Human Resource Management

By
Deribe A.(PhD)
Email address: [email protected]
 Contents
Chapter 1: Introduction to Human Resource Management

Chapter 2: Human Resource Planning

Chapter 3: Recruitment and Selection

Chapter 4: Training and Development

Chapter 5: Performance Appraisal

Chapter 6 : Compensation Management

Chapter 7: Employee Relations

Chapter 8: Contemporary issues in Human Resource Management 2

 Chapter One

Introduction to Human Resource

Management
 LEARNING OBJECTIVES OF THE CHAPTER

After studying this chapter, you would be able to:

• Define Human Resource Management ( HRM)

• Describe the major functions of HRM
• Identify and describe the major trends in HRM
including the impact of globalization
• Explain the major differences between personnel
management and HRM

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 ‘EMPLOYEES ARE THE MOST IMPORTANT
ASSET OF THE ORGANIZATION’
• In management terms, ‘human capital’ or ‘human resources’
refers to the traits that people bring to the workplace – intelligence,
aptitude, commitment, tacit knowledge and skills, and ability to
learn.
• The quality and effectiveness of the organization is determined by
the quality of the people that are employed.

• Success for most organizations depends on finding the employees

with the skills to successfully perform the tasks required to attain
the company’s strategic goals.
 1.1.Definition of Human Resource management
• all those activities associated with the management of
employment relationships in the firm’.

• Human resource management includes the process of

attracting, developing, and retaining enough qualified
employees to perform the activities necessary to accomplish
organizational objectives.
• Human Resource Management is the planning, organizing,
directing and controlling of the procurement, development,
compensation, integration, maintenance and separation of
human resources so that individual, organizational and
societal objectives are accomplished.

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 1.2. Evolution of HRM
• For more than a century now, human resource management, as a
discipline and practice in the management of people in an organization,
has evolved and developed into different areas.
Welfare stage in industrial age
• Historically, the 1900s was a time of increasing technological and
economic breakthroughs arising from continued advancement in
general and scientific knowledge through creativity and innovations.
• The advancements had serious impact on economic growth and demand
for goods and services in Europe and in Germany in particular for the
preparations of World War I.
• Managing the increasing workforce in the emerging complex industrial
production systems was an ever-more difficult challenge.

• Welfare services such as a canteen and other needs required some kind
of officer whose sole purpose was to take care of workers.
– This is the genesis of employees’ welfare services in organizations
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 Evolution of HRM-Cont’d
Change of focus from welfare to personnel administration
•The 1920s and mid 30s are generally regarded as decades of personnel
administration.
•The growing size of organizations and pressure to improve
productivity called for the need to recruit, select, train, keep records,
appraise, motivate, control, and improve production of job entry level of
employees.

•the roles of welfare officers changed in nature and scope and became
more demanding in terms of knowledge, skills and behavioral attributes.
•To address these new dimensions of a welfare job, the title had to change
from welfare officer to personnel administrator

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 Evolution of HRM-Cont’d
Development of personnel management
•This covers the period during and after World War II.

•In the 1940s and 50s, there was an ever growing role for personnel
administration to cope with the rising challenges and demands of the job which
included craft (practical skills), supervisory training and labor disputes
that were threatening employees and organizational efficiency.

•Efforts were devoted to study behavioral factors in job performance.

– Such developments include human relations’ school, which was
pioneered by Elton Mayo and Kurt Lewin, who emphasized on
improving the work environment and work groups as a strategy to
improve productivity
– Treating employees as human beings rather than working tools
was a new doctrine that was revealing other aspects of people
management in other phases of personnel management.
– This period marked a shift of emphasis from managing an individual
employee to managing groups/teams in the organization. 9
 Evolution of HRM-Cont’d
Development of personnel management-Cont’d
•Other contributions were from the work of Abraham Maslow on the human
hierarchy of needs and the power of employee’s motivation on productivity
(Maslow 1970).

•Frederick Herzberg wrote about the concept of employee’s satisfaction and

its impact on the organizational practices in improving the quality of work in
organizations.

•The organization development school driven by Bennis & Schein provided

equally useful inputs to personnel practices particularly in areas of effective
communication and the need to reduce conflict in the work place.

During the 1950s and 60s personnel management as a

professional discipline matured as characterized by most
personnel management theories, practices, and processes we
know today.
 Evolution of HRM-Cont’d
Change to human resource management
From the late 1970s and early 80s we witnessed many developments and
challenges which disturbed the stability of economic, political, technological
and academic environment experienced in the 1960s.
These challenges have had enormous impacts on people management in
organizations perhaps more than at any time in human history.

