5.[Talent Management and HRM]: How Developed HRM? with Industrial Examples, And HRM Vs. Talent Management

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 Every organization, large or small, uses a variety of capital to make the business work. Capital includes cash, valuables, or goods used to generate income for a business.

For example, a retail store uses registers and inventory, while a consulting firm may have proprietary software or buildings. In any industry, all companies have one thing in common: they must have people to make their capital work for them. This will be our focus throughout the text: generation of revenue through the use of people’s skills and abilities.

Definition of People Management and Human Resource Management 

Human Resource Management (HRM) 

Human Resource Management (HRM) is the process of employing people, training them, compensating them, developing policies relating to them, and developing strategies to retain them. As a field, HRM has undergone many changes over the last twenty years, giving it an even more important role in today’s organizations. In the past, HRM meant processing payroll, sending birthday gifts to employees, arranging company outings, and making sure forms were filled out correctly.

It’s necessary to point out here, at the very beginning of this text, that every manager has some role relating to human resource management. Just because we do not have the title of HR manager doesn’t mean we won’t perform all or at least some of the HRM tasks. For example, most managers deal with compensation, motivation, and retention of employees.

People Management

People management stems from HR and reaches leaders and employees across an organization. Effective people management can improve morale and employee engagement, reduce turnover, and enhance communication throughout teams.

People management is the process of hiring, leading, and developing team members to support the organization's overall mission.

People managers handle all people-related tasks involving new talent, employee engagement, and career development. They are often responsible for the onboarding and training processes of new employees. 

After onboarding people managers then support and work alongside managers to provide feedback and membership to employees. This collaborative approach to people management helps employees reach their goals and work cohesively with the team.

Falling under the umbrella of Human Resource Management (HRM) people management encompasses a wide range of responsibilities.

Here's a list of the top priorities for most people managers,

1.Recruiting

2.Onboarding

3.Training & development

4.Performance management

5.Employee engagement

6.Compensation and benefits organization 

Hawthorn Effect

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The Hawthorne Effect is the supposed inclination of people who are the subjects of an experiment or study to change or improve the behavior being evaluated only because it is being studied and not because of changes in the experiment parameters or stimulus. It was first identified by organizational researchers in the 1920s.

The Hawthorne Effect refers to the fact that people will modify their behavior simply because they are being observed. The effect gets its name from one of the most famous industrial history experiments that took place at Western Electric’s factory in the Hawthorne suburb of Chicago in the late 1920s and early 1930s. However, subsequent analyses of the effect have revealed that the original results were likely overstated along with several flaws in the study's design and execution.

The Hawthorne experiments were originally designed by the National Research Council to study the effect of shop-floor lighting on worker productivity at a telephone parts factory in Hawthorne. However, the researchers were perplexed to find that productivity improved, not just when the lighting was improved, but also when the lighting was diminished. Productivity improved whenever changes were made in other variables such as working hours and rest breaks.

The researchers concluded that the workers’ productivity was not being affected by the changes in working conditions, but rather by the fact that someone was concerned enough about their working conditions to conduct an experiment on it.

Key points of Hawthorne effect 

1. The Hawthorne Effect is where an employee’s productivity increases in response to being actively monitored.

2. The Hawthorne Effect study concludes that the effect of someone monitoring the employee is the main contributory factor instead of other variables.

How can Apply Hawthorne Effect for Industry?

 Hawthorne Effect examples 

One example of the Hawthorne Effect can be seen in psychology. Often patients can hold back on their emotions whilst being watched or questioned. However, once asked to write down their feelings, patients often open up. In the medical profession of psychology, psychologists will ask a number of personal questions. Understandably, these answers and the patient’s behavior may change as a result of being in the spotlight. Asking about bereavement and such can be emotional, so people will tend to hide their feelings. Yet this behavior can change when patients are asked to write their thoughts down on a paper – whilst the therapist is absent.

Healthcare - In 2015, the infection prevention department at "Santa Clara Valley Medical Center" in San Jose, California, conducted thousands of observations on its medical staff. When the staff knew they were being observed, hand hygiene recommendations were adhered to more stringently. The staff knew the recommendations but chose to follow them only when they knew they were being watched. This meant that hygiene standards were not being adhered to during normal working conditions. In turn, this signals that workers tend to cut corners when they can if they know they can get away with it.

Sports - We all know of cases where we see the next upcoming start in a sport. They look like the next superstar in the minor leagues but fail to cut it in the mainstream. Having thousands of fans in the stadium, cheering and demanding perfection can prove too much for some.

Frederic Taylor's Scientific Management Theory 

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Scientific management theory is a method of improving efficiency in the workforce. As its name implies, this management theory uses scientific methods to assess work processes. The scientific method consists of three steps: observation, experimentation, and analysis.

What are Frederick Taylor’s four principles of Scientific Management?

