BCOM HRM - Introduction To Human Resource Management

Bachelor of Commerce
in Human Resource Management
INTRODUCTION TO HUMAN RESOURCE

MANAGEMENT
Module Guide
Copyright © 2023
MANCOSA
All rights reserved; no part of this book may be reproduced in any form or by any means, including photocopying machines,
without the written permission of the publisher. Please report all errors and omissions to the following email address:
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Introduction to Human Resource Management
Bachelor of Commerce
in Human Resource Management
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
List of Content .......................................................................................................................................................... 2
Preface ..................................................................................................................................................................... 3
Unit 1: Human Resource Management Fundamentals .......................................................................................... 10
Unit 2: The Evolution of Human Resource Management ....................................................................................... 30
Unit 3: Strategic Human Resource Management ................................................................................................... 46
Unit 4 : Contemporary Challenges Facing Human Resource Management ........................................................... 59
Answers to Revision questions .............................................................................................................................. 72
References ............................................................................................................................................................. 83
Bibliography ........................................................................................................................................................... 84
4 MANCOSA – Programme Name
i
List of Content
List of Figures
Figure 1.1: Human Resource Management Functions (Noe et al, 2010: 5) ...................................................... 17
Figure 1.2: HR as a Business with Three Product Lines (Noe et al, 2016: 6) .................................................. 21
Figure 2.3: Human Resource Competencies (Ulrich, Younger & Brockbank, 2012: 17).................................. 23
Figure 3.2: The Strategic Human Resource Management Process (adapted from Noe et al, 2016: 76) .......... 51
Figure 4.1: Current Issues and Challenges for Human Resource Management.............................................. 61
Figure 4.2: The Sustainability Challenge for HRM ........................................................................................... 62
Figure 4.3: Proactively Managing Human Resource Issues and Challenges .................................................. 66
List of Tables
Table 3.1 HR strategies supporting different organisational strategies. ............................................................ 49
2 MANCOSA – Bachelor of Human Resources Management

Preface
A. Welcome
Dear Student
It is a great pleasure to welcome you to Introduction to Human Resource Management (IHRM5). To make sure
that you share our passion about this area of study, we encourage you to read this overview thoroughly. Refer to it
as often as you need to, since it will certainly make studying this module a lot easier. The intention of this module
is to develop both your confidence and proficiency in this module.
The field of Human Resource Management is extremely dynamic and challenging. The learning content, activities
and self- study questions contained in this guide will therefore provide you with opportunities to explore the latest
developments in this field and help you to discover the field of Human Resource Management as it is practiced
today.
This is a distance-learning module. Since you do not have a tutor standing next to you while you study, you need
to apply self-discipline. You will have the opportunity to collaborate with each other via social media tools. Your
study skills will include self-direction and responsibility. However, you will gain a lot from the experience! These
study skills will contribute to your life skills, which will help you to succeed in all areas of life.
We hope you enjoy the module.
MANCOSA does not own or purport to own, unless explicitly stated otherwise, any intellectual property
rights in or to multimedia used or provided in this module guide. Such multimedia is copyrighted by the
respective creators thereto and used by MANCOSA for educational purposes only. Should you wish to use
copyrighted material from this guide for purposes of your own that extend beyond fair dealing/use, you
must obtain permission from the copyright owner.
MANCOSA – Bachelor of Human Resources Management 3

B. Module Overview
The topics covered in this module include:
• Human resource management fundamentals
• The evolution of human resource management
• The human resource management system
• Current issues and challenges in human resource management
The module is a 15 credit module at NQF level 5.
It is advisable that all activities are attempted on completion of studying the course material in preparation for
assignments and examinations.
Aims of the Module:

This module has been designed and written to assist in achieving the learning outcomes, as outlined below.
At the end of this module, the learner will be able to:
• Define the sphere of responsibility of human resource management in organisations
• Describe the components of a human resource management system
• Discuss the evolution of human resource management
• Explain the relationship between human resource strategy and business strategy
• Identify and discuss the contemporary challenges facing human resource management
C. Exit Level Outcomes and Associated Assessment Criteria of the Programme
Exit Level Outcomes (ELOs) Associated Assessment Criteria (AACs)
• Demonstrate the ability to make decisions and act • Scope and context of organisational structure,
appropriately through an understanding of systems and relevant policies human resource
organisational structure, systems and relevant management practice understood
policies in human resource management practice
• Apply various methods and systems in the • Various methods and systems in the
development of human resource strategies and development of human resource strategies and
plans plans applied
• Evaluate, select and apply appropriate methods, • Various appropriate methods, procedures or
procedures or techniques when effecting human techniques of evaluated, selected and applied
resource management functions when effecting human resource management
functions

• Demonstrate an ability to develop and • Human resource management concepts, ideas

communicate ideas and opinions in well-formed and opinions presented in well - formed
arguments using appropriate academic and arguments using appropriate discourse
professional discourse when engaged in human
resources management contexts
• Demonstrate the ability to manage processes and • Processes and accountability is demonstrated
take accountability in a variety of contexts relating to manage processes in various contexts
to the management of human resources relating to the management of human resources
• Demonstrate the ability to take decisions and act • Ethical and professional conduct regarding
ethically and professionally; and decision – making demonstrated
• Contribute to improving organisational culture and • Organisational culture and climate strategies of
climate organisations are analysed and evaluated to
contribute to continuous organisational
development
D. Learning Outcomes and Associated Assessment Criteria of the Module
LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE MODULE
• Define the sphere of responsibility of • The spheres of responsibility in human resource

human resource management in management is defined and understood to appreciate its
organisations practice within the organisation
• Describe the components of a human • The components of the human resource system is
resource management system described for application within the organisational
context
• Discuss the evolution of human • The theories and general principles of human resources
resource management management are discussed to display a genealogy of
Human Resource Management.
• Explain the relationship between • The relationship between human resource strategy and
human resource strategy and business business strategy is explained to understand it
strategy interrelated nature
• Identify and discuss the contemporary • The contemporary challenges faced by human resource
challenges facing human resource managers are identify and discussed to understand how
management

HRM can effectively address these challenges to

achieve the goal of the organisations
E. Learning Outcomes of the Units

You will find the Unit Learning Outcomes on the introductory pages of each Unit in the Module Guide. The Unit
Learning Outcomes lists an overview of the areas you must demonstrate knowledge in and the practical skills you
must be able to achieve at the end of each Unit lesson in the Module Guide.
F. Notional Learning Hours
Learning time
Types of learning activities
%
Lectures/Workshops (face to face, limited or technologically mediated) 10
Tutorials: individual groups of 30 or less 0
Syndicate groups 0
Practical workplace experience (experiential learning/work-based learning etc.) 0
Independent self-study of standard texts and references (study guides, books, journal articles) 60
Independent self-study of specially prepared materials (case studies, multi-media, etc.) 20
Other: Online 10
TOTAL 100
G. How to Use this Module

This Module Guide was compiled to help you work through your units and textbook for this module, by breaking
your studies into manageable parts. The Module Guide gives you extra theory and explanations where necessary,
and so enables you to get the most from your module.
The purpose of the Module Guide is to allow you the opportunity to integrate the theoretical concepts from the
prescribed textbook and recommended readings. We suggest that you briefly skim read through the entire guide to
get an overview of its contents.
At the beginning of each Unit, you will find a list of Learning Outcomes and Associated Assessment Criteria. This
outlines the main points that you should understand when you have completed the Unit/s. Do not attempt to read
and study everything at once. Each study session should be 90 minutes without a break

This module should be studied using the prescribed and recommended textbooks/readings and the relevant
sections of this Module Guide. You must read about the topic that you intend to study in the appropriate section
before you start reading the textbook in detail. Ensure that you make your own notes as you work through both the
textbook and this module. In the event that you do not have the prescribed and recommended textbooks/readings,
you must make use of any other source that deals with the sections in this module. If you want to do further reading,
and want to obtain publications that were used as source documents when we wrote this guide, you should look at
the reference list and the bibliography at the end of the Module Guide. In addition, at the end of each Unit there
may be link to the PowerPoint presentation and other useful reading.
H. Study Material
The study material for this module includes tutorial letters, programme handbook, this Module Guide, a list of
prescribed and recommended textbooks/readings which may be supplemented by additional readings.
I. Prescribed and Recommended Textbook/Readings

There is at least one prescribed and recommended textbooks/readings allocated for the module.
The prescribed and recommended readings/textbooks presents a tremendous amount of material in a simple, easy-
to-learn format. You should read ahead during your course. Make a point of it to re-read the learning content in your
module textbook. This will increase your retention of important concepts and skills. You may wish to read more
widely than just the Module Guide and the prescribed and recommended textbooks/readings, the Bibliography and
Reference list provides you with additional reading.
The prescribed and recommended textbooks/readings for this module are:

Prescribed Textbook
• Warnich, S., Carrell, M.R. and Elbert, N.F. Hatfield, R.D. (2022) Human Resource Management in South
Africa. Seventh Edition. Andover: Cengage Learning.
Recommended Reading
• Noe, R.A., Hollenbeck, J.R. Gerhart, B. & Wright, P.M. (2023) Human Resource Management: Gaining a
Competitive Advantage. Thirteenth Edition. McGraw-Hill.

J. Special Features
In the Module Guide, you will find the following icons together with a description. These are designed to help you
study. It is imperative that you work through them as they also provide guidelines for examination purposes.
Special Feature Icon Explanation
The Learning Outcomes indicate aspects of the particular Unit you have
LEARNING to master.
OUTCOMES
The Associated Assessment Criteria is the evaluation of the students’

ASSOCIATED
understanding which are aligned to the outcomes. The Associated
ASSESSMENT
Assessment Criteria sets the standard for the successful demonstration
CRITERIA
of the understanding of a concept or skill.
A Think Point asks you to stop and think about an issue. Sometimes you
THINK POINT are asked to apply a concept to your own experience or to think of an
example.
You may come across Activities that ask you to carry out specific tasks.
In most cases, there are no right or wrong answers to these activities.
ACTIVITY
The purpose of the activities is to give you an opportunity to apply what
you have learned.
At this point, you should read the references supplied. If you are unable
READINGS to acquire the suggested readings, then you are welcome to consult any
current source that deals with the subject.
PRACTICAL Practical Application or Examples will be discussed to enhance
APPLICATION understanding of this module.
OR EXAMPLES
KNOWLEDGE You may come across Knowledge Check Questions at the end of each
CHECK Unit in the form of Knowledge Check Questions (KCQ’s) that will test
QUESTIONS your knowledge. You should refer to the Module Guide or your
textbook(s) for the answers.

You may come across Revision Questions that test your understanding
REVISION
of what you have learned so far. These may be attempted with the aid
QUESTIONS
of your textbooks, journal articles and Module Guide.
Case Studies are included in different sections in this Module Guide.
CASE STUDY This activity provides students with the opportunity to apply theory to
practice.
You may come across links to Videos Activities as well as instructions
VIDEO ACTIVITY on activities to attend to after watching the video.

Unit
1: Human Resource Management
Fundamentals

Unit Learning Outcomes
CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:
1.1. Introduction • Introduce topic areas for the unit
1.2. Definition of Human Resource • Define Human Resource Management (HRM)

Management
1.3. HRM and Personnel Management • Explain the difference between Human Resource
Management and Personnel Management
1.4. Various terms used in Human • Understand and explain the various terms used in
Resource Management Human Resource Management
1.5. Human Resource Management • List and describe the various functions of Human
Functions Resource Management
1.6. Roles and Responsibilities of the • Explain the roles and responsibilities of the Human
Human Resource Department Resource department within organisations
1.7. Line versus Staff Authority in Human • Explain the difference between line and staff authority in
Resource Management Human Resource Management
1.8. There are six key competencies • Identify and explain the professional competencies
which Human Resource required by Human Resource professionals to perform
professionals require in order to
perform effectively and add value to effectively and add value to organisations
organisations
1.9. Summary • Summarises content areas of the unit

Prescribed and Recommended Textbooks/Readings

Prescribed Textbook
• Warnich, S., Carrell, M.R. and Elbert, N.F. Hatfield, R.D. (2022) Human
Resource Management in South Africa. Seventh Edition. Andover:
Cengage Learning.
Recommended Reading
• Noe, R.A., Hollenbeck, J.R. Gerhart, B. & Wright, P.M. (2023) Human
Resource Management: Gaining a Competitive Advantage. Thirteenth
Edition. McGraw-Hill.

1.1 Introduction
The study of human resource management is vital for the effective running of an organisation. Without the
employees, very few organisations would be able to operate. Although in South Africa we have some corporate
giants, a large percentage of businesses are small and often owner managed. This small business scenario, which
concentrates its efforts on the business at hand and tends to only look at the employees when a problem occurs
and can lead to labour issues. Therefore, it must be realised that the only resource in an organisation, which reacts
when acted upon, is labour. This means that with the exception of human resources, all of an organisation’s
resources are static. Other resources gain their dynamic character from human resources.
In the South African business context, a professional and impartial resources policy, which is applicable to all
sections of society is essential for effective and efficient government and the achievement of South Africa’s
democratic, economic and social goals. Transforming the human resource component of the workforce into an
instrument, capable of fulfilling its role in bringing about changes in the employment sector of South Africa depends
on many things but, above all, it depends on the commitment and effectiveness of its employees and the manner
in which they are managed.
1.2 Definition of Human Resource Management

Guidelines on Answering Think Point:
Human Resource Management refers to activities which serve to “attract and retain employees and to ensure that
they perform at a high level and contribute to the accomplishment of organisational goals” (Jones, George & Hill,
2000).
Think Point 1
Consider the Human Resource Department within your organisation. What is
its function and what value does it add to the organisation?
If you are not employed, you are to imagine that you are in a work environment
and consider the function of the HR department and the value it adds to the
organisation.
Various definitions of human resource management exist. Below are a few popular definitions:
Noe, Hollenbeck, Gerhart and Wright (2016: 5) assert that “Human resource management refers to the policies,
practices and systems that influence employee behaviour, attitudes and performance. Many companies refer to
HRM as involving people’s practices.”

