Human Resource Management:

Concept and Context

Unit 1
Learning Objectives
Meaning, Functions, importance & Changing
Dimension of HRM
Essential Skills/Changing role & challenges of
HR Managers
Structure of HR Department
External & Internal context of HRM
HRm in Nepalese context
“Take away my people, but leave my factories,
and soon grass will grow on the factory floors.
Take away my factories, but leave my people,
and soon we will have a new and better factory.”
- Andrew Carnegie
Why Study Human Resource Management
“ People are our greatest asset.”
Think of any organization around the globe, what
is there without human resources?
What would you have left?
NOT MUCH.
Cont…
Clerks in local supermarkets, lecturers in
colleges, tellers in banks
Finding the right people and selecting them
Ensure that they come to work on a regular basis
Train them on what to do on their jobs
Check if they are performing their duties as per
the expectations or not
Cont…
Hire the wrong person for the job
Experience high turnover
Have your people not doing their best
Waste time with useless interviews
Have your company taken to court because of your
discriminatory actions
Have your company cited under occupational safety laws
for unsafe practices and accidents
Have some employees think their salaries are unfair relative
to others in the organization
Allow a lack of training to undermine your department’s
effectiveness
Commit any unfair labor practices
Why HRM?
Faced with rapid change, organization need to develop more
focused and coherent approach to managing people. In just the
same way a business requires a marketing, financial or information
technology strategy it also requires a human resource or people
strategy.

In developing such strategy two crucial question must be address:

 What kinds of people do you need to manage and run your
business to meet your strategic business objectives?
 What people programs and initiatives must be designed and
implemented to attract, develop and retain staff to compete
effectively?
What is HRM
Human Resources Management (HRM/HR) – Activities designed to
provide for and coordinate the human resources of an organization.

The integration of all processes, programs, and systems in an organization

that ensure staff are acquired and used in an effective way

HR functions include:
Planning & recruiting, training & development, compensation, safety,
employee relations, research
Focus….
Learning the concepts and techniques of
performing the “people” aspects of
management job.
HRM
Human Resource Management (HRM) is
concerned with the “people” dimension in
management.
HRM is the process of acquiring, training,
appraising, and compensating employees, and
of attending to their labor relations, health
and safety, and fairness concerns.
HRM Goals
ATTRACT employees
HIRE employees
TRAIN employees
MOTIVATE employees
RETAIN employees

STRONG EMPLOYEES = COMPETITIVE

ADVANTAGE
Human Resources Management
Components of HRM
Acquisition

Development
Motivation
HRM

Maintenance
Purpose of human resource management
practices?

Human resource management attracts, develops,

and maintains a talented workforce.

Basic Responsibilities of Human Resource Management

 Attract a quality workforce—human resource planning,
recruitment, and selection.
 Develop a quality workforce—employee orientation, training,
performance appraisal.
 Maintain a quality workforce—retention and career
development.
HRM Ensures: OCTAPAC culture
O: Openness is their when employees feel free to discuss their ideas,
activities, and feelings with each other.
C: Confrontation is bringing out problems and issues into open with a
view to solving then rather than hiding it.
T: Trust is taking people at their face value and believing what they
say.
A: Autonomy is giving freedom to let people work independently with
responsibility.
P: Pro-activity is encouraging to take an initiative and risk.
A: Authenticity is the tendency on the part of people to do what they
say.
C: Collaboration is to accept interdependencies , to be helpful to each
other and work as team.
Objectives of HRM
Achieve high productivity
Increase quality of work life
Provide meaningful, challenging and interesting
responsibilities for their workforce
Provide opportunities for learning, training and
development and able to contribute for success of
organization
Increase workforce commitment
Motivate people to commit themselves towards
organization by adopting desirable HR practices
and measures such as promotion and reward
Management of Organizational Culture
Providing supportive environment for
employees creativity
Making organization system flexible
Maximizing social concerns
 Functions of HRM
 Job Analysis
 Involves collection of job related information to prepare job
description and job specification
 Human Resource Planning
 Involves estimation of demand and supply of manpower to fulfill
current and future HR requirements of the organization
 Recruitment and Selection
 Recruitment involves the process of making pool of qualified
candidates and selection of required number of employees from
such pool
 Training and Development
 Involves providing on-the-job training and off-the-job training to
employees depending on the training and development needs
identified
Performance Appraisal
 Involves evaluating employees performance against the
agreed target
Compensation and Benefits
 Involves rewarding people through pay, incentives and
benefits against the work done
Health and Safety
 Involves providing healthy and safe work environment to all
employees
Employee Relations
 Involves maintaining harmonious relations between
management and employees in the organization
HR FUNCTIONS AND ACTIVITIES
 HR Activities
1) Strategic HR
Management
2) Legal Framework
and Practices
3) Staffing
4) Talent Management
and Development
5) Total Rewards
6) Risk Management
and Worker
Protection
7) Employee and Labor
Relations
Importance of HRM
Getting Results
 By hiring right people for the right jobs and developing and
motivating them is important for getting results
 Better quality people improve productivity and promote
efficiency

