Strategic Human Resource Manageme...
The International Journal of Human Resource Management 5:3 September 1994 Strategic human resource management: a conceptual approach Catherine Truss and Lynda Gratton Abstract In this paper conceptual issues associated with strategic human resource management are addressed. The rapidly expanding intemationai interest in strategic human resource management is first highlighted. The article then explores some of the broader issues around the debate on SHRM that can inform thinking at a macro level. Firstly, the progress made towards understanding the meaning of SHRM is analysed, then a brief overview of the major models of SHRM to date is presented. This overview is used to highlight the key variables and interrelationships that need to be included in a model of SHRM, and a more detailed critical analysis of the contribu- tion of the literature in each of these areas follows. A summary of the most important research questions arising out of the literature is followed by a model of the SHRM process, which attempts to remedy the major weak- nesses in existing models of SHRM. The ways in which this model may be used as a basis for empirical research are then noted. Introducdon Strategic human resource management, or the linking of HRM with strategic goals and objectives in order to improve business perfor- mance and develop organizational cultures that foster innovation and flexibility, is a major concem as we begin to emerge from recession in the mid-1990s to face a newly defined and highly competitive market- place. Organizations at all levels, and in both the public and the pri- vate sectors, are increasingly tuming to SHRM techniques to pave the way for these changes, bringing erstwhile personnel departments to the forefront of organizational transformation and survival as never before. In the academic world, these developments have led to a new wave of interest in SHRM, which has its foundations in the US in the early 1980s in the work of the 'Harvard Group' (Beer et al, 1984) and the O Routiedge 1994
Catherine Truss and Lynda Gratton 'Michigan/Columbia Group' (Fombrun et al, 1984). However, many of the questions and concerns raised at that time - for instance, what are the distinguishing features of HRM? how is it related to business strategy? and how should it be conceptualized? - still remain unre- solved, and we continue to see papers and articles devoted to subjects such as these, with relatively little progress made towards what Boxall (1991: 60) terms *a new theoretical sophistication'. This is disappoint- ing for practitioners, who would clearly appreciate some direction from the academic world to guide their strategy. It is equally disap- pointing for academics that such an important field has remained so elusive. A number of reasons have been put forward to explain the lack of progress made, including the relative dearth of empirical data that can either falsify or support any hypotheses made, and the emphasis on case-study research to the detriment of large-scale surveys that would provide a broader sweep of evidence, together with the way in which much research seems to be descriptive and not to be based on models that could lead to the development of generalizable concepts (Boxall, 1991 Noon, 1992). As regards the first of these, the number and scale of research projects currently under way, for example, in the UK (at Warwick, led by Andrew Pettigrew, and at Loughborough, led by John Storey), in the US (led by Randall Schuler) and in Australia (led by Dexter Dunphy), would imply that this objection is no longer tenable. More crucial is the need for stronger linkages between the concep- tual literature that has sprung up on SHRM and the empirical research that is being carried out (Wright and McMahan, 1992). This missing link has led to a focus on micro-level issues that do not take account of broader factors at the level of the firm and, consequently, a piecemeal approach to the field of SHRM that appears to lack a guiding conceptual framework. It is with these points in mind that this article aims to explore some of the broader issues around the debate on SHRM that can inform our thinking at a macro level. Firetly, the progress made towards understanding the meaning of SHRM is analysed, then a brief overview of the major models of SHRM to date is presented. This overview is used to highlight the key variables and interrelationships that need to be included in a model of SHRM, and a more detailed critical analysis of the contribution of the Hterature in each of these areas follows. A summary of the most important research questions arising out of the literature is followed by our own model of the SHRM process, which attempts to remedy the major weaknesses in existing models of SHRM. This model will be used as a basis for empirical research. 664
Strategic human resouree management Tbe meaning of strategic human resource management Before attempting to analyse models of strategic human resource management put forward in the literature, it is important to gain some understanding of what is meant by the term and what the boundaries of the concept are. The debate about the meaning of SHRM dates back to an extensive literature on the difference between human resource management and personnel management that began in the early 1980s. Legge (1989), despite some scepticism about there being any difference between the two, concedes from her review of the normative literature that HRM is distinctive in a number of ways. Firstly, whereas personnel focuses on the management and control of subordinates, HRM centres on the management team. Secondly, line managers play a key role in HRM in co-ordinating resources towards achieving profit, which is not the case under personnel management and, finally, the management of organi- zational culture is an important aspect of HRM, but plays no role in personnel management. Thus, she argues that HRM is a more cen- trally strategic task than personnel management (cf. Tichy et ai, 1982). In addition to these differences, others have argued that HRM is unitarist in its approach, in contrast with the collectivist approach of traditional industrial relations, with an emphasis on individual devel- opment and commitment (Guest, 1989 Storey, 1989 Sisson, 1989). Storey (1992a) also argues that the distinguishing feature of HRM is that the stress is on regarding people as a 'resource', and that deci- sions made about the deployment of individuals therefore assume a strategic significance in the broader context of business imperatives (McKinlay and Starkey, 1992). This issue of the relationship between strategy and HRM is at the centre of the debate conceming the difference between HRM and strategic HRM. Many commentators on human resource management regard the Unking of HR practices to the strategic aims of the busi- ness as the core feature that distinguishes HRM from personnel man- agement (Storey, 1992a Hendry et al, 1988 41 Miles and Snow, 1984: 37 Evans, 1986: 155 Poole, 1990). However, the advent of the term 'strategic human resource management' has since served to cloud the issue (Wright and McMahan, 1992). A number of commentators have argued that the concept of SHRM has evolved as a 'bridge' between business strategy and the management of human resources (Butler et al, 1991 Lorange and Murphy, 1984 Lengnick-HaU and Lengnick-Hall, 1990 Boxall, 1991: 61). Schuler Mid Walker (1990: 7) provide the following definition: 665
Catherine Truss and Lynda Gratton Human resource strategy is a set of processes and activities jointly shared by human resources and line managers to solve people-related business issues. In this sense, it is hard to see what differentiates human resource management from strategic human resource management. Some com- mentators appear to have taken the original meaning of the term HRM and applied it to SHRM, attributing to human resource man- agement the meaning previously applied to personnel management. For example, Wright and McMahan (1992: 298) argue: We define strategic human resource management as the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals. They regard SHRM as having both a vertical and a horizontal dimen- sion, so that not only are HR practices linked to organizational strat- egy under SHRM, but the practices themselves should be strategically linked to ensure they are promoting the same goals. Thus, the distin- guishing feature is that SHRM adopts a more 'macro' perspective and focuses on HRM at the level of the firm. Human resource manage- ment, on the other hand, they define as the knowledge held within each of the HR functions (Wright and McMahan, 1992: 297-8 Butler et al, 1991 Butler, 1988). However, earlier commentators used similar arguments to distinguish HRM from personnel management (Beer et al, 1984 Devanna et al, 1982 Tichy et al, 1982). The fact that the term strategic HRM has emerged at all would, however, indicate that there is some qualitative difference between HRM and SHRM. We should, perhaps, regard SHRM as the over- arching concept that links the management and deployment of indi- viduals within the organization to the business as a whole and its environment, while HRM could be viewed as an organizing activity that takes place under this umbrella. In this way, the essential features of SHRM can be summarized as follows: - There is an explicit linkage of some kind between HR policy and practices and overall organizational strategic aims and the organiza- tional environment. - There is some organizing schema linking individual HR interven- tions so that they are mutually supportive. - Much of the responsibility for the management of human resources is devolved down the line. Clearly, this is essentially a normative ideal-type definition derived from the literature, rather than a description of organizational reality. However, the definition does at least provide us with a bounded con- cept upon which we can base our analysis. The next section of the 666
Strategic human resource management paper takes this analysis one stage further and focuses on the way in which the SHRM process has been modelled in the literature. Modelling the strategic human resource management process One of the main concems within the literature on HRM and SHRM has been to conceptualize the SHRM process through modelling. The aim of many of these models has been normative, while others have been empirical or theoretical. The normative SHRM models are concemed with mapping how SHRM should work, and providing guidelines for practitioners on best practice. The antecedent for many of these prescriptive models was that of Devanna et al (1981), who were concemed with the rela- tionship between HRM and organizational strategy, and who argued that a tight 'fit' between strategy and HRM should be the ultimate goal for organizations concerned with improving their bottom-line performance. Subsequent writers have developed these ideas further, for instance, Schuler (1988), building on the work of Miles and Snow (1984), argues in favour of the tailoring of individual HR practices to specific strategies. Lengnick-Hall and Lengnick-Hall (1990), in their normative SHRM model, argue that the formulation of strategy and human resource strategy should occur concurrently, so that each can inform the other. Empirical models are much more scarce than normative models, due to the relative lack of empirical research that has taken place on SHRM. Some models derived from empirical data do, however, exist. Whereas the normative models tend to focus on a more limited range of variables, and in particular on the relationship between strategy and SHRM, the empirical models are frequently more sophisticated and take into account a broader range of relevant contextual and out- put variables. The Warwick study (Hendry et al., 1988 Hendry and Pettigrew, 1990), for instance, includes a range of extemal and inter- nal contextual variables that impact on the implementation of HR strategy. These include the socio-econotnic, technical, and political and legal background, and the culture, structure and leadership of the organization. In the United States, Lundberg (1985) presents an empirical model based on one case study in the Reynolds Corporation, and his model similarly takes account of a number of societal and organizational-level factors that affect SHRM. The inclu- sion of such elements in models of the SHRM process clearly repre- sents a closer reflection of organizational realities than some of the 667