Introduction to human resource management notes

Introduction to Human Resource Management

• Meaning of human resource management
• Role of Human Resource Management
• Functions of human resource management in an organization
• Structure of human resource management department
• Evolution of human resource management

1.1 Meaning of Human Resource Management
Human resource management is defined as a strategic and coherent approach to the management of an organization’s most valued assets – the people working there who individually and collectively contribute to the achievement of its objectives.
Storey (1989) believes that HRM can be regarded as a ‘set of interrelated policies with an ideological and philosophical underpinning’. He suggests four aspects that constitute the meaningful version of HRM which are:

1. a particular group of beliefs and assumptions;
2. a strategic thrust informing decisions about people management;
3. the central involvement of line managers; and
4. reliance upon a set of ‘levers’ to shape the employment relationship

Aims of HRM
The overall purpose of human resource management is to ensure that the organization is able to achieve success through people. ‘HRM systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities.’ Specifically, HRM is concerned with achieving objectives in the following areas.
Organizational effectiveness
Distinctive human resource practices shape the core competencies that determine how firms compete. HRM strategies aim to support programmes for improving organizational effectiveness developing policies in such areas as knowledge management, talent management and generally creating ‘a great place to work’. This is the ‘big idea’ as described Purcell et al (2003), which consists of a ‘clear vision and a set of integrated values’. HR strategies can be concerned with the development of continuous improvement and customer relations policies.
Human capital management
Human capital can be regarded as the prime asset of an organization and businesses need to invest in that asset to ensure their survival and growth. HRM aims to ensure that the organization obtains and retains the skilled, committed and well-motivated workforce it needs. This means taking steps to assess and satisfy future people needs and to enhance and develop the inherent capacities of people – their contributions, potential and employability – providing learning and continuous development opportunities. It involves the operation of ‘rigorous recruitment and selection procedures, performance- dependent incentive compensation systems, and management development and training activities linked to the needs of the businesses. It also means engaging in talent management – the process of acquiring and nurturing talent, wherever it is and wherever it is needed, using a number of interdependent
Knowledge management
Knowledge management is ‘any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, to enhance learning and performance in organizations’ .HRM aims to support the development of firm-specific knowledge and skills that are the result of organizational learning processes.

Reward management
HRM aims to enhance motivation, job engagement and commitment introducing policies and processes that ensure that people are valued and rewarded for what they do and achieve and for the levels of skill and competence they reach.
Employee relations
The aim is to create a climate in which productive and harmonious relationships can be maintained through partnerships between management and employees and their trade unions.
Meeting diverse needs
HRM aims to develop and implement policies that balance and adapt to the needs of its stakeholders and provide for the management of a diverse workforce, taking into account individual and group differences in employment, personal needs, work style and aspirations and the provision of equal opportunities for all.
Bridging the gap between rhetoric and reality
The research conducted has found that there was generally a wide gap between the sort of rhetoric and reality. Managements may start with good intentions to do some or all of these things but the realization of them is often very difficult. This arises because of contextual and process problems: other business priorities, short-termism, limited support from line managers, an inadequate infrastructure of supporting processes, lack of resources, resistance to change and lack of trust. An overarching aim of HRM is to bridge this gap making every attempt to ensure that aspirations are translated into sustained and effective action.
1.2 Evolution of HRM
The history of HRM can be divided into six distinct stages namely the welfare stage, personnel administration stage, personnel management stage, personnel management maturity stage, personnel management maturity stage, personnel management entrepreneurial stage and human resource management stage.
a) The welfare stage
This covers the period 1900-1920 during which workers in Europe formed individual welfare groups which were concerned with their needs at work. These groups fought for the improvement in working conditions. During the First World War (1914-1918), many organizations were faced with acute shortage of labour but there was need to increase productivity. Governments in USA and Europe therefore encouraged systematic study of employee and employer relationships.
b) Personnel administration stage (1920-1929)
During this period, neo-classical theorists carried out studies that improved the employee-employer relationship. The main contributors were Abraham Maslow, Elton Mayo, Douglas Macgregor. The services that were provided to workers during this period included transport facilities, canteens, sporting facilities etc. Systematic procedures relating to personnel such as recruitment and training also began during this period.
c) Personnel management stage (1940-1950)

