Roles Of Human Resource Management

Roles Of Human Resource Management In the past few years, roles for HR professionals were viewed in terms of transition from operational to strategic; qualitative to quantitative; policing to partnering; short-term to long-term; administrative to consultative; functionally oriented to business oriented; internally focused to externally and customer-focused; reactive to proactive; activity-focused to solutions-focused (Ulrich, 1997). However, these transitions have been seen as too simplistic. In fact, the roles of HR professionals are multiple, not single. In order to create value and deliver results, HR professionals must not only focus on the activities or work of HR but also define the deliverables of the work. Therefore, Ulrich (1997) came out a multiple-role model for human resource management (See Figure 2-1). The two axes represent the HR professionals focus and activities. Focus ranges from long-term/strategic to short-term/operational. HR professionals must learn to be both strategic and operational, focusing on the long term and short term. Activities rang from managing process (HR tools and systems) to managing people. These two axes delineate four principal HR roles which are: (1) Management of strategic human resources; (2) Management of firm infrastructure; (3) Management of the employee contribution; and (4) management of transformation and change (Ulrich 1997). In a short word, the roles of HR professional are strategic partner; administrative expert; employee champion and change agent. Table 2-1 summarizes the deliverables, metaphor and activities the HR professional must perform to fulfill the role. Figure 2-1 HR Roles in Building a Competitive Organization Source: Ulrich, 1997 Table 2-1 Definition of HR roles Role/Cell Deliverable/Outcome Metaphor Activity Management of Strategic Human Resources Executing strategy Strategic Partner Aligning HR and business strategy: Organizational diagnosis Management of Firm Infrastructure Building an efficient infrastructure Administrative Expert Reengineering Organization Processes: Shared service Management of Employee Contribution Increasing employee commitment and capability Employee Champion Listening and responding to Employees: Providing resources to employees Management of Transformation and Change Creating a renewed organization Change Agent Managing transformation and change: Ensuring capacity for change Source: Ulrich, 1997 Management of Strategic Human Resources-Strategic Partner As Ulrich said, HR professionals pay a strategic role when they have the ability to translate business strategy into action (Ulrich, 1997). To achieve this, the HR manager must be able to ask appropriate questions and contribute to business decisions. As a result, the HR manager must develop business acumen, a customer orientation and an awareness of the competition to be able to link business strategy to HR polices and practices. However, research suggests that only a minority of CEOs involve their HR managers in formulating business strategy (Nankervis, 2000 and Johnson, 2000). Evidence indicate that there is growing awareness of the need for HR managers to become actively involved at the strategic level, and increasingly recognize that organizations that have a CEO who recognizes the significance of HRM have a competitive advantage (Fisher and Dowling, 1999; Way, 2000). Management of Firm Infrastructure-Administrative Expert According to Ulrich, to become administrative experts, HR professionals must be able to reengineer HR activities through the use of technology, rethinking and redesigning work processes and the continues improvement of all organizational processes; see HR as creating value; and measure HR results in terms of efficiency (cost) and effectiveness (quality) (Ulrich, 1997; Blackburn and Rosen, 1995). Research also indicates that the competency levels of HR managers in high-performing firms are significantly higher than those of HR managers in low-performing firms (Yeung, 1998) Management of Employee Contribution-Employee Champion Work as employee champion requires that the HR professional must be able to and meet the needs of employees. This can achieve by being the employees voice in management discussions, by being fair and principled, by assuring employees that their concerns are being heard and by helping employees to find new resources so that enable them to successfully perform their jobs (Ulrich, 1997). Failure to be an employee champion will see HRM facing a loss of trust for losing sight of the needs, aspirations and interests of the workforce (Kochan, 2003). Ignoring employee-related outcomes may result in lower jog satisfaction, lower commitment and reduced performance, which in turn, negatively affect organizational performance (Guest, 2002). Management of Transformation and Change-Change Agent Act as change agent can be achieved