Analysing the primary HRM functions

HRM is the systematic planning and control of a network of fundamental organizational processes affecting and involving all organization members (French, 2004, p.17). Firstly, a distinction should be made between HRM and personnel management. Thus, applications of HRM theory differ from personnel management in their dismissal of prescriptive “one best way” models of practice as diverse national and industrial relations environments demand different HRM applications (Nankervis et al., 2009, p.16). This includes activities like job analysis, HR planning, employee recruitment, employee selection, performance appraisal and HR development, among others (Stone, 2001, p.13).

The primary HRM functions generally include planning for HR needs which consist of planning and forecasting the organization’s short and long-term HR requirements and analysing the jobs in the organization to determine their duties and purposes and the skills, knowledge and abilities that are needed; staffing the organization’s personnel needs which include identifying job applicants and selecting from among those most appropriate for the available jobs; performance management and remuneration which includes appraising and evaluating employee performance and analysing and motivating employee behaviour; and other functions like improving employees and the work environment and establishing and maintaining effective working relationships (Kramar, Mcgraw and Schuler, 2007, p.6).

The secondary HRM functions include organization/job design which are concerned with interdepartmental relations and the organization and definition of jobs; performance management systems which are used for establishing and maintaining accountability throughout the organization; and research and information systems which are necessary to make enlightened HR decisions (DeSimone and Harris, 2008, p.7). Noe et. al (2004) describes Labour relations as “emphasizing skills that managers and union leaders can use to foster effective Labour-management cooperation, minimize costly forms of conflict (such as strikes), and seek win-win solutions to disagreements.” (442, 1) The Bureau of Labour Statistics [BLS] (2006) describes Labour relations roles today as

“Preparing information for management to use during collective bargaining agreement negotiations… interpreting and administering contracts with respect to grievances, wages and salaries, employee welfare, health care, pensions, union and management practices, and other contractual stipulations. As union membership continues to decline in most industries, industrial relations personnel are working more often with employees who are not members of a Labour union.” (22)

Employee Management: Managers Right to Manage

Unions and the National Labour Relations Act of 1935The establishment of the National Labour Relations Act [NLRA] in 1935 was a tremendous influence for legally enforcing employment rights for unionized employees and limiting employers unfair Labour practices. Union officials negotiated for better benefits and higher wages for union employees who are sometimes compensated for the union dues members were required to pay. The NLRA boosted union growth to the point where union organizations made it a requirement to join a union before hire, or within 30 days of hire, regardless of whether or not the employee was willing. Union dues were necessary for unions to exist and although when strikes were planned, employees not wishing to participate due to financial desperation were physically threatened or harmed if they tried to get past strike boundaries.

Amendments to the NLRA later provided for the growth of up to 22 right-to-work states where mandated Unions are illegal and allow employees the options of negotiating their own benefits and salaries. Today union grievance strategies are often resolved with negotiations or arbitration rather than with union strikes as the financial repercussions of strikes impact participating union members with zero income while on strike, and business organizations suffer financial losses from reduced or zero productivity. Unions continue to exist in many states to ensure that employers legally adhere to fair employment acts such as safe working environments, hourly wages, salaries, benefits, or merit increases. (Maslow, 1992, 39-52)

Moreover, it can be argued that the sources of competitive advantage have shifted from financial resources to human. Royal Caribbean Cruise Line employs a strategy that incorporates Pfeffer’s sixteen practices of competitive advantages, cited in Beardwell and Holden, 2004. Here, the company gives “signing on incentives” for key members of staff, personal development and progression within the fleet. For example, they offer one-week shore leave to gain intensive health and safety training. Moreover, customer feedback scores are key indicators for success and bonus performance related privileges which are an integral part of the job. Within this environment the majority of wages is tip based and it depends on employee’s attitudes, competencies and skills; their ability to generate commitment and trust, communicate aspirations and work in complex relationships, to gain repeat custom and job satisfaction.

