Unit 2
Evolution and Environment
The Industrial Revolution
Managing People at Work began at the time of the Industrial Revolution in the late eighteenth century. Before this time few large organisations existed but with the emergence of new technology, the factory system developed. The work environment was very unfavourable at this time and thousands of employees worked long hours for little pay in difficult and often dangerous working conditions.
Towards the end of the 19th-century Companies like ‘Cadbury’ in the UK and ‘Jacob’ In Ireland voluntarily appointed welfare officers to improve working conditions and set up sick pay schemes and subsidised housing.
The early Twentieth century brought scientific management influenced by FW Taylor who believed there was ‘one best way’ to approach every job and organise the work process more efficiently. Taylor analysed the job and broke it down into components i.e., job specialisation.
Taylor believed that people could be trained to become an expert at one particular component of the job but ignored that fact that people are not machines and get bored doing the same job every day. Taylorism was most famously adopted by fast food companies and Ford and benefits Human Resource Management with tools such as job analysis, methods of selection, methods of training.
First World War
Through the First World War, women were recruited in large numbers to fill the gaps left by the men going to fight, which in turn meant reaching an agreement with unions to accept unskilled women into craftsmen’s jobs and changing manning levels. During the 1920s and 1930’s the scope changed to manage absence, recruitment, dismissal and bonus queries.
The research of people like Elton May in the 1930s and ’40s indicated that performance could be affected by motivation, job satisfaction, group dynamics and leadership style. This behavioural science began to influence the management of people as we understood that a more flexible approach was required when dealing with different people. After the war, when the economy began picking up, large organisations saw value in improving employee benefits as a way of recruiting, retaining and motivating employees.
Second World War
The Second World War brought about welfare and personnel work on a full-time basis that largely involved implementing the rules demanded by large scale, state governed production and thus the image of the emerging profession was a bureaucratic one. Following the development of poor industrial relations in the 1960s, employers, unions and personnel managers were criticised for lacking negotiation skills and failing to plan industrial relations or people development strategies.
In the 1960s and 70s employment started to develop significantly. At the same time personnel techniques developed using theories from the social sciences about motivation and organisational behaviour; selection testing became more widely used, and management training expanded. During the 1970s, specialisms started to develop, with reward and resourcing, for example, being addressed as separate issues.
During the 1980s and 1990s, a time of worldwide recession, many business leaders recognised that their employees were the key to competitive advantage. This belief, that people are a resource to be managed as efficiently and effectively as any other resource, led to a shift in management style which became known as Human Resource Management.
Human Resource theories is a general term for the strategies, tactics and objectives used by business owners and managers to administer policies and procedures related to employees.
Human resource theories explain how management practises and structures can influence employee behaviour in a favourable or bad way. Small business owners can optimise staff productivity and creativity while reducing employee turnover by having a basic understanding of organisational behaviour and HR theories and acting on it.
There are four Human Resource theories which are named as follows:
- Organizational Lifecycle Theory
- Strategic Contingency Theory
- General Systems Theory
- Transaction Cost Theory
1. Organizational Lifecycle Theory
This is the first management theory. Historians and academicians have observed that organizations, just like that of living organisms, have life cycles. They are born (established or formed), they grow and develop, they reach maturity, they begin to decline and age, and finally, in many cases, they die.
Study of the organizational life cycle (OLC) has resulted in various predictive models. These models, which have been a subject of considerable academic discussion, are linked to the study of organizational growth and development. Organizations at any stage of the life cycle are impacted by external environmental circumstances as well as internal factors. The rise and fall of organizations and entire industries have been witnessed. Products also have life cycles, a fact that has been long recognized by marketing and sales experts. It seemed reasonable, for academicians, to conclude that organizations also have life cycles.
2. Strategic Contingency Theory
The second one among the human resource management theory and practice is strategic contingency theory, which, as the name suggests, is based on two concepts i.e., ‘Contingency’ and ‘Strategic’ aspect of contingency.
A Contingency is a need for different tasks of a subunit in an organization on which tasks of other subunits create an effect. This contingency becomes strategic once other subunit starts controlling more contingencies and becomes powerful in an organization.
