INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Human resource management (HRM) is concerned with the “people” dimension in

management. Since every organization is made up of people, acquiring their services,
developing their skills, motivating them to high levels of performance, and ensuring that
they continue to maintain their commitment to the organization are essential to achieving
organizational objectives. This is true regardless of the type of organization- government,
business, education, health, recreation or social action. Getting and keeping good people
is critical to the success of every organization, whether profit or nonprofit, public or
private. Those organizations that are able to acquire, develop, stimulate, and keep
outstanding workers will be both effective (able to achieve their goals) and efficient
(expending the least amount of resources necessary).
To look at HRM more specifically, we suggest that it is a processes consisting of four
functions – acquisition, development, motivation, and maintenance –of human resources.
The acquisition function begins with human resource planning. It ensures that the
organization has the right number and kind of people at the right place at the right time.
Relative to human resource requirements, we need to know where we are going and how
we are going to get there. This includes the estimating of demands and supplies of labor.
Acquisition also includes the recruitment, selection, and socialization of employees.
Socialization is the process of adaptation. It takes place as individuals attempt to learn the
values and norms of work roles.
Development function can be viewed along three dimensions. The first is employee
training, which emphasizes skill development and the changing of attitudes among
workers.
The second is management development, which concerns itself primarily with knowledge
acquisition and the enhancement of an executive’s conceptual abilities.
The third is career development, which is the continual effort to match long-term
individual and organizational needs. It ensures that the organization gets people with
proper qualification and experience when needed and the people get advancement in their
work lives.
Motivation is the internal state of mind that induces people to put forth efforts willingly
and enthusiastically towards the achievement of organizational goals.
Motivation function in HRM is concerned with helping employees exert at high energy
level.
Motivation function begins with the recognition that individuals are unique and that
motivation techniques must reflect the needs of each individual.
Within the motivation function, behavioral and structural techniques for stimulating
worker performance, performance appraisal, linking rewards to performance and
employee benefits are reviewed.
The final function is maintenance. In contrast to the motivation function, which attempts
to simulate performance, the maintenance function is concerned with providing those
working conditions that employees believe are necessary in order to maintain their
commitment and loyalty to the organization.
HRM must ensure a safe and healthy working condition, care for employee wellbeing,
assist employees in dealing with problems they faces in their personal life and keep them
abreast of what is happening in the organization and knowledgeable of policies and
procedures affecting them to ensure their commitment and loyalty to the organization.

IMPORTANCE OF HRM
Prior to 1960s personnel departments in organizations were often perceived as the
‘Health and happiness’ crews. Their primary job activities involved planning company
picnic, scheduling vacations, enrolling workers for health-care coverage, and planning
retirement parties. That has changed during the past three decades.
State laws have placed on employers many new requirements concerning hiring and
employment practices.
Jobs have also changed. They have become more technical and require employees with
greater skills.
Job boundaries are becoming blurred.
Global competition has increased the importance of improving workforce productivity
and looking globally for the best-qualified workers.
Thus, organizations need HRM specialist trained in psychology, sociology, organization
and work design, and law.
Since every organization is made up of people, acquiring their services, developing their
skills, motivating them to high levels of performance, and ensuring that they continue to
maintain their commitment and loyalty to the organization are essential to achieving
organizational objectives.
Someone must ensure that these activities (acquisition, development, motivation and
maintenance) are done properly.
The ‘someones’ we refer to, those primarily responsible for carrying out these activities,
are human resource professionals.
Professionals in human resources are important elements in the success of any
organization.

NATURE OF HRM
HRM consist of people related functions as hiring, training and development,
performance evaluation, compensation, safety and health, welfare, industrial relation and
the like. These are typically the functions of ‘personnel management’ and are
administrative and supportive in nature. Appropriately called ‘doables’.
More important functions of HRM are the building of human capital (stock of employee
skills, knowledge and capabilities) also known as ‘deliverables’ lends competitive
advantage to a firm. The doables and deliverables are interdependent.
HRM necessitates alignment of HR policies and practices with the organization’s
strategies both corporate and functional.
HRM involves the application of management principles and function to doables and
deliverables of people management.
HRM assumes that it is the people who make difference. They alone are capable of
generating value and adding to the competitive advantage to organizations.
HR activities are not the sole responsibilities of the HR specialists. Line managers are
equally responsible for carrying out the activities.
HR functions are not confined to business establishments only. They are applicable to
non-business organizations too.

