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Human Resource Management

Human resource management (HRM) is the 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 the ob ectives of the business! "#$ %he terms &human resource management& and &human resources& (HR) have largely replaced the term &personnel management& as a description of the processes involved in managing people in organizations!"#$ Human Resource management is evolving rapidly! Human resource management is both an academic theory and a business practice that addresses the theoretical and practical techni'ues of managing a workforce!

Contents

# (eatures ) *cademic theory


o

)!# +ritical *cademic %heory

, -usiness practice . +areers / 0rofessional organizations

Features
1ts features include2

0ersonnel administration 0ersonnel management Manpower management 1ndustrial management

-ut these traditional e3pressions are becoming less common for the theoretical discipline! 4ometimes even industrial relations and employee relations are confusingly listed as synonyms5 although these normally refer to the relationship between management and workers and the behavior of workers in companies! %he theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs5 and as such should not be thought of as basic business resources5 such as trucks and filing cabinets! %he field takes a positive view of workers5 assuming that virtually all wish to contribute to the enterprise productively5 and that the main obstacles to their endeavors are lack of knowledge5 insufficient training5 and failures of process! HRM is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach! 1ts techni'ues force the managers of an enterprise to e3press their goals with specificity so that they can be understood and undertaken by the

workforce5 and to provide the resources needed for them to successfully accomplish their assignments! *s such5 HRM techni'ues5 when properly practiced5 are e3pressive of the goals and operating practices of the enterprise overall! HRM is also seen by many to have a key role in risk reduction within organisations! 4ynonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce5 providing its members with payroll and benefits5 and administrating their work-life needs! 4o if we move to actual definitions5 %orrington and Hall (#678) define personnel management as being2 a series of activities which: first enable working people and their employing organisations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled" (p. 4 !. 9hile Miller (#678) suggests that HRM relates to2 ".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage" (p. "#$!.

Academic theory
%he goal of human resource management is to help an organization to meet strategic goals by attracting5 and maintaining employees and also to manage them effectively! %he key word here perhaps is &fit&5 i!e! a HRM approach seeks to ensure a fit between the management of an organization's employees5 and the overall strategic direction of the company (Miller5 #676)! %he basic premise of the academic theory of HRM is that humans are not machines5 therefore we need to have an interdisciplinary e3amination of people in the workplace! (ields such as psychology5 industrial engineering5 industrial and organizational psychology5 industrial relations5 sociology5 and critical theories2 postmodernism5 post-structuralism play a ma or role! Many colleges and universities offer bachelor and master degrees in Human Resources Management! :ne widely used scheme to describe the role of HRM5 developed by ;ave <lrich5 defines . fields for the HRM function2

4trategic business partner +hange agent =mployee champion *dministration

However5 many HR functions these days struggle to get beyond the roles of administration and employee champion5 and are seen rather as reactive than strategically proactive partners for the top management! 1n addition5 HR organizations also have the difficulty in proving how their activities and processes add value to the company! :nly in the recent years HR

scholars and HR professionals are focusing to develop models that can measure if HR adds value!

Critical Academic Theory


0ostmodernism plays an important part in *cademic %heory and particularly in +ritical %heory! 1ndeed >aren ?egge in 'Human Resource Management2 Rhetorics and Realities' possess the debate of whether HRM is a modernist pro ect or a postmodern discourse (?egge )@@.)! 1n many ways5 critically or not5 many writers contend that HRM itself is an attempt to move away from the modernist traditions of personnel (man as machine) towards a postmodernist view of HRM (man as individuals)! +riti'ues include the notion that because 'Human' is the sub ect we should recognize that people are comple3 and that it is only through various discourses that we understand the world! Man is not Machine5 no matter what attempts are made to change it i!e! (ordism A %aylorism5 Mc;onaldisation (Modernism)! +ritical %heory also 'uestions whether HRM is the pursuit of &attitudinal shaping& (9ilkinson #667)5 particularly when considering empowerment5 or perhaps more precisely pseudo-empowerment - as the critical perspective notes! Many critics note the move away from Man as Machine is often in many ways5 more a ?inguistic (discursive) move away than a real attempt to recognise the Human in Human Resource Management! +ritical %heory5 in particular postmodernism (poststructualism)5 recognises that because the sub ect is people in the workplace5 the sub ect is a comple3 one5 and therefore simplistic notions of 'the best way' or a unitary perspectives on the sub ect are too simplistic! 1t also considers the comple3 sub ect of power5 power games5 and office politics! 0ower in the workplace is a vast and comple3 sub ect that cannot be easily defined! %his leaves many critics to suggest that Management 'Burus'5 consultants5 'best practice' and HR models are often overly simplistic5 but in order to sell an idea5 they are simplified5 and often lead Management as a whole to fall into the trap of oversimplifying the relationship!

