HRM - Literature 1 Flashcards
In order to manage the relationships between stakeholders’ organisations apply their HRM strategy, which is composed of:
- Recruitment and selection of the employees;
- Terms and conditions employees work under;
- Equal treatment within an organisation;
- Treatment of rule-breaking employees;
- Payment and rewarding policies for employees;
- Learning and development opportunities provided by an organisation.
The history of HRM (industrial welfare)
Industrial Welfare (in the 19th century)
HRM originated with the industrial revolution (middle of 19th century), following the invention of the factory system.Driven by religious values or recognition of the link between employee welfare and factory output, employers improved upon the initial dire conditions in factories through the provision of workplace and family amenities starting in the 1890s.
!!! This led to the creation of the position of the “welfare officer”, who only dealt with employee issues and was the first real case of HR practices still used today (e.g., compliance, health and safety legislation etc.)
The history of HRM (Scientific Management)
Scientific Management
In the early 20th century, Fredrick Taylor developed the “scientific management movement”, which aimed to increases productivity through greater efficiency in production practices, selection and training practices, and incentivised pay for workers. Following the production line and large factories in the 1920s, “labour managers” and “employment managers” were introduced to the workforce. They oversaw the centralisation and standartisation of certain emploment-related functions (e.g., hiring, payroll, record keeping, and dealing with issues such as absences, recruitment, and queries over bonuses etc.) The contemporary concepts of lean manufacturing and continuous improvement are rooted in the scientific movement.
!!! The tight control, resulting from the scientific approach is associated with the rise of collective action and trade unions.
Trade Unions
organised groups of workers which represent members’ interests in maintaining or improving the conditions of their employment by acting collectively as a way to challenge employer power
Industrial relations
the relationship between employers and employees, with a focus on those areas of the employment relationship where employers deal with employee representatives, such as trade unions, rather than individuals.
The history of HRM (Behavioural Science)
The third phase of HRM’s evolution, around the time of the Second World War, known as the “Hawthorne Effect” led to an emphasis on personal development, a better understanding of group work, and the importance of working conditions as a means of motivating employees. This shift in focus became known as the “behavioural science movement”. The 1960s and 70s saw the introduction of a large body of legislation, which provided rights for employees around dismissals, equal pay, pension rights, and health and safety. These changes led to the emergence of the job title “personnel officer and the business discipline of “personnel management” (PM)
The history of HRM (HRM Today)
The contemporary concept of HRM started to emerge in the 1980s, following a move to differentiate traditional PM from HRM. HRM became increasingly more focused on relationships with the individual rather than the trade union and, thus, led to the current definition of HRM: HRM is the strategic and integrated approach taken by an organisation to the management of its most valued assets, namely its people.
! This shift in HRM resulted from a decline in traditional. manufacturing industries and significant growth in the service sector and the emergence of the knowledge worker, which brought about a decline in trade union membership and the perceived significance of trade unions.
With the rise of smartphones and mobile broadband, employee’s working environment changed dramatically => tailored personal development, individual performance-related reward and non-standard hours of work.
Strategic HRM
The term strategic human resource management (SHRM) has emerged as a direct result of HRM being regarded as an essential component of business strategy. SHRM takes macro-level approach, whereas HRM operates at the micro-level.
SHRM is where HR is coordinated and consistent with the overall business objectives, goal and strategy in order to increase business performance.
HRM and the business context. Which internal (and external) factors to the organisation creates distinction with the HRM practices?
Internal factors:
- size and the structure of the organisation
- sector the organisation operates in
- organisational life cycle
- financial health of the organisation
- values and ideology of senior management
- organisational culture
- workforce characteristics
- established custom and practice
External factors:
- competition
- technology
- labour market
- legislation
- regulation and ethics
John Storey (1989) identified four critical features that he believed characterise contemporary HRM, what are these?
1) HRM is explicitly linked with corporate strategy;
2) HRM focuses on commitment rather than the compliance of employees;
3) Employee commitment is obtained through an integrated approach to HR policies in the areas of rewards, selection, training and appraisal;
4) HRM is not just the domain of specialists in the HR function; rather, HRM is owned by line managers as a means of fostering integration.
Lifecycle of the employee:
Attract & Select:
- employer branding
- organisational design
- organisational structure
- recruitment strategy
- selection techniques
- onboarding
Manage & develop:
- Organisational culture
- management style
- performance management
- motivation
- level of employee participation
- discipline and grievance
- learning
- development
Reward & Retain
- pay and benefits
- recognition
- employee engagement
- talent management
- succession planning
- career planning
- employee welfare
- employment relations
Separate:
- exit interviews
- outsourcing
- retirement
- redundancy
The different ways HR strategy can be linked to business strategy:
1) Separation model
2) fit model
3) dialogue model
4) holistic model
5) HR-driven model
HR practitioners have an impact across four different dimensions:
1) Individual level
- building effective relationships and good reputations across the business
2) Organisationally
- they are responsible for the design and delivery of appropriate HR practices that reach right across the organisation.
3) Contextually
- their understanding of the internal and external environments specific to their organisation, are vital in developing the appropriate HR strategy
4) Strategic level
- they have a role in developing leader, manager, and employee perceptions of the HR function as adding value and enabling them to deliver on the business strategy, rather than just managing the more basic operations of the employment relationship.