To aspire to this the answer lies in competitive strategy and human resource practices such as good communication, respect for individuals, and a manager with vision. In the case of Royal Caribbean, it is not a department that implements this strategy, more so an embracing culture that ensures a competitive edge. Nonetheless, can people, with all their idiosyncrasies and variances provide a sustained competitive advantage, or will competitors be able to imitate what has been achieved or buy in the same skills and capabilities from the market place? A culture, experienced in such environments such as Royal Caribbean cannot be transferred, and commitment, pride and trust takes organizations years of focus, skill, and senior management commitment to nurture this kind of HR culture, (Hendry, 2005). Beardwell and Holden bring to this argument a considered approach where four perspectives of HRM are discussed; strategic, resource-based, restatement and fusion. Strategic HRM suggests that human resource management practices are most effective when matched with strategic goals of organisations, (Hendry, 2005, Storey, 2001, cited in Beardwell and Holden, 2004).

While there are merits to adopting such a change in corporate culture, there are failings to this strategy. For example Maslow’s theory on differing national working cultures, cited in Handy, 2009, suggests that there are distinct ways in which cultures work as individuals and teams to achieve a common goal. Prescribing, or at least recommending a working culture that is different to the national culture can lead to misunderstandings, misinterpretations and problems in managing the human resources. This is exemplified in the case study of Disney Land Paris, refer to appendix 2, where the corporate culture did not fit into the national culture. A compromise was eventually achieved, but not without a loss in people’s perception of the attraction, Disney as an employer and the quality of the staff employed at the resort. Quite the opposite to that of collective employment models outline previously (Maslow, 1992, 39-52). Alternatively, if management want to pursue cost leadership and maintain a tight budget on wages, this approach may not be suitable, (Hendry, 2005). IGreat potential exists for the use of the resource-based theory in SHRM research. The leaning towards internal skills audits, provides a strategic examination of the organisations attempt to develop the human resource as a competitive advantage, (Beardwell & Holden et al, 2004). Moreover, the strategy permits the departments to be flexible, introducing multi-skilling to each employee.

These HRM functions should not only be handled by HR managers but by all managers, regardless of their functional area and their position in the hierarchy. Thus, the role of the HRM department is to support and not to supplant top personnel’s HR responsibilities. One way in which the HRM department could support the top personnel’s HR duties is by training them in certain HR skills, so that they will be able to analyze the people side of productivity rather than depend solely on technical solutions to problems. They could also actively involve them in formulating, implementing and reviewing all HR plans and strategies so as to increase their commitment to the effective implementation of these plans (Gomez-Mejia, Balkin and Cardy, 2001, pp.38-40). Therefore, it is important that top personnel like supervisors, department heads and vice presidents, be knowledgeable regarding such HR matters, as such a background is an asset (Miner and Crane, 2005, p.23).

The HR managers now becomes part of the business team when they become strategic partners with top personnel and assist the organization in determining a strategic direction for its own activities. Since HR managers have become more business oriented and strategically focused, they have to be sensitive to changes in markets, people and competition and be aware of the need for an adaptive and flexible organization (Harvey and Bowin, 2006, p.21). Hence, they now practice four key roles, namely the strategic partner, administrative expert, employee champion and change agent. It also means that HR managers have to be more efficient and effective in managing HR activities like selection and appraisals. Lastly, HR managers are also required to be the employee’s voice in management decisions and to act as a catalyst for change (Stone, 2001, pp.10-11).

Marxist, Pluralist and Unitary Approach

We touch on the different HRM theories and models and how it translates into practice. HRM theories and models are based upon assumptions, values and beliefs about the nature of relationships between employers, their employees and unions, and all HR functions that take place (Nankervis et al., 2009, p.16). Firstly, within a Marxist perspective, unions are seen as a product of class consciousness and they represent and protect the interests of the working people in the class struggle. “They (unions) are the vehicle through which workers could protect their wages and working conditions.”(Deery et al. p.206) Thus, from this standpoint, the Marxist theory is seen as ‘champion of the working class. Alternately, ‘unions’ are suggested to be ‘agents of industrial reforms,’ as they “seek to protect workers through the establishment of rules governing employment arrangements.” (Deery et al. p.209).

