You are on page 1of 29

Cardiff School of Management

Human Resource Management

MBA 2013

The Nature of HRM

The objectives of this chapter are to: 1. Define HRM 2. State and discuss the 4 key objectives of HRM 3. Review the evolution of HRM function throughout

4.To understand the link between HRM and the achievement of organizational effectiveness 5. To discuss key environmental developments 6.To explain Best practice & Best fit approaches to

Defining HRM
HRM is used in two different ways: 1. It is used generally to describe the body of

management activities covered in books . It is more of a modern name of what has long been labelled Personnel Management

1. It is more than an updating of the label. It is rather a distinctive approach towards carrying out people oriented organizational activities held to serve the modern business more effectively

HRM 1: The Generic Term

The role of HRM is defined in terms of the 4 key
Obj that form the foundation of all HR activity: 1. Staffing Objectives:
To ensure that the business is appropriately staffed and able to draw on the human resources it needs

Designing org struct& selecting the right talent Identifying different types of different groups of employment

contracts for

Developping offer packages that attract the right

HRM1: The Generic Term

2. Performance objectives:

HR managers seek to ensure that people are well motivated and committed so as to maximize their performance in different roles, that is by:

Investing in training & development

Designing reward systems to maximize efforts

around the performance targets

Assisting in disciplining employees where

performance is unsatisfactory

HRM 1: The Generic Term

3. Change Management Objectives

HRM plays a central role in managing change whether it be structural requiring reorganization of activities or Cultural intended to alter attitudes to fit employees in the organizational culture and norms Key activities include: Recruitment and development of people with the

right leadership skills to drive the change

Hiring Change Agents to help acceptance of change &construction of adequate reward systems

HRM 1: The Generic Term

4. Administration objectives:

It is meant to underpin the achievement of the

other forms of objectives

It is simply carried out to facilitate an organizations smooth running in order to

maintain accurate data on individual employees and to ensure compliance with the law (Pay, Leave, Social Security, Insurance, Pension, etc)
Achieving excellence in the delivery of admin tasks helps the HR function gain& maintain the credibility & respect of managers

HRM 1: The Generic Term

Delivering HRM objectives:
The larger the organization, the more scope there is to employ people to HR Specialists to specialize in a particular area of HRM: Employee-Employer relations, training & development, Recruitment & Selection, Health safety & welfare, compensation

benefits etc

HR Generalists carry out the range of HR activities and seek to achieve all the objectives discussed above.


In a larger businesses, they either look after personnel matters in a particular division, or employed at a senior level to develop policy & take

responsibility for HR issues across all the organization

HR Admin is either outsourced to specialist service

providers, or a shared service model(centralized function) is established, apart from HR, to carry out the admin tasks
Smaller organizations cant afford to have HR at all. They use consultants instead or assign HR tasks to Finance/accounting departments

HRM 2: A Distinctive Approach to the Management of People

Personnel managers seek to understand and articulate the aspirations of the employees

They are in between management and the

employee, mediating the needs of each to the other

Personnel management is workforce centered and focuses on the supply of employees

HRM2 : A Distinctive Approach to the Management of People

HRM is identified with management interests and needs for HR It is focused on the demand for resources and is resource centered

There is a greater emphasis on planning, monitoring, control rather than meditation.

Problem solving is undertaken with other members of management than directly with employees or their representatives.

HRM Mark2: A Distinctive Approach to the Management of People

Legge concludes there are slight but important difference between PM&HRM, such as: 1.

HRM focuses more on what is done to managers


There is a more proactive role to play for line



There is a top management responsibility for

managing culture

The Evolution of Personnel &HRM

1. Social Justice:
PM originated in the 19th century in response to social reformers criticism of free enterprise

exploitation of workers by factors owners

The first PMs were appointed to ameliorate the lot of workers& to reduce the organizational distance between decision makers and those implementing the decisions In the late 19th and early 20th , welfare officers were appointed by large employers to manage new initiatives to make life less harsh for their

The Evolution of Personnel &HRM

2. Human Bureaucracy: The 2nd phase marked a beginning of a move a

way from a sole focus on welfare towards the meeting of various other organizational objectives
PM began to gain responsibilities in the areas of recruitment, training, and organizational design
Personnel specialists started to work out how

organizational structures could be designed and labour deployed to maximize efficiency & minimize the industrial conflicts and foster

