HUMAN RESOURCE MANAGEMENT

INTRODUCTION-

In 1994, a noted leader in the human resources (HR) field made the following observation: Yesterday, the company with the access most to the capital or the latest technology had the best competitive advantage Today, companies that offer products with the highest quality are the ones with a leg up on the competition; But the only thing that will uphold a company’s advantage tomorrow is the caliber of people in the organization.

The goal of HRM is to maximize employees’ contributions in order to achieve optimal productivity and effectiveness, while simultaneously attaining individual objectives (such as having a challenging job and obtaining recognition), and societal objectives (such as legal compliance and demonstrating social responsibility)

Definitions of HRM Human resources management (HRM) is a management function concerned with hiring, motivating and maintaining people in an organization. It focuses on people in organizations. Human resource management is designing management systems to ensure that human talent is used effectively and efficiently to accomplish organizational goals.

According to the Invancevich and Glueck, “HRM is concerned with the most effective use of people to achieve organizational and individual goals. It is the way of managing people at work, so that they give their best to the organization”.

 According to Dessler (2008) the policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising comprises of HRM.

HARD & SOFT VERSIONS

Versions of HRM Hard Version

 “Human resource management reflects a long-standing capitalist tradition in which workers are regarded as commodity.” (Guest: 1999).

Hard approach to human resource management is a pragmatic perspective to human resource management which looks upon people as ‘resource’ and measures the tangible benefits accruing from their deployment.

Human resources have to be acquired, developed and deployed in ways that maximise their utility. The focus is on calculative and strategic aspect of managing human resource and the approach is “rational” (fact- based) with regard to factors of production.

 The objective is ‘efficiency’ (maximising benefit and minimising cost) and the philosophy is business-orientation (specifically human resource accounting) with emphasis on tangible and quantifiable value addition to the organisation.

The emphasis is on:

• drive for economy and efficiency;

• interest of management as opposed to workers;

• adoption of a strategic approach that is in line with business strategy;

• obtaining value-adding services from people through targeted human resource development practices;

• emphasis on strong people centric organisational culture, expressed or articulated in the mission or value statement and reinforced by communications, training and performance management processes; and ;

• the need to obtain agreed commitment of employees towards goals and purpose (s) of the organisation.

Soft Version

 The ‘soft’ model of human resource management traces its origin to the human relations school of administrative thought and emphasises development of healthy organisational culture by use of effective communication, motivation and leadership as primary sources of maximising performance. It looks upon employees as ‘co-contributors’ rather than adjuncts in organisational culture, ‘objects’ or pieces of automation. It stresses on the need to gain sustained commitment of employees through democratic means such as participative management, meaningful involvement in policy formulation and other methods of developing ‘high-commitment-high-trust’ culture in the organisation. Attention is therefore drawn to the key role of organisational behavior.

Reconciling the Two

 It has been observed that even if the rhetoric of human resource management is soft the reality is often harsh, with the interests of the organisation prevailing, more often than not, over that of the individuals’. Practically, we find a mix of hard and soft versions informing organisational practice. This implies that the distinction between hard and soft HRM is not as specific or obvious as it is tacit and implied.

It is a philosophy that appeals to management’s striving hard at achieving and sustaining competitive edge and appreciate that to do it they must invest in human resource as well as they do for other practices or for other areas (for example, procuring technology).

Principles of HRM

HRM is based on the following four fundamental principles (Armstrong, 1988:90).

a. Human Resource is the organisation’s most important asset;

 b. Personnel policies should be directed towards achievement of corporate goals and strategic plans;

c. Corporate culture exerts a major influence on achievement of excellence and must therefore be tempered with consideration of employee welfare.

d. Whilst integration of corporate resources is an important aim of HRM, it must also be recognised that all organisations are ‘pluralist societies’ in which people have differing interests and concerns, which they defend and at the same time function collectively as a cohesive group.

 Nature of HRM

HRM is a management function that helps manager’s to recruit, select, train and develop members for an organization. HRM is concerned with people’s dimension in organizations. The following constitute the core of HRM

1. HRM Involves the Application of Management Functions and Principles. The functions and principles are applied to acquiring, developing, maintaining and providing remuneration to employees in organization.

2. Decision Relating to Employees must be Integrated. Decisions on different aspects of employees must be consistent with other human resource (HR) decisions.

3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an organization will result in betterment of services to customers in the form of high quality products supplied at reasonable costs.

