Project Leadership, Human

Resources & Stakeholder

Management

PPM 541 Cr.Hr 3

By: Zerhun Ganewo (Assis.prof)
+251916159085

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Unit 2: Human Resources Management
2.1 Need for Human Resources Management (HRM)
• HRM is “planning, organizing, directing, controlling
of procurement, development, compensation,
integration, maintenance and separation of human
resources to the end that individual, organizational
and social objectives are achieved.” (Flippo)
• “The total knowledge, skills, creative abilities, talents
and aptitudes of an organisation's workforce, as well
as the value, attitudes and beliefs of the individuals
involved." (Megginson)
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 The Objectives of HRM
• Helping the organization to reach its goals.

• Efficient utilizations of the skills and the abilities of the

work force
• Equipping the organization with well-trained and well
motivated employees.
• Increasing employees’ job satisfaction and self-
actualization
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 The Objectives of HRM…

• Developing and maintaining quality of work life

• Communicating HRM policies to all employees.

• Helping to maintain ethical policies and behaviour.

• Managing change

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 2.2 Human Resource Planning

Human Resource Planning

• The section discuss concept of human resource
planning, the steps involved in human resource
planning, and environmental factors affecting human
resource planning.
• Planning involves the process of knowing where you
are going and how you are going to get there
 Human Resource planning….
• Determines the impact of organization’s objectives on
human resource
• Forecasts demand and supply

• Analyzes the impact of environmental factors

• Identifies gaps between the demand and supply of

human resource
• Determines action plans to close the anticipated gaps.
 Objectives of Human Resource Planning

• Relate human resource needs to overall activities of an

organization.
• Make long-range estimates of specific-as well as general-needs.

• Maximize the return on investment in human resources.

• Recruit and retain the human resource

• Foresee the employee turnover and minimizing turnover

• Meet the needs of the programs of expansion, diversification

 Objectives of Human Resource
Planning…

• Improve the standards, skill, knowledge, ability

and discipline.
• Assess the surplus or shortage of human resources

• Minimize imbalances caused due to non-

availability of human resources
• Estimate the cost of human resources.
 Importance of human resource planning

• It checks the corporate plan of the organization

• It offsets uncertainty and change

• It helps in creating more satisfied work force

• It helps in anticipating the cost of human resources

• It helps in planning for physical facilities, working

conditions, the volume of fringe benefits
Human Resource Planning Process
• Human resource planning involves seven basic steps
Step1: Analyzing Objectives of the Organization
• possible to determine the jobs needed to be done, how many and what types of
employees will be required
Step 2: Determining Future Human Resource Requirement (Demand)
• predicting the need for employees
• Future HR demand can be determined by two methods
1. determining the job needs
2. determining the number of people needed
 Human Resource Planning Process….

Step3: Determining Future Human Resource

Availabilities (Supply)
• Forecast of expected changes in the supply of
internal and external personnel
• additions of human resources as a result of
promotions, transfers, returns from leaves of
absence, recruitments, and
• reductions of human resource as a result of
demotions, retirements, disability
 Human Resource Planning Process….
Step 4: Conducting External and Internal
Environmental Scanning
• assessment of environmental factors impacting the
demand and supply of human resources
• process of tracking trends in the internal and
external environments
Step 5: Reconciling Requirements and Availabilities
• Combining demand, supply and information
regarding environmental scanning to identify
potential gaps
 Human Resource Planning Process….
Step 6: Developing action plans to close the anticipated gaps
• Once the future demand and supply of human resources is reconciled,
action plans must be developed for achieving the desired results.
• If the result indicated a need for additions, plans must be made to
recruit, select, orient, and train the specific numbers and types of
personnel needed.
• If a reduction in labor is necessary, plans must be made to realize the
necessary adjustments through layoffs, terminations, early
retirement, voluntary resignation
 Human Resource Planning Process….
Step 7: Controlling and Evaluating the Plan
• monitor results of the overall program
This step should address such questions as:
• How well is the plan working?
• Is it cost effective?
• What is the actual versus planned impact on the
workforce?
• Where are the plan’s weaknesses?
• What changes will be needed during the next planning
cycle?
 Environmental Factors Affecting Human
Resource Planning
• Human resource requirement and availability depends on
both external and internal factors
External Factors
• Those factors on which HR department has little influence
A. Economic and business condition: these influence HR
demand by an organization
• Economic condition like inflation, unemployment and
interest rate
B. Demands for products and services: when there is
market demand for produces, there is also HR demand
 Environmental Factors Affecting Human
Resource Planning
C. Labour Market Analysis: existence of quality
labour in the market
D. Social, political and legal challenges: government
laws and regulations determine HR planning
E. Technology: advancement of technology replace
human labour
F. Competitors: If there are strong competition in
external market, employer may reduce its
employee
Internal Factors Affecting Human
Resource Planning
• Single organization may have different objectives

