Critically analyse the key strengths and limitations of two SHRM systems covered this trimester that workplaces use to manage their human capital so that the strategic goals of the organisation are met.Draw on your own and others’ postings in the three weekly forums to support your analysis and demonstrate evidence of critical thinking and analysis supported by your research of your organisationusing academic sources and not just provide a description of HR systems.
Human Resource Management
Human Resource Management is defined as a function of an organization which is designed for maximizing the employee performance of an organization to meet the strategic objectives of the organization. It is primarily concerned with the manner in which people are managed and directed in an organization while focusing on the policies and the systems available. HRM departments of organizations are basically responsible for a range of activities which includes employee recruitment, training and development, rewards and recognition, and performance appraisal. It also concerns the industrial relations which balance the practices with the rules and regulations arising out of collective bargaining as well as governmental laws (Coro Strandberg 2009).
HRM is a product of human relations movement which started in the initial 20th century when researches had begun documenting the ways in which businesses are creating value through strategic management of their workforce. The functions had been initially dominated by transactional work like payroll and benefits administrations. However, with globalization at its peak, company consolidation, future research backed by technological advancements, HR is now focused towards strategic initiatives such as mergers and acquisitions, succession plans, talent management, industrial & labor relations, diversity, etc. All these factors and developments coined the term Strategic Resource Management (CSB 1995).
Strategic Human Resource Management
Strategic Human Resource Management is defined as integration of HRM processes of an organization which the strategic management processes. In today’s dynamic environment in which the business performs its regular operations, SHRM has emerged as a key resource. However, despite being so popular, there have been plenty of theories and researches which have been around. SHRM can also be regarded as an approach for management of human resources which offer strategic framework for supporting long term business goals and objectives. The entire approach revolves around long term people issues as well as macro concerns regarding structure, culture, values, structure, commitments as well as matching the resources for the future requirements (Corwin 2005).
Further, it believes that the key for improved business performance that comes with comprehensive coverage of various definitions as well as approaches to HRM is what the strategic HRM focuses on. Some studies have proposed that HRM is a complex process which is constantly evolving along with theories in this particular subject area for ongoing discussions by academics as well as other commentators (Mark Huselid 2006). The following study tries to evaluate the two different theories of SHRM which have been widely popular and debated across sectors. The report offers definition and detailed review about those theories and their derivations. In the later part of the research, there has been a comparison which has been done for both the theories. The two theories under study are:
- Resource based Model
- SHRM Competency Model
Resource based Model
Resource based model is defined as an approach which draws attention towards the strategic value of workforce as well as issues of the organizational learning. It has mostly been said to embrace the soft view of human resource management and its genesis possesses distinctive competence which enables them for performing their competitors. As conceptualized by Penrose in the year 1959, it believes that the firm is a collection of productive resources. She has distinguished between the physical and human resources and drew attention for issues regarding learning which includes knowledge as well as experience of a management team (WLU 2004). She also emphasizes the aspect which many organization theorists had taken for granted which believed that all the organizations are heterogeneous. An extension to this theory was by Barney in 1991 where he had pointed out sustained competitive advantage is not achieved by way of analysis of the external market positions but by careful analysis of the skills and capabilities of an organizations.
The theory argues that the 4 characteristics of resources and capabilities are very important for sustaining competitive advantage which includes value, rarity, inimitability and non-sustainability. Looking it through this perspective collective learning in workplace through managers as well as non-managers for coordinating diverse knowledge and skills by integrating diverse information technology becomes a strategic asset for an organization. The theory further states that there are a range of characteristics which includes inimitability, limited sustainability, overlap with strategic industry factors and scarcity which varies with changes which are relevant set of strategic industry factors. Owing to uncertainty, conflict and complexity, organizations would employ different strategic assets without having a single set being easily imitated (Japss 2010).
Managers may devise heuristic solutions for navigating among the range of cognitive as well as affective biases characteristics of the humans and the organizations. Adding further in the research Cappelli and Singh in the year 1992 envisioned a link between business and HRM strategies which was based on mutual recognition of sustainable competitive advantage. They proposed that skilled employees potentially create this advantage for postindustrial organization. Elaborating further it means competitive advantage which arises out of firm specific, valuable resources which are difficult for imitating. Here the significance of HRM demonstrates how, by developing valuable, non-transferable skills and HR impacts positively over the long term organizational performance. In a similar angle, Kamoche in 1996 had argued that when the 2 different dimensions of human resource competencies as well as the organizations core competencies gets aligned; it will be possible for realizing full value of the entire synthesis. John Purcell in 1995 had built upon the theory of Capelli and Singh for offering a pretty optimistic scenario in comparison to the previous studies. The argument as stated by him believed that HRM capacities could make the potential contributions for the strategic HRM policies and implementations (Observator Iorh 2009).
