For long time people used the phrase "personnel management" to describe the strategies to make sure that the human resource is used to achieve the business objectives. It was very obvious that the human resource was treated the same way as any other resource the organization have. Taylorism or Command and Control are good examples for this approach. However, the socio-political environment, the changes in the business world and the one village concept forced organizations to seek competitive advantage in many ways. Competitive advantage through human resource was one of the best ways adopted by successful organizations. This was the reason behind the birth of the Human Resource Management at the end of the last century. Beardwell and Claydon defined the HRM as "a collection of policies used to organize work in the employment relationship and centers on management of work and the management of people who undertake this work" (Beardwell and Claydon, 2010). Also, HRM defined as "the function responsible for establishing integrated personnel policies to support organization strategy" (Buchanan and Huczynshi, 2010). This new approach helped organizations to develop policies which reinforce each other to contribute to the business strategy and create an organizational environment where employees are highly motivated and committed to attain the organizational goals.
The HRM is abroad approach with two theoretical themes which shape the two extremes, soft and hard HRM. The soft HRM is more of management through enhancing the commitment and quality of employees by enhancing their skills, motivation and involvement. On the other hand, hard HRM emphasizes the strategy that uses human resource to achieve the business objectives. Here, human resource has less attention and managed like any other resource the organization use. Theories about both soft and hard HRM were developed and adopted within the range of human resource orientation, from employee predictability to flexibility, creativity and innovation. Some of these theories and models are going to be discussed in this essay.
I. Contingency Model:
It is also called the matching model where the HRM policies are formulated and implemented in a way that matches the organizational objectives (Beardwell and Claydon, 2010). According to this model, as one of the organization's resources, the human resource should be managed in a way that benefit the organization and achieve its goals. For example, the organization should select people who can meet the business needs. They should be trained, developed and rewarded in a manner that serves the business objectives. Also, this model assumes that there is no best way to managing people, rather, strategies will be different among organizations based on the organizational context. Normally, the organizational context can be affected by the culture, economy and the political situation. Christopher and Althakhri observed that management models do vary from country to country because managers from different cultures tend to adhere to the values, norms and beliefs of their societies (Christopher and Althakhri, 2008). For instance, Oman as a Muslim Arab country with strong tribal system has its unique management models that Omani managers follow and even expatriate managers working in Oman can be affected by these models. Another assumption made by the matching model was that conflicts and different views can not exist in the work environment simply because everybody is working toward the same objectives. This is just opposite the soft HRM that suggests that differences create the opportunities of innovation.
This is a model developed at Harvard University that represents the soft HRM. In this model, the interests of different groups are considered and used to shape the human resource strategies. Interests of the shareholders, employees, government and the community are recognized and fused in the business strategy. Different from other models, universalism assumes that the organization can attain its goals by discovering the set of practices that result in employee's high commitment and eventually high performance. Jeffery Pfeffer suggested 13 practices which result in high share value for organizations that apply these practices (Beardwell and Claydon, 2010):
- Employment security provision to encourage employees to share their knowledge and ideas and be more committed to the organization.
- Selective hiring to help the organization to choose the most appropriate available people among the applicants to fill the vacancy. This practice should be used to maximize the organization's human capital and minimize the training and development cost.
- Self management teams and local decision making to increase the employee involvement and accountability in making decisions after considering different views from different team members.
- High compensation based on the organizational performance to let employees feel that the better they perform the more they will get compensated. Also, high compensation shows the organization's appreciation for the effort employees made to improve the organizational performance and used as a retention tool as well.
- Extensive education and training to increase the value of the human capital and keep employees updated with the skills required to perform their tasks in a way that can achieve the competitive advantage.
- Reduced status distinctions and symbolic egalitarianism to avoid employees feeling of discrimination based on the position in the organizational hierarchy that always make those in the lower level de motivated.
- Extensive sharing of performance and financial information to show employees the impact of their performance on the organization which always pushes them to make a positive reaction.
- Incentive pay to motivate employees to improve their performance and develop the skills that they are getting paid for.
- Employee ownership to let them feel the responsibility of the task and ultimately carryout their jobs in the best way because of the ownership feeling.
- Participation and empowerment to increase the employees involvement in the decision making and therefore increase their commitment to these decisions.
- Cross utilization and cross training to increase employees productivity by increasing their knowledge in more than one area (Campbell, 1999).
- Wage Compression to pay employees equally.
- Promotion from within to motivate and encourage employees and retain them.
All these practices do affect the organization in a way or another depending on the context it is working in. Oxy will be measure against these practices in more details in later topics in this essay.