Module 2: Strategic Human Resource Management
NQF LEVEL 7 – 15 CREDITS*
Published by Business Management Training College (Pty) Ltd
147 Second Road, Chartwell, Fourways, 2191
Private Bag X100, Bryanston, 2021
Tel: 011-708-0159, Fax: 086-639-4687 | E-mail: info@bmtcollege.ac.za
www.bmtcollege.ac.za
© Copyright 2025 - All rights reserved
No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying,
recording, or otherwise, without the prior written permission of the copyright owner,
Business Management Training College (Pty) Ltd.
2025 Third Edition
First Print August 2025
*SAQA equates one credit with ten notional hours of study. Credits include all studies
related to this module, including prescribed and recommended research, assignments
and work-related projects if required. Credits will only be granted upon successful
completion of the full programme.
Author: Bernadine van der Linde
Contributor: Dr Yvonne Joubert
Editors: Jako Poolman, Zoe Auths, Elzaan van der Merwe
TABLE OF CONTENTS
PRESCRIBED TEXTBOOK REFERENCES .......................................................... VIII
CHAPTER 1: GAINING A COMPETITIVE ADVANTAGE ......................................... 2
1.1
INTRODUCTION ......................................................................................... 3
1.2
WHAT IS THE HUMAN RESOURCE MANAGEMENT FUNCTION? .......... 3
1.3
ACTIVITIES OF THE HR FUNCTION ......................................................... 5
1.4
THE RESPONSIBILITIES AND ROLES OF THE HR FUNCTION .............. 5
1.5
THE STRATEGIC ROLE OF THE HR FUNCTION ..................................... 8
1.5.1
Becoming a strategic partner ..................................................................... 10
1.5.2
The human capital developer (change agent) ........................................... 11
1.5.3
Functional expert (Administrative expert) .................................................. 12
1.5.4
Employee advocate (employee champion) ................................................ 12
1.6
THE TASK AND SCOPE OF HUMAN RESOURCE MANAGEMENT ....... 13
1.6.1
Determining and formulating policy ........................................................... 13
1.6.2
Advising ..................................................................................................... 14
1.6.3
Rendering a service................................................................................... 14
1.6.4
Controlling employee affairs ...................................................................... 14
1.7
COMPETITIVE CHALLENGES INFLUENCING HUMAN RESOURCE
MANAGEMENT ......................................................................................... 14
1.7.1
The Challenge of Sustainability ................................................................. 14
1.7.2
The Global Challenge ................................................................................ 17
1.7.3
The Technology Challenge ........................................................................ 18
1.8
MEETING COMPETITIVE CHALLENGES THROUGH HRM PRACTICES
.................................................................................................................. 18
1.9
PROFESSIONALISATION OF HRM IN SOUTH AFRICA ......................... 19
1.10
CHALLENGES FACING HR MANAGERS IN THE 21ST CENTURY. ........ 20
1.11
STRATEGIC COMPETENCIES FOR HR PROFESSIONALS .................. 23
1.12
SUMMARY ................................................................................................ 26
Module 2: Strategic Human Resources Management
i
CHAPTER 2: STRATEGIC HUMAN RESOURCE MANAGEMENT........................ 28
2.1
INTRODUCTION ....................................................................................... 29
2.2
THE CONTRIBUTION OF STRATEGIC HR ............................................. 31
2.3
WHAT IS STRATEGIC MANAGEMENT? ................................................. 37
2.4
WHAT IS STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)? 38
2.4.1
Components of the strategic management process .................................. 40
2.5
THE DIFFERENCE BETWEEN STRATEGY FORMULATION AND
STRATEGY IMPLEMENTATION .............................................................. 44
2.6
THE ROLE OF HRM IN STRATEGY FORMULATION.............................. 47
2.6.1
The administrative linkage ......................................................................... 48
2.6.2
One-way linkage ........................................................................................ 48
2.6.3
Two-way linkage ........................................................................................ 49
2.6.4
Integrative linkage ..................................................................................... 49
2.7
SUMMARY ................................................................................................ 52
CHAPTER 3: STRATEGIC HUMAN RESOURCE PLANNING (SHRP) .................. 55
3.1
INTRODUCTION ....................................................................................... 56
3.2
TYPES OF HR PLANNING ....................................................................... 56
3.3
STRATEGY-LINKED HRP ........................................................................ 59
3.4
CONSEQUENCES OF POOR HRP .......................................................... 62
3.5
ELEMENTS OF STRATEGIC HUMAN RESOURCE PLANNING (SHRP) 64
3.6
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING (SHRP)
PROCESS ................................................................................................. 64
3.6.1
Establishing the mission, vision and values ............................................... 64
3.6.2
Conduct an external analysis .................................................................... 65
3.6.3
Conduct an internal analysis ..................................................................... 67
3.7
THE HUMAN RESOURCE PLANNING PROCESS .................................. 73
3.8
FORECASTING HUMAN RESOURCE DEMAND AND SUPPLY ............. 73
3.8.1
Forecasting Demand ................................................................................. 74
ii
© Business Management Training College (Pty) Ltd
3.8.2
Forecasting supply .................................................................................... 75
3.9
QUALITATIVE AND QUANTITATIVE FORECASTS ................................. 76
3.9.1
Qualitative forecasting methods ................................................................ 77
3.9.2
Quantitative forecasting methods .............................................................. 86
3.10
MANAGING LABOUR SURPLUS AND SHORTAGE ................................ 90
3.11
FORMULATING AND IMPLEMENTING STRATEGIES TO DEAL WITH
LABOUR SURPLUSSES OR SHORTAGES ............................................. 90
3.11.1
Generic business level strategies .............................................................. 90
3.12
SUCCESSION PLANNING ....................................................................... 92
3.13
SUMMARY ................................................................................................ 92
CHAPTER 4: RESEARCH METHODS .................................................................... 94
4.1
INTRODUCTION ....................................................................................... 94
4.2
THE NATURE OF RESEARCH ................................................................. 94
4.3
TYPES OF RESEARCH ............................................................................ 95
4.3.1
Basic (also called fundamental or pure) research ..................................... 95
4.3.2
Applied research........................................................................................ 95
4.4
INTRODUCTION TO HR MEASUREMENTS ............................................ 96
4.5
HR METRICS ............................................................................................ 97
4.6
HR RESEARCH TECHNIQUES ................................................................ 99
4.6.1
Surveys ................................................................................................... 100
4.6.2
Exit interviews ......................................................................................... 102
4.6.3
Historical study ........................................................................................ 102
4.6.4
Controlled experiments ............................................................................ 103
4.7
SUMMARY .............................................................................................. 103
CHAPTER 5: THE ANALYSIS AND DESIGN OF WORK ..................................... 105
5.1
INTRODUCTION ..................................................................................... 106
5.2
WHY WORK ANALYSIS MATTERS ....................................................... 108
Module 2: Strategic Human Resources Management
iii
5.3
WORKFLOW AND ORGANISATIONAL STRUCTURE ........................... 108
5.3.1
Workflow analysis .................................................................................... 109
5.3.2
Organisational structure .......................................................................... 112
5.4
JOB ANALYSIS ....................................................................................... 120
5.4.1
The importance of job analysis in strategic HRM .................................... 121
5.4.2
Job analysis information .......................................................................... 127
5.4.3
Job analysis Methods .............................................................................. 127
5.5
JOB DESIGN ........................................................................................... 130
5.5.1
Mechanistic approach.............................................................................. 131
5.5.2
Motivational approach ............................................................................. 132
5.5.3
The biographical approach ...................................................................... 133
5.5.4
Perceptual-motor approach ..................................................................... 134
5.6
SUMMARY .............................................................................................. 138
iv
© Business Management Training College (Pty) Ltd
LIST OF FIGURES
Figure 1.1: Illustrates the human resource management practices. ........................... 5
Figure 1.2: The David Ulrich Model of human resource roles .................................. 10
Figure 1.3: Scenario for the future of HRM............................................................... 22
Figure 1.4: SHRM BASK overview ........................................................................... 25
Figure 2.1: The cover of HBR 2015 .......................................................................... 29
Figure 2.2: Outcomes of strategic HR ...................................................................... 31
Figure 2.3: A model of Strategic Human Resource Management ............................ 39
Figure 2.4: A model of the strategic management process ...................................... 41
Figure 2.5: Variables to be considered in strategy implementation .......................... 44
Figure 2.6: Linkages of strategic planning and HRM ................................................ 48
Figure 3.1: External influences on workforce planning ............................................. 67
Figure 3.2: A model for HR forecasting .................................................................... 70
Figure 5.1: Process of developing a work-unit activity analysis.............................. 109
LIST OF TABLES
Table 1.1: Responsabilities of HR departments ......................................................... 6
Table 1.2: HR as a business with three product lines................................................. 7
Table 1.3: An excerpt from the Kins IV report on sustainability ................................ 16
Table 1.4: YouTube video about social sustainability ............................................... 17
Table 2.1: Excerpt from the Forbes article: Rethinking HR ...................................... 29
Table 2.2: Traditional HR versus strategic hr ........................................................... 32
Table 2.3: Scenario Fashion Line SA facing new market opportunities ................... 33
Table 2.4: Excerpt from a research study about SAA’s failure ................................. 34
Table 2.5: Excerpt SAA Failure root causes............................................................. 35
Table 2.6: Strategy formulation vs Strategy Implementation .................................... 45
Table 2.7: Quick Analogy ......................................................................................... 46
Table 2.8: Practical example to explain the linkages ................................................ 49
Table 2.9: Table to explain the various levels of HR Strategy integration ................ 50
Table 3.1: Putting theory to practice ......................................................................... 57
Table 3.2: Linking strategic planning and human resources .................................... 60
Module 2: Strategic Human Resources Management
v
Table 3.3: SWOT analysis: Shoprite Holdings LTD .................................................. 68
Table 3.4: Putting theory into practice - SWOT analysis Shoprite ............................ 69
Table 3.5: Options for reducing an expected labour surplus .................................... 75
Table 3.6: Options for avoiding labour shortages ..................................................... 76
Table 3.7: Practical Scenario: Using Managerial Estimates to Forecast HR Needs . 78
Table 3.8: putting theory into practice - The delphi technique .................................. 80
Table 3.9: Practical Example: Using Scenario Analysis to Forecast HR Needs ....... 83
Table 3.10: Summary - Qualitative forecasting methods .......................................... 86
Table 3.11: Quantitative forecasting methods .......................................................... 87
Table 4.1: List of the leading HR Journals in South Africa ....................................... 96
Table 4.2: List of the leading HR Magazines in South Africa .................................... 97
Table 5.1: Excerpt from "are we really more productive working from home” ........ 107
Table 5.2: The characteristics of mechanistic and organic organisations............... 120
Table 5.3: How today's South African Organisations force HR to rethink job analysis
............................................................................................................................... 122
Table 5.4: Major elements of various approaches to job design ............................ 131
Table 5.5: Putting theory to practice ....................................................................... 135
Table 5.6: Understanding the trade-offs between the approaches ......................... 138
vi
© Business Management Training College (Pty) Ltd
ASSESSMENTS
All assessment instruments (formative assessment and summative assessments)
must adhere to the rules and standards as indicated in the BMT College’s overall
assessment policy, programme development policy and the Exit Level Outcomes and
Associated Assessment Criteria (ELO/ACC) as outlined in this curriculum document.
Students must complete seven modules. The assessments for each module include a
formative and a summative assessment.
For each module, formative assignments are completed online. The pass mark for
formative assignments is 50%. Each formative assignment may be attempted more
than once. The final formative assignment mark will be the highest results obtained
by the due date for the specific assignment.
Summative assignments are completed online, and students are required to achieve
a minimum mark of 50% to pass the summative assignment. Students are allowed two
opportunities per module to complete and pass a summative assignment. Subject to
approval by the Academic Council, a student may be granted permission for a third
opportunity to attempt a summative assignment for a module at a specific date and
pay an additional submission fee. However, an assignment submitted for a third
attempt will be capped at 65%.
A formative assignment counts 25% towards the module mark, and a summative
assignment counts 75% towards the module mark. The six modules for the
programme carry a combined weight of 75% toward the final course average. A
research project must be completed at the end of the academic year. The pass mark
for the research project is 50%. Phases 1 and 2 of the research component carry a
weight of 25% towards the final year mark.
Module 2: Strategic Human Resources Management
vii
PRESCRIBED TEXTBOOK REFERENCES:
Please refer to the prescribed textbook section on the Virtual Campus for access to
your textbooks as well as what to read for each module.
viii
© Business Management Training College (Pty) Ltd
CHAPTER ONE
Gaining a
Competitive
Advantage
IN THIS CHAPTER:
1.1
INTRODUCTION ......................................................................................... 3
1.2
WHAT IS THE HUMAN RESOURCE MANAGEMENT FUNCTION? .......... 3
1.3
ACTIVITIES OF THE HR FUNCTION ......................................................... 5
1.4
THE RESPONSIBILITIES AND ROLES OF THE HR FUNCTION .............. 5
1.5
THE STRATEGIC ROLE OF THE HR FUNCTION ..................................... 8
1.6
THE TASK AND SCOPE OF HUMAN RESOURCE MANAGEMENT ....... 13
1.7
COMPETITIVE CHALLENGES INFLUENCING HUMAN RESOURCE
MANAGEMENT ......................................................................................... 14
1.8
MEETING COMPETITIVE CHALLENGES THROUGH HRM PRACTICES
.................................................................................................................. 18
1.9
PROFESSIONALISATION OF HRM IN SOUTH AFRICA ......................... 19
1.10
CHALLENGES FACING HR MANAGERS IN THE 21ST CENTURY. ........ 20
1.11
STRATEGIC COMPETENCIES FOR HR PROFESSIONALS .................. 23
1.12
SUMMARY ................................................................................................ 26
INTRODUCTION
CHAPTER 1: GAINING A COMPETITIVE ADVANTAGE
AT THE END OF THIS CHAPTER, YOU SHOULD BE ABLE TO:
•
Discuss the roles and activities of an organisation’s HRM function.
•
Discuss the implications of the economy, the composition of the labour force,
and ethics for organisational sustainability.
•
Provide an overview of human resource practices.
•
Discuss current issues and challenges facing human resources today.
•
Discuss the professionalisation of human resource management in South
Africa.
CONCEPTS AND VOCABULARY
•
Competitiveness refers to a company’s ability to maintain and gain market
share in the industry (Noe et al., 2023).
•
Human resource management refers to the policies, practices, and systems
that influence employees' behaviour, attitudes and performance (Noe et al.,
2015).
•
Strategic human resource management (SHRM) is a focus on the integration
and alignment of all HR policies with one another and with the overall strategy
and direction of the organisation (Noe et al., 2023).
•
Strategic choice refers to the organisation’s strategy, the way an organisation
will attempt to fulfil its mission and achieve its long-term goals (Noe et al., 2023).
•
Sustainability refers to an organisation's ability to achieve financial success
without sacrificing the resources of its employees, communities, or the
environment (Noe et al., 2015). Brevis and Vrba (2017) elaborate that
sustainability refers to the long-term maintenance of systems according to
environmental, economic and social considerations.
2
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
1.1
INTRODUCTION
Welcome to the second module of the Advanced Diploma in Human Resource
Management or Diploma in Business Management. In this module, we shift our focus
from operational HR practices to a more strategic perspective, exploring how HRM
plays a critical role in shaping and supporting organisational strategy.
The purpose of this module is to help you understand the broader roles and activities
of the Human Resource Management function within the context of strategic
management. You will learn how HR professionals contribute to long-term
organisational goals by aligning human capital with business strategy.
We examine current issues and challenges facing HRM today, such as globalisation,
talent retention, technology, diversity, and ethical leadership. Special attention is given
to the professionalisation of HRM in South Africa, including recent efforts to
standardise and elevate the HR profession to meet global and local demands.
Finally, this module explores how HR leaders actively participate in strategy
formulation, working alongside top management to ensure that the organisation not
only survives but thrives in a competitive environment.
By the end of this module, you will have a deeper understanding of how HRM moves
beyond administration to become a strategic partner in driving organisational success.
1.2
WHAT IS THE HUMAN RESOURCE MANAGEMENT
FUNCTION?
Organisational functions play a pivotal role in enabling businesses to respond
effectively to changes in the dynamic external environment. Among these, the Human
Resource (HR) function stands out as it focuses on analysing how an organisation's
human assets can contribute to long-term value creation and sustainable competitive
advantage.
To remain competitive, the HR function must proactively address issues such as
employee recruitment and selection, while also responding to the evolving needs and
Module 2: Strategic Human Resources Management
3
WHAT IS THE HUMAN RESOURCE MANAGEMENT FUNCTION?
expectations of employees. This includes monitoring and managing compensation,
reward systems, training and development, and empowerment initiatives (Okumus et
al., 2010).
According to Wärnich et al. (2022), Human Resource Management (HRM) refers to
a range of coordinated activities aimed at acquiring, developing, and retaining
competent employees who support the organisation’s mission. In this sense, HRM
forms an integral part of the broader management process, with a direct focus on
managing people to help the organisation achieve its goals and maintain a competitive
edge (Nieman & Bennett, 2014).
Competitiveness in this context refers to an organisation’s ability to increase and
sustain its market share within a specific industry. Given today’s fast-paced business
environment, Noe et al. (2023) argue that the HR function must play an increasingly
strategic role in creating and maintaining competitive advantage. For HRM to be truly
effective, its practices must be aligned with the overall business strategy and must
contribute services and value that customers recognise.
Human resource management (HRM) refers to the “policies, practices, and systems
that influence employees’ behaviour, attitudes and performance” (Noe et al., 2023).
Noe et al. (2023) identify several key HRM practices, outlined in Figure 1.1, that can
enhance organisational performance. However, to truly maximise the effectiveness of
these practices, it is essential to consider the strategic intent that underpins each
one. Strategic alignment ensures that every HR initiative supports the broader
organisational direction, helping the company to adapt, compete, and thrive in an everchanging environment.
4
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
FIGURE 1.1: ILLUSTRATES THE HUMAN RESOURCE MANAGEMENT
PRACTICES.
Source: Noe et al., 2023, p. 3
Figure 1.1 illustrates HRM practices which include:
Analysing and designing work, determining human resource needs (planning),
attracting potential employees (recruiting), choosing suitable employees (selection),
training employees in their current jobs and preparing them for future careers (training
and development), rewarding good performance (compensation and benefits),
evaluating performance (performance management), and creating a positive work
environment (employee relations).
1.3
ACTIVITIES OF THE HR FUNCTION
The role of the HRM function has been evolving from being purely administrative to
becoming a strategic partner contributing to the business strategy based on the
consideration of human resources. Therefore, Noe et al. (2021) argue that practically
every HRM function is undergoing a transformation process to establish a function that
can successfully perform its other tasks and play this new strategic role. Therefore, to
understand the transformation process of the HRM function, one must understand the
HRM activities in terms of their strategic value (Noe et al., 2015).
1.4
THE RESPONSIBILITIES AND ROLES OF THE HR FUNCTION
Integrated HR functions are increasingly effective at assisting managers in attracting,
developing, engaging, and keeping talented workers (Noe et al., 2021). Additionally,
the HR function has to collaborate with other management functions on recruiting,
performance management and disciplinary matters to improve the organisation's
Module 2: Strategic Human Resources Management
5
THE RESPONSIBILITIES AND ROLES OF THE HR FUNCTION
quality and productivity. Thus, the HR department may take full responsibility for
human resource activities or share roles and responsibilities with other departments
such as finance, operations, or information technology.
Table 1.1 illustrates the responsibilities of HR Departments.
TABLE 1.1: RESPONSABILITIES OF HR DEPARTMENTS
Analysis and design of work
Recruitment and Selection
Training and Development
Performance Management
Compensation and Benefits
Employee Relations/Labour Relations
Personnel Policies
Employee data and information systems
Legal compliance
Support for business strategy
Job analysis, work analysis, job
descriptions.
Recruitment, posting job descriptions,
interviewing, testing, and the coordinated
use of temporary employees.
Orientation, skills training, and development
programmes, career development
Performance measures, preparation and
administration of performance appraisals,
feedback, coaching, and discipline.
Wage and salary administration, incentive
pay, insurance, holiday, retirement plans,
profit sharing, health and wellness, stock
plans.
Attitude surveys, employee handbooks,
labour law compliance, relocation and
outplacement services.
Policy creation, policy communication.
Record keeping, HR information systems,
workforce analytics, social media, Intranet
and Internet access.
Policies to ensure lawful behaviour, safety
inspections, accessibility accommodations,
privacy policies, and ethics.
Human resource planning and forecasting,
talent management, change management,
organisational development.
Source: Noe et al., 2023, p. 4
According to Noe et al. (2015), it is unlikely that any function can effectively deliver on
all its roles and activities. Therefore, the organisation's HR executive is responsible for
making strategic choices about where and how to allocate the resources to maximise
the organisation's value and maintain its competitive advantage.
Noe et al. (2023) suggest thinking of the roles and responsibilities of the HR
department as a business within the company with three product lines; as illustrated
in Table 1.2.
6
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
TABLE 1.2: HR AS A BUSINESS WITH THREE PRODUCT LINES
Source: Noe et al., 2023, p. 5
Let us now explore the analogy of Noe et al. (2023) to better understand the roles and
responsibilities of the Human Resource (HR) department within the broader
organisation:
Product line 1: Administrative Services and Transactions
This is the first product line and represents the traditional, foundational responsibilities
of HR. It includes essential day-to-day services such as:
•
Payroll processing
•
Maintaining employee records
•
Administering benefits
•
Ensuring compliance with labour laws
This ‘product’ focuses on efficiency, accuracy, and cost-effectiveness. While it may
not directly drive competitive advantage, it is critical to the smooth functioning of the
organisation.
Product line 2: Business Partner Services
The second product line positions HR as a consultative partner to managers across
departments. HR helps managers identify and solve people-related problems that
affect business performance.
Module 2: Strategic Human Resources Management
7
THE STRATEGIC ROLE OF THE HR FUNCTION
Services here include:
•
Recruitment and talent acquisition
•
Performance management support
•
Training and development advice
•
Succession planning
•
Employee relations
In this role, HR supports managers in implementing policies and making informed
decisions that enhance team performance and productivity.
Product line 3: Strategic Partner
The third and most impactful product line casts HR as a strategic partner involved in
long-term planning and organisational development. At this level, HR contributes to:
•
Shaping organisational culture
•
Workforce planning aligned with strategic goals
•
Leadership development
•
Organisational restructuring
•
Driving innovation through people
Here, HR is no longer just an administrative function but an active player in strategy
formulation and execution. This role aligns human capital practices with the
organisation's mission, vision, and long-term objectives, helping to secure a
sustainable competitive advantage.
1.5
THE STRATEGIC ROLE OF THE HR FUNCTION
Before the 1970s, all personnel and administrative systems were referred to as the
Personnel Department. The primary role of the personnel department was to maintain
employee records and information. In those years, a highly effective personnel
department was responsive to numerous administrative and transactional requests.
According to Paauwe and Boon (2018), numerous developments have occurred in this
area since human resource management (HRM) emerged as a field of scientific study
8
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
in the 1980s. During this time, the management of employees’ issues became much
more complex. As a result, legislation to protect workers regarding issues such as
occupational health, safety, pay and employment equity proliferated. Furthermore,
according to Wärnich et al. (2022), behavioural sciences demonstrated that managing
people more like resources, as opposed to components of production or individuals
who make decisions exclusively based on emotion, might have actual advantages for
the organisation, employer and the employee.
Environmental, social, and technological changes, the internationalisation of business
and the increased scarcity resulted in a need for change. In addition, organisations
were operating in a much more complex, competitive and challenging environment.
Many of these issues have consequences for the HR function since they directly affect
the organisation's human side. As a result, the requirements placed upon HR functions
and those who work in them have changed significantly (Robinson & Robinson, 2008).
Fun fact: The first personnel management department was recorded at the National Cash
Register Co. in the early 1900s, NCR chief John H. Patterson established a
personnel department to handle complaints, dismissals, safety, and supervisor training
on new regulations and procedures following repeated strikes and employee lockouts.
In addition to the more traditional requirements, which include recruitment,
compensation and training, etc., HR departments must operate more strategically and
proactively. In other words, most of the HR department’s time and resources are
focused on optimising workplace performance to maximise the organisation's results.
The amount of effort HR functions spend on administrative activities is reducing, but
their roles as strategic business partners, change agents, and employee advocates
are increasing (Noe et al., 2021). Consequently, there seems to be a general shift from
“personnel management” to “human resource management” to “strategic human
resource management”.
Figure 1.2 illustrates the combination of the people and process dimensions with the
long-term and short-term dimensions. The human resource roles combine people on
Module 2: Strategic Human Resources Management
9
THE STRATEGIC ROLE OF THE HR FUNCTION
the human capital development, and employee advocate side and processes on the
strategic partner and functional expert side to execute their HR roles.
The long-term activities are more strategic and therefore include human capital
development. The short-term activities are about the business's day-to-day operations
and relate to functional expert and employee advocate roles. According to Stewart and
Brown (2009), an essential part of an HR role is to spend time interacting with
employees individually.
FIGURE 1.2: THE DAVID ULRICH MODEL OF HUMAN RESOURCE ROLES
Long-term (Strategic focus/ Future)
Strategic
Partner
Change
Agent
Processes
People
Adminstartive
Expert
Employee
Champion
Short-term (Operational focus/ Day-to-day)
Source: Mello, 2019, p. 120
According to Noe et al. (2021), HR managers face two important challenges, namely:
1. Shifting their focus from current operations to strategies for the future; and
2. Preparing non-HR managers to develop and implement human resource
practices.
1.5.1 BECOMING A STRATEGIC PARTNER
To become a strategic partner, HR needs to play an active role in strategy formulation
and implementation because people drive the entire strategy (Ulrich, 1996).
10
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
Accordingly to O’Donoghue (2021), the strategic partner's role is to assist in
overseeing the expansion and development of the workforce.
