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TOPIC 1: The nature of contemporary HRM

Management and HRM:


Human capital: skills, capabilities and traits that people contribute to the
workplace
Management: the processes designed to plan, organize, lead/coordinate
and control productive activities
Human resource management: a long-term perspective which focuses on
the links between personnel functions and their contributions to
organizational goals and objectives

Defining HRM:
Organizational activities concerned with RECRUITING AND SELECTING,
DESIGNING WORK FOR, TRAINING AND DEVELOPING, APPRAISING AND
REWARDING, and MOTIVATING WORKERS.
Refers to the framework of philosophies, policies, procedures and
practices for the management of the relationship that exists between an
employer and an employee

Explaining HRM using Storeys HRM model:

HRM involves a range of contingencies:

External contingencies
- Trade unionism : a challenge to management discretion
- Industry characteristics: markets shape choices over skills, relative
costs of labour, length of employment commitment
- Labour markets: shape rewards and recruitment practices
- Governments: regulate many areas of employment r/s (health and
safety, rewards, hours of etc) and forms of employment contract
- Political economy: welfare based vs. market based approaches to
work
Internal contingencies:
- Organizational size: complexity and scale dictate degree of
formalization of management practices
- Technologies: shape skills requirements and work processes
- Scope of organization: special considerations through location in
global scope of operation

Scope of HRM: subdomains of knowledge (Boxall et al., 2008)


Micro individual employees and small work groups
Strategic (SHRM) links HR strategies with business strategies and
measures effects on organizational performance
International (IHRM) management of people in companies operating in
more than one country

Scope of HRM:
HRM in personnel management:
- Involves manpower planning
- Hiring (recruitment and selection)
- Training and development
- Induction and orientation
- Transfer
- Promotion
- Compensation
- Layoff and retrenchment
- Employee productivity
- Includes performance appraisal
- Developing new skills
- Disbursement of wages
- Incentives
- Allowances
- Travelling policies and procedures

HRM in employee welfare:


- Deals with working conditions and amenities at workplace
- Wide array of responsibilities such as safety services, health services,
welfare funds, social security and medical services
- Relate to supervision, employee counseling, establishing harmonious
relationships with employees, education and training

HRM in industrial relations:


- Need for careful interactions with labour or employee unions,
addressing their grievances and setting the disputes effectively in
order to maintain peace and harmony
- Safeguarding the interest of employees by securing the highest level of
understanding to the extent that does not leave a negative impact on
organization
- Establishing, growing and promoting industrial democracy to
safeguard the interests of both employees and management
Employment relationship:
Legal: terms and conditions of work
Social: mutual expectations and obligations that employers, employees
and society at large have for work and employment r/s

Four key components: interrelatedness and coherence of activities


1. Selection
2. Appraisal
3. Development
4. Rewards
HARVARD MODEL: 6 components:
- Helps firms to develop 1. Situational factors
the best fit between itself 2. Stakeholder interests
and its environment that 3. HRM policy choices
is developing the best 4. HR outcomes
strategies for the firm 5. Long-term consequences
6. Feedback loop

WARWICK MODEL: 5 elements:


- Extends analytical 1. Outer context
aspects of Harvard model 2. Inner context
- Maps connections 3. Business strategy context
between outer and inner 4. HRM context
contexts 5. HRM content
GUEST MODEL: 6 components:
- Personnel management 1. HR strategy
seeks compliance 2. Set of HR policies
whereas HRM seeks 3. Set of HR outcomes
commitment from 4. Behavioral outcomes
employees 5. Performance outcomes
6. Financial outcomes

STOREY MODEL: 4 parts:


- Differences between 1. Beliefs and assumptions
personnel and 2. Strategic aspects
industrials and HRM 3. Role of line managers
paradigm by creating an 4. Key levers
ideal type

ULRICHs STRATEGIC PARTNER 4 roles:


MODEL: 1. Strategic partner
- Demonstrates the added 2. Change agent
value of HR activities in 3. Administrative expert
business terms 4. Employee champion
HRM AND SHRM:

