PRETOR BUSINESS COLLEGE

HUMAN RESOURCE MANAGEMENT

LECTURE NOTE

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 CHAPTER ONE

AN OVERVIEW OF HUMAN

RESOURCE MANAGEMENT

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 Objectives of the Chapter
 After completing this chapter you would be able
to:
Define the concept of human resource management.

Understand human resource management functions

Identify Characteristics of HRM

Understand the Importance of HRM

Identify the objectives of human resource management

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 Discussion Question
 Can HRM be an important strategic tool?
 Can HRM help establish an organization’s
sustainable competitive advantage?

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 Introducing HRM

Organization and HR
Organizations are human associations for
achieving goals.
Organizational effectiveness largely
depends on the performance of people
working in organizations.

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 Cont…nd

 To achieve organizational objectives, there is a need to

coordinate the basic resources of the organization, i.e.
 money; material (raw or semi-processed);
 machinery (or fixed assets or plants) and
 men/women (or human resources).

 It is the people who staff and manage the

organization.

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 Cont…nd
 It is understandable that the Human Resource is an
important (critical) resource in coordinating the
non human resources.
 The global economy has become increasingly
changing and demanding. In order to stay
competitive companies need to have, build, and
sustain resources that are valuable, and hard to
copy.
 Because talent is rare, valuable, difficult to imitate,
and hard to substitute, organizations that better
attract, select, and retain this talent should
outperform those that do not.
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 Cont…nd
 Better people achieve better results.
 People possessing energy and physical strength
alone are not human resources.
 People become human resources only when they
acquire competencies, such as:
 knowledge,
 skills,
 attitudes,
 experiences and
 potential for growth.

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 Cont…nd

 Besides, all tasks depend on how well the human

resource is managed.
 If the human resource is managed improperly, the
result would be ineffective.
 So, management of human resource is central and
critical task in any organization.

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 Cont…nd

 The success or failure of an organization is

largely dependent on the
caliber/ability/quality of the people working
therein.
 Without positive and creative contributions
from people, organizations cannot progress
and prosper.
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 Definition of HRM

What is HRM?
 Let us understand it by dividing the term into
its sub parts.
o Human: people, us
o Resource: assets for organizations
o Management: coordination and control of
resources/activities to achieve set goals.
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 Cont…nd
Human Resources
 Refer to the knowledge, skills, creative abilities, talents,
and aptitudes obtained in the population.
 For example, it is possible to say that the human resource
of this country is poor as long as the knowledge and skills
that are relevant and critical are lacking.
 It is the sum total of the inherent abilities, acquired
knowledge and skills as represented in the talents and
aptitudes of its employees.
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What is Human Resource Management?
Definition
 HRM is the process of achieving organizational objectives
by acquiring, developing, motivating, retaining, separation
and properly using the HRs in an organization.
 This definition recognizes a process consisting of four
functions. These are:
A) Acquisition/Getting employees/
B) Development/Preparing employees/
C) Motivation
D) Maintenance/Keeping?

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A) Acquisition/getting employees/ the right number,
the right kinds of people/
o Demand for and supply of labor
o Human Resources planning/ estimating future
manpower needs
o Recruiting

o Selecting
o Socialization/ joining in any new organization
o Placing

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 Cont…nd
B) Development/Preparing employees/
 Employee training:
Skill development and changing attitudes
among workers.
Management development:
- Knowledge acquisition
- Enhancement of managers abilities.
Career development:
 Effort to match long term individual and
organizational needs, empowering people,
leading by example, and continued education.
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 Cont…nd

C)Motivation/Activating/stimulating employees
o Linking rewards to performance
o Performance evaluation
o Compensation and benefits
o Job satisfaction
o Reward systems
D)Maintenance/Keeping/retaining employees
o Working conditions
o Employee relations, laws, rules, regulations,
agreements, awards

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 Cont…nd

 HRM broadly defined as the policies, practices,

procedures, and systems that influence the behavior,
attitudes, values, and performance of people who
work for the organization.
 HRM is concerned with the most effective use of
people to achieve organizational and individual goals.
It is the way of managing people at work, so that they
give their best to the organization.
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Reflective Question
What are the human resource
management functions or activities?

