HUMAN RESOURCE MANAGEMENT

Module 1
Introduction to Human Resource Management

Human Resource Management

Human Resource Management, or HRM, is the practice of managing people to achieve better performance.
Human resource management (HRM or HR) is the strategic approach to the effective and efficient
management of people in a company or organization such that they help their business gain a  competitive
advantage. It is designed to maximize employee performance in service of an employer's strategic
objectives. Human resource management is primarily concerned with the management of people within
organizations, focusing on policies and systems. HR departments are responsible for overseeing employee-
benefits design, employee recruitment, training and development, performance appraisal, and reward
management, such as managing pay and Employee benefits benefit systems. HR also concerns itself
with organizational change and industrial relations, or the balancing of organizational practices with
requirements arising from collective bargaining and governmental laws.
Learning Outcome

At the end of the chapter, the students should be able to:

1. Define what is Human Resource.
2. Enumerate and discuss the functions of HRM.
3. Explain the importance of HRM.
4. Discuss the benefits of HRM.
5. Discuss the factors that affect HR development.
6. Enumerate and explain the role of HR managers.
7. Explain the importance of HR managers in organizations.
Learning Content

1. Definition of Human Resource

2. The functions of HRM
3. The importance of HRM
4. Benefits of HRM
5. Factors that affect HR development
6. Role of HR managers
7. Importance of HR managers in organizations
Definition of Human Resource
It may feel a bit weird to refer to people as ‘human resources’. Human Resources are all the people that in
one capacity or another work for or contribute to an organization.
The functions of HRM are the following:
(1.) managerial, (2.) operative and (3.) advisory.
Managerial functions include:
1. Planning: The planning function of HRM ensures the best fit between employees and jobs while
avoiding manpower shortages or surpluses for the organization. There are four key steps of the HRP
 process: Analysing present human resource supply, forecasting human resource demand, balancing
projected the human resource demand with supply, and aligning the first three steps to the
organizational goals.

2. Organizing: Organizing is the function of HRM that involves developing an organizational structure
to ensure the accomplishment of the organizational goals. The structure is usually represented by
an organization chart, which provides a graphic representation of the chain of command within an
organization.

3. Directing: This includes activating employees at different levels and making them contribute
maximum towards organizational goal. Tapping maximum potentialities of an employee via
constant motivation and command is a prime focus for this function of HRM.\

4. Controlling: Post planning, organizing and directing, performance of an employee is to be

evaluated, verified and compared with organizational goals. If performance is found to be deviating
from the plan, control measures are to be taken.
Operative function Includes:
1. Recruitment and Selection: Recruitment and selection creates a pool of prospective candidates and
selects the right candidates from that pool. According to a study by the Allegis Group, 83% of
organizations believe attracting and retaining talent is a growing challenge.

2. Job Analysis & Design: This HRM function includes describing nature of the job, including the
requisite qualifications, skills, and work experience for a specific position within an organisation.
This function is crucial in helping to combining tasks, duties and responsibilities into a single work
unit to achieve organizational goals.
3. Performance management: Checking and analysing employee performance is another important
function that HRM performs. According to Deloitte’s Global Human Capital Trends study, 79% of
executives rate redesign of performance management system and practices to incorporate
elements like continuous feedback, goal-setting, and employee-driven communication as a high
priority.

4. Learning & Development (L&D): This HRM function allows employees to acquire new skills and
knowledge to perform their job effectively. L&D also prepares employees for taking up higher level
of responsibilities. According to the Association for Talent Development (ATD), organizations that
offer comprehensive training programs have 218% higher income per employee than organizations
without formalized training.

5. Compensation management: HRM also includes determining pays for different job types and
compensations, incentives, bonuses and benefits related to a job function. According to Jobvite,
most people (19%) left their jobs for compensation reasons.

6. Policies: HRM functions by drafting, revising, publishing and implementing the organizational
policies, which are essential for the fair treatment for all the employees.

7. Employee Welfare: This function takes care of numerous services, benefits and facilities provided to
an employee for their wellbeing. According to a study by MetLife, 51% of employers say using
 health and wellness benefits to maintain employee loyalty and retain talent will become even more
important in the next 3 to 5 years.

8. HRMS: This function involves recording, maintaining and retrieving employee related information
including employment history, work hours, earning history etc.
Advisory function includes:
1. Top Management Advice: One of the critical HRM functions is to advise the top management in
formulating policies and procedures. The advisory function of HRM also advise the top
management on appraisal of manpower. This function also involves advice regarding maintaining
high-quality human relations and improving employee morale.
2. Departmental Head advice: Under this HRM function, HRM advises the heads of various
departments on policies related to job design, job description, recruitment, selection, appraisals.
The importance of HRM
The following reasons highlight the importance of HRM.
1. Recognizing and valuing individuals: HRM acknowledges every employee’s worth within the
organization, suggesting that the organization recognize and value individual contributions.
The empathy monitor study by the Businessolver states that 93% of employees say they’re more
likely to stay at an organization with an empathetic employer. Also, the happywork study by
Ultimate Software says that 75% of employees would stay longer at an organization that listens to
and addresses their concerns.

