Models of Human Resource Management

1
Models of Human Resource Management

• LRS 500
• November 3, 2004

2
Outline

• Your experiences with HR
• Historical roots of HR in the U.S.
• Current HR roles and activities
• Strategic HR management
• Evaluation of the strategic approach

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Think about Human Resources in your Company

• What roles and activities best characterize what
  the HR function does in your company?
• What are the general perceptions of HR at your
  company? Are these mostly positive or mostly
  negative or a mix?
• What would make the HR function more valuable in
  your company?

4
Historical Roots of HR

• Forces that determine the fate of HR practices
• Labor markets
• Government policy and regulation of employment
• Unions
• Societal norms regarding fair employment

Based on Jacoby, S. 2003. A century of human
resource management. In Kaufman, Beaumont,
Helfgott (eds.) Industrial relations to human
resources and beyond. Armonk, NY M.E. Sharpe,
pp. 147-171
5
Historical Roots of HR

• 19th Century
• Drive system of foreman
• Three developments that reduced foreman power
• Scientific management focus on efficiency
• Welfare work
• Vocational guidance
• First personnel functions develop

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Historical Roots of HR

• WWI Period and after (up to 1929)
• Tight labor markets, labor unrest, strikes,
  government regulation of employment
• Developments
• Personnel departments formed to deal with
  external forces
• Welfare capitalism by leading firms
• Personnel managers support line managers

7
Historical Roots of HR

• Turbulent Years (1929-1945)
• Stock market crash, high unemployment, strong
  union growth, and more government regulation
• Developments
• Personnel departments decimated in wake of
  depression union growth
• Main role labor relations to deal with unions to
  prevent strikes and deal with government mandates
• Codification of employment policy and fringe
  benefit expansion due to organizing efforts.

8
Historical Roots of HR

• Golden Years (1950s 60s)
• Strong unions, but slow growth, more government
  regulation of employment, middle management
  growth, finance function emphasized, and societal
  expectation of fair employment practices
• Developments
• Personnel departments grow and begin to
  incorporate behavioral science knowledge
  (attitude surveys, motivation, morale,
  psychological testing)
• Split roles labor relations to deal with unions
  and employee relations to deal with other
  employment issues

9
Historical Roots of HR

• 1970s
• Stock market drop of 1969, growth of non-union
  firms, proliferation of civil rights laws, worker
  dissatisfaction mounts from routinized work,
  global pressures
• Developments
• Personnel departments grow in importance
• Roles are in change and development, union
  avoidance, employee job enrichment and
  empowerment
• Split roles labor relations less prestigious
  employee relations became human resource
  management, which begins to take on more
  strategic focus

10
Historical Roots of HR

• 1980s 1990s
• Deregulation of industries, loose labor markets
  with periods of high unemployment, weak unions,
  growth of professional jobs and contraction of
  middle management, intense global competition,
  technological advances, weakening government
  mandates, focus on quarterly results due to
  activist shareholders
• Developments
• Outsourcing of HR activities
• Line managers start quality and high performance
  practices without HR
• To survive, HR takes hard approach and tries to
  quantify its value managerialist focus

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Human Resources Roles,Past and Present

• Clerk/administrator (operational roles)
• Controller of employee costs through efficient
  systems
• Legal and ethical watchdog (Sarbanes-Oxley)
• Behavioral scientist
• Strategic partner with line managers planning
  and implementation
• Change agent and broker

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Differentiated Roles of HR
Expert Resource Pool Analysis
Benchmarking Planning Design Support rollout of
programs
Business Partners (Consultants)
Generalists Support line Implementation Manage
client Expectations Manage projects
Central Service Center Transactions Design and
implement support systems Automation
From Kesler, G.C., Law, J.A. 1998.
Implementing major change in the HR
Organization The lessons of five companies.
Human Resource Planning, pp.26-38.
13
Recent Directions in HR

• Competency modeling and job analysis
• Job and organization fit in selection
• Building high performance work systems
• Building organizational learning and
  effectiveness
• Arbitration and mediation to resolve conflicts
• Building employee empowerment and voice
• Work/life balancing

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Strategic Approach of HR

• 1. The management of people is integrated with
  the strategic plans of the firm
• 2. Helps company deal with environmental forces
  and internal problems in order to achieve long
  term goals
• 3. HR functions are integrated with financial,
  marketing, operations, RD functions
• 4. Proactive stance rather than reactive problem
  solving
• 5. Focus is on change, learning, and capability
  improvement

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STRATEGIC PLANNING PROCESS
Analysis of External Environment
Analysis of Internal Environment
Threats and Opportunities
Strengths and Weaknesses
Mission and Goals
Corporate, Business, and Functional Level Strategy
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Evaluation of the strategic approach

• What does the research show?
• Huselid (1995) studied 968 firms in 35
  industries.
• Results
• Strategic HR in the form of HPWP reduced turnover
  by 7 and increased sales by 27,000 (per
  employee per year).
• Profitability rose by more than 4000 per
  employee, and market value rose by more than
  18,000 per employee

Huselid, M.A. 1995. The impact of human
resource management practices on turnover,
productivity, and corporate financial
performance. Academy of Management Journal,
38(3), 635-672
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Evaluation of the strategic approach

• Lawler Mohrman (2003) Surveyed 150 firms in
  2001 to determine if HR was becoming a strategic
  partner, and if so, in what areas it was making
  contributions and if it was effective
• Results
• Only 41 indicated that HR was a strategic
  partner
• Where it is a strategic partner, HR does more
  planning, organizational design, organizational
  development, and employee development, and is
  viewed as more effective
• Completely integrated HRIS systems allow more
  strategic partnering
• Other features transactional work is
  outsourced line-HR manager teams work together
  rotation of people in and out of HR area HR is
  headed by trained and experienced HR person

Lawler, E.E., Mohrman, S.A. (2003). HR as a
strategic partner What does it take to make it
happen? Human Resource Planning, 26(3), 15-29.
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Evaluation of the strategic approach

• What did Wright et al. (2001) find?
• Research questions?
• Sample?
• Results?
• Conclusions?

19
Critique of Strategic Approach

• What does Richard Peterson have to say about the
  focus on strategic HRM?
• What is Sara Rynes response to Petersons
  criticism?
• What do you think?