HR as a Source of Shareholder Value

Topics: Human resource management, Human resources, Management Pages: 10 (2181 words) Published: February 28, 2013
HR as a Source of Shareholder Value

Companies with the best people management deliver nearly twice as much value to shareholders as their average competitors - Watson Wyatt Consultants

What is HRM ?
• Human resource management is the management of an organization's workforce, or human resources. It is responsible for the attraction, selection, training, assessment, and rewarding of employees, while also overseeing organizational leadership and culture, and ensuring compliance with employment and labour laws. In circumstances where employees desire and are legally authorized to hold a collective bargaining agreement, HR will typically also serve as the company's primary liaison with the employees' representatives. The human resource management traditional approach focuses on personnel functions such as recruitment, performance appraisals, payroll administration, and the like, with some employee-centric development initiatives such as training and development interventions, motivation initiatives

Traditional View of HRM
• Traditionally HRM was considered as Salaried model. The traditional approach the human resource management was designed according to industrial environment, applicable to blue-collared factory workers, is a controlled work atmosphere marked by narrow, rigid job definitions and detailed workplace rules and procedures.

Workers have much autonomy and deviating from the written policy and procedure attract disciplinary action, with discretion remaining an exclusive prerogative of management. The trade union dominates collective bargaining settlements define pay scales, and seniority decides promotion opportunities.

Traditional View of HRM
Focus on Functional Activities and Process Orientation  Human resource management traditional approaches focus on functional activities such as human resource planning, job analysis, recruitment and selection, maintaining employee relations, performance appraisals, compensation management, and training and development.  The traditional approach toward human resource management also focuses on establishing policies, procedures, contracts and guidelines, and attempts to drive employee performance and achieve organizational goals by making employees adhere to such carefully crafted documents.

Control Activities A major activity of a traditional human resource management approach is monitoring and supervision of the workforce to ensure compliance to the established rules, procedures, guidelines, and contracts.

Traditional view of HRM
 Reconciliation Between Management and Workforce A major role of traditional resource management is reconciling the interests of management and the workforce. The traditional approach presumes management and workers having distinct and conflicting goals and needs, with the goal of human resource managers being to effect a reconciliation to drive the organization.

 Traditional human resource management remains a staff function, and the exclusive responsibility of the human resource department

 HRM was considered as mainly a cost to the organization rather than any value adding function.

Current view point on HRM
• With the return to real-world economics after the unwinding of the 1990s and bursting of the 'tech' bubble HRM gained ground and considered as strategic function for the organization • New approach it is the quality of a company's people management that determines its real success or failure. • HRM develops and manages these people it can transform the crisis into opportunity.

Current view point on HRM
• Work Environment:
A safe and happy workplace makes the employees feel good about being there. Each one is given importance and provided the security that gives them the motivation and incentive to stay. This is usually achieved through internal surveys to find out whether they are satisfied and if not what they think needs to be changed.

Open Management:
Employees don’t...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Essay on HR compentency
  • Shareholder Value Added Essay
  • Shareholder Value Maximization Research Paper
  • Accounting: Shareholder Value Essay
  • Maximizing Shareholder Value Essay
  • Shareholder Value and the Financial Crisis Essay
  • HR Practice in Bangladesh Essay
  • Essay on Shareholder Value

Become a StudyMode Member

Sign Up - It's Free