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Strategic human resource management models: A review and a proposal for

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Article  in  Management Dynamics : Journal of the Southern African Institute for Management Scientists · December 1993

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Vol 2 No 3 WINTER 1993 BESTUURSDINAMIKA

STRATEGIC HUMAN RESOURCE MANAGEMENT

MODELS: A REVIEW AND A PROPOSAL FOR SOUTH
AFRICAN COMPANIES

P.A. Grobler Department of Business Economics

University of South Africa

In die lig van die onsekere omgewing waarbinne ondememings in Suid-

Afrika moet fiinksioneer, is dit wenslik dat die belangrikste hulpbron wat
die ondememing besit, naamlik sy mannekrag, optimaal benut moet word.
Ten einde hierdie doelwit te bereik, is ’n proaktiewe ingesteldheid van die
mannekragbestuursfiinksie noodsaaklik. Die metode wat in hierdie ver-
band toegepas moet word, vereis die integrering van die mannekrag-
bestuursfunksie met die strategiese bestuursproses van die ondememing
en die ontwikkeling van mannekragstrategiee om die ondememing-
strategie te ondersteun. Verskeie strategiese mannekragbestuursmodelle
om die proses te vergemaklik is reeds ontwikkel en in die literatuur
beskryf. Die meeste van hierdie modelle slaag egter nie daarin om alom-
vattende riglyne vir die integrering van die mannekragbestuursfiinksie
met die strategiese bestuursproses te beskryf nie. 'n Model is vervolgens in
hierdie artikel ontwikkel wat in die behoefte sal voorsien.

1. INTRODUCTION
The important role of strategic human resource management (i.e. the linking
of human resource management (HRM) practices, systems and policies with
the strategic initiatives of the company) as an effective mechanism for coping
with environmental change has been widely reported in the literature
(Alpander, 1982; Devanna, Fombrun & Tichy, 1981; Dyer, 1983; Dyer &
Holder, 1988; Hall & Goodale, 1986; Kydd & Oppenheim, 1990; Miller,
1987; Miles & Snow, 1984; Rothwell & Kazanas, 1988; Schuler, 1992;
Stumpf, 1988; Tichy & Barnett, 1985; Tsui, 1987).

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MANAGEMENT DYNAMICS Vol 2 No3 WINTER 1993

Although additional benefits, such as increased productivity, larger profits

and a more effective workforce, will result from the adoption of the strategic
approach (Misa & Stein, 1983; Nkomo, 1988), the strategic use of human
resources (HR) frequently remains an afterthought.
A recent survey of companies in the manufacturing industry in the
Pretoria/Witwatersrand/Vereeniging area (Grobler, 1991) showed that, while
eighty-four percent of the HR Managers indicated that they were part of the
team responsible for strategic decision-making, their involvement only
applied to the labour relations component. It was obvious therefore that most
companies were relying on short-term isolated responses to an immediate
crisis rather than employing an integrated HRM strategy.
Although the traditional personnel management tasks will continue to be of
value in the future, these alone will not assist a company in achieving a
competitive advantage - having better strategies, products and human
resources than its competitors. To achieve this goal will require more than
merely the basic personnel management skills of the past.
This article offers guidelines on how the HRM function should be linked to
the company strategy in order to gain the desired competitive advantage,

2. STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)

MODELS-A REVIEW
With regard to the foregoing introductory remarks, it is necessary that HR
executives at all levels within the company should be active participants in
the formulation and implementation of its strategies for dealing with a
turbulent environment. This would consequently involve the development of
HR strategies that are consonant with the organisation's strategy and culture.
According to Lengnick-hall and Lengnick-hall (1988:454) it is desirable to
integrate HRM with the company strategy because:
1. Integration provides a broader range of solutions for solving complex
organisational problems.
2. Integration ensures that human, financial and technological resources are
given consideration in setting goals and assessing implementation
capabilities.

