Human resource has become a source of core competence - a unique capability in the organization that creates high value and that differentiates the organization from its competition. Therefore it is paramount to add a strategic touch in sourcing, selecting and managing this unique capability to gain competitive advantage. Linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation and flexibility bring about the strategic touch, otherwise known as Strategic Human Resource Management.
'Strengths Based' approach in SHRM terms and Models
Critically analysing BAE Systems scenario, it is possible analyse its operations which reveals SHRM terms and models that helps in understanding the context in which the 'strength based' approach has been used.
BAE has been recruiting and hiring personnel to match their competence with the organizations goal. Its tradition model, 'â€¦.clients going to the businessâ€¦' has since changed to a more customer-oriented approach. In the process it has meant designing and implementing a set of internally consistent policies and practices that ensure the human capital of the firm contributes to the achievement of its business objectives (Schuler & MacMillan 1984, Baird & Meshoulam 1988, Jackson & Schuler 1995) - 'â€¦customer-orientated organization that does maintenance and support'. This change is in response to BAE external business environment that demands a customer-orientated approach and as such the need for better deployment of human resource - an emphasis of SHRM
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"â€¦We are putting significant numbers of people into RAF bases, working alongside the RAF - our people managing RAF people in the process..." (pg 2, paragraph 3)
Since a firm's strategy (BAE strategy - 'rather than clients going to the business, it was to the clients) is a reflection of its response to the external changes, human-capital, with a broad array of skills compatible with the corporate strategy, is a catalyst for fulfilling the strategic goals. This calls for melding of HR function (selection and hiring) with a firms strategy - congruence between HR practice and business strategy (Miles & Snow 1984, Baird & Meshoulam 1988, Wright & McMahan 1992), a practice known as best-fit - an approach on the idea that human resource strategy flow from business strategy; matching the human strength (talent, Skills, knowledgeâ€¦etc) toward the achievement of the organisation goal.
In modern competitive times success is achieved by adapting 'enlightened', 'progressive', 'people first', 'high performance' or 'high commitment' employment practices. This seems to the same idea BAE is banking on, otherwise known as best practice - a bundle of HR policies that lead to highly motivated and committed employees who are the key to an organization's competitive advantage.
'â€¦Instead of focusing on an individual's weaknessâ€¦focus on their strong points and allow them to use those to their full potential' (pg 2, paragraph 3)
Further, the above statement highlights one aspect BAE is focusing on, the 'people' to achieve it strategic goals. So as to achieve high performance and / or high commitment, it is worldly accepted that people work better while doing what they are best at doing (Huselid, 1995; Becker and Gerhart, 1996; Guest, 1997.).
'â€¦they had been givenâ€¦things they would have naturally been drawn to, that they enjoyed and found energising' (pg 4, paragraph 2)
Change indeed is inevitable at BAE. The business model it has been relying on is changing, calling for a more customer-orientated approach.
â€¦rather than clients going to the business, it was going to the clients
The mere fact of implement a 'strength base' approach, in itself is change. It can be concluded that the change is fostered towards remaining competitive in the changing environment, thus BAE is seeking to match its human resource with business strategy, a concept in SHRM known as contingency approach which brings about two orientations, the internal labour orientation that seeks a long-term relationship with its employees and external labour orientation that seeks flexibility and does not make long-term commitments employees.
From BAE's case, certain key features emerge that helps in identifying the SHRM model it is using to recruit and select its personnel.
BAE business goal is to change its earlier approach of customer going to the business, to BAE going in such of the client.
Always on Time
Marked to Standard
Adams' "â€¦what we're trying to move to is much more customer-oriented organisationâ€¦"
The 'strength based' approach as used in BAE scenario can be referred to as the Human Resource Strategy (HRS) and is being mended with BAE Business Strategy (BS) - 'rather than clients going to the business, it was to the clients' to achieve a 'fit' to achieve its goal, in response to its changing business environment. This leads to a conclusion that the relationship between BS and HRS is that of Fit.
