The Role of Human Resource Management - Essay Example

Following the example of other functions of the organization, the human stock management has to create value by adhering to the reinforcement key competences likely to generate products or services innovating and competitive. The role of the Human Resources Management (HRM) is not only to ensure an adjustment in the short and medium term between requirements and resources labour. It amounts, first of all, setting up practices aiming at ensuring acquisition, the accumulation and the protection of the wallet of human capital, as a driving source of innovation and strategic renewal. The objective of this paper is to show how the human stock management contributes to the perennially and the success of the company via the creation of a durable competing advantage, founded on the human capital. A case study near a large business company shows the difficulty in evaluating this contribution being given the strategic lack of legitimacy of the HRM and the absence of tested criteria of evaluation of its results. In this line, we will discuss the approach exposed by De Cieri and al. (2003) which deals with the problem of HRM in Australia, in term of strategy, people and performance. 1. Introduction The approach by the resources constitutes one of the theoretical bases of the strategic human resources management (SHRM) which aims at developing the collective effectiveness of the employees in order to achieve the goals of the company (De Cieri et al. 2003; Truss and Gratton, 1994; Wright and McMahan, 1992). This approach seems relevant to clarify the bond which exists between the human capital, the practices in human resources and the performance of the firm (Delery and Shaw, 2001; McMahan and al, 1999). It supports the renewed interest for the personal element as a source of durable competing advantage while placing the immaterial resources with the row of the strategic credits, making it possible the company to acquire an advantage with respect to its rivals (Boxall, 1996, 1999; Coff, 1997; Gratton, 1999; Kamoche, 1996; Truss, 2001). The perennially and the success of the company constitute the interest shared by all the agents of stakes in the company (Louarn and Wils, 2001). According to the approach by the resources, the organisational performance appears through the creation of a durable competing advantage founded on a human capital highly qualified and highly implied, regarding to a whole HR practices, and through the formulation and the placement of a dynamic HR strategy and futurology (Bamberger and Meshoulam, 2000; Hagan, 1996; Lado and Wilson, 1994; Snell and al, 2000), allowing to have knowledge and competences necessary to face the current and future challenges, and at the favourable time. Thus, any choice judicious of the HR practices to be created and their coherence with the strategy of the company can confer a better performance (Delery and Doty, 1996; Kamoche, 1996). On this subject, numbers empirical studies tried to prove the bond between on the one hand systems the not easily imitable HR practices and on the other hand the organisational performance (Arthur, 1994; Becker and GeHRart, 1996; Delaney and Huselid, 1996; Gardner and Al, 2000; Huselid, 1995; MacDuffie, 1995). Some of these studies led to detect this bond, and approved it in spite of some methodological limit and of recognized errors of measurement (Boudreau and Ramstad, 1999; Wright and al, 2001). Moreover, one will try through this article to discuss the approach of De Cieri and al. (2003) which deals with the problem of HRM of resources in Australia, in term of strategy, people and performance. If one refers to the works of De Cieri and al. (2003), it seems to be important to announce that the goal of the text is to give a clear and methodical vision of an intellectual, strategic and practical approach of the human stock management. It is significant to assign also that the work is based on a major academic study as well of theoretical as empirical point, through concrete example cases. Indeed, the work of either constitutes a significant contribution within the framework of the strategy, personnel and performance, from which raises a crucial point to bind to the various challenges of a strategic, social and business nature (competing through globalisation, meeting stakeholders' needs and the development of high performance work systems), and managing the people in contemporary organizations. The objective is to show that the quoted HR function can contribute to the organisational performance. It must consolidate the strategic orientations of the company according to the approach of the intern resources, and regarding to the coherent practices which aim a better development of the human resources. To support the idea that the human capital constitutes a lever of performance, finds its echo in the approach by the resources, while focusing on the characteristics of the internal resources, intends to determine the sources of the durable competing advantage. Then, several questions are posed: up to what point does the anchoring of the approach by the resources in the HRM make it possible to improve comprehension of the modes of creation of a durable competing advantage resting on the interns human capital company Which is the contribution of the approach by the resources as a framework of analysis to the comprehension of the role of the HRM in the creation of this value In order to answer these questions, we will adopt a qualitative method which will try to discuss the various items advanced by this approach. In other words, one will focus oneself primarily on the study of anchoring and the application of the approach by the resources in the field of the human stock management, in order to show his contributions with the explanation on the organisational performance. 