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Human Resources Management And Persistent Approaches Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 4857 words Published: 1st Jan 2015

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Human resource management has become a persistent and prominent approach to the management of employment in an extensive range of market economies. In concern of management theorists and for many managers, HRM is the imperative to the survival and success of organisations in the twenty – first century. According to Peter Drucker (1993), defines ”one single, simple idea: that people – their skills, knowledge and creativity- are the key resource for economic and organisational success” i.e. ‘the knowledge- based economy’.

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Despite the popularity of the term HRM, there is still no universally agreed definition of its meaning. According to Watson (2002:369) suggests that a ”rather messy situation currently exists whereby the term HRM is used in a confusing variety of ways”. In its broadest sense HRM can be defined as a generic term to describe any approach to managing people; whereas Boxall and Purcell (2003:1) described HRM as ”all those activities associated with the management of employment relationships in the firm”. Though, HRM comprises a ‘new approach’ to managing people that is extensively different to more conventional practices. Even there are number of perspectives which make HRM distinctive. However Storey (1995:5) defines HRM as a ”distinctive approach” to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an array of cultural, structural and personnel techniques’. Whereas related to strategic nature of HRM, Buchanan and Huczynski (2004:679) approaches HRM as ”a managerial prospective, which argues the need to establish an integrated series of personnel policies to support organisational strategy”.

Two main modification of HRM were acknowledged early in scholastic discussions of HRM:

According to (Guest, 1987; storey, 1992)

‘Hard’ HRM with an emphasis on the Strategies of cost minimisation (e.g. low wages, minimal training, close supervision), Quantitative aspects of managing human resource as an economic factor in production (e.g. in lean production- downsizing, work intensification).

‘Soft’ HRM approaches aimed at enhancing the Commitment, Communication, Motivation, Quality, Leadership and flexibility of employees.

Strategic HRM:-

A strategic approach to Human Resource management has great appeal, According to Johnson and scholes (1997); describe ‘strategic HRM’ in concern of business and management as ”the direction and scope of an organisational over the longer term, which ideally matches its resources to its changing environment, and in particular to its markets, customers and clients to meet stakeholders expectations”.

Strategic decisions in management are likely to be concerned with:

Enduring direction of the organisation

Extent of the organisation’s deeds

Identical organisation’s deeds to its environment (i.e. PESTLE)

Identical organisational deeds to its resources

The Harvard model of HRM:-

Source: Beer et al (1984; p.16 ‘Map of the HRM territory’)

Long term consequences

Individual well -being



Social well- being

HRM Policy choices

Employee influences

Human resource flow

Reward systems

Work systems

HR Outcomes




Cost effectiveness

Situational factors

Workforce characteristics

Business strategy and conditions

Management philosophy

Labour market


Task technology

Laws and societal values

Laws and

‘Ideal types’ of Human Resource Management:-


Human resource management

Strategic nature

Dealing with day to day issues; but proactive in nature and integrated with other management functions.

A deliberately long-term strategic view of Human resources

Psychological Contract

Based on seeking willing commitment of the employee

Job design

Typically team-based

Organisational structure

Flexible with core of key employees surrounded by peripheral cells

High degree of outsourcing


Market based

Individual and/or team performance

‘Pay for contribution’


Sophisticated recruitment for all employees

Strong internal labour market for core employees. Greater reliance on external labour market for non-core


Transformed into a learning and development philosophy transcending job – related training.

Strong emphasis on management and leadership development

A learning organisation culture

Employee relations perspective

Individualistic; high trust

Organisations of the function

Largely integrated into line management for day to day HR issues

Specialist HR group to advise and create HR policy

Welfare role

No explicit welfare role

Criteria for success of the function

Control of HR costs,

maximum utilisation of HRM over long term

Source: adapted and developed from Guest (1987)


Organisations have been focus to enormous stress over the past few years, with foremost principal structural changes in industry sometimes obscured behind the short or long-term issues of recession which in other words can be described as the circumstances of the economy turn down; a extensive cut in the GDP, Employment and Trade (Business).

