CHAPTER 1 - HRM, management
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CHAPTER 1
HRM, strategy and the global
context
LEARNING OUTCOMES
By the end of this chapter, readers should be able to:
advise senior managers about how to recognise and respond to a wide range of stakeholder
influences on business and HR strategies to enhance organisational and individual performance
●
demonstrate an ethical and professional approach to HRM taking into account its multiple
●
meanings
contribute to recommendations about how organisations manage HR both in the UK and
overseas.
In addition, readers should understand and be able to explain:
the competing meanings of the term ‘strategy’, and their implications for HRM
●
the nature and importance of ethics, professionalism and diversity and their contribution to the
●
business and moral case for HRM
the basis on which HR policies are established in multinational organisations due to the influence
of home- and host-country factors.
INTRODUCTION
HRM is now oten seen as the major factor diferentiating between successful
and unsuccessful organisations, more important than technology or inance in
achieving competitive advantage. his is particularly pertinent in the service
sector where workers are the primary source of contact with customers, either
face-to-face in a service encounter or over the telephone or the Internet. Even
in manufacturing irms the way in which human resources are managed is seen
as an increasingly critical component in the production process, primarily in
terms of quality and reliability. Much of this revolves around the extent to which
workers are prepared to use their discretion to improve products and services.
In this argument a particular style of HRM is envisaged: one that can be broadly
termed the ‘high commitment’ model.
●
●
4
HRM at Work
But HRM – as the management of employment – can take many forms in
practice and it may vary between organisations and the occupational group that
is targeted. here have been major debates about precisely what is meant by
HRM, how it difers from personnel management and industrial relations, and
in the extent to which it is seen to serve employer objectives alone rather than
aiming to satisfy the expectations of other stakeholders. his means that HRM
cannot be analysed in isolation from the wider strategic objectives of employers
and measured against these, speciically the need to satisfy shareholders or
(in the public sector) government and societal demands for eiciency and
efectiveness. However, strategy itself is also a multidimensional concept and,
despite common usage of the term, it is more complex than the simple military
analogy implies. Strategies emerge within organisations rather than being set
merely by senior managers (generals) and cascaded down the hierarchy by more
junior managers to the workers (the troops). Moreover, as we show graphically
in Chapters 1 and 2, strategies are also inluenced by wider societal objectives,
legislative and political frameworks, social and economic institutions, and a range
of diferent stakeholder interests. his is most apparent when we analyse the way
in which multinational companies (MNCs) operate in diferent countries and
how the interplay between home- and host-country inluences shapes HRM.
In short, although this book examines HRM, it has to be viewed in relation to
organisational strategies, labour market contexts and wider institutional forces.
his chapter examines the irst of these – the interplay between HRM, strategy
and globalisation – while Chapter 2 reviews some of the forces beyond the
individual organisation that shape HRM at work.
THE MEANINGS OF HRM
HRM is still a relatively new area of study that is seeking to gain credibility in
comparison with more established academic disciplines – such as economics,
psychology, sociology and law – which have a much longer history. HRM is
oten contrasted with industrial relations and personnel management, with the
former laying claim to represent the theoretical basis of the subject while the
latter is viewed as the practical and prescriptive homeland for issues concerning
the management of people. In addition, there are so many variants of HRM
it is easy to ind slippage in its use, especially when critics are comparing the
apparent
rhetoric
of ‘high commitment’ HRM with the so-called
reality
of life in
organisations that manage by fear and cost-cutting (Keenoy 1990; Caldwell 2003).
Similarly, HRM oten attracts criticism because it can never fully satisfy business
imperatives or the drive for employee well-being. Because the remainder of the
book explores issues such as these in depth, we focus here on a brief résumé
of the main strands of the subject. In the concluding section of the chapter we
outline what we see as the main components of HRM.
