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Tony Keenan is Professor of Human Resource Management at Edinburgh Business School, Heriot-Watt University. Professor Keenan has published many papers on recruitment, managerial stress and the education, training and career development of professional eng HumanResourceManagementTony Keenan is Professor of Human Resource Management at Edinburgh Business School,Heriot-Watt University. Professor Keenan has published many papers on recruitment,managerial stress and the education, training and career development of professionalengineers. He has also acted as consultant to a number of international organisationsin these fields. He has held the posts of Dean, Director of the Business School and Headof Department.Release HM-A2-engb 1/2005 (1014)This Course text is part of the learning content for the Edinburgh Business School postgraduatecourse in this subject.In addition to this printed Course text, you should also have access to the Course website inthis subject, which will provide you with more learning content, the Profiler software, and pastexamination questions and answers.The content of this Course Text is updated from time to time, and all changes are reflected in theversion of the Text that appears on the accompanying website at www.ebsglobal.net/coursewebsites.Most updates are minor, and examination questions will avoid any new or significantly alteredmaterial for two years following publication of the relevant material on the website.You can check the version of the Course text via the version release number to be found on thefront page of the text, and compare this to the version number of the latest PDF version of the texton the website.If you are studying this Course as part of a tutored programme, you should contact your Centre forfurther information on any changes.Full terms and conditions that apply to students on any of the Edinburgh Business School coursesare available on the website www.ebsglobal.net, and should have been notified to you either byEdinburgh Business School or by the centre or regional partner through whom you purchased yourcourse. If this is not the case, please contact Edinburgh Business School at the address below:Edinburgh Business SchoolHeriot-Watt UniversityEdinburghEH14 4ASUnited KingdomTel + 44 (0) 131 451 3090Fax + 44 (0) 131 451 3002Email enquiries@ebs.hw.ac.ukWebsite www.ebsglobal.netHERIOT-WATT UNIVERSITYHumanResourceManagementProfessor Tony KeenanProfessor of Human Resource Management,Edinburgh Business SchoolFirst published in Great Britain in 1998c Tony Keenan 1998, 2003, 2005The right of Professor Tony Keenan to be identified as Author of thisWork has been asserted by him in accordance with the Copyright, Designsand Patents Act 1988.Release HM-A2-engb 1/2005 (1014)All rights reserved; no part of this publication may be reproduced, storedin a retrieval system, or transmitted in any form or by any means, electronic,mechanical, photocopying, recording, or otherwise without the prior writtenpermission of the Publishers. This book may not be lent, resold, hiredout or otherwise disposed of by way of trade in any form of binding orcover other than that in which it is published, without the prior consentof the Publishers.Typesetting and SGML/XML source management by CAPDM Ltd. (www.capdm.com)ContentsModule 1 The Origins and Nature of Human Resource Management 1/11.1 What is Human Resource Management? 1/11.2 The Origins and Evolution of HRM 1/21.3 Philosophical and Theoretical Perspectives of HRM 1/51.4 HRM as a Strategic Activity 1/71.5 HRM as an Operational Level Activity 1/91.6 Summary 1/11Module 2 Models of Human Resource Management 2/12.1 Defining Characteristics of HRM Models 2/12.2 Matching Models 2/32.3 Harvard-type Models 2/72.4 Summary 2/12Module 3 Key Themes in HRM 3/13.1 HRM Themes 3/23.2 Quality 3/23.3 Organisational Structures 3/73.4 Flexibility 3/103.5 Team Working 3/153.6 The Learning Organisation 3/183.7 Organisational Commitment 3/203.8 Culture 3/233.9 Summary 3/273.10 Strategic and Operational HRM 3/28Module 4 Analysis of Performance Requirements 4/14.1 Specifying Performance Requirements 4/24.2 Core Abilities, Skills and Motivational Characteristics 4/54.3 Trait Versus Behavioural Indicators of Performance 4/74.4 Job Analysis Techniques 4/104.5 Job Analysis and Strategic HRM 4/154.6 Competencies 4/164.7 Performance and Pay 4/214.8 Summary 4/29Module 5 Recruitment and Selection 5/15.1 Selection in Context 5/25.2 The Selection Paradigm 5/35.3 The Process of Validation 5/65.4 The Usefulness of Selection Devices 5/105.5 Selection Tools 5/105.6 Summary 5/22Human Resource Management Edinburgh Business School 5ContentsModule 6 Performance Appraisal and Performance Management 6/16.1 Determinants of Performance 6/26.2 The Performance Appraisal Process 6/36.3 Recording Appraisal Information 6/96.4 Carrying Out Appraisals 6/126.5 Performance Appraisal in Practice 6/156.6 Performance Management 6/166.7 Summary 6/18Module 7 Training and Development 7/17.1 Training, Development and Strategic HRM 7/27.2 Determining Training Needs and Priorities 7/37.3 Design of Training Programmes 7/67.4 Evaluation of Training Effectiveness 7/127.5 The Relationship between Training and Development 7/197.6 Methods of Employee Development 7/207.7 Development for Employability 7/237.8 Summary 7/23Module 8 Careers and Career Management 8/18.1 The Concept of Career Management 8/28.2 Individual Perspectives 8/28.3 Organisational Perspectives 8/98.4 Gender and Careers 8/188.5 Summary 8/22Module 9 Employee Relations 9/19.1 What is Employee Relations? 