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What is HRM

“A managerial perspe­ctive which argues the need to establish an integrated series of personnel policies to support organi­sat­ional strategy” ( Buchanan & Huczynski, 2004)
“HRM involves management decisions related to policies and practices that together shape the employment relati­onship and are aimed at achieving indivi­dual, organi­zat­ional and societal goals” (Boselie, 2002)
“Human resources are something more than just ‘resou­rces’. HRM is not concerned solely with financial perfor­mance. HRM focuses on the exchange relati­onship between the employee and organi­zation. And the shaping of the employment relati­onship takes place in an era of continuous tension between the added value and moral values”. (Paauwe, 2004)

Transl­ating develo­pments into HR practices

Organi­sat­ional strategy
HR strategy
Intended practices
Actual practices
Perceived practices
->
->
HR profes­sional makes HR policies
Line managers are the enactors of HRM in practice. They are crucial for employee’s success.
Employees’ experi­ences and percep­tions of HR practices imple- mented by their line manager and/or the organi­zation
   
For example: Transl­ating new external develo­pments (e.g. aging popula­tion) into new HR policies HR profes­sionals mainly innova­tors, designers and facili­tators of HR policies
  
Examples: employee percep­tions of the fairness of a perfor­mance appraisal procedure and the role of the evaluator employee percep­tions of the intensity of employee develo­pment efforts made by the organi­zation

Levels of Strategy

Corpor­ate­-level strategy – the overall direction that an organi­sation will follow.
the overall purpose and scope of an organi­sation and how value will be added to the different parts (business units) of the organi­sation
involves decisions about the organi­sation as a whole

Busine­ss-­level strategy
how to compete succes­sfully in particular markets
decisions are related to strategic business units (SBU)
SBU is a part of an organi­sation for which there is a distinct external market for goods or services that is different from another SBU

Operat­ional strategy – the delivery of corporate and business strategies in terms of resources, processes and people.
how the component parts of an organi­sation deliver effect­ively the corporate- and busine­ss-­level strategies in terms of resources, processes and people

The seven Weconomy trends

Self-p­rod­uction (3D)
produces its own goods
Circular
sharing, leasing, reusing, repairing, refurb­ishing and recycling existing materials and products as long as possible
Functional
one that optimizes the use (or function) of goods and services and thus the management of existing wealth (goods, knowledge, and nature).
Bio-based
using renewable biological resources sustai­nably to produce food, energy and industrial goods
Collab­orative
consumers use new technology to provide, buy, sell, share or rent goods and services
Sharing
assets or services are shared between private indivi­duals, either free or for a fee, typically by means of the internet.
Internet of Things refers to the rapidly growing network of connected objects that are able to collect and exchange data in real time using embedded sensors.
Internet of Services - everything that is needed to use software applic­ations is available as a service on the Internet, including the software itself, the tools to develop the software, and the platform (servers, storage and commun­ica­tion) to run the software.

Business models

Platform business model
Community based business models
Circular business models
a business model that creates value by facili­tating exchanges between two or more interd­epe­ndent groups, usually consumers and producers. (Uber, Airbnb and Pinterest)
people centered, where collab­ora­tion, partne­rship, advocacy, and co-cre­ation are top values. (Ben&­Jer­ry's, TOMS, Warby Parker)
articu­lates the logic of how an organi­sation creates, offers, and delivers value to its broader range of stakeh­olders while minimising ecological and social costs. (Timbe­rland, Nike, IKEA)

Innova­tiv­e/new business models

The seven Weconomy trends
New business models
Platform business models, Community based business models, Circular business models
Implic­ations for HRM
Compet­ition will come from different, unexpected corners
Commun­ities - Recrui­tment: talent will choose companies that have sustai­nab­ility on no.1
!hat is your reputa­tion? - Platform economy: more indepe­ndent workers, changed employee - employer relations
Not only manufa­cturers but also service companies will be affected
Think of univer­sities, free online courses etc
21st century skills (creat­ivity, critical thinking) more important than diplomas?
Need for continuous develo­pment & training

