Human Resource Management - Essay Example

What precisely is HRM and what evidence is there to support the contention that it is linked in some way to improvements in a firm’s performance? Human resource management is an significant approach to people management who works in an organisation. This has not evolved all of a sudden. The ideas and concepts are based on wide range of theories and practical tools. Any organisation comprises people from various disciplines and there is no management activity that is not touched by HRM. Human resource management offers insights and practical assistance in the areas of people management such as recruitment of people ,their performance measurement, team building and organisational decision. This field of management looks into the most effective utilisation of the employees to achieve organisational and individual goals. Features of HRM An important feature of this human resource management is that it is people oriented. It looks into the welfare of the employees and evolve the best arrangement for the employee and the organisation such that the organisational goals are met. It is a line responsibility. The human resource managers not only gives advice to their department regarding the issues relating to human resources but also to other departments. HRM is common to all organisations. It is not only a feature of the industrial world but it is hugely relevant in the fields of service, sports organisations, religious organisation, social organisations etc. Since HRM is mainly focussed on the issues relating to the people and due to the varying nature of the people the job of the human resource managers becomes a challenging task. It is a development oriented integrated approach. It not only tries to attain the individual goals of the employees but also the organisation and the society as a whole. (Randhawa, 2007) Objectives of HRM HRM is the integral part of the management activity. The objective of the HRM is to see the effectiveness and the efficiency of the organisation. This they can do by helping the organisation to reach its goals, employ the skills and ability of the work force efficiently, to provide the organisation with well trained employees, look after the employee’s job contentment and self actualisation. The most important is the communication with the employees so that the employees are aware of the various policies undertaken by the management. (Randhawa, 2007) Models of HRM There are several formal models which are very influential. The two most important and influential are the Harvard and the Michigan models. Although they have some key concepts which are common. Storey (1989) distinguished between hard and soft forms of HRM which are followed by Michigan and Harvard models respectively. Hard HRM focuses on the resource side of human resources. It stresses upon cost in the form of overheads and places the command firmly in the power of management. The role is to manage number effectively , keeping the work force closely matched with in terms of both bodies and behaviour. Soft HRM on the other hand stresses the human aspect of HRM. Its concerns are with communication and motivation. People are led rather than managed. They are involved in determining and realising strategic objectives (Price, 2011, p. 29). According to Sisson (1990) there are four features which are common to all HRM models. The most important feature is that the employees are regarded as assets of the organisation and there should be integration of the various resource policies. The responsibility of managing the people is under the senior line manager and the specialists are for providing consultancy services to the managers. Contrary to the earlier practice of bargaining between the employees or union and the managers now the direct discussion between the employees and the managers is preferred. This led to the practice of taking the responsibility for their own work.(Price, 2011). Thus the basic need of the organisation is to improve the company’s performance. For this various strategies and models and tools are implemented. According to Buchanan and Huczynski (2010, p.30) “ there is compelling evidence for the link between ‘high performance’ human resource management and organisational performance.” So there must be some relation between HRM and the performance of the organisation. The study and the development of the theory regarding the relation between the HRM and its performance started in the early 1980s. The basic argument is that in order to make the HRM practices effective it should be integrated with the firm’s strategy. Moreover higher firm’s performance is obtained from certain high commitment HRM. (Guest, Paauwe, and Wright. 2009). So the question that arises now is what are the various strategies or in other words in what ways these strategies are conceived such that they offer a linkage between HRM and firm’s performance. Mintzberg demonstrated five concepts of strategies. According to him strategy is conceived as a plan. This is not executed but intended. Another concept of strategy is that it is a pattern which looks into the consistency in the behaviour over time. According to him strategy can be used as a ploy in order to improve over his opponent or competitor . Strategy can be used as positions which means that it portrays its product in such a way that its product has competitive advantage over the rivals. Strategy can also be used as a perspective which means that every organisation has its own system of working according to their environment and the customers they cater. Thus the effective utilisation of these strategies together with the various models affect the performance of the company. (Guest, Paauwe, and Wright. 