CHAPTER 4: THE EVOLVING/ STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT Copyright © 2005...

CHAPTER 4:

THE EVOLVING/ STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT

Copyright © 2005 South-Western. All rights reserved.

Copyright © 2005 South-Western. All rights reserved. 1–2

Strategic Human Resource Strategic Human Resource ManagementManagement

Strategic Human Resource Strategic Human Resource ManagementManagement

• Involves development of consistent, aligned Involves development of consistent, aligned collection of practices, programs, & policies to collection of practices, programs, & policies to facilitate achievement of strategic objectivesfacilitate achievement of strategic objectives

• Requires abandoning mindset & practices of Requires abandoning mindset & practices of “personnel management” & focusing on strategic “personnel management” & focusing on strategic issues rather than operational issuesissues rather than operational issues

• Integration of all HR programs within larger Integration of all HR programs within larger framework, facilitating mission & objectivesframework, facilitating mission & objectives

• Writing down strategy facilitates involvement & Writing down strategy facilitates involvement & buy-in of senior executives & other employeesbuy-in of senior executives & other employees

• Involves development of consistent, aligned Involves development of consistent, aligned collection of practices, programs, & policies to collection of practices, programs, & policies to facilitate achievement of strategic objectivesfacilitate achievement of strategic objectives

• Requires abandoning mindset & practices of Requires abandoning mindset & practices of “personnel management” & focusing on strategic “personnel management” & focusing on strategic issues rather than operational issuesissues rather than operational issues

• Integration of all HR programs within larger Integration of all HR programs within larger framework, facilitating mission & objectivesframework, facilitating mission & objectives

• Writing down strategy facilitates involvement & Writing down strategy facilitates involvement & buy-in of senior executives & other employeesbuy-in of senior executives & other employees


Exhibit 4-1Exhibit 4-1

Possible Roles Assumed by HR Possible Roles Assumed by HR FunctionFunction


Possible Roles Assumed by HR Possible Roles Assumed by HR FunctionFunction


HR Roles in Knowledge-Based HR Roles in Knowledge-Based EconomyEconomy


• Human capital stewardHuman capital steward– Creates an environment & culture in which employees Creates an environment & culture in which employees

voluntarily contribute skills, ideas, & energyvoluntarily contribute skills, ideas, & energy– Human capital is not “owned” by organizationHuman capital is not “owned” by organization

• Knowledge facilitatorKnowledge facilitator– Procures necessary employee knowledge & skill sets that Procures necessary employee knowledge & skill sets that

allow information to be acquired, developed, & disseminatedallow information to be acquired, developed, & disseminated– Provides a competitive advantage Provides a competitive advantage – Must be part of strategically designed employee Must be part of strategically designed employee

development plandevelopment plan

• Human capital stewardHuman capital steward– Creates an environment & culture in which employees Creates an environment & culture in which employees

voluntarily contribute skills, ideas, & energyvoluntarily contribute skills, ideas, & energy– Human capital is not “owned” by organizationHuman capital is not “owned” by organization

• Knowledge facilitatorKnowledge facilitator– Procures necessary employee knowledge & skill sets that Procures necessary employee knowledge & skill sets that

allow information to be acquired, developed, & disseminatedallow information to be acquired, developed, & disseminated– Provides a competitive advantage Provides a competitive advantage – Must be part of strategically designed employee Must be part of strategically designed employee

development plandevelopment plan




• Relationship builderRelationship builder– Develops structure, work practices, & culture that Develops structure, work practices, & culture that

allow individuals to work togetherallow individuals to work together– Develops networks that focus on strategic Develops networks that focus on strategic

objectivesobjectives

• Rapid deployment specialistRapid deployment specialist– Creates fluid & adaptable structure & systemsCreates fluid & adaptable structure & systems– Global, knowledge-based economy mandates Global, knowledge-based economy mandates

flexibility & culture that embraces changeflexibility & culture that embraces change

