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Human Resource Management
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Table of ContentsActivity 01..........................................................................................2
1.1 Strategic Human Resource Management.................................2
1.2 The importance of Strategic Human Resource Management. . .3
1.3 The Framewor of strategic Human Resource Management....!
1.3.1 Harvar" Mo"e#....................................................................$
1.3.2 %#rich Mo"e#........................................................................&
2.1 Ana#ysing the Strategic Human Resource 'rocess..................11
2.2 The ro#es in Strategic Human Resource Management............1!
2.2.1 The strategic ro#e of HR "irectors.....................................1!
2.2.2 The strategic ro#e of hea"s of HR functions......................1!
2.2.3 The strategic ro#e of HR (usiness partners.......................1!
2.2.! The HR ro#e of #ine managers...........................................1!
2.2.$The strategic contri(ution of HR a"visors or assistants....1$
2.3 The "eve#opment an" imp#ementation of human resourcestrategies......................................................................................1)
Formu#ating HR strategy............................................................1)
*mp#ementing HR strategy.........................................................1&
Activity 02........................................................................................1+
Activity 03........................................................................................2+
Reference.........................................................................................33
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Activity 01
1.1 Strategic Human Resource Management
According to Armstrong (2011), when HR strategies become integrated with business
strategies and they support business achievements then the approach to these HR
strategies are called Strategic Human Resource Management. Many others such as
o!all (1""#) described Strategic Human Resource Management (SHRM) as the
inter$ace between strategic management and Human resource management% Another
de$inition o$ &HRM portrays it as a 'process to lin the wor$orce with the
organisation (&chuler and *acson, 200+)%
mphasi-ing on strategic perspective, aird and Meshoulam (1"..) de$ined &HRM
as practices, strategies and systems that are $ormed and enacted in needs o$ the
organisation% /right and MacMahan (1""2) re$erred the idea to integrate HRM with
strategic management to achieve the goals o$ the organisation to be &trategic Human
Resource Management%
&trategic Human Resource Management is rather conceptual, depicting the integration
between HR and business strategies% t is a way o$ looing ahead in the $uture and
comprehending where HR should be achieving and how to attain those achievements%
t is a concept where personnel in HR act as the members o$ management team and
continuously support the organisation to achieve the business strategies o$ that
organisation%
Key Features of Strategic Human Resource Management
he ey aspects o$ &trategic Human Resource Management are
• here e!ists a visible connection between the policy and implementations o$
HR and the strategic goals o$ the organisation as well as its environment%
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• here e!ists a systematic association between the interventions o$ HR
individuals in order to mae them commonly supportive
• Most o$ the responsibilities o$ Human Resource Management relin3uish down
the line%
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1.2 The importance of Strategic Human ResourceManagement
he essentialities o$ &HRM or &trategic Human Resource management cannot beoverstated in an organisation as human wor$orce is driving $orce $or any e!isting
organisation% here$ore, organisations must $ormulate and e!ecute well4planned
strategic human resource strategies in order to increase the productivity o$ the
wor$orce% A well4thought4out strategy will see better relationship between the
organisation and its wor$orce and mutual bene$icial relationship between the
organisation and the host community%
5ne o$ the $undamental bene$its o$ strategic human resource management is that aptly
$ormulated and e!ecuted strategic human resource strategy will assist the company to
achieve its ob6ectives% As companys set ob6ectives or targets to achieves, the
employees are the ones that ensure these goals are achieved% Human Resource
Management identi$ies the ey areas o$ the organisation that need manpower and
HRM carries out the necessary duties and responsibilities to not only $ill those gaps, but to assist the organisation to attain its short4term and long4term goals and
conse3uently to attain its vision%
&trategic Human Resource management also ensures that appropriate strategies are
undertaen to ensure employees are motivated to achieve greater productivity $or the
organisation% HRM taes certain approaches to motivate the employees% &ome HR
o$$ers incentives in the $orm o$ promotions or bonus pay% his motivates employees to
