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This assignment studies the concept of the Human Resource Management and the functions of Strategic Human Resource in the context of Organization. In the framework of this study it will examine the impact of these strategies on individual and organization. The main focus of this study is to understand the area of Strategic Human resources Management in accordance with Organizational Strategies and their impact on individual and organizational goals.
a) Define Human Resource Management and evaluate the impact or HRM on the Human Resource function. Describe the models and phases in the HRM debate.
Human Resource Management
Human Resource Management means employing people, developing their resources, utilizing, maintain, and compensating their services in time with the job and organisational requirement.
HRM On The Human Resource Function
The role of Human Resource Management in performing the HR functions include a variety of activities and key among them is deciding what staffing needs you have and whether to use independent contractor 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 confirm to various regulations. Activities also include managing your approach to employee benefits and compensation, employee record and personal policies. However, they should always ensure that employees are aware of personnel policies which confirm to current regulations.
Models In The HRM
Theory X: Is the classical managerial distrust approach. People are laze by nature and only pursuing self-interests. That means that there are two different and opposite sets of interests: those of the company and those of its workers. It's management's task to induce the appropriate behaviour in workers so as that they actions pursue the accomplishment of the company's goals, not their own. Thus there's a case for the existence of “correctives” and “coercion”.
Scientific management theories regarded people as resources in the same way that machinery was also a resource. People had to be assigned fixed, repetitive.
By the way that matches with many of our current economic theories when we say that people as economic agents are always looking to maximise their perceived utility. That's what we mostly assume that consumers will do. But then there are still economic realities that cannot be explained from the point of view. Regarding HRM many authors classify this approach as a classic approach, hard HRM or the Michigan model.
Theory Y: is the opposite approach. Instead, thinking of people as lazy machines deals with their emotions, feelings and motivations. People may actually want personal realisation and work can be one of the ways to attain it. People like things well done, making a difference. Managers, thus, must enable them to do so and keep their motivation high. People don't hate working, are not lazy and can be self-responsible. Those way coercions are no longer needed.
Following this theory, compensation is still important, but not exclusively attained through money but also much implicit compensation are of utmost importance. Under the right circumstances, people will seek higher responsibilities, not reject them. The individuals can be creative and proactive, values that the organisation must nurture to ensure their commitment. This approach is called the Harvard model, or soft HRM.
Phases In The HRM
Stage1: The social Reformer: - The origins of personnel management lie in the nineteenth century, deriving from the work of social reformers such as Lord Shaftesbury and Robert Owen. Their criticisms of the free enterprise system and the hardship created by the exploitation of workers by factory owners enabled the first personnel managers to be appointed and provided the first frame of reference in which they worked. Such concerns are not obsolete. There are still regular reports of employees being exploited by employers flouting the law, and the problem of organisational distance between decision makers and those putting decisions into practice remains a source of alienation from work.
State2: The acolyte of benevolence:- In twentieth century some of the large employers with a paternalistic outlook began to appoint welfare officers to manage a series of new initiatives designed to make life less harsh for their employees. Prominent examples were the progressive schemes of unemployment benefit, sick pay and subsidised housing etc. The result is higher productivity, a longer-serving workforce and a bigger pool of application for each job.
State3: The humane bureaucrat:- The third phase marked the beginnings of a move away from a sole focus on welfare issues towards the meeting of various other organisational objectives. Personnel managers began to gain responsibilities in the areas of staffing, training and organisation design. Influenced by social scientists such as F.W. Taylor and Henri Fayol personnel specialists started to look at management and administrative process analytically, working out how organisational structures could be designed and labour deployed so as to maximise efficiency.
Stage4: The consensus negotiator:- In this period of full employment became a scarce resource. This led to a growth in trade union membership. Personnel specialists managed the new collective institutions such as joint consultation committees, joint production committees and suggestion schemes set up in order accommodate the new realities.
Stage5: Organisation man:- This phase was characterised by the development of career paths and of opportunities within organisations for personal growth. This too remains a concern of personnel specialists today, with a significant portion of time and resources in many organisations being devoted to the recruitment, development and retention of an elite core of people with specialist expertise on whom the business depends for its future.
