Adaptation of a Human Resource Management - Assignment Example

?TRADITIONAL PERSONNEL MANAGEMENT AND HUMAN RESOURCE MANAGEMENT of The IncreasingChallenges of the External Environment Mean That Traditional Personnel Management is Outdated and Organizations Need to Adopt a Human Resource Management (HRM) Approach In recent years, organizations have witnessed increasing challenges of both the internal and external environment. These challenges have been as a result of some factors including rapid technological advancements, increasing competition, and heightened customers and shareholders’ expectations among others (Torrington et al, 2002, p. 11). These challenges have greatly influenced various business strategies and decisions in organizations, as organizations try to improve their performance and remain relevant. Organizations have adopted various strategies and approaches with the aim of overcoming the increasing challenges, as well as meeting or exceeding the set organizational goals and objectives (Redman & Wilkinson, 2009, p. 14). The shift from traditional personnel management to human resource management is one such example of how organizations adopt new approaches and strategies in a bid to increase their competitiveness and improve their performance (Martin-Alcazar, et al., 2012, p. 512). There has been an argument among management practitioners that the traditional personnel management is outdated and that organizations need to adopt a human resource management approach, in order to achieve their goals and objectives in the increasingly challenging business environment (Durovic, 2012, p. 83). This essay will, therefore, discuss whether organizations need to adopt human resource management approach in replacing traditional personnel management that is deemed to be outdated. The main difference between personnel management and human resource management is that the former is the traditional approach, while the later is a modern approach towards management of people in an organization (Koster, 2007, p. 10). As a traditional approach, personnel management is largely aimed at non-managers and views organizational leadership and culture as issues that are concerned with the development of the organization. As a modern approach, human resource management is concerned with highlighting the responsibility for organizational culture and leadership issues management. Specifically, personnel management is majorly administrative record-keeping function that seeks to create and maintain employment conditions and terms that are equitable (Legge, 2004, p. 55). On the other hand, the human resource management aims at integrating the functions of traditional personnel management to corporate strategies and goals, as well as performing additional people-centered organizational developmental activities. Basically, it can be seen that the significant differences between these two approaches are in terms of application, approach, and scope (Tripathi, 2002, p. 33). As has been mentioned, personnel management is the traditional approach, while the human resource management is the modern approach. In other words, personnel management preceded human resource management (Storey, 2007, p. 97). The origins of personnel management can be traced to the welfare tradition in the post World War One period where more focus was put on meeting the basic needs of the employees. As the dynamics in relations between management and trade unions changed, the responsibilities of personnel management grew beyond welfare to include areas such as effective personnel and industrial relations administration. Personnel management approach put more emphasis on the formulating and monitoring procedures and rules conformance (Torrington et al, 2002, p. 29). Over the last three decades, there were changes in the business environment that wERE brought about by increasing competition and developments in technology. As a result, customers began to have widened choices which prompted companies to keep innovating and providing the kind of customer value that can beat competition (Redman & Wilkinson, 2009, p. 33). The shift in the business dynamics prompted the companies to realize that people and their knowledge was the key source of competitive advantage. This realization was informed by the fact that other resources that relate to finances, technology, equipments, and materials had proved to be short-lived if the human capital is not capable of deploying and utilizing these resources efficiently and effectively (Cornelius, 2001, p. 44). It became clear to the organizations that they can only improve their performance and profitability in the challenging business environment by combining the human capital with their awareness of the internal and external markets. Awareness of the competitors’ moves and customers’ expectations is fundamental in developing innovative new services and products which can create more value proposition in the market (Martin-Alcazar et al, 2012, p. 517). In the wake of external business challenges, organizations also realized that personnel management was not addressing many of the emerging challenges, and was not effectively integrating the human knowledge with awareness of markets. It is this realization that marked change in the attitudes of organizations’ management that saw the emergence of human resource management (Armstrong, 2006, p. 85). The emergence of human resource management saw organizations shift their focus to personnel policies implementation, as well as maximizing organizational integrity objectives and the commitment, quality, and flexibility of employees (Durovic, 2012, p. 84). The external environment has brought increasing challenges to traditional management approaches, a situation that has prompted organizations to adopt modern approaches that incorporates the emerging trends (Tripathi, 2002, p. 90). The traditional personnel management has proved to be outdated and can no longer help companies to meet their objectives in the modern challenging business environment. The external environment calls for flexibility in organizations. However, traditional personnel management is rigid as it emphasizes on conforming to rules even when they are outdated. This traditional approach is indeed outdated as it does not offer