An Introduction to Human Resource Management

John Stredwick

• Publisher: Routledge
• Year: 2013
• ISBN:
  9781135017897
• Edition: 3
• Topic: Business
• Subtopic: Business General
• Index: Business

Since its original publication in 2000, this text has been intended for students studying HRM for the first time. Its major features are its comprehensive and wide-ranging nature which deals with all major aspects of HRM in a down to earth and practical way, alongside the necessary theoretical underpinning. The key strength is its accessibility to students new to the subject area where it combines a clear explanation with numerous relevant and interesting cases and comments. The range and nature of HRM is fully illustrated by a combination of real life and fictional case studies which heighten awareness of key issues involved in HRM today.

This new edition will continue to be appropriate for undergraduate courses, especially first and second year students studying an HRM degree but also for post-graduate courses where many students are new to the field of HRM. It continues to be divided into 12 chapters to provide one topic a week on a modular course, but it may be extended into two semesters.

It has been revised to place a greater emphasis on the role of human resources in improving organisational and employee performance. These revisions include the greater use of technology in resourcing and development areas, the change of emphasis from 'recruitment/selection' to 'talent management' and the use of social networking developments as an aid to HR management. Recent legal developments will also be covered including those relating to age discrimination and the regulation of agency workers.

It will be supported by a supplement for tutors and additional web-based cases and other materials for tutors and students.

1 INTRODUCTION

CHAPTER OBJECTIVES

By the end of this chapter, you will be able to:

■ Understand some of the influences on the business environment that have changed the approaches to employing people.

■ Explain the origins of human resources (HR) and their development over the last 100 years.

■ Evaluate a selection of HR models and appreciate their inherent contradictions.

■ Identify the roles and purpose of human resources in today's environment.

■ Comprehend the links between human resource management (HRM) practices and high performance.

■ Understand the importance of current HR issues, including the drive for talent management, the development of engagement strategies and the uses and difficulties involved in shared services.

METEOR TELECOMS CASE STUDY

Sarah was waiting anxiously in the reception area of the head office of Meteor Telecoms. It was her first day with the organisation as a trainee HR officer and she was not sure what to expect. Her 2:1 degree in Business Studies had pleased her with an especially good mark for her final-year dissertation on the ‘learning organisation’.

She had enjoyed the selection process three months earlier, which had involved an assessment centre spread over a very long day, and had been overjoyed when she was offered the position. This had sounded exciting with considerable opportunities for personal development and promotion in a quickly growing organisation, although the actual job description seemed a little vague. She had been told that her workload would have considerable variety, and she would be joining a number of project groups as well as getting involved in head office recruitment and training. She was to work for David Martin, Personnel Director, who had joined the company six months earlier and had a department of six staff.

After a wait of 20 minutes or so, David's secretary came down to meet her, apologised for the delay and took her into David's office. David explained that he had to make a presentation to the board on future strategy and this meeting had been brought forward so he had been making last-minute preparations. He went on to say that he had obtained agreement from the chief executive that Sarah could sit in on this presentation, which would give her a good introduction to the organisation.

Sarah had been doing her homework on Meteor Telecoms since her offer of employment. She knew that this company, set up 15 years ago, initially manufactured and installed telecommunication equipment but it had moved on to other associated businesses, such as helping companies set up call centres. It had around 2,000 employees, spread over a number of sites around the UK. It went public five years ago with the two founding directors retaining a minority stake. City reports indicated that it was well respected and had kept to its growth forecasts, although the profits were taking longer to realise than had been expected initially.

An hour later, she was sitting in the board room and David had started his presentation. He began by going over the background to the company, its rapid growth, some of the difficulties this had produced and the current issues involved in recruiting, retaining, motivating and managing employees. He explained that the company had now reached a turning point in the way that people resources were managed. In its first 15 years, the growth rate had been such that there was a heavy concentration of recruitment and selection at all levels to get enough skilled employees on board. More recently, training and pay systems had had a higher profile but the activities were disjointed and reactive to the immediate circumstances. Given the tightening of the labour market, the highly competitive market for specific skills and a turnover rate higher than expected, it was time to put together an overall strategy in the people-management area.

The proposal he put forward dealt with the change from a tactical and reactive approach to one that puts people management at the heart of all business initiatives. He gave a number of examples of how this would lead to higher performance of employees and help the company achieve its corporate objectives. The introduction of a competence framework would encourage all employees to focus on the key skills and competencies that lead to business success. The framework would be at the heart of the talent-management initiative to ensure the best people would be recruited, trained and developed in the organisation.

Linking these skills and competencies with a performance-management programme would lead to the identification of training and development needs and the rewarding of high-performing employees. Although trade unions had made little inroads into the business, David warned against complacency and advised a programme of greater employee involvement in planning, decision-making and innovation. There would be a substantial drive to increase the engagement level of all staff, which should reduce the worrying increase in the turnover rate. He continued with further examples and some detailed proposals on each of the major proposals, emphasising that these were HR ‘best practices’ and would have a strong impact on improving performance in the organisation.