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Vol 2 No 3 WINTER 1993 BESTUURSDINAMIKA

3. Through integration organisations must explicitly consider the indivi­

duals who comprise them and must implement policies.
4. Reciprocity in integrating human resource and strategic concerns limits
the subordination of strategic considerations to human resource
preferences and the neglect of human resources as a vital source of
organisational competence and competitive advantage.
Several SHRM models have been developed which prescribe how the
company strategy and HRM should be linked (Baird, Meshoulam & De Give,
1983; Dyer, 1983; Dyer & Holder, 1988; Kelleher & Cotter, 1982; Nininger,
1982; Nkomo, 1988; Rothwell & Kazanas, 1988). However, few offer
prescriptions for global HR strategies (Baird & Meshoulam, 1988:116).
Two predominant approaches to integration are found in the literature. The
first is a reactive role for HRM in which strategy dictates HR policies (Ferris,
Schellenberg & Zammuto, 1984; Miles & Snow, 1984; Smith, 1982; Walker,
1981 and 1988) and the second is a proactive role in which HRM is involved
in the strategy formulation process itself (Alpander & Botter, 1981; Dyer,
1984; Tichy, Fombrun & Devanna, 1982).
In order to understand the SHRM models found in the literature, Dyer's
model was used to classify the different types of models. Dyer (1985) suggests
that two dichotomies are important to consider. The first is to separate the
organisational from the functional level strategic human resource concerns
and the second, to differentiate between content issues and process elements.
According to Lengnick-hall and Lengnick-hall (1988:456), content concerns
specific choices such as policies and practices in SHRM, whereas process
focuses on the means by which these policies and practices are derived and
implemented. It became clear that content versus process distinctions prevail
throughout both streams of research.
After reviewing the different models the author will propose an integrated
model that is directed towards the organisational level of analysis and the
process of SHRM.

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MANAGEMENT DYNAMICS Vol 2 No3 WINTER 1993

According to Dyer's classification, four groups of SHRM models can be

distinguished: organisational SHRM content models, functional SHRM
content models, organisational SHRM process models and functional SHRM
process models.

2.1 ORGANISATIONAL SHRM CONTENT MODELS

Two important models are found here, namely those of Labelle and Wils. In
his investigation Labelle (1983) found that company strategy was the
determining factor for the content of the organisational HR strategy and that
both the content of the organisational HR strategy and the company strategy,
were influenced by internal and external environmental factors. Various types
of HRM practices and goals to fit company strategies were identified by
Labelle. Unfortunately, however, the investigation was limited to only eleven
companies from diverse sectors. A similar investigation was carried out by
Wils (1984) in the USA. He identified a strong correlation between the
content of the company strategy and the content of the organisational human
resource strategy. However, this investigation was limited to only one
company consisting of twenty-two business units. Although both studies made
an important contribution to the content theory of organisational HR strategy,
they did not explore the relationship between companies with a stable strategy
and others with an unstable strategy to determine whether the company
strategy is a stronger contributing factor of the content of organisational HR
strategy in turbulent or normal times. There is also a need to investigate
companies with the same company strategy but different organisational HR
strategies.

2.2 FUNCTIONAL SHRM CONTENT MODELS

A number of diverse models are found in this group. As the purpose of this
article is not to discuss each model in detail, only a representative number
will be evaluated. In their model, Baird and Meshoulam (1988) are of the
opinion that two strategic fits must be managed. The one is an external fit,
where HRM practices fit the development stage of the organisation and the
other is an internal fit, where the components of HRM complement and
support each other. The content of the HRM practices are thus determined by
the development stage of the organisation. Some of the shortcomings of this

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Vol 2 No 3 WINTER 1993 BESTUURSDINAMKA

approach are that Baird and Meshoulam (1988) see the classification of an
organisation into a specific phase as too simplistic and the fact that the
determination of a specific phase is also largely based on subjectivity. In their
model, Miles and Snow (1984) identified three company strategies which
according to them can be found in every company namely "defender"
"prospector" and "analyzer". By using these strategies, Miles and Snow
(1984) identified various types of HRM practices that could support them.
These practices were based on information gathered throughout various types
of companies in Canada. One of the biggest drawbacks of this approach is the
idea that strategies are rigid and that the only flexible aspect is human
resources. The last group of models found in this category are those based on
the life cycle concept. Here development occurs in relatively predictable
discrete building blocks of birth, maturity, decline and death. Authors like
Smith (1982) and Stybel (1982) have used these building blocks to identify
the content of various HRM practices. One of the drawbacks of these models
is that organisations do not follow a cycle which includes death, but
constantly reform and renew themselves to fit the environment.