flexibility that is needed in navigating the turbulent business environment of today. This approach is evidently outdated as it regulates employee’s behaviors in line with the organizational norms and customs (Koster, 2007, p. 18). The traditional personnel management requires that the behaviors of employees should be guided by norms and customs; this requirement greatly affects innovativeness and creativity of employees consequently affecting the organization’s productivity and performance. Besides, this approach is focused more on monitoring of employees, which denies them the opportunity of exploring. In the light of external challenges, this approach is outdated because if monitors employees rather than nurturing them which is critical in enhancing productivity among employees (Legge, 2004, p. 72). Moreover, the traditional personnel management approach is outdated in the light of external business challenges because its strategic aspects are narrow in scope. The approach focuses more on the labor management and meagerly on customers (Redman & Wilkinson, 2009, p. 40). Even though labor management is important, relations of customers is equally (if not more) important in the modern challenging business environment. As has been mentioned, one of the fundamental causes of external challenges is increased customers’ expectations. Therefore, strategy should be shifted towards meeting or exceeding customers’ expectations (Martin-Alcazar et al, 2012, p. 522). The traditional personnel management approach seems to be inadequate in ensuring that this is achieved. Also, this approach has proved to create room for piecemeal initiatives rather than rather integrated approach; the modern business environment calls for integrated initiatives that can provide solutions to emerging challenges. Besides, this approach is outdated in the sense that it focuses on the marginalized corporate plan and is slow in decision making, thereby interfering with the formulation of effective strategies needed in the challenging environment (Storey, 2007, p. 156). The other aspect that shows that the traditional personnel management approach is outdated is the way it approaches line management. This approach encourages transactional leadership rather than transformational leadership. Torrington et al (2002, p. 77) argue that the modern challenging business environment requires transformational leaders and not transactional ones, if organizations are to achieve their objectives. This approach has personnel and industrial relations experts as their key managers, an arrangement that does not blend well with the modern business environment and challenges. The approach also fails to pay attention on the structural and cultural issues which are critical in the modern business environment especially in the light of globalization. The pay under this approach is based on job evaluation rather than being performance based (Aswathappa, 2005, p. 94). As a result, the reward system is not geared towards improving the performance of the company especially in the challenging business environment that requires constant improvement in performance. The communication aspect further shows that how outdated the traditional personnel management approach is; the approach emphasizes on indirect and restricted flow of communication rather than on direct and increased flow of communication. Moreover, the approach emphasizes on division of labor rather than teamwork. In addition, this approach emphasizes on the temporary basis of handling conflict instead of long term basis and developing conflict resolution culture (Durovic, 2012, p. 88). It is no doubt that the above discussed aspects of the traditional personnel management approach is outdated in the light of modern business environment. The increasing challenges of the external environment have proved that the traditional personnel management approach is outdated, and cannot help the organizations to achieve their goals and objectives. The traditional personnel management approach has also proved that its application in modern business environment cannot enable organizations to gain competitive advantage and remain relevant and improve their profitability. For organizations to survive in the increasing challenges of the external environment, should organizations adopt a human resource management approach? Human resource management as a modern approach has proved to be effective in addressing the myriad of issues and challenges of the external environment (Storey, 2007, p. 159). Unlike the personnel management approach that concerns itself with establishing of contracts, procedures, and rules, the human resource management approach tends to relax them with the view of current business exigencies and needs, and aim at going by the spirit of procedures and contracts. This is evidenced in the case study of Games of skill where the management sought to improve its performance using human resource management approach as it believed that that performance was key to employee satisfaction (Martin-Alcazar et al, 2012, p. 524). The company devised strategies such as creativity, team work, and work challenges to improve employees’ motivation. If this organization had used the traditional personnel management approach, the management would have focused on employee satisfaction as a way of keeping them motivated (Tripathi, 2002, p. 106). Therefore, it would have focused simply on work simplification initiatives, rewards, bonuses, and institute compensation among other initiatives that have proven to yield much in the long term (Koster, 2007, p. 43). Organizations should adopt the human resource management approach in the wake of increasing challenges of the external environment in order to benefit from the proactive nature of the approach. The traditional personnel management is reactive in nature to the organizational strategy and functions independently and is aloof from the organizational activities that are core (Cornelius, 2001, p. 66). As such, this approach has the potential of affecting the productivity and the ultimate performance of the organization. Adoption of human resource management approach would enable organizations to integrate their strategies or goals. Besides, it would enable organizations to take a proactive approach