SUSTAINABILITY ISSUES AND NEW DEFINITIONS OF PEOPLE MANAGEMENT

1. SUSTAINABILITY ISSUES AND NEW DEFINITIONS OF PEOPLE MANAGEMENT Professor Sola FAJANA, FCIPM

2. 1. INTRODUCTION This presentation examines the extent to which labels describing the activities called ‘management of people at work’ (Beach, 1975) have altered in sync with changes in management thoughts and practices. In this paper, Elkington (1994, 1997) triple bottom-line is considered a very influential current management thought. The overall effect of this approach to people management on organisational sustainability is examined; and the prospect of adoption of the emerging sustainable HRM is discussed. It is expected that this intervention will generate further discussions during this conference. I thank you for my invitation and the opportunity to share my thoughts with you.

3. 2. EMERGING DEFINITION OF PEOPLE MGT Human resource management (HRM) is the most currently globally accepted label of activities connected with people management. It describes an academic discipline and an area of industrial practice with contents in concepts, theories, models, policies, strategies, plans, programmes, rules and regulations and other activities that are connected with the acquisition and effective utilisation of people towards the achievement of organisational goals for overall organisational effectiveness and sustainability (Fajana, 2002). Recently, more and more scholars are connecting sustainability to HRM (Ehnert, 2009, 2014, Kramar, 2014).

4. 3. A PERIODISED HISTORY OF PEOPLE MANAGEMENT Human resource management is as old as the history of man. For instance, in Genesis 2:15-16, it is written, “and the Lord God took the man (Adam) and put him into the Garden of Eden to dress it and to keep it”. Elaborate commandments and controls (disciplinary rules?) were given, and specific work standards for sustainable all-round excellent performance were set up and handed over to the first workers (Adam and Eve). Nevertheless, the function was not initially labelled as human resource management. Since the industrial revolution of the early 1800s, the ‘management of people at work’ (Beach, 1975) has evolved through the following labels:

5. HISTORIC LABELS • Labour Administration • Labour and Staff Administration • Personnel Administration • Personnel Management • Human Resource Management • Strategic Human Resource Management • Human Capital Management

6. 3.1 Labour Administration

7. 3.2 Labour/Staff Administration

8. 3.3 Personnel Administration

9. 3.4 Personnel Management

10. 3.5 HR / Strategic HR / Human Capital Mgt

11. 3.5.1 Human Resource Management Technique The HRM strategy was pioneered at General Electric Company in the United States in the 1960s. It is a practice whereby the employer packages for its workers research-based and industry-averaged rates of pay to which organised labour was to respond. But because such rates were based on an honest study of existing trends, workers could hardly have anything to object. Over time, this custom had become widely adopted. Its contemporary variant includes generous information dissemination to employees, open door personnel policies and practices, equitable and environment-sensitive compensation practices as well as advanced forms of employee involvement in decision-making (Foulkes, 1986).

12. 3.5.2 The Uniqueness of HRM and the on-boarding of Strategic HRM • Widely adopted by MNCs and TNCs • Institutionalisation of HR Departments in most organisations • Peer influence hastened diffusion in other organisations • Manuals became less useful and HR more professionalised • Public Service Reforms in Nigeria The response of the human resource function to the global challenges which included changing production techniques, changing demographic profiles, economic and political instability as espoused previously was to take up these trends as challenges which must be met with equally strategic approaches of determined professionals.

13. In all, the need for the adoption of human resource management was very well illustrated and most organisations had adopted the label. At this point, the label Strategic HRM became fashionable because organisations had become strategic in their business methods • The adoption of HRM as a viable label is compatible with the existing management practices such as re-engineering; as well as the deployment of the tool of balanced score card. • Also, Total Quality Management, Research and Communication became popular

14. Re-engineering became a tool for improving business processes (Hammer and Champy); and the balanced score card was an accounting tool which assisted in linking HR interventions with the strategic processes of organisations. Although some large-sized indigenous and multinational companies (especially those with British connections) still adhere to the old labels, many have employed professionals in their personnel and human resource departments to provide the required services in all the functional areas of human resource management.

15. 3.6 Human Resource Accounting Since the late 1980s, it has become fashionable to include contributions of human resource in financial reports. For instance, training costs, share of value added due to employees and specific statements on the role and contribution of management to corporate success or failures appeared in most financial statements. Thus, it is not surprising that the label human resource accounting (HRA) was suggested in some quarters as an influential descriptor of personnel functions. • At that time, HRA was compatible with the prevailing management theory and practice. • The rising management currents include re-engineering, global competitiveness, information and global networking, and the balanced score card tool; • all of which enabled human resource issues to be measured and presented in Financial Statements.

