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)

When you finish studying this chapter, you should be able to:

Answer the question “What is human resource management?”

Why are we concerned about HRM

Overview of HRM Activities Identify the environmental factors that affect human

resource management. Give examples of human resource management’s role

as a strategic partner

Human Resource Management “HR” refers to people in organization.

Almost all Managers are involved in carrying out HR activities

The main purpose of these activities are to facilitate & improve the productive contribution of employees in achieving organizational goals & objectives.

“Assets make things possible,

people make things happen”.

Human Resource Management

Management processThe bottom line of managing: “Getting

results” The five basic functions of planning, organizing, staffing,

leading, and controlling.

Human resource management (HRM)Managerial function that tries to match an

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

Human Resource Management The policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening, training, rewarding, appraising, and providing a safe and fair environment to your company & employees

Strategic Human Resource Management The linking of HRM with strategic goals and objectives in

order to improve business performance and develop organizational cultures that foster innovation and flexibility.

Formulating and executing HR systems—HR policies and activities—that produce the employee competencies and behaviors the company needs to achieve its strategic aims.

Measuring HR’s Contribution Strategy

The company’s long-term plan for how it will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.

HR managers today are more involved in partnering with their top managers in both designing and implementing their companies’ strategies.

Top management wants to see, precisely, how the HR manager’s plans will make the company more valuable.

The Management Process

ORGANIZATIONALGOALS

Planning

Leading

Cont

rolli

ng

Orga

nizin

g

INFORMATION RESOURCES

PHYSICAL RESOURC

ES

FINANCIAL

RESOURCES

HUMAN RESOURCES

Management in Organizations

Inputs from the environment• Human resources• Financial resources• Physical resources• Information resources

Planningand decision

making

Leading

Organizing

Controlling

Goals attained• Efficiently• Effectively

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

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”

Functions of HRM Determining the nature, functions of each employee’s job

(Conducting job analyses) Planning labor 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 & other organizations. Allow a lack of training to undermine your department’s

effectiveness Commit any unfair labor practices

Why Is HRM Important to All Managers?

EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT

StaffingEmployee & Labor

Relations

Safety& Health

Compensation& Benefits

Human Resource

Development

HR ManagementFunctions

Legal consideration Labor Force

SocietyTh

e Ec

onom

yte

chno

logy

Customer Competition Share holder Unions

OPSMkt

Fin. O F A

Environment (Challenges) of HRMBrain drain

Turn over

Budget downsizing

The External EnvironmentComponents

Labor Force Legal 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

The External Environment: Proactive Versus Reactive

Reactive Response: Action taken in response to change

Proactive Response: Action taken inanticipation of change

The Internal Environment Limited budgets Trends of Downsizing Workforce Diversity High Turn over Restructuring Internal Unions

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

HR’s Role in Formulating Strategy    HR participates in the strategy

formulation process by supplying information regarding the company’s internal human strengths and weaknesses

HR’s Role in Executing Strategy  

HR is heavily involved in the execution of most firms’ downsizing and restructuring strategies, through out-placing employees, instituting pay-for-performance plans, reducing health care costs, and retraining employees.

The Strategic Future of the HR Department  

Human resource departments will face further downsizing and “reengineering, as they face pressure from senior management to add value to the organization or have their functions contracted out.”

HR Professionals’ Responsibilities

Establish HRM policies

Develop/choose HRM methods

Monitor/evaluate HRM practices

Advise/assist managers on HRM-

related activities

Productivity (increasing performance)

Operations (cohesive linking)

Relationships (between diff. levels of mgt / dept)

Conflict (help handling conflict)

Stress (managing stress)

Reward systems (help motivate people)

HRM can help manage…

Effective HRM

EffectiveOrganization

Functions (Scope) of Personnel Policy/HRM

1.Staffing

Functions Functions of Personnelof PersonnelPolicy/HRMPolicy/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