Question

Compare the universal and the contingency perspective while developing a SHRM system composed of a philosophy, strategies, policies and practices.

B)Based on your comparison, give 3 recommendations on how to develop a SHRM system in an organisation/company operating in a VUCA environment.

Answer 1

Answer:

The universalistic perspective starts with the premise that there exists a relationship between the adoption of particular strategic HRM practices and increased organizational performance. It proposes ‘best practices’ that when adopted and implemented would contribute positively to financial performance regardless of the strategic goals of the organization. Further, there is an assumption that strategic HRM practices have an effect on employee motivation as well as increased efficiency. Delery and Doty have identified seven ‘best practices’ which are "internal career opportunities, formal training systems, appraisal measures, profit sharing, employment security, voice mechanisms, and job definition." These are considered as crucial aspects of the employment system that affects performance.

The contingency approach, on the other hand, proposes another way to elicit increased performance. It suggests that organisations need to adapt their strategic HRM practices as per the business strategy that is being employed. Higher organisational performance is achieved through the interaction between the firm’s strategy and HRM. The approach denotes external fit and proponents are of the view that contingency models are better suited to HRM. HRM practices that are not consistent with business strategies and are in conflict with other HRM practices create confusion or ambiguity which may lead to decreased performance for the employees and the organisation. By using contingency theory the organization can promote employee behaviours that are consistent with the business strategy of the firm because behaviour comes from ability and motivation, therefore the organizations can implement HR practices to recruit the individuals they need while promoting policies which motivate the employee to work in harmony with the said strategy.

3 recommendations on how to develop a SHRM system in an organisation/company operating in a VUCA environment:

VUCA is an acronym that stands for volatility, uncertainty, complexity and ambiguity, a combination of qualities that, taken together, characterize the nature of some difficult conditions and situations.

For such organisations, one should implement contingency approach to design SHRM. Following are the recommendations:

1. One should align the business practices with the policies of the SHRM. Business practices are in lines with the requirements of the clients. The stakeholders of the business will never want to get associated with the VUCA kind of organisation. Hence, HRM would be required to reframe its policies by including several rules and regulations for the employees to act in the direction of the benefit of the company.

2. SHRM should introduce a system for effective flow of communication among all of the stakeholders of the company so that the ambiguity and complexity factor could be eliminated from the company.

3. SHRM should make a provision for the training of the human resources of the company so that they could be provided with the knowledge of working in lines with the formulated business strategy in lines with the requirements of the clients.