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Human resource management (HRM) is the 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 the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations In simple sense, HRM means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirement.
Its features include:
But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms, although these normally refer to the relationship between management and workers and the behavior of workers in companies.
The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. The field takes a positive view of workers, assuming that virtually all wish to contribute to the enterprise productively, and that the main obstacles to their endeavors are lack of knowledge, insufficient training, and failures of process.
HRM is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce, and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organizations.
Synonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. So if we move to actual definitions, Torrington and Hall (1987) define personnel management as being:
"a series of activities which: first enable working people and their employing organisations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled" (p.Â 49).
While Miller (1987) suggests that HRM relates to:
".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage" (p.Â 352).
The goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organization's employees, and the overall strategic direction of the company (Miller, 1989).
The basic premise of the academic theory of HRM is that humans are not machines, therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology, industrial engineering, industrial, Legal/Paralegal Studies and organizational psychology, industrial relations, sociology, and critical theories: postmodernism, post-structuralism play a major role. Many colleges and universities offer bachelor and master degrees in Human Resources Management.
One widely used scheme to describe the role of HRM, developed by Dave Ulrich, defines 4 fields for the HRM function:
Strategic business partner
However, many HR functions these days struggle to get beyond the roles of administration and employee champion, and are seen rather as reactive than strategically proactive partners for the top management. In addition, HR organizations also have the difficulty in proving how their activities and processes add value to the company. Only in the recent years HR scholars and HR professionals are focusing to develop models that can measure if HR adds value.
Human resources management comprises several processes. Together they are supposed to achieve the above mentioned goal. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they provide significant economic benefit to the company.
Recruitment (sometimes separated into attraction and selection)
Induction, Orientation and Onboarding
Training and development
Compensation in wage or salary
Travel management (sometimes assigned to accounting rather than HRM)
Payroll (sometimes assigned to accounting rather than HRM)
Employee benefits administration
Personnel cost planning
Careers and education
Cornell University's School of Industrial and Labor Relations was the world's first school for college-level study in HRM
The sort of careers available in HRM are varied. There are generalist HRM jobs such as human resource assistant. There are careers involved with employment, recruitment and placement and these are usually conducted by interviewers, EEO (Equal Employment Opportunity) specialists or college recruiters. Training and development specialism is often conducted by trainers and orientation specialists. Compensation and benefits tasks are handled by compensation analysts, salary administrators, and benefits administrators.
Several universities offer programs of study pertaining to HRM and broader fields. Cornell University created the world's first school for college-level study in HRM (ILR School). University of Illinois at Urbana-Champaign also now has a school dedicated to the study of HRM, while several business schools also house a center or department dedicated to such studies; e.g., University of Minnesota, Michigan State University, Ohio State University, and Purdue University.
Professional organizations in HRM include the Society for Human Resource Management, the Australian Human Resources Institute (AHRI), the Chartered HYPERLINK "http://en.wikipedia.org/wiki/Chartered_Institute_of_Personnel_and_Development"Institute of Personnel and Development (CIPD), the International Public Management Association for HR (IPMA-HR), Management Association of Nepal (MAN) and the International Personnel Management Association of Canada (IPMA-Canada), Human Capital Institute (HCI)
The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding what staffing needs you have and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have-and are aware of-personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.
Note that some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, including, eg, career development, training, organization development, etc.
There is a long-standing argument about where HR-related functions should be organized into large organizations, eg, "should HR be in the Organization Development department or the other way around?"
The HRM function and HRD profession have undergone tremendous change over the past 20-30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing a major role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.
Human resource management's objective, on the other hand, is to maximize the return on investment from the organization's human capital and minimize financial risk. It is the responsibility of human resource managers in a corporate context to conduct these activities in an effective, legal, fair, and consistent manner. Management is the process of getting things done effectively and effeciently with and through other people to achieve the objective of the organization.
Human Resource Management serves these key functions:
Recruitment & Selection
Training and Development (People or Organization)
Performance Evaluation and Management
Industrial and Employee Relations
Record keeping of all personal data.
