1.Background of Human Resource Management
Employment Relationship
The employment relationship is a fundamental feature in the nature of managing employment.
It defines the indispensable link that exists between an organization and its employees. It is important to note that the organization and the employees come in together to form the employment relationship solely because no party between the two can exist exclusively of each other.
Basically the Organization is driven by lure of profit of which it cannot be able to achieve any profit without people to turn other resources (factors of production) into finished products and services. The employees on the other side depend on the organization for livelihood i.e. they make a living out of the organization. This kind of a scenario sets the stage for the birth of the employment relationship once the organization decides to engage employees and when the employees accede to the offer given by the organization.
Thus in an ideal situation the employment relationship is a mutual relationship between the organization and its employees. Ian Beardwell and Len Holden (2001) assert that, the “employment relationship brings together the sources of powers and legitimacy rights and obligations between an organization and its employees”. What must be noted is that the employment relationship is a socio-economic exchange process.
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The sociological factor is centered mainly on issues to do with power and authority as essential components of the interaction that goes on between the parties to the employment relationship. The sociological factor is thus rooted in the contestations that arise from the employment relationship as a result of the perceived imbalances in terms of the power and authority wielded by the two parties to the employment relationship.
On the other side the employment relationship contains an economic component, which is the exchange of work for payment.
In the economic component employees contribute tangibly i.e. through measurable work effort for example number of items produced or an tangible service given by the employees to the organization’s customers. Employees also contribute intangibly to the organization through their loyal conduct and commitment to the organization’s goals and objectives.
The Organization on the other side is obliged to reciprocate to the effort of the employees through rewarding for the work done. The organization also does this in two ways as well, that is tangibly through salaries company car, company house, non-contributory medical aid etc
-Rewards given by the organization can also be intangible for example job satisfaction, motivation, job security, recognition etc
Managing the Employment Relationship
NB The overall role of HRM in the employment relationship is to maintain a balance between the contributions of the employees and the rewards that the organizations give.
However, striking a balance between the expectations of the organization and those of the employees is a very difficult thing to do.
Naturally this is because the organization will always strive to maximize or increase its profits at a minimum labour cost.
On the other hand, labour (employees) seek to maximize or increase its gains but at a minimal amount of effort. Secondly issues of managerial control also pose serious problems in the employment relationship.
The point here is that control needs neither not be too high nor too low but must be optimal to unleash the potential capabilities of employees as well as sustaining the employment relationship.
The employees on the other hand expect a considerable degree of care from the organization. Again this must not be excised obsessively or trivialized or marginalized as this has a lasting impact on employee commitment and loyalty.
The dynamic nature of the employment relationship increases also the difficult of managing it. Basically the problem emanates from the fact that the employment relationship is greatly influenced by many other influences like management style, values of top management, non existence of a climate of trust, interpersonal relationships between employees and line management etc. thus the relationship tends to be unpredictable and unstable over time.
The task of managing people
The overall task of Human Resource Management is to bring a balance between the competing interests of the employees and those of the organization. However, bringing equilibrium in the employment relationship is not easy, as it may seem hence it defies a neat and precise assumption that it is possible to achieve it.
Secondly the main problem arising from the employment relationship is that it involves dealing with the human mind, which is the most unpredictable resource in the organization.
Thirdly it must be noted that the employment relationship is a highly contentious one with the organization aiming to maximize profits but at a minimum cost and individual employees seeking to maximize their earnings but at a minimum effort.
Fourthly balance in the employment relationship seems to be impeded by the unevenness of the obligations that arise in the socio – exchange process. Richard Hyman (1974) argues “ The obligation of the employer are specific and precise while those of the employee are imprecise and elastic”. Thus from this inequitable distribution of in terms of obligations from both sides, an imbalance in the employment relationship is inevitable.
Nevertheless the role of HRM is in bringing balance to the employment relationship can be divided into two broad categories
- Strategic Human Resource Management
In this scenario HRM is at the center of business decision making from policy formulation to policy implementation and finally to policy evaluation. This goes beyond HRM’ s traditional function of hiring and firing to include more people oriented issue like culture management, leadership, motivation, and commitment and change management. HRM in this context is believed to ‘add value’ through its strategic trust. Thus both the organization and the employees tend to benefit simultaneously hence bringing some degree of balance or equilibrium in the employment relationship.
- Operational Human Resource Management
HRM in this context is not associated with neither strategy nor policy agenda, instead it is concerned with making sure that the organization’s resources are properly resourced and are functional. In this context balance in employment relationship is difficult to achieve because the main HR agenda is mainly biased towards the employer towards the advocacy for organizational efficiency and good systems of management in all HR functions.
Employees are vulnerable as they are reduced to instruments of exploitation to meet organizational objectives. There is evidently no proper regard for their plight hence a situation of discontent is highly conceivable exposing structural imbalances in the employment relationship.
The Human Resource Management (HRM) Model vis-a vis the Industrial Relations (IR) Model
The Industrial Relations Model
The management of relationship (both individual and collective) or with and between members of the workforce so as to maintain commitment and motivation can be done through various approaches. One of the traditional approaches to manage relationships is the Industrial Relations Model. The most outstanding feature of this model is its strong emphasis on an indirect and collectivist approach.
Employers and employees in the IR approach have no chance of directly confronting each other in serious organizational matters.
