Professional Documents
Culture Documents
Strategic Human Resource Management
Strategic Human Resource Management
Management
The field of Strategic Human Resource Management (SHRM) has burgeoned over
the past thirty years. Over this time there has been a shift towards a strategic concep-
tion which posited workers as ‘assets’ rather than ‘costs’. These ‘human resources’
were reconceptualised as a key source of competitive advantage. As such, these assets
were to be treated seriously: selected with care, trained and developed, and above all,
induced to offer commitment. The concept of ‘human capital’ came to the fore, and
in the decades following these developments, research output has been voluminous.
Strategic Human Resource Management: A Research Overview, authored by
global research leaders, provides an expert summary of this crucial element of organi-
zational performance. This new shortform book develops the argument that one of
the crucial elements of organizational performance is the way work is organized in
skill and talent packages both within an organization’s boundary and across global
competency clusters. Secondly, it focuses on current and emergent challenges. The
‘package’ of HR approaches has changed over time and patterns can be observed. This
new volume pays special regard to the HR implications arising from radically altering
contexts – economic, social, and technological.
This concise volume covers crucial themes of lasting interest, and as such is
essential reading for business scholars and professionals.
Patrick M. Wright is faculty director of the Center for Executive Succession in the
Darla Moore School of Business at the University of South Carolina, USA. From
2011 to 2017, he was named by HR magazine as one of the 20 “Most Influential”
Thought Leaders in HR.
State of the Art in Business Research
Edited by Professor Geoffrey Wood
Business Models
A Research Overview
Christian Nielsen, Morten Lund, Marco Montemari, Francesco Paolone,
Maurizio Massaro and John Dumay
List of figures vi
References 91
Index 109
Figures
The key elements in both these definitions are: long-term focus, a strong link
with business goals and a concern with ‘macro’ issues such as culture and
values. Notably, apart from the reference to business goals, there is no specific
mention of contextual issues such as changes in product market conditions,
labour markets, regulation, innovations in technology or social changes. This
may or may not imply a one-best way or universalist approach.
As noted, it is an approach which openly seeks to secure a ‘competi-
tive advantage’. This declared objective is not to every ideological taste.
This element alone indicates that the approach shares a similar stance as
American strategy theorists such as Michael Porter (Porter 1980). Many
critics of HRM have been, and are, uncomfortable with this first element.
They posit the idea that economic activity does not to have to be quite so
single-mindedly dedicated to free market competition. They also contend
that even within a capitalist framework, collaboration as well as com-
petition can operate and that other objectives in addition to competitive
Mapping the field of SHRM 5
advantage such as wellbeing, equity and multiple stakeholder interests
could be pursued. And they are of course correct. But some of these
critics have failed to recognise that an identification and description of
a movement and an idea should not be confused with an endorsement of
that idea.
Second, the definition points to the distinctive means through which the
objective will be sought. These include, crucially, the element of a ‘strategic’
approach. This means that the management of people and of the workforce
in general is approached not in an ad hoc, tactical and merely reactive way
but in a manner which regards this aspect of management as of central impor-
tance. HRM practices helped deliver strategic objectives. Different strategies
require different employee skills. As with other aspects of the definition, the
interesting features are in noting not only what this form of HRM is, but also
what the meaning suggests HRM is not. The counterfactual is important. For
the HRM debate and the emergence of HRM only makes sense when it is
recognised as part of the history of its time.
HRM emerged at a time when labour management, in broad characteri‑
sation, might be described as a secondary, Cinderella-like, management practice
(‘Personnel Management’ was often described in these terms). Markets were
defined, finance arranged, production plans drawn up – and only then was
the request for certain units of labour issued, often at short notice. Similarly,
as industrial conflict was of concern in the post-second world war period, the
skills in subduing and ‘managing conflict’ were to the fore in the then field
of personnel/IR management. It was into this climate when western product
markets were coming up against international competition – and often
losing out – that this ‘new’ approach to managing labour emerged and presented
a challenge to existing assumptions and practices.
Third, the definition refers to the deployment of a ‘highly committed and
capable workforce’. This is an important feature of the distinctive approach.
As we know, very large sections of the economy operate on very differ-
ent principles. The high commitment approach is relatively unusual in large
swathes of the employment scene. Hire and fire, short-term contracts, even
zero-hour contracts, outsourcing, agency work and many other such methods
to treat labour as a mere transaction are relatively commonplace. Recent talk of
‘employee engagement’ or ‘employee experience’ can be seen as a latter-day
attempt to (re)capture some of that high commitment agenda. The distinctive
high commitment mode of HRM equates with what is termed the ‘High Road’
approach to employment management. The ‘Low Road’ approach relates to
the precarious forms of employment (Osterman 2018). The links between
high pay/high productivity versus low pay/low productivity models
have been explored in the disciplines of economics (Abowd et al. 1999)
6 Mapping the field of SHRM
and employment relations (Holzer et al. 2004). HRM, in the distinctive
sense, is expressive of the High Road approach. This high road/high com-
mitment perspective is likewise integral to the theory of High Performance
Workplaces (Appelbaum et al. 2000)
Fourth, the ‘array of cultural, structural and personnel techniques’ refers
to the mutually-reinforcing ways in which a truly thought-out strategic
approach can deploy a wide range of methods which would have internal
‘fit’ and would complement each other (a further instance of the strate-
gic nature of the idea). These techniques include attempts to: ‘win hearts
and minds’ rather than merely enforce a contract; to de-emphasise custom
and practice in favour of instilling values and mission; pluralism is also
downplayed in favour of an implied unitary perspective where employers,
managers and employees are seen to share at least one similar interest:
to keep the enterprise in business. Thus, a set of beliefs and assumptions
underpin this distinctive form of HRM. Other dimensions stress the role
of strategy in that the business plan becomes pertinent to the way that
employees and workers in general are managed; and an emphasis on the
role of line managers as crucial to the practice and experience of HR poli-
cies. Then there is a set of key levers such as serious attention to selection
(in place of hire and fire), performance related pay, an attempt to move
from ‘temporary truces’ in labour negotiations to management through cul-
ture and shared goals.
When viewed holistically, is this package to be regarded as a ‘soft’, ‘human
relations’, approach with employee welfare at its core? There are facets such as
an emphasis on training and development and the winning of hearts and minds
that might lean in that direction. But there are also ‘hard’ aspects to this model
of HRM (Storey 2007). Labour is seen as a strategic resource. As such it is to
be planned-for, measured carefully, and used as an asset. HRM sits alongside
the resource-based view of the firm as strategic perspective on how to manage
the employment relationship (Storey 1992; 2007).
What about practice? While the HRM label has become so ubiquitous
and has, in the main, replaced personnel management in many organizations
(contrary to expectations and indeed contrary to empirical evidence dur-
ing its early days – as revealed by the WERS surveys1), the management of
work has, over the past couple of decades, not been a steady journey to the
wider diffusion of the best practice HRM model. In the wider, generic sense,
Human Resource Management continues, but the nature of its practice is very
varied. This variation is reflected in terms such as ‘High Road and Low Road’
practices, ‘polarized work’ and in the metaphor of the ‘hourglass economy’.
