Anas

Chapter 1

An Introduction to Strategic Human Resource Management

Pawan Budhwar and Samuel Aryee

The objectives of this chapter are to:

• Summarise the developments in the field of human resource management (HRM)

• Examine what strategy is

• Highlight the growth and nature of strategic human resource management (SHRM)

• Examine the linkages between organisational strategy and HRM strategy

• Match HRM to organisational strategy

• Discuss the main perspectives on SHRM and organisational performance.

What is HRM?

Developments in the field of HRM are now well documented in the management literature (see e.g. Boxall, 1992; Legge, 1995; Schuler and Jackson, 2007; Sisson and Storey, 2000; Torrington et al., 2005). The roots of HRM go back as far as the 1950s, when writers like Drucker and McGregor stressed the need for visionary goal-directed leadership and management of business integration (Armstrong, 1987). This was succeeded by the ‘behavioural science movement’ in the 1960s, headed by Maslow, Argyris and Herzberg. These scholars emphasised the ‘value’ aspect of human resources (HR) in organisations and argued for a better quality of working life for workers. This formed the basis of the ‘organisational development movement’ initiated by Bennis in the 1970s. The ‘human resource accounting’ (HRA) theory developed by Flamholtz (1974) was an outcome of these sequential developments in the field of HRM and is considered to be the origin of HRM as a defined school of thought. HRA emphasised human resources as assets for any organisation. This ‘asset’ view began to gain support in the 1980s (Hendry and Pettigrew, 1990). The last twenty-five years or so have then witnessed rapid developments in the field of HRM, which are an outcome of a number of factors such as growing competition (mainly to US/UK firms by Japanese firms), slow economic growth in the Western developed nations, realisation about the prospects of HRM’s contribution...