The Concept of Human Resource Management - Coursework Example

Human Resource Management  Aim 1. Demonstrate your understanding of ‘what is HRM?’ 2. Use your own organisation (if you are working) or select one you know of (if you are not working for an organisation) as a case study. Discuss the key HRM functions in your chosen organisation. 3. Critically discuss how the identified political factors influence the effectiveness of your organisation’s HRM practices. Objectives 1. understand the concept of Integrated Human Resource Management Systems; 2. appreciate the need for human resource development; 3. relate the contributions of various HRM sub-systems to various development dimensions; and 4. Understand the principles in designing effective HRM systems. INTRODUCTION Development is acquisition of capabilities—capabilities that are needed to do the present job or the future expected job well. Development of human resources is essential for any organisation that would like to be dynamic and growth-oriented. Unlike other resources, human resources have rather unlimited potential capabilities. The potential can be used only by creating a climate that can continuously identify, bring to surface, nurture and use the capabilities of people. Human Resources Development Systems aim at creating such a climate. For convenience management scientists have categorised the competency requirements in organisational life into four categories—Technical Management Human and Conceptual. Educational psychologists further differentiate knowledge attitudes and skill components in each of these categories. Of these, knowledge components are developed with relative ease in classroom settings and with good reading habits. Attitudes and skills can be developed and strengthened mostly on the job. Mechanisms like performance appraisal, interpersonal feedback, counselling, potential development, career planning and development, organisational development, autonomous work groups, job-enrichment and training aim at developing such competencies in the employees. (AAKER DA. 2001. Developing business strategies. 6th edition. New York: Wiley.) QN. 1 Demonstrate your understanding of ‘what is HRM?’ In the past, organisations were content with 'training" as a mechanism of developing competencies. As organisations started realising the limitations of training in developing skill-based competencies, and the need for creating a "development climate" that can develop and harness the human resources, they began exploring other mechanisms. In fact it is this need for paying attention to other mechanisms of development that led many organisations to set up new departments of Human Resource Management. Human Resource Management (HRM) has gained increasing attention in the last decade from human resource specialists, training and development professionals, chief executives and line managers: Many dimensions of HRM have been integrated into research, training, and organisational design and change. Others are still being explored. In the next decade, there is likely to be a knowledge explosion in HRM. If trainers, researchers, and consultants are to utilise this knowledge effectively, they must understand the concepts behind HRM and how HRM systems work in and contribute to organisations. They must also understand the different mechanisms for Planning Personnel Function developing human resources and the links between them. This paper is an attempt to provide such understanding and also to present some considerations for designing HRM systems for organisations. (CRONJE GJ de J, DU TOIT GS & MOTLATLA MDC (Eds). 2004. Introduction to Business Management. 6th edition. Cape Town: Oxford.) THE CONCEPT OF HRM Human resource development in the organisation context is a process by which the employees of an organisation are helped, in a continuous and planned way, to: 1. Acquire or sharpen capabilities required to perform various functions associated with the present or future roles. 2. Develop their general capabilities as individuals and discover and exploit their own inner potentials for their own and/or organisational development purposes. 3. Develop an organisational culture in which supervisor-subordinate relationships, teamwork, and collaboration among sub-units are strong and contribute to the professional well being, motivation, and pride of employees. This definition of HRM is limited to the organisational context. In the context of a state or nation it would differ. HRM is a process, not merely a set of mechanisms and techniques. The mechanisms and techniques such as performance appraisal, counselling, training, and organisation development interventions are used to initiate, facilitate, and promote this process in a continuous way. Because the process has no limit, the mechanisms may need to be examined periodically to see whether they are promoting or hindering the process. Organisations can facilitate this process of development by planning for it, by allocating organisational resources for the purpose, and by exemplifying an HRM philosophy that values human beings and promotes their development.( Pulakos, E 2004, Performance Management: A roadmap for developing, implementing and evaluating human resource management systems, Society for Human Resource Management, United States of America.) THE NEED FOR HRM HRM is needed by any organisation that wants to be dynamic and growth-oriented or to succeed in a fast-changing environment. Organisations can become dynamic and grow only through the efforts and competencies of their human resources. Personnel policies can keep the morale and motivation of employees high, but these efforts are not enough to make the organisation dynamic and take it in new directions. Employee capabilities must continuously be acquired, sharpened, and used. For this purpose, an "enabling" organisational culture is essential. When employees use their initiative, take risks, experiment, innovate, and make things happen, the organisation may be said to have an "enabling" culture. Even an organisation that has reached its limit in terms of growth needs to adapt to the changing environment. No organisation is immune to the need for processes that help to acquire and increase its capabilities for stability and renewal. HRM MECHANISMS Goals, Subsystems and Beliefs The goal of HRM systems is to develop: The capabilities of each employee as an individual The capabilities of each individual in relation to his or her present