Frederick Taylor’s four principles of Scientific Management are:

1. Develop a science for each element of work

2. Scientifically Select, Train, Teach, and Develop the worker

3. Cooperate with the Worker

4. Divide the Work and Responsibility

 In “the Principles of Scientific Management,” Taylor starts with the following statement: “The principal object of management should be to secure the maximum prosperity for the employer, coupled with the maximum prosperity for each [employee].”

In saying this, he meant that the organization and employees should work together, strive to get the most out of one another, and be compensated for their efforts as it’s in everyone’s best interests.

For workers in particular, taking this approach would mean that they could benefit from higher wages, shorter working hours, and better work and home conditions.

Taylor believed that the worker should be focused on labor, due to insufficient capacity and/or education, while managers should be focused on and held accountable for optimizing performance. Regarding their interaction, Taylor said that workers should be taught daily and “receive the most friendly help from those who are over [them], instead of being…driven or coerced [by bosses or left to their] own unaided devices.”

In fact, Taylor believed that training and development was “the most important object of both the workmen and the management” in order to produce maximum efficiency and that a “close, intimate, personal cooperation between the management and the [worker] is of the essence of modern scientific or task management.”

To succeed with Taylor’s management theory where other companies may have faltered, we recommend carefully implementing his scientific principles into your business’s workflow and making adjustments as needed.

How can Apply Frederic Taylor's Scientific Management Theory for Industry?

Frederic Taylor's Scientific Management Theory Industrial Examples

 1. Food service -  The food service field may lend itself to the assembly line criticism, but that systems actually beneficial for this industry. Employees with specialized skill sets like making dough, wrapping egg rolls or decorating cakes can excel while contributing to the business in a single vertical.

2. Customer service -  Call and live chat centers typically operate from the hierarchy Taylor put forth, with senior management overseeing many employees. Management remains responsible for analyzing numbers and identifying opportunities to improve productivity and efficiency.

3. Manufacturing -  Taylor’s ideas served as a foundation for Henry Ford’s manufacturing assembly line. Perhaps the best instance of using specialized skills in a repetitive method and monitoring the results, manufacturing organizations employing technicians to operate a single machine can focus on training, development and continuous efficiency improvement.

 

McKinsey 7S Model

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The McKinsey 7S Model refers to a tool that analyzes a company’s “organizational design.” The goal of the model is to depict how effectiveness can be achieved in an organization through the interactions of seven key elements – Structure, Strategy, Skill, System, Shared Values, Style, and Staff.The focus of the McKinsey 7s Model lies in the interconnections of the elements that are categorized by “Soft Ss” and “Hard Ss” – implying that a domino effect exists when changing one element in order to maintain an effective balance. Placing “Shared Values” as the “center” reflects the crucial nature of the impact of changes in founder values on all other elements.

How can Apply McKinsey 7S Model for Industry?

Apple McKinsey 7S model illustrates the ways in which seven elements of businesses can be aligned to increase effectiveness. According to this model, strategy, structure and systems represent hard elements, whereas shared values, skills, style and staff are soft elements.

When we start with a small business startup, which offers services online. The company’s main strategy is to grow its share in the market. The company is new, so its structure is simple and made of a very few managers and bottom level workers, who undertake specific tasks. There are a very few formal systems, mainly because the company doesn’t need many at this time.

 

 Ulrich's three - legged stool Model

 

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Another type of HR strategy involves the use of Ulrich's three-legged stool model, an HR model that involves HR business partnering, centers of expertise, and shared services. This model is named after Dave Ulrich, and its three-pronged approach should make the three-legged stool part of the term pretty clear.

This model for organizing the human resource function was developed by the influential US academic, David Ulrich. Ulrich suggested that in large organizations, the (previously integrated) HR function should be divided into three segments. Shared service activities should be concentrated in a call-center with supporting intranet to provide administrative and basic support functions to the remainder of the business. Business partners, in contrast, are individuals or small teams who work closely with the managers of business units on key initiatives and change management. Finally, centers of expertise exist as repositories of key technical knowledge on resourcing, reward, employment relations, etc. and can develop policy while providing support to business units and to shared services. At the apex of the three-legged model, according to Ulrich, should be a small, corporate HR team that is responsible for the function as a whole and provides strategic direction.

How can Apply Ulrich's three - legged stool Model for Industry?

1. HR Business Partner (HRBPs) - HRBPs function as ‘internal consultants’ to senior leaders and/or line managers. HRBPs are typically embedded within specific business units where they serve as HR generalists to managers and their staff, providing both strategic and non-strategic HR advice and support, depending on the specific needs of the business unit. HRBPs are often viewed as the interface or liaison between managers and the services, systems and expertise housed under the broader HR function. 

2. Centres of Excellence (CoE) - Centres of expertise are relatively small teams of experts with specialist HR knowledge who work together to develop and promote best practices in their area of expertise. These often include learning and development, compensation and benefits, employee relations, organisation development, change management, and recruitment. 

