HRM IN THE MELTING POT

The role of HRM in the modern organisation

Life used to be delightfully simple. If you wanted to pursue a career in what used to be known as personnel management, you entered employment first as a personnel administrator, and then worked your way up through personnel officer to be a personnel manager. Should you be incredibly talented and/or fortunate, you might even aspire to become a personnel director. It was a straightforward system, and it meant, for most, that they didnt have to work in any part of the business other than the personnel department a fact that brought problems of its own, as we increasingly recognise today. In the modern world, however, we have to live with increasing levels of complexity and we also have to live with the fact that the language of personnel management has almost completely been superseded by the vocabulary of human resource management. For some this has been nothing more than a change of label, seemingly bolstered by an improvement in status (human resource management sounds so much more impressive than personnel management); for others it reflects something far more meaningful. Where personnel management was concerned principally with procedures, routines and administrative efficiency, human resource management, properly understood, addresses itself to much wider, much more open-ended and much more strategic issues. Clearly both are important organisations need a mixture of administrative efficiency and strategic leadership but is is rare, indeed almost unheard of, to find any business which has both a personnel department and a human resource function. Capon draws the following distinction between personnel management and HRM: Personnel management is directed very much towards the personnel or workforce and the personnel department managing their workrelated needs. In comparison the HR department considers the strategic contribution that employees make to the organisation. Issues concerning the number of employees, the skills required and the cost to the organisation

of employees with the required skills are of prime importance to the HR department. Gradually, since the 1980s, personnel departments have become HR departments and personnel officers have become HR advisers, and these changes have occurred almost regardless of whether or not the organisation has formally adopted the principles and practices of HRM itself. What are these principles and practices? According to John Storey, what is distinctive about HRM is that it is an approach to employment management which seeks to obtain competitive advantage through the strategic deployment of a highly committed and skilled workforce, using an array of cultural, structural and personnel techniques. Whereas personnel management operated in a framework of command-and-control, HRM is typified by the following characteristics: A concentration on horizontal authority and reduced hierarchy in delayered structures, with a blurring of the formerly rigid distinction between management and non-management. Wherever possible, responsibility for people management is devolved to line managers; the role of HR professionals is to support and facilitate line management in this task, not to control it. HR planning is proactive and fused with corporate planning, so that HR issues can be treated strategically in an integrated manner. Employees are viewed as assets with the potential for growth and development: one of the key purposes of HRM is to identify this potential and nurture it in line with the needs of the organisation. HRM suggests, furthermore, that both managerial and nonmanagerial employees have a common interest in the success of the organisation, so the HR department seeks to ensure that all employees are aware of this and are committed, or engaged, in the pursuit of common goals.

It is vital for ABE students to understand the above principles, and particularly to recognise that it is emphatically not the job of the HR manager or the HR department to manage the organisations people. That job is best done by the organisations line managers but, as I have indicated above, they can benefit from the contribution and expertise of the

HR function. And crucial to a proper appreciation of the role of HR in any business is acceptance of these HRM principles: A recognition of the strength of the relationship between people performance and organisational success implying in turn that if people can be developed, then they can make an even bigger contribution to the organisations achievements in both the short and the longer term; and A belief in the fundamental mutuality of interest between the organisation, its managers and its workforce, so far as the survival and growth of the business are concerned thus encouraging all moves towards employee involvement, commitment and engagement.

Central to the effectiveness of HRM is the need for HR strategies, policies and practices to be fully integrated with the strategy and strategic needs of the organisation. All HR policies should be coherent across policy areas HR planning, people resourcing, learning and development, reward and recognition, employee relations and so forth - and throughout hierarchies, and HR practices must be adjusted, accepted and used by line managers and employees as part of their everyday work. It is clearly foolish for a company to claim that it encourages teamwork and team-building, whilst simultaneously rewarding people solely as individuals; it is equally foolish for a business to suggest that any employee could move from the lowest rung of the corporate ladder to the top, if they show sufficient talent, whilst also creating a glass ceiling through the creation of a fast-track development programme for highly-qualified employees. At the same time, we have to recognise that not all organisations are the same. Some are large, some are small; some function in a highlycompetitive, cut-throat environment, others can operate comfortably without any real customer pressure; some use a lot of technology, whereas others rely on people; some are local, others are national, multinational or even global; some are public, like governmental agencies, and others are private, activated by the desire for profit. All may differ in their beliefs about people, the availability of resources for people development, and the HR strategies they seek to pursue. In fact, it seems, according to Budhwar and Sparrow, that there are four broad types of HR strategy, each leading in turn to four types of HR practice:

