MODULE 3

LESSON 1. DEFINITION & SCOPE OF HRM

In simple words, HRM is a process of making the efficient and

effective use of human resources so that the set goals are achieved. Let
us also consider some important definitions of HRM.

According to Flippo “Personnel management, or say, human

resource management is the planning, organising, directing and
controlling of the procurement development compensation
integration, maintenance, and separation of human resources to the
end that individual, organisational and social objectives are
accomplished”.

The National Institute of Personnel Management (NIPM) has

defined human resource/personnel management as “that part of
management which is concerned with people at work and with their
relationship within an enterprise. Its aim is to bring together and
develop into an effective organisation of the men and women who
make up an enterprise and having regard for the well-being of the
individuals and of working groups, to enable them to make their best
contribution to its success”.

According to Decenzo and Robbins “HRM is concerned with the

people dimension in management. Since every organisation is made
up of people, acquiring their services, developing their skills,
motivating them to higher levels of performance and ensuring that
they continue to maintain their commitment to the organisation are
essential to achieving organisational objectives. This is true, regardless
of the type of organisation-government, business, education, health,
recreation, or social action”.

Thus, HRM can be defined as a process of procuring, developing

and maintaining competent human resources in the organisation so
that the goals of an organisation are achieved in an effective and
efficient manner. In short, HRM is an art of managing people at work
in such a manner that they give their best to the organisation for
achieving its set goals.
SCOPE

The scope of HRM is, indeed, very vast and wide. It includes all
activities starting from manpower planning till employee leaves the
organisation. Its scope consists of acquisition, development,
maintenance/retention, and control of human resources in the
organisation. The same forms the subject matter of HRM. 
LESSON 2. IMPORTANT OBJECTIVES OF HUMAN RESOURCE MANAGEMENT

The primary objective of HRM is to ensure the availability of a competent and willing workforce to an
organization. Beyond this, there are other objectives, too. Specifically, HRM objectives are four
folds- societal, organizational, functional, and personal.

Societal Objectives: To be ethically and socially responsible to the needs and challenges of the
while minimizing the negative impact of such demands upon the organization. The failure of
organizations to use their resources for the society’s benefit in ethical ways 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 societal concern.
 Organizational objectives: To recognize the role of HRM in bringing about organizational
effectiveness. HRM is not an end in itself. It is only a means to assist the organization with its
primary objectives. Simply stated, the department exists to serve the rest of the organization.

Functional Objectives: To maintain the department’s contribution at a level appropriate to the

organization’s needs. Resources are wasted when HRM is either more or less sophisticated to suit
the organization’s demand. The department’s level of service must be tailored to fit the organization
it serves.                 

Personal objectives: To assist an employee in achieving their personal goals, at least insofar as
these goals enhance the individual’s contribution to the organization. Personal objectives of
employees must be met if workers are to be maintained, retained and motivated. Otherwise,
employee performance and satisfaction may decline and employees may leave the organization.

LESSON 3:

DOWNFALLS CAUSED BY IMPROPER HUMAN RESOURCE MANAGEMENT

While most companies work toward avoiding mistakes caused by hiring the wrong
person for the job, the following are the common things that result from not being
able to manage human resource effectively.

1. High Turnover Rate

For human resources, high turnover rate is the ratio of employees leaving the
company versus the rate at which they are being hired (or the number of
employees at the start of the evaluation period). High turnover rate usually equates
to turnover costs which include the following costs.

 The cost to hire a replacement – includes recruitment costs such

as ads and headhunters, interview costs, travel costs, credential testing,
pre-employment screening tests, signing bonuses and relocation bonuses.
 The cost to train a new hire – training costs include training
materials, time converted for training, benefits, administrative processing
such as opening of accounts, emails, and enrollment to payroll.

 The cost for that new hire to reach the same productivity level
as the one who left – which mostly involves hours of production or office
time.

 Opportunity costs – costs involved in not getting a sale or project

because of your lack of employees to handle it (while these are probably
consequential and hard to measure, these opportunities are real and
otherwise wasted).

2. Complacent Employees
Employees who seem to not be doing their best when it comes to their work must
have reasons. For the most part, the reason would be demotivation. Most
employees would feel demotivated having to cover for leaving employees and
waiting for the replacement to take the additional load they are doing.

Another reason may be for policies not being followed to the letter. Strict
implementation of the rules should accompany proper procedure and disciplinary
action in fairness to the violation made.

3. Discrimination Cases
Discrimination cases happen when there is a lapse on the side of management to
clearly define the boundaries for discrimination. By clearly stating it in your
personnel policy and having an employee understand the policy clearly prevents
such cases from arising out of the workplace.

4. Being Fined for Occupational Hazards and Unsafe Practices

Penalties and fines make up for a substantial cost and a plain slap-in-the-face bad
rep. Human resource management aims to maintain a company’s good image, and
 having bad reputation on these matters leaves a somewhat bad taste in managers’
mouths.

5. Employee Discontent
Happens when employees feel they are being undervalued and underpaid in the
company. This is a clear indication of human resource management failure that
aims to promote satisfaction from both employee and employer. Mostly this results
from poor salary-rate analysis and review and simply not paying attention to
employee satisfaction surveys and interviews.

Courses of action to take to solve this issue:

 The root cause of the problem should be immediately identified and

resolved.

 Proper expectations should be set to help employees clearly

understand what to expect in terms of pay, benefits, and promotions.

 Another way to go about it is approaching the situation in a personal

manner and treating employees as part of one big business family. This
way you can both be honest and straight to the point in discussing what
you want and what the other needs.

