Human resource management is an integral aspect of any organization today. The concept of HR management roots back to the 1890s when industrial welfare work was emerging. It was stimulated by a complex of humanitarian, religious, and business factors that made organizations introduce such workplace amenities as medical care, housing, and libraries.1 In the following years, more changes in HR practices were implemented and the distinction between HR management and personnel management that was used earlier increased. Among the definitions of HR management, one of the comprehensive variants is suggested by Boxall and Purcell who state that “HRM includes anything and everything associated with the management of employment relationships in the firm. We do not associate HRM solely with a high-commitment model of labor-management or with any particular ideology or style of management.”2 Many researchers agree that it is important to differentiate between personnel management and HR management due to the different impact of both approaches on human resource outcomes. To evaluate human resources and their outcomes depending on the HR department’s appreciation, the Four C’s Model can be applied.
The Four C’s Model for Evaluating Human Resources
The Four C’s Model for evaluating human resources comprises such HR outcomes as Commitment, Competence, Congruence, and Cost-effectiveness.3 They are suggested by the Harvard researchers to assess the effectiveness of HR management processes within an organization. This analysis is concentrated on the first three components of this model without touching the issue of cost-effectiveness. Thus, evaluation of employee commitment is likely to reveal the level of dedication that employees demonstrate to their organization as a whole and work in particular.4 The assessment of competence discloses if workers are skilled and qualified enough for their positions and provide an overview of opportunities for competence improvement. The aspect of congruence is frequently treated as employment relationships and discloses interrelation between the goals of a company and its employees. Human resources outcomes in these aspects will be different depending on the approach, that of personnel management or HR management, adopted by HR departments.
Personnel Management vs Human Resource Management
After the concept of HR management was introduced, it became a popular issue for research. Early studies on this problem about the development of HR management attempted to define this approach by comparing it to a more traditional one, that of personnel management.5 HR management was generally treated as “a new era of humane people-oriented employment management” and defined as a “blunt instrument to bully workers”.6 Some of the related events were the decline of collective bargaining and the reduction of impact possessed by trade unions. Still, there was much ambiguity in applying the concept of Human Resource Management. Thus, it was sometimes considered to be just a more contemporary variant of traditional personnel management, involving a change in conceptualizing and organizing personnel roles, or a new approach intended to create and apply the potential of human resources to achieve an organization’s strategic objectives.7
The latter variant attracted the particular attention of both practicing managers and researchers due to its potential to improve companies’ performance. On the whole, despite certain criticism for being a relabeled personnel management, the new approach was broadly accepted. Comparing both concepts, it should be mentioned that personnel management is described as “having little focus on broader business links and being overly concentrated on the activities of personnel professionals, unions and a range of operational techniques”.8 Therefore, personnel management is treated as a low-level recordkeeping and ‘people maintenance’ function. In contrast to it, the HR management approach is stereotypically characterized as “being much more concerned with business strategy, taking the view that HR is the most important organizational resource”.9 Consequently, the issue of the HR management revolution has been much discussed. It resulted in a shift from administrative efficiency typical of personnel management to HR management being a fully-fledged strategic business partner.
Employee commitment is one of the ways to achieve organizational control. In this context, employee commitment that is integral to HR management can be opposed to a control-based approach typical of personnel management.10 In contrast, to control strategies, the high-performance or high-commitment paradigm was introduced and accepted as the best one for both employees and employers. Moreover, many HR practices that are grounded on this approach are applied by the companies that are considered to be the most desirable employers.11 Employee commitment is related to employee conduct, level of their performance, job satisfaction, responsibility, and some personal characteristics of an employee. According to Meyer and Allen, commitment includes such components as a desire, a need, and an obligation.12 They form the corresponding types of commitment that can bind an employee to an organization.
One of the aspects that have to be considered by companies on their way to high employee organizational commitment is leadership styles. Recent research provides evidence of the existing relationships between leadership styles and organizational commitment. Thus, leadership dimensions can have an impact on employee organizational commitment.13 While the majority of earlier studies suggest that transformational leadership is positively associated with organizational commitment in diverse organizational settings, the study focuses on the particular ways in which leadership styles can influence employee organizational commitment.
The HR department can influence employee commitment through a variety of practices. One of the issues they can improve is employee satisfaction, which is a frequent problem of small and medium-sized enterprises. Studies suggest that one of the ways to increase employee satisfaction and the related commitment is the use of formal HR practices.14 Nevertheless, these practices are likely to be more effective for large companies while small and medium-sized enterprises can achieve high employee satisfaction resulting in an increased commitment due to informal practices.
HR departments also can take commitment-oriented career development efforts to engage employees in career planning and development.15 In case of effective management of the career development process organized by the employer, an employee gets a signal that the employer cares about the employee’s career success. This process can include diverse variants of performance appraisal, which have the potential to link the employee’s performance, career interests, and developmental needs into a coherent career plan beneficial for both employee and employer.
