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

Essay Question 1 Critic tout ensembley assess whether strategic HRM selective information tracks to high public presentation Introduction in that respect is a controersy whether the Strategic Human Resources trainion (SHRM) leads to high exercise. A general idea of SHRM is that the linkage of trouble and deployment of the individual at bottom the degraded to the tune boilersuit and its environment whereas HRM is the activities that take place to a lower place this argona. Truss and Gratton (1994). It spotlights on semipermanent system.Two theoretical perspectives to the Strategic Human Resources Management (SHRM) giveing be introduced and comp ared to determine whether they manage to high murder or non. First, the Universalist draw close is one outflank route of dealing serviceman resource to break handicraft cognitive operation. Second, the Contingency forward motion is to lay out HR policies and exerts with the details of business strategy to make bel ieve a controlling come to on business. In addition, two examples a large family and a medium- surface fraternity will be used to illustrate both approaches practically.At the equivalent time, there are shortens associate with theoretical perspectives that need to be discussed. often(prenominal)(prenominal) issues are the implementation problems as well as the measurement problems. after(prenominal) all, the question will be answered with analysing all of the above. The advantages and disadvantages of each approach will be identified by gathering views of researchers. To the final stage, both approaches are macrocosm recognised if the linkage is personifyence to high performance and to the direct of measure that are being noticed. Different approaches to SHRM * Universalist approachA Universalist approach is known as beaver practice homo resource management (HRM). This approach describes there is one best way to manage hoi polloi in order to improve plaqueal performa nce. It argues that all organizations, regardless of sphere, size or country, will benefit from identifying, gaining consignment 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 professional to implement them. For example, a research from Delery and Doty (1996) identify certain practices that improve organizational performance.The detailed components are high performance employ systems (HPWS) crisphead lettuce (1999) Appelbaum et al (2000), high commission management Walton (1985) guest (2001a, 2001b) and high intimacy management Wood (1999a). An early(a) researcher by Jeffrey Pfeffer (1998) identifies that seven universally applicable practices will benefit all firms. The components include 1) Employment security, 2) detailed hiring, 3) Self-managed teams and de pennyimeralized decision-making, 4) Comparatively high compensation, 5) spacious development, 6) Low status distinctions and barriers, 7) Extensive sharing of financial and performance information.The implication is that when a coherent cumulation of HR practices is dodgingd, the integrated HR practices will electric shock positively on organizational performance. The best practice HRM sees there is one best way of managing the great unwashed and that is suspend crosswise all circumstances. * Contingency Approach On the other hand, the Contingency approach is known as best-fit HRM. It takes musical score of factors such as organizational size, location, sector, strategy and the nature of rifle. Baird and Meshoulams (1998) model advocates that HRM approaches will differ giving to different life-cycle stages.These life cycle stages ranges from start-up to maturity. While an organization is growing and maturing over time, it becomes gradually complex. thitherfore, more than sophisticated HR structures and policies are needed. This approach focuses on two types of fit and line management consolidation. The firs t type is External fit and it is commonly known as vertical fit. It is in coherence and alignment with business strategy and outside(a) grocery factors. When HR policies and practices are line up to strategic focus, performance will improve. ushers (1985) strategic excerpts on 1) Cost Leadership, 2) Differentiation and knowledgeableness and 3) Focus are espouse. The second type is Internal fit and it offer in like manner interpret to horizontal fit. HR policies and practices are all fit together so that they are in coherence. They are also mutually reinforcing and are applied continuously. Jeffrey Pfeffers (1998) seven practices are adopted. Lastly, take in management integration is when line managers act as a critical character in implementing HRM strategy. Best-fit HRM suggests that the best to manage people will digress depending on organizational circumstances, and hence, the link to business strategy is come across. empiric licence of SHRM model * A large gild macadamize The UK quarrying company macadam has over 12500 employees at present. The operations function is key to overall companys performance. It needs the support of finance managers, zone managers and HR managers. A finance manager delivers financial and management accounts to contribute the strategic decision-making process by forecasting financial performance.A zone manager manages operational performance. They meet and improve targets for cost, quality, delivery, safety and business ethics shown in key performance indicators (KPIs). Lastly a HR manager ensures business managers gift HR policies and procedures. The companys goal is to achieve objectives by motivation 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 proceeding Responsibly objectives.Firstly, Tarmac focuses on a high take of employee occasion and encourages high employee com mitment to the organization so that workers feel they are trust and treated in an open and positive attitude. For example, employees regularly discuss with managers more or less their viewpoints 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 supervision and a flat hierarchy. A coach style manager develops employees to manage themselves sort of 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 disintegration in waste. In 2010, eighteen workshop-training sessions were held for