Lecture 1 - Introduction

Part 1 – Key definitions

 1. HRM definition

• Armstrong (1997), Human Resource Management can be

defined as “a strategic approach to acquiring, developing,
managing, motivating and gaining the commitment of the
organization's key resource – the people who work in and
for it.”

• HRM = how people should be managed to improve

organizational effectiveness
 Embrace your role as a
people manager

Do they have something in common?

HRM in sports
• Edwin Flippo defines- Human Resource Management as “planning,

organizing, directing, controlling of procurement, development,

compensation, integration , maintenance and separation of human

resources to the end that individual, organizational and social objectives

are achieved.”

• HRM is the process of hiring and developing employees so that they

become more valuable to the organization.

http://www.businessdictionary.com
HRM and the Bus?
 Jim Collins: The concept of First Whom then What

Activity: Getting the right people on your Bus

The bus 1: Aims to win an English Debate contest
in Hanoi;
The bus 2: Aims to win a running race in Hoian;
The bus 3: Aims to have the best people in the
class so that they can win any competition, contest

Drive your bus and getting the right people on the

bus
 HRM differentiation

Jim Collins
• Who first, then What
https://www.jimcollins.com/concepts/first-wh
o-then-what.html
 HRM and the Bus

• The Bus:
https://slingshotgroup.org/video/get-the-rig
ht-people-on-the-bus/
 Right people on the Bus

What could be the qualities of the people on the

bus?
List 6 top qualities, abilities for the right people they
want to get on the bus
1.
2.
3.
4.
5.
6.
 Right people on the Bus

List qualities, abilities for the right people

they want to get on the bus
• Clip: Jim Collins- 6 qualities of the people
on the bus
• https://www.youtube.com/watch?time_cont
inue=1&v=GDMAugj3m50&feature=emb_l
ogo
 Can a good company become a
great company?

Jim Collins and his team of researchers

come up with the answers after five years
11 companies made the leap from good to
great and then sustained those results for
at least 15 years.
How great was great? The good-to-great
companies averaged cumulative stock returns 6.9
times the general market in the 15 years after their
transition points. The actual screening-and-
selection process was a rigorous one.
The study began with a field of 1,435 companies and emerged with a
list of 11 good-to-great companies:
1. Abbott Laboratories,
2. Circuit City,
3. Fannie Mae,
4. Gillette Co.,
5. Kimberly-Clark Corp.,
6. the Kroger Co.,
7. Nucor Corp.,
8. Philip Morris Cos. Inc.,
9. Pitney Bowes Inc.,
10.Walgreens
11.Wells Fargo.
What is in the black box?
Breakthrough factors
 HRM differentiation

• #1. Who first, then What

• #2. Internal promotion
 HRM?

HRM is a what type of fruit or vegetable?

 Ways to Manage Human Resources-HR
basics

Cake business: Production, mkt, sale, $...

We need people
 Expansion:
What HR needs to do?
2. The Historical Evolution of HRM
• Slave: Humans as a commodity for trading, no human rights
• Authoritarian drive system: Industrialization mid 18th to early
19th century: Control production process, unquestioned
authority of supervisors
• Early 1900s: Scientifics management, one best way to do
the job. Taylorism, jobs broken down into standardized tasks
that unskilled workers can do (technical measure focus)
• Psychology, Human relations: Taylorism was followed by the
application of psychological principles to managing people:
more engagement, motivation, group dynamics (both
technical conditions and human conditions right)
 Development of HRM concepts

1940s:
1920s:
Personnel
Labor management
management:
Taylo-Productivity Focus on people-
productivity

1970s:
Key resource is
1980s:
people HRM
A shift from Personnel
management to HRM
The Evolution of HR
 3. Goals of HRM

The goals of HRM are to:

 Support the organization in achieving its objectives
 HRM strategies that are integrated with the business strategy
 Contribute to the development of a high performance culture;
 4. Underpinned theories of
HRM

• Commitment
The significance in HRM theory of organizational commitment (the strength of an individual’s
identification with, and involvement in, a particular organization) was highlighted in a seminal
Harvard Business Review article by Richard Walton (1985).
• Motivation
Motivation theory explains the factors that affect goal-directed behaviour and therefore influences
the approaches used in HRM to enhance engagement (the situation in which people are
committed to their work and the organization and are motivated to achieve high levels of
performance).
 4. Underpinned theories of
HRM

• The resource-based view

Resource-based theory expressed as ‘the resource-based view’ states that competitive
advantage is achieved if a firm’s resources are valuable, rare and costly to imitate. It is claimed
that HRM can play a major part in ensuring that the firm’s human resources meet these criteria.
• Organizational behaviour theory
Organizational behaviour theory describes how people within their organizations act individually or
in groups and how organizations function in terms of their structure, processes and culture. It
therefore influences HRM approaches to organization design and development and enhancing
organizational capability (the capacity of an organization to function effectively in order to achieve
desired results).
 4. Underpinned theories of
HRM

• Contingency theory
- Contingency theory states that HRM practices are dependent on the organization’s
environment and circumstances.
- Contingency theory is associated with the notion of fit – the need to achieve congruence
between an organization’s HR strategies, policies and practices and its business strategies
within the context of its external and internal environment. This is a key concept in strategic
HRM.
• Institutional theory
- Organizations conform to internal and external environmental pressures in order to gain
legitimacy and acceptance
 4. Underpinned theories of
HRM

• Human capital theory

- Human capital theory is concerned with how people in an organization contribute their
knowledge, skills and abilities to enhancing organizational capability and the significance of
that contribution.
• Resource dependence theory
- Resource dependence theory states that groups and organizations gain power over each
other by controlling valued resources. HRM activities are assumed to reflect the distribution
of power in the system.
 4. Underpinned theories of
HRM

• AMO theory
- The ‘AMO’ formula as set out by Boxall and Purcell (2003) states that performance is a
function of Ability + Motivation + Opportunity to Participate. HRM practices therefore impact
on individual performance if they encourage discretionary effort, develop skills and provide
people with the opportunity to perform. The formula provides the basis for developing HR
systems that attend to employees’ interests, namely their skill requirements, motivations and
the quality of their job.
• Social exchange theory
- Employees will reciprocate their contribution to the organization if they perceive that the
organization has treated them well.
 4. Underpinned theories of
HRM

• Transaction costs theory

- Transaction costs economics assumes that businesses develop organizational structures and
systems that economize the costs of the transactions (interrelated exchange activities) that
take place during the course of their operations.
• Agency theory
Agency theory states that the role of the managers of a business is to act on behalf of the owners
of the business as their agents. But there is a separation between the owners (the principals) and
the agents (the managers) and the principals may not have complete control over their agents.
 Right People

What could be the qualities of the people on

the bus?
• Group formation
• Finding your right teammates
• List of members; group name, choose a
type of fruit/vegetable/flower
• 10 minutes
The book: From Good to
Great