Critically Assess Whether Strategic Hrm Leads to ‘High Performance’’

Essay Question 1 critic every(prenominal)y assess whether strategic HRM traces to steep doing Introduction There is a brawl whether the strategic Human Resources Management (SHRM) leads to advanced doing. A general whimsy of SHRM is that the touch baseage of management and deployment of the superstar-on-one in spite of appearance the firm to the blood path oer every and its environment whereas HRM is the activities that take place under(a) this argona. moor and Gratton (1994). It spotlights on long-term system.Two hypothetic perspectives to the Strategic Human Resources Management (SHRM) volition be introduced and comp ard to determine whether they manage to last movement or non. First, the universalistic start unwrap is star outstrip personal manner of dealing man vision to correct pipeline performance. Second, the eventuality nestle is to align HR policies and radiation patterns with the exposit of business schema to create a positive violat ion on business. In addition, twain uses a large community and a medium- surface social club exit be used to illustrate both get ones practic totallyy.At the resembling quantify, at that place atomic occur 18 issues associate with theoretical perspectives that need to be discussed. Such issues be the instruction execution problems as well as the greenbackment problems. After all, the question leave behind be answered with analysing all of the above. The advantages and disadvantages of each climb will be identified by gathering sensible horizons of researchers. To the last(a) stage, both go aboutes ar being recognised if the conjoinage is macrocosm to spunky performance and to the take aim of measure that be being noniced. Different approaches to SHRM * Universalist approachA Universalist approach is know as topper practice human resource management (HRM). This approach describes there is unitary outstrip way to manage mass in smart set to cleanse ar reachingmental performance. It argues that all organizations, regardless(prenominal) of sector, size or country, will wellbeing from identifying, gaining allegiance to and implementing a set of best HRM practices. The clientele of a researcher is to identify what the practices ar, and a job of HR professional to implement them. For example, a research from Delery and Doty (1996) identify certain practices that improve organisational performance.The detailed comp peerlessnts ar noble performance sprain systems (HPWS) Berg (1999) Appelbaum et al (2000), racy shipment management Walton (1985) customer (2001a, 2001b) and high enfolding management timberland (1999a). An separate researcher by Jeffrey Pfeffer (1998) identifies that vii universally applicable practices will bene travel all firms. The comp apennys include 1) Employment security, 2) watchful hiring, 3) Self-managed team ups and de centralized decision-making, 4) Comparatively high compensation, 5) ample tra ining, 6) Low status distinctions and barriers, 7) Extensive sh atomic number 18-out of fiscal and performance information.The implication is that when a coherent bundle of HR practices is out billetd, the unified HR practices will force positively on organizational performance. The best practice HRM sees there is one best way of managing people and that is appropriate crosswise all circumstances. * Contingency Approach On the other hand, the Contingency approach is known as best- admit HRM. It takes nib of factors such as organizational size, location, sector, strategy and the nature of work. Baird and Meshoulams (1998) computer simulation advocates that HRM approaches will differ broad to distinguishable life-cycle stages.These life cycle stages ranges from start-up to maturity. While an organization is growing and maturing over time, it becomes little by little manifold. Therefore, more(prenominal) than sophisticated HR structures and policies are needed. This approach focuses on two causes of fit and line management desegregation. The first type is External fit and it is normally known as vertical fit. It is in coherence and alignment with business strategy and out-of-door market place factors. When HR policies and practices are reorient to strategic focus, performance will improve.Porters (1985) strategic selections on 1) chance upon up Leadership, 2) Differentiation and Innovation and 3) Focus are pick out. The second type is Internal fit and it good deal also interpret to crosswise fit. HR policies and practices are all fit to workher so that they are in coherence. They are also reciprocally reinforcing and are employ continuously. Jeffrey Pfeffers (1998) septet practices are select. Lastly, transmission channel management integration is when line omnibuss act as a critical character in implementing HRM strategy. Best-fit HRM suggests that the best to manage people will transfer depending on organizational circumstances, and hence, the link to business strategy is blusher. Empirical evidence of SHRM pattern * A large play along tarmacadam The UK quarrying company macadam has over 12500 employees at present. The operations function is disclose to overall companys performance. It necessarily the detain of finance managers, govern managers and HR managers. A finance manager delivers financial and management accounts to contribute the strategic decision-making carry through by forecasting financial performance.A zone manager manages operational performance. They meet and improve targets for cost, quality, delivery, safety and business ethics visual aspectn in key performance indicators (KPIs). Lastly a HR manager ensures business managers founder HR policies and procedures. The companys purpose is to achieve objectives by motivating all individuals work together as one team across the business units and functions. separately objective has its strategies. The followings practices are to achie ve act on employees and Act Responsibly objectives.Firstly, coat focuses on a high take of employee involvement and encourages high employee commitment to the organization so that workers feel they are trusted and case-hardened in an open and positive attitude. For example, employees on a regular al-Qaeda discuss with managers about their viewpoints within evolution teams. This helps workers feel part of the wider team, strengthens employee engagement and commitment to the company. Secondly, team-working practices create a closer supervision and a flat hierarchy. A learn style manager develops employees to manage themselves quite a than to manage each task.Employees suggestions are offered, and this contributes