Chapter 6 The Concept Of People Management
Introduction
‘People management’ is increasingly being used as an alternative to ‘human resource management’. But it is not a synonym; it should not simply be achange to a more acceptable name. A philosophy of people management is required, based on the principle that employees should be regarded as people rather than as exploitable resources. Rawls (1973: 183) wrote that: ‘We must treat persons solely as ends and not in any way as means.’ Employee wellbeing is important. Evidence produced by Peccei (2004), PricewaterhouseCoopers (2008), Guest (2017) and Krekel et al (2019) of the Saïd Business School has shown conclusively that attention to wellbeing has a major impact on organizational performance as a result of improvements to the employee experience and higher levels of engagement, motivation and job satisfaction.
A people management system that embraces the principle stated above will cover the same areas as an HRM system but will apply them differently.
People Management Defined
People management adopts a multi-stakeholder approach to managing the employment relationship. This recognizes the need to satisfy the interests of the owners (the shareholders) of a business or the requirements of those responsible for the operation of a public or voluntary sector organization. It also recognizes the interests of the management of the organization and the organization’s responsibilities to its suppliers and the public at large (thecommunity). Equally, however, it recognizes the interests of the people the organization employs and acts accordingly. People are not simply treated as resources – commodities or disposable factors of production who exist to be exploited at the behest of the owners and management. People management aims to achieve a balance between the needs of employees and those of the other stakeholders. It pursues employment policies that are socially legitimate and produce benefits for both employees and employers. It avoids the temptation to look upwards and focus on the strategic (business) aims of the organization at the expense of the wellbeing of the people in the organization. It is concerned with theemployee experience – everything thatpeople encounter, observe and feelduring the course of theemploymentfrom its beginning and onwards.Managing the employee experience isa ‘bottom up’ rather than a ‘top down’process. The starting point is to gainunderstanding of how employees perceive their experience of working inthe organization and, from that analysis, identify what needs to be done todeal with any issues and enhance that
experience.
Comparison between HRMand people management
A comparison of the characteristics ofHM with those of people management is given in table 6.1
| Strategic HRM | Strategic People Management |
| Focus on strategic fit (vertical and horizontal integration) but the stress is largely on vertical fit- SHRM as a means of furthering the interests of the business and its owners (shareholders). | Recognizes the importance of strategic fit but the emphasis is on a multistakeholder approach furthering the interests of the people working in the business as well as well as its owners. |
| See performance mainly in terms of financial results. Tendency to put profits before people. | Sees performance not only in financial terms but also as the capacity of the business to meet the needs of all its stakeholders, including the community. |
| Takes the laudable but somewhat unrealistic view that it is not only desirable but also feasible to develop and apply an interconnected set of overarching and comprehensive HR strategies that holistically drive business performance. | The focus is on a more realistic approach to the development and implementation of people strategies that work. It is these people strategies that count- abstract analyses of the meaning and implications of strategic HRM are immaterial. |
| The idea of strategic HM implies that organizations will have something one might recognize as an HR strategy, probably in the form of a written and a formally agreed document. This is assumed to be “aligned” in linearfashion with and driven by a formal business strategy; and it in turn translates the people aspects of that business strategy into some kind of plan for action on the people aspects of the business’ Institute for Employment Studies (Brown
et al, 2019: 43) |
What we have seen in the case studies is something that, in today’s more unpredictable and fast changing environments, is more complex, layered, adaptive, interactional and multidirectional’ Institute for Employment Studies (Brown et al, 2019:43) The IES has produced a model of strategic people management that represents this complexity (see Figure 6.1). |
| The most important underpinning theory is the resource-based view. This is supported by human capital theory. Both these treat people as factors of production, which means that, potentially, they are there to be exploited. | The mostimportant underpinningtheories are behaviouraltheory and AMO theory. Both of these adopt a humanistic point of view. |
| Performance is seen in financial terms, the aim being to increase shareholder value. | Performance is seen in broader terms as success in meeting the needs of all stakeholders employees as well shareholders, also suppliers and the community
|
| The conceptual focus on such things as the desirability of strategic fit distracts from the need to develop HR strategies that work.
|
The focus is more on the practicality of people strategies what needs to be done to achieve effective implementation. |
The five strategic pillars are shown in Figure 6.1.
Figure 6.1 A model of strategic people management.
Figure 6.1 details
The people management strategy includes the following:
- People management strategy:
- Priorities
- Strategic workforce plan,includes umbers, skills andcompetencies
- Work plan for HR function
- Annual HR operating planslash budget
Pillars
- Business strategy; includeskey planks of businessmodel and strategiebusiness capabilities andpriorities
- Key employment issues;Includes labour market,legislation, and soelo/politjeal pressures
- Employer purpose, valuesand culture
- Long(er) term businessplan
- Shorter term slash operational business plans andbudgets
Policies
- HR and people management practice
- HR process and services
Underpinning capabilities
- Senior leaders and HRwork together on strategicpeople issues
- Professional and businesscapabilities of HR
- People management and capability in the line
- HR metrics and information systems.
Conclusion
The concept of strategic people management is built on the ideas contained
in the concept of strategic HM. But itprovides a broader view of the ways in which employees should be treated. Thedifferences between these approacheswere outlined in Table 6.1.The main precepts of strategic peoplemanagement are theneeds for strategicfit, a multi-stakeholder approach and,as Walton (1974) proposed some timeago (although just as relevant today),the development of human capacities,growth and security, social integration,rights and representation, the socialrelevance of work, a safe and healthyworking environment, work-life balance and adequate and fair rewards.But a fundamental characteristic ofstrategic people management is that itis about adoptinga pragmatic approachto both the development and implementation of peoplestrategies.
