Strengths and Weaknesses of the Different Models of SHRM - Essay Example

Strengths and Weaknesses of the Different Models of SHRM By: The paper will analyze the strengths and weaknesses of the different models of SHRM. These models include Universalist, Contingency, Resource-based view, and Institutionalist approaches. Majority of HR professionals have embraced the Universalistic approach because it directly influences the performance of an organization. This means that the approach has more strengths than weaknesses. Few HR professionals have embraced the Contingency approach because it is seen as the one that oppresses employees and gives a lot of pressure to the management. This means it has more weaknesses. Contents Abstract 2 1.Introduction 4 2.Models 4 2.1 Universalist Approach 4 2.1.1 Strengths 4 2.1.2 Weaknesses 6 2.2 Contingency approach 7 2.2.1 Strengths 7 2.2.2 Weaknesses 8 2.3 Resource based view 9 2.3.1 Strengths 10 2.3.2 Weaknesses 11 2.4 Institutionalist approach 12 2.4.1 Strengths 12 2.4.2 Weaknesses 13 3.Conclusion 14 4.References 15 1. Introduction The business market out there is characterized by high-tech environment (Findley, 2014). Therefore, businesses are experiencing fierce competition. Most of these competitions are seen through takeovers and mergers. Business experts argue that companies have to face both dynamic and complex business environment. This means that the business markets have rapidly changed in recent days. Business leaders have to improve their competencies and become more effective in order to outdo their competitors. For businesses to survive, their leaders have concentrated mainly on the area of Strategic Human Resource management. Studies indicate that this field when managed strategically, any business will have a competitive advantage over their competitors (Aiko, 2005; Lister, 2014). The paper will discuss the strengths and weaknesses of the different models of SHRM. 2. Models 2.1 Universalist Approach In this approach, Human Resource managers often use HR practices that are universally effective. According to studies, this approach is one of the best in managing the HR of any organization (Findley, 2014; Snell, 2001; Bach, 2009). 2.1.1 Strengths The universalistic approach can directly influence the performance of an organization. This approach has practices such as selective staffing, comprehensive training, job rotation, and cross utilization. In this case, for example, researchers have found a relationship between comprehensive training and selection with productivity and organization’s performance (Najeeb, 2014; Findley, 2014). Additionally, this approach goes hand in hand with numerous micro economic theories, especially the human capital theory. The theory argues that, factors such as people’s skills, knowledge and abilities are crucial in improving the firm’s performance. These factors are among the universal HR practices. The approach supports investments necessary in improving employee’s skills, knowledge and abilities. With this in place, any firm can realize increased productivity (Findley, 2014). The approach ensures firms have invested in human capital. The management will experience high employee productivity, in the end. Additionally, the approach encourages individual commitment to work practices. There are many advantages realized by a firm if there in increased involvement by employees. Some of these advantages include increased and improved employee output, employees becoming more efficient, low levels of absenteeism, and reduced layers of management (Findley, 2014). In the end, the organization would experience increase in productivity and improved quality of products. Studies also highlight improved financial performance measures as an advantage of increased involvement by employees (Findley, 2014; Najeeb, 2014). HR practices such as recruitment, compensation, employee participation selection, internal labor market, and training are considered to be universalistic (Findley, 2014). When it comes to selection, the approach gives the procedure of finding, evaluating and assigning persons to respective vacancy positions. The approach has the best procedure which researchers consider as very useful in individual recruitment. A study by Findley stated that the approach’s procedures always contain a sophisticated selection system (Findley, 2014). This ensures that any organization has reduced its level of uncertainty when it comes to an external candidate. In other words, the approach provides the best staffing process. Studies have found a relationship between good staffing process and organizational performance (Findley, 2014; Najeeb, 2014). The approach outlines the best compensation system. Firm managers have always noted the impact of compensation on their organization’s performance. Firms that enjoy competitive advantage in the markets have an advanced compensation system. Studies recommend Universalist approach when it comes to compensation. According to Findley, the best compensation system is the one which it enables a firm to attract better candidates and to retain the best talent (Findley, 2014). The study further argues that a compensation system has to be drawn from employee performance. It works in the same way productivity is improved based on profit sharing system. In this case, performance will increase because of reduced absenteeism (Findley, 2014). The approach encourages employee participation. A good system of employee participation increases satisfaction of employees. This results to increased productivity. With this approach, there will be increase in opportunities for internal careers, and increased employee training (Findley, 2014). 2.1.2 Weaknesses Many studies have a strong support for a universalistic approach (Findley, 2014; Aiko, 2005). However, the approach has some weaknesses. The approach is very useful only in the short-run. Experts argue that this approach is necessary when organizations want to gain a short term competitive advantage. The approach has practices that are not that easy to implement. For instance, the approach demands firm managers to spend a lot of time preparing efficient employment systems. On the other hand, majority of advantages of this approach are drawn from researches. In this case, a person can conclude that results in these researches may be biased (Findley, 2014). Additionally, majority of these researches are assumed to be optimistic regarding the potential for progressive HR practices. 