Human Resource Management at Work

The Definitive Guide

Mick Marchington, Adrian Wilkinson, Rory Donnelly, Anastasia Kynighou

• Publisher: CIPD - Kogan Page
• Year: 2020
• ISBN:
  9781789664874
• Edition: 7
• Topic: Business
• Subtopic: Organisational Development
• Index: Business

A leading textbook in its field, Human Resource Management at Work is a comprehensive guide to the theory and practice of HRM. Aligned to the CIPD Level 7 qualification yet also relevant on non-CIPD accredited HR masters courses, this book covers everything students need to excel in their academic studies and will ensure that they can hit the ground running in a practitioner role after university. Divided into four key parts, the first part of the book covers HRM strategy and the global context, the forces shaping HRM at work and international and comparative HRM. Part Two discusses the role of HR professionals and line managers in the workplace, and how the responsibilities for delivering effective HR vary in a changing world of work, Part Three has expert coverage of the key areas of HR including resourcing and talent management, learning and development (L&D), reward and employment relations. The final part examines the impact that HRM can have on business performance and also outlines the key knowledge and skills required to carry out a business research project. Fully updated through, this seventh edition now has new coverage of diversity and inclusion (D&I), workplace analytics, ethics, wellbeing and precarious work as well as additional coverage of the alignment of HRM with organisational strategy and the integration of different components of HRM. Human Resource Management at Work includes new global case studies, reflective practice activities to encourage critical thinking, exercises to help the consolidation of learning and 'explore further' boxes to encourage wider reading. Online supporting resources include an instructor's manual and lecture slides.

Part One

HRM, strategy and the global context

01

HRM, strategy, and diversity and inclusion

LEARNING OUTCOMES

By the end of this chapter, readers should understand and be able to explain:

• How competing views on the meanings of HRM and strategy generate implications for managing people in all types of organisation.
• The nature and importance of corporate social responsibility (CSR) and ethics for a values-driven and morally principled approach to the management of people.
• The pivotal role that equality, diversity and inclusion should play in the work of HR professionals and in HR/Learning & Development (L&D) policies within organisations.

Drawing on this knowledge and insight, readers should be able to:

• Advise managers as to how HR strategies interconnect with broader corporate and business strategies, and their implications for managing and leading people.
• Demonstrate an ethical and professional approach to HRM, taking into account its multiple meanings.
• Have the professional courage to initiate, develop and defend policies and practices which embed equality, diversity and inclusion within the modern workplace.

1.1 Introduction

Originating from the United States, the term human resource management (HRM) became fashionable in the UK from the mid-1980s, when it began to replace other terms such as ‘personnel management’ (Gospel, 2019). Much of the interest at the time was around the idea of HRM as a new and distinctive approach, attempting to develop and utilise the potential of human resources to the full in the pursuit of strategic organisational objectives (Cascio and Boudreau, 2013; Wilkinson et al, 2020; Bauer et al, 2020), and led to talk of an ‘HRM revolution’. Yet, HRM can take many forms in practice and often varies between organisations and the occupational group that is targeted. HRM cannot be analysed in isolation from the wider strategic objectives of employers, specifically the need to satisfy shareholders, or (in the public sector) government and societal demands for efficiency and effectiveness.

However, strategy is also a multidimensional concept and, despite common usage of the term, it is more complex than the simple military analogy implies (Boxall and Purcell, 2016; Johnson et al, 2017; Lynch, 2018; Grant, 2019). Strategies emerge within organisations rather than being merely set by senior managers (generals) and then cascaded down the hierarchy by more junior managers to those they manage (the troops). Moreover, as we see in Chapter 2, wider societal objectives, legislative and political frameworks, social and economic institutions, and a range of different stakeholder interests also influence strategies. Strategy is not simply about financial returns to shareholders but also involves a wider base of stakeholders that includes customers, local communities, the environment and of course workers. HRM differs from other managerial functions because of its professional, ethical and moral base, so trust and integrity are important elements in how HRM is practised at work. Hence, the interest in CSR and the idea that HRM has to be viewed in relation to organisational strategies and wider institutional forces.

Building on this, we include a more developed and extensive discussion of equality, diversity and inclusion than in previous editions of this book. In this chapter, we engage with the moral and business cases for equality, diversity and inclusion and review the development of national and organisational initiatives. We argue that the aim of equality through greater diversity and inclusion (D&I) continues to be a work-in-progress, with HR playing a key role in its achievement. This generates implications for the meanings of HRM, which we examine in the next section, as D&I is now central to HRM and the CIPD’s Profession Map.

1.2 The meanings of human resource management

‘People are our most valued asset’ has become a very common but rather overused and trite-sounding phrase. Indeed, historically competitive strategies have not been based on the capabilities of employees. Instead, labour has often been seen as a cost to be minimised, particularly in hard times when downsizing and retrenchment predominates (Rubery and Johnson, 2019; Armstrong and Brown, 2019b). However, organisations increasingly need to innovate and learn, which puts greater emphasis on human resources as a source of competitive advantage (Storey et al, 2019; Wilkinson et al, 2020).

