Chapter One

Introduction to & Trends in

HRM

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Reflection
• What is Human Resource
Management?

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

• Resource is something you need to produce certain output.
E.g material, money, information, work procedure, energy,
equipment, time----
• Human Resource is something special. It is the part of the
organization that deals with people.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Human Resource
Management?
 Human resource management is the process of acquiring,
training, appraising, and compensating employees, and of
attending to their labor relations, health and safety, and
fairness concerns.

• The policies, practices, and systems that influence

employees:-
- Behavior
- Attitudes
- Performance

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Human Resource Management
Practices

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Companies with effective HRM:
• Employees and customers tend to be more
satisfied.
• . The companies tend to:
– be more innovative
– have greater productivity
– develop a more favourable reputation in the
community

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Human Capital
• Human Capital – an organization’s employees described
in terms of their:
– training
– experience
– judgment
– intelligence
– relationships
– insight

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Human Capital continued
• The concept of “human resource management” implies that
employees are “resources” of the employer.

• HRM has traditionally been viewed as a expense, rather than a

source of value to the organization

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Impact of Human Resource Management

Types of human
capital
-Training
- Experiences
Organizational Performance
- Judgment- - Quality
- Intelligence - Profitability
HRM Customer Satisfaction
-Relationships
- Insights

Behavior of human capital

- Motivation
- Efforts

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 HRM and Sustainable Competitive Advantage

• An organization can succeed if it has

sustainable competitive advantage.
• Human resources have the necessary qualities to help give
organizations this advantage:
• Human resources are valuable.
• Human resources with needed skills and knowledge are
sometimes rare.
• Human resources cannot be imitated.
• Human resources have no good substitutes.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 High‐Performance Work System

• An organization in which technology, organizational

structure, people, and processes all work together to give an
organization an advantage in the competitive environment.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Responsibilities of HR Departments

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Analysing and Designing Jobs

Job Analysis
• The process of getting
detailed information about
jobs
Job Design
• The process of defining the
way work will be
performed and the tasks
that a given job requires

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Recruiting and Hiring Employees

Recruitment Selection
• The process through which • The process by which the
the organization seeks organization attempts to
applicants for potential identify applicants with the
employment necessary knowledge,
skills, abilities, and other
characteristics that will help
the organization achieve its
goals.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Which qualities Employers look in Employees?

1. Technical skills?
2. Intelligence
3. Interpersonal skills
4. Computer skills

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Top Qualities Employers seek in Job
candidates??

1.Communication skills 6.Analytical skills

(written and verbal) 7.Motivation/initiative
2.Honesty/integrity 8. Flexibility/adaptability
3.Interpersonal skills 9.Computer skills
4.Strong work ethic 10.Detail Orientation
5.Teamwork Skills

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Training and Development
Training Development
• A planned effort to enable • The acquisition of
employees to learn job‐ knowledge, skills, and
related knowledge, skills, behaviors that improve an
and behavior. employee’s ability to meet
changes in job requirements
and in customer demands.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Managing Performance

• Performance Management – The process of ensuring that

employees’ activities and outputs match the organization’s
goals.
• The human resource department may be responsible for
developing or obtaining questionnaires and other devices for
devices for

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Playing and administering pay and
benefits
Planning Pay & Benefits
• How much to offer in salary
and wages.
• How much to offer in
bonuses, commissions, and
other performance‐related
pay.
• Which benefits to offer and
how much of the cost will
be shared by employees
Administering Pay &
Benefits
• Systems for keeping track of
employees’ earnings and
benefits are needed.
• Employees need
information about their
benefits plan.
• Extensive record keeping
and reporting is needed

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Maintaining Positive Employee
Relations
• Preparing and distributing:
- employee handbooks and policies
- company publications and newsletters
• Dealing with and responding to communications from employees:
– questions about benefits and company policy
– questions regarding possible discrimination, safety hazards,
possible harassment
• Collective bargaining and contract administration.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Establishing and Administering
Personnel Policies
• Organizations depend on their HR department to help
establish and communicate policies related to:
– hiring
– discipline
– Promotions
– benefits
• All aspects of HRM require careful and discreet record
keeping

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Ensuring Compliance with Labor
Laws
• Ensuring Compliance with Labor Laws
– filing reports and displaying posters
– avoiding unlawful behavior
• Managers depend on HR professionals to help them keep track
of these requirements.
• Lawsuits that will continue to influence HRM practices
concern job security.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

Supporting the Organization’s Strategy
• Human resource planning – identifying the numbers
and types of employees the organization will require
to meet its objectives
• The organization may turn to its HR department for
help in managing the change process.
• Skilled HR professionals can apply knowledge of
human behavior, along with performance
management tools, to help the organization manage
change constructively.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

Supporting the Organization’s Strategy
Corporate Social Stakeholders
Responsibility

• A company’s commitment • The parties with an interest

to meeting the needs of its in the company’s success
stakeholders. (typically, shareholders, the
community, customers, and
employees).

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Who is Responsible for HR?