In numerous ways, recessions are a motivating ‘natural experiment’ to examine. According to Paul Geroski & Paul Gregg (1997) describes ”recession involve a major reduction in demand sustained over a substantial period of time, it affect some organisation far more than others and they are exogenous to the actions of individual organisations”. The reduction in demand is most important and sustained means that those organisations that are deficiently affected by a recession are expected to be rethinking the essential premises of their competitive strategy. The evaluation between the strategy and composition of organisations who are exceedingly harshly affected by a recession with those less harshly affected endow with indication on what composes a few organisations more susceptible to surprises them others, and on the toughness of diverse strategy choices and diverse organisational constitution to changes in market conditions.

As a consequences recession also throw at least some useful luminosity on how organisations counter to unpredicted changes in demand. Additionally the effects of recessionary demand surprises are unavoidably reassigned reverse to labour markets.

Current scenario of Recession:-

According to Mike Schraeder and David J. Hoover (2010) ”the global economy has experienced massive confront in the previous two years as businesses have struggled with apparently insoluble financial crises which disclose a shocking compilation of industries that have closed a business, economize, or occupied in other strategic indispensable in the expedition for survival. Providentially, there is a number of substantiation that the influence of the global crises possibly will be deteriorating”. Moreover, organization and their leaders are now faced with the harsh certainty of demanding to recuperate from the shock of these crises, whereas concurrently creating divisions that are proficient for competing effectively in a decrepit global environment.

Cost-effective aspect

Peak to through so far

Real GDP decrease

3.7% real decline from December 2007 until June 2009 totalling $500 billion

Personal Income

individual wages declined by $339 billion from mid-2008 to the 1st Qtr of 2009


Fixed investment has declined by $543 billion, or 24%, since December 2007


There are 8.1 million less people employed today than in 2007

Industrial Production

Has fallen 12% since 2007


National bankruptcies have risen from 800,000 in 2007 to 1.4 million in 2009, a 75% increase


Exports and imports declined by 22% and 31%, respectively, between July 2008 and June 2009


The USD has fallen 17% in the last year versus a basket of world currencies

Bank Failures

140 banks  failed in 2009, with 700 banks in danger of failing, according to the FDIC

Source: Economic Recession, Depression, or Systematic breakdown (Economics/ Recession 2008-2010) by James Quinn, (March 4th, 2010) available from Internet URL http://www.marketoracle.co.uk/Article17665.html


Source: Economic Recession, Depression, or Systematic breakdown (Economics/ Recession 2008-2010) by James Quinn, (March 4th, 2010) available from Internet URL http://www.marketoracle.co.uk/Article17665.html


Source: Economic Recession, Depression, or Systematic breakdown (Economics/ Recession 2008-2010) by James Quinn, (March 4th, 2010) available from Internet URL http://www.marketoracle.co.uk/Article17665.html

Impacts of recession on top of global/ domestic organizations:-

As per given data in graphs of above mentioned, the major area to focus in concern of HRM is unemployment, during ending phase of 2007 employer were recruiting employees without forecasting the demand of prospective which results into redundancies/ unemployment, job insecurity, demotivation, stress , depression, reduced flexible working hours and increase in responsibilities on working employee in the organisations also.

Whereas James Quinn (2010) describes ”a depression is categorized by irregular enhance in unemployment, a decrease in the accessibility of credit, extract productivity and venture, frequent liquidation, condensed sum of business and exchange, as well as extremely explosive comparative currency price variation, mostly depreciation”. Price devaluation, economic crisis, and the stock market/ bank collapse are also universal fundamentals of a depression.

According to Sally Walters (2009); International & national Downsize/ recession related issues:

Business environment

Business closures


Modification in terms and conditions of employment

Cash flow complications

Deficiency of credit

Reduction in the value of authentic


Condensed margins

Public overheads

Recover costs and competences


Employee revenue

Recruitment complications

Aged employees

Skill development

Understanding future complications when economy start to rise

Facing difficulty to invest in skill development


Compact training obligation

Emphasize the specific needs of business

Lack of apprentices in young employees in concern of employment prospects

HRM Strategic perspective in concern of recession (issues):-

According to David Hussey (2002), ”during recession there are no simple solutions and, success will depend, as always, on the soundness of the strategic decisions taken by top management, and ability of the organisation to implement those strategies”. This would push the Human resource phase of the business to the forefront, even without the additional difficulties of sustained revolutionize and the demands. HRM, which is already very proficient in many organisations, requires to be obsessed by the business requirements of the organisation, but without losing prospect of the decisive value and significance of people in making strategies turn out to be reality.