The Evolution of Personnel &HRM

3. Negotiated consent:

In period of full employment following the

second World War, labour became a scarce resource, which led to a growth in trade union membership
In the 1940, employers were placed under

statutory duty to negotiate with unions representing employees

The government encouraged the appointment

of personnel officers and set up the first

The Evolution of Personnel &HRM



The late 1960s saw a switch in focus among PS

away from dealing with the rank and file employee on behalf of management towards dealing with management itself and integration of management activity
The phase was marked by development of

career paths and of opportunities within organizations for personal growth






The Evolution of Personnel &HRM

5. HRM already discussed
6. A New HR? Beginning of a new sixth stage in the evolution of personnel/HR work characterized by(Bach):
A strong tendency for issues relating to legal compliance Increased prevalence of multi-employers, instead of one single employer

The Evolution of Personnel &HRM

A move away in HR from the management of jobs to the management of people by developing employment strategies that differ for different groups of employees(Lepak & Snell)
A move away from an expectation that staff will demonstrate commitment to a set of corporate

Values and towards a philosophy which is far more customer focused( customers are defined as the ultimate employers and employees are empowered to meet their requirements

The Evolution of Personnel &HRM

Staff is viewed as an internal customer that they aim to satisfy

The new HR understands that the employment

relationship is not a transactional one(where money is earned in exchange for carrying out a set of duties), but a relational one that involves emotional attachments with colleagues, customers and organizations as a whole.

HRM & The Achievement of Organizational Effectiveness

How what happens in the HR impacts the organizations ability to meet its objectives Organizational effectiveness in the public& voluntary sectors is defined in terms of meeting a

service need as cost efficiently as possible and to the highest available standards of quality
In the private sector, it is about the achievement&

maintenance of competitive advantage

It varies according to the type and situation of organization

HRM & The Achievement of Organizational Effectiveness

The contribution of HR to gaining competitive

advantage involves achieving the objectives of an organization in the area of people management more efficiently and effectively than competitors
These objectives can be achieved by mobilizing a workforce, maximizing its performance, managing change effectively and striving to achieve excellence in administration

HRM & The Achievement of Organizational Effectiveness

Attracting, engaging, rewarding, developing and retaining people effectively is a major role for HR

to play in the achievement of organizational effectiveness

HR contributes also significantly to develop a positive long term reputation, that is by: fostering an understanding and commitment to ethical conduct on the part of managers and staff setting a good example of strong team and good working conditions

Key Environmental Developments

We are entering the era of hyper-competitive pressures driven by two major developments:

1. Moves towards the globalization of economic activity-more intense international competition 2. Technology moves forward at an ever accelerating pace. Developments in information technology, energy production, chemical engineering, transportation, biotechnology revolutionize the way that many industries operate

Key Environmental developments

HR managers have to develop practices which help enhance the competitive advantage of an organization Capacity for organizational flexibility has become central to the achievement of competitive advantage
HR Managers have to learn how to manage an international workforce effectively & how to attract , motivate & retain people with scare skills if the

organization is to deploy evolving technologies

Key Environmental Developments


following important:




1. Labour Market Trends: this is significant in

terms of the number of people & skills available and in terms of attitudes towards work and the workplace
In a tight labour market, employees have

more choice about where and when they work.

Reduced interest in joining unions with

Key Environmental developments 2. Employment regulations:

Management of different areas of employment

relationships requires a good understanding of the legal aspect in order to ensure compliance with the local employment regulations 3. Psychological Contract:
Change from Old Psychological to a New

Psychological contract involves employers giving less security and receiving less loyalty from employees in return

Best Practice Vs Best Fit

Best Practice:
Adherents of Best Practice Approach argue that there are key HR practices that helps an organization in achieving competitive advantage irrespective of the particular product market strategy if the right policies and practices are

These include the use of more advanced selection methods, a serious commitment to employee

involvement, substantial investment in trai&dev &the use of individualized reward systems& harmonized terms and conditions of employment

Best Practice Vs Best Fit

Best Fit:
It does not believe in the existence of universal solutions It advocates the HR practices and policies that fit and are thus appropriate to the situation of individual employers The size of the establishment, the dominant product marketing strategy being pursued and the nature of the labor markets in which the organization competes are key variables to determine the HR best fit practice.

The Future of Work

Influential writers argued that the product market forces will lead to the emergence of a different world of work marked by: 1. A shift towards what is described as Knowledge Work; that is many more people will be employed for their specialist knowledge and far fewer routine jobs will exist. Competitve advantage from an employers perspective will derive from the capacity to create& deploy knowledge more effectively than others.
2. Organizations will not be able to offer contracts of employment in the way they do today. Jobs will