Thatcherism and Reaganomics, it “could not help but look more desirable than personnel management” (Hope-Hailey et al 1997: 5). The attractiveness of the theory of managing personnel led to a proliferation of HRM language. Nonetheless, it remains to be seen if there is more to HRM than only a new and shining rhetoric. A number of authors stress the difficulties of identifying clear differences between personnel management and HRM, and maintain that the most obvious change is a “re-labelling process” (Legge 1989: 20).
Torrington (1989: 64) agrees that “a change of label” is obvious, though one cannot be sure that the content of differentiates to any extent. However, the new terminology may at least rid personnel management from its unfavourable welfare image and other “negative connotations” (Sisson 1990: 1) and thus, save the ailing function of managing personnel from marginalisation. Keenoy (1990: 8) stresses another aspect: he sees personnel management caught in ambiguity as it is torn by managing the tension between organisational demands and needs of employees.
The clear strategic orientation of HRM provides an “escape route from ambiguity”, because it has “sharply refocused the attention on the organisational loyalties of the personnel function. ” Thus, its full organisational legitimacy may be regained. Accordingly, some HR academics maintain that new labels on old bottles may have their uses, even if it is only for marketing purposes (Armstrong 1987: 35; Guest 1989: 48). Furthermore, a valuable contribution of HRM is to direct the attention to regarding people as the key resource of organisations and lending the management of personnel increased importance (Armstrong 1987: 31).
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Differences The outstanding strategic character of HRM is claimed to be one of the differences in emphasis between personnel and HR management. While conventional personnel management is criticised for its only loose link with business objectives, the formulation of HRM policies should explicitly take place at a strategic level within the organisation (Storey 1989: 6). This implies that the integration of HRM strategy with business strategy is not a pure specialist task within the HR department, but should be driven by senior management – in the best case at board level.
Similarly, there is more emphasis in HRM approaches on the importance of line managers. HRM models clearly highlight the line management’s responsibility for the management and development of the human resources, especially with regard to their contribution to bottom line results (Legge 1989: 27; Keenoy 1990: 8). This goes together with the generally more strategic and “demand -driven” (Torrington 1989: 61) approach of (‘hard’) HRM, which focuses on organisational needs and, finally, profit at the bottom line.
A major element of (‘soft’) HRM approaches is the involvement of senior managers in the creation of organisational culture and values. The culture should be designed for gaining the employees’ commitment. Commitment is an eminent goal of HRM, as it is seen as a crucial precondition for high performance (Guest 1989: 49). Besides high trust and commitment, another part of organisational culture as promoted by HRM is a more direct form of communication. HRM advocates a turn from collectivism to individualism (Sisson 1990: 5).
It neglects collective bargaining and unions, and promotes individual relations with direct forms of communication between management and employees (Storey 1989: 2; Keenoy 1990: 3). Storey and Sisson speak of an ongoing replacement of “industrial relations” by “employee relations. ” (1989: 170) While personnel management often finds itself in an intermediate position between organisational demands and individual needs, (‘soft’) HRM models maintain a coinciding relationship of organisational and individual interests. Read about Evolution of Job Design
HRM policies and practices that are desirable for the employee are also beneficial to the achievement of organisational goals. Moreover, individuals can only contribute to organisational success effectively when their personal needs are met on the job. Therefore, individual development – including the development of managerial staff (Legge 1989: 27) – and satisfaction are emphasised in HRM. Consequently, training and other means of development gain more importance and managerial attention than in personnel management (Torrington 1989: 66).
At the same time, (‘soft’) HRM models grant more autonomy and self-responsibility to individuals (Torrington 1989: 56), because a higher degree of autonomy is regarded as prerequisite for the organisation’s adaptability to change, i. e. , the organisation’s flexibility (Guest 1989: 49). ‘ The historical development and changing context in which they operate ‘The evolution of Personnel Management has occurred in an unplanned, uneven and random way. It was mostly forced by environmental changes in society, businesses, industry rather than a rational, incremental process. (Hendry 1991).
Starting from the point of the mature phase of Personnel Management in the 1960s and 1970s where we have the introduction of various services into organizations and management development, training and manpower planning. We observe the existence of selection, training, salary administration and appraisal (MBO). Then in the 1980s the concept of HRM emerged from US, and personnel was seen more like business oriented. With the declining of trade unions also Industrial relations became less significant and HRM starts to be considered as a more specialized tool for the needs of an organization and its employees.
Finally in the 1990s as the interest is more onto team working, empowerment, quality, development, flexibility, efficiency and effectiveness, the role of HRM became more important. Now terms as culture management, performance and reward systems or management development have been given great importance along with the notion of being strategic in all aspects. The major sources of changes are the Environmental firstly, taking the shape of economic and political change where we had the rise of enterprise economy and market led economies.
Moreover, concern for environment and society widely has appeared. Then, the social trend towards individualism substituting collectivism and the arising customer expectations so as to the requirements being higher than ever before. The recession of the 1990s have made investment and expansion much more difficult and risky than before in the business environment, and changing demographics since the 80s impacted as problems into the offer of various skilled employees.
New work patterns have emerged where more pat-time workers and permanent employees are used nowadays, and with the rise of competition from Europe, Japan or multinational corporations has made it difficult to cope correctly with employees. Finally we must note the various and fast technological advancements which take place and the shortening of product life cycles that lead to short range strategies and increased flexibility.
The impact of all those factors was and still is great onto people, the manpower employed by a firm, which have to learn to cope with change as it takes the form of role ambiguity and role conflict and leads to stress. (Peters 1988). Managers have now to learn to reshape their exercising of power in every form so as to co-operate with and assist their colleagues to better themselves and act properly for the good of the enterprise. That was the time where HUMAN RESOURCE MANAGEMENT was needed to take place as a more specialized function in the organization to handle employee matters and generally manpower planning.
The purpose of each job and role had to be specified narrowly and accurately. Performance and results are clearly identified with employee actions and extend to motivation and rewards. Inner-Qualities from managers are needed such as a leader, an analyst, a motivator; a colleague, a planner, and a reinforcer; so as to cope cross-departmentally with every employee, and weaken in turn ambiguity and confusion. Straight forward lines of action are needed from the start of a business and HRM is the answer to all of these issues. ‘ 
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