TOPIC 2: FACTORS AFFECTING HUMAN

RESOURCE MANAGEMENT OF BUSINESS

ORGANIZATIONS
“Human resource policies and practices once associated only with progressive management
philosophies now look desirable from a technological perspective as well as advanced
manufacturing technology (AMT) makes human skills and workers’ commitment more
important than ever.”
Richard E. Walton and Gerard I. Susman

Internal Factors:
1. Organization Goals/Objectives, Mission, Vision, Philosophy, Creed, Culture
2. Policies
3. Organizational Climate
a. Working Conditions
b. Communication
c. Motivation
d. Leadership

External Factors:
1. Government perspectives
a. Economic
b. Political-Legal
c. Cultural
2. Technology
3. Competition
4. Stockholders/Owners
5. Customers
6. Labor Union

INTERNAL FACTORS THAT AFFECTS HUMAN RESOURCE MANAGEMENT

Organizational Goals (Objectives)

- The end results of that which motivates people in the organizations to work or
strive to achieve.

Vision (Vision Statement, Value-statement)

- The forecast or prediction of the future.

Mission (Mission Statement)

- The reason or purpose of existence.

Policies
- A general statement used as a guide for people in the organization as they perform
their jobs.
- The guidelines for any decisions and actions committed by the organizations.

Organizational Climate
- The psychological environment existing within the organization that affects all
 human activities. (working conditions, communication, motivation, and leadership)

Working Conditions
- Refer to the physical, social, technological, political, and economic conditions
prevailing in an organization.

Types of Working Conditions

1. Physical working conditions – include factors such as lighting, temperature, humidity,

noise, dust, radiation and other health and safety hazards; and nature of work: hours of
work, skills required, mental and physical effort exerted.

2. Social working conditions – the result of interests, abilities, aptitude, skills training, and
experiences that employees with their varied backgrounds bring to an organization.
(social capital)

3. Technological working conditions – include the tools, equipment, machineries

available in performing the work, the production processes involved at work, and the
plant layout of the workplace or organization.

4. Political working conditions – involve the art of compromise that is essential in the
organizations in which employees may be required to “play politics” to achieve personal
goals. (Play Politics play an important role in an organization in which employees are
competing with one another in order to get ahead or gain cooperation to perform their
duties in the organization successfully.)

5. Economic working conditions – refer to the salaries or wages and benefits that an
organization will make available to the employees.

COMMUNICATION
- The process of transferring information from one person or group to another.
- It is considered the center of all human existence
- The basic component with the relationship to others.
- The lifeblood of any organization.

Functions of Communication
1. To control
2. Fosters motivation
3. Serves as an avenue for Expression
4. Provides Information
Communication Process

● Sender/Source/Encoder - The one who encodes or initiates the message.

● Channel - The medium of transferring information.
● Message - The actual physical product from the source’s encoding to the receiver’s
decoding.
● Receiver - The one who listens and decodes the message.
● Feedback - The examination on how successfully the message has been delivered.

Types of Communication
(As to the number of people involve)

1. Intrapersonal Communication – involves only one or the same person.

2. Interpersonal Communication – involves two persons interacting with one another.
3. Group/Organizational Communication – composed a definite number of people.
4. Mass Communication - composed of an indefinite number of people.

Types of Intrapersonal Communication

1. Looking Glass Self (someone talking in front of the mirror)
2. Self-rationalization (daydreaming)
3. Conscience Examination

Types of Interpersonal Communication

1. Verbal Communication – chief means of communication is by the use of voice
ü Fast or quick response
x Easily distorted

2. Written Communication – in a form of writing such as letters, memos, mails, facts,

notices, announcements or reports
ü Not easily distorted
x Delayed response or no response at all

3. Non-verbal Communication – includes body movements, intonation, and facial

expression.

