Lecture 11 SHRM Fit

SHRM fit

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Introduction Horizontal fit and vertical fit Individual, functional and organizational level factors facilitating the “fit” HR function related practices. Firm level factors that influence horizontal fit and vertical fit.

HRM/ SHRM/ SHRM FIT ? 1/4 Traditional HRM functions •

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Recruitment, Selection, Performance appraisal, Training and development  dministration of compensation and !enefits.

HRM/ SHRM/ SHRM FIT ? 2/4 SHRM •

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  strategic approach to manage human resources of an organization. Still considered a relativel" #ne$% concept &despite three decades of development &'()'* . +o consensus "et on the eact definition of SHR-. Ho$ever !road agreement eists on SHR- !asic functions.

HRM/ SHRM/ SHRM FIT ? 3/4 Basic functions of SHRM •

Combines HRM functions with business strategy  –

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/esigning and implementing a set of internall" consistent policies and practices. 0nsure that human capital of a firm contri!utes to the achievement of its !usiness o!1ectives (Understanding Human Resource Management in the Context of Organizations and their Environments S. Jackson  R . Schu!er "##

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Helps the organization gain a competitive advantage and achieve organizational goals.

HRM/ SHRM/ SHRM FIT ? 4/4 SHRM “FIT” •

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The interactive role of HR- practices and their relationship $ith the organizational strateg".  ppropriate analog" of HR- and !usiness strateg" is the SHR- “fit” (Strategic Management and HRM &right  McMahan "##'%

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Fit indicates the utilization of human resources to help $ith the achievement of organizational goals.

Two types of Fit ! Hori"ontal fit •

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Similarit" of various HR- practices &2aird 3 -eshoulam '())*   critical step to$ard attaining the organizational goals through initiating some human resource activities that are associated $ith firm o!1ectives. 4oordinates a variet" of human resource practices.

#! $ertical fit! •

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%lignment of HR- practice $ith the strategic management process of the firm &Schuler 3 5ac6son '()7*. 0ssential $hile ma6ing good use of HR- resources. It related $ith the compati!ilit" !et$een the HR practice pac6age and strateg" of the firm.

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2oth t"pes of fit contri!ute to competitiveness of a firm so it is important to arrange a variet" of HR practices in a s"stematic $a". Scholars argue that Resource !ased vie$ &R28* of the firm HR s"stems aligned $ith its strateg" helps create competitive advantage ( resource)*ased a++roach to  +erformance and com+etition ,arne- "#/0 "##"% . Basic assum&tion under RB$  –

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Resource heterogeneit" &i.e., resources that different firms o$n are unli6el" to !e easil" imitated !" other firms*. These resources must !e &'* 8alua!le, &9* Rare, &:* Inimita!le, and &;* +on