From HRM To Strategic HRM : which key competencies, actions and views of both the HRM Department and of the other actors in an organization can truly lead to a strategic role of HRM according to the literature since 199

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Name: Annemarieke Blankesteijn

Student number: 10901655

Program: MSc Executive Program Management Studies

Track: Leadership and Management

Amsterdam Business School, University of Amsterdam

Date final version: November 21, 2017 Supervisor: dr. Wendelien van Eerde

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Statement of Originality

This document is written by Annemarieke Blankesteijn, who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original, and that no other sources other than those mentioned in the text and its

references have been used in creating it.

The UvA Faculty of Economics and Business is responsible solely for the supervision of completion of the work, not for the contents.

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TABLE OF CONTENTS

ABSTRACT ……….……5

1. INTRODUCTION ………...………6

2. LITERATURE REVIEW ………..…10

Strategic HRM: definitions, core concepts and the linkage between HRM practice and organizational performance……...………...………10

Definition of strategic HRM ……….…10

The relationship between HRM and performance ………11

a) The Resource-Based View (RBV) ………...13

b) HRM practices and systems ………...15

c) The black box and the AMO-framework ………...17

Critique of research on the linkage between HRM and performance ………19

Ulrich’s model: Employee champion versus strategic business partner ………19

Critique of Ulrich’s model ……….…...21

a) Theory versus practice ………..…...21

b) A strong external focus on the strategic partner role ………..…….23

c) The strategic partner role is presented as the only way forward ………..24

d) Negative effects on employees ………..…..26

3. METHOD ………..27

4. RESULTS ………..……30

Role expectations, perception of HRM ………..…30

Contributing to strategy ………30

Clearly presenting the role of HRM and its contribution to organizational success……….…31

Personal and professional integrity and credibility ………...…32

Influencing different views on HRM from different stakeholders ……….………..……32

Feeling not being up to the strategic task ……….…33

Not clearly presenting their role and contribution to organizational success, difficulty in setting boundaries ………..………..34

Feeling the need to legitimize themselves to different stakeholders with different views …...35

Support for HRM practices throughout the organization ……….…36

Support for HRM from top management ………..37

HRM is respected in a strategic partner role………..…………37

Being considered successful by different stakeholders ………38

A negative legacy ………..…39

Considering HRM to be an administrative and supportive, and not a strategic function……. 39

‘Typical’ female job, therefore lower status ……….40

The role of HRM and its contribution to the organizations success is unclear ………….……41

Different stakeholders have different views or expectations ………42

Professional credibility not seen as very high ………...43

Recruitment and career perspectives of HRM professionals ………44

Summary………44

Time, Resource and Focus spend on Traditional versus new and strategic tasks ……….………45

Business knowledge and focus on the bigger strategic picture ……….………45

Focus on tasks that make a strategic difference ………46

Providing administrative support and efficient and functional HRM skills ……….…48

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New technologies used optimally ……….………49

Implementing theoretically valid ideas into practice ………50

Keeping education up to date ………51

Having the confidence and being prepared to make a difference ……….………51

Lack of business knowledge and not enough focus on the bigger strategic picture……..……52

Not much increase in time spent on strategic tasks ………..………53

Holding on to the familiar; still in a mainly supportive role; not taking up the new role …....53

Lacking the right measurements ………...……55

New technologies not used optimally ………...55

Difficulty implementing theoretically valid ideas into practice ………...………56

Losing power after outsourcing ………,…………...………57

Not being confident and ready to make a difference ………58

A culture of aligning HRM systems and practices throughout the organization …………..…59

Support from top management ………..……60

Top management understanding the consequences and taking the risks of changing HRM….62 Advantages of outsourcing and self service ………..62

Wrong focus of top management ………..63

Difficult to implement theoretically valid ideas into practice ………..64

Difficult to align practices throughout the organization ………...65

Outsourcing, shared service centers and HRM information systems are not always positive for employees ………..…...65

No right use of measurements ………..66

Summary………66

The relationship between HRM and line management ………..67

Shared responsibility, partnership, and better alignment of HRM practices ………....67

Supporting the line managers with HRM implementation ………...………68

Space for taking up a business partner role ………..…………69

Business partner role taken up more by line management than by HRM ………69

Feeling a loss of professionalism and of responsibility, diminishing boundaries ………70

Line managers as linking pin lead to a better implementation of HRM practices throughout the organization ……….71

Positive effects on employees when line managers are involved in HRM ………...72

Personal attitude and willingness of line managers ………..72

Marginalization of HRM issues by line managers ……….……...73

Resistance of line managers to do HRM work ……….74

Lack of skills, training and knowledge of HRM by line managers ……….….75

HRM procedures not being carried out consistently, correctly or completely………...75

Negative effects on employees when line managers are involved in HRM …….………76

Tension between HRM professionals and line managers ……….………77

Summary………....78

5. DISCUSSION ………78

Interpretation of the results ………...…….79

Implications for practice ………...……….81

Limitations of the research ………...…….82

Recommendations for further research ………..82

6. CONCLUSION ………..83

7. LITERATURE ………...85

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ABSTRACT

This thesis focusses on the strategic role of HRM, a subject that has been heavily researched since the nineties, because many authors believe that there is a positive relationship between strategic HRM practices and improved organizational performance. In this thesis, more attention than in most research is given to the role of and interaction with other parties in organizations, as opposed to a focus on what the HRM department should do in becoming strategic. In order to find out which key competencies, actions and views of both the HRM professionals and of others in an organization are important for making a strategic role for HRM happen, 170 peer-reviewed sources published between 1997-2017 have been searched for recommendations and research results. The outcomes are presented into subthemes. It turns out, that these subthemes can be explained in both positive and negative ways, and therefore, this thesis leads to a better understanding of the fact that still, even after so much research, not all aspects of strategic HRM are clear, and why one large common theory for HRM to become strategic is still lacking. Findings are compared with the business partner model for HRM as presented by David Ulrich (1997), as his model seemed to be a promising tool for HRM to make the transition from administrative supporter to strategic partner. Ulrich considered the business partner role of HRM to be crucial for the linkage between HRM practices and improved organizational performance. The usability of his model is discussed. Recommendations are given to pay more attention to the relationships between HRM professionals and others in the organization, especially when these relationship are based on power, and to look for new niches in which HRM can be a discernable strategic force, where others in the organization cannot.

