Management Consulting/developement management
discuss personnel management theories and role of leadership,motivation and coordination in personnel management
People are the heart of any organization. When people feel the organization is responsive to their needs and supportive of their goals, managers and leaders can count on their followers’ commitment and loyalty. Managers and leaders who are authoritarian or insensitive, who don’t communicate effectively, or who simply don’t care about their people can never be effective managers and leaders. The human resource manager and leader works on behalf of both the organization and its people, seeking to serve the best interests of both.
The job of the manager and leader is one of support and empowerment. Support takes a variety of forms: letting people know that they are important and that managers and leaders are concerned about them; listening to find out about their followers’ aspirations and goals; and, communicating personal warmth and openness. Human resource managers and leaders empower their followers through participation and openness as well as by making sure that they have the autonomy and the resources they need to do their jobs well. Human resource managers and leaders emphasize honest, two-way communication as a way to identify issues and resolve differences. They are willing to confront others when it is appropriate, but they try to do so in a spirit of openness and caring.
It has been said that the greatest assets of a service organisation are its human resources and that one of the most vital and essential tasks of management is to motivate that resource in order to maximise its performance and achieve corporate success (Redman and Wilkinson 2001, Hersey and Blanchard 1993, Mabey and Salaman 1995). Concepts and theories defining motivation are complex and inconclusive, however two that are at the cutting edge appear to be expectancy and self-efficacy. Whether these fit with the Human Resource Model is another matter, therefore in considering this question, this paper will also look at older, more established theories of motivation such as those from Maslow, Herzberg and others
What Are the Major Objectives of Human Resources Theory?
HR theory takes into account the major objectives of managing employees.
Human resources theory is a general term for the strategies, tactics and objectives used by business owners and managers to administer policies and procedures related to employees. While the specific HR objectives will vary between organizations depending on their particular needs and composition of the workforce, there are several major, overarching objectives that are generally seen to be important.
One of the most important objectives of human resources theory, but perhaps one that is often overlooked, is the HR role in managing cost-effectiveness for the organization. While the finance and accounting function of a business is ultimately responsible for balancing the budget and controlling expenses, HR policies play a large role in managing the business's outgoing costs. When hiring employees, a business should be cognizant that its pay rates are competitive in order to attract skilled workers, but that they are not excessive and therefore end up costing the company more than they should. Part of managing this process is working to minimize staff turnover, because the recruitment and hiring of employees takes valuable time and money away from the business. The HR function can also measure the cost-effectiveness of employee benefit programs, the availability of training and the efficiency of the time employees take to complete their jobs. All of these areas indirectly impact the company's bottom line.
Part of the organization's focus on effectiveness and efficiency can be controlled through the second major objective of human resources theory: leveraging employee potential. HR managers and business owners should work to ensure that employees have an achievable workload. This is about balancing two competing priorities -- making sure that the employee isn't overwhelmed but also making sure that the employee has enough to do so that she isn't wasting company time. As such, HR has to work to not over-stretch the staff and at the same time not under-utilize its most valuable resource: its people.
Closely related to leveraging potential is HR's objective of matching the company's needs to the employees' skills and career objectives. This is sometimes called "workforce planning," because the business works to put the right person in the right job at the right time. This can be challenging in smaller businesses where one person might be asked to take on a number of different roles. However, effective recruitment to match the needs of the organization can normally work to solve this problem. If the company needs someone with skills in technology, customer service and accounting, then it must recruit such as person or otherwise be willing to train someone on those diverse areas. Indeed, training programs, both on- and off-site, can help to cover skills gaps and to educate employees on new trends and technologies.
Maintaining Good Relationships
A final objective for human resources theory is in maintaining good relationships between the organization's stakeholders. Stakeholders are anyone who has a vested interest in the business's success, including the owner, managers, employees and customers. Open and positive communication must be the hallmark of maintaining good working relationships and this depends on timely responses to both successes and failures within the workplace. Managers should be sensitive to employee needs and problems and in turn employees should be sensitive to customer wants and needs. All of this has to be balanced with a respect for labor laws and anti-discrimination policies which govern workplace relations. The HR function has an important role to play here as the repository of the legal and social regulations to which stakeholders must adhere.
HRM Management theory
The human relations and human factors approaches were absorbed into a broad behavioural
science movement in the 1950s and 1960s. This period produced some influential theories on
the motivation of human performance. For example, Maslow’s hierarchy of needs provided
an individual focus on the reasons why people work. He argued that people satisfied an
ascending series of needs from survival, through security to eventual ‘self-actualization’.
In the same period, concepts of job design such as job enrichment and job enlargement
were investigated. It was felt that people would give more to an organization if they gained
satisfaction from their jobs. Jobs should be designed to be interesting and challenging to gain
the commitment of workers – a central theme of HRM.
By the 1970s most managers participating in formal management training were aware of:
Theory X and Theory Y (McGregor, 1960); of Maslow and Herzberg’s motivation theories;
and knew where they should be in terms of the managerial grid (Blake and Mouton, 1964).
These theorists advocated participative, ‘soft’ approaches to management. However, only a
minority of managers in the USA received such training, with even fewer in other countries.
