As conceived by the pioneers in the 1980s, the notion of human resource management is based on a philosophy that is fundamentally different from the personnel management practices of the time. Beer et al (1984: 1) started with the proposition that: ‘Human resource management (HRM) involves all management decisions and actions that affect the nature of the relationship between the organization and employees – its human resources’. They believed that: ‘Today… many pressures are demanding a broader, more comprehensive and more strategic perspective with regard to the organization’s human resources’ (ibid: 4). They also stressed that it was necessary to adopt ‘a longerterm perspective in managing people and consideration of people as a potential asset rather than merely a variable cost’ (ibid: 6). Beer and his colleagues (the ‘Harvard school’) were the first to underline the HRM tenet that it belongs to line managers. They suggested that HRM had two characteristic features: (1) line managers accept more responsibility for ensuring the alignment of competitive strategy and HR policies; (2) HR has the mission of setting policies that govern how HR activities are developed and implemented in ways that make them more mutually reinforcing.
The other major early contributors to the development of the philosophy of HRM – Fombrun et al (1984) – developed what has been termed their ‘matching model’, which indicated that HR systems and the organization structure should be managed in a way that is congruent with organizational strategy. This point was made in their classic statement that: ‘The critical management task is to align the formal structure and human resource systems so that they drive the strategic objectives of the organization’ (ibid: 37). They therefore took the first steps towards the concept of SHRM.
Following these US pioneers, as Legge (2005: 101) noted, the old term ‘personnel management’ increasingly gave way to human resource management (HRM). She commented that ‘the term [HRM] was taken up by both UK managers (for example, Armstrong, 1987; Fowler, 1987) and UK academics’. Hendry and Pettigrew (1990: 20) observed that: ‘What HRM did at this point was to provide a label to wrap around some of the observable changes, while providing a focus for challenging deficiencies – in attitudes, scope, coherence, and direction – of existing personnel management’.
The following full explanation of HRM philosophy was made by Legge (1989: 25), whose analysis of a number of HRM models identified the following common themes:
That human resource policies should be integrated with strategic business planning and used to reinforce an appropriate (or change an inappropriate) organizational culture, that human resources are valuable and a source of competitive advantage, that they may be tapped most effectively by mutually consistent policies that promote commitment and which, as a consequence, foster a willingness in employees to act flexibly in the interests of the ‘adaptive organization’s’ pursuit of excellence.
Storey (2001: 7) noted that the beliefs of HRM included the assumptions that it is the human resource that gives competitive edge, that the aim should be to enhance employee commitment, that HR decisions are of strategic importance and that therefore HR policies should be integrated into the business strategy.
The philosophy underpinning this notion of HRM provided a new vision that was strongly criticized by many commentators during the 1990s . It was supposed to be substantially different from old-fashioned personnel management, a term that has virtually disappeared since then, although in some quarters the term ‘people management’ has been adopted, possibly by those who dislike the connotations of ‘human resources’ with its apparent emphasis on exploitation and treating people as factors of production. However, whether it is called human resource management, people management or employment management, the essential nature of the ways in which organizations manage
and relate to their employees has not always changed significantly from that of personnel management. New techniques and approaches (some of them ‘flavours of the month’) may have been introduced. But they have been treated as aspects of people management, not offspring of the human resource management philosophy.