BAHR 211 | HUMAN RESOURCE MANAGEMENT

MS. PRINCESS G. COLE, MBA

Lesson 1 | Introduction to Human Resource Management

What is Human Resource?

Human resource means the collection of people and their characteristics at work. These are
distinct and unique to an organization in several ways.

Human Resource refers to “a whole consisting of inter-related, inter-dependent and interacting

psychological, sociological & ethical components”.

What is Human Resource Management?

1. Human Resource Management is “the planning, organizing, directing and controlling of

the procurement, development, compensation, integration, maintenance and
separation of human resources to the end that individual, organizational, and social
objectives are accomplished.”

2. Human resource management is concerned with policies and practices that ensure the
best use of the human resources for fulfilling the organizational and individual goals.

Characteristics of HRM

• People oriented • Continuous Function

• Action- oriented • Future- oriented
• Individual- oriented • Challenging function
• Development – oriented • Science as well as art
• Pervasive Function • Staff function

Scope of HRM

1. Personnel or Labor Aspect

Planning, recruiting, selection, placement, transfer, promotion, training and development,
Lay-offs, retrenchment, remuneration, incentives and productivity

2. Welfare Aspect
Housing, transport, medical assistance, canteen, rest rooms, health and safety, education,
etc.

3. Industrial Relation Aspect

Union-management relations, collective bargaining, grievance and disciplinary actions,
settlement of disputes.

Functions of Human Resource Management

Two important functions of HR Management are management functions and operative functions.
Hence, Human resource management is considered a vital function in business because they are
responsible for promoting and developing work productiveness and enhancing the people's
career growth to meet the organization's targeted goals.

Human Resources Management

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 Management Functions: Operative Functions:

1. Planning 1. Procurement
2. Organizing 2. Development
3. Directing 3. Compensation
4. Controlling 4. Integration and
maintenance
5. Separation

Management Functions

Management function is a universal application in utilizing the management process in business;

these are planning, organizing, staffing, and controlling in achieving the stated organizational
goals.

1. Planning – It is the basic function of management. It deals with chalking out a future course
of action & deciding in advance the most appropriate course of actions for achievement
of pre-determined goals. Planning is deciding in advance - what to do, when to do & how
to do. It bridges the gap from where we are & where we want to be”. A plan is a future
course of actions. It is an exercise in problem solving & decision making.

2. Organizing – It is the process of bringing together physical, financial and human resources
and developing productive relationship amongst them for achievement of organizational
goals.

According to Henry Fayol, “To organize a business is to provide it with everything useful or
its functioning i.e. raw material, tools, capital and personnel’s”. To organize a business
involves determining & providing human and non-human resources to the organizational
structure. Organizing as a process involves:

▪ Identification of activities.
▪ Classification of grouping of activities.
▪ Assignment of duties.
▪ Delegation of authority and creation of responsibility.
▪ Coordinating authority and responsibility relationships.

3. Staffing - It is the function of manning the organization structure and keeping it manned.
Staffing has assumed greater importance in the recent years due to advancement of
technology, increase in size of business, complexity of human behavior etc. The main
purpose of staffing is to put right person on right job. According to Kootz & O’Donell,
“Managerial function of staffing involves manning the organization structure through
proper and effective selection, appraisal and development of personnel to fill the roles
designed un the structure”.

4. Directing – It is considered as the heart of the management process because planning,

organizing, staffing, and controlling will not function well without directing. It is that part of
managerial function which actuates the organizational methods to work efficiently for
achievement of organizational purposes. It is considered life-spark of the enterprise which
sets it in motion the action of people because planning, organizing and staffing are the
mere preparations for doing the work.

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 • Direction is that inter-personnel aspect of management which deals directly with
influencing, guiding, supervising, motivating sub-ordinate for the achievement of
organizational goals. Direction has following elements:

• Supervision implies overseeing the work of subordinates by their superiors. It is the

act of watching & directing work & workers.

• Motivation means inspiring, stimulating or encouraging the sub-ordinates with zeal

to work. Positive, negative, monetary, non-monetary incentives may be used for
this purpose.

• Leadership may be defined as a process by which manager guides and influences

the work of subordinates in desired direction.

• Communications is the process of passing information, experience, opinion etc.

from one person to another. It is a bridge of understanding.

5. Controlling – It implies measurement of accomplishment against the standards and

correction of deviation if any to ensure achievement of organizational goals. The purpose
of controlling is to ensure that everything occurs in conformities with the standards. An
efficient system of control helps to predict deviations before they actually occur.