HRM, strategy and the global context
5
THE ORIGINS OF HRM IN THE USA
here is little doubt that the HRM terminology originated in the USA subsequent
to the human relations movement. According to Kaufman (2007, pp33–4), the
term irst appeared in the textbook literature from the mid-1960s, speciically in
relation to the specialist function which was interchangeably termed ‘personnel’
or ‘human resources. What really helped HRM to take root a couple of decades
later, however, was the Harvard framework developed by Beer
et al
(1985). Here,
HRM was contrasted with ‘personnel’ and ‘industrial relations’; the latter were
conceptualised as reactive, piecemeal, part of a command-and-control agenda,
and short-term in nature, whereas HRM was seen as proactive, integrative, part
of an employee commitment perspective and long-term in focus. In line with this
perspective, human resources were perceived as an asset and not as a cost. he
Harvard framework consists of six basic components. hese are:
1
situational factors
, such as workforce characteristics, management philosophy
and labour market conditions, which combine to shape the environment
within which organisations operate
2
stakeholder interests
, such as the compromises and tradeofs that occur between
the owners of the enterprise and its employees and the unions. his makes
the Beer
et al
framework much less unitarist than some of the other models
(Bratton and Gold 2007, p.23)
3
HRM policy choices
, in the areas of employee inluence, HR low, reward
systems and work systems. Employee inluence is seen as the most important
of these four areas, again making this model somewhat diferent from some
other versions of HRM
4
HR outcomes
, in terms of what are termed the ‘4Cs’ – commitment,
competence, cost efectiveness and congruence. his incorporates issues
connected with trust, motivation and skills, and it is argued that greater
employee inluence in the afairs of the company is likely to foster greater
congruence (Beer
et al
, 1985, p.37)
5
long-term consequences
, such as individual well-being, organisational
efectiveness and societal goals. Unlike many other models of HRM, this
framework is explicit in recognising the role that employers play in helping to
achieve wider societal goals such as employment and growth
6
a feedback loop
, which is the inal component in the framework, demonstrating
that it is not conceived as a simple, unilinear set of relationships between the
diferent components.
A key feature of the Harvard approach is that it treats HRM as an entire system,
and it is the combination of HR practices that is important. As Allen and Wright
(2007, p.91) note: ‘his led to a focus on how the diferent HRM sub-functions
could be aligned and work together to accomplish the goals of HRM.’ he issue
is taken up in detail in Chapter 3, and is oten referred to as
horizontal
alignment
or integration. While acknowledging the role for alternative stakeholder interests
– including government and the community – this framework is essentially
positivist because it assumes a dominant direction of inluence from broader
6
HRM at Work
situational and stakeholder interests through to HR outcomes and long-term
consequences. In reality, the relationship is much more complex and fragmented
as employers are unable to make policy choices in such a structured way,
especially if they operate in networks of irms up and down supply chains or
across national boundaries.
he other main school of thought which developed in the USA was the
matching model (Fombrun
et al
, 1984). his emphasises the links between
organisational strategy and speciic HR practices, concentrating on
vertical
rather
than horizontal alignment. he HR practices are categorised into selection,
development, appraisal and reward. he human resource cycle – as the four
components are known – are tied together in terms of how efectively they deliver
improved performance. In Devanna
et al
’s (1984, p.41) words:
Performance is a function of all the HR components: selecting people who
are the best able to perform the jobs deined by the structure; appraising
their performance to facilitate the equitable distribution of rewards;
motivating employees by linking rewards to high levels of performance; and
developing employees to enhance their current performance at work as well
as to prepare them to perform in positions they may hold in the future.
he focus is on ensuring that there is a ‘match’ or ‘it’ between overall
organisational goals and the way in which its people should be managed. he
approach to rewards, for example, is expected to vary dependent on strategy; it
is suggested that a single-product irm would deal with this in an unsystematic
and paternalistic manner while a diversiied irm would operate through large
bonuses based on proitability and subjective assessments about contribution to
company performance. With regard to selection, the criteria used range from
the subjective to the standardised and systematic depending on the strategy and
structure of the irm (Devanna
et al
, 1984, pp38–9). It is essentially a unitarist
analysis of HRM whereby the management of people is ‘read-of ’ from broader
organisational objectives. No account is taken of the interests of diferent
stakeholders nor is there much room for strategic choice (Bratton and Gold,
2007, p22). his is considered more fully in Chapter 4. It should be noted at
this stage that both these models were derived within the context of developed
countries operating within an Anglo-Saxon business environment, thus raising
questions about their applicability to very diferent cultures.
