1 Course: Bachelor of Business Studies (BBS) Module: HRM1707 Introduction to Human Resource Management Essay Title: The Origins of Human Resource Management and the Factors Shaping its Diffusion. Submitted by: Linda Dowling Student Number: 00-100-001 Lecturer: Dr. Majella Fahy Submission Date: 1st September 2005 Note: This is a standard cover page which should be used for all assignments. Sample of a Well Presented Essay 2 Introduction The essay will introduce the reader to the role that HRM has historically and currently plays within organisations. The essay is divided into three broad sections. Section 1 traces the origins of the Human Resource (HR) function, drawing upon the Storey (1992) typologies of the role that HR managers play within organisations. Section two examines the factors shaping the diffusion of HRM in Irish industry. The final section outlines the differences between what was traditionally referred to as Personnel Management and the more recently titled Human Resource Management. The Origins of Human Resource Management While much controversy surrounds the nature, content and form of HRM, there is broad agreement that its origins began in the development of Personnel Management. The historical evolution of HRM can be broadly traced through seven distinct phases of development. These include: (i) The birth of Personnel Management, (ii) The Welfare Phase, (iii) The Scientific Management School, (iv) The Emergence of the behavioural Sciences, (v) The Labour Relations Era, (vi) Post World War II, (vii) The 1980s –1990s. Each of the above phases will not be discussed individually. The Birth of Personnel Management A concern with the way in which people are managed can be traced back to the emergence of the Industrial Revolution in the 18th Century within Britain. The introduction of steam power signalled a shift from agriculture and craft work towards industrialisation. The Industrial Revolution was to have a profound effect on the management of labour. For the first time the location of large numbers of people into large physical structures signalled the birth of the ‘factory system’ and the emergence Note the clear headings and sub-headings and structure of the essay. Also, note the style of the introduction. This is the kind of introduction that is needed for all essays. Note that the text has been justified throughout the essay. This gives a ‘finished’ look. 3 of a body of ‘factory workers’. For the owners of capital, the challenge became one of planning, organising, directing and controlling the actions of this body of workers. The Welfare Phase By the late 1880s, a lack of economic and political power led to a deterioration of working conditions and a concern with the conditions within which people worked. A number of British social reformers such as Lord Shaftesbury and Robert Owen became particularly concerned with the exploitation of factory workers. This phase of development grew out of paternalism when a number of Quaker-owned companies, motivated by their religious beliefs, introduced a series of voluntary initiatives to improve the working conditions of their employees. The appointment of welfare officers in these companies were the forerunners to personnel officers. The entry of women in large numbers into the workplace during World War I fuelled concerns with Health and Safety issues. As a result emergency orders were introduced in Britain which provided basic safe working conditions for employees. The Scientific Management School With the end of First World War and the economic depression that followed organisations began to largely abandon their welfare role. An increase in organisational size, an increase in the complexity of work itself and a focus on poor industrial performance led management to examine new approaches that would result in higher productivity. A body of work, known as the FW Taylor’s Scientific Management School of thought, emerged in the US and had a profound effect on the direction of Personnel Management. Also referred to as Taylorism, this perspective advocated the standardisation of work systems, where individual jobs would be broken down into distinct tasks and assigned time allotments in order to improve efficiency levels. As a result of this Scientific approach, the focus of Personnel Management shifted towards issues of efficiency, profitability and the design of work systems. As personnel evolved into a management function, welfare officers were replaced by industrial officers. The Emergence of the Behavioural Sciences In response to the highly calculative approach adopted by the Scientific School, a human relations school of thought emerged in the 1940s which challenged Note that a space has been inserted between each paragraph. 