Human Resource Management
22nd, January 2012
Human resource management is the process of managing people in an organization. These people, who mostly comprise employees, are core to the organization, as they are responsible for a larger contribution toward the achievement of an organization’s objectives. Therefore, people are valuable assets to any organization, as they influence its productivity. Human resource management thus, employs a coherent and strategic style in managing its human resources (Armstrong, 2008). The human resource management is also charged with the recruitment, selection, and training of its employees. Apart from this, an effective human resource management will also consider developing its own unique reward system for the employees. The human resource management also executes the role of controlling the organizational leadership, organizational culture, as well as ensuring the organization and its employees adhere to labor laws. The human resource management is therefore, an important asset to all managers for the sustainability of the organization.
From the view of the employee, human resource management ensures that employees are working in a fair and equal environment under legal framework, which can protect their rights by Employment Rights Act, Common Law Duties, and the Redundancy Payments Act, among others. In addition, human resource management provides opportunities for the training and development of the employees, which benefit their future career path. On the other hand, from the organization’s view, human resources are the unique resources and capabilities that a firm brings to competition in its environment, which creates sustained competitive advantage (Cheatle 2001).
The human resource management in an organization is paramount, and plays important roles. The roles are diverse, and therefore, are divided and executed under different sub-divisions of the human resource management. The Welfare Human Resource Management has been existent since the 1960s and 70s. This sub-division of human resource management performs a valuable function for small, public, and private companies. It concerns itself with providing effective personnel administration, but having a little influence on the key strategic or operational decision-making of the organization (Cheatle 2001). It has very often been applied in a corner shop, which is small size with less human capital, such as a waffle shop on Oxford Street.
The Policing/Control human resource management often functions in small sized organizations where there exists no extremely sophisticated counseling and support services. In this type of organization, the management is allowed to exercise control, which is normally maintained through very clear procedures for recruitment, discipline, and training, and they often are accompanied by a welfare role. The Operational human resource management on the other hand focuses more on the regulatory functions of the human resources, especially in many large manufacturing industries, which have a huge turnover in staff, and large numbers of employees.
Similarly, the retail sector and the more traditional areas of public sector management, including local government, health, and public sector management, the heart of them is the need for organisational efficiency and good systems management in recruitment, health and safety or training (Purcell et al 2003).
Strategic human resource management according to Kanter (1984) plays the role of eliciting the present actions for the sake of the future. In addition, this is also a vehicle for change, as it is mainly involved with change mechanisms in the organization. This is very much the progressive arm of HR management and it has been so influential in the late 20th century, that it now is a regular feature of the most modern forward thinking public sector organizations including local government, health, government agencies, and many other statutory functions. This branch of management does not only deal with a collection of human resources related functions. Moreover, it is also responsible for “adding value” to the organization’s effectiveness and profitability by providing effective in-house management and regulation of resources so that they are nurtured and developed and, most importantly, retained within the organization (Kanter 1984).
Strategic human resource management is often applied in large companies with their own organizational culture and complex structure. Cadbury is a famous international company specializing in the manufacture of confectionaries. Given it is an international company operating in different countries; this company has a big number of employees, reaching 50,000 in total, across the world. This is a big number that requires effective human resource management. Therefore, such a company must highly invest in its human resources department. In different stage of the business, the human resource use varies strategy to maximize organizations’ resources resulting to a growth in organizations’ core competencies. In 1977, In order to have effective employees, Cadbury came up with different human resources management strategies that would ensure an effective employee body. For instance, the human resource management came up with a program that targeted the employees, referred to as, “Managing for Value.” The main aim of this programme was to make the organization be results-oriented. This way, employees are trained on the company’s goals and objectives, so that they can have a better understanding of this. Another strategy developed and applied by this company is the 3A’S strategy of Accountability, Adaptability, and Aggressiveness. This standard aims at influencing employees to be self-motivated, and to take the initiative of learning and being aware of the company objectives, and striving to achieve them without being pressured by the management. The implementation of these strategies by Cadbury has led to its employees having an increased sense of belonging. In addition, this has increased the value of the employees, thus increasing their input and the general company productivity (Armstrong 2008).
The largest private and commercial organizations usually have a human resource director who is responsible for the strategic human resource management. The director will in turn manage a large and often perform a powerful function dealing with every aspect of people management from “hiring to firing.” The managing director or chief executive will also work closely with the human resource director on key business decisions involving him or her at the outset of policy-formulation, not as an afterthought, or only to be included when things go wrong (Armstrong 2008).
There are different functions of the human resource management in an organization. However, a company needs to choose the right function for its human resource management.