The structure of the HR department needed to be re-e xamined. Although big changes had been made eight years earlier with the introduction of the three-legged Ulrich model, he knew that there were some doubts over the operation of the model, especially the distinction between the three groups of HR staff and the effectiveness of the ‘business partnering’ in some parts of the organisation. He wanted a small focus group to investigate the realities of the situation and bring forward ideas on how it should be changed. He especially wanted well-researched ideas on outsourcing of the function and whether introducing any shared-service operations could be feasible.

After the presentation, discussion ranged between David and some directors who remained unconvinced, outlining the major uncertainties inherent in the business and the inability to plan too far ahead, certainly in terms of employment. David pointed out that, no matter which way the business turned, there would still need to be a sizeable core of skilled, flexible and committed employees and, without them, the business would flounder. At the end of the meeting, the chief executive asked David to head up a small team to put up a fully detailed proposal for two months' time, together with an action plan. Sarah left the meeting excited by the opportunities evident in influencing the course of the business.

INTRODUCTION

The opening scenario has taken place in board rooms up and down the country ever since the term ‘human resource management’ was popularised in the mid-1980s. In this chapter, we will first examine the economic and business context that has stimulated so much discussion on the role of employees in the organisation; this will be followed by a brief history of the personnel profession and then an analysis of the various models that have been put forward regarding the role and nature of human resource management. The chapter will end with some examples of human resource strategy in theory and practice, including an analysis of recent developments, including talent management, engagement, outsourcing and shared services, and the technology that can support these initiatives.

THE ECONOMIC AND BUSINESS CONTEXT

For the 15 years up until 2008, there was an unprecedented boom in most of the world's economies with consistent expansions in growth rates, benign inflation and low levels of unemployment. This came to a crashing halt with the world banking and financial crisis leading to a succession of sovereign debt crises in the Western world. Whereas human resource practitioners had spent much of the boom years dealing with a shortage of labour, especially skilled labour (referred to as a ‘talent crisis’), this process was rapidly reversed with the onset of recession, growing unemployment and the need to downsize in most sectors. What appeared to be an unending period of growth, rising living standards and certainty changed abruptly into a period of retrenchment, reducing confidence and considerable uncertainty.

That is not to say that the UK business environment has not changed over the last two decades. Although actual unemployment has been low, employment itself has shown a high degree of variability. Levels of redundancy have been high throughout the period, brought about through structural changes, mainly through the growth of manufacturing and services in the developing world, especially China and India. The number of employees in manufacturing in the UK has reduced by almost a half since 1980. Although the numbers of jobs in the service industries have increased substantially to more than make up the shortfall in manufacturing, many of these jobs are poorly paid, part-time and temporary.

Over a considerable period, the finance sector was one of the great creators of jobs, as London retained its position as one of the top major world financial centres. It provided the base for major hedge fund and private equity activity and still remains a major player in all forms of investment banking, including mergers and takeovers. However, the extended banking and financial crisis, which commenced in 2007, has dented this reputation and numbers employed have contracted sharply.

At the same time, advances in technology have replaced face-to-face contact with automated, Internet and telephone services, which have occurred throughout organisations. Programmes of de-layering (reducing the levels of management and supervision), business process engineering (making processes more efficient and usually reducing administrative and other associated staff) and decentralisation have all created waves of doubt, fear and mistrust among the mass of employees involved. Add to this the constant flux through takeovers, mergers, buy-ins, buy-outs and float-offs, and it is not surprising that being employed is regarded as an insecure occupation.

Even in the public sector, uncertainty has been created with the massive privatisation programmes in the 1980s and 1990s covering the coal, gas, electricity, water, rail, airports and telecommunication industries, together with British Airways, British Aerospace and BP. Furthermore, direct government employment in the Civil Service, local authorities, education and health has been fundamentally altered by outsourcing, the creation of semi-autonomous ‘agencies’, and the complex workings of compulsory competitive tendering and ‘best value’ programmes. The government austerity programmes arising from the need to reduce the public indebtedness have also contributed to the reduction in numbers, estimated at around 400,000, and created a considerable sense of unease among public sector employees unused to insecurity of employment.

Change, therefore, has been the only constant. A number of commentators have analysed the changes in the economic, business and cultural context that are common to almost every organisation and which will have a major influence on employment policies in the foreseeable future:

Rapidly changing tech...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of illustrations
• Preface to the third edition
• Visual tour of An Introduction to Human Resource Management
• 1 Introduction
• 2 Recruitment, Employer Branding and Employer of Choice
• 3 Selection
• 4 Relationships with Employees
• 5 Performance Management
• 6 Rewarding Employees
• 7 Flexible Working
• 8 Learning and Talent Development
• 9 Equal Opportunities and Managing Diversity
• 10 Health, Safety and Employee Well-Being
• 11 An International Perspective
• 12 Human Resource Planning
• Subject index
• Author index