The human relations theory of management began development in the early 1920's during the

industrial revolution. At that time, ...

The human relations theory of management began development in the early 1920's during the industrial
revolution. At that time, productivity was the focus of business. Professor Elton Mayo began his
experiments (the Hawthorne Studies), to prove the importance of people for productivity - not machines.

The human relations management theory is a researched belief that people desire to be part of a
supportive team that facilitates development and growth. Therefore, if employees receive special attention
and are encouraged to participate, they perceive their work has significance, and they are motivated to be
more productive, resulting in high quality work. The following human relations management theory
basics became evident during human relation studies:

1.Individual attention and recognition aligns with the human relations theory.

2.Many theorists supported the motivational theory.

3. Studies supported the importance of human relations in business.

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Understand the human relations theory of management
The results of Professor Elton Mayo's Hawthorne studies proved that the factor most influencing
productivity are relationships. The researchers realized productivity increased due to relationships and
being part of a supportive group where each employee's work had a significant effect on the team output.
As a side result, the researchers noticed that the increased attention the workers received by the
researchers increased motivation and productivity, which resulted in what is the Hawthorne Effect.

Origins Human Relations Theory

The immediate period after World War Two saw a different approach in organisational studies.
Until that time, there was only talk of Scientific Management, which mainly focused on productivity,
efficient division of labour and workers as an extension of machinery.

1950 saw a change to this discourse with the introduction of the Human Relations Theory. This
movement saw workers in a different light; they were now seen as thinking beings with needs, who liked
to receive attention. Companies realised that attention motivated employees and even allowed them to get
more out of themselves for the benefit of the organisation.

The Hawthorne Experiment

Elton Mayo is considered the founder of the Human Relations Theory.

Prior to this trend, Elton Mayo already started an experiment in the Hawthorne plants in 1924; the
Hawthorne experiment. There was a great deal of discontent among the 30,000 workers in the Hawthorne
plants in Chicago in the early twenties of the last century. This was somewhat peculiar, because this
phone parts plant already acted extremely progressively towards its workers (through pensions and
sickness benefits), something which was almost unthinkable in this period.
Elton Mayo and his assistants, including Fritz Roetlishberger, conducted research into changing working
conditions.
They experimented with light, duration of breaks and working hours. A group of women were exposed to
either more or less light. It turned out that, regardless of the amount and duration of lighting, this had a
positive effect on their performances. The same was true for rest periods; shorter or longer breaks both led
to an increase in labour productivity.

Personal Attention

The conclusion drawn from the Hawthorne research was that giving attention to employees resulted in
improved performances.
The group of workers who were involved in the search felt their voices heard and experienced a feeling of
greater personal freedom. The workers were pleased that their assistance was requested, which they
believed led to their higher job performances.
Moreover, during the study, senior officials regularly visited the workplace, making the workers feel like
they belonged to a certain elite group. This personal attention stimulated the group to work even harder
together and give their all for the organisation. Collaboration in an informal group is also one of the main
aspects of the Human Relations Theory.
Elton Mayo concluded that the needs of workers were often based on sentiment (belonging to a group and
thus having a sense of value) and that this could lead to conflicts with managers, who mainly focused on
cost reduction and efficiency.
And thus he came to the following final conclusions:

 Individual employees must be seen as members of a group;

 Salary and good working conditions are less important for employees and a sense of
belonging to a group;
 Informal groups in the workplace have a strong influence on the behaviour of employees in
said group;
 Managers must take social needs, such as belonging to an (informal) group, seriously.

Labour Motivation

In the era of the Human Relations Theory, the concept of ‘labour motivation’ is given a new meaning
compared to the Scientific Management era.
The fact that personal attention led to improved performances was a completely new perspective.
The term workers is gradually replaced with employee, which more explicitly implies that these people
are thinking people who can positively contribute to the organisation.

Characteristics

Starting in the 1950s, a definitive different approach to management emerges. Employee behaviour is
placed centrally and the Human Relations theory places strong emphasis on the fact that organisations
consist of groups of people. Human Relations supporters thus replace the mechanistic perspective on
management with a people-oriented perspective. Every person is unique and therefore unpredictable.
Their behaviour is complex and to fully understand them it is important to recognise their personal
motivations.
Soft side

The way employees think and act at work is not only influenced by rules, procedures and requirements
imposed by management.

