People Strategy Cycle

The intrinsic problem with HRM is that implementation is based on the premise of too many unknown variables. Employees are unpredictable and cannot be programmed into a mode of thinking that management desires.

However management through the use of creative schemes can solicit the “buy-in” by employees, but then is this just not old practises using a new name? HRM makes the firm’s personal, a profit centre as opposed to a cost centre, and this in turn can lead to exploitive measures on the part of the firm and its management.

On the other hand if the firm is to invest in employees (through training) etc then it also needs to feel assured that those newly developed skills will be used for its benefit and that the employee does not “take off”.

Planning for organizations, jobs, and people usually involves Strategic HRM, HR Planning, and Job Analysis. HR Planning involves the estimation of labour supply and labour demand and the comparison between the two so that the number of employee skills and qualities needed in the near future can be planned. This however is an inaccurate science based on guess work. Many influences are outside the control of an organisation's managers. Government may pass laws. A firm's products and services may be under pressure from international competition. The industry may be in decline. The economy may be in turmoil. Key staff may leave. Responses are however needed to meet these contingencies. The firm has to cope/adapt to opportunities and threats if it is to retain its position and prosper. The success of the HRM plan, will only be as successful as the ongoing monitoring and tweaking.

To enable these concepts, the enhancement of new strategic partnership between the HR and line management is of key importance. Practical tools, procedures and methods of strategic HR management are introduced with particular emphasis on self-managed, proactive, innovation-oriented performance. But such partnerships needs to be monitored and defined, otherwise they will be introduced for the benefit of one party and not the other (shareholder vs. management or management vs. employees), it leads to a dangerous situation where policies are introduced to ensure personal benefit/enrichment. HRM strategy can also be difficult to implement effectively due to differing approaches to it: HR Managers vs. the line managers who actually have to implement the strategy.

Managers may pay mere lip service to HRM as generally the business strategies which take precedence are:
company competitiveness and positioning
product and market development

Matters relating to the labour force may be lower down on the agenda rather than being front running items - unless they are cost cutting items.

Yet managers may endeavour to define HRM strategies particularly where there is a belief that investment in the quality and enthusiasm of the  work force will add to competitiveness, quality and overall business performance. Unlike the Harvard model a more effective method may be the matching model. Matching resources to desired outcomes (integrated business strategy).

There is no coherent view on what approach to take when implementing HRM: hard vs. soft. To either view the employees as a resource that can be manipulated to the desired outcome, or taking the soft approach and investing in employees and in turn attempt to solicit the loyalty and commitment from them. In South Africa because of the cultural diversity that companies are expected to reflect, HRM strategy as well thought out as it may be, will encounter problems with cultural differences especially regarding work ethic (unionisation) and loyalty. And current HRM theory is widely regarded as incompatible with trade unionism.

Also see: "People: Your Competitive Advantage"