However, more recently, writers have begun to approach the area of HRM from a much more macro-orientation that is, what could more accurately be called SHRM (Butler et al., 1991). For example, Schuler and Walker (1990) noted that human resource strategy referred to a short-term focus on business needs and defined it as "a set of processes and activities jointly shared by human resources and line managers to solve people-related business problems". Guest (1989) suggested that SHRM is concerned with ensuring that "human resources management is fully integrated into strategic planning; that HRM policies cohere both across policy areas and across hierarchies and that HRM practices are accepted and used by line managers as part of their everyday work". Probably the best definition offered to date, however, comes from Schuler (in press) who states that SHRM is "all those activities affecting the behavior of individuals in their efforts to formulate and implement the strategic needs of the business".
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In other words, SHRM is the macro-organizational approach to viewing the role and function of HRM in the larger organization (Butler et al., 1991). Thus, for the purposes of this assignment, strategic human resource management can be defined as the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals. This definition highlights the two important dimensions that distinguish it from traditional HRM.
First, vertically, it entails the linking of human resource management practices with the strategic management process of the organization (Dyer, 1985; Golden Ramanujam, 1985; Guest, 1989; Lengnick-Hall & Lengnick-Hall, 1988; Schuler, in press).
Second, horizontally, it emphasizes the coordination or congruence among the various human resource management practices (Baird & Meshoulam, 1988; Milliman, Von Glinow, & Nathan, 1991; Schuler & Jackson, 1987; Snell, in press; Wright & Snell, 1991) through a pattern of planned action. Our definition does not explicitly address the congruence with other organizational contingencies such as product life cycles (Baird & Meshoulam, 1988), but these are implicit given the link to organizational goals.
This definition provides a clear exposition of the variables of interest and their interrelationship to SHRM theory and research. SHRM theory should be concerned with the determinants of decisions about human resource practices, the composition of the human capital resource pool (i.e., skills and abilities), the specification of required human resource behaviors, and the effectiveness of these decisions given various business strategies and/or competitive situations.
After having the theoretical definition of SHRM, now in this assignment it is moving towards the adoptability of SHRM to Pakistani organizations and then after analyzing it to Pakistani organizations it is going to analyzed in the institutional context by keeping the theory and practice in use.
Adoptability of SHRM to Pakistani organizations:
Nowadays, it is a common belief in the business world that the human resources of an organization can be a source of competitive advantage, provided that the policies and practices for managing people are integrated with strategic goals and objectives. Strategic human resource management (SHRM) emphasizes the importance of establishing correspondence between human resource policies and organizational strategic goals.
Adoptability of SHRM:
Now, when it comes to the adaptation of SHRM then it means to the implication of theoretical foundations of SHRM to the real world. Adaptation involves the real application of SHRM on every level including organizations, institutions including both formal and informal etc.
Now, going to analyze SHRM into Pakistani organizations.
2.2.1. CONDITION OF SHRM IN THE DEVELOPED COUNTRIES:
In this ever changing competitive world it is become very difficult for the companies to become differentiated from others. Each company can have the same infrastructure, technology, policies, raw material and processes. The only resource which can give competitive edge to one company over another one. This competitive edge enables the company to sustain and increase their market share. The strategic role of Human Resource Management has been realized world over a period of time. Organizations have realized the dire need of establishing well developed Human Resource Department that can contribute toward organization's productivity. Human Resource Department performs both core and supporting functions.
2.2.2. CONDITION OF SHRM IN PAKISTAN-UNDER DEVELOPED COUNTRY:
Economies and businesses all over the world are facing new trends of globalization and free market. HRM in Pakistan was adopted in response to these challenges and to speed up the pace of economic and business activities. However, HRM is failing to do so. The concept of HRM is still in its preliminary phase in Pakistan and in small business it is almost nonexistent.
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Unfortunately, not much attention has been paid to Human Resource Management in Pakistan.Â Pakistan is still in the process of renaming our Personnel Departments as "Human Resources", whereas the developed markets are raising questions: "Is HR a career in crisis?" The fact is, the role of HR is evolving constantly and it is needed to move away from the traditionally administrative function and consider it as a major contributor in organizations successes by aligning the HR goals with the Organizational Goals. Our situation is different to that of the developed markets because HR here is mainly practiced by multinational companies. A few enlightened Pakistani firms also have HR functions but mostly intermingled and not well defined. There is an increasing trend of outsourcing the HR functions like recruitment and selection, training and development. In many organizations various Western HR models are applied as such ignoring the cultural difference, infrastructure difference and size of organization. However, the criticisms about HR seem to be the same around the world and this is at the heart of the issue.
2.2.3. Levels of Organizations in Pakistan:
The concept of HRM is still in its preliminary phase in Pakistan and in small business it is almost nonexistent. So, on the basis of this Organizations working in the Pakistani context have three levels in which:
Local small sized organizations
Local large scale fully developed organizations
HR is progressing very fast. More and more companies are now looking for HR Managers to manage their human assets and their issues. More people are coming in the field.
These are those multinational corporations, whose networks are widely spread all over the world including Pakistan. So, when they come to Pakistan these organizations bring their developed systems including HR systems.
So, they are at the early stages of adaptation of SHRM. These MNCs are like UNILEVER, MICROSOFT, MOBILINK, international banks like Royal Bank of Scotland and etc.
Local small sized organizations:
Now, when it comes to those organizations which are of very small size and their networks are not fully spreaded in all over Pakistan. However these organizations are usually founded by the local nationals of Pakistan.