wor hard in order to ac3uire those promised bonuses and promotions% &ome HRM
organise awards to recognise employees $or their hard wor% mployees are presented
with awards in the $orm o$ money as well as other pri-es to eep them motivated in
attaining organisational ob6ectives% hese awards tae place monthly, 3uarterly or
yearly% his reward system wors as a motivational $actors $or employees to
ultimately increase the productivity o$ the company%
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1. The !rame"or# of strategic Human Resource
Management
7or this chapter, Harvard $ramewor and 8lrich Model $or &HRM will be illustrated
and discussed in details
1..1 Harvar$ Mo$el
Richard /alton in his 1".9 article : '7rom ;ontrol to ;ommitment in the /orplace
published in that years Harvard Business Review proposed so$t HRM, a new
approach to Human Resource Management% He argued that e$$icacious HRM is
dependent on the strategies that $ocus on attaining employee commitment rather than
controlling those employees%
/altons Harvard Model proposed $our categories in which all the labour relations
activities can be categorised% hese categories are
4 mployee n$luence
4 Human Resource 7low
4 Reward &ystems
4 /or &ystems%
he activities that $all under these $our categories must warrant the $ocus o$ the
management whether or not the wor$orce is unionised and regardless o$ management
style o$ the organisation% he $ocus must also be given in times o$ organisational rise
as well as decline%
1.3.1.1 Employee Influence
he e!tent o$ which authority, control and leadership is delegated voluntarily by
management to the employees% According to the /alton, i$ management is to share
their in$luence it must create congruence between the employees and the
management% /alton stressed that this share o$ in$luence between management and
employees must be compatible with the motive and priorities o$ the employees%
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1.3.1.2 Human resource flow
According to Harvard model, Human Resource $low indicates the circulation o$
people into the organisation, through the organisation and out o$ the organisation%
ndicating the relevant decisions o$ hiring, selecting, promoting and terminating
employees as well as the associated matters o$ career progression, individual
development, leadership training, $air treatment o$ employees, 6ob securities etc%
/alton emphasi-ed that HR managers must wor with the relevant personnel to
ensure that the organisation has the correct $low o$ human resource in order to ensure
that it meets the strategic re3uirement o$ the organisation%
1.3.1.3 Reward systems
According to this model, employees are to be rewarded $or their wor in the
organisation% hese rewards are categorised into two distinct classes e!trinsic and
intrinsic rewards% he tangible pay and bene$its are e!trinsic rewards such as wages,
bonus pays, and holiday pays, pro$it sharing, employee healthcare, pension schemes
as well as $le!ibility at wor% 5n the other hand, intrinsic rewards are intangible
rewards such as the satis$action o$ completing wor, the sense o$ achievement, the
sense o$ purpose, $eeling involved, overcoming challenges etc% his model proposes
that employees are to be motivated through intrinsic and e!trinsic rewards but the
$inal outcome must be in line with management philosophy, the overall strategy o$ the
organisation as well as other Human Resource Management policies%
1.3.1. !or" systems
hese systems organise the employees, activities, in$ormation and technology in an
organisation in order to ensure that organisational operations are per$ormed
coherently and e$$ectively% he systems provide the blue print to allocate and manage
the resources o$ an organisation%
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&trategies in these above areas must be $ormulated and implemented in a way that is
cohesive and cogent% eer et al% (1".<) argued that dis6ointed policies are the main
reasons $or the $ailure o$ HR strategies along with uneven combination o$ past
practices and e!temporaneous responses to e!ternal changes% hey went on to say that
policies in these $our areas must satis$y the staeholders o$ the organisation, such as
the employees, the customers, the shareholders, the suppliers, the trade unions, the
government etc% eer et al% (1".<) placed employees at the centre o$ HR system and
they argued that employees are the most important staeholders and they encouraged
managers to create an environment that will promote employee in$luence% 7igure 1%=%1
shows the HR system they proposed%
7igure 1%=%1 HR system
his model $urther recommends managers to $ollow '$our ;s when they $ormulateHRM policies% hese are Commitment, Competence, Compatibility (Congruence) and
Cost-eectiveness. here$ore, managers must consider how the policies will enhance
the employee commitment, how the organisation will attract, attain and retain the
competent people that are necessary and develop them, how compatibility will be
sustained between management and employees and $inally how cost4e$$ectiveness can
be achieved when it comes to employee wages, and salaries and employee turnover
while sustaining employee satis$action%