1. Resources approach: Intern contribution framework 1.1. Brief overview First of all, we assign that the present approach try to emphasise the framework in which the strategic role of human resource management as well as the good knowledge of the essential of the current reality within which HR operates in the Australian organisational and institutional context. However, the raising challenges of globalisation, meeting stakeholders' needs to develop a high performance work systems. Thus, we insist mostly on the part that trait the building Human Resource Management Systems', (i.e. focuses on developing human resource capabilities by building human resource systems through the design and analysis of work, human resource planning, the role of information technology in developing effective human resource management programs, recruitment, selection and placement and industrial relations). It covers a lot of elements going from the analysis and design of work to recruiting and selecting staff. Moreover, beyond the obvious part, the focus is putted on developing and rewarding human resources. It starts with 'Managing Diversity and Work-Life Balance' which builds on the knowledge developed before. It then develops a picture of the demographic and social context within which issues of performance and reward management must be understood, negotiated and managed. The last two parts constitute the main focus of the following approach discussion. 1.2. Intellectual and human capital The approach by the resources proposes a rupture with the logic of the domination of the market by granting a role privileged to the internal resources in the development of the competing advantage (Barney, 2002; Dierickx and Cool, 1989; Grant, 1991; Koenig, 1999; Mahoney and Pandian, 1992; Peteraf, 1993; Wernerfelt, 1984). According to this approach, the differences in performance between the companies are explained more by quality of the intern strategic credits and their mode of coordination than by the position on the market. The company is thus designed as a wallet of resources which offer multiple productive possibilities, evolutionary and often under-employed (Penrose, 1959). The competing advantage is created and supported when the company implements a strategy of creation of value which cannot be followed by the current and potential competitors taking into account their profile of resources. Two premises are at the base of this prospect. First rests on the heterogeneity of the resources in the firms belonging to the same sector (Penrose, 1959). This heterogeneity is explanatory differences in performance and must thus be accentuated to be ensured of a competing advantage. The second premise is the low mobility of the resources between firms (Dierickx and Cool, 1989). To maintain the differences in performance, the heterogeneity of the resources must be protected from the mechanisms of imitation. The approach by the resources counts among the theories of the HRMS which aims at developing the collective effectiveness of the employees in order to achieve the goals of the company. Thus, it integrates the field of the HRM and explains the renewed interest for the human capital as source of durable competing advantage. According to Barney (1991), a strategic resource must be of value, rare, imperfectly imitable and no substitutable. By the phenomenon of causal ambiguity, a tacit, complex and specific resource becomes inimitable and no substitutable. Anchored in the history and the culture of the company, the human capital as an intangible credit, generates social relations specific to the firm and answers the logic of Barney. From the dynamic point of view for the approach by the resources, the stress is laid on a whole of strategic resources in interaction, still called key competence. It is the whole of these resources which is at the base of the creation of value for the companies (Barney, 2002). At a limited number, key competences are defined as a whole of collective and original knowledges (Arrgle, 1995; Prahalad and Hamel, 1990, 1994) and are not easily transferable in the organization. They are, consequently, creative of values near to the customers, distinctive compared to the competitors and constitute a springboard for new markets (Prahalad and Hamel, 1990). Although their lifespan higher than that is very produced (Rumelt, 1994), the evolution of key competences is slow, and is done by collective training (Leonard-Barton, 1992) where the mechanisms of integration and coordination play a paramount role as for their development (Rumelt, 1994). To postulate the idea according to which the human capital, as a whole of knowledge, competences and aptitudes of people (Snell and Al, 1999), constitutes a lever of performance for the company is not new. So that the HRM can create a competing advantage founded on the human capital, on the one hand it must influence to become to it firm and to have thus a strategic stake; and in addition, it must adopt a strategic step in its logics (D'Arcimoles, 1995). According to the resources approach, the evolution of the HRM towards a strategic function is profiled in particular through the placement of a strategy HR futurology and dynamics, which makes it possible "to define the mission, the vision and the priorities of the human resources function " (Ulrich, 1997, p. 190) and to have knowledge and competences necessary to face the challenges in time and advisedly. Moreover, the HR strategy must be in coherence with the total strategy of the company (Delery and Doty, 1996; McMahan and al, 1999) and require for its concretization, the installation of bunches of adequate practices between them (Bamberger and Fiegenbaum, 1996; Huselid, 1995; McDuffie, 1995). According to the approach by the resources, the companies have different performances because they develop and use differently their human capital (Garavan and al, 2001; Hitt and al, 2001). They thus have recourse to a whole idiosyncratic of practices of HRM making it possible to maintain the advantage competing founded on the human capital. By the development of human resources, the HRM aims at the accumulation of a human capital ensuring more