HRM Strategy

Human Resource Strategy

Chris Jarvis

HRM Strategy

The Idea of Strategic HRM

No definitive, robust theory. No agreement on meaning, factors, outcomes. how is SHRM linked with organisational performance? difficult to establish firm relationships given intervening factors: structure, culture & wider environment various typologies of business and associated HR strategies Empirical studies tend to use

large-scale questionnaire surveys (Storey) case-studies on SHRM.

Theoretical &empirical gaps between rhetoric and real experience - downsizing and redundancies etc.

Chris Jarvis

HRM Strategy

Stages in a Corporate Strategy Process

Organisation Mission and Goals

(Define the business)

(current situation, programmes and performance) (current situation, programmes and performance)

Strategic Analysis Strategic Analysis Strategic Choice Strategic Choice

Rational, logical versus interpreted & political

(bounded rationality, shaping the environment) (bounded rationality, shaping the environment)

(programmes, resources & responsibilities) (programmes, resources & responsibilities)

Strategy Implementation Strategy Implementation

Chris Jarvis

HRM Strategy

Planning Levels

Corporate Level

CEO Corporate HQ

Business Level

Aviation

Heating

Trucks

Plastics Consultancy

Functional Level
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Manufacturing Marketing

Accounting R&D
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HRM Strategy

Strategy Formulation

Managers analyse the situation & develop strategies to achieve the mission. SWOT analysis: planning to identify

Organizational Corporate & business plans Strengths: manufacturing ability, Short-term - less than 1 yr. marketing skills Functional plans? Weaknesses: high labor turnover, weak Rolling cycle - amend plans constantly? financials. Environmental Opportunities: new markets Threats: economic recession, competitors

Long-term - 5+ yrs Intermediate-term 1- 5 yrs.

Chris Jarvis

HRM Strategy

Standard Corporate Planning Picture

SWOT + STEEPLE Internal & external analysis

Corporate strategy develop a plan of policies, allocations, programmes to maximise long-run value

Chris Jarvis

Concentrate Diversify Globalize Vertically Integrate Down-size Flexible firm

Grow Stabilize Retrench React/Panic

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HRM Strategy

Manifestation of Strategy and Policy

Maintenance

Standing plans (programmed decisions) policies, rules, and standard operating procedures (SOP).

general and specific guides to action. Programme arrangements and allocations. Innovations New initiatives, programmes and projects

re ta ha W
Chris Jarvis

or f se he t

? RM H

HRM Strategy

Schools of Strategy

Prescriptive

Descriptive Schools (metaphors)

Design School Strategy (formation as a process of conception) Planning (formal process) Positioning (analytical process and techniques)
Source: Mintzberg, Ahlstrand, Lampel, Enterpreneurial (visionary) 1998, Strategy Safari, Prentice Hall Cognitive (mental) Learning (emergent, adaptation, incremental) Power (a process of negotiation between interests) Cultural (collective values, beliefs and behaviours) Environmental (reactive, contingent) Configuration (process of transformation from one state to another - management of change) Source: Mintzberg, Ahlstrand, Lampel,

Chris Jarvis

HRM Strategy

Michael Porter -- Value-Added Chain Analysis

Support Activities

Technology development Procurement

Primary Inbound Activities logistics

Operations Outbound logistics

Marketing and sales

After sales service

Support Activities

Employee management Firms infrastructure

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Chris Jarvis

HRM Strategy

Mintzberg on Strategy

Plan (intended) direction, guide, a course of action. Pattern (realised)

Position

consistency in behaviour over time e.g. high end, low risk, patterns evolved out of the past. What plan have we actually pursued over the last 5 years? Locating our HRM in a position, unique and valuable, involving a set of activities, X marks the spot. look inwards and upwards to a grand vision of the enterprise. The theory (mind-set) of the business. Less easy to change than position e.g. from bureaucracy to innovation.

