HRM for MBA Students

Lecture 1People management: personnel

management and human resource management

Learning outcomes

• A good appreciation of the ‘people management’ function in contemporary organisations

• Knowledge of ‘human resource management’ (HRM) and ‘personnel management’ (PM)

• An appreciation of the theoretical development of HRM• Understanding of the relationship between HRM and

business strategy• An appreciation of the practical application of HRM• Recognition of the themes of HRM in the early twenty-

first century.

‘People are the only real source of ... continuing competitive advantage.’

Prahalad and Hamel (1990)

We can define people management as:

‘all the management decisions and actions that directly affect

or influence people as members of the organisation rather than

as job-holders.’

What do people managers do?

Their role has specific objectives under four headings:

• Staffing objectives• Performance objectives • Change management objectives • Administration objectives

Torrington, Hall and Taylor (2002)

The ‘Ulrich model’ of HRM

Human Resources should become:

– a strategic partner with top management– an expert in administration– a champion for employees– an agent of continuous transformation

Ulrich (1998)

‘Building organisational capability is HR’s heartland’

and

HR managers ‘can help make capitalism human’

Linda Holbech (2007 )

Taylorism

Principles of ‘scientific management’ (1911):– time and motion studies of work processes – standardisation of tools, implements and

methods – increased division of labour

Taylorism + machine-paced work = Fordism

The evolution of people management

Personnel management

• The first Industrial Revolution: welfare role• Rise of trade unionism: industrial relations

role• ‘Scientific management’: training;

sophisticated recruitment and selection• Thus by the 1970s the Personnel

management paradigm

Human resource management

• Loss of faith in traditional mass-production techniques

• The example of Japanese quality• Technological development• Thus by the 1990s the (post-Taylorist)

HRM paradigm

Perspectives in management

• Unitarist– Conflict is ‘wrong’

• Pluralist– Conflict is not ‘wrong’ but must be managed

• Radical/critical– Conflict is inevitable ... and may be ‘right’

The Harvard model of HRM

A ‘map of the HRM territory’: from Beer et al (1984, p.16)

Stakeholder interests Shareholders Management Employee groups Government Community Unions HRM policy choices

Employee influence Human resource flow Reward systems Work systems

HR outcomes Commitment Competence Congruence Cost-effectiveness

Long-term consequences Individual well-being Organisational effectiveness Societal well-being

Situational factors Workforce characteristics Business strategy and conditions Management philosophy Labour market Unions Task technology Laws and societal values

‘Ideal types’ of PM and HRM

Characteristics Personnel management (PM)

Human resource management (HRM)

Strategic nature Ad hoc Proactive, strategic Psychological contract Based on compliance Based on seeking willing commitment

Job design Typically Taylorist/Fordist Typically team-based

Organisational structure Hierarchical Flexible Remuneration Collectivised

‘Pay by position’ Individualised ‘Pay for contribution’

Recruitment Sophisticated recruitment practices for senior staff only

Sophisticated recruitment for all employees Strong internal labour market for core employees

Training/development Limited A learning and development philosophy for all core employees

Employee relations perspective

Pluralist: Collectivist, low trust

Unitarist: Individualistic, high trust

Organisation of the function Specialist / professional Bureaucratic and centralised

Largely integrated into line management for day-to-day HR issues

Specialist HR group to advise and create HR policy Welfare role Residual expectations No explicit welfare role Criteria for success of the function

Minimising cost of human resources

Control of HR costs, but also maximum utilisation of human resources over the long term

HRM in practice

• Evidence of significant adoption of HRM practices – (Workplace Employee Relations Surveys and

others)• But still two traditions or paradigms• Most organisations share characteristics of

both• But HRM is in the ascendant

Key themes in HRM

• High-involvement employee work practices• Flexible organisation (core and periphery)• Micro-level work organisation (teamworking)• Sophisticated HR for recruitment• Unitarist employee relations• Change management• The learning organisation• Knowledge management• Leadership