Development of Human Resource Management Models - Term Paper Example

Development of HRM models There are several models or theories of HRM, the two most influential being the Harvard, and the Michigan models. They havebeen described in terms of hard and soft approaches. Hard HRM models focus on employee costs and numbers; soft models take a greater interest in psychological elements such as commitment, skills, and empowerment. The Harvard model provides a strategic map intended to guide all managers in their relations with employees (Beer et al., 1984). It emphasizes the human or soft side of human resource management, featuring issues such as motivating people by involving them in decision making, developing an organizational culture based on trust and teamwork. The Harvard approach is rooted in the human resource relation’s tradition, and supports the view that people can influence the outcomes of strategy. It employs the multiple stakeholder models. Employees are seen as having interests along with other stakeholders such as shareholders, management, unions, and government. HRM has four policy areas, which must be addressed. They are human resource flows, reward systems, employee influence, and work systems. Human resource flows involve managing the flow of people into organization (recruitment, selection), through the organization (placement, appraisal, promotion), out of the organization (termination). HR policy must ensure the right mix and number of staff through resourcing and developing employee competences. Reward systems cover pay and benefits designed to attract, motivate, and keep employees. Employee influence is concerned with controlling levels of authority, power, and decision- making. Work systems involve defining and designing jobs, so that the arrangement of people, information, and technology provide the best outcomes. These policies are designed to achieve the crucial goals of: commitment, congruence, competence, and cost effectiveness. The Harvard approach also emphasizes a belief in an organization’s people as assets rather than costs. People can be allocated in order to obtain maximum efficiency. Their efforts can be directed towards particular objectives and their competences developed to achieve the highest quality work. Time spent on training and development is an investment in a firm’s human capital. Human capital is the body of knowledge, skills, and experience possessed by an organization’s people. According to this viewpoint, investment in people provides long-term benefits for an organization. Every business consists of physical, financial and human resources but human resources are particularly important because a firm’s competitiveness depends upon its employees’ ability to make best use of the physical and monetary resources. Consequently, the success of a business depends ultimately on the people working for it. Calculative HRM In 1984 Fombrun, Tichy and Devanna launched a model, the Michigan model of HRM, which emphasized that organizational effectiveness is dependent on achieving a tight fit between human resource strategy and the overall business strategy of the firm. Only when this has been achieved can HRM systems be developed. Their core recommendation is that the business strategy should be employed to define and determine the types of employee performance required. Once performance has been specified, systems that ensure its realization must be slotted into place. The first of these is a system for personal selection; that is a system that ensures the deployment of individuals, with the appropriate aptitudes, knowledge, and experience. Second, there should be an appraisal system that enables the firm on a regular basis to assess whether performance is satisfactory. Third, there should be a system of rewards that differentiates between different levels of performance. Fourth, they recommended that a development system should be available on those instances where the appraisal system indicates performance shortcomings. On the surface the Michigan model bears a strong resemblance to scientific management. Soft HRM This approach emphasizes the human resource aspect of the term “human resource management”. It is characterized by a resource perspective of employees incorporating the view that there is an organizational pay-off in performance terms from a combination of HRM policies, which emphasizes consensualism, and mutuality of management of employee interests. Neo-pluralism This type of HRM involves moves towards greater consensualism and commitment in unionized companies. It is characterized by what might be termed a “dualist” approach; involving the use of HRM, techniques such as direct communications with employees and performance related pay systems alongside established collective bargaining procedures. Hard HRM This variant is characterized by the integration of human resource considerations into strategic decision-making to ensure maximum contribution to business performance. The emphasis here is on the management aspect of the term “human resource management”. In this approach, the organization’s human resources are seen as similar to any other resource. Thus, human resource should be procured and managed in as cheap and effective a fashion as possible to ensure achievement of the organization’s “bottom line” objectives. Similarly, whereas personal management had established itself as the buffer between the management and trade unions operating under pluralist ideology, HRM, through the notion of commitment, favored this unitary model of representation. Such an ideology tries to confer legitimacy on forms of managerial control, whereas pluralist ideology favors a more discursive approach traditionally derived from worker representation by trade unions. The belief that modern HRM derives from a unitary perspective legitimizes the workforce as a resource or instrument to be used for organizational purposes. Payne and Wayland (1999) suggests such a view of employees as ‘resource’ can lead to first and second class employees, which can be divisive. In pluralist model (Roche 1990) policies tended to focus on short term issues with little conscious attempt to develop linkages with business policy. Manifestations of this pluralist tradition include high levels of union density, well-developed collective bargaining institutions at establishment level, and industrial relations as the key