Strategy, human resource management and performance:Sharpening line of sight
abstract
This paper builds on previous theory and research on strategy and human resource management to identify important linkages between the firm's strategy, its human resources, and performance outcomes. First, we review the relevant literature focusing in particular on the role of human resources in creating competitive advantage. We then present
a multi-level model illustrating how human resource management practices can effectively align organizational, group and individual factors with the organization's strategy. We redefine line of sight as the alignment of organizational capabilities and culture, group competencies and norms,and individual KSAs, motivation and opportunity with one another and with the organization's strategy. Further, we propose that such alignment contributes to the creation of human capital and social capital, both of which are necessary to achieve and sustain superior performance.
We conclude the paper with some implications for future research and practice.
1. Introduction
Theories of strategic management have historically acknowledged the importance of internal activities, resources or capabilities as potentially important sources of competitive advantage. Porter's (1985) seminal work on competitive advantage acknowledged the need to effectively link an integrated configuration of internal value chain activities to the intended business strategy. Subsequent work on strategic management has focused on resource- and knowledge-based views of the firm, arguing that internal resources are essential to building and sustaining competitive advantage (Barney, 1991; Grant, 1996). Central to emerging perspectives on strategy is the role of the firm's human resources in creating and sustaining superior performance through human and social capital (Wright, Dunford, & Snell, 2001). Indeed, there is growing evidence that human resource management practices can positively affect organizational performance (Boselie, Dietz, & Boon, 2005; Combs, Liu, Hall, & Ketchen, 2006;Huselid, 1995). However, the specific mechanisms by which human resources affect firm performance are not clearly understood(Collins & Smith, 2006; Guest, 2011; Paauwe, 2009).The purpose of this paper is to build on previous theory and research on strategy and human resource management to identify important linkages between the firm's strategy, its human resources, and performance outcomes. Specifically, this paper extends the work of Boswell and her colleagues (Boswell, 2006; Boswell, Bingham, & Colvin, 2006; Boswell & Boudreau, 2001; Colvin & Boswell, 2007) to present a framework for creating a clear “line of sight,” from strategy to implementation at all levels of the firm organizational, group, and individual. As originally conceived, “line of sight” (LOS) refers to an employee's understanding of the firm's strategic goals as well as the actions necessary to accomplish the goals (Boswell et al., 2006). Boswell (2006) found that employees' understanding of how to contribute to the organization's strategic goals was more important than understanding those goals perse.However,while this study shed some light on the relation of LOS to individual employeework outcomes like job satisfaction and turnover, only a modest amount of variance was explained by the LOS construct. Further, Boswell's LOS framework focused only on the individual level of analysis. Boswell (2006) acknowledged the limitations of hermodel and recommended that future conceptualizations and research also include group and organizational level factors to develop amore comprehensive understanding of the mechanisms influencing LOS. Several other authors have cited the need for multi-level or cross-level models to more fully examine the relationships among various contextual variables, HRM practices, employee behaviors, and performance outcomes (Guest, 2011;Ostroff & Bowen, 2000; Paauwe, 2009). This paper redefines the LOS framework by including group and organizational levels of analysis, and by creating a more complete model of the relationships among strategy, human resource management, and performance.Our proposed model shows how strategically aligned HRM practices contribute to the creation of human capital and social capital,both of which are necessary to achieve and sustain superior performance.
This paper is organized as follows. First, we review the relevant literature on strategy and human resource management,focusing in particular on the role of human resources in creating competitive advantage. The resource based view (RBV) provides the overarching theoretical foundation for our framework linking strategy, human resource management and performance. From an RBV perspective, HRM practices are thought to create human capital and/or social capital that lead to superior performance.While recognizing that RBV has been criticized on several fronts (Kraaijenbrink, Spender, & Groen, 2010), we believe that it provides a useful meta-framework to explain how firms can achieve and sustain superior performance by effectively aligning strategy and human resource management practices to create both human and social capital.We then present a model that illustrates how human resource management practices can effectively link organizational, group, and individual activities with the firm's strategic goals. The primary argument advanced in this paper is that organizational performance will be enhanced to the extent that organizational capabilities and culture, group competencies and norms, and employee skills, motivation and opportunity are aligned with the firm's strategic goals (i.e., there is a clear “line of sight”). This multi-level framework goes beyond previous conceptualizations of LOS to incorporate organizational and group factors that facilitate the effective formulation, implementation and adaptation of strategy. We conclude the paper with some implications for future research and practice.
