BA 25 Human Resource Management

UNIT I. Introduction to Human Resources Management in Organizations

At the end of the unit, the students must have:
• Defined and explained human resource management, its functions and scope;
• Recognized human resource management as an integral function of an organization
• Illustrated the internal and external environment of HRM
• Explained the setting of HRM in the country and its implications, and
• Identified current issues and trends along HRM

NATURE OF HUMAN RESOURCE MANAGEMENT

People are integral part of any organization today. Organization is consciously coordinated social unit,
composed of group of people, which functions on a relatively continuous basis to achieve a common goal
or set of goals (Robbins and Langton 2003). It is simply a collection of people working together to achieve
a common purpose. An effective organization is one that achieves its goals and in order to be successful,
every organization needs good managers.
Why managers are important?
 First, organizations need their managerial skills and abilities in uncertain, complex, and chaotic
times.
 Second, managers are critical to getting things done in organizations.
 Finally, managers contribute to employee productivity and loyalty

What Do Managers Do?

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Management Functions
1. Planning. Planning means establishing goals and standards; developing rules and procedures;
developing plans and forecasting.
2. Organizing. This refers in giving each subordinate a specific task; establishing departments;
delegating authority to subordinates; establishing channels of authority and communication;
coordinating subordinates work.
3. Leading. It means getting others to get the job done; maintaining morale; motivating subordinates.
4. Controlling. Setting standards such as sales quotas, quality standards, or production levels; checking
to see how actual performance compares with these standards; taking corrective action, as needed.
5. Staffing. Staffing is the task of evaluating, recruiting, selecting, training and placing appropriate
individuals into defined job roles.

STAFFING
• Staffing is the task of evaluating, recruiting, selecting, training and placing appropriate individuals
into defined job roles.
What is Human Resource Management (HRM)?
HRM has been defined in a variety of ways. Some adopt a process view of a functional approach to HRM
defining it in terms of its major functions and processes.
HRM is the systematic planning, development, and control of a network of interrelated process
affecting and involving all members of the organization (French, 2003, p 7).
Human resource management (HRM) is the process of acquiring, training, appraising, and
compensating employees, and attending to their labor relations, health and safety, and fairness
concerns (Dessler, 2005, p. 4).
More recent definitions of HRM highlight the deliverables and outcomes of HRM’s efforts and focus on
its strategic role in the organizations. This perspective focuses on HRM as an enabler or facilitator assisting
line managers in realizing their organization’s strategies and objectives.
Human resource management (HRM) is designing management systems to ensure that human talent
is used effectively and efficiently to accomplish organizational goals (Mathis & Jackson, 2008, p.4)

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

Human resource management (HRM) is, what role it plays in the organization, and how it has
evolved in response to the changing needs of the organization. It discusses what makes HRM strategic and
how it can add value and align its programs and activities with the organization’s goals and objectives. The
leaders and the mission statement of the organization almost always talk about the primary importance of
people, regardless of whether the organization is labor-intensive or highly automated, s small business or a
large multinational company.
For instance, MERALCO’s Chairman, Manuel V. Pangilinan says:
Our people are the source of power. They have been the key in MERALCO’s unprecedented
growth and our partners in nation-building. They embody our corporate values which reflect
the best of the past and what it takes to succeed in the future.
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Metrobank is not unique in declaring the importance of people in its mission-vision statement:
We realize that our success depends on the quality of our people, the efficiency of our systems,
and the strength of our organization. Hence, we shall continuously invest in our human
resources to ensure a service force characterized by the highest standards of dignity, probity
and professionalism.
Nissan Motor Philippines’ corporate philosophy includes a statement about the value of its human
resources.
We value our people. Employees are the heart of company. Having chosen personnel with
commitment to the highest standards, through teamwork, we aim to create corporate
understanding and loyalty to one another.
Statements such as these from a diverse number of companies pose a challenge to and provide HR managers
and practitioners the opportunities to prove the value that they create for the organization. HR’s policies,
programs, and practices are after all directed to meet the needs of the organization’s stakeholders.
There is a growing appreciation of the fact that the way human resources are managed greatly affects an
organization’s ability to create and maintain competitive advantage.
NATURE OF HRM
The following constitute the core of HRM
1. HRM involves the application of management functions and principles.
2. Decision relating to employees must be integrated.
3. Decisions made influence the effectiveness of an organization.
4. HR scope functions are not confined to business Establishments Only

SCOPE OF HRM
These are given below:

a) Human Resource Planning: The objective of HR Planning is to ensure that the organization has
the right types of persons at the right time at the right place. It prepares human resources inventory
with a view to assess present and future needs, availabilityand possible shortages inhuman resource.

