How to Best Approach HR Strategy Implementation
We know that an effective HR strategy can increase company performance. With the rise of HR analytics, companies can better measure whether HR strategies actually pay off. Proving the added value of HR is a very useful first step. However, doing so proves hard to do. In this article, I will focus on the HR implementation process. Knowing this process will help to on the one hand understand what happens when implementing an HR practice and on the other hand help in further improving the impact of HR on the business.
Paying attention to designing effective HR strategies is very important. But without good implementation, all effort that goes into designing HR strategies could be a waste of time and money. This is why academics have been studying HR strategy implementation for the last decade.
Nishii and Wright (2008) and Purcell and Hutchinson (2007) were among the first to break down strategic HRM implementation in different steps. They offer the following model which helps to understand the HR implementation process:
Let’s go over these steps one by one:
- Intended HRM is the set of HR practices (e.g., selection, training, performance management, rewards, etc.) as designed by the organization and HR.
- Implemented HRM is the set of HR practices as delivered by managers.
- Perceived HRM is the set of HR practices as perceived by employees.
- Employee outcomes are employees’ reactions to these practices. Examples are employee satisfaction, commitment, or their willingness to exert extra effort.
- Organizational performance is the resulting company performance.
An HR practice that is being implemented goes through each of these steps. For example, HR designs a new performance management system. Then, managers deliver the performance management system, and employees experience it. These steps are important because managers may differ in how they deliver the system. And employees may have different needs, preferences, and backgrounds. This can also lead to having different perceptions of the same system.
Yet, these implementation steps are often neglected when evaluating an HR initiative. Usually, companies only measure ‘intended HRM’ and performance outcomes. This does give some information, but not enough to be able to take action, as we have no idea of what actually happens – and where it goes wrong.
Imagine you are evaluating the new performance management system mentioned above. You can measure employee performance to see whether it goes up after implementation. When you analyze those data, you may find that the performance management system improves performance. But then you still don’t know whether this was due to the system itself or due to the way it was implemented. And if you don’t find an effect, you don’t have any information about where the problem lies. And you still don’t know what you can do to improve it.
One solution for this is to look at each of the steps of the HR strategy implementation process. This way you can see whether the lack of results are due to the design, delivery, or interpretation of the HR initiative. Is the performance management system implemented as intended by managers? Do employees experience the system as intended? And how do they react to it and why? Answering these questions gives a lot more information on the impact of HR on employees.
Several academics have looked at these questions. They found that intended, implemented, and perceived HRM are usually very different (e.g., Boon, Den Hartog, & Lepak, 2019).
For example, Den Hartog and colleagues (2013) studied this issue. They measured how a set of HR practices was implemented by managers and perceived by employees. Ideally, HR practices should be delivered and perceived as intended. But this was not the case. There were large differences between implemented and perceived HRM. This is problematic for companies.
Also, employee perceptions of HR practices drive employee behavior and performance. Not the actual practices as designed or implemented (Guest, 1999). So it is important to make sure that employee perceptions of HRM are positive. This is in line with the recent emphasis on the employee experience.
We know that delivering HR as intended by the company is very challenging. But how can we improve the implementation process? How can we make sure that the right message gets across to employees? And that employees will have a positive experience?
Managers can play an important role here. They are the ones who deliver a large share of the HR practices. Think for example about employee selection and performance management. The manager has a large influence on employee experiences with the organization and HR.
One important factor is manager communication. Den Hartog and colleagues (2013) looked at how to reduce the ‘noise’ that occurs when implementing HR practices. They showed that HRM implementation is more effective when managers communicate well. It is important for managers to give employees sufficient, understandable, and useful information. In that case, employee perceptions are more similar to the implemented practices.
Not only clear communication of HR initiatives and their value is important. Managers can improve implementation a lot by having good relationships with their employees. They need to take their needs seriously, and treat them fairly (e.g., Purcell & Hutchinson, 2007). This can make employee experiences with HRM more positive.
All in all, attention for the HR strategy implementation process and the role of managers is important. This could help organizations to better spot problems and improve them. As a result, organizations can achieve better results with their HR initiatives.