9/29.2 Philosophical Approaches to Employee Relations 9/39.3 The Legal Framework 9/69.4 Employee Relations Themes 9/79.5 Unions and Collective Representation 9/99.6 Grievance and Discipline 9/139.7 Health and Well-being 9/149.8 Techniques for Increasing Involvement at Work 9/209.9 Summary 9/24Appendix 1 Answers to Review Questions A1/1Appendix 2 Practice Final Examinations and Solutions A2/16 Edinburgh Business School Human Resource ManagementModule 1The Origins and Nature of HumanResource ManagementContents1.1 What is Human Resource Management? 1/11.2 The Origins and Evolution of HRM 1/21.2.1 Business Strategy in an Increasingly Competitive Environment 1/21.2.2 Personnel Management 1/31.2.3 Organisational Behaviour 1/51.3 Philosophical and Theoretical Perspectives of HRM 1/51.3.1 Hard Versus Soft HRM 1/51.3.2 The Nature of Work Motivation and Behaviour 1/61.3.3 Organisational Conditions and Effectiveness 1/61.4 HRM as a Strategic Activity 1/71.5 HRM as an Operational Level Activity 1/91.6 Summary 1/11Review Questions 1/11Learning ObjectivesBy the end of this module, you should be able to:• understand what is meant by human resource management (HRM).• describe the main factors which led to the emergence of HRM as a discipline.• explain how HRM is related to business strategy, organisational behaviour,and personnel management.• understand the difference between ‘hard’ and ‘soft’ HRM.• comprehend what is meant by strategic HRM.• explain what is meant by operational HRM.• describe the main activities involved in operational HRM.1.1 What is Human Resource Management?Despite the fact that ideas and techniques derived from human resource manage-ment (HRM) have been adopted in a large number of organisations world-wide,the emergence of HRM as a field is a relatively recent phenomenon whoseorigins can be traced back to the early 1980s. Indeed, because HRM is still inHuman Resource Management Edinburgh Business School 1/1Module 1 / The Origins and Nature of Human Resource Managementits formative stages, there are controversies about what exactly is meant by theterm itself, about precisely what should and should not be included within thescope of HRM, and even in some instances about the true benefits of some ofits proposed approaches and techniques for organisations and the individualsemployed in them.Because there is no unanimously agreed definition as to what actually con-stitutes HRM and precisely how it differs from previous approaches to themanagement of people in organisations, no attempt will be made to provide acomprehensive definition of the term here. However, one way to look at HRMis as a set of loosely related ideas, concepts, and techniques held together by thecommon underlying premise that, within any organisation, maximisation of theutilisation of human resources is crucial to maintain and enhance competitive-ness in a world where those who do not compete successfully simply do notsurvive. According to this view, unless organisations can make full use of thepotential of their employees, not only will they perform poorly, but their veryexistence will be threatened in today’s highly competitive world.In order to give the reader an insight into the nature of the field, we willfirst examine its evolution and development from related fields and activitiessuch as business strategy, personnel management, and organisational behaviour.We will then consider the various philosophical strands underpinning HRMthinking and practice. Finally, the distinction between strategic and operationallevel HRM activities will be discussed briefly.1.2 The Origins and Evolution of HRMOne of the most important catalysts for the emergence of HRM came fromdevelopments in strategic thinking about how businesses would need to adaptand change to survive in the eighties and nineties. This in turn led to questionsbeing asked about the role and function of traditional personnel managementapproaches to the management of people in organisations. Although HRM wasessentially meant to replace traditional personnel management, the two havemuch in common and indeed some critics of HRM have questioned the extentto which it really is fundamentally different from its predecessor. Finally, manyof the theories and findings from the closely related field of organisationalbehaviour have been utilised by HRM theorists and practitioners and theserelationships are discussed briefly below.1.2.1 Business Strategy in an Increasingly Competitive EnvironmentFrom a Western perspective, the early eighties was a time of much soul searchingabout the future competitiveness of the Western economies in general, andWestern-based companies in particular. In brief, the Far East, especially Japan,seemed to have gained significant competitive advantage over the West. Thiswas seen as a particularly threatening phenomenon because of a number of otherfactors, especially the globalisation of markets and the associated intensificationof competition world-wide. Analysis of the Japanese phenomenon seemed topoint towards better utilisation of people resources as a key factor in its success.1/2 Edinburgh Business School Human Resource ManagementModule 1 / The Origins and Nature of Human Resource ManagementIt appeared that a number of Japanese management practices such as the focus onexcellence and continual improvement, the provision of an element of autonomyand influence on decisions for employees, the creation of a culture within theorganisation of shared commitment to the success of the organisation, and