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1. The Historical Evolution of HRM

 Managing people is a 5,000 years challenge

 The modern concern with managing people comes from the Industrial
Revolution
 Industrial Revolution caused a massive shift away from farming and
small-scale household production to industrial work and factories.
 The changes and implications for workers and managers are the same
 Industrialists displaced household as controller of the production
process

HOUSEHOLD INDUSTRIALISTS
Autonomy No autonomy
Self-management No self-management
Flexible work hours Inflexible work hours
Work at home in small groups Commute to large noisy
workplace
Household income Individual income

 Early industrialists believe they need to impose strict discipline, close

monitorization- for people who are not used to work for others in a
factory.
 The Foreman(supervisor) has unquestioned authority; to hire, fire,
discipline, assign work, work hours and motivate workers.
 Motivate workers- strict monitorization and drive system (threats,
cajoling, profanity)
 There was effort to systemize management; as production process
getting more complicated and factories increase in size
 Such effort was the introduction of scientific management
 Scientific Management
 Fredrick Winslow Taylor

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 ‘one best way’ to do every job

 Break down job into small, standardized, repetitive tasks that
any skilled workers manage to do.
 Managers are the one to determine on how to break the jobs
down; seen as the one who had all the knowledge

 Another effort is to apply psychological principles in managing workers

 Not only technical and economic condition but also human
conditions need to be right jua
 Need to appreciate that workers have different skills, levels of
cognitive ability and appreciate group dynamics
 Job satisfaction/ Employee engagement and other attitudes
is IMPORTANT to get the work done and productivity of
workers.

Psychology and
Human Relations

-workers have
psychological needs

Taylorism

-Managers-knowledgeable,

-Workers-want income in efficiently

Authoritarian Drive System / Foreman

-owners are industrious, ambitious, thrifty, sober not workers

Slaves & Conscript

-Absolute superiority and divine rights

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Evolution of HRM= Evolution of IDEAS, not just practices

How does workers obtain efficiency to gain income?
 By Managers- know it all

2.Definitions of HRM

 This is a philosophy of people management based on the belief that HR

are uniquely important to sustain business success. An organization
gains competitive advantage by using its people effectively, drawing
on their expertise to meet clearly defined objectives, HRM is aimed at
recruiting capable, flexible and committed people, managing and
rewarding their performance and developing key competencies.
(Price, 2011, p.29)
 HRM is a distinctive approach to employment management which
seeks to achieve competitive advantage through strategic deployment
of a highly committed and capable workforce, using integrated array
of cultural, structural and personal techniques. (Storey, 1995: 5)

2.1 HRM VS PERSONNEL MANAGEMENT

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3.Approaches and key features to study HRM

Key Features
Beliefs and assumptions
• That it is the human resource which gives competitive edge.
• That the aim should not be mere compliance with rules, but employee
commitment.
• That therefore employees should, for example, be very carefully selected and
developed.
2 Strategic qualities
• Because of the above factors, HR decisions are of strategic importance.
• Top management involvement is necessary.
• HR policies should be integrated into the business strategy – stemming from it
and even contributing to it.
3 Critical roles of managers
• Because HR practice is critical to the core activities of the business, it is too
important to be left to personnel specialists alone.
• Line managers are (or need to be) closely involved as both deliverers and
drivers of the HR policies.
• Much greater attention is paid to the management of managers themselves.
4 Key levers
• Managing culture is more important than managing procedures and systems.
• Integrated action on selection, communication, training, reward and
development.
• Restructuring and job redesign to allow devolved responsibility and
empowerment

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Approaches

APPROACH BEIEFS AND STRATEGIC ROLE LINE KEY DRIVERS

ASSUMPTIONS QUALITIES MANAGERS
Matching (hard) Compliance Calculative Rule bound Product demand
efficiency
Models (soft) Nurturing People-supportive Coaching Training &
commitment policies development
Organizational Performance- Bundles of Strategic and Internal and external
performance enhancing complementary HR measured fit (integration)
policies KPIs
Radical (critical) Exploitation of Global business Authority Peer surveillance
management people at work model (capitalist) agents of Control; of labor
sources of power owners process
Employee-centric Critical of cause- Balance opposing Significant Integration of
approach and effect interests and active individual and
assumptions agents collective orientated
processes

Matching HR Models
Hard HRM

-Early matching model was known as Michigan School of HRM by Fombrun et

al(1984)-regarded as ‘hard’ HRM.

