Learning Objectives • Explain what is meant by human resource management • Understand the relationship between human resource management and management • Describe the HR manager’s role • Understand the human resource management activities performed in organisations • Explain the meaning of strategy • Explain the meaning of strategic human resource management • Describe a strategic approach to human resource management • Appreciate the strategic challenges facing human resource management Chapter Outline This chapter introduces the concept of Human Resource Management (HRM) and its role within organisations. It is divided into several sections that describe the activities involved in HRM and the relationship between HRM and an organisation’s business strategy. The material contained in this chapter serves as the basis upon which the entire book is built.
What is Human Resource Management?
The focus of human resource management (HRM) is on managing people within the employer-employee relationship. It involves the productive use of people in achieving the organisation's strategic business objectives and the satisfaction of individual employee needs. HRM is a major contributor to the success of an enterprise because it is in a key position 'to affect customers, business results and ultimately shareholder value'. Ineffective HRM is a major barrier to employee satisfaction and organisation success.
HRM and Management
The purpose of HRM is to improve the productive contribution of people, and should therefore be related to all other aspects of management. There are two basic approaches to HRM: instrumental HRM - (or hard) approach that stresses the rational, quantitative and strategic aspects of managing human resources; and humanistic HRM - (or soft) approach that emphasises the integration of HR policies and practices with strategic business objectives, but recognises that competitive advantage is achieved by employees with superior know-how, commitment, job satisfaction, adaptability and motivation.
The new role of HR Managers
As HRM becomes more business oriented and strategically focused, four key roles for HR managers can be identified: • strategic partner – a strategic partner role requires the ability to translate business strategy into action. This role allows the HR manager to become part of the business team. • administrative expert – to become administrative experts HR professionals must be able to: re-engineer HR activities through the use of technology, rethinking and redesigning work processes and the continuous improvement of all organisational processes; see HR as creating value; and measure HR results in terms of efficiency (cost) and effectiveness (quality). • employee champion – The HR professional must be able to relate to and meet the needs of employees. • change agent – The HR manager needs to act as a change agent, serving as a catalyst for change within the organisation; by leading change in the HR function and by developing problem-solving communication and influence skills.
HRM involves the acquisition, development, reward and motivation, maintenance and departure of an organisation's human resources. To do this successfully HRM must do all of the following: • • • • • • • • • • • • Job analysis Human resource planning Employee recruitment Employee selection Performance appraisal Human resource development Career planning and development Compensation Benefits Industrial relations Health and safety programs Manage diversity
What is strategy? 'Strategy defines the direction in which an organisation intends to move and establishes the framework for action through which it intends to get there.' The purpose of strategy is to maintain a position of advantage by capitalising on the strengths of an organisation and minimising its weaknesses. To do this, an organisation must identify and analyse the threats and opportunities present...