Advances in Developing Human Resources 2007 Garavan 11 30
Advances in Developing Human Resources 2007 Garavan 11 30
Advances in Developing Human Resources 2007 Garavan 11 30
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What is This?
The resource-based view of the firm postulates that internal knowledge and skill represent important sources of competitive advantage (Hendry & Pettigrew, 1990; Leonard-Barton, 1995). Human capital theory argues that firms should protect core competencies through investment in training and development (Lepak & Snell, 1999). Therefore, the value of employees to the firm is related to the uniqueness and value of their capabilities and skills. Competitive advantage is secured when organizations have skills and capabilities that are unique, difficult to replicate and imitate by competitors (Rainbird, 1995). The main premise of this article is the notion that human resource development (HRD) is best achieved through a strategic approach, a position consistent with resource-based and human capital theories. Strategic human resource development (SHRD) contributes to the creation of firm-specific knowledge and skill when it is aligned with the strategic goals of the organization. SHRD enables an organization to combine different knowledge elements, connect prior and new knowledge, and combine internal and external knowledge, to ensure sustained competitive advantage (Davenport, Prusak & Wilson, 2003; Pfeffer, 1994). SHRD is a multi-level concept whose contribution to the organization is to enhance its performance in the long-term. HRD ensures, as Yorks articulates, that
Advances in Developing Human Resources Vol. 9, No. 1 February 2007 11-30 DOI: 10.1177/1523422306294492 Copyright 2007 Sage Publications
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organizational members have access to resources for developing their capacity for performance and for making meaning of their experience in the context of the organizations strategic needs and the requirements of their jobs (Yorks, 2004, p.11)
This article proposes a multi-level model of SHRD. It first discusses the characteristics of SHRD and explains its implications for organizational practice. It describes and evaluates this model and identifies its implications for both research and practice.
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TABLE 1:
Key Assumptions of Strategic Human Resource Development Implications Implications for Practice
Assumptions
Existing overarching mission statement specifying organizational commitment to learning; HRD initiatives are linked and supported by organizational policies, systems, and resource provision
Mission statement shapes organizational vision, corporate strategy, organizational plans, and HRD vision Linking the mission to planned learning experiences through HRD ensures that if the value of HRD is questioned, the value of the organization is also questioned Emphasizes the proactive long-term nature of strategic HRD
Strategic HRD interventions need to be planned and conscious; unplanned and functional experiences cannot be strategic unless explicitly linked to strategy HRD needs to be linked to human resource management systems and collaborative careerplanning processes The organization should implement systems which facilitate periodic review and/or revision of the organizations mission statement and as a result, corporate HRD strategies and policies HRD needs holisticand systematicplanning processes HRD specialists should understand the implications of context internal and external and factor these into their plans
Environmental planning and scanning by senior management is timely, accurate, and realistic and interpreted in terms of implications for learning
HRD plans and policies flow form the organizations strategic plan which is influenced heavily by the process of environmental scanning Ensures that HRD plans and policies are timely, accurate, and realistic to facilitate achievement of the strategic priorities of the organization
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TABLE 1
(continued)
holistic in nature and integrated with the corporate plan as well as emergent and planned HRM processes
achievement of clearly articulated organizational goals and are enhanced by the identification of linkages and information-sharing inherent in the planning process HRD is supported by complementary HRM activities for example HRD implications arising from human resources plans and forecasts are considered
into strategic processes and capture emergent processes HRD specialists should strive to align HRD strategies and activities with the wider policy framework Mechanisms need to be put in place which enable the HRD specialist to participate in corporate strategy sessions with other managers HRD specialists need to articulate a HRD mission statement and statement of values HRD specialist needs to consider the extent and depth of expertise to implement solutions to achieve corporate strategy
All major strategic plans are weighted in terms of human skills available to implement them and specify alternative ways to obtain these skills
HRD is not a panacea providing solutions for all problems. It is an appropriate solution to knowledge, skills and attitude issues The where and how of obtaining the skills required are considered at the outset of policy formation and planning processes
Employees have a responsibility to evaluate their own skills and development needs HRD specialists need sophisticated mechanisms to understand organizational and individual level learning needs HRD specialists should be concerned to use training and development resources in an effective manner
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Outcomes of HRD produce added-value for the organization and are enhanced by a recognition of the role of cultural fit
Integration of organizational and work processes across units and the sharing of knowledge across boundaries Learning is perceived as a core strategic competency for the organization The emphasis is on evaluation of the suitability, feasibility, and acceptability of HRD policies, plans, and practices Organization culture is supportive of feedback, open communications, participation, and continuous learning in particular
