HUMAN RESOURCE MANAGEMENT

 

If an organization is to achieve its goals, it must not only have the required re­sources, it must also use them effectively. The resources available to a manager are hu­man, financial, physical, and informational. While human resources (HR) have always been critical to the success of any organization, they have assumed an increasingly greater importance that is being recognized inside and outside work organizations.
Human resources departments typically include individuals with a wide variety and range of knowledge, skills, and abilities who are expected to perform job activities in a manner that contributes to the attainment of organizational goals. How effectively em­ployees contribute to the organization depends in large part upon the quality of the HR program (including staffing, training, and compensation) as well as the ability and will­ingness of management--from the CEO to first-line supervisors--to create an environ­ment that fosters the effective use of human resources.

 

Why Study Human Resources Management (HRM)?

Anyone who embarks on a course of specialized study typically wonders about its relevance to his or her interests and goals. The answer to the question "Why study HRM?" should become apparent as we explore the importance of HRM and examine the contributions it can make to an organization. Whether you are working in the HRM function of your organization or as a staff professional or line manager, you will definitely need to be aware of the various roles and responsibilities in dealing with employers in your organization.

 

The Importance of HRM

For many decades such responsibilities as selection, training, and compensation were considered basic functions of the area historically referred to as personnel management. These functions were performed without much regard for how they related to each other. From this narrow view we have seen the emergence of what is now known as human resources management.

Personnel management
basic functions of selection, training,
compensation, etc., in the management of
an organization’s personnel

        Human resources management (HRM), as it is currently perceived, represents the extension rather than the re­jection of the traditional requirements for managing personnel effectively. An understanding of human behavior and skill in applying that understanding are still required. Also required are knowledge and understanding of the various per­sonnel functions performed in managing human resources, as well as the ability to perform those functions in accordance with organizational objectives. An awareness of existing economic, social, and legal constraints upon the perfor­mance of these functions is also essential.

Human resources management (HRM)
extension of the traditional requirements of
personnel management, which recognizes the
dynamic interaction of personnel functions
with each other and with the strategic
and planning objectives of the
organization.

        HRM, as it is practiced today, recognizes the dynamic interaction of person­nel functions with each other and with the objectives of the organization. Most important, it recognizes that HR planning must be coordinated closely with the organization’s strategic and related planning functions. As a result, efforts in HRM are being directed toward providing more support for the achievement of the organization’s goals, whether it be a profit, not for profit, or governmental or­ganization.

 

HRM: Current Challenges

According to a survey of senior HR executives in Personnel Journal's top 100 com­panies (based on 1992 revenues), the most challenging HR issues are health care costs, reorganizing and downsizing organizations, and mergers and acquisitions. These issues are followed by problems in managing diverse groups of workers who have different attitudes, values, and work behaviors; managing for top-quality performance (TQM); team building; and responding to the needs of the families of employees. Other areas presenting challenges are workers’ compensation, labor relations, and management development. International companies face increased global competition.
One may expect to see new issues and challenges emerging in the future that require appropriate action. Evolving business and economic factors forge changes in the HR field requiring that preparation for change be an ongoing process.

Role of the HR Department

Top management generally recognizes the contributions that the HR program can make to the organization and thus expects HR managers to assume a broader role in the overall organizational strategy. Thus HR managers must remember the bottom line if they are to fulfill their role. Investment in sophisticated HR practices contributes to greater financial performance and productivity and to reduced turnover.
In the process of managing human resources, increasing attention is being given to the personal needs of the employees. The HRM Department activities influence both the individ­ual and society.
Increasingly, employees and the public at large are demanding that employ­ers demonstrate greater social responsibility in managing their human resources. Complaints that some jobs are revitalizing the lives and injuring the health of employees are not uncommon. Charges of discrimination against women, minori­ties, the physically disabled, and the aged with respect to hiring, training, ad­vancement, and compensation are being leveled against some employers.
Issues such as comparable pay for comparable work, the rising costs of health benefits, day care for children of employees, and alternative work schedules are concerns that many employers must address.
All employers are finding that privacy and confidentiality of information about employees are serious matters and deserve the greatest protection that can be provided.
Where employees are organized into unions, employers can encounter costly collective bargaining proposals, strike threats, and charges of unfair labor prac­tices. Court litigation, demands for corrective action by governmental agencies, sizable damage awards in response to employee lawsuits, and attempts to erode the employment-at-will doctrine valued by employers are still other hazards that contemporary employers must try to avoid.

 

The HR Role of Managers and Supervisors

Students who are now preparing for careers in organizations will find that the study of HRM will provide a background of understanding that will be valuable in managerial and supervisory positions. Although HR managers have the re­sponsibility for coordinating and enforcing policies relating to the HR functions, all managers and supervisors are responsible for performing these functions in their rela­tions with subordinates.
It is in such positions of leadership that the majority of students will be employed. HRM is therefore oriented to help you in managing subordinates more effectively, whether you become first-line supervisor or chief executive officer.
Discussions concerning the role of the HR department can serve to provide one with a better understanding of the functions performed by this department. A familiarity with the role of the HR department should help you to cooperate more closely with the department’s staff and to utilize more fully the assistance and services available from this resource.
The present status of HRM was achieved only af­ter years of evolutionary development. You need to understand the forces that have contributed to this process and to become more aware of forces acting today that will have an effect on HRM in the future.

