What is Human Resource Management (HRM)?
HRM has been defined in a variety of ways. Some adopt a process view of a
functional approach to HRM defining it in terms of its major functions and processes.
HRM is the systematic planning, development, and control of a network of
interrelated processes affecting and involving all members of the organization (French,
2003, p. 7).
Human resource management (HRM) is the process of acquiring, training, appraising,
and compensating employees, and attending to their labor relations, health and safety,
and fairness concerns (Dessier, 2005, p., 4)
More recent definitions of HRM highlight the deliverables and outcomes of HRM's
efforts and focus on its strategic role in the organization. This perspective focuses on
HRM as an enabler or facilitator assisting line managers in realizing their
organizations' strategies and objectives.
Human resource management (HRM) is designing management systems to ensure that
human talent is used effectively and efficiently to accomplish organizational goals
(Mathis & Jackson, 2008, p. 4).
The major functions of HRM in most organizations are listed and briefly escribed
below. More detailed descriptions of HR's functions and roles are provided in each of
the succeeding chapters of this book.
1. Talent Acquisition includes workforce planning and employment (recruitment and
selection). Workforce planning focuses on assessing the organization's human
resource needs in the light of organizational goals and changing conditions and
developing the programs required to meet these resource needs. Employment includes
recruitment and selection of individuals to fill vacant positions. Recruitment refers to
activities designed to attract qualified applicants to the organization. Selection is the
process of choosing the best qualified applicants to fill open positions in the
organization.
2. Performance Management refers to the process of ensuring that employees'
performance contributes to realizing the organization's goals and objectives. HRM
enables managers in the organization to monitor the performance of their employees
and ensures that appropriate tools are made available by managers to employees so
that the latter can meet expected levels of performance.
3. Employee Training and Management Development - Employee training refers
to the process of providing employees with specific knowledge and skills they need to
perform in their jobs. Management development represents activities designed to
improve employee's capabilities beyond those required by their current jobs.
4. Compensation management- refers to the financial returns that employees receive
in exchange for services that they provide to an organization
5. benefits management- refers to the process by which employee benefits generally
compensation outside of basic pay, are designed and gives to employees in
accordance with legal as well organizational requirements.
6. Employee Relations Management is the process of ensuring effective
management of all interactions and relations between the organization and its
employees. As Ulrich (1997) says, the role of HR as employee champion or advocate
is dealing with day-to-day problems, needs and concerns of employees, promoting
their well-being; and building their capabilities and commitment. This term usually
refers to roles of HR practitioners in organizations that do not have labor unions.
7. Labor Management Relations refers to the functions of HR that pertain to the
management of employees' terms and conditions of employment. HR practitioners are
usually involved in interpreting and ensuring compliance with the provisions of the
collective bargaining agreement between labor and management. They provide
counsel and advice to management concerning employee grievances and discipline
issues. They can also represent the organization in collective bargaining.
Strategic view of HRM
The strategic human resource management (SHRM) school of thought defines SHRM
as a pattern of planned human resource deployments and activities intended to enable
an organization to achieve its goals (Wright et al., 1994).
This definition assumes the (a) alignment of HRM activities with an organization's
goals, strategies and objectives; (b) effective interrelations among the HRM functions,
instead of each function standing alone like silos; and (c) use of the systems approach
in demonstrating the strategic role of HRM, as shown in the HRM model in Figure 1.
Strategic human resource management (SHRM) evolved as a result of attempts to
understand and identify possible connections between HR programs and an
organization's strategies and business performance (Walker, 1978; Devanna, Frombun,
& Tichy, 1984). One view was that of Lado and Wilson who theorized that the
systems of HR practices with all the complementarities and interdependencies
contribute to organizational effectiveness and because of these.
Another explanation for HR's contribution to an organization's success in creating and
maintaining competitive advantage came from theorists who expounded the resourcebased view (RBV) of SHRM. The RBV of strategy is that the strategic capability of a
firm depends on its resource capability, especially its distinctive resources. This view
of the firm emphasizes that... "Distinctive human resource practices help to create
unique competences that differentiate products and services and, in turn, drive
competitiveness." Resource-based strategy theorists such as Barney (1991) argue that
sustained competitive advantage stems from the acquisition and effective use of
bundles of distinctive resources that competitors cannot imitate (Armstrong & Baron,
2005, p. 31).