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1. INTRODUCTION

“As strategic partners with managers, HR professionals partner with managers and are seen as part of management. Taken to an extreme, this may alienate employees from both HR and management. Employees at one company that was moving its HR function into strategic partnership saw the HR professionals, whom they felt provided the only channel through which their concerns were voiced to management, participating in more management meetings, becoming active in strategic planning, and becoming synonymous with management. As a result, the employees felt betrayed and rated the HR function as not meeting their needs. As employee

champions in partnership with managers and employees, HR professionals ensure that the concerns and needs of employees are voiced to management. Taken to an extreme, this may alienate the HR function from

management, who may not want to work with HR people whom they see as insensitive to business realities and advocates of employees. Resolving this conflict requires that all parties – HR, management, and employees – recognize that HR professionals can both represent employee needs and implement management agendas, be the voice of the employee and the voice of management, act as a partner to both employees and managers. […] To be a successful partner to both employees and management requires that both sides trust the HR professional to achieve a balance between the needs of these potentially competing stakeholders.” (Ulrich, 1997a, p. 45)

This is a quote from Dave Ulrich (1997), Human Resource Champions. The next agenda for

adding value and delivering results. He is one of many authors who articulated the need for a

more strategic role of the HRM function. HRM should not only focus on administrative and supportive tasks, but should add value to the financial performance of the organization by implementing HRM practices that are in line with and contributing to the overall strategy of the organization. By making this type of contribution, HRM will be considered by other top managers, such as the CEO and CFO, as a strategic partner helping drive results. As an effect, HRM will be more respected in the organization. The linkage between effectively using an organizations’ human resources in order to enhance performance is related to some well-known constructs, such as the Resource Based View, but still after many years of research, there is a need for better theory and for more testing on multiple, crucial fronts: the nature of HRM, the nature of the performance outcomes and the nature of the linkage between HRM practices and outcomes. There is a skeletal finding that HRM ‘works’, but still there is a lot of

7 flesh that needs to be put on the bones (Guest, 1997).

The research on the strategic role of HRM has seen a number of stages. Initially, there was excitement around the argument that HRM practices can enhance organizational performance. Later, this argument was empirically tested and many propositions were made on the

expansion and improvement of the thinking about this topic. One of the most common critiques still is, that the ‘black box’ through which HRM practices are thought to impact organizational performance remains researched insufficiently (Nishii & Wright, 2007). Ulrich explained that in order for HRM to be a real business partner, HRM should incorporate different roles: that of employee champion, strategic partner, administrative expert and change agent. Apart from the HRM department, Ulrich also included line managers in the strategic HRM process, because they can make sure that the HRM strategy gets implemented

throughout all units in the organization (Caldwell, 2003; Ulrich, 1997a). However, the problem with Ulrich’s four roles-model is that there are some paradoxes in fulfilling multiple roles at the same time, of which the main paradox is the one between strategic partner versus employee champion, because it is very difficult to serve wholeheartedly both top management and the employees. Ulrich acknowledges that paradox, but he thinks that this will be solved when both top management and employees trust HRM.

Apart from Ulrich, many other authors have published on the strategic role of HRM. It is a classic topic in the management literature. However, although the importance is widely recognized, most authors do not succeed in showing direct linkages between strategic HRM practices and organizational performance. Many articles do not get past a certain meta-level, or focus solely on one practice at the time, with all other circumstances staying the same. Most articles focus on one point in time (cross-sectional), and do not consider the time-lag between implementing a certain practice and the subsequent effect it may or may not have. In the literature on strategic HRM there is consensus that HRM practices do have an effect on firm performance in some shape or form. The nature of the linkage, however, is still not as clear as might be expected after so many years of research, and the willingness of many authors to find and to demonstrate this relationship.

8 Because so many authors have written about what it means for HRM to be a strategic partner, the goal of this thesis is to explore a large body of this work, and to distill from that the research results and recommendations of what is needed for HRM to take up this role, how it should spend its time, and how the HRM professionals relate to other partners in the

organization. The HRM department cannot solely take up this responsibility; others in the organization, such as line managers and top managers, need to acknowledge them in that role as well. This interaction is very important, and should be given as much attention as the actions that the HRM department undertakes.

However, HRM does not have a very strategic image. Since its origin, it has more an image of an administrative and compliance part of an organization, and ‘becoming strategic’ seems a big step. However, the emphasis since the nineties on the strategic role of HRM makes that it seems to be the only way forward for HRM. Yet at the same time, this role does not come naturally to all HRM professionals, and if they act in this way and at the same time are not perfect and timely in the administrative part of their job, they are immediately not taken seriously anymore. The HRM department has a steep hill to climb in this respect, and sometimes it seems as if it cannot win at all.

Because of the importance of the strategic role for HRM in the literature, because of the fact that the exact linkage between HRM practices and performance could be more clear, despite a quarter of a century of research in this field, and because of the difficult position HRM

sometimes finds itself in, the research question of this thesis is:

“From HRM to strategic HRM: which key competencies, actions and views of both the HRM department and of other actors in an organization can truly lead to a strategic role of HRM, according to the literature since 1997?”

The following principles are guiding this research question:

a) Multiple roles and different competencies are necessary for the HRM department in order to be considered as a strategic partner for the organization (Ulrich, 1997a).

9 b) A strategic HRM function is a joint effort of multiple actors in the organization (Ulrich, 1997a).

c) There is a linkage between the implementation of strategic HRM practices and systems, and the organizational performance. The exact nature of this linkage is not completely clear yet, although many models claim to solve some piece of the puzzle ( such as the Resource Based View of the firm and the AMO-framework).

By taking these principles into account, this thesis aims to add knowledge to the literature of what it means to ‘be strategic’ for HRM. The importance of this theme comes from the fact that there is the assumption that there is a linkage between HRM practices and organizational performance. Dave Ulrich contributed to this discussion in a way that seemed very practical: HRM should have the role of business partner. That way, top management can be sure that a strategy will be implemented throughout the organization by HRM practices, with the help of line managers. However, also in Ulrich’s research it was not completely clear, what exactly the link was between HRM practices and organizational performance, but he has been important in emphasizing the strategic position of HRM. After Ulrich, many other authors wrote about the strategic role of HRM. Still, after over two decades, it still is quite an abstract notion, although there is agreement on its importance.

This thesis takes a closer look at the literature, to see what exactly the important aspects of strategic HRM are, and how (and if) this role can be achieved. There is a focus on three themes:

1) Role expectations, perception of HRM; 2) Time, resources and focus directed at the traditional HRM tasks versus the new, more strategic tasks; and 3) The relationship between HRM and line management.

Additionally, it will be explored how HRM should or should not act, and how others in the organization can contribute to the strategic role of HRM. In the Discussion-chapter, the outcomes are juxtaposed to Ulrich’s view, to see how effective and workable his framework has been.

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2. LITERATURE REVIEW

Strategic HRM: definitions, core concepts and the linkage between HRM practice and organizational performance

The strategic role of HRM is a very well researched field since the nineties, but still, many theoretical and conceptual questions are not agreed upon. This chapter discusses the definition of strategic HRM, critiques, and differences and similarities in the literature.

