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PAPER NO. 9: Human Resource Management
MODULE NO.2: Themes and Controversies in Management
Subject COMMERCE
Paper No and Title 9: Human Resource Management
Module No and
Title
2: Themes and Controversies in Management
Module Tag COM_P9_M2
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PAPER NO. 9: Human Resource Management
MODULE NO.2: Themes and Controversies in Management
TABLE OF CONTENTS
1. Learning Outcomes
2. Introduction
3. Themes in HRM
4. Controversies in HRM
5. Summary
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PAPER NO. 9: Human Resource Management
MODULE NO.2: Themes and Controversies in Management
1. Learning Outcomes
After studying this module, you shall be able to
Comprehend the nature of HRM
Analyze the evolution of HRM
Understand the themes in HRM
Understand and analyze the controversies of HRM
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MODULE NO.2: Themes and Controversies in Management
2. Introduction
There is a common belief among the management thinkers that the challenge today is not
technology but the art of managing human beings at work. Some of the thinkers further
emphasise that the future economic and strategic advantage will be taken up by those
organizations which are competitive in managing and retaining talented employees. If we
look at the type of resources which are available for an organization, viz., physical,
organizational and human resources, human resources can be regarded as the most
critical component.
Prior to the World Wars, the personnel function was prevalent where the record keeping
of the employees was the main aspect of it. Post World War II that the productivity of the
employees and thus profitability are directly related to motivation level of the employees,
and hence the human relations movement started. Further a systematic classification of
large number of employees also started with listing of tasks, duties, and responsibilities
through job description. After, this the era of social issues came up wherein the personnel
department was burdened with legislative compliances. No unfair discrimination in
employment practices was looked into, further, the data pertaining to all the employment
practices such as recruitment, training, compensation and benefits thereof had to be
assimilated and recorded. It was about this time i.e., the period of 1960-1980, the
personnel departments were beginning to be called as Human Resource Department, and
the inception of Human Resource Management (HRM) took place. In other words,
effective and correct practices in HRM were starting to affect the “bottom line” of the
firms, so there was a significant growth of HR departments, and computer technology
had advanced to the point where it was beginning to be used. Firms today realize that
innovative and creative employees who hold the key to organizational knowledge provide
a sustainable competitive advantage because unlike other resources, intellectual capital is
difficult to imitate by competitors. Accordingly, the people management function has
become strategic in its importance and outlook and is geared to attract, retain, and engage
talent.
Typical HR programs involve things such as record keeping, recruiting, selection,
training, employee relations, and compensation. However, all these programs involve
multiple activities, and these HR activities can be classified into three broad categories:
transactional, traditional, and transformational (Wright, McMahan, Snell, & Gerhart,
1998). Transactional activities involve day-to-day transactions that have to deal mostly
with record keeping—for example, entering payroll information, employee status
changes, and the administration of employee benefits. Traditional activities involve HR
programs such as planning, recruiting, selection, training, compensation, and
performance management. These activities can have strategic value for the organization if
their results or outcomes are consistent with the strategic goals of the organization.
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PAPER NO. 9: Human Resource Management
MODULE NO.2: Themes and Controversies in Management
Transformational activities are those activities that add
value to the organization—for example, cultural or
organizational change, structural realignment, strategic redirection, and increasing
innovation.
HRM can simply be defined as “A distinctive approach to employment management
which seeks to achieve competitive advantage through the strategic deployment of a
highly committed and capable workforce, using an integrated array of cultural, structural
and personnel techniques” Storey.
3. Themes in HRM
HRM is an area of management which is ever accommodating including changes which
show up during the transformation phase. With changing business environments and
changes which are technology driven, HRM and its parameters also refine and reform. In
this context the themes of HRM can be discussed herein:
Productivity through people: The adoption of ‘high-performance work practices’ which
can also be equated as ‘high-commitment’ or ‘high-involvement’ work practices’ are
intended to achieve better individual, team and organisational performance by increasing
employee commitment and involvement. In the pretext the concept of employee
engagement can also be discussed, wherein an employee experiences high level of
alignment and meaningfulness which ultimately lead to higher job performance and job
involvement (Kumar & Singh 2014; Kumar 2014). These are typically thought of as
comprising ‘bundles’ of sophisticated HR practices in the areas of recruitment and
selection, employee involvement, engagement, commitment, and rewards.
Work Environment: The work environment is becoming more and more dynamic and
so are HRM practices. The new refined working in the organisation at a micro-level
comprising of teamwork, cross-training, multi-skilling, and problem-solving groups to
increase functional flexibility, participation in the design of work processes, and the
sharing of task-specific knowledge are to enlist a few. Further, the use of refined HR
practices in recruitment and selection for instance the use of psychometric testing,
personality profiling and competency and performance tests for a wide range of key or
core employees including non-managerial ones.