by learning change in the HR function and by developing problem-solving communication and influence skills. Gloet argues that one way for HRM to reinvent itself is via the development and maintenance of learning environments, where knowledge creation, sharing and dissemination are valued (Gloet, 2003). Ulrich, D. (1997) Human resource Champions: The nest agenda for adding value and delivering results, Harvard Business School Press, USA Nankervis, A. Small packages, HR monthly, November 2000, pp.42-3 Johnson, E.K. (2000), The practice of human resource management in New Zealand: Strategic and best practice?, Asia Pacific Journal of Human Resource, vol.38, no,2, 2000, pp.69-83. Fisher,C. and Dowling, P. (1999), Support for an HR approach in Australia: the perspective of senior HR managers, Asia Pacific Journal of Human Resource, vol.37, no.1,1999,pp.2-19. Way, N. (2000), A new world of people power, Business Review Weekly, 16 June 2000, pp. 62-6. Blackburn and Rosen, Does HRM walk the TQM talk?, HR Magazine, July 1995, pp. 68-72. Yeung, A, Human Resource Competencies in Hong Kong; Research Findings and Applications Guide, HKIHRM/University of Michigan Business School, Hong Kong, 1998, p.4. Ellig, B, HR must balance demands of dual roles, HR News, July, 1996, p.9. Allen, C. and Lovell, K., The effects of high performance work systems on employees in aged care, Labour and Industry, vol.13, no.3, 2003, p.14. Kochan, T., quoted in Trinca, H,HR needs to rebuild trust, Australian Financial Review, 11 November 2003, p. 59. Guesr, D, 2002, op. cit., p.335. Gloet, M, The changing role of the HRM function in the knowledge economy; the links to quality knowledge management, paper presented at the 8th International Conferece on ISO and TQM, Montreal, April 2003, pp. 1-7. 2.2 Human Resource Management overview in China Since the late 1970s, China has been going through a transition. The economic reform in China has led to impressive growth and significant integration into the global economy. These developments have resulted in major changes in the management of industrial enterprises and hold considerable implication for HR practices in the nation with the largest workforce in the world. In China, HR practices have been shaped by a host of ideological, historical, political and economic factors. Under the economic reform programmed, although some market forces have been introduced into the HR system, the influence of the state is still considerable (Nyaw, 1995:193). In 1979, China introduced the open door policy. Since then, economic reforms have brought many changes to the business environment. The end of the iron rice bowl policy has created a new employment market. SOEs have to compete with joint ventures and privately owned enterprises. With reforms in HR practices, managers in SOEs have more a utonomy including the authority to hire and fire. There are significant differences in HR practices between firms of different ownership. MNCs and joint ventures have brought into China not only investment but also management practices. For example, labour contracts have replaced lifetime employment. A performance-based pay system is gradually replacing the seniority pay system. These practices have an important influence on domestic firms in changing their HR practices (Warner, 2001) Benson and Zhu (1999) observed that there were three major models of HRM in Chinese enterprises. The first was a traditional model that existed in large SOEs where there was surplus labour. These SOEs had close ties with the government and contributed to local development. They had traditional HR management systems. The second model was observed in foreign-owned enterprises or newly established domestic private enterprises. They had fewer constraints than SOEs. They realized that their success based either on western or Japanese systems. The third model was observed in firms that were undergoing a transition from the old to the new systems of HR management. They adopted a HR management style with Chinese characteristics. Nyaw, M.K. (1995) Human resource management in the Peoples Republic of China, in Moore, L.F. and Jennings, P.D. (eds), Human Resource Management on the Pacific Rim, Walter de Gruyter, New York, 187-216. Warner, M. (2001), Human resource management in the Peoples Republic of China, in Budhwar, P.S. and Debrah, Y.A. (eds), Human Resource Management in Developing Countries, Routledge, London and New York, 19-33. Benson, J. and Zhu, Y. (1999), Markets, firms and workers: The transformation of human resource management in Chinese state-owned enterprises, Human resource management Journal, Vol.9., No.4, 58-74. 