Human Resource Management for MBA and Business Masters

Iain Henderson

• Publisher: CIPD - Kogan Page
• Year: 2017
• ISBN:
  9781843984597
• Edition: 3
• Topic: Commerce
• Subtopic: Gestion des ressources humaines

Packed with practical information and offering a solid foundation in HRM theory, Human Resource Management for MBA and Business Masters covers all the topics MBA students need to know in a concise, accessible way. One of the only texts available for HR non-specialist students doing a Masters or MBA, it looks at the changing world of the line manager and HR professional with regard to key topics such as HRM and strategy, employee resourcing, human resource development, employee relations and performance management. Annotated further reading for each chapter and questions for each case study help cement knowledge and understanding.Now aimed at a wider readership of management Masters students, this fully updated 3rd edition of Human Resource Management for MBA and Business Masters features a greater international and contemporary focus, fresh case studies, coverage of the impact of new forms of employment and technology on HR, and updated online supporting resources. With diagrams and models throughout, it covers topics such as CSR, organizational culture and change, performance management and talent management, the criticisms of HRM levelled by the Critical Management School and different HRM challenges as they relate to each chapter. Online supporting resources for tutors include an instructor's manual, videos, multiple-choice questions and additional case studies; additional resources for students include multiple-choice questions and additional case studies.

CHAPTER 1

Human resource management

INTRODUCTION

Good managers are not only effective in their use of economic and technical resources, but when they manage people they remember that these particular resources are special, and are ultimately the most important assets of the organisation. Indeed, they are the only real source of continuing competitive advantage and the best managers never forget that these assets are human beings.

LEARNING OUTCOMES

On completion of this chapter you should:

• have a good appreciation of what the human resource management (HRM) function in contemporary organisations comprises
• have some appreciation of the development of HRM
• have an appreciation of the practical application of HRM
• understand the relationship between HRM and strategy
• appreciate ‘best-practice’ and ‘best-fit’ models of HRM and strategy
• recognise some of the key themes of HRM in the twenty-first century
• understand the importance of new forms of employment for HRM.

The precise meaning of the term ‘human resource management’ (HRM) is often a source of particular confusion to non-specialists. Older terms for the ‘people management’ function of an organisation such as ‘personnel management’ or ‘personnel administration’ are still sometimes used and it is often assumed that ‘HRM’ is just a fancy new title for the same thing.

One of the main objectives of this first chapter is to show this is not the case.

An additional source of confusion is that the term HRM is used in two senses: (1) to mean various ‘people management’ activities such as hiring, firing, rewarding, and so on, and (2) a particular approach to the whole question of managing people. The first sense (1) might be described as ‘operational’ and the second (2) as ‘strategic’. These senses are not always clearly distinguished in discussions and debates on HRM.

Of course in practice operational and strategic approaches are necessarily connected in that particular operational HRM policies and practices are determined by decisions taken at the strategic level, but nonetheless it is an important distinction to make and we should always be clear about whether we mean the operational or strategic sense, or both, when we say HRM.

We will try to clarify these meanings and definitions in this text.

We can say that, broadly, the ‘people management’ function within an organisation may be described as:

All the management decisions and actions that directly affect or influence people as members of the organisation rather than as specific job-holders;

and that HRM is currently the principal model or paradigm for the people management function.

HRM is not directly concerned with executive or line management of individuals and their jobs. Management of specific tasks and responsibilities is the concern of the employee’s immediate supervisor or manager – that is, the person to whom their performance is accountable (sometimes this might be the person’s team). So HRM managers do not have line authority over employees (other than over their own staff in HRM sections or departments).

The term ‘human resource management’ was being used by Peter Drucker and others in North America as early as the 1950s without any special meaning, and usually simply as another label for ‘personnel management’ or ‘personnel administration’. It was viewed as a bundle of operational techniques, not a distinct managerial discipline or function. By the 1980s, however, HRM in the strategic sense had come to mean a ‘radically different philosophy and approach to the management of people at work’ (Storey 1989, pp4–5) with an emphasis on performance, workers’ commitment, and rewards based on individual or team contribution.

One of the main characteristics of HRM is the devolution of many operational aspects of ‘people management’ from specialists directly to line managers. HRM itself has been called ‘the discovery of personnel management by chief executives’. Line managers are thus frequently confronted with HRM operational decisions and activities in their day-to-day business in a way that was not the case previously.

This process has been accelerated by other developments which add to the burden of the line manager while increasing the effectiveness of the organisation as a whole. Outsourcing of large areas of the traditional personnel management department’s routine functions has happened on a massive scale in the last three decades. Outsourcing of non-core functions, allowing the organisation to concentrate on its core competencies, has been one of the single most important recent organisational factors in both business and the public sector. It is extremely unlikely that this will be set in reverse in the foreseeable future.

