The use of human resource management in firms

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"Human Resource Management is that field of management which does planning, organizing, directing and controlling the functionalities of procuring, developing, maintaining and utilizing a labor force, such that objectives at every level are achieved."

"Human resource management is responsible for how people are treated in organizations. It is responsible for hiring people for the organization, mending them to perform their work, compensating them for their labors, and providing solutions for the problems that arise" HRM staff in big organizations also includes human resource generalists and human resource specialists. As the name says, an HR generalist is regularly involved with all seven HRM functions, while the HR specialist focuses attention on only one of the seven responsibilities.

Before Discussing about the seven functionalities, it is essential to understand the job analysis. A vital component of HR unit, no matter about the deapths, is the job analysis, which in a whole has to determine activities, skills, and Intelligence required to a manpower for a particular job. Job analyses are "performed on three times: (1) when the organization was first started, (2) when a new job has been created, and (3) when a job has been changed as a result of new methods, new procedures, or new technology" .

Jobs can be analyzed through the use of questionnaires, observations, interviews, employee recordings, or a combination of any of these methods. Two important tools used in defining the job are:

· Job Description: Job description identifies the task, provides a list of responsibilities and duties specific to that job, gives performance standards, and specifies necessary machines and equipment;

· Job Specification: Job Specification specifies the basic amount of education and experience needed for fullfilling the task (Mondy and Noe, 1996).


Both the job description and the job specification are useful tools for this Staffing process, the first of the seven HR functions to be discussed. Someone or some event within the organization usually determines a requirement to hire a new person. In large organizations, an employee requisition must be given to the HR department that specifies the job title, the department, and the date the employee is needed. From there on , the job description can be referenced for specific job related qualifications to provide more detail when advertising the for position-either internally, externally, or both . The final say in selecting the candidate will probably be the line manager's, assuming all Equal Employment Opportunity Commission (EEOC) requirements are fulfilled. Other ongoing staffing responsibilities involve planning for new or changing positions and reviewing current job analyses and job descriptions to make sure they accurately reflect the current position.

Performance Appraisals

Once a suitable individual is brought into an organization, another function of HRM comes into action that is creating an environment that will motivate and reward exemplary performance. One way to test performance is through a formal review on a periodic basis, generally , known as a performance appraisal or performance evaluation. Since the line managers would be in day-to-day contact with the employees and can best measure performance, they are usually the one who conduct the appraisals. Other evaluators of the employee's performance would include subordinates, peers, group, self, or a combination of one or more Managers.

Just as there can be different performance evaluators, depending on the job, several appraisal systems can be used. Some of the popular appraisal methods include

· Rating of all the employees in a group

· Using rating scales to define above-average, average, and below-average performance of the individual.

· Recording favorable and unfavorable performance,can be known as critical incidents

· Managing ,by objectives or MBO (Management Buyout) .

Cherrington (1995) illustrates how performance appraisals serve many purposes,which includes:

1. Guiding human resource actions such as hiring, firing, and promoting the employees.

2. Rewarding employees by bonuses, promotions, and so on.

3. Providing feedback and noting the areas of improvement.

4. Identifying training and development needs in order to improve the individual's performance on the job.

5. Providing job related data useful in human resource planning.

Compensation and Benefits

Compensation is payment in the form of hourly wages or annual salaries and benefits are insurance, pensions, vacation, modified workweek , sick days, stock options, etc. can be a catch-22 because an employee's performance can be influenced by compensation and benefits, and vice versa. In the ideal situation, employees feel they are paid what they are worth, are rewarded with sufficient benefits, and receive some intrinsic satisfaction .Compensation should be legal and ethical, adequate, motivating, fair and equitable, cost-effective, and able to provide employment security .

Training and Development

Performance appraisals not only assist in determining compensation and benefits, but they are also instrumental in identifying ways to help individuals improve their current positions and prepare for future opportunities. As the structure of organizations continues to change through down sizing or expansion.

