Research Paper on Human Resource Management and Personal Management: The New Theoretical Paradigm

Due to rapid environmental change, competition to provide innovative services and other business challenges the ideas and disciplines cannot be static. This was particularly the case in the late twentieth century, when the social sciences were subject to continuing pressures for changes in emphasis or direction, or for even more radical structural shifts (Kelly, 2003).

The new language, some changes in the terminology when certain terms emerge and other terms are rejected can be stipulated not only by new economic circumstances, but by fashions also. The review of the scientific literature allows drawing the conclusions that the relabeling when the concepts are introduced as new ideas although they were used long time before just under the different names is not novel affair. For example, according to Larson and Halldorsson (2002), the relabelers simply change the name of purchasing to supply chain management, arguing that purchasing has already evolved to supply management in many cases.

Very similar view shares Martensson (2000) providing an example respecting knowledge management. Assuming that knowledge has always been a valuable asset Martensson (2000) brings a question – what is knowledge management – and proposes the discussion: is knowledge management a new way to understand organizing and organizations, or is it a tool for exploiting knowledge, or is it just another relabeling in the ceaseless flow of fashionable management concepts.

The shift in terminology does not miss the processes in employment area. In 1980s in the scientific literature there was argued that in response to new and qualitatively different competitive conditions the organizations need to alter the way in which they manage employees (Storey, 1995). The term which has been attached to „the new way” is„human resource management”.

The shift in language from „personnel management” to „human resource management” rises huge amount of questions: „How does HRM differ from the deeply rooted personnel management?” (Bratton & Gold, 2003); Is one better thanthe other? (Armstrong, 2000) “; Are differences between

Whether HRM has anything to offer and whether it is not just another new-fangled management rhetoric”? (Kamoche, 1991).In the scientific literature it is accepted that HRM is a term of ambiguous and controversial meaning (Storey,

1995). Much of the controversy stems from absence of precise formulation and agreement of it’s significant (Bratton & Gold, 2003). Despite that fact for some scientists HRM reflects no more than a relabeling of personnel management or a catch-all term in which no particular approach to managing the workforce is favored or discemible (Hallier & Leopold, 1996).

However, others highlight the essential features of HRM underlying a belief that people really make difference and that human skills and knowledge are a strategic resource, emphasizing HRM integration with organizational strategy and the responsibility of line managers in the process of delivery of HRM practices (Bratton & Gold, 2003; Clarke, 2011).

Whether, like Keenoy (1990), one views HRM as a phenomenon or whether like Strauss (2001) sees HRM as “a relabeled (or at most repackaged) version of the old feisty field of personnel”, it is indisputable that in the literature HRM has clearly overpowered personnel management as a desirable field of research and writing (Edgar & Geare, 2009; Freitas et al, 2011).

The problem stated in the paper: is human resource management simply a relabeling and repackaging of personnel management or it represents a new approach to managing people. The research aim is theoretically to examine the concepts of PM and HRM by disclosing the nature, similarities and differences of both concepts.

It is generally accepted that the concept of HRM originated in North America in the late 1910s to early 1920s. At this period a plethora of names were used to describe processes in employment area: employment management, labour management, personnel management,  personnel administration, labour relations, industrial relations, industrial relations management and employment relations.

The term “human resource management” was not used, however the general term “human resources” was already employed to express the idea that the nation’s labour input is embodied in human beings and represents a form of capital good that can be augmented through various forms of private and public investment, such as education, training, and public health programs” (Commons, 1919; Kaufmann, 2001).

It is important to mention that over the period the changes in terminology of people management have occurred: some labels have taken new meanings, new labels have appeared and others disappeared. As stated Kaufman (2001), one significant trend is the replacement of the old term “personnel management” with the new one “human resource management.” According to Strauss (2001), the human resource term was first used in this substitute sense in the mainstream literature in 1964.

The background for using „human resource” term can be found in two sources: first, a published lecture given in 1958 by economist E. Wight Bakke titled “The Human Resources Function”; second, Myers, Frederick, Harbison, and other economists scholars research in the late 1950s on the role of labor as a factor in economic growth and in that context used the “human resource” term in various publications

(Kaufrnan,2001).

For some period the “personnel” and “human resources” terms were largely used interchangeably, however starting in the early 1980s, the term „human resource” became the main and represented a break with traditional personnel administration, hereby PM gave way to HRM (Thomthwaite, 2012).

According to Bratton and Gold (2003), the 1980s and 1990s are the time of the relevant change in the context and content of the way in which people were managed. In this point the question conceming the radical change in the context field arises.