Stage6: The manpower analyst:- The final stage involved personnel specialists developing the capacity to undertake the techniques of manpower or workforce planning. This is basically a quantitative activity, which involves forecasting the likely need for employees with different skills in the future. It comprises three main processes:
- Assessing what manpower of different grades, categories and skills will be needed.
- Deciding what manpower an organisation is likely to have in the future based on current trends.
- Taking action to ensure that supply meets demand.
b) Evaluate the role of Strategic Human Resource Management in relation to the organisations broader objectives, Provide a critique of SHRM and its ability to judge performance levels.
We will first place human resource management into a framework which views the total management of the firm. Three core elements are necessary for organizations to function:
- A mission and strategy, the organization has to have a reason for being, and a means for using money, material, information and people to carry out the mission;
- A structure, people have to organize to carry out the mission; and
- A human resource process, a way of recruiting and selecting people to the organization: getting them into jobs seeing that they perform and are rewarded sufficiently to both remain in the organization and be productive. As simple and basic as these three elements sound, they each embody extremely complex problems and challenges.
In the past human resource management was largely missing from the strategic management process.
Strategy And Structure
The historical focus on strategy and structure as the key to strategic management has its roots in a machine view of organizations. The underlying assumptions of this approach were built on a belief that organizations were rational entities to be moulded and shaped for the use of the owners and/or managers. Strategic planning grew up in this era as did modern day organization design theory. The basic premise is that alternative organizations are needed to meet environmental challenges and organizational tasks.
Strategy: Strategy is defined as a process through which the basic mission of the organization, its objectives are set and how the firm will use its resources to achieve its objectives. A strategy statement for a firm would have the following characteristics according to Hofer and Schendel:
(1) It should describe each of the components - scope, resource deployment, distinctive competencies, competitive advantages, and goods or services which will be produced and the intended synergy.
(2) It should indicate how the strategy will lead to the accomplishment of the organization's objectives.
(3) It should be described in functional terms, rather than physical terms (a railroad company should consider itself in the transportation business, not the railroad business.)
Robert Anthony distinguishes strategic level activities from managerial and operational levels. The strategic level deals with policy formulation and overall goal setting with the major concern being the positioning of the organization in its environment.
The managerial level is concerned with the availability and allocation of resources to carry out the strategic plan.
At the operational level, the day to day management of the organization is carried out. Operational activities are ideally carried out under the umbrella of the managerial plans.
Structure: Chandler defines structure as “the organization of work into roles such as production, finance, marketing and so on; the recombining of the roles into departments or divisions around functions, products, regions, or markets and the distribution of power across this role structure.”
Structure Follows Strategy: Chandler provided a convincing argument that the structure of an organization follows from the strategy. He identified four major strategies which resulted in structural or organization design changes. These were: (1) expansion of volume,(2) geographic dispersion, (3) vertical integration and (4) product diversification.
Chandler traced the history of such American firms as General Motors, DuPont, and Sears, Roebuck as their strategies changed and observed the structural changes which followed. As a new strategy was formulated to respond to changes in the environment, new administrative demands provoked a change in the old structure.
Galbraith and Nathanson expand upon chandler's analysis by focusing on some of the human resource issues, such as performance measures, rewards, careers and leadership styles as they relate to a business' strategy structure.
HR can ensure adherence to the business strategy through the following actions:
- Determine the appropriate organizational structure, Job designs for the company.
- Emphasize key attributes of successful candidates during recruitment and selection.
- Identify key competencies in all performance management programmes.
- Ensure that all training and development programmes build company bench strength.
- Design compensation and rewards systems that reward desired behaviours.
- Create employment branding initiatives that communicate desired customer experiences.
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, rewards and develop top talent.
Strategic HRM can be regards as a general approach to the strategic management of human resources in accordance with the intentions of the organization on the future direction it wants to take. It is concerned with longer-term people issues and macro-concerns about structures, quality, culture, values, commitment and matching resources to future need. It has been defined as:
Strategic HRM is the overall framework which determines the shape and delivery of the individual strategies.”
