1

HUMAN
RESOURCES
MANAGEMENT
(2)
HR ROLE AND FUNCTIONS
HUMAN CAPITAL
2 21 C - HUMAN CAPITAL

• Human as the competitive edge

(Drucker 1999)  Human Capital
• Human capital refers to the
acquired skills, knowledge, and
abilities of human beings. The
underlying concept is that such skills and
knowledge increase human productivity and
that they do so enough to justify the costs
incurred in acquiring them (Hornbeck &
Salamon, 1991)
3 21 C - HUMAN CAPITAL

• The scope of human capital is limited

to the mind of an employee. It is the
hardest of the three sub-domains of
intellectual capital to codify and can be
measured as a function of volume (Bontis,
1998).
 4 HUMAN AS CAPITAL

• Human capital is the source of innovation and strategic

renewal (Stewart, 1997).
• The human capital value-adding potential of individuals grows
when pools of human capital are created with unique
configurations of complementary skills and tacit
knowledge (Bontis, 1999).
• Saint-Onge (cited by Sullivan, 2000) states that human capital
has both individual and collective knowledge, know-how
and relationship dimensions.
• Human capital represents the stock of knowledge that exists
at individual level in an organisation (Bontis, et al., 1999).
 HUMAN CAPITAL IS THE COLLECTION OF
5 INTANGIBLE RESOURCES AS EMBEDDED IN
THE PEOPLE OF THE FIRM

• Human capital is the collection of intangible resources

as embedded in the people of the firm.

• Three types of resources can be identified (Bontis,

et al., 1999; Roos et al., 1997):
- Competencies based on skills and knowledge.
- Attitudes as reflected in the motivational level
within the firm and the leadership qualities of
management.
- Intellectual agility as the ability of people in
the firm to innovate, adapt and to cross -fertilise.
 6 HUMAN CAPITAL

• Human Capital – an organization’s employees described in

terms of their:
• training
• experience
• judgment
• intelligence
• relationships
• Insight
• The concept of “human resource management” implies that
employees are resources of the employer.
SOURCE:Mondy, 2007

7
8 HUMAN RESOURCE
MANAGEMENT (HRM)
• The policies, practices,
and systems that
influence employees’:
• Behavior
• Attitudes
• Performance
 I/O Psychology and Strategic
HRM
9

Strategic
HRM

Customer
Service
and
Innovation

Competency-based HRM
Terminatio
n

Organizational
 Training &
Development
10 THE HRM PROCESS
Job Analysis It is all about
and Design LEARNING

(Robbins, 2010)
11 AT 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 favorable reputation in the
community
12 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 and
knowledge are sometimes rare.
• Human resources cannot be imitated.
• Human resources have no good substitutes.
 HIGH-PERFORMANCE WORK
13 SYSTEM

• An organization in which
technology, organizational
structure, people, and processes all
work together to give an
organization an advantage in the
competitive environment.
 ENGAGED, ENABLED EMPLOYEES
14
DELIVER BOTTOM-LINE BENEFITS
15 RESPONSIBILITIES OF HR DEPARTMENTS
16 ANALYZING AND DESIGNING JOBS

JOB ANALYSIS JOB DESIGN

• The process of • The process of

getting detailed defining the way
information about work will be
jobs. performed and the
tasks that a given
job requires.
17 RECRUITING AND HIRING
EMPLOYEES
RECRUITMENT SELECTION
• The process through • The process by which the
which the organization organization attempts to
seeks applicants for identify applicants with
potential employment. the necessary knowledge,
skills, abilities, and other
characteristics that will
help the organization
achieve its goals.
 TOP QUALITIES EMPLOYERS SEEK
18 IN JOB CANDIDATES
19 TRAINING AND DEVELOPING EMPLOYEES

