What is strategic human resource management?
What is strategic human resource management?

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What is strategic human resource management?

Time as context

Given the evolution of HRM, time itself can be regarded as a form of context. Alongside this, place also matters hugely.

At the corporate level, the place and contribution of human resource management can be contingent upon strategic decisions about organisational structure and form. In some circumstances, HR may have a considerable input to such decisions, in other circumstances it may be the object of such upstream decisions and thus have to work within a given context. A clear example is the different ways in which two global corporations – Unilever and Proctor & Gamble – utilised shared service centres including their use for HR. Proctor & Gamble (P&G) had operated for some time with a highly centralised approach to management, hence it established an internal shared services centre before moving on to outsourcing much of its HR shared services. Conversely, Unilever which traditionally operated with a decentralised approach, turned to outsourcing as a means towards globally standardising its systems and processes (Gospel and Sako, 2010).

On an even wider front, the underlying ideas, beliefs and assumptions of human resource management are a product of their historic and geographical contexts. For example, up until about the mid-1980s, conventional wisdom about people management and employment management in the UK was that the approach had to be based on ‘pluralism’ – that is that economic organisations are composed of multiple interests and interests groups which need to collaborate and compromise for their mutual benefit. Thus, trade unions were accepted as essential representatives of worker interests. Valued skills among people managers were based around negotiation.

A disruptive and initially challenging rival to this approach in the mid-1980s was the idea of a ‘new’ type of approach based on US ideas and human resource management practice. This initially was a small group of ‘disruptive’ specialists who sat uneasily alongside mainstream industrial relations and personnel departments. The HR and personnel practitioners tended to rely on procedure and due process. Over time, the tenets, beliefs and methods of the interloper began to take over. As trade union membership declined and industry restructured – especially with a shift from manufacturing employment to services – the previously prevailing approach to people management became replaced by HR notions of winning commitment, and a more unitarist set of assumptions in the face of global competition. In other words, a key part of the HRM context changed fundamentally.

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