"Training focuses on learning the skills, knowledge, and attitudes required to initially perform a job or task or to improve upon the performance of a current job or task, while development activities are not job related, but concentrate on broadening the employee's horizons" . Education, which focuses on learning new skills, knowledge, and attitudes to be used in future work, also deserves mention .

Because the focus is on the current job, only training and development will be discussed. Training can be used in a variety of ways, including (1) orienting and informing employees, (2) developing desired skills (3) preventing accidents through safety training (4) supplying professional and technical education and (5) providing supervisory training and executive education .

The type of training depends on the material to be learned, the length of time learners have and the financial resources available. Instructor-led Training is one of the method, in which allows participants to see a demonstration generally and to work with the product first-hand. On-the-job training and apprenticeships let participants acquire new skills as they continue to perform various aspects of the job. Computer-based Training provides learners at various geographic locations access to material to be learned at convenient times and locations. Simulation exercises give participants a chance to learn outcomes of choices in a nonthreatening environment before applying the concept to real situations.

Training focuses on the current job, while development concentrates on providing activities to help employees expand their current knowledge and to allow for growth. Types of development opportunities include mentoring, career counseling, management and supervisory development, and job training .

Employee and Labor Relations

Today, unions remain a controversial topic. Under the provisions of the Taft-Hartley Act, the closed-shop arrangement states employees are not required to join a union when they are hired. Union-shop arrangements permit employers to hire non-union workers contingent upon their joining the union once they are hired. The Taft-Hartley Act gives employers the right to file unfair labor practice complaints against the union and to express their views concerning unions .

Not only do HR managers deal with union organizations, but they are also responsible for resolving collective bargaining issues-namely, the contract. The contract defines employment related issues such as compensation and benefits, working conditions, job security, discipline procedures, individuals' rights, management's rights, and contract length. Collective bargaining involves management and the union trying to resolve any issues peacefully-before the union finds it necessary to strike or picket and/or management decides to institute a lockout.

Safety and Health

Not only must an organization see to it that employees' rights are not violated, but it must also provide a safe and healthy working environment. Mondy and Noe (1996) define safety as "protecting employees from injuries caused by work-related accidents" and health as keeping "employees free from physical or emotional illness" . In order to prevent injury or illness, the Occupational Safety and Health Administration (OSHA) was created in 1970. Through workplace inspections, citations and penalties, and on-site consultations, OSHA seeks to enhance safety and health and to decrease accidents, which lead to decreased productivity and increased operating costs .

Health problems recognized in the workplace can include the effects of smoking, alcohol and drug/substance abuse, AIDS, stress, and burnout. Through Employee Assistance Programs (EAPs), employees with emotional difficulties are given "the same consideration and assistance" as those employees with physical illnesses.

Human Resource Research

In addition to recognizing workplace hazards, organizations are responsible for tracking safety- and health-related issues and reporting those statistics to the appropriate sources. The human resources department seems to be the storehouse for maintaining the history of the organization- everything from studying a department's high turnover or knowing the number of people presently employed, to generating statistics on the percentages of women, minorities, and other demographic characteristics. Data for the research can be gathered from a number of sources, including surveys/questionnaires, observations, interviews, and case studies . This research better enables organizations to predict cyclical trends and to properly recruit and select employees.

Human Resource Models

Once the business strategy has been determined, an HR strategy is implemented to support the chosen competitive strategy. This type of reactive orientation would be depicted in Figure 1. In this sense, a HR strategy is concerned with the challenge of matching the philosophy, policies, programs, practices and processes - the 'five Ps' - in a way that will stimulate and reinforce the different employee role behaviors appropriate for each competitive strategy (Schuler, 1989, 1992).

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Figure 1 Hierarchy of Strategic Decision Making

The importance of the environment as a determinant of HR strategy has been incorporated into some models

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Figure 2 Strategies of HRM

'An organization's HRM policies and practices must fit with its strategy in its competitive environment and with the immediate business conditions that it faces' . The concept of integration has three aspects:

· Linking of HR policies and practices with the strategic management process of the organization

· Internalization of the importance of HR on the part of line managers

· Integration of the workforce into the organization to foster commitment or an identity of interest with the strategic goals.