TRAINING DEVELOPMENT
• A planned effort to • The acquisition of
enable employees to knowledge, skills, and
learn job-related behaviors that improve
knowledge, skills, and an employee’s ability
behavior. to meet changes in job
requirements and in
customer demands.
20 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
measuring performance.
21 PLANNING AND ADMINISTERING PAY
AND BENEFITS

PLANNING PAY & BENEFITS ADMINISTERING PAY &

BENEFITS
• How much to offer in salary • Systems for keeping track
and wages. of employees’ earnings and
• How much to offer in benefits are needed.
bonuses, commissions, and • Employees need
other performance-related information about their
pay. benefits plan.
• Which benefits to offer and • Extensive record keeping
how much of the cost will and reporting is needed.
be shared by employees.
22 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.
23 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.
24 ENSURING COMPLIANCE
WITH LABOR LAWS
• Government requirements include:
• 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.
25 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.
26 SUPPORTING THE
ORGANIZATION’S
STRATEGY
• Evidence-based HR– Collecting and
using data to show that human
resource practices have a positive
influence on the company’s bottom line
or key stakeholders.
27
SUPPORTING THE
ORGANIZATION’S STRATEGY
CORPORATE SOCIAL
STAKEHOLDERS
RESPONSIBILITY

• A company’s • The parties with an

commitment to interest in the
meeting the needs of company’s success
its stakeholders. (typically,
shareholders, the
community, customers,
and employees).
SKILLS OF HRM PROFESSIONALS
28
29 WHO IS RESPONSIBLE FOR HR?

• In an organization, who should be

concerned with human resource
management?
A. Only HR departments
B. Only Line Managers
C. Line Managers and HR departments
 LINE MANAGER’S INVOLVEMENT IN HRM
30
 ETHICS IN HUMAN RESOURCE
31
MANAGEMENT

• Ethics – the fundamental principles of right and

wrong.
• Ethical behavior is behavior that is consistent
with those principles.
• Many ethical issues in the workplace involve
human resource management.
32
EMPLOYEE RIGHTS

Right of Right of
Right of
free freedom of
privacy
consent conscience

Right of
Right to
freedom of
due process
speech
 ETHICAL COMPANIES ACT
33 ACCORDING TO FOUR PRINCIPLES:

1. In their relationships with customers,

vendors, and clients, ethical companies
emphasize mutual benefits.
2. Employees assume responsibility for the
actions of the company.
3. The company has a sense of purpose or
vision that employees value and use in
their day-to-day work.
4. They emphasize fairness.
34
STANDARDS FOR IDENTIFYING
ETHICAL PRACTICES
 STANDARDS FOR IDENTIFYING ETHICAL
35 HUMAN RESOURCE MANAGEMENT
PRACTICES

1. HRM practices must result in the greatest good

for the largest number of people.
2. Employment practices must respect basic
human rights of privacy, due process, consent,
and free speech.
3. Managers must treat employees and customers
equitably and fairly.
 36 SUMMARY

• Human resource • HR management requires

management (HRM) consists substantial human relations
of an organization’s “people
practices” skills, including skill in:
• the policies, practices, • communicating
and systems that • negotiating
influence employees’
behavior, attitudes, and • team development
performance.
• HR professionals also need:
• HRM influences who works
for the organization and how • To understand the language
those people work. of business
• HR departments have • To be a credible with line
responsibility for a variety of managers and executives
functions related to acquiring
and managing employees. • To be strategic partners
37 SUMMARY (CONTINUED)

• Non-HR managers must be • The decisions of HR professionals

familiar with the basics of should:
HRM and their own role with • Result in the greatest good for
regard to managing human the largest number of people.
resources.
• Respect basic rights of privacy,
• Supervisors typically due process, consent, and free
have responsibilities speech.
related to all the HR
• Treat employees and customers
functions.
equitably and fairly.
• HR professionals should
• Careers in HR management may
make decisions consistent
involve specialized work in fields
with sound ethical
such as recruiting, training, or
principles.
compensation