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According to 'Human Resource Management in a Business Context'Â (3rd Edition, 2007) by Alan Price, 'HRM is a philosophy of people management based on the belief that human resources are uniquely important to sustained business success. An organization gains competitive advantage by using its people effectively, drawing on their expertise and ingenuity to meet clearly defined objectives. Human resource management is aimed at recruiting capable, flexible and committed people, managing and rewarding their performance and developing key competencies.'
1.1 Maps and Models of HRM
This part commences with a debate on different approaches to HRM, together with Keenoy's hologram comparison and Sisson's 4 main features of HRM models. The main concept is that of Hard and Soft HRM:
'Storey (1989) has differentiated between hard and soft HRM, characterized by the Michigan and Harvard models respectively.
'Hard' HRM targets on the resource side of human resources. It emphasizes costs in the form of 'headcounts' and focuses firmly in the hands of management. Their role is to manage numbers effectively, keeping the workforce closely matched with requirements in terms of both bodies and behaviour.
'Soft' HRM, emphasizes the 'human' aspects of HRM. Its concerns are with motivation and communication. People are led rather than managed. They are involved in defining and understanding strategic objectives.'
The section considers the views of Guest and Legge and then discusses the classification of HRM models. 3 American perspectives on HRM are provided from the work of Fitz-Enz, Ulrich and Pfeffer on pages 39-40.
1.2 General Impacts of Recession
The ILO (International Labour Organisation) forecasted in January 2009 that the global unemployment could rise by up to 50 million in the worst case scenario. A soaring proportion of companies resort to a quantitative (hard) approach to dispense the acquired human resources by joint dismissal & redundancies due to record fall in sales volume and to cut costs.
During such cases most of the organisations also prefer or emphasise on 3 types of proposals: short term working, paid or unpaid sabbaticals and also negotiate less working hours and increased training. The justification for such a step is that, by up skilling at the time of abridged demand retains skilled personnel and protects people as assets.
In 2006 Honda's car manufacturing plant in Swindon increased production of the new Honda Civic and Honda CR-V, creating an extra 700 jobs.
In 2009 due to the recession the demand in automotive sector was badly hit, so it announced a momentary closure of the Swindon plant which was quite an odd & assorted HRM approach (Legge (1995) - a mix of hard and soft organisational behaviour) as out of 3500+ employees the affected 2500 will get full basic pay for the first 2 months and around 60% for the remainder. When the plant reopens, employees will work overtime equivalent to the amount they have been paid for the closure period. Here Honda clearly followed a Hard approach in terms of HRM approach.
Another soft approach to recruitment strategy is the Short-term working scheme strategy which facilitates companies to retain trained staff and preserve human capital. The best example is the Volkswagen's abandonment of plans to sack 30,000 employees in 1993-94 based on an accord with the unions to trim down the working week from 35 to 28.8 hours.
As Bosch (2009) comments, in Germany 'the idea to dismiss hours and not workers seems to be well accepted'.
Concession Bargaining is a complete Hard HRM Approach as here during recession a company offers its staff to choose from 2 options i.e. 1. Freeze the pay for an agreed period or 2. Wage cuts with new working time arrangement.
Finnair declared its plans in Dec 2008 to temporarily dismiss 1,700 cabin crew to reduce costs. It had to adopt the 'Fortress' strategy (Sonnenfield, Peiperi and Kotter (1998)) after the staff discarded a proposal of voluntary wage cuts of 5% or a freeze in formerly granted pay increases for 15 months so as to shun the loss of 400 jobs at the airline. This Hard approach of HRM in recent years led to over 1,000 workers leaving the company.
We can also take the example of Jonathan RossÂ pictured above was apparently BBC's highest paid star (£18 million). TheÂ British Broadcasting CorporationÂ (BBC) is the largest broadcasting network in the world took a hard approach to manage the cost and his 3 year contract was slashed to £13.5 million losingÂ £1.5 millionÂ a year which made him to end his contract till July 2010 as he wasn't financially motivated.
Recession Sabbaticals are a signal where in it shows employers seriousness about retaining workers through the present financial turbulence have been offers of paid career breaks.
1.2.4 Irish Life & Permanent
The Irish Life & Permanent group is a leading provider of personal financial services in the Irish market.
