INTRODUCTION TO HUMAN RESOURCE

MANAGEMENT

IBRAHIM TIRIMBA

EMAIL: tirimba5@gmail.com

MBA @ HARGEISA CAMPUS

OPENING QUOTE• “If you fulfill the wishes of your employees, the

employees will fulfill your visions.” ― Amit Kalantri

• “You can’t teach employees to smile. They have to smile before you hire them.”– Arte Nathan, Wynn Las Vegas

• “Recently, I was asked if I was going to fire an employee who made a mistake that cost the company $600,000. No, I replied, I just spent $600,000 training him. Why would I want somebody to hire his experience?”– Thomas John Watson Sr., IBM

WHAT DO YOU THINK IS HUMAN RESOURCE MANAGEMENT?

WHAT IS THE DIFFERENCE BETWEEN HRM AND PERSONNEL MANAGEMENT?

• HOW IMPORTANT DO YOU THINK IT IS TO THE ORGANIZATION?

Aims

By the end of the session students will be able to:

1)     Demonstrate an understanding role of HR.

2)     Understand the factors influencing the HRM.

3) Differentiate between HRM and Personnel Management

Human Resources Management

Human Resource Specialties

Recruiter

HR coordinatorLabor relations

specialist

Training specialist

Job analyst

Compensation manager

Human Resource Specialties

1–7

FIGURE 1–4 Trends Shaping Human Resource Management

Personnel Management V Resource Management

• Personnel Management is ‘workforce’ centred• HR is resource centred• Does not identify with Management interests• Directed at management needs for deployment• People have the right to proper ‘treatment’• Focus is on individuals and needs and potential• Intervene between manager - subordinate relationships• Planning, monitoring and control rather than mediation

Introduction to HR

• The 1980’s and 90’s saw ‘Human Resource Management’(HRM) replace ‘Personnel Management’– fashionable term– re-organisation of work of personnel department– distinctively different with new management approach

• Long term rather than short term perspective• Psychological contract of commitment• Self-control rather than external controls• Management integration• Maximum utilisation of resource

Human Resource Management

• “HRM is the function performed in organizations that facilitates the most effective use of people to achieve organizational and individual goals.”– Ivancevich and Glueck

Why is it Important?

• Staff are the largest revenue cost of any organisation. • Staff are a volatile resource, they can leave you any time.• Staff are a store of corporate knowledge and the means of

service delivery.• Retaining and developing good staff allows you to use skills

and develop as a business.• Individuals should contribute more than they cost.• In the industry customer care critical and delivered by staff

as representatives.

Introduction to HR

• The 1980’s and 90’s saw ‘Human Resource Management’(HRM) replace ‘Personnel Management’– fashionable term– re-organisation of work of personnel department– distinctively different with new management approach

• Long term rather than short term perspective• Psychological contract of commitment• Self-control rather than external controls• Management integration• Maximum utilisation of resource

Hard and Soft HRM

• 'Storey (1989) has distinguished between hard and soft forms of HRM, typified by the Michigan and Harvard models respectively. 'Hard' HRM focuses on the resource side of human resources. It emphasizes costs in the form of 'headcounts' and places control firmly in the hands of management. Their role is to manage numbers effectively, keeping the workforce closely matched with requirements in terms of both bodies and behaviour. 'Soft' HRM, on the other hand, stresses the 'human' aspects of HRM. Its concerns are with communication and motivation. People are led rather than managed. They are involved in determining and realizing strategic objectives.'

Hard and Soft HRM

• Hard HRM: A different view of HRM is associated with the Michigan Business School (Fombrun, Tichy and Devanna, 1984). There are many similarities with the Harvard 'map' but the Michigan model has a harder, 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. Thay must be obtained as cheaply as possible, used sparingly, and developed and exploited as much as possible.

