The Origin Of Human Resource Management Management Essay

The Origin Of Human Resource Management Management Essay Introduction: A single universally acceptable definition of HRM could hardly be found in this universe. Definition varies according to the author and probably they altogether refer organizational management activities in wider sense or in relations to employees welfare , or a strategic approach to people management (1). Human Resource Management provides an international forum for discussion and debate to promote the understanding of the importance of human resource management and people management to business strategy. Human resource management (HRM), as defined by Bratton, J. Gold, J. (2003), is A strategic approach to managing employment relations which emphasizes that leveraging peoples capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices. According to this definition, we can see that human resource management should not merely handle recruitment, pay, and discharging, but also should maximize the use of an organizations human resources in a more strategic level. To describe what the HRM does in the organization, Ulrich, D. Brocklebank, W. (2005) have outlined some of the HRM roles such as employee advocate, human capital developer, functional expert, strategic partner and HR leader etc. New challenges arise even now for the organization, and it is certain that new challenges will never cease to emerge. Therefore, the use of proper Human Resources techniques is a really powerful way for organizations to overcome these challenges, and to improve not only their quantitative goals but also their organizational culture, and their qualitative, cognitive aspects. Take our 20 best people away, and I will tell you that Microsoft would become an unimportant company (Bill Gates, CEO of Microsoft in Fortune, November 25th, 1996). This clarifies that how important is HRM for the development of business. In the global recession period HRM could play an important role in reducing the recession. organizations do not owe their success solely to market realities and sustainable competitive advantages, rather successful companies are those that consider their human capital as their most important asset. HRM and Personnel management: People however often get confused with the term personal management as a HRM. Though they possess similar characteristics they are indifferent to each other. People should be aware that HRM is strategic in nature that is, being concerned with directly assisting an organization to gain sustained competitive advantage. Whereas personnel management is about the maintenance of personnel and administrative systems. HRM is more proactive than Personnel Management. Furthermore, a valuable contribution of HRM is to direct the attention to regarding people as the key resource of organisations and lending the management of personnel increased importance. Personnel management refers to a set of functions, for example, recruitment and selection, often performed effectively but with little relationship between the various activities, or with overall organizational objectives. HRM, in contrast, assumes that all personnel activities are integrated with each other and strategically with organizational objectives (Nankervis, Compton and McCarthy, 1999, pp.4-5). Main differences between Personnel management and HRM: Personnel management is workforce centered, directed mainly at the organizations employees; such as finding and training them, arranging for them to be paid, explaining managements expectations, justifying managements actions etc. While on the other hand, HRM is resource -centered, directed mainly at management, in terms of devolving the responsibility of HRM to line management, management development etc. Personnel Management is basically an operational function, concerned primarily with carrying out the day-today people management activities. While on the other hand, HRM is strategic in nature, that is, being concerned with directly assisting an organization to gain sustained competitive advantage. HRM is more proactive than Personnel Management. Whereas personnel management is about the maintenance of personnel and administrative systems, HRM is about the value of organizational needs, the continual monitoring and adjustment of personnel systems to meet current and future requirements, and the management of change. Strategic HRM: Strategic HRM, as it has come to be known, is concerned with the development and implementation of people; strategies which are integrated with corporate strategies and ensure that the culture, values, structure of the organization, quality, motivation and commitment of its members; contribute fully to the achievement of its goals (Armstrong, 1991; cited in Armstrong and Long, 1994). More and more companies are proactively involving HR in the earliest stages of generating the business plan, rather than just letting HR reacts to it (Dessler, 1997; p. 19). One of the central themes of strategic HRM is its use of the term strategic, which incorporates planning, a congruous approach to the management of HR systems, and seeing employees as a source of competitive advantage (Hendry and Pettigrew, 1986). Strategic HRM seeks to ensure that all business planning processes realize that the ultimate source of value is people, and that the firms distinctive competencies and the types of people who are needed to build and maintain them are identified (Stone, 1995; p. 9-10). Such a view makes HRM an equal partner in the strategic planning process (Dessler, 1997; p. 22). The management of people is not a distinct function but the means by which all business strategies are implemented. (Armstrong and Long, 1994; p. 44). Strategic HRM is a response to change (Ezzamel, 1996: p. 76). By managing this change well, a competitive advantage can be gained through the matching of HRM to business strategy (Kamoche, 1991:p. 3). Effective HR strategies have now become the distinguishing factor among successful organizations and economies (Stone, 1995:p. 10). However, it must be realized that strategic HRM will not guarantee success it is not an instant pudding (Armstrong, 1994: p.54) Hard and Soft Models of HRM: HRM has been frequently described as a concept having two diametrically opposite, though not necessarily irreconcilable, languages: soft and hard. Soft HRM emphasizes communication, motivation and leadership (Storey, 1989: p. 8; Boxall, 1996: p. 59). It is associated with the human relations