• Relationship builderRelationship builder– Develops structure, work practices, & culture that Develops structure, work practices, & culture that

allow individuals to work togetherallow individuals to work together– Develops networks that focus on strategic Develops networks that focus on strategic

objectivesobjectives

• Rapid deployment specialistRapid deployment specialist– Creates fluid & adaptable structure & systemsCreates fluid & adaptable structure & systems– Global, knowledge-based economy mandates Global, knowledge-based economy mandates

flexibility & culture that embraces changeflexibility & culture that embraces change


SHRM Critical CompetenciesSHRM Critical CompetenciesSHRM Critical CompetenciesSHRM Critical Competencies

• HR’s success as true strategic business partner HR’s success as true strategic business partner dependent on five specific competencies:dependent on five specific competencies:

– Strategic contribution - development of strategyStrategic contribution - development of strategy– Business knowledge - understanding nuts & bolts of Business knowledge - understanding nuts & bolts of

organizationorganization– Personal credibility - measurable value demonstrated in Personal credibility - measurable value demonstrated in

programs & policiesprograms & policies– HR delivery - serving internal customers through effective & HR delivery - serving internal customers through effective &

efficient programsefficient programs– HR technology - using technology to improve organization’s HR technology - using technology to improve organization’s

management of peoplemanagement of people

• HR’s success as true strategic business partner HR’s success as true strategic business partner dependent on five specific competencies:dependent on five specific competencies:

– Strategic contribution - development of strategyStrategic contribution - development of strategy– Business knowledge - understanding nuts & bolts of Business knowledge - understanding nuts & bolts of

organizationorganization– Personal credibility - measurable value demonstrated in Personal credibility - measurable value demonstrated in

programs & policiesprograms & policies– HR delivery - serving internal customers through effective & HR delivery - serving internal customers through effective &

efficient programsefficient programs– HR technology - using technology to improve organization’s HR technology - using technology to improve organization’s

management of peoplemanagement of people



Lepak & Snell’s Employment ModelsLepak & Snell’s Employment ModelsExhibit 4-4Exhibit 4-4

Lepak & Snell’s Employment ModelsLepak & Snell’s Employment Models



Traditional HR Versus Strategic HRTraditional HR Versus Strategic HRExhibit 4-5Exhibit 4-5

Traditional HR Versus Strategic HRTraditional HR Versus Strategic HR


Barriers to Strategic HRBarriers to Strategic HRBarriers to Strategic HRBarriers to Strategic HR

• Strategic contributionStrategic contribution

• Business knowledgeBusiness knowledge

• Personal credibilityPersonal credibility

• HR deliveryHR delivery

• HR technologyHR technology

• Strategic contributionStrategic contribution

• Business knowledgeBusiness knowledge

• Personal credibilityPersonal credibility

• HR deliveryHR delivery

• HR technologyHR technology



Outcomes of Strategic HROutcomes of Strategic HRExhibit 4-7Exhibit 4-7

Outcomes of Strategic HROutcomes of Strategic HR



Model of Strategic HR ManagementModel of Strategic HR ManagementExhibit 4-8Exhibit 4-8

Model of Strategic HR ManagementModel of Strategic HR Management


Reading 4.1Reading 4.1 Strategic HR as Organizational Strategic HR as Organizational

LearningLearning


LearningLearning

• Stages of knowledge managementStages of knowledge management– Generating or capturing knowledgeGenerating or capturing knowledge– Structuring & providing value to gathered Structuring & providing value to gathered

knowledgeknowledge– Transferring knowledgeTransferring knowledge– Establishing mechanisms for use & reuse of Establishing mechanisms for use & reuse of

knowledge for individuals & groupsknowledge for individuals & groups

• Stages of knowledge managementStages of knowledge management– Generating or capturing knowledgeGenerating or capturing knowledge– Structuring & providing value to gathered Structuring & providing value to gathered

knowledgeknowledge– Transferring knowledgeTransferring knowledge– Establishing mechanisms for use & reuse of Establishing mechanisms for use & reuse of

knowledge for individuals & groupsknowledge for individuals & groups


Figure 1Figure 1

Knowledge Management CycleKnowledge Management CycleFigure 1Figure 1

Knowledge Management CycleKnowledge Management Cycle


Figure 2Figure 2

Knowledge ManagementKnowledge ManagementFigure 2Figure 2

Knowledge ManagementKnowledge Management



LearningLearning


LearningLearning• Knowledge creationKnowledge creation

– Single loop learning: Single loop learning: • Comparing consequences of actions with desired Comparing consequences of actions with desired

outcomesoutcomes

• Modifying behaviorModifying behavior

– Double loop learning: Double loop learning: • Goes beyond detection & correction of errorsGoes beyond detection & correction of errors

