The Nature and Challenge of Personnel Management

The Nature and Challenge of Personnel Management

At one time in our history, "liking people" appeared to be sufficient for choosing to work in the field known as personnel management. Preferring to work with humans rather than objects is still important, but it is grossly insufficient in these modern times. Personnel management is one of our most complex and challenging fields of endeavor. Not only must the firm's requirements for an effective work force be met, the personnel manager must be greatly concerned with the expectations of both employees and society in general. Society at large has proclaimed its human resources to have vital needs that move beyond a "work force" status. The employee is simultaneously an instrument of the firm, a human being, and a citizen.

The role of the personnel manager has thus changed through time. At first, the dominant role was to satisfy top management in procuring and maintaining a work force that would be instrumental to organizational productivity. As knowledge expanded in executing this role, the manager began to understand the necessity for ascertaining and accommodating to the needs of the human beings who constituted that work force. He or she constantly searched for that program which would support the accomplishment of both organizational and individual objectives. The job was made more difficult by such factors as the rise of the modern labor union, the increasing educational level of societal members, the increasing size and complexity of the organization and its technology, and the insistent and sometimes violent demands of less privileged segments of our society. This last-named factor has led to the final major alteration of the personnel manager's role. Though society "permits" and encourages the use of its citizens as means to organizational ends, the fact that they constitute an instrumental work force in no way detracts from the fact that they are (1) human beings with certain inalienable rights, and (2) society's citizens with assigned rights and privileges. In this newly expanded role, the personnel manager will at worst act as the organization's social conscience, and at best will work, as an informed specialist, with all members of the organization in determining and meeting the demands of this social role.

The modern personnel manager therefore requires a broad background in such fields as psychology, sociology, philosophy, economics, and management. He or she must deal with issues and problems that often do not have "right answers" obvious to all. There will be required an ability to understand that which is not logical, a capacity to project oneself into other positions without losing perspective, and a skill in predicting human and organizational behavior. Reading or studying a text such as this will not magically change one into an effective personnel executive. Study should be of material assistance, however, in giving a perspective from which to view the field, in suggesting possible answers to current problems, and in helping to define the way toward further improve­ment and research. Certainly, in this text the technical content of the field will be thoroughly discussed. The personnel manager who does not meet the demands of this initially assigned role may not be around to worry about the other two. We shall also emphasize and attempt to define the nature of the forces brought to bear by individuals and society. As suggested in Figure 1-1, the personnel manager needs to keep his or her head above water while moving ahead in the confluence of these three major streams of influence.

Definition of Personnel Management

It is appropriate and helpful to offer, at the beginning of the discussion, a definition of the subject to be covered. In the following definition we are presenting an outline of this entire text. In the first place, we are dealing with two categories of functions, managerial and operative. A manager is one who exercises authority and leadership over other personnel; the president of a firm is certainly a manager, and so also is the department head or supervisor. On the other hand, an operative is one who has no authority over others but has been given a specific task or duty to perform under managerial supervision. Thus, the personnel manager is a manager and as such must perform the basic functions of management. This is true no matter what the nature of the operative function. Yet a comprehensive definition of personnel management must include also the operative functions in the field. In outline form, the definition would appear as follows:

1. Management functions

a. Planning

b. Organizing

c. Directing

d. Controlling

2. Operative functions

a. Procurement

b. Development

c. Compensation

c. Integration .

e. Maintenance

f. Separation

It is therefore possible, as mentioned in the preface, to summarize this entire text into one sentence: Personnel management is the planning, organizing, directing, and controlling of the procurement, development, compensation, integra­tion, maintenance, and separation of human resources to the end that individual, organizational, and societal objectives are accomplished. A brief elaboration of the component parts of this definition follows.

PLANNING Effective managers realize that a substantial portion of their time should be devoted to planning. For the personnel manager, planning means the determination in advance of a personnel program that will contribute to goals established or the enterprise. Presumably, the process of goal establishment will involve the active and enlightened participation of the personnel manager, with his or her expertise in the area of human resources.