While attempt to come out from the recession, companies perspective in concern of HRM; (issues which has been taken by companies/ organisations to survive in time of recession)

Redundancy/ Job cuts

Cost retrenchment and downsizing

Hiring freezes

Modification in terms and conditions of employment

Laying off temporary/ part time employees

Condensed training dedication

Freezes in previously planned Pay, Incentives and Bonus policies

Enhance the use of premature retirement


Reduction in employee hours

Affecting employees offshore

Employee revenue

‘HR department should obtain into depiction barely the liable effectiveness of their deeds but also their apparent impact on employee commitment’.

HRM activities in relation to HRM outcomes and performance (under perspective of recession):-




Positive Implications

Negative Implications


Cost retrenchment and downsizing,




Rejoin the employee in state of increase in demand,

Contract based employee

Employee might perform well compare to previous performance

Fluctuation in employee working hours

Employee might not have commitment and loyality towards organisation or might lose trust

Less work commitment, Insecurity in aspects of full time employees

Reduce pay, incentives and change in bonus policies

Freeze on promotions

Low motivation

Low motivation

Less employee engagement and commitment, trust

Offering rewards by increasing pay/ incentive/ bonus

Performance appraisal for highly skilled employee and core employee of the organisation to keep them in trust and motivated

It might have significant affect on employee performance


Dedication towards work

Employee engagement and commitment

It might only motivate few employee in organisation, as money is always solution of short term situations,

Appraisals are sometime demotivated & expensive

Might also affect on cost cutting strategy of organisation

Reduction in training commitment

Decline in leadership and learning development,

Poor performance

Provide continuous improvement training programs

Development in knowledge

Skill enhancement


might not be effective for all employees




Positive Implications

Negative Implications

Relocate/Redeploy transfer of employee (domestic as well as globally depend upon organisation

Low morale, insecurity in concern of job,

Cultural dispute

Provide social network,

Provide comfortable zone by management ,

Provide facilities and benefits

Depend upon individual behaviour of employee; it might goes well as employee will get exposure and it might help to learn different cultural/ countrywide organisation strategies and guiding principle

Expensive but sometime it is not possible in real world to do so.

Depend upon employee individual personality to have capability to cope up with different culture

Laying off part time/ temporary working


Less employee engagement towards work and commitment

Provide a more flexible alternative to full time employee,

Cover temporary peaks in demand

Cost effective

To protect the job security of core employees

To cover for holidays and sickness absence

Might not be effective for all industry expertise

Depend upon contextualities of the situation

HRM strategic planning and sustainable implementation for current market conditions & prospect economy crisis:-

Indicates in accomplishment plan


Strategic planning

Strategic personnel forecast

Link employees scheduling with business strategy by establishing demand and supply circumstances by employment category

Productivity controlling

Launch a innovative efficiency metric such as worth additional per individual to administer productivity programs

Work force adaptation

Employees flexibility

Exploit working-time implements like generation work accounts, vacation programs, and engagement with unions

Employees reduction

Amend employees size to the new economic environment with respect to job category forecasts

Human resources Cost management

Optimize workforce cost programs by converting cash inducements to noncash ones

Persistent recruiting of key workforce

Employ top applicants for assignment- decisive jobs

HR and performance improvements

Restructuring the HR organisations

Measures all HR actions to certify superiority throughout bunching procedure optimization, and ascendancy process

Performance management

Support performance process to the new environment by discarding interim observations and implementing enduring philosophy

Sustainable implementations

Employee Engagement

Focus on such values as honesty and trust and start an initiative to bring discipline and motivation into balance

Leadership Competences

Coach leaders to evolution from intensification to crisis with workshops, communication process, and support from top management

Modify management

Establish best-in-class support by illuminating accountabilities, enforcing transparency, and soliciting employee feedback

Internal and external communication

Organize a comprehensible communication strategy and methods that target decisive stakeholders

Source: Rainer Strack , Pieter Haen et al. (March 2009) Creating people in advantage in times of crisis; ‘how to address HR challenges in the recession’. Boston consulting group; European association for people management

For visionary companies who wants to develop state-of-the art nation development in the existing environment:-

In today’s impulsive environment, the HR department is frequently dragged in numerous directions. According to Rainer Strack), Pieter Haen et al. ”for illustration, specialist recruiters who usually focus on hiring may need to take on other HR tasks, such as managing the introduction of shortened working hours”.

