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Wherever people have needed to be employed there has been some form of people management, although it has only been in recent years that a consistent view has emerged on how to develop people.
At the end of the nineteenth century many workers were employed in the manufacturing sectors, where they had to put in long hours and conditions were often harsh. The welfare state did not exist and no work could mean destitution. However, even in such unenlightened times some employers did value their workers and took on a paternalist role for their employees. Such famous names as Cadbury, Rowntree and Bournville, all chocolate manufacturers, and Lever, a soap manufacturer, all took their employees` welfare very seriously and established the provision of health and education as part of their role as a responsible employer. These enlightened employers tended to be Quakers and were some of the first employers to employ welfare officers. The welfare officers were often women and were concerned not only with visiting sick employees but also with supervising moral welfare. We will take an overview of the state of debate.
THE STATE OF DEBATE
The question of whether human resource management has the capacity to transform or replace deeply rooted models of personnel management and industrial relations, or could become fully worked-through theory of management, is one that cannot be answered in a simple manner. Human resource management has many cogent critics and many sceptical supporters. Initial criticism which claimed that it was `old wine new bottles` ,the restatement perspective outlined earlier in this chapter, still has strong adherents (Keenoy and Anthony, 1993). Others see it as a version of `the emperor`s new clothes` (Legge, 1989) or a `wolf sheep`s clothing` (Armstrong, 1987)
The 1990s have seen a growing sophistication in the nature of the debate involving HRM. One very strong characteristic is the desire on the part of a number of commentators to explore the consequences of implementing HRM techniques for organizations. Thus the nature of the argument now strongly incorporates the concept of HRM outcomes rather than relying largely on descriptions of styles or types of HRM philosophies. Part of this development has been promoted by the realisation that traditional sources of competitive advantage, such as technological supremacy, patents, capital and so forth, are very much less important than they were in a world in which many countries can display equal advantage in at least some of these critical aspects (Pfeffer, 1994). Thus the extent to which an organization can mobilise is internal human resources may hold the key to achievable advantage in the future (Prahalad and Hamel, 1990). The general managerial epithet that `people are our greatest asset` is a tried clichÃ©; what distinguishes the most recent work is its focus on the recourse based model of HRM and the particular mix ofskills and attributes that can be developed and applied to economic performance. Thus Huselid (1995) has argued that high performance work practices have an economically and statically significant impact on such employee outcomes as turnover and productivity and both short- and long-term measures of corporate financial performance.
In my opinion is, the importance of HRM as rhetoric that speaks to the concerns of a wide range of stakeholder groups-personnel and line managers, government and academics-should not be underestimated. We will take an overview of the chances in external environmental factors and HR practices and strategies.
These are required if organizations are to be effective in developing an innovative and fast moving organisation that keep up with the fast pace of development in a modern society. Organizations need to be adaptable and flexible, which means that policies and objectives need to be place to manage change. Many of the IT industryâ€™s need to be adaptable and fast changing to keep up with changes in modern technology. For example, Apple Computers` market share was in decline due to monopoly of the Microsoft windows operating system, but it has reinvented itself with the iPod, and is now leading the way in music technology. Without change management objectives Apple would have found it much harder to respond to rapid changes. For this reason the recruitment, selection and development strategies all need to feed into the change management objectives.
Policy formulation and management of change
This means using HR policy to identify and manage change in a business environment. This extends from Harward model, which has not identified change effectively to ensure competitiveness. Apple Computers managed to develop the iPod and gain competitive advantage by having policies for managing innovation and change.
Nevertheless, these assumptions inform the practices and policies of management, and hence define the organizational and conceptual space that HRM fills and generate the multiple meanings of which HRM is constructed. We shall examine some of them in greater detail shortly.
Competing interpretations of organisations and management
When we stand back from the concrete world of managing to that of theories about organizations and management, we find that not only have very different interpretations been made overtime, but there exist simultaneously several strongly competing interpretations. Again, we can only skim over this material, but u can pursue the issues by reading, for example, Child (1969), who traces the development of management trough in Britain or Morgan (1986), who examines in a very accessible way eight different metaphors or ways that theorists as well as others have construed organisations.
Brunsson (1989) throws a different light on the nature and goals of organising, based on his research in Scandinavian municipal administrations. He suggest that the outputs of these kinds of organizations are `talk, decision and physical products`. He proposes two ideal types of organization that depends on action for its legitimacy. Talk and decisions in the action organization lead to actions, whereas the outputs of the political organization are talk and decisions that may not lead to action.
