One can not overstate the importance of Human Resource Management in an organization. In the last decades the world’s business is following the vision that any organization is, primarily, just a group of people working towards a particular goal. Therefore, an understanding of the fact that Human Resource Management deals with the very core aspect of any organization rose significantly.
According to traditional view, Human Resource Management involves all activities associated with the recruitment, selection, performance and management of the company’s employees, while putting emphasis on the human side of business. Dealing with such a complex organizational element as “the person”, Human Resources Management involves a variety of different inter-related psychological and socio-cultural issues, going far beyond just the basic activities listed above. That is why HRM is often defined as “a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personal techniques”.
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The Human Resource Management theory has evolved over the past decades. The attention from the side of management towards the Human Resource and employee related issues was first seriously drawn in the late 50s. The first stage of HRM development, called “File Maintenance”, took place in the mid 1960s. On this stage, the responsibilities of an HR manager were limited to screening applicants, orientating new employees, collecting and storing the personal data on the employees, and similar tasks. On the “File Maintenance” stage, HR manager’s functions were mechanic and
In the end of 1960s, provoked by the adoption of the Civil Rights Act of the 1964, the concern of the HRM shifted dramatically towards social and legal issues. New anti-discrimination laws, health, safety, and pension laws altogether with increased governmental employment regulation created the demand for the HR specialists of a new kind. These were the managers with a good knowledge of laws, who spent their efforts at compliance activities, such as providing government-required reports, and hiring and promoting the required numbers of minorities. These activities were regarded as absolutely nonproductive outlays negatively impacting the performance of the company. Thus, the main goal of the HRM was Accountability.
In the late 1970s the companies adopted the Organizational Accountability approach, which was aimed at meeting effectively changes in the business environment. On this stage, HR departments were concerned of their accountability to the organizational efficiency, measured in dollar terms.
The HRM turned into a real science in the 1990s. Companies started paying much attention to the HR problems, regarding HRM as one of the key tools in increasing the overall company’s efficiency. The formed approach received the name “Strategic Partnership”, since the managers were seeking the synergy of the employees and the compliance of the employees’ interests and motivation with the corporate goals. The person was regarded now as the key value of a company, while as the human factor was vied as the main source of competitiveness.
Some authors also mention the last stage which begun in the late 1990s, named “the Era of Intellectual Capital”. The HR managers of the last generation put much value on developing employees and helping them develop their skills and talents. Unlike conservative companies, where organizational efficiency is attempted to be achieved by the means of control systems, monitoring, supervision, and some forms of incentive payment, in the nowadays companies employees are motivated to “perform effectively under looser supervision arrangements, with more personal flexibility and more unobservable job activities (such as thinking, problem solving and creative adaptations of professional or disciplinary principles)” The progressive methods of HRM are such as employee involvement programs and team work, intensive training and learning, and incentive elements in the remuneration package.
As the history of HRM development shows, the attitude to the role and value of the Human Factor in the organization changed dramatically. The HRM models used in the past, also known as “Hard Models”, are based on theory of Utilitarian Instrumentalism. This theory emphasizes the importance of strong integration of HR policies, systems and activities with the organizational strategy. HRM itself is regarded as a tool to achieve the strategic objectives. Employees are seen as passive and needed to be controlled and directed. Hard model stresses quantitative and calculative aspects of HRM in such a “rational” way as it can be applied to material resources.
The modern approach to HRM is based on Developmental Humanism theory. Known as “Soft Model”, this theory regards employees as a source of creative energy, capable of self-development and worth trust and collaboration and regards people as a source of competitive advantage. The tools of the Soft model are closely connected to effective communication, motivation and leadership. The Soft Model stresses employees attitudes rather than actions aimed at influencing their behavior. HR managers aim at changing employee beliefs and only after that they expect an appropriate behavior to follow.
One of the last trends in business is to treat the HRM strategically and systematically. Under the Strategic Partnership model, activities of HR managers are often summarized by 5 components, called the “5 Ps of HRM”. The model of 5 Ps includes such components as: Philosophy (ideas that define business values and provide guidance how to treat people), Policies (principles and shared values that establish directions for action on employee-related business issues), Programs (HR strategies that coordinate efforts to achieve goals in different people-related business issues), Practices (managerial, leadership, and operational roles driving the needed role behaviors through motivation), and Processes (formulation and implementation of the strategic activities).
No matter what business the company is in, the HRM remains one of the key sources of company’s success. As the HRM science evolved, the understanding of this became more and more clear, while as the world’s business experience has shown that the companies adopting progressive HRM practices and following people-oriented models are often on the top of success.
Armstrong, P., Accountancy and HRM, in Storey J. (Eds), HRM: A Critical Text, Routledge, London, 1995
Hunter, Laurie, Intellectual Capital: Accumulation and Appropriation, University of Glasgow Business School, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, November 2002
Catherine Truss, Lynda Gratton, Veronica Hope-Hailey, Patrick McGovern & Philip Stiles. Soft and Hard Models of Human Resource Management: A Reappraisal. Journal of Management Studies, Volume 34 Issue 1, January 1997
Kelliher C., Perrett G., Business strategy and approaches to HRM. Personnel Review, Volume 30, Number 4, Emerald Group Publishing Limited, June 2001, pp. 421-437(17)
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