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In the past, most organisations viewed Human Resource Management (HRM) as an element function, that is an activity that is supportive of the task functions and does not normally have any accountability for the performance of a specific end task. Because of the emphasis on analysis and precision there is a tendency for strategists to concentrate on economic data and ignore the way in which human elements and values can influence the implementation of a strategy. “Economic analysis of strategy fails to recognise the complex role which people play in the evolution of strategy…strategy is also a product of what people want an organisation to do or what they feel the organisation should be like.”(1). Understanding the strategic potential of HRM is a relatively recent phenomenon. Strategic HRM attempts to bring HRM to the boardroom. It requires personnel policies and practices to be integrated so that they make a coherent whole, and also that this whole is integrated with the business or organisational strategy. Strategic HRM has evolved through three main stages. Up until the mid 1960’s HRM comprised mainly a file maintenance stage with most emphasis on selection, recruitment, screening and orientation of the new employee. They also looked after employee-related data and organised the Christmas party. The second stage, government accountability developed with the arrival of the Civil Rights Act and evolved with subsequent laws. To avoid costly legal battles, the HRM function gained in stature and importance. The third stage in HRM development which began in the late 1970’s and early 1980’s was the realisation that effective HRM could give an organisation competitive advantage. Within this stage HRM is viewed as important for both strategy formulation and implementation. For example 3M’s noted scientists enable the company to pursue a differentiation strategy based on innovative products. At the competitive stage, then, human resources are considered explicitly in conjunction with strategic management, particularly through the mechanism of human resource planning (2). Human Resource Strategies currently focus around quality, customer orientation, flexibility, commitment, involvement, leadership, team working and continuous learning (3). These themes of integration and a central philosophy of people management have been drawn out by a number of writers , for example Handy et al (1989) and Hendry and Pettigrew (1986). As early as 1983 Baird et al went one step beyond this and argued that there can be no organisational strategy without the inclusion of human resources. Firms such as 3M were at the forefront of a trend towards recognising human resources as a crucial element in the strategic success of organisations (4). At 3M, high level managers within the HRM function participate directly in strategy formulation. They also help co-ordinate the HR aspects of strategy implementation (5). The extent to which the human resource function is involved in both organisational and human resource strategy development is dependent on a range of factors. § The Personnel Role in the Organisation The degree of involvement in strategy is dependent on the status and level of regard the Human Resource function is given in the organisation. One way this can be assessed is by viewing the role of the most senior personnel officer. How does the organisation view its employees – as a cost or an investment? Buller (1988) found that the degree of integration between organisational and human resource strategy was influenced by its philosophy towards people. Organisations that operate in a stable predictable environment face little pressure to change whereas a turbulent environment will demand the organisation strives to find new ways of doing a range of things. It is when operating in this latter scenario that organisations are more likely to have the Human Resource function involved in strategy and planning. Any organisation is made up of groups of people. An essential part of management is co-ordinating the activities of groups and directing the efforts of their members towards the goals and objectives of the organisation. This involves the process of leadership and the choice of an appropriate form of behaviour. The manager must understand the nature of leadership and the factors which determine the effectiveness of the leadership process (6). There is no substitute for leadership. But management cannot create leaders. It can only create the conditions under which potential leadership qualities become effective, or it can stifle potential leaders (7). Strategic HRM ensures that the right conditions are created by enabling the human resource functions the chance to have a say in the development of the business and the objectives its sets. Without an effective Human Relations approach the necessary environment for leaders to develop does not exist. Much research has been performed on the need for a participative approach to leadership. The earliest definitive proof came with research carried out at the relay assembly test room at the Hawthorne plant of the Western Electric Company of America (8). Subsequent to these discoveries was a distinct rise in the attention given to theories of individual motivation and therefore a more psychological approach to the strategies of an organisation. This elevated the HRM function in the company and although many years before the term Strategic Human Resource Management came to fruition, it sowed the seeds and is supported by writers such as McGregor, Likert and Blake and Mouton who all realised the need for participative Human Resource functions in improving organisational effectiveness. An effective HRM function should ensure that positive performance is met with positive rewards. This is brought about with efficient appraisal programmes and the opportunity for the employee to, where practical, display signs of initiative. A feature of quality HRM is when each employee is fully aware of their premise for individual thought. This model of leadership is the path-goal theory, the main work on which has been undertaken by House and House and Dessler. The model is based on the belief that the individuals motivation is dependent upon expectations that increased effort to achieve an improved level of performance will be