The Matching Model

'HR systems and organizational structure should be managed in a way that is congruent with organizational strategy' . This is close to Chandler's (1962) distinction between strategy and structure and his often-quoted maxim that 'structure follows strategy'. In the Devanna et al. model, HRM strategy structure follow and feed upon one another and are influenced by environmental forces (figure 3).

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Figure 3 Matching Model

Human Resource Strategy Models

This section examines the link between organization/business strategy and HR strategy. 'Human resource strategies' are here taken to mean the patterns of decisions regarding HR policies and practices used by management to design work and select, train and develop, appraise, motivate and control workers. It consists of three models. The first model examined here, the control-based model, is grounded in the way in which management attempts to monitor and control employee role performance. The second model, the resource based model, is grounded in the nature of the employer-employee exchange and, more specifically, in the set of employee attitudes, in behaviors and in the quality of the manager-subordinate relationship. A third approach creates an integrative model that combines resource-based and control-based typologies.

Control-Based Model

The first approach to modeling different types of HR strategy is based on the nature of workplace control and more specifically on managerial behavior to direct and monitor employee role performance. According to this perspective, management structures and HR strategy are instruments and techniques to control all aspects of work to secure a high level of labor productivity and a corresponding level of profitability. This focus on monitoring and controlling employee behavior as a basis for distinguishing different HR strategies has its roots in the study of 'labor processes by industrial sociologists.

When organizations hire people, they have only a potential or capacity to work. To ensure that each worker exercises his or her full capacity, managers must organize the tasks, space, movement and time within which workers operate. In an insightful review, Thompson and McHugh comment that, 'control is not an end in itself, but a means to transform the capacity to work established by the wage relation into profitable production'.

The choice of HR strategy is governed by variations in organizational form (for example size, structure and age), competitive pressures on management and the stability of labor markets, mediated by the interplay of manager-subordinate relations and worker resistance (Thompson & McHugh, 2002). Moreover, the variations in HR strategy are not random but reflect two management logics (Bamberger & Meshoulam, 2000). The first is the logic of direct, process-based control, in which the focus is on efficiency and cost containment (managers needing within this domain to monitor and control workers' performance carefully), whereas the second is the logic of indirect outcomes-based control, in which the focus is on actual results (within this domain, managers needing to engage workers' intellectual capital, commitment and cooperation).

The Resource-Based Model

This second approach to developing typologies of HR strategy is grounded in the nature of the reward-effort exchange and, more specifically, the degree to which managers view their human resources as an asset as opposed to a variable cost. The sum of people's knowledge and expertise, and social relationships, has the potential to provide non-substitutable capabilities that serve as a source of competitive advantage. The various perspectives on resource-based HRM models raise questions about the inextricable connection between work-related learning, the 'mobilization of employee consent' through learning strategies and competitive advantage.

The resource-based approach exploits the distinctive competencies of a work organization: its resources and capabilities. An organization's resources can be divided into tangible and intangible (brand-name, reputation and know-how) resources. To give rise to a distinctive competency, an organization's resources must be both unique and valuable. By capabilities, we mean the collective skills possessed by the organization to coordinate effectively the resources. According to strategic management theorists, the distinction between resources and capabilities is critical to understanding what generates a distinctive competency . Putting it in terms of a simple SWOT analysis, the resource-based perspective emphasizes the strategic importance of exploiting internal 'strengths' and neutralizing internal 'weaknesses'. Figure 4 summarizes the relationship between resources and capabilities, strategies, and sustained competitive advantage.

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Figure 4

The Integrative Model

Bamberger and Meshoulam integrate the two main models of HR strategy, one focusing on the strategy's underlying logic of managerial control, the other focusing on the reward-effort exchange. Arguing that neither of the two dichotomous approaches provides a framework able to encompass the ebb and flow of the intensity and direction of HR strategy, they build a model that characterizes the two main dimensions of HR strategy as involving 'acquisition and development' and the 'locus of control'.