to improvements in organizational performance. An example of Tarmac targets and measures a decline in waste. In 2010, eighteen workshop-training sessions were held for all site employees on carbon dioxide awareness and energy. All regulate managers were involved in the programme. Some foreign experts from Carbon Trust were also invited to support the rollout of the training programme. As a result, Tarmac gained benefit from 500 energy and CO2 reduction. Overall, Tarmac choose a high commitment strategy to meet the objectives.Therefore, it better the companys performance. * A small-medium size company i-LEVEL i-Level is one of the most advanced digital media companies and is ranked the Sunday quantify 100 best companies to work for in 2004. It has a size of workforce of 60 employees. The i-Level company has a high take of financial performance. There was a 33 per cent increase in wage per annum. Their guiding principles are used as a framework. This is to ensure the internal fit and the external fit of company. The company is at the growing stage which a jackpot of the recruitment effort is on discovering the electric potential staff. -Level frequently seeks appropriate employees to be support to work with the company. To fit HR polici es and practices together, i-Level uses sensual arrangements to remove top-down hierarchy in order to encourage employees participation, communication, creativity, self-managed teams and organisational values. As a result, a complete, open plan positioning is the environment where employees conduct their normal everyday operations. Moreover, i-Level sees pay is signifi finisht for performance. 15 per cent of the companys pre-tax profit is unbroken for performance bonuses from 2003 to 2004.Meanwhile, the company argues pay is not their primary motivating force. On the other hand, the company aligns with business strategy and external environment by providing training courses for expert skills in media advertising. The company also offers an contrary training budget. There is an annual modification provided for personal training and development purposes that are no obvious sex act with work. The belief is to develop the skills and interests of workers in ways not studied befo re. This is expected to grow i-level workers advanced(a) thoughts at work through practices remote the companys work area.To summaries, i-LEVEL achieves competitive advantage through innovation and which competes in very tight labour markets. It adopted Porters strategic plectron of Focus and Pfeffers 7 practices to grow the companys performance. Additional issues to reflect * Problems of carrying into action Line managers are central HRM performers in the organization, and they come across a vital role in implementation of HR policies and practices. They influence their teams performance in a direct manner. A number of factors account for the line management problem. Firstly, it seems there is degeneration to line managers.For instance, line managers do not want the responsibility of being a line manager or do not call for enough time to deal with it accurately. They might not moderate the skills to handle HR issues happyly or are unaware of recent developments in view of HRM. Some managers do not consider a long-term view of the company or are uneconomical for making policy in this area. Secondly, McGovern et al (1997), Marchington (2001) and Hutchinson and Purcell (2003) identify there are differences amongst espoused and actual policies that are relatively accepted to line managers.For example, some policies are prescriptive rather than positive. Some descriptions of policies and practices are in general terms rather than analytic about actual situations. Hence, managers are inefficient to implement them specifically to meet the companys goals. Furthermore, a broader issue, the line manager jobs in firms become progressively Gordian repayable to new firms structures. For instance, virtual and earnings companies have less clear line manager characters than the layered hierarchical company. bingle observable implication is pressure for bring down the size of the HR department.There will be a cut down in numbers of HR professionals. Ulti mately, these factors all adjoin the organizational performance due to unrealised implementation of HR policies and practices. * Problems of measuring stick Fitzgerald (1991) and Neely (1998) stated that performance meter is a key issue in guaranteeing the effective implementation of a firms strategy. However, utilise in nice measurements is poor in load-bearing(a) managements business objectives. The followings are the circumstances. Scientists use large-scale information groups made self-completed questionnaires.This will lead to two problems. First of all, there is dependency on one person, to set the only group. Secondly, there is dependence on a design of questionnaires. For example, respondents are answering yes or no questions rather than giving thoughts and opinions. This type of questions may generate a less accurate result. Moreover, there is uncertainty of how the data should be gathered, presented and analysed. The major(ip) problem is mis-reporting angiotensi n converting enzyme respondents. Respondents may have limited familiarity of the area and use of policies.Furthermore, the measures of performance grossly take account of the financial performance, whereas there is a few findings focus on the broader issue of employee attitudes and well-being. Equally, there are matters to the range of HR practices. For instance, a report shows statistics of whether a company has self-managed teams, some may anticipate at the proportion of workers running in a self-managed team. Lastly, Atkinson (2005) suggests that the measurement of intersectionivity in the service sector can be exceptionally challenging.It is always easy to get typical, comparable financial statistics. To sum up, the measurement of data are related to the level of relevancy to business performance. Critical abridgment of the beyond * Best practice Pros Cons search states there is a positive link between the HR practices and organisational performance. Firstly, Huselid (1995 , p. 667) discovered that the grad of returns for investments in High Performance trim Systems is significant. In fact, A one standard deviation rise in High Performance Work Systems practices is associated with a comparative 7. 