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THE CONCEPT OF HRM

THE CONCEPT OF HRM. HRM DEFINED. Human resource management (HRM) is a strategic, integrated and coherent approach to the employment, development and wellbeing of the people working in organizations. DEVELOPMENT OF THE HRM CONCEPT. The Harvard framework – Beer Best Fit (Contingency)

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THE CONCEPT OF HRM

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  1. THE CONCEPT OF HRM

  2. HRM DEFINED Human resource management (HRM) is a strategic, integrated and coherent approach to the employment, development and wellbeing of the people working in organizations

  3. DEVELOPMENTOF THE HRM CONCEPT • The Harvard framework – Beer Best Fit (Contingency) • The matching model – Fombrum • Best Practice Approach – Pfeffer • Resource Based Approach

  4. THE GOALS OF HRM • Objectives • People • Employment relationship • Ethics

  5. DIVERSITY OF HRM • HRM practice varies • Hard and soft HRM - Storey

  6. THE PHILOSOPHY OF HRM • The human resource gives competitive edge • The aim is to enhance employee commitment • HR decisions are of strategic importance • HR policies should be integrated into the business strategy. (Storey, 2001)

  7. UNDERPINNING THEORIES OF HRM • Commitment • Organizational behaviour • Motivation • AMO • Resource dependence • Resource-based • Institutional • Transaction costs • Human capital • Agency • Contingency

  8. STRATEGIC HUMAN RESOURCE MANAGEMENT

  9. THE ESSENCE OF STRATEGIC HRM • Achieve integration or ‘fit’ between HR and business strategies is achieved • Take a longer-term view of where HR should be going and how to get there • Decide how coherent and mutually supporting HR strategies should be developed and implemented • How members of HR function should adopt a strategic approach

  10. KEY CONCEPTS OF STRATEGIC HRM • The resource-based view • Strategic fit • Best Practice

  11. BEST PRACTICE It is assumed that there is a set of best HRM practices that are universal in the sense that they are best in any situation This is questionable

  12. BEST FIT • The best fit approach emphasizes that HR strategies should be congruent with the context and circumstances of the organization • Best fit involves vertical integration or alignment between the organization’s business and HR strategies • There are three models: lifecycle, competitive strategy, and strategic configuration Often said that ‘best fit is better than best practice’ but best fit models can be unrealistic.

  13. DELIVERING HRM

  14. HR ARCHITECTURE HR architecture consists of the HR systems, processes and structure as well as employee behaviours

  15. THE HR DELIVERY MODEL The HR delivery model describes how HR services are provided

  16. HR ACTIVITIES • Transformational (strategic) • Transactional

  17. THE THREE-LEGGED STOOL MODEL HR is delivered through three major areas: • Centres of expertise • Business partners • Shared service centres

  18. EVALUATING THE HR FUNCTION It is necessary to evaluate the contribution of the HR function to ensure that it is effective: • at the strategic level • in terms of service delivery and support

  19. THE ROLE OF HR PROFESSIONALS Can act as: • business partners • strategists • innovators • change agents • internal consultants • change agents • facilitators • coaches

  20. HR COMPETENCIES • Personal credibility • Ability to manage change • Ability to manage culture • Delivery of human resource practices • Understanding of the business Brockbanket al (1999)

  21. PROFESSIONALISM IN HR Professionalism in HR is the conduct exhibited by people who are providing advice and services that require expertise and meet defined or generally accepted standards of behaviour

  22. THE HR ROLE OF LINE MANAGERS HR can initiate new policies and practices but it is line managers who have the main responsibility for implementing them

  23. HRM AND PERFORMANCE

  24. THE IMPACT OF HR Much research has been carried out showing that good HRM practice and firm performance are correlated, for example in the UK: • Patterson et al (1997) • Guest et al (2000a) • Thompson (2002) • West et al (2002) • Purcell et al (2003)

  25. HOW HRM MAKES AN IMPACT Hard to be certain because of: • Causal ambiguity • Contingency factors • The ‘black box’ phenomenon