Attention, respect, interest shown and social/ interpersonal relationships are just as important. These kind
of human interactions trigger an emotional sense in employees, which is often referred to as a person’s
soft side. This soft side consists of emotional or irrational logic and can strengthen rational logic, but at
the same time also weaken or eliminate it. Rational logic focuses on production and effectiveness, and
both can thus diametrically be opposed to each other, which in turn leads to internal conflicts and
dilemmas.

Complex humanity

The complexity of human behaviour increases even more if an employee indicates his desires and knows
when he will make certain decisions. From a behavioural perspective, employees can also decide what
behaviour they prefer and how this behaviour manifests itself. As a result, there is no single pattern that
can automatically be associated with a specific situation.

Every person is very much different in terms of character and behaviour. Everyone has different values,
standards and desires, which results in demonstrably different behaviour. This complex humanity is an
important factor in guiding employees. It is therefore the task of managers to identify the individual needs
of employees and act accordingly. This is the essence of the Human Relations Theory.

It’s Your Turn

What do you think? Is the Human Relations Theory still applicable in today’s modern business world?
Do you recognize the practical explanation or do you have more additions? What are your success factors
for good employee attention and boosting related performance?
Share your experience and knowledge in the comments box below.
What is Strategic Approach to HRM

The strategic approach to human resource management applies the concept of strategy to managing a
firm’s human resources. This approach has six key elements as shown below:

 Explicitly recognizes the impact of the outside environment.

 Explicitly recognizes the impact of competition and the dynamics of the labor market.
 Has a long range focus (three to five years).
 Focuses on the issue of choice and decision making
 Considers all personnel, not just hourly or operational employees.
 Is integrated with overall corporate strategy and functional strategies.

The Dynamics of Labor Market

Employees compete for employees just as they do for customers. The forces of competition in attracting ,
rewarding, and using employees has a major effect on corporate human resource strategy. Forces play out
in local, regional, and national labour markets. Labour market dynamics of wage rates, unemployment
rates, working conditions, benefit levels, minimum wage legislation, and competitor reputation all have
an impact on and are affected by strategic human resource decisions.

Long Range Focus

A strategic focus tends to set the long range direction of a company’s human resource style and basic
approach. Strategy can be changed but it is not always easy. It depends on the inertia, flexibility, and
management philosophy of the firm. The intent is however to develop a consistent strategy to guide the
firm into its future. Sometimes the word vision is used to capture this idea.

Choice and Decision-Making Focus

Strategy implies choosing among alternatives, and making major decisions about human resources that
commit the organization’s resources toward a particular direction. For example, when Ford established its
management labour worker participation program in the mid-1980s, it did so because of a major decision
to increase employee involvement. Ford’s strategy of employee involvement, based on its “Quality is Job
1” campaign, was adopted because of a perceived need to resolve issues or prevent new ones from
forming, specifically to improve product quality.

Integration with Corporate Strategy

The particular human resource strategy adopted by a firm should be integrated with the firm’s corporate
strategy. In other words, corporate strategy should drive human resource strategy. Tom Kelley, former
chairman of Society of Human Resource Management, said “human resource managers are involved in
the strategic planning of global issues, rather than the day-to-day personnel transactions of the previous
personnel administrator and along with that strategic planning process. It is imperative the Human
Resource Professional establish goals and objectives that support the corporate goals.”

If corporate strategy is to grow and dominate a market, such as Apple Computer’s strategy in the early
1980s or Intel’s in the 1990s, then human resource strategy should focus on the rapid acquisition and
placement of employees. If retrenchment is the strategy, then low or no hiring plus layoffs and
termination of employees is the strategy.

Excellent coordination and combination of functions often result in a very special phenomenon known as
synergy, the extra benefit or value realized when resources have been combined and coordinated
effectively. This concept, known as economies of scope makes the combined whole of the company more
valuable than the sum of its parts.