movement and McGregors Theory Y view of individuals (Truss et al, 1997: p. 54), and it assumes that employees will work most effectively if they are fully committed to the organization (Lundy, 1994; cited in Truss et al, 1997: p. 56). This model emphasizes on the varieties of stakeholders as shareholders,different group of employers, the government and the community. HR strategeis should reflect on all these groups and fuse them into the Human resource strategy and ultimately the business strategy (1). In contrast to this, Hard HRM or the matching model emphasizes the quantitative, calculative and business-strategic aspects of managing the headcounts resource in as rational a way as for any other economic factor (Storey, 1989: p. 8). This form of HRM focuses on the importance of the HR policies being closely linked to the strategic objectives of the organization, resulting in a competitive advantage (Storey and Sisson, 1993; cited in Truss et al, 1997: p. 55). In contrary this model is the process of deployment of human resources to meet business objectives. These two forms grew from roots developed within the infancy stage of HRM. The excellence movement influenced the development of soft HRM, while hard HRM was the result of strategic concern (Kamoche, 1991: p. 4). Critics of Hard and Soft Models of HRM: Ultimately, there is a conflict between elements of self-expression within the soft model, and organizational direction in the hard model. Although both versions have been taken from quite distinct intellectual traditions, they have been amalgamated into one general model that is HRM. The results from a study by Truss et al (1997) found that no single organization adopted either a pure soft or hard approach to human resource management. Though the rhetoric may be the soft version, with its foundation in communication and employee commitment, the reality of organizational goals almost always brings HRM back to the hard model (Truss, ET AL, 1997: p. 70). As a result of such inconsistency between hard and soft HRM, the credibility of HRM will continue to remain a problem (Vaughan, 1994: p. 28). In every approach, there are advantages and disadvantages. The hard approach would mean that rules, regulations and goals are clearly defined and adhered to, however, it would mean that employees will not be involved in decision-making and that may result in a decrease in motivation and commitment. The soft approach, on the other hand, although may increase motivation and commitment since employees are involved in the organization, it may prove to be chaotic if clear-cut rules and goals are not made clear as this may affect the firms profits and goals. HRM and Performance: The different roles exercised by HR managers and employees has resulted positive performance. The involvement of hrm not only increases employers skills,relation but also help in organizational performance ,productivity and growth. The given fig illustrates the relation between hr activities/roles, hrm outcomes and business performance(1). Definition: HR Manager: Human Resource manager is the person who responsible for total management of the same department optimizing the human capital to the greatest possible limit. HR manager practices HRM functions within an organization. In other words he or she is the heart of the organization who keeps the whole system alive by a list of rational activities. A good manager is the intimate friend of all employees with whom all can share business and even individual related matters that affect the performance of the organization in the short or long run. The traditional role: The traditional HR role was mainly recruitment,training and retention based where it is very much narrow and limit the potentials of both HR and employees. The repetition of the same working cycle made them unenthusiastic to a great extent but the matters concerning the employees affecting the productivity have increased the responsibility of HR.A number of study has changed the conventional roles of HR. Nowadays a HR even has to think about psychology of current employees which is the most interesting apart from influencing strategic decisions in broader perspective. High power distance: This is one of the crucial characters of traditional HR functions. In the organizational framework there were huge gaps between employees and HR. Ultimately miscommunication easily happens due to poor understanding between employees and higher officials. Low efficiency: In early days HR used to be less efficient but in coming days new sets of standards are set frequently to be an efficient HR. For example it was unimaginable to think that a manager would consider psychological aspects as well. Administrative confinement: In past days HR used to confine themselves in only administrative works but today they are more strategic and he is responsible for important decisions taken by the organization. He has to think about not only present but also future needs of the employees besides in early days there was much less motivation practice among the HR. New hr/Modern HR practices: The major contributions of HR comes from two sources: Service Delivery Facilitation roles The first one deals with recruitment and retention of staffs and confirm that they have required skills where as the second one concerns about motivation to get the best output from employees. But both these inputs can be at the operational and strategic levels depending upon business objectives. In the protection of organizational values HR has a leading role. One of the major features in new HR managers is adaptability. The role of the HR manager must match the needs of his or her shifting organization. Successful organizations are becoming more adaptable, flexible, quick to change direction, and customer-centered. Within this environment, the HR professional, who is considered necessary by line managers, is a strategic partner, an employee sponsor or advocate and a change mentor. At the same time, especially the HR, still has responsibility for employee benefits administration, often payroll, and employee paperwork, especially in the absence of any other employees .So it suggests that HR must be multi skilled. He should have strong capacity building power having other official skills. Depending on the size of the organization, the HR manager has responsibility for all of the functions that deal with the needs and activities of the organizations people including these areas of responsibility. Recruiting Hiring Training Organization development Understanding cultural diversity Work- life balance communication performance Management/Rewards and recognition Coaching Policy recommendation Salary and benefits Team building Employee relation Leadership Psycho analyst and contract By the start of twenty first century HR need to be aware of risks linked with cost cutting. The British National Health Service has long been criticized for inefficient use of resources, so large numbers of managers and administrators have been recruited to make things more efficient. Many of these new-recruits are HR people who may be perceived by health professionals as creating inefficient and costly controls at the expense of employing more health professionals. We are not suggesting that these criticisms are necessarily justified, but there are undoubtedly situations in which the criticisms are justified.