Human Resource Managements Distinctive Employment Approach Commerce Essay
Human resource management is a distinctive approach to employment management which seeks to obtain competitive advantage through the strategic deployment of a highly committed and skilled workforce, using an array of cultural, structural and personnel techniques. (Storey, 1995).
Thus, HRM is mainly a set of policies that are created aiming to obtain the organizational goal through the successful implementation of corporate strategy considering the human resource of the company as the driving force that can make the difference or in other words give the company its most needed competitive advantage. Company needs to balance the aspirations of its people as well as its strategic demands towards making HRM policies.
There have been many models to explain the concept Human Resource Management. One of the important models is Harvard model. The Harvard Framework preferred to see the whole process of HRM from the General Managers point of view (Armstrong, 2003). How they want to see the consequences of every step recognizing the importance of trade-offs between owners, employees and various interest groups (Armstrong, 2003). Here, the HR gets some outcomes as the direct affect of its policy choices and those outcomes brings the consequences that meet the stakeholders interests. It suggests that the general managers should develop a viewpoint, as they provide the strategic vision, of how they wish to see the employee involvement in achieving the goals.
Another important model is Warwick model. As Harvard model is developed in the American context it reflects the American style and way of managing HR but Warwick model reflects the European style (Loosemore et al., 2003). Unlike Harvard model it focuses on external and internal both context and explores how both the internal and external environment influence the HR decisions (Bratton and Gold, 1999).
From Personnel to HRM:
The concept of HRM started getting shape in the early stage of industrial revolution (Bratton and Gold, 2001). Emerging concern of employee rights and the growth of trade union, changing reactions of the workforce and employers towards the public policy, implementation of strict health and safety regulations, increased demands of specialised personnel in the work force along with the technological innovations, scientific and sophisticated approach to managing employees and the ever ending competition in the market played vital role in the emergence of the concept Human Resource Management (Bratton and Gold, 2001). Though the concept is old but the title HRM was given to it only couple of decades back. Before that it was known as Personnel Management. Some scholars say that there is no actual difference between Personnel Management and HRM except the two different names (Storey, 2007; Armstrong, 2003; Torrington et al., 2008).
Along with the emergence of the new economic order in 80s and 90s of last century the approach towards people management changed and the preference of treating personnel moved to individual rather then collective in order to ensure that the highly skilled and loyal employees will give the organization a competitive advantage (Bratton and Gold, 2001). Thus, changing the title is also an approach to give the people management a new image to fit to the changing environment. Torrington and Hall (1991, cited in Armstrong, 2003) sees the distinction as, Personnel Management is workforce centred and therefore directs itself to employees, on the other hand HRM is resource centred concerns itself with the overall human resource needs of the organization.
Storey (2007) shows the detailed differences between Personal Management and HRM in his twenty seven points of differences where he categorized the elements into four-part basic outlines. These are; Beliefs and assumptions, Strategic Aspects, Line Management and Key levers (Storey, 2007). Miller (1998) integrated Storeys twenty seven points into six main points that focuses on the major points of distinction between Personnel Management and Human Resource Management.
Nature of relations
Speed of decision
Table: Personnel Management vs Human Resource Management (Miller, 1998)
So, the distinction between personnel and HR is clear. The biggest change probably is focus. The focus has now shifted from overall performance to individuals. Employee involvement through personal development is now not only highly encouraged but also to ensure it the companies are undertaking different training and development programmes. An early example of this change was set by Ford when it announced its change initiatives that contain statement like employee involvement is our way of life (Storey, 2007).
The Characteristics of HRM:
The attempt of HRM is to manage the people, the most valuable asset of a company, to achieve its goals and objectives. Thus, the typical characteristics of HRM include both the welfare of the company and the welfare of its employee. Armstrong (2003) pointed out some characteristics of HRM, these are;
It integrates the HR and business strategies and emphasizes the need for all strategic fit.
It is commitment oriented as it emphasizes on gaining the committed goals and mission of the organisation.
It attaches diversified cultures and values together and brings harmony in the workplace.
It identifies the potentials of the employee and appoints the task accordingly to ensure the maximum benefits.
It manages and harnesses the potentials of the personnel and brings the best out of them.
It ensures both the happiness of the personnel and happiness of the stakeholders.
The Functions HRM:
The basic HR functions according to Armstrong (2003) and Torrington et al (1991) are:
Human Resource Planning
The management determines the types and the number of human resources it needs to accomplish a task or reach the goal. In this case the management has to consider the financial support available to it.
Recruitment and selection;
Proper recruitment and selection procedure needs to be followed in order to meet the demand of required skills. In this case the necessary skills can be tested through written or oral test or a combination of both.
Reward systems are structured and measured by the company to keep the employee motivated. It may include direct, indirect or psychological reward.
Terms and conditions, policies and opportunities for both parties should be open and written in order to avoid confusion. The HR department has to clearly mention the company policies in the employment contract.
Management of diversity;
As the business is now global the companies need to ensure an environment where employees from different cultural, religious and ethnic groups are treated equal. Again, Fords early realisation prompted them apply policies such as our doors are open to men and women alike without discrimination and without regard to ethnic origin or personal beliefs (Storey, 2007).
Training and development;
To make the employees more efficient and prepare them for higher level of responsibilities the HRM department needs to have a continuous training and development process. Along with the routine process the companies also train their employees during a sudden demand such as an addition of new software or hardware.
Grievance and discipline;
To ensure time keeping, good employee relations, proper behaviour and professional attitudes the HR department formulate company procedures.
Termination of employment relation;
As part of disciplinary action, end of the contract, the part of an employment cut or the relocation of the employee the HRM takes all the necessary actions.
Human resource management is no more limited to managing people, recruiting, selecting, training and all other conventional administrative duties. As the people are the core competitive advantage in todays business, they are evaluated as the brainpower of the company rather than manpower. The way of business competition has become knowledge based (storey et al, 2009). Thus, the human resource department plays a more strategic role today. Apart from all the administrative works Strategic HR participates on planning corporate strategy. It plans out the necessary skills and required effort needed for a particular task to be carried out in future. SHRM also indicates a planned HR policy that integrates the business goal and may encompasses a number of HR strategies to improve the individual, thus business, performance to make the reward system more effective (CIPD , 2010).
Miller (1998) says if a company be able to establish an appropriate fit between strategy and HRM it can be considered as practising strategic HRM.
The business strategy and the strategic human resource management run in parallel, both are informative and communicative. Information available to SHRM about how people are motivated deployed and the availability of skills and knowledge might determine the business strategy, on the other hand when business strategy requires the improvement of customer service this will probably shape the training plans and performance improvement plans (CIPD, 2010).
Approaches to SHRM:
Strategic HRM is mainly a resource based philosophy and this encompasses three possible approaches (Armstrong, 2003). These are explained bellow:
Resource based SHRM: Resource based HRM strategy focuses on the performance of the employee and compare the productivity of its people with the competitors. In this approach learning is highly encouraged and the intellectual capital is developed and nurtured.
High-performance management approach: By developing the skills of the employees and improving the self management capacity and team performance the HR department can actually enhance the overall productivity and ensure customer satisfaction. Here, the quality leadership, vision, benchmarking and decentralization are suggested in order to have greater success (Stevens, 1998; cited in Armstrong, 2003).
High performance approach also require to have a rigorous recruitment and selection procedure, a proper learning and development process and merit pay and profit sharing to encourage high performance (Armstrong, 2003).
High involvement management: This approach says employees are to betreated as partners, their interests should be respected and the