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HRM MGMT3017 UNDERSTANDING HRM

Model, Philosophy & Objectives Distinguishing HRM from Personnel Management Understanding the Strategic Focus

MGMT 3017 - Dion Greenidge, Lecturer

Learning Objective this Unit


By the end of this Unit, you should be able to: 1. Clearly articulate the HRM philosophy. 2. Describe the difference between HRM and Personnel Management. 3. Give concise definitions for HRM. 4. Describe the various models/maps of HRM. 5. Know the history behind HRM.
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Learning Objective this Unit


1. Define the key phases of HRM and detail the various HR activities involved. 5. Link HRM to the strategic planning process. 6. Understand the unitarist perspective of HRM and how it differs from the pluralist perspective. 7. State the major HRM objectives.

MGMT 3017 - Dion Greenidge, Lecturer

What is Human Resource Management? What makes it Unique?

MGMT 3017 - Dion Greenidge, Lecturer

HR should not be defined by what it does but by what it delivers results that enrich the organizations value to customers, investors, and employees David Ulrich

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What and Where are the Origins of HRM?


Has origins in USA back in the 1950s but did not gain wide recognition until beginning of 1980s. UK came on board in late 1980s.

Beardwell & Holden (1997)


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Why did HRM evolve?


Pressures in Product markets in USA during recession of 1980-82. Growing recognition in the USA that Trade Union influence in collective employment was reaching fewer employees. US economy challenged by Japan and others.
Beardwell & Holden (1997)
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Why did HRM evolve?


Attempting to cope with unsatisfactory productivity in USA and UK. Need to create a work situation free of conflict in which both employees and employer worked toward the same goals (unitarist perspective).
Beardwell & Holden (1997)
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The Unitarist vs Pluralist Debate on HRM


Unitarist Perspective Employee and employer share common goals in the workplace. Conflict is not a normal event in the workplace. Pluralist Perspective Employee and employer do not have common goals and conflict is accepted as a normal activity in the workplace. Results from competing interests.
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HRM Definitions
The concept of fit with the strategic thrusts of the organisation HR strategies exist to ensure that the culture, values, structure and processes of the organisation, and the quality, flexibility, motivation and commitment of its members to contribute fully to the achievement of its objectives should match the business strategy Cooke 1990
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HRM Definitions
The attainment of business objectives through the contribution it makes to the creation of an environment in which people commit themselves to and effectively accomplish the tasks assigned to them.
(Nurse)

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HRM Definitions
Strategic HRM is largely about integration; to ensure that HRM is fully integrated into strategic planning; that HRM policies cohere across policy areas and across hierarchies and that HRM practices are accepted and used by line managers as part of their everyday work.
(David Guest)

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Why Is HR Management Important to All Managers?


Personnel mistakes you dont want to make: Having your employees not performing at peak capacity Hiring the wrong person for the job Experiencing high turnover Finding employees not doing their best Having your company taken to court because of your discriminatory actions
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Why Is HR Management Important to All Managers? (cont.)


Personnel mistakes you dont want to make: Having your company cited under federal occupational safety laws for unsafe practices Allowing a lack of training to undermine your departments effectiveness Committing any unfair labor practices

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HRM OBJECTIVES
Employee job satisfaction, self-actualisation and motivation Employee effectiveness and efficiency Improved quality (innovation & Creativity) Cost-effectiveness and competitiveness Labour flexibility

(Ivancevich)
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HRM OBJECTIVES
Employee commitment Increased competence (training & development) Participation and autonomy Creating readiness for change

(Ivancevich)
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HRM OBJECTIVES
Rewards and incentives linked to performance More organic structures Recognition of human resource or people issues at the strategic level

(Ivancevich)
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Five Key Phases of HRM

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Continuous Environmental Scanning and Analysis


Interpreting and analysing changes in the environment and developing the appropriate HR policies and strategies

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Acquisition
HR Planning Internal and External Staffing Employee Orientation and Socialisation