Change management: ‘the only constant is change’ has become a cliché but reflects the
acknowledgement now that the competitive global economy and continuous increasing
technological advances are realities. Physical resources are relatively easy to change;
human ones are much more challenging. HRM is often tasked with taking the lead and
coordinating change across the organisation. However, it has been seen that any proposed
change in the structure of the organization or the way of working is always met with
staunch opposition from the employees. The employees always want to maintain the
status-quo because bringing in any change requires efforts and other operating energies,
which the employees resist. However, organizations require making changes sometimes a
small change and sometimes radical, for this the organizations require making their
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human resources act and change. Kurt Lewin formulation
of “Defreezing-Changing-Refreezing”, acts as an aid and
tool to modern day organizations.
Learning Organization: The ‘learning organisation’, defined as an organisation which
encourages learning at all levels and thereby brings about continuous (and by definition
often unpredictable) change to itself. This is a consequence of the realisation that
employees are expected and encouraged to learn all the time, and should employ their
learning by being innovative and enhancing performance; that ‘to pay someone to work is
to pay them to learn’.
Knowledge management: ‘using the ideas and experience of employees, customers and
suppliers to improve the organisation’s performance.
Declining Role of Trade Unions: Employee relations in a unitarist environment – trade
unions are in a historically precipitous decline in most advanced economies, and
especially in new industries, but all but the smallest employers have to find means of
communicating with their employees and achieving perceptions of fairness and
legitimacy in pay rates and conditions of employment.
International HRM: IHRM can be defined as set of activities aimed managing
organizational human resources at international level to achieve organizational objectives
and achieve competitive advantage over competitors at national and international level.
IHRM includes typical HRM functions such as recruitment, selection, training and
development, performance appraisal and dismissal done at international level and
additional activities such as global skills management, expatriate management and so on.
4. Controversies in HRM
1. Conceptualising HRM
The development of HRM has been somehow haphazard. There has been no single and
universal adoption of its practises. This can be attributed to the fact that HRM can be
interpreted differently in theoretical, strategic and operational terms. Due to the very
nature of HRM, its meaning is open for deliberations, discussions, and thereby also
marred in controversies.
Boxall and Purcell, have opted for an all-inclusive definition, “HRM includes the firm’s
work systems and its model of employment. It embraces both individual and collective
aspects of people management. It is not restricted to one style or ideology”.
HRM MAP
Guest adds to the debate by asserting four elements which make up the foundations of
HRM:
1) Strategic integration – ability to integrate HRM issues into strategic plans.
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2) High commitment – concerned with behavioural
commitment and attitudinal commitment.
3) High Quality – refers to managerial and employee behaviour.
4) Flexibility - concerned with functional flexibility and adaptable organisational
structure.
Storey’s ‘HRM model’ aids in defining the main characteristics of HRM. The model is
based on the belief that people make the difference with respect to organisational
performance; that people decisions are strategic decisions and that HRM policies must
support each other and corporate strategy in an integrated manner. Further, the model
emphasises that as the human resource is a distinct factor for any organization which
stimulates organizational growth, therefore, the selection of the employees should be
based on careful selection and development policy.
As a strategy, the HRM model of Storey advocates that HR decisions impact the
strategies of any organization, where the involvement of the top management is required
and that HR strategies should have integration with the business strategy. The model also
suggests that managing the culture of the organization is more important to the
management of procedures and systems, and there should be a system integrated action
on selection, communication, training, reward and development.
HRM MODEL
Additionally Storey maintains that there are two types of HRM practises:
1) The ‘Hard’ model of HRM, which emphasises human resources, can be regarded as
factors of production, and that human resource management are passive and reactive. As
can be seen from the table below that the basic orientation of Hard HRM is towards
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instrumental quantitative resource utilisation which means
that the emphasis upon the ‘quantitative calculative and
business strategic aspects of managing the headcount in a rational way’. The antecedents
of HRM are based on the theory of scientific management. The working of HRM is based
on the strict compliance and controls as envisaged n the rules and incentives are based on
performance in the organization.
2) The ‘Soft’ model of HRM, which emphasises that human resources should be treated
as value assets. Employees are a source of competitive advantage for the organization and
therefore need to be worked upon. Soft HRM’s emphasis is proactive and that employees
are capable of development. In this the role for employee motivation and commitment
lies on the management and because of this motivation and commitment employees show
better performance which ultimately improves the performance of the organization.
Therefore, it is a matter to be debated and hence controversial that what exactly does
HRM entails.
2) Which is the most effective HRM style?
The central controversy lies in the question of whether ‘hard’ and ‘soft’ models are
equally effective ‘HRM style’s’ to work intensification and greater demands on the
employment relationship by the organisation at the expense of the employee.
Hard HRM can be defined in terms of the particular policies that stress a cost
minimisation strategy with an emphasis on leanness in production, the use of labour as a
resource, and what Legge calls a ‘utilitarian instrumentalism’ in the employment
relationship. This model emphasises short-term strategic gain. While soft HRM, by
contrast, is sometimes viewed as ‘developmental humanism’ in which the individual is
integrated into a work process that values trust, commitment and communication.