During this stage, the procedures introduced in the earlier stage were refined and other activities related to employees were introduced. These include salary scales and administration, industrial relations, training and development etc.
d) Personnel management maturity stage (1950-1970)
Specialization developed during this period and personnel department was recognized as a unit that was independent from the others in an organization. There was also a continuous introduction of systematic training programmes, performance appraisal etc.
e) Personnel management entrepreneurial stage (1970-1980)
During this period, there was intense business competition. This made many organizations introduce new management techniques. HR managers were therefore expected to be entrepreneurial in their approach to business. More studies were carried out in HR with the aim of giving an organization a competitive advantage over others. Employees became highly valued resource and were considered as the most strategic asset in an organization.
f) Human Resource Management stage (1980-date)
In this period, there was more involvement of HR specialists in management of an organization. The HR manager began to be involved in making top level decisions relating to employee and formulation of corporate strategy
1.3 Differences between Personnel Management and Human Resource Management
A debate about the differences, between HRM and personnel management went on for some time but has died down recently, especially as the terms HRM and HR are now in general use both in their own right and as synonyms for personnel management. But understanding of the concept of HRM is enhanced analyzing what the differences are and how traditional approaches to personnel management have evolved to become the present day practices of HRM.
Some commentators have highlighted the revolutionary nature of HRM. Others have denied that there is any significant difference in the concepts of personnel management and HRM. Personnel management has grown through assimilating a number of additional emphases to produce an even richer combination of experience. HRM is no revolution but a further dimension to a multi-faceted role.
The conclusion based on interviews with HR and personnel directors is that HRM is regarded some personnel managers as just a set of initials or old wine in new bottles. It could indeed be no more and no less than another name for personnel management, but it has the virtue of emphasizing the treatment of people as a key resource, the management of which is the direct concern of top management as part of the strategic planning processes of the enterprise. Although there is nothing new in the idea, insufficient attention has been paid to it in many organizations.

The similarities between HRM and personnel management are summarized below;

1. Personnel management strategies, like HRM strategies, flow from the business fit and integration.

2. Personnel management, like HRM, recognizes that line managers are responsible for managing people. The personnel function provides the necessary advice and support services to enable managers to carry out their responsibilities

iii. The values of personnel management and at least the ‘soft’ version of HRM are identical with regard to ‘respect for the individual, balancing organizational and individual needs, and developing people to achieve their maximum level of competence both for their own satisfaction and to facilitate the achievement of organizational objectives.

1. Both personnel management and HRM recognize that one of their most essential functions is that of matching people to ever changing organizational requirements i.e. placing and developing the right people in or for the right jobs.
2. The same range of selection, competence, analysis, performance management, training, management development, and reward management techniques are used.
3. Personnel management, like the ‘soft’ version of HRM, attaches importance to the processes of communication and participation within an employee relations system.

The differences between personnel management and HRM are:

1. HRM places more emphasis on strategic fit and integration
2. HRM is based on a management and business orientated philosophy.
3. HRM attaches more importance to the management of culture and the achievement of commitment (mutuality).
4. HRM places greater emphasis on the role of line managers as the implementers HR policies.
5. HRM is a holistic approach concerned with the total interests of the business; the interests of members of the organization are recognized but subordinated to those of the enterprise.
6. HR specialists are expected to be business partners rather than personnel administrators
7. HRM treats employees as assets not costs.

1.4 Unique features of human resource management
Generally, HRM possesses the following unique features;
a) It is a diverse field
The characteristics of HRM are no means universal. There are many models and practices within different organizations are diverse, often only corresponding to the conceptual version of HRM in a few respects. A distinction is made between the ‘hard’ and ‘soft’ versions of HRM.
The hard version of HRM emphasizes that people are important resources through which organizations achieve competitive advantage. These resources have therefore to be acquired, developed and deployed in ways that will benefit the organization. The focus is on the quantitative, calculative and business-strategic aspects of managing human resources in as ‘rational’ a way as for any other economic factor The drive to adopt HRM is based on the business case of a need to respond to an external threat from increasing competition. It is a philosophy that appeals to managements who are striving to increase competitive advantage and appreciate that to do this they must invest in human resources as well as new technology.

