Introduction to Human Resource

Management (HRM)

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What Is Management?
 Managers perform 5 basic functions:
 Planning,
 Organizing,
 Staffing,
 Leading, and
 Controlling.

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Managers Perform 5 Basic
Functions

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Planning
 Because organizations exist to achieve some purpose,
someone has to define that purpose and find ways to
achieve it. A manager is that someone and does this
by planning.
 Planning includes:
 Defining goals
 Establishing strategy
 Developing plans to coordinate activities
 To ensure that:
 work to be done is kept in proper focus
 organizational members keep their attention on what
is important.

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Organizing
 Managers are also responsible for arranging
and structuring work to accomplish the
organization’s goal. This function is called
organizing.
 It includes:
 Determining what tasks are to be done and
by whom, how tasks are to be grouped, who
reports to whom, and where decisions are to
be made.
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Leading
 Part of a manager’s job is to direct and
coordinate the work activities of employees.
This is the leading function.
 Leading includes:
 Motivating employees
 Directing the work activities of others
 Selecting the most effective communication
channel
 Resolving conflicts among employees.

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Controlling
 Controlling involves monitoring, comparing,
and correcting work performance.
 After the goals are set, the plans formulated,
the structural arrangements determined, and
the people hired, trained, and motivated,
there has to be some evaluation to see if
things are going as planned.
 Any significant deviations will require that the
manager get work back to track.
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Staffing
 Staffing involves HR activities in creating and
maintaining a workforce.
 It involves:
 Evaluating organization’s needs and develop plans to
meet those needs (HR planning).
 Analyzing job requirements to develop a picture of
the jobs that people will be doing and the
competencies required to do those jobs well (job
analysis).
 Recruiting people to fill jobs and maximizing the
retention rates of those who perform well in the jobs
(attracting, selecting, placement, and retaining).

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What Is HRM?
 Heavily involves in the staffing function
 It is about the utilization of employees
to achieve organizational objectives.

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What Is HRM?
 Definition:
 The policies and practices involved in
carrying out the “people” or human
resource aspects of a management
position, including recruiting, training,
appraising and rewarding employees.

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HR Activities or Functions
 Human resource planning
 Staffing (recruitment, selection, placement, and
retaining employees)
 Human resource development (training)
 Performance management (performance appraisal or
evaluation)
 Compensation and benefits (rewards)
 Grievances and disciplines (employment relations)
 Employee safety and health (well-being)
 Industrial relations (management-employee relations)

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Interrelationships of HRM
Functions
 Examples:
 Recruitment and selection (staffing) will
have an impact on training (HR
development) and vice versa.
 Training will have an impact on
performance appraisal (performance
management), which in turn, will affect
compensation of the employees.

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Questions
 Are managers of various functional
areas (production, marketing, finance,
and others) involved in HR activities?
 Or, just the HR managers involve in HR
activities?

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HR Aspects of A Manager’s
Job
 HR—The people aspects of the
management job:
 Conduct job analysis.
 Plan manpower needs, recruit, and
select job applicants.
 Place the right people on the right job.

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HR Aspects of A Manager’s
Job
 Orient new employees.
 Train employees for jobs that are new to
them, upgrade the skills and develop the
abilities of the existing employees.
 Manage wages, incentives, and benefits.
 Appraise performance to maintain or
improve employees’ performance.

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HR Aspects of A Manager’s
Job
 Interpret company’s HR policies and
procedures.
 Control employee costs.
 Maintain employee morale.
 Build employee motivation and
commitment.
 Protect employees’ health and safety.
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HR Aspects of A Manager’s
Job
 Interview, counsel, and discipline
employees.
 Understand employment laws.
 Handle grievances and employee
relations.
 Develop good working relationships
among employees.

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HR Aspects of A Manager’s
Job
 All managers are, to some extent, HR
managers.
 All managers at every level must
concern themselves with human
resource management.
 They recruit, train, appraise, and
reward their employees.

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Line and Staff Aspects of HRM
 Yet, many companies also have a HR
dept. with a HR manager.
 Are the duties of HR managers different
from those of “line” manager?
 We can answer this question by
discussing the difference between line
authority and staff authority.

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Line and Staff Aspects of HRM
 Authority--The right to make decisions, direct
others’ work, and give orders.
 Line Authority--The authority of managers to
direct people in his or her own department. It
creates a supervisor-subordinate relationship.
 Staff Authority--The authority gives right to a
manager (such as the HR manager) to advise
other managers or employees. It creates an
advisory relationship.
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Line and Staff Aspects of HRM
 Line Manager (has line authority)--A manager
who is authorized to direct the work of
subordinates and is responsible for
accomplishing the organization’s tasks.
 Staff Manager (has staff authority)--A
manager who assists and advises line
managers.
 Staff managers have staff authority but they
also have line authority within their own
departments.

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Line and Staff Aspects of HRM
 HR managers are staff managers.
 They assist and advise line managers in areas
like recruiting, training, appraising, and
rewarding.
 However, HR managers have line authority
within their own departments.
 And other line managers also have HR duties,
as described in the HR aspect of a manager
previously.

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Line Manager’s HR Duties
 In small organizations, line managers
may carry out all these HR duties.
 In large organizations, line managers
need the specialized knowledge and
advice of a separate HR dept.

