For some time now, Board membership of a senior personnel/HR person has been identified as one of the major influences on whether the HRM department is involved in various aspects of organisational strategy. For example, it is argued that if a specialist from the HRM department is not present on the Board then any issue relevant to human resources will inevitably be of minor importance to the organisation and it will be subordinate to all the other strategies decided by the Board.

Question

What will be an ideal response?

Answer 1

Lecturer Notes
? The difference between Human Resource Management and Personnel Management
should be discussed. Human Resource Management deals with the management of the
work force, and contributes to the organisation’s success, whilst Personnel
Management deals with the payroll of employees and employment rules and
regulations.
? It could be argued that some firms consider employees as costs (i.e. Personnel
Management) whilst others consider employees as capital (Human Resource
Management).
? It could also be argued that Board membership by an HR specialist has been taken as
being a proxy for HRM strategic involvement, or integration, reflecting the fit
between business strategy and Human Resource Management.
? It could further be argued that if a specialist from the HRM department is not present
on the Board then the work force may be represented by the representative of the
accounting department who deals with costs.
It is argued that an economic crisis hits small businesses more severely than large firms. As a
result, small firms are trying to cut costs by reducing the budget of most HRM activities. It is
further argued that because small firms cannot compete with large firms in reducing prices,
they should concentrate more on the business strategies of innovation and quality
enhancement of goods than on cutting costs.
Lecturer Notes
? It could be argued that in pursuing an innovation strategy, organisations emphasise
HR practices that encourage cooperative, interdependent behaviour and foster
exchange of ideas and risk taking. These HR practices can be applied at no extra cost.
? It could also be argued that in the quality strategy, the emphasis will be on seeking to
enhance quality through ensuring highly reliable behaviour from individuals who
identify with the goals of the organisation. These HR practices can also be applied at
no extra cost.
? It could further be argued that for a cost leadership strategy, HR seeks to maximise
efficiency through managerial monitoring and close control of employee activities.
These HR practices can also be applied at no extra cost.
? In conclusion, cutting the budget of most HRM activities in periods of economic crisis
may be considered to be wrong.