Most operational managers concerned with production, engineering, or distribution, had
worked their way up from low-level jobs: they were probably closer in spirit to F.W. Taylor
than the theorists of the 1950s and 1960s. This contrasted with personnel departments with
a higher proportion of people who had received academic training; additionally, ‘personnel’
was an area where women were prevalent – as opposed to production which was male
dominated. Were women naturally more open to human relations concepts than men?
In the UK, the influence of industrial psychology persisted in Alec Rodger’s slogan ‘fitting
the man to the job and the job to the man’. Holloway (1991) quotes from a student handout
issued by Rodger in the 1970s (which appears to ignore the concept of the working woman):
Fitting the man to the job
_ through occupational guidance
_ personnel selection
_ training and development.
Fitting the job to the man
_ through methods design
_ equipment design
_ design and negotiation of working conditions and
_ (physical and social) rewards.
Management by objectives
Based on work by Drucker in the 1950s, and further developed by McGregor, management
by objectives (MBO) linked achievement to competence and job performance.
MBO primarily focused on the individual, tying rewards and promotion opportunities to
specific agreed objectives, measured by feedback from performance assessment.
Individual managers were given the opportunity to clarify the purposes of their jobs and
set their own targets. MBO developed into modern performance management schemes
and performance-related pay.
Many researchers found difficulty in applying academic theories to real organizations.
The socio-technical school developed models of behaviour and performance which took
Key management theories
into account contingency variables, or ‘it depends’ circumstances, found in particular
work situations . They argued that employees
were part of a system that also included the equipment and other resources utilized by
an organization. The system could not function optimally unless all its components –
human and non-human – had been considered. The HRM concepts of coherence and
integration derive, in part, from this line of thought.
Also drawn from the long tradition of organizational theory, organizational development
(OD) offered a pragmatic approach to change. Theory and practice were mixed in
a tentative process called ‘action research’. Organizational development familiarized
managers with the idea that changes in processes, attitudes and behaviour were possible
and that organizations should be thought of as whole entities.
Directing people to achieve strategic objectives so that individual goals are tied to the
business needs of the whole organization, strategic management has become a dominant
framework for organizational thinking since World War II. It is based on concepts
first used for large-scale military and space programmes in the USA. Frequently, it
employs project and team-based methods for planning and implementation. Lately,
internal (including human) resources and key competencies have been identified as
crucial elements of long-term competitive success. Strategic management has become
the major unifying theme of undergraduate and (especially) postgraduate business
courses. The concern with strategy is said to distinguish HRM from personnel management.
Many writers have concluded that a visionary leader is essential, particularly in developing
and inspiring teams. McGregor’s (1960) The Human Side of Enterprise linked
leadership and management style to motivation. McGregor expressed the contrast
between authoritarian people management (‘Theory X’) and a modern form based on
human relations ideas (‘Theory Y’). His ideas parallel ‘hard’ and ‘soft’ HRM. Effective
managers do not need to give orders and discipline staff, they draw the best from their
people through encouragement, support and personal charisma. Later authors (such as
Peters and Waterman, 1982) featured the leader’s vision and mission as a quasireligious
means of galvanizing worker commitment and enthusiasm.
Deal and Kennedy (1982) popularized the belief that organizational effectiveness
depends on a strong, positive corporate culture. They combined ideas from leadership
theory and strategic management with prevailing beliefs about Japanese business success.
Managers were exhorted to examine their existing organizational climates critically
and work to change them into dynamic and creative cultures. The excellence
movement inspired by Peters and Waterman (In Search of Excellence, 1982, and others)
has been particularly influential with practising managers, despite criticisms of the
research on which it was based.
Some people believe that managing people is just a matter of commonsense. What
benefits can human resource specialists gain from the concepts and theories
Development of the personnel specialism
Personnel management has been a recognized function in the USA since NCR opened a personnel
office in the 1890s. American personnel managers worked within a unitarist tradition,
identifying closely with the objectives of their organization (Key concept 1.3). It was natural
for HRM to emerge comparatively smoothly from this perspective.
In other countries, the personnel management function arrived more slowly and came via
a number of routes. Moreover, its orientation was not entirely managerial. In the UK, for
example, its origins can be traced to the ‘welfare officers’ employed by Quaker-owned companies
such as Cadbury. At an early stage it became evident that there was an inherent conflict
between their activities and those of line managers. They were not seen to have a
philosophy compatible with the worldview of senior managers. The welfare officer orientation
placed personnel management as a buffer between the business and its employees. In
terms of ‘organizational politics’ this was not a politically viable position for individuals wishing
to further their careers, increase their status and earn high salaries.
Tyson (1989) distinguished between three ‘types’ of personnel management jobs:
_ ‘Clerk of works’: The majority, involved in the routine of administration, recordkeeping,
letter-writing, setting up interviews and welfare matters. Reports to personnel
or senior line manager.
