Human Resource Management (HRM) Intro

Human Resource Management (HRM) Introduction

• HRM is about how organizations manage employees
• The book examines the rise of HRM, its effects, strategic nature, impact on organizational performance, and the HR function's changing role
• Book also considers the target audience and optimal use

Development of HRM

• HRM's roots trace back to the 1890s with industrial welfare work, driven by humanitarian, religious, and business motives
• Initial offerings included medical care, housing, and libraries
• Employment offices handled hiring, payroll, and record-keeping
• Scientific management principles applied to people and production management
• Shift from direct management (personal supervision, paternalism, piecework) to technical and bureaucratic systems took place

HRM Modernization

• The HRM function emerged, focusing on modern personnel methods and role professionalization
• HRM was initially an administrative function, addressing labor issues rather than contributing to strategic goals
• Rise of the "new HRM orthodoxy" occurred over the past 20 years
• The term “HRM" gained prominence in the mid-1980s in the UK and earlier in the US
• "HRM" gradually replaced terms like ‘personnel management’, ‘industrial relations' and ‘labour relations'.
• People management practitioners became HR managers and human resource developers
• The 1990s saw new journals and HRM university courses, with many UK courses accredited by the Chartered Institute of Personnel and Development (CIPD)

Perspectives on HRM

• Some viewed HRM as a modern label for traditional personnel management or a reconceptualization of personnel roles
• Some viewed HRM as a distinct approach to develop and utilize human resources for strategic objectives
• HRM has faced debates over being a mere relabeling of personnel management versus something more fundamental
• Traditionally, personnel management lacked business focus and concentrated on personnel professionals, unions, and operational techniques
• Personnel management was often seen as low-level record-keeping and ‘people maintenance'
• In contrast, the HRM stereotype is more concerned with business strategy, viewing HR as a vital organizational resource

HRM Transformation

• There has been discussion of an HRM revolution toward administrative efficiency, with HRM becoming a strategic business partner
• Ulrich and Dulebohn suggest HRM aims to ‘add value to the firm'
• Boxall and Purcell emphasize the importance of defining HRM to clarify its intellectual space and uncover different perspectives
• Storey emphasizes policies aligning with ‘high-commitment management' or 'high-performance work systems’

HRM Definitions

• HRM is defined as a distinctive approach to employment management seeking competitive advantage through strategic deployment of a committed and capable workforce utilizing cultural and structural techniques
• A broader definition by Boxall and Purcell includes anything related to managing employment relationships, not solely high-commitment models
• High-commitment management, if presented, can marginalize the discussion, excluding many organizations that pursue a ‘low-wage path’

New HRM Model (Beliefs and Assumptions)

• The human resource gives competitive edge
• Aim should not be mere compliance but employee commitment
• Employees should be carefully selected and developed

Strategic Qualities of HR

• HR decisions are strategically important due to the above beliefs
• Top management involvement is necessary
• HR policies should integrate into the business strategy and contribute to it

Critical Role of Managers in HR

• Because HR practice is critical to the core activities of the business, it is too important to be left to personnel specialists alone
• Line managers are closely involved as both deliverers and drivers of the HR policies
• Much greater attention is paid to the management of managers themselves

Key Levers in HR

• Managing culture is more important than managing procedures and systems
• Integrated action on selection, communication, training, reward and development
• Restructuring and job redesign allow devolved responsibility and empowerment

HRM Evolution

• Torrington suggests that HRM is merely the next step in the development of personnel management
• Much of what’s labeled ‘HRM’ is longstanding good people management, less effective practices remain with ‘personnel management’ brand
• HRM has been defined as the attraction, retention, utilization, motivation, rewarding, and disciplining of employees
• Some view HRM as ‘management of people at work’
• Defining HRM broadly emphasizes managing people as resources positively contributing to organizational success
• Inclusive HRM definitions connect with concepts like employee motivation, performance, commitment, managerial power, legitimacy, and ideology

HRM Approaches

• HRM's management of people originates in competing perspectives
• Alternative Approaches to the Study and Practice of HRM include:
• Matching Models (Hard) (Soft)
• Organisational Performance
• Radical (Critical) Management
• Employee-Centric Approach
• Beliefs and Assumptions include:
  • Compliance, Nurturing commitment, Performance enhancing, Exploitation of people at work, Critical of cause- and-effect assumptions
• Strategic Qualities involve:
  • Calculative efficiency, People-supportive policies, Bundles of complementary HR policies, Global business model (capitalist) sources of power, Balance of opposing interests
• Key Drivers include: -Rule-bound Coaching, Measured KPIs, Authority agents of owners, Significant and active agents
• Role Line Mangers include: -Strategic, Internal and external fit (integration), Peer surveillance/ control of labour process, Integration of individual and collective orientated processes
• Key concepts developed from ideas in Storey, 2007; Sisson, 2010; Kaufman, 2010b, 2015

Matching HR Models

• Early influential model labeled as ‘Matching HR Models’
• Michigan School of HRM developed by Fombrun et al. (1984) viewed as ‘hard’
• Tight calculative (hard) fit between business needs and people management ensures optimum employee effort and performance
• Strict rules measure selection, reward, training, and employee replacement

Hard HRM vs Soft HRM

• Hard HRM views employees as factors of production to be hired and fired based on efficiency
• Harvard Business School developed ‘soft’ HRM
• ‘Soft’ HRM considers stakeholder interests (including employee well-being) relative to business and context factors
• ‘Soft’ HRM seeks to stress ‘human’ rather than ‘resource’

Organizational Performance

• For some, HRM and people management styles are key drivers of sustainable competitive advantage and improved organizational performance
• Organizational Performance school has roots in Matching Models, contemporary perspectives quantify and measure HR practices’ causal impact on profit, performance, productivity, and employee effort
• Performance is paramount, with employee interests of lower importance

