Introduction to Human Resource Management

Chapter 1

Reference Books:

Human Resource Management ( Gary Dessler)

Human Resource Management (Mondy)

Human Resources and Personnel Management ( Keith Davis)

Internet

Resource Person: Furqan-ul-haq Siddiqui

The Management

ORGANIZATIONALGOALS

Planning

Leading

Con

trol

ling

Org

aniz

ing

INFORMATION RESOURCES

PHYSICAL RESOURC

ES

FINANCIAL

RESOURCES

HUMAN RESOURCES

Management in Organizations

Inputs from the environment

• Human resources

• Financial resources

• Physical resources

• Information resources

Planning

and decision

making

Leading

Organizing

Controlling

Goals attained

• Efficiently

• Effectively

HRM

Human

Resource

Management

Human Resource Management Managerial function that Managerial function that

tries to match an tries to match an organization’s needs to the organization’s needs to the skills and abilities of its skills and abilities of its employees.employees.

“Assets make things possible,

people make things happen”.

Human Resource Management

Human Resource Management (HRM) is the approach of Management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. In simple sense, HRM means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirements to achieve its goals effectively & efficiently.

Organizational Performance

Efficiency: A measure of how well resources are used to achieve a goal

“Doing Things Right”

Effectiveness: A measure of the appropriateness of the goals chosen (are these the right goals?), and the degree to which they are achieved

“Doing the Right Things Right”

Efficiency versus Effectiveness

Efficiency:Operating in such a way that resources are not wasted

Effectiveness:Doing the right

things in the right way at

the right times

SuccessfulSuccessfulManagementManagement

Functions of HRM Determining the nature, functions of each employee’s job Planning HR needs and recruiting job candidates Selecting job candidates Orienting and training new employees Managing wages and salaries (compensating employees) Providing incentives and benefits Appraising performance Communicating (interviewing, counseling, disciplining) Training and developing managers Building employee commitment

Staffing

HUMAN RESOURCE HUMAN RESOURCE MANAGEMENTMANAGEMENT

FUNCTIONSFUNCTIONS

Employee& Labor

Relations

Safety &Health

Compensation& Benefits

Human Resource

Development

Some Common Consequences Caused by Poor HRM Practices

Hire the wrong person for the job Experience high turnover/dissatisfaction Have your people not doing their best Employees will not know that what to do & how to do Have your company in court because of

discriminatory/unlawful actions Have some employees think their salaries are unfair and

inequitable internally & externally Allow a lack of training to undermine your department’s

effectiveness Commit any unfair labor practices

Why Is HRM Important to All Managers?

Functions of HRM

1.Staffing

Functions Functions of HRMof HRM

5.Employee& Labor

Relations

4.Safety &Health

3.Compensation& Benefits

2.Human Resource

Development

1.Staffing Process through which an organization ensures that

it always has the proper number of employees with the appropriate skills in the right jobs at the right time to achieve the organization’s objectives.

It includes• Personnel planning• Job Analysis• Recruitment• Selection

2.Human Resource Development Major Personnel function that consist not only of

T&D but also individual career planning, developing activities and performance appraisal.

HRD is composed of• Training• Development• Career planning• Career Development• Performance Appraisal

3.Compensation & Benefits Consist of all direct, indirect, financial & non

financial rewards given to employees in return of their services.

• Pay - Money that a person receives for performing a job

• Benefits – Additional Financial rewards in addition to base pay including paid vocations, sick leave, insurance etc.

• Non financial Rewards The Job The Environment

4. Safety & Health Safety involves protecting employees from injuries

caused by work related accidents. Health refers to employee’s freedom from physical or emotional illness.

5. Employee & Labor Relation Deals with employee employer relationship &

dealing with labor unions

Successful HRMSuccessful HRM

Organization

Employee

Society

Good for…

Competitive Advantage

Competitive advantage means “any factors that allow an organization to differentiate its product or service from those of its competitors to increase market share”

There is greater recognition that distinctive competencies are obtained through highly developed employee skills, distinctive organizational cultures, management processes, and systems.

Competitive Advantage HR as

Effective HRM

Effective HRM

EffectiveOrganization

EffectiveOrganization

Managing Human Resources

Purpose of HRM is;

To attract

To Develop

To Motivate and

To Keep talented people

To achieve goals

Challenges?

EXTERNAL ENVIRONMENT

INTERNAL ENVIRONMENT

StaffingEmployee

& Labor Relations

Safety& Health

Compensation& Benefits

Human Resource

Development

HR ManagementFunctions

Legal consideration Labor Force

Socie

ty

Th

e E

con

om

yte

ch

nolo

gy

Customer Competition Share holder Unions

OPSMkt

Fin. O F A

Environment (Challenges) of HRMB

rain

dra

in

Turn over

Budget downsizing

The External EnvironmentComponents

Labor Force legislation Society ( Social

Responsibility) Unions Stakeholders

Competition Customers Technology Economy Brain-drain Rapid change

Open System- An open system is one that is effected by environments

Firm has little control over external factors

Legislation• The Government regulation related to

HR & labor force • Employment laws Laws and Regulations

• for safety• Minimum wage rate • EEO• Working hours• Immigrants• Child Labor• Women

Pakistan Pakistan's first minimum wage was implemented in

1992 and does not apply to agricultural workers and Newspapers.

The first minimum wage was 1,500PKR (~US$24.60) per month.

It was raised in 1996 to 1,650PKR (~US$ 27.10),in 1998 to 1,950PKR (US$ 32)in 2006 to 4000PKR(US$ $66)and is currently, as of 2008, at 6000PKR per month.

International Dimension/ Globalization

The extent to which an organization is involved in or affected by business with other countries.

The internationalization of products and services of a firm heavily influence organizational HR decisions.

Economic Environment The overall strength & vitality of the economic

system in which organization operates. Factors that affect buying power and spending patterns of organization & its customers/suppliers.

Trends of interest: Inflation Interest Rates Employment ratios Per Capital Income Purchasing power of customers Stage of Business/Economic Cycle (prosperity, recession,

depression and recovery)

•Labor Force- it’s the pool of individuals who are willing to work for a company.

This map shows the global

distribution of labor force in 2006 as a percentage of the top market

(China - 795,300,000).

The Internal Environment Limited budgets Trends of Downsizing Workforce Diversity High Turn over- is the rate at which an employer gains

and loses employees or the rate of traffic through the revolving door."

Restructuring-the act of reorganizing the legal, ownership, operational, or other structures of a company for the purpose of making it more profitable, or better organized for its present needs.

Internal Unions

Proactive Versus Reactive

Reactive Response: Action taken in response to change

Proactive Response: Action taken inanticipation of change