HRM function from several perspectives, and have already looked in some detail at the historical perspective, on the evolution of the HRM function(evolution, importance and scope of HRM). An environmental perspective tracks the external forces that continuously come to bear on HR. A strategic perspective clarifies the role of the HRM function in the strategy of the organisation. A political perspective shows to what extent and maximise their self interest, which may not reflect the interests of the organisation. An international perspective highlights the problems and opportunities that the HRM function has to face in what is fast becoming a global marketplace. Finally, an evaluation perspective shows the ways in which human resources activities can be evaluated as to their usefulness in attaining organisational goals.
A) HISTORICAL PERSPECTIVE ON HRM
Apart from historical antecedents of HRM, what is important is to discuss the recent trends .
The HRM function started getting attention and focus as research began to question the notion that job satisfaction and productivity are strongly related. In the US, the civil rights movement of the 1960s produced a good deal of legislation bearing on employment relationships. Further, the increase in discrimination-based litigation during the 1970s boosted the legitimacy of the HRM function in organisations.
Quite apart from various US-based interventions, it is the rise of international competition in a global market that may finally liberate human resources management from second-class status. In view of increasingly and fiercely competitive global markets, the critical need for using employees as a competititve resource has become increasingly evident. This international competition has led to four conceptual trends in the HRM function:
- The need to link human resources to the strategic management process.
- The need to select, train, and compensate individuals to function in an international marketplace.
- The need to understand the political dynamics that undermine rational HRM decision-making processes.
- The need to provide quantitative estimates of the money value contributions made by the human resources department.
B) ENVIRONMENTAL PERSPECTIVE ON HRM
The legal environment serves as the filter and as the ultimate mechanism for merging fact and value in society. When you examine legislation enacted during the human relations movement, you will note that it dealt extensively with wages and work hours. It also dealt with union-management relations within the organisation. It provided for supervising those relations, i.e., the rights of employees to organise and bargain collectively vis-a-vis the rights of the employer and the union. In the US, these laws are still in force, but the federal laws enacted during the 1960s and 70s dealt more directly with the rights of the individual (or of classes of individuals, such as minorities and women) in a wide range of issues concerning employer rights.
Organisations as Open Systems
Katz and Kahn (1978) proposed that organisations be viewed as open systems. ‘Open’ means that organisations are responsive to external pressures and ‘systems’ means that a response by one element in the organisation/environment relationship usually leads to a variety of other responses by the same element or other elements in that relationship. Another premise is that, because of a flood of late 20th century laws regulating many broad organisation-to-society matters, most organisations are more permeable to external pressures than even before. In addition, the environment itself also continues to change at a rapid pace.
Buffering Strategies as an Organisational Response
As the environment creates uncertainly, how can managers adequately plan, organise and control to deal with uncertainty? Organisations should develop a number of strategies, including forecasting and buffering. Forecasting attempts to anticipate change before it occurs. Buffering is concrete: designing structural devices (such as larger or more specialised organistional units) and technological work-flow devices (such as new or more complex procedures). These buffering devices assist the organisation to be both proactive and reactive and to shield itself from the pressures of the environment. They both ease schedules and help managers to figure out the nature of the environmental pressures so that they can try to make sense of them. As a manager, you often need more time and information to deal with emerging events. Once you reasonably assess the strength or potential impact of these pressures and resources for coping with them, you are in a sound position to safeguard the organisation. The notion of buffering seems to have been taken up by many organisations in response to actual or potential pressures of the legal environment. As a result, larger, more specialised human resources departments handle legal requirements concerning the rights of employees.
The HRM function (or any other function), in designing buffering devices, draws on the resources of the organisation and places greater responsibility on that function to meet its organisational obligations. Therefore, HRM has to protect or shield the organisation from errors of commission or omission in the management of its human resources. As this obligation carries with it increased visibility and risk for their function, human resources professionals have been seen at times as heroes and at other times as traitors. Their reaction to this impact demonstrates the ‘open system’ theory of Katz and Kuehn: they have designed a few internal buffering devices of their own. One way to reduce the risk of errors is to centralise human resources policymaking and planning activities at the corporate level while continuing to support decentralised decision-making at the unit level. It is at the unit level where you will see more sensitivity to information regarding critical interpersonal and intergroup relationships.
