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PROFILE

SAIFUDDIN

COLUMN FOR THE RECORD
POLITICS & POLICY SAARC SUMMIT
COMPANY PROFILE FAYSAL BANK PERFORMANCE 2003
MANAGEMENT CONCEPT OF MANAGEMENT IN ARMY
SOCIETY HRM TRENDS AND CHALLENGES

 

HRM TRENDS AND CHALLENGES

 

Dr Mushtaq Sajid
Dec 29 - Jan 04, 2003 


 

 

The theme of this article is to establish the nature and importance of HRM and how it emerged, to provide some evidence of its context, and to discuss its potential and future development. This article is not intended to be a solely about human resource management but includes a comparisonand analysis about its parents discipline as well. It will also examine some of the alleged differences and similarities between both subjects and terms.

HR requires more attention and careful management then any other resources of the organizations. In the 1980's and early 1990's the term HRM (human resource management) came into academic horizons. It used increasingly by the practitioners and researchers worldwide. The last two decades have seen a marked change in HRM particularly in those activities, which involve acquiring, developing motivating and utilizing human resources actively in the business. The major purpose of HRM is to increase and improve the productive contribution of personnel to the organization in more ethical, social, and administratively responsible way. This purpose emerged from commonly called industrial relations, personnel administration, industrial psychology, and personal management. HRM is not just another personnel management fad. Research shows that its aim is to create a whole organizational culture that binds workers to the company's objectives with full professional commitment, integration, and quality work.

The 21 century will bring with it enormous opportunities but also enormous pressure, if the companies will not improve the productivity of the people and treat them "human being' which are the vital objects of all the economic activities leading towards industrial development. Now it is worldwide consensus that human resource is one of the major means of increasing efficiency, productivity and prosperity of the firm.

The present scenario of HRM did not suddenly appear. A review of this evolution shows how the effort of early pioneer led today's more sophisticated and more proactive method of utilization 6M's i.e, man, money, material, machine, method and market.

Indeed, the human resources planning have been a function of management since the origin of modern organization. In 1890, Alferd Marshal observed that the head of the business must assure himself that his managers, clerks and foremen are the right men for their work and are doing their work extremely well. Human resource planning is not a recent notion but it goes back right from the very beginning of the social and industrial management. Division of labor, organization of management into various levels, work simplification, application of standard for selecting employees, arrangement of short-term and long-term training programs and measuring the performance were all principles applied early in industrial management. In world wars and the post war era the human resource planning and management focused intensified on employees productivity and efficiency.

With some difference of opinions, management scientists now reached the consensus that HRM had its origin overwhelmingly in USA experience along with rich literature and strongest empirical foundation. It is argued that that the HRM originated in USA in the early 1980's.

However the term HRM challenged frequently replaced the previous popular term discipline personnel management and industrial relation (IRs). Moreover students in universities appeared to respond more positively for the enrolment of the new course HRM, whereas, the courses concerned personnel management/industrial relations are also existing in academic circles with comparative less popularity.

The major American and British Business schools introduced HRM courses in to their core curriculum. It seems that HRM has become a fashionable and favorable topic all over the world both in management theory and as applied management practice. The diagrammatic overview of the model from personnel management to human resource is as under:

The diagrammatic overview of the model from personnel management to human resource is as under:

Table 1

Development of PM functions.

Acolyte of Benevolence.

Human Bureaucrat.

Consensus negotiator.

Organization man.

Man Power analyst.

Tensions within PM function.
Employee interests.
Versus organizational interest.

Resolving the tension:

The integration.

Employee commitment.

Flexibility Adaptability.

Quality.

(Guest-1987) Strategic Role for HRM/PM managers.

 

 

From personnel Management to HRM: An overview.

HOW HRM IS DIFFERENT FROM PERSONNEL MANAGEMENT?

There are number of differences between human resource management and personal management. It is obvious for the above terminology the predominant theme which is held to differentiate HRM from its predecessor,, personnel management, is a broadening or widening notion. The leading advocates of HRM, who are actually behavioral scientists in the USA, see it as an organization-wide philosophy, which is much broader and more strategic, oriented and fewer problems centered than personal administration. Its implications and long run goal interpretation place it as something new and different.

George Straus has compared the messages of the original human relations literature with that of the organization development and change models of the 1960's and 1970's.

