Current and Emerging Theories of HRM

Figure: Current and Emerging Theories of HRM

HRM has developed from traditional personnel management to a strategic function that affects organizational performance. Current HRM theories concentrate on employee engagement, performance optimization, and strategic alignment (Wright & McMahan, 1992) however, contemporary theories include technology, agility, and sustainability in workforce management (Ehnert, Harry & Zink, 2016).

1. Current Theories of HRM

1.1 Strategic Human Resource Management (SHRM)

• This method improves competitiveness by integrating HR policies with cooperate strategies (Wright & McMahan, 1992).
• Comprises workforce planning, leadership development, and talent acquisition.
• Organizations using SHRM achieve better business performance through strategic workforce management (Huselid, 1995)

1.2 Resource-Based View (RBV) of HRM

• Consider employees as unique assets that provide a competitive advantage (Barney, 1991).
• Concentrates on talent management, training, and skill development (Becker, 1964).
• Organizations investing in training and employee development benefit from long-term productivity gains (Becker, 1964)

1.3 High-Performance Work Systems (HPWS)

• HR practices improve employee productivity and creativity by fostering a supportive work environment and implementing strategic initiatives (Huselid, 1995). 
• Implement career development, teamwork, performance-based compensation, and participatory decision-making.
• According to the research, the organizations implementing HPWS experience lower turnover rates and increased corporate financial performance (Huselid, 1995)

1.4 Psychological Contract Theory

• This explains unspoken expectations that exist between employees and employers (Rousseau, 1995).
• A breach of this contract (e.g., lack of growth opportunities) leads to disengagement.
• This theory shows the importance of transparent communication and trust in employment relationships (Morgan, 2017)

1.5 Human Capital Theory

• The success of an organization depends on the knowledge and the capability of its employees (Becker, 1964).
• Learning, development, and ongoing upskilling should be given top priority in HR strategy. 
• Investing in continuous learning, professional development, and upskilling is essential for organizations to remain competitive in dynamic business environments (Dery & Sebastian, 2017).

2. Emerging Theories of HRM

2.1 Agile HRM

• Follow agile approaches that incorporate adaptability, teamwork, and ongoing feedback (Dery & Sebastian, 2017).
• Highlight the importance of rapid change adaptation and team-based performance management.

2.2 Employee Experience (EX) Theory

• Emphasize improving the entire employee journey (Morgan, 2017).
• HR practices are intended to enhance work-life balance, well-being, and job satisfaction.

2.3 Sustainable HRM

• This approach incorporates governance, social, and environmental (ESG) considerations into HRM (Ehnert et al., 2016).
• Including ethical leadership, employee well-being, and corporate social responsibility (CSR).

2.4 AI and HRM

• Introducing AI to talent analytics, hiring, and decision-making. (Leicht-Deobald et al., 2019).
• Increases productivity but creates issues related to ethics, discrimination, and job displacement concerns.
• Organizations must implement AI-driven HRM practices responsibly to avoid unintended biases and legal risks (Jeske & Shultz, 2016)

2.5 Diversity, Equity, and Inclusion (DEI) Theory

• Emphasizes the establishment of diverse, inclusive workplaces (Nishii, 2013).
• HR regulations support cultural competence, fairness, and equal opportunities.

2.6 Gig Economy & Workforce Fluidity Theory

• Examine the growth of remote work, freelancing, and flexible employment (Jeske & Shultz, 2016).
• HR must accommodate managing on-demand talent and non-traditional job contracts.

Now a days the HRM is moving towards a more strategic, agile, and a technology-driven approach. The organizations must integrate current theories like SHRM and HPWS with these novel trends, such as Agile HRM, AI-driven HR, and employee experience strategies, to keep the organization in the competition.

References

• Barney, J.B. (1991) ‘Firm Resources and Sustained Competitive Advantage’, Journal of Management, 17(1), pp. 99-120.
• Becker, G.S. (1964) Human Capital: A Theoretical and Empirical Analysis, with Special Reference to Education. Chicago: University of Chicago Press.
• Dery, K. and Sebastian, I. (2017) ‘The Digital Workplace and HRM: A Strategic Approach’, Journal of Strategic HRM, 12(2), pp. 45-67.
• Ehnert, I., Harry, W. and Zink, K.J. (2016) Sustainability and Human Resource Management: Developing Sustainable Business Organizations. Cham: Springer.
• Huselid, M.A. (1995) ‘The Impact of Human Resource Management Practices on Turnover, Productivity, and Corporate Financial Performance’, Academy of Management Journal, 38(3), pp. 635-672.
• Jeske, D. and Shultz, K. (2016) ‘Using Social Media Content for Screening in Recruitment and Selection: Pros and Cons’, Work, Employment and Society, 30(3), pp. 535-546.
• Leicht-Deobald, U., Busch, T., Schank, C., Weibel, A., Schafheitle, S., Wildhaber, I. and Kasper, G. (2019) ‘The Challenges of Algorithm-Based HR Decision-Making for Personal Integrity’, Journal of Business Ethics, 160(2), pp. 377-392.
• Mayo, E. (1933) The Human Problems of an Industrial Civilization. New York: Macmillan.
• McGregor, D. (1960) The Human Side of Enterprise. New York: McGraw-Hill.
• Morgan, J. (2017) The Employee Experience Advantage: How to Win the War for Talent by Giving Employees the Workspaces They Want, the Tools They Need, and a Culture They Can Celebrate. Hoboken: Wiley.
• Nishii, L.H. (2013) ‘The Benefits of Climate for Inclusion for Gender-Diverse Groups’, Academy of Management Journal, 56(6), pp. 1754-1774.
• Rousseau, D.M. (1995) Psychological Contracts in Organizations: Understanding Written and Unwritten Agreements. Thousand Oaks: Sage.
• Taylor, F.W. (1911) The Principles of Scientific Management. New York: Harper & Brothers.
• Weber, M. (1922) Economy and Society: An Outline of Interpretive Sociology. Berkeley: University of California Press.
• Wright, P.M. and McMahan, G.C. (1992) ‘Theoretical Perspectives for Strategic Human Resource Management’, Journal of Management, 18(2), pp. 295-320.