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HUMAN RESOURCE

MANAGEMENT

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HUMAN RESOURCE MANAGEMENT DEFINED

Human resource management (HRM) is a 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 its objectives.

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FEATURES OF HRM

Strategic: Coherent: Commitment:


Integrate business Integrated and Emphasis on gaining
and HR strategy mutually commitment to the
supporting HR organizations
policies and mission and values
practices

People Unitarist Line managers


treated as approach: deliver HRM:
assets: Management Belief that HRM is
and employees essentially the
Focus on
share the same responsibility of line
developing human
interests managers
capital

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GOALS OF HRM

Enhance
Achieve high motivation, Achieve
performance commitment human capital
through and job advantage
people engagement

Attract and
retain the
Improve
skilled,
knowledge
committed and
sharing
motivated people
required

Develop a
Value
co-operative and
Increase people
productive
capabilities according
employee
and potential to their
relations
contribution
climate

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VERSIONS OF HRM

Hard Soft
Emphasis on the need
Treating employees
to develop a high-
rationally
commitment, high-trust
as as a key resource
organization focus
from which competitive
on mutuality,
advantage can be
communication and
obtained
involvement

Hard/soft
Using a mix of hard and soft
approaches

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THE HRM SYSTEM
Human Human resource management: Corporate
capital philosophy, strategy, policies, processes social
management and practices responsibility

People Learning and Reward Employee


Organization
resourcing development management relations

Organizational Job evaluation Industrial


Human resource
Design learning and market surveys relations
planning

Recruitment & Individual Grade and pay Employee


Development learning
selection structures voice

Talent Management Contingent


Job design Development Communications
management pay

Employee
Knowledge Health and safety Performance benefits
HR services
management and welfare management
THE MATCHING MODEL OF HRM

The matching model of HRM as developed by Fombrun, Titchy, and


Devanna (1984) is illustrated below.

Rewards

Performance Performance
Selection
management

Development

Adapted from Fombrun et al, Strategic Human Resource Management, Wiley, 1984

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THE HARVARD FRAMEWORK
The main contention of the Harvard School of Michael Beer and his colleagues was that: Today,
many pressures are demanding a broader, more comprehensive and more strategic perspective
with regard to the organizations human resources [This involves] the consideration of people
as potential assets rather than variable costs.Their framework is modelled below.

Stakeholder
interests:
shareholders
management
employees
government
unions Long-term
HRM policy HR outcomes:
choices: consequences:
commitment individual well-
employee influence
Situational factors: human resource congruence being
workforce flow Organizational
characteristics cost-effectiveness effectiveness
reward systems
business work systems societal well-
strategy and being
conditions
management
philosophy
labour market
unions
task technology
laws and social
Source: M Beer et al, Managing Human Assets, The Free Press, 1984
values
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THE DAVID GUEST MODEL OF THE LINK
BETWEEN HRM AND PERFORMANCE

HR
effectiveness

Business strategy Quality of


HR outcomes: goods and
employee services
HR practices competence, Financial
commitment performance
and flexibility Productivity
HR strategy

Source: Guest et al, Effective People Management, CIPD, 2000

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THE BATH PEOPLE AND PEFORMANCE MODEL

Training and Performance Career


Job security
development management opportunity

Recruitment and
selection Ability and skill

Pay Front-line Organizational Discretionary


satisfaction Motivation and management: commitment behaviour
incentive - Implementing
- enacting Motivation
Worklife - leading Performance
balance - controlling Job satisfaction outcomes
Opportunity to
participate
Job challenge/
autonomy

Teamworking Involvement

Source: J Purcell et al, Understanding the People


and Performance Link, CIPD, 2003
Communications
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HOW HR CAN MAKE AN IMPACT ON PERFORMANCE

Develop and successfully implement high-performance work practices,


particularly those concerned with job and work design, flexible working,
resourcing, employee development, reward and giving employees a voice.
Formulate a clear vision and set of values (the big idea) and ensure that it is
embedded, enduring, collective, measured and managed.
Develop a positive psychological contract and means of increasing the
motivation and commitment of employees.
Formulate and implement policies that meet the needs of individuals and create
a great place to work.
Provide support and advice to line managers on their role in implementing HR
policies.
Manage change effectively.