1. Unitarist 2. Pluralist
- Common interests between - Inevitable conflicts of
employers and employees interest
- Commitment by both parties - Negotiation and
- Hard for managers to keep resolution to achieve
subordinates happy all the time common goals
3. Hard HRM (instrumental) 4. Soft HRM (interpersonal
skills,humanistic)
- Strategic, managerial issues - Involvement of
- Effective utilization of HR employees through
towards broad goals and consultation,
objectives empowerment,
commitment and
Approaches: communication
- Employees are viewed as a
passive factor of production, an Approaches:
expense - Stresses active
- Employees can be easily replaces employee participation
and seen as disposable - Gains employee
- Strategic, quantitative aspects of commitment,
managing HRM as an economic adaptability and
factor contribution of their
competences to
achievement of
organizational goals
- Employees are viewed
as assets
- Emphasizing
communication,
motivation and
leadership

HRM functions: creates the system that acquires, motivates, develops and retains
talent that is a key source of competitive advantage

1. Staffing
- Process of planning, acquiring, deploying, and retaining employees
that enables the organization to meet its talent needs & to execute
business strategy
- Recruiting focuses on attracting people to apply, retaining qualified
applicants in the candidate pool while they are evaluated, finally
enticing the chosen candidates to accept job offers
2. Training and development
- capabilities are develop through both formal and informal activities
- Training and development function responsible for career planning,
organizational development and legal compliance
3. Performance management
- Align individual employees goals and behaviors with organizational
goals and strategies, appraising & evaluating past & current behaviors
and performance
- Provide suggestions for improvement
- Provide performance goals so that employees know what aspects of
their jobs to focus on or the performance levels expected of them
4. Rewards and benefits
- Compensation and benefits perceived as both adequate and equitable
that reward employees for their contributions to organizational goal
attainment are important to employee motivation, performance and
retention
- Total rewards include direct (salary), indirect (health insurance), and
nonfinancial (feeling appreciated).
5. Health and safety
- Includes topics ranging from wellness, fire and food safety,
ergonomics, injury management, disaster preparedness, industrial
hygiene, and even bullying and workplace violence
- Involves protecting employees from work-related toxins, accidents,
injuries
- Refers to employees physical and mental health
6. Employee management relation
- Determine the employment rights of both employers and employees
- Labour participation programs, employee surveys, other tools used in
managing employee-management r/s
- Focuses on unionized employment situations

How Does HRM influence organizational performance?:


Effective HRM systems increase organizations ability to meet its goals,
enhance its ability to grow and manage change, increase employee
engagement, effort and performance
Managing HR helps organisations with strategic risk, operational risk,
financial risk, compliance risk
Most effective HRM systems are based on solid research, identifying and
implementing best practices, align the HRM system with organizational
goals and environmental realities.

What Effective HRM Systems Do:


Improve organizational efficiency
Contribute to revenue growth
Increase employees understanding of their responsibilities and how they
relate to the organizations mission, business strategy and goals
Develop and enhance employee capabilities and talents to enable
strategic execution and goal attainment
Equitably link rewards to responsibility level of employees skills and
knowledge
Increase employee engagement, effort, and performance
Increase the organizations ability to manage change
Decrease on organizations legal liability for compliance with employment
laws

Role Of HRM In Executing Business Strategy


A companys business strategy defines how the firm will compete in its
marketplace. A business strategy should reflect what the organizations
customers want, what the firm wants, and what the firm can cost-
effectively deliver
How a company positions itself to compete in the marketplace determines
the competitive advantage it needs to create and the HRM strategies it
need to pursue to acquire, develop, motivate and retain the appropriate
talent
A firms HR strategy links the entire HR function with the firms business
strategy

Who is responsible for HRM?


HRM professionals
Managers
Individual employees
Shared service centers
Outside vendors
Professional employer organisations

SHRM OUR MODEL

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