Deliberate HR strategies provide guidelines for planning and implementation. Three types can be identified: (1) broad statements of intent under various headings; (2) overall HR strategies concerned with high performance working, high commitment management or high involvement management; and (3) specific strategies relating to the different aspects of human resource management such as talent management, learning and development and reward.
Broad statements of intent
HR strategy may simply consist of a broad statement of intent that provides the framework for more specific strategic plans in individual HR areas. Mintzberg (1987) referred to this approach as ‘umbrella strategy’ in which senior management sets out broad guidelines, leaving the specifics to people lower down in the organization.
The CIPD-sponsored research conducted by Armstrong and Baron (2002) found that there was a surprising convergence on the objectives of the strategies in the organizations they studied – to modify values, behaviours and attitudes. However, the paths taken to get there were quite different.
Research into the formulation of HR strategy in a number of US companies by Wright et al (2004: 43) established that ‘the core components of HR strategies seem to be building a performance culture, developing leadership capability, attracting and retaining the best talent, and providing state of the art HR systems, processes, and services’. The following are UK examples of overall HR strategic statements of intent.
The human resources integrated approach aims to ensure that from whatever angle staff now look at the elements of pay management, performance, career development and reward, they are consistent and linked.
As described by Marsh and Sweeney (2010: 97), what was referred to as an ‘integrated framework model’ at NG Bailey (a construction company) had as its first element: ‘Climate, which requires interventions in three main areas: on behaviour; on culture; and on knowledge, skills and competence’.
- Enhance employee commitment and minimize the loss of B&Q’s best people.
- Position B&Q as one of the best employers in the UK.
‘The major factor influencing HR strategy was the need to attract, maintain and retain the right people to deliver it. The aim was to introduce a system that complemented the business, that reflected the way we wanted to treat our customers – treating our people the same. What we would do for our customers we would also do for our people. We wanted to make an impact on the culture – the way people do business’ (HR Director).
We want GSK to be a place where the best people do their best work.
An insurance company
‘Without the people in this business we don’t have anything to deliver. We are driven to getting the people issues right in order to deliver the strategy. To a great extent it’s the people that create and implement the strategy on behalf of the organization. We put people very much at the front of our strategic thought process. If we have the right people, the right training, the right qualifications and the right sort of culture then we can deliver our strategy. We cannot do it otherwise’ (Chief Executive).
Based on the principle that staff who are enjoying themselves, who are being supported and developed, and who feel fulfilled and respected at work, will provide the best service to customers.
A local authority
As expressed by the chief executive of this borough council, their HR strategy is about ‘having a very strong focus on the overall effectiveness of the organization, its direction and how it’s performing; here is commitment to, and belief in, and respect for individuals, and I think that these are very important factors’.
A public utility
‘The only HR strategy you really need is the tangible expression of values and the implementation of values… unless you get the human resource values right you can forget all the rest’ (Managing Director).
A manufacturing company
‘The HR strategy is to stimulate changes on a broad front aimed ultimately at achieving competitive advantage through the efforts of our people. In an industry of fast followers, those who learn quickest will be the winners’ (HR Director).
A retail stores group
‘The biggest challenge will be to maintain (our) competitive advantage and to do that we need to maintain and continue to attract very high calibre people. The key differentiator on anything any company does is fundamentally the people, and I think that people tend to forget that they are the most important asset. Money is easy to get hold of, good people are not. All we do in terms of training and manpower planning is directly linked to business improvement’ (Managing Director).
Overall HR approaches
The second category of HR strategy consists of the deliberate introduction of overall approaches to human resource management, such as high performance management, high involvement management and high commitment management, which are described below. There is some overlap between these approaches, especially the latter two.
High performance management
High performance management aims to make an impact on the performance of the organization through its people in such areas as productivity, quality, levels of customer service, growth, profits and, ultimately, the delivery of increased shareholder value. The objective is to achieve this by rigorous recruitment and selection procedures, extensive and relevant training and management development activities, incentive pay systems and performance management processes. As a bundle, these practices are often
called high performance work systems (HPWS). This term is more frequently used than either high involvement management or high commitment management.
High involvement management
High involvement management practices were described by Wood (2010) as follows:
Source review High involvement management defined – Wood (2010: 410)
High involvement management includes: first, practices such as teamworking, flexible job descriptions, and idea capturing schemes, which are means of ensuring greater flexibility, proactivity and collaboration; and second, practices that give workers the opportunities for the acquisition of skills and knowledge that are needed to ensure they have the capacities to work in an involved way. They include intensive training geared towards teamworking, functional flexibility and information sharing, particularly about the economics and market of the business.
The practices included in a high involvement system have sometimes expanded beyond this original concept and included high performance practices. For example, as defined by Benson et al (2006: 519): ‘Highinvolvement work practices are a specific set of human resource practices that focus on employee decision-making, power, access to information, training and incentives’. As noted above, high performance practices usually include relevant training and incentive pay systems. Sung and Ashton (2005) include high involvement practices as one of the three broad areas of a high performance work system (the other two being human resource practices and reward and commitment practices).
