Basics of Human Resource Management

1. HRM for MBA Students
Lecture 1
People management: personnel
management and human resource
management

2. Learning outcomes
• A good appreciation of the ‘people management’ function
in contemporary organisations
• Knowledge of ‘human resource management’ (HRM)
and ‘personnel management’ (PM)
• An appreciation of the theoretical development of HRM
• Understanding of the relationship between HRM and
business strategy
• An appreciation of the practical application of HRM
• Recognition of the themes of HRM in the early twenty-
first century.

3. ‘People are the only real source of ...
continuing competitive advantage.’
Prahalad and Hamel (1990)

4. We can define people
management as:
‘all the management decisions
and actions that directly affect
or influence people as members
of the organisation rather than
as job-holders.’

5. What do people managers do?
Their role has specific objectives under four
headings:
• Staffing objectives
• Performance objectives
• Change management objectives
• Administration objectives
Torrington, Hall and Taylor (2002)

6. The ‘Ulrich model’ of HRM
Human Resources should become:
– a strategic partner with top management
– an expert in administration
– a champion for employees
– an agent of continuous transformation
Ulrich (1998)

7. ‘Building organisational capability
is HR’s heartland’
and
HR managers
‘can help make capitalism human’
Linda Holbech (2007 )

8. Taylorism
Principles of ‘scientific management’ (1911):
– time and motion studies of work processes
– standardisation of tools, implements and
methods
– increased division of labour
Taylorism + machine-paced work = Fordism

9. The evolution of people
management

10. Personnel management
• The first Industrial Revolution: welfare role
• Rise of trade unionism: industrial relations
role
• ‘Scientific management’: training;
sophisticated recruitment and selection
• Thus by the 1970s the Personnel
management paradigm

11. Human resource management
• Loss of faith in traditional mass-production
techniques
• The example of Japanese quality
• Technological development
• Thus by the 1990s the (post-Taylorist)
HRM paradigm

12. Perspectives in management
• Unitarist
– Conflict is ‘wrong’
• Pluralist
– Conflict is not ‘wrong’ but must be managed
• Radical/critical
– Conflict is inevitable ... and may be ‘right’

13. The Harvard model of HRM
A ‘map of the HRM territory’: from Beer et al (1984, p.16)
Stakeholder
interests
Shareholders
Management
Employee groups
Government
Community
Unions
HRM policy choices
Employee influence
Human resource flow
Reward systems
Work systems
HR outcomes
Commitment
Competence
Congruence
Cost-effectiveness
Long-term
consequences
Individual well-being
Organisational
effectiveness
Societal well-being
Situational factors
Workforce characteristics
Business strategy and
conditions
Management philosophy
Labour market
Unions
Task technology
Laws and societal values

14. ‘Ideal types’ of PM and HRM
Characteristics Personnel
management (PM)
Human resource
management (HRM)
Strategic nature  Ad hoc  Proactive, strategic
Psychological contract  Based on compliance  Based on seeking willing commitment
Job design  Typically Taylorist/Fordist  Typically team-based
Organisational structure  Hierarchical  Flexible
Remuneration  Collectivised
 ‘Pay by position’
 Individualised
 ‘Pay for contribution’
Recruitment  Sophisticated recruitment practices
for senior staff only
 Sophisticated recruitment for all employees
 Strong internal labour market for core employees
Training/development  Limited  A learning and development philosophy for all core
employees
Employee relations
perspective
 Pluralist:
 Collectivist, low trust
 Unitarist:
 Individualistic, high trust
Organisation of the function  Specialist / professional
 Bureaucratic and centralised
 Largely integrated into line management for day-to-day
HR issues
 Specialist HR group to advise and create HR policy
Welfare role  Residual expectations  No explicit welfare role
Criteria for success of the
function
 Minimising cost of human
resources
 Control of HR costs, but also maximum utilisation of
human resources over the long term

15. HRM in practice
• Evidence of significant adoption of HRM
practices
– (Workplace Employee Relations Surveys and
others)
• But still two traditions or paradigms
• Most organisations share characteristics of
both
• But HRM is in the ascendant

16. Key themes in HRM
• High-involvement employee work practices
• Flexible organisation (core and periphery)
• Micro-level work organisation (teamworking)
• Sophisticated HR for recruitment
• Unitarist employee relations
• Change management
• The learning organisation
• Knowledge management
• Leadership