( Dereck Torrington ET AL. 2006, Human resource management, Prentice Hall.) The scope of human resource planning covers not only numbers of people and skills, but also structure, culture, systems and behavior.( Dereck Torrington ET AL. 2006, Human resource management, Prentice Hall.) HR is responsible for making code of conducts or any other disciplinary issues relating to employees and organization being aware of the safety and others needs of the Employees. (With all of this in mind, in Human Resource Management Dave Ulrich, one of the best thinkers and writers in the HR field today, and a professor at the University of Michigan, recommends three additional roles for the HR manager.) HR Role: Business and Strategic Partner In todays organizations, to guarantee their viability and ability to contribute, HR managers need to think of themselves as strategic partners. In this role, the HR person contributes to the development of and the accomplishment of the organization-wide business plan and objectives. The HR business objectives are established to support the attainment of the overall strategic business plan and objectives. The tactical HR representative is deeply knowledgeable about the design of work systems in which people succeed and contribute. This strategic partnership impacts HR services such as the design of work positions; hiring; reward, recognition and strategic pay; performance development and appraisal systems; career and succession planning; and employee development. To be successful business partners, the HR staff members have to think like business people, know finance and accounting, and be accountable and responsible for cost reductions and the measurement of all HR programs and processes. Its not enough to ask for a seat in executive table.HR people will have to prove they are the business minded necessary to sit there. HR Role: Employee Mentoring As an employee sponsor or advocate, the HR manager plays an integral role in organizational success via his knowledge about and advocacy of people. This advocacy includes expertise in how to create a work environment in which people will choose to be motivated, contributing, and happy. Fostering effective methods of goal setting, communication and empowerment through responsibility, builds employee ownership of the organization. The HR professional helps establish the organizational culture and climate in which people have the competency, concern and commitment to serve customers well. In this role, the HR manager provides employee development opportunities, employee assistance programs, gain sharing and profit-sharing strategies, organization development interventions, due process approaches to problem solving and regularly scheduled communication opportunities. HR Role: Change Champion The steady assessment of the effectiveness of the organization results in the need for the HR professional to frequently champion change. Both facts about and the ability to perform successful change strategies make the HR professional exceptionally valued. The HR professional contributes to the organization by constantly assessing the effectiveness of the HR function. Knowing how to link change to the strategic needs of the organization will minimize employee dissatisfaction and resistance to change. He also sponsors change in other departments and in work practices. To promote the overall success of his organization, he champions the identification of the organizational mission, vision, values, goals and action plans. Finally, he helps determine the measures that will tell his organization how well it is succeeding in all of this. Evolution of HR function: The following fig explains the developing stage of Hr functions. Hr when introduced just include the personnel benefits of employees as payrolls,benefits,etc. With the changing environment and changing technology the hr functions get stretched and now Hr not only look about employee security and rights it practices Top level management corresponding to organizational strategy which is termed as Strategic HRM roles. Source:( http://empxtrack.com/blog/wp-content/evolution-of-hr-function.jpg) The benefits of Human Resource Management: There is correlation between the HRM strategy and the overall corporate strategy so ,the Human resource management has its significance in a planning the activities of Management and the activities of resources which involves the implementation of Human resource management in primary activities such as acquisition, development, compensation and maintenance. Where, Acquisition entails the hiring of workers most likely to help an organization achieve its goals. The development function encompasses the training of workers to perform their tasks in accordance with organization strategy. This activity also involves organization efforts to control and change employee behavior via reviews, appraisals, incentives, and discipline. Compensation covers the payment of employees for their services. Maintenance requires structuring labor relations-the interaction between a companys management and its unionized employees-and ensuring compliance with federal and state employment laws. Finally, the evaluation function includes the assessment of a companys HRM policies to determine whether they are effective. Managing the Human resource benefits the organization in a huge way, Such as : Sustaining stable workforce levels during ups and downs in output, which can reduce unnecessary employment costs and liabilities and increase employee morale that would otherwise suffer in the event of lay-offs? Preventing a high turnover rate among younger recruits. Safe Work