Types of Group Communication

1. Formal Network – formal small group network such as meeting, conference or
 appointment
2. Informal Network (“grapevine”) - informal small group network such as in a form
chika, gossip, or chismis
3. Computer-aided Communication
a. e-mail – use the internet to transfer information such as google, yahoo, ymail.
b. Intranet Link – a private organization wide information network or website in
which the internal members could have access.
c. Extranet Link – a private organization wide information network or website
in which the internal members as well as the external partners could have access.
d. Video conferencing – meeting and communicating with each other in real
time by the use of video.

Forms of Mass Communication

(TRIPS)
1. Television
2. Radio
3. Internet
4. Print-ads
5. Short message services (sms)

Types of Communication
(As to the level of source of the sender to the receiver)
1. Upward/Bottom-Up Communication – from lower level management to the top level
management.
2. Downward/Top-Down Communication – from top level management to the lower
level management.
3. Horizontal Communication – at the same level of the organization
4. Diagonal/Cross-Channel Communication – direction of information flows across the
channel.
5. Circular Communication – starts at any point of the organization.

Barriers of Communication
1. Noise
2. Loss of Connection
3. Distance
4. Distortion
5. Semantics
6. Lack of Levelling
7. Lack of Trust
8. Inaccessibility
9. Lack of Clear Responsibility
10. Personal Incompatibility
11. Refusal to Listen
12. Failure to use proper media
13. Communication Gap
14. Lack of Direction
MOTIVATION
- From the Latin word “movere” which means to move
- refers to any goal directed behavior of a person.
- A force or a push or a willingness to do something or to achieve the particular goal of an
 individual.

Motivational Technique
- Methods used by managers to stimulate employees to take goal directed actions.

Types of Motivation
1. Financial motivation
- includes all methods involving money that an employee may receive as a result of
his employment such as wage or salary, bonus, benefits, commissions, allowances.

2. Non-financial motivation
- includes all non-financial motives of individuals, groups or organization of
employees to take goal directed actions in order to satisfy certain human needs.

3. Positive motivation
- involves grants of rewards for a job well done to employees.

4. Negative motivation
- refers to any method of motivation taking the form of fear.

Early Theories of Motivation

1. Traditional theory of motivation
- Money is the prime motivator

2. Carrot and Stick theory

- Focus on the implementation of reward and punishment system

3. Hierarchy of Needs (Abraham Maslow)

- needs of the human being that needed to be satisfied

4. Theory X and Y (Douglas McGregor)

- assumption to workers that have negative attitude (X) and positive attitude (Y)

5. Motivation-Hygiene Theory (Frederick Herzberg, Bernard Mausner, Barbara Syndeman)

- Also known as Motivation-Maintenance Theory or Dual Factor theory
- States that there are intrinsic (motivation factor) and extrinsic (hygiene factor)
factors that can motivate a human being.

Contemporary Theories of Motivation

1. Goal-Setting theory
- Goal is the prime motivator

2. Theory of Needs (David McClelland)

- Also known as Achievement-Power-Affiliation Theory
- States that there are three (3) needs of a human being
a. Need for Achievement
- The need to achieve the goal
- The need to excel or to succeed
b. Need for Power
- The need to be strong and influential
- The need to behave the unbehaveable
 c. Need for Affiliation
- The need to be liked
- The need to have friendly relationship

3. Maturity theory (Chrys Argyrys)

- Assumes that there are two (2) types of worker which are the Mature worker and
Immature Worker.

4. Reinforcement theory (B.F. Skinner)

- States that workers should be given rewards for the good performance only
Three (3) Components
a. Stimulus (the environment or situation)
b. Response (behavior or action on a particular situation)
c. Reinforcement (rewards for the good performance only)

5. Equity theory/ Theory of Equilibrium

(Barnard-Simon)
- States that fair salary motivates workers.
- Equal pay for equal work.
Provision
Management (Inducement)
Employees (Contribution)

● Job enlargement - The process of adding jobs in horizontal loading with the purpose of
increasing the knowledge and skills of the worker.

