overview of HRM

02/15/202
Management
5 08:53 AM
Human
Resource
 Chapter One
An Overview
Contents of the chapter
1.1. Definition and back ground
1.2. Importance of HRM
1.3. Evolution and Development of HRM
1.4. HRM objectives

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 Human Resources Refers
From the national point of view it is the
 knowledge,
 skills,
 creative abilities,
 talents, and
 aptitudes obtained in the population.
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 From view point of individual enterprise it is the:-

 sum total of the inherent abilities,

 acquired knowledge and
 skills as represented in the talents and
aptitudes of its employees

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 HR
HR is the total knowledge, skills,
creative abilities, talents and
aptitudes of an organization’s
workforce as well as the values,
attitudes & beliefs of the individuals
involved.
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 Who is human resource manager?

• A human resource manager is an individual who

normally acts in an advisory, or "staff", capacity,
working with other managers to help them deal
with human resource matters.
• The human resource manager is primarily
responsible for coordinating the management of
human resources to help the organization achieve
its goals.
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 The HR Manager’s Job

o Conducting Job analysis

o Planning labour needs and recruiting job candidated
o Selecting Job candidates
o Orienting and inducting new employees
o Managing wages and salaries (compensating employees)
o Providing incentives and benefits
o Appraising performance
o Communicating ( interviewing, counselling, disciplining)
o Training and development
o Building employee commitment
o Equal Employment opportunity and affirmative action
o Employee health and safety (Handling grievances & labour
relations)
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 Personnel Mistakes of HR Manager
• Hire the wrong person for the job
• Experience high turnover
• Have your people not doing their best
• Waste time with useless interviews
• Have your firm in court b/s of discriminatory actions
• Have your firm cited for unsafe practices
• Have some employees think their salaries are unfair and
inequitable relative to others in the organization
• Allow a lack of training to undermine your department’s
effectiveness
• Commit any unfair labor practices
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 Definition Of Human Resources Management
(HRM)

What is HRM?

Human – people, us
Resource – assets/costs for organizations

Management – coordination and control of

organizational resources to achieve set goals.

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 Definition Of HRM Con'td
• HRM is the effective use of human resources in
order to enhance organizational performance.
• The philosophy, policies, procedures and practices
involved in carrying out the “people” or human
resource aspects of a management position,
including recruiting, screening, selecting, orientation
/ induction, compensating, training & developing,
rewarding, appraising and controlling.
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 Definition Of Personnel Management
Con'td

• Personnel management obtaining, using

and maintaining a satisfied workforce. It
is concerned with employees at work and
with their relationship within the
organization.

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02/15/2025 08:53 AM overview of HRM 12
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 Generally HRM

Focuses on people aspect of management

Is a proactive rather than reactive approach
Is a key ingredient to achieve competitive

advantage.
The mgt of men is a difficult task.

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 Why the management of men became a
challenging task?

1. Because of the dynamic nature of people i.e.

People are different in gender, age, socio-
religious group, literacy standards, mental
abilities, traditions, sentiments and behaviour.

2. People are responsive; they feel, think and act.

They cannot be operated like a machine
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3. People are not only a product of
biological inheritance but also a
result of interactions with the
environment.
4. People have different sets of needs,
drives, goals and experiences.
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 Types of HRM
A. Hard HRM
Focuses on the resource side of hrm.
It emphasizes costs in the form of
'headcounts' and places control firmly in the
hands of management.
Their role is keeping the workforce
closely matched with requirements.

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 Hard HRM Con'td
• Less humanistic edge, holding that employees are
resources in the same way as any other business
resource.
• People have to be managed in a similar manner to
equipment and raw materials.
• They must be obtained as cheaply as possible, used
sparingly and developed & exploited as much as
possible.
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 B. SOFT HRM

• It stresses on the 'human' aspects of HRM.

• Its concerns are communication and

motivation.
• People are led rather than managed.