Radical or Critical Management Perspective

• Scholars have suspicion of HRM claims
• Radical perspective contextualizes people management within capitalist development, managerial power, and authority relations
• The Radical school is concerned with power relationships and a global neo-liberal economic and political agenda fostering discrimination and unfairness

Employee-Centric Approach

• The ‘Employee-Centric Approach' seeks to manage and mediate interests cooperatively and antagonistically
• Recognizes collective and individual employee management practices
• It critiques normative cause-and-effect claims of HRM for improving organizational effectiveness
• It critiques systems based on mutual employer-employee cooperation
• A key feature is how employees experience work and react to management
• HRM involves management-employee mutuality and a balance of control and workforce cooperation

HRM Context

• Some include intensification of work, technology-driven work location choices, and societal division
• Changes in HRM did not originate from direct initiatives but from broader organizational initiatives
• Innovations in HRM accompany changes in production systems with humanistic grounds being unrealistic
• HRM is a consequence of managing in uncharted territory with new employment relationship rules

Organizational Changes and HRM

• HRM has been driven by large-scale organizational changes as employers adjust to a competitive global environment
• Intense competition led to downsizing, delayering, and decentralization
• Organizations are less hierarchical and subject to waves of organizational change (total quality management, business process re-engineering, performance management, modernization, lean production, outsourcing)
• There is a relentless pressure on employees and line managers to push through culture change initiatives

Global Forces and HRM: The 4 Fs

• Feminization: Changes in labor market demography, women in work has grown significantly. Equality issues persist
• Flexibilization: Changes in how people work – more female, part-time, remote, and precarious including zero hour contracts
• Fragmentation: The employer-employee relationship is changing, more use of subcontractors, consultants, outsourcing
• Financialization: Organisations aim to generate surplus through investments not through making goods or services

The "New Public Management"

• It has emerged with emphasis on economy and efficiency
• The public sector has ‘marketisation', compulsory competitive tendering, ‘modernisation', ‘best value'
• They meet challenges of maintaining HRM practices post-austerity

Stress and HRM

• Intense competition leads to downsizing, delayering, and decentralization
• Research from the European Agency for Safety and Health at Work (2013) reports psychosocial stress is a key HR challenge
• Surveying around 35,000 workers across 31 European countries, the data show work-re lated stress, burnout and depression to be important in the respondents’ workplace
• 7 in 10 people identify job reorganisation, job insecurity, long hours, excessive workloads and bullying encounters as the main causes of stress

Costs of Work-Related Stress

• Mental ill-health is now the most common cause of sick absence in firms in developed economies, accounting for 40% of lost time (OECD, 2012)
• Stress and ill-health at work will cost US$16 trillion in lost output globally over the next two decades unless managed
• Management style is a powerful game-changer
• Managers are likely to engender more productive employees managing through supportive leadership styles
• Toxic, authoritarian and abusive styles should be avoided
• HRM can have an empowering effect with job autonomy, involvement and self-control engaging workers in their job thereby supporting a positive attitude and mental well-being

HRM Negatives

• HRM practices may increase modern work life stress via performance management systems, contingent pay, and flexibilization
• Reports from the Citizens Advice Bureau find worker exploitation, with unilateral changes in contracts, forced reduction in hours and pay
• There is a phenomenon of ‘zero hours contracts' lacking guaranteed work, the employee must be available when the manager demands.
• There is a need to radically reconstruct the ‘psychological contract' between employer and employee

Employee Focus

• The goal is for HR systems to connect with work force trust, justice and well-being as a path to positive employment and then organizational performance
• Engagement is the latest idea, defined by the CIPD as ‘a combination of commitment to the organisation and its values, plus a willingness to help out colleagues
• A Watson Wyatt study (2009) indicated that a company with highly engaged employees achieves a financial performance that is four times better than those with poor engagement

Employee Engagement

• Highly engaged staff take 2.5 sick days per year, disengaged staff take 6.2 (Gallup)
• There is not without criticism, what employee engagement speaks to
• Management trust, job satisfaction and decision making involvement are building blocks

HRM Strategies

• It is the need to design HR and business strategies, promoting a customer-centric culture around innovation, fairness and well-being

Key Characteristics and Concerns with HRM

• Key Characteristics include HR analytics, drawing on big data to assess change in people's attitudes, behaviors and make adjustments to HR practices
• There is a danger the emphasis is very much on the strategic and business aspects and the ‘bread and butter’ issues of recruitment, selection, appraisal, development, reward and involvement of staff has been rather pushed to the periphery
• HR managers could be neglecting the basics in search for legitimacy and status with senior managers
• HR ‘futurologists' need to accept the HR role is to serve customers and not their egos

Problems with Implementation of HRM

• There is inconsistency with the best ‘bundle’ of HRM practices
• The literature has implicitly assumed that employee attitudes and behavior can be molded by management strategy in the pursuit of strategic fit
• Lack understanding of the processes involved and the mechanisms by which practices translate into a desired employment climate
• In short, the idea of a HR system is designed to improve workers feeling less committed with diminished job satisfaction
• It is unlikely and practices will in different contexts

Measuring the HR-Performance Linkage

• There needs to be clarity provided by of meta-analyses of the HR-performance linkage
• The performance effect of HRM is transmitted and what goes on in the so-called black box.
• The conflicts embedded in the structure of the employment relationship may limit the effectiveness of the high-performance paradigm

HRM Future

• There are still numbers about the future for HRM
• Devolution of HR has been taken a step further and there is now a considerable debate on the benefits of outsourcing
• Many senior managers may be of the view that people management is far too important to be left to the HR department, and the HR function appears to be at a dangerous crossroads