APPROACHES TO STRATEGIC HRM

Strategic HRM adopts an overall resource-based philosophy, as described below. Within this framework there are three possible approaches, namely, high-performance management (high-performance working), high-commitment management and high-involvement management.


Resource-based strategic HRM


Aresource-based approach to strategic HRM focuses on satisfying the human capital requirements of the organization. The notion of resource-based strategic HRM is based on the ideas of Penrose (1959), who wrote that the firm is ’an administrative organization and a collection of productive resources’. It was developed by Hamel and Prahalad (1989), who declared that competitive advantage is obtained if a firm can obtain and develop human resources that enable it to learn faster and apply its learning more effectively than its rivals. Barney (1991) states that sustained competitive advantage stems from the acquisition and effective use of bundles of distinctive resources that competitors cannot imitate. As Purcell et al (2003) suggest, the values and HR policies of an organization constitute an important non-imitable resource. This is achieved by ensuring that:

● the firm has higher quality people than its competitors; 

● the unique intellectual capital possessed by the business is developed and nurtured; 

● organizational learning is encouraged; 

● organization-specific values and a culture exist which ’bind the organization together (and) gives it focus’.

The aim of a resource-based approach is to improve resource capability – achieving strategic fit between resources and opportunities and obtaining added value from the effective deployment of resources. In line with human capital theory, resource-based theory emphasizes that investment in people adds to their value to the firm. Resource-based strategy, as Barney (1991) indicates, can develop strategic capability and produce what Boxall and Purcell (2003) refer to as ’human resource advantage’.

The high-performance management approach 

High-performance working involves the development of a number of interrelated processes which together make an impact on the performance of the firm through its people in such areas as productivity, quality, levels of customer service, growth, profits and, ultimately, the delivery of increased shareholder value. This is achieved by ’enhancing the skills and engaging the enthusiasm of employees’ (Stevens, 1998). According to Stevens, the starting point is leadership, vision and benchmarking to create a sense of momentum and direction. Progress must be measured constantly. He suggests that the main drivers, support systems and culture are:

● decentralized, devolved decision-making made by those closest to the customer – so as constantly to renew and improve the offer to customers; 

● development of people capacities through learning at all levels, with particular emphasis on self-management and team capabilities – to enable and support performance improvement and organizational potential; 

● performance, operational and people management processes aligned to organizational objectives – to build trust, enthusiasm and commitment to the direction taken by the organization; 

● fair treatment for those who leave the organization as it changes, and engagement with the needs of the community outside the organization – this is an important component of trust and commitment-based relationships both within and outside the organization.