“Human Resource Management includes activities that managers engage in to attract and retain employees and
to ensure that they perform at a high level and contribute to the accomplishment of organisational goals” (Jones &
George, 2014: 369).
“The organisation’s human resource management function is that part of the management process that specialises
in the management of people in the organisation. It consists of practices that help to achieve the organisation’s
objectives and thus to gain and sustain competitive advantage” (Nieman & Bennett, 2006: 243).
“Human resource management is defined as a strategic and coherent approach to the management of an
organisation’s most valued assets – the people working there who individually and collectively contribute to the
achievement of its objectives” (Armstrong, 2006: 3).
Human Resource Management “is the process of managing human talent to achieve an organisation’s objectives”
(Snell & Bohlander, 2007: 4).
The above definitions of Human Resource Management not only have similarities, but also place an emphasis on
different aspects of people management. From the above definitions, the following is evident about Human
Resource Management:
• The focus of Human Resource Management is the management of people or human talent
• Human Resource Management ensures fit or congruency between the employee, job, organisation and
environment
• People are managed in such a way so as to ensure that employees are satisfied and the organisation
achieves its goals and attains competitive advantage
• Human Resource Management involves policies, practices, systems and activities directed towards the
management of people
Many experts agree that human resource management is the concept that has replaced concepts such as
personnel administration or personnel management. Personnel management, was viewed as second-class
function where washed up or substandard line managers would land up, with a reactive role to play. These
personnel functionaries fulfilled administrative tasks related to recruitment, selection, compensation and some
welfare service orientated functions.
Personnel management was viewed as a separate distinct area for administrators and perhaps behavioural
scientists who could help with some of the socio-psychological support functions such as selection, appraisal and
counselling. In addition, with the growth of the trade union movement, personnel managers were also seen to be
responsible for labour or industrial relations matters, dealing with issues related to trade unions, grievance,
discipline and dismissals (Swanepoel, 2014).

1.3 HRM and Personnel Management

One of the first questions any reader may be tempted to ask is why HRM rather than personnel management?
There are a number of different perceptions of what the two terms mean. Is there a difference, and if so, what is
it?
The following definitions have been provided to help the student understand the differences between personnel
management and human resources management.
1.3.1 Personnel Management

Personnel management is the planning, organising, directing and controlling of the procurement, development,
compensation, integration and maintenance of people for the purpose of contributing to the organisational goals.
Human resource management is to provide, maintain and develop individual and group efficiency and
effectiveness in order to improve individual and group performance.
Authors often use the terms “personnel management” and “human resource management” as though they are the
same. It is important to realise however that there is a difference in emphasis. The study of human resources
management shows that it has both a macro- and a micro component. The macro-component is defined as being
the channelling, training and development of a country’s human resources at government level. This has to be
done in accordance with the national demand for the supply of various occupational groups within the country’s
economy.
The micro-component means that the organisation has to obtain its human resources from within the existing
national human resources. People then need to be employed effectively within the organisation in accordance with
sound human resource practices: actual work of the organisation, providing only an administrative, rulemaking,
and regulatory service to the organisation.
Compared to personnel management, HRM has a different role to fulfil. Nel, Gerber and van Dyk (2001) distinguish
between personnel management and human resource management. They argue that the latter is more appropriate
for today’s organisations in that it provides for a holistic and strategic approach to the management of people.
1.3.2 Similarities between personnel management and human resource management

Some of the similarities between personnel management and HRM are as follows:
• Personnel management strategies, like HRM strategies, flow from the business strategy
• Personnel management, as well as HRM recognises that line mangers are responsible for managing
people. Necessary advice and support services that enable managers to carry out their responsibilities is
provided by the personnel function

• The values of personnel management and at least the “soft” version of HRM are identical with regard to
“respect for the individual” balancing organisational and individual needs and developing people to
achieve their maximum level of competence, both for their own satisfaction and to facilitate the
achievement of organisational objectives
• Techniques such as selection, competency analysis performance management, training and reward
management techniques are used in both HRM and personnel management
• Personnel management as well as HRM both stress on the importance of communication and
participation within an employee relations system
1.3.3 Differences between personnel management and human resource management

Some of the differences between personnel management and HRM are as follows:
• Personnel management is an activity aimed primarily at a non-manager, whereas HRM is less clearly
focused but is certainly more concerned with managerial staff
• HRM is much more of an integrated line management activity, whereas personnel management seeks to
influence line management
• HRM emphasises the importance of senior management being involved in the management of culture,
whereas personnel management has always been rather suspicious of organisation development and
related unitarist, social-psychologically orientated ideas (Armstrong, 2006)
• HRM can be viewed as a new and very distinct approach to people management, which has specific
characteristics based on the belief that the quality of an organisation’s human resources makes the
difference between those that are more successful and those that are less successful. All employees
have to be developed and valued
• Due to the strategic importance of HRM decisions, all such decisions have to be taken in direct relation
to and as an integral part of the corporate and/or business planning decisions of the organisation
• Human resource management decisions have long term business related implications and therefore have
to be the concern of line managers, who are the key figure in and “owners of” HRM
1.4 Various terms used in Human Resource Management

The following definitions have been provided to help you understand HRM.
• Human resources activities: Examples are activities carried out by the human resources department
such as the training of a group of employees or a recruitment campaign
• Human resources policy: these are formalised official guidelines with regard to the manner in which
personnel matters should be carried out
• Human resources beliefs: these may be described as strong convictions of the part of executive
personnel with regard to people as employees. These beliefs or convictions are one of the most important
elements of organisational culture

• Human resource management function: A function is a group of unique activities such as carrying out
a job analysis, drawing up a job description, and carrying out a salary or wage survey to create a
remuneration structure for an organisation. The human resources management function indicates all
human resources activities within an organisation
• Human resources department: This is the physical place where employees charged with carrying out
human resources management activities are found
• Human resources officials: These are employees, irrespective of their appointments, who deal with the
execution of human resource activities e.g. a human resources manager, training officials or recruitment
agents
The focus of Human Resource Management is the management of people or human talent. Human Resource
Management ensures fit or congruency between the employee, job, organisation and environment. People are
managed in such a way so as to ensure that employees are satisfied and the organisation achieves its goals and
attains competitive advantage. Human Resource Management involves policies, practices, systems and activities
directed towards the management of people.
Think Point 2
Based on your exposure so far to the field of Human Resources (e.g. in your
current work environment in reading about it / in talking to friends, family and
teachers about it), how would you define Human Resource Management
1.5 Human Resource Management Functions
HRM Functions
Company
Performance
1Figure 1.1: Human Resource Management Functions (Noe et al, 2010: 5)

1.5.1. Job Analysis & Design

Job analysis involves “the process of getting detailed information about jobs” (Noe et al, 2016: 168). The
information obtained from job analysis is used to write up job descriptions and job specifications. While a job
description provides a list of tasks, duties and responsibilities that the job entails, a job specification details the
knowledge, skills and attitudes that a person requires in order to perform the job (Noe et al 2016:168). The job
description and job specification are important documents in HRM and are used in the execution of other HRM
functions. For example, the job description and job specification is consulted when writing up an advertisement to
advertise a vacant position. The job description and specification are also consulted when an applicant’s suitability
for a vacant position is being analysed during the selection process.
1.5.2. HR Planning
HR Planning is also known as personnel planning, talent planning or workforce planning. It is the “process by
which company goals, as put forth in mission statements and company plans, are translated into HR objectives to
ensure that the company is neither over- nor understaffed, that employees with the appropriate talents, skills and
desire are available to carry out their tasks in the right jobs at the right times” (Wärnich, Carrell, Elbert & Hatfield)
For example, if a retail clothing chain decides to implement a strategy of growth over the next three years, which
will involve the opening of twenty additional stores across Gauteng, the store will need to put in place HR
processes, which support the achievement of the growth strategy. This will include the recruitment and selection
of staff at the right time to ensure that the new stores are adequately staffed. It may also require identifying existing
employees with management potential and putting them through a management development programme so that
they may step into the role of store manager when the new stores open. The forecasting of the type and number
of staff that will be required in the future, and the putting in place of action plans to ensure that these staff are
available when required, is known as HR Planning.
1.5.3. Recruitment
Recruitment is the “practice or activity carried on by the organisation with the primary purpose of identifying and
attracting potential employees” (Noe et al, 2016:210). The way in which a company recruits will influence the
number and type of people who apply for a vacant position. Recruitment methods range from direct applicants
and referrals, to advertisements in newspapers and periodicals, to graduate recruitment initiatives, to electronic
recruitment (Noe et al, 2016: 214 – 221).
For example, if a retail clothing chain were to hire shop assistants for a new store, which is soon to be opening in
the Johannesburg CBD, they would need to consider the recruitment method, which would attract the best
applicants for the position. For instance, they would need to consider whether advertising the vacant shop assistant
positions in the local newspaper, or electronically on the company’s website, would result in the best pool of
applicants for the position.

1.5.4. Selection
While recruitment aims to produce a pool of qualified applicants for a particular vacant position, the HRM function
of selection focuses on choosing the individual from the group of applicants who is best suited for a particular
vacant position (Wärnich et al, 2015: 201). Various methods are used in the selection process including interviews,
psychometric assessments, reference checks, and medical checks.
For example, the recruitment process implemented by a retail clothing store for the vacant positions of shop
assistant would have produced a pool of applicants for the position. The selection process would involve the
store’s HR practitioner, in conjunction with the relevant supervisors/managers, in working through the applications,
and establishing a shortlist of the most suitably qualified applicants. Those applicants would then need to undergo
various assessments, such as interviews and reference checks. The information obtained about each applicant
through these various assessments would be used by the HR practitioner and relevant managers/supervisors in
selecting the applicant who is most suitably qualified for the job.
1.5.5. Training and Development

Training and development is also referred to as Skills Development in South Africa. While training has a short
term focus and involves “a planned effort to facilitate the learning of job-related knowledge, skills and behaviour by
employees” (Noe et al, 2016: 273), development has a medium to long term focus and refers to “formal education,
job experiences, relationships, and assessment of personality and abilities that help employees prepare for the
future” (Noe et al, 2016: 410).
To return to the retail clothing store example, a one-day course entitled “How to Effectively Serve Customers” for
all newly appointed shop assistants is an example of training. If it is identified that certain of the shop assistants
have the potential to become supervisors, these particular shop assistants may be placed on a mentorship
programme and a one-year supervisory certificate programme. Such mentorship programmes and formal
certificate programmes are examples of development.
1.5.6. Compensation
Another important HR function is that of compensation management or remuneration. Compensation refers to “the
financial and non-financial extrinsic rewards provided by an employer for the time, skills and effort made available
by the employee in fulfilling job requirements aimed at achieving organisational objectives” (Swanepoel et al, 2008:
476).
The management of compensation is a complex and important HRM function. Not only must the remuneration
offered by a company be sufficient to attract suitably qualified applicants for available positions, but it must also be
able to retain and motivate existing employees (Swanepoel et al, 2008, 476).

For example, if a clothing store does not offer a competitive remuneration package, it is unlikely that the store will
be able to attract the most suitably qualified applicants for any vacant positions.
1.5.7. Performance Management

Performance management is an important HRM function, which ensures that employee efforts are directed towards
the achievement of the organisation’s goals. Performance management is defined as “the process through which
managers ensure that employees’ activities and outputs are congruent with the organisation’s goals” (Noe et al,
2016: 351).
Performance management involves a three-stage process. First, the performance expected of an employee is
discussed, agreed and written down in the form of a performance contract. Second, employee performance is
monitored and assessed through a performance appraisal process. And finally, feedback is provided to employees
regarding their performance, and their areas of strength and weakness, through performance feedback (Noe et al,
2016: 351).
1.5.8. Employee Relations

Employee relations is also known as employment relations, industrial relations, or labour relations. Employee
relations is “concerned with the relations (primarily collective but also to a lesser extent individual) between
employers (and/or managers as the representatives of employers) and workers (and/or their representatives such
as trade unions) which develop from employment relationships and which are essentially concerned with balancing
the various interests of, and regulating the levels of cooperation and conflict between the parties involved. In all
of this, the government and its relevant representatives, institutions, structures, systems and laws play an
important, though secondary role, and the role of other stakeholders is also important” (Swanepoel et al, 2008:
581).
In South Africa, a number of pieces of labour legislation direct the employment relationship. These include the
Employment Equity Act No 55 of 1998, the Basic Conditions of Employment Act No 75 of 97, the Labour Relations
Act No 66 of 1995, the Occupational Health and Safety Act No 85 of 1993, the Skills Development Act No 97 of
1998, the Skills Development Levies Act No 9 of 1999, the Compensation for Occupational Injuries and Diseases
Act No 130 of 1993, and the Unemployment Insurance Act No 63 of 2001 (Nel et al, 2014: 27 – 51).
1.6 Roles and Responsibilities of the Human Resource Department

The roles and responsibilities of the human resource department within an organisation are dependent on the size
of the company, the characteristics of the workforce, the industry, as well as the value system of the organisation’s
management (Noe et al, 2016: 5). While the HR department “may take full responsibility for human resource
activities in some companies...in others it may share the roles and responsibilities with managers of other
departments such as finance, operations, or information technology” (Noe et al, 2016: 5 – 6).

