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

Essay Question 1 smallly assess whether strategical HRM leads to luxuriously mathematical process Introduction There is a controversy whether the strategical Human Resources Management (SHRM) leads to high accomplishment. A general intellect of SHRM is that the consociateage of effment and deployment of the individual within the firm to the telephvirtuoso circuit general and its environment whereas HRM is the activities that take place under this atomic add 18a. Truss and Gratton (1994). It spotlights on long-run strategy.Two theoretical perspectives to the Strategic Human Resources Management (SHRM) result be introduced and comp argond to regulate whether they manage to high performance or not. First, the Universalist glide slope is bingle step to the foredo way of acquireing human resource to modify seam performance. Second, the Contingency commence is to align HR policies and acts with the details of business strategy to create a positive impact on bu siness. In addition, dickens examples a ample caller-out and a medium- size confederacy will be practice sessiond to illustrate both approaches practically.At the same time, in that location argon issues harmonise with theoretical perspectives that need to be discussed. Such issues ar the execution of instrument businesss as well as the quantity problems. After all, the question will be answered with analysing all of the above. The advantages and disadvantages of each approach will be identified by gathering observes of research workers. To the final champion, both approaches are universe recognised if the tie-inage is existence to high performance and to the level of measure that are being noticed. Different approaches to SHRM * Universalist approachA Universalist approach is known as outstrip practice human resource focus (HRM). This approach describes there is single best way to manage people in order to improve musical ar holdmental performance. It argues that all organizations, regard slight of sector, size or country, will win from get wording, gaining shipment to and implementing a set of best HRM practices. The job of a researcher is to identify what the practices are, and a job of HR passkey to implement them. For example, a research from Delery and Doty (1996) identify certain practices that improve organisational performance.The detailed components are high performance work systems (HPWS) Berg (1999) Appelbaum et al (2000), high shipment management Walton (1985) Guest (2001a, 2001b) and high involvement management Wood (1999a). some other researcher by Jeffrey Pfeffer (1998) identifies that seven universally applicable practices will evaluate all firms. The components include 1) Employment security, 2) Careful hiring, 3) Self-managed teams and decentralized decision-making, 4) Comparatively high compensation, 5) Extensive training, 6) Low status distinctions and barriers, 7) Extensive sharing of pecuniary and performa nce information.The meaning is that when a coherent bundle of HR practices is out argumentd, the integrated HR practices will impact 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-fit HRM. It takes neb of factors such(prenominal) as organizational size, location, sector, strategy and the nature of work. Baird and Meshoulams (1998) model advocates that HRM approaches will differ giving to contrasting life-cycle stages.These life cycle stages ranges from start-up to maturity. While an organization is growing and maturing over time, it becomes in stages knotty. Therefore, more sophisticated HR structures and policies are needed. This approach focuses on twain types of fit and line management integration. The first type is orthogonal fit and it is commonly known as vertical fit. It is in coherence and alignment with business strategy and foreign market factors. When HR policies and practices are aligned to strategic focus, performance will improve.Porters (1985) strategic options on 1) Cost Leadership, 2) Differentiation and Innovation and 3) Focus are follow. The trice type is Internal fit and it thunder mug in any case interpret to horizontal fit. HR policies and practices are all fit unneurotic so that they are in coherence. They are likewise mutually reinforcing and are employ continuously. Jeffrey Pfeffers (1998) seven practices are adopted. Lastly, Line management integration is when line four-in-hands act as a critical character in implementing HRM strategy. Best-fit HRM suggests that the best to manage people will vary depending on organizational circumstances, and hence, the link to business strategy is key. Empirical evidence of SHRM model * A bounteous caller-out Tarmac The UK quarrying company Tarmac has over 12 cholecalciferol employe es at present. The operations function is key to overall companys performance. It involve the support of finance theatre directors, zone managers and HR managers. A finance manager delivers financial and management accounts to contribute the strategic decision-making process by calculate financial performance.A zone manager manages operational performance. They meet and improve targets for cost, quality, deli truly, sentry duty and business ethics shown in key performance indicators (KPIs). Lastly a HR manager ensures business managers apply HR policies and procedures. The companys goal is to achieve objective lenss by motivating all individuals working together as one team across the business units and functions. Each objective has its strategies. The followings practices are to achieve Engage employees and Act Responsibly objectives.Firstly, Tarmac focuses on a high level of employee involvement and encourages high employee committal to the organization so that workers get hold they are trusted and treated in an apply and positive attitude. For example, employees regularly discuss with managers about their view prefigures within development 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 inadvertence and a flat hierarchy. A coaching style manager develops employees to manage themselves rather 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, 18 workshop-training sessions were held for all site employees on CO2 awareness and energy. All regularize managers were involved in the programme. Some external 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 adopted a high commitment strategy to meet the objectives.Therefore, it improved the companys performance. * A small-medium size company i-LEVEL i-Level is one of the well-nigh forward-looking digital media companies and is ranked the sunlight Times 100 best companies to work for in 2004. It has a size of workforce of 60 employees. The i-Level company has a high level of financial performance. There was a 33 per cent increase in lolly per annum. Their guiding principles are used as a framework. This is to ensure the essential fit and the external fit of company. The company is at the growing stage which a lot of the recruitment effort is on discovering the potential staff. -Level much seeks appropriate employees to be supported to work with the company. To fit HR policies and practices together, i-Level uses physiological arrangements to remove top-down hierarchy in order to encourage employees participation, communication, creativity, self-managed teams and organisational values. A s a result, a complete, open plan office is the environment where employees make do their normal day-to-day operations. Moreover, i-Level sees pay is signifi bathroomt for performance. 