Controlling is the process of checking whether or not proper progress is being made
towards the objectives and goals and acting, if necessary, to correct any deviation. (Theo
Haimann)

Controlling is the measurement & correction of performance activities of subordinates in

order to make sure that the enterprise objectives and plans desired to obtain them as
being accomplished” (Koontz & O’Donell)
Therefore, controlling has following steps:

a) Establishment of standard performance.

b) Measurement of actual performance.
c) Comparison of actual performance with the standards and finding out deviation if
any.
d) Corrective action.

Operative Functions

These concerns about a specific task were performed by the HR people in the Human Resource
Department to properly implement its functions; these are employment, development,
compensation, integration, and maintenance of personnel of the organization.

1. Procurement – HR people usually make a strategy to sustain the company's need to

procure the workforce through recruitment, selection, and placement.

2. Development – It is one of HR's main tasks to produce high caliber manpower through
orientation and training, performance appraisal, and evaluation.

3. Compensation – This is a task of HR that must be abided in the mandated law on salary,
Fringe Benefits, and employment conditions.

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 4. Integration and Maintenance – It combines all-important maintenance functions to ensure
the stability of the company; these are leadership, motivation and communication;
employee discipline; labor relation; and health and safety.

5. Separation – Refers to administer the employment cycle through the implementation of a

formal process, both voluntary and involuntary movement of the employees.

Objectives of HRM

1. To act as a liaison between the top management and the employees.

2. To arrange and maintain adequate manpower inventory
3. To devise employee benefit schemes
4. To ensure and enhance the quality of work life
5. To help keep up ethical values and behavior amongst employees both within and outside
the organization.
6. To maintain high morale and good human relations within the organization.
7. To support the top management in the implementation of plans and attaining
organizational goals.
8. To produce highly competent manpower towards professional and personal
development.
9. To strengthen the employer's and employee's relationship.
10. To aid the top management's needs in formulating and implementing policies, strategies,
and programs that gear to transparency, stability, and equality.

Significance of HRM

1. Significance for an enterprise

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 ▪ Attracting and retaining the required human resource, recruitment and selection,
placement, orientation, compensation and promotion policies.
▪ Developing the skills and necessary attitude among the employees by Training and
Development and performance evaluation
▪ Providing them social and job security by grievance handling, motivating and
participation in management
▪ Utilizing effectively the available human resources
▪ Ensuring that the enterprise will have in future a team of competent and dedicated
employees.

2. Professional significance
▪ Providing maximum opportunities for personal development of each employee.
▪ Maintaining healthy relationships among individual different and work groups.
▪ Allocating work properly.

3. Social significance
Sound human resources management has a great significant for the society. It helps to
enhance the dignity of labor in the following ways.

▪ Providing suitable employment that provides social and psychological satisfaction

to people.
▪ Maintaining a balance between the job available and the jobseekers in terms of
numbers, qualification, needs and aptitudes.
▪ Eliminating waste of human resource through conservation of physical and metal
health

4. National significance
▪ Human resource and their management play a vital role in the development of a
nation. The effective exploitation and utilization of a nation’s natural, physical and
financial resources require an efficient and committed manpower.

▪ There are wide differences in development between countries are with similar
resources due to differences in the quality of their people.

▪ Countries are underdeveloped because their people are backward. The level of
development in a country depends primarily on the skills, attitudes and values of its
human resources. effective management of human resources helps to speed up
the process of economic growth which in turn leads to higher standards of living
and fuller employment

▪ Human resource Management is the central subsystem of an organization.

Evolution of HRM

1. The Industrial Revolution (beyond 1820 to 1840)

The systematic development of HRM started with industrial revolution that started during
1850s in Western Europe and USA. The industrial revolution consisted, essentially, the
development of machinery, the use of mechanical energy in production processes, and
consequently the emergence of the concept of factory with large number of workforce
working together.

2. Trade unionism (1841 to 1909)

Shortly after the emergence of factory system, workers started to organize themselves
based on their common interests to form workers’ associations which were subsequently

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 known as trade unions. The basic objectives of these associations were to safeguard
interest of their members and to sort out their problems which arose primarily because of
employment of child labour, long hours of work, and poor working conditions.

3. Scientific Management (1910 evolve & 1920 implementation to 1940)

Around the beginning of 20th century, Taylor started to find out ‘one best way of doing
thing’ based on time and motion studies. On the basis of his experiments, he was able to
increase workers’ productivity considerably and wrote many papers based on these
experiments and a book on scientific management.

