Chapter 1: Introduction to Human Resource Management

The History of Human Resource Management

Human resources management (HRM) has gone through four stages before reaching its present state. These are the Lonca (guild) system, scientific management, human relations and organizational science.

The guilds determine the working conditions and production methods for each profession. They also check the quality of the products. From this point, some functions of guilds can be attributed with HRM’s.

Scientific approaches to how to regulate working conditions were developed together with the industrial revolution and mass production. Scientific management is based on good ways of doing a job.

Focusing on improving the productivity of individuals through group experimentations, Elton Mayo’s work, ‘the Hawthorne Studies’ pioneered the research on social factors related to work. It also provided a basis for the human relations approach, which emphasized the importance of understanding the needs of employees in order for them to be efficient in and satisfied with their work.

After understanding the inadequacy of the human relations approach, scientists from different disciplines such as psychology, sociology, economics, communication and politics have started working on this matter. Organizational science has not only focused on the individual, but also on the whole organization.

Personnel management, which has a narrower scope than the concept of human resources management with the roots going back to the industrial revolution, can only be considered as a profession only after the World War I. It can be said that the concept of personnel management. It focuses more on the work of staff.

Initially, personnel management had a function to support the management as well as the basic duties. It is now a structure, which is responsible for technical and operational activities such as recruitment, selection placement, evaluation and compensation in organizations.

It has remained within its area of expertise and has played a limited role by almost never taking decisions on how to steer organizational strategies. Employees are considered to be a cost element. Issues such as payments, insurance transactions, permissions, public holidays and reported days, absenteeism and excuses are in the area of personnel management.

The concept of personnel management has been replaced by human resources management since the 1980s. Human resource management is about managing people in organizations as effectively as possible for the good of the employees, the company, and society.

The overall goals of human resources management include productivity, quality of working life, legal compliance, competitive advantage and workforce adaptability. These goals provide survival, competitiveness, growth, profitability and flexibility to an organization.

Differences between personnel management and human resources management are considered philosophical. Personnel management deals with the execution of administrative affairs in the organization. On the other hand, HRM focuses on the workforce to ensure the success of the organization. It can be said that HRM finds the human factor in the organization more important.

Personnel management can be described as reactive, providing a response to demands and concerns as they are presented. By contrast, human resources involves ongoing strategies to manage and develop an organization’s workforce. It is proactive as it involves the continuous development of functions and policies for the purpose of improving a company’s workforce.

HRM is a more holistic and strategic perspective than personnel management and it is also a unitary approach, which directs more attention toward individual development, commitment, flexibility and adaptability.

The concept and processes of strategic human resource management (SHRM) developed in the late 1970s and 1980s. Strategic HRM means formulating and executing HR systems - HR policies and practices - that produce the employee competencies and behaviors the company needs to achieve its strategic aims. Focusing on organizational performance rather than individual performance in strategic human resources management is a fundamental difference between HRM and SRHM.

The term sustainable HRM has been used since the early 2000s. It has been used to refer to social and human outcomes, which contribute to the continuation of the organization, in the long term that is to a sustainable organization. It has also been used to refer to HRM activities, which enhance positive environmental outcomes Green HRM (GHRM), and positive social and human outcomes for their own sake, rather than just as mediating factors between financial outcomes and strategy.

The Functions Of Human Resource Management

There are a variety of HR practices such as; job analysis and design, human resource planning, recruitment, training and development, performance evaluation, career development, orientation, compensation, employee relations.

Job analysis is the process of describing and recording the purpose of a job, its major duties and activities, the conditions under which it is performed and the necessary knowledge, skills and abilities. Job design is described as an outgrowth of job analysis that improves jobs through technological and human considerations in order to enhance organization efficiency and employee job satisfaction.

Human resource planning means forecasting personnel needs and detailing the steps necessary to meet these needs.

Recruitment is the process of finding and engaging the people the organization needs. Selection is that part of the recruitment process concerned with deciding which applicants or candidates should be appointed to jobs. The first stage of recruitment is defining requirements.

There are two main recruitment sources, internal and external. Organizations recruit existing employees through job posting, or communicating information about the vacancy on company bulletin boards, in employee publications, on corporate intranets, and anywhere else the organization communicates with employees. There is a wide range of external sources such as the social websites.