These variations might seem to suggest the degree of strategic choice fac-
ing HR professionals. Yet, research across major economies indicates that,
Mapping the field of SHRM 7
for many workers, the erstwhile trend towards good practice has shifted into
reverse (Kalleberg 2013; 2018).
Strategy as plan?
Another issue that has been central to debates in business strategy and
also has much relevance to HR strategy, is whether a ‘strategic approach’
requires a formal plan. There is often a tendency to think about strategy as
requiring the compilation of information and as a formal process of decision
making that culminates in a series of plans. But there is another view; the
view that suggests strategy can be inferred from a pattern that emerges from
a long series of decisions, even in the absence of a formal written plan or
strategy document. This could be termed a ‘de facto strategy’. This idea of
an ‘emergent strategy’ is normally associated with Henry Mintzberg (1978).
So, an enterprise may have no formal strategy document and yet still
have a de facto emergent strategy. Or it may even be that an enterprise has
a formal and lengthy strategy document which is largely ignored in practice
while a different de facto strategy is pursued.
A de facto strategy which has been built up incrementally and found to
‘work’ (in the sense that the organisation has proved to be sustainable and
no major chronic problems are occurring) may add up to a coherent strategy.
10 Mapping the field of SHRM
But not all ad hoc approaches have such optimal outcomes. ‘Ad
hocery’ may result in a lack of forethought, inconsistencies, short-term
thinking, and waste and can be very costly and lead to an uncompetitive
position (e.g., paying redundancies as a reaction to economic downturn
and then facing recruitment difficulties and training costs when upturn
occurs). The word ‘rudderless’ is sometimes used to describe this kind
of drift and lack of direction. Hence, this particular approach would be
considered as non-strategic.
So, what would an approach to HR look like if it was not ad hoc, rudderless
and reactive? The implied alternative is some kind of strategic approach – that
is, one which:
Coherence is about fit and integration. In other words, it suggests that the
parts or elements fit together smoothly rather than contradict each other or
lean in different directions. A classic example of HR decisions which tend
towards contradiction is where ‘team focus’ is urged and policies are put
in place to promote that, but where the remuneration system is based on
individual performance-related pay.
But, in addition to alignment and coherence, HR strategy design requires
attention to contexts – that is, the inner and outer contexts as outlined in the
previous unit.
The nature of the design, and the range of factors to be taken into
account when attempting this design, is a matter of some debate. The skill
involved in making these decisions may be a matter of good judgement –
an essential quality for a competent strategist in HR. Some analysts rec-
ommend an approach which amounts to a ‘design’ or ‘decision science’
(Boudreau and Ramstad 2009) with an associated emphasis on systematic
concepts, frameworks and measurement, while others lean more towards
an approach based on aspects of leadership and social intelligence.
In the next chapter we assess the body of research which has tried to clarify
the performance outcomes arising from the deployment of strategic human
resource practices. These outcomes may be behavioural in the sense, for
example, of higher employee commitment or firm outcomes in the shape of
higher productivity or even higher profitability.
Note
1 WERS is the acronym for the highly-respected Workplace Employment Relations
Surveys in the UK. Results during the 1980s and 1990s showed very low take-up
of the term ‘Human Resource Management’.
2 Strategic human resource
management and performance
outcomes
This chapter will explore the research that, over the past twenty-five years,
has sought to examine the link between HR practices and performance.
One of the earliest frameworks for exploring the impact of HR practices
on performance was the ‘Behavioral Perspective’ outlined by Schuler and
Jackson (1987) and noted briefly in Chapter 1. Having its roots in con-
tingency theory, this model was based on the assumption that the purpose
of employment practices was to shape or control employee attitudes and
behaviours. They suggested that (a) different competitive strategies require
different employee ‘role behaviours’, and (b) different HR practices can
elicit these different role behaviours. Thus, they suggested that employee
role behaviour mediated the relationship between strategy and performance,
and that HR practices were critical for producing the relevant behaviours.
Also central to this model was the need for congruence across HRM prac-
tices such that all worked towards producing the required set of behaviours.
The behavioural perspective also formed the conceptual basis for Miles
and Snow’s (1978) exploration of HR practices associated with different
organisational types. Having proposed three types, ‘defenders’, ‘prospec-
tors’, and ‘analysers’ in an earlier paper (Miles and Snow 1978), they
provided an analysis of the types of practices that would be appropriate for
each of these types.
Another behavioural approach to explaining the relationship between
HR practices and performance can be found using Social Exchange Theory
(Blau 1986; Homans 1961). This theory originated as a way to explain how
relationships develop between individuals, but was later expanded to explore
the relationship between an organisation and its employees (Eisenberger
et al. 1986). This more macro-level application suggests that when employ-
ees perceive that the organisation is taking positive beneficial actions
towards them, they will reciprocate in positive and beneficial ways toward
the organisation. Consequently, a number of authors have suggested
16 HR management and performance outcomes
that commitment-based HR practices demonstrate beneficial treatment of
employees, which causes them to reciprocate by being more committed and
productive, resulting in higher organisational performance (e.g., Chuang and
Liao 2010; Messersmith et al., 2011; Sun et al. 2007; Takeuchi et al. 2011).
While these frameworks provide more detailed process explanations
for the relationship between HR practice and performance, the Resource-
based Theory (RBT) of the firm (Barney 1991; Wernerfelt 1984) provided a
higher level explanation for why HR practices can impact firm performance.
Barney (1991) noted that resources that are valuable, rare, inimitable, and
non-substitutable can be a source of sustainable competitive advantage to
a firm. Sustainable advantages accrue when a firm implements a value-
creating strategy that competitors have ceased trying to imitate. While such
an advantage is defined in terms of economic rents that can be distributed
to, or among, a variety of stakeholders (e.g., shareholders, customers,
employees, etc.; see Coff, 1999), the assumption within empirical research
is that such advantages are observed in shareholder returns, and thus financial
and market-based performance of firms.
Early on, debates arose about the extent to which HR practices could be
viewed as sources of sustainable competitive advantage, with the debates
focused on the inimitability of the practices. Wright et al. (1994) suggested
that any HR practice could easily be imitated by competitors. However,
Lado and Wilson (1994) argued that the system (as opposed to individual
practices) could be unique, causally ambiguous, and synergistic in how it
impacted firm competencies. Later, Barney and Wright (1998) similarly
suggested that while competitors could imitate any one practice, they would
find it difficult to imitate the system of practices. Consequently, the field
has come to a consensus on the importance of HR practices and their poten-
tial to at least aid in creating competitive advantage. This consensus has
become so great, that one would be hard pressed to find any study of the
relationship between HR practices and performance that does not at least
pay lip service to the RBT as the overarching rationale for hypothesising a
positive relationship.
