Strategic Human Resource Management
Hoorcollege 1; Chapter 1; introduction SHRM 21th century 29-08-16
Definition of HRM; Employee matterandthe management ofemployees (human resource management) is a
potential source for achievingorganizational goals.
Strategic HRM; a definition of HRM as “involving management decisions related to policies and practices that
together shape the employment relationships and are aimed to achieving goals, individual organizational and
societal”. (Boselie 2014 p.5)
SHRM pays extra attention to organizational context alignment with business strategy.
SHRM in the 21th century; Topics related to SHRM;
Impact of organizational change
MHRM, IRHM & SHRM (micro, international and strategic)
Multi-dimensional model of SHRM
Competitiveness
Stakeholder approaches (stakeholders are creditors, directors, employees, government (and its agencies), owner,
(Shareholders, owners of shares of the company), suppliers, unions, and the community from which the business
draws its resources)
Balanced approach
Impact of organizational change;
Acquisitions (Mergers and acquisitions, strategy of buying and selling of various companies to quickly grow a
company)
Mergers
Reorganizations
Strategic alliances (A strategic alliance is an arrangement between two companies that have decided to share
resources to undertake a specific, mutually beneficial project)
Private equity interventions
Global crisis
Financial crisis
Aging population
impact on organization impact on employees
The relevance of optimal coping with change is embedded in the concept of competitive advantage
which is important for organizational survival,
and is at least partly manageable by humanresource management.
Subthemes of HRM; MHRM, IRHM & SHRM
Micro HRM (MHRM);
o individualfeelings andperspective of people.
o Covers sub-functions of HR policy and practice (recruitment & selection)
o Close link to academic field of organizational behaviour andoccupational psychology.
International HRM (IHRM);
o how HR functions worldwide, and being in a different country and function well.
o IHRM concerned with HRM in multinational companies of across borders.
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, o Looks both at the international potentialof HR practices, but also at the international potential of
employees.
Strategic HRM (SHRM);
o focus on linking an business strategy. Addvalueto good peoplemanagement.
o 1 big role which is linked to each other influences across different departmentsresponsible to different
stakeholders.
o SHRM focuses onlinking HRM to the business strategy.
o The concept of ‘fit’ plays a central role within SHRM.
-Internal stakeholders: employees, line managers, top management, employee representatives
-External stakeholders: shareholders, financiers, trade unions, national government, local government and other
interest groups (ex. greenpeace)
Three perspectives; in Studying SHRM Practices (multidimensionele strategische HR-model):
A multi actor perspective; multiple stakeholders including employees, managers, hr professionals, work
councils, trade unions, top management, shareholders, financiers and government.
A broad societal view; with an emphasis on different institutionalcontexts, for example on the level of
branches of industry, regions and countries.
A multi level perspective; including the individualemployee perspective, and the strategic organizational
perspective.
Paauwe (2004) view on HRM
Human resource are something more than just resources
HRM is not concerned solelywithfinancial performance
HRM focuses on the exchange relationshipbetweenemployee andorganization
And the shaping of the employment relationship takes place in an area of continuous tensionbetweenthe
addedvalue(hardHRM) andmoralvalues(softHRM)
Arbeidsverhoudingen vragen om verschillende typen contracten:
-Legal contract (vakantiedagen, rechten en plichten van de werknemer, contract v.d. medewerker)
-Economic/transactional contract (salaris, hoeveel moeite/uur steekt de werknemer in het werk);
-Psychologicalcontract (verwachtingen tussen de werknemer en organisatie, staat niet geschreven);
-Sociological contract (bijv. de band met collega’s in een team).
SHRM through different frames
Structural frame;technical functions of HR, roles, static structure, cannot be influenced.
HR/psychologicalframe; individual, what are the skills, background of the employee.
Political frame; power andconflict, what do we see, potention between people.
Symbolic frame;cultural, what is the identity of the organization.
*Legge (1995): Continuous tension between addedvalue (economic side of organizational work) and moralvalues
(employees as human being with feelings, emotions, opinions)
- Hard HRM mainly focuses on economic value (human resource management)
- Soft HRM mainly focuses on the human side of organizing (human resource management)
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, Boxall & Purcell (2003): De uitdaging van HRM is om weer een balans te vinden tussen economische en morele
aspecten. Het traditionele personeelsmanagement focuste alleen op de waardevolle werknemers die talent hebben.
Het nieuwe HRM-model focust op het gehele personeelsbestand;
HRM cover allworkforce groups, including core employees, perhaps employees and contingent workers.
HRM involves line andspecialistmanagers and is not solely aimed at employees.
HRM is all about managing work and people, collectively(groups) andindividual.
HRM is embedded in industries and societies.
