HR managers

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HR managers use special philosophy. Human resources philosophy, which views the productivity of employees as being an economic resource of a firm or a nation. The employee himself, in his relationships to the other members of the organization, is viewed according to the concept of human dignity.

This approach provides for the economic aspect of personnel administration, which is judged in terms of the economic analysis of employee productivity, efficiency, effectiveness, costs, and profitability. On the other hand, the philosophical aspect of personnel administration is given credence, that is, the importance of recognizing and respecting the personal dignity of each human entity.

In summary, the human resources approach emphasizes the motivation and development of people through improving the attitudes and practices of key executives, clear workable standards for operations which provide guides for incorporating alternatives if the first procedure does not work, the development of personnel, establishment of organizational objectives and development, specifying job descriptions and performance standards, and encouraging innovation and creativity among subordinates (Singer, 1969, pp.53-58).

The idea of “management”—a separate role from workers focused on the planning, oversight, and monitoring of work—was appropriate for the Industrial Age, but some would suggest that it is no longer necessary in an era of autonomous, self-motivated knowledge workers. Will teams of computer programmers, marketing analysts, researchers, and people in other knowledge-intensive jobs essentially manage themselves? The human resources of a business are an integral part of all of its activities.

It should be recognized that development of those resources is dependent upon other organizational resources; consequently, selecting, developing, and utilizing human resources must be considered as one integrated process designed to incorporate both present and future needs of the firm. Therefore, organizational goals should be clearly defined and established so that selection can be based upon finding personnel capable of realizing those goals. As an organization grows and develops, its need for manpower with special skills, knowledge, and expertise are needed.

Usually, this increasing need tends to coincide with a shortage of such personnel because of the lead time needed to educate and train people to use the new technology. Thus, long-range manpower plans are needed to adjust to this imbalance. Also, other planning activities become involved (Cassell, 1965, pp. 55-81). Human resources management (HRM) involves the establishment and execution of policies, programs, and procedures that influence the performance, capabilities, and loyalty of the employees of an organization.

Through these policies and procedures, individuals are attracted, retained, motivated, and developed to perform the work of the organization. It is through these policies and procedures that the organization seeks to meld and shape the actions of its employees to operate successfully, comply with various public policies, provide satisfactory quality of employment, and improve its position in the marketplace through strengthened ability to compete and serve.

That is, service has replaced production as the driving force in the economy, and the prominent way value is added is through the expertise of knowledge workers and the ministrations of service providers. In systems like this, it becomes even more important to obtain and use the full talents of all employees in the organization. Thus, the skilful adoption and use of HRM policies becomes a significant lever through which to move and direct the performance of the organization.

As Beer, Spector, Lawrence, Mills, and Walton (1984) noted, HRM is really a series of policy choices about how employees are to be treated, paid, and worked. These policies will in turn impact and condition the nature of the employment relationship. Different policies lead to different outcomes in employee commitment, competence, and congruence with organizational goals. Likewise, each policy choice presents the decision maker with a distinctive cost and benefit alternative.

For example, compensation policy choices to pay either at the low, average, or high end of the labor market have rather dramatic implications for employee commitment to the organization and for costs to the employer. The fundamental rationale for effective management of human resources should be to identify and implement those policies, programs, and procedures that will yield the desired levels of loyalty, skill, and direction in the most cost-effective manner possible. The HRM function is of particular importance in the post-industrial economy (Bell, 1972; Schneider & Bowen, 1993, pp. 39-52).

In this emerging system, the critical factor in production has shifted from machines and equipment to the “knowledge” worker (McGregor, 1991). Human resources issues are extremely important in creating quality-oriented organizations. There are many human resources issues: training, breaking down barriers to build teams, driving out fear, eliminating quotas, creating conditions that foster pride of workmanship, including doing away with annual reviews and merit ratings, and supporting education and life-long learning.

Following this, human resources departments can expand their role in the organization they serve. Areas where human resources should become more involved include: employee selection; development and training; career development; performance management (aligning appraisal more with shared responsibility for quality, involving peers); designing innovative pay systems; taking a hard look at perquisites and status symbols within the organization; improving labor relations in unionized settings; and supporting widespread communication of performance results, objectives, and strategic plans.

Anyone who creates, develops, manipulates (including selecting and organizing), disseminates or uses knowledge to provide a competitive advantage or some other benefit contributing towards the goals of the organization. Thus, the product of a knowledge worker’s work is intangible: knowledge is the addition of meaning, context and relationships to data or information (this is sometimes referred to as “mature content”). Knowledge workers typically work in a team (whether local or virtual), and make extensive use of IT (Initial Space Environment Model, 2001).

For the first time the term “knowledge worker” was used by Peter Drucker to describe a change in the nature of work. As he pointed out: “Modern society is a society of large organized institutions. In every one of them, including the armed services, the center of gravity has shifted to the knowledge worker, the man who puts to work what he has between his ears rather than the brawn of his muscles or the skill of his hands” (Drucker, 1993, p. 3). The term knowledge worker flows easily off the tongues of managers these days. It borders on cliche status; still, it is too important to dismiss just because people use it loosely.

Economy wide employment trends illustrate the growing importance of work whose value comes from what people know, instead of what they produce with their physical powers. Let us attach the term knowledge worker to people in managerial, administrative, professional, technical, and sales jobs. In 1983, they represented 55 percent of the full-time workforce. Workers in service jobs, production and fabrication, forestry, and farming represented the other 45 percent (U. S. Bureau of the Census, 1995, p. 427). By 2000, continuing a steady, century-long shift, knowledge workers accounted for 66 percent of the full-time workforce.

All knowledge work is not created equal, however. The human capital market continues to evolve, with increasing demand for certain kinds of brainpower and decreasing demand for other kinds. Among professional and technical workers (the core of the knowledge worker class), things looked rosy. This category had the second highest job creation percentage each of the previous three years; companies have consistently created more technical and professional jobs than they have eliminated. The opposite is true for supervisory and middle-management jobs.

These groups showed the most anaemic job growth and elimination percentages far above creation percentages over the whole three years. Moreover, changes in the substance of the managerial job give further evidence of how human capital requirements continue to evolve. Two things seem to be happening at once. On the one hand, a broad spectrum of workers has taken on what used to be considered managerial tasks. At the same time, people with manager titles do not necessarily (or solely) oversee people. They may also act as analysts, coordinators, and problem solvers; they make decisions, oversee outsourced functions, and call on clients.

Knowledge workers have ascended; education has built human capital. By themselves, do these facts support the investor metaphor? Yes, but not much more strongly than the asset metaphor. The tiebreaker is flexibility. Financial investors move their capital when they think they can find higher returns elsewhere. Analysis by the Bureau of Labor Statistics (BLS, 2002) shows that a college degree provides particularly significant leverage when combined with later job training. A BLS economist looked at the economic effects of combining a college degree with additional skills training acquired after taking a job.

The analysis demonstrated that having a college degree as a foundation for additional learning was associated with a big boost in earnings. The extra time and effort required to finish college no doubt imparts some valuable knowledge that translates into earning power. Getting the degree also bespeaks initiative that doubtless contributes to greater productivity and higher compensation. Whatever the source of the effect, the BLS analysis lends credence to the investor metaphor—more human capital to invest means greater investment returns.

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