to aligning the workforce towards achieving their organizational goals. The case study of Mobilcom shows how effective adoption of human resource management approach can be in making a company to take a proactive approach in aligning the workforce towards achieving their corporate goals (Aswathappa, 2005, p. 134). In a bid to improve its performance, Mobilcom created a more proactive and comprehensive performance management system that was geared towards correcting its company instead of making its report card of its past performance (Redman & Wilkinson, 2009, p. 108). More importantly, the adoption of human resource management approach would enable organizations to link their core processes by integrating their core functions and strategy. The traditional personnel management approach would deny the organizations this opportunity because it entails minimal involvement of line managers and has no linkage to the core processes of organizations. Human resource management approach increases the involvement of line managers and operations staff (Armstrong, 2006, p. 121). This approach would help give organizations heavier thrust of dealing with particular employees independently, instead of focusing more on negotiating or bargaining with trade unions. Human resource management approach enables organization to provide the employees with broadly-defined job responsibilities thereby providing them with enhanced scope for applying initiative and creativity. This approach also provides employees with plenty career paths, with talent, commitment, and skills being the key drivers towards these ends (Durovic, 2012, p. 87). This is not the case with the traditional personnel management approach that lays down a comparatively rigid job descriptions for the employees, that is often based on performance appraisal ratings, ranks, and grades. As a result, the scope of employees to apply initiative and creativity becomes limited, which ultimately affect the productivity and performance of the organizations. Additionally, it would enhance organizations’ sense of increasing their attention to customers (Aswathappa, 2005, p. 144). The fact that the modern business environment is complex and very dynamic cannot be disputed. The nature of the environment has increased the challenges to organizations especially those emanating from external environment. Management of people has become more complicated and requires the application of a wide range of skills and knowledge (Cornelius, 2001, p. 130). In recent years, the traditional personnel management approach has proved ineffective in managing people in such a complex environment, a situation which has negatively affected the organizations that are still applying the approach. Therefore, organizations should adopt human resource management approach in order to apply its wide aspects in the increasingly competitive environment (Armstrong, 2006, p. 151). Human resource management approach would increase understanding in organizations, as well as commitment as it is more of performance- focused rather than job-focused. This approach have proved that organizational success can be achieved through flexible and novel approaches such as fostering social relationships within the organization and enhancing of the morale of employees. Legge (2004, p. 79) argues that these strategies are critical in raising the productivity levels in the organizations. Furthermore, organizations need to adopt the human resource management approach because they are in line with the changes in the government economic policies and labor market policies (Koster, 2007, p. 109). Therefore, the organizations would be able to develop new realistic and constructive strategies that will enable them to counter the increasing challenges of the external environment. The approach provides framework within which organizations can practice effective people skills in carrying out their primary business functions. While this approach can be applied to organizations of all nature, they are more likely to be engendered in organizations that seek to meet or exceed their customers’ expectations and to satisfy their employees (Storey, 2007, p. 137). These aspects are very important not only in enabling organizations to gain competitive advantage, but also in enabling them to improve their performance and profitability. It is important to note that the human resource management approach has a, cycle that is made up of three parts, all of which are essential in making it effective in achievement of organizational goals and objectives in the light of increasing challenges of the external environment (Martin-Alcazar et al, 2012, p. 525). These parts include: attracting an effective workforce; this approach has flexible approaches of recruiting the most effective employees. Secondly, it develops effective workforce through succession planning, career development, training, and education. Thirdly, it maintains an effective workforce through informal and formal welfare teamwork and rewards among other approaches (Armstrong, 2006, p. 165). In conclusion, it is evidently clear from the discussion that it is essential for organizations to adopt the human resource management approach in order to overcome the increasing challenges of the external environment. As has been mentioned, numerous aspects of the traditional personnel management approach such as rigidity or rules and procedures, slow and marginalized strategies and minimal involvement of line managers make it outdated. As such, application of this approach to organizations in modern business environment would greatly affect their productivity and performance. Therefore, in order for organizations to effectively overcome the increasing challenges of external environment, they should adopt human resource management approach. This approach is focused on aspects that have the potential of improving organizations’ performance and productivity. It sets consistent HR policies which communicate and reflect the core values of a particular organization. Bibliography Armstrong, M 2006, A Handbook of Human Resource Management Practice , London: Kogan Page. Aswathappa, K 2005, Human resource and personnel management: text and cases, New Delhi, Tata McGraw-Hill. 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