HRM7501-B

Human Resource
Management in Context

2nd lecture: HRM & Organizational Performance

Dr Samuel Ogbeibu
s.ogbeibu@bradford.ac.uk

Bradford School of Management

 Last week
• Concept and scope of HRM
• Personnel Management and HRM
• Soft vs Hard HRM strategies
• HRM Today
• Future HRM strategies
Learning Objectives
Understand and evaluate the HRM and Strategy nexus

Describe the types of Performance

Leverage & Deploy the HR Advantages

• Human Capital Advantage (HCA)

• Organizational Process Advantage (OPA)

Describe The HRM – Performance Relationship

HRM and Strategy
• Strategy is a plan, a "how," a means of getting from here to there.

• Strategy is a pattern in actions over time.

• Strategy is position; that is, it reflects decisions to offer particular products or services in
particular markets.

• Strategy is perspective, that is, vision and direction

• Strategy emerges over time as intentions collide with and accommodate a changing reality.
(Mintzberg, 1994).
HRM and Strategy

HRM “is concerned with

the management of
staffing, retention, HRM is strategic when:
development, • it contributes to organisational
adjustment, and change performance;
in order to achieve both • it is aligned with the strategy of
individual and the organisation.
organizational objectives”
(Cascio, 2003).
HRM & Performance
Performance outcomes of HR can be captured in several
ways:

Financial Outcomes (profits, sales, market share)

Organisational Outcomes (productivity, quality,

efficiencies)

HR-related Outcomes (attitudinal and behaviourial

impacts among employees, such as satisfaction,
commitment and intention to quit).
 Human Resource Advantage (HRA): HRA is the
series of policies, practices and processes that
together contribute to the competitive advantage
HR of the organisation (Boxall, 1996; 1998; Boxall and
Purcell, 2011; Boxall and Steeneveld, 1999).
Advantages
These advantages are;

• Human Capital Advantage (HCA) and

• Organisational Process Advantage (OPA).

Forms of HR Advantages

Human Capital
Advantage – Developing
Organizational Process
policies in key areas
Advantage – Routines
such as recruitment, Both can generate
and processes (formal
training, & team advantage but become
and informal) practices
building designed to most effective when
which make up the day-
ensure the best people combined together
to-day realities of
are employed and
organizations
develop high levels of
skills.
Forms of
Capital
HCA
Best practices approach –> Identification Best-Fit approach -> Fit between HR polices &
of number of successful policies that can practices and the internal and external
environment of the organisation.(e.g.): sector,
be applied to all organizations (e.g.): market, institutions, laws, culture, competitive
Pfeffer (1994, 1998): employment strategy..
security; selective hiring, self-
managed teams/teamworking,
high compensation contingent on
organizational performance,
extensive training, status
differential reduction, knowledge
sharing and information.
HCA ->Best Fit
Baird & Meshoulam (1988):
‘Life cycle’ of the
organization
• ‘Informal’ & more flexible
HRM polices at the start-up
phase and ‘formal’ styles as
firms become more mature.
Link with sources of
competitive advantage
• Boxall (1992):
Competitive strategies
should be flexible enough
to cope with different
competitive scenarios. HR
strategy should motivate
people to develop the
skills needed.
 OPA
• Resource-based view (RBV): explores the internal resources of the firm
and considers the ways that HR can maximize their contribution and
make organisation-wide resources difficult to imitate. It seeks to
enhance HR in the following areas:

The VRINO areas

• Value: how does the firm distinguish it self from the competitor?
• Rarity: what is the firm doing with its employees that the competitor is not?
• Imitability: Unique dynamic capability of the firm which makes copying its key
resources difficult for competitors – leading to causal ambiguity.
• Non-Substitutability: Integration of internal resources into coherent systems to
create sustainable advantage.
• Organisation: Easy organisation of resources’ components to foster their
efficient deployment.
 OPA - RBV
Employee Discretionary Behaviour
• Positive effects of HPWS on performance were felt
through increased discretionary effort by employees and
an improved knowledge accumulation (Appelbaum et al.,
2000)

• Ability, Motivation, Opportunity (the A.M.O

theory).

• Role of the line managers (encouragement,

respect, trust)
HRM and Organisational Performance
Summary:
HR Causal
Chain Model
 Homework
• Reading -> Chapters 1 & 2 (Redman & Wilkinson)
– Reflect upon your learning so far
– What is HRM, its proven added value, and academic bases?
– Surprises, curiosities, and difficulties?

Next Seminar Assignment

– Read the case-study titled “Fire-fighting HRM in China’s New Global Economy
& complete the questions 1-5.
 ANY
QUESTIONS?