The HR department may be regarded as a business, with three product lines:

• Administrative Services & Transactions: This is the product line, which has traditionally been provided
by the HR department. The focus is on the efficient use of resources and service quality. HR’s role tends
to be limited to the administration of compensation, hiring and staffing practices (Noe et al, 2016: 6)
• Business Partner: The business partner role of HR is one that has emerged in recent years. The HR
department is required to know the business, exercise influence and effectively manage talent so as to
help implement business plans
• Strategic Partner: HR’s role as a strategic partner is a very recent development. HR is considered to be
an equal partner in strategy formulation and implementation. HR is required to contribute to the business
strategy, particularly in terms of human capital considerations, business capabilities, readiness and
“developing HR practices as strategic differentiators” (Noe et al, 2016:6)
HR’s three product lines are shown in Figure 1.2.
HR as a Business with Three Product Lines
HR’s Three Product Lines
Administrative Services Business Partner Strategic Partner

& Transactions
Compensation Developing effective HR Contributing to business
Hiring systems and helping strategy based on
Staffing implement business plans considerations of human
& talent management capital, business
capabilities, readiness, and
developing HR practices as
strategic differentiators
2Figure 1.2: HR as a Business with Three Product Lines (Noe et al, 2016: 6)
1.7 Line versus Staff Authority in Human Resource Management

There is truth in Dessler et al’s (2011:4) statement that “all managers are human resource managers” in that
managers from all parts of an organisation are involved in human resource activities such as recruiting, selecting
and training. However, while all managers are involved in human resource activities, it is also important for
organisations to have HR departments that specialise in the management of human resource issues.
It is important to distinguish between line authority and staff authority:

• Line authority gives managers “the right to issue orders to other managers or employees. It creates a
superior-subordinate relationship” (Dessler et al, 2011: 4)

• Staff authority gives managers “the right to advise other managers or employees. It creates an advisory
relationship” (Dessler et al, 2011: 4)
Therefore, managers with staff authority can only provide advice, and cannot issue orders down the line of
command (except in their own departments). Human resource managers are usually staff managers within
organisations, and they assist and advise managers on all HR related issues, such as recruiting, training and
compensation. Line managers (e.g. sales manager, production manager) then utilise the advice provided by HR
managers to implement HR processes within their respective departments
(Dessler et al, 2011: 4).
The types of HR activities which line managers are responsible for implementing, under the guidance of the HR
department, include:
• Placing the right person in the right job
• Orientating new employees within their departments
• Training employees on jobs that are new to them
• Providing performance feedback to employees and assisting them in improving their performance
• Gaining employees cooperation and developing productive workplace relationships
• Interpreting the company’s policies and procedures
• Controlling the cost of labour
• Developing employee’s abilities
Creating and maintaining positive morale amongst employees within the department Supporting the employees’
health and wellbeing (Dessler et al, 2011:4).
In small organisations, where there is no HR department, line managers perform these HR responsibilities
unassisted. However, in medium to large organisations the HR department provides line managers with
specialised assistance (Dessler et al, 2011:4).
1.8 There are six key competencies which Human Resource professionals require in order to perform
effectively and add value to organisations
These competencies depicted in Figure 2.3 include:
1 Strategic Positioner
2 Credible Activist
3 Capability Builder
4 Change Champion
5 Innovator and Integrator
6 Technology Proponent

Human Resource Competencies
Strategic
Positioner
Technology Credible
Proponent Activist
HUMAN
RESOURCE
COMPETENCIES
Innovator
Capability
&
Builder
Integrator
Change
Champion
3Figure 2.3: Human Resource Competencies (Ulrich, Younger & Brockbank, 2012: 17)
• Strategic Positioner: HR professionals have the ability to understand the global business context, and the
business implications thereof. They understand the political, social, economic, environmental, technological
and demographic factors within their organisation’s environment and with these in mind “they help develop
customer-focused business strategies and translate the strategy into business plans and goals” (Ulrich et al,
2012: 17)
• Credible Activist: HR professionals have integrity, effective interpersonal skills and influence. The
combination of these characteristics enables them to contribute to “business results through consistent, clear
and insightful verbal and non-verbal communications...they are activists for the business and advocates for HR
in driving business results” (Ulrich et al, 2012: 17)
• Capability Builder: HR professionals assist the organisation in developing capabilities, which will enable it to
gain competitive advantage. Such capabilities may include customer focus, speed or innovation (Ulrich et al,
2012: 17)
• Change Champion: HR professionals ensure that the organisation is equipped to embrace change, which is
required to remain competitive. They “develop effective change processes and structures to ensure that the
capacity for change on the inside is greater than the rate of change on the outside” (Ulrich et al, 2012: 17)

• Innovator & Integrator: HR professionals ensure that HR processes are designed to support the
implementation of the organisation’s strategy
“HR processes ensure that desired results are prioritised, that necessary capabilities are powerfully
conceptualised and operationalised and that appropriate HR practices, processes, structures and procedures
are aligned to create and sustain the identified capabilities and achieve results” (Ulrich et al, 2012: 17)
• Technology Proponent: The HR professional understands the need to use technology effectively to manage
HR processes and to manage large amounts of information. HR professionals also understand how to
effectively use social networking technology to enhance the connectedness of employees within and outside
the organisation (Ulrich et al, 2012: 17)
Case Study 1
The impact of Covid-19 on human resource management: avoiding
generalisations.
By: Eileen Aitken-Fox, Jane Coffey, Kantha Dayaram, Scott Fitzgerald, Chahat
Gupta, Steve McKenna, and Amy Wei Tian
While there is now a great deal of discussion concerning the impact of Covid-
19 on and implications for working practices and human resource management
(HRM), much of the content and comment on these topics tends to be of a
general nature, offering observations and/or guidance that seek to define what
a ‘new normal’ might be. For example, that remote working will become the
norm, or that working practices will become more flexible. While this may be
indeed what happens, because Covid-19 is a global pandemic, we need to
understand its impact on working practices, well-being and HRM in specific
contexts. It is likely many changes will be common across country contexts,
but we should also expect, given institutional differences, that there will be
localised nuances. In Australia, through a survey of and interviews with
managers and others with people management responsibility, our ongoing
research has highlighted some important outcomes.
First, while the majority of industries have been negatively affected by Covid-
19, particular industries and sectors have been affected positively. For
example, in Australia, amidst some reports of negative impact, many
respondents from healthcare and social assistance, public administration,
finance and insurance and mining have reported a positive impact.

As would be expected, the majority of our respondents so far have moved to

remote working, but most have not made positions redundant and have worked
to retain staff without using government subsidies. In some sectors, some
additional hiring has been undertaken while in most, hiring freezes have been
put in place.
Second, while many commentators are predicting an increase in remote

working in the future, this is not at all clear from our responses up to now. As
we would expect, organisations are reviewing the effectiveness of remote
working almost on a daily basis, but many are yet to make any commitment to
long-term remote working. It appears that organisations do not yet know how
remote working is affecting performance and productivity, which is hardly
surprising given that most are using it for the first time. There is also the
requirement of putting in place new systems, policies and procedures for
remote working which in the Australian context is not something that can be
introduced without due diligence. Organisations are certainly debating the
issue with as yet no clear-cut decisions as to whether remote working will
continue beyond the pandemic.
Third, respondents are highlighting some key issues across a range of people
management topics as they work to deal with changing working practices.
Overall, the general sense is that people management is having to become
more agile and more responsive as a consequence of the changed situation.
In particular, respondents have mentioned the need to differentiate between
compliance that is required in the Australian context (for example, the
importance of compliance to changing legal circumstances) and compliance
with internal policies and procedures that can be side-stepped to provide
greater agility and flexibility. This balancing act will not be relevant to all
national contexts where the law relating to employment matters can be ignored
or side-stepped.
More specifically, respondents have indicated that because many of the central
issues involved in business continuity are around working practices and people
management, they themselves are feeling much more valued.

Issues being highlighted by our respondents include the more prosaic issues
of ensuring that staff have functioning technology at home as well as ensuring
effective communication, supervision, productivity and performance
management, employee engagement and support, re-aligning employee
benefits and re-designing policies in relation to remote working. The role of HR
professionals and their expertise has increased in significance in many
organisations as they seek to make agile and effective adaptations in the
Australian context.
Fourth, it is also apparent from our study that employee well-being and safety
is of crucial importance. The move to remote working does not suit everyone
and even in Australia, where a full lockdown has never been implemented,
psychological well-being and safety is an issue. The elements involved in this
are obviously many. Not only will individuals respond to the demands of remote
working differently, but the home context will also be specifically important in
influencing well-being and safety, for example, in relation to spatial
arrangements and family demands. These aspects of employee welfare create
the need for different and new areas of HR expertise to be applied in
organisations.
Fifth, respondents have highlighted some employee behaviours and actions

that they recognise as having been helpful in business continuity. For example,
employee willingness to collaborate with each other and with human resource
professionals and departments in making changes, and employee willingness
to be flexible and adaptable; complying with necessary changes to safety
measures and; a willingness to learn and upskill quickly. Such positive
behaviours have enabled some organisations to manage rapid change
effectively. In terms of unhelpful behaviours, respondents have highlighted that
managers have had problems with accepting remote working because of their
perception that it negatively affects performance, which leads to micro-
management. HR professionals need to be expert at advising managers how
to effectively manage performance of a remote workforce, while the issue of
micro-management is often a cover for the lack of trust managers have towards
their staff once they are ‘invisible’.

The issue of trust is clearly important, in that managers who lack trust in their
staff in the office will not suddenly develop it when their staff are working
remotely. Given that trust (and fairness) are central tenets of effective
management and employee performance, it is unsurprising that managers who
micro-manage will see a fall in productivity. In the longer term, these are issues
that need to be addressed by organisations in a broader context.
From the responses to our study so far, and we continue to gather data, HR
professionals and others with people management responsibilities in Australia
are having to bob and weave almost on a daily basis. As part of the requirement
for them to be more agile, they are having to learn new skills, develop new
expertise and disrupt some old practices. They are having to learn very quickly
how to support remote working. In particular, this is with respect to issues of
performance, changing benefit scenarios and psychological well-being. In
addition, they are dealing with managerial trust issues concerning remote staff
and micro-management.
Our respondents are indicating that they have to be much more ‘tech savvy’ in
offering support and in other aspects of their support role as HR professionals.
They have also to develop new policies, but more importantly, practices, with
respect to performance management. Respondents also highlighted that to
have business and people management continuity plans in place has now
taken on much greater urgency for the future.
As our international study develops and we gather data from seven countries,
as well as continuing to gather data from Australia, we will begin to get an
increasingly detailed and inevitably complex picture of the impact of and
implications for working practices and HRM systems of the Covid-19 pandemic.
We might assume that some of these issues will be common in many countries.
Knowledge Check Question 1

1. Define human resource management
2. Differentiate between personnel management and human resource
management
3. Discuss the similarities between personnel management and human
resource management

4. List and describe the various functions of human resource management

5. Explain the roles and responsibilities of the human resource department
within organisations
Revision Question 1
1. Define the following terms:
1.1. Human resource activities
1.2. Human resources policy
1.3 Human resources beliefs
1.4. Human resource management function
1.5. Human resources department
2. Tabulate the differences between line and staff authority
3. Identify and explain the professional competencies required by human
resource practitioners to perform effectively in organisations today
4. List the types of activities which line managers are responsible for
implementing under the guidance of the human resource department in
organisations today
5. Describe the difference between a business partner and a strategic
partner
1.9 Summary
This section introduced human resource management by providing the various definitions and other terms used in
human resource management. A further discussion was provided on the differences between personnel
management and human resource management as well as an introduction to the functions and responsibilities of
human resource management in organisations. This was followed by brief discussion on line and staff authority as
well as the professional competencies required by human resource professionals in organisations.

Answers to activities

1. Section 1.2 – various definitions provided
2. Section 1.3 – highlight the differences between personnel management and human resource management
3. Section 1.3 – identify similarities and differences between personnel management and human resource
management to be identified
4. Section 1.5 Describe the following functions:
• Job analysis and design
• HR Planning
• Recruitment
• Selection
• Training and Development
• Compensation
• Performance management
• Employee relations
5. Section 1.6 - Explain HR as a business with three product lines:
• Admin services and transaction partner
• Business partner
• Strategic partner

Unit
2: The Evolution of Human
Resource Management

2.1. Introduction • Introduce topic areas for the unit
2.2. Pre-Scientific Management • Explain Pre-Scientific Management and identify its impact on
human resource management
2.3. Scientific Management Approach • Explain the Scientific Management approach and describe
its impact on human resource management
2.4. Human Relations Approach • Describe the Human Relations approach and identify its
impact on human resource management
2.5. The Human Resource Approach • Explain the Human Resource approach and describe its
impact on human resource management
2.6. Summary • Summarises content areas of the unit

Prescribed Textbook
Cengage Learning.
Recommended Reading

2.1 Introduction
Human resource management has evolved over many years. It is significantly different today to what it entailed
when it first emerged during the late 1800s and early 1900s.
This section explores The Evolution of Human Resource Management through addressing the following:
• Pre - Scientific Management
• Scientific Management
• Human Relations Approach
• Human Resource Approach
• Summary
2.2 Pre-Scientific Management

Prior to the Industrial Revolution organisations did not exist. The majority of people occupied themselves with home
crafts and agriculture (Swanepoel et al., 2014). Therefore, there was no formal employment relationship and no
need for a focus on Human Resource Management.
The Industrial Revolution, occurring in the late eighteenth century and early nineteenth century, brought about
technological, social and economic changes. Working life moved from the family home as factories were
established and people were employed (Swanepoel et al., 2014). It was at this time that a type of Human Resource
Management emerged, where some employers sought ways to better utilise their employees.
However, prior to the emergence of Scientific Management in the early 1900s, the general perception was that all
employees are equally productive and if they did not produce as required, their services would be terminated.
Effective management was regarded to be constant supervision, fear and intimidation (Grobler, Wärnich, Carrell,
Elbert & Hatfield, 2011).
2.3 Scientific Management Approach

The period 1880 to 1920 saw a massive growth in factory type work (Swanepoel et al., 2014) and the emergence
of Scientific Management. Scientific Management focused on increasing efficiency through the scientific design of
work processes.
2.3.1. Characteristics of Scientific Management

Frederick Taylor is regarded to be the “father’ of Scientific Management. He used a scientific approach to gather
information about the motions, time and tools required for each task which a job entailed. Based on this information
he set fair performance standards for each job (Grobler et al., 2011). Taylor also believed that efficiency can be
improved through employees performing routine tasks where they were not required to make any decisions, as
well as through job specialisation.

He developed a differential piece rate wage incentive system, where employees whose output was above the
performance standard received financial incentives (Hellriegel, Jackson, Slocum, Staude, Amos, Klopper, Louw &
Oosthuizen, 2004).
Frank and Lillian Gilbreth also made significant contributions to Scientific Management. The Gilbreths used motion
pictures to study an employee’s movements and improve his / her efficiency. In one study, they identified 18
motions, which a bricklayer used to lay bricks. They then changed the brick laying process to reduce this to 5
motions, thereby improving the employee’s overall productivity by a significant 200% (Hellriegel, et al, 2004).
Henry Gantt is another proponent of Scientific Management. His focus was on control systems for production
scheduling. He developed the Gantt chart (which is still widely used in project management today) as a tool to
control production scheduling (Hellriegel et al., 2004). Like Taylor, Gantt also gave attention to establishing quota
systems with financial bonuses for employees who exceeded their quotas.
2.3.2. Advantages of the Scientific Management Approach
Think Point 1
What do you think the advantages of the Scientific Management approach
could be?
Comment on Think Point

A key advantage of the Scientific Management approach is that it provides a means to produce and / or deliver a
service faster and more cheaply (Hellriegel et al., 2004). There is also an emphasis on effective employee selection
and training processes. The Scientific management approach has contributed towards the development of work
study practices, results based pay and production controls (Mullins, 1999). Given the focus on routine work with
limited decision making on the part of the employee, Scientific Management practices have been found to be useful
in certain contexts, such as developing countries where there is much unskilled labour (Mullins, 1999).
2.3.3. Disadvantages of the Scientific Management Approach
Think Point 2
What do you think could be the disadvantages of the Scientific Management
approach?