2.3 ORGANISATIONAL SHRM PROCESS MODELS

A very' large number of models can be found in this category. However, a
noticeable limitation of work in this area has been the failure to take a more
comprehensive view of matching the HRM function to strategic or
organisational conditions. Nininger's (1982) model, for example, provided a
framework to enhance organisational effectiveness through integrating the
strategic planning and management function with human resources. Golden
and Ramanujam (1984) adopted a similar view. Apart from these a few other
studies (Baird, Meshoulam & De Give, 1983; Cassell, Hervey & Roomkin,
1985; Dyer & Holder, 1988; Dyer, 1983; Galosy, 1983; Gould, 1984;
Kelleher & Cotter, 1982; Manzini & Gridley, 1986; Nkomo, 1988; Rothwell
and Kazanas, Walker, 1978), little work taking a comprehensive view of the
HRM function at the strategic level has been done. Although these authors
provided steps for the integration and implementation of HRM in the
organisation, one of the major drawbacks of these models is that they do little
to overcome the problems of identifying and analysing the appropriate

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MANAGEMENT DYNAMICS Vol 2 No3 WINTER 1993

information either to characterise the strategic situation or to clarify the HR

manager's role under a specific set of conditions. Nor do they consider the
inevitable need for change as new products and technologies enter the market
place.

2.4 FUNCTIONAL SHRM PROCESS MODELS

Where the research regarding the organisational SHRM process models
concentrated on the wider organisation, the emphasis in this category is
narrowed down specifically to the personnel function. Odiome's model (1984)
was the only one found in this category. It seems that no large-scale
systematic attempts have thus far been made to study the ways in which
personnel functions determine their strategies, the factors to which they
respond during this process or the quality of results obtained. In his model,
Odiome recommends a process by which the company's human resources can
be evaluated and classified into four different groups: "stars", "problem
children", "cash cows" and "dogs". To classify the workforce, use is made of a
matrix with the vertical axis indicating performance and the horizontal axis
indicating potential.
The performance capability of an individual is determined by a management
by objectives (MBO) approach and the potential by assessment centres. The
matrix is then used as a basis for the development of various human resource
management practices. One of the drawbacks of this approach is that an
average individual cannot easily be classified into one of the categories.
Subjectivity also plays an important role in the process and the impression is
created that it is a very static and rigid short-term model. So it is thus not
very future orientated.

2.5 AN EVALUATION OF THE DIFFERENT MODELS

When examining the various groups of models described above, it appears
that not much attention is given to content models. Process models, on the
other hand, especially the organisational SHRM models, have reached a more
advanced stage of development. This is a logical development as the process
of any system must first be implemented before the content can be identified.

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Vol 2 No 3 WINTER 1993 BESTUTJRSDINAMIKA

Although various types of models are found in the literature, it is clear that
there is no overall all-embracing model that explains how HRM practices and
procedures can be managed to meet present and future business needs. In the
following paragraphs an SHRM model, devised and structured on the various
concept? available in the literature, is proposed.

3. PROPOSED MODEL
Unless HRM strategies are redesigned to be both more comprehensive and
more tightly coupled to business strategies, it will not be possible to create a
viable and competitive organisation. The specially designed model illustrated
in Figure I creates a framework for the inclusion of human resources as an
integral part of the total strategy. The model which the author proposes is
directed towards the organisational level of analysis and the process of
SHRM. This approach is followed because the greatest need at present
appears to exist within companies in South Africa in this area (Grobler,
1991}:357-358.) It identifies various stages in the planning and decision­
making process from designing the company mission through to formulation
and implementation of SHRM plans. At each step of the process, decision­
making methods and guidelines are described which form the basis for the
development of an integrated SHRM plan. The model is interactive and
integrative and at each step permits both exchange of data and feedback.
Various elements establish the context within which HRM strategies are
developed: the environment, the company mission, the overall company
strategy and internal company constraints. These elements form the building
blocks for the proposed model. The various steps in the process to develop
HRM strategies will be discussed briefly by referring to the model. It is
important to note that although the model might create the impression that
human resources are a separate element to be integrated into the company
strategy, that is not the case. There can be no company strategy without the
inclusion of human resources. The model can be implemented by any type of
company.