Effective evaluation processes including cost-benefit analysis need to be introduced HRD specialist needs to be clear on the criteria to be used when evaluating the effectiveness of HRD
People at all organizational levels share responsibility and accountability for learning activities Senior management actively support learning and the HRD specialist works in partnership with line management and the HR function HRD is a core element of the performance expectations of line management
Planned learning is considered an essential component of every employees job An organizational culture of continuous learning permeates throughout the organization and provides a positive climate for HRD Line management are best placed to assess learning needs Line management have a legitimate input to HRD plans and policies facilitating systematic identification of HRD needs
Line manager commitment and involvement is critical to successful SHRD HRD specialist needs to develop mechanisms that facilitate regular networking with members of the organization Need to ensure clear definitions of roles, responsibilities, and policies How can the HRD specialist engage with and involve the top team in the formulation of HRD strategies and policies? (continued)
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TABLE 1
(continued)
Ensures commitment to, responsibility for, and ownership of HRD activities Managers, supervisors, and employees are evaluated on the degree to which they simultaneously develop themselves and others Reward and career progression decisions are contingent on the extent to which development criteria are satisfied
Individuals should have responsibility for the development of others Responsibility for development should be incorporated into performance management processes Effective HRD specialists should adopt strategic partner type roles
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FIGURE 1: Contextual and Dynamic Framework for SHRD Source: Developed from ideas presented by Jackson and Schuler (2003 a, b), Way and Johnson (2005), Espedal (2005), Gilley and Maycunich-Gilley (2002), and Ulrich (1996).
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sets of conditions, local, national, and multinational. Examples of such conditions include economic and political trends, technology change, labor market characteristics, national and cross-cultural differences, and international laws and regulations. The model specifically highlights the role of national HRD systems in influencing strategic HRD. McLean and McLean (2001) suggest that particular aspects of national HRD systems or relevance include qualification systems, funding mechanisms, stakeholder roles, national HRD policies, and approaches to curriculum development. Characteristics of the global environment create uncertainty for the organization. To understand the impact of these conditions, HRD professionals engage in continuous environmental scanning and develop an understanding of how elements of the external environment affect the bundle of SHRD practices appropriate to the firm. Pfeiffer (1998) posits that HRD professionals who achieve a deep understanding of business issues and their implications for SHRD are likely to increase its value to the firm and their ability to implement practices that contribute to the firms capacity to manage the external environment. A key condition for the development of a coherent set of SHRD systems, policies, and practice is an understanding of the global environmental context.
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firms adopt SHRD practices that focus on organization-wide change and implement HRD practices such as management and leadership development, organizational change, career planning and development, organizational development, and knowledge management. The acquisition, development, and sustainment of managerial talent are key preoccupations of innovative firms (Mueller, 1996). Innovator firms frequently look externally for top class talent to secure the cutting edge competencies needed for technological innovation (Hambrick, 2003).
Organization Structure The firms organization structure is an important element of internal context. A key dimension of the firms structure focuses on whether it is domestic or global. Firms with domestic structures have more choice in respect of SHRD practices, however they tend to have less sophisticated practices and systems than firms with global structures. Global firms adopt more corporatewide approaches, and individual divisions or units frequently have less choice in respect of the types of SHRD practices implemented. Another characteristic of structure concerns alignment. Semler (1997) defines structural alignment as the level of congruence between the processes of the organization and the context in which SHRD practices elicit behaviors in line with these processes. Vertical structural alignment is achieved when the goals, objectives, and strategies of various organizational processes are congruent with each other. Horizontal alignment focuses on the extent to which SHRD practices elicit appropriate behaviors necessary to achieve organizational goals. SHRD contributes to horizontal alignment through skills training, retraining, empowerment, and management development. Way (2002) suggests that SHRD contributes to motivation and commitment processes which ensure that employees produce appropriate behaviors that support strategy.
Firm Culture The firms culture provides direction concerning the development of integrated and coherent SHRD systems. Pfeiffer (1994), for example, suggests that vision and values serve as touchstones that HRD professionals and other stakeholders use to evaluate the internal consistency of SHRD practices. Truss and Gratton (1994) define cultural alignment as the extent to which SHRD contributes to an organizational culture that supports organizational strategies, goals, and objectives. Vertical alignment focuses on the extent to which beliefs and values support organizational goals. Horizontal alignment emphasizes the degree of congruence between the organizations culture and climate (Schneider, Brief & Guzzo, 1996). Climate refers to day-to-day perceptions of morale. SHRD contributes to horizontal alignment (Jackson & Schuler, 2003a), through addressing employee expectations and demands for learning.