• Entails examining actions & outcomes as well as Entails examining actions & outcomes as well as underlying assumptionsunderlying assumptions

• Knowledge creationKnowledge creation– Single loop learning: Single loop learning:

• Comparing consequences of actions with desired Comparing consequences of actions with desired outcomesoutcomes

• Modifying behaviorModifying behavior

– Double loop learning: Double loop learning: • Goes beyond detection & correction of errorsGoes beyond detection & correction of errors

• Entails examining actions & outcomes as well as Entails examining actions & outcomes as well as underlying assumptionsunderlying assumptions



LearningLearning


LearningLearning

• Without purposeful analysis of Without purposeful analysis of underlying assumptions & systems, underlying assumptions & systems, organizations may become victims of organizations may become victims of ‘competency traps’‘competency traps’

• Organizational learning: Organizational learning: – Inherently rareInherently rare– Inimitable Inimitable – ImmobileImmobile

• Without purposeful analysis of Without purposeful analysis of underlying assumptions & systems, underlying assumptions & systems, organizations may become victims of organizations may become victims of ‘competency traps’‘competency traps’

• Organizational learning: Organizational learning: – Inherently rareInherently rare– Inimitable Inimitable – ImmobileImmobile



LearningLearning


LearningLearning• How HR management systems can How HR management systems can

contribute to development of organizational contribute to development of organizational knowledgeknowledge– Labor markets can be exploited in order to attract & Labor markets can be exploited in order to attract &

select individuals with high cognitive abilitiesselect individuals with high cognitive abilities– Internal labor markets can contribute to Internal labor markets can contribute to

development of firm specific assetsdevelopment of firm specific assets– Cross-functional & inter-organizational teams can Cross-functional & inter-organizational teams can

be utilizedbe utilized

• How HR management systems can How HR management systems can contribute to development of organizational contribute to development of organizational knowledgeknowledge– Labor markets can be exploited in order to attract & Labor markets can be exploited in order to attract &

select individuals with high cognitive abilitiesselect individuals with high cognitive abilities– Internal labor markets can contribute to Internal labor markets can contribute to

development of firm specific assetsdevelopment of firm specific assets– Cross-functional & inter-organizational teams can Cross-functional & inter-organizational teams can

be utilizedbe utilized



LearningLearning


LearningLearning

• How HR systems can support & How HR systems can support & enhance knowledge transferenhance knowledge transfer– Apprenticeship & mentoringApprenticeship & mentoring– Cross-functional teamsCross-functional teams– Stimulate & reward information sharingStimulate & reward information sharing– Provide free access to informationProvide free access to information– Job rotationsJob rotations

• How HR systems can support & How HR systems can support & enhance knowledge transferenhance knowledge transfer– Apprenticeship & mentoringApprenticeship & mentoring– Cross-functional teamsCross-functional teams– Stimulate & reward information sharingStimulate & reward information sharing– Provide free access to informationProvide free access to information– Job rotationsJob rotations


Reading 4.1Reading 4.1 Knowledge InstitutionalizationKnowledge Institutionalization

Reading 4.1Reading 4.1 Knowledge InstitutionalizationKnowledge Institutionalization

• Walsh & Ungson’s five ‘storage bins’ in which Walsh & Ungson’s five ‘storage bins’ in which organizational memory can resideorganizational memory can reside

