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The human resources function.

If an 1860 Rip Van Winkle were to wake up today, he would hear managers using some strange words he couldn't understand: "human relations in industry," "human engineering," "personnel approach." He would soon learn that the words indicated an emphasis in management practice that was different than that he was familiar with when he rolled over and went to sleep a hundred years ago.

But he probably would be puzzled by the number of caustic and sarcastic criticisms of this emphasis, criticisms from labor leaders, managers, professors of administration, and a host of professional decriers of "carrying things too far." As one who was familiar with the fairly frequent disregard of human values by a large number of managers a hundred years ago, our Rip Van Winkle would be inclined, I suppose, to assume that any indication of increasing concern for people in the business and industrial world was a good thing, some advance at least toward a more civilized life. I certainly would make that assumption and am beginning to wonder if all the warnings against, and outright denunciations of, the human relations approach indicated by such titles as, The Elite and the Aborigines, Freud Go Home, Contented Cows' Management, Silk Gloved Power, Sophisticated Union Busting, etc., are not the result of a misunderstanding of what management which stresses human values is all about.

Almost from the very beginning, at least after there were labels like "human relations" and "the personnel approach" to take hold of, some folks have been having a field day as critics. I have the impression that it is becoming more popular nowadays to join the "they can't pull the wool over my eyes" school.

Some of the criticisms are understandable enough if one adopts the particular critic's major premises. Take the reactions of certain trade union leaders, for instance. What do they say? They say that in their experience management generally isn't interested in people but first of all concerned about production and profits. That's why unions are necessary to watch out for the interests of the people. Besides most managements would just as soon not have the unions around at best, and would like to bust the union at worst. Well, if you start off from that premise, and run across any managerial action which apparently does indicate a genuine interest by management in people beyond what they are forced to have because the union is around, there are only a couple of possible explanations. The union leaders say that either management has figured out a subtle way to make workers more willing to do what management wants them to do, or they are attempting to eliminate the union by indirect methods, by showing the workers they don't need a union. I don't see any reason to deny the possibility that such a sophisticated indirect approach to making unions less popular is used by some employers who accept unions as a penance for their own and other manager's sins, and accordingly would like to reduce the amount of irritating managerial practices that they believe led to unions in the first place and to their continued survival. If that is the real managerial objective, it helps to justify the Trade Union leaders' suspicions.

The managers who like to criticize the interest in "human relations" are in many cases folks who don't want to be considered "softies." They are not necessarily of the "hard-boiled--no fooling around--discipline is good for you--you've got the stripes, tell 'em' school, although some of them at times talk suspiciously like one would expect a fellow like that to talk. Their premises have something to do with "the necessity of sticking to essentials," "cutting out the frills," and "getting down to the brass tacks of running a business." The most conservative of these managerial critics are concerned about the fallacies of a "be good to the guy" approach. Their position is, "human relations is allright, BUT." On occasion one will run across the type of position revealed by the following comment, "I don't want to have anything to do with all this damned human relations nonsense. It's about time we learned that work is work. It's not management's job to play nurse maid. Their job is to tell folks they hire what to do and how to do it, and when you've paid a fellow for the work he's done for you, that's that."

Then there are those in the camps of both management and trade unions, as well as academic circles, who base their criticism on moral premises. They resent the fact that a study and understanding of people can become a more sophisticated and powerful instrument of manipulating and even exploiting people. That, of course, is an entirely possible outcome.

There must be something pretty much off the beam with a lot of human and personnel and industrial relations practices to arouse such criticism from both sides. The question I want to raise here is whether all this criticism really has any point if we could agree on a common-sense idea of what the human resources function in a business or industrial operation really is. It is just possible that the trouble lies in the distorted perception people have of this kind of managerial activity. In any case, the content of the managerial activity they are talking about doesn't jibe with the conception which I like to call the human resources function of management. I would like to think that the way of looking at this function I'm about to propose would reduce some of the heat in arguments about whether human relations "pay off," or is a "humanitarian frill," or is an indirect union busting campaign, or is just a sophisticated power grab by the managerial elite.

Human Relations Not a New Function

The first thing that we ought to be clear on is that there is nothing new about the managerial function of dealing with people. Dealing with people, figuring out what makes them tick, arranging conditions and rewards and punishments so that they tick better, maintaining and developing their capacities, has been a part--an important and not neglected part--of the managerial function from the first day that some men tried to direct the activities of other men. Like other sub-functions of management, such as engineering, production, sales, finance, etc., it has been carved out of the general managerial function, not put into it.

To be sure, personnel and industrial relations is one of the latest to be carved out from the general function of management and assigned to executives whose titles reflect those functions.

