HRM models and frameworks and their theoretical underpinning as discussed in earlier chapter. The aim of this chapter is to provide a challenging and critical analysis of the strategic human resource management literature, so that you will be able to understand the synthesis both within and between strategic human resource management and strategic management in its various forms.
Since the early 1980s when human resource management arrived on the managerial agenda, there has been considerable debate concerning its nature and its value to organisations. From the seminal works emerging from the Chicago school and the matching model of HRM (Fombrun et al., 1984), the emphasis has very much concerned its strategic role in the organisation. Indeed, the now large literature rarely differentiates between human resource management (HRM) and strategic human resource management (SHRM).
Some writers have associated HRM with the strategic aspects and concerns of ‘best-fit’, in vertically aligning an organisation’s human resources to the needs of the organisation as expressed in the organisational strategy (Fombrun et al., 1984) or by creating ‘congruence’ or ‘horizontal alignment’ between various managerial and HRM policies (Beer et al., 1984; Walton, 1985). Others have focused on HRM as a means of gaining commitment and linked this to outcomes of enhanced organizational performance (Beer et al., 1984; Guest, 1987; Guest et al., 2000a); through best-practice models (Pfeffer, 1994, 1998; MacDuffie, 1995; Arthur, 1994) or high-performance work practices (Huselid, 1995; Guest, 1987).
Others have recognised the ‘harder’ nature of strategic HRM (Storey, 1992), emphasising its contribution to business efficiency. Interlaced with this debate has been the wider controversy concerning the nature of business strategy itself, from which strategic HRM takes its theoretical constructs. Add to this, transformations in organisational forms, which have impacted simultaneously on both structures and relationships in organisations. Bahrami (1992) describes tensions in the US high-technology sector that should be familiar to the UK audience.
The need for increased flexibility (Atkinson, 1984) or ‘agility’ (Bahrami, 1992) in organizational structures and relationships has led to ‘delayering, team-based networks, alliances and partnerships and a new employer–employee covenant’ or psychological contract. These changes in organisational structuring and employer–employee relationships have led to difficulties in finding new organisational forms that both faster creativity and avoid chaos. Thus tensions can arise between ‘innovation and maintaining focus, between rapid response and avoiding duplication, between a focus on future products and meeting time to market criteria, between long-term vision and ensuring performance today’.
These tensions need to be considered within business and human resource strategies, as organisations grapple with remaining lean and focused, yet maintain a loose hands-off management style to encourage creativity and rapid response. These dilemmas are not new to the strategic HRM literature; Kanter in 1989 noted contradictions between remaining ‘lean, mean and fit’ on the one hand, yet being seen as a great company to work for on the other.
Development in SHRM thinking, charted in this chapter through the development of the best-fit approach, the configurational approach, the resource-based view approach and the best-practice approach, have a profound impact on our understanding of the contribution SHRM can make to organisational performance, through increased competitive advantage and added value. Indeed, it becomes clear that whether the focus of SHR practices is on alignment with the external context or on the internal context of the firm, the meaning of SHRM can only really be understood in the context of something else, namely organisational performance, whether that be in terms of economic value added and increased shareholder value, customer value added and increased market share, or people added value through increased employee commitment and reservoirs of employee skills and knowledge.
The debate therefore becomes extremely complex in its ramifications for analyzing processes, evaluating performance and assessing outcomes. The observer therefore must come to the view, in the best postmodern tradition, that the profusion and confusion of policy make straightforward analysis of SHRM in empirical and analytical terms extremely difficult and contingent on positional stances of the actors and observers involved in the research process. However, some kind of analytical context is useful in beginning our evaluations.
In order to understand the development of strategic human resource management, and recognise that SHRM is more than traditional human resource management ‘tagged’ with the word ‘strategic’, it is necessary to consider the nature of strategic management. This will provide an understanding of the ‘strategic’ context within which strategic human resource management has developed, and enable us to understand the increasingly complex relationship between strategic management and strategic human resource management.
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