BACHELOR OF BUSINESS ADMINISTRATION (BBA YEAR 2)

Transcription

1 BACHELOR OF BUSINESS ADMINISTRATION (BBA YEAR 2) BUSINESS ADMINISTRATION 2A (HUMAN RESOURCE MANAGEMENT) STUDY GUIDE Copyright 2015 MANAGEMENT COLLEGE OF SOUTHERN AFRICA All rights reserved; no part of this book may be reproduced in any form or by any means, including photocopying machines, without the written permission of the publisher REF: BADM2A

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3 TABLE OF CONTENTS Section Title of Section Page Aims of the Module 2 Learning Outcomes 2 3 How to Use this Module Introduction Components of Human Resource Management The Evolution of Human Resource Management Strategic Human Resource Management Challenges facing Human Resource Management Bibliography MANCOSA BBA Year 2 1

4 AIMS OF THIS MODULE At the end of this module the learner will be able to: Define the sphere of responsibility of Human Resource Management. Describe the components of a Human Resource Management system. Evaluate the evolution of Human Resource Management. Explain the relationship between Human Resource strategy and Business strategy. Identify the challenges facing Human Resource Management. LEARNING OUTCOMES Section 1: Introduction 1. Understand the structure of the module 2. Understand the learning areas and content of the module 3. Understand how the learning areas are relevant to each other Section 2: Components of Human Resource Management 4. Provide a definition of Human Resource Management 5. Identify and discuss the responsibilities of Human Resource Management 6. List and explain the various functions of Human Resource Management 7. Identify and discuss the competencies required of the Human Resource professional Section 3: The Evolution of Human Resource Management 8. Explain Pre-Scientific Management and identify its impact on Human Resource Management 9. Explain the Scientific Management approach and describe its impact on Human Resource Management 10. Describe the Human Relations approach and identify its impact on Human Resource Management 11. Explain the Human Resource approach and describe its impact on Human Resource Management 12. Describe the changes in Human Resource paradigms. MANCOSA BBA Year 2 2

5 Section 4: Strategic Human Resource Management 13. Define strategy. 14. Identify and explain the phases of strategic management. 15. Identify and discuss the various types of organisational strategies. 16. Define strategic human resource management. 17. Identify and describe the four models of human resource management. 18. Discuss the role of Human Resource Management in strategy formulation. 19. Discuss the role of Human Resource Management in strategy implementation. 20. Critically discuss the success of Human Resource Management in fulfilling the role of strategic partner. Section 5: Challenges Facing Human Resource Management 21. Critically discuss the challenge of employee productivity and its implications for Human Resource Management. 22. Critically discuss the challenge of quality improvement and its implications for Human Resource Management. 23. Explain the challenge of downsizing, delayering and decruiting and analyse its impact on the work of the Human Resource professional. 24. Explain the challenge of the changing workforce and analyse its impact on Human Resource Management. 25. Critically discuss the challenge of the global economy and its implications for Human Resource Management. 26. Explain the challenge of the impact of government on the field of Human Resources. 27. Critically discuss the challenge of achieving quality of working life and its implications for Human Resource Management. 28. Explain the challenge of technology and the impact it has on the work of the Human Resource professional. MANCOSA BBA Year 2 3

6 HOW TO USE THIS MODULE This module, Human Resource Management, should be studied using this Study Guide together with the prescribed text. Prescribed Texts The prescribed textbook for Human Resource Management is: Grobler, P., Wärnich, S., Carrell, M.R., Elbert, N.F. & Hatfield, R.D. (2011) Human Resource Management in South Africa. Fourth Edition. UK: Thomson Learning. Recommended Reading At the beginning of each section in this Study Guide the relevant pages in your prescribed texts, which you are required to read, will be indicated. A number of recommended texts will also be listed. You are encouraged to read the recommended texts to enhance your knowledge and your learning experience. Learning Outcomes At the beginning of each section in this Study Guide you will find a list of learning outcomes. These outcomes detail the competence which you should have achieved on completion of the section. Exercises Throughout this Study Guide you will find exercises with which you need to engage. The purpose of these exercises is to: facilitate your engagement with the prescribed texts; develop your critical and reflective thinking abilities; provide you with opportunities to apply your knowledge; assess what you have learnt. The exercises which you will be required to complete are Think Points ; Activities ; Reading Activities ; and Self Check Activities. MANCOSA BBA Year 2 4

7 THINK POINT A Think Point requires that you stop and think about an issue. It may require you to think about your own experience or provide an example. ACTIVITY An Activity provides you with an opportunity to apply what you have learnt. In most cases there are no right or wrong answers to these activities. READING ACTIVITY A Reading Activity requires that you read, reflect on and summarise a journal article relevant to the subject matter being studied. The journal articles that are referred to are available from MANCOSA s electronic library (EBSCO). MANCOSA BBA Year 2 5

8 SELF CHECK ACTIVITY At the end of each section there will be a Self Check Activity. These activities comprise multiple choice questions and provide you with an opportunity to assess your understanding of what you have learnt. Answers to these activities are provided at the end of each section. MANCOSA BBA Year 2 6

9 SECTION 1 INTRODUCTION MANCOSA BBA Year 2 7

10 CONTENTS Section 1 Learning Outcomes Reading 1.1 Introduction 1.2 Contents and Structure 1.3 Summary MANCOSA BBA Year 2 8

