What is HRM

HRM Assignment

How can HRM become a source of competitive advantage for organisations?

HRM and Organisational Behaviour

Submitted By:Contents

1.0Abstract.

2.0 Introduction.

3.0 What is HRM.

4.0 What is Competitive Advantage.

5.0 Competitive Advantage through Leadership.

6.0 Learning and Development.

7.0 Organisational Behaviour and Culture.

8.0 Work Motivation & Psychological Contract.

9.0 Line Managers IN HRM.

10.0 Innovations in HRM.

11.0 Conclusion.

Bibliography

12.0 1.0Abstract.As Ireland continues to deal with its financial crisis, organisations must continue to operate in these unstable times. In order for organisations to survive they are forced to restructure as markets contract. As with any business human capital is a major expense and one which is swiftly reviewed when savings are required. The commencement of right-sizing delayering or recession fatigue process have become a major part of the Human Resource Management (HRM) roles as jobs are shed around the country on a daily bases.

As emigration figures show 1000 people leaving Ireland on a weekly bases. An exodus of talent is being lost by organisations around the country. In order for organisations to be in a position to benefit as and when the market changes it is essential that the correct personnel are retained. With the lost of human capital comes breaking of HRM patterns trust between employee and employer as security of contract becomes unclear.

2.0Introduction

The following report / literature review will aim to analyse the effectiveness of HRM in organisations and shall endeavor to examine if HRM can be deemed as a source of competitive advantage.

The subsequent sections will seek to review various literature available on HRM, in relation to Competitive Advantange and Organisational behaviour in an effort to investigate the substance of the title.

There are many features which contribute to human capital as a source of competitive advantage. In Jassim 2002 he cites Pfeffer which states there are sixteen practices of competitive advantage through people.

Six aspects of HRM make up the content of this report. (1) Competitive Advantage through Leadership; (2) Learning and Development; (3) Organisation Behavior and Culture; (4) Work Motivation & Psychological Contract; (5) Line Managers IN HRM; (6) Innovation in HRM.

But First of all, we will briefly interpret what exactly is HRM and what it entails and secondly what is, competitive advantage and the methods available to achieving it.

3.0What is HRM.

On review of various literature the term HRM has numerous definitions.

In Williams (2008) he describes the HRM as the conduit for acquiring and retaining the necessary workforce through job satisfaction, security, compensation, training programs, appropriate and frequent measurement of the workforce, and finally providing flexibility with respect to the values of different generations of workers.

Torrington et al (2009) cites Armstrongs definition of HRM as a strategic, integrated and coherent approach to the employment, development and well being of the people working in organisations.

How organisations manage their personnel is key to their productivity. Discontented employees will result in high turn over levels and will impact on the organisations performance.

To maintain a high level of organization efficiency will require that the organisations strategic HRM strategy be developed to match or underpin that of the business strategy.

In Torrington et al (2009) cites Legge approach to further divide HRM into hard and soft concepts.

With the hard concept focusing on utilitarian instrumentalism this perceives that human capital as an expense of doing business or a factor in the production process, rather than a competitive advantage.

Legge continues with HRM soft concept developmental humanism which identifies that human capital can be a unique source of sustainable competitive advantage because an organisation management process and culture is unique hard to imitate or substitute. This identifies employees skill, adaptability and commitment as valuable.

Torrington cites Schuler and Jackson and their work which illustrate that there is a linkage between competitive strategy, HR practices and performance.

By hiring and retaining talented personnel and supporting their development by contributions within an organisation, through a means of progressive HRM strategic policy the literature gives credence that sustained competitive advantage can be achieved.

4.0What is Competitive Advantage

Armstong, M. (2009) cites Barney and the description of competitive advantage, Which is the ability of an organisation to implement a value creating strategy which is not being replicated at that time by its competitors, this definition continues that an organisation can be said to have achieved a sustainable competitive advantage if the competitors are unable to replicate this strategy.

A method of producing a sustained competitive advantage is Innovation Strategy which focuses on the development of products or services and aims to diversify them from what its competitors is providing. A good example of this type of strategy would be Apple Corporation which identifies its success can be contributed to its work culture and "Work Hard Play Hard" ethic. Apple strives in its passion for new products, through a work environment which is relaxed and casual, but is very strong relating to its commitment to deadlines.

Another means of achieving competitive advantage is through a Quality Enhancement Strategies which primarily focuses on developing the product or services by changing the production process so workers are more involved and more flexible. Areas which have adapted this type of mechanism include Hospitals and Educational sectors.