Mistake Avoidance
 Hiring wrong person and maintaining him till retirement
 Incurring heavy cost of recruitment, selection, socialization,
training and development
 Experience high turnover of competent employees
 Avoid unfair labour practices and disputes
 Ensure employee safety
Cont….
Environmental Adaptation
 Helps in reducing resistance to change and promotes
readiness to change among employees
Improved Quality of Work life
 Improves quality of relationship between employees and
their total working environment
Commitment
 Improves employee commitment through increased loyalty
System Maintenance
 Performs function of acquisition, development, utilization
and maintenance of people in the organization
A Shift of paradigm
Personnel Management VS
Human Resource Management
PERSONNEL DEPARTMENTS
Traditional approach
Focuses on personnel administration,
compensation, employee welfare and labor
relations
Discipline and control oriented – concerned with
compliance of policies, rules and laws
HUMAN RESOURCE MANAGEMENT
DEPARTMENTS
Concerned with the management of human
energy and competencies
Concerned with acquisition, development,
utilization and maintenance functions
Regards people as human capital
Emphasizes on development and utilization of
human potential
Concerned as strategic function
Manages change
HR Management Roles
HR Management Roles
Trends Shaping Human Resource
Management
Globalization
and Competition
Trends
Technological
Trends

Trends in the
Nature of Work Trends in HR
Management
Workforce and
Demographic
Trends

Economic
Challenges and
Trends
Current HR Management Challenge
 Globalization of Business
 Outsourcing
 Contract out activities

 Off-shoring
 Shifting activities to a foreign country

 In-shoring
 Shifting activities from a foreign country

 Globally, diversified group of people in the companies

Current HR Management Challenge
 Technological Changes
 Apple, Samsung
 They must invent new products now

 Search Engine – Google

 Innovation is the MEGA trend that determine businesses and

the world

 What does that mean for people within the organization?

Current HR Management Challenge
 What does that mean for people within the organization?
 People have to cope with it
 People have to thrive innovation
 People have to be leaders in technology origin
Current HR Management Challenge
 Economic and Technological Changes
 Growth in contingent workforce: part-time, temporary, and
contract (short-term of about 1 year) employees are entitled
to legal protection but many are not aware of it

 Technological shifts and the Internet: Employees can get

work done anytime due to the availability of electronic
devices such as mobile phone and email. This may increase
stress and blur the line between work and rest.
Current HR Management Challenge
 Economic and Technological Changes
 User generated content – Facebook, Twitter, LinkedIn, Blogs
 The way we communicate with each other, how we learn,

how we share ideas with each other

Current HR Management Challenge
Workforce Demographics and Diversity
 Racial/Ethnic Diversity
 Women in the Workforce – Role of women has dramatically

changed
 Ageing Workforce (Talent shortage as qualified people retire)

Work is changing from handwork to knowledge

work
 Earlier, work was moving things, combine things but we work
with our brain. Our main work is thinking and
communicating.
Current HR Management Challenge
 Organizational Cost Pressures and Restructuring
 Trends in rightsizing
 Globalizing trends intensify cost-based competition
FIGURE 1–4 Trends Shaping Human Resource Management_(Dessler 2010)
Environment of Human Resource Management in Nepalese
organization

HRM has personnel management

orientation in Nepal. It is very much –
Discipline, control and direction oriented
Concerned with routine personnel administrative
functions
Rules, regulations, labour relations-oriented
It is least concerned with developing human
competencies and potential of employees.
People are not considered as important assets.
Environment of Human Resource Management in Nepalese
organization

Key barriers to development of HRM in Nepal are:

HRM is not given a strategic partner role
HRM is viewed as cost rather than assets by management
HRM is considered as firefighting job to deal with labor
grievances and indiscipline
Line managers do not feel ownership of HRM
Lack of mutual trust between labor and management has
proved a key barrier to effective HRM
HRM aspects is not considered in policy and plan formulation
Performance based HRM practices are lacking
HRM is short range-oriented..least concerned with future
potential development of employees
HRM Environment
Organizations are goal oriented composed of
people, structure and technology
Operating in dynamic environment, hence must
adapt
Environment affects HRM's performance &
Outcomes
Therefore, HRM should continually adapt to the
anticipated environmental changes
HRM Environment
Internal Environment
External Environment
Fig: The HRM Environment
Internal Environment of HRM
It is internal to the organization providing
strengths & weaknesses to HRM
Forces are:
HRM Scope
Organizational Activities
Stakeholders
Fig: Internal Environment of HRM
HRM Scope
Goals: Desired Outcomes should align with
organizational outcome (e.g. if the goal is to earn
profit, HRM may be constrained to spend money
on social welfare.
Policies: They are guidelines for decision
making which must be incorporated by HRM in
all areas of HRM (Acquisition, Development,
Motivation & Maintainance)
Strategies: They are long term vision of
organization. HRM must align with
organizational strategies
HRM Scope
Organizational Structure: It is the design of
jobs & relationships.
concerned with division of labor, co-ordination,
authority, responsibility
HRM must function within the boundary of
organization structure
Organizational Resources: Consists of
physical, financial and informational resources
Resource availability sets limit on HRM activities
HRM Scope
Organizational Culture: They encompass
shared values, norms, beliefs and symbols that
guide employee behavior in organizations
Culture is reflected by Openness, Confrontation,
Trust, Authenticity, Pro-activity, Autonomy,
Collaboration,
HRM must operate with in the cultural
framework of an organization
Organizational activities
HRM is a subsystem in the organization system
Must allign with other systems or activities such
as Production, Marketing, Finance, R&D
Must co-ordinate with all activities
Stakeholders
All the parties who have interest in the
performance of HRM or are affected by HRM.
They are:
Employees
Labor Unions
Competitors
Government
Pressure Groups
External Environment of HRM
Consists of conditions and forces which are
external to HRM which directly afftect HRM by
providing Opportunities & Challenges