11 LEARNING OUTCOMES The specific outcomes for this introductory section are that on its completion learners will: 1. Understand the structure of the module 2. Understand the learning areas and content of the module 3. Understand how the learning areas are relevant to each other READING There is no prescribed reading or recommended reading for this introductory section. 1.1 Introduction This module, Human Resource Management, forms an integral part of the MANCOSA Diploma in Advanced Management qualification. It develops the learners understanding of components of Human Resource Management, the evolution of Human Resource Management, Strategic Human Resource Management, as well as the challenges confronting Human Resources. Overall, the module provides a solid introduction to the field of Human Resources. MANCOSA BBA Year 2 9

12 Overview of Human Resource Management Module Challenges Facing Human Resource Management (Section 5) Strategic Human Resource Management (Section 4) Evolution of Human Resource Management (Section 3) Components of Human Resource Management (Section 2) Figure 1: Overview of Human Resource Management Module 1.2 Contents and Structure Section 1: Introduction This is the first section of the Study Guide. It provides the learner with an overview of the key learning areas. Section 2: Components of Human Resource Management Section 2 explores Components of Human Resource Management and addresses: What is Human Resource Management? Human Resource Management Responsibilities Human Resource Management Functions Human Resource Management Competencies MANCOSA BBA Year 2 10

13 Section 3: The Evolution of Human Resource Management Section 3 explores the Evolution of Human Resource Management and addresses: Before Scientific Management Scientific Management Approach Human Relations Approach Human Resource Approach Changes in Human Resource Management Paradigms Section 4: Strategic Human Resources Management Section 4 explores Strategic Human Resource Management and addresses: Strategic Management Strategic Human Resources Management Strategy Formulation Strategy Implementation Human Resources Success as a Strategic Partner Section 5: Challenges Facing Human Resource Management Section 5 explores Challenges Facing Human Resource Management and addresses: Employee Productivity Quality Improvement Downsizing, Delayering and Decruiting The Changing Workforce The Global Economy The Impact of Government Quality of Working Life Technology 1.3 Summary This section provided an introduction to this module. It outlined the contents and structure of the key learning areas, and identified how these learning areas provide the learner with a solid foundational understanding of Human Resource Management. MANCOSA BBA Year 2 11

14 MANCOSA BBA Year 2 12

15 SECTION 2 COMPONENTS OF HUMAN RESOURCE MANAGEMENT MANCOSA BBA Year 2 13

16 CONTENTS SECTION 2 COMPONENTS OF HUMAN RESOURCE MANAGEMENT Learning Outcomes Reading 2.1 Introduction 2.2 What is Human Resource Management? 2.3 Human Resource Management Responsibilities 2.4 Human Resource Management Functions 2.5 Human Resource Management Competencies 2.6 Summary MANCOSA BBA Year 2 14

17 LEARNING OUTCOMES The overall outcome for this section is that, on its completion, the learner should be able to demonstrate an understanding of the responsibilities and components of Human Resource Management. This overall outcome will be achieved through the learner s mastery of the following specific outcomes, in that the learner will be able to: 1. Provide a definition of Human Resource Management. 2. Identify and discuss the responsibilities of Human Resource Management. 3. List and explain the various functions of Human Resource Management. 4. Identify and discuss the competencies required of the Human Resource professional. READING Prescribed Reading: Prescribed Textbook Grobler, P., Wärnich, S., Carrell, M.R., Elbert, N.F. & Hatfield, R.D. (2011) Human Resource Management in South Africa. Fourth Edition. UK: Thomson Learning. pp (Chapter 1). Recommended Reading: Books Hall, D.T. & Goodale, J.G. (1986) Human Resource Management: Strategy, Design and Implementation. Glenview: Scott-Foresman. Hellriegel, D., Jackson, S.E., Slocum, J., Staude, G., Amos, T., Klopper, H.B., Louw, L. & Oosthuizen, T. (2004) Management. Second South African Edition. Cape Town: Oxford University Press. pp (Chapter 11). Jones, G.R. & George, J.M. Contemporary Management. Third Edition. Boston: Irwin McGraw-Hill. pp (Chapter 11). MANCOSA BBA Year 2 15

18 Mullins, L.J. (1999) Management & Organisational Behaviour 5 th Ed. London: Financial Times Pitman Publishing. pp (Chapter 19). Nieman, G. (Ed) & Bennett, A. (Ed) (2006) Business Management: A Value Chain Approach. Second Edition. Pretoria: Van Schaik Publishers. pp (Chapter 11). Noe, R.A., Hollenbeck, J.R., Gerhart, B. & Wright, P.M. (2000) Human Resource Management: Gaining a Competitive Advantage. Third Edition. Boston: Irwin McGraw-Hill, pp 3 36 (Chapter 1). Snell, S. & Bohlander, G. (2007) Human Resource Management. UK: Thomson South Western. pp 4, (Chapter 1). Swanepoel, B. (Ed.), Erasmus, B., Van Wyk, M. & Schenk, H. (2003) South African Human Resource Management: Theory & Practice. Third Edition. Cape Town: Juta. pp (Chapter 1) Journals Yeung, A., Brockbank, W. & Ulrich, D. (1994) Lower Cost, Higher Value: Human Resource Function in Transformation Human Resource Planning. Vol. 17, No. 3 MANCOSA BBA Year 2 16