A third mechanism which can provide competitive advantage is Cost reduction strategy which is an attempt to gain the advantage by being the lowest cost producer. An example of this would be Ryanair which provides it product / services with little regard to HRM.

In each strategy an alignment of the organisations HRM strategy must be adapted which will hire the right personnel and who will motivate the human resource capital. The correct HRM strategy and practices will retain these key personnel and develop the resources and in doing so will create a competitive advantage.

5.0Competitive Advantage through Leadership.

As with any change to organization behaviour with out the backing from management at the top level the likelihood of the amendments being successfull is reduced.

Essential to the success of any organisation is its employees. In order to sustain any competitive advantage gained through its human capital it must strive to strengthen and develop its personnel in order to develop individuals to their full potential. .

Schuler and MacMillan (1984) explains, employees depend on their managers, and organisation on their managers for success. They state that Many researchers believe that for organisations to maintain a competitive advantage, they must focus on enhancing performance through a process of continual learning and effective leadership skills at every level which will act to motivate individuals, teams and human networks to achieve peak performance.

6.0Learning and Development.

Were previously short falls in the skill set of an organisation, presented management with the task of identifying the training needs required. In recent times the strategy of learning and development has shifted. As a result the focus has changed and the focus is now towards identifying what the learning needs are for each employee. By taking this approach the ownership of the development passes to the individual. In Torrington et al (2008) the learning is described as the result of learning to be changed or new behaviour resulting from new or reinterpreted knowledge that has been derived from an external or internal experience.

As organizations set up to deal with change it is key to create a company-wide learning philosophy involving all the organisational members and were individual learning encompasses organizational learning.

Torrington continues by identifying the importance off providing activities to improve learning motivation. E.g. helping with employees to recognize their development needs and rewarding for the skill development undertaken. Methods of learning programmes include formal development, on-the-job development i.e. coaching and mentoring, peer relationships and self-development.

Were e-learning appeared to be a low cost method, which attracted extensive interest on its initial emergence. CIPD (2003) reported e-learning as one of the most significant changes in training over the last five years. The enthusiasm toward e-learning has been steadily reducing as organisations recognize that their employees may be unwilling to use this method. The need to motivate learning has been identified as critical to its success as well as the support system available to aid the technique. The result is now that e-learning has become part of a blended learning experience in many organisations.

Key to the success of learning and development is the evaluation process. This represents a means to ascertain and measure the level of learning achieved by the individual as well as the value for money aspect to the organisation. Although in the literature the process is presented as difficult to obtain its true value. A technique used is the Questionnaire, which provides a method of immediate feed back from persons attending the learning experience. Torrington explains the feedback from such a method can be limited and misdirected on to the ability of the tutor and visual aids used and not what has been learnt. Torrington cites Kilpartrick as the most well referenced approach for evaluation under four levels. (1) reaction level; (2) learning level (has the learning level been met); (3) behaviour (changes to the individual back in the occupation); (4) results and impact on the bottom line (impact of training on performance).

7.0Organisation Behavior and Culture.The following section will aim to investigate what is organisational culture and how it influences people and their experiences within organization life. ODonnell & Boyle 2008 cites Schein definition of Organisation culture as the system of shared beliefs and values that develops within an organisation and guides the behaviour of its members.ODonnell & Boyle also cite Rosette & Watson and their clarification that there is increasing evidence that values within an organisation directly impacts on individual behavior in ways that support the organisations goals and objectives.The term organisational culture is among one of the less tangible aspects of organisational life. Organisation culture is however seen as a major topic in HRM.

Rosette & Watson continues emphasising that an important trend in managerial thinking in recent decades has been one of encouraging managers to try to create strong organisational cultures.On review of the blocks which forms this organisational culture, ODonnell & Boyle review Deal and Kennedy and their three important levels or layers of culture analysis in organisations.

Observable culture: "the way we do things around here" e.g What is passed on when training new members. Includes unique stories, corporate rituals that has been successful for the organization.

Shared values: implies the group is a whole and Identifies the values as a means of linking people together and provide motivation for the members of the culture. All may not agree with these values but are exposed to them and have been stated of their importance.

Common assumptions: taken-for-granted truths that corporate members share as a result of their joint experience.

On review of the characteristics of Organisational culture four key aspects are recognized pervasiveness or homogeneity; strength; replication and functions.

In Deal and Kennedy a theme in organisation culture states strong cultures are associated with superior organisational performance. Harpden-Turner argues that culture is strong particularly when people need reassurance and certainty.

