Organizational HRM

This section, based on Human Resource Management (4th Edition) by Alan Price examines HRM within the organization. Human resource practices are enabled and constrained by a variety of organizational factors, including organizational size, structure, culture and employee commitment.

A number of specific issues are addressed:

• What are the different structures found within organizations and what effect do they have on human resource management practices?
• Are there any significant differences between people management practices in small and large organizations?
• What are entrepreneurs like as people managers?
• How do organizations grow and what are the implications on HRM?
• How do national business cultures impact on international HRM?
• What is the relationship between corporate culture and human resource management?
• What is employee commitment and how is it achieved?
• Is employee branding a road to commitment or a method of brainwashing employees?
• How do we manage professionals without losing their trust and commitment?

Overview

This is a world of organizations: more and more elements of life which were once a matter of personal action are now integrated into organizational frameworks. (...) They set financial, service or production targets which determine the activities of their employees.

People managers (a term used in the widest sense here to include line managers) have a critical role in monitoring and controlling performance in order to achieve these targets. In the Introduction to HRM we stressed that HRM is a 'holistic' approach to people management. To make the best use of an organization's human resources it is necessary to manage not only its people but also the corporate structure and culture. It’s a moral imperative that your HR department is supported at every juncture. Here are some tips to help you in this aim. See: 4 Tips For Supporting Your HR Department.

In the section on HRM and the Business Environment we saw that organizations also interact with their environment through the regulatory, economic and cultural frameworks in which they operate.(...)

Different structures affect the way in which people are managed. HRM is intimately bound up with the way firms are organized. Businesses throughout the world require the same basic human resource activities: they recruit new employees; they develop and train their staff; they have reward systems; etc. But these issues are handled in different ways, reflecting the expectations and acceptable behaviour patterns within national business cultures. (...)

HRM in Large Organizations

HRM in Small and Medium-sized Enterprises

Organizational Culture

HRM and Commitment

 

For a background on organization theory see the following pages of notes on the HRMGuide.co.uk site:

Organization Theory - tracing the psychological, sociological, economic and systems influences on the topic.

Classical Organization Theory - how Max Weber saw bureaucracy as the most efficient form of organization.

Classical Organization Theory - modified - Henri Fayol's rational interpretation of organization management.

Criticisms of Classical Organization Theory - Chris Argyris' summary of criticisms.

Organizational Design

In Designing Your Organization (2007:1), Kates and Galbraith define organizational design in the following way:

"Organizational design is the deliberate process of configuring structures, processes, reward systems, and people practices to create an effective organization capable of achieving the business strategy. The organization is not an end to itself; it is simply a vehicle for accomplishing the strategic tasks of the business. It is an invisible construct used to harness and direct the energy of the people who do the work."

Kates and Galbraith argue that an organization's structure is too often a barrier to effective performance.

Organizational Structure

"Structure is an entity (such as an organization) made up of elements or parts (such as people, resources, aspirations, market trends, levels of competence, reward systems, departmental mandates, and so on) that impact each other by the relationship they form. A structural relationship is one in which the various parts act upon each other, and consequently generate particular types of behavior." (Fritz, 1996:4)

In his classic Corporate Tides, Fritz points out that, in practice, organizational structures are rarely designed in a deliberate manner. Small structures grow into larger ones and individual units become the focus of managerial power. Fritz says that (1996:5): 'Departments and divisions become entrenched as power systems.' Any structural change is likely to meet resistance from these power systems.

Fritz also argues that organizations are structured either to advance or to oscillate. Advancement is a positive move from on state to another that acts as a foundation for further advances. Fundamental to structural advancement is the concept of resolution when an outcome is achieved and a particular problem is resolved. According to Fritz (1996:6), management in an organization that is structured to advance coordinate 'individual acts into an organizational tapestry of effective strategy.' When all the individuals in this utopian organization are acting together, the result is synergy, allowing the achievement of 'enormous feats.'

The alternative is structural oscillation. Fritz (1996:6) explains this: 'Oscillating behavior is that which moves from one place to another, but then moves back towards its original position.' So many organizations set out on some change program, full of enthusiasm and energy. But, six months later, the enthusiasm has evaporated and the program peters out leaving very little changed.

Labovitz and Rosansky (1997:7) consider that senior managers can achieve alignment to ensure advancement through:

* Carefully crafting and articulating the essence of their business and determining the Main Thing.

* Defining a few critical strategic goals and imperatives and deploying them throughout their organizations.

* Tying performance measures and metrics to those goals.

* Linking those measures to a system of rewards and recognition

* Personally reviewing the performance of their people to ensure the goals are met.

Labovitz and Rosansky criticize traditional structures of organization that are based on the notion of breaking up a managerial problem into pieces: departments and divisions. As they point out (1997:8): "Psychologists have long recognized that human beings like people who are like themselves and tend to reject people who are different from them. Yet organizations continue to create differences between people in the interest of efficiency. Line versus staff, management versus labor, field versus corporate, international versus domestic, East versus West, accounting versus sales - the list goes on. No wonder it's so hard to focus people around common goals when they are so different from each other simply by virtue of what they do and where they do it. Specialization and expertise can be a wedge that drives people further apart and makes it difficult for them to work together."

Roberts (2004: 32) argues that whereas strategic choice and organizational design are are immensely complex - indeed, 'mindbogglingly complicated' - there is an underlying logic based on the concept of 'fit':

"(...) Certain strategies and organizational designs do fit one another and the environment, and thus produce good performance, and others do not. Moreover, there are frequently recognizable, understandable, and predictable relations among the environmental features and the choice variables of strategy and organization that determine which constellations of choices will do well and which are less likely to do so. These relations arise for both technological and behavioral reasons. Recognizing these relations and understanding their implications can guide the design problem."

References
Fritz, R. (1996) Corporate Tides: The Inescapable Laws of Organizational Structure , Berrett-Koehler

Labovitz, G. and Rosansky, V. (1997) The Power of Alignment: How Great Companies Stay Centered and Accomplish Extraordinary Things , John Wiley & Sons.

Roberts, J. (2004) The Modern Firm: Organizational Design for Performance and Growth, Oxford University Press.