In strategy formulation, the human resource function must provide inputs about human
resource opportunities and threats in the external environment. As well as inputs about
the human resource capacity and commitment to fulfil the organisations’ (strengths
and weaknesses) needs to ensure people-related business issues are considered
(Nieman & Bennett, 2014). Involvement, communication, mindset & competence, and
role balance are highlighted factors organisations need to consider in becoming a
strategic partner. Increased HR involvement in business strategy formulation has been
observed in high-performing organisations (Nickols, 2016)
Strategy implementation involves outlining what the organisation is currently doing and
what needs to change to assist in strategy implementation. This process reviews
policies, procedures, and practices (such as recruitment, selection, training and
development, performance management, and compensation) to ensure policies and
practices align with and support strategy implementation.
1.5.2 THE HUMAN CAPITAL DEVELOPER (CHANGE AGENT)
Change is an inevitable consequence of strategic decisions. A planned strategy
involves inventing the future and bringing about desired choices. If the strategy is to
be successful, employees must be energised and committed to the change and able
to do their part, which will result in more successful organisations.
The role of HR is to develop employees' skills, knowledge and abilities (Stewart &
Brown, 2009) to gain and maintain a competitive advantage. This developing role
includes mapping individual and organisational goals to achieve organisational goals
and objectives. In addition, HRM needs to initiate and facilitate organisational
changes necessary for strategy implementation. This process may also include
making changes to the corporate culture. Accordingly to O’Donoghue (2021), the
change agent analyzes the organisation’s overall corporate culture and considers
how it may be improved from a personal and professional standpoint.
Module 2: Strategic Human Resources Management
11
THE STRATEGIC ROLE OF THE HR FUNCTION
The human resource development function further ensures that employees acquire
relevant skills, knowledge and abilities for current and future job opportunities. Skills
audits are conducted to identify skills gaps within the organisation and to suggest ways
to close these gaps. For example, the human resource department can coordinate
learning programmes to decrease skills shortages in a department or division.
1.5.3 FUNCTIONAL EXPERT (ADMINISTRATIVE EXPERT)
HRM needs to be an administrative (functional) expert (Ulrich, 1996). This process
involves streamlining systems, procedures and processes for improved functioning
within the organisation. The administrative (functional) expert’s role focuses on
providing technical expertise in hiring and motivating employees (Stewart & Brown,
2009). In addition, an effective human resource specialist helps develop systems and
practices to manage people effectively. The position of an administrative expert is
more internally focused. They oversee the delivery of daily “business as usual”
production and costs, personnel, and HR-related queries. (O’Donoghue, 2021).
1.5.4 EMPLOYEE ADVOCATE (EMPLOYEE CHAMPION)
Organisations should make employees feel valued and cared for to motivate them to
become more productive and engaged in the organisation’s activities. Employees who
feel heard and valued at work are encouraged to speak up with the help of the
employee champion. Human resource professionals should listen to employees'
concerns and provide them with the resources to be effective in their daily execution
of tasks. According to O’Donoghue (2021), employee champions assist in
implementing procedures and practices that promote safety. They can also work to
ensure that employees are content and healthy, which is highly advantageous to the
business. Employee advocates must look out for employees' interests and ensure that
employees are treated fairly.
12
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
Additional Reading:
Bartlow, A. (2020, March 20). What is the Role of Human Resources During a
Crisis? SeriesBConsulting. https://www.seriesbconsulting.com/post/what-is-therole-of-human-resources-during-a-crisis
1.6
THE TASK AND SCOPE OF HUMAN RESOURCE
MANAGEMENT
An organisation's human resource management function is part of the management
process that specialises in the management of people. It consists of practices that
enable an organisation to reach its goals and gain a competitive advantage (Nieman
& Bennett, 2014).
Nieman and Bennett (2014) identify the following key management tasks:
•
Determining and formulating policy (planning);
•
Advising (leading);
•
Rendering a service (organising); and
•
Controlling personnel affairs (control).
Originally, there were five management functions - the fifth function was staffing
(attracting and selecting the best people and placing them in positions where an
organisation can best utilise the competencies and talents of the employees.
1.6.1 DETERMINING AND FORMULATING POLICY
The HR manager is responsible for creating human resource policies and making the
necessary adjustments to the policies to ensure the smooth running of the
organisation.
Module 2: Strategic Human Resources Management
13
COMPETITIVE CHALLENGES INFLUENCING HUMAN RESOURCE MANAGEMENT
1.6.2 ADVISING
The HR department must provide information and advice to employees about all
aspects relating to the operational requirements of the organisation and aspects that
affect employee relations. For example, procedures for handling misconduct,
conditions of employment, leave procedures, etc.
1.6.3 RENDERING A SERVICE
The HR department renders a service to the organisation by conducting recruitment
and selection, developing career plans, developing training and development plans,
conducting performance evaluations, etc. In addition, the HR department controls the
supply and demand of human resources to enable the organisation to perform its
activities.
1.6.4 CONTROLLING EMPLOYEE AFFAIRS
The HR department must continuously monitor the implementation and validity of
policies and procedures to ensure that policies are free from discrimination and in
compliance with current labour legislation.
1.7
COMPETITIVE CHALLENGES INFLUENCING HUMAN
RESOURCE MANAGEMENT
To remain effective and relevant, Human Resource Management (HRM) must respond
to three major competitive challenges facing modern organisations: the challenge of
sustainability, the global challenge, and the technology challenge (Noe et al., 2023).
Each of these challenges shapes how HR functions and contributes to business
success.
1.7.1 THE CHALLENGE OF SUSTAINABILITY
Sustainability refers to an organisation’s ability to meet its current business needs
without compromising the ability of future generations to meet theirs.
14
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
In the context of HRM, competing through sustainability includes:
•
Competing through environmental, societal, and governance (ESG) practices,
which means integrating responsible policies and ethical behaviour into all HR
functions.
•
Dealing with the workforce and employment implications of the economy, such
as retrenchments, upskilling, or remote work trends during economic downturns
or growth periods.
•
Understanding and enhancing the value of intangible assets and human capital,
such as employee knowledge, brand loyalty, and company culture.
•
Meeting the needs of diverse stakeholders, including shareholders, customers,
employees, and the broader community.
•
Emphasising customer service and quality, with HR supporting employee
engagement and service delivery excellence.
•
Recognising and capitalising on workforce diversity and demographic shifts,
such as an ageing workforce or the need for inclusive employment practices.
•
Managing legal and ethical issues, including compliance with labour laws,
ethical recruitment, and fair employee treatment.
In essence, the sustainability challenge calls for HR to lead initiatives that are socially
responsible, legally compliant, and focused on long-term value.
According to Damico et al. (2022), sustainability entails safeguarding natural
resources, encouraging biodiversity, lowering environmental dangers, and achieving
a balance between human advancement and environmental protection. Brevis and
Vrba (2017) state that strategy, risk, performance and sustainability have become
inseparable, and it is argued that sustainability is no longer a choice but a necessity
(Correia, 2019) .
Noe et al. (2015) take a broader view of sustainability and define it as the ability of
an organisation to meet its needs without compromising the ability of future
generations. Organisations must consider the long-term impact since a short-term
Module 2: Strategic Human Resources Management
15
COMPETITIVE CHALLENGES INFLUENCING HUMAN RESOURCE MANAGEMENT
focus is frequently incompatible with the perseverance and risk essential for
sustainability (Hermundsdottir & Aspelund, 2021; Jansson & Rozenbachs, 2016).
“The results of companies’ focus on sustainability” refers to the ‘triple bottom line’
approach, which considers the economic, social and environmental benefits (Noe et
al., 2023, p. 14).
The King IV Report promotes corporate governance as integral to running an
organisation and delivering governance outcomes such as ethical culture, good
performance, effective control and legitimacy. In addition, the report emphasises
sustainability and describes it as follows:
TABLE 1.3: AN EXCERPT FROM THE KINS IV REPORT ON SUSTAINABILITY
Sustainability is the primary moral and economic imperative of the 21st Century. It is
one of the most important resources for both opportunities and risks for business.
Nature, society, and business are interconnected in complex ways that decisionmakers should understand. Most importantly, current incremental sustainability
changes are insufficient – we need a fundamental shift in how companies and
directors act and organise themselves.
Source: Institute of Directors Southern Africa, 2016
The phrase ‘meeting the needs of present generations without compromising the
ability of future generations to fulfil their needs’ has been defined by numerous authors
as a prominent definition of sustainability. However, social sustainability is necessary
for sustainable development.
Social sustainability includes social justice, particularly income disparities, the gap
between richer and poorer countries, and the under-provision and deterioration of
basic services, which are becoming a global concern. (Brevis & Vrba, 2017).
Accordingly to Fischhoff et al. (2021), social sustainability strongly emphasises
meeting human needs. In South Africa, social transformation is a severe concern for
achieving social sustainability.
16
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
TABLE 1.4: YOUTUBE VIDEO ABOUT SOCIAL SUSTAINABILITY
The following YouTube video provides an interesting look at social sustainability:
Sara, S. [Network for Business Sustainability]. (2022, April 1). What is Social
Sustainability? [Video]. YouTube. https://youtu.be/y8T7iwlVulk.
1.7.1.1 Aspects of sustainability
Noe et al. (2015) identify the following aspects of sustainability:
•
The ability to deal with economic and social changes;
•
Practice environmental responsibility;
•
Engage in responsible and ethical business practices;
•
Provide high-quality products and services;
•
Implement methods to determine if the organisation is meeting stakeholders'
needs.
1.7.2 THE GLOBAL CHALLENGE
Competing through globalisation involves expanding operations into international
markets and managing the complexities that come with it. For HR, this means:
•
Supporting businesses as they enter international markets, including staffing
global operations and developing cross-cultural leadership.
•
Considering offshoring (moving operations to other countries) or reshoring
(bringing jobs back to the home country), based on cost, efficiency, and social
impact.
•
Managing the legal, cultural, and logistical challenges of a globally distributed
workforce.
The global challenge requires HR professionals to be culturally aware, strategically
agile, and capable of supporting international growth and talent mobility.
Module 2: Strategic Human Resources Management
17
MEETING COMPETITIVE CHALLENGES THROUGH HRM PRACTICES
1.7.3 THE TECHNOLOGY CHALLENGE
Technology is rapidly transforming how HR operates and how work is done.
Competing through technology includes:
•
Leveraging social networks for recruitment, engagement, and employer
branding.
•
Using Human Resource Information Systems (HRIS) to automate and
streamline HR processes.
•
Integrating mobile devices, cloud computing, and HR dashboards to improve
accessibility, decision-making, and real-time reporting.
•
Supporting high-performance work systems (HPWS) and managing virtual
teams, which require flexible policies and robust communication tools.
•
Understanding the role of artificial intelligence (AI) and robotics in the
workplace, from automating routine tasks to influencing job design and
workforce planning.
To meet the technology challenge, HR must be tech-savvy, data-driven, and proactive
in adapting to digital transformation.
Together, these three challenges require HR professionals to think beyond traditional
functions and become strategic enablers of organisational agility, innovation, and
global competitiveness.
1.8
MEETING COMPETITIVE CHALLENGES THROUGH HRM
PRACTICES
Traditionally, Human Resource Management (HRM) practices have not been viewed
as contributors to economic value in the same way as equipment, technology, or
physical facilities. Economic value was typically associated with tangible assets, while
HRM was seen as a support function.
However, this perception has changed. Research now shows that HRM practices such
as compensation, staffing, training and development, and performance management
are, in fact, strategic investments. These practices directly impact employees'
18
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
motivation, engagement, and ability to deliver high-quality products and services that
customers value.
Moreover, studies have found that companies seeking to enhance their competitive
advantage through technology and quality improvement initiatives are also more likely
to invest in advanced staffing, training, and compensation systems. This demonstrates
that HRM is not just a cost to be managed, but a critical driver of innovation,
productivity, and long-term success. (Noe et al., 2023)
1.9
PROFESSIONALISATION OF HRM IN SOUTH AFRICA
Wärnich et al. (2022) state, “a profession is characterised by the existence of a
common body of knowledge and a procedure for certifying members of the profession
and that these characteristics apply to the field of HR” (p. 35). In this context, according
to Schutte and Barkhuizen (2021), professionalism indicates that the practitioner must
thoroughly comprehend the circumstances in which the HR professional's
performance is occurring and handle it by utilising a variety of abilities.
Nel et al. (2012) state that HR is practised by persons who usually belong to
professional organisations with a significant role in promoting the HR profession, such
as the South African Board for People Practices (SABPP). The SABPP is centred on
standards, registration, education, training, and professional conduct, and it greatly
advances the field of human resource management (Schutte & Barkhuizen, 2021).
Despite launching a feasibility study in September 2018, SABPP has not succeeded
in formalising HR as a fully statutory profession. No legislation has been passed to
require mandatory licensing or registration to practice, unlike regulated professions
such as law, accounting, or psychology.
Although human resources is no longer merely an occupation, many would argue that
it is not yet a true profession (Schutte & Barkhuizen, 2021).
Module 2: Strategic Human Resources Management
19
CHALLENGES FACING HR MANAGERS IN THE 21ST CENTURY.
Good to know:
SABPP still operates under voluntary membership.
Practitioners without SABPP registration cannot be prosecuted under HRspecific statutory laws.
HR practitioners have no obligation under the current South African legislation
to renew SABPP registration or to get Continuous Professional Development (CPD)
points to practice HR.
Nel et al. (2016) and Nankervis (cited in Nel et al.) reflect an ambition for global
professional alliances and higher professionalism, but statutory regulation has
regretably not been realised yet.
Schutte, N., & Barkhuizen, N. (2021). Intricacies of HRM as a managerial profession
of South Africa: A conceptual analysis. Department of Industrial Psychology and
People Management, 443-456. https://hdl.handle.net/10210/494121
You may also wish to visit the SABPP’s (SA Board for People Practices) website
https://www.sabpp.co.za/
1.10 CHALLENGES FACING HR MANAGERS IN THE 21ST
CENTURY.
Traditional HR approaches that were initiated in cultures that focused on command
and control are making room for new approaches characterised by greater employee
commitment, cooperation and communication linked to changed expectations,
changed working arrangements and the implementation of sophisticated technology
such as Artificial Intelligence (AI). Organisations that value rigid, inflexible and complex
structures will find it challenging to gain a competitive advantage. (Warnich et al.,
2022)
Flexibility in the workplace is considered a vital component of a successful human
resource strategy. For example, the issue of flexible working arrangements emerged
in response to today’s organisations' needs and the workforce’s diversity, and
developing flexibility is considered a key component. This flexibility approach is often
referred to as an “organisational fitness strategy” (Wärnich et al., 2022, p. 32).
20
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
An organisational fitness strategy, in the context of developing capacity for
flexibility, refers to a deliberate approach by which an organisation strengthens its
ability to adapt, respond, and thrive in a rapidly changing environment. Think of it as
building an organisation’s ‘agility muscles’—similar to how physical fitness improves
the body's ability to perform under stress or change.
Here is how it applies in an HR and strategic management context:
•
Adaptability to Change: Organisational fitness means having systems,
people, and structures in place that allow the business to respond quickly to
market shifts, technological advancements, regulatory updates, and workforce
changes. A fit organisation can restructure teams, retrain staff, or pivot
strategies with minimal disruption.
•
Developing Human Capital Agility: HR plays a key role in creating fitness by
recruiting versatile employees, promoting continuous learning and upskilling,
and encouraging a mindset of innovation and problem-solving. This approach
builds a flexible workforce capable of taking on new roles or adapting to
evolving responsibilities.
•
Flexible Organisational Structures: A fitness strategy may include flattened
hierarchies to speed up decision-making, cross-functional teams to facilitate
collaboration with faster responses and decision-making. In addition, remote or
hybrid work policies can increase resilience and employee satisfaction.
•
Data-Driven Responsiveness: An organisation with high fitness uses tools
like HR dashboards (a tool that provides an overview of key HR metrics and
KPIs in one place), workforce analytics and scenario planning. These tools
assist managers in anticipating challenges and making evidence-based
adjustments to strategy or operations.
Thus, an organisational fitness strategy refers to how an organisation builds internal
capability, culture, and systems that support flexibility and resilience. It is a proactive
strategy that allows the organisation to remain competitive and sustainable in a volatile
environment through its people, processes, and strategic choices.
Module 2: Strategic Human Resources Management
21
CHALLENGES FACING HR MANAGERS IN THE 21ST CENTURY.
To overcome the challenges, HR will need to develop and implement new procedures
that assist the company in identifying the following (Wärnich et al., 2022, p. 32):
•
“Future talent needs.
•
The desired make-up of the organisation’s human capital.
•
Internal talent to be grown and leveraged.
•
Competencies and skills that will have to be acquired from external sources
and,
•
The organisation’s demographic profile will need to be engaged and energised”.
Warnich et al. (2022) provide the following scenario for the future of HRM (Figure 1.3)
of what the workplace, HR and jobs will look like in a couple of years from now.
FIGURE 1.3: SCENARIO FOR THE FUTURE OF HRM
Source: Wärnich et al., 2022, p. 33.
22
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
Read the following relevant article:
Fenech, R. (2022). Human Resource Management in the Digital Era Through The
Lens of Next Generation Human Resource Managers. Journal of Management
Information and Decision Sciences. 25(S1), 1-10.
Brewis, A. (2022). The role of human resource management within the South
African public service in ensuring cultural diversity readiness for public servants
dealing with different cultures. Croatian International Relations Review, 28(89),
190-208. https://cirrj.org/index.php/cirrj/article/view/508
Omar, K. (2021) Key Elements of the HRM Challenges in the Technology Era 21st
Century. Open Journal of Business and Management, (9), 32-43.
https://doi.org/10.4236/ojbm.2021.91002
Additional Reading:
Larralde, A (2023, January 03). 8 of the Biggest Challenges for HR in 2023.
BetterWorks. https://www.betterworks.com/magazine/8-of-the-biggest-challengesfor-hr/
Regent Business School (2021, November 29). A 21st Century Approach to
Human Resource Management. https://regent.ac.za/blog/a-21st-century-approachto-human-resource-management
1.11 STRATEGIC COMPETENCIES FOR HR PROFESSIONALS
To identify what makes HR professionals successful, the Society for Human Resource
Management (SHRM) launched a global research programme in 2011 (Society For
Human Resource Management, 2013). This led to the development of the SHRM
Competency Model, which defines the key competencies required for effectiveness in
the HR field.
Module 2: Strategic Human Resources Management
23
STRATEGIC COMPETENCIES FOR HR PROFESSIONALS
The previous Competency Module had eight behavioural competencies and one
technical competency. The behavioural competencies included leadership and
navigation, ethical practice, relationship management, communication, global and
cultural effectiveness, business acumen, consultation and critical evaluation. The
technical competency was HR Expertise, which covered essential knowledge areas
such as employment law, talent management, and HR operations. These
competencies highlighted both the behavioural and knowledge-based capabilities
needed for HR professionals to succeed in dynamic and strategic roles.
The previous model evolved into the SHRM Body of Applied Skills and Knowledge
(SHRM BASK) in 2021, which expanded the original model by more clearly defining
the knowledge areas associated with each competency. The SHRM BASK serves as
a framework for developing exam content and preparation materials, ensuring global
consistency and credibility in HR professional standards. The new module includes
the following nine competencies: leadership and navigation, ethical practice,
relationship management, communication, global mindset (previously global and
cultural effectiveness), business acumen, consultation and analytical aptitude
(previously critical evaluation) that are linked to three clusters: leadership,
interpersonal and business.
The SHRM BASK identifies nine core behavioural competencies and one technical
area of HR expertise that are essential for HR professionals to perform effectively in
the workplace, drive business value and maintain ethical, culturally aware, and
strategic practices. These competencies form the foundation of modern HRM
professionalism, guiding both certification and performance standards worldwide.
(SHRM Body of Applied Skills and Knowledge: Your Comprehensive Roadmap for a
Career in HR, 2025; shrm.org, 2025)
24
© Business Management Training College (Pty) Ltd
GAINING A COMPETITIVE ADVANTAGE
FIGURE 1.4: SHRM BASK OVERVIEW
Source: shrm.org, 2025, para. 4
Visit the website:
Society for Human Resource Management (SHRM) https://www.shrm.org/
https://www.shrm.org/content/dam/en/shrm/credentials/shrm-certification/shrmcertification-bask-2025.pdf
Module 2: Strategic Human Resources Management
25
SUMMARY
1.12 SUMMARY
In this chapter, we explored the evolving role of Human Resource Management (HRM)
within the context of strategic business operations. HRM is no longer viewed as a
purely administrative function but as a critical driver of organisational success. We
examined how HRM practices such as staffing, compensation, training, and
performance management are strategic investments that directly contribute to
employee motivation, service delivery, and ultimately, the organisation’s competitive
advantage.
We also discussed three major competitive challenges influencing HRM today:
1. Sustainability, which includes social, environmental, and governance
responsibilities.
2. Globalisation, which calls for managing a diverse, international workforce.
3. Technology, which is reshaping how work is done and how HR functions
operate.
The chapter introduced the idea of HR functioning as a ‘business within a business’,
offering three core services: administrative support, business partner services, and
strategic leadership. This perspective emphasises HR's contribution to agility,
innovation, and long-term planning.
Additionally, we explored the concept of organisational fitness, which refers to an
organisation’s capacity for flexibility and its ability to adapt to a constantly changing
environment, largely influenced by strategic HR practices.
Finally, we introduced the SHRM Competency Model, now formalised in the SHRM
Body of Applied Skills and Knowledge (SHRM BASK), which outlines the key
behavioural and technical competencies required for HR professionals to succeed in
today’s dynamic workplace.
In Chapter 2, we take a deeper look into Strategic Human Resource Management by
examining its components and the role of HRM in strategy formulation and execution.
We will explore how HR strategy aligns with business strategy and the frameworks
that guide this alignment.
26
© Business Management Training College (Pty) Ltd
CHAPTER TWO
Strategic Human
Resource
Management
IN THIS CHAPTER:
2.1
INTRODUCTION ....................................................................................... 29
2.2
THE CONTRIBUTION OF STRATEGIC HR ............................................. 31
2.3
WHAT IS STRATEGIC MANAGEMENT? ................................................. 37
2.4
WHAT IS STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)? 38
2.5
THE DIFFERENCE BETWEEN STRATEGY FORMULATION AND
STRATEGY IMPLEMENTATION .............................................................. 44
2.6
THE ROLE OF HRM IN STRATEGY FORMULATION.............................. 47
2.7
SUMMARY ................................................................................................ 52
SUMMARY
CHAPTER 2: STRATEGIC HUMAN RESOURCE
MANAGEMENT
AT THE END OF THIS CHAPTER, YOU SHOULD BE ABLE TO:
•
Describe
the
difference
between
strategy
formulation
and
strategy
implementation.
•
Discuss the components of the strategic management process.
•
Discuss the role of the HRM function in strategy formulation.
CONCEPTS AND VOCABULARY
•
Strategy refers to a set of fundamental directional decisions to purposes and
missions and consists of the essential actions necessary to realize the
directions (Stewart & Brown, 2009).
•
Strategic human resource management refers to the pattern of planned
human resource arrangements and activities intended to enable an
organisation to achieve its goals (Noe et al., 2021).
•
Human resource strategy is a company's overall strategy for managing its
human resources to meet its operational needs (Stewart & Brown, 2009).
•
The competitive business strategy focuses on choices and actions to serve
customer needs (Stewart & Brown, 2009). The Indeed Editorial Team (2022)
state that a collection of guidelines and tactics used by a company to achieve
a competitive edge in the market is known as a competitive business strategy.
•
Strategy formulation is the process of deciding on a strategic direction by
defining a company's mission and goals, its internal strengths and weaknesses
and its external opportunities and threats. (Noe et al., 2023)
•
Strategy implementation is the process of developing structures and
allocating resources to enact the strategy a company has chosen (Noe et al.,
2023)
28
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
2.1
INTRODUCTION
The HR function in organisations continues to be harshly criticised (Cappelli, 2015).
Several years ago (2015), a cover of the Harvard Business Review (HBR) displayed
a cartoon bomb and a headline: “It's time to blow up HR and build something new, and
here’s how”. The article questions HR's contribution to helping a business move
forward.
FIGURE 2.1: THE COVER OF HBR 2015
Source: Lindenbeger, 2015
A more recent article by Goros (2023) in Forbes titled: “Rethinking the role of HR in
the modern workforce” provided great advice to enhance the role that HR plays in
organisations.
TABLE 2.1: EXCERPT FROM THE FORBES ARTICLE: RETHINKING HR
How do you invest in HR as a more strategic asset?
A major opportunity exists to add new perspectives to the leadership team that can
enhance its ability to provide strategic value. For HR to fill this role, it’s essential to
create a space that frees them from the redundant administrative tasks that have
traditionally consumed their days. This can be achieved by embracing emerging HR
technologies that can automate tasks like reporting, time tracking, payroll and more.
According to an HR workflow report, more than 50% of an HR team's time is spent
on tasks like processing employee information and answering questions. Freeing up
Module 2: Strategic Human Resources Management
29
INTRODUCTION
this time, especially for seasoned HR leaders, will allow them to spend more energy
on being strategic partners to the CEO.
How do you ensure a more comprehensive HR skill set?
To support HR leaders in taking on strategic responsibilities, it’s critical to build the
right team. One of the key components of building a successful team, whether it's
sales, marketing or, in this case, HR, is having a well-rounded base of skill sets.
HR teams require individuals with conventional expertise in HR responsibilities like
employee relations and talent management, as well as a blend of strong leadership
skills, data analysis proficiency and capacity for comprehensive and strategic
thinking. Furthermore, bringing in talent with a diverse range of career expertise and
experiences can enhance the HR team's effectiveness, foster innovation and propel
the company toward enhanced overall success. With the shifting of the modern
workforce and how organisations operate, the structure of an HR team needs to
align with this new paradigm.