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7igure 1%=%2 Harvard Model o$ HRM (source eer et al%, 1".<)
he proposed Harvard model categorised as so$t Human Resource Model because it
puts attention on the outcomes o$ employees, their well beings and their commitments
towards the organisation% his model aligns business per$ormance and interests o$
shareholders in the same line as the interests o$ unions and the interests o$ the
communities% he e$$ectiveness o$ the organisation is viewed as the long4term
outcome o$ Human Resource Management% his model encourages employees to be
involved in the organisation as well as employee inputs are considered in
organisational decision4maing% his model suggests that $ormulation o$ Human
Resource policies would enhance employee in$luence, however any in$luence will be
bound by the management philosophy and overall organisational strategy% 7igure 1%=%2
illustrates the summary o$ the discussion%
1..2 %lrich Mo$el
>avid 8lrich, a pioneer in the $ield o$ Human Resource Management argued that HR
pro$essionals act as strategic partner, administrative e!pert, c"ange agent and
employee c"ampion% hese are shown in $igure 1%=%2
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7igure 1%=%2 8lrich HR Model
hese distinctive $our roles and the responsibilities that are undertaen by these roles
are described below
1%=%2%1% HR &trategic ?artner
8lrich (1""+) argued that one o$ the ey roles o$ HR is to participate in $ormulating
business strategies rather than simply responding to strategy changes by senior management% HR personnel are to participate in business decision4maing and
aligning HR policy $ormulation and implementation in line with business strategies%
HR pro$essionals are to be able to signi$y and implement the practices that will ensure
overall business success% According to 8lrich (1""+) as strategic partner, HR
pro$essionals act as an inter$ace between the Human resources and business strategies%
1%=%2%2% Administration !pert
8lrich (1""+) stated that HR pro$essionals are to design and implement HR processes
$or recruitment, training, development and promotion o$ employees as well as their
appraisal and reward management% HR pro$essionals must to able to ensure the $low
o$ human resource throughout the organisation according to 8lrich (1""+)% hese are
necessary responsibilities o$ HR pro$essionals and Arthur (2001) and 8lrich (1""+)
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both argued that these responsibilities couldnt be neglected when HR pro$essionals
shi$t their $ocus to strategic role%
1%=%2%=% mployee ;hampion
HR pro$essionals must sa$eguard the interests o$ employees% he needs o$ employees
must be heard and understood by HR pro$essionals and attempts must be made to
meet those needs (8lrich, 1""+)% HR pro$essionals must ensure that employee
in$luence is increased throughout the organisation% 8lrich (1""+) stated that HR
pro$essionals must tae steps to satis$y the interests o$ the employees but it is to be
bound by the interests o$ the organisation% hrlich (1""+) argued that creating an
employee4$riendly wor environment is the primary role o$ an HR pro$essional%
8lrich (1"".) and ;soa (1""9) believe that through championing employee interests
HR pro$essionals will increase the contribution and commitment o$ the employees%
1%=%2%<% ;hange Agent
rans$orming and managing changes $all under the 6ob description o$ HR
pro$essionals (8lrich, 1""+)% @esler (2000) emphasi-ed HR pro$essionals role o$
change agent% According to him, despite the nature o$ implementing changes vary
$rom organisation to organisation, the purpose o$ HR pro$essionals will be de$eated i$
they $ail to de$ine and deliver changes in the organisation% he role o$ HR
pro$essionals is to mae the organisation capable o$ implementing changes%
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2.1 Analysing the Strategic Human Resource &rocess
&trategic Human Resource process does not have a de$ined set o$ steps% >i$$erent
organisation will have di$$erent steps% n this paper, we discuss a strategic Human
Resource ?rocess with the $ollowing si! steps
4 >e$ining strategic direction
4 >esigning Human Resource Management system
4 Arranging the complete wor$orce
4 enerating the re3uired Human Resources
4 nvesting Human Resource >evelopment and ?er$ormance
4 Assessing and sustaining organisational competence and per$ormance
he $igure 2%1%1 illustrates the steps o$ the proposed model o$ &trategic Human
Resource Management
7igure 2%1%1 A model o$ &HRM (source Baval ?ersonnel as 7orce, 2000)
he $irst three steps are concerned with planning and the later three steps are
concerned with implementation% n traditional strategic management, the planning
was top4down as the changes to the environment were not too $re3uent% However, in
modern times this has changed%
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&trategic planning process became more agile as changes tae place much more
$re3uently than be$ore and changes are incorporated in planning continuously rather
than at a predetermined schedule% raditionally planning was the re$lection o$ changes
to the environment, however in modern times, companies plan to anticipate changes%