19 Introduction This section examines the various Components of Human Resource Management through addressing the following areas: What is Human Resource Management? Human Resource Management Responsibilities Human Resource Management Functions Human Resource Management Competencies 2.1 What is Human Resource Management (HRM)? THINK POINT Based on your exposure so far to the field of Human Resources (e.g. in working in an organisation / in reading about it / in talking to friends, family and teachers about it), how would you define Human Resource Management? Comment on Think Point Various definitions of Human Resource Management exist. Some of these are provided below. Human Resources Management is the process through which an optimal fit is achieved among employee, job, organisation and environment so that employees reach their desired level of satisfaction and performance and the organisation meets its goals (Hall & Goodale, 1986: 6). Human Resource Management includes activities that managers engage in to attract and retain employees and to ensure that they perform at a high level and contribute to the accomplishment of organisational goals (Jones & George, 2003: 365). MANCOSA BBA Year 2 17

20 Human Resource Management refers to the policies, practices and systems that influence employees behaviour, attitudes and performance (Noe, Hollenbeck, Gerhart & Wright, 2000: 4). The organisation s human resource management function is that part of the management process that specialises in the management of people in the organisation. It consists of practices that help to achieve the organisation s objectives and thus to gain and sustain competitive advantage (Nieman & Bennett, 2006: 243). Human Resource Management is the process of managing human talent to achieve an organisation s objectives (Snell & Bohlander, 2007: 4). These five definitions of Human Resource Management not only have similarities but also place an emphasis on different aspects of people management. From the above definitions the following is evident about Human Resource Management: The focus of Human Resource Management is the management of people or human talent. Human Resource Management ensures fit or congruency between the employee, job, organisation and environment. People are managed in such a way so as to ensure that employees are satisfied and the organisation achieves its goals and attains competitive advantage. Human Resource Management involves policies, practices, systems and activities directed towards the management of people. 2.3 Human Resource Management Responsibilities Human Resource professionals need to work together with line management in the management of the organisation s human capital. The Human Resource professionals key responsibilities in this regard are to formulate and implement policy, advise and counsel, render a service, control personnel affairs, communicate, as well as be an employee advocate (Snell & Bohlander, 2007; Nieman & Bennett, 2006, Grobler et al., 2011). MANCOSA BBA Year 2 18

21 Employee Advocate Formulate & Implement Policy Communicate HR RESPONSIBILITIES Advise & Counsel Control Personnel Affairs Render a Service Figure 2: Overview of HR Responsibilities Formulate and Implement Policy: Human Resource professionals draft policies and procedures relevant to the organisation s people management. Once accepted by management these policies and procedures then need to be implemented together with line management. The Human Resource department is responsible for monitoring the implementation of HR policy by line departments. They also assist line management in the interpretation of the policies (Snell & Bohlander, 2007). Advise & Counsel: The Human Resource professional acts as an internal consultant to employees, supervisors, managers and executives. Their knowledge of internal people management issues and the dynamics of the external environment allow the Human Resource professional to provide invaluable advice for the making of organisational decisions (Snell & Bohlander, 2007). MANCOSA BBA Year 2 19

22 Render a Service: Human Resource professionals provide a range of services such as recruiting, selecting and training. The services offered by HR should be directed towards facilitating the achievement of the organisation s goals (Snell & Bohlander, 2007). Control Personnel Affairs: The Human Resource professional monitors and controls the implementation of Human Resource related policies and procedures. Examples of control functions which Human Resource professionals perform include the following: o Analysis of employment related data (e.g. recruitment, training, promotion statistics) to identify the degree to which employment equity goals are being achieved. o Analysis of data from performance appraisals for the purposes of determining whether performance management is being fairly conducted. o Analysis of absenteeism and grievances to determine problem areas (Grobler et al., 2011). Communicate: Communication is critical to the effective functioning of any organisation, and Human Resource professionals play a critical role in the designing and implementing company wide communication strategies. Examples of types of communication methods which the Human Resource department facilitates are: o New employee orientation o Bulletin boards o Communication meetings o Newsletters o Employee handbooks o Surveys (Grobler et al., 2011). Employee Advocate: An important responsibility of the Human Resource professional is to be an employee advocate. This involves actively listening to employees concerns and addressing these with management (Snell & Bohlander, 2007). In this way, Human Resource professionals can facilitate greater fit between the employees and the organisation and in so doing promote employee satisfaction. MANCOSA BBA Year 2 20

23 2.4 Human Resource Management Functions ACTIVITY This activity requires that you interview a Human Resource professional about the various Human Resource functions that the Human Resource Department performs. If you are currently employed within an organisation, set up a ½ hour interview with the organisation s HR Manager or HR Consultant. If you are not currently employed, set up a ½ hr interview with a family member, friend or acquaintance who works in the field of Human Resource Management. During the interview, ask the HR Manager / HR Consultant the following questions and make notes on his / her responses in the space provided below. 1. Describe the functions that your Human Resource department performs? MANCOSA BBA Year 2 21