• Between those objectives there are tradeoffs

Internal factors
A. Organizational decisions
Strategic objectives are long-term organizational goals
that help to convert a mission statement from a broad
vision into more specific plans and projects.
Operational objectives are daily, weekly or monthly
project benchmarks that implement larger strategic
objectives.
 Internal factors….
B. Work Force Factors
• Employee actions as retirements, resignations,
terminations, deaths, and leaves or absence.
C. Financial Condition and Flexibility
• If financial condition is suitable, increment in
employee and the opposite is true
 Internal factors….
D.Nature of the Task
• Employee requirements depends on the
nature of tasks
• Planning for tasks related with daily laborer
and skilled manpower are highly different
that the later requires more care and
forecasting
 Internal factors….
E. Union Expectations and Power:
• Unions may restrict organizations’ ability to
hire and promote

G. Information Systems
• human resource planning requires detailed
information
 2.3. Recruitment and Selection
• Recruitment is the process of finding and hiring the best and most
qualified candidate for a job opening, in a timely and cost-effective
manner.
• Recruitment helps to satisfy companies HR demand

• After recruitment, the next step is selecting among pool of applicants

• A selection process matches job requirements and the candidate’s

skills and motives
• If there is error during selection, the organization may encounter costs
related training candidate, costs of mistakes and replacement costs.
 Recruitment
• The objective of recruitment process is to
provide a sufficiently large group of qualified
candidates
• Recruitment starts when recruits are required
and ends when applicants have submitted
their documents and registered.
 Recruitment….
• Recruitment required when

1. Vacancies due to transfer, promotion, retirement,

termination, permanent disability or death;
( Mobility of human assets)

2. Vacancies due to expansion, diversification, growth

or job re-specification (growth of businesses)
 Factors Influencing HR Recruitment

A. External Influences
• External influences include the following:

• Government and union restrictions: it is mandatory that

advisements of new job should be public for at least 7
consecutive working days
• Labor market conditions: accessibility of recruits

• Location of the organization: distance from main centres

Factors Influencing HR Recruitment…..

B. Internal Influences
• Organization policies and practices: If the system
is highly procedural, recruitment process may also
tedious
• Organizational Image: how much the organization
is accepted by external environments
 The Process, Sources and Methods of
Recruitment

• Recruitment begins when a manager initiates an

employee requisition.

• Employee acquisition is a document that specifies

job title, department, the date the employee is

needed for work, and other details.

The Process of Recruitment
Human Resource planning

Recruitment

Internal sources External sources

Recruited individuals
 Sources and methods of recruitment

• There are two sources of recruitment (internal and

external)
• Internal: personnel already on the pay-roll system

• Internal sources are transfer from one job title to

another, promotion or demotion, rehire those who
are previously in a pay-roll system or lay-offs
(dismissed by economic reason)
Advantages and disadvantages of internal
recruitments
Advantages
• High probability of selecting better candidates
• Increases the moral of others because of perceived possible
promotion
• Needs less familiarization
• Less expensive
Disadvantages
• No new ideas or innovation
• Inadequacy of competent
• Creates unnecessary tension due to recruiting relatives or
friends
 Internal recruitment methods

