External Contexts From Personnel Management To Hrm Commerce Essay


Q Discuss the development of people management over the last century referencing the influences and theoretical modeling underpinning the rise and adoption of Human Resource Management (HRM)?Critically evaluate the best practice models of HRM currently available and debate their relevance in the 21st Century organisational environment?

Compare the alternative practices that may occur within diverse cultures, geographic areas and sectors giving your reasons (supported by theory, academic, historical and personal evidence) for these differences?

Offer your conclusions about how people management will continue to evolve in an ever more globalised environment?

Introducing Human Resource Management (HRM) in Project units.

The definition of HRM is contemporary & problematic as it changes time to time, place to place depending up on the Requirements i.e, Economy, demands of labour & materials incorporated along with the Worker's Safety & their Social Welfare. This is because there is no generally agreed framework for understanding andAnalysing the HR function. Only competition of models is there.

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In practice, the HR function within organisations in the World is entirely flexible, Organisations principally driven by the external contexts of the existing age & are often changes within short periods of time. In fact the past history of HR in the Developed Countries projected that the priorities had been changed and focused its activities by re-inventing itself continuously. This had been largely in response to external socio-economic factors beyond the immediate control of HR practitioners or senior managers. For such reasons different definitions, frame works and models can be seen in the basic fundamental texts and in the wide range of articles examining and executing the functions, roles and antecedents of contemporary HRM in Organisations.

Human resource management and its external contexts from personnel management to HRM

The term HRM is used in two ways. They provide a useful distinction between.

The first is a generic term used to describe the body of management activities which have been traditionally labeled 'personnel management'.

Personnel management is driven by Specialist and Professionally Experts. Its features include: a short-term, ad hoc time perspective; a pluralist, collective approach for managing employment relations; bureaucratic, centralised, organisational structures; and cost minimisation evaluation criteria.

The second is regarded as a distinctive approach to HRM and suggests a specific philosophy towards carrying out 'people-oriented organisational activities'.

Distinctive approach, 'new' HR tradition (people-oriented organisational activities) is largely integrated with line management. Its features include: a long-term, strategic time perspective; a unitary, individual approach managing employment relations more organic devolved, flexible organisational structures; and maximum utilisation of human resources Interestingly identify six main periods or 'themes' in history of personnel management and its transition into contemporary HRM.

Introducing HRM, organisations and management

In each case, practices and theories of managing people within each of the personnel

Management and HRM traditions differ. In outline,

I.Planning perspective: Personnel management in the planning perspective is reactive and marginal to corporate plans.

ii. People management perspective: In the people management perspective, people are a variable cost, subject to compliance and organisational control.

iii Employment relations perspective: In the employment relations perspective, personnel management accepts that self-interest dominates at work and that conflicts of interests among stake holders are inevitable. Personnel management in the

iv Structure/systems perspective: structure/systems perspective imposes control of staff from the top and control of information flows downwards.

V Role perspective: In the role perspective, personnel management is specialised, professional and driven by personnel specialists.HRM views people as social capital capable of being developed and committed at work.

HRM in the Structure/systems perspective promotes employee participation and informed Choice by staff. In the role perspective, HRM is largely integrated into line management.

Human resource management and thereby external contexts 7

The recent literature clarifies that Global Countries does not agree upon the definition of contemporary HRM. Identifies three broad categories of general level theory about contemporary HRM

Strategic theories

Descriptive theories

Normative theories

A summary of the Personnel Management traditions & the Human Resources Management traditions;

Personnel Management traditions

Human Resources Management traditions

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Driven by employer needs to treat people

fairly in organisations

Driven by employer needs for competitive

advantage in the marketplace

Operates in relatively stable market


Operates within competitive markets and a

change agenda

Is a traditional approach to managing

people, with a strong administrative


Is a distinctive approach to managing people,

with a strong strategic purpose

Is short term, with an ad hoc perspective

Is long term, with a strategic time perspective

Adopts a pluralist frame of reference to

organisation and people management

Adopts a unitary frame of reference to

organisation and people management

Negotiates with trade unions where they

are recognised

Manages employees individually rather than


Is delivered, monitored and policed by

personnel specialists

Is delivered by HR professionals in

collaboration with line managers


Types of data

Primary data:-

Primary data is information that is collected by the research, usually for the purposes of a particular research project. Primary data might include information from interviews conducted as part of an enquiry. Similarly, the responses to a questionnaire which forms part of your study would be primary data. Primary data means first handed data. Where we collect the data for any organisation in first time means interview (telephonic interview, internet interview, and face to face interview), focus group, survey, and questioner..


Primary data affect the organisations profit and loss. And this is good for the organisation because organisation gets a direct data from customers and they get an idea about the future plan, also it affects the organisation for achieving their certain targets for profit and for satisfying the customers' needs and demand. With the help of primary data the organisation understand and knowing the customer needs


Secondary data are popular for various reasons.foremost is cost; even a small survey can be time-consuming and expensive, and the cost of doing a limited state wide or national sample can easily run into six figures. Few researchers can afford large-scale surveys conducted by top-notch survey organizations are available to secondary analysts at little or no change.


