What is Human Resource Management and Why Does It Matter - Case Study Example

Human Resource Management Introduction Many scholars have d that the organization’s greatest assets are the human resources. Without them, dailybusiness operations such as making business transactions, managing financial flows, dealing with customers and communication would not be achieved. In order to promote the effectiveness of an organization, human potential that includes talents, time and individual capabilities should be managed well according to Brewster (1997). The term human resource management became popular in the 1970s as a management approach, which aimed at re-structuring employment relationships in order to ensure that the efforts of the employees were specifically directed towards attaining organizational competitiveness and good performance in the increasingly volatile markets. Since then the term has increasingly been applied in numerous business undertakings of both small and large organizations to refer to organizational functions relating to matters related to employees. Michael Armstrong (2006) summarized human resource management as a strategic approach to achievement, development, motivation and management of the human resources in the organization. He adds that it works to shape a suitable corporate culture and initiate reflective and supportive programs regarding the organization’s core values. Human Resource Management describes a system within organizations designed for the management of employees. It works towards achieving organizational goals through acquiring and maintaining competent employees. Human resource management activities involve designing or defining work, staffing and employee benefits and compensation. According to Brewster and Scullion (1997), the human resource manager is charged with the duty of recruiting employees into the organization, helping them work, working out emerging problems and compensating them accordingly. It may well be concluded from the descriptions given by different scholars and professionals that human resource management deals with matters relating to employees such as organizational development, hiring, safety, training, compensation, benefits, wellness, and motivation among others. Human Resource Management and Organizational Effectiveness Many a scholar has noted that the basic asset of an organization is its human resources. In other words, the organization cannot flourish without effective management of these resources. Organizational success can only be achieved by the implementation of effective personnel policies and procedures which all add to the achievement of the organization’s set targets, objectives and goals. It logically follows, then, that the human resource responsibilities include searching, recruiting, directing and building up employees whose desires and talents are similar to the operating needs of the business and the organization’s future goals Hrmguide (n.d). If the employees’ welfare is taken care of, their outputs also increase but if their needs are not taken into consideration they tend to produce less. For instance, effective human resource management contributed to ten major transformations in European steel companies. This was experienced in the 1990s and was based on the exchange programs controlled by Europe’s association of steel and iron companies. These programs ensured that the welfares of the employees working in the organizations were well catered for. Guest (1997) also notes that there is a strong link between human resource management and organizational effectiveness because of the direct link to the organization’s employees. Arguments for and against Human Resource Management Human resource development was developed with major controversies about the whole concept of human resource management, its definition and practices, and in order to move on, there is need to get clarifications about the controversies surrounding this concept. It can be said that these revolve around three broad areas; its meaning, practice and the ethical standing. Indeed, controversy over the meaning of human resource management has increasingly been the source of major debates among different scholars. For instance, Noon has questioned the nature of human resource management and wanted to know if human resource management is a theory, map or model (Legge, Karen, 2004). Most people find the concept of human resource management to be unclear and indefinable because of the various definitions it has. Narrowing down to a specific definition will therefore close down the many facts that are entailed in this whole concept. This therefore explains the reason as to why many articles and books contain different definitions and interpretations of this concept. Human resource management is a flexible term and covers different applications, which vary from one book to another and from one organization to the other. For instance, Jayaram, Droge, and Vickery (1999) argue that human resource management refers to all the activities dealing with managing employment relationship in the organization. The phrase “employee relations” has acted as a substitute for labour management. However, Stephen Bach disagrees with this definition arguing that the definition is a little too general hence making it difficult to; underline any distinctive feature of human resource management or the values underpinning it, table variations in its practice and conceptualizing the debate surrounding the whole concept of human resource management (Hrmguide, n.d). According to Bach, human resource management varies concerning the relations of the employees in its aim on management practices while ignoring the employees’ interest (Hrmguide, n.d). His view on the nature of human resource management suggests that it should be unitarist implying that both the interests of the employee and the employer should coincide while emphasizing on the effectiveness of the organizations. This is because most organizations tend to marginalize the interests of other stakeholders such as the employees. In addition, there should be predominant interests in organizations that focus on the motivation and the aspiration of the employees rather than downplaying their individual interests. Many critics have continued to discuss the ambiguities and contradictions withheld in the whole idea of human resource management. The postmodernist critiques point out that all conceptualizations and definitions of the concept of management are socially constructed. Besides this, the underlying fact is, increased confusion comes and persists because those using the term ignore the key distinction made in the beginning of the debate (Guest 1997). On the onset of the debate, the concept was to be defined using two approaches. The first approach defined human resource management in the generic form to refer to any move towards employment management while the second approach looked at this concept to refer to a specific and minor form of a move towards employment management. However, its generic form describes any form of people management and seeks to measure the spread or growth of human resource management since it would reflect staff management, personnel management and employment relations, while the specific approach mainly looks at a narrower move to employment whereby the employment relations are narrowly covered. Importance of Human Resource Management Organizational psychology states that flourishing organizations do not attribute their success exclusively to sustainable competitive advantages and market realities but consider their human resources as the most essential asset. Figures and facts are quantitative elements of an effective organization, but the qualitative elements are cognitive aspects, those that break or make an organization. Organizations always look for alternative methods of production that work to promote the effectiveness of the organizations. When upcoming technological advancements provide a competitive advantage to some organizations, their rivals on the other hand try to catch up through improving and adopting