Never-ending changes in the business arena keep impacting on Human Resource management. In an era of dynamic environments, Human Resources management urges the ability to adapt and cope with all these fluctuations in employee and consumer behaviour, as a critical formula for survival. The historical development of Personnel management evolving to Human resource Management is still subject to debate and controversy. In this paper we will look at definitions from various authors and accordingly, try to analyse the evolution of the traditional Personnel Management to modern Human resource management.
We discuss the validity of Human resource Management coming to be as a result of an increasing emphasis on effective and efficient employee relations or simply a re-titling and a re-conceptualisation to capture current trends. The paper then, explores why Human resource Management and corporate strategy should be aligned. It is clear that in this continuous changing era, organizations have been forced to reshape the structure and role of Human resources as they are positively correlated to bottom line profits, thus creating the necessity of matching Human resource Management with the organization’s corporate strategy.
Thirdly, hospitality strategic issues of Human Resource Management, such as Organizational behaviour, play an essential role in managing people. Unlike physical resources, Human resources manages people who form the major asset of an organization. As the word people suggests the character and qualities, which make someone different from others, and this is the genuine reason why Human Resource Management must be able to cope to the needs and demands of these individuals if success is to be achieved. The concept of the psychological contract is another significant aspect of the relationship between the individual and the organization.
This non-written contract covers a range of rights and responsibilities, duties and expectations from both, the employer and employee. Definitions of Personnel and Human Resource Management In recent years there has been a shift in the use of the term Personnel Management to the term Human Resource Management, but are these two terms similar in nature or do they truly differ in the end results they aim to achieve? Various authors have different opinions on this matter. According to Guest (1989), compares with Personnel Management, Human Resource Management is more concerned with a long-term rather than a short-term perspective.
In other words, in the recruiting process, Human Resource managers strictly bear in mind the adaptability and exploitation of the individuals they recruit, so that an organization can deploy them and develop them to their full potential in order to maximise employee performance, thus resulting in a long term investment for the organization. Guest also identifies that Human Resource Management is based on a psychological contract founded on commitment rather than compliance, and this will be further analysed later on. Within every organization there must exist some kind of control.
While PM seems to value external control, HRM seeks self-control of their employees. This relates strongly to the psychological contract based on high commitment, and thus creating a sense of need for self-control, rather than external control. A Unitarian perspective where the organization is seen as a whole harmonious team, in which there are existing common interests and a common source of loyalty is what HRM searches for, as opposed to, PM which joys a pluralistic perspective where the organization is viewed as one in which there are powerful competing sub-groups with their own objectives and interests.
Finally, compared with PM, HRM seeks an organic rather than a bureaucratic structure; integration with line management rather that specialisation and last but not least important, HRM strives to reach maximum utilization of staff through motivation, empowerment and other HRM issues, rather than deeming staff as a cost. Crainer (1998), for example refers to the change in PM to HRM as: ” The emerging role of Human Resource Management is radically different from that of the past, when it dealt with bureaucracy of employing people and little else.
From being a caring role, HRM has been re-aligned as a strategic role, focussed on the business needs and strategic plans of the organization”. In other words, HRM seeks for best practice in recruiting the right people so that organizational goals can be achieved through this human resource. Whilst PM focussed mainly in the caring of employees as human beings, HRM plays a strategic role where this human resource aids to deal with the business needs, hence achieving organizational goals though employees.
So it can be said that whilst PM only or mainly had a caring role, HRM has a wider role, in not only caring for employees but also “using” these content employees who are being taken care of to contribute to achieve organizational goals with their own personal development and deployment. It can be argued that PM is simply an elevation to HRM. According to Cumming (1993), for example, argues that HRM is just a new term to what most good Personnel managers have been already practising.
It might be possible that then this more clarified term of HRM, can be used for those managers who were not practising properly their role, and even as a re-enforcement to those managers who have been already practising. All in all, re-enforcing a practice that wishes to be kept and improved for a longer term needs to be maintained not occasionally but on a daily basis. Either way in this matter, it can be said, that HRM is a re-enforcement or an introduction to an improved way to manage such an important resource.
According to Mills (2002), in the 1960’s and 1970’s many new federal laws in the United States affected directly the relationship between employer and employee. These laws included the Civil Rights Act of 1964, the Occupational Health and Safety Act of 1970 and the Employee Retirement Income Security Act of 1974 (ERISA). It was then where organizations relied heavily on Personnel Managers to help them follow these Federal regulations regarding hiring, firing and worker Safety. As in any organization, complying with the law is one essential matter.
From this change to a more strict regulation, it can be said that Personnel Management had to be reshaped to be able to adapt to these new regulations. New regulations implied that when hiring employees, this process should be treated in careful manner, due to the consequences of, in the near future having to fire them. This lead to a more strategic way of hiring, taking into consideration the potential development of the employees and not only their immediate and temporary labour.
It is now how we can appreciate how organizations carefully choose who is able to adapt and more importantly contribute to the overall performance of the organization, like Four Seasons does. It is not only how high staff turnover leads to increased costs in the Human resource department but also the need to comply with law, what may also lead to the evolution of PM to HRM where there is an existing ideal of not only hiring and firing but to hire adequately and retain and develop employees to their maximum potential in order to reach a greater productivity.
This idea of law influencing the evolvement of PM to HRM is re-enforced by Prof. Xiao Zhuoji, (2002) a leading Chinese economist who thinks that after the accession to the World Trade Organization, China not only needed to adjust its governmental functions and law-making orientation but also to formulate policies recognizing the value that HRM can bring to an organization. This value, he said, is more than just the functional role of PM.