Total Rewards: Employee Benefits & Compensation
Confidential advice to internal 'customers' in relation to problems at work
Competency Mapping (Competency mapping is a process an individual uses to identify and describe competencies that are the most critical to success in a work situation or work role.)
Time motion study is related to HR Function
Modern analysis emphasizes that human beings are not "commodities" or "resources", but are creative and social beings in a productive enterprise. The 2000 revision of ISO 9001 in contrast requires to identify the processes, their sequence and interaction, and to define and communicate responsibilities and authorities. In general, heavily unionized nations such as France and Germany have adopted and encouraged such job descriptions especially within trade unions. The International Labour Organization also in 2001 decided to revisit, and revise its 1975 Recommendation 150 on Human Resources Development. One view of these trends is that a strong social consensus on political economy and a good social welfare system facilitates labor mobility and tends to make the entire economy more productive, as labor can develop skills and experience in various ways, and move from one enterprise to another with little controversy or difficulty in adapting. Another view is that governments should become more aware of their national role in facilitating human resources development across all sectors.
An important controversy regarding labor mobility illustrates the broader philosophical issue with usage of the phrase "human resources": governments of developing nations often regard developed nations that encourage immigration or "guest workers" as appropriating human capital that is rightfully part of the developing nation and required to further its growth as a civilization. They argue that this appropriation is similar to colonial commodity fiat wherein a colonizing European power would define an arbitrary price for natural resources, extracting which diminished national natural capital.
The debate regarding "human resources" versus human capital thus in many ways echoes the debate regarding natural resources versus natural capital. Over time the United Nations have come to more generally support the developing nations' point of view, and have requested significant offsetting "foreign aid" contributions so that a developing nation losing human capital does not lose the capacity to continue to train new people in trades, professions, and the arts.
An extreme version of this view is that the historical inequities such as African slavery must be compensated by current developed nations, which benefited from stolen "human resources" as they were developing. This is an extremely controversial view, but it echoes the general theme of converting human capital to "human resources" and thus greatly diminishing its value to the host society, i.e. "Africa", as it is put to narrow imitative use as "labor" in the using society.
In a series of reports of the UN Secretary-General to the General Assembly [e.g. A/56/162 (2001)], a broad inter-sectoral approach to developing human resourcefulness [see United Nations Expert Meeting on Human Resources Development. `Changing Perspectives on Human Resources Development. ST/TCD/SER.E/25. June 1994] has been outlined as a priority for socio-economic development and particularly anti-poverty strategies. This calls for strategic and integrated public policies, for example in education, health, and employment sectors that promote occupational skills, knowledge and performance enhancement (Lawrence, J.E.S.)
Terms like "human resources" and "human capital" may be perceived as insulting to people. They create the impression that people are merely commodities, like office machines or vehicles, despite assurances to the contrary.
In the very narrow context of corporate "human resources" management, there is a contrasting pull to reflect and require workplace diversity that echoes the diversity of a global customer base. Foreign language and culture skills, ingenuity, humor, and careful listening, are examples of traits that such programs typically require. It would appear that these evidence a general shift through the human capital point of view to an acknowledgment that human beings do contribute much more to a productive enterprise than "work": they bring their character, their ethics, their creativity, their social connections, and in some cases even their pets and children, and alter the character of a workplace. The term corporate culture is used to characterize such processes at the organizational level.
The traditional but extremely narrow context of hiring, firing, and job description is considered a 20th century anachronism. Most corporate organizations that compete in the modern global economy have adopted a view of human capital that mirrors the modern consensus as above. Some of these, in turn, deprecate the term "human resources" as useless. Yet the term survives, and if related to `resourcefulness', has continued and emerging relevance to public policy.
In general the abstractions of macro-economics treat it this way - as it characterizes no mechanisms to represent choice or ingenuity. So one interpretation is that "firm-specific human capital" as defined in macro-economics is the modern and correct definition of "human resources" - and that this is inadequate to represent the contributions of "human resources" in any modern theory of political economy.