The way in which high involvement made an impact was explained by Guest (1997). He suggested that the commitment and flexibility provided by highly involving action led to behaviour changes among employees. Because they show high levels of motivation, commitment and organizational citizenship, they adopt better-performing behaviours, leading to lower absenteeism and turnover rates, increased productivity and higher levels of quality.
High commitment management
One of the defining characteristics of the concept of HRM is its emphasis on mutuality – enhancing mutual commitment (Walton, 1985). High commitment management has been described by Wood (1996: 41) as: ‘A form of management which is aimed at eliciting a commitment so that behaviour is primarily self-regulated rather than controlled by sanctions and pressures external to the individual, and relations within the organization are based on high levels of trust’.
The approaches to achieving high commitment as described by Beer et al (1984) and Walton (1985) are:
- the development of career ladders and emphasis on trainability and commitment as highly valued characteristics of employees at all levels in the organization;
- a high level of functional flexibility with the abandonment of potentially rigid job descriptions;
- the reduction of hierarchies and the ending of status differentials;
- a heavy reliance on team structure for disseminating information (team briefing), structuring work (teamworking) and problem solving (quality circles).
Wood and Albanese (1995) added to this list:
- job design as something management consciously does in order to provide jobs that have a considerable level of intrinsic satisfaction;
- a policy of no compulsory lay-offs or redundancies and permanent employment guarantees with the possible use of temporary workers to cushion fluctuations in the demand for labour;
- new forms of assessment and payment systems and, more specifically, merit pay and profit sharing;
- a high involvement of employees in the management of quality.
Specific HR strategies
Specific HR strategies set out what the organization intends to do in areas such as:
- Human capital management – obtaining, analysing and reporting on data that informs the direction of value-adding people management strategic, investment and operational decisions.
- Corporate social responsibility – a commitment to managing the business ethically in order to make a positive impact on society and the environment.
- Organization design and development – designing and modifying organization structures and planning and implementation of programmes designed to enhance the effectiveness with which an organization functions and responds to change.
- Engagement – the development and implementation of policies designed to increase the level of employees’ engagement with their work and the organization.
- Knowledge management – creating, acquiring, capturing, sharing and using knowledge to enhance learning and performance.
- Resourcing – attracting and retaining high quality people.
- Talent management – how the organization ensures that it has the talented people it needs to achieve success.
- Learning and development – providing an environment in which employees are encouraged to learn and develop.
- Reward – defining what the organization wants to do in the longer term to develop and implement reward policies, practices and processes that will further the achievement of its business goals and meet the needs of its stakeholders.
- Employee relations – defining the intentions of the organization about what needs to be done and what needs to be changed in the ways in which the organization manages its relationships with employees and their trade unions.
These strategies may be developed individually, or preferably the HR strategy includes specific and articulated plans to create ‘bundles’ of HR practices and develop a coherent HR system.
The following are some examples of specific HR strategies.
The Children’s Societ
- Implement the rewards strategy of the Society to support the corporate plan and secure the recruitment, retention and motivation of staff to deliver its business objectives.
- Manage the development of the human resources information system to secure productivity improvements in administrative processes.
- Introduce improved performance management processes for managers and staff of the Society.
- Implement training and development which supports the business objectives of the Society and improves the quality of work with children and young people.
There are three broad strands to the Organization and People Strategy:
- Reward and recognition: use recognition and reward programmes to stimulate outstanding team and individual performance contributions.
- Talent management: drive the attraction, retention and professional growth of a deep pool of diverse, talented employees.
- Organizational effectiveness: ensure that the business adapts its organization to maximize employee contribution and deliver performance goals.
It provides direction to the company’s talent, operational effectiveness and performance and reward agendas. The company’s underlying thinking is that the people strategy is not for the human resource function to own but is the responsibility of the whole organization, hence the title ‘Organization and People Strategy’.
A government agency
The key components of the HR strategy are:
- Investing in people – improving the level of intellectual capital.
- Performance management – integrating the values contained in the HR strategy into performance management processes and ensuring that reviews concentrate on how well people are performing those values.
- Job design – a key component concerned with how jobs are designed and how they relate to the whole business.
- The reward system – developing reward strategies, taking into account that this is a very hard-driven business.
Higher education institutions (The Higher Education Funding Council)
- Address recruitment and retention difficulties in a targeted and cost-effective manner
- Meet specific staff development and training objectives that not only equip staff to meet their current needs but also prepare them for future changes, such as using new technologies for learning and teaching. This would include management development.
- Develop equal opportunity targets with programmes to implement good practice throughout an institution. This would include ensuring equal pay for work of equal value, using institution-wide systems of job evaluation. This could involve institutions working collectively – regionally or nationally.
- Carry out regular reviews of staffing needs, reflecting changes in market demands and technology. The reviews would consider overall numbers and the balance of different categories of staff.
- Conduct annual performance reviews of all staff, based on open and objective criteria, with reward connected to the performance of individuals including, where appropriate, their contribution to teams.
- Take action to tackle poor performance.
A local authority
The focus is on the organization of excellence. The strategy is broken down into eight sections: employee relations, recruitment and retention, training, performance management, pay and benefits, health and safety, absence management and equal opportunities.