5-1 Introduction to strategic human resource management and performance

Question 1

HR Strategy is

Answer 1

(Gratton & Truss, 2003) is both a process and an output and may be seen as the overall approach to managing a workforce and the critical goals to be achieved, as well as the process of defining and enacting systems that maximise people-added value

Question 2

Considerations for creating/developing HR Strategies

Answer 2

Often the development or coordination of HR strategies will be the responsibility of HR professionals within HR functions, but both the creation and delivery of HR resources and practices requires the involvement of line managers and the wider organisation.

Question 3

The 2 Key dimensions to strategy making:

Answer 3

1. the extent to which the process is deliberate and the result of long term planning or is emergent and subject to change.
2. whether it is internal or externally focused.

Question 4

4 Approaches to Strategy formation include

Answer 4

1. Classical approach
2. Evolutionary approach
3. The Processual approach
4. Systems approach

Question 5

1. Classical approach

Answer 5

The classical approach to strategy-making stresses the importance of a long-term, formal and analytical planning process, including a comprehensive assessment of both the external environment and internal resources of the firm. This assessment enables senior management to evaluate and choose from a range of strategic choices in order to maximise profit through matching internal plans to external context and then implementing these plans through line management.

This approach is criticised for oversimplifying the strategy-making process and if too inflexible to deal with a complex changeable business context.

Question 6

2. Evolutionary approach

Answer 6

the evolutionary approach suggests that strategy should be formulated to respond to the unpredictability of a competitive environment by taking its lead from an organisation’s immediate market context, and that rationally planned strategies can, at best, only deliver temporary advantage designed as they are to fit one particular set of circumstances.

Question 7

3. The Processual approach - strategies emerge incrementally rather than fully formed.

Answer 7

The processual approach also stresses complexity and uncertainty but goes further than the evolutionary approach by emphasising that the process of strategy-making tends to be fragmented, adaptive and largely intuitive and, subsequently, strategy emerges incrementally rather than fully formed.

This approach is underpinned by a view of the work organisation as consisting of numerous interest groups with conflicting goals that can influence strategic implementation and need to be taken into account in its formation. Therefore, the strategy formation process involves a range of contributors, in addition to senior management, and its focus is on the internal ‘politics’ of the firm.

The processual perspective views strategy as emerging patterns of action that enable the achievement of business objectives, rather than as conscious, fully formed managerial plans.

Question 8

4. The Systems approach …

Answer 8

Finally, the systems approach to strategy formation emphasises that organisations are able to plan ahead but that strategic choices are shaped not only by market context but also the cultural and institutional interests of broader society, including its political and legal framework. Therefore, the systems approach emphasises that strategic ‘decision-makers are not detached, calculating individuals interacting in purely economic transactions but members of a community rooted in a densely interwoven social system’

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Question 9

In formulating HR Strategies managers have a broad choice in adopting

Answer 9

Control or commitment (resource-based)

Question 10

Control based strategy is

Answer 10

predicated upon the close monitoring and management of employee role performance, employing both direct and bureaucratic forms of control, and tends to reflect a cost-minimisation business strategy where employees are viewed as a variable cost.

Subsequently, managers are likely to follow an HR
strategy and adopt practices as instruments to closely control all aspects of work in order to secure a high level of labour productivity, as under scientific management. Required labour is typically sourced from the external labour market and management will invest little in workforce development.

Question 11

A commitment-based HR strategy is grounded in

Answer 11

the view of human resources as an organisational asset, rather than cost. The emphasis here is on responsible autonomy and the quality of the employment relationship where worker ‘control’ and motivation are a product of a positive psychological contract and the internalisation of organisational values.

Such an approach promotes employee commitment and loyalty, and motivation is derived from a sense of belonging, good line management relationships, high financial reward and job design that emphasises intrinsic job satisfaction and worker interest.