In the ever-evolving landscape of business, the role of HR has transcended its
traditional boundaries, propelling it into the nucleus of organisational progress. HR
professionals are serving in essential roles on leadership teams and collaborating
to steer companies toward new heights. The paradigm shift beckons these leaders
to play a pivotal role in the executive leadership team.
To fully harness the potential of HR in this journey, three crucial areas demand
introspection: the redefinition of HR's mandate, strategic investment and the
cultivation of a diversified skill set. Addressing these imperatives will fortify the
partnership between HR and the C-suite and empower organizations to navigate the
multifaceted challenges of the modern business landscape with agility and purpose.
Source: Goros, 2023, paras. 6-10
30
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
2.2
THE CONTRIBUTION OF STRATEGIC HR
Mello (2019, p. 133) makes a valuable argument by stating that “Top management in
most organisations does not realise the contribution that HR makes to overall
organisational performance because they still perceive HR in more traditional ways. A
contributing factor is that senior HR managers themselves may not understand how
they can contribute to their organisations strategically.”
Mello (2019) points out that for HR managers to succeed, they must realise that
strategic HR can provide three critical outcomes: “increased performance, enhanced
customer and employee satisfaction, and enhanced shareholder value, as illustrated
in Figure 2.2.
FIGURE 2.2: OUTCOMES OF STRATEGIC HR
Source: Mello, 2019, p. 134
In section 2.4, we look at a Model of Strategic Human Resource Management and
how these outcomes can be accomplished.
To understand the differences between traditional HR and Strategic HR, let us look at
Table 2.2, which highlights these differences.
Module 2: Strategic Human Resources Management
31
THE CONTRIBUTION OF STRATEGIC HR
TABLE 2.2: TRADITIONAL HR VERSUS STRATEGIC HR
Traditional HR
Strategic HR
Responsibility for HR
Staff specialists
Line Managers
Focus
Employee relations
Partnerships with internal
and external customers
Role of HR
Transactional
change Transformational change
followers and respondent
Initiatives
Slow,
leaders and initiators
reactive, Fast, proactive, integrated
fragmented
Time horizon
Short terms
Short, medium, long (as
necessary)
Control
Bearecratic:
Roles, Organic:
policies and procedures
Flexible,
whatever is necessary to
succeed
Job design
Tight division of labour, Broad,
independence,
flexible,
cross-
training, teams
specialisation
Key Investments
Capital, products
People, knowledge
Accountability
Cost centre
Investment centre
Source: Mello, 2019, p. 125
Let us look at a practical example to differentiate traditional HR from Strategic HR. A
retail company called FashionLine SA has discovered an opportunity to expand into
e-commerce due to shifting customer preferences and rising online sales. The shift
requires new skills, restructuring, and cultural adaptation.
32
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
TABLE 2.3: SCENARIO FASHION LINE SA FACING NEW MARKET
OPPORTUNITIES
Traditional HR
Responsibility for HR
HR
staff
Strategic HR
manage
all Line
managers
are
decisions. Line managers actively involved in hiring,
rely entirely on HR.
training, and performance
coaching.
Focus
Focused
on
enforcing Focused
on
rules, avoiding disputes, partnerships
and processing payroll.
building
with
IT,
marketing, and external
vendors
to
smooth
ensure
a
e-commerce
rollout.
Role of HR
Waits for instructions from Leads
change
by
executives to implement forecasting talent needs
staffing changes.
and proposing proactive
talent acquisition plans.
Initiatives
Responds slowly to the Anticipates
needs
new
HR planning
e-commerce
plan integrates
after issues arise.
Time horizon
Hires
and
with the digital strategy.
short-term Plans
contractors to fill gaps.
workforce
needs
across short, medium, and
long-term goals of the
expansion.
Control
Insists all changes follow Adjusts job descriptions
rigid
policy,
delaying and workflows flexibly to
project timelines.
meet
new
demands
quickly.
Job design
Employees
have
fixed Cross-trains staff in digital
roles
as
sales, tools,
such
logistics, or admin.
inventory
management,
and
customer service.
Module 2: Strategic Human Resources Management
33
THE CONTRIBUTION OF STRATEGIC HR
Traditional HR
Key Investments
Strategic HR
Invests in new Point-of- Invests
Sale systems only.
in
training,
onboarding software, and
employee
development
for e-commerce.
Accountability
Views
HR
costs
as Sees HR as an investment
overhead to be minimized. that drives value, tracking
returns
via
improved
sales,
retention,
and
engagement.
Source: Author’s complation
We can see from the above explanations that traditional HR plays a support role,
reacting to decisions and enforcing compliance. In contrast, strategic HR leads
change by aligning peoples’ strategies with business goals, driving transformation, and
enabling long-term success.
Before we continue discussing the role of HR in strategy formulation implementation,
let us start by looking at the case of South African Airways (SAA), which struggled for
years to apply a turnaround strategy. (Nhlabatsi, 2019; Nyatsumba & Pooe, 2021;
turnaroundtalk.co.za, 2021).
TABLE 2.4: EXCERPT FROM A RESEARCH STUDY ABOUT SAA’S FAILURE
Since 2004, SAA has had four turnaround strategies. In 2005, the airline introduced
a turnaround strategy named Bambanani – Let Us Join Hands Together. A year
later, the SAA Business Restructuring Plan (SAA BRP) replaced Bambanani.
In 2011, the airline implemented a growth strategy. In 2013, the airline adopted the
LTTS, after which its financial performance got progressively worse over the years
(Joffe, 2019).
The only turnaround strategy to have been implemented with some degree of
success was the SAA BRP, but even it was abandoned when there was a change
34
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
in leadership. The other turnaround strategies were implemented half-heartedly, if
at all, and did not yield the desired results.
The airline has had a history of chronic leadership instability and has registered
growing losses since 2012. Between 2007 and 2019, it lost a total of R26.9 billion
(Vermooten, 2020). Between 1994 and 2020, SAA had 14 CEOs, half of whom were
acting CEOs.
Source: Nyatsumba & Pooe, 2021, p. 76
An article published by Turnaroundtalk (2021) titled: “Poor tactical decision making
was the cause of SAA’s downfall” pointed out that “The root cause of SAA can be
brought down to years of mismanagement and then years of government interference,
where they tried to get the right management structure in place to give the airline the
guidance it needed. Governments' valiant efforts effectively dug a grave for the airline”
(para. 18).
TABLE 2.5: EXCERPT SAA FAILURE ROOT CAUSES
From 2009 to 2021, there were nine CEO’s and the government replaced the board
six times. This was done in an effort to turn the airline around, to no avail. The
frequent changes also meant that there was no continuity and direction. As a result,
the airline was placed into business rescue (bankruptcy protection) in December
2019, just before the COVID-19 virus was identified for the first time.
During the 2019 calendar year, only eight routes were profitable. The routes
included one international route and seven regional routes. None of the local routes
were profitable.
When SAA was put into business rescue, there were 48 aircraft in SAA’s inventory:
seventeen (35%) smaller single-aisle (narrow-body) aircraft for domestic and
regional routes; twenty-nine (60%) bigger twin-aisle (wide-body) aircraft for nonstop, long-distance, international flights; and two (4%) freight aircraft.
Module 2: Strategic Human Resources Management
35
THE CONTRIBUTION OF STRATEGIC HR
There was no profitable core because none of these markets was profitable. The
major portion of SAA’s business focused on international flights, even though only
one of the international Routes was profitable. It contributed 57% to the overall
sales, which is in line with the number of aircraft, but resulted in an R3.0 billion loss
(72% of the R4.2 billion loss).
Because the routes were all non-stop flights, bigger, long-range aircraft were used.
These aircraft are difficult to fill to make the flights profitable. As a result, these flights
were running at a loss.
With the downturn in passenger figures post-COVID and the slow return of
international travel, this situation deteriorated significantly. As a result, there is a
move to smaller aircraft to achieve the necessary break-even passenger load factors
to make flights profitable. This is a shift in the way that the industry operates that will
require a change in strategy.
SAA competes head-on with its subsidiary, Mango, on local routes. This means that
it is competing against itself in the form of a full-service airline (SAA) vs a low-cost
airline (Mango). SAA could not operate any of these routes profitably, which shows
that there is not sufficient demand for a second full-service airline (British Airways
and SAA). It is, therefore, just reducing (cannibalising) Mango sales.
The new airline that is proposed in the business turnaround plan will be smaller by
almost half (26 aircraft vs the previous 48 aircraft). This resulted in retrenchments.
However, benchmarks showed that the salary cost was excessive due to many
years of increases that were far above inflation figures. The BRPs decided to reduce
the number of staff even further and to renegotiate their terms and conditions of
employment. In the case of the pilots, this amounts to a salary cut of roughly 50%
(the pilot who was paid the least earned R3.6 m per year).
Source: (turnaroundtalk.co.za, 2021, paras. 4-1
The scenario of SAA illustrates that businesses operate in very competitive markets.
South African Airways’ key strategic constraints were shareholder decision delays,
36
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
under-capitalisation, unstable political leadership, unhealthy board dynamics,
leadership instability, and lack of management skills.
Across academic, media, and policy sources, SAA’s failure is consistently traced back
to strategic execution failures which included:
•
Chronic political interference leading to weak or inconsistent leadership.
•
Poor governance structures and board instability.
•
Inability to turn strategic plans into measurable performance improvements.
The SAA example should equip you with an understanding of how strategic
management failures, not just external industry pressures, contribute to organisational
decline. To survive and thrive in any environment, organisations need to use their
physical, organisational and human resources effectively to compete and gain a
competitive advantage over their rivals.
Did you know that two of the resources, organisational (the structure, planning,
controlling, coordinating systems, and group relations) and human resources (the
experience, skills, and intelligence of employees) (Noe et al., 2023), are directly tied
to the HR function?
We are going to learn in this chapter the importance of strategic management, which
is about deploying and allocating resources in a way to gain a competitive edge.
2.3
WHAT IS STRATEGIC MANAGEMENT?
Strategy refers to a set of coordinated choices and actions. A strategy is more than
just decision-making; it is about putting choices into action. Therefore, a strategy is a
complex framework of ideas, insights, objectives, experiences, patterns, perceptions,
and expectations that serve as a general direction for particular actions taken in pursuit
of a specific outcome (Nickols, 2016).
Strategic management refers to a process to address the competitive challenges
faced by an organisation. It refers to developing and managing strategies that
Module 2: Strategic Human Resources Management
37
WHAT IS STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)?
integrate an organisation's primary goals, policies and actions into a cohesive whole.
(Noe et al., 2023)
Organisations can select from a variety of generic strategies, such as cost,
differentiation, focus, defender, analyser, prospector, and reactor strategies, to name
a few, to position themselves relative to their competitors. Thus, organisations apply
generic strategies and make choices to improve their competitive advantage.
According to Noe et al. (2021), these choices include:
•
How to deter competitors;
•
How to keep competitors weak;
•
How to react to and influence pending legislation;
•
How to deal with various stakeholders and special interest groups;
•
How to lower production costs;
•
How to increase productivity and revenue;
•
Which type of technology to implement;
•
How many and what types of people to employ (Noe et al., 2015)
The fundamental aim of strategic management is to generate strategic capability by
ensuring that the organisation has the skilled, committed and well-motivated employees
it needs to achieve a sustained competitive advantage.
2.4
WHAT IS STRATEGIC HUMAN RESOURCE MANAGEMENT
(SHRM)?
According to Noe et al. (2023), strategic human resource management (SHRM)
refers to the pattern of planned human resource arrangements and activities intended
to enable an organisation to achieve its goals. The concept of SHRM focuses on
coordinating and aligning all HR policies with one another and the organisation's
overall strategy and direction (Wärnich et al., 2022). It is also known to be a positive
contributor to organisational resilience (Yu et al., 2022).
38
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
Osman et al. (2022) state that SHRM recognises the value of people as a strategic
business asset and a way of creating long-term competitive advantage. As a result,
SHRM enhances individual and organisational capability to achieve business
objectives, which ultimately supports organisational development. Furthermore,
Armstrong (2011) states that SHRM offers a perspective on how critical issues or
success factors relating to people may be addressed, and strategic decisions have a
significant and long-term impact on the behaviour and success of the organisation.
Lastly, Wärnich et al. (2022) highlighted SHRM as “a focus in the integration of all HR
policies with one another, with the overall strategy and direction of the organisation” (p.
735), as illustrated in Figure 2.3.
FIGURE 2.3: A MODEL OF STRATEGIC HUMAN RESOURCE MANAGEMENT
Source: Mello, 2019, p. 135
SHRM has three key elements, namely that it (1) constitutes an environmental
change/challenge, (2) requires a strategic response, and (3) requires specific
organisational changes.
Module 2: Strategic Human Resources Management
39
WHAT IS STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)?
Read the following relevant article:
Lee, S. H. (2021). An attention-based view of strategic human resource
management. Academy of Management Perspectives, 35(2), 237-247.
https://doi.org/10.5465/amp.2020.0099
Additional Reading:
Haan, K., & Main, K. (2023, January 03). Strategic Human Resource Management
(2023 Guide). Forbes. https://www.forbes.com/advisor/business/strategic-humanresource-management/
Gifford, J. (2021, June 03). Strategic Human Resource Management. CIPD.
https://www.cipd.co.uk/knowledge/strategy/hr/strategic-hrm-factsheet#gref
Tip: Download the factsheets by Jonny Gifford.
Thymi, I., Bitsani, E., & Pantazopoulos, S. (2022). Strategic human resource
management and leadership of cultural organisations in the 21st
century. International Journal of Cultural Management, 1(1), 58-79.
In recent years, organisations have recognised the success of the strategic
management process depends largely on the extent to which the HRM function is
involved (Shala, 2020; Yu et al., 2022) .
2.4.1 COMPONENTS OF THE STRATEGIC MANAGEMENT PROCESS
The strategic management process has two distinct yet interdependent phases:
1. Strategy formulation and
2. Strategy implementation.
Figure 2.4 illustrates the strategic management process.
40
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
FIGURE 2.4: A MODEL OF THE STRATEGIC MANAGEMENT PROCESS
Source: Noe et al., 2023, p. 77
The vision, mission and values outline the overall goal or destination the organisation
whiches to reach and are considered products of the executive team. The vision
represents the future state of the organisation, the mission represents a general plan
of how the organisation aims to reach its goals, and the values are the beliefs that
motivate attitudes and action. These will remain ‘wishes’ unless they are translated
into specific actions and integrated into the various functions that will guide the
organisation in achieving its strategic goals. (Nel et al., 2021)
Strategic choice refers to “the organisation’s strategy, the way an organisation will
attempt to fulfil its mission and achieve its long-term goals” (Noe et al., 2023, p. 83).
2.4.1.1 Strategy formulation
Module 2: Strategic Human Resources Management
41
WHAT IS STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)?
Corporate strategy formulation is a very significant process that requires thoughtful
engagement (Shala, 2020). Slip-ups in the first phase may significantly affect the
results and challenges in the implementation phase.
Figure 2.4 illustrates the strategy formulation process. Strategy formulation involves
deciding on the strategic direction by defining the organisation's mission and goals, its
external opportunities and threats, and its internal strengths and weaknesses. Once
this process is complete, various strategic alternatives are generated, and each
alternative is compared for its ability to achieve the organisation's mission and goals.
2.4.1.1.1 Gathering information
The first step in strategy formulation is information gathering. Information gathering
involves scanning the external environment (such as changes in economic,
technological, social, political, legal, geographical and cultural spheres and the labour
market) to assess the opportunities and threats. That impacts human resource
strategies, policies and programmes and assesses the internal capabilities and
resources (for example, employee skill levels, productivity, staffing levels, absenteeism
trends and turnover levels) to determine the organisation's strengths and weaknesses.
External and internal analysis is conducted through a SWOT (strengths, weaknesses,
opportunities and threats) analysis. During the information-gathering phase, the focus
is on human resources as a scarce resource which is difficult to imitate (Stewart &
Brown, 2009). After evaluating the SWOT analysis, the strategic planning team can
generate various alternative strategies.
2.4.1.1.2 Analysing information and decision-making
During this phase, groups form to develop collective intuition by sharing their feelings
and debating different possibilities. An important aspect of this phase is to stimulate
positive conflict, encouraging participants to discuss external threats and weaknesses
openly. The team of decision-makers should be from a diverse group of people to get
different views and perspectives. The key to effective decision-making is maintaining
an appropriate pace and focusing on issues that are large enough to be meaningful
but small enough to be resolved (Stewart & Brown, 2009). The final step is to diffuse
politics.
42
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
Poor decisions result when members of a decision-making team focus on making
themselves look good at the expense of others. Strategic managers compare the
alternative strategies' ability to attain the organisation's strategic goals and then make
a strategic choice.
The strategic choice is the organisation's strategy; it describes how an organisation
aims to achieve its mission and long-term goals (Noe et al., 2023)
2.4.1.2 Strategy implementation
Figure 2.1 illustrates strategy implementation, which follows through on the selected
strategy. This phase includes structuring the organisation, allocating resources,
ensuring qualified and skilled people are available, and developing reward systems to
align employee behaviour with the organisation's strategic goals.
According to Noe et al. (2021), the basic principle of strategy implementation is that:
"an organisation has a variety of structural forms and organisational processes to
choose from when implementing a given strategy, and these choices make an
economic difference" (p. 86).
Noe et al. (2021) identify five important components in the successful implementation
of a strategy (view Figure 2.5):
•
Organisational structure;
•
Task design;
•
The selection, training and development of people;
•
Rewards system;
•
The types of information and information systems.
Module 2: Strategic Human Resources Management
43
THE DIFFERENCE BETWEEN STRATEGY FORMULATION AND STRATEGY IMPLEMENTATION
FIGURE
2.5:
VARIABLES
TO
BE
CONSIDERED
IN
STRATEGY
IMPLEMENTATION
Source: Noe et al., 2023, p. 85
2.5
THE DIFFERENCE BETWEEN STRATEGY FORMULATION
AND STRATEGY IMPLEMENTATION
Table 2.6 highlights the key differences between strategy formulation and strategy
implementation.
44
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
TABLE 2.6: STRATEGY FORMULATION VS STRATEGY IMPLEMENTATION
Aspect
Strategy Formulation
Strategy Implementation
Core question
“What should we do?”
“How should we do it?”
Purpose
Develop the
Translate the chosen
organisation’s direction,
strategy into concrete
goals, and competitive
actions, structures, and
approach.
results.
Analysis, choice, and
Execution, coordination,
design of strategic
and control of activities
options.
that realise the chosen
Primary focus
options.
Key activities
•
Environmental scanning
•
(PESTLE, industry
analysis)
•
strategy to all levels
•
Internal capability
analysis (resources, HR
Setting mission, vision,
•
•
Generating and
Allocating resources
(budget, people, tech)
•
and long-term objectives
•
Aligning structures,
processes, and policies
audits)
•
Communicating the
Establishing timelines,
KPIs, and dashboards
•
Managing change,
evaluating strategic
culture, and stakeholder
alternatives
buy-in
Selecting the best
course(s) of action
Time Horizon
Predominantly medium-
Short-, medium-, and
to long-term (3–10 years).
long-term; broken into
actionable phases,
milestones, and reviews.
Decision-makers
Top management, board,
Line managers, project
and (in integrative firms)
teams, HR, operations,
HR and other functional
and front-line
heads as advisors.
employees—guided by
top leadership.
Module 2: Strategic Human Resources Management
45
THE DIFFERENCE BETWEEN STRATEGY FORMULATION AND STRATEGY IMPLEMENTATION
Aspect
Strategy Formulation
Strategy Implementation
Skill emphasis
Analytical thinking,
Project management,
creativity, forecasting, risk
communication,
evaluation, negotiation.
leadership, motivation,
problem-solving, and
performance monitoring.
Outputs
•
Strategic Plan
•
Action plans & budgets
•
Corporate/competitive
•
New structures, systems,
strategy statements
•
Balanced-scorecard or
roadmap
or processes
•
Tangible performance
outcomes and feedback
data
Success indicators
Clarity, feasibility, internal
Timely delivery of
& external fit of the
objectives, efficiency,
chosen strategy.
employee engagement,
customer impact, and
financial results.
Common Pitfalls
Over-ambitious goals;
Poor communication;
ignoring HR or resource
resistance to change;
constraints;
misaligned incentives;
underestimating
inadequate resources or
competitors.
skills.
Source: Author’s compilation
To summarise what we know about Strategy Formulation and Strategy
Implementation, let us look at a quick analogy (Table 2.7)
TABLE 2.7: QUICK ANALOGY
Formulation is like architectural design—drafting blueprints, calculating loads, and
choosing the style.
Implementation is the construction phase—pouring concrete, erecting beams,
managing contractors, and solving on-site issues.
46
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
A brilliant design without solid construction—or impeccable construction on a flawed
design—both fail to deliver a sustainable building. Similarly, organisational success
demands excellence in both strategy formulation and implementation.
Tip for HR Professionals
In integrative linkage firms, HR contributes critical talent data during formulation
and
drives
resourcing,
culture
change,
and
capability-building
during
implementation—making HR an essential bridge between the two phases.
Source: Author’s compilation
2.6
THE ROLE OF HRM IN STRATEGY FORMULATION
The HR function needs to address the question, ‘What do we need to compete against
our competitors?’ to influence the organisation's strategic management process.
An organisation's top-level managers are responsible for making strategic decisions,
which often involve people-rated issues. Therefore, the HRM function needs to be
involved in strategic management decision-making.
Noe et al. (2023) identify four levels of integration between the HRM function and the
strategic management function, namely (1) the administrative linkage, (2) one-way
linkage, (3) two-way linkage and (4) integrative linkage, which are discussed in more
detail below.
Module 2: Strategic Human Resources Management
47
THE ROLE OF HRM IN STRATEGY FORMULATION
FIGURE 2.6: LINKAGES OF STRATEGIC PLANNING AND HRM
Source: Noe et al., 2023, p. 78
2.6.1 THE ADMINISTRATIVE LINKAGE
The administrative linkage is the lowest level of integration. The HRM function focuses
on day-to-day activities and, therefore, has no time or opportunity to take a strategic
view of HRM issues. Thus, the organisation's strategic planning function exists without
any input from the HRM department. In this case, the HR department only completes
administrative tasks unrelated to the organisation's core business needs. (Noe et al.,
2023)
2.6.2 ONE-WAY LINKAGE
In the one-way-linkage process, the organisation's strategic business planning
function develops the strategic plans and informs the HRM function of the plans.
According to Noe et al. (2023), this level of integration is strategic HRM, as it is the
role of the HRM function to design systems and programmes that implement the
strategic plan. The one-way linkage process recognises the importance of the HRM
function in the implementation phase. Still, it disregards the HRM function's
importance when consulting with the HRM function about issues that influence the
strategy formulation phase.
48
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
2.6.3 TWO-WAY LINKAGE
The two-way linkage process allows for inputs from the HRM function about issues
affecting the strategy formulation process. According to Noe et al. (2021), the
integration occurs in three sequential steps. The first step involves the strategic
planning team informing the HRM function of the possible strategies. During the
second step, the HRM executive analyses the human resource implication of the
various strategies and presents the findings to the strategic planning team to make a
decision. In the final step, the HRM executive develops a programme to implement the
strategies. An essential characteristic of this phase is that strategic planning and HRM
functions are interdependent.
2.6.4 INTEGRATIVE LINKAGE
The integrative linkage system is a dynamic and multifaceted process based on
continuous interaction (Noe et al., 2023). The HRM executives are often integral
members of the senior management team. Thus, the HRM function is involved in
strategy formulation and implementation processes in strategic HRM.
The HRM executive provides strategic planners with information about the
organisation's human resource capabilities. This information assists top management
in choosing the best strategy because they can consider how each alternative strategy
will impact the organisation. Once the strategic choice has been made, the HRM
function's role is to develop and align the HRM practices to provide qualified
employees who can implement the strategy.
Let us now look at a practical example to understand how HR links with strategic
management differ at each level of integration.
TABLE 2.8: PRACTICAL EXAMPLE TO EXPLAIN THE LINKAGES
EcoWatt is a midsize South African retailer of home-solar kits that has decided to
add an online store to reach customers across the SADC region. Table 2.9 illustrates
how HR links with strategic management differ at each level of integration.
Source: Author’s compilation
Module 2: Strategic Human Resources Management
49
THE ROLE OF HRM IN STRATEGY FORMULATION
TABLE 2.9: TABLE TO EXPLAIN THE VARIOUS LEVELS OF HR STRATEGY
INTEGRATION
Level
of
HR–Strategy What
Integration
Practice
Administrative Linkage
•
Happens
in Outcome
The executive team
approves the ecommerce idea.
•
HR keeps processing
The launch is delayed.
Marketing can’t find web
developers internally; lastminute outsourcing costs
soar.
payroll, leave, and newhire paperwork for the
brick-and-mortar stores
only.
•
No one asks HR about
skills or head-count
needs for the digital
venture.
One-Way Linkage
•
The board signs off a
detailed e-commerce
strategy and then hands
it to HR.
•
HR executes the brief
efficiently, but some hires
clash with EcoWatt’s culture
because HR never
influenced the earlier
strategic talent assumptions.
HR is told: “Recruit five
developers and three
digital marketers. Set up
an online sales bonus
plan”.
Two-Way Linkage
•
Step 1 – The Strategy
team shares three
Decision quality improves;
the plan is realistic and
talent-ready from day one.
growth options (regional
website, third-party
marketplace, or
franchise model) with
HR.
•
Step 2 – HR analyses
each option’s people
impact (skills gaps,
salary benchmarks,
50
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE MANAGEMENT
labour-law challenges in
neighbouring countries)
and presents a report.
•
Step 3 – Executives
choose the regional
website route; HR
designs a phased hiring,
training, and reward
package to match.
Integrative Linkage
•
HR Director/s sits on the
strategy task force from
the outset.