OBJECTIVES OF HRM
The primary objective of HRM is to ensure the availability of a competent and willing
work force to an organization. Specifically, HRM objectives are four fold:
Societal Objectives: To be ethically and socially responsible to the needs and challenges
of the society while minimizing the negative impact of such demands upon the
organization.
Organisational Objectives: To recognize the role of HRM in bringing about
organizational effectiveness.
Functional Objectives: To maintain the department’s contribution at a level appropriate
to the organization’s needs.
Personal Objectives: to assist employees in achieving their personal goals, at least
insofar as these goals enhance the individual’s contribution to the organization.

STRATEGIC IMPLICATION OF A DYNAMIC HRM ENVIRONMENT

The world of work is changing rapidly. As part of organization, human resource
management (HRM) must be prepared to deal with the effects of the changing world of
work. This means understanding the implications of globalizations, technological
changes, workforce diversity, labor shortages, the contingent workforce, changing skill
requirement, continuous improvement initiatives, decentralized work sites and employee
involvement.
Globalization
Part of the rapidly changing environment organizational members face is the
globalization of business. Globalization refers to the tendency of firms to extend their
sales, ownership, and/or manufacturing to new markets abroad. Organizations are no
longer constrained by national borders. Unilever, McDonald’s, Exxon-Mobil all operate
outside national boundaries. Finland-based phone maker Nokia is increasingly recruiting
employee from India, China and other developing countries at its renowned research
center in Helsinki. And all major automobile manufacturers (Honda, Ford, Mercedes and
BMW) now build cars outside their borders. In this process managers job is changing. In
case of foreign assignments managers have to manage a workforce that is likely to be
very different in needs, aspirations, and attitudes from those they were used back home.
Even in their own country they are going to find themselves working with bosses, peers,
and other employees who were born and raised in different cultures. What motivates your
may not motivate them. Or your style of communication may be straightforward and
open but they may find this approach uncomfortable and threatening.
To be effective in this boundless world, organizational members need to adapt to
cultures, systems and techniques different from their own. The rise of multinational
corporations places new requirements on human resource managers. For instance, human
resource must ensure that employees with the appropriate mix of knowledge, skills and
cultural adaptability are available to handle global assignment. Flexibility and
adaptability are key components for employees going abroad. To make this a reality,
human resource mangers must have a thorough understanding of the culture of the areas
around the globe in which they may send employee. HRM must also develop
mechanisms that will help multicultural individuals work together. As background,
language, customs or age difference become more prevalent, employee conflicts is likely
to increase. HRM must make every effort to acclimate different groups to each other,
finding way to build team and thus reduce conflict.
Cultural Implications for HRM
Most HRM practices have typically been developed by Americans using American
subjects within American organizations. Not all HRM theories and practices, therefore,
are universally applicable to managing human resources around the world. This is
especially true in countries where work values differ considerably from those in the
United States. Second, human resource managers must take cultural values into account
when trying to understand the behavior of people from different countries as well as those
in different countries.
Workforce Diversity
One of the most important and broad-based challenges currently facing organizations is
adapting to people who are different. The term we use for describing this challenge is
workforce diversity. While globalization focuses on differences between people from
different countries, workforce diversity addresses differences among people within given
countries.
Workforce diversity means that organizations are becoming a more heterogeneous mix
of people in terms of gender, age, race, and ethnicity. A diverse workforce, for instance,
includes male and female’ white and black, physically disable, senior citizens, Asian,
Hispanic, African, Native American etc. Managing this diversity has become a global
concern. We used to take a melting-pot approach to differences in organizations,
assuming people who were different would some how automatically want to assimilate.
But we now recognize that employees don’t set aside their cultural values, lifestyle
preferences, and differences when they come to work. The challenge for organizations,
therefore, is to make themselves more accommodating to diverse groups of people by
addressing their different lifestyles, family needs, and work styles.
How diversity Affects HRM
As organizations become more diverse, employers have been adapting their human
resource practices to reflect those changes. Many organizations today, such as Bank of
America, have workforce diversity programs. They tend to hire, promote and retain
minorities; encourage vendor diversity; provide diversity training for employees. Some,
like Coca-Cola, Motorola and Mars, actually conduct cultural audits to ensure that
diversity is pervasive in the organization.
Workforce diversity requires employers to be more sensitive to the differences that each
group brings to the work setting. For instance, employers may have to shift their
philosophy from treating every one alike to recognizing individual differences and
responding to those differences in ways that will ensure employee retention and greater
productivity. They must recognize and deal with the different values, needs, interests and
expectations of employees. They must avoid any practice or action that can be interpreted
as being sexist, racist, or offensive to any particular group and of course must not
illegally discriminate against any employee.