But the point I am making is that all specific managerial functions such as engineering, production, finance, sales, etc., are covered in the general function of management and, if not carved out and specifically allocated to particular people, are still the responsibility of the general manager. That's the first point in a common-sense approach to this problem. Human relations, industrial relations, personnel relations, are just new names for an aspect of the general managerial function as old as management.

To Manage is to Manage Basic Resources

Now, if that is the case, then the activities connected with such specific functions, including the human resources function, will be determined by the character of management's traditional and continuing job in connection with any and all of its functions.

The general types of activity in any function of management, whether it be production, sales, engineering, finance, or what you will, grows out of the fact that the general job of management is to use resources effectively for an organizational objective. Those resources are basically six in number: money, materials (i. e., plant, equipment, raw materials), people, ideas, market, and, in some cases, nature.

Every manager will recognize the nature of the managerial functions associated with conducting such activities in relation to some of these resources. For instance,
The function of are related primarily to
 the resource:
Production, plant and product
engineering and some aspects
of industrial engineering Materials
Financing, budgeting, etc. Money
Marketing, promotion, and some
aspects of public relations Market
Research, design, development
 engineering, etc. Ideas
Conservation Nature

The function which is related to the understanding, maintenance, development, effective employment, and integration of the potential in the resource "people" I shall call simply the human resources function. That name is used not just to be different or to avoid confusion with preconceptions of what other terms like "personnel administration," or "human relations" or "human engineering" or "industrial relations" mean, but purely and simple because it describes more accurately than any term I can think of the nature of this function in relation to other managerial functions.

Neglect of attention to, or lack of success with respect to the functions dealing with any one of these six resources leads, in the long run, to the failure of an organization to accomplish its objectives. For example, let us assume adequate knowledge, maintenance, development, utilization, and coordination of all the above resources related to money, materials, people, ideas, and nature, but not to those related to the market. Is there much doubt as to the consequences for the whole organization? Or let the weak function be that related to money (financing), or materials (production and engineering). One weak functional area weakens the whole. The chain is not stronger than its weakest link. It is just as dangerous for that weak link to be related to attention to the resource, people as to the resources of money, materials, or market.

The point of view expressed here is that "people" as an organizational resource is at least equally important with the others, and that ignorance, neglect, waste, or poor handling of this resource has the same consequences as ignorance, neglect, waste, or poor handling of money, materials, or market. The position taken is not that human resources require more, or better, or more costly attention than the others, but that they require equal attention of the same systematic and objective character as that devoted to the other resources. Attention to human resources is required not because managers are humanitarians, but because they are managers. Just as attention to materials is required not because managers are materialists, but because they are managers.

What it Means to Manage Resources

I said that the general managerial job is to manage these six resources effectively to attain an organizational objective. What do we mean when we speak of managing resources? What does that mean with respect to each and every one of these resources of money, materials, market, people, ideas, and nature? It means

a. To know thoroughly, objectively, and realistically the nature, potentialities, and limitations in the resource, and the conditions of its employment.

b. To maintain and conserve that quantity and quality of the resource which is adequate to the organization's needs.

c. To develop to the fullest possible extent the potentialities in the resource.

d. To employ or utilize effectively the resource to the optimum degree in the organization's activity and work.

e. To weave together the efforts with respect to each resource so that an organized and integrated total result is obtained.

To understand, to maintain, to develop, to employ or utilize, and to integrate these resources into a working whole are the tasks of management which suggest the types of activities management must carry on with respect to each and every one of the resources. What I'm trying to stress here is that the general types of activities associated with finance, production, development engineering, sales, and personnel and industrial relations are the same. They have an organizational similarity. They are in each case tasks related to (1) discovery and understanding, (2) the maintenance and development, (3) the utilization and employment, and (4) the integration of the resources, money, materials, ideas, market, and people respectively. The difference in the specific tasks grows out of the fact that a different resource is dealt with, not in the general nature of the managerial function.

Management's Human Resources Tasks

Now just to make this matter a bit clearer, let's classify some of the tasks normally associated with the human resources function into these four general types.

First, what are some of the tasks related to,

A. Discovery and Understanding of Human Resources and of the Forces and Factors which Condition Their Effective Employment.

To have on tap an adequate inventory of the skills and capacities people in the company have.

To evaluate continuously the abilities and performance of employees and management at all levels, and have these evaluations available whenever decisions relative to personnel must be made.

To be sure what the reaction of employees, and management at all levels is to company policy and practice. To know what their needs and demands are, and to appraise the significance of such things for the company's operations.

