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HUMAN RESOURCE MANAGEMENT (HRM)
Human resource management (HRM) is a strategic approach to
managing employment relations which emphasizes that leveraging
peoples capabilities is critical to achieving competitive edge and
advantages, this being achieved and furnished through a distinctive
set of integrated employment policies, programmes and
practices.
By
Dr Tahir javed
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This notes is concerned with managing people, individually and
collectively, at work.
The quotations that opened the chapter provide insights into how
the human
resource function is viewed by academics and practitioners in
the first decade of the
21st century. In recent times, human resource management (HRM)
has assumed new
prominence as concerns persist about global competition, the
internationalization of
technology and the productivity of labour. It is argued that
these market imperatives
require managers to change the way in which they manage the
employment relation-
ship to allow for the most effective utilization of human
resources (HR). Leveraging
workers full potential and gaining the commitment of all
employees, including
managers, which is considered necessary for competitive
advantage, requires change
in three aspects of managerial control: organizational design,
culture, and HR policies
and practices. Current managerial orthodoxy, therefore, argues
the need for restruc-
turing towards at hierarchical structures, an enlargement of job
tasks with greater
employee autonomy and managerial leadership to shape the more
intangible aspects
of the workplace, such as beliefs, norms and values. For some,
HRM is associated with
a set of distinctive best practices that aim to recruit,
develop, reward and manage
people in ways that create a sustainable commitment to
high-commitment manage-
ment, or what North American academics call high-performing work
systems.
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CHAPTER OBJECTIVES
After studying this chapter, student should be able to:
1. Explain the development of human resource management (HRM)
and its practices
2. Define HRM and its relation to organizational management
3. Explain the central features of the contract in the
employment relationship
4. Summarize the key HRM functions
5. Explain the theoretical issues surrounding the HRM debate
6. Appreciate the different approaches to studying HRM
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THE MEANING OF HUMAN RESOURCE
In management terms, human capital or human resources refers to
the traits that
people bring to the workplace intelligence, aptitude,
commitment, tacit knowledge
and skills, and ability to learn. But the contribution of this
human resource to the
organization is typically variable and unpredictable.
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HUMAN PSYCHOLOGY ON WORKPLACE
One set of perspectives, drawing on psychology, suggests that the
behaviour of people in the workplace is a function of at least four
variables:
ability, motivation, role perception and situational
contingencies (McShane, 2006).
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Human capital differs from other resources, partly
because individuals are endowed with varying levels of ability
(including aptitudes,
skills and knowledge), along with personality traits, gender,
role perception and differ-
ences in experience, and partly as a result of differences in
motivation and commit-
ment. In other words, employees differ from other resources
because of their ability to
evaluate and to question managements actions, and their
commitment and cooper-
ation always has to be won. In addition, employees have the
capacity to form groups
and trade unions to defend or further their economic
interest.
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THE MEANING OF MANAGEMENT
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The term management may be applied to either a social group or a
process. When applied to a process, management conjures up in the
mind a variety of images of managerial work. Who is a manager?
depends not upon the tasks people undertake but on their social
position in the organizations hierarchy. A manager is an
organizational member who is institutionally empowered to determine
and/or regulate certain aspects of the actions of others (Willmott,
1984, p. 350).
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MANAGEMENT BY 4 DIMENTION
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Management as science, politics, control and practicescience
Successful managers are those who have
learned the appropriate body of knowledge,
skills and competencies
politics Successful managers are those who can work
out and cope with unwritten laws in the organization
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MANAGEMENT BY 4 DIMENTION
Practice Successful managers are those who can
work out and cope with contradictory
demands and pressures
Control Successful managers are those who can
exploit and control workers
Source: Based on Watson (1986) and Reed (1989)
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Drawing upon the work of Watson (1986) and Reed (1989), we can
identify four
major analytical perspectives that have shaped the study of
management: the science
perspective, the political perspective, the control perspective
and the practice perspec-
tive (Figure 1.1). Fayol (1949) articulated the notion that
management is a science. In
his seminal work, Fayol identified a distinct body of knowledge
and managerial activ-
ities, from planning to controlling, including organizing and
directing the PODC
tradition. This offers an idealized image of management as a
rationally designed and
operationalized tool for the realization of organizational
goals.
The political perspective provides a view of management that
characterizes the
workplace as a purposive miniature society with politics
pervading all managerial
work. By politics we mean the power relationships between
managers and relevant
others and, in turn, the capacity of an individual manager to in
uence others who
are in a state of dependence. This perspective to studying
management offers an
approach that examines individual managers as knowledgeable
human agents func-The control perspective conceptualizes management
as a controlling agent that serves
the economic imperatives imposed by capitalist market relations.