4 Taylorism’s belief in formal work structures and the over simplification of motivation. In contrast, the Human relations Era focused on the behaviour of people at work and argued that informal work groups and the management style of line management influenced performance. As a result the personnel management function began to focus on matching the needs of employees with those of management, through the creation of informal structures and managerial styles. The Labour Relations Era Trade unions in Ireland, prior to the 1900s, were largely confined to the crafts. It was not until a number of Dublin-based employers attempted to break the hold of the trade unions during the 1913 lockout that management and labour began to formally organise themselves in large numbers. Despite the surge in union membership, the management of labour relations remained largely ad hoc until the 1950s.. The introduction of national wage rounds galvanised the central role that pay bargaining held at that time. The overall effect of these developments was to force personnel managers to specialise in the area of industrial and labour relations. Post World War II Following the Second World War, the role occupied by Personnel Management developed and expanded as negotiations became more sophisticated and extended beyond issues of pay to the terms and conditions of employment. As new employment legislation was introduced, the personnel function assumed an advisory role on issues pertaining to employment law. The 1980s –1990s By the 1980s, as the Irish economy began to enter an economic recession, employment retrenchment came to the fore of management agendas. From an organisational perspective, the central focus of management became the shedding of peripheral businesses, as organisations sought to return to their core businesses. For the personnel function, the focus shifted towards issues of redundancy. Moreover, during this period, the losses in trade union membership, which were associated with the rise in unemployment, facilitated the introduction of more individualistic objectives, many of which were associated with the introduction of HRM. Note that the essay is typed using the standard font style, Times New Roman, the standard font size of 12 and 1.5 line spacing. 5 What this historical development highlights, and which Stredwick (2000) proposes, is that the role of the HR manager, and the HR function itself, has changed dramatically since the turn of the century. Drawing on the work of Tyson and Fell (1986) and Storey (1992), Stredwick (2000) outlines the diversity of roles that HR managers can now occupy within organisations, depending on the degree of involvement they assume. Factors shaping the Diffusion of HRM By the 1990s, a new concern to develop proactive strategies that would link the management of employees to wider business concerns came to the fore. As Stredwick (2000) points out, a number of factors have emerged in the last fifteen years that challenged traditional approaches to managing employees and have led many organisations to reassess the way in which they manage their people. One of the major factors that have led employers to revise their traditional working practices is the growing intensity of competition. Recent reforms of the General Agreement on Tariffs and Trade (GATT) regime, the completion of the Single European Market (SEM) and the emergence of ‘tiger’ economies in the Pacific Rim have intensified competition across a range of products and service markets. As Stredwick (2000) has pointed out, this is not a process that is solely confined to the private sector. The creation of the SEM in particular has led to the deregulation of public utilities, particularly within the airline, telecommunications and transport industries, and the opening up of the ‘public procurement’ market to international competition. Moreover, economic and monetary union has led to a tightening up of controls over public spending and fiscal policy. In short, the growing intensity of competition and the imperative of imposing tighter controls on public spending has led organisations to promote major revisions to their traditional approaches to managing their employees. Furthermore, the intensification of competition has led to the production of customised goods and services for niche markets in place of the ‘old competition’ which concerned itself with producing standardised goods and services for mass markets. Within the public sector, this growth in competition has resulted in the Note how abbreviations are presented. The full title is spelled out first and the abbreviation placed in brackets. The abbreviation can be used thereafter. 6 introduction of ‘consumerist principles’, which advocates a re-design of services to make them more user friendly and accessible. The effect of these trends on employees is that added priority is now given to such HRM-orientated objectives as flexibility, multi-skilling and adaptability to on-going change processes. The most significant trend to date is the substantial loss in membership that unions sustained in Europe during the 1980s. While the rate of decline has varied from country to country, the main trend was one of serious loss in density figures or at best membership stagnation. In contrast to the post world war II period when management tended to react to more assertive trade union pressure, declining trade union power in the 1980s facilitated the proactive introduction of major changes to work practices. Trade unions, in response to the setbacks of the 1980s, have since introduced a number of service innovations. Within Ireland during the mid 1990s