Industrial_Relation

Strategic Human Resource Management – Integrating Universalistic, Contingent, Configurational & Contextual perspectives. Purpose: After strategic human resource management’s inception at the end of 1970s, several numbers of models & explanations proposed grew exponentially, especially after some theoretical revisions presented in the 1990s. The objective of this paper is to analyze the evolution & current state of the art in the field of SHRM research. To do this researcher classifies literature theoretically into four generic perspectives & try to make a conclusion that despite the differences among the universalistic, contingent , configurational & contextual approach it is possible to make their contributions compatible balancing their limitations. The Universalistic Perspective: The universalistic perspective is the simplest approach to the analysis of human resource management strategies. It starts, in all its explanations and prescriptions, from the premise of the existence of a linear relationship between variables that can be extended to the entire population. Linear relationship means a reactive approach so we can say that it is a traditional view. Researchers can, therefore, identify best human resource management practices that are characterized by: (1) having demonstrated capacity to improve organizational performance and (2) having to be generalizable. Regarding the level of analysis, universalistic models have focused mainly on a subfunctional point of view, analysing how certain isolated HR policies are linked to organizational performance. In other cases, they analyze more than one best practice, defining what have been called high performance work systems. The universalistic perspective does not study either the synergic interdependence or the integration of practices, and the contribution of these practices to performance is analyzed only from an additive point of view. As a result, this view implicitly denies that the different elements that build the system could be combined in different patterns of practices that could be equally efficient for the organization. At first sight, we can observe that this perspective focuses mainly on certain practices oriented to reinforce employees’ abilities, for example, variable compensation, certain methods of recruitment and selection, comprehensive training or performance appraisal. On the other hand, interest has recently shifted towards aspects much more related to commitment and participation of the workforce, consensus in problem solving, teamwork and work incentives, job redesign or the establishment of new mechanisms of compensation. The Contingency perspective: The contingent model introduces a different starting assumption in relation to what the relationship between variables means. Contrary to the linearity argued by the universalists, they propose a model based on interactivity, bringing to the HRM context the generic contingent model. The relationship between the dependent and the independent variable will no longer be stable, and it will vary depending on other third variables, named contingency variables. Those factors moderate the link between human resource management and performance and, therefore, deny the existence of best practices that could lead to superior performance under any circumstance. Despite the heterogeneity of approaches, we can group the contingency relationships proposed by the literature into three generic categories: (1) strategic variables: a significant group of the contingent papers explains that the contribution of HR practices to performance depends directly on the extent to which they fit the business strategy. Furthermore, other contingency models also introduce the influence of HR on organizational strategies. In this sense, the human resource management strategy is considered in an interactive way, not in a unidirectional or reactive manner. (2) organizational variables, such as size, technology or structure), internal political relationships; and (3) a broad set of environmental factors, external to the organization, such as the competitive, technological, macro-economical and labor context. Basically, two theoretical frameworks have fostered the development of contingency models: behavioral theory and the resources and capabilities view of the firm. As far as the first theory is concerned, many contingency propositions have been proposed regarding the fit between business strategy and human resource management strategy, as well as other organizational and environmental variables. On the other hand, the resources and capabilities view has not only been used to analyze strategic fit, but also to introduce the reciprocal relationship between human aspects and the formulation of organizational strategies. Its rare, valuable and inimitable character makes it a strategic asset, and a central element of strategic management. The configurational perspective: The configurational perspective contributes to the explanation of SHRM with a useful insight about the internal aspects of the function, by means of the analysis of the synergic integration of the elements that build it. In this sense, the HRM system is defined as a multidimensional set of elements that can be combined in different ways to obtain an infinite number of possible configurations. From among them, researchers can extract management patterns that represent different ideal possibilities for managing human resources. Thus, the system must not only be consistent with the environmental and organizational conditions, but also internally coherent. A shift of approach concerning the link between the variables involved in SHRM lies under this new perspective. One of its main contributions relies on the assumption that the relationship between the configurational patterns and organizational performance is not linear, since the interdependence of practices multiplies (or divides) the combined effect. Thus, the ‘black box’ of the universalistic and contingency models is opened, so that the HR function can be analyzed as a complex and interactive system. Although configurational models acknowledge the importance of contingency models, they are defined under the principle of equifinality, which entails the possibility of achieving the same business goals with different combinations of policies that may be equally efficient for the organization, and also by rejecting the universalistic objective of definitively finding best practices. The Contextual perspective: The contextual perspective proposes an important shift in the point of view of the analysis of SHRM. Unlike the previous approaches, it introduces a descriptive and global explanation through a broader model, applicable to different environments encompassing the particularities of all geographical and industrial contexts. In this sense, the main