Human Resource Management: The Concept of Strategic Fit - Coursework Example

HRM Table of Contents Fit as strategic integration 3 Fit as an ideal set of practices 4 Fit as contingency 5 Fit as bundles 6 Extent of Applicabilityof each approach 7 Reference 9 Bibliography 9 Fit as strategic integration The importance of this approach is the fact that it integrates human resource management practices with business strategies of the organization. Each of the strategies complement the other; in other words ‘tightly fit’ in this approach and are merged with the organizational direction and goal. It carefully considers the organizational dynamics before devising any HR strategy. According to Armstrong (2009), the HRM strategies are directly linked with the quality, cost leadership, and innovation as these are closely aligned with the business strategies. Communication is provided with critical emphasis for aligning employee’s expectations with the direction of the organization and the path it was proceeding through (Armstrong, 2009, p.6). Porter (1985) has emphasized on pursuing best fit through the competitive strategy of innovation, quality or cost leadership (Armstrong-1, 2009, p.6). Quality and innovation strategies are the ones which require extensive commitment level from employees. On the other hand cost leadership strategies are believed to be possible only when there are no unions. It can only be achievable without the union. The rationale of an HRM strategy which is market driven is possible only where there is high organizational commitment, and the presence of unions is irrelevant (Armstrong, 2009, p.889). However, another opinion is that such an HRM approach is still possible when unions are recognised by the organization. In such a case the employment relations strategy must be marginalized and set aside by developing a direct link with employees through an effective communication and involvement process (Armstrong, 2009, p.889). According to Beardwell and Clayton (2007), the idea is to relate HRM issues with strategic plans of the organization and to ensure that the organization operates in accordance to the plans. The decision making process of the line manager is guided by the HRM concepts and this elaborates why employees and their representatives are considered important stakeholders in this approach. It also explains the fact it can be perceived as a unitary approach and can be applied in all organizations (Martin & Beaumont, 2003, p.33). Fit as an ideal set of practices Armstrong (2009) has recognized a set of best practices in MRM which can be used for attaining maximum organizational effectiveness. In this context the workforce or employees are considered to be of maximum importance rather than the task activities and this would be effective complementing the best practices. Te best practices would include aspects such as gaining continuous development, employee security, benchmarking self managing teams and performance related rewards and pays (Martin & Beaumont, 2003, p.34). There are both analytical and perspective grounds in this approach and it must be adapted in accordance to organizational situations. The determination of a best practice at times might be controversial as it is influenced by different individual opinion and raises complications when perceived in terms of internal activities and processes. Beardwell and Clayton (2007) does not assure guarantee of this approach and thus it cannot be regarded as Universalist in nature and cannot be applied in all organisational setting (Schuler & Jackson, 2009, p.164-165). Best practices not only refer to the relationships between the HR programs and external fit (strategies) it rather focuses on two other kind of internal fit. Firstly it must ensure that there is no combination which ends up in something labelled as ‘deadly combination’. On the other hand it draws a direct link with the HR policies and practices with aspects like organizational culture, culture management and branding. The central idea is to create synergies between the HR systems and other organizational systems, competitive alignment of the organization such as brand reputation also known as external adaptation (Martin & Beaumont, 2003, p.33). The approach of the matching model is linked with soft HRM practices and aim at attaining business objectives. However, people management differs between organizations depending on specific organizational contexts. It also assumes that employees and organization must have the same view and work collectively towards accomplishment of organizational goals and objectives (Martin & Beaumont, 2003, p.33). Fit as contingency Fit as contingency refers to those HRM strategies and policies which are aligned with the circumstances in the organization. Vertical alignment is an essential component in this approach. Considering the dynamic components of organizations’ strategies the approach is based on the concept that there exists no single method for dealing with different situations and that it is the management’s responsibility to assess the best outcomes from each strategy (Garlichs, 2011, p.3). There are three models in this approach, namely, lifecycle, competitive strategy and strategic configuration. Under the first approach the effectiveness of human resource management depends on its suitability with the stage of development of the organization. With the growth of the organization the HRM programs must change accordingly and adapt to its changing needs. The internal factors related in this approach include structure, technology, culture and processes and some of the external factors include opportunities, threats