“the intentions of the corporation both explicit and covert, toward the management of its employees, expressed through philosophies, policies and practices”.
Schuler and Walker (1990) define HRS as:
“a set of processes and activities jointly shared by human resources and line managers to solve business-related problems”
This approach interprets HRS as a way in which a planned objective is achieved. Strategy is seen as undefined until it has occurred. No set strategy is actually defined and HRS is seen as an emergent process. However, Bamberger and Meshoulam (2000 p.15), define HRS as:
“an outcome: the pattern of decisions regarding the policies and practices associated with the HR system.”
This definition suggests that HRS can be derived from the decisions made by the firm.
Due to the many different perspectives and standpoints found in HRS literature, it is preferable to have a clear opinion on the definition of HRS. In my opinion, HRS is a combination of these two definitions – i.e. HRS is a set of activities and processes, which result in an outcome. During the course of this essay, I will attempt to justify my definition of HRS using the subjects as outlined above.
The Emergence of HRS - A Rationale:
Business environments today are rapidly changing – the ways in which companies operate, and achieve and maintain competitive advantage are constantly evolving. These changes can be directly attributed to the introduction of new technology, and increased competition and diversity due to the ongoing phenomenon of globalisation. The challenges that face businesses today involve the management of these changes, i.e. introducing new technology, managing growth etc.
Over the past twenty years, authors in the fields of Strategic Management and Human Resource Management, and also firms themselves, have recognised the importance of the personal attributes, qualifications and performance of employees as a means of competitive advantage. Walker suggests that in order for firms to compete effectively in this ongoing changing business environment, they require high performance from their employees:
“People, not companies, innovate, make decisions, develop and produce new products, penetrate new markets and serve customers effectively.”
(Walker, 1992, p.1)
In order to achieve the above-mentioned high performance from staff, firms must manage their human resources in an efficient and effective manner. Wright & McMahan (1992), suggest that in order to achieve this, it is necessary to implement and develop Human Resource strategies that correspond with the overall business strategies of the company, i.e. to integrate human resource processes with strategic management.
From the above discussion, the emergence of HRS over the past twenty years or so can be directly attributed to the need for firms to strategically manage their human resources as a means to achieve competitive advantage in a rapidly changing environment.
The Value of HRS:
An important and significant value of HRS is its integrated nature and focus. HRS directly relates to a firm’s overall business strategy – it aligns both business strategy and human resource practices. HRS outlines the manner in which business targets/goals are to be achieved and allocates human resources to specific activities. Employees and management who are aware of a firm’s business strategy and are focused to a specific goal or target are more likely to perform well in the long term.
“Organisations that have greater congruence between their HR practices and their organisational/business strategies should enjoy superior business performance.”
(Delery & Doty, 1996 p.2)
Walker (1992) suggests that companies who do not integrate their human resource practices with overall business strategy will not achieve the results needed to sustain their business. By focussing on individual or specific goals of the Human Resource department, rather than on the overall business goal, firms are in danger of underachieving and becoming uncompetitive.
Approaches to HRS:
Within the area of strategic human resource management, it can be said that there are varying ideas/approaches to HRS, despite the fact that literature relating to this area is relatively recent, with the first academic works published in the 1980’s. Outlined below are what I feel the two most significant approaches to HRS, as discussed by Delery & Doty (1996):
The Universalistic Approach:
This approach, sometimes referred to as the “best practice approach”, suggests that a single approach/focus to Human Resource Management, which is always best compared to others, should be implemented by all organisations in all situations, regardless of varying factors such as goals of the organisation, economic position, size, etc. An emphasis on teamwork, communication and individual performance is placed. This approach implies that certain human resource strategies are universal across organisations.
In my opinion, I do not believe that Universalist strategies necessarily are of any benefit. In general, HR strategies may need to be quite different for organisations in different industries, economic position and those who effect change by different means. As Stace & Dunphy (1991 p.264) state, “Universalist solutions in HR Strategy and practice are probably inappropriate.”
The Contingency Approach:
Also known as a “situation-based” approach, the contingency approach suggests that Human Resource policies and practices will be effective if they are consistent with other aspects of the organisation, mainly the business strategy of the organisation. It takes into account the relationship between HRS and business strategy and depending on the level of critical contingency of the variable i.e. the particular strategy etc, the relationship will be different (Delery & Doty 1996 p.1-11). This approach is more complex than the universalistic approach in that it involves some level of interaction between HRS and business strategy.
