BH6201

Strategic HRM
Dr. Lilith Arevshatian
Email me on: l.arevshatian@kingston.ac.uk
Recap from last week
 What is the AMO theory and how does it help us
to understand what role HR plays in
performance?
 What is the RBV and how does it help us to
understand what role HR plays in performance?
 What are the main differences between
universalist HR approaches?
 According to Pfeffer, what are the key HR best
practices?
 How is the contingency perspective different
from universalist approaches?
 Should decisions about employees only factor in
economic arguments? Do organisations have a
duty of care towards employees?

2
 Objectives

 Define ‘HR strategy’.

 Explain several different approaches that can
be used to develop an HR strategy.
 Participate in the development of an HR
strategy.
 Demonstrate awareness of the content domains
of an HR strategy.
 Critically evaluate an organisation’s HR strategy
in light of underlying theories.
 Explain the process, content and
implementation issues of an HR strategy.
 HR Strategy

 A strategy, with its underpinning policies and

processes, that an organisation develops and
implements for managing its people to optimal
effect (Gratton and Truss, 2003).

Strategy that an organisation adopts to manage

its people to achieve certain competitive
advantage and reach its business aims.
Sets the agenda for HR practices.

4
Components of HR Strategy

 (1) Process: How to

develop HR strategies and
critical role of LM.

 (2) Content: Range of

choices available to HR
practitioners e.g., HRM
practices, HRM
architecture.

 (3) Implementation: What

issues might HR
practitioners face? How to
address them?

5
 (1) HR Strategy Process

 In developing the HR strategy, the HR function needs to

identify sources of competitive advantage.

Best practice approach to developing HR strategy:

1. Scan the firm’s external environment.
2. Identify the strategic business issues that need to be
addressed.
3. Pinpoint people issues critical to the success of the
business.
4. Develop a strategy to address the relevant issues,
including connecting relevant metrics to the strategy.
5. Communicate the strategy.
(Wright et al., 2004)
 Process Issues

Operationalisation of link between HR and

corporate strategy:

 Administrative Linkage
 One-Way Linkage
 Two-Way Linkage
 Integrative Linkage
"It is not a question of starting with corporate
objectives and aligning HR – the HR
objectives have to be embedded in the
corporate objectives. Before it starts drafting
the objectives, the organisation should have
people values it believes in. And it makes a
huge difference having an HR director on the
board – but the director has got to be capable
of contributing to a commercial agenda”. Mike
Cutt, HR director, B and Q.

8
Activity 1
 Which two competing business
strategies are being proposed?

 What part do personal interests,

values and ideas of the Board
members play in the process of
strategy-making?

 What part do business, market

and contextual factors play in
the process of strategy-making?

 What are the implications for

HRM practices in each scenario?

9
 (2) HR Strategy Content

The nature of HR strategy:

Most HR strategies usually focus on a 2-5 year time
frame.
Strong linkage between business goals and HR
strategy.
However, no particular set of HR policies seems to be
appropriate for any one particular strategy.
Different sets of practices
’ may be equally effective.

Statements include:
 Performance or productivity
 Leadership or talent management
 Climate or working environment
However, contextual factors are relevant as well:
 Organisational structure and change
 Cultural factors
HR Architecture, Lepak and Snell

 People management approaches depend on:

 (1) Strategic value of their human capital AND
 (2) Uniqueness of their human capital.

 Different employment modes:

 (1) Commitment-based HR: value and unique.
 (2) Productivity-based HR: value and limited
uniqueness.
 (3) Compliance-based HR: neither value nor
unique.
 (4) Collaborative-based HR: can outsource.
Activity 2

 Reflect on the HR architecture

of a hospital. In which
employment mode would you
place each job category? Why?

 How would you design HRM

‘best’ or ‘good’ practices for
each employee group to
support the business strategy
of providing safe and quality
patient care?

12
(3) HR Strategy Implementation

13
HR Strategy: Implementation
Issues
 Three-dimensional people strategy
 Non-Actioned dimensions
HR causal chain, Hutchinson (2013)

15
 Role of line manager
 The line manager plays a crucial role in the
devolution of HR strategy but historically there
has been a problematic relationship between HR
and line managers.

 Line managers inform employees experiences of

HRM.
Devolution
Devolution

Devolution
Devolution refers
refers to
to HR
HR managers
managers passing
passing responsibility
responsibility forfor HR
HR tasks
tasks
over
over to
to line
line managers.
managers. ThisThis can
can take
take various
various forms,
forms, varying
varying from from total
total
devolution
devolution accompanied
accompanied by by the
the removal
removal of of the
the HR
HR function
function entirely,
entirely, to
to
simply
simply asking
asking HR HR managers
managers to to fill
fill out
out relevant
relevant forms.
forms. ItIt can
can apply
apply
across
across the
the full
full range
range ofof HR
HR activity,
activity, oror just
just certain
certain areas,
areas, such
such as as
recruitment.
recruitment.
 Summary
 There are three key elements to bear in mind regarding HR
strategy: Content, process and implementation
 Intra-organisational differences suggest that many employers
will need to vary their HR strategies for different employee
groups
 HR strategies are likely to contain elements of best practice and
best fit
 The development of an HR strategy should ideally involve a
range of stakeholders and be geared towards securing positive
organisational outcomes
 The devolution of HR activities to line managers is an important
aspect of implementation, but there are no clear guidelines as to
which HR activities are best devolved, and practice varies
considerably
 Line managers may face a range of barriers in implementing HR
policies.