There has been considerable debate over whether HRM is essentially “unitarist” or “pluralist” in its perception of the employment relationship. A unitarist approach states that the workplace is characterized by mutual cooperation and harmony between management and employees (Deery et al., 2001). This is due to the fact that employees’ goals are aligned with the goals of the organisation. Alexander and Lewer (2008: 6-7) refer to this as the “hand-in-hand” approach, which implies that the employment relationship is dominated by common objectives and values. This common interest in turn decreases conflict, as employees and managers working for the company regard themselves as being ‘in the same boat’. Consequently, the Unitarist perspective likens a workplace to a “strong unified team” (Fox, 1966: 13). In addition, two extreme theoretical approaches to HRM can be distinguished as hard (instrumental) and soft (humanistic) HRM.

Employment Relationship Models

The hard approach stresses the rational, quantitative and strategic aspects of managing human resources, where performance improvement and competitive advantage are highlighted. In contrast, the soft approach emphasizes employee development and collaboration (Stone, 2001, p.10). The different HRM models below have been developed to accommodate the diverse industry and workplace contexts in which they operate. The Michigan model developed by Fombrun, Tichy and Devanna focuses on four key components like selection, appraisal, development and rewards. It emphasizes the interrelatedness and the coherence of HR development activities and aims to increase organizational effectiveness by expressing emphasizes on six basic components like situational factors, stakeholder interests, HRM policy choices, HR outcomes, long-term consequences and a feedback loop. It incorporates issues like workforce characteristics and management philosophy; recognise the importance of “trade-offs” and high employee commitment to organizational goals, among other factors. (Kanter, 1990, 246-265)

The Guest model developed by David Guest has six components like the HRM strategy, a set of HRM policies, a set of HRM outcomes, behavioural outcomes, a number of performance outcomes and financial outcomes. Its weakness is that it defines HRM as a particular managerial style (Bratton and Gold, 2009, p.20). The Warwick model developed by Hendry and Pettigrew, which five elements are outer context, inner context, business strategy context, HRM context and HRM content. To summarise, the hard models like Michigan and Warwick emphasises the quantitative, calculative and business strategic aspects of managing the headcount resource in as rational a way as for any other economic factor. They stress on the close integration of HR policies, systems and strategic objectives of the organization and the achievement of such an effect by their own coherence. In contrast, the soft models like Guest, Harvard and Storey emphasize the importance of integrating HR policies with business objectives. (Kanter, 1990, 246-265)

However, when organizations employ the “soft” approach, the result is completely different. In every approach, there are advantages and disadvantages. The “hard” approach would mean that rules, regulations and goals are clearly defined and adhered to, however, it would mean that employees will not be involved in decision-making and that may result in a decrease in motivation and commitment. The “soft” approach, on the other hand, although may increase motivation and commitment since employees are involved in the organization, it may prove to be chaotic if clear-cut rules and goals are not made clear as this may affect the firm’s profits and goals. (Braverman, 1974, 85-123)

Technology and global business practices today are poignant contributors to the reduction in the number of unions today. Looking back over the millennia, unions were very important when Labour production was high, with numerous factories established throughout the country and automated processes were just getting off the ground or had not been established yet in many production organizations. The majority of the Labour force consisted of uneducated union members fighting for fair employment practices for their health and rights. Today automated robotics and outsourcing (or off shoring) to low-cost production developing countries have replaced a large number of laborious job positions in the UK. (Taylor, 1997, 275-295)

Labour relations consist of more table negotiations than strikes, with distributive bargaining in wage increases, integrative bargaining for dual benefits to both sides, attitudinal structuring to develop trust and intraorganizational bargaining regarding seniority or turnover. (Noe, et. al, 2004, 462, 4) Employers look for and recruit more college and university graduates to fill employment positions that are crucial to the financial growth and success of organizations today. Frequent technological evolution, financial strategies, marketing strategies and customer service are among the top areas businesses focus for attracting customers and developing products of interest, often on a global scale. Educated employees are able to negotiate salaries, bonus and benefits packages individually.

