Human Resource Management
Lecture 1. Introduction
30 October 2018
What is (strategic) HRM?
HRM: Involves management decisions related to policies and practices that together shape the
employment relationship and are aimed at achieving individual, organizational and societal goals.
SHRM: In addition pays extra attention to the organizational context, i.e. the alignment of HRM
(practices) with:
• Business strategy
• Institutional context
• Business systems
• Each other
MHRM: Micro HRM – micro-level inside all the practices the organization uses, i.e. occupational
health.
IHRM: International HRM – context differs between countries, cultural differences.
What organizational psychologists work on
Maximizing employee potential through:
• Testing: test development, interpretation, and analysis
• Selection: recruiting, succession planning
• Performance Evaluations/Assessments: design of job performance measurement systems,
performance appraisal/management
• Training and Development: creating and delivering learning programs, coaching & mentoring,
management development
• Employee Attitudes and Satisfaction
• Compensation and Benefits
• Employee Behavior: harassment, absenteeism, and discipline
These are all topics of this course. Chances are that a lot of us are going to work in one of these
sectors.
Maximizing organizational potential through:
• Change Management
• Job Design and Evaluation
• Organizational Structure: workforce planning, rightsizing
• Global, Cross-Cultural and Diversity Issues
• Impact of Technology in the Workplace
• Customer Service Issues
• Strategic Planning: advising on use of human capital for goals
• Workplace Health: ergonomics, safety, stress
• Analysis of Legal Issues: issues around equal employment
Approaches to HRM
1
, • Anglo-Saxon/Anglo-American models. Focus on shareholder value (profit, market value).
This is not always in the best interests of other stakeholders, such as employee → downsizing.
• Rhineland models. Based on regions around de Rijn (NL, DE). This does acknowledge
multiple stakeholders and their interests. Explicitly takes into account employee interests in
terms of well-being, and societal interests.
• The strategic balance model. Success can only be achieved when financial performance and
societal performance or an organization are above average in the particular population in
which the organization is operating. If an organization is strictly focused on profit, this may
not be in the best interest for the organization for the long term. For instance, there have been
issues with Greenpeace who created negative publicity for Shell. Shell wanted to sink an oil
platform into the sea, but they didn’t take into account that there were other stakeholders like
Greenpeace → countereffect (because it caused negative publicity).
Best practices versus best fit
Best practice approach: universalistic perspective → One size fits all HRM
• Pfeffer’s seven best practices
• High performance work systems (next session)
Best fit approach: HRM’s success depends on the alignment of it with the organizational context
• The strategy scan (today)
• Types of fit:
o Strategic (vertical) fit: fit between HR & the company’s strategy. Example: EasyJet
has a cost leadership strategy → if employees ruin their clothes and they’ve spent all
their budget for clothing, they have to pay it theirselves.
o Internal (horizontal) fit: fit between HR & other practices → HR system approaches.
It strengthens the HR strategy and philosophy of an organization, signaling the
organization’s intentions and aims through the different elements of people
management.
o Organizational fit: fit between HR & other organizational systems. Example: EasyJet
only has two different types of airplanes. This means they only need two training
programs, which is efficient for HR → Fit between the organizational system and HR
practices.
o Environmental or institutional fit: fit HR with legislation, norms and management
fashions.
HR Strategy scan
HR Strategy scan: relevant for the
degree of fit between HRM and the
context of an organization. Underlying
assumption: better fit leads to better
performance.
Example: Semco. It’s a Brazilian
company. It originally made equipment like motors for ships. It was a family owned company.
2
, Ricardo Semler is the son of the CEO and owner and took over the company. He first fires 60% of the
top managers on the first day. Then he diversifies the production (products from shipbuilding from
90% to 60% of business). However, he overworked himself completely, fainted, and he completely
changed his mind → strive to improve work-life balance for self and employees. Then the economic
crisis came → video. They created an open culture, flexible work space.
Lecture 2. Performance & High Performance Work Systems
6 November 2018
HR value chain
Understanding the value of human capital → And understand why and how they have added value.
How and why do human resources add value
The value of human resources (Delery & Shaw, 2001):
• Human capital can be a source of competitive advantage
• HR practices directly influence Human capital
• The complexity of HR systems can enhance the inimitability of the system
VRIO-framework
Valuable, Rare, Imitable, Organized → If the answer is YES to all of these, you’ll reach sustained
competitive advantage.
Inimitability depends on:
1) path dependency: do resources result from unique historical conditions?