HRM and Perfor­mance

HRM Activities
HRM outcomes
Perfor­mance
Recrit­men­t/s­ele­ction
employee satisf­action
profit
HR planning
employee motivation
market value
Rewards
employee retention
market share
Partic­ipa­tio­n/c­ons­ult­ation
employee presence
increase in sales
Decent­ral­isation
social climate between workers and management
produc­tivity
Training
employee involv­ement
produc­t/s­ervice quality
Opport­unity for internal promotion
trust
customer satisf­action
more autonomy
loyalt­y/c­omm­itment
develo­pment of produc­ts/­ser­vices
formal procedures
  
future invest­ments
coaching

Conflicts in expect­ations

Conflicts in expect­ations
Conflicts in expect­ations between Line Managers and HR
Short-term profit and high salaries versus long term growth
Line manager has little time for people management (selec­tion, perfor­mance apprai­sals, exit interviews etc) and puts it on the shoulder of HR
Quality & design versus short-term profit
Line rather focuses on production / financial perfor­mance than people manage­ment.
Enviro­nmental posture versus short-term lower-cost
Invest in training & develo­pment versus own respon­sib­ility of employees
Recrui­tment from within own network versus open recrui­tment
Financial indepe­ndence versus reliance on external financing in order to grow
Multin­ati­onals: Expat compen­sation in the home country versus the host country
Hire a diverse team versus homogenous teams
Flexible shell versus permanent employment
Outsource to low cost country or stay

Strategies in brief

Company
Strategic Principle
Coolblue
Customer first “every­thing to get a smile”
General Electric
Be number one or number two in every industry in which we compete, or get out
Southwest Airlines
Meet customers’ short-haul travel needs at fares compet­itive with the cost of automobile travel
Vanguard Investment company
Unmatc­hable value for the invest­or-­owner
Wal-Mart
Low prices, every day
Netflix
You can watch as much as you want, whenever you want without a single commercial – all for one low monthly price

Why HRM matters

HRM is part of the total company strategy
HRM brings Added Value
Making a difference to an organi­zation
Helping shape the organi­zat­ion's business strategy
In order to add value, HRM must: “Achieve outcomes that signif­icantly increase the organi­zat­ion's capability to differ­entiate itself from similar organi­zat­ions, and thereby enhance its progress”. (Harrison 2002)

HR’s Strategic Challenges

The need to support corporate produc­tivity and perfor­mance improv­ement efforts.
Employees play an extensive role in employers' perfor­mance improv­ement efforts.
HR must be more involved in designing —not just execut­ing—the company's strategic plan.

HR = shared respon­sib­ility

Line Manager
HR MANAGER
Department level
Organi­sation level
Management of own team
Specialist advise / knowledge
Daily respon­sib­ilities
Implem­ent­ation of policies
Technical knowledge
HR strategy
Work conditions of employees

Develo­pments in HR

Changing labour market
Role of govern­mental bodies
Role of indivi­duals
Changing economy
Role of organi­zations
Covid pandem­ic-> article Blackboard
Technology and digita­lis­ation
Servic­e-o­rie­ntation
Role politics and munici­pal­ities
Mergers & acquis­itions
Reorga­niz­ations
Private equity interv­entions
Global­ization
Financial crisis
Labour market; ageing population
Role society, CSR
Struct­uring
Increased Workload
Career Options
New Supervisor
Reduced Workforce
Acquis­itions
Changing Work Processes
New Technology
It has impact on organi­zations and employees
  

HR’s Strategic Role

HR helps top management formulate strategy in a variety of ways by:
Supplying compet­itive intell­igence that may be useful in the strategic planning process.
Supplying inform­ation regarding the company’s internal human strengths and weakne­sses.
Build a persuasive case that shows how—in specific and measurable terms— the firm’s HR activities can and do contribute to creating value for the company.

What is strategy?

“Strategy is the direction and scope of an organi­zation over the long term, which achieves compet­itive advantage for the organi­zation through its config­uration of resources within a changing enviro­nment and to fulfill stakeh­olders' expect­ati­ons”.

Elements of successful strategy

Well defined long-term goals
Appraisal of the enviro­nment
Knowledge of own resources & capabi­lities
->
Successful implem­ent­ation
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Successful Strategy
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The Strategic Management Process

Strategic management
Strategy
The process of identi­fying and executing the organi­zat­ion’s mission by matching its organi­sation capabi­lities with the demands of its enviro­nment
A strategy is a course of action.
 
