This low-cost or differentiation strategy involves a unique set of responses from workers or ‘needed role behaviours’ and a particular HRM strategy that might generate and reinforce a unique pattern of behaviour (Schuler and Jackson, 1977; Capelli and singh, 1992). Thus, the practice of strategic HRM is concerned with the challenge of matching philosophy, policies, programs, practices and process, the ‘five Ps’ in a way which will stimulate and reinforce different employee role behaviours appropriate for each competitive strategy (schuler, 1989).
The Human Resource strategy that the company adopted emphasizes in employee empowerment and commitment. They emphasize to their managers to give up control if their employees are to improve their performance. As part of this, the demarcation between groups such as avionics and mechanical engineers were removed. And staff were organised into teams of multieskilled operatives led by team leaders. The company also instituted a series of customer services training seminars and invested in training and development. The senior management developed a strategic partnership with the unions (establishing team briefings consultations meetings and regular, formal consultations meetings with the union representatives). This senior management held major training programmes on the importance of trust, motivation and ‘visionary leadership’.
For this organisation, quality has become a fashionable and essential goal to pursue. Quality improvement is linked to HRM in a number of ways. Firstly, the normal vehicle for communicating the importance of quality is training, like this customer service trainings implemented by the company or that one for the senior management on the importance of trust, motivation or visionary leadership. Secondly, the ability to improve the quality of processes and outputs depends in part on the quality and commitment of the workforce. Thirdly, the quality of the management of the workforce is likely to be a key feature in establishing the credibility of top management commitment to any quality initiative. Finally, quality implies a process of involvement and flexibility more consonant with an organic high trust organisation, pointing to a number of issues of structure and management style.
Successful implementation of any new HR policies and more especially the more radical forms of HRM require strong and sustained commitment from the top. Many chief executives pay no more then lip-service to HRM, immediately reducing its potential impact. In practice this means that any changes will need to be long term, step by step and evolutionary.
Once realistic HRM goals have been set, they need to be sold to the whole workforce and especially to those managers who have to work at day-to-day implementation. A further factor in the implementation of change is the part played by the chief executive and the HR specialists. Both should practice what Peters and Waterman (1982) labelled ‘simultaneous loose-tight properties’. They must display consistent and strong commitment to the HRM goals and strategy, but empower others to implement it. For HR specialists this can be a particularly difficult since it appears that they must give power away by encouraging others to take over part of their role. All the evidence suggests this ultimately makes them more highly valued partly because they learn to become facilitators and change agents rather than controllers and administrators.
The notion of ‘fit’ between an external competitive strategy and the internal HRM strategy is a central tenet of the HRM model advanced by Beer et al. The author emphasize the analysis of the linkages between the two strategies and how each strategy provides goals and constraints for the other. There must be a ‘fit between competitive strategy and internal HRM strategy and fit among the elements of the HRM strategy. The resource-based model draws attention to the strategic value of the work-force and to the issues of the workplace learning. Thus it appears to embrance a ‘soft’ view of human resource management. Putting in terms of simple SWOT analysis, the matching model emphasized the strategic significance of external ‘opportunities’ and threats’, the resource-based perspective emphasizes the strategic importance of internal ‘strengths’ and ‘weaknesses’.
- HOW USEFUL IS THE CONEPT ‘STARTEGIC CHOICE’ IN UNDERSTANDING THE LINKAGE BETWEEN AN’S COMPETITIVE AND HR STRATEGIES.
In a management context, the word ‘strategy’ has now replaced the more traditional term, long-term planning, to denote an activity that top managers perform in order to accomplish an organisation’s goals. Strategic management emphasizes the necessity to monitor and evaluate environmental opportunities and threats in the light of an organisation’s strengths and weaknesses. Hence, any changes in the environment and the internal and external resources must be monitorised closely so that the goals pursued can, if necessary, be adjusted. The goals should be flexible and open to amendment, subject to the demands and constraints of the environment and what takes place in the status of the resources.
Once the business strategy is determined, without the involvement of the HRM professional, HRM policies and practices are implemented to support the chosen competitive strategy. In this sense the practice of strategic HRM is concerned with the challenge of matching the philosophy, policies, programs, practices and process, the ‘five Ps’, in a way which will stimulate and reinforce different employee role behaviours appropriate for each competitive strategy ( Schuler, 1989). There is a link between the environment, human resource strategy and the business strategy.
In the late 1980s, John Purcell made a significant contribution to research on business HRM strategy. ‘Strategic choice’ in industrial relations and using the notion of hierarchy of strategy, Purcell (1989) identifies what the labels ‘upstream’ and ‘downstream’ types of generic decision. ‘Upstream’ or ‘the first-order’, strategic decisions are concerned with the long-term direction of the corporation. If a first order decision is made to take over another enterprise, a second set of considerations apply concerning the extent to which the new operation is to be integrated to with or separate from existing operations. These are classified as ‘downstream’ or ‘second-order’, strategic decisions. Different HRM approaches are called ‘third-order’ strategic decisions because they stablished the basic parameters of labour management in the workplace. In theory, wrote Purcell, ‘strategy in human resource management is determined in the context of first-order, long-run decisions on the direction and scope of the firm’s activities and purpose…and second order decisions on the structure of the firm’ (1989, p.7). In a major study of HRM, Purcell and ahlstrand (1994) argue that what actually determiner human resource management policies and practices will be determined by decisions at all three levels and by the ability and leadership style of local managers to follow through goals in the context of specific environmental conditions. This strategic choice has a nature problematic, ‘added-value strategies do not preclude or prevent the use of managerial control over employees (1995, p.29). Running parallel to these developments was the company’s concurrent objective of cost reduction. Job cuts were managed entirely through voluntary severance and redeployment. The requirement to sustain and improve performance in the face of such loses produced, however, a preoccupation with productivity levels, and attempts to alter shifts patterns sometimes provoked conflicts. Disputes were resolved quickly, usually by the company reminding the employees of AN’s commitment to job security, training and development, and through senior management throwing money to the problem.
- WHAT PROBLEMS, IF ANY, WITH AN’S HR STRATEGY AND GOJET’S HR STRATEGY.
Senior managers are pragmatic and work organizations can adopt ‘hard’ version of HRM for one category of workers or, in a multidivisional company, like AN and Goject, for one business while simultaneously pursuing a ‘soft’ version of HRM for another group of workers to provide a coherent understanding of HRM policies and practices and why they vary. Whether senior managers adopt the ‘matching’ or the ‘resource based’ model of SHRM will be contingent upon first the corporate and business strategies, as well upon varying degrees of pressure and constraints from environmental forces. ( Bratton and Gould)
Bibliography
Bratton, J. Gould, J. (1999). Human Resource Management, Theory and practice. Second edition. Macmillan Business.
Foot, M. Hook C. (2002) Introducing Human Resource Management. Prentice Hall.
Towers, B. (1992). The handbook of Human Resource Management.Uk. Blackwell Publishers.