THE EMERGENCE OF HRM IN THE UK
Interest in HRM in the UK – both as an academic subject and a source of interest
for practitioners – developed in the late 1980s, and contributions have come from
a plurality of disciplinary backgrounds. Drawing on Bach and Sisson (2000) and
developing their categorisation, it is possible to identify four diferent traditions:
prescriptive
– his used to be the dominant approach in the literature,
stemming from the domain of personnel management, and it examined and
prescribed the ‘best’ tools and techniques for use by practitioners. It was
essentially vocational in character, although the universal prescriptions that
●
HRM, strategy and the global context
7
●
– his contrasted sharply with the benevolent, yet paternalist,
image of the prescriptive tradition, and focused on HRM as an implicit or
explicit device to control and subjugate labour. While helping, initially at
least, to introduce more critical accounts of HRM, and later providing a more
nuanced and more subjective understanding of how organisations work, it
tended to critique management for everything it did. In the more extreme cases
it assumed that managers’ sole objective in life was to control and manipulate
workers, rather than meet production or service targets laid down by senior
management. Although the HR function might appear as a human face,
according to critics that made it even more dangerous because workers could
be conned into meeting targets that essentially only helped the organisation to
meet its goals – and ultimately operated to the detriment of workers’ objectives.
industrial relations
●
– Within this tradition, HRM was seen as ‘part of a system
of employment regulation in which internal and external inluences shape
the management of the employment relationship’ (Bach and Sisson, 2000,
p.8). Using both detailed case study and quantitative techniques, oten from
the Workplace Employee Relations Surveys, students have analysed HRM
in
practice
in order to develop our understanding of the main elements of the
employment relationship. Although crucially bringing in a pluralist perspective
on HRM, this tended to focus on collective aspects of the employment
relationship, and in particular view all forms of employment – including
non-union irms – against the template of a unionised environment.
organisational psychology
●
– Although common in the USA, the contribution
from this tradition has become more signiicant in the UK as scholars analyse
HR issues connected with selection, appraisal, learning and development, and
the psychological contract. As we see throughout this book, this tradition
has been at the forefront of studies examining the links between various
aspects of HR strategy and practice and employee outcome measures such as
commitment and satisfaction. In contradistinction to the industrial relations
tradition, this approach tends to downplay notions of conlict and resistance, as
well as overlook the realities of HRM at the workplace.
were put forward had much greater resonance in large irms with well-stafed
personnel functions. In line with the US literature, its underpinning values
were essentially unitarist, assuming that workers and employers could work
together, wherever possible, to achieve mutual gains within the framework
of traditional hierarchical and capitalist relations. Within the prescriptive
tradition personnel tended to be seen as an intermediary between the harsher
extremes of cost-driven business goals and the needs and motivations of
workers.
labour process
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CHAPTER 1
HRM, strategy and the global
context
LEARNING OUTCOMES
By the end of this chapter, readers should be able to:
advise senior managers about how to recognise and respond to a wide range of stakeholder
influences on business and HR strategies to enhance organisational and individual performance
●
demonstrate an ethical and professional approach to HRM taking into account its multiple
●
meanings
contribute to recommendations about how organisations manage HR both in the UK and
overseas.
In addition, readers should understand and be able to explain:
the competing meanings of the term ‘strategy’, and their implications for HRM
●
the nature and importance of ethics, professionalism and diversity and their contribution to the
●
business and moral case for HRM
the basis on which HR policies are established in multinational organisations due to the influence
of home- and host-country factors.
INTRODUCTION
HRM is now oten seen as the major factor diferentiating between successful
and unsuccessful organisations, more important than technology or inance in
achieving competitive advantage. his is particularly pertinent in the service
sector where workers are the primary source of contact with customers, either
face-to-face in a service encounter or over the telephone or the Internet. Even
in manufacturing irms the way in which human resources are managed is seen
as an increasingly critical component in the production process, primarily in
terms of quality and reliability. Much of this revolves around the extent to which
workers are prepared to use their discretion to improve products and services.
In this argument a particular style of HRM is envisaged: one that can be broadly
termed the ‘high commitment’ model.
●
●
4
HRM at Work
But HRM – as the management of employment – can take many forms in
practice and it may vary between organisations and the occupational group that
is targeted. here have been major debates about precisely what is meant by
HRM, how it difers from personnel management and industrial relations, and
in the extent to which it is seen to serve employer objectives alone rather than
aiming to satisfy the expectations of other stakeholders. his means that HRM
cannot be analysed in isolation from the wider strategic objectives of employers
and measured against these, speciically the need to satisfy shareholders or
(in the public sector) government and societal demands for eiciency and
efectiveness. However, strategy itself is also a multidimensional concept and,
despite common usage of the term, it is more complex than the simple military
analogy implies. Strategies emerge within organisations rather than being set
merely by senior managers (generals) and cascaded down the hierarchy by more
junior managers to the workers (the troops). Moreover, as we show graphically
in Chapters 1 and 2, strategies are also inluenced by wider societal objectives,
legislative and political frameworks, social and economic institutions, and a range
of diferent stakeholder interests. his is most apparent when we analyse the way
in which multinational companies (MNCs) operate in diferent countries and
how the interplay between home- and host-country inluences shapes HRM.