Acquisition and development are concerned with the extent to which the HR strategy develops internal human capital as opposed to the external recruitment of human capital. In other words, organizations can lean more towards 'making' their workers or more towards 'buying' their workers from the external labor market. This is called as the 'make-or-buy' aspect of HR strategy. As

Figure 5 shows, these two main dimensions of HR strategy yield four different ideal types of dominant HR strategy:

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Figure 5 Dimensions of HR Strategy

The commitment HR strategy is characterized as focusing on the internal development of employees' competencies and outcome control. The traditional HR strategy, viewed as focusing on the external recruitment of competencies and behavioral or process-based controls. The collaborative HR strategy, involves the organization subcontracting work to external independent experts giving extensive autonomy and rating their performance primarily in terms of the end results. The paternalistic HR strategy offers learning opportunities and internal promotion to employees for their compliance with process-based control mechanisms.

Task 2

Psychological Contract and the Foundation for Adaptive Strategies

Employment relationships in the past assumed a fair day's work for a day's pay under relatively stable business conditions. Loyalty and sustained good work were rewarded through varying degrees of job security. Now, however, constant change, uncertainty and temporariness have largely replaced stability, predictability and permanency. Continuous performance improvement, acquiring new skills, employee flexibility, cost options and adding value have assumed great importance to companies. For example, in the 1980's, Fortune 500 companies, faced by stiff(er) foreign competition shed over 3.5 million manpower and nationally this figure may have reached 10.0 million. These reorganizations continue today and many are expected to continue for years to come. Yet, if manpower recognized that "their" company was undertaking creative and consistent actions to. The component areas are:

Manpower Planning

Manpower planning enables a department to project its short to long term needs on the Basis of its departmental plans so that it can adjust its manpower requirements to meet Changing priorities. The more changing the environment the department is in, the more the department needs manpower planning to show:

· The number of recruits required in a specified timeframe and the availability of talent.

· Early indications of potential recruitment or retention difficulties.

· Surpluses or deficiencies in certain ranks or grades.

· Availability of suitable qualified and experienced successors.

Manpower planning comprises two key components:

· Succession Planning.

· Turnover.

Succession Planning

Succession planning assesses the likely turnover in key posts, identifies suitable candidates to fill these posts in future, and ensures that they have the right training and exposure for their next work. Given the effort and support required for undertaking succession planning, it is normally confined to the directorate and those ranks immediately below, plus any grades with high turnover or anticipated expansion. Succession planning is a very important exercise because it minimizes the impact of turnover in these key ranks and gives a branch or department prior warning of any skill shortages or likely difficulties in finding suitable candidates. The succession plan should identify

· key posts and possible successors.

· causes of turnover.

· competencies of successors and the training required for them.

· posts for which no apparent successor exists and the remedial action planned.


Turnover refers to retirement, resignation and redundancy. While a department cannot plan turnover because there are factors, such as resignation, which are beyond its control, it can monitor turnover carefully to ensure the department will have minimal difficulties in retaining staff. If such difficulties are envisaged or experienced, the department will find out the causes for them and take early steps to address them by improving, such as, motivation or training and development opportunities. When addressing the aspects of succession and turnover, the department also needs to consider other manpower planning factors:

· external factors.

· internal factors.


Before a department takes steps to employ staff, it should work out the type of staff it needs in terms of grade and rank, and the time scale in which the staff are required. The general principles underpinning recruitment within the civil service are that recruitment should:

· Use procedures which are clearly understood by candidates and which are open to public scrutiny;

· Be fair, giving candidates who meet the stipulated minimum requirements equal opportunity for selection; and

· Select candidates on the basis of merit and ability.

Recruitment of overseas officers is undertaken only when no or insufficient local candidates are available. There are three key components to the recruitment process:

· Deciding on terms of appointment.