Managerial control
is thus the central focus of management activity. According to
this perspective,
management structures and labour strategies are instruments and
techniques to
control the labour process in order to secure high levels of
labour productivity and
corresponding levels of profitability. This approach to
management has come to be
associated with the seminal work of Harry Braverman (1974) and
the labour process
school to which his work has given rise. It recognizes the
existence of inconsistent
organizational designs and management practices, and these
paradoxical tendencies
provide the source of further management strategies that attempt
to eradicate the
tensions that these paradoxes have created. The most important
of these paradoxes is
considered to be the simultaneous desire for control over and
cooperation and
commitment from workers.
The practice perspective conceptualizes management as an
activity aimed at the
continual amelioration of diverse, fragmented and usually
contested complex prac-
tices. According to Reed (1989), it addresses the limitations of
the first three perspec-
tives by recognizing that although management is indeed a
science, it at the same
time involves both a political process and control mechanisms.
Furthermore, Reed
(1989, p. 21) contends that, within the practice perspective,
organizations generate
both structural and processual contradictions that will be re
ected within manage-
ment practice. Therefore, managers will be called upon to secure
subordinates discip-
line and consent simultaneously, and, given the heterogeneous
nature of
management, they will be divided over how these mutually
incompatible objectives
are to be achieved. Typically, a nexus of HRM practices and
supporting rationales will
be constructed to provide the mechanisms by which managers
strive to secure control
over and commitment from organizational members, in other words
to ensure that
employees are manageable.
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REFLECTIVE QUESTION
What do you think of these four perspectives of management? Do they
help to explain managerial behaviour? Do they help us to understand
the uncertainties and conics found in managing people?
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EMPLOYMENT RELATIONSHIP
---Research into the has drawn attention to relations in the
workplace oriented towards the:
economic legalsocial psychological.
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At its most basic, the employment relationship embraces an
economic relationshipthe exchange of pay for work (Brown, 1988).
When people enter the workplace, they
enter into a payeffort bargain, which places an obligation on
both the employer and
the employee; in exchange for a wage or salary, paid by the
employer, the employee is
obligated to perform an amount of physical or intellectual
labour. The payeffort
bargain is relevant for understanding how far the employment
relationship is inher-
ently con ictual or consensual. In the capitalist labour market,
people sell their labour
and seek to maximize their pay. To the employer, pay is a cost
that, all things being
equal, reduces profit and therefore needs to be minimized. The
second component of the employment relationship is that it involves
a legal
Thus, as Brown (1988,
p. 57) states, Con ict is structured into employment relations
as the logic makes the
pay to one group the cost to the other. The effort or work side
of the contract also
generates tensions and con ict because it is inherently
imprecise and indeterminate.
The contract permits the employer to buy a potential level of
physical or intellectual
labour. The function of management is therefore to transform
this potential into
actual value-added labour. HR practices are designed to narrow
the gap between
employees potential and actual performance, relationship: a
network contractual and statutory rights and obligations affecting
both
parties to the contract. Contractual rights are based upon case
law (judicial precedent),
and the basic rules of contract, in so far as they relate to the
contract of employment,
are fundamental to the legal relationship between the employer
and employee. It is
outside the scope of this chapter to give a full exposition of
the rules of contract, but
there are a number of requirements of a valid contract:
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THE PSYCHOLOGICAL CONTRACT
unwritten expectations and understandings of the two parties about
their mutual obligations. Rousseau (1995, p. 9) defines it as
individual beliefs, shaped by the organization, regarding terms of
an exchange agreement between individuals and their organization.
Most discussants view the concept as a two-way exchange of
perceived promises and obligations. Guest and Conway (2002) have
conducted empirical studies on the psychological contract and
define it as the perceptions of both parties to the employment
relationship organization and individual of the reciprocal promises
and obligations implied in that relationship (p. 22). At the heart
of the concept of the psychological contract are levers for
individual commitment, motivation and task performance beyond
expected outcomes.
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EVOLUTION IN MANAGEMENT PRACTICES WITHIN AN ORGANIZATION
The Classical approachHuman Resource ApproachModern Approach
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The Classical perspective to management emerged during the
nineteenth century and continued into the twentieth century.
Due to the new challenges that organizations faced, management
sought methods of efficiency which included a rational and
scientific approach.
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THE CLASSICAL APPROACH
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THE CLASSICAL APPROACH
INCLUDES THE FOLLOWING THREE THEORIES AND THEIR CONTRIBUTORS:
Scientific Management by Frederick TaylorAdministrative Principle
by Henry FayolBureaucratic Organization by Max Weber
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SCIENTIFIC MANAGEMENT (1856 1915)
BY FREDERICK W. TAYLOR
Scientific Management or Taylorism was a scientific method which
was used to optimize the way in which tasks were performed thus
improving the labour productivity. One of Taylors philosophy was In
the past man must has been first. In the future, the system must be
first.