Definition of strategic HRM

The term strategic human resource management (SHRM) is used broadly among academics and HRM practitioners to point out that HRM activities should contribute to the strategy and results of the organization. Research in this field focusses on improving the understanding of the relationship between how organizations manage their human resources, and how this affects the implementation of business strategies and organizational performance. Two important assumptions are that effective HRM requires understanding of and integration with an organization’s strategic objectives, and that effective human resource management will lead to an improvement of organizational performance (Schuler & Jackson, 2005).

An early and often used definition comes from Wright and McMahan (1992), who defined strategic HRM as “the pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals” (Rogers & Wright, 1998, p. 7; Kaufman, 2002). This involves all activities that are carried out in order to affect the behavior of employees in an effort to implement the strategic needs of an organization (Nishii & Wright, 2007).

There is not one commonly adopted definition of what strategic HRM is, but there is

consensus in the academic literature on some fundamental aspects of strategic HRM (see table 1 below).

11 Table 1: Consensus on certain types of effective linkages and practices in strategic HRM

Linkage between HRM practices and performance outcomes

• Strategic HRM systems are linked to the firm’s strategy, and ultimately, have effect on both market-based and accounting-market-based measures of firm performance (Becker, Huselid, Pickus & Sprat, 1997; Lepak & Shaw, 2008).

• Strategic HRM is applicable from small to large to international organizations. Large organizations can be seen as conglomerations of strategic business units, each serving its own strategic goals, markets and customers (Paauwe & Boselie, 2005).

• Organizations adopt a particular strategy that is different from those adopted by other organizations, in order to sustain competitive advantage (Kaufman, 2015).

Linkage between HRM and the strategy of the organization

• The HRM activities need to be aligned with the organization’s mission, goals, culture and values (Garavan, 2007).

• An organization’s human resources are of critical strategic importance: employees’ skills and

behaviors can help in providing the strategy formulation, and are at the same time also the means for strategy implementation (Colbert, 2004).

• The HRM activities are systematically designed and intentionally linked to meet the needs of the organization (Schuler, Jackson & Storey, 2001).

• An organization’s HRM practices are instrumental in developing the strategic capability of the human resources-pool (Colbert, 2004).

• Most strategic decisions from top management have direct human resource implications: more or fewer people are needed, or new skills are necessary in the workforce (Rowden, 1999).

• Strategic HRM is not a responsibility of the HRM department alone; also the support from top management and line managers is necessary (Garavan, 2007, Ulrich, 1997a).

• HRM practices being called strategic is because this implies a concern with the ways in which HRM is critical to organizational effectiveness (Boxall & Purcell, 2000), and that HRM gets involved in the broader, longer-term strategic decisions of the organization (Bowen, Galang & Pillai, 2002). (Combinations of) some HRM practices are more effective than others

• Fit among HRM practices is important to get the desired alignment throughout the organization. The fit can be either highlighted among the HRM practices themselves (internal alignment / horizontal fit), and/or between HRM and other organizational factors (external alignment / vertical fit). Many contingencies can be researched, but the most common contingency so far has been business strategy (Lepak & Shaw, 2008).

• There is an emphasis on the entire HRM system as unit of analysis at the macro level of an organization. In traditional research, the focus was more on individual policies or practices (Becker, Huselid, Pickus & Sprat, 1997; Lepak & Shaw, 2008).

• Technical HRM practices focus more on traditional personnel management, whereas strategic HRM practices are used to develop employees to support the organization’s business needs (Lepak, Bartol & Erhardt, 2005).

Consensus on the above mentioned types of effective linkages and practices makes that there is a foundation to discuss the nature of these linkages and effectiveness, and to further explore the strategic nature of HRM.

The relationship between HRM and performance

When discussing strategic HRM, the main question is how HRM activities affect the organizations’ outcome. What exactly is the nature of this linkage? Academic literature focusses on different linkages among organizational strategies, on HRM practices, policies and systems, on perspectives of multiple stakeholders, and on the contributions at multiple levels of analysis (Garavan, 2007). Many models have focused on certain parts of strategy

12 implementation or strategy execution. Real impact is to be found earlier on in the process, in both formulation and implementation of strategy. This requires that HRM is involved early on in the strategy formulation process (Schuler et al., 2001).

Many conceptual models have been developed to predict and explain the linkage (Heffernan & Flood, 2000). Examples of some very well-known studies in the field that demonstrate that progressive HRM practices result in higher organizational performance are Huselid’s (1995) study on High Performance Work Systems (HPWS), Youndt, Snell, Dean and Lepak’s (1996) study on how certain combinations of HRM practices were related to operational performance on a sample of manufacturing firms, and Delery and Doty’s (1996) research on a sample of banks (Boselie, Dietz & Boon, 2005).

In their overview of 104 articles concerning the linkage between HRM and performance, Boselie et al. (2005) concluded that there is still no general consensus on what constitutes HRM, what exactly performance is, and what the precise link is between the two. Since Guest (1997) called for better theory on these issues, much progress has been made, but this has not led to one ‘ultimate’ model, but to many. Most models assume a sequential causal progress, as depicted in figure 1.

Figure 1: The standard causal model for the relationship between HRM and performance

(Boselie, Dietz & Boon, 2005, p. 78)

The model assumes that HRM strategy is not at the fore front, but that it follows from the overall organizational strategy; that from this strategy HRM practices will follow, which give rise to certain outcomes. These outcomes will lead to certain desired employee behaviors and

13 attitudes, which in turn lead to improved internal and ultimately financial performance. The upper arrow indicates that there might be a direct influence from HRM practices on

organizational outcomes: the mediating ‘black box’. The lower arrow indicates that also a reversed causality could exist: it might be the case that better performance outcomes may lead to better HRM practices, for example because there is more money available for training employees (Boselie et al., 2005).

Three important theoretical constructs in the strategic HRM field are: 1) The Resource Based View.

2) High performance work practices and systems. 3) The black box.

These are classical constructs in the HRM literature, because they focus on the nature of the linkage between HRM and performance, and on how HRM can impact this linkage. Therefore they will be discussed shortly, after which Ulrich’s vision on this topic will be presented. In his view, HRM acting as a business partner is the linkage between HRM and performance.

a) The Resource-Based View (RBV)

The Resource Based View (RBV) (Barney, 1991; Wright et al., 1994; Boxall, 1996) aims to explain how the overall set of HRM practices is associated with performance and the

competitive advantage of an organization. An organization’s human resources provide a unique source of competitive advantage that is valuable, rare, inimitable and supported by the organization. (Barney & Wright, 1998). Not the HRM practices themselves (for example: reward policy) are inimitable, but the fact that the practices are socially complex, unique to an organization because of its history and culture, and because they are intricately linked, makes them difficult to replicate by other organizations. Hence, HRM practices can be a source of competitive advantage, because competitors cannot easily replicate, access, or buy them (Bowen & Ostroff, 2004; Saá-Pérez & Garcia-Falcon, 2002). The popularity of the RBV within the strategic HRM literature as a foundation has probably surpassed what anyone