· Selection of candidates.

· Probation.

Deciding on Terms of Appointment

Having decided on the grade and rank of the staff required, and the timing concerned, the department should consider what the most appropriate terms of appointment would be. This should take into account the nature of the duties to be performed and the overall manpower deployment of the department. The different terms of appointment that can be offered are:

· Permanent and personable terms;

· Agreement terms;

· Temporary terms (month-by-month or day-by-day);

· Part-time;

· Non-civil service appointment; and

· Consultancy

Selection of Candidates

1. Advertising.

2. Screening and Selection.

3. Roles and Responsibilities.

4. Flexibility.


During probation staff is introduced to the mission, objectives and values of the civil service and their departments. Probation is a serious process which provides regular feedback on performance and assesses suitability for employment in the civil service. It includes:

· On-the-job training.

· Supervision and Guidance.

Performance Management

Performance management is a very important Human Resource Management function. Its objective is to improve overall productivity and effectiveness by maximizing individual performance and potential. Performance management is concerned with:

· Improving individual and collective performance.

· Communicating management's expectations to supervisors and staff.

· Improving communication between senior management, supervisors and staff.

· Assisting staff to enhance their career prospects through recognizing and rewarding effective performance.

· Identifying and resolving cases of underperformance. and

· Providing important links to other Human Resource Management functions, such as training.

Key Components


Motivation is in many ways the key to the success of Human Resource Management development. Managers should aim to increase performance through self-motivation, rather than having to use external motivation to bring about higher standards of performance. The civil service has many formal programmes to enhance motivation, and these are discussed in the "staff relations" section of this booklet.

Principle: The basic principle underpinning motivation is that if staff are managed effectively, they will seek to give of their best voluntarily without the need for control through rules and sanctions - they will eventually be self-managing.

Procedures: Some of the most effective ways for managers to motivate staff include giving praise; recognition; and positive feedback; passing on feedback from more senior managers; and letting other staff know which staff have been responsible for praiseworthy work and/or effort. Performance Appraisal

Performance appraisal assesses an individual's performance against previously agreed work objectives. It serves two functions. First, it enables management to evaluate an individual's performance in the current job to identify strengths and overcome weaknesses. Second, it provides information to assist management plan postings, transfers and promotions.

The basic principles governing performance appraisal are:

· It is a joint responsibility of the individual and the supervisor;

· It is a continuous and ongoing process;

· It should relate individual performance to departmental objectives;

· Checks and balances should be built into the system to ensure fairness and objectivity;

· Outstanding performance at one rank does not necessarily indicate suitability for promotion to a higher rank.

Except for officers on probation, performance appraisal is normally carried out once a year. Different grades/departments may have their own performance appraisal form which enshrines the principles set out in the preceding paragraph. The list of objectives or responsibilities should be reviewed between appraise and the appraising officer during the reporting cycle to see if changes are necessary. At the end of the reporting cycle, the appraising officer will write his assessment. He will pass his assessment to the countersigning officer for the latter's views.


Promotion denotes that an individual has the competencies, i.e. the skills, abilities, knowledge and attitudes, required to perform effectively at the next higher rank. The competencies reflect the knowledge and skills exhibited in observable behavior in the relevant areas of work. Promotion provides motivation to perform well and is an important part of performance management. The principle of merit or the best person for the job is key to promotion. Ability, potential and experience are taken into account in the assessment. The process of assessment should be fair and transparent. It is kept separate from the day to day management of performance and from the annual performance appraisal.

Promotion Procedures: Heads of Department/Heads of Grade have flexibility to invite certain officers to apply for promotion, or allow officers to opt out of promotion.

As a general rule promotion boards are convened to:

· Increase transparency and impartiality; and

· Provide an opportunity to consider eligible officers' potential and organizational succession planning.

Where necessary and appropriate, promotion interviews are held to assist in assessment to supplement information provided in staff reports. This will apply to situations where staff reports are insufficient and questionable in terms of fairness or consistency.

