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During this research paper you are going to learn the definition of human resource management. What the differences or similarities are to be pointed out between different approaches and which are the advantages or disadvantages of either.
In our days human resources has become an essential point in the organizational structure than rather a bureaucratic act, were salaries are being prepared and employee documents are stored. Only a few decades ago, labor was seen as a rational cost factor. The employee/company relation also was completely different, as employees were more loyal and stayed basically for their whole life in one company.
In these days everything is getting global and employee loyalty is mostly correlated directly with the salary one employer is willing to pay. Typically employees change for wages, for more responsibilities or higher positions, better working environment, social benefits, company extras such as free meals, massages etc.
Not only have companies realized that a substantial value lies in the human resource, but it can even gain more value and is therefore also going to increase the companies or organizations value. Therefore they are trying to compete with the other organizations not only for better products, market share, profits etc. but especially for highly qualified workers that preferably are loyal to the company and would stay longer.
Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training.
There are two approaches in human resources which can be also called as soft or hard approach. The hard approach is the economically rational process to approach human resources management. It focuses on lowest possible labor costs and maximized control. It is quantitative and calculative and labor is seen as a commodity or resource.
The soft approach is a more humanistic version. Employees are also seen as a commodity or resource, but they may be developed. In this approach it is essential to say that you as a company or organization have much more trust in your employees. The line managers or the lower and middle management have direct responsibility in ensuring quality of production and guiding employees.
The definition of Management is: It comprises planning, organizing, resourcing, leading or directing, and controlling an organization. Management goes beyond the organization's internal operations to include the industry and the general environment. The key is on issues related to environmental scanning and industry analysis, appraisal of current and future competitors, assessment of core competencies, strategic control and the effective allocation of organizational resources.
Differences and similarities
In human resources management it is basically the same. Organizing and planning the staff, leading them, directing them accordingly to the corporate strategy etc. Human resources management has four key dimensions which consist of commitment, quality, flexibility and integration. Commitment is sought in the sense that employees are expected to identify closely with the interests of the organization and to go beyond just following management decisions, but identifying with the goals of the company or organization and behave accordingly. Flexibility is the staffs will and ability to change in regards of flexible organization structure. The quality of the staff is important in order to reach the set goals. Finally, integration refers to how the human resources management fits in to the business strategy. Integration also means that line managers are fully involved in the management of their staff. Line managers are typically reporting to the higher management and lead employees and work groups that do not have any direct decision making responsibilities. Line managers usually have tasks like:
Work allocation and monitoring
In order to apply human resource management you would basically follow a long term strategy and look at the staff as a resource to be used, rather than only a cost factor. Also you would look at the staff as most valuable asset of a company.
The Definition of Human resource management (HRM, as defined by Bratton, J. & Gold, J. (2003), is: "A strategic approach to managing employment relations which emphasizes that leveraging people's capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices."
Personnel management however is a more traditional approach. It is an administrative record-keeping function. Personnel management tends to give importance to norms, customs and established practices, where HRM gives importance to values and mission. In PM employee satisfaction is the key to keeping employees motivated and institute compensation, bonuses, rewards, and work simplification initiatives as possible motivators. In HRM improved performance is the driver of employee satisfaction and devises strategies such as work challenges, team work and creativity to improve motivation.
Another difference between these two methods is that personnel management usually is reacting and human resource management has a more pro-active approach. This means if a problem should occur, in personnel management you apply a solution that already has shown its usefulness. In human resource management you would look at each problem on an individual basis and try to find a separate solution for it.
Directly compared you can also say that personnel management is short term oriented, they trust their employees less and apply external control of their employees, it is bureaucratic and prefers the employees to just comply than think by their own. If you apply this method you can do this for lower qualified employees and work that does not involve several skills. The short term, because of the high employee fluctuation due to the low responsibility that the employees have. They probably get bored much faster as such work would be highly standardized and they basically do not contribute their own ideas to the work.
Off course there are also some similarities between these two approaches, like the human resources manager or the personnel manager is recruiting the staff. Both value the interests of the organization or company. Both want to work more cost effective. The approaches as mentioned before are just different.
From the shift of personnel management to strategic human resource management, it can be argued that many improvements within firms occurred. First, as recruiting and training approaches were modified to fit each new situation, the firms became significantly better at adapting to the constantly evolving environment, and to the workplace diversity. By adapting to the workplace's need, employees felt that they were more valued and this would have led to a higher job satisfaction. The importance of this is that financial success is strongly correlated with employee fulfillment. Another result of employees feeling more valued in a firm would increase their motivation to work efficiently. As (Van Marrewijk, M. & Timmers, J., 2003) states that: "Motivated personnel have a phenomenally higher productivity than employees who have mental dismissal". So employee satisfaction and job motivation are two internal sources of competitive advantage.