5 per cent hold in labour turnover. On per employee base, $27,044, $18,641 and $3814 more in sales, more in market value and profits respectively. Secondly, the workplace employee relation survey (Cully et al 1999) indicates that there is 14 per cent of organisations adopted high commitment strategy. In contrast, researcher (Delery 1998) also emphasised deadly bundles of practices need to be avoided. For example, it occurs to managers giving reward based on individual performance while they are working as a team.Furthermore, Boxall and Purcell (2003, p. 64) commented while multi- issue companies make the effort standardise their practices across nations, national perspective and organisational sectoral perspectives show criticism on the effectiveness of these practices. Marchington and Grulis (2000, p. 1117) argue the most common example is in labour intensive organisations recognise costs are overpriced when they use these practices. To summaries the best practice approach, guests (1987) argues that there is no best practice.At the same time, he also suggests a set of best practices such as high commitment management is the thoroughfare to survival of UK business. This leads to an argument that in order to enhance company performance, managers must garble their HR policies and practices to the framework that is operational. The interpretation comes to best-fit approach. * Best-fit Pros Cons Thompson (2000) conducted two studies of firms in the UK aerospace industry. His first sight in 1997 showed that with higher levels of value added per worker encourages greater diffusion of innovative working practices with their non-management employees.These organisations are towards to more heavily engaged in specialist production for niche markets and employ technical and professional workers. The second study in 1999 showed evidence that organizations introduced a large number of high performance work practices had much enhanced business performance. As a result, companies moving from less than volt to more than six innovative practices created a 34 per cent increase in value added per worker. On the other hand, Miles and blow (1984) align suitable managerial types to terce genetic strategies of prospector, defender and analyser.If managerial properties and skills are aligned to company strategy, there will be a higher level of link to organisational performance. Thomas and Ramaswamy (1996) offered such support. As a result, performance in aligned firms was statistically excellent. In comparison, (Purcell 1999 p. 35) specifys that a number of successful organisations features that are unable to model. These are the cultural norms that have been developed gradually over a long gunpoint associated with acco mplishment. It is easy to identify the key factors that disgust to success. Especially when the organisations are large and complex.Imaginably the major problem is that some organisations exist indoors complex external environments with multiple contingencies that are not to be ignored or recognized. * Comparing both approaches Each approach has advantages evidence and disadvantages evidence. It could be argued that different approaches can apply in different sectors. For example, leaf node (2001) advocates that there is the possibility that a high commitment management is most applicable in manufacturing i. e. Tarmac, while strategic natural selection for fitting with business strategy, is more liable in the service sector i. . i-LEVEL. As a whole, critically discuss the link between SHRM and performance. Evidence from Patterson et al (1997) examined cardinal manufacturing businesses in the UK for a period. The outcomes were 19 per cent of profitability and 18 per cent of th e mutation in productivity could be evidence to HRM practices. This demonstrated HRM practices has a positive impact on organisational performance. Conclusion In summary, SHRM consists of a number of practices and is an organization level abridgment of how HRM systems impact on performance.Two theoretical perspectives outline different views. The best-practice approach defines there is one best way of managing people. It is appropriate across all circumstances. Whereas best-fit approach terms the best to manage people will transplant depending on organizational circumstances. It highlights the essence of linking business strategy. Tarmac was used as an example. It applied the best practice approach and adopted a high commitment strategy to meet the objectives. Hence Tarmac improve its firms performance.I-Level was used an example to describe the competitive advantage the company had achieved through innovation while competing in extremely tight labour market. It adopted Porters strategic option of Focus and Pfeffers 7 practices to enhance the firms performance. Empirical evidences show both organisations are successful with adopting different approaches to their specific, targeted firms. These firms had a positive impact on performance. This can be concluded that SHRM has a clear link to business performance practically. In depth, other issues such as implementation and measurement roblems are considered. Problems of implementation affect the organizational performance due to unsuccessful implementation of HR policies and practices in line management. On the other hand, problems of measurement are valued on the basis of how easy and difficult the data is to represent and most importantly the level of relevance to business performance. If the relevance is slight, it may have little or no impact on business performance. In the final stage of comparing both approaches, many researchers point of views is gathered. Best-practice approach has advantages and dis advantages.It seems to argue that high commitment management is the route to successful business performance. On the other hand, the advantages and disadvantages of best-fit approach suggest that applying this approach can be rigid and inflexibility due exists of complex external environments. Furthermore, in recent arguments, the product labour market seems to be emerged to a new post-industrial age where employers will bunk to hire self-employed workers to carry out specific, time-limited projects for companies. This is due to the prediction of radical change.It can lead to a view that best-fit approach should to be managed appropriately. This means practices should be adequate in different companys life-cycle stage and align with different strategies. So that, it can feasibly enhance the organizational performance. Finally, strategic human resources management gives evidences, views, researches and facts to enhance organizational performance. However, the degree of high performa nce in context varies in different organizations under their circumstances. Hence, it does not necessary impact to high performance.