Strategically, companies should train and develop their employees in accordance with their objectives. Training consists of an organization’s planned efforts to help employees acquire job related knowledge, skills, abilities, and behaviors, with the goal of applying these on the job.

New communication technologies have played a facilitating role in training and development as well as other functions of HRM. There are a large number of certificate programs on topics such as coaching, consulting skills, and presentation skills, as well as online workshops on hundreds of topics such as game design, survey design, and developing a mentoring program.

Performance management is the process through which managers ensure that employees’ activities and outputs contribute to the organization’s goals. Performance appraisal means evaluating an employee’s current or past performance relative to his or her performance standards. Performance evaluation is the important part of the process.

The basic approaches of performance measurement are comparative approach, attribute approach, behavioral approach, results approach and quality approach. Each method has its own advantages and disadvantages. Considering these possibilities of unfairness, management experts have long argued that most performance appraisals neither motivate employees nor guide their development. After performance evaluation, information must be given to the employee.

There are stages of a career within an organization can be described as a career life cycle. A career life cycle consists of five stages that entry to the organization, progress within particular areas of work, Mid-career, Later career, End of career. There is a new type of career called a protean career which could be defined as a career that frequently changes based on changes in the person’s interests, abilities, and values and in the work environment.

Career development is not just about meeting the demands of organization. Also, it must provide some opportunities and flexible work arrangements for employees. There is also the term talent management, which could be defined in three ways:

1. As a combination of standard human resource management practices such as recruitment, selection and career development.
2. As the creation of a large talent pool, ensuring the quantitative and qualitative flow of employees through the organization.
3. As a good based on demographic necessity to manage talent.

Finding future senior managers/leaders, developing highpotential employees, retaining key staff is the most important objectives of talent management. Through attracting and recruiting key staff to the organization can meet the future skills requirements of the organization.

The concept of talent with globalization has become a strategic competitive element for companies. Talent management is not satisfied with forecasting about the organization’s future. It keeps the action plan alive for the future.

The objectives of orientation programs include making new employees familiar with the organization’s rules, policies, and procedures. Orientation helps to get some practical information, as well as emotionally attached the employee with the organization. Orientation program includes explaining basic matters, department’s organization, employee benefits, personnel policies, safety measures and regulations, a facility. By means of making employee familiar with the workplace, him/her first day stress can be reduced.

Employers also use technology to support orientation. There are online learning options which include new firm’s mission, organization structure, and policies and procedures. An example for a technology-based orientation can be a virtual office tour. People visiting the site which have virtual office tour can virtually enter each of the company’s offices, walking through meeting rooms and talking virtually with local employees, to get a feel for what working in that office is like.

Employee compensation includes all forms of pay going to employees and arising from their employment. It has two main components, direct financial payments and indirect financial payments. There are two types of payments, which are used commonly; time-based and performance-based.

In compensation, one also can address external, internal, individual, and procedural equity. Managers use various means to address such equity issues. These can be listed as salary surveys, job analysis, job evaluation, and performance appraisal. Contemporary topics in compensation include competency-based pay, broad banding, comparable worth, the pay gap, board oversight of executive pay. Total rewards programs are not only designed to meet the employee’s financial needs, but are also designed to meet the needs of self-fulfillment.

Employee relations consist of the approaches and methods adopted by employers to deal with employees either collectively through their trade unions or individually. One of these contexts is employee relation policy, which state the approach of the organization about relationships between management and employees and their unions. The areas covered by employee relations policies are trade union recognition, collective bargaining, employee relations procedures, participation and involvement, partnership harmonization and working arrangements.

The second context is the employment relationship. The employment relationship includes mutual obligations. Employee’s main obligation is to provide skill and effort in return for salary or wage. Also, obedience, competence, honesty and loyalty are described as other obligations of employees. On the other hand; employer’s obligations are providing safe workplace and building trust for employees. They also have to act in good faith towards the staff. In this way a high-trust organization can be developed.

There are three types of employment relationship contracts; which are transactional, relational and psychological. Transactional contracts contain financial matters in a formal way. Relational contracts are described as a more informal way, which are related to an organization by a membership. Lastly, the psychological contract which is implied rather than stated.

The third context is related to labor relations and collective bargaining. Labor Relations emphasize skills that managers and union leaders can use to minimize costly forms of conflict (such as strikes) and seek win-win solutions to disagreements.