7
MANAGEMENT DYNAMICS Vo! 2 No3 WINTER 1993

FIGURE 1
AN INTEGRATED MODEL FOR STRATEGIC HUMAN RESOURCE
MANAGEMENT
Evaluation/review Evaluation/review
J3)
External environment External environm ent
Eecnointsai, Economical,
m cnndogicai. tQcnncaogicaJ,
scaal. powical, lagal, sozt&, pobticat, legal.
gaograonu, cuilurnl, goog;aDh:c.
laocur martsa cDmocnavetaciorc
H um an re so u fc o Older organisational
m a n a g e m e n t junction | functions
- Human uscurt* iudd • tacrcva Opportunities
• Chang* «mc ?un
* Chang# numan raeoure#
' tmor:Ti»c/> mtam
*fifg^ffw
l f natrcon
anagvwji
er/tm ^svh tfiresis
orfcer ofwniaiian rega/n
- Uogrifit mitnan t*to u tn p | t9tr*numin meursa
tnrorm&Jion *ytism management hintsan

(5)
Aimmatrve
competitive Strategic:
strateaies
planning
X
Strengths
- Production
planning.
We ann esses

OU7lC£/C£n£»
EniDity** aJui lavoft Financial
Financial function! resources
Prooueavo/
PsianutJ of *mp»Y**» Physical
Csnum»«rtt d amcMya** Production function \ resources
MaAagamori c«mp«*nr* Human
Eflipe/M *v«a Marketing function
OfgwMOon c&nifiarcusur* n resources
Q;^anaA»n ftrucsir* Organisational
Purchasing function , resources
Quafty ct wark a
Afcatttaaisn tranea
Tymovt/ )«vo* Rosoarcii and / Tccn nological
Jca juiajyaa and job development / resources
C«t-o«rW3 human rt«0UA:« pro^ra/nra** function j
Evan^alrtn ef raana$am«rR

(61
1-4-
Business straiDnies
Business units «—> humanresourcesmokesj ---fcH < Business units

J 7>
rmitacnai strawgias
Functional a r e a s
I Humnnsaisti! n a e a s s
<---► Functional areas

I mi
Control

(9)
■Evaluation/review Evaluation/review

8
Vol 2 No 3 WINTER 1993 BESTUURSDINAMIKA

3.1 CORPORATE MISSION

The first step of the proposed model represented in Figure 1 deals with the
establishment of a corporate mission. It is important that this mission should
state the basic type of product/service to be offered, the primary
markets/customer groups to be served 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. A vital aspect of this
mission is that it must not only be known to all within and outside the
company, but must also contain an HRM component.
According to Nininger (1982:113), this component could be compiled as
follows:
The people in the organisation will be managed in such a manner as to
generate a climate of opportunity and challenge for each employee within
which the individual can most effectively contribute to the fulfilment of his
goals and those of the organisation. This will be accomplished by:
® having a clear understanding of all the qualities of each employee such as
skills, knowledge, potential, aspirations and limitations
® setting standards of performance that challenge each employee and by
ensuring that this performance is attained
« rewarding excellent employee performance in both material and non­
material terms
« planning properly for manpower needs
« providing employees throughout the organisation with opportunities for
promotion and for developing their job knowledge, skills and satisfaction
® practising a form of management that allows decision-making authority
to be as decentralised as is practical; and
® being alert and receptive to new and productive developments in the field
of human resources management.
It is important to note that to be successful as a company, this mission must
form an integrated part of a well-established strategic management process.

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MANAGEMENT DYNAMICS Vol 2 No3 WINTER 1993

This process entails a set of decisions and actions that result in the
formulation and implementation of plans designed to achieve a company's
objectives. The presence of a properly construed mission statement and a
well-established strategic management process forms the framework within
which the SHRM process can be integrated.

3.2 REORGANISATION OF THE HRM FUNCTION

The second step of the model entails the reorganisation of the HRM function.
Because of the traditional reactive approach adopted previously by the
function, it will probably be well structured at the functional level. However,
if a strategic approach is to be adopted, crucial components like the structure
of the function, the HR officer orientation and the HR information system will
have to be reorganised and upgraded. This can only be done after an audit has
been performed within the company by means of a questionnaire. The
information obtained will allow the HR officer to determine the present state
of the function. Thereafter a strategy can be developed to upgrade the
function to the business as well as strategic level.