Human resources management trends and influences
In organizations, it is important to determine both current and future organisational requirements for both core employees and the contingent workforce in terms of their skills/technical abilities, competencies, flexibility etc. The analysis requires consideration of the internal and external factors that can have an effect on the resourcing, development, motivation and retention of employees and other workers. The external factors are those largely out-with the control of the organization and include issues such as the economic climate, current and future trends of the labor market e.g. skills, education level, government investment into industries etc. On the other hand internal influences are broadly within the control of the organization to predict determine and monitor, for example the organizational culture underpinned by management behaviours (or style), environmental climate and the approach to ethical and corporate social responsibilities.
In order to know the business environment in which any organization operates, three major trends should be considered:
the characteristics of a population/workforce, for example, age, gender or social class. This type of trend may have an effect in relation to pension offerings, insurance packages etc.
the variation within the population/workplace. Changes in society now mean that a larger proportion of organizations are made up of "baby-boomers" or older employees in comparison to thirty years ago. Advocates of "workplace diversity" simply advocate an employee base that is a mirror reflection of the make-up of society insofar as race, gender, sexual orientation, etc.
Skills and qualifications
as industries move from manual to a more managerial professions so does the need for more highly skilled graduates. If the market is "tight" (i.e. not enough staff for the jobs), employers will have to compete for employees by offering financial rewards, community investment, etc.
In regard to how individuals respond to the changes in a labour market the following should be understood:
how far is the job from the individual? The distance to travel to work should be in line with the pay offered by the organization and the transportation and infrastructure of the area will also be an influencing factor in deciding who will apply for a post.
the norms and values of the different careers within an organization. Mahoney 1989 developed 3 different types of occupational structure namely craft (loyalty to the profession), organization career (promotion through the firm) and unstructured (lower/unskilled workers who work when needed).
different age categories of employees have certain characteristics, for example their behavior and their expectations of the organization.
Human Resources Development is a framework for the expansion of human capital within an organization or (in new approaches) a municipality, region, or nation. Human Resources Development is a combination of training and education, in a broad context of adequate health and employment policies, that ensures the continual improvement and growth of both the individual, the organisation, and the national human resourcefulnes. Adam Smith states, "The capacities of individuals depended on their access to education". Human Resources Development is the medium that drives the process between training and learning in a broadly fostering environment. Human Resources Development is not a defined object, but a series of organised processes, "with a specific learning objective" (Nadler,1984) Within a national context, it becoms a strategic approach to intersectoral linkages between health, education and employment.
Human Resources Development is the structure that allows for individual development, potentially satisfying the organization's, or the nation's goals. The development of the individual will benefit both the individual, the organization, or the nation and its citizens. In the corporate vision, the Human Resources Development framework views employees, as an asset to the enterprise whose value will be enhanced by development, "Its primary focus is on growth and employee developmentâ€¦it emphasises developing individual potential and skills" (Elwood, olton and Trott 1996) Human Resources Development in this treatment can be in-room group training, tertiary or vocational courses or mentoring and coaching by senior employees with the aim for a desired outcome that will develop the individual's performance. At the level of a national strategy, it can be a broad intersectoral approach to fostering creative contributions to national productivity
At the organizational level, a successful Human Resources Development program will prepare the individual to undertake a higher level of work, "organized learning over a given period of time, to provide the possibility of performance change" (Nadler 1984). In these settings, Human Resources Development is the framework that focuses on the organizations competencies at the first stage, training, and then developing the employee, through education, to satisfy the organizations long-term needs and the individuals' career goals and employee value to their present and future employers. Human Resources Development can be defined simply as developing the most important section of any business its human resource by, "attaining or upgrading the skills and attitudes of employees at all levels in order to maximise the effectiveness of the enterprise" (Kelly 2001) The people within an organization are its human resource. Human Resources Development from a business perspective is not entirely focused on the individual's growth and development, "development occurs to enhance the organization's value, not solely for individual improvement. Individual education and development is a tool and a means to an end, not the end goal itself". (Elwood F. Holton II, James W. Trott Jr). The broader concept of national and more strategic attention to the development of human resources is beginning to emerge as newly independent countries face strong competition for their skilled professionals and the accompanying brain-drain they experience.
