1- Introduction to HRM
Personnel management (PM):
Traditional approach to managing people in the organization (considered a sub-
category of HRM and bureaucratic) à operational and routine function
Short term oriented
Employees are viewed as economic sources and therefore as a cost à regards
people as basic input to make desired output
Human resource management (HRM):
Developed in the 1980s in the USA under the assumption that people are
company’s most valuable asset, and therefore sees employees as a resource
that needs to be developed and utilized to support the organization operational
and strategic objectives and gain a competitive advantage over competition à
flexible and organic rather than bureaucratic
Modern approach of managing people and their strengths in the organization
(includes all activities associated with the management of people) à strategic
Integrates administrative functions (personnel management) and other
activities to enhance employee and organizational efficiency and productivity
à HR function: relates to all the activities and responsibilities connected to
managing people
Transformational (strategic): Activities concerned with the alignment and
implementation of HR and business strategies
Transactional: Delivery of HR activities such as resourcing, learning and
development, reward and employee relations
Decisions are made collectively after considering employee’s participation,
authority and decentralization à involve active participation and strong
emphasis on vertical and horizontal integration and communication
HRM represents the belief that people, or human resources, are the key to
organizational successes. Management needs to understand the employees
value to the organization and how this can be realized and therefore involves
the direct and ongoing involvement and leadership of senior management with
systematic and sophisticated engagement with employees as part of the
process of adding value to the organization
1
, It is through and with people that organizations can enjoy higher performance
and long-term success
Line managers need to understand that all managers of people are ‘personnel
managers, that is they have a personnel function to perform (Tyson and Fell,
1986)
In order for HR activities to be effective, HR needs to join forces with operating
managers (Ulrich, 1998)
Management: Using resources in an efficient and effective way so that the end
product is worth more than the initial resources (Smith, 2011) à developing
• Guest – argues that the HRM label does not represent something new and
distinctive
• Storey – suggest that there are 27 points of distinction between the two
HR Outsourcing
Cost savings in HR functions that are not profitable à reducing HR staff or relocating
them to functions with greater income potential à involving a strategic function
According to Accenture 60% of the organizations that outsource do it solely for
economic reasons, a number they consider too little
à Outsourcing makes sense where it adds value and frees up in-house HR to
concentrate on what it does best
à Ongoing close collaboration
Using an external provider can have many advantages
• Skills and knowledge
o Hiring someone from a specialist company will ensure they have been
fully trained in that one specific field and will have excellent knowledge
• Reduced costs
• Saving management time
Disadvantages
• Impersonal
• Distance
• Culture
Example: BBC
à The primary reason was cost reduction
Capita is managing some HR functions of BBC: staff recruiting, pay,
occupational health and T&D. BBC is approaching HR strategically, due to the
2
, cost reduction (50 million since 2006), they are able to invest on other
functions.
Ulrich Four Role Model HR
- Strategic focus
o Strategic Partner
§ Transformational role rather than only transactional (Lawler
et al. 2004)
§ It can’t be outsourced, as it required in-house expertise
§ Ability to make accurate projections based on understanding
the goals of the business and using metrics efficiently
§ Close cooperation with management as it contributes to
management decision making
§ Strategic HR building
§ Internal and external relationship builder
§ Runs projects aiming to increase productivity, support
innovations and develop talent
§ Organizational and workplace design
• Health and well-being of employees
• Nature in work
§ Ensures communication
§ Merger and acquisitions
• Target workforce company analysis to identify and
classify employee value to the future company
§ Recruitment and selection
§ Brand building and promotion
§ Able to adapt to the rapidly changing environment
§ Identifies in advance future trends
• Newer generations
• Brexit
o Change Agent
§ Understand the organization culture and what is effective
and ineffective (Pfeffer)
§ Helps organizations to build capacity for change
§ Supports changes in the organizations and leads initiatives to
makes changes easier for employees
§ Adapting staff for new stages of growth
§ Leads initiatives to improve the experience of employees in
the organizations
§ Talent management
• Plans training sessions for employees to help them
gain new skills and competencies
§ Compensation and benefits
• Financial rewards
o Pay increase
3
, o Bonus
o Stock options
• Non-financial
o Leadership opportunities
o Day-off
o Holiday
o Recognition
o Flexible schedule
o T&D
§ Problem solver
§ Routinely collects feedback from employees
§ Identify employees needs to make changes to improve their
satisfaction levels
- Operational focus
o Administrative Expert
§ Human Resource Information System
§ Manages people and HR related costs
§ Compliance with regulations
• Ensuring equal opportunities without any
discrimination
• Reporting abuses
• Compliance with the Equality Act (2010) and other
regualtions
o Employee Advocate
§ Represents employees, protects their interests and makes
sure that strategic initiatives are well balances
§ Industrial and labour relations
§ Employer and employee relation (psychological contract)
§ Focuses on employee welfare
§ Diversity and equal opportunity
A positive organizational environment
E&Y: “Supporting our people must begin at the most fundamental level – their physical
and mental health and wellbeing. It is only from strong foundation that they can
handle complex issues”
“Highly engaged employees are, on average, 50% more likely to exceed expectations
than the least engaged workers” (Hay Group)
“And companies with highly engaged people outperform firms with the most
disengaged folks – by 54% in employee retention, by 89% in customer satisfaction, and
by fourfold revenue growth” (Hay Group)
• HRM (and including management) need to pay more attention to the
emotional well-being of their employees
• HR specialist need to look at ways of sustaining a positive emotional state