3.2.1 HUMAN RESOURCES INFORMATION SYSTEM (HRIS)

To make a large volume of HR information accurately and expediently
available to managers and other clients requires a well-developed database.
For this purpose, a computerised HR information system must be available
within the organisation. As indicated in the model, this system must form
part of an integrated management information system. It must also be easily
accessible to all.

3.2.2 HR PROFESSIONAL ORIENTATION

The change will require new skills and tasks for the HR professional. As Sears
(1984:414) indicates, this requires not only more highly skilled HR profes­
sionals, but increased levels of power, access and influence within individual
organisations as well as a systems perspective toward human resources. This
can be attained by means of seminars for HR personnel in areas like strategic
management as well as a better understanding of the other functions. It is also
important that the HR personnel not only gain the respect and confidence of

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Vol 2 No 3 WINTER 1993 BESTUURSDINAMIKA

the entire organisation, but also become part of the larger team within the
company. As indicated in the model, this will require a better understanding
by the other employees of the worth of the HR function to the company. This
can be achieved by means of seminars where both parlies are present.

3.2.3 "'REORGANISATION OF THE HRM FUNCTION

The first step in the reorganisation of the HRM function is to identify the
different HR tasks to be performed on the strategic, business and functional
levels for each of the HR activities, namely recruiting, selection, compensation
and performance appraisal. The following may serve as guidelines of what is
required in this regard. Take the HR development activity as an example:
e strategic level - develop characteristics of people needed to run businesses
in the long-term
e business level - organise development programme
® functional level - provide job skill training
After the activities at the different levels have been identified, it is important
that an organisational structure be drawn up for the function. At the
functional level, a traditional HRM department will be required. At the
business unit level, the separate functions as identified at the functional level
must be integrated and at the strategic level, an elite HRM team is required to
serve on the various top management committees.

3.3 EXTERNAL HR ENVIRONMENTAL SCANNING

The third step of the model entails the systematic identification and analysis
of key HR trends and forces in the external environment. This must be done
to identify potential threats and opportunities having an impact on the
management of the company's human resources. As indicated in the model,
changes taking place in the economical, technological, social, political, legal,
geographical and cultural spheres and the labour market must be monitored
for their impact on human resource strategies, policies and programmes. This
scanning, which may be done formally by means of a properly constructed
scanning team or informally by means of attending seminars, reading
newspapers or other publications, may be undertaken in conjunction with the

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MANAGEMENT DYNAMICS Vol 2 No3 WINTER 1993

other functions in the organisation as indicated in the model. Typical

questions to be asked here are: How can the present economic situation
influence the labour market? What social norms affect the behaviour of
workers? What are the present government's policies? What labour relation
laws are contemplated? What is the population growth rate, educational level
or the mobility of the labour market?
According to Beeton (1988:12) in South Africa the HR function was, to a
large extent, excluded from this process in the past. A special responsibility
thus rests on the shoulders of HR managers to create such a process in the
new HR department structure mentioned in the previous step. In order to
generate realistic strategic alternatives from an HR viewpoint, it is proposed
that the information obtained through this process be made available to other
functions by means of interim reports, seminars or informal group
discussions. It is important to note that not all aspects in the external
environment need scanning. Only those of vital importance to the success of
the organisation need attention.

3.4 INTERNAL HR SCANNING

The fourth step of the model involves the scanning of the internal human
resources of the company. Such a scanning can help to identify current
human resource strengths and weaknesses. Aspects to consider here include:
employee skill levels, productivity, staffing levels, absenteeism trends,
turnover levels and others mentioned in the model. This is an important step
as the organisation must be sure of its capabilities and shortcomings if it
wishes to capitalise on the opportunities in the external environment.
As indicated in the model, this can be done in conjunction with the other
functions in order to arrive at the drawing up of a company profile. This
profile may then be compared with competitors to identify possible
competitive attributes. It is important to do this for each business unit.
Various sources, such as formal studies or the analysis of financial reports
may be used for this purpose. The information obtained can be combined in
the interim reports, seminars and informal group discussions used in the
previous step.