C) STRATEGIC PERSPECTIVE ON HRM
As you know about various pressures the environment can exert upon the organisation. These have required the organisation to link HR activities to the organisation’s overall strategy. For example, US firms, in the early 1980s, had to face stiff competition from foreign companies beginning to export their products to the United States at lower prices than US companies could offer. The cost advantage stemmed from lower labour costs and made it nearly impossible for American companies to survive. They had to look for more efficient and effective ways to use the resources available to them and stay afloat. The ensuing effort gave rise to the concept of Strategic Human Resources Management (SHRM), defined as ‘the pattern of planned human resource deployments and activities intended to enable an organisation to achieve its objectives.’ The first among organisation theories to explicitly discuss the concept of human resources strategies in the context of strategic management were Galbraith and Nathanson. They recognised the need to fit human resources into the strategy implementation process. As they presented the role of human resources in the implementation of organisational strategy, they identified four basic HRM sub-functions or strategies: Selection, Appraisal, Rewards, And Development.
Figure-1 : A Model of the Human Resources Management Function.
The figure above shows the interdependencies of the major HRM sub-functions.
D) POLITICAL PERSPECTIVE ON HRM
You will, by now, have a clear understanding of the strategic perspective on HRM, the objective of which is rational decision-making that aligns HRM practices with the organisation’s strategic goals. However, as you have probably experienced, in organisations not all decisions are rational, and many have very little to do with achieving organisational goals. Recent writers in HRM propose that influence and politics are a significant part of the HRM function, or at least that they strongly affect that function.
What is meant by politics in HRM is that individuals or groups attempt to exert influence over others for purposes and in ways that are not approved or sanctioned by the organisation. Influence often consists of seeking to manage how others interpret events and symbolic actions. Politics is defined as ‘the management of shared meaning by individuals, groups, or organisation.’ This view of politics allows you to better understand the role of influence in HRM, particularly with regard to personnel selection, performance appraisal, and promotion/reward systems.
In the real world of HRM, it is not easy to identify perfectly the skill requirements of a particular job or to assess perfectly an applicant’s level of each of the various skills, as perceived in strategic HRM. There is neither a perfect fit nor a rational decision making process. It is the inability to assess fit perfectly in an objective manner that lets politics enter the decision-making process.
You would have experienced in your work life that there is no objective standard for assessing fit. Selection decisions therefore often revolve around the perceived similarity of an applicant’s skills with the standard. Thus, managing the perceptions of the decision maker can allow the applicant an opportunity to influence the decision making process in a political manner. More specifically, the process of ‘impression management’ in the employment interview is an example of politics in HRM. Applicants usually search company information to assess the ‘type of employee’ that the organisation seeks. An applicant wishing to join an organisation that publicises its aggressive, market-oriented strategy will attempt to come across as quite aggressive in the interview. The same applicant wishing to join a firm that promotes its team atmospheres and group cohesiveness is likely to act significantly less aggressively in an effort to appear to fit that organisation.
Recent research has demonstrated that attempts to bring influence to bear on the employment interview do, in fact, affect decision outcomes. For example, it appears that interviewees who exhibit controlling tactics such as self-promotion and efforts to dominate the interview prove more successful than those who act passive or submissive.
Performance evaluation, too, seems to be an area of HRM that is influenced by politics. A sacred principle of performance evaluation is to evaluate performance itself rather than the person in the abstract. As, in most jobs, it is difficult to define the measure all relevant aspects, the performance evaluation process can appear to be mostly subjective. Evaluators do acquire generalised impressions regarding employees’ contributions to their organisation. Employees’ behaviours, as well as beliefs, values and level of effort, all of which can be manipulated, can easily influence the impressions of evaluators. Often a discrepancy exists between an individual’s performance and the evaluation result, and this difference stems out of political influence.
