CPU COLLEGE OF BUSINESS AND TECHNOLOGY

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The practice of Human resource management: A rapid literature review

Abstract
Purpose – This study is inspired by one of the current interesting issue on human resource
management and the way people work together to be productive and flexible enough to meet
new challenges. The study based on the approach to people management taken by line managers
and a positive organization culture supported by strong, value-based leadership from senior
management.
Design/methodology/approach– The study draws upon earlier research undertaken by various
authors on the subject of Human resource management, mainly on the importance of showing
that the application of good HR practices contributes to better organization performance. The
manuscript is intended on an attempt to provide a better understanding on the different concepts
and necessity of HR practices based on literature review.
Finding- Literature indicates that there has been a semantic in many organizations HR is challenged
by the multiple roles it is required to fulfill – administrator, strategic partner, challenger, champion of
good people management, guardian of organization values, conscience of the organization and
governor. Achieving the right balance is dependent on HR investing in its own capacity and actively
listening to the needs and concerns of managers and staff. Ultimately, there is no one best practice
model of HR. The function within each organization needs to build its approach based on a deep and
evidence based understanding of the mission and culture of their organization.
Research limitations/implications- The motivation has been to prove that HR rather than being a
cost to the organization ‘adds value’. Most of the research in this area is based on the premise that
good HR practices enhance the motivation and commitment of staff which in turn impacts positively
on productivity and performance. However, according to some commentators this has resulted in an
imbalance across the many roles HR is expected to perform with a greater emphasis on ‘being
strategic and a ‘business partner’ at the expense of being a ‘people partner’ that actively engages with
and listens to the needs and concerns of managers and employees in general.
Practical implications- The study would possibly provide insights about the concepts for HR
and provide concerned parties with necessary information to better understand. Against a
backdrop of increased pressure on firms because of globalization and technological developments,
academics from a number of disciplines may get to consider people and how they are employed and
managed in organizations from a new perspective.
Key terms: Human Resource, Management, employee, organization

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 1.INTRODUCTION

Human resource management (HRM) emerged as a concept in the 1980s. Rebranding personnel
management quickly became popular, but many organizations had little awareness of the theory
behind the concept.

This report aims to provide a short and accessible overview of both the evolution of human resource
management (HRM) and current research in the area. The report explains the origins of HRM,
examines issues in relation to HR functions, HR roles and HR strategies and addresses the ongoing
debate around how HR impacts on organization performance.

The report concludes by emphasizing that good HR practices are not enough in themselves to improve
employee commitment or build productivity in the organization. Organization culture, which is
strongly influenced by the approach to leadership and management in the organization, is equally
important. To be relevant HR needs to appreciate the varied and many roles it is required to fill and
reflect on and develop its own capacity in respect of these.

2. What is human resource management?

Human Resource Management (HRM, or sometimes abbreviated to HR) is concerned with all aspects
of how people are employed and managed in organizations. The term HRM has largely taken over
from that of personnel management, which took over from previous terminology including labor or
welfare management. In the 1980s, against a backdrop of economic recession and increased pressures
on firms because of globalization and the accelerated pace of change brought about by technological
developments, a number of academics began to think about people in organizations from a different
perspective. A combination of this thinking evolved into what became known as human resource
management.

The question of how to achieve competitive advantage is the dominant concern of strategic
management. In the 1980s this came to particular prominence through the research of Michael Porter.
A related economic theory, the resource-based view, which re-emerged at this time, holds that
competitive advantage is achieved if a firm’s resources are valuable, rare and costly to imitate. Both
these theories impacted on thinking in respect of people management in organizations.

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Firstly, approaches and initiatives in respect of people management should be consistent with the
overall strategy of the organization (Fombrun at al, 1984) and secondly, that all resources, but in
particular human resources, contribute to the unique character of organizations and can therefore
support competitive advantage. This led to a recognition of people and investment in them as a source
of ‘human capital advantage’ (Boxall and Purcell, 2016) rather than a cost to be minimized as much as
possible.