Strategy Formulation, Decision Making, and Problem Solving

The strategy formulation process is not a neat and clean process. It advances in fits and starts and is much
subject to much revision and ad hoc interpretation. Strategic formulation is a dynamic process. It is
evolutionary in nature and is subject to change as outside environmental conditions, competition, or
internal conditions change. This flexibility in strategy formulation and implementation is essential to the
process. Since strategy formulation deals with the future, and since no one can predict the future with
certainty, the process must be kept flexible. The firm must be able to respond to changes as they occur, in
spite of the plans.

The ability to redirect strategy formulation is sometimes called logical incrementalism. This concept
refers to the additional measured change or reaction to a particular event. Actions appear to be taken in a
step by step fashion without the appearance of an overall plan.

A particular environmental pressure or a competitive threat could cause a firm to take a calculated course
of action that was not originally planned as part of the strategy. A series of these actions might make it
appear that the strategy is simply one of reaction rather than pro-action, that is, the company is reacting to
the latest threat.

Another way to view this phenomenon is to make a distinction between intended strategy and realized
strategy. The intended strategy is one which is formulated during the planning period. The realized
strategy is that which the organization actually follows.

Political Influences in Human Resource Management

In keeping the dominant coalition, the members in an organization influence the human resource
information system. They influence not only who will be hired and promoted but also the criteria used in
hiring and job evaluation decisions. Not all behavior is political, but it becomes political when it attempts
to manage or control the meanings, norms, and behavior of employees in an organization.

Political influence, like any other behavior in the organizations, does not operate in a vacuum. People
answer for their actions. This accountability to others can have a substantial impact on their behavior,
including political influence behavior. Politics is not bad per se, it is a fact of life in most organizations.
Managers may hire employees based on political influence. Although, at the time, they may say that the
person hired ‘fit’ better in the organization, the definition of ‘fit’ may be a political one based on whom
the managers think they can influence or control. If they hire enough employees who fit their world, then
they can create a powerful political base in the organization, and the consequences of such behavior will
soon become apparent.

Role of the Human Resource Unit in Strategic Decisions

Human resource professionals are in the best position to advise and otherwise influence the decision
process. To become true business partners, human resource managers must focus their attention on issues
that are of concern to the company’s chief executive. Today companies have vice-presidents of human
resources both at the corporate and divisional level. This enhances their membership in the dominant
coalition. Yet because human resources is essentially staff oriented, the models of influence on decisions
tend to fall along the continuum of staff involvement in decision making
Levels of Staff Involvement in Decisions

The organization’s human resource unit can have anywhere from a minimal to a maximum role to play in
strategic decisions. At the far left of the continuum, the human resource unit simply provides raw data and
information to the dominant coalition. For example if a company were considering closing a plant, the
human resource would simply provide the decision maker with information on the number of people
affected, severance (the end of a relationship or employment) costs, early retirement costs, and so on, with
no analysis.

In the next position to the right, the human resource unit would analyze the data. Graphs and trends may
be developed. Interpretive paragraphs would be written and implications would be spelled out regarding
the plant closing.

In the middle position, the staff role of human resources is carried a step further. Here specific
recommendations as to what the company should do with respect to the human resource issues raised in
the closing would be developed but would be unranked. In other words, human resources would simply
lay out the options with the associated costs and benefits of each option, but the decision makers would
choose the option.
Models of HRM
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1. The hard and soft HRM models:

Storey distinguished between the ‘hard’ and ‘soft’ versions of HRM. He wrote that: ‘The hard one
emphasizes the quantitative, calculative and business-strategic aspects of managing human
resources in as “rational” a way as for any other economic factor. By contrast, the soft version traces
its roots to the human-relations school; it emphasizes communication, motivation and leadership.’
However, it was pointed out by Keenoy that ‘hard and soft HRM are complementary rather than
mutually exclusive practices’. Research in eight UK organizations by Truss indicated that the
distinction between hard and soft HRM was not as precise as some commentators have implied.
Their conclusions were as follows.

