HUMAN RESOURCE
MANAGEMENT
Chapter 1
BBA223
Charmaine Chan
WHAT IS HUMAN RESOURCE
MANAGEMENT?
• Managing people within the employer-employee
relationship.
• It involves the productive use of people in
achieving the organisation’s strategic business
objectives and the satisfaction of individual
employee needs.
• HRM is either a part of the problem or part of
the solution in gaining the productive
contribution of people.
• The HR manager, as with any other functional
manager in marketing, production or finance, is
responsible for performance.
• His or her position exists foremost to help
achieve the strategic business objectives of the
organization.
• The HR function is recognised for contributing
to the ‘bottom line (which refers to a final result
such as net profit after taxes).
HRM AND MANAGEMENT
• HRM a part of management, which dealing
directly with people, whereas management also
includes marketing , R&D, production and
accounting and finance.
• Because the purpose of HRM is to improve the
productive contribution of people, it is intimately
related to all other aspects of management.
Who is responsible for HR?
• HRM functions are not necessarily executed by a HR
specialist or department, can be line or operating
managers.
• How the HR functions are divided between the HR
department’s specialists and the organisation’s other
managers varies from situation to situation and
depends on a vast number of circumstantial factors.
Circumstantial Factors
Internal factors:
• organisational history,
• Size, structure and location,
• the values, philosophies and management styles
of top management,
• the nature of the workforce,
• the type of industry.
External factors:
• economic conditions,
• legislative requirements,
• industrial relations.
Myths that keep HR as profession
Old Myths
• People go into HR because they
like people.
• Anyone can do HR.
New Realities
HR departments are not designed
to provide corporate therapy or to
act as social or health-andhappiness retreats. HR
professionals must create the
practices that make employees
more competitive, not more
comfortable.
HR activities are based on theory
and research. HR professionals
must master both theory and
practice.
Old Myths
•
HR deals with the soft side of
business and therefore is not
accountable.
•
HR focuses on costs, which must be
controlled.
•
HR’s job is to be the policy police
and the health-and-happiness patrol.
New Realities
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HR is full of fads.
The impact of HR practices on
business results can and must be
measured. HR professionals must
learn to translate their work into
financial performance.
HR practices must create value by
increasing the intellectual capital
within the firm. HR professionals
must add value, not only reduce costs.
The HR function does not own
compliance.
HR practices have evolved over time.
HR professionals must see their
current work as part of an
evolutionary chain and explain their
work with less jargon and more
authority.
Old Myths
• HR is staffed by nice people.
• HR is HR’s job.
New Realities
• At times, HR practices should force
vigorous debates. HR professionals
should be confrontative, challenging
and supportive.
• HR work is as important to line
managers as are finance, strategy,
and other business domains. HR
professionals should join with
managers in championing HR issues.
APPROACHES TO HRM
• Instrumental HRM (hard approach): stresses the
rational, quantitative and strategic aspects of
managing human resources.
• Humanistic HRM (soft approach): while
emphasizing the integration of HR practices with
strategic objectives, it stresses competitive
advantage is achieved by employees with superior
know-how, commitment, job satisfaction,
adaptability and motivation.
The New Role of HR Managers
STRATEGIC PARTNER
• HR professionals play a strategic role when they have the ability to
translate business strategy into action. This facilitating role allows the
HR manager to become part of the business team.
ADMINISTRATIVE EXPERT
• To become administrative experts HR professionals must be able to reengineer HR activities through the use of technology, process
engineering and total quality management.
EMPLOYEE CHAMPION
• The HR professional must be able to relate to and meet the needs of
employees
CHANGE AGENT
• The HR manager needs to serve as a catalyst for change within the
organization, which includes leading change in the HR function and by
developing problem-solving communication and influence skills. In
short, the HR manager must know how to manage change.
HRM ACTIVITIES
• Job analysis
Defines a job in terms of specific tasks and responsibilities and
identifies the abilities, skills and qualifications
• Human resource planning or employment planning :
The process attempts to ensure that it has the right number of
qualified people in the right jobs at the right time.
• Employee recruitment
The process of seeking and attracting applicants from which
qualified candidates for job vacancies
• Employee selection
involves choosing the appropriate candidates
HRM ACTIVITIES
• Performance appraisal
Concerned with determining performance of employees,
communicating that information to the employees and establishing
a plan for performance improvement.