The following competencies are needed in the mix of the HRM function:
1) credible activists
- trusted; take action positively as needed by business
2) capability builders
- deliver the appropriate HR practices, to build and sustain the workforce
3) change champions
- responding to the external pressures and pace of change, engaging key stakeholders, enabling flexible and adaptable capabilities in the organisation.
4) innovators and integrators
- using latest scientific evidence and business insights to continuously develop new HR practices, in a sustainable and integrated manner
5) technology proponents
- skills to leverage available technologies, that facilitate the effective and efficient delivery of HR practices. Also use HR analytics, so they are positively impacting the business strategy.
Line managers
managers who have employees directly reporting to them and who have a higher level of responsibility than those employees.
! The various day-to-day HR practices need to developed to line managers in order to allow for faster decision-making that is more in tune with business needs.
The Michigan model of HRM
Also known as the “fit” or the “contingency” model. Developed by Michigan Business School. Stressed the importance of that alignment, firstly between the HR strategy and the business strategy. Secondly, between the HR practices themselves.
The 5 key areas on which HRM should focus:
1) Selection of the most suitable individuals to meet the needs of the business;
2) Managing performance to achieve corporate objectives
3) Appraising performance and providing feedback
4) Providing rewards for appropriate performance that achieve specific goals
5) Developing employees to meet the needs of the business
Criticism of this model include one-way nature of the HR and business strategy relationship and the lack of recognition of employee interests and behaviour choice.
Guest Model of HRM
This model represents a compromise between the low-involvement and high-involvement approaches of the previous two models (universal and michigan/fit/contingency models). Four key principles, if followed, combine to increase organisational effectiveness:
1) Strategic integration: HR policies must be aligned to the needs of the business strategy, and the various aspects of HRM must be consistent and mutually supportive
2) High commitment: commitment is sought, in that employees are expected to identify closely with the interests of the organisation and behave accordignly
3) Flexibility: this involves the ability and willingness of employees to demonstrate flexibility and adaptability to change as business demands change
4) High quality: this quality of management and staff is important in achieving high performance.
Universal approach to HRM
- Stakeholders include shareholders, leaders, managers, employees, government, etc.
- Each stakeholder has unique, legitimate interests.
- HRM strategy should align with business strategy and reflect stakeholders’ interests.
- Consider situational factors: economic climate, labor market status, workforce characteristics, trade union membership, legislation.
- Stakeholders’ interests + situational factors = foundation for HR practices.
- Outcome: Changes in organizational behaviors or capabilities, leading to specific organizational outcomes.
- Criticisms: Complexity and high involvement approach.
Strategic HRM Contingency Approach
The contingency or “best fit” approach is the belief that organisational context provided the direction as to which HR practices should be chosen. Proponents of this view believe there is no universal answer to the choice of HR practices. The choice is contingent on the context of the organisation and its business strategy. So, each organisation can choose a different set of practices, depending on their organisation-specific context and strategy. External alignment is the key issue.
Strategic HRM Universalist Approach
The Universalist approach focuses on the existence of one set of HRM “Best practices” aimed at creating and enhancing high levels of employee commitment and performance; these will result in superior levels of organisational performance, regardless of the context in which the organisation operates and the competitive strategy of the firm. Pfeffer’s seven HRM practices are:
1) recruiting the right people
2) high wages clearly linked to organisational performance
3) employment security
4) information sharing
5) investment in training and skill development
6) self-managed teams and decentralised decision-making
7) reduced status differentials
these hr practices are also referred to as high involvement and high commitment. In recent years there has been a rise in the use of low-involvement HRM with the growing use of zero-hours contract.
Human resource information system
HRIS is a software system for data entry, tracking and information needs of the HR function. Even when organisations use an HRIS, the data is often not utilised within the organisation to support decision-making.
Human resource (HR) analytics
Human resource analytics is the use of people-related data in analytical processes to address business issues. HR analytics is regarded as an essential capability to ensure HR’s future as a strategic management function for transforming organisational performance for the better.
Different HR analytics definitions
1) Fitz-Enz and Mattox define HR analytics as “primarily a communication device, bringing together data from disparate sources such as surveys, records and operations to paint a cohesive, actionable picture of current conditions and likely futures”. They argue that HR analytics is not just statistics, but an understanding of interactions and relationships is also an important part.
2) Edwards and Edwards have more narrow definition and define HR analytics and define it as “the systematic application of predictive modelling using inferential statistics to existing HR people-related data in order to inform judgments about possible causal factors driving key HR-related performance indicators.”
3) Mondare et al. have the broadest definition and define HR analytics as a process that demonstrates the direct impact of people on importnat business outcomes. Inferential statistics make predictions about populations based on a sample of the population. Causal factors are determinants.
4) Lewler et al. distinguish HR analytics and HR metrics by arguing that HR metrics are measurement of specific HR outcomes, e.g., efficiency, effectiveness and impact. HR analytics are techniques used to show the impact of HR activities through the analysis of HR metrics.
5) Marler and Boudreau’s research shows that HR analytics is often defined by authors as either analysis or decision-making process.
The definition adopted in the chapter defines HR analytics as an “HR practice enabled by information technology that uses descriptive, visual and statistical analyses of data related to HR processes, human capital, organisational performance, and external economic benchmarks to establish business impact and enable data-driven decision-making”
An HR analytics strategy should meet 3 aims:
1) Connect HR data with business data to explore how the HR function influences outcomes at the organisational level
2) Enable HR leaders to design and implement HR management activity in an efficient and effective manner
3) Allow the organisation to measure the effectiveness of HR to deliver its objectives.