SHRM exam 2021 - strategic human resource management exam questions and answers PDF

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Strategic Human Resource Management Exam 2021

Name: Racheal Campbell Student Number: 20080186

Table of Contents Question One..............................................................................................................................3 Question Two.............................................................................................................................6 Question Three.........................................................................................................................12 Question Four: Part (a).............................................................................................................14 Question Four: Part (b).............................................................................................................15

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Question One: The resource–based view of the firm (RBV) represents a paradigm shift in SHRM thinking by focusing on the internal resources of the organisation, rather than analysing performance in terms of the external context. Discuss the key aspects of the resource-based view of SHRM. Having a resource-based view of a firm is a new way of looking at competitive advantage and looking at resources. Delery and Shaw (2001) states that human capital can be a source of competitive advantage. Staffing organisational resources for example having good organisational systems in place such as HR systems. Organisational structure and good planning in place and controls. Having physical capital resources such as tangible resources such as buildings, equipment, and finances. Human resources that make an organisation unique and gives them sustainable competitive advantages are important to improve the overall performance. Having a resource-based view of a firm looks at what adds value to HRM. The resource-based view of SHRM gives organisations an understanding on how human resources can become scarce and valuable. If an organisation looks at the internal context of their business and identifies their competitive advantages, they can therefore build on their core competencies that are better than their rivals. A core competency is skills and technologies that an organisation can give to their customers that benefits their experience. An example of an organisation core competency is employees having good organisational skills and leadership skills. Barney (1991) believes that gaining competitive advantage is determined by the following internal resources:

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1. Value – when something has value it is contributing to driving sales and reducing costs. In terms of personal, a type of person who has high sales value. An organisation needs to look at what HR functions they currently have or can have that creates economic value for them. If an organisation reduces their costs when regarding HR such as reducing the number of staff, they can lower costs and then they can introduce more flexible working hours for current staff. But they also must consider how they can improve HR practices to help with adding value for the customer and enhancing all customer experiences thus increasing revenue. 2. Rare – looks at how scarce the resource is and how difficult it is to get. An organisation needs to know how rare their competitive advantage is because not only is adding value important, but it cannot have the same value as other companies it needs to be rare. For example, a car sales company having excellent salespeople is a key resource to gain competitive advantages of car sale companies. It is important to invest and retain good employees to ensure horizontal fit. Investing in employees will encourage them to work harder by developing a reward system. It is important when hiring staff to identify rare characteristics in individuals to gain a competitive advantage. 3. Difficult to imitate/copy – are other organisations able to copy what you are doing, meaning if it is easy to imitate that it will not become a competitive advantage. It is important that an organisation has human resources that cannot be easy to imitate by competitors. Having trust and good relationships between employees are assets to the organisation that will give value to the company, which is rare and hard to copy. 4. Non-substitutable – Boxall and Purcell (2003) states that non-substitutability in the resource-based view is a concept that is difficult to make ineffective with other resources that meets the same value.

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The VRIO Framework is when the highest level is achieved when human resources are valuable, rare, and hard to copy. This framework looks at creating organisation support which looks at horizontal integration, helping employees be the best they can be and increase their skills. If a resource does not have value, it is not rare or hard to copy. It does not benefit the organisation or give them a competitive advantage thus it does not help with performance so the organisation should get rid of it. For example, a linen room in a hotel may not show value anymore as it is more beneficial to outsource linen as it reduces labour costs and is more efficient and brings more value. If all the different type of technology has be imitated already such as Apple Airpods, technology becomes easy to copy by other organisations, so it does not become as rare as other organisation are creating cheaper options for customers with the same value. If it is valuable, rare, and not easy to imitate then you will be above average performance for example, regarding customer service employees that have very good skills, knowledge, and attributes. For it to stay there needs to be a horizontal fit and good fit to have a longer-term advantage. Southwest airline company is a main example of gaining competitive advantage using SHRM. The company is hard to imitate as the company has value and culture. If employees are valuable and doing a good job, hiring the best people, and having cultural values is hard to copy thus leading to above average performance. The company has an excellent organisational culture as they believe it is important to put their employees first before their profits and before their customers. They stand out from their competitors as they seek employees that will bring value to their company. They keep employees motivated to go the extra mile and they enjoy serving customers as it is not just about a paycheck for them. Their culture is to go ‘above and beyond each month to show amazing customer service’.