Moreover, top4down planning process has been replaced as inputs $rom employees at
the $ront line are considered more vigorously than be$ore% And $inally, $ront line
leadership in contemporary world drives the planning process%
he a$termath o$ strategic planning is to align the HRM policies and procedures in
order to attain the organisational goals and to determine the 3uality and 3uantity o$
human resources re3uired%
hese remaining three processes are to implement those plans that will generate the
correct set o$ sills, support the development and per$ormance o$ the wor$orce% he
very last process e!tends a mode that will evaluate and sustain the per$ormance and
core competence o$ the organisation and the wor$orce o$ that organisation%
a) >e$ining strategic direction
ach organisation has its own mission, vision and ob6ectives% his process aligns the
HR policies in line with those mission, vision, ob6ectives and strategies% A success$ul
HR strategy will have business goals at the centre o$ it and success$ul companies
consider their Human Resource their primary source o$ competitive advantage% hose
companies are able to design HR policies, design training, development and reward
system in a way that will allow them to achieve the desired targets and ob6ectives%
b) >esigning the HRM system
n this stage, $ocus shi$ts to designing and selecting the plans, practices and policies o$
Human Resources that will support strategic ob6ectives o$ the organisation%
c) ?lanning the ;omplete wor$orce
he success o$ a company depends on its ability to select, hire and retain the right
wor$orce% n this stage, companies are to identi$y the necessary competencies o$ the
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wor$orce that is re3uired to attain the organisational ob6ectives as well as designing
strategies to attain the wor$orce with those particular sills%
d) enerating he re3uired Human Resources
n this stage, the designed strategies to attain the right wor$orce are e!ecuted%
&electing, recruiting, training and allocating employees tae place in this stage% A
success$ul implementation o$ this process will see the company e3uipped with the
re3uired wor$orce with necessary sills%
e) nvesting in Human Resource development and ?er$ormance
he investment o$ human resource development will yield better per$ormance in the
short and in long run $or any organisation% he development plan is to be designed in
a way that the outcome will complement the strategic ob6ectives o$ the company%
$) Assessing and sustaining organisational competence and per$ormance
&uccess$ul organisations have per$ormance measures in place in order to determine
the e$$ectiveness o$ the planning and implementation strategies% Any chances in
policies, processes and systems must be 6udged in order to identi$y their e$$icacy%
?er$ormance measures such as 'balanced scorecard can assist organisations to
determine how e$$ective is their HR strategic plan%
2.2 The roles in Strategic Human Resource Management
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he various roles in &HRM are discussed as below
2.2.1 The strategic role of HR $irectors
he strategic role o$ Human Resource directors is as $ollows
4 >esigning and delivering Human Resource strategies that complement
organisational strategies% hey ensure that both sets o$ strategies and mutually
supportive%
4 &a$eguarding the ethical aspects o$ Human Resource Management
4 Assuring that adapted strategic approach to Human Resource activities
complement the core business and adds value
2.2.2 The strategic role of hea$s of HR functions
he head o$ HR $unctions have similar strategic role to the HR directors% heir
responsibilities include $ormulating and deploying HR strategies to achieve business
goals% hey $ocus on HR $unctions that will add value to the organisation, support the
overall operation and most important they are ethical%
2.2. The strategic role of HR business partners
he strategic role o$ HR business partners is to wor with top management ensures
that strategies $or the organisations are $ormulated in a way that is achievable through
the human resource o$ the organisation%
2.2.' The HR role of line managers
he line4managers implement the strategies $ormulated by the above HR personnel%
uest emphasi-ed on the role o$ line managers in HR by saying, 'HRM is too
important to be le$t to personnel managers% $ strategies are designed in a way that
will not interest the line managers, those strategies are not yield success $or the
organisation% According to uest and @ing (200<), 'better HR depended not so much
on better procedures but better implementation and ownership o$ implementation by
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line managers% ?urcell et al% (200=) agreed with the above statement, according to
them how policies and practices are implemented are much more important than 6ust
simply $ormulating them% And line managers are the vital parts in implementing those
policies and practices% hey communicate with $ront line employees and they
in$luence the employees in a way that will success$ully implement those policies and
