Human resource management
(HRM)
HRM is...
The management of people (or human resources) to help achieve an organization’s objectives, particularly
customer satisfaction and innovation.
The name HRM is sometimes criticized, because people are not a resource but human beings with feelings.
So perhaps people management is a more accurate term, but HRM is most commonly used.
HRM is all about...
1. Corporate strategy
Employees play a vital part in making a strategy successful. They satisfy customers by being creative, improving
product quality and making change work.
This is the concern of strategic HRM and is the most important job for an organization’s
Human Resource (HR) department – why?
a) every manager is an HR manager
Any manager has to get the best results from people and shouldn’t have to rely on the HR department to do
this.
But managers can still benefit from HR’s advice on vital issues like motivation and empowerment (see point 2).
b) outsourcing
Administrative HR activities like pay and recruitment can be carried out by outside companies.
2. Motivation and empowerment
HRM must ensure that people are motivated (working hard and effectively) and empowered (taking responsibility
for results).
The 4 I’s show how it can do this:
Ideology
(shared values or corporate culture)
The organization must value people and treat them well (not just say it will with clichés like ‘people are our
most asset’).
Identification
People must be proud to work for the organization because they:
- believe in what the organization's doing.
Involvement (and communication)
HRM must allow people to participate in the decisions affecting their work.
Open plan offices help communication but reduce concentration.
Information (and learning)
HRM must make sure that employees have the right information to do their jobs well.
So it must maximize their learning, training and education.
People must learn to use their time as effectively as possible (see time
management).
3. Recruiting, interviewing and selecting the right
people
People must be chosen who are:
- clever (with potential for leadership).
4. Pay administration
- negotiating pay increases with employees representatives like trade
unions.
- dealing with other pay related activities like wage payment and job
evaluation (grading different types of work).
5. You're fired!
FIRED is an acronym for HRM’s key activities:
Fun– creating work that is interesting and varied.
Inducement– giving people fair rewards.
Recruitment – getting the best
people.
Empowerment – encouraging people
to take responsibility for results.
Dignity – valuing people as human beings and a vital part of the
organization’s strategy.
Key quotes explained
“Both the man and dollar but in case of conflict the man before the
dollar”
Abraham
Lincoln (American president, pictured right)
In the last resort people’s needs must come first.
Many organizations preach this philosophy but don’t practise it.
“What employees hear is that they’re the firm’s most valuable asset, what they know is they’re the most
expendable assets”, Gary Hamel and C.K.
Prahalad said in their book, Competing for the Future.
“We build too many walls and not enough bridges”
Isaac
Newton (English scientist, pictured right)
Getting the best from people requires co-operation between them.
So organizations, says Sony’s co-founder, Akio Morita,
must create a “family-like feeling” with a “feeling that employees and managers share
the same fate”.
People must talk and listen to each other with empathy and understanding.
“To jaw-jaw is always better than to
war-war”, Winston Churchill said.
“Treat people as adults. Treat them as partners; treat them with dignity;
treat them with respect”
Tom Peters (pictured right) and Robert
Waterman (pictured right below) from their
book, In Search of
Excellence.
The best organizations satisfy the human needs of their employees, so they have pride in what they do and
perform brilliantly.
Key books
David
Packard (pictured right) , The HP Way
(1995)
The co-founder of the American computer and electronics company, Hewlett-Packard (HP), describes how its success
was based on
- respect for employees and trust.
- open two-way communication and consensus (not confrontation).
- visible and participative management (“management by wandering about”).
Lynda
Gratton (pictured right), Living Strategy (2000)
A living strategy is putting employees at the heart of an organization's purpose.
This maximizes employees’ commitment and creativity.
(For more detail see Living Strategy in the Business Books
section).
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