24 2. Which of the functions that you have described does your Human Resource department perform the best? Why do you say this? 3. Which of the functions that you have described does your Human Resource department perform poorly? Why do you say this? Comment on Activity Learners responses will differ based on the HR professional whom they interview. It should be interesting for the learner to compare the HR professional s responses with the information provided in sections below. MANCOSA BBA Year 2 22

25 HR Planning Job Analysis Recruitment & Selection Placement Incorporation Training & Development Performance Management Remuneration & Benefits Labour Relations HR Administration Business Administration 2A Overview of Human Resource Functions The Human Resource department performs a number of functions which may either be categorised as providing for Human Resource provisioning or Human Resource retention. While Human Resource provisioning provides for bringing human capital into an organisation, Human Resource retention involves strategies and practices to maintain the existing human capital within the organisation while tapping into their full potential. Human Resource Functions Human Resource Provisioning Human Resource Retention Figure 3: Overview of Human Resource Functions The Human Resource functions may be performed exclusively by the Human Resource department, or in conjunction with other departments within the organisation (Grobler et al., 2011). MANCOSA BBA Year 2 23

26 2.4.2 Human Resource Provisioning Functions The functions involved in Human Resource Provisioning include human resource planning, job analysis, recruitment and selection, placement and incorporation (Nieman & Bennett, 2006). Each of these will be discussed below. Human Resource Planning Human Resource Planning may be defined as the process of anticipating and making provision for the movement of people into, within and out of an organisation (Snell & Bohlander, 2007: 48). For Human Resource Planning to be effective, it is critical that it is linked to the organisation s strategic goals. Forecasting the number of Human Resources required in the short, medium and long term is influenced by factors such as: o the current and future profile of the existing workforce (e.g. retirements, skills levels) o the current strategic plans of the company (e.g. planned restructuring, planned future expansions) o the external environment (e.g. economic climate, technological advancement) (Nieman & Bennett, 2006). THINK POINT What piece of employment related legislation has a significant impact on the Human Resource Planning activities of companies? Comment on Think Point The Employment Equity Act of 1998 has a considerable impact on the Human Resource Planning initiatives of South African organisations. This piece of legislation requires that organisations put in place an employment equity plan with goals to increase the representivity of their workforce. South African workforces need to transform to reflect the economically active population in terms of race and gender. MANCOSA BBA Year 2 24

27 Job Analysis & Design Job analysis may be defined as the systematic process of collecting, evaluating and arranging of information about tasks, duties and responsibilities of a job (Nieman & Bennett, 2006: 246). Job analysis results in the generation of two types of documents: o Job description, which outlines the tasks, responsibilities and duties of a particular job (Nieman & Bennett, 2006). o Job specification, which details the competencies required of the incumbent who is to hold the position. Job analysis and design is an important component of Human Resource Management, in that well designed jobs, which provide a sufficient level of challenge, can contribute considerably to an employee s satisfaction and motivation, thereby influencing productivity and contributing to the achievement of organisational goals (Grobler et al., 2011). Recruitment & Selection While recruitment involves the search for a variety of qualified candidates to fill a particular position, selection involves a process of choosing the most suitable individual from a group of applicants (Nieman & Bennett, 2006). Sources that are used to attract and recruit candidates for a particular job include newspaper advertisements, electronic recruitment sites, unsolicited applications (e.g. walk in candidates who drop off their CVs) and educational institutions. Legislation, particularly the Employment Equity Act and Labour Relations Act, impact significantly on recruitment practices (Grobler et al., 2011). Selection follows recruitment activities. A typical selection process may entail a preliminary selection interview, the completion of an application form and application assessments, the checking of references, a final interview and a medical examination. Following this, a choice of candidate will be made and an offer of employment will be extended to him / her. If the candidate accepts the offer, this will result in appointment (Nieman & Bennett, 2006). MANCOSA BBA Year 2 25

28 The Human Resource department will fulfill a staff role in the selection process they will coordinate the process, screen the applicants and make a recommendation as to who they believe is the most suitable candidate. Unions and workplace forums may be involved in the interests of transparency, but it is the line manager who makes the final decision on the candidate to be appointed (Nieman & Bennett, 2006). Placement Placement involves the process by which a newly appointed employee is placed in an organisation, or where existing employees are transferred to new positions, demoted or promoted. So as to ensure that the employee contributes to the achievement of the organisation s goals, it is imperative that there is fit between the new job incumbent and the job itself (Nieman & Bennett, 2006). If a fit is achieved between the job incumbent and the position, there should be lower turnover and more motivated and productive employees. Incorporation The process of incorporation is important to ensure that the new employee settles into his / her new position and socialises effectively within the work environment. Incorporation is facilitated by the following initiatives: o Orientation, where the employee is provided with information regarding the organisation and its culture. o Induction, where information specific to the employee s position and his / her department is provided (Nieman & Bennett, 2006). Orientation is usually implemented by the Human Resource department and induction by the employees new supervisor (Nieman & Bennett, 2006). MANCOSA BBA Year 2 26

