Strategic human resource management: what does it mean in practice?

Personnel management has evolved into human resource management (HRM) and more recently into strategic HRM (SHRM). This incremental transformation is easily discernible in scholarly literature but much less is known about the extent to which it has been mirrored in management practices in organisations. This is an ex post facto study of the extent to which the behaviour of senior managers in two large Australian construction companies is consistent with either the prescriptions of one or more of the conflicting strands of SHRM scholarship or with the theories that underpin them.Three specific research questions are posited in the thesis:1. To what extent are managers adopting and implementing some version of ‘fit’ in implementing SHRM?2. To what extent are senior managers attempting to use SHRM to obtain a competitive advantage?3. To what extent are the HRM practices implemented by senior managers consistent with the resource-based view of strategy (RBV)?Following a review of the literature, several propositions were developed that could then be the subject of empirical investigation. Those propositions were as follows:1: Senior managers who adopt a ‘best practice’ conception of SHRM will try to implement HRM practices based on a universal model derived from external sources.2: Senior managers who adopt a ‘contingent’ conception of SHRM will have a procedure in place whereby HRM practices are intended to be deliberately aligned with a broader organisational strategy.3a: Managers will try to acquire any valuable resources that they perceive are being used by competitors as a source of competitive advantage.3b: If valuable resources that are providing an advantage to competitors cannot be acquired, managers will try to imitate the resource or find a substitute that provides an equivalent advantage.4: To the extent that any senior management resources are devoted to HRM, they will focus on valuable resources that competitors will find difficult or impossible to imitate and for which no substitute is easily available.5: Management’s attempts to create organisational culture or complex capabilities as valuable resources are likely to be tentative and accompanied by unintended consequences.Following the research design recommended by Yin (2003), these propositions served as the framework for a case study. Two large Australian construction firms were chosen as the units of analysis for the study. Data was collected using a variety of methods, allowing triangulation to improve validity and reliability. The information was then analysed both within each case and between the cases.Senior managers in neither case organisation had adopted a best practice conception of SHRM. While some individual HRM functions in both firms had been designed to complement overall corporate objectives, indicating limited adoption of a contingent approach to HRM, there was no acceptance by either group of managers that SHRM was a potential source of competitive advantage.The findings offered useful insights into the RBV. Managers in the study did not act n accordance with some of the assumptions that underpin the RBV, or did so only to a limited extent. They were concerned with developing valuable resources as an end in itself without extensive investigations of the resources that might be available to competitors. Both groups of managers placed great importance on organisational culture as a potential source of competitive advantage but whereas one firm’s managers had developed measures to try to manage this culture, the other’s had not.Both scholars and practitioners will benefit from the findings. The assumptions underpinning the RBV can be modified to make it more useful as a framework for understanding organisational behaviour. Greater attention can be given to examining the empirical basis justifying either the best practice or the contingent model of SHRM. Finally, members of the HRM profession can review the ‘strategic’ contribution they can make to organisations and place greater emphasis on the importance of first identifying and then nurturing the internal human resources that allow an organisation to do certain things better than its competitors.