Business practice
Human resources management comprises several processes! %ogether they are supposed to achieve the above mentioned goal! %hese processes can be performed in an HR department5 but some tasks can also be outsourced or performed by line-managers or other departments!

9orkforce planning Recruitment (sometimes separated into attraction and selection) 1nduction and :rientation 4kills management %raining and development 0ersonnel administration +ompensation in wage or salary %ime management

%ravel management (sometimes assigned to accounting rather than HRM) 0ayroll (sometimes assigned to accounting rather than HRM) =mployee benefits administration 0ersonnel cost planning 0erformance appraisal

Careers
%he sort of careers available in HRM are varied! %here are generalist HRM obs such as human resource assistant! %here are careers involved with employment5 recruitment and placement and these are usually conducted by interviewers5 =:= (='ual :pportunity =mployment) specialists or college recruiters! %raining and development specialism is often conducted by trainers and orientation specialists! +ompensation and benefits tasks are handled by compensation analysts5 salary administrators5 and benefits administrators!

Professional organizations
0rofessional organizations in HRM include the 4ociety for Human Resource Management5 the *ustralian Human Resources 1nsitute (*HR1)5 the +hartered 1nstitute of 0ersonnel and ;evelopment (+10;)5 the 1nternational 0ublic Management *ssociation for HR (10M*-HR)5 Management *ssociation of Cepal M*C and the 1nternational 0ersonnel Management *ssociation of +anada (10M*-+anada)!

Human resources
Human resources is a term with which many organizations describe the combination of traditionally administrative personnel functions with performance5 =mployee Relations and resource planning! %he field draws upon concepts developed in 1ndustrialA:rganizational 0sychology! Human resources has at least two related interpretations depending on conte3t! %he original usage derives from political economy and economics5 where it was traditionally called labor5 one of four factors of production! %he more common usage within corporations and businesses refers to the individuals within the firm5 and to the portion of the firm's organization that deals with hiring5 firing5 training5 and other personnel issues! %his article addresses both definitions! %he ob ective of Human Resources is to ma3imize the return on investment from the organization's human capital and minimize financial risk! 1t is the responsibility of human resource managers to conduct these activities in an effective5 legal5 fair5 and consistent manner! Human resource management serves these key functions2
1. Selection 2. Training and Development

3. Performance Evaluation and Management 4. Promotions 5. Redundanc !. "ndustrial and Emplo ee Relations #. Record $eeping of all personal data. %. &ompensation' pensions' (onuses etc in liaison )it* Pa roll +. &onfidential advice to internal ,customers, in relation to pro(lems at )or$ 1.. &areer development

