Building Integrated HRM Systems

Article excerpt

Building Integrated HRM Systems

Our organizations face external and internal pressures: recurring resource restraints, stiff international competition, a changing workforce, and rapid technological change. Many organizations suffer from low employee motivation, unnecessary management layers, outdated work practices, and in-effective use of information technology. How can we help our organizations address their inefficiencies and handle present challenges?

To improve productivity in the past two decades we increased our corporate training activities and introduced employee involvement primarily through quality circles. While we improved shop-level and work-group operations and increased employee morale, these achievements are insufficient to make our organizations competitive.

More than ever, we must follow the lead of top corporations that are improving the management of their human resources through large-scale changes in corporate culture, management styles, and personnel management practices. For example, when a Brunswick Corporation division was facing its probable demise due to poor-quality products and high costs, it dropped its authoritarian management style. Instead, top management met with employees in small groups to explain the situation and obtain their ideas. Management didn't threaten, cajole, or use motivational gimmicks but simply asked employees what they needed in order to do their jobs better. By providing for its employees' needs the division's achieved a turn-around in quality and productivity.

Toward human resource

management

The kind of solution Brunswick found necessary calls for a shift away from traditional personnel management, under which employees are costs to be contained. Rather, corporations must establish human resource management systems. HRM considers employees an organization's most important resource and emphasizes cooperative management-employee relations. Figure 1 describes the difference between traditional personnel management and HRM.

HRM covers all management decisions and actions that affect the relationship between an organization and its employees. How managers introduce new technology, relocate operations, downsize, arrange tasks in a new plant, and reward personnel have profound effects on employees. These decisions determine how involved employees will be in their work and how much they will trust management. They also influence how much stress employees will experience and how willing they will be to take risks and change their behavior.

Under HRM, employees influence the decisions that affect them. At Apple Computer, for example, managerial styles, rewards, and training are tailored to employee preferences. Through innovative HRM policies and practices organizations such as Digital Equipment Corporation encourage employees to solve problems and to experiment. Human resource management systems suited to today's corporations address several key areas: leadership and planning, employee flow, organization system improvement, and employee performance management. Figure 2 breaks down these elements.

Leadership and planning

Continuity in planning and leadership commitment are essential to creating effective HRM systems. Through strategic planning, organizations integrate corporate and employees' long-term goals. In addition top management must clarify and articulate its key principles and demonstrate continued support of its employees. In revitalizing its unprofitable television division in the early 1980s, for example, General Electric used many vehicles, including employee breakfast meetings, to communicate its commitment to improvement.

If management's actions don't match its formal policies, the trust between management and employees can shatter. Mistrust developed in the auto industry when, claiming financial problems, companies sought labor concessions but paid large bonuses to executives. …