• management should identify the statuses of current

employees
• Undertaking proper skill inventories is also necessary

• Job posting: is a procedure of informing employees that job

opening exist.
• Job posting can be through bulletin board, companies news
letter or brochures
• Job bidding: qualified employees apply for a posted job
B. External recruitment Sources and Methods

Sources
• attracting applicants from outside the
organization
Requirements for external recruitment
• to fill entry level jobs
• to acquire skills not possessed by current
employees; and
• to obtain employees with different backgrounds
to provide new ideas
 Advantage and disadvantage of external
recruitment
Advantage
• Outside people can bring new and innovative ideas
• New employees are less likely to be involved in
company politics
• Can easily accessible, less expensive
Disadvantage
• rejection from existing employees
• Takes time to become initiative
• If new comers are popular, insiders force them to leave
 Sources of external recruitment
• High schools and vocational schools: special for clerical and
entry level operative work
• Colleges and universities: major recruitment sources

• Competitors and other firms: accessing employees from

similar industries or geographic areas.
• Unemployed: those who have no jobs (fired, cut back
operations, qualified workers without jobs, job loss due to
merging)
 Methods of external recruitment
A. Advertisement
• Advertising communicates the firm’s employment needs to
the public through media
• advertisements through mass media generally attract a
large number of unqualified applicants, and increase the
cost and time for selection.

B. Employment Agencies: agencies formed and licensed to

undertake recruitment process
 Methods of external recruitment…..
C. Internship
• Special form of recruiting in which a student is placed in
a temporary job.
• There is no obligation for the company to hire those
students permanently
D. Employee referrals programs
• a word-of-mouth technique in which present
employees refer candidates from outside
• Relatively inexpensive and fast method of recruitments
• Employee stay for a longer and shows high loyality.
 Methods of external recruitment…..
• The main drawback of this method is former
employee may tend to recommend/refer from
his localities and this create the problem of
equal employment opportunity.
E. Internet Recruiting: applicants are registered
through email and websites
• Requires minimum cost.
 Selection and Orientation of Human
Resources
• Employee selection is the process of
determining which individuals are to be staff
of the organization
• Proper selection highly depends on planning
(provides demand and supply forecast)
 Selection and Orientation of Human
Resources..
• Recruiting is related to selection in that a high
selective selection procedure requires the
recruitment program to generate a larger or
more qualified candidate pool.

• Compensation is a critical aid in selection

because if pay is not high enough, the
organization will not attract enough
candidates
Significance of Employee selection

• Selection is more powerful way of improving

productivity
• Selecting qualified and competent employees
improves the benefits an organization reaps
• If an organization hires poor performers, it
cannot be successful long
 Significance of Employee selection…

• today’s business what makes the real

difference is the kind of Human resource you
have, not technology or financial resource
• If less qualified people are selected, then it
will be necessary to budget funds for training
them
 The Selection Process
• selection process is a series of specific steps
through which job candidates pass
• It may varies from one organization to another

Step 1: Preliminary selection: Preliminary

selection of applicants is often done by setting
minimum standards for the job
 The Selection Process…
• Step 2: Employment Tests: Selection tests are
often used to assist in assessing an applicant’s
qualification and potential for success
• Characteristics of employee tests
A. Standardization: uniformity of the procedures
and conditions related to administering tests
• During employee tests, all conditions should
be similar for all applicants
 The Selection Process…
B. Objectivity: similarity of outcomes for all
questions throughout applicants.
Example: Multiple-choice and true-false tests
C. Reliability: the extent to which a selection test
provides consistent results
• employment test should give a similar score
each time the person takes the test (tests that
rely on luck are not reliable).
 The Selection Process…

E. Validity: how well a measure actually assesses the

attribute it is being used to assess.
• validation of a measure used for personnel selection is
the degree to which that measure actually assesses
suitability for the job in question.
• validity has always been a proper concern of
organizations that use tests.
 The Selection Process…