Performance is the bottom line for both the human resource system and the organization as a whole. One of the major purposes of the human resource system is to insure individual productivity which at the aggregate level results in organizational productivity.
Performance is a function of all the human resource components: selecting people who are best able to perform a job, motivating them by proper rewards, training and developing them to better perform and appraising them so as to be able to reward and develop them. In addition, performance is a function of the organizational context and resources surrounding the individual. Strategy and structure are the strongest contextual determinants of performance within the structure, the specific job being done, the specific form the division of labour takes in the organization strongly influences the level of performance attained by any individual. Other factors include capital tools, physical space, social environment, quality of supervision and leadership.
Evaluate traditional and contemporary approaches to Human Resources Planning. What are the advantages and disadvantages of HRP in practice?
A Model Of Traditional Manpower Planning
Traditionally human resource planning, generally termed manpower planning was concerned with the numbers of employees and skill level and types in the organisation. In this model the emphasis is on balancing the projected demand for and supply of labour, in order to have the right number of the right employees in the right place at the right time. The demand for manpower is influenced by corporate strategies and objectives, the environment and the way that staff are utilised within the business. The supply of manpower is projected from current employees (via calculations) and from the availability of the required skills in the labour market.
It has also been criticised for giving insufficient attention to skills.
Integrated Human Resource Planning Model
HR planning as a different approach, it is clear that HR planning encompasses a much broader perspective than previously.
Increasingly there is a need for organisations to integrate the process of planning for numbers and skills or employees; employee behaviour and organizational culture.
This model attempts to bring all aspects of planning together, incorporating the more traditional model of ‘manpower planning', but going beyond this to include behaviour, culture, systems and so on. This model identifies ‘where we want to be', translated from response to the strategic vision; ‘where we are now'; and ‘what we need to do to make the transition' - all operating within the organisation's environment.
There are particularly important differences in terms of process and purpose. In human resource planning the manager is concerned with motivating people - a process in which costs, numbers, control and systems interact to play a part. In manpower planning the manager is concerned with the numerical elements of forecasting, supply-demand matching and control, in which people are a part.
Advanatages And Disadvantages Of Hrp In Practice
- · It optimises the use of resources and identifies the ways of making them more flexible.
- · Output can be improved through understanding the interrelation between productivity, work organisation and technical development.
- · Determines the number of people to be employed.
- · Retaining your highly skilled staff.
- · Managing an effective downsizing programme.
- · Gives the idea about where will the next generation of managers comes from.
- It's over - quantitative and neglects the qualitative aspects of contribution.
- Forecasting the future requirement on the basis of current data and with the current conditions of influential factors of environmental trends such as social, demographic, political, legislative, industrial and technological.
B) Discuss the need for learning in organisations today and evaluate the role of both the organisation and the individual in the development process today?
Learning organisations encourage testing and experimentation, because they want to find new answers, and they recognise that failed answers are as important as successful ones. Therefore actions that are carried out have two purposes - to resolve the immediate problem and to learn from the process.
Pedler, Burgoyne and Boydell are the main proponents in the UK of the ‘learning company'. It can be defines as ‘an organisation that facilitates the learning of all its members and continuously transforms itself'.
The aim is to design an organisation that is capable of adapting, changing, developing and transforming itself in response to the needs, wishes and aspirations of people, inside and outside. These organisations will be able to achieve their objectives without predatory takeovers, mergers or divestments. They will be able to avoid the large-scale restructurings that are now commonplace in industry. The authors believe that the currents state of an organisations is due to three force:
- The idea behind it
- The phases of its development
- The era it is in.
When an organisation is going through a development phase that integrates its activities, employees and ideas, this is when the organisation starts to take a ‘learning approach' to change.
Self-development and action-learning are also foundations of the learning organisation: as the organisation learns from the actions that it carries out, so does the individual.
