Difference between personnel management and HR management
LO.1 Personnel and HR management:
1.1 Difference between personnel management and HR management:
Armstrong (2012) observed that both personnel management and human resource management are different dimensions of people management. Personnel management came into existence with the evolution of the employee relations through trade unions while and human resource management was coined later on. People management is the essence in both and focused on more detailed aspects such as age, culture, education, experience, ethics of the employees on an individual basis. In the words of Garavan et al. (2008), the main difference between human resource management and personnel management is that human resource management aims to align the employee objectives with the organisational objectives. On the other hand, personnel management is used to develop common objectives for employee base and unite the employees against management regardless of their differences in opinion. In short personnel management is used for managing the employees and has evolved into HRM. HRM is advanced area where knowledge, skills and abilities of the employees are measured for productivity.
The role of both these managerial aspects also differs while HRM is a strategic function, personnel management is treated as a secondary function. Jaya and Reddy (2011) stated that in personnel management employees are treated as an economic means of acquiring services in exchange of remunerations while HRM considers employees as economic, psychological and social aspects.
1.2 Function of HRM in contributing organisational purposes:
Businesses are created for attaining specific objectives that would lead to revenue generation, profit maximisation and brand recognition. Most of business objectives are related to divest or invest for growth in financial or market development terms (Garavan et al. 2008). The ability of the organisation to attain these objectives rapidly depends on defining a vision, check its performance continuously by involving its able workforce.
Aswathappa (2009) mentioned that employees working collectively are responsible for the growth or failure of an organisation. HRM also develops strategies for developing employee skillset; improve the knowledge base through training and development coupled with attractive reward strategies. Becker and Gerhart (2009) acknowledged that HRM measures the capability of the workforce which aids in the formulation of strategic objectives and goals. Its organisational structure, management functions, leadership style and work culture help employees to adapt to work environment of the firm.
1.3 Roles and Responsibilities of the line managers in HRM:
Boswell and Moynihan (2008) noticed that the main function of the line managers is to support, control and monitor the individual employees or teams that report their development to the higher authority. Judge and Ferris (2010) specified that as the line managers are in direct contact with employees, the responsibility is to ensure about operational activities contributing to achieving the strategic goals of the business. The line managers supervise transactional activities and align performance of employees.
Gatewood et al. (2008) highlighted that line managers manage the cost of daily operations and assess the operational performance of the employees. The managers also allocate job responsibilities evaluating employee skills and delegate the work. Jiang (2009) marked that line managers also have to communicate with employees for performance metrics. Judge and Ferris (2010) stated that line managers maintain an organisational culture and discipline in the work environment.
1.4 The impact of legal and regulatory frameworks on HRM:
The primary influence of regulatory framework can be observed in the recruitment, health and safety, compensation. The Equality Act 2010 has developed a regulatory framework by unifying many legal aspects in a common law (Rumpel and Medcof, 2008). The Equality Act covers issues like employee discrimination by age, gender, caste, religion, sex etc. Overall the Equality Act covers 9 aspects of the employee and management relationship (Ster and Koster, 2011).
Gratton and Truss (2007) stated that issues like victimisation should be managed by the HR managers of a firm and develop strategies to avoid such illegal activities in the workforce. Apple and Nike acted against the employment of child labour in its factories in China and Thailand (Ster and Koster, 2011). Another critical issue that has been gaining the attention corporate is sexual assault at work place and the glass ceiling phenomenon. The Sex Discrimination Act 1975/97 states that employees are protected from workplace issues related to sexual assaults and discriminations by Equality Act 2010 (Dowling and Schuler, 2011).
LO.2 Recruiting employees
2.1 The reasons for HR planning in organisations:
Garavan et al. (2008) stated that HR planning is done to create a line of successors for handling the future operations of the business house. Judge and Ferris (2010) argued that HR planning is done to support two primary aims of the business: forecasting and estimation of resources available. Forecasting evaluates the amount or number of resources that the firm will need to achieve its goals whereas estimation verifies the amount of resources available in the market place.
