Integrated Strategic Human Resource Management - Essay Example

? Integrated Strategic Human Resource Management Submitted By Introduction 3 Harvard Model of Human Resource Management 3 Michigan Model of Human Resource Management 6 Warwick Model 8 Strategic Choice Model 8 Conclusion 10 References 12 Introduction The last decade has witnessed a shift from the personnel management to human resource management. Personnel management was mainly categorized by work and work behavior. This concept of personnel management as part of the management process has changed due to influences of technology, industrial reorganization, societal factors and change in the philosophy of work. Work is considered now as a means of self actualization. Organizations these days realize the importance of human capital inn organizational success. This transition from personnel management to human resource management is categorized by significant changes in theory and practice. It involves integrating of personnel management approaches into strategic human resource management framework. This approach is deep rooted in various models and approaches some of which will be discussed in this paper. This paper aims at identifying how much this integration of human resource management is being successful by critically analyzing the three models namely Michigan, Harvard and Choice model. Harvard Model of Human Resource Management With growing pressure global competition along with the increasing number of educated employees who demanded more involvement in the organization, the need for the development of a human resource framework was felt. Scholars at Harvard business school responded by providing a broad casual mapping of the determinants and consequences of human resource management (HRM) policies.( Beer et al., 1985: 15). The Harvard model of HRM provides an analytical model of HRM policy choices and outcomes as influenced by a variety of factors including stakeholder’s interest and situational factors. According to this model effective HRM revolves around the concept of balancing the interests of the various influence groups and the ever changing situational factors. This model is considered dynamic because the situational factors and influence groups keep on changing. The critical analysis of personnel management theories and the softer version of early HR theories revealed that both used the same terminology of integrating with organizational goal and vesting control in the line with the difference in emphasis. Personnel management’s emphasis was on non- managerial workforce whereas HRM theories emphasize the role of managers and the core of workforce. HRM views line managers as business managers maximizing organizational profits and not just people’s managers. HRM also emphasizes the role of senior managers in building and maintaining the organizational culture. The stakeholders identified by the model include are shareholders, management, employee groups, government, community and unions. Various situational factors include work force characteristics, business strategy and conditions, management philosophy, labor market, unions, task technology and laws and societal values. These two factors together determine the HRM policy choices for the organization. This HRM policy will determine the level of employee involvement, human resource flows, reward systems and work systems. The resultant HR outcome will be reflected in employee commitment and competence, congruence and overall HR cost effectiveness in the organization as well as individual and societal well being (Taylor et al. 2008). Some of the major advantages of this holistic model are (Armstrong, 2006) It identifies and incorporates a wide range of stakeholders and their interests in the model. It recognizes the explicit and implicit tradeoffs between interests of various stakeholders. It recognizes the importance and role of human capital in the form of employee influence as an influencing factor and hence questions the supervisory style of work organizations. It recognizes a broad range of contextual influences such as socio cultural and market influenced which affects the HR choices and strategy. It emphasizes on the strategic HR policy. The Harvard model emphasizes on motivating people through their involvement in decision making and encouraging team work through organizational culture. Harvard map includes four strategic policy areas namely human resource flows, reward system, employee influence and work systems. This strategic focus emphasizes the role of HRM as a business partner not just personnel management. It means effective recruitment and selection as well as termination according to the requirement of the organization and development of reward system which not only attracts new employees but retains and motivates current employees. Work system like designing jib should be directed towards efficient results and employee influence determined through involvement in decision making. Harvard model is based on behavioral approach and have a humanistic and anti authoritarian style which implies that commitment and motivation cannot be enforced but through strategic decision making can be channelized. According to this model such policies will result in 4 C’s i.e. commitment, Congruence, competence and cost effectiveness in the behavior of employees (Price, 2007). Hence it caters not only to the individual well being but to the societal well being and organizational effectiveness as well. This strategic approach