 4. HRM Functions are not Confined to Business Establishments Only but applicable to non[1]business organizations such as education, health care, recreation and like. HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize both employee as well as organizational effectiveness.

EVOLUTION-

A brief description of the manner in which they were treated and managed will be relevant for a proper understanding of human resource management in a historical perspective. 1. Managing Slaves: Slaves comprised an important source of manpower in almost all ancient civilisations. They could be sold and purchased like commodities. Their main purchasers were the wealthy rulers, landlords, tribal chiefs and effluent businessmen. The purchasers of slaves had a rather complete control over their slaves.

Managing Slaves:

Slaves comprised an important source of manpower in almost all ancient civilisations. They could be sold and purchased like commodities. Their main purchasers were the wealthy rulers, landlords, tribal chiefs and effluent businessmen. The purchasers of slaves had a rather complete control over their slaves.

They were subjected to strict supervision, and non-compliance of the orders of their masters or supervisors was generally punishable with physical tortures, and occasionally with mutilation of their limbs and even death sentence for grave offences.

Managing Serfs:

Serfdom was widely prevalent in the feudal societies of the pre-and early medieval era. Serfs were engaged by landlords mainly in agricultural operations and allied activities. The landlords would usually give them a piece of land for their habitat and often, some land for their own cultivation. In many cases, a paltry sum of money was advanced to them in order that they could remain attached to their masters. Under serfdom, some measure of personal relationship existed between the landlords and the serfs. Many landlords often tried to solve their genuine grievances and extended some help to those who were in distress. The feudal lords also occasionally gave some economic inducements to their serfs in the form of additional supply of food-grains and some money for their increased productivity and good behaviour.

Managing Indentured Labour:

The system of indentured labour emerged primarily with the flourishing of mercantilism and advent of industrial revolution. The discovery of new lands through sea and land routes led to a substantial increase in the demand of European goods abroad, and at the same time, gave a fillip to the establishment of industries in the continent.

From industrial revolution era to the present era, various stages to development of management of human resource practices may be classified as follows:

1. Industrial revolution era— 19th century

2. Trade union movement era — close to the 19th century

3. Social responsibility era — beginning of the 20th century

4. Scientific management era— 1900-1920s

5. Human relations era— 1930s-1950s

6. Behavioural science era— 1950s-1960s

7. Systems and contingency approach era – 1960 onwards

8. Human resource management era — 1980 onwards

Main features of these eras and the type of practices related to managing human resources are as follows:

1. Industrial Revolution Era:

The systematic development of HRM started with industrial revolution that started during 1850s in Western Europe and USA. The industrial revolution consisted, essentially, the development of machinery, the use of mechanical energy in production processes, and consequently the emergence of the concept of factory with large number of workforce working together.

2. Trade Union Movement Era:

Shortly after the emergence of factory system, workers started to organize themselves based on their common interests to form workers’ associations which were subsequently known as trade unions. The basic objectives of these associations were to safeguard interest of their members and to sort out their problems which arose primarily because of employment of child labour, long hours of work, and poor working conditions.

3. Social Responsibility Era:

In the first decade of 20th century, some factory owners started adopting a more humanistic and paternalistic approach towards workers. Paternalistic approach to labour management is based on the philosophy that labour is just like a child and owner is just like a father and the owner should take care of his labour just like a father takes care of his children.

Many critics to paternalistic approach viewed that this approach was adopted to overcome the problems posed by labour union movement as plenty of trade unions emerged which frequently interrupted work performance. Employers observed that workers were going out of their control and to overcome this problem, they implemented welfare scheme. Thus, this was a compulsion rather than a philosophy.

4. Scientific Management Era:

 Around the beginning of 20th century, Taylor started to find out ‘one best way of doing thing’ based on time and motion studies. On the basis of his experiments, he was able to increase workers’ productivity considerably and wrote many papers based on these experiments and a book on scientific management.

The main principles of scientific management are:

 (i) Replacing rule of thumb with science,

(ii) harmony, not conflict,

(iii) cooperation, not individualism, and

(iv) development of each and every person. Scientific management techniques relevant to management of workers are- functional foremanship, standardization and simplification of work, and differential piece wage system.