successful, and expectations that improved performance will be instrumental in obtaining positive rewards and avoiding negative outcomes. Increased support for the need for effective appraisal was Goldsmith and Clutterbucks study of top British companies. This showed that managers at all levels pinpointed effective leadership at top management level as key to their own motivation and therefore the organisations success. Learning is the new form of labour. It’s no longer a separate activity that occurs either before one enters the workplace or in remote classroom settings…Learning is the heart of productive activity (9) Continuous learning is a strategic theme which is increasingly apparent, if not the most critical (10). Garrat (1990) argues that for an organisation to survive, learning in the organisation has got to be greater or at least equal to the degree of change. Mintzberg’s proposition of emergent strategy also supports this statement. Strategy formulation can be seen as resulting from ready-fire-aim-fire-aim-fire rather than ready-aim-fire. People and organisation s need to act in order to think as well as to think in order to act. To benefit from peoples actions an organisation is needed that is open to the potential for learning and development that is available. An untrained workforce is, in the long run an inefficient use of funds and resources. A business's profits are affected as a result of this untrained work-force dilemma, and therefore, the organisation must play an involved role in providing a solution. And it is not just the big corporation with deep pockets that needs to get involved, it is also the small and mid-sized family-owned business that needs to recruit and retain trainable, qualified talent. This is the job of HRM and should form part of the overall organisations strategy. It must be accepted in the workplace that it is alright to make mistakes so long as learning has occurred and the same mistake will not be made in the future. HRM can then establish the employees that make the least mistakes and also those that learn most rapidly. Armed with this information, the HRM function can be involved in strategy by deciding which candidates should be given more authority. Multi-skilling is something of a buzz word in business. It describes highly trained members of staff, competent in a number of aspects of the organisation. A key element to flexibility, it is highly productive for the organisation. As part of the organisational strategy the HRM function is crucial to the effective implementation. In order to form successful strategy to respond to rapidly changing environments it is evident that the organisation has to become a learning organisation. Defined by Garrat this is: “An organisation which facilitates the learning of all its members and continuously transforms itself.” People change is central to Organisational development and HRM. Through teaching and developing certain aspects of people in the organisation, these changes are based on an overview of structure, strategy and technology. Tom Peters (1992) says “Knowledge is the source of most value added.” If so then how do organisations accumulate and more importantly disperse this knowledge. The answer is through effective Strategic HRM. Facilities must in place so that the diffusion of knowledge can take place. Encouraging and developing each member at work is essential for individual and organisational health and is a major task of the HRM function. Recognising and improving an individuals talent and potential is essential so that the many roles and functions are achieved effectively. The formulation and implementation of strategy is in some ways inimical to HRM (11). Most evidence and professional research seems to show that without the inclusion of the Human Resource function in strategy formulation then it becomes somewhat obsolete by the time it has filtered down through the hierarchy. The involvement of this function is essential also to create the environment necessary for the evolution of leaders. Efficient recruitment, selection, appraisal and reward systems must be in place so that the best people for the job are selected and progress through the organisation. Continuous learning is critical to Strategic HRM. It is essential to get the most out of your staff and by training, evaluating and developing your employees through the process of HRM . With this, the organisation is strategically better equipped to deal with any environmental changes that may affect the normally smooth operation of the organisation. Bibliography: References (1) Johnson and Scholes 1989 pp.113 (2) Thomas A. Mahoney and John R. Deckop “Evolution of concept in HRM” Journal of Management vol 12 1986 pp.223 -241 (3) Derek Torrington and Laura Hall “Personnel Management, HRM in Action” pp.68 Prentice Hall 1995 (4) Harold L. Angle Charles C Manz and Andrew Van de Ven “ Integrating Human Resource Management and Corporate Strategy” : A preview of the 3M story. Human Resource Management Spring 1985 pp.51-68 (5) Katherine M. Bartol & David C. Martin “Management” McGraw Hill 1991 (6) L. J. Mullins “Approaches to leadership” The British journal of Administrative Management vol. 32 no. 8 November 1982 pp.263 -9 (7) Peter F. Drucker “The Practice of Management” Heinemann Professional Publishing 1955 (8) Roethsliger, F.J. and Dickson, W.J. “Management and the Worker.”, Harvard University Press 1939 (9) Shoshana Zuboff “In the Age of the Smart Machine.” (10) Derek Torrington and Laura Hall “Personnel Management, HRM in Action” pp.59 Prentice Hall 1995 (11) Derek Torrington and Laura Hall “Personnel Management, HRM in Action” pp.28 Prentice Hall 1995 Bibliography Derek Torrington and Laura Hall Personnel Management HRM in Action Prentice Hall Ltd 1991 Laurie J. Mullins Management and Organisational Behaviour Pitman Publishing 1994 Kathryn M. Bartol and David C. Martin Management McGraw Hill 1991 Tom Peters Liberation Management Necessary Disorganization for the Nanosecond Nineties Macmillan London 1992 Samuel C. Certo Modern Management Allyn and Bacon 1992 Peter F. Drucker The Practice of Management Heinemann Proffesional Publishing Ltd. 1955 J. Richard Hackman, Edward E. Lawler III and Lyman W. Porter Perspectives on Behaviour in Organisations McGraw Hill 1983 Word Count: 1779
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