Source: J Purcell et al, Inside the Box: How people management impacts on organizational performance, CIPD,
2003

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ROLE OF THE HR FUNCTION

The role of the HR function is to enable the organization to achieve its


objectives by taking initiatives and providing guidance and support on all
matters relating to its employees. The basic aim is to ensure that management
deals effectively with everything concerning the employment and development
of people and the relationships that exist between management and the
workforce. A further key role for the HR function is to play a major part in the
creation of an environment that enables people to make the best use of their
capacities and to realize their potential to the benefit of both the organization
and themselves.

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A NEW MANDATE FOR HUMAN RESOURCES

1. HR should become a partner with senior and line managers in strategy


execution.
2. HR should become an expert in the way work is organized and executed.
3. HR should become a champion for employees.
4. HR should become an agent for continuous transformation.

Source: D Ulrich, A new mandate for human resources, Harvard Business Review, JanFeb 1998

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ROLES OF HR PROFESSIONALS

Business partner: sharing responsibility with their line


management colleagues for the success of the enterprise.
Strategist: addressing major long-term issues affecting the
management and development of people and the employment
relationship.
Interventionist/innovator: developing new approaches to people
management.
Internal consultant: analysing and diagnosing problems and
proposing solutions.
Monitor: ensuring that the organizations HR policies are
implemented properly and consistently.

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VIEWS ON THE STRATEGIC BUSINESS PARTNER CONCEPT
My credibility depends on The CIPD thinks that we will
running an extremely efficient all be strategic business
and cost-effective partners, and were not you
administrative machine If I know. We have to deal with
dont get that right, and day-to-day HR issues that
consistently, then you can arise in the business.
forget about any big ideas.
Student practitioner
HR Director

Give me a break!, its so demeaning.


The term worries me to death. HR has to be an
How many people in marketing or
integral and fundamental part of developing the
finance have to say they are a
strategy of the business. I dont even like the
partner in the business? Why do we
term close to the business because, like
have to think that were not an
business partner, it implies we are working
intimate part of the business, just like
alongside our line management colleagues but
sales, manufacturing and
on a separate track, rather than people
engineering? I detest and loathe the
management being an integral part of the
term and I wont use it.
business.
Tim Miller, Standard Chartered Bank
Alex Wilson, BT

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HRS STRATEGIC ROLES

Formulate integrated
HR strategies

Work with line


managers to
Contribute to the support the
development of achievement of
business strategies their business
goals

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HRM MODELS: TYSON AND FELL
HR activities are largely routine employment
and day-to-day administration. Policies are
Clerk of works
short-term and ad hoc.

The HR department will use fairly sophisticated


systems. The HR manager is likely to be a
Contracts manager professional or very experienced in industrial
relations but will not be on the board and will act
mainly in an interpretative, not a creative or
innovative role.
HR policies exist as part of the corporate
strategy. Human resource planning and
Architect
development are important concepts and a
long-term view is taken. The head of HR is
probably on the board, with power derived from
professionalism and contribution to the
business.

Source: S Tyson and A Fell, Evaluating the Personnel Function, Hutchinson, 1986

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HRM MODELS: STOREY

Strategic

CHANGE MAKERS ADVISERS

Interventionary Non-interventionary

REGULATORS HANDMAIDENS

Tactical

Change makers (interventionary/strategic) which is close to the HRM model.


Advisers (non-interventionary/strategic) who act as internal consultants, leaving much of HR practice to line managers.
Regulators (interventionary/tactical) who are managers of discontent concerned with formulating and monitoring
employment rules.
Handmaidens (non-interventionary/tactical) who merely provide a service to meet the needs of line managers.