16. In the Nigerian environment where the personnel function is just assuming full professional status, it would be highly surprising if the personnel practitioners would accept HRA as a label for describing their ‘professional’ work, thereby conceding to the accountants what took personnel practitioners a while to achieve. Furthermore at work, the personnel function had suffered relegation from the other professions, especially in finance and accounting. Where personnel units first started, professionals from accounting and finance headed them with the label head of administration or head of finance/ administration or head of accounts and administration.

17. Thus, the social and political compatibility of HRA with the existing personnel practices and professionalization is called to question. It would appear that political incompatibility and unacceptability weighed heavier than the possible relative advantages in the adoption consideration of HRA as a likely successor to HRM. At best, HRA will continue to constitute an element of modern HRM.

18. 3.7 Human Capital Management • Every employee acquires human capital; that is, some set of skills through his experience, exposure, trainings and so on which further increase his/her productivity, eventually benefitting the organization. • Human capital is defined as the collective stock of skills, attributes, knowledge, and expertise of employees which further plays an integral role in increasing the productivity of the organization • HCM is a "set of practices related to people resource management," and is measured as the total development of human potential expressed as organiza­tional value. • HCM is about creating value through people.

19. Is HCM different from HRM? The answers to that question are that HCM: • draws attention to the importance of 'management through measurement', the aim being to establish a clear line of sight between HR interventions and organizational success; • strengthens the HRM belief that people are assets rather than costs; • focuses attention on the need to base HRM strategies and processes on the requirement to create value through people and thus further the achievement of organizational goals; • reinforces the need to be strategic; • emphasizes the role of HR specialists as business partners; • provides guidance on what to measure and how to measure; and • underlines the importance of using the measurements to prove that superior people management is delivering superior results and to indicate the direction in which HR strategy needs to go.

20. The importance of HCM arises from the sheer costs of human capital. In some industries, such as the restaurant industry, employee-related expenditures may exceed 60% of total operating costs. With such significant levels comes an increasing need to measure the value of human capital and how it is changing through HR metrics. • HCM is about the entire value chain. It is circumscribed by the following: • Recognition, review and learning processes • Matching exit with on-boarding process • Regarding everyone as a talent • Tracking career paths • planning succession and managing talents

21. View of a HC Director…. • I cannot pin point when the two organisations started using HCM, as I had not joined each of those organisations then. I also don’t know why they prefer HCM to HRM. I doubt if there is any other reason than just a desire to sound unique. One internet site however defines HCM as: an approach to employee staffing that perceived people as assets (human capital) whose current value can be measured and whose future value can be enhanced through investment. I think organisations that adopt HCM simply want to emphasise the measurement and development dimensions of people management. • Interview with Dr Tope Oni, 30 June 2017.

22. 4. BUSINESS SUSTAINABILITY Sustainability means: “development that meets the needs of the current generation without threatening those of the future generations”. ….initially emphasis was on the environmental impact of business. In recent years, social sustainability (social, ethical behaviour) and human sustainability emerged as two related, but equally important concepts, next to ecological sustainability. Of course, profits remain the core of business performance

23. Business sustainability today covers 3Ps: profit, people and planet, otherwise called the Triple bottom line.

24. It is an accounting framework with three parts: social, environmental (or ecological) and financial. Many organizations have adopted the TBL framework to evaluate their performance in a broader perspective to create greater business value. • From profit and loss to full social accounting…. • For example, if a corporation shows a monetary profit, but their asbestos mine causes thousands of deaths from asbestosis, and their copper mine pollutes a river, and the government ends up spending taxpayer money on health care and river clean-up, how do we perform a full societal cost benefit analysis?

25. An example of an organization seeking a triple bottom line would be a social enterprise run as a non-profit, but earning income by offering opportunities for handicapped people who have been labelled "unemployable", to earn a living by recycling. • The organization earns a profit, which is controlled by a volunteer Board, and ploughed back into the community. The social benefit is the meaningful employment of disadvantaged citizens, and the reduction in the society's welfare or disability costs. The environmental benefit comes from the recycling accomplished • In the private sector, a commitment to corporate social responsibility (CSR) implies a commitment to transparent reporting about the business' material impact for good on the environment and people. Triple bottom line is one framework for reporting this material impact. This is distinct from the more limited changes required to deal only with ecological issues.