In these sorts of organizations even HR is not fully introduced and at which level it is introduced it is labeled as the admin department and HR department.
So, in these organizations SHRM's application is far behind as we are living in Adam Smith's age.
Local large scale fully developed organizations:
And now when it comes to those organizations which are of large size and their networks are also fully spreaded in all over Pakistan. However these organizations are also usually founded by the local nationals of Pakistan. In these sorts of organizations HR is fully introduced as stated by them even they have ISO certifications but they are still far behind the full application of HR Systems and when it comes to the SHRM's introduction they must focus on the Scot and Snell's SHRM's proposed theories.
Institutional context (Pakistan):
One theory that has recently evolved in organization theory and now this perspective is being introduced to develop the theoretical foundations of SHRM, is the institutional perspective (Meyer & Rowan, 1977; Scott; 1987). Although this theory is currently not well developed and consists of a variety of approaches, the ideas of institutionalism may help in understanding the determinants of HRM practices.
The basic thesis of institutional approaches is that many structures, programs, and practices in organizations attain legitimacy through the social construction of reality over a period of Time. Meyer and Rowan (1977) stated "Institutionalism involves the processes by which social processes, obligations, or actualities come to take on a rule like status in social thought and action." Scott (1987) stated that "institutionalism is viewed as the social process by which individuals come to accept a shared definition of social reality--conceptions whose validity is seen as independent of the actor's own views or actions but is taken for granted as defining the way things are' and/or the way things are to be done,' .
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The main points behind the institutional perspective are (a) what many view as rationally-derived organizational structures and practices may only appear to be so and (b) structures may serve some functional goal, although they had not been designed for that particular purpose. For example, Granovetter (1983) stated that a given practice may serve some function, yet this fact is not necessarily proof that the need fulfilled was the basis for the practice's origin.
Scott (1987) discussed a number of ways that organizational structures can become institutionalized. Although his focus was on the institutionalization of organizational structures, similar processes operate with regard to organizational practices. However, it will be discussed a few of these institutional influences, and present examples of how these processes may influence HR practices.
First, according to Scott (1987), certain practices can be imposed coercively, as in the case of governments mandating laws or companies mandating changes in an acquired subsidiary. The employment practices that have evolved in response to Equal Employment Opportunity regulations serve as one example of how HRM practices have been imposed by external agents. Similarly, minimum wage legislation directly influences the pay practices of organizations. In the absence of these regulatory guidelines, one could easily hypothesize that HRM practices would differ substantially from the present state.
Second, practices can be authorized or legitimized through an organization voluntarily seeking approval of a super ordinate entity, as in the case of hospitals and colleges seeking accreditation from outside agencies. Once again, many affirmative action practices in organizations stem from a desire to appear socially responsible to various civil rights groups. Similarly, a form of employment accreditation has evolved through the administration and dissemination of surveys of the "best" companies to work for. The desire of organizations to appear "accredited" by these surveys can affect the HRM practices regardless of the effectiveness or efficiency of those practices.
Third, practices can be induced through outside agents providing rewards to organizations that conform to the wishes of the agent. For example, the Malcolm Baldrige Quality Award, which is offered to companies who exhibit the highest levels of product quality, has created a justification for a number of new quality programs in American corporations.
Fourth, practices can be acquired through one organization modeling its practices based on practices of other organizations as a means of appearing legitimate or up-to-date. Examination of the faddish nature of many HRM programs provides numerous examples of organizations implementing HRM practices in order to appear modem or professional. Quality circles are an example of a practice that was deemed to be effective in Japanese organizations and then saw tremendous growth in U.S. companies, in spite of the fact that these programs were only occasionally successful (Lawler & Mohrman, 1987).
Fifth, organization practices can be institutionalized through an imprinting process whereby the practices adopted at the beginning of the organization's history remain embedded in the organization. This is an example of organizational inertia, whereby the practices that exist originally are unlikely to be changed in the absence of some compelling need. For example, Eisenhardt (1988) argued that the age of department stores affected their choice of whether to use salaries or commission among retail stores due to the types of practices that were deemed to be acceptable at the time of the store's creation. She found that age was related to the use of salaries, such that newer stores were more likely to use salaries.
The implications of the institutional perspective for SHRM are important. Similar to the resource dependence perspective, the institutional perspective notes the fact that not everything that happens is necessarily intended and that not all outcomes are the result of conscious decision processes. Thus, it focuses on the fact that not all HRM practices are the result of rational decision making based on an organization's strategic goals. In fact, many HRM practices may be the result of social construction processes whereby external entities influence the creation and implementation of practices that come to attain a mythical sense of legitimacy. Once again, this focuses attention on the variance in HRM practice not explained by strategic decision making processes.
In addition, due to the inertial nature of many HRM practices according to institutional theory, the task of SHRM might be to address the institutional aspects of HRM practices. For example, substantial research evidence exists that demonstrates the invalidity of the traditional employment interview for predicting job performance, yet this practice continues in many organizations (Janz, Hellervik & Gilmore, 1986). The institutional nature of this practice certainly helps to explain the continued use of it in the face of convincing evidence of its invalidity. How many more HRM practices continue to exist, not because of their effectiveness, but due to organizational inertia?
As, there are two types of institutions:
Formal institutions include government, public and private organizations, large sized firms, and etc. formal institutions in Pakistan have adopted HR syytems but they are still in apth way to adopt SHRM.
2- Informal institutions.
Informal institutions include culture, language, society, and etc. however, HR strategies must be adopted to bring a good and positive change in Pakistani nationals.