The Nature of Contemporary Human Resource Management
This chapter introduces students to the theories and practices of human resource
management. HRM is defined and the central tenets of the various HRM models are
explained. The central importance of the nature of the employment relationship to HRM
is explained, and the chapter draws attention to four aspects: economic, legal, social
and psychological. Emphasis is given to understanding competing normative HRM
models rather than to practical HRM activities.
After studying this chapter, students should be able to:
♦ Explain the development of human resource management
♦ Define HRM and its relation to organizational management
♦ Explain the central features of the contract in the employment relationship
♦ Summarize the key HRM functions
♦ Explain the theoretical issues surrounding the HRM debate
♦ Appreciate the different approaches to studying HRM.
The shift from orthodox personnel management to HRM is explained in terms of global
HRM debate has exposed traditional underlying tensions and paradoxes in managing the
1 Development of human resource management
The development of personnel management is linked to post‐Second World War
government economic policies (Keynesianism), new employment law, and
recommendations of the Donovon Commission.
The HRM phenomenon is explained in terms of the renaissance of ‘market disciplines’,
neoliberalism and the challenge to government intervention in the economy.
Management and human resource management
After defining HRM, the terms ‘human resources’ and ‘management’ are explained.
a) People determine organizational outcomes. Employees are problematic because:
people have dual natures; people form groups; people have freedom of choice.
Managers therefore have to deal with a range of issues, tensions and contradictions
arising at individual, group, and organizational levels.
b) Management as science, art, politics and control.
HRM IN PRACTICE 1.1: A new role for HR professionals.
Base a seminar discussion around the questions at the end of this feature and use it to
illustrate the new skills required from HR managers and the new responsibilities they
are taking on as the ‘moral compass’ for organizations.
To help students understand where HRM fits into the ‘big’ picture of managing the
organization, reference may be made to the traditional four management functions of
planning, organizing, leading, and controlling.
Ask students what HRM activities are associated with each management function.
Example: HR Planning (planning); Recruitment and selection (organizing); Job design
(leading); and appraisal (controlling). Questions may also be asked about how the HR
function has changed over the last 10 years.
The nature of the employment relationship
Four main components of the employment relationship are discussed: economic, legal,
social and psychological.
2 The extended discussion on the psychological contract reflects recent interest in this
topic in the HRM discourse.
To provide further insight into the nature of the psychological contract, see Elizabeth
Morrison and Sandra Robinson’s chapter ‘Examining constructs to capturing the
exchange nature of the employment relationship,’ in Jacqueline A‐M. Coyle‐Shapiro et al
(eds.), The Employment Relationship (2005, pp. 161‐80). The authors extend
psychological contract research by examining the nature of incongruent perceptions
between the two parties to the exchange. They argue that incongruence in perceptions
stems from the nature of the mutual obligations that exist and the cognitive processes
that affect how workers and managers interpret each other’s contributions to the
Direct students to the reflective question (p.13) to engage them in a discussion on the
concept of the psychological contract.
Human resource management functions
To explore HRM functions the text addresses three questions: What do HR professionals
do? What affects what they do? And how do HR professionals do what they do? We
identify nine key HRM functions to answer the first question, including planning,
integrating, staffing, developing, motivating, designing, managing relationships,
managing change, and evaluating.
We also identify three broad contingencies: external context, strategy and
organizational design to address the question ‘What affects what HR professionals do?
And a range of technical, cognitive and interpersonal processes and skills are used to
accomplish HR functions.
HRM IN PRACTICE 1.2: Twenty‐first‐century HR senior HR leaders have a changing role.
This feature can be used st generate discussion about the challenges of senior HR
managers in the early 21 century, including how HR can be defined, how its outcomes
can be evaluated, and how it differs (if at all) from personnel management.
Organizing the HR function
3 The way the HR function is organized and its relative power depends upon external
factors (e.g. government legislation) and internal factors (e.g., business strategy and
The three related dimensions of HRM – functions, contingencies and skills – are shown
diagrammatically in a three‐dimensional framework.
The 2004 Workplace Employment Relations Survey provides empirical data on HR
practices, which can be used to draw attention to the HR function and the ‘rhetoric