b) Design of Organization and Job: This is the task of laying down organization structure, authority,
relationship and responsibilities. This will also mean definition of work contents for each position
in the organization.
c) Selection and Staffing: This is the process of recruitment and selection of staff. This involves
matching people and their expectations with which the job specifications and career path available
within the organization.
d) Training and Development: This involves an organized attempt to find out training needs of the
individuals to meet the knowledge and skill which is needed not only to perform current job but
also to fulfil the future needs of the organization.
e) Organizational Development: This is an important aspect whereby “Synergetic effect” is
generated in an organization i.e. healthy interpersonal and inter-group relationship within the
organization.
f) Compensation and Benefits: This is the area of wages and salaries administration where wages
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and compensations are fixed scientifically to meet fairness and equity criteria. In addition labour
welfare measures are involved which include benefits and services.
g) Employee Assistance: Each employee is unique in character, personality, expectation and
temperament. By and large each one of them faces problems everyday. Some are personal some
are official. In their case he or she remains worried. Such worries must be removed to make him
or her more productive and happy.
h) Union-Labour Relations: Healthy Industrial and Labour relations are veryimportant for enhancing
peace and productivity in an organization. This is one of the areas of HRM.
i) Personnel Research and Information System: Knowledge on behavioral science and industrial
psychology throws better insight into the workers expectations, aspirations and behavior.

OBJECTIVES OF HRM

1. Human Capital
2. Developing organizational climate
3. Helping to maintain performance standards and increase productivity
4. Helping to establish and maintain a harmonious employer/employee relationship
5. Helping to create and maintain a safe and healthy work environment
6. Developing programs to meet the economic, psychological, and social needs of the employees
Developing organizational climate
7. Ensuring that the organization is in compliance with provincial/territorial and federal laws
8. To provide organization with well-trained and well-motivated employees
9. To increase the employees satisfaction and self-actualization
10. To develop and maintain the quality of work life
11. To communicate HR policies to all employees.
12. To help maintain ethical polices and behavior.

HRM OBJECTIVES AND FUNCTIONS

HRM Objectives Supporting Functions
1. Societal Objectives Legal compliance Benefits
Union- management relations

2. Organizational Objectives Human Resource Planning

Employee relations Selection
Training and development Appraisal
Placement
Assessment

3. Functional Objectives Appraisal

Placement
Assessment
4. Personal Objectives Training and development
Appraisal
Placement Compensation
Assessment

FUNCTIONS OF HRM
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The functions can be grouped as follows:

 Strategic HR Management: As a part of maintaining organizational competitiveness, strategic
planning for HR effectiveness can be increased through the use of HR metrics and HR technology.
 Equal Employment Opportunity: Compliance with equal employment opportunity (EEO) lawsand
regulations affects all other HR activities.
 Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs in an
organization. Job analysis, recruitment and selection are the main functions under staffing.
Workers job design and job analysis laid the foundation for staffing by identifying what diverse
people do in their jobs and how they are affected by them.
Job analysis is the process of describing the nature of a job and specifying the human requirementssuch
as knowledge, skills, and experience needed to perform the job. The end result of jobanalysis is
job description. Job description spells out work duties and activities of employees.
 Talent Management and Development: Beginning with the orientation of new employees,
talent management and development includes different types of training. Orientation is the firststep
towards helping a new employee to adjust himself to the new job and the employer. It is amethod
to acquaint new employees with particular aspects of their new job, including pay and benefit
programmes, working hours and company rules and expectations.
Performance appraisal includes encouraging risk taking, demanding innovation, generating or
adopting new tasks, peer evaluation, frequent evaluations, and auditing innovation processes.
 Total Rewards: Compensation in the form of pay, incentives and benefits are the rewards givento
the employees for performing organizational work. Compensation management is the method for
determining how much employees should be paid for performing certain jobs.
 Risk Management and Worker Protection: HRM addresses various workplace risks to
ensure protection ofworkers by meeting legal requirements and being more responsive to concernsfor
workplace health and safety along with disaster and recovery planning.
 Employee and Labor Relations: The relationship between managers and their employeesmust
be handled legally and effectively. Employer and employee rights must be addressed. It isimportant
to develop, communicate, and update HR policies and procedures so that managersand employees
alike know what is expected. In some organizations, union/management relationsmust be addressed
as well. The term labour relation refers to the interaction with employees whoare represented by a
trade union. Unions are organization of employees who join together to obtain more voice in
decisions affecting wages, benefits, working conditions and other aspects ofemployment. With regard
to labour relations the major function of HR personnel includes negotiating with the unions regarding
wages, service conditions and resolving disputes and grievances.