trade unions began to develop a new understanding of their representative role. No longer seeking to oppose management through adversarialism the main representative body of the trade unions, the ICTU began to accept HRM principles in return for greater employment protection and greater recognition of their role. A growing literature has emerged which suggests that just as the composition of the workforce has changed, so too have the values of employees or the priorities that they now seek from employment. While employees expect progressive rises in their standards of living, they also seek challenge and involvement in their work environment and greater flexibility to accommodate their changing lifestyles. The significance of this for HRM is that employees have become more responsive and open to HRM objectives and less content with traditional approaches, which were viewed as rigid and hierarchical. Significant changes to the structures of organisations also occurred during the late 1980s, which were to radically alter traditional employment relationships. A growth in the size and the complexity of organisational structures led many organisations to adopt a divisionalised structure to their operations. This change to organisational structures saw the responsibility for operational and financial issues shift towards divisional levels, which introduced a degree of transparency to bottom-line Note the good use of paragraphs (not too long or not too short). 7 contributions. From a HR perspective, this wave of organisational restructuring led to the devolution of operational HR issues to local line management. Gunnigle and Flood (1990) point to the emergence of the ‘excellence’ literature in the US as a contributing factor in the diffusion of HRM. The excellence literature advocated the importance of human resources in achieving competitive advantage. Based on research within top US corporations, Peters and Waterman found that the management of human resources was key to securing greater competitiveness. The emergence of this literature, Gunnigle and Flood (1990) argue, led to a reassertion of the importance of human resources within organisations. By the late 1980s, many HRM commentators began to claim that Personnel Management as an approach to the management of employees has largely failed to achieve strategic importance within organisations. By pursuing an ad-hoc and reactionary role, Personnel Management was seen to have failed in its endeavour to secure a role in the strategic direction of organisations. Associated with this, there emerged within the US during the 1980s a number of new models of workplace management that advocated a more proactive and individualistic approach. As the following topic will highlight, the entry of these models, through the influx of MNCs into Ireland during the 1980s, was to challenge traditional approaches that characterised Irish-based organisations. The Difference between Personnel Management and HRM Much of the discussion that dominated this subject area in the late 1980s centred on defining HRM and whether it constituted a new and distinctive approach to the management of people. Guest (1987) argues that definitions of HRM can be broadly classified, according to their ‘strength’, into four positions: The first position identified is that HRM is a simple ‘retitling’ of Personnel Management in an attempt to reassert a largely jaded image. The second is where HRM refers to the integration between HRM policy areas themselves in order to pursue a more integrated and proactive role. The third position is where it is 8 suggested that HRM involves the strategic integration of HRM policy areas and integration with the wider business strategy of the organisation. The final position suggested is where HRM represents a distinct approach to workforce management with an explicit underlying philosophy that advocates employee commitment rather than control. Commentators such as Guest (1989) and Storey (1992) examine this issue in greater detail and argue that Personnel Management differs from HRM along four lines of distinction. These include (i) the policy objectives of HRM, (ii) the HRM policies themselves, (iii) the cement which binds such an approach and (iv) the organisational outcomes that HRM seeks. As Guest (1989) argues, the concept of Human Resource Management describes a range of policy objectives that are designed to maximise organisational integration, employee commitment, flexibility and quality of work. These are in effect the ‘pillars’ upon which HRM rests. Storey (1992, 1995) builds on this framework and, using the results of research conducted in fifteen UK-based organisations, outlines the main areas where personnel management differs from HRM. These he defines to be (i) the beliefs and assumptions underlining each approach (ii) their strategic orientation, (iii) the role of line management and (iv) key levers upon which each approach focus. (For a more detailed examination of the key points of difference, students should refer to figure 1.3 in the textbook). In a similar vein to Guest, Storey suggests that HRM is different from Personnel Management in that its objectives are flexibility as