Human resource management
Overview
 
Human Resource Management (HRM, HR) is the management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 of an organization's employees. While human resource management is sometimes referred to as a "soft" management skill, effective practice within an organization requires a strategic focus to ensure that people resources can facilitate the achievement of organizational goals. Effective human resource management also contains an element of risk management for an organization which, as a minimum, ensures legislative compliance.
Fundamentally, human resource management is based on the assumption that employees are individuals with varying goals and needs.
Encyclopedia
Human Resource Management (HRM, HR) is the management
Management
Management in all business and organizational activities is the act of getting people together to accomplish desired goals and objectives using available resources efficiently and effectively...

 of an organization's employees. While human resource management is sometimes referred to as a "soft" management skill, effective practice within an organization requires a strategic focus to ensure that people resources can facilitate the achievement of organizational goals. Effective human resource management also contains an element of risk management for an organization which, as a minimum, ensures legislative compliance.

Origins

Fundamentally, human resource management is based on the assumption that employees are individuals with varying goals and needs. Human resources should not be categorized with basic business resources (trucks, filing cabinets, etc.).

Practicing good human resource management (HRM) enables managers of an enterprise to express their goals with specificity, increasing worker comprehension of goals, and provide the necessary resources to promote successfully accomplishment of said goals. When HRM is properly employed members of the workforce are expressive of the goals and operating practices of the firm.

HRM is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce, and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organisations.

Synonyms such as personnel management are often used in a more restricted sense to describe activities that are necessary in the recruiting of a workforce, providing its members with payroll and benefits, and administrating their work-life needs. Torrington and Hall (1987) define personnel management as being:

“a series of activities which: first enable working people and their employing organisations to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled" (p. 49).

While Miller (1987) suggests that HRM relates to:

".......those decisions and actions which concern the management of employees at all levels in the business and which are related to the implementation of strategies directed towards creating and sustaining competitive advantage" (p. 352).

Human resource management is sometimes referred to as:
  • Organizational management
  • Personnel administration
  • Manpower management
  • Human capital management
  • Industrial management

Academic theory

Research in the area of HRM has much to contribute to the organizational practice of HRM. For the last 20 years, empirical work has paid particular attention to the link between the practice of HRM and organizational performance, evident in improved employee commitment, lower levels of absenteeism and turnover, higher levels of skills and therefore higher productivity, enhanced quality and efficiency. This area of work is sometimes referred to as 'Strategic HRM' or SHRM (not to be confused with the Society for Human Resource Management
Society for Human Resource Management
The Society for Human Resource Management is a professional human resources association headquartered in Alexandria, Virginia. The largest such association in its field, SHRM promotes the role of HR as a profession and provides education, certification, and networking to its members while lobbying...

).

Within SHRM three strands of work can be observed: Best practice, Best Fit and the Resource Based View (RBV).

The notion of best practice – sometimes called 'high commitment' HRM – proposes that the adoption of certain best practices in HRM will result in better organizational performance. Perhaps the most popular work in this area is that of Pfeffer who argued that there were seven best practices for achieving competitive advantage through people and 'building profits by putting people first'. These practices included: providing employment security, selective hiring, extensive training, sharing information, self-managed teams, high pay based on company performance and the reduction of status differentials. However, there is a huge number of studies which provide evidence of best practices, usually implemented in coherent bundles, and therefore it is difficult to draw generalized conclusions about which is the 'best' way (For a comparison of different sets of best practices see Becker and Gerhart, 1996

Best fit, or the contingency approach to HRM, argues that HRM improves performance where there is a close vertical fit between the HRM practices and the company's strategy. This link ensures close coherence between the HR people processes and policies and the external market or business strategy. There are a range of theories about the nature of this vertical integration
Vertical integration
In microeconomics and management, the term vertical integration describes a style of management control. Vertically integrated companies in a supply chain are united through a common owner. Usually each member of the supply chain produces a different product or service, and the products combine to...

. For example, a set of 'life cycle' models argue that HR policies and practices can be mapped onto the stage of an organization's development or life cycle. Competitive advantage models take Porter's (1985) ideas about strategic choice and map a range of HR practices onto the organization's choice of competitive strategy. Finally 'configuration models' provide a more sophisticated approach which advocates a close examination of the organisation's strategy in order to determine the appropriate HR policies and practices. However, this approach assumes that the strategy of the organisation can be identified – many organisations exist in a state of flux and development.

The Resource Based View (RBV), argued by some to be at the foundation of modern HRM, focusses on the internal resources of the organisation and how they contribute to competitive advantage. The uniqueness of these resources is preferred to homogeneity and HRM has a central role in developing human resources that are valuable, rare, difficult to copy or substitute and that are effectively organized.