Environment Analysis, another SHRM model feature, emerges;
...business transformation led to â€¦working with an industrial artist to produce a poster that illustrated for staff and leaders alike the challenges ahead. (pg 3, paragraph 3)
This analysis helps BAE understand the environment which it operates in and be able to adopt as it evolves. Also the analysis prompt BAE to carry out a situation analysis to determine it current status, especially in terms of human resource to ascertain its capability to achieve its in response to the change in the business environment. This goal, I can say by analysis of BAE case, has been occasioned by BAE customers seeking value-add service on top of just the designing and build of aircraft services, an issue of stakeholder interest - the customer.
"â€¦move toâ€¦a much more customer-orientated organisation that does maintenance and support" (pg 3, paragraph 2)
From the case, strength-base approach has resulted in high performance by employees doing more than they used to do even though nothing had change in terms of the job roles - an issue to do with work systems and HR flow, key attributes of a HR policy. Also, for BAE employees to do things they would have been drawn to and found energising is a catalyst for achieving competence and commitment among the employees, the desired result (outcomes) of the HR policy being used by an organisation, in this case BAE.
The above paints a picture of the kind of SHRM model BAE that is skewed toward the Harvard Model; an approach seen to enhance high level of trust and mutuality. A representation of the model in light of the BAE case is as follows.
Employee - job satisfaction
Organisation/Mgt - Performance and competitiveness
Customer - quality, value for money
1.2) From a Human Resource Development (HRD) perspective the value of this Strength based approach from the perspective of learning, development and change
Introduction - The Link between HRD, Learning, Development and change
HRD refers to activities geared to cause employees 'to improve', 'make better', 'to increase' from an individual perspective (in terms of skills and knowledge) and from an organisation perspective (in terms of business performance through the people) resulting in an organisation gaining competitive edge and ability to succeed in the future. HRD has therefore become critical (reason for a strategic approach to human resource) in nurturing human-capital talent, bringing to the fore the need for organisations to provide opportunities to attract, retain and offer growth opportunity to individual, especially in today's knowledge economy, thus the recognition of the criticality of learning and development in the context of human-capital the development and organisation capability.
An organisation's business environment keeps changing hence the needs to have the capacity to embrace and manage changes as they evolve. Through people organisation achieve their goals. Likewise through people an organisation is able to adapt / change to the new way of doing business.
The value of this Strength based approach from the perspective of learning, development and change
Learning and Strength-based approach
Learning"â€¦has acquired visibility and saliency" because it sits at the juncture of new thinking concerning the nature of learning about new forms of knowledge, the transformation of the nature of work and the modern enterprise in a globalized economy' (Stern and Sommerlad, 1999). From BAE perspective, the implementation of the strength-based approach can be construed to be a learning experience for the organization.
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Also the strength-based approach can be viewed from Kolb et al's (1974) learning cycle that focuses on an integrated and planned approach based on experience
Fig 2: Kolb et al's (1974) learning cycle
Reflection on experience - involve looking back on experience and assessing the results. In relation to BAE, this is highlighted by the change in the way it used to do business.
'â€¦the traditional centralised business model....was changing - rather than clients going to the business, it was going to the clients'. (Paragraph 2, page 3)
Conceptualise - involves seek to understand why things turned out as they did, draw conclusions and make some hypotheses. The strength based approach from the case is defined as:
'â€¦Instead of focusing on an individual's weaknessâ€¦ you should focus on their strong points and allow them to use those to their full potential (Paragraph 3, page 2)
Implementing the approach at the board level was hypothetical in the sense that the approach had been around for a while without much success any surety it would work.
Apply -testing the hypotheses
'â€¦The board was allocated several key business tasksâ€¦ allocated according to strengths'. (Paragraph 1, page 4)
Act - Do something. In BAE's case
'â€¦ The extent to which a strength-based approach will be integrated into BAE is under review'. (Paragraph 6, page 4)
The fact that BAE board 'â€¦want to take this forward' underscore the nature of learning, that of a continuous process.
The value of Strength-based approach is that, employees are able to identify their strengths helping individuals understand their talents and how they can consciously apply these at work through developing knowledge and skills (which can be learned) to turn natural talents into world-class strengths. This approach has contributed to a high-performance work environment.