ORGANIZING After a course of action has been determined; an organization must be established to carry it out. An organization is a means to an end. Once it has been determined that certain personnel functions contribute toward the firm's objectives, the personnel manager must form an organization by designing the structure of relationships among jobs, personnel, and physical factors. One must be aware of the complex relationships that exist between the specialized unit and the rest of the organization. Because of increasing expertise in this function, many top managements are looking to the personnel manager for advice in the general organization of the enterprise.

DIRECTING At least in theory, we now have a plan and an organization to execute that plan. It might appear that the next logical function would be that of operation, doing the job. But it has been found that a "starter" function is becoming increasingly necessary. In our above definition, this function was labeled "direction," but it may be called by other names, such as "motivation," "actuation," or "command." At any rate, a considerable number of difficulties are involved in getting people to go to work willingly and effectively.

CONTROLLING Now, at last, the personnel functions are being performed. But what is the management duty at this point? It is logical that its function should be that of control, that is, the observation of action and its comparison with plans and the correction of any deviations that may occur, or, at times, the realignment of plans and their adjustment to unchangeable deviations. Control is the managerial function concerned with regulating activities in accordance with the personnel plan, which in turn was formulated on the basis of an analysis of fundamental organization goals.

It is believed that the four above-named functions are basic and common to all managers. In Chapters 4 and 5, the personnel manager's responsibilities for planning, organizing, and controlling will be discussed. The essence of the fourth function, direction, is so closely allied with the operative function of integration that its discussion will be delayed until later in this text. Though all managers must unavoidably direct their subordinates, the personnel manager should possess exceptional expertise.

There is a skill in managing that can be transferred to various operative areas, but no one will deny that an effective manager must know what it is that he or she is managing. The greater portion of this text is devoted to these personnel operative functions.

PROCUREMENT This first operative function of personnel management is concerned with the obtaining of the proper kind and number of personnel necessary to accomplish organization goals. It deals specifically with such subjects as the determination of human resources requirements and their recruitment, selection, and placement. Determining such requirements refers to both number and quality of personnel. Selection and placement cover the multitude of activities designed to screen and hire personnel, such as reviewing application forms, psychological testing, conducting interviews, and inducting. These activities are presented and analyzed in Chapters 6 to 8.

DEVELOPMENT, After personnel have been obtained, they must be to some degree developed. Development has to do with the increase of skill, through training, that is necessary for proper job performance. This is an activity of very great importance and will continue to grow because of the changes in technolo­gy, the realignment of jobs, and the increasing complexity of the managerial task. Discussion of operative, managerial, and organization development will be presented in Chapter 9, to be followed by performance appraisal and career development in Chapters 10 and 11.

COMPENSATION This function is defined as the adequate and equitable remuneration of personnel for their contributions to organization objectives. Though some recent morale surveys have tended to minimize the importance of monetary income to employees, we nevertheless contend that compensation is one of the most important functions of personnel management. In dealing with this subject, 'we shall consider only economic compensation. Psychic income is classified elsewhere. The basic elements of a compensation program are pre­sented in Chapters 12 to 14, with an emphasis upon such subjects as job evaluation, wage policies, wage systems, and some of the recently devised extra compensation plans.

INTEGRATION With the employee procured, developed, and reasonably compensated, there follows one of the most difficult and frustrating challenges to management. The definition labels this problem "integration." It is concerned with the attempt to effect a reasonable reconciliation of individual, societal, and organizational interests. It rests upon a foundation of belief that significant overlapping of interests do exist in our society. Consequently, we must deal with the feelings and attitudes of personnel in conjunction with the principles and policies of organizations. This broad problem, as well as the narrower related problems, such as grievances, disciplinary action, and labor unions, will be covered in Chapters 15 to 19.

