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Subject: HRM

Chapter: Introduction to HRM

Class: bba-3
Ch-01
By
Syed Zohaib Hassan Kazmi

Recommended Book: HRM BY Gary Dessler (12 ed.)

Reference book: HRM by Stephen P. Robbins (10 ed.)

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 Introduction
 Organization: An organization consists of people with formally
assigned role who work together to achieve the organization’s goals.
 Manager: The person responsible for accomplishing the
organization’s goals, and who does so by managing (planning, organizing,
staffing, leading, and controlling) the efforts of the organizations people.
 Generally some discus four function of Management (planning, organizing, leading and
controlling);where 3rd function staffing is included in organizing.

 Management Process: the five basic functions of management

collectively represent the management process.
Management:
• Management is the process of reaching organizational goals by
working with and through people and other organizational
resources.  3
 Resources
 Organizational Resources represent all resources available to the
organization and necessary for the performance of its activities
 Resources used by all types of organizations can be divided into four basic
types:
• Human resources - skills, knowledge, capacity and nature of all persons
employed in the organization.
• Financial resources - cash, shares, bonds etc.
• Tangible resources - includes raw materials, parts, production offices and
all kinds of equipment.
• Information resources - include all kinds of useful information and data
needed for the effective decision making, also knowledge and key
competences of the employees

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 Management functions
 Koontz and O'Donnell have classified management functions into five. They have stated that
"the most useful method of classifying managerial functions is to group them around the
activities of planning, organizing, staffing, directing, and controlling." Thus, according to
them, there are five functions of management.
 Planning: Establishing Goals and Standards; Developing rules and procedures;
developing plans and forecasting.
 the manager will create a detailed action plan aimed at some organizational goal.
 Organizing: identifying the tasks, Giving each subordinate a specific task;
establishing departments; delegating authority to subordinates; establishing channels
of authority and communication; coordinating subordinates work.
 This step requires Manager to determine how he will distribute resources and organize his
employees according to the plan.
 Staffing: Determining what type of people you should hire; recruiting potential
employees; selecting employees; training and developing employees; setting
performance standards; evaluating performance; counseling employees;
compensating employees.
 Leading/Directing: Getting others to get the job done; maintaining morale;
motivating subordinates.
 Controlling: concern with monitoring activates to ensure goals are meet.
 setting standards such as sales quotas, quality standards
 checking to see how actual performance compares with these standards ; taking
corrective action, as needed.
• During Studding HRM we discuss only one function which is staffing . 5
“There is no „magic‟ in the success of companies. The secret
of their success is simply the way that treat their
employees”

Akio Morita
Founder ( Sony Corporation)

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 HRM

HRM is a subset of management.

It has five main goals:

attract
employees
Strong employees
=
Competitive advantage retain Goals
hire
employees employees
of
HRM

motivate train
employees employees

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 Intro to HRM
 HRM is the part of the organization that is concerned with the people dimension.
 Human Resource Management in its simplest definition means management of
organization’s manpower or workforce or human resources.
 HRM is management function concerned with hiring , motivating and maintaining
people in an organization.
 HRM is The process of hiring and developing employees so that they become
more valuable to the organization

 Definition by Gary Dessler:

 "Human resource management refers to the policies and practices
one needs to carry out the people or human resource aspects of
management position including recruiting, screening, training,
rewarding and appraising."
 My favorite definition:
 Human resource management (HRM) is defined as composed of
policies, practices and systems which influence employees' behavior,
attitude and performance.
 Human resource management does not only have a limited role in the
organization, rather, it is to support the organizational goal and
objectives 8
 Personnel Aspects Of A Manager’s Job
This course will provide students with the concepts and techniques they need
to perform the personnel aspects of their management job.
This includes:
Conducting job analysis (determining the nature of each employee’s job)
Planning labor needs and recruiting job candidates
Selecting job candidates
Orienting and training new employees
Managing wages and salaries (compensating employees)
Providing incentives and benefits
Appraising performance
Communicating (interviewing, counseling, disciplining)
Training and developing managers
Building employee commitment
And what a Manager should know
Employment Laws
Equal opportunity and affirmative actions
Employee Health and safety
Handling grievances and labor relations

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 Why HRM Concept is important for Managers?
Why HR concepts and techniques important to all managers? It is easier to
answer by listing some “personnel mistakes” which Managers don’t want
while managing..
Hirethe wrong person for the job
Experience high turnover
Haveyour people not doing their best
Waste time with useless interviews
Have your company in court because of discriminatory actions
Have your company receive penalties for unsafe practices
Have some employees think their salaries are unfair and unequal relative to
others in the organization (inequity)
Allow
a lack of training to undermine your department’s effectiveness
Commit any unfair labor practices

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 Authority

Line Authority
Staff Authority
Functional Authority

• Power and Authority: Power is defined as the ability or potential of an individual to

influence others and control their actions. Authority is the legal and formal right to give orders
and commands, and take decisions.
• Power is said to be a personal trait or characteristic whereas Authority is the formal or legal right
officially assigned to someone.

