(An Overview)
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Contrasting the Two Approaches Research provides support for both positions What drives strategy?
I/O: External considerations RBV: Internal considerations
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Level of Strategy
Corporate Strategy
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Personnel Management
HRM
Time and planning perspective Psychological contract Control system Employee relation perspective Preferred structures/systems Roles Evaluation criteria
Source: Guest, 1987: 507.
Short-term, reactive, adhoc, marginal Compliance External control Pluralist, collective, low trust Bureaucratic/mechanistic, centralist, formal defined roles Specialist/professional Cost-minimization
Long-term, proactive, strategic, integrated Commitment Self control Unitarist, individual, high trust Organic, devolved, flexible roles Largely integrated into line management Maximum utilization (human asset accounting)
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HR Management Roles
Administrative Role
Processing and record keeping
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HR Management Roles
Strategic Role
Having a seat at the table by contributing to organizational results and success. HR becomes a strategic business partner by:
Focusing on developing HR programs that enhance organizational performance. Involving HR in strategic planning at the onset. Participating in decision making on mergers, acquisitions, and downsizing. Redesigning organizations and work processes Accounting and documenting the financial results of HR activities.
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Maintains the status quo by making only slight refinements for efficiency or costcostsavings Maintains a reactive posture through offering services and support in response to events
Proactively anticipates events in order to prevent problems or 14 minimize their negative impact
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Change Agent
Effecting transformation & change Create cross-functional collaboration & organization crossreadiness to accomplish change initiatives & performance results
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Employee Champion
Motivated & competent personnel Develop employee competencies with continuous skills & knowledge management; foster achievement/ performance recognition programs
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Administrative Expert
Employee Advocate
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Strategic HRM
Strategic Human Resource Management
A pattern of planned human resource deployments and activities intended to enable an organisation to achieve its goals. The linking of HRM with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility. Involves aligning initiatives involving how people are managed with organizational mission and objectives Formulating and executing HR systemsHR policies and systems activities activitiesthat produce the employee competencies and behaviors the company needs to achieve its strategic aims.
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The proposition an organization follows for how to compete successfully and thereby survive and grow.
The use of employees to gain or keep a competitive advantage, resulting in greater organizational effectiveness.
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Corporate HR Strategies
Figure 36
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Figure 39
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Approach to HRM
1. Best Practice 2. Best Fit 3. Configurational The basic idea of Best Practise is universalism; there is a general pattern that can be adopted for managing human resource.
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Accommodative follow the lead from the top Interactive two-way interactions twoFully integrated intimate associations Dependent on HR structure i.e.
No HR function Line managers alone Line managers, with centralised HR support Centralis Centralised functional generalists Centralised functional specialists Decentralised functional generalists or specialists Contract specialists
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Example HR Strategy
Offer wage rates that are equitable and non-discriminatory nonin every location; teach job skills; reward both individual and team performance; create career opportunities; have flexible work hours for student employees. Hire restaurant crews with good work habits and courteous attitudes and train them to act in ways that will impress customers; promote promising employees quickly. Provide proper training on delivering customer satisfaction and running a fast-food business to franchisees, fastrestaurant managers, and assistant managers. Promote a global mindset by aggressively transferring best practices and new ideas developed in outlets in one part of the world to outlets in other parts of the world.
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HR Policies
Policy-making is about strategy execution Policy Benefits of policies:
Congruency (with objectives) Stability (clear picture of what is required) Match (work environment) Appropriateness (fit with culture) Relationship building (needed for new strategies to be well received)
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HR capability
HR actions
Emergent strategies
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Unions
Legal Considerations
Society
Technology
Marketing
Operations
Unanticipated Events
Finance
Shareholders
Customers
Competition
Labor Market
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Exhibit 9.1
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Consistency Fit
Environment
Consistency
HR Strategies
Fit Consistency
Fit
Organizational Characteristics
Individual Capabilities
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How HR Fits
HR Tactic
HR Strategy
Firm Strategy
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Growth
Recruit adequate numbers and mix of qualifies workers. Plan management succession. Mange rapid internal labor market movements
Meet external market but consider internal equity effects. Establish formal compensation structures.
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STAFFING
COMPENSATION
Maturity
Encourage sufficient turnover to minimize layoffs and provide new openings. Encourage mobility as reorganizations shift jobs around. Plan and implement workforce reductions and reallocations, downsizing and outplacement may occur during this stage.
Decline
Improve productivity and achieve flexibility in work rules. Negotiate job security and employmentadjustment policies
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