of Harvard business model is still followed in recent times but with certain advancements in the original concept. Today HR is considered the strategic business partner. Critics of this model accuse it for having a humanitarian attitude towards employees which does not delineate the clear line of authority and expects management to adapt. It makes HR managerial and manipulative. Another issue is its emphasis on core employees and managers hence creates a divide of peripheral and core employees which is not helpful for organization. It requires a thin balance between people and business which is difficult to maintain. However its positives still outweigh the negatives (Ehnert, 2009). Harvard model provides the first basis of transition from personnel management to human resource management with its recognition of various influencing factors and strategic focus of human capital. ICT and Information technology solutions provider adopted this soft model to cater to the problem of diminishing profits. Application of this model’s best HRM practices such as internal career opportunities, emphasis on employee training and development and a more effective performance appraisal system backed by monetary rewards for good performance not only reduced the turnover rate but increased productivity and profitability (Analoui, F. 2007). Michigan Model of Human Resource Management Michigan Model catered the problem of humanistic approach, which the soft model of Harvard was accused of with a harder approach treating human resource in the same way as other resources of business. This model is based on “utilitarian instrumentalism” as termed by John Storey. This model has quantitative approach that implies that human capital should be obtained as cheaply as possible and must be used sparingly so that it is exploited and developed as much as possible. Human resource is considered a factor of production along with capital and land. This model emphasizes on close integration of HR policies with business strategy. This model was originally conceived by Fombrun et al. (1984). According to this model Business strategy determines human resource strategy which in turn defines HRM systems. The five most important HR issues that must be integrated with business strategy are selection, performance, appraisal, rewards and employee development. This model emphasizes on individual and organizational performance. Organizational structure and system for managing people should be based on strategic control. Management of human capital along with their performance should be directed towards achieving strategic goals. It emphasizes that all HR activities and policies along with organizational structure should be consistent with business strategy. All HR subsystems should also be aligned and in coherence with each other. This model is quite different and more practical from other human resource models which are more employee oriented and emphasize on employee commitment rather than business objective. This business oriented approach changed the direction of human resource practices and theories. (Kandula, 2003) The Royal Bank of Scotland Group (RBS) adopted this approach when it took over the National Westminster Bank (NWB) in 2000. RBS had the specialty of increasing customer loyalty and sales through their Customer Advisor role. RBS applied the same for NWB by changing organizational structure and focusing on increased sales. This required an internal and external fit in reference to organizational structure and HRM policies. HRM strategy related to selection, appraisal and reward was modified to match the change in business strategy (Analoui, F. 2007). Warwick Model Warwick model was developed by Warwick University. Hendry and Pettigrew (1990) draw on analytical aspect of Harvard model of HRM. It extends the analysis of Harvard model with five elements which includes inner and outer context, business strategy content, HRM content and HRM context. This model further propagated the transition of people management to human resource management with its emphasis on environmental factors and business strategy. The main strength of this model is that it identifies the environmental influence in HRM strategy which was lacking in the Michigan model and has extended the strengths of Harvard model. It also caters to the weakness of Harvard model by categorizing environmental influences and analyzing HRM with better strategy making also suitable for complex organizations and explores implication for employee relations of a variety of strategic management. The major weakness is in the process of aligning internal environment with business output (Bratton J. et al, 2001). Strategic Choice Model Strategic choice model is a step ahead in the direction of human resource management. It is argued that contextual models are descriptive and theoretical and uses simple statistical methods and the approach is near to literature on industrial relations. Hence the need for a little to make strategic choices was felt (Porter, et al. 2006). Strategic choice model provides that flexibility. This approach involves exercising choices keeping into consideration external and internal factors and management’s frame of reference as an input to information for the HR strategies. This model revolves around formulation of policies and frameworks adjustment and functional and work systems implementation according to the strategic choices made by the organization. The strategy or choice made by HR takes into account