Perspective

Ploy (specific manoeuvres)

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HRM Strategy

Deliberate and emergent strategies

Int St end ra teg ed y De St libe ra teg rate y

Unrealised Strategy

Real is Strat ed egy

Emergent

Chris Jarvis

Source: Mintzberg, Ahlstrand, Lampel, 1998, Strategy Safari, Prentice Hall

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HRM Strategy

Form and Formation Set direction Set direction but unknown waters, move but unknown waters, move quickly or slowly? quickly or slowly? Focuses effort Focuses effort unity vs group-think & unity vs group-think & peripheral vision peripheral vision Defines the organisation Defines the organisation a shorthand but slogans may a shorthand but slogans may override complexity & distort override complexity & distort reality reality Provides consistency Provides consistency Provide order, a cognitive Provide order, a cognitive structure to simplify, explain & structure to simplify, explain & facilitate action but creativity facilitate action but creativity thrives on loose order thrives on loose order
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Strategies have a form and they are formulated

So what is the form of HRM strategy of organisation X? Deliberate broad outlines with details emerging en-route

Steerage and Umbrellas

Chris Jarvis

HRM Strategy

CEO and HR Director as strategists

Interpersonal figurehead leader Information Processing liaison monitor disseminator Spokesperson Decision-making initiator/changer resource allocator disturbance handler negotiator

Conceive the big idea? Let everyone else get on with the details? But the job is not like this Mintzberg on managerial roles

(after H Mintzberg)

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HRM Strategy

Corporate-Level Strategies

Stick to the knitting - focus on core business Diversification

Related : similar areas - build upon existing divisions synergy & core competencies Unrelated - portfolio business in new areas Corporate failure? Implicit strategy? Avoid resource-consuming activity Disdain for formal planning but reliance on consistency of behaviour at all levels. No frills, non-bureaucratic organisation No recipe to decrease flexibility, block learning & adaptation Tension between control and discretionary freedom.

No declared strategy?

Chris Jarvis

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HRM Strategy

International HRM Strategy

Global: HRM diversity for different conditions single, standard scheme across all countries? Domestic: national schemes? Common
adaptation &acceptance of national differences? values, ethics in decision-making
public sector institutions? Common professions/occupations

personnel system discretion for semi-autonomous

divisions to take advantage of local circumstances?

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HRM Strategy HRM Services and the Product Life Cycle

Maturity Growth Develop or decline

Profit

/volume

Start-up

Loss

Implications for

Time
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Recruitment? Rewards? Training & Development? Employee Relations? Organisational development?

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HRM Strategy

Analysis of HR Services

Deliverables: capacity and capability Can we deliver? What do we deliver and how well? Efficiency

Adaptability short + long term responses to pressure and change Benchmarking

efficiencies, processes & outputs investment - , technical and human quality, systems, research and intelligence

How well is the process offered, managed and controlled? What are the transformation indicators and service quality ratios? cost/unit, cost/recruit, performance/employee, cost/HR intervention?

Chris Jarvis

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HRM Strategy

Common-sense propositions on quality

No focus on quality - lose market share and reputation. Good reputation is easier to lose than regain. People trust and become accustomed to favourites They remember the bad. "I'll never go there again". New loyalties with substitute suppliers. Complacency breeds neglect. It takes a major operational and psychological effort to Common-sense either forgotten or only realised post hoc
Chris Jarvis

maintain quality vigilance (entropy). regain a lost reputation.

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HRM Strategy

What is Quality?

....... a perception of class, excellence, a type of "referential" standard or (in definition) reflecting needs and expectations of customer. Guru definitions : product or service, nature or features reflecting capacity to satisfy express or implied statements of need (Deming) conformance to requirements (Crosby) fitness for purpose or use (Juran) product/service characteristics as offered by design, marketing, manufacture, maintenance and service that meet customer expectations (Feigenbaum) Oakland (1995) - perceivable, measurable move from mere satisfaction to "delight and reputation for excellence". Reliability. Next door swears by her 8-year old Zanussi!

Chris Jarvis

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HRM Strategy

Elements of a Quality Policy

organisation structure for quality: roles, responsibilities how client/customer needs and perceptions will be identified technical/economic resource allocation QMS scheme & operation how suppliers & supplies will be required to meet standards prevention & zero defects/CQI approach vs. "inspect-out" communication, knowledge, information & staff development audit of QMS in operation Partnership with staff, customers and suppliers. Physical manifestation not just conceptual
Chris Jarvis

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HRM Strategy

TQM - a Strategy and Discourse

an approach to improving the competitiveness, effectiveness

and flexibility of a whole organisation..... a way of planning, organising and understanding each activity and it depends on each individual at each level. TQM is a way of ...... bringing everyone into the processes of improvement Oakland 1995

how a TQM programme requires re-evaluation of of their work and organisational members address the quality the service processes.