role of the HRM function. Business strategy and HRM strategy One of the most widely discussed distinctions between HRM and old-fashioned personal management is the closer linking of the former to the business strategy. By linking is meant the degree to which the HRM issues are considered as part of the formulation of business strategies. In particular, there is an ingrained assumption that HRM is the dependent variable and business strategy, the independent variable in this relationship. Human resource strategy is concerned with the integration, as Baird and Meshoulam (1988) put it, of both an Internal ‘fit’ of strategy to policies and an external ‘fit’ between the organization and its environment. HRM strategies reinterpret Business strategy into human resource policies, whilst also seeking to maintain a coherent management philosophy. Business strategy has been studied as a method for obtaining a competitive advantage. To Miles and snow (1978) business strategy was best defined as a broad organizational approach, with ‘defender’, ‘prospector’’ ‘analyzer’, and ‘ reactor’ organizations each taking a particular strategic stands according to their position in the market place. Early formulations of strategy tend to reify organizations, presuming that ‘the organization’ could act with one voice with al the key players accepting without argument and agreed definition of what should happen. A study by Guest and Peccei (1994), using an extensive sample of trusts and districts in the National Health Service, explored how far a range of personal policies had been written down and actively endorsed or ‘signed off’ by the board. The objective of the NHS plan was to modernize the NHS in England through a combination of investment and reform. It committed the government to increase in key staff groups over the period to 2004 alongside a range of Human Resource (HR) initiatives designed to complement the increase in numbers and improve working lives. The recent human resources policy documents ‘The New NHS – working together’ (DoH 1998) and ‘Learning together (SEHD 1999) both describe the NHS work force as a valuable resource and discuss ways in which individuals can participate in life long learning and professional development. The rights and responsibilities of both individual practitioners and employers are explored in relation to this theme. The influence of the NHS plan on the staff has been expressed through the HR in the NHS plan. This has created the foundation for the evolution of a range of HRM strategies, to facilitate the transformation of NHS into model employer there by making sure that the NHS provides an ideal career through offering enhancement of skills, increasing the morale of the workforce and developing human resource management skills. HRM strategies are vastly context specific and reliant upon other organizational features but the existing common grounds are because of national policy The HRM role is significant in a number of areas. (a) Recruitment and retention: A mixture of fresh staff and large volume of staff about to retire has made the need to develop workforce planning and recruitment and retention strategies. (b) Pay and rewards: A standardized pay is ideal since staff are recognized by the proficiency in patient care than to differentiate individuals by pay. (c) Communication: Information about employees and patient contentment and other spheres of activities does not always get the appropriate attention from the management. (d) Team working: Management relationships with different level of workforce are essential to successful team performance Most NHS trusts employ a department of human resource (HR) staff, who perform three distinct functions as a HRM strategy: 1.The largest part of an HR service is working with managers to ensure that recruitment; supervision, training, and employment termination are conducted by line managers to the organization’s greatest advantage. 2. Many HR departments also act as organization development (OD) facilitators. In this, they are supporting the management of change and seeking to achieve an efficient, well-motivated workforce and a healthy organization. 3. Part of an HR service is attention to the welfare of the employees. This is important to an employer as a route to gaining maximum performance and minimizing casual absenteeism. Additionally, a reputation for care and attention to employee welfare will make a significant, and cost-effective, contribution to recruitment and retention of staff. In addition, within HR policy documents are details of local learning plans, which each NHS trust will have to formulate annually. These learning plans will articulate the learning needs of all members of the organization in relation to ongoing and new developments in health care and will form the basis of discussion and negotiation with universities, colleges of further education and other education providers. In June 2004 the Department of Health launched the NHS improvement plan, building on the success of the NHS plan, and setting out the strategic direction for the NHS in relation to improved assess, tacking long-term illness and public health. One of the overall aims supporting standards for better health is “furthering the NHS’s reputation as a model employer”. The Improving Working Lives standard (IWL) is a fundamental part of this process. The NHS plan introduced the IWL Standard for NHS employers making it clear that every member of staff in the NHS is entitled to work in an organization which can demonstrate its commitment to more flexible working conditions which give staff more control over there on time. The IWL initiative aims to make the NHS a better place to work. It is recognized that improving the working lives of staff contributes directly to better patient care. Being flexible about the way people work means staffs are more likely to stay with their employer. This in turn helps to reduce the costs associated with recruitment process, as well as retaining skills and experience. Improving Working Lives also aims to support organizational cultural change to embed good Human Resources practices at the heart of service delivery and is an integral part of the “HR in the NHS plan” launched in 2002 which set a comprehensive strategy for growing and developing the NHS workforce to meet the challenges in the NHS Plan. The National Health Service (NHS) is 24 hours a day, seven