These theorists pointed out that HRM can contribute to the effective management of
human resources within a firm and this could lead to sustained competitive advantage
(Huselid, 1995; Pfeffer & Velga, 1999 in Whetten & Cameron, 2011). The following
are specific characteristics of the "internal resource of a firm" that are instrumental in
contributing to the organization's business performance (Wernerfelt, 1984; Barney,
1991):
a) Employees who possess specific skills which are required to successfully
implement an organization's strategic initiatives
b) Behaviors or attitudes of individuals which constitute an organization's competitive
edge and are not easily copied by others
c) Employees who demonstrate discretionary behaviors which are critical in creating
an organization's competitive advantage.
This view focuses on HRM practices that create the appropriate employee behaviors
as a factor that contributes to the organization's success (Schuler & Jackson, 1987;
Schuler, 1992). It assumes that the HRM functions of employment, training and
development as well as compensation management develop the required employee
behaviors which, in turn, positively affect the firm's performance. Since Barney's
(1991) article outlining the basic theoretical model and criteria for success of
sustainable competitive advantage, the RBV has become by far, the theory most often
used within strategic human resource management (McMahan et al., 1999).
The Changing Landscape of HRM
Human resources management has undergone significant transformations during the
past three to four decades. These transformations are a reflection of the changing roles
that HR.M plays in the organization. A meaningful manifestation of these
transformations is the change in its name from personnel administration to personnel
management, and then to human resource management. More recently, some
organizations have renamed their HRM departments to human capital management
department. The change in its name from personnel administration to human resource
management suggests a significant shift in the perception of HR M's focus as well as
scope. Under personnel administration, the focus was on ensuring that policies and
procedures were implemented efficiently and changes in personnel status were
appropriately processed and documented. HRM's important role was on monitoring or
policing the activities of line managers to make certain that they complied with
organizational policies and procedures as well as legal requirements. These traditional
functions of personnel administration during its earlier days were administrative in
nature-record-keeping, processing of new employees, payroll, and employee benefits
administration. The shift from administration to management is significant in that HR
has become more concerned with developing and implementing programs that focus
on talent acquisition and management ensuring that qualified human resources are
acquired, motivated, and developed in order to realize the organization's goals and
objectives.
Today, HRM is generally expected to contribute to realizing the organization's
business strategies. In HR management literature, there is a very strong focus on the
need for HR to be a strategic partner. It does not mean, however, that if HR prefers a
strategic role, it will no longer perform other more traditional roles. HR's functions
and roles will clearly depend on what the organization needs for its effectiveness and
sustainability.
Some organizations have delegated the more traditional or routine functions to
outsource services. For instance, payroll, tracking of leaves or vacation banks, and
benefits administration have been outsourced by organizations to third-party service
providers. Outsourcing enables the HR practitioners to be engaged in activities that
are strategic and critical to the organization.
HR practitioners, at present, perform a number of roles. These roles cut across the
different formal functions that HR practitioners are expected to perform. Some
examples of these roles are:
Policy enforcer
Change facilitator
Employee advocate
Negotiator
Legal adviser
Strategic partner
Coach
Party planner
Counselor
Terminator
Mediator
The strategic role of HR leaders and practitioners is described by Ulrich (1997). There
are four roles played by HR managers and practitioners and depending on what the
organization needs, the roles played could change.
As described by Ulrich in the multi- role model, these roles are briefly as follows:
Strategic Partner: Management of strategic HRM - this role makes certain that HR
strategies, programs, and activities are delivered in order to support the organization's
strategies.
Administrative Expert: Management of firm's infrastructure - this role focuses on
delivering efficient HR processes.
Employee Champion: Management of employee contribution - this role of HR
practitioners relates to day-to-day problems and needs of employees. It ensures
employees' commitment or engagement in the organization.
Change Agent: Management of transformation and change - this role enables the HR
practitioners to identify and implement processes for change. Thus, the HR
practitioners build an organization's capacity for change (Ulrich, 1997, p. 24).
At any given time, the HR practitioners may be performing roles consisting of a
combination of foci and different activities. It is apparent from this model that HR
practitioners play four key roles in the organization, depending on what the
organization critically needs. They do not perform strategic role to the exclusion of
the other roles.
The Human Resource Management (HRM) Model
The HRM model for this book, shown in Figure 1, uses a systems approach. The
systems school of thought became an important model of HR because it shows the
importance of looking at HR's total environment which Ulrich et al. (2012) referred to
as an organization's business context and how its programs are shaped by this
environment. Daft (1997) points out that a system is a set of interrelated parts that
function as a whole to achieve a common purpose. A system functions by taking
inputs from the external and internal environments, transforming them into outputs,
i.e., products and services. The system is evaluated based on its outputs and the
resulting evaluation becomes part of the feedback into the system.