The other side of the HRM concept emerged from organization behavior theory. Organization
behavior (OB) is the study of how organizations function and how people behave in them. In other
words, the interface between human behavior, organization and how this impacts on the performance
of the organization. Areas of concern for HRM, including organization design, organization culture
and leadership all have their roots in OB. However, most critical to the original concept of HRM are
the areas of employee commitment and motivation, more recently described under the ‘catch-all’ term
of employee engagement.

There are many definitions of human resource management of varying degrees of complexity. Two of
the more meaningful are:
Human resource management is a strategic, integrated and coherent approach to the employment,
development and well-being of the people working in organizations (Armstrong, 2016:7)
Human resource management is the process through which management builds the workforce and
tries to create the human performances that the organization needs. (Boxall and Purcell, 2016:7)

When the term HRM first became popular there was criticism of it as it referred to people as
resources, as if they were any other factor of production to be leveraged into economic value.
However, Boxall and Purcell (2016:4) regard this as a misunderstanding of the term. They suggest
that it is not people that are referred to as ‘human resources’, rather their knowledge, skills and
energies which they use in their daily roles: ‘People are not human resources. On the contrary, people
are independent agents who possess human resources, which are the talents they can deploy and
develop at work and which they take with them when they leave the organization’ (authors’
emphases). However, the authors add that referring to people as human resources is ‘a mistake made
in a variety of textbooks and dictionaries’.

HRM has also been widely criticized for reasons beyond its terminology. The main reservations are
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 THE PRACTICE OF HUMAN RESOURCE MANAGEMENT

summed up by Armstrong and Taylor (2015:8) as ‘HRM promises more than it delivers and its
morality is suspect’. In respect of the first point HRM has been variously (and contradictorily)
described as overly prescriptive, uncertain and imprecise, and simplistic. In respect of the second
point, it has been claimed that HR overemphasizes business needs and that it is manipulative in
seeking to shape human behavior at work.

However, much of the criticism has subsided. According to Armstrong (2016:5) this is because ‘HRM
is no longer governed by the original philosophy – if it ever was’. According to Storey (2007:6), HRM
‘in its generic, broad and popular sense simply refers to the system of people management’ that
pertains in an organization. Elsewhere Armstrong comments (2016:10), ‘HRM is here to stay, even if
it is applied diversely or only used as a label to describe traditional personnel management practices…
HRM has largely become something that organizations do rather than an aspiration or a philosophy,
and the term is generally in use as a way of describing the process of managing people’.
The goals of HRM:
Drawing on the original theory, Armstrong and Taylor (2015) identify the goals of HRM as to:
 Support the organization in achieving its objectives by developing and implementing HR
strategies that are integrated with business strategy

 Contribute to the development of a high-performance culture

 Ensure that the organization has the talented, skilled and engaged people it needs

 Create a positive employment relationship between management and employees and a climate
of mutual trust

 Encourage the application of an ethical approach to people management.

3. Strategic HRM

Since the 1990s textbooks and commentators have increasingly referred to strategic HRM (sometimes
SHRM) rather than simply HRM. This is a cause of much confusion, particularly as one of the key
characteristics of HRM is that it is strategic, that is that HR policies and practices are informed by the
overall objectives of the organization. The terms are widely used interchangeably and to a large extent
differences between the two are conceptual and of academic concern.

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SHRM has been described by Boxall (1996) as the interface between HRM and strategic
management. In other words, it describes how the future development of the organization and the
achievement of its objectives can be supported by its HR policies and practices. Having a skilled,
capable and motivated workforce is perceived as fundamental to competitive advantage and SHRM is
oriented towards recruiting, supporting and developing high- quality employees.

Integration and alignment are fundamental characteristics of SHRM. In organizations practicing

SHRM, people strategies are informed by business strategy (described in the HR literature as ‘vertical
fit’). In addition, HR policies should be integrated or consistent with each other (‘horizontal fit’ or
sometimes described as ‘bundling’ HR practices). For example, if your organization structure is based
on team-based working, as is frequently the case in the public sector or voluntary organizations,
individual pay for performance would not represent good horizontal fit.

The further objective of SHRM is to provide a sense of direction. Consistent with its origins in
strategic management, planning is central to SHRM. Management identifies a range of employee-
related priorities and objectives which will contribute towards the achievement of the objectives of the
organization. An action plan is also required, that is, the means by which it is proposed the objectives
will be met.