2. People bring ideas: HRM manages people, and people bring new new skills and ideas into the
organization and fuel the growth of business.

3. Quality of work life: Quality of work life is a legitimate concern, and that employees have a right to
safe, clean, and pleasant surroundings, which is one of the responsibilities of HRM. According to
‘Global Productivity Hinges on Human Capital Development’, a study by Gallup, 85% of employees
worldwide feel disengaged at work and only 15% derive fulfillment from their work.

4. Upskilling is a long-term interest: HRM recognizes the need for continuous learning; talents and
skills must be continually refined in the long-term interests of the organization.

5. Facilitate continual worker adaptation: Opportunities are constantly changing. Organizations need
methods to facilitate continual worker adaptation and HRM provides the organization with those
methods.

6. Employee satisfaction: People have a right to be satisfied by their work, and organizations have a
responsibility, and a profit motivation, to try to match their skills with their job. According
to DecisionWise via Human Resources Today, 64% of workers globally feel their job gives them a
sense of meaning and purpose.

7. Beyond technical training: HRM has a much broader scope than technical training—employees
need to know more than the requirements of a specific task in order to make their maximum
contribution.
Benefits of HRM
 1. Strategic Management: HRM enhances the company’s bottom-line by triggering positive output,
leading to organizational success. Leaders with expertise in HRM participate in corporate decision-
making that underlies human resource decisions.

2. Mission, vision, values, and goals: HRM when handled strategically contributes to an organization’s

mission, vision, values, and goals. This, in turn, enables employees to see where they fit within the
organization and helps to shape and define their roles.

3. Branding internally: Creating a positive brand about the organization for its employees and internal
stakeholders is an important responsibility of HRM. According to a study by CultureIQ, Building an
employer brand and company culture helps companies increase qualified candidates (49%),
increase diverse candidates (32%), increase employee referrals (41%), and hire the right people
(55%).

4. Creating awareness for employees: HRM builds workplace awareness by providing complete
information to employees of their functioning and governance.

5. Maintaining a conducive work environment: A favourable work environment within the

organization where the employees can have both hygiene factors and motivators is taken care of by
HRM. One of the top employer attributes that jobseekers value most is a pleasant working
atmosphere, according to a study by Ranstand.

6. Talent management: This is one of the important responsibilities of HRM. HRM remains committed
to recruitment and selection, on-boarding, training, management development, performance
management, succession planning, career paths, and other aspects of talent management.

7. Organizational culture: HRM impacts the culture of the organization and has a key role to play in
ensuring that an organization’s culture continues to be supportive and effective. The culture of an
organization never solidifies — it changes with changing demographics, workplace norms, industry
forces and other factors. HRM moulds the organization’s culture, and the organization’s culture is
reflected in the HRM – so they are interlinked. According to another study by CultureIQ, 73% of
employers believe a great corporate culture gives their organizations a competitive edge.

