CHAPTER 1

DEFINITION AND SCOPE OF

HUMAN RESOURCE MANAGEMENT
Learning Outcomes:
After reading the chapter, the students should be able to:

1. Define Human Resource Management, its nature and scope.

2. Synthesize historical milestones in Human Resource Management
development.
3. Describe the importance of studying human resource management.
4. Identify the different features of human resource management;
and
5. Compare and contrast the differences between personnel
management, human resource management, and human resource
development.
6. The Challenges of Managing Human Resources Today.

INTRODUCTION
Human resource management or HRM is the organizational
function of managing and handling one of the most valuable assets of
the organization- its employees. It takes a various undertakings
performed by a business firm to make certain that workers are
handled and managed as human being worthy of respect and compassion
throughout their employment life. (i.e., from entry to separation).
HRM is composed of Human Resource (HR) Practices that aid the
firm in leading its people successfully and reasonably throughout
their journey during the three stages of the employment cycle: the
pre-hiring, hiring and post-hiring.
In the pre-hiring stage, organizations determine the right
number and type of people needed to fill up positions in the
organization along with their required qualifications. It includes
activities performed prior to hiring, such as human resource
planning and job the staffing needs of the company, eventually
leading to recruiting and selecting. In the post-hiring stage,
companies carry out certain HRM practices and other productivity
programs that enhance employees ’performance level, such as training

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and development, performance appraisal, compensation and benefits
administration, employee health and safety, and separation.
Frederick Taylor introduced people management through his book
The Shop Management, which featured the proper selection and
training of employees in a scientific way. Later, he pioneered the
study of scientific management and eventually became known as the
father of scientific management. His work played a very important
role in the advancement of the people function in the early 1900s.
He also addressed critical issues on incentives that encouraged the
compensation of workers for meeting and/or surpassing performance
criteria. These events laid the foundation for later HRM
development. Table 1 on the next page identifies the significant
breakthroughs in HRM development.
Table 1. HRM Historical Breakthroughs
Year Events
1890 - 1910 Frederick Taylor introduced a management approach known as
scientific management that focuses on the idea of
scientific selection of employees based on their
capabilities. This system provides that workers will be
paid additional compensation when they exceed the standard
level of output for a given job, with the aim of
motivating them.
1910 - 1930 Most companies started to develop departmental units
focused on maintaining the well-being of employees. The
field of industrial psychology, together with the
beginning of World War I, led to the development of
employment tests and selection techniques.
1930 - 1945 During this period, the Hawthorne Studies started to have
a tremendous effect on management studies and principles
such that much attention was given to personal and social
interactions in the workplace that affect and influence
worker productivity and level of performance.
1945 - 1965 This period marked the birth of union membership that gave
considerable importance to employee-employer
relationships. It was also during this period that pay,
and benefits programs slid in a very notable value as
organized unions bargained for paid work leaves, health
and welfare coverage.
1965 - 1985 The Civil Rights Act of 1964 reached its highest point
when it prohibited discriminatory practices based on an
individual’s age, sex, color, religious affiliation, race,
and physical or mental disabilities. Employers were
advised to adhere to equal employment opportunity
provisions and take affirmative steps to avoid workplace
discrimination.
1985 - Diverse labor force, globalization, and strategic HRM

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present functions were three pressing concerns during this period.
Employers, primary aim is to effectively cope with the
intense demands and effects of change, competition, and
job efficiency.

As Taylor was starting with his concepts about scientific

management, other proponents were also employing related principles
of psychology in recruiting, selecting, training, and developing
workers. The growth of the field of industrial psychology and its
utilization in the workplace came to realization during the World
War I as preliminary technical and job-related tests were used to
appoint military hires to the right tasks.
The Hawthorne studies were a series of studies done between
1920’s and 1930. This period sparked an increase in the importance
of the social and psychological relationships in the workplace.
Evaluations of the studies led researchers to believe to believe
that “human relations” greatly influence worker’s level of
satisfaction and productivity.
IMPORTANCE OF STUDYING HUMAN RESOURCE MANAGEMENT