The Scientific Management approach is not without its disadvantages. In particular, the employee is viewed as a
machine and the human element of the employee is ignored (Mullins, 1999). Furthermore, Scientific Management
assumes that employees are only motivated by money to fulfil their financial and physical needs and fails to
recognise the employee’s social needs as well as the significant impact of job satisfaction on motivation (Hellriegel
et al., 2004).
In this regard, Hellriegel et al. (2004: 52) argues that “dividing jobs into their simplest tasks and setting clear rules
for accomplishing those tasks will not always lead to a quality product, high morale and an effective organisation.
Contemporary employees often want to participate in decisions that affect their performance; many want to be
independent and hold jobs that give them self-fulfilment.”
2.3.4. Scientific Management’s Impact on Human Resource Management

Scientific Management had a significant impact on the work of human resource professionals (then known as
“personnel staff”). In addition to attending to recruitment and selection, training, and health and safety issues,
Scientific Management’s focus on efficiency and motivation through financial incentives resulted in personnel staff
performing the following:
• Time and motion studies
• Fatigue studies
• Job analysis
• Job specifications
• Wage incentive programmes (Grobler et al., 2011)
At this time, the personnel department (as it was then called), also implemented various employee welfare
programmes, addressing what the employing organisations felt to be the needs of the employees through company
housing, employee loans and canteens (amongst others). These welfare programmes reflected the paternalistic
attitude and practices of management (Grobler et al., 2011).
2.4 Human Relations Approach

The Human Relations approach emerged during the 1920s and 1930s (Hellriegel et al., 2004), partially in reaction
to the de-humanised approach of Scientific Management. The 1920s and 1930s, was a time of considerable social
change which resulted in greater attention being given to social factors at work and the behaviour of employees
within organisations (Mullins, 1999)?

2.4.1 Characteristics of the Human Relations Approach

The Hawthorne experiments, led by Elton Mayo, were conducted at the Western Electric Company’s plant in
Chicago between 1924 and 1933 and were key to the development of the Human Relations approach (Hellriegel
et al., 2004).
Think Point 3
Imagine that you are a worker on a production line in a factory. A group of
researchers come to your factory to perform an experiment with the lighting:
1. The researchers first improve the lighting in the factory (i.e. make the
lighting brighter) - how do you think this will affect your productivity as a
factory worker?
2. Then the researchers reduce the amount of lighting in the factory (i.e.
make the lighting dimmer) - how do you think this will affect your
productivity as a factory worker?

Learners should compare their responses with the results of the Hawthorne experiments, which are addressed
below.
The Hawthorne Experiments

One of the experiments that was performed at Western Electric Company’s Hawthorne plant was similar to that
described in the above “Think Point”. The Hawthorne experiment found that when the lighting was improved,
employees’ productivity increased. The researchers were also very surprised to find that when the lighting was
reduced, the employees’ productivity also increased (Hellriegel et al., 2004). It was concluded that the employees’
productivity increased in both circumstances due to the special attention that the employees felt that they had been
receiving. Further, experiments were conducted at the plant, which showed that the social environment of the
employees greatly influenced productivity (Hellriegel et al., 2004).
Case Study 1
The Hawthorne Effect and Behavioural Studies.
By: Kendra Cherry
The Hawthorne effect is a term referring to the tendency of some people to
work harder and perform better when they are participants in an experiment.
The term is often used to suggest that individuals may change their behaviour
due to the attention they are receiving from researchers rather than because
of any manipulation of independent variables.

The Hawthorne effect has been widely discussed in psychology textbooks,

particularly those devoted to industrial and organizational psychology.
However, research suggests that many of the original claims made about the
effect may be overstated.
History
The Hawthorne effect was first described in the 1950s by researcher Henry A.
Landsberger during his analysis of experiments conducted during the 1920s
and 1930s. The phenomenon is named after the location where the
experiments took place, Western Electric’s Hawthorne Works electric
company just outside of Hawthorne, Illinois.
The electric company had commissioned research to determine if there was a

relationship between productivity and work environments. The original
purpose of the Hawthorne studies was to examine how different aspects of
the work environment, such as lighting, the timing of breaks, and the length of
the workday, had on worker productivity.
In the most famous of the experiments, the focus of the study was to
determine if increasing or decreasing the amount of light that workers
received would have an effect on how productive workers were during their
shifts. In the original study, employee productivity seemed to increase due to
the changes but then decreased once the experiment was over.
What the researchers in the original studies found was that almost any
change to the experimental conditions led to increases in productivity. For
example, productivity increased when illumination was decreased to the
levels of candlelight, when breaks were eliminated, and when the workday
was lengthened.
The researchers concluded that workers were responding to the increased

attention from supervisors. This suggested that productivity increased due to
attention and not because of changes in the experimental variables.
Landsberger defined the Hawthorne effect as a short-term improvement in
performance caused by observing workers. Researchers and managers

quickly latched on to these findings. Later studies suggested, however, that

these initial conclusions did not reflect what really happening.
The term Hawthorne effect remains widely in use to describe increases in

productivity due to participate in a study, yet additional studies have often
offered little support or have even failed to find the effect at all.
Subsequent Research
Later research into the Hawthorne effect suggested that the original results
may have been overstated. In 2009, researchers at the University of Chicago
reanalysed the original data and found that other factors also played a role in
productivity and that the effect originally described was weak at best.
Researchers also uncovered the original data from the Hawthorne studies
and found that many of the later reported claims about the findings are simply
not supported by the data. They did find, however, subtler displays of a
possible Hawthorne effect.1
While some additional studies failed to find strong evidence of the Hawthorne
effect, a 2014 systematic review published in the Journal of Clinical
Epidemiology found that research participation effects do exist. After looking
at the results of 19 different studies, the researchers concluded that while
these effects clearly happen, more research needs to be done in order to
determine how they work, the effect they have, and why they occur.2
Other Explanations
While the Hawthorne effect may have an influence on participant behaviour in
experiments, there may also be other factors that play a part in these
changes. Other factors that may also influence improvements in productivity
include:
• Demand characteristics: In experiments, researchers sometimes
display subtle clues that let participants know what they are hoping
to find. As a result, subjects will alter their behaviour to help confirm
the experimenter’s hypothesis
• Novelty effects: The novelty of having experimenters observing
behaviour might also play a role. This can lead to an initial increase
in performance and productivity that may eventually level off as the
experiment continues

• Performance feedback: In situations involving worker productivity,

increased attention from experimenters also resulted in increased
performance feedback. This increased feedback might actually lead
to an improvement in productivity
While the Hawthorne effect has often been overstated, the term is still useful as
a general explanation for psychological factors that can affect how people
behave in an experiment.
How to Reduce the Hawthorne Effect?
In order for researchers to trust the results of experiments, it is essential to
minimise potential problems and sources of bias such as the Hawthorne
effect. So what can researchers do to minimise these effects in their
experimental studies?
• Conduct experiments in natural settings: One way to help
eliminate or minimise demand characteristics and other potential
sources of experimental bias is to utilise naturalistic
observation techniques. However, it is also important to note that
this is simply not always possible
• Make responses completely anonymous: Another way to combat
this form of bias is to make the participants' responses in an
experiment completely anonymous or confidential. This way,
participants may be less likely to alter their behaviour as a result of
taking part in an experiment
A Word from Very well

Many of the original findings of the Hawthorne studies have since been found
to be either overstated or erroneous, but the term has become widely used in
psychology, economics, business, and other areas. More recent findings
support the idea that these effects do happen, but how much of an impact they
actually have on results remains in question. Today, the term is still often used
to refer to changes in behaviour that can result from taking part in an
experiment.
Unionism
The 1920s saw the rise of unionism, which had a considerable impact on the emergence of the Human Relations
approach. The formation of labour unions enabled unskilled workers to have a degree of influence over
management’s decisions. In South Africa, unionism emerged from foreign workers who came to this country to
work on the gold and diamond mines (Hellriegel, et al, 2004).

Strikes on the mines lead to the promulgation of the Industrial Conciliation Act which was passed in 1924. This
piece of legislation gave workers the legal right to bargain collectively with employers regarding disputes around
wages and various working conditions.
The Act impelled employers to improve employee relations (Hellriegel et al., 2004). Overall, unionism facilitated a
greater acceptance of the Human Relations approach in many organisations within South Africa.
Key Assumptions of the Human Relations Approach

The Hawthorne experiments and unionism led to the following key assumptions, which underpin the Human
Relations approach:
• Employees are motivated by social needs
• Employees respond more to social forces (e.g. peer pressure) than to management’s rules and financial
incentives
• Employee participation in decision making is necessary to improve efficiency
• Employees will respond better to managers who are able to fulfil their needs (Hellriegel et al., 2004)
Comparison of Human Relations Approach and Scientific Management Approach

While Scientific Management sought to increase production through job design and work organisation, Human
Relations focused on increasing production through “humanising” the work organisation (Mullins, 1999). Scientific
Management adopted a more managerial perspective, while Human Relations acknowledged the importance of
understanding the psychological and social needs of employees.
2.4.2 Advantages of the Human Relations Approach
Think Point 4
What do you think could be the advantages of the Human Relations approach?

A key advantage of the Human Relations approach was that it succeeded in improving the working environment
for many employees (Grobler et al., 2011). The approach addressed the shortcomings of Scientific Management
through providing a focus on the importance of group dynamics, leadership, communications and job design
(Mullins, 1999).

2.4.3 Disadvantages of the Human Relations Approach
Think Point 5
What do you think the disadvantages of the Human Relations approach could
be?

Grobler et al. (2011: 4) identifies that the Human Relations approach “achieved only minimal success in increasing
worker output and enhancing job satisfaction” and that the performance of the approach overall was “lackluster.”
The limited success of the Human Relations approach may be attributable to a variety of factors:
• The approach was founded on the oversimplified principle that “a happy worker is a hard worker.” This,
however, is not true for all employees
• The approach did not consider individual differences across employees (e.g. employees have different
needs, wants and values)
• The approach failed to give attention to the importance of job structures, controls on employee behaviour,
procedures, standards and work rules
• The approach did not recognise that a variety of factors, other than good human relations, were necessary
to sustain a high level of motivation (Grobler et al., 2011).
2.4.4 Impact of Human Relations Approach on Human Resource Management

The Human Relations approach ensured that management and personnel staff no longer viewed employees simply
as ‘factors of production’, and emphasised the need to give attention to the social side of people management
(Swanepoel et al., 2014).
Personnel management became a “reactive function which had to serve and support the other functions within the
context of pre-existing organisational structures and established goals and objective” (Swanepoel et al., 2014:7).
The Personnel department would respond to requests from other departments (e.g. Finance, Manufacturing) for
specialised advice and support on issues pertaining to recruitment, remuneration, training and personnel
administration.

2.5 The Human Resource Approach

The Human Resource approach started to emerge during the 1960s.
2.5.1 Key Characteristics of the Human Resource Approach

While the focus of the Human Relations approach was on the ‘softer’ issues of a supportive and friendly
management style, which takes cognisance of the feelings and social needs of employees, the Human Resource
approach emphasised the ‘resource’ value of employees in terms of their personality, ability and potential
contributions to the organisations (Swanepoel et al., 2014).
Frederick Herzberg’s motivator-hygiene theory made a substantial contribution to the development of the Human
Resource approach. Herzberg identified two different factors, which impacted on motivation and satisfaction at
work: motivators / growth factors and hygiene / maintenance factors (Mullins, 1999):
• Hygiene / maintenance factors are primarily concerned with the work environment (e.g. good pay, good
interpersonal relationships between employees and immediate managers). If absent, they lead to job
dissatisfaction
• Motivators / maintenance factors are concerned with job content (e.g. interesting work, challenging
assignments, responsibility) If present, the lead to job satisfaction (Mullins, 1999)
• With the emergence of the Human Resource approach, what was previously known as “Personnel
Administration / Management” was renamed “Human Resource Management” (Swanepoel, 2014). The
principles which underlie the “Human Resource” approach include the following:
• Employees are seen to be assets and therefore need to be managed and developed to ensure enhanced
productivity and contribution to the organisation
• Both the financial and emotional needs of employees should be satisfied through the organisation’s
policies, procedures and practices
• The working environment should facilitate and promote the optimal development and application of the
employees’ skills
• HR policies, practices and programmes should focus on balancing the needs and objectives of both the
organisation and the employee (Grobler et al., 2004)
The Human Resource approach also initiated the change in how the personnel department and staff were viewed.
During the era of Scientific Management and the Human Relations approach, Personnel Administration (as it was
then called) played a reactive role providing a support function to the various other departments within an
organisation (Swanepoel et al., 2014). However, this changed with the emergence of the Human Relations
approach, where Human Resources Management started to be seen as a partner in ensuring the success and
competitive advantage of an organisation.

2.5.2 Advantages of the Human Resource Approach

The key advantage of the Human Resource approach is its business orientation and the emphasis given to
integrating Human Resource Management with the general management function (Swanepoel et al., 2014). This
is particularly important given that in many instances it is an organisation’s human capital, which is the source of
its competitive advantage.
2.5.3 Disadvantages of the Human Resource Approach

A key disadvantage regarding the Human Resource approach is the confusion, which exists around it. Many
management theorists as well as some Human Resource / Personnel professionals view the Human Resource
approach as simply a new term for Personnel management (Swanepoel, 2014). However, this is not so.
2.5.4 Impact of the Human Resource Approach on Human Resource Management

Numerous organisations have not been very successful in integrating the Human Resource approach into their
Human Resource Management Practices.
At most, they have simply changed the name of the “Personnel” department to the “Human Resource” department.
However, Ulrich (1998:124) argues that the effective application of the Human Resource approach is necessary
for achieving “organisational excellence.”
Knowledge Check Questions 1
Now that you have completed this section on the Evolution of Human Resource
Management, check your understanding by completing the multiple choice
questions below and on the pages that follow:
1. The belief that all employees should be equally productive, and that
effective management involves constant supervision and intimidation is
a principle of which of the following approaches?
A. Pre-Scientific Management Approach
B. Scientific Management Approach
C. Human Relations Approach
D. Human Resource Approach
2. The practice of closely examining work processes and then adjusting

them to make them more efficient is a characteristic of which of the
following approaches?