As per the theory HR strategies are those strategies which help in avoiding short-term, decentralized financial control. While Strategic HRM is towards development of horizontal long term strategies that put a premium over the basic HRM strategies and emphasizes the intangible, skill transfer and learning which leads towards reduction of the transaction costs. Summarizing the entire study, it can be said that it is important for demonstrating progressive HRM or strategic HRM strategies by the managers for improving the organizational economic performances. The challenges for SHRM are for showing the link between the policies, practices and organizational outcomes which are meaningful for the corporate board (Observator Iorh 2009).
Limitations of Resource Based Model of SHRM
- The term resource based: It appears for meaning different things or different authors. Some competing terms also include distinctive competencies, dynamic capabilities as well as core competencies of an organization. These definitions vary wide range from narrow specific interpretations to broader descriptions which could even be tautological. Moreover, resources are defined as the firm strategies, while firm strengths are further defined as the strategic resources and capability is defined in terms of competence where competence can be defined in terms of capability (SHRM Foundation 2013).
- The prescriptive message: As per the prescriptive message based on the Theory Y of McGregor, workers have talents which have rarely been fully utilized by any workplace which could further be seen as nothing more than good intentions or whistling in the dark. However, this believe has been questioned by several theorists. Some believe that the perspective of strategic HRM would make the mistake of accusing the matching model which seems to ascribe preeminence of the inside-out perspective of strategy. Further, as per the practitioner literature it warns that it would not be a good idea to ignore strategic relevance of both the internal and external factors and propounds to have a dual focus over the market analysis and the organizational capabilities (UOP 2006).
- Implicit acceptance of unitary perspective: Another flaw of the resource based SHRM model is the belief that it stems out of implicit acceptance of the unitary perspective of postindustrial workplace where goals get shared and levels of trusts are usually high. Quite similar to the matching model, the profounder of the resource based SHRM perspective tend to omit the dynamics of the workplace trade unionism in a strategic equation. However, researchers typically tend to recognize importance of workers contributions for labor processes, knowledge & skills, proactive leadership, synergy, stimulating learning process and encourage innovation. It contradicts the matching approach and is a dynamic mode of strategy. Therefore a comprehensive theory of strategic HRM would be pluralist and further incorporate the worker interests within nexus of an organization.
- No empirical support: As per the available literature the empirical studies have lagged behind in this particular model of SHRM. Although, the entire analysis has been based on sophisticated theories and believes of macrotheoretic levels, there has been no support of microtheoretic foundations as well as empirical verifications. The basic premises of resource based approach is sustainable competitive advantage or an above average performance which is derived from workplace learning and the ability of the organization to learn quicker for applying it in a better manner as compared with its rivals. It thus makes the training and development of employees an essential component but not a pivotal role.
SHRM Competency Model
This particular model identifies the meaning of being a successful professional in respect to performance continuum which is evaluated from the early days to the executive days of a career of an individual in a global perspective. The competency model and the resources which have been developed by using it offer the basis for talent management which is spread across the HR lifecycle. SHRM competencies offer support to the HRM professionals as well as the organizations to identify as well as develop a high quality HR practitioner who has critical competencies which are required from the work of the most challenging issues revolving around people management. The entire effort is towards delivery of HR strategies which enable the businesses in evolving for the future (SHRM n.d.). This model is said to comprise 9 different competencies. One of the nine is based on technical competency while the other 8 are focused around behavioral competencies. The different competencies which have been identified are:
- Human Resource Expertise
- Relationship Management
- Leadership and Navigation
- Global and Cultural Factors
- Ethical practices
- Critical evaluation
- Business Acumen
Each of the competencies mentioned above is applicable for every individual where the evaluation takes place from the early levels of his career and moves through mid-level, senior level and executive level. As per this model it offers different foundational competencies of HR professionals which are required for success. They are:
- At entry, mid, senior, & executive levels
- In the small, medium & the large organizations
- At public, private, non-profit, and not for profit sectors
- At organizations having both domestic and multinational operations
This model predicts on the belief that knowledge along with behavior is an essential ingredient for offering a continued success to the HR. To elaborate further it can be said that an HR professional needs to initially develop his own foundation of HR knowledge which has to be followed by leadership behaviors exhibited with knowledge which supports the business decisions in regards to people management issues. The entire base along with accompanying behaviors would grow as the manager grows in an organization or his own career. It says that managers start work as a generalist where they touch different faces of HR on each day of their jobs and develop into specialists in different areas such as recruiting. However, when one moves from one position to the other and has more accountability as well as responsibility, they would gain competence and confidence in each of the leadership behaviors which may apply (Farabi 2012).
