PM AND THE ACHIEVEMENT OF ORGANISATIONAL EFFECTIVENESS

Date: 2015-10-07; view: 576.

PM mark 2: a distinctive approach to the management of people

The second meaning commonly accorded to the term ‘personnel management' denotes a particular way of carrying out the range of activities discussed above. Personnel specialists direct their efforts mainly at the organization's employees; finding and training them, arranging for them to be paid, explaining management's expectations, justifying management's actions, satisfying employees' work-related needs, dealing with their problems and seeking to modify management action that could produce an unwelcome employee response. The people who work in the organization are the starting point, and they are a resource that is relatively inflexible in comparison with other resources, like cash and materials.

What those objectives are will vary depending on the type of organization and its situation. For most businesses operating in the private sector the overriding long-term objective is the achievement and maintenance of competitive advantage, by which is meant a sustained period of commercial success vis-à-vis its principal competitors. For others, however, ensuring survival is a more pressing objective. For all sizeable organizations there is also a need to foster a positive long-term corporate reputation. Developing such a reputation can take many years to achieve, but without care it can be lost very quickly with very damaging results. The maintenance of a positive reputation in the media is also an important objective as this helps to maintain and grow the customer base. In this context corporate ethics and social responsibility are increasingly significant because they are becoming more prominent factors in determining the purchasing decisions of consumers

The HR function should play a significant role in helping to achieve each of these dimensions of organizational effectiveness. The contribution of the HR function to gaining competitive advantage involves achieving the fundamental aims of an organization in the field of people management more effectively and efficiently than competitor organizations. These aims – mobilizing a workforce, maximizing its performance, managing change effectively and striving to achieve excellence in administration.

The contribution of the HR function to maintaining competitive advantage involves recognizing the significance of the organization's people as an effective barrier preventing would-be rivals from expanding their markets into territory that the organization holds.

The term human capital is more and more used in this context to signify that the combined knowledge and experience of an organization's staff is a highly significant source of competitive advantage largely because it is difficult for competitors to replicate easily. Attracting, engaging, rewarding, developing and retaining people effectively is thus vital. Failing to do so enables accumulated human capital to leak away into the hands of competitors, reducing the effectiveness of commercial defenses and making it harder to maintain competitive advantage.

Finally, the PM function also plays a central role in building an organization's reputation as an ethically or socially responsible organization. This happens in two distinct ways.

The first involves fostering an understanding of and commitment to ethical conduct on the part of managers and staff. It is achieved by paying attention to these objectives in recruitment campaigns, in the criteria adopted for the selection of new employees and the promotion of staff, in the methods used to develop people and in performance management processes.

The second relates to the manner in which people are managed. A poor ethical reputation can be gained simply because an organization becomes known for treating its staff poorly. In recent years well-known fast food chains in the UK have suffered because of their use of zero hours contracts, while several large multinationals have had their reputations stained by stories in the media about the conditions under which their employees in developing countries are required to work.