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Development
Training of Employees Management Development Career Development Knowledge Management

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Motivation
Job Design Performance Management Rewards and Compensation Job Evaluation Discipline

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Maintenance/Retention
Commitment Employee safety and Health Employee Relations Industrial Relations

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Human Resource Management Functions

Human Resource 1 Manageme nt Safety and Health


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Staffing
Job Analysis Human Resource Planning Recruitment Selection

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Staffing (Cont.)
Staffing - Process through which organization ensures it always has proper number of employees with appropriate skills in right jobs at right time to achieve organizational objectives Job analysis - Systematic process of determining skills, duties, and knowledge required for performing jobs in organization

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Staffing (Cont.)
Human resource planning - Systematic process of matching internal and external supply of people with job openings anticipated in the organization over specified period of time Recruitment - Process of attracting individuals on a timely basis, in sufficient numbers, and with appropriate qualifications, to apply for jobs with an organization

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Staffing (Cont.)
Selection - Process of choosing from a group of applicants the individual best suited for a particular position and the organization

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Measuring Quality of Hire in Todays Environment


How do you measure quality of hire and set standards for new-hire performance? Quality of hire is stressed these days Developers of automatic tracking systems are actively involved in trying to come up with the answer to the question of quality of hires In a few years, some standards will emerge on how you measure and represent your talent management

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Human Resource Development


Training Development Career Planning Career Development Organizational Development Performance Management Performance Appraisal

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Human Resource Development (Cont.)


Training - Designed to provide learners with knowledge and skills needed for their present jobs Development - Involves learning that goes beyond today's job; more long-term focus Career planning - Ongoing process whereby individual sets career goals and identifies means to achieve them
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Human Resource Development (Cont.)


Career development - Formal approach used by organization to ensure that people with proper qualifications and experiences are available when needed Organization development - Planned and systematic attempts to change the organization, typically to a more behavioral environment
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Human Resource Development (Cont.)


Performance management - Goal-oriented process directed toward ensuring organizational processes are in place to maximize productivity of employees, teams, and ultimately, the organization Performance appraisal - Formal system of review and evaluation of individual or team task performance

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Compensation
Compensation - All rewards that individuals receive as a result of their employment

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Compensation
Direct Financial Compensation - Pay that person receives in form of wages, salaries, bonuses, and commissions Indirect Financial Compensation (Benefits) - All financial rewards not included in direct compensation such as paid vacations, sick leave, holidays, and medical insurance Nonfinancial Compensation - Satisfaction that person receives from job itself or from psychological and/or physical environment in which person works
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Safety and Health


Employees who work in safe environment and enjoy good health are more likely to be productive and yield long-term benefits to organization.
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Safety and Health


Safety - Involves protecting employees from injuries caused by work-related accidents Health - Refers to employees' freedom from illness and their general physical and mental well being

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Employee and Labor Relations


Business is required by law to recognize union and bargain with it in good faith if firms employees want union to represent them Human resource activity is often referred to as industrial relations Most firms today would rather have union-free environment
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Human Resource Research


Human resource research is not separate function. It pervades all HR functional areas.

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Interrelationships of HRM Functions

All HRM functions are interrelated Each function affects other areas

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HRs Changing Role


The metamorphosis of personnel into human resource management reflects the fact that in todays business environment, highly trained and committed employees are often a firms main real sustainable competitive advantage.

