Strategic Human Resource Management

Conceptual Overview

Strategic HRM is interested in relationships among HR activities and in relationships between patterns of HR activities—variously called HR strategies, 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. 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. 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 HRM. The fundamental goals of HRM are seen to differ across these styles or models. The bureaucratic model is concerned with control and efficiency, using traditional authority and such staples of personnel management as job descriptions and job evaluation to provide order and equity. This HRM approach is regarded as relevant to markets with stable technology and employment levels. The market HRM approach, on the other hand, aims to treat employees more like subcontractors, fostering short-term exchanges and performance-related pay systems. This is seen as relevant to fast-changing environments such as high-fashion merchandising, advertising, and professional sports. Finally, clan HRM systems are seen as building more diffuse kinship links, fostering shared values, teamwork, and strong commitment in organizations seeking long-term adaptability. This is seen as relevant to firms pursuing quality and innovation. [Page 1469]Combining aspects of two or even three models is seen as useful when facing complex environments.

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