– Shift in global macro policy framework

•The late 1970s and early 80s was an era of neo liberalism in which market
forces were a driver of institutional frameworks of nation states and
organizations.
•This was a period when we witnessed strong arguments against direct state
involvement in the economy.
•The privatisation of state owned organizations, relaxation of legislation
in favor of the private sector and the urge for profit maximization became
the new agenda and required framework for managing organizations and the
workforce.
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 Evolution of HRM-Cont’d
Change to human resource management-Cont’d
•Business competition
•Change in customer needs and expectations
•Technological change
•Change of philosophy of employee relations
– Employment relations became more based on arrangements and agreements between the
employee and employer as opposed to the use of trade unions and labor legislation.
•Developments in the academia

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Human resource management philosophies and objectives
• There are six elements on which human resource
management philosophy and practices are based:

1. Ownership: has to be owned and driven by the

top management in the interests of the key
stakeholders [shareholders, the managing board,
the workers, clients and customers].

• This is unlike the old tradition in which personnel

management functions were mostly vested in
designated officers under a personnel
department.
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 Human resource management philosophies and objectives-Cont’d
2. business or organizational strategies form the basis for
human resource strategies, and there should be a strategic
fit.
– Whereas traditional personnel management emphasizes on routine
activities, reactive decision making and limited vision.

3. employees as assets rather than liabilities.

– Under traditional personnel management philosophy,
training and development of employees was quite
often seen as a cost that should be avoided whenever
possible.
– IN HRM, Investment in people, like any other capital
investment, is necessary for better returns in the future.

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 Human resource management philosophies and objectives-Cont’d
4. getting additional value from employees.
– Employees are capable of producing added value.
– It is the role of the management to obtain such added
value through human resource development and
performance management systems.

5. Employee commitment.
– Organizational success comes from the employees’ total
commitment to the organizational mission, goals,
objectives, and values.
– It is the task of the management to induce and
encourage that commitment.

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 Human resource management philosophies and objectives-Cont’d
6. Building a strong organizational culture gives managers
an advantage in stimulating employees’ commitment.

– Effective communication, training, coaching, mentoring

and performance management processes are effective
tools for building a strong corporate culture.

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 Question for Discussion
• At what level of an organization that HRM
functions [duties and responsibilities] need
to be performed?
(all line managers? HRM department?
Or both)
• Identify these functions.

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 1.3. Functions of HRM
Some of the roles of line managers include the following :
•Strategic HR Management:
– HR effectiveness
– HR technology
– HR planning
– HR retention
•Equal Employment Opportunity:
– Compliance
– Diversity
– Affirmative action:
• employers are urged to hire groups of people based on their
race, age, gender, or national origin to make up for historical
discrimination.

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 Functions of HRM-Cont’d
• Staffing
– Job analysis
– Recruiting
– Selection
• Talent Management
– Orientation
– Training
– HR development
– Career planning
– Performance
– management

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 Functions of HRM-Cont’d
• Risk Management and Worker Protection
– Health and wellness: General state of physical, mental, and
emotional well-being.

– Safety: Condition in which the physical well-being of people is

protected (to prevent work-related injuries and accidents).

– Security: Protection of employees and organizational facilities (ex.

from violence, terrirosim, attaks)

• Employee and Labor Relations

– Employee rights and privacy
– HR policies & procedures
– Union/management relations

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 Functions of HRM-Cont’d
• Handling of other human resource management functions
– These functions may be routine or occasional and would be part of
the jobs of the HRM department.
• These would include coordination, building a departmental team spirit and culture
of performance, staff promotions, transfer, leave, managing disputes, taking
disciplinary measures and layoffs.
– Formulation of human resource strategies
– Keeping appropriate track records of the employees
– Provision of guidance to other managers: on the interpretation of
personnel strategies and policies
– Facilitation of change management
– Employee empowerment
– Support services to other departments: training needs
assessment, training and development, and employees services
including pension, leave, transport, retirement,
The HRM Functions-Cont’d

The aforementioned HRM functions can be

broadly divided into four basic functions:

staffing

training and
development
motivation
maintenance

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

The HRM Functions

staffing

 strategic human resource planning: match prospects’ skills to

the company’s strategy needs
 recruiting: use accurate job descriptions to obtain an
appropriate pool of applicants
 selection: thin out pool of applicants to find the best choice
The HRM Functions

training and
development

 orientation: teach the rules, regulations, goals, and culture of the

company
 employee training: help employees acquire better skills for the job
 employee development: prepare employee for future position(s) in the
company
 organizational development: help employees adapt to the company’s
changing strategic directions
 career development: provide necessary information and assessment
in helping employees realize career goals

The goal is to have competent, adapted employees.