Another context employee voice is defined as the employees to express their organizational concerns and expectations. Participation and involvement are the main elements of employee voice. These take the forms of joint consultation, participation, collective representation, upward communication, attitude surveys, suggestion schemes and project teams.

Employee communications as the last context is important for improving employee engagement. These are important for improving employee engagement. Some of the communication methods are individual face-to-face communication, intranet, team briefing, consultative committees, notice boards, speak-up programs, magazines, newsletters and bulletins. In addition, social networks, forums, web sites, such as media, employees can begin to express their views anonymously.

All of the mentioned contexts have an important role for building positive relationships between employers and employees which relies on mutual values.

New Concepts And Approaches In Human Resource Management

Globalization and new technological developments have changed work and workforce. The changes in labor force can be referred to as demographic and diversity-based. In particular, it can be said that new forms of work resulting from technological developments have increased participation in the workforce.

Outsourcing, offshoring and multinational companies have had an impact on these too. As a result of these developments, disciplines such as diversity management, knowledge management have also begun to be utilized.

Baby boomers who take place managerial positions generally have been retired. Generation X has substituted them. Generation Y are getting more involved in workforce day by day. At the same time, work has shifted from manufacturing jobs to service jobs. Structural changes such as virtual organizations, global corporations, network organizations have also been very effective in shaping the new work and workforce.

Outsourcing means having outside vendors supply services (such as benefits management, market research, or manufacturing) that the company’s own employees previously did in-house. HR departments help with a transition to outsourcing and many of their functions are being outsourced. Generally; recruitment, outplacement, training and development functions are outsourced by firms. Moreover, HRP have option of outsourcing in order to meet the needs of organization.

Exporting products, offshoring and company partnership made many organizations globalized in last decades. Many organizations prefer to work with locals due to the cost of sending someone abroad. Moreover, it is advantageous for organizations that locals know the culture and all systems of their countries. Working with transnational and virtual teams can be another solution. Reducing costs and entering new markets are the factors behind globalization. Moreover, information and communication technology enable organizations to work with employees anywhere in the world.

A global organization needs a transnational HRM system that features decision making from a global perspective, managers from many countries, and ideas contributed by people from a variety of cultures. This concept of HRM also is termed international human resource management (IHRM).

Virtual organizations consist of members who use information and communication technologies, a shared knowledge base, and work under geographically distant conditions. Being virtual is a characteristic structural attribute for organizations such as being global. The person who work in a virtual organization may be termed as teleworker, distant, worker, telecommuter, off-site or remote worker, flexible or flex place worker, e-worker and co-located worker. The HR management in virtual organizations is mostly performed through e-HRM.

Digital age has affected all areas of life as well as human resources management in both ways; conceptually and contextually. New terms and practices such as human resource information systems, electronic human resource management, e-recruitment, career websites, social networks have entered the field of human resources.

HR information system (HRIS) is a computer based information system for managing the administration of HR processes and procedures. HRIS could be defined as the most comprehensive expression of human resources management with technology.

There are many firms, which offer HRIS packages. The uses of software and intranet, integration with other IT systems in the organization, provisions for self-service are the main features of an HRIS. Most suppliers of human resource management systems, such as Kronos and Oracle, offer totally cloud-based systems.

E-HRM is defined as the processing and transmission of digitized HR information, especially using computer networking and the Internet. E-HRM allows small firms with limited facilities to fulfill their HRM functions.

Electronic-recruitment or online recruitment takes place on company web sites, online job boards, social media the main platforms of e-recruitment. Online recruiting generally involves posting career information at company websites to address people who are interested in the particular company and posting paid advertisements at career services to attract people who are searching for jobs.

Web sites and online job boards are less interactive compare with social networks. However, it is very useful for both the candidate and the employer since both the job information and the candidate qualifications are categorized.

Although e-recruitment benefits from social networks and virtual communities, it also benefits from other tools of social media. Having an online presence is important for professionals, specifically those looking for employment. Facebook and LinkedIn, which are the most used applications of electronic recruitment process, are categorized as social networks. Managers use LinkedIn to find passive employment candidates (those not actively looking for jobs), and to check out active candidates.

As a result, all types of social media can benefit from erecruitment. It is possible to say that this is an effective, cheap and fast way. As the possibilities of social media evolve, HRM continues to explore the creative and effective ways of benefiting from it.