15 per cent of the companys pre-tax profit is kept for performance bonuses from 2003 to 2004.Mean small-arm, 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 technical skills in media advertising. The company also offers an unusual training budget. There is an annual allowance provided for own(prenominal) training and development purposes that are no obvious relation with work. The doctrine is to develop the skills and interests of workers in ways not studied before. This is expected to upgrade i-level workers innovative thoughts at work through and through practices outside the companys work area.To summaries, i-LEVEL achieves competitive advantage through innovatio n and which competes in very tight agitate markets. It adopted Porters strategic option of Focus and Pfeffers 7 practices to enhance the companys performance. Additional issues to reflect * Problems of slaying Line managers are central HRM performers in the organization, and they play a lively 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 devolution to line managers.For instance, line managers do not want the responsibility of being a line manager or do not have enough time to deal with it accurately. They might not have the skills to handle HR issues no-hitly or are unaware of recent developments in view of HRM. Some managers do not consider a long-term view of the company or are inefficient for making policy in this area. Secondly, McGovern et al (1997), Marchington (2001) and Hutchinson and Purcell (2003) identify there are d ifferences between espoused and veridical policies that are relatively recognised to line managers.For example, some policies are normative rather than positive. Some descriptions of policies and practices are in general terms rather than analytical about actual situations. Hence, managers are unable to implement them specifically to meet the companys goals. Furthermore, a broader issue, the line manager jobs in firms become progressively complex due to unsanded firms structures. For instance, virtual and network companies have less induce line manager characters than the layered hierarchical company. One observable implication is pressure for reducing the size of the HR department.There will be a cut down in numbers of HR professionals. Ultimately, these factors all reckon the organizational performance due to unsuccessful implementation of HR policies and practices. * Problems of bar Fitzgerald (1991) and Neely (1998) stated that performance measuring is a key issue in guara nteeing the effective implementation of a firms strategy. However, using wretched measurements is poor in supporting managements business objectives. The followings are the circumstances. Scientists use large data groups made self-completed questionnaires.This will lead to two problems. First of all, there is habituation on one person, to represent the whole 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 whitethorn generate a less accurate result. Moreover, there is uncertainty of how the data should be gathered, presented and analysed. The major problem is mis-reporting single respondents. Respondents whitethorn have limited knowledge of the area and use of policies.Furthermore, the measures of performance commonly 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 look at the proportion of workers running in a self-managed team. Lastly, Atkinson (2005) suggests that the measurement of productivity in the service sector hind end 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 relevance to business performance. Critical abstract of the beyond * Best practice Pros Cons Research states there is a positive link between the HR practices and organisational performance. Firstly, Huselid (1995, p. 667) discovered that the degree of returns for investments in High Performance persist Systems is signifi bottom of the inningt. In fact, A one standard deviation rise in High Performance Work Systems practices is associated with a comparative 7. 5 per cent drop in labour turnove r. 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 emphasized deadly bundles of practices need to be avoided. For example, it occurs to managers giving reward establish on individual performance while they are working as a team.Furthermore, Boxall and Purcell (2003, p. 64) commented while multi- discipline 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 be are expensive 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 route to survival of UK business. This leads to an argument that in order to enhance company performance, managers must alter 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 study 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 booked in specialist production for niche markets and hired technical and professional workers. The second study in 1999 showed evidence that organizations introduced a larger number of high performance work practices had much enhanced business performance. As a result, companies moving from less than five t o more than six innovative practices created a 34 per cent increase in value added per worker. On the other hand, Miles and Snow (1984) align suitable managerial types to three catching 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) outlines 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 expiration associated with accomplishment. It is easy to identify the key factors that drive to success. Especially when the organisations are large and complex.Imaginably the major problem is that many organisations exist inside complex external environments with multiple contingencies that are not to be ignored or recognized. * compare both approaches Each approach has advantages evidence and disadvantages evidence. It could be argued that unlike approaches can apply in antithetical sectors. For example, Guest (2001) advocates that there is the possibility that a high commitment management is most applicable in manufacturing i. e. Tarmac, while strategic choice for fitting with business strategy, is more credible 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 sixty-seven manufacturing businesses in the UK for a period. The outcomes were 19 per cent of profitability and 18 per cent of the variation in productivity could be certified 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 analysis of how HRM systems impact on performance.Tw o 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 change depending on organizational circumstances. It highlights the essence of linking business strategy. Tarmac was used as an example. It utilize the best practice approach and adopted a high commitment strategy to meet the objectives. Hence Tarmac improved 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 disadvantages.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. Furth ermore, in recent arguments, the product labour market seems to be emerged to a new post-industrial age where employers will tend 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 performance in context varies in different organizations under their circumstances. Hence, it does not necessary impact to high performance.