Human Resource Management (HRM)
Strategic nature
Predominantly deals with day-to-day issues
Ad hoc and reactive in nature a short-term perspective rather than strategic
Dealing with day-to-day issues; but proactive in nature and integrated with other management functions.
A long-term commitment, strategic view of human resources.
Psychological contract
Based on compliance on the part of the employee
Based on seeking willing commitment of the employee
Job design
Typically Taylorist/Fordist
Typically team-based
Organizational structure
Hierarchical
Tendency to vertical integration
Flexible with core of key employees surrounded by peripheral shells
High degree of outsourcing
Remuneration
Collective base rates
'Pay by position'
Any additional bonuses linked to Taylorist work systems
Maket-based
Individual & team performance
'Pay for contribution'
Recruitment
Sophisticated recruitment practices for senior staff only
Strong reliance on external local labour market for most recruitment.
Sophisticated recruitment for all employees
Strong internal labour market for core employees. Greater reliance on external labour market for non-core.
Training & development
Restricted to training non-managerial employees. Narrowly job-related. Management development limited to top executives and fast-track candidates
Transformed into a learning & development philosophy transcending job-related training. An ongoing developmental role for all core employees including non-management. Strong emphasis on management and leadership development
Employee relations perspective
Pluralist: collectivist; low trust
Unitarist: individualistic; high trust
Organization of the function
Specialist/professional
Bureaucratic & centralised
Largely integrated into line management for day-to-day HR issues
Specialist HR group to advise and create HR policy
Source: Armstrong, 2001.
British Airways: from Personnel Management to HRM
In 1980, British Airways (BA) was facing a loss in profits at the rate of £200 per minute due to the companies' weaknesses in customer service, primarily due to poor HRM in BA, and to related major behavioral and performance problems among staff. In 1983 Collin Marshall was appointed as Chief executive in BA, who viewed the personal aspects of the service as being the key to providing a competitive edge. Marshall basically restructured the company to provide the front-line employee with the information and authority needed to handle situations at the customer interface. He removed layers from the management structure and changed the emphasis from a divisional to a functional structure. Many managers were given front line duties to deal directly with the customer. Marshall had restructured the personnel function and created the HR department. The devolving of certain responsibilities forced managers into becoming accountable for staff performance and discipline. The results were visible by late 1980s as BA became a successful company (Lundy & Cowling, 1996).
Basically this case study proves that HRM is a restructured and enhanced version of the Personnel Management practice. Most companies like BA reorganized the personnel function to a HR function in the 1980's.
