Human Resources Trends and Management: A Review

Introduction

This paper will discuss the topic of human resource management from the perspective of its application in a performance management system. This topic will focus on policies targeted on building human capital by means of employee recruitment and retention policies. This paper is divided into four sections. In the first section, the paper will define what human resource management is and provide a general background. The second section will review some recent trends in human resources. The third section will examine how employee retention can be facilitated by means of appropriate incentives policies. This section will include a brief theoretical discussion on the concept of employee incentives. The final section will explore the applications of human resource management by presenting a case study of Hershey's human resource management policies.

Background

Human resource management (HRM) is crucial to the operation of any organization, public or private. As such, virtually every private and public enterprise has a human resources department. In its most basic sense, human resource management is the effective use of employees to achieve the goals and objectives of an organization (Rampur, 2009). It is this particular sense of human resources this paper is concerned with.

The general functions of human resources include providing each employee with the necessary tools to settle into a comfortable role with the organization. This is usually achieved by ensuring the organization's working conditions are up to a satisfactory standard (Rampur, 2009). Human resources are also responsible for keeping employees informed of organization policies in terms of the pay and benefits that are being provided.

Human resource management plays a number of different roles. These roles include the management, development, and maintenance of the organization's labor force. This is because the existence of a motivated work force is crucial to the performance of any organization, its long-term profitability, and competitiveness (Rampur, 2009). HRM staff is in frequent contact with senior management and are responsible for providing administrative support to both management and staff. HRM is tasked with locating and attracting the best available talent to the organization. They execute the employee recruitment, orientation, and training functions crucial to a well-functioning workforce.

Human resources departments are usually divided into two separate sub-categories. The first category focuses on administrative functions such as the workplace environment, employee or management conflicts, and time and leave related issues (Rampur, 2009). The second category focuses on recruitment and retention, employee orientation, training, and dispute resolution. HR is usually involved as a liaison between talented prospects and management. They participate in setting up interviews and sometimes in the conduct of interviews and selection of candidates (Rampur, 2009). This is often done in concert with the needs and input of hiring managers.

Performance management. A related concept in human resource management is the concept of the performance management system. A performance management system is a set of measures that is used to determine whether an employee is successfully meeting an organization’s goals and objectives. To function it relies upon regular communication between a manager and employee. This communication revolves specifically around ensuring the employee understands the organization’s goals and objectives and is properly prepared to meet them in a manner that is as efficient and cost-effective as possible (“Performance Management”). In general, there are several features of a performance management system including the following reproduced courtesy of the above reference (“Performance Management”). Proper training of all staff and managers is crucial to the implementation of an effective performance management system. This is mainly the function and responsibility of human resources.

Human Resources Trends

Firms in recent years have moved toward an inclusive culture. In this context, inclusivity refers to allowing all members of the organization to participate in its development. Many top companies, and even government agencies, are asking employees to voice their opinion on topics related to improving the firm’s chances of success. This approach is very much a “backward mapping” or “bottom-up” type approach to corporate management. This approach allows policy ideas, about improving the firm’s performance and workplace culture, to flow up from staff whose views are often ignored. This staffs usually occupy strategic places within the firm or organization (Elmore, 1988). From such strategic roles, these staff can sometimes spot troubling issues or make useful suggestions that would escape the attention of most in management.

Incentives and Employee Retention

As noted above, a main concern of human resource management is how to best retain and compensate the best employees. This section will examine the organizations' incentives system. The view is that an organization with strong incentives will be very competitive in employee retention. This argument will be further explored in the case study section.

There is a consensus among business leaders regarding the efficacy of individual rewards. It's generally believed that a business organization is like a machine; a machine whose individual components can be manipulated to work better by means of certain kinds of inputs (Hope & Fraser 2003). The idea that motivation of individual workers can be shifted by using types of extrinsic motivation such as financial incentives is at least a century old and dates back to early 20th century management theory.

For instance, Frederick W. Taylor in 1911 developed principles of scientific management systems based on piecework. Its theoretical underpinnings stem from research on laboratory animals. Rats can be taught to ring a bell whenever they want food. Dogs can be motivated to undertake certain tasks or tricks in exchange for a reward or treat. B.F. Skinner (1904-1990), a US psychologist and behavioral theorist who conducted these experiments, was a major influence in the behaviorist school of psychology. His philosophy was that human beings are “repertoires of behaviors” which are discernible by factors he called “environmental contingencies” (Hope & Fraser, 2003).

Douglas McGregor's the Human Side of Enterprise (1960) expounded a very similar view in his "Theory X" perspective on human resources. This theory held that in general people hated to work. They needed to be told what to do. They didn't like responsibility and wouldn't do anymore than the absolute passable minimum to get a job done. Their performance will only improve with the use of added incentives. This theory should be contrasted with the "Theory Y" view. Under this view individual motivations are rooted in self-esteem and personal improvement. Firms will achieve better results by encouraging its workforce to be creative in their jobs, continue to learn and develop, and derive a high level of personal satisfaction from their jobs. While Theory Y sounds more appealing to most people, Theory X is the more prevalent method of management in modern US firms (Hope & Fraser, 2003).

