Position OF THE PAPER This study examined the validity of strategic human resource management practices and their

effects on company performance on the basis of service sector, ownership and private-public organizations. Data were collected from several articles (mentioned in the bibliography section) and studies about different range of strategic HRM practices. The findings indicate that a valid set of strategic HRM practices (training, participation, results-oriented appraisals, and internal career opportunities) affect both service performance and financial performance. HRM strategies may be influenced by the decisions taken on strategy (the nature of the business currently and in the future) and by the structure of the enterprise (the manner in which the enterprise is structured or organized to meet its objectives)1. In an enterprise with effective HRM policies and practices, the decisions on HRM are also strategic decisions influenced by strategy and structure, and by external factors such as trade unions, the labor market situations and the legal systems. In reality most firms do not have such a well thought-out sequential model. But what we are considering here is effective HRM, and thus a model where HRM decisions are as strategic as the decisions on the type of business and structure. This study explores the three important questions in the context of Bangladesh mentioned below: 1. Whether extent of impact of strategic HRM varies from sector to sector within service sector? 2. Whether influence of strategic HRM depends upon the ownership? 3. Is there any difference between private sector and public sector so far as impact of strategic HRM or performance is concerned? A company is known by the people it keeps. Researchers have argued that human resources may be seen as a source of sustained competitive advantage for organizations2. The underlying assumption is that human resources are unique to the extent that competitors cannot imitate them. Not only do human resources provide the competitive edge, but several recent studies have confirmed that the quality and innovation of HR practices impact business results. All of these goals and optimism can be accomplished only when the Strategic HRM is aligned with the ultimate corporate and business strategies. ORIGINS OF THE CONCEPT OF STRATEGIC HRM The concept of strategic HRM was first formulated by Fombrun et al (1984), who wrote that three core elements are necessary for firms to function effectively.

See John Purcell "The Impact Of Corporate Strategy On Human Resource Management" in New Perspectives On Human Resource Management. op.cit. 67-91. 2 Barney, 1991, 1995; Becker & Gerhart, 1996

Mission and strategy Organization culture Human resource management They defined strategy as a process through which the basic mission and objectives of the organization are set, and a process through which the organization uses its resources to achieve its objectives. But their most important conclusion was that HR systems and organizational structure should be managed in a way which is harmonious with organizational strategy . In Bangladesh the

Past Empirical Studies on Strategic HRM across the World Related to the questions of our concern:
Singh (2004) investigated the relationship between six HRM practices (Selection System, Training and Development System, Performance Appraisal System, Compensation System, Career Planning System and Employee Participation) and firm level performance in India. 359 firms were drawn from firms listed in the Centre for Monitoring Indian Economy (CMIE) database. Findings indicate that there is a significant relationship between the two HR practices, namely, training and compensation, and perceived organizational and market performance of firms. In their comparative study of 137 large manufacturing firms, Budhwar and Boyne (2004) differentiates the HR practices in public sector and private sector companies in India. Their findings suggest that against the established notion, the gap between the Indian private and public sector HRM practices (structure of HR department, role of HR in corporate change, recruitment and selection, pay and benefits, training and development, employee relations and key HRM strategies) is not very significant but in a few functional areas (compensation, training
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and development), private-sector firms have adopted a more rational approach than their public sector counterparts. Tessember and Soeters (2006) examined how, when and to what extent HR practices affect performance in Eritrea, Africas youngest and poorest country. They reported that the economic and political environment within which HR practices operate are not conducive. Their study tried to shed some light on the HRM-performance debate within the context of a developing country. Dimba and Kbonyo (2009) investigated the nature of the effect of strategic HRM practices on organizational performance. 50 multinational manufacturing companies in Kenya were sampled. The results indicate that all the variables of SHRM practices, except recruitment and selection were positive and significantly correlated with performance.
The Discussion: Service Sector and Strategic HRM: Organizations within many countries in the Asia-Pacific region including Bangladesh appear to compete through low prices, using inexpensive labor to carry out tasks. A strategic HRM, contingency-based approach to HRM is often seen as an essential part of a cost-minimization strategy (as per the Utilitarianism theory; a utilitarian organization is likely to reject such soft programs that have no quantifiable return. Hence, the more utilitarian an organization, the more likely it is to see HR programs as investments). A number of studies of strategic HRM have found that in spite of the amount of theoretically and empirically based advice available in the literature; many organizations fail to take up what are seen to be effective approaches to strategic HRM. In short, though views of HRM are embedded in the literature at the theoretical level, they do not, with the exception of ``lead'', exemplar'' or ``excellent'' companies, appear to have been translated into practice. Instead, HRM often appears to have been implemented on an ad-hoc, partial or reactive basis. Evidence of HRM's take-up was also weakened where many studies simply focus on one management practice, often at large, multinational, private sector organizations, implicitly presenting this as indicative of a grand HRM strategy (see for example Heyes, 1998). But now-a-days companies especially of service sectors (concentrating on banking and hospital industries of Bangladesh) the scenario is being improving over a decade or so. They practice HR planning, recruiting, selection, training and development, compensation, performance management, employee relations. The Discussion: The ownership and Public-Private forms of organizations: The ownership type (public and private sector) or forms (sole, partnership and companies-local or multinationals) also have an impact on strategic HRM. Writers such as Dyer and Holder (1988, p. 37), have gone so far as to suggest that top management is probably the most powerful force that can work against the adoption of strategic HRM initiatives. Often top management has a low priority and shortterm view of strategic HRM issues while being more concerned with issues such as power and control. This situation would be exacerbated by HRM's low power and status at the senior executive level (Grant