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Question Two: “The design and operation of an HR system takes place within the context of the internal and external environments of the organisation” (Armstrong, 2016, p. 16). Discuss with examples how factors in the internal and external environments can influence an organisation’s choice of HRM strategies, policies, and procedures. External Factors affecting HRM strategies, policies, and procedures. Political/Legal Factors: 

The central plank of government economic policy since the 1960s has been to attract Foreign Direct Investment (FDI). This has created a lot of employment. Many of these are U.S Multinational Companies (MNCs). Many work practices/HR practices these companies utilize have diffused more broadly across workplaces in Ireland for example performance related pay, wide use of incentives, sophisticated HR practices for example the use of psychometric testing, performance appraisal and use of 360-degree feedback, extensive training and development, succession planning, trade union avoidance for example, Ryanair has adopted this practice.

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There is a lot of employment legislation in Ireland that companies must obey to for example, unfair dismissal act. In general employees are well protected through this legislation for example unfair dismissals legislation on employers to ensure that employees are dismissed fairly.

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There is a considerable amount of health and safety legislation in Ireland for example food hygiene, HACCP legislation etc. that workplaces must implement which can be very costly.

Economic Factors: 

During a recession business may close entirely or downsize. This results in layoffs meaning that employees could be made redundant, and hours get reduced. There tends to be little if any recruitment. Cost cutting is a priority so therefore training and development budgets get cut. Rewards may also be cut for example incentives such as bonuses get cut. Pay freeze may be implemented. These cost cutting measures can have a negative effect on employee motivation and morale. These measures can cause tension and a difficult employee relations climate particularly pay cuts, hours reduction and redundancies. Changes in work practices to increase efficiency and productivity.

Labour Market: 

Recession results in unemployment meaning that there is a big pool of experienced people available for hire. It is easy to recruit because there is a large pool of qualified and experienced applicants to draw from.

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When there are high levels of employment it is difficult to recruit externally. Therefore, companies must invest in growing their own through training and development – internal recruitment.

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Organizations must ensure that they have competitive salaries when there is a high level of labour as they need to be attractive to employees to make them want to stay in their specific organization and they need to stay financially competitive, they also need to ensure that highly qualified staff is earning the right amount of money compared to a college graduate.

Socio-cultural factors: 

Increase in female participation in the workforce resulting in many dual career households/families. Work Life balance has become important for organizations for example, providing flexible schedules and working hours, career breaks. Providing onsite childcare as a company benefit.

Technological Factors: 

Technology is increasingly being used across many HR areas for example, when regarding recruitment the use of LinkedIn and Facebook.

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Technology has facilitated remote working as organizations can hire people from across the globe.

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Human Resource technology has proven to be an important factor as the use of HR technology has increased from twenty two percent in 2019 to twenty nine percent in 2020 according to CIPD Ireland.

Examples of Internal Factors affecting HRM strategies, policies, and procedures.

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Organizational size and Structure: 

Small organizations do not have a HR manager (Cannot justify having one – organizations simply too small. General manager and line managers will carry out many HR activities such as selection, training, development, performance management, communication, handling grievances and disciplinary issues. The administrative aspects of HR such as payroll and maintaining personnel records will usually be carried out by an office administrator. Large organizations will have a specialist HR department headed by a HR director which may comprise of many HR specialists for example, recruitment manager, learning training and development manager, pay and benefits specialist etc. Such as Tesco.

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Small organizations are characterized by greater informality where everyone knows one another and are meeting face to face regularly. This facilitates communication. Large organizations are more formal with more written communications and written HR procedures.

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Large organizations have more resources so they can offer a greater range and more sophisticated HR practices for example, more training and development opportunities, greater range of benefits, use of psychometric testing in selection, 360-degree feedback etc.

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Organizational structure means the proper arrangement of people working for the company so that the company achieves its goals. Many customer service organizations empower staff to deal with the customer themselves to deliver excellent service. This means flatter structures with less supervisors/managers. This influences the type of people that an organization wants to attract in the first place. Potential employees need to be comfortable in handling issues that may arise (comfortable with ambiguity). Need to be 9

able to work on their own initiative. This does not suit everybody (Some people prefer to be told exactly what to do they prefer jobs that are very routinised). Where there are empowerment programs in place this also means that there needs to be extensive training of employees and a supportive culture. A high trust culture is important. 

Smaller organizations sometimes do not have the branding power as other bigger organizations, and they need to seek qualified people to hire. A HR department needs to develop their recruitment techniques and go to job fairs to attract new candidates. They need to develop ways to retain important key employees.

Managerial values/ideology: 

Managerial values/ideology incorporate the deeply held beliefs of senior management, which help guide decisions on various aspects of workforce management.

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Values inform culture - “the way we do things around here.”