– Individuals (assumptions, beliefs, & cause maps)Individuals (assumptions, beliefs, & cause maps)– Culture (stories, myths, & symbols)Culture (stories, myths, & symbols)– Transformations (work design, processes, & routines)Transformations (work design, processes, & routines)– Structure (organizational design)Structure (organizational design)– Ecology (physical structure & information systems)Ecology (physical structure & information systems)

• Institutionalized knowledge tends to be firm Institutionalized knowledge tends to be firm specific, socially complex, & causally ambiguousspecific, socially complex, & causally ambiguous

• Walsh & Ungson’s five ‘storage bins’ in which Walsh & Ungson’s five ‘storage bins’ in which organizational memory can resideorganizational memory can reside

– Individuals (assumptions, beliefs, & cause maps)Individuals (assumptions, beliefs, & cause maps)– Culture (stories, myths, & symbols)Culture (stories, myths, & symbols)– Transformations (work design, processes, & routines)Transformations (work design, processes, & routines)– Structure (organizational design)Structure (organizational design)– Ecology (physical structure & information systems)Ecology (physical structure & information systems)

• Institutionalized knowledge tends to be firm Institutionalized knowledge tends to be firm specific, socially complex, & causally ambiguousspecific, socially complex, & causally ambiguous


Figure 3Figure 3

Alternative Orientations of Fit in Alternative Orientations of Fit in SHRMSHRM

Figure 3Figure 3

Alternative Orientations of Fit in Alternative Orientations of Fit in SHRMSHRM


Reading 4.2Reading 4.2 Understanding HRM-Performance Understanding HRM-Performance

LinkagesLinkages


LinkagesLinkages• Scholars have often assumed two perspectivesScholars have often assumed two perspectives• Systems view considers overall configuration or Systems view considers overall configuration or

aggregation of HRM practicesaggregation of HRM practices• Strategic perspective examines “fit” between Strategic perspective examines “fit” between

various HRM practices & organization’s various HRM practices & organization’s competitive strategycompetitive strategy

• Overall set of HRM practices generally associated Overall set of HRM practices generally associated with firm performance & competitive advantagewith firm performance & competitive advantage

• Scholars have often assumed two perspectivesScholars have often assumed two perspectives• Systems view considers overall configuration or Systems view considers overall configuration or

aggregation of HRM practicesaggregation of HRM practices• Strategic perspective examines “fit” between Strategic perspective examines “fit” between

various HRM practices & organization’s various HRM practices & organization’s competitive strategycompetitive strategy

• Overall set of HRM practices generally associated Overall set of HRM practices generally associated with firm performance & competitive advantagewith firm performance & competitive advantage



LinkagesLinkages


LinkagesLinkages• Psychological climate:Psychological climate:

– Experiential-based perception of what people “see” Experiential-based perception of what people “see” & report happening to them as they make sense of & report happening to them as they make sense of their environmenttheir environment

• Climate:Climate:– Critical mediating construct in exploring multilevel Critical mediating construct in exploring multilevel

relationships between HRM & organizational relationships between HRM & organizational performanceperformance

• Psychological climate:Psychological climate:– Experiential-based perception of what people “see” Experiential-based perception of what people “see”

& report happening to them as they make sense of & report happening to them as they make sense of their environmenttheir environment

• Climate:Climate:– Critical mediating construct in exploring multilevel Critical mediating construct in exploring multilevel

relationships between HRM & organizational relationships between HRM & organizational performanceperformance



LinkagesLinkages


LinkagesLinkages

• Two interrelated features of HRM Two interrelated features of HRM system:system:– Content Content – ProcessProcess– Must be integrated effectivelyMust be integrated effectively

• Two interrelated features of HRM Two interrelated features of HRM system:system:– Content Content – ProcessProcess– Must be integrated effectivelyMust be integrated effectively



LinkagesLinkages


LinkagesLinkages• ContentContent

– Set of practices adoptedSet of practices adopted– Ideally driven by strategic goals & valuesIdeally driven by strategic goals & values– No single most appropriate set of practices for particular No single most appropriate set of practices for particular

strategic objectivestrategic objective– Different sets of practices may be equally effective so long Different sets of practices may be equally effective so long

as they allow particular type of climate around some as they allow particular type of climate around some strategic objective to developstrategic objective to develop