26. The triple bottom line has also been extended to encompass four pillars, known as the quadruple bottom line (QBL). The fourth pillar denotes a future-oriented approach (future generations, intergenerational equity, etc.). It is a long-term outlook that sets sustainable development and sustainability concerns apart from previous social, environmental, and economic considerations. • The challenges of putting the TBL into practice relate to the measurement of social and ecological categories. Despite this, the TBL framework enables organizations to take a longer-term perspective and thus evaluate the future consequences of decisions.

27. 5. SUSTAINABLE HRM The emerging definition, sustainable HRM suggests that organizations use their resources, including human workforce, with respect and in a socially responsible manner. However, the literature lacks concrete ‘best practices’ or guidelines to implement or to evaluate sustainable HRM. This lack of instruments to monitor sustainable HRM can be the reason why sustainable HRM practices in organizations are nowadays not common yet. Elkington refers to the triple P-model as a particular manifestation of the balanced scorecard. Measurements are a crucial characteristic of the balanced scorecard and are essential to use the instrument in a correct way. Elkington states that, by providing a framework that requires organizations to measure specific organizational outcomes, they will automatically pay attention to them. In this light, he refers to the fact that scorecards function as triggers for organizations to become more strategic in HRM. Applying the same logic to the three pillars of sustainability, Vanderstraeten (2015) proposed a model that could make it easier for organizations to focus on sustainable HRM tactics.

28. THE HRM COCKPIT

29. HRM Cockpit By providing a structured tool to collect measurements on sustainable outcomes, organizations will automatically pay more attention to these specific outcomes, and be oriented towards more sustainability in their practices. This reflects Vanderstraeten’s ambition to present the HRM Cockpit as a tool to implement, support, and evaluate sustainable HRM. The HR value chain and strategic mapping are usually used to link organizational strategy to organizational performance and outcomes. At the same time, the focus of SHRM may be too narrow for organizations to keep being competitive in a contemporary society and market where sustainability is becoming increasingly important. When evaluating organizational performance, managers should consider environmental, societal, and human capital aspects as well as the financial.

30. The HRM Cockpit relies on two approaches (HR value chain and strategic mapping) in its design. This is because they proved successful in SHRM to implement specific strategies related to desired outcomes. Also, it focuses more on People and Planet as well as Performance as a way to incorporate sustainability in the tool. This results in a model following the logic of input – throughput – output - outcome. The name “HRM Cockpit” intends to head organizations into a sustainable human resource management direction. As a cockpit, it provides HR managers with the necessary tools and procedures to (1) orient the organization in the direction of sustainability, and to (2) monitor whether the organization is still heading towards the desired final destination and ambition.

31. Specific Roles for HR Managers To assist human resource managers elicit the most performance from their employees under a sustainable HRM milieu, the following specific actions are requisite: • The personal recognition and conviction on the part of HR managers of the necessity to embrace the new framework • The action of selling this conviction to top management and their colleagues • Institutionalising an imple-mentation strategy, e.g. the HR Cockpit, and following through to ensure faithful compliance and all levels • Sharing information among other professional colleagues on the relative advantages of this innovation; thereby increasing the prospects of adoption by other firms.

32. 6. PROSPECTS OF ADOPTION OF SUSTAINABLE HRM Human resourcemanagement, strategic HR and Human Capital Management have continued to enjoy current adoption as descriptors of people management. • The prospect of large scale and speedy adoption of the new label (sustainable HRM) would, for convenience, be viewed with the lens of the adoption-diffusion (evolutionary) model.

33. 6.1 Relative advantage Sustainable human resource management tools would simplify the process, institutions and metrics of managing people at work; thus they have a relative advantage over the previous labels. The erstwhile labels may be dropped because they are complex, not comprehensive and inconvenient. For instance the label ‘personnel’ connotes labour or hired hands or a factor of production. The recognition and respect accorded the HR professional by work colleagues took a while to achieve. Nevertheless, the global recognition of the strategic role of HR in organisations as well as the need for measurement of HR outcomes and impacts will serve to encourage greater future adoption of Sustainable HR.

34. 6.2 Compatibility • The emerging label is compatible with organisational strategy and sustainable development; thus accentuating the understanding of HR value-adding roles and acceptance by organisational leaderships. Furthermore, advances in ICT encourages the acceptance of sustainable HRM as a definition/label for people management. • The deployment of ICT in people management has made possible more accurate prediction of selection error in the on-boarding process, the setting of realistic targets, greater accuracy in the measurement of output, and better assessment of the contribution of overall HR to the organisational triple bottom line.