The earliest conceptual and empirical research on HR practices began with
explorations of the ‘determinants’ of the various practices. Miles and Snow
(1978) were among the first to offer a framework for aligning HR practices
with strategy. They argued that the different strategic types (defenders,
etc.) required different approaches to how they managed people. They then
provided an analysis showing the different HR practices associated with
these strategic types, and provided company examples to illustrate these dif-
ferences. Baird and Meshoulam (1988) examined the determinants of HR
practices rather differently. Instead of examining business strategies, these
HR management and performance outcomes 17
authors focused on different stages in organisational life-cycles, and provided
a conceptual examination of how HR practices might become more sophisti-
cated as firms moved into different stages. Lengnick-Hall and Lengnick-Hall
(1988) developed a model juxtaposing organisational readiness and corporate
growth potential to create a two-by-two matrix. They then hypothesised the
different types of HR systems that would be associated with each.
Following these conceptual examinations, the earliest research empiri-
cally explored the determinants, rather than the outcomes, of HR practices.
For instance, Snell (1992) was among the first to explore the determinants
of HR practices at the organisational level of analysis. He viewed HR prac-
tices as control mechanisms (input, e.g., selection and throughput, using
for example, behavioural appraisal; and output, using for example, results-
based appraisal) and found that the use of these aspects of HR practices
were associated with administrative information and strategic context. Snell
and Dean (1992) explored the link between integrated manufacturing and
HR practices. They measured integrated manufacturing in terms of the use
of advanced manufacturing technology (AMT), just-in-time inventory con-
trol (JIT), and total quality management (TQM). They suggested that such
manufacturing technologies required upskilling of the workforce to be able
to effectively utilise the technologies. Thus, they expected that their use
would be associated with more selective staffing practices, comprehensive
training, developmental performance appraisal, and equitable rewards.
They generally found support for these hypotheses among operations and
quality-control staff, but not among production control employees. Finally,
Arthur (1992) examined how strategy impacted HR practices in a sample
of steel mini-mills. Using cluster analysis he identified six different clusters
of mini-mills similar in their profile of HR practices. He then collapsed
them into two types: ‘cost-reducers’ and ‘commitment maximisers’. This
was consistent with Walton’s (1985) view of firms using control or com-
mitment approaches, and Arthur’s (1994) later use of this nomenclature.
He found that mini-mills emphasising manufacturing few products in large
quantities tended toward the use of a cost-reducer/control HR system, while
those stressing more flexible manufacturing were more likely to use a
commitment-maximiser HR system.
Which practices?
While research has clearly demonstrated the positive relationship between
HR practices and performance, one critical question remains unanswered:
which practices? As early as Becker and Gerhart’s (1996) introduction to the
Academy of Management Journal’s special issue, we see complaints about
the lack of consistency in the HR practices measured across the studies
comprising that issue. They noted no single practice was part of each paper,
and only one, training, appeared in all but one paper. This problem has not
gone away. Posthuma et al. (2013) analysed 193 peer-reviewed articles and
identified 61 specific HR practices that had been measured. However, they
bemoaned the fact that there was very little consistency in the practices that
have been measured across these studies. Similarly, Langevin-Heavey et al.
(2013) found little agreement on the specific practices that have been used
in studying the relationship between HR practices and performance.
Recently, Su and his colleagues have called for expanding the list of
practices used in this research. They noted that since the early distinc-
tion between commitment- and control-oriented practices (Arthur 1994),
24 HR management and performance outcomes
HPWS research has focused almost entirely on commitment-oriented
practices, In two studies, Su and his colleagues (Su and Wright 2012; Su
et al. 2018) have found that adding control-oriented practices increases
the amount of performance variance explained beyond that of just the
commitment-oriented practices.
In addition to the specific practices, there is little consensus on the approach
to aggregating the practices. Since the Huselid (1995) study, virtually all
research has simply added the items together to compute an overall scale (or
used factor analysis and added up the sub-scales). However, recent research
based on the Ability, Motivation, and Opportunity (AMO) perspective has
suggested that HPWS really contain three subcomponents: ability-enhancing,
motivation-enhancing, and opportunity-enhancing subscales. For instance,
Gardner et al. (2011) noted that ability-enhancing practices were actually
positively related to turnover, while motivation- and opportunity-enhancing
practices were negatively related.
More exhaustively, the Jiang et al. (2012) meta-analysis segmented HR
practices into three sub-components: ability, motivation, and opportunity-
enhancing practices. They found that skill-enhancing practices were more
strongly related to human capital and less strongly related to employee
motivation than were motivation and opportunity-enhancing practices.
They noted:
Conclusion
Research on the impact of HR practices on performance has grown to be one
of the more frequently studied phenomena in the field of HR. This research
has been conducted in cross-industry (e.g., Huselid 1995), within indus-
try (e.g., Delery and Doty 1996; MacDuffie 1995), and within corporation
(e.g., Wright et al. 2005) settings. In addition, it has been conducted across
a large number of geographies. In the main, these studies have revealed a
consistent finding of a positive relationship between HR practices and per-
formance. In the next chapter we make a closer examination of the precise
nature of the practices involved.
3 Key practice areas and the key
levers
Interpretation of
business strategy HR
Exit
strategy
Career management
Organizational
design
Engagement &
reward Job design and
team design
Training &
development
HR planning
Corporate
plan Human resource supply
Product Investment
Locational Internal labour External labour
market e.g. in
decisions supply analysis supply analysis
plans technology
Reconciliation of supply
and demand
Corporate strategy
Clear communication
of mission and
objectives
Departmental
purpose analysis
Individual
PRP and
objective
development
setting
Performance
evaluation
Compensation
Compensation is the monetary side of the total reward system. The key
issues addressed by researchers concern the types of monetary reward and
their impact. Two main types are structured pay based, for example, on
skill or location in the hierarchy, and second, various forms of performance
related pay.
‘Reward’ includes various monetary-related elements such as pay and
benefits plus various non-monetary aspects including intrinsic rewards.
The whole package is often referred to as ‘total reward’. Reward choices
are: base pay, performance pay or indirect pay/benefits. Individual, team
and/or organization-wide rewards are, for example, profit sharing. Taken
together, ‘total reward’ includes monetary compensation (including cash
and benefits) and non-monetary rewards (Gerhart 2009). Settling on a
monetary reward often depends on the ‘going rate’ for similar jobs in simi-
lar labour markets. Firms may have more discretion over how they pay
(that is, what form compensation takes, especially with regard to pay for
performance) rather than how much to pay (Gerhart 2009).
Payment by results (PBR) is one form of performance related pay (PRP).
It was common in industries such as engineering and textiles where paying
by the piece was normal. From the 1980s onwards, there was an expansion
of PRP into non-traditional areas such as banking and the civil service.
Overall, there has been a shift from job evaluation-based pay structures to
more performance-related pay methods.