• ProcessProcess– How HRM system can be designed & administered How HRM system can be designed & administered

effectively by defining meta-features of overall HRM systemeffectively by defining meta-features of overall HRM system

• ContentContent– Set of practices adoptedSet of practices adopted– Ideally driven by strategic goals & valuesIdeally driven by strategic goals & values– No single most appropriate set of practices for particular No single most appropriate set of practices for particular

strategic objectivestrategic objective– Different sets of practices may be equally effective so long Different sets of practices may be equally effective so long

as they allow particular type of climate around some as they allow particular type of climate around some strategic objective to developstrategic objective to develop

• ProcessProcess– How HRM system can be designed & administered How HRM system can be designed & administered

effectively by defining meta-features of overall HRM systemeffectively by defining meta-features of overall HRM system


• To create strong situations with To create strong situations with unambiguous messages about unambiguous messages about appropriate behavior, HRM systems appropriate behavior, HRM systems should have:should have:– DistinctivenessDistinctiveness– ConsistencyConsistency– ConsensusConsensus

• To create strong situations with To create strong situations with unambiguous messages about unambiguous messages about appropriate behavior, HRM systems appropriate behavior, HRM systems should have:should have:– DistinctivenessDistinctiveness– ConsistencyConsistency– ConsensusConsensus

Reading 4.2 Reading 4.2

Understanding HRM-Performance Understanding HRM-Performance LinkagesLinkages





LinkagesLinkages


LinkagesLinkages• DistinctivenessDistinctiveness

– VisibilityVisibility• Degree to which practices are salient & readily observableDegree to which practices are salient & readily observable

– Understandability Understandability • Lack of ambiguity & ease of comprehension of practice Lack of ambiguity & ease of comprehension of practice

contentcontent

– Legitimacy of authority Legitimacy of authority • Leads individuals to submit to performance expectations as Leads individuals to submit to performance expectations as

formally sanctioned behaviorsformally sanctioned behaviors

– Relevance Relevance • Whether situation is defined so that individuals see it as Whether situation is defined so that individuals see it as

relevant to important goalrelevant to important goal

• DistinctivenessDistinctiveness– VisibilityVisibility

• Degree to which practices are salient & readily observableDegree to which practices are salient & readily observable

– Understandability Understandability • Lack of ambiguity & ease of comprehension of practice Lack of ambiguity & ease of comprehension of practice

contentcontent

– Legitimacy of authority Legitimacy of authority • Leads individuals to submit to performance expectations as Leads individuals to submit to performance expectations as

formally sanctioned behaviorsformally sanctioned behaviors

– Relevance Relevance • Whether situation is defined so that individuals see it as Whether situation is defined so that individuals see it as

relevant to important goalrelevant to important goal






• ConsistencyConsistency– Instrumentality Instrumentality

• Unambiguous perceived cause-effect relationship Unambiguous perceived cause-effect relationship between system’s desired content-focused between system’s desired content-focused behaviors & associated employee consequencesbehaviors & associated employee consequences

– Validity Validity • HRM practices must display consistency between HRM practices must display consistency between

what they purport to do & what they actually dowhat they purport to do & what they actually do

• ConsistencyConsistency– Instrumentality Instrumentality

• Unambiguous perceived cause-effect relationship Unambiguous perceived cause-effect relationship between system’s desired content-focused between system’s desired content-focused behaviors & associated employee consequencesbehaviors & associated employee consequences

– Validity Validity • HRM practices must display consistency between HRM practices must display consistency between

what they purport to do & what they actually dowhat they purport to do & what they actually do



LinkagesLinkages


LinkagesLinkages

• ConsensusConsensus– Agreement among message sendersAgreement among message senders– Fairness Fairness

• Composite of employees’ perceptions of Composite of employees’ perceptions of whether practices adhere to three whether practices adhere to three dimensions of justice: distributive, dimensions of justice: distributive, procedural, & interactionalprocedural, & interactional

• ConsensusConsensus– Agreement among message sendersAgreement among message senders– Fairness Fairness