Promotion/succession systems are also subject to dynamics or political influence. Firms may prefer to fill managerial positions within the ranks to provide motivation. To assess the fit between the job vacancy and the person being promoted, the firm must partly rely on past performance evaluations as well as information found through interviews and other means. You have already seen how these processes are affected by political influence. Although many may not want to acknowledge the existence of political influence in organisations, anecdotal and empirical data show very convincingly that these processes are part and parcel of organisations. However, to ignore their existence is short-sighted.
E) INTERPERSONAL PERSPECTIVE ON HRM
For many years there has been increasing international competition, and today most large corporations in the US, Europe and Japan function in a global economy. A revolution in management practices, and increased emphasis on Quality of Work Life (QWL), has occurred over the same years. In order to compete internationally, many overseas facilities must be established, with the effect that two general concerns are being addressed by many American and European companies. Firstly, how does one manage a company’s citizens working overseas? Secondly, how do organisational management policies and practices in other cultures differ from those in the respective home countries?
Expansion of production facilities outside US borders, for instance, provides HRM concerns for the American companies. As a means of keeping production costs down for the automotive industry, Lee Iacocca turned more and more to setting up plants outside America. In 1993, he headed the fight to set up the North American Free Trade Agreement (NAFTA) which created the world’s largest free trade zone by virtually eliminating trade barriers among Canada, Mexico, and the US. In effect what happened was that US firms capitalised on Mexico’s lower labour costs by building production facilities there.
The foremost challenge for firms going overseas is the need to select and train individuals who are able to work in a foreign culture. Therefore programmes featuring international management and cross-cultural training have increased in value.
Also related to the issue of managing one’s citizens in a foreign setting is the problem of adequate compensation for them. This arises out of the volatility of major foreign currencies, particularly the US dollar. Corporations are meeting this challenge, therefore, by paying allowances for housing, payment of tax if required, education of the manager’s children, cost of living adjustments etc.
The other concern – the influence of culture on HR practices – has created more awareness among academics and HR practitioners. When there are joint ventures in foreign countries, US firms, for instance, need to have a good understanding of the foreign culture concerned. The 1987 conference on international personnel and human resources management held at the National University of Singapore was showcase for the work of academic researchers who had applied a number of methods in various Pacific Rim countries (Japan, China, Taiwan, etc.) to learn the human resources compared with US practices. You would be interested to know that in spite of these efforts to gain an understanding of human resources practices in Pacific Rim countries, evaluations have revealed that practice tends to be primarily guided by an ethnocentric view of the world. For a firm to be competitive these days, its HRM function must be characterised by:
- Transnational Scope: going beyond a simple national or regional perspective and making human resources decisions with a global perspective.
- Transnational Representation: globally competitive organisations must have multinational representation among their managerial employees.
- Transnational Process: a decision making process that involves representatives and ideas from variety of cultures.
F) EVALUATION PERSPECTIVE ON HRM
Two criteria are usually used to assess the quality of an enterprise’s HRM function efficiency and effectiveness. In judging effectiveness we ask, ‘Is HRM doing the right things?’ whereas efficiency ‘doing things right’ in the sense of maximising outputs relative to inputs. Effectiveness may involve biases of people because people decide what the right things are. Efficiency, by contrast, is associated with an internal value free assessment of the function. The HRM function can be judged efficient but ineffective, effective but inefficient, ineffective and inefficient, or effective and efficient: the desired status.
Efficiency may be determined from short-term activities such as personnel functions. For instance, how fast were personnel requisitions filled? However, activities like preparing job descriptions and providing career counselling are long-term activities critical to the effectiveness of the organisation. In the short run, they may seem to resist efforts at efficiency improvement. The ideal is to strike an optimal mix.
Personnel Audits and Utility Analysis
One popular approach to assessing HRM function is called the personnel audit, which has two components: a procedural audit and a functional audit. The former focuses on the activities performed by members of the HR department and the amount of time spent on each. It is internal to the HR department and represents a measure of the function’s efficiency. The latter, the functional audit, seeks to measure the function’s effectiveness. In other words, it attempts to assess how well the function is serving the organisation in helping achieve short- and long-term goals.
Some researchers have demonstrated how human resources can be subjected to ‘utility analysis’ that leads to determining the money value of HRM activities to the organisation.