Some examples of human resource strategies in corporations:
"If you have the right attitude, anything is possible at Shangri-La. We invest heavily in training, and offer a variety of programs for all levels, as well as our own training school, the Shangri-La Academy.
Our aim is always to keep and reward the very best. So each year we fill most of the company's management positions via internal promotions and transfers - and, with over 50 projects in development around the world, the opportunities are endless."
"We believe the words "Welcome to McDonald's" should apply to our employees just as much as our customers. We're proud of our food, and we're just as proud of the jobs we create. Maybe it's a way to buy that first car. It could be a way to support yourself in college. Or it might be the way you enter the corporate world. Whatever you're looking for, McDonald's can help you make your own way, with challenging careers, quality benefits and the best opportunities around.
We believe in flexible schedules that fit into the way you live your life and can help you reach your goals. We'll also give you the mentorship and guidance you need to succeed.
We believe in giving you the tools you need to succeed, whether it's the chance to own your own restaurant or tackle the corporate ladder. To be the best company we can, we have to offer the best opportunities, and we'd like to believe that some of the best ones around are right here."
"The long-term success of the Company depends on its capacity to attract, retain and develop employees able to ensure its growth on a continuing basis. This is a primary responsibility for all managers.
The Nestlé policy is to hire staff with personal attitudes and professional skills enabling them to develop a long-term relationship with the Company.
Therefore the potential for professional development is an essential standard for recruitment.
Each new member joining Nestlé is to become a participant in developing a sustainable quality culture which implies a commitment to the organization and a sense for continuous improvement leaving no room for complacency.
Therefore, and in view of the importance of these Nestlé values, special attention will be paid to the matching between a candidate's values and the Company culture."
By managing human resources effectively and efficiently, employees will be satisfied and motivated thus enabling them to perform their duties to the best of their abilities. It will also help an organization to improve its performance and increase success. Effective human resource management encourage talent retention by making employees work meaningful and providing them with career satisfaction. The implementation of HRM in an organization enables employees to develop their personal and organizational skills, knowledge, and abilities consequently increasing their market value. HRM also looks into the welfare and safety of the employees. This does not only is a big plus for the employees, if you have more skilled and knowledgeable workers there likely going to perform better.
HRM must work to ensure that the working environment is safe and healthy; caring for employees' well-being has a major effect on their commitment. HRM must also realize that any problem an employee faces in his or her personal life will ultimately be brought into the workplace. Influences from economy, social or emotional life can cause good or bad performance. Employee assistance programs, such as programs that help individuals deal with stressful life situations, are needed. Such programs provide many benefits to the organization while simultaneously helping the affected employee.
In addition to protecting an employee's welfare, it is necessary to HRM to operate appropriate Communication Programs in the organization. Included in such programs is the ability for employees to know what is occurring around them and to prevent frustrations. Employee relations programs should be designed to ensure that employees are kept well informed and to create an environment where employee's voices are heard, if time and effort are expended in this phase.
From the above information, one can imagine how important Human Resource management is for any organization. An organization is a compilation of people. The life of the organization is its employees and the management of these employees in an effective manner becomes extremely important for an organization.
It is important to note that strategy involves more than developing strategies for the whole organization to use as part of a business plan. The strategic human resource function also concentrates on the internal department planning and aims to always improve the human resources management side and adapting it to the current issues. Strategic human resource management therefore also focuses on how it should be readjusted to adapt, who else should be involved and what the issues are. In summary, it can be concluded that both methods of management contain strengths and weaknesses, and therefore both of them are not perfect. However, by evaluating each option, strategic human resource management has proven to be the better way to gain competitive advantage by using a company's argued most important resource: its people.
The best advantage for firms that only use the traditional methods of personnel management instead of strategic human resource management is the cost saving. Instead on spending a lot of time analyzing each situation and trying to satisfy each employee's needs, it uses a model that was proven to already work for a previous situation. Also it can be argued that it is safer than strategic human resource management. If a situation arises, instead of trying to find a strategy that "could" work, they use a previous technique which has definitely worked in the past. This means that from the past success of that technique there would be less risk not functioning.
Human Resource management forms an integral part in the proper functioning of an organization. As the environment becomes more global, management of people has become more challenging, more unpredictable and more subject to fast change and surprises. In the long run or especially for the future the more modern human resource management form might be more effective, as in our days employees do not have a lifetime commitment to one company anymore. As stated above and shown in the examples, employees feel better in an environment where they can contribute ideas themselves, where they have space for personal development. Not only in business life, but also in their social and private life. All these points are covered by human resource management. Therefore we conclude this is the more favorable way to manage the human resource in an organization.