Further coupled with identifying the elements which one needs to know as an HR, SHRM addresses the mentioned competencies at the four stages of any typical HR career. Although, the competencies mentioned is required at each level, they need to be exhibited in a much more sophisticated manner at the later stages. On looking at the visual of this model, people would come to know that at the center is the critical HR core which includes the functions of HR which must be studied and have a level of understanding as and when one enters in the field of work and starts off. Also, no longer it is required for any professional for entering the HR through the back door. As per the theory this field is pretty robust and dynamic which mentions that some kind of schooling is very important. It offers a basis for understanding the technical areas of the field and the different roles one can plan as an HR. Core competencies i.e. HR expertise and practices are the core center of the model which includes workforce planning and employment. It is extended to include the HR development, compensation & benefits, risk management, Human Resource Technology, Global or IHRM capabilities, change management, talent management,, employee and labor relations, etc. Around all these areas, the leadership behaviors which one develops and uses by the HR lens. It is regarded as a great HR leaders viewing the business they serve. With time they grow in their knowledge of the business, in terms of people management skills, learn of applying the knowledge for situations at hand for arriving at best possible solutions for the level of competence and expertise (Think Wise INC n.d.).
An in-depth analysis of the model would show these behavioral competencies stretching HR leader’s competencies which one moves through the career as each of them develop into more skilled and refined approach for the world as the whole and solving the problem in particular. Further, each of the competencies come with sub-competencies which define it more specifically. These subs come with stepping stones for understanding the bigger picture of the behavior. Researches have been developing tools in connection to the competency model for SHRM which helps in assessing a manager for developing a unique professional development plan and connecting to the resources for filling the need one may have (Ijhssnet 2012).
Developing competencies for gaining HR experience
In order to develop these competencies there are a few things which are particularly important:
- Initially one needs to recognize the importance of each and stay prepared for any opportunity which might come in the way. One would also require to be aware of the strengths and weaknesses.
- The next step is to get a certification of a management degree where one gets to develop a business case for convincing the business leaders of the fact that you want to continuously grow and learn about the dynamics of the management arena. It can be substituted by attending seminars or conferences which add value to the existing information on management available (RVHRA n.d.).
- Lastly, knowing that competencies put into the model is pretty complex and developmental, one must be aware that it cannot be learnt quickly. One would need to develop an approach which would develop the concerned individual in the career as an HR. Once an individual becomes more strategic, they would find it easy to know about solutions to these issues (Ituarabic 2007).
Benefits of SHRM Competency Model
- This model offers directional guidance in terms of behavior of individuals at each level and what are the requirements for improving upon those areas.
- In an environment where the model is properly defined and understood, the measurability would facilitate in differentiating the effective performance from the ones which are average or substandard. The assessment information could be used for benchmarking the management effectiveness among the organizations.
- These are core competencies which are regarded as critical to business survival and success can be learnt or improved.
Limitations of SHRM Competency Model
- One of the limitation of this model is that it is common to all and broad enough which makes it not specific to any single kind of industry.
- It is a very good scenario but it is pretty difficult to be implemented.
- The model can be quite confusing as it is applicable for each level of career development. The variables and the levels of efficiency would need a much detailed description (RVHRA n.d.).
After evaluating both the models on SHRM it can be said that the models present two different perspectives. While the resource based model offers researched derivations from the perspective of different authors, the competency model lists down the key areas of development for an HR manager in view of the career development. The resource based model is largely focused around offering a guiding path to the manager as well as an organization to lists down the path for achieving and managing resources in a way which integrates strategies of the organization to fall in line and achieve the main goals and objectives (Focusintl 2010). The competency model on the other hand is largely focused around a career development path which intends to develop the skills of a manager while he progresses in his career at different levels of organization. Further, with integrated approach which aligns strategy with the organizational objectives, the people management of an organization is carried out (OCL 2010).
In the coming years when the human resources would be the most critical aspect of any organization, the need of better integration of the HRM activities with the strategies would add towards offering a competitive advantage to any organization. It would further help an organization to show the care and focus which it gives to the employees and their needs. This would help in facilitating a better work atmosphere and hence help in increasing the efficiency of the employees. The coming decade would see further derivations and transformations in regards to the SHRM strategies which would change the dynamics of working environment and SHRM policies practiced by any organization.
Coro Strandberg 2009, The Role of Human Resource Management in Corporate Social Responsibility.
CSB 1995, Human Resource Management.
Corwin 2005, Strategic Human Resource Management.
Mark Huselid 2006, Strategic Human Resources Management: Where Do We Go From Here?.
WLU 2004, The complex resource based view: Implications for theory and practice in strategic Human resource Management.
Japss 2010, The Relation of Strategic Human Resource Practices with Firm Performance.
Observator Iorh 2009, Strategic human resource management: The evolution of the field.
UOP 2006, Strategic Human Resource Management.
SHRM, SHRM Competency Model.
Farabi 2012, Using Competency Models to Improve HRM.
Think Wise INC, Using a Competency-Based Approach: Linking Core Competencies to your Business Strategy.
RVHRA, SHRM’s HR Competency Model:A Roadmap for Building Proficiency.
SHRM 2004, Performance Management, accessed.
SHRM Foundation 2013, Shaping an ethical workplace culture.
SHRM Workplace forecast 2009, Workplace culture forecast.
Ituarabic 2007, Strategic Human Resource Management.
OCL 2010, Models of human resource management.
Corwin 2005, Strategic Human Resource Management.