In the case of HR services, the ‘dis-integrating’ effects of outsourcing have been amplified by such related developments as ‘e-HR’, in which the use of new technologies allows the provision of ‘self-service’ HR to employees and managers, and ‘HR business partnering’, in which large organisations disperse ‘HR partners’ to constituent businesses (Caldwell and Storey 2007).

New forms of employment – particularly those such as ‘crowdworking’ which exploit information and communications technology (ICT), including social media – are accelerating the divide in organisations between a core of high-value, permanent employees and others who enjoy significantly poorer employment rights and protection. Indeed, in some of these new working relationships the status of the worker can be that of a self-employed contractor rather than an employee as such.

Some of these developments are outlined later in this chapter and a fuller account is given in Chapter 9.

These developments in HRM, in outsourcing and in new forms of employment have not removed the need for HR specialists, but these people are just that – technical experts who act as internal consultants and to whom line managers can refer as required. This means that it will be more important than ever for line managers to communicate effectively with HR specialists and be able to weigh up their advice in an intelligent and knowledgeable manner – and to do that they have to speak the language and understand the concepts of the expert.

REFLECTIVE ACTIVITY 1.1

Write down what you think human resource managers are actually supposed to do.

REFLECTIVE ACTIVITY 1.1 ANSWER GUIDANCE

See section 1.1.

1.1 WHAT DO HR MANAGERS ACTUALLY DO?

Torrington et al (2014) – an authoritative text widely used in teaching managers who are studying for the professional exams of the Chartered Institute of Personnel and Development (CIPD) – describe the role of HR management as comprising specific objectives under four headings: staffing, performance, change management and administration.

• Staffing objectives are firstly concerned with ‘getting the right people in the right jobs at the right times’ – that is, the recruitment and selection of staff – but increasingly these days also advising on subcontracting and outsourcing of staff. Staffing also concerns managing the release of employees from the organisation by resignation, retirement, dismissal or redundancy.
• Performance objectives: people managers have a part to play in assisting the organisation to motivate its employees and ensure that they perform well. Training and development, reward and performance management systems are all important here. Grievance and disciplinary procedures are also necessary, as are welfare support and employee involvement initiatives.
• Change management objectives include employee relations/involvement, the recruitment and development of people with the necessary leadership and change management skills, and the construction of reward systems to underpin the change.
• Administrative objectives include: the maintenance of accurate employee data on, for example, recruitment, contracts and conditions of service, performance, attendance and training; ensuring organisational compliance with legal requirements, for example in employment law and employee relations; and health and safety.

General managers are increasingly involved directly in all of the first three types of objectives. Administrative objectives tend to remain the preserve of dedicated HR support staff.

The above closely reflects the arguments in David Ulrich’s highly influential Harvard Business Review article of 1998, ‘A new mandate for human resources’, which helped to shape HRM in the twenty-first century. After acknowledging that some commentators had been calling for the ‘abolition of HR’ on the grounds of serious doubts about its contribution to organisational performance, Ulrich agreed that: ‘there is good reason for HR’s beleaguered reputation. It is often ineffective, incompetent and costly’ (Ulrich 1998, p124).

His solution was for HR to be ‘reconfigured’ to focus on outcomes rather than on traditional processes such as staffing or compensation: ‘HR should not be defined by what it does but by what it delivers – results that enrich the organisation’s value to customers, investors and employees.’

His recommendations were that:

• First, HR should become a ‘partner’ with senior and line managers in strategy execution.
• Second, it should become an ‘expert’ in the way work is organised and executed, delivering administrative efficiency to ensure that costs are reduced while quality is maintained.
• Third, it should become a ‘champion for employees’, vigorously representing their concerns to senior managers and at the same time working to increase employees’ contribution – ‘that is, employees’ commitment to the organisation and their ability to deliver results’.
• Finally, HR should become an ‘agent of continuous transformation’, shaping processes and a culture that together improve an organisation’s capacity for change.

Ulrich and Brockbank (2005) increased the number of roles to five, with distinct responsibilities for ‘human capital developer’ and ‘leader’, as follows:

• strategic partner – aligning HR with business strategy as before but with new emphasis on transformation and cultural change
• functional expert – both for those operational policies and practices that are the direct responsibility of HR and wider aspects for which HR has indirect responsibility, such as communication
• employee advocate – corresponding to the earlier employee champion
• human capital developer – with emphasis on coaching behaviours and attitudes
• leader – primarily of the HR function, but also contributing to the leadership function of the organisation as a whole.

The structure of the present text reflects Ulrich and Brockbank’s roles as follows:

The strategic partner role is examined under the topic of strategic human resource management in this chapter (section 1.8); that of functional expert in Chapter 2; employee advocate in Chapter 4; human capital developer in Chapter 3; and leader in Chapter 9.

Ulrich’s, and later Ulrich and Brockbank’s, view of the HR role has set the agenda for people management in the twenty-first century as being essentially about its contribution to organisational performance.

Linda Holbeche, the then Director of Research and Policy for the UK profe...