It is my opinion that this approach best fits in with and is more relevant to my own definition of HRS – a set of activities and processes, which result in an outcome. A contingency framework of the management process, as suggested by Stace & Dunphy (1991), matching management processes to the changing needs of the business organisation, is required.
Strategy Types (Hard & Soft):
Authors writing in the field of HRS generally distinguish between hard and soft approaches or dimensions and are described briefly below:
Hard Approach:
The hard approach places the performance of the organisation as the most important – i.e. the human resource strategies of the firm must fit with the business model. Emphasis is placed heavily on the strong managerial control of staff, which must be implemented and a rational and controlled management of the strategic human resource practices in place, all the time putting the business strategy and economic success first.
The Soft Approach:
Alternatively, the soft approach to HRS places the emphasis on the development of the individual, communication and motivation.
Stace & Dunphy (1991 p.264-274) argue that hard and soft approaches are a means from which different types of HRS can be defined. Initially, the Stace & Dunphy found two types of HRS, those being the structuralist and developmental approach. However, after further research, they determined four different HRS types, namely Task focused, Developmental, Paternalistic and Turnaround. They state that hard and soft approaches to HRS can be varied to certain degrees, in order to create a specific strategy.
The Concept of “Fit”:
Snell, C. et al (2001) state that HRS focuses on the
“Pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals”.
There are three main time periods/models relating to “fit” and HRS, which can be found from reading the literature on the topic, as outlined by Snell et al. They are:
Job-person Fit:
With job-person fit, there is a focus on vertical integration, maximisation, efficiency and expansion. Labour is viewed as a costly resource that is uncontrollable, and “hard” approaches to human resource management are practiced, which include strong managed impersonal control of staff.
Strategic Fit:
In this model, two types of fit exist, these being internal and external fit. Baird & Meshoulam (1998) describes internal fit as being focused on the individual areas of HRM that support the organisation from within, while external fit is described as how HR strategies are implemented with the strategic nature of the firm – the direction in which it is going.
Competitive Potential:
In this model, the ways in which businesses must adapt and change to the increasingly competitive nature of industry today are discussed. Snell et al (2001) suggest that competitiveness nowadays “places a premium on knowledge-based assets”. Human resources are the means to creating competitive advantage. Overall business strategies relate directly to HRS in this model.
In today’s business world, competitive potential is becoming the most used model/period of fit, due to the increase in technology-based business, etc, where knowledgeable, highly skilled human resources are premium and key to competitive advantage.
Conclusion:
During the introduction, and throughout the course of this essay, I have attempted to show how my definition of HRS: a set of processes and activities can be justified by evidence from HRS literature. I believe the strategic alignment between HRS and the overall business strategy of the firm and the competitive potential period of fit is crucial to the success of a company in the business world today.
I have asserted a rationale for the emergence and the value of HRS and how these rationales can be used to show that HRS is a set of processes and activities, with strategy undefined but emergent. I also conveyed how the contingency approach to HRS best fit with my own definition of HRS – I believe that matching management processes to the changing needs of the business organisation is crucial. An emergent strategy by definition will change with the business environment. By describing the differing approaches to HRS, soft and hard types of HRS and the concept of “fit”, I have attempted to convey that my definition of HRS is purely that – my definition. Many definitions of HRS exist in academic literature today, and all are valid in context. However, in my opinion, my definition best describes Human Resource Strategy as I see it – a set of processes and activities, which when implemented result in a particular outcome.
Bibliography:
Baird, L.& Meshoulham, I., (1998): “Managing two fits of Strategic Human Resource Management”, in: Academy of Management Review, vol. 13, No.1, 1988, p. 116 – 128.
Delery, J.E. & Doty, D.H., (1996): “Models of Theorising in Strategic Human Resource Management: Tests of Universalistic, Contingency and Configurational Performance Predictions”, in: Academy of Management Journal, Vol. 4.
Miles R. & Snow C., (1984): “Designing Strategic Human Resources Systems”, Organisational Dynamics.
Snell S., Shadur, M. & Wright, P., (2001): “Human Resource Strategy: The Era of our Ways”, in: The Blackwell Handbook of Strategic Management, Chapter 23 p. 627 - 648.
Stace, Doug A. & Dunphy, Dexter C., (1991): “Beyond traditional paternalistic and developmental approaches to organizational change and human resource strategies”, in: The International Journal of Human Resource Management 2:3, p. 263 – 283.
Tyson S., (1995): “Human resource strategy”, London, Pitman.
Walker, James W., (1992): “Human resource strategy”, McGraw Hill.
Wright P & McMahon G., (1988): “Theoretical Perspectives for Strategic Human Resource Management.”