36 Key practice areas and the key levers
There are two sub-types of PRP: linking pay to performance as meas-
ured by the achievement of specific outcomes such as units produced; and
assessing performance in terms of behaviours as in merit rating derived
from assessment of traits such as problem solving, cooperation, and the
use of initiative. A meta-analysis of incentive effects of individual PRP
revealed a productivity effect of around 30% (Locke and Feren 1980). But
other research shows how PRP systems deteriorate over time and how the
effect only works in the context of straightforward physical tasks. Also
interesting is the ‘sorting effect’ – that is, the way in which the existence of
a PRP attracts some workers and repels others (Lazear 2000).
Part of the drive in the direction of PRP in the 1980s onwards was the
intent to individualise the employment relationship and break away from
standard collective contracts. But PRP schemes seem counter-productive
as the link between performance and pay becomes subject to anomalies.
Individual PRP can conflict with attempts to forge teamwork and there is
a danger that the focus on individual reward compromises other incentives
and sources of work motivation (Gerhart 2009).
Individual PRP systems can also undermine team-based management
approaches. Thus, PRP as with any reward system, has to align with other
features of the organizations. The idea of ‘fit’ is also relevant in relation to
other aspects of HR policies such as high organizational commitment and
organizational citizenship and with intervening variables of ability, motiva-
tion, and opportunity (Appelbaum et al. 2000). For example, with regard to
opportunity, group-based incentives are more likely to be relevant in small
group settings rather than in larger group settings (Kruse 1993).
Alternatives to individual PRP include group performance schemes and
organization-wide profit sharing schemes. An alternative is ‘gainsharing’
which is based on the sharing of cost savings and may also be used in cases
of productivity gain sharing (Kruse et al. 2010).
Finally, with any form of PRP there are likely to be measurement issues.
Results-based measures may seem more directly linked to effort and ability
but there are also grounds for using behaviour-based methods. These can take
into account judgements about surrounding factors and wider forms of contri-
bution such as customer service and colleague support. But, on the downside,
there may be deficiencies in rater reliability (Viswesvaran and Ones 1996).
Conclusion
This chapter has offered a synopsis of some of the large body of research on
the wide array of SHRM practices. Inevitably, the coverage of those litera-
tures is only indicative. Lots of research evidence is omitted, but in broad
measure many of the ongoing debates about the choices facing SHRM prac-
titioners are reflected in the chapter. There are aspects such as social capital
and the encouragement of building and benefiting from networks that are
crucial yet not conventionally covered in most considerations of HRM
practice areas. It is also noteworthy that HR practices and philosophies are
subject to significant shifts over time. Economic cycles appear to have a sig-
nificant impact on these as do more structural shifts such as globalisation.
Hence, for example, soft HRM processes may not be resilient in recessions
(Cook et al. 2016).
In the next chapter we take a different perspective by examining in more
detail the nature of the competencies which underpin effective strategic human
resource management and we look more closely at the HR function itself.
4 HR competences and the HR
function
The backstory
From the earliest days of HRM in the 1980s, there has been discussion
about the capability of personnel departments to translate the conceptual
models into actual practice. As we have seen in earlier chapters, the concep-
tual models emphasize strategic and integrated approaches. With respect to
the personnel (or HR) function, the questions arising therefore included the
extent to which such prescriptions were being followed and how the func-
tion was responding.
In some formulations, this was turned into a question about the
‘impact’ of HRM ideas on personnel as a function (Sisson 2001). However
expressed, the underlying questions concerned the extent to which the
prescriptive models were being adopted by personnel specialists and their
ability to deliver these.
Many of the early reports and analyses were sceptical. Tyson and Fell
(1986) identified different categories and types of personnel managers.
‘Clerks of works’ were largely involved in routine matters such as record
keeping and handling documentation. ‘Contracts managers’ tended to han-
dle industrial relations matters in workplaces with trade unions. ‘Architects’
were involved in policy making and were senior managers who tended to
identify as business managers first and personnel managers second. They
concluded that, in practice, the ‘clerks’ and ‘contract manager’ types well
outnumbered the ‘architects’. Likewise, Sisson (1995) recorded ‘little
impact’ of HRM on personnel in the 1980s and early 1990s. Using data
from the well-regarded Workplace Employment Relations Survey (WERS),
he updated the analysis and amended the judgement to one of ‘partial
impact’ (Sisson 2001). The WERS data revealed a mixed picture: there was
little increase in board level representation for the personnel/HR function,
and rather than an integrated, holistic approach being widely adopted, the
evidence pointed to the function remaining fragmented and ‘balkanized’.
On the other hand, the much anticipated externalization of the function (to
outsourced suppliers) had not occurred to any significant extent during this
period. Based on additional survey work, Caldwell (2003) reached similar
conclusions while also noting the ongoing ‘ambiguities and uncertainties’
in the role of personnel management/HR.
HR competences and the HR function 45
As observed, one of the claimed distinctive features of the new approach
was a greater focus on strategy rather than merely efficient administration
of the workforce. This strategic element relates to both a tighter horizontal
integration so that the various sub-elements of the function align (e.g., recruit-
ment with training and with compensation and promotion), and a tighter
vertical integration so that as a whole these elements align with the business
strategy. This ambitious mission for HRM requires appropriate competencies
and appropriate organizational arrangements – i.e., the two themes that form
the main focus of this chapter.
The latest official WERS survey (the sixth in the series) took place in 2011.
In their report of the First Findings from this extensive work across 2,680
workplaces using very detailed face-to-face administered questionnaires with
multiple respondents, the authors report ‘little evidence of an increasingly
strategic role for HR’ between the 2004 survey and the one conducted in 2011
(Wanrooy et al. 2013). The percentage of workplaces belonging to organiza-
tions with a formal strategic plan for employee development was 56%, and
with a plan for job satisfaction 39%. These figures had not materially altered
since the survey in 2004. In the 2011 survey, just 56% of workplaces were
part of an organization which had an HR person represented on the board.
Details of the study can be fund via this link: www.gov.uk/government/
publications/the-2011-workplace-employment-relations-study-wers.
In the USA too, there have been some sober assessments of the nature
and contribution of the HR function. Most infamous was the extended
essay Why We Hate HR (Hammonds 2005). Among a number of critiques
this argued that HR had essentially focused on administrative work which
was being outsourced; unfortunately, the HR function, he argued, was ill-
suited to the remaining crucial element, the strategic role. Lawler (2005),
as well as Becker and Huselid (2006) reached a similar conclusion. Later
in this chapter we present some alternative data and interpretations.
Analysis in the USA of small and medium sized enterprises draw-
ing on the National Organizations Survey, revealed a positive unit-level
performance effect from having a formal HR function (Chadwick and
Li 2018). One explanation is that their presence may prompt and pro-
mote the creation and maintenance of a high performance work system
(HPWS). Useful though such evidence might be, such studies shed little
light on the actual processes involved. The relative lack of data about the
processes involved in doing HR – that is, the ‘black box’ between policies
and outcomes – as has been noted by a number of observers including,
for example, Haggerty and Wright (2010). Their work emphasized the
importance of implementation rather than formulation and linked this to
crucial attributes such as legitimacy and visibility of the HR function.