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 1.2 Importance of HRM
 to achieve “competitive advantage through people”.
 Creation of a better image
 More Profits
 Higher Productivity
 More Competent People
 Better Generation of Internal Resources
 More Team-work, Synergy and Respect for Each Other
 More Problem Solving skill & ability
 Higher Work-commitment and job Involvement
 Growth and Diversification
 Better Developed Roles
 Better Utilization of Human Resources

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  In general, Good HRM practices help
organizations in many ways like:-
attracting and retaining the best people in
the organization.
alerts the company to the types of people it
will need in the short, medium and long run.
appropriate recruitment and selection
activities identify the best people for available
jobs and make sure they are placed in suitable
positions.
Motivate organizational members to
perform outstanding tasks.
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 1.3 Evolution and Development of HRM
( Group Assignment)

Do it with your group members &

came with a term Paper for
presentation

Deadline; 27/03/2015 E.C

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 1.4. Objectives Of HRM

Objectives of HRM are:-

I.Personal objectives
II.Organizational objectives
III.Societal objectives and
IV.Functional Objectives

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 I. Personal objectives
The objective of HRM is to have:-

-highly committed,

-eligible/qualified,

- talented, and happy workers

Organizations need employees for the

fulfillment of these organizational

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objectives.
 Personal objectives…..cont’d

An individual person has the objective of

enhancing his/her personal growth and seeks the
organization for realization of this personal
growth.
There is an element of mutuality of interests here.
Individual and organization need each other for
fulfillment of their objectives.
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 II Organizational Objective
The objective of HRM is to bring about the overall

organizational growth & development.

so as to attain organizational objectives HRM:-
 develops individual capabilities ,

 ensures that well qualified employees are retained & worked

 Uses effective employee motivation & excellent utilization strategies

 improves the employees’ working skill & capacity provides

 Creates healthy r/p b/n different work groups.

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 III. Societal Objectives
Here the objective of HRM is to do maximum good to the
society & to minimize the effects of social problems.
 keep societies welfare including safe products &

healthy environment.
serving the customers honestly,
providing a higher standard of living in the
community,
bringing comfort and happiness to society,
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 Societal Objectives…con’td

using resources to the society benefit,

Being responsive to the needs and challenges of
the society,
Equal Employment Opportunity (employing the
disadvantaged groups of the society, etc.)
fair treatment, minimum pay, working hours,
affirmative actions, etc.
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 IV. Functional Objectives

The objective of HRM is to develop an

effective HR function for development
and maintenance of human resource
functions.
HRM also has the objective of
maintaining an excellent HR culture.
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 HRM FUNCTIONS
Human Resource Planning

 Matching internal demand and external supply of people with

anticipated job openings over specified period of time

 Sets the stage for recruitment or other HR actions

Recruitment and Selection
Recruitment is the process of attracting enough qualified people
to apply for jobs with an organization.
Selection choosing individual best suited for a particular
position and the organization in general.
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 HRM FUNCTIONS…CON’TD
Orientation

• It is the formal process of familiarizing new employees

with the organization, their job, and their work unit.

Training and Development

 Training: Providing learners with knowledge and skills

needed for their present jobs (short term focus).

 Development: Offering learning that goes beyond present

job (Long-term focus).

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 HRM FUNCTIONS…CON’TD
Compensation
 All rewards that individuals receive as a result
of their employment

Performance Appraisal

 Is a formal system of review and evaluation of

individual performance.

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 HRM FUNCTIONS…CON’TD
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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 HRM FUNCTIONS…CON’TD
Promotions, transfers, demotions and separations
High performers may be promoted or
transferred to help them develop their skills,
Low performers may be demoted,
transferred to less important positions, or
even separated.

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 HRM FUNCTIONS…CON’TD

Human Resource Research

• Human resource research is a systematic
gathering, recording, analyzing, and
interpretation of data for guiding human
resource management decisions.