Human resources
Modern analysis emphasizes that human beings are not &commodities& or &resources&5 but are creative and social beings that make class contributions beyond 'labor' to a society and to civilization! %he broad term human capital has evolved to contain some of this comple3ity5 and in micro-economics the term &firm-specific human capital& has come to represent a meaning of the term &human resources!& *dvocating the central role of &human resources& or human capital in enterprises and societies has been a traditional role of Human Resource socialist parties5 who claim that value is primarily created by their activity5 and accordingly ustify a larger claim of profits or relief from these enterprises or societies! +ritics say this is ust a bargaining tactic which grew out of various practices of medieval =uropean guilds into the modern trade union and collective bargaining unit! * contrary view5 common to capitalist parties5 is that it is the infrastructural capital and (what they call) intellectual capital owned and fused by &management& that provides most value in financial capital terms! %his likewise ustifies a bargaining position and a general view that &human resources& are interchangeable! * sign of consensus on this latter point was the 14: 6@@@ series of standards which in its #66. revision could be understood to re'uire procedures or a & ob description& of every participant in a productive enterprise! %he )@@@ revision of 14: 6@@# in contrast re'uires to identify the processes5 their se'uence and interaction5 and to define and communicate responsibilities and authorities! 1n general5 heavily unionized nations such as (rance and Bermany have adopted and encouraged such ob descriptions especially within trade unions! :ne view of this trend is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive5 as labor can move from one enterprise to another with little controversy or difficulty in adapting! *n important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase &human resources&2 governments of developing nations often regard developed nations that encourage immigration or &guest workers& as appropriating human

capital that is rightfully part of the developing nation and re'uired to further its growth as a civilization! %hey argue that this appropriation is similar to colonial commodity fiat wherein a colonizing =uropean power would define an arbitrary price for natural resources5 e3tracting which diminished national natural capital! %he debate regarding &human resources& versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital! :ver time the <nited Cations have come to more generally support the developing nations' point of view5 and have re'uested significant offsetting &foreign aid& contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades5 professions5 and the arts! *n e3treme version of this view is that historical ine'uities such as *frican slavery must be compensated by current developed nations5 which benefited from stolen &human resources& as they were developing! %his is an e3tremely controversial view5 but it echoes the general theme of converting human capital to &human resources& and thus greatly diminishing its value to the host society5 i!e! &*frica&5 as it is put to narrow imitative use as &labor& in the using society! 1n a series of reports of the <C 4ecretary-Beneral to the Beneral *ssembly over the last decade "e!g! *A/DA#D) ()@@#)$5 a broad inter sectoral approach to developing human resourcefulness has been outlined as a priority for socio-economic development and particularly anti-poverty strategies! %his calls for strategic and integrated public policies5 for e3ample in education5 health5 and employment sectors that promote occupational skills5 knowledge and performance enhancement! 1n the very narrow conte3t of corporate &human resources&5 there is a contrasting pull to reflect and re'uire workplace diversity that echoes the diversity of a global customer base! (oreign language and culture skills5 ingenuity5 humor5 and careful listening5 are e3amples of traits that such programs typically re'uire! 1t would appear that these evidence a general shift to the human capital point of view5 and an acknowledgment that human beings do contribute much more to a productive enterprise than &work&2 they bring their character5 their ethics5 their creativity5 their social connections5 and in some cases even their pets and children5 and alter the character of a workplace! %he term corporate culture is used to characterize such processes! %he traditional but e3tremely narrow conte3t of hiring5 firing5 and ob description is considered a )@th century anachronism! Most corporate organizations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above! 4ome of these5 in turn5 deprecate the term &human resources& as useless! 1n general the abstractions of macro-economics treat it this way - as it characterizes no mechanisms to represent choice or ingenuity! 4o one interpretation is that &firm-specific human capital& as defined in macro-economics is the modern and correct definition of &human resources& - and that this is inade'uate to represent the contributions of &human resources& in any modern theory of political economy!

Human resource development

1n terms of recruitment and selection it is important to consider carrying out a thorough ob analysis to determine the level of skillsAtechnical abilities5 competencies5 fle3ibility of the employee re'uired etc! *t this point it is important to consider both the internal and e3ternal factors that can have an effect on the recruitment of employees! %he e3ternal factors are those out-with the powers of the organization and include issues such as current and future trends of the labor market e!g! skills5 education level5 government investment into industries etc! :n the other hand internal influences are easier to control5 predict and monitor5 for e3ample management styles or even the organizational culture! 1n order to know the business environment in which any organization operates5 three ma or trends should be considered2