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GENERAL CONCEPT OF SCIENTIFIC MANAGEMENT
Develop a standard method for performing a task and train workers
to use these methods.
(Managers developed precise procedures based each organizational
task)
Provide workers with the proper tools needed to work.Selected
employees were chosen for specific tasks.
(Workers that were stronger both mentally and physically were
assigned specific tasks)
Wage incentive were provided when output was increased.
(Employees were motivated to increase their output with the use
of additional benefits
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DISADVANTAGES OF SCIENTIFIC MANAGEMENT
Workers felt exploited because their social aspect of life was
disregarded.
(Workers were treated as machines and not humans)
Management stereotyped workers and did not allow them to prove
their skills in other areas.Workers were not allowed to form
innovative ways to perform their tasks.
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ADMINISTRATIVE PRINCIPLE
BY HENRY FAYOL (1841 1925)
This theory dealt with the entire organization (both workers and
management) which functioned with four basic principles. Which
are:
Unity of command Each person receives order from only one
superior.Division of work Specialization and efficiency were
incorporated in workers.Unity of direction Related activities were
grouped under one manager.Scalar Chain is the organizational
structure which starts from the CEOs to the labourers.
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ADMINISTRATIVE PRINCIPLE OR FUNCTION OF MANAGEMENT
The five basic functions or elements of management (Management
Process) are:
PlanningOrganizingControllingCoordinatingCommanding
(leading/directing)
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BUREAUCRATIC ORGANIZATIONS
BY MAX WEBER (1864 1920)
Webers theory concentrated on the fact that positions should be
structured where there must be a clear line of authority
(hierarchy) and all persons must be selected by competency for the
job and promotion (promotion based on achievement and a specialized
division of labour) also, a formal structure and position rather
than an individual.
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VIEWS AND MISCONCEPTIONS OF
BUREAUCRATIC ORGANIZATIONS
Good bureaucracy removed or reduced opportunities for corruption,
favouritism and arbitrary exercises of power (instead of bribing a
single official, you now have to bribe several officials)
.Sometimes extra paperwork is added to a system.Identified
bureaucracy with any large organization.Sometimes bureaucracy would
be mistaken for civil service (governmental organizations) but
actually is being used at various types of
organizations.Bureaucracy is inflexible.
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HUMAN RESOURCE APPROACH
The Human Resource perspective to management suggested that jobs
should be designed to meet higher levels needs by allowing workers
to use their full potential.Human Resource Approach
includes the following three theories and their contributors:The
Hawthorne Studies by Elton MayoThe Maslow Theories of Humans NeedMc
Gregors Theory (x y theory)
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FROM MAYOS INVESTIGATIONS THE FOLLOWING CONCLUSIONS WERE
MADE:
Work is a group activity.The social world of an adult is primarily
patterned by their work activity.The need for recognition, security
and belonging is more important than physical conditions of the
work environment.A complaint is commonly a symptom manifesting
disturbance of an individuals current position.An employee is a
person whose attitudes and effectiveness are conditioned by social
demands from both outside and inside work environment.
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MASLOWS THEORY
OF HUMANS NEEDS
Maslow's hierarchy of needs is a theory in psychology that
contends, each of us is motivated by needs. Our most basic needs
are inborn, having evolved over tens of thousands of years. Abraham
Maslow's Hierarchy of Needs helps to explain how these needs
motivate us all.Maslow's Hierarchy of Needs states that we must
satisfy each need in turn, starting with the first, which deals
with the most obvious needs for survival itself. Only when the
lower order needs of physical and emotional well-being are
satisfied are we concerned with the higher order needs of influence
and personal development. See additional motivational theory
lecture
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MASLOWS HIERARCHY OF NEEDS
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Biological and Physiological needs
basic life needs - air, food, drink, shelter, warmth, sex,
sleep, etc.
Safety needs
protection, security, order, law, limits, stability, etc
Esteem needs
achievement, status, responsibility, reputation
Belongingness and Love needs
family, affection, relationships, work group, etc
Self-actualization
personal growth and fulfillment
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Proper temperature, air,
basic salary
MASLOWS HIERARCHY OF NEEDS
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Biological & Physiological
Needs
Safety Needs
Belongingness
& Love Needs
Esteem
Needs
Food, air, water, sleep
Protection, law,
freedom
Benefits, stability
Occupational safety
Coworkers, groups,
clients
Recognition,
high status
Advancement
Self
Actualization
Family, friends,
community
Approval,
achievement
Personal growth,
fulfillment
Personal/
Social Life
Occupational
Needs
Need
Hierarchy
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THEORY X AND THEORY Y MANAGEMENT
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COMPARISON & CONTRAST OF
MANAGEMENT THEORIES
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Theory X
Motivation style-
Threats and disciplinary action are used more effectively in
this situation, also monetary gain.