29 2.4.3 Human Resource Retention The functions involved in maintaining and retaining an organisation s Human Resources include training and development, performance management, remuneration and benefits, job design and re-design and HR administration. Each of these is discussed below. Training and Development While training is the planned systematic and organized process of providing employees with the specific knowledge and skills needed for them to perform their present jobs effectively, development refers to the systematic, planned experience to provide employees with knowledge, skill, abilities, insights and attitudes to prepare them to perform jobs the organisation will need in the future (Nieman & Bennett, 2006: 251). Therefore training has a short term objective, while development has a long term objective. Some training and development methods include job rotation, programmed instruction, videos, simulation, role-playing and interactive media (Hellriegel, Jackson, Slocum, Staude, Amos, Klopper, Louw, Oosthuizen, 2004). Performance Management Performance management provides information that guides the training and development function in an organisation. Performance appraisal may be defined as the process of systematically evaluating every employee s job-related strengths, developmental needs, and progress toward achieving goals, and then determining ways to improve the employee s job performance (Hellriegel et al., 2004: 247). The appraisal process involves: o Setting agreed work standards o Assessing the employee s work performance against the agreed work standards o Giving feedback to the employee about his / her performance in relation to the work standard with the aim of improving the employee s existing performance (Nieman & Bennett, 2006). MANCOSA BBA Year 2 27

30 Remuneration and Benefits: Employees receive remuneration in return for their services. The remuneration package is both financial (monetary) and non-financial (e.g. amount of leave, type of working environment). Remuneration is determined after conducting a job analysis followed by job evaluation. Comparisons are also made with remuneration packages offered by other companies. Following this, the remuneration package of the job is determined. Remuneration may or may not be increased following performance appraisal (Nieman & Bennett, 2006). Benefits, also known as indirect compensation or indirect remuneration, are what employees receive over and above their wages or salaries (Hellriegel et al., 2004). They are generally not linked to performance and are usually accepted as part of the conditions of service (Nieman & Bennett, 2006). South African legislation compels organisations to provide certain benefits, such as workmen s compensation and unemployment insurance. In order to attract the best employees, a company may decide to offer additional benefits such as group insurance and housing subsidies (Nieman & Bennett, 2006). Labour Relations Labour relations is concerned with the relations (primarily collective but also to a lesser extent individual) between employer(s) (and / or manager(s) as the representatives of the employer) and workers (and/or their representatives such as trade unions) which develop from employment relationships and which are essentially concerned with balancing the various interests of, and regulating the levels of cooperation and conflict between, the parties involved. In all of this, the government and its relevant representatives, institutions, structures, systems and laws play an important, though secondary role (Swanepoel, Erasmus, Van Wyk & Schenk, 2003: 616). Labour unions as well as South Africa s labour legislation has a considerable impact on the drafting and implementation of Human Resource policies and procedures (Grobler et al., 2011). MANCOSA BBA Year 2 28

31 The following pieces of legislation impact on all the functions of the Human Resource department: o Labour Relations Act o Basic Conditions of Employment Act o Unemployment Insurance Act o Occupational Health and Safety Act o Compensation for Occupational Injuries and Diseases Act o Employment Equity Act o Skills Development Act o Skills Development Levies Act HR Administration The Human Resource department is also responsible for the administration of personnel affairs, such as updating records, calculating and paying wages and salaries, administering benefits, and recording leave (Nieman & Bennett, 2006). In recent years HR s administrative tasks have become streamlined and more efficient as a result of the implementation of Human Resource Information Systems (HRIS) (Grobler et al., 2011). 2.5 Human Resource Management Competencies THINK POINT Now that you have developed an understanding of the responsibilities and functions of Human Resource Management, what do you think are the competencies which the Human Resource professional requires in order to effectively perform his / her job? MANCOSA BBA Year 2 29

32 Comment on Think Point Yeung, Brockbank and Ulrich (1994) identify that the Human Resource Professional requires four sets of competencies in order to effectively fulfill his / her role in the organisation. These sets of competencies are diagrammatically presented below. HUMAN RESOURCE MANAGEMENT COMPETENCIES BUSINESS MASTERY Business acumen Customer focus External relations HUMAN RESOURCE MASTERY Staffing Performance management Remuneration & Reward Communication Organisational Design PERSONAL CREDIBILITY Trust Relationships with others Live values Courage CHANGE MASTERY Interpersonal skills Influence Problem solving skills Creativity Figure 4: Competencies for Effective Human Resource Management (Yeung et al., 1994) As the diagram above shows, Human Resource professionals require a variety of competencies: Business Mastery skills are required as the Human Resource professional must know and support the organisation for which he / she works for. Human Resource Mastery skills are required so that the Human Resource professional may effectively carry out all of the Human Resource functions (e.g. recruitment, selection, training, etc.). Change Mastery skills are required to enable the Human Resource professional to assist individual employees and the organisation to deal with and harness change. Personal Credibility is essential to the Human Resource professional being accepted and trusted by both the organisation s employees and management (Yeung et al., 1994). MANCOSA BBA Year 2 30

33 2.6 Summary This section explored the various components of Human Resource Management. Definitions of Human Resource Management were examined and the responsibilities which the Human Resource professional is required to fulfill were explored. The various Human Resource Management functions were studied, as were the competencies required of the Human Resource professional. The next section will focus on the Evolution of Human Resource Management. MANCOSA BBA Year 2 31