Helping Employee Balance Work/Life Conflicts: Employees are increasingly

complaining that the line between work and non-work time has become blurred, creating
personal conflicts and stress. A number of forces have contributed to blurring the lines
between employees’ work life and personal life. First, the creation of globalizations
means their world never sleeps. At any time and on any day, for instance, thousands of
General Electric employees are working somewhere. The need to consult with colleagues
or customers 8 to 10 time zones away means that many employees of Global firms are
“on call” 24 hours a day. Second, communication technology allows employees to do
their work at home, in their cars, or on the beach. Third, organizations are asking
employees to put in longer hours. Finally, fewer families have only a single breadwinner.
Today’s married employee is typically part of a dual-career couple. This makes it
increasingly difficult for married employee to find the time to fulfill commitments to
home, spouse, children, parents, and friends.
Employees are increasingly recognizing that work is squeezing out personal lives, and
they’re not happy about it. Organizations that don’t help their people achieve work/life
balance will find it increasingly hard to attract and retain the most capable and motivated
employees.
The Changing World of Technology
Many of the improvements that make firms world class involve technology. Technology
includes any equipment, tools or operating methods designed to make works more
efficient. Technological advances make the organizations more productive and help them
create and maintain a competitive advantage. Technology has had a positive effect on
internal operations for organizations but it also has changed the way human resource
mangers work. They work and provide support in what have become integrative
communication centers. By linking computers, telephone, fax machine, copiers, printers,
and the like, they disseminate information more quickly. In addition, technology helps
them circumvent the physical confines of working only in a specified organizational
location. With notebooks, and desktop computers, fax machines, high-speed modems,
organizational Internets and other forms of technology, organizational members can do
their work any place, any time in decentralized work sites.
Technology is having a major impact on HRM. It’s giving all employees instant access to
information and changing the skill requirements of employees. Technological changes
have required HRM to address or change its practices when it deals with such activities
as recruiting and selecting employees, motivating and paying individuals, training and
developing employees and in legal and ethical matters. Technology helps mangers better
facilitate human resource plans, make decisions faster, more clearly define jobs, and
strengthen communications with both the external community and employees.
Today, HR faces the challenge of quickly applying technology to the task of improving
its own operations.
Responding to the Coming Labor Shortage
US statistics shows that shortage of skilled labor will be prevalent in most of Europe
including U.S.A. for about 10 to 15 years because of decline in birth rate and labor
participation rates particularly in USA and most of Europe.
In times of labor shortage, good wages and benefits aren’t going to be enough to get and
keep skilled employee. Managers will need sophisticated recruitment and retention
strategies. In addition, mangers will need to modify organizational practices to reflect the
needs of an older workforce and consider ways to motivate younger workers who fell
stuck when older colleagues don’t retire.
How do Organizations Balance Labor Supply?
Thousands of organizations in the global village have decided they could save money and
increase their flexibility by converting many jobs into temporary or part-time positions,
giving rise to what is commonly referred to as the contingent workforce. Today
temporary workers can be found in secretarial, nursing, accounting, assembly-line, legal,
dentistry, computer programming, engineering, marketing and even management
positions. Why the organizations emphasis on contingent employees? Organizations
facing a rapidly changing environment must be ready to adjust rapidly. Having too many
permanent full-time employees limits management’s ability to react.
Temporaries and the flexibility they foster present special challenges for human resource
mangers. Each contingent worker may need to be treated differently in terms of practice
and policies. Human resource managers must also make sure that contingent workers do
not perceive themselves as second-class workers. Because they often do not receive many