Gratton and Truss (2007) observed HR strategic planning on a broader perspective and stated that it is conducted to ensure that the potential capability of resources is optimally used without any wastage. Bach (2009) pointed out the reasons for conducting HR planning in the specified manner given below:
- Identify the strengths and weaknesses of the workforce.
- Develop a lucid strategic plan to target.
- Modifying employee base according to the needs of the organisation.
- Implementing necessary changes in the employee base and the organisational structure according to the demands of the situation.
2.2 Stages in planning HR requirements:
Boswell and Moynihan (2008) highlighted that the planning process of HR involves four primary steps. These steps are stated below:
- Designing and planning of the organisational structure and culture.
- Identifying the requirements of the organisation in respect of the workforce.
- Planning the recruitment and selection process.
- Implementing process of monitoring and training the staffs of the firm.
On the other hand, Judge and Ferris (2010) emphasised that HR planning involves acquisition, deployment, upgrading and retention of the human resources of business entity. For example, the HR planning of Google Plc technology start-up is also of four steps that include forecasting, auditing, scheduling, planning, implementing and controlling of resources of the firm (Farndale and Paauwe, 2010). However, the motive of all these process of planning is similar: they aim towards streamlining the organisational culture and the human resource of the organisation (Becker and Gerhart, 2009). Boswell and Moynihan (2008) emphasised that the planning stage focuses on aspects such as continuous training and development of employee skills, developing reward strategies to enhance the performance level and keep the workforce attracted to their jobs.
2.3 Comparison of Recruitment and Selection of Tesco and Amazon.com:
British based retail giant Tesco, conducts their recruitment and selection process in a mixed method of online and traditional recruitment methods. The initial advertisement of the recruitment process is done in the company websites and other media methods (Aswathappa, 2009). The next step is to scrutinise the profile of the applicants and select the potential candidates. The selected applicants are called for the interview process which happens in two steps. The first round of the interview is held in an assessment centre where the skills and knowledge of the employee are judged. The second round of interviews consists of a practical test held in Tesco stores or administrative stores. Finally, the successful applicants are selected and the formalities are conducted (Figure 1 in Appendix).
On the other hand, the recruitment process of Amazon.com is totally based on online mode. They post their candidate requirements via their website and job portals. They have developed a matrix structure for short listing the candidates (Figure 2 in Appendix). The process of recruitment carried on online with the help of video conferencing and telephonic interviews (Becker and Gerhart, 2009). The employees call for appointment only after they have been selected.
2.4 Effectiveness of recruitment and selection process in Tesco and Amazon.com:
The recruitment and selection process of Tesco is based on the mix of traditional method and online recruitment. As Tesco mainly operates in the retail segment and has to deal with their customers directly, they need to judge the skills of the employees. The first round of the interview in Tesco is to evaluate the academic qualifications and aptitude of the candidates (Aswathappa, 2009). The next round is to examine the talent acquired by the candidates matches their professional qualifications (Gratton and Truss, 2007). Their recruitment and selection process is suitable for their organisational needs. However, conducting such a lengthy and time taking procedure also has its negative sides. In a competitive market environment, the resources are scarce and the recruiters are large in numbers. Tesco has to ensure that they are able to gather the right talent for their firm.
Amazon.com primarily deals in online business activities. The contact with their customers is conducted in a virtual basis through online portals. They judge the potential of the employees by observing the skills and presentation skills. As the organisation does not have any production facilities, the employees are required for customer service and website support (Barney and Wright, 2009). They judge the skill set of the employees by conducting a online test and the results are displayed to the applicants after short listing through the matrix. The main demerit of this hiring process is that they cannot judge the personality of the applicants virtually.
LO.3 Reward employees for motivating and retaining them
3.1 The Link between motivational theory and reward strategies:
The process of encouraging the employees to achieve their personal needs connects the motivational theories with the reward strategies. Judge and Ferris (2010) stated that reward strategies introduce the factor of personal growth in the motivational process of the organisations. Barney and Wright (2009) noticed that employees expect something in return of their services to the firm. The firms should identify these expected needs of the employees and convert them into rewards. The motivational theories are used to present these rewards to the employees in an exciting manner (Gratton and Truss, 2007). Reward systems have been broadly classified into three groups namely, compensation, benefits and personal growth (Figure 3 in Appendix). The motivational theories on the other hand have been proposed by different scholars like Abraham Maslow, Frederick Herzberg, Victor Vroom, etc (Figure 4, 5, 6 in Appendix). All the theories are composed of different variables but commend towards the same motive of encouraging the employee base (Arthur, 2010).