The primary of business needs means that human resource will be acquired, deployed and dispensed with as corporate plans demand. Little regard is paid to the needs of those human resources and the emphasis is on quantitative aspects. This is known as hard HRM. Human balancers want to work flexible hours or part-time. They are not necessarily interested in promotions but want challenging and stimulating work and a fulfilling job with responsibility and the opportunity to learn new skills.



even if you study about gathered data on the appropriate population, Interview may not have included questions on variables needed for the analyses.

Major disadvantage of secondary data is the researcher does not have control over the design of the data-gathering process, data collection process or manipulations of data available in forms are not suitable for the specific purpose and therefore require some manipulation in order to make useful.

Developments in the HR Function

This has resulted in HR functions becoming more specialised and being divided between 'shared services', 'business partners', 'centres of expertise' or 'vendor management' overseen by 'corporate HR'.

Shared services.

Those working in shared services undertake a lot of HR administrative tasks and provide information and advice through intranets and call centres to clients.

Corporate HR.

Those working in corporate HR have responsibility for developing HR and people strategy.

Business partners.

This HR role varies widely. Some business partners report to senior HR managers, others to senior line managers.

Centres of excellence

Other HR practitioners provide support to business partners, develop detailed policy for corporate HR, and act as reference points for shared services when dealing with complex queries.

Vendor Management.

These staff provides third-party services, such as pension administration, managed through service-level agreements.


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The professionalisation of those delivering work-based learning, with staff working in these areas being increasingly certificated and well qualified.

HRM and performance

Since the 1980s and 1990s, there have been fundamental changes in the structures and management processes of organisations in the private and public sectors. Adjustments to the functions, structures and roles of the HR function are partly in response to these changes but also reflect the revolution in information and communication technologies (ICTs) outlined above. Three changes stand out.

first period, many large-scale hierarchical organisations have become divisionalised. This has resulted from breaking them up into a number of semi-autonomous operations or quasi-businesses, responsible for all the business activities within their areas of jurisdiction.

Second, budgetary devolution is now commonplace. It resulted in allocating responsibility for managing activities within planned financial resources or targets to the lowest possible levels within organisations.

Third, internal markets have been created. Where services are traded between 'purchasers' and 'providers' to ensure that different groups are responsive to the needs of each other and that such activities are cost-effective.

The underlying aim of these systems is to get the best outcomes and highest efforts from individuals, teams and organisations, in pursuing corporate goals.

Four elements: defining performance standards and setting targets, reviewing and appraising performance, reinforcing performance standards, and supporting individuals through counseling and other means to meet performance standards.

HRM and Line Managers

Where HR professionals concentrate on developing strategy, designing performance management systems to match changing business priorities and other high-level business activities, line managers take on an important role in implementing HR strategies, policies and practices. Divisionalisation and devolved budgeting also promote delegation of HR activities.


Possible links between HRM and Business Performance

Managers are the most important factor explaining variations in job satisfaction

and job discretion amongst employees. 'Also one of the most important factors in developing organisational commitment.' It is noticed too that strengthening the relationship between managers and their employees results in a positive approach of employee's performance and motivation.

Ethics and HRM

Ethical organisations have always existed although most businesses have traditionally been driven by economic not ethical goals. In the nineteenth century, for example, Quaker companies operated on distinctive ethical principles and firms such as Cadburys incorporated welfare policies into their business philosophies, which benefited their workforces.

The HRM's origins and progress

The scientific management, human relations and human capital schools of management theory about managing people had been largely rejected by many management practitioners by this time being outdated. Scientific management had been based on effective job design and payment systems; human relations on social and psychological insights promoting harmony in the workplace; and human capital theory on investing in labour as an asset in firms, not viewing it as a cost, to raise labour productivity. Interestingly, most of these studies about managing people had also originated in the United States.

Multinational corporations

A multinational corporation (MNC) is a business organisation with headquarters in one country and operations in a range of others.

The reasons why MNCs expand into different countries vary: Reducing transport and distribution Costs, avoiding Trade Barriers, Securing supplies of raw materials or markets, and Gaining cost advantages such as Low labour Costs. MNCs also bring Benefits to Host Countries in terms of Economic Growth and Employment Opportunities, Improvements in Production techniques and the Quality of Human Capital, Availability of Quality Goods and Services locally, Government Tax Revenues, and Improvements in Local Infrastructures. MNCs also have distinctive HR policies and practices in managing their Multinational Workforces.

Global Corporation improve the opportunity of jobs in 21 century. The recent example of merger is iGATE merge with patni computers which increase quality and quantity of jobs and quality of work performance.

Cultural Competency and Diversity

  "Culture has been defined as "the shared values, traditions, norms, customs, arts, history, folklore, and institutions of a group of people."