14 expected of this theory (Wright, Dunford & Snell, 2001). However, despite a significant amount of research on the RBV, several key aspects regarding the RBV and its implications for strategic HRM research remain complex and unanswered. What is still missing is the clear link between strategy and human resource management practices. Most RBV-oriented studies examine the performance effects of various configurations of HRM practices, but questions on strategy are not explicitly addressed. What strategic value do these practices create, and how are they contributing to strategy formulation and implementation? Are activities value-adding when they add value relative to costs, or can they also be valuable when they

contribute to less-well measurable outcomes? Without this explicit connection, it is difficult to argue that HRM practices have strategic significance (Buller & McEvoy, 2012). The RBV seems to be more suitable to explain in retrospect competitive advantage based on path dependency, and seems to be less suitable in predicting under what circumstances the specific resources of a company will generate a sustainable competitive advantage (Paauwe & Boselie, 2003). Still, there are some unanswered questions whether or not HRM defined as systems of HRM practices can constitute a resource under the conditions outlined by Barney (1991), and if those resources are truly sustainable over time. Also, there are still some measurement- and methodological issues left, for example as to whether current research on HRM and

performance is truly testing the RBV (Allen & Wright, 2006).

Becker, Huselid, Pickus, and Spratt (1997) explain that the organization’s strategy dictates how the HRM system is designed and that this impacts the employees’ motivation and skills, resulting in creativity, productivity, and desired behavior. Employees’ behavior influences organizational and financial performances (Becker, Huselid, Pickus & Sprat, 1997; Wright & Haggerty, 2005). It is therefore important that there is attention to both the intended and the implemented HRM practices, because when it is unclear for employees what is expected of them, they will not adjust their behavior, and hence the desired performance outcome will not be achieved. This notion of intended and implemented HRM practices was building upon the RBV, but paid more attention to the personality of the employees and led to a focus on the relationship between High performance work practices and organizational performance

15 (Mitchell, Obeidat & Bray, 2013).

b) HRM practices and systems

Overall, there is general agreement among HRM scholars that HRM practices are at least weakly related to firm performance (Boselie, 2010; Huselid & Becker, 1997, Purcell, 1999; Wright & Gardner, 2003; Paauwe & Boselie, 2005; Wall & Wood, 2005), and that the more advanced an organization is in the development of its HRM practices, the better its

performance is (Gates & Langevin, 2010). Becker and Huselid (1998) found that firms with the greatest intensity of HRM practices that reinforce performance had the highest market value per employee. The most successful organizations are able to achieve both operational and strategic excellence in their HRM systems and functions (Lawler III & Mohrman, 2003; Becker & Huselid, 1998). However, there is also agreement that the results should be treated with caution. Empirical evidence shows that HRM practices mainly have a modest positive impact on performance, and sometimes no impact at all. This is mainly the case in research where one or two practices are tested against one or two outcome variables, of the type ‘Is a high reward system positively related to organizational commitment?’. There is an abundance of this type of research (Boselie, 2010; Huselid & Becker, 1997).

There is no consistent agreement yet on how to measure overall HRM systems and their effectiveness. Interpretation of the size of the effect on overall performance is difficult, because studies link different combinations of practices and different measures of

performance (Murphy & Southey, 2003). A key methodological issue remains if the practices should be measured by themselves, or as a system of practices. Because it is not clear how to conceive the relationships among HRM practices or policies when used in combination, this remains both an empirical as well as a conceptual question (Lepak, Liao, Chung & Harden, 2006).

There is consensus on the importance of employee alignment with the organization’s strategy. Empirical research in this field often focuses on HRM practices in achieving alignment on the organization’s efforts in recruitment, development, communication, compensation, and work

16 design (Ulrich, Younger & Brockbank, 2008; Wright & Boswell, 2002).

There is also consensus on the idea that the relationship between clusters of HRM practices and performance are depending upon the business strategy of the organization (Wright & Boswell, 2002). When HRM systems are in place, they are more than a bundle of best single practices. Ideally, these best practices are combined into an internally coherent system, directly aligned with the business priorities and activities that are most likely to create value (Becker, Huselid, Pickus & Sprat, 1997). It is important that these practices have both horizontal and vertical fit with the organization. In horizontal fit, the HRM practices are aligned into a coherent system of practices that support one another. In vertical fit, the HRM practices are aligned with the specific organizational context. It is important to distinguish practices that are additive, interactive, synergistic or substitutes for one another (Delery, 1998).

Delery and Doty (1996) identified and contrasted universalistic, contingency, and

configurational explanations of the effect of HRM practices on organizational performance. Universalistic or ‘best-practice’ approaches imply that the relationship between a

given independent variable and a dependent variable is universal, and can benefit any type of organization (Delery & Doty, 1996). The contingency theory goes beyond the more causal and linear relationship as explored in the universalistic point of view, and allows for interaction effects and varying relationships depending on the presence of a contingent

variable. In most strategic HRM research, the variable is the organization’s strategy (Lepak & Shaw, 2008; Colbert, 2004). This perspective requires selecting a theory of strategy, and then specify how an individual HRM practice is interacting with it, resulting in a certain

organizational performance (Delery & Doty, 1996). The configurational perspective is the most complex one out of the three: it is concerned with how patterns of multiple

interdependent variables relate to a given dependent variable (Colbert, 2004; Delery & Doty, 1996). Because research in this perspective is more layered, as there is both horizontal and vertical fit of practices involved, there is also more empirical support for this approach (Stavrou & Brewster, 2005).

17 In general, bundles of HRM practices are referred to as 'high performance', 'high commitment' or 'high involvement' systems, which should have a positive impact on organizational

performance regardless of the context or industry, because they enhance employees’ commitment and understanding of what is expected of them (Gould-Williams, 2003). Another way of looking at bundles of HRM practices is the concept of HRM architectures. Much research in the nineties focused on linking appropriate HRM architectures to certain competitive strategy types. Because the number of strategy types is limited, the number of appropriate HRM architectures is limited as well. It then follows that the uniqueness of HRM architectures across firms is also limited; this makes them easier to imitate, and thereby their value as sources of sustainable of competitive advantage is reduced (Garavan, 2007; Becker & Huselid, 2006).

