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People Management
and PsychologyWeek 1 Introduction to HRM
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Week 1 - Introduction to HRM
Week 2 HR Planning
Week 3 Job Design
Week 4 Recruitment and Selection
Week 5 Performance Management Week 6 -Training
Week 7 - Leadership
Week 8 - Conflict
Week 9 Power Week 10 Review
Course Overview
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No universal definition.
Many academics have written on the subject with no onedefinition agreed.
Storey (1995:5) defines HRM as a distinctive approach toemployment management which seeks to achievecompetitive advantage through the strategic deployment
of a highly committed and capable workforce, using anarray of cultural, structural and personnel techniques
Definitions of HRM
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Features of HRM Models and Theories
There are four main features which emerge in HRM models andtheories
Integration of human resource policies with each other andwith the organisations business plan. HRM is a key instrumentof business strategy, viewing employees as important assets.
Responsibility for managing people moves from personnelspecialists to senior managers. Specialists provide aconsultancy service for line managers.
Employee relations shift away from collective bargaining -dialogue between management and unions. Instead, direct
discussion between management and individual employees isencouraged.
A stress on commitment to the organisation and personalinitiative
* Sisson K. (1990) Introducing the Human Resource Management Journal, Human Resource Management Journal 1(1): 1-11
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HRM Overview
HRM has theoretical roots in the US Business Schools. Historically: A first wave arose with Storeys New Perspectives on HRM
(1989)
The second wave arose in consideration of:
Social and economic context of HR functions
HR and organizational performance
New organizational forms and HR
HR and knowledge management (1990s)
The third wave (current) looks at the strategic implications ofHRM, known as Strategic Human Resource Management(SHRM)
Other debates exist around:
The differences between HRM and personnel management
Employee manipulation
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Factors determining its place in the organisation
Age, Size, Ownership
Trade Union presenceType of Leadership or Management Style
History e.g. Public to private
Organisational Sector (Telecoms, Airline)
Culture of organisation (driven by all of the above)
A Framework for HRM Analysis
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Soft
Commitment, Quality & FlexibilityPartnership
Hard
Resources like any other
Cost EfficiencyDrive for performance
Lean Production
Staff & Management
Soft and Hard HRM may not necessarily be incompatible.
There may be different variants.
Style
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Personnel Mgt HR Mgt
Planning Perspective Reactive
Crisis Mgt input
Proactive
Strategic Planning
People ManagementPerspective
Cost Efficiency
Productivity
Resource rather than cost,
Overall commitment andflexibility,
Increased efficiency
Employee RelationsPerspective
Pluralism directresponsibility of mgt
Unitarism
High Commitment work
practices
Structure Perspective Bureaucraticstructures
Need for change andflexibility
Role Perspective Specialist Function Line ManagerEmpowerment
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What is HRM? (1)
HRM is linked to the management ofhuman capital:
It is linked to a view of the employee as an economic asset
Itcan be described as a strategic approach to managingemployment relations that emphasizes human core competences to
create competitive advantage This is achieved by distinctive employment practices
It draws on organizational psychology (areas of motivation, roleperception etc)
It is linked with employment relations and problematic issues
connected with this, and forms part of sociological studies
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What is HRM? (2)
HRM relates to a workforce that embodies a mix of skills andcapabilities
Commitment and learning are emphasized
HRM links HR functions to OB problems
HRM entails:
An economic contractual relationship (pay/effort bargain)
A legal and social relationship
A psychological contract
HRM is built on the premise that the human capital of theemployee can have strategic importance and value
Hence employment policy is coherent when integrated with strategic policy
Some element of conflict of interest between workers and employersnevertheless remains, and the management of this is down to HR
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OB Theories and HRM Practices
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The Psychological Contract
The psychological contract relates to the two-wayexchange between employee and employer
Rousseau (1995) defines it as:
Individual beliefs, shaped by the organization,regarding terms of an exchange agreement betweenindividuals and their organization...
It is viewed as a lever for individual commitment,motivation and task performance beyond expectedoutcomes...