The soft version of HRM traces its roots to the human-relations school; it emphasizes communication, motivation and leadership. It involves ‘treating employees as valued assets, a source of competitive advantage through their commitment, adaptability and high quality (of skills, performance and so on)’. It therefore views employees, as means rather than objects.
The soft approach to HRM stresses the need to gain the commitment – the ‘hearts and minds’ – of employees through involvement, communications and other methods of developing a high- commitment, high-trust organization. Attention is also drawn to the key role of organizational culture.
b) It’s strategic in nature
Perhaps the most significant feature of HRM is the importance attached to strategic integration, which flows from top management’s vision and leadership, and which requires the full commitment of people to it. Scholars believe that this is a key policy goal for HRM, which is concerned with the ability of the organization to integrate HRM issues into its strategic plans, to ensure that the various aspects of HRM cohere, and to encourage line managers to incorporate an HRM perspective into their decision-making.’
c) HRM is commitment-oriented
HRM model is composed of policies that promote mutuality – mutual goals, mutual influence, mutual respect, mutual rewards, and mutual responsibility. The theory is that policies of mutuality will elicit commitment, which in turn will yield both better economic performance and greater human development. HRM attempts to create behavioural commitment to pursue agreed goals, and attitudinal commitment reflected in a strong identification with the enterprise’. It is believed that human resources may be tapped most effectively mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the “adaptive organization’s” pursuit of excellence’.
d) People are regarded as ‘human capital’
The notion that people should be regarded as assets rather than variable costs, in other words, treated as human capital, was originally advanced Beer et al (1984). People and their collective skills, abilities and experience, coupled with their ability to deploy these in the interests of the employing organization, are now recognized as making a significant contribution to organizational success and as constituting a significant source of competitive advantage.
e) Applies unitary philosophy
The HRM approach to employee relations is basically unitary – it is believed that employees share the same interests as employers. This contrasts with what could be regarded as the more realistic pluralist view, which says that all organizations contain a number of interest groups and that the interests of employers and employees do not necessarily coincide.
f) It is Individualistic
HRM is individualistic in that it emphasizes the importance of maintaining links between the organization and individual employees in preference to operating through group and representative systems.
g) HRM is a management-driven activity
HRM can be described as a central, senior management-driven strategic activity that is developed, owned and delivered management as a whole to promote the interests of the organization that they

serve. The adoption of HRM is both a product of and a cause of a significant concentration of power in the hands of management’, while the widespread use ‘of the language of HRM, if not its practice, is a combination of its intuitive appeal to managers and, more importantly, a response to the turbulence of product and financial markets’. HRM is about the rediscovery of management. HRM policies and practices are applied within a firm as a break from the past and are often associated with words such as commitment, competence, empowerment, flexibility, culture, performance, assessment, reward, teamwork, involvement, cooperation, harmonization, quality and learning.
h) Focus on business values
The concept of HRM is largely based on a management and business-oriented philosophy. It is concerned with the total interests of the organization – the interests of the members of the organization are recognized but subordinated to those of the enterprise. Hence the importance attached to strategic integration and strong cultures, which flow from top management’s vision and leadership, and which require people who will be committed to the strategy
1.5 Review questions
1. Define the term HRM
2. Briefly discuss the history of HRM
3. Explain four aims of HRM
4. Explain the differences and similarities between HRM and Personnel management

2.0 ROLE OF HUMAN RESOURCE FUNCTION IN AN ORGANIZATION

By the end of this topic, the trainee should be able to:
-Explain the structure of human resource department
-Discuss the functions of human resource department in an organization
-Explain the role of the human resource practitioner in an organization

1.1 The Structure of Human Resource Department
The organization and staffing of the HR function clearly depends on the size of the business, the extent to which operations are decentralized, the type of work carried out, the kind of people employed and the role assigned to the HR function. There are, therefore, no absolute rules for organizing the HR function, but current practice suggests that the following guidelines should be taken into account:

• the head of the function should report directly to the chief executive and should be on the board, or at least be a member of the senior management or leadership team, in order to contribute to

the formulation of corporate strategies and play a full part in the formulation and integration of HR strategies and policies.
• in a decentralized organization, subsidiary companies, divisions, or operational units should be responsible for their own HR management affairs within the framework of broad strategic and policy guidelines from the Centre.
• The central HR function in a decentralized organization should be slimmed down to the minimum required to develop group human resource strategies and policies.
• The HR function has to be capable of delivering the level of advice and services required the organization. Delivery may be achieved the direct provision of services but may be outsourced.
• The HR department is organized in accordance with the level of support and services it is required to give and the range of activities that need to be catered for, which could include resourcing, management development, training, reward management, employee relations, knowledge management and HR services in such areas as health and safety, welfare, HR information systems and employment matters generally. In a large department, each of these areas may be provided for separately, but they can be combined in various ways.
• The organization and staffing of the HR department needs to take account of its role in formulating HR strategies and policies and intervening and innovating as required. But the department also has to provide efficient and cost-effective services.
• The HR department should design to fit the needs of the business which results to considerable variations in in HR departments in various organizations.