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 The End of the
Chapter
Thank You
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 CHAPTER 3
7

5 08:53 AM
02/15/202
overview of HRM
TWO
HUMAN RESOURCE
MANAGEMENT
ENVIRONMENTS
 Human Resource Management Environment

 The term 'environment' here refers to all factors

which influence both the organization and personal
employee.
 The analysis of the environment (internal and external)
all together is called SWOT analysis
 Analysis of the environment is useful for the HR
manager to become proactive and not remain reactive
to the environment.
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 Human Resource Management Environment con’td

• Both external & internal factors can influence the

HR function of any organization.
• Hence the job of HR manager is to balance the
demands and expectations of the external
groups with the internal requirements and
achieve the assigned goals in an efficient and
effective manner.
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 2.1 Types of HRM Environments

1.External Environment

External Environments are those factors that

are outside the organization, they are largely

uncontrollable/beyond management’s control.

and provide opportunities and threats (OT) to

the organization.
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 1.External Environment Con'td

• It usually includes the Political /Legal (laws &

regulations), Economic, Socio-Cultural and
Technological (PEST) factors and, location,
and labour market conditions.
• Thus analysis of external environment is some
times called PEST analysis.
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 1.External Environment Con'td
A. Political/Legal
 Governments enact different laws that affect human
resource management. Some of the laws include:
• Equal employment opportunities,
• Affirmative actions
• wages and salaries (Compensation and benefit )
• Safety and health,
• Hours of work, holidays,
• Industrial relations etc.

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 1.External Environment Con'td

Equal Employment Opportunity:

prohibit Discrimination
Forbids discrimination in all areas of the
employment relationship.
Government laws require providing applicants
an equal opportunity for employment with
regard to race, religion, sex, disability, age or
national origin (ethnicity), compensation
(payment on similar jobs) etc.

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 1.External Environment Con'td
prohibit Discrimination
The law sets requirements on selection
instruments such as tests and interviews.There
for there should not be discrimination
(negative) during recruitment and selection of
candidate employees.
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 1.External Environment Con'td

Affirmative Action
• It is taken for the purpose of eliminating the present
effects of the past discrimination. It is the practice
of recruiting, hiring or staffing underrepresented /
underemphasized groups or minorities, such as
women, veterans & the disabled, and the
disadvantaged groups of the society.

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 1.External Environment Con'td
Compensation and Benefits
Fair Labor Standards Acts
 Sets a minimum wage and requires overtime pay for
work in excess of 40 hours per week.
Employee Retirement Income Security
• Sets standards for pension plan management and
provides federal insurance if pension plans go
bankrupt.
Family and Medical Leave Act
• Requires employers to provide up to 12
weeks of unpaid leave for family and
medical emergencies.
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 1.External Environment Con'td
Health and Safety
Occupational Safety and Health Act (OSHA)
requires that employers:

•Provide a place of employment that is free from

hazards that may cause death / serious physical harm.
•Obey the safety and health standards established by
Occupational Safety and Health Administration
(OSHA).
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 1.External Environment Con'td
Labor Relations
 Sets Laws (labor Law) on how employers and
employees relationship is governed by:
•Right to join union
•Establishing union
•Rights and obligations of employees and employers
•Bargaining in good faith etc.
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 1.External Environment Con'td
B. Economic Environment of HRM
 business cycle,
 inflation rate,
 Growth strategy,
 Industrial production (productivity),
 Agriculture,
 Population, National & per capita income (income level),
 Money and capital markets,
 The task/specific environmental factors (competitors,
suppliers, customers & industrial labor …)
 GNP, an employment rate,
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 1.External Environment Con'td
Industrial production (productivity)
 Recruitment & selection techniques  attract and hire the best

performers.
 Motivational & compensation techniques  retain employees

and improve job performance.

 Training & development  improve skill and competency

deficiencies that, in turn, increase performance.

 Employee involvement (e.g. quality circles and labor
management committees) and relating pay directly to
performance.
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 1.External Environment Con'td
Suppliers
For the HR department, suppliers are those who
provide human resources to an organization.
The sources that supply human resources are:
• Employment exchanges,
• Universities, Colleges, Training institutes,
• Consulting firms, Casual –labor contractors,
• Competitors and the like

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 1.External Environment Con'td
Customers
• Customers want high-quality products at
reasonable prices.
• So, everybody in the organization must
endeavor to offer products that give
satisfaction for the money customers pay.
• Sales are often affected by product quality that
is directly related to the skills and
qualification of the organization’s
employees.
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 1.External Environment Con'td
Industrial labor
• The industrial labor is characterized by
increasing diversity.
• Workforce of any factory comprises people
from different countries. Within this
diversity of national origins, there is an even
wider diversity of cultures, religions,
languages and dialects / idioms, educational
attainment, skills, values, ages, races, gender
and other differentiating variables.
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 1.External Environment Con'td
• Though they work together, they maintain their
distinct identities, diverse cultural moorings and
separate life styles.
• Diversity, if properly managed, can increase
creativity and innovation in organizations as
well as improve decision making by providing
different perspectives on problems.
• When not managed properly, diversity may lead
to higher turnover, heightened interpersonal
conflicts and more difficult communication.
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 1.External Environment Con'td

• Thus HRM needs to manage this diversity by being

aware of common characteristics as well as each

individual’s identity.