The company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opport­unities and threats to maintain a compet­itive advantage

Evaluating resources

Tangible resources
Intangible resources
Financial:
Techno­logy:
Borrowing capacity
Know how, R&D, design
Internal funds
Knowledge residing in technical & scientific employees & teams
Physical:
Reputa­tion:
Land & buildings
Brands, company reputa­tion, social respon­sib­ility, enviro­nmental pro active­ness, quality
Plant & equipment
Human resources:
Technology
Education, training, experi­ence, adapta­bility
Raw materials

Global Corpor­ations

Have no borders
Think global and act Local
Have no time Zone
Use virtual teams to succeed
Demand global skills
Are culturally diverse
 

Evaluating capabi­lities: a functional approach

Function
Examples of Capabi­lities
Corporate Management
Financial manage­ment, strategic control, coordi­nation of business units, social respon­sib­ility
Management Inform­ation System
Rapid inform­ation transfer
Research & Develo­pment
Develo­pment of new products, design, innovation
Manufa­cturing
Flexib­ility, quality, design, effici­ency, eco-ef­fic­iency
Marketing
Design, brand manage­ment, promotion, enviro­nmental marketing
Sales & distri­bution
Sales respon­siv­eness, efficiency & speed of distri­bution, customer service

Unique resour­ces­&c­apa­bil­ities

 
Like compet­itors or easy to imitate
Better than compet­itors, difficult to imitate
Resources
Threshold resources
Unique resources
Capabi­lities
Threshold capabi­lities
Core compet­ences
The base of compet­itive advantage

Examples: Distin­ctive capabi­lities

Toyota, Honda:

Low-cost, high-q­uality manufa­cturing capabi­lity, and short design­-to­-market cycles

Intel:
Ability to design and manufa­cture ever more powerful microp­roc­essors for PCs

Zara:
Trendy fashion inspired by the catwalk for a reasonable price (limited stock, many styles, 2 weeks to develop a product, and get it to the stores).

Recrui­tment and selection

The aims of resour­cin­g/r­ecr­uitment are:
To attract a pool of suitable candidates for vacant posts
To use a fair process and be able to demons­trate that this process was fair
To ensure that all recrui­tment activities contribute to organi­sat­ional goals and the desired organi­sat­ional image
To conduct recrui­tment activities in a cost-e­ffe­ctive and efficient manner

As a strategic activity, recrui­tment (and selection)
is a necessary part of a strategic approach dedicated to gaining compet­itive advantage that comes from having a superior workforce.

Perfor­mance Management

Perfor­mance Management as an integrated and strategic process:

Contri­butes to the effective management of indivi­duals and teams in order to achieve high levels of organi­sat­ional perfor­mance.

The goal of the organi­sation is to motivate everyone in the organi­sation and ensure that they are all working towards the same strategic object­ives.
 

Analysis of external enviro­nment

Object­ives:
Identify the main macro-­env­iro­nmental forces that influence an industry (DESTEP)
Identify the main structural features of an industry that influence compet­ition and profit­ability (PORTER)
Evaluate trends within industries to forecast future changes in industry profit­ability
Identify opport­unities / Identify Critical Success Factors

Porter 5 forces framework + supple­ments

Suppliers
Bargaining Power
->
Industry compet­ition
Substi­tutes
Threat
->
Existing compet­itors
Potential entrants
Threat of entrance
->
Buyers
Bargaining Power
->
Supple­ments
Bargaining Power
->

AkzoNobel case

How did HR support this growth?
How did HR support this growth?
Hire an HR team
Admin: proper employee contracts, visa’s, archives
Payroll system and aligning benefits
Focus & attention to policies- proced­ures- standa­rdi­zat­ion­-co­mmu­nic­ation
Recrui­tment and Selection: 110 employees hired in 18 months
Factory in Saudi Arabia: flexible force of 50 % changed into permanent staff
Focus on Health & Safety (absen­teeism, admin & follow up)
Employee Survey was held, and results discussed
Change of leadership in some areas
Career develo­pment opport­unities for High Potentials from Europe­/Asia
Perfor­mance Appraisals system in place
Training & Develo­pment (to motivate, to increase produc­tivity, to develop)
Proper Onboarding (welcome, schedule, trainings program)
           
 

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  • Published: 18th June, 2022

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