Source: J Storey, New Developments in the Management of Human Resources, Blackwell, 1992

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HRM MODELS: REILLY

Strategic

STRATEGIST/INNOVATOR

CONTRIBUTION
ADVISER/CONSULTANT

ADMINISTRATOR/CONTROLLER
Tactical

Short Long
TIME ORIENTATION

The changing role of the HR practitioner

Source: P Reilly, HR Services and the Re-alignment of HRM, Institute for Employment Studies, 2000

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HRM MODELS: CALDWELL

Caldwell concentrates on the role of HR managers as change agents and has


identified four types:
1. Change champions who envision, lead or implement strategic
change.
2. Change adapters who act as reactive pragmatists who adapt
the vision to the realities of the organization and view
organizational change as a slow, iterative process.
3. Change consultants who implement a discrete change project
or the key stages of an HR change initiative.
4. Change synergists who strategically coordinate, integrate and
deliver large-scale and multiple change projects across the
whole organization.

Source: R Caldwell, Champions, adapters, consultants and synergists: the new change agents in HRM, Human
Resource Management Journal, 11 (3), 2002

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COMPETENCY FRAMEWORK FOR HR SPECIALISTS
Business and Understands: (1) the business environment, the competitive pressures it faces and its critical
cultural awareness success factors, (2) the business key activities and processes and how these affect business
strategies, (3) the culture (core values and norms) of the business, (4) how HR policies and
practices can impact on business performance puts this understanding to good use.
Strategic capability (1) Seeks involvement in business strategy formulation and contributes to the development of
the strategy, (2) understands how HR can support the achievement of the business strategy, (3)
contributes to the development for the business of a clear vision and set of integrated values,
(4) develops and implements coherent HR strategies that are integrated with the business
strategy and one another.
Organizational (1) Contributes to the planning and implementation of cultural change and organizational
effectiveness development programmes, (2) helps to develop resource capability by ensuring that the
business has the skilled, committed and well-motivated workforce it needs, (3) helps to develop
process capability by influencing the design of work systems to make the best use of people,
(4) contributes to the development of knowledge management processes.
Internal consultancy (1) Carries out the analysis and diagnosis of people issues and proposes practical solutions, (2)
adopts interventionist style to meet client needs; acts as catalyst, facilitator and expert as
required, (3) uses process consultancy approaches to resolve people problems, (4) coaches
clients to deal with own problems; transfers skills.
Service delivery (1) Anticipates requirements and sets up appropriate services to meet them, (2) provides
efficient and cost-effective services in each HR area, (3) responds promptly and efficiently to
requests for HR services, help and advice, (4) promotes the empowerment of line managers to
make HR decisions but provides guidance as required.
Continuous (1) Continually develops professional knowledge and skills, (2) benchmarks good HR practice,
professional (3) keeps in touch with new HR concepts, practices and techniques, (4) demonstrates
development understanding of relevant HR practices.

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EVALUATING THE HR FUNCTION
General criteria contribution to organizational effectiveness
achievement of specified goals
specified quantified measures
stakeholder perspective (management, line managers and employees)

Organizational quantified added value per employee


criteria added value per of employment costs
sales value per employee
costs per employee

Employee behaviour retention and turnover rates


criteria absenteeism
frequency/severity rates of accidents
ratio of grievances to number of employees
time lost through disputes
number of references to employment tribunals

HR function service-level average time to fill vacancies


criteria time to respond to applicants
cost of advertisements per reply/engagement
training hours/days per employee
time to respond to and settle grievances
cost of induction training per employee
cost of benefits per employee

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TEN WAYS OF ENSURING THAT HR INNOVATES
EFFECTIVELY

1. Be clear on what has to be achieved and why.


2. Ensure that what you do fits the strategy, culture and circumstances of the
organization.
3. Dont follow fashion do your own thing.
4. Keep it simple over-complexity is a common reason for failure.
5. Dont rush it will take longer than you think.
6. Dont try to do too much at once an incremental approach is generally
best.
7. Assess resource requirements and costs.
8. Pay close attention to project planning and management.
9. Remember that the success of the innovation rests as much on the
effectiveness of the process of implementation (line manager buy-in and
skills are crucial) as it does on the quality of the concept, if not more so.
10. Pay close attention to change management communicate, involve and
train.

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