Role Of Orgnization And The Individual Development Process
OD is a planned, organization-wide effort to increase an organization's effective and viability. Warren Bennis, has referred to OD as a complex strategy intended to change the beliefs, attitude values, and structure of organizations so that is can better adapt to new technologies, markets, and challenges.
Human resource development is a process of building and enhancing the skills, knowledge and attitudes of employees. The human resource needs would be identified in the human resource plan, which would be formulated from the overall objectives of the enterprise. Apart from the benefits to the individual worker (example: greater versatility and extra skills) -the organization benefits from employees becoming more flexible and the productivity and quality of work improving. Job satisfaction might also increase-with consequent reduction in absenteeism and staff turnover rates-and the organization need not fear the consequences of new technology.
There are a handful of companies which have strategically managed the development of senior executive talent. Among these are such companies as General Motors, Exxon, General Electric, IMB and Procter and Gamble. The emphasis has been on carefully developing mangers by following such principles as:
(a) Sustained interest and support for management development and succession planning on the part of top management.
(b) Efforts are made to identify young high potential professionals deemed to have potential for top level management positions.
(c) Comprehensive and systematic rewards are kept on managerial performance which include date from multiple sources and is used in making decisions about management development.
(d) Specific recruiting efforts exist to provide appropriate raw material for general managers of the future.
(e) Capable young professionals are given the opportunity to develop managerial skills early in their careers.
(f) Compensation policies and salary administration help stimulate development and retention of key personnel.
(g) Managers at all levels have clear development objectives and plans for their careers.
(h) High potential personnel are likely to get effective coaching from their superiors.
(i) The performance appraisal process stresses results.
Based on an assessment of an individual's performance and assessed potential both the individual and the organization can plan for future training and development. As with the reward and planning process, a weak data base leads to hit or miss training and development processes.
A strategic concern for companies is to develop appraisal processes which are supportive of the business strategy. One study which indicates that the diversified companies placed more emphasis on objective and result measures such as productivity, profit, volume, etc. The integrated firms tended to rely on more operating and intermediate measures as well as more subjective evaluations of how well people performed along such dimensions as “planning,” “controlling,” “organizing,” and “leadership.” The diversified appraisal system worked because the divisions were more self-contained with little interdivisional or corporate contact. The integrated companies on the other hand had greater interdivisional contact and greater sharing of resources, making it hard to decide who exactly was responsible for how much of end results.
The key to an effective appraisal process at the strategic level is the commitment of quality managerial time to systematic examination and evaluation of executive talent. Increased efforts along with these lines will be required in these and other companies to support the strategic reward and development processes.
Summary And Conclusions
The human resource cycle is a major factor in driving organizational performance; generally companies continuously underscore two major factors: 1) lack of long term perspective and 2) lack of skill in managing people. Both of these factors can only be changed with a concomitant change in the human resource cycle. That is, they require changes in the way people think and behave.
There are three concluding points to be made about the human resources. They are:
(1) The Strategic human resource has a major impact on individual performance and hence on productivity and organizational performance.
(2) The human resource cycle is made up of highly interdependent processes. The system is therefore only as strong as its weakest link.
(3) The human resource cycle has a major role to play in the strategic management of complex organizations.
The approach of SHRM is based on a human resource audit which provides data to the organization regarding the internal capacity of the human resource function as well as data from the line as to what services it needs at the operational, managerial, and strategic levels. Each organization needs to develop its own strategy and structure for a strategic human resource management system.
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(2) Charles Hofer and Dan Schendel Strategy Formulation: Analytical Concepts, St. Paul Minn: West Publishing Co., 1978.
(3) Charles Hofer and Dan Schendel 1978.
(4) Alfred Chandler Strategy and structure: Chapters in the History of American Industrial Enterprise, Cambridge, Mass: 1962.
(5) Jay Galbraith and Daniel Nathanson Strategy Implementation: The Role of Structure and process, St. Paul, Minn: 1978.
(6) Jay Galbraith and Daniel Nathansan 1978.
(7) Jay Lorsch and Stephen Allen Managing Diversity and Interdependence. Boston: Division of Research, Harvard Business School, 1973.
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