35. The changing demographic profiles of the workforce will very much have implications for the preferences of the new workforce. As the millennials are now assuming leadership in organisations (the oldest is now 40 years old), their penchant for adventure, intellectualism, crave for enquiries and questioning of authority, organisations that are still stuck with any label before HRM and HCM are likely to experience some transformation accompanied with rejection of conservative old-school type labels and adoption of the recently ascending label.

36. Advances in philology and workplace occupational titles and nomenclatures also bear compatibility with the emerging label. Philology is the art of evolving new and unusual terminologies, words or expressions to define known phenomena. In the last ten years or so, the following job titles were not common in organisations recruitment drives: • on-boarding analyst, web designer, cyber journalist, cyber reporter, on-line chronicler, human resource information engineer, HR Specialist – Learning and Development, HR Communications Manager, Field HR Manager, VP of Teammate Success (HR), People Analytics Lead, etc. Others are Chief Flavours Officer, Galactic Viceroy of Research Excellence, Fashion Evangelist, Paranoid in Chief, Hacker-in-Residence, In-house Philosopher, Director of Sound Design, Chief Troublemaker, Digital Prophet, Chief Storyteller, Chief Evangelist, Chief Heart Officer, Dean of Pizza, etc.

37. The global economic situation furthermore supports the acceptance of Sustainable HRM as a label of the immediate future. The world economic conditions that were prevalent in the 1990s have not abated or may have been accentuated in some countries. The response of industry leaders to the global indices was the adoption of HRM techniques, which is being refined for better organisational performance since the 1990s. Thus, there seem to be very little dynamics in the world economy to cause a rejection of sustainable HRM as the new definition of people management. • However, some prospective adopters see contending labels or innovations as mere fashion or fad that are destined to fade away over time. Popular previous labels in this category include talent management, human resource accounting, human value chain, employment relations, etc. Adoption decision by those who hold such views seem to be adversely affected.

38. 6.3 Number and influence of current adopters • Some organisations especially in the conservative west, still adhere to labels such as personnel administration or personnel management. However, the global trend today is for labels and definitions such as HRM, HCM and sustainable HRM. • Diffusion is infectious; the more the merrier. The sheer number of organisations, local and transnationals, international NGOs, the United Nations group, etc. that have continued to adopt the sustainability concept, is indicative of a continued presence of large adopters in the future.

39. Furthermore, the emerging trend seems to unwittingly support the moves among some competing institutes/ professional bodies to hide under the extant and new definitions to seek legal approval in their bid to struggle over the space that is being occupied legally by registered bodies under the old name of personnel management. • This is a current challenge to the CIPM as new institutes such as Strategic Human Resource Management Association, Centre for Training and Development, Society for Human Resource Management, etc. are now very much competitive rather than complementary in their strategies and outlook. It may not be unthinkable that a group may emerge with the name Sustainable HRM Association. However, I do not think that this challenge should cause a change in the name of the CIPM.

40. Furthermore, local and international organisations have been moving away from the older labels even in naming their organisations. Recently, the International Industrial Relations Association changed its name to International Employment Relations Association in recognition of the changing nature of work processes and regulations; The Department of Industrial Relations and Personnel Management at the University of Lagos changed its name to Employment Relations and Human Resource Management. These developments being largely propagated in the industrial and knowledge sectors, may threaten the continued adoption of the older labels and fast-rack the future acceptance of the emerging label.

41. 7. CONCLUDING REMARKS • Employing an evolutionary theme, this paper demonstrates within a framework of adoption-diffusion model that the reigning label for describing management of people in organisations is HRM, while sustainable HRM is emergent. However, so long as ‘fashionable’ management thoughts and practices may evolve in the future, more auspicious labels may be embraced. • It is also revealed that, the orientation and operational skill of tomorrow’s human resource managers would continue to be versatility, aided by the computer and highly flexible user-friendly, socially relevant, ecologically friendly and economically viable human resource packages. The size of future HR departments is therefore expected to be smaller. Yet, the activities of such offices will be intensely heavy requiring creativity and profuse innovations, and new job titles.

42. With appropriate orientation practices, HR Managers are advised to create the right organisational culture that would promote the adoption and institutionalisation of sustainable HRM; thus providing a groundwork for greater acceptance in the future. • The core ingredient or deliverable of Sustainable HRM is the Triple bottom lines (3P). Nevertheless, if prevailing management thoughts and practices assume their historical states of transience or constant mutation, then more appropriate or fashionable labels may again evolve in time with the dictates of the prevailing and popular management practices.

43. Thank you for your attentionenjoy the rest of the event