HUMAN RESOURCE MANAGEMENT Concepts and Theories This presentation has been adapted from part of a range of resources offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course.

Assessment Exam Report

THE CONCEPT OF HRM: Objectives 1. Definition of HRM 2. Development of the HRM concept 3. The goals of HRM 4. Diversity of HRM 5. Philosophy of HRM 6. Underpinning theories of HRM 7. Reservations about HRM 8. HRM today

Task: Find 2 (recent) definitions. At the end of this session you will need to select 1 of these and explain why you think it is the best one https://www.youtube.com/watch?v=rByDmC0SqtM

HUMAN RESOURCE MANAGEMENT DEFINED Human resource management (HRM) is a 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 its objectives. https://www.youtube.com/watch?v=FjfvvFg1D14

FEATURES OF HRM Coherent: Commitment: Strategic: Integrated and mutually supporting HR policies and practices Commitment: Emphasis on gaining commitment to the organization’s mission and values Strategic: Integrate business and HR strategy People treated as assets: Focus on developing human capital Unitarist approach: Management and employees share the same interests Line managers deliver HRM: Belief that HRM is essentially the responsibility of line managers

Task - FEATURES OF HRM in your own words Strategic Coherent Commitment People treated as assets: Unitarist approach: Line managers deliver HRM:

Mini Plenary How would your define HRM? How useful do you think the features of HRM are? And why? The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

Development The Harvard framework The matching model The UK contribution The Bath People And Performance Model The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

Each group will research 1 of these models and prepare an electronic presentation for the class. Definition of model Purpose of model Explain model Give real-world example of model Link to theories and information from last week

THE HARVARD FRAMEWORK Stakeholder interests: shareholders management employees government unions HRM policy choices: employee influence human resource flow reward systems work systems Long-term consequences:  individual well- being Organizational effectiveness societal well- HR outcomes: commitment competence cost-effectiveness Situational factors: workforce characteristics business strategy and conditions management philosophy labour market unions task technology laws and social values Source: M Beer et al, Managing Human Assets, The Free Press, 1984

THE MATCHING MODEL OF HRM The matching model of HRM as developed by Fombrun, Titchy, and Devanna (1984) is illustrated below. Rewards Selection Performance management Performance Development Adapted from Fombrun et al, Strategic Human Resource Management, Wiley, 1984 This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit www.koganpage.com/resources and then click on Academic Resources.

THE DAVID GUEST MODEL OF THE LINK BETWEEN HRM AND PERFORMANCE effectiveness Business strategy HR outcomes: employee competence, commitment and flexibility Quality of goods and services HR practices Financial performance Productivity HR strategy Source: Guest et al, Effective People Management, CIPD, 2000 This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit www.koganpage.com/resources and then click on Academic Resources.

THE BATH PEOPLE AND PERFORMANCE MODEL Training and development Performance management Career opportunity Job security Recruitment and selection Ability and skill Motivation and incentive Opportunity to participate Pay satisfaction Front-line management: Implementing enacting leading controlling Organizational commitment Motivation Job satisfaction Discretionary behaviour Work–life balance Performance outcomes Job challenge/ autonomy Teamworking Involvement Source: J Purcell et al, Understanding the People and Performance Link, CIPD, 2003 Communications

Common features – Model Analysis Think about the four models -) do they share common features? -) do they do similar thing? -) what conclusions can we make about these models?

Mini Plenary Which of the four model do you think is the best? And why? Do you think that these models are suitable for model business? And why? Do you think that these models support ebusiness? And why? The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

1) Objectives 2) People 3) Employment relationship 4) Ethics Goals 1) Objectives 2) People 3) Employment relationship 4) Ethics

GOALS OF HRM Achieve high performance through people Enhance motivation, commitment and job engagement Achieve human capital advantage Improve knowledge sharing Attract and retain the skilled, committed and motivated people required Value people according to their contribution Increase capabilities and potential Develop a co-operative and productive employee relations climate

Mini Plenary What does the Goal Model focus on to achieve the HRM goals? How useful do you think the Goal Model is? The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

HRM practice varies Hard and soft HRM Diversity HRM practice varies Hard and soft HRM

VERSIONS OF HRM Using you knowledge of human motivation theories which we discussed last week. Suggest how these approaches view human motivation Soft Emphasis on the need to develop a high-commitment, high-trust organization – focus on ‘mutuality’, communication and involvement Hard Treating employees ‘rationally’ as as a key resource from which competitive advantage can be obtained Hard/soft Using a mix of hard and soft approaches This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit www.koganpage.com/resources and then click on Academic Resources.

Mini Plenary What do you think about Soft and hard HRM? How useful do you think these approaches are? The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

Philosophy The human resource gives competitive edge The aim is to enhance employee commitment HR decisions are of strategic importance HR policies should be integrated into the business strategy. Storey (2001) Karen Legge (1989) identified the following common HRM themes: human resource policies should be integrated with strategic business planning and used to reinforce an appropriate (or change an inappropriate) organizational culture; human resources are valuable and a source of competitive advantage; human resources may be tapped most effectively by mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the ‘adaptive organization's’ pursuit of excellence.