Employee competence is an important factor in many respects. First of all, it should be considered at the stage of recruitment. Secondly, employee competence is related to performance evaluations provided by managers within a company. Moreover, the concept of competence is used in strategic human resource management. Recruitment is a process that follows such goals as to attract suitable candidates for vacant positions, apply a fair process, correlate recruitment activities with organizational goals and its general image, and conduct cost-effective and efficient recruitment interventions.16 Employee competence is particularly important in the context of international HR management, which becomes a frequent practice nowadays due to globalization processes and the rapid development of multinational corporations.17
Performance evaluation is a necessary component of the activity provided by the HR department. It is closely related to employee competence, which is necessary for completing the tasks and achieving the determined goals.18 Proper and timely performance evaluation follows two major goals. First of all, it allows identifying current performance and thus compares it to the company’s goals. Secondly, evaluation is an opportunity to reveal the existing gaps in performance that appear due to the lack of employee competence in some issues. After such gaps are revealed, companies can suggest training to enhance employee performance due to obtaining new skills and knowledge.19
Strategic human resource management (HRM) is a specific approach to managing human resources oriented on the support of long-term business relations and outcomes within the identified strategic framework.20 Strategic HRM applies common HR components such as hiring new employees, supporting discipline, and provision of regular payroll. It also implies a collaborative approach to employees, which enhances retention, increases the quality of work experience, and contributes to the mutual benefit for the employee as well as for the employer. Consideration of employee competence is frequently a decisive factor in hiring employees for company positions with far-looking perspectives.
The employment relationship, which is close to the concept of employee congruence as a component of Four C’s Model, is key to understanding the mechanism of managing employment. It joins the sources of power and legitimacy as well as the rights and obligations of both management and employees. Employment relationships are revealed in a diversity of aspects such as “the law, collective bargaining, performance and reward, employee engagement and involvement.”21 Employment relationships reflect the working environment created in a company. Another concept that appears in connection with employment relationships and HR management in industrial relations (IR). This term can be defined as a commitment by organizations aimed at fostering cooperation between managers and employees.22 A broader definition of IR involves achieving positive interaction between an organization and its major stakeholders such as employees, clients, unions, government agencies, and vendors.
Success and effectiveness of employment relationships depend on the approach used by the management of a company. Thus, in the case of personnel management, employees are viewed as a tool for achieving company goals. Consequently, employment relationships are less favorable for workers. This traditional approach involves indirect communication, which does not allow assessing the needs of employees. Moreover, management actions usually follow a certain procedure where workers cannot interfere. Also, it utilizes such job design as a division of labor, which is not always productive. As for the HR management approach to employee relationships, it treats a company’s manpower as an asset. Its evident benefit is that reward is paid based on performance evaluation rather than on job evaluation, which is typical of the personnel management approach. HR management is characterized by direct communication with employees, which makes these relationships more open and productive. Moreover, its priorities are to work in groups or teams and focus on business needs. One more core difference is labor-management when the personnel management approach utilizes collective bargaining contracts. At the same time, HR management uses individual contracts, which ensures a greater value of a single employee and increases individual responsibility for work outcomes.
A significant aspect of employment relationships is inequality. This issue arises in the context of change in employment practices and reshaping of rewards in organizations. The factors that contribute to inequality are an increase in short-term employment relationships, the introduction of performance pay, contingent work, and outsourcing. 23 Therefore, it is the task of HR management to provide fair reward distribution and motivate employees for better performance. One more issue integral to employment relationships is the nature of employment, which can significantly influence organizational commitment.24 Current studies attract attention to the concept of psychological contracts and their perception by employees as a factor that influences commitment.
Generally speaking, human resource management is a common concept that can seem easy to comprehend and apply in different settings. Nevertheless, it has many aspects that have to be considered by HR managers to achieve the best results. First of all, it is important to differentiate between the concepts of personnel management and human resource management, which are sometimes used as synonyms. Still, these are different HR approaches that result in diverse human resource outcomes. These outcomes can be measured and thus regulated.
The Four C’s Model for Evaluating Human Resources can be applied to assess such crucial outcomes of HR as employee commitment, employee competence, and employment relationships. In all of those outcomes, the choice of management approach is decisive. Thus, the modern HR management is likely to result in better performance compared to traditional personnel management, mainly due to its attitude to manpower as a resource that has to be valued, developed, and preserved rather than simply personnel that is used for performing certain tasks.
Aluvala, Ravi. Millennial Workforce – A Contemplation. Hyderabad: Zenon Academic Publishing, 2017.
Armstrong, Michael, and Stephen Taylor. Armstrong’s Handbook of Human Resource Management Practice. London: Cogan Page, 2014.
Beardwell, Julie and Amanda Thompson. Human Resource Management: A Contemporary Approach. Harlow: Pearson Education, 2017.
Bidwell, Matthew, Forrest Briscoe, Isabel Fernandez-Mateo, and Adina Sterling. “The Employment Relationship and Inequality: How and Why Changes In Employment Practices Are Reshaping Rewards In Organizations”. Academy of Management Annals 7, no. 1 (2013): 61-121. Web.
