Strategic Human resource management

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The last two decades Human resources pioneers understood that human resource functions had to be associated to the strategy to run companies and organizations with long term goals. “Strategic human resource management can be defined as the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation, flexibility and competitive advantage. In an organization SHRM means accepting and involving the HR function as a strategic partner in the formulation and implementation of the company’s strategies through HR activities such as recruiting, selecting, training and rewarding personnel.”

This is how Armstrong defines the new age of the Human resource management. For 30 years, companies adopt and adapt the strategic human resources approaches as a keystone to the success. Meanwhile several approaches have been developed by specialists such as Torrigton, Taylor and Hall. Three approaches remain the most widely represented in the business : Universalist approach , the Contingency or Fit Approach and the Resource-Based Approach.

On one hand we will describe these theories and on the other have a critic analysis about the consistency of these three theories.

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I) The universalist approach

1) Description

The Universalist approach focuses on four themes that are dominating: commitment,quality,flexibility and strategic integration. These goals described by Guest in 1992 tend to optimize the human resources available in the company “dealing with cost effectiveness, low employee turnover”… To ensure the success of the company, this approach requires the interdependent application of these four parameters. The Universalist approach promotes a high commitment in both ways which means between the company and its employees. This approach had been used in different ways considering the countries. For example in the United Kingdom it’s based on the “best practice”. On the other side American companies rely more on the Harvard Model

This model puts employees as a special resource and states on the humanistic side to get a total involvement which leads to motivation and performance. In other words the Universalist approach deals with high performance and high commitment (soft HRM) in both ways granted by rewards for employees in a healthy environment allowing promotions and highlighting learning. Employees are seen as organizational key success to reach the « productivity through people as explained by Waterman and Peters. Companies like IBM and generally speaking firms from the bank sector use this approach

2) Criticism of the Universalist approach

This approach seems ideal for employees and managers. Indeed the Universalist approach appears as the best way of managing human resources in companies because of the high commitment in both ways which means high output in a rewarding and serene work environment. The human aspect of the employee is taken into account and plays a major role to achieve the objectives of the strategy. Moreover the Universalist approach is promoting strategic integration which guarantees a daily managerial guideline.

Flexibility is another point stated in this approach asking for employees to have multiskills and be adaptable to different tasks. Finally Quality would result of the added value by employees who perform product or service of quality. By combining and achieving these objectives it would be possible to optimize the human resources while avoiding the problems processed by Guest in 1989 “all (cf goals) need to create the desired organizational outcomes, which are high job performance problem solving ,change, innovation and cost innovativeness , and low employee turnover, absence and grievance”.

However, this theory appears to be utopian. Indeed, it suffers from some inconsistencies and lack of reality. The Universalist theory and human resources management in general are not an exact science. In fact this approach appears as a unique best way in order to access a successful SHRM. This approach does not take into account the enormous costs involved. Therefore the Universalist approach is available only to large companies and thus abandoning the small and medium enterprises which cannot afford it.

This would be the “best way” management only for companies that can afford it. At this point it is clear that this approach does not take into account companies’ size limiting the strategy to the social side ignoring the commercial and financial side. Besides the Universalist approach suffers from contradictions as those reveled by Ogbonna and Whipp in 1999 such as the unlikely coexistence between commitment and flexibility. Also, it appears that this approach differs from one geographical area to another. It is important to understand that European and USA have different cultural and social contexts.

The Universalist approach excludes such areas as compliance, equal opportunities, trade union relationships and government involvement. These are the main reasons developed by writers such as Guest and Gaugler in 1999 who remains skeptic for adaptation of this theory in countries such as Germany and Great Britain. The Universalist approach does not take into account the volatile aspect of the business. The world and business change. Finally we must talk about the fact that the Universalist theory is vague because it ultimately poses no limits and levels of reward and commitment The Universalist approach suffers from a too simplistic view of strategy making it obsolete or outdated in some cases and remains unrealistic.

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