-Anglo-Amerikaanse model focust op het creëren van waarde voor aandeelhouders (shareholders)
-Rijnlandmodel focust ook op andere stakeholders, zoals werknemers.
The balanced approach !!
Goals of the individual employee
Organizational goals
Societal goals (in lijn met organisatie doelen)
Balancing financial and societal performance Moral standards, key to success Organizational goals, society
goals.
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, Chapter 3; HRM and Performance
HRM and performance; adding value through people
VRIO framework (Barney en Wright 1998) = Value, Rareness, Inimitability and Organization
hierarchical framework for determine potential organizational succes through internalresource
There are different performances
First level= are the resource valuable or not. valuable = normal performance
Valuable + rare temporary competitive advantage and above-average performance
Inimitability is one of the most important qualities of the resources 3de level of the VRIO
Pathdependency = dependent on unique historicalconditions (time line model)
Causal ambiguity = causalerelaties, link between resources possessed by an organization and its
sustained competitive advantage. (x y and z events -> schuine vierhoek model)
Social complexity = resources generated by an organizations advantage anddifficult to understand.
(social network between people, kris kras model van relaties tussen personen)
-Temporary competitive advantage can be created by resources that are valuable andrare.
-Sustained competitive advantage mogelijkheid om critical success factors te ontwikkelen (HR goals) die leiden
tot succes. Are affected by employee attitudes these can be influenced by HRM. Sustained competitive advantage
can be created by resources that are valuable rare difficult to imitate and supported by the organization.
Next step: creation of a value chain in HRM is linking the notion of competitive advantage goal:
Link the competitive advantage with the organizational performance.
1. Create+ maintain viability (bestaanstrecht) with adequate return to shareholders (level 2+3 vrio)
2. Striving for sustained competitive advantage
3. linking the ultimate business goals to organizational performance (HR and non-HR goals)
Critical HR goals in Boxall and Purcell’s (2003) basic framework focus on 3 desired types and level outcomes.
Labour productivity (cost effectiveness)
o Productivity represents the amount of output per unit of input. Costeffectiveness is a combination of
labour productivity and product/service quality for customers.
4
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, Organizational flexibility; is thecapacityto change andor adapt.
o Numerical flexibility; flexibility in the use of employees; high and low season
o Functional flexibility; how many employees are capable to perform multiple tasks and functions. (job
rotation, teamwork, job enlargement and job enrichment)
o Mental flexibility; the willingness to change without resistance of employees;
o Agility; which is the ability for the organization to adapt easily to changes in external environment.
Social legitimacy and employment citizenship;
o More based on macro level, the legitimacy of anorganization to the outside environment. Relation to
society, consumers, trade unions and government.
o Micro level; the legitimacy to itsownemployees.
Critical non-HR goals:
o Desired outcomes for sales andmarket shares (door het WK worden er meer TV’s verkocht)
4. Link critical HR goals to HR outcomes.
HR outcomes: HR outcomes are much closer to actual HR practices and interventions than performance indicators
such as sales, profits and market value (distal outcomes). =distal outcomes because of their distance from managerial
practices, including human resource practices.
Proximal outcomes: are directly or almost directly affected by HR interventions or practices. HR outcomes are
proximal outcomes. (Employee satisfaction, commitment, motivation, trust, loyalty)
HRM heeft een positieve invloed op de functioneren van een organisatie
Distal outcomes; performance indicators as sales, profits and market value.
Proximal outcomes; are affected by HR intervention HR outcomes as employee satisfaction, motivation.
5. De HR-practices zorgen ervoor dat de HR-goals bereikt kunnen worden
To fully understand HR practices, a further distinction can be made between: Wright and Nisshi
HR activities:
1. Intended HR practices: policies and intended new HRpractices (made by HR professional)
2. Actual HR practices: after the intro of the new system, practices implementedby linemanagers
3. Perceived HR practices: employees’ experiences andperceptions of HR practices implemented by their direct
supervisor
HR value chain;
1. Competitive advantage -> starting point of an organization
2. Temporary andsustainedcompetitive advantage are represented by the UBG’s (unique business goals) ->
affected by the critical and non critical HR goals.
3. The criticalHR goals (productivity, flexibility and social legitimacy) -> are affectedby the HR outcomes
(attitudes, behaviours and cognitive aspects of employees)
4. HRoutcomes canbe positively influencedbythe HR practices.
-> the nature of practices, outcomes, critical HR goals and UBG’s is highly affected by ->
The nature of business of the organization (manufacturing or service)
Strategic choices made by the organization.
Employees can be a source of competitive advantage for an organization.
internalresources that are valuable, rare, inimitableandnon-substitutable can be a source of sustained
competitive advantage when supported by an organization.
5
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Downloaded by Abdra Sree ()
Hoorcollege 1; Chapter 1; introduction SHRM 21th century 29-08-16
Definition of HRM; Employee matterandthe management ofemployees (human resource management) is a
potential source for achievingorganizational goals.