• Training and development
Activities help employees learn how to perform their jobs,
improve their performance and prepare themselves for more
senior positions.
• Career planning and development
Activities that identifies employee career goals, possible future job
opportunities and personal improvement requirements, and
ensuring the availability of qualified employees .
• Employee motivation
To motivate employees so to achieve more productivity and lower
rates of absenteeism, turnover and lateness.
HRM ACTIVITIES (con’t)
• Compensation
Refers to the cash rewards, such as the base salary, bonus,
incentive payments and allowances
• Benefits
Refer to as indirect or non-cash compensation.
• Effective health and safety programs
Help guarantee the physical and mental wellbeing of employees.
• Management of diversity
Successfully integrating multi-cultural population into the work
force maximises the contribution of all employees.
WHAT IS STRATEGY
• Defines the direction in which an
organization intends to move and establishes
the framework for action by which it intends
to get there.
Technological
Demographic
Environmental
Social
Cultural
Legal
Political
ASSESS INTERNAL AND EXTERNAL INFLUENCES
Business
Industrial Relations
Economic
ORGANISATIONAL PURPOSE
ORGANISATIONAL OBJECTIVES
STRATEGY
STRUCTURE
CULTURE
HUMAN RESOURCE MANAGEMENT OBJECTIVES
What is to be achieved
HRM AUDIT
Evaluation of performance
HUMAN RESOURCE MANAGEMENT STRATEGY
How it is to be achieved
HRM OUTCOMES
Commitment
Competence
Cost-effectiveness
Congruence
Adaptability
Performance
Job satisfaction
Motivation
Trust
HRM RESOURCE ACTIVITIES
Acquisition
Development
Reward and motivation
Maintenance
Departure
Internal environment
What are our strengths?
What are out weaknesses?
• Skilled work force
•Superior quality products
• Financial strength
• Excellent research and development
• High labour costs
• Poor industrial relations
• Poor customer service
• Management succession problems
• Lack of international marketing
expertise
External environment
What are our opportunities?
•New markets in Asia
•Low inflation
•Weak competition
Decentralisation of industrial
Relations/enterprise bargaining
SWOT analysis
What are our threats?
• Increased government regulation
• High taxation
• Domestic shortages of skilled labour
• Rising costs of imported raw materials
STRATEGIC INTENT
• Companies that have achieved global leadership,
have created a sustained obsession to achieve a
challenging long-term objective. This obsession is
called strategic intent.
• Achieve this requires organisations to move from
their traditional conscript mindset (externally
motivated) to a volunteer mindset internally
motivated).
Strategic Intent
Establish a mission and key objectives
F
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D
B
A
C
K
Analyse the environment
Analyse and select business strategies
Implement the strategies
Monitor and evaluate performance
TYPES OF STRATEGIES
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Growth
Retrenchment
Stability
Combination
HRM STRATEGY can help an organization
to achieve strategic objectives by:
• Recognizing the value of people in all business
processes
• Seeing that all concerned appreciate the HR implications
of their proposals
• Achieving a close match between corporate business
objectives and objectives of the HR function
• Designing a culture, climate and organizational
processes conducive to optimal performance of staff
• Identifying the firm’s distinctive competencies and the
types of people that match these competencies.
• Assessing the performance requirements
• Reviewing levels of commitment
STRATEGIC HRM OBJECTIVES CAN BE
LINKED TO STRATEGIC OBJCTIVES SUCH AS:
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Cost containment
Customer service
Social responsibility
Organizational effectiveness
ASSESSMENT OF
INFLUENCES
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Where are we now?
Where do we want to be in the future?
What path is best for us?
How and when can we implement it?
EXTERNAL INFLUENCES
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Political
Legal
Environmental
Technological
Cultural
Demographic
Social
Business
Economic
Industrial relations
INTERNAL INFLUENCES
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Organizational mission and purpose
Objectives and strategies
Organizational culture
Organizational structure
OUTCOMES IN EVALUATING HRM
STRATEGIES AND POLICIES
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Commitment
Competence
Cost-effectiveness
Congruence
Adaptability
Performance
Job satisfaction
Employee motivation
Trust