days a week service provider, with all the additional pressures this can place on its workforce and human resources system. Modernizing the NHS depends upon operating more flexibly and being creative in its working arrangement to maintain an appropriate work-life balance for its staff. The NHS Plan set out a vision of the transformation of the NHS with reliable and reachable services based on the needs of the patients. Attaining this goal depends significantly on the hard work of the 1.2 million people who are employed by the NHS. To guarantee that these workforce can bring high quality services necessitate the NHS to become an ideal employer. The NHS Plan “identifies that a contemporary NHS must offer its workforce a better deal in their operational lives. Elevating the standard of the working lives of staff, add directly to enhanced patient care through better recruitment and retention. The HR in the NHS Plan states that, “the delivery of high quality, effective healthcare requires all executives, including professionals in management positions, to appreciate HRM issues and the strategic role they play in enabling organizational excellence. HR is everybody’s business”. Management of employees is not a secondary task in the NHS. It is vital to the accomplishment of a modern health care system. Every patient who is treated in the NHS wants to know that they can rely on receiving high quality care when they need it. Every part of the NHS, and everyone who works in it, should take responsibility for working to improve quality. This must be quality in its broadest terms: doing the right things, at the right time, for the right people, and doing them right at the first time. Clearing away the distractions of the market will help staff to get attention back where it counts. Types of HR contract 1. Where direct employment remains the favored option, e.g. with clinicians and service managers, a number of options are available. 2. Many staff has contracts (permanent) that confer the possibility of employment for life, subject to acceptable performance. 3. Alternatively, as with general management scheme, staff may be awarded rolling three-year contracts, with the option of renewal at the end of each year. Where performance is satisfactory, contracts can be expected to be renewed indefinitely, and not to do so would constitute dismissal. Where performance is unsatisfactory, individuals are required to leave at very short notice. HRM function and the recruitment process Irrespective of whether recruitment is occurring internally or externally, a good match between people and jobs equals good staff, good results, and good harmony. Sir Winston Churchill, while addressing, President Roosevelt in a radio broadcast on 09 Feb 1941, said, ‘Give me the tools, and I will finish the job’. The tools in the case of the manager are the people through whom the job is done. The recruitment and selection process is fundamental to an organization and extremely costly where ineffective. Shortages of nursing staff with the correct skill and the increase in numbers of NHS nursing staff leaving the service combine to make recruitment and selection all the more crucial. The Royal College of Nursing Guide to Good Practice (1988) highlighted many of the factors that can increase the three Rs: recruitment, retention, and return. Factors such as good working environment, improved facilities and good hygiene factors are commonly understood and, it has been argued, are necessary conditions for staff retentions. The Flexible Career Scheme (FCS) for hospital doctors and gaps enables flexible working, and offers flexible retirement options. It is a key part of the recruitment and retention strategy. Fairness is an essential element in the recruitment process, particularly if internal recruitment is being considered. Overseas recruitment of key professionals is also assuming increased importance in Britain and elsewhere. UK problems also include major nursing shortages, the lack of coordination of strategies between different authorities- for example, in relation to GP recruitment and problems in recruiting senior managers. The provisions of NHS plan 2000 have important HR provisions. As well as promising an increase of UK funding to the EU average and establishing specific waiting times for key services, the plan provides for an increase in the numbers of doctors and nurses and for changes to the contracts of key professionals such as hospital consultants. In relation to HR capacity-building in the health services, recurring themes in the literature – for example, McGauran (2001), Gray and Philips (1995) – include: family-friendly policies and flexibility of conditions local autonomy; incentives for self development; recognition of good performance; training for new recruits; career counseling; targeted retention policies and training. Some of these themes have been suggested based on a comparison between health service employers and successful employers in other areas. References Baird,C, And Meshoulam, I, (1988), ‘Managing two fits of strategic human resource management’, Academy of management Review,Vol 13, No.1, pp 116-18. Guest, D, And Peccei, R, (1994). ‘The nature and causes of effective HRM ‘, British journal of Industrial Relations, 32:2, pp 219-42. Guest, D, E, ‘Human resource management and industrial relations’, Journal of Management Studies, 24 (5),1987, 503-21. Hendry, C, And Pettigrew, A, (1992), ‘Patterns of strategic change in the development of human resource management’, British Journal of Management, Vol.3, No.3, September, pp 137-56. Legge, K, (1995) ‘HRM: rhetoric, reality and hidden agendas’, in J. Storey, Human Resource Management: A critical text, London Routledge. Miles, R, E, And Snow, C, C, (1978), Organizational strategy, Structure and Process, New York, McGraw-Hill. Miles, R, E, And Snow, C, C, (1994), Fit, Failure and the Hall of Fame, New York, Free Press. `Storey, J, (1992), Developments in the management of Human Resources, Oxford, Blackwell. Storey, J,(1995) Human Resource management: A critical text, London, Routledge. Tyson,S, (1995), Human Resource Strategy: Towards a general theory of human resource management, London, Pitman. Tyson, S, And Fell, A, (1992) Evaluating the Personal Function, second Edition, Cheltenham, Stanley Thornes. Tyson, S, York, A, (2000) Essentials of HRM, Elsevier, London. (Ref for neo pluralism) Read More