The success of any company or organisation lies to great extent in the way the Human Resources are managed within the organisation. The word Human Resource is all about having the right people at the right place, giving them the right training and placing them at the right jobs at the right time and ensuring they achieve the right outcomes. Thus, in this research paper we will be able to discover the meaning of Human Resource Management as well as the nature of the function defining the HR. As the world is moving constantly at a fast speed towards the global digitalisation Human Resources Management has evolved from the traditional HRM to contemporary HRM. Its right application in business management has contributed to the success of businesses around the world. And this has proved to be ”The success Formula” for many Human Resource Managers as well. Yet this whole process has no less barriers which comes along …
As mentioned above, for companies or businesses to be able to reach their objectives and gain the targeted outcome it is very important to be able to have the best people at the right place or strategic post within an organisation, but change remains constant and the adaption to it defines the results. The famous quote of Charles Darwin correctly supports the above statement.
“It is not the strongest or the most intelligent who will survive but those who can best manage change.”
HRM originated in the United States in the 1950s although it did not gain wide recognition there until the beginning of the 1980s. In the U.K., HRM did not come to be recognised until the middle to late 1980s. The major reasons for its emergence are the pressures evidenced in product markets during the recession of 1980–1982 combined with a growing recognition in the U.S. that trade union
influence in collective employment was reaching fewer employees. By the 1980s, Japan was posing a major challenge to the U.S. economy among other overseas competitors. Two issues were emerging: the productivity of the American worker, particularly compared to the Japanese worker, and the declining rate of innovation in American industries. Enterprise managers began treating it as a matter of urgency that they create a work situation free from conflict in which both employers and employees might work in unity towards the same goal –the success of the organisation.
Human Resources have had an evolution period till date. Some also argued that HRM was Old wine in new bottle or the as the ”Emperor’s new clothes’ … leading to the believe that the term human resources was first coined in the 1960s when the value of labour relations began to garner attention and when notions such as motivation, organizational behaviour, and selection assessments began to take shape.
William R. Tracey, in “The Human Resources Glossary,” defines Human Resources as: “The people that staff and operate an organization,” as contrasted with the financial and material resources of an organization. A human resource is a single person or employee within your organization. Human resources refer to all of the people you employ.
Each company has its own unique culture. There many factors that are involve like the values, visions, ideals, norms, working language, systems and habits of a group who work together. One of the characteristics of a good human resources employee is that he develops and manages the company’s culture. HR Managers recruit new hires, maintain benefits and payroll, mediate conflict and engage in training and development. Their role is at the core of a company’s success.
Human Resources evolved from the term: personnel, as the functions of the field, moved beyond paying employees and managing employee benefits. The evolution of the HR function gave credence to the fact that people are an organization’s most important resource. People are an organization’s most significant asset. Employees must be hired, satisfied, motivated, developed, and retained
Human resource management is therefore focused on a number of major areas, including:
1) Recruiting and staffing
2) Compensation and benefits
3) Training and learning
4) Labour and employee relations
5) Organization development
In the constantly changing world, employment relationship has gone through a series of important changes and adaptations over the past decade. These changes and adjustments are said to be at the core of the foundation of HRM, tracing the path for further development in the future. Among the more significant contemporary changes that can be noted are:
1. A decline in the proportion of employees in trade unions.
2. A decline in the proportion of employees whose pay is set by unionised collective bargaining.
3. A reduction in the range of employment issues that are handled collectively, coupled with a rise in the range of employment issues that are derived from a managerial agenda.
4. A considerable volume of restructuring of organisations and employment away from many tiers of hierarchy and stable occupational structures, coupled with a corresponding rise in short-term, part-time, contracted-out or franchised employment.
5. Adoption of technology in the work environment had made impact on personnel choices and employability and this must be dealt with through a rational HRM policy and practices.