The following figure illustrates the various sections that may be in a simple HR department as well as some responsibilities of those sections

1.2 Functions of Human Resource Department in an Organization
One of the first HRM concepts called the matching model of HRM made the Michigan School argues that HR systems and the organization structure should be managed in a way that is congruent with organizational strategy (hence the name ‘matching model’). They further explained that there is a human resource cycle, which consists of four generic processes or functions that are performed in all organizations. These are:

1. Selection – matching available human resources to jobs;
2. Appraisal – performance management;
3. rewards – ‘the reward system is one of the most under-utilized and mishandled managerial tools for driving organizational performance’; it must reward short as well as long-term achievements, bearing in mind that ‘business must perform in the present to succeed in the future’;
4. Development – developing high quality employees.

Figure 1.1: The human resource cycle

The general HR functions include;

• Human resource planning
• Training and development
• Reward management
• Recruitment and selection
• Termination
• Succession planning
• Maintaining personnel records and statistics concerning employees
• Preparation of job description and job specifications

1.3 Role of Human Resource Practitioner in an Organization.
This section is concerned with what HR professionals do and how they do it, recognizes that ‘HRM does not belong to HR specialists’. HRM belongs to line managers and the people they manage. The section analyses the basic roles and activities of HR professionals. However, in playing their role, HR practitioner are affected issues such as; achieving comprise in gaining support and commitment, role ambiguity, role conflict, ethics, and professionalism.
The roles of HR practitioners vary widely according to the extent to which they are generalist (e.g., HR director or HR manager), or specialist (e.g., head of learning and development, head of talent management, or head of reward), the level at which they work (strategic, executive or administrative), the needs of the organization, the context within which they work and their own capabilities.

The role of human resource practitioner in an organization
The roles can be proactive, reactive or a mixture of both. At a strategic level, HR people take on a proactive role since they are to be involved in strategic decision-making processes and are most

likely to be found in workplaces within which sophisticated methods and techniques have been adopted. As such, they act as business partners, develop integrated HR strategies, intervene, innovate, and operate as internal consultants and volunteer guidance on matters concerning upholding core values, ethical principles and the achievement of consistency. They focus on business issues and working with line managers to deliver performance targets. In some situations they play a mainly reactive role. They spend much of their time doing what they are told or asked to do. They provide the administrative systems required management. This is what is referred to as the non-interventionary role, in which HR people merely provide a service to meet the demands of management and front-line managers. The various roles are described in more detail below.
a) Service provision
The basic role of HR specialists is that of providing services to internal customers. These include management, line managers, team leaders and employees. The services may be general, covering all aspects of HRM: human resource planning, recruitment and selection, employee development, employee reward, employee relations, health and safety management and welfare. Alternatively, services may only be provided in one or two of these areas specialists. The focus may be on the requirements of management (e.g., resourcing), or it may extend to all employees (e.g., health and safety). The aims are to provide effective services that meet the needs of the business, its management and its employees and to administer them efficiently.
b) Guidance and advice
HR practitioners provide guidance and advice to management. At the highest level, this will include recommendations on HR strategies that have been developed processes of analysis and diagnosis to address strategic issues arising from business needs and human, organizational or environmental factors.
They also provide advice on issues concerning culture change and approaches to the improvement of process capability – the ability of the organization to get things done through people. Guidance is given to managers to ensure that consistent decisions are made on such matters as performance ratings, pay increases and disciplinary actions. Guidance may be provided on HR policies and procedures and the implications of employment legislation to ensure that legal requirements are met.
c) The business partner role
HR practitioners as business partners share responsibility with their line management colleagues for the success of the enterprise and get involved with them in running the business. They must have the capacity to identify business opportunities, to see the broad picture and to understand how their HR role can help to achieve the company’s business objectives.
HR professionals integrate their activities closely with management and ensure that they serve a long-term strategic purpose. This is one of the key roles assigned to HR Ulrich (1998), who stated that HR should become a partner with senior and line managers in strategy execution and that HR executives should impel and guide serious discussion of how the company should be organized to carry out its strategy.
d) The strategist role
As strategists, HR professionals address major long-term organizational issues concerning the management and development of people and the employment relationship. They are guided the business plans of the organization but they also contribute to the formulation of those business plans. This is achieved ensuring that top managers focus on the human resource implications of the plans. HR strategists persuade top managers that they must develop business strategies that make