opposed to a concern with the regulation of rules and systems. In contrast to personnel management, Storey (1995) identifies a key characteristic of HRM as the critical role of line management in implementing and managing workplace practices and policies. Proponents of HRM, like Storey, emphasise the integration and consistency of HR policies that support central organisational values and objectives. Finally, Storey (1995) regards HRM as adopting a unitarist rather than a pluralist approach to the management of employees. This unitarist stance, which is viewed as characteristic of HRM, assumes that all employees are focused on the achievement of a common organisational goal. In contrast, pluralism, regarded as characteristic of Personnel Management, recognises the diversity of interests that employees have and manages 9 them accordingly. The adoption of one or other of these philosophies is seen to distinguish Personnel Management from HRM. Legge (1995), in reviewing the literature that differentiates between HRM and Personnel Management, highlighted the problematic nature of such attempts. Similarly, Stredwick (2000) suggests that there are a number of contradictions inherent in the Storey and Guest models. Firstly, while teamworking is viewed as a core component of HRM, individual performance-related pay, another key characteristic of HRM, focuses on rewarding employees on an individual basis. Secondly, the role of the HR manager remains shrouded in ambiguity. The devolvment of operational HR responsibility has meant that HR functions are now faced with the challenge of ensuring their continued role within organisations. Lastly, while the unitarist stance of HRM, that advocates the individualisation of the employment relationship, is seen to be attractive to employees in times of organisational prosperity, Stredwick (2000) posits that in times of difficulties, such a stance is more difficult to maintain. Conclusions As this topic suggests, Human Resource Management presents important issues for the analysis and operation of employment relationships. What is striking about the HRM debate is that two opposing themes still persist: one that views HRM as a replacement of the older traditions of Personnel Management and Industrial Relations and another that regards HRM as representing a distinctive, proactive and integrated approach to the management of people. Whatever the perspective adopted, as Beardwell and Holden (2000: 28) suggest: Two important points cannot be overlooked: first, it has raised questions about the nature of employment relationship that has stimulated one of the most intense and active debates to have occurred in the subject over the past 40 years; and second, the management of employment relations and the question of employee commitment to the employment relationship remain at the heart of the debate. Note the correct referencing. The page number is only included when giving a direct quotation. Note that page numbers have been inserted. 10 Bibliography Armstrong, M. (1996): A Handbook of Personnel Management Practice, (5th ed.), London: Kogan Page Beardwell, I., and Holden, L. (2000): Human Resource Management: A Contemporary Perspective, (3rd ed.), London: Pitman Fombrun, C., Tichy, N., and Devanna, M. (1984): Strategic Human Resource Management, New York: Wiley Guest, D. (1987): ‘Human Resource Management and Industrial Relations’, Journal of Management Studies 24(5): 503-21. Guest, D. (1989): ‘Human resource management: its implications for industrial relations and trade unions’, in J. Storey (ed.), New Perspectives in Human Resource Management, London: Routledge. Gunnigle, P, Morley, M., Clifford, N., Turner, T. (1997): Human Resource Management in Irish Organisations: Practice in Perspective, Oak Tree Press: Dublin Gunnigle, P., and Flood, P. (1990): Personnel Management in Ireland: Practices, Trends and Developments, Dublin: Gill & Macmillan Gunnigle, P., Heraty, N. and Morley, M. (2002): Human Resource Management in Ireland, Dublin: Gill and Macmillan Legge, K. (1995): Human Resource Management: Rhetorics and Realities, Hampshire: Macmillan Redman, T. and Wilkinson, A. (2001): Contemporary Human Resource Management: Text and Cases, Harlow: Pearson Education Roche, W.K., Monks, K. and Walsh, J. (1998): Human Resource Strategies: Policy andPractice in Ireland, Dublin: Oak Tree Press 11 Sisson, K., and Storey, J. (2000): The Realities of Human Resource Management: Managing the Employment Relationship, Buckingham: Open University Press Storey, J. (ed.) (1995): Human Resource Management: A Critical Text, London: Routledge Storey, J. (1992): Developments in the Management of Human Resources, Oxford: Blackwell. Stredwick, J. (2000): An Introduction to Human Resource Management, Oxford: Butterworth-Heinemann. Tyson, S. and Fell, A. (1986): Evaluating the Personnel Function, London: Hutchinson. Note that the references above are in alphabetical order. Each reference included in the main body of the essay is included in the bibliography. A number of additional references are also included in the bibliography as these were used as general reading material and to develop the author’s knowledge of the subject area.