Development of Human Resources Management

HRM, at least in a primitive form, has existed since the first attempts at group effort. Certain HR functions, even though informal in nature, were performed whenever people came together for a common purpose. During the course of this past century, however, the processes of managing people have become more formal­ized and specialized, and a growing body of knowledge has been accumulated by practitioners and scholars.
An understanding of the events contributing to the growth of HRM can provide a perspective for contemporary policies and practices.

USA HISTORICAL DEVELOPMENT OF HRM PRACTICES
YEAR	EVENT
1796	Earliest authenticated strike in America; Philadelphia printers seek to gain minimum weekly wage of $6.
1848	Passage of a law in Philadelphia setting a minimum wage for workers in commercial occupations.
1881	Beginning of Frederick W. Taylor’s work in scientific management at the Midvale Steel Plant in Philadelphia.
1883	Establishment of the U.S. Civil Service Commission.
1886	Founding of the American Federation of Labor (AFL).
1912	Passage in Massachusetts of the first minimum wage law.
1913	Establishment of the U.S. Department of Labor.
1915	First course in personnel administration, offered at Dartmouth College.
1920	First text in personnel administration, published by Ordway Tead and Henry C. Metcalf.
1924	Point method of job evaluation developed by the National Electric Manufacturers’ Association and the National Metal Trades Association.
1927	Hawthorne studies begun by Mayo, Roethlisberger, and Dickson.
1935	Establishment of the Congress of Industrial Organizations (CIO) by several unions previously affiliated with the AFL.
1539	Publication of the first edition of the Dictionary of Occupational Titles.
1941	Beginning of U.S. involvement in World War II, demanding the mobilization of individuals trained in personnel management and the rapid development of personnel programs in the military and in industry.
1955	Merger of the AFL and CIO.
1957	Federal Women’s Program established by the U.S. Civil Service Commission to enhance the employment and advancement of women.
1975	Beginning of a professional accreditation (now certification) program by the Personnel Accreditation Institute.
1978	Passage of the Civil Service Reform Act, which established the Office of Personnel Management (OPM), the Merit Systems Protection Board (MSPB), and the Federal Labor Relations Authority (FLRA).
1982	Beginning of the erosion of the employment-at-will doctrine, with increasing attention to "just cause" terminations.
1985	Increased emphasis on employee participation in organizational decision making to improve productivity and competitive position.
1990	Heightened awareness of privacy rights of employees as employers monitor employee performance.
1991	Increased emphasis on global HR practices; greater use of temporary employees; observed
1995	Emphasis on sexual harassment; heightened attention to greater diversity in the workforce; increased emphasis on total quality management; and downsizing or "rightsizing" of organizations.

 

 

The Factory System

During the nineteenth century, the development of mechanical power made pos­sible a factory system of production. The concentration of workers in factories served to focus public attention on their conditions of employment, which were often unhealthy and hazardous.
During the late 1880s, laws were passed in some states to regulate hours of work for women and children, to establish minimum wages for male labor, and to regulate working conditions that affect employee health and safety. It was also at this time that laws were enacted to provide pay­ments for injuries suffered in industrial accidents. Eventually, as the result of leg­islation and collective bargaining, employment conditions began to improve.

 

The Mass Production System

Mass production was made possible by the availability of standardized and inter­changeable parts designed to be used in assembly-line production. With this sys­tem came improvements in production techniques and the use of labor-saving machinery and equipment. The accompanying increases in overhead costs and wage rates, however, forced companies to seek ways of using production facilities and labor more efficiently. Frederick W. Taylor’s work at the Midvale Steel plant in Philadelphia stimulated the scientific management movement.
According to Taylor, scientific management required accurate performance standards based on objective data gathered from time studies and other sources. These standards provided a basis for rewarding the superior workers financially and for eliminating the unproductive ones. Taylor's approach was in sharp con­trast to the then-prevailing practice of attempting to gain more work from em­ployees by threatening them with the loss of their jobs.

Scientific management

substitution of exact scientific investigation
and knowledge for individual judgment of
either the worker or the boss

 

The Hawthorne Studies

Begun in the 1920s, the Hawthorne studies were an effort to determine what effect hours of work, periods of rest, and lighting might have on worker fatigue and productivity. These experiments constituted one of the first cooperative industry-university research efforts. As the studies progressed, however, it was discovered that the social environment could have an equivalent if not greater effect on productivity than the physical environment.