Human Resource Management embraces a wide range of basic

business ideas that include recruitment, selection, training and
development, performance appraisal, compensation, safety and health,
and other productivity improvement programs. It is important even to
non- HR personnel such as employees, supervisors, and leaders.
Entrepreneurs
The qualities that mark an entrepreneur are numerous.
Motivation and persistence are among them. However, just as being an
entrepreneur has its rewards, it also has its own drawbacks.
Entrepreneurs must meet a lot of challenges in handling and managing
their workers, especially in training, designing a compensation
structure, or building a friendly company culture. Thus, the study
of human resource management will give these enterprising
individuals useful insights and a thorough understanding of the
employment cycle, and a broader idea about various human resource
practices to meet present and future challenges head on.
Employees
It is important to know that people will always be one of the
company’s valuable assets. Hence, it is essential for employees to
understand HR management so they may gain a better understanding of
their rights and privileges as thinking, feeling, and doing an
individual in an organization.

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 Supervisors and Leaders
Human resource management involves designing various
productivity improvement programs that could provide learning and
enhancement in the quality of life and level of performance of
employees. Hence, a good boss should always bear in mind that every
HR decision they make and policies they formulate should be anchored
to what the job requires and not on certain biases. Thus, studying
HR management can provide supervisors and leaders a competitive
edge, especially in the aspect of recruitment.

BEST FEATURES OF HUMAN RESOURCE MANAGEMENT

Human resource management is a continuing process of managing people
and their activities at work while squeezing out the best potential
from them, so they become productive individuals. It has the
following features:

1. It is prevalent in nature. This means that HRM is present and

performed in all operational and functional areas of management
within an organization on a continuous basis. In other words,
it is not an “on-off” function that is performed only when
needed.

2. It is dynamic. HRM moves! HRM acts! It does not depend on

written rules and policies to solve problems; rather, it
focuses on what can be done through logical and well-grounded
solutions and decisions. It constantly finds ways to change
situations and events for the betterment of the organization
and its employees.

3. It is individually oriented. In HRM, each employee is

considered a human being that is worthy of respect and
compassion. In this sense, HRM works toward getting the best
out of each employee by seeing to it that they are continually
offered the opportunity to be equipped with new skills through
training, development, and other productivity improvement
schemes. In effect, both intrinsic and extrinsic motivation
increased.

4. It is employee oriented. Employees are the doing individuals of

an organization. Rewarding them for their contributions to
organizational success. Is a strong reinforcement to increase
the level of job performances. A firm’s HRM strategy that

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 empowers employees makes them feel appreciated for the job they
do.
5. It is forward - looking. For an organization’s HRM function to
be successful, it should effectively envision and assess labor
needs for a given period of time. Doing so will assure the
managers that only the competent, motivated people with right
match of qualifications are joining the company.
6. It is growth - oriented. For an organization’s HRM process is
to yield success, it should constantly enhance the conceptual
and analytical skills of its employees. A carefully planned
design for employee development is almost compulsory if the
organization aims for excellence. Job rotation is one way for
employees to learn various skills. Table 2 describes the
differences between Human Resource Management and Personnel
Management.

Table 2.
Differences Between Personnel Management and Human Resource
Management
PERSONNEL MANAGEMENT (PM) HUMAN RESOURCE MANAGEMENT (HRM)

Personnel refers to the people HRM is the effective supervision and

manning the organization. Managing
them is referred to as personnel
management.
PM is conventional and concentrates
on supervisory administration of
people.
management of employees’ capabilities
and other attributes
HRM is a non-stop function directed at
developing the knowledge and skills of
employees.

PM is a separate purpose with HRM is an indispensable part of the

separate sub-function entire organization

PM is seen as a supplementary HRM anticipates and effectively

activity handles adverse situations even before
they arise.
PM reacts to adverse situations as HRM sees the organization as one that
they arise embodies a dynamic personality
PM takes complete authority in HRM sees to it that both personal and
people management. professional needs of employees are
addressed correctly to achieve
worklife balance.
PM has a limited range as it only Motivational activities and
focuses on administration of people teambuilding activities are top

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 priorities for HRM
PM is particularly involved with In HRM, a fulfilling job is the
recruitment, selection, and antecedent and job satisfaction is the
administration of the workforce outcome
Primary stimuli in PM are monetary In HRM, there is a great relationship
and non-monetary rewards between productivity and satisfaction
and employees’ social well-being

