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Management - 3

tcs academy 9565697723

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11 views

Management - 3

tcs academy 9565697723

Uploaded by

mohini.hr07
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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As Per Updated Syllabus

UGC - NET
MANAGEMENT
UNIT - 3
Unit - 3

Unit-3
Management

1. STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT

Concept
The human resource management department is responsible for serving key
functions of recruiting the right people, providing the necessary training,
administering their performance appraisals, motivating employees, ensuring their
safety and so on. The strategic role of HRM is to strengthen the employee employer
relationships. HR managers need to be well-versed with the human resource
discipline to be able to formulate workforce strategies. It should go way beyond mere
administrative functions to operations and the front line department. "Business
objectives are accomplished when human resource practices, procedures and
systems are developed and implemented based on organization needs, that is, when
a strategic perspective to human resource management is adopted" (Baird and
Mesholaum, 1988). Human resource management is a strategic, integrated and
coherent process. It associates with it an approach to management which involves a
broader and long-run view with respect to where the business is going ensuring that
the strategic thrust is maintained.
Boxall defines strategic human resource management as "the interface between
HRM and strategic management". Strategic HRM is nothing but an approach
defining how the organization will accomplish its goals through people by means of
HR strategies and integrated HR policies and practices. It is a mindset underpinned
by concepts rather than a set of techniques involving an exercise of strategic choice
and establishing strategic priorities. The idea is to integrate business and HR
strategies so that the latter contributes to the achievement of the former. Strategic
HRM is not concerned with strategic planning; its focuses on the implementation of
the strategy, the strategic behaviour of HR specialists working with their line
managers on a day-to-day basis in order to ensure that the business goals of the
organization are achieved and its values are put into practice.

Aims of Strategic HRM

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Unit - 3

• To generate organizational capability by ensuring that the organization has the


skilled, engaged, committed and well-motivated employees needed to achieve
sustained competitive advantage.
• To achieve integration, i.e., vertical alignment of HR strategies with business
strategies and the horizontal integration of HR strategies,
• To provide a sense of direction in a turbulent environment so that the business
needs of the organization and the individual and collective needs of its
employees can be met through the development and implementation of
coherent and practical HR policies and programmes.
• To create firms which are more intelligent and flexible than their competitors
by hiring and developing more talented staff and by extending their skills
base.
• To contribute to the formulation of business strategy by drawing attention to
ways in which the business can capitalize on the advantages provided by the

strengths of its human resources Strategic HRM emanates from two key concepts
:
• The resource-based view
• The strategic fit

The Resource-Based View of Strategic HRM Concept


According to the resource-based view, strategic HRM is the range of resources
owned by an organization which includes its human resources which produces its
own unique character and creates competitive advantage. This view originates from
the ideas of Penrose who pointed out that 'the firm is an administrative organization
and a collection of productive resources'. Many other theorists of the resource based
views such as Barney pointed out that sustained competitive advantage emerged
from the acquisition and effective use of bundles of distinctive resource which had
four attributes :
(a) They must be valuable
(b) They must be rare
(c) They must be imperfectly imitable
(d) They must be non-substitutable.
Such distinctive resources comprise of all the knowledge, experience, judgement
and risk-taking propensity and the wisdom of all individual members of an
organization. The strategic goal of this view is to create firms which are more

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Unit - 3

intelligent and flexible than their competitors. It is concerned with the enhancement
of the human or intellectual capital of a firm. The concept of the resource based view
of strategic HRM can be pinned graphically as under :

Limitations of The Resource-Based View


(a) Difficulty in finding resources that satisfy all criteria
(b) External factors are ignored such as product market pressures.
(C) Providing only a generalized guidance on what resources are suitable
(D) Different resource configurations can provide the same value for firms
(E) This theory is tautological as valuable resources and competitive advantage are
defined in same terms.

The Strategic Fit View of Strategic HRM


According to Walker, Strategic HRM is the means of aligning the management of
human resources with the strategic content of the business'. The concept of strategic
fit essentially means to develop HR strategies that are integrated with the business
strategy and support its achievement (vertical integration or fit) along with the use
of an integrated approach to the development of HR practices such as resourcing,
employee development, reward and employee relations so that they complement and
support one another (horizontal integration or fit).

Perspectives on Strategic HRM


Delery and Doty contended that organizations adopting a particular strategy require
HR practices that are different from those required by organizations adopting
different strategies and that organizations with greater congruence between their HR
strategies and their business strategies should enjoy superior performance. In light
of this, they identified three perspectives on HRM:

(a) The Universalistic Perspective : This suggests that some HR practices are
better than the others and all organizations should adopt these best practices.
This is best on the notion that there exists a universal relationship between
individual 'best' practices and firm performance.
(b) The Contingency Perspective : This perspective suggests that in order to
effective an organization's HR policies must be consistent with other aspects

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Unit - 3

of the organization. The organization's strategy is the primary contingency


factor. One may describe this as the 'vertical fit'.
(c) The Configurational Perspective : This perspective is a holistic approach that
emphasizes the significance of the pattern of HR practices and is concerned
with how this pattern of independent variables is related to the dependent
variable of organizational performance.

The most common classification of HRM approaches was advocated at first by


Richard and Thompson which came to be known as the 'best practice' approach and
the 'best fit' approach for the universalistic and contingency perspectives and
bundling' as the third approach.

The Best Practice Approach


This approach assumes that there is a set of best HRM practices which are universal
in nature.. This means that they work best in any situation and adopting them will
result in superior organizational performance. Some well-known best practices
suggested by Pfeffer are :
• Selective hiring
• Employment security
• Self-managed teams
• High compensation contingent on performance
• Reduction of status differentials
• Training to provide a skilled and motivated workforce
• Sharing information

The Best Fit Approach


This approach is consistent with contingency perspective of HRM. It stresses on the
fact that HR strategies should be in congruence with the context and circumstances
of the organization. The concept of 'best fit' can be perceived in terms of vertical
integration or alignment between the business of the organization and its HR
strategies. The best fit approach has three models:
(a) The Life-Cycle Model : This model has its roots from the theory that suggests
that the development of a firm takes place in four stages, i.e., start-up, growth,
maturity and decline just like the product life-cycle theory. Baird and Meshoulam
stated that human resource management's effectiveness depends on its fit with the
organization's stage of development. As the organization grows and develops,

Page 5

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