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Soft HRM is based and implemented to compliment a
long-term strategy. Hence each style serves a purpose and
is effective when used in the right scenario. Legge is of the opinion that the models are
not mutually exclusive; hard HRM variants can contain elements of soft practice, while
soft variants can be criticised that they can be held to deliver hard outcomes in terms of
the tightness of the fit with business strategy. Both of these styles add value to an
organisation as they possess different characteristics.
Ulrich demonstrates that regardless of which method i.e., hard or soft HRM, the ultimate
goal of the department is to aid in competitive advantage, by incorporating HRM
techniques in the corporate planning process; this role he termed the ‘Business Partner’.
This can be achieved through an array of methods and is not restrictive to a singular
technique
3) Is there a distinction between personnel management and human resource
management?
HRM derived its root from the traditions of personnel management. Many commentators
have suggested that HRM is just a grander term for a mundane function, representing ‘old
wine in new bottles’. Others have argued that HRM reflects a shift in employment
relations, made necessary by changes in the organisational environment.
By definition personnel management captures three central concepts. 1) Engaging in
techniques to maximise productivity by employees, to the benefit of the organisation. 2)
Dealing with any disputes that may arise during the course of business by the employee
or a third party. 3) Undertake any administrative policies which fall within the
employment cycle. By contrast the overarching purpose of HRM is to contribute to
organisational effectiveness through the development of an integrated range of policies.
It can be defined as: “Personnel management is that part of the management function
which is concerned with human relationships within an organisation. Its objective is the
maintenance of those relationships on a basis which, by consideration of the well-being
of the individual, enables all those engaged in the undertaking to make their maximum
potential contribution to the effective working of that undertaking. The maintenance and
effective use of facilities for joint consultation between employers and employees and
between their representatives and of recognised procedures for the settlement of
disputes”. Lege identifies four similarities between the two practises:
- Both emphasise integrating with organisational goals
- Both vest firmly in line management
- Both stress maximising individual potential
- Both stress putting the right people into the right jobs
The HRM function clearly encompasses the personnel’s role within the organisation, thus
there is an element of overlap. This lends justification to commentators who might argue
these movements are one in the same. Though the contemporary management style as a
whole is far more integrated into the organisation’s strategy and is business focused
which did not happen under personnel management.
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The development of personnel management is linked to
post-Second world war government economic policies
(Keynesianism) and the introduction of employment law, government intervention in the
workplace.
The decade of 1990-2000 witnessed a series of trends including globalisation, intensified
competition and technological innovation. HRM was developed with the realisation that
human capital lay at the foundations of organisational survival and competitive
advantage, in an era when all other competitive drives could be replicated.
Hence in light of these global industrial changes the role of the personnel department
evolved from a largely administrative function to one which supported and was integrated
into the core of organisation strategy, which served as the function of HRM.
Ulrich HR model
The Ulrich HR model, a common way to look at HRM strategic planning, provides an
overall view of the role of HRM in the organization. His model is said to have started the
movement that changed the view of HR; no longer merely a functional area, HR became
more of a partnership within the organization. His newly revised model looks at five
main areas of HR:
1. Strategic partner. Partnership with the entire organization to ensure alignment of the
HR function with the needs of the organization.
2. Change agent. The skill to anticipate and respond to change within the HR function,
but as a company as a whole.
3. Administrative expert and functional expert. The ability to understand and implement
policies, procedures, and processes that relate to the HR strategic plan.
4. Human capital developer. Means to develop talent that is projected to be needed in the
future. 5. Employee advocate. Works for employees currently within the organization
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4) To what extent is HRM implemented in firms? Is
the strategic input HRM provides beneficial to the organisation?
The extent, to which HRM has come to play a role in the direction and planning of
organisations and whether it provides any added benefit, has been a persistent theme. It is
this strategic emphasis which has been acclaimed as being one of the longest
controversies in the HRM debate.
Historical evidence has suggested that the HR department has a secondary role in terms
of the organisation hierarchy. This can be seen as three-quarters of large organisations do
not have a human resource. Recent controversy can be noted over the two strategic
approaches to the way HRM develops its strategic intentions to aid the direction and
planning of organisations. The first remains centred on macro-strategic issues and the
general location of HRM within the organisational structure overall. This issue can be
summarised into ‘whether HRM has a seat on the board’.
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PAPER NO. 9: Human Resource Management
MODULE NO.2: Themes and Controversies in Management
5. Summary
Prior to the World Wars, the personnel function was prevalent where the record
keeping of the employees was the main aspect of it. Post World War II that the
productivity of the employees and thus profitability are directly related to
motivation level of the employees, and hence the human relations movement
started.
Typical HR programs involve things such as record keeping, recruiting, selection,
training, employee relations, and compensation.
HRM is an area of management which is ever accommodating including changes
which show up during the transformation phase.
The basic themes in HRM are emphasis of productivity through people, working
environment, change management, creation of learning organization, creation of
knowledge management, declining role of trade unions, international HRM.
There are controversies in the very evolution of HRM.
Controversies are based on following of Hard or Soft Models of HRM, distinction
between Personnel and Human Resource Management, and are HRM
implemented in organizations today, if yes to what extent.