Leadership-
Authoritarian
Power & Authority-
Arrogant, one way communicator
Conflict-
Intolerant
Performance Appraisals-
Appraisals occur on a regular basis
Theory Y
Motivation style-
Rewarding
Leadership-
Participative
Power & Authority-
The manager would take suggestions from workers, but would keep
the power to implement the decision
Conflict-
Workers might be given the opportunity to exert "Negotiating"
strategies to solve their own differences
Performance Appraisals-
Promotions also occur on a regular basis.
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SUMMARY & CONCLUSIONS
With respect to overall management style, McGregor's Theory X
and Theory Y managers seem to have a much more formal leadership
style and managers seem to have different views of the workers,
while their views of the tasks remains the same in both cases: that
is, one of specialisation, and doing a particular task.
Albeit that Theory Y suggests that the workers would become very
good at their particular tasks, because they are free to improve
the processes and make suggestions. While the Theory X worker is
said to require force, threats, and possibly even disciplinary
action.
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SUMMARY & CONCLUSIONS
Theory Y are, again, self motivated, this allows them to focus
on the task, and also their role within the company. Their desire
is to be more productive and enable the company to succeed. Theory
X workers, on the other hand, seem to have just enough self
motivation to show up at work, punch the time clock, as it were,
and do only that which is necessary to get the job done to minimum
standards.
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MODERN APPROACH TO MANAGEMENT
Elements of various perspectives, mostly the humanistic perspective
evolved into what is known as the Modern Approach to
management.Modern Approach includes the following three theories
and their contributorsOpen SystemsContingency ThinkingLessons from
the Japanese management style (theory z)
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CONTINGENCY PERSPECTIVE
The contingency approach to management is an extension of the
humanistic perspective which is based on the idea that in an
organization there is no one best way in the management process
(planning, organizing, leading, and controlling) to successfully
resolve any tailored circumstances; because organizations, people,
and situations vary and change over time. Thus, the right thing to
do depends on a complex variety of critical environmental and
internal contingencies.
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CONTINGENCY PERSPECTIVE
OF MANAGEMENT
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Contingency
View
Unique Situation
Universal View
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Their important contribution to this approach was as
follows:
The more dynamic and diverse the environment, the higher the degree
of both differentiation and integration required for successful
organization.Less changeable environments require a lesser degree
of differentiation but still require a high degree of integration.
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IMPORTANCE OF CONTINGENCY
The more differentiated an organization, the more difficult it is
to resolve conflict.Where the environment is uncertain, the
integrating functions
tend to be carried out by middle and low-level managers where
the environment is stable, integration tends to be achieved at the
top end of the management hierarchy.
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JAPANESE MANAGEMENT STYLE
THEORY Z
McGregor, identified a negative set of assumptions about human
nature, which he called Theory X. He asserted that these
assumptions limited the potential for growth of many employees.
McGregor presented an alternative set of assumptions that he
called Theory Y and were more positive about human nature as it
relates to employees. In McGregor's view, managers who adopted
Theory Y beliefs would exhibit different, more humanistic, and
ultimately more effective management styles and Theory Y became a
well-known prescription for improving management practices.
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JAPANESE MANAGEMENT STYLE
THEORY Z
Concerns about the competitiveness of U. S. companies led some to
examine Japanese management practices for clues to the success
enjoyed by many of their industries. This led to many articles and
books purporting to explain the success of Japanese companies. It
was in this atmosphere that Theory Z was introduced into the
management lexicon.
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THE KEY FEATURES OF JAPANESE INDUSTRIAL ORGANIZATIONS, ACCORDING
TO OUCHI ARE AS FOLLOWS:
Offer lifetime employment (at least for their core workers).
Promote from within. Insist on mandatory retirement of core workers
at age 55. Employ a large number of temporary employees mostly
women. There is a high degree of mutual trust and loyalty between
management and employees.
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THE KEY FEATURES OF JAPANESE INDUSTRIAL
Career paths are non-specialized with life-long job rotation as a
central feature of career development.Decision making is shared at
all levels.Performance appraisal is long term (ie the first
appraisal takes place 10 years after joining the company).There is
a strong sense of collective responsibility for the success of the
organization.And cooperation effort rather than individual
achievement is encouraged.
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In his view, this requires a new philosophy of managing people
based on a combination of the following features of Japanese
management:
Lifelong employment prospects Shared forms of decision-making
Relationship between boss and subordinate based on mutual
respect
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OUCHI THE INTRODUCTION OF THEORY Z
According to Ouchi approaches into Western firms requires the
following strategy:
Adoption of a Top down approach, based on definition
of the new philosophy agreed and supported by the organizations
top management.
Implementation of the new approach should be carried
through on the basis of consultation and communication
with the workforce and with full training support to develop
relevant skills for managers, supervisors and their teams.
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