(Organisational) Development and Strength-based approach
As defined by Richard Beckhard (1969), "Organization development" (OD) is a planned, top-down, organization-wide effort to increase the organization's effectiveness and health. OD is undertaken to achieve a flexible (not only enabling organizations to embrace change, but exploit change in the external environment to organizational advantage) and creative organization that constantly seeks to improve and reinvent the way it carries out its business, and serves its customers.
How rapidly an organization adapts to changing business circumstance is what delivers competitive advantage in today's global marketplace. Example, today, customers can be located anywhere in the world, customers demand near-instantaneous responsiveness and solutions. Such factors have impinged on organizational development. As a resulted there is a growing trend around the world to introduce skill-specific forms of training, as well as the growing recognition of individual learning contribution to organisation learning, both of which emphasise the link between competitive advantage and, training and development specifically around role and tasks. This seems to be the perspective BAE is borrowing by implementing a 'strength-based' approach.
'â€¦Rather than being shared out according to job functionâ€¦tasks were now allocated according to strengths (skills)' (paragraph 1, pg 4)
A broader approach could be placed on identifying the skills and experience (BAE: through strength-based approach), which broad business direction (BAE: 'â€¦customer-orientated organisation that does maintenance and support) suggests will be required in the future together with planning around developing talent at different levels in the organisation (BAE: 'The extent to which a strength based approach will be integrated into BAE is under review').
Change and Strength-based Approach
An organisation can only perform effectively through interaction with the broader external environment of which it is part. Therefore the structure and functioning of the organisation must reflect the nature of the environment in which it is operation. For its survival and future success the organisation must be readily adaptable to the external demands upon it - it must be responsive to change. From BAE perspective
'The traditionally centralised business modelâ€¦was changingâ€¦' (Paragraph 2, page 3)
'â€¦to move toâ€¦much more customer-orientated organisationâ€¦' (Paragraph 3, page 4)
The above reflects a change and BAE needs to adapt to the new way of doing business. Implementing the Strength-based approach comes in handy in identify the set of skills required to undertake such a move.
1.3 From an organisational and employee perspective the weakness of'strength' based approach
The direction an organisation takes is always governed by goals that it wants to achieve and the strategies thereof applied to achieve them. Since the only way to achieve such goals is through people, there has to be a link between the strategies and the people.
From BAE's perspective, the strength-based approach may be viewed as a best-practise approach - a bundle of HR policies.
'â€¦Instead of focusing on an individual's â€¦focus on their strong points and allow them to use those to their full potential (pg 2, paragraph 3)
According to Purcell (1999, p. 27) the best practice model does not discuss on company strategy. The underlying premise of this view is that organizations adopting a set of best practices attract super human resources, talent and competencies. "These superior human resources will, in turn, influence the strategy the organization adopts and is the source of its competitive advantage." (Milkovich & Newman, 2002, p. 30) .Therefore, for this approach, policy precedes strategy. This brings out the first weakness of the strength-based approach - there is no direct link with the overall organization strategy.
The strength-based approach primary focus is the skills of a person thereby limiting people to their area of interest. This leads to specialization and in as much as it make an organization / individual competent in the area of interest, to an extent this may prove very expensive to the organization since specialized skills are scarce and may come at a cost and should an organization be pursuing a cost leadership strategy this may undermine its intended goal - cost reduction, which indeed is a competitive advantage virtue. This by analysis can be presumed true of the BAE scenario.
Furthermore, it is prudent to focus also on the weakest points. For example a manager, using the WH Smith competence model used to underpin graduate recruitment and development, needs the following competencies:
written communication ( communicate on paper)
Oral communication (clearly speak and with ease)
leadership (directing, command authority)
team membership (team player)
Planning and organizing
It may not be possible to be good at all the above competencies, albeit those being key requirements from a managerial focus, hence their weakness. But due to performance demands this may be sacrificed for performance.
'Watts agrees: "â€¦it's all about business performanceâ€¦if someone was the greatest strategist in the world but terrible at people management, we wouldn't be able to tolerate that, no matter how strong they were in the other areas. So it's playing to people strength where possibleâ€¦"'
Human Resource development (HRD) emphasizes the need to cause employees 'to improve', 'make better', 'to increase' from an individual skills and knowledge perspective, and from an organisation performance through the people perspective. As a result an organisation gains competitive edge and ability to succeed in the future
From the above nature of HRD, the strength-based approach lucks a clear way of improving skills in the sense that it is impossible to pinpoint areas of improvement from a skilled resource perspective performing tasks he/she is attracted to and good at doing.
