STRATEGIC HUMAN RESOURCE MANAGEMENT
Chapter 1: Strategic HRM in the 21st century
Organizational change is inevitable
- Shift from production economy to service-based company
- From physical tasks and job design based on assembly line to:
o Technology (robotization): requires new skills and competencies
o Scientific progress, new discoveries: high knowledge intensity
o Emerging branches of industry (IT, telecommunications, financial institutions)
- Mergers, acquisitions, reorganization, outsourcing to developing countries
- Societal changes, e.g., dual-career couples with children, importance of work-life balance,
aging population
Competitive advantage = comparing each other within the same type of sector/branch
→ doing better than others in the same branch of industry in terms of financial performance
(sales) and non-financial performance (reputation)
3 major subfields
Micro HRM: individual workers
The importance of context
- HRM is embedded in different institutional contexts
- It involves managing multiple stakeholders by using a balanced perspective
- The context is important (e.g. different countries = different legislation, different cultures)
1
,Overview of potential stakeholders
Stakeholders: internal and external groups that effect the strategic decision-making of an
organization, including its Strategic HRM
The multidimensional strategic HR model
- A multi-actor perspective (multiple stakeholders including employees, managers, HR
professionals, works councils, trade unions, top management, shareholders, financiers and
government)
- A broad societal view with an emphasis on different institutional contexts, for example on
the level of branches of industry, regions and countries
- A multi-level perspective including the individual employee perspective and the strategic
organizational perspective -> insight an organization there are different levels
Pauuwe (2004)
- Human resources are something more than just ‘resources’
- They are human beings with:
o Feelings, emotions
o Norms, values
o Different sources of motivation
o Interests
o Personality trates
o …
- There are different factors that can determine employee attitudes and behavior
- HRM is not concerned solely with financial performance: focus on psychological factors (e.g.
from the field of work and organizational psychology, organizational behavior)
- HRM focuses on the exchange relationship between employee and organization
2
,3
, - 4 contract elements:
o Legal contract (e.g., number of vacation days)
o Economic contract (e.g. effort, energy, time of the worker vs rewards given by the
employer)
o Psychological contract (intangible, not written: e.g. extra effort for possible
promotion)
o Sociological contract (intangible: e.g. relationships with colleagues)
- The shaping of the employment relationship takes place in an era of continuous tension
between:
o Economic value
▪ Increased performance
Hard HRM
▪ HRM
o Moral values
▪ The human-oriented approach
Soft HRM
▪ HRM
Boxall & Prucell (2003)
- HRM covers all workforce groups, including:
o Core employees (highly-skilled, valuable employees)
o Peripheral employees (lower-skilled, more temporary)
- HRM focuses on all employee categories in an organization (e.g., line and specialist
managers) and is not solely aimed at employees;
o E.g., everyone needs training in different skills
- HRM is all about managing work and people, collectively and individually;
o E.g., individual performance, conflict management in teams
- HRM is embedded in industries and societies.
o Importance of cross-cultural management
Department of personnel and organization
- HRM is not only focused on administrative tasks
- DPO at UGent:
o Recruitment office
o Career development office
o Personnel administration office
o ICT
The balanced approach
- Taking into account needs of different stakeholders (the European Rhineland model of HRM)
is likely to result in good HRM management
4
Chapter 1: Strategic HRM in the 21st century
Organizational change is inevitable
- Shift from production economy to service-based company
- From physical tasks and job design based on assembly line to:
o Technology (robotization): requires new skills and competencies
o Scientific progress, new discoveries: high knowledge intensity
o Emerging branches of industry (IT, telecommunications, financial institutions)
- Mergers, acquisitions, reorganization, outsourcing to developing countries
- Societal changes, e.g., dual-career couples with children, importance of work-life balance,
aging population
Competitive advantage = comparing each other within the same type of sector/branch
→ doing better than others in the same branch of industry in terms of financial performance
(sales) and non-financial performance (reputation)
3 major subfields
Micro HRM: individual workers
The importance of context
- HRM is embedded in different institutional contexts
- It involves managing multiple stakeholders by using a balanced perspective
- The context is important (e.g. different countries = different legislation, different cultures)
1
,Overview of potential stakeholders
Stakeholders: internal and external groups that effect the strategic decision-making of an
organization, including its Strategic HRM
The multidimensional strategic HR model
- A multi-actor perspective (multiple stakeholders including employees, managers, HR
professionals, works councils, trade unions, top management, shareholders, financiers and
government)
- A broad societal view with an emphasis on different institutional contexts, for example on
the level of branches of industry, regions and countries
- A multi-level perspective including the individual employee perspective and the strategic
organizational perspective -> insight an organization there are different levels
Pauuwe (2004)
- Human resources are something more than just ‘resources’
- They are human beings with:
o Feelings, emotions
o Norms, values
o Different sources of motivation
o Interests
o Personality trates
o …
- There are different factors that can determine employee attitudes and behavior
- HRM is not concerned solely with financial performance: focus on psychological factors (e.g.
from the field of work and organizational psychology, organizational behavior)
- HRM focuses on the exchange relationship between employee and organization
2
,3
, - 4 contract elements:
o Legal contract (e.g., number of vacation days)
o Economic contract (e.g. effort, energy, time of the worker vs rewards given by the
employer)
o Psychological contract (intangible, not written: e.g. extra effort for possible
promotion)
o Sociological contract (intangible: e.g. relationships with colleagues)
- The shaping of the employment relationship takes place in an era of continuous tension
between:
o Economic value
▪ Increased performance
Hard HRM
▪ HRM
o Moral values
▪ The human-oriented approach
Soft HRM
▪ HRM
Boxall & Prucell (2003)
- HRM covers all workforce groups, including:
o Core employees (highly-skilled, valuable employees)
o Peripheral employees (lower-skilled, more temporary)
- HRM focuses on all employee categories in an organization (e.g., line and specialist
managers) and is not solely aimed at employees;
o E.g., everyone needs training in different skills
- HRM is all about managing work and people, collectively and individually;
o E.g., individual performance, conflict management in teams
- HRM is embedded in industries and societies.
o Importance of cross-cultural management
Department of personnel and organization
- HRM is not only focused on administrative tasks
- DPO at UGent:
o Recruitment office
o Career development office
o Personnel administration office
o ICT
The balanced approach
- Taking into account needs of different stakeholders (the European Rhineland model of HRM)
is likely to result in good HRM management
4