Hawthorne studies
experiments in the 1920s to determine
what effect hours of work, periods of
rest, and lighting have upon
worker fatigue and
productivity

Conducted at the Western Electric Company’s Hawthorne Works near Chicago, Illinois, these studies were a pioneering endeavor to examine factors affecting productivity. HR specialists generally agree that the Hawthorne studies played a very important role in the development of HRM.
The studies spurred efforts to hu­manize the workplace and to find more-sensitive ways to motivate workers. Out of the interviewing techniques used by the Hawthorne researchers grew the nondirective approach to counseling, which recognizes the importance of “feel­ings.” Until that time, it was generally considered inappropriate in employment situations to study attitudes, beliefs, behaviors, and feelings.

 

The Human Relations Movement

The Hawthorne studies, and related industry research, helped to give rise to the human relations movement by providing new insights into human behavior. This movement focused attention on individual differences among employees. It studied the influence that informal groups can have upon employee performance and behavior. It also focused atten­tion on the necessity for managers to improve their communications and to be more sensitive to the needs and feelings of their subordinates.

Human relations movement
movement that focused attention on
individual differences among employees
and on the influence that informal groups
have upon employee performance
and behavior

        This research emphasized the need for a more participative and employee-centered form of supervision. Various principles and practices currently applied in employee involvement, work teams, and employee empower­ment grew out of the work of researchers and practitioners of the early human rela­tions movement.

 

Contributions of the Behavioral Sciences

As the human relations movement evolved, it became broader in scope. The un­derstanding of human behavior was enhanced by contributions not only from the traditional disciplines of psychology, sociology, and anthropology, but also from social economics, political science, linguistics, and education. The interrelationships of these various disciplines are now referred to collectively as the “behavioral sciences.”

Behavioral sciences
various disciplines of psychology,
sociology, anthropology, social economics,
political science, linguistics, and education

The behavioral science approach is oriented toward economic objectives, concerned with the total climate or milieu, and consistent with the development of interpersonal competence. It is a humanistic approach. The use of groups and employee participation in the achievement of organizational objec­tives, including the management of change, is now a formally recognized field of study in universities worldwide.
Managers draw upon the results of these studies regularly in managing staffs. It is not just an HRM field of endeavor. Managers worldwide apply the concepts in everyday activities.

 

Growth of Governmental Regulations

Prior to the 1930s, employer relations with employees and with their labor orga­nizations were subject to very few laws and regulations in the USA. However, political pressures for social reform created by the depression of the 1930s gave rise to both federal and state legislation affecting these relations. Starting with the National Labor Relations Act in 1935, federal regulations have expanded to the point where they govern the performance of virtually every HR function. From highly industrialized nations to developing countries, governments constantly regulate the workplace.
HR managers and supervisors are responsible for compliance with all laws and regulations that govern work environments. These requirements are often very stringent and vary greatly from country to country in our global workforce.
Although employers are often critical of the demands these laws and regulations impose on their operations, most legislation is a response to employers’ lack of social responsibility, as manifested by their poor treatment of employees in the past. As a manager of people, wherever you work in the world, you will constantly be dealing with a great many legal regulations affecting your actions in dealing with employees.

 

Increased Specialization of HR Functions

Initially, the management of human resources was limited largely to hiring, firing, and record keeping, functions carried out by managerial and supervi­sory personnel. Eventually, clerical personnel were employed to assist in keeping records relating to hours worked and to payroll. Computers handle much of the general record keeping in most parts of the world.
By the 1940s the typical personnel department in a medium-sized or large firm included individuals with specific training and/or experience in carrying out various specialized functions. The major functions performed in organiza­tions today are shown below.

 

Increasing Emphasis on Strategic Management

Top management expects HR managers to assume a broader role in overall organizational strategy. HRM is playing a vital role in creating and sustaining the competitive advantage of an organization. In order to carry out their expanded role, many HR professionals will need to acquire competencies such as these:

1.    Business capabilities. HR professionals will need to know the business of their organization thoroughly. This requires an understanding of its financial capabilities.

• State-of-the-art HRM practices. HR professionals will be the organization’s behavioral science experts. HR professionals should develop competencies in staffing, development, appraisal, rewards, team building, and communication.
• Management of change process. HR professionals will have to be able to “manage change processes” so that HR activities are effectively merged with the business needs of the organization.

The ability to integrate business, HRM, and management of change is essen­tial. By helping their organizations build a sustained competitive advantage and by learning to manage many activities well, HR professionals will become strate­gic business partners. Many of the most forward-looking CEOs are seeking top HR managers who will report directly to them and help them address key issues.

Professionalization of Human Resources Management

Because of the changes occurring in the workforce, HR managers can no longer function simply as technical specialists who perform the various HRM functions. Instead, they must concern themselves with the total scope of HRM and its role within the organization and in society as a whole. Therefore HR managers today should be professionals with respect to both their qualifications and their performance.
One of the characteristics of a profession is the development through re­search and experimentation of an organized body of knowledge. This knowledge is exchanged through conferences, seminars, and workshops sponsored by profes­sional associations. The latest information in the field is communicated through the literature published by the professional associations, as well as by various nonprofit organizations and educational institutions.
Other characteristics of a profession include the establishment of a code of ethics and of certification re­quirements for its members. HRM exhibits all these characteristics.