These attributes may be problematic even with regard to receptivity by
46 HR competences and the HR function
fellow managers, never mind the wider body of employees (Haggerty and
Wright 2010, p. 112).
There have been limited studies of the ways in which outsourcing HR
activities affects the HR role internally, its remaining competencies or its
influence with senior management. One study, that compared HR depart-
ments which had engaged in HR outsourcing with those departments which
had maintained full in-house HR provision, found that the latter enjoyed
more positive outcomes such as enhanced trust, more competency develop-
ment, and a clearer strategic focus (Glaister 2014). The enhanced benefits of
an in-house HR function is also underlined by the findings from a study of a
German subsidiary of a US company. This revealed that the effects of out-
sourcing on the in-house HR function included a decrease in its flexibility, a
slowdown in its processing time of transactional work, and a decrease in job
satisfaction among HR managers (Patel et al. 2017).
Research using data from a study of firms in Spain attends directly to this
question of acceptance and credibility. The research found that the credibil-
ity of the HR function is only one of the factors that influence employees’
acceptance of HR’s role. Other essential elements were top management and
supervisor support, and that supervisor support carries more weight than
that of top managers (Stirpe et al. 2013). Similar results are reported from
a study of subsidiaries of Nordic multinationals though in this instance the
attitudes of the unit managers were fund to be especially important (John and
Bjorkman 2015).
We now turn to recent work which attends directly to the question of con-
temporary HR competencies. Unlike the mainly UK-based studies above,
the ones which follow are mainly American-based though with some global
survey evidence included. The perspectives described below also tend to be
more prescriptive in nature than the descriptive accounts discussed so far.
This study also found three domains of HR competence that are organiza-
tion enablers, helping position HR to deliver strategic value:
•• Culture and change champion: Able to make change happen and man-
age organizational culture.
•• Human capital curator: Able to manage the flow of talent by develop-
ing people and leaders, driving individual performance, and building
technical talent.
•• Total reward steward: Able to manage employee well-being through
financial and non-financial rewards.
Three other delivery enablers that focused on managing the tactical or foun-
dational elements of HR were also found in the study:
Human
Capital
Culture Curator Total
and Change Rewards
Champion Steward
Technology
Compliance
and Media
Manager
Analytics Integrator
Designer and
Interpreter
Competent HR departments
In workshops with business leaders, when asked the question: ‘How would
you divide ten points between individual talent (individual competencies,
workforce, people, employees, human capital) and ‘organization’ (work-
place, organization capabilities, systems, teamwork, culture) and their
relative impact on business results?’ Answers range across the board, with
some highlighting talent, others organization, and some neutral.
Ulrich and colleagues have undertaken research on this question with over
1,200 businesses and 32,000 people (Ulrich et al. 2017). They have deter-
mined for these businesses both the quality of both their organization and the
competencies of their people. They then correlated these two domains on the
financial and stakeholder results of the business. While other factors (e.g.,
strategy, industry, operational excellence, and culture) impact results, they
were able to divide the relative impact of talent and organization on busi-
ness and stakeholder results. They report that organization has four times
the impact of talent on business results. These are significant findings and
imply an 8 to 2 distribution in the ten point allocation exercise with executives
(Ulrich et al. 2017). So, talent matters, but organization matters even more.
52 HR competences and the HR function
Organizations deliver better business and stakeholder results for a host
of reasons. Organizations make the whole more than the sum of the parts by
leveraging and multiplying individual skills. When individuals have com-
plementary skills and work well together, their collective skills are more
than the individual talent. Further, organizations enhance personal well-
being by helping people learn to work better together. Organizations are
social systems that enable people to learn to cooperate, develop talents,
find a shared sense of purpose, and survive. By so doing, organizational
performance is greater than individual productivity. Additionally, organi-
zations take on identities of their own that outlast individual personalities.
Enduring organizations sustain change that any single individual may initiate.
When customers buy products or services from an organization (rather
than an individual), they have long term confidence in the sustainability
of the organization. Investors who have more favourable impressions of
an organization (versus individuals) give the organization a premium for
its sustained financial performance as well as intangibles (strategy, brand,
operational systems).
This ‘power of organization effect’ extends also to the way the HR func-
tion itself is organized. Far less research has been done on what factors
underpin effective HR departments than on the research reported above on
defining HR’s contribution and competencies. Some of the original work on
how to organize HR were captured in the work on being a business partner
in the book Human Resource Champions (Ulrich 1997). That book out-
lined four roles within HR departments: administrative experts, employee
champions, strategic partners, and change agents. These roles provided
the basis for the model used by the Chartered Institute of Personnel and
Development and its work on the role of the ‘business partner’ (CIPD
2014). In popular form, three main organizational roles were widely dis-
cussed: shared services (doing administrative work), centres of expertise
(doing technical specialist work), and business partners (doing generalist
business-focused work). This three-legged model of how to organize a HR
department became highly influential among practitioners (Holley 2016).
After a couple of decades there have also been attempts to offer alterna-
tive assessments and alternative modes of organizational arrangements for
HR (Roebuck 2015; Scott-Jackson and Mayo 2017). The model has also
attracted critique (Adams 2016).
Many of the critiques apply the 1997 business partner model to business
issues twenty years later. In the ensuing twenty years, much has changed
in the world of technology and much has changed in the world of HR. The
business partner concept has dramatically evolved from roles and outcomes
to a logic of how HR delivers value to employees, organizations, custom-
ers, investors, and communities. The transformation of HR is not just about
HR competences and the HR function 53
changing roles in an HR department, but a fundamental shift in how HR
conceives, organizes, and delivers work. More recent work by Ulrich and
colleagues identifies nine dimensions of an effective HR department. These
dimensions draw on the latest work in organization design and also come
from experience working with many HR departments. The updated model
is shown in Figure 4.2.
Starting from the top of the figure is the dimension of HR Reputation.
Every organization creates a reputation in its marketplace, which may
be called its identity or brand. This reputation shapes how stakeholders
perceive and act towards the organization. An HR Department creates a
reputation or identity based on what value it has created, why HR practices
are created and how they are used, and what roles HR professionals play.
These reputations often outlive individual leaders and shape how others
respond to the HR department.
The second dimension is HR Context/Deliverables. An organization suc-
ceeds by mastering its context and defining a unique definition of success.
This definition of success sets the criteria for how the organization allocates
HR Reputation
What is the reputation
HR Professionals of the HR department? HR
What do HR Context/Deliverables
professionals need to be, What are the criteria
know, and do to be (settings) that shape
effective? HR work?
HR Strategy
Effectiveness stages on
HR Workstyle What is the mission or
each dimension
How does HR go about 1. Efficiency strategy of the
doing its work? 2. Functional capabilities-focused
excellence HR department?