Bolden-Barrett, Valerie. “What Are the Functions of Industrial Relations?” Small Business. Accessed September 03, 2018. Web.
Bratton, John, and Jeff Gold. Human Resource Management: Theory and Practice. London: Palgrave, 2017.
Dessler, Gary. Human Resource Management. New York: Pearson Education, 2017.
Edwards, Tony and Chris Rees. International Human Resource Management. Globalization, National Systems and Multinational Companies. Harlow: Pearson Education, 2017.
Elnaga, Amir, and Amen Imran. “The Effect of Training on Employee Performance”. European Journal of Business and Management 5, no. 4 (2013), 137-147.
Foot, Margaret, Caroline Hook, and Andrew Jenkins. Introducing Human Resource Management. Harlow: Pearson Education, 2016.
Keskes, Imen. “Relationship between Leadership Styles And Dimensions Of Employee Organizational Commitment: A Critical Review And Discussion Of Future Directions”. Intangible Capital 10, no. 1 (2014), 26-51. Web.
Malik, Ashish. Strategic Human Resource Management and Employment Relations. Singapore: Springer, 2018.
McDermott, Aoife M., Margaret Heffernan, and Malcolm J. Beynon. “When the Nature of Employment Matters in the Employment Relationship: A Cluster Analysis of Psychological Contracts and Organizational Commitment in the Non-Profit Sector”. The International Journal of Human Resource Management 24, no. 7 (2013): 1490-1518. Web.
Saridakis, George, Rebeca Muñoz Torres, and Stewart Johnstone. “Do Human Resource Practices Enhance Organizational Commitment in SMEs With Low Employee Satisfaction?”. British Journal of Management 24, no. 3 (2012): 445-458. Web.
Wilkinson, Adrian, Tom Redman, and Tony Dundon. Contemporary Human Resource Management. Text and Cases. Harlow: Pearson Education, 2017.
- Adrian Wilkinson, Tom Redman, and Tony Dundon, Contemporary Human Resource Management. Text and Cases (Harlow: Pearson Education, 2017), 5.
- Ibid., 6.
- Julie Beardwell, and Amanda Thompson, Human Resource Management: A Contemporary Approach (Harlow: Pearson Education, 2017), 10.
- Ravi Aluvala, Millennial Workforce – A Contemplation (Hyderabad: Zenon Academic Publishing, 2017), 166.
- Adrian Wilkinson, Tom Redman, and Tony Dundon, Contemporary Human Resource Management, 5.
- Ibid., 5.
- Ibid., 6.
- Adrian Wilkinson, Tom Redman, and Tony Dundon, Contemporary Human Resource Management, 6.
- Ibid., 5.
- Julie Beardwell, and Amanda Thompson, Human Resource Management, 6.
- Michael Armstrong, and Stephen Taylor, Armstrong’s Handbook of Human Resource Management Practice (London: Cogan Page, 2014), 189.
- Imen Kecskes, “Relationship between Leadership Styles and Dimensions of Employee Organizational Commitment: A Critical Review and Discussion of Future Directions,” Intangible Capital 10, 1 (2014): 27. Web.
- Ibid., 27.
- George Saridakis, Rebeca Muñoz Torres, and Stewart Johnstone, “Do Human Resource Practices Enhance Organizational Commitment in SMEs with Low Employee Satisfaction?” British Journal of Management 24, 3 (2012): 448. 445-458. Web.
- Gary Dessler, Human Resource Management (New York: Pearson Education, 2017), 315.
- Margaret Foot, Caroline Hook, and Andrew Jenkins Introducing Human Resource Management (Harlow: Pearson Education, 2016), 151.
- Tony Edwards, and Chris Rees, International Human Resource Management. Globalization, National Systems, and Multinational Companies (Harlow: Pearson Education, 2017), 169.
- John Bratton, and Jeff Gold. Human Resource Management: Theory and Practice (London: Palgrave, 2017), 186.
- Amir Elnaga, and Imran Amen. “The Effect of Training on Employee Performance”. European Journal of Business and Management 5, 4 (2013), 138.
- Ashish Malik, Strategic Human Resource Management and Employment Relations (Singapore: Springer, 2018), 15.
- Julie Beardwell, and Amanda Thompson, Human Resource Management, 342.
- Valerie Bolden-Barrett, “What Are the Functions of Industrial Relations?” Small Business, Web.
- Matthew Bidwell et al., “The Employment Relationship and Inequality: How and Why Changes in Employment Practices Are Reshaping Rewards in Organizations.” Academy of Management Annals 7, 1 (2013): 67. Web.
- Aoife McDermott, Margaret Heffernan, and Malcolm J. Beynon, “When the Nature of Employment Matters in the Employment Relationship: A Cluster Analysis of Psychological Contracts and Organizational Commitment in the Non-Profit Sector.” The International Journal of Human Resource Management 24, 7 (2013): 1495. Web.