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HRs Changing Environment


Globalization
refers to firms tendency to extend their sales, ownership, and/or manufacturing to new markets abroad

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HRs Changing Environment


Technological advances Nature of work
service jobs outsourcing human capital

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HRs Changing Environment


Growing emphasis on knowledge workers and human capital Human capital
refers to the knowledge, education, training, skills, and expertise of a firms workers

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Environment of Human Resource Management Technology Unions Legal Considerations EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT Society

Marketing

Operations Unanticipated Events Unanticipated Events

Economy

Human Resource 1 Management Finance Other Functional Areas

Shareholders

Safety and Health Competition

Customers

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Labor Market1-45

Labor Market
Potential employees located within geographic area from which employees are recruited Always changing

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Legal Considerations
Federal, state and local legislation Court decisions Presidential executive orders

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Society
No longer content to accept, without question, the actions of business Ethics - Discipline dealing with what is good and bad, or right and wrong, or with moral duty and obligation Corporate social responsibility - Implied, enforced or felt obligation of managers to serve or protect interests of groups other than themselves
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Unions
Group of employees who have joined together for purpose of dealing collectively with their employer Becomes a third party when dealing with the company
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Shareholders
Owners of corporation Because they have invested money in firm, they may at times challenge programs considered by management to be beneficial to organization

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Competition
Firms may face intense competition in both their product or service and labor markets Must maintain a supply of competent employees Bidding war often results

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Customers
People who actually use firms goods and services Management has task of ensuring its employment practices do not antagonize members of market it serves Workforce should be capable of providing top-quality goods and services
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Technology
The world has never before seen technological changes occur as rapidly as they are today. Created new roles for HR professionals Additional pressures on them to keep abreast of technology In 2008 survey of CEOs worldwide, 83% ranked change as most important issue confronting their organization
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Cyberwork
Possibility of never-ending workday BlackBerrys, cell phones, text messaging, and e-mail create endless possibilities for communication Some workers believe their employer wants them available 24/7
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Economy
In general, when economy is booming, it is often more difficult to recruit qualified workers. When a downturn is experienced, more applicants are typically available.
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Unanticipated Events
Occurrences in external environment that could not be foreseen Every disaster, whether manmade or by nature, requires a tremendous amount of adjustment with regard to human resource management
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Demographic and Workforce Trends


Labor force growth is not expected to keep pace with job growth Labor force is getting older Shift to nontraditional workers

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Gen Y
May be the most high maintenance workforce in the history of the world Their capacity for using information technology will also make them the most high-performing

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The Strategic Role of Human Resource Management


Main responsibility facing human resource managers is to institute policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic goals

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The Strategic Role of Human Resource Management (cont.)


Strategy
the companys plan for how it will balance its internal strengths and weaknesses with external opportunities and threats in order to maintain a competitive advantage

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HRs Role in Executing Strategy


Study found that mergers and/or acquisitions in which the human resource teams had been involved were more likely to have been successful

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Strategy and HR Albertsons


Albertsons human resource management team chose a computer system from Unicru of Portland, Oregon that collects and analyzes the information entered by applicants online. It ranks applicants based on the extent to which they exhibit the customer-focused traits that predict success in retail jobs and helps track candidates throughout the screening process.

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Two Strategic Human Resource Challenges


1. Focus on boosting competitiveness, reducing costs, and improving employee performance 2. Be more involved in both formulating and implementing company strategy

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Corporate Strategy

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Basics of Strategic Planning


Corporate-level strategy
identifies the portfolio of businesses that comprise the company and the ways in which these businesses relate to each other

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Basics of Strategic Planning


Business-level/competitive strategy
identifies how to build and strengthen the businesss long-term competitive position in the marketplace

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HR and Competitive Advantage


Competitive advantage
any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share

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Basics of Strategic Planning


Functional strategies
identify the basic courses of action that each of the businesss departments will pursue in order to help the business attain its competitive goals

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HRM MODELS/MAPS

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A LOOK AT SOME APPROACHES


1. Devanna et al. 2. Beer et al. 3. David Guest

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The Matching Model of HRM


Political Forces

Economic Forces

Mission & Strategy

Cultural Forces

Economic Forces

Economic Forces

Devanna et al.

