Lecture (1)

Introduction to Human
Resource Management

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Introduction
The practice of human resource management (HRM) is concerned with
all aspects of how people are employed and managed in
organizations. It covers activities such as human capital management,
corporate social responsibility, knowledge management, resourcing
(human resource planning, recruitment and selection, and talent
management), performance management, learning and development,
reward management, and the provision of employee services.

The aim of this chapter is to provide a general introduction to the practice

and underpinning concepts of HRM. It covers the following:
1) Definition of HRM.
2) Objectives of HRM.
3) Theories of HRM.
4) Characteristics of HRM.
5) The development of HRM as an approach to managing people.
6) Reservations about HRM function.
7) The ethical dimensions that affect HR policy and practice.

1) Definition of Human resource management:

Human resource management (HRM) is a strategic, integrated and

coherent approach to the employment, development and well-being of the
people working in organizations. Thus, HRM covers all the managerial
decisions and actions that influence the employee-employer relationship;
with the purpose of maximizing the organizational integration, employee
commitment, flexibility and quality of work.

2) The objectives of HRM

The overall purpose of human resource management is to ensure that the

organization is able to achieve success through people. Thus, HRM aims
to:
a) Increase organizational effectiveness and capability – the capacity of
an organization to achieve its goals by making the best use of the
resources available to it.

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b) Being concerned with the rights and needs of people in organizations
through the exercise of social responsibility.

3) Theories of HRM

The practice of HRM is underpinned by a number of theories.

a) Contingency theory – HRM is influenced by the organization’s

environment and circumstances.

b) The Resource-Based View – HRM delivers added value through the

strategic development of the organization’s rare, hard to imitate and hard
to substitute human resources.

c) AMO theory – the formula of Performance = Ability + Motivation +

Opportunity to Participate provides the basis for developing HR systems
that attend to employees’ interests, namely their skill requirements,
motivations and the quality of their job.

4) Characteristics of HRM

The characteristics of HRM are that it is diverse, strategic and

commitment-oriented, adopts a unitary rather than pluralist viewpoint, is
founded on the belief that people should be treated as assets and is a
management-driven activity. HRM tends to focus on business values
although there is a growing body of opinion that it has also to be
concerned with employee-centered outcomes.

A) The diversity of HRM

‘Human resource management covers a vast array of activities and shows

a huge range of variations across occupations, organizational levels,
business units, firms, industries and societies.’

A distinction was made by Storey (1989) between the ‘hard’ and ‘soft’
versions of HRM. The hard version emphasizes that people are
important resources to be acquired, developed and deployed in ways

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that allow the organization to achieve its competitive advantage. Thus,
managing human resources in as ‘rational’ a way as for any other
economic factor.

The soft version of HRM is – an approach devoted to human interests

that views people as responsible and progressive beings. It also traces
its origins to the human relations school founded by Elton Mayo (1933),
which believed that productivity was directly related to job satisfaction
and that the output of people will be high if they like their co-workers and
are given pleasant supervision.

The soft version of HRM as described by Storey (1989) involves ‘treating

employees as valued assets, a source of competitive advantage through
their commitment, involvement, high quality of skills, and
performance.

B) The strategic nature of HRM

The most significant feature of HRM is the importance attached to

strategic integration that is considered a feature increasingly associated
with HRM. It is the emphasis on the integration of HR policies both
with one another and with business strategy.

c) The commitment-oriented nature of HRM

One of the aims of HRM is to promote commitment – the strength of an

individual’s identification with, and involvement in, a particular
organization.

d) Focus on mutuality

The importance of mutuality (the belief that management and employees

share the same concerns) is a major characteristic of HRM. The new
HRM model is composed of policies that promote mutuality – mutual
goals, mutual influence, mutual respect, mutual rewards, and mutual
responsibility. These policies of mutuality will elicit commitment which
in turn will yield both better economic performance and greater human
development.
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The concept of mutuality is based on the notion of unitary employee
relations, described below.

e) Unitary versus pluralist employee relations

HRM is characterized by a unitarist rather than a pluralist view of

employee relations. A unitarist view expresses the belief that people in
organizations share the same goals and work as members of one team.
The pluralist view recognizes that the interests of employees will not
necessarily coincide with their employers and suggests that the unitary
view is naïve, unrealistic and against the interest of employees.

f) Treating people as assets or human capital

The notion that people should be regarded as assets rather than variable
costs, in other words, ‘human resources are valuable assets that should be
efficiently used as a source of competitive advantage’. Manager should
benefit from people's skills, abilities, and experience in the interest of
the employing organization.

g) Focus on business values

The concept of hard HRM is based on business-oriented philosophy. It is

concerned with the total interests of the organization – the interests of
the members of the organization are recognized but subordinated to those
of the enterprise. Hence the importance attached to strategic integration
and strong cultures, which flow from top management’s vision and
leadership that stress on the importance of people who are committed
to the organizational strategy, who will be adaptable to change and who
fit the culture.

h) Organization- versus employee-centered outcomes

Although HRM may be viewed as one-sided focus on organizational

outcomes at the expense of employees, but the HR profession has always

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had a special professional responsibility to balance the needs of the
firm with the needs, aspirations and interests of the workforce.