The nature of the function will depend on the type of business it sits in, the size and complexity of the business activity, and the culture and traditions of the organization. Attempting to develop strategic human resource management in a voluntary organization of less than 100 employees may be worthy, but this is hardly likely to meet the organization’s core needs, and is most unlikely to be affordable. In this organization with less than 100 employees, the operational human resource management is best to apply. The following is a list of questions designed by Kevin Cheatle (Cheatle, 2001) to consider when deciding the role of the human resource management within the organization, and to think about its development as a tool for organizational success.
i. Is the organization people-centered?
ii. Have the skills required of the individuals working in the organization changed significantly over the last ten years?
iii. Does the organization employ plentiful of skills or less skills?
iv. How many locations does the organization operate from?
v. Does your organization employ more than one category of employee and with a range of terms and conditions of employment?
vi. To what degree is the workplace unionized and what is the history and tradition of industrial relations?
vii. How is employee training conducted in the organization?
- What is the public profile of the organization you work in?
Using the same example of Cadbury, which sells confectionary goods as milk chocolate, dairy milk flakes, among others, in order for it to produce these products; it is inevitable that Cadbury must rely heavily on its workforce to manufacture products to reach customers’ expectations. Besides manufacturing, it also requires large number of people in other department such as admission, marketing, finance, among others. Therefore, the organization is largely people-centered. Cadbury as a second largest confectionary company is continuously launching new products. No matter the marketing, people, or the staff in the manufactory, they need to learn new skills to sustain their jobs, and the human resource management is responsible for training and development to ensure the employee get the skills they require for their positions. Since it is a global business, which located in 50 countries, the human resource management role with multi-site operation is more complex than single site operation. To sum up, there are more than six “Yes” of Cadbury for the above question, which is likely to dictate that it requires a strategic HR management within it. There are many types of strategies to choose from. For instance, there is the employment engagement strategy, knowledge management strategy, among others. The most effective is to combine all these strategies to achieve the best outcome (Kay 1999).
The human resource management has an impact on organizational performance. The extent to which the human resource management can influence organisational performance is based on the assumption that people are the organization’s key resource and organisational performance largely depends on them. An effective human resource management therefore, adopts and implements strategies and policies, which will effectively increase the employeees’ performance, thus resulting in a positive influence on the company. The Bath people and performance model developed by Purcell et al (2003) explains this relationship.
Central to this model is the concept that performance is a function of Ability + Motivation + Opportunity (AMO). A look at the outside ring 11 shows how more meaning is given to AMOA by organizational policies and practices. The central box-front-line management is an important feature of this model. This emphasizes the fact that line managers are responsible for the implementation and application of organizational policies. Therefore, without these managers most organizational policies cannot be implemented in an organization.
Figure 1. The Bath people and performance model (Purcell et al, 2003).
Organizational commitment, motivation and job satisfaction all lead to discretionary behavior, which in turn generates performance outcomes, which in themselves contribute to commitment, motivation, and job satisfaction (Purcell et al 2003).
Kay (1999) notes that, the capabilities of an organization are paramount; as they determine how well the organization will compete in the market, whether favorably or unfavorably. Well-managed human resource is a distinctive competence, which can be described as an important feature that is hard for the rival to imitate, and will generate more profit for the company in the end.
The human resource management is integrated into organizational strategy, operations, and practices in various ways. First, the aspect of organizational effectiveness is imperative. The strategies any human resource management adopts should aim at improving the company’s productivity, as well as improving the relations between the company and its clients through setting up of policies that will address these important concerns in the organization. These policies could focus on different areas of the organization, such as knowledge, talent, and the management of these, and overall, the creation of a conducive work environment. Therefore, the organization will gain the integrated value (Bontis et al 1999).
For instance, a company called Mars, which specializes in the production of confectionary and food, is popular for its history of a strong human resource management. The human resource management this company adopts is unique and effective, and this makes it stand out among all other companies, based on its human resources practices. For effective human resource management, companies should develop policies that will lead to the retaining of their good employees, as these are crucial to any organization. When the human resource management is poor or adopts policies that are not practical, this may force the company to lose competent employees, as they will look for companies with better work conditions. Mars is a company that has ensured that its human resource management is practical and favorable to all employees, such that none will think of leaving the company. This good human resource management has led to increased productivity of Mars’ employees, as well as the increased productivity of the company itself. What influenced this effectiveness of the human resource management of Mars is the company’s adoption of the latest planning strategies and methods, which are applicable in the contemporary business world, thus influencing greater productivity. They wanted to ensure that they took every opportunity for helping the organization improve its performance whenever it arose. This case of Mars points out the need for different companies to embrace a human resource department that comprises well-qualified individuals, who are appropriately trained in human resource management, and with experience of the best HRM practices and approach. With this kind of human resource management in a company, the company and employee productivity is likely to improve, as this kind of human resource management will take advantage of any available opportunity to make the company excel (Bontis et al 1999).