กลยุทธ์ การจัดการทรัพยากรมนุษย์ และประสิทธิภาพการทำงาน: สายตาของเส้นคมชัดบทคัดย่อเอกสารนี้สร้างขึ้นตามทฤษฎีก่อนหน้านี้และงานวิจัยเกี่ยวกับกลยุทธ์และการจัดการทรัพยากรมนุษย์การระบุเชื่อมโยงที่สำคัญระหว่างของบริษัทกลยุทธ์ ทรัพยากรมนุษย์ ความประสิทธิภาพผลลัพธ์ ครั้งแรก เราทบทวนวรรณคดีที่เกี่ยวข้องโดยเฉพาะอย่างยิ่งเน้นบทบาทของทรัพยากรมนุษย์ในการสร้างประโยชน์จากการแข่งขัน เรานำเสนอแล้ว ระดับหลายรูปแบบวิธีบริหารจัดการทรัพยากรมนุษย์การแสดงได้อย่างมีประสิทธิภาพสามารถจัดกลุ่ม องค์กรและแต่ละปัจจัยกับกลยุทธ์ขององค์กร เรากำหนดบรรทัดของสายตาเป็นการจัดแนวของความสามารถขององค์กร และวัฒนธรรม กลุ่มความสามารถ และ บรรทัดฐาน และแต่ละ KSAs แรงจูงใจ และโอกาสอื่น และกลยุทธ์ขององค์กร ต่อไป เราเสนอว่า ตำแหน่งดังกล่าวสนับสนุนการสร้างทุนมนุษย์และทุนทางสังคม ซึ่งทั้งสองเป็นสิ่งจำเป็นเพื่อให้บรรลุ และรักษาประสิทธิภาพเราสรุปกระดาษบางผลการวิจัยในอนาคตและการฝึก1. บทนำTheories of strategic management have historically acknowledged the importance of internal activities, resources or capabilities as potentially important sources of competitive advantage. Porter's (1985) seminal work on competitive advantage acknowledged the need to effectively link an integrated configuration of internal value chain activities to the intended business strategy. Subsequent work on strategic management has focused on resource- and knowledge-based views of the firm, arguing that internal resources are essential to building and sustaining competitive advantage (Barney, 1991; Grant, 1996). Central to emerging perspectives on strategy is the role of the firm's human resources in creating and sustaining superior performance through human and social capital (Wright, Dunford, & Snell, 2001). Indeed, there is growing evidence that human resource management practices can positively affect organizational performance (Boselie, Dietz, & Boon, 2005; Combs, Liu, Hall, & Ketchen, 2006;Huselid, 1995). However, the specific mechanisms by which human resources affect firm performance are not clearly understood(Collins & Smith, 2006; Guest, 2011; Paauwe, 2009).The purpose of this paper is to build on previous theory and research on strategy and human resource management to identify important linkages between the firm's strategy, its human resources, and performance outcomes. Specifically, this paper extends the work of Boswell and her colleagues (Boswell, 2006; Boswell, Bingham, & Colvin, 2006; Boswell & Boudreau, 2001; Colvin & Boswell, 2007) to present a framework for creating a clear “line of sight,” from strategy to implementation at all levels of the firm organizational, group, and individual. As originally conceived, “line of sight” (LOS) refers to an employee's understanding of the firm's strategic goals as well as the actions necessary to accomplish the goals (Boswell et al., 2006). Boswell (2006) found that employees' understanding of how to contribute to the organization's strategic goals was more important than understanding those goals perse.However,while this study shed some light on the relation of LOS to individual employeework outcomes like job satisfaction and turnover, only a modest amount of variance was explained by the LOS construct. Further, Boswell's LOS framework focused only on the individual level of analysis. Boswell (2006) acknowledged the limitations of hermodel and recommended that future conceptualizations and research also include group and organizational level factors to develop amore comprehensive understanding of the mechanisms influencing LOS. Several other authors have cited the need for multi-level or cross-level models to more fully examine the relationships among various contextual variables, HRM practices, employee behaviors, and performance outcomes (Guest, 2011;Ostroff & Bowen, 2000; Paauwe, 2009). This paper redefines the LOS framework by including group and organizational levels of analysis, and by creating a more complete model of the relationships among strategy, human resource management, and performance.Our proposed model shows how strategically aligned HRM practices contribute to the creation of human capital and social capital,both of which are necessary to achieve and sustain superior performance.This paper is organized as follows. First, we review the relevant literature on strategy and human resource management,focusing in particular on the role of human resources in creating competitive advantage. The resource based view (RBV) provides the overarching theoretical foundation for our framework linking strategy, human resource management and performance. From an RBV perspective, HRM practices are thought to create human capital and/or social capital that lead to superior performance.While recognizing that RBV has been criticized on several fronts (Kraaijenbrink, Spender, & Groen, 2010), we believe that it provides a useful meta-framework to explain how firms can achieve and sustain superior performance by effectively aligning strategy and human resource management practices to create both human and social capital.We then present a model that illustrates how human resource management practices can effectively link organizational, group, and individual activities with the firm's strategic goals. The primary argument advanced in this paper is that organizational performance will be enhanced to the extent that organizational capabilities and culture, group competencies and norms, and employee skills, motivation and opportunity are aligned with the firm's strategic goals (i.e., there is a clear “line of sight”). This multi-level framework goes beyond previous conceptualizations of LOS to incorporate organizational and group factors that facilitate the effective formulation, implementation and adaptation of strategy. We conclude the paper with some implications for future research and practice.
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