2.3 Human Resource Management Outcomes HRM is concerned with both organizational performance and employee wellbeing which means that any evaluation of HRs contribution must incorporate both organizations and employees perspectives. The contribution of HRM to the organizational performance included aligning HR strategies with organizational strategies, managing the corporate culture to win employee commitment and being efficient in managing HR activities. On the other hand, the contribution to individual wellbeing relate to employee attitudes and behavior. High-performance HRM benefits the organization because the way employees respond to HRM initiatives is linked to their job performance and ultimately to organizational performance (Guest, 2002). Therefore, when evaluate HRM performance, following outcomes should be considered: Adaptability: that means HRM strategies and policies foster organizational and employee flexibility. The whole organization and employee ready for change and accept change. After that, innovation and creativity encouraged, knowledge is recognized as a critical asset and the organization utilize people with different background and value systems. Commitment: this concern with HRM policies enhance employee identification with and attachment to their job and the organization. High level of commitment can result in more loyalty, increase teamwork and reduced labour turnover, along with a greater sense of employee self-worth, dignity, psychological involvement and feeling of being integral to the organization. Competence: Relates to the extent that HRM polices attract, retain, motivate and develop employees with the abilities, skills, knowledge and competencies to achieve the organizations strategic objectives. Congruence: concern with HRM polices generate or sustain congruence between management and employees, different employee groups, the organization and the community, employees and their families, and within the individual. In other words, HRM strategies and policies promote the achievement of employee goals, at the same time, satisfy the organizations strategies business objectives. Lack of congruence can be costly to the organization in terms of time, money and energy, resulting low levels of trust and lack of common purpose and stress or other psychological problems will happen (Beer, Spector, Lawrence, Mills and Walton, 1984) Cost-effectiveness: the HRM strategies and polices can reduce personnel-related costs, help correctly size the organization, eliminate unnecessary work, reduce compensation and benefit costs, reduce labour turnover and absenteeism, improve employee health and safety, improve employee productivity and avoid costs from litigation and negative public relations. Job satisfaction: HRM strategies and polices can produce employees have positive attitudes and feelings about their jobs. Common employee satisfaction components include pay, promotion opportunities, fringe benefits, supervision, colleagues, job conditions, the nature of the work, communication and job security (Spector, 2000). Rose (2002) suggested that employees frustrated and bored with repetitive and standardized work have low commitment. A satisfied employee tends to be absent less often, make positive contributions, stay with the organization and radiate positive feelings towards customers (McShane and Von Glinow, 2000). Justice: HR strategies, polices and practices are powerful communicators regarding managements trustworthiness, fairness and commitment to employees. If management is perceived favourably, employees reciprocate with increased commitment to the organization (Whitener, 2001). Motivation: HRM strategies and policies stimulate employees to achieve a designated goal. Highly motivated employees work hard, come to work early and contribute more to the organizations strategic objectives. Performance: HRM contribute to employee job performance and productivity and the organizations overall profitability, growth and success. Trust: HRM promote trust between employees, management and the organization. Under trust, employees are willing to share information, genuinely cooperate with one another and not take advantage of other. Stone, R (2005) Human Resource Mangement, 5th ed, John Wiley Sons, Australia. Beer, M, Spector, B, Lawrence, P. R, Mills, D.Q, and Walton, R. E, (1984), Managing Human Assets, The Free Press, New York, p.19. Rose, E, The labour process and union commitment within a banking services call center, Journal of Industrial Relations, vol.44, no.1, 2002, p.40. McShane, S. L. and Von Glinow, M. A, (2000), Organization Behavior, McGraw-Hill, Boston. Whitener, E. M., Do high commitment human resource practices affect employee commitment A cross level analysis using hierarchical linear modeling, Journal of Management, vol. 27, no. 5, 2001, p.515. 