Strategic personnel forecast: predict future scarcity to reorganize capabilities

Performance management: shift from diminutive to extensive term approaches

Employee engagement: attention on motivation and accountabilities

Leadership competences: endow leaders for turbulent conditions

Modify management: espouse a methodical, cascading approach

Internal and external communication: talk the walk

Strategic planning:-

Strategic personnel forecast: predict future scarcity to reorganize capabilities

Generally organisations do not fully comprehend how downsize will influence their demands for individuals and how layoffs will influence their prospect. Even if the economy prolongs to depreciate, the majority of companies will still features lack in precise jobs. To overcome from this Rainer Strack), Pieter Haen et al. suggests that ”companies have to evaluate their employees by generating job categories with comparable expertise requirements. While in dispensation these companies will capable to categorize probable scarcity in skills as well as pockets of competence where retraining opportunities exist”. Once companies will recognize their requirements for job category, companies might discover smarter and longer term preference about their employees.

productivity controlling: progress from input to output

On the whole HR departments do a high-quality job of determining headcount, human resources costs and relative inputs.

Work force adaptation:-

Employee flexibility: generate reversible circumstances

Companies expecting to recuperate from the current downsize should attempt to establishment headcounts method with built in flexibility; moderately than layoff employees particularly in those marketplace where employees diminution are expensive and time intense.

Employees reduction: be suspicious to engrave in the accurate places

Companies whose businesses are in extensive decline require, thinking the steps that are additional enduring, like laying-off full time employees. Companies have to identify the core employees who should be engaged.

Human resources cost management: produce inventive reimbursement model

Whereas companies may espouse a flexible or restructure strategy, the action might be in several ways like relating to wages, deferring bonuses etc.

Persistent recruiting of key workforce: promote talent

In this consumer’s marketplace, elegant corporations are discerning fortitude key employees from competitors or the marketplace.

HR and performance improvements:-

Restructuring the HR organisations: be lean

HR department requires being highly effective and efficient in scenario of downturn, otherwise it will affect on trustworthiness while HR will endeavour to lead individual’s proposal elsewhere in company.

Performance management: shift from diminutive to extensive term approaches

Presently Companies have a major chance to standardize their performance management and incentive methods to extensive term business objectives that might expand new significance, such as growth and sustainable business traditions

Sustainable implementation:-

Employee engagement: attention on motivation and accountabilities

Employees are most essential and effective assets of company when they are motivated while working in well-organized system. In downsize, it is tough to achieve balance between motivation and well organized system due to unavailability of promotion and high wages.

Leadership competences: endow leaders for turbulent conditions

Leadership is motivating the corporation to modify its commencement of superlative performance. In time of crisis organizations are arranging training for their mangers to coach them how to lead in tough times.

Modify management: espouse a methodical, cascading approach

Companies requires clear agenda and sustained and meticulous program management. HRM needs to create schedules, metrics and clear accountabilities to mobilize the establishment.

Internal and external communication: talk the walk

In organisation working environment; one to one communication, an open door policy and active listening skills all are significant.


Though it is complicated for HR to recognize techniques and HR practice that promotes a environment of modernization in support of the organisation objectives. Present scenario of downturn has immense impact and creates challenges for all departments, production units and workforce within organisation. HRM top management is itself in crucial situation; they have to rethink about their previous strategies before recession and compare it to the present scenario of crisis, then need to implement in concern of present situation. There is enormous requirement of critically analysing the strategies and necessitate to structure the new strategies undertaking consideration of employees supply and demand, maintaining employee engagement, developing forefront for leaders to assist for survival in crisis for companies and employees in tough time and restructuring the organisation and HR as per obligation of businesses. Work force might respond to the complicated situation like downsize positively if their leaders are truthful, straight and compassionate about the complications and generate enthusiasm about the prospects.

