Fundamentals of HRM

Lecture # 1
 Human Resource Management
It is the process of managing people in
organizations in a structured and thorough
manner.
• The management of the workforce of a
business to ensure sufficient staff levels with
the right skills, properly rewarded and
motivated.

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 Human Resource Management
• Human resource management is the design of
formal systems in an organization to ensure
effective and efficient use of human talent to
accomplish organizational goals.
• Overall purpose of HRM is to ensure that the
organization is able to achieve success
through people.
• Study of People at work

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 Human Resource Management
• In simple words, HRM means employing
people, developing their capacities, utilizing,
maintaining and compensating their services
in tune with the job and organizational
requirement.

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 Human Resource Management
• HRM refers to acquisition, retention, motivation and
maintenance of Human Resources in an organization.

• HRM is the planning, organising, directing & controlling

of the procurement, development, compensation
integration, maintenance and separation of human
resources to the end that individual, organizational and
social objectives are accomplished.
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 Why Study HRM?
• HRM is a study about the people in the organization-
how they are hired, trained, compensated, motivated
& maintained.
• Taking a look at people is a rewarding experience
• People possess skills, abilities and aptitudes that offer
competitive advantage to any firm
• No computer can substitute human brain, no machines
can run without human intervention & no organization
can exist if it cannot serve people’s needs.
• HRM is function of every manager’s job.

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 Scope of HRM
 Very Vast
 Covers all major activities in the working life
of a worker
-from time an individual enters into an
organization until he or she leaves
comes under the preview of HRM

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 Prior to the mid-1960s, personnel
departments were perceived as the

• “Health and happiness” crews

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 Primary activities
• Planning company picnics
• Scheduling vacations
• Enrolling workers for health-care
coverage
• Planning retirement parties

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 History
• Management thinking until the 1950s(Industrial Revolution;
Frederick Taylor)
• Hawthorne studies, Western Electric Company
• Shift towards behavioral science movement in the 1950s and
1960s.
• In 1970s , the job of the HR manger was prepare policies and
rules & regulation to keep their companies out of court.
• From the 1970s onwards, change was the primary concern
• The emergence of HRM was part of a major shift in the nature
and meaning of management towards the end of the 20th
century.
• Organizations changed with Time

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 Why is HRM Important to an
Organization?
• The role of human resource managers has changed.
HRM jobs today require a new level of sophistication.
– Federal and state employment legislation has placed new
requirements on employers.
– Jobs have become more technical and skilled.
– Traditional job boundaries have become blurred with the
advent of such things as project teams and
telecommuting.
– Global competition has increased demands for
productivity.

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 Why is HRM Important to an
Organization?
• The Strategic Nature – HRM must be
– a strategic business partner and represent
employees.
– forward-thinking, support the business strategy,
and assist the organization in maintaining
competitive advantage.
– concerned with the total cost of its function and
for determining value added to the organization.

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 Why is HRM Important to an
Organization?
• HRM Certification
– Colleges and universities offer HR programs.
– The Society for Human Resource Management
and Human Resource Certification Institute offer
professional certification.

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 Why is HRM Important to an
Organization?
Four basic
functions:
• Staffing
• Training and
Development
• Motivation
• Maintenance

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 How External Influences Affect HRM

• Strategic Environment
• Governmental Legislation
• Labor Unions
• Management Thought
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 How External Influences Affect HRM
• HRM Strategic Environment includes:
– Globalization
– Technology
– Work force diversity
– Changing skill requirements
– Continuous improvement
– Work process engineering
– Decentralized work sites
– Teams
– Employee involvement
– Ethics

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 How External Influences Affect HRM
• Governmental Legislation
– Laws supporting employer and employee actions
• Labor Unions
– Act on behalf of their members by negotiating
contracts with management
– Exist to assist workers
– Constrain managers
– Affect non unionized workforce

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 How External Influences Affect HRM
• Management Thought
– Management principles, such as those from
scientific management or based on the
Hawthorne studies influence the practice of HRM.

– More recently, continuous improvement

programs have had a significant influence on
HRM activities.