To understand the way people react, and why, attempts to motivate and discipline them; in other words, the psychological conditions for the encouragement and assurance of productive and profitable work.

To maintain contact with, and understanding of, those who are key norm-setters for employees, including management, and, if there is a union, with the local, district, and national union leaders whose will and disposition affect the results of collective bargaining and the administration of the collective agreement.

To keep abreast of findings from outside research and practical experience as to the nature, potentialities, needs, and reaction tendencies of people of the sort employed by the company at all levels.

Then there are tasks related to:

B. Maintenance and Development of Human Resources.

Here are some of them.

To ascertain what the short-run and long-run labor force requirements (numbers and skills) of the company are.

To analyze available sources of labor supply inside and outside the company in the light of requirements for personnel.

To recruit, screen, and select candidates for positions in the company.

To develop and administer procedures for transfer, promotion, demotion, layoff, and discharge.

To develop and help to implement procedures for reduction of turnover, absenteeism, tardiness, etc.

To organize and administer training and development programs for employees and management at all levels.

To set up and administer health and safety programs provided by the company either unilaterally or by agreement with the union.

Before we turn to the third type of activity relative to the employment and utilization of human resources, I wish you would fix your attention on one thing. I have not said who should perform the human resources function. I've just been saying there is such a function that has to be performed. Particular parts of it may be amenable to performance by specially appointed personnel officers. Parts of it are performed in partnership with union officers. But you will notice now that most of the following tasks have to be performed by line officers of the company. In other words I want to make it clear that I an trying to define the human resources function, whoever performs it. I am not trying to define the personnel or industrial vice president's job, although when it comes to defining his job, the various aspects of the function will form the framework for naming the specific tasks he engages in. But let us continue with the third group of human resources activities, that is, those tasks related to

C. The Effective Employment of Human Resources

To plan, formulate, keep up-to-date, and implement a human resources policy appropriate to each level of responsibility and authority on which every manager from foreman to president operates.

To analyze and define jobs and organize work and work assignments in such a way that a maximum number of people's abilities are discovered, developed, and effectively employed. This is the foundation for all humans relations practice.

To provide wise assignment of people, to provide leadership, supervision, and control for their work.

To arrange incentives to, and rewards for work so that the greatest possible motivation to productive work is provided all participants, and to evaluate the effectiveness of such incentives and rewards. (Includes wage and salary administration.)

To provide for just discipline and correction of mistakes.

To settle satisfactorily the grievances and complaints that arise at all levels in the course of work and relations at work.

To provide opportunities for upward communications, for contribution of facts and ideas essential to adequate planning, and for making suggestions about more effective work, improvement of morale, elimination of waste, reduction of lost motion and conflict, better cooperation, etc.

To carry through union-management relations (including negotiation and administration of the collective agreement) in a way advantageous to all concerned, company, workers, union, and the public.

To ascertain, make known to top management, and control the cost of the human resources program and its results to the company.

Finally we may consider some of those tasks related to

D. Integration of Human Resources with Other Resources

To assist in the establishment of integrating goals and standards for operations of the company as a whole.

To assist in the establishment and keeping in continuous operation of effective mutual communications between people at different levels, people concerned with different functions.

To contribute to major decision-making in all areas of company operations an understanding of the human factors and needs affecting, and affected by, these decisions and operation. (For instance, in case of major technological, methodological, organizational, product, or locational changes.) In other words, to represent the human resources interest both in decision making, operations, and evaluation of results.

To keep management people who perform other managerial functions (production, sales, engineering, etc.) informed on policy and practice in the personnel and industrial relations area, and to help them interpret the relevance of these policies and practices for their activities and responsibilities.

Misconceptions of the Human Resources Function

Anyone who is familiar with the literature of personnel, industrial, and human relations will recognize many of the specific tasks named as those included under listings of the functions of a personnel or industrial relations administrator. Is this description of the human resources function then just merely an arbitrary regrouping of the personnel administrator's tasks? Does the present organization of these items have any significance or value which the traditional grouping of personnel tasks does not have? I think it does.

Allow me to draw several conclusions from the description just given which I trust will indicate such significance and value.

If one defines the human resources function in that way, there are certain commonly held ideas about the function which are obviously misconceptions. If anyone tried to set up and carry out a human resources function with these misconceptions as a foundation, he might easily do something which would lead to the criticisms mentioned at the beginning of this paper.

Consider how these misconceptions fare when we look at them in the light of the approach we have taken.

