Human Resource Management

This empowerment is not just the HRM showing his acquiescence to the needs of the workers as they struggle against the boredom of work. Rather it is the constant pressure to cut costs, improve quality and productivity. With a reduction in the need for supervision there is thus less needs for supervisors – and hence there will be a cut in wage costs.

With the reduction in middle managers there has been a shift in power, a disempowerment from the Human Resources professionals to the line managers. Policy related issues will go to directors, but day-to-day decisions may be taken by the team leaders of autonomous work groups.

The objectives of Human Resource Management

1. As with all departments, the overall role of the Human Resource Department is to contribute towards the company objectives.  
2. ‘The bottom line in Human Resource Management is profitability and financial performance’
   Source: Fernie & Metcalfe: London School of Economics  
3. ‘To help a company achieve its business strategy by maximizing the performance of its employees. Better management-employee relations are not necessarily a sign of success. The assumed validity of the notion of management-employee relations is indicative of the continued prevalence of command-control management style. Individuals empower themselves when they recognise the self-interest in the job they are performing. Individuals do not take a job just to further the business goals of the company – they take a job to further their personal GOALS. Only when the two coincide can a company hope to maximise the commitment of its people and thus facilitate the attainment of its business objectives’
   Source: Tom Barry Managing Director of Blessing/White Performance Improvement, Windsor)

It is important to clarify the distinction between personnel management and human resource management (HRM).  Traditional personnel management can be traced to the post World War One ‘welfare tradition’ of concern for the basic needs of employees. HRM on the other hand

• is explicitly linked with corporate strategy;
• seeks to obtain the commitment of employees rather than their compliance;
• obtains employee commitment through an integrated approach to human resource policies (for example, reward, appraisal, selection, training); and
• is owned by line managers, not personnel specialists, as a means of fostering integration.

People want pay and other things from work; Organisation wants skills, labour, ideas, responsibilities, commitment, interest.

The psychological contract is the set of unwritten rules, such as “the company expects to stay in business for the foreseeable future” and “don’t sell company secrets” – these things aren’t written anywhere.

HRM sits at the top of a hierarchy, as an influencing factor:

Personnel is more concerned with maintaining rules and records, and sticking to procedures. HRM is about thinking to the future! Of course the records have to be kept, but that is not the primary purpose of the HRM department.

What does an HR manager do all day?

The same as any manager – forecast, plan, co-ordinate, organise, control and command. More specifically, he foresees the future HR needs, and shapes the workforce to ensure that these needs can be met.

• motivation
• implement Total Quality Management
• training and development
• selection / recruitment
• improve communication
• reward management
• conflict management

These can be split into three basic categories:

Strategic - long-term goals and visions, such as a mission statement.
Managerial - translate strategy into weekly implementations, eg finding staff.
Operational - day-to-day keeping of records / procedures – this was all that a personnel manager did!

Factors leading to successful HRM

• strong visionary leadership
• a sense of purpose (eg mission statement)
• value system (what is important, and how is it communicated?)
• strategic capability, especially at the more senior levels
  • requires decision making
  • allocation of resources (preventing politics)
• specific thrust (action) to follow empty discussion.

What is expected of people?

• initiative (culture must allow it)
• motivation
• willingness to contribute – needs rewards.

These factors cannot be directly measured, but still have a value – therefore, HR is an asset. Is it adding value to the organisation? It is easy to calculate value added for a machine, but what about a person? Again, easy for a sales rep, but a maintenance engineer?

Human capital theory (HCT): people are an asset that adds value, so people should be considered as capital.
Human resource Accounting (HRA): add numbers to this. Didn’t work; is it ethical? It got people thinking.
Expense model: revival of HRA.  Looks at the cost of not employing the right person. Justifies increased training. Improves the cost of recruitment, morale and efficiency.

Where can HRM help?

• management of change
  • not a new subject – look at OD
  • culture change
  • normally done by the HR manager (the change agent)
  • performance management / appraisal
  • competence profiling – list the skills required for each job.
• Continuous improvement
  • improvement of entire range of processes.
  • incremental
• Quality management
  • more than just TQM – quality circles, etc…
  • training is important, and customer care
  • is training a cost, or an investment?

Strategic HRM

What are the similarities and differences between personnel and HRM?

• both are part of the business strategy
• both recognise the importance of line managers
• both recognise the need to respect employees
• both math people to the business’ needs
• both are concerned with day-to-day HR problems, eg recruitment, training, etc…
• personnel is aimed at non-records (how many records does a manager need?), while HRM is for everyone
• personnel has an understanding, but leaves a gap; HRM has a close link with other management
• HRM has a seat on the board, and uses it!

Performance management

• driven by line management, not HRM
• culture: shared corporate goals and values – eg customer care
• not a package deal; must be tailored internally
• applies to all levels of staff

Why bother?

• Making decisions such as promotion, salary, training…
• Better results from individuals
• Show off SWOT for individuals
• Based on MBO objectives

Performance management

• driven by line management, not HRM
• culture: shared corporate goals and values – eg customer care
• not a package deal; must be tailored internally
• applies to all levels of staff

Why bother?

• Making decisions such as promotion, salary, training…
• Better results from individuals
• Show off SWOT for individuals
• Based on MBO objectives