STRATEGIC HUMAN RESOURCE MANAGEMENT

Theory and Practice of Strategic Human Resource Management and its International Dimension

Theory and Practice of Strategic Human Resource Management and its International Dimension

Introduction

Strategic human resource management (SHRM) is a major field of human resource management (HRM) concerned with the ways in which HRM is critical to the viability of the firm and with the ways in which it may lay a basis for sustained competitive advantage (Vandenberg, Richardson & Eastman 1999, 300-339). A reasonably effective human resource (HR) strategy is a necessary condition of business viability: All firms need to recruit and motivate people who have the skills to conceive and conduct the firm's business. Outstanding HR strategies can help firms to achieve superior performance.

Theory and Practice

Strategic HRM is interested in relationships among HR activities and in relationships between patterns of HR activities variously called HR strategies (Baron & Kreps 1999, 12-17), models, bundles, styles, or systems and the firm's internal and external contexts. It is concerned with mapping the HR strategies firms adopt, with understanding why they do so, and with building theory on how HR strategy can be used to enhance organizational effectiveness (Becker & Gerhart 1996, 779-801). Going beyond a shareholder to a stakeholder perspective, it is also concerned with the links between HRM and employee and societal well-being.

The identification and diagnosis of HR strategy is no easy task. Only the largest firms tend to have explicit goal statements for their overall HR strategy. Even when they do, one must be careful in taking them at face value. In HRM, aspirational rhetoric may mask a more opportunistic and pragmatic reality, and broad policies are always open to the interpretations of managers, both general and specialist, and sometimes their active subversion. Furthermore, particular patterns of HRM are laid down at certain critical moments in an organization's history, and managers find themselves working within these traditions without necessarily being able to explain how all the pieces got here. HR goals may not be seriously analyzed unless some kind of crisis emerges in the firm's growth or performance that forces reconsideration and restructuring (Wright, McMahan & McWilliams 1994, 301-326). The complexities are greatest in large, diversified, and transnational firms where HR strategies typically vary across job categories, workplaces, industries, and countries.

Analysis must start somewhere, however. The field of SHRM gained impetus from the work of Michael Beer and his colleagues at Harvard Business School who developed an important conceptual framework in 1984. This framework sees managers interacting with stakeholder interests (such as those of shareholders, employees, and, where they exist, unions) and situational factors (such as business strategy, the labor market, and technology) to develop their own HR choices. These lead to HR outcomes (such as various levels of employee competence and commitment), which, in turn, have longer-term impacts on organizational effectiveness and on societal and individual well-being.

The Harvard framework sought to integrate the huge range of HR choices that might be adopted by considering the differences between bureaucratic, market, and clan models of ...