In your groups research the underpinning theories and write a short paragraph about each one -) Commitment -) Organizational behaviour -) Motivation -) AMO (ability motivation opportunity) -) Resource dependence -) Resource-based -) Institutional -) Transaction costs -) Human capital -) Agency -) Contingency

Link the Goal Model to the underpinning Theories Achieve high performance through people Enhance motivation, commitment and job engagement Achieve human capital advantage Improve knowledge sharing Attract and retain the skilled, committed and motivated people required Increase capabilities and potential Value according to their contribution Develop a co-operative and productive employee relations climate

Human resource management: philosophy, strategy, policies, processes THE HRM SYSTEM Human resource management: philosophy, strategy, policies, processes and practices Corporate social responsibility Human capital management Organization People resourcing Learning and development Reward management Employee relations Design Human resource planning Organizational learning Job evaluation and market surveys Industrial relations Development Recruitment & selection Individual learning Grade and pay structures Employee voice Job design Talent management Management Development Contingent pay Communications Employee benefits Knowledge management Health and safety and welfare HR services Performance management

Mini Plenary Do you think HRM theory is useful? Do you have enough information to answer this question? Justify your answer The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

Guest (1991: 149) referred to the ‘optimistic but ambiguous label of human resource management’. ‘The HRM rhetoric presents it as an all or nothing process which is ideal for any organization, despite the evidence that different business environments require different approaches’. (Armstrong, 2000: 577)

HRM is simplistic - as Fowler (1987:3) wrote: The HRM message to top management tends to be beguilingly simple. Don't bother too much about the content or techniques of personnel management, it says. Just manage the context. Get out from behind your desk, bypass the hierarchy, and go and talk to people. That way you will unlock an enormous potential for improved performance.

The unitarist/managerialist approach to industrial relations implicit in HRM prompted Fowler (1987:3) to write: At the heart of the concept is the complete identification of employees with the aims and values of the business - employee involvement but on the company's terms. Power in the HRM system, remains very firmly in the hands of the employer. Is it really possible to claim full mutuality when at the end of the day the employer can decide unilaterally to close the company or sell it to someone else?

HRM is 'macho-management dressed up as benevolent paternalism' (Legge, 1998: 42). HRM is manipulative, Wilmott (1993: 534) asserted that: ‘any (corporate) practice/value is as good as any other so long as it secures the compliance of employees’. Oxterby and Coster (1992: 31) asserted that: ‘The term ‘human resources’ reduces people to the same category of value as materials, money and technology – all resources, and resources are only valuable to the extent they can be exploited or leveraged into economic value’.

Mini Plenary Do you think HRM is a useful process? And why? Do you think HRM is there to support the company or the worker? And why? The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

HOW HR CAN MAKE AN IMPACT ON PERFORMANCE Develop and successfully implement high-performance work practices, particularly those concerned with job and work design, flexible working, resourcing, employee development, reward and giving employees a voice. Formulate a clear vision and set of values (the ‘big idea’) and ensure that it is embedded, enduring, collective, measured and managed. Develop a positive psychological contract and means of increasing the motivation and commitment of employees. Source: J Purcell et al, Inside the Box: How people management impacts on organizational performance, CIPD, 2003

HOW HR CAN MAKE AN IMPACT ON PERFORMANCE Formulate and implement policies that meet the needs of individuals and ‘create a great place to work’. Provide support and advice to line managers on their role in implementing HR policies. Manage change effectively. https://www.youtube.com/watch?v=jWdovBCWTF0 Source: J Purcell et al, Inside the Box: How people management impacts on organizational performance, CIPD, 2003

At a meeting of trustees the chief executive of a medium-sized charity proposed that a director of human resources should be appointed. Two trustees protested that the term ‘human resources’ implied that employees would just be treated as factors of production not as people. How would you respond?

Mini Plenary -) Suggest which model might be best to support the employees from one of the video from last week (Amazon & China) and explain why. -) Is the company using a hard or soft HRM? -) Suggest your own definition which best reflects that workplace, using todays notes? The Harvard framework (Beer et al, 1984) ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization's human resources’. It is necessary to adopt ‘a longer-term perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’. HRM had two characteristic features, (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies, (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing. The matching model (Fombrun et al, 1984) HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’. UK contribution Summed up by Hendry and Pettigrew (1990) who observed that: HRM was ‘heavily normative from the start: it provided a diagnosis and proposed solutions’. ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies ̶ in attitudes, scope, coherence, and direction ̶ of existing personnel management’.

List 3 things you have learnt today Identify 3 things you need to study in more depth On a scale of 1-10 (10 being high) how confident are you with your understanding of today’s topics? The more important messages of HRM such as the need for strategic integration, the desirability of gaining commitment, the virtues of partnership and participation and the key role of line managers are now generally accepted Emphasis is now placed on the need for HR to be strategic and business-like and to add value. New interests and developments include human capital management, engagement, talent management, competency-based HRM, e-HRM, high performance work systems, and performance and reward management. But these have not been introduced under the banner of the HRM concept as originally defined. The meaning of HRM – Boxall et al (2007) Human resource management (HRM) ̶ the management of work and people towards desired ends ̶ is a fundamental activity in any organization in which human beings are employed. It is not something whose existence needs to be radically justified: HRM is an inevitable consequence of starting and growing an organization. While there are a myriad of variations in the ideologies, styles, and managerial resources engaged, HRM happens in some form or other. It is one thing to question the relative performance of particular models of HRM… It is quite another thing to question the necessity of the HRM process itself, as if organizations cannot survive or grow without making a reasonable attempt at organizing work and managing people.