CHAPTER ONE

OVERVIEW OF HUMAN RESOURCE

MANAGEMENT
1.1 Human Resource Management
Definition
 Human Resource Management (HRM): is the planning,
organizing, directing, and controlling of the procurement,
development, compensation, integration, maintenance and
separation of human resources to the end that individual,
organizational, and social objectives are accomplished.
Edwin B. Flippo.

 HRM is defined as a strategic and coherent approach to the

management of an organization’s most valued assets – the
people working there who individually and collectively
contribute to the achievement of its objectives.
 Cond…
 “The function performed in organizations that facilitates
the most effective use of people (employees) to achieve
organizational and individual goals.” John Ivancevich
 HRM as “A process consisting of four functions -
acquisition, development, motivation, and maintenance
of human resources.” (David. A. Decenzo and Stephen P.
Robbins)
 The policies, practices, and systems that influence
employees’ behavior, attitudes, and performance. Noe,
Hollenback, Gerhart & Wright.
 In past it was known as
 Personnel Administration
 Personnel Management
3
 In sum, Human Resource Management

 Focuses on people aspect of management

 Is a management function that helps managers’ recruit,
select, train and develop members for the organization.
 Emphasizes the need to think strategically about people
as a key resource.
 Is a proactive rather than reactive approach
 Implies that HR policies and programs should be
integrated into the business strategy and also contribute
to it.
 Its activities/functions are integrated/interrelated.
 In HRM activities, top mgmt involvement is
important/critical.
 Designs mechanisms to integrate the goals of the
organization, employees and the society.
 Objectives of Human Resource Management

 Effective utilization of human resources in the

achievement of organizational goals.
 Recognition and satisfaction of individual needs and
group goals.
 Provision of maximum opportunities for individual
development and advancement.
 Maintenance of High morale of the employees in the
organization.
 Continuous strengthening and appreciation of human
assets.
Cont.…

 Specifically, HRM is concerned with

achieving objectives in the areas
summarized below.

 Human capital management

 Knowledge management
 Reward management
 Employee relations
 Meeting diverse needs
Activities of HRM: 4 Major
Categories
The Acquisition The Development
of of
Human Resources Human Resources

The Rewarding The Maintenance

of of
Human Resources Human Resources

7
 Sub Functions

 The Acquisition
 The Development of
of Human
Human Resources
Resources
• Appraising
• Planning
• Analyzing Jobs
• Training

• Recruitment • Developing

• Selection
8
 Sub Functions Contd…..

 The Rewarding  The

of Maintenance of
Human Human Resources
Resources  Employee Benefits
 Compensating  Safety & Health

 Wages & Salaries  Labor Relations

 Incentives
9
Functions and sub functions of Human Resource Management
 Scanning, Who’s Responsible?
Analyzing & • Top management
Planning • Line managers
• Internal environment • HRM department
• External • Employees
Internal environment
Environment • Human resource
• Top planning
• Job analysis
management’s
goals and values
Staffing
• Organizational • Recruiting
strategy • Selecting General Goals Specific Goals Bottom Line
• Organizational • Attract • Productivity • Survival
• Retain • Quality of work •
culture Appraising
• Gathering data • Motivate life and Competitivene
• Structure • Retrain
• Using data employee well- ss
• Size being • Growth
• Legal compliance • Profitability
Compensating
• Total compensation • Gaining • Adaptability
• Performance based competitive
External Envt. • Indirect advantage
• Work force
• Economy/ market
Improving flexibility
• Demographics
• Training and
• Culture
development
• Laws • Organizational
• Competitors improvement
•Research
Management
Establishing & Systems
Maintaining • Motivation
• Employee rights • Leadership
• Safety and health • Team work
• Union-management • Communication 11
relationships
 Importance of Human Resource Management

 If you commit personnel mistakes you will encounter the

following mistakes:
 To hire the wrong person for the job
 To experience high turnover
 To find out people not doing their best
 To waste time with countless and useless interviews
 To have the company sued (charged) for discriminatory actions.
 To be quoted under bad example of unsafe practices
 To have some of your employees think their salaries are unfair
and inequitable relative to others in the organization
 To allow a lack of training to undermine your department's
effectiveness and
 To commit any unfair labour practices.
 Cont.
…
 On the other hand, if managers properly apply the
concepts and functions of HRM, it will be the best tools to
achieve “competitive advantage through people”. These
outcomes are the following:
 Creation of a better image
 More Profits
 Higher Productivity
 More Competent People
 Better Generation of Internal Resources
 More Team-work, Synergy and Respect for Each Other
 More Problem Solving
 Higher Work-commitment and job Involvement
 Growth and Diversification
 Better Developed Roles
 HR Management’s Contributing Role
HR management efforts designed to enhance
organizational productivity
 Organizational restructuring involves eliminating
layers of management and changing reporting
relationships, as well as cutting staff through
downsizing, layoffs, and early retirement buyout
programs.
 Redesigning work often involves having fewer
employees who work longer hours and perform
multiple job tasks..
 Aligning HR activities means making HR efforts
consistent with organizational efforts to improve
productivity.
 Impact of the HR Manager on
Organizational Performance

