Chapter 1 & 2

Human Resource
Management: An
Overview and
Employment Law

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1.1 WHAT IS HUMAN RESOURCE
MANAGEMENT?

Human resource management is the

development and implementation of
systems in an organization for
attracting, developing and retaining
a high-performing workforce.

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 OTHER TITLES FOR
HRM SPECIALISTS

 Welfare Officer
 Personnel Manager
 Human Resource Manager
 Human Capital Management

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1.2 HISTORICAL FACTORS
IMPACTING HRM

The Industrial Revolution 1850s–1920

(1930)s leads to:
 Specialization, scientific management,
monetary incentives
 Long hours, exploitation of workers
 Worker alienation

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HISTORICAL FACTORS
IMPACTING HRM (cont.)

Defects of scientific management leads to

Human Relations Approach 1930s–1950s
 Emphasis on supervisory training
 Recreation programmes
 Welfare programmes

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 HISTORICAL FACTORS
IMPACTING HRM (cont.)

Recent developments 1950s–2020

 Increased labour legislation to protect workers’
rights
 Organizations getting bigger e.g.
mergers/acquisitions
 Increasing workforce diversity
 Rapid environmental changes
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1.3 MAJOR SOCIETALCHANGES
IMPACTING HRM

 Technological changes on HRM functions

 Globalization and increased competition – employers need

flexible workforce to survive

 Employee education

 Workforce diversity e.g. baby boomers/gen X, gen Y –

needs are different e.g.flexihour, different ethnic groups

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 USEFUL MALAYSIAN
STATISTICS
Population: 28 million
Current labour force employed: 12 million
Unemployment rate: 3.9%
Number of foreign workers: 1.8 million
Number of employers registered with
the Employees Provident Fund: 395,000
Life expectancy (Males): 71.8 years
Life expectancy (Females): 76.3 years

Source: Ninth Malaysia Plan: www.kwsp.com.my; www.mef.org.my; www.statistics.gov.my

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LO 10

Describe the HR Profession

Various designations are used within the HR

profession:
Executive: A top-level manager who reports directly to the
corporation’s CEO or to the head of a major division

Generalist: Employee who may be an executive, performs

tasks in a variety of several or all of the six functional areas of
HRM

Specialist: Employee who may be an HR executive, manager,

or non-manager who is typically concerned with only one of the
six functional areas of HRM
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LO 10
Human Resource Executives,
Generalists, and Specialists

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LO 1
Human Resource Management (HRM)

 Utilization of individuals to achieve

organizational objectives
 Concern of all managers at every level
 Face a multitude of challenges

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LO 2
Human Resource Management
Functions

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LO 2
Staffing
Process of ensuring the organization always
has:
Required number of employees
Employees with appropriate skills
Employees in the right jobs at the right time
Constant job analysis, human resource
planning, recruitment, and selection

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LO 2
Job Analysis

 Systematic process of determining skills,

duties, and knowledge required for
performing jobs in an organization
 Impacts virtually every aspect of HRM

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LO 2
Human Resource Planning
 Matching internal and external supply of
people with anticipated job openings over
a specified period of time

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LO 2
Recruitment and Selection
Recruitment: Attracting individuals
to apply for jobs
 Must be timely
 Applicants need appropriate qualifications
 Need sufficient number of applicants
Selection: Choosing individual best suited
for a particular position and the organization

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LO 2
Performance Management
 Goal-oriented process to ensure
organizational processes are in place
to maximize productivity
 Applies to employees, teams, and
ultimately, the organization

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LO 2
Performance Appraisal
 Formal system of review and evaluation
Individual
Team

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LO 2
Human Resource Development
 Major HRM functions include:
Training
Development
Career planning
Career development

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LO 2
Training and Development
 Training: Providing learners with
knowledge and skills needed for their
present jobs
Relatively short-term focus

 Development: Offering learning that goes

beyond present job
 Relatively long-term focus

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LO 2
Career Planning and Development

 Career planning: Ongoing process

Individual sets career goals
Identifies means to achieve them
 Career development: Formal approach
used by the organization
Ensures a pipeline of people with proper
qualifications and experiences

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LO 2
Compensation
All rewards that individuals receive as a
result of their employment
 Financial compensation
 Nonfinancial compensation

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LO 2
Financial Compensation
 Direct (Core Compensation): Pay
employee receives in form of wages,
salaries, bonuses, or commissions
 Indirect (Employee Benefits): Benefits
employee receives such as paid
vacations, sick leave, holidays, medical
insurance

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LO 2
Nonfinancial Compensation
Satisfaction that employees receive from:
Job itself
Psychological and/or physical environment

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LO 2
Employee and Labor Relations

 Businesses are required by law to

recognize a union and bargain with it in
good faith if the firm’s employees want
union representation
 Human resource activity with a union is
often referred to as industrial (labor
management) relations

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LO 2
Internal Employee Relations
Internal Labor Relations: Movement of
employees within the organization
Examples:
Promotions
Demotions
Terminations
Resignations

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LO 2
Safety and Health

 Safety: Protecting employees from injuries

caused by work-related accidents
 Health: Employees' freedom from illness
and their general physical and mental well-
being

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LO 2
Interrelationships of HRM
Functions
 All HRM functions are interrelated so that
each function affects the others
 For example, a pay-for-performance
compensation plan depends upon reliable
and valid performance appraisal practices

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 1.8 ROLE OF THE MINISTRY OF HUMAN
RESOURCES

The Ministry:
• sets policies,
• prepares draft employment legislation, and
• enforces the employment legislation.

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1.8 ROLE OF THE MINISTRY
OF HUMAN RESOURCES

The Ministry:
 sets policies,
 prepares draft employment legislation, and
 enforces the employment legislation.

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ORGANIZATION CHART
MINISTRY OF HUMAN RESOURCES

Ministry of
Human
Resources

Department Department Department

Department
of Trade of Industrial of Occupational
of Labour
Union Affairs Relations Safety and Health

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OTHER ORGANIZATIONS OF
RELEVANCE TO HRM

The
TheEmployees
EmployeesSocial
SocialSecurity
SecurityOrganization
Organization

Pembangunan
PembangunanSumber
SumberManusia
ManusiaBhd
Bhd

National
NationalInstitute
Instituteof
ofOccupational
Occupational
Safety
Safetyand
andHealth
Health

Skill
SkillDevelopment
Development(Loan)
(Loan)Fund
FundCorporation
Corporation

The
TheEmployees
EmployeesProvident
ProvidentFund
Fund

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 1.9 THE EMPLOYMENT
LAWS
 The Employment Act 1955.
 The Sabah Labour Ordinance, updated 2005,
The Sarawak Labour Ordinance, updated 2005
 Areas covered: contract of service, wages,
working hours, holidays etc.
 The Wages Councils Act 1947 e.g. Minimum wages
 The Employees Provident Fund (EPF) Act 1991

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 THE EMPLOYMENT LAWS (cont.)

 The Employees Social Security Act (SOCSO)

1969
 The Occupational Safety and Health Act
(OSHA) 1994
 The Factories and Machinery Act 1967
 The Children and Young Persons (Employment) Act
1966 e.g. No child labour, restriction on 16 and below
 The Employment (Restriction) Act 1968 e.g. Work
permit for non-Malaysians

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 THE EMPLOYMENT LAWS
(cont.)
 The Trade Unions Act 1959
 The Industrial Relations Act 1967
 Pembangunan Sumber Manusia Bhd Act
2001
 The Skills Development Fund Act 2004
 The National Skills Development Act 2006

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