Many of the models of the HR function and its processes developed up to this day
utilize the systems approach. Using the approach enables the researchers to (a)
identify and explain the environmental factors, the business context, and internal
capabilities that shape HR's strategies, programs, and services; (b) demonstrate the
linkage between the different HR programs and the organization's ability to
implement its strategies, maintain organizational effectiveness, and realize Its goals;
and (c) show the need to assess the interrelations of the different HR are an important
factor in enabling an organization to succeed. Their skills and competencies can
constitute an organization's competitive advantage especially if their talent cannot
easily be copied by competitors. Transformation are an important factor in enabling
an organization to succeed. Their skills and competencies can constitute an
organization's competitive advantage especially if their talent cannot easily be copied
by competitors. Transformation
Transformation process
HR professionals create policies, programs, and practices that affect an organization's
workforce, jobs, systems and processes which, in turn, contribute to the organization's
ability to realize its goals, strategies and objectives.
Workforce
A very significant objective of HR M is the acquisition, development, motivation and
retention of competent members of its workforce. HR professionals need to identify
the competencies and skills of employees as well as behaviors and attitudes needed by
the organization in order for it to attain its goals and objectives. Based on this
knowledge, HR practitioners recruit and select individuals who possess these
characteristics and competencies. In the event that the individuals hired do not have
the appropriate level of competency required, training and development need to be put
in place. All the functions in an HRM environment have to be activated or integrated
to ensure that the appropriate employment, training, compensation, and employee
relations functions work together and focus on the need to build a strong and
competent workforce base in the organization.
Jobs
Jobs consist of duties, tasks, and responsibilities performed by an employee in
exchange for compensation. The manner by which jobs are structured greatly affects
an employee's motivation and job performance. It is important that one's job is
challenging for the employee. Hence, it is important to match the tasks and
responsibilities associated with the job to that of the individual's abilities and interests.
This is an important consideration in selecting the appropriate individual to fill a
vacant position or to promote or transfer someone to another position. Hackman and
Oldham's (1980) job characteristics model demonstrates how organizations can
redesign employees' jobs to increase both the quality of employees' work and
productivity. They believe that there are core job dimensions that have to be
incorporated in the employee’s jobs because these affect their job satisfaction,
motivation, and work performance. These core job dimensions art (Daft, 1997):
 skill variety - number of diverse activities in one's job
 task identity - degree to which an employee performs a complete job for
beginning to end
 Task significance - degree to which the employee or other individual perceive a
job as being important.
Autonomy - degree to which an employee has freedom or discretion to carry out the
job
Feedback - the availability of feedback obtained in performing a job
HRM can provide managers assistance in structuring or redesigning jobs to
incorporate these core job dimensions either on one's job or in creating ways to
experience these dimensions. These ways include job rotation or job enrichment
programs.
HR systems
HRM establishes a number of systems to provide the organization with an integrated
arrangement of procedures designed to manage talent effectively. HR systems
influence organizational performance by eliciting and controlling employee behaviors
(Jackson, Schuler, & Rivero, 1989). An example of a system is the compensation
system which consists of a whole program to pay employees and meet the
organization's need to attract, motivate, and retain qualified and competent employees.
Another important system is HR's talent management system intended to acquire,
develop, and retain talent needed by an organization today and in the future. In Mathis
and Jackson's (2008) definition of HRM, it is evident that systems developed by HRM
are important to ensure that human talent is used effectively and efficiently to
accomplish organizational goals.
One other example of an HR system is the human resource information system (HRIS)
which involves an automated database. It contains records of historical and current
data about employees, human resource relevant transactions, skills, education and
competency information about employees. This system is used to process changes in
the employment status of employees. Some HIS are interfaced or integrated with
payroll and applicant and recruitment tracking systems. This system contributes
efficiency in the processing of employee records. In some organizations, the
employees are able to access the system and update their personal information. For
instance, if an employee gets married, he or she can access the database to change
information pertaining to civil status or the beneficiary information affecting an
employee's health or insurance benefits.
Processes
HRM is performs a strategic role when it adds value to the organization by promoting
efficiencies in its HR processes. HR professionals should conduct benchmarking
activities to compare what and how it conducts certain HR functions to ensure that it
is engaged in efficient processes. HR metrics have evolved during the past two
decades in HR's attempt to demonstrate the impact of its activities on the
organization's bottom line. Some examples of these metrics are utility analysis and
return on investment (ROI) calculations discussed in Chapter 14 entitled HR Metrics.