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 Authority:
 Authority is the right to make decisions, to direct the work of others, and to
give orders.
 The power or right to give orders, make decisions, and enforce obedience
 Established and legal power inherent in a particular job, function, or position that
is meant to enable its holder to successfully carry out his or her responsibilities.
Types of Authority:
 In Management we usually distinguish between line and Staff authority
 Line Authority: line authority gives mangers the right to issue orders to other
managers or employees. It creates superior-subordinate relationship
  It consists of the right to make decisions and to give order concerning the
production, sales or finance related behavior of subordinates.
 In general, line authority relates to matters directly involving management
system production, sales, finance etc., and as a result with the attainment of
objectives.
 People directly responsible for these areas within the organization are delegated
line authority to assist them in performing their compulsory activities.
 Line managers have line Authority

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 Staff Authority:
 Staff authority gives the manager the right to advise other managers or employees. It
creates an advisory relationship
 the right to advise or assist those who possess line authority as well as other staff
personnel.
 Staff authority enables those responsible for improving the effectiveness of line
personnel to perform their required tasks.
 Functional Authority:
 Functional authority consists of the right to give orders within a segment of the
organization in which this right is normally non existent.
 This authority is usually assigned to individuals to supplement the line or staff authority
they already possess.
 Functional Authority generally covers only specific task areas and is operational only for
designated amounts of time. It is given to individuals who, in order to meet
responsibilities in their own areas, must be able to exercise some control over
organization members in other areas.
 Limits of Authority:
 HRM have staff authority (Overhead function)
 Line authority takes precedence (priority)
 Scope of authority – how far (how much) can you authorize?

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 LINE – STAFF RELATIONSHIPS
 Line and Staff personnel must work together closely to maintain the
efficiency and effectiveness of the organization.
 To ensure that line and staff personnel do work together productively,
management must make sure both groups understand the organizational
mission, have specific objectives, and realize that they are partners in
helping the organization reach its objectives.
Example:
 A plant manager has line authority over each immediate subordinate, human
resource manager, the production manager and the sales manager.
 However, the human resource manager has staff authority in relation to the
plant manger, meaning the human resource manager has staff authority in
relation to the plant manager, human resource manager possesses the right
to advise the plant manager on human resource matters.
 Still final decisions concerning human resource matters are in the hands of
the plant manager, the person holding the line authority.

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 Functions of the HR Manager
 In Most of Organizations HR Manager carries out three distinct functions
with respect to practice of authority.
1. A line function
 The HR manager directs the activities of the people in his or her own
department and in related service areas (like the plant cafeteria).
2. A coordinative function
 The authority exerted by an HR manager as coordinator of personnel
actives.
 HR managers also coordinate personnel activities, a duty often referred
to as functional control. Here he/she ensure that line managers are
implementing the firm’s HR polices and practices ( e.g., observing to its
harassment policies).
3. Staff (assist and advise) functions
 Assisting and advising line managers is the heart of the HR manager’s job.

 Staff authority: Advisory relationship (Innovator role, Employee advocacy role)

 Line authority: Supervisor-subordinate relationship
 Functional authority: Authority as coordinator of personnel
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 Cooperative Line and Staff HR Management

1. The line manager’s responsibility is to specify the

qualifications ,employees need to fill specific positions.
2. HR staff then develops sources of qualified applicants and conduct initial
screening interviews
3. HR administrates the appropriate tests and refers the best applicants to
the supervisor (line manager), who interviews and selects the ones he or
she wants.

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 Examples of HR Job Duties
 Recruiters
 Search for qualified job applicants.
 Equal employment opportunity (EEO) coordinators
 Investigate and resolve EEO complaints, examine organizational
practices for potential violations, and compile and submit EEO reports.
 Job analysts
 Collect and examine information about jobs to prepare job descriptions .

 Compensation managers
 Develop compensation plans and handle the employee benefits
program.
 Training specialists
 Plan, organize, and direct training activities.

 Labor relations specialists

 Advise management on all aspects of union–management relations.