In Replication, as an organization grow the culture may change but short term strategies and tactics used will condition new staff to the organisational culture. This is provided the New staff will fit in. Hall (1987) explains how members that have absorbed the culture pass it on to newcomers learn the ropes and that this is a positive event for newcomers as an induction helps to settle in and establish what is expected, this will also help reduce any anxieties associated with starting a new job in unfamiliar surroundings

In Robbins, (2003) he reviews the term Organisational culture and defines it as a system of specific values and the communal importance of organization members which separates them from other organisations.From the literature is clear that the perspective is that cultural differences can have a major impact on the performance of organisations and the quality of work life experienced by their personnel.

8.0Work Motivation & Psychological Contract.

The expectations employees have about their employment role and what the organisation is prepared to give them in return for their service are the concepts, which are dealt with in the psychological contract.

Motivation among employees is essential, without enthusiastic and committed human resources little will be achieved. A related concept to motivation is the psychological contract between employee and employer. This contract can influence motivation, commitment, job satisfaction, job involvement and performance. The concept was originally expressed by Schein (1980) referring to the three types of contract which exists, the formal, the informal and the psychological contract.

In Rollinson (2008) The types of contracts are described. The formal contract deals with salary for the employment exchange and is underpinned by the legal form of contract. The informal contract deals with the social aspects (give and take) with in an organisation i.e how colleagues should be treated or time keeping and working late and how this is dealt with etc. Both of the above contracts and what is generally entitled with in each is known to both parties and can be discussed.

The contents of the third the psychological contract are rarely discussed as consist of unvoiced expectations and obligations. Employees have individual expectation to be treated with courtesy and fairness and if this happens will probably feel an obligation to be fair and loyal to the organisation in return. The awareness of this concept and the existence of a psychological contract is seldom addressed by employees or given any attention until expectations are not being met.

Each of the contracts effect the relationship between employee and the organisation.

There is no relationship with the formal contract and its acceptance. The informal aids the formal contract whilst allowing for slight mutual deviations between the parties to accommodate each other. But if each feel the psychological contract is unacceptable, unequal or favours one party the relationship can be damaged and the reaction to the imbalanced will be replicated by the effected party which will lead ultimately to a reduction in integration.

In Julie Beardwell, Tim Claydon (2007) the types of psychological contracts are analysed further with three types identified, Coercive, Calculative and Co-operative Contracts. Coercive contracts are contracts were employees feel there are forced to contribute efforts in excess of the rewards received. This will lead to motivation being low or non existent or could even be negative.

The calculative contracts are excepted by the individual this deals with what is expected to be done as part of the employees position in exchange for the rewards i.e pay or status. Most common in organisations, motivation in this type of psychological contract can only be increased if the rewards to the individual are improved through pay or promotion. Failure by the organisation to address these issues in exchange for an increase in effort will result in the psychological contract reverting to a coercive one and motivation may become negative.

Co-operative contracts are for individuals that wish to become personally identified with the organisations and their motivation is to further their achievements through work goals. A co-operative contract is entered into voluntarily by the individual. This type of employee is normally part of the decision making. With high motivation and achievement.

One factor which is key to employees personnel satisfaction and well being is motivation. Motivation occurs when the psychological contract is fulfilled by both sides. The employee agrees to work well and the organisation rewards or provides satisfaction to the em

ployee. In Rollinson (2008) motivation is defined as an individuals perception to pursue a particular course of action in order to achieve a specific outcome and to choose to pursue this outcome with a degree of vigour and persistence. Motivation in as described by Rollinson is used to explain why a individual acts in a certain way. There are three components of behaviour that have an impact on performance. Direction of behaviour which is influenced by what an individual wants to do. Intensity which is how hard the individual will strive to go in that direction and persistence which is the individuals willingness to stay with the direction when obstacles are encountered.

Rollinson cited Mitchell (1982) and his argument that motivation is based on a number of assumptions. Individual phenomenon - peoples uniqueness which reflects there behaviour, Intentional which is the choice of the individual to behave in this mannor and a multifaceted concept which involves, factors that arouse people to action, choice of behaviour and their persistence and intensity of their behaviour.

9.0Line Managers IN HRM

As organisations identify that successful Strategies must include an alignment with HRM. Tasks which once were the responsibility of the HR managers can be reallocated to manager outside the HR section. Line managers can take ownership of the HR activities this enables the HR specialist to act as a coach and strategic partner and ultimately will allow HR to deal with strategic matters rather than the operational issues day to day. In Torrington et al (2008) the advantage of this devolution of HR management identifies that integrated approach will strengthen relationship between the employee and his or her manager resulting in positive management approach to employee performance.