As per the Strategic contingency theory, a leader becomes a central part of an organization due to his/her unique skills to solve the biggest HR challenges which others are unable to solve. Too much dependency lies on a leader so he/she is not easily replaceable.
Advantages of the theory:
- Strategic Contingencies Theory focuses on tasks that need to be done in the form of problems to be solved, thus de-emphasizing personality. If a person does not have charisma but is able to solve problems, then s/he can be an effective leader.
- That problem solving assumes a central role in a leader's ability conforms to a common-sense view of the world; there is little need to provide an elaborate explanation as to why it can work.
- The theory helps to objectify leadership techniques, as opposed to relying on personalities.
- In a situation where persons are rational agents, such as in scientific and formal academic settings, the Strategic Contingencies Theory would have more force and effect. That is, it identifies what is common to the group -- the orientation towards problem-solving -- and addresses it directly.
- The theory is simple and uses only the variables affecting power in contingency control by an organizational subunit. As Hickson admits, in "A Strategic Contingencies' Theory of Intra organizational Power" (Webpage link no longer valid) "Other possible explanations of power are not considered." Further research would be needed to test whether such a need exists to include them. Hickson admits that other variables may affect power but are assumed to affect it "...in other ways than by control of contingencies."
3. General Systems Theory
Another one of HR theories or a theory that is widely applied to HRM is the Systems theory is the interdisciplinary study of systems. A system is a cohesive conglomeration of interrelated and interdependent parts which can be natural or human-made. Every system is bounded by space and time, influenced by its environment, defined by its structure and purpose, and expressed through its functioning. A system may be more than the sum of its parts if it expresses synergy or emergent behaviour.
Changing one part of a system may affect other parts or the whole system. It may be possible to predict these changes in patterns of behaviour. For systems that learn and adapt, the growth and the degree of adaptation depend upon how well the system is engaged with its environment. Some systems support other systems, maintaining the other system to prevent failure. The goals of systems theory are to model a system's dynamics, constraints, conditions, and to elucidate principles (such as purpose, measure, methods, tools) that can be discerned and applied to other systems at every level of nesting, and in a wide range of fields for achieving optimized equality. It is quite visible how it can be applied to HR and hence one of the widely spoken HR theories.
4. Transaction Cost Theory
Transaction cost theory in human resource management is part of corporate governance and agency theory. It is based on the principle that costs will arise when you get someone else to do something for you. e.g., directors to run the business you own.
Transaction cost theory is an alternative variant of the agency understanding of governance assumptions. It describes governance frameworks as being based on the net effects of internal and external transactions, rather than as contractual relationships outside the firm (i.e., with shareholders).
Transaction costs will occur when dealing with another external party:
- Search and information costs: to find the supplier.
- Bargaining and decision costs: to purchase the component.
- Policing and enforcement costs: to monitor quality.
The way in which a company is organized can determine its control over transactions, and hence costs. Similar to the primary goal of HR theories, it is in the interest of management to internalize transactions as much as possible, to remove these costs and the resulting risks and uncertainties about prices and quality.
Scientific management is a management theory based on analysing and studying workplace processes with the goal of making them more efficient. Its founder was Frederick Taylor and the theory emerged late in the 19th century. Scientific management analyses workflows and processes with the goal of making them more efficient. While the influence of scientific management reached its peak in the mid-20th century, some of its principles live on today in total quality management and Six Sigma processes.
Productivity
One of scientific management's greatest accomplishments is increasing productivity. By studying the activities of workers, scientific management discovered methods to make every worker more efficient. Time and motion studies and other workplace studies analysed work operations and discovered the most effective and efficient ways to perform jobs. By discovering how to maximize the efforts of everyone in a company, profitability could increase, making organizations better able to compete in the global marketplace.
Offshore Markets
The development of offshore markets is one of the most significant developments that scientific management has produced in the 21st century. As a result of its rigorous analysis of labour techniques, many functions that once were accomplished in the United States are now performed overseas. Scientific management measured the most effective and cost-efficient manners to produce goods and services. Frequently, because of the high labour costs in America, companies moved production of goods and provision of certain services to India, China, Korea and other countries, where labour costs and taxes are much lower.