In the shape of the summary, the following table 2 sets out the differences in the textual treatment of human resource management and organizational practice of personnel management:

TABLE 2
THE DIFFERENCES OF PERSONAL MANAGEMENT AND HRM

Comparison

Personal management

HRM

Time and planning perspective

Short-term, reactive adhoc and marginal

Long run proactive strategic and integer

Psychological contract

Compliance

Commitment

Control system

External control

Self control

Work relation perspective

Pluralist, collective, low trust

Unitarist, high trust individual

Preferred structured system

Beaureacratic centralized defined roles

Organic, developed flexible roles

The roles

Specialist and professional

Largely integrated into line management

Evaluation

Cost- minimize

Max utilization

The above table shows a comparison between HRM and personnel management, which have been highlighted by British writer and emphasized here the fact that these specific differences are due to competitive, integrated nature of the product market environment; and high performance of individual companies which accord HRM relatively high priority; thirdly the declining level of unionization of USA and UK, finally, the relatively limited power and status of personnel management function in individual organizations the white collar sector of employment is increasing.

The major four stages of growth and evolution of the human management (HRM) function are follows:

THE REACTIVE HRM FUNCTION

Here the main purpose is seen as maintaining harmony and avoiding disruption through strikes etc and exists generally where organizations are operating in near monopoly situations with assured growth the interactions between HR and operating managers being assured under normal situations at this stage.

THE INDEPENDENT HRM FUNCTION

Here the function is recognised as an independent entity. In this stage, while HR is survived in setting up industrial systems and procedures for operating managers, but is not fully responsible for the monitoring or correcting the problems in the systems only being marginally involved in various processes and other functions or results. Other functions would mostly seek HR's help in administrative or on few specific issues, and line managers do not see HR as a repository of expertise.

 

 

THE SUPPORTIVE HRM FUNCTION

This has its own direction with distinct status within the organisation, and actively contributes to the efforts of other functions in producing results. Oganistaions requiring product or technology changes rapidly in a competitive scenario generally need such HR involvement with high demands for qualified and competent manpower, often in a high turnover or mobility situation. Emphasis on people development and motivation generation comes from such HR, but their understanding or involvement in total business perspective remains limited or inadequate, even with higher functional participation.

THE INTEGRATIVE HRM FUNCTION

This is the stage when the competitive success of the organisation involves HRM significantly in an integrated manner, and demands such capabilities from the HR specialists. Their roles shift from a facilitator to a functional peer with competencies in other functions, and are recognized as an equal partner by the others. The typical HRM in this case is geared to contribute to organizational objectives of profitability for monitoring employees' satisfaction, since it is seen as surrogate to customer satisfaction.

They went on to state that "catalyst for such alignment" was evident from McKinsey's and-S framework model. According to this framework, effective organisation change is a complex relationship between seven S's. HRM is a total matching process between the three hard S's (Strategy, Structure, System) and the four Soft S's (Style, Staff, Skills, Super-ordinate goals). Clearly, all the S's have to complement each other and have to be aligned towards a single corporate vision for the organisation to be effective. It has to be realized that most of the S's are determined directly or indirectly by the way human resources are managed, and therefore, HRM must be a part of the total business strategy. There is also a great deal of emphasis about the need for "Strategic HRM" today. The first on strategic management, the other on human relations.

The Michigan group developed the notion of strategic HRM that entailed the interconnection of business strategies, organisational structures and HRM, where HRM systems were best designed to support the implementation of corporate strategy. At the heart of the Harvard approach is the responsibility and capacity of managers to make decisions about the relationship between an organisation and its employees such as to maximize the organisational outcomes for key HRM stakeholders. It focuses on manager's responsibility to manage four key HRM policy areas: employee influence (participation), human resource flow, and the reward systems and work systems.