 

Professional Associations and Certification

Today a number of professional organizations represent general, as well as spe­cialized, areas of HRM. The professional association with the largest member­ship--more than 47,000--is the Society for Human Resource Management (SHRM). Affiliated with SHRM are more than 400 local chapters in major cit­ies throughout the United States, many of which sponsor student conferences, seminars, and workshops.
The national annual meeting of the society is held in a different city each year. The society publishes HR Magazine (formerly Personnel Administrator) and HR News (formerly Resource), as well as various books and bul­letins. While HR Magazine is available to the general public and is found in most libraries, HR News is generally available only by personal or organizational sub­scription.
SHRM frequently collaborates with the U.S. Bureau of National Affairs (BNA) in conducting surveys in various areas of HRM.
Other leading professional associations in the field include the Interna­tional Personnel Management Association, the International Association for Personnel Women, the American Management Association (AMA), and the Conference Board (CB). AMA and CB are prominent nonprofit organizations that provide publications and educational services relating to HRM and other functional areas.
Organizations that represent specialized areas of interest in­clude the Human Resource Planning Society, the American Compensation As­sociation, the International Foundation of Employee Benefit Plans, the American Society for Training and Development, the Association for Industrial Research, and the Society for Industrial and Organizational Psychology of the American Psychological Association. For professors in the field, there is the Per­sonnel and Human Resources Division of the Academy of Management.
All of these organizations sponsor meetings and workshops that promote the profes­sional growth of their members. They also provide opportunities for contact with other organizations, including government agencies. Most have excellent websites for you to review.

The professionalization of a field generally leads to some form of certifica­tion for practitioners to enhance their status and to recognize their competency. The Human Resource Certification Institute of SHRM has developed such a program for professionals in HRM. The program offers two types of certification, each of which reflects the number of specialties and the amount of experience and/or academic training possessed by the recipient.

Certification
recognition of having met
certain professional standards

To qualify for either certification, an applicant must provide verification of experience and pass an intensive four-hour written examination to demonstrate mastery of knowledge. The certifications, which must be renewed every three years, serve largely to indicate the qualifications of recipients and encourage others to qualify for certification.
There are other certifying agencies with specific certification designations in the areas of compensation, employee benefits, and safety and health. As the reputations of these programs grow and the pro­grams become more widely recognized by top management, certification will be­come an important qualification for individuals seeking positions in HRM.

 

Code of Ethics

It is typical for professional associations to develop a code of ethics that members are expected to observe. The code shown in Highlights in HRM 2 was developed for HR managers by the SHRM. Many large corporations have their own code of ethics to govern corporate relations with employees and the public at large.

Society for Human Resource Management
Code Of Ethics
As a member of the Society for Human Resource Management, I pledge myself to:
Maintain the highest standards of professional and personal conduct.	Instill in the employees and the public a sense of confidence about the conduct and intentions of my employer.
Strive for personal growth in the field of human resource management.	Maintain loyalty to my employer and pursue its objectives in ways that are consistent with the public interest.
Support the Society’s goals and objectives for developing the human resource management profession.	Uphold all laws and regulations relating to my employer’s activities.
Encourage my employer to make the fair and equitable treatment of all employees a primary concern.	Refrain from using my official positions, either regular or volunteer, to secure special privilege, gain or benefit for myself.
Strive to make my employer profitable both in monetary terms and through the support and encouragement of effective employment.	Maintain the confidentiality of privileged information
	Improve public understanding of the role of human resource management
This Code of Ethics for members of the Society for Human Resource Management has been adopted to promote and maintain the highest standards of personal conduct and professional standards among its members. Adherence to this code is required for membership in the Society and serves to assure public confidence in the integrity and service of human resource management professionals.

 

        Adherence to a code often creates a dilemma for professionals, including those in HRM. Consider these questions. Whom do HR profession­als service? Who is the client--management or the individual employees? In the course of serving the employees and management and maintaining respect and regard for human values, whose needs are paramount? What happens when—as is frequently the case in HR work—the confidential issues of management and/or the employees are in conflict?”
These and similar questions are not easy to answer. However, the fact that there is a code in itself focuses attention on ethical values and provides a basis for HR professionals to evaluate their plans and actions.
The HR staff is concerned with monitoring ethics in its own operations. However, HR departments have been given a greater role in communicating the organization’s values and standards, monitoring compliance with its code of ethics, and enforcing the standards throughout the organization. Many organizations have ethics committees and ethics ombudsmen to provide training in ethics to employees.
The ultimate goal of ethics training is to avoid unethical behavior, adverse publicity, and potential lawsuits and to gain a strategic advantage. To achieve these objectives, two approaches are frequently used: (1) developing employee awareness of ethics in business and (2) drawing attention to potential ethical issues to which an employee may be exposed.