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HRM FUNCTIONS AND OBJECTIVES

Societal Objectives

Organizational
Objectives

Functional
Objectives

Personal
Objectives

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 HRM Functions and Objectives
1 Societal objectives: Societal objectives of HRM make sure that the
organization is socially and ethically responsible:-
• Minimizing negative impact of societal demands on organizations; For
example: EEO laws forces organizations to be ethical in recruitment, to
minimize the discrimination against hiring based on ethnicity, race, and
religion etc.
2 Organizational objectives: To determine the role of HRM in organizational
effectiveness Its purpose is to assist/serve organization:-

HR department also serve other departments
3 Functional objectives: To maintain department contribution in
organizational effectiveness
• HR department services must fit into the organizational needs.
4 Personal objectives:
•
To assist employees in achieving their personal/individual goals
•
Maximum contribution to organization
•
Personal objectives are achieved when employees are satisfied, motivated
and retained
•
Satisfied employees excellent services excellent organizational performance

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 HRM Functions and Objectives

HRM Objectives Supporting Functions

Societal Objectives Legal compliance
Benefits
Union-Management relationship
Organizational Objectives Human Resource Planning
Employee Relations
Training and Development
Performance Appraisal
Placement
Functional Objectives Performance Appraisal
Placement
Personal Objectives Compensation
Training and Development
Performance Appraisal
Placement

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 Current and Future HR Management Challenges
To grow and thrive in today's competitive environment; organization must
deal with several major challenges.
Meetingchallenges is necessary to create value and to gain competitive
advantages.

1.CostPressures and Restructuring

2.Globalization
3.Workforce Demographics and Diversity
4.HR Technology
5.HR Metrics

Value: In management, business value is an informal term that contains all forms of value that
determine the health and well-being of the firm in the long run.
Traditionally value was only a function of accounts (profit).
Current definition: How human resource is managed; is critical to the long term value of a
company.
Current definition of value includes not only profits but employees growth, satisfaction, and
career development opportunities.
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 Current and Future HR Management Challenges

1. Organizational Cost Pressures and Restructuring:

 Profitability will remain an issue in the future but the accepted path will
change.
 Profitability must come from increase revenue and decrease cost.(i.e. doing
more with less.)
 Business process re-engineering, continues improvement, variable pay,
Total Quality Management (TQM) and Six sigma.
 Pressures from global competitors and information technology have forced
firms to use:
– International outsourcing
– Adapt management practices
– Increase productivity, and
– Decrease labor costs

 Organizational restructuring: is the process by which an organization changes its

internal structure by restoring departments, ownership, or operations and
processes. The purpose of restructuring is to make the organization more profitable
and integrated.
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 Outsourcing HR Activities:
Outsourcing or Sub-contracting: Transfer activities to specialist
organizations

Reasons
•Restructuring, Downsizing, Growth in business, Decline in business
Benefits
•Cost efficiency, Access to experts

Total Quality Management (TQM): A system of management based on the principle that
every member of staff must be committed to maintaining high standards of work in every aspect of
a company's operations.  In a TQM effort, all members of an organization participate in improving
processes, products, services, and the culture in which they work.

Six Sigma: is a quality-control program developed in 1986 by Motorola that emphasizes cycle-
time improvement and the reduction of manufacturing defects.
Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is
a disciplined, data-driven approach and methodology for eliminating defects (driving toward six standard
deviations between the mean and the nearest specification limit) in any process – from manufacturing to
transactional and from product to service.
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 Current and Future HR Management Challenges (cont…)
2. Globalization of Organizations:
 Globalization is a term in business that refers to the integration of an organization's
operations, processes and strategies into diverse cultures, products, services and
ideas.
 Because of its emphasis on diversity, globalization also has a deep impact on the
way companies manage their employees.
 An expatriate
 A host-country national
 A third-country national

 As the world become smarter through Tele communication, travel, information.

The global village is no longer on the horizon, It is right here.
 US airline is partnering with British Air, Some automobiles use parts from
other countries, as in a car being assembled in the United States with the
parts coming from Japan, Germany, or Korea, Same is happening with
Banking, securities etc.