on the latest technologies. For example, Ford has used numerous technical advances on Toyota to operate in his plant while General Motors on the other hand has spent approximately 50 billion dollar to renovate its production facilities. A greater part of growth for the organizations is for the human resources department to hire knowledgeable employees who can bring new technological advancements into the organization. To be successful, an organization has to have employees who are highly skilled, committed, innovative, flexible and partner with the labour unions. Human resource managers have to be loyal and commit themselves to the activities of the workforce and update the employees on the organization’s plans. Human resource management works as a link between employees and the organization through according to Jayaram, Droge and Vickery (1999). The first thing an organization should consider is the needs of its employees then understand and analyze these needs to make the employees take their employment as part of their individual lives and not as an everyday obligation. Therefore, human resource management is very essential because it helps the organization to produce dedicated employees who are willing to give out their best. Human Resource Management and Organizational Effectiveness Both practitioners and academicians say that in the United States, inadequate decision-making and strategizing are not the major causes of organizational failures, but flawed implementation of policies and procedures (Gelade and Ivery, 2003). In fact, it is noted that formulating a strategy is not the problem but making it work. Indeed Hoque (1999) notes that senior executives often complain that operating and middle managers fail to provide the essential actions for the implementation of a strategy. One of the organizational theories, systems theory, says that all parts of a system must work together through a synergistic partnership for the entire system to function properly. This theory can be used to illustrate the link between the organization‘s performance and how human resources, structure and technology support each other. Recently, some scholars came up with a proposal that human resources should provide the foundation for sustained competitive advantage by linking certain variables in the organization such as organizational performance and human resource management (Ulrich, 1996). Due to the complexity of linkages in the organizations, some scholars came up with distinctions between two types of human resource practices; technical human resource practices and strategic human resource practices (Huselid, Jackson and Schuler, 1997). Strategic human resource practices refer to concepts such as flexible work forces, employee empowerment, quality improvement services, team related job designs, talent development required for the achievement of organizational goals. Technical human resource practices on the other hand refer to local personnel functions. According to Ingemar (1997), human resource management practices are increasingly contributing to organizational effectiveness. It is certain that human resource managers always contribute to the general business outcomes in one way or the other. Long ago, human resource managers were directed towards a supportive role where their thoughts on the benefits and costs justifications and other aspects of business operations were rarely implored. However, the changing nature of business organizations and market structures make it essential for business executives and owners to concentrate on the aspects of human resource operations as noted by Huselid (1995). Responsibilities that were previously confined to the specific and well-defined job descriptions have now been expanded into broader employment descriptions or role definitions. New work associations have come up such as permanent part time jobs, telecommuting and outsourcing non-strategic functions all of which are essential in improving the performance of the organizations. Human resource management therefore, functions to provide a major advice and support to the whole organization. The attraction, development and preservation of competent employees is a source of the organizational competitive advantage, which helps organizations perform effectively to achieve their targets and objectives (Ichniowski, Shaw & Prennushi, 1997). All these fall under the responsibility of the human resource manager since he is the one responsible for all matters related to employees in the organization. Conclusion Human resource management as an organizational function is the most essential part of the organization as it helps to ensure that the organization achieves its goals. Quality management requires high personnel content since it offers great importance to processes and procedures that have previously been ignored. This department is therefore essential in the success of the organization. Indeed human resources management matters in organizational operations since it contributes to the improved functioning of the organization. An organization might venture in improved technological advancements and make powerful decisions but without proper management of the human resources, all this may be in vain. As noted by Harzig and Ruysseveldt (2007), the challenge is not formulating the strategy but making it work. Both studies and experiences reveal that there is a strong link between the organizations performance and human resource management. Effective operations of the human resource managers will have a greater impact on how the organization performs and because human resource management deals with matters related to employees, if the employees welfare is well catered for then they tend to provide good returns and vise versa. In consideration of the facts stated above, it is beyond doubt that human resource management matters a lot and therefore every company should work to ensure that its human resource management is highly functional. References Armstrong, Michael (2006) A Handbook of Human Resource Management Practice (10th ed.), London: Kogan Page. Brewster, C. (1997) “International HRM: Beyond expatriation”, Human Resource Management Journal, 7(3), 31.  Brewster, C., and Scullion, H. (1997). A review and agenda for expatriate HRM. Human Resource Management Journal, 7(3), 32-41.  Gelade G. & Ivery (2003) “The Impact of Human Resource Management and Work Climate on Organizational Performance”, Journal of Personnel Psychology, 56, 383-404. Guest, D. (1997) “Human resource management and performance:  A review and research agenda”, International Human Resource Management, 8, 263-276. Harzig, A. and Ruysseveldt, J. (2007) International Human Resource Management, (2nd edition) London: Sage.  Hoque, K. (1999) “Human resource management and performance in the UK hotel industry”, British Journal of Industrial Relations, 37, 419-443. Hrmguide (n.d) Defining Human Resource Management, retrieved 24th March, 2010 http://www.hrmguide.co.uk/introduction_to_hrm/defining-hrm.htm   Huselid, M. (1995) “The impact of human resource management practices on turnover, productivity, and corporate financial performance”, Academy of Management Journal, 38, 635-672. Huselid,  M.,  Jackson, S. & Schuler, R. (1997) “Technical and strategic human resource management effectiveness as a determinant of firm performance”,  Academy of Management Journal, 1997, 40, 171-188 Ichniowski, C., Shaw, K. & Prennushi, G.   (1997) “The effects of human resource management practices on productivity”, American Economic Review, 87, 291-313. Ingemar Torbiörn, I. (1997) “Staffing for international operations”, Human Resource Management Journal, 7(3), 42-51.  Jayaram, J., Droge, G., & Vickery, S. (1999) “The impact of human resource management practices on manufacturing performance”, Journal of Operations Management, 18, 1-20. Legge, Karen (2004) Human Resource Management: Rhetorics and Realities (Anniversary ed.). Basingstoke: Palgrave Macmillan. Ulrich, D. (1996). Human Resource Champions. The next agenda for adding value and delivering results, Boston, Mass.: Harvard Business School Press. Read More