5) The development of the concept of HRM

The terms ‘human resource management’ (HRM) and ‘human resources’

(HR) have virtually replaced the term ‘personnel management’ as a
description of the processes involved in managing people within
organizations.

It is claimed that HRM is more holistic than traditional personnel

management. Since HRM has also emphasized the notion that people
should be regarded as assets rather than variable costs.

Origins of the concept of HRM

HRM did not emerge in a fully-fledged form until the 1980s in the
‘matching model’ and the Harvard framework, described below.

5.1 The matching model of HRM

One of the first detailed statements of the HRM concept was made by the
Michigan school. They held that HR systems and the organization
structure should be managed in a way that is congruent with
organizational strategy (hence the name ‘matching model’).

They further explained that there is a human resource cycle that consists
of four generic processes or functions that are performed in all
organizations: selection, appraisal, rewards and development.

5.2 The Harvard framework

The other pioneers of HRM in the 1980s were the Harvard school. Beer
and his Harvard colleagues believed that today's businesses are in a need
to longer-term perspective in managing people and consideration of
people as potential assets rather than merely a variable cost.

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The Harvard school suggested that HRM had two characteristic features:
1) line managers accept more responsibility for ensuring the alignment of
competitive strategy and HR policies.

2) HR has the mission of setting policies that govern how HR activities

are developed and implemented in ways that make them more mutually
reinforcing.

6) Reservations about HRM

6.1 HRM promises more than it can deliver

It is believed that HRM is an optimistic but ambiguous concept. To put

the concept of HRM into practice, it involves strategic integration,
developing a coherent and consistent set of employment policies, and
gaining commitment.

This requires high levels of determination and competence at all levels

of management and a strong and effective HR function staffed by
business-oriented people. It may be difficult to meet these criteria,
especially when the proposed HRM culture conflicts with the established
corporate culture and traditional managerial attitudes and behavior.

6.2 The morality of HRM

HRM is accused by many academics of being manipulative if not

positively immoral. It was remarked that HRM operates as a form of
insidious ‘control by compliance’ when it emphasizes the need for
employees to be committed to do what the organization wants them to do.

It preaches mutuality but the reality is that behind the rhetoric it exploits
workers. It is a wolf in sheep’s clothing. The accusation that HRM treats
employees as means to an end is often made.

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7) The context of HRM

HRM processes take place within the context of the internal and
external environment of the organization. Therefore the HRM should be
viewed as an open system. An open system is dependent on the
environment for inputs, which are transformed during throughput
(process/ transformation) to produce outputs that are exchanged in the
environment.

The open HRM system can be defined as a competence model of

organizations. Skills and abilities are treated as inputs from the
environment; employee behaviors are treated as throughput; and
employee satisfaction and performance are treated as outputs.

Contextual factors

The contextual factors that influence HR policies and practices are the
external and internal environments of the organization.

7.1 The external environment

The external environment consists of social, political, legal and economic

developments and competitive pressures. Organizations are reacting to
this competition by becoming ‘customer-focused’, speeding up response
times, emphasizing quality and continuous improvement, accelerating the
introduction of new technology, operating more flexibly and ‘losing
cost’. This can be achieved through:
a. Outsourcing: the increasing use of virtual workspaces enabled by
communications and information technology makes it easy to contract for
many types of work anywhere in the world, at the lowest price.

b. Casualization of the Workforce: organizations are seeking people

who can adapt to its changing needs, so most organizations replaced part
of the permanent workforce by contingent workers. Employing casual
staff allows managers to control the number of workers to meet demand.

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Teleworking: it means working from a location other than the
organization's offices. It refers to working from home. Teleworking
emphasizes an easy communication among the organization's members.

7.2 The internal environment

The following aspects of the internal environment will affect HR policy
and practice:
a) The type of business or organization – private, public or voluntary
sector; manufacturing or service.
b) The size of the organization.
c) The age or maturity of the organization.
d) The technology or key activities of the business will determine how
work is organized, managed and carried out.
e) The type of people employed, e.g. professional staff, knowledge
workers, technicians, administrators, production workers, sales and
customer service staff.
f) The organization’s culture – the established pattern of values, norms,
beliefs, attitudes and assumptions that shape the ways in which people
behave and things get done.

8) The ethical dimension of HRM:

It means exercising social responsibility, i.e. being concerned for the

interests (wellbeing) of employees and acting ethically with regard to the
needs of people in the organization and the community. Within the
organization the requirement is to:

• Treat people equally in terms of the opportunities for employment,

learning and development provided for them.

• Treat people according to the principle of procedural justice (i.e. the

ways in which people are managed are fair, consistent, and transparent in
addition to properly consider the views and needs of employees).

• Treat people according to the principles of distributive justice (i.e.

rewards are distributed to them according to their contribution and they
receive what was promised to them.

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• Treat people according to the principles of natural justice (i.e.
individuals should know the standards they are expected to achieve and
the rules to which they are expected to conform.

• Avoid treating people as mere factors of production.

• Be concerned with the well-being of employees as well as the pursuit of

commercial gain.

• Offer as much security of employment as possible.

• Provide a working environment that protects the health and safety of

employees and minimizes stress.

• Act in the interests of providing a reasonable balance for employees

between their life and their work.

• Protect employees against harmful practices at work, e.g. bullying,

harassment and discrimination.

End of Chapter (1)

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