The enhancing significant function of HRM is represented in the shift of the personnel management function from one of the focusing on employee welfare to one of people managing in a manner, which individual & organizational objectives and giving employees with extrinsic & intrinsic rewards.
Therefore, recently Human Resource Management (HRM) previously refers to as personnel management, deals with formal system for the management of the people within the organization.
Workforce of many well-known business organizations are tried to shift into a source of competitive advantage.
Stages of Shifting from Personnel Management to HRM
First, HRM previously reacted piece-meal to issues as they came. Effective HRM tries to connect HRM problems to the overall strategy of the organization with the most efficient HRM practices & policies integrated into such corporate strategies & policies to change or reinforce the culture of the organization.
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Integration is required in two aspects, first in Integrating HRM problems in the strategic plans of the organization and securing the inclusion & acceptance of a HRM consideration.
The HRM policies in respect of different operations should be consistent internally. They should also show core values of the organization and must also be consistent with the business strategies.
Second, developing strong cultures is a manner of encouraging certain organizational objectives, in that a “strong culture” is purposed at combining employees through a shared group of managerially sanctioned values that assume identification of employer and employee interests.
However, there can be tension between the requirement to adapt to altered conditions and a strong organizational culture and to be flexible, especially in the increasingly competitive and quickly altering environment in which employers have to function today.
Quick alteration desired by the market is sometimes hard in an organization with a strong culture.
Third, in effective HRM, the attitude that people are a variable cost is replaced by the consideration that people are a resource and that as social capital can be established and can give to competitive advantage.
Progressively, it is accepted that competitive advantage is acquired through trained, well-educated, committed and motivated employees at all levels.
Training & development are, and also will be, the central pillar of HRM, now this acknowledgement is almost universal.
Fourth, the consideration that the interests of management and employees or shareholders are divergent and confliction is providing path to the consideration that this requirement not essential be so.
Commonality of interests are identified and promoted and which are sought by effective HRM which is practiced by an organization.
Important examples are training which increases the security of the employment and increasing earning capacity for employees while at the same time enhancing the value of employee to the objectives of business organization of good performance and productivity.
Pay systems which enhance earnings without important labor cost enhancement and which at the same time encourage increased performance levels.
Through two-way communication, objective setting is done which develops united objectives & goals and which gives intrinsic rewards to the employee through a participatory process.
Fifth, controlled information flow combined with top-down communication to maintain power within control of management providing path to sharing of knowledge & information.
This alteration helps the building of commitment and trust and makes knowledge more productive. In effective HRM control from the top is being replaced by enhancing by policies & employee participation, which foster flexibility & commitment that assist organizations to alter when essential.
Shift of Personnel Management to HRM Took Place in Three Steps
Following are the three steps in which personnel management is shifted to HRM.
- Records & Administration
- Accountability Regulations
- Competitive Advantage
Records & Administration
In the first step, the main tasks which were accomplished by the personnel department, were scheduling vacations, planning company picnics, planning retirement parties and enrolling workers for health-care coverage.
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These concerns contain address reduced employee loyalty, how to manage layoffs, make a well trained increasingly motivated workforce that can manage & enhance diverse workforce, provide higher productivity & quality and contain healthcare cost.
Accountability Regulations
The main framework of regulations and rules began emerging in the organization during this step. In 1970s, the duty of HR manager was to maintain their organizations out of court and in conformation with the enhancing figure of regulations governing the work place.
In 1980s, HR manager had to mention staffing costs associated acquisitions and mergers and downsizing.
The economic problems associated to a progressively competitive& global workplace characterize the 1990s.
Competitive Advantage
The purpose of this shift process is from simply securing compliance to the more ambitious one of winning commitment.
Therefore, the employee resource gets worth investing in and development & training thus presume an enhancing profile.
These initiatives may be are even predicted upon and are linked with an inclination to shift from a joint preference to the management of the workforce to an individualistic one.
Flexibility is seen by the management accordingly and searches to reward differential performance in a differential manner. Communications of managerial aspirations and goals takes on a whole new significance.
The pre-occupation of HRM with using the human resource to accomplish strategic management goals and the integration of HRM into strategic management distinguishes or separates HRM from the traditional HRM function.
HRM adopts a usually unitary perspective and seeks to eliminate the mediation role. Rather than problem solving& mediation.
It emphasizes planning & strategy so that program of corporate culture, packaging, remuneration, and team building and management development for core employees provides employee cooperation, while peripheral employees are maintained at arm’s length.
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