Human Resource Management and Personnel Management

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To:                Phoenix Tannoy Ltd

From:                Hannah Moore, B…Right

Subject:        Human Resource Management and Personnel Management

Date:                03/11/04

Introduction

1.         This report discusses the historical development of Human Resource Management (HRM), identifies the role and purposes of HRM, and also to distinguish between personnel management and HRM.

The Chartered Institute of Personnel and Development (CIPD) defines personnel management as “the part of management concerned with people at work and with their relationships within an enterprise. It aims to bring together, and develop into an effective organisation, the people within an business, having regard for the welfare of the individual and of working groups, to enable them to make their best contribution to its success.”

        HRM may be defined as “a strategic and coherent approach to the management of an organisation’s most valued assets: the people working there who individually and collectively contribute to the achievement of its objectives for sustainable competitive advantage”.

        

The Nature and Development of Personnel management

2.        HRM obtained acknowledgment in the late 1970’s in the USA, as a label for the way companies such as IBM were managing their people. These companies applied the principles outlined by David Guest (1989) to gain a competitive edge over their competitors. These four principles are listed below.

  1. Strategic integration -“the ability of organisations to integrate HRM issues into their strategic plans, to ensure that the various aspects of HRM cohere and for line managers to incorporate a HRM perspective into their decision making”.
  2. High commitment – “people must be managed in a way that ensures both their genuine ‘behavioural’ commitment to pursuing the goals of the organisation and their ‘attitudinal’ commitment, reflected in strong identification with the organisation”.
  3. Flexibility – “HRM policies must be structured to allow maximum flexibility for the organisation, so it can respond to ever changing business needs: for example, by encouraging functional versatility in employees and by creating ‘an adaptable organisational structure with the capacity to manage innovation”.
  4. High Quality – “The notion of quality must run through everything the organisation does, ‘including the management of employees and investment in high–quality employees, which in turn will bear directly on the quality of the goods and services provided”.

        Personnel management can be traced back to second half of the nineteenth century when Victorian workers were hit hard by the industrialisation, and urbanisation of Britain. Companies such as Cadbury and Rowntree, initiated programmes for their employees managed on their behalf by ‘industrial welfare workers’, the philosophy behind these people was that in the welfare tradition, the work and responsibilities of the personnel officer was directed to the employees, rather than to the strategic concerns of the organisation and its management. The programmes included facilities such as company housing, health care, education for workers’ families and so on. The motivation for these measures included, that they reflected a wider social reform, led by political and religious groups. In the USA groups like Quakers were abolishing slavery, and striving to increase business performance by the moral and social enhancement of their employees. Moreover, as more motivation to convert to these programmes, improved health and education for the workers and their families meant that these employers would have a better reputation with employees and consumers, employees would be more committed and motivated, also there would always be great demand for a job within the company. This can be linked to Maslow’s theory on the hierarchy of needs, in which he states that workers are motivated by five different needs.

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Physiological- pay, holidays                                        (lower order need)

Safety – Health and safety measures, pensions                        (lower order need)

Social – formal and informal groups, social events                (lower order need)

Self-esteem – power, promotion                                        (higher order need)

Self-actualisation – challenging work, developing new skills        (higher order need)

These programmes and jobs would provide something for each of the lower order needs, therefore increasing motivation throughout the workforce.

         Furthermore, consumers would feel morally better as they were buying products that were helping the working classes. This could be considered very similar to the ideas linked with the popularity of fair trade products in modern day society. The ...

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