Strategic Human Resource Management

2.0 Strategic approaches to HRM

There are several broad approaches to strategic HRM, which can be grouped into the following three frameworks:

a) Universal (best practice): Focus is on broad aspects of the business environment. Suggest that a given set of HR practices or conditions will provide strategic/competitive advantage to any firm in any circumstances;

b) Contingent (best fit): Focus is on specific business operating environments. Suggest that particular types of HR practices will provide competitive advantages for particular types of firms depending on their strategic environment and reaction to it; and

c) Organisation-specific (unique): Focus is on the firm and its internal resources. Suggest that individual organisations contain unique and inimitable human capabilities that will provide sustainable competitive advantages.

(Cornelius 2001, pp. 299-300)

3.0 How SHRM can provide competitive advantage

Based on the three broad frameworks, there are several approaches to how SHRM can provide competitive advantages to an organisation. They are discussed independently of each other below:

a) Universal (best practice)

Organisations create competitive advantages by integrating a suitable ‘HRM bundle’ of best practices into the firm’s overall structure. The ‘HRM bundle’ typically includes ‘high ground’ elements of HRM, some of which may include:

• A goal of employee commitment;

• A goal of organic structure and functional flexibility;

• A goal of quality; and

• A goal of integrating corporate objectives and HR objectives.

(Guest 1987, p. 48)

In theory, successful integration of the above practices into a firm will ultimately result in an environment in which HRM actually helps to determine strategy (rather than just implement it). The validity of this framework is commonly substantiated by drawing causal relationships between, for example, motivation and customer satisfaction, or other relevant factors (Cornelius 2001, p. 301)....