HR practitioners also conduct audits of their processes to determine if they are
efficient and if changes have to be made to improve their performance.
HR practitioners also conduct benchmarking to compare their performance with that
of similar organizations.
Output and feedback system
The HRM model demonstrates the expected outcomes of HR programs and activities
and HRM determines if it, in fact, has contributed to workforce competence,
competitive advantage, effectiveness, and sustainability of the organization. The
results experienced during a specific period of time constitute feedback into the HRM
system.
The interplay of these elements of the HRM model are expected to enable the HR
managers or practitioners to play a strategic role in the organization. This systems
approach to HR management was found to be one of the practices of strategic human
resource management contributing to organizational success. Franco, Hechanova, and
Teng-Calleja (2013) describe the elements of SHRM in the Philippines, as
demonstrated by the People Management Association of the Philippines (PMAP)
Employer of the Year awardees. The elements are:
1. Involvement and support of top management - it is important to have leaders who
truly value people and champion HR programs and initiatives.
2. Partnership between HR and line management - this is possible when HR has
gained the trust of line managers who willingly work with HR and implement HR
programs.
3. Responsiveness to external environment - this is in line with Ulrich's call for HR to
understand and be sensitive to its business context.
4. Systems approach to HR management and transformation - it is important for the
different HR units to work together and not be independent from each other like silos.
5. Alignment to the organization's vision, mission and goals -HR programs must be
aligned with the organization's articulated vision, mission, strategies, and goals.
6. Measurement of outcomes - one success factor of SHRM is tracking outcomes of
plans and programs which keeps people informed and ensures the outcomes'
alignment to company's thrust or direction.
7. Mindset of change, creativity, innovation, and dynamism - a mindset of change,
flexibility, and innovation is important to enable HR to respond to the organization's
changing needs.
8. Value for people and engagement of human resources - top management genuinely
values people and recognizes the role that employees play in attaining the
organization's mission and goals.
These elements of strategic HRM seem so basic and simple to accomplish. vet HR
leaders and practitioners have a difficult time realizing them as shown by studies
conducted on Philippine HR practices (Franco & Hechanova, 2007; Supangco, 2012).
The experiences of the PMAP Employer of the Year awardees can provide HR
practitioners with benchmarks in good HR practices to help them play a strategic role
in their companies.
In discussing the evolution of HR competencies, Ulrich et al. (2012) identified six
domains of HR competency that have the greatest impact on individual effectiveness
as HR practitioners and on business success in the 21* century. Unlike the role of HR
in Ulrich's earlier multi-role model, the HR practitioners today has to take a pro-active
role, taking initiative in many situations, and a leading role in anticipating the
organization's critical needs based on its business context and aligning HR practices
with the organization's strategies.
These six new roles of effective HR professionals in high-performing organizations
which can serve as a challenge and guide for HR professionals in the Philippines are
as follows:






Credible activist - refers to HR practitioners' need to deliver what they say they
will do and to "walk the talk." In this way, these HR practitioners will gain the
trust and respect of the organization members.
Strategic positioner - HR practitioners understand their organization's internal
and external environments (their "business context") and anticipate what is
needed by the organization, participate in developing strategic initiatives, and
align programs with the organization's strategies.
Capability builder - HR practitioners identify required "organizational
capabilities" and take initiative to build them through training and development,
rewards systems, and other HR programs and practices in an integrated way to
ensure the organization's sustainability.
Change champion - HR practitioners build organizational capability for
managing change, and provide tools to enable the organization to undertake the
needed change effectively.
Human resource innovator and integrator - HR practitioners identify and plan
required changes and integrate HR initiatives and activities to ensure that the
planned changes are effectively and efficiently carried out.
Technology proponent - one of HR practitioners' roles in the use of technology
described by Ulrich et al. (2012) focuses on HR's ability to use "social
networking technology" to get potential employees, employees, retirees, and
other significant stakeholders to "stay connected with one another." This aspect
of HR's role is necessary to ensure that customers' perspectives are understood.