Strategic HRM; a definition of HRM as “involving management decisions related to policies and practices that
together shape the employment relationships and are aimed to achieving goals, individual organizational and
societal”. (Boselie 2014 p.5)
SHRM pays extra attention to organizational context alignment with business strategy.
SHRM in the 21th century; Topics related to SHRM;
Impact of organizational change
MHRM, IRHM & SHRM (micro, international and strategic)
Multi-dimensional model of SHRM
Competitiveness
Stakeholder approaches (stakeholders are creditors, directors, employees, government (and its agencies), owner,
(Shareholders, owners of shares of the company), suppliers, unions, and the community from which the business
draws its resources)
Balanced approach
Impact of organizational change;
Acquisitions (Mergers and acquisitions, strategy of buying and selling of various companies to quickly grow a
company)
Mergers
Reorganizations
Strategic alliances (A strategic alliance is an arrangement between two companies that have decided to share
resources to undertake a specific, mutually beneficial project)
Private equity interventions
Global crisis
Financial crisis
Aging population
impact on organization impact on employees
The relevance of optimal coping with change is embedded in the concept of competitive advantage
which is important for organizational survival,
and is at least partly manageable by humanresource management.
Subthemes of HRM; MHRM, IRHM & SHRM
Micro HRM (MHRM);
o individualfeelings andperspective of people.
o Covers sub-functions of HR policy and practice (recruitment & selection)
o Close link to academic field of organizational behaviour andoccupational psychology.
International HRM (IHRM);
o how HR functions worldwide, and being in a different country and function well.
o IHRM concerned with HRM in multinational companies of across borders.
1
RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR Downloaded by Abdra Sree ()
, o Looks both at the international potentialof HR practices, but also at the international potential of
employees.
Strategic HRM (SHRM);
o focus on linking an business strategy. Addvalueto good peoplemanagement.
o 1 big role which is linked to each other influences across different departmentsresponsible to different
stakeholders.
o SHRM focuses onlinking HRM to the business strategy.
o The concept of ‘fit’ plays a central role within SHRM.
-Internal stakeholders: employees, line managers, top management, employee representatives
-External stakeholders: shareholders, financiers, trade unions, national government, local government and other
interest groups (ex. greenpeace)
Three perspectives; in Studying SHRM Practices (multidimensionele strategische HR-model):
A multi actor perspective; multiple stakeholders including employees, managers, hr professionals, work
councils, trade unions, top management, shareholders, financiers and government.
A broad societal view; with an emphasis on different institutionalcontexts, for example on the level of
branches of industry, regions and countries.
A multi level perspective; including the individualemployee perspective, and the strategic organizational
perspective.
Paauwe (2004) view on HRM
Human resource are something more than just resources
HRM is not concerned solelywithfinancial performance
HRM focuses on the exchange relationshipbetweenemployee andorganization
And the shaping of the employment relationship takes place in an area of continuous tensionbetweenthe
addedvalue(hardHRM) andmoralvalues(softHRM)
Arbeidsverhoudingen vragen om verschillende typen contracten:
-Legal contract (vakantiedagen, rechten en plichten van de werknemer, contract v.d. medewerker)
-Economic/transactional contract (salaris, hoeveel moeite/uur steekt de werknemer in het werk);
-Psychologicalcontract (verwachtingen tussen de werknemer en organisatie, staat niet geschreven);
-Sociological contract (bijv. de band met collega’s in een team).
SHRM through different frames
Structural frame;technical functions of HR, roles, static structure, cannot be influenced.
HR/psychologicalframe; individual, what are the skills, background of the employee.
Political frame; power andconflict, what do we see, potention between people.
Symbolic frame;cultural, what is the identity of the organization.
*Legge (1995): Continuous tension between addedvalue (economic side of organizational work) and moralvalues
(employees as human being with feelings, emotions, opinions)
- Hard HRM mainly focuses on economic value (human resource management)
- Soft HRM mainly focuses on the human side of organizing (human resource management)
2
RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR Downloaded by Abdra Sree ()
, Boxall & Purcell (2003): De uitdaging van HRM is om weer een balans te vinden tussen economische en morele
aspecten. Het traditionele personeelsmanagement focuste alleen op de waardevolle werknemers die talent hebben.
Het nieuwe HRM-model focust op het gehele personeelsbestand;
HRM cover allworkforce groups, including core employees, perhaps employees and contingent workers.
HRM involves line andspecialistmanagers and is not solely aimed at employees.
HRM is all about managing work and people, collectively(groups) andindividual.
HRM is embedded in industries and societies.
-Anglo-Amerikaanse model focust op het creëren van waarde voor aandeelhouders (shareholders)
-Rijnlandmodel focust ook op andere stakeholders, zoals werknemers.