•
While market data are
gathered, HR maps
existing digital skills,
Seamless execution: crosstrained staff boost customer
experience, time-to-launch
shortens, and first-year
online revenue exceeds
target because HR and
strategy are fully
interconnected and aligned.
proposes reskilling store
staff for online chat
support and models the
cost/benefit of hybrid
work.
•
As the plan evolves, HR
fine-tunes structures,
culture change, and KPIs
in real-time.
Source: Author’s compilation
What we have learned from the practical example:
•
Administrative linkage keeps HR in a back office.
•
One-way linkage lets HR implement but not influence strategy.
•
Two-way linkage creates a consultative loop that refines strategic choices.
•
Integrative linkage embraces HR at the strategy table, ensuring people, culture,
and capability are built into every strategic move—turning HR into a true driver
of competitive advantage.
Module 2: Strategic Human Resources Management
51
SUMMARY
2.7
SUMMARY
In this chapter, we discussed the contribution HR can make by joining the strategic
imperative. We discussed the difference between strategy formulation and strategy
implementation and focussed our attention on the components of the strategic
management process.
The role of the HRM function in strategy formulation was discussed, and various
challenges were identified facing human resource management today. The next
chapter investigates strategic human resource management (SHRM), focusing on
workforce planning.
52
© Business Management Training College (Pty) Ltd
CHAPTER THREE
Strategic Human
Resource Planning
IN THIS CHAPTER:
3.1
INTRODUCTION ....................................................................................... 56
3.2
TYPES OF HR PLANNING ....................................................................... 56
3.3
STRATEGY-LINKED HRP ........................................................................ 59
3.4
CONSEQUENCES OF POOR HRP .......................................................... 62
3.5
ELEMENTS OF STRATEGIC HUMAN RESOURCE PLANNING (SHRP) 64
3.6
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING (SHRP)
PROCESS ................................................................................................. 64
3.7
THE HUMAN RESOURCE PLANNING PROCESS .................................. 73
3.8
FORECASTING HUMAN RESOURCE DEMAND AND SUPPLY ............. 73
3.9
QUALITATIVE AND QUANTITATIVE FORECASTS ................................. 76
3.10
MANAGING LABOUR SURPLUS AND SHORTAGE ................................ 90
3.11
FORMULATING AND IMPLEMENTING STRATEGIES TO DEAL WITH
LABOUR SURPLUSSES OR SHORTAGES ............................................. 90
3.12
SUCCESSION PLANNING ....................................................................... 92
3.13
SUMMARY ................................................................................................ 92
SUMMARY
54
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
CHAPTER 3: STRATEGIC HUMAN RESOURCE PLANNING
(SHRP)
AT THE END OF THIS CHAPTER, YOU SHOULD BE ABLE TO:
•
Examine the internal and external factors that influence workforce planning.
•
Discuss how to align an organisation’s strategic direction with its human
resource planning.
•
Discuss the qualitative and quantitative methods of forecasting HR demand and
supply.
•
Discuss the advantages and disadvantages of the various ways of eliminating
a labour surplus and avoiding a labour shortage.
CONCEPTS AND VOCABULARY
•
Human resource planning is the process of anticipating and providing for the
movement of people into, in and out of an organisation to find the best fit
between employees and jobs (Warnich et al., 2022, p. 125).
•
Opportunities are positive elements of an organisation's external environment
(Stewart & Brown, 2009). Therefore, these external factors generally contribute
to the organisation's success.
•
Strategic HR planning, sometimes called workforce planning, is the process
by which organisational goals are translated into HR objectives, as put forth in
the mission statements and organisational plans. To ensure that the
organisation is neither over- nor understaffed and the employees with the right
talents, skills and desires are available to carry out their tasks/duties in the right
jobs at the correct times (Warnich et al., 2022, p. 125).
•
The external environment includes forces outside the organisation's
boundaries that influence the organisation and their outcomes (Stewart &
Brown, 2009). The external environment consists of opportunities and threats.
•
The external analysis refers to the process of examining an organisation’s
operating environment to identify strategic opportunities and threats.
Module 2: Strategic Human Resources Management
55
TYPES OF HR PLANNING
•
The internal analysis refers to the process of examining an organisation’s
strengths and weaknesses.
•
Threats are negative elements of an organisation's external environment
(Stewart & Brown, 2009). In addition, an organisation have no control over
these external factors.
3.1
INTRODUCTION
Due to legislation and other aspects that impact human resource practices, human
resource planning practices have undergone severe changes in the past decade. As
a result, HR practitioners and academics have called for greater attention and closer
linkages between HR planning practices and organisational strategies. Therefore, the
development of Human Resource Planning (HRP) approaches from a strategic
perspective is commonly known as strategic HR planning (SHRP). (Warnich et al.,
2022)
Human resource planning, also called workforce planning, is the process of
anticipating and providing for the movement of people into, in and out of an
organisation to find the best fit between employees and jobs (Warnich et al., 2022, p.
125). Thus, it is a process that involves getting the right number of people into the right
job at the right time. It is a system “of matching the supply of people (internally –
existing employees) and (externally – those to be hired or searched for) with the
openings the organisation expects to have during a given time frame” (Byars et al.,
2016).
3.2
TYPES OF HR PLANNING
Warnich et al. (2022) point out that there are several options available to organisations
when doing Human Resource planning. Firstly, the company must decide if they want
to be proactive or reactive. Do they want to anticipate needs and systematically plan
to fill the jobs, or do they only want to react once the need arises?
Secondly, organisations can choose the extent of the planning. For example, do they
want to do planning in only one or two areas, such as recruitment and selection, or do
56
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
they prefer a broad focus that includes activities such as training, compensation,
employee well-being, etc?
The third choice involves the formality of the plan, which can either be informal or
formal. When an organisation decides on an informal route, the planning will be done
by the managers and HR staff, who tend to keep information to themselves, or they
can select a formal route which will clearly spell out the approach and thinking and
include documentation and data to back up the organisation’s thought process.
The last option involves the degree of fit between the human resource plan and the
strategic plan of the organisation. The HR plan can thus be either loosely tied, if at all,
to the organisation’s strategic plan, or it can be fully integrated with the strategic plan.
Craft (1988 cited in Warnich et al., 2022) identified the following possible types of
linkages: input linkages where the HR information is made available either before or
during the strategic planning process. This can be done through a specialised HR unit
doing the scanning or through a specialist committee consisting of HR personnel.
Decision inclusion linkage is where HR staff are either directly or indirectly involved
in the organisation’s strategic planning process. The review and reaction linkage
refers to a process where HR staff can respond to a proposed or final strategic plan.
The plan may be reviewed from an HR flexibility and desirability viewpoint. Staff may
even have sign-off authority.
This may sound a bit complicated, so let us look at some scenarios to put the theory
into practice (Table 3.1).
TABLE 3.1: PUTTING THEORY TO PRACTICE
Human-resource planning begins with a fundamental choice: Will we shape the
future or simply react to it? Picture two companies. SolarCity SA, a fast-growing
renewable-energy firm, uses forecasting software to predict how many installers,
data analysts, and customer-support agents it will need as it expands into Namibia
next year. Job descriptions and training modules are drafted months in advance—
an unmistakably proactive approach. By contrast, Tradition Textiles, a small family
Module 2: Strategic Human Resources Management
57
TYPES OF HR PLANNING
mill, advertises only when an operator resigns or is dismissed; supervisors must
handle the extra shifts until someone responds to the advert. That is reactive
planning in its purest form.
Once the “when” is decided, managers determine the scope. A lean fintech start-up
might restrict planning to recruitment and selection because hiring suitable
programmers and coders is its lifeline; everything else is handled as and when it is
absolutely necessary. On the other hand, a diversified retail multinational treats
planning as a wide canvas: succession charts, skills-gap analyses, pay-equity
reviews, wellness programmes—the works—because each business unit has
distinct, long-term talent demands.
Formality is the next split in the road. In many informal settings, a coffee meeting
between the HR officer and the sales director suffices to decide who needs to get
hired next quarter; the discussion lives in their notebooks. By contrast, a listed
company preparing for a labour issue cannot afford vagueness. Its formal HR plan
reads like a well-defined prospectus: spreadsheets on labour supply, Gantt charts
for upskilling, and appendices that cite industry benchmarks – sufficient evidence
for investors, unions, and regulators that their people strategy is under control.
The most telling difference lies in strategic alignment. Some HR plans float freely,
updated in isolation from corporate priorities; a call centre outsourcer may run yearly
head-count forecasts without ever asking how the firm’s AI strategy might trim voiceagent demand. At the opposite extreme, a pharmaceutical group intent on breaking
into biologics invites HR to every research pipeline meeting. Hiring scientists,
redesigning reward systems, and negotiating scarce-skill visas are written into the
business plan itself—HR and strategy are closely aligned.
•
Input linkage is the most straightforward: before the board develops a
strategy, HR presents a labour-market report and salary projections, giving
the board accurate data.
•
Decision-inclusion linkage goes further—HR leaders meet with the board
to debate whether a Kenyan distribution hub is feasible, given the current
talent availability. An HR executive may then monitor HR issues and
58
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
implications and participate in developing overall goals and strategy. In
another approach, the HR executive may sit in during strategy sessions and
only participate in HR issues.
•
Finally, the review-and-reaction linkage allows HR to reject or adjust the
final plan; a proposed 24-hour production schedule, for instance, may be sent
back because overtime rules would erode projected margins.
Whether a firm behaves like SolarCity SA or Tradition Textiles, its blend of
proactivity, scope, formality, alignment, and linkage determines how well the
organisation’s grand ambitions are translated into daily performance.
Source: Author’s compilation
3.3
STRATEGY-LINKED HRP
A business-level strategy is a competitive strategy that describes how an organisation
will compete with organisations that produce similar goods or services. Stewart and
Brown (2009) identify two types of strategies that apply to human resource
management in organisations:
1. A competitive business strategy is a strategy that focuses on choices and
actions about how best to serve the needs of the organisation's customers.
2. A human resource strategy is a strategy that focuses on choices and actions
concerning the management of people within the organisation.
These two strategies must work together to ensure high organisational effectiveness.
Organisations will likely have human resource practices that fit their competitive
business strategies. Organisations that effectively recruit, select, train, and
compensate their employees develop an advantage that is difficult to imitate by
competitors. According to Stewart and Brown (2009), competitive advantage
maximises when an organisation has a clear competitive strategy and a matching
human resource strategy.
Module 2: Strategic Human Resources Management
59
STRATEGY-LINKED HRP
A strategic approach to HRM views people as an essential resource vital to the
organisation's success. Furthermore, Iqbal (2018, p. 7) states that “HRM practices
designed under the umbrella of business strategy have a significant effect on
organisational performance”. In addition, the approach also encourages and enhances
employee morale and productivity, guarantees the selection of the most qualified and
suitable candidates and aids in employee retention by ensuring job security, which is
a critical component for employee retention and loyalty.
According to Dryer (cited in Warnich et al., 2018), SHRP is the process through which
organisational goals are described in mission statements and organisational plans and
translated into HR objectives. The process is very distinct from the traditional HR
planning method, which focuses primarily on actions related to annual forecasts.
The responsibility for SHRP lies with HR managers at all levels of the organisation.
HR managers cannot function in isolation but need the help of line managers to
execute plans. Table 3.1 illustrates the SHRP process at an organisational and human
resource level.
TABLE 3.2: LINKING STRATEGIC PLANNING AND HUMAN RESOURCES
•
ORGANISATIONAL
HUMAN RESOURCE
LEVEL
LEVEL
Identify the purpose and
•
scope of the
MISSION, VISION AND
VALUES
organisation.
•
•
business philosophy.
•
Clarify its long-term
Establish a cultural
foundation.
•
direction.
Capture underlying
Establish its enduring
Guide ethical code of
conduct.
beliefs and principles.
•
Asses its opportunities
•
and threats (OT)
EXTERNAL ANALYSIS
•
(OT)
Conduct external
Analyse the industry and
competitors.
60
trends
•
environmental scanning.
•
Measure demographic
Measure the external
supply of labour.
•
Benchmark competitors'
HR metrics
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
•
•
ORGANISATIONAL
HUMAN RESOURCE
LEVEL
LEVEL
Analyse the
Analyse the workforce's
organisation's strengths
culture, competencies
and weaknesses (SW)
and composition
Analyse the
INTERNAL ANALYSIS
organisation's
(SW)
competencies.
•
•
•
Forecast the demand for
employees.
•
Analyse the
Forecast the supply of
employees.
organisation's resources
in terms of people,
processes and systems.
•
Develop a corporate
•
strategy.
•
STRATEGY
FORMULATION
•
Develop a business
Establish productivity and
efficiency goals.
•
Establish quality, service,
strategy.
speed and innovation
Develop a functional
goals for the workforce.
strategy to ensure
•
alignment with other
Ensure vertical and
horizontal fit.
strategies
•
STRATEGY
IMPLEMENTATION
•
Design structures,
•
Reconcile supply and
systems, etc.
demand via hiring,
Allocate resources.
downsizing, layoffs, etc.,
to motivate employees to
achieve the strategy.
•
Evaluate benchmarking
•
efforts.
EVALUATION
•
Ensuring alignment is
achieved.
•
Maintain human capital
metrics.
•
Utilise a balanced
scorecard.
Encourage workforce
agility and flexibility.
Source: Wärnich et al., 2022, p. 126
Integrating HR planning with strategic organisational planning ensures that HR
programmes and policies achieve intermediate and long-term organisational goals.
Module 2: Strategic Human Resources Management
61
CONSEQUENCES OF POOR HRP
Additionally, SHRP can improve the organisation's profitability through better
utilisation of employees. Thus, by linking HR planning with organisational planning, an
organisation can gain a competitive advantage by pursuing a given number of strategic
objectives and initiatives successfully in the future. With new competitive conditions,
the COVID-19 pandemic and the emergence of a new world of work, Wärnich et al.
(2022) emphasized the significance of SHRP and the importance of strategic change.
Strategic change refers to the significant transformations in the structure, size or
functions of an organisation to achieve strategic objectives (Wärnich et al., 2022).
Additional Reading:
Indeed Editorial Team (2022, December 27). Strategic Change: Definition, Steps
and Examples. Indeed. https://www.indeed.com/career-advice/careerdevelopment/strategic-change
3.4
CONSEQUENCES OF POOR HRP
We discussed the planning failures of SAA in Chapter 2, section 2.2. Below are three
additional case studies of South African businesses whose momentum stalled
because HR planning lagged behind operational reality. Each example highlights
different challenges that were experienced due to insufficient talent pools, poor
retention tactics or succession plans being left to chance.
1. Denel – A high-tech defence champion drained of critical skills
For years, Denel was the benchmark of local aerospace innovation (think Rooivalk
helicopters and Umkhonto missiles). Yet by late 2024, the Auditor-General told
Parliament that the state-owned group had “lost skilled staff due to a lack of job
security”, creating “skills and capacitation constraints” that now threaten its major
revenue projects and have led customers to cancel contracts or impose penalties. With
no robust retention scheme or succession pools in place, unexpected exits of senior
engineers left design teams half-built, and R900 million of bailout funds still locked up
because turnaround milestones could not be met. (Martin, 2024)
62
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
HR-planning failure: no long-term retention or knowledge-transfer plan for ageing
specialist engineers.
2. Transnet Port Terminals – Record vessel backlogs after talent & equipment
gaps
Durban and Cape Town container terminals hit crisis levels in November 2023, with
an estimated 79 vessels and 61,000 containers stuck offshore. A 2024 market-insight
report pins much of the bottleneck on “underinvestment in equipment and the loss of
critical functional skills”, citing high staff turnover, low morale and too few trained crane
and straddle-carrier operators. Transnet’s own recovery plan now lists “recruiting and
developing skills in critical port domains” as an emergency priority to restore
throughput. (Clyde & Co., 2024)
HR-planning failure: vacant operator posts went unfilled for months while cargo
volumes kept rising, so demand overwhelmed capacity almost overnight.
3. Up-market Restaurants – Chef scarcity shutters flagship kitchens
South Africa’s fine dining scene (a massive tourist highlight) faces what industry
insiders call a “simmering chef scarcity”. A BusinessLIVE feature (Shevel, 2024)
reports that restaurants are “closing because they’re trying to keep labour costs down”,
only to discover that trained chefs have migrated overseas for better pay, better hours
and less demanding environments. Without proactive apprenticeship pipelines or
retention incentives, several high-profile establishments in Cape Town and
Johannesburg trimmed trading hours or shut entirely within a single season. (Shevel,
2024)
HR-planning failure: no forward-looking workforce planning and analytics to flag the
departure of mid-career chefs, leaving vacancies open far longer than six months and
throttling service capacity just as tourist demand rebounded.
What can we learn from these case studies?
Module 2: Strategic Human Resources Management
63
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING (SHRP) PROCESS
These cases span defence, logistics and hospitality. Still, the underlying lesson is the
same. HR planning must be reactive rather than anticipatory; even the biggest and
most prominent brands can fall victim to sudden vacancies, skills needs, and unmet
demands.
3.5
ELEMENTS OF STRATEGIC HUMAN RESOURCE PLANNING
(SHRP)
Stone (cited in Nel et al., 2012) states that planning the availability of predetermined
employees at a specific time in the future who possess the appropriate skills,
knowledge, and abilities is the workforce planning part of organisational strategic
planning.
Warnich et al. (2022) identify two essential elements of SHRP, namely:
1. The HR objectives relate to changes needed concerning the organisation's
human resources. In addition, the objectives include who is responsible for
making the required changes.
2. The HR plans identify who needs to do what, when, where and how.
3.6
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING
(SHRP) PROCESS
According to Warnich et al. (2022), SHRP is divided into various distinct phases,
namely: (i) establishing the mission, vision and values, (ii) analysing the external
environment, (iii) performing internal analysis, (iv) formulating strategies, (v)
implement the strategy, and (vi) evaluate and assess the strategy (refer to Table 3.2).
3.6.1 ESTABLISHING THE MISSION, VISION AND VALUES
This step involves establishing the purpose of the organisation. It is important to note
that, to be successful as a company, an organisation's mission, vision, and values must
form an integrated part of a well-established strategic management process. This
process entails a set of decisions and actions to formulate and implement plans to
64
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
achieve a company’s objectives. Finally, the organisation's purpose is captured in the
mission statement, which explains why the organisation exists.
The mission statement also identifies where the organisation is heading in the future
(the vision) and describes the organisation's main principles and beliefs (value
system). Mission statements are usually comprehensive and generally limited to no
more than a couple of sentences.
Although the statement appears simple, it is often difficult to construct because it serves
as the foundation for everything the organisation does. For example, the mission
statement should state the primary type of product/service to be offered, the primary
markets/customer groups to serve, and the technology to be used in the
production/delivery process. It must also cover aspects such as the company’s
managerial philosophy and the self-image sought. Furthermore, the vision sets out
some desired future state and articulates what the organisation would like to achieve.
Finally, the organisation's value statement describes how managers and employees
should conduct themselves, how they should do business and what kind of
organisation they should build to achieve their mission (Evans, 2015).
HR is responsible for communicating the mission, vision and values accurately.
Recruitment practices must align with these values to ensure recruits match and share
these values. Additionally, HR must translate the mission, vision and values into the
job description and behaviours to reward employees for accomplishing these
objectives and values (Warnich et al., 2022).
3.6.2 CONDUCT AN EXTERNAL ANALYSIS
The term ‘external environment’ refers to the extrinsic variables, effects, events,
factors or situations outside the organisation that substantially impact its operation,
performance, profitability, and survival (Surbhi, 2022).
According to Noe et al. (2021, p. 83), external analysis refers to “examining the
organisation’s operating environment to identify strategic opportunities and threats”.
Environmental
scanning
gathers
information
Module 2: Strategic Human Resources Management
about
trends
and
anticipated
65
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING (SHRP) PROCESS
developments in the external environment and their relevance to the HR strategy.
Changes in the external environment have an impact on business operations. For
example, some changes in the external environment may create favourable conditions
(opportunities), while other changes may provide potentially unfavourable conditions
(threats) to the organisation.
Elements of the external environment include economic conditions, technological
changes, government influences and regulations, competition, socio-economic
factors, and others. Government influences include aspects such as legislation,
regulations and government expenditure. Economic conditions include the economy's
overall state, recessions, economic growth, percentage of unemployment, inflation,
interest and exchange rates, and commodity (oil, steel, gold, etc.) prices.
Competitive concerns relate to the emergence or departure of direct competitors
(those in the same industry) and businesses that compete for the same labour and
other resources. According to Byars et al. (2016), changes within the workforce refer
to the composition and work habits of the workforce. For example, the impact of
technological changes can vary from having a devastating effect on the business to
having an extremely positive impact.
One only has to consider the impact of technological developments, including the
internet, AI (artificial intelligence), video communication, IoT, new production
processes, and machine learning, on business operations today. SHRM often does
not start with an objective analysis of the external environment. It is based more on the
culture of the organisation and the mindsets of leadership.
Figure 3.1 illustrates the external influences of workforce planning, which is an HR
function but also a responsibility of all managers in the organisation.
66
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
FIGURE 3.1: EXTERNAL INFLUENCES ON WORKFORCE PLANNING
Policitical
Cultural
Economic
Social
Workforce
Planning
Business
Technology
Legal
Demographic
Source: Nel et al., 2012, p. 163
3.6.3 CONDUCT AN INTERNAL ANALYSIS
To conduct a fair and valid analysis of a company’s strengths and weaknesses, it
needs input from the HRM function (Noe et al., 2023). Organisations are starting to
realise that their human resources are their biggest asset to create a competitive
advantage because it cannot be imitated.
Can you imagine what will happen if a company selects a strategy that cannot be
pursued because they did not consider the organisation’s strengths and weaknesses?
For example, let us assume a company decides to follow a cost reduction strategy
through technological improvements and development. They then build a plant that is
capable of using computer-integrated manufacturing systems. After consultation with
Module 2: Strategic Human Resources Management
67
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING (SHRP) PROCESS
HR, they then realised no staff in the organisation could work the highly advanced
operation systems because the majority of the workforce only has lower-level
schooling.
With an integrative linkage (as discussed in section 3.3), strategic planners consider
all the people-related business issues before making a strategic choice. These issues
refer to the analysis of the mission, goals, strengths and weaknesses, opportunities
and threats, leading the organisation to a more intelligent strategic choice.
The term ‘internal environment’ refers to the factors the organisation controls,
including its culture, product development, mission, and strategy. (Surbhi, 2020).
Internal analysis is “the process of examining an organisation’s strengths and
weaknesses” (Noe et al., 2021, p. 83). Organisations need to assess their internal
environment to establish the areas needing change and improvements, determine
what the organisation is doing well, and keep doing so. This process involves
assessing the capabilities of employees, the composition of the workforce and the
corporate culture (Stewart & Brown, 2009) to inform the organisation about its current
position.
The identified strengths represent aspects of the organisation's operations that provide
a potential competitive advantage, whereas the identified weaknesses present areas
in need of change or improvements.
Before we continue, let us put theory into practice by looking at a well-known South
African enterprise by conducting a SWOT analysis.
TABLE 3.3: SWOT ANALYSIS: SHOPRITE HOLDINGS LTD
Shoprite is Africa’s largest grocery retailer, operating more than 3,600 stores under
brands such as Shoprite, Checkers, Usave and OK Furniture and employing over
153,000 people. In fiscal year 2024, it lifted group sales by 12 % to R240.7 billion
and headline earnings by 7.2 %. (Dludla, 2024; Newsroom, 2024; South African
Grocery Retailer Shoprite’s Annual Sales Jump 12%, 2024).
By using their background information, let us compile a SWOT analysis for the group
Source: Author’s compilation
68
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
TABLE 3.4: PUTTING THEORY INTO PRACTICE - SWOT ANALYSIS
SHOPRITE
Source: Author’s compilation
Module 2: Strategic Human Resources Management
69
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING (SHRP) PROCESS
Figure 3.2 illustrates the human resource needs of the future. This figure depicts the
workforce planning process: the labour demand (number of employees needed in the
organisation) and labour supply (the number of qualified employees available). The
process further involves the entry of people into the organisation (acquisitions), the
development of employees (training), and the exit of employees (departures). Thus,
workforce planning is a systematic, fully integrated organisation process that involves
proactively planning to avoid labour surpluses or shortages (Nel et al., 2012).
FIGURE 3.2: A MODEL FOR HR FORECASTING
Source: Wärnich et al., 2022, p.131
3.6.3.1 Examples of internal factors influencing HR planning
3.6.3.1.1 The Nature of the Organisation
The type of organisation, as well as the workforce size of the organisation, may also
impact HR planning. A company’s size and business model dictate how urgently it
must refresh its headcount. Let us consider OUTsurance, whose Centurion call centre
employs thousands of sales advisers. Performance targets are unforgiving, and agent
turnover is relatively high, as even former employees acknowledge because only the
70
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
top sellers stay the course. HR, therefore, maintains an almost continuous recruitment
pipeline and fast-track training academy to keep positions filled. By contrast, a
boutique audit partnership with 25 chartered accountants may lose only one senior
partner each year. For this reason, its HR plan focuses less on volume hiring and more
on developing a narrow succession pool for future partners.
3.6.3.1.2 Strategic Organisational Goals
An organisation’s strategic organisational goals, related to the growth goals of a
company, must be considered when conducting HR planning. For example, a
company planning to expand its business may need to consider its current available
human resources and determine its future needs to support the expansion. Let us
consider Clicks Group, for instance, which has committed to expanding its store
footprint to 1,200 health-and-beauty stores in the next few years by opening 40 to 50
stores and pharmacies annually. (Clicks Business Review, 2023)
HR must, therefore, forecast how many pharmacists, pharmacy assistants and store
managers will be needed, secure bursary pipelines with pharmacy schools, and
negotiate work-back contracts long before store opening dates. Without that forwardthinking view, new pharmacies and stores would be ready but unopened simply
because qualified professionals are not available.
