Human Resource Management
 1 Summary
Human Resource Management (HRM) is the basis of all management activity. Management is about effective utilisation of the organisation’s people to make things happen in a productive and efficient way, so that the organisation prospers and the people thrive. The range of businesses is very diverse. Hotels and hospitals, restaurants and coffee shops, supermarkets and corner shops, travel agencies and airlines, banks and newspapers, schools and universities, prison and churches are all businesses in the sense that they have an overall corporate mission to deliver objectives, and these objectives have to be achieved within financial restrictions.
 2 Why should you use it?
Managing people is a complicated field of activity, which requires the application of a wide range of knowledge and skills. It is a well known fact that committed employees are key factors in a company’s development and economic success. In contrast, poorly motivated employees and misunderstandings between people may undermine all the efforts for the development of the company.
 3 Why has it been developed and who developed it?
Torrington, Hall and Taylor (2005) proposed the following evolutionary stages for the development of human resource management:
1)Social justice. The origin of personnel management lies in the 19th Century, deriving from the work of social reformers such as Lord Shaftesbury and Robert Owen. Their criticism of the free enterprise system and the hardship created by the exploitation of workers by factory owners led to the appointment of the first personnel managers. In the late 19th and early 20th centuries, some large employers began to appoint welfare officers to manage new initiatives designed to make life less harsh for their employees. The results were higher productivity, improved retention of the workforce and a bigger pool of applicants for each job. The more obvious welfare initiatives promoted by employers today include employee assistance schemes, childcare facilities and health-screening programmes.
2)Human bureaucracy. The second phase marked the beginning of a move away from a sole focus on welfare towards meeting various other organisational objectives. The fostering of social relationships in the workplace and employee morale thus became equally important objectives for personnel managers seeking to raise productivity levels.
3)Negotiated consent. In the period of full employment following the Second World War, labour became a scarce resource. Personnel managers required expertise in bargaining skills in order to run the new collective bodies, such as joint consultation committees, joint production committees and suggestion schemes, which had been set up to accommodate the new realities. Governments encouraged the appointment of personnel officers and established the first specialist courses for them in universities.
4)Organisation. The late 1960s saw a switch in focus among personnel specialists, away from dealing principally with the rank-and-file employee on behalf of management, towards dealing with management itself and the integration of managerial activities. This phase was characterised by the development of career ladders and opportunities within organisations for personal growth. The latter remains a concern of personnel managers today, with a significant proportion of time and resources being devoted to the recruitment, development and retention of an elite core of people with specialist expertise on whom the business depends for its future. Personnel managers developed techniques of manpower or workforce planning. This is basically a quantitative activity, boosted by the advent of information technology, which involves forecasting the likely need for employees with different skills in the future.
5)Human resource management. Changes in the labour market and government economic policies led to a new realistic and constructive approach to the philosophy of human resource management being put forward in 1979 (Torrington, Chapman) (after Mumford (1972) and McCarthy and Ellis (1973)).
This was originally defined in the following manner: “Personnel management is most realistically seen as a series of activities enabling working man and his employing organisation to reach agreement about the nature and objectives of the employment relationship between them, and then to fulfill those agreements” (Torrington, Chapman 1979). A revised definition was proposed in 2002: “Human resource management is a series of activities which: first enables working people and the organisation which uses their skills to agree about the objectives and nature of their working relationship and, secondly, ensures that the agreement is fulfilled” (Torrington, Hall, Taylor 2002).
 4 When should you use it?
Those organisations whose managers succeed in practising effective people skills when carrying out their primary business functions are most likely to engender satisfied employees and repeat customers – both of which are essential to sustaining a competitive advantage. For example, it has been clearly stated for some time that human resource management is critical for success in the tourism industry (Go, Monachello, Baum 1996). Human Resource Management provides a significant competitive advantage in prospective labour market trends and changing employment regulations. Although smaller businesses may not need, or cannot afford human resource managers, they may be called upon to use external consultants or advisers, as there is still a human resource management dimension to their managers' activities.
 5 How does it work?
The term "human resource management" is not easy to define since it is commonly used in two different ways. On the one hand (1) it is used generically to describe the body of management activities that has long been labelled „personnel amangement“. On the other hand (2), the term is also widely used to denote a particular approach to the management of people which is clearly different from "personnel management" and suggests a distinctive philosophy towards carrying out people-oriented organisational activities in order to serve the modern business more effectively than "traditional" personnel management.
1.The generic term of human resource management. The role of the human resource management function is explained by identifying the key objectives to be achieved. There are four human resource management activity objectives: staffing, performance, change-management and administration objectives.
2.A distinctive approach to the management of people:
- it is a general management activity - it is a particular way of carrying out the range of human resource activities - it is resource centered (personnel management is essentially workforce centered) - it is directed mainly at management needs for human resources - it is focused on demand rather than supply - it emphasises greater planning, monitoring and control.
In fact, there is little difference between the two definitions of human resource management, but there are some differences that are considered to be important. In the second definition, human resource management concentrates more on what is done to managers than what is done by managers to to their employees; it provides a more proactive role for line managers and holds top management responsible for managing culture.
The two different approaches taken by the personnel management and human resource management are compared below. Personnel management and human resource management
Personnel management Human resource management Time and planning perspective Short term, reactive, ad hoc, marginal Long term, proactive, strategies, integrated Psychological contract Compliance Commitment Control systems External controls Self-control Employee relations perspective Pluralist, collective, low trust Unitarist, individual, high trust Preferred structures/systems Bureaucratic/mechanistic, centralised, formal, defined roles Organic, devolved, flexible roles Roles Specialist/professional Largely integrated into line management Evaluation cirteria Cost minimalisation Maximum utilisation (human asset accounting) Source: Torrington, Hall, Taylor 2005:11.
Human resource management is frequently seen in terms of a three-part cycle, which contains all functional responsibilities that managers with responsibility for this role are required to address (Baum 2006:24).
This human resource cycle comprises the following three parts:
1)Attract an effective workforce
labour markets human resource planning recruitment and selection flexible approaches to employment workforce retention
2)Develop an effective workforce
performance and appraisal education, training and development career development and succession planning
3)Maintain an effective workforce
rewards – formal and informal welfare teamwork and empowerment employee involvement and employee relations grievance and discipline equality and diversity
 6 Related topics/tools
Balanced Scorecard experience curve SWOT-Analysis Motivation research Service standards Feedback system Work performance Maslow's Hierarchy of Needs Organizational culture Planning Controlling Leadership Self-control Trusting Training Teamwork
 7 Links/sources
Baum, T. Human Resource Management for tourism, Hospitality and Leisure. An international perspective. Australia: Thomson Learning, 2006.
Go, F.M., Monachello, M.L., Baum, T. Human Resource Management in the Hospitality Industry. New York: John Wiley & Sons, Inc, 1996.
Tooman, H., Müristaja, H. Human Resource Management in Tourism, 2007.
Torrington, D.P, Hall, L.A, Taylor, S. Human Resource Management (5th ed.). Harlow: Pearson Education, 2002.
Torrington, D.P, Hall, L.A, Taylor, S. Human Resource Management (6th ed.). UK: FT Prentice Hall, 2005.
Torrington, D.P., Chapman, J.B. Personnel Management. Hemel Hemstead: Prentice Hall, 1979.