-Approach is to stress a very tight calculative (hard) fit between business

needs and the way people managed.
-It is to ensure optimum employee effort and performance.
-Measured by strict rules to select, reward, train and/ or replace workers

-Views employees as another factor of production to be hired and fired on

purely efficiency grounds.
Soft HRM
-By Harvard Business School known as ‘soft’ variant of HRM

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-Beer et al(1985): starting point- consider stakeholder interests (employee

well-being also included) related to business and context factor.
-Stress the word ‘human’ rather than ‘resource’

Organizational Performance

-Innovative workplace practices can increase performance through systems

related practices;

 High-performance work systems (HPWS)

 High-commitment work system (HCWS)
 High-involvement work system (HIWS)
 Best practice
 Collections of HR practices-HR bundles
-However, findings are inconclusive, more easily prescribed than achieved
(Guthrie et al., 2011; Kaufman, 2010a; Lewin, 2011; Heffernan & Dundon, 2016)

Radical/ Critical Management

Employment relationship can be conceptualized into 3 main frames:

 Mainstream Unitarist HRM

-View: Staffs and Management shares common goals- loyalty towards
organization
-Enhance performance of firm: Good for employees and society
-Unitary ideology was not a ‘realistic ideology’: denies legitimacy of
conflict

 Pluralist HRM
-View: Recognizes different interests within sub-groups-can cause
conflicts, primarily between management and trade union
-Focuses on collective bargaining and negotiation
-Employee-centric approach: look at how employees experiences
work and react to management policy and action.

 Critical/ Radical HRM

-View: Suggest that employs and employers are bound to have a
conflict due to the result of capitalism.

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Engenders discrimination, unfairness and not universal performance

enhancing outcomes.

4.The Changing context of work

-Things are happening in employment that are neither a cause nor an effect
of HRM but which have an impact on it.

-Factors for changing context of work:

 Intensification of work
 choices of work location provided by technology
 the diversification nature of a society in which many are idle
 Impoverished while others are seriously over-worked
 Managing in ‘uncharted territory’
 4Fs: Feminization, Flexibilization, Fragmentation and Financialization.
 Corporate governance

-Change was driven by broader organizational initiatives

-Organizations changes
 To meet some of the challenges posed by intense competition,
organizations have been downsized, delayered and decentralized
(Nolan, 2011)
 are now less hierarchical in nature-have more flexible forms
 subjected to continuing waves of organizational change programmes
such as total quality management, business process re-engineering,
performance management, modernization, lean production,
outsourcing and off-shoring of core activities-resulted in seemingly
relentless pressure on employees and line managers to push through
culture change initiatives (Taylor et al, 2014)
 Change to employee structures- gender related, working hours,
working environment and contractual changes
 ‘Marketisation’ of private/ public sector
 Off-shoring, delayering, outsourcing and precarious work

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-According to Rubery, his charts showed four specific changes by almost

insurmountable (unstoppable) global forces known as 4Fs: Feminization,
Flexibilization, Fragmentation and Financialization.

Type of changes Definition

Feminization charts changes in labor market
demography as to ‘who’ is
employed.

Flexibilization changes to the ‘way’ people work,

with attendant implications for HRM.

Functional flexibility
-the way workers are managed
using multi-skilling and technology,
etc

Numerical flexibility
-how employees are employed
using causal/ temporary contracts

Spatial flexibility
-where they work

Fragmentation The nature of the employee-

employer relationship and who is
managing whom.
Financialization About changes to the actual
conduct and meaning of work.

5.What is performance?
-Dyer and Reeves (1995) posited four levels of outcomes (Boselie, van der wiele, 2002;
Pauwe, Boselie, 2005)
 HR related outcomes (affected, cognitive and behavior)
 Organizational outcomes (productivity, quality, efficiency)
 Financial outcomes (profit, sales)
 Market based outcomes (market value)

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-The categorization of outcomes has a significance importance in exploring HRM-

Performance link. In which the relevance lies in 2 aspects

 Some outcomes, i.e HR outcomes are more proximal to HR practices than

others.
 The impact that HR practices have on more distal outcomes are through the
impact on more proximal outcomes.

-Critiques on the HRM-performance link studies:

 It is misleading to assume that simply because HR practices are present they

will be implemented as intended.
 Measures which use profit or shareholder value are too remote from the
practice of people management to be useful’ (Purcell et al, 2003). Put simply,
so many variables and events, both internal and external, affect organisations
that this direct linkage strains credibility
 Research on HR and performance has been based on a narrow-minded defi
nition of performance which involves the use of limited analytical frameworks
based on simple input/output reasoning. So, there is a substantial negligence

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of the process itself, the actors and stakeholders involved, the administrative
heritage and institutional values.
 Another problem is the assumption some people make that correlations
indicate causality – if variable A is associated with variable B then A has caused
B. It might, but again it might not. This is linked to the issue of ‘reversed
causality’ which is the assumption, as Purcell et al (2003) put it, ‘that more HR
practices leads to higher economic return when it just as possible that it is
successful firms that can afford more extensive and sophisticated HRM
practices’.

5.How does HRM make that impact?

Strategic Human Resource Management

 Wright and Snell (1989) suggest that strategic HRM deals with those
HRM activities used to support the firm’s competitive strategy.
 Armstrong and Long (1994) support the view that strategic HRM
refers to the overall direction the organization wishes to pursue in
achieving its objective through people.
 Strategic HRM provides a theoretical framework as the road map
for achieving particular organizational outcomes.
 Two theoretical frameworks have dominated the field of strategic
HRM:
 the resource-based view
 the integration approaches

Resource-based view (RBV)

- Takes an ‘inside-out’ view or firm-specific perspective on why

organizations succeed or fail in the market place (Barney, 1991)

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- An approach to achieving competitive advantage(CA) by using its

resources efficiently.
- Resources to become competitive advantage must be rare,
valuable, inimitable and non-substitutable.
- The HR practices of organization can lead to CA by developing
unique and valuable human capital pool. Within this theory we can
distinguish 3 possible approaches:
o High-performance management:

-Development of a number of interrelated HRM processes that

together improve organizational performance (Stevens, 1998)
o High-commitment management

-Development of mutual commitment within organization,

based on high levels of trust, that eventually influence
performance (Wood, 1996)
o High-involvement management

-Treatment of employees as partners in the organization

through communication and involvement ensuring that high
performance will ultimately be achieved (Pil and MacDuffi e,
1996)

Integration Approach

• The integration approach to SHRM focuses more significantly on the

link between HRM strategy formulation and performance.