3. Strategy
4. Outside in
(customer) HR Design
(process, roles, and
HR Practices
structure)
How do we create HR
How is the HR
practices?
department
organised?
HR and organisation
HR Analytics
capability
How do we make better
How does HR facilitate
HR investments and
the definition and
choices?
creation of organisation
capabilities
Time
Conclusion
In light of the above trends and mega-trends, the question arises as to how
much scope for manoeuvre do would-be strategists in HRM really have?
The concept of strategy implies that there are choices to be made. These
choices may be made after conscientious and careful study, or they may
occur after only cursory and superficial review of options. As we saw in the
first chapter of this book, choices about HR management might be carefully
constructed in a proactive manner and with longer term goals in mind, or in
an ad hoc manner as a reaction to events
One way of approaching this question of room for manoeuvre is to look
at data on the role of HR professionals over time. As reported in the previous
chapter, longitudinal research by Ulrich and colleagues traced the changing
competences of HR professionals. The data sets came not only from self-
reports but also external raters. From 1997 to 2017 they found that being a
competent HR professional has become increasingly complex, with some
of the recent competencies (analytics designer and interpreter; technol-
ogy and social media integrator) reflecting how HR competencies reflect
general business trends. Competencies for HR professionals have evolved
with changing business conditions (Ulrich et al. 2017). This research data
suggests that HR has not merely been a spectator to changing economic
70 The changing contexts of SHRM
conditions but an active player. On the other hand, arguably, in many cases,
strategic choices are made within constraining and limiting ‘boundary condi-
tions’ (Paauwe and Farndale 2017). Thus, context matters greatly. A key part
of the contemporary context is volatility, complexity, and uncertainty. These
conditions seem to require agility from strategic HRM practitioners. This is
the focal subject of the next chapter.
6 Fit, flexibility, and agility
Conclusion
In Chapter 2 of this book we discussed the extensive literature on the rela-
tionship between HR practices and performance outcomes. This relationship
has been well documented and it has been extended by exploring mediating
mechanisms such as organizational commitment. In this present chapter,
we have explored the relationship in even greater depth. First, we note that
SHRM encompasses a firm’s strategy, its HR practices, and the skills and
behaviours of employees. However, for SHRM to live up to its name, it
must tie strategy to HR practices and workforce characteristics, which led
us to the concept of ‘fit’. We showed that according to the most popular
view of fit, i.e., fit as moderation, there is little support for the fact that fit
matters to performance. However, we also noted that this is likely due more
Fit, flexibility, and agility 81
to the generic level at which most HR practices are measured. Thus, future
research that more specifically captures the products or outcomes necessary
for a strategy is much needed in order for our empirical work to support
what most firms do in practice.
Then we turned our attention to HR flexibility, which is viewed as a
firm-level construct encompassing the resource and coordination flexibil-
ity of a firm’s HR practices, employee skills, and employee behaviours.
Flexibility is conceptualized as the ability of a firm to achieve fit with a
diverse and changing set of circumstances. The research on fit has generally
used the HR practices, employee skills, and employee behaviours model,
but the operationalization has not been consistent. However, regardless of
operationalization, measures of flexibility have consistently demonstrated
positive relationships with performance, even though the theory would
suggest that the positive relationship should only be observed in environ-
ments characterized as volatile, uncertain, complex, and/or ambiguous.
The study by Way et al. (2018) noted how flexibility can be an asset in
some contexts but a liability in other contexts. This and other recent stud-
ies of fit and flexibility in SHRM suggest that there is scope for further
productive research in this area.
7 A stock-take and a forward view
The previous six chapters have tracked research in the field of Strategic
Human Resource Management over a period of half a century. Two main
questions arise: first, what overall conclusions can be drawn from this
body of research, and second, what are the emergent issues meriting
future research?
Regarding the first of these questions, the review reveals the periodic
emergence of what appear to be ‘new’ issues and themes. Some of these
may be categorized as part of the fads and fashions which are characteristic
of management and business studies more generally; but the salience
of themes such as globalization, digitalization and the trend towards
increasing precarious employment in contexts where more secure forms
previously existed, appear genuinely novel and of importance – at least
in the particular forms they have manifested in recent years. One of the
surprising developments has been the unravelling, in many corpora-
tions but not all, of the sophisticated packages of SHRM which had been
celebrated and portrayed in the 1980s. In the face of more severe global
competition and the squeeze on costs, some firms, including such notable
and celebrated cases as Hewlett Packard, proceeded to erode many of the
attributes of the high-commitment model of HRM (Hodgson et al. 2012).
As the prevalence of ‘low road’ practices developed, the headlines were
increasingly characterized by reports of zero-hour contracts and poor
working conditions. We noted in earlier chapters the increased polarized
distribution of workers in high-paid and low-paid jobs as indicative of this
trend. While low wages characterize many parts of modern economies,
there are pockets of very high compensation such as at Facebook where
the median compensation in 2018 was $240,000 (The Economist 2018).
Fragmentation and turbulence – reflected in the volatility, uncertainty,
complexity, and ambiguity phenomenon – seem to characterize the state
of play in modern employment conditions. But there is a possibility this
generalisation rests on an unrepresentative set of highly-publicised cases.
A stock-take and a forward view 83
From another point of view, it could be said that the basic underlying
issues in SHRM remain broadly familiar, even though not presenting
in quite the same way. As noted in the introductory chapter, some core
themes of HRM are perennial and have been revisited and reworked sev-
eral times under different guises. Examples include the Resource Based
View, High Performance Working, Talent Management, and the new focus
on ‘Management Practices’ (Bloom and Van Reenen 2007; Bender et al.
2018). At the core is the employment relationship. Employers seek reliable
service; employees seek fair rewards. From an employer’s perspective,
a workforce has to be found, recruited, selected, trained, objectives set,
and performance monitored, compensation has to be provided and, in due
course, contracts terminated. From these basics, many variants emerge.
The employer may sub-contract and so the identity of the ‘actual’ employer
may be uncertain and a matter for legal determination. Likewise, whether
an employment contract even exists or whether there is some form of
payment for service from a supposedly ‘self-employed’ contractor, also
becomes a matter of contention. Relatedly, the fluctuations from a commit-
ment to a control-based relationship and back again is a further instance of
continuity. However, when taking a long-view, the recent increased preva-
lence of precarious forms of low-paid work sitting alongside a privileged
few attracting high rewards can be seen as far from new. Moreover, the
fundamental conceptualization of what constitutes the domain of SHRM
has remained broadly the same. The early models and their building
blocks of vertical and horizontal integration, the positioning of workers as
‘assets’ rather than mere ‘costs’, and the strategic value of the intelligent
use of human resources as the basis of value-added are all concepts which
have endured. There remains scope for debate about whether the field has
narrowed unhealthily (Kaufman 2015) or whether it has matured and deep-
ened (Wright, Guest and Paauwe 2015), but the enduring significance of
the core concepts seems evident.