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HRM Functions
Millward et al (2000) and Ulrich (1997) identify eight keyHRM functions:
Strategic planning the organizations HR needs/forecasts
Staffing
Training and development
Motivation - requires a rewards system
Maintenance - includes health and safety
Managing relationships - participation schemes/collective
agreements Managing change in the workplace
Evaluation procedures to institute and communicate HR Policy
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Theoretical Models of HRM
The following models provide an analytical framework for studyingHRM and a means of linking OB theories to HR
They thereby serves as an heuristic devicerelating to HR policies
The Fombrun, Tichy and Devanna model (1984)
An early model emphasising the interrelatedness of HR activities
The Harvard mode An heuristic devicefor explaining HR practices
Has an analytical base (factors/stakeholders/choices) but links with attitudinalfeatures (commitment/competence)
The Warwick model
Extends the Harvard framework
The five elements of the model are: outer context; inner context, businessstrategy content, HRM context and HRM content
Shows links between HR end environmental factors
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The Fombrun, Tichy and Devanna Model
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The Harvard Model of HRM
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The Warwick
Model of HRM
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Strategic HRM (1)
The call for HRM to link with corporate strategy was strong by thelate 1980s
Strategyisa pattern of decisions/actions undertaken bymanagement hierarchy to accomplish corporate goals. It can be
conducted at The corporate level
The strategic business unit level
The functional grass roots level (Porter, 1980)
Strategic HRM (SHRM) has roots in manpower planning but it isunclear whether it is an outcome or a process
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Strategic HRM (2)
A distinction is possible between upstream and downstreamstrategic decisions (Purcell) and this has informed the SHRMdebate
Three orders of decisions can be identified Upstream or high level corporate decisions are first order
Downstream or structural matters are second order
HR matters are third order
However, strategy in HR decisions can be determined in thecontext of the first order decisions (Purcell, 1989)
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The Matching Model
Another area of debate relates to the fit of HR and businessstrategies
This is called the concept ofintegration, which has three
aspects: Linking HR policies and practices with strategic management
Internalizing the significance of HR with HR managers
Fostering organizational commitment to strategic goals
This is known as the matching model
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A Matching Model of Strategic HRM
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The Resource Based Model
An alternative theory is the resource based model, which linksresource aspects with strategic policy
This is connected with the view of the employee as an asset to becultivated, a feature ofhuman capital
Barney (1991) argues that four characteristics of human capital are important:
Sustaining competitive advantage
Inimitability (of product or service)
Rarity (of core competence)
Non-substitutable product or service
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The Resource Based View of theFirm
The relationship amongresource endowments andsustained competitiveadvantage
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SHRM: Does it work?
SHRM theories work on the premise that a link betweenbusiness and HR strategies will lead to high performance
the HRMperformance link
SHRM is a genre of academic research
Overall, only a minority of workplaces have followed thepremises set out by proponents of SHRM
Some studies have found positive correlations between bundles of
SHRM practices and superior organizational performance However, evidence is not conclusive
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A Model of the HRM--Performance Linkage
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International HRM (1)
A central concern is the transferability of HRM models at a globallevel, because organizations seek to leverage resources at aninternational level in the teeth of fierce competition
This affects patterns of national employment relations. HR practicesaffect:
Global recruitment and selection
Training and reward management at an international level
Recruitment of expatriates
It is necessary to consider aspects of the host country, as theemployment relationship is affected by factors such as:
Cultural/legislative context
National regulatory framework
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International HRM (2)
A debate has occurred about the distinction betweenInternational HRM (IHRM) and Strategic InternationalHRM (SIHRM):
IHRM is viewed as pro-Western in ethos
SIHRM is viewed as attached to MNCs, connecting IHRM tostrategy
SIHRM contains a tension between global competitiveness orcentralization and issues of local specification of strategy andadjustment to cultural sensitivities
TNCs/MNCs need to achieve a balance between these conflictingforces
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International HRM (3)
Tensions between SIHRM and IHRM can also be felt inthe following areas:
Recruitment and selection practices and employment regimes
Reward apportionment
Performance appraisal (arguably best performed in the hostcountry)
Transfer of distinctive competences from head office to local level
The International HRM cycle tabulates these kinds ofissues (see the next slide)
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The International HRM Cycle
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International HRM (4)
Does SIHRM reflect the convergence of HR practices and the interests ofUS capitalism? Answers to this question form part of the convergence-divergence debate
It is argued that TNCs contribute to a homogenous or universalist HRMethos (ie convergence)
On the other hand, there are local practices or rationalities of HRM invarying countries (ie divergence)
It is argued that universalist/individualistAnglo-Saxon HRM cannot easily locate inthe same manner across diverse geographical contexts of TNCs
This said, the idea of an Asian HRM is problematic; but much diversity of practicedoes exist across the world
Overall, some degree of convergence does exist but it is not absolute
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Diagram reflecting the Convergence/Divergence Debate on IHRM
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Paradoxes in HRM
A paradox occurs when managers try to accomplish a goal in amanner contradictory to the very goals the organization seeks toattain
Critics have drawn on the idea of a paradox of consequences deriving from atension between HRMpolicies and practices
For example, tension between a psychological contract and formal practicesor procedures etc
The soft versus hard aspects of HR might be said to express some degree ofambiguity about the aims of HRM
Karen Legge (2005) has exposed the rhetoric of soft or caring HRM asbeing a foil for a managerial agenda
This can be seen at a practical level for instance the tension between shortterm goals (accounting/financial) and longer term investment - for instance instaff training