Being ‘strategic’

Reilly (2012) claims that ‘HR has been too loose in defining the meaning of strategic or it has not
bothered at all’. He continues that whether this is due to an assumption that its meaning is self-evident
or a belief that strategic HR is an illusion, its effect has certainly been harmful to HR. He concludes
that for HR the word ‘strategic’ is something of a code word for being aligned with the interests of the
organization. He further adds that business leaders are frequently bemused by HR professionals for
the manner in which they over-complicate HR. For them being ‘strategic’, beyond doing the basics
well, means solving people-related business problems and building future organizational capability.

However, there has also been a backlash against HR ‘being strategic’, with some commentators
suggesting that it’s an over-used term and Alvesson (2009:52) arguing that one ‘sometimes gets the
impression that there is very little ‘non-strategic’ HRM going on’. In discussing the reality of running
a HR function one HR manager commented that, ‘My credibility depends on running an extremely

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efficient and cost-effective administrative machine. If I don’t get that right, and consistently, then you
can forget about any big ideas’ (Caldwell, 2004:203). There is also increasingly a sense that HR has
become too identified with the needs of the business at the expense of promoting the interests of
employees. According to Reilly (2014) there is a need to talk less about being a ‘business partner’ and
more about ‘people partners’.

4. THE HR FUNCTION

Above a certain size most organizations put in place a HR function. The basic objective of the
function is to provide the advice and services that support organizations and their managers to get
things done through people. The HR function may encompass one person or a whole department. A
survey by Incomes Data Services in the UK (2010) indicated a median ratio of HR staff to employees
of 61:1 in small and medium sized organizations, ranging to 100:1 in larger organizations. Armstrong
and Taylor (2015:42) notes that ‘the role of HR professionals varies widely according to the extent to
which they are generalist (e.g. HR director, HR manager, HR officer) or specialist (e.g. head of
learning and development, head of talent management, head of reward), the level at which they work
(strategic, executive or administrative), the needs of the organization, the view of senior management
about their contribution, the context within which they work and their own capabilities’.

The manner in which HR is delivered within organizations has been the subject of much debate over
the past twenty years. HR management is not a single homogenous occupation; rather, it involves a
variety of roles and activities that differ from one organization to another or even at different levels
within the same organization. Based on a survey of organizations, Crail (2006) suggests that in an
organization of 1,200 people a typical HR team might consist of a director, reporting to the chief
executive, a number of professionally qualified managers with responsibility either for specific areas
of the organization or specific functions such as recruitment or employee relations, assisted by a
number of more junior HR officers and assistants.

Over the past two decades the research of David Ulrich of Michigan University, has been particularly
influential in respect of the HR function. In 1997 in his book Human Resource Champions he set out
the roles of the HR function, describing these as strategic partner, administrative expert, and employee
champion and change agent. Ulrich is also regarded as instrumental to formulating a model of HR
delivery sometimes referred to as ‘the three-legged stool model’ whereby HR is delivered through
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three major areas – centers of expertise, for example training and development or recruitment, shared
service centers to handle the administrative and record keeping side of HR, and HR/strategic business
partners to work with managers across the organization helping them to achieve their objectives.

Although the model has attracted a great deal of attention, research by the CIPD (2007) found that less
than 20 per cent of organizations had implemented the model in full. Difficulties with the model tend
to derive from the resulting fragmentation of HR, poor communication and coordination within the
function and ‘boundary management’ issues, for example when it comes to sorting out transactional
tasks from the work of centers of expertise (Gratton, 2003; Hird et al, 2010). There have also been
major challenges with the notion of HR business partners; chief amongst these is that in many
organizations they are simply HR generalists aligned in some way to a business unit rather than its
strategic people partners.

The other very prominent development in how HR is delivered over recent decades is the involvement
of line managers in the delivery of HR. According to Purcell et al (2003) good HR practice is not only
about having a range of best-practice policies in place. What makes the difference is how these
policies and practices are implemented by line managers. The research of Purcell and his colleagues in
particular emphasizes the contribution to improved organization performance of line managers in
‘bringing HR policies to life’.