Guidance and Supervision

Day-to-day guidance and supervision is necessary to provide direction and feedback to staff. It reinforces the annual performance appraisal, helps groom officers for promotion, and assists staffs who are not performing well.

Guidance and supervision reinforces behavior that contributes to good performance and discourages behavior that blocks progress. Feedback should be:

· Frequent .

· Balanced .

· Immediate Specific .

· Constructive .

Training and Development

The objective of training and development is to enable civil servants to acquire the knowledge, skills, abilities and attitudes necessary to enable them to improve their performance. A strategic approach has the following characteristics:

· Commitment to training and developing people;

· Regular analysis of operational requirements and staff competencies;

· Linking training and development to departmental goals and objectives;

· Skilled training personnel;

· Regular evaluation;

· A continuous learning culture;

· Joint responsibility between managers and staff for identifying and meeting training needs; and

· A variety of training and development methods for different circumstances and learning styles.


Departments manage their own training function and have varying levels of responsibility to do this effectively:

·Management formulates departmental training policies and draws up training and development plans to support departmental missions, objectives and values.

·Managers identify competencies and training needs, implement training activities and provide coaching and supervision to ensure staff development occurs.

·Staff takes responsibility to make the most of the opportunities provided to maximize their potential.


The purpose of career development is to identify and develop the potential within staff, to build existing skill levels, and to prepare staff to take on greater responsibility during their career. Career development has to balance the needs and aspirations of the individual with the needs of the service - where this conflict, the needs of the service should prevail.

Staff Relations

The purpose of staff relations is to ensure effective communication between management and staff, to secure maximum cooperation from staff, and to motivate staff to give their best by ensuring that they are fairly treated, understands the overall direction and values of the Civil Service and those of their departments, and how decisions that affect them have been reached. The principles that govern staff relations are that, where possible:

· Management should communicate regularly and openly with staff;

· Staff should be consulted on matters that affect them;

· Problems and disputes should be resolved through discussion and consultation;

· The Government should uphold the resolutions of the International Labor Organization conventions; and

· Management should devise and encourage activities that contribute to staff's well being.

Management Information System

An effective management information system enables various levels of information to be systematically collected about human resource matters so that departments, policy branches and Civil Service Branch can monitor and predict the effectiveness of H R M practices. Accurate management information enables forward looking Human Resource Management by providing the means to:

· Monitor and improve on-going Human Resource Management performance.

· Provide up-to-date information on which to base policy development.

· Verify and demonstrate departmental effectiveness in Human Resource Management create service-wide checks and balances to safeguard delegation and provide true accountability for Human Resource Management.

The Way Ahead

Human Resource Management is a long established task. However there is a new emphasis emerging and greater importance being placed on finding ways of managing staff better, so that they can and will continue to give of their best in these times of changing community needs and expectations.

The challenge ahead in Human Resource Management is not to effect cultural change overnight, but rather to take initiatives which will lead to continuous improvement and show a more planned approach to managing people. It is our collective responsibility to motivate, develop and manage staff in such a way that their contributions to the service are maximized.

Advantages of Human Resource Planning

· Improvement of labour productivity.

· Recruitment of Qualified HR.

· Adjusting with Rapid Technological Changes.

· Reducing labour turnover .

· Control of training & recruitment costs.

· Mobility of labour.

· Facilitating expansion programmes.

· To treat manpower like real corporate assets.0

Limitations of HRP

· Inaccuracy .

· Uncertainties .

· Lack of support.

· Number s Game.

· Employees Resistance.

· Lack of Purpose.

· Time & Expense.

· Inefficient Information System.


Research is part of all the other six functions of human resource management. With the number of organizations participating in some form of international business, the need for HumanResourseManagement research will only continue to grow. Therefore, it is important for human resource professionals to be up to date on the latest trends in staffing, performance appraisals, compensation-benefits, training- development, employee-labor relations, safety and health issues.