As per their website the policy of the Irish Life & Permanent Group follows a Soft HRM and offers attractive and competitive remuneration packages to our staff, where performance is recognised and rewarded and where staff can share in the increased value of the group. During the recent economic downturn the offer by Irish Life & Permanent's banking were units of 2 and 3 year paidcareer breaks in Oct 2008. More than 100 of their 2,500-strong workforce applied for the offer of up to â‚¬20,000 for a two-year break and up to â‚¬35,000 for a three year break. The proposal is intended to cut the lender's costs while retaining trained staff in the hope of a recovery.
BAA which is owned by ADI Limited a consortium led by Grupo Ferrovial, a Spanish company and it functions seven UK airports (Heathrow, Gatwick, Stansted, Glasgow, Edinburgh, Aberdeen and Southampton). BAA believes it benefits from an strangely low turnover of staff since it is a good employer.
Examples of BAA employee benefits comprise (Appendix A1):
Moreover every year they spend over £6 million in developing their personnel, escalating their skills through practical or academic training. From the above statements it is quite clear that BAA applies the Soft HRM approach. But in 2005 & 2007 in spite of heavy censure the company planned a major cost-cutting programme to increase profits (Appendix A2). Redundancies were considered in all the departments apart from security, in response to further restrictions and during such recession the company considers cost to be managed which reflects upon Hard HRM approach.
According to businessdictionary.com Recruitment is a 'ProcessÂ of identifying and hiring best-qualifiedÂ candidateÂ (from within or outside of an organization) for aÂ jobÂ vacancy, in a most timely andÂ costÂ effectiveÂ manner'
Also called as online recruitment, is the use of technology to attract and employ candidates. The use of technology within HRM has increased over the years particularly on recruitment and selection purposes. According to CIPD's Recruitment Survey 2008, 75% of the organisations used their own corporate websites to attract candidates in 2007.
Leading organisations are adding in innovative solutions to retain competitive advantage, particularly in the combination of front-end career websites with back-end data management systems to complete an e-Recruitment solution.
2.1.1 Methods used in E-Recruitment
Company's own website giving out an insight on its products and services and the vacancies it has which needs to be filled in and its requirements.
Through a third party website which specialises in HR recruitment and has a definite and distant reach in terms of quality and diversity. Examples are monster.com, totaljobs.com, naukri.com.
Recruitment Site Database
These are the accompanying websites website to Online recruitment. These websites aims to help recruiters and jobseekers find the best resources available to them on the internet. Example onrec.com which has got one of the largest directories of online recruitment sites in the world.
Social Networking Sites
Requirements are now often posted on online communities like Orkut forums, Blogs, and other websites where IT professionals visit frequently. Especially in the Indian recruitment industryÂ recruiters are using social networking aggressively to track qualified candidates. Linkedin,Orkut, Facebook, Yahoo-360 degrees are used extensively by recruiters to network with professionals along with the traditional CV databases.Â
Virtual World Career Events
Online Career events are already being hosted by a couple of Job Portals. A few companies have extended their Recruitment activities into Virtual worlds like Secondlife.com
Students looking for a final traineeship or for a job present themselves here by means of a profile and a short video. Businesses will therefore have the opportunity to scout suitable talent fast. The student has the last word: she or he determines which job would be the best match. Example: studentstock.nl (Appendix A3)
There are numerous benefits to interviewing someone online from cost savings to time to hire. Considered as the next best thing to actually interviewing someone in the same room, taking the video resume to another level.Â Example: livehire.com ("The first real time Video Interviewing site that is Browser based and allows Employers to interview Candidates anytime, anywhere." - Michael P, Founder LiveHire.com.)
2.1.2 Why E-Recruitment?
Maintenance of candidate information in a standard format. Consolidates data from multiple recruitment sources and is universally accessible.
Automates workflow from job requisition to completion of the hiring process.
Saves and maintains a database of candidate information for future usage.
Transfers information and knowledge between hiring team online instantaneously
Gives the employer a chance to showcase the job to a large number of potential candidates.
Can be accessed and applied for jobs anytime anywhere.
Reduces paper work and manual administration
Reduces Cost & Time
Increases productivity & reduces hiring expenses in the long run.
2.1.3 Issues with E-Recruitment
Gathers information of a varied number of unsuitable applicants and is a waste of resource and excessive data storage.
Difficulty in getting the right talent or the right resource type
Dependent of Technology
Hugely dependent on technology and will effect during technical faults in the HR recruitment systems.
Usage of social networking sites will not confirm candidate history and background checks which are critical. The more frauds and lies the more need for verification.
Diversity & Computer Illiteracy
Some candidates might not be able to operate the website
Lacks personal contact
All said and done, but recruitment will need that personal contact, which would still be a crucial part of hiring the right candidate.