The HRM Functions

motivation

 theories and job design: environment and well-constructed jobs

factor heavily in employee performance
 performance appraisals: standards for each employee; must provide
feedback
 rewards and compensation: must be a link between compensation
and performance
 employee benefits: should coordinate with a pay-for-performance
plan
The HRM Functions

maintenance

 safety and health: caring for employees’ well-being has a big

effect on their commitment
 communications and employee relations: keep employees
well-informed of company doings, and provide a means of
venting frustrations
1.4. Significance of Human Resource management: WHY IS HRM IMPORTANT?

• Service is delivered by people.

• Low quality HR leads to low quality

customer service.
• In the 21st century effective knowledge
management translates into
competitive advantage and profits.
• Knowledge comes from a firm’s people.
 1.5. Differences Between HRM and PM
Dimensions PM HRM
1.Employment contract Care full delineation of Aim to go behind contract
written contracts
2.Rules Importance of devising clear Can do outlook, impatience
rules with rule
3.Guide to management Procedures Business need
action
4.Behaviour referent Norms ,customs and Values and mission
practices
5.Managerial task vis-à-vis Monitoring Nurturing
labor
6.Speed of decision Slow Fast
7.Management role Transactional Transformational leadership
8.Communication Indirect Direct
9. Prized management skills Negotiation Facilitation
10.Selection Separate ,marginal task Integrated, key task
11.Labour management Collective barraging Individual contracts
contracts
12.Job categories and grade Many Few

13.Job design Division of labor Team work

14.Conflict handling Reach temporary truce Manage climate and culture
 Differences Between HRM and PM-cont’d
Dimensions PM HRM
15.Respect for employees Labor is used as tool which Peoples are used as assets
is spendable and to be used for the benefit of
replaceable organization

16.Shared interest Interest of organizations are Mutuality of interest

uppermost
17.Evolution Precedes HRM Latest in evolution of
subjects
18.Locus of control External Internal
19.Oganization principles Mechanistic Organic
Top down Bottom-up
centralized Decentralized

20.Key relations Labor Management Customers

21.Initiatives Piecemeal Integrated
22.Pay Job evaluation Performance related
23.Training and Controlled accessed to Learning companies
development courses

Source: Aswathappa, 2008, p.7

 1.6. Strategic Human Resource Management
• Strategic HRM is a process that involves the use of
overarching approaches to the development of HR
strategies, which are integrated vertically with the business
strategy and horizontally with one another.

• These strategies define intentions and plans related to

the overall organizational considerations, such as
organizational effectiveness, and to more specific aspects
of people management, such as; resourcing, learning and
development, reward and employee relations.

Strategic HRM provides a clear connection between the

organization’s goals and the activities of employees.
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The relationship between strategic HRM and performance

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OBJECTIVES OF HRM
OBJECTIVES OF HRM

 It is concerned with the optimum utilization of the

human resources within an organization.
PERSONAL
 It is concerned with the creation of conditions in
which each employee is encouraged to make
his/her best possible contribution to the effective
working of the undertaking.
 It is also concerned with the development of the
sense of mutual respect and trust between
management and workers through sound
relations.
 It endeavors to increase the productive efficiency
to the workers through training, guidance and
counseling and
 It tries to raise the morale of the employee.
OBJECTIVES OF HRM

• To recognize the role of HRM in bringing

about organizational effectiveness.
• HRM is not an end itself. It is only a means
to assist the organization with its primary
ORGANIZATIONAL objectives.
• Simply stated, the department exists to serve
the rest of the organization.
OBJECTIVES OF HRM
• To be ethically and socially responsible to
the needs and challenges of the society
while minimizing the negative impact of
SOCIETAL such demands upon the organization.

• The failure of organizations to use their

resources for the society’s benefit in
ethical way may lead to restrictions.
• For example, the society may limit HR
decisions through laws that enforce
reservation in hiring and laws that
address discrimination, safety or other
such areas of social concern.