Chapter 1: HRM definition and evolution
1. Introduction
Draft: Management is the attainment of organizational goals in an effective and efficient
manner through planning, organizing, leading and controlling organizational resources
What is management?
Money investing in:
- Budget to spend
- Machines, building (technology to produce goods/ services)
- Wages of people
Planning, organizing, leading and controlling of flows of staff
Managing people
Human machines
- Avoid them going in overdrive
- Maintenance when needed
What type of personnel to recruit
Work floor planning: how many shifts
Motivating workers
Monitoring performances
4 functions: strategic (planning), tactical aspect (organizing),
operational aspects (leading and controlling)
1. HR: deploy all of its competences + deliver its message
in clearest way
Direct impact: teambuilding, culture, social law
2. Supervisors have strong impact on how workers feel in
organization, how they perform, how long they want to
stay
Big part of operational HR: supervisors’ hands
3. HR department make sure that direct supervisors in organization have sufficient HR
knowledge to execute these operational aspects of HRM + possible to keep supporting
and guiding direct supervisors
Direct impact: n advance training, counter problems, support in HR-matters
4. Employees will also perform HR practices amongst themselves (motivate each other)
HR aids the business in attaining its organisational goal
Excellent HR
Effective: do what you promised
Efficient: within budget
Calculate: make business case like other departments
Managing people can be hard
Shareholders invested and want to see profit, more than a bank’s interest rate
(company goes bankrupt – lose money)
“The decision is ruthless. Ethics are in the execution.”
firing 100 workers, safeguarding jobs of 900 workers
, = HR make sure that negative decision is executed in best possible way
Bad decision weigh on workers + jeopardise the attainment of organizational goals in short/
long term => unfavorable employer brand and stimulate better workers in labour market to
apply for jobs offered by competitors
Board of directors wants restructuring
Dismissal disturbs lives and emotions of the staff
Execute hard decision as softly as possible, but do execute it
HR: Motivated, educated and properly led workers deliver better performances and contribute
more to the attainment of the organizational goals
Planning
=strategic HRM
Where do we want to go, how to prepare? Which jobs should be created/ cut? Which
competences? Which structure?
Competitive position, continuity and strategy
Decisions on top level, LT-perspective
HR doesn’t always have voting power
Vaes: “right potential on right track” > “right man on right place”
Central in strategic HRM= ability to compete and organizational continuity
Paper vs reality: two merging companies
- go home when you found the problem
- didn’t find the problem, go home
Positioning approach = outside-in approach
Analyze the market and map products and behaviour of competitors
Based on market analysis, determine a strategy and fit with the new strategy
Resource-based approach = inside-out approach
Look less at competitors and want to be different
Organization will be moulded to fit with staff, rather than other way around
Organization attain this with 4 conditions
1) Human capital needs to be valuable to the organization
2) Resources have to be scant, not available to all organizations
3) Resources not easily imitated
4) Human resources not easily substituted
HR should have a say at decision-making stage to ensure that human aspect is taken into
consideration alongside the financial concern
Ulrich: four quadrants – four roles that HR should fulfil
Strategic partner role= strategic approach by HR
,Tactical HRM: getting strategic plans into practice
More flexible?
Planning hiring phases
Redesigning jobs and procedures
Change agent= tactical role of HR (LT)
HR have to think about the initiatives that need to be taken to attain the organizational
and strategic goal
Operational HRM: leading (motivate, direct goals) and controlling (evaluation interviews) of
human resources
Most tangible for employees
Supervisors of HR
Daily activities, ST
Employee champion= daily functioning of the organization (ST)
Take individual needs/ goals of workers into account
Resource-based approach; aware of strengths, work on weaknesses/ opportunities
Skills inventory: job title, experience, skills, training and diploma, hobbies
Good management; internal transfers; eternal vacancy in another department
Administrative partner= registration of workers’ needs, evaluation and functioning
interviews, listing training opportunities
Administration is crucial
Core business; other department, outsourcing, employees themselves (eHRM)
eHRM= more IT systems that offer employees HR-related information
->see annual leave, access info, working hours reduction schemes
Modern HR: executes each of the four roles and will outsource tasks to other parties that are
better equipped -> more time available for the core tasks of HR
The HR-cycle by Fombrun
=inflow-transfer-outflow model
- Recruitment, selection of applicants
- Evaluate performances of employees +
reward and training
- Training: improving performance in
current job and prepare for promotion
HRM is the attainment of organizational goals
in an effective and efficient manner through planning, organizing, leading and controlling
human resources, while respecting the reciprocal relationship between individual and
organization
Principal-agent relationship – Jensen and Meckling
‘a contract under which one or more persons (the principal(s)) engage another person (the
agent) to perform some service on their behalf which involves delegating some decision-
making authority to the agent.’
