Nature of

Human Resource
Management - HRM

Part 1 – R. L. Mathis & J. N. Jackson

By – Md Sahil
 Think….

Why HR Is Not Always Respected?

 Introduction
 Many people in organizations do not like how their human resource (HR)
departments operate. Some argue that HR is at best a necessary evil— at
worst a bureaucratic force that routinely enforces unnecessary detailed
rules, resists creativity, and impedes needed changes.
 The role of protecting corporate assets against the never-ending lawsuits
often puts HR in the role of being the “bad cop.”
 HR insists on treating everyone equally, which often leads to protecting poor
performers rather than aiding retention of high performers.
 Ideally, HR should be finding the best hires, nurturing the stars, and
enhancing a productive work environment. Instead, too often HR
departments concern themselves with the administrivia of personnel policies
and practices— which companies are increasingly outsourcing to contractors
who can do them more cheaply and more efficiently. Frequently, HR
managers are seen as more concerned about activities than results.
 HR can and should be a special part of any organization, which means
viewing the people and their talents as an opportunity for creating greater
organizational competitive advantages. But in many companies, that
opportunity is seen by managers and employees as wasted, and that is why
HR is not highly respected. Clearly, HR needs to change even more to
overcome its current image.
 What is HRM?
 Human resource (HR) management is designing management
systems to ensure that human talent is used effectively and
efficiently to accomplish organizational goals.
 Whether employees are in a big company with 10,000 positions or
a small non-profit agency with 10 positions, employees must be
recruited, selected, trained, and managed effectively.
 They also must be adequately and competitively compensated,
and many will be given a range of benefits. Additionally,
appropriate and legal HR systems are needed to comply with
numerous legal requirements.
 In an environment in which the workforce keeps changing, laws
and the needs of employers change too. Therefore, HR
management activities continue to change and evolve.
Organizations Must Manage Four Types of Assets
 In all organizations there are many resources that affect
organizational performance.
■ Physical: Buildings, land, furniture, computers, vehicles, equipment,
etc.
■ Financial: Cash, financial resources, stocks, financial securities, etc.
■ Intangible: Specialized research capabilities, patents, information
systems, designs, operating processes, etc.
■ Human: Individuals with talents, capabilities, experience, professional
expertise, relationships, etc.
 All these assets are crucial in varying degrees in different
organizations. But the human assets are the “glue” that holds all the
other assets together and guides their use to achieve results.
 Certainly, the cashiers, supervisors, and other employees at
supermarkets or the doctors, nurses, receptionists, technical
professionals, and other employees at a hospital allow all the other
assets of their organization to be used to provide customer or patient
services.
 Human Capital and HR
 Human capital is not solely the people in organizations— it is what
those people bring and contribute to organizational success.

Human capital is 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.

For example, firms with high intellectual capital may have

technical and research employees who create new biomedical
devices, formulate pharmaceuticals that can be patented, and
develop new software for specialized uses. All these organizational
contributions illustrate the potential value of human capital.
HR Management Activities
 HR MANAGEMENT ROLES
Three roles are typically identified for HR:
■ Administrative: Focusing on HR clerical administration and record
keeping.
■ Operational and employee advocate: Managing most HR
activities in keeping with the strategy that has been identified by
management and serving as employee “champion”.
■ Strategic: Helping to define the strategy relative to human capital
and its contributing to organizational results.
 Changing Roles of HR Management

 Two major shifts driving the transformation of the

administrative role are greater use of technology and
outsourcing.
 Task

Research and find out about 2 small companies that has

grown large enough (local or global).

You have been selected to be the HR manager, and you

have to decide what HR activities are needed and the role
HR is to play.
Operational to Strategic Transformation of HR
Operational to Strategic Transformation of HR
Some examples of areas where strategic contributions
should be made by HR are as follows:
■ Evaluating mergers and acquisitions for organizational
“compatibility,” structural changes, and staffing needs
■ Conducting workforce planning to anticipate the retirement of
employees at all levels and identify workforce expansion in
organizational strategic plans
■ Leading site selection efforts for new facilities or transferring
operations to international outsourcing locations based on workforce
needs
■ Instituting HR management systems to reduce administrative time
and staff
■ Working with executives to develop a revised sales compensation
and incentives plan as new products/services are rolled out to
customers
 CURRENT HR MANAGEMENT CHALLENGES
 As the way HR is managed in organizations changes, some
challenges are affecting all employers.
 The environment faced by organizations and their managers is also
changing.
 A force affecting the management of human resources is the
globalization of business, as evidenced by international outsourcing
and global competitive pressures.
 Other challenges include significant changes in economic forces and
the rapid growth in technology that have changed how people work.
 Changing demographics in the workforce are significantly affecting
management, particularly with the increase in the diversity of
employees and the aging of the workforce in many countries.
 All of these factors and others are combining to put more cost
pressures on organizations.
 Consequently, employers in many industries have reduced the
number of jobs and employees as part of organizational
restructuring.
 Cost Less & Restructuring
 An overriding theme facing managers and organizations is to operate in
a “cost-less” mode, which means continually looking for ways to reduce
costs of all types— financial, operations, equipment, and labor.
 As part of organizational changes, many organizations have “rightsized”
by:

