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The Practice of Human Resource Management
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| On completing this chapter you should be able to define these key concepts. You should also understand: | |
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Introduction
The practice of Human Resource Management (HRM) is concerned with all aspects of how people are employed and managed in organizations. It covers activities such as:
- strategic HRM;
- human capital management;
- knowledge management;
- organization development;
- resourcing (human resource planning, recruitment and selection, and talent management);
- performance management;
- learning and development;
- reward management
- employee relations;
- employee well-being.
HRM can be described as a strategic, integrated and coherent approach to the employment, development and well-being of the people working in organizations. It has a strong conceptual basis drawn from the behavioural sciences and from strategic management, human capital and industrial relations theories. This foundation has been built with the help of a multitude of research projects.
The aims of this chapter are to provide a general introduction to the practice and underpinning concepts of HRM and to outline the HRM roles of line managers and the Human Resources (HR) function.
The philosophy of HRM
As originally conceived by the pioneers in the 1980s, the concept of HRM was based on a philosophy which was fundamentally different from the personnel management practices of the time. Beer et al (1984) believed that ‘Today, many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization’s human resources… These pressures have created a need for a longer-term perspective in managing people and consideration of people as potential assets rather than merely a variable cost.’
Beer and his colleagues (the Harvard school) were the first to underline the HRM tenet that it belongs to line managers. They suggested that HRM has two characteristic features, first, that line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, and second, that HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing.
Fombrum et al (1984) held that HR systems and the organization structure should be managed in a way that is congruent with organizational strategy.
A full explanation of HRM philosophy by Legge (1989) stated that HRM consists of the following propositions:
That human resource policies should be integrated with strategic business planning and used to reinforce an appropriate (or change an inappropriate) organizational culture, that human resources are valuable and a source of competitive advantage, that they may be tapped most effectively by mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the ‘adaptive organization’s’ pursuit of excellence.
The philosophy underpinning this notion of HRM provided a new vision which was strongly criticized by many commentators during the 1990s (see the critical evaluation of HRM at the end of this chapter). It was supposed to be substantially different from old-fashioned personnel management, a term which has virtually disappeared since then, although in some quarters the term ‘people management’ has been adopted, possibly by those who dislike the connotations of ‘human resources’ with its apparent emphasis on exploitation and treating people as factors of production. However, whether it is called human resource management or people management, the essential nature of the ways in which organizations manage and relate to their employees has not always changed significantly from that of personnel management, although new techniques may have been introduced. In 2000 I asked the question ‘The name has changed but has the game remained the same?’ and answered it with a broad affirmative.
A more recent and less philosophical reference to HRM was made by Boxall et al (2007), who defined it as ‘The management of work and people towards desired ends.’
The purpose of HRM
The overall purpose of HRM (or people management) is to ensure that the organization is able to achieve success through people. HRM aims to increase organizational effectiveness and capability – the capacity of an organization to achieve its goals by making the best use of the resources available to it. Ulrich and Lake (1990) remarked that ‘HRM systems can be the source of organizational capabilities that allow firms to learn and capitalize on new opportunities.’ The following policy goals for HRM were suggested by David Guest.
Policy goals of HRM
- Strategic integration: the ability of the organization to integrate HRM issues into its strategic plans, ensure that the various aspects of HRM cohere, and provide for line managers to incorporate an HRM perspective into their decision making.
- High commitment: behavioural commitment to pursue agreed goals, and attitudinal commitment reflected in a strong identification with the enterprise.
- High quality: this refers to all aspects of managerial behaviour which bear directly on the quality of goods and services provided, including the management of employees and investment in high-quality employees.
- Flexibility: functional flexibility and the existence of an adaptable organization structure with the capacity to manage innovation.
Source: Guest (1991).
The policy goals for HRM identified by Caldwell (2001) included managing people as assets which are fundamental to the competitive advantage of the organization, aligning HRM policies with business policies and corporate strategy, and developing a close fit of HR policies, procedures and systems with one another.
HRM also has an ethical dimension, which means that it expresses its concern for the rights and needs of people in organizations through the exercise of social responsibility.
The diversity of HRM
There are no universal characteristics of HRM. Many models exist, and practices within different organizations are diverse, often only corresponding to the conceptual version of HRM in a few respects. Boxall et al (2007) remarked that ‘Human resource management covers a vast array of activities and shows a huge range of variations across occupations, organizational levels, business units, firms, industries and societies.’
A distinction was made by Storey (1989) between the ‘hard’ and ‘soft’ versions of HRM. The hard version of HRM emphasizes that people are important resources through which organizations achieve competitive advantage. These resources have therefore to be acquired, developed and deployed in ways that will benefit the organization. The focus is on the quantitative, calculative and business-strategic aspects of managing human resources in as ‘rational’ a way as for any other economic factor.
The soft version of HRM has its roots in humanism – an approach devoted to human interests which views people as responsible and progressive beings. It also trace its origins to the human relations school,...