• It emphasizes the alignment of HR policies and practices within the

HRM area and with other strategies across the organization outside
the area of HRM.

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• Within this approach we distinguish three possible foci for

integration:

(i) Horizontal integration

(ii) vertical integration

(iii) combined integration.

TYPE ALTERNATIVE AIM ASSUMPTIONS

OF NAME
INTEGRATION

HORIZONTAL Universalistic Developing a range of -A linear relationship exists

Model interconnected and mutually between HR practices and
reinforcing HR practices. business performance;
Underlying this assertion is
the premise that there exists -Best HR practices are
a set of HR best practices universally applicable (best
that fit together and practice model)
mutually reinforce each
other. -Internal fit is the key
concept.

VERTICAL -Contingency To develop a range of HR - A non-linear relationship

Model practices that fit the exists between HR
-External Fit business’s strategies outside practices and business
-Best Fit the area of HRM. The logic performance;
-Strategic fit here is that performance will

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be improved when the right -The impact of the HR

fit, or match, between practices on business
business strategy and HR performance is different
practices is achieved. for the different levels of
the critical contingency
variable;
-External fit is the key
concept.

COMBINED Configurational Combining internal and -A non-linear relationship

Model external fit it is called exists between
combined integration. The configurations of HR
logic here is that different practices and business
combinations of HR practices performance
will lead to higher business -Multiple unique
performance, depending on configurations of HR
the organizational context practices result in maximal
(MacDuffi e, 1995). business performance,
• referring to the concept of
equilinality
-Internal and External fit
are both key concept

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Differences between IHRM and Domestic HRM

-Location in which HRM is performed

-Cultural and Institutional differences

-Geographical dispersion

-Differences in time zones

Group of employees involved falls under 3 categories

 HCNs-Host country nationals/locals

 PCNs-Parent-country nationals (Expatriates mostly)
 TCNs- Third-country nationals-neither locals/expatriates but citizen
of a third country.

Distinguishing Comparative and IHRM

-both explains the differences in HR practices with reference to national

culture

Comparative HRM International HRM

Concerned with describing, Concern to issues with
comparing and analyzing HRM management of employees across
systems in various countries and national borders in multinational
regions. corporations (MNCs)
Questions on why and to what Questions about the extent to
extend differences in HR practices which multinational companies
across countries reproduce similar sets of HR
practices across their subsidiaries
-Obtain insights from comparative

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How do we best understand differences between countries and regions?

-Globalization force countries, sector, firms towards CONVERGENCE in

structure, culture, pattern of behavior and HRM policies and practices.

-National differences remain as pervasive in an organizational-forms,

managerial practice and HRM system.

-Two perspective which contributes to DIVERGENCE:

 Culturalist approach
 Institutionalist approaches

Culturalist Approach

HOFSTEDE (2001)

Emphasizes that culture is best seen as:

- The set of commonly held and relatively stable beliefs, attitudes and
values that exists within an organization (corporate culture)/ society
(national/societal culture)
- -Influencing the way, it undertakes and implements its decision-
making, resolves problems and in general, behaves.

National culture (MIB) influence organizational culture by:

- Dressing codes

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Hofstede 5 dimension of cultural differences

 Individualism-collectivism
 Uncertainty avoidance -the extent to which a culture values
predictability
 Power distance-strength of social hierarchy
 Masculinity-Femininity -the division of emotional roles between
men and women
 Long-term orientation -the choice of focus for people’s efforts: the
future or the present).

Hofstede’s study is subject to a number of criticisms:

 Fails to explain heterogeneity within a country

 Fails to explore relationship between cultural values and structural
institutional characteristics
 Use of attitude survey questionnaire
 Limited to a single organization

It is crucial that cultural theories are taken in their context and not applied to other le
provide a complete analysis of national differences, but may complement other kinds

Institutional approach

• Institutional perspectives see firms and institutions as socially

constituted, and reflecting national distinctiveness: dominant
national institutions tend to be integrated and mutually reinforcing.

• National institutional arrangements tend to be robust,

demonstrating significant inertia in the face of pressures for change.

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• Here we will focus on one main institutionalist theory - Hall and

Soskice’s Varieties of Capitalism. This sets out two distinct types of
market economies that implement capitalism:

• liberal market economies (LME) (e.g., U.S., U.K., Canada,

Australia, New Zealand, Ireland) and

• coordinated market economies (CME) (e.g. Germany,

Japan, Sweden, Austria).

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