In short, although this book examines HRM, it has to be viewed in relation to
organisational strategies, labour market contexts and wider institutional forces.
his chapter examines the irst of these – the interplay between HRM, strategy
and globalisation – while Chapter 2 reviews some of the forces beyond the
individual organisation that shape HRM at work.
THE MEANINGS OF HRM
HRM is still a relatively new area of study that is seeking to gain credibility in
comparison with more established academic disciplines – such as economics,
psychology, sociology and law – which have a much longer history. HRM is
oten contrasted with industrial relations and personnel management, with the
former laying claim to represent the theoretical basis of the subject while the
latter is viewed as the practical and prescriptive homeland for issues concerning
the management of people. In addition, there are so many variants of HRM
it is easy to ind slippage in its use, especially when critics are comparing the
apparent
rhetoric
of ‘high commitment’ HRM with the so-called
reality
of life in
organisations that manage by fear and cost-cutting (Keenoy 1990; Caldwell 2003).
Similarly, HRM oten attracts criticism because it can never fully satisfy business
imperatives or the drive for employee well-being. Because the remainder of the
book explores issues such as these in depth, we focus here on a brief résumé
of the main strands of the subject. In the concluding section of the chapter we
outline what we see as the main components of HRM.
HRM, strategy and the global context
5
THE ORIGINS OF HRM IN THE USA
here is little doubt that the HRM terminology originated in the USA subsequent
to the human relations movement. According to Kaufman (2007, pp33–4), the
term irst appeared in the textbook literature from the mid-1960s, speciically in
relation to the specialist function which was interchangeably termed ‘personnel’
or ‘human resources. What really helped HRM to take root a couple of decades
later, however, was the Harvard framework developed by Beer
et al
(1985). Here,
HRM was contrasted with ‘personnel’ and ‘industrial relations’; the latter were
conceptualised as reactive, piecemeal, part of a command-and-control agenda,
and short-term in nature, whereas HRM was seen as proactive, integrative, part
of an employee commitment perspective and long-term in focus. In line with this
perspective, human resources were perceived as an asset and not as a cost. he
Harvard framework consists of six basic components. hese are:
1
situational factors
, such as workforce characteristics, management philosophy
and labour market conditions, which combine to shape the environment
within which organisations operate
2
stakeholder interests
, such as the compromises and tradeofs that occur between
the owners of the enterprise and its employees and the unions. his makes
the Beer
et al
framework much less unitarist than some of the other models
(Bratton and Gold 2007, p.23)
3
HRM policy choices
, in the areas of employee inluence, HR low, reward
systems and work systems. Employee inluence is seen as the most important
of these four areas, again making this model somewhat diferent from some
other versions of HRM
4
HR outcomes
, in terms of what are termed the ‘4Cs’ – commitment,
competence, cost efectiveness and congruence. his incorporates issues
connected with trust, motivation and skills, and it is argued that greater
employee inluence in the afairs of the company is likely to foster greater
congruence (Beer
et al
, 1985, p.37)
5
long-term consequences
, such as individual well-being, organisational
efectiveness and societal goals. Unlike many other models of HRM, this
framework is explicit in recognising the role that employers play in helping to
achieve wider societal goals such as employment and growth
6
a feedback loop
, which is the inal component in the framework, demonstrating
that it is not conceived as a simple, unilinear set of relationships between the
diferent components.
A key feature of the Harvard approach is that it treats HRM as an entire system,
and it is the combination of HR practices that is important. As Allen and Wright
(2007, p.91) note: ‘his led to a focus on how the diferent HRM sub-functions
could be aligned and work together to accomplish the goals of HRM.’ he issue
is taken up in detail in Chapter 3, and is oten referred to as
horizontal
alignment
or integration. While acknowledging the role for alternative stakeholder interests
– including government and the community – this framework is essentially
positivist because it assumes a dominant direction of inluence from broader
6
HRM at Work
situational and stakeholder interests through to HR outcomes and long-term
consequences. In reality, the relationship is much more complex and fragmented
as employers are unable to make policy choices in such a structured way,
especially if they operate in networks of irms up and down supply chains or
across national boundaries.
