The key characteristics of the classical approach to strategy emphasise a step-by-step sequential flow of decision-making, where strategic decision-making lies at the top. When a strategy emerges it is complete ready to passed down through the layers. The model assumes that the company has a clever leadership team, which can make effective choices, these choices potentially being made in isolation without input from HR.
When a particular path is chosen, it is assumed that any HR implications that arise, such as recruitment and training will be straightforward to manage and that should there need to be a shift in direction, the environment is controllable and culture change will not be difficult. However, by not involving HR in the decision making process, the role of HR may be limited to sorting out problems once they have arisen and by default fire-fighting. The impact of which may be that HR are viewed by management as constraining and negative (Marchington and Wilkinson, 1996).
The role of the HR practitioner in this environment’s primary purpose would be to achieve order, stability and cost control with an emphasis on controlling through process and procedures. The expectations of HR would be to administer the processes to ensure compliance, sticking with the plan, rather than take a forward looking, strategic view of how people practices can enhance the business. When designing work processes there may be a strict separation between management and employees in the planning and execution of work.
HR’s role would be to design jobs to minimise elective behaviour among employees, with precise routines put in place on how and when work was to be performed. Opportunities for employees to make suggestions for technical innovations or process improvements would be either limited or not expected, this would equally apply to the HR Department. The logic behind the design of the work being based on minimal discretion, with routine tasks undertaken in an environment of low trust. When recruiting staff HR would be expected to supply the right number of appropriately trained individuals.
Given that order and regulation are key, recruitment would be based on looking for specific task based skills, rather than competencies such as innovation or individual potential. HR’s input to career development may be limited by an approach where more senior or more rewarding jobs are held for existing employees with which to provide a basis for career development or career expectation. Career progression for individuals may be based on seniority, qualifications or promotion panels rather than effort or particular ability.
This limits the extent to which HR would be able to provide new talent and development opportunities through programmes such as graduate recruitment, this may also limit opportunities for developing practices such as secondment or cross-functional team working. The provision of training would be based on careful systematic and rationally based job descriptions and job specifications. The identification of training needs being a relatively mechanistic process undertaken via job analysis and the identification of measurable behavioural objectives, systematic evaluation and programme planning.
The training provided following this approach may be ‘trainer’ centric rather than based on the style or needs of the learner (Pedler et al, 1997). The aim being to turn out individuals with a specific range of task based skills, rather than looking to develop for future roles. A clear approach to job evaluation enables jobs and tasks to be defined clearly thus helping bring order to pay systems. Job evaluation may be based on the worth of others, with internal hierarchies combined into grades, job classification being reflected in wage differences and the design of salary scales.
The employment relationship being based on exchange, an effort-reward bargain. HR may have little ability to suggest discretionary reward based on extra effort or future potential as the system is not designed for flexibility. Also HR’s ability to use reward as a change lever may be difficult as each group may be concerned to protect their own interest in the system. Given that HR’s role would be to control rather than to create, the demands placed on the HR department may be less and thus require a smaller headcount with an emphasis on administrative skills rather than a strategic view, creativity or innovation.
HR’s Role in a Resource Based Environment A resource based strategy matches a firm’s resources and capabilities to the opportunities that arise in the external environment, central to this is the company’s ability to learn faster and adapt its behaviour more efficiently (Boxall and Purcell, 2003). The assumption made in this model is that the leadership in place can develop a vision of what kind of knowledge is needed. HR in this environment play a key role in the development of people strategy.
The nature of HR’s relationship with management would see HR as the driver of people strategy, working with management to develop HR policies that are designed to reinforce values coupled with incentives that support the creation of new knowledge. This partnership approach helping to build relationships with line managers who would then implement the policies with the support of HR. This includes designing participative policy making opportunities where employees have a chance to contribute to the policies of the organisation, thus not being solely the remit of HR or management (Pedler et al, 1997).
One of the central concepts of the resource based approach centres on determining and managing a company’s capabilities or competencies. A strong emphasis is placed on analysing the company’s skill, these complex skills being grounded in teamwork. HR would be involved in the initial identification of underlying ‘bundles’ of know-how, with a view to developing a knowledge base rather than a product-base (Hamel and Prahalad, 1993, 1994 cited by Boxall and Purcell, 2003). HR would work with management to develop the policies needed to recruit, retain and motivate employees with the relevant skills and aptitudes.
Employee selection being based on an individual’s willingness to learn as well as being highly skilled. Employee incentive and development schemes play a part in the concept of core capability. Structures being designed to enable employees to contribute to the creation of knowledge by being trained in more than one function and regularly participating in cross-functional teams (Grant, 1998). Alongside career paths that are structured for managers, technical specialists and project leaders.
Training would be focused on the individual, using examples that relate clearly back to the work place. HR’s role being to encourage employees to take responsibility for their own learning and development. Appraisals are geared more to learning and development than to reward and punishment, this being reflected in the exploration of an individual’s learning needs as the central focus of career planning and appraisal. HR would take a more creative role, in an environment with greater flexibility there is a need for more flexible and creative rewards.
To cater for different employee needs and performance, alternatives in both monetary and non-monetary rewards would need to be developed. The implementation of flexible working patterns would also allow employees to make different contributions that may be rewarded in a different way. This approach helping to recognise individual differences, not necessarily in terms of pay differentials but more in relation to giving employees as much control as possible over their work and reward to enable a working environment that can reward innovation and contribution (Pedler et al, 1997).
Given that HR’s role would be to design and develop innovative people practices to support a knowledge based environment, the demands placed on the HR department may be greater and the headcount higher. Employee involvement through focus groups, communication and feedback takes time and resource. Equally the HR practitioner in this environment would be expected to demonstrate a strategic view coupled with creativity and innovation.