Aims of Human Resource

Management
 Aims
• Managing people as assets that are fundamental to the competitive advantage of
the organization
• Aligning HRM policies with business policies and corporate strategy
• Developing a close fit of HR policies, procedures and systems with one another
• Creating a flatter and more flexible organization capable of responding more
quickly to change
• Encouraging team working and cooperation across internal organizational
boundaries
• Creating a strong customer-fit philosophy throughout the organization
• Empowering employees to manage their own self-development and learning
• Developing reward strategies designed to support a performance-driven culture
• Improving employee involvement through better internal communication
• Building better employee commitment to the organization
• Increasing line management responsibility for HR policies
• Developing the facilitating role of managers as enablers
 Characteristics of HRM
• Diverse : MRM covers a vast area of activities and shows a huge range of variations
across occupations, organizational levels, business units, firms, industries and
societies.
• Strategic, with an emphasis on integration: integration follows from top
management’s vision and leadership and which requires the full commitment of
people to it. So, HRM policy goals should concern with the ability of the organization
to integrate HRM issues into its strategic plans.
• Commitment –oriented : It indicates mutuality. Mutual goals, influence, mutual
respect, mutual rewards and responsibility which in turn will yield both better
economic performance and greater human development.
• Based on the belief that people should be treated as assets (human capital)
• Emphasized on human relations
• The delivery of HRM is a line management responsibility
• Focused on business values, although this emphasis is being modified in some
quarters and more recognition is being given to the importance of moral and social
values.
 Hard and Soft Version of HRM
(Storey, 1989)
• Hard Version: the hard version of HRM emphasizes that people are
important resources through which organizations achieve competitive
advantage. These resources have therefore to be acquired, developed
and deployed in ways that will be benefit the organization. The focus is
on the quantitative, calculative and business-strategic aspects of
managing human resources in as rational way as for any other
economic factors.
• Soft Version: It is related to human relations school. It emphasizes
communication, motivation and leadership. Treating employees as
valued assets, a source of competitive advantage through their
commitment, adaptability and high quality in the context of skills,
performance and so on. The soft approach to HRM stresses the need
to gain the commitment of employees through high involvement.
Attention is also drawn to the key role of organizational culture.
Principles of Human Resource Management
Seven Principles set out by Ondrack and Nininger (1984):
1. There is an overall purpose and the human resource dimensions of that purpose are
evident
2. A process of developing strategy within the organization exists and is understood,
and there is explicit consideration of human resource dimensions
3. Effective linkage exist on a continuing basis to ensure the integration of human
resource considerations with the organizational decision making process
4. The office of the chief executive provides the challenge for integrating human
resource considerations to meet the needs of the business
5. The organization of all levels establishes responsibility and accountability for human
resource management
6. Initiatives in the management of human resources are relevant to the needs of the
business
7. It includes the responsibility to identify and interact in the social, political,
technological and economic environments in which the organization is and will be
doing business.
 Principles:(Michael Walton and Prof Sir
Bert)
1. Commitment: this specifies that how committed an employee is toward his
job. Job security is something that demonstrates their commitment to their
jobs and job duties. By ensuring that staffing levels are consistent with the
business needs, HR management fulfills the needs. HR management works in
such a way that the employees can reasonably expect that they are going to
be the long term employees. The organization always invests in the
betterment of its employee in order to make sure that they are committed to
their respective jobs. This may include training programs, goal-setting
activities, performance evaluation.
2. Competence: This principle is related to business development.
3. Cost-Effectiveness: It is necessary to make sure that the costs are effectively
utilized in the company. This would ensure a smooth process and companies
may be able to invest more in the HR related activities.
4. Congruence: Business’s overall goals, the attainable workforce management
goals must be very much congruent.
 Overall Principles
• Principles of individual development
• Principles of scientific selection
• Principles of the free flow communication
• Principles of participation
• Principles of a fair remuneration
• Principles of an incentive
• Principles of dignity of labor
• Principles of labour-management cooperation
• Principles of team spirit
• Principles of contribution to national prosperity
 Concept of Strategy, Concept of Strategic
HRM
• Concept of strategy is associated with:
1. Competitive advantage: To achieve firms select markets which they can excel and
present a moving target to their competitors by continually improving their
position. It emphasizes the importance of differentiation through innovation,