_ ‘Contracts manager’: Likely to be found in large organizations with formal industrial
relations structures. Involved in detailed short-term policy-making and resolving
problems. A ‘fixer’ with some degree of influence on trade unions and senior
_ ‘Architect’: Probably highly qualified but not necessarily in ‘personnel’. Broad portfolio
with a significant strategic role. A business manager first and personnel manager
The second tradition – industrial relations – further compounded this distinction between
personnel and other managers. In the acrimonious industrial relations climate prevailing in
many developed countries throughout much of the 20th century, personnel/industrial relations
managers played an intermediary role between unions and line management. Their function
was legitimized by their role – or, at least, their own perception of that role – as ‘honest
But from the 1980s onwards governments with a neo-liberal or free market orientation,
such as Mrs Thatcher’s administration in the UK, reined in union freedom severely. Overall,
there was a marked reduction in the importance of collective worker representation in many
English-speaking countries. The perceived importance of collective bargaining reduced as
managerial power increased. Trade union membership declined along with centralized pay
bargaining and other forms of collective negotiation – and with them, the importance of the
personnel manager with negotiating experience. The focus switched from the collective to
A managerialist stance which assumes that everyone in an organization is a member of a
team with a common purpose. It embodies a central concern of HRM – that an organization’s
people, whether managers or lower-level employees, should share the same objectives and
work together harmoniously. From this perspective, conflicting objectives are seen as negative
and dysfunctional. By definition it is the opposite of pluralism: the acceptance of several
alternative approaches, interests or goals within the same organization or society. Arguably,
in the field of HRM, unitarism represents a US tradition, whereas pluralism is more typical of
European attitudes towards people management.
the relationship between employer and individual employee. To support this change, a variety
of essentially individualistic personnel techniques were applied to achieve business goals.
These included performance measurement, objective setting, and skills development related
to personal reward.
As we can see from the list of functions in Table 1.1, personnel had become a well defined
but low status area of management by the 1980s. Practitioner Associations in industrialized
countries recruited members in increasing numbers, developed qualification structures and
attempted to define ‘best practice’. Although they drew on psychology and sociology, the
knowledge and practices they encouraged were largely pragmatic and commonsensical and
did not present a particularly coherent approach to people management. Moreover, in some
instances training and industrial relations were considered to be specialist fields outside mainstream
personnel management. Traditional personnel managers were accused of having a
Traditional personnel departments typically encompass functions such as:
Recruitment Advertising for new employees and liaising with employment
Selection Determining the best candidates from those who apply, arranging
interviews, tests, references and so on.
Promotion Running similar selection procedures to determine progression
within the organization.
Pay A minor or major role in pay negotiation, determination and
Performance assessment Coordinating staff appraisal and counselling systems to evaluate
individual employee performance.
Grading structures Comparing the relative difficulty and importance of functions as a
basis for pay or development,
Training and development Coordinating or delivering programmes to fit people for the roles
required by the organization now and in the future.
Welfare Providing or liaising with specialists in a staff-care or counselling role
for people with personal or domestic problems affecting their work.
Communication Providing an internal information service, perhaps in the form of a
staff newspaper or magazine, handouts, booklets and videos.
Employee relations Handling disputes, grievances and industrial action, often dealing
with unions or staff representatives.
Dismissal On an individual basis as a result of failure to meet requirements or
as part of a redundancy or closure exercise, perhaps involving large
numbers of people.
Personnel administration Record-keeping and monitoring legislative requirements, for example
related to equal opportunities.
Using Tyson’s classification of personnel work into ‘clerk of works’, ‘contracts manager’,
and ‘architect’, what role would each of these three types play in the functions listed in
narrow, functional outlook. For example, Storey (1989, p.5) commented that personnel
management ‘. . . has long been dogged by problems of credibility, marginality, ambiguity and
a “trash-can” labelling which has relegated it to a relatively disconnected set of duties – many
of them tainted with a low-status “welfare” connotation.’
In practice, the background and training of many personnel managers left them speaking
a different language from other managers and unable to comprehend wider business issues
such as business strategy, market competition, labour economics, and the roles of other organizational
functions – let alone balance sheets (Giles and Williams, 1991). The scene was set
for a reintegration of personnel management with wider trends in management thinking.
Like fashions in hairstyle and clothing, management ideas come and go. One year’s bestselling
management concept is soon overtaken by the next ‘big idea’. Significantly, however,
a consistent theme has prevailed for more than two decades: the most successful organizations
make the most effective use of their people – their human resources.
The emergence of HRM was part of a major shift in the nature and meaning of management
towards the end of the 20th century. This happened for a number of reasons. Perhaps
most significantly, as we will see in Part two of this book, major developments in the structure
and intensity of international competition forced companies to make radical changes in
their working practices .
From the 1970s onwards, managers in the industrialized countries felt themselves to be on
a roller coaster of change, expected to deliver improved business performance by whatever
means they could muster. Their own careers and rewards were increasingly tied to those
improvements and many were despatched to the ranks of the unemployed for not acting
quickly and imaginatively enough. Caught between the need to manage decisively and fear of
failure, managers sought credible new ideas as a potential route for survival.