1. Reducing unnecessary overtime expenses by increasing

productivity during a normal day
2. Staying on top of absenteeism and instituting programs
designed to reduce money spent for time not worked
3. Eliminating wasted time by employees with sound job design
4. Minimizing employee turnover and unemployment benefit
costs by practicing sound human relations and creating a
work atmosphere that promotes job satisfaction.
5. Installing and monitoring effective safety and health
programs to reduce lost-time accidents and keep medical
and workers’ compensation costs low.
1-15
Contd…
6.
Properly training and developing all employees to improve their
value to company and do a better job producing and selling high-
quality products and services at lowest possible cost
7.
Decreasing costly material waste by eliminating bad work habits,
attitudes and poor working conditions that lead to carelessness
and mistakes
8.
Hiring the best people available at every level and avoiding
overstaffing
9.
Maintaining competitive pay practices and benefit programs to
foster a motivational climate for employees
10.
Encouraging employees to submit ideas for increasing
productivity and reducing costs
11.
Installing human resource information systems to streamline and
automate many human resource functions. 1-16
 GOALS OF HRM

1. Managing people as assets that are fundamental to the

competitive advantage of the organization.
2. Aligning HRM policies with business policies and corporate
strategy.
3. Developing a close fit of HR policies, procedures and systems
with one another.
4. Creating a flatter and more flexible organization capable of
responding more quickly to change.
5. Encouraging team working and co-operation across internal
organizational boundaries.
6. Creating a strong customer-first philosophy throughout the
organization.
7. Empowering employees to manage their own self-
development and learning.
8. Developing reward strategies designed to support a
performance-driven culture.
9. Improving employee involvement through better internal
communication.
 The Philosophy of HRM

Mutual goal: The organization needs individuals for fulfillment of

their goals and individual needs organization to develop and grow.

Mutual respect: Which brings out the importance of respect by

stating that “Give respect and take respect”.

Mutual rewards: HRM believes in the mutual reward system.

Organization’s reward is development and growth. Individual

rewards are in the form of financial and non-financial incentives

and benefits.

Mutual Responsibilities: The individuals and the organization are

responsible mutually. This sense of responsibility will lead to

effective utilization of teamwork and leads to excellent growth.

 Roles of Line Managers and HR Professionals


Line manager’s role
•Line manager’s direct employee’s day-to-day tasks. From a
human resource management perspective, line managers are
the main people responsible for implementing human
resource management practices and providing human
resource professional with necessary input for developing
effective practices.
•In general, line managers:

Responsible for effective use of people in organization;

Need to understand human behaviour;

Need to be knowledgeable about systems and processes that
help build a committed workforce and

Need to be aware of constraints.
 The basic roles of line managers are the following:

• Interview job applicants,

• Placing the right person on the right job
• Socializing new employees to the organization
• Training employees for jobs that are new to them
• Improving the job performance of each person
• Provide and communicate job performance ratings
• Gaining creative cooperation and developing
smooth working relationships
• Interpreting the company's policies and procedures
• Recommends salary increases
• Controlling labour costs
• Developing the abilities of each person
• Creating and maintaining departmental morale
• Protecting employees' health and physical
condition
 HR professional’s role

 Human resource professionals may evaluate the

usefulness of employment tests, the success of
training programs, and the cost effectiveness of human
resource management outcomes, such as selection,
turnover, recruiting, and so forth.

 Human resource professionals provide services to line

management, especially in the fields of employment,
recruitment, training, salary administration, employee
relations, health and safety and the management of
human resource information systems.
Cont..

 Human resource professionals’ consult/ advise on

human resource management related topics -
human resource management policies, procedures,
and methods and on the approach that should be
adopted to deal with personnel and industrial
relations problems.
 Examples of HR-Related Ethical Misconduct Activities

 Compensation  Employee regulations

• Misrepresenting Relations
hours • Employees lying to Staffing and Equal
and time worked supervisors and Employment
• Falsifying work co-workers • Discriminatory
expense reports • Executives/ favouritism in
• Personal bias in managers e- hiring and
performance mailing false promotion
appraisals and pay public information • Sexual
increases to customers and harassment of
• Deliberate vendors other employees
inappropriate • Misusing/stealing • EEO discrimination
overtime organizational in recruiting and
classifications assets and interviewing
 individual Assignment
1. Write in detail about the history of human resource
management. Your literature should include: the time
period, major contributors, and trends in approach.
(Not less than 3 pages). Indicate appropriate reference
for your work.

2. What are unethical HRM practices that frequently

happen in organization? What do you think about the
causes? If you are a manager of such organization, how
will you deal with them? (Not less than 3 pages).
Indicate appropriate reference for your work.
End of Chapter One