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 ...view middle of the document...
The debate relating to the nature of HRM continues today although the focus of the debate has changed over time. It started by attempting to delineate the differences between ‘Personnel Management’ and ‘HRM’ (see e.g. Legge, 1989; Guest, 1991), and moved on to attempts to incorporate Industrial Relations into HRM (Torrington et al., 2005), examining the relationship of HRM strategies, integration of HRM into business strategies and devolvement of HRM to line managers (Lengnick-Hall and Lengnick-Hall, 1989; Brewster and Larson, 1992; Budhwar and Sparrow, 1997) and then the extent to which HRM can act as a key means to achieve competitive advantage in organisations (Barney, 1991). Most of these developments have taken place over the last couple of decades or so, and have precipitated changes in the nature of the HR function from being reactive, prescriptive and administrative to being proactive, descriptive and executive (Boxall, 1994; Legge, 1995). At present then, the contribution of HRM in improving a firm’s performance and in the overall success of any organisation (alongside other factors) is being highlighted in the literature (see e.g. Guest, 1997; Schuler and Jackson, 2005; 2007). In relation to the last debate, three perspectives emerge from the existing literature: universalistic, contingency, and configurational (Katou and Budhwar, 2006; 2007).
The ‘universalistic’ perspective posits the ‘best’ of HR practices, implying that business strategies and HRM policies are mutually independent in determining business performance. The ‘contingency’ perspective emphasises the fit between business strategy and HRM policies and strategies, implying that business strategies are followed by HRM policies in determining business performance. The ‘configurational’ perspective posits a simultaneous internal and external fit between a firm’s external environment, business strategy and HR strategy, implying that business strategies and HRM policies interact, according to organisational context in determining business performance.
|Activity |Briefly discuss with your colleagues: (1) the main factors responsible for developments in the field of HRM/SHRM; and |
| |(2) the main debates in the field of HRM. |
Emergence of strategic human resource management (SHRM)
The above developments in the field of HRM highlight the contribution it can make towards business success and an emphasis on HRM to become an integral part of business strategy (Lengnick-Hall and Lengnick-Hall, 1988; Brewster and Larsen, 1992; Bamberger and Meshoulam, 2000; Schuler and Jackson, 2007). The emergence of the term ‘strategic human resource management’ (SHRM) is an outcome of such efforts. It is largely concerned with ‘integration’ of HRM into the business strategy and ‘adaptation’ of HRM at all levels of the organisation (Guest, 1987; Schuler, 1992).