Is it Sunset for HRM?

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Is it Sunset for HRM?

 Is the human resource management era experiencing its twilight years? I pose this question cognizant that human resource management (HRM) has been experiencing unprecedented spells for the first time since the term was popularized in the 1980s as the panacea for managing human beings as the most valuable resources in an organization. While the significant shift of managing employees has been from enhancing their productivity to making employees happy simultaneously, sentiments have emerged from various quarters questioning the necessity of human resource management in contemporary organizations. Notably, Octopus Energy is a billion-dollar start-up in the United Kingdom that prides its success on not having a human resource management department. Greg Jackson, its chief executive officer and founder, reckons that he has managed over 1,200 employees who have sold green energy to more than 1.9 million homes (Shaw, 2021). This remarkable feat has been has been realised without a human resource department, which raises curiosity as to whether human resource management has become an antiquated organizational management structure whose relevance has expired. Similarly, other small and medium-sized companies have wondered about the usefulness of the human resources department to their operational success (Chris, 2021).  This question’s pertinence has also been promoted by the increasing sentiments from employees disgruntled with the human resource departments in their workplace, with some noting that such departments have not contributed to their workplace happiness and satisfaction, but have instead elicited leaving intentions. I dissecting this topic and its surprising implications, we shall start identifying the divergent views from the supporters and opponents of human resource management to identify the root sources of such opinions. After that, the HRM areas that cause the most dissatisfaction and unhappiness among employees will be expounded before delving into the issue of how HRM adds value to an organization. Finally, the fate of HRM in the near future will be prophesied. 

Perceptions about HRM

Opponents of HRM

Opponents of human resource management view this innovative organizational management concept as being bureaucratic and outdated. They lament that its processes delay the resolution of employees’ issues and that the human resources professionals lack the people skills to foster good human relations within the organization. Besides, there is a significant discrepancy between the promise of HRM theory and the actual practices in organizations. This is because while the HRM professionals are well conversant with the knowledge acquired from their professional training, they lack the skills and competencies to apply that in diverse and complex real-life organizational situations (Vincent et al., 2020). 

Proponents of HRM

Proponents of human resource management profess that it provides a valuable strategy to managing human capital as the most critical resource in contemporary organizations. They argue that contemporary companies are increasingly knowledge-based after shifting from being focused on translating raw materials into finished and usable products. As such, high talent needs to be managed prudently and creatively by dedicated professionals in a separate business unit called the human resource management department. They also maintain that human resource management departments are indispensable in successful organizations because such dedicated units can focus on attending to the issues related to human capital as the most valuable and critical resource in contemporary organizations. They claim that HRM departments are sources of competitive advantage in the highly-successful and highly-valued organizations we see today. For instance, the success of companies like Google and Apple is premised on valuing their highly-skilled technical staff and supporting their unique work ethic and styles to keep them productive and happy. 

Where Might HRM Be Going Wrong?

Human resource management is often tasked with employee-related issues, including recruitment and retention, training, rewards and punishments, professional development, conflict resolution, and succession planning. The policy areas that present most controversies bedeviling the human resource management departments and profession are raining and development rewarding employees and resolving employee issues.

Issue Resolution

Human resource management goes wrong when professionalism is lacking, and creativity is absent. Human resource management professionals have been accused of causing worker unhappiness in their organizations due to their insensitivity to employee issues. Employees often confront human resource managers with professional and sometimes, personal issues that need resolving because they affect their working ability. However, there have been cases where human resource professionals have taken too long to resolve workplace-related issues (Saha, 2016). These delays are even longer in large organizations, where the human resource departments claim that they are overwhelmed by the employees’ ‘problems’. In other cases, the HRM department has professionals that are not sufficiently skilled to handle the diverse and complex issues faced by employees under their charge. Consequently, while employed hoped to find solace and resolutions in the human resource departments at their workplace, they are instead met with ineptitude, extensive delays, and suboptimal solutions, which leave the employees unhappy and dissatisfied, this time, with the HRM department rather than their workplace issues. 

