Module 1:

Human Resource Management

in perspective
 Ed Michaels (1999)
“ The half life of technology is growing shorter all the
time….
“….clearly people are the primary source of sustained
competitive advantage”
• A Numbers Driven Company

PEOPLE !!!!!

• But numbers are NOT Everything !!

• Coverage:

• Nature and scope of HRM,

• HRM functions,
• Understanding concepts of personnel
management
• Human Resource Development and Strategic
Human Resource Management
• HRM models,
• Changing Role of HR.
 HRM – Why it matters more than
ever before
Business challenges facing organizations

• Globalization and market changes: organizations need enhance

ability to manage diversity, complexity, and uncertainty

• Organizational growth: Firms seek to acquire new customers,

businesses, develop new products, share knowledge, innovation
and learning among employees

• Technology: Challenge for managers to make sense of and use

technology to create advantage

• Change: To grow firms need to evolve continually

•
 HRM – do we need it…
• Human capital as a sustained source of competitive advantage

• People are different – needs are different – way in which they need to be
managed is different

• Demographics of the workforce is changing

• Primary job is no longer administration – HR has taken a strategic dimension

• Jobs have changed – more technical, greater skills, job boundaries are
becoming blurred

• Emergence of the knowledge workers – whose needs are different

• Global competition – success hinges on workforce productivity, commitment,

• Organizations need specialists in HR

 Nature and scope of HRM
• 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.

• HRM – Objectives
• Providing the organization with well-trained and qualified people
• Employing the skills and workforce efficiently
• Build individual and group capabilities
• Maintaining high-quality employee relations using tools that motivate,
satisfy and commit the employee.
• Communicate HR policies unambiguously
• Ensure legal compliance
• Help enhance ethical and socially responsible behavior of workforce
• Scope
• • Pre-joining and joining
• HR planning and job analysis
• Recruitment and selection
• Induction and placement
• • Performing
• Training and development
• Performance management
• Rewards and compensation
• Employee welfare, benefits and employee relations
• Motivation and retention
• • Exit
• Manpower and human capital analysis and accounting
• • Other functions
• Change management
• Workforce and organizational climate information
HR Functions
 Differences between Personnel Management (PM) and
Human Resources Management (HRM)

• Personnel mean employed persons of an organization.

Management of these people is personnel management (PM).
• Human resource management (HRM) is the management of
employees’ knowledge, aptitudes, abilities, talents, creative abilities
and skills/competencies.
HRM and Personnel Management
• PM: Retrospective , routine and administrative in nature
• PM: Non-strategic in nature, no linkages with organizational strategy
or other function
• HRM: Evolving nature of the area
• HRM: Views people as assets and not as tools – aims to align HR
strategy with organizational strategy
 Differences between Human Resource Management
(HRM) and Human Resource Development (HRD)

1. HRM is a subset of the entire management processes of an

organization. HRD is a subset of HRM.
2. Scope of HRM is wider. Scope of HRD as compared to HRM is
narrower.
3. HRM manages and develops the human elements of an
organization in its entirety on longer term basis. HRD focuses on
those learning experiences which are organized for a specific
period to bring about the desired behavioral changes.
4. HRM emphasizes that employees, their abilities and their
attitudes constitute an important organizational resource that
should be used effectively and efficiently to achieve
organizational as well as employees' goals. HRD emphasizes
mainly on training and development of employees.
 SHRM
• The principle of aligning HR policies and
practices with business strategy
• HR function: Considers the implication of
business strategy on all HR systems and
attempts to translate these into specific people
management policies
Linking Strategic Planning and Human Resources
 Benefits of Strategic HR planning

• Encourages proactive rather than reactive behavior

• Explicit communication of organizational goals

• Examination of underlying workplace assumptions

• Identification of gaps between current situation and future vision

• Encourages line manager participation in people management

• Identification of HR constraints and opportunities

Outcomes of Strategic HR
 HRM Models
• Storey model
• Fomburn et al., (1984) model
• Harvard model
• Guest model
• Warwick model
 MATCHING MODEL OF HRM –
Fombrun, Tichy and Devanna (1984)

HRD

SELECTION PERFORMANCE
APPRAISAL

REWARDS
The Harvard Model of HRM
 VERSIONS OF HRM
John Storey (1995)
John Storey (1995), in New Perspectives on Human resource
management, made a distinction between two versions of HRM.

1. HARD HRM ( The Michigan school): It emphasises the

need to manage people in ways that will obtain added
value from them and thus achieve competitive
advantage. Thus it concentrates on quantitative,
measurable criteria, control and performance
management.
2. SOFT HRM (The Harvard school) : The soft model of HRM
is based upon human relations school and is identified
by Storey as involving `treating employees as valued
assets, a source of competitive advantage through
their commitment, adaptability and high quality.
 Workers primarily viewed as a
Cost to the company
The ‘collective’ view –
Concerns of employees
subordinate Company outlook and
(to managerial Managerial prerogative takes
Position) precedent

Sharp financial HARD HRM

Focus (e.g. per Individualistic
Employee)

Emphasis on gaining
Work efficiencies Marginalization/ rejection of
Industrial Relations
Rejection of ‘differences
Of viewpoints’ between mangers
And employees: these are
Assumed to be similar
 Workers viewed as
“exploitable assets”

“Humanistic” edge to
thinking

More of a
Concern with
SOFT HRM
The employees views Development of core
employees

Emphasis on Employee involvement and

Employee Commitment encouraged
relations
 Guest Model of HRM
HRM HRM
Practices Outcomes
HRM Strategy
•Selection •Commitment
•Differentiation •Training •Quality
•Focus •Appraisal •Flexibility
•cost •Rewards
•Status
•security

Performance
Behaviour Outcomes
Financial
Outcomes
Outcomes
•High productivity
•Increased motivation and innovation
•Profits
•Effort •Low absenteeism
•ROI
•Involvement rates
• Guest comparative model (Guest, 1997) works
on the premise that a set of integrated HRM
practices (Purcell, 1999) will result to superior
individual and organisational performance.

• It holds that HRM strategies like differentiation,

innovation, the focus on Quality and cost
reduction will lead to practices like better
training, appraisal, selection, rewards, job
designs, involvement, and security leading to
more quality outcomes; commitment and
flexibility.
Warwick Model of Human Resource Management