Saturday, February 5, 2011

Human resource management

Human resource management (HRM is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. In simple words, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.

Human resource management (HRM is the strategic and coherent approach to the management of an

organization's most valued assets - the people working there who individually and collectively

contribute to the achievement of the objectives of the business. The terms "human resource

management" and "human resources" (HR) have largely replaced the term "personnel management" as a

description of the processes involved in managing people in organizations. In simple words, HRM

means employing people, developing their capacities, utilizing, maintaining and compensating

their services in tune with the job and organizational requirement.

* Organizational management

* Personnel administration

* Manpower management

* Industrial management

But these traditional expressions are becoming less common for the theoretical discipline.

Sometimes even employee and industrial relations are confusingly listed as synonyms, although

these normally refer to the relationship between management and workers and the behavior of

workers in companies.

The theoretical discipline is based primarily on the assumption that employees are individuals

with varying goals and needs, and as such should not be thought of as basic business resources,

such as trucks and filing cabinets. The field takes a positive view of workers, assuming that

virtually all wish to contribute to the enterprise productively, and that the main obstacles to

their endeavors are lack of knowledge, insufficient training, and failures of process.

Human Resource Management(HRM) is seen by practitioners in the field as a more innovative view of

workplace management than the traditional approach. Its techniques force the managers of an

enterprise to express their goals with specificity so that they can be understood and undertaken

by the workforce, and to provide the resources needed for them to successfully accomplish their

assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and

operating practices of the enterprise overall. HRM is also seen by many to have a key role in

risk reduction within organisations.

Synonyms such as personnel management are often used in a more restricted sense to describe

activities that are necessary in the recruiting of a workforce, providing its members with

payroll and benefits, and administrating their work-life needs. So if we move to actual

definitions, Torrington and Hall (1987) define personnel management as being:

“a series of activities which: first enable working people and their employing organisations to

agree about the objectives and nature of their working relationship and, secondly, ensures that

the agreement is fulfilled" (p. 49).

While Miller (1987) suggests that HRM relates to:

".......those decisions and actions which concern the management of employees at all levels in

the business and which are related to the implementation of strategies directed towards creating

and sustaining competitive advantage" (p. 352).

[edit] Academic theory

Research in the area of HRM has much to contribute to the organisational practice of HRM. For the

last 20 years, empirical work has paid particular attention to the link between the practice of

HRM and organisational performance, evident in improved employee commitment, lower levels of

absenteeism and turnover, higher levels of skills and therefore higher productivity, enhanced

quality and efficiency . This area of work is sometimes referred to as 'Strategic HRM' or SHRM (.

Within SHRM three strands of work can be observed: Best practice, Best Fit and the Resource Based

View (RBV).

The notion of best practice - sometimes called 'high commitment' HRM - proposes that the adoption

of certain best practices in HRM will result in better organisational performance. Perhaps the

most popular work in this area is that of Pfeffer who argued that there were seven best

practices for achieving competitive advantage through people and 'building profits by putting

people first'. These practices included: providing employment security, selective hiring,

extensive training, sharing information, self-managed teams, high pay based on company

performance and the reduction of status differentials. However, there is a huge number of studies

which provide evidence of best practices, usually implemented in coherent bundles, and therefore

it is difficult to draw generalised conclusions about which is the 'best' way (For a comparison

of different sets of best practices see Becker and Gerhart, 1996

Best fit, or the contingency approach to HRM, argues that HRM improves performance where there is

a close vertical fit between the HRM practices and the company's strategy. This link ensures

close coherence between the HR people processes and policies and the external market or business

strategy. There are a range of theories about the nature of this vertical integration. For

example, a set of 'lifecycle' models argue that HR policies and practices can be mapped onto the

stage of an organisation's development or lifecycle. Competitive advantage models take Porter's

(1985) ideas about strategic choice and map a range of HR practices onto the organisation's

choice of competitive strategy. Finally 'configurational models' provide a more sophisticated

approach which advocates a close examination of the organisation's strategy in order to determine

the appropriate HR policies and practices. However, this approach assumes that the strategy of

the organisation can be identified - many organisations exist in a state of flux and development.

The Resource Based View (RBV), argued by some to be at the foundation of modern HRM , focusses on

the internal resources of the organisation and how they contribute to competitive advantage. The

uniqueness of these resources is preferred to homogeneity and HRM has a central role in

developing human resources that are valuable, rare, difficult to copy or substitute and that are

effectively organised.

Overall, the theory of HRM argues that the goal of human resource management is to help an

organization to meet strategic goals by attracting, and maintaining employees and also to manage

them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit

between the management of an organisation's employees, and the overall strategic direction of the

company (Miller, 1989).

The basic premise of the academic theory of HRM is that humans are not machines, therefore we

need to have an interdisciplinary examination of people in the workplace. Fields such as

psychology, industrial relations, industrial engineering, sociology, economics, and critical

theories: postmodernism, post-structuralism play a major role. Many colleges and universities

offer bachelor and master degrees in Human Resources Management or in Human Resources and

Industrial Relations.

One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields

for the HRM function:

* Strategic business partner

* Change Agent

* Employee champion

* Administration Expert

Business practice

Human resources management involves several processes. Together they are supposed to achieve the

above mentioned goal. These processes can be performed in an HR department, but some tasks can

also be outsourced or performed by line-managers or other departments. When effectively

integrated they provide significant economic benefit to the company.