soon, all served to ensure that each individual’s potential to contribute as fullyas possible to organisational success was realised. This, the argument ran, waswhat gave Japanese organisations a competitive advantage over their Westerncounterparts.Further impetus to the view that optimisation of human resources is crucialfor success came in the form of the highly influential study of high performingUS companies carried out by Peters and Waterman (1982). The message fromthis study largely reinforced that coming from students of Japanese managementpractice, since once again, the conclusion was that how people are managed isthe key to competitive advantage and organisational success.Around this time the political climate in the West, particularly in the UK andthe USA, was changing in ways which encouraged the development of newthinking about how best to manage organisations. This was the era of the so-called enterprise culture with its emphasis on individual entrepreneurial activityas the engine of economic success. In the UK in particular, the collectivismespoused by the Trade Union movement was seen as a barrier to economicprogress and a millstone around the neck of organisations trying to competeinternationally. Other key elements of the new culture included the prime placegiven to market forces and the elevation of the status and role of the consumerin the overall scheme of things. A notable change here was the extension ofthe market-led philosophy and consumerism to the provision of services inthe public sector. Thus, for example, in education students became ‘clients’ andeducational ‘products’ now had to be ‘consumer’, rather than ‘producer’ led. Allof these politically inspired ideas served to create a climate which encouragedradical new thinking about how best to harness people’s abilities and energiesin the face of the perceived imperative for organisations to restore competitiveadvantage.The general view in all of this was that, as far as people management inorganisations was concerned, radical surgery was the order of the day. Merelybolting a few new techniques on to an existing system on a piecemeal basiswould not be sufficient. Rather, a whole new philosophy of how to managepeople most effectively was required. In what has now become something ofa clich´e people were now ‘the organisation’s most important asset’. New andbetter ways to organise activities which would harness workers’ commitmentand energies would need to be developed. Human resource considerationswould need to be linked into the design and implementation of overall businessstrategy in a way that had not been the case in the past. Finally, management ofpeople could no longer be the sole prerogative of personnel specialists. It wouldnow need to be much more the responsibility of all managers.1.2.2 Personnel ManagementTraditionally, within large organisations at least, responsibility for human resourcematters lay within the personnel function. A typical list of personnel manage-Human Resource Management Edinburgh Business School 1/3Module 1 / The Origins and Nature of Human Resource Managementment functions carried out in organisations would be very wide and wouldinclude advising on activities such as: recruitment and selection, performanceappraisal, training and development, payment and pension systems, industrialrelations, and so on. These are all critically important functions which are capa-ble of being carried out at two levels. At an operational level, all of these haveto be conducted as a part of the organisation’s everyday activities. However,most also have a strategic element, in the sense that they can be integrated intothe overall objectives of the organisation. Take the example of training. At theoperational level, the personnel department would be responsible for adminis-tering and running courses. At a strategic level, a relevant issue might be thequestion of how much should be invested in training, given the direction inwhich the organisation is going and what it wants to achieve.From an HRM perspective, most, if not all, people management issues shouldbe considered from a strategic as well as an operational perspective. A keyissue which now arises is the extent to which, in the past, traditional person-nel management has operated at a strategic level. A number of writers havesuggested that the role of personnel in the past in most organisations has beenoperational and reactive, rather than pro-active and strategic (Torrington, 1995,Hendry, 1995). An example of the reactive nature of personnel management canbe seen in the field of industrial relations, an area which greatly pre-occupiedpersonnel managers in the UK in the seventies. As Hendry (1995) points out,the majority of personnel managers during that period spent most of their timefire fighting. A dispute would arise and personnel’s job would be to react to itand solve the immediate problem. What rarely emerged from personnel depart-ments was a strategy for dealing with industrial relations problems. To takeanother example, in the field of training and development, although personneldepartments frequently have large training and development budgets and areresponsible for running a wide variety of training courses, rarely does one finda coherent strategy linking training to the organisation’s underlying objectives.Again personnel’s role is seen as operational, rather than strategic. We sawabove that there was a view in the eighties that radical changes in the way inwhich human resources are managed would be needed to increase