PRESUPUESTO INVERSIÓN INICIAL

The previous sections have reviewed the literature on HRM strategies and practices in civil or public service. This public administration literature focuses on what happens within a civil service and how the civil service responds to changes in the external environment, especially changes to government’s expectations of the role of a civil service. While this is a valuable body of literature and identifies patterns of change over time, more recently, scholars have been grappling to understand why these different public administration HRM strategies arise. For example, the literature on Asian civil services indicates that economic development and cultural practices in relation to recruitment to the civil service exert an impact.

By the late 1980s, ‘HRM emerged as the alternate approach’ to personnel management (A. B. Cheung, 2005, p. 4). The term personnel management which was commonly used in the 1960s through the mid-1980s for managing people was changed to Human Resource Management (HRM) (Tyson, 2006). Wilson (2014b) and Beardwell (2014) argue that it was a change from the old style of personnel management to a new style of HRM. In the broadest sense, HRM is defined as an approach to the management of people to carry out their job (Beardwell, 2014). As

such, HRM is associated with recruitment and selection, training and development, promotion and reward, teamwork and performance management. HRM has become integral part of organisational effectiveness. However, in the UK, HRM came to prominence only from 1989 (Storey, 1995b). HRM has advantages over the traditional mode of managing people (Beardwell, 2014) as HRM is more strategic since its policies are designed to strengthen and support each other to achieve the business strategy of the organisation through vertical and horizontal integration. Well integrated HRM policies help employees to be motivated and committed to cooperate with the management to achieve the goals of the organisation (Beardwell, 2014).

HRM conveys the notion that people are not comparable to other economic factors such as physical plant and financial resource but considered as assets and not as costs (Legge, 2005). The important implication of this approach is thus developing people through capacity building, which is recognised as a long-term investment. For instance, the soft model of HRM not only integrates HRM policies and practices with the business objectives, employees are regarded as a valued assets and a main source of competitive advantage through their flexibility, commitment and adaptability (D. E. Guest, 1987; Legge, 2005). The soft model of HRM emphasises investment in employees to increase their added value (Legge, 1998). On the other hand, the hard model of HRM focuses on the integration of HRM policies and activities so that employees are just like any other resources to be exploited for profit (Legge, 1998, 2005). In essence, the hard model of HRM emphasises ways of managing human resources to minimise their cost (Legge, 2005).

The HRM policies and practices of organisations need to fit with its strategy and within the environment. For instance, if the top priority of the organisation is quality as a key success factor, then HRM policies and practices need to encourage the employees in the organisation to address the problems of quality. However, Beer et al (1984) argue that quite often there is a poor match between HR policies and organisational strategies. One of the reasons for the poor match is that managers develop business plans and investments without adequate consideration of the requirement for the human resources to support the business plan. On the other hand, HR planning and programs are not developed in close consultation with business planning which results in a poor fit between the business strategy and HRM policies.

Organisations as part of societies are also responsible to deal with the problems and challenges of fairness in regards to managing human resources. The strategies that have to be employed to achieve fairness are: clear articulation of management values and philosophy on issues of fairness; setting clear goals for hire and promotion, create clear policies and systems which encourage fairness, due process systems needs to be in place for resolving complaints related to hiring, promotion, performance evaluation decisions on dismissal. Beer et al (1985) argue that if there is more power given to employees or their representatives to adjudicate disputes, more perceptions of fairness will result.

2.7.1 Integration of Human Resource Management Policies

From the organisational point of view, the HRM system has to be integrated to attract and retain the right mix of employees. HRM policies need to fit the organisational strategy. The alignment of strategic HRM practices with each other ‘(internal consistency or alignment)’ and HRM strategy with that of the organisation’s strategy ‘(external consistency or the alignment)’ are important (Storey, 1995a, p. 23). Three dimensional HR strategies based on the work of the UK organisations indicate: (i) vertical alignment between HR strategy and organisational goals; (ii) horizontal alignment between individual HR policies and practices; and (iii) an implementation dimension to assess the impacts of HR strategy on the day to day experiences of employees and managers in the organisation (Beardwell, 2014; Jackson, Schuler, & Rivero, 1989). The first dimension-vertical alignment: Truss and Grattan (2003) and Beardwell (2014) argue that an HR strategy needs to be in place based on the organisational goals and strategies. In order to play a strategic role in the organisation, HR strategies need to reflect and support the business aims and objectives of the organisation. This calls for a strong alignment between the HR strategy and overall vision of the organisations or business strategies. Truss and Gratton (2003) and Beardwell (2014) term this alignment between the HR strategy and organisational strategy, vertical alignment. Vertical alignment ensures that the HR intervention is dynamic and not an inhibitor for sustained competitive advantage (Beardwell, 2014; Jackson, et al., 1989).

The second dimension is at operational level, which emphasises horizontal integration, in that the HR policies and practices have to be consistent and compatible with each another. The research by Truss and Gratton (1989) indicates

that organisations that achieve higher levels of vertical alignment do not necessarily achieve higher horizontal alignment and vice versa. The vertical alignment is concerned with the HR strategy that supports the strategic direction of the organisation, whereas the horizontal alignment is concerned with the internal consistency in the HR policies and practices of the organisation. The third dimension of the HR strategy is implementation, translating HR policies into action. The implementation of HR policies affects the performance and desired values and behaviours of the employees in the organisations.