2.3.1 Employee Job Satisfaction As mention before, one of the outcomes of HRM is job satisfaction. However, what causes employee satisfaction? The researchers Judge and Bono (2001) found that one of the primary causes is the perception of the job itself. And also job itself is the most important situational effect on job satisfaction. Other research also show that of all the major job satisfaction areas, satisfaction with the nature of the work itself which includes job challenge, autonomy, variety and scope are best predicts overall job satisfaction (Fried and Ferris, 1987; Parisi and Weiner, 1999; Weiner, 2000). Some general statements about the facets that seem to contribute the most to feelings of job satisfaction for most North American workers include mentally challenging work, high pay, promotions and friendly or helpful colleagues (Locke, 1976). For more detail, Spector (1997) concluded that the causes of job satisfaction can be classified into two major categories. First, the job environment itself and fac tors associated with the job are important influences on job satisfaction. This includes how people are treated, the nature of job tasks, relations with other people in the workplace, and rewards. Second, there are individual factors that the person brings to the job. This includes both personality and prior experiences. Both categories work together to influence employee job satisfaction. In this study, we mainly focus on the environment antecedents of job satisfaction. Following factors are the environmental causes of job satisfaction: Job Characteristics and Job Characteristics Theory Many studies have advocated job design as a means of enhancing job satisfaction by making jobs more interesting (Herzberg, 1968; Herzberg, Mausner and Snyderman, 1959). The job characteristic theory is that people can be motived by the intrinsic satisfaction they find in doing tasks. When they find their work to be enjoyable and meaningful, people will like their jobs and will be motivated to perform their jobs well (Hackman and Oldhams, 1976). The characteristics model see figure 2-2. Figure 2-2 Hackman and Oldhams (1976) Job Characteristics Model Core Characteristics Critical Outcomes Psychological States Skill Variety Task Identity Task Significance Experienced Meaningfulness Autonomy Experienced Responsibility Feedback Knowledge of Results Work Motivation Job Performance Job Satisfaction Attendance Growth Need Strength Source: Hackman and Oldhams, 1976 Organizational Constrains Conditions of the job environment that interfere with employee job performance are called organizational constraints. The constraints come from many aspects of the job, including other people and the physical work environment. As the study of Peters and OConnor (1980), organizational constraints have been shown to relate to job satisfaction. Significant relations have been found between various measures of constraints and job satisfaction (Jex and Gudanowski, 1992; Keenan and Newton, 1984; OConor et al., 1984; Spector et al., 1988). OConnor, Peters, Rudolf and Pooyan (1982) reported correlations of organizational constraints with five job satisfaction facets which are coworker, pay, promotion, supervision and work itself. Work-Family Conflict Work-family conflict has been found to correlate significant with job satisfaction. Employees who experience high levels of conflict tend to report low levels of job satisfaction (Bedeian, Burke and Moffett, 1988; Holahan and Gilbert, 1979; Lewis and Cooper, 1987; Rice, Frone and McFarlin, 1992). Organizations can adopt policies that either help people cope with or reduce work-family conflict. Thomas and Ganster (1995) studied the impact of organization policies and supervisor behavior on employee experience of work-family conflict and job satisfaction. Their research provides evidence that organizational policies such as child care and flexible work schedules can reduce work-family conflict and enhance job satisfaction. Behavior by supervisors that supports employees with family responsibilities was also found to have positive effects. Pay The correlation between level of pay and job satisfaction tends to be surprisingly small. Spector (1985) found a mean correlation between level of pay and job satisfaction. However, although pay level is not an important issue, pay fairness can be very important. Rice, Phillips and McFarlin (1990) reported a moderately large correlation between pay level and job satisfaction in a sample of mental health professionals who all had the same job. Workload Workload has been found correlated with job dissatisfaction as well as other job strains (Jex and Beehr, 1991). Jamal (1990) found significant negative correlations of workload with job satisfaction, and Karasek, Gardell and Lindell (1987) found that workload was negatively associated with job satisfaction. Control Control has been found to correlate significantly with all three categories of job strains (Jex and Beehr, 1991). Spector (1986) showed the mean correlations across studies of relations between control and job satisfaction. Spector, P.E. (2000) Industrial and Organizational Psychology, 2nd ed, John Wiley Sons, New York, p.19. Poulin, J. E., and Walter, C. A. (1992) Retention Plans and Job Satisfaction of Gerontological Social Workers, Journal of Gerontological Social Work, 19, pp. 99-114. Porter, L. W. (1962), Job attitudes in management: I. Perceived deficiencies in need fulfillment as a function of job level. Journal of Applied Psychology, 46, 375-384. Wolf, M. G. (1970), Need gratification theory: A theoretical reformulation of job satisfaction/dissatisfaction and job motivation. Journal of Applied Psychology, 54, 87-94. 