Total Quality
Total quality is a direct result of scientific management. Many principles of quality improvement and the Six Sigma method of quality management trace their origins to scientific management. The philosophies of continuous improvement, constantly seeking better ways to improve quality, are also directly related to scientific management. Japanese management, which led to the quality movement, traces many of its principles to scientific management. The automotive industry and the military have also greatly improved the quality of their products and services by stressing quality improvement techniques.
Division of Work
Dividing work between workers and supervisors is another direct result of scientific management. Breaking a job into parts and making the work as systematic as possible have produced greater results and standardization. The project management process of today, used by most companies to manage large projects, is directly related to the principles of scientific management. Supervisors also benefit from scientific management through the systematic performance management processes used in most corporations today. The typical organizational chart for organizations is also a product of scientific management principles.
Many job postings for human resources positions indicate whether the candidate needs experience in labour-management relations or an HR background in a union work environment. The reason is because a labour union significantly impacts HR functions as well as the company's overall operations. Small businesses that are unionized are likely to experience an even greater impact because of the advanced level of HR expertise and the HR functions required in a union environment that aren't a factor in a non-union workplace.
Labour-Management Relations
One of the primary effects that a labour union has on an organization is the level of expertise your human resources department must have. Small businesses that don't have dedicated HR departments should have at least one staff member with management authority who's not just comfortable with both employee relations and labour-management relations, but who knows the distinction between the two and how to balance the two, because even in a union shop, there are also non-union employment functions for which HR is responsible. In a unionized work environment, there are certain nuances peculiar to labour-management relations that aren't present in a non-union work environment.
Employee Issues
Most labour union contracts -- also called collective bargaining agreements -- contain a step-by-step process for addressing and resolving employee grievances. The effect that a labour union has is that you generally can't resolve employee issues without following the grievance process. For example, if an employee objects to a disciplinary warning he received and has documentation to support his position, the union contract won't let you talk things over with the employee and arrive at a mutually agreed-upon resolution to retract the disciplinary action. Instead, you have to resolve the employee's issue according to the grievance steps outlined in the union contract.
Negotiations
Companies that have a labour union contract in place need to be prepared for contract negotiations. The negotiation process involves labour and management presenting one proposal after another and agreeing to concessions until they reach common ground. HR must prepare for contract negotiations far in advance -- often months for complex contracts -- to calculate numerous wage and benefit scenarios to present to the labour union for collective bargaining negotiation sessions.
Management Discretion
A standard clause in most collective bargaining agreements is called a management rights clause. The management rights clause essentially says that the company's management has the right to operate the business as it sees fit and make decisions in the best interest of the company. Overall, the management rights clause allows company leadership to use their own discretion in running the company -- sort of. In a labour union environment, the collective bargaining agreement takes away management's discretion in making decisions concerning performance, recognition and reward for union employees. For example, managers are prohibited from using their discretion in rewarding an employee's exemplary job performance with a wage increase. The effect that a labour union has is that the union contract generally dictates when employees receive raises. Union employees all receive raises at the same time, in the same amount, regardless of whether they are star employees or the lowest-performing workers.
Divisiveness
Labour unions create divisiveness. "Some unions win higher wages for their members, though many do not. But with these higher wages, unions bring less investment, fewer jobs, higher prices, and smaller 401(k) plans for everyone else," writes James Sherk in his May 2009 article titled, "What Unions Do: How Labour Unions Affect Job and the Economy" for The Heritage Foundation. The article pits unionized work environments against non-union work environments in describing the effects of two intertwined issues: jobs and economics. There are proponents for organized labour as well as those who support maintaining non-union workplaces, and both groups generally are very passionate about their respective positions, which creates a line in the sand between organized labour and management.
According to Dzansi, Dennis, and Lineo, 2010) government legislation has an impact on human resource management. Employment legislation has an effect on what organizations write in advertisements and the questions that are asked in interviews to applicants as well as the whole of the human resource function in an organization. Furthermore, the questions and other checks that are conducted on prospective employees are controlled by government legislation. The legislation requires that these be related to the job and the functions that are being advertised. According to Paillé, Pascal, et al. (2014) government legislation determines how employers collect information regarding prospective and current employees. The manner in which employers determine the final applicant to be employed is controlled by the government in the legislation that it enforces. This research report is based on research conducted on recent journal articles, books, government sites and other reputable sources of information on government legislation and human resource management. The research is conducted on impacts that government legislation has on the human resource management function of an organization. The research report ends with a concluding remark on impacts of legislation on human resource management function of an organization.