Illustration
Employees on one side seek representation from Trade Unions while management represents Employer’s interests.
The general from the employees is that there is strength in collectivism (from Trade Unions) as opposed to individualism. Employers on one side employ a management team they feel has got the capacity to represent their interests.
The IR model acknowledges the inevitable existence of divergent interest between employers and their employees. As such the IR model is purely pluralistic in nature.
There is a general assumption that conflict is inevitable and that it must be managed so that the organization can continue to operate
Central Features of the Industrial Relations Model
- The organization is seen as a coalition of individuals and groups with conflicting perceptions and aspirations, which they may seem to express.
- Conflict is inevitable and must not only be viewed as tangible or overt conflict in the form of strikes, work stoppages but also as latent conflict in the form of strikes and stoppages.
- Representative structures like Trade Unions are accepted as legitimate sources of power and as groups with the right and legal limit ascertain their claims and aspirations.
- Problems arising from the employment relationship can only be solved through processes of joint regulation and collective bargaining.
- Due to the divergence of interests, it is necessary to establish rules and regulations in order to manage the organization effectively, to foster acceptance of authority and to deal with conflict.
The Human Resource Management (HRM) Model
The HRM model is a direct opposite of the IR model. In the HRM model, the organization is seen as to have a single unit of purpose, which is a brainchild of management and the owners of the means of production and it must be accepted by the employees.
There is no place for Trade Unions in this model, as management decisions are believed to be in the interests of all.
Fundamentally the HRM model is a direct approach, which is premised on a unitarist and convergence of interest perspective
Illustration
What is important to note from the above illustration is that Trade Unions are completely sidelined in the HRM model hence there is a direct link between the employers, management and their employees.
The HRM model being unitarist in nature derives historically from the paternalistic nature of master servant relationship. Management’s right to manage is not challenged strongly but at times it is believed to be shares through programmes like employee participation and involvement.
Central Features of the Human Resource Management Model
- Communication is dual in nature that is employees are believed to be free to communicate to the management and employers without necessarily going through a Trade Union.
- The HRM model aims to transform the organization into a coherent team or unit whose members share common goals and objectives
- The entire employment relationship is believed to be based on consultation and involvement and mutuality of purpose.
- Managerial prerogatives are maintained and are legitimized by all members of the organization.
- Conflict does not exist since there is commonality of purpose and where it exists it is a result of outside agitation.
The evolution of the Human Resource Management Function
Tracing the definitive origins of HRM is as difficulty as arriving at a proper universal definition of the concept. HRM can be said to be a product of an evolution in the management of people at work and the way work is organized.
The concept of HRM involves important elements from other fields like psychology, sociology etc. This means that the origins and definition of the concept of HRM defies a simple analysis without consideration of the impact of the other influences mentioned above.
The art of managing people and the relations existing among them in various productive processes dates back to the beginning of human history itself. However, the present day concept of HRM can be traced to the origins of business organizations, which appeared with the industrial revolution in Britain in the late 18th and early 19th centuries.
This industrial revolution period was characterized by the need of factories to have large numbers of employees with specific skills to operate machines thus for purposes of recruitment and selection, training and development reward management, performance management etc. These factories started to employ people responsible for these activities.
These people were mainly social reformers who championed the cause for better conditions of employment in industry.
Mechanistic Period
This period covered the 1940s and the 1950s when manufacturing was the driving force in industry. This period saw the birth of the personnel and the industrial relations function. The main focus of the personnel function at this stage was purely administrative e.g. through interpreting union contracts, keeping records, hiring and firing of people etc,
More importantly this stage can also be described through Tyson and Fell’ s typology as the Clerk of Works.
This period also saw the coming in of benefit programmers like unemployment benefits, sick pay and subsidized housing that were institutionalized by companies like the Quaker family, Cadbury and Rowntree and Lever brothers.
Although these programmes sounded much more charitable, it is important to note that they had a disenable business concern like motivating employees and increasing their commitment.
The Legalistic Period
This was the period covering the 1960s and the 1970s and was characterized by an unprecedented level of legislation in the social and employment area. This had a major impact on the role of the Personnel Officer. There was also a remarkable increase in Trade Union activity. The role of the personnel officer to added to its ranks the aspect of negotiation with the militant workforce to its repertoire of duties. Thus Personnel Managers can be described through Tyson and Fell’s typology as Consensus Negotiators.
The Organistic Period
This period was characterized by tremendous organizational changes in the 1980s e.g. globalization, mergers and acquisitions, business process re – engineering and downsizing.
This brought some radical changes in the workplace, which in turn created an environment in which the HR function faced a good number of challenges like workforce and cultural diversity, increased awareness of legislation, competition and the growth of Multinational Corporations.
More importantly as a result of increased competition there was now a new thrust to the HRM concept to avoid being cost centers but instead to be profit centers.
There was also an increase in command and control policies to save the organizations from sinking in the turbulent environment.
Strategic period architecture
The period from the 1990s saw an elevation of HRM to its present day scenario. The human resource emerged to be the most important source of competitive advantage. Therefore there was need for strategic thinking and planning. Organizational structures evidently changed from tall bureaucratic structures to flatter structures. Organizations because of increased competition seriously turned to HRM practice and HRM now has a place on the strategic table. This stage can be defined through Tyson and Fell’s Typology as the Architecture stage.