According to some analysists and researchers contemporary HRM has a more focused managerial perspective which is often strategically driven and that it represents a more unified and holistic approach than the technical-piecemeal approach of traditional personnel management. This signifies HRM is seen as pre planned agenda dealing with business-related issues and contributes to the overall success of the organisation in a proactive manner in comparison to the traditional personnel management which deals with the mundane requirements of the day in a more reactive manner. Yet debates showed that none of the above approaches may be entirely correct as both continues to co-exist…
There are barriers and challenges while organisations opt for the transition to Strategic Human Resource management which need great focus.
Human Resource Audit
Objectives and benefits of Human Resource Auditing
Human Resource Auditing Process
Human Resource Accounting
Methods of Human Resource Accounting
Outsourcing and Crowdsourcing
Temping or Temporary Staffing
Human Resource Benchmarking
Human Resource Planning
Human Resource Planning
Objectives and Benefits of HRP
Human Resource Planning at Different Levels
HR Demand Forecasting
HR Supply Forecasting
According to Beer et Al in the map of HRM territory it mentions about the four C’s. The idea underlying this model is that you can promote employee commitment by practicing soft HR. The model tells the extent to which a particular set of HR practices will deliver employee commitment. It is largely an analytical model and not a prescriptive model, like the hard/instrumentalist model of Techy, Devanna and others. Beer et al.,1984 said that any management decisions and actions have an impact on the relationship between the organisation and its employees- its human resources. Decisions that taken by general mangers on daily basis. The four C’s are as follows:
1. Competence of employees: High competence creates a positive
attitude towards learning and development.
2. Commitment of employees: High commitment means that
employees will be motivated to “hear, understand, and respond”
to management’s communication relating to the organisation of
3. Congruence between the goals of employees and those of the organisation: Higher congruence is a reflection of policies
and practices which bring about a “higher coincidence of interests
among management, shareholders and workers.”
4. Cost-effectiveness of HRM practices: “means that the
organisation’s human resource costs – wages, benefits and
indirect costs such as strikes, turnover and grievances – have
been kept equal to or less than those of competitors.”
on the other side John Storeys
Managing people in an organisation from a macro perspective is called Human Resource Management. It also sums up the management of people in the form of a collective relationship between management and employees. This basically focuses on the objectives and outcomes of the Human Resource Management function. Thus, HR function in contemporary organizations is concerned with the notions of people enabling, people development and working towards the “employment relationship” fulfilling for both the management and employees.
Traditional vs Modern Human Resource Management
The major difference between “Traditional Human Resource Management” and “Modern
Human Resource Management” is that; the Traditional Approach is the Personnel
Management whereas the Modern Approach is the Human Resource Management toward
managing people in an enterprise.
It is a predominantly administrative record-keeping function that aims to establish and maintain equitable terms and conditions of employment.
It integrates the traditional personnel management functions to corporate goals and strategies and performs additional people centered organizational developmental activities.
Here is a comparison in terms of Scope, Approach, Nature and Application
Human Resource Management
1. Narrow Scope
Human Resource Management
1. Broader Scope
2. It include functional activities such as; Organizational Developmental activities
– Manpower planning such as;
– Job analysis,
– Job Evaluation,
– Developing Organizational Culture,
– Payroll Administration,
– Communication of Shared Values.
– Performance Appraisals, Etc.
– Labor Law Compliance,
– Training Administration. Etc.
3. These approaches remains integrated to the company’s core strategy, vision, and seek to optimize the use of human resource for the fulfilment of organizational goals.
4. The strategic and philosophical context of human resource management makes it more purposeful, relevant, and more effective compared to the personnel management (traditional approach).
1. It gives importance to;
– Established practices
Approach ( Modern)
. It gives importance;
4. HRM philosophy holds; contract, Improved Performance as the driver of Employee Satisfaction
– Employee Satisfaction as the Work Challenges
-key to keeping Employees
– Team Work
– Creativity to Improve
– Institute Compensation
– Work Simplification Initiatives as Possible Motivators
1. It remains integrated with corporate and strategy and takes a proactive approach to align the workforce toward achievement of corporate goals.
2. It takes an immediate approach to bring changes in corporate goals or 2. It has a more comprehensive and strategies proactive performance management system that aims to correct performance rather than make a report card of past performance.
