Human Resource Management
Table of Contents
Chapter 2: Strategic Human Resource Management & Context ............................................... 3
Chapter 3: HRM & Performance: Adding Value through People ........................................... 13
Chapter 4: Analysing Work & Designing Jobs........................................................................ 20
Chapter 6: High-Performance Work Systems.......................................................................... 26
Chapter 7: Selective Recruitment and Selection ...................................................................... 30
Chapter 8: Performance Management ..................................................................................... 37
Chapter 9: Compensation......................................................................................................... 44
Chapter 10: Career Development............................................................................................. 51
Chapter 11: Talent Management .............................................................................................. 55
Chapter 14: International Human Resource Management ....................................................... 60
,USE AT YOUR OWN DISCRETION
,Chapter 2: Strategic Human Resource Management & Context
1. Understand the concept of strategy in contemporary organisations.
2. Understand the difference between best-practice approaches & best-fit approaches in
HRM.
3. Identify the four types of fit in HRM.
4. Recognise the impact of contextual factors (general environment & population
environment; market mechanisms, institutional mechanisms & configuration) on the
shaping of employment relationships in organisations.
5. Examine & analyse the context of an organisation using the model presented in this
chapter.
Introduction
The notions of fit & alignment are important features of strategic HR management (SHRM)
& are therefore key issues in this chapter. Two things that go well together represent fit. This
phenomenon can also be applied to HRM: HR practices can fit together & HRM can fit with
other factors, including the strategy & the production system. A misfit represents two things
that oppose each other.
Best Practice vs Best Fit
There is an ongoing debate about the relevance & necessity of fit between HRM & other
aspects of an organisation. To fit or not to fit appears to be one of the key points of attention
in the field of SHRM over the last three decades.
Linked to this is the question of whether HR practices that are successful in one context can
be copied & be equally successful in any other branch of industry. The theoretical debate
linked to this issue of fit (or not) is known for its two competing schools: the best-fit school
vs the best-practice school.
- Best-fit school à Argue that HRM is more effective when it is aligned with its
internal & external context.
- Best-practice school à Advocates a universalistic perspective. It argues that all firms
will be better off if they identify & adopt “best practice” in the way they manage
people.
Illustration of Pfeffer’s Seven Best Practices in Practice
(1) Selective Recruitment & Selection: Might involve a combination of different
techniques, including intelligence tests, integrity tests, assessment centres & structured
interviews with HR managers, line managers & employees, with whom trainees are
supposed to work in their first assignment. The focus is on the ‘selective’ part of it &
refers to a sophisticated way of trying to recruit & select the best person for the job &
organisation.
(2) Extensive Training: May involve employee development through training programmes
outside the organisation, training on the job, e-learning through training programmes via
an intranet & coaching by another manager other than the direct supervisor.
(3) Performance Related Pay (PRP): Linked to the profits of an organisation, PRP linked to
individual & team performance & the use of yearly bonuses for the best-performing
employees in a department.
, (4) Teamworking: With autonomy & self-responsibility in work design & planning for a
group of employees. Teamwork is a way to break through the hierarchical model &
decentralise responsibility.
(5) Information Sharing & Communication: Using an intranet, the internet, newsletters,
direct supervisor talks & top management presentations. The latter refers to the
importance of the CEO’s involvement with & commitment to, major organisational
changes. Top management support & involvement in communication is crucial in the
change process of an organisation.
(6) Reduction of Status Differences: Avoiding status symbols linked to hierarchical
positions such as executive parking spaces, separate elevators for top executives, as is the
case in a large multinational bank & employees at higher positions located at higher
levels of a building, as is the case in one of the UN-related organisations.
(7) Employment Security: In terms of employee benefits providing insurance for
unemployment, disability & death for employees & their families. The possibility of
fewer restrictions on employee dismissals has been placed on the political agenda. New
labour legislation tends to strengthen the employer’s interests (more leeway) & weaken
the employee’s position (less employment security).
Pfeffer claims success for all companies that apply these seven practices in HRM. The
question remains how much impact the context of an organisation has on the success of a
certain HR practice.
Pfeffer’s best-practice proposition (one size fits all in HRM) is both supported by empirical
research & criticised for its lack of attention to contextual factors, including national
differences regarding labour legislation, sector differences, the nature of the business, the size
of the firm & different employee groups. The strength of the ‘best-practice’ model is its
simplicity & clarity.
The best-fit proposition stresses the contextual embeddedness of HRM in organisations.
According to this proposition, success can be achieved only through the appropriate fit
between HRM & its context. Context represents the set of facts or circumstances that
surrounds the organisation.
A distinction can be made between the internal & external organisational context.
- Internal: Represents the organisation’s unique history (founding father(s) – the
general beliefs, ideas, & spirit of a certain time & place – or time foundation), the
administrative heritage (organisational structures, production systems & practices
installed) & organisation cultural.
- External: Reflects the outside mechanisms that affect the organisation or even
interact with it. The external context puts pressure on an organisation & forces it to
adapt its strategy & decision-making. There are two general mechanisms that
determine the external context of an organisation: market mechanisms & institutional
mechanisms.