Training and Development

Every employee expects to grow personally and professionally in a workplace, where they spend a considerable proportion of their time. In fact, the workplace is considered a second home by many workers. Besides, every employee expects a fair chance at being trained at the employer’s account, the reason why many new employees join particular organizations because of their professional development and career progression opportunities. However, when a workplace lacks professional development opportunities or disburses such chances discriminately or such strategies to not help define clear career paths for millenials, it creates disgruntlement among the ambitious youthful employees, who are left disillusions with the organization (Betterworks, 2021). The training and development strategies need to be commensurate to the career advancement needs of employees.

Besides, due to technological advancements and economic shifts, some jobs are rapidly becoming obsolete while new ones are emerging. The biggest challenge facing the contemporary human resource management departments is retaining employees that do not have upgraded skills to perform the emerging tasks as their organizations embrace new technologies, such as artificial intelligence, machine learning, cloud solutions, and the internet-of-things, which are causing firms to automate most of their operations (Donnelly & Johns, 2021). In this regard, progressive human resource managers should anticipate such shifts in the work environment, and redefine the job descriptions at their workplaces, accompanied by professional development to make their employees remain relevant. Blackman et al. (2021) complained that human resource development strategies employed in contemporary organizations were yielding suboptimal results because, which many human resources managers were cognizant about the critical important of training and development, they did not apply these best practices in their organizations.  They noted that many contemporary organizations were captured in system traps that challenged human resource development. These traps included deeply entrenched policies that bread resistance when change is attempted, competition for scarce resources, which underfunds human resources development activities, and goal-activity incongruence in which an organization’s goals have changed but the human resource management’s focus remains rigidly glued to outdated pursuits.   

Employee Rewards

There is no employee who thrives in an environment where his or her efforts are not recognized and appreciated. Organizational management scholars have identified and promoted the creative use of rewards and punishment to keep employees motivated and, in turn, productive. However, rewards go beyond financial remuneration and may include incentives such as paid holidays, paternal and maternal leaves, stock options, child care, and education support, and the list is endless (Landry, Schweyer & Whillans, 2017). The contemporary employee has increasingly become critical about what else an organization offers apart from the generous financial perks. Since they value their personal life as much as their professional life, they become attracted by rewards such as flexible working hours and opportunities for working virtually. In fact, the Covid-19 pandemic demonstrated the usefulness of employees that could work from home because they kept companies running, while many others closed down at the height of the public health crisis.

Incidentally, current human resource managers are unable to understand and handle the needs of the millennial workforce, whose proportion is increasing in workplaces, and the baby boomers reach retirement and exit the labor market. Millennial workers are demanding more appreciation of their working styles, which differ dramatically from the previous generation of employees. Apart from being allowed to dress work as they wish, considering that they prefer their casual wear, compared to the suit-and-tie attire advocated as the official dress code by many human resource departments, to being provided with the flexibility to choose their working time, working from home and being rewarded handsomely after graduating from their academics, the millennial workers are creating a seismic shift in the working protocols at the workplaces. Notably, these younger workers place a premium on the work-life balance as they seek more meaning in their work and are driven by living full professional and personal lives concurrently.  These sentiments are reflected in the findings made by Diskienė, Stankevičienė and Jurgaitytė (2017), which revealed that the millennial workforce has high and often unrealistic expectations from their workplaces, and the human resources management departments in these institutions tended to focus more on their administrative function and often underestimated the expectations of the youthful workers.    

The Fate of HRM in the Future…Can It Still Add Value to an Organization?

The human resource management concept will survive so long as it can continue delivering value to organizations. Different organizations define value differently, and human resource management should be flexible enough to deliver values to different organizational configurations despite their diversity of value conceptualization. For this reason, the sources of value portended by human capital in an organization must be well understood by the human resource professionals for there to be a valued response to their needs and preferences. No employee wants to work in an organization that seems not to understand or care about the individuality of the needs and wants of workers. Notably, talented human capital possesses tacit knowledge that may be difficult to replicate and replace. Besides, highly talented employees that have a perfect fit for their organizations make them highly valuable because they deliver value. In this regard, the value should be construed as high performance, customer satisfaction, good reputation, social license to operate, attractiveness to highly-talented prospective candidates, and recognition awards from organizations and observers in the business sector. Boon et al. (2019) advise that organizations could achieve and sustain competitive advantage in their industries by seeking human capital that has developed firm specificity and causal ambiguity. This is to say that human resource managers should strive to make their human resource valuable only to their organizations and no other and to accumulate tacit knowledge, skills, and competencies that are not obviously observable by competitors, thus leveraging the resources based view, which advocates the maximization of internal resources to gain and sustain competitive advantage.