34 SELF CHECK ACTIVITY Now that you have completed this section on the Components of Human Resource Management, check your understanding by completing the multiple choice questions below and on the pages that follow: 1. Zinzi is an HR Consultant at Calls Incorporated, a cellular telephone service provider. She has been with the organisation for 5 years now and has proved her worth as an invaluable resource within the company s Human Resource Department. Her competent approach has gained her the respect of both line management and employees. As Zinzi enters her office building today, she is approached by a group of female employees who work in the call centre. They walk with her to her office and close the door so that they can discuss their issues in private. They explain to Zinzi that they are worried about the tough approach which their manager takes with regards to family responsibility issues. Just last week Rose s (a female call centre consultant) baby was admitted to hospital with pneumonia and their manager refused to let her take time off to spend with her child. This is not the first time that this has happened. The employees also explain to Zinzi that their manager often demands that they work overtime and this results in them missing their children s soccer matches and school plays. Zinzi is concerned to hear about the total lack of respect for family responsibility on the part of the manager and promises the group of employees that she will address the issue immediately with senior management and find a solution. In this example, Zinzi is fulfilling which of the following Human Resource responsibilities? A. Formulate and Implement Policy B. Advise and Counsel C. Control Personnel Affairs D. Be an Employee Advocate MANCOSA BBA Year 2 32

35 2. After bringing the total lack of respect on the part of the Call Centre Manager to the attention of senior management, Zinzi decides to formulate a policy and procedure document on family responsibility. This policy and procedure document outlines Call Incorporated s approach to family responsibility and details the actions which managers must take to support the organisation s family friendly approach. Zinzi presents this draft policy and procedure to the Executive Committee for approval. In this example, Zinzi is fulfilling which of the following Human Resource responsibilities? A. Formulate and Implement Policy B. Advise and Counsel C. Control Personnel Affairs D. Be an Employee Advocate 3. Mncedisi is responsible for HR Planning at Dynamic Technologies. He is busy preparing a 5 year HR Plan. Which of the following factors should Mncedisi take into consideration when preparing the HR Plan? A. The company s strategic plan B. The external environment C. The current profile of the existing workforce D. All of the above 4. Which of the following describes a job specification? A. A document that outlines the tasks, responsibilities and duties of a particular job. B. A document that details the competencies required of the incumbent who is to hold the position. C. Both A and B D. Neither A nor B MANCOSA BBA Year 2 33

36 5. Indera is a newly recruited HR Consultant at Impact Consulting. Her first assignment is to recruit an HR Administrator for the HR Department. Which of the following could Indera use to recruit applicants for the position? A. Newspaper advertisements B. Educational institutions C. Electronic recruitment sites D. All of the above 6. Once Indera has a group of candidates for the position of HR Administrator, who else should she include in the selection process? A. The line manager B. The unions C. Both A and B D. Neither A nor B 7. Pat, the HR Director at Impact Consulting believes that Indera, the newly appointed HR Consultant, shows considerable potential. Pat is busy preparing the succession plan for the department and in her plan she identifies Indera as having the potential to grow into and take on the position of HR Director in a couple of years. This requires that Indera be given the opportunity to develop the skills necessary for the position of HR Director. Which of the following would be most appropriate in preparing Indera for the position of HR Director? A. Training B. Development C. Job rotation D. No intervention is required MANCOSA BBA Year 2 34

37 8. Indera is in the process of designing the remuneration package for the position of HR Administrator. Which of the following are essential for her to include in the remuneration package as legislated benefits? A. Group life and disability insurance B. Workmen s compensation C. Unemployment insurance D. B and C 9. Mthandeki has recently graduated from Gauteng University and last month he secured a position at Impact Consulting. Pat, the HR Director, is concerned about the work that Mthandeki is performing and his competence. Just yesterday, Mthandeki prepared a 2 year HR Plan which was flawed in that it did not take cognisance of Impact Consulting s strategy. Pat is concerned as this seems to indicate that Mthandeki is lacking in terms of which of the following competencies: A. Business Mastery B. HR Mastery C. Change Mastery D. Personal Credibility 10. Pat, the HR Director, has asked Mthandeki to visit the Production Department and assist the production supervisors with the implementation of the company s new performance management system. After Mthandeki has spent a morning with the Production Department, the Production Manager phones Pat. He indicates that he is not comfortable with Mthandeki and asks that Lindiwe (another HR Consultant) takes over from Mthandeki in assisting the department with performance management. This example suggests that Mthandeki is lacking which of the following A. Business Mastery B. HR Mastery C. Change Mastery D. Personal Credibility competency sets? MANCOSA BBA Year 2 35

38 Answers to Self-Check Questions 1. D 2. A 3. D 4. B 5. D 6. C 7. B 8. D 9. A 10. D MANCOSA BBA Year 2 36

39 SECTION 3 THE EVOLUTION OF HUMAN RESOURCE MANAGEMENT MANCOSA BBA Year 2 37

40 CONTENTS SECTION 3 THE EVOLUTION OF HUMAN RESOURCE MANAGEMENT Learning Outcomes Reading 3.1 Introduction 3.2 Before Scientific Management 3.3 Scientific Management Approach 3.4 Human Relations Approach 3.5 Human Resource Approach 3.6 Changes in Human Resource Management Paradigms 3.7 Summary MANCOSA BBA Year 2 38