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HR Manager’s Duties
In sum, a HR manager carries out 3 distinct
functions:
 Line function
 Coordination function
 Staff function

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HR Manager’s Duties
 Line Function:
 The HR manager directs the activities of
the people in his or her own
department and in related service areas
(such as the cafeteria facilities in a
plant).

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Line Function

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HR Manager’s Duties
 Coordination Function:
 HR managers also coordinate personnel
activities, a duty often referred to as
functional control.

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Coordination Function

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HR Manager’s Duties
 Staff Function:
 Assisting and advising line managers is
the heart of the HR manager’s job.

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Staff Function

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HR Cooperation with Line
Managers—An Example

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Why is HRM Important to
Managers?
 Ask yourself these questions before you
answer the above question:
 Do you want to:
 Hire the wrong person for the job?
 Have a high employee turnover?
 Waste time with useless interviews?
 Find that your people are not performing?
 Commit any unfair employment practices?
 Have your company sued for discriminatory
actions or unsafe practices?
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Why is HRM Important to
Managers?
 You may do everything right as a manager,
but you may fail as a manager because you
have hired the wrong people or you do not
know how to motivate your employees to
perform their best.
 Managers can be successful if:
 They have hired the right people for the right
jobs.
 They motivate, appraise, and develop these
people.
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Why is HRM Important to
Managers?
 Another reason why HRM is important is
that it deals with human capital in
organizations, which can be a strength
for creating competitive advantage for
an organization.
 There are many resources that affect
organizational performance, and human
capital is one of them.
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Organizational Resources
 Basically, four types of assets in organizations:
Physical, financial, intangible, and human.
 Physical--buildings, land, computers, vehicles,
equipment, etc.
 Financial—cash, stocks, loans, funds, etc.
 Intangible—R & D, patents, information systems,
designs, know-how, etc.
 Human capital—individuals with talents,
capabilities, experience, professional expertise,
relationships, etc.

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Human Capital in
Organizations
 Human capital is defined as the collective
value of the capabilities, knowledge, skills, life
experiences, and motivation of an
organizational workforce.
 Sometimes it is called intellectual capital to
reflect the thinking, knowledge, creativity,
and decision making that people in
organizations contribute.

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HR as a Core Competency
 Human capital is not solely the people
in organizations--it is what those people
bring and contribute to organizational
success.
 HR can be a core competency—a
unique capability that creates high
value and differentiates an organization
from its competitors.
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Environment of HRM
 A HR consultant once said: “HR professionals
need to scan the environment everyday –
whether by the Internet, newspaper, or
magazines. Everything has the potential to
impact everything we do.”
 This implies that many elements of an
organization’s external and internal
environments can influence HRM.

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Environment of HRM
 External Environment:
 It encompasses local, national, and
multinational conditions that confront an
organization.
 Elements of the external environment
include: economic conditions, the legal-
political landscape, industry dynamics, labor
markets (economic), country culture and
societal values, and technology.
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Environment of HRM
 Internal Environment:
 It refers to conditions within the
organization itself.
 Sometimes it refers to as the
organizational environment.

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Environment of HRM
 Effective organizations seek to create an
internal organizational environment that fits
its current external environment yet is flexible
enough to change as new conditions arise.
 Because the external environment changes
constantly, changes in the organizational
environment often are needed.
 Example: the change in labor laws will call for
a change in the hiring policy.
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The Changing Environment of
HRM
Changes are happening everyday. HR
managers must be able to respond to
these changes.
The major changes or trends are as follows:
 Globalization

 Technological advances

 Changes in nature of work

 Changes in workforce demographics

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Globalization
 Tendency of companies to extend sales,
ownership, or production to other
countries.
 Companies are globalizing their production
by taking advantage of local facilities.
 E.g. Toyota produces cars in China,
Thailand and many other countries.
 Why companies go international or global?

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Globalization
 More competition  more pressure to be “world
class”  Lower costs, to increase productivity of
employees, and to improve quality further.
 For business owners, globalizing means
benefits like reaching millions of new
consumers.
 But globalization also poses the threat of
facing new global competitors in their home
countries.

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Technological Advances
 Use of the Internet and information
communication technology (ICT) to increase
competitiveness in business.
 Enabled businesses to outsource their non-core
activities to other countries where costs are lower.
 Managers can manage, communicate, and do
business online.
 Employees can also work from home and
communicate with the office and customers via
the Internet.

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Changes in Nature of Work
 Caused by technological advances as well.
 Many factories have been automated.
 There is a shift from manufacturing jobs to service
jobs.
 There is also a shift to use “non-traditional” workers
 staff holding multiple jobs, or part-time staff.
 Many people work under alternative work
arrangements such as teleworking or telecommuting
(work at home regularly), and fexitime.

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Changes in Workforce
Demographics
 Diversified workforce  staff employed are
of different race, religion, nationality,
gender, age and culture
 A challenge for HR managers
 E.g. Workers from Bangladesh, China,
India, Indonesia, Pakistan and Thailand in
Singapore’s and Malaysia’s construction
and agriculture sectors.

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The Changing Environment of
HRM--Implications
 Examples:
 Globalization → staffing international operations for
sustained global growth.
 Technological Advances → training and development.
 Changes in Nature of Work → compensation of “non-
traditional” workers.
 Changes in Workforce Demographics → motivation
and fringe benefits to employees with different
cultural backgrounds.
 END

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