2009). Empirical Evidence A Pricewaterhouse Coopers report concludes that : ‘What we can say with confidence is that those business in which people strategy is aligned with the business strategy perform better’(2003:24). A recent review of studies carried out by the CBI reported that :’ More than 30 studies carried out in the UK and USA since the early 1990s leaves no room to doubt that there is a relation between people management and business performance and that the relationship is positive, performance that it is cumulative : the more effective the practices, the better the result’ (cited in Rafferty et al 2005:7).(Fleetwood and Hesketh, 2010, p 71). With the gradual change of the economic environment, globalisation, changing pattern of demand of the customers as well as the investors, increase in competition there is a necessity for the continual performance upgradation to thrive in this competitive world. For this there is a recent approach to management that is to compete with quality rather than cost. For this the organisations depend on human resource development. So idea is to develop the human resource or in other words competency to improve the performance.(Strum,2012). We can show this by a real life example of a North American petrochemical company which has approximately 500 employees. The plant came into existence in the late 70s to cater the domestic sector requirements for energy and chemical products. It since mid 80s there was a sharp decline in the demand for the products. In order to stay in the market the company shifted its attention to international market. Thus the plant introduced significant upgradation and business strategy improvement which proved successful for the company and it recorded significant profits since late 80s. In order to sustain this profit the company introduced various strategies improve the human resource. For this they implemented corporate reengineering which led to restructuring of the organisation. For this they introduced team based style of management known as self regulating teams(SRT). They possess technical skills to complete their tasks and they are encouraged to develop new skills to improve their job flexibility. To support the development of skills for the SRTs a strategic initiative was designed to increase their skills. This is known as ‘learning and growth initiative’. This was initiated to change the company into a learning organisation to create an environment which helps the people to attain their full potential which will improve the performance of the company. They designed a competency based learning and training programme (CBL&T). The purpose of this was to develop instructions and to know whether they improve the performance which is desired by the organisation through evaluation. Two types of evaluation formative and summative where introduced which contributes to the success of the project. The objective of the formative evaluation was to improve the instructional materials before the training The summative evaluation is the second stage of evaluation . The purpose is to know how well the employees are performing their assigned job. All these were initiated to improve the performance of the company (Dubois, 1998). Thus we can see the company designed competency based curriculum design approach for developing the skills of the employees which contributes to the improved performance of the company as well sustaining the performance. There was investment in training of the employees who could understand why it was important. The self regulating teams (SRT) which were formed contributed to the improvement of the business process and they utilised CBL&T system for their continuous upgradation. So we can conclude that to improve the performance of the company which was facing a shortage of demand in the mid 80s resulted in a improved performance after the improvement of the human resources through the formation of SRTs and CBL&T system. REFERENCES Armstrong, M. & Baron,A. (2002). Strategic HRM :The Key to Improved Business Performance.Great Britain:The Cromwell Press. Buchanan,D.A. & Huczynski,A.A.(2010). Organizational Behaviour.Pearsons Education Dubois,D.D.(1998).The Competency Case Book.Amherst,MA:HRD Press ,Inc. Guest, David.E., Paauwe ,J. & Wright,P(2012). HRM and Performance: Achievements and Challenges.United Kingdom:John Wiley & Sons Ltd. Fleetwood,S.&Hesketh,A.(2010).Explaining The Performance of Human Resource Management.Cmbridge UK: Cambridge University Press. Paauwe, J.(2004).HRM and Performance:Achieving Long Term Viability.New York: Oxford. Price, A.(2004). Human Resource Management.4th. ed. Southwestern Cencage Learning. Randhawa, G. (2007).Human Resource Management.New Delhi:Atlantic Publishers & Distributors (P)Ltd. Strum, T.(2012). High Commitment HRM Organisations-A Case Study.Germany:Grin Verlag Read More