Step 3: Selection Interview

• Choosing the best applicant for the job is the basic
objective of selection process
• Interview helps to identify the potential of applicants
and its communication ability
• interview is one further means of reducing the
number of people who might be eligible for the job
 The Selection Process…
Components of employment interview
• Academic achievement: factors related to academic
performance.
• Personal qualities: physical appearance, speaking ability,
vocabulary, poise, and assertiveness
• Occupational experience: occupational experience
requires finding out about the applicant’s skills, abilities,
and willingness to handle responsibility.
• Interpersonal competence: Team sprit
• Career orientation: assessing applicant’s aspirations are
realistic.
 The Selection Process…
• Step 4: Verification of References:
• asking other peoples the characteristics of
applicants
• Step 5: Medical Evaluation:
• health and accident information of the
selected employee.
• Depends on the type of job requirements
 The Selection Process…
• Step 6: Supervisory Interview:
• supervisor is better able to evaluate the
applicant’s technical capabilities

• Step 7: Realistic Job Preview:

• involves showing the applicant(s) the job site in
order to acquaint them with the work setting,
commonly used equipment, and prospective
co-workers.
 The Selection Process…
Step 8: Hiring Decision:
• actual hiring of an applicant constitutes the
end of the selection process.
• At this stage, successful (as well as
unsuccessful) applicants must be notified of
the firm’s decision.
 2.4. Developing People

• People development is about helping

employees develop the capacities the
organization needs to succeed.
• People are our greatest asset. But are they
prepared to take our organizations to the next
level?
• The prevailing sentiment is that employees
need to continue growing just to keep up with
the rapidly changing business landscape.
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 Developing People…
• People development is the process by which human
resource departments equip employees with the skills,
knowledge, and attitudes they need to reach business
goals.
• Why is people development important to employee
development?
• There are several key reasons why your HR department
needs to understand people development and how it
relates to employee development.
• Some of the advantages of employee development
include:
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 Developing People …
• Productivity - demonstrating to employees that
you care about their growth and development
will boost their morale and willingness to work
harder.
• Talent attraction - job seekers are searching for
a company where they can develop their skills.
• Reduce turnover - By investing in opportunities
for your employees to develop their skills, you
can save your company a lot of money, and time
by reducing the turnover rate. 52
2.5 Compensation and Recognition
• Compensation is the outcomes (rewards) employees
receive in exchange for their work.
• There are two types of compensation

1. Monetary and

2. Non-monetary
• Monetary compensation deals with direct or indirect
payment made to employees
 1. Monetary compensation
• Direct: is an employee’s base wage, which can be an annual
salary or hourly wage, plus any performance-based pay an
employee receives, such as profit sharing bonuses.

• Indirect: it includes everything from legally required public

protection programs such as Social Security to health
insurance, retirement programs, paid leave, child care or
moving expenses.
 2. Non-monetary compensation

• Is any benefit an employee receives from an

employer or job that does not involve tangible
value.
• This includes career and social rewards such as
job security, flexible hours, opportunity for
growth, praise and recognition, and friendships.
2.6 Developing a Healthy Work Environment
and Effective Employee Relations
• Workplace environment is the sum of the
interrelationships that exists within the employees
and the environment in which they work.
• This environment involves the physical location as
well as the immediate surroundings, behavioral
procedures, policies, rules, culture, resources,
working relationships, work location, all of which
influence the ways employees perform their work.

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Developing a Healthy Work Environment…
• The quality of the workplace environment impacts on
employees‟ performance and subsequently influences
the organization competiveness.
• Safety hazards: work environment that harm employees
• Example: loss of hearing or eye sight, cuts, sprains, bone
break, burns….
• Health hazards: work environment that slowly and
cumulatively (irreversibly) deteriorate an employee’s
health.
• Example: toxic, cancer, stressful working conditions

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 Employee relations
• Employee relations is the relationship
between employers and employees. It
includes issues with pay and benefits,
managing conflict, and providing a healthy
work-life balance.
• Companies that effectively manage staff
relations are more likely to achieve employee
engagement. And this ultimately improves the
bottom line of an organization
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 Employee relations…
An effective employee relations program should define:
• Policies for preventing and resolving disputes between
employees and managers
• Working conditions
• Reasonable working hours
• Pay and benefits
• Measures to improve the work-life balance
• Procedures for collecting and implementing employee
feedback
• Reward and recognition schemes.
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