41 LEARNING OUTCOMES The overall outcome for this section is that, on its completion, the learner should be able to demonstrate an understanding of the evolution of Human Resource Management. This overall outcome will be achieved through the learner s mastery of the following specific outcomes, in that the learner will be able to: 1. Explain Pre-Scientific Management and identify its impact on Human Resource Management. 2. Explain the Scientific Management approach and describe its impact on Human Resource Management. 3. Describe the Human Relations approach and identify its impact on Human Resource Management. 4. Explain the Human Resource approach and describe its impact on Human Resource Management. 5. Describe the changes in Human Resource paradigms. READING Prescribed Reading: Prescribed Textbook Grobler, P., Wärnich, S., Carrell, M.R., Elbert, N.F. & Hatfield, R.D. (2011) Human Resource Management in South Africa. Fourth Edition. UK: Thomson Learning. pp 3 8. Prescribed Journal Ulrich, D. (1998) A New Mandate for Human Resources. Harvard Business Review. January / February, 76: 1, pp MANCOSA BBA Year 2 39

42 Recommended Reading: Books Brewster, C., Carey, L., Dowling, P., Grobler, P., Holland, P. & Wärnich, S. (2003) Contemporary Issues in Human Resource Management. Second Edition. Cape Town: Oxford University Press. pp Mullins, L.J. (1999) Management & Organisational Behaviour 5 th Ed. London: Financial Times Pitman Publishing. pp Swanepoel, B. (Ed.), Erasmus, B., Van Wyk, M. & Schenk, H. (2003) South African Human Resource Management: Theory & Practice. Third Edition. Cape Town: Juta. MANCOSA BBA Year 2 40

43 3.1 Introduction Human Resource Management has evolved over many years. It is significantly different today to what it entailed when it first emerged during the late 1800s and early 1900s. This section explores The Evolution of Human Resource Management through addressing the following areas: Before Scientific Management Scientific Management Approach Human Relations Approach Human Resource Approach Changes in Human Resource Management Paradigms Summary ACTIVITY This section of the Human Resource Management module explores theories such as Scientific Management and the Human Relations approach. You have previously dealt with these theories in Business Management 1A. What can you remember about these theories? Record your recollections in the space provided below. Scientific Management Approach: MANCOSA BBA Year 2 41

44 Human Relations Approach: Comment on Activity This was a revision exercise. Learners should compare their responses to this activity with the information provided about Scientific Management in section 3.3 and the Human Relations approach in section Before Scientific Management Prior to the Industrial Revolution organisations did not exist. The majority of people occupied themselves with home crafts and agriculture (Swanepoel, Erasmus, Van Wyk & Schenk, 2003). Therefore there was no formal employment relationship and no need for a focus on Human Resource Management. The Industrial Revolution, occurring in the late eighteenth century and early nineteenth century, brought about technological, social and economic changes. Working life moved from the family home as factories were established and people were employed (Swanepoel et al., 2003). It was at this time that a type of Human Resource Management emerged, where some employers sought ways to better utilise their employees. However, prior to the emergence of Scientific Management in the early 1900s, the general perception was that all employees are equally productive and if they did not produce as required, their services would be terminated. Effective management was regarded to be constant supervision, fear and intimidation (Grobler, Wärnich, Carrell, Elbert & Hatfield, 2011). MANCOSA BBA Year 2 42

45 3.3 Scientific Management Approach The period 1880 to 1920 saw a massive growth in factory type work (Swanepoel et al., 2003) and the emergence of Scientific Management. Scientific Management focused on increasing efficiency through the scientific design of work processes Characteristics of Scientific Management Frederick Taylor is regarded to be the father of Scientific Management. He used a scientific approach to gather information about the motions, time and tools required for each task which a job entailed. Based on this information he set fair performance standards for each job (Grobler et al., 2011). Taylor also believed that efficiency can be improved through employees performing routine tasks where they were not required to make any decisions, as well as through job specialisation. He developed a differential piece rate wage incentive system, where employees whose output was above the performance standard received financial incentives (Hellriegel, Jackson, Slocum, Staude, Amos, Klopper, Louw & Oosthuizen, 2004). Frank and Lillian Gilbreth also made significant contributions to Scientific Management. The Gilbreths used motion pictures to study an employee s movements and improve his / her efficiency. In one study they identified 18 motions which a bricklayer used to lay bricks. They then changed the brick laying process to reduce this to 5 motions, thereby improving the employee s overall productivity by a significant 200% (Hellriegel et al., 2004). Henry Gantt is another proponent of Scientific Management. His focus was on control systems for production scheduling. He developed the Gantt Chart (which is still widely used in project management today) as a tool to control production scheduling (Hellriegel et al., 2004). Like Taylor, Gantt also gave attention to establishing quota systems with financial bonuses for employees who exceeded their quotas. MANCOSA BBA Year 2 43