Demograp*ics / t*e c*aracteristics of a population0)or$force' for e1ample' age' gender or social class. T*is t pe of trend ma *ave an effect in relation to pension offerings' insurance pac$ages etc. Diversit / t*e variation )it*in t*e population0)or$place. &*anges in societ no) mean t*at a larger proportion of organi2ations are made up of 3(a( 4(oomers3 or older emplo ees in comparison to t*irt ears ago. 5lso' over recent ears organi2ations *ave *ad to (ecome more diverse in t*eir emplo ment practices to cope )it* t*e lo)er )or$ et*ic of t*e ne)er generations. T*e service industr for e1ample' *as em(raced t*ose 3(a( 4(oomers3 desiring to reenter t*e )or$force. Traditional advocates of 3)or$place diversit 3 simpl advocate an emplo ee (ase t*at is a mirror reflection of t*e ma$e4up of societ insofar as race' gender' se1ual orientation' etc. T*ese advocates focus on t*e social engineering t*eor )it*out understanding t*e more important points6 diversit of ideas to prevent stagnation of products and (usiness development7 e1panding t*e customer (ase t*roug* 3outreac*37 and profit. 5larmists and advocates of social engineering t*eor cite a 3rise in discrimination' unfair dismissal and se1ual0racial *arassment cases3 as an indicator of t*e need for more diversit legislation. 8*ile suc* measures *ave a significant effect on t*e organi2ation' t*e effect little or no real c*ange in advancing diversit of ideas in t*e )or$place. 5nti4discrimination la)s and regulations do re9uire (usinesses to underta$e a cost4(enefit anal sis. T*e result of t*is anal sis is often to adopt an approac* t*at generall recogni2es gender' racial' and se1ual orientation diversit as a c*eaper alternative to fig*ting endless litigation. "n summar ' diversit ' (ased on social engineering :is a(out creating a )or$ing culture t*at see$s' respects and values difference; )it*out regard to *o) diversit increases productive and unit of effort. S$ills and 9ualifications / as industries move from manual to a more managerial professions so does t*e need for more *ig*l s$illed graduates. "f t*e mar$et is 3tig*t3 <i.e. not enoug* staff for t*e =o(s>' emplo ers )ill *ave to compete for emplo ees ( offering financial re)ards' communit investment' etc.

1n regard to how individuals respond to the changes in a labour market the following should be understood2

?eograp*ical spread / *o) far is t*e =o( from t*e individual@ T*e distance to travel to )or$ s*ould (e in line )it* t*e pa offered ( t*e organi2ation and t*e transportation and infrastructure of t*e area )ill also (e an influencing factor in deciding )*o )ill appl for a post. Accupational structure / t*e norms and values of t*e different careers )it*in an organi2ation. Ma*one 1+%+ developed 3 different t pes of occupational structure

namel craft <lo alt to t*e profession>' organi2ation career <promotion t*roug* t*e firm> and unstructured <lo)er0uns$illed )or$ers )*o )or$ )*en needed>.

?enerational difference /different age categories of emplo ees *ave certain c*aracteristics' for e1ample t*eir (e*avior and t*eir e1pectations of t*e organi2ation.

9hile recruitment methods are wide and varied5 it is important that the ob is described correctly and that any personal specifications are stated! Eob recruitment methods can be through ob centres5 employment agenciesAconsultants5 headhunting5 and localAnational newspapers! 1t is important that the correct media is chosen to ensure an appropriate response to the advertised post!

Modern concept of human resources


%hough human resources have been part of business and organizations since the first days of agriculture5 the modern concept of human resources began in reaction to the efficiency focus of %aylorism in the early #6@@s! -y #6)@5 psychologists and employment e3perts in the <nited 4tates started the human relations movement5 which viewed workers in terms of their psychology and fit with companies5 rather than as interchangeable parts! %his movement grew throughout the middle of the )@th century5 placing emphasis on how leadership5 cohesion5 and loyalty played important roles in organizational success! *lthough this view was increasingly challenged by more 'uantitatively rigorous and less &soft& management techni'ues in the #6D@s and beyond5 human resources had gained a permanent role within an organization!

