Evolution of HRM: Personnel Management to Human Resources Management

HRM: Strategic Approach to Managing Employee Relations

• From Personnel Management to Human Resources Management (1950-1970s: Keynesianism, 1970s-1990s: Neoliberalism)
• Shift from stakeholder model to shareholder model and back to stakeholder model under neoliberalism

Actors Regulating Employer Relations

• Unilateral (just employer)
• Bilateral (employer + trade unions) -> USA
• Trilateral (employer + trade unions + government) -> EU

Types of Relations

• Economic (labor for pay)
• Legal (contract)
• Social (relations and balance of power)
• Psychological (expectations of and from employer)

Ulrich Model of HR Roles

• 4 roles for different people (strategic partner, administrative expert, employee champion, and change agent)

3 Paradigms

• Structural Functionalism: organization as a body with many parts that work together, HR coordinates and avoids conflict
• Conflict Paradigm: capital and workers have interests, conflict is normal
• Feminism Paradigm: company mimics the context they work in

Strategy

• Made by management, always changing, based on values, resources, and environment
• HR manager defines HR strategy based on the overall strategy
• Model of strategic management: mission, environment analysis, strategic formulation, strategic implementation, strategic evaluation

Hierarchy of Strategy

• Corporate: general philosophy
• Business: how to compete
• Functional: operations to maximize resource productivity

Strategic HRM

• 2 models: Best Practice and Best Fit
• Best Practice Model: universal practices that every company must adopt
• Pfoerfer's 7 practices: employee security, selective hiring, teamwork and autonomy, pay according to performance, extensive training, not hierarchical, listen and inform employees
• Best Fit Model: based on the company strategy, resources, and environment

Critiques of Best Fit Model

• 1. strategy to HR is not a linear relation, because strategy changes a lot and fast
• 2. hard to prove that investing in people is remunerative
• 3. different countries, cultures, and laws force changes in the best-fit model

Control-Based Model

• Based on Porter's model, outward looking
• Flexibility has ups and downs: stress, violation of the psychological contract, loss of skill & knowledge, loss of social capital, "survivor syndrome"

4 Aspects of Flexibility

• Functional (related to skills & strategy)
• Numerical (just hours)
• Distancing (Teleworking, outsourcing, externalizing)
• Financial

Chapter 5: Recruitment & Selection

• Test to select the best candidate with objective and reliable techniques
• Recruitment: generate a pool of candidates
• Selection: use instruments to select the best out of the pool
• Job analysis: understand the nature of the job (job description, job specifications)
• Methods of analysis: observation, performing the job, interviews, diaries, background records, questionnaires, critical incidents

O*Net

• Database of roles with their descriptions

Alternatives to Recruiting

• Outsourcing
• Contingent workers
• Overtime
• Professional employer organizations (employer leasing)

Internal and External Recruiting

• Internal: better assist the candidate, reduce training time, faster, cheaper, motivates the employee & satisfies unions
• External: increase diversity, shorten training time, how to find: media, job fairs, employment agency, recruiters, open house, association, and E-recruitment

Career Development System

• Benefits for managers: better communication, better understanding of the system, increased skill in managing own careers
• Benefits for employees: helpful assistance with career decisions, realistic goals, responsibility
• Benefits for the company: better use of employees, great retention of employees, expanded public image
• Components of CDS: mentoring, self-assessment tools, individual counseling, and others

Chapter 8: Rewards Management and Inequality

• Reward can be monetary or non-monetary/benefits
• Rewards can be extrinsic (compensation) or intrinsic (psychological enjoyment or satisfaction in performing the job)
• 2 contradictory elements: cooperation with the employee to reach goals, and conflict to split the profits of the goals: HR finds the balance between conflict and cooperation

Reward Options

• Job-based
• Person-based
• Performance-based
• Job-based: internal equity, external equity, and individual equity
• Point factor: finds compensable factors (something that deserves to be paid, e.g. number of people managed, budget) and assigns points to each factor
• Person-based: allows paying more if someone is really good at their job to value skills

Performance-Based Reward

• Can be based on individual or group performance
• Individual: qualitative (merit pay plans), quantitative (incentive plans)
• Group: profit sharing, gain sharing, employee stock/stock option plans

Limitations

• Unions that support worker's interests have much power than the single person
• Legislation limits the power of the organization (e.g. gender pay gap)

Chapter 9: Labour Relations and Collective Bargaining

• Union: form of employee representation, gives them a voice
• Cultural aspects: language and symbols, values, beliefs, and principles, norms
• Differences in cultures: power distance, individualism vs collectivism, masculinity vs femininity, uncertainty avoidance
• Hofstede: culture is not monolithic -> not everybody embraces that, there is a dominant culture aligned with my strategy and some sub-cultures

Corporate Culture

• Top-down, made from managers vs organization culture
• Produced inside, how relations are internally
• Organization climate -> individual perception, not related to culture

3 Perspectives on Culture

• 1. Structural functionalist approach: culture is something an organization has, and it's top-down
• 2. Symbolic interactionalist perspective: culture is affected by the structure of economic and social class
• 3. Conflict perspective: values and norms sustain inequality
• 4. Feminist perspective: gender is a central aspect of work, focus on equality

Managing Culture through HRM

• Strong culture can create common value system, can provide norms and behaviors to follow
• Managers can influence the symbolic meaning of actions
• Culture can be changed through HRM practices (like hiring…)