Human Resource Management and Personnel Management Essay

Introduction 1. This report discusses the historical development of Human Resource Management (HRM), identifies the role and purposes of HRM, and also to distinguish between personnel management and HRM. The Chartered Institute of Personnel and Development (CIPD) defines personnel management as â€Å"the part of management concerned with people at work and with their relationships within an enterprise. It aims to bring together, and develop into an effective organisation, the people within an business, having regard for the welfare of the individual and of working groups, to enable them to make their best contribution to its success.† HRM may be defined as â€Å"a strategic and coherent approach to the management of an organisation’s most valued assets: the people working there who individually and collectively contribute to the achievement of its objectives for sustainable competitive advantage†. The Nature and Development of Personnel management 2. HRM obtained acknowledgment in the late 1970’s in the USA, as a label for the way companies such as IBM were managing their people. These companies applied the principles outlined by David Guest (1989) to gain a competitive edge over their competitors. These four principles are listed below. a) Strategic integration -â€Å"the ability of organisations to integrate HRM issues into their strategic plans, to ensure that the various aspects of HRM cohere and for line managers to incorporate a HRM perspective into their decision making†. b) High commitment – â€Å"people must be managed in a way that ensures both their genuine ‘behavioural’ commitment to pursuing the goals of the organisation and their ‘attitudinal’ commitment, reflected in strong identification with the organisation†. c) Flexibility – â€Å"HRM policies must be structured to allow maximum flexibility for the organisation, so it can respond to ever changing business needs: for example, by encouraging functional versatility in employees and by creating ‘an adaptable organisational structure with the capacity to manage innovation†. d) High Quality – â€Å"The notion of quality must run through everything the organisation does, ‘including the management of employees and investment in high-quality employees, which in turn will bear directly on the quality of the goods and services provided†. Personnel management can be traced back to second half of the nineteenth century when Victorian workers were hit hard by the industrialisation, and urbanisation of Britain. Companies such as Cadbury and Rowntree, initiated programmes for their employees managed on their behalf by ‘industrial welfare workers’, the philosophy behind these people was that in the welfare tradition, the work and responsibilities of the personnel officer was directed to the employees, rather than to the strategic concerns of the organisation and its management. The programmes included facilities such as company housing, health care, education for workers’ families and so on. The motivation for these measures included, that they reflected a wider social reform, led by political and religious groups. In the USA groups like Quakers were abolishing slavery, and striving to increase business performance by the moral and social enhancement of their employees. Moreover, as more motivation to convert to these programmes, improved health and education for the workers and their families meant that these employers would have a better reputation with employees and consumers, employees would be more committed and motivated, also there would always be great demand for a job within the company. This can be linked to Maslow’s theory on the hierarchy of needs, in which he states that workers are motivated by five different needs. Physiological- pay, holidays (lower order need) Safety – Health and safety measures, pensions (lower order need) Social – formal and informal groups, social events (lower order need) Self-esteem – power, promotion (higher order need) Self-actualisation – challenging work, developing new skills (higher order need) These programmes and jobs would provide something for each of the lower order needs, therefore increasing motivation throughout the workforce. Furthermore, consumers would feel morally better as they were buying products that were helping the working classes. This could be considered very similar to the ideas linked with the popularity of fair trade products in modern day society. The demise of the working class was outlined at this time when the British government had problems recruiting troops for the Crimean and Boer wars, as many people failed the medical, and the health of the nations labourers was brought into the limelight. The need for negotiation, conflict resolution and the management of relationships between labour and management occurred in 1871 with the legislation of trade unions. This was recognised politically, with formation of the aptly named Labour Representation Committee in 1900, which was renamed in 1906 as the Labour party, which was largely funded by the trade union development. In 1911, the National Insurance Scheme created the first welfare provisions for workers in the result of illness, or unemployment. The establishment of the Ministry of Labour to address wider issues and representations quickly followed this in 1916. In the 1930’s and 40’s management theorists changed attributes of their theories, as scientific management which was in current use came under scrutiny for dehumanising employees. This is when the HRM approach began to appear, being backed by Maslow, Herzberg, and McGregor who shifted their attention to the higher order needs, as shown above on Maslow’s hierarchy of needs. The new key to motivation of the workforce involved ‘job satisfaction’, which it was then believed, could not be achieved just from ‘maintenance’ factors like pay and working conditions. The governments influence on industrial relations, and the workforces continued until the mid 1970’s in conjunction with social reforms in health and education. After this time the UK government did not interfere in collaborated relationships between the employer and employee, with the exception of trade union reform. In spite of that the latter half of the twentieth century saw extreme legislation in all sectors of employment. It was during this era that the industrial relations tradition suggests that