● Job enrichment - The process of putting meaning in the job by adding jobs in vertical
loading.
 LEADERSHIP

WHAT IS LEADERSHIP?
Leadership is the process of inducing a subordinate to behave in a desired manner (Donnelly,
1981)
Leadership is the process of influencing activities of an organized group in efforts towards
goal setting and goal achievement. (Rachman, 1987)
Leadership is one form of dominance, in which the followers more or less willingly accept
direction and control by other person (Kuhn 1990)
Leadership the managerial activity that maximizes productivity, stimulates creative problem
solving and promotes morale and satisfaction (Robert Blake & Jane Mouton)
Leadership is the relationship in which one person influences others to work together
willingly on a related task to attain goals desired by the leader and/or group.
Leadership the process of influencing others to behave in preferred ways to accomplish
organizational objectives.

Power
- The ability to command or apply force.
- To get someone else to do something that you wanted to do or to be done.

Five (5) sources of Power (by French and Rowen)

Ø Position Power
1. Coercive Power - Based on fear, the subordinate does what is required to avoid
punishment or some other negative outcome.
2. Reward Power - Based on the ability of one individual to provide rewards, either
intrinsic or extrinsic for compliance with this individual wishes.
3. Legitimate Power - Based on an individual’s position in the organization, thus, when
joining an organizing, a person accepts the fact that the boss’s orders are to be carried
out.
Ø Personal Power
4. Expert Power - Based on the special skill, expertise or knowledge that a particular
individual possesses.
5. Referent Power - Exemplified by the charismatic individual who has unusual traits
that allow that person to control the situation.

THEORIES OF LEADERSHIP
1. “GREAT MAN” THEORIES
● Assume that the capacity for leadership is inherent – that great leaders are born, not
made. These theories often portray great leaders as heroic, mythic and destined to rise
to leadership when needed.
● The term "Great Man" was used because, at the time, leadership was thought of
primarily as a male quality, especially in terms of military leadership.

2. TRAITS THEORIES
● Similar in some ways to "Great Man" theories, trait theories assume that people inherit
certain qualities and traits that make them better suited to leadership.
● Trait theories often identify particular personality or behavioral characteristics shared
by leaders.
3. CONTINGENCY THEORIES
● Contingency theories of leadership focus on particular variables related to the
 environment that might determine which particular style of leadership is best suited
for the situation.
● According to this theory, no leadership style is best in all situations. Success depends
upon a number of variables, including the leadership style, qualities of the followers
and aspects of the situation.

4. SITUATIONAL THEORIES
● Situational theories propose that leaders choose the best course of action based upon
situational variables. Different styles of leadership may be more appropriate for
certain types of decision-making.

5. BEHAVIORAL THEORIES
● Behavioral theories of leadership are based upon the belief that great leaders are
made, not born. Rooted in behaviorism, this leadership theory focuses on the actions
of leaders not on mental qualities or internal states.
● According to this theory, people can learn to become leaders through teaching and
observation.

6. PARTICIPATIVE THEORIES
● Suggest that the ideal leadership style is one that takes the input of others into
account. These leaders encourage participation and contributions from group members
and help group members feel more relevant and committed to the decision-making
process.

7. MANAGEMENT THEORIES
● Management theories, also known as transactional theories, focus on the role of
supervision, organization and group performance. These theories base leadership on a
system of rewards and punishments.

8. RELATIONSHIP THEORIES
● Relationship theories, also known as transformational theories, focus upon the
connections formed between leaders and followers.
ü Transformational leaders motivate and inspire people by helping group members see the
importance and higher good of the task.

Leadership Styles
- Is the pattern of behavior and actions that leaders make over a period of time as
perceived by followers.
- It is how leaders behave, overtime, when they are trying to influence the performance of
others style is the visible aspect of leadership.
- It can be seen in the day –to- day interactions of leaders with followers. It is a
manifestation of a leader's assumptions, philosophies and attitudes.
 Types of Leadership styles
1. AUTOCRATIC LEADER
● Leaders rely primarily on their power and authority to get things done. They centralize
decision making on themselves so much so that members have little opportunity to
make contributions.
● Communication is orderly but it flows mainly from leaders to members.
● The leaders expect discipline, obedience and compliance from members.
● Threats and punishment are used to deter what is deemed by the teachers to be
understandable behavior.