2.2 Contingency approach According to numerous research and literature reviews, the contingency approach is the one which allows the management to choose a particular set of HR practices which is dependent on an organization’s strategy (Chand, 2010; Lister, 2014). From these studies, it is noted that the managers who follow this approach concentrate on both the context of the situation and their own leadership styles. They ensure both interact well. The approach mainly concentrates in managerial control. It gives the management the power to develop specific solutions that solve problems in the workplace. Experts argue that this approach leads to highly specialized task completion because the managers are task to assign the qualified employees. 2.2.1 Strengths The approach is more focused on the leadership of any organization. It ensures the leadership is effective. The leadership therefore promotes employee motivation in order to complete a task effectively. The approach provides the means of measuring task motivation. A manager could rely on the least preferred co-worker scale (LPC) to measure task motivation (Lister, 2014). The approach gives ways in which a manager can control the employees’ situational outcome. There are three ways presented by the approach, in which a manger can asses the situational favorability. These are leader-member relations, task structure, and position power. In leader-member relations, the approach addresses how managers cooperate with employees. The task structure addresses how the composition of employees’ work consists of. The position power stipulates the leaders’ level of authority. Therefore, with this approach, the management is able to view situations from many angles. This makes the managers able to solve problems even before they appear. The leadership is allowed to explore variety of options and is able to maximize on a situation to learn more about the employees and the products. This makes their firms stay ahead of their competitors (Lister, 2014). The approach increases pressure on management. It demands the top leadership to assign specific work roles to employees. In this case, the management will be pressurized to ensure works and projects succeed. Projects that fail may cause the company to record poor results and may place the leaders’ position in jeopardy (Lister, 2014). The approach ensures the management has control over employees. Firms that use this approach direct employees to meet certain demands. To consider a manager as successful, in this approach, he/she has to be able to control employee’s behavior. Studies indicate that having control over employees will improve the firm’s performance because employees always concentrate on their designated jobs (Lister, 2014; Chand, 2010). 2.2.2 Weaknesses There is inadequate literature in the field of contingency approach. In this case, there are no definitions of types of actions which could be used under different situations. Nevertheless, the approach is very complex. The first impression of the approach is that, it is simple because managers only act to the needs of the situation. This is not the case because, in order to determine these situations which managers have to act on, one has to conduct a detailed analysis of variety of variables (Chand, 2010). The approach has difficult empirical testing. As discussed above, the approach is very complex. Therefore, there are many problems with testing the percepts present in this theory (Chand, 2010). Normally, in order to conduct an empirical testing, there should be some methodology. With no doubt, there are methodologies available. However, the problem is presence of too many variables, making testing difficult (Chand, 2010). The approach is reactive and not proactive. The approach always gives managers suggestions on what to do. Managers always mange their firms based on the approach’s suggestions (Chand, 2010). 2.3 Resource based view Many experts call this the source of heterogeneity of the firm (Snell, 2001). In this model, it is assumed that the resources of a firm are heterogeneous. Firms can use these firms to their advantage and outdo their competitors. Researchers who emphasized more on the firm’s resources are the developers of this model. These researchers wanted to clarify the contribution of resources in improving the competitive advantage. The main point in this model is that, resources in the firm are the main determinants of performance. 2.3.1 Strengths The approach emphasizes on more investment on resources. The management of any firm is tasked to ensure their organization has a large variety of resources. Experts argue that resources are inputs into the production process. Therefore, any management of a firm has to consider resources as great assets. The resources include capital equipment’s, employees ‘skills, brand names, finance, patents, and more (Snell, 2001). The approach improves cooperation and good working relationships in the workplace. Normally, the productive activities of these resources always demand cooperation and coordination of different teams of resources. In the end, as the resources become productive, the working relationship is also improved (Snell, 2001). The approach ensures firms have stored majority of their capital in resources. A study by Snell defined resources as ‘stocks of available factors that are owned or controlled by the firm which are converted into final products or services’ (Snell, 2001, p. 15). Therefore, with this approach in place, any firm has the capability to deploy its own resources using HR and organizational practices. Firms with good capabilities are able to utilize their resources effectively and have a bigger chance of creating desirable outputs (Snell, 2001). The approach is very popular among literatures. Various studies have discussed in depth the concept of RBV. The common conclusion from these literatures is that, RBV emphasizes on internal firm resources as sources of competitive advantage. The approach has enabled the HR departments of many organizations to effectively manage their resources. In the human capital pool, the approach highlighted resources such as knowledge, skills, and abilities. In employee relationships and behaviors, the approach highlighted components such as psychological contracts, citizenship, organizational, discretionary, citizenship and job related models. In people management practices, the approach highlighted components such as staffing, training, rewards, recognition, appraisal, participation, and work design (Snell, 2001). RBV is the most important factor that led to development of SHRM literature. In most studies, it is noted that RBV has explained in depth how HR practices have led competitive advantage. From a closer analysis of RBV model, it is important to note that combination of human capital elements such as skills, relevant behaviors, and people management systems are a function of sustained competitive advantage. In other words, RBV theoretical frameworks form the basis of SHRM (Aiko, 2005). 