1

Role of HRM in Designing

Organizational Structure
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Contents :

 HRM in key elements of organizational design.

 HRM in Mechanistic & Organic Structures.
 Involvement of Human Resources with factors That affect
Structural Choices.
 Why HRM is important in Organizational Structure ?
 External Factors affecting HRM Process in Organizational
Structure.
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Continued :

 Identifying & Selecting Competent Employees For

Betterment of Organizational Structure.
 Why & How HRM Provide Employees With Needed Skills and
Knowledge ?
 Why an Organization Retain it’s Competent & High-
Performing Employees ?
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HRM in key elements of organizational
design.

The Key Elements of Organizational Design are :

1. Work Specialization
2. Departmentalization
3. Chain of Command
4. Span of Control
5. Centralization & Decentralization
6. Formalization
 Work 5
Specialization

Formalization Departmentalization

HRM
Centralization & Chain of
Decentralization Command

Span of
Control
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Work / Job Specialization

This means using job specialization,

which is just one of the processes
human resources uses to categorize
employees.
Job specialization, also called work
specialization or division of labour,
It is the process of separating all the
activities necessary for the business or
the organization into individual tasks.
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Forms of Departmentalization

The Five Common Forms of

Departmentalization
 By Functions
 By Product
 By Customer
Process
 By Geography
 By Process
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Chain of Command

The Line of Authority

Extending from upper
organizational levels
to the lowest levels,
Which clarifies who
reports to whom.
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Span of Control

The number of
employees a
manager can
effectively and
efficiently managed.
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Centralization & Decentralization

Centralization is the degree

to which decision making is
concentrated at upper level
of the organization.
Decentralization is the
degree to which lower level
employees provide input or
actually make decisions.
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Formalization

Formalization refers to
how standardized an
organization’s jobs are
and the extent to which
employee behavior is
guided by rules and
procedure.
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HRM in Mechanistic & Organic
Structures.

In mechanistic organization
the human capital is
used/utilized according to
their preference of outcomes.
In Organic organization the
human capital is used/utilized
to get more outcomes.
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Involvement of Human Resources with
factors That affect Structural Choices.

Strategy Size

Structure

Environmental
Technology
Uncertainty
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Strategy & Structure

An organization will
adopt a strategy
according to its structure
which facilitate its goal
achievement.
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Size & Structure
An organization’s size affects Large Size
its structure. Large
organization-typically
considered to be those with More
employees
more than 2000 employees-
tend to have more
involvement of human capital More Human
Resource
than do small organizations. Involvement
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Technology & Structure
Organizations adapt More
Technology
their structures to their
technology depending
Less employees
on how routine their
technology is for
Less Human
transforming inputs into Resource
outputs. Involvement
 Environmental Uncertainty 17

& Structure
More
Environmental
Managers mold their Uncertainty

organizational
Less mechanistic
structures according to
the environmental
Less Human
uncertainty. Resource
involvement
 Why HRM is important in 18

Organizational Structure ?
Importance of HRM in organizational
structure:
• Studies proved it.
• It is an important part of organizational
strategies.
• It effects organizational performance.
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• Studies Proved it:

According to recent
studies conducted by
IBM: Other
Factors

71% of CEO’s say that

71%
HRM
Involvem

there organizational
29%
ent

structure depends on
HRM.
 • HRM is an important part of 20

organizational strategies

Most of the organizations successful in strategy

implementation consider the human resource
factor as very important in making strategies
happen. Because,
According to them, consideration of human
resources requires that management thinks
about the organization’s needs.
 • HRM effects organizational 21

performance :

Improving work practices

of employees (Human
Resources) could
increase organization’s
market value up to 30%.
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External Factors affecting HRM Process
in Organizational Structure.

There are 4 external factors that affect HRM :

 Governmental Regulations
 Economic Conditions
 Technological Advancement
 Workforce Demographics
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• Governmental Regulations

With the introduction of new workplace

compliance standards your human resources
department is constantly under pressure to stay
within the law.
These types of regulations influence every process
of the HR department, including hiring, training,
compensation, termination, and much more.
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• Economic Conditions

One of the biggest external influences is the shape of

the current economy. Not only does it affect the
talent pool, but it might affect your ability to hire
anyone at all.
One of the biggest ways to prepare against
economic conditions is to not only know what’s
happening in the world around you, but also create a
plan for when there is an economic downturn.
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• Technological Advancement

More
This is considered an external
Technology
influence because when
new technologies are
introduced the HR Less employees
department can start looking
at how to downsize and look Less Human
for ways to save money. Resource
Involvement
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• Workforce Demographics

As an older generation retires and

a new generation enters the
workforce the human resources
department must look for ways to
attract this new set of candidates.
They must hire in a different way
and offer different types of
compensation packages that
work for this younger generation.
 Identifying & Selecting Competent 27
Employees For Betterment of Organizational
Structure.

For betterment of organization's structure HRM

need to identify and select competent
employees.
For this purpose it involves:
Human resource planning
Recruitment & Decruitment
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• Human resource planning :

Human Resource
planning is a process
that identifies current
and future human
resources needs for an
organizations to achieve
its Goals.
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• Recruitments & Decruitment

Recruitment is the process of locating,

identifying and attracting capable
applicants.
Decruitment is a technique for reducing the
labour supply within an organization e.g.
Firing, layoffs and retirement.
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Why & How HRM Provide Employees
With Needed Skills and Knowledge ?

WHY?
Because new hires must be acclimated to
the organization’s culture and be trained
and given the knowledge to do the job in
a manner consistent with the organization’s
goal
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Continued :

HOW?
HRM provides employees with needed skills
and knowledge through:
Orientation
Employee training
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• Orientation :

Orientation means
providing new
employees with
basic information
about the
organization.
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• Employee training :

Training is a program
that help employees
to learn specific
knowledge or skills to
improve their
performance in
organizations
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Why an Organization Retain it’s Competent
& High-Performing Employees ?

WHY?
Organization retains its competent and high
performing employees because Competent
Employees get things done but incompetent
employees don’t.
Therefore it was organization’s interest to hire & retain
as many competent employees as possible because it
makes the organizational structure Strong.
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PRESENTED BY:
GROUP “H”
MEMBERS:
Thank
You
 M. HAMMAD
 HAROON HANIF HAMEED
 M. ZEESHAN WAHEED MALIK
 ANAM NOSHEEN