(1) A talent acquisition HR strategy: this emphasises attracting the best human talent from external sources, and therefore concentrates on turning the organisation into an employer brand or an employer of choice. Such a strategy would be appropriate for, say, an advertising agency, a management consultancy, a TV production company or a scientific research agency. (2) An effective resource allocation HR strategy: the goal with this kind of organisation is to maximise the use of existing human resources by always having the right person in the right place at the right time, so a great deal of attention is paid to HR planning and the people resourcing function. This kind of strategy could fit a large commercial airline (low-cost or otherwise) or a global car manufacturer. (3) A talent improvement HR strategy: here the business aims to maximise the talents of existing employees by continuously training them and guiding them in their jobs and careers, so the enterprise seeks to become a learning organisation, with priorities for learning and development underpinned by a philosophy that sees all employees as assets. A talent improvement strategy might make sense for a bank or any other type of organisation that typically continues to offer, albeit implicitly, a virtual promise of lifetime employment. (4) A cost reduction HR strategy: this is designed to reduce the personnel costs to the lowest possible level. Clearly cost reduction may be the strategy for any business during a period of economic recession, but it can be applied to some organisations virtually all the time, if they are operating in a highly competitive environment characterised by little customer loyalty and by price as a key differentiator.

Becoming an HR professional
Theres no doubt about it: HRM is an exciting, fast-moving, challenging and even inspirational function. If youve decided to pursue HRM as a career, and prepare for the ABE examinations in the HRM stream in order to acquire the necessary qualifications to make you attractive to an employer (or to make you even more attractive to your existing employer), then

youve made an excellent choice. However, there are some things you should do, and some things you should avoid. First, be clear about your motives for wanting to become an HR professional. These days you shouldnt be choosing HR because you want to work with people, because there are many other jobs that afford better opportunities for working with people. You should be considering HR as a career for one of the following reasons: Because you want to make a difference to peoples work lives through the operation of an efficient and effective HR service, and thus make a difference to the performance of the organisation that employs you. Because you want to be truly professional dedicated, thorough, imaginative, ethical, knowledgeable, businesslike and above all competent. Because you want to become a continuous learner, developing your skills and capabilities (and thus your value) as the business of HR develops and evolves.

Second, acknowledge the fact that becoming an HR professional requires some serious study from you: its not something which can happen merely by reproducing platitudes about people in your examinations. There is a vast body of knowledge that surrounds HRM, and you must familiarise yourself with it. You need to buy or acquire one of the recommended textbooks, you must set aside some active reading periods in order assimilate what the book contains. In addition, and especially if you dont have any direct experience of work and organisations yourself, you must keep yourself up-to-date, and broaden your coverage of the HRM field, by reading articles and features in business magazines, quality newspapers and journals. If you have Internet access, use it periodically to undertake Google searches on such key topics as employee engagement and employer branding. Thirdly, and finally, in your personal life as well as in your emerging professional career, you should set out to become the kind of person who ticks most if not all the boxes in the list of differential behaviours which has been developed by the Chartered Institute of Personnel & Development as part of its own vision for the competent, authoritative and knowledgeable HR practitioner.

I wish you every success, not just in your ABE examinations, but also for your future. With the ABE behind you, you will become a positive contributor to what the CIPD and I believe to be the three main pillars of progress that matter in this modern world: (1) (2) (3) Wealth creation adding to the success of your organisation; Wellbeing adding to the sense of fulfilment of the people who work in your organisation; A more responsible World adding to the quality of the environment.

Written by Ted Johns, ABE Chief, HRM Programmes 20 June 2008 Vignette (insert to be incorporated alongside the article, if there is sufficient space) The Differential Behaviours of the World-class HR Practitioner (with acknowledgments to the Chartered Institute of Personnel & Development) Open to trying new approaches Seeks and generates new ideas Considers options and evidence before making decisions Evaluates and learns from experience Continually self-develops in preparation for the future Pushes at and/or determines the boundaries and/or priorities of the role Acts as an advocate for the organisation Takes personal ownership of the outcomes and outputs from your work Manages conflicting demands, stakeholder needs and views Wherever possible, seeks to build commitment to a change Works across organisational boundaries (does not look at the organisation purely from an HR perspective) Enables individuals and teams to maximise their performance and potential Achieves results: meets or exceeds expectations Acts ethically, legally and with integrity

Ted Johns Biography Ted Johns is the ABEs Examiner for Managing People and Personnel Administration, two core papers for the ABEs Certificate in Human Resource Management. He is also the Chief Examiner for the whole HRM programme, at Certificate, Diploma and Advanced Diploma levels. Apart from his intensive involvement with ABE, Ted Johns is also a Chief Examiner for the Chartered Institute of Personnel and Development and officiates as Chairman of the Institute of Customer Service. He is a prolific writer, having published books on such topics as business ethics, organisational change, time management and customer care; in addition he writes a regular column for Customer Management magazine and has produced articles for People Management, Employment Relations Review, Marketing Insights (Singapore) and Management Today. His consultancy experience includes assignments undertaken for Credit Suisse First Boston, National Westminster Bank, Philips, and Prudential Assurance. Ted is an engaging, entertaining and stimulating speaker who makes frequent keynote presentations at both in-company and other conferences.