This view is similar to that of Price, 2005, view that distinctive competence being made up of the skills of the members of the organisation provides a framework for viewing human resources as a pool of skills, which can provide a resource to serve as a sustained competitive advantage. While HRM has been used as a synonym for personnel management and Industry relations by some, (Storey, cited in Beardwell & Holden et al, 2004), there is a consensus that HRM offers a more integrated approach to the management of people, (Handy, 2009).

However, Storey and Legge cited in Hendry, 2005, have voiced a more skeptical appreciation of the theoretical underpinnings and intellectual credentials. While some theorists have questioned if HRM is a map, a model or a theory others have proposed typologies (Storey, 2007; Hendry, 2005 cited in Beardwell & Holden., 2004). These confusing and often hypocritical suggestions have only fuelled the argument against HRM as a management tool and helped sceptics confirm HRM as a renaming and fusion of PM and IR, (Lockwood and Jones, 2004). Moreover, there is concern that a strategy deep rooted in strategic approaches cannot handle the day to day characteristics of employee issues within the hospitality industry. (Kanter, 1990, 246-265)

Modern Management Techniques

Modern management is still viewed as a process that enables organisations to achieve their objectives by planning, organising and controlling their resources, as advocated by Fayol, but views gaining the commitment of their employees through motivation as a key element. Hierarchical organisation (introduced by Fayol) has become the dominant, traditional mode of structure in large corporations and civil/public service departments. In some cases this “mechanistic” model works best, however, the emphasis is on efficiency and control, whereas a greater balance between people and performance is generally considered the more desirable approach nowadays. (Braverman, 1974, 85-123)

In business today, creating a high performance culture is important in order to bring about change. Combining both transformational and transactional strategies ensures a clear focus on the achievement and measured results of the organization, so that targets, results and procedures are delivered, developed and shared. Situational Theory This type of leadership is based upon the importance of the situation. The person who becomes the leader of the work group is thought to be the person who knows best, and is seen by the group as the most suitable leader in the particular situation. In this theory people tend to follow whom they perceive to be offering them a means of accomplishing their own personal desires.

Although the Classical Management (vertical/hierarchical) approach dominated organisational structure for decades, the Human Relations Movement (horizontal/inter-departmental), encouraging adaptation to external changes, seems the more relevant approach for modern management. The Contingency approach views the organisation as an organism, segmenting as it grows, each segment specialising in knowledge and activity, all of which must cope with their external environment and integrate harmoniously. (Taylor, 1997, 275-295)

Conclusion

As stated previously, one manages through people, and to be able to handle the idiosyncrasies of such requires hands on approach to withstand the main characteristics of hospitality, (Lockwood and Jones, 2004). When considering the issue of Industrial relations, one must acknowledge the extinction of traditional components, such as the once joint responsibility to extend control of the collective relationship of the workforce between the employees and management. Industrial relations, according to Beardwell and Holden et al, 2004, was based upon a manual, manufacturing unionised workforce, rather than the wider implicated aspect of employee relations, which takes a more holistic interpretation of the workforce. Incidentally, the “them and us” scenario is replaced by the desire by management to extend control over aspects of the collective relationship, treating employees as primary responsibility of management.

Of course, there are those who voice concern over the ideological stance of this theory, but one must note that if the management of the human resource is not professionally maintained, the reputation of the hotel as an employer deteriorates, the opportunity to increase competitive advantage through employees deteriorates and the customers experience a deterioration of service. Moreover, the opportunity for staff members to move is evidently clear from the transient nature of the industry highlighted by people 1st. It is in the interest of management to manage effectively with both the organisation and employees at the heart of the strategy.

Furthermore, while HRM has grown as an academic discipline and as a management practice, it has attracted criticism at both the theoretical and empirical level. Critics have proposed that HRM as a concept lacks coherence and is not ubiquitous. Nonetheless, it must be noted that within these successes one singular form of HRM as not been used. At least one of the principles outlined within this essay has been joined with another to suit the organisation, market within which it operates employee situation and the economic situation. In this sense, HRM is not one set of rules, rather a hybrid of each other forging through archaic organisation cultures to ensure that people are at the forefront of strategic objectives and at the same time enhance the competitiveness of the business. (Kanter, 1990, 246-265)