Human resource issues in strategic operations management

Managing Director of British Chrome and Steel 1998 There is no other source of competitive advantage! Others can copy our investment, technology and scale – but NOT the quality of our people …

Grindley, 1991 The skills base is one of the firm’s main assets. It is hard for competitors to imitate … this calls for an attitude to encourage learning and to reward efforts which add to the firm’s knowledge. Skills go out of date and need constant replenishment. In the long term what is most important may not be the particular skills, but the ability to keep learning new ones.

Sophisticated technologies and innovative manufacturing practices alone can do very little to enhance operational performance unless the requisite human resource management (HRM) practices are in place to form a consistent socio-technical system.

Human performance is crucial to an organization’s performance Human performance is crucial to an organization’s performance. An organization does not function without people; it does not function well without competent, motivated people. How the operations manager formulates a human resource strategy determines the talents available for operations. Human resources are expensive.

A study carried out by the Institute of Work Psychology at Sheffield University, which found that in a sample of manufacturing businesses, 18 per cent of variations in productivity and 19 per cent in profitability could be attributed to people management practices (Patterson et al., 1997). They concluded that people management was a better predictor of company performance than strategy, technology or research and development.

Analysis of the national UK Workplace Employee Relations Survey by Guest et al. (2000) found a link between the use of more human resource practices and a range of positive outcomes, including greater employee involvement, satisfaction and commitment, productivity and better financial performance.

Practices that encourage workers to think and interact to improve the production process are strongly linked to increase productivity.

Human resource issues in strategic operations management

Key elements in human resource management in strategic operations

Commitment to People as Strategic Resources There is no ‘magic ingredient’ in the recipe for developing high performance organizations of this kind – but there is a need to work on some basic principles. At the heart of such organizations lies a belief in the importance and potential contribution that employees can make. From this a series of practices follow which reinforce the message and enable sometimes ‘extraordinary efforts from ordinary people’ (Joynson,1994).

One of the basic human needs is for security, and in an uncertain world providing some measure of employment security is a powerful way of signalling the value placed on human resources. Of course, this is not something that can be guaranteed and there is a risk of ‘featherbedding’ employees – but providing some form of contract that shares the risks and the benefits is strongly correlated with success.

Taxonomy of international operations strategies

Comparing traditional and modern approaches to expanding operations

The broad constituent elements of sustainable development

Boudreau et.al. proposed a framework of factors required by people to perform their jobs 1. Capability: The skills, knowledge and abilities necessary to execute an action associated with the objectives of the organization. 2. Opportunity: When individuals are provided or encounter situations in which actions can be executed with the desired effect. 3. Motivation: The drive to execute those actions, created by a perception that they are linked to desired outcomes and rewards. 4. Understanding: Knowledge of how an individual’s actions affect the system and overall goal achievement.