Conceming the context, Schüler and Jackson (2005) link the formation of HRM concept with a growing professionalism among HRM practitioners in USA and with a growing recognition of the significance of human resource management to organizational success. Guest (1987) identifies 6 factors behind the emergent interest in HRM: the search for competitive advantage; models of excellence; the failure of personnel management; the decline in trade union pressure; changes in the workforce and the nature of work; availability of new models.

Gooderham and Nordhaug (2010) underline the end of the”Fordist” or “welfare capitalist” stage in labour management. According to Beaumont (1992) (as cited in Prowse & Prowse, 2010), a combination of increasing competitive markets, the introduction of Japanese work systems, declining unionization in the USA private sector determined the development of HRM in USA.

Very similar attitude shares Legge (1995) emphasizing the changes in product and labour market in USA and UK mediated by new technologies. Analyzing the genesis of HRM, it is essential to stress the duality of the concept, because the book New Perspective on Human Resource

Management (1989), edited by John Storey, generated the first wave of debate on the nature of the normative HRM focusing on hard and soft versions of the construct. Either the second wave of debate on HRM plays cmcial mle in literature and in practice highlighting the centrality of

HRM to success of organizational performance (Bratton & Gold, 2003; Marescaux ei o/., 2013).Summing up, it could be stated that in the process of HRM formation three main stages exist: first, the initial thoughts originated in USA; second, the further development of these ideas by British scientists; thirdly,  traditional personal management expansion to human resource management.

Notwithstanding the diverse approaches to the relation between HRM and PM, both concepts have similarities and, as Armstrong (2006) states, the differences can be viewed much more as a matter of focus.

According to Guest (1987), there are two main issues analyzing the differences between two constructs. First, it is not much known about personnel management. Second,  there is a danger of comparing a normative/ideal view of HRM with a descriptive view of PM.

Armstrong (2006), upholding the view that HRM is no more and no less than PM, presents the catalogue of concepts similarities:

1. PM strategies, like HRM strategies, flow from the business strategy.

2. PM, like HRM, recognizes that line managers are responsible for people managing.

3. The values of PM and at least the “soft” version of HRM are identical due to the respect for the individual, developing people to achieve their maximum level of competence for their own satisfaction and to facilitate the achievement of organizational objectives.

4. PM and HRM recognize that it is significant to match people to ever-changing organizational requirements: placing and developing right people in and for the right jobs.

5. In PM and in HRM there are used the same range of selection, competence analysis, performance management,  training, management development and reward management techniques.

6. PM, like “soft” version of HRM, stresses importance to the processes of communication and participation within an employee relation system.

It is worth to highlight that some of above mentioned similarities are viewed in the literature as differences also, emphasizing the bigger HRM focus on certain aspects (for example: sfrategic integration). As discussed earlier in the paper, there is no consensus in the scientific literature as to content of HRM, so, it means that scientists, like Guest  (1997), Henry & Pettigrew (1990), Storey (1993), Legge (1995), Armstrong (2006) underline different HRM and PM aspects. These differences are our interest here.

Several schools have attempted to deflne HRM traits by producing polar models, which help to focus debate around the question: Is HRM simply personal management in a new wrapping? (Bratton & Gold, 2003). In the scientific literature (Bratton & Gold, 2003) flve main HRM models that seek to show analytically the qualitative differences between traditional PM and HRM can be identifled: The Harvard model (Fombrun et al, 1984), The Michigan model (Beer et al, 1984), Guest (1997) model,  Warwick model (Henry & Pettigrew, 1990), Storey (1992)  model. All these models provide an analytical framework for studying HRM, legitimate certain HRM practices,  provide a characterization of HRM and serve as a heuristic device for explaining the nature and relevance of key human resource practices.

One of the flrst explicit statements of the HRM concept was made by Michigan school (1984), putting in the foreground the coherence of internal human resource practices and the congruence between human resource management practices and organizational strategy.

Another analytical framework – the Harvard model (1984) – is based on the belief that the problems of historical PM can be solved only “when general managers develop a viewpoint of how they wish to see employees involved in and developed by the enterprise, and of what HRM policies and practices may achieve those goals” (Armstrong, 2006).

According to Guest (1987), HRM differ from PM due to four reasons: it integrates human resources into strategic management; the perspective in unitary with the focus on individual; it works better in such organizations which have an „organic” structure; the emphasis is on a full and positive utilization of human resources (Bratton & Gold,  2003). By making an assumption, that HRM is “better”.

Guest (1987) acknowledges, that all variations should be taken into account in the context, which might limit HRM effectiveness. Due to this fact Guest (1987) proposes to view HRM as an approach to manage the workforce

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