Indeed, HRM is now often seen as one of the major factors differentiating between successful and unsuccessful organisations after technology or finance. This is particularly pertinent in the service sector, where workers are the primary source of contact with customers, either face-to-face in a service encounter or over the telephone or the internet. Even in manufacturing firms, the way in which human resources are managed is seen as an increasingly critical component in the production process, primarily in terms of quality and reliability. Much of this revolves around the extent to which workers are prepared and allowed to use their discretion to improve products and services. From this perspective, a particular style of HRM is envisaged, one that can be broadly termed the ‘high-commitment’ model (see Chapter 3).

Wilkinson et al (2020) argue that HRM can be seen as having:

1. A human focus: a focus on employee rights and well-being is evident in the underpinning history of HRM. This can be seen in the current emphasis on work design, well-being, D&I, and ethics, all of which are covered in this book. At its core, HRM focuses on managing the employment relationship and agreements (implicit and explicit) between individuals and organisations. In some cases, as we see in Chapter 5, HR professionals play the roles of employee advocate and ethical guardian in ensuring employers not only treat their employees properly, but also try to ensure they stay in line with – and hopefully promote – wider societal responsibilities. These themes are revisited in several chapters in this book.
2. A resource focus: HRM focuses on employees as a resource in enhancing organisational performance. We examine how HR practices can be linked to organisational productivity and competitiveness. This is done by ensuring the organisation acquires employees with the ability and motivation to perform via effective recruitment and selection practices, and builds capabilities via L&D and performance management. Much of this literature is informed by the resource-based view of organisations, which we examine in Chapter 3.
3. A management focus: in recent years, there has been much focus on how the HR function has evolved. While HR professionals used to be seen as the guardians of administrative and transactional issues, nowadays they are required to adopt a more strategic approach, which focuses on managing change, building organisational cultures and becoming a partner in the business, as well as being able to interpret workforce analytics and adopt a more agile approach. This requires a different set of skills, knowledge and behaviours from HR managers; this appears again in Chapters 5 and 6 in particular, but also re-appears throughout the book.

As Snell and Morris (2018) note, it is not just HRM scholars who are calling for a stronger focus on the human resources inside a firm and how they are managed, but mainstream strategy scholars are also beginning to acknowledge that they need to focus on ‘micro-level’ factors; the value proposition of a firm is seen as relying more on knowledge and service activities, and so strategic management depends very much on what people know and how they behave (Lynch, 2018; Grant, 2019). For Snell and Morris (2018), this is because products and services often originate from the human and social capital of employees, who have agency and free will, which makes how they are managed particularly critical. The increase in differentiated and segmented workforces poses added cultural, geographical and competency challenges (Huselid and Becker, 2011).

HRM is still a relatively new area of study that is seeking to gain credibility in comparison with more established academic disciplines – such as economics, psychology, sociology and law – which have a much longer history. HRM is often contrasted with industrial relations and personnel management, with the former laying claim to represent the theoretical basis of the subject while the latter is viewed as the practical and prescriptive homeland for issues concerning the management of people. In addition, there are so many variants of HRM it is easy to find slippage in its use, especially when critics are comparing the apparent rhetoric of ‘high-commitment’ HRM with the so-called reality of employers managing through fear and cost-cutting. Similarly, HRM often attracts criticism because it can never fully satisfy business imperatives nor the drive for employee well-being. Given that issues such as these are explored in depth in subsequent chapters, we focus here on a brief overview of the main strands of the subject. In the concluding section of the chapter, we outline what we see as the main components of HRM.

1.2.1 The origins of HRM in the United States of America

The terminology of HRM originated in the United States subsequent to the human relations movement, which focuses on how people relate to each other and behave in work and society (Gospel, 2019). The term HRM first appeared in textbooks in the mid-1960s, specifically in relation to the specialist function, which was interchangeably termed ‘personnel’ or ‘human resources’. What really helped HRM to take root a couple of decades later was the Harvard framework developed by Beer et al (1985).

In this framework, HRM was contrasted with ‘personnel management’ and ‘industrial relations’; the latter was conceptualised as reactive, piecemeal, part of a command-and-control agenda, and short-term in nature, whilst HRM was seen as proactive, integrative, part of an employee commitment perspective and long-term in focus. In line with this perspective, human resources were seen as an asset and not a cost. The Harvard framework consists of six basic components:

1. Situational factors, such as workforce characteristics, management philosophy and labour market conditions, which combine to shape the environment within which organisations operate.
2. Stakeholder interests, such as the compromises and trade-offs that occur between the owners of an enterprise and its employees – and unions where present. This makes the Beer et al framework much less unitarist than some of the other models (Bratton and Gold, 2017). A unitarist managerial viewpoint assumes common and cohesive interests are...