ROLES OF HRM

The primary responsibilities of Human Resource managers are:

 To develop a thorough knowledge of corporate culture, plans and policies.
 To act as an internal change agent and consultant
 To initiate change and act as an expert and facilitator
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 To actively involve in company’s strategy formulation

 To keep communication line open between the HRD function and individuals and groups both
within and outside the organization
 To identify and evolve HRD strategies in consonance with overall business strategy.
 To facilitate the development of various organizational teams and their working relationship with
other teams and individuals.
 To try and relate people and work so that the organization objectives are achieved efficiently and
effectively.
 To diagnose problems and determine appropriate solution particularly in the human resource
areas.
 To provide co-ordination and support services for the delivery of HRD programmes and services
 To evaluate the impact of an HRD intervention or to conduct research so as to identify, develop or
test how HRD In general has improved individual and organizational performance.
Pat Mc Lagan has suggested nine roles that are played by HR practitioners
1. To bring the issues and trends concerning an organization’s external and internal people to the
attention of strategic decision makers and to recommend long term strategies to support
organizational excellence and endurance.
2. To design and prepare HR systems and actions for implementation so that they can produce
maximum impact on organizational performance and development.
3. To facilitate the development and implementation of strategies for transforming one’s own
organization by pursuing values and visions.
4. To create a positive relationship with the customer’s by providing them with the best services; to
utilize the resources to the maximum and to create commitment among the people who help the
organization to meet the customers needs whether directly connected or indirectly connected to
the organization.
5. To identify the learning needs hence to design and develop structured learning programmes and
materials to help accelerate learning for individuals and groups.
6. To enable the individuals and groups to work in new situations and to expend \and change their
views so that people in power move from authoritarian to participative models of leadership.
7. To help employees to assess their competencies, values and goals so that they can identify, plan
and implement development plans.
8. He also assists the individual employee to add values in the workplace and to focus on the
interventions and interpersonal skills for helping people change and sustain change.
9. He assesses the HRD practices and programmes and their impact and to communicate results so
that the organization and its people accelerate their change and development.
According to Dave Ulrich HR play’s four key roles.
1. Strategic Partner Role
2. Change Agent Role
3. Employees Champion Role
4. Administrative Role
Current Classification of HR roles
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According to R.L Mathis and J. H. Jackson (2010) several roles can be fulfilled by HR management. The
nature and extent of these roles depend on both what upper management wants HR management to do
and what competencies the HR staff have demonstrated. Three roles are typically identified for HR. The
focus of each of them, as shown in Figure 1.is elaborated below:

Administrative Operational Actions Strategic HR

Personnel practices Managing employee
relationship issues strategies
and paperwork Employee advocate
HR strategic or planning
Evaluation of HR
effectiveness.

Figure 1.4 : Current Classification of HR roles

Fig 1.4 Current Classification of HR Roles
HRM IN THE NEW MILLENNIUM

1. HR Can Help in Dispensing Organizational Excellence: To achieve this paradigm shift in the
organization excellence there is a need for organizations to reform the way in which work is carried out by
the Human Resource department. By designing an entirely new role and agenda that results in enriching
the organization’s value to customers, investors and employees, HR can help in delivering organizational
excellence. This can be carried out by helping line managers and senior managers in moving planning from
the conference room to the market place and by becoming an expert in the way work is organized and
executed.
2. Human Resource Should be a Strategy Partner: HR should also become a partner in strategy
executions by propelling and directing serious discussions of how the company should be organized to
carry out its strategy.
3. HR Accountability Should be Fixed to Ensure Employee Commitment: HR must be held
accountable for ensuring that employees feel committed to the organization and contribute fully. They must
take responsibility for orienting and training line management about the importance of high employee
morale and how to achieve it. The new HR should be the voice of employees in management discussions.
The new role for HR might also involve suggesting that more teams be used on some projects or that
employees be given more control over their own work schedules.
4. The New HR Must Become a Change Agent: The new HR must become a change agent, which
is building the organization’s capacity to embrace and capitalize on change. Even though they are not
primarily responsible for executing change it is the duty of the HR manager to make sure that the organization
carries out the changes framed for implementation.
5. Improving the Quality of HR: The most important thing that managers can do to drive the new
mandate for HR is to improve the quality of the HR staff itself. Senior executives must get beyond the
stereotypes of HR professionals as incompetent support staff and unleash HR’s full potential
6. Change in Employment Practices: The balance sheet of an organization shows human resource as
an expense and not as a Capital. In the information age, it is perceived that the machines can do the work
more efficiently than most people however; technology to work is dependent on people.
7. Benchmarking Tool Must be Mastered by HR Professionals: HR professionals must master
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benchmarking, which is a tool for continuous improvement- directing the human side associated with the
strategic path adopted by the organization.
8. Aligning Human Resources to Better Meet Strategic Objectives: Too often organizations craft
their strategy in a vacuum.
9. Promote From Within and Invest in Employees: Promoting employees from within sends a powerful
message that the organization’s employees are valued. New blood and fresh ideas often come from
newcomers to the organization.
10. Review the Recruitment and Selection Process: A key element of human resource planning is
ensuring that the supply of appropriate employees (with the right skill mix) is on board when needed. This
requires a proactive approach whereby the organization anticipates its needs well in advance. It is important
to identify the competencies being sought. That is, the criteria upon which selection decisions are to be
made should be decided in advance. A firm must identify those skill sets required by employees to be
successful. Charles O’Reilly suggests that companies should hire for attitude (perhaps even more so than
technical skills). That is, the fit of the individual with the values of the organization and the culture of the firm
should also be considered when selecting employees. This has been referred to as the person-organization-
fit. It is no longer enough to simply consider the person’s fit (and technical skill set) with the job. Part of the
employee’s fit with the organization should focus on the core values and beliefs of the organization. This
will increase employees’ contributions to the overall success of the organization if they already embrace
the core values of the organization prior to their selection