4
Personnel management (PM):
Traditional approach to managing people in the organization (considered a sub-
category of HRM and bureaucratic) à operational and routine function
Short term oriented
Employees are viewed as economic sources and therefore as a cost à regards
people as basic input to make desired output
Human resource management (HRM):
Developed in the 1980s in the USA under the assumption that people are
company’s most valuable asset, and therefore sees employees as a resource
that needs to be developed and utilized to support the organization operational
and strategic objectives and gain a competitive advantage over competition à
flexible and organic rather than bureaucratic
Modern approach of managing people and their strengths in the organization
(includes all activities associated with the management of people) à strategic
Integrates administrative functions (personnel management) and other
activities to enhance employee and organizational efficiency and productivity
à HR function: relates to all the activities and responsibilities connected to
managing people
Transformational (strategic): Activities concerned with the alignment and
implementation of HR and business strategies
Transactional: Delivery of HR activities such as resourcing, learning and
development, reward and employee relations
Decisions are made collectively after considering employee’s participation,
authority and decentralization à involve active participation and strong
emphasis on vertical and horizontal integration and communication
HRM represents the belief that people, or human resources, are the key to
organizational successes. Management needs to understand the employees
value to the organization and how this can be realized and therefore involves
the direct and ongoing involvement and leadership of senior management with
systematic and sophisticated engagement with employees as part of the
process of adding value to the organization
1
, It is through and with people that organizations can enjoy higher performance
and long-term success
Line managers need to understand that all managers of people are ‘personnel
managers, that is they have a personnel function to perform (Tyson and Fell,
1986)
In order for HR activities to be effective, HR needs to join forces with operating
managers (Ulrich, 1998)
Management: Using resources in an efficient and effective way so that the end
product is worth more than the initial resources (Smith, 2011) à developing
• Guest – argues that the HRM label does not represent something new and
distinctive
• Storey – suggest that there are 27 points of distinction between the two
HR Outsourcing
Cost savings in HR functions that are not profitable à reducing HR staff or relocating
them to functions with greater income potential à involving a strategic function
According to Accenture 60% of the organizations that outsource do it solely for
economic reasons, a number they consider too little
à Outsourcing makes sense where it adds value and frees up in-house HR to
concentrate on what it does best
à Ongoing close collaboration
Using an external provider can have many advantages
• Skills and knowledge
o Hiring someone from a specialist company will ensure they have been
fully trained in that one specific field and will have excellent knowledge
• Reduced costs
• Saving management time
Disadvantages
• Impersonal
• Distance
• Culture
Example: BBC
à The primary reason was cost reduction
Capita is managing some HR functions of BBC: staff recruiting, pay,
occupational health and T&D. BBC is approaching HR strategically, due to the
2
, cost reduction (50 million since 2006), they are able to invest on other
functions.
Ulrich Four Role Model HR
- Strategic focus
o Strategic Partner
§ Transformational role rather than only transactional (Lawler
et al. 2004)
§ It can’t be outsourced, as it required in-house expertise
§ Ability to make accurate projections based on understanding
the goals of the business and using metrics efficiently
§ Close cooperation with management as it contributes to
management decision making
§ Strategic HR building
§ Internal and external relationship builder
§ Runs projects aiming to increase productivity, support
innovations and develop talent
§ Organizational and workplace design
• Health and well-being of employees
• Nature in work
§ Ensures communication
§ Merger and acquisitions
• Target workforce company analysis to identify and
classify employee value to the future company
§ Recruitment and selection
§ Brand building and promotion
§ Able to adapt to the rapidly changing environment
§ Identifies in advance future trends
• Newer generations
• Brexit
o Change Agent
§ Understand the organization culture and what is effective
and ineffective (Pfeffer)
§ Helps organizations to build capacity for change
§ Supports changes in the organizations and leads initiatives to
makes changes easier for employees
§ Adapting staff for new stages of growth
§ Leads initiatives to improve the experience of employees in
the organizations
§ Talent management
• Plans training sessions for employees to help them
gain new skills and competencies
§ Compensation and benefits
• Financial rewards
o Pay increase
3
, o Bonus
o Stock options
• Non-financial
o Leadership opportunities
o Day-off
o Holiday
o Recognition
o Flexible schedule
o T&D
§ Problem solver
§ Routinely collects feedback from employees
§ Identify employees needs to make changes to improve their
satisfaction levels
- Operational focus
o Administrative Expert
§ Human Resource Information System
§ Manages people and HR related costs
§ Compliance with regulations
• Ensuring equal opportunities without any
discrimination
• Reporting abuses
• Compliance with the Equality Act (2010) and other
regualtions
o Employee Advocate
§ Represents employees, protects their interests and makes
sure that strategic initiatives are well balances
§ Industrial and labour relations
§ Employer and employee relation (psychological contract)
§ Focuses on employee welfare
§ Diversity and equal opportunity
A positive organizational environment
E&Y: “Supporting our people must begin at the most fundamental level – their physical
and mental health and wellbeing. It is only from strong foundation that they can
handle complex issues”
“Highly engaged employees are, on average, 50% more likely to exceed expectations
than the least engaged workers” (Hay Group)
“And companies with highly engaged people outperform firms with the most
disengaged folks – by 54% in employee retention, by 89% in customer satisfaction, and
by fourfold revenue growth” (Hay Group)
• HRM (and including management) need to pay more attention to the
emotional well-being of their employees
• HR specialist need to look at ways of sustaining a positive emotional state
4