Most studies assess the type of HRM practices that are in place and how they relate to one another, but it is even more important to explore the effectiveness of their implementation. Furthermore, the manner and context in which these practices are applied plays a vital role. Well-intended practices are not effective when they are not properly implemented (Bos‐ Nehles, Van Riemsdijk & Looise, 2013).

c) The black box and the AMO-framework

As mentioned above, there is still unclarity about the deeper theoretical understanding of how HRM practices are related to performance. More research is needed that examines all the different variables that might be involved in the proverbial ‘black box’ between HRM systems and organizational performance (Bowen & Ostroff, 2004; Nishii, Lepak & Schneider, 2008; Nishii & Wright, 2007), because existing research measures different policies, practices, variables and outcomes (Lepak et al., 2006). Many authors see this clearer articulation of the ‘black box’ between HRM and firm performance as one of the most pressing theoretical and empirical challenges in the strategic HRM literature, because it touches the core of what makes HRM strategic (Roehling, Boswell, Caligiuri, Feldman, Graham, Guthrie, Morishima & Tansky, 2005; Becker & Huselid, 2006; Bos-Nehles et al., 2013; Becker & Gerhart, 1996).

18 When the contents of the black box will become more clear, this will help answering

questions such as whether strategic HRM guarantees positive performance, what the effect is of different levels of HRM implementation on performance, and how the influence of the market environment moderates the relationship between strategic HRM and performance (Chang & Huang, 2005).

Since the 2000s, the most dominant stream of literature in this regard is about the AMO-framework, while in the nineties the focus was on RBV and contingency theory. This could mean that there is at least growing consensus on how HRM might be constituted in exploring the relationship between HRM and performance (Paauwe & Boselie, 2005). The AMO-framework was introduced in 2000 by Appelbaum et al., and in essence proposes that employee performance (P) is a function of the employee’s ability (A), motivation (M) and opportunity (O) to perform (Collings & Mellahi, 2009; Boselie et al., 2005).

Figure 2: The AMO-framework

An important difference between the theories mentioned above, is that both the AMO-framework and the work practices and systems place more emphasis than the RBV does on the employee in order to make a difference. Within the RBV, the human resources are considered rather instrumentalistic because there is not much attention for the employees, whereas in the AMO-framework there is attention to employees’ knowledge and skills and motivation.

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Critique of research on the linkage between HRM and performance

Most critique of research on strategic HRM focusses on the fact that the exact linkage between HRM practices and impact on organizational performance is unclear. More specific theoretical models of these processes are needed, in order to demonstrate that the relationship is actually causal. There is not much research that has used rigorous designs to test the

hypothesis that employing progressive HRM systems actually does result in higher

organizational performance in a causal sense, and how this effect takes place when certain practices are implemented and aligned systematically. Often, the research on the relationship between HRM and performance outcomes does not get past meta-level (Becker, Huselid, Pickus & Sprat, 1997; Bowen et al., 2002; Piening, Baluch & Ridder, 2014; Wright &

Haggerty, 2005). Especially the RBV has been criticized for neglecting the larger and specific context of an organization, and the human side of employees, as all of these factors may have an impact on employee skills and competences, and hence the performance outcomes

(Kazlauskaite & Buciuniene, 2008).

Apart from the unclarity of the nature of the linkage, other subjects of critique focus on definition, outcomes, methodology, effectiveness and context (See table 2 in the Appendix). This makes clear that it can be assumed that there is indeed a linkage, but that still a lot of research is needed in order to establish its exact nature in a methodologically sound manner.

Ulrich’s model: Employee champion versus strategic business partner

As opposed to the previous models, Ulrich sees a much more active and multi-layered role for the HRM department itself in improving performance. When HRM acts strategically, it can be the linkage between HRM practices and organizational performance. Ulrich points out that suggestions for possible HRM tasks to create value, have long been viewed as a matter of transformation. For example, a transformation from operational to strategic, or from reactive to proactive. Ulrich explains that these types of transformation are quite simplistic and one-dimensional, and in reality, HRM has to undertake many roles that are increasingly complex. When these roles are all present in the HRM function, HRM will be a value-adding partner to

20 organizational outcomes. It is key that HRM focusses on the deliverables of their work, and not on the tasks themselves. The term business partner is nowaydays quite narrowly explained as HRM professionals working with managers on strategy, because of the strong focus on the strategic partner role. But these terms are not indistinguishable. Ulrich points out that all four roles need to be present in order to be a full business partner (Ulrich, 1997a, p. 37), as is shown in figure 3.

Figure 3: The HRM Business Partner model of Ulrich

Because of these multiple roles, that give more depth and standing to the HRM department, his model seemed to be a practical addition to the theories mentioned above.

Although Ulrich acknowledges that there might be some paradoxes in fulfilling multiple roles at the same time (especially a paradox between administrative expert vs. change agent, and a paradox between strategic partner vs. employee champion), he thinks that mainly the latter paradox will be solved when both management and employees trust HRM (see also his quote on page 6) (Ulrich, 1997a).

However, he does not further explain how all stakeholders can start trusting HRM, and how they can all do so at the same time. This also implies that there is no basic trust from the start. There remains a discrepancy between the execution of all the roles in this model, which Ulrich does not really address, as has also been pointed out in other articles (Cooke, 2006;

21 Cooke, Shen & McBride, 2005; Rynes, 2004; Francis & Keegan, 2006; Voermans & Van Veldhoven, 2007). Critique on his model by other authors is addressed next.

Critique of Ulrich’s model a) Theory versus practice

The model does look appealing on paper, but it may not be as easy to implement. First, the HRM tasks cannot be delivered by different sources in four neatly carved out blocks. Second, the model does not discuss the process of interaction and communication between the blocks, which is necessary for distribution of the work between the blocks. Also, the model does not show how knowledge and operational gaps are bridged. It is not clear who leads, who coordinates, who creates solutions and who ensures their implementation (Cooke, 2006; Cooke et al., 2005). Ulrich takes for granted that employee well-being and organizational goals can always be aligned, for example by high commitment or high performance work practices, which will not always be the case in reality (Rynes, 2004; Francis & Keegan, 2006). HRM champions are not always, or only, the HRM professionals, according to Ulrich. He insists that in the end, line managers must have ultimate responsibility for HRM processes and outcomes (Caldwell, 2003; Ulrich, 1997a). However, this assumption holds that line managers have the time, the training or the interest to give employee well-being the highest priority (Francis & Keegan, 2006).

For the HRM professional, the business partner role can be difficult, because it touches upon the structural conflict that they are in with line managers: while line managers (who should be ultimately responsible for HRM processes, according to Ulrich) are mainly interested in managing human resources according to productivity and the short-term perspective, the HRM professional should consider human resource management from a long-term

perspective, and with a specific focus on competence development, or this will not be dealt with at all (Boldizzoni & Quaratino, 2011). Therefore, the business partner role comes more natural to the line managers than to the HRM professionals, yet the HRM professionals feel obliged to take up this role (Sheehan, De Cieri, Greenwood & Van Buren, 2014).

