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Introduction to Human Resource Management

(HRM)

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What Is Management?

Managers perform 5 basic functions:

Planning, Organizing, Staffing, Leading, and Controlling.

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Managers Perform 5 Basic Functions

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Planning Because organizations exist to achieve some

purpose, someone has to define that purpose and find ways to achieve it. A manager is that someone and does this by planning.

Planning includes: Defining goals Establishing strategy Developing plans to coordinate activities To ensure that: work to be done is kept in proper focus organizational members keep their attention

on what is important.

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Organizing Managers are also responsible for

arranging and structuring work to accomplish the organization’s goal. This function is called organizing.

It includes: Determining what tasks are to be done

and by whom, how tasks are to be grouped, who reports to whom, and where decisions are to be made.

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Leading Part of a manager’s job is to direct and

coordinate the work activities of employees. This is the leading function.

Leading includes: Motivating employees Directing the work activities of others Selecting the most effective

communication channel Resolving conflicts among employees.

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Controlling Controlling involves monitoring, comparing,

and correcting work performance. After the goals are set, the plans formulated,

the structural arrangements determined, and the people hired, trained, and motivated, there has to be some evaluation to see if things are going as planned.

Any significant deviations will require that the manager get work back to track.

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Staffing Staffing involves HR activities in creating and

maintaining a workforce. It involves: Evaluating organization’s needs and develop

plans to meet those needs (HR planning). Analyzing job requirements to develop a

picture of the jobs that people will be doing and the competencies required to do those jobs well (job analysis).

Recruiting people to fill jobs and maximizing the retention rates of those who perform well in the jobs (attracting, selecting, placement, and retaining).

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What Is HRM?

Heavily involves in the staffing function

It is about the utilization of employees to achieve organizational objectives.

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What Is HRM?

Definition: The policies and practices involved

in carrying out the “people” or human resource aspects of a management position, including recruiting, training, appraising and rewarding employees.

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HR Activities or Functions Human resource planning Staffing (recruitment, selection, placement, and

retaining employees) Human resource development (training) Performance management (performance appraisal

or evaluation) Compensation and benefits (rewards) Grievances and disciplines (employment relations) Employee safety and health (well-being) Industrial relations (management-employee

relations)

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Interrelationships of HRM Functions Examples: Recruitment and selection (staffing)

will have an impact on training (HR development) and vice versa.

Training will have an impact on performance appraisal (performance management), which in turn, will affect compensation of the employees.

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Questions

Are managers of various functional areas (production, marketing, finance, and others) involved in HR activities?

Or, just the HR managers involve in HR activities?

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HR Aspects of A Manager’s Job

HR—The people aspects of the management job:

Conduct job analysis. Plan manpower needs, recruit, and

select job applicants. Place the right people on the right

job.

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HR Aspects of A Manager’s Job

Orient new employees. Train employees for jobs that are new

to them, upgrade the skills and develop the abilities of the existing employees.

Manage wages, incentives, and benefits.

Appraise performance to maintain or improve employees’ performance.

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HR Aspects of A Manager’s Job

Interpret company’s HR policies and procedures.

Control employee costs. Maintain employee morale. Build employee motivation and

commitment. Protect employees’ health and

safety.

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HR Aspects of A Manager’s Job

Interview, counsel, and discipline employees.

Understand employment laws. Handle grievances and employee

relations. Develop good working

relationships among employees.

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HR Aspects of A Manager’s Job

All managers are, to some extent, HR managers.

All managers at every level must concern themselves with human resource management.

They recruit, train, appraise, and reward their employees.

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Line and Staff Aspects of HRM

Yet, many companies also have a HR dept. with a HR manager.

Are the duties of HR managers different from those of “line” manager?

We can answer this question by discussing the difference between line authority and staff authority.

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Line and Staff Aspects of HRM Authority--The right to make decisions,

direct others’ work, and give orders. Line Authority--The authority of managers

to direct people in his or her own department. It creates a supervisor-subordinate relationship.

Staff Authority--The authority gives right to a manager (such as the HR manager) to advise other managers or employees. It creates an advisory relationship.

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Line and Staff Aspects of HRM

Line Manager (has line authority)--A manager who is authorized to direct the work of subordinates and is responsible for accomplishing the organization’s tasks.

Staff Manager (has staff authority)--A manager who assists and advises line managers.

Staff managers have staff authority but they also have line authority within their own departments.

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Line and Staff Aspects of HRM HR managers are staff managers. They assist and advise line managers in

areas like recruiting, training, appraising, and rewarding.

However, HR managers have line authority within their own departments.

And other line managers also have HR duties, as described in the HR aspect of a manager previously.

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Line Manager’s HR Duties

In small organizations, line managers may carry out all these HR duties.

In large organizations, line managers need the specialized knowledge and advice of a separate HR dept.