5. HR SYSTEMS AND STRATEGIES

The HR system consists of strategies, policies and procedures. Many organizations have multiple
discrete HR practices (e.g. employee well-being, employee development, pay and reward etc.) with no
explicit or discernible links between them. When organizations seek to improve their people
management arrangements they will typically consider developing a HR Strategy. A HR strategy sets
out what the organization wants to do about its human resource management policies and how
delivering on these will help to achieve the overall objectives of the organization.

In some organizations a HR strategy may exist without necessarily being deliberate or even written
down. It may simply exist in the collective minds of the relevant people. However, obviously this is
something of a precarious situation and most organizations evolve to a situation whereby their strategy
is somewhat more deliberate and planned, while also being responsive to changing circumstances and

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the environment.

Armstrong (2016) identifies three types of HR strategy:

 Broad statements of intent with regard to HR in the organisation. Sometimes referred to as an

‘umbrella strategy’. The core components of these may include items such as building a strong
performance culture, developing leadership capability, attracting and retaining talent, developing
HR systems
 HR strategies based around specific models of HR such as ‘High-performance management’
 HR strategies in respect of specific areas, for example a talent management or learning and
development strategy.
Because all organizations are different, all HR strategies are different. There is no such thing as a
standard strategy. However, Armstrong and Taylor (2015) provide some general criteria with regard
to HR strategies:
 It satisfies organization needs
 It is researched and evidence-based, not just wishful thinking
 It can be turned into actionable initiatives
 Its components are coherent and integrated
 It takes account of all stakeholders in the organization and doesn’t reflect only the views of, for
example, senior management or the HR function.
Reilly (2012) further emphasizes the importance of a HR strategy being informed by both external
factors and the values of the organization, and of ongoing monitoring and review.

According to Armstrong and Taylor (2015:26), ‘the main argument for articulating HR strategies is
that unless you know where you are going, you will not know how to get there or when you have
arrived’. HR strategies articulate what the organization’s overall convictions are in respect of its
people and provide a framework for future decision making and action. However, it’s important for
those developing HR strategies to remind themselves of Fombrun et al’s (1984) long-standing dictum
that organizations and managers should perform well in the present to succeed in the future. In other
words, ‘there is no great strategy, only great execution’ (Gratton, 2000:30).

6. HR AND PERFORMANCE

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An ongoing challenge for the HR profession has been the need to prove that good HR practice, in
addition to being something that it is good to do, contribute to better organization performance. This is
necessary to prove that HR rather than representing a cost to the organization ‘adds value’. Thinking
in this regard is based on the premise that good HR practices enhance the motivation and commitment
of staff which in turn impacts positively on productivity and performance.

However, it has proven difficult to prove this definitively. As Ulrich (1997:304) commented ‘HR
practices seem to matter; intuition says it is so; survey findings confirm it. However direct
relationships between performance and attention to HR practices is often fuzzy’. Guest (2011:11) is
even blunter: ‘After hundreds of research studies we are still in no position to assert with any
confidence that good HRM has an impact on organization performance’. So while research can show
an empirical association between HR practices and organization performance, it is difficult to know
what factors or practices are particularly important and what HR outcomes are leading to the better
organization performance.

In order to unlock what is sometimes referred to as ‘the black box phenomenon’, the CIPD
commissioned major quantitative research across UK companies (Purcell et al, 2003). The findings
identified six key work practices that jointly applied were shown to improve performance. The
research emphasizes particularly that pay was not regarded as a primary motivating factor in any of
the organizations in the study, all of which were trying to be progressive in respect of HR. The six key
work practices in descending order of importance are:

Career development and opportunities for advancement

Career progression and development are essential motivation and retention tools. However, career
progression does not have to include promotion. Employees value greater autonomy, varied work, and
opportunities to acquire new skills. Two considerations for organizations are the importance of
development opportunities for all staff, even those that remain at the same level and the need to
develop an appropriate and honest message in respect of development opportunities.