Overall, the theory of HRM argues that the goal of human resource management is to help an organization to meet strategic goals by attracting, and maintaining employees and also to manage them effectively. The key word here perhaps is "fit", i.e. a HRM approach seeks to ensure a fit between the management of an organization's employees, and the overall strategic direction of the company (Miller, 1989).

The basic premise of the academic theory of HRM is that humans are not machines, therefore we need to have an interdisciplinary examination of people in the workplace. Fields such as psychology
Psychology
Psychology is the study of the mind and behavior. Its immediate goal is to understand individuals and groups by both establishing general principles and researching specific cases. For many, the ultimate goal of psychology is to benefit society...

, industrial relations, industrial engineering, sociology
Sociology
Sociology is the study of society. It is a social science—a term with which it is sometimes synonymous—which uses various methods of empirical investigation and critical analysis to develop a body of knowledge about human social activity...

, economics
Economics
Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, and critical theories: postmodernism
Postmodernism
Postmodernism is a philosophical movement evolved in reaction to modernism, the tendency in contemporary culture to accept only objective truth and to be inherently suspicious towards a global cultural narrative or meta-narrative. Postmodernist thought is an intentional departure from the...

, post-structuralism
Post-structuralism
Post-structuralism is a label formulated by American academics to denote the heterogeneous works of a series of French intellectuals who came to international prominence in the 1960s and '70s...

 play a major role. Many colleges and universities offer bachelor and master degrees in Human Resources Management or in Human Resources and Industrial Relations.

One widely used scheme to describe the role of HRM, developed by Dave Ulrich
Dave Ulrich
David Olson Ulrich is a university professor, author, speaker, management coach, and management consultant. Ulrich is a professor of business at the Ross School of Business, University of Michigan and co-founder of ....

, defines 4 fields for the HRM function:
  • Strategic partner - Aligning HR and business strategy: ‘organisational diagnosis’
  • Administration Expert - Reengineering organisation processes: ‘shared services’
  • Employee champion - Listening and responding to employees: ‘providing resources to employees’
  • Change Agent - Managing transformation and change: ‘ensuring capacity for change’.

Business practice

Human resources management involves several processes. Together they are supposed to achieve the above mentioned goal. These processes can be performed in an HR department, but some tasks can also be outsourced or performed by line-managers or other departments. When effectively integrated they provide significant economic benefit to the company.
  • Workforce planning
    Workforce planning
    Workforce Planning is a continual process used to align the needs and priorities of the organisation with those of its workforce to ensure it can meet its legislative, regulatory, service and production requirements and organizational objectives...

  • Recruitment
    Recruitment
    Recruitment refers to the process of attracting, screening, and selecting qualified people for a job. For some components of the recruitment process, mid- and large-size organizations often retain professional recruiters or outsource some of the process to recruitment agencies.The recruitment...

     (sometimes separated into attraction and selection)
  • Induction, Orientation and Onboarding
    Onboarding
    Onboarding, also known as organizational socialization, refers to the mechanism through which new employees acquire the necessary knowledge, skills, and behaviors to become effective organizational members and insiders...

  • Skills management
    Skills management
    Skills management is the practice of understanding, developing and deploying people and their skills. Well-implemented skills management should identify the skills that job roles require, the skills of individual employees, and any gap between the two....

  • Training and development
    Training and development
    In the field of human resource management, training and development is the field which is concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings...

  • Personnel administration
  • Compensation in wage
    Wage
    A wage is a compensation, usually financial, received by workers in exchange for their labor.Compensation in terms of wages is given to workers and compensation in terms of salary is given to employees...

     or salary
    Salary
    A salary is a form of periodic payment from an employer to an employee, which may be specified in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is paid separately, rather than on a periodic basis....

  • Time management
    Time management
    Time management is the act or process of exercising conscious control over the amount of time spent on specific activities, especially to increase efficiency or productivity. Time management may be aided by a range of skills, tools, and techniques used to manage time when accomplishing specific...

  • Travel management (sometimes assigned to accounting rather than HRM)
  • Payroll
    Payroll
    In a company, payroll is the sum of all financial records of salaries for an employee, wages, bonuses and deductions. In accounting, payroll refers to the amount paid to employees for services they provided during a certain period of time. Payroll plays a major role in a company for several reasons...

     (sometimes assigned to accounting rather than HRM)
  • Employee benefits administration
  • Personnel cost planning
  • Performance appraisal
    Performance appraisal
    A performance appraisal, employee appraisal, performance review, or development discussion is a method by which the job performance of an employee is evaluated typically by the corresponding manager or supervisor. A performance appraisal is a part of guiding and managing career development...