It is an independent staff function:
1. It carries out much of the human organization, with little resource management tasks; it involves involvement from line managers, the line management and operations and no linkage to the organizations staff heavily core process.
2. It gives greater thrust on dealing with core process.
3. It endeavours to reconcile the goals and views of the workforce with more importance to customer-focused management interest by institutional developmental activities and facilitating means, individual employees rather than bargaining or negotiating with trade unions.
Influences or barriers while transitioning
The transition from personnel HRM or merging into the contemporary HRM involves many influencing factors. These are known as the external or internal environment influences. Whichever the environment influence it may be, decisions taken within the organisation are impacted by them. Professor John Storeys laid down the classificatory matrix of 27 points of practices, to show the difference between personnel and IR practices and HRM practices. According to him the soft HRM model is based upon human relations school . Storey penned it down as `treating employees as valued assets, a source of competitive advantage through their commitment, adaptability and high quality for the organisation. Here are the 27 points of differences..
John Storey’s 27 points of difference between Personnel ; IR and HRM practices (1992)
Dimensions Personnel and IR HRM
Beliefs and assumptions
1.Contract Careful Lineation of written contracts Aim to go “beyond contract”
2. Rules Importance of devising
clear rules/mutuality “Can do” outlook;
impatience with rule
3.Guide to management Procedures “Business need”
4. Behaviour referent Norms/custom and practice Values/Mission
5. Managerial task vis-à vis
labour Monitoring Nurturing
6. Nature of relations Pluralist Unitarist
7. Conflict Institutionalised De-emphasised
8.Key relations Labour management Customer
9. Initiatives Piecemeal Integrated
10. Corporate Plan Marginal to Central to
11. Speed of decisions slow Fast
12. Management role Transactional Transformational leadership
13. Key Managers Personnel/IR specialists General/business/line
14. Communication Direct Direct
15. standardisation High Low
16. Prized management skills Negotiation Facilitation
17.selection Separate, marginal task Integrated, key task
18.pay Job evaluation (fixed grades) Performance-related
19.Conditions Separately negotiated Harmonisation
20. Labour management. Collective bargaining contracts Towards individual contracts
21. Thrust of relations with stewards Regularised through facilities and training Marginalised (with exception of some bargaining for change models)
22. Job categories and
grades Many Few
23. Job design Division of labour Teamwork
24. Conflict handling Reach temporary truces Manage climate and culture
25. Training and development Controlled access to courses Learning companies
26. Foci of attention for Personnel procedures Wide-ranging cultural, interventions structural and personal strategies
27.Communication Restricted flow Increased flow
Thus, the transformation of the HR function is marked by three major changes:
1. Viewing people as assets rather than costs.
2. Being proactive rather than reactive.
3. Recognising multiple constituencies or balancing employee interests and organisational concerns.
As seen, in the past HR served only to the interest of the management in comparison to the current trend where HRM should help balance the interests of the employees along with being at the table with top management. Business and managers to be able to reach their aims in this e-generation world … from the personnel functions need to reorient their activities to take a more strategic and developmental approach to human resource management (HRM). The focus on decentralising as well as identifying the need for a more strategic approach to HRM issues in organisations, requires greater involvement by line managers in the management of their staff. This will lead to more involvement in the training of employees, rewarding people for their achievements and to the right assignments of the right employees at the right strategic positions. Doing so will not only retain and motivate employees but will also enlarge career scopes within organisations. Many business owners around the world recognise the critical role that human resources play in corporate success or failure..
Finally, in our discussion, we find that Traditional Human Resource Management lays down rigid job description with many grades and a fixed promotion policy – usually based on seniority and performance appraisal ratings. Whereas Modern Human Resource Management has relatively fewer grades and ranks, with broadly defined job responsibilities providing much scope for applying creativity and initiative, and plenty of career paths, with skills, talent and commitment the key drivers of career advancement. Thus, it would not be wrong saying that traditional HRM lays down the basic functions for an organisation while HRM gets into play while merging into more employee’s welfare and progress functions to reach the goals of the organisation