2. DEMOCRATIC LEADER
● Leaders share power and authority with the members of the group. They decentralize
decision-making so members are able to participate. Members are consulted and
encouraged to express their positions & recommendations.

3. LAISSEZ-FAIRE (FREE – REIGN) LEADER

● Leaders use power sparingly, if at all. Responsibility rests largely on the group to set
its own goals and develop ways to achieve them.
● Participation of the leader in the affairs of the group is minimal.
● Leaders see their role as supplying information when asked so as to facilitate the
group's operation.
Hersey and Blanchard’s Situational Leadership Model
- Argues that successful leadership is achieved by selecting the right leadership style
which is contingent on the level of the followers’ readiness.
● Acceptance: leadership effectiveness depends on whether followers accept or reject a
leader.
● Readiness: the extent to which followers have the ability and willingness to accomplish a
specific task.

Four specific leadership styles

· S1: Telling Leader: high task-low relationship leadership
- Give specific tasks to the follower.
· S2: Selling Leader: high task-high relationship leadership
- Explain the direction in a very creative and persuasive way.
· S3: Participating Leader: low task-high relationship leadership
- Sharing of ideas and participative decisions from the followers.
· S4: Delegating Leader: low task-low relationship leadership
- Allow the members of the group to make their own decision.

Posits four stages follower Readiness:

· R1: followers are unable and unwilling
· R2: followers are unable but willing
· R3: followers are able but unwilling
· R4: followers are able and willing
 Path-Goal Leadership Model
- States that the leader’s job is to assist his or her followers in attaining their goals and to
provide direction or support to ensure their goals are compatible with organizational goals.

Different leadership styles

1. Directive leader
- Gives direction on what to do, how to do and the schedule for the different tasks.
- Clarify expectations and guidelines.
2. Supportive leader
- Trust workers equally by being friendly and approachable.
3. Participative leader
- Allow input on decisions.
- Participate or Consult the workers or subordinates in the decision making process.
4. Achievement oriented leader
- Set challenging goals.
- Expect the highest level performance of the workers.
- Emphasize continued excellent performance.

The Vroom–Jago–Yetton Leadership Model

- A situational model based on a continuum of five decision styles with differing degrees
of employee participation that enables leaders to analyze a situation and decide how much
participation needed for the particular problem encountered by the organization.

Three (3) kinds of Decision

1. Authority Decision (A) – decision by the leader
2. Consultative Decision (C) – decision made through consultation
3. Group Decision (G) – decision made by the full participation of the group members or
subordinates.

Robert Blake and Jane Mouton’s Managerial Grid

– The study sought to identify the behavioral characteristics of leaders related to
performance effectiveness are based on orientation that can be classified as Employee
oriented (more concern for people) or Production oriented (more concern with output).

Five (5) Types of Management

1. Team Management (9, 9)
- High concern for production, High concern for people
2. Country Club Management (1, 9)
- Low concern for production, High concern for people
3. Middle of the Road Management (5, 5)
- Moderate concern for production, Moderate concern for people
4. Task Management (9, 1)
- High concern for production, Low concern for people
5. Impoverished Management (1, 1)
- Low concern for production, Low concern for people

Tannebaum and Schmidt’s Leadership Continuum Model

Base on the levels of control and freedom, there are 7 different leadership approaches
on the Tannenbaum and Schmidt Leadership Continuum, starting from the far left end of
the spectrum to the far right end of the spectrum. The leadership approaches are the
following:

1. The Leader Tells. This approach is typified when a leader says: "The problem I face is.. I
want you to..." This is the autocratic style of leadership. While unfashionable today, it is often
needed when teams are new, inexperienced, or weak. As the team gain in cohesion and
commitment, it becomes less and less appropriate.