of the amenities – such as health and paid leave benefits – that full time core workers do,
contingent workers may tend to view their work as not critically important. Accordingly,
they may be less loyal, committed to the organization, or motivated on the job than are
permanent workers. Today’s human resource mangers must recognize their responsibility
to motivate their entire workforce – full time and temporary employees and to build their
commitment to doing good work.
Continuous Improvement Programs
In the 1990s, organizations around the world added capacity in response to increased
demand. Companies built new facilities, expanded services, and added staff. The result?
Today, almost every industry suffers from excess supply. Retail suffers from too many
malls and shopping centers. Automobile factories can build more cars than consumers
can afford to buy.
Excess capacity translates into increased competition. And increased competition is
forcing mangers to reduce cost while, at the same time, improving their organization’s
productivity and the quality of the products and services they offer. To achieve these
ends, mangers are implementing programs such as quality management or continuous
improvement and process reengineering.
Quality Management is driven by the constant attainment of customer satisfaction
through the continuous improvement of all organizational processes. Instead of merely
making incremental changes in processes, reengineering involves evaluating every
process in terms of its contribution to the organization’s goals. Inefficient processes are
thrown out and entire new systems are introduced. Importantly reengineering typically
redefines jobs and requires most employees to undergo training to learn new skills.
HRM must prepare individuals for the change. This requires clear and extensive
communication of why the change will occur, what is expected, and its effects on
employees. Improvement effort may change work patterns, operations, and even
reporting relationships. HRM must be ready to help affected employees overcome
barriers that may result in resistance to change. Looking for better ways of working often
results in new ways of doing things. Consequently, HRM must be prepared to train
employees in these new processes and help them attain new skills levels that may be
associated with the “new, improved” operations.
Employee Involvement
Quality management and process reengineering require extensive employee involvement.
There is an increasing trend in some organizations (for example, Marriotto, W.L.Gore
and National Westminster Bank) to empower employees. They are putting employee in
charge of what they do. And in so doing, mangers have to learn how to give up control,
and employees have to learn how to take responsibility for their work and make
appropriate decisions. Empowerment is changing leadership styles, power relationships,
the way work is designed, and the way organizations are structured. Additionally,
employees need training, and that’s where human resource management can make a
valuable contribution.
Improving Ethical Behavior
Ethics commonly refer to a set of rules or principles that define right and wrong conduct.
Members of organizations are increasingly finding themselves facing ethical dilemmas,
situations in which they are required to define right and wrong conduct. For example,
should they ‘blow the whistle’ if they uncover illegal activities taking place in their
company? Should they follow orders with which they don’t personally agree? Do they
give an inflated performance evaluation to an employee whom they like? Do they allow
themselves to play politics in the organization if it helps their career advancement?
Today’s manger needs to create an ethically healthy climate for his or her employees,
where they can do their work productively and confront a minimal degree to ambiguity
regarding what constitutes right and wrong behaviors.

LO 1-1 Define human resource management, and explain how HRM contributes to an
organization’s performance.
• Human resource management consists of an organization’s policies, practices, and
systems that influence employees’ behavior, attitudes, and performance.
• HRM influences who works for an organization and how.
• Well-managed human resources can be a source of sustainable competitive advantage
by contributing to quality, profits, and customer satisfaction.
• Engage in employee relations—for example, communications and collective bargaining.
• Establish and administer personnel policies and keep records.
• Help ensure compliance with labor laws.
• Support the development and execution of corporate strategy

LO 1-2 Identify the responsibilities of human resource departments.