innovation and of creativity. However, the bonds between the human capital and the performance are complex, contingent, nonlinear and difficult to measure. On the one hand, the development and the exploitation of the human capital can have high costs which exceed their marginal productivity in the short run (Hitt and al, 2001). In addition, the impact of the human capital on the performances would be generated rather indirectly by the complex interactions between this capital, the strategies of the company and the coherence of the practices of HRM, than directly by the installation of HR practices of development of the human capital (Hitt and al, 2001; Truss, 2001). As assigned above and in addition to what is exposed above, the points that still very important in the organisational system and that are related intrinsically to intern resources are the equal employment opportunity (EEO) labelled affirmative action (AA) and the management diversity (MD). However, those programs are not the purpose of this paper and further information can be found in the literature. Thus, and as have been promulgate in the recent years regarding those programmes, the organisations are required to address seven employment matters within their analysis. These are (De Cieri and Kramar, 2003): 1. recruitment procedure and selection criteria for appointment or engagement of employees; 2. promotion, transfer and termination of employment of employees; 3. training and development for employees; 4. work organisation; 5. conditions of service of employees; 6. arrangements for dealing with sex-based harassment of women in the workplace; and arrangements for dealing with pregnant, potentially pregnant employees and employees who are breastfeeding their children (Equal Opportunity for Women in the Workplace Agency, 2000. 1.3. Difficulties and errors: empirical challenge Criticisms formulated against the empirical studies are dealing with the bond between the HRM and the organisational performance relate as well to the contents of these studies as on the method of investigation. However, the faced difficulties did not weaken the contribution of this research as for the measurement of the quality of the HRM and its contribution to the increase in organisational success. The first problem of contents is related to the adequate level of the organisational performance. This one is not limited to the only financial result; it calls upon the concept of stakeholders and includes waiting multiple if not divergent agents of stakes. The absence of a clear definition of the organisational performance (Rogers and Wright, 1998) constitutes also an obstacle for its evaluation which does not miss confusions (Wright and Gardner, 2000). Composite and multidimensional concept, it often implies three possible logics: logic of relevance, logic of effectiveness, and logic of efficiency (Louarn and Wils, 2001). As for the performance, the empirical studies pose the problem of the definition of the HRM and its measurement. While referring to us with the research undertaken by Huselid (1995), we notice that the practices put to the test do not cover the whole of the field of the HRM (Truss, 2001, p. 1124). To limit itself to thirteen practical with our insufficient direction, insofar as we are unaware of the base according to which these practices, is considered to be highly powerful, were selected. We will estimate that the design of the HRM, in this paper, is consequently rather simplistic and also abstract. Thus, it proves to be relevant to specify that a successful alignment of certain bunches of practices should not mask possible "a bad alignment of the practices of human resources with the pursued strategy which could put in danger the attack of the organisational and financial objectives of the company" (Lacoursire and al, 2000, p. 4). This same point of view is shared and supported by several work on the matter (Bamberger and Fiegenbaum, 1996; Becker and al, 1997; Wright and Sherman, 1999). Becker and al (1997) indicate this as being a "mortal combination". In this respect, a detailed attention must be paid to the choices of the practices to set up and to their alignment with the strategy of company (Lacoursire and al, 2000). A narrow and relevant coherence between the human resources strategy and the total strategy must take into account the divergent interests of the individuals charged to apply them. To establish a judicious choice of the HR practices is an incontestably complex role, granted to the professionals of human resources, which according to terms' of Ulrich (1997) must become strategic partners. For the study of the relation between HR practices and the organisational performance, the majority of empirical research based itself on a quantitative step. The data-gathering rests on the method of the questionnaire. The found results are uniform neither in the field of measurements of the system human resources, nor in the field of the power of conclusions (Wright and al, 2000). For certain authors, this is due to a problem of sampling. Whatever the nature of the studied, mono-sector sample (Arthur, 1994; MacDuffie, 1995) or multi-sector (Delaney and Huselid, 1996; Huselid, 1995), the problems of validity arise. The results of the mono-sector studies cannot be generalized beyond the sector object of research, and the results rising from a multi-sector sample suffer from the number of differences which exist between the various firms from the point of view of the markets, the customers, the regulations, the strategies, the types of human resources, the organisational cultures (Louarn and Wils, 2001, p. 55). In addition to the problem of the validity, there is certain unreliability. In the majority of the empirical research undertaken in this direction, one asks for to the human resources director to come to a conclusion about the quality of the HRM of his company by filling out a questionnaire (Louarn and Wils, 2001), thus not allowing to measure the complex relations which exist between