4. Industrial Psychology (1945 to 1970)

Hugo Munsterberg wrote a book on ‘Psychology and Industrial Efficiency’ which
suggested the use of psychology in the field of personnel testing, interviewing, attitude
measurement, learning, etc. This brief period was termed as ‘Industrial Psychology Era’. In
1924, a group of professors from Harvard Business School, USA, began an enquiry into the
human aspects of work and working conditions at Hawthorne plant of Western Electric
Company, Chicago. They conducted researches from 1924 to 1932 and arrived at the
conclusions that productivity of workers depended on - (i) social factors at the workplace,
(ii) group formation and group influence, (iii) nature of leadership and supervision, and (iv)
communication

5. Human Relation Movement Era (1971 to 1980)

Around 1920s, management researchers gave a close look at the human factor at work
and the variables that affected people’s behavior. In relation to the research conducted
in Industrial Psychology, They concluded that in order to have better productivity,
management should take care of human relations besides the physical conditions at the
workplace. Consequently, the concepts of social system, informal organization, group
influence, and non-logical behavior entered the field of management of personnel.

6. Behavioral Science (1980 to 1990)

In contrast to human relations which assume that happy workers are productive workers,
the behavioral scientists have been goal and efficiency- oriented and consider
understanding of human behavior to be the major means to that end. They have tried
several sophisticated research methods to understand the nature of work and the people
in the work environment.

7. The Contemporary HRM Era (1990 onwards)

When the factory system was applied in production, large number of workers started
working together. A need was felt that there should be someone who should take care of
recruiting, developing, and looking after welfare of these workers. For this purpose,
industrial relations department came into existence in most of the large organizations
which was concerned mostly with workers.

However, as the time passed and the complexity of managing human resources in large
business organizations increased, the scope of industrial relations department was
extended to cover supervisory staff and subsequently managerial personnel. Industrial
relations department was named as personnel department

With the increasing competition for market share, competition for resources including
human talents, and increased knowledge in the field of managing human resources,
people were not treated merely as physiological beings but socio-psychological beings
as a prime source of organizational effectiveness and large organizations changed the
nomenclature of their personnel department to human resource
‘department to reflect the contemporary view.

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 Even the American Society for Personnel Administration, the largest professional
association in the field of human resource management, changed its name to the Society
for Human Resource Management in 1990. At the academic level, similar pattern was
followed and the title of personnel management course was changed to human resource
management. Since then, the expression is gradually replacing the hackneyed term
‘personnel management’.

Roles of Human Resource Manager

1. Business Partner. They help top management formulating an HR strategy that firmly
supports the organizational goals.

2. Change Agent. They serve a catalyst of change; a transformation leader focuses on

organizational effectiveness, improvement, and development.

3. Administrative Expert. Ensures the efficient delivery of HR services through the use of
information and communication technology through performing specific duties that foster
the needs of their departments and the entire organization.

4. Employee Advocate. Voluntary act of HR manager publicly supports the company

through its own resources and networks.

Challenges of Human Resource Manager

1. Complicated Jobs of Managers. Due to constant change in the business environment, the
innovation of technology, and the higher demand in globalization, managers tend to face
various difficulties in doing their job, particularly in handling people. Hence, the HR
Manager is the answer to their problem to resolve the supervisor-subordinate relations
successfully.

2. Labor law compliance is required. The business mandate to abide the legal requirements
under the Philippine Laws on Labor as provided in the Labor Code of the Philippines, Labor
standard, Labor relations, Employee Health and Safety Standard, Compensation
guidelines, SSS, Philhealth, PAGIBIG, and other statutory benefits. This means HR must know
legal matters so that they know how to operate the business properly.

3. Work diversity. A big challenge in any organization is that people have distinct ideas,
attitudes, beliefs, values from different cultural backgrounds, races, religions, genders, and
sexual orientations. Thus, the duty of HR is to support the top management in integrating
the workforce mindset to stand united as one.

4. Organizational Maintenance. This involves protecting employees' welfare on physical,

mental, and emotional aspects, and to boost individual morale. Enable to attain its
objectives the HR conducts different programs in fringe-benefits such as housing, medical,
and educational facilities, conducive environment.

5. Effective training. The success of organizational performance relies on training. HR focuses

on the development of the organization by providing appropriate training in the
workforce.

6. Hiring the right person for the right job. Many cases happened that business failed to meet
customer satisfaction due to the poor performance rendered by the employees. It is

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 because they hire a person that is not qualified in the job. Hence, HR must implement a
strict recruitment and selection process.

7. Labor Cost /Cost or Expense Involved in Personnel Problems. Labor cost is the highest single
cost for many organizations. It is made considerably higher than need be primarily due to
personnel problems of tardiness, absenteeism, labor turnover, and costly legal cases.