contribution of the contextual approach lies in the reconsideration of the relationship between the SHRM system and its context. The change of perspective proposed by the contextual model becomes apparent basically in the reconsideration of three aspects of SHRM: the nature of human resources, the level of analysis and the actors implied in this organizational function. The extension of the model that reconsiders the importance of environmental factors by including variables that have been traditionally underestimated, such as the influence of public administrations or trade unions or the incidence of social and institutional conditioning. This reconsideration of the nature of human resources also influences the position of this function within the firm. In this sense, describe a function that is no longer the exclusive responsibility of personnel specialists, but is extended to the rest of managers, especially at the line level. Regarding the level of analysis, contrary to the organizational, and sometimes functional or sub-functional level in the previous literature, the contextual approach proposes a much broader scope, integrating the human resource management system in the environment in which it is developed. Toward an integrative approach: Integrative model construction started by acknowledging this causal relationship, developed by many universalistic scholars, and introduces the concept of human capital. As was said before, this research perspective relied heavily on the human capital theory, and developed an assumption that has also been adopted by the other perspectives: people are crucial for the organization on account of their knowledge, skills and abilities, which build what has been called human capital. It is necessary to consider other variables that also influence the causal relationship. The contingency literature is especially useful to introduce these into the model. To do so, we have grouped the variables proposed by the literature into three broad categories: (1) environment, (2) organizational influences and (3) business strategy. These groups of variables influence SHRM, but the relationship is reciprocal. Furthermore, the assumption that the business strategy is conditioned not only by the human resource management system, but also by the human capital pool of the organization. One can conclude that this organizational function consists of three interrelated elements: HR strategy, HR policies and HR practices. The human resource strategy describes the orientation of the company in the management of the human factor, giving cohesion to the set of practices through which it is implemented. On the other hand, practices are limited to more concrete functional areas, whereas policies are placed in an intermediate level because they describe the coordination of two or more practices to achieve objectives, such as employee involvement, security or the improvement of communication channels within the workforce. From the analysis of the literature it follows that there is no consensus about the practices that should be integrated into the human resource system. We consider in our model that the HR system can be divided into the following functional areas: job design, staffing, recruitment and selection, socialization, performance appraisal, motivation, compensation, training and development, and dismissal/retirement management. Obviously, policies and practices depend on the human resource management strategy (which can be explicitly formulated or not), but, also, these activities are closely related. We can argue that the relationships between practices can be: (1) additive: when the effects of the practices are simply summed up; or (2) interactive: when they depend on each other. In turn, interactive relationships can be substitutive (if they lead to the same goal) or synergic (when they multiply or divide the common effect). Drawing on the contextual proposition, two constructs are reconsidered: the external environment and the organizational context. They are defined as frameworks for SHRM, instead of as unidirectional contingency relationships. In this sense, institutional, social or internal pressures will influence the system and, in addition, it can also, to a certain extent, have repercussions for them. Internal framework involves organizational climate & culture, firms size & structure, its productive technology, orientation to innovation, as well as diverse interests of different stakeholders. External framework involves legislative, government, political & institutional context, a certain set of economical factors, cultural differences or the particular condition of labor market, the education & the university system. The effects of the human resource management system take place at three levels: (1) individual level: most of the literature has pointed out the encouragement of those behaviors and attitudes that reinforce organizational performance as a main objective of HR practices but, at the same time, it is necessary to consider that they can also have effects on other individual issues such as satisfaction, commitment or learning ; (2) organizational level: HR decisions also have influence on aspects such as cohesion, adaptability and innovation or problem-solving capabilities, but, roughly speaking, they are designed to reinforce organizational performance and (3): the social level, which refers to the effect of the human resource management system on the external context that frames the organizational activity. We define SHRM as the integrated set of practices, policies and strategies through which organizations manage their human capital that influences and is influenced by the business strategy, the organizational context and the socio-economic context. Both the model and this definition highlight the main dimensions of SHRM: (1) horizontally, SHRM is presented not only as the formulation of a certain HR strategy but as a congruent pattern of activities. The strategy, policies and practices that define this system relate to each other in a synergic way to manage and develop the stock of knowledge, skills and abilities of the organization. In this sense, human capital is considered the object of SHRM. Finally, the effects of the system are considered with regard not only to internal aspects of the organization, but also to the consequences of SHRM decisions on the individual and social level. (2) Vertically: in addition to the classical explanation of the business strategy as a contingency variable, the model considers a contextual framework for SHRM characterized by a certain set of organizational and socioeconomic variables. The bidirectional sense of these relationships lets the model explain the dynamic nature of SHRM. Therefore, this function is conceptualized as an evolving process not only of adaptation, but also of proactive change.