Extrinsic motivation was mentioned above and it should be noted that it can be contrasted with intrinsic motivation. By extrinsic motivation is meant a type of motivation that originates outside the control of the individual. Many individuals will only be motivated to complete a particular task if some reward or incentive is involved. This indicates that workers are only interested in the reward and not the task in and of itself.

In contrast, with intrinsic motivation, individual workers are motivated by means of factors internal to the individual, such as intrinsic rewards. Intrinsic motivation means workers gain a great deal of personal satisfaction from the job or task to be completed. They would perform their job at a high level of production and efficiency regardless of the presence of incentives (Hope & Fraser, 2003).

According to Kohn (1993) most people have a strong need to relate to something on a personal level. The human resources challenge is to create a workplace that plays to this need. This can be done by means of collaboration with staff to create a sense of belonging to a community (Hope & Fraser, 2003). The only way to accomplish this is by stronger staff participation in the planning of organizational targets and by shifting from individual incentives to team-based ones. The best achieving performance management system will incorporate many elements of intrinsic motivation, as a means to attract and retain a skilled, motivated workforce. How such a system functions in practice is examined in the next section in the case of Hershey.

Case Study Analysis: Hershey

This section will apply concepts of performance management to a case study analysis using the chocolate manufacturer, the Hershey Company. This section will review Hershey's performance with regards to incentives, diversity, participation, and mentoring. These areas are crucial for an organization seeking to meet the requirements of human resources trends noted earlier in this paper of employee recruitment and retention.

Hershey’s human resources and performance management system is recommended for its participatory and “inter-active” management structure. The system’s design relates to how young staff members need for “challenge, autonomy, and results, (Noe, Hollenbeck, Gerhart &Wright, 2011)” is satisfied by permitting them to set company goals and track progress on projects. This approach engenders a notion of egalitarianism among the staff at the firm in that all are participating actively in its management. The traditional management approach leaves this role of tracking and evaluating almost exclusively to older, experienced managers. Staff tend to be passive and uninvolved actors in those kinds of workplaces and not at all included.

Hershey's diversity policies are an example of a strong effort towards inclusion of all staff members. This is crucial to building a reliable and efficient team. If some team members feel less privileged than others it can create serious conflict within the management system (Noe, Hollenbeck, Gerhart &Wright, 2011). Therefore, it’s not surprising that over the last two decades more firms are introducing diversity policies. These policies are designed to inculcate a culture of inclusion that is expected to be observed by all staff members. In the inevitable happenstance that such policies are violated by some staff members, the firm has already notified all staff and management of the consequences.

One human resource trend relevant to Hershey’s business model is how to develop a company culture that will attract the best talent in the industry. Hershey’s emphasis on diversity, mentoring, and team building is meant to make the workplace into a welcoming environment (Noe, Hollenbeck, Gerhart &Wright, 2011). Most private sector managers have determined via studies, reviews, and interviews, that low morale and general employee dissatisfaction are problems endemic to the 21st century workplace. Few employees would knowingly choose to seek employment in such workplaces. However, Hershey has promoted a corporate culture that would attract workers that seek a deeper sense of fulfillment in their work lives and a deeper sense of social and professional connection to their co-workers.

Mentoring was introduced as a means to promote the firm’s values of diversity, inclusion and strong team building. However, the mentoring program is designed to allow veteran staff members to pass information, crucial to the firm’s mission, onto newer employees. Thus Hershey uses mentoring to lay the foundation for the future leaders of the firm. This also has the effect of building inter-generational social capital. This is because staff members habitually segregate themselves by age group (and other types of groups as well). The mentoring program encourages newer staff to view older team members as sources of learning and experience that will more efficiently ease their transition into the workplace culture. Such a program also helps management reinforce the firm’s values on newer employees (Noe, Hollenbeck, Gerhart &Wright, 2011). It also fosters a climate of mutual respect among all participating staff members.  

References

Elmore, R. (1988). Backward Mapping: Implementation Research and Policy Decisions. In Williams, W. (ed.) Studying Implementation: Methodological and Administrative Issues (18-35). NJ: Chatham House.

Hope, Jeremy & Fraser, Robin. (2003). New ways of setting rewards: The beyond budgeting model. California Management Review, vol. 45(4), 104.

Kohn, Alfie . (1993, Sept.-Oct.). Why incentive plans cannot work. Harvard Business Review, 71(5), pp. 54-63.

McGregor, Douglas. (1960). The Human Side of Enterprise. New York, NY: McGraw-Hill.

Noe, Raymond, John Hollenbeck, Barry Gerhart and Patrick Wright. (2011). Fundamentals of Human Resource Management, fourth edition. New York, NY: McGraw Hill

Performance Management System. Hrs.boisestate.edu. Retrieved from http://hrs.boisestate.edu/performance-management/

Rampur, Stephen. (2009, June). What is human resource management? Buzzle.com. Retrieved from http://www.buzzle.com/articles/what-is-human-resource-management.html. Nov. 2013.