HUMAN RESOURCE MANAGEMENT
Human resource management (HRM), also called personnel management, consists of all the activities undertaken by an enterprise to ensure the effective utilization of employees toward the attainment of individual, group, and organizational goals. An organization's HRM function focuses on the people side of management. It consists of practices that help the organization to deal effectively with its people during the various phases of the employment cycle, including pre-hire, staffing, and post-hire. The pre-hire phase involves planning practices. The organization must decide what types of job openings will exist in the upcoming period and determine the necessary qualifications for performing these jobs. During the hire phase, the organization selects its employees. Selection practices include recruiting applicants, assessing their qualifications, and ultimately selecting those who are deemed to be the most qualified.
In the post-hire phase, the organization develops HRM practices for effectively managing people once they have "come through the door." These practices are designed to maximize the performance and satisfaction levels of employees by providing them with the necessary knowledge and skills to perform their jobs and by creating conditions that will energize, direct, and facilitate employees' efforts toward meeting the organization's objectives.
HRM DEVELOPMENT AND
While most firms have a human resources or personnel department that develops and implements HRM practices, responsibility lies with both HR professionals and line managers. The interplay between managers and HR professionals leads to effective HRM practices. For example, consider performance appraisals. The success of a firm's performance appraisal system depends on the ability of both parties to do their jobs correctly. HR professionals develop the system, while managers provide the actual performance evaluations.
The nature of these roles varies from company to company, depending primarily on the size of the organization. This discussion assumes a large company with a sizable HRM department. However, in smaller companies without large HRM departments, line managers must assume an even larger role in effective HRM practices.
HR professionals typically assume the following four areas of responsibility: establishing HRM policies and procedures, developing/choosing HRM methods, monitoring/evaluating HRM practices, and advising/assisting managers on HRM-related matters. HR professionals typically decide (subject to upper-management approval) what procedures to follow when implementing an HRM practice. For example, HR professionals may decide that the selection process should include having all candidates (1) complete an application, (2) take an employment test, and then (3) be interviewed by an HR professional and line manager.
Usually the HR professionals develop or choose specific methods to implement a firm's HRM practices. For instance, in selection the HR professional may construct the application blank, develop a structured interview guide, or choose an employment test. HR professionals also must ensure that the firm's HRM practices are properly implemented. This responsibility involves both evaluating and monitoring. For example, HR professionals may evaluate the usefulness of employment tests, the success of training programs, and the cost effectiveness of HRM outcomes such as selection, turnover, and recruiting. They also may monitor records to ensure that performance appraisals have been properly completed.
HR professionals also consult with management on an array of HRM-related topics. They may assist by providing managers with formal training programs on topics like selection and the law, how to conduct an employment interview, how to appraise employee job performance, or how to effectively discipline employees. HR professionals also provide assistance by giving line managers advice about specific HRM-related concerns, such as how to deal with problem employees.
Line managers direct employees' day-to-day tasks. From an HRM perspective, line managers are mainly responsible for implementing HRM practices and providing HR professionals with necessary input for developing effective practices. Managers carry out many procedures and methods devised by HR professionals. For instance, line managers:
- Interview job applicants
- Provide orientation, coaching, and on-the-job training
- Provide and communicate job performance ratings
- Recommend salary increases
- Carry out disciplinary procedures
- Investigate accidents
- Settle grievance issues
The development of HRM procedures and methods often requires input from line managers. For example, when conducting a job analysis, HR professionals often seek job information from managers and ask managers to review the final written product. Additionally, when HR professionals determine an organization's training needs, managers often suggest what types of training are needed and who, in particular, needs the training.
