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Human resource management (HRM) is the strategic and coherent approach to the
management of an organization's most valued assets - the people working there
who individually and collectively contribute to the achievement of the objectives
of the business. The terms "human resource management" and "human resources"
(HR) have largely replaced the term "personnel management" as a description of
the processes involved in managing people in organizations. In simple words,
HRM means employing people, developing their capacities, utilizing, maintaining
and compensating their services in tune with the job and organizational
requirement.
Features
Its features include:
• Organizational management
• Personnel administration
• Manpower management
• Industrial management
But these traditional expressions are becoming less common for the theoretical
discipline. Sometimes even employee and industrial relations are confusingly listed
as synonyms although these normally refer to the relationship between
management and workers and the behavior of workers in companies.
The theoretical discipline is based primarily on the assumption that employees are
individuals with varying goals and needs, and as such should not be thought of as
basic business resources, such as trucks and filing cabinets. The field takes a
positive view of workers, assuming that virtually all wish to contribute to the
enterprise productively, and that the main obstacles to their endeavors are lack of
knowledge, insufficient training, and failures of process.
Synonyms such as personnel management are often used in a more restricted sense
to describe activities that are necessary in the recruiting of a workforce, providing
its members with payroll and benefits, and administrating their work-life needs. So
if we move to actual definitions, Torrington and Hall (1987) define personnel
management as being:
“a series of activities which: first enable working people and their employing
organisations to agree about the objectives and nature of their working
relationship and, secondly, ensures that the agreement is fulfilled" (p. 49).
The basic premise of the academic theory of HRM is that humans are not
machines, therefore we need to have an interdisciplinary examination of people in
the workplace. Fields such as psychology, industrial relations, industrial
engineering, sociology, economics, and critical theories: postmodernism, post-
structuralism play a major role. Many colleges and universities offer bachelor and
master degrees in Human Resources Management or in Human Resources and
Industrial Relations.
One widely used scheme to describe the role of HRM, developed by Dave Ulrich,
defines 4 fields for the HRM function:
• Change management
• Employee champion
• Administration
However, many HR functions these days struggle to get beyond the roles of
administration and employee champion, and are seen as reactive rather than
strategically proactive partners for the top management. In addition, HR
organisations also have difficulty in proving how their activities and processes add
value to the company. Only in recent years have HR scholars and professionals
focused on developing models that can measure the value added by HR.
Business practice
Human resources management involves several processes. Together they are
supposed to achieve the above mentioned goal. These processes can be performed
in an HR department, but some tasks can also be outsourced or performed by line-
managers or other departments. When effectively integrated they provide
significant economic benefit to the company.
• Workforce planning
• Skills management
• Personnel administration
• Time management
• Performance appraisal
• Labor relations
HRM Strategy
An HRM strategy pertains to the means as to how to implement the specific
functions of HRM. An organisation’s HR function may possess recruitment and
selection policies, disciplinary procedures, reward/recognition policies, an HR
plan, or learning and development policies; however all of these functional areas of
HRM need to be aligned and correlated, in order to correspond with the overall
business strategy. An HRM strategy thus is an overall plan, concerning the
implementation of specific HRM functional areas.
• "Best fit" and "best practice" - meaning that there is correlation between the
HRM strategy and the overall corporate strategy. As HRM as a field seeks to
manage human resources in order to achieve properly organisational goals,
an organisation's HRM strategy seeks to accomplish such management by
applying a firm's personnel needs with the goals/objectives of the
organisation. As an example, a firm selling cars could have a corporate
strategy of increasing car sales by 10% over a five year period. Accordingly,
the HRM strategy would seek to facilitate how exactly to manage personnel
in order to achieve the 10% figure. Specific HRM functions, such as
recruitment and selection, reward/recognition, an HR plan, or learning and
development policies, would be tailored to achieve the corporate objectives.
An HRM strategy can be divided, in general, into two facets - the people strategy
and the HR functional strategy. The people strategy pertains to the point listed in
the first paragraph, namely the careful correlation of HRM policies/actions to
attain the goals laid down in the corporate strategy. The HR functional strategy
relates to the policies employed within the HR functional area itself, regarding the
management of persons internal to it, to ensure its own departmental goals are met.
Business ought to conform to the best ethical practices, not just for a
religious reason or for principles of human dignity, but also to keep from violating
federal laws. Though the laws may not be known, they would not be violated if the
business were operated by ethical principles. Experience has shown that in the long
term business profits will be greater for businesses that practice good ethical
behavior than those which do not.
The attitude of a business towards its employee's acts is a litmus test for its ethical
character. The relationship between the business and its employees is based on the
employment contract. In this chapter we discussed various ethical issues in
personnel management activities like: hiring, remuneration and retrenchment.
An ethical organization follows the principle of ethical selection for hiring
prospective employees.
According to this principle an organization should hire a person who is expected to
contribute the maximum towards enhancing long-term owner value. According to
the principle of ethical selection factors like age, gender, religion and nationality
are irrelevant for hiring a person
An engaged workforce can lead to increased production, innovation and good word
f mouth advertising for the company as an employer.
Skills Development
Another method of employee engagement is to implement a skills development
program for all employees. Skills development programs can include both internal
and external training opportunities, mentoring programs and corporate
volunteering programs.
Ethical Human Resource Management - The Corporate
Social Responsiblity Benefits
The benefits for business of adopting ethical human resource management
practices and viewing employees as human capital to be developed and to provide
a unique advantage in the marketplace can be utilised as part of a corporate social
responsibility strategy. Effective corporate social responsibility requires that along
with minimising harm to the environment, a company needs to be aware of the
social impacts of its operations and ensure that they are not harming human
stakeholders.
Engaged employees are motivated employees who may provide an opportunity for
increased production output or innovative production methods, are less likely to
leave the company voluntarily and may spread word of mouth advertising about
how good the company is to work for. Employee engagement surveys provide an
opportunity to discover employee thoughts about the company, which if positive,
can be expressed to external stakeholders through a corporate social responsibility
report.