3.2 Assessment of the process of job evaluation and other factors determining pay:
Job evaluation determines the value of the job according to the current market status and other related factors. Dickmann and Muller-Camen (2009) emphasised that job evaluation helps in identifying and developing the structure of remuneration of the jobs. Job evaluation can be of two types, analytical and non analytical schemes. In analytical schemes, the work is related to the job and ranking their various aspects. Systems such as point rating, tailor made and factor comparison are analytical method of job evaluation (Werther and Davis, 2008). Non-analytical schemes compare the job with other job profiles and do not consider the inherent factors of the job. Job ranking, paired comparison, job matching and job categorisation are part of non-analytical schemes of job evaluation (Stajkovic and Luthans, 2007).
Certain other factors that are related to the job evaluation process are market position of the job, reward structure related to the particular job, the organisational structure, etc. Mottazi (2009) stated that job evaluation helps in maintaining the balance of the pay structure of the organisation. It also identifies the cost effectiveness of a job. Talent recognition is also another important contribution of the job evaluation process.
3.3 Effectiveness of reward structures in different contexts:
Reward strategies act as a motivational factor for enhancing the employee performance and the overall productivity of the firm. Marshall et al. (2008) argued that reward structures may promote unhealthy and unfair competition in the work environment. Farndale and Paauwe (2010) emphasised on the importance of reward structure in reducing the cost of operations by enhancing the skill sets of the employees. Black and Gregersen (2007) defined that as employee needs differ the reward structures cannot cover all of them which arises a feel dissatisfactory feeling among the employees. Apart from employee motivation, another important role played by reward strategies is employee retention. Reward strategies also increase the brand value of the firm as they come under the issues related to corporate social responsibilities of the organisation. Again Dickmann and Muller-Camen (2009) remarked that too much flexibility may result in loss of control over the workforce of the firm. However, Google Plc is an apt example for providing one of the best places to work. They provide flexibility to the employees like casual dress code and time for carrying on personal projects which have helped them launch new products in the market and upgrade their brand equity (Hough and Oswald, 2007).
3.4 Methods for monitoring employee performance:
Monitoring employee performance is an essential task of improving the performance of the employees. The management has to keep track of the progress of the work so as move forward with their planning and decision making process (Judge and Ferris, 2010). The three common types of employee monitoring techniques are observing their working style, video surveillance of the workplace and checking the work equipments of the employees (Stajkovic and Luthans, 2007). However, with the growing influence of technology and involvement of ICT tools employee monitoring techniques have changed in the corporate sector. Techniques such as video and audio surveillance have improved with ICT tools like CCTV camera. Moreover, softwares like Team viewer and Cloud computing systems has connected the computers of all the employees with their managers and higher authorities who can observe their work procedure 24*7 (Dowling and Schuler, 2011).
LO.4 The mechanisms for the cessation of employment
4.1 Reasons for cessation of employment with an organisation:
Employee termination can be termed as the end of an agreement between the employee and the employer. Employee termination may happen for different reasons (Hennessey and Amabile, 2010). The global business environment was recently stunned by the financial crunch that originated from the US and spread all over the world. The recession was triggered when the US banks started lending money to the subprime customers and were not able to recover the money. This degraded the condition of the US economy and they started pulling out their investments from the European nations. As a result, economies like Spain and Portuguese were completely crushed (Dickmann and Muller-Camen, 2009). In the UK, a similar phase was being experienced. Their banks were not able to generate cash flow in the economy. Most of the industries went to a switch off mode and started laying of their employees for reducing their operational cost. This was beyond the obligations issued by the EU and national laws. Under the Employment Rights Act 1996, the employers can hire and dismiss a certain number of people within a given period. However, this was not met by the employers and resulted in excess layoffs in the UK. This process was put under the section F1X1107 Pressure on employer to dismiss unfairly of the Employees Rights Act 1996 (Becker and Gerhart, 2009).