HISTORICAL MILESTONES IN HRM
Table 1 identifies some of the major milestones in the historical development of HRM. Frederick Taylor, known as the father of scientific management, played a significant role in the development of the personnel function in the early 1900s. In his book, Shop Management, Taylor advocated the "scientific" selection and training of workers. He also pioneered incentive systems that rewarded workers for meeting and/or exceeding performance standards. Although Taylor's focus primarily was on optimizing efficiency in manufacturing environments, his principles laid the ground-work for future HRM development. As Taylor was
|1890-1910||Frederick Taylor develops his ideas on scientific management. Taylor advocates scientific selection of workers based on qualifications and also argues for incentive-based compensation systems to motivate employees.|
|1910-1930||Many companies establish departments devoted to maintaining the welfare of workers. The discipline of industrial psychology begins to develop. Industrial psychology, along with the advent of World War I, leads to advancements in employment testing and selection.|
|1930-1945||The interpretation of the Hawthorne Studies' begins to have an impact on management thought and practice. Greater emphasis is placed on the social and informal aspects of the workplace affecting worker productivity. Increasing the job satisfaction of workers is cited as a means to increase their productivity.|
|1945-1965||In the U.S., a tremendous surge in union membership between 1935 and 1950 leads to a greater emphasis on collective bargaining and labor relations within personnel management. Compensation and benefits administration also increase in importance as unions negotiate paid vacations, paid holidays, and insurance coverage.|
|1965-1985||The Civil Rights movement in the U.S. reaches its apex with passage of the Civil Rights Act of 1964. The personnel function is dramatically affected by Title VII of the CRA, which prohibits discrimination on the basis of race, color, sex, religion, and national origin. In the years following the passage of the CRA, equal employment opportunity and affirmative action become key human resource management responsibilities.|
|1985-present||Three trends dramatically impact HRM. The first is the increasing diversity of the labor force, in terms of age, gender, race, and ethnicity. HRM concerns evolve from EEO and affirmative action to "managing diversity." A second trend is the globalization of business and the accompanying technological revolution. These factors have led to dramatic changes in transportation, communication, and labor markets. The third trend, which is related to the first two, is the focus on HRM as a "strategic" function. HRM concerns and concepts must be integrated into the overall strategic planning of the firm in order to cope with rapid change, intense competition, and pressure for increased efficiency.|
developing his ideas about scientific management, other pioneers were working on applying the principles of psychology to the recruitment, selection, and training of workers. The development of the field of industrial psychology and its application to the workplace came to fruition during World War I, as early vocational and employment-related testing was used to assign military recruits to appropriate functions.
The Hawthorne Studies, which were conducted in the 1920s and 1930s at Western Electric, sparked an increased emphasis on the social and informal aspects of the workplace. Interpretations of the studies emphasized "human relations" and the link between worker satisfaction and productivity. The passage of the Wagner Act in 1935 contributed to a major increase in the number of unionized workers. In the 1940s and 1950s, collective bargaining led to a tremendous increase in benefits offered to workers. The personnel function evolved to cope with labor relations, collective bargaining, and a more complex compensation and benefits environment. The human relations philosophy and labor relations were the dominant concerns of HRM in the 1940s and 1950s.
HRM was revolutionized in the 1960s by passage of Title VII of the Civil Rights Act and other anti-discrimination legislation—as well as presidential executive orders that required many organizations to undertake affirmative action in order to remedy past discriminatory practices. Equal employment opportunity and affirmative action mandates greatly complicated the HRM function, but also enhanced its importance in modern organizations. As discussed more fully in a later section, these responsibilities continue to comprise a major part of the HRM job. Finally, changes in labor force demographics, technology, and globalization since the 1980s have had a major impact on the HRM function. These factors also are discussed in more detail in a later section.
PRE-HIRING, HIRING, AND POST-HIRING
The major HRM activities in the pre-hire phase are human resource planning and job analysis. These activities form the cornerstone upon which other HRM practices are built. Human resource planning helps managers to anticipate and meet changing needs related to the acquisition, deployment, and utilization of employees. The organization first maps out an overall plan called a strategic plan. Then, through demand and supply forecasting it estimates the number and types of employees needed to successfully carry out its overall plan. Such information enables a firm to plan its recruitment, selection, and training strategies. For example, assume that a firm's HR plan estimates that 15 additional engineers will be needed during the next year. The firm typically hires recent engineering graduates to fill such positions. Because these majors are in high demand, the firm decides to begin its campus recruiting early in the academic year, before other companies can "snatch away" the best candidates.
