Part A: Foundations
Introduction to human resource management
Key takeaways
- HRM is the function responsible for attracting, developing, motivating and retaining the people an organisation needs to achieve its objectives.
- HRM is people-centred, pervasive, continuous and increasingly strategic: every manager practises some part of it, not only HR specialists.
- Personnel management is administrative and reactive and treats employees as a cost to be controlled; HRM is strategic and proactive, treats employees as an asset to be developed and is shared with line managers.
- Line managers deliver most of what HR designs, so a policy they are untrained, overloaded or unconvinced to apply exists in the handbook and nowhere else.
- The Employment Act, 2007 and the Labour Relations Act, 2007 set the floor HRM must meet, and that floor applies to the relationship as it really is, not as the employer labels it.
Every organisation studied elsewhere in this course, however it is structured (CS Management Principles and Practice, on planning and organising) or governed (CS Introduction to Law and Governance), depends on people to carry out its work. HRM is the function responsible for managing that human resource well.
What HRM is and why it matters
Human resource management is the function responsible for attracting, developing, motivating and retaining the people an organisation needs to achieve its objectives. It matters because an organisation's performance is ultimately delivered by its people, no strategy, however well planned (CS Management Principles and Practice, on planning and organising), executes itself.
Scope of HRM
- Workforce planning and resourcing
- Performance management
- Reward management
- Training and development
- Employee administration and welfare
- Labour relations
- Managing separation from the organisation
Features of HRM
- People-centred: its core concern is the individuals who make up the workforce
- Pervasive: every manager, not only HR specialists, practises some part of it (see the role of line managers, below)
- Continuous: it operates throughout an employee's whole time with the organisation, not at isolated points
- Strategic: increasingly aligned to organisational objectives rather than purely administrative (see strategic human resources management, below)
Evolution of HRM
HRM has moved from an early, purely administrative personnel function (record-keeping, welfare, compliance) through a period emphasising employee relations and motivation, to today's strategic model, in which the HR function is expected to contribute directly to organisational strategy (see strategic human resources management, below) rather than only support it.
Roles and responsibilities of HR practitioners
- Advising management on people-related decisions and risk
- Designing and administering HR policies and processes
- Ensuring compliance with employment law (see employment law basics, below)
- Supporting managers and employees through the employment relationship
- Championing organisational culture and employee engagement (see the chapter on employee resourcing)
Structure and functions of the HR department
An HR department is typically organised around the scope set out above, resourcing, reward, training, employee relations, often as distinct sections or specialists in a larger organisation, and as generalist roles covering all of them in a smaller one, usually headed by an HR manager or director reporting into top management (CS Management Principles and Practice, on the levels of management).
Personnel management versus HRM
| Personnel management | Human resource management | |
|---|---|---|
| Orientation | Administrative, reactive | Strategic, proactive |
| View of employees | A cost to be controlled | An asset to be developed |
| Relationship to strategy | Largely separate from business strategy | Integrated with business strategy |
| Ownership | Seen as the personnel department's responsibility alone | Shared with line managers |
Strategic human resources management
The role of line managers
Day-to-day HRM is increasingly delivered by line managers, not the HR department alone, with the HR function providing policy, expertise and oversight. A line manager:
- recruits into their own team;
- appraises performance (see the chapter on performance management);
- coaches and develops staff;
- handles first-line disciplinary and grievance matters.
Line managers deliver most of what HR designs, which is why HR policy so often fails in practice while succeeding on paper. The HR function writes the appraisal scheme, but a line manager conducts the appraisal. HR designs the disciplinary procedure, but a line manager decides whether to invoke it. Where line managers are untrained, overloaded or unconvinced, the policy exists in the handbook and nowhere else, and the organisation carries the legal exposure of a procedure it did not follow.
Employment law basics
Kenyan employment law, principally the Employment Act, 2007 and the Labour Relations Act, 2007, sets the minimum standards HRM operates within:
- written contracts (see the chapter on HR administration);
- working hours and leave;
- termination procedure (see the chapter on separation);
- the right to organise and bargain collectively (see the chapter on labour relations).
HRM practice must meet these as a floor, whatever an organisation's own policy adds above it.
The floor applies to the relationship as it really is, not as the employer describes it. The Employment Act defines a contract of service as an agreement to serve for a period of time, whether oral or in writing and whether express or implied, so a worker with no written contract and no job title can still carry the Act's protections, and the label an employer puts on an engagement does not decide which ones apply.
Krystalline Salt Limited v Mwakele & 67 others [2017] KECA 717 (KLR) (Court of Appeal at Mombasa, 17 February 2017)
Sixty-eight workers packed salt at the company's Mombasa plant for one to five years, paid by the bale, with no written contracts. When production moved to a new plant, they were told their services were no longer required, and the company argued that as piece-rate workers they were owed nothing. The Court of Appeal held that they were piece workers, not casual employees, so the section 37 rule converting long-serving casuals into monthly employees did not apply to them, and the trial judge had been wrong to use it. But piece work is itself a contract of service under the Act: paid monthly in proportion to their output under section 18, they were entitled to 28 days' written notice under section 35(1)(c), and the burden fell on the employer to prove a valid reason and a fair procedure under section 45. It proved neither, so the terminations were unfair and compensation was awarded. For HRM the point is twofold: the Act protects workers an organisation may not think of as employees, and classifying an engagement correctly matters, because each category carries different statutory rights.
The case below is a genuine, reported Kenyan authority; it is not invented for illustration.
Exam tip
The personnel-versus-HRM comparison above is a recurring theme across the chapter, an exam question describing an organisation's people practices is often really asking you to identify which model it reflects.
Self-check
(a) An organisation treats its people function purely as record-keeping and administrative compliance, separate from business strategy. Identify whether this reflects personnel management or HRM, and state one feature that distinguishes the two. (3 marks)
(b) State three items within the scope of HRM. (3 marks)
(c) Explain the HR business partnering model. (2 marks)
(d) State two Kenyan statutes that set the minimum standards HRM must operate within. (2 marks)
Show worked answer
(a) Personnel management; a distinguishing feature is that personnel management views employees as a cost to be controlled and treats people management as largely separate from business strategy, while HRM views employees as an asset to be developed and integrates people management with business strategy (3 marks).
(b) Any three of: workforce planning and resourcing; performance management; reward management; training and development; employee administration and welfare; labour relations; managing separation from the organisation (3 marks).
(c) HR business partnering is a model in which HR specialists work embedded alongside a business unit's management, contributing directly to its decisions, rather than only providing central, transactional HR services from a separate department (2 marks).
(d) The Employment Act, 2007 and the Labour Relations Act, 2007 (2 marks).