Consists:
Physical Forces
Political-Legal Forces
Economic & Labor market Forces
Socio-Cultural Forces
Technological Forces
Fig: External Environment of HRM
Physical Forces
They are the result of geographic and natural
conditions
Consist of topography & climate
Political & Legal Forces
Political:
They are represented by political system,
institutions & phylosophy
Laws enacted by parliament affect HRM
Policies in equal employment opportunities,
quotas in employment for special groups
(women, disadvantages and indigenous people)
government agencies act as regulatory agencies
(fix minimum wages, provide licenses to
organizations engaged in HRM
Legal:
consist of laws, rules, regulations, court cases,
institutions and processes
Legal provision affect HRM policies & practices
HRM must comply with the legal provisions
In addition, labor laws generally proctect the
interest of employees by specifying terms &
conditions of employment, working conditions,
compensations, benefits, etc
Economical & Labor Market Forces
Economical:
HRM policies should align with the trend of
Globalization (think globally, act locally),
Demographics (size, composition & location of
work force), & Economic Health (the level of
income, stage of business cycle, inflation,
pressure of fiscal policies, etc
Labor Market Forces:
TIght Labor market & Loose Labor market,
origin of labor largely affect HRM policies &
practices
Socio cultural forces
Social Forces:
It consist of social norms and life styles
Change in social norms have provided both
opportunities and challenges to HRM (For e.g.
Women at work force)
Life style (pattern of living standard reflected in
his/her activities, interests, opinions) also affects
HRM
Changing lifestyles has resulted in shorter work
weeks, flexible working hours, work at home, etc
Cultural Forces:
Culture is a complex whole of knowledge,
customs, traditions, values, religion, language
and works of art and architecture created by
society handed by generation to generation
Affects HRM by creating work force suitable to
organization, creating attitude towards work and
leisure
Providing time orientation to work force, etc
Cultural changes, cross cultural influences ,also
affect HRM
Technological forces
HRM must align with technological changes
(skills, methods, systems, equipments
Automation, computerization, robotics,
informatics have all affected HRM
Redesign of jobs, rewrite job descriptions,
institute new compensation plans and introduce
new selection and development methods have
become common due to technological changes
Human Resource Management
System
External Environment

Inputs Processing Outputs

Acquisition (Recruitment, Organization-related
Human Energy and
Selection, Socialization) Outputs
Competencies
- Goal achievement
Development (Analyzing - Quality of work life
Organization Plan
HRD needs, employee (QWL)
training, management - Productivity
Human Resource
development, career - Profits
Plan
development) - Readiness for
Human Resource Change
Utilization (Motivation,
Inventory Performance Appraisal, Employee-related
Compensation) Output
Job Analysis
- Commitment
Maintenance (Labor - Competence
Labor Market
Relations, Employee Welfare) - Congruence
- Cost effectiveness
Feedback
Internal Environment
Essential skills of HR manager
 Four proficiencies are:-
HR proficiencies:- knowledge and skills in areas like
selection, training , compensation.
Business proficiencies:- like strategic planning, marketing,
production and finance.
Leadership proficiencies:- they need the ability to work
with and lead management groups and to drive the
changes required.
Learning proficiencies:- ability to stay ahead of and apply
all new technologies and practices affecting the profession.
Cont…
 HR qualifications
 Managing within the law
 Managing ethics
HRM as a shared function
Human resource management is a shared function. Some of the
related tasks are implemented by human resources specialist
while others are undertaken by managers, especially heads of
departments. To avoid conflict between line managers and
human resource specialist clear guidelines should be drawn up
so that each party knows its responsibilities and authority.
However, Human resource management position may be
general or specific. General position requires the job holder to
multi task and carries out a variety of human resource related
functions. Specialized job may allow the job holder to focus on
one human resource function at a time, perhaps recruitment or
training or even safety and health.
HR ORGANIZATION STRUCTURE
HR department in line organisational structure.
•HR department in functional organisational
structure.
•HR department in line and staff organisational
structure.
•HR department in divisional organisational structure.
•HR department in matrix organizational structure.
HR dept in line organizational structure
CEO

HR Manager

Employment Wage and Welfare

Training offices
officer salary officer officer

Clerk Clerk Clerk Clerk