22 Ulrich does not address possible value-role conflicts or role ambiguity that HRM

professionals may experience because of the paradox inherent in the model. There are opposing interests of management and of employees, and HRM should be the party that brings and sustains an ethos of mutuality (Caldwell, 2003). Voermans and Van Veldhoven (2007) discuss how valid Ulrich’s four blocks model is when it is used to measure HRM role preferences as opposed to actual HRM roles. They suggest that it might be more valid and realistic to reduce the model to one with only two roles, in which one role is the employee champion role as described by Ulrich, and the other role is that of HRM in a strategic, change and performance-oriented role supporting the overall organization. This two-dimensional model is then acknowledging and showing the basic ambiguity that is present in the HRM function about ‘whose side they are on’, and can operate as an interface between employees and top management (Voermans & Van Veldhoven, 2007).

Another instrumental view by Ulrich (Ulrich & Brockbank 2005) that holds the same dichotomy is the HRM value proposition. This emphasizes that HRM is successful when it adds value. However, value means something different for employees than it means for management. Its success is defined by its recipient. Value to employees may be viewed as unnecessary cost by top management. According to the HRM value proposition, value added employee activities are clarifying expectations for employee treatment and rewards, and ensuring that employees acquire knowledge, skills, and abilities that are important for doing their work. Treating the human resources of the organization well will enhance financial results. This proposition has an instrumental view of employees and this aspect is similar to the four blocks model, which assumes that employee well-being and organizational goals in the end can always be aligned and will lead to better performance (Graham & Tarbell, 2006). The idea of business partnering has been attractive because it is rhetorically simple, and it seems to give a new meaning and standing to the HRM function. However, certain

fundamental questions about this term cannot be answered adequately. Does each role have a unique set of competencies that are role-specific and/or context-specific? Do all HRM

23 holistic, because all the four roles need to be present in some shape or form, but at the same time, the emphasis is mainly on the strategic partner role, as this will make the biggest

difference for the HRM function. This sidelines the also important but more specialist roles of administrative expert and employee champion, and few HRM professionals nowadays choose these roles with pride. In everyday reality, the implementation of the business partner concept leads to more questions. What are appropriate functional and cognitive competencies for HRM business partners? How are these competencies formalized? How much formal and tacit business knowledge do HRM professionals need in order to be effective in a strategic

business partner role? Are business partner competency models really effective in selecting and developing business partners? In the HRM competency literature, much more attention should be devoted to the overarching questions of true effectiveness of certain competencies or HRM practices (Caldwell, 2008).

b) A strong focus on the strategic partner role

In the management literature, there is an increasing orientation towards economics, and this has contributed to diminishing attention to human welfare (Rynes, 2004).

The emphasis in the HRM literature on the achievement of performance outcomes has obscured the importance of employee well-being in its own right, and there is not much research done anymore that focusses on how HRM practices are helping to sustain happy workplaces (Francis & Keegan, 2006). Also, in business schools there is a strong instrumental focus on the HRM-performance link and on strategy, and not so much on the wellbeing of employees (Guest, 2002).

A long held negative image of HRM, and traditional adversarial orientations between management and employees makes it difficult to bridge the gap in the way Ulrich proposes. Moreover, HRM is sometimes very critically scrutinized, while at the same time it is claimed that HRM is acting ineffectively (Guest, 1999). This makes it even more difficult for HRM to take up a clear role because from the start, others will have a firm opinion that is often more negative than positive.

24

c) The strategic partner role is presented as the only way forward for HRM

There are several reasons why it seems that the strategic partner role will take the HRM professional forward, more than the other three roles will do. With an emphasis on strategy and on performance outcomes, the general discourse is no longer focused on the employees or on operational issues (Brown, Metz, Cregan & Kulik, 2009; Francis & Keegan, 2006). The adoption of the language and motivation of strategy within HRM has been somewhat

uncritical. The definition of ‘strategic’ comes not from HRM or from employees, but initially from the non-HRM parts of the organization and its managers (Van Buren, Greenwood & Sheehan, 2011). Concern for performance can even be antithetical to concern for people (Sheehan et al., 2014).

Because most HRM professionals are naturally inclined to be employee-focused, they do experience operational challenges when they attempt to be a strategic partner and

simultaneously promote employee well-being (Brown et al., 2009). Yet, by taking on too much of a strategic role, it is easy to fail in providing support for the operational

implementation of HRM practices. This way, HRM professionals themselves can undermine the consistent usage of HRM practices in the organization (Piening et al., 2014).

For many HRM directors, they feel truly strategic when they are part of top management. However, this does not guarantee HRM’s continuing and important responsibility for ensuring that the organization meets the needs of all employees (Schuler & Jackson, 2005). Not all HRM directors in top management realize that undertaking employee-centered activities is incorporated within the business partner role: these activities are strategic because they can generate benefits for the organization, and it is only appropriate that HRM managers undertake these type of activities (Brown et al., 2009). More research should be done to understand what HRM and other top managers actually do and think about, when they are discussing dilemma’s in which short-term profits are weighed against employee welfare (Rynes, 2004). Too often, it is tempting for managers to prefer efficient exploitation of human resources over acting in partnership with employees (Guest, 2002).

25 perspective that challenges the strategic choices of managers, or they offer a narrow economic view (Brown et al., 2009; Van Buren et al., 2011).

While it is evident from research that HRM professionals recognize a need to encompass both ‘hard’ business-oriented and ‘soft’ people-centered employment practices, HRM models often fail to capture this dynamic. This is because these ‘hard/soft’ elements are conceptualized as discrete entities, and it implies that they can be measured objectively, which is in practice hardly possible, especially for the ‘soft’ practices (Francis & Keegan, 2006). Financial practices and measurements that are used to measure ‘hard’ short-term financial targets, undermine the ‘soft’ learning-oriented HRM models and strategies. Because the focus is on profit maximization and cost minimization, HRM issues will be a second order consideration (Gold & Bratton, 2003).

Recent research has shown that the four roles of Ulrich are nowadays well understood by HRM professionals, and that they are very aware of the higher status of the strategic partner role as opposed to the employee champion role. When Boldizzoni and Quaratino (2011) asked the question “Among the following roles, which one best represents the nature and the

activities of Human Resource Management in your company today?” the answers were

business partner (29.9%), functional expert (19.5%) and change agent (14.3%). Nobody chose employee advocate (0%) (Boldizzoni & Quaratino, 2011). Comparable answers were given in the research of Francis and Keegan (2006): none of the interviewees wanted to be the

employee champion, and the emphasis definitely was on being a strategic partner. Both the organization and the HRM professionals should be aware of the strong association with the strategic partner role, and ask themselves if the diminishing role as employee champion outweighs drawbacks such as loss of visibility and advocacy of employees (Francis & Keegan, 2006).

Some critics of strategic HRM state that no matter what, true employee championship is not possible at all: HRM either sees employees as human resources to be exploited, or the concerns for employees are not real, and are only shown to exploit employees in the end, through subtle management of their mind-set (Guest, 1999). The organization is offering the

26 role of the employee, defines the purposes and goals of the organization, controls rewards and promotions mechanisms, and therefore there is an imbalance of power between organizations and the vast majority of their employees (Van Buren et al., 2011). This may sound quite negative, but it is clear that there is an imbalance in the four roles that Ulrich originally envisaged.

