Academic journal article Public Personnel Management

Promoting Organizational Fit in Strategic HRM: Applying the HR Scorecard in Public Service Organizations

Academic journal article Public Personnel Management

Promoting Organizational Fit in Strategic HRM: Applying the HR Scorecard in Public Service Organizations

Article excerpt

Introduction

The importance of HRM (Human Resource Management) in improving performance is well documented. (1) Based on a year long study analyzing the HRM practises at more than 400 companies, Watson Wyatt developed a Human Capital Index (HCI) which outlined 30 key HRM practises which contribute to shareholder value. These 30 practises illustrate the importance of: (i) recruiting excellence, (ii) clear rewards and accountability, (iii) collegial and flexible workplaces, (iv) communications integrity, and (v) the prudent use of resources in implementing HRM policies and practises, (2) Other studies highlight the importance of strategies, motivation, and selection and development practises in improving performance. (3)

There is an on-going debate on what specific HRM practices or combination of practices should be used in improving organizational performance. (4) It is possible to assess a configuration or aggregation of HRM practices on performance (5) rather than reviewing the effects of individual practices. (6) Some researchers adopt a behavioral perspective in suggesting that valued employee behaviors are an important source of performance. (7) Others suggest that HRM practices are contingent on the "fit" between the HRM system and the organizational strategy. (8)

The "fit" perspective is prominent in the strategic human resource management literature which suggests that the HRM function has to be aligned to assist the formulation and implementation of an organization's strategies and priorities. The nature of the "fit" between HRM and strategic objectives is very specific and idiosyncratic in any organization. (9) As such, HRM processes for recruiting, selecting, training, evaluating and rewarding employees might depend on the nature of the organization's objectives. A strategic objective like improving customer relations would need to be supported by HRM policies, programs, practices, skills, and behaviors which encouraged client or customer relations.

"Fit" can be defined internally or externally. External fit relates to programs, activities and strategies that the organization develops to respond to the external environment. Internal fit might focus on how organizational and HRM systems are connected and are useful to each other and to internal clients.

This paper illustrates how an HR Scorecard was used in facilitating a better "fit" between HR's practices, behaviors, and skills and organizational strategies and objectives in two public service organizations. In this sense, this project focused on improving the internal "fit" of HRM to other organizational units. The purpose was to assist HRM staff realign their practices in being helpful to line managers.

Strategic HRM and Organizational Fit

The idea of "fit" underlies numerous individual, group, or organizational frameworks that suggest that one organizational part should be consistent with the needs, demands, goals, objectives, and/or structure of another. (10) Inherent in most applications of "fit" is the assumption that organizations are more effective if the various parts of an organization "fit" well together. (11) In strategic HRM, researchers suggest that a strategy should fit with three generic variables: (i) HRM practices, (ii) employee skills, and (iii) employee behaviors. (12)

A model of strategic HRM that promotes "fit" would start with a definition of the organization's vision, mission, and strategies, and an examination of internal resources, (strengths and weaknesses) and external developments (opportunities and threats). (13) Given an organization's strategies, the process involves assessing the strengths, weaknesses, opportunities, and threats related to HRM. In this model, HRM's role is in providing practices and people with skills and behaviors to implement the various strategies.

In much of the literature on achieving "fit" between strategy and organizational systems, scholars assume that HRM departments can quickly adjust their functions and easily implement new practices. …

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