2. Contextual model of HRM:

The contextual model of HRM emphasizes the importance of environmental factors by including
variables such as the influence of social, institutional and political forces that have been
underestimated in other models. The latter, at best, consider the context as a contingency variable.
The contextual approach is broader, integrating the human resource management system in the
environment in which it is developed. According to Martin-Alcázar: ‘Context both conditions and is
conditioned by the HRM strategy.’
A broader set of stakeholders is involved in the formulation and implementation of human
resource strategies that is referred to by Schuler and Jackson as a ‘multiple stakeholder framework’.
These stakeholders may be external as well as internal and both influence and are influenced by
strategic decisions.
3. The matching model of HRM:
Fombrun proposed the ‘matching model’, which indicated that HR systems and the organization
structure should be managed in a way that is congruent with organizational strategy. This point was
made in their classic statement that: ‘The critical management task is to align the formal structure
and human resource systems so that they drive the strategic objectives of the organization’. Thus they
took the first steps towards the concept of strategic HRM.
4. European model of HRM:
Brewster described a European model of HRM as follows:
● environment – established legal framework;
● objectives – organizational objectives and social concern – people as a key resource;
● focus – cost/benefit ts analysis, also environment;
● relationship with employees – union and non-union;
● relationship with line managers – specialist/line liaison;
● role of HR specialist – specialist managers – ambiguity, tolerance, flexibility.
The main distinction between this model and what Brewster referred to as ‘the prescribed model’ was
that the latter involves deregulation (no legal framework), no trade unions and a focus on
organizational objectives but not on social concern.
As set out by Maybe the characteristics of the European model are:
● dialogue between social partners;
● emphasis on social responsibility;
● multicultural organizations;
● participation in decision-making;
● continuous learning.
5. The 5-p’s model of HRM:
Philosophy: Expressed in statements defining business values and culture. It expresses how to treat
and value people.
Policies: Expressed as shared values and guidelines. Policies establish guidelines for action on
people related business issues and HR programs.
Programs: Articulated as human resource strategy. These coordinate efforts to facilitate change to
address major people related business issues.
Practices: For leadership managerial and operational role practices motivate needed role behaviors.
Processes: For the formulation and implementation of other activities these define how activities are
carried out.
Human Resource Management Models

Four major models have been identified on human resource management and all these serve as many
purposes.
1. They provide an analytical framework for studying Human resource management (for example,
situational factors, stakeholders, strategic choice levels, competence)
2. They legitimize certain HRM practices; a key issue here being the distinctiveness of HRM practices:
“It is not the presence of selection or training but a distinctive approach to selection or training that
matters”.
3. They provide a characterization of human resource management that establishes variables and
relationship to be researched.
4. They serve as a heuristic device-something to help us discover and understand the world for explaining
the nature and significance of key HR practices.
The four HRM models are: (i) The Fombrun, (ii) The Harvard, (iii) The Guest, and (iv) The
Warwick.

The Fombrun, Tichy and Devanna Model

Being the first model (dates back to 1984), this emphasizes just four functions and their interrelatedness.
The four functions are: selection, appraisal, development and rewards. These four constituent components
of human resource management and are expected to contribute to organizational effectiveness.
The Fombrun model is incomplete as it focuses on only four functions of HRM and ignores all
environmental and contingency factors that impact HR functions.

The Harvard Model

The Harvard model claims to be comprehensive in as much as it seeks to comprise six critical
components of HRM. The dimensions included in the model are: stakeholders, interests, situational
factors, HRM policy choices, HR outcomes, long-term consequences and a feedback loop through. The
outputs flow directly into the organization and the stakeholders

The Guest Model

Yet another human resource management model was developed by David Guest in 1997 and claims to be
much superior to other models. The details will justify the claim. This model claims that the HR manager
has specific strategies to begin with, which demand certain practices and when executed, will result in
outcomes. These outcomes include behavioral, performance related and financial rewards.
The model emphasizes the logical sequence of six components: HR strategy, HR practices, HR outcomes,
behavioral outcomes, performance results and financial consequences. Looking inversely, financial
results depend on employee performance, which in turn is the result of action oriented employee
behaviors. Behavioral outcomes are the result of employee commitment, quality and flexibility, which, in
turn are impacted by HR practices. HR practices need to be in tune with HR strategies which are
invariably aligned with organizational strategies.
The claim of the Guest model that it is superior to others is partly justified in the sense that it clearly maps
out the field of HRM and delineates the inputs and outcomes. But the dynamics of people management
are so complex that no model (including the Guest model) can capture them comprehensively.

