IFNAN COLLEGE

• . Welcome
Fundamentals of HRM

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 CHAPTER ONE
OVERVIEW OF HRM

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LEARNING OBJECTIVES
After completing part one, you will be able to:
• Realize the association of management with HRM
• Describe the historical development of HRM
• Discuss what is meant by HR management
• List the main components of HR management.
• Recognize the features of HR management.
• Describe the main HR management functions.
• Explain the contribution of HRM in achieving organizational
strategic plan.
• Identify how environmental factors impact the management of
human resources.

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 Major Contents to be covered

So
ct o r

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al
F
c Fa

ac
to
r
o mi
n
Eco

MEANING COMPONENTS
OF HRM OF HRM

EVOLUTION OF
HRM
FEATURES OF HRM

HRM

ENVIRONME FUNCTIONS
NT OF HRM

or
act
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F ac

al F
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Leg

i ti c
P ol
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 Management Essentials: An Overview

What is management?

 Management refers to the process of achieving organizational

objectives with and through the effort of people and other resources.

 Management involves setting goals and allocating scarce resources to

achieve them.

 Management is the process of efficiently achieving the objectives of the

organization with and through people.

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 Management…cont’d

Universal (precise) definition of Management:

Management is a social process involving coordination of

human and material resources through the functions of
planning, organizing, leading and controlling in order to
achieve stated objectives.(S.A., Sherleker & colleagues)

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 Primary Functions of Management

 Planning : establishing goals and determining strategies to

achieve the stated goals

 Organizing :determining what activities need to be done, deciding
who will report to whom, assigning authorities and responsibilities

 Leading: assuring the right people are on the job, motivating

and retaining employees

 Controlling :monitoring activities to be sure goals are met

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 Management---Cont’d

Management implies that:

 Organizational activities require human effort & capabilities

 Organizations depend on performance of people for

achieving their mission and goals

 Organizations are directed by decisions of one or more

people

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 Organization & Human Resource

 Organizations are human associations for achieving goals

 Organizational effectiveness largely depends on the

performance of people working in organizations i.e. better people
achieve better results.

 People possessing energy and physical strength alone are NOT

human resources.

 So, when is that people become human resource?

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Organization …Cont’d

People become human resources only when they acquire

competencies, such as:
 knowledge,
 skills,
 attitudes,
 experiences and
 potential for growth.

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 Development of HRM Concept

 HRM activities have been performed since ancient times.

The pioneering work of P.Drucker and D.McGregor in the 1950s
laid its formal foundation.

 P. Drucker introduced the concept of “visionary goal-directed

leadership”. This led to the development of “management by
objectives” (MBO) which is fundamental to HRM.

 D. McGregor advocated “management by integration and self-

control”. HRM strategy was regarded as an integral part of
organizational strategy. Every manager was made responsible for HRM.

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 Development…Cont’d

Modern Concept of HRM has developed through the following

stages
Stage 1 : The Commodity Concept
 Labor was regarded as a commodity to be bought and sold.
 Wages were based on demand and supply.
 Government involvement in protecting employees was little.

Stage 2 : The Factor of Production Concept

 Employees were considered as factors of production just like
money, land, materials, machinery.
 Taylor’s scientific management stressed proper selection & training of employees
so as to maximize productivity

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 Development…Cont’d
Stage 3 : The goodwill concept
Emphasized welfare measures like safety, first-aid, lunch room, restroom will
have a positive impact on workers’ productivity.

Stage 4 : The Paternalistic Concept

 Employees organized together on the basis of their common interest and formed
trade union.
 Employers began to provide schemes to workers.
 Employers assured a fatherly and protective attitude towards their employees,
as parents do to their children.
Stage 5 : The Humanitarian Concept
 Employees had certain inalienable rights as human being, therefore, employers
are expected to protect their right.
 Social & psychological satisfaction of employees were considered to improve
productivity.
 Realized that money is less a factor in determining output than group standards,
group incentives, and security.

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 Development…Cont’d

Stage 6 : The Behavioral HR Concept

 Focused on analyzing & understanding human behavior in organizations.

 Employees began to be considered as valuable assets of an organization
 Focus shifted towards management practices like two ways
communication, MBO, informal groups, etc.

Stage 7: The emerging concept

 Employees are considered as partners in the organization

 HRM emerging as a discipline
 HR became partner with management in strategic execution

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 What is Human Resource Management?

Definition 1
HRM is the process of achieving organizational objectives by acquiring,
developing, retaining, and properly using the HRs in an organization.

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 Definition 2

HR Management:
 is a process of bringing people and organizations together so that the
goals of each are met.

 is that part of the management process which is concerned with the Mgt
of HRs in an organization.

 tries to secure the best from people by winning their wholehearted

cooperation.

 is the art of procuring, developing and maintaining competent workforce

to achieve the goals of an organization in an effective and efficient
manner.