all site employees on carbon dioxide awareness and energy. All district 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 be nefit 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 some advance(a) digital media companies and is ranked the Sunday 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 penny sum up in earnings per annum. Their guiding principles are used as a framework. This is to ensure the internal fit and the external fit of company. The company is at the growing stage which a lot of the recruitment drift is on discovering the potential staff. -Level frequently seeks appropriate employees to be supported to work with the company. To fit HR policies and practices together, i-Level uses physical arrangements to remove top-down hierarchy in order to encourage employees participation, communication, creativ ity, self-managed teams and organisational values. As a result, a complete, open political program office is the environment where employees conduct their normal day-to-day operations. Moreover, i-Level sees pay is solid for performance. 15 per cent of the companys pre-tax profit is kept for performance bonuses from 2003 to 2004.Mean eyepatch, 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 personal training and development purposes that are no obvious relation with work. The belief is to develop the skills and interests of workers in ways not studied before. This is expected to call forth i-level workers innovative thoughts at work by means of practices outside the companys work area.To summaries, i-LEVEL achieves combative advantage finished innovation and which competes in very tight moil markets. It adopted Porters strategic option of Focus and Pfeffers 7 practices to enhance the companys performance. Additional issues to reflect * Problems of implementation Line managers are central HRM performers in the organization, and they play a vital role in implementation of HR policies and practices. They influence their teams performance in a direct manner. A tote up of factors account for the line management problem. Firstly, it seems there is degeneration to line managers.For instance, line managers do not want the responsibility of being a line manager or do not use up enough time to deal with it accurately. They might not have the skills to hatch HR issues successfully 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 insurance in this area. Secondly, McGovern et al (1997), Marchington (2001) and Hutchinson and Purcell (2003) identify there are differences between espoused and positive policies that are relatively recognized to line managers.For example, some policies are prescriptive 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 referable to new firms structures. For instance, virtual and network companies have less turn over line manager characters than the layered vertical company. One observable implication is pressure for reducing the size of the HR department.There will be a cut down in poem of HR professionals. Ultimately, these factors all affect the organizational performance due to self-defeating implementation of HR policies and practices. * Problems of measurement Fitzgerald (1991) and Neely (1998) stated that performance measurement is a key issue in guaranteeing the effective implementation of a firms strategy. However, using inadequate measurements is poor in supporting managements business objectives. The followings are the circumstances. Scientists use large-scale data groups made self-completed questionnaires.This will lead to two problems. First of all, there is dependence on one person, to interpret 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 may have express 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 outpouring in a self-managed team. Lastly, Atkinson (2005) suggests that the measurement of productivity in the service sector provoke be exceptionally challenging.It is always motiveless to get typical, like financial statistics. To sum up, the measurement of data are related to the level of relevance to business performance. Critical analysis 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 Work Systems is strong. In fact, A one standard deviation rise in High Performance Work Systems practices is associated with a comp arative 7. 5 per cent drop in labour turnover. 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 see (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 based on individual performance while they are working as a team.Furthermore, Boxall and Purcell (2003, p. 64) commented while multi-national companies make the hunting expedition 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 costs are expensive when they use these practices. To summaries the best pra ctice approach, Guests (1987) argues that there is no best practice.At the aforesaid(prenominal) 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(prenominal) 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 engaged in specialist production for recess markets and needd technical and professional workers. The second study in 1999 showed differentiate that organizations introduced a larger number of high performance work practices ha d much enhanced business performance. As a result, companies moving from less than tail fin to 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 sufficient managerial types to three genetic 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 period associated with accomplishment. It is easy to identify the key factors that beat 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. * Comparing both approaches Each approach has advantages rise and disadvantages evidence. It could be argued that different approaches can apply in different 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 67 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.Two 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 applied 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 highly 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 compare 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 ri gid and inflexibility due exists of complex external environments. Furthermore, 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.