Environments Reducing problems associated with replacing key decision makers in the event of an unexpected absence. Making it possible for financial resource managers to efficiently plan departmental budgets. Training and development activities benefit the overall organization as well as the individual as more productive. Human resource maintenance activities related to safety and health usually entail compliance with federal laws that protect employees from hazards in the workplace. Helps to simulate, analyze and experiment with proposed organizational changes and previous organizational models. It helps to attract, retain, and motivate the best people. Managing HRM find the best people and then manage and track candidates throughout the entire recruiting process. Sustaining High-Performing Employees Practices of HRM: HR has many roles to be implemented within an organization. Organization smaller or bigger atleast entertain some hr practices. The early records shows there were less practices of hr. The 1998 Workplace Employee Relations Survey(WERS98)(Cully ET all,1999) investigated 16 hr practices which resulted the practices were well observed in British workplaces, where 3 practices (formal disciplinary and grievance procedures, team briefing and performance appraisal) were widely observed. However job security ,participation in problem solving groups etc were in minority. The result showed only one out of five workplaces more than 16 hr practices. On the other hand only 2 percent of workplace didnt practice at all(Guest ET AL,2000). HRM in multinational companies are in a debate. The countrys business policy, political environment etc hinder the practices of HR. different border sets different rules and policy. For ex A us based company doesnt impinge on Canadian firms, similarly UK firm doesnt impinge on the Irish business system(1). The MNS should implement more centralized strategy which is beneficial to their employee. An adoptable employment strategy should exists regardless of institutional character of national business systems where they locate subsidiary operations. Investment in Human capital Due to globalization the world has become a small village and a new economy emerges where it necessitates investment in human capital, knowledge, commitment, enthusiasm of the employees. So the focus has shifted from physical assets to intellectual capital. The emerging new economy has several features: Consists of global work forces with increasing optimization of skills Higher speed of technology and innovation Creation of abundant business opportunities It decentralizes the power It rewards openness People becoming greatest capital. Practical case of HR roles in Finland and abroad: Finland applies a wide variety of hr practices. For ex MC Donald has been using different practices as reward through base pay. Employee holiday travel, pension,training,bonuses,etc are other roles widely practiced in Finland. For example recently an it firm in Finland was offering an programming specialist job, where they were training selected candidates for the first 9 month. This is a training based pay practices of HR functions which is vigorously applied from a simple cleaning job to an highly skilled job. Similarly Yahoo initiates performance related pay (PRP) during recession only among the 5% officials who were in top levels as well to reduce the dependency upon the lower employees and thus it cut the cost though unfortunately many had to leave the job. Nokia is also practising Hr in a wider sense. The development of human resources is a business proposition, which endeavors to delight its costumers, motivates its employees and increase the agility and flexibility of the management to address specific HR needs. Furthermore, The HR manager is challenged with the task of providing skills,cultures,atmosphere and processes necessary fore- knowledge and capabilities. Nokia beleieves in the importance of individual either its an individual,employer or an stakeholders. Critiques: The HR functions have been changing with the time. Some author argues is it really necessary for the changes in Hr function. What else matter in organizations rather than employees performance. If an employee is faithful to organization , he or she devotes fully to organization well being. However bonus or certain rewards are acceptable but does an employee really needs to be motivated by HR specialist if organization is treating well? Has the new changes benefited to the employers,stakeholders and ultimately the organizations? The answer is surely yes. Even though the organizations are practicing HR roles why the state/firm faces strikes of workers and globally increasing trade unions which interfere in employee and employer relations. There are many unanswered questions and a debate too. On the other hand many consider steps like performance related pay PRP is a capitalist approach which may breaking the unions and inter personal relationship though there is no doubt the whole tasks of HR has become more challenging with the pace of globalization. Summary: Organizations today recognize that human resource (HR) is their key asset to gain an edge over competition and achieving organizational success and effectiveness. Thus, human resource management (HRM) has now become an emerging field in the business world and a key ingredient for staying abreast of competition. Within most large organizations, HRM has taken on much the same role as Personnel Management, but with some additions, particularly in regard to business strategy. However, HRM essentially involves the policies and practices one need to carry out the human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising (Dessler, 1997; p. 2). This issue of integration with the general management is an important one for HRM. There is already some evidence to indicate that when senior management manages HR issues they are taken more seriously. A properly functioning HRM system is an invisible asset that creates value and involves the acquisition, development, reward and motivation, maintenance and departure of an organizations human capital. On the contrary, if hr managers should try to implement a strategy which is fruitful and acceptable to both top level management and employers working for it. HR managers should frequently deal with the company strategy, progress and its treatment to the workers. Hr managers should play as a driver who conquers both passengers(employee) and employers(bus) to have a smooth drive.