1. Government Legislation on Direct and Indirect Discrimination
According to government legislation, it is against the law for employers to directly or indirectly discriminate against employees on grounds such as race or religion. For instance, it will be unlawful during advertisement of employment vacancy to state that only a certain race shall be eligible to apply. This is a sign of an organization that has discrimination on its human resource department. Government legislation prohibits indirect discrimination that may be in the form of an apparent requirement that is neutral which has a final impact on one or two groups of people (Demuijnck, Geert, 2009). An example is where a requirement for employment is that all applicants have to be more than 180cm tall. This is a requirement that is likely to be met by most applicants. However, on further analysis, it will be discriminatory to the people of China and women. The government steps in to control this type of requirements through legislation. The government requires those advertising that kind of job that has height stating why this requirement was necessary.
2. Employment Relations
Employment legislation is controlled by the government in Acts. Several sections of an act are meant to guide employers on what to do in their human resource department that is within the law. Personal grievances of employees are also covered by government legislation (Mariappanadar, Sugumar, 2012). On personal grievances by an employee, the government provides grounds for making claims that have an impact on the human resource management department of any organization. The grounds are; if an employee’s feels that he or she has been dismissed unjustifiably; employment contract has been affected to his or her disadvantage; been discriminated against directly or indirectly; been sexually harassed at the workplace by their employer or fellow employees; been racially abused and been refused to join a trade union movement or employee organization.
Employment relations act of many countries include these grounds for employee to launch complaints against their employers. In addition to these grounds, government legislation prohibits discrimination of employees based on their belonging to or being involved in activities of trade union movements. Some sections of the Act also provide legislation sections on harassment of an employee by colleagues, customers or clients of their employer. If an employee is harassed at work, the employer has a duty of taking the necessary steps of making sure that a repeat of the same does not occur. Legislation that aims to safeguard employees requires that employees that care for their employees or other person and have worked for them for more than six months to request the employer to vary their hour of work, days of the week of working, or type of work. By law, employees are required to make their request in writing and contain therein an explanation on how the requested change is going to assist them in making their responsibilities a success and the changes that5 the employer need to make to accommodate the changes. The employer is required to deal with the requirements by the employer as soon as possible and must not exceed more than three months upon reception. The employer must explain whether the request has been approved or not and provide the ground for disapproval if that is the outcome of the application. The law provides the grounds upon which the employer may decline the request by the employee. The grounds for disapproval include; not being able to reorganize work, adverse effects on the quality or performance or the burden of providing the employer with additional costs.
3. The Employment Relations (Breaks, Infant Feeding, and Other Matters)
Government legislation touches on breaks, infant feeding, and other Matters in an Act. This legislation requires that employers provide facilities and breaks to their employees who request time to breastfeed. The requirement on the part of the government is that employees are provided with this as far as is reasonable and should be practical. The government requires that these breastfeeding breaks be provided to breastfeeding mothers in addition to the provided standard rest breaks that are paid a meal break that are unpaid. The meal and rest breaks can also be used as breastfeeding breaks provide that the employer and employee agree on this (Seijts, Gerard, 2002). The length and frequency of these breaks need to be agreed upon by employee and employee. The government legislation states the appropriate facilities that the employer needs to provide to his employees. They include a separate space that has enough privacy for mothers to breastfeed or that is expressly away from the view of others without necessarily disrupting normal business operations of the employer’s business. The employer will be required to provide his or her employees with facilities like clean free drinking water, medical insurance plan, a clean toilet or sanitation facilities among others. The guidelines as provided by governments are available at government sites in their respective ministry of labour.