1. The first of these misconceptions is that this human relations business has standards of its own by which it should be measured, separate and distinct from the other functions of management. But it should be clear that this human resources function occupies no position of special privilege. It is going to have to meet the same standards as all other functions of management. What are those standards? There are two conditions that are absolutely essential for even minimum performance of a company producing goods and services for a profit.

a. That the function with respect to every resource be conducted so that the organization operates in the black, certainly in the long run, and as far in the black as its leadership and ownership demand as a condition of their continued particization.

b. That the resource (whether it be money, materials, market, ideas, or people, continues to yield at least the minimum contribution required to achieve the above result. (In the case of people this means "motivated to continue to offer at least the minimum effort required to achieve the above result.")

But there are additional conditions applicable to the management of each and every basic resource if optimum results are to be obtained. Among these can be named the following:

a. That the possibilities and potential in the resource not be wasted, that all possibilities and potential are discovered, understood, maintained, developed, utilized, and integrated effectively.

b. That the company's operations with respect to each resource jibe with the values and ethical standards which people essential to the company's success believe are important.

c. That participation in the work of the organization in dealing with each resource, offers a real challenge to the abilities and skills of every person involved, whatever his position.

d. That the essential goals and policies which the leaders set up are pointed toward the future and take realistic account of the tendencies of the times which, although in certain cases unwelcome, are factors that must be dealt with.

e. That all practices connected with the function shall reduce disadvantageous, and encourage advantageous, action toward the company from people and organizations outside, as well as inside the company.

f. That what is done pays off -- is worth more than it costs.

The human resources function, no less than production, engineering, sales, finance has to be measured against that kind of a yardstick.

2. In the second place, the approach taken here should demonstrate that the activities associated with "human relations," "human engineering," "personnel administration," are not, as is frequently assumed, recently added gadgets or luxury items which can be afforded only if the "really important" functions of sales, production, engineering, and financing are operating smoothly and profitably. They are necessarily carried out as soon as an organization begins to operate and have been carried out in some manner in any organization ever set up. A glance over the tasks named will indicate that no one them is a superfluous item. Each one of these tasks is necessarily performed by someone in a company. The performance may be adequate or inadequate. But some effort in the area of each of these tasks must be made, or some result of previous effort accepted as a basis for further action. The question is not whether each task shall be carried out--but how adequately and effectively it will be carried out. From the point of interest of the chief executive who must necessarily make decisions, and initiate and control operations utilizing all the company's resources, the need for informed and capable judgment and action about the human resources is as great as the need for informed and capable judgment and action about the material, financial, and market resources. One is tempted to add, "even greater," for the human resources must be utilized in the understanding, maintenance, development, utilization, and integration of all the others.

3. The third misconception is that the major concern of personnel work is to make folks happy. The chief and central concern of the human resources function is not personal happiness but productive work, and the cooperative relations of people at work, and the providing of the possibility of using and developing a maximum part of everyone's abilities and capacities in that productive work. The implied responsibility of management in this area is not to make people who are employed by the company "happy."

Their responsibility is to know, maintain, and develop the people available, and provide organized work arrangements that will make possible the maximum possible employment of the qualities and skills people possess. The main objective, in other words, is productive work and the maximum opportunity for all the company's people to utilize to the fullest possible extent all the skills they have relevant to making that work more productive. It is my conviction that personal happiness, as well as company effectiveness, is promoted by this approach to the human resources function. But that is a by-product, not the chief objective of effort.

4. A fourth misconception is that the chief job of the personnel office is welfare work. But included in the function are not merely welfare activities and those designed to compensate people for the disadvantages of work, not merely specialized "personnel" and "labor relations" functions, but the human resources aspect of every working relationship between people in the company. The human resources function goes far beyond welfare activities designed to compensate people for frustrations they feel in working for others. It has to do with the organization of work itself, and of relationships at work. The chief objective is not to compensate people for the monotony, unpleasantness, or burdens of work, but, in one sense, to reduce the need for such compensation by improving the work process, work associations, and work opportunities themselves, and the capacity of people to work effectively within them.

5. Another misconception is that personnel work is something done by management for the workers. But the people who are to be understood, maintained, developed, employed, and integrated include every person in the organization at all levels, not just the hourly or weekly paid employees. The human resources function is not to be identified solely with something called "employee relations," meaning those things which management, or the union for that matter, does to, for, or with the "employees" as "employee" is customarily defined. The human resources of a company consist of every person participating in the company's activities, up to and including the chief executive. The discovery, understanding, maintenance, development, employment, and integration of all people and their work at all levels is the human resources function.