role The capabilities of each employee in relation to his or her expected future role(s) The dyadic relationship between each employee and his or her supervisor The team spirit and functioning in every organisational unit (department, group, etc) Collaboration among different units of the organisation The organisation's overall health and self-renewing capabilities which, in turn, increase the enabling capabilities of individuals, dyads, teams, and the entire organisation To achieve these objectives, HRM systems may include the following process mechanisms or subsystems: Performance appraisal Potential appraisal and development Feedback and performance coaching Career planning Training Organisation development (OD) or research and systems development Rewards Employee welfare and quality of work life Human resources information All these process mechanisms are linked with corporate plans, particularly with human resources planning. These mechanisms are designed on the basis of the following beliefs: 1. Human resources are the most important assets in the organisation. 2. Unlike other resources, human resources can be developed and increased to an unlimited extent. 3. A healthy climate, characterised by the values of openness, enthusiasm, trust, mutuality, and collaboration, is essential for developing human resources. 4. HRD can be planned and monitored in ways that are beneficial both to the individual and to the organisation. 5. Employees feel committed to their work and organisation if the organisation perpetuates a feeling of "belonging". 6. Employees are likely to have this feeling if the organisation provides for their basic needs and for their higher needs through appropriate management styles and systems. 7. Employee commitment is increased with the opportunity to discover and use one's capabilities and potential in one's work. 8. It is every manager's responsibility to ensure the development and utilisation of the capabilities of subordinates, to create a healthy and motivating work climate, and to set examples for subordinates to follow. 9. The higher the level of the manager, the more attention should be paid to the HRMfunction in order to ensure its effectiveness. 10. The maintenance of a healthy working climate and the development of its human resources are the responsibilities of every organisation (especially the corporate management). QN. 2 Use your own organisation (if you are working) or select one you know of (if you are not working for an organisation) as a case study. Discuss the key HRM functions in your chosen organisation. Despite the obvious success my company SIDCO Manufacturing, over recent years the Managing Director is concerned with what she perceives to be differences between outlets in different parts of the country. She has provided the HR Manager with details of the current statistics, employee outputs, and details of sales in outlets and would like to analyse the data to see if HRM can identify any differences. In particular she is interested to see if there is any difference between the product ranges sold and the profits made in different parts of the country. She would like to see the results of the HR outputs and to formulate various HR strategies to improve the situation. STRATEGIES FOR EXPECTED RESULTS BY A HR MANAGER SIDCO Manufacturing is a company founded at the end of 1981 based at a single site in Sheffield, manufacturing and distribution of their products. From this modest start in 1981, the number and geographical spread of the customers have increased rapidly in part as a result of the company starting to sell directly to customers in 2003. The characteristic changes that take place at different stages can be seen from the following illustrations. As a HR Manager, I notice here the metamorphoses taking place in an organisation at every stage. It is in this background that I look at the critical problems faced at each stage by an entrepreneur and the broad strategies required. For the purpose of our discussion here, I start up with stabilisation strategies and growth and expansion strategies for improving the HR efficacy. Performance Appraisal Performance appraisal of some type is practiced in most organisations all over the world. A written assessment to which the employee has no chance to respond is still common in most countries, particularly in the developing countries. Many studies indicate that this type of appraisal serves no purpose. It is time that more organisations began to utilise the performance appraisal interview between the manager and the subordinate, during which the subordinate's strengths and weaknesses are discussed, concerns are shared, and the subordinate is given the opportunity to defend or improve any deficits in his or her performance. An HRM-oriented performance appraisal is used as a mechanism for supervisors to: 1. Understand the difficulties of their subordinates and try to remove these difficulties 2. Understand the strengths and weaknesses of their subordinates and help the subordinates to realise these 3. Help the subordinates to become aware of their positive contributions 4. Encourage subordinates to accept more responsibilities and challenges 5. Help subordinates to acquire new capabilities 6. Plan for effective utilisation of the talents of subordinates In HRM organisations, every supervisor has the responsibility to ensure the development of his or her subordinates in relation to the capabilities required to perform their jobs effectively. Generally, the supervisor schedules individual meetings with each employee to discuss the employee's performance, communicate the performance areas that need attention, and jointly establish areas to be worked on or goals to be achieved by the next scheduled discussion.