) High performance management – Appelbaum et al 2000
- “a particular set of HR practices has the potential to bring about improved
organisational performance for all organisations”
Marchington and Wilkinson 2005
- Universalist approach: HR as ‘best practice’; surveys suggests there is ‘one best way’;
statistical linkages eh between HR practices and business outcomes (e.g. reduce
turnover, productivity)
- Too unitarist, assuming workers will comply with managerial policy (Truss et al,
2012)
- Top down approach from managers to employees
Best practice
- 2 strands of thinking
o Shareholder dominant (believe employees are a resource and all aspects
should be oriented towards profit and maximise shareholder profit)
o Stakeholder-oriented approach (values all stakeholders eg employees,
management, custoemrs, suppliers etc.
SHRM models
Rise of SHRM:
- 1980S – rise of HRM – passive assets
- 1990’s emphasises on strategic management of people- align people with
organizational objectives
- SHRM – basic assumption is that internal resources provide the basis for competitive
advantage
- SHRM is a new field of research between strategy and HRM.
What is SHRM?
- “The intentions of the corporation both explicit and covert, toward the management
of its employees expressed through philosophies, policies and practices”
Torrington et al., 2005:28
- “The development of a consistent aligned collection of practices, programs and
policies to facilitate the achievement of the organisation’s strategic objectives”
Mello, 2006: 152
-39% of UK firms did not have a written HR strategy (Guthridge and Lawson 2008)
Theoretical perfectives:
- The resource-based view
- The universalist/best practice and stakeholder approach
- The best fit/ contingency
Resource-based view of HRM
- HRM provides sustained competitive advantage when these 4 attributes are present:
o Valuable to the firm (VALUE)
o Scarce and hard to obtain (RARITY)
o Difficult for competitors to copy (IMITABILITY)
o Can be used and is readily replaced by alternative – is the firm organised to
capture value (ORGANISED)
Barney 1991
Resource based view (RBV) model:
, HCM – linked to RBV (critiques of RBV)
- High commitment management
- Look for scarce, valuable and unique workers
- Control approach
- Employees not considered equal to managers etc
- Lower-level employees less visible, less mobile and weaker bargaining power enables
firm to make greater profits
- Top managers/ professionals easily lost to competitors as highly visible and mobile –
demand high reward for performance
Is HRM difficult to copy?
- Three barriers to copying HRM:
o Imitation – path dependency
Employment practices and relationships develop slowly overtime
contexts – not easily replicated
o Socially complex and persistent routines
o Casual ambiguity – difficult to grasp precise ways employment practices
generated value
Single HR practices easily copied
Difficult to replicate culture, trust, tacit knowledge and
understanding,
Criticisms of RBV:
- Difficult to find resources that meet the criteria
- External pressures and market are ignored
- Generalised guidance
Definition of best practice HRM:
- Universalist approach
- (AKA) High performance management – Appelbaum et al 2000
- “a particular set of HR practices has the potential to bring about improved
organisational performance for all organisations”
Marchington and Wilkinson 2005
- Universalist approach: HR as ‘best practice’; surveys suggests there is ‘one best way’;
statistical linkages eh between HR practices and business outcomes (e.g. reduce
turnover, productivity)
- Too unitarist, assuming workers will comply with managerial policy (Truss et al,
2012)
- Top down approach from managers to employees
Best practice
- 2 strands of thinking
o Shareholder dominant (believe employees are a resource and all aspects
should be oriented towards profit and maximise shareholder profit)
o Stakeholder-oriented approach (values all stakeholders eg employees,
management, custoemrs, suppliers etc.