Factors Affecting HR

• Legislation

• The Economic environment

• The global economy

• The structure of the labour market

• The Political environment

• Changes in technology

• Need to constantly retrain staff

1–16

Personnel Mistakes• 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 because of discriminatory actions

• Have your firm cited by OSHA 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

Legislation

• In the EU employment law is highly complex

• In the UK changes made twice a year

• The contract of employment is key to the employer/employee relationship

The Policy Decisions

• The formalities to bargain with Government legislation, trade unions and workers council consultations

• The decision to minimise external power and influence

• Encompass management and employee group interaction

Challenges of HRM

• Individuals differ from

one another

• Customization of

stimulation and

motivation

• Demanding personnel

Functions of HRM - 1

Managerial

Planning Organizing Staffing Directing Controlling

Functions of HRM - 2

Operational

Employment HR Development Compensation Mgt Employee Relations

HR Planning

Recruitment

Selection

Placement

Induction

Performance Appraisal

Training

Management Development

Career Planning and Development

Job Evaluation

Wage and Salary Admn

Incentives

Bonus

Fringe Benefits

Emerging role or HRM

• Value of Human Resource

• Competitive advantage

• Human Resource

Accounting – It is

measurement of the cost

and value of people for an

organization

Models of HRM

• The Michigan School Model:– Congruency with organizational strategy

(matching model)

• The Harvard School Model (Harvard framework)– Integrated parts towards a strategic vision

and with a central philosophy

The Michigan School ModelThe human resource cycle

Elements of human resource cycle

1.Selection: matching available human resources to jobs

2.Appraisal: performance management

3.Rewards: focus on organizational performance (most under-utilized and mishandled tool)– short-term and long-term

4.Development – developing high quality employees

The Harvard Framework

Characteristics of HRM in Harvard framework

• 1) line managers accept more responsibility for ensuring the alignment of competitive strategy and personnel policy

• 2) personnel has the mission of setting policies that govern how personnel activities are developed and implemented in ways that make them more mutually reinforcing

Aims of HRM

1. Organizational effectiveness (HRM makes a significant impact on firm performance)

2. Human capital management (HC is the prime asset – the aim is to develop the inherent capacities of people)

3. Knowledge management (support the development of firm-specific knowledge)

4. Reward management (enhance motivation, job engagement)

5. Employee relations (harmonious relationship between partners)

6. Meeting diverse needs (stakeholders, workforce)

7. Bridging the gap between rhetoric and reality (HRM is to bridge the gap – and to ensure that aspirations are translated to effective action

HRM concepts

People ManagementThe policies and practice which govern how people are managed and developed in organizations

Human Capital ManagementAn approach to obtaining, analyzing and reporting on data which informs the direction of value adding people management strategic investment and operational decisions at corporate level and at the level of front line management

Human Resources ManagementThe strategic and coherent approach to the management the most of organization’s most valued assets – the people working there who individually and collectively contribute to the achievements of its objectives

Personnel ManagementPersonnel mmanagement is concerned with obtaining, organizing and motivating human resources required by enterprise

HRM and Personnel Management differences

HRM: • places more emphasis on strategic fit and

integration, • is based on a management and business

oriented philosophy,• places more emphasis on mutuality,• is more holistic,• specialists are more like business partners than

administrators,• treats people as assets and not only costs.

Hard and Soft HRM

Hard (instrumental) HRM approach:• employees are viewed as a passive factor of production, an

expense• employees can be easily replaced and seen as disposable.• Strategic, quantitative aspects of managing HRM as an economic

factor

Soft (humanistic) HRM approach:• stresses active employee participation • gains employee commitment, adaptability and contribution of their

competences to achievement of organizational goals• employees are valued as assets• emphasizing communication, motivation and leadership

Challenges to HR Professionals

• Worker productivity

• Quality improvement

• The changing attitudes of workforce

• The impact of the government

• Quality of work-life

• Technology and Training

Organizational Structure &

HRM

Why structure ???

What structure signifies?

No directions Leads to confusionChaos

Why???????????

Mechanistic Vs organic organization

Rigid structureEmployees are tied

by rules & regulations

High degree of centralization

Suitable for operating in static environment

Decision-making is done by superiors

Ex: Public sector in the pre-reforms era

Flexible structureEmployees are not

tied by rules & regulations

Decentralized style of management

Suitable for operating in dynamic environment

Decision-making is done by junior level employees also

Ex: Marico`s Saffola

President

VicePresident

VicePresident

VicePresident

Division Managers

Division Managers

Division Managers

Division Managers

Division Managers

Division Managers

Division Managers

Division Managers

Division Managers

Department Managers

Department Managers

Department Managers

Department Managers

Department Managers

Department Managers

Department Managers

Department Managers

Department Managers

Informal organization

Bowling team

Informal organization Chess group

Formal organization

Tall Vs Flat structureCMD

ED ED ED

GM GM GM

CM

CM

Manager

Manager

Officer

Officer

Executive

Executive

TALL STRUCTURE

COO

PM PM PM PM

TeamLead

TeamLead

TeamLead

TeamMember

TeamMember

TeamMember

TeamMember

FLAT STRUCTURE

RESPONSIBILITY, AUTHORITY & ACCOUNTABILITY

Responsibility:It is the obligation of a manager to carry out the duties assigned to him.