Employee recruitment forms a major part of an organization's overall resourcing strategies which seek to identify and secure the people needed for the organisation to survive and succeed in the short to medium-term. Recruitment activities need to be responsive to the ever-increasingly competitive market to secure suitably qualified and capable recruits at all levels. To be effective these initiatives need to include how and when to source the best recruits internally or externally. Common to the success of either are; well-defined organisational structures with sound job design, robust task and person specification and versatile selection processes, reward, employment relations and human resource policies, underpinned by a commitment for strong employer branding and employee engagement strategies.
Internal recruitment can provide the most cost-effective source for recruits if the potential of the existing pool of employees has been enhanced through training, development and other performance-enhancing activities such as performance appraisal, succession planning and development centres to review performance and assess employee development needs and promotional potential.
Increasingly, securing the best quality candidates for almost all organizations will rely, at least occasionally if not substantially, on external recruitment methods. Rapid changing business models demand skills of experiences which cannot be sourced or rapidly enough developed from the existing employee base. It would be unusual for an organisation today to undertake all aspects of the recruitment process without support from third-party dedicated recruitment firms. This may involve a range of support services, such as; provision of CVs or resumes, identifying recruitment media, advertisement design and media placement for job vacancies, candidate response handling, shortlisting, conducting aptitude testing, preliminary interviews or reference and qualification verification. Typically, small organisations may not have in-house resources or, in common with larger organisations, may not possess the particular skill-set required to undertake a specific recruitment assignment. Where requirements arise these will be referred on an adhoc basis to government job centres or commercially run employment agencies.
Except in sectors where high-volume recruitment is the norm, an organization faced with an unexpected requirement for an unusually large number of new recruits at short notice will often hand over the task to a specialist external recruiter to manage the end-to-end resourcing programme. Sourcing executive-level and senior management as well as the acquisition of scarce or 'high-potential' recruits has been a long-established market serviced by a wide range of 'search and selection' or 'headhunting' consultancies which typically form long-standing relationships with their client organizations. Finally, certain organizations with sophisticated HR practices have identified there is a strategic advantage in outsourcing complete responsibility for all workforce procurement to one or more third-party recruitment agencies or consultancies. In the most sophisticated of these arrangements the external recruitment services provider may not only physically locate, or 'embed', their resourcing team(s) within the client organization's offices but will work in tandem with the senior human resource management team in developing the longer-term HR resourcing strategy and plan.
Modern concept of human resources
Though human resources have been part of business and organizations since the first days of agriculture, the modern concept of human resources began in reaction to the efficiency focus of Taylorism in the early 1900s. By 1920, psychologists and employment experts in the United States started the human relations movement, which viewed workers in terms of their psychology and fit with companies, rather than as interchangeable parts. This movement grew throughout the middle of the 20th century, placing emphasis on how leadership, cohesion, and loyalty played important roles in organizational success. Although this view was increasingly challenged by more quantitatively rigorous and less "soft" management techniques in the 1960s and beyond, human resources development had gained a permanent role within organizations, agencies and nations, increasingly as not only an academic discipline, but as a central theme in development policy.
Strategic Human Resources
The goal of Strategic Human Resources is to align human resource strategy to business strategy. This can be accomplished by understanding how employees and customers serve business objectives, understanding the challenges faced by the company's core customers, and assessing the company's competition, in order to deliver value to all stakeholders. Strategic Human Resources balances the needs of employees with the needs of the organization and proactively develops policies, procedures and makes tailored, as opposed to standardized, decisions to address these specific needs.
HR can ensure adherence to the business strategy through the following actions:
1) Determine the appropriate organizational structure, job designs for the company.
2) Emphasize key attributes of successful candidates during recruitment and selection.
3) Identify key competencies in all performance management programs.
4) Ensure that all training and development programs build company bench strength.
5) Design compensation and rewards systems that reward desired behaviors.
