HRM Transition in Indonesian Companies: Linear and Non-Linear Approaches
Nurianna Thoha, Maureen Bickley and Alma Whiteley
The paper reports on a study of human resource management practices in seven large Indonesian Companies. Current practices reported by company staff were considered against a conceptual framework representing the stages of Personnel Administration, Human Resource Management, and Strategic Human Resource Management. Results provide clear evidence of practices in each stage occurring simultaneously. The data in one company, reported here, challenges the more usual notion of an integrated and linear HRM system and is replaced by a combination of linear and non- linear elements. There was with clear evidence of transition and adaptation.
Field of Research: Human Resource Management, Developing economies
In achieving and maintaining a competitive edge in a rapidly changing world, organizations have to face some many challenges. These include managing growth and change in an increasingly global marketplace (Lajara, Lillo & Sabater, 2002; Lawler III & Mohrman, 2003; Gubman, 2004). Simultaneously, pressures from competitors, shareholders and customers require companies to create services and processes ahead of the competition (Brockbank, 1999). This paper will focus on the challenges Indonesian organizations face in dealing with their people as human resources, particularly in relation to the implementation of strategic human resource management in organisations. Following the 1997 Asian financial crisis, Indonesian companies faced particular challenges as they sought to respond to global markets and sustain their companiesí viability. This paper seeks to identify how some large Indonesian companies are responding to this challenge from a human resource perspective. It seeks to identify the barriers and enablers influencing the transition from personnel administration to strategic human resources management in these large Indonesian companies.
Nurianna Thoha, Graduate School of Business (GSB), Curtin University of Technology email: Nurianna.Thoha@cbs.curtin.edu.au
Dr Maureen Bickley, Graduate School of Business (GSB), Curtin University of Technology email: firstname.lastname@example.org
Prof. Alma Whiteley, Graduate School of Business (GSB), Curtin University of Technology email: email@example.com
2. Literature Review
The challenges faced by Indonesian companies following the financial crisis of 1997 focussed companiesí attention on urgent survival strategies. In the 1990ís literature in human resource management (HRM), the better use of human resources to achieve strategic competitive advantage was a central theme (Beer, 1997; Ehrlich, 1997; Mohrman & Lawler, 1997; Ulrich, 1997).
3. Methodology and Research Design
The research aimed to investigate the activities related to the personnel administration/ human resource management/ strategic human resource management as reported in individual company settings. The study was conducted in seven large Indonesian Companies, focussing on the development of theory through a case study approach (Eisenhardt, 1989; Yin, 1994).
4. Discussion of Findings
Three clear super categories of practice were identified following content analysis processes: PA (Personnel Administration), HRM (Human Resource Management), and SHRM (Strategic Human Resource Management) practices which resonated with the HR literature. PA was defined as the basic administrative activities such as record keeping (attendance, leave records) company training, salary computation and other short term task oriented activities (Whiteley, Cheung and Zhang, 2000). across the whole organisation.
Investigating how large Indonesian companies are performing and reforming human resource practices was made more critical by the Asian financial crisis of 1997. This study gathered qualitative interview data from 88 practitioners within seven large companies to better understand the practices and approaches being used from a practitioner perspective.
Altheide, D., L 1996, Qualitative Media Analysis, Sage Publications, Thousand Oaks, Ca.
Bennington, L. & Habir, A. D. 2003, 'Human resource management in Indonesia', Human Resource Management Review, vol. 13, no. 3, pp. 373-392. Retrieved: 27 April 2005, from Science Direct database.