Hrm Contribution To The Development Of Management Studies Commerce Essay

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Human Resource Management (HRM) is the function within an organization that focuses on recruitment of, management of, and providing direction for the people who work in the organization. Human Resource Management can also be performed by line managers. Human Resource Management is the organizational function that deals with issues related to people such as compensation, hiring, performance management, organization development, safety, wellness, benefits, employee motivation, communication, administration, and training. Human Resource Management is also a strategic and comprehensive approach to managing people and the workplace culture and environment. Effective HRM enables employees to contribute effectively and productively to the overall company direction and the accomplishment of the organization's goals and objectives. The new role of HRM involves strategic direction and HRM metrics and measurements to demonstrate value.


With the global economy and the increase in competition this brings, the human resource is viewed as the last competitive edge. When the organisational strategy has not considered the implications to the human resource i.e. are there enough trained employees nor do we need to employ more, the strategy runs a high risk of failure.

A human resources management lends some important topics to discuss.

Does HR sit and fit on the board?

Future planning or fire fighting?

Reactive or proactive?

Future planning or justifying role?

Can HR be strategic?

SHRM, another new fad?

HR driving the organisation.

Operations or planning the HR function?



There are two famous HRM models that exist today. One of these is the Michigan School Model which was developed by Fombrun, Tichy and Devanna (1984). Organizations that practice this model monitor investment in employee training and development to ensure to ensure it fits with the firm's business strategy. The management's principal reason for improving the effectiveness of HRM in this model is increasing productivity. The Michigan model also assumes that HRM will respond to the external and internal environment appropriately and a contingency approach to HRM. The Michigan model is hard HRM because it is based on strategic control, organizational structure and systems for managing people. (Edwards, 2000)


Another HRM model was developed by a group of academics from the Harvard Business School thus it was called the Harvard Model. The Harvard Model (Beer et al, 1984) proposes that people can be dealt with within four human resource categories.

The first category is the employee-influence which refers to the amount of authority, responsibility and power voluntarily delegated by and is compatible with the purpose and interests of the management.

The second is the element of human resource flow, which refers to decisions on recruitment, selection promotion, exit, job security, career development, advancement and fair treatment.

The reward systems is concerned with intrinsic and extrinsic rewards such as the work itself, sense of purpose, achievement and challenge, pay, bonuses, insurances and flexible working hours. The reward system should always be aligned with the overall business strategy and management philosophy.

The last category is that of work systems which deals with the arrangement of people, information activities and technology (Kidombo, 2006). 



This model stresses upon the crucial importance of the close integration of HR policies, systems and activities with business strategy. The Michigan theorists highlighted the following as being the most important HR issues to achieve such a match:

Selection of the most suitable people to meet business needs

Performance in the pursuit of business objectives

Appraisal, monitoring performance and providing feedback to the organization and its employees

Rewards for appropriate performance

Development of skills and knowledge required to meet business objectives

The essential features of this model are that it:

Is focused on individual and organizational performance

Is based on strategic control, organizational structure, systems for managing people

Concentrates on managing human assets to achieve strategic goals

Contributes to human resource performance

Has components such as organization structure, mission and strategy, human resource selection, performance appraisal, rewards and development

(Kandula, 1999)


Human resources management alignment means to integrate decisions about people with decisions about the results an organization is trying to obtain. Our research indicates that agencies that successfully align human resources management with agency mission accomplishment do so by integrating HRM into the agency planning process, emphasizing HR activities that support mission goals, and building strong HR/management relationships. (Danish, 2010)


Conner, 1991; Wernerfeldt, 1984, This approach is called the resource-based view, which states that competitive advantage of a firm lies mainly in the use of the package of valuable resources used by an organization. While focusing on Human Resource Pfeffer, 1994, in his research stated that traditional sources of competitive advantage, like product technology and process, economies of scale and access to sources of capital, have declined in value since they are easy to imitate. The employees are the key driving force of all resources in the organization and therefore, employees can become strategic assets through an efficient human management system Maital (1994). Hence, there is immense need to invest on human resource in organizations, which are heavily relying on the performance of personnel like educational institutions. The one of the main pillar of educational institutes is the human resource and human capital.