As noted in the first chapter, the very idea of ‘strategy’ in HRM implies
considerable scope for, and the exercise of, choice. HR specialists, or indeed
other managers making decisions which impact on employment, have the
potential to make choices about the kinds of employment – and employ-
ment relations – they want to encourage and realize (though this does not
mean their choices are unfettered). As noted in previous chapters, there are
the classic strategic choices about a high value-added/high pay model or a
low-cost/low-pay business model. ‘Alignment’ in strategic HR used to imply
matching high-quality customer service with high-end employment prac-
tices built on skilled staff, good training, and high-commitment. To some
extent that equation may still hold. But, as noted in Chapter 5, in recent
times there is evidence that even high-end employers have fragmented their
84 A stock-take and a forward view
labour forces so that some staff are retained on low-end conditions such as
zero-hour contracts, low pay, and poor terms and conditions, while others are
highly rewarded (Weil 2014). The extent to which HR strategists (or those
managers acting in that capacity) have the scope and freedom of manoeuvre
to resist the pressures created by low-cost options (such as outsourcing to
low cost economies, or contracting out certain service functions) is often
unclear. This topic would make for an excellent future research project.
The boundary conditions to open choice are increasingly fuzzy. This means
that the work HR specialists are expected to do fluctuates over time even
while, at a more fundamental level, it broadly remains the same. The data on
changing HR competencies as tracked by Ulrich and reported in Chapter 4,
suggests that persons occupying these roles are expected to play an increas-
ingly strategic role in place of an administrative one. But the extent to which
the choices they make are context-dependent remains uncertain and more
empirical research is required.
While the fundamentals of SHRM remain in place as a reference point for
practice and theory, it is evident, as noted throughout the book, that there are
many counter-forces which are in contention with the rather more optimistic
outlook of the early days of the field. Instead of an overall drift towards the
adoption of many of the attributes of SHRM which was recorded empirically
(Storey 1992) through extensive fieldwork in mainstream companies and
documented in the detailed account of fifteen major employing organizations
such as Ford, Peugeot, Jaguar, Eaton, and Rolls-Royce, in many instances the
tidal flow since then has often been in the reverse direction. Financialization,
fragmented labour markets, deteriorations in terms and conditions of work,
outsourcing, and short-termism have been compelling forces which fly in the
face of the high-commitment model of SHRM. Signs of employers taking the
‘low road’ option have been all too evident (Osterman 2018). And yet exam-
ples of employers taking the ‘high road’ still do exist and there is evidence
that they can ‘do well by doing good’ (Osterman 2018).
What next?
So, to address our second question: what next? What issues and themes will
future researchers in SHRM be studying? We cannot of course predict the
future, but we can report on current and emergent themes in the very latest
literature and other influential sources such as conference agendas, consul-
tancy reports, workshops, and grey literature such as think tank reports and
government-sponsored reports. These sources offer different ‘windows’
through which to view the nature of contemporary trends and concerns.
The views from these windows varies: some disclose a bright optimistic
landscape others a darker more pessimistic view.
A stock-take and a forward view 85
In what follows, we first draw out the key issues found in current academic
literature; second, we summarize findings from the grey literature of think
tank and government reports; third, we review themes found in practitioner-
oriented publications such as Harvard Business Review and HR Magazine;
and finally, we seek to encapsulate the key contemporary and future-oriented
issues as found represented in contemporary practitioner settings and forums.
These diverse sources of insight do not always produce agreement on
what is happening in SHRM and what are the central research issues. But,
from this plurality a number of interesting and important research agendas
can be constructed.
For the first of these, the review of the very latest academic literature,
we consulted the following journals and paid attention to their Call Papers
for Special Issues: Asia Pacific Journal of Human Resource Management,
Human Resource Management Journal, Human Resource Management,
Human Relations, International Journal of Human Relations, Academy
of Management Journal, and the Journal of Chinese Human Resource
Management. We included ‘online-first’ articles i.e., those issued prior to
full publication.
Of interest to note are the topics that had dropped off the radar or which
had received lesser attention than previously. Compared with past times,
there was much less discussion about the nature and role of human resource
management as a function and the erstwhile major theme, if not indeed for
a time the focal theme, of assessing performance outcomes is receiving less
attention, at least for the time being. A significant exception, as we have
noted, is the recent work of Bloom and colleagues (e.g,. Bloom et al. 2012;
Bender et al. 2018) tracking the link between management practices and pro-
ductivity. Notable themes of continuity included High Performance Work
Systems (HPWS), leadership, citizenship behaviour, women and careers,
diversity and inclusion, organizational change, organizational climate, com-
mitment, work and identity, labour-management partnerships, employee
engagement and the psychological contract, HR practices in knowledge
intensive firms, freelance, and temporary and agency work. Emerging with
special emphasis are workforce analytics and attention to human resource
management in times of crises and disruption. Hence, corruption, risk,
terrorism, and management in contexts of high uncertainty, violence, eco-
nomic crises, and natural disasters all now find a presence. Indicative also
of shifts in focus is that whereas in the 1990s Harvard University Press was
publishing books such as Jeffrey Pfeffer’s Competitive Advantage Through
People (Pfeffer 1994), its 2018 catalogue for Economics and Business has
numerous books on globalization and inequality (e.g., Alvaredo et al. 2018;
Atkins 2018; Helpman 2018; Milanovic 2018; Piore and Schrank 2018).
Each of these follows on from Thomas Pikkety’s 2014 best seller Capital
86 A stock-take and a forward view
in the Twenty First Century, a book that captured the zeitgeist and was the
Financial Times’ and McKinsey Consultancy’s Book of the Year. Each of
these suggests a revised interest in more macro and structural analyses of
work and employment issues.
So, an overall observation that characterises change over time would be
that the efforts to clarify the meaning and purpose of HR has faded; the
theme of trying to measure performance outcomes is not so central as it once
was but, in various forms, continues to attract attention. There is extensive
speculation about the potential impact of automation and artificial intel-
ligence as these technologies spread across more and more occupational
categories, but these concerns have seemingly not yet been evidenced in the
mainstream HR journals. From these journals it is difficult to see any new
themes which are assuming a position of dominance. That said, it is impor-
tant to note that the list of journals we consulted was inevitably partial. A
much wider range of current issues is covered in journals such as Industrial
& Labor Relations Review and Organization Studies, each of which tackles
wider economic and social trends rather more than human resource manage-
ment practice directly. Likewise, big-picture issues, as reported in earlier
chapters, are found reflected in a number of research monographs. For
example, the review of precarious work in six advanced economies by Arne
Kalleberg highlighted the significant fact that while precarious work was
characteristic of virtually all societies historically, the recent growth of this
form of employment after decades of social progress represents a momen-
tous reversal of trends in the management of work (Kalleberg 2018). Few
studies nowadays report the kind of diffusion of SHRM policies and prac-
tices of the kind found some decades ago. As Kalleberg notes, it is all too
easy to paint a dystopian future for work; the key lesson is to seek ways to
shape positive work design of the kind described by Osterman with regard
to care workers (Osterman 2017). This is a key agenda item for human
resource managers of the future.