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Leadership Leadership is key to implementing vision and values and developing culture. Leaders set the agenda for the organization and confer legitimacy on SHRD activities. The influence of firm leadership is often manifested in HRD professionals being concerned with showing bottom-line results and adopting business partner roles. Organizational leaders increasingly demand HRD effectiveness and expect a contribution to a number of areas including the maximization of profitability, enhancement of human capital, the creation of employee commitment and loyalty, a contribution to organizational sustainability and continuity, and the establishment of fit between overall business strategy and HRD strategies. Collins and Clark (2003) demonstrate that SHRD enhances firm performance because it encourages leaders to build internal and external social networks that they leverage to enhance the financial bottom line.
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not of a specific job, or a specific employer, but of their employability. She suggests that employees require a number of skills to manage a career including a willingness to keep learning, a belief in self rather than in the power of a position alone, the ability to collaborate and become connected with new teams in various ways, and a commitment to the intrinsic excitement of achievement on a particular project that can show results. The research evidence concerning how firms respond to employability is limited and contradictory. Martin, Staines, and Pate (1998) found that although the firm talked up HRD, it was delivered in firm-specific areas and did not provide the type of competencies and skills employees regarded as necessary to secure their future. The firm rhetoric was not matched with appropriate SHRD practices. Hendry and Jenkins (1997) highlight the significance of psychological contracting and the extent to which individuals may impose a deal. These various deals have implications for the types of SHRD activities that are expected by employees and provided by the firm.
SHRD Focus
Espedal (2005) and March (1991) suggest that firms need to implement a mix of practices that focus on exploitation and exploration. Efficiency or exploitation-focused SHRD practices tend to be short-term and focus on the internal development of competencies. SHRD can be used to refine firmspecific capabilities and skills and includes practices such as socialization, skills training, and performance management. SHRD should also contribute to adaptive capability. This represents an exploration focus. It is achieved through the adoption of change-focused SHRD strategies. They emphasize tacit learning and knowledge-management initiatives and include learning from experience and the facilitation of experimentation and risk taking. Another dimension of SHRD focus concerns the degree to which its activities are horizontally integrated with SHRM activities. Jackson and Schuler (2003) suggest that synergies can be achieved when bundles of HRD and HRM practices are horizontally aligned and they contribute to a defined set of behaviors and performance expectations. Guest and Peccei (2006) suggest that in addition to horizontal integration it is important to have functional and process integration. Functional integration emphasizes the need to have a high quality
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HRD department to ensure high SHRD impact. It focuses on both the quality of specialists and their location within the organization. Process integration focuses on the delivery processes used by the organization; their quality and level of customer focus.
SHRD Orientation
The increased assignment of HRD activities to line managers and the tendency toward decentralization indicate a changed role for HRD professionals. Schuler and Jackson (1992) suggest that HRD professionals will be involved in linking HRD issues with challenges to the business, shaping of the strategic direction of the firm, developing innovative solutions and approaches to enhance organizational effectiveness, and enabling line management to ensure that things happen. Ulrich (1996) suggests that HR professionals could adapt up to four possible orientations. HRD professionals frequently adopt a traditional orientation and implement transactional HRD practices such as induction, skills training, and management training. These activities are designed to achieve efficient performance. HRD professionals frequently adopt an employee perspective and implement activities designed to enhance the competence and commitment of employees. Both orientations are operational in focus and are less likely to be performed by a strategic HRD function. A strategic approach is indicative of strategic partnership and organizational change agent orientations. A strategic partnership orientation requires the HRD professional to translate strategic priorities into SHRD priorities and activities. An organizational change orientation requires the HRD professional to engage in activities that enable the organization to be ready for major change to respond to environmental uncertainty. Ulrich (1996) anticipates that HRD professionals can demonstrate all four orientations, however the evidence suggests that HRD professionals will have a dominant orientation (Garavan, Collins, & Brady 2003). The orientation of HRD professionals will impact the types of activities undertaken, the way they are delivered and evaluated. Lepak, Bartol, and Erhardt (2005) speculate that HRD professionals with employee champion and traditional orientations, engage in transactional HRD activities such as induction training, skills training, and competency profiling. In contrast, activities associated with strategic partner and organizational change orientations are more long term, transformational, and strategic in focus.
