MBA (Full Time)

YEAR 1 – SEMESTER 1 (10/11)

MODULE: HR0469.

STUDENT: w10027894.

DATE: 10th January 2011.

Beardwell and Claydon (2010, p.4) have defined Human Resources Management (HRM) as a

collection of policies which are used to organise work in the relationship of an employee with

the organisation and also has to manage the people who take on the work. They have also

said that HRM deals with recruitment, selection, learning and development, rewards,

communication, teamwork and even performance management. In today’s competitive world

where there is intense competition among various organisations it is important for any

organisation to select the right kind of people who can adjust to various cultures and also to

have right kind of attitude towards the work. According to Carroll (1995) a new practical

approach that has led the HRM to form a bridge between strategic and organisational

performance which will transfer itself from old traditional HRM policies and which will

focus more on micro level issues, that are related to an employee has given rise to Strategic

Human Resource Management (SHRM). They have further stated the characteristics of

SHRM as a long term vision, a link between HRM and strategy process and the role played

by both the line managers and the HRM professionals to make HRM more strategic. The

prime concern of HRM is not only managing people but creating an environment where

employees can work freely. As people have different mindsets towards various work assigned

towards them. SHRM is based upon the idea that all the important organizational abilities or

activities done are necessary for a particular business strategy Cabrera (2003). Then main aim

of SHRM is to produce employees that are skilled, committed and well motivated which will

help the organisation to achieve their competitive advantages in the market Armstrong, Baron

(2002, p.42). The importance of HRM being strategic which gives managers from various

departments to develop a common strategic plan (Tyson 1995 , cited in Francis 2003). If

HRM is strategic in nature it will properly synchronised all individual HRM factors and

putting them into practise will have a direct influence on an employee’s attitude and also on

his behaviour which will help the organisation to achieve its goal Wang (2008). Treen (2000)

also stated that SHRM is neither an option nor a possibility but it declares the exact path in

execution of strategic plan which if neglected may lose the organisation’s competitive

advantage. It is easy for any organisation to imitate the natural resources, various

technologies and the plans from other organisations but the biggest advantage that HR has

that is an invisible asset which will help the organisation to operate more strategically in any

working condition Chang and Huang (2005).

There can be two consistent approaches that could go with SHRM as suggested by Redman

and Wilkinson (2006, p.12) the first one suggests that SHRM should be consistent with

business strategy and its implementation should also consider various HR factors. The second

approach is that HR factors should not only be considered in implementing the policy but

also influencing which business strategy should be used.In today’s world HRM is trying to be

more strategic where it focuses more on employee and also on management of the employees

which can now be further divided as Soft HRM and Hard HRM. Soft HRM consists of

providing satisfaction to employees, managing people, training and development,

empowerment whereas Hard HRM consists of providing profit to the organisation, improving

the current process and measuring and steering the performance of an employee Farquharson

(2002). Storey (2007, p.11) describes the soft HRM model as mainly dealing in providing

training to the employees, changing their attitude which leads to commitment of an employee

to an organisation whereas a Hard HRM model deals more into business focus strategy and

also it follows a rationale approach to manage the employees. Grant (1999) supports that soft

model also consists of employee’s being motivated, satisfied and committed whereas the hard

model reflects to the strategy and objectives of the organisation. It is now left for an

employee on how to look at both the models as every individual has different ways at looking

things. Organisations will most certainly put a greater importance on having a close

relationship with employees in Soft HRM as compared to Hard HRM.

Sevarajh (2003) describes that for HRM to be more effective it should change its policies as

the company goes through the development stage Armstrong (2008, p.130) states that change

is the constant thing that happens in any organisation. In today’s world where things are

changing rapidly in the organisation it is necessary to adapt to those changes. This led to the

formation of a different department for HRM over personnel management. Personnel

management (PM) deals mainly integrating various employees in order to work towards the

organisations goal by also keeping in mind their nature of work and the specific

characteristics possessed by them and also the atmosphere of the organisation for which they

are working for Russo (1997). Due to technological change there was shift between the

managers thinking process they were now more concerned towards human resources as they

were aware of through rapid changes that were happening around. This indicated to a close

relationship between managers and their employees as a result personal management was no

longer workable. The industries that had competitive advantage was due to human resources

which led to manage more actively and strategically that led the organisation to be more

successful Henderson (2008 , p.8). Baker (1999) also suggested that initially employees were

not treated as a resource during the personal management period but later due to development

of HRM it led to unique approach in managing employees. Legge (1995, p.74) differentiates PM

and HRM stating that in PM all managers manage their team whereas in HRM, it is concentrated

more on business managers that are responsible for co ordination between various resources and

directing in order to achieve the desired goal of the organisation.(David Guest model, cited in