Our second source, the think-tank and government sponsored reports,
present yet another, and rather different, perspective on contemporary
HR-related topics. An important example from the UK is the report Good
Work: The Taylor Review of Modern Working Practices (Taylor 2018).
This is the report of the independent review of employment practices in the
modern economy commissioned by the Prime Minister. We referred to this
publication in Chapter 5. As we saw, the report notes the historically high
levels of participation in the labour market and observes that the UK has one
of the most flexible labour markets in the world. It records a notable shift
towards more flexible forms of working, yet full-time, permanent work still
constitutes the majority of employment in the UK (63.0%). The review finds
that flexible work benefits some people and that it helps maintain high levels
A stock-take and a forward view 87
of employment. But it does not work for everyone and the report records
many problems stemming from poor employment practices associated with
precarious work and the gig economy (Taylor 2018, p. 27).
Further valuable insights can be gleaned from a series of systematic stud-
ies of trends in skills and skill requirements in the UK undertaken since
1980s in seven rounds of surveys and reports (Henseke et al. 2018). The
most recent one indicates that the assumption of an overall growing demand
for higher skills in jobs throughout the economy may be exaggerated.
Government policy has focused on the supply side of skills, but the most
recent survey shows that there is a lack of evidence of a growing overall
skills gap and indeed it shows a dip in demand (Henseke et al. 2018). A
similar pattern is reported in Canada (Beaudry et al. 2016).
Public policy and labour law have been behind the curve in relation to
these developments in most countries. In Canada, the Ministry of Labour
for Ontario commissioned a Changing Workplaces Review to respond to the
secular shift towards precarious work. This initiative stemmed from a con-
cern that existing labour laws were not adequate for dealing with the new
fragmented and precarious employment landscape (Mitchell and Murray
2017). The report offered tentative suggestions and indicated the need to
approach new forms of regulation with some caution.
The sources found by looking through the third window into contem-
porary and future-oriented themes, i.e., the practitioner-oriented magazines
(such as Harvard Business Review and HR Magazine), tend to portray a
more positive and optimistic picture. For example, HR Magazine in its 2018
issues covered topics such as creating loyalty among employees, HR’s role
in helping risk management to evolve so that it is more agile, and it published
short case studies on making organizations inspiring places to work, using
HR to underpin effective leadership. The magazine did express some con-
cern about a number of developments, however. These included excessive
executive pay (though with doubts about the need for government regula-
tion), concern about automation and its effects on jobs, diversity and equal
opportunity, and, as a response to the many evident failures and scandals,
a plea for improved corporate governance. The Harvard Business Review
has, in the past, published some significant articles that have shaped the
HR debate – notably, for example, the landmark article ‘From Control to
Commitment’ (Walton 1985). But recent issues of this journal have devoted
less space to mainstream HR topics of a policy nature and shifted instead to
more practical people-management tactical concerns.
Fourth and finally, a different perspective on the present and the future
can be gleaned by drawing on a different well-spring: that is, interpretations
from the practitioner interface. From our various engagements with senior
managers in a wide range of industry sectors and country settings we are
88 A stock-take and a forward view
able to construct a picture of the kind of issues which occupy the concerns
of contemporary practitioners.
As noted in earlier chapters of this book, context matters a great deal.
Accordingly, emergent themes and issues are likely to be situationally-
related. Patrick Wright, as part of his direct engagement with senior
practitioners, has observed that in a number of leading corporations in the
United States, a notable development is the changing expectations placed
on the leaders of the HR function. In the US, these leaders are increasingly
termed the Chief HR Officer (CHRO). Whereas previously CHROs only
sometimes directly reported to the Chief Executive Officer (CEO), and only
rarely dealt with the wider board of directors, today they tend almost always
to report directly to the CEO and they also frequently interact with other
directors on the board. This trend has been driven by three factors. First,
the ‘War for Talent’ placed human capital on the radar screen of CEOs, and
they have consequently demanded that the CHRO oversee the delivery of
talent to the firm. Second, numerous corporate scandals focused the atten-
tion of directors on the remuneration packages of their CEO and how these
might drive dysfunctional decision-making. Thus, boards increasingly rely
on the CHRO as the interface between them and the CEO in the process of
setting pay. Third, some high profile failures of CEOs have caused board
members to recognize CEO succession as one of their most important gov-
ernance responsibilities. Increasingly, Chief HR Officers act as the liaison
among the board members, the incumbent CEO, and the potential CEO can-
didates. All of these factors have increased both the visibility and importance
of the CHRO. Research agendas for the future in this regard thus relate to
the variety of ways in which CHROs are playing this more critical role, what
competencies are required, and what difference they are making.
Paradoxically, a significant current theme in many contexts is how occu-
pants of senior HR positions are perceiving and responding to the many
cost-saving pressures catalogued in this book. Despite the many reversals
from high road practices and towards low road practices that have been
noted, there has been a surprising paucity of investigations tracking the part
played by the HR function in these processes. High profile spokespersons
for the profession tend not to talk openly about the pressures they and their
colleagues face; and academic researchers have, in the main, not yet got
around to shedding light on these matters.
Another window into current and future issues is offered by the work
of Ulrich and his colleagues. From their many workshops with senior HR
practitioners from leading firms, it is possible to identify a number of sali-
ent topics which are currently attracting their attention. One of these is how
an ‘outside-in’ perspective (i.e., a responsiveness to external stakeholder
expectations) reshapes priorities. In so far as this emerges, the strategic
A stock-take and a forward view 89
nature of HRM would be further enhanced. Relatedly, Ulrich suggests that
the ‘right’ leadership competencies are not defined by looking backwards at
previously successful leaders, but looking forward to customer and investor
expectations. Leadership capital, he suggests, ties leadership competencies
to customer and investor value. Additional future-oriented themes identi-
fied through this source include a broader HR agenda extending beyond
the nurturing of individual talent to include much more attention to aspects
of organizational capability; encouraging forms of leadership which can
navigate paradox; and using HR analytics and information to improve
HR value contribution. Aspects of these concerns from the practitioner
interface can be found in Brockbank et al. (2018). The Ulrich workshops
suggest that a digital business strategy requires a strong business case for
digital, a team to shape and deliver strategy, the identification of clear out-
comes, an assessment of a current state, and plans to implement the future
state. HR can contribute, he suggests, to each of these business strategy
steps. He maintains too that technology will create increased efficiency
and innovation in HR work. Apps, platforms, and systems will increasingly
be used for HR work. Ulrich and colleagues maintain that a current risk,
and a possible liability of technology, is social isolation and hence sug-
gest that HR should explore ways to use technology to connect employees
to each other and to the firm. Finally, an overall theme from these recent
workshops is how to anticipate and prepare for ever increasing forms and
degrees of uncertainty.