  • Labor relations
    Labor relations
    Industrial relations is a multidisciplinary field that studies the employment relationship. Industrial relations is increasingly being called employment relations because of the importance of non-industrial employment relationships. Many outsiders also equate industrial relations to labour relations...



HRM strategy

An HRM strategy pertains to the means as to how to implement the specific functions of Human Resource Management. An organization's HR function may possess recruitment and selection policies, disciplinary procedures, reward/recognition policies, an HR plan, or learning and development policies, however all of these functional areas of HRM need to be aligned and correlated, in order to correspond with the overall business strategy. An HRM strategy thus is an overall plan, concerning the implementation of specific HRM functional areas.

An HRM strategy typically consists of the following factors:-
  • "Best fit" and "best practice" – meaning that there is correlation between the HRM strategy and the overall corporate strategy. As HRM as a field seeks to manage human resources
    Human resources
    Human resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations...

     in order to achieve properly organizational goals, an organization's HRM strategy seeks to accomplish such management by applying a firm's personnel needs with the goals/objectives of the organisation. As an example, a firm selling cars could have a corporate strategy of increasing car sales by 10% over a five year period. Accordingly, the HRM strategy would seek to facilitate how exactly to manage personnel in order to achieve the 10% figure. Specific HRM functions, such as recruitment and selection, reward/recognition, an HR plan, or learning and development policies, would be tailored to achieve the corporate objectives.

  • Close co-operation (at least in theory) between HR and the top/senior management, in the development of the corporate strategy. Theoretically, a senior HR representative should be present when an organization's corporate objectives are devised. This is so, since it is a firm's personnel , or provide a service. The personnel's proper management is vital in the firm being successful, or even existing as a going concern. Thus, HR can be seen as one of the critical departments within the functional area of an organization.

  • Continual monitoring of the strategy, via employee feedback, surveys, etc.


The implementation of an HR strategy is not always required, and may depend on a number of factors, namely the size of the firm, the organizational culture within the firm or the industry that the firm operates in and also the people in the firm.

A HRM strategy can be divided, in general, into two facets – the people strategy and the HR functional strategy. The people strategy pertains to the point listed in the first paragraph, namely the careful correlation of HRM policies/actions to attain the goals laid down in the corporate strategy. The HR functional strategy relates to the policies employed within the HR functional area itself, regarding the management of persons internal to it, to ensure its own departmental goals are met.HRM strategies can also be depicted in the form of models. The best fit strategies relate to Hard HRM model and people centric strategies relate to Soft HRM strategies.

Hard HRM

The Hard human resource management model or strategic fit model is a model with an epitome of utilizing the people working in the organization as any other resource of the organization. This model emphasize on the usage of the people working in the organization in the same manner as any other resources are used. It enunciates the concept that people should be hired cheaply and must be brewed and made to work as fully as possible. The essence of the hard model approach is the synergy between the organizational strategies and human resource management.People are visualized as a submissive resource and are managed and controlled by a logical approach to make assure the optimal utilization of the people for the attainment of the competitive advantage.

Soft HRM

The epitome of the soft model of human resource management is the creation of a strategic relationship between the employees and the organization.The soft model emphasizes on the interests of distinctive organization’s stakeholders and the mapping of organization’s goals with the stakeholders’ interests.The theme of soft human resource management model is that people are intangible assets as this valuable resource can not be transacted in terms of selling and buying and their value is beyond the traditional financial codes.People working in the organization are treated in a unique manner as compare to the other resources in the organization.
Soft human resource management essence is the mutual admiration between organization and employees. Soft human resource management concentrates on the humanist side of human resource management which has an epitome of people motivation by buying their inputs on vital decisions and encouraging the team work within the organization.

Careers and education

Several universities offer programs of study pertaining to HRM and broader fields. Cornell University
Cornell University
Cornell University is an Ivy League university located in Ithaca, New York, United States. It is a private land-grant university, receiving annual funding from the State of New York for certain educational missions...

 created the world's first school for college-level study in HRM (ILR School
Cornell University School of Industrial and Labor Relations
The New York State School of Industrial and Labor Relations is an industrial relations school at Cornell University, an Ivy League university located in Ithaca, New York, USA...

). University of Illinois at Urbana-Champaign
University of Illinois at Urbana-Champaign
The University of Illinois at Urbana–Champaign is a large public research-intensive university in the state of Illinois, United States. It is the flagship campus of the University of Illinois system...

 also now has a school dedicated to the study of HRM, while several business schools also house a center or department dedicated to such studies; e.g., University of Wisconsin-Madison, University of Minnesota
University of Minnesota
The University of Minnesota, Twin Cities is a public research university located in Minneapolis and St. Paul, Minnesota, United States. It is the oldest and largest part of the University of Minnesota system and has the fourth-largest main campus student body in the United States, with 52,557...