• It means not just tolerating or accommodating all sorts

of differences but supporting, nurturing / encouraging

and utilizing these differences to give the organization

a competitive edge.
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 1.External Environment Con'td
GNP, per capital income, an employment rate,
inflation rate
A. If the economy is booming
 unemployment rate is low, it may be harder to acquire
and retain the staff.
• when the economy expands, during recovery and boom
period, demand for the product will be high; this makes
production level high and demands more employees.

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 1.External Environment Con'td
• At this time hiring new employees and training
programs may be needed.
• Higher wages /salaries, and better benefit
become serious burden.
• Therefore, to retain competent employees, it is
necessary to improve benefit packages and
working conditions.
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 1.External Environment Con'td
B. In times of economic decline

 Unemployment rate increases and a greater choice of

labor is available to the employer.

• when the business cycle turns downward, During recession

and depression demand for the product will decline or

decrease and this leads to the reduction in the production

level, and as a result it forces to reduce the number of

employees.
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 1.External Environment Con'td
Geographic location of the organization
• The location of the organization influences the kinds
of people it hires and the HRM activities it conducts.
• An urban location might be advantageous for
recruiting and holding professional workers.
• Urban locations provide a bigger labor force but
generally call for higher wages.

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 1.External Environment Con'td

• The work force in rural area might be more

willing to accept a bureaucratic organization
style.
• Recruiting and selection in rural areas will be
different in that there may be fewer applicants
or larger proportion of hirable workers.

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 1.External Environment Con'td

Labor market conditions

• Exchanges between employers and potential
employees occur in the labor market. Information is
exchanged about opportunities, requirements & skills.
• When there are more workers than jobs, employers
find recruiting costs minimal. Employees apply
readily, and selection is less difficult.

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 1.External Environment Con'td
• A surplus of labor can also reduce employee
pressures for compensation and benefits
increases.
• Disciplinary problems, absenteeism, and
turnover are likely to decrease, and equal
employment opportunity goals may be easier
to fill.
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 1.External Environment Con'td
Factors affecting the relevant labor market

i. Occupations (qualifications and skills

required)
• Licensing and certification requirements, as
well as training and education, set limits on
who is in a labor market for a specific
occupation.
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 1.External Environment Con'td
ii. Geography (distances employees are willing to
relocate or commute).
• Qualifications interact with geography to further
narrow the relevant labor markets.
• Qualified professionals are recruited nationally and
internationally; technicians, craft workers, and
operators are recruited regionally and office workers
locally.
• As the importance and complexity of job qualifications
increase, the geographic scope increases.
iii. Competing employers with similar products and
services.
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 1.External Environment Con'td

C. Socio-cultural Environment of HRM

These factors are created by the society on human
resource management, such as demographic factors
(age, gender, race, and language) and culture (belief,
habit and custom /religion of the society.

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 1.External Environment Con'td
culture
• First , culture creates the type of people and sets
their personality.
• Secondly, the attitude of workers towards work is
the result of their cultural background. If the
culture of the society promotes work, then tasks
will be performed with interest, dedication and
pride.
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 1.External Environment Con'td

• Thirdly, time dimension / orientation refers to

people’s orientation towards the past, present or
future.
• Fourth , work ethics /moral principles hard
working habits and commitment to work,
achievement needs and effort-reward expectations,

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 1.External Environment Con'td

D. Technological Environment of HRM

 Technological environment such as the
introduction of new technology.
 New technologies require new job designs.
 Technological change creates uncertainty &
need for new ways to manage employees.