The Warwick Model

This model was developed by two researchers, Hendry and Pettigrew of University of Warwick (hence
the name Warwick model). Like other human resource management models, the Warwick proposition
centers around five elements

 Outer context (macro environmental forces)

 Inner context (firm specific or micro environmental forces)
 Business strategy content
 HRM context
 HRM content

The Warwick model takes cognisance of business strategy and HR practices (as in the Guest model), the
external and internal context (unlike the Guest model) in which these activities take place, and the process
by which such changes take place, including interactions between changes in both context and content.
The strength of the model is that it identifies and classifies important environmental influences on HRM.
It maps the connection between the external and environmental factors and explores how human resource
management adapts to changes in the context. Obviously, those organizations achieving an alignment
between the external and internal contexts will achieve performance and growth.
Human Resource Management Model

Introduction to HRM
The Human Resource Management model contains all Human Resource activities. When these activities
are discharged effectively, they will result in a competent and willing workforce who will help realize
organizational goals. There is another variable in the model – environment. It may be stated that the
Human Resource function does not operate in vacuum. It is influenced by several internal and external
forces like economic, technological, political, legal, organizational, and professional conditions.

Human Resource Management: is a management function that helps the managers to recruit, select,
train, and develop members for an organization.

Human Resource Planning: Human Resource Planning is understood as the process of forecasting an
organizations future demand for, and supply of, the right type of people in the right number.
Job Analysis: Job analysis is the process of studying and collecting information relating to the operations
and responsibilities of a specific job. The immediate products of this analysis are job descriptions and job
specification.

Recruitment: Recruitment is the process of finding and attracting capable applicants for employment.
The process begins when new recruits are sought and ends when their applications are submitted. The
result is a pool of applicants from which new employees are selected.

Selection: is the process of differentiating between applicants in order to identify (and hire) those with
greater likelihood of success in a job.

Placement: is understood as the allocation of people to jobs. It is the assignment or reassignment of an

employee to a new or different job.

Training and development: it is an attempt to improve current or future employee performance by

increasing an employee’s ability to perform through learning, usually by changing the employee’s attitude
or increasing his or her skills and knowledge. The need for training and development is determined by
employee’s performance deficiency, computed as follows: Training and development need = Standard
performance – Actual performance

Remuneration: is the compensation an employee receives in return for his or her contribution to the
organization.

Motivation: is a process that starts with a psychological or physiological deficiency or need that activates
behavior or a drive that is aimed at a goal or an incentive.

Participative management: Workers participation may broadly be taken to cover all terms of association
of workers and their representatives with the decision making process, ranging from exchange of
information, consultations, decisions and negotiations to more institutionalized forms such as the
presence of workers members on management or supervisory boards or even management by workers
themselves as practiced in Yugoslavia. (ILO)

Communication: may be understood as the process of exchanging information, and understanding

among people.

Safety and health: Safety means freedom from the occurrence or risk of injury or loss. In order to ensure
the continuing good health of their employees, the HRM focuses on the need for healthy workers and
health services.

Welfare: as defined by ILO at its Asian Regional Conference, defined labour welfare as a term which is
understood to include such services, facilities, and amenities as may be established in or in the vicinity of
undertakings to enable the person employed in them to perform their work in healthy, congenial
surroundings and to provide them with amenities conducive to good health and high morale.

Promotions: means an improvement in pay, prestige, position and responsibilities of an employee within
his or her organization.

Transfer: Transfer involves a change in the job (accompanied by a change in the place of the job) of an
employee without a change in the responsibilities or remuneration. Separations: Lay-offs, resignations
and dismissals separate employees from the employers.
Industrial relations: Industrial relations is concerned with the systems, rules and procedures used by
unions and employers to determine the reward for effort and other conditions of employment, to protect
the interests of the employed and their employers, and to regulate the ways in which employers treat their
employees.

Trade Unions: Trade unions are are voluntary organizations of workers or employers formed to promote
and protect their interests through collective action.

Disputes and their settlement: Industrial disputes mean any dispute or difference between employers
and employers, or between employers and workmen, or between workmen and workmen, which is
connected with the employment or non-employment or terms of employment or with the conditions of
labour of any person.