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MSC INTERNATIONAL BUSINESS

INTERNATIONAL LEADERSHIP AND


HRM
SESSION 1
The Nature of International HRM

Welcome to Session One

Aims and Learning Outcomes:


Outline the differences between
personnel management and human
resource management,
Domestic and international HRM and
Discuss the variables that moderate
these differences.

Definitions

Human Resource Management (HRM) is a difficult task as there are


many competing definitions.

This arises because of the debate centred over whether HRM is any
different from, or an advance upon, the more traditional term of
Personnel Management.

Personnel Management
'Personnel Management' has been defined as a:
responsibility for all those who manage people as
well as being a description of those who are
employed as specialists; that is, It is that part of
management which is concerned with people at
work and with their relationship within an
enterprise.
- Institute of Personnel and Development

Personnel Management
Nowadays, personnel managers occupy
posts at the most senior level and make an
essential contribution to policy formulation.
Their advice must, however, be based on
knowledge and experience and must be
seen as valuable, and preferably as
essential if it is to be listened to.

Personnel Managers
They are involved in three main areas of work:
1. Employee Resourcing

Recruitment

Selection

Remuneration

Job Evaluation

Human Resource (manpower) planning and forecasting terms and conditions of work

Managing staff turnover and retention

Record-keeping

Health and Safety

Welfare

Personnel Managers

2. Employee Relations This covers:

Industrial Relations

Individual and collective relationships at work

Collective Bargaining

Negotiation

Consultation

Information

Communication

Participation

Redundancy

Dismissal

Grievance Handling

Equal Opportunities

Personnel Managers
3. Employee Development

- Induction

Training needs analysis

Design of training programmes

Direct Training

Evaluation of training

Managing training consultants

Education-Business links

Management development

Career development and succession planning

Appraisal of performance and potential

Counselling and Coaching

THIS IS BY NO MEANS AN EXHAUSTIVE LIST, BUT IT CERTAINLY COMPRISES A VERY WIDE RANGE OF
ACTIVITIES WHICH ARE WITHIN THE PURVIEW OF MANY PERSONNEL DEPARTMENTS.

Origins and Development of Personnel Management

Year

Event

1913

Welfare Workers Association founded

1917

Name changed to Central Association of Welfare Workers

1919

Name changed to Central Association of Welfare Workers (industrial)

1919

Name changed to Welfare Workers Institute

1924

Name changed to Institute of Industrial Welfare Workers Incorporated

1931

Name changed to Institute of Labour Management

1934

Staff Management Association formed as an affiliated group

1946

Name changed to Institute of Personnel Management

Origins and Development of


Personnel Management

There have been various attempts to describe these developments. Of


these, Cuming (1975) describes four main stages:

Welfare Period
Scientific Management
Industrial Relations
Manpower Planning
Briefly, the origins of personnel management lie in the 19th century social
reform movement for the improvement of working and living conditions,
and the religious movements concerned with the welfare of industrial
workers

From Personnel to Human Resource Management?

The availability of computers to assist planning, and the concern for core groups in the
workforce, pushed personnel in the direction of systematic and strategic management
of the human resource -Human Resource Management.

Differences: Personnel and Human Resource Management

The degree of identification with management interests/the extent of involvement


with employees needs.

The degree of emphasis on planning, monitoring and control/fire-fighting and problem


solving.

The extent of the focus on human resources rather than employees.

Emphasis upon people as a high potential, strategic resource for achieving


competitive advantage.

The development of integrated personnel strategies, linked to clearly defined


corporate goals and culture.

Emphasis upon mutuality of interests between management and employees.

There are a number of possible causes


which can be used to explain these
differences.

An increasing identification with management interests, rather than employee needs,


can be traced to two factors:

The changing role of line managers.

The concern of personnel specialists to establish their own power base within
organisations - Role Ambiguity; Low Status and Lack of Power and Authority,
etc.

The Move Towards a More Strategic Approach

There has been an increasing emphasis on planning, monitoring, and control rather
than fire-fighting and problem solving

The availability of computer applications in the area of computerised personnel


information systems (CPIS) can take personnel administration beyond mere record
keeping.

An increasing focus on 'human resources' rather than 'employees' is again a response


to the process of acquisition, merger, and corporate restructuring over the last twenty
years.

The Changing Employment Relationship

Is HRM really different from Personnel


Management?
... HRM is a strategic approach to the acquisition, motivation, development
and management of the organisation's human resources.
(Armstrong, Personnel Management, February 1989)
There is no complete consensus, and indeed quite a considerable debate as
to the precise content of HRM, and even as to whether it is conceptually
distinct in practice from sophisticated personnel management.

Is HRM really different from Personnel Management?

'Old wine in new bottles'


- Here HRM is just seen as relabelling of personnel management jobs without a
corresponding change in roles.

HRM is a reflection of the changing environment of business


- With the increased competitiveness of the 1980s, and the appearance of 'macho
management', 'the new realism', and the 'new right', HRM is an attempt to justify the
shift away from the pluralistic perspective of personnel management to the unitary
framework that assumes that the interests of the business and its employees must
necessarily be congruent (Keenoy,Personnel Review, Vol. 19/2, 1989). There will be
employee involvement - but on the company's terms (Fowler,Personnel Management,
January 1987).

HRM is not necessarily ideal for all organisations

Several observers claim that there is ample evidence that different business
environments and functions need different organisational structures and cultures
(Fowler,Personnel Management, January 1987)

HRM takes a stereotyped view of the preceding personnel practice

People management has always been a responsibility of line managers and not the
exclusive preserve of the personnel profession.

The central concerns of HRM are not new

Defining International HRM

HRM refers to the activities which an organisation must utilise to manage its human
resource effectively.

The figure 'A model of IHRM' presents three key IHRM dimensions:

HR activity including procurement, allocation and utilisation.

The national or country categories involved in IHRM activities.

The three categories of employee of an international firm.

HR Activities include:

Human resource planning

Staffing

Recruitment

Selection

Placement

Training and development

Compensation (remuneration) and benefits

Industrial relations

The New Human Resource


Manager

They Focus More on Strategic, Big-Picture Issues

They Focus on Improving Performance

They Measure HR Performance and Results

Use Evidence-Based Human Resource Management

They Add Value

They Use New Ways to Provide HR Services

They Take a Talent Management Approach to Managing Human


Resources

Differences between Domestic


and International HRM
Domestic and International HRM differs because there:

Are more HR activities.

Is the need for a broader perspective.

Is more involvement in employees' personal


lives.

Are changes in emphasis as the workforce mix


of expatriates and locals varies.

Is risk exposure.

Are broader external influences

This figure highlights four key elements that create


differences between domestic and international HRM.

Changes in the operating environment challenge and drive


strategic responses from management. These responses result in
often dramatic changes to the global work environment. This
process is displayed in the figure below.

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