HUMAN
RESOURCE
MANAGEMENT
Chapter: 01
• Introduction to Human Resource Management
• Objectives of Human Resource Management
• Human Resource Management Functions
• External Organizational Challenges to HRM
• Internal Organizational Challenges to HRM
BBA (HONs) – 3rd Semester (Section-A)
Concept of HRM
HRM is the study of activates regarding people working in an
organization. It is a managerial function that tries to match an
organization’s needs to the skills and abilities of its employees.
Let’s see what is meant by the three key terms… human,
resource, and management.
•Human (Homo-sapiens – Social Animal)
•Resources (Human, Physical, Financial, Technical,
Informational etc.)
•Management (Function of Planning, Organizing, Leading &
Controlling of organizational resources to accomplish goals
efficiently and effectively)
Definition
• HRM is the management of people working in an
organization, it is a subject related to human.
• For simplicity, we can say that it is the management
of humans or people.
• Human resource may be defined as the art of
procuring, developing and maintaining competent
workforce to achieve the goals of an organization in
an effective and efficient manner.
HUMAN CAPITAL
• “Our employees are our greatest assets, and the ability to
attract and retain them is the key driver of our future success.”
• The human capital can be defined as "the embodiment of
productive capacity within people. It is the sum of people’s
skills, knowledge, attributes, motivations, and fortitude. It can
be given or rented to others, but only on a temporary basis; its
ownership is non-transferable.”
Relationship Between HRM and HRD
•Human resource management (HRM)
encompasses many functions
•Human resource development (HRD) is just
one of the functions within HRM
OBJECTIVES OF HRM
1. Help the organisation reach its goals
2. Employ the skills & abilities of the workforce efficiently
3. Provide the organization with well trained & motivated employees
4. Increase to the fullest the employee's job satisfaction & self actualization
5. Develop & maintain a quality of work life
6. Communicate HR policies to all employees.
7. Ethically & socially responsive to the needs of society.
Functions of HRM
Basic functions that all managers perform: planning, organizing, staffing,
leading, and controlling. HR management involves the policies and practices
needed to carry out the staffing (or people) function of management.
HRM department regardless of the organization’s size must perform following
human resource management functions.
• Staffing (HR planning, recruitment and selection)
• Human resource development
• Compensation and benefits
• Safety and health
• Employee and labor relations
• Records maintaining, etc.
• HR research
• Interrelationship of HR functions.
Staffing
Process through an organization ensures that its always has a
proper number of employees with the appropriate skills in the
right jobs, at the right time, to achieve organizational
objectives.
Human Resource Development (HRD)
Major HRM function consisting not only of training
and development but also of individual career
planning and development activities, organization
development and performance management and
appraisal.
Compensation & Benefits
The term compensation includes the total of all rewards
provided employees in return for their services.
Compensation refers to wages, salaries or tips while benefits
describes job extras provided by the employer. Benefits might
include health care packages, dental and life insurances, and
paid time off.
Safety & Health
Safety involves protecting employees from injuries caused by worker
related accidents.
Health refer to the employees freedom from physical or emotional illness.
These aspects of the job are important because employee who work in a
safe environment and enjoy good health are more likely to be productive
and yield long-term benefits to the organization.
Employee & labor relations
Employee/Labor Relations is responsible for implementing,
managing, and monitoring an effective Employee/Labor
Relations program for all employees.
HR--Research
Although human resource research is not listed as a separate function, it
pervades all HRM functional areas, and the researcher’s laboratory is the
entire work environment.
Interrelationship of HR functions.
All HRM functional areas are highly interrelated. Management must
recognize that decisions in one area will affect other areas. The
interrelationships among the five HRM functional areas will become more
obvious as we address each topic throughout the book.
HR
Management
Activities
WHAT IS UNIQUE ABOUT HRM?
HR is multidisciplinary:
• It applies the disciplines of Economics (wages, markets,
resources), Psychology (motivation, satisfaction),
Sociology (organization structure, culture) and Law
(Maternity Benefit Act, Min. Wage Act, Factories Act,
IRO, etc.).
• HR is embedded within the work of all managers, and
most individual contributors due to the need of managing
people (subordinates, peers and superiors) as well as
teams to get things done.
The Environments of Human Resource
Management
Many interrelated factors affect Human Resource
Management. Such factors are part of either the firm’s
External environment or its Internal environment.