Torrington cites Hutchinson and Purcell (2004) research which identifies the importance of the line manager position. The results found in this research was that Line manager behaviour is the most important factor and can influence employees job satisfaction, discretion and overall how individuals go about their jobs.

In Torrington (1998) research into the difficulties of devolving HR activities to line managers where uncovered, the research found that although the practices were encouraged within the organisation, the activities would ultimately revert back to the HR specialist as line managers simulated lack of interest or skill set to deal with the associated issues that occurred.

Torrington cites Caldwell (2004) research found manager resisted taking ownership and equally HR specialist wanted to retain control and HR policy. The HR specialist part of the study identified their concerns about to much devolution could result in their role being devalued and this could ultimately effect HR consistence and employees well being.

10.0Innovations in HRM

Wolfe 2003 cited Damanpour expression of how innovation is not always acknowledged within an organisation as it depends upon an appreciation of the attributes of a focal innovation.

Wolfe 2003 reviewed a baseball book titled Money Ball an innovation in HRM was identified using Sabermetrics.

Wolfe examines the steps for the use of sabermetrics and identifies the similarities to the approach taken in HRM in any organisation. First the organisation develops a competitive strategy, which should be consistent over time and provides a means to differentiate the organisation from its competitors whiles entailing suitable strategic decisions in response to industry and local conditions.

Secondly the organisation must hire personnel to execute their strategy. The hiring decisions entails identifying relevant knowledges, skills, and abilities (KSAs) and the developing measures that validly assess those characteristics.

Sabermetrics focused on different KSAs than were normally considered and provided a means on assessing these characteristics. It was these common features which attracted attention from the HRM community. This method of analyzing the information, gave organisations the ability to further examining different aspects of its personnel, this in turn would provide a means to develop human capital strategies that would result in competitive advantage.

11.0Conclusion.

As the competitive advantage once achieved through technology has been attained across the business world, there are fewer areas where organisations can create a sustained competitive advantage outside their human capital. But selection of the correct personnel has constantly added risk to the human capital acquisition and turner over of staff, added to the expense of the organisation. Therefore HRM must be aligned with the organisation strategic policy in areas of human capital acquisition, employee retention, motivation and satisfaction, job security, salaries and benefits and training development scheme if a competitive advantage is to be created through HRM.

As with any sector of an organisation if the appropriate leverage is not seen to accompany guiding principle set out no change will be forthcoming. In order for HRM to succeed and in doing so, achieve a competitive advantage. HRM must be at the core of the work force management and the personnel employed within the HR sector should have the appropriate skills and education levels and armed with the appropriate autonomy to fulfill their objectives.

On review of the Literature it is evident that the reputation of HRM part of organisations has inherited negative perception at management level. Key to a sustained competitive advantage is that the correct personnel are retained or hired. With downturn comes the opportunity for acquiring exceptional personnel with the necessary levels of experience, qualifications and skills set to position an organisation to benefit when market growth returns.

Essential to any organisation is the commitment of its human capital. In order to develop individuals it is critical that an organisation can provide a culture which will aid individuals to perform at the highest level and will drive and encourage this level of sustained performance. It is the authors option with the correct HRM procedures in place an organisation will as the title suggests become a source of competitive advantage.

Word Count 348912.0Bibliography

Books

Armstong, M. (2009). Armstrong's handbook of human resource management.Beard Well Julie & Claydon Tim Human resource management: a contemporary approachGreer Charles R. 2003. Strategic Human Resource Management Second Edition

Rollinson Derek 2008 Organisational Behaviour and Analysis: An Integrated ApproachTorrington Derek, Hall Laura and Taylor Stephen. 2008 Human Resource Management. Seventh editionSparrow, P.R. (ed.) (2009). Handbook of International Human resource Management:Journals

ODonnell Orla & Boyle Richard 2008 Understanding and Managing Organisational Culture. CPMR Discussion Paper 40.

Rahim K. Jassim 2002 Competitive Advantage Through the Employees.

Schuler Randall S. and MacMillan Ian C. Gaining Competitive Advantage through Human Resource Management PracticesWolfe Richard,. Wright Patrick M, And Smart Dennis L. Radical 2003 HRM Innovation And Competitive Advantage: The Moneyball StoryStroh Linda K. And Caligiuri Paula M. Strategic Human Resources: A New Source

For Competitive Advantage In The Global Arena.

0DT015/Y1 1Les Murphy