and other constraints. Formal knowledge and skills are not considered to be acquired in this environment under this approach. This approach is considered to be situational and lacks sophistication in its competitive strategies. At times it is criticized for overlooking the perspectives and interests of employees and is only seen to favour economic performance. It does not consider any one particular best method in this approach. It rather focuses on the incorporation of a number of valuable practices within it, such as the analytical aspects rather than the prescriptive components (Armstrong, 2009, p.42). Fit as bundles Under this strategic approach there is integration of policies and practices which exists in the organization together. The ‘fit as bundles’ is an analytical perspective which is about the development and implementation of clear bundles based on their individual characteristics. For example a source strategy could be combined with a development strategy to form a distinct bundle of practices such as performance management and competency framework which can be used in various instances to create a coherence environment in which each aspect complements the other. Under this approach individual approaches which are not feasible to be implemented can be combined used with another approach which complements it. This approach does not consider the differences existing within organizations and the uniqueness of various situations. It is understood that there is much complexity in the links between HRM and organizational performances. In such cases contingency is illustrated with reference to HRM practices; internal career opportunities, result related appraisals, participation of employees and their contributions in business strategies (Armstrong, 2009, p.234). Although the ‘fit as bundles’ approach is very prescriptive, yet there are a number of challenges it faces. In this approach success can be achieved through a combination of various approaches which abides by the ‘unitary’ thought and is applicable in all organizational settings. However, it overlooks the pluralist approach which is present in numerous organizations today. HR plays a crucial role in this approach as its success depends largely on the effectiveness of their functions. This is one approach which is not applicable in all organizations due to its large dependence on HR in all functions within the organization. This however does not imply failure of the approach. It rather emphasizes on the fact that it does not consider organizational differences (Armstrong & Baron, 2002, p.45-47). Extent of Applicability of each approach ‘Fit as strategic integration’ holds a clear perspective in the clear way in which it outlines the aims of the business. Also the fact that it relates to varieties of business situations makes it perfectly all right to be applicable in all organizations. In such a case it can be said to hold the unitary perspective. The combination of soft and hard HRM practices that it applies is also admirable such as quality costs, innovation and even communication within organizations. Under the ‘fit as an ideal set of practices’ there is a benchmarking of all the best practices that can be adopted in the organizations which includes aspects such as self manages teams, security of employment, performance related payments and rewards systems and also continuous development. Thus this approach can be considered to have more pluralistic view and has the drawback of being inapplicable in all organizations. The ‘fit as contingency’ approach comes across as a combination of soft HRM practices from aspects of processes, practices, procedures. It also has a touch of hard HRM policies through its benchmarking aspects. It is extremely analytical in nature looks into all the external as well as internal factors in an organization. The analytical component of this approach makes it perfectly suitable to be applied in all types of organizations and thus is said to abide by the unitary view. The ‘fit as bundles’ approach is said to have a combination of both hard and soft HRM practices such as competency frameworks and the development strategies. It includes both analysis and perceptiveness and also defines things clearly such as the characteristics of bundles which are chosen. The analytical nature of this approach also makes it perfectly suitable to be applied in all organizational settings. Reference Armstrong, M. & Baron, A. (2002). Strategic HRM: the key to improved business performance. CIPD Publishing. Armstrong, M. (2009). Armstrong’s handbook of human resource management practice. Kogan Page. [Pdf]. Available at: http://www.murshed.khanhouse.org/education/Armstrongs_Handbook_of_Human_Resource_Management.pdf. [Accessed on March 14, 2012]. Armstrong-1. (2009). Armstrongs Handbook of Human Resource Management Practice. Kogan Page Publishers. Garlichs, M. (2011). The Concept of Strategic Fit. Diplomica Verlag. Martin, G. & Beaumont, P. (2003). Branding and people management: whats in a name?. CIPD Publishing. Schuler, R. S. & Jackson, S. E. (2009). Strategic Human Resource Management, 2Nd Ed. John Wiley & Sons. Bibliography Armstrong, M., Brown, D. & Reilly, P. (2010). Evidence Based Reward Management: Creating Measurable Business Impact from Your Pay and Reward Practices. Kogan Page Publishers. Dale, M. (2004).Managers guide to recruitment and selection. Kogan Page Publishers. Dessler, G. & Varkkey, B. (2009). Human Resource Management, 11/e. Pearson Education India. Ehnert, I. (2009). Sustainable Human Resource Management: A Conceptual and Exploratory Analysis from a Paradox Perspective. Springer. Read More