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Recommendations for Managing Human Resource Management in downsize/recession in addition to foremost prospective:-

In present scenario of global as well as domestic organisations, many of countries are coming out of recession, not fully because there are still uncertainties how stable the global market is however nobody has firm scenario when will the next recession occur, since still companies are trying to cope up with economy crisis in few aspects.

According to Rainer Strack , Pieter Haen et al. (2009) ”the first casualty of a downturn is people; the employees, on whom the fortunes of a company rest. Companies do whatever they can to get costs under control, and they often act swiftly by cutting employee hours, imposing a hiring freeze, and taking other steps that affect their employees”.

In perspective of HRM; there are hazards for corporations that engrave their employees too swiftly. While individuals may emerge to be in immense contribute today, the demographic wave will soon twist. Whereas Rainer Strack , Pieter Haen et al. (2009) elaborate further their point by saying ”the talent pool is poised to shrink, as the baby boom generation retreats into retirement and as younger and similar generations enter their prime working years”.

Look for ways for cost effectiveness without laying off work force

Reallocate employees wherever probable

Keep on fostering and emergent employee talent/ capabilities

All decisions must have taken under consideration of suspicious personnel planning

Ensure that company pursue the legislative dismissal course of action to the correspondence if company necessitate doing redundancies.

Let remaining employees know that they are valued, essential and essence of company.


Beer, M., Spector, B.,Lawerce, P.R., Mills, D. And Walton, R.E. (1984), p.16; ‘Managing Human Assets’, New York: Free Press

Boxall, P. and Purcell, J. (2003), p.1; ‘Strategy and Human Resources Management’, Houndmills:Palgrave Macmillan

Buchanan, D. and Huczynski, A. (2004), p.679; ‘Oraganizational Behaviour’, 5th edn. Harlow:FT/Prentice Hall

Drucker, P. (1993), ‘Post Capitalist Society’, Oxford: Butterworth-Heinemann.

Geroski, P. A. & Gregg, P. (1997), p. 2-3; ‘Coping with Recession: UK Company Performance in adversity’, United Kingdom: Cambridge University press (eBook resource : available from internet URL: http://books.google.co.uk/books?hl=en&lr=&id=neo3ZneOXp8C&oi=fnd&pg=PP16&dq=business+coping+strategies+to+avoid+the+effects+of+recession&ots=TEB2ESH_5a&sig=zaVSjowL5UBTTSpZa0FhWzeUp1w#v=onepage&q=&f=false

Guest, D. (1987), ‘Human Resource Management and Industrial Relations’, Journal of management studies, 24, 5: 503-521

Hussey, D. (2002), p.5; ‘Business Driven HRM’, New York: Wiley & Sons ltd.

Jhonson, G. and Scholes, K. (1997), ‘Exploring Corporate Strategy’, London: Prentice Hall

Quinn, J. (2010), ‘Economic Recession, Depression, or Systematic Breakdown’, E- Resource Article published on Mar, 4th 2010 available from internet URL: http://www.marketoracle.co.uk/Article17665.html

Rainer, S. & Haen, P. et al. (2009), ‘Creating People Advantage in Time of Crisis: How to address HR challenges in the recession’, Journal of Mangerial psychology, Publisher: Emerald Group Publishing Limited, E-Resource available from Emerald.

Schraedar, M. and Hoover, D. (2010), vol.24, 2: p.11-13, ‘Enhancing Organisational Recovery in Tough Times: a pragmatic perspective’, Development and Learning in Organisations, Publisher: Emerald Group Publishing Limited, E-Resource available from Emerald; http://www.emeraldinsight.com/Insight/viewPDF.jsp?contentType=Article&Filename=html/Output/Published/EmeraldFullTextArticle/Pdf/0810240203.pdf

Storey, J. (1992), ‘Developments in the Management of Human Resources’: An Analytical Review, London: Blackwell

Storey, J. (1995), p.5; ‘Human Resources Management’: A Critical Text, London: Routledge

Walters, S. (2009), p.5-8; ‘The Impact of the Economic Downturn on business and skills in England’, Journal of Social Economics, Publisher: Emerald Group Publishing Limited, E-Resource available from Emerald.

Watson, T. (2002), p.369; ‘Organising and Managing Work’, Harlow: FT/Prentice Hall


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