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and Oswick, 1998). In short, senior management commitment to HRM is crucial to its effective operation, but often not as forthcoming as it might be. The adoption of strategic HRM practices by organizations is greatly influenced by ownership type. The strategic HRM practice an organization adopts is a function of whether it is government-owned or run by private investors. These results are not surprising, because public organizations do not have access to adequate funds to expend on training and development activities unlike the private-owned organizations that have direct intervention from the owners themselves. Public organizations proprietor orientations which are mostly religion inclined also gives little opportunity for staff to participate in taking key strategic as well as operational decisions. Thus, ownership type is significantly related to most of the strategic HRM practices.
While describing the state of public administration in Bangladesh more than a decade ago, World Bank in a report argued that most civil servants are impervious to public sensitivities, highly bureaucratic and self-serving and increasingly incapable of managing a modern government within a pluralist democracy (World Bank, 1996). The situation has not changed much since then. In an internal report on the HRM aspects of Bangladesh public administration, ADB (2007) reiterates that: Public administration in Bangladesh remains largely centralized, excessively reliant on hierarchy and multiple layers of decision-making. Human resource planning is hardly existent and although frequent changes arrive in postings, inter-departmental mobility is rare. There are no incentives currently in place that encourage initiative and award excellence. The performance management system is obsolete and subjective. Training is neither linked to career planning, nor related to other dimensions of personnel management. Public Service Commission (PSC) of Bangladesh, a constitutional body, is the other central agency responsible for recruiting suitable candidates for appointment to the civil service by the Ministry of Establishment (MoE). It is also involved in the decision processes relating to other HRM matters such as promotion, posting, transfer, discipline and appeal of the government servants (Ahmed, 2007). Besides conducting competitive examinations and interviews for recruiting eligible candidates, PSC also, among others, conducts tests/interviews for promotion of government servants from one service to another and advise the government on matters relating to HRM aspects, especially the terms of conditions of service of government servants. However, due to lack of executive power, PSC fails to act as a watchdog body in monitoring the government s dealings with civil servants and their conditions of service and in most of the time, PSC s recommendations, put forward through its annual report, are not implemented for streamlining the civil service management. In recent years, the public image of PSC has been drastically affected by allegations of politicization and lack of impartiality, leakage of examination questions, incompetent and corrupt officials, lengthy recruitment procedure, irregularities in conducting examinations, corruption in the interview process and partisan recruitment (UNDP, 2007; Karim, 2007).