Authority:It refers to the right to give orders and

the power to exact obedience from others in the process of discharging responsibility.

Accountability:The employee's answerability on using

the authority in discharging the responsibility is termed accountability.

LINE AND STAFF FUNCTIONS

Departments or employees of a firm that perform core activities

Contributes directly to the business of the firm

Ex: Manufacturing and Marketing departments

Departments or employees of a firm that perform a support function

Contributes indirectly to the business of the firm

Ex: HR and Finance departments

Line & Staff Relationship

Traditional concept Traditional concept

Service oriented firmService oriented firm

Which are line and staff functionsWhich are line and staff functions

Both needs to support each otherBoth needs to support each other

Line staff conflict

Different perceptionDifferent perception

HR professional to bring change HR professional to bring change

Understand market & organizationBe empatheticBuild trust and transparencyWin – win approach

The Role of Human Resources Department

As a specialistAs a specialist

As a facilitatorAs a facilitator

As a change agentAs a change agent

As a controllerAs a controller

HUMAN RESOURCE MANAGEMENT AND OTHER

ORGANIZATIONAL FUNCTIONS

Product & HRProduct & HR

Production & HRProduction & HR

Marketing & HRMarketing & HR

Management Techniques & HRManagement Techniques & HR

Organization structure & HROrganization structure & HR

summary

Organizational Structure and Human Resource Management

Formal and Informal OrganizationsTall and Flat Organizational

StructuresResponsibility, Authority and

AccountabilityLine and Staff FunctionsHuman Resource Management and

other Organizational Functions

Think before others think

Human Resource Planning

Human Resource planning

Right numberRight number

Right SkillsRight Skills

Right TimeRight Time

Right CostRight Cost

HRP defined• Process of anticipating and making provision for the movement of people into, within, and out of an organization

Objectives of HRP

• To maintain

• To forecast

• To optimize

• To utilize Right CostRight Cost

Right SkillsRight Skills

Right numberRight number

Right TimeRight Time

HRP at different planning levels

Corporate – level planningIntermediate – level planningOperations planningPlanning short-term activities

Organizational plans and objectives

Organizational plans and objectives

Identify future humanresource requirements

Identify future humanresource requirements

Compare with the current HR inventory

Compare with the current HR inventory

Determine the redundantnumbers

Determine the redundantnumbers

Determine the numbers,levels & criticality of vacancies

Determine the numbers,levels & criticality of vacancies

Analyze the cost & time involvedin managing the demand

Analyze the cost & time involvedin managing the demand

Analyze the cost & time required for managing surplus

Analyze the cost & time required for managing surplus

Retrench Retrench

Choose the resources & methods of recruitment

Choose the resources & methods of recruitment

RedeployRedeploy

HUMAN RESOURCE

PLANNING MODEL

HUMAN RESOURCE

PLANNING MODEL

Assessing current human resources and making

inventory

• Job analysis• HR inventory – HRIS• Generate a fairly accurate

picture existing situation

Forecasting

• Compare future needs with current availabity

• Analyze companies change plan

• Forecasting methods used are Time Series Analysis, Regression Analysis and Productivity Ratios

Matching the inventory with future requirements

• If the current inventory exceeds the future requirements

• Natural attrition cannot bring down resource to match

• What to consider then????

MANAGING THE FORECASTED DEMAND / SURPLUS

Managing future demandManaging future demand

Managing Future SurplusManaging Future Surplus

Dealing With Surplus Manpower

RetrenchmentRetrenchment

outplacementoutplacement

layoffslayoffs

Leave of absence without payLeave of absence without pay

Loaning Loaning

Work SharingWork Sharing

Reduced work hoursReduced work hours

attritionattrition

Early/voluntary retirementEarly/voluntary retirement

Growing importance of HRP

Thank you