(1) eliminating layers of managers,

(2) closing facilities,
(3) merging with other organizations, and
(4) outplacing workers.
 To improve productivity, quality, and service while also reducing costs,
they are redesigning jobs and affecting people.
 The human cost associated with downsizing has resulted in increased
workloads and a “survivor’s mentality” for those employees who remain.
 Additionally, downsizing often leads to loss of employee and customer
loyalty, unmet cost savings, and, ultimately, increased turnover of the
remaining employees.
 To respond to organizational cost pressures and restructurings, as well
as the other HR challenges it faces, the use of information technology of
all types is transforming HR management.
 HR TECHNOLOGY (HRMS)
 Greater use of technology has led to organizational use of a human
resource management system (HRMS), which is an integrated
system providing information used by HR management in decision
making.
 This terminology emphasizes that making HR decisions, not just building
databases, is the primary reason for compiling data in an information
system.
 An HRMS serves two major purposes in organizations. One relates to
administrative and operational efficiency, the other to effectiveness.

1) The first purpose is to improve the efficiency with which data on

employees and HR activities are compiled. If automated, many HR
activities can be performed more efficiently and quickly and with less
paperwork.

2) The second purpose of an HRMS is more strategic and is related to

HR planning. Having accessible data enables HR planning and
managerial decision making to be based to a greater degree on
information rather than relying on managerial perceptions and intuition.
 Other Uses of HR Technology
■ Bulletin boards: Information on personnel policies, job postings, and
training materials can be accessed by employees globally.
■ Data access: Linked to databases, an extranet or an intranet allows
employees to access benefits information such as sick leave usage. This
access frees up time for HR staff members who previously spent
considerable time answering routine employee inquiries.
■ Employee self-service: Many HR technology activities enable
employees to access and update their own personnel records, change
or enroll in employee benefits plans, and respond to employment
opportunities in other locations. Obviously, maintaining security is
critical when the employee self-service option is available.
■ Extended linkage: Employees can communicate directly from
throughout the world to submit and retrieve their own personnel
details, take on-line training courses, and provide complete career
planning data.
 ETHICS AND HR MANAGEMENT
 Ethics - Moral principles that govern a person's behavior or the
conducting of an activity.
 Organizations that are seen as operating with integrity are viewed more
positively by individuals in the community and industry, as well as by
consumers and employees. That positive view often translates into
bottom-line financial results and the ability to attract and retain human
resources.
 Numerous writers on business ethics consistently stress that the primary
determinant of ethical behavior is organizational culture, which is the
shared values and beliefs in an organization. Basically, organizational
culture is “how things are done here.”
 Every organization has a culture, and that culture influences how
executives, managers, and employees act in making organizational
decisions.

For example, the more common it is for employees to lie about why they
missed work in order to use sick leave, the more likely it is that new
employees adopt that behavior.
 Four Elements of Ethics Programs
 When the following four elements of ethics programs exist, ethical
behavior is likely to occur:
■ A written code of ethics and standards of conduct
■ Training on ethical behavior for all executives, managers, and
employees
■ Means for employees to obtain advice on ethical situations they face,
often provided by HR
■ Systems for confidential reporting of ethical misconduct or
questionable behavior
Some Ethical Misconduct in HR Activities
 HR Competencies
 The five areas of HR competencies are described briefly as follows:
■ Strategic contribution: The key competency that HR needs to fulfill its
strategic role is the ability to be a strategic contributor to organizational
success. That means that HR must focus on the long-term implications of HR
issues.
■ Business knowledge: HR professionals must have business knowledge of
the organization and its strategies if they are to contribute strategically.
They must understand the financial, technological, and other facets of the
industry and the organization.
■ HR delivery: The HR activities must be delivered effectively and efficiently
in ways that meet the needs of both the organization and its employees.
■ HR technology: Technology, particularly information systems and Web
based resources, have become a significant part of HR management today.
HR professionals must develop the abilities needed to work effectively with
various dimensions of an HRMS.
■ Personal credibility: HR professionals must have credibility personally and
professionally. That means they must develop effective internal relationships
with individual executives, employees, managers, and supervisors. Also, HR
professionals must establish personal and professional credibility in various
external relationships.
 TASK
 Assume you are an HR director with a staff of seven people. A
departmental objective is for all staff members to become
professionally certified within a year.

Using Internet resources of associations (google them), develop a

table that identifies 6 certifications that could be obtained by your staff
members, and show the following details for each certification:
• Name of sponsoring organization
• Names and types of certification
• Addresses for relevant Websites containing more information
• Experience and education requirements
• Nature of certification process
 Explain the differences between – offshoring, in-shoring and
outsourcing.
 How UPS Delivers Ethics and Corporate Integrity?