• Analyze and design jobs. • Recruit and select employees.
• Equip employees by training and developing them.
• Through performance management, ensure that employees’ activities and outputs match
the organization’s goals.
• Plan and administer pay and employee benefits Recommend pay increases.
• Represent the company to their employees.

LO 1-3 Summarize the types of skills needed for human resource management. •
Communication, negotiation, and team development skills.
• Decision-making skills based on HR knowledge and company business.
• Leadership skills for managing conflict and change.
• Technical skills including knowledge of current techniques, applicable laws, and
computer systems.
LO 1-4 Explain the role of supervisors in human resource management. • Help analyze
work. • Interview job candidates and participate in selection decisions. • Provide
employee training. • Conduct performance appraisals.

LO 1-5 Discuss ethical issues in human resource management. • Should make decisions
that result in the greatest good for the largest number of people. • Should respect basic
rights of privacy, due process, consent, and free speech. • Should treat others equitably
and fairly. • Should recognize ethical issues that arise in areas such as employee privacy,
protection of employee safety, and fairness in employment practices.

1. Discuss how cultural environments affect HRM practices. Globalization is creating a

situation where HRM must search for mobile and skilled employees who can
succeed at their jobs in a foreign country. These employees must, therefore, understand
the host country’s language, culture, and customs.
2. Describe how technology is changing HRM. Technology is having a major impact
on HRM. It’s giving all employees instant access to information and changing the
skill requirements of employees. Technological changes have required HRM to
address or change its practices when it deals with such activities as recruiting and
selecting employees, motivating and paying individuals, training and developing
employees, and handling legal and ethical matters.
3. Identify significant changes in workforce composition. The workforce composition has
changed considerably over the past thirty-five years. Once characterized
as having a dominant number of white males, the workforce of the new millennium
is comprised of a mixture of ethnic backgrounds, religious affiliations, citizenship
statuses, global locations, physical abilities, sexual orientations, and gender.
4. Describe the HRM implications of a labor shortage. It is estimated that there will
be a shortage of skilled labor in the United States over the next ten years. The primary
reasons for this shortage are birthrates and labor participation rates of different
generations, and the increasing demand for skilled labor. For HRM, the labor shortage
means that human resource managers will need sophisticated recruitment and
retention strategies, and must have a better understanding of human behavior.

5. Describe how changing skill requirements affect HRM. Changing skill requirements
means HRM has to provide extensive employee training. This training can be
in the form of remedial help for those who have skill deficiencies or specialized training
dealing with technology changes.
6. Explain why organizational members focus on quality and continuous
improvements. Organizational members focus on quality and continuous improvements
for these reasons: Today’s educated consumers demand it, and quality
improvements have become strategic initiatives in the organization. HRM is instrumental
in quality initiatives by preparing employees to deal with the change and
training them in new techniques.
7. Describe work process engineering and its implications for HRM. Continuous
incremental improvements focus on enhancing the quality of a current work process.
Work process engineering focuses on major or radical change in the organization.
8. Identify who makes up the contingent workforce and its HRM implications.
The contingent workforce includes part-time, temporary, consultant, and contract
workers who provide as-needed services to organizations. The HRM implications of
a contingent workforce include attracting and retaining skilled contingent workers,
adjusting to their special needs, and managing any conflict that may arise between
core and contingent workers.
9. Define employee involvement and list its critical components. Employee involvement
can be best defined as giving each worker more control over his or her job. To do this
requires delegation, participative management, developing work teams, goal setting,
and employee training. If handled properly, involving employees should lead to
developing more productive employees who are more loyal and committed to the
organization.
10. Explain the importance of ethics in an organization. Ethics refers to rules or principles
that define right or wrong conduct. Due to the recent ethical lapses of several
organizations, ethics has become a focal point of proper organizational citizenship.