Development of HRM

Development of HRM

• Industrial welfare began in the 1890s, including medical services, housing, and libraries
• Scientific management involved managing people and production
• The new HRM model timeline:
  • 1980s: Personnel management, industrial relations, and labour management evolved into HRM
  • 1990s: The Institute of Personnel Management emerged
  • 2000s: The Chartered Institute of Personnel and Development was established

Personnel Management vs. HRM

• Personnel management had a limited focus on broader business links
• It concentrated on activities of personnel professionals and low-level record keeping
• HRM focuses on business strategies and links with HR strategy
• HRM considers HR the most important organizational resource

Defining HRM

• HRM includes anything related to managing employment relationships within a firm
• Terms like 'employee relations,' 'labour management,' and 'people management' are synonymous with HRM
• HRM is not solely a high-commitment model of labour management or a particular ideology
• An inclusive definition is more appropriate

Alternative Approaches to Studying HRM

• Matching (Hard) approach:
  • Beliefs/Assumptions: Compliance
  • Strategic Qualities: Calculative efficiency
  • Role Line Managers: Rule-bound
  • Key Drivers: Product demand
• Models (Soft) approach:
  • Beliefs/Assumptions: Nurturing commitment
  • Strategic Qualities: People-supportive policies
  • Role Line Managers: Coaching
  • Key Drivers: Training and development
• Organisational Performance approach:
  • Beliefs/Assumptions: Performance-enhancing policies
  • Strategic Qualities: Bundles of complementary HR
  • Role Line Managers: Strategic and measured KPIs
  • Key Drivers: Internal and external fit (integration)
• Radical (Critical) Management approach:
  • Beliefs/Assumptions: Exploitation of people at work
  • Strategic Qualities: Global business model (capitalist) sources of power
  • Role Line Managers: Authority agents of owners
  • Key Drivers: Peer surveillance, control of labour process
• Employee-Centric Approach:
  • Beliefs/Assumptions: Critical of cause-and-effect assumptions
  • Strategic Qualities: Balance of opposing interests
  • Role Line Managers: Significant and active agents
  • Key Drivers: Integration of individual and collective oriented processes

Factors Changing the Context of Work

• Intensification of work is due to intense competition and organizational downsizing/decentralization
• Technology, such as telecommuting, influences work location choices
• There is a divisive nature of society with poverty vs. over-worked individuals
• Change in HRM is driven by broader organizational capability, not personnel specialists
• HRM is not a key driver but driven by high commitment in production systems, not humanistic grounds
• Managing involves exploring new subjects or areas in 'uncharted territory'

Global Forces Affecting Work (4Fs)

• Flexibilisation: Changes in how people work impact HRM, with more employees working part-time or remotely

• Feminisation: More women working from home

• Financialisation: Changes to work are influenced by market and context, focusing on increasing profit

• Some companies generate surplus without making goods, such as General Motors making $800 million from mortgage investments

• Fragmentation: Changes in the nature of the employee-employer relationship

• Feminization: Shifts in labor market demographics, and increased presence of women in the workforce and equality issues remain

Organizational Changes

• New Organizational Forms:
  • Less hierarchical
  • More flexible forms
  • Continuing waves of organizational change programs like total quality management, business process engineering, lean production, learning organizations, and cultural change initiatives
• Employee Structure Changes:
  • Gender-related, working hours, working environment, and contractual changes
• Marketisation:
  • Submitting the industry to market forces in both private and public sectors
• Off-shoring, delayering, outsourcing, and precarious work

Delayering and Decentralization

• Delayered: reducing the size of a business hierarchy by reducing management layers
• Results in a flatter organizational structure
• Decentralised: delegating daily operations and decision-making from top management to middle and lower-level managers
• Allows top management to focus on major decisions

Outsourcing and Offshoring

• Outsource: involves using a third party
• Offshoring: specifically means sending jobs out of the country

Formula for HR Success (Rucci, 1997)

• Future HR should not be based on a department that:
  • Does not promote change or plan for it
  • Does not identify leaders
  • Does not understand the business or customers
  • Does not drive costs or emphasize value

Future Role of HR (Spparow et al., 2015)

• HR should design HR strategy alongside business strategy
• HR should promote a customer-centric culture around innovation for positive customer experience and loyalty
• HR should focus on fairness and well-being to improve engagement
• Business units must adapt to increasing globalization
• HR should foster entrepreneurship competencies and communication leadership

Strategy and HRM

• An organization’s human resource assets are the only source of sustainable competitive advantage

• Competitive advantage comes from superior, valuable, rare, and non-replaceable resources

• There is a need for more integrated analysis of strategy and business theories in HRM

• SHRM involves decisions and actions for managing employees at all levels to create and sustain competitive advantage

• Strategic HRM involves tactical planning and practice for structure quality, culture, value, and commitment

• It includes matching resources to future needs

Employee as Commodity vs. Employee as Resource

• People as resource: Strategic (SHRM), Non-strategic (PM)

• People as cost: Cost-driven SHRM, Traditional management

• HR is integrated into the business strategy

• PM is performance management

• Two levels of HR integration:

  • At the level of implementation
  • Considered during the planning process

Performance and HRM

• High-performance work systems (HPWS) and Best Practice HR model lead to higher performance

• Innovative workplace practices increase profits through:

  • Employee voice
  • Teamworking
  • Contingent rewards

• Collections of HR practices form 'bundles'

• High-performance management is not always suitable for all workers

• Boundles are interrelated and internally reliable human resource practices

• Complementary and balanced practices, regarding companies and its human resource management activities

• The PM process should focus on providing useful feedback to employees and reliable results to Human Resources

• Can be extremely complicated, but more easily agreed than achieved

The Changing Role of HRM

• Increase in Chartered Institute of Personnel and Development (CIPD) members
• Increase in 'personnel specialist' employees in workplaces
• HR Performance
• Recruitment and selection
• Training and development
• Reward and performance management
• Employment relations
• Organizational culture
• Internationalisation and globalisation
• Diversity and equality
• Downsizing
• Organizational change
• Involvement and participation
• Engagement
• Ethics and governance
• Knowledge management
• Bullying
• Flexibility
• Talent management
• Employee well being
• Technology and HRM

CIPD

• CIPD: Chartered Institute of Personnel and Development; a professional association for HRM professionals

HRM: A Future Agenda

• HR should design not only HR strategy, but also business strategy
• The capacity to promote a customer-centric culture
• Employee fairness and well-being needs to be the focus
• The key challenge for HRM systems is to connect workforce trust, justice, and well-being as a path to positive employment and organizational performance

Foxconn

• Study about Foxconn company for insights into HRM practices