the practices of human resources (Truss, 2001, p. 1124). Measurements of the quality of the HRM are obtained on behalf of a single appraiser, who is the HRD. The errors of measurement can have several sources, in particular: items, the time and scales of measurements (Bamberger and Meshoulam, 2000; Boudreau and Ramstad, 1999; Rogers and Wright, 1998; Truss, 2001; Wright and Gardner, 2000; Wright and al, 2001). Remain nevertheless, that the evaluation of the errors of measurement is significant and possible. As an example, to reduce these errors, it is recommended to explore various scales of measurement (Wright and al, 2001, p. 5). Being given the difficulties and the problems rising from the contents of research and the quantitative method, certain authors propose some recommendations for the success of future research. They thus privilege the adoption of a qualitative step per case study (Becker and GeHRart, 1996; Truss, 2001). The qualitative step proves to be relevant insofar as it makes it possible to discover the differences between the formulation of a human resources strategy and its implementation through a unit of practices (Wright and Gardner, 2000). The strong point of the qualitative steps is that those integrate the temporal dimension which is extremely interesting to test the relations of "causality" between the HR practices of the company and the organisational performance. All things considered, to choose a qualitative step seems useful to fill the gaps and the weaknesses of the quantitative steps. 2. Contribution of the HRM to the performances: conceptual model case The external environment takes part in the definition of the future orientations of the company like to its total strategy, even if this one is focused on the internal resources. While referring to us with certain work rising from the resources approach, it proved that this one is not unaware of the environment in its totality (Dierickx and Cool, 1989; Wernerfelt, 1984) as supposed by Priem and Butler (2001). Focused on the internal resources of the company, the approach by the resources supplements the environmental analysis and does not challenge it (Barney, 1991). In this respect, we will have to empirically determine the bond which exists between the external environment and the description of the total strategy of the company in terms of internal resources. Not to block the attack of the strategic objectives of the company, the approach by the resources stipulates that the human resources strategy must be in coherence with the total strategy of the company. The total strategy of the company is often declined in human resources strategy which is coherent for him. The evolution of the HRM towards a strategic function appears according to the intern resources approach, by the formulation of a human resources strategy. On the empirical level, we will try to encircle and to evaluate this coherence called made external or vertical bond. Of nature anticipative, the human resources strategy is formulated on the basis of human capital existing and is concretized through the recourse to a system of practices in cohesion. However, it seems that the human resources strategy is formulated on the basis of human capital of the company. It is also that the human resources strategy must be anticipative, in the direction where it must make possible the company to have the knowledge's and competences necessary to face the challenges present and future. To concretize it, a human resources strategy requires the installation of bunches of practices which, in addition to their alignment with the strategic objectives of the company, must be in cohesion between them. With regard to our empirical investigation, this amounts detecting anticipative nature of the human resources strategy as to define the bonds of complementarity's which can exist between the HR practices. The contribution of the HRM to the increase in organisational success appears, on the one hand, in the achievement of strategic objectives which fall on to him and, on the other hand, in the support of the strategic orientations while misact on the development of the human capital of the company. Regarding to its new strategic dimension, the HR function contributes to the perennially and the success of the company in relation to the installation of a human resources strategy resting on a whole of practices adequate between them and aligned with the strategic objectives of the company. Among its redefined roles, the HRM is brought to carry out certain missions of a strategic nature or to support strategic orientations of the company. For this reason, and in order to increase its profitability, a company can aim at the minimization of the expenses of its personnel. In the same way, by the installation of practices adapted to the context of the company, the HRM is likely to act on the attitudes and the behaviours of the employees to support strategic orientations having milked for example with the reinforcement of the quality of the products and services offered by the company. The HRM would have the role of ensuring the devotion of its internal customers while taking care of their mobilization, by increasing their knowledge and by developing their competences. 3. Conclusion The contribution of inter HR function to the human and intellectual capital process is central to the focus of this paper. And through the approach of De Cieri et al. (2003), we have tried to present the crucial involvement of the intern HR into the organisational structure and the operational programmes of a company regarding the different aspects of the selection and recruitment, internal transfer and promotion of staff for an organization. Further, we had presented the different crucial point in this approach and practice in comparison with other approach case (i.e. the conceptual approach) regarding the main organisational goal. 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Wright et al. (dir.), Supplement 4, London, JAI Press, p. 53-74. Read More