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Map of the HRM Territory Stakeholder Interest


Shareholders Management Employees Government Community Unions

HRM Policy
Employee influence HR flow Reward systems Work systems

Situational Factors
Workforce Characteristics Business strategy Management philosophy Labour market Unions Task environment Laws/social values

HR Outcomes Commitment Competence Congruence Costeffectiveness

Long-Term Consequences Individual well-being Org. effectiveness Societal well-being

Beer et al.
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David Guest HRM Process


Strategy Integration High Commitment

E VIRO ME T OF BUSI ESS

High Quality

Flexibility

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The Human Resource Cycle


Rewards

Selection

Performance

Appraisal

Training
Fomburn, Tichy, & Devanna (1984)
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A Model of Human Resources as a Source of Sustained Competitive Advantage


Human resource practices

Human Capital pool

Human resource behaviour

Sustained competitive advantage

Wright, McMahon, & McWilliams (1994)

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Distinguishing HRM from Personnel Management

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Addresses Issues Related to


1. 2. 3. 4. Beliefs and Assumptions Strategic Aspects Line management Key levers

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HRM Philosophy
People as a critical resource to be developed for future benefit to the organisation A resource to be invested in, not controlled.

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PM philosophy
People as an expense to be controlled to ensure profitability of organisation. Is operational in focus and scope.

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Strategic Human Resource Management


Strategic human resource management
formulating and executing HR systems that produce the employee competencies and behaviors the company needs to achieve its strategic aims

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Linking Corporate and HR Strategies

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HRs Role in Formulating Strategy


HR participates by supplying information regarding the companys internal human strengths and weaknesses

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High-Performance Work System


High-performance work system
an integrated set of human resource management policies and practices that together produce superior employee performance

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Seven Interdependent Environmental Forces that have Driven and Directed Change in HRM The HR Responses
Competitive Restructuring Decentralisation Interrnationalisation Acquisitions and Mergers Quality Focus and Processes Technological Change New Concepts of Service management

Skill supply Training and retraining Organisational restructuring Review of work systems Cultural management Selection and Retention Employee relations Rewards Management
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MGMT 3017 - Dion Greenidge, Lecturer

Business Strategy
Defines the direction in which the business is going to achieve sustainable competitive advantage and focuses on activities that will lead to the achievement of [Vision], Mission, meet expectations of owners, manage changes imposed by the external and internal environments, add value through effective use of resources and capitalise on distinctive competences of the organisation. (Cooke 1990)
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Human Resource (HR) Strategies


Creating a strategic focus Developing more integration of activities via project teams Achieving flexibility in response to change Developing a climate of trust and cooperation Need to formalise systems and processes as business grows in size and complexity
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Human Resource (HR) Strategies


Unified remuneration system Achieving appropriate balance between the flexible and informal approach necessary in a rapidly developing and innovative organisation Creating career development Continuous system of training employees Clarifying new roles and responsibilities
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Key Strategies for successful businesses in the Future


Recognising the value of HR Missioning and Co-missioning Career centred and motivational systems Homeostasis: Internal and external balance

Draper (1991)

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Key Strategies for successful businesses in the Future


Appropriate culture Conditions to develop and train each valuable employee Strategic focus of HRM and HRD Focus on high quality and excellence

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A Model of Strategic Change and HRM


Hendry and Pettigrew (1990) developed a model of strategic change & HRM. Model addresses issues of external environmental influences on business organisations, and the impacts on the practice of HRM.
Hendry/Pettigrew
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Key Aspects of Model


The Outer Context Socio-economic. Technical, political-legal & competitive factors/forces. Inner Context Culture, structure, politics, leadership, task-technology & business outputs. Business Strategy Content Objectives, product-market, strategy & tactics.
Hendry/Pettigrew
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Key Aspects of Model


HRM Context Role, Definition, Organisation & HR outputs. HRM Content HR flows, work systems, reward systems & employee relations.

Hendry/Pettigrew
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Linking Forward
Next lecture we will link this section to the HR Acquisition Phase, and look at the topic of HR planning in organisations. This will be covered over a period of two weeks.

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