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Transactional
Programme Nomination Processes Skills Training
Traditional
Individual Development Plans Managerial Training
Transformational
Strategic Business Partner Knowledge Management
Learning by Doing
Communities Of Practices
Figure 2: Categorization of SHRD Activities Source: Based on ideas presented by Carrig (1997); Lepak, Bartol, and Erhardt (2005); Gilley and Maycunich-Gilley (2002).
include skills training, job analysis and competency modeling, management and leadership development. DuGay, Saleman, and Rees (1996) found support for the use of competency frameworks in organizations. Managers welcomed the fact that HRD professionals sought to identify what qualities managers and employees should possess to perform effectively. In one study, HRD professionals were twice as likely to rate management development as having a strong organizational impact when fast track development was used (Thomson, Mabey, Storey, Gray, & Iles, 2001). The organizational learning domain focuses on activities designed to facilitate organizational learning. These activities include critical reflection, action learning, tacit learning, and knowledge sharing. The capacity of SHRD to focus on organizational learning activities is dependent on its capacity to foster a climate of openness with accessibility of information and involvement of individuals at all levels of the organization. The organizational change domain focuses on organizational change, including change of different intensities and levels. These activities may include career planning and management, cultural change, empowerment, talent and succession
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management, and feedback systems. Baruch and Peiperl (1997) found that these activities were highly correlated with firms described as dynamic, open, and proactive. Other possible categorizations of HRD activities exist. Lepak, Bartol and Erhardt (2005) propose three domains of potential HRD activity: transactional, traditional, and transformational. Figure 2 uses this framework to categorize SHRD activities in organizations. This framework suggests that Gilley and Maycunich-Gilleys (2002) organizational performance category fits comfortably into the traditional category, whereas their two other domains fall into the transformational category. Transactional HRD activities are of little value strategically. They do little to support the strategic goals of the organization. The line between traditional and transformational practices depends on the manner in which SHRD practices are used.
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employees are engaged and developed to a high level and use these criteria as key measures of SHRD effectiveness (Boudreau, 2003). Other important internal customers include line managers and the HR function. Line managers are increasingly given key responsibilities for the delivery of SHRD (Morley & Heraty, 1997). Line managers play a multiplicity of roles including working with HRD professionals to design and implement aspects of SHRD and share responsibility for managing HRD. The effectiveness of SHRD is increasingly evaluated by showing its impact on customers and suppliers. Schneider and White (2004) highlight that effective SHRD practices impact on the quality and variety of products available to customers as well as the service-level attained. They found that customer expectations are increasingly incorporated into HRD plans, needs identification processes and quality training initiatives. Garavan, Collins, and Brady (2003) found that suppliers impact the types of HRD that organizations undertake through development of various forms of supplier agreements.
HRD Professionals
I include HRD professionals as a key component of the model. They are both influenced by and influence the context, the nature of stakeholder satisfactions, and the characteristics of HRD within the organization. The values, competencies, credibility, and integrity of the professional will determine whether they are part of the dominant coalition and are therefore in a position to make HRD more strategic. Particular attributes of professionals highlighted in the literature include their personal values and beliefs about learning, human ability, control, and empowerment. These will shape how the specialist responds to organizational issues and the types of learning strategies that are utilized. The competencies that the HRD professional possesses will impact the orientation they adopt, their confidence to adopt strategic partner roles, and contribute to both the formulation and implementation of business strategy. It is also important to emphasize the personal integrity of the specialist and his/her perceived credibility within the organization. Personal integrity and ethics will impact the effectiveness of the specialist and may be important in terms of securing resources. I have also included partnership as a particular dimension. This refers to the extent to which the specialist values collaboration and networking with internal and external stakeholders.
Conclusions
This article explored how the concept of SHRD has evolved in the literature. I defined SHRD as a coherent, vertically aligned and horizontally integrated set of learning and development activities which contribute to the achievement of strategic goals. I emphasized that SHRD is best understood as a multi-level concept that is dynamic in nature and enables the firm to achieve
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both efficiency and adaptiveness. SHRD focuses on both traditional and transformational activities. HRD professionals strive to implement activities that are focused on both exploitation and exploration. The proposed model is consistent with contemporary debates within strategic management, stakeholder theory and open systems theory. The model adopts an open-system approach and allows consideration of numerous factors that are simultaneously at play in firms. The criteria used to evaluate the effectiveness of SHRD will vary by stakeholder and firm. It is important, to consider the perceived effectiveness, importance, and satisfaction of all stakeholders. I acknowledge that many of the outcomes specified in the model are perceptual, however the inclusion of multiple stakeholder perspectives helps alleviate concerns about perceptual measures. SHRD is concerned with satisfying the different expectations of stakeholders. It facilitates the organization in creating the conditions where strategic objectives and resulting performance can be realized.
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empirically examine the relationship between SHRD and firm outcomes by focusing on specific HRD practices within the firm and explaining how these practices impact outcomes. It is important that studies of the impact of SHRD consider the impact of context.
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