2.3.2 The Consequences of Job Satisfaction and Dissatisfaction There are many positive or negative outcomes that relate to job satisfaction or dissatisfaction. These include not only work variables such as job performance and turnover but also non-work variables such as health and life satisfaction. Job Performance In fact, a large body of research shows that the relationship between satisfaction and performance is positive but usually very low and often inconsistent (Iaffaldano and Muchinsky, 1985). Why is this correlation between job attitudes and job behavior so low? Intuition suggests that we might work harder to pay back the organization for a satisfying job. However, intuition also suggests that we might be so busy enjoying our satisfying job that we have little time to be productive. For example, satisfying coworkers and a pleasant superior might lead us to devote more time to social interactions than to work. These contradictory intuitions provoke suspicion that the satisfaction causes performance might be incorrect. Iaffaldano, M.T. and Muchinsky, P.M. (1985), Jo satisfaction and job performance: A meta-analysis. Psychological Bulletin, 97, 251-273. Organizational Citizenship Behavior Organizational citizenship behavior (OCB) is behavior by an employee intended to help coworkers or the organization that contributes to organizational effectiveness (Organ, 1988; Schnake, 1991). Schnake (1991) hypothesized that OCB is caused by good treatment from the supervisor and by job satisfaction. In fact, job satisfaction and OCB have been found to intercorrelate (Becker and Billings, 1993; Farh, Podsakoff and Organ, 1990) Withdrawal Behavior Many theories hypothesize that people who dislike their jobs will avoid them, either permanently by quitting or temporarily by being absent or coming in late. Absence is a phenomenon that can reduce organizational effectiveness and efficiency by increasing labour costs. On many jobs, floaters or substitutes are required for each absent employee. The employee might continue to get paid, resulting in increased costs to pay substitutes. Where absence rates among employees is high, the costs can be quite high. Not surprisingly, organizations are concerned about absence. Theories of absence hypothesize that job satisfaction plays a critical role in an employees decision to be absent (Steers and Rhodes, 1987). People who dislike their jobs should be expected to avoid coming to work. On the other hand, most theories of turnover view turnover as the result of employee job dissatisfaction (Bluedorn, 1982; Mobley, Griffeth, Hand and Meglino, 1979). People who dislike their jobs will try to fin d alternative employment. Studies have been consistently in showing a correlation between job satisfaction and turnover (Crampton and Wagner, 1994; Hulin, Roznowski and Hachiya, 1985). Furthermore, it seems certain that this correlation is causal job dissatisfaction leads to turnover. Models of turnover place job satisfaction in the center of a complex process that involves factors both inside and outside of the employing organization. Figure 2-2 is a simplified model that shows how this process might work. Characteristics of the individual combine with characteristics of the job environment in determining level of job satisfaction. If the job satisfaction level is sufficiently low, the person will develop a behavioral intention to quit the job. That intention may lead to job search activities, which if successful will lead to turnover. Alternate employment opportunities are important because a person is not likely to quit without another job offer. Figure 2-2 Model of Employee Turnover as a Function of Job Satisfaction and Unemployment Rate Organization Factors Person Factors Job Satisfaction Intent to quit Search Behavior Turnover Availability of Alternatives Source: Spector, 1997 Burnout Burnout is a distressed emotional/psychological state experienced on the job. Where job satisfaction is an attitudinal response, burnout is more of an emotional response to the job. Burnout theory proposes that a person who is in a state of burnout experiences symptoms of emotional exhaustion and low work motivation, not unlike depression. Burnout correlates significantly with job satisfaction in that dissatisfied employees are likely to report high levels of burnout (Bacharach, Bamberger and Conley, 1991; Shirom, 1989). Physical Health and Psychological