3.6.3.1.3 HR Policies
The development of an organisation’s policies is to attain strategic organisational
goals. Therefore, the organisation’s HR policies must be created in line with the
organisation's mission, vision and values. HR policies must be designed to recruit,
develop, and retain appropriate talent to achieve organisational goals. HR policies may
also include best practices and guidelines that prescribe the processes and
procedures for recruitment, selection, training and development, and promotion of staff
to meet HR needs. Some other factors that an organisation should consider when
conducting HR planning are policies regarding the age of retirement for staff and
specific qualifications and experience that are inherent requirements of a specific job.
Module 2: Strategic Human Resources Management
71
STEPS IN THE STRATEGIC HUMAN RESOURCES PLANNING (SHRP) PROCESS
Shoprite, for example, uses its Retail Readiness Programme (RRP), Youth
Employment Services (YES) and bursary opportunities as purposeful initiatives to
recruit, develop and retain scarce frontline talent. Each year, more than 6,000
unemployed young South Africans complete the paid, six-week course, giving the
retailer an available pool of trainee supervisor roles while supporting its inclusivegrowth value statement. A mining house that sets a compulsory retirement age of 60,
on the other hand, must embed accelerated mentorship in its HR plan so that critical
artisan skills transfer to Gen-Z employees before specialists exit at the determined
age.
3.6.3.1.4 Changes in organisational processes
An organisation that re-invents organisation processes may also need to revise their
needs for human capital. For example, suppose new technology is introduced to
automate some functions. In that case, it may mean that existing employees may need
to receive retraining and need new technological development skills to adapt to the
changes in organisational processes. Alternatively, recruiting new employees with the
appropriate skills is required. Circumstantially, employees are being retrenched due
to redundancy of positions or offered a different position and retrained for the role.
When operating models shift, job blueprints shift with them, as we have seen in the
banking sector recently (Businesstech, 2025; Peyton, 2019). Standard Bank began
closing or ‘digitally downsizing’ 91 branches as far back as 2019 and continued
decreasing its physical network through 2024 because customers prefer to use mobile
platforms. HR faced a tri-lemma (a choice between three alternatives): retrench
surplus tellers, upskill others as digital ambassadors, and recruit cloud engineers to
keep the new banking apps running. The skills mix inside the same organisation
changed dramatically even though its customer promise, convenient banking,
remained constant.
These examples discussed above show why HR planning cannot be generic. Highturnover call centres, expansion-eager retailers, youth-focused talent pipelines and
tech-driven banks all illustrate how internal factors such as structure, strategy, policy
and process can dictate the who, when and how of every hiring or reskilling move.
Ignoring any one of these elements may leave positions vacant, stores unopened, or
72
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
employees blindsided by technological change, which brings us to one of the most
important aspects of making provision for the future – forecasting.
3.7
THE HUMAN RESOURCE PLANNING PROCESS
Effective human resource planning begins with accurately forecasting the future needs
of an organisation. This process involves predicting both the demand for human
resources (how many employees with what skills will be needed) and the supply (who
will be available to fill these roles, both internally and externally). These processes are
critical to managing labour surpluses or shortages, which we discuss in more detail
in Section 3.10.
In the next section, we explore two primary approaches used in forecasting: qualitative
methods, which rely on expert judgment and insight, and quantitative methods, which
use statistical and mathematical models to project future HR needs. Understanding
the strengths and limitations of each method will help you as an HR professional to
select the most appropriate tools for planning a workforce that meets strategic goals.
3.8
FORECASTING HUMAN RESOURCE DEMAND AND SUPPLY
The primary goal of forecasting is to predict areas in the organisation where there
may be labour surpluses or shortages. In addition, absenteeism, management
philosophy, technology, economics, etc., need to be considered.
According to Wärnich et al. (2022), forecasting aims to establish the organisation's
overall staffing needs. Therefore, individuals' types, quantities, skills, and positions
during the planning period must be decided. During forecasting, the HR function
attempts to estimate the supply and demand of various types of employees in terms
of key performance areas that flow from the business plans (Grobler et al., 2022).
The workforce planner starts with specific job categories or skills and then determines
if the need for people in those categories and those particular skills will increase or
decrease in the future.
Module 2: Strategic Human Resources Management
73
FORECASTING HUMAN RESOURCE DEMAND AND SUPPLY
Forecasting changes, like retirements, are analysed with reasonable accuracy from
information in the skills inventory. Other changes, such as transfers and promotions,
can be predicted by considering factors such as the age and experience of individuals
in specific jobs combined with operational requirements. For example, discussions
with managers and performance appraisals can identify potential candidates for
promotions. Furthermore, when evaluating anticipated changes in the workforce, the
consideration of planned training and development interventions is required. Other
unpredictable variables include deaths, resignations and misconduct dismissals.
Additionally, past trends can provide valuable information to make future predictions.
The HR function combines the forecast for human resource needs with the information
gathered from the skills inventory and the anticipated changes after reasonable
predictions are made based on the organisation's requirements for a specific period.
The organisation's future human resource needs can be forecasted using various
methods, some simple and others more complex. Regardless of the technique used,
forecasts represent estimations only.
In sections 3.8.1 and 3.8.2, we discuss forecasting demand and supply in much
more detail.
3.8.1 FORECASTING DEMAND
After establishing organisational, divisional, and departmental objectives, the HR
function must determine the skills and expertise needed to meet the organisational
objectives (Byars et al., 2016). The primary aim is not to look at employees' current
skills and abilities but to determine the skills and abilities required to meet future
objectives.
According to Nel et al. (2021), forecasting labour demand is about estimating the
number of future workers needed. Therefore, several forecasting methods can
determine the demand for employees. However, according to Grobler et al. (2022),
forecasting accuracy depends on information availability and events' predictability.
74
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
Therefore, forecasting results in approximations. HR demand forecasts develop
around specific job categories or skill areas relevant to the organisation's current and
future state (Noe et al., 2023)
3.8.2 FORECASTING SUPPLY
Forecasting entails estimating the availability of workers with the required skills to meet
the organisation's labour needs in the future. The labour supply may come from
existing employees (internal labour market) or from outside the organisation (external
labour market) (Nel et al., 2021) and require a history of employee characteristics
which includes job classification, retirements, promotions, age profiles etc., (Wärnich
et al., 2022). Thus, forecasting of supply can be predicted from internal and external
sources. However, internal sources are generally the most important and readily
available (Grobler et al., 2022). Therefore, skills inventories and Management
Information Systems (MIS) are used to provide information.
The purpose of setting specific quantitative goals is to focus on the problem and
provide a benchmark for determining the relative success of any programme to
address a pending labour shortage or surplus. (Noe et al., 2023)
Furthermore, the goals should come directly from the analysis of labour supply and
demand and should include specific figures about what should happen with the job
category or skill area, as well as a timetable for when the results should be achieved.
Table 3.5 illustrates the available options to human resource planners seeking to
address expected labour surpluses.
TABLE 3.5: OPTIONS FOR REDUCING AN EXPECTED LABOUR SURPLUS
Speed
Human Suffering
Downsizing
Fast
High
Pay reductions
Fast
High
Demotions
Fast
High
Transfers
Fast
Moderate
Module 2: Strategic Human Resources Management
75
QUALITATIVE AND QUANTITATIVE FORECASTS
Speed
Human Suffering
Work sharing
Fast
Moderate
Hiring freeze
Slow
Low
Natural attrition
Slow
Low
Early retirement
Slow
Low
Retraining
Slow
Low
Source: Noe et al., 2023, p. 202
Table 3.6 illustrates the options available to human resource planners to avoid
expected labour shortages.
TABLE 3.6: OPTIONS FOR AVOIDING LABOUR SHORTAGES
Speed
Revocability
Overtime
Fast
High
Temporary employees
Fast
High
Outsourcing
Fast
High
Retained transfers
Slow
High
Turnover reductions
Slow
Moderate
New external hires
Slow
Low
Technological innovation
Slow
Low
Source: Noe et al., 2023, p. 202
3.9
QUALITATIVE AND QUANTITATIVE FORECASTS
An organisation must identify the quality (skills and abilities) and quantity (number) of
employees desired for the organisation's future. Methods for forecasting human
resource needs can either be statistically (quantitative) and/or judgementally
(qualitative) based (Byars & Rue, 2008).
According to Ross (2022), quantitative forecasts, like workforce trend analysis or
econometric calculation, focus on statistical and quantitative assessment. However,
using managerial judgment on a more individualised level, qualitative forecasts identify
internal needs before requesting proposals for or providing the necessary training.
76
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
An easy way to remember quantitative methods is to focus on the word ‘quant’,
which sounds like ‘quantity’—these methods deal with numbers and anything that
can be measured or counted. Words (like in qualitative) cannot really be measured
or counted.
Qualitative (judgmental) forecasts rely on experts' judgement or subjective
estimates of labour demand or supply. These experts are usually top managers
involved in the organisation's strategic planning and are familiar with the demands and
requirements of the organisation. These subjective methods may be less accurate
than those obtained through quantitative methods (Nel et al., 2012).
To help you remember qualitative methods, think of the ‘lit’ part as relating to
‘literature’ or ‘words’—these methods focus on opinions, experiences, and
descriptive information rather than numbers. Thus, something that someone said.
Additional Reading:
Tuovila, A. (2022, September 2022). Forecasting: What It Is, How It’s Used in
Business and Investing. Investopedia.
https://www.investopedia.com/terms/f/forecasting.asp
3.9.1 QUALITATIVE FORECASTING METHODS
HR demand and supply include the Delphi technique, Normal group techniques
(Wärnich et al., 2022) and scenario analysis. The Delphi technique is a group
communication exercise among a panel of geographically dispersed experts. These
experts do not need to sit together in one room during decision-making. Unlike the
Nominal group decision technique, this group process involves problem identification,
solution generation, and decision-making (Rudansky-Kloppers et al., 2023).
3.9.1.1 Managerial estimates
The managerial estimates method uses managers' estimates to predict future staffing
needs based primarily on past experiences. The estimates are usually made by top-
Module 2: Strategic Human Resources Management
77
QUALITATIVE AND QUANTITATIVE FORECASTS
level managers, passed down to lower-level managers, and reviewed by a
combination of managers.
TABLE 3.7: PRACTICAL SCENARIO: USING MANAGERIAL ESTIMATES TO
FORECAST HR NEEDS
Green Wheels Logistics, a Johannesburg-based courier company, has just signed
a new three-year contract to handle next-day deliveries for a national e-commerce
giant. Overnight parcel volumes in Gauteng are projected to double in the next three
years. The HR department must forecast how many additional drivers, warehouse
pickers, and customer service agents will be needed to deal with the increased
demand (with limited historical data).
Because time is limited, Green Wheels turns to the Managerial Estimates technique:
asking frontline and middle managers (those who know the work best) to provide
their own head-count projections.
A Step-by-Step process to conduct managerial estimates begins.
Step 1: HR Issues a simple template
Each depot manager receives a spreadsheet asking for:
•
Current staffing levels
•
Average daily parcel count
•
Projected parcel count under the new contract
•
Estimated staff needed to meet new demand without overtime
Step 2: Depot managers make their estimates
•
Ekurhuleni Depot manager notes that a driver currently handles 120 parcels
daily; the new contract will increase the load to 200 parcels. She estimates
15 more drivers and four pickers.
•
Sandton Depot runs more congested routes: a driver delivers 90 parcels
daily. Its manager forecasts 10 new drivers and 3 pickers to handle the
increase.
78
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
•
Pretoria Depot manager expects volume to spike on weekends only, so he
estimates an additional eight part-time drivers and two extra weekend
supervisors to deal with the increase in demand.
Step 3: Regional director reviews and adjustments
The regional logistics director aggregates the submissions and checks for
consistency:
•
Some depots built in generous buffers, while others were more conservative
with their projections.
•
She averages the figures, allocating a shared pool of five float drivers who
can rotate among depots to deal with the increased demand.
Step 4: HR translates estimates into a recruitment plan
HR now has a consolidated requirement:
•
Total new hires: 33 permanent drivers, 7 pickers, 2 supervisors, plus 5 float
drivers on flexible contracts.
•
HR designs recruitment adverts, sets up interview panels (including the depot
managers who made the estimates), and aligns training slots at Green
Wheels’ driver academy.
Why managerial estimates worked in this scenario
•
Direct operational knowledge: Depot managers know their route lengths,
traffic patterns, and scanner-loading times better than head office.
•
Speed: No complex statistical modelling—just informed judgment gathered
and refined in less than a week.
•
Ownership: Because managers produced the numbers, they’re committed to
helping HR fill and onboard those roles.
Source: Author’s compilation
Module 2: Strategic Human Resources Management
79
QUALITATIVE AND QUANTITATIVE FORECASTS
3.9.1.2 The Delphi technique
In the Delphi technique, each panel member of experts independently estimates future
demands, specifying any underlying assumptions. Then, an intermediary presents
each expert's forecast and assumptions to allow the panel members to respond to the
views and offer an opportunity to amend personal forecasts if a member wishes to do
so. Accordingly, to Wärnich et al. (2022), each individual uses feedback from other
experts to ‘fine-tune’ their independent estimates (p. 133). This process continues until
the panel reaches a consensus. In addition, this technique does not require the
participants' physical presence and often includes experts in different geographical
areas (Brevis & Vrba, 2017).
The Delphi technique involves using a series of confidential questionnaires to refine a
solution. Brevis and Vrba (2017) identify the following steps in the Delphi technique:
•
Identification of the problem. Members must provide potential solutions through
a series of carefully designed questionnaires.
•
Each
member
anonymously
and
independently
completes
the
first
questionnaire.
•
The initial questionnaire results are gathered, recorded, transcribed, and
reproduced in one central area.
•
Each member receives a copy of the results.
•
After reviewing the results, they are again requested to provide solutions. The
results lead to additional challenges, which often change the original position.
•
The repetition of the last two steps of the process is required as often as
necessary until the members reach a consensus.
TABLE 3.8: PUTTING THEORY INTO PRACTICE - THE DELPHI TECHNIQUE
UbuntuMed, a private hospital group in South Africa, plans to open three specialist
oncology wings within the next five years. To determine how many oncologists,
oncology nurses, and radiation technologists it will need. UbuntuMed’s HR team
turns to the Delphi technique, which is a structured, multistage survey of dispersed
experts designed to build a consensus forecast.
80
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
Round 1 – Individual Estimates
UbuntuMed identifies 25 experts: oncology department heads from major hospitals,
HR directors of competing healthcare groups, professors of nursing, and officials
from the Health Professions Council. Each expert receives a questionnaire with the
following three questions to answer anonymously:
•
“How many additional oncology nurses will South Africa require by 2030?”
•
“What vacancy rate do you project for private-sector oncologists over the next
five years?”
•
“What factors will most constrain radiation-technologist supply?”
The experts submit wildly different numbers. Some predict a 40% nurse shortfall;
others only a 10% shortfall. Each also lists assumptions (training-college output,
emigration rates, salary competitiveness).
Round 2 – Feedback and Revision
The facilitator (UbuntuMed’s HR analytics manager, who keeps responses
anonymous) compiles a statistical summary: median, upper- and lower-quartile
forecasts, plus the recurring assumptions behind them. She sends the summary
back to all experts, inviting them to revise their estimates in light of their peers’
reasoning. After seeing that most colleagues cited emigration and limited oncologynursing bursaries as top constraints, several experts adjusted their vacancy rate
forecasts upward.
Round 3 – Convergence
A second summary now shows the range has narrowed: projections for oncologynurse shortages cluster tightly around 28% rather than the initial 10 – 40% shortage.
One final, brief questionnaire asks for last adjustments and requests concrete
suggestions for closing the gap (e.g., bonded bursaries, fast-track specialisation).
•
UbuntuMed’s HR team received a consensus forecast: The shortfall
projected by 2030 is as follows:120 oncology nurses, 14 oncologists and 22
radiation technologists.
Module 2: Strategic Human Resources Management
81
QUALITATIVE AND QUANTITATIVE FORECASTS
•
The identified key risk factors are high emigration, slow specialist training and
low throughput, and a large public-to-private salary gap.
•
The mitigation ideas include instituting a funded fellowship with a two-year
work-back clause, lobbying the SA Nursing Council for additional oncologynurse training opportunities, and partnering with a university to co-fund
radiation-technologist scholarships.
Because the Delphi process preserved anonymity, senior clinicians felt free to revise
their views without losing face, and groupthink was minimized. The final, data-rich
consensus lets UbuntuMed launch bursary and recruitment pipelines three years
before the oncology wings open, dramatically reducing the risk of last-minute staffing
crises.
Why the Delphi Technique worked in this scenario
•
Iterative feedback refines wildly varied first-round guesses into a realistic,
defendable forecast.
•
Anonymity curbs dominant voices and rank-related bias—vital when
professors, regulators, and private-sector execs sit in the same virtual room.
•
Structured rounds give HR a clear audit trail of how the final numbers were
reached, reinforcing credibility when the business case goes to the board.
Source: Author’s compilation
3.9.1.3 Scenario analysis technique
Scenario analysis involves using workforce environmental scanning data to develop
alternative scenarios. These scenarios are developed in brainstorming sessions with
line and human resource managers who forecast their workforce predictions in five or
more years. Once the forecasts have been made, the managers work backwards to
identify key change points. The greatest advantage of scenario analysis is that it
encourages out-of-the-box thinking.
82
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
TABLE 3.9: PRACTICAL EXAMPLE: USING SCENARIO ANALYSIS TO
FORECAST HR NEEDS
Eco Ride SA is a Cape Town–based start-up that rents electric bicycles and
scooters to tourists and commuters. The founders want to know how many
technicians, customer service agents, and data analysts they’ll need over the next
three years. Because the market is still volatile, fuel prices unstable, tourism flows
irregular, and city-cycling regulations uncertain) they choose the Scenario Analysis
technique.
Step 1: Define the key uncertainties
After a workshop with finance, marketing, and HR, Eco Ride identifies two forces
that will most likely affect staffing needs:
1.
Tourism & commuter demand (low ⇢ high)
2.
City-infrastructure support (slow ⇢ rapid rollout of bike lanes and charging
points)
Plotting these on a matrix produces three plausible futures.
Step 2: Build the scenarios
Scenario
Narrative
Operational
HR Implications
Implications
A.
Steady Glide
(baseline)
International arrivals
recover gradually; the
City of Cape Town
completes only half its
planned bike-lane
upgrades.
Fleet grows from 800 to
1,200 e-bikes; the
service area stays within
the CBD and Atlantic
Seaboard.
B.
Fast-Lane
Surge
Tourism rebounds fully,
and petrol breaches R30
/ L; the city fast-tracks all
cycling infrastructure.
Fleet triples to 2 400
bikes; new depots in
Stellenbosch and
Durban; real-time
routing app upgraded.
C.
Detour &
Disrupt
Another pandemic
variant curbs travel; a
national power crisis
leads to daily loadshedding.
Demand drops 30 %;
fleet expansion paused;
focus shifts to corporate
long-term rentals with
guaranteed charging
bays.
Module 2: Strategic Human Resources Management
+ 8 technicians (for
battery swaps and
repairs) + 5 customerservice agents (callcentre & WhatsApp) + 1
junior data analyst
(usage-pattern reports).
+ 24 technicians + 12
customer-service agents
+ 4 data analysts + 3
depot managers; launch
a bursary to train biketech apprentices.
Freeze external hiring;
redeploy 6 technicians
to corporate-account
support; offer voluntary
remote-work packages
to excess call-centre
staff; invest in upskilling
data team for predictivemaintenance modelling
to cut costs.
83
QUALITATIVE AND QUANTITATIVE FORECASTS
Step 3: Develop early-warning triggers
•
Monthly tourism arrivals published by Statistics SA
•
Brent-crude price crossing US $100 per barrel
•
City-infrastructure roll-out scorecard updated quarterly
When two triggers point toward a given scenario, HR activates the matching staffing
plan.
Step 4: Craft Flexible HR Responses
•
Hiring Pipelines: Maintain relationships with three technical colleges so
intakes can scale from 8 to 24 bike technicians within six months.
•
Training Modules: Create modular e-learning, battery-swap skills,
customer-care chat scripts, and data analytics dashboards that can be rolled
out quickly as scenario B or C emerges.
•
Contingency Contracts: Sign option agreements with a staffing agency for up
to 15 temporary agents if the Fast-Lane Surge hits sooner than expected.
Outcome
By identifying contrasting futures, Eco Ride SA avoids a one-number head-count
forecast. Instead, it holds three fully costed staffing blueprints on file, each tied to
measurable signals. When 2026 tourist bookings spike and petrol rises above R32
per Litre, the triggers activate Scenario B.
HR can launch bursaries, step up technician recruitment, and pre-book customerservice training (weeks ahead of the demand curve) rather than scrambling when
bikes are already on backorder.
Why Scenario Analysis works in this example
•
Flexibility: Eco Ride doesn’t commit itself to a single forecast but rather
prepares several “what-if” situations to deal with recruitment demands.
•
Speed of Response: Clear triggers mean HR moves from planning to action
as soon as market indicators shift.
84
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
•
Strategic Alignment: Staffing numbers, skill sets, and training budgets are
matched to each strategic outcome, ensuring the workforce is neither under
nor over-resourced as conditions change.
Source: Author’s compilation
3.9.1.4 Nominal group technique
The nominal group technique entails using multiple inputs from several participants
(Van der Waal & Uys, 2009). Participants gather in small groups and independently
list their ideas regarding the forecast on paper. Each participant then provides their
ideas to the group. Each member's ideas are recorded and referred to later in the
group discussion. Eventually, all the ideas are prioritised and integrated.
This technique is normally used when:
•
Some members of the group are more vocal than others.
•
Some members of the group think better in a quiet place.
•
There are concerns about some members who do not participate.
•
Quantities of ideas are not easily generated in the group.
•
Members are new to the group.
•
There is heated conflict, and the issues are controversial.
To see an example of a research study that used the normal group technique to
identify conflict in the workplace, we suggest reading the case study below:
Van der Waal, C. S. & Uys J. M. (2009)
Applying the Nominal Group Technique in an employment relations conflict situation:
A case study of a university maintenance section in South Africa: original research
https://journals.co.za/doi/epdf/10.10520/EJC95888
Table 3.10 summarises the advantages and disadvantages of qualitative methods that
forecast HR demands and supply.
Module 2: Strategic Human Resources Management
85
QUALITATIVE AND QUANTITATIVE FORECASTS
TABLE 3.10: SUMMARY - QUALITATIVE FORECASTING METHODS
METHODS
Delphi technique
DESCRIPTION
•
ADVANTAGES
DISADVANTAGES
Can involve key
•
Highly subjective
experts
decision-makers
•
Judgments may
exchange
in the process
not be based on
Can focus on
the objective use
estimates of HR
what is expected
of data.
demands and/or
and desired in
supply (usually
the future
A group of
several rounds of
no face-to-face
•
•
•
interaction).
•
Not bound to
past experiences
Feedback from
other experts is
used to realign
their own
opinions.
Nominal group
technique
•
•
A small group of
•
Same
•
The same
experts meet
advantages as
disadvantages as
face-to-face.
the Delhi
for the Delhi
After an open
technique.
technique.
discussion
•
Group discussion
•
Group pressure
session, the
can facilitate the
may lead to less
group reaches a
exchange of
accurate
judgment about
ideas and greater
assessments and
future HR
inclusivity and
conclusions due
demands and
acceptance of
to peer pressure
supply.
results by
and fear of
participants.
exposure to
expressing their
own ideas.
Source: Wärnich et al., 2022, p. 133.
3.9.2 QUANTITATIVE FORECASTING METHODS
Quantitative (statistical) methods are used because it is considered to be more
accurate as they use figures (Nel et al., 2012). Mathematically based methods for
forecasting human resource needs include various statistical and modelling methods
86
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
(Byars & Rue, 2008). Statistical methods are used mainly to capture historical trends
in an organisation's demand for labour and can provide information that can make
predictions more accurate than judgmental processes.
Forecasting is often more accurate in stable organisations than in organisations that
operate in volatile environments. According to Byars et al. (2016), modelling methods
mostly provide a simplified abstraction of an organisation's human resource demands.
The HR function can determine the consequences of different demand scenarios by
changing the input data.
Table 3.11 summarises the advantages and disadvantages of quantitative methods
used to forecast HR demands and supply.
TABLE 3.11: QUANTITATIVE FORECASTING METHODS
METHODS
Moving averages
DESCRIPTION
•
ADVANTAGES
DISADVANTAGES
Averages data
•
Simplicity
about demand
•
Data easily
cyclic patterns
obtained
may be ignored
from recent
•
•
periods and
projects them into
Seasonal or
Relies on past
data
the future
Exponential
smoothing
•
Forecasters can
•
It may be used
•
Mathematical
vary weights for
to consider
HR demand
factors ignored
assigned to
by the moving
weights may be
different past-time
average
arbitrary
periods used to
method (e.g.
project future HR
cyclical
demand.
patterns)
Module 2: Strategic Human Resources Management
complexity
•
•
The choice of
Relies on past
data
87
QUALITATIVE AND QUANTITATIVE FORECASTS
METHODS
Trends projection
DESCRIPTION
•
ADVANTAGES
Easily
•
Rough estimates
people hired or
explained to
•
Relies on past
requested is
managers.
The number of
placed on one
•
DISADVANTAGES
•
data
Easily
axis, and the time
prepared by
is set on the other
HR planners.
axis. A straight
line is plotted from
past to future to
predict HR
demand.