3. The belief that employees are motivated by social needs and that social
forces (such as peer pressure) are more powerful than management’s
rules is characteristic of which of the following approaches:
4. The belief that HR policies and practices should focus on balancing the
needs and objectives of both the organisation and the employee is
characteristic of which of the following approaches?
Revision Question 2
1. Describe the characteristics of the Scientific Management approach
2. Highlight the advantages and disadvantages of the Scientific
Management approach
3. Discuss the impact that the Scientific Management approach had on
4. Describe the characteristics of the Human Relations approach
5. Highlight the advantages and disadvantages of the Human Relations
approach
6. Discuss the impact that the Human Relations approach had on
7. Describe the characteristics of the Human Resource approach
8. Highlight the advantages and disadvantages of the Human Resource
approach
10. Discuss the impact that the Human Resource approach had on

2.6 Summary
This section focused on The Evolution of Human Resource Management. The impact of the Pre-Scientific
Management, Scientific Management, Human Relations and Human Resource approaches on Human Resource
Management were explored.


1. A
2. B
3. C
4. D

Unit
3: Strategic Human Resource
Management

3.1 Introduction • Introduce topic areas for the unit
3.2 What is Strategic Management? • Explain the concept of Strategic Management
3.3 Strategic Human Resource • Explain the concept of Strategic Human Resource
Management (SHRM) Management (SHRM)
3.4 The integration of Strategic Human • Discuss how Strategic Human Resource Management
Resource Management and the should be an integral part of the Strategic Management
Strategic Management Process process
3.5 Summary • Summarises content areas of the unit

Prescribed Textbook
Cengage Learning.
Recommended Reading

3.1 Introduction
This section provides an overview of Strategic Human Resource Management. The following issues will be
addressed:
• What is Strategic Management?
• What is Strategic Human Resource Management (SHRM)?
• What is involved in the Strategy Human Resource Management Process?
3.2 What is Strategic Management?

While strategy “guides an organisation in realising its stated goals and assists in retaining competitive advantage”
(Nel et al, 2014: 392), strategic management refers to “a process, an approach to addressing the competitive
challenges an organisation faces. It can be thought of as managing the pattern or plan that integrates an
organisation’s major goals, policies, and action sequences into a cohesive whole” (Noe et al, 2016: 74). Strategic
management is critical to ensuring that an organisation survives, and even thrives, within the environment in which
it operates. Without strategic management, an organisation would not have direction, and would find it difficult to
compete within the business environment.
Strategies that organisations may implement include:
• Defender Strategy which is aimed at protecting the organisation’s current market share
• Growth Strategy which is aimed at expanding an organisation’s market share and revenue
• Cost-Cutting Strategy which is aimed at reducing costs and expenditure
• Differentiation Strategy which involves an organisation in distinguishing itself from other organisations
through establishing a unique brand or image (Nel et al, 2014: 402 – 402)
3.3 Strategic Human Resource Management (SHRM)

Strategic Human Resource Management, or SHRM, is “a pattern of planned human resource deployments and
activities intended to enable an organisation to achieve its goals’ (Noe et al, 2016:75). SHRM may also be
described as “the interface between HRM and strategic management” (Boxall cited in Armstrong, 2015: 16). It is
essentially about “systematically linking people with the firm” (Schuler and Jackson cited in Armstrong, 2015: 16)
in that it determines how an organisation’s goals will be achieved through the organisation’s employees by means
of HR strategies, policies and practices. Table 3.1 shows how HR strategies support different organisational
strategies.

1Table 3.1 HR strategies supporting different organisational strategies.

Organisational Strategy and HR Strategy Alignment
Organisational HR Strategy
Strategy Training and Development Recruitment and Selection Compensation
Defender Skill-building training Focus on internal • pay dependent on

Total
Strategy programmes recruitment employee’s
• position
Protecting within organisational
current market Focused on existing job Recruitment of employees hierarchy
share requirements and with standardised skills
organisational policies and Compensation is based
procedures Cost-effective, on performance of
unsophisticated selection specific work-related
Performance management practices tasks
includes a strong
developmental focus
Much of the training provided

by internal department
Growth Organisation requires Focus on external Compensation
Strategy employees with a diverse set recruitment and head- linked to
Increasing of skills, as these are hunting of top-performers performance
market share required for innovating new from competitors management
and revenue products and ideas. Sophisticated selection system
practices Emphasis on
Much of the training is (e.g. psychometric incentive pay
provided by external training assessments) Team-based
consultants and institutions Succession plan in place rewards utilised to
providing for encourage
advancement of top innovation and
performers collaboration
amongst
employees
Organisational Strategy and HR Strategy Alignment
Organisational HR Strategy

Strategy Training and Development Recruitment and Selection Compensation
Cost-Cutting No generic training Focus on internal •

Payroll viewed as a
Strategy programmes recruitment to eliminate major
• organisational
Reducing costs external recruitment costs expense
•
and Mainly internal training is •
expenditure implemented Contractors hired in the Tight bonus criteria
place of professional /
Training linked to job-specific technical staff Executive pay
skills increases done away
Retention of critical talent with
Senior managers
subject to
compensation cutbacks
Differentiation Focus on developing Focus on external Employee performance
Differentiating employees who are creative recruitment and competencies are
from and innovative key determinant of pay
competitors Invests in most valid and
through unique Extensive training provider to reliable recruitment and Competitive salaries for
brand or image critical/high value employees selection method for filling employees
of critical/high value
positions
3.4 The integration of Strategic Human Resource Management and the Strategic Management Process
Figure 3.2 provides an overview of the Strategic Management process and shows how Strategic Human Resource
Management should be integrated within this process.
The Strategic Management Process has three distinct but interdependent phases:
• Strategy Formulation
• Strategy Implementation
• Strategy Evaluation (Noe et al, 2016: 75)

4Figure 3.2: The Strategic Human Resource Management Process (adapted from Noe et al, 2016: 76)
3.4.1 Strategy Formulation

Strategy formulation is the first phase in Strategic Management and involves “the process of deciding on a strategic
direction by defining a company’s mission and goals, its external opportunities and threats, and its internal
strengths and weaknesses” (Noe et al, 2016: 75). An organisation’s strategic choice determines how the
organisation will compete to achieve its mission and goals. Strategic choices include defender strategies, growth
strategies, cost-cutting strategies or differentiation strategies.
Strategy is usually formulated by an organisation’s executive team. The Human Resource department generally,
and the HR director specifically, must assist the organisation at all stages of the Strategy Formulation process.
Noe et al (2016: 83) points out that “it is of utmost importance that all people related business issues be considered
during strategy formulation”:
• External Analysis: When identifying opportunities and threats within the external environment, it would
be important for Human Resources Management to inform the organisation of the forecasted availability
of specific skills within the labour market. If critical skills are forecasted to be scarce, then this would be a
threat
• Internal Analysis: When determining the existing strengths and weaknesses within the company itself,
HRM should consider the quality of the organisation’s human resources, and whether there are sufficient
and relevant skills to allow the organisation to compete (Noe et al, 2016: 80). If an organisation does not
adequately identify the strengths and weaknesses of its existing workforce this could lead to choosing
strategies that it is not capable of pursuing

• Strategic Choice: In determining the organisation’s strategy, it is also important for a supporting Human
Resource strategy to be put in place. The Human Resource strategy should ensure that the organisation
has the human capital necessary for the effective implementation of the organisation’s strategy
3.4.2 Strategy Implementation

Strategy implementation involves “the process of devising structures and allocating resources to enact the strategy
a company has chosen” (Noe et al, 2016:75). During this phase, the organisation follows its chosen strategy. In
recent years, organisations have recognised that the success of HRM depends to a large extent on the degree to
which the HRM function is involved.
In implementing the strategy, HRM needs to ensure that it addresses the strategic needs of the business through:
• Tasks and activities which support the organisational strategy are designed and grouped into jobs which
are effective and efficient
• Employees in the organisation have the necessary skills, knowledge and motivation to effectively play
their part in implementing the organisational strategy (Noe et al, 2016: 82). Having the necessary skills
as and when they are needed is dependent on targeted recruitment and selection, training and
development, and succession planning
• Employee performance is effectively managed and incentivised through a performance management
system which is linked to the overall organisational goals (Noe et al, 2016: 84)
3.4.3 Strategy Evaluation

Strategy evaluation is the final phase in the Strategic Management process. It involves the organisation in
constantly monitoring the implementation of the strategy and the extent that implementation is providing for the
achievement of the organisational goals. The monitoring enables companies to identify problematic areas, and to
adjust or revise the strategy and supporting HR practices appropriately (Noe et al, 2016: 96).
Case Study 1
Case Study of Strategic Human Resource Management in Wal- Mart
Stores. Chegg Study
Source: https://www.chegg.com/homework-help/questions-and-
answers/case-study-strategic-human-resource-management-wal-mart-stores-
introduction-sam-walton-est-q26864272
Introduction
Sam Walton established Wal-Mart Store in 1962 on three revolutionary
philosophies; respect for the Individual, service to our customers and strive for
excellence. Walmart, Inc. is not only the largest discounted retailer in the world,
it now also ranks as the largest corporation in the world.

The retail giant dwarfs its nearest competition, generating three times the
revenues of the world's number two retailer, France's Carrefour SA.
Domestically, Wal-Mart has more than 1.2 million workers, making it the
nation's largest nongovernmental employer. U.S. operations include 1,478
Wal-Mart discount stores (located in all 50 states. Its international operations
commenced in 1991 covering Canada and Puerto Rico; Wal-Mart
Supercenters in Argentina, Brazil, China, Germany, Mexico, Puerto Rico,
South Korea, and the United Kingdom
(http://www.referenceforbusiness.com/history2/20/Wal-Mart-Stores-
Inc.html#ixzz56lss8VII).
Walmart Company strives to maintain its competitive advantage through its

satellite-based distribution system, and by keeping store location costs to a
minimum by placing stores on low-cost land outside small to medium-sized
towns, no matter in the US or in its abroad affiliations.
Corporate strategy and HR strategy at Wal-Mart

Walmart purchased massive quantities of items from its suppliers to form scale
economy, and with the efficient stock control system, help in making its
operating costs lower than those of its competitors. It also imported many
goods from China, “the world factory” for its low cost.
Managers engage in three levels of strategic planning (Gary Dessler, 2005):

the corporate-level strategy; the business-level strategy and the function-level
strategy. The functional strategy should serve the overall company strategy so
the corporate strategy could be implemented more effectively and efficiently.
The basic premise that underlying SHRM is that organisations adopting a
particular strategy require HR practices that are different from those required
by organisations adopting alternative strategies (Jackson & Schuler, 1995).
Generally, there are two primary SHRM theoretical models the universalistic
best practices and the contingency perspective of “best fit”. The contingency
perspective of “best fit elucidates that the individual HR practices will be
selected based on the contingency of the specific context of a company. As
Wal-Mart has different corporate strategy with those retailers with
differentiation strategy, which actually cultivates the primary contingency factor
in the SHRM literature.

What’s more, we should be reminded that the individual HR practices will

interact with firm strategy to result in organisational performance, and this
interaction effects make the “universal best practices” may not apply so well in
a specific company.
The following part we’ll examine the “fitness” of HR practices in Walmart with
this theoretical model, which is obviously also the integration process of HR
practices with the contingency variables to some extent.
From the recruitment. For example, the New York Times (January 2004)
reported on an internal Walmart audit which found “extensive violations of child-
labour laws and state regulations requiring time for breaks and meals.” The
cheap price of children labours and minors make it earn more cost competitive
advantage over other companies. Walmart also faced a barrage of lawsuits
alleging that the company discriminates against workers with disabilities, for
the recruitment of these people means providing more facilities for them and
the loss of efficiency to some extent.
From training perspective, through training on behavioural requirement for

success and encouragement, Walmart tried to adjust the employee behaviours
and competencies to what the company’s strategy requires, that is to low down
cost more. This logic is also embodied in its “lock-in” of its night-time shift in
various stores. Through this enforced policy, Walmart tried to prevent
“shrinkage” behaviour of its employees, to eliminate unauthorised cigarette
breaks or quick trips home.
From the performance management perspective, Walmart made very high

demanding standards and job designs. The New York Times reported Walmart
had extensive violations of state regulations requiring time for breaks and
meals. There are so many instances of minors working too late, during school
hours, or for too many hours in a day, for the performance appraising just force
them to do so. In the Career management, Walmart also goes great lengths to
reduce cost, there are many cases that women sued Walmart for its
discriminated policy against women by systematically denying them
promotions and paying them less than men did.

Women are pushed into “female” departments and are demoted if they
complain about unequal treatment just for more cost reduction against its
competitors.
From the compensation management perspective, Walmart has also showed

very aggressive HR policies and activities. Walmart imported $15 billion worth
of goods from china, for not only the strategic consideration of supplier chain
economy, but also Walmart has some factories in china, whose products are
branded with Walmart name. With this method, Walmart pays much less to
Chinese labours in this “world-factory” and earn some advantages, so we could
just see how the Walmart corporate strategy is just intensely integrated with its
HR policy. In 2002, operating costs for Walmart were just 16.6 percent of total
sales, compared to a 20.7 average for the retail industry as a whole, which
supported greatly the overall strategy. Walmart workers in California earn on
average 31 percent less than workers employed in other large retail business.
Actually, with other operating and inventory costs set by higher-level
management, store managers must turn to wages to increase profits, and
Walmart expects the labour costs to be cut by two-tenths of a percentage point
each year.
From the employee benefit and safety perspective, workers eligible for benefits
such as health insurance must pay over the odds for them. In 1999, employees
paid 36 percent of the costs. In 2001, the employee burden rose to 42 percent.
While in the US, large-firm employees pay on average 16 percent of the
premium for health insurance. Unionised supermarket workers typically pay
nothing. Walmart was frequently accused of not providing employees with
affordable access to health care, but the top managers and HR managers know
their focus was just to try their most to implement Walmart’s corporate strategy.
Finally, from the labour relations perspective, Sam Walton sought to bring great
value through aggressive discounting to customers. Because unionised
supermarket workers typically pay nothing, Walmart has strong anti-union
policy. Allegations of firing workers sympathetic to labour organisations have
been made, all new employees are shown a propaganda video tape, which
said joining a union, would have bad implication for them, and the employees
should never sign a union card.