6. The sixth misconception is that personnel work is something done by personnel people. But the tasks in the human resources function carried on by employees of the company are necessarily performed by all in the company who supervise the work of others, not just by people labelled with personnel or labor relations titles. Indeed, the primary relation of the latter staff people to the line people is that of planning, advising, assisting, and coordinating. It will be noted that I made no indication in this discussion of who should be assigned the tasks. It would, of course, appear reasonable, in view of the importance of the function, that a senior officer of the company, occupying a status equivalent to heads of engineering and production (materials), finance (money), and sales (market), should be charged with leadership and report to the same executive officer as these others whose major responsibility involves knowledge, maintenance development, and utilization of any other major resource.

But the problem of assignment of tasks is the subject for another discussion. At this point there is advantage in leaving the matter with the clear impression that the task is too big for any one man or department, and, since it is concerned with the organization of work, relationship at work, and facilities for work, that the ultimate decisions as to policy and practice, and the implementation of these decisions must be carried through by those responsible for the directing of that work, that is, line officials. If a special officer is assigned to guide and oversee the company's human resources function, he must work through these line people. He must advise, encourage, motivate, and develop them.

Any person primarily responsible for understanding, maintaining, developing, and utilizing effectively the company's human resources must consider himself an advisor to, a teacher of, and an assistant for those who direct the productive work which it is the company's mission to accomplish.

But there is another angle to who does this human resources job. When there is a union in the company, it must also be realized that line management carries out its basic human resources functions within a framework of expectancies, controls, and other activities of the union. It is possible for some managements to look on the human resources activity of the union as cooperation. Others consider it competitive. But whatever it is labelled, it is clear that the union, as well as the human resources officers in management, are participants with line management in carrying out the human resources function.

7. The last misconception that I'll have time to mention is that management frequently has to choose between the interests of the company and the interests of its people, to decide thether to be "production"--"worker"--centered. But the focus of concern for all human resources effort must be the simultaneous achievement of the central and essential interests of the company and its people. The end in view is always to develop an approach to the relation of the company and its people such that the attainment of the objectives of each through the relationship is not incompatible with the attainment of the objectives of the other.

A function of these dimensions and significance, and calling for cooperative effort from all line supervision in every department, must have clear and unequivocal top management support and be guided by top management policy. And because the union is involved at many points, it must have acceptance also from the union to be most effective.

Summary and Conclusion

We've ranged over a lot of territory and it is time to summarize briefly the main points made.

My purpose has been to describe the human resources function as something which, like the finance, production, engineering, sales, and research functions, grows out of organizational necessity, not the personal whims, humanitarianism or Machievelian schemes of management.

I have classified the tasks related to that function as those related to the understanding, maintenance, development, employment, and integration of one of the basic resources of a company--its people. And I want to stress that one can classify the tasks in the sales function, the finance function, the production and engineering function, and the research function, as those related to the understanding, maintenance, development, employment, and integration of the particular resources they deal with, namely, market, money, and materials, and ideas respectively.

When these tasks were so classified, several things became clear about this human resources function:

1. The human resources function has no special privileges; it must face the same tests of organizational usefulness and effectiveness as any other function.

2. It is not a recently added gadget or luxury, but a function that has to be covered from the very beginning of an organization. It is carved out of the general managerial function, not put into it.

3. Its objective is not to make people happy, but to achieve productive work and arrange for the maximum opportunity for expression of the full range of people's abilities and capacities in that productive work.

4. Its activities are not designed to compensate people for the frustrations, inevitably associated with work and working for others, but to organize that work and relations at work so that the need for such compensation is diminished.

5. The people it seeks to understand, maintain, and develop, employ, and integrate are not just the workers but every one in the company, including the president.

6. The tasks in the function are necessarily performed basically by those who supervise the work of others with the help and assistance, each in its own way, of the human resources officers on the one hand and (if the workers are organized) the union on the other.

7. The aim of a human resources policy and practice is not to make the interests of the company and the interests and goals of its people identical. It is to arrange work and relations of work so that the achievement of the goals and interests of each shall not be incompatible with the attainment of the goals and interests of the other.

It has not been my purpose in setting forth this concept of the human resources function and its implications to eliminate criticism of the "personnel approach," or "human relations" programs. I wouldn't do that if I could, because that critical activity is good for all concerned. But I would hope that this way of looking at the problem would make it possible for those with responsibility for developing this aspect of organizational effort and their critics to focus more clearly on the essential issues, and therefore to profit more from their relationship with one another.
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Title Annotation:Organization and Personnel
Author:Bakke, E. Wight
Publication:Management International Review
Date:Jan 1, 1992
Previous Article:Some developments in the study of organizations.
Next Article:Flexible budgets and the analysis of overhead variances.

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