The strategic partner role also seems to be almost the only way of making career in HRM nowadays, and the employee champion role does not (Cooke, 2006; Francis & Keegan, 2006). These two roles require people who have different outlooks and skills (Brown et al., 2009). Insisting on the virtues of employee-centered HRM is not speeding up a HRM career, and many HRM professionals are very aware of that (Rynes, 2004). Students in HRM who have chosen for this field because they are mainly interested in assisting employees, will likely experience dissatisfaction with their career choice later on (Brown et al., 2009).

d) Negative effects on employees

The focus on strategy can make employees distrustful of HRM professionals (Caldwell, 2010). An increase of HRM work taken away from HRM and being relocated to self-service systems or to line managers, who are more oriented towards business performance, means that employees are increasingly losing day-to-day contact with HRM specialists. Employees may not know who the HRM managers are, or have little direct access to HRM professionals. They have to rely more on line managers who may have neither the time nor the training to give HRM tasks the necessary priority (Brown et al., 2009; Francis & Keegan, 2006). Employees do prefer personal contact with HRM professionals, especially when they want to discuss employee-sensitive issues or personal problems (Sheehan et al., 2014). In a very competitive environment or strong power structure, people want to know that they are treated with fairness and transparency (Thompson, 2011). The model of Ulrich does not address the psychological effect on employees, in particular the negative impact it can have on organizational

commitment, for those employees who experience a quality drop in the HRM services they receive (Cooke, 2006). Many employees feel ambiguous about who the HRM manager

27 represents (Brown et al., 2009). The employees are an important customer group for HRM, but they feel that when HRM aspires to a strategic role, HRM’s most important customer is top management (Graham & Tarbell, 2006).

This chapter and the introduction showed that although much has been written about the strategic role of HRM and how this can contribute to improving organization results, there still is more research needed that shows how this relationship works, and what it exactly means to ‘be strategic’ as HRM professionals. In looking for an answer to the question “From HRM to SHRM: which key competencies and factors of both the HRM department, and of the other actors in an organization, can truly lead to a strategic role of HRM, according to the literature since 1997?” the rest of this thesis will show the results of a literature study.

Attention is paid to both what the HRM department should do in order to act strategic, and to its interaction with other parties in the organization. This will give more information on which key competencies, actions and views of both the HRM professionals and of others in an organization are important for making a strategic role for HRM happen.

3. METHOD

As this thesis is a study of how in the academic literature the role of HRM as a strategic partner is considered, the method is a literature review, and the results are presented in a descriptive manner. The literature search was carried out via GoogleScholar. For a long time, classic search engines such as Web of Science were deemed to be more elaborate or to yield more academic results, but this difference does not exist anymore. Web of Science is

collaborating with GoogleScholar. On Web of Science, results are given mostly on citation level or abstract level whereas GoogleScholar search for full text. Both search engines may give different results, but GoogleScholar will not miss results that would be given by Web of Science (http://libguides.lib.msu.edu/pubmedvsgooglescholar, 24/08/2017).

28 Champions was published in that year. This theme was first searched on itself, and later

combined with (Boolean: AND) the following themes:

1) ‘Perception of HRM’(The focus was on results that were connected to role clarity or strategy, and not on articles that dealt with employee perceptions of a certain isolated HRM practice);

2) ‘HRM and top management’, 3) ‘HRM and line management’, 4) ‘HRM and middle management’, 5) ‘HRM professionals’,

6) ‘Transformation of HRM’, 7) ‘HRM competencies’, 8) ‘HRM and Gender’.

Themes 1-4 are related to HRM in relationship to others in organizations, themes 5-7 are related to internal HRM competencies, and theme 8 fits both categories, because in relationship to others, gender of HRM professionals can be perceived as either positive or negative, and in relationship to internal HRM competencies, gender can be related to certain role characteristics that do or do not fit with the desire to be strategic.

By deciding the relevance of the sources, the title and abstract on the first page were

examined. In total, this resulted in 462 results, of which 196 were duplicates. These duplicates were removed, resulting in 266 sources. Next, the journal titles were checked on either their own website or on the website of their publisher: are they peer reviewed and/or refereed journals? If not, these articles were excluded. Most journals are known for their HRM focus. When the source was not an article in a journal, it was an otherwise academically relevant source: a book chapter or a conference proceeding (7), a McKinsey Quarterly report (1), and articles from the CAHRS (Cornell Center for Advanced Human Resource Studies) Working Paper Series (7).

When reading the sources thoroughly, it turned out that not all sources were as relevant as previously thought based on the abstract, and these were removed as well. In the end, 170

29 sources in total have been studied. As one can discuss how many sources are needed for a literature study, it is helpful to take a look at other studies that undertook the same approach. For example, Boselie et al. (2005) summarized 104 of the most important articles on the subject of the linkage between HRM and performance; these 104 articles were published between 1994-2003, which is on average 10,4 articles per year. The 170 sources used in this thesis were published between 1997-2017, on average 8,1 per year. This average number is slightly lower, but because the overall sample is so large, we can assume that it is robust enough to present the results in the next chapter.

In order to process the information in the sources, coding was done with the help of the program NVivo. This a software program that is often used as a tool for qualitative data analysis, as it helps to analyze and to group rich text data. Coding basically means that certain words or phrases in a text are linked to overarching themes. Before the coding process started, three mother-nodes were created, and each of them had the same four daughter-nodes:

Role expectations, perception of HRM.

- Positive factors that are helpful for the HRM department - Negative factors / things to avoid for the HRM department

- Positive factors by others that are helpful in letting the HRM department take up the strategic role - Negative factors / things to avoid by others in order for the HRM dept. to take up the strategic role Time, resources and focus spend on the traditional HRM tasks versus the new, more strategic tasks.

- Positive factors that are helpful for the HRM department - Negative factors / things to avoid for the HRM department

- Positive factors by others that are helpful in letting the HRM department take up the strategic role - Negative factors / things to avoid by others in order for the HRM dept. to take up the strategic role The relationship between HRM and line management.

- Positive factors that are helpful for the HRM department - Negative factors / things to avoid for the HRM department

- Positive factors by others that are helpful in letting the HRM department take up the strategic role - Negative factors / things to avoid by others in order for the HRM dept. to take up the strategic role

30 These three mother-nodes were chosen to do justice to both the different HRM roles and tasks that are expected from different stakeholders, and they address both the personal and

contextual level on which the HRM professionals operate.

As for the daughter-nodes, contrasting the negative and positive side by side enhances to the understanding of why it is so difficult for HRM to take up the strategic role, because it is so easy to consider certain developments or factors in both a positive or negative way.