competitive-ness. Presumably, personnel managers, with their specialist knowledge, wouldbe well placed to initiate and influence these changes. Yet Evans and Cowling(1985) in a study of British personnel managers, found that they were not gen-erally initiators of major change. Nor were they given a large role in advisingon the form such changes should take.In summary, it appears that, historically, personnel management has hadonly a partial role in the management of people in organisations. It has hadan essential role at the operational level in, for example, advising on andimplementing selection systems, payment methods, training and developmentprogrammes, welfare arrangements, and a host of other activities. It has hadmuch less impact, however, at the strategic level. Thus its role has been seenas specialist and technical, rather than strategic. This is seen by many as a keydifference between HRM and personnel management and the rise in popularityof HRM can be seen as largely a response to the need for a more all-embracingapproach to the management of people in organisations.1/4 Edinburgh Business School Human Resource Management[…]… and in its attempt to embrace external2/8 Edinburgh Business School Human Resource Management Module 1The Origins and Nature of Human Resource Management Contents1.1 What is Human Resource Management? 1/11.2 The Origins and Evolution of HRM 1/21.2.1 Business Strategy in an Increasingly Competitive Environment 1/21.2.2 Personnel Management 1/31.2.3 Organisational Behaviour 1/51.3 Philosophical… restructuring’,Personnel Management, January, 14–17.Guest, D.E. (1989). ‘HRM: Implications for industrial relations’, New Perspectives in Human Resource Management, ed. Storey, J., London and New York: Routledge.Guest, D.E. (1994). ‘Organizational Psychology and Human Resource Management: towards a European approach’,European Work and Organizational Psychologist, 4, 251–270.Hendry, C. (1995). Human Resource Management: … managers.1.2.2 Personnel Management Traditionally, within large organisations at least, responsibility for human resource matters lay within the personnel function. A typical list of personnel manage- Human Resource Management Edinburgh Business School 1/3 Module 2Models of Human Resource Management Contents2.1 Defining Characteristics of HRM Models 2/12.2 Matching Models 2/32.2.1 Fombrun, Tichy… operational HRM.1.1 What is Human Resource Management? Despite the fact that ideas and techniques derived from human resource manage-ment (HRM) have been adopted in a large number of organisations world-wide,the emergence of HRM as a field is a relatively recent phenomenon whoseorigins can be traced back to the early 1980s. Indeed, because HRM is still in Human Resource Management Edinburgh Business… School Human Resource Management Module 1 / The Origins and Nature of Human Resource Management you as a personnel expert, particularly since you have the benefit of all that up-to-dateknowledge you obtained by studying for your Distance Learning MBA. I have outlinedmy ideas below. Please let me have your considered comments in due course.Clearly HRM is the key to improving our use of human resources… any detailed level?As far as customer satisfaction is concerned, a rather different example from Human Resource Management Edinburgh Business School 3/3 Module 1 / The Origins and Nature of Human Resource Management 1.2.3 Organisational BehaviourThe mission of HRM is to maximise the utilisation of human resources. A keyissue is, of course, how this is to be achieved. There are a number of approacheswhich… have certain Human Resource Management Edinburgh Business School 3/7 Module 1 / The Origins and Nature of Human Resource Management practice? Some argue that a piecemeal approach to the introduction of many ofthe innovative practices we shall be discussing in more detail later in the text isactually much more the norm than an integrated one. It is also questionable towhat extent human resource strategy… to industrialrelations would be quite different from that of personnel management. We noted above that a key element in strategy formulation was the identi-fication of the organisation’s strengths and weaknesses. Of course to do this Human Resource Management Edinburgh Business School 1/9 Module 2 / Models of Human Resource Management need for an integrated and strategic approach to HRM. They have… realisation of the vitalimportance of the need to maximise the utilisation of human resources. Thisgave a more central and strategic role to HRM in people management than hadever been the case for personnel management. Despite the past shortcomings ofpersonnel management at the strategic level, the techniques used in personnel management at the operational level have of course had to be absorbed intoHRM… they canbe used exactly as and when needed. A wide range of types of person andtasks can be outsourced, ranging from agency workers such as temporary word Human Resource Management Edinburgh Business School 3/11 Module 2 / Models of Human Resource Management Turning to the postulated HR outcomes of policy choices, there is an acknowl-edgement of the importance of cost effectiveness which is in line . Business School Human Resource Management Module 1The Origins and Nature of HumanResource ManagementContents1.1 What is Human Resource Management? 1/11.2. source management by CAPDM Ltd. (www.capdm.com)ContentsModule 1 The Origins and Nature of Human Resource Management 1/11.1 What is Human Resource Management?

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