6. Decrease in Production Efficiency

Most notably happens when new processes are introduced to the working
environment. All goes back to the training and re-training of employees to handle
the new processes. Human resource management should be able to track and
identify the measure of skill and effectiveness for each employee and identify which
ones need further training or re-training.

7. Unfair Labor Practices

As human resource management is directed at hiring only the best candidates and
keeping skilled employees, enforcement of standards in terms of labor laws and
codes should be strictly followed and not compromised. Doing so would
considerably boost employee performance since labor practices are only geared
toward the welfare of employees.

While there exists no sure silver bullet to avoid mistakes in managing human
resources, one easy way would be to look at your current employee satisfaction.

This can easily be done through various methods available, such as surveys and
exit interviews. Remember that retaining employees who already know the ins and
outs of your business is far better and way cheaper than going through the process
of hiring new employees and crossing fingers on the hope that they do well.

LESSON 4.
Keep in mind that many functions of HRM are also tasks of other department managers, which is what
makes this information important, despite the career path taken. Most experts agree on seven main
roles that HRM plays in organizations. These are described in the following sections.

 Staffing
You need people to perform tasks and get work done in the organization. Even with the
most sophisticated machines, humans are still needed. Because of this, one of the
major tasks in HRM is staffing. Staffing involves the entire hiring process from posting
a job to negotiating a salary package. Within the staffing function, there are four main
steps:
1 Development of a staffing plan. This plan allows HRM to see how many people
they should hire based on revenue expectations. 
2.Development of policies to encourage multiculturalism at
work. Multiculturalism in the workplace is becoming more and more important, as we
have many more people from a variety of backgrounds in the workforce.
3 Recruitment. This involves finding people to fill the open positions.
4 Selection. In this stage, people will be interviewed and selected, and a proper
compensation package will be negotiated. This step is followed by training, retention,
and motivation.

 Development of Workplace Policies

Every organization has policies to ensure fairness and continuity within the organization. One of
the jobs of HRM is to develop the verbiage surrounding these policies. In the development of
policies, HRM, management, and executives are involved in the process. For example, the HRM
professional will likely recognize the need for a policy or a change of policy, seek opinions on
the policy, write the policy, and then communicate that policy to employees. It is key to note
here that HR departments do not and cannot work alone. Everything they do needs to involve all
 other departments in the organization. Some examples of workplace policies might be the
following:

1. Discipline process policy

2. Vacation time policy
3. Dress code
4. Ethics policy
5. Internet usage policy

 Compensation and Benefits Administration

HRM professionals need to determine that compensation is fair, meets industry standards, and is
high enough to entice people to work for the organization. Compensation includes anything the
employee receives for his or her work. In addition, HRM professionals need to make sure the pay
is comparable to what other people performing similar jobs are being paid. This involves setting
up pay systems that take into consideration the number of years with the organization, years of
experience, education, and similar aspects. Examples of employee compensation include the
following:

1. Pay
2. Health benefits
3. 401(k) (retirement plans)
4. Stock purchase plans
5. Vacation time
6. Sick leave
7. Bonuses
8. Tuition reimbursement

 Retention

Retention involves keeping and motivating employees to stay with the organization.

Compensation is a major factor in employee retention, but there are other factors as well. Ninety
percent of employees leave a company for the following reasons:

1. Issues around the job they are performing

2. Challenges with their manager
3. Poor fit with organizational culture
4. Poor workplace environment
  Training and Development

Once we have spent the time to hire new employees, we want to make sure they not only are
trained to do the job but also continue to grow and develop new skills in their job. This results in
higher productivity for the organization. Training is also a key component in employee
motivation. Employees who feel they are developing their skills tend to be happier in their jobs,
which results in increased employee retention. Examples of training programs might include the
following:

1. Job skills training, such as how to run a particular computer program

2. Training on communication
3. Team-building activities
4. Policy and legal training, such as sexual harassment training and ethics training

 Dealing with Laws Affecting Employment

Human resource people must be aware of all the laws that affect the workplace. An HRM
professional might work with some of these laws:

1. Discrimination laws
2. Health-care requirements
3. Compensation requirements such as the minimum wage
4. Worker safety laws
5. Labor laws

The legal environment of HRM is always changing, so HRM must always be

aware of changes taking place and then communicate those changes to the
entire management organization.

 Worker Protection

Safety is a major consideration in all organizations. Oftentimes new laws are created with the
goal of setting federal or state standards to ensure worker safety. Unions and union contracts can
also impact the requirements for worker safety in a workplace. It is up to the human resource
manager to be aware of worker protection requirements and ensure the workplace is meeting
both federal and union standards. Worker protection issues might include the following:

1. Chemical hazards
2. Heating and ventilation requirements
3. Use of “no fragrance” zones
4. Protection of private employee information
  Communication

Besides these major roles, good communication skills and excellent management skills are key to
successful human resource management as well as general management. 

 Awareness of External Factors

In addition to managing internal factors, the HR manager needs to consider the outside forces at
play that may affect the organization. Outside forces, or external factors, are those things the
company has no direct control over; however, they may be things that could positively or
negatively impact human resources. External factors might include the following:

1. Globalization and offshoring

2. Changes to employment law
3. Health-care costs
4. Employee expectations
5. Diversity of the workforce
6. Changing demographics of the workforce
7. A more highly educated workforce
8. Layoffs and downsizing
9. Technology used, such as HR databases
10. Increased use of social networking to distribute information to employees