A further impact on implementation of effective strategic HRM is related to the ability of some HRM staff to undertake the additional, more proactive roles that it is supposed to encompass in case of public Page 4 of 6

organizations, that is, there is big question mark on whether it relates to the extent to which HRM practitioners possess the knowledge and skills necessary to implement a credible strategic HRM program within their organization. In addition, unlike private sector organizations, employees across the country agree that their HRM staff view their job as routine administration and lacked the knowledge, skills, influence and credibility to develop and implement a strategic HRM program. These perceptions are closely related to perceptions of overall HRM effectiveness and suggest that this barrier is a very real problem for many public organizations. Moreover, this barrier to effective strategic HRM occurs as a result of the lack of proven knowledge about, and the few attempts at demonstrating, the long-term impact of HRM programs. As a consequence, members of an organization may be skeptical of the value of major HRM initiatives. It is a skepticism that may be held by both senior and middle management. They are unable to discern tangible and positive performance outcomes related to strategic HRM, so that their commitment to it wanes or, in some cases, simply fails to materialize. Since they are responsible for its actual implementation, their lack of commitment results in overall ineffective HRM. Conclusions: To be seen as effective, HRM must meet the basic criteria of both the strategic and the developmental perspectives. That is, HRM policies and practices must be long term in focus, integrated with one another and in line with the organization s strategy and objectives as well as treating all employees fairly, increasing employee motivation, satisfaction and commitment, and helping all employees develop to their maximum potential. However, in the majority of cases, such effectiveness has been hampered through the goals of HRM not being achieved in practice, the inadequacies of a sizeable proportion of HRM staff and lack of support from top management.
Public administration HRM in Bangladesh, the focus should be devoted on the issues of decentralizing the personnel management system, reforming and strengthening the central HRM agencies (i.e., MoE and PSC) through securing ethics and professional integrity and increasing the pay scale of the civil servants. Emphasis should be placed on career management issues so that eligible candidates can be recruited, retained and rewarded and they are motivated and find it attractive and eventually perform well in delivering services.

There is general agreement that strategies which focus upon innovation, quality and service are likely to be more effective. Such strategies tend to rely upon highly skilled, committed and innovative workforces. Thus the strategic application of a developmental approach to HRM can be argued as essential for many of the organizations. References:

1. STRATEGIC HRM PRACTICES AND THEIR IMPACT ON COMPANY PERFORMANCE IN CHINESE ENTERPRISES by SYED AKHTA R , DANIEL Z . D I N G , AND GLORIA L . GE 2. HR strategy and competitive advantage in the service sector by Peter Boxall, University of Auckland Human Resource Management Journal, Vol 13 No 3, 2003, pages 5-20
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3. An Evaluation of Strategic Human Resource Management (SHRM) Practices in Nigerian Universities: The Impact of Ownership Type and Age by Oladipo Jimoh Ayanda Department of Business Administration University of Ilorin, Nigeria and Abdulkadir Danlami Sani Department of Business Administration Ibrahim Badamasi Babangida University, Nigeria

4. HR and new approaches to public sector management: improving HRM capacity by Dr

Stephen Bach Senior Lecturer, The Management Centre, King s College, University of London 5. HUMAN RESOURCE MANAGEMENT, INDUSTRIAL RELATIONS AND ACHIEVING MANAGEMENT OBJECTIVES BY S.R. de Silva Senior Specialist in Employers' Activities East Asia Multidisciplinary Advisory Team I.L.O., Bangkok 6. Barriers to effective HRM by Bob Kane and John Crawford University of Technology, Sydney, Australia, and David Grant King's College, University of London, London, UK 7. PUBLIC SECTOR HUMAN RESOURCE MANAGEMENT IN

BANGLADESH: CHALLENGES AND OPPORTUNITIES LIGHT OF THE WPSR 2005 by MOHAMMAD EHSAN
8. www.citehr.com

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