The Business Model & Strategy
Table of Contents
Chapter 2: Strategic Human Resource Management & Context ............................................... 3
Chapter 3: HRM & Performance: Adding Value through People ........................................... 13
Chapter 4: Analysing Work & Designing Jobs........................................................................ 20
Chapter 6: High-Performance Work Systems.......................................................................... 26
Chapter 7: Selective Recruitment and Selection ...................................................................... 30
Chapter 8: Performance Management ..................................................................................... 37
Chapter 9: Compensation......................................................................................................... 44
Chapter 10: Career Development............................................................................................. 51
Chapter 11: Talent Management .............................................................................................. 55
Chapter 14: International Human Resource Management ....................................................... 60
,USE AT YOUR OWN DISCRETION
,Chapter 2: Strategic Human Resource Management & Context
1. Understand the concept of strategy in contemporary organisations.
2. Understand the difference between best-practice approaches & best-fit approaches in
HRM.
3. Identify the four types of fit in HRM.
4. Recognise the impact of contextual factors (general environment & population
environment; market mechanisms, institutional mechanisms & configuration) on the
shaping of employment relationships in organisations.
5. Examine & analyse the context of an organisation using the model presented in this
chapter.
Introduction
The notions of fit & alignment are important features of strategic HR management (SHRM)
& are therefore key issues in this chapter. Two things that go well together represent fit. This
phenomenon can also be applied to HRM: HR practices can fit together & HRM can fit with
other factors, including the strategy & the production system. A misfit represents two things
that oppose each other.
Best Practice vs Best Fit
There is an ongoing debate about the relevance & necessity of fit between HRM & other
aspects of an organisation. To fit or not to fit appears to be one of the key points of attention
in the field of SHRM over the last three decades.
Linked to this is the question of whether HR practices that are successful in one context can
be copied & be equally successful in any other branch of industry. The theoretical debate
linked to this issue of fit (or not) is known for its two competing schools: the best-fit school
vs the best-practice school.
- Best-fit school à Argue that HRM is more effective when it is aligned with its
internal & external context.
- Best-practice school à Advocates a universalistic perspective. It argues that all firms
will be better off if they identify & adopt “best practice” in the way they manage
people.
Illustration of Pfeffer’s Seven Best Practices in Practice
(1) Selective Recruitment & Selection: Might involve a combination of different
techniques, including intelligence tests, integrity tests, assessment centres & structured
interviews with HR managers, line managers & employees, with whom trainees are
supposed to work in their first assignment. The focus is on the ‘selective’ part of it &
refers to a sophisticated way of trying to recruit & select the best person for the job &
organisation.
(2) Extensive Training: May involve employee development through training programmes
outside the organisation, training on the job, e-learning through training programmes via
an intranet & coaching by another manager other than the direct supervisor.
(3) Performance Related Pay (PRP): Linked to the profits of an organisation, PRP linked to
individual & team performance & the use of yearly bonuses for the best-performing
employees in a department.
, (4) Teamworking: With autonomy & self-responsibility in work design & planning for a
group of employees. Teamwork is a way to break through the hierarchical model &
decentralise responsibility.
(5) Information Sharing & Communication: Using an intranet, the internet, newsletters,
direct supervisor talks & top management presentations. The latter refers to the
importance of the CEO’s involvement with & commitment to, major organisational
changes. Top management support & involvement in communication is crucial in the
change process of an organisation.
(6) Reduction of Status Differences: Avoiding status symbols linked to hierarchical
positions such as executive parking spaces, separate elevators for top executives, as is the
case in a large multinational bank & employees at higher positions located at higher
levels of a building, as is the case in one of the UN-related organisations.
(7) Employment Security: In terms of employee benefits providing insurance for
unemployment, disability & death for employees & their families. The possibility of
fewer restrictions on employee dismissals has been placed on the political agenda. New
labour legislation tends to strengthen the employer’s interests (more leeway) & weaken
the employee’s position (less employment security).
Pfeffer claims success for all companies that apply these seven practices in HRM. The
question remains how much impact the context of an organisation has on the success of a
certain HR practice.
Pfeffer’s best-practice proposition (one size fits all in HRM) is both supported by empirical
research & criticised for its lack of attention to contextual factors, including national
differences regarding labour legislation, sector differences, the nature of the business, the size
of the firm & different employee groups. The strength of the ‘best-practice’ model is its
simplicity & clarity.
The best-fit proposition stresses the contextual embeddedness of HRM in organisations.
According to this proposition, success can be achieved only through the appropriate fit
between HRM & its context. Context represents the set of facts or circumstances that
surrounds the organisation.
A distinction can be made between the internal & external organisational context.
- Internal: Represents the organisation’s unique history (founding father(s) – the
general beliefs, ideas, & spirit of a certain time & place – or time foundation), the
administrative heritage (organisational structures, production systems & practices
installed) & organisation cultural.
- External: Reflects the outside mechanisms that affect the organisation or even
interact with it. The external context puts pressure on an organisation & forces it to
adapt its strategy & decision-making. There are two general mechanisms that
determine the external context of an organisation: market mechanisms & institutional
mechanisms.
The Business Model & Strategy