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 Staffing Function Activities
• Employment planning
– ensures that staffing will contribute to the
organization’s mission and strategy
• Job analysis
– determining the specific skills, knowledge and
abilities needed to be successful in a particular job
– defining the essential functions of the job

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 Staffing Function Activities
• Recruitment
– the process of attracting a pool of qualified
applicants that is representative of all groups in
the labor market
• Selection
– the process of assessing who will be successful on
the job, and
– the communication of information to assist job
candidates in their decision to accept an offer
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 Goals of the Training and
Development Function
• Activities in HRM concerned with assisting
employees to develop up-to-date skills, knowledge,
and abilities
• Orientation and socialization help employees to
adapt
• Four phases of training and development
– Employee training
– Employee development
– Organization development
– Career development

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 The Motivation Function
• Activities in HRM concerned with helping employees
exert at high energy levels.
• Implications are:
– Individual
– Managerial
– Organizational
• Function of two factors:
– Ability
– Willingness
• Respect

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 The Motivation Function
• Managing motivation includes:
– Job design
– Setting performance standards
– Establishing effective compensation and benefits
programs
– Understanding motivational theories

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 The Motivation Function
• Classic Motivation Theories
– Hierarchy of Needs –Maslow
– Theory X – Theory Y –McGregor
– Motivation – Hygiene – Herzberg
– Achievement, Affiliation, and Power Motives –
McClelland
– Equity Theory – Adams
– Expectancy Theory - Vroom

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 How Important is the Maintenance
Function
• Activities in HRM concerned with maintaining
employees’ commitment and loyalty to the organization.
– Health
– Safety
– Communications
– Employee assistance programs
• Effective communications programs provide for 2-way
communication to ensure that employees are well
informed and that their voices are heard.

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 Translating HRM Functions into
Practice
• Four Functions:
– Employment
– Training and development
– Compensation/benefits
– Employee relations

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 Translating HRM Functions into
Practice
• Employment - Employment specialists:
– coordinate the staffing function
– advertising vacancies
– perform initial screening
– interview
– make job offers
– do paperwork related to hiring
• Training and Development –
– help employees to maximize their potential
– serve as internal change agents to the organization
– provide counseling and career development

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 Translating HRM Functions into
Practice
• Compensation and Benefits –
– establish objective and equitable pay systems
– design cost-effective benefits packages that help
attract and retain high-quality enployees.
– help employees to effectively utilize their benefits,
such as by providing information on retirement
planning.

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 Translating HRM Functions into
Practice
• Employee Relations – involves:
– communications
– fair application of policies and procedures
– data documentation
– coordination of activities and services that
enhance employee commitment and loyalty
– Employee relations should not be confused with
labor relations, which refers to HRM in a
unionized environment.
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 Translating HRM Functions into
Practice
• Purpose and Elements of HRM
Communications
– Keep employees informed of what is happening
and knowledgeable of policies and procedures.
– Convey that the organization values employees.
– Build trust and openness, and reinforce company
goals.

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 Translating HRM Functions into
Practice
• Effective Communication programs involve:
– Top Management Commitment
– Effective Upward Communication
– Determining What to Communicate
– Allowing for Feedback
– Information Sources

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 Does HRM Really Matter?
• Research has shown that a fully functioning HR
department does make a difference.
• Organizations that spend money to have quality HR
programs perform better than those who don’t.
• Practices that are part of superior HR services include:
– rewarding productive work
– creating a flexible work-friendly environment
– properly recruiting and retaining quality workers
– effective communications

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 The HR function in
organizations of various
sizes

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 HR in Small Businesses
• Seldom have a formal HR unit
• General managers may perform HRM
functions, HRM activities may be
outsourced, or a single generalist may
handle all the HRM functions.
• Focuses on hiring & retaining capable
employees
M a n a g e r/
O w ner

S a le s O p e r a t io n s F in a n c e
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 HR in a Medium-Sized Firm

• Little specialization
• HR manager is essentially the entire
department

P r e s id e n t
S a le s O p e r a t io n s F in a n c e H u m a n R e so u rce
M anager M anager M anager M anager

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Traditional Human Resource Functions in a
Large-Sized Firm
P r e s id e n t
M a r k e t in g O p e r a t io n s F in a n c e HR
M anager M anager M anager M anager

M anager M anager
T r a in in g a n d C o m p e n s a t io n &
• Separate sections are often created D e v e lo p m e n t B e n e fit s
• Placed under an HR Manager M anager M anager
Labor S t a ffin g
• Each HR function may have a R e la t io n s
supervisor & staff M anager
• HR Manager works closely with top S a fe ty &
H e a lt h
management in formulating policy

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 HRM in a Global Village
• HRM functions are more complex when
employees are located around the world.
• Consideration must be given to such things as
foreign language training, relocation and
orientation processes, etc.
• HRM also involves considering the needs of
employees’ families when they are sent
overseas.

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 HR and Corporate Ethics
• HRM must:
– Make sure employees know about corporate
ethics policies
– Train employees and supervisors on how to act
ethically

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 HR and Corporate Ethics
• The Sarbanes-Oxley Act passed in 2002,
establishes procedures for public companies
regarding how they handle and report their
financial status.
– Establishes penalties for noncompliance.
– Provides protection for employees who report
executive wrongdoing.
– Requires that companies have mechanisms in
place where complaints can be received and
investigated.
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