In the UK it was reported in the Guardian that Walmart is facing the prospect
of a bruising legal battle with the GMB trade union in a row over collective
bargaining rights, for the union would not accepting Walmart withdrew a 10%
pay offer to more than 700 workers after they rejected a new package of terms
and conditions, which included giving up rights to collective pay bargaining.
Here there may be some doubt why Walmart has recently allowed unionisation
in their stores in China, where unionisation is mandatory. But actually this
mandatory rule is made a long time before Walmart walk into china, so why
Walmart give up its persistence in not having some unions, and its former
reason to China government is that it did not have any unions in its global
working. So how do we see Walmart’s compromise if that constitutes a
“compromise”?
It has been argued that doing business in China is particularly difficult because
of the higher relative importance of personal relationships (guanxi), as opposed
to the specification and enforcement of contracts in the West (Davies et al,
1995). Walmart China has tried every effort to develop good relationships with
China government and other influence groups. So Walmart made this
exception of have unionisations is just in accordance with its corporate strategy
and HR strategy. If it ignores the Chinese government’s firm rule, its cost would
just outweigh what it would save by organising no unions in its labour relations
management as Walmart provides little power for Chinese workers as the
unions are controlled by the state.
Conclusion:
Therefore, from all those above content we know the human resource
management is of strategic importance to Walmart. Both the top managers and
HR executives should pay more attention to the everyday employment
management. They should play more roles that are positive in training and
using their human resources, and maybe cultivating better organisation culture,
all of which may prove more cost saving, and correspondingly help realise Sam
Walton’s simple philosophy of “bringing more value to customers”.


1. Tabulate the differences between strategic management and strategic
2. List and explain the types of human resource strategies used in
organisations
3. List and explain the three stages in the strategic management process
4. Highlight the role of human resource management in the strategic
management process
3.3 Summary
This section focused on the concept and practice of Strategic Management, as well that of Strategic Human
Research Management. The alignment and integration of the Strategic Human Resource Management process
within the Strategic Management process was also studied.
The next section, Unit 4, focuses on the current issues and challenges facing human resource management.
Revision Questions
1. List and explain the phases of the strategic Management process
2. What does the Acronym SHRM stand for?
3. Define the following:
• Strategic management
• Differentiation strategy
• Growth Strategy
• Defender Strategy
4. List the components which makes up HR strategies and Organisational
strategies
5. Give 5 points under HR practices which should be kept in mind during
the Strategic Management process


1.
Strategic Management Strategic HRM
Strategy: guides an organisation, SHRM: planned HR deployments and activities to attain

realises goals, assists in attaining organisational goals.
competitive advantage.
Strategic Management: addresses Links people with the firm – determines how organisational goals
competitive challenges, manages the will be met in terms of HR strategies policies and practices.
pattern or plan to integrate organisational
goals, policies.
Ensures survival of the organisation.
Allows organisation to thrive.
2. Refer to section 3.4.2 and explain the following strategies:

• Growth
• Defender
• Differentiation
• Cost-cutting
3. Refer to section 3.4 and discuss the following:

• Strategy formulation
• Strategy implementation
• Strategy evaluation
4. Discuss the role of HR within the three phases of the strategic management process

Unit
4: Contemporary Challenges
Facing Human Resource
Management

4.1 Introduction • Introduce topic areas for the unit
4.2 Issues and challenges impacting on • Identify and explain the current sustainability, global and
Human Resource Management technological challenges impacting on Human Resource
may be categorised into three main Management
categories
4.3 Proactively Managing Human • Identify and discuss approaches to proactively manage the
Resource Issues and Challenges current challenges to Human Resource Management
4.4 Summary • Summarises content areas of the unit

Prescribed Textbook
Cengage Learning.
Recommended Reading

4.1 Introduction
The environment in which organisations operate is subject to ongoing and dynamic change. It is important that HR
practitioners are equipped to deal with these changes as they often bring about challenges for the management of
people within organisations.
4.2 Issues and challenges impacting on Human Resource Management may be categorised into three
main categories:
• The Sustainability Challenge
• The Global Challenge
• The Technology Challenge (Noe et al, 2016: 13) on boarding
The Current Issues and Challenges for Human Resource Management
Sustainability Technology Global Current HRM

Challenge Challenge Challenge Issues &
Challenges
5Figure 4.1: Current Issues and Challenges for Human Resource Management
Think Point 4.1

Explain how does sustainability affect Human Resource Management?
4.2.1. The Sustainability Challenge

Sustainability may be understood broadly as “a company’s ability to make a profit without sacrificing the resources
of its employees, the community or the environment…sustainability includes the ability to deal with economic and
social changes, practice environmental responsibility, engage in responsible and ethical business practices,
provide high-quality products and services, and put in place methods to determine if the company is meeting
stakeholders needs” (Noe et al, 2016: 14). Stakeholders include not only the organisation’s shareholders, but also
the community, customers, employees and other parties who have a stake in the company’s success (Noe et al,
2016:14). Sustainability challenges experienced by Human Resource Management are related to the economy,
employee productivity, downsizing, the changing workforce, employee engagement, government and legal issues,
as well as customer service and quality (Noe et al, 2016: 60).

6Figure 4.2: The Sustainability Challenge for HRM
Key sustainability challenges for Human Resource Management include:

• Employee Productivity is one of the biggest challenges for South African organisations (Wärnich et al,
2015: 23). The Global Competitive Index shows that South Africa has one of the lowest productivity rates
in the world. While employee salaries have increased, productivity has dropped. Human Resource
Management has a critical role to play in improving employee productivity, and many South African
organisations have made progress in this regard. The abandonment of outdated Scientific Management
techniques and the implementation of initiatives such as self-managed work teams, virtual teams and
telecommuting has assisted certain organisations in improving employee productivity (Wärnich et al,
2015: 23)
• The Changing Workforce: Since the advent of democracy in 1994, the workforces of South African
organisations have become more diverse. However, despite legislation being in place to facilitate the
transformation of workforces so that they ultimately mirror the representivity of the Economically Active
Population (EAP), this transformation has been slow
Various challenges have also emerged from the diverse nature of today’s workforce.
These include:
• The increased diversity of the workforce has led to a widening trust gap between employees and
employers/managers in many organisations. This in turn negatively impacts employee loyalty (Wärnich
et al, 2015: 25)

• Gender discrimination, where a ‘glass ceiling’ in certain organisations prevents women from advancing
within the organisation
• Single parents and dual-career parents frequently find it difficult to balance the demands of both work and
family life. This has led to the need for more family-friendly work environments
• The diverse workforce includes younger people (Generation Y), who have different work values and
expectations from their parents. Generation Y workers are less loyal and committed to their employer
than their parents’ generation. They get bored more easily and are on the look-out for new opportunities,
which means that they do not stay in a particular job for too long (Nel et al, 2014: 442)
• The workforce is comprising of more and more ‘non-traditional’ workers. These workers usually hold
multiple jobs, such as contracting to a number of organisations at one time (Dessler et al, 2011: 610)
• HIV / AIDS has a considerable impact on the workforce, and it is important that organisations put in place
initiatives to address it. HRM can assist here by developing a HIV/AIDS risk profile, putting in place a
policy on HIV/AIDS, conducting awareness sessions around HIV/AIDS and monitoring trends (Nel et al,
2014: 443) Human Resource practitioners need to work together with line managers to address the
challenges brought about by the changing workforce
• Downsizing: Due to poor economic growth, companies in South Africa and across the world continue to
engage in downsizing exercises. All levels of employees are being affected by downsizing initiatives, from
the unskilled to the highly skilled (Wärnich et al, 2015: 24). Downsizing leads to both employees and
managers losing their jobs through retrenchments as organisations attempt to cut costs in an effort to
survive
• Customer Service and Quality: In this information age, customers have become more knowledgeable,
and are critical judges of performance and quality. It is imperative for the sustainability of organisations
that they are able to deliver customer excellence. It is important for employees to recognise that quality
means survival, and that excellence should be the norm and not the exception. To achieve this in practice,
many organisations are implementing various quality programmes from Total Quality Management (TQM)
to the Six Sigma Process to Lean Thinking (Noe et al, 2016: 31 – 34)
• Government and Legal Challenges: In South Africa, since 1994, numerous pieces of legislation have
been promulgated which impact on the way in which organisations manage their human resources. These
pieces of legislation range from the Employment Equity Act no. 55 of 1998, to the Skills Development Act
no. 97 of 1998, to the Labour Relations Act no. 66 of 1995. It is important for South African organisations
to effectively adhere to the legislation not only for compliance reasons but also for the sustainability of the
organisation
• Employee Engagement Concerns: Employee engagement refers to the “degree to which employees
are fully involved in their work and the strength of their job and company commitment” (Noe et al, 2016:
23). It is important that employees are engaged in their work as this leads to higher performance,
productivity and profitability

Activity 4.1
HIV / AIDS has a considerable impact on the workforce, and it is important that
organisations put in place initiatives to address it
Based on the above statement - As a Human Resource Practioner describe
how you would go about addressing HIV/AIDS in the workplace.
Video Activity 4.1

Refer to the following video: Human Resource Management Challenges
(2018).
Available from : https://youtu.be/WESuW-bjTW0
4.2.2. The Global Challenge

Globalisation impacts on the ability of any organisation to compete, whether locally within their home country or
internationally. The global environment is very competitive as “businesses around the world are attempting to
increase their competitiveness and value by increasing their global presence, often through mergers and
acquisitions” (Noe et al, 2016:43).
Globalisation places increased pressure on South African organisations. New global economies have emerged
such as the expanding Asian markets, the reformed Russian market and the emerging South American markets.
As Wärnich et al, (2015: 26) points out “the new global economies have brought competitive challenges unequalled
in South African history”. South Africa has to compete against these emerging economies for the attention of
foreign investors who intend to set up international operations in emerging markets. When making such decisions
foreign investors compare South African workers against the workers from other emerging economies, particularly
in terms of worker skills and motivation, as well as the labour relations climate (Wärnich et al, 2015: 26).
4.2.3. The Technology Challenge

Technology has had an impact on many aspects of people’s lives. It has “reshaped the way we play (e.g. games
on the Internet), communication (e.g. cell phones), plan our lives (e.g. electronic calendars that include internet
access), and where we work (e.g. small, powerful personal computers allow us to work at home, while we travel,
and even while we lie on the beach)” (Noe et al, 2016:47).
• How and Where People Work: Many aspects of Human Resource Management are being changed
through advances in technology as well as reductions in the cost of technology (Noe et al, 2016: 47). For
example, the internet allows employees to send and receive information, as well as to research and gather
resources such as software, documents, photos/images and videos.

The manufacturing field is being transformed by robotics, computer-assisted design, radio frequency
identification and nanotechnology (Noe et al, 2016:48). Technology also provides employees with
opportunities for more flexible working arrangements and frees them from traditional work schedules.
Telecommuting, which is dependent on technology, has been shown to increase employee productivity
(Noe et al, 2016: 48)
• High Performance Work Systems: New technology in the workplace results in changing skill
requirements and work roles, and is likely to result in the redesigning of work processes and structures.
High performance work systems seek to maximise the fit between the company’s employees (or social
systems) and its technical system (Noe et al, 2016: 49). This is most evident in computer-integrated
manufacturing where robots and computers automate the manufacturing process. The introduction of new
technologies into the workplace has resulted in an increase in training (Wärnich et al, 2015: 28) so that
employees may develop the skills necessary to utilise the new technologies
4.3 Proactively Managing Human Resource Issues and Challenges

It is important for Human Resource practitioners to proactively manage the sustainability challenges, global
challenges and technology challenges, which impact on people management within organisations. Wärnich et al
(2015: 29) point out that “for HR professionals in South Africa as well as internationally, one thing is certain:
traditional personnel approaches that were conceived in cultures emphasising command and control are giving
way to new approaches characterised by greater employee commitment, cooperation and communication coupled
with changed expectations and the incorporation of new technology”.

Proactively Managing Human Resource Issues and Challenges
Focus on Big
Picture Issues
Implement
Manage
Strategic
Ethics Proactively HRM
Managing
HRM
Issues &
Challenges
Implement
Use
High
Evidence-
Performance
Based
Work
HRM
Systems
7Figure 4.3: Proactively Managing Human Resource Issues and Challenges
Going forward, HR managers need to adopt the following approaches in proactively managing the various Human
Resource issues and challenges of the twenty-first century:
• Focusing on Big Picture Issues: Human Resource practitioners must be aware of the environments in
which their organisation operates. They must keep abreast of global, political, environmental, social,
economic and technological developments and understand what these developments mean for the
strategic management of human resources (Dessler et al, 2011: 611)
• Implement Strategic Human Resource Management: In order for the Human Resource practitioner to
proactively manage Human Resource challenges such as the changing workforce and globalisation it is
important that a sound HR strategy is put in place which supports the organisation’s achievement of its
business strategy
• Implement High Performance Work Systems: In order to effectively compete both globally and locally
in a difficult economic environment, employers need to find ways of improving productivity and
performance. This can be achieved through putting in a set of HRM policies and practices that produce
superior employee performance (Dessler et al, 2011: 612). It is likely that high performance work systems
will include human-machine collaboration.