5. Human Relations Era:

This brief period was termed as ‘Industrial Psychology Era’. In 1924, a group of professors from Harvard Business School, USA, began an enquiry into the human aspects of work and working conditions at Hawthorne plant of Western Electric Company, Chicago. They conducted researches from 1924 to 1932 and arrived at the conclusions that productivity of workers depended on-

(i) social factors at the workplace,

(ii) group formation and group influence,

(iii) nature of leadership and supervision, and

(iv) communication. They concluded that in order to have better productivity, management should take care of human relations besides the physical conditions at the workplace. Consequently, the concepts of social system, informal organization, group influence, and non-logical behaviour entered the field of management of personnel.

 6. Behavioural Science Era:

Major conclusions of the contributions made by behaviouralists are as follows:

 i. People do not dislike work. If they have been helped to establish objectives, they will want to achieve them. In fact, job itself is a source of motivation and satisfaction to employees.

ii. Most people can exercise a great deal of self-direction and self-control and generate more creativity than required in their current job. Therefore, their untapped potential remains unutilized.

 iii. Managers’ basic job is to use untapped human potential in the organization.

iv. Manager should create a healthy environment wherein all persons can contribute to the best of their capacity. The environment should provide a healthy, safe, comfortable, and convenient place to work.

v. Managers should provide opportunity for self-direction by their subordinates and they must be encouraged to participate fully in all important matters.

vi. Operating efficiency can be improved by expanding subordinate influence, self- direction, and self[1]control.

vii. Work satisfaction may improve as a ‘by-product’ of subordinates making full use of their potential.

7. Systems and Contingency Approach Era:

Systems and contingency approach has attracted maximum attention of thinkers in management in the present era. It is an integrated approach which considers management of human resources in its totality based on empirical data. The basic idea of this approach is that analysis of any object must rely on a method of analysis involving simultaneous variations of mutually-dependent variables. This happens when systems approach is applied in managing human resources.

8. Human Resource Management Era:

With the increasing competition for market share, competition for resources including human talents, and increased knowledge in the field of managing human resources, people were not treated merely as physiological beings but socio-psychological beings as a prime source of organizational effectiveness and large organizations changed the nomenclature of their personnel department to human resource ‘department to reflect the contemporary view.

Even the American Society for Personnel Administration, the largest professional association in the field of human resource management, changed its name to the Society for Human Resource Management in 1990. At the academic level, similar pattern was followed and the title of personnel management course was changed to human resource management. Since then, the expression is gradually replacing the hackneyed term ‘personnel management’.

Evolution of HRM IN TERMS OF POSITION IN THE INDUSTRY

Historically, the beginning of HRM is traced to Robert Owen and his large spinning mills in Scotland. Charles Babbage and Henry Towde are the other two names associated with HRM’s early beginnings. Its growth was particularly marked in the inter-war era which was also the heyday of the human relations and its subsequent branching into the diagnostic, behavioural movement. The latter being more applied and scientific in nature, has since then developed along highly specialised lines.

 It has branched out specifically along the domains of applied psychology and sociology.

The latter in turn has evolved around the concept of the ‘welfare state’ while the former has proceeded as the behavioural science movement.

The art and science of personnel management is inclusive and incorporates the two trends.

The theory and practice of human resource management is based primarily in sociology and economics.

For Keeney (1990), human resource management is the conceptual euphemism to describe all the apparently transformative changes in the management of employee relations in the 1980s.

 Blunt (1990) suggests that in the late 1970s and even into the early 1980s, the discipline concerned with the human side of the enterprise was largely regarded as covering moribund housekeeping operational activities.

Consequently, there was no status and influence of the discipline. Guest (1990) attributes the concern with status to the origins of personnel management “as an extension of scientific management or a form of welfare management.

 Hegg (1995) points it out as the contrast between the high aspirations of the normative model and of the failure to deliver as reflected in the behaviourist model.” It later developed in stages through consistent research in the area so much so that at present; it is a pioneering area in management.

New dimensions continue to be added to it, lending it a unique dynamic character. It now covers diverse areas, as, mutual understanding at the work place between employers and employees and the socio technical school of thought emphasising restructuring of work to match social and technical systems (Schein 1988).

 Organisation Development (OD), Human Resources Accounting (HRA) and Quality of work life (QWL) are the most recent precursors of HRM. HRA was popularised by Flamholitz (1985) which represented the ultimate quest for legitimacy through quantification.

HRM’s financial implications are studied under ‘organisational imperatives’ (Kamoche, 1994).