6) Create employment branding initiatives that communicate desired customer experiences.
Strategic HR also has to do with verticial job enlargement. By increasing employee autonomy it leads to increased motivation, satisfaction, and productivity. This decreases the need for middle management and increases corporate citizenship. Employees work toward measurable organizational goals that ultimately increase the organization's bottom line. - NG
Strategic Human Resources starts with understanding the goals of the business so that the people decisions are aligned with the business objectives. Dave Ulrich, a professor of business at the Ross School of Business, University of Michigan said, "Value is defined by the receivers of HR work more than by the givers." HR can provide value and deliver strategic human resources through practices that attract, retain, reward and develop top talent. The quality of talent in a business can be a true differentiator.
HR can also provide value through the study of organiztional effectiveness and by developing engagement strategies. A headcount report has little value to a team of executives, however presenting engagement strategies that reduce turnover and reduce replacement costs can be measured and reported in a defined dollar value. By tracking engagement strategies and the change in turnover HR can report the cost of the programs and dollars saved in reduced turnover and this does get the attention of the executive team. HR is better received at "the table" when the HR metrics and HR spreadsheets are as good as the CFO's. KJV
Many HR professionals see the HR function as a separate entity, and are not involved in finding business solutions. For example, HR planning often takes places separately from the overall strategic planning process and only at set intervals.(e.g.,annually) Additionally, HR planning is done as a means of convincing top management to allocate sufficient resources for HR rather than to enhance the organizational performance process.
See J Bret Becton, Mike Schraeder. (2009). Strategic Human Resources Management: Are We There Yet? The Journal for Quality and Participation, 31(4), 11-18. Retrieved May 1, 2009, from ABI/INFORM Global database. (Document ID: 1643125681
However, Human Resources Strategy is aligning all of the people in the business sphere towards business success. HR professionals should integrate their management of administrative functions as the manner in which they gain insight, of how to develop business tactics that enhances their competitive advantage. DO
Strategic human resource management is a complex process which is constantly evolving and being studied and discussed by academics and commentators. Its definition and relationships with other aspects of business planning and strategy is not absolute and opinion varies between writers. The definitions below are from the CIPD book Strategic HRM: the key to improved business performance1 within which there is comprehensive coverage of the various definitions and approaches to HRM, strategy and strategic HRM.
Strategic HRM can be regarded as a general approach to the strategic management of human resources in accordance with the intentions of the organisation on the future direction it wants to take. It is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need. It has been defined as:
All those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of business. The pattern of planned human resource deployments and activities intended to enable the forms to achieve its goals (GVT)
Strategic human resources is generally made up of many individual business and human reources-related strategies. "There may be strategies to deliver fair and equitable reward, to improve performance or to streamline structure. However, in themselves these strategies are not strategic HRM. Strategic HRM is the overall framework which determines the shape and delivery of the individual strategies." [cipd.co.uk] (MG)
The private sector has recognized that it is not just financial and technological capital that provide companies with the competitive edge, but people, or human capital. Without attracting and retaining the right people, in the right jobs, with the right skills and training, an organization cannot succeed. Therefore, people have been recognized as companies' most important asset. As the Federal Government moves toward a performance-based management approach, we, too, need to realize the importance of our human resources. A huge percentage of agencies' budgets are spent on human resources -- salaries, benefits, training, work life programs, etc. Nowhere else do you make that substantial an investment and not measure the return. Not only do human resources provide the competitive edge, but several recent studies have confirmed that the quality and innovation of HR practices impact business results. These studies were able to draw a correlation between increased quality of HR practices and increased business success. Among other benefits, HR alignment with mission accomplishment increases HR's ability to anticipate its customers' needs, increases the agency's ability to implement strategic business goals, and provides decision-makers with critical resource allocation information.
Finally, HR alignment is a vital process to advance agency accountability. By defining, maintaining, and assessing HRM goals and measures, communicating them throughout the agency, and using the information to make management decisions, agencies are able to ensure that the management of human resources contributes to mission accomplishment and that managers are held accountable for their HRM decisions in support of mission accomplishment.