2. The Leader Sells. This approach is typified when a leader says: "The problem I face is.. I
want you to... because..." In the selling approach, it's still the leader in the driving seat but
there is the need to get others to understand why they are doing what he or she wants.

3. The Leader Tests. This approach is typified when a leader says: "The problem I face is.. I
want you to... What do you think...?" Notice now how the leader explains the problem, comes
up with an idea but checks it out with the team. If they're not ready for more responsibility,
they'll go along with what the boss wants; if they are ready, then he or she leaves the door
open for them to discuss their thoughts.

4. The Leader Consults. This approach is typified when a leader says: "The problem we face
is.. What ideas do you have for solving it...?" Notice now how the leader drops the word "I"
in exchange for the word "we". Notice also how he or she no longer feels the need to have an
answer ready. The leader is effectively inviting the team to problem-solve with him or her.

5. The Leader Joins. This approach is typified when a leader says: "What is the problem we
face? How can we solve it? Any ideas?" Now comes a turning-point. The leader no longer
owns the problem and solution alone. By asking the team to consider the problem as well as
the solution, he or she is nudging them into outright ownership themselves.
6. The Leader Delegates. This approach is typified when a leader says: "Problems keep
cropping up... Can you see what's going on, come up with some ideas and get back to me..."
Now the leader knows that there are problems in certain areas of the job but, in moving from
the word "we" to the word "you", gives the team the green light to find answers. The decision
may still be the leaders but the team can have a high level of influence over the final outcome.

7. The Leader Abdicates. This approach is typified when a leader says: "Sort out any
problems that crop up. I'm here if you need me but only if you really need me." Here the
language of the leader is coded. What he or she is really saying to the team is that they have
full responsibility for identifying, analyzing, and resolving the problem but accountability still
rests with the leader.

MANAGEMENT ROLES
(Henry Mintzberg)
❖ Interpersonal Roles
1. Figurehead: Manager represents the organizational unit in all matters of formality.
2. Liaison: Manager interacts with peers and other people outside the organizational
unit to gain information and favors.
3. Leader: Manager provides guidance and motivation to the work group, and also
defines the atmosphere in which the work group will work
❖ Informational Roles
1. Monitor: Manager serves as a receiver and collector of information.
2. Disseminator: Manager transmits special information within the organizational
unit.
3. Spokesperson: Manager disseminates the organization’s information into its
environment.
❖ Decisional Roles
1. Entrepreneur: Manager’s role is to initiate change.
2. Disturbance handler: Manager must assume when the organization is threatened.
3. Resource allocator: Manager decides where the organization will expand its
resources.
4. Negotiator: Manager assumes when the organization finds itself in major non-
routine negotiations with other organizations or individuals.

LIKERT’S LEADERSHIP STYLE

(Rensis Likert)

1. Exploitative Autocratic. Managers using this system make all the decisions. Subordinates'
failure to comply with a manager's order may lead to threats or punishments. Mutual trust and
confidence between manager and employees are low.

2. Benevolent Autocratic. Managers continue to make all the decisions.However, employees

enjoy some degree of freedom and flexibility on the job provided they follow rules and
procedures. Employees are careful when dealing with management and there is a low level of
mutual trust.

3. Consultative. Managers consult employees before goals are established and decisions
made regarding their jobs. Employees enjoy considerable freedom in decision making.
Rewards are emphasized by management. The level of trust and confidence between
management and the employees is fairly high. This level of confidence results in an
organizational climate that makes the employees fcel relatively free to discuss their problems
with management.

4. Group Participative. Emphasis is on group participative role with fuil

involvement to arrive at a conclusion. Subordinates are free to discuss with their leader and
the leader assumes a supportive role, not a condescending or threatening behavior.

MANAGEMENT FILIPINO STYLES (Management A’la Pinoy)

(Ernest A. Franco)
1. Manager “By Kayod”
➢ Kayod is a Filipino word that means to give oneself to hard work. The manager is
action-hungry and committed, and his manners are rather serious and introverted. A
formal and serious worker would not give in the bribery or any anomalous deals.

