Critically Discuss The Various Existing Models Linking Organizational/ Business Strategy With Hrm Strategy

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In today’s rapidly changing globalised business environment, human capital has become one of the keys to competitive advantage. Consequently, any good business strategy must fully utilise the inimitable assets of people through their knowledge, skills and abilities. This highlights the need for strategic human resource management (SHRM). The key assumption of SHRM is that organisational performance is affected by employees through a set of human resource (HR) practices (Pan et al 2006).
A review of the literature linking HR practices to business strategy shows two conflicting perspectives in SHRM. The universalistic perspective suggests that there is a universal set of best practices that any business can adopt to improve organisational
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Although many researchers agree with the concept of bundling practices together, there has been little agreement about which HRM practices should be included. Consequently, some models have only a few key practices while others have a dozen or more. The most influential work to date is that of Jeffrey Pfeffer. Pfeffer originally devised a list of 16 practices in 1994 but subsequently narrowed them down to the following 7 in 1998:
1. Employment Security
2. Selective Hiring
3. Self-managed teams or team working
4. High pay contingent on company performance
5. Extensive training
6. Reduction of status differences
7. Sharing information

The HR practices in this bundle, and indeed any bundle should be consistent across workplaces and function together, otherwise known as internal fit. For example, it would be wrong to encourage team work but support individual performance related pay. Any perceived (and actual) inconsistencies between practices will reduce the effectiveness of the bundle and can lead to dissent and dissatisfaction. (Marchington et al 2004).
Boxall and Purcell (2003) summarise the core features of best practice models using the AMO rubric: performance is a function of Ability, Motivation and Opportunity. That is, best practice models typically aim to enhance employee skills through appropriate recruitment and effective training, motivate desired behaviour through incentives and empower
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