the work and the responsibility of the personnel officer was to mediate and even arbitrate between the sides in industrial disputes, to facilitate collective bargaining, negotiation and compliance with the current industrial relations laws. As a response to the escalating speed of organisational expansion and alterations, the control of labour tradition suggests that the work and responsibility of the personnel officer is to support management by regulating the range of workplace activity. This includes job allocation, performance, absenteeism, pay, communication, training, and so on. The CIPD have endeavoured to establish personnel management as a career, by providing a programme of learning resulting in a qualification. However, many personnel managers do not posses this qualification and this is rarely seen as an obstruction within the career. It is safe to say that all personnel managers will use remnants of the welfare, industrial, and the control of labour traditions to become part of the professional tradition that is occurring today. The Role and Tasks of the Personnel Function 3. Personnel specialists can take various roles like line mangers, advisors, service providers, auditors, Co-ordinators and planners and in today’s modern world of rapidly developing technology, ethics, and growing organisations in any business there is need for specialist advice on personnel matters, whether it is internal or external. This is because the practise of personnel management needs to be consistent, impartial, proficient and on course with organisational goals, as there are constant developments in this field that require expertise in the area of personnel management. The need for this specialist has several contributing factors including the need to comply with changing regulation and legislation, for example the personnel specialist may be used to recruit staff to avoid sex or racial discrimination. Constant changes within the labour market have also meant that policies need to be designed by someone with current knowledge on the matter. Moreover, trade unions, industrial tribunals, and the Advisory, Conciliation and Arbitration Service (ACAS) have a continuous role in employee relations; therefore having some one who is familiar with the legislation amongst other things that is used would be very useful. However, since there the existing role of the personnel manager is so diverse there are different models derived by different theorists. A popular model is that suggested by Tyson and Fell (1986). The three roles that they suggest are: * The clerk of works model – all authority for actions is with line managers. Personnel policies are formed after the actions that created the need. Policies are not integral and are short term and ad hoc. Personnel activities are routine and involve day-to-day administration. * The contracts manager model – Policies are established, often implicit, with heavy industrial relations emphasis. The personnel department will use fairly sophisticated systems especially with regard to employee relations. The personnel manager is likely to be a professional or experienced in industrial relations. They should take on the role of policing the implementation of policies, but does not create them. * The architect model – Explicit corporate personnel policies exist as part of the corporate strategy. HR planning and development are important concepts. The head of the function is likely to be on the Board of Directors, and is therefore seen as a professional, making an important contribution to the business. Policies are often formed to assist in the personnel function to make sure that people are treated equally, and that laws and regulations are met. These can include equal opportunities, disciplinary policies, and safety policies. The policies are based upon legislation put in place by the Government and the EU in certain areas like safety. The values and philosophies of the business about how the employees should be treated and what kind of behaviour will enable them to work most effectively on the organisation’s behalf. The needs and wants of employees, and the organisations need to attract and retain the kind of employees it wants by its reputation of practice as an employer. The Shift in Approach Which Has Led to the Term HRM 4. Throughout history the social change has been reflected in personnel management, and which also changes in conjunction with the social needs. This is shown by the implementation of legislation and rules, to stop discrimination and aid safety measures, as the social climate becomes more morally aware of the workforce. In the late nineteenth century it would not have been unheard of for people to die at work, even into the twentieth century there were still accident that occur to labourers working in primary industries, but this became more shocking, as with the development of technology it was publicised by the media and made safer by improvements, as a company realised that its image was very important. A political and economic change is also evident through out history, for example in the 1970’s when the government would no longer interfere with some matters between employer and employee relations, this is because it was realised that full employment was not as important as controlling inflation and other economic factors. Also HRM has become common through out the business world and is thoroughly integrated into the organisational structure of a business. This is because it has been found that companies use this approach in different strengths to achieve a competitive edge over their rivals. Today companies like Marks & Spencer, McDonalds, and even public sector businesses like British Gas are using various strengths of HRM. Recommendations 5. To draw conclusion, it is my recommendation that Phoenix Tannoy Ltd. consider establishing a HR department as it is shown in history that the use of HRM does give a competitive edge over rivals, by motivating employees. The reality is that by moving to a HR department Phoenix Tannoy will motivate its workforce by implementing policies and procedures that benefit all the staff. Motivated staff are then more committed to the organisation, and motivated into doing the best they can to help the business achieve its goals. Moreover, a HR department would remove the depersonalised face of the personnel department and make the company less bureaucratic.