3
Lecture 1. Introduction
30 October 2018
What is (strategic) HRM?
HRM: Involves management decisions related to policies and practices that together shape the
employment relationship and are aimed at achieving individual, organizational and societal goals.
SHRM: In addition pays extra attention to the organizational context, i.e. the alignment of HRM
(practices) with:
• Business strategy
• Institutional context
• Business systems
• Each other
MHRM: Micro HRM – micro-level inside all the practices the organization uses, i.e. occupational
health.
IHRM: International HRM – context differs between countries, cultural differences.
What organizational psychologists work on
Maximizing employee potential through:
• Testing: test development, interpretation, and analysis
• Selection: recruiting, succession planning
• Performance Evaluations/Assessments: design of job performance measurement systems,
performance appraisal/management
• Training and Development: creating and delivering learning programs, coaching & mentoring,
management development
• Employee Attitudes and Satisfaction
• Compensation and Benefits
• Employee Behavior: harassment, absenteeism, and discipline
These are all topics of this course. Chances are that a lot of us are going to work in one of these
sectors.
Maximizing organizational potential through:
• Change Management
• Job Design and Evaluation
• Organizational Structure: workforce planning, rightsizing
• Global, Cross-Cultural and Diversity Issues
• Impact of Technology in the Workplace
• Customer Service Issues
• Strategic Planning: advising on use of human capital for goals
• Workplace Health: ergonomics, safety, stress
• Analysis of Legal Issues: issues around equal employment
Approaches to HRM
1
, • Anglo-Saxon/Anglo-American models. Focus on shareholder value (profit, market value).
This is not always in the best interests of other stakeholders, such as employee → downsizing.
• Rhineland models. Based on regions around de Rijn (NL, DE). This does acknowledge
multiple stakeholders and their interests. Explicitly takes into account employee interests in
terms of well-being, and societal interests.
• The strategic balance model. Success can only be achieved when financial performance and
societal performance or an organization are above average in the particular population in
which the organization is operating. If an organization is strictly focused on profit, this may
not be in the best interest for the organization for the long term. For instance, there have been
issues with Greenpeace who created negative publicity for Shell. Shell wanted to sink an oil
platform into the sea, but they didn’t take into account that there were other stakeholders like
Greenpeace → countereffect (because it caused negative publicity).
Best practices versus best fit
Best practice approach: universalistic perspective → One size fits all HRM
• Pfeffer’s seven best practices
• High performance work systems (next session)
Best fit approach: HRM’s success depends on the alignment of it with the organizational context
• The strategy scan (today)
• Types of fit:
o Strategic (vertical) fit: fit between HR & the company’s strategy. Example: EasyJet
has a cost leadership strategy → if employees ruin their clothes and they’ve spent all
their budget for clothing, they have to pay it theirselves.
o Internal (horizontal) fit: fit between HR & other practices → HR system approaches.
It strengthens the HR strategy and philosophy of an organization, signaling the
organization’s intentions and aims through the different elements of people
management.
o Organizational fit: fit between HR & other organizational systems. Example: EasyJet
only has two different types of airplanes. This means they only need two training
programs, which is efficient for HR → Fit between the organizational system and HR
practices.
o Environmental or institutional fit: fit HR with legislation, norms and management
fashions.
HR Strategy scan
HR Strategy scan: relevant for the
degree of fit between HRM and the
context of an organization. Underlying
assumption: better fit leads to better
performance.
Example: Semco. It’s a Brazilian
company. It originally made equipment like motors for ships. It was a family owned company.
2
, Ricardo Semler is the son of the CEO and owner and took over the company. He first fires 60% of the
top managers on the first day. Then he diversifies the production (products from shipbuilding from
90% to 60% of business). However, he overworked himself completely, fainted, and he completely
changed his mind → strive to improve work-life balance for self and employees. Then the economic
crisis came → video. They created an open culture, flexible work space.
Lecture 2. Performance & High Performance Work Systems
6 November 2018
HR value chain
Understanding the value of human capital → And understand why and how they have added value.
How and why do human resources add value
The value of human resources (Delery & Shaw, 2001):
• Human capital can be a source of competitive advantage
• HR practices directly influence Human capital
• The complexity of HR systems can enhance the inimitability of the system
VRIO-framework
Valuable, Rare, Imitable, Organized → If the answer is YES to all of these, you’ll reach sustained
competitive advantage.
Inimitability depends on:
1) path dependency: do resources result from unique historical conditions?
3
