1. Views of Human Resource Management (HRM)
Human resources provide a source for competitive advantage
The quality of HRM is a critical influence on the performance of firms
A strategic approach is a characteristic of HRM
Personnel management is seen as operational
The role of business strategist will be a key role of HR specialists of the future

2. HR Strategy Physical document…………. Incremental process
A useful starting point – ‘the intentions of the corporation both explicit and covert, toward the management of its employees through philosophies, policies, and practices’ (Tyson 1995)

3. Research on HR Strategy
1980s – Focus on HR strategy documents to determine whether there was a strategic approach to HR and what the approach was
Moved on to accept the idea that strategies are not finished or complete but incremental & piecemeal

4. Strategic HR
Tends to be issue based rather than the formulation of a complete and integrated strategy

5. Strategy as a Process
Not necessarily rational and top down but a political and evolutionary process
Not necessarily determined by top management but can be influenced bottom up
Is formed rather than formulated
Is changed by events, opportunities, & actions of employees
Realised strategy can be different from the initial version

6. Price Waterhouse Strategy Research
Organisations with a written HR strategy generated 35% greater revenues than those without (Higginbottom 2002)

7. Strategy as a Process for Change
Sense changes in the environment
Develop a resultant strategy
Turn strategy into action

8. The Need to Turn Strategy Into Action
Implementing the strategy quickly is an important quality needed by successful companies
The capability to implement strategic plans is an important feature of successful HRM (Gensing-Pophel 1999, & Guest 1987)

9. Problems in Turning Strategy Into Action (1 of 2)
Lack of attention to the implementation of strategy (Beaumont 1992)
Implementation often patchy and sometimes contradictory (Legge 1995)

10. Problems in Turning Strategy Into Action (2 of 2)
Responsibility for implementation often unclear (Skinner & Mabey 1997)
HR strategy only a minor influence on HR policies and procedures used (Kane & Palmer 1995)

11. Relationships Between Organisational Strategy & HR Strategy (1 of 5)
Figure 2.1  Potential relationships between organisational strategy and HR strategy

12. Relationships Between Organisational Strategy & HR Strategy (2 of 5)
Figure 2.1  Potential relationships between organisational strategy and HR strategy

13. Relationships Between Organisational Strategy & HR Strategy (3 of 5)
Figure 2.1  Potential relationships between organisational strategy and HR strategy

14. Relationships Between Organisational Strategy & HR Strategy (4 of 5)
Figure 2.1  Potential relationships between organisational strategy and HR strategy

15. Relationships Between Organisational Strategy & HR Strategy (5 of 5)
Figure 2.1  Potential relationships between organisational strategy and HR strategy

16. Link Between Business & Strategy (1 of 2)
Separation – typical picture of 20 years ago still exists today in smaller organisations
Fit – reflects importance of people in achieving organisational strategy
Dialogue – recognises the need for two way communication

17. Link Between Business & Strategy (2 of 2)
Holistic – Organisational staff key to competitive advantage
HR Driven – Places HR strategy in prime position

18. Theoretical Perspectives of HRM
Universalist approach
Fit or contingency approach
Resource based approach

19. Universalist Approach
One high commitment model of labour management
Relates to high organisational performance in all contexts
Clarity of goals

20. Guest’s Theory of HRM Prescriptive model
Based on 4 HR Policy goals – strategic integration, commitment, flexibility, & quality
All goals need to be achieved

21. Criticisms of Guest’s Theory of HRM
Unattainable goals (Purcell 1991)
Goals are an expression of HRM not personnel management (Legge 1991)
Internal consistency difficult due to contradictions (Ogbonna and Whipp 1999)
Will HR practices stimulate high commitment?

22. Harvard Model of HRM (Beer, et al) (1 of 2)
Sits between the universalist and fit approaches
Is analytical rather than prescriptive
Recognises various stakeholder interests impacting on employee behaviour & performance

23. Harvard Model of HRM (Beer, et al) (2 of 2)
Places greater emphasis on environmental factors that shape HR strategic choices
Model has potential for international or comparative analysis

24. Harvard Model of HRM
Figure 2.2  The Harvard framework for human resource management (Source: Adapted with permission of The Free Press, a Division of Simon & Schuster, Inc., from Managing Human Assets by Michael Beer, Bert Spector, Paul R. Lawrence, D. Quinn Mills, Richard E. Walton. New York: The Free Press. Copyright © 1984 by The Free Press.)