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Vol 2 No 3 WINTER 1993 BESTUURSDINAMIKA

3.5 ANALYSIS OF CORPORATE COMPANY OBJECTIVES AND

STRATEGIES
Step 5 of the model entails the evaluation of the strategic choices of the
company from an HR perspective and the formulation of HR strategies to
support-ithe company strategy. It is important to remember that the strategic
choices of a company will be determined by the quality and quantity of its
external/internal labour market, and the company mission. Having completed
a scanning of the external and internal HR environment (steps 3 and 4), a
clear picture will emerge in this regard.
To implement this step of the model successfully, the following guidelines are
proposed:
® The chief executive officers of all the functional divisions (HR included)
should meet at least once a year to determine the future long-term goals
of the company.
® The HR executive must become actively involved in the formulation of
the company goals - therefore a proactive approach is recommended.
® The HR executive must evaluate the proposed company strategies from a
feasible (can the manpower be obtained?) and desirable (will there be a
strike?) viewpoint.
® The HR executive must accept or reject the company strategies.
« The HR executive must use the approved company strategies to identify
the quality (skill composition) and quantity (number) of people desired in
the future. For this purpose, he must do a formal strategic human
resource planning exercise.
® The HR executive must develop various HR strategic alternatives and
evaluate them to choose the most appropriate one. These strategies must
consist of a portfolio of HR activities and programmes. For example, on
the staffing side, the HR executive should decide what type of people will
be needed in the next five or ten years and how they are to be recruited,
developed and promoted. For performance management, the HR executive
must decide what kind of evaluation systems will be most effective for
these employees.

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MANAGEMENT DYNAMICS Vol 2 No3 WINTER 1993

® An organisation-wide HR strategy and policy to support the overall

company mission must be developed and included in a grand HR plan.

3.6 ANALYSIS OF BUSINESS UNIT STRATEGIES AND OBJECTIVES

Step 6 entails the development of human resource strategies and policies
tailored to meet specific product/market/customer segments. Although these
strategies are of a more specific nature, they must relate to the corporate HR
strategy developed in the previous step. To be effective, it is imperative that
there be close interaction between the HR executive at the corporate level and
the HR manager at the business unit level as well as the line managers within
the business unit.
As indicated in the model, the business unit executives must also scan the
environment, develop a mission statement and then, by interacting with the
various functions, develop an integrated business unit strategy. To develop
realistic HR strategies, there must also be an exercise in strategic human
resource planning. However the focus here will not be on the entire
organisation as in the previous step, but on the specific business unit level
only.
An important aspect here is the development of the best HR strategies to serve
the business unit. The following guidelines are recommended in this regard:
® Generate as many alternative HR plans as possible
® evaluate the HR alternatives
® choose the best HR alternative.
The ultimate choice made here constitutes the HR strategy at the business unit
level.

3.7 ANALYSIS OF FUNCTIONAL STRATEGIES AND OBJECTIVES

Step 7 entails the development of functional human resource strategies,
programmes and policies. Functional strategies are the operational plans for
managing the subordinate activities within a business. As indicated in the
model, aspects like environmental scanning and the development of mission
statements for the different functional areas should again receive attention.

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Vol 2 No 3 WINTER 1993 BESTUURSDENAMIKA

Functional strategies support the overall business strategy and consist of even
more details and particularities of a business's strategic course. They are
important because they indicate exactly how each major functional area (e.g.
recruitment, staffing and compensation) in the business contributes to the
accomplishment of the overall business strategy.
It is essential for these specialised functions to be integrated and related to the
business strategy. It is also important, as in the previous step, for various HR
alternatives to be developed and the most suitable one chosen. In addition,
priorities must be given to the various programmes developed so that the HR
budget can be allocated in the most effective manner.

3.8 CONTROL OF THE PROCESS

A company is only successful if it is able to achieve its short- and long-term
goals. To make this possible, it is important that the executive managers (HR
included) establish monitor and control measures. This is step 8 of the model.
Because of the long time span involved in implementing a specific strategy,
the traditional method of evaluating the results against a specific goal cannot
be utilised. The reason for this is that during the implementation phase of the
strategy, various changes may take place in the internal and external
environment which could have a direct influence on the long-term HR
strategy.
When implementing the model, the following guidelines can be of assistance
regarding the control of a strategy:
« Check systematically and constantly whether the premises forming the
basis of the planning of the HR strategies are still valid;
® Check whether the overall HR strategy should be changed in the light of
unfolding events and results;
® Check whether the annual HR objectives are being met.
The results of the above assessments can be used to make mid-course
corrections in the implementation of short-run HR strategies or adjustments
to the original long-term HR plans.