Boudreau (2015: 34) points out that one of the challenges in using human-machine collaboration will be
“to successfully migrate tasks from people to machines or robots and use ‘big data’ to find the optimal
human/machine balance”
• Use Evidence-Based Human Resource Management: Evidence-based Human Resource

Management involves “the deliberate use of the best-available evidence in making decisions about the
human resource management issues you are focusing on” (Dessler et al, 2011: 613). Measuring HR
performance through using facts, data and analytics is important for identifying areas of superior
performance, and areas of under-performance requiring intervention. Measurement enables HR
practitioners to objectively monitor the progress made in implementing the HR strategy and the
effectiveness thereof
• Manage Ethics: Ethics may be defined as “the discipline of dealing with what is good and bad, or right
and wrong, or with moral duty and obligation” (Wärnich et al, 2015: 34). It is imperative that HR managers
and HR practitioners keep in mind the ethical implications of their employee related decisions. Ethics are
particularly relevant to HR as six of the ten most serious workplace ethical issues fall within the ambit of
Human Resource Management: workplace safety, security of employee records, employee theft,
affirmative action, comparable work and employee privacy rights (Dessler et al, 2011: 614)
Practical Application 4.1

Your company has recently introduced an Information System to the
organisation. Some of the employees find it difficult to adapt to the new
Information System. Apply the techniques involved in proactively Managing
Human Resource Issues and Challenges to how the organisation would
encourage employees to accept the new system.
4.4 Summary
This section focused on the Current Issues and Challenges in Human Resource Management. Three key
categories of challenges were focused on: sustainability challenges, global challenges and technology challenges:
• Sustainability challenges refer those which may impact on a company’s ability to compete and make
profits (i.e. remain sustainable), and include employee productivity, the changing workforce (greater
diversity in terms of race, gender, generations, etc.), downsizing, customer service and quality,
government and legal challenges, and employee engagement concerns
• Global challenges result from the rise in emerging markets which present unprecedented competitive
challenges for South Africa

• Technology challenges include those technological developments which have brought about changes in
how and where people work as well as high performance work systems
It was recognised that Human Resource Management needs to be proactive in its management of these
challenges. Such proactive management includes HRM focusing on the big picture issues, adopting a strategic
approach to HRM, implementing high performance work systems, using evidence-based HRM to evaluate progress
made, and managing ethics.
Knowledge Check Questions 4.1

Identify whether the following statements are True or False
1. Global challenges result from the rise in emerging markets, which
present unprecedented competitive challenges for South Africa
2. Employee Productivity is one of the biggest challenges for South
African organisations
3. Due to poor economic growth, companies in South Africa and across
the world continue to engage in downsizing exercises
4. Employee engagement is an example of a sustainability challenge
5. Human Resource practitioners must be aware of the environments in
which their organisation operates
Case Study 4.1

Promoting Sustainability
By Jennifer Schramm, March 1, 2011
Sustainability is a major focus for most companies today, and HR professionals
are at the heart of their organizations' sustainability efforts.
An upcoming survey report by the Society for Human Resource Management

in partnership with San Francisco-based consulting companies Aurosoorya
and Business for Social Responsibility found that almost three-quarters of
surveyed companies engage in sustainable practices. These practices include
recycling, "eco-efficient" waste management and the use of alternative energy
sources.
What's driving this? Leaders of many organizations want to make positive

social contributions. They find they can gain a competitive advantage by
investing in sustainable and socially responsible practices.

With more consumers concerned about the impact, products and services have
on the environment; executives who are committed to sustainability add
strength to their business brands. Equally important for HR professionals: This
commitment strengthens their organizations' employer brands.
In fact, many of the top benefits of sustainability initiatives are closely related
to employees and how they do their jobs. In this 2010 survey of 728
companies of all sizes, the top four benefits reported by respondents were:
• Improved employee morale (cited by 55 percent)
• More-efficient business processes (43 percent)
• Stronger public image (43 percent)
• Increased employee loyalty (38 percent)
Employees are crucial to any sustainability initiative. That means HR

professionals must be involved in developing sustainability strategies and
working with employees to put them into practice.
But 28 percent of survey respondents reported that their organizations are not
pursuing sustainability. One obstacle is the perceived cost. Other hurdles
involve the difficulty of measuring return on investment (ROI) and a lack of
support from leaders.
If HR professionals want to promote sustainable and socially responsible

practices in an organization with resistant leaders, they must build a convincing
business case that demonstrates a clear ROI.
Fortunately, this is proving to be less difficult than anticipated. "Most green

projects deliver a very positive ROI," says Jack Phillips, chairman of the ROI
Institute, based in Birmingham, Ala. And some initiatives with positive impact—
including those involving HR and the way employees work—are already in
place at many organizations. "There are a few surprises in the major areas of
ROI," Phillips says. "Perhaps the most significant is the impact of
telecommuting programs, as they represent a huge payoff for the organization,
as well as for the environment."

When it comes to sustainability strategies, HR professionals can continue to

make progress by building on what they are doing, measuring results, and
getting business leaders and employees involved.
Questions
1. Based on your own understanding explain how sustainability can be
maintained in the workplace
2. Describe how HR professionals can get involved in developing
sustainable strategies for employees
Revision Questions 4
1. Discuss the challenge of employee productivity and its implications for
Human Resource Management
2. Discuss the challenge of employee engagement and its implications for
3. Explain the challenge of downsizing, delayering and decruiting and analyse
its impact on the work of the Human Resource professional
4. Explain the challenge of the changing workforce and analyse its impact on
5. Critically discuss the challenge of the global economy and its implications
for Human Resource Management
6. Explain the challenge of the impact of government on the field of Human
Resources
7. Discuss the challenge of achieving quality of working life and its implications
for Human Resource Management
Conclusion
On completion of this module, you are expected to be familiar with all learning outcomes stated as well as the
associated assessment standards. It is highly recommended that you complete the activities and revision questions
provided in preparation for your examination. The introduction to human resource management provided in this
module guide will set a good foundation for future studies in the field of human resources.
All the best with your studies.

Unit 4 Answers to Activities

Think Point 1
Sustainability Affects Morale
• Making an effort to mitigate the negative effects that your company has on the environment in turn makes
customers and employees feel like they are making a difference. Having sustainability as a core value
may also help to attract top talent
Activity 1
• Student is required to apply their knowledge
Case Study
• Student is required to apply their knowledge
Knowledge Check Questions

1. True
2. True
3. True
4. True
5. True

Answers to Revision questions
Revision questions Unit 1

1. Define the following terms:
1.1. Human resource activities
• Are activities carried out by the human resources department such as the training of a group of employees
or a recruitment campaign
1.2 Human resources policy
• These are formalised official guidelines with regard to the manner in which personnel matters should be
carried out
1.3 Human resources beliefs
• These may be described as strong convictions of the part of executive personnel with regard to people
as employees. These beliefs or convictions are one of the most important elements of organisational
culture
1.4. Human resource management function
• A function is a group of unique activities such as carrying out a job analysis, drawing up a job description,
and carrying out a salary or wage survey to create a remuneration structure for an organisation. The
human resources management function indicates all human resources activities within an organisation
1.5. Human resources department
• This is the physical place where employees charged with carrying out human resources management
activities are found
2. Tabulate the differences between line and staff authority

Line Authority Staff Authority
• Line authority gives managers “the right to issue • Staff authority gives managers “the right to
orders to other managers or employees. It advise other managers or employees. It
creates a superior-subordinate relationship creates an advisory relationship”
3. Identify and explain the professional competencies required by human resource practitioners to perform
effectively in organisations today
a. Strategic Positioner
b. Credible Activist
c. Capability Builder
d. Change Champion
e. Innovator and Integrator

f. Technology Proponent
• Strategic Positioner: HR professionals have the ability to understand the global business context, and the
business implications thereof. They understand the political, social, economic, environmental, technological
and demographic factors within their organisation’s environment and with these in mind “they help develop
customer-focused business strategies and translate the strategy into business plans and goals” (Ulrich et al,
2012: 17)
• Credible Activist: HR professionals have integrity, effective interpersonal skills and influence. The
combination of these characteristics enables them to contribute to “business results through consistent, clear
and insightful verbal and non-verbal communications they are activists for the business and advocates for HR
in driving business results” (Ulrich et al, 2012: 17)
• Capability Builder: HR professionals assist the organisation in developing capabilities, which will enable it to
gain competitive advantage. Such capabilities may include customer focus, speed or innovation (Ulrich et al,
2012: 17)
• Change Champion: HR professionals ensure that the organisation is equipped to embrace change, which is
required to remain competitive. They “develop effective change processes and structures to ensure that the
capacity for change on the inside is greater than the rate of change on the outside” (Ulrich et al, 2012: 17)
• Innovator & Integrator: HR professionals ensure that HR processes are designed to support the
implementation of the organisation’s strategy. “HR processes ensure that desired results are prioritised, that
necessary capabilities are powerfully conceptualised and operationalised and that appropriate HR practices,
processes, structures and procedures are aligned to create and sustain the identified capabilities and achieve
results” (Ulrich et al, 2012: 17)
• Technology Proponent: The HR professional understands the need to use technology effectively to manage
HR processes and to manage large amounts of information. HR professionals also understand how to
effectively use social networking technology to enhance the connectedness of employees within and outside
the organisation (Ulrich et al, 2012: 17)
4. List the types of activities which line managers are responsible for implementing under the guidance of the
human resource department in organisations today – Choose any 4 activities
• Placing the right person in the right job
• Orientating new employees within their departments

• Training employees on jobs that are new to them

• Providing performance feedback to employees and assisting them in improving their performance
• Gaining employees cooperation and developing productive workplace relationships
• Interpreting the company’s policies and procedures
• Controlling the cost of labour
• Developing employee’s abilities
5. Describe the difference between a business partner and a strategic partner

• The business partner role of HR is one that has emerged in recent years. The HR department is required
to know the business, exercise influence and effectively manage talent so as to help implement business
plans
• HR’s role as a strategic partner is a very recent development. HR is considered to be an equal partner
in strategy formulation and implementation. HR is required to contribute to the business strategy,
particularly in terms of human capital considerations, business capabilities, readiness and “developing
HR practices as strategic differentiators” (Noe et al, 2016:6)

1. Describe the characteristics of the Scientific Management approach
Frederick Taylor is regarded to be the “father’ of Scientific Management. He used a scientific approach to gather
information about the motions, time and tools required for each task, which a job entailed. Based on this information
he set fair performance standards for each job (Grobler et al., 2011). Taylor also believed that efficiency can be
improved through employees performing routine tasks where they were not required to make any decisions, as
well as through job specialisation. He developed a differential piece rate wage incentive system, where employees
whose output was above the performance standard received financial incentives (Hellriegel, Jackson, Slocum,
Staude, Amos, Klopper, Louw & Oosthuizen, 2004).
Frank and Lillian Gilbreth also made significant contributions to Scientific Management. The Gilbreths used motion
pictures to study an employee’s movements and improve his / her efficiency. In one study, they identified 18
motions, which a bricklayer used to lay bricks. They then changed the brick laying process to reduce this to 5
motions, thereby improving the employee’s overall productivity by a significant 200% (Hellriegel, et al, 2004).
Henry Gantt is another proponent of Scientific Management. His focus was on control systems for production
scheduling. He developed the Gantt chart (which is still widely used in project management today) as a tool to
control production scheduling (Hellriegel et al., 2004). Like Taylor, Gantt also gave attention to establishing quota
systems with financial bonuses for employees who exceeded their quotas.

2. Highlight the advantages and disadvantages of the Scientific Management approach

Advantages:
A key advantage of the Scientific Management approach is that it provides a means to produce and / or deliver a
service faster and more cheaply (Hellriegel et al., 2004). There is also an emphasis on effective employee selection
and training processes. The Scientific management approach has contributed towards the development of work
study practices, results based pay and production controls (Mullins, 1999). Given the focus on routine work with
limited decision making on the part of the employee, Scientific Management practices have been found to be useful
in certain contexts, such as developing countries where there is much unskilled labour (Mullins, 1999).
Disadvantages:
The Scientific Management approach is not without its disadvantages. In particular, the employee is viewed as a
machine and the human element of the employee is ignored (Mullins, 1999). Furthermore, Scientific Management
assumes that employees are only motivated by money to fulfil their financial and physical needs and fails to
recognise the employee’s social needs as well as the significant impact of job satisfaction on motivation (Hellriegel
et al., 2004).
In this regard, Hellriegel et al. (2004: 52) argues that “dividing jobs into their simplest tasks and setting clear rules
for accomplishing those tasks will not always lead to a quality product, high morale and an effective organisation.
Contemporary employees often want to participate in decisions that affect their performance; many want to be
independent and hold jobs that give them self-fulfilment.”
3. Discuss the impact that the Scientific Management approach had on human resource management
Scientific Management had a significant impact on the work of human resource professionals (then known as
“personnel staff”). In addition to attending to recruitment and selection, training, and health and safety issues,
Scientific Management’s focus on efficiency and motivation through financial incentives resulted in personnel staff
performing the following:
• Time and motion studies
• Fatigue studies
• Job analysis
• Job specifications
• Wage incentive programmes (Grobler et al., 2011)
At this time, the personnel department (as it was then called), also implemented various employee welfare
programmes, addressing what the employing organisations felt to be the needs of the employees through company
housing, employee loans and canteens (amongst others). These welfare programmes reflected the paternalistic
attitude and practices of management (Grobler et al., 2011).