11. Communicate Mission and Vision: If employees are expected to contribute to the attainment of the
organization’s strategic objectives, they must understand what their role is. This can be achieved in part by
clearly communicating the mission and vision statements of the firm. The old adage is certainly true. If a
person does not know where he or she is going, any road will get him or her there.

12. Use Teams to Achieve Synergy: Synergy can be concisely defined as “two plus two equals five”.
In other words, the whole is greater than the sum of the parts. So much more can be achieved as people
work together. Through the effective use of teams, organizations can often achieve synergy. Team goals,
however, must be aligned with the organization’s strategic objectives. Aligning team objectives with overall
corporate objectives ensures that people are working toward the same goals.

CHALLENGES OF HRM TODAY

1. Compliance with Laws and Regulations - keeping up with changing employment laws is a
struggle for business owners. Many choose to ignore employment laws, believing they don’t
apply to their business. But doing so could mean audits, lawsuits, and possibly even the demise
of your company.
2. Management Changes - As a business grows, its strategies, structure, and internal processes
grow with it. Some employees have a hard time coping with these changes. A lot of companies
experience decreased productivity and morale during periods of change.
3. Leadership Development - A recent study showed more than a third of companies are doing
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an average job, at best, at implementing leadership development programs. Thirty-six percent

of companies surveyed in Brandon Hall Group’s State of Leadership Development Study
admitted that their leadership development practices are below average.
4. Workforce Training and Development - Investing in the training and development of lower-
level employees is another common HR problem. Some businesses have trouble finding the
resources to do so. Employees on the front lines are some of your hardest workers, and may
not have the time to take a training course.
5. Adapting to Innovation - Technology is constantly changing. Businesses must be quick to adapt,
or risk being left in the dust by their competitors. The challenge for small business owners is
getting employees to embrace innovation and learn new technology.
6. Compensation - Many companies are struggling with how best to structure employee
compensation. Small businesses have to compete not only with businesses of a similar size,
but also with corporations with big payroll budgets. Plus, you have to factor in the cost of
benefits, training, taxes, and other expenses, which can range from 1.5 to 3 times the
employee’s salary.
7. Understanding benefits packages - Rising healthcare costs mean companies must either pass
these costs on to employees, or take a hit to their bottom line. Since good benefits packages
can be a deciding factor for potential hires, understanding them is key.
8. Recruiting Talented Employees - Attracting talent is a huge investment of time and money.
It’s difficult for entrepreneurs to balance between keeping a business running, and hiring the
right people at the right time. In addition, it’s impossible to know whether a candidate will
actually be a good fit until they’ve worked for you for a period of time.
9. Retaining Employees- Competition for talented employees is fierce. Startups and small
companies don’t have big budgets for retirement plans, expensive insurance plans, and other
costly items that their larger competitors do—at least, not yet. Employee turnover is expensive
and can negatively impact business growth.
10. Workplace Diversity - Multiple generations. Ethnic and cultural differences. These are just a
few of the many factors that make workplace diversity a continual challenge for small
businesses. The risk of lawsuits for failing to protect employees from harassment is real.
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