Inputs into the system
External environment
The important role of human resource management has become more pronounced as
organizations experience the impact of globalizations, increased competition,
advancement in technology, and changing demographics of the workforce. HR
professionals realize the effect of all these factors on their ability to contribute
effectiveness and efficiency of their function. Therefore, it is critical for HR managers
and practitioners to understand their business context. They have to scan the external
environment to determine the appropriate program and activities they will develop
and implement in the light of this changing environment. Because of the dynamic
nature of economy, HR managers and practitioners must constantly be on the lookout
to determine if there are changes in the external environment which have implication
for their business operations. These technology changes can affect the types of talent,
skills, and competencies and organization needs to recruit and employ. It also means
that HR can automate many of its services and create efficiencies in the systems and
process.
Changes in the labor market demographics such as aging of the workforce oincreased diversity will definitely sharpen competition in recruitment of qualified
individuals in an already tight labor market. Therefore, there is a need to revisit
compensation packages to enable the organization to be competitive in hiring the best
qualified talent. Increased globalization as well as the building of regional alliances
such as the ASEAN integration of 2015 have significant implications for human
resources management. One example is the need for sensitivity to a more diverse
workforce and establishing training programs, for instance, to manage cultural
diversity. Changes in the legal and political conditions in other countries are also
important factors which affect HR programs in organizations that conduct business
worldwide.
Internal environment
HR's strategies have to be guided by the company's mission, strategies and goals if
HR has to make a significant contribution to the organization. HRM should
understand what resources are available to them in attempting to meet the
organization's goals and objectives. Adequate financial resources of an organization,
on one hand, will enable HR managers and practitioners to adopt innovative and stateof-the-art systems the lack of resources, on the other hand, can challenge them to
introduce creative programs. The competencies and skills of an organization’s Human
resource
The Manila Water Company, Inc.'s (MWC) is the concessionaire of the Metropolitan
Waterworks and Sewerage Systems (MWSS). It provides water delivery, sewage, and
sanitation services to more than six million people in the East Zone, composed of 23
cities and municipalities of eastern Metro Manila, Rizal Province, and parts of
Quezon City. Before 1997, the Philippine government had massive problems in water
distribution and found it necessary to turn over the network operation to the private
sector. Thus, in August 1997, Manila Water took over the government-owned MWSS,
under a 25- year concession agreement, which was later extended to 15 more years.
In the first five years, rehabilitation of the large network came with both internal and
external challenges such as a currency crisis, an El Nino phenomenon, and political
uncertainties that increased regulatory pressure on the company. To ensure its survival,
Manila Water decided to undertake the process of transformation, starting with its
most important asset-its human resources. Human resource development, training and
empowerment programs were implemented to transform the 1,600 employees of
MWSS into a more dynamic, responsive, and caring service providers through values
reorientation, upskilling to quality and productivity, developing specific skills and
business core competencies, Manila Water was single-minded in its focus to make its
workforce stand for concern for others* and to be moved by a single mission: to
render the best possible service to the public it services.
The focus on human resources was coupled with the physical transformation of work
environment and structural reorganization. What used to be a highly hierarchical
organization was flattened to ensure the effective flow of communication and
decision-making Mid-level managers were given a free hand to plan and implement
changes in their respective territories. Skilled workers were transformed into
knowledge workers. Cross-functional teams called "clusters" were formed in order to
assist management in formulating key policies and decisions as it focused on certain
corporate issues. The company encouraged a "seamless" structure where everyone
was free to assist in the corporate programs that may be outside of his/her formal
scope of duties and responsibilities, in the spirit of bayanihan.
The organization was decentralized to enable the managers in each territory to stay
close to their customers--understanding their needs and concerns and addressing them
expeditiously. The "We Care' campaign slogan was introduced to underscore caring
for people inside and outside the organization. This led to the establishment of
customer service standards and the adoption of the company's Corporate Governance
Manual incorporating the highest standards of corporate governance. Outstanding
workers who adhered to and excelled in this corporate governance were rewarded.
Ten of these workers have been chosen as the company's model employees, or
Huwarang Manggagawa awardees. Manila Water has since been validated by other
awards and recognitions, to name a few: Philippines* Best-Managed Company in the
small capital category by Asiamoney Magazine; Asian Corporate Social
Responsibility Award for Best Workplace Practices; Outstanding Employer of the
Year by the People Management Association of the Philippines, and the Asian Human
Capital Award (Singapore Ministry of Manpower, CNBC, INSEAD) grand prize,
The company has been acclaimed as a shining example of a successful public-private
partnership both in the Philippines and the international community. These
accomplishments are a tribute to the dedication and strong corporate culture among
Manila Water's workforce. Write to