 

Professional Literature

Personal development in any profession requires knowledge of the current literature in the field. A number of periodicals contain articles on general or specialized areas of interest in HRM. Some of the more important journals students and practitioners should be familiar with are shown below.

Some Important Professional Journals

Compensation and Benefits Review Employee Relations Law Journal Employee Responsibility and Rights HR Focus HR Magazine HR News Human Relations Human Resource Management Human Resource Management Review Human Resource Planning Human Resources: Journal of the International      Association for Personnel Women Industrial and Labor Relations Review Industrial Relations International Journal of Human Resources      Management

International Journal of Selection and      Assessment Journal of Applied Psychology Journal of Collective Negotiation in the Public      Sector Journal of Labor Research Journal of Management Labor Law Journal Monthly Labor Review National Productivity Review Personnel Personnel Journal Personnel Psychology Public Personnel Management Supervisory Management Training and Development Journal

 

Other periodicals that cover the general field of business and management often contain articles pertaining to HRM. Among these are Academy of Management Executive, Academy of Management Journal, Academy of Management Review, Business Horizons, California Management Review, Canadian Business Review, Euro­pean Management Journal, Fortune, Harvard Business Review, Journal of Business Eth­ics, Management Review, Business Week, and The Wall Street Journal.

 

Research Organizations

The primary function of HR Research organizations is to conduct research and to make their findings available to all who are interested. Many such organizations are found at universities.
Proba­bly the largest university research center in the behavioral sciences is the Insti­tute for Social Research at the University of Michigan. Its three divisions--the Survey Research Center, the Research Center for Group Dynamics, and the Center for Political Studies--have together published over 5,000 books, articles, and reports.
A number of state universities have centers for the study of labor and indus­trial relations, including the Universities of California, Minnesota, Illinois, and New York. The School of Industrial and Labor Relations at Cornell University is also well known for its publications. Organizations sponsored by industry, such as the American Management Association (AMA) and the Conference Board (CB), publish research studies that benefit managers in HRM. Rand Corpora­tion of Santa Monica, California, and the Brookings Institution of Washington, D.C., are also recognized for their contributions to this field.
The Bureau of National Affairs (BNA), Commerce Clearing House (CCH), and Prentice-Hall (PH) also conduct surveys relating to HRM policies and prac­tices. Survey results from these organizations may be found in loose-leaf volumes that contain a wealth of information about policies and practices and the legal aspects of HRM.
The student of HRM should become familiar with the various BNA, CCH, and PH publications that are updated regularly. These volumes are available in many college and university libraries, city libraries, and the libraries of the larger work organizations. The World Wide Web search engines will help you gain access to these organizations and HR Research.

 

Academic Training

With so much attention focused on the behavioral sciences during the 1960s and 1970s, the subject of HRM suffered from neglect at some U.S. colleges and universi­ties. Since then, however, equal employment opportunity, international HRM, employee rights, concern for productivity, cost of employee benefits, and other current issues have rekindled interest in HRM courses and in HRM as a major field of study.
In the past, many HR professionals entered the field with degrees in liberal arts and sciences, having perhaps taken a few business courses as electives. How­ever, as certification requirements and other factors became essential for profes­sional status, a bachelor's degree and even a master’s degree in business have become more important.
In addition to business courses, students planning careers in HRM should take courses in such areas as personnel and organizational psychology, industrial sociology, economics, industrial engineering, and electronic data processing. A knowledge of computer operations is essential for processing and reporting personnel data to gauge the performance of HR programs.

 

Programs for Managing Human Resources

An HR program constitutes the overall plan for managing people and for guiding managers and supervisors in decisions relating to their subordinates. It estab­lishes the objectives, policies, procedures, and budget pertaining to the HR func­tions to be performed.
Although HR managers are responsible for coordinating and enforcing policies relating to HR functions, responsibility for performing these functions rests with all managers and supervisors within an organization.

 

Objectives

HR objectives are determined by the organization's objectives as a whole. More and more, HR objectives are reflecting the increased social responsibilities of firms, which include not only traditional responsibilities to customers, employees, and shareholders but also responsibilities to the community and to the total soci­ety.

HR objectives
goals to be achieved in
the area of HRM

 

Policies

 

Closely related to HR objectives are HR policies that serve to guide the actions required to achieve these objectives. Policies provide the means for carrying out the management processes and as such are an aid to decision making. Like objectives, they may be idealis­tic or realistic, general or specific, flexible or inflex­ible, qualitative or quantitative, broad or narrow in scope. However, while objectives determine what is to be done, policies explain how it is to be done.

HR policies
guides to actions required to
achieve the HR objectives

Need for Policies

Carefully developed policies are vital to HRM because employees are sensitive to any differences, no matter how slight, in the treatment they may receive com­pared with others. The quickest way to impair em­ployee efficiency and morale is for a manager to show favoritism in decisions such as those relating to vaca­tions, schedules, raises and promotions, overtime, and disciplinary action.
Decisions can be made more rapidly and more consistently if policies relating to these and other subjects have been formulated and communicated throughout the organization.