'..How do you help someone who has risen to the top by being strong in most areas?' (Paragraph 6, page 3)
Complacency, egoism could result if a strength-based approach was implemented. An employee would feel superior since his skills is unmatched and as such would take things for granted while not putting enough effort and thereby affecting performance.
'Linleyâ€¦"people often take things they are good at for granted, because it feels natural and doesn't require a lot of effortâ€¦" (Paragraph 7, page 3)
2.1: The main features of a performance management system
Driven by market imperatives to develop more efficient organizational structures and practices, within an organization, there is an increasing emphasis on behavioural competitive strategies that rely on core competencies and capabilities among employees, not only because they provide the most effective response to market demands, but also because they are not easily copied by competitors.
Performance management is the process of creating a work environment or setting in which people are enabled to perform to the best of their abilities. It's the identification, evaluation and developing the work performance of employees so that an organization's goals and objectives are more effectively achieved.
Ensuring a productive and successful performance management system (PMS) is hard work and requires rigor and discipline to which an organization must be willing to commit. Key features of PMS include:
Making the business case - the objective
The path (strategy) an organization will take goals to be achieved and role of each employee need to be communicated to achieve oneness, coherence and understanding throughout the organization. A PMS, likewise, need to be communicated pre-launch, (re)launch and post launch. There is need to cultivate enthusiasm, understanding and commitment through continual explanation of using the system to the entire organization
In itself, PMS is an accountability system, showing the business results everyone (from senior managers to front-line employees) is accountable for and setting expectations for achieving the desire results. There should be a continual review of the objective in with the organization strategy. This is especially so taking into account the market dynamics keep changing and the organization need to align itself to be able to coup with change.
It is critical to develop confidence and the competence of all employees around fulfilling their roles when implementing a process intended to change behavior. Actively involving the employees throughout the performance cycle will result in the effectiveness of the PMS.
Both the leaders and employees need to know their responsibilities in the process; how to create measurable objectives and observable competencies; how to track; how to seek, give, and receive feedback; how to evaluate performance; and how to conduct effective performance discussions. All this require skills development in the form of training to be provided for both the leaders and employees.
Aligned systems and Processes
The alignment process begins with the PMS supporting the business strategic priorities and goals. It is critical to determine the relationship between other systems (for example team working) and the performance management system and how data from it will be used to support other HR systems, such as training and development, succession planning, selection and promotion, rewards and recognition, and compensation.
For success in a specific position, competencies need to be identified and incorporate into the selection process for hiring people into the position which late be included into performance plans to track and evaluate. This provides an immediate link between the competencies used for selection and the competencies used to evaluate performance in the new job. The two systems are aligned and reinforce each other.
Providing clear measures
What are the outcomes envisaged from the system (PMS) and how do we measure? Before implementation, it is paramount to decide upon the criteria for evaluating the systems effectiveness. Landmarks for evaluation would include compliance ( for example, are performance plans, interim reviews, and final reviews, being completed on time?) and quality and effectiveness of the system (quality audits of performance plans and reviews, questions on employee satisfaction surveys and exit interviews, and so on)
2.2: Critical evaluation of the relationship and contribution of performance management systems with strategic human resource management principles
Concept of Human Resource
Today, all organizations (private business, academics and governments) throughout the world appreciate that the human resources can be a source of competitive advantage, provided that the policies for managing people are integrated with strategic business planning and organizational culture (Beer, Spector, Lawrence, Quinn, Mills, & Walton, 1985) - an important emphasis of congruence between human resource policies and organization objectives. This brings about the aspect of Strategic Human Resource Management (SHRM) - the linking of human resources with strategic goals and objectives in order to improve business performance and develop organizational culture that foster innovation and flexibility.
