First of all, to understand the role of HRM, it is important to take a short glimpse at the conditions under which this function was developing. In reality, the post-war Labour government of the 950s was committed to combating unemployment, and the respective agencies were greatly interested in the functioning of the labor market and labor relations between employers and employees. In the 960s-970s, there emerged a new challenge in the organizations, which can be categorized as diversity management. The series of regulations, setting equal opportunity, like the Equal Pay Act of 970 and the Sex Discrimination Act of 975, determined the need for turning these legislations into corporate practices. At that time, in industrial relations, there existed two forms of bargaining: the formal system of industry-level bargaining and the informal system of workplace or organizational bargaining (Bratton & Gold, 200, p.0). As organizations were growing and seizing entire continents, the need for formalizing the latter form of negotiations increased as well, given the large number of employees, who sought to be treated equally and without any bias or prejudice. The broad scope of responsibilities, associated with corporate policy-making and policy-defining subsequently allowed functional separation of HRM into a relatively autonomous department (Bratton & Gold, 200; Beardwell & Holden, 2003; Pfau and Kay, 2002).
Nowadays, there is a notable tendency for narrowing and deepening the field of professionalism in organizations, as companies increasingly more often need employees with education and experience in the concrete area of practice. As the market becomes diversified, companies objectives are becoming diversified and complicated. In this sense, HRM contributes to the realization of business strategy through development and successful implementation of high-performance work practices, particularly those concerned with the job and work design, flexible working, resourcing (recruitment, selection and talent management), employee development (increasing skills and extending the skills base), reward and giving employees a voice (Armstrong, 2006, p.24). Performing this task involves a wide range of responsibilities that include job analysis, human resource planning, selection and recruitment, performance appraisal, career planning, and professional development of employees. Job analysis defines a job through the concrete tasks and duties as well as qualifications and skills needed to succeed in this role. In this sense, human resource specialists examine the internal environment, looking for the responsibilities, looking for tasks and responsibilities, which are underrepresented, yet important in the organization (Armstrong, 2006). Human resource management as a function also implies consideration of staffing levels to meet projected demand. Decisions to add, reduce or reallocate staff is made accordingly (Tracey, 2004, p.59). Selection and recruitment refer to the processes of finding and choosing the candidate who would manage the
assignments, indicated in the job design, most successfully. Candidate assessment consists of several stages, which include such practices as personality assessment, stressresistance evaluation, and analysis of the persons professional eligibility to the job. When these four tasks are completed, the company obtains an employee, which fits the expectations of the business unit this person is entering. Moreover, at the organizational level, the smoothly performing HRM department allows ensuring each employee receives an appropriate workload and the existing human capital is cost-effective so that each employee brings either direct or indirect profit. Furthermore, HRM functional department allows employees to maintain and enrich their professionalism by planning their professional growth and administering training and additional education. According to Pfau and Kay (2002), the provision of training and development are important tools in ensuring staff are equipped to provide the quality and type of service the organization is aiming to achieve. Examples of training and development activities include running in-house courses, setting up job rotations and mentor schemes (Pfau & Kay, 2002, p. 60). Regular updating of personnels skills and knowledge base is a response to the constantly changing business environment, which creates new difficulties and opportunities and makes it necessary for the organization to be flexible enough. HRMs tactics of adjusting employee skills to external demands make this flexibility possible. The usefulness of the corresponding HR practices was measured by Patterson and Thompson in two independent studies. Patterson examined the relationship between the overall business performance of the company and the use of HR-led job design, job planning, recruitment, and employee development and his study suggests that Hr practices explained significant variations in profitability and productivity (9 % and 8 % respectively) (Armstrong, 2006, p.22). Two HR practices were found particularly influential: ) job design and formation of formal teams and 2) development of employee skills. Thompson, in turn, studied the effect of the implementation of practices like job rotation, teamwork, and sophisticated recruitment in more than 600 UK aerospace corporations. The results suggest that the variety of HR practices and the extent of their use is the major distinction between successful establishments and those with poor performance (Armstrong, 2006). However, the major critical notice to these two investigations is the failure of taking into consideration the other possible factors contributing to the firms success, e.g. well-defined and clearly communicated strategies of each business unit, strong PR strategy, and so forth. According to the contingency approach (Lee & Kim, 999), HRM is sensitive to the statement and execution of the overall corporate strategy, so excellent performance and productivity might be associated with the order in all business units, which is not necessarily established by the HR function.