Human resource management (HRM) is now the term most commonly used in academic circles to encompass the range of policies and practices used by ‘modern’ organizations in the management of employees. The shortened term human resource (HR) is increasingly found to describe the personnel department, director or manager. UK practice is beginning to follow the USA in this respect. The terms, however, are both confused and confusing. HRM as a term was first used by Miles (1965) in the Harvard Business Review to differentiate the human relations school which focused on managerial leadership from the creation of ‘an environment in which the total resources of [the organization] can be utilized’ (1965:150). This meant finding a means of utilizing the untapped resources of all organizational members, be it skills, tacit knowledge, commitment or competences. This presumption that certain forms of management can release or empower employees to work more effectively for the organization took hold in the 1980s and 1990s as industrial relations problems receded and many firms found that better management of their existing resources was required to meet more competitive markets.
In 1984 two books were published in the USA which established HRM but simultaneously revealed a fundamental division in the meaning of the term. Beer et al. (1984) emphasized, like Miles, the ‘soft’ elements of HRM, arguing that an integrated set of approaches focused on the individual employee linked to the strategic needs of the company could create what became known as high-value work systems. Fombrun et al. (1984), however, developed the ‘matching model’ where the organization’s approach to its employees derived from and fitted the wider business strategy. This was taken further by Schuler and Jackson (1987) to suggest that firms in different market segments will develop very different types of HRM systems. A firm in a price-sensitive market with relatively low-skilled workers is unlikely to invest heavily in training and development to empower the employees. This has been described by Storey (1992) in the definitive UK book as ‘hard’ HRM. As Legge (1989) has noted, the first is human resource management, the second human resource management.
This distinction between the optimistic soft model and the potentially exploitative hard version is sometimes linked with the notions of loose tight to assess the extent to which HR policies are closely linked to corporate and business strategies. It is generally agreed that HRM requires a tight link to the strategy of the firm, whereas a loose connection is seen to typify personnel management, the term which predated HRM. Personnel management was restricted to the supply-side concerned to ensure that the right labour was available. In contrast HRM operates more on the demand side and involves all managers, not just the specialists. Here all factors which impinge on the performance of the worker—the design of jobs and relations with others, the types of contracts and pay systems, and the use of forms of individual and group communication, consultation and representation systems—are all designed in the light of strategic need to maximize economic outcomes whether by the soft or hard approach to labour force management.
The final distinguishing characteristic of HRM is that it is concerned with the internal policies and practices of the organization at the micro level and tends to ignore or take for granted wider macro issues of societal culture, the political economy and the role of the state. At the micro level, however, by the link with business strategy and focus on performance it does offer the prospect of a new theoretical sophistication (Boxall 1992).
John Purcell
University of Oxford
References
Beer, M., Spector, B., Lawrence, P.R., Quinn Miles, D. and Walton, R.E. (1984) Managing Human Assets, New York.
Boxall, P.F. (1992) ‘Strategic human resource management: beginning of a new theoroectical sophistication?’ , Human Resource Management Journal 2(3).
Fombrun, C.J., Tichy, N.M. and Devanna, M.A. (1984) Strategic Human Resource Management, New York.
Legge, K. (1989) ‘Human resource management: a critical analysis’, in J.Storey (ed.) New Perspectives in Human Resource Management, London.
Miles, R. (1965) ‘Human relations or human resources?’, Harvard Business Review 43(4).
Schuler, R.S. and Jackson, S.E. (1987) ‘Organizational strategy and organizational level as determinants of human resource management practices’, Human Resource Planning 10.
Storey, J. (1992) Developments in Human Resource Management: An Analytical Review, Oxford.