Exchange on which the cooperation between organization and individual is based
2. On control and trust
Two theories draw on principal-agent relationships:
, Agency theory
Principal & agent have different objectives
Agent pursues own objectives when possible
Control is required -> otherwise: latter will pursue their own goals (of firm)
Stewardship theory
Principal & agent may have different objectives
Agent may integrate principal’s utility function
Building on trust
Organizations often have culture in either control or trust is executed
Culture of trust -> culture of control (vice versa not easy)
Self-selection
Cloacked agency: urge to monitor subordinate closely
3. Views of HRM
Organizational-economic perspective
Human as production factor (machine)
Durable, maintenance & development
Prevention at work: less prevention is cost when they are out
Rana Plaza: organization in Bangladesh
Effectiveness and efficiency key elements
Avoid work accident
Production process -> layout and jobdesign
Investment cost vs ROI
Burn-out
Hard perspective on HRM; focus on business > people
Concl: Organization-economic perspective of HRM is a hard view of HRM that cares little
for the social and relational aspects that employees don’t abandon when stepping onto the
work floor but rather keep with them.
Social-psychologic perspective
Labor power & personal characteristics
Develop, social group; Nice colleagues
Needs & expectations
Attention to social processes
Option for other kind of job design; job rotation
Stakes perspective
Organization= arena
Various groups fight against one another
Temporary staff <-> permanent staff
Essential core personnel <-> peripheral workers (replaceable)
Distributing benefits & costs
Aggregate of connected parts
Pay raise for one work, affects other
Core of equity theory
Societal perspective
Reciprocal relationship
1. Introduction
Draft: Management is the attainment of organizational goals in an effective and efficient
manner through planning, organizing, leading and controlling organizational resources
What is management?
Money investing in:
- Budget to spend
- Machines, building (technology to produce goods/ services)
- Wages of people
Planning, organizing, leading and controlling of flows of staff
Managing people
Human machines
- Avoid them going in overdrive
- Maintenance when needed
What type of personnel to recruit
Work floor planning: how many shifts
Motivating workers
Monitoring performances
4 functions: strategic (planning), tactical aspect (organizing),
operational aspects (leading and controlling)
1. HR: deploy all of its competences + deliver its message
in clearest way
Direct impact: teambuilding, culture, social law
2. Supervisors have strong impact on how workers feel in
organization, how they perform, how long they want to
stay
Big part of operational HR: supervisors’ hands
3. HR department make sure that direct supervisors in organization have sufficient HR
knowledge to execute these operational aspects of HRM + possible to keep supporting
and guiding direct supervisors
Direct impact: n advance training, counter problems, support in HR-matters
4. Employees will also perform HR practices amongst themselves (motivate each other)
HR aids the business in attaining its organisational goal
Excellent HR
Effective: do what you promised
Efficient: within budget
Calculate: make business case like other departments
Managing people can be hard
Shareholders invested and want to see profit, more than a bank’s interest rate
(company goes bankrupt – lose money)
“The decision is ruthless. Ethics are in the execution.”
firing 100 workers, safeguarding jobs of 900 workers
, = HR make sure that negative decision is executed in best possible way
Bad decision weigh on workers + jeopardise the attainment of organizational goals in short/
long term => unfavorable employer brand and stimulate better workers in labour market to
apply for jobs offered by competitors
Board of directors wants restructuring
Dismissal disturbs lives and emotions of the staff
Execute hard decision as softly as possible, but do execute it
HR: Motivated, educated and properly led workers deliver better performances and contribute
more to the attainment of the organizational goals
Planning
=strategic HRM
Where do we want to go, how to prepare? Which jobs should be created/ cut? Which
competences? Which structure?