Having now examined some of the choices managers make to deal with the tensions within organizations and some of the competing interpretations offered by theorist of those tensions and choices, we need to stepback even further to become aware of the ways of thinking and of seeing that inform their assumptions. First, however, we shall examine the next layer of the context of HRM.
THE CONTEXT OF HUMAN RECOURCE MANAGEMENT
Human resource management cannot take place in isolation from the internal organization or the external environment where the political, economic, societal, technological and international context can have an impact on how the organization operates and how HRM is managed within that context. The context (the external and internal environment within which HR operates) within which HR takes place will impact on organizational polices and have implications for the functions of HR. this has been highlighted earlier in the example of the Beardmore conference Hotel, whose flexible benefits reflected the local society and culture as well as the economic environment, where managers recognised the need to attract and retain staff at that time.
Context has many layers, which build up to impact on how the organization does business.
THE ORGANIZATIONAL CONTEXT
To operate successfully the organization needs to ask itself the following questions. What business are we in? How can we carry out our business to be as effective as possible and to meet out stakeholders`(identifiable clusters of people who have an economic and/or social interest in the performance of an organization) needs? The organizational context is also influenced by external context; it interacts with its environment and this in turn impacts on HR. for this reason, HR practices need to be designed to reflect the organizational context. However, in a fast-changing working environment this is often difficult to achieve: new technologies are developed, governments and attitudes change policy will, in turn, inform practice but needs to be flexible enough to respond to the influences of the external environment. For example, changes in practise, which in theory has meant a reduction in working hours for some workers.
The approaches adopted by managers to resolve the tensions in organizations;
The existence of several stakeholders in the employment relationship;
Their differing perspectives upon events, experiences and relationships;
Their differing aims, interest and needs;
The interplay between formal organization and individual potential.
These tensions have to be resolved through the process of management, or rather, continuously resolved, for these tensions are inherent in organizations.
THE EXTERNAL CONTEXT
The external environment influences the external context of the organization. An organization would not be effective if it ignored the external context of politics, economics, society and technology. In London and the south-east of England, there is a shortage of key workers, such as nurses and teachers, and many workers have been employed from abroad to fill the vacancies. For organizations, this means a review of policies to ensure that new workers` needs are considered. On a practical side, new aspect of training may have to be delivered to meet language needs. To do this an organization needs to operate as an open system (system influenced by the external environment and inputs, making it complex and difficult to control), which can change to meet the needs of its external environment.
The political context
The political context not only refers to the type of government in power at the time, but also, whether the country is democratic or not. In UK the political context changes depending on which political party is in power. In the past, the conservative government has tended to favour the employer over the employee; an example of this was the removal of the minimum wage. Traditional labour governments have focused on the employee and have had close links with the unions. With new labour the lines have become somewhat blurred: although they have reintroduced the minimum wage, they have also formed close links with industry by encouraging public/private partnerships. With every change of government the HR practitioner needs to identify the impact on the organisation and the HR department.
The economic context
The economic context refers to health of the nation. If business is booming and unemployment is low, it may be harder to find and retain staff. In times of economic decline, unemployment increases and greater choice of labour is available to the employer. However economic decline may also mean that your organisation has to downsize and HR department will than face the dilemma of dealing with redundancies. An organization may also need to answer to shareholders, who expect to see a healthy return on their investment. For the HR professional this could mean developing operations overseas where labour is cheaper, such as prudential moving its call centres to India. It may also mean outsourcing some or all of the functions of HR, as the organization pursues its competitive advantage. An example of outsourcing is discussed in the technology transformation box.
The social context
the social context refers to the culture, politics ,leadership and management style that influence the organization. An HR manager must be able to identify the culture within which the organization operates. This means he or she needs to recognise and understand the values the organization is trying to promote. However, they also need to understand the culture and society from which their employees are recruited.
An HR manager should not underestimate the importance of the social context of business as, in many instances. Businesses have foundered due to a lack of understanding of the culture. Examples are Euro Disney Paris, whose lack of understanding of European culture and its failure to embrace all things American had a serious impact on business. Or, Wal-Mart in Argentina, which failed to understand how the argentines liked to shop, and could not understand why business was not booming in its bright and shiny new supermarkets.
HR goes in to decline-outsourcing and downsizing has removed the HR specialist from organisations and placed the HR role with the overworked line manager. The HR function will be closely integrated in to the vision and strategy of the organization and it will continue as it has done in the past, due to the limitations of labour markets, unions, legislation, etc. this implies that it stands still and does not develop.
Whatever the view of HR and how it develops in the future, it is important to understand where it has come from and what has influenced it.