While reading the 170 sources, remarks, recommendations or research results were coded for one of these daughter-nodes. They were not coded in multiple daughter-nodes; when in doubt, the most fitting daughter-node was chosen. After the coding process, the results were grouped into sub-categories for each daughter-node. These are all discussed in separate paragraphs in the Results chapter. For example, sub-categories under the main subject ‘Role expectations, perception of HRM’, are: ‘Contributing strategy’, ‘Personal and professional integrity and credibility’, ‘Influencing different views on HRM from different stakeholders’, and so on. This grouping process went quite naturally, as there was similarity on several themes. In the Discussion chapter, it will be discussed how all these factors combined give us more information of what it means for HRM to be strategic, and how this relates to Ulrich’s 1997 model. In the next chapter, the results of the literature search are presented.

4. RESULTS

ROLE EXPECTATIONS, PERCEPTION OF HRM

HRM + HRM - Others + Others - Role expectations, perception of HRM. X

Time, resources and focus spend on the traditional HRM tasks versus the new, more strategic tasks.

The relationship between HRM and line management.

Contributing to strategy

HRM professionals are increasingly expected to become more flexible, responsive, efficient, and, ultimately, make a strategic contribution to their company, all at the same time (Lepak et

31 al., 2005). For some HRM professionals, the desire to move from a marginal administrative support role to a new and more strategic position is realized when they get a seat at the management table (Caldwell, 2011). This role is very appealing to HRM professionals who want to raise their influence and professional identity. Their credibility and status with top management can be promoted by focusing on the strategic partner role (Brown et al., 2009) because this is partly based on whether or not they are involved in strategic issues (Bowen et al., 2002). When HRM departments are more heavily integrated into strategic planning, other executives perceive the HRM function to be more valuable (Guthrie et al., 2011). Still, a prerequisite for the credibility needed to exercise influence at a strategic level remains HRM’s successful execution of its operational responsibilities (Currie & Procter, 2001).

Clearly presenting the role of HRM and its contribution to organizational success It is important that HRM demonstrates how its strategies significantly enhance to the

organization’s performance (Boudreau & Ramstad, 2002; Lawler III, Levenson & Boudreau, 2004), and that it clearly defines its priorities and roles (Sheehan et al., 2014).

For the HRM director, the holy grail of being recognized in the business partner role is a boardroom position. This can be considered as symbolic capital: it brings with it professional esteem, recognition, status and distinction (Caldwell, 2011). For reasons of clarity it is good though, when the HRM director assesses, shapes, and discusses top management’s

perceptions and expectations with regards to the strategic role of HRM (Bennett, Ketchen Jr. & Shultz, 1998). It is helpful when HRM adopts the dominant ethos of its organization, for example efficiency (Van Buren et al., 2011). When HRM shows how their practices, such as job analysis, are related to tangible results, top management is likely to seek their input more actively (Siddique, 2004). In reciprocity, HRM can invite stakeholders to co-opt in HRM decision making (Kulik & Perry, 2008). That way, HRM can show its role in strategic issues to multiple stakeholders, resulting in instrumental legitimacy by both top management and other employees (Teo & Rodwell, 2007).

32 Personal and professional integrity and credibility

In the acceptance of HRM to be taken seriously by top management, much depends on the credibility of the senior HRM manager. His or her credibility seems to be a much more important ‘treshold’ than it is for, for example, a finance director (Aguinis et al., 2011). The status of the HRM department within the organization is significantly impacted by the education and experience of the HRM director (Reichel, Brandl & Mayrhofer, 2009). It is sometimes helpful when the senior HRM manager has a broader career background. This may provide a level of business knowledge that gives greater credibility at the senior strategic decision-making level (Sheehan, 2005). The credibility, competencies, and integrity of the HRM director seem to determine whether or not they can be a part of the ‘dominant coalition’ (Garavan, 2007). This shows that there is a need for senior, ‘heavyweight’ HRM directors, because they can combine experience, reputation and hierarchical status, and hence they get in the position to make HRM more strategic (Pritchard & Fear, 2015). Both personal credibility (Huselid & Becker, 1999; Pritchard, 2010; McEvoy, Hayton, Warnick, Mumford, Hanks & Blahna, 2005; Caldwell, 2010) and professional credibility (McEvoy et al., 2007; Pritchard & Fear, 2015) are important in being taken seriously. Interpersonal skills are also very important for the senior HRM manager: cognitive skills, communication skills, collaborative skills, and consulting skills (McEvoy et al., 2005; Lawson & Limbrick, 1996). Personal integrity, ethics (Garavan, 2007) and interpersonal people management (Wooten & Elden, 2001) also do have an impact on their effectiveness. Identified critical traits and motives are adaptability,

proactivity, respect, conscientiousness, courage, integrity, energy, and self-esteem (McEvoy et al., 2005). The effect of business credibility therefore can lead to a legitimate HRM

strategic role and hence, it builds the credibility of proposed HRM initiatives (Mitchell et al., 2013).

Influencing different views on HRM from different stakeholders

Different stakeholders have different expectations from HRM. Employees are emphasizing trust, management emphasizes expertise and effective relationships, and top management

33 focusses on the achievement of results (Graham & Tarbell, 2006). Communication can be a good mechanism to show the importance and the involvement of HRM in organizations, for example by publicizing positive information about the HRM department, or by clearly demonstrating HRM’s interest and willingness to satisfy stakeholder expectations (Kulik & Perry, 2008; Garcia-Carbonell, Martin-Alcazar & Sanchez-Gardey, 2014).

HRM professionals can truly make their mark when they succeed in generating shared meanings among top managers, which provide guidelines for future interpretations of HRM, and direct future behaviors throughout the organization. That way, they are ‘impression managers’ (Sheehan et al., 2014). Another way of showing that HRM is aware of its surroundings, and of the needs of its different stakeholders, is finding new threats that the HRM department can control (Kulik & Perry, 2008).

HRM + HRM - Others + Others - Role expectations, perception of HRM. X

Time, resources and focus spend on the traditional HRM tasks versus the new, more strategic tasks.

The relationship between HRM and line management.

Feeling not being up to the strategic task

Not all HRM professionals feel that they are up to the new more strategic role. Some

experience feelings of powerlessness or marginality, especially in decision-making processes at a strategic level (Caldwell, 2003). They also feel that the operational tasks and the more strategic concerns are sometimes wrongly regarded as substitutes for each other (Currie & Procter, 2001), but it is difficult to find the right balance and priorities in this matter. It is also difficult to develop a new outlook to which tasks need to be done. Many HRM professionals come to work every day, do what they think needs to be done or what they like to do, and have not much insight into what really needs to be done in order to impact the organizations’ success in both the short and the long run (Huselid & Becker, 1999). Although many HRM practitioners find it difficult to voice it or to explain, many experience internal role conflicts and ambiguities in serving both the goals of the business and of the employees (Caldwell,