Training opportunities
Training is the use of systematic and planned instruction and development activities to promote
learning. Training opportunities enhance staff commitment and, if based on an objective assessment of
need, result in a more efficient and effective organization. ‘On the job’ coaching or ‘stretch’
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assignments are frequently more useful to staff compared to formal training.

Job influence and challenge

Job design is an area that deeply influences people’s experience of work. Where people have some
influence over how they do their job, and where they find their job demanding and challenging, they
are much more likely to have job satisfaction. Techniques that support good job design include, job
rotation, job enlargement, job enrichment and self-managed teams.

Involvement and communication

The opportunity to contribute to decisions and have a sense of involvement is valued by most
employees. Much of the knowledge required by organizations to be more productive is in employees’
heads, so accessing it makes good business sense. Where managers encourage involvement it is
associated with higher levels of satisfaction with management in organizations. Effective
communication is a further vital part of the process. The good intentions of leaders can be ruined and
mutual trust damaged by managers who do not pass on messages, who distort the message they are
entrusted with, or who do not feed-back what they have been told by staff. A range of mechanisms are
used by organizations to promote involvement and participation by staff, for example employee
opinion surveys, suggestions schemes, town hall meetings, partnership committees and works
councils.

Performance management and appraisal processes

In employee opinion surveys, tolerance for underperformance frequently emerges as a major source of
dissatisfaction among employees. However, in order to be able to identify under-performance,
organizations need to clarify for both managers and staff what constitutes an acceptable level of
performance. In addition, performance reviews should focus far more on performance planning and
improvement than on retrospective appraisal.

A further important finding of the research by Purcell and his colleagues is the importance of
implementing HR policies effectively. The authors note that employees experience more negative
attitudes towards poorly applied HR policies than they do over the absence of a particular practice,
even those that might be regarded as essential, for example performance appraisal.

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Work-life balance
Work-life balance emerges as an important area influencing employee attitudes towards their
employer. It is important to consider work-life balance for all employees not just those with young
children and the type of flexibility that people want. It is often not so much reduced hours that
employees indicate they would benefit from but the possibility of varying hours at short notice to deal
with whatever pressures they have outside of work.

However, consistent with other research, the research by Purcell and his colleagues found that good
HR practices are not enough. What makes a bigger difference is ‘the way people work together to be
productive and flexible enough to meet new challenges’ (Purcell et al, 2003: 32). This is facilitated by
two key ingredients – organization culture and the attitudes of line managers. Meaningful and easily
understood organization values help to unite an organization around a shared mission, while the way
in which managers implement policies and exercise leadership is positively related to positive
employee attitudes in respect of the range of issues that support increased motivation and productivity.
As the authors conclude (Purcell et al, 2003: 33):

Their managerial behavior - in implementing HR policies, in showing leadership by involving staff

and responding to their suggestions, and in controlling quality, timekeeping and absence – makes a
real difference to employees’ attitudes. It’s not something that can be legislated for because it’s a
behavior rather than a duty. It’s strongly linked to the way that the line managers are themselves
managed and to the wider values and culture of the organization.

7. CONCLUSIONS:

As a description of people management activities in organizations the term HRM is here to stay, even
if it is applied diversely or used only as a label to describe traditional personnel practices.

However, for organizations trying to implement a more authentic version of HRM this report tries to
send the message that good HR practices are not enough. Research around the link between HR and
organization performance has shown that a positive approach to people management, in its very
broadest sense, is necessary. Transformational or value-based leadership from the top is essential in
that it helps to create a positive organization culture. So too are the actions and attitudes of line
managers who are responsible for bringing ‘HR policies to life’.

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The other central idea of this study is the importance of HR reviewing its own capacity and
contribution to the organization. In this regard, considering the original theoretical underpinnings of
HRM has considerable merit because HR has been variously criticized for being either overly focused
on organization strategy or swamped by administrative tasks, at the expense of listening to those it
serves and developing a deep knowledge of the organization. Reflecting on the origins of HR, both in
strategic management and organization behavior, and the consequent goals of HR as originally
envisaged, which encompass being both a ‘business partner’ and a ‘people partner’, serves as a
reminder to HR of the multiple roles it is required to fulfill.

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