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 HRM Functions
1.Human Resource Planning/HRP/
 The process of reviewing human resource
requirements to ensure that the required
number of employees, with the required
skills & knowledge are available when they
are needed.
2. Recruitment
 The process of attracting people and
encouraging them to apply for vacant jobs
with the organization.
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Cont…nd
3. Selection
 The process of choosing and hiring from a
group of applicants the individuals best suited for
the vacant job.
4. Orientation
 The process of familiarizing new employees
with:
o the organization’s vision & mission
o their jobs, and
o their work unit

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Cont…nd
5. Training & Development
Employee Training
 The process of improving the performance of employees
in their present jobs. It is the act of increasing the
knowledge and skills of an employee for doing a
particular job.
Management Development
 The growth of managers ability through the provision of
learning. It involves learning opportunities aimed at the
individual growth. Training is usually related to
operational or technical employees while development is
for managers and professionals.
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 Cont…nd
6. Compensation
 The management of every type of reward that
employees receive in return for their services.
Every type of rewards individuals receive in
exchange for performing organizational task.
 It refers to all forms of pay or rewards going to
employees and arising from their employment:
direct financial payments (in the form of wages,
salaries, incentives, commissions and bonuses),
and indirect payments (in the form of financial
benefits like employer paid insurance and
vacation).
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7. Performance Evaluation
 A formal system of periodic review and
evaluation of employees job performance.
 It is the process of determining and
communicating to an employee how he or she is
performing the job & ideally, establishing plan
of improvement.
8.Safety and Health
Safety
 Protecting employees from injuries caused by
work related accident
Health
 The employees freedom from illness and their
general physical and mental well-being
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Cont…nd
9.Promotion, transfer, demotion,& separation
 High performers may be promoted or
transferred to help them develop their skills,
while low performers may be demoted,
transferred to less important positions, or even
separated/discontinuation.
10.Human Resource Research
 HR research is a systematic way of gathering
recording, analyzing and interpreting data for
HRM decisions. Advancement of
technology /methods.
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 Characteristics of HRM

1. Comprehensive Function
 Human Resource management is concerned with
managing people at work.
 It covers all type of people in the organization.
 It applies to workers, supervisors, officers,
managers and other type of personnel.

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 Cont…nd

2. People- oriented
 It is the process of achieving the best fit
between individuals, jobs, organizations and
the environment.
 It is the process of brining people and
organizations together so that the goal of each
are met.
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 Cont….nd

3. Action oriented
 Human Resource Management focuses on action

rather than on record keeping or procedures.

 It stresses the solution of personnel problems to

achieve both organizational objectives and

employee’s personal goal.

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Cont…nd

4. Development Oriented
 Human Resource Management is concerned with
developing potential of employees so that they got
maximum satisfaction from their best effort to the
organizations.

5. Future Oriented
 Human resource management is concerned with helping
organizations to achieve its objectives in the future by
providing competent and well motivated employees.
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 Cont…nd
6. Challenging Function
 Managing of Human Resource is a challenging job due to
dynamic nature of people.
 People have sentiments and emotions so they can not be
treated like machines. It is, therefore, necessary to handle
them tactfully.

7. Continuous Function
 Management of human resource is an on going or never
ending exercise rather than a ‘one shot’ function.
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 Cont…nd

8. Pervasive Function
 HRM is inherent in all organizations and at all levels.

9. Science as well as an Art

 HRM is a science as it contains an organized body of
knowledge consisting of principles and techniques.
 It is also an art because it involved application of theoretical
knowledge to the problems of human resource.

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Cont…nd

10. Globally oriented

 Human Resource Management is not only an
Ethiopian or American function or activity; it is
being practiced efficiently and continuously in all
over the world.
 Each and every manager is involved with human
resource function.