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MANAGEMENT DYNAMICS Vol 2 No3 WINTER 1993

3.9 EVALUATION AND REVIEW

The final step of the model entails the evaluation and review of the whole
strategic human resource management process. A formal evaluation and
review procedure should involve the evaluation of the results of HR pro­
gramming activities and the correction of any deviations identified. The vital
question here is "How well is the HR plan working?” Aspects to be investi­
gated here are how well the HR programmes are succeeding in the attainment
of the HR goals and how easily the programmes are being executed. The
ultimate goal of this step of the model is to establish the impact that SHRM
has on the overall effectiveness of the organisational performance.
Guidelines that can be used for the evaluation of the HR programmes are:
® The programme proceeds without amendments.
® The programme is amended to enable it to reach the proposed goal.
© An alternative programme is accepted.
Phillips and Seers (1989:54-58) have identified various methods/tools to
assist the company in this regard: Costftenefit analysis; goals and objectives;
process-oriented approach; human resource auditing; attitude survey
approach; tracking HR costs; HR accounting; reputational approach; per­
formance measures; index of effectiveness; profit centre approach and the
case study approach.
As indicated in the previous steps of the model, HR decisions and activities
differ at the various organisational levels. It is thus important that the evalu­
ation objectives and criteria vary according to the organisational level at
which the evaluation task is focused.

4. CONCLUSION
In this article a comprehensive model for strategic human resource manage­
ment is proposed. The application of the basic principles of the model will re­
sult in HRM playing a valuable role as a proactive partner in the affairs of the
company rather than being a mere reactive instrument. It should be em­
phasised, however, that the model includes several rather complex subsystems
which will need a fair amount of effort to ensure that they function efficiently.
It is also important to realise that all the elements of the model should

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function harmoniously as a unit. One missing element could easily upset the
final result thereby causing the underutilisation of the entire human resource
component. The time has therefore come for South African companies to take
stock of their position and to face the challenge of the future and adopt the
recommended strategic approach to HRM. This is the obvious course if they
wish to remain successful and viable in the long-term.

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Vol 2 No 3 WINTER 1993 BESTUURSDINAMIKA

PRICE BEHA VIOUR OF THE JOHANNESBURG STOCK

EXCHANGE: A N INTERNATIONAL COMPARISON:
1984 1992 -

J.Z. Bloom Department of Business Economics

P.G* du Plessis University of Stellenbosch

Die onvoorspelbare piysgedrag van intemasionale effektebeurse en van

die Johannesburgse Effektebeurs (JEB), maak dit moontlik om deur
middel van korrelasie-analise die wedersydse invloed wat hulle op mekaar
het te ondersoek. In 'n vergelyking van die JEB met ag van die wereld se
grootste beurse is vasgestel dat daar onder sekere omstandighede wel
korrelasies bestaan. Die navorsing toon dat daar nie genoegsame rede is
om in alle gevalle die nul hipotese te aanvaar nie. Interne en eksteme
gedragspatrone is geidentifiseer wat dien om die navorsingsresultate te
staaf. Bepaalde tendense, situasies en belangrike gebeurtenisse is
waargeneem. Hierdie unieke geidentifiseerde faktore van die JEB, gee
aanleiding tot onderweipe vir verdere navorsing en bespreking.

1. INTRODUCTION AND BACKGROUND

Investors must be aware of the influence that stock exchanges worldwide have
on each other. Not only the effect of trend and other changes on stock mar­
kets must be accounted for, but also the strength or weakness of the relation­
ship between international stock exchanges. The nature of stock markets,
coupled with inconsistent behaviour patterns, presents the ideal opportunity to
statistically analyse the effect various phenomena have on international stock
markets. According to Naidoo (1990:6), investors on the Johannesburg Stock
Exchange (JSE) cannot ignore overseas market trends, most importantly
those on the New York stock exchange. The question arises as to the extent
of the influence exerted on the JSE by other international markets.
The issue can be addressed by determining the strength of the relationship
between the stock exchanges, based on the movement of the relevant price

21

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