* Workforce planning

* Recruitment (sometimes separated into attraction and selection)

* Induction, Orientation and Onboarding

* Skills management

* Training and development

* Personnel administration

* Compensation in wage or salary

* Time management

* Travel management (sometimes assigned to accounting rather than HRM)

* Payroll (sometimes assigned to accounting rather than HRM)
* Employee benefits administration
* Personnel cost planning
* Performance appraisal
* Labor relations

***HRM strategy*****

An HRM strategy pertains to the means as to how to implement the specific functions of Human

Resourse Management. An organization's HR function may possess recruitment and selection

policies, disciplinary procedures, reward/recognition policies, an HR plan, or learning and

development policies, however all of these functional areas of HRM need to be aligned and

correlated, in order to correspond with the overall business strategy. An HRM strategy thus is an

overall plan, concerning the implementation of specific HRM functional areas.

An HRM strategy typically consists of the following factors:-

**** "Best fit" and "best practice" - meaning that there is correlation between the HRM strategy

and the overall corporate strategy. As HRM as a field seeks to manage human resources in order to

achieve properly organizational goals, an organization's HRM strategy seeks to accomplish such

management by applying a firm's personnel needs with the goals/objectives of the organisation. As

an example, a firm selling cars could have a corporate strategy of increasing car sales by 10%

over a five year period. Accordingly, the HRM strategy would seek to facilitate how exactly to

manage personnel in order to achieve the 10% figure. Specific HRM functions, such as recruitment

and selection, reward/recognition, an HR plan, or learning and development policies, would be

tailored to achieve the corporate objectives.

***** Close co-operation (at least in theory) between HR and the top/senior management, in the

development of the corporate strategy. Theoretically, a senior HR representative should be

present when an organization's corporate objectives are devised. This is so, since it is a firm's

personnel who actually construct a good, or provide a service. The personnel's proper management

is vital in the firm being successful, or even existing as a going concern. Thus, HR can be seen

as one of the critical departments within the functional area of an organization.

***** Continual monitoring of the strategy, via employee feedback, surveys, etc.

The implementation of an HR strategy is not always required, and may depend on a number of

factors, namely the size of the firm, the organizational culture within the firm or the industry

that the firm operates in and also the people in the firm.

An HRM strategy can be divided, in general, into two facets - the people strategy and the HR

functional strategy. The people strategy pertains to the point listed in the first paragraph,

namely the careful correlation of HRM policies/actions to attain the goals laid down in the

corporate strategy. The HR functional strategy relates to the policies employed within the HR

functional area itself, regarding the management of persons internal to it, to ensure its own

departmental goals are met.
[edit] Careers and education
Further information: Graduate degree programs in human resources management
Cornell University's School of Industrial and Labor Relations was the world's first school for

college-level study in HRM

Several universities offer programs of study pertaining to HRM and broader fields. Cornell

University created the world's first school for college-level study in HRM (ILR

School).University of Illinois at Urbana-Champaign also now has a school dedicated to the study

of HRM, while several business schools also house a center or department dedicated to such

studies; e.g., University of Wisconsin-Madison, University of Minnesota, Michigan State

University, Ohio State University, Roosevelt University,and Purdue University.

There are both generalist and specialist HRM jobs. There are careers involved with employment,

recruitment and placement and these are usually conducted by interviewers, EEO (Equal Employment

Opportunity) specialists or college recruiters. Training and development specialism is often

conducted by trainers and orientation specialists. Compensation and benefits tasks are handled by

compensation analysts, salary administrators, and benefits administrators.
Professional organizations

Professional organizations in HRM include the Society for Human Resource Management, the

Australian Human Resources Institute (AHRI), the Chartered Institute of Personnel and Development

(CIPD), the International Public Management Association for HR (IPMA-HR), Management Association

of Nepal (MAN) and the International Personnel Management Association of Canada (IPMA-Canada),

Human Capital Institute. National Human Resource Development Network in India.

The Human Resources Management (HRM) function includes a variety of activities, and key among

them is deciding what staffing needs to have and whether to use independent contractors or hire

employees to fill these needs, recruiting and training the best employees, ensuring they are high

performers, dealing with performance issues, and ensuring your personnel and management practices

conform to various regulations. Activities also include managing your approach to employee

benefits and compensation, employee records and personnel policies. Usually small businesses

(for-profit or nonprofit) have to carry out these activities themselves because they can't yet

afford part- or full-time help. However, they should always ensure that employees have—and are

aware of—personnel policies which conform to current regulations. These policies are often in the

form of employee manuals, which all employees have.

Note that some people distinguish a difference between HRM (a major management activity) and HRD

(Human Resource Development, a profession). Those people might include HRM in HRD, explaining

that HRD includes the broader range of activities to develop personnel inside of organizations,

including, e.g., career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large

organizations, e.g., "should HR be in the Organization Development department or the other way


The HRM function and HRD profession have undergone major changes over the past 20–30 years. Many

years ago, large organizations looked to the "Personnel Department," mostly to manage the

paperwork around hiring and paying people. More recently, organizations consider the "HR

Department" as playing an important role in staffing, training and helping to manage people so

that people and the organization are performing at maximum capability in a highly fulfilling


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