4. Describe the characteristics of the Human Relations approach

The Hawthorne Experiments
One of the experiments that was performed at Western Electric Company’s Hawthorne plant was similar to that
described in the above “Think Point”. The Hawthorne experiment found that when the lighting was improved,
employees’ productivity increased. The researchers were also very surprised to find that when the lighting was
reduced, the employees’ productivity also increased (Hellriegel et al., 2004). It was concluded that the employees’
productivity increased in both circumstances due to the special attention that the employees felt that they had been
receiving. Further, experiments were conducted at the plant, which showed that the social environment of the
employees greatly influenced productivity (Hellriegel et al., 2004).
Unionism
The 1920s saw the rise of unionism, which had a considerable impact on the emergence of the Human Relations
approach. The formation of labour unions enabled unskilled workers to have a degree of influence over
management’s decisions. In South Africa, unionism emerged from foreign workers who came to this country to
work on the gold and diamond mines (Hellriegel, et al, 2004). Strikes on the mines lead to the promulgation of the
Industrial Conciliation Act, which was passed in 1924. This piece of legislation gave workers the legal right to
bargain collectively with employers regarding disputes around wages and various working conditions.
5. Highlight the advantages and disadvantages of the Human Relations approach

Advantages:
A key advantage of the Human Relations approach was that it succeeded in improving the working environment
for many employees (Grobler et al., 2011). The approach addressed the shortcomings of Scientific Management
through providing a focus on the importance of group dynamics, leadership, communications and job design
(Mullins, 1999).
Disadvantages:
Grobler et al. (2011: 4) identifies that the Human Relations approach “achieved only minimal success in increasing
worker output and enhancing job satisfaction” and that the performance of the approach overall was “lackluster.”
The limited success of the Human Relations approach may be attributable to a variety of factors:
• The approach was founded on the oversimplified principle that “a happy worker is a hard worker.” This,
however, is not true for all employees
• The approach did not consider individual differences across employees (e.g. employees have different
needs, wants and values)
• The approach failed to give attention to the importance of job structures, controls on employee behaviour,
procedures, standards and work rules

• The approach did not recognise that a variety of factors, other than good human relations, were necessary
to sustain a high level of motivation (Grobler et al., 2011)
6. Discuss the impact that the Human Relations approach had on human resource management
The Human Relations approach ensured that management and personnel staff no longer viewed employees simply
as ‘factors of production’, and emphasised the need to give attention to the social side of people management
(Swanepoel et al., 2014).
Personnel management became a “reactive function which had to serve and support the other functions within the
context of pre-existing organisational structures and established goals and objective” (Swanepoel et al., 2014:7).
The Personnel department would respond to requests from other departments (e.g. Finance, Manufacturing) for
specialised advice and support on issues pertaining to recruitment, remuneration, training and personnel
administration.
7. Describe the characteristics of the Human Resource approach

While the focus of the Human Relations approach was on the ‘softer’ issues of a supportive and friendly
management style, which takes cognisance of the feelings and social needs of employees, the Human Resource
approach emphasised the ‘resource’ value of employees in terms of their personality, ability and potential
contributions to the organisations (Swanepoel et al., 2014).
Frederick Herzberg’s motivator-hygiene theory made a substantial contribution to the development of the Human
Resource approach. Herzberg identified two different factors, which impacted on motivation and satisfaction at
work: motivators / growth factors and hygiene / maintenance factors (Mullins, 1999):
• Hygiene / maintenance factors are primarily concerned with the work environment (e.g. good pay, good
interpersonal relationships between employees and immediate managers). If absent, they lead to job
dissatisfaction
• Motivators / maintenance factors are concerned with job content (e.g. interesting work, challenging
assignments, responsibility) If present, the lead to job satisfaction (Mullins, 1999)
• With the emergence of the Human Resource approach, what was previously known as “Personnel
Administration / Management” was renamed “Human Resource Management” (Swanepoel, 2014). The
principles which underlie the “Human Resource” approach include the following:
• Employees are seen to be assets and therefore need to be managed and developed to ensure enhanced
productivity and contribution to the organisation
• Both the financial and emotional needs of employees should be satisfied through the organisation’s
policies, procedures and practices
• The working environment should facilitate and promote the optimal development and application of the
employees’ skills

• HR policies, practices and programmes should focus on balancing the needs and objectives of both the
organisation and the employee (Grobler et al., 2004)
8. Highlight the advantages and disadvantages of the Human Resource approach

Advantages:
The key advantage of the Human Resource approach is its business orientation and the emphasis given to
integrating Human Resource Management with the general management function (Swanepoel et al., 2014). This
is particularly important given that in many instances it is an organisation’s human capital, which is the source of
its competitive advantage.
Disadvantages:
A key disadvantage regarding the Human Resource approach is the confusion, which exists around it. Many
management theorists as well as some Human Resource / Personnel professionals view the Human Resource
approach as simply a new term for Personnel management (Swanepoel, 2014). However, this is not so.
9. Discuss the impact that the Human Resource approach had on human resource management
Numerous organisations have not been very successful in integrating the Human Resource approach into their
Human Resource Management Practices.
At most, they have simply changed the name of the “Personnel” department to the “Human Resource” department.
However, Ulrich (1998:124) argues that the effective application of the Human Resource approach is necessary
for achieving “organisational excellence.”

1. List and explain the phases of the strategic Management process
• Strategy Formulation
• Strategy Implementation
• Strategy Evaluation
a. Strategy formulation is the first phase in Strategic Management and involves “the process of deciding on a
strategic direction by defining a company’s mission and goals, its external opportunities and threats, and its internal
strengths and weaknesses” (Noe et al, 2016: 75). An organisation’s strategic choice determines how the
organisation will compete to achieve its mission and goals. Strategic choices include defender strategies, growth
strategies, cost-cutting strategies or differentiation strategies.
Strategy is usually formulated by an organisation’s executive team. The Human Resource department generally,
and the HR director specifically, must assist the organisation at all stages of the Strategy Formulation process.

Noe et al (2016: 83) points out that “it is of utmost importance that all people related business issues be considered
during strategy formulation”:
• External Analysis: When identifying opportunities and threats within the external environment, it would be
important for Human Resources Management to inform the organisation of the forecasted availability of
specific skills within the labour market. If critical skills are forecasted to be scarce, then this would be a
threat
• Internal Analysis: When determining the existing strengths and weaknesses within the company itself,
HRM should consider the quality of the organisation’s human resources, and whether there are sufficient
and relevant skills to allow the organisation to compete (Noe et al, 2016: 80). If an organisation does not
adequately identify the strengths and weaknesses of its existing workforce this could lead to choosing
strategies that it is not capable of pursuing
• Strategic Choice: In determining the organisation’s strategy, it is also important for a supporting Human
Resource strategy to be put in place. The Human Resource strategy should ensure that the organisation
has the human capital necessary for the effective implementation of the organisation’s strategy
b. Strategy implementation involves “the process of devising structures and allocating resources to enact the
strategy a company has chosen” (Noe et al, 2016:75). During this phase, the organisation follows its chosen
strategy. In recent years, organisations have recognised that the success of HRM depends to a large extent on
the degree to which the HRM function is involved.
• In implementing the strategy, HRM needs to ensure that it addresses the strategic needs of the business
through:
• Tasks and activities which support the organisational strategy are designed and grouped into jobs which
are effective and efficient
• Employees in the organisation have the necessary skills, knowledge and motivation to effectively play
their part in implementing the organisational strategy (Noe et al, 2016: 82). Having the necessary skills
as and when they are needed is dependent on targeted recruitment and selection, training and
development, and succession planning
• Employee performance is effectively managed and incentivised through a performance management
system which is linked to the overall organisational goals (Noe et al, 2016: 84)
c. Strategy evaluation is the final phase in the Strategic Management process. It involves the organisation in
constantly monitoring the implementation of the strategy and the extent that implementation is providing for the
achievement of the organisational goals. The monitoring enables companies to identify problematic areas, and to
adjust or revise the strategy and supporting HR practices appropriately (Noe et al, 2016: 96).
2. What does the Acronym SHRM stand for?

• Strategic Human Resource Management
3. Define the following:

• Strategic management
Strategic management refers to “a process, an approach to addressing the competitive challenges an organisation
faces. It can be thought of as managing the pattern or plan that integrates an organisation’s major goals, policies,
and action sequences into a cohesive whole” (Noe et al, 2016: 74). Strategic management is critical to ensuring
that an organisation survives, and even thrives, within the environment in which it operates. Without strategic
management, an organisation would not have direction, and would find it difficult to compete within the business
environment.
• Differentiation strategy
Involves an organisation in distinguishing itself from other organisations
• Growth Strategy
Is aimed at expanding an organisation’s market share and revenue
• Defender Strategy
Which is aimed at protecting the organisation’s current market share
4. List the components which makes up HR strategies and Organisational strategies

HR strategies
• Training and Development
• Recruitment and Selection
• Compensation
Organisational Strategies
• Defender strategy
• Growth strategy
• Cost-Cutting Strategy
5. Give 5 points under HR practices which should be kept in mind during the Strategic Management process
Choose any 5 points
• Job Analysis
• Job design
• Recruitment
• Training
• Development
• Pay structure

• Benefits
• Incentives
• Performance Management
• Selections
• Labour Relations

1. Discuss the challenge of employee productivity and its implications for Human Resource Management.
Employee Productivity is one of the biggest challenges for South African organisations (Wärnich et al, 2015: 23).
The Global Competitive Index shows that South Africa has one of the lowest productivity rates in the world. While
employee salaries have increased, productivity has dropped. Human Resource Management has a critical role to
play in improving employee productivity, and many South African organisations have made progress in this regard.
The abandonment of outdated Scientific Management techniques and the implementation of initiatives such as
self-managed work teams, virtual teams and telecommuting has assisted certain organisations in improving
employee productivity (Wärnich et al, 2015: 23)
2. Discuss the challenge of employee engagement and its implications for Human Resource Management.
Employee engagement refers to the “degree to which employees are fully involved in their work and the strength
of their job and company commitment” (Noe et al, 2016: 23). It is important that employees are engaged in their
work as this leads to higher performance, productivity and profitability.
3. Explain the challenge of downsizing, delayering and decruiting and analyse its impact on the work of the
Human Resource professional.
Downsizing: Due to poor economic growth, companies in South Africa and across the world continue to engage
in downsizing exercises. All levels of employees are being affected by downsizing initiatives, from the unskilled to
the highly skilled (Wärnich et al, 2015: 24). Downsizing leads to both employees and managers losing their jobs
through retrenchments as organisations attempt to cut costs in an effort to survive
4. Explain the challenge of the changing workforce and analyse its impact on Human Resource Management.
Since the advent of democracy in 1994, the workforces of South African organisations have become more diverse.
However, despite legislation being in place to facilitate the transformation of workforces so that they ultimately
mirror the representivity of the Economically Active Population (EAP), this transformation has been slow

5. Critically discuss the challenge of the global economy and its implications for Human Resource Management.
Globalisation impacts on the ability of any organisation to compete, whether locally within their home country or
internationally. The global environment is very competitive as “businesses around the world are attempting to
increase their competitiveness and value by increasing their global presence, often through mergers and
acquisitions” (Noe et al, 2016:43).
Globalisation places increased pressure on South African organisations. New global economies have emerged
such as the expanding Asian markets, the reformed Russian market and the emerging South American markets.
As Wärnich et al, (2015: 26) points out “the new global economies have brought competitive challenges unequalled
in South African history”. South Africa has to compete against these emerging economies for the attention of
foreign investors who intend to set up international operations in emerging markets. When making such decisions
foreign investors compare South African workers against the workers from other emerging economies, particularly
in terms of worker skills and motivation, as well as the labour relations climate (Wärnich et al, 2015: 26).
6. Explain the challenge of the impact of government on the field of Human Resources.
In South Africa, since 1994, numerous pieces of legislation have been promulgated which impact on the way in
which organisations manage their human resources. These pieces of legislation range from the Employment Equity
Act no. 55 of 1998, to the Skills Development Act no. 97 of 1998, to the Labour Relations Act no. 66 of 1995. It is
important for South African organisations to effectively adhere to the legislation not only for compliance reasons
but also for the sustainability of the organisation
7. Discuss the challenge of achieving quality of working life and its implications for Human Resource
Management.
In this information age, customers have become more knowledgeable, and are critical judges of performance and
quality. It is imperative for the sustainability of organisations that they are able to deliver customer excellence. It
is important for employees to recognise that quality means survival, and that excellence should be the norm and
not the exception. To achieve this in practice, many organisations are implementing various quality programmes
from Total Quality Management (TQM) to the Six Sigma Process to Lean Thinking (Noe et al, 2016: 31 – 34)

References
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Kogan Page Limited
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2017. Pretoria: Department of Labour
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Harcourt College Publishers
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T. (2004) Management. Second South African Edition. Cape Town: Oxford University Press
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Bachelor of Commerce

in Human Resource Management

INTRODUCTION TO HUMAN RESOURCE

List of Content .......................................................................................................................................................... 2

Unit 1: Human Resource Management Fundamentals .......................................................................................... 10

Unit 2: The Evolution of Human Resource Management ....................................................................................... 30

Unit 3: Strategic Human Resource Management ................................................................................................... 46

Unit 4 : Contemporary Challenges Facing Human Resource Management ........................................................... 59

Answers to Revision questions .............................................................................................................................. 72

4 MANCOSA – Programme Name

Figure 4.2: The Sustainability Challenge for HRM ........................................................................................... 62

Table 3.1 HR strategies supporting different organisational strategies. ............................................................ 49

2 MANCOSA – Bachelor of Human Resources Management

We hope you enjoy the module.

MANCOSA – Bachelor of Human Resources Management 3

The module is a 15 credit module at NQF level 5.

Aims of the Module:

C. Exit Level Outcomes and Associated Assessment Criteria of the Programme

Exit Level Outcomes (ELOs) Associated Assessment Criteria (AACs)

4 MANCOSA – Bachelor of Human Resources Management

• Demonstrate an ability to develop and • Human resource management concepts, ideas

D. Learning Outcomes and Associated Assessment Criteria of the Module

LEARNING OUTCOMES OF THE MODULE ASSOCIATED ASSESSMENT CRITERIA OF THE MODULE

• Define the sphere of responsibility of • The spheres of responsibility in human resource

MANCOSA – Bachelor of Human Resources Management 5

HRM can effectively address these challenges to

E. Learning Outcomes of the Units

F. Notional Learning Hours

Lectures/Workshops (face to face, limited or technologically mediated) 10

Tutorials: individual groups of 30 or less 0

Practical workplace experience (experiential learning/work-based learning etc.) 0

Independent self-study of specially prepared materials (case studies, multi-media, etc.) 20

G. How to Use this Module

6 MANCOSA – Bachelor of Human Resources Management

I. Prescribed and Recommended Textbook/Readings

The prescribed and recommended textbooks/readings for this module are:

MANCOSA – Bachelor of Human Resources Management 7

Special Feature Icon Explanation

The Associated Assessment Criteria is the evaluation of the students’

PRACTICAL Practical Application or Examples will be discussed to enhance

APPLICATION understanding of this module.

8 MANCOSA – Bachelor of Human Resources Management

Case Studies are included in different sections in this Module Guide.

You may come across links to Videos Activities as well as instructions

VIDEO ACTIVITY on activities to attend to after watching the video.

MANCOSA – Bachelor of Human Resources Management 9

10 MANCOSA – Bachelor of Human Resources Management

Unit Learning Outcomes

CONTENT LIST LEARNING OUTCOMES OF THIS UNIT:

1.1. Introduction • Introduce topic areas for the unit

1.2. Definition of Human Resource • Define Human Resource Management (HRM)

1.9. Summary • Summarises content areas of the unit

MANCOSA – Bachelor of Human Resources Management 11

Prescribed and Recommended Textbooks/Readings

12 MANCOSA – Bachelor of Human Resources Management

1.2 Definition of Human Resource Management

MANCOSA – Bachelor of Human Resources Management 13

14 MANCOSA – Bachelor of Human Resources Management