procedures% here$ore, it is the line managers who bring the HR policies to li$e%
2.2.(The strategic contribution of HR a$visors or assistants
he strategic role o$ HR assistants and advisors is not to design HR policies rather
play an advisory role within the con$inement o$ their speciality% hey must understand
the business goal o$ an organisation in order to o$$er their services% hey must also be
aware o$ the ethical implications o$ any proposal%
2. The $evelopment an$ implementation of humanresource strategies
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2..1 !ormulating HR strategy
/hen it comes to $ormulating strategies, /right et al% (200<) proposes 2 approaches%
hese are
1) he inside4out approach
2) he outside4in approach
1) he inside4out approach
his approach wors with e!isting HR $unctions% t identi$ies the connection o$ HR
$unctions to business and maes necessary ad6ustments to HR activities%
2) he outside4in approach
his approach starts with business, its customers, its competition and the issues $aced
by that business% t then $ormulates HR strategies in order to add value to the business%
According to /right et al% (200<) the $ormulation o$ HR strategies $low $rom the
business strategies that are highly in$luenced by the $inancial aspects, product and
maret considerations% However, they argue that HR can contribute in $orming
business strategies $or instance determining business strategies that will comparative
with the current resources% his becomes more important when evolutionary process
is $ollowed $or strategy $ormulation%
;ipd (2009) proposed the $ollowing stages to develop HR strategy $or organisations%
hese are
4 >e$ining business strategy
4 Analysing the conte!t
4 denti$ying business needs4 denti$ying ey business issues
4 >eveloping the strategic $ramewor
4 >e$ining speci$ic HR strategies
4 valuating re3uired HR capability and resources
a) >e$ining business &trategy
$ HR pro$essionals are active in the board, human resource considerations have
already been made but even i$ this is not the case, HR strategy must align with
business needs%
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b) Analysing the conte!t
HR pro$essionals not only need to understand the business strategies, they also need
to under the conte!t in which the strategies are $ormulated and implemented
indicating the comprehension o$ organisations strengths and weanesses when it
comes to human resource o$ that organisation%
c) denti$ying usiness needs
HR strategies must address the business issues% 7or instance, i$ the strategy is to
produce certain products, HR pro$essionals must identi$y the number o$ labours and
sills that are re3uired to produce those products%
d) denti$ying HR issues
he issues related to human resource that have direct implications must be identi$ied
and addressed in HR strategy% 7or instance, improve reporting practice or better
communication%
e) >eveloping the strategic $ramewor
&trategic $ramewor de$ines the structure o$ strategic ob6ectives, the associations
among those ob6ectives and the priorities% he identi$ied association will help to
speci$y mutually supporting processes%
$) >e$ining speci$ic HR strategies
HR strategies are to be $ormulated to satis$y the business needs, e!planation will be
accompanied e!plaining how the needs will be met and how resources will be
allocated%
g) valuating HR capability and resources re3uired
Assessment o$ current human resource will be made, their strengths and weanesses
will be identi$ied, their competencies will be listed and the sills gap will be signi$ied
and their capabilities will be 3uestioned%
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2..2 )mplementing HR strategy
mplementation or e!ecution o$ HR strategies is much more important than
$ormulating those strategies (ratton, 2000)% However, the intention does not
automatically translate to action% And strategies that remain abstractions or aspirations
have no values% According to @anter (1".<), Human Resource strategies are to be
translated into HR policies that will act as guidelines when it comes to HR practices
enabling the strategies to be actionable% &trategies are to be trans$igured into
attainable ob6ectives and deliverables% And it is the 6ob o$ line managers to implement
those activities to achieve the deliverables% ?urcell et al% (200=) emphasi-ed the role
o$ line managers as according to them line managers are the ones that bring strategies
to li$e% he implementation o$ the activities is responsibilities o$ the line managers%
here$ore, ?urcell et al% (200=) suggested the involved o$ line managers in strategy
development% 5ne another aspect is that while implementing strategies, $ocus must be
given the available resources% Cuestions are to be ased i$ the proposed strategies can
be implemented with the e!isting resources% And $inally, the line managers are to
given ade3uate training, support and guidelines to implement those strategies in order
to ensure that desire outcomes are achieved%
Activity 02
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Bote
#mployees t"at are sent to a oreign countries by t"eir employer are $nown as
e!patriates. %"e country is called "ost country and t"e company is $nown as
parent company.