Formulation of Policies

 

The formulation of HR policies for approval by top management should be a co­operative endeavor among managers, supervisors, and members of the HR staff. In some cases it may be important to have employees’ input.
Policy committees facilitate the pooling of experience and knowledge. Par­ticipation by operating managers is particularly important because they are often more familiar with the specific areas in which problems arise-and also because their cooperation is required for policy enforcement.
The manager and staff of the HR department have the responsibility for exercising leadership in formulating policies that are consistent with overall organizational objectives. They also must make certain that these policies are compatible with current economic conditions; collective bargaining trends; and laws and regula­tions at federal, state, and local levels.

Written Policy Statements

Organizations can make their HR policies more authoritative by putting them in writing. To strengthen their effectiveness, these statements, which may be com­piled into a policy manual, should include the reasons the policy is needed.
Writ­ten policy statements can serve as invaluable aids in orienting and training new personnel, administering disciplinary action, and resolving grievance issues with employees and their unions. When distributed to employees, these policy state­ments can provide answers to many questions that might otherwise have to be referred to supervisors.
HR policy statements and employee handbooks assume the force of a legal contract between employer and employee. Just as em­ployers refer to policy statements as a basis for their personnel actions, employees now cite organizational failure to adhere to established policies as a violation of their rights. This is not their intended use.
Many firms insert a disclaimer or waiver in employee manuals to the effect that the contents of the manual do not consti­tute a contract. The disclaimer should be prominently placed, not buried in a footnote. Wording the manual carefully (avoiding “always” and “never,” for ex­ample), using a conversational tone rather than legalistic jargon, and having an outside labor counsel check the manual can help in avoiding problems.

 

Procedures

HR procedures serve to implement policies by prescribing the chronological se­quence of steps to follow in carrying out the policies. Procedures relating to em­ployee selection, for example, might provide that individuals first be required to complete an application form, followed by an interview with an HR office repre­sentative.

HR procedures
prescribed sequence of steps
to be followed in carrying
out HR policies

Grievances, promotions, transfers, and wage adjustments likewise must be administered according to established procedure in order to avoid problems resulting from oversights. For example, as a step in the disciplinary procedure, the failure to give an employee written warning of a violation might prevent the organization from discharging the employee for a second violation.
HR procedures, like HR policies, must be treated as means to an end, not as ends in themselves. When organizations become bureaucratic, complaints may be raised about excessive red tape, inflexibility, and impersonality in making HR decisions. Unfortunately, when procedures be­come too detailed or numerous, they can impair rather than further the interests of the organization and its employees. To avoid this hazard, procedures must be reviewed periodically and modified to meet changing conditions.

Human Resources Information Systems

Effective HRM requires an HR information system (HRIS) to provide current and accurate data for purposes of control and decision making. The system is composed of procedures, equipment, information, methods to compile and evaluate information, the people who use the information, and information management.

HR information system (HRIS)
network of procedures, equipment,
information, and personnel to provide data
for purposes of control and
decision making

Computers are not only used for storage and retrieval of information but for broader applications. These applications include production of basic reports, HR calculations, long-range forecasting and strategic planning, career and pro­motion planning, and evaluation of HR policies and practices.
A well-designed HRIS can serve as the main management tool in the align­ment of HR department goals with the goals of long-term strategic planning. As HR issues have been increasingly recognized as critical factors in strategic plan­ning decisions, the ability of the HRIS to quantify, analyze, and model change has enhanced the status of the HRIS in many organizations.
Global competition is putting increasing pressure on U.S. managers to make better and faster deci­sions. HR information technology can improve HRM and contribute to the competitive advantage.
In addition to the major uses of computer technology, with a PC, the HR professional can take advantage of a variety of information services. An on-line service designed especially for HR departments is the Human Resource Informa­tion Network, a subsidiary of BNA. It provides up-to-the-minute information in several categories, including news, research, software, and services, covering all disciplines of HRM. SHRM has an on-line database that per­mits users to quickly search more than 24,000 citations of books and articles.
In developing an effective HRIS, an organization must address privacy is­sues in advance. A data-privacy policy can make the HRIS a positive factor in employee relations rather than a mistrusted disseminator of sensitive personnel information.

 

The Budget

 

Statements relating to objectives, policies, and procedures or to a program as a whole can be meaningful only if they are supported financially through the bud­get. An HR budget is both a financial plan and a control for the expenditure of funds necessary to support the HR program. As such, it is one of the best indica­tors of management's real attitude toward the program.

HR budget

financial plan and a control for the
expenditure of funds necessary to
support the HR program

While a firm’s se­lection policy may be to hire only fully qualified applicants to fill vacancies, its ability to observe this policy will depend on whether it budgets enough money to screen applicants carefully. Securing adequate funds for the HR budget further requires the HR staff to be able to convince top management that the HR pro­gram is cost-effective and is producing results.