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HR Manager’s Duties

In sum, a HR manager carries out 3 distinct functions:

Line function Coordination function Staff function

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HR Manager’s Duties

Line Function: The HR manager directs the

activities of the people in his or her own department and in related service areas (such as the cafeteria facilities in a plant).

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Line Function

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HR Manager’s Duties

Coordination Function: HR managers also coordinate

personnel activities, a duty often referred to as functional control.

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Coordination Function

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HR Manager’s Duties

Staff Function: Assisting and advising line

managers is the heart of the HR manager’s job.

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Staff Function

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HR Cooperation with Line Managers—An Example

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Why is HRM Important to Managers? Ask yourself these questions before you

answer the above question: Do you want to: Hire the wrong person for the job? Have a high employee turnover? Waste time with useless interviews? Find that your people are not performing? Commit any unfair employment practices? Have your company sued for

discriminatory actions or unsafe practices?

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Why is HRM Important to Managers?

You may do everything right as a manager, but you may fail as a manager because you have hired the wrong people or you do not know how to motivate your employees to perform their best.

Managers can be successful if: They have hired the right people for the

right jobs. They motivate, appraise, and develop

these people.

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Why is HRM Important to Managers?

Another reason why HRM is important is that it deals with human capital in organizations, which can be a strength for creating competitive advantage for an organization.

There are many resources that affect organizational performance, and human capital is one of them.

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Organizational Resources Basically, four types of assets in

organizations: Physical, financial, intangible, and human.

Physical--buildings, land, computers, vehicles, equipment, etc.

Financial—cash, stocks, loans, funds, etc. Intangible—R & D, patents, information

systems, designs, know-how, etc. Human capital—individuals with talents,

capabilities, experience, professional expertise, relationships, etc.

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Human Capital in Organizations Human capital is defined as the collective

value of the capabilities, knowledge, skills, life experiences, and motivation of an organizational workforce.

Sometimes it is called intellectual capital to reflect the thinking, knowledge, creativity, and decision making that people in organizations contribute.

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HR as a Core Competency

Human capital is not solely the people in organizations--it is what those people bring and contribute to organizational success.

HR can be a core competency—a unique capability that creates high value and differentiates an organization from its competitors.

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Environment of HRM A HR consultant once said: “HR

professionals need to scan the environment everyday – whether by the Internet, newspaper, or magazines. Everything has the potential to impact everything we do.”

This implies that many elements of an organization’s external and internal environments can influence HRM.

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Environment of HRM External Environment: It encompasses local, national, and

multinational conditions that confront an organization.

Elements of the external environment include: economic conditions, the legal- political landscape, industry dynamics, labor markets (economic), country culture and societal values, and technology.

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Environment of HRM

Internal Environment: It refers to conditions within the

organization itself. Sometimes it refers to as the

organizational environment.

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Environment of HRM Effective organizations seek to create an

internal organizational environment that fits its current external environment yet is flexible enough to change as new conditions arise.

Because the external environment changes constantly, changes in the organizational environment often are needed.

Example: the change in labor laws will call for a change in the hiring policy.

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The Changing Environment of HRM

Changes are happening everyday. HR managers must be able to respond to these changes.

The major changes or trends are as follows:

Globalization Technological advances Changes in nature of work Changes in workforce demographics

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Globalization Tendency of companies to extend sales,

ownership, or production to other countries.

Companies are globalizing their production by taking advantage of local facilities.

E.g. Toyota produces cars in China, Thailand and many other countries.

Why companies go international or global?

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Globalization More competition more pressure to be

“world class” Lower costs, to increase productivity of employees, and to improve quality further.

For business owners, globalizing means benefits like reaching millions of new consumers.

But globalization also poses the threat of facing new global competitors in their home countries.

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Technological Advances Use of the Internet and information

communication technology (ICT) to increase competitiveness in business.

Enabled businesses to outsource their non-core activities to other countries where costs are lower.

Managers can manage, communicate, and do business online.

Employees can also work from home and communicate with the office and customers via the Internet.

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Changes in Nature of Work Caused by technological advances as well. Many factories have been automated. There is a shift from manufacturing jobs to

service jobs. There is also a shift to use “non-traditional”

workers staff holding multiple jobs, or part-time staff.

Many people work under alternative work arrangements such as teleworking or telecommuting (work at home regularly), and fexitime.

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Changes in Workforce Demographics

Diversified workforce staff employed are of different race, religion, nationality, gender, age and culture

A challenge for HR managers E.g. Workers from Bangladesh, China,

India, Indonesia, Pakistan and Thailand in Singapore’s and Malaysia’s construction and agriculture sectors.

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The Changing Environment of HRM--Implications Examples: Globalization → staffing international

operations for sustained global growth. Technological Advances → training and

development. Changes in Nature of Work → compensation of

“non-traditional” workers. Changes in Workforce Demographics →

motivation and fringe benefits to employees with different cultural backgrounds.

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