Environmen

t of HRM
Reporter: Haydie Gautani
 Topics

Environment of • Introduction of HRM

HRM • Environment influencing
HRM
BEARE FIRING SQUAD I E T Y
R OF B IC S O C
A D CR I T
NEWS
Human Resources ADMIN
N CE
ID A R C O M
U O
G NCIL PRINCIPAL’S PL I A N
U C E
CO P OLICE
OFFICE
Human Resources
Human resource is defined as the total knowledge, skills, creative
abilities, talents and aptitude of persons working in an organization.

HR has become more concerned with developing and implementing

programs that focus on talent acquisition and management ensuring
that qualified human resources are acquired, motivated, and developed
in order to realize the organization's goal and objectives.
 Human Resource Management - Definition

• HRM is the systematic planning, development and control of a network of

interrelated processes affecting and involving all members of the
organization – Wendel French
• Human Resource Management is the process of acquiring, training,
appraising, and compensating employees, and attending to their labour
relations, health, safety and fairness concerns – Gary Dessler
• Human resource management (HRM) is designing management systems to
ensure that human talent is used effectively and efficiently to accomplish
organizational goals –Matthis and Jackson
 Human Resource Management – Major Functions

• Talent Acquisition – recruitment

• Performance Management – monitoring employee’s performance (ex PIP)
• Employee Training and Management Development – On-boarding, Skills
training
• Compensation Management - Salary
• Benefits Management – outside basic compensation
• Employee relations Management – resolves problem or dispute of
employee and enforcing policy.
• Labor Management Relations – deals with labor unions.
 Importance of HRM
• HRM can contribute to the effective management of human resources
within a firm, and this could lead to sustained competitive advantage.
• The human relations movement began as a result of the Hawthorne studies.
• The study were to determine the relationship between some physical
conditions of the workplace and productivity.
• The studies also found that although financial motives are important, social
issues are equally important factors in worker productivity.
Environment of HRM
 Environment of HRM

• Environment comprises all those forces which have their

bearing on the functioning of various activities, including
human resource activities.
• Environment scanning helps HR manager to become pro-
active to the environment which is characterized by
change and intense competition.
 Business Environment

• Internal Environment
• External Environment
Internal Environment
Internal Environment
Internal environment factors have a direct impact
on the individual organization.

• Value System
• Mission and Objectives
• Policies
• Organizational Structure
Internal Environment – Value System
• A value system includes the culture and norms of the
organization.
• The value system can be changed or replaced at any moment
based on the direction of upper management.
Internal Environment – Mission Objective

• Different priorities, policies, and philosophies of a

business can affect the mission and objectives.
• Mission is the very purpose and justification for the
existence of a firm.
Customers — who will be served
Products/services — what will be
produced
Location — where the products/services
will be produced
Philosophy — what ideology will be
followed
Internal Environment – Policies
• Policies are guidelines that govern how certain
organizational situations are addressed.
• Company policies are an indication of an organization's
personality and should coincide with its mission
statement.
Importance:

1. To provide safe working conditions for employees.

2. To encourage the employees to achieve as much of
their potential as possible.
3. To provide such compensation to employees that
encourages high level of performance.
4. To provide promotional avenues to employees.
Internal Environment – Organizational Structure

Organizational Structure is the hierarchical arrangement of tasks

and people. This structure determines how information flows
within the organization, which departments are responsible for
which activities, and where the decision‐making power rests.
External Environment
External Environment

• Political
• Economic
• Social
• Technological
• Environmental
• Legislative

PESTEL changes are continuously impacting on human resource

policies These factors affect the internal operations regardless of the
fact that they are outside the organization.
External Environment – Political/Legal

Changing labor laws related to employment working

conditions, pay and wages, related to industrial disputes.
• Tax and Economic Policies – Tax increase
• Foreign Trade Regulations – Tariffs
• Employment Laws – ex. Contractualization Act

Article 296 of the Philippine Labor Code states that employees

who continue to work after a six-month probationary period
must be regularized, and as such, given benefits like medical
insurance, paid leaves, and security of tenure.
External Environment - Economic
Economic forces such as growth rate and strategy, industrial
production, national and per-capita incomes, money and capital
markets, competitions, industrial labour and globalization have
impact on HRM policies.

Examples:

• Unemployment rate
• Interest rate
• Inflation
External Environment - Social
Religion, lifestyle, ethics, demographics, education and
culture are some of the social factors that affect the
business operations.
External Environment – Technical
• Technology is a systematic application of organized
knowledge to practical tasks. Technological advances
affect the HR functions in several ways. Technology
makes the job more intellectual or upgraded.
• Any change in technology creates a need to
restructure human resource structure and policies.

Example:
Human resource management creates online portal to
increase efficiency in these processes. 
External Environment – Environmental
• Environmental factors include climate change, pollution and
recycling. Global warming experienced in today’s world has
greatly affected companies.

Examples:
• Increased risk due to weather – Severe weather is a primary
reason that climate change increases risk for businesses.
• Changes in Resource Availability and Cost – Resource scarcity
Key Takeaways
• Human resource management is the process of employing
people, training them, compensating them, developing
policies relating to the workplace, and developing strategies
to retain employees.

• Internal Environment have a direct impact on the individual

organization.

• External Environment can be summarized as

PESTEL and affect the internal operations regardless of
the fact that they are outside the organization.