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Control or capability? Human resource practices for a changing environment Issues paper
August 2006

This issues paper is a ‘work in progress’ and may be periodically updated in the course of the research program This issues paper was developed by the lead researcher in this research project, Professor Andy Smith, as part of the Consortium Research Program Supporting vocational education and training providers in building capability for the future. This program is funded by the Australian, state and territory governments through the Department of Education, Science and Training (DEST) and managed by the National Centre for Vocational Educational Research (NCVER).

Please send any comments to the lead researcher at asmith@csu.edu.au

Executive Summary
People are the assets on which competitive advantage is built, whether in the public or private sector, whether in the corporate world or in the world of education. In the words of the latest theory on human resource management, people are an “inimitable” asset. People and their skills are the one thing that competitor organisations cannot imitate. So human resource management and the practices associated with it have become accepted by managers in all forms of organisations as one of the most important strategic levers to ensure continuing success. This is true in vocational education and training as much as in any other sector. In recent years workforce development has become a key feature of the management of registered training organisations (RTOs) in the VET sector. The traditional emphasis of what used to be called “personnel management” was on the regulation of the management of people in organisations. This regulatory role was reinforced, particularly in Europe and Australia (less so in the USA) by increasing government regulation of employment conditions through legislation concerned with the conduct of industrial relations, discrimination, employment rights, health and safety and other employment conditions. In many organisations today, this older notion of personnel administration still holds sway with its emphasis on rules and regulation. Recent research has suggested that this tends to be the model traditionally adopted in the public VET system. But in the 1980s and 1990s, a different concept of human resource management began to gain ground. At the heart of the new approach was the belief that the management of people gives an organisation competitive advantage. This leads to a number of distinct differences between human resource management and personnel management. Firstly, human resource management is clearly not simply the province of the human resource manager. Line managers play a critical role in human resource management and, in fact, could be argued to be the main organisational exponents of people management. Secondly, human resource management is firmly embedded in business strategy. Unlike the personnel manager, the human resource manager is part of the top level strategic team in the organisation and human resource management plays a key role in the achievement of business success. Thirdly, the shaping of organisational culture is one of the major levers by which effective human resource management can achieve its objectives of a committed workforce. Thus, human resource management is concerned not only with the formal processes of the management of people but also with all the ways in which the organisational culture is established, reinforced and transmitted. Whilst many organisations within and outside the VET sector have yet to move wholly to this new model of human resource management, there is no doubt that most organisations are making the transition very quickly. Again, research suggests that TAFE institutes are moving this way and are in something of a transitional state. Some of the key elements of the new human resource management that may be observed in the VET sector include: • • • • • • much more careful selection and...
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