In PM, a high level of contentment HRM considers people as valuable

means better performance assets

PM regards employees as tools for HRM regards employees as excellent

the organization to make more contributors to the organization’s
profit wellness, and thus acknowledges their
contributions through growth and
advancement opportunities
PM treats employees as commodities HRM sees to it there is a constant
that can be bought in exchange for healthy relationship between the
money organization and its employees, which
extends to the family members of the
employees.
PM treats people as an expense, Encouraging all forms of
thus, employers have the power to communications is the driving force in
manage the cost HRM

DIFFERENCES BETWEEN HUMAN RESOURCE MANAGEMENT (HRM) AND HUMAN

RESOURCE DEVELOPMENT (HRD)

HUMAN RESOURCE MANAGEMENT HUMAN RESOURCE DEVELOPMENT

1. HRM focuses on enhancement of 1. HRD is concerned with enhancing
employees, potential from a the capabilities of employees
long-term perspective. that will result in positive
2. HRM gives attention to the behavior change.
effective utilization of 2. HRD sees to it that there is
employees and their continuing opportunities for
capabilities. growth and development.
3. HRM take decisions on HRD 3. HRD depends on the decisions of
plans. HRM.
4. HRM at its center has HRD. 4. The goal of HRD is anchored to
5. HRM attends to every employee that HRM, which boils down the
demand resulting in increased benefit of the workers.
satisfaction and productivity. 5. HRD promotes upscaling of skills
and knowledge resulting in
outstanding performance.

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THE CHALLENGE OF MANAGING HUMAN RESOURCES TODAY

1. Changing Employee Expectations

The values of today’s employees are somewhat different from
the values of a generation ago. One must recognize that
today’s workforce comprise of several generations, each with
different set of values, aspirations, and each with a unique
perspective and attitude towards work.

Generations have been classified into four categories:

a. The Silent Generation, people who were born before 1946;

b. The Baby Boomers, people born between 1946 and 1959;
c. The Generation X, people born between 1960 and 1979; and
d. The Generation Y, people born between 1980 and 2008.
SILENT GENERATION. This generation is the so-called veterans
who entered the workforce in the 1950s and early 1960s.
Perhaps, the plausible explanation is, since they are old,
they have since long retired and unheard from. They are known
to be loyal to the organization.
BABY BOOMERS. Who were born after the second world war when
the economy was booming are the people who never experienced
the hardships of the war days. Aggressive and ambitious. They
were known to be loyal to their careers.
THE GENRATION X. Who were born between 1960 and 1979 before
the advent of the Information Age, are concerned about
work/life issues.
THE GENERATION Y. Referred to as Nexters. This crop of
twentieth something was known for talking back to their
bosses, they are ambitious, demanding and questions
everything. When it comes to loyalty, the companies they work
for are last on their list – behind their families, friends,
communities, co-workers, and of course themselves.
Nexters place a high value on their financial success. Human
resource policies must address compensation and reward
packages to meet their needs. Some jobs may be redesigned to
reduce monotony.

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2. Rapidly Changing Technology
The advent of computer has fundamentally changed jobs.
Automation has eliminated huge numbers of jobs in
manufacturing, finance, sales and marketing, administration
and human resources. Technology has lead to shorter cycle
times in manufacturing. It has made customers more demanding.

For once, companies must invest millions of money in training

and development to update their employees’ skills to keep pace
with changing technology. Organizations must hire more skilled
workforce and redesign jobs to take advantage of this new
technology.

3. Emphasis on Increased Productivity. The shrinking global

village has liberalized tariffs in almost all parts of the
world. Alternative goods are available in the world market at
lower prices. This global competitiveness has spurred
organizations to take care of their labor costs by increasing
productivity, eliminating redundant jobs.
Increased productivity or outputs must be accomplished with
fewer inputs including people. The need to increase
productivity must be balanced by the need to contain cost and
improve quality. In other words, each organization wants its
human resources to increase productivity without increasing
costs and sacrificing quality.
Increased competition has prompted managers to focus more on
competencies of their employees. Competencies are the
underlying attributes or characteristics that assures superior
performance. This include tangible skills and knowledge, and
intangible aspects required of the such as attitude, values,
and interactive abilities of the job holder. These
competencies now become the focus of management not only in
terms of recruitment, compensation, training and development.