8. Conflict management: Conflicts are part of any healthy and robust organization. Not everyone
always feels the same way, but they need to develop effective working relationships for
contributions and productivity. HRM helps by knowing the personalities of each of the employees
and taking on the necessary role of advocate, coach or mediator.
Factors that affect HR development
1. Align business strategies with external and internal factors. For example, consider how your current
strategy aligns with economic changes (i.e., external factors) and the expectation of a high return on
investment in the case of training and development costs (i.e., internal factors).
2. Ensure your talent strategy also aligns with the company's overall plan. The main and essential key to
managing a provocative workforce is to streamline the strategies of the talent management process
alongside the overall company strategy. Ultimately, the aptitude of training, developing and then retaining
the employees depends upon the success of the business operations.
3. Get ahead of your competitors by being proactive. In my experience, leaders who use the best talent
management practices find themselves more equipped and can make effective use of available
opportunities to help operate their businesses. But this is only obtainable when management does more
than just adopt new trends; they must quickly anticipate and adapt to new and emerging opportunities
regarding talent management before the rest of the market. In this manner, executing a proactive
approach, rather than a reactive approach, indicates the implications of the strategic talent management
in the business processes to support the capability development in the organization.
4. Evaluate what training is essential, and execute it well. Evaluating key areas and the need for training is
mandatory. It's also helpful for saving on abundant training costs involved with the workforce. The
execution of the training and development is a necessity because of its impact on the involvement of
change management in the business processes.
5. Use various tools to assess the capabilities of your workforce. Annual appraisals and reviews can be
highly effective tools to analyze the capacity and capabilities of the workforce if conducted consistently
and correctly. Therefore, I recommend organizations adopt a pay-for-performance culture in their
organizations to boost the productivity of employees. From my perspective, this might encourage
employees to work harder and thus improve their capacity to adapt to changes and innovations.
Role of HR managers
1. Recruitment: One of the major responsibilities of a HR manager is to recruit personnel. The success of
an organization largely depends on the workforce employed, so it is essential that the right people are
hired for the right role.
2. Learning and development: Learning is a continuous process and essential to enhance employees’
productivity. HR managers are responsible for the orientation and induction of new employees, as well as
the professional development of existing employees. They are responsible for strategizing development
programs. Furthermore, they must have the ability to identify and analyze the areas that employees need
training for.
3. Building employee relations: Effective employee relations go a long way in boosting productivity and
contributes significantly to an organization’s success. Employee relations strategies are implemented to
ensure that an organization caters to the overall well-being of employees.
4. Compensation and benefits: A major component of a HR manager’s job role is handling compensation
and benefits. They are responsible for devising compensation strategies, performance management
systems and compensation structures, as well as negotiating pay and benefit packages with potential
employees.
Importance of HR managers in organizations
1.Strategy management: This is an important aspect of any organization and plays a vital role in human
resource management. HR managers manage strategies to ensure the organization reaches its business
goals, as well as contributing significantly to the corporate decision-making process, which includes
assessments for current employees and predictions for future ones based on business demands.
2. Benefits analysis: HR managers work towards reducing costs, such as with recruitment and retention.
HR professionals are trained to conduct efficient negotiations with potential and existing employees, as
well as being well-versed with employee benefits that are likely to attract quality candidates and retaining
the existing workforce.
3. Training and development: Since HR managers contribute significantly to training and development
programs, they also play a pivotal role in strengthening employer-employee relationships. This contributes
to the growth of employees within the company, hence enhancing employee satisfaction and productivity.
4. Interactivity within employees: HR managers are responsible for conducting activities, events and
celebrations in the organization which gives way to team building opportunities. Moreover, it enhances
interactivity within employees and instils a sense of trust and respect among peers.
5. Conflict management: The department to go to when any kind of professional conflict arises between
employees is HR. They ensure that issues and conflicts are resolved effectively, approaching the problem
with an unbiased attitude and encouraging effective communication to reach a solution. In addition, they
help employees understand various ways of developing effective work relationships and the importance of
not letting personal judgement affect their behavior.
6. Establishing a healthy work culture: A healthy work culture is pivotal in bringing out the best in
employees. HR managers contribute significantly in setting up a healthy and friendly work culture, which
further translates into better productivity among employees.
7. Compliance: HR professionals work towards making the organization compliant with employment laws,
as well as maintaining records of hiring processes and applicants’ log.
Learning Task 1:
Read the following resource materials. (Module or E-resources)
1. https://www.brightnetwork.co.uk/career-path-guides/asset-investment-management/investment-
management-firm/
2. https://www.thebalance.com/asset-management-companies-for-beginners-4048203#what-is-asset-
management

Learning Task 2:
Read and watch the following resource materials. (Module or E-resources)
1. https://www.youtube.com/watch?v=DTB4Kd-gCvU
2. https://www.youtube.com/watch?v=RYxhmhUqLj8

Assessment Task:
1. Define what is Human Resource.
2. Enumerate and discuss the functions of HRM.
3. Explain the importance of HRM.
4. Discuss the benefits of HRM.
5. Discuss the factors that affect HR development.
6. Enumerate and explain the role of HR managers.
7. Explain the importance of HR managers in orga
References;

1. Johnason, P. (2019). HRM in changing organizational contexts. In D. G.Collings & G. Wood (Eds.),
Human resource management: A critical approach (pp. 19-37).
2. London: Routledge.Collings, D. G., & Wood, G. (2019). Human resource management: A critical
approach. Paauwe, J., & Boon, C. (2019).
3. Strategic HRM: A critical review. In D. G. Collings, G. Wood (Eds.)
4. London: Routledge.Klerck, G. (2019). "Industrial relations and human resource management".
5. In D. G. Collings & G. Wood (Eds.), Human resource management: A critical approach (pp. 238-259).
London: Routledge.
6. https://searchhrsoftware.techtarget.com/definition/human-resource-management-HRM
7. https://www.google.com/search?q=human+resource+management+meanin
8. https://en.wikipedia.org/wiki/Human_resource_management