MAINTENANCE If we have executed the foregoing functions well, we now have a willing and able work force. Maintenance is concerned with the perpetuation of this state. The maintenance of willingness is heavily affected by communications with employees, a subject discussed in Chapter 20. The physical condition of the employee should be maintained, and health and safety will be the subject of Chapter 21.

SEPARATION If the first function of personnel management is to secure the employee, it is logical that the last should be the separation and return of that person to society. Most people do not die on the job. The organization is responsible for meeting certain requirements of due process in separation, as well as assuring that the returned citizen is in as good shape as possible. In Chapter 22, we shall discuss such types of separations as retirement, layoff, out­placement, and discharge. The final chapter is devoted to the subject of research in all personnel functions, and some consideration of the processes of introduc­ing change should research findings demand it.

The purpose of all the activity outlined above, both managerial and operative, is to assist in the accomplishment of basic objectives. Consequently, the starting point of personnel management, as of all management, must be a specification of those objectives and a determination of the sub objectives of the personnel function. The expenditure of all funds in the personnel area can be justified only insofar as there is a net contribution toward basic goals. For the most part these are goals of the particular organization concerned. But as suggested earlier, society is tending to impose human goals upon the private business enterprise, goals that may or may not make an immediate contribution to an organization's particular objectives.

The Role of the Personnel Manager

Every organization has personnel function whether or not a specific personnel manager has been so designated. Every organization must hire, train, pay, motivate, maintain, and ultimately separate employees. If a specialized personnel manager exists, he or she can contribute much to greater organizational effectiveness. In the past, assignment to this function often constituted a one-way ticket to oblivion. But today, the increasingly critical nature of problems and challenges in the more effective utilization of human resources has greatly elevated the status of the field. It is estimated that human resources subjects now consume about 20 percent of the total attention of top management; predictions have been made that this will rise to 30 percent within 5 years. In the past, it has been typical to pay the personnel manager about 70 percent of what his or her peers receive in the fields of marketing and finance. But recently the percentage salary increases have been considerably higher in the personnel field, which is the ultimate indication of the worth of a function in private organization.

When a large corporation recently went looking for a manager to head its human resources division with an offer of over $100,000, it was obvious that it was not looking for a "picnic planner." In a recent survey of 2,200 firms, the median salary of the top personnel executive in large organizations was $56,000.2 Median salaries of subordinate specialized executives were as follows: $44,964 for international responsibilities; $39,600 for labor relations; $28,000 for safety executives; and $25,225 for those with equal employment opportunities responsi­bilities.

To obtain a picture of the typical responsibilities of the personnel manager, the results of a Prentice-Hall/American Society for Personnel Administration survey of 1,381 personnel executives are helpful ^.3 Figure 1-2 shows two features of the field: (1) the average percentage of the personnel unit's budget allocated to specific activities, and (2) a priority rating for each task indicating its relative importance. It will be noted that policy formulation, salary and benefits adminis­tration, recruiting and screening, union relations, and maintenance-security account for the larger single portions of the budget. In terms of priorities, however, the newly enhanced status of the field is denoted in that the major emphasis is upon policy formulation, recruiting and screening, and union relations. The impact of laws and courts has been substantial in all three areas. The very low ratings for vending—food services and recreation—indicate that the field has changed in both content and status.

One should not conclude that the itemized functions are fully and solely performed by the personnel manager. All managers, regardless of area, are in part personnel managers. They still have a role in selecting new personnel, in the sharing of their training and in the inescapable function of integration and motivation. The only way that a personnel unit can be truly effective is to work with and through the operating departments that are performing the fundamen­tal functions of the firm. Yet, society is constantly emphasizing that the meeting of human needs and citizenship needs are also fundamental outputs of all organizations. Thus, personnel management may be basically facilitative, but it is increasingly being held responsible for an output of its own.