Well-Being Concerns have been raised that both physical and psychological health might be influenced by job attitudes. Individuals who dislike their jobs could experience adverse health outcomes. These outcomes include both physical symptoms and psychological problems (Spector, 1997). It has also been suggested that job dissatisfaction results in a shortened lifespan (Palmore, 1969). Many studies have been shown a link between health and job satisfaction. For example, researchers have reported significant correlations between job satisfaction and physical or psychosomatic symptoms, such as headache and upset stomach (Begley and Czajka, 1993; Fox, Dwyer and Ganster, 1993; Lee, Ashford and Bobko, 1990; O Driscoll and Beehr, 1994). Job dissatisfaction has also been found to be associated with emotional stated of anxiety (Jex and Gudanowski, 1992; Spector et al., 1988) and depression (Bluen, Barling and Burns, 1990; Schauboeck et al., 1992). Counterproductive Behavior Counterproductive behavior includes aggression against coworkers, aggression against the employer, sabotage and left (Spector, 1997). These behaviors have many causes, but often, they are associated with dissatisfaction and frustration at work. Chen and Spector (1992) found that job satisfaction correlated significantly with employee reports of engaging in aggression against others, hostility toward others, sabotage, and theft at work. Keenan and Newton (1984) found a relation between experiencing feelings of hostility at work and job satisfaction as well. Dissatisfied employees are more likely than their satisfied counterparts to engage in all of these behaviors. Life Satisfaction The research suggests that feelings in one area of life affect feelings in other areas. A person who is satisfied on the job is likely to be satisfied with life in general (Weaver, 1987). Studies consistently find that job satisfaction and life satisfaction are moderately and positively correlated (Judge and Watanabe, 1993; Lance, Lautenschlager, Sloan and Varca, 1989; Schaubroeck et al., 1992; Weaver, 1987). 2.4 Employee Satisfaction and Organizational Performance Organizational performance is a multidimensional concept. As illustrated by the list of thirty criterion measures identified by Cambell (1997). Performance is measured in terms of output (inappropriately referred to as productivity in the table) and outcome, profit, internal process and procedures, organizational structures, employee attitudes, organizational responsiveness to the environment and so on. More recently, one approach to measure organizational performance has become popular. This approach attempts to capture some of the contradictory nature of organizational performance is termed the balanced scorecard (Kaplan and Norton, 1992, 1993, 1996). This aims to measure performance in terms of four sets of indicators, each taking a different perspective (Kaplan and Norton 1996:76): Financial: to succeed financially, how should we appear to our shareholders? Customer: to achieve our vision, how should we appear to our customers? Internal business process: to satisfy our shareholders and customers, what business processes must we excel at? Learning and growth: to achieve our vision, how will we sustain our ability to change and improve? Therefore, about the relationship between employee satisfaction and organizational performance, the service-profit chain concept supported that there are direct relationships between profitability, customer loyalty, and employee satisfaction, loyalty, and productivity (Heskett et al. 1994). Moreover, a study conducted by a national retailer found that a happy employee will stick with the company, give better service to the customer and recommend company products to others (Wall Street Journal July 22, 1998). Other study of the 100 Best Companies to Work For finds that the companies with the most satisfied employees had an above-average annual return to shareholders (Fortune December 1, 1998). A Gallup study finds positive correlation between employee satisfaction and financial performance (Economist August 8, 1998). What is more, there are many studies about different industries also approved that the employee satisfaction correlated with organizational performance. Such as Kaplan an d Norton (1996) has found significant correlation between employee morale and customer satisfaction in an oil company. A survey of hospital employees finds significant correlations between nursing-staff satisfaction scores and patient loyalty (Atkins, Marshall and Javalgi 1996). Another correlational study using data collected for 298 public schools finds support for the link between satisfaction levels of teachers and school performance (Ostroff 1992). Thus, according to the previous literature, employs satisfaction is correlated to customer loyalty, financial performance, which in turn, affects the organizational performance.