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HRM Strategy

TQM underpinned by policy commitment

A culture and practice change strategy Organisational renewal Injection of energy Staff encouraged in positive, initiative taking behaviours Adopt a prevention and CQI ethic Quality improvement teams/circles Use of a variety of methods and techniques (tools)

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HRM Strategy

Kaizen: Continuous Quality Improvement (CQI)

critical view of organisational performance standards continuously challenge & incrementally upgrade performance levels contribution and role of HR team attitude (ownership), involvement and team effort as the key to improvement HR team - line manager relationships

Chris Jarvis

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HRM Strategy

Classical functional, problem analysis cycle

Situation analysis Problem definition Objectives and resourcing Solution development - options and best fit from DO NOTHING to DO
EVERYTHING. Min/Max, optimistic/pessimistic, high/low budget etc.). Test models against objectives and constraints Implementation analysis detailed planning for operational implementation. analysis for potential problems scheduling, work allocation, capacity management, communicating, monitoring systems & overall coordination.

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HRM Strategy

Questions for Quality Strategy

Who are our direct and indirect clients Define characteristics, needs, requirements? Design features of services? How can we delight beyond the basic specification? Design improvement projects? Who, by when & at what cost? Operational ability to bridge the gaps? Information & monitoring systems? Supply chain analysis - performance & communication?
Chris Jarvis

How do clients perceive these? Bench-mark comparisons Which features do not compete?

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HRM Strategy

Specifying HR Quality

for Essential contractqualitysupply of service. in a contract ensuring delivered

Design quality dimensions include: Features, performance, delivery, cost, reliability,

measurement: Conformanceservice design specification is met Degree to which

Implications of failure to draw up a clear specification?

durability, serviceability, response, aesthetics, reputation.

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HRM Strategy

ISO 9000 Certification for HR Services?

The parties & organisational level? Detailed specification

work done to plan, in the defined ways?

what best practice will be (product & process definition) contract volume, milestones, stage deliverables? CSFs/CQFs for inputs, processes, outputs? QA/QC methods? inspection, testing and monitoring staged prices and conditions? variation orders vs. extras penalties? audit trail client liaison
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Chris Jarvis

HRM Strategy

Clauses of ISO 9000

4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 4.10 4.11 4.12 4.13 4.14 4.15 4.16 4.17 4.18 4.19 4.20 Management Quality Plans Contracts Controlling design - not ISO 9002 Controls using documents and data Purchasing and supply Customer-supplied equipment Product identification and tracing Process controls Inspection/testing Measuring and test equipment Identify status of inspected goods Control over non-conforming products Corrective and preventative action Handling, storage, packaging, preserving and delivery Records for quality Internal audits Training Servicing Using Statistics

m? ste sy the ing tain ain dm an g tin i ti a f in ts o os C

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HRM Strategy

USA Baldrige National Quality Award (1999)

Criteria for Performance Excellence

Leadership (weighting 125 points) Strategic Planning (85) Customer & Market Focus (85) Information and Analysis (85) Human Resource Focus (85) Process Management (85) Business Results (450)
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Chris Jarvis

HRM Strategy

References

Chris Jarvis

Gratton L, Hope-Hailey V, Stiles P. and Truss C, (1999) Strategic HRM: Corporate Rhetoric and Human Reality, OUP. Huselid M, (1995) The Impact of Human Resource Management Practices on Turnover, Productivity and Corporate Financial Performance . Academy of Management Journal, Vol. 38, No. 3, pp. 635-672. Kamoche K. (1994) A Critique and a Proposed Reformulation of Strategic HRM . HRM Journal, Vol. 4, No. 4, pp.29-43. Miles R and Snow C. (1984) Designing Strategic Human Resources Systems, Organizational Dynamics, Summer: 36-52. Swiercz P. (1995) Strategic HRM, Human Resource Planning, 18,3, p.53-. Truss C. (2001 forthcoming) Complexities and Controversies in Linking HRM with Organisational Outcomes . Journal of Management Studies. Truss C. and Gratton L. (1994) Strategic HRM: A Conceptual Approach . International Journal of HRM, 5,3, pp.663-686. Truss C, Gratton L, Hope-Hailey V, McGovern P, & Stiles P. (1997) Soft & Hard Models of HRM: A Reappraisal . Journal of Management Studies, 34,1, pp.53-73. Wright, P. and McMahan, G. (1992) Theoretical Perspectives for Strategic HRM , Journal of Management, Vol. 18, No. 2, pp. 295-320.

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