he other main school of thought which developed in the USA was the
matching model (Fombrun
et al
, 1984). his emphasises the links between
organisational strategy and speciic HR practices, concentrating on
vertical
rather
than horizontal alignment. he HR practices are categorised into selection,
development, appraisal and reward. he human resource cycle – as the four
components are known – are tied together in terms of how efectively they deliver
improved performance. In Devanna
et al
’s (1984, p.41) words:
Performance is a function of all the HR components: selecting people who
are the best able to perform the jobs deined by the structure; appraising
their performance to facilitate the equitable distribution of rewards;
motivating employees by linking rewards to high levels of performance; and
developing employees to enhance their current performance at work as well
as to prepare them to perform in positions they may hold in the future.
he focus is on ensuring that there is a ‘match’ or ‘it’ between overall
organisational goals and the way in which its people should be managed. he
approach to rewards, for example, is expected to vary dependent on strategy; it
is suggested that a single-product irm would deal with this in an unsystematic
and paternalistic manner while a diversiied irm would operate through large
bonuses based on proitability and subjective assessments about contribution to
company performance. With regard to selection, the criteria used range from
the subjective to the standardised and systematic depending on the strategy and
structure of the irm (Devanna
et al
, 1984, pp38–9). It is essentially a unitarist
analysis of HRM whereby the management of people is ‘read-of ’ from broader
organisational objectives. No account is taken of the interests of diferent
stakeholders nor is there much room for strategic choice (Bratton and Gold,
2007, p22). his is considered more fully in Chapter 4. It should be noted at
this stage that both these models were derived within the context of developed
countries operating within an Anglo-Saxon business environment, thus raising
questions about their applicability to very diferent cultures.
THE EMERGENCE OF HRM IN THE UK
Interest in HRM in the UK – both as an academic subject and a source of interest
for practitioners – developed in the late 1980s, and contributions have come from
a plurality of disciplinary backgrounds. Drawing on Bach and Sisson (2000) and
developing their categorisation, it is possible to identify four diferent traditions:
prescriptive
– his used to be the dominant approach in the literature,
stemming from the domain of personnel management, and it examined and
prescribed the ‘best’ tools and techniques for use by practitioners. It was
essentially vocational in character, although the universal prescriptions that
●
HRM, strategy and the global context
7
●
– his contrasted sharply with the benevolent, yet paternalist,
image of the prescriptive tradition, and focused on HRM as an implicit or
explicit device to control and subjugate labour. While helping, initially at
least, to introduce more critical accounts of HRM, and later providing a more
nuanced and more subjective understanding of how organisations work, it
tended to critique management for everything it did. In the more extreme cases
it assumed that managers’ sole objective in life was to control and manipulate
workers, rather than meet production or service targets laid down by senior
management. Although the HR function might appear as a human face,
according to critics that made it even more dangerous because workers could
be conned into meeting targets that essentially only helped the organisation to
meet its goals – and ultimately operated to the detriment of workers’ objectives.
industrial relations
●
– Within this tradition, HRM was seen as ‘part of a system
of employment regulation in which internal and external inluences shape
the management of the employment relationship’ (Bach and Sisson, 2000,
p.8). Using both detailed case study and quantitative techniques, oten from
the Workplace Employee Relations Surveys, students have analysed HRM
in
practice
in order to develop our understanding of the main elements of the
employment relationship. Although crucially bringing in a pluralist perspective
on HRM, this tended to focus on collective aspects of the employment
relationship, and in particular view all forms of employment – including
non-union irms – against the template of a unionised environment.
organisational psychology
●
– Although common in the USA, the contribution
from this tradition has become more signiicant in the UK as scholars analyse
HR issues connected with selection, appraisal, learning and development, and
the psychological contract. As we see throughout this book, this tradition
has been at the forefront of studies examining the links between various
aspects of HR strategy and practice and employee outcome measures such as
commitment and satisfaction. In contradistinction to the industrial relations
tradition, this approach tends to downplay notions of conlict and resistance, as
well as overlook the realities of HRM at the workplace.
were put forward had much greater resonance in large irms with well-stafed
personnel functions. In line with the US literature, its underpinning values
were essentially unitarist, assuming that workers and employers could work
together, wherever possible, to achieve mutual gains within the framework
of traditional hierarchical and capitalist relations. Within the prescriptive
tradition personnel tended to be seen as an intermediary between the harsher
extremes of cost-driven business goals and the needs and motivations of
workers.
labour process
[ Pobierz całość w formacie PDF ]