Challenges Of Modern Personnel Management

We need not look far to discover challenging problems in the field of personnel management. Managers may ignore or attempt to bury personnel problems, but these will not lie dormant because of the very nature of the problem component. Many problems are caused by constant changes that occur both within and without the firm. Among the many major changes that are occurring, the following four will illustrate the nature of the personnel challenge:

Changing mix of the work force

Changing values of the work force

Changing demands of employers

Changing demands of government

Changing mix of the work force

Though each person is unique and consequently presents a challenge to our general understanding, one can also appreciate broader problems by categorizing personnel to delineate and highlight trends. Among the major changes in the mix of personnel entering the work force are: (1) increased numbers of minority members entering occupations requiring greater skills, (2) increasing levels_, of formal education for the entire work force, (3) more female employees, (4) more married female employees, (5) more working mothers, and (6) a steadily increasing majority of white-collar employees in place of the blue-collar.

The fourth challenge has had much to do with many of the above-listed changes. Prohibition of discrimination and requirements for positive action to redress imbalances in work force mix have led to greater numbers of minority personnel being hired for _all types of jobs. The proportion of blacks, for example, has increased significantly in professional, technical, managerial, clerical, sales, and craftsman-type jobs. However, this group still holds a disproportionately large share of the less skilled and lower-paid jobs, such as those of service worker and laborer. Steady increases in the level of formal education would seem to bode well for continued change.

Changing values of the work force

The changing mix of the work force inevitably leads to introduction of new values to organizations. In the past and continuing into the present, the work force of America has been heavily imbued with a set of values generally characterized by the term "work ethic." Work is regarded as having spiritual meaning, buttressed by such behavioral norms as punctuality, honesty, diligence, and frugality. One's job is a central life interest and provides the dominant clue in interpersonal assessment. A work force with this set of values is highly adapted to use by business organizations in their pursuit of the values of productivity, efficiency, and effectiveness.

With respect to an increasing emphasis upon the individual as compared with the organization, a number of changes in personnel programs have been tried. Attempts have been made to redesign jobs to provide challenging activities that meet needs of the human ego." In one company, it being well realized that some individuals prefer more repetitive, less challenging assignments, a choice was provided between the assembly line and individual assembly for the same product. Concerning pay, a few firms have moved to pay the employee for skills possessed rather than for skills demanded by the job. With respect to fringe benefits, a cafeteria arrangement has been proposed where the employee can periodically choose what particular benefits he or she desires while remaining within an overall cost limit. And, the individual's right to personal privacy has led many organizations to cut back significantly upon information collected that has little to do with performance on the job. As one example of such a program, Figure 1-5 outlines the essentials of an employee privacy program followed by the International Business Machines Corporation.

As a final illustration of the move toward the individual, the self-determination of work schedules is an interesting recent phenomenon in this country. "Flexi time" is a program that allows flexible starting and quitting times for the employee. The schedule used by one company is as follows: (1) 7 to 9 A.M. constitutes a flexible band during which the employee may choose the time he or she begins work, (2) 9 to 11:30 A.M. is core time all employees must be present, (3) 11:30 A.M. to 1:00 P.M. is flexible time for taking a 30 minute lunch, (4) 1 to 4 P.m. is core time, and (5) 4 to 6 P.M. is flexi time for quitting. When allowed this freedom, slightly over half of the employees chose an earlier starting time and about a third kept on working the usual hours. All employees must still work the required total number of hours for the week or month. A variation of the plan is group-selected staggered hours. Rather than each individual choosing her or his specific starting and stopping times, the group votes as a unit for varying schedules that all will follow for designated periods of time.

Changing demands of employers

Changes are not _all on the side of members of the work force. Organizations constantly undergo changes in their internal environments in response to competitive pressures as well as advancing technological progress. Two of the many major changes are (1) growth of the huge international organization and steadily increasing attempts to automate operations. Effects of these upon personnel programs will be briefly outlined.

Of the gross world product in 1973, it was estimated that 15 percent was produced by multinational corporations. It is also predicted that by the close of this century, some 300 giant international business firms will produce more than half of the world's goods and services. Of the world's top industrial companies, over half are based in the United States.