quality, and cost leadership.
2. Distinctive capabilities: The capabilities those can not be replicated by competitors
or can only be imitated with great difficulty. Key capabilities can exist in such areas
as technology, innovation, marketing, delivering quality, and making good use of
human and financial resources.
3. Strategic intent: It refers to the expression of the leadership position the
organization wants to attain and establish a clear criterion on how progress
towards its achievement will be measured. Strategic intent includes broad
statement of organization’s vision, mission, specific goals, and strategic objectives.
4. Strategic Capability: It is a concept that refers to the ability of an organization to
develop and implement strategies that will achieve sustained competitive
advantage. Strategic capability of a firm depends on its resource capability.
5. Strategic management: Primarily concerned with:
a) Use full scope of an organization’s activities
b) Matching the activities to the environment
c) Ensuring that the internal structures, practices and procedures enable the
organization to achieve its objectives
d) Matching the activities to its capabilities to take advantage of
opportunities and to avoid threats in the organization’s environment
e) Acquiring, divesting and reallocating resources
f) Translating the complex and dynamic set of external and internal
variables to set clear future objectives that can be implemented on a day-
today basis.
6. Strategic goals: It define where the organization wants to be
7. Strategic plan: It is the formal expressions of how an organization intends to
attain its strategic goals.
• Formulating Strategy, Classical Approach:
1. Define mission
2. Set objectives
3. SWOT analysis
4. Gap analysis
5. Define distinctive capabilities
6. Define key strategic issues
7. Determine corporate and functional strategies for achieving goals and
competitive advantage
8. Prepare integrated strategic plans for implementing strategies
9. Implement strategies
10. Monitor implementation and revise existing strategies or develop new
strategies as necessary.
• The reality of Strategic Management:
a) Strategy has always been emergent and
flexible
b) It is not only realized by formal statements but
also comes about by actions and reactions
c) It is a description of a future-oriented action
that is always directed towards change
d) It is conditioned by the management process
itself.
 Concept of Strategic HRM
• It has three concepts:
1. Resource-based view: HR produces unique character and creates competitive
advantage. These resources include all the experiences, knowledge, judgment,
risk-taking propensity. This resource have four attributes: valuable, rare,
imperfectly imitable and non-substitutable. So, to discover these resources
managers of the organization should keep attention to it.
2. Strategic Fit: It has two dimensions, first, vertically it entails the linking of
human resource management practices with the strategic management
processes of the organization. Second, horizontally, it emphasizes the
coordination among the various human resource management practices.
3. Strategic flexibility: It is defined as the ability of the firm to respond and adapt
to change in its competitive environment. It requires to develop multi skilled
people, tight job description. So, organization might develop organic HR
systems that produce a human capital pool possessing a wide range of skills
who can engage in a wide variety of ‘behavioural scripts’ in different situations.
• Perspectives of HRM on the basis of Resource based view and strategic fit:
1. Universalistic Perspectives: The concept is, all organiztion should adapt the best practices as
follows: (Pfeffer, 1994)
* employment security
* selective hiring
* self-managed team
* high compensation contingent on performance
* training to provide a skilled and motivated workforce
* reduction of status differentials
* sharing information
Delary and Doty (1996) identified Seven strategic HR practices
• Use of internal career ladder
• Formal training systems
• Results-oriented appraisal
• Performance based compensation
• Employment security
• Employee voice broadly defined jobs
2. The Contingency Perspectives: Defined as ‘vertical fit’i.e HR policies must be consistent with other
aspects of the organization. It consists:
(a) The life cycle model: (start-up, growth, maturity and decline) (Barid and Meshoulam)
(b) Competitive strategy: Includes innovation, quality and cost-leadership (Porter)

3. Strategic configuration: (Meyer et al, 1993)

Emphasises on the types of organization:
• The prospector: which operate in an environment characterised by rapid and unpredictable
change. They focus on development of new products , markets and technology.
• Defender: which operate in a more stable and predictable environment. They engage in more long
run planning. They focus on efficiency by by using routine technology.
• Analyser: they are usually not the initiators of change like prospectors but they follow the changes
rapidly than defenders. Analysers seek effectiveness through both efficiency and new products or
markets
• Bundling: Bundling is the development and
implementation of several HR practices together so that
they are interrelated and therefore complement and
reinforce each other.
Richardson and Thompson (1999) opined that , a
strategy’s success turns on combining ‘vertical’ or
external fit and ‘horizontal’ or internal fit. They conclude
that a firm with bundles of associated HR practices
should have a higher level of performance, providing it
also achieves high levels of fit with its competitive
strategy.