Regression
•
The mathematical
•
formula used to
relate staffing to
It can include
•
many variables
•
Efficient use of
several variables
all available
(e.g. output,
data
Mathematical
complexity
•
Requires large
sample sizes
•
product mix, per
Relies on past
data
capita
productivity)
Linear programming
•
Assesses
•
Assesses what
•
Managers are
required staffing
should be the
sceptical of
level that matches
future state,
highly
desired output
not what will be
sophisticated
levels, subject to
methodology
•
certain constraints
(e.g. budget, cost)
Numerous
assumptions
must be made
Actuarial models
•
Relate turnover to
•
such factors as
Reflect the
•
past
accurate in
age and seniority
Simulations
88
•
Use scenarios to
It may not be as
individual cases
•
Useful for
test the effect of
considering
various personnel
alternative HR
policies
programmes
•
Accuracy varies
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
METHODS
Probability matrixes
DESCRIPTION
•
Define "states" in
ADVANTAGES
•
the organisation –
such as strategy
•
Help to identify
DISADVANTAGES
•
Require some
career patterns
mathematical
Help perform
sophistication
levels,
turnover
performance
analysis
•
Accuracy varies
•
Not adequate for
ratings
•
Identify time
period
First-order Markov
model
•
Multiply the
•
Adequate for
number of people
considering
long-term
in each job
alternative
forecasts
category by the
effects of
probability of
various HR
mathematical
movement
strategies
sophistication
•
Requires
between
job/position
categories. The
model assumes
that the current
job/position
category is the
chief determinant
of movement.
Semi-Markov model
•
Same as the first-
•
More inclusive
•
It is not very
order Markov
than a first-
useful for
Model except that
order Markov
considering the
probability is
model
alternative
determined by (i)
effects of
job/position
various HR
category and (ii)
strategies.
the individual's
•
Requires
length of stay in
mathematical
the job
sophistication.
Source: Wärnich et al., 2022, p. 132
Module 2: Strategic Human Resources Management
89
FORMULATING AND IMPLEMENTING STRATEGIES TO DEAL WITH LABOUR SURPLUSSES OR
SHORTAGES
3.10 MANAGING LABOUR SURPLUS AND SHORTAGE
One of the key responsibilities of human resource planning is ensuring that the
organisation has the right number of employees at the right time. However,
mismatches can occur—sometimes there are too many employees (a labour
surplus), and other times too few (a labour shortage). Both situations can negatively
impact productivity, morale, and overall performance.
In this section, we explore the various strategies organisations use to eliminate a
labour surplus and avoid a labour shortage, along with the advantages and
disadvantages of each method. Understanding these options helps HR professionals
make informed decisions that align workforce needs with business goals.
3.11 FORMULATING AND IMPLEMENTING STRATEGIES TO DEAL
WITH LABOUR SURPLUSSES OR SHORTAGES
Organisations formulate strategies to guide future actions and determine the best
ways going forward (Okumus et al., 2010).
An organisation’s competitive business strategy and human resource strategy
must be aligned (work together) to ensure organisational effectiveness. Therefore,
the HR strategy is formulated keeping the overall organisational strategy in mind.
A corporate-level strategy is a competitive strategy that concerns the different
businesses and diversity of products and services that an organisation produces
(Stewart & Brown, 2009). In contrast, a business-level strategy concerns how an
organisation will compete with other organisations that produce similar goods and
services. Thus, at the business level, an organisation can pursue various strategies.
Still, two generic business-level strategies best describe how businesses compete:
cost leadership and differentiation strategy.
3.11.1 GENERIC BUSINESS LEVEL STRATEGIES
According to Stewart and Brown (2009), a cost leadership strategy aims to produce
goods and services inexpensively. In contrast, a differentiation strategy aims to
produce goods and services that are superior to competitors' offerings. These
90
© Business Management Training College (Pty) Ltd
STRATEGIC HUMAN RESOURCE PLANNING (SHRP)
competitive strategies show that successful organisations create value by doing things
that other organisations fail to do for customers. Thus, the continued success of
organisations depends on developing capabilities that competitors cannot imitate
(copy).
The HR function plays a vital role in this respect as human resources are more
difficult (than products or services) to copy and is an easy way to gain a competitive
advantage.
The HR function formulates strategies and designs action plans that consider the
corporate business and functional strategies. The action plans must mainly focus on
recruitment, selection, placement, compensation, reduction and performance
appraisal strategies that can assist the organisation in achieving the overall business
strategies.
Strategy implementation addresses the issues of how to put a formulated strategy
into action with the limited time and resources available to the organisation (Okumus
et al., 2010).
Byars and Rue (2008) identify the following possible action plans:
•
Adding human resources: many environmental factors may impact
recruitment strategies, such as whether to hire permanent or temporary staff,
the availability of qualified, and union implications.
•
Outsourcing is when a party outside a company is hired to perform services
and create goods traditionally performed in-house by the company's employees
and staff. Outsourcing has become an attractive strategy due to cost savings
and often allows the parent company to focus on core business functions.
•
Downsizing is when the number of employees is reduced through layoffs,
terminations, early retirement inducements, and voluntary resignation
inducements. (Byars et al., 2016)
Module 2: Strategic Human Resources Management
91
SUMMARY
The ultimate goal of strategic planning is to improve the quality of strategic company
decisions by ensuring an alignment between human resources, capital resources and
physical resources (Warnich et al., 2022)
3.12 SUCCESSION PLANNING
Succession planning is about who will replace whom. According to Warnich et al.
(2018), succession planning does not normally form part of SHRP, but it is the logical
next step in strategic planning.
Succession planning refers to identifying a long-term plan to orderly replace key
employees or positions in the organisation that cannot be vacant. Succession planning
almost always involves a replacement chart showing appointees and potential
replacements for key positions. Thus, replacement charts must be periodically
updated to reflect changes in scenarios and potential requirements to be effective.
Furthermore, succession planning has two main functions: it makes transitions easier
when an employee leaves and identifies the training requirements of high-potential
workers who are about to advance in their jobs (Wärnich et al., 2022).
Byars et al. (2016) state a major disadvantage of succession planning is the ‘crown
prince’ syndrome. The mentioned happens when top management has pre-selected
specific candidates for promotion because they have become more visible due to
privileged opportunities given to them by management to ensure they are ‘seen’ by
top management.
3.13 SUMMARY
This chapter discussed the importance of having the right people in the right jobs at
the right time. The key to successful outcomes is human resource planning, also
referred to as workforce planning. Furthermore, the chapter examined the strategic
development of human resource planning with a focus on forecasting.
The major HR research methods and metrics will be discussed in the next chapter and
some research techniques.
92
© Business Management Training College (Pty) Ltd
CHAPTER FOUR
Human Resource
Research Methods
IN THIS CHAPTER:
4.1
INTRODUCTION ....................................................................................... 94
4.2
THE NATURE OF RESEARCH ................................................................. 94
4.3
TYPES OF RESEARCH ............................................................................ 95
4.4
INTRODUCTION TO HR MEASUREMENTS ............................................ 96
4.5
HR METRICS ............................................................................................ 97
4.6
HR RESEARCH TECHNIQUES ................................................................ 99
4.7
SUMMARY .............................................................................................. 103
THE NATURE OF RESEARCH
CHAPTER 4: RESEARCH METHODS
AT THE END OF THIS CHAPTER, YOU SHOULD BE ABLE TO:
•
Discuss the major HR research methods and metrics.
•
Discuss various research techniques.
CONCEPTS AND VOCABULARY
•
HR metrics are used to calculate the success or failure of workforce-related
HR projects or initiatives related to the HR function in terms of cost and impact
(Warnich et al., 2018).
•
HR research is collecting and investigating facts related to HR problems to
eliminate or reduce those problems (Warnich et al., 2018).
•
Human capital metrics include the measurement of HR practices but go
beyond by looking at other practices and people management strategies in
general, including the organisation's overall strategy (Warnich et al., 2018).
4.1
INTRODUCTION
As an advanced Business Management or Human Resource Management student,
you will complete your qualification with a final module focused on research
methodology, culminating in the submission of your own research study. Nevertheless,
this chapter serves as a basic introduction to HR research. Before diving into
advanced techniques, it is essential to understand the fundamental concepts and
methods of HR research. This foundation will not only prepare you for your final project
but also help you apply research principles in forecasting future human resource
demand and supply, enabling more informed and strategic workforce planning.
4.2
THE NATURE OF RESEARCH
Saunders et al. (2016) define research as a systematic process undertaken by people
to discover information or gain new insights, ultimately increasing their knowledge.
This definition highlights two key elements: research must follow a systematic, logical
94
© Business Management Training College (Pty) Ltd
RESEARCH METHODS
process, and it must aim to find out things—whether to solve a problem, test a theory,
or better understand a situation.
From an HR perspective, the HR function often conducts research to describe, explain,
understand, criticise, or analyse a phenomenon (incident) that relates to human
resource practices.
Saunders et al. (2016) argue that research's purpose and context can differ
considerably within the boundaries of advancing knowledge, addressing business
issues, solving managerial problems, and promoting the common good. For example,
the HR function may wish to conduct research to understand and explain the impact
of a particular policy on business operations or to suggest appropriate action based
on the research findings.
4.3
TYPES OF RESEARCH
Despite the various research purposes, Saunders et al. (2016) consider that a
continuum can be drawn between all business and management research projects
based on the established context and purpose.
4.3.1 BASIC (ALSO CALLED FUNDAMENTAL OR PURE) RESEARCH
Basic research is conducted to understand the business and management processes
and outcomes. This type of research is mainly conducted at universities and has an
academic agenda. The research findings are most relevant to the academic
community. Researchers have flexible timelines and often pay little attention to the
practical applications of the research (Saunders et al., 2016).
4.3.2 APPLIED RESEARCH
Applied research has immediate and direct use for managers, addresses significant
issues, and aims to solve problems. The research is mainly presented in ways that
managers understand, and the findings have practical relevance to the managers
and/or the organisation. The research objectives are negotiated with the originators
Module 2: Strategic Human Resources Management
95
INTRODUCTION TO HR MEASUREMENTS
(often top management), and tight timelines are provided to the researchers. The new
knowledge created is, however, limited to the problem.
4.4
INTRODUCTION TO HR MEASUREMENTS
HR Professionals and managers need to stay updated with the latest research findings
by reading HR journals (see Table 4.1) and magazines (Table 4.2) and using the
findings to promote managerial effectiveness, employee productivity, job satisfaction
etc,. (Warnich et al., 2022)
TABLE 4.1: LIST OF THE LEADING HR JOURNALS IN SOUTH AFRICA
1.
South African Journal of Human Resource Management (SAJHRM)
•
Publisher: AOSIS (Open Access)
•
Focus: Covers all aspects of human resource management, organisational
development, talent management, and industrial psychology.
•
Website: https://sajhrm.co.za/index.php/sajhrm
2.
South African Journal of Industrial Psychology (SAJIP)
•
Publisher: AOSIS (Open Access)
•
Focus: Emphasises psychological principles in the workplace, organisational
behaviour, employee well-being, and HRM applications.
•
Website: https://sajip.co.za/index.php/sajip
3.
Acta Commercii
•
Publisher: AOSIS Publishing
•
Focus: The Independent Research Journal in the Management Sciences.
Business and commerce-related topics, including HR strategy, workforce
development, and talent management.
•
Website: actacommercii.co.za
Source: Author’s compilation
These journals are ideal sources for staying updated on local HR research, South
African labour market insights, and academic references for assignments or
dissertations. Let me know if you'd like a list of international HR journals as well.
96
© Business Management Training College (Pty) Ltd
RESEARCH METHODS
TABLE 4.2: LIST OF THE LEADING HR MAGAZINES IN SOUTH AFRICA
1. HR Future
Focus: Strategic HR, leadership, future of work, and global HR trends tailored for
senior HR professionals and executives.
Frequency: Monthly (digital and print)
Website: https://www.hrfuture.net/
2. CHRO South Africa
Focus: Chief HR Officers and senior-level HR content. Covers executive interviews,
HR tech, talent management, diversity and inclusion.
Format: Digital and events-driven platform
Website: https://chro.co.za/
3. The People Factor Magazine
Publisher: South African Board for People Practices (SABPP)
Focus: Professional HR content aligned with SABPP standards, HR best practices,
legislation, and ethics.
Format: Digital newsletter and print (membership-based)
Website: https://peoplefactor.co.za/
Source: Author’s compilation
4.5
HR METRICS
define HRM metrics as “the information used to quantify, measure, and track the
performance of the organisation’s most significant asset, this being the workforce.”
The information enables the organisation to measure the value of the time and money
spent on HRM activities. Human Resource (HR) metrics are thus utilised to determine
the value and effectiveness of HR initiatives, which typically encompass areas such
as training, return on human capital, turnover, expenses per employee, and costs of
labour.
Härtel and Fujimoto (cited in Nel et al., 2012) state that the HR metrics entail
measurements used by organisations to evaluate the impact of their HR investment
Module 2: Strategic Human Resources Management
97
HR METRICS
and ensure that they are in line with the organisation's strategic goals, which could be
used to monitor the following:
•
What is going on within the organisation?
•
What effects do implemented changes have on the organisation?
•
What value does HR add to the organisation through its activities?
As an HR professional, it is important to understand the impact of HR initiatives and
projects in terms of cost and their impact on the organisation. This process is
conducted using different types of measurements referred to as HR metrics.
These metrics include diagnostic, evaluative, and human capital measures. Each of
these metrics is used for different purposes.
•
Diagnostic measures are used to generate regular reports that management
can use to measure a variety of HR initiatives. It can be used for simple
calculations of employee turnover and the number of applications received for
each vacancy, among other things. Also, diagnostic measures can be used to
measure compensation-related aspects, such as overtime calculation or the
training and development cost per employee.
•
Evaluative measurement measures the effectiveness of an organisation's
business strategy, policy, programme, initiative, or process. For example, this
may relate to evaluating a marketing campaign, employee policy, costing
strategy, and support service delivery.
•
Human capital metrics involve looking at the organisation's metrics that
impact the whole organisation. For example, the impact of employee wellness
on the workforce. Human capital metrics focus more on value than on costs.
Nel et al. (2012) suggest that HR metrics should be applied at various levels in an
organisation for measurement purposes and identify the following metrics:
•
Within-person metrics: This measurement analyses differences within a
person. Examples may include motivation, effort exerted by the person, interest
98
© Business Management Training College (Pty) Ltd
RESEARCH METHODS
and boredom regarding the job, execution of performance and extent of stress
being experienced.
•
Between-person metrics: This type of measurement analyses the differences
between people. Examples of between-person metrics include the extent to
which personality traits differ, aptitude, honesty, and the level of emotional
intelligence.
•
Within group-level metrics, measurements are used to analyse differences
between the groups. Measurement is conducted on the cohesiveness between
the group, prevalence or absence of conflict, communication effectiveness, and
morale level.
•
Organisational-level metrics use measurement to evaluate an organisation's
overall position. Examples include the nature of the organisation's climate,
sensitivity and extent of corporate social responsibility and overall
organisational performance.
The important aspect of HR metrics is using the correct measurement for the particular
aspects the organisation wishes to measure. Because past performance is measured
and evaluated, it uncovers the results of past decisions. However, the HR department
must look to the future to become proactive. New development in the field includes the
HR scorecard approach, which focuses on integrating HR's role in the organisation's
measurement of its performance.
4.6
HR RESEARCH TECHNIQUES
There are many different research techniques, but in this chapter, we will only discuss
the techniques most frequently used to conduct HR-related research, such as
surveys, interviews, historical studies and controlled experiments.
According to Wärnich et al. (2022), familiarity with various research techniques is
important for two reasons:
•
HR practitioners encounter various HR problems in an organisation and,
therefore, must apply appropriate research techniques to solve the research
Module 2: Strategic Human Resources Management
99
HR RESEARCH TECHNIQUES
problem. Research validity and usefulness are compromised if the wrong
technique is used.
•
HR practitioners must be able to interpret the findings of employers and
researchers and therefore need a broad understanding of research techniques.
Please refer to your prescribed Module 7: Research Methodology study material.
4.6.1 SURVEYS
Maree et al. (2016, 174) define a survey as “the assessment of the current status,
opinions, beliefs, and attitudes by questionnaires or interviews from a known
population”. Although surveys are usually conducted using a questionnaire,
information can be collected through various other ways, including interviews, video
communication, telephone calls and observation.
Surveys are the most frequent and cost-effective method used by HR professionals to
conduct research about, amongst other aspects, salaries and wages, job satisfaction,
employee engagement, etc. In addition, specific questionnaires can assist in collecting
data about employees’ opinions regarding job-related issues in the workplace.
(Warnich et al., 2022)
Surveys are used to answer the questions related to the ‘what’, ‘who’, ‘where’, ‘how
much’ and ‘how many’. Surveys using questionnaires are popular because they allow
easy comparisons of standardised data collection. In addition, the data is often easy
to explain and interpret.
Maree et al. (2016) identify two prominent characteristics of surveys:
•
Samples are usually big (from a few hundred to a few thousand)
•
Testing of many variables is conducted, and multiple hypotheses (assumptions)
are tested.
4.6.1.1 Survey administration
According to Warnich et al. (2022) survey administration involves several processes:
100
© Business Management Training College (Pty) Ltd
RESEARCH METHODS
•
Research objectives: The first step includes identifying the research
objectives. Common research objectives include identifying research problems,
excessive turnover, and concerns about pay and benefits.
•
Top management commitment: For the HR department to openly discuss and
share study findings with the employees, top management must support, ‘’buyin’’ and approve.
•
Survey development: The HR department can either develop the assessment
tools internally or use consulting agencies to prepare the tools. When designing
a survey, the most important aspect to consider is trustworthiness (reliability
and validity). Employees must have faith in the process to trust the findings.
•
Announcing the survey: Participants must be reminded of the ethical
considerations regarding the research. For example, all participants must sign
an informed consent form to ensure they are aware of the purpose of the survey
and what the results will be used for, including the consequences for nonparticipation (if any).
•
Implementation: Some important considerations for implementing the survey
include allowing sufficient time to complete the survey, administering the survey
simultaneously to all participants, and administering the survey in a natural
setting.
•
Analysis: It is important that the HR person(s) conducting the analysis need to
familiarise themselves with the organisation's ethics policy. It is also important
that the analysis identify possible limitations of the study.
•
Feedback: Survey results should be communicated in face-to-face meetings
(once they have been reviewed by top management) as soon as they become
available.
•
Follow-up sessions are important to ensure a good relationship between
management and employees. Feedback from management provides solutions
to problems, and employees need to know how these problems or challenges
can be solved. In addition, the follow-up sessions inform stakeholders of the
progress made since the implementation of the solutions.
•
Caution: survey findings gain meaning only through relevant comparisons.
Therefore, survey data gathered over time often improves trustworthiness. In
Module 2: Strategic Human Resources Management
101
HR RESEARCH TECHNIQUES
addition, HR analysts can track trends over a longer period to determine if
results are one-time events or significant enough to investigate in more detail.
4.6.2 EXIT INTERVIEWS
The purpose of an exit interview is to investigate which practices work and which do
not work in the organisation, including the challenges and opportunities to maintain
qualified staff. Exit interviews should be conducted with terminating employees about
the work environment to enhance the organisation's competitive advantage. The
success of exit interviews depends on the employees' perception and view of the
legitimacy of the process and whether the employees believe that there are no
consequences for providing the requested information.
According to Warnich et al. (2022) exit interviews usually involve discussing the
following topics:
•
Reason for leaving
•
Aspects of the job content
•
Effectiveness and fairness of company policies and procedures
•
The exiting employee’s perceptions of their supervisor or manager
•
Satisfaction with salary and benefits
•
The effectiveness of training and development opportunities.
Many employees have strong bonds with previous colleagues and may value the
opportunity to improve working conditions for these employees. Exit-level interviews
can be conducted through face-to-face discussions, exit-level questionnaires, an
emailed survey, or a combination of the assessment methods.
4.6.3 HISTORICAL STUDY
HR analyses often reveal interesting statistics about the organisation by tracking data
over a long period. For example, data concerning absenteeism and turnover can be
analysed to determine if the figures are increasing, decreasing or remaining
unchanged.
102
© Business Management Training College (Pty) Ltd
RESEARCH METHODS
4.6.4 CONTROLLED EXPERIMENTS
According to Saunders et al. (2016), an experiment is a form of natural science
research that strongly features in psychological and social science research. However,
a significant difference between experiments and other research studies is that it uses
predictions (hypotheses) rather than research questions to find answers to research
problems.
The purpose of an experiment is to study the probability of a change in an independent
variable (variables that are being manipulated or changed) to measure its impact on a
dependent variable. (Saunders et al., 2016). Resulting in causing a change in another
dependent variable (variables that may change in response to changes in other
variables; observed outcome or result from manipulation of another variable
(Saunders et al., 2016).
In other words, a controlled experiment is a phenomenon where only one variable is
changed simultaneously while all the other variables are kept constant. However, in
academic research studies, the variables can be created and controlled easily by the
researcher, whereas in an organisation, the HR researcher has no control over the
variables.
4.7
SUMMARY
This chapter introduced applied research and basic research. Various research
techniques were discussed in HR, and emphasis was placed on the survey research
technique. The next chapter will discuss organisational structure and workflow, the
importance of job analysis in strategic human resource management, and a discussion
of the different approaches to job design.
Module 2: Strategic Human Resources Management
103
CHAPTER FIVE
The Analysis and
Design of Work
IN THIS CHAPTER
5.1
INTRODUCTION ..................................................................................... 106
5.2
WHY WORK ANALYSIS MATTERS ....................................................... 108
5.3
WORKFLOW AND ORGANISATIONAL STRUCTURE ........................... 108
5.4
JOB ANALYSIS ....................................................................................... 120
5.5
JOB DESIGN ........................................................................................... 130
5.6
SUMMARY .............................................................................................. 138
THE ANALYSIS AND DESIGN OF WORK
CHAPTER 5: THE ANALYSIS AND DESIGN OF WORK
AT THE END OF THIS CHAPTER, YOU SHOULD BE ABLE TO:
•
Analyse and organisation’s structure and workflow process.
•
Explain the importance of job analysis in strategic human resource
management.
•
Select the appropriate job analysis technique for a variety of human resource
activities.
•
Critically discuss the different approaches to job design and discuss the tradeoffs among the various approaches.
CONCEPTS AND VOCABULARY
•
Centralisation refers to the degree to which decision-making resides at the top
of the organisational chart (Noe et al., 2023).
•
Departmentalisation refers to the degree to which work units are grouped
based on functional similarity or similarity of workflow (Noe et al., 2023).
•
Job analysis refers to getting detailed information about jobs (Noe et al., 2015).
•
Job design is the manipulation of job content, functions and relationships in a
way that both accomplishes organisational goals and satisfies the personal
needs of individual job holders (Wärnich et al., 2022).
•
Organisational structure refers to the relatively stable and formal network of
vertical and horizontal interconnections among jobs that constitute the
organisation (Noe et al., 2017).
•
Strategic job analysis refers to the process of brainstorming by experts to
make predictions about the issues in the job, the organisation, and the
environment that may affect the job in the future (Nel et al., 2012).
•
Workflow design is the process of analysing the tasks needed for producing
a product or service before allocating and assigning these tasks to a particular
job category or person (Noe et al., 2017).
Module 2: Strategic Human Resources Management
105
INTRODUCTION
5.1
INTRODUCTION
Before any organisation can optimise its workforce, streamline operations, or embark
on meaningful change, it must first understand how work is currently done and who is
responsible for doing what. This chapter, therefore, turns the spotlight on two
intertwined foundations of effective Human Resource Management: organisational
structure (the formal arrangement of roles, responsibilities and reporting lines) and
workflow processes (the sequence of tasks, information and decisions that transform
inputs into valuable outputs).
By examining these elements together, you will learn how to:
•
Map the formal and informal structure to identify decision-making bottlenecks,
span-of-control issues and communication gaps.
•
Trace workflow steps end-to-end, revealing redundancies, hand-off delays and
opportunities for automation or redesign.
•
Link structure and workflow findings to workforce planning: deciding how many
people, with which competencies, are required at each stage to meet strategic
objectives.
Throughout the chapter, we will introduce practical frameworks (such as organisational
charts, RACI matrices, process flow diagrams and value-stream mapping) supported
by real-world South African case examples. Mastery of these analytical tools will equip
you to recommend evidence-based improvements that enhance efficiency, elevate
employee experience and ultimately reinforce organisational competitiveness.
But before diving into the chapter, let us look at a case study to help us understand
the importance of workflow and organisational structure to optimise productivity.
106
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
TABLE 5.1: EXCERPT FROM "ARE WE REALLY MORE PRODUCTIVE
WORKING FROM HOME”
Facebook founder and CEO Mark Zuckerberg isn’t your typical office worker. He
was No. 3 on the 2020 Forbes list of the richest Americans, with a net worth of $125
billion, give or take. But there’s at least one thing Zuckerberg has in common with
many other workers: he seems to like working from home. In an internal memo,
which made its way to the Wall Street Journal, as Facebook announced plans to
offer increased flexibility to employees, Zuckerberg explained that he would work
remotely for at least half the year.
“Working remotely has given me more space for long-term thinking and helped me
spend more time with my family, which has made me happier and more productive
at work,” Zuckerberg wrote. He has also said that he expects about half of
Facebook’s employees to be fully remote within the next decade.
The coronavirus pandemic continues to rage in many countries, and variants are
complicating the picture, but in some parts of the world, including the United States,
people are desperate for life to return to normal—everywhere but the office. After
more than a year at home, some employees are keen to return to their workplaces
and colleagues. Many others are less eager to do so, even quitting their jobs to avoid
going back. Somewhere between their bedrooms and kitchens, they have
established new models of work-life balance they are loath to give up.
This has left some companies trying to recreate their work policies, determining how
best to handle a workforce that in many cases is demanding more flexibility. Some,
such as Facebook, Twitter, and Spotify, are leaning into remote work. Others, such
as JPMorgan Chase and Goldman Sachs, are reverting to the tried-and-true office
environment, calling everyone back in. Goldman’s CEO David Solomon, in
February, called working from home an “aberration that we’re going to correct as
quickly as possible.” And JPMorgan CEO Jamie Dimon said of exclusively remote
work: “It doesn’t work for those who want to hustle. It doesn’t work for spontaneous
idea generation. It doesn’t work for culture.”