Braton and Gold 2007, p.24 ) clearly differentiates HRM from PM in suit such a way that

HRM is more strategic where it focuses more on commitment of an employee towards an

organisational goal. It is more unitary with its focus on an individual. It results in employee’s

performance and also maximum utilization of resources. HRM is mostly concentrated on

managing human capital such as recruitment, selection, placement and retention which leads

to competitive advantage Snell 2009). The final goal of any HR executive is to create a value

in an employee through HR function Boxall (1996). If HR is strategic it will lead a company

to gain its competitive advantage. Beer (1997) have stated that globalization, and continuous

changes happening in markets and technology are the main reasons that has lead to

transforming of traditional Human resources and restricting them according to the latest

standards. As HR does not support trade unions it considers every individual as an important

asset. If the HR functions and their working nature are united with the strategic goals of the

organisation it will lead to an increase in their status Schuler (1987). PM has a short life span

whereas HRM has a long time span. HRM is mainly concentrated on management- employee

relationship and PM is more focus on management and trade unions relationship. The main

objective of HRM is gaining commitment from employees, encouraging every employee to

be self disciplined and also making him an initiator Sisson (1993,p.31). Daniel (2006) also

defines more role for HR where he believes that HR is not only responsible for keeping

privacy about all its employees financial and health information in addition to it has to keep

an eye on the insider information that will give the company a competitive advantage.

The most important thing for a HR team is to create a right kind of culture where employees

can work freely and also with the right kind of an attitude. Also it is important that the

employees have a vision towards the organisation’s goal. This has been supported by Bill and

Shannon (2003) stating that in high performing organisations effective HR practises are

carried out by line managers with the help of HR department that provides tools, guidance

and counselling which lead to be successful. HR is the downstream of a strategic activity.

Snape et al. (1995) argues that HRM goals are not suite for all business strategies but they

suit more to business objectives that are more competitive in nature due to the high amount of

difference. As different business strategies requires different way to approach towards things.

As HRM is unitary it is achieved by implementing various systems and keeping in mind the

same outlook between managers and workers Geare, Edgar and McAndrew (2006) which

eventually leads the entire workforce to think in the same direction and also to have a

systematic approach towards the assigned task. HRM and TQM are integrated with each

other which results HR to be more strategic that leads HRM to be more effective and also

results to utilization of human resources Simmons, Shadur and Preston (1995). The most

efficient way for HRM to gain strategic importance is through investing more in human

capital management which currently seems to be far away Kimber (2003).HRM practices are

not implemented by a single decision maker they are implemented by taking a managerial

point of view in mind Ferray (2009). After training provided to the employees the employees

have to join the department for which they have been trained and only managers can know

what kind of training should be provided so that the employee can best suit the organisation.

According to Mcguire, Stoner and Mylona (2008) devolving is an important aspect for HRM

to be more strategic. Due to devolving LM can engage themselves more into management of

people and also their decision making process whereas HR can work on streamlining the

organisations processes. “In many organisations the most significant involvement of line

managers in the HRD process over the years has been through a staff performance and

Potential Review process” Walton (1999, p.198). LM play a very important role in the start

of any process and it has impact on the employees experience as well because LM’s are

their immediate point of contact Redman and Wikinson (2009, p.40). If LM have a proper

attitude and also the right kind of behaviour they can indulge themselves into HRM

activities and also integrate with them (Guest, 1987, cited in Gratton, 1999, p.133) . Renwick

(2003) believes that if LM involve themselves into HR acivities it raises a certain doubt into

an employee’s mind on whether the LM is concerned about them which might also lead to

HR losing its motive. LM and HRM are two sides of the same coin Bondarouk, Looise and

Lempsink (2009 ) states that if LM and HRM work together in consideration with each other

it will help HRM to perform much better and will also lead to much better implementation of

HR activities. As every organisation has a different work culture it depends upon on every

LM have to deal with their team members and use them efficiently if an employee is lacking

somewhere his LM can work with his HR team so in order that he can be productive towards

the organisation. McConville (2006 ) sates that if any change is to happen such as selection,

appraisal, reward and development which are related to HR activities has to be done with the

consideration of LM as they are the ones that will know much better about their team

member. If there is no support from HR specialist it has lead poor decision making process

on behalf of LM that has affected relationship between LM and employees Cunningham and

Hyman (1995).