The balanced approach !!
Goals of the individual employee
Organizational goals
Societal goals (in lijn met organisatie doelen)
Balancing financial and societal performance Moral standards, key to success Organizational goals, society
goals.
3
RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR Downloaded by Abdra Sree ()
, Chapter 3; HRM and Performance
HRM and performance; adding value through people
VRIO framework (Barney en Wright 1998) = Value, Rareness, Inimitability and Organization
hierarchical framework for determine potential organizational succes through internalresource
There are different performances
First level= are the resource valuable or not. valuable = normal performance
Valuable + rare temporary competitive advantage and above-average performance
Inimitability is one of the most important qualities of the resources 3de level of the VRIO
Pathdependency = dependent on unique historicalconditions (time line model)
Causal ambiguity = causalerelaties, link between resources possessed by an organization and its
sustained competitive advantage. (x y and z events -> schuine vierhoek model)
Social complexity = resources generated by an organizations advantage anddifficult to understand.
(social network between people, kris kras model van relaties tussen personen)
-Temporary competitive advantage can be created by resources that are valuable andrare.
-Sustained competitive advantage mogelijkheid om critical success factors te ontwikkelen (HR goals) die leiden
tot succes. Are affected by employee attitudes these can be influenced by HRM. Sustained competitive advantage
can be created by resources that are valuable rare difficult to imitate and supported by the organization.
Next step: creation of a value chain in HRM is linking the notion of competitive advantage goal:
Link the competitive advantage with the organizational performance.
1. Create+ maintain viability (bestaanstrecht) with adequate return to shareholders (level 2+3 vrio)
2. Striving for sustained competitive advantage
3. linking the ultimate business goals to organizational performance (HR and non-HR goals)
Critical HR goals in Boxall and Purcell’s (2003) basic framework focus on 3 desired types and level outcomes.
Labour productivity (cost effectiveness)
o Productivity represents the amount of output per unit of input. Costeffectiveness is a combination of
labour productivity and product/service quality for customers.
4
RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR Downloaded by Abdra Sree ()
, Organizational flexibility; is thecapacityto change andor adapt.
o Numerical flexibility; flexibility in the use of employees; high and low season
o Functional flexibility; how many employees are capable to perform multiple tasks and functions. (job
rotation, teamwork, job enlargement and job enrichment)
o Mental flexibility; the willingness to change without resistance of employees;
o Agility; which is the ability for the organization to adapt easily to changes in external environment.
Social legitimacy and employment citizenship;
o More based on macro level, the legitimacy of anorganization to the outside environment. Relation to
society, consumers, trade unions and government.
o Micro level; the legitimacy to itsownemployees.
Critical non-HR goals:
o Desired outcomes for sales andmarket shares (door het WK worden er meer TV’s verkocht)
4. Link critical HR goals to HR outcomes.
HR outcomes: HR outcomes are much closer to actual HR practices and interventions than performance indicators
such as sales, profits and market value (distal outcomes). =distal outcomes because of their distance from managerial
practices, including human resource practices.
Proximal outcomes: are directly or almost directly affected by HR interventions or practices. HR outcomes are
proximal outcomes. (Employee satisfaction, commitment, motivation, trust, loyalty)
HRM heeft een positieve invloed op de functioneren van een organisatie
Distal outcomes; performance indicators as sales, profits and market value.
Proximal outcomes; are affected by HR intervention HR outcomes as employee satisfaction, motivation.
5. De HR-practices zorgen ervoor dat de HR-goals bereikt kunnen worden
To fully understand HR practices, a further distinction can be made between: Wright and Nisshi
HR activities:
1. Intended HR practices: policies and intended new HRpractices (made by HR professional)
2. Actual HR practices: after the intro of the new system, practices implementedby linemanagers
3. Perceived HR practices: employees’ experiences andperceptions of HR practices implemented by their direct
supervisor
HR value chain;
1. Competitive advantage -> starting point of an organization
2. Temporary andsustainedcompetitive advantage are represented by the UBG’s (unique business goals) ->
affected by the critical and non critical HR goals.
3. The criticalHR goals (productivity, flexibility and social legitimacy) -> are affectedby the HR outcomes
(attitudes, behaviours and cognitive aspects of employees)
4. HRoutcomes canbe positively influencedbythe HR practices.
-> the nature of practices, outcomes, critical HR goals and UBG’s is highly affected by ->
The nature of business of the organization (manufacturing or service)
Strategic choices made by the organization.
Employees can be a source of competitive advantage for an organization.
internalresources that are valuable, rare, inimitableandnon-substitutable can be a source of sustained
competitive advantage when supported by an organization.
5
RRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRRR
Downloaded by Abdra Sree ()
