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HRM policies and their consequences

Adapted from Human Resource Management in a Business Context, 3rd edition (2007)

Beer et al (Managing Human Assets by Michael Beer, Richard E. Walton, Bert A. Spector, 1984) propose that long-term consequences (both benefits and costs) of human resource policies should be evaluated at three levels:

  • Individual. They argue that the well-being of employees must be considered separately and distinctly from that of the organization. Employees can be affected economically, physically or psychologically by HRM policies. But managers have different values and will weight those consequences differently according to those values. Some will focus on the organization at the expense of workers whereas others will regard employees as having legitimate claims to fair treatment.
  • Organizational. Obviously, human resource policies have to be evaluated in terms of their contribution to business goals and organizational survival. Specifically, HRM policies can increase an organization's:
  • - efficiency
    - adaptability
    - service performance
    - price performance
    - short-term results
    - long-term results

  • Societal. HR practices can have wide consequences on society. For example, Beer et al ask: "What are the societal costs of a strike or a layoff?" They point out that "alienated and laid-off workers may develop both psychological and physical health problems that make them burdens to community agencies funded by the local, state, or federal government. Today employers pass on many of the costs of their management practices to society."

Beer et al suggest that managers use their 4 Cs to analyse the questions raised above.

1. Commitment. Do HRM policies enhance the commitment of employees to their work and their organization - and to what extent? Improved commitment may lead to more loyalty and better performance for the business. It can also benefit the individual through enhanced self-worth, dignity, psychological involvement, and identity. And there is a societal spin-off because of these psychological benefits.

2. Competence. Do HRM policies serve to attract, keep, or develop employees who have valuable skills and knowledge - both now and in the future? Again there are benefits at all three levels. If skills and knowledge are there when required, the organization benefits, and its employees 'experience an increased sense of self-worth and economic well-being.'

3. Cost effectiveness. The cost effectiveness of particular HRM policies can be evaluated in terms of wages, benefits, turnover, absenteeism, strikes, etc. The costs can be judged for organizations, individuals, and society as a whole.

4. Congruence. The question can be raised about the level of congruence in HRM policies between, for example:

- management and employees,
- different employee groups,
- the organization and the community,
- employees and their families, and
- within the individual?

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This article is based on Human Resource Management in a Business Context by Alan Price (3rd edition, 2007)

Introduction to HRM

Human Resource Management in a Business Context 
Human Resource Management
in a Business Context

by Alan Price
Thomson Learning - ISBN 978-184480-548-8
Third Edition 2007

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