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 Importance of HRM
 The significance of HRM can be discussed in four
dimensions: corporate, professional, social and national.

1. Significance for an Organization

 HRM can help an organization in achieving its goals more
efficiently and effectively in the following ways:
 Attracting and retaining the required talents through
effective HRP, recruitment, selection, placement,
orientation, compensation and promotion polices.

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 Importance of HRM, Cont…nd

 Developing the necessary skill and the right

attitudes among employees through
training, development, performance
appraisal etc

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 Importance of HRM , Cont…nd

 Securing willing cooperation of employees

through motivation, participation, grievance
handling, etc.
 Utilizing effectively the available human resource.
 Ensuring that the enterprise will have in future a
team of competent and dedicated employees.

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 Importance of HRM, Cont..nd
2. Professional significance
It contributes to professional growth in the following
ways:
 Provide maximum opportunities for personal
development of each employee
 Maintain healthy relationship between individuals, and
different work groups
 Allocate work properly

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 Importance of HRM, Cont…nd

3. Social significance
 Provide suitable employment that provides social and
psychological satisfaction to people.
 Maintaining a balance between the jobs available and
the jobseekers in terms of numbers, qualifications,
needs and aptitudes.
 Eliminating wastage of human resources through
conservation of physical and mental health.

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 Importance of HRM,Cont…nd

4. National significance
 Human resources and their management play a vital role
in the development of a nation.
 The effective exploitation and utilization of a nation’s
natural, physical and financial resources require an
efficient and committed man power.
 Countries are underdeveloped because of their peoples
are backward.
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 Importance of HRM, Cont…nd

 The level of development in the country depends

primarily on the skills, attitudes and values of its
human resources.
 Effective management of human resources helps
to speed up the process of economic growth which
intern leads to higher standard of living and fuller
employment

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 Objectives of HRM
 The objectives of HRM is to provide with efficient and
effective work force that is to provide the right people
with the right talent , knowledge and experience that
are able to contribute towards the achievement of
objectives. The objective includes:
Owners’ objective
Employees’ objective
Social objective
Legal objectives
 Enterprise’ objectives

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 Objectives of HRM, Cont…nd
Owners’ objectives
 Owners of business require their employees to contribute to
the profitability of their organization through the
satisfaction of customers.
 Owners of non-business require that the human resource
attribute to the satisfaction of the client or user through
economic operation.

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 Objectives of HRM, Cont…nd
Employee’s objective
 Employees of organizations require the HRM to assist
them in achieving personnel goals such as:
o Adequate income
o Security

o Pleasant working condition

o Room for growth and development , and
o Better quality of work life

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 Objectives of HRM, Cont…nd

Social objectives
 The society provides challenges to HRM.
 They require the HRM to contribute quality
product of a high value by promoting fair
Promotion and healthy environment, etc.

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 Objectives of HRM, Cont…nd

Legal objectives (legal requirement)

Governments require HRM to comply with government
laws and regulations such as:
o Avoid discrimination based on sex, age, disability etc.
o Allow equal employment opportunities
o Fair treatment
o Minimum pay
o Affirmative action
o Fair working conditions ,
o Avoid Sexual harassment etc.
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 Objectives of HRM, Cont…nd
Objectives of HRM Function (to an Enterprise)
 The contributions of HRM makes to organizational
effectiveness include the following

1. Helping the organizations reach goals

2. Efficiently employing the skills and abilities of the

work force

3. Providing the organization with well- trained and

well – motivated employees
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 Objectives of HRM, Cont…nd
4. Developing and maintaining a quality of work life
that makes employment in the organization
desirable.
5. Communicating HRM policies to all employees
6. Helping to maintain ethical policies and socially
acceptable behavior
7. Managing Change to the mutual advantage of
individuals, groups, the enterprise, and the
public.

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THANK YOU FOR

YOUR ATTENTION

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