Human capital management is another paramount component of human resource management. According to Bontis et al (1999), human capital is the representation of the human element in a company. This includes various human factors such as skills, knowledge, intelligence, expertise, among others, which all make the company have a unique character from other companies. These factors form the human aspects of a company and these have the capability to learn, transform, and are innovative. If these are utilized in the most appropriate manner, they have the capability of ensuring that the company lasts longer and survives different negative forces in the market. As earlier mentioned, human resource management therefore, has the greatest responsibility of ensuring that the company is committed, skilled, and self-motivated employees are retained, as these are valuable assets to the company.
Human capital management involves the operation of “rigorous recruitment and selection procedures, performance-contingent incentive compensation systems, and management development and training activities linked to the needs of the business” (Becker et al 1997). For example, The Richard Rogers partnership, an architectural practice, has grown in size due to its worldwide success. Its partnership, an architectural practice, has grown in size due to its worldwide success. Its HRS recognized the need to retain its strong informal team-working ethos, yet establish modern procedures in recruitment and appraisal and reward to ensure efficiency and equity (Becker et al 1997).
Knowledge management in human resource management plays another crucial role in a company. Knowledge management refers to “any process or practice of creating, acquiring, capturing, sharing and using knowledge, wherever it resides, enhance learning and performance in organizations” (Scarborough et al, 1999, p.58). The human resource management aims at developing skills and knowledge that will be unique to the organization. This is achieved through the implementation of a variety of learning processes in the organization, which includes all employees. For instance, in order to challenge the reasoning of their managers, the North West Water sent their managers on a field trip to study the processes of water treatment practiced in different world regions. They came back brimming with ideas and often from countries, that previously they would have dismissed as places from which there was nothing to learn.
Reward management is yet another factor of human resource management that is beneficial to employees. Motivation for employees is an important obligation of the human resource management in all companies. Since retaining employees is one of the objectives of human resource management, these need to be highly motivated by the company for them to experience job satisfaction, which will in return boost employee performance, as well as the productivity of the company. The human resource management in a company ensures this by developing policies that will enhance employee motivation and their commitment to their job. These policies will comprise provisions for rewards for the employees. These rewards can be either in the form of money, or other non-financial forms. With this, the employees will feel they are valued, and that they are making an important contribution toward achieving the company objectives. This will therefore, motivate employees to work even harder, which is beneficial to the company. For instance, Cadbury Company fulfills this as it has its own reward system for employees. This company gives bonuses to its employees on different occasions. Giving bonus will help their employees and the employees are satisfied with company’s plan. The bonuses given by this company vary, and are mainly in monetary form. However, the company ensures that all the employees are beneficiaries of the bonuses, which is why the company diversified its bonuses. By such plans, employees get motivated towards work and they can spend more time for company and for their bonuses. As new employees are also getting bonuses before joining only, they also will have motivation and encouragement towards work (Armstrong 2008).
Employee relations is another element of human resource management that sets the mood for most employees in the organization. The relations between employees and the management are important to all companies. This greatly influences the nature of work environment in a company. The human resource management therefore, must ensure that the relations in the company are productive, and uphold the highest form of harmony. This kind of relation can be achieved through different partnerships between employees and the management, through a variety of unions and societies they set up in the company. For instance, in the airline industry, the mission statement highly emphasizes on the appropriate treatment of their employees. In addition, the employees need a source of empowerment for them to execute their jobs effectively. At Duncan Aviation Company, the management believes that the quality of customer service of the company is determined by how their employees are treated. This means that unhappy and unsatisfied employees will lead to unhappy and unsatisfied clients. They keep their employees happy through strong, caring, and consistent leadership; developing, communicating, and staying true to their solid mission; a forward-focused vision, which keeps the company strong, and competitive; and high values that they live by on a daily basis (Becker et al 1997).
Finally, meeting diverse needs of employees in an organization is essential to ensure they are comfortable in their work environment. Another important role of the human resource management is to create and implement policies, which will address the different needs of the stockholders. These policies will also ensure that the employees from a diverse background are well managed, bearing in mind the various factors that make them different. These differences are in the form of work style, personal needs, employment needs, and aspirations, among others. The human resource management therefore, should work at meeting and balancing the various needs of the employees in the company, providing all employees with equal opportunities (Cheatle 2001).
In conclusion, human resource management is the threshold of all organizations because of the important role it plays in the management of employees, who are the center of an organization. Therefore, all managers of an organization must have the knowledge, skills, and experience in human resource management, as this is the force, which drives the organization. Effective human resource management will lead to a productive company, and vice versa. A company that adopts effective and practical human resource management strategies is more likely to retain its employees, as it will provide them a conducive work environment, as compared to a company with poor strategies, which will draw away its employees. Human resource management is diverse and includes areas of organizational strategy, operations, and policies, which ensure effective management and control of most processes in the organization. Most successful companies in the world exhibit strong human resource management, which has resulted in their success. Therefore, it is important that organizations invest in their human resource management, as this will increase their productivity and competence in the market.
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