HRM for MBA students

Lecture 1
People management: personnel
management and human resource
management
 Learning outcomes

• A good appreciation of the ‘people

management’ function in contemporary
organisations
• An appreciation of the theoretical
development of HRM
• An appreciation of the practical application
of HRM
• Recognition of the key themes of HRM
People are the only real source of
sustainable competitive
advantage.
 We can define
people management as:

all the management decisions

and actions that directly
affect or influence people as
members of the organisation
rather than as job holders.
 What do people managers do?

• Staffing objectives
• Performance objectives
• Change management objectives
• Administration objectives
Torrington et al (2009)
 The ‘Ulrich model’ of HRM

Human resources should become:

– a strategic partner with top
management
– an expert in administration
– a champion for employees
– an agent of continuous transformation.
Ulrich (1998)
‘Building organisational capability is HR’s
heartland.’

But…

HR managers ‘can help make capitalism

human’.

Linda Holbech (2007 )

 Personnel management

• Early industrial revolution: welfare role

• Rise of trade unionism: industrial relations
role
• Scientific management: training;
sophisticated recruitment and selection
• Personnel management paradigm
(Taylorist)
 Human resource management

• Loss of faith in traditional mass-production

techniques
• Japanese quality
• Information technology
• HRM paradigm (post-Taylorist)
 Perspectives in management

• Unitarist:
– conflict is ‘wrong’
• Pluralist:
– conflict is not ‘wrong’ but must be
managed
• Radical/critical:
– conflict is inevitable – and may be
‘right’.
The ‘Harvard model’ of HRM
Stakeholder
Interests

Shareholders
Management
Employee Groups
Government
Community
Unions
HRM Policy Choices HR Outcomes Long-term
Consequences
Employee influence Commitment
Human resource flow Competence Individual well being
Reward systems Congruence Organisational
Work systems Cost effectiveness effectiveness
Societal well-being

Situational Factors

Work force characteristics

Business strategy and
conditions
Management philosophy
Labour market
Unions
Task technology
Laws and societal values

Figure 1.1: A map of the HRM territory: the ‘Harvard model’ from Beer et al (1984,

p.16).
 Key aspects of the ‘ideal types’
of PM & HRM

Characteristics Personnel Human Resource Management (HRM)

Strategic nature
Psychological contract
Job design
Organisational structure
Remuneration
Recruitment
Training/development
Employee relations
perspective
Organisation of the function
Welfare role
Criteria for success of the
function
Management (PM)
 Ad hoc
 Based on compliance
 Typically Taylorist/Fordist
 Hierarchical
 Collectivised
 ‘Pay by position’
 Sophisticated recruitment practices
for senior staff only
 Limited
 Pluralist
 Collectivist, low trust
 Specialist / professional
 Bureaucratic and centralised
 Residual expectations
 Minimising cost of human resources
 Proactive, strategic
 Based on seeking willing commitment
 Typically team based
 Flexible
 Individualised
 ‘Pay for contribution’
 Sophisticated recruitment for all employees
 Strong internal labour market for core employees
 A learning and development philosophy for all core
employees
 Unitarist:
 Individualistic, high trust
 Largely integrated into line management for day to day
HR issues
 Specialist HR group to advise and create HR policy
 No explicit welfare role
 Control of HR costs, but also maximum utilisation of
human resources over the long term
 HRM in practice

• Evidence of significant adoption of HRM

practices
– (Workplace Employee Relations Surveys
and others)
• But still two traditions or paradigms
• Most organisations share characteristics of
each
• But HRM in the ascendant
 Key themes in HRM
• High employee work practices
• Flexible organisation (core and periphery)
• Micro-level work organisation (team-
working)
• Sophisticated HR for recruitment
• Unitarist employee relations
• Change management
• Learning organisation
• Knowledge management
• Leadership