The most important facet of the personnel process in the establishment and operation of overseas plants and facilities are that of selection and placement of key personnel. Pains should be taken to assure that selectees possess certain basic characteristics. Among these are: (1) a very real desire to work in a foreign country, (2) spouses who have actively encouraged their mates to work overseas, cultural sensitivity and flexibility, (4) high degree of technical competence, and (5) a sense for politics. One survey of the opinions of 127 overseas managers revealed that they thought that the spouse’s opinion and attitude should be considered the number one screening factor. Cultural sensitivity is also essential if we are to avoid the image of the "ugly American." In correlating success of performance with various selection criteria, one study emphasized "the great importance of setting consistent and accurate initial expectations about the work situation" of the overseas assignment. This would require consider­able education of the candidate concerning the culture, country, politics, lan­guage, and business setting of the international facility.

That a challenge definitely still remains in this area is revealed by a survey of personnel activities actually undertaken for a group of overseas managers. Approximately 80 percent of the firms involved used no tests in screening for these assignments; of those who did, only 20 percent attempted to validate them. Two-thirds of the firms never bothered to consult candidates' spouses concerning their attitudes and feelings about the assignment and the designated country. Two-thirds provided no predeparture training for selectees to acquaint them with such matters as the people, their political system, and their government. Though the selectees will learn in time, this initial ignorance not only leads to many daily mistakes and gaffes, but it also contributes to disillusionment and a desire to return to home base. The personnel manager must take a more active role in this steadily increasing challenge resulting from changed employer demands.

The second illustration dealing with altered employer demands is automa­tion. Though it has been given various specific meanings, in its simplest terms it is applied to machine and work processes that are mechanized to the point of automatic self-regulation. Among some of the major effects upon personnel management of automation are the following:

1. The restructuring of production jobs. Some of the routine, dull, monotonous jobs will be eliminated. New jobs will be created with a "systems viewpoint" rather than the "specialized task" perspective introduced by time and motion studies of the past. An increase in the number of maintenance jobs will occur as a consequence of an accelerated substitution of capital for labor.

2. Necessity for upgrading the work force. The restructuring of jobs will levy a considerable burden upon personnel managers to retrain and upgrade personnel to qualify for these new jobs. This will require more classroom instruction as well as on-the-job training.

3. Structural unemployment. A most challenging problem to all those interested in effective personnel management is the adjustment of the present work force in terms of quantity. Some jobs will be eliminated and others created that call for higher levels of skill and knowledge. Some personnel cannot be retrained because of fundamental deficien­cies in education and abilities. Some personnel cannot be reabsorbed even if retrainable. The unemployment that results is a problem of such significance and complexity that it requires the efforts of not only private industry, but labor unions and all levels of government as well.

4. Labor relations problems and adjustments. Restructuring of jobs will also affect the organization of corresponding labor unions. Some unions will die, though unwillingly, as a specialized occupation is automated out of existence. Changes in union jurisdictions would also mean changes in seniority units. The trend may well be in the direction of larger units covering a series of jobs or occupations, or perhaps encompassing the entire plant or company.

5. Adjustments in wage structures. The intricate tie-in among jobs and work stations in a highly mechanized or automated plant tends to place emphasis upon cooperation rather than competition. The individually oriented piece-rate wage system may have to give way to systems which reward the group. As jobs are altered to fit a system, the related pay structures will require corresponding adjustment. Basic pay plans may again be based largely on time spent at work, with extra compensation geared to improvement in group output.

6. Human relations difficulties. The restructuring and revised layout of work necessari­ly involves the alteration of existing patterns of interpersonal relationships. The size of any one work group could well decrease; new layouts could force people to work in comparative isolation. This may cause problems of adjustment, as evidenced by the demands of workers in one British factory for a new fringe benefit of "lonely" pay. Certainly, it is easy to predict the human problems that accompany the introduction and grudging acceptance of changes involving the loss of job or obsolescence of skills developed over the years. Automation is introduced for technical and economic reasons, but its immediate consequences and difficulties are essentially human in nature.