4. State Owned Enterprises
According to Kolaric, Borislav, Radojcic, and Nesic (2012), the main objective of state-controlled enterprises is to operate a business that is considered to be successful and that is; a business that is profitable and efficient in comparison to others in the same industry; employer that is considered to be good; an organization that is considered to be socially responsible. Furthermore, a good employer is defined as one who operates a personnel policy that contains provisions that are generally accepted as necessary for fair and proper treatment of employees in all their aspects of employment including; providing safe and good working conditions to their employee; providing an impartial selection of suitably qualified candidates for employment and providing equal opportunities for the enhancement of the abilities each and every employee. There is need for state sector employees to be good employers which mean that; they should provide good working conditions; selecting employees impartially, recognition of aims and aspirations of employees and requirements; providing opportunities to employees in an equal measure so as to aid in advancement of their careers; recognizing the aims, aspirations and differences in culture, ethnicity and minority group members such as women and people with disabilities. The law requires that the chief executive of each department to have an employee-employer operation report and to provide the report in the annual report. Some countries have a requirement those applicants to not report names of referees on their resume but to grievances of prospective employers upon request.
5. Parental Leave and Protection of Employment
Parental leave and protection of employment law affects human resource management. The law here requires those that have worked for a period of more than twelve months with a single employer for more than ten hours a day to apply for maternity leave, paternal or parental leave on the birth or adoption of a child that is below the age of five years. The employer has no obligation but to comply with the provisions of the law. The law also requires that women who are pregnant take maternity leave of up to fourteen weeks at least eight of which are taken after expected date of delivery of the child. Adoptive mothers are also provided under legislation to apply for this type of leave based on the date on which they are expected to take custody of the child. The law requires the partner of the expecting mother paternity leave of up to two weeks from the date of delivery or the assumption of the care of an adopted child (Matysiak, Anna, and Szalma, 2014). The law also entitles parents to a leave of up to 52 weeks of parental leave. These 52 weeks may be shared between the two parents as opposed to being taken at once.
The law requires employers to be notified by employees within a period of three months before the commencement of the leave. This includes a medical certification by a qualified medical practitioner stating the date of delivery and in the case, it is not the pregnant woman, there must be a certificate from the person making an application that the person making the application is her partner and will be assuming care of the child. The employer is required by law to provide employee within a period of 21 days upon receiving the application asking for leave whether they have an entitlement to the same with accompanying reasons for the given answer.
6. The Criminal Records (Clean Slate)
According to Lam, Helen, and Mark Harcourt (2003), under the criminal record act that is a provision of the law affecting human resource management; people that have convictions have the right to have their criminal history concealed. This in other terms means if the human resource department of an organization inquiries about the criminal history, they have the right to conceal that information. The conviction that they have will remain on record but government agencies and departments that hold the said information will have to conceal those records. For eligibility purposes, the person must have; no criminal convictions within the past seven years; never been sentenced for a custodian offense before; never received an order by a court during a criminal case to be detained in an hospital as a result of his or her medical condition; has no history of a criminal sexual offence against children or people of unsound mind and never been disqualified of driving under the transport Act. Under the law, employers have the right to ask their prospective employers to sign a form requiring them to carry out police reference check. The checks become to be of significance at later dates when criminal records legislation applies which are commonly referred to as clean slate. This act is enforced in organizations in New Zealand and therefore convictions need to be disclosed if that is the requirement in another country.
7. Health and Safety in Employment
Under government legislation that has an impact on human resource management, there is health and safety in employment act which has the objective of preventing harm to all persons at work or at the vicinity of place of work. The law lists various means that are supposed to achieve employee safety at the workplace (Kosny, Agnieszka, and Lifshen, 2012). They include; promotion of excellence in management of health and safety; defining of hazards and harm in a manner that is comprehensive so as to cover all hazards and hazardous behaviour that is caused by temporary conditions; imposition of duties meant to ensure that people are not harmed due to working conditions; setting up requirements that protect the safety and health of workers. The human resource department in an organization has no obligation but to enforce the requirements of the government legislation on health and safety of the workforce.
References:
- Personnel and Human Resource Management – A M Sharma (Himalaya Publishing House)
- Personnel Management and Industrial Relations- R S Davar (Vikas Publishing House)
- Human Resource Development and Management- Biswanath Ghosh (Vikas Publishing House)
- Personnel Management – C.B. Mamaria, S V Gankar (Himalaya Publishing House)
- Human Resource Management – AShwathappa
