Based on Human Resource Management (4th Edition) by Alan Price -
published by Cengage
The purpose of this section is to:
- Determine the nature and prevalence of strategic HRM.
- Evaluate the influence and involvement of people managers in high-level decision-making?
- Identify different approaches to strategic HRM, and outline their strengths and weaknesses.
- Consider how people strategies and practices can be adapted to meet perceived threats and opportunities in a changing business environment.
Strategy and HRM
In Part One we saw that many theorists consider a strong link with strategy to be the key
difference between HRM and earlier philosophies of people management. Exponents of
HRM emphasize the importance of an organization’s people in achieving its overall business
objectives. Typically, it is claimed that human resource strategies combine all people management
activities into an organized and integrated programme to meet the strategic objectives
of an enterprise. For example, HR leaders are seen as being in a unique position ‘at the
intersection of strategy, communication and talent’ (McLaughlin and Mott, 2010). It is
claimed also that HRM is different from personnel management primarily because of its
supposed emphasis on the link between people policies and overall business strategy. For
example, Guest (1993: 213) distinguishes traditional personnel management from HRM
‘by virtue of the way in which the former ignored, but the latter embraces strategy’. This
contrasts with the ‘technical-piecemeal’ approach of personnel management. (Continued on page 263 of Human
Resource Management (Price, 2011)
Under the influence of the Harvard MBA, business strategy has become an influential and
integrative discipline at the organizational level. The emphasis on a planned approach to development
and growth brings together the functional elements of operations management,
marketing, finance and human resource management into a cohesive whole. Strategic management
is a process by which organizations determine their objectives, decide on actions
and suitable timescales, implement those actions and then assess progress and results.
Fundamentally, it is the task of senior managers, although more junior employees contribute
to the process and the implementation of strategy. (More on page 267 of Human
Resource Management (Price, 2011)
Strategic HRM: theory and practice
Forming HR strategies
Strategy, thinking and decision-making
Translating strategy into action
HR strategy in the real world
Strategic thinking has its basis in rational thinking. In practice, strategists have accepted that there must be a place for the unexpected.
Strategy and planning provide a framework for human resource requirements over a defined period but traditional personnel managers have
experienced difficulty in understanding and implementing strategy. Human resource strategies tend to focus on numbers and also attitudes,
behaviour and commitment in line with harder 'matching' models of HRM but their implementation is problematic. Recent thinking has
accommodated the notion that HR strategy is not as simple as some rationalist accounts imply and that strategy itself has the same emotional,
irrational and intuitive components as any other form of thinking or decision-making.
Organizational competences are the sum product of the competences of the workforce. This suggests that people management should drive rather than follow business strategy, by building employee competences through selection, assessment, reward and development. In the next chapter, we elaborate further on the building of organizational competence with an examination of a fundamental aspect of people management: resourcing.
> HRM and Commitment