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 1.External Environment Con'td

• TQM advocates emphasize the importance of

achieving greater quality and flexibility at
lower cost and waste.
• Competitive benchmarking is the first
requirement to effective TQM. Benchmarking
is a continuous process.
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 2. The Internal environment
 The influences that are under the internal environment have
an impact on HR activities.
 Some of the internal factors include

• Vision, mission, goals, objectives, Values, and strategies

• Rules, regulations, policies, Procedures
• organizational ( management) style,
• leadership style and experience,
• Organizational Structure,
• nature of the task,
• work group and Labor unions
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 2. The Internal environment….Con'td
Labor unions
A trade union may be understood as an

association of workers formed to protect their

own individual interests.
Unions differ just as people differ. There are

cooperative unions & combative/aggressive

unions.
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 2. The Internal environment….Con'td

The presence of a union directly affects

most aspects of HR activities - recruiting,
selection, training, performance evaluation,
promotion, compensation, and benefits,
separation etc are conducted in consultation
with union leaders.

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 2. The Internal environment….Con'td
Organizational Goals
• The goals of organizations differ within and between
departments.
• All departments probably have goals that include
adaptability to change. survival, employee
satisfaction, and profit maximization
• The differences arise in the importance of the
goals.
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 2. The Internal environment….Con'td
The goal of an organization may be of two types
profit maximization and employee
satisfaction.
In profit maximizing organizations increasing
employee satisfaction is paid only minimal
attention. & is not well developed.
The result of such negligence is typically
problems in the effectiveness area of the
diagnostics model (example, high absenteeism,
performance decrements, and high grievance
rates)
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 2. The Internal environment….Con'td

Organizational style

bureaucratic approach
• centralized decision-making

participative /Democratic approach

• decentralized decision-making

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 2. The Internal environment….Con'td
Leadership style and experience

Autocratic style
 The autocratic leader understands the strength of authority.

 Autocratic leaders are not interested in opening up the

decision-making process to the entire group.

 Instead, they choose to bear the leadership completely
alone.
 They expect those who fall under their authority to follow
orders.
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 2. The Internal environment….Con'td
Democratic style
A democratic leader encourages the free exchange of
ideas throughout the team.
All members have a valued voice and the leader
acts as a spokesperson or facilitator.
Democratic leaders rely on the participation of every
member of the group.
They emphasize the value and expertise each
member brings to the table.
Every team member shares the freedoms and
responsibilities of leadership.
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 2. The Internal environment….Con'td

Laissez-faire /“hands-off” style

 avoid decision-making
 The manager provides minimal direction and
supervision to the staff.
 The key to using this method is having well
trained and efficient directors who can work
as intermediaries between you and your
employees.
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 2. The Internal environment….Con'td
Nature of the task
• The type of the task to be performed in an
organization highly affects human resource
management.
• This is because some jobs can attract or
retain workers, while others might be the
causes of high labor turnover.
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 2. The Internal environment….Con'td
Task conditions which may affect HRM are
• Degree of physical exertion required
• Degree of environmental pleasantness
• Physical location of work
• Time dimension of work
• Degree of human interaction
• Degree of variety in the task
• Task identity
• Task differences and job design
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 2. The Internal environment….Con'td
Work Group
• Groups play a major role in the life of an individual
as well as the effectiveness of the organization.
• If the work group is effective and works with
management, the manager’s job is easier, and
objectives are more likely to be achieved.
• If the group is working against the manager, an
effort must be made to change the group’s norms
and behavior by the use of the manager’s
leadership, discipline, and reward powers, or by
the transfer of some group members.
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 2. The Internal environment….Con'td
 An effective group is one whose:
• Numbers are small (7-14).
• Members have an eye contact & work closely
together.
• Members function and act as a team.
• Members participate fully in group discussion.
• Group goals are clearly developed.
• Resources are adequate to achieve group goals.
• Members furnish many useful suggestions leading
to goal achievement.
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 2. The Internal environment….Con'td
• Members have stability.

• members have similar backgrounds.

• Membership is composed of persons who depend

on the group to satisfy their needs.
• Members help the organization to achieve their
goals.
• serve for their members’ social needs.
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 MODELS OF HRM

Reading Assignment

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