Understanding culture helps us to understand how others interpret their environment. We know that culture shapes how people see their world, the perception of everyone is differ based on their culture and how they function within that world. Culture shapes personal and group values and attitudes, about what works and what doesn't work, what is helpful and what is not, what makes sense and what does not.

Factors that Influential by Culture

Values and Attitudes

Knowledgeable about cultural differences and their impact on attitudes and behaviors sensitive, understanding, non-judgmental, and respectful in dealings with people whose culture is different from your own and flexible and skillful in responding and adapting to different cultural contexts and circumstances.


"Communication work as a bridge between two or more people. It is one of the most powerful weapons to prove you in any field like Marketing, HR, and Finance and information technology."

Provides an opportunity for persons of different cultures to learn from each other. It is important to build skills that enhance communication. Be open, honest, respectful, nonjudgmental, and - most of all - willing to listen and learn. Listening and observational skills are essential. Letting people know that you are interested in what they have to say is vital to building trust. Communication strategies have to capture the attention of your audience. This means not only using the language and dialect of the people you are serving, it means using communication vehicles that are proven to have significant value and use by your target audience.

Offer your conclusions about how people management will continue to evolve in an ever more globalised environment

As the role and impact of the HR profession continue to evolve, we have reached a critical crossroad. Together and now, business leaders and HR professionals have the opportunity to understand the history that brings us to our current situation.

As HR leaders we are challenged to guide the many changes needed to continue the HR evolution. It surely looks worth the effort: The Hackett Group in Best Practices in HR (2004) showed that companies defined as having "world class HR" spent 27 % less per employee annually, spent 31 % less on total labour, had 35 % fewer HR staff per 1,000 employees, and experienced 61% fewer voluntary terminations (see Exhibit )

Defining the Problem with HR it is possible to improve both the effectiveness and the efficiency of HR. The role of HR as a function within organisations might be best described as a scatter gram.HR as a personal skill set must also continue to grow and develop. The activities and skills to deliver the transactional parts of HR are quite different than those required to deliver the transformational parts of HR.

1 The role of HR Making perfect policy for company benefits

2 Evolutions of HR Accountabilities


Business Realities

HR Name Changes



Small Business & Guilds

Did not yet even exist

Owners owned the HR issues


Industrial evolution

Labor Relations

People as interchangeable parts


Civil Service & WWI

Industrial Relations

Workers' rights and more formalized processes


Scientific Management& WWII

Personnel Administration

Efficiency experts and more highly evolved HR



Civil Rights & Compliance


Legal compliance and reporting; "policy police"


Human Relations, the Knowledge/

Service Economy, and Mergers &


Human Resources


Relevance in a fast-changing world; motivation and"human relations" theories abound


Modern Organizations

Organization Effectiveness?

Human Capital?

Organizational Capability?

No new official names, but lots of "morphing"as the transactional parts get outsourced and the

transformational parts get defined

Communication & Engagement: Both "top down" and even more importantly, "bottoms up":

Are people feeling actively informed, involved and engaged? Do employees feel like their voice is heard?

Workforce Planning: Do we have the right numbers of people with the right skill sets in the right place at the right time to deliver on the business strategy? What needs to change?

Talent: Does the business strategy require some new type of talent, what training and development processes are needed, If we are to acquire talent, what recruitment processes are needed? Do employees feel that they can use their most valued skills and abilities?

Retention: Will turnover undermine the business strategy? Rather than trying to fix "all turn over" What needs to change in leadership, working conditions, or pay to have an impact on retention? Do employees feel like they are valued and that they make a difference for the company?

Performance Management: Have the tools and processes for performance management been revised to reflect this year's business strategy? Do people have "line of sight" between what they do every day and the business strategy?

Team Development: Are the spaces between boundaries being managed well? Is the work within and between teams progressing smoothly? What could improve effectiveness across entire cycle of work so the customer notices the difference?

Strategy, Structure, and Skills:

HR challenges include delivering, transactional and administrative services required in a low cost way and delivering the more transformational business partner and change agent roles. These skills will lead to the development of trusted advisor status for HR.

HR Strategy Aligned to Business Priorities:-as described in preceding section.

HR Structure via Centers of Excellence:- The structure to deliver the lower pyramid transactional issues are described in the operational excellence section, in which leverage is on self-service, efficiency, and scalability.

HR Skills Related to Internal Consulting:-Explored in more detail later. Successful external consultants do some things that are equally important for internal consultants, which represent part of the HR accountabilities.

Quality of ideas: Ability to solve major business problems.

High quality work; Ability to develop creative solutions to difficult problems; Ability to complete projects in time and in budget, In addition, report preparation is essential.

Willingness to listen: Knowledge for demonstration & understanding the questions asked by client. Willing to listen to their problem & reply appropriate after ensuring the questions.

Understand the client's frame of reference meaning the background, experiences, and personal biasness affects the client's thinking about issues. It is important to develop an understanding of their communications preferences Do they prefer detailed factual arguments or one great symbolic story