The firm often has little, if any, control over how the
external environment affects management of its
human resources. In addition, there are certain
interrelationships that complicate the management of
human resources.
External Organizational Challenges to Human Resource
Management
External Environmental factors Comprised of those factors that
affect a firm’s human resources from outside the organization’s
boundaries.
1. The Labor Force
2. Legal Considerations
3. Society
4. Unions
5. Shareholders
6. Competition
7. Customers
8. Technology
9. The Economy
The Labor Force
The labor force is a pool of individuals external to the firm
from which the organization obtains its workers.
The capability of a firm’s employees determines to a large
extent how well an organization can perform its mission.
Legal Considerations
Another significant external force affecting human resource
management relates to federal, state, and local legislation and
the many court decisions interpreting this legislation. In
addition, many presidential executive orders have had a major
impact on human resource management.
Society
Society may also exert pressure on human resource management. If a
firm is to remain acceptable to the general public, it must be capable
of accomplishing its purpose in line with societal norms. Social
responsibility is an implied, enforced, or felt obligation of managers,
acting in their official capacities, to serve or protect the interests of
groups other than themselves.
Trade Unions
Union is a group of employees who have joined together for the
purpose of dealing collectively with their employer. Although unions
remain a powerful force, union membership as a percentage of the
nonagricultural workforce slipped from 33 percent in 1955 to 9.5
percent today.
Shareholders
The owners of a corporation are concerned about shareholders.
Because shareholders have invested money in a firm, they may at
times challenge programs considered by management to be beneficial
to the organization.
Competition
For a firm to succeed, grow, and prosper, it must be able to
maintain a supply of competent employees. Other
organizations are also striving toward that objective.
Customers
Because sales are critical to the firm’s survival, management has the
task of ensuring that its employment practices do not antagonize the
members of the market it serves.
Technology
As technological changes occur, certain skills are no longer
required. This necessitates some retraining of the current workforce.
The trend toward a service economy also affects the type and
amount of technology needed.
The Economy
The economy of the nation—on the whole—and of its various segments
is a major environmental factor affecting human resource management.
As a generalization, when the economy is booming, it is often more
difficult to recruit qualified workers. On the other hand, when a
downturn is experienced, more applicants are typically available.
THE EXTERNAL ENVIRONMENT
PROACTIVE VERSUS REACTIVE APPROACH
Managers approach changes in the external environment proactively
or reactively.
a. Proactive Response
Proactive responsiveness involves taking action in anticipation of
environmental changes.
b. Reactive Response
Reactive response involves simply reacting to environmental changes
after they occur. Organizations exhibit varying degrees of proactive
and reactive behavior.
Internal Organizational Challenges to Human
Resource Management
Factors that affect a firm’s human resources from inside its
boundaries are termed as internal environmental factors. The
primary internal factors include the firm’s
1. Mission
2. Policies
3. Corporate Culture
4. Management Style of Upper Managers
5. Employees
6. Informal Organization
7. Other Units of the Organization
8. Labor-Management Agreement
Mission
The organization’s continuing purpose or reason for being. Each
management level should operate with a clear understanding of the
firm’s mission. In fact, each organizational unit (division, plant,
and department) should clearly understand objectives that coincide
with that mission.
Policies
A predetermined guide established to provide direction in decision
making. As guides, rather than as hard and- fast rules, policies are
somewhat flexible, requiring interpretation and judgment in their
use. They can exert significant influence on how managers
accomplish their jobs.
Corporate Culture
The system of shared values, beliefs, and habits within an organization
that interacts with the formal structure to produce behavioral norms.
Management Style of Upper Managers
Closely related to corporate culture is the way in which the attitudes
and preferences of one’s superiors affect how a job is done. This
situation deserves special emphasis here because of the problems that
can result if the managerial style of upper-level managers differs from
that of lower-level managers.
Employees
Employees differ in many ways including their capabilities, attitudes,
personal goals, and personalities. As a result, behavior that a manager
finds effective with one worker may not be effective with another.
Informal Organization
The informal organization is the set of evolving relationships and
patterns of human interaction within an organization that are not
officially prescribed. Such informal relationships are quite powerful.
Other Units of the Organization
Managers must be keenly aware of interrelationships that exist
among divisions or departments and should use such relationships to
their best advantage.
Labor-Management Agreement
Upper management typically negotiates labor-management agreements,
but managers throughout the organization must implement the terms of
the agreements. In most instances, agreements place restrictions on the
manager’s actions.
