Understanding the Different Approaches to Strategic Human Resource Management (SHRM)

Strategic Human Resource Management (SHRM) isn’t just another corporate buzzword. It’s the framework that decides whether a company’s people actually drive its business forward or merely fill seats on an organisational chart. Since the late 1970s, scholars have debated a fundamental question: is there one best way to manage people, or should HR practices shape-shift based on what the business needs? Out of this debate emerged three dominant approaches – universalistic, contingency, and configurational – along with an influential model by Wright and Snell that tried to reconcile the tension between stability and adaptability. Let’s unpack each of them.

Why SHRM approaches matter in the first place 🔗

Before diving into the frameworks, it helps to understand what’s at stake. SHRM is essentially the discipline of linking HR policies and practices to the organisation’s strategic objectives. The foundational work of Delery and Doty (1996) argued that the SHRM literature draws on three dominant modes of theorising, and that each perspective can explain significant levels of variation in firm performance. In simpler words, how you recruit, train, compensate, and retain employees directly influences whether your company thrives or struggles.

The three classical approaches differ on one core question: Are good HR practices universal, or must they fit the context? The answers have shaped boardroom decisions everywhere – from family-owned manufacturing units in Coimbatore to IT majors headquartered in Bengaluru.

The universalistic approach: the “best practices” school 🔗

The universalistic approach, often called the “best practices” or “high-performance work systems” approach, argues that certain HR practices work well regardless of industry, strategy, or size. According to this view, adopting a defined bundle of high-performance practices will deliver superior outcomes almost anywhere. The universalistic perspective proposes that a bundle of high-performance best practices should be adopted independent of organisational strategy.

What these “best practices” usually include 🔗

Scholars have identified several practices that consistently show up in the universalistic toolkit: rigorous selection processes, extensive training and development, performance-based compensation, employment security, information sharing, reduced status distinctions, and self-managed teams. The argument is simple – these practices raise employee skills, motivation, and opportunity to contribute, which then translates into better business performance.

Strengths and limitations 🔗

The appeal is obvious. Universalism gives HR managers a clear playbook. For organisations that are still building their HR muscle – say, a fast-growing manufacturing SME in Pune – implementing proven practices is far less risky than inventing systems from scratch. However, critics argue that copying what worked at Infosys or Tata may not suit a small textile exporter in Tirupur. Context, culture, and strategy get dismissed too easily under this view.

The contingency approach: fit before form 🔗

The contingency approach takes the opposite stance. It argues that HR practices must be aligned with the organisation’s strategy to produce results. What works for a cost-leader won’t necessarily work for a differentiator or innovator. As one comparative study explains, the contingency approach emphasises the need for the best fit between HRM strategies and organisational strategies.

Think of two companies in the same industry. A budget airline competes on low fares, so it needs HR practices that control labour cost, standardise roles, and maximise productivity per employee. A premium carrier competes on service quality, which calls for heavy investment in training, empowerment, and customer-interaction skills. The contingency view insists that both can be right – as long as their HR systems match their strategic positioning.

Vertical fit and its significance 🔗

The contingency approach places huge weight on what researchers call vertical fit – the alignment between HR practices and business strategy. Rather than mechanically adopting best practices, this perspective argues that business strategy should precede and be tightly linked to HR strategy. If a company shifts from cost leadership to innovation-led growth, its compensation, recruitment, and performance management must shift accordingly.

Where contingency thinking falls short 🔗

The approach’s weakness lies in its narrow lens. By focusing heavily on strategy-HR alignment, it can overlook the internal consistency between different HR practices. You might align recruitment perfectly with a growth strategy but have performance appraisals that reward the wrong behaviours. That’s where the third approach steps in.

The configurational approach: bundles that work together 🔗

The configurational approach is the most sophisticated of the three. It argues that HR practices shouldn’t be analysed in isolation – they create value through synergistic bundles that work together coherently. This approach also takes the contingency idea further by insisting on both internal fit (among HR practices) and external fit (between HR and strategy) simultaneously.

According to integrative reviews of SHRM perspectives, the configurational approach classifies HR systems into patterns or ideal types that each produce distinct performance outcomes. Two organisations can achieve equally strong results through very different HR configurations – a concept researchers call equifinality.

The idea of HR bundles 🔗

Imagine a pharmaceutical company that invests heavily in R&D. Its configurational HR system might bundle together selective hiring of PhD talent, generous training budgets, long-term incentive plans tied to patents, flexible project structures, and collaborative performance reviews. Remove any one element and the whole system weakens. That interdependence is the heart of the configurational idea.