• Composite of employees’ perceptions of Composite of employees’ perceptions of whether practices adhere to three whether practices adhere to three dimensions of justice: distributive, dimensions of justice: distributive, procedural, & interactionalprocedural, & interactional


Reading 4.3Reading 4.3 Organization Culture QuestionnaireOrganization Culture Questionnaire

Reading 4.3Reading 4.3 Organization Culture QuestionnaireOrganization Culture Questionnaire

• Topics to be included in questionnaire:Topics to be included in questionnaire:– How is performance defined, measured & How is performance defined, measured &

rewarded?rewarded?– How are information & resources allocated & How are information & resources allocated &

managed?managed?– What is operational philosophy of organization with What is operational philosophy of organization with

regard to risk-taking, leadership, & concern for regard to risk-taking, leadership, & concern for overall results?overall results?

– Does organization regard human resources as costs Does organization regard human resources as costs or assets?or assets?

• Topics to be included in questionnaire:Topics to be included in questionnaire:– How is performance defined, measured & How is performance defined, measured &

rewarded?rewarded?– How are information & resources allocated & How are information & resources allocated &

managed?managed?– What is operational philosophy of organization with What is operational philosophy of organization with

regard to risk-taking, leadership, & concern for regard to risk-taking, leadership, & concern for overall results?overall results?

– Does organization regard human resources as costs Does organization regard human resources as costs or assets?or assets?


Reading 4.3Reading 4.3 Interpreting Results & Formulating Interpreting Results & Formulating

StrategiesStrategies

Reading 4.3Reading 4.3 Interpreting Results & Formulating Interpreting Results & Formulating

StrategiesStrategies• Tendency to try to identify an “ideal” cultureTendency to try to identify an “ideal” culture• Not clear than any one culture will be effective for Not clear than any one culture will be effective for

all organizationsall organizations• Strategy consists of interrelated functional Strategy consists of interrelated functional

components that must be carefully integrated to components that must be carefully integrated to form an effective whole:form an effective whole:

– Selection & staffingSelection & staffing– Organizational & human resource developmentOrganizational & human resource development– RewardsRewards

• Tendency to try to identify an “ideal” cultureTendency to try to identify an “ideal” culture• Not clear than any one culture will be effective for Not clear than any one culture will be effective for

all organizationsall organizations• Strategy consists of interrelated functional Strategy consists of interrelated functional

components that must be carefully integrated to components that must be carefully integrated to form an effective whole:form an effective whole:

– Selection & staffingSelection & staffing– Organizational & human resource developmentOrganizational & human resource development– RewardsRewards


Reading 4.3Reading 4.3

Analyzing Dysfunctional CulturesAnalyzing Dysfunctional CulturesReading 4.3Reading 4.3

Analyzing Dysfunctional CulturesAnalyzing Dysfunctional Cultures

• Which components of culture are misaligned?Which components of culture are misaligned?• What priorities should be assigned to bridging What priorities should be assigned to bridging

gaps between what culture is & what people feel it gaps between what culture is & what people feel it should be?should be?

• What resources are needed & how should they be What resources are needed & how should they be used to change culture?used to change culture?

• How should change effort be managed & who How should change effort be managed & who does what?does what?

• What role should HR strategy play in signaling, What role should HR strategy play in signaling, making & reinforcing necessary changes?making & reinforcing necessary changes?

• Which components of culture are misaligned?Which components of culture are misaligned?• What priorities should be assigned to bridging What priorities should be assigned to bridging

gaps between what culture is & what people feel it gaps between what culture is & what people feel it should be?should be?

• What resources are needed & how should they be What resources are needed & how should they be used to change culture?used to change culture?

• How should change effort be managed & who How should change effort be managed & who does what?does what?

• What role should HR strategy play in signaling, What role should HR strategy play in signaling, making & reinforcing necessary changes?making & reinforcing necessary changes?

CHAPTER 4: THE EVOLVING/ STRATEGIC ROLE OF HUMAN RESOURCE MANAGEMENT Copyright © 2005...

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