human resource management essay

human resource management essay

The Evolution and Impact of Human Resource Management Practices

1. Introduction to Human Resource Management

In spite of increasing quantity and quality of the HRM research, a prevailing trend conforms to snapshots or to cross-sectional analyses. This paper offers a time series analysis of HRM practices. Using a unique compensation dataset of a multi-million employee company Proworker for ten years, we examine the evolution of the HRM practices of the firm and discuss the possible correlations and underlying mechanisms. Specifically, we find that the HRM practices of the company become increasingly similar to those practices commonly deemed good practices in the existing best practice research. The economic consequences of such evolutions are derived with theory and tested with empirical analysis. A few ‘Sameness and Function’ theories are found to be able to predict the empirical results quite well. Since a large number of companies share practices similar to those of the parent company with respect to type and intertemporal variation, the findings are informative for a broad set of market companies. We address the direction and the niche of best practice theories in the context of our results and distill insights for the on-going debate of HRM theory and HRM practice.

Since the birth of research on microeconomic effects of human resources in the 1960s, human resource management (HRM) practices have attracted considerable attention. This literature documents that the costs of HRM practices usually make up a large percentage of overall fixed costs while management of employee behavior is a key to the success of a business. Mismatches between HRM and business strategy have been observed. A growing collection of empirical research provides quantitative evidence of positive effects of HRM practices on firm performance. The beginning of HRM as an important business topic dates back to the start of the 1990s. Since the 2000s, the trend has dominated. In this literature, a large number of HRM practices have been reported to have significant contributions, including employee relations, training, selection, communications, compensation, job design, and performance appraisal, to name a few.

2. Key Functions and Strategies in Human Resource Management

2.2. Human Resource Management Functions There are five basic functions responsible for major specialized HRM tasks generally carried out by a company’s human resource (HR) specialists. They span all companies and organizations, and are carried out in functional areas across all organizations, be they commercial, not-for-profit or governmental enterprises. Concern for people in organizations and a concern about how the company should be managed, particularly so as to create the outcomes desired, have together been long established within management literature, disciplines, and practices. These concerns are evident in a broad array of managerial practices, which over a period of time has gradually included, and finally been completely subsumed within a multifunctional, specialized area known as the esteemed field of Human Resource Management (HRM). Now, as a distinguished entity, HRM is no longer specialized to, or was limited as, a military or personnel department, a discipline completely separate from other management disciplines.

2.1. Introduction As noted earlier, these traditionally important tasks are still accounted for in contemporary HRM practice, but the nature and emphasis of their inclusion have changed significantly. In addition, however, a range of other HRM activities currently exist which were historically not regarded as being the province of personnel management and are now well instituted as essential HRM tasks. These developments have occurred particularly because of changes in the work environment (such as continued technological advancements, shifts in both employee and employer values, and globalization), shifts in the organization’s business strategy and accompanying movement towards restructuring and other forms of more sophisticated HR strategies and practices. This chapter introduces major key HRM functions and the strategies that HR specialists are responsible for, abroad because they require exposures to various dynamic workings, and demonstrate an increasingly important role in any business organization.

3. The Role of Technology in Modern HR Practices

Together with the increase in technology, there has also been a change in the way of organizing the work. If traditionally the work was performed in rooms, now this work is being performed almost anywhere with the help of computers. The evolution of technology combined with changes in employee work values has been the main driver in making human resources management more strategic. The involvement of HR managers in strategic decision-making issues, such as the culture of the organization and the training of the employees, has resulted in discussing the changes that occur in organizations, especially those derived from technological advances.

Technology has had a significant role in the development of human resource management practices. Automation and computerization have led to changes in the traditional HR tasks and roles, which are now being introduced in a more technological approach. The part of the job that is left over has been made more complex. The administrative processes, such as payroll, selection tests, and safety programs, have been largely automated. More sophisticated computer systems have been created to handle management information systems.

4. Challenges and Future Trends in Human Resource Management

A further challenge is the need for HRM to balance the tension between upholding a common corporate culture and valuing the differences in each unique business unit. Given the scarcity of talented managers, HRM must be all about developing employees and providing them with a variety of human resource tools. And on top of it all, HRM has been confronted with increasingly frequent changes in legislation, which affects the function. As business schools provide more opportunities for prospective students, the strategic impact of adding the correct skills and competencies would be invaluable to future managers in HRM.

Human resource professionals are facing a more complex and challenging environment than ever before, as a result of several trends, including globalization, technology, demographics and workforce diversity, and improved economic performance. One other significant change is a shift from traditional command and control organization structures to individual unit accountability. To survive in this new climate, HRM has to be strategically focused, and more time and resources devoted to key responsibilities. In the past, a lack of understanding about what HRM could and should do, as well as insufficient staffing levels and funds, have combined to make it difficult for HRM to play a strategic role in the organization.