SHRM can be seen as a three-dimensional model (Gratton and Truss, 2003): it is based on vertical alignment between people strategy and operational strategy; on horizontal alignment between individual HRM functions; and on an action and implementation dimension. Further in HRM, there are two strands of thinking: 'hard' approach to HRM that focuses on cost reduction and containment, links with strategy and the role of HRM in furthering the competitive advantage of the organization and; the 'soft' HRM that builds on human relations traditions and stresses the importance of the subjects as a means of furthering employee satisfaction and a range of related humane objectives that are achievable from the insights of systematic studies within HRM.
Strategic human resource management and performance
In the 21st century, organizations are so keen and are striving to achieve competitive advantage and profits through effective knowledge management (generating knowledge through collective learning). When human resource strategies are based on competence (ability requiring skills and knowledge which are acquired), the competency point of view is relevant to all functions. The key functions of HRM include personnel recruitment, development, and career planning and performance evaluation.
In an organization there is a combination of material and immaterial resources that are expected to provide competitive edge to the organization (Kamoche, 1999). Resources and capabilities can be defined as skills, collective learning (core capabilities embedded in the organization's structures and processes) or as core competence. The capabilities include human capital (Individual competence is a good example), Structural capital (consists of intellectual property and infrastructure; systems of performance evaluation and management). The relationship capital refers to those distinct features that mark the organization's relationship with customers, personnel and interest groups. From this viewpoint, HRM is seen as a promoter of strategic capability, as a driver or as the organization's core competence. The latter consider that HRM functions of an organization can create unique competence that makes the organization stand out from the rest. This in turn increases its competitive advantage.
Competence can be viewed from two levels: organization's core competence that incorporates collective learning and individual competence is usually based on the relationship between individual skills and work demands. The latter is often linked to good work performance. The prerequisites for competency depend on circumstances and are related to the facilitators of and barriers to reaching organizational goals, created by the organization and by social relations. Individual competency potential and the characteristics of the organization influence work competency i.e. effective response to work demands. Here, it is a question of reconciling desired behaviors and outcomes with actual behaviors and outcomes.
Performance evaluation at the level of an organization and performance evaluation at the level of an individual constitute the basic functions of SHRM and can be used to co-ordinate strategies and personnel strategies and HRM functions. This mechanism is expected to establish a link between HRM and performance by increasing the motivation and building performance capability of personnel
However, Panayotopoulou, Bourantas and Papalexandris (2003, p. 682) state "research has failed to consistently support the efficacy of fit" and its link to performance. Key citation is that most research on HRM and performance are based on the assumption that an organization pursues an integrated set of objectives and human resource that is in contrast with three recent developments:
move towards more flexible internal structures associated with different forms of cooperation and collaboration among organizations and some of these include strategic alliances, business networks, joint ventures and linkages
Outsourcing and inter-organizational contracting trend. These approaches do not consider the influence of multi employers and customers in the shaping of the employment relationship (Rubery, Earnshaw, Marchington, Cooke and Vincent 2002.)
Much of organizational performance discussion is as though organizations are homogenous entities with clearly defined boundaries and similar contexts and characteristics. Recent developments suggest the need to understand the boundaries and how these might impact on organizations and the employment relationship.
Hutchinson, Kinnie and Purcell (2001) report, in relation to the notions of people management and performance a number of aspects demonstrating the difficulty of evaluating performance impact are identified.
The relationship between HR practices and business performance can be identified at different levels ranging from the plant/establishment level through to the corporation level.
Lack of consensus on what constitutes a HR package and no agreement on the level of specificity or HR practices.
There is a different way of measuring HR practices and a limited use of performance measures.
in some cases sophisticated measurement techniques are used and these are hard to understand
Few studies take account of the reaction of employees so that it is difficult to understand how the HR practices feed through to improved levels of performance and thus causality is an issue.
Guest (1997) concur that there is a need for a basis of comparison and also a need to understand the relationship between types of performance data.
5 The main features of Human Resource Development (HRD) strategies and how they influence organisation change
Definition of HRD
By definition, HRD strategies are plans defining how human resources would be utilized through the use of an integrated array of training, organisational development and career development efforts to achieve individual, organisational objectives.