( Pulakos, E 2004, Performance Management: A roadmap for developing, implementing and evaluating human resource management systems, Society for Human Resource Management, United States of America.) Such performance appraisal interviews may be scheduled every three months or once or twice a year. Goals and objectives that have been agreed upon in each meeting are reviewed in the next meeting. During this review, the supervisor attempts to understand the difficulties of the subordinate and to identify his or her developmental needs. Before each review, the employee is prepared for the discussion through self-assessment, identifying factors that have contributed to his or her performance and factors that have hindered it, as well as the types of support that he or she needs from the supervisor or others in order to do better in the next period. The supervisor also prepares for the meeting by listing observations, problems, suggestions, and expectations. During the appraisal meeting, the supervisor and the subordinate share their observations and concerns. Each responds to the subjects raised by the other. Such discussions help to develop mutual understanding, and the data generated are reported to the higher management and is used in making decisions about individual employee development as well as developmental needs of the work group or the entire organisation. Potential Appraisal and Development In organisations that subscribe to HRM, the potential (career-enhancement possibilities) of every employee is assessed periodically. Such assessment is used for developmental planning as well as for placement. It is assumed under this system that the company is growing continuously. It may be expanding in scale, diversifying its operations, introducing technological changes, or entering new markets. A dynamic and growing organisation needs to continually review its structure and systems, creating new roles and assigning new responsibilities. Capabilities to perform new roles and responsibilities must continually be developed among employees. The identification of employee potential to ensure the availability of people to do different jobs helps to motivate employees in addition to serving organisational needs. Every year or two, the supervisor of a group of employees assesses the potential of each of them to perform different (usually higher level) functions on the basis of the supervisor's observations and experiences during that period. Of course, many supervisors see their subordinates doing only those jobs to which they are assigned. The ideal way to judge a person's potential would be to try the person on each job for which his potential is being assessed. This is not feasible in most organisations, so simulation activities are prepared to provide some information about the potential of employees in specific areas. Any employee can request such assessment. It should be clear whether or not there is a position available in the company to which the employee could be transferred or promoted. Feedback and Performance Coaching Knowledge of one's strengths helps one to become more effective, to choose situations in which one's strengths are required, and to avoid situations in which one's weaknesses could create problems. This also increases the satisfaction of the individual. Often, people do not recognise their strengths. Supervisors in an HRM system have the responsibility for ongoing observation and feedback to subordinates about their strengths and their weaknesses, as well as for guidance in improving performance capabilities. Career Planning The HRM philosophy is that people perform better when they feel trusted and see meaning in what they are doing. In the HRM system, corporate growth plans are not kept secret. Long-range plans for the organisation are made known to the employees. Employees are helped to prepare for change whenever such change is planned; in fact, the employees help to facilitate the change.-Major changes are discussed at all levels to increase employee understanding and commitment. Most people want to know the possibilities for their own growth and career opportunities. Because managers and supervisors have information about the growth plans of the company, it is their responsibility to transmit information to their subordinates and to assist them in planning their careers within the organisation. Of course, the plans may not become reality, but all are aware of the possibilities and are prepared for them.( Pulakos, E 2004, Performance Management: A roadmap for developing, implementing and evaluating human resource management systems, Society for Human Resource Management, United States of America.) Training Training is linked with performance appraisal and career development. Employees generally are trained on the job through special in-house training programmes. For some employees (including managers), outside training may be utilised to enhance, update, or develop specific skills. This is especially valuable if the outside training can provide expertise, equipment, or sharing of experiences that are not available within the organisation. In-house training programmes are developed by in-house trainers or consultants hired for the task, and periodic assessments are made of the training needs within the organisation. The effects of all training programmes are monitored-and added to the data concerning training needs. Managers and employees wh6 attend in-house or outside training events are also expected to submit proposals concerning any changes they would like to suggest on the basis of their new knowledge. The training received by employees is thus utilised by the organisation. Organisation Development (OD) This function includes research to ascertain the psychological health of the organisation. This is generally accomplished by means of periodic employee surveys. Efforts are made to improve organisational health through various means in order to maintain a psychological climate that is conducive to productivity. The OD or systems experts also help any department or unit in the company that has problems such as absenteeism, low production, interpersonal conflict, or resistance to change. These experts also revamp and develop various systems within the organisation to improve their functioning. Rewards Rewarding employee performance and behaviour is an important part of HRM. Appropriate rewards not only recognise and motivate employees, but also communicate the organisation's values to the employees. In HRM systems, innovations and use of capabilities are rewarded in order to encourage the acquisition and application of positive attitude and skills. Typical rewards include certificates of appreciation, newsletter announcements, and the increase in salary bonuses, special privileges, and desired training. Promotions are generally not considered as rewards because promotion decisions are based on appraisals of potential whereas most rewards are based on performance. Rewards may be given to individuals as well as to teams, departments, and other units within the organisation. The desire for achievement is evident when employees try hard to learn a particular skill set. Affiliate motives