Human resource management systems


Human Resource Management Systems HRMS! "HRMS#5 Human Resource $nformation Systems HR$S#5 HR Technology or also called HR modules5 shape an intersection in between human resource management (HRM) and information technology! 1t merges HRM as a discipline and in particular its basic HR activities and processes with the information technology field5 whereas the programming of data processing systems evolved into standardised routines and packages of enterprise resource planning (=R0) software! :n the whole5 these =R0 systems have their origin on software that integrates information from different applications into one universal database! %he linkage of its financial and human resource modules through one database is the most important distinction to the individually and proprietary developed predecessors5 which makes this software application both rigid and fle3ible!

Purpose
%he function of Human Resources departments is generally administrative and common to all organizations! :rganizations may have formalized selection5 evaluation5 and payroll processes! =fficient and effective management of &Human +apital& has progressed to an increasingly imperative and comple3 process! %he HR function consists of tracking e3isting employee data which traditionally includes personal histories5 skills5 capabilities5 accomplishments and salary! %o reduce the manual workload of these administrative activities5 organizations began to electronically automate many of these processes by

introducing specialized Human Resource Management 4ystems! ;ue HR e3ecutives rely on internal or e3ternal 1% professionals to develop and maintain an integrated HRM4! -efore the &client-server& architecture evolved in the late #67@s5 many HR automation processes were relegated to mainframe computers that could handle large amounts of data transactions! 1n conse'uence of the high capital investment necessary to purchase or program proprietary software5 these internally-developed HRM4 were limited to organizations that possessed a large amount of capital! %he advent of client-server5 *pplication 4ervice 0rovider5 and 4oftware as a 4ervice or 4aa4 Human Resource Management 4ystems enabled take increasingly higher administrative control of such systems! +urrently Human Resource Management 4ystems encompass2
1. Pa rolls 2. 8or$ Time 3. Benefits 5dministration 4. CR management "nformation s stem 5. Recruiting !. Training0 Dearning Management S stem DMS

%he Payroll module automates the pay process by gathering data on employee time and attendance5 calculating various deductions and ta3es5 and generating periodic pay che'ues and employee ta3 reports! ;ata is generally fed from the human resources and time keeping modules to calculate automatic deposit and manual che'ue writing capabilities! %his module can encompass all employee-related transactions as well as integrate with e3isting financial management systems! %he %or& Time gathers standardized time and work related efforts! %he most advanced modules provide broad fle3ibility in data collection methods5 labour distribution capabilities and data analysis features! +ost analysis and efficency metrics are the primary functions! %he Benefits Administration module provides a system for organizations to administer and track employee participation in benefits programs! %hese typically encompass5 insurance5 compensation5 profit sharing and retirement! %he HR management module is a component covering many other HR aspects from application to retirement! %he system records basic demographic and address data5 selection5 training and development5 capabilities and skills management5 compensation planning records and other related activities! ?eading edge systems provide the ability to &read& applications and enter relevant data to applicable database fields5 notify employers and provide position management and position control! Human resource management function involves the recruitment5 placement5 evaluation5 compensation and development of the employees of an organisation! 1nitially5 businesses used computer based information system to2

produce pa c*ec$s and pa roll reports7 maintain personnel records7 pursue Talent Management.

:nline Recruiting has become one of the primary methods employed by HR departments to garner potential candidates for available positions within an organization! %alent Management systems typically encompass2

anal 2ing personnel usage )it*in an organi2ation7 identif ing potential applicants7 recruiting t*roug* compan 4facing listings7 recruiting t*roug* online recruiting sites or pu(lications t*at mar$et to (ot* recruiters and applicants.

%he significant cost incurred in maintaining an organized recruitment effort5 cross-posting within and across general or industry-specific ob boards and maintaining a competitive e3posure of availabilities has given rise to the development of a dedicated *pplicant %racking 4ystem5 or '*%4'5 module! %he 'Training Module' provides a system for organizations to administer and track employee training and development efforts! %he system5 normally called a ?earning Management 4ystem if a stand alone proeduct5 allows HR to track education5 'ualifications and skills of the employees5 as well as outlining what training courses5 books5 +;s5 web based learning or materials are available to develop which skills! +ourses can then be offered in date specific sessions5 with delegates and training resources being mapped and managed within the same system! 4ophisticated ?M4 allow managers to approve training5 budgets and calendars alongside performance management and appraisal metrics! Many organizations have gone beyond the traditional functions and developed human resource management information systems5 which support recruitment5 selection5 hiring5 ob placement5 performance appraisals5 employee benefit analysis5 health5 safety and security5 while others integrate an outsourced *pplicant %racking 4ystem that encompasses a subset of the above!

