Topic 1: Personnel to SHRM.

The role of HRM in NZ

114.241 Managing Human Resources
Presented by Paul Toulson
SEMESTER ONE 2013 MANAWATU CAMPUS THURSDAY 28 FEBRUARY 2013

Overview of Presentation
What is HRM?

Historical development: Welfare Officer to SHRM Theories & Principles

Strategic HRM Horizontal and vertical fit Best Fit vs Best Practice The role of the HR manager

Challenges for HRM / HR managers

What is HRM?
A management discipline: managing people

The effective and efficient management and

productive use of people through plans, processes & policies in achieving the:

organisations strategic business objectives, and satisfaction of individual employee needs

Draws on a wide knowledge base e.g. psychology, management, sociology & economics

HRM System
HRM activities / practices

Activities: Key functions of HRM Practices: Actions aimed at achieving a specific HRM purpose or goal sequences of HRM practices combined to achieve more complex outcomes

HRM processes

e.g. the process for recruiting job applicants

HRM policies

formal written statements outlining an organisations stance on various HR activities, practices or processes

e.g. the policy for managing a personal grievance

HRM procedures

detail precisely what action is to be taken in a particular situation

e.g. the procedure for applying for annual leave

HRM Activities
Staffing the firm Managing / Maintaining Employees
Human resource

Human resource

planning Job analysis Recruitment Selection

development Managing performance Employee motivation Remuneration / reward Health and safety (H&S) HR information systems (HRIS) Evaluating HRM

Contemporary Issues in HRM

International HRM Differences between domestic and Intl HRM strategies & activities Expatriate management; repatriation Employee diversity Population demographics, labour supply, customer requirements Workforce demographics Affects all areas of HRM planning, R&S, T&D, motivation, WLB etc Human Rights Act 1993 Health & Safety incl employee well-being, work-life balance Workplace relations Prev. known as industrial relations / employee / employment relations Focuses on relationships within the workplace, but mainly between the organisation and its employees Unions: represent collective employee voice

A Brief History
Early influences

Mid 1700s to late 1800s Industrial Revolution people as a resource; separation between managers and employees Late 1890s to mid 1900s Scientific Mgmt focus on job design, productivity, training Industrial Welfare early focus on employee welfare Then a movement from welfare to Personnel Administration Personnel Management (1960-1980) Human resource management (1980-1990)

Welfare & Administration

Contemporary HR

Explosion of HRM and related theories

Strategic HRM (1990+)

(Armstrong, 1996; Torrington & Hall, 1995)

Personnel Mgmt vs HRM

Personnel Management
1960-1980s Tactical / Operational Short Term Focus Piecemeal Approach (no integration)

Human Resource Management

1980s-today Strategic Long Term Focus Integrated Approach (horizontal and vertical fit)

Maintain status quo

Pluralist model (stakeholders) Institutionalised Conflict (refer conflict theories)

Encourages change and flexibility

Unitarist (managerial prerogative) Teamwork and problem solving

Main Theories
Personnel Open system model (pre 1980s) Mgmt Functional view of HRM Porters Model (Porter, 1985) HRM as a support activity for key areas of business CA resides in activities of the firm; people viewed as a cost HRM Matching (Michigan) Model (Fombrun et al, 1984) Acknowledged impact of external factors on internal context Advocated best fit approach to HRM Harvard Model (Beer, 1984) Pluralistic - recognised different stakeholder interests More sophisticated than earlier unitarist models Resource Based View (RBV; Penrose 1959 & Barney 1991) Gained prominence in late 1980s/early 1990s Employees seen as valuable, inimitable resources SHRM Central theory in the shift from HRM to SHRM

Figure 3: Porters Model of Competitive Advantage and Activities

The Resource-Based View (RBV) of HRM

HRM underlying principles

Unitarist Employees interests are aligned with the organisations Managerial prerogative can act in everybodys best interests Neo-Unitarist Focuses on EE integration, engagement commitment productivity
High Involvement / High Performance work systems (HI/HPWS) Performance-related pay, profit sharing etc

Managers should create a common purpose and corporate culture Promotes employee-employer relationship ECA 1991 accelerated acceptance of this perspective; removed power of unions (characterised by conflict-based approaches)

Conflict Theories
Neo-unitarism
Radical Pluralism Conflict Inevitable under the capitalism system of class inequities Protects the interests of management Pluralism Unavoidable but can be mediated through structures and procedures. Provides the mechanisms to resolve conflict in the interest of public good and stability Co-ordinates different and divergent interest groups Stakeholders in the organisation with the right to challenge management The legitimate representative of the employees collective interests Unitarism Unwarranted and pathological to the well-being of the organisation Resists interfering unduly in the relationship between the employer and employee Controls employees through strong leadership A resource unified to achieve the organisations goals Unnecessary intrusion in the individual employment relationship.