Cessation can happen when the employers expel the employee from their service or if the employee voluntarily leaves the service of the employers. After joining an organisation, an employee has to go through a probation period. The employer has the right to terminate the services of the employees during this period for valid reasons (Stajkovic and Luthans, 2007). In most of the cases, employees are terminated because of lack of performance. Employees may also leave an organisation if they have a better opportunity in other firms. Apart from performance, any dispute between the employees related to pay structure or job delegation may lead to employee's cessation. Violation of the company policies may also result in termination of the employees.
4.2 Employment exit procedures of Thomas Cook and Marriott:
Amidst the ongoing economic fluctuations in UK, only company was able to sustain itself and flourish in the unfriendly environment i.e. the hospitality and tourism sector. Keeping in view the upcoming Olympic events in London, the hospitality industry focused on retaining employees and ensuring that the service quality was improved during the hour of need. In Thomas Cook, they started employee monitoring techniques for sorting out the talented and skilled employees of their organisation. They maintain their employee termination process strictly under the guidelines of The Employment Rights Act 1996. The company tries to retain the employee on the basis of his/her performance (Dowling and Schuler, 2011). Identifying the reasons also helps the organisation to improve their work procedures, cultures for redesigning the needs of the other employees. Before terminating any employee Thomas Cook offers other job profiles to the employees and tries to retain the employees through exit interviews (Jaya and Reddy, 2011). The employee has to serve a notice period before leaving the organisation and is relieved of his/her duties with proper remuneration and relieving letter provided by Thomas Cook.
Another giant in the hospitality and tourism sector is Marriott Hotels. Marriot Hotels start with the process of exit interview with immediate supervisor and gather information from the employee regarding the work performance, achievements and skill enhancement (Farndale and Paauwe, 2010). Marriot ensures that the employee being terminated has the rights to statements, right to dues, right not to suffer from unfair deductions, right not to suffer detriment physically, psychologically or in an economic manner and right to perform the notice period. In Marriott, they calculate the total outcome from the employee and compare it with the total expenses made by the company. In case, the expenses are not recovered by the employee performance, the employee has to go through a particular training workshop that helps in enhancing the skills of the employee and the employee productivity (Stajkovic and Luthans, 2007). After all these procedures, if both the parties decide on ending the terms of employment, then only employee cessation is considered.
4.3 Impact of legal and regulatory framework on employment cessation:
In the UK, after the economy was hit by the financial meltdown, big organisations started to lay off employees for reducing their cost of operations. They started to outsource their process to other countries with cheaper workforce like India. Banks like Barclays and Royal Bank of Scotland (RBS) expanded their business to the emerging countries like the BRICS nations (Farndale and Paauwe, 2010). They opened new branches in these countries for covering up their losses sustained during the recession period. In this regard, the employees in the UK had to suffer as the Employment Rights Act 1996 and the Equality Act 2010 were not able to stop the organisations from investing in other countries and recruit tying human resources. The organisations of UK ensured that they followed the legal aspects related to employee termination and also recover their fallen economic status (Dickmann and Muller-Camen, 2009).
The cessation process of the employees is also covered by the Equality Act 2010; the Act states that employees should be discharged from the services of the firm only after paying their full remuneration which is due (Farndale and Paauwe, 2010). The employees should also have to serve the prescribed notice period of the firm before leaving their services which form a legal part of the job offer letter. The process of employee's cessation also ensures that both employees and employers have complied with the terms and conditions of the employee recruitment and cessation policy of the company. The dues should be cleared from both the sides (Jaya and Reddy, 2011). Moreover, legal framework also states that termination of the services should be based on a just cause from both the sides. In short the terms and conditions of the employment contract should be fulfilled by both the parties.
The above study reflects the process of human resource management in the corporate sector with respect to the different aspects of global effects on the organisational process. The process of personal and human resource management in the developing and maintaining the workforce and the employee productivity of an organisation has been explained. The responsibilities of an organisation towards their stakeholders and the strategies applied by the firms have also been described. The study has further explained aspects related to recruitment and hiring process and the impact of regulatory frameworks in the process.
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