Five-factors framework

The most important factor about human resources policies is how do they fit together? As a system, HR policies sometimes work together and sometimes clashes. They are embedded in the broader organization of the company including its processes, its stakeholders and society as a whole. The "fit" of the policies can, therefore, be regarded internally and also in the broader context of what the company is doing.

Because HR practices are supposed to fit together, imitating other companies' policies is not a guaranteed success. You can easily copy perks that are not aligned with your internal system and create misalignment. The important factor is to understand how the system works together and what could work in your organization. Derived from Porter's five forces, HR uses the five factors framework to asses a company's HR system : (1) the strategy, (2) the workforce, (3) the environment, (4) the organization culture, and (5) the technology.

The strategy
See Strategy for more information.

The strategy part of the framework is supposed to help you understand what are the key competencies of an organization. What can it do better than its competitors? Are they focused on customer services, innovations, quality? How do you plan to sustain this advantage? You need to know where the company is growing and how it wants to get there to understand how your HR system should adapt to it.

The environment (external forces)
The environment part is about the social, political, legal and economic aspects of a business. In terms of social aspects, what in the expected role of the organization? what sorts of behaviors are encouraged or frowned upon?

In terms of the political environment, how is the union power balance? What is the company's relationship with politics? Close to political is the legal environment, what are workers' rights? Is there any forced distinction between workers? what is illegal? Finally, in term of economics, we want to look at the conditions inside the labor market and the economic pressures that the organisation is facing.

Culture
Culture influence strategy and strategy influence culture. Marissa Mayer, when she arrived at Yahoo!, killed the "work from hom" to change the individualistic culture. She stated that people are more productive when they are alone but more creative and productive when they are together.

Work Organization