%"e &actors t"at determine t"e success o e!patriates
• %ec"nical s$ills and competence
• Relational s$ills
• Being able to cope wit" dierent environment
• &amily's ability to adust in t"e new environment
Reasons or e!patriate ailure
*nable to cope wit" new environment
&amily's inability to adust in t"e new environment
+ac$ o s$ills or competence
+ac$ o ability to cope wit" larger responsibilities in a oreign territory
t"er amily diiculties and issues.
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Activity 0
.1 * .2 A report to $iscuss the range of HR strategiesan$ their application in an organisation
HR &trategies
HR strategies generally re$er to the aspects o$ what an organisation intends to do with
its HRM policies and procedures and how integration to overall business strategies
taes place% he strategies re$lect intentions that subse3uently converted into actions
(;hesters, 2011)% hese strategies are the collective endeavour o$ the organisation%
>e$ining HR strategies, Richardson and hompson (1""" wrote
strategy, w"et"er it is an HR strategy or any ot"er $ind o management
strategy must "ave two $ey elements t"ere must be strategic obectives
(ie t"ings t"e strategy is supposed to ac"ieve), and t"ere must be a plan o
action (ie t"e means by w"ic" it is proposed t"at t"e obectives will bemet).
?urcell (2001) emphasi-es on the nature o$ continuity and emerging aspects o$
strategy% According to them HR strategies are to be evolved overtime in response to
di$$erent changes% ?ettigrew and /hipp (1""1) argued that, '$ar $rom being a
straight$orward, rational phenomenon, is in $act interpreted by managers according to
their own $rame o$ re$erence, their particular motivations and in$ormation%
Among many researches conducted by the academics, Armstrong and aron (2002)
and Armstrong and Dong (1""<) concluded that a varity o$ HR strategies are practiced
in organisations% >i$$erent organisations de$ine and implement di$$erent strategies inorder to achieve their goals%
he main three versions o$ HR strategies are
4 he H?/& Approach
4 ;ommitment vs% ;ontrol &trategies
4 he Ealue Matri! Approach
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(a) he H?/& Approach
n his landmar study, Huselid (1""9) proposed a $ramewor nown as High4
per$ormance wor system (H?/&)% he $ramewor radically changed the employer4
employee relationship% his approach is a $undamental shi$t $rom control4oriented
approach, where employees at the lowest level per$orm simpli$ied, standardi-ed and
speciali-ed tass and they are tightly supervised and pay incentives is the only
motivational $actor $or them% n H?/&, the lowest level employees are responsible
$or improving wor methods and procedures as well as solving problems and are able
to coordinate their wor with their peers%
n this approach they are sel$4managed to a larger e!tent% ?$e$$er (1"".) concluded
$rom a survey o$ "#. $irms that there are clear evidence that this HR strategy
signi$icantly reduce employee turnover and dramatically increase the productivity and
per$ormance%
(b) ;ommitment vs ;ontrol &trategies
;ontrol HRM strategy is generally characteri-ed by a segmenting wor into small
tass and assigning them to individuals who can be held accountable $or each tass
(/alton, 1".9)% he aim o$ control approach is to reduce labour cost while improving
e$$iciency by $orcing wor$orce to $ollow the de$ined rules and procedures
(isenhardt, 1".9)% n the contrary, commitment HRM approach is where managers
abandon their supervising roles in $avour o$ $acilitator role% ;ontrol is replaced by
trust and connections are established between personal goals o$ the employees and
organisational ob6ectives% ;ommitment is established through the bond employees
develop with the organisation (Allen and Meyer, 1""0)%
n reality, the commitment strategy usually yields the best per$ormance in an
organisation, while control strategy can be e$$ective $or organisations with a cost4
business strategy (Merchant, 1".9F &nell, 1""2F urton, 2001F /right, 200.)%
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