Human resource Management

Introduction

This literature review is based on Human Resource Management (HRM) and from this I want to develop my research to formulate a specific research question which I will then be able to write a full report on. The initial review looks at HRM as a whole and the theories that surround this, often over-looked, subject. Specifically, I want to look at how the HRM structure works within the tourism industry, especially looking at a major British holiday company and focussing on how HRM motivate their employees in various aspects of the business such as the customer service department. However, to achieve this I must first look at HRM as a topic to get the background research for my project to begin.

Human Resource Management in the Tourism Industry

As a direct result of new and more sophisticated technology becoming available to us, businesses are increasingly growing to such an extent that they develop into a global concern. This means that the role of Human Resource Management has become very important within businesses, but it is still looked upon as a lower department. However, the concept of Human Resource Management (HRM) has been heavily debated in literature and is used more increasingly within employment sector organisations. The history of HRM could be summarised as it being developed initially from work in the USA in the 1960s and 1970s and was created from several interrelated sources and since then the concept has been spread from the USA, into Europe and eventually Australasia.

There is no formal definition of HRM because different companies imply different definitions from various evidential sources. Basically, HRM can be defined as a range of circumstances that affect the employment and contribution of people, against the criteria of coherence and appropriateness (Brewster, 1994). However, Kirkbride (1994) suggested that the use of the term HRM gives the general sense of the policies, procedures and processes involved in the management of people in various work environments. Bratton and Gold (1999) also noted that a definition of the subject matter under which HRM covers would help to analyse and understand the HRM practices. They also defined HRM the subject as:

“…That part of the management process that specialises in the management of people in work organisations. Human Resource Management emphasises that employees are the primary resource for gaining a sustainable and competitive advantage, and that human resource activities need to be integrated within the corporate strategy, and that human resource specialists help organisations to meet both the efficiency and equity objectives...”

Mead (1998) states that the key terms in HRM literature are strategic focus. This meant that the need for human resource policies and practices had to be consistent with the overall business strategy, allowing the individual sections of a HRM package to reinforce each other. This should particularly emphasise teamwork, flexibility, employee involvement and organisational commitment. This, however, is a completely opposite message to the traditional demands on the human resource systems of countries like USA where there is a collective bargaining arrangement from both the employers and the policy-makers.

Therefore, the product market environment of the 1980s changed this situation so that the traditional demands would still be met, but at the same time the human resource management system would also meet their new demands at the level of the individual employee and throughout the entire organisation (Beaumont, 1993). The Harvard Business School approach to strategic HRM suggests that the need for all the people involved with the business organisation, such as the employees, their union, the customers, etc., should be taken into account when considering any organisational arrangements, and making ’employee influence’ one of the leading policy areas in their attempt to develop a pro-active, strategic and broad-based HRM orientation in each individual organisation or department. The terms and content have changed considerably through the 1980s and 1990s, with a greater emphasis now being placed on the financial, communication and problem-solving activities. (Beaumont, 1993).

Again, Bratton and Gold (1999) also stated that HRM could be described as the organisation’s valued assets, emphasising the commitment of employees as a means of competitive advantage, and therefore creating calculative, quantitative and strategic managerial aspects of managing the workforce in a rational and humane way.

HRM Practices

As there is an increase in the greater quality of competition, the higher the emphasis on the market and the constantly changing attitudes towards work itself has made it necessary to identify and adopt different management approaches. Even though the focus has moved from a structural and systematic way of thinking to the development of specific managerial practises that will stimulate a corporate culture and in return employee commitment is secured to the extensive use of employee resources by the HRM. Therefore, in order to understand why HRM is needed in the tourism industry, it is important to look at the role of HRM within an organisation, as this is the custodian of competitiveness.

A review of the literature based on international HRM by Harzing and Ruysseveldt (1995) revealed three main areas of discourse; staffing, training and development, assessment and compensation. These are also considered to be the main activities in both domestic and international HRM. In general, staffing issues in an international organisation usually involve filling critical management positions. This means that almost all employees in the middle management and more operative levels are always selected and recruited on a local basis to the organisation. Sometimes, when certain candidates for upper management posts are being recruited, there are various options as to whether choose a candidate from the organisation’s parent-country nationals, their host-country nationals or even third-country nationals. The final choice, however, is definitely dependant on the attitude of the top level management at the parent organisation.

According to Perlmutter (1969), these attitudes can be divided into three central categories; Ethnocentricity, Polycentricity, and Geocentricity. In respect to quality, top level management is continuously battling to weigh professional managerial skills and technical competence against environmental adaptiveness. Therefore, the ability to adapt to local cultures is a major factor, involving not only the candidate, but also their partner and their immediate family as well.

Training and development activities within international HRM systems, places such emphasis on shifting from the preparatory training needs of expatriates to a fully international training and development system which is available to all managers and will improve their performance in a global perspective, regardless of their country of origin. Today, these activities are crucial to international HRM. They can be wide-ranging which means the person who gets the job will need to know the specific organisational structure to which they will be assigned and the job and task skills required of them there.

