It is important to distinguish human relations management theory from the broader concept of human resource management. The latter term is difficult to explain because it means something different in every context in which it is used. On the other hand, the theory of human relations focuses specifically on the quality of relationships between managers and subordinates in an organization.
Changing Style of Management
Human relations management theory comprises important proof of the changing style of management in today's business organizations. In the 21st century, employees who are not managers occupy important roles. They have more authority than line workers and non-managers of the past and make decisions without consulting managers, in part because the number of managerial layers in an organization has decreased in this new century and also because machines and computers perform many tasks that workers used to perform.
This theory is also a theory of management in itself. It is a focus on the human dimension of employees rather than just their benefits as human capital, or assets, to an organization. Managers value their relationships to their direct reports, and they place a high value on how employees feel about their membership in the organizational culture. Employees make a commitment to achievement, and managers concern themselves with achieving a high level of worker morale.
Human relations management involves investment in employees. Workers don't just enjoy a high degree of involvement in decision-making, empowerment and strong worker morale, they also get to improve as professionals and increase their value to the organization. An employer makes considerable financial investments in employee training and professional development, preparing employees to assume larger roles -- such as managerial and technical expert roles -- in the future.
Every employee is viewed as an important stakeholder of the firm. Managers focus on getting employees to buy into the success of the firm because it benefits them as individuals and the organization as a whole. Every change that will affect employees is studied for its impact on human relations. Therefore, managers will work through employees, getting their support, in order to implement changes. Employees must become a part of every change for the organization in order for it to experience success.