become important when they recognize that value of the support and friendship of their mates. The motivation towards influence can be seen in the employees who strive to have more control over their learning and it can be seen also in them who strive to have their say in the way they perform. EMPLOYMENT ACTIVITY  MOTIVATION PROCESS BEHAVIOURAL CHANGE Employee Welfare and Quality of Work Life Employees at lower levels in the organisation usually perform relatively monotonous tasks and have fewer opportunities for promotion or change. This is particularly true in developing countries. In most countries, many employees belong to trade unions. In order to maintain their work commitment and motivation, the organisation must provide some welfare benefits such as medical insurance, disability insurance, and holidays and vacations. Quality-of-work-life programmes generally focus on the environment within the organisation and include: basic physical concerns such as heating and air conditioning, lighting, and safety precautions; additional physical amenities such as food and beverage facilities, recreation, and aesthetics; and psychological and motivational factors such as flexible work hours, freedom to suggest changes or improvements, challenging work, and varying degrees of autonomy. HRM systems focus on employee welfare and quality of work life by continually examining employee needs and meeting them to the extent feasible. Job-enrichment programmes, educational subsidies, recreational activities, health and medical benefits, and the like generate a sense of belonging that benefits the organisation in the long run. By using all the HR strategies, the HR manager was able to improve the output in SIDCO Manufacturing Co. Ltd. QN. 3 Critically discuss how the identified political factors (through your study of Modules 1-6) influence the effectiveness of your organisation’s HRM practices. MANAGEMENT AND POLITICS Politics spoil work culture –this is the version as far as the management is concerned. But in the employees’ view point it is a necessity. In fact, it is a necessity; it causes some sort of indifferent approach towards strategic decision formulations especially in human resource management. With the advent of large-scale modern industries, trade unions too have become large, complex and impersonal. Although union and management are two different entities, they possess some similar characteristics in their structure and functioning. Trade unions also require their members to identify their objectives with those of the union. The individual's interests are to be integrated to suit the larger interests of the group to which he belongs. Depending upon the constituency, background and backing, the unions may take a partisan stand. Alienation of the employee today refers not merely to alienation from management, but also the union. Mergers, acquisitions, takeovers, concentration and monopoly are peculiar not merely to big business houses and industrial managements, but also to trade unions and trade union leadership. Capturing trade unions has become the 'in-thing' for the new breed of entrepreneurs in the trade union field. They need not go through the rigours of starting from scratch but can capture a union at the ripe time. That such capturing has become easy and simple speaks volumes about the vulnerability of the unions. Some union leaders 'own' and control the affairs of a couple of hundred unions each and have virtual monopoly over labour markets in some industrial centres. They resort to or encourage restrictive practices and wield vast muscle power to paralyse civic life and throttle economic activity. The unions harp on freedom and participation. But, there is little internal democracy in the functioning of most unions. Delegation and decentralisation and more important, sharing of information and proper communication are much less possible in most trade unions than most industrial enterprises. Even among the principal office-bearers of the same union there is often inadequate communication. Workers' participation in the management of their unions, and more important, the participation of even the office-bearers of the unions in their union matters is often woefully lacking. This is just as managements wail over the fact that they themselves are not ordinarily involved in management.(DRUCKER F. 2003. Management challenges for the 21st century. Oxford: Butterworth-Heinemann.) In all part of the world, overt and covert involvement of trade unions in politics is discernible. The nature, form and extent of involvement may, however, vary depending upon the economic system stage of development and socio-cultural and other aspects. The Indian situation is rather peculiar. All over the world,, unions are bound up in Management and politics much too glaringly and palpably. Many of the union demands are also directed against the Management for several reasons: first, the Management, being a Welfare State with commitment to a socialist pattern of the firm, assumed a major role for the protection and welfare of workers and enacted a plethora of legislation. The many loopholes in legislation and persistent weaknesses and inadequacies of administration were responsible for the growing dissatisfaction with Management. In the context of ever-increasing expectations within a dependent socio-cultural framework, the unions often expect and demand the Management to bridge the gap. At the same time, both the unions and management oppose any initiative if they seem to impinge upon their autonomy or affect their sectional interests. With the result, today much of what unions do and want is determined by the Government. Secondly, trade unions were largely organised by nationalist leaders, many of whom directed the workers against the management. Today in the federal set-up, one finds all unions being more vocal in States. Unions owing affiliations to other political parties turn their members' dissatisfaction against the Governments everywhere. Thirdly, though the Government professes its commitment to collective bargaining, in practice the main thrust was decisively towards compulsory arbitration. Reference 1. AAKER DA. 2001. Developing business strategies. 6th edition. New York: Wiley. 2. AHIAKPOR JCW. 1998. On the mythology of the Keynesian Multiplier. [Internet: http://www.geocities.com/ecocorner/intelarea/jmk7.htm;] 3. ANTHONY RN & GOVINDARAJAN V. 2003. 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