Besides, human resource management will also survive these complex and turbulent times if the professionals in the field can employ theoretical frameworks, such as the expectancy theory and the goals setting theory, to guide their strategies and practices. According to the goal-setting theory, organizational goals should be negotiated between the organization and the individual employee (Sabiu et al., 2019). Likewise, according to the expectancy theory, employees should be motivated uniquely based on what they value (Sabiu et al., 2019). With the increasingly multicultural workforce permeating the contemporary organizations, current and future human resource managers must be adept at deciphering the different motivators of the current and future crop of employees and developing new ways of keeping such workers happy, satisfied, and totally engaged in their organizations.   

Conclusion

The question of the usefulness of the human resource management department in a contemporary organization is not yet resolved. We set out by positing whether the human resources management departments were still relevant in the contemporary business environment, considering that some organizations have significantly succeeded without them. I contend that the human resource management concept will survive provided it delivers value to different companies, regardless of their configuration or organizational structure. However, the delivery of acceptable value will depend on how well the human resources professionals identify and interpret employees’ unique needs and preferences, and respond in a culturally and ethically sensitive manner.

References

Betterworks (2021). 8 of the biggest challenges for HR in 2021. Retrieved from https://www.betterworks.com/8-of-the-biggest-challenges-for-hr/  

Blackman, D., Buick, F., Johnson, S., Rooney, J., & Ilahee, N. (2021). Using system traps to understand and potentially prevent human resource development intervention failure. Human Resource Development Quarterly, 1-21. https://doi.org/10.1002/hrdq.21434

Boon, C., Eckardt, R., Lepak, D. P., & Boselie, P. (2018). Integrating strategic human capital and strategic human resource management. The International Journal of Human Resource Management, 29(1), 34-67. https://doi.org/10.1080/09585192.2017.1380063

Chris, L. (2021). My small business doesn’t have an HR department—Is that OK? Retrieved from  https://www.allbusiness.com/my-small-business-doesnt-have-hr-department-114005-1.html. 

Diskienė, D., Stankevičienė, A., & Jurgaitytė, N. (2017, December). Challenges for human resource department: The case of millennials in the workplace. In ECMLG 2017 13th European Conference on Management, Leadership and Governance: ECMLG.

Donnelly, R., & Johns, J. (2021). Recontextualising remote working and its HRM in the digital economy: An integrated framework for theory and practice. The International Journal of Human Resource Management, 32(1), 84-105. https://doi.org/10.1080/09585192.2020.1737834.

Landry, A. T., Schweyer, A., & Whillans, A. (2017). Winning the war for talent: Modern motivational methods for attracting and retaining employees. Compensation & Benefits Review, 49(4), 230-246. https://doi.org/10.1177/0886368718808152

Sabiu, M. S., Ringim, K. J., Mei, T. S., & Joarder, M. H. R. (2019). Relationship between human resource management practices, ethical climates and organizational performance, the missing link: An empirical analysis. PSU Research Review, 3(1), 50-69. https://doi.org/10.1108/prr-12-2016-0022

Saha, P. (2016). Why most employees are unhappy with their HR departments. Retrieved from  https://www.hrkatha.com/research/why-most-employees-are-unhappy-with-their-hr-departments /

Shaw, D. (2021). CEO secrets: ‘My billion pound company has no HR department’. BBC. Retrieved from https://www.bbc.com/news/business-56130187.

Vincent, S., Bamber, G. J., Delbridge, R., Doellgast, V., Grady, J., & Grugulis, I. (2020). Situating human resource management in the political economy: Multilevel theorising and opportunities for kaleidoscopic imagination. Human Resource Management Journal, 30(4), 461-477. https://doi.org/10.1111/1748-8583.12328