 

Evaluating the Human Resources Program

Just as financial audits are conducted, audits or evaluations of the HRM program should be conducted periodically to assure that its objectives are being accom­plished. Audits typically involve analyzing data relative to the program, includ­ing employee turnover, grievances, absences, accidents, and similar indicators. Special attention is usually given to assessing compliance with laws and regula­tions governing various specific areas such as equal employment opportunity and safety and health. A comprehensive audit should en­compass all aspects of the HR function. This audit should be performed by both the HR department and the operating and line managers.

The Human Resources Department

 

The HR manager is assuming a greater role in top-­management planning and decision making. This trend reflects a growing awareness of the contributions that HRM can make to the success of the firm. Although managerial personnel at all levels are engaged in HRM activities, the top manager of the HR department has the primary responsibility for developing a program that wilt help the organization to meet its HRM objectives.

 

Responsibilities of the Human Resources Manager

Government legislation and court decisions have had a major influence on HR policies and practices. More recently, concern for pro­ductivity improvement, employee desires for balancing family and job demands, and desire of workers for more equitable treatment have added to the responsibili­ties of the HR manager. These influences have thus required HR managers not only to be more knowledgeable about many issues but also to be more versatile in handling several activities.
The major activities for which an HR manager is typically responsible are as follows:

• Policy initiation and formulation. The HR manager generally proposes and drafts new policies or policy revisions to cover recurring problems or prevent anticipated problems. Ordinarily, these are proposed to the senior executives of the organization, who actually issue the policy.
• Advice. The HR manager generally counsels and advises line managers. The HR staff is expected to be fully familiar with HR policy, labor agreements, past practices, and the needs and welfare of both the organization and the employees in order to develop sound solutions to problems.
• Service. The HR manager generally engages in activities such as recruiting, selection, testing, planning of training programs, and hearing employee concerns and complaints.
• Control. The HR manager generally monitors performance of line departments and other staff departments to ensure conformity with established HR policy, procedures, and practice.

 

The HR manager’s authority in carrying out these activities is restricted to staff authority (policy initiation and formulation and advice giving) and func­tional authority (service and control). Within the scope of functional authority, the HR manager generally has the right and is expected to issue policies and pro­cedures for HR functions--i.e., selection, training, performance evaluation, and so on--throughout an organization. The only line authority the HR manager has is over subordinates in his or her department.

 

In-House Consultants

  A major contribution that the HR department staff can make to the organiza­tion is to serve as in-house consultants to the managers and supervisors of other departments. Alerting top management to contemporary issues and changes within society that affect the organization is also an important responsibility. Closely related is the responsibility of monitoring new developments taking place in the HR field and, when feasible, getting top management to adopt them.
Any consultation provided by the HR staff must be based on managerial and technical expertise. Furthermore, the staff should be concerned with the operating goals of the managers and supervisors who are their consulting clients and should help them to make sound decisions. These managers and supervisors must be convinced that the HR staff is there to assist them in increasing their productivity rather than to impose obstacles to their goals. This requires not only the ability to consider problems from the viewpoint of the line managers and supervisors, but also skill in communicating with the managers and supervi­sors.

 

Outside Consultants and Outsourcing

HR managers often go outside the organization for professional assistance from qualified consultants. These consultants are hired to solve a variety of HR prob­lems. In the past most consulting firms specialized in one or two areas of exper­tise, though many have now broadened their backgrounds in order to meet the expanding needs of their clients more effectively.
The areas for which consul­tants are used most frequently are pension plans, executive recruitment, health and welfare plans, psychological assessment, wage and salary administration, job evaluation, and executive compensation.
When using the services of a consul­tant, it is important to select an experienced, reputable individual, to educate him or her about the corporate environment, and to have a clear and mutual un­derstanding of what the consultant is to do.
In recent years, outsourcing (the practice of contracting with outside firms to handle some HR functions previously performed in-house) has become a trend at companies of all sizes.

Outsourcing
practice of contracting with outside
vendors to handle specified
HR functions

Unlike one-time vendor contracts, outsourcing contracts require months of study and negotiation to make certain that all the major and minor issues have been carefully examined and resolved. When outsourcing is used, the vendors are actually integrated into the firm.

 

Department Organization

In a small firm the HR department may consist only of a manager and a few as­sistants. In a larger firm many additional staff members may be required. Increased size eventually leads to the establishment of departmental units. The most common departments are:

HR Planning Job Requirements Recruitment Selection

Affirmative Action Training Career Development Performance Appraisal

Compensation Benefits Safety and Health Labor Relations

 

 