3. Shared Services / Shared Service Centers - Shared services is a separate, often relatively large business unit that handles certain types of similar administrative activities for other business units. For example, instead of having activities like payroll and the monitoring of leave carried out across multiple office sites, shared services consolidates and centralises the activity through a single processing point. Shared service centres take many forms. They could involve HR-specific transactions or be combined with other functional transactions (IT, finance, procurement, etc). They could be located onshore or offshore, set up and managed in-house or outsourced to a third-party provider, and serve business units regionally or globally. Often associated with shared services are self-service portals/intranets and, for more complex enquiries, help desks that staff can call. Some companies charge a fee for service back to the business unit, while other companies incorporate the cost of running the shared services operation into their general running costs.

 

 Resource Based View (RBV)

 

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RBV is an approach to achieving competitive advantage that emerged in 1980s and 1990s, after the major works published by Wernerfelt, B. (“The Resource-Based View of the Firm”), Prahalad and Hamel (“The Core Competence of The Corporation”), Barney, J. (“Firm resources and sustained competitive advantage”) and others. The supporters of this view argue that organizations should look inside the company to find the sources of competitive advantage instead of looking at competitive environment for it.

According to RBV proponents, it is much more feasible to exploit external opportunities using existing resources in a new way rather than trying to acquire new skills for each different opportunity. In RBV model, resources are given the major role in helping companies to achieve higher organizational performance. 

How can Apply Resource Based View (RBV) for Industry?

The competition between Apple Inc. and Samsung Electronics is a good example of RBV of strategy. The two companies operate in the same industry and face the same external market forces. However, the companies achieve different organizational performance due to the difference in resources.

Human Resource Management Vs Talent Management

Human resources management is the administrative arm, delivering on core HR needs and services to the organization. These responsibilities include not only the day-to-day operations of the HR department but often the processes and procedures that dictate the day-to-day of every employee within the organization.

Every employee is touched by human resources at some point. This includes the interview phase, onboarding, training and for any personnel issues that arise while they are on the job. Those who work in human resources have a vital role in the success of the organization.

This “systemic, planned effort” is a long-term strategy for building an organization’s employee talent by cultivating “a stable (but dynamic) workforce that thrives in your organization’s value system, while simultaneously filling gaps with new perspectives and skills.”

Many different strategies come together to reach this goal. Talent management first works to build a strong brand for the organization that will attract strong job candidates. This goes beyond working with (and within) the human resources department to working with executive leadership on overall strategic planning that aligns the recruitment, hiring and development of talent with the organization’s direction and goals.

In many organizations, this starts at the top with the chief people officer. The rise of this C-suite position has elevated the strategic importance of human resources and talent management, as organizations recognize the need to gain a competitive advantage by attracting top talent, retaining the best candidates for each position and enabling employees to develop their skills and talents for their own benefit and that of the company.

Conclusion: 

Human resource development includes training a person after he or she is first hired, providing opportunities to learn new skills, distributing resources that are beneficial for the employee's tasks, and any other developmental activities. Development of human resources is essential for any organisation that would like to be dynamic and growth-oriented. Unlike other resources, human resources have rather unlimited potential capabilities. The potential can be used only by creating a climate that can continuously identify, bring to surface, nurture and use the capabilities of people. Human Resource Development (HRD) system aims at creating such a climate. A number of HRD techniques have been developed in recent years to perform the above task based on certain principles.

In this article I explained about background of Human Resource Management, People Management, definition of Hawthorn effect with industrial examples, Definition of Frederick Taylor’s Scientific management theory and industrial examples, Definition of  McKinsey 7S Model with industrial examples, Definition of Ulrich's three - legged stool Model and industrial examples and Definition of Resourced Based View (RBV) with indistrial examples as well. Finally explained Human Resource Management Vs. Talent Management.   

References: 

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Frasch K.B, David Shadovitz, Jared Shelly. (2009) There's No Whining in HR. Human Resource Executive [Online]. Available at http://www.hreonline.com/HRE/story.jsp?storyId=227738167. Accessed on 24th September 2011.

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Patrick Ward. (no date) Fredrick Taylor's Principles of Scientific Management Theory. NanoGlobals [Online]. Available at https://nanoglobals.com/glossary/scientific-management-theory-of-frederick-taylor/. Accessed on 03rd October 2021.

Jason Gordon. (no date) Scientific Management Theory - Explained. The Business Professor [Online]. Available at https://thebusinessprofessor.com/en_US/management-leadership-organizational-behavior/what-is-scientific-management-theory. Accessed on 5th October 2022.

Priyanka Malik. (no date) The McKinsy 7-S Model Framework, Explained (2023). Whatfix [Online]. Available at https://whatfix.com/blog/mckinsey-7s-model/. Accessed on 17th February 2022.

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