, Michigan State University
Michigan State University
Michigan State University is a public research university in East Lansing, Michigan, USA. Founded in 1855, it was the pioneer land-grant institution and served as a model for future land-grant colleges in the United States under the 1862 Morrill Act.MSU pioneered the studies of packaging,...

, Ohio State University
Ohio State University
The Ohio State University, commonly referred to as Ohio State, is a public research university located in Columbus, Ohio. It was originally founded in 1870 as a land-grant university and is currently the third largest university campus in the United States...

, Roosevelt University
Roosevelt University
Roosevelt University is a coeducational, private university with campuses in Chicago, Illinois and Schaumburg, Illinois. Founded in 1945, the university is named in honor of both former President Franklin Delano Roosevelt and First Lady Eleanor Roosevelt. The university's curriculum is based on...

, Lindenwood University
Lindenwood University
Lindenwood University, often referred to as Lindenwood or LU, is a private, coeducational, liberal arts university located in Saint Charles, Missouri, United States...

, and Purdue University
Purdue University
Purdue University, located in West Lafayette, Indiana, U.S., is the flagship university of the six-campus Purdue University system. Purdue was founded on May 6, 1869, as a land-grant university when the Indiana General Assembly, taking advantage of the Morrill Act, accepted a donation of land and...

.

There are both generalist and specialist HRM jobs. There are careers involved with employment, recruitment and placement and these are usually conducted by interviewers, EEO (Equal Employment Opportunity) specialists or college recruiters. Training and development specialism is often conducted by trainers and orientation specialists. Compensation and benefits tasks are handled by compensation analysts, salary administrators, and benefits administrators.

Professional organizations

The main Professional organizations in HRM include the Society for Human Resource Management
Society for Human Resource Management
The Society for Human Resource Management is a professional human resources association headquartered in Alexandria, Virginia. The largest such association in its field, SHRM promotes the role of HR as a profession and provides education, certification, and networking to its members while lobbying...

, the Australian Human Resources Institute (AHRI), the Chartered Institute of Personnel and Development
Chartered Institute of Personnel and Development
The Chartered Institute of Personnel and Development is Europe's largest professional institute for people management and development. It is located in Wimbledon, London, England. The organisation has over 135,000 members across 120 countries, and achieved chartered status in 2000...

 (CIPD.

Functions

The Human Resources Management (HRM) function includes a variety of activities, and key among them is deciding the staffing needs of an organization and whether to use independent contractors or hire employees to fill these needs, recruiting and training the best employees, ensuring they are high performers, dealing with performance issues, and ensuring your personnel and management practices conform to various regulations. Activities also include managing your approach to employee benefits and compensation, employee records and personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these activities themselves because they can't yet afford part- or full-time help. However, they should always ensure that employees have—and are aware of—personnel policies which conform to current regulations. These policies are often in the form of employee manuals, which all employees have.

Note that some people distinguish a difference between HRM (a major management activity) and HRD (Human Resource Development, a profession). Those people might include HRM in HRD, explaining that HRD includes the broader range of activities to develop personnel inside of organizations, including, e.g., career development, training, organization development, etc.

There is a long-standing argument about where HR-related functions should be organized into large organizations, e.g., "should HR be in the Organization Development department or the other way around?"

The HRM function and HRD profession have undergone major changes over the past 20–30 years. Many years ago, large organizations looked to the "Personnel Department," mostly to manage the paperwork around hiring and paying people. More recently, organizations consider the "HR Department" as playing an important role in staffing, training and helping to manage people so that people and the organization are performing at maximum capability in a highly fulfilling manner.

See also

  • Nomenclature
    Nomenclature
    Nomenclature is a term that applies to either a list of names or terms, or to the system of principles, procedures and terms related to naming - which is the assigning of a word or phrase to a particular object or property...

  • Human resources
    Human resources
    Human resources is a term used to describe the individuals who make up the workforce of an organization, although it is also applied in labor economics to, for example, business sectors or even whole nations...

  • Human resource development (HRD)
  • Enterprise Feedback Management
    Enterprise Feedback Management
    Enterprise feedback management is a system of processes and software that enables organizations to centrally manage deployment of surveys while dispersing authoring and analysis throughout an organization...

     (EFM)
  • E-HRM
    E-HRM
    E-HRM is the application of information technology for both networking and supporting at least two individual or collective actors in their shared performing of HR activities....

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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