They must also acquire an understanding of the local area including such things as the social, cultural, and legal aspects and develop the necessary interpersonal skills with which to perform well in various situations. The importance of the last two areas however was pointed out in a survey conducted by Harzing and Ruysseveldt (1995), where they identified cultural sensitivity and the ability to handle responsibility as well as the ability to develop employees, a manager’s three most important skills in their job role.

Finally, the last important task identified was that of assessment and compensation. This process of assessing and compensating international managers is complex in nature and can be reflected in the requirements used in such assessments. For example, Adler and Bartholomew (1992) suggested that these requirements are often a reflection of a more traditional approach to international managers, thus meaning their methods are based on the ethnocentric attitudes held by high management levels that are predominantly using parent-country nationals to staff their company’s foreign subsidiaries. However, such subsidiaries are subordinates to the main headquarters, both on an organisational and cultural level.

As a result, more open-minded, authors, such as Brewster (1994) and Stonehouse (2000) have taken part in the continuing debate on the concept of strategic HRM. They have argued that the underlying concept is the idea that human resources are not only a high operating cost for most organisations, but are also a major factor in the contribution of the effective utilisation of all the organisation’s resources as well.

The Importance of HRM and the Business Strategy

One of the main features that defines strategic HRM is its close relationship to the business’s main strategy and is creates the argument of is there a direct correlation between strategic HRM and economic success? HRM only becomes strategic when in private sector human resources are promoted to a position where the organisation looks and treats them as a competitive advantage (Kochan and Dyer, 1992).

This has raised a key debate in terms of how HRM can contribute to the overall success and competitiveness of the business. Until recently, however, most companies preferred a reactive management method within their human resources, leaving the personnel management to consist mainly of administrative activities.

The creation of multiple new macro economies have led to the concept and recognition of people as a valuable asset which if managed as a strategic resource can help an organisation to achieve superior performance levels and gain a greater competitive advantage. This awareness has led human resource management directly into the spotlight (Storehouse, 2000). Therefore, HRM has a definite strategic approach in arranging human resources and getting involved in a closer alignment of employment allocation systems along with business strategy.

The integration of HRM and business strategy means that the level at which the HRM issues are considered are now playing a larger role in the formulation of business strategies. Indeed, HRM intends to focus on the issue of strategy and the more organisations that become knowledgeable of this relationship, the more human behaviour becomes a competitive factor, which is closely linked to the strategic direction of the particular organisation.

According to Kirkbride (1994), an integration of business strategy and HRM as described earlier can have several advantages. Firstly, integration means that a broader range of solutions is available for solving complex organisational problems without the need for external help. Secondly, it ensures that the human, financial, and technological resources also are given equal consideration when setting targets and looking at the implementation capabilities.

Third, through this kind of integration, various organisations can explicitly concentrate on the individual employees, who the departments comprise of and their needs and only then can they implement their policies. Finally, the response to integrating human resources and strategic plans can limit the level of subordination of strategic planning in consideration of human resource preferences and, thus neglecting human resources as a crucial source of organisational operations and the creation of competitive advantage.

Whichever way you look at it, there is a growing body of evidence that supports the link of an association between high performing human resource management and organisational performance. It has been found that businesses whom linked HRM practices with their business strategy are constantly delivering higher financial performance outcomes. Beaumont (1993) argued that it is not just the relationship that is important but the quality of the HRM practices and a distinct approach is necessary in delivering high performance indicators. HRM strategies and practices must therefore be working well together within the individual business’s strategy planning.

Conclusion

All of the theories used in this review have been extensively researched to settle in their final point of view. This means that it should not be that difficult to find any related researches within the subject field or any other secondary data I come across to answer my research questions and meet the objectives of my research as a re-analysis of all the data that has been already collected could develop a new approach to the research.

Search of secondary-data will be aided by internet searches which should prove useful for survey results like organizational surveys, academic surveys organization’s employee attitudes, email questions etc. Also, looking at and obtaining multiple-source data that has been published such as journals from tourism business magazines, books, government publications and organization reports. On closure, an important note to remember is that the results from my research and survey, along with the results from other surveys found, including the relations with the literature review, should meet my research topic generally and settle in a clear and informative answer to my research question and its objectives.

Bibliography

Beaumont, P. (1993). Human Resource Management: Key Concepts and Skills. Sage Publications.

Bratton, J. and Gold, J. (1999). Human resource management: theory and practice. Basingstoke, Hampshire: Palgrave.

Brewster, C. (2003). Line Management responsibility for HRM: What is happening in Europe?  MCB UP Ltd. (Journal)

Dessler, G. (2008). Human Resource Management (11th Ed.). Prentice-Hall Inc.

Harzing, A. & Ruysseveldt, J. (1995). International Human Resource Management. Sage Publications

Kirkbride, P. (1992). Human Resource Management in Europe.  Routledge, London

Maund, L. (2001). An Introduction to Human Resource Management.  Palgrave – MacMillan

Mead, R. (1998). International Management: Cross-Cultural Dimensions. Blakewell Publications

Stonehouse, G. (2000). Business Strategy (2nd Ed). Butterworth-Heinemann

Final word Count: 2047 (excluding references/bibliography)

Carl Edwards (28000432)  Page 10