Job analysis is the systematic process used for gathering, analyzing, and documenting information about particular jobs. The analysis specifies what each worker does, the work conditions, and the worker qualifications necessary to perform the job successfully. The job analysis information is used to plan and coordinate nearly all HRM practices, including:
- Determining job qualifications for recruitment purposes
- Choosing the most appropriate selection techniques
- Developing training programs
- Developing performance appraisal rating forms
- Helping to determine pay rates
- Setting performance standards for productivity improvement programs
For example, an organization may decide to use a mechanical aptitude test to screen applicants because a job analysis indicated that mechanical aptitude is an important job skill. Or, a firm may raise the pay of one of its employees because a job analysis indicated that the nature of the work recently changed and is now more demanding.
The hiring phase of human resource management is also called staffing. Staffing involves policies and procedures used by organizations to recruit and select employees. Organizations use recruitment to locate and attract job applicants for particular positions. They may recruit candidates internally (i.e., recruit current employees seeking to advance or change jobs) or externally. The aim of recruitment practices is to identify a suitable pool of applicants quickly, cost-efficiently, and legally. Selection involves assessing and choosing among job candidates. To be effective, selection processes must be both legal and technically sound, accurately matching people's skills with available positions.
Training and development are planned learning experiences that teach workers how to effectively perform their current or future jobs. Training focuses on present jobs, while development prepares employees for possible future jobs. Training and development practices are designed to improve organizational performance by enhancing the knowledge and skill levels of employees. A firm must first determine its training needs and then select/develop training programs to meet these needs. It also must also take steps to ensure that workers apply what they have learned on the job.
Through the performance appraisal process, organizations measure the adequacy of their employees' job performances and communicate these evaluations to them. One aim of appraisal systems is to motivate employees to continue appropriate behaviors and correct inappropriate ones. Management also may use performance appraisals as tools for making HRM-related decisions, such as promotions, demotions, discharges, and pay raises.
Compensation entails pay and benefits. Pay refers to the wage or salary employees earn, while benefits are a form of compensation provided to employees in addition to their pay, such as health insurance or employee discounts. The aim of compensation practices is to help the organization establish and maintain a competent and loyal workforce at an affordable cost.
Productivity improvement programs tie job behavior to rewards. Rewards may be financial (e.g., bonuses and pay raises) or nonfinancial (e.g., improved job satisfaction). Such programs are used to motivate employees to engage in appropriate job behaviors, namely those that help the organization meet its goals.
HRM departments within organizations, just as the organizations themselves, do not exist in a vacuum. Events outside of work environments have far-reaching effects on HRM practices. The following paragraphs describe some of these events and indicate how they influence HRM practices.
As mentioned previously, the enactment of federal, state, and local laws regulating workplace behavior has changed nearly all HRM practices. Consider, for instance, the impact of anti-discrimination laws on firms' hiring practices. Prior to the passage of these laws, many firms hired people based on reasons that were not job-related. Today, such practices could result in charges of discrimination. To protect themselves from such charges, employers must conduct their selection practices to satisfy objective standards established by legislation and fine-tuned by the courts. This means they should carefully determine needed job qualifications and choose selection methods that accurately measure those qualifications.
- Social, economic, and technological events also strongly influence HRM practices. These events include:
- An expanding cultural diversity at the work-place
- The emergence of work and family issues
- The growing use of part-time and temporary employees
- An increased emphasis on quality and team-work
- The occurrence of mergers and takeovers
- The occurrence of downsizing and layoffs
- The rapid advancement of technology
- An emphasis on continuous quality improvement
- A high rate of workforce illiteracy
These events influence HRM practices in numerous ways. For example:
- Some firms are attempting to accommodate the needs of families by offering benefit options like maternity leave, child care, flextime, and job sharing.