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Company founders establish values which goes on to inform/create the company culture. For example, Bvlgari, An Italian family jewelry business founded by Sotirio Bvlgari. His personal values were Radiance, Grace, Authentic and tradition of excellence. These are the values of the Bvlgari Hotel group and inform the culture and employee behaviors (lived experience). The service concept is “Informal (being yourself/being authentic) yet Impeccable”.

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If organizational culture is people orientated this will affect choice of HR policies.

Competitive Strategy: 

Concerned with achieving sustainable competitive advantage, for example Porter's five forces and other best fit approaches. 10

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Having a good business strategy will help with the development of human resources within the business as having talented employees are useful assets. Linking HRM with a company’s strategic plan will gain a competitive advantage. Making decisions of internal and external factors is important as the organization needs to look at internal factors such as the mission statement, the organization structure as it is needed when recruiting staff.

Workforce Characteristics: 

Workforces will be characterized by a specific age and skill profile. An aging workforce may require training in areas such as information technology while a younger workforce may need experiential placements to build understanding of the business.

Established HR Practices: Past HRM practice also affects the viability of certain change initiatives for example, while many organizations have experimented with job redesign initiatives, however many employees may not react positively to such initiatives.

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Question Three: Boxall and Purcell provide a useful approach on linking HRM to business performance. Outline and discuss the components of this model. The Boxall and Purcell model that provided a useful approach on linking HRM to business performance was the AMO Model. The AMO model was created by Boxall and Purcell in 2003 which looked at behaviours and the link between HRM and performance. Their model looks at how an individual’s performance is dependent on their ability, motivation, and opportunity. 

Ability to perform within the organisation if they have the right knowledge, skills, and attributes.

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Motivation to perform to the best of their ability, they will go to work because they want to and they enjoy it not just because they must, to make money and that they go above and beyond for their customers.

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Opportunity to perform to the best of their ability with the right facilities around them with efficient work structure and a good working environment and given the needed support to perform.

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Boxall and Purcell say that an employee’s ability, motivation, and opportunity to work to their best ability also depends on the employee’s previous experience, their current health and wellbeing, their intelligence, and their personality in how they communicate with customers. Another factor would be the situational factors of HR policies and practices that are needed for the AMO model. Having the AMO model gives a pathway on HRM practices that needs to be included in high-performance work systems. The AMO model provides a framework for performance enhancements. Having HRM initiatives to improve recruitment and selection procedures, develop more extensive and relevant learning processes and improve talent management helps the ability for employees to perform. Having HRM initiatives to performance management, performance pay and having improving leadership development helps the motivation of employees to perform better and having HRM initiatives regarding job design, work design and career management programmes enhances an employee’s opportunity to perform better. All these factors increase the individuals and the organisations performance overall. When organisations ignore the well-being of their employees this can lead to low performance. Line managers can play a role in this issue by not having the right working environment for their employees or themselves so the moral or the organisation is low hence why there can be low performance. The AMO model helps keep staff motivated using the right HR policies and practices that are needed to increase performance levels. Employees need to be encouraged to do better by having incentives such as performance pay or commission which will also increase their trust with the organisation as they feel valued and wanted by the company as they are being invested in. With no motivation staff tend to leave an organisation thus increasing staff turnover levels which can damage the organisations performance and image.

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Question Four: Part (a) Discuss why some organisations appoint HR business partners to devise and implement HR strategy. An organisation having a HR business partner is viewed as a consultant for the company, so they can work closely with the line managers to make sure that all HR practices are running smoothly and helping to deliver the organisation's business strategy. An organisation can have standalone business partners which look at the relationship between HR and the organisation, to make sure that HR is in line with the team around them and their practices meet the organisation's goals. They ensure that the HR value proposition is effective. Another way of forming business partners is the three-legged stool model when then the human resource services is divided into three different areas of skills/knowledge. The three areas are shared services, centres of excellence and strategic business partners. Having the shared service model helps an organisation to lower their costs and allows the organisation focus more into their HR strategy. Having a HR business partner can help manage all or some parts of an organisation's HR Function for example the pay and benefits department, administration and new organisation-specific HR policies and practices. Some organisations appoint HR business partners to devise and implement HR strategy to maximise the value of the organisation. They are important when trying to reach the business 14

goals and help to achieve the goals. HR business partners have sufficient knowledge regarding HR problems and can fix the issues, they ask questions that need to be answered and find out what is driving a problem in the workplace. They are problem solvers and can help determine what salaries employees should be offered, and how they can improve all employees' experience in the workpl...