The development of dynamic new economies in the Asia–Pacific region emphasized the
weakness in traditional Western – specifically, American – management methods. To meet
competition from East Asia, industries and organizations in older, developed countries were
forced to restructure. The Japanese, in particular, provided both a threat and a role model
that Eastern and Western companies tried to copy. Frequently, reorganized businesses in
Australasia, Europe, North America and South Africa adopted Japanese techniques in an
attempt to regain competitiveness. The term ‘Japanization’ came into vogue in the mid-1980s
to describe attempts in other countries to make practical use of ‘Japanese’ ideas and practices,
reinforced by the impact of Japanese subsidiaries overseas. Initially, the main interest lay in
forms of technical innovation and manufacturing methods such as ‘continuous improvement’
and ‘just-in-time’. And their ways of managing people also attracted attention.
Employees have rights and interests beyond pay. They are stakeholders along with members
of other recognizably separate groups or institutions with a special interest in an organization.
These include shareholders, managers, customers, suppliers, lenders and government.
Each group has its own priorities and demands and fits into the power structure controlling
the organization. Employees have limited importance in free market countries such as the
USA, UK, Ireland, Australia or Canada, in comparison with most European and many
Asian–Pacific countries. Notionally, shareholders are paramount in English-speaking countries.
In reality, top managers normally have effective control and pursue their own interests
– often at the expense of their staff.
Until 1868 Japan had been sealed from the outside world for 300 years. The sense of
being ‘different’ remains. Kobayashi (1992: p.18) comments that Japan has never set
out to be integrated into the international community. Rather, the country adapted
selective aspects of foreign cultures which seemed useful to its development. The
Japanese borrowed freely from Western ideas, both at the turn of the century, and
again during the period of reconstruction after World War II. However, Japanese industrialists
did not simply copy American management methods; they revitalized Asian
A key to Japanese industrial progress was the development of ‘Japan Incorporated’:
the close-knit cooperation between government and business. Specific industrial
sectors were targeted for long-term market penetration and dominance. Supposedly
competing businesses acted cooperatively at the expense of foreign firms, sacrificing
immediate profits for later success.
Economic problems hit the West increasingly from the 1970s onwards and Japan’s
growing industrial dominance became obvious. This stimulated a flow of influential writing
(for example, Ouchi, 1981; Pascale and Athos, 1981), leading to a continuing debate
on the applicability of Japanese management methods to other countries. Ironically,
Western managers have examined Japanese techniques just as intently as the Japanese
studied the West half a century ago. Developing countries in East Asia took Japan rather
than the USA as their model.
The term ‘Japanization’ came into vogue in the mid-1980s to describe attempts in
other countries to make practical use of ‘Japanese’ ideas and practices as well as the
impact of Japanese subsidiaries overseas. Japanese practice emphasized human
resources as an organization’s key asset. A key feature of Japanese businesses in the
1970s and 1980s was the emphasis on worker commitment, flexibility and development.
Books such as Pascale and Athos’ (1981) The Art of Japanese Management, highlighted
the competitive advantage which the Japanese gained through effective people management.
The message came through that ‘essentially, it is the human resource among
all the factors of production which really makes the difference’ (Storey, 2001: p.6).
Initially, the main interest lay in forms of technical innovation and manufacturing
methods such as ‘continuous improvement’ and ‘just-in-time’. More recently their ways
of managing people have attracted attention. People management became a central
strategic issue rather than a ‘necessary inconvenience’ (Goss 1994, p.4). The early component
ideas of HRM theory parallel elements of Japanese people management in that
period. But, whereas HRM is still a matter of rhetoric for most Western managers, the
Japanese viewed it as a way of life: an instrumental approach to ever-increasing efficiency
focused on employee commitment and skill. Traditionally, Japanese companies
placed the interests of their employees first amongst their stakeholders , followed by customers and lastly the shareholders. This is virtually the opposite
situation to that found in free market Western countries such as Australia, Canada,
the UK or the USA. But the recession of the 1990s forced a number of Japanese companies
to adopt Western ways.
The Japanese role model is a mixture of racial stereotyping, myth and reality. It is difficult
to tell when truth ends and myth begins. Foreign commentators encountering a
radically different culture tend to emphasize the points of difference rather than the
similarities. The Japanese were seen as workaholics, rarely taking holidays and eager
to work every available hour. They were conformists with a distinctive form of decisionmaking
based on consensus. They worked in teams and hated to be seen as individuals.
They searched for continuous improvement and were proud to be identified with their
employing organization. Large businesses offered slow but steady promotion paths and
life-long careers in return for total commitment.
The Japanese role model
From personnel to human resource management
Human resource management-type themes, including ‘human capital theory’ and ‘human asset accounting’ can be found in literature dating as far back as the
1970s. But the modern view of HRM first gained prominence in 1981 with its introduction
on the prestigious MBA course at Harvard Business School. The Harvard MBA provided a
blueprint for many other courses throughout North America and the rest of the world,
making its interpretation of HRM particularly influential
Simultaneously, other interpretations were being developed in
Michigan and New York.