Purcell and Hutchinson (2007) comment that the policies implemented by HR may have an

effect but as most employees rely on their LM due to their relationship between them and this

may also reflect in their working environment. When a employee is being recruited into the

organisation and gone through the training process he works in a team which is being lead by

the LM so his first relation inside the organisation is with LM so which directly or indirectly

influences employee and also the work culture around him. A research done by (Whittaker

and Marchington , cited in Conway, Edel(2003) in one of the UK company stated that if

HRM and LM has to work together then HRM might have less number of HR specialists in

their team which might lead to a strategic disadvantage to the organisation as the LM has not

only to look after the task assigned to them but also to manage people. Devolving is not a

problematic process but there might be a difference of opinion of LM depending upon their

hierarchy and which might have an effect in the working culture Heraty and Morley (1995).

If devolving of HRM has to succeed then LM should be properly trained in all the HR

activities. If LM implement HR policies it will have an effect on employees as the employees

becomes more motivated and this will certainly lead him to be more committed towards the

organisation and will also help him to perform better in the organisation. (Gennard and Kelly

1997, cited , Sheehan 2005) suggest that if HRM and LM work together they can benefit the

organisation as their final motive is to solve the business issues that have arisen in the

organisation. But Sheehan (2005) has a different view he argues that HR managers might not

understand the business strategy which might not lead to the organisational goal and LM may

not accept to take decisions which are taken by HR. Tyson (1997, p.37) indicated that LM

will be more involved in framing the HR strategic, policies and also its implementation but it

might involve them less in to administrative details of HR. In every organisation the most

important thing is to achieve the target and it can be gained if LM are properly framed with

HR. If LM combines the relation between HRM integration and organisational performance it

will give positive results to the company because all the decisions are taken by the LM by

consulting HR specialists Dany, Guedri and Hatt (2008). LM have to apply soft and hard

models of HRM but more soft models as they stress more on commitment of an employee.

This is important because the more amount of time an employee is retained in the company it

will certainly give him a holistic view of an organisation. The advantage of devolving of

HRM to LM is if there is a difficult issue and the top management are finding it difficult to

solve then the LM can solve it as they are more prone to local problems. It would also help

the personnel specialists to perform more strategically. It would help to improve the working

style of LM’s and also make the organisation more effective. It will help to build the future

generation of managers as devolving will certainly increase their decision making capacity

Harris, Doughty and Kirk (2002).

It can be concluded that due to increasing competition in the world it is necessary for LM to

understand the importance of HR as it is more related to an employee’s retention where best

people that are beneficial to the organisation are to be retained. It can be achieved if HRM

becomes more strategic. Considering current situations it is important to have the best people

in the organisation in order to gain competitive advantage over the competitors. This is the

difference between company that is performing better and the company that is not achieving

their desired goal. As HRM is the only thing that varies from organisation to organisation and

cannot be imitated by any one. It is the most important tool that will decide the company’s

success. The organisation should concentrate more on HRM factors like commitment from

employees, training, development, rewards, processes that will help the best people to be

retained, as these factors are most certainly required by an organisation in the fast moving

world. Based on the resources above it is still not clear what roles should be defined for HRM

and LM but these things are difficult to implement in the organisation. These things are good

in theory but tough to implement it practically. If we look from a theoretical point of view it

is good to have a LM doing HR activities but LM are involved in HR roles such as selection,

training, development , commitment and retention because every employee spends more time

with his LM and even LM can better understand their needs. The HR specialists should also

know about the business strategies and also their mission if they have to work with LM. It is

tough to have a unique HRM policies as different organisations have a different culture and

also the working environment is different it now depends on HRM to work together with LM

and develop new set of rules that will help the organisation to perform much better in various

cultures.

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