2.3.2 Weaknesses Many experts argue that RBV is tautological. In this case, the approach does not develop testable hypotheses. Specifically, a study by Aiko found out that most RBV studies have not tested their fundamental concepts. The author of this study argues that existing studies used RBV to develop the context of some empirical research (Aiko, 2005). There are few attempts to demonstrate RBV impact the firm’s resources, such as skills of the employees. Nevertheless, there is no attempt to find the relationship between these skills and performance measure. There are only few studies that attempt to find these relationships. There is existence of simple application of RBV logic to HR issues. There are few studies that conduct a detailed test of RBV key concepts (Aiko, 2005). Despite this approach being concentrated on the resources of firms, inimitable resources are always seen to be unobservable. In this case, researchers have no any other option, but to use proxy variables in measuring underlying constructs in RBV (Snell, 2001). 2.4 Institutionalist approach In this approach, organizations are analyzed based on the institutional approach. In this approach, experts argue “practices in firms are direct reflection of, or response to structures built into their larger environment” (Lee, 2011, p. 89). HR professional embraced this approach in the 1990’s. Many firms then started applying concepts of this approach in their HR departments. 2.4.1 Strengths In this approach, firms are organized in institutional arrangements. Moreover, the approach allows the business market to be socially constructed. The approach acknowledges the importance of tradition and history. It results to interchanging of different national systems (Lee, 2011). The approach has the support of respected theorists from the field of sociology. After analyzing this concept in depth, it is important to note that it has drawn most of its concepts from the diverse field of sociology. For instance, experts cite Weber in their researches, because he has influenced many institutionalists more than any other early theorists because of his understanding of social structures (Lee, 2011). The approach enables organizations to link to each other. It helps evaluate organizations that have similar linkage to other firms, but they do not have to be really connected to each other (Lee, 2011). Additionally, the approach is very useful in studying the politics and ceremony that saturate many organizations. Normally, some organizations may have political influences, therefore becoming easier to form formal organizations based on myths of wider institutions (Lee, 2011). Moreover, because of poor organizational goals, firms decide to encourage imitation. Experts call this mimetic process. The other point is that, professionalization result to normative processes, which leads to formation of organizational fields. Therefore, the approach is useful in evaluating these politics (Lee, 2011). The approach encourages entrepreneurs within institutions to leverage existing resources in order to create new institutions (Lee, 2011). These entrepreneurs are called change agents. These change agents cannot be institutional entrepreneurs is they do not initiate any changes, or involve themselves in the process of implementing changes (Lee, 2011). 2.4.2 Weaknesses There are very many disagreements among researchers over this approach’s definition. Furthermore, theorists have not agreed on the empirical measurement of core concepts present in this theory, for instance institutions (Lee, 2011). According to studies, institutional fields are normally independent variables. Therefore, this affects organizational forms and processes (Lee, 2011). The approach does not value the importance of defining the boundaries of fields, and the way they are organized, especially in terms of their governance structures. As noted by a study by Lee, institutional entrepreneurs will always rely on institutional logics that depend on depend on the boundaries of the areas they operate (Lee, 2011). The approach is mainly used to study the persistence and homogeneity of phenomena. There are few studies that support the approach’s capability of accounting for change. There is need of more studies to explain the interplay between institutional change and kind of interpretations experienced by the actors (Najeeb, 2014). 3. Conclusion The paper has discussed the strengths and weaknesses of the four approaches of SHRM. The strengths will help firms achieve competitive advantage. Other benefits include transformation of the organizational structure, enhancing of administrative efficiency, integration of HR into the strategic planning processes, linking HR practices to business strategy and to one another, and development of a partnership with line management. Firms have to look at the weaknesses, and eliminate them early before they become a problem. The management has to transform weaknesses into strengths and concentrate on the vital role of strategic human resource management (Findley, 2014). 4. References Aiko, T. (2005). The Critical Assessment of the Resource-Based View of Strategic Management. The Source of Heterogeneity of the Firm, 1-26. Bach, S. (2009). Managing Human Resources: Personnel Management in Transition. John Wiley & Sons. Chand, S. (2010). 4 Limitations of Contingency Approach. Management, 2. Findley, H. (2014). Strategic Human Resource Management. Strategic Human Resource Management , 1-12. Lee, A. (2011). Understanding strategic human resource management through the paradigm of institutional theory. Washington: International Employment Relations Review. Lister, J. (2014). Contingency Approach Use in Business. Chron. Najeeb, A. (2014). Institutional theory and human resource. University of Wollongong. Regis, R. (2008). Strategic Human Resource Management and Development. Excel Books India. Snell, S. (2001). Human Resources and Resource Based View of the Firm. Cornell University. Read More