These ideas spread to other countries in the 1980s and 1990s, particularly Australia, New
Zealand, parts of northern Europe – especially the UK, Ireland and Scandinavia – and also
South and South-East Asia and South Africa. Today, the HRM approach is influential in many
parts of the world. Typically, in this period HRM was presented in four distinct ways.
First, as a radically new approach to managing people, demarcated sharply from traditional
personnel management (Storey, 1989, p.4). Personnel management was commonly viewed as
having an operational focus, emphasizing technical skills and day-to-day functions such as
recruitment and selection, training, salary administration, and employee relations. ‘Personnel’
was a detached and neutral approach to staff. By contrast, HRM was often portrayed as being
proactive – looking at people in economic terms as either assets or costs to be actively managed.
HRM was seen to be strategic, tying people management to business objectives. It
was an attempt to manage people – not necessarily employees – in the long-term interests of
Secondly, HRM was seen as an integrated approach which provided a coherent programme,
linking all aspects of people management. Whereas personnel managers employed a
piecemeal range of sophisticated techniques for assessment or selection, HRM integrated
these within a meaningful and organized framework. Each element needed to fit into a pattern
that ultimately met business needs. Additionally, HRM was seen to be holistic: in other
words, it was concerned with the overall people requirements of an organization. It implied
a significant shift towards more conceptual, higher-level concerns such as the structure and
culture of the organization and the provision of necessary competences.
Thirdly, HRM represented a consistent view of people management in which employees
were treated as valuable assets. An organization’s reward systems, performance measures,
However, Japan is constantly changing. Most accounts of Japanese business practice
refer to the behaviour and beliefs of a generation who had to work hard to restore the
economy after World War II. The younger generation do not necessarily share their view
Japanese companies first drew on their profits in lean times in order to keep their
workforce. Companies in English-speaking countries would have been unable to withstand
the wrath of shareholders demanding dividend payments. Responsibility for
the security of their workforce was not simply a matter of goodwill or obligation but the
necessary price for commitment from employees. This was difficult for companies
operating in a global environment, exposed to fluctuations in the value of the yen or
overseas economic demand. These companies made considerable use of peripheral
workforces – primarily their suppliers’ employees – who took the brunt whenever
demand fell. These peripheral workers faced little or no income for prolonged periods
while favoured employees in multinational organizations maintained their privileges. But
as recession deepened at the end of the 20th century closures and retrenchments
became a new feature of the Japanese industrial scene.
What were the most significant influences of Japanese people management on the
development of HRM?
promotion and learning opportunities were to be used to maximize the utilization of its
human resources. In particular, they were focused on the attitudes, beliefs and commitment
of employees to achieve behavioural consistency and a culture of commitment.
Finally, HRM was presented as a general management function. Personnel management
was often viewed as the work of specialists, whereas HRM was the responsibility of all managers.
In some organizations human resource experts provided an internal consultancy service
to line managers. There was a particular stress on the role of top management and an overall
increase in the status of people management. Traditional personnel managers had little power
Why should HRM have attracted such attention, particularly from senior managers? From
a strategic viewpoint, Lengnick-Hall and Lengnick-Hall (1988) identify a clear rationale for
adopting the HRM approach:
_ HRM offers a broader range of solutions for complex organizational problems.
_ It ensures that an organization’s people are considered as well as its financial and
technological resources when objectives are set or capabilities assessed.
_ It forces the explicit consideration of the individuals who implement and comprise the
_ Two-way links are encouraged between the formulation of strategy and its human
resource implications, avoiding problems which might arise from: (a) subordinating
strategic considerations to HR preferences; and (b) neglecting an organization’s people
as a potential source of organizational competence and competitive advantage.
The renewed emphasis on the importance of human resources drew attention to the practice
of people management. Conventionally, this had been divided between line and personnel
managers, now frequently called human resource managers. For some, HRM was simply
a matter of relabelling ‘personnel’ to redress the criticisms made about traditional personnel
management and sceptics have argued that familiar personnel functions were repackaged and
given a more up-market image – ‘old wine in new bottles’ (Armstrong, 1987). Indeed, until
the early 1990s, ‘Human Resource Management’ textbooks tended to be slightly revised
‘Personnel Management’ texts covering familiar topics in a prescriptive manner.
Writing at that time, Torrington and Hall (1991, p.15) concurred that the term was adopted
in order to get away from the ineffectual image of previous eras: ‘. . . personnel managers
seem constantly to suffer from paranoia about their lack of influence and are ready to snatch
at anything – like a change in title – that might enhance their status.’ It was also fuelled by longstanding
criticisms from other managers. This includes a general prejudice that is often
expressed within organizations and sometimes finds its way into print. Thus the following
from an article entitled ‘Support for an old-fashioned view’, The Independent, 12 May, 1994):
Many of us have long held the view that personnel management, or human resource management
as companies sometimes insist on calling it, is a uniquely irrelevant executive function fulfilling no
obvious purpose other than to stifle initiative, flair and creativity.