Competitive position, continuity and strategy
Decisions on top level, LT-perspective
HR doesn’t always have voting power
Vaes: “right potential on right track” > “right man on right place”
Central in strategic HRM= ability to compete and organizational continuity
Paper vs reality: two merging companies
- go home when you found the problem
- didn’t find the problem, go home
Positioning approach = outside-in approach
Analyze the market and map products and behaviour of competitors
Based on market analysis, determine a strategy and fit with the new strategy
Resource-based approach = inside-out approach
Look less at competitors and want to be different
Organization will be moulded to fit with staff, rather than other way around
Organization attain this with 4 conditions
1) Human capital needs to be valuable to the organization
2) Resources have to be scant, not available to all organizations
3) Resources not easily imitated
4) Human resources not easily substituted
HR should have a say at decision-making stage to ensure that human aspect is taken into
consideration alongside the financial concern
Ulrich: four quadrants – four roles that HR should fulfil
Strategic partner role= strategic approach by HR
,Tactical HRM: getting strategic plans into practice
More flexible?
Planning hiring phases
Redesigning jobs and procedures
Change agent= tactical role of HR (LT)
HR have to think about the initiatives that need to be taken to attain the organizational
and strategic goal
Operational HRM: leading (motivate, direct goals) and controlling (evaluation interviews) of
human resources
Most tangible for employees
Supervisors of HR
Daily activities, ST
Employee champion= daily functioning of the organization (ST)
Take individual needs/ goals of workers into account
Resource-based approach; aware of strengths, work on weaknesses/ opportunities
Skills inventory: job title, experience, skills, training and diploma, hobbies
Good management; internal transfers; eternal vacancy in another department
Administrative partner= registration of workers’ needs, evaluation and functioning
interviews, listing training opportunities
Administration is crucial
Core business; other department, outsourcing, employees themselves (eHRM)
eHRM= more IT systems that offer employees HR-related information
->see annual leave, access info, working hours reduction schemes
Modern HR: executes each of the four roles and will outsource tasks to other parties that are
better equipped -> more time available for the core tasks of HR
The HR-cycle by Fombrun
=inflow-transfer-outflow model
- Recruitment, selection of applicants
- Evaluate performances of employees +
reward and training
- Training: improving performance in
current job and prepare for promotion
HRM is the attainment of organizational goals
in an effective and efficient manner through planning, organizing, leading and controlling
human resources, while respecting the reciprocal relationship between individual and
organization
Principal-agent relationship – Jensen and Meckling
‘a contract under which one or more persons (the principal(s)) engage another person (the
agent) to perform some service on their behalf which involves delegating some decision-
making authority to the agent.’
Exchange on which the cooperation between organization and individual is based
2. On control and trust
Two theories draw on principal-agent relationships:
, Agency theory
Principal & agent have different objectives
Agent pursues own objectives when possible
Control is required -> otherwise: latter will pursue their own goals (of firm)
Stewardship theory
Principal & agent may have different objectives
Agent may integrate principal’s utility function
Building on trust
Organizations often have culture in either control or trust is executed
Culture of trust -> culture of control (vice versa not easy)
Self-selection
Cloacked agency: urge to monitor subordinate closely
3. Views of HRM
Organizational-economic perspective
Human as production factor (machine)
Durable, maintenance & development
Prevention at work: less prevention is cost when they are out
Rana Plaza: organization in Bangladesh
Effectiveness and efficiency key elements
Avoid work accident
Production process -> layout and jobdesign
Investment cost vs ROI
Burn-out
Hard perspective on HRM; focus on business > people
Concl: Organization-economic perspective of HRM is a hard view of HRM that cares little
for the social and relational aspects that employees don’t abandon when stepping onto the
work floor but rather keep with them.
Social-psychologic perspective
Labor power & personal characteristics
Develop, social group; Nice colleagues
Needs & expectations
Attention to social processes
Option for other kind of job design; job rotation
Stakes perspective
Organization= arena
Various groups fight against one another
Temporary staff <-> permanent staff
Essential core personnel <-> peripheral workers (replaceable)
Distributing benefits & costs
Aggregate of connected parts
Pay raise for one work, affects other
Core of equity theory
Societal perspective
Reciprocal relationship