Workforce planning
Strategic %or&force Planning involves analyzing and forecasting the talent that companies need to e3ecute their business strategy5 proactively rather than reactively5 it is a critical strategic activity5 enabling the organization to identify5 develop and sustain the workforce skills it needs to successfully accomplish its strategic intent whilst balancing career and lifestyle goals of its employees! 4trategic 9orkforce 0lanning is a relatively new management process that is being used increasingly to help control labour costs5 assess talent needs5 make informed business decisions5 and assess talent market risks as part of overall enterprise risk management! 4trategic workforce planning is aimed at helping companies make sure they have the right people in the right place at the right time and at the right price %hrough 4trategic 9orkforce 0lanning organizations gain insight into what people the organization will need5 and what people will be available to meet those needs! 1n creating this understanding of the gaps between an organizationFs demand and the available workforce

supply5 organizations will be able to create and target programmes5 approaches and develop strategies to close the gaps!
o

'ifferent Types of Strategic %or&force Planning


4trategic 9orkforce 0lanning is fundamentally different from many processes in that it is not prescriptive5 se'uential or linear! %here are various approaches to 9orkforce 0lanning

Workforce analytics approach:

%he focus is to analyse current and historical employee data to identify key relationships among variables and use this to provide insight into the workforce they need for the future!!
Modeling approach:

%his approach incorporates forecasting and scenario planning! (orecasting uses 'uantitative data to create forecasts incorporating multiple what-if and modeling the future! 4cenario 0lanning being the more useful tool where there are uncertainties5 therefore incorporating 'uantitative and 'ualitative!
Segmentation approach:

-reaking the workforce into segments along the lines of their obs and determining relevance to strategic intent! 0rovides a techni'ue for prioritizing!

Steps in %or&force Planning


%hough there is no definitive G4tart hereF activity for any of the approaches to 4trategic 9orkforce 0lanning5 there are five fundamentals activities that most 9orkforce 0lan models have2

Environment Scan &urrent 8or$force Profile Euture 8or$force Fie) 5nal sis and Targeted Euture &losing t*e gaps

Environment Scan

=nvironment 4canning is a form of business intelligence! 1n the conte3t of 9orkforce 0lanning it is used to identify the set of facts or circumstances that surround a workforce situation or event!
Current Workforce Profile

+urrent 4tate is a profile of the demand and supply factors both internally and e3ternally of the workforce the organization has GtodayF!
Future Workforce View

(uture Hiew is determining the organizationFs needs considering the emerging trends and issues identified during the =nvironment 4canning! (uture Hiew is often where the different approaches identified above are applied2 Iuantitative futuring2 understanding the future you are currently tracking to by forecastingJ Iualitative futuring2 scenario planning potential alternative futures in terms of capabilities and demographics to deliver the business strategy!
nalysis and !argeted Future

Iualitative and 'uantitative futuring creates the content for an organizational unit to analyse and identify critical elements! *s the critical elements are identified the %argeted (uture begins to take form! %he targeted future is the future that the organization is going to target as being the best fit in terms of business strategy and is achievable given the surrounding factors (internalAe3ternal5 supplyAdemand)!
Closing the "aps

+losing the gaps is about the people management (human resources) programs and practices that deliver the workforce needed for today and tomorrow! %he process is about determining appropriate actions to close the gaps and therefore deliver the targeted future! %here are 7 key areas that +losing the Baps needs to focus on Resourcing5 ?earning and ;evelopment5 Remuneration5 1ndustrial Relations5 Recruitment5 Retention5 >nowledge Management5 Eob design!