Similarly, Kellaway (2001) revisited an article about ‘a piece of incomprehensible HR
waffle that purported to lay out the future of HR’ about which she had made ‘a few averagely
derogative remarks’. She cited 120 responses she had received of which 115 ‘referred to the
HR profession with scepticism, sarcasm, rudeness or obscenity’. According to Kellaway, no
one had a good word to say for HR. ‘So demoralised are HR people that they churn out junk
and when you attack it they do not even have the spirit to get angry’.
Where does this prejudice come from? Some critics have argued that personnel people
should relinquish their ambiguous roles and adopt unashamedly managerialist positions.
Others concluded that if human resources were fundamental to business success they were too
important to be left to operational personnel managers. One of Lucy Kellaway’s e-mailers
stated: ‘For HR to work it should (a) rename itself personnel and (b) stick to the basics, e.g.
payroll, healthcare, training – of other people, not themselves – and pensions.’
But many commentators in the HR and management literature contend that major human
resource decisions should be made by top managers and the consequences of those decisions
should be carried through by line management. These considerations place HRM on a strategic
rather an operational footing and therefore make HRM a concept of greater interest than
personnel management to senior executives. However, in an article from the US business
magazine Fast Company entitled ‘Why We Hate HR’, Hammonds (2005) repeats some familiar
… let’s face it: After close to 20 years of hopeful rhetoric about becoming ‘strategic partners’ with
a ‘seat at the table’ where the business decisions that matter are made, most human resources
professionals aren’t nearly there. They have no seat, and the table is locked inside a conference
room to which they have no key. HR people are, for most practical purposes, neither strategic
Hammonds goes on to describe HR as ‘at best, a necessary evil – and at worst, a dark
bureaucratic force that blindly enforces nonsensical rules, resists creativity, and impedes constructive
change.’ While conceding that HR is ‘the corporate function with the greatest potential’
and, theoretically, the key driver of business performance, he also considers it to be ‘the
one that most consistently underdelivers.’
Whatever the underlying level of hostility, or press disdain, it remains the case that, in
larger organizations, there has been a reappraisal of the previously unfashionable and
low-status personnel department. ‘Personnel’ cannot be regarded as peripheral if it controls
an organization’s people since the rhetoric states that they are its greatest resources.
Many businesses have adopted some form of HRM in recognition of this importance. As
Fowler (1987) famously stated, ‘HRM represents the discovery of personnel management
by chief executives’.
HRM in reality Laughing gurus
The use of humour is one key to the success of management
gurus. Researchers Dr Tim Clark and Dr David
Greatbatch, authors of Management Speak: Why We
Listen to What Management Gurus Tell Us, analysed the
techniques used by world-famous gurus such as Tom
Peters, Rosabeth Moss Kanter and Gary Hamel. They
found that successful gurus employ skilful communication
techniques, especially humour, to promote their
sometimes uncomfortable messages. Filling a lecture
theatre or conference venue with laughter avoids alienating
their audiences and brings people ‘on-side.’
‘Examining live and video-recorded performances
of leading international gurus enabled us to analyse the
presentational techniques they use to disseminate their
ideas during live presentations,’ said Dr Greatbatch.
Gurus are faced with the problem of advocating
unorthodox organizational practices that their audiences
are probably not using, and disparaging the
practices they are using. This is a delicate task with an
inherent risk of alienating their audience members. So
how do they do it? Dr Clark argues: ‘These gurus
remain highly regarded on the world-speaking stage
and we wanted to discover their grammar of persuasion
– in other words the communication techniques
which underpin their frequently charismatic and persuasive
public speaking performances.’
The study shows that gurus avoid offence by evoking
laughter and telling stories. ‘Basically, whenever the
guru says anything potentially uncomfortable to audiences
of managers they use humour and wrap it up as
a joke,’ said Dr Greatbatch. The researchers found that
gurus used a number of specific techniques to ‘invite’
laughter. ‘Collective audience laughter is not simply a
spontaneous reaction to humour or jokes,’ argued
David Greatbatch. ‘Rather, the gurus invite laughter
by indicating when it is appropriate for the audience
members to do so.’
Gurus used verbal and non-verbal actions to invite
_ laughing themselves
_ using exaggerated, ironic or comedic gestures
_ showing their teeth in a ‘laughing’ smile.
Having achieved laughter from the audience, the
gurus played on this bonding to encourage the audience
to feel part of an ‘in group’ sharing a common
viewpoint with the gurus. The audience then began to
Core roles in human
Source Plenary group of the
Steering Committee for HRM
Standards & Qualifications, South
1 Planning and organizing for work, people and HRM Strategic perspective
Corporate ‘wellness’ management
2 People acquisition and development Staffing the organization
Training and development
3 Administration of policies, programmes and practices Compensation management
Does this list of core HR roles differ in any significant way from the list of personnel
functions given in Table 1.1?
turn against the management practice(s) being criticised
by the guru.
Storytelling seemed to be particularly important in
the two processes of evoking laughter and deflecting
criticism. The researchers found that more than twothirds
of audience laughter studied occurred within the
context of stories. Stories make the gurus’ messages
more entertaining and memorable and also reinforce
the authority of the gurus’ knowledge. So their stories
make constant references to famous and respected
managers and organizations, personally known to
the gurus. Audience research confirms that those
speakers who use funny stories to develop their arguments
are those who are most remembered.