(Juenjo, 2003)


There are additional communication tools in place that help build trust among the HR community and business units. There are weekly HR vice president meetings that enable the HR community to ensure consistency of thought. These weekly meetings provide a platform for quick decision making because they bring together a large group of managers and directors in HR across several business units. There are also weekly HR conference calls with field HR personnel to ensure consistency of strategy among HR people in plants. This enables HR practitioners to stay in the loop even if they are not physically located with other HR peers. (Apqc, 2001)


In the decentralised organisations like IKEA, there was evidence of a much smaller corporate HR department and the vast majority of HR staff being country based. IKEA again has around ten members of the global HR department, but is supported by other international HR teams and networks. Some common processes are being introduced to replace a system in which every HR manager was doing their own thing. In IKEA, the aim is to focus on similarities between locations and to provide general support and guidelines from the centre. The case of IKEA shows very clearly how centralised policies can be used as a means of supporting the corporate culture.

IKEA has a very strongly centralised corporate culture and product range, despite its much decentralised approach to store management and HRM. The IKEA "HR Idea" provides a central philosophy underlying all HRM activities, rather than prescribing particular HRM activities which stores must undertake. In IKEA, it is the philosophy underlying the practices which is the same in all locations, providing a common platform, however actual practices vary considerable based on numerous factors, such as the age of a store, how active the HR manager is, how advanced HRM is, trade union influence, employment legislation, and local culture. (Elaine Farndale, 2005)


In order to achieve the above objectives, Human Resource Management undertakes the following activities:

Human resource or manpower planning

Recruitment, selection and placement of personnel

Training and development of employees

Appraisal of performance of employees

Taking corrective steps such as transfer from one job to another

Remuneration of employees

Social security and welfare of employees

Setting general and specific management policy for organizational relationship

Collective bargaining, contract negotiation and grievance handling

Staffing the organization

Aiding in the self-development of employees at all levels

Developing and maintaining motivation for workers by providing incentives

Reviewing and auditing manpower management in the organization

Potential Appraisal. Feedback Counselling

Role Analysis for job occupants

Job Rotation

Quality Circle, Organization development and Quality of Working Life

(Schuler, 1997)



Human resource management is more important in a changing environment than before. There are some challenges and changes, which have great impacts on organizations respective to human resource (HR) function behaviours. These impacts know as globalization, increasing customer's expectations, transparent market, and human resource management (HRM) provides possibilities to make organizations more healthy and competitive. Where the firm may focus on cost for employee compensation and make conclusions on share services or outsourcings. (Martin, 2005)


HRM has to act quickly in the economic crisis. As many organization fight for their survival and the credit crunch spreads all over the world, the HRM has to support the business in protecting the cash flow and to help to cut the overall operational costs of the organization. The HRM Function has to proactively analyze all the costs associated with the personnel in the organization. In the beginning of the economic crisis, the first steps are always about the costs of the organization. The economic crisis pushes the HRM Function to learn more about calculating, monitoring and managing the costs. (Becker, 2001)


Employment and Immigration offers a variety of resources for young workers to both find employment and stay safe on the job. Whether you are working for the summer, full time or part time there are resources available for you. First off, check out our list of job fairs. All workers, including young people working in summer jobs, are covered by Alberta's Employment Standards Code. The Code covers areas as minimum wage, hours of work, overtime and vacation pay. (Derien, 2009)


International human resources are a complex paradigm like a puzzle where all the pieces are intertwined and all placement of the piece in hand decisions impact the total picture.  However, in many organizations international human resources managers are forced to spend most of their time "fighting fires" kindled by the magnitude of issues arising from international growth and expansion, rather than being given the time to concentrate on the greater, and far more important strategic management issues, which could well avert future fires from breaking out at all. (Richard, 1997)


Hiring and Staffing

In an interview published on the website for General Atlantic partners, the CEO of Gilt discussed practices for recruiting new employees in order to transition from rapid-growth to long-term success. 

Low-cost recruitment by connecting to universities

Providing flexible work-time

Encourage creativity

Foster a challenging environment

Provide a learning platform.


