1.2 What is HR management?
In 1937 Ronald Coase, a Noble Prize winning economist, explained how
some economic activities are most efficiently coordinated within firms,
while others are most efficiently coordinated by markets. ‘Management’
can therefore be defined as the art and science of coordinating activities
within a firm, via a process of managerial decision-making, including areas
such as finance, operations, sales and marketing, and human resources.
HR management can in turn be defined as:
‘The process of analysing and managing an organisation’s human
resource needs to ensure satisfaction of its strategic objectives’
(Hellriegel, Jackson, Slocum and Staude, 2009)
and
‘The policies and practices involved in carrying out the “people”
or human resources aspects of a management position, including
recruitment, screening, training and appraising’ (Dessler, 2007).
Important themes to note in these definitions, which will be picked up
again during the course of the subject guide, are:
• the role of analysis as well as management
• the connection between HRM and achieving an organisation’s strategic
goals
• the importance of HR policies and practices; and specific HR activities
such as recruitment, selection, learning and education, and
• performance management
to which we might add other things, such as reward, job design,
employment (or ‘manpower’) planning, diversity management, equal
opportunities and employment relations.
The history of HR management can be dated back to the 19th century,
when some enlightened industrial companies in the US and Europe
employed welfare officers to look after the wellbeing of workers, especially
women and children. In the 1920s and 1930s companies employed labour
managers to handle pay, absence, recruitment and dismissal. By the late
1940s labour management and welfare work had been integrated under
the banner of ‘personnel administration’. As the importance of people to
the success of firms was increasingly recognised throughout the 1970s
and 1980s, personnel administration became ‘personnel management’ and
eventually ‘human resource management’. Today some companies refer
simply to the ‘people’ function and call their most senior HR executive the
‘chief people officer’.