‘Our research clearly shows that gurus deploy
humour at those points in their presentation where
they face possible dissent,’ asserts Dr Greatbatch.
‘Because they package their ideas in a non-offensive
way, the world’s leading gurus are never booed from
the stage and typically generate very positive audience
reaction and a high feel-good factor. Anyone can learn
the techniques which they use and public speakers
ranging from politicians to trainers could benefit from
having a greater range of presentation techniques to
deploy when necessary.’
Management gurus have had a significant influence
on the practice of management. Are their ideas
brought into question by the use of the theatrical
techniques described in this article?
The new managerialism
Schuler (1990) emphasized that the HR function had an opportunity to shift from being an
‘employee advocate’ (associated with personnel management) to a ‘member of the management
team’. Schuler’s view was that this required HR professionals to be concerned with the
bottom line, profits, organizational effectiveness and business survival. In other words, human
resource issues should be addressed as business issues.
In fact, line and general managers have been instrumental in the adoption of HRM, often
pushing changes through despite the resistance of personnel specialists .
Radical changes in business structures and supportive, largely right-wing, governments
encouraged a renewed confidence in the power of managers to manage. The balance of power
moved away from workers and their representatives with the collapse of traditional heavy
industries in Western countries. High levels of unemployment allowed managers to pick and
choose new recruits. Existing employees felt pressurized to be more flexible under the threat
of losing their jobs. As a result, managers were able to design more competitive organizations
with new forms of employment relationships.
Encouraged by the writing of management gurus and, more recently, by the burgeoning
legions of consultants , managers eagerly adopted new management fads
and fashions. Businesses moved away from multi-layered, rigid hierarchies and long-term
career paths. Instead we saw an increase in flatter, project-oriented forms of organizations
resourced in a flexible way – including short-term, part-time and contract workers. People
managers found themselves needing a framework within which to comprehend and justify
these innovative practices. The stage was set for HRM, which was presented as a coherent
and integrated philosophy by its originators, covering every aspect of people management
In this chapter we introduced the concept of HRM.
Human resource management has evolved from a
number of different strands of thought and is best
described as a loose philosophy of people management
rather than a focused methodology. It derives largely
from the last century but incorporates older notions
about the management of people at work. These ideas
have many different roots and they do not fit comfortably
within one coherent and self-consistent body of
knowledge. One major point of debate has been the
difference, if any, between HRM and ‘traditional’ personnel
management. As we shall see in later chapters,
the development of HRM continues today as new
management theories, fashions and fads emerge.
In the 1980’s, the birth of a new concept called ‘Human Resource Management’ was born. This trend comes after an intense period of Taylorisation, Fordism and now, McDonaldisation.
HRM came to counter balance these trends and to consider the concept of the Man as a Man and not as a machine. For the last several decades, the interests of companies in "strategic management" have increased in a noteworthy way. This interest in strategic management has resulted in various organizational functions becoming more concerned with their role in the strategic management process.
The Human Resource Management (HRM) field has sought to become integrated into the strategic management process through the development of a new discipline referred to as Strategic Resource Management (SHRM). In current literature, the difference between SHRM and HRM is often unclear because of the interconnections linking SHRM to HRM. However, the concepts are slightly different.
Thus, we can ask, what is strategic human resource management? What are the main theories and how do they work? What do they take into account and how are they integrated? What are the links between SHRM and organization strategy?
In order to answer to these questions, we will precisely define strategic human resource management, followed by a look at the different approaches built by theorists, and finally, we will see the limits between the models and their applications depending on the company’s environment.
Discussion Strategic Human Resource Management: definition Strategic human resource management involves the military word ‘strategy
as "a set of fundamental or critical choices about the ends and means of a business". To be simpler, a strategy is "a statement of what the organization wants to become, where it wants to go and, broadly, how it means to get there."
Strategy involves three major key factors: 1.competitive advantages ,
2. distinctive capabilities and the
3.strategic fit .
Strategies must be developed with a relevant purpose to sustain the organizational goals and aims. SHRM is one of the components of the organizational strategies used to sustain the business long-term. SHRM defined as: “all those activities affecting the behaviour of individuals in their efforts to formulate and implement the strategic needs of the business. or as “the pattern of planned human resource deployments and activities intended to enable the firm to achieve its goals. . Human resource management understands that human capital can be considered the main source of competitive advantage. By considering a human as a human, giving him satisfaction, education, motivation, training and reward, human resource strategies intend to optimize human capital and take care of the relationship between the management of the firm and this type of capital, as this relationship can be ambiguous. To add further on this ambiguous relationship, we can emphasize that the organizational strategies are implemented by human capital in a big way, creating a powerful role in the implementation process of management strategies. SHRM is integrated as a whole process into the management strategies implementation process and acts in the same way by pursuing the achievements of organizational aims.