 Host Country: Nation in which individuals or organizations from other countries

 Home country:  the country in which a person was born and usually raised.
 An expatriate  is a person temporarily or permanently residing in a country other than that of their
citizenship.
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 Current and Future HR Management Challenges (cont…)

3. Workforce Demographics and Diversity:

 More diverse racially and ethnically, more women and the average age in
workforce are increasing.
– Racial/Ethnic Diversity
– Women in the Workforce
– Aging Workforce

 An ethnic group or ethnicity is a category of people who identify with each other based on

similarities, such as common family, language, social, cultural or national experiences
 Ethnic diversity means variety of different ethnic groups.
  The major ethnic groups of Pakistan in numerical size include: Punjabis, Pakhtuns, Sindhis,
Saraikis, Muhajirs, Balochis, Chitralis, Gujarati and other smaller groups

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 Current and Future HR Management Challenges (cont…)

4. Technology
Technology overcome geographic distance as well as language
and cultural differences as internet, global contacting, video
conferencing etc.
Technology will dramatically affect how and where work is done
through Tele conferencing and shared data sources.

 Technology is the use of scientific knowledge for practical purposes or applications,

whether in industry or in our everyday lives. So, basically, whenever we use our
scientific knowledge to achieve some specific purpose, we're using technology
 we can describe technology as products, processes or organizations.

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 Current and Future HR Management Challenges (cont…)
 HR Technology
 Human Resource Management System (HRMS)
– An integrated system providing information used by HR management
in decision making.
– A Human Resources Management System (HRMS) is a software
application that combines many human resources functions, including
benefits administration, payroll, recruiting and training, and
performance analysis and review into one package.
 Purposes of HRMS Data Collection
– Administrative and operational efficiency
– Availability of data for HR strategic planning

 A HRIS, which is also known as a human resource information system or human

resource management system (HRMS), is basically an intersection of human
resources and information technology through HR software. This allows HR activities
and processes to occur electronically.

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 Current and Future HR Management Challenges (cont…)

 Measuring HR Impact through Metrics :

 Human Resource (HR) metrics are measurements used to determine the
value and effectiveness of HR initiatives
 More analytical and develop metrics that measure the HR efforts, much like
financial officers.
– measuring the cost of hiring someone,
– calculating the turnover costs when persons leave the firm,
– doing a return-on-investment (ROI) analysis of training results and
expenses

 Business Metrics Definition. A Business Metric is a quantifiable

measure that is used to track and assess the status of a
specific business process

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 Old Myths New Reality

• People go into HR because they like • HR people must create the practices that
people. make employees more competitive, not
more comfortable.

• Any one can do HR • HR activities are based on theory and

research. HR professionals must master
both theory and practice.

• HR deal with the soft side of a business • The impact of HR practices on business
and is therefore not accountable. results can and must be measured. HR
professionals must learn how to translate
their work into financial performance.

• HR focus on cost which must be control. • HR practices must create value by

increasing the intellectual capital within
the firm. HR professional must add value
not reduce it.

• HR is HR’s JOB • HR work is as important to line managers

as are finance, strategy and other
business domains .
• HR professionals should join with
managers in supporting HR Issues.
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Supporting Notes

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 Some terms to be remember
 Globalization: the tendency of firms to extend their sales, ownership, and/or manufacturing to
new markets abroad.
 Multinational corporations(MNC): corporations with significant operations in more than one
country.
 Knowledge workers: individuals whose jobs are designed around the acquisition and
application of information
 Human Capital: the knowledge, education, training, skills, and expertise of a firm’s workers.
 Workforce diversity: the varied personal characteristics that make the workforce
heterogeneous.
 Downsizing: an activity in an organization aimed at creating greater efficiency by eliminating
certain jobs.
 Rightsizing: linking employee needs to organizational strategy. The process of a corporation
re-organizing or re-structuring their business by cost-cutting, reduction of workforce, or
reorganizing upper-level management.
 The term rightsizing is often used by companies instead of downsizing because it sounds less drastic.
"The company felt that rightsizing was necessary after four quarters of losses.“
 Outsourcing: sending work out side the organization to be done by individuals not employed
full time with the organization. 0r obtain (goods or a service) by contract from an outside
supplier.


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 Some terms to be remember
 Contingent workforce: the part-time , temporary, and contract workers
used by organizations to fill high staffing need or perform work not done by
core employees.
 Core Employees: An organization's full-time employees.
 Offshoring: the process of moving jobs out of one country and in to
another country.
 Merger: joining ownership of two companies
 Acquisition: the transfer of ownership and control of one organization to
another.
 Ethics: A set of rules or principles that defines right and wrong conduct.
 Code of Ethics: A formal document that states an organization's primary
values and the ethical rules, it expects organizational members to follow.

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“Never Give up; Today is hard, Tomorrow will be worse, but the day
after tomorrow will be Sunshine”
(Jack Ma, founder of Alibaba & Asian Richest person)

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