- Some firms are attempting to accommodate the needs of older workers through skill upgrading and training designed to facilitate the acceptance of new techniques.
- Some firms are educating their employees in basic reading, writing, and mathematical skills so that they can keep up with rapidly advancing technologies.
Unions often influence a firm's HRM practices. Unionized companies must adhere to written contracts negotiated between each company and its union. Union contracts regulate many HRM practices, such as discipline, promotion, grievance procedures, and overtime allocations. HRM practices in non-unionized companies may be influenced by the threat of unions. For example, some companies have made their HRM practices more equitable (i.e., they treat their employees more fairly) simply to minimize the likelihood that employees would seek union representation.
Legal, social, and political pressures on organizations to ensure the health and safety of their employees have had great impacts on HRM practices. Organizations respond to these pressures by instituting accident prevention programs and programs designed to ensure the health and mental well-being of their employees, such as wellness and employee assistance programs.
Today's global economy also influences some aspects of HRM. Many firms realize that they must enter foreign markets in order to compete as part of a globally interconnected set of business markets. From an HRM perspective, such organizations must foster the development of more globally-oriented managers: individuals who understand foreign languages and cultures, as well as the dynamics of foreign market places. These firms also must deal with issues related to expatriation, such as relocation costs, selection, compensation, and training.
Someone wishing to enter the HRM field may choose one of two routes: generalist or specialist. Entry-level HRM generalist positions are most often found in small or mid-sized organizations that employ few HR professionals—one or two people who must perform all functions. Because of their many responsibilities, HRM generalists have neither time nor resources to conduct in-depth studies or projects. They usually hire outside consultants who specialize in these kinds of services. For example, consultants might help the organization to revamp its compensation system, validate its selection practices, or analyze its training needs.
In larger organizations, each HR professional's area tends to be more focused, zeroing in on particular HRM tasks. Individuals holding these positions are called HRM specialists. Exhibits 1a and 1b describe some traditional and newer HRM specialty areas.
In most professions a direct path leads to entering the field. For instance, someone aspiring to be a lawyer, physician, accountant, or psychologist enrolls in appropriate educational programs and enters the field upon receiving a degree or license. HRM is atypical in this regard; people may enter the profession in a variety of ways. For instance, most of today's HR professionals enter the field through self-directed career changes. Approximately one-third of these individuals entered HRM by transferring from another part of the company; the remainder entered from other fields such as education, social services, accounting, sales, and administrative secretarial positions.
HR professionals entering the field directly out of college (about one-third of all HR professionals) traditionally come from a variety of academic backgrounds, including business, psychology, and liberal arts. More recently, however, HRM new hires have earned degrees in some area of business, such as HRM, management, or general business. For instance, when it hires recent graduates for entry-level HRM positions, Bell Atlantic considers business school graduates with concentrations in business administration, finance and commerce, management, or industrial relations. A survey of HR professionals revealed the following college majors: HRM (17 percent), business administration (23 percent), management (13 percent), psychology (12 percent), and labor/industrial relations (10 percent).
As one might expect, large organizations provide the greatest opportunities for HRM career growth. Most senior-level HR professionals take one of two paths up the corporate ladder. Some begin their careers as specialists and eventually become managers of their specialty units. To advance beyond this level, they must broaden their skills and become HRM generalists. The other path to securing a senior-level HRM position is to begin as an assistant HRM generalist at a small plant or unit within the organization and advance into an HRM managerial role at successively larger plants or units. An HRM career in manufacturing might progress as follows:
- The individual is hired as an HRM assistant at a manufacturing plant.
- Within five or six years, the individual advances to the HRM manager's post at the plant.
- Between six and ten years, the HR professional becomes the HRM manager at a larger plant.
- During the eleven-to-fifteen-year range, the person reaches a senior-level HRM position at the divisional level and has several HRM generalists and/or specialists reporting to him or her.
- Between fifteen and twenty years, the person reaches a senior-level executive position, such as vice president of human resources.