25. Criticisms of the Harvard Model of HRM
There are some prescriptive elements that can lead to some confusion
Prescription is found in the HR outcomes box where specific outcomes are identified as universally desirable

26. Fit or Contingency Approach
Based on two critical forms of fit:
- external (vertical integration)
- internal (horizontal integration)

27. Strength of Fit or Contingency Approach
Provides a simple framework that shows how selection, appraisal, development and reward can be mutually geared to produce the required employee performance

28. Strategic Management & Environmental Pressures
Figure 2.3  Strategic management and environmental pressures (Source: C. Fombrun, N.M. Tichy and M.A. Devanna (1984) Strategic Human Resource Management, p. 35. New York: John Wiley and Sons, Inc. © John Wiley and Sons Inc., Reprinted by permission of John Wiley and Sons, Inc.)

29. Human Resource Cycle
Figure 2.4 The human resource cycle (Source: C. Fombrun, N.M. Tichy and M.A. Devanna (1984) Strategic Human Resource Management, p. 41. New York: John Wiley and Sons, Inc. © John Wiley and Sons Inc., Reprinted by permission of John Wiley and Sons, Inc.)

30. Criticisms of the Fit / Contingency Approach
Simplistic response to organisational strategy
Does not address - what if it is not possible to produce an HR response that enables the required employee behaviour and performance
Dependence on a rational strategy formulation
Has a one way organisational strategy relationship
Has unitarist assumptions

31. Innovation & Employee Role Behaviour & HRM Policies
Table 2.1  Business strategies, and associated employee role behaviour and HRM policies
Source: R.S. Schuler and S.E. Jackson (1987) ‘Linking competitive strategies with human resource management practices’, Academy of Management Executive, No. 3, August. Reproduced with permission of the Academy of Management.

32. Enhancing Quality & Employee Role Behaviour & HRM Policies
Table 2.1  Business strategies, and associated employee role behaviour and HRM policies
Source: R.S. Schuler and S.E. Jackson (1987) ‘Linking competitive strategies with human resource management practices’, Academy of Management Executive, No. 3, August. Reproduced with permission of the Academy of Management.

33. Cost Reduction & Employee Role Behaviour & HRM Policies
Table 2.1  Business strategies, and associated employee role behaviour and HRM policies
Source: R.S. Schuler and S.E. Jackson (1987) ‘Linking competitive strategies with human resource management practices’, Academy of Management Executive, No. 3, August. Reproduced with permission of the Academy of Management.

34. Resource Based Approach (1 of 2)
Concerned with the relationships between internal resources, strategy, & business performance
Focuses on promoting sustained competitive advantage via developing human capital

35. Resource Based Approach (2 of 2)
HR unique and cannot be copied by others
Focus much wider – also on skills, knowledge, attitudes and competencies
Value created by matching individual competencies to requirements of the business

36. Resource Criteria Required To Sustain Competitive Advantage
Valuable
Rarity
Inimitable
Non substitutable
(Wright et al, 1994)

37. HR as a Source of Sustained Competitive Advantage
Figure 2.5  A model of human resources as a source of sustained competitive advantage
Source: P. Wright, G. McMahon and A. McWilliams (1994) ‘Human resources and sustained competitive advantage: a resource-based perspective’, International Journal of Human Resource Management, Vol. 5, No. 2, p Reproduced with the permission of Taylor and Francis Ltd. See

38. Does Theory Matter? Are there right and wrong approaches?
Each theory can be interpreted and applied in different ways
Can different theories apply to different groups in the workplace?
Understanding theories enables the interpretation of the current HR strategy position
Can encourage people to challenge current thinking and open up new possibilities

39. Factors Affecting The Role of HR Function in Strategy
Senior HR person being member of board of directors
Overall philosophy of the business towards valuing its people
The mindset of the Chief Executive (CE)
The working relationship between the CE and most senior HR person

40. Summary
The concept of strategic HRM strategy promotes strategic thinking and adoption of a strategic orientation
Link between business strategy and HR strategy is critical
Strategic HRM theory – universalist, contingency/fit, and resource based
Many factors influence HR specialist role and influence in HR strategy