  26. IMPACT OF HRM MODEL OF HR PERFORMANCE LINK Reversed causality Business strategy HRM strategy HRM practices HRM outcomes Business outcomes Financial performance Contingency variables: Internal context - size, sector, technology, employees, culture External context – competition, economic, social Based on Paauwe (2004)

  27. HIGH-PERFORMANCE CULTURE One in which the achievement of high levels of performance is a way of life

  28. PERFORMANCE MANAGEMENT Performance management can contribute to the development of a high-performance culture by delivering the message that high performance is important

  29. INTERNATIONAL HRM

  30. INTERNATIONAL HRM DEFINED • The process of managing people across international boundaries by multinational companies • It involves the worldwide management of people, not just the management of expatriates

  31. ISSUES IN INTERNATIONAL HRM • Globalization • Environmental differences • Cultural differences • Convergence and divergence

  32. GLOBAL HR POLICIES AND PRACTICES Research conducted by Brewster et al (2005) identified three processes that constitute global HRM: • Talent management/employee branding • International assignments management • Managing an international workforce

  33. MANAGING EXPATRIATES The management of expatriates is a major factor in determining success or failure in an international business

  34. HUMAN CAPITAL MANAGEMENT

  35. THE NATURE OF HUMAN CAPITAL MANAGEMENT HCM involves the systematic analysis, measurement and evaluation of how people policies and practices create value

  36. INTELLECTUAL CAPITAL The stocks and flows of knowledge available to an organization

  37. SOCIAL CAPITAL The knowledge derived from networks of relationships within and outside the organization

  38. ORGANIZATIONAL CAPITAL The institutionalized knowledge possessed by an organization that is stored in databases, manuals, etc

  39. APPROACHES TO PEOPLE MANAGEMENT RAISED BY HUMAN CAPITAL THEORY • What are the key performance drivers that create value? • What skills do we have? • What skills do we need now and in the future • How are we going to attract, develop and retain these skills? • How can we develop a culture and environment in which organizational and individual learning takes place? • How can we provide for both the explicit and tacit knowledge created in our organization to be captured, recorded and used effectively?

  40. KNOWLEDGE MANAGEMENT

  41. KNOWLEDGE MANAGEMENT DEFINED Knowledge management is concerned with storing and sharing the wisdom, understanding and expertise accumulated in an organization about its processes, techniques and operations

  42. KNOWLEDGE DEFINED What people understand about things, concepts, ideas, theories, procedures, practices and ‘the way we do things around here’

  43. DATA, INFORMATION AND KNOWLEDGE A distinction can be made between data, information and knowledge

  44. THE PURPOSE OF KNOWLEDGE MANAGEMENT Knowledge management is about getting knowledge from those who have it to those who need it in order to improve organizational effectiveness

  45. WAYS IN WHICH HR CAN CONTRIBUTE TO KNOWLEDGE MANAGEMENT • By providing advice and services dealing with culture management and organization development and design • By developing learning and communication programmes and systems

  46. COMPETENCY-BASED HRM

  47. COMPETENCY FRAMEWORKS Contain definitions of the behavioural competencies used for all employees in an organization or for specific members of staff such as managers

  48. COMPETENCY HEADINGS The most common competencies in frameworks are people skills, although outcome-based skills such as focusing on results and solving problems are also popular

  49. EXAMPLE OF A COMPETENCY DEFINITION WITH BEHAVIOURAL INDICATORS Competency heading Manage continuous improvement Competency definition Constantly seeking ways of improving the quality of services, the relevance and appeal of those services to the needs of customers and clients, and their effectiveness Competency requirement • Set targets for improvement. • Develop and implement programmes for managing change • Contribute to the development of quality assurance and • control processes and ensure that they are implemented Positive indicators • Encourages the development of new ideas and methods • especially those concerned with the provision of quality • Conscious of the factors that enable change to take place smoothly • Discusses ideas with colleagues and customers and formulates • views on how to improve services and processes. Negative indicators • Doesn’t try anything that hasn’t been done before • Complacent, believes that there is no room for improvement • Follows previous practices without considering whether there is any • need to change

  50. APPLICATIONS OF COMPETENCY-BASED HRM The top three areas in which competencies are applied are: • Learning and development • Performance management • Recruitment and selection

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