46 3.3.2 Advantages of Scientific Management THINK POINT What do you think could be the advantages of the Scientific Management approach? Comment on Think Point A key advantage of Scientific Management is that it provides a means to produce and / or deliver a service faster and more cheaply (Hellriegel et al., 2004). There is also an emphasis on effective employee selection and training processes. Scientific management has contributed towards the development of work study practices, results based pay and production control (Mullins, 1999). Given the focus on routine work with limited decision-making on the part of the employee, Scientific Management practices have been found to be useful in certain contexts, such as developing countries where there is much unskilled labour (Mullins, 1999) Disadvantages of Scientific Management THINK POINT What do you think could be the disadvantages of the Scientific Management approach? MANCOSA BBA Year 2 44

47 Comment on Think Point Scientific Management is not without its disadvantages. In particular, the employee is viewed as a machine and the human element of the employee is ignored (Mullins, 1999). Furthermore, Scientific Management assumes that employees are only motivated by money to fulfill their financial and physical needs and fails to recognise the employee s social needs as well as the significant impact of job satisfaction on motivation (Hellriegel et al., 2004). In this regard Hellriegel et al., (2004: 52) argues that dividing jobs into their simplest tasks and setting clear rules for accomplishing those tasks will not always lead to a quality product, high morale and an effective organisation. Contemporary employees often want to participate in decisions that affect their performance; many want to be independent and hold jobs that give them selffulfillment Scientific Management s Impact on Human Resource Management Scientific Management had a significant impact on the work of Human Resource professionals (then known as personnel staff ). In addition to attending to recruitment and selection, training, and health and safety issues, Scientific Management s focus on efficiency and motivation through financial incentives resulted in personnel staff performing the following: Time and motion studies Fatigue studies Job analysis Job specifications Wage incentive programmes (Grobler et al., 2011). At this time, the Personnel department (as it was then called), also implemented various employee welfare programmes, addressing what the employing organisations felt to be the needs of the employees through company housing, employee loans and canteens (amongst others). These welfare programmes reflected the paternalistic attitude and practices of management (Grobler et al., 2011). MANCOSA BBA Year 2 45

48 3.4 Human Relations Approach The Human Relations approach emerged during the 1920s and 1930s (Hellriegel et al., 2004), partially in reaction to the de-humanised approach of Scientific Management. The 1920s and 1930s was a time of considerable social change which resulted in greater attention being given to social factors at work and the behaviour of employees within organisations (Mullins, 1999) Characteristics of the Human Relations Approach The Hawthorne experiments, lead by Elton Mayo, were conducted at the Western Electric Company s plant in Chicago between 1924 and 1933 and were key to the development of the Human Relations approach (Hellriegel et al., 2004). THINK POINT Imagine that you are a worker on a production line in a factory. A group of researchers come to your factory to perform an experiment with the lighting: The researchers first improve the lighting in the factory (i.e. make the lighting brighter) how do you think this will affect your productivity as a factory worker? Then the researchers reduce the amount of lighting in the factory (i.e. make the lighting dimmer) how do you think this will affect your productivity as a factory worker? MANCOSA BBA Year 2 46

49 Comment on Think Point Learners should compare their responses with the results of the Hawthorne experiments, which are addressed below. The Hawthorne Experiments One of the experiments that were performed at Western Electric Company s Hawthorne plant was similar to that described in the above Think Point. The Hawthorne experiment found that when the lighting was improved, employees productivity increased. The researchers were also very surprised to find that when the lighting was reduced, the employees productivity also increased (Hellriegel et al., 2004). It was concluded that the employees productivity increased in both circumstances due to the special attention that the employees felt that they had been receiving. Further experiments were conducted at the plant which showed that the social environment of the employees greatly influenced productivity (Hellriegel et al., 2004). Unionism The 1920s saw the rise of unionism, which had a considerable impact on the emergence of the Human Relations approach. The formation of labour unions enabled unskilled workers to have a degree of influence over management s decisions. In South Africa, unionism emerged from foreign workers who came to this country to work on the gold and diamond mines (Hellriegel et al., 2004). Strikes on the mines lead to the promulgation of the Industrial Conciliation Act which was passed in This piece of legislation gave workers the legal right to bargain collectively with employers regarding disputes around wages and various working conditions. The Act impelled employers to improve employee relations (Hellriegel et al., 2004). Overall, unionism facilitated a greater acceptance of the Human Relations approach in many organisations within South Africa. MANCOSA BBA Year 2 47

50 Key Assumptions of the Human Relations Approach The Hawthorne experiments and unionism led to the following key assumptions which underpin the Human Relations approach: Employees are motivated by social needs. Employees respond more to social forces (e.g. peer pressure) than to management s rules and financial incentives. Employee participation in decision-making is necessary to improve efficiency. Employees will respond better to managers who are able to fulfill their needs (Hellriegel et al., 2004). Comparison of Human Relations Approach and Scientific Management Approach While Scientific Management sought to increase production through job design and work organisation, Human Relations focused on increasing production through humanising the work organisation (Mullins, 1999). Scientific Management adopted a more managerial perspective, while Human Relations acknowledged the importance of understanding the psychological and social needs of employees Advantages of the Human Relations Approach THINK POINT What do you think could be the advantages of the Human Relations approach? Comment on Think Point A key advantage of the Human Relations approach was that it succeeded in improving the working environment for many employees (Grobler et al., 2011). The approach addressed the shortcomings of Scientific Management through providing a focus on the importance of group dynamics, leadership, communications and job design (Mullins, 1999). MANCOSA BBA Year 2 48