HRM Specialty Areas
TRADITIONAL SPECIALTY AREAS
Conducts training needs analysis; designs/conducts/evaluates training programs; develops/implements succession planning programs.
Develops job descriptions; facilitates job evaluation processes; conducts/interprets salary surveys; develops pay structure; designs pay-for-performance and/or performance improvement programs; administers benefits program.
Helps resolve employee relations problems; develops union avoidance strategies; assists in collective bargaining negotiations; oversees grievance procedures.
Assists in the HR planning process; develops/purchases HR information systems; develops/updates job descriptions; oversees recruiting function; develops and administers job posting system; conducts employment interviews, reference checks, and employment tests; validates selection procedures; approves employment decisions.
Develops accident prevention strategies; develops legal safety and health policies; implements/promotes EAP and wellness programs; develops AIDS and substance abuse policies.
Develops and administers affirmative action programs; helps resolve EEO disputes; monitors organizational practices with regard to EEO compliance; develops policies for ensuring EEO compliance, such as sexual harassment policies.
Conducts research studies, such as cost-benefit analysis, test validation, program evaluation, and feasibility studies.
(cont. Exhibit 1b)
HRM Specialty Areas (cont.)
NEW HRM SPECIALTY AREAS
Work and Family Programs
Develops and administers work and family programs including flextime, alternative work scheduling, dependent-care assistance, telecommuting, and other programs designed to accommodate employee needs; identifies and screen child- or elder-care providers; administers employer's private dependent-care facility; promotes work and family programs to employees.
Translate the manners, mores, and business practices of other nations and cultures for American business people. Other cross-cultural trainers work with relocated employees' families, helping them adjust to their new environment.
As a company's health-care costs continue to escalate, employers are embracing managed-care systems, which require employees to assume some of the costs. Employers hire managed-care managers to negotiate the best options for employees.
Develop policies and practices to recruit, promote, and appropriately treat workers of various ages, races, sexes, and physical abilities.
HR professionals primarily are responsible for developing HRM practices that enhance a firm's competitive advantage. HR professionals also have the responsibility to ensure that employees are treated ethically. Almost all HRM decisions have ethical consequences. Despite the abundance of laws designed to ensure fair treatment at the workplace, employees often are treated in an unethical manner. In some instances, employers skirt the law; in others, the letter of the law is followed, but employees are nonetheless treated unfairly by management or by other employees. One survey revealed that the most serious ethical problems involve managerial decisions regarding employment, promotion, pay, and discipline that are based on favoritism, rather than ability or job performance.
HR professionals play three roles in the area of workplace ethics. One role is monitoring: they must observe the actions of organizational members to ensure that all individuals are treated fairly and legally. Second, HR professionals investigate complaints bearing on ethical issues, such as sexual harassment or violations of employees' privacy rights. Third, HR professionals serve as company spokespeople by defending the company's actions when confronted by a regulatory agency or the media.
Furthermore, HR professionals should act ethically themselves. When faced with ethical dilemmas, HR professionals must be willing to take a strong stand, even if it means putting their jobs at risk. If they choose to turn a blind eye, they become part of the problem and thus must assume some of the blame.
HR professionals should be guided by the Society for Human Resource Management Code of Ethics, which dictates that HR professionals should always:
- Maintain the highest standards of professional and personal conduct
- Encourage employers to make fair and equitable treatment of all employees a primary concern
- Maintain loyalty to employers and pursue company objectives in ways consistent with the public interest
- Uphold all laws and regulations relating to employer activities
- Maintain the confidentiality of privileged information
SEE ALSO: Human Resource Information Systems
Lawrence S. Kleiman
Revised by Tim Barnett
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Kleiman, Lawrence S. Human Resource Management: A Managerial Tool for Competitive Advantage. Cincinnati: South-Western College Publishing, 2000.
Lado, A.A., and M.C. Wilson. "Human Resource Systems and Sustained Competitive Advantage: A Competency-Based Perspective." Academy of Management Review 19, no. 4 (1994): 699–727.
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