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 COMPONENTS OF HRM SYSTEM

INPUTS PROCESSING OUTPUTS

•Organization plan • Acquisition

• Goals
Development
• HR plan • Motivation
Achievement
• (services and
• Job analysis Maintenance
/or products)
• Labor market

Feedback

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 MAJOR ESSENTIAL FEATURES OF HRM

Human Resource Management:

 Human Focus
Concerned with the management of employees
 Pervasive
Inherent in all organizations & concerns every
manager in the organization

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 FEATURES OF HRM-----Cont’d

 Continuous
A continuous function, not a one time activity

 Challenging Function
HRM is challenging due to dynamic nature of people.
As a dynamic function is affected by internal and
external changes

 System
A system consisting of interrelated acquisition, development,
motivation, and maintenance subsystems

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 Scope of HRM
• The scope of Human Resource Management (HRM) is Personal Management,
Employee Welfare and Industrial Relations.
 Personnel Management - Its direct manpower management which engage
HR planning, hiring, training, development, induction & orientation,
transfer, promotion, compensation, layoff & economizing, and employee
effectiveness. It also includes developing new skills, disbursement of
salary, motivation, payment, itinerant policies and actions, and other
related way of actions.

 Employee Welfare – It covenant with working environment and amenities

at workplace. It includes a wide range of responsibilities & services such as
security, health, medical, welfare and social. It also wrap appointment of
safety bureaucrat making the environment favorable for working, reduce
workplace risk, support by top management, job safety, cleanliness,
safeguarding machinery, proper working, environment, hygiene, medical
care and benefit.
 Cont’d

 Industrial Relations – Since employment relationship is a very

sensitive area, which needs careful connections with labor or
employee union, address their grievances and effectively settle
the disputes in direct to maintain concord and harmony in an
organization.
It is an art and science of understanding the employment relations, joint
consultations, corrective events, solving problems and shared efforts, thoughtful
human behavior and continue work relations, group deal and conclusion of
argument.
The aim is to maintain the interests of both workers &management.
Scope and Functions of HRM

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 Major operative HRM Functions/Activities

1.Human Resource Planning/HRP/

The process of reviewing human resource requirements to ensure that the
required number of employees, with the required skills & knowledge are
available when they are needed

2. Recruitment
The process of attracting people and encouraging them to apply for
vacant jobs with the organization.
3. Selection
The process of choosing and hiring from a group of applicants the individuals
best suited for the vacant job.
4. Orientation
The process of familiarizing new employees with:
-the organization’s vision & mission
-their jobs, and
-their work unit
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 HRM Functions---Cont’d

5. Training & Development

 Employee Training: the process of improving the performance of
employees in their present jobs.
 Management Development: the growth of managers’ ability through
the provision of learning.
6. Compensation
The management of every type of reward that employees receive in
return for their services.
7. Performance Evaluation
A formal system of periodic review and evaluation of employees’ job
performance

8.Safety and Health

Safety: Protecting employees from injuries caused by work related
accident

Health: the employees freedom from illness and their general physical
and mental well-being 24
 HRM Functions---Cont’d

9.Promotion, transfer, demotion,& separation

High performers may be promoted or transferred to help them develop their
skills, while low performers may be demoted, transferred to less important
positions, or even separated

10. Human Resource Research

HR research is a systematic way of gathering recording, analyzing and
interpreting data for HRM decisions.

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 OBJECTIVES OF HRM

 Goal achievement
Achieve Social responsibility goal by creating employment
opportunities and meet social needs
 Structure maintenance
Facilitate working relationship among all members of the
organization

 Goal harmony
Creates harmony between organization goals and employees
personal goals.

 Productivity improvement
Develop employees through training and other opportunities

 Efficiency promotion
Ensures cost effective use of HRs 26
 Environment of HRM
Unions ENTEXTENAL ENVIRONMENT Society

Technology
INTERNAL ENVIRONMENT
Legal Considerations

Marketing Operations
ffing
Sta Hu

Unanticipated Events
m
De an
ve Res
lop ou
Emp Relatio

me rce
nt
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HRM
e an s
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ation
bo
Economy

p ens
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Other

Com

Shareholders
Finance Safety and Functional
Health Areas

Customers Competition Labor Market

 Internal Environment

Forces in the internal environment are controllable by management

Major internal environment:

• Organizational goals: Desired outcomes which provide frame of
reference for conducting HRM.

• HRM Policies: Provide guidelines for making HRM decisions

• Structure: Organization structure provides boundary for HRM

• Reward system: Ensures attraction and retention of quality human

resources
• Organization climate: Promotes or hinders mutuality of interests
between management and employees.
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 External Environment

Forces in the external environment are non-controllable by management

Major external environment:

• Technology: Level of technology and pace of technological change
impact HRM.
• Laws: Restrain or encourage HRM activities. HRM must conform to
laws.
• Labor unions: Mainly affect processing component of HRM system
through collective bargaining; strikes etc.
• Economic forces: Affect job market and reward system of employees.
• Socio-cultural forces: Provide status and value to jobs. They also affect
the practice and ways of doing jobs.

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