the best use of the core competences of the organization’s human resources. They emphasize, that people are a strategic resource for the achievement of competitive advantage.
e) The innovation and change agent role
In their proactive role, HR practitioners are well placed to observe and analyze what is happening in and to their organizations as it affects the employment of people, and intervene accordingly. Following this analysis, they produce diagnoses that identify opportunities and threats and the causes of problems. They propose innovations in the light of these diagnoses that may be concerned with organizational processes such as interaction between departments and people, teamwork, structural change and the impact of new technology and methods of working, or HR processes such as resourcing, employee development or reward. As innovators they have to be experts in change management.
HR change is categorized in four dimensions: Transformational change – a major change that has a dramatic effect on HR policy and practice across the whole organization, Incremental change – gradual adjustments of HR policy and practices that affect single activities or multiple functions, HR vision – a set of values and beliefs that affirm the legitimacy of the HR function as strategic business partner and HR expertise – the knowledge and skills that define the unique contribution the HR professional can make to effective people management. Across these dimensions, the change agent roles that can be carried out HR professionals are those of change champions, change adapters, change consultants and change synergists.
f) The internal consultancy role
As internal consultants, HR practitioners function like external management consultants, working alongside their colleagues – their clients – in analyzing problems, diagnosing issues and proposing solutions. They will be involved in the development of HR processes or systems and in process consulting such as organization, team building and objective setting
g) The monitoring role
As monitors of the application of HR policies and procedures and the extent to which the organization’s values relating to people management are upheld, HR practitioners have a delicate, indeed a difficult, role to play. They are not there to ‘police’ what line managers do but it is still necessary to ensure that the policies and procedures are implemented with a reasonable degree of consistency. This role can mean that HR specialists can act as ‘regulators’ who are involved in formulating and monitoring employment rules. The monitoring role is particularly important with regard to employment legislation. HR practitioners have to ensure that policies and procedures comply with the legislation and that they are implemented correctly line managers.
h) The guardian of values role
HR practitioners may act as the guardians of the organization’s values concerning people. They point out when behaviour conflicts with those values or where proposed actions would be inconsistent with them. In a sense, their roles require them to act as the ‘conscience’ of management – a necessary role but not an easy one to play.

The competencies required HR professionals
A successful HR professional should have the following competencies / skills;

• Personal drive and effectiveness; The existence of a positive ‘can do’ mentality, anxious to find ways round obstacles and willing to exploit all the available resources to accomplish objectives
• People management and leadership; The motivation of others (whether subordinates, seniors or project team members) towards the achievement of shared goals, not through the application of formal authority but rather personal role modeling, the establishment of professional credibility, and the creation of reciprocal trust.
• Professional competence. Possession of the professional skills and technical capabilities associated with successful achievement in personnel and development.
• Adding value through people. A desire not only to concentrate on tasks, but rather to select meaningful outputs which will produce added-value outcomes for the organization, or eliminate/reduce the existence of performance inhibitors, whilst simultaneously complying with all legal and ethical considerations.
• Continuing learning. Commitment to continuous improvement and change the application of self-managed learning techniques, supplemented where appropriate deliberate planned exposure to external learning sources (mentoring, coaching, etc).
• ‘Customer’ focused. Concern for the perceptions of personnel’s customers, including (principally) the central directorate of the organization, a willingness to solicit and act upon ‘customer’ feedback as one of the foundations for performance improvement.
• Strategic capability. The capacity to create an achievable vision for the future, to foresee longer-term developments, to envisage options (and their probable consequences), to select sound courses of action, to rise above the day-to-day detail, to challenge the status quo.
• Influencing and interpersonal skills. The ability to transmit information to others, especially in written (report) form, both persuasively and cogently; display of listening, comprehension and understanding skills, plus sensitivity to the emotional, attitudinal and political aspects of corporate life.

1.4 Review questions
1. Briefly explain the structure of Human Resource Department in an organization
2. Discuss the role of HR practitioners in an organization
3. Outline five general functions of HRM
4. Explain five competencies of a HR practitioner