The state

Management Employees

Exploits employees in the interest of profit Powerless and vulnerable to exploitation Inevitable as result of exploited workers protecting their own interests

Trade unions

Strategic HRM
Strategy The direction in which an organisation intends to move Drives operations SHRM focuses on the linking of all HRM activities with the organisation s strategic business objectives provides a strategic framework to support long-term business goals and outcomes HRM seen as critical to organisational effectiveness

Strategic HRM
To achieve this, HRM needs to be... A strategic partner Be involved at board / senior management level Be involved in strategic decision making Be able to demonstrate its contribution to organisation goals HRM activities must... Be vertically aligned & clearly linked with organisations strategic objectives Support culture, climate, and organisational processes Be designed to attract, motivate, deploy and retain the right people with the right skills at the right time to achieve organisations goals and, ultimately, competitive advantage

Horizontal & Vertical Fit

Horizontal (internal) fit HRM functions / activities are aligned with each other Vertical fit HRM goals & activities are aligned with business goals Challenge for contemporary HRM: to integrate a

firms HRM practices and strategies into a coherent integrated system (Macky 2008) Both kinds of fit are necessary for firm performance, but require the capability of senior mgrs, HR managers, & employees
See Wei (2006)

Best Fit vs Best Practice

Best Practice Universal set of best practices that can ensure optimum performance for all organisations (Delery & Doty, 1996) However, no universal definition Related concepts: high involvement, high commitment, or high performance work practices (Pfeffer, 1998) Best Fit Argues there is no one best set of practices Superior performance depends on a number of factors (e.g. organisation strategy, environment, labour supply etc)

Best Practice HRM?

HR planning... job analysis... recruitment & selection... Training & development

Needs assessment for training; evaluation of training; planned career development; management development Use of 360` appraisals; links to employment decisions (e.g. promotion, training needs; reward) Employee engagement; skills training; use of work teams Use of quantitative and qualitative measures to assess processes and outcomes

Performance management

Employee motivation & retention

HRM evaluation

Best Practice: Rhetoric or Reality?

Tends to vary by organisation size

Large organisations are more likely to follow BP principles; SMEs less so. Why? Uninformed - Employers may be unaware of the practices Dont appear practical for SMEs Costly to implement, especially initially HR staff lack the clout to sell their ideas to the orgn Too busy focusing on short term objectives (profits) and managing constant change to think and be strategic Takes time requires employer & emplyee commitment & retention

Why dont organisations follow best practice principles?

Some BPs are more appropriate to SMEs than others HR practices must be aligned with organisation context

sustainable fit

See Johnson (2000) & Klein (2004) NZ studies; Purcell (1999)

Role of HR Manager
Primary role To help the organisation achieve its strategic goals/objectives
Storey, 1992; Caldwell 2003) Change Agent Ulrich (1997) Strategic partner Employee champion Change agent Ulrich (2005) Strategic partner Employee advocate -

Regulator
Advisor Service Provider

Administrative expert
-

Functional expert
Human capital developer Human resources leader -

Ulrich (1997): 4 Roles of HR Professionals

HR Managers view of their roles

(Study by Caldwell, 2003 HR Mgrs in major UK companies)

Moderately Main role impt role Minor role

Advisor
Change Agent Service Provider Regulator

82%
68% 49% 32%

13%
17% 26% 38%

5%
14% 26% 31%

How HRM in NZ spends its time

Compliance/ Auditing, 14% Delivering HR services, 29%

Process Improvement, 15%

Strategic Activities, 15%

Administration, 27%

Source: Mercer HR Consulting (NZ) (2007), cited in Rudman, R. (2010) p.43

Challenges for HRM

Strategic focus vs functional/operational activities HR managers spend 60-80% admin vs 20% strategic activities (Ulrich) Achieving horizontal and vertical fit Achieving recognition at board level Attracting, motivating and developing workers with

critical and scarce knowledge, skills & abilities Creating a fair and just workplace Managing people respectfully and creatively Restoring trust lost through restructuring, downsizing and work pressures

Challenges for HRM

Ethical issues Defining acceptable behaviour Influencing employees personal lives Monitoring / surveillance Whose interests take precedence? Evaluating HRs contribution Processes & outcomes Has HR helped the org achieve its goals? Demonstrate how HRM activities contribute to sustainable CA Some outcomes easier to measure than others examples?

Challenges for HR Managers

Recognition and involvement in top management

team & corporate planning Gain and maintain credibility & professionalism

Understand the business Adopt a strategic approach Become bottom-line oriented Develop career as a professional training & development, networks, industry associations

Balance roles / competing demands and interests

QUESTIONS