Module 2: Strategic Human Resources Management
107
WORKFLOW AND ORGANISATIONAL STRUCTURE
This pivotal feature of pandemic life has accelerated a long-running debate: What
do employers and employees lose and gain through remote work? In which setting—
the office or the home—are employees more productive? Some research indicates
that working from home can boost productivity and that companies offering more
flexibility will be best positioned for success. But this giant, forced experiment has
only just begun.
You can read the full article here: https://www.chicagobooth.edu/review/are-wereally-more-productive-working-home
Source: Stropoli, 2021, Paras. 1 - 5.
5.2
WHY WORK ANALYSIS MATTERS
The pandemic-era experiment in mass remote work (Stropoli, 2021), captured in the
Chicago Booth Review case study “Are We Really More Productive Working from
Home?” (Table 5.1) proves there is no single best way to design jobs or organise a
company. In surveys covering 25,000+ US workers, nearly 60 per cent said they were
more productive at home, yet a deep-data study of 10,000 IT employees found output
per hour actually fell about 20 per cent while coordination time and after-hours work
soared. These mixed results underline why HR professionals must go beyond gut feel
and systematically analyse three layers of work before deciding whether to centralise
or decentralise, bring staff back, stay remote, or adopt a hybrid model.
By walking through outputs, processes and inputs before redrawing the organisational
chart, companies avoid snap decisions (“everyone back in the office” or “fully remote
forever”) and instead craft structures (centralised, decentralised or hybrid) that align
with real work requirements and strategic outcomes.
5.3
WORKFLOW AND ORGANISATIONAL STRUCTURE
Workflow design and organisation structure can be used to gain a competitive
advantage, but how to do this depends on the organisation's strategy and competitive
environment.
In the next section, we investigate the process of conducting workflow analysis and
organisational structure.
108
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
5.3.1 WORKFLOW ANALYSIS
All organisations have to identify the outputs of work to specify the quality and quantity
standards for those outputs and to analyse the process and inputs necessary for
producing outputs that meet the quality standards (Noe et al., 2017).
The ‘cause-and-effect’ concept is where the cause is regarded as input, and the
effect is known as the output.
The workflow analysis aims to help managers determine all the tasks required to
produce high-quality products, including all the necessary skills needed to perform
those tasks.
Figure 5.1 illustrates the workflow process.
FIGURE 5.1: PROCESS OF DEVELOPING A WORK-UNIT ACTIVITY
ANALYSIS
Source: Noe et al., 2023, p. 159
5.3.1.1 Analysing work output
Module 2: Strategic Human Resources Management
109
WORKFLOW AND ORGANISATIONAL STRUCTURE
Every organisation aims to produce an output that can satisfy customers' needs. Noe
et al. (2021) state that identifying an output (service or product) or set of outputs is
insufficient. Organisations have to specify the standards for the quality and quantity of
these outputs. However, when organisations begin determining the number and nature
of the outputs, these decisions often become problematic, as the organisation needs
to decide how to process the inputs to generate outputs efficiently. The first step in
analysing work output involves deciding the number of products and services to offer.
Lessons learned from the “working from home’ case study: What must be
produced and to what standard? Remote patent examiners in the same study boosted
output when granted “work-from-anywhere” freedom, while software teams saw goal
attainment slip once face-to-face problem-solving vanished. Clarifying measurable
deliverables helps leaders judge which roles thrive with autonomy (suited to
decentralisation) and which rely on shared resources or rapid feedback (favouring
centralised hubs).
5.3.1.2 Analysing work processes
After the outputs of the work unit are identified, the HR function must examine the work
processes used to generate the outputs. Therefore, the HR department starts by
analysing the work processes, which refer to the activities that members of a work unit
have to do to produce the output. Every process consists of operating procedures that
specify how things are done at each product or service development stage. The tasks
are then broken down into activities that must be performed by individuals in the work
unit (Warnich et al., 2018).
Strategic work design and analysis use differentiation and integration to determine
who does what. Well-executed differentiation and integration of work help
organisations increase productivity and improve customer satisfaction. Stewart and
Brown (2009) state that when work is designed strategically, the employees' efforts
are coordinated to help the organisation achieve its competitive advantage.
To be productive is not the same for all organisations. For example, other
organisations may need speed and efficiency instead of innovation and creativity.
Stewart and Brown (2009) argue that the key to making a strategic work design is to
align the methods for assigning and coordinating tasks with the overall HR strategy.
110
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
The two aspects, autonomy and interdependence, must be considered when
analysing the work processes.
Autonomy refers to the extent to which an individual worker has the freedom to
determine how to complete the work. In contrast, interdependence is the extent to
which an employee's actions affect and are affected by the actions of others.
Lessons learned from the “working from home’ case study: The IT firm’s
productivity dip was traced to longer meetings and fragmented focus time. Mapping
each hand-off, decision point and feedback loop—via tools such as swim-lane
diagrams or value-stream maps—reveals where remote links add friction, where
technology can automate steps, and where a tight on-site cluster still adds value.
5.3.1.3 Analysing work inputs
The final phase in workflow analysis is to identify the inputs used in developing the
work unit's products or services. These inputs refer to operating resources, which allow
people to do their jobs, such as office equipment, raw materials, machinery, vehicles,
etc., and human resources, which refer to employees' efforts, skills, knowledge and
insights (Nieman & Bennett, 2014). Other inputs may include financial resources,
information and technology resources.
Noe et al. (2021) point out that organisations often try to increase efficiency through
lean production techniques to try and minimise the stockpile of inputs through "just in
time" (JIT) inventory control procedures. The advantages of the JIT inventory are: (1)
less space is needed. (2) there is a reduction in waste as there is a faster turnaround
of stock that prevents goods from becoming damaged, (3) the JIT inventory
management is also ideal for smaller companies that do not have funds available to
purchase extensive stock at once. All these advantages are cost-effective for the
company. However, the JIT inventory also comes with some potential disadvantages,
which may significantly impact the organisation.
The disadvantages of the JIT inventory procedure are that (1) the company may be
at risk of running out of stock, (2) there is a lack of control over the timeframe,
Module 2: Strategic Human Resources Management
111
WORKFLOW AND ORGANISATIONAL STRUCTURE
especially when organisations rely on suppliers to deliver the goods, (3) more planning
is required, especially when companies have, for example, seasonal sales periods.
However, if mange correctly, the JIT inventory management procedure can be seen
as one of the best ways of managing inventories. Although risks are involved, it is
ideal for organisations that can plan carefully in advance and have a strong
relationship with their suppliers.
Lessons learned from the “working from home’ case study: Effective hybrid
models depend on reliable broadband, secure cloud systems and employees who can
self-manage. The “Working from home’ case warns that without such inputs, hours
balloon and mentoring evaporates. A thorough input inventory identifies capability
gaps, equipment needs and supervisory capacity, guiding whether control should
remain centralised (for consistency and compliance) or decentralised (to tap into local
knowledge).
5.3.2 ORGANISATIONAL STRUCTURE
According to Noe et al. (2021), workflow design provides a longitudinal overview of
the dynamic relationships by which inputs are converted into outputs. In contrast,
organisational structures provide a cross-sectional overview of the constant
relationships between individuals and units that create the outputs. This includes the
different tasks to be completed, the various divisions and subdivisions, the different
levels of management, and the lines of authority with related responsibilities.
Nieman and Bennett (2014) define organisational structure as a formal working
relationship system that separates and integrates tasks. According to these authors,
separation clarifies who should do what and integration of tasks indicates how the
efforts should interact and interrelate. Thus, organisational structures are formed
when jobs are grouped into departments and departments are linked. The
organisation chart provides information about an organisation's structure.
An organisational structure helps employees work together by:
•
112
Assigning human and other resources to tasks.
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
•
Clarifying employees' responsibilities and identifying how their efforts should
align with their job description, organisation chart and lines of authority.
•
Informing employees what is expected of them through policies, procedures,
and performance standards.
•
Establishing procedures for collecting and evaluating information to assist
managers in making decisions and solving problems ((Hellriegel et al., 2008).
5.3.2.1 Elements of organisational structure
According to Hellriegel et al. (2022) an organisational structure includes the following
four basic elements:
•
Specialisation is identifying particular tasks and assigning them to individuals
or teams who have been trained to do the tasks. The essence of specialisation
is that an entire job is not completed by one person but broken down into
several smaller tasks to be completed by various people.
•
Standardisation refers to the uniform and consistent procedures employees
must follow to do their work successfully. Standardised procedures allow
managers
to
measure
employees'
performance
against
established
performance criteria.
•
Coordination refers to the formal and informal procedures that integrate the
activities that separate individuals, teams, and departments in an organisation.
In less structured organisations, coordination requires managerial sensitivity to
countrywide problems, willingness to share responsibility and effective
interpersonal communication, whereas in bureaucratic organisations, policies
and procedures ensure coordination.
•
Authority refers to the ability to make decisions. In centralised organisations,
top management makes decisions, which are communicated to lower-level
management. In decentralised organisations, decision-making authority is
given to lower-level management and employees working in teams.
Organisations can combine these two approaches, for example, by centralising
the accounting and purchasing functions but decentralising the marketing and
human resource functions.
Module 2: Strategic Human Resources Management
113
WORKFLOW AND ORGANISATIONAL STRUCTURE
5.3.2.2 Dimensions of structure
The two most significant dimensions of organisational structure are centralisation
and departmentalisation.
Centralisation “refers to the degree to which decision-making authority resides at the
top of the organisational chart as opposed to being distributed throughout lower levels
(in which case authority is decentralised)” (Noe et al., 2023, p. 163).
Departmentalisation refers to the degree to which work units are grouped based on
functional similarity or similarity of workflow (Noe et al., 2023).
How to remember the difference:
•
Centralisation affects the vertical dimension of structure (authority
distribution).
•
Departmentalisation affects the horizontal dimension (grouping of tasks &
resources).
For example, decisions are primarily centralised in bureaucratic organisations with
solid hierarchical structures. Top management makes all the decisions, and lowerlevel managers and employees are responsible for carrying out top management's
directives. Therefore, centralisation of authority is the concentration of decisionmaking at the top of an organisation with little delegation to middle and lower
managers. A centralised structure thus keeps decision-making at the top of the
hierarchy.
The advantages of centralisation are that:
•
Common policies and practices are easier to implement for the whole
organisation.
•
Other parts of the business are prevented from becoming too independent.
•
Quicker decision-making because top management is making all the decisions.
•
There is a clear chain of command.
The disadvantages of centralisation are that:
•
114
Leadership in organisations are more bureaucratic.
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
•
Remote controls because managers are under tremendous pressure to
formulate decisions for the organisation but may lack control over the
implementation process.
•
Work delays occur as employees rely on the information communicated to them
from the top.
•
Low employee loyalty.
Decentralisation refers to the degree to which decision-making authority is distributed
throughout lower levels (Noe et al., 2015). It is an approach that requires managers to
decide what and when to delegate, to select and train employees and when to
formulate adequate control systems.
The decision-making in decentralisation is spread out to include more managers and
employees in the hierarchy. Thus, decentralising authority allows an organisation and
its employees to operate flexibly even as it grows. Additionally, decentralisation allows
managers to empower employees by creating self-managed work teams, establishing
cross-functional teams, or even moving to a product team structure. For example,
decision-making is left to managers closest to the action in decentralised
organisations.
Hellriegel et al. (2008) identify the following advantages of decentralisation:
•
It allows top management time to concentrate on more important issues, such
as developing organisational plans and strategies, while lower-level managers
and employees focus on day-to-day decision-making.
This also leads to
increased employee morale, thus resulting in higher productivity.
•
It develops the self-management competencies of lower-level managers and
prepares them for positions requiring greater judgment and increased
responsibility.
•
As lower-level managers are often closer to the action, they are in a better
position to make judgements based on evidence in the context of the bigger
picture.
Module 2: Strategic Human Resources Management
115
WORKFLOW AND ORGANISATIONAL STRUCTURE
Jones and George (2014) state that a disadvantage of decentralising authority is that
if divisions, functions, or teams are given too much decision-making authority, they
may begin to pursue their own goals at the expense of organisational goals.
In conclusion, centralisation and decentralisation of authority are basic management
philosophies of delegation. Where decisions are made and refer to the vertical
distribution of power associated with the vertical division of labour (Hellriegel et al.,
2008)
Departmentalisation refers to the degree to which work units are grouped based on
functional or workflow similarity (Noe et al., 2015).
According to Hellriegel et al. (2008), the following six factors affect management's
decision to centralise or decentralise:
•
The cost is attached to the decision. This is often the most significant factor
to consider when it comes to decentralisation. As a general rule, the costlier it
becomes for an organisation, the more likely it is that top management will
make the decisions.
•
Uniformity of policy. Often, managers who value consistency value
centralisation of authority.
•
Organisational culture. In organisations where the management style is
autocratic, decision-making is mostly centralised, whereas in organisations with
a participatory management style, decentralised decision-making and authority
may be preferred.
•
Availability of managers. Competent managers are an absolute necessity for
decentralisation. Practical experience is the best training for developing
management potential. Therefore, top management must be willing to allow
lower-level managers to make mistakes and learn from them.
•
Control mechanisms. The establishment of effective control processes is a
prerequisite for effective delegation.
•
Environmental influences. The external environmental factors affect the
degree
of
decentralisation.
For
example,
decentralisation
influences
unionisation, labour laws, bargaining council agreements, etc.
116
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
5.3.2.3 Structural configurations
There are various ways to combine centralisation and departmentalisation. However,
Noe et al. (2023) identify two common configurations, namely functional structure
and divisional structure.
A functional structure utilises a functional departmentalisation plan with relatively
high
levels
of
centralisation.
Hellriegel
et
al.
(2008)
define
functional
departmentalisation as creating departments by grouping employees according to
their areas of expertise and the resources they draw on to perform a common set of
tasks.
High levels of centralisation are often associated with functional departmentalisation
because individual units are so specialised, and members have limited knowledge of
the overall organisation's mission. Thus, functional (production, marketing, human
resource, finance, etc.) managers tend to only identify with their department's needs
and cannot always be relied on to make decisions in the organisation's best interest.
Divisional structures combine a divisional departmentalisation plan with relatively
low levels of centralisation. These units are almost self-sufficient and self-autonomous
organisations because the structures tend to be more flexible and innovative. Noe et
al. (2021) state that regardless of how subunits are formed, many organisations aim
to keep the size of subunits small enough to ensure people feel connected and can
make a difference.
A major advantage of divisional structures is that management can detect and utilise
opportunities in their respective consumer base faster than management can in more
centralised, functionally structured organisations. Furthermore, people in larger
subunits often experience reduced feelings of individual accountability and motivation,
which causes performance challenges (Noe et al., 2023). Thus, subunits should be
limited to a specific size.
5.3.2.4 Structure and nature of jobs
Module 2: Strategic Human Resources Management
117
WORKFLOW AND ORGANISATIONAL STRUCTURE
Noe et al. (2023) state that the type of organisational structure also has implications
for the design of jobs. Jobs in functional structures need to be narrow and highly
specialised. Employees and middle managers in functional structures often have little
authority for decision-making or responsibility for managing coordination between
themselves and others. An organisation structure also has implications for the people
appointed to functional or divisional jobs. For example, managers of divisional
structures (e.g. the vice president of the Europe division) need to be more experienced
or have high cognitive ability relative to managers in functional structures (e.g. the vice
president of marketing).
5.3.2.5 Selecting an organisational structure
No specific type of departmentalisation (functional, place, product, or consumer) is
best in all circumstances. Managers must select the organisational structure that
matches the organisation's specific needs.
Nel et al. (2012) identify five structural configurations:
•
The simple structure
•
Machine bureaucracy
•
Professional bureaucracy
•
Divisional form
•
Adhocracy.
5.3.2.5.1 The simple structure
This is an organisational structure with little technical and support staff. Furthermore,
there are minimal formalisation and strong centralisation of decision-making.
For example, two lawyers (partners) supervise interns.
5.3.2.5.2 Machine bureaucracy
This organisational structure was originally formulated by Max Weber, a German
sociologist, who believed bureaucracy was the best way to organise work.
118
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
According to Weber's approach:
•
Each position has fixed official duties
•
Impersonal rules and regulations govern conduct
•
Efforts are coordinated through a hierarchy of levels of authority
•
Order and reliability are maintained
•
Employment is a full-time occupation for members of the organisation.
•
Appointment to an office is made by supervisors.
•
Promotion is based on merit (Nel et al., 2012).
5.3.2.5.3 Professional bureaucracy
The operating core of people in the organisation is professionals. According to Nel et
al. (2012), coordination is achieved through standardising the professionals' skills. In
addition, technical and support staff serve the professionals, for example, doctors at
hospitals and professors at universities.
5.3.2.5.4 Divisional form
According to Nel et al. (2012), divisional form is a loosely coupled, composite structural
configuration comprised of divisions, each having its structural configuration. For
example, a life assurance organisation with its group scheme and life policy divisions
has a predominantly machine bureaucratic structure. In contrast, the brokerage
division might display a predominantly professional bureaucratic structure.
5.3.2.5.5 Adhocracy
This organisation structure refers to highly open and decentralised organisations with
minimal formalisation and order. Thus, adhocracy emphasises individual initiative and
self-organisation to accomplish tasks. This structure is in contrast to bureaucracy
which relies on a set of defined rules and hierarchy to accomplish organisational goals
and tasks. According to Nel et al. (2012), adhocracy is designed to interconnect
interdisciplinary experts into a smooth, functioning ad hoc project team. For example,
most project and matrix organisations prefer an adhocracy structure.
Module 2: Strategic Human Resources Management
119
JOB ANALYSIS
Table 5.1 lists the characteristics of mechanistic organisations compared to organic
organisations.
TABLE 5.2: THE CHARACTERISTICS OF MECHANISTIC AND ORGANIC
ORGANISATIONS
MECHANISTIC
ORGANIC
ORGANISATION
ORGANISATION
Authority
Centralised in a few
top people
Decentralised, diffused
throughout the
organisation
Specialisation
Many specialists
Many generalists
Task definition and knowledge
Narrow, technical
Broad, general
Task flexibility
Rigid, routine
Flexible, varies
Degree of hierarchical control
High
Low
Primary decision-making style
Authoritarian
Democratic, participative
Primary communication pattern
Top-down
Lateral
Formal rules
Rigid rules
Considerable flexibility
Specification of techniques,
obligations, and rights
Specific
General
Emphasis on obedience and loyalty
High
Low
CHARACTERISTIC
Source: Nel et al., 2012
The reasons for departmentalisation are the advantages of specialisation and the
pressure in a growing organisation to divide the total management task into smaller
units that are easier to manage. Departmentalisation, therefore, addresses two of the
basic elements of organisational structure, namely specialisation and standardisation.
The key to effective departmentalisation lies in organising people and activities to ease
the organisation's decision-making flow.
5.4
120
JOB ANALYSIS
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
Job analysis refers to “the process of getting detailed information about jobs” (Noe et
al., 2023, p. 171)
The job analysis process is the starting point for good human resource practices. Job
analysis is the process by which management methodically collects information about
work tasks, duties and responsibilities within an organisation (Stewart & Brown, 2009;
Warnich et al., 2018). Additionally, the process includes investigating the level of
decision-making by employees within a job category, the skills required to do the job
adequately, the autonomy of the job and the mental efforts required. The tool and
equipment needed to perform the tasks and the conditions under which the tasks must
be performed must be included in the job analysis. Job analysis data can be obtained
from interviews, structured questionnaires, direct observation, diaries or logs, or a
combination of all four methods. Therefore, job analysis is important because it
clarifies what is expected from employees. According to Wärnich et al. (2022), job
analysis is also known as a job review or classification.
The end product of a job analysis is a written description and explanation of the actual
requirements of the job, referred to as job descriptions and specifications.
Strategic job analysis is needed to avoid conducting job analysis too often on one
particular job. During strategic analysis, experts brainstorm by making predictions
about the issues that could be experienced in a job, the problems within the
organisation that affect the job, and the impact of the environment on the job in the
future (Nel et al., 2012).
5.4.1 THE IMPORTANCE OF JOB ANALYSIS IN STRATEGIC HRM
According to Wärnich et al. (2022), organisational changes, such as restructuring or
downsizing, rely on job analysis. As a result, HR professionals often have to change
exciting job descriptions to reflect new realities in the business environment.
Wärnich et al. (2022, p. 170) identify the following new realities:
•
Organisations considering downsizing must reconsider ‘who does what, where
and with what’.
Module 2: Strategic Human Resources Management
121
JOB ANALYSIS
•
The need to motivate and reward employees based on their knowledge and
traditional job objectives.
•
The impact of information technology on jobs throughout the organisation.
•
Labour legislation impacting employment equity and general discriminatory
practices.
•
The implementation of work teams. A team usually make use of a greater depth
and breadth of skills than the skills required from traditional jobs.
Table 5.3 puts theory into practice by looking at South African organisations that
needed to overhaul their existing job descriptions to reflect the new realities as
described by (Warnich et al., 2022).
TABLE 5.3: HOW TODAY'S SOUTH AFRICAN ORGANISATIONS FORCE HR
TO RETHINK JOB ANALYSIS
New
reality Concrete
from
Warnich examples
2023-2025 What HR had to do to the job
descriptions and specifications
et al. (2022)
Downsizing and In
2023,
SA • Re-map core vs. surplus work and
Telkom
“who does what, began shedding ±1,700
delete legacy tasks (e.g., copper-
where and with positions (approximately
line jointing).
15 % of its payroll) as it • Create multi-skilled “field fibre
what”
technician” roles that cover splicing,
pivots from copper lines to
fibre-
and
services. Plants, call-outs
and support offices are
being
wireless CPE install and digital
mobile-led
consolidated
or
customer‐care logging.
•
Re-locate roles to regional fibre
hubs; update work context section
(tools, locations, hazards).
closed. (Gilbert, 2023)
Motivating
and The
Association
descriptors with competency
knowledge (SARA) reports a shift
matrices (beginner → expert).
rewarding based Reward
on
African • Replace “Grade C clerical”
South
(skill-
or from term bonuses to • Add knowledge levels (e.g., SQL
contribution-
reward
based pay)
“recognise
skills,
innovation
and
122
systems
that
intermediate, IFRS-17 proficiency)
to the qualification section so HR
can price jobs by skill depth.
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
New
reality Concrete
from
Warnich examples
2023-2025 What HR had to do to the job
descriptions and specifications
et al. (2022)
contributions rather than • Insert “peer-recognition
time served,” urging firms
contribution” into performance
to
standards.
blend
intrinsic
and
extrinsic rewards. (South
African
Reward
Association
(SARA),
2025)
Impact
of Shoprite
Group’s
2024 • Split the old “Cashier” profile into
information
rollout of a cloud-based
“Customer Service Associate”
technology
Point-of-sale
(front-of-house skills + digital UI)
across
(POS)
and “Scan-Assist Specialist”
the platform to 2,450 stores
organisation
(troubleshoot POS, manage digital
automated refunds, cashups
and
real-time
analytics, while training
approximately
40,000
employees and
adding
price updates).
•
Add data accuracy, basic
networking and cyber-hygiene
KSAs.
•
130 temporary IT roles.
Embed hybrid work context (store &
support-centre dashboard
monitoring).
Labour
The Employment Equity • Insert essential and non-essential
legislation:
Amendment Act (effective
requirements to separate inherent
Employment
1
compels
job needs from historic “nice-to-
Equity and non- designated employers to
haves” that exclude groups (e.g.,
discrimination
Jan
2025)
rewrite “code 08 licence mandatory”
draft 5-year plans that
meet
sectoral
diversity
targets or face fines up to
10
%
of
if role is office-based).
•
criteria and note reasonable
turnover.
(McKenzie, 2025)
Add competency‐based selection
accommodation fields.
•
Tag every Job Description with EE
occupational-level codes to enable
annual EE reporting.
Module 2: Strategic Human Resources Management
123
JOB ANALYSIS
New
reality Concrete
from
Warnich examples
2023-2025 What HR had to do to the job
descriptions and specifications
et al. (2022)
Implementation
Standard Bank scaled • Convert narrow “Business Analyst /
of work teams SAFe® agile across IT;
Tester / Developer” specs into T-
requiring
replaced
shaped “Software Engineer (Team)”
broader
skill individual KPIs, and staff
roles listing primary and secondary
breadth
and were re-skilled into cross-
depth
team
awards
functional feature teams
that
deploy
•
Add collaborative behaviours, sprint
planning and continuous-delivery
monthly
instead of yearly. (Keyter,
2025)
skills.
accountabilities.
•
Define rotating team duties (scrum
facilitation, DevOps pipeline
ownership) in the key tasks section.
Source: Author’s compilation from sources cited in table
We can see from the ‘theory to practice’ examples that job analysis involves a
comprehensive understanding to optimise the job. Noe et al. (2021) state that job
analysis is the building block of everything HR managers must do. For example,
selection, performance appraisal, training and development, job evaluation, career
planning, work redesign and human resource planning depend on a thorough job
analysis process. Moreover, our discussion highlights that job analysis is more than a
technical description of tasks; it is a living process shaped by several dynamic forces.
Organisational strategy and structure determine which duties are critical and how
authority flows, while technological advances continuously redefine the tools, skills
and data requirements embedded in each role. External factors, such as labourmarket trends, employment-equity legislation and industry regulations, influence the
qualifications and compliance elements that must appear in a job profile. Internal
cultural drivers, including the use of cross-functional teams or agile work methods,
expand the breadth of competencies a position demands. Finally, economic pressures
(e.g., downsizing or growth phases) and workforce demographics affect whether a job
is designed narrowly for efficiency or broadly for enrichment and retention. Because
these factors evolve, HR professionals rely on an up-to-date job analysis as the
foundation for every major people-management activity from selection to performance
124
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
appraisal, training and development, job evaluation, career planning, work redesign
and human-resource planning.
5.4.1.1 Work Redesign
Work redesign means reshaping what gets done, how it is done and who does it. A
thorough job analysis supplies the raw data, tasks, skills, equipment and workflow
links, so managers can rebuild roles without breaking the overall process.