In Georg von Krogh and Michael Cusuano's article "Three Strategies for Managing Fast Growth," they are of practices that can be applied to changing human resource practices to successfully make the most of the rapid growth opportunity.  They pull examples from Netscape when they were undergoing rapid growth, and one thing they did well was "leveraging the experts' knowledge to train the less seasoned". (Krogh, 2002).


Reward and Retention

Dave Ulrich talks about the value created from development of human resources in order to overcome challenges that the organization faces in pursuit of achieving their mission goals.

Other Related Staffing Practices

The first is empowering the employees, which calls for the practice of decentralizing authority through the need and access to more information

The second point is in regard to compensation and three specific practices are recommended:  meritocratic pay structures; incentive pay; and stock options. 

The third practice is to recruit the right people for the organization that have the necessary technology competencies to help the company continue to grow by delivering high quality work. 

Finally, the final practice is investing in your human capital which "helps employees operate new digital exceptions, meet strategic goals, adhere to cultural norms, set and reach incentive goals, and hire more of the right employees".

(Saunders, 2010)



When a job becomes vacant, failure to question whether it ought to be redesigned by making changes to, say, the level of responsibility, remuneration package, hours of work, working methods and reporting lines or even whether it should be filled at all will have cost implications, because the job has not been designed to suit current needs and the possibility of potential savings has been ignored. Advertising alone is expensive, but once you move beyond a wasted advertising opportunity to the salary costs of an unsuitable employee or the potential cost of a lost employment tribunal case, then you may be facing the loss of thousands of pounds. (Freedman, 2003)


Many organizations face the challenge of developing greater confidence, initiative, solutions-finding, and problem-solving capabilities among their people. Organisations need staff at all levels to be more self-sufficient, resourceful, creative and autonomous. This behaviour enables staff can operate at higher strategic level, which makes their organizations more productive and competitive. People's efforts produce bigger results. It's what all organizations strive to achieve. (Gordon, 1961)


Employee recognition is a communication tool that reinforces and rewards the most important outcomes people create for your organization. An effective employee recognition system is simple, immediate and powerful tool. When you consider employee recognition processes, you need to develop recognition that is equally powerful for both the organization and the employee. Reward and recognition that help both the employer and the employee get what they need from work are a win- win situation. (Tashraf, 2001)


Problem-solving styles are the different ways companies and individuals attempt to solve problems. The various problem-solving styles can help alleviate deviations from what is expected or planned, including anything from technical problems to employee-relations problems. Despite the various approaches, these styles address some or all of the stages of the problem-solving process. These stages can be divided into:

Problem identification

Identification of potential solutions

Evaluation of potential solutions

Anticipation of negative consequences

Overcoming obstacles to carrying out a solution

Detailed plan for carrying out a solution

(Cornell, 2001)


To conclude Human Resource Management should be linked with strategic goals and objectives in order to improve business performance and develop organizational cultures that foster innovation and flexibility. All the above futuristic visions coupled with strategic goals and objectives should be based on 3H's of Heart, Head and Hand i.e., we should feel by Heart, think by Head and implement by Hand. An HRM strategy pertains to the means as to how to implement the specific functions of Human Resource Management. An organization's HR function may possess recruitment and selection policies, disciplinary procedures, reward/recognition policies, an HR plan, or learning and development policies; however all of these functional areas of HRM need to be aligned and correlated, in order to correspond with the overall business strategy. An HRM strategy thus is an overall plan, concerning the implementation of specific HRM functional areas.

Whatever method a company uses to identify problems, it must make sure that it discovers actual causes and not "red herrings" or things that superficially resemble causes at first glance. Hence, the first step of problem solving involves ruling out possible causes to arrive at actual causes, which may entail sorting through a quagmire of possible causes and effects. At the heart of finding the best solution is weighing the pros and cons of possible solutions, by finding potential solutions to a problem, identifying the positive and negative aspects of each solution, and choosing the best solution based on these considerations. This method assumes that both the problem and the potential solutions are already well identified. While using a list of pros and cons is simple and requires little expertise, more complex problems require more sophisticated approaches. (Michael, 2006)