Chapter 1
The Nature of Human Resource
Management
Chapter 1 Objectives
1. Describe contemporary human resource management
perspectives.
2. Trace the evolution of the human resource function in
organizations.
3. Identify and discuss
the fundamental goals of human resource management.
4. Describe the job of human resource managers from the
perspectives of professionalism and careers.
5. Discuss the setting for human resource management.
What are Human Resources?
The people an
organization
employs to carry out
various jobs, tasks,
and functions in
exchange for wages,
salaries, and other
rewards.
What is Human Resource Management?
The comprehensive set of
managerial activities and
tasks concerned with
developing and maintaining
a qualified workforce—
human resources—in ways
that contribute to
organizational effectiveness.
What are Some Contemporary HRM
Perspectives?
Recognizing the importance of people as
a source of competitive advantage
Hiring, rewarding, and managing people
effectively within the limits of the law
Balancing legal and ethical concerns
with the needs of the organization
How has HRM Evolved?
Evolution of the Human Resource Function
Scientific Management,
Was concerned with how to
structure jobs to maximize
efficiency and productivity.
The Human Relations Era
Emphasized keeping workers
happy, since “happy workers
were productive workers.”
HR Specialists
The 1964 Civil Rights Act and
other legal regulations made
hiring and promoting
employees more complex
Personnel Management.
Organizations grew and
created personnel
departments to work with
employees.
What is HRM Like in the Electronic Age?
Electronic technology
has not drastically
affected how human
resources are
managed, but certainly
is affecting on how
HRM systems are
delivered.
What are Some Emerging HRM Challenges?
What are Some Emerging HRM Challenges?
Did You Know?
Human Capital
What are the Goals of HRM?
Facilitating
Organizational
Competitiveness
Enhancing
Productivity and
Quality
Complying with
Legal and Social
Obligations
Promoting
Individual
Growth and
development
What are the Goals of HRM?
Facilitating Organizational Competiveness
• Firms gain competitive advantage by effectively managing
their human resources.
• Competitive advantage is a status achieved by a company
when gaining a superior marketplace position relative to its
competition.
• This is accomplished through cost leadership or product
differentiation.
What are the Goals of HRM?
Facilitating Organizational Competiveness
Management of human resources is less
susceptible to imitation.
The competitive advantage achieved through
HRM practices is likely to be more sustainable.
– Competitors rarely have access to a firm’s HRM
practices; the practices are not very visible to
outsiders.
– Even when these practices are visible, their impact
may not be as favorable when used by competitors.
What are the Goals of HRM?
Enhancing Productivity and Quality
Studies have indicated:
• A strong link between HRM effectiveness and productivity.
• The impact of a broad range of HRM practices on
shareholder return; 15–30 percent of the total value of a
company could be attributed to the quality of its HRM
practices.
What are the Goals of HRM?
Enhancing Productivity and Quality
Jeffrey Pfeffer identified these 16 HRM practices as contributing to
productivity and quality:
Employment security
Training and skill development
Selectivity in recruiting
Cross-utilization and cross-training
High wages
Symbolic egalitarianism
Incentive pay
Wage compression
Employee ownership
Promotion from within
Information sharing
Long-term perspective
Participation and empowerment
Measurement of practices
Teams and job redesign
Overarching philosophy
What are the Goals of HRM?
Complying with Legal and Social Obligations
• Impact of anti-discrimination laws
• The impact of government intervention
• Impact of social obligations
What are the Goals of HRM?
Promoting Individual Growth and Development
Education
Skills training
Career
development
Who is Responsible for Developing and
Implementing HRM Practices?
• Human resource professionals (staff):
– Establish HRM procedures and methods.
– Monitor and evaluate HR practices.
– Advise and assist managers on
HRM-related matters.
• Line managers:
– Direct employees’ day-to-day tasks.
– Implement HRM practices.
– Provide HR professionals with needed inputs for
developing effective practices.
How is HRM Handled in Smaller Companies?
• Small organizations use operating
managers to handle basic HR functions.
• Small independent businesses generally
operate in the same way as small
organizations.
• Very small organizations are exempt
from many legal regulations.
How is HRM Handled in Larger Companies?
• As an organization grows, a separate
HR unit becomes a necessity.
– At 200 to 250 employees, it establishes
a self-contained HR department.
– As growth continues, the HR
department develops into specialized
departments.
How is HRM Handled in Larger Companies?
HRM Function at Texas instruments
What is a Human Resource
Management System?
An integrated and interrelated approach to
managing human resources that fully recognizes
the interdependence among the various tasks
and functions that must be performed.
What is a Human Resource
Management System?
• The HRM subsystem both affects and is
affected by other organizational
subsystems.
• Utility Analysis
– The attempt to measure, in objective terms,
the impact and effectiveness of HRM
practices in terms of metrics such as a firm’s
financial performance.
How Does Someone Enter the
HR Field?
• Careers in HR are expected to continue to
grow.
• How to enter the HR field:
 Earn a degree—a master of science or MBA
in HR.
 Seek an entry level job, and become a line
manager.
 Join SHRM