socioeconomic context which includes various factors namely legislation, government, policies, institutions, social and economical issues, cultures, unions, educational systems, labor markets and customers. Organizational context which affects Hr strategy are climate, culture, size, structure, technology, innovation and particular interests. Both these external and internal context have the impact on organizational strategy and human capital which in turn determines the HRM strategy. This HRM strategy has three types of consequences organizational effect, social effect, individual effect. Based on the HRM strategy HR policy is defined regarding training and development, evaluation, compensation, staff management, work design and recruitment and selection. The consequence of these HRM choices are far reaching as discussed above in organizational, social and individual effects. Result on organization includes cohesion, adaptability, innovation, problem solution and performance whereas social effects include productivity, quality of life and human capital development (Ehnert, 2009). The strategic choices also affect individuals with their performance, satisfaction, commitment and learning. This strategic choice model is a very comprehensive model. For strategic HRM to become sustainable we still need improvement in multi-paradigmatic approach. This model has come a long way from the early concept of personnel management. The strategic choice model was adopted by Soft Games in response to changes in the market such as diminishing boundaries of Europe and global competition. Now the demand was for multilingual products. To boost its sale Soft games realized this change in market and changed its HRM policies with the strategic focus on future market conditions. It changed it recruitment and Selection policy to hire people from mainland Europe not just UK to increase its multilingual capability. Training and development and evaluation and benefit system was adapted to business strategy and was compatible with competitors. Changes in organizational structure and focus were also reflected in the change of name also to International Soft Games which resulted in increased profits and geographic growth and expansion of the company (Analoui, F. 2007). Conclusion The recent theories of human resource management or more specifically the strategic human resource management started with the theories of personnel management. People’s management was basically a reactive, adhoc short term approach based on the bureaucratic concept of employee compliance on external controls. This centralized system of organization was based on low trust on employees and cost minimization was the target. Hr had a specific and defined role. On the contrary human resource management theories are longer, proactive strategic and integrated based on commitment, self control, unitarist individual approach with high degrees of trust on employees. Preferred system of the organization is organic, developed with flexible roles. HR is largely integrated into line management hence Human resource management is not the sole responsibility of HR. in this approach the evaluation criteria is maximum utilization of resources including human resource. In short we can say the shift from personnel management to Human resource management was the shift from external, market based approach to internal, resource based approach to gain and sustain long term strategic competitive advantage. This concept of strategic HRM still needs further improvement. Critics of this theory questions its applicability and utility as very limited in the modern dynamic environment. This models views SHRM as a closed system which does not inculcate the various external factors such as trade union etc. in the model. SHRM should be able to deal with external influences. According to this model SHRM will not be feasible for organizations working in highly dynamic environment because SHRM policies demands strict adherence to protocol and procedure (Loosemore et al. 2003). Hence it gives a very limited and short sighted approach emphasizing only on employee efficiency and productivity. Dynamic environment demands flexibility and some degree of control by line managers. References Analoui, F. (2007), Strategic Human Resource Management, Thompson Learning, UK: PP. 27-28 Analoui, F. (2007), Strategic Human Resource Management, Thompson Learning, UK: PP. 60-61 Analoui, F. (2007), Strategic Human Resource Management, Thompson Learning, UK: PP. 93-94 Armstrong, M. (2006) A handbook of human resource management practice, London: Kogan Page Bratton, J., Gold, J. (2001) Human resource management: theory and practice, London: McMillan Press Ehnert, I. (2009) Sustainable Human Resource Management: A Conceptual and Exploratory Analysis, Berlin: Physica-Verlag Berlin Heidelberg Kandula, Srinivas R. (2003) Human Resource Management in Practice: With 300 Models, Techniques and Tools, New Delhi: Prentice Hall Loosemore, M., Dainty, A., Lingard, H. (2003) Human Resource Management in construction Projects: Strategic and operational approaches, New York: Spon Press Price, A. (2007) Human Resource Management in a Business Context, UK: Thompson Learning Porter, K., Smith, P., Fagg, R., Winfield, R. (2006) Leadership and management for Hr Professionals, Oxford: Butterworth Heinemann Taylor, T., Doherty, A., McGraw P. (2008) Managing People in Sports organization: A Strategic Human Resource Management Perspective, Oxford: Butterworth Heinemann Read More