Yet another school of thought called "open" or "contingent" approach argues that competitive advantage will accrue to those best able to exploit environmental opportunities and avoid or survive threats; and that the strategic management of human resources will assist organisations in this by encouraging and generating the appropriate sorts of behaviours, attitudes and competencies from employees. Whichever way it may be defined, ultimately, a strategic approach to human resource management must culminate in the implementation of policies and practices designed to enable, support and engender behaviours consistent with organisation's strategic intent. This demands achievement of a good fit between HR and the business strategy. Once the strategic plan is formulated, the focus has then to shift to strategy implementation a process of aligning the functions of an organisation with the strategy in order to achieve the business results. This valuable academic debate is useful for determining policy and direction and to decide for each organisation the course best suited to meet their vision and mission. They have to formulate. The above may sound quite theoretical, but one of the issues that often exists and need to be corrected, is the identification of the stage of HRM that is best needed for the results in any organisation, and the actual situation that exists. It has been my experience that there are considerable differences in what is stated or structured, to what is the actual situation, and specially compared to what is best required. In fact, to a large extent these are personality driven depending on or varying with personal relationships and the trust between each of the top management members, and are often based on their individual competencies and limitations, and not necessarily as designed or intended. At a practical level we must anticipate and prepare for the likely HR challenges in general that exists, or may be expected in the coming future the main purpose and theme of this article. They are: Consequent to the vastly increased competition for many, and likely in future, due to rapid development of technology, especially, the impact of IT, and internal necessities, and/or resulting from above stated causes.

 

 

With technology upgradations, much greater use of it and forthcoming e-commerce etc. new breed of 'knowledge workers' in 'learning organisations' will make the differentiation. This intellectual capital will demand much nurturing from the enterprise, in order to give back in the shape of superior results. Considerable work will be essential in building a positive organisational climate, within which improving performance level is not only appreciated and rewarded, but becomes a way of life. The HR team will be only one of the important pillars, and the other functions will certainly and equally have to do a lot of upgrading for improving the organisational results.

Team work, will therefore, be a key driver in any organisation, that will demand and result in high performance both at all individual levels and also across functions and teams continuously and consistently. It goes without saying that the effective management of Industrial relations will continue to demand a very high priority not just to 'do well', but now for the very survival of both the organisation as well as employee jobs. Flatter organization structures are getting to be the order of the day, instead of fatter organisations empowerment and modern management information systems has made the increase in span of control, delayering and restructuring with optimum manpower utilization possible. Managerial productivity has been a neglected area for most, and value addiction from this area will demand far greater attention.

Use of modern HR techniques and tools will become a necessity to change from the managing by instinct" syndrome. These will include strategic measurement systems, score cards, surveys etc. as a base to help make quality decisions. Building of self-driven and committed employees with competencies necessary for high level of sustained performance has always been major challenge to HR and top managers of any enterprise, and this is getting accentuated day by day. Retention and motivation of key employees, and their backups, will therefore, be a major challenge for which career planning will be important. Creating an open organisation culture with empowered employees, as the foundation to build such commitment, will be another major policy challenge for the HR people in particular. No organisation can remain an island, and therefore the leadership will have to play a greater role in contributing and anticipating actively in the environmental and society issues yet another important challenge. Similarly, planning to manage any disaster both internal and external will tax the HR managers, who will have a much larger contributory role in this area in the coming future, along with others. The performance of HR managers along with their other team members will be an important key and a vital success factor. They will need far greater support and involvement from the top management and other functions towards maintaining and ensuring the future success of the twenty-first century organizations.

HUMAN RESOURCE CHALLENGES

As the time moves on steadily and relentlessly in the new millennium we need to review the challenges for the HR function and its responsibilities in organizations to cope with the new trends. In the start of the century it is a very convenient to know how far and in what direction we are progressing, but also give the distance to our destination, and are often excellent anchors to take time off to re-examine the future course of action for the organization and resource management.

It can now be said that we have moved to the era of not just change, but an accelerated rate of change. As compared to the past, the twenty-first century corporations are getting to be globally market driven ones with 'invest anywhere and share everywhere' concept.

In short, the early practices of jobs forecasting succession planning has broaden into a concern with establishing a more explicit linkage between human resource planning has broadened into a concern with establishing amore explicit linkage between human resources planning and the larger organization strategy and business planning of the organization. Moreover the idea of selection, training, performance appraisal and compensation decisions being heavenly centered on the role of individual employee, with their details job description, has guided that effective team working and participative decisions are playing important roles to achieve the effective performance in business organization. In conclusion, still there is a strong contention and race of struggle to take the lead in the academic and professional field but obviously only time will fill which of these and other possible rival scenarios will offer more accurate description of the reality in future.