• In an organization, who should be concerned with

human resource management?
A. Only HR departments
B. Only Managers
C. Managers and HR departments

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Trends in Human Resource
Manage
Change in labor force High performance work systems
• Aging workforce • Knowledge workers
• Diverse workforce • Employee engagement
• Skill deficiencies • Team work
• Increasing education

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Trends in Human Resource
Manage cont’d
Change in employment
Change in Technology
r/ship
• HRIS • New psychological
• Connectedness contract
• E-HRM applications
• Self – Service

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 The Labor force
Internal Labor force External Labor force
• An organization’s • Individuals who are
workers actively seeking
- its employees employment
- the people who have • The number and kinds of
contracts to work at the people in the extenal
organization labor market determines
• The internal labor force is the kinds of human
drawn from external resources available to an
labor market organization

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 The HRM implications of Aging work
force
• HR professionals will spend much of their time on concerns
related to retirement planning, retraining older workers, and
motivating workers whose careers have reached a plateau.
• Organizations will struggle with ways to control the rising
costs of health care and other benefits.
• Many of tomorrow’s managers will supervise employees much
older than themselves.
• Organizations will have to find ways to attract, retain, and
prepare the youth labor force

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

The HRM implications of Aging work
force cont’d

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Skill Deficiencies of the Workforce
• The gap between skills • Today, employers are
needed and skills available looking for:
has decreased companies’ – mathematical skills
ability to compete. – verbal skills
 They sometimes lack – interpersonal skills
the capacity to upgrade – computer skills
technology, reorganize
work, and empower
employee
 What can HR do?

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 High‐Performance Work Systems
• Organizations that have the best possible fit between their:
– social system ( people and how they interact); and
– technical system (equipment and processes).
• Key trends occurring in today’s high‐performance work
systems:
– reliance on knowledge workers
– the empowerment of employees to make decisions
– the use of teamwork

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Knowledge Workers
• They are especially • Employees whose
needed: contribution to the
– health services organization is
– business service specialized knowledge
such as:
– social services
– knowledge of customers
– engineering
– knowledge of a process
– Management
–knowledge of a profession
– Retention will be a
challenge

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Employee Empowerment
Employee Empowerment
• Giving employees
responsibility and
authority to make
decisions regarding all
aspects of product
development or customer
service
Instructor: Milkiyas Ayele (PH.D.)
Employee Engagement
• Full involvement in one’s
work and commitment to
one’s job and company
• This is associated with:
– higher productivity
– better customer service.
– lower employee
turnover
04/05/2024
 Team Work
• Work teams often assume • The assignment of work to
many of the activities groups of employees with
traditionally reserved for various skills who interact
managers: to assemble a product or
– selecting new team provide a service
members
– scheduling work
– coordinating work with
customers and other
units of the organization

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Human Resource Information System
(HRIS)
• A computer system used to acquire, store, manipulate, analyze,
retrieve, and distribute information related to an organization’s
human resources. An HRIS can:
– support strategic decision making
– help the organization avoid lawsuits
– provide data for evaluating programs or policies
– support day‐to‐day HR decision

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Electronic Human Resource
Management(e‐HRM)
• e‐HRM: the processing and transmission of digitized HR
information especially using computer networking and the
Internet.
• e‐HRM has the potential to change all traditional HRM
functions
• Self‐Service: System in which employees have online access
to information about HR issues and go online to enrol
themselves in programs and provide feedback through surveys

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Implications of e‐HRM for HRM
Practices

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Change in the Employment R/ships
• The employment relationship takes the form of a
“psychological contract” that describes what employees and
employers expect from the employment relationship.
• In the traditional version, organizations expected
employees to contribute time, effort, skills, abilities,
and loyalty in exchange for job security and 0pportunities for
promotion.
• Today, organizations’ needs are constantly changing

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Nature of change in Employment
R/ships
• Today, organizations are requiring top performance and
longer work hours but cannot provide job security.
• Instead, employees are looking for:
– flexible work schedules
– comfortable working conditions
– greater autonomy
– opportunities for training and development
– performance‐related financial incentives
• This requires planning for flexible staffing levels

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 The Need for Flexibility Affects HRM
• Organizations seek flexibility in staffing levels through
alternatives to the traditional employment relationship:
– outsourcing, temporary, and contract workers
– flexible work schedules – including shortened work
weeks
– allowing employees to adjust work hours to meet personal
and family needs
– moving employees to different jobs to meet changes in
demand

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Equality in Employment Opportunity
• Discrimination
– To treat someone differently or unfairly because of a personal
characteristic
• Direct Discrimination
– Policies or practices that clearly make a distinction on the
basis of a prohibited ground
• Indirect Discrimination
– Policies or practices that appear to be neutral but have an
adverse impact based on a prohibited ground

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

Prohibited grounds of discrimination

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

Equal Employment Opportunity(EEO)

• Equal employment opportunity – the condition in which all

individuals have an equal chance for employment, regardless
of their race, color, religion, sex, age, disability, or national
origin.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Bona fide occupational Qualification
• A defense to acknowledged discrimination, usually based on
the existence of a facially discriminatory policy, such as
"individuals over the age of 50 shall not be hired as police
office.”
• Law permits you to discriminate on the basis of "religion, sex,
or national origin in those instances where religion, sex, or
national origin is a bona fide occupational qualification
reasonably necessary to the normal operation of the particular
business or enterprise.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Summary
• HRM influences who works for the organization and how
those people work.
• HR departments have responsibility for a variety of functions
related to acquiring and managing employees.
• HR management requires substantial human relations skills,
including skill in:
– communicating
- negotiating
– team development

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Summary cont’d
• HR professionals also need:
– To understand the language of business
– To be a credible with line managers and executives
– To be strategic partners
– Treat employees and customers equitably and fairly.

• HR professionals should make decisions consistent

with sound ethical principles

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Summary
• An organization’s internal labor force comes from its external
labor market
• In some countries, this labor market is aging and becoming
more racially and ethnically diverse.
• Organizations must recruit from a diverse population,
establish bias‐free HR system, and help employees understand
and appreciate cultural differences.
• HRM can help organizations find and keep the best
possible fit between their social system and technical
system.

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

 Summary cont’d
• Organizations seek flexibility in staffing levels through
alternatives to the traditional employment relationship.
• Organizations also may seek flexible work schedules.
– Shortened workweeks
– Adjust work hours as a way for employees to meet
personal needs

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024

Instructor: Milkiyas Ayele (PH.D.) 04/05/2024