4. New Modality of Employment – Outsourcing

Most business organizations today, wherever possible, prefer
to adopt flexibility in the acquisition of human resources.
The irony of this phenomenon, regardless of the legal and
moral issues, our country, the Philippines is the beneficiary
of outsourcing through the (BPO) Business Process Outsourcing
by local and foreign companies to avoid the high labor costs
in the US, Canada and other developed countries.

Outsourcing has changed the human resource dimension in many

organizations.

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 5. Flatten Organizations
The days of multiple hierarchical levels are gone. Delayering
in business organizations is the name of the game. Flattening
of the organizations improves productivity, efficiency and
communications.

In a flatten organization, people are expected to produce more

using fewer resources. Multitasking is required as they are
asked to perform a variety of ever-changing roles, taking new
responsibilities, and significantly changing the job contents
of the incumbents.

The layoffs as a result of a flattening of organizations have

affected both management and rank and file employees. No one
is spared from the corporate cuts.

6. Fall of the Command-and-Control Manager

Barking orders to subordinates is no longer an effective way
of getting things done by people. The workforce is getting
more educated, better informed, and aware of their rights.

Under the people empowerment philosophy, supervisors and

managers must act like coaches. Employees can make their own
informed decisions, using good judgment, under the guidance of
their superiors. The legitimate or literal power inherent in
superiors is somewhat diminished.
CHAPTER SUMMARY

1. Human resource management is the organizational function of

handling and managing one of the most valuable assets of the
organization: its employees. It tackles various undertakings
performed by a business firm to make certain that workers are
handled and managed as human beings worthy of respect and
compassion throughout their employment life-that is, from entry
to separation.

2. Human resource management is composed of various HR practices

that aid the firm in successfully and reasonably leading its
people in their journey during the three stages of the
employment cycle: the pre-hiring stages, the hiring stage, and
the post-hiring stage.

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 3. Human resource management encompasses a wide range of basic
business ideas that includes recruitment, selection, training,
and other productivity improvement programs.

4. Frederick Taylor pioneered the study of scientific management

and eventually became known as the father of scientific
management. He also introduced management through his book The
Shop Management, which featured the proper selection and
training of personnel in a “scientific” way.
5. Human resource management encompasses a wide range of business
ideas that includes recruitment, selection, training and
development, appraisal of performance, compensation, and other
productivity improvement programs. It is equally important
even to non-HR personnel like the entrepreneurs, employees,
supervisors, and leaders.

6. Among the best features of human resource management are as

follows: it is prevalent in nature, it is dynamic, it is
individually oriented, it is employee-oriented, it is
forwardlooking, and it is growth oriented.

7. Personnel refers to the people manning the organization and

managing these people is referred to as personnel management.
Human resource management is a non-stop function directed at
developing the potentials of employees.
8. Human resource management make decisions about human resource
development (HRD) plans, while HRD depends on the decision of
HRM.

STUDY AND DISCUSSION QUESTIONS

1. Define human resource management and describe the three stages

of the employment cycle and the corresponding HR practices.
2. Discuss why managers should consider the rule of-job
relatedness in employment.
3. What do you think is the most significant role that human
resource managers play? Support your answer.
4. Why is the study of human resource management important even to
non-HR people? Discuss comprehensively.
5. Distinguish the differences between HRM, PM, and HRD.
APPLICATION EXERCISE

1. Interview a human resource manager at a local company and ask

about their best human resource management practices. Share
your output to the class.
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 2. Interview an entrepreneur and ask his opinion about the
importance of studying and understanding Human Resource
Management to the success of his or her business. Document the
entrepreneur’s responses and share your finding to the class.

References:

Human Resource Management, Principles and Practices, Lauron, Doris,

P., First Edition, Copyright 2019, Rex Bookstore, Inc.,
Human Resource Management, (From Practitioner’s Point of View),
Payos, Ranulfo, P., Reprinted 2014, Copyright 2010, Rex
Bookstore.

Human Resource Management, Open Textbooks for Hongkong, Open

University of Hongkong

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