2. Manager “By Lusot”

➢ Lusot means availing loopholes. The manager will always find loopholes to avoid
hard work or utilize an excuse to failure. Given to shortcuts and unconventional or
even illegal means to attain objectives. Deals with people informally.

3. Manager “By Libro”

➢ Libro is a Spanish word for “book”. The manager literally goes by the book.
Scientific, thorough and analytical, and has adequately formal training in
management.

4. Manager “By Oido”

➢ Oido comes from Spanish word oir which means “to listen”. The manager acquires
his managerial skills by playing it by ear. Depends on practical experience to
compensate for his lack of normal management education.

5. Manager “By Ugnayan”

➢ The combination of the above mentioned types of management style.
➢ The “Oido” and “Libro” managers are content-oriented, and mostly become the
planners and thinkers of the organization.
➢ The “Kayod” and “Lusot” managers are process-oriented, and mostly become the
implementers and doers of the organization.
 EXTERNAL FACTORS THAT AFFECTS HUMAN RESOURCE MANAGEMENT

Government

Government is the system or group of people governing an organized community.

Government consists of legislature, executive, and judiciary. Government is a means by
which organizational policies are enforced, as well as a mechanism for determining policy.
Each government has a kind of constitution, a statement of its governing principles and
philosophy. Typically the philosophy chosen is some balance between the principle of
individual freedom and the idea of absolute state authority.

Technology

Technology is one of the major drivers of change. Nothing is constant as change. In

order to survive in this fast changing world of business, organizations must keep pace with
changes in technology. Technological changes brought about by inventions and new
manufacturing techniques have tremendous impact on human resource management.
Personnel programs, plans, policies, procedures and practices should not be contrary
to governmental goals and objectives as well as the customs, traditions and culture of its
human resource.

Competition

The ability of an organization to survive competition to a large degree depends on

how it is able to maintain qualified personnel. Wages and salaries of employees of the
organization must be competitive with or better than those paid by others in the same industry
or region,
The management of an organization has no recourse but to provide a working
environment that will motivate their employees to continue working for the company. This
means the establishment of a personnel program and policies that give employees the
opportunity to grow within the organization and as weli enable the employees to satisfy their
wants and needs.
The IMD (in independent not-for-profit foundation in Switzerland) has come out with
the following ten golden rules of global competitiveness:
1. Create a stable and predictable legislative environment.
2. Work on a flexible and resilient economic structure.
3. Invest in traditional and technological infrastructure.
4. Promote private savings and domestic investment.
5. Develop aggressiveness on the international markets (exports) as well as
attractiveness for foreign direct investment.
6. Focus on quality specifications and transparency in government and administration.
7. Maintain a relationship between wage levels, productivity and taxation.
8. Preserve the social falric by reducing wage disparity and strengthening the middle
class.
9. Invest heavily in education, especially at the secondary level, and in the life long
training of the labor force.
10. Balance of the economies of proximity and globality to ensure substantial wealth
creation while preserving the value systems that citizens desire.
Stockholders/Owners
 Stockholders or owners of the business organization primarily are concerned with the
rate of return on their investment. Some may challenge among others personnel programs and
policies beneficial to the improvement of employee morale and productivity if this would
mean a reduction in the financial returns for stockholders. Personnel managers as well as the
President/CEO must be prepared to justify why employee benefits have to be improved even
if it would mean added operational cost.

Customers

The users of the products and/or services of an organization is part of the external
environment of a company. Customers are more and more demanding for better service or
higher quality products. The workforce of an organization must be capable of providing these
services or products or the organization will be losing its customers who feel they are not
getting the kind of service or product in exchange for their money.

Labor Union

When a labor union or labor organization is present within an organization, the

Human Resource Manager has to deal with labor leaders who are knowledgeable in the field
of labor-management relations. The strength of the labor union will depend on how the
representatives of the management of an organization look upon the employees, their labor
icaders, the management styles, and the leadership skills of managerial employees of a given
organization.