Why it matters for modern organisations 🔗

Configurational thinking resonates with today’s complex workplaces. Tech firms, for instance, don’t just need good recruiters – they need recruitment, onboarding, learning, rewards, and culture practices that reinforce each other. The configurational approach integrates internal and external organisational factors into a coherent pattern of management practices, and it’s increasingly seen as the most relevant for knowledge-intensive sectors.

Wright and Snell’s model: balancing fit with flexibility 🔗

The three approaches above share one quiet assumption – that organisations operate in predictable environments where “fit” can be engineered and sustained. Reality, of course, is messier. Markets shift, technologies disrupt, and strategies pivot. That’s the gap Patrick Wright and Scott Snell’s 1998 framework tried to address.

Published in the Academy of Management Review, their paper “Toward a Unifying Framework for Exploring Fit and Flexibility in Strategic Human Resource Management” argued that organisations need both tight strategic alignment and the capacity to adapt quickly when that strategy changes. They defined HR flexibility as an organisation-level construct indicating a firm’s ability to reconfigure resources quickly to meet new strategic challenges.

Resource flexibility vs coordination flexibility 🔗

Wright and Snell distinguished between two forms of flexibility. Resource flexibility refers to how easily HR resources – people, skills, practices – can be redeployed to serve different purposes. A multi-skilled workforce where employees can rotate across tasks demonstrates resource flexibility. Coordination flexibility, on the other hand, is the speed and ease with which the firm can redeploy those resources when needed. Fast decision-making, decentralised authority, and lean approval chains all support coordination flexibility.

Three components of HR flexibility 🔗

According to researchers building on Wright and Snell’s framework, functional flexibility has three interconnected dimensions – HR practices flexibility, employee skills flexibility, and employee behaviours flexibility. The idea is that a firm’s ability to adapt depends on whether its HR activities, the skill portfolios of its people, and the range of workplace behaviours they can exhibit are all adaptable.

Why flexibility complements fit rather than replacing it 🔗

A common misreading is that flexibility somehow contradicts fit. Wright and Snell argued the opposite – organisations that achieve fit but lack flexibility end up perfectly aligned with yesterday’s strategy. On the other hand, pure flexibility without fit leads to drift and lost focus. The unifying framework’s real contribution was insisting that modern SHRM must build systems with stable, well-aligned cores and adaptable peripheries. A good analogy – the spine stays firm while the limbs move freely.

Comparing the approaches at a glance 🔗

Each approach offers a different lens on the same problem. The universalistic view emphasises best practices that travel well across organisations. The contingency view focuses on strategic alignment as the key to performance. The configurational view stresses synergistic bundles and internal coherence. Wright and Snell’s model adds the dimension of adaptive capacity, recognising that environments don’t stand still. These aren’t competing frameworks so much as progressively richer lenses – each building on and extending the previous one.

Practical relevance for organisations today 🔗

In practice, organisations rarely pick one approach and stick with it rigidly. A manufacturing firm might lean on universalistic best practices for shop-floor safety training while using contingency logic to design sales compensation, configurational thinking to build a leadership development system, and Wright and Snell’s framework to ensure it can pivot during economic downturns. The art of SHRM lies in knowing which lens to apply when – and recognising that the answer usually involves combining perspectives rather than choosing among them.

For HR practitioners operating in rapidly changing economies, the key takeaway from decades of SHRM research is that context still rules. Global best practices give you a starting point, but your sector, strategy, life-stage, and workforce determine the actual shape of your HR system. And in a world of AI disruption, changing labour laws, and evolving employee expectations, building flexibility into that system isn’t optional – it’s existential.

What do you think? Which approach do you believe fits the Indian workplace best – the universalistic promise of global best practices, or a configurational system custom-built for local strategy and culture? And how prepared is your organisation to reconfigure its HR architecture when the next big disruption hits?

References

1. https://journals.aom.org/doi/10.5465/256713
2. https://www.academia.edu/28873537/Universalistic_Contingency_and_Configurational_Approaches_Universalistic_Contingency_And_Configurational_Approaches_Business_Essay
3. https://journals.sagepub.com/doi/10.1177/23970022241231538
4. https://www.tandfonline.com/doi/abs/10.1080/09585190500082519
5. https://www.proquest.com/openview/c08458c9b949c74ecd92db8790b79879/1?cbl=37198&pq-origsite=gscholar
6. https://cebma.org/assets/Uploads/Wright-Ulrich-A-Road-Well-Travelled.pdf
7. https://www.researchgate.net/publication/259745808_Functional_Flexibility_in_Human_Resource_Management_Systems_Conceptualization_and_Measurement