HRM in the Future

During the 1990s HRM has been in the throes of a radical transformation. The HR function is being transformed into a significant management function. Where HR departments fail to recognize their responsibilities to become vital members of the management team, line managers are reaching out to take con­trol and ownership of the various HR functions. Although line managers need an understanding of HRM, the technical aspects should be delegated to professional HR staffs.
Looking ahead, both line and HR executives agree that a proactive and strategically oriented HR function will be critical. There is a need for dramatic changes from centralized and functionally organized HR units to more flexible and decentralized units. This will necessitate more supervisory involvement in HR activities.
There will likely be is a new role model for the HR department and its function. The future will support the concept of shared responsibilities between line managers and HR managers. The single greatest attribute of the HR staff will be the ability to educate and influence line managers on HR issues.
In 1989, a study prepared for the Society for Human Resource Management was conducted to determine what pressures organizations face today, what they must do to remain competitive, what the role of HR is in providing a competitive advantage, and how this role is changing. A leading question in the survey was “What distinguishes superior HR performance from average performance?” The study found a clear link between an organization’s level of success and the effectiveness of its HR leadership.
During the course of the study more than twenty CEOs and more than fifty practitioners participated in determining the role they expect HR to play in meeting competitive and organizational challenges. This information was used to create the Senior-Level HR Competency Model shown below.
The purpose of this model is to define and describe the competencies required of superior HR leaders from the perspective of both CEOs and HR practitioners. Study the individual competencies within each of the five clusters: goal and action management, functional and organizational leadership, influence management, business knowledge, and HR technical proficiency.
While the HR competency model was prepared as guidance for HR leaders and those who aspire to such positions, the knowledge and skills within the individual clusters can be used as a guide by anyone who wishes to succeed in a work organization or as an entrepreneur.

 

COMPETENCY CLUSTERS AND INDIVIDUAL COMPETENCIES

SUMMARY

HRM represents a new concept of and approach to performing personnel func­tions. It still requires the performance of those personnel functions that have evolved over the years in response to emerging needs. However, instead of treat­ing these functions as separate and distinct, HRM considers them interrelated parts of a management system that must be integrated closely with strategic or­ganizational planning.
HR managers are becoming more involved in the decision making of top management in a wide variety of issues and problems. Knowledge of HRM is important for individuals who will occupy manage­rial and supervisory roles, since they will also perform HR functions.
The present status of HRM was achieved only after years of evolutionary development. During the nineteenth century the factory system enabled prod­ucts to be manufactured more cheaply than before. The concentration of workers in factories in turn focused public attention on the need for better working con­ditions and greater consideration for employee health and safety.
During this period an objective and systematic approach to improving worker efficiency known as scientific management emerged. By the early 1900s some of the knowledge and research from the field of psychology was beginning to be applied to the management of personnel.
Since the late 192Os severa1 forces have contributed significantly to the HRM movement. The Hawthorne studies were influential in humanizing the workplace, and the human relations movement focused attention on individual differences and informal groups. As the human relations movement evolved, it became broader in scope and included the various behavioral sciences, fo­cusing on the achievement of organizational objectives. During this period po­litical pressures gave rise to government legislation affecting HRM around the world. Now there is increasing specialization of HR functions and an emphasis on strategic management.
HRM may be referred to as a profession because it has the following charac­teristics: (1) It is based upon an organized body of knowledge developed through research and experimentation, (2) the knowledge is disseminated through pub­lications and professional meetings, (3) professional associations promote the professional growth of their members, (4) various types of certification allow practitioners to increase their competency, and (5) the various HRM professional associations have developed codes of ethics that their members are expected to observe.
A code of ethics focuses attention on ethical values and provides a basis for HR professionals to evaluate their plans and their actions. HR departments have been given a greater role in communicating the organization's values and stan­dards and in monitoring compliance with its code of ethics.
The principal elements of an HR program are objectives, policies, and pro­cedures. HR objectives are determined by the organization’s objectives as a whole. Policies serve to guide the actions required to achieve these objectives. HR poli­cies must be compatible with current economic conditions, collective bargaining trends, and laws and regulations at all levels. HR procedures implement policies by prescribing the steps to follow in carrying out the policies.
Statements relating to objectives, policies, and procedures can be meaningful only if they are sup­ported financially by the budget. It is important that the HRM program be au­dited periodically to assure that its objectives are being accomplished.
The HR department is responsible for initiating and formulating policy; counseling and advising line managers; providing services such as recruiting, se­lection, and planning of training programs; and monitoring the performance of line and staff departments to ensure conformity with established HR policy and procedures. The HR manager’s authority in carrying out these activities is re­stricted to staff authority and functional authority.
HR managers often use the services of outside consultants, and more recently, they have outsourced some of the HR functions to vendors on a long-term basis.
HRM is in the midst of a radical transformation. Line managers are reaching out to take control over the HR functions where HR departments fail to recognize their responsibilities. Comprehensive research studies have shown that a proactive, strategically oriented perspective is critical. Both line and HR execu­tives support the concept of shared responsibility between line and HR man­agers. An HR competency model emphasizes goal and action management, functional and organizational leadership, influence management, business knowledge, and HR technical proficiency.

 

KEY TERMS
Behavioral sciences Certification Hawthorne studies HR budget HR information system (HRIS) HR objectives	HR policies HR procedures Human relations movement Human resources management Outsourcing Scientific management