strategic HRM must have four main features, which are the: organizational level (decisions are formulated at the top), focus (business effectiveness focused), roles (the implementation directives are made by and depend on the managers) and framework (implementation of strategies involve a certain framework). All these characteristics go with the idea of vertical integration of the SHRM in management strategy. Different approaches in strategic human resource management
a) Vertical Integration goes hand in hand with the Best-fit school approach
In fact, vertical integration, can be scaled by five different levels where integration varies in accordance with the relationship between the organization strategy and the HR strategy. Thus, we have a first level called separation where there is no link between HR and organization strategy. Then we have the ‘fit’ level, where people actually recognize HR strategy as a part of the organization strategy. Another upper level of vertical integration is the ‘dialogue’ level where HR strategy is useful for communication and debate. Then we can look at the ‘holistic’ level that considers both of the strategies as a whole, where the relationship is strong and the links are plentiful. Finally, there is the last level of vertical integration, the ‘HR driven’ level, where the strategy of the organization is conducted by the HR strategy. The concept of ‘vertical integration’ goes hand in hand with the best-fit approach to strategic HRM. The contingency school (best-fit) of SHRM takes into account several models like the ‘lifecycle model’ or the ‘competitive advantage model’ where the level of vertical integration of the HR strategy and organization strategy are similar to what was described earlier. Indeed, the best-fit approach emphasizes the relationship between the HR policies and the way to reach company’s goals, considering the external environment of the company. After assessing this kind of approach, which may appear to be an inflexible model of SHRM, and the effect of the different rapidly changing external factors, we can see that the life cycle models and competitive advantage models are not relevant enough in a strategy where the company’s goals are becoming more difficult to reach. However, those models, mixed with other models that can improve the flexibility of the approach, can help tremendously by increasing the conjugation of HRM strategies with organization strategies. Another limit of the best-fit approach is the trend of over simplification of the organizational reality; in effect, the best-fit models try to simplify the factors that influence business strategy and business goals. The greatest limit of this approach originates from the very beginning, with the hypothesis. Organizations are influenced by internal and external complex factors which can cause the frequent changing of environmental and implementation issues.
b) An evolution of ‘tight’ fit models introducing flexibility: configurational approach
In response to this limit, amongst others, propose the ‘configurational model’ where horizontal integration (the internal development of HR strategy) is introduced for aiming toward better implementation of vertical integration. “The significant difference here between the contingency approach and the configurational approach is that these configurations represent ‘non-linear synergistic effects and higher-order interactions’ that can result in maximum performance”. Moreover, the key point about the configurational perspective is that it ‘seeks to derive an internally consistent set of HR practices that maximize horizontal integration and then link these to alternative strategic configurations in order to maximize ‘vertical integration’”. Organizations have to develop HR system in order to achieve both horizontal and vertical integrations.
c) The resource-based approach: focusing on internal resources
Another view of SHRM exists where the internal resources are the principal factor for a sustainable competitive advantage. In effect, the value brought by human resource is the core of this approach where flexibility is optimized in order to reduce costs and increase efficiency. Human resource, by adding value, uniqueness and the most effective way to use resources, tend to increase the competitive advantage of a company in comparison to another. Horizontal integration is one of the main factors HR strategy uses to achieve the organizational strategy and reach the planned organization’s goals. However, horizontal integration cannot be considered a sole factor leading to the achievement of an organization’s goals. There first comes a limit to this approach. It is agreed that human resources do the implementation of organizational strategy, but it can only be properly done if the external environment allows the human resources and the organization to do so . The resource-based view tends to ignore the baseline of specific industries as it takes into account the differences of firms in the same sector as a competitive advantage. However, competitive advantages are gained by the ‘rightsizing’ process which implies that an organization obtains more output from its existing resources and optimizes the way in which they are used. Therefore, it is the way in which these resources are used, along with the same baseline in an industry, which create the competitive advantages rather than the differences between the firms.
d) Best practice SHRM, the universalist approach
This view of SHRM argues "that all organizations will benefit and see improvements in organizational performance if they identify, gain commitment to and implement a set of best HRM practices". In this approach, the ‘high commitment’ concept links with human capital, as it must have a high level of commitment, enforced by the ‘ideal set of practices’ . This means that the best set of HR practices must improve the productivity and effectiveness of human capital, place emphasis on any motivation made toward human capital, and an aim to reach the firm’s goals. Rewarding practices have to be properly set and implemented, targeting the idea of high commitment and satisfaction of employees. “A key element of best-practice is horizontal integration and congruence between policies”. This concept of a ‘universal best practices set’ is disputable as it is a non-specific and non-accurate definition of HR policies that have to be applied. Indeed, the best practice models are constituted by different policies that vary significantly from one model to another. Performances of this approach in organizations are, because of the difficulty of generalization and conceptualization, very hard to measure as they are determined by several different factors. Even in the case of a universal best practices set, it is hard to see if the performances are due to the implementation of this view of SHRM or not. Conclusion Several different approaches can be discussed in relation to which hypotheses are taken into account. However, every approach aims toward the same core goal: business effectiveness and profitability. Even though each model has its own limits, they have been empirically successfully assessed. The final argument advocated for strategic HRM is that, in relation to internal and external environment differences between industries, the best way to integrate SHRM management strategy is to blur the differences between the models and to implement them in a complementary view