The increasingly competitive business environment organization have become increasingly interested in and appreciate their employees who are seen as key players contributing to the core competencies of the organization (Hamel and Prahalad, 1994). As a result, it has become paramount for the organization (the management) to harness and nurture the talents and capabilities of the employees for good performance and competitive edge. This has given rise to the need of human resource development.
Features and their influences:
'People are our greatest asset', is on the lips of many senior managers. During selection and hiring of an employee, at that time the employee's competencies (ability- requiring skills and knowledge) were deemed as fitting with the organisation objectives. As a result of changes taking place in the business environment (Political, Economic, Social and Technological) most like the organisation will have changed in the way it used to work so as to encompass/embraces these changes resulting in skills deficit. In response to the need to meet the skill gaps and increase productivity, organisations are keen to encourage a series of initiatives, and which recognise the importance of developing the skills, for example multi-skilling and learning to achieve flexibility.
However, in as much as 'people are our greatest asset' philosophy goes, there is poor investment in training and development in most of the organisation (Redman and Wilkinson, 2001; Harrison, 2002). Furthermore the development budget is often the first target when economies are needed.
Creating learning Environments
Changes in the business environment are leading to flexible and creative organisations that are constantly seeking to improve and reinvent the way business is carried out and how customers are severed - an organisation development (OD) perspective. French and Bell (1999) describes OD as a long-term effort to improve the organisation's visioning, empowerment, learning and problem-solving processes through collaborative management of organisation culture - this description high-lights a key aspect, learning.
The organisation is not the only arena for people to learn. There is need for organisations and its employees, and to a greater extent the community within which the organisation is operating to understand the importance of life-long-learning - the need to have high quality. This calls for a cross-sector partnership to provide opportunities for organisation (public, private and non-profit) to work together to enhance the skill base in the labour market which will in turn increase in human and social capital.
Developing a learning organisation is not easy since it necessitates culture change. To successfully implement a learning culture, there is need to align performance evaluation and reward processes with organisational learning goals, a means of fostering a common corporate learning culture. Encouraging a greater uptake of learning and development opportunities requires that there should be the willingness and ability to provide an infrastructure to support, both at the individual and organisation level. This requires greater commitment from all stakeholders, for example links to further and higher education, collaboration with professional networks and institutions and input from trade unions/employee representatives. Individual responsibility as well as the organisation to provide and support continued employee development and opportunities is an emphasis taking root in many organisations.
Achieving competitive advantage
The deliberate choosing of a different set of activities to deliver a unique mix of value forms the basis for competitive advantage. The name of the game today is survival and organisations need to respond by adopting a new approach to strategy - one that combines speed, openness, flexibility, and forward-focused thinking. For better chance of success, organizations need to engage the energy, creativity and intelligence of the whole workforce and involve other stakeholders, like customers, suppliers, investors and community. To withstand relentless and constantly growing global competition, organisations need to be different and radically change the way of doing business, giving up the old hierarchical, adversarial approach which wastes individual talents and saps energy in unproductive conflict and instead create a new management model, switching from management to leadership, managing change, building trust, driving out fear of failure and create productive partnerships in which everyone can offer their unique knowledge and talents.
Change is inevitable an organization and in people, whatsoever the circumstance and it is important to understand the how different people react to change and design multifaceted and flexible policies to deal with differing assumptions, intentions and perceptions about change.
The need to change may coincide with analysis of the environment and assessment of external pressures and the internal strengths and weaknesses of the organisation to anticipate/respond to indentified challenges and opportunities. One of the key issues for the analysis would be the current situation of skills deficit analyses and meeting gaps (if any) - assuring that employee development (training) is geared toward skills needed for specific tasks, or is future oriented and to the anticipated. It should be note that it is through people that
'How exactly do we implement the change' may be a question the HR Manager would mostly like have to answer. Changes can cause a mix of emotions, anxiety, fear and resistance from employees and if (not) addressed properly will have a big impact on a successful (failure) transition to the intended new way of doing things. Therefore, adequate time needs to build into the planning process. The people in charge of initiative (the leaders) change spend a significant amount of time discussing and dealing with the change - they have had time to let go of the old ways and digest the new. Likewise employees need to be accorded enough time to buy into the idea so that they don't feel like they're being force-fed the program.