Practical example: When Shoprite introduced self-checkout kiosks, the traditional
‘cashier’ position was redesigned into a broader ‘Customer Service Host’. The new job
description now includes guiding customers through the kiosk, troubleshooting
scanner errors, and monitoring shrinkage; all additions identified by analysing the
original cashier tasks and the new technology requirements.
5.4.1.2 Human Resource Planning
Strategic HR planning forecasts the number and type of people the organisation will
need (discussed in Chapter 3:. Accurate forecasts hinge on knowing the detailed skills,
knowledge and behaviours each future role demands (information found in current job
analyses).
Practical example: As Sasol accelerates its green-chemicals strategy, HR planners
used updated job analyses to quantify how many process engineers must have
carbon-capture expertise versus legacy coal-gasification know-how, allowing them to
budget for recruitment and retraining three years ahead.
5.4.1.3 Selection
Selection tools such as CV screening, tests, and interviews should target only those
competencies that truly predict success in the job. Job analysis translates day-to-day
tasks into measurable selection criteria.
Practical example: After Standard Bank adopted agile delivery squads, a fresh
analysis of the ‘Software Engineer’ role revealed that collaboration and ‘story-point’
estimation skills mattered as much as coding ability. The bank added behavioural
interview items and a pair-programming simulation to its selection criteria to capture
these newly defined requirements.
Module 2: Strategic Human Resources Management
125
JOB ANALYSIS
5.4.1.4 Training and Development
Training closes the gap between a newcomer’s current abilities and the performance
standards uncovered by job analysis. It also highlights which skills will soon become
obsolete.
Practical example: Eskom’s renewable-energy build programme showed, through
job analysis, that many legacy turbine artisans lacked high-voltage DC safety
knowledge. The learning team created a targeted ‘HVDC boot camp’, minimising
generic electrical theory and focusing on the precise tasks, tools and hazards
documented in the new role profile.
5.4.1.5 Performance Appraisal
Performance appraisals should rate employees on behaviours and results that the job
truly requires; nothing more, nothing less. Job analysis lists those behaviours and sets
realistic performance indicators.
Practical example: Telkom rewrote its field-technician appraisal after job analysis
revealed that first-time-fix rate and digital customer-survey scores matter more than
simple call-out volume. The new scorecard tracks these two metrics, linking bonuses
directly to demonstrable service quality.
5.4.1.6 Career Planning
Career planning aligns an employee’s ambitions with pathways within the
organisation. Accurate pathways depend on knowing the competency ladder between
lower- and higher-level jobs, as documented in job analyses.
Practical example: The South African Revenue Service mapped a ‘Tax Officer ➜
Senior Assessor ➜ Audit Specialist’ ladder. By overlaying each job’s analysed
competencies, HR could show junior staff exactly which tax-law modules, IT
certifications and behavioural proficiencies they must acquire to qualify for promotion.
5.4.1.7 Job Evaluation
Job evaluation ranks roles to build fair pay structures. The ranking is valid only when
the content, complexity and impact of each job have been captured correctly via job
analysis.
126
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
Practical example: A Johannesburg hospital found its Pharmacy Clerk and Theatre
Sterile-Services Clerk were paid the same, yet analysis showed the latter handles
infection-control risks and costly surgical instruments. Using that evidence, HR
regraded the Theatre Sterile-Services Clerk’s job to be one band higher, improving
internal equity and retention in a critical area.
Key takeaway: Each HR activity, whether redesigning work or deciding pay, depends
on the same foundation: a detailed, up-to-date job analysis that mirrors the
organisation’s current reality.
5.4.2 JOB ANALYSIS INFORMATION
Two types of information are most useful in job analysis: job description and job
specification. According to Noe et al. (2023), a job description refers to a list of job
tasks, duties, and responsibilities (TDRs) that are observable actions. In contrast, a
job specification refers to a list of the knowledge, skills, abilities, and other
characteristics (KSAOs) needed to perform the job. According to the authors, KSAOs
are characteristics about people that are not directly observable; they can only be
verified when individuals carry out the tasks, duties and responsibilities (TDRs) of a
job.
5.4.3 JOB ANALYSIS METHODS
A job analysis approach can be divided into the job-oriented approach and the workeroriented approach. The job-oriented approach directs the HR manager's attention to
specific tasks and outcomes, or the level of productivity required to complete the job
successfully. The person-oriented approach focuses on employee behaviour,
particularly the skills, abilities and traits needed to perform the job successfully. (Noe
et al., 2023)
5.4.3.1 Job-orientated methods of data collection
The following general methods of data collection can be followed with the job (also
called task-orientated) approach (Byars et al., 2016; Nel et al., 2021; Noe et al., 2023;
Warnich et al., 2022)
Module 2: Strategic Human Resources Management
127
JOB ANALYSIS
•
Questionnaires are the least time-consuming and cost-effective method to use
once the initial questionnaire has been compiled. The questionnaire aims to
gather information about jobs in the organisation, which sometimes requires
follow-up interviews. A major advantage of questionnaires is that a computer
can calculate the scores on the questionnaire and create a printout which
summarises the job's characteristics. However, constructing the questionnaire
demands thoughtful planning and may require numerous revisions to ensure
that accurate information is gathered.
•
Interviews are held at a job site to collect information by conducting a
structured, semi-structured or unstructured interview. A structured interview
includes a planned list of questions and is also known as a standardised or
formal interview. In a semi-structured interview, only a few predetermined
questions are asked, while the rest of the questions are probing questions (not
planned). Unstructured interviews have no checklist or pre-planned list of
questions; the format develops as the interview unfolds. Interviews are
particularly valuable when the primary purpose of the job analysis is to design
performance appraisal standards, identify training needs and determine the
job's worth.
•
Direct observation is a method of analysing jobs that is relatively
straightforward. During this process, the analyst observes the individual
performing the job and makes notes to describe the work. This includes
information about what was done, how it was done, how long it took, and a
description of the workplace environment and the equipment used. A major
disadvantage of site observation is that it can only be used in easily discernible
or measurable jobs. For example, an analyst would not learn much from
observing an accountant manipulating figures on a computer programme.
•
Systematic activity logs are also known as job-holder diaries. This method of
data collection requires new job holders to keep a diary of the content and
frequency of tasks completed during an entire work cycle. Diaries' advantages
include: (1) cost-effectiveness, (2) comprehensiveness regarding the duties
and time spent on each duty, and (3) the personal gratification employees
receive from participating in the process. However, this is, unfortunately, also
the least reliable and subjective data collection method, as new employees
128
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
often exaggerate the importance of their jobs by adding more tasks and
responsibilities to receive satisfactory performance appraisals.
•
Checklists are similar to questionnaires, but the response sheet contains fewer
subjective conclusions and tends to be either ‘yes’ or ‘no’
•
Technical conference methods use supervisors with extensive knowledge of
the job to compile details about the job.
5.4.3.2 Worker-orientated methods of data collection
According to Nel et al. (2021) worker-oriented job analysis tends to be more subjective
because it considers employees’ behaviour, skills and abilities. Therefore, some of
these methods require specialised training to apply and interpret the data.
The following specific methods of data collection can be followed through the workerorientated approach (Byars et al., 2016; Nel et al., 2021; Noe et al., 2023; Warnich et
al., 2022)
•
Critical Incident Technique (CIT) is based on identifying those incidents or
behaviours needed to complete a job successfully. Subject Matter Experts
(SMEs) are responsible for identifying the behaviours that differentiate good
and poor performers. SMEs generate several statements describing
behaviours they consider particularly helpful for accomplishing work, such as
self-confidence, self-control, responsibility, fairness, etc. Each statement
includes a description of the situation and the actions determining whether the
outcomes are desirable or undesirable. Statements are then analysed to
determine common themes.
•
Position Analysis Questionnaire (PAQ) is a highly specialised job analysis
instrument to assess the work behaviours required for a job. This questionnaire
does not collect information about the tasks and duties of the job but rather
about the characteristics required to do the job well. PAQs use six major
categories to describe employee activities or the work environment (Stewart &
Brown, 2009). A total of 194 descriptors (referred to as job elements) fall into
27 job dimensions, which are further grouped into six general job categories:
information input, mental processes, work output, relationships, work situations
Module 2: Strategic Human Resources Management
129
JOB DESIGN
and job context and other job characteristics. By using a five-point scale, each
description can be analysed for the degree to which it applies to the job. The
major advantage of PAQs is that it can be used to analyse almost any type of
job.
•
Functional Job Analysis (FJA) is commonly used to describe the nature of
jobs and compile job descriptions and specifications. Jobs are analysed in three
work domains, namely data (such as working information; requires drawing on
mental resources), people (such as communication; requires drawing on
interpersonal resources) and things (such as working with machines; requires
drawing on physical resources.
•
Management Position Description Questionnaire (MPDQ) is used to
analyse management positions.
The questionnaire consists of 208 items
grouped into fifteen sections to reduce the time required to complete and help
interpret responses. However, according to Nel et al. (2012), the MPDQ
analysis of managerial jobs presents significant challenges because of
inequality between positions, different levels in the organisational hierarchy,
and the type of industry in which the jobs are positioned.
5.5
JOB DESIGN
Job design is “the process of defining how work will be performed and the tasks that
will be required in a given job” (Noe et al., 2023, p. 180). Job redesign refers to
“changing the tasks or the way work is performed in an existing job” (p.180). Wärnich
et al. (2022, p. 153) expand on the definition of job design by stating “it is the
manipulation of job content, functions and relationships in a way that both
accomplishes organisational goals and satisfies the personal needs of individual job
holders”.
Four basic approaches, namely mechanistic-, motivational-, biological and
perceptual-motor approaches, are identified among the various disciplines (such as
psychology, management, engineering and ergonomics) to deal with design issues
(Noe et al., 2023).
130
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
According to Byars et al. (2016) and Noe et al. (2023) all jobs can be characterised in
terms of how they align with each approach; thus, managers need to understand
the trade-offs of emphasising one approach over another.
Table 5.4 illustrates how jobs are characterised according to each of the four
approaches of job design.
TABLE 5.4: MAJOR ELEMENTS OF VARIOUS APPROACHES TO JOB
DESIGN
THE MECHANISTIC
APPROACH
THE MOTIVATIONAL
APPROACH
THE BIOLOGICAL
APPROACH
•
•
•
Job specialisation
•
Skills variety
•
Work method
•
Task significance
•
Ergonomics
autonomy
•
Interdependence
•
Work
Decision-making
autonomy
THE
PERCEPTUALMOTOR
APPROACH
Physical
•
Job complexity
demands
•
Information
processing
•
Equipment use
conditions
Source: compiled from Byars et al., 2016 and Noe et al. 2023
5.5.1 MECHANISTIC APPROACH
The mechanistic approach has been severely influenced by the principles of the
scientific management approach, which believed that mental and manual work should
be separated (Grobler et al., 2022).
In this approach, engineers apply concepts from science and mathematics to design
jobs around the concept of specialisation, skill simplification, and repetition (Stewart &
Brown, 2009). Industrial engineers approach the job design process from the view of
creating an efficient machine that transforms labour inputs into goods and services.
Engineers use the principles of scientific management to create jobs that effectively
eliminate wasted effort to produce goods and services. Job designers focus on work
methods that take the least time to perform the task.
According to Stewart and Brown (2009), the mechanistic approach aims to simplify
work tasks as much as possible to be able to train anyone quickly and inexpensively.
Module 2: Strategic Human Resources Management
131
JOB DESIGN
Tasks are automated, and each job is highly specialised. Employees focus on
completing one task at a time, and a small set of tasks is completed over and over.
Management clearly specifies work performance requirements, leaving little scope for
employees to make decisions related to their work; their tasks are simplified, repetitive,
and require little skill and discretion (Grobler et al., 2022). Thus, this approach tends
to reduce worker autonomy and create sequential processing with an emphasis on
monitoring the activities of managers or supervisors, centralising authority and
decision-making. Many jobs structured this way are performed in developing countries
where low-skilled and inexpensive labour is abundant (Noe et al., 2015).
According to Wärnich et al. (2022), over-specialisation hampers what employees can
do in several ways, such as:
•
Repetition can lead to boredom.
•
Mechanical pacing because employees are restricted by the assembly line and
its fast pace.
•
No visualisation of the end product because employees are only responsible
for one aspect of the product.
•
Little social interaction because the assembly line requires constant attention.
•
Job dimensions (job scope and job depth).
Thus, the more specialised a job becomes, the less likely it will motivate an employee.
5.5.2 MOTIVATIONAL APPROACH
Work design can also be approached from the perspective of psychologists. Instead
of seeking to build a machine, psychologists study human minds and behaviour in
human resource management. This is known as organisational or industrial
psychology, which emphasises the design of work to fulfil the needs of employees.
The motivation approach has the following advantages: (Wärnich et al., 2022),
132
•
Less absenteeism.
•
Higher productivity of challenged employees.
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
•
Lower employee turnover.
•
Higher product quality.
•
More innovative ideas.
•
Greater employee job satisfaction and engagement.
According to Noe et al. (2023) the motivational approach aims to increase employees'
enjoyment of their work and thus increase their effort and engagement in work
activities. Additionally, the motivational approach places emphasis on designing jobs
that are complex and challenging to create meaningfulness.
A popular model of motivational job design is the job characteristic model, which
focuses on building intrinsic motivation. According to the job characteristic model,
people are intrinsically motivated when they perceive their work to have the following
characteristics (Stewart & Brown, 2009):
•
Meaningfulness.
•
Responsibility.
•
Knowledge of the results.
According to Stewart and Brown (2009), designing work around motivational principles
increases employee satisfaction and enables organisations to retain quality
employees. Furthermore, according to the authors, providing employees with high
levels of autonomy enables organisations to benefit from a differentiation strategy by
employing highly educated and trained employees who often know more than their
managers.
5.5.3 THE BIOGRAPHICAL APPROACH
The biographical approach to job design is mainly derived from the sciences of
biomechanics (i.e. the study of body movements), work physiology and occupational
medicine (Noe et al., 2023). According to Stewart and Brown (2009), people with
biology and physiology backgrounds provide work design inputs. These specialists
focus on employees' health and physical functioning and have a particular interest in
Module 2: Strategic Human Resources Management
133
JOB DESIGN
ergonomics, which investigates the physical stresses and demands placed on
employees.
Ergonomics refers to designing work tasks that focus on correct posture and
movement to prevent physical injury (Stewart & Brown, 2009). Ergonomics also
examines the interface between individuals' physiological characteristics and the
physical work environment to structure the work environment around how the human
body works.
The main aim of the biological approach is to eliminate discomfort and injury. Work is
designed to reduce fatigue by incorporating breaks and opportunities to switch tasks.
Short-term gains in efficiency are sometimes sacrificed to prevent employee
discomfort or injury.
5.5.4 PERCEPTUAL-MOTOR APPROACH
The perceptual-motor approach focuses on human mental capabilities and limitations
According to Stewart and Brown (2009), some psychologists prefer taking a perceptual
approach to job design as the approach attempts to improve reliability, safety and user
reaction. In this process, job designers group tasks together to enable employees to
process information better. For example, written material and instructions are
redesigned to be easily understood and interpreted. In addition, the amount of
information to remember and the complexity of problem-solving are considered in the
job design. Thus, jobs are characterised by low autonomy and sequential processing.
The perceptual-motor and biological approaches have their roots in human factors
engineering. Their aim is the integration of human and machine systems. Therefore,
they emphasise equipment design and the proper match to operators to prevent
accidents and increase health and safety.
Table 5.5 provides six well-known cases that illustrate how firms deliberately lean on
different job-design philosophies. The cases are grouped by the four classic
approaches to job design, namely mechanical, motivational, biographical and
perceptual-motor. The table explains what each company actually changed and why
it fits the theory.
134
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
TABLE 5.5: PUTTING THEORY TO PRACTICE
Job design approach
Company Example
Evidence of the design
in action
Mechanical
(focus
efficiency
and
on McDonald’s
Speedee The McDonald brothers
task Service System
created an assembly-line
simplification)
kitchen where each of the
12
crew
members
repeated a single, timed
task, a textbook example
of scientific management
(Klein, 2025).
Amazon
Fulfilment Hand-held scanners and
Centres
algorithms
track
every
pick, and the system even
records “time off task,”
automatically warning or
dismissing workers who
fall behind, showing an
extreme
form
of
task
specialisation and control.
Robots are even used to
monitor
and
supervise
employees.(Lecher, 2019)
Motivational
(increase Google’s
autonomy, skill variety and Time’
purpose)
‘20
Percent Engineers
policy
employees
to
devote
allows one workday a week to
dedicate self-chosen projects such
20% of their work time to as
projects
may
they
passionate about.
Gmail
are News,
autonomy
and
Google
increasing
and
task
identity. (Sekar, 2024)
W. L. Gore & Associates Employees work in self(one
of
Module 2: Strategic Human Resources Management
Fortune managed teams with no
135
JOB DESIGN
Job design approach
Company Example
Evidence of the design
in action
Magazine’s
top
100 formal
bosses,
Companies to work for), across
lattice structure
moving
projects
and
choosing
leaders
organically,
which
maximises autonomy and
broad
skill
application.
(Kirkpatrick, 2023)
Perceptual-motor
Toyota
final-assembly Visual cues such as takt-
(reduce mental overload lines
time boards, kanban cards
and error)
and the bright Andon cord
let any worker signal a
problem instantly, easing
cognitive
strain
and
preventing
defects.
(Andon
in
Cord
Manufacturing:
Lean
Toyota
Production System, 2024)
Boeing, augmented-reality Technicians
wiring
wear
Augmented Reality (AR)
Google
glasses
that
overlay
3-D
wiring
diagrams on the fuselage,
cutting errors almost to
zero and trimming build
time by a quarter, a classic
mental
load
reduction.
(Down to the Wire: How
Boing
Uses
AR
in
Assembly, 2021)
Biological
physical
fatigue)
136
(minimises Ford
strain
Motor
Company, Workers
and EksoVest Exoskeleton
performing
overhead assembly now
wear
upper-body
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
Job design approach
Company Example
Evidence of the design
in action
EksoVests that support
five to fifteen pounds per
arm,
lowering
fatigue
and
(Ford
shoulder
injury risk
Rolls
Exoskeleton
out
Wearable
Technology Globally
Help
Lessen
to
Worker
Fatique, Injury, 2018)
Herman
Miller,
Aeron The chair’s 8Z Pellicle
chair
suspension
and
adjustable
PostureFit
lumbar support distribute
weight evenly and keep
the spine in a healthy
posture,
preventing
musculoskeletal problems
during desk work (Aeron
Chair, 2025)
Source: Author’s compilation from sources cited in table
All jobs can be characterized in terms of how they fare according to each approach.
Therefore, managers need to understand the trade-offs of emphasizing one approach
over the other (Noe et al., 2023).
Module 2: Strategic Human Resources Management
137
SUMMARY
TABLE
5.6:
UNDERSTANDING
THE
TRADE-OFFS
Why it matters
How
BETWEEN
THE
APPROACHES
Tension
organisations
balance it
Efficiency
vs Mechanistic
engagement
designs Mix
task
clusters
speed output but deplete (specialised
yet
morale;
motivational meaningful) or use job
designs flip the equation.
rotation
so
employees
alternate between highfocus mechanistic tasks
and
enriched
problem-
solving work.
Comfort vs cost
Biological upgrades cut Phase-in
ergonomic
absenteeism but require investments where injury
capital.
costs are highest; pair with
wellness programmes to
amplify ROI.
Safety vs stimulation
Perceptual-motor designs Build in short ‘challenge’
slash errors but can dull tasks, simulation games
the job.
or
that
stretch
keep
assignments
cognitive
stimulation high without
overloading operators.
Source: Author’s compilation
5.6
SUMMARY
In this final chapter of Module 2, we explored how strategic intent is translated into
day-to-day reality through workflow analysis, job analysis and thoughtful work design.
A clear picture of every role, its purpose, tasks, required knowledge and working
conditions forms the foundation for staffing, performance management and legal
compliance. Just as important, that detail reveals overlaps, gaps and bottlenecks so
leaders can reshape work to deliver on cost, quality, speed or innovation targets
without losing sight of employee well-being.
138
© Business Management Training College (Pty) Ltd
THE ANALYSIS AND DESIGN OF WORK
The chapter also showed that no single design philosophy (mechanistic efficiency,
motivational enrichment, biological ergonomics or perceptual-motor safety) succeeds
on all fronts. Effective managers blend these approaches, tailoring jobs that meet
strategic goals while keeping physical demands reasonable, cognitive load
manageable and intrinsic motivation high. By treating work design as a dynamic,
evidence-based process rather than a one-off exercise, organisations secure
sustainable competitive advantage and create roles in which people can thrive.
Module 2: Strategic Human Resources Management
139
BIBLIOGRAPHY
BIBLIOGRAPHY
Armstrong, M. (2011). Armstrong’s handbook of strategic human resource
management. (5th ed.). Kogan Page.
Brevis, T., & Vrba, M. (2017). Contemporary management principles. Juta.
Byars, L. L., & Rue, L. W. (2008). Human Resource Management (7th ed.). McGrawHill.
Correia, M. S. (2019). Sustainability: An overview of the triple bottom line and
sustainability implementation. International Journal of Strategic Engineering, 29–
38.
Damico, A. B., Aulicino, J. M., & Pasquale, J. (2022). What does sustainability mean?
Perceptions of future professionals across disciplines. Sustainability, 14(15).
Evans, N. (2015). Strategic management for tourism, hospitality and events (2nd Ed.).
Routledge.
Fischhoff, M., Agarwal, D., & Gilvesy. (2021, December 13). What is social
sustainability? Network for business sustainability. Network for Business
Sustainability.
Hellriegel, D., Jackson, S. E., Slocum, J., Staude, G., Jackson, S. E., Louw, L.,
Slocum, J., Staude, G., Amos, T., Klopper, H. B., Louw, L., & Oosthuizen, T.
(2008). Management (3rd Ed.). Oxford University Press.
Hermundsdottir, F., & Aspelund, A. (2021). Sustainability innovations and firm
competitiveness: A review. Journal of Cleaner Production, 280(1).
Jansson, A., & Rozenbachs, A. (2016). HR as strategic partner: How to make it happen
[Master’s Thesis]. Uppsala University.
Jones, G. R., & George, J. M. (2014). Contemporary management (8th ed.). McGrawHill Education.
Maree, K., Creswell, J. W., Ebersöhn, L., Eloff, I., Ferreira, R., Ivankova, N. V., Jansen,
J. D., Nieuwenhuis, J., Pietersen, J., Plano Clark, V. L., Ebersohn, L., Eloff, I.,
Ferreira, R., & Ivankova, N. V. (2016). First steps in research (2nd ed.). Van
Schaik.
Mawande, X. (2018). Should HR become a statutory profession in South Africa? The
pros
and
cons.
South
African
Board
for
People
Practices.
http://sabpp.co.za/should-hr-become-a-statutory-profession-in-south-africa-thepros-and-cons-by-xolani-mawande/
140
© Business Management Training College (Pty) Ltd
BIBLIOGRAPHY
Nel, P. S., Kirsten, M., Swanepoel, B. J., Erasmus, B. J., & Poisat, P. (2003). South
African employment relations: Theory and practice (3rd ed.). Van Schaik.
Nel, P., Werner, A., Du Plessis, A., Ngalo, O., Poisat, P., Sono, T., Van Hoek, L.,
Botha, C., Du Plessi, A., Ngalo, O., Poisat, P., Sono, T., Van Hoek, L., & Botha,
C. (2012). Human resource management (8th ed.). Oxford University Press.
Nickols, F. (2016). Definitions & Meanings. Management Journal, 1(1), 1–13.
Nieman, G., & Bennet, A. (2014). Business Management - A Value Chain Approach
(2nd Ed.). Van Schaik.
Nieman, G., & Bennett, A. (2014). Business management (2nd ed.). Van Schaik.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2015). Human resource
management: Gaining a competitive advantage (9th Ed.). McGraw-Hill Education.
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2017). Human resource
management: Gaining a competitive advantage (10th ed.). McGraw-Hill
Education.
O’Donoghue. (2021, January 17). The David Ulrich HR Model. Test Candidates.
Okumus, F., Atlinay, L., & Chathoth, P. (2010). Strategic management for hospitality
and tourism. Routledge.
Paauwe, J., & Boon, C. (2018). Strategic HRM: A critical review. Human Resource
Management.
Purvis, B., & Robinson, D. (2019). Three pillars of sustainability: In search of
conceptual origins. Sustainability Science, 14, 681–695.
Ross, S. (2022). How are labor demand forecasts made in human resources
planning?. Investopedia.
Rudansky-Kloppers, S., & Strydom, J. (2015). Principles of sport management. Oxford
University Press.
Saunders, M., Lewis, P., & Thornhill, A. (2016). Research methods for business
students (7th ed.). Pearson.
Schutte, N., & Barkhuizen, N. (2021). Intricacies of HRM as a managerial profession
of South Africa: A conceptual analyses. Department of Industrial Psychology and
People Management, 443–456.
Stewart, G. L., & Brown, K. G. (2009). Human Resource Management - linking strategy
to practice. Wiley.
Module 2: Strategic Human Resources Management
141
BIBLIOGRAPHY
Surbhi, S. (2022, February 14). Difference Between Internal and External
Environment. Key Differences.
Swanepoel, B. J., Erasmus, B. J., Schenk, H. W., & Tshilongamulenzhe, M. C. (2014).
South African Human Resource Management Theory and Practice (5th ed.). Juta.
Ulrich, D. (1996). Human resource champions. Harvard Business School Press.
Warnich, S., Carrell, M. R., Elbert, N. F., & Hatfield, R. D. (2015). Human Resource
Management in South Africa (5th Ed.). Cengage Learning EMEA.
Warnich, S., Carrell, M. R., Elbert, N. F., & Hatfield, R. D. (2018). Human Resource
Management in South Africa (6th Ed.). Cengage Learning.
142
© Business Management Training College (Pty) Ltd