Notes-1 Human Resource Management (PU-MCOM) By Dr.

Saqib Rehman

INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

WHAT IS HUMAN RESOURCE MANAGEMENT?
Human Resource Management is a function within an organization concentrated on recruiting, managing and
directing people who work in it. Human Resource Management deals with issues related to compensation,
performance management, organization development, safety, wellness, benefits, employee motivation, training and
others. HRM plays a strategic role in managing people and the workplace culture and environment. If effective, it can
contribute greatly to the overall company direction and the accomplishment of its goals and objectives.

Human resource management is the process of acquiring, training, appraising, and compensating employees, and of
attending to their labor relations, health and safety, and fairness concerns. The topics we will discuss should therefore
provide you with the concepts and techniques you need to perform the people or personnel aspects of your
management job. These include:

* Conducting job analyses (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 about:
* Equal opportunity and affirmative action
* Employee health and safety
* Handling grievances and labor relations

WHY IS HUMAN RESOURCE MANAGEMENT IMPORTANT TO ALL MANAGERS?

Importance of HRM
These concepts and techniques important to all managers for several reasons. First, having a command of this
knowledge will help you avoid the sorts of personnel mistakes you don t want to make while managing. For example,
no manager wants to:
* Hire the wrong person for the job
* Experience high turnover
* Have your people not doing their best
* Waste time with useless interviews
* Have your company taken to court because of your discriminatory actions
* Have your company cited under federal occupational safety laws for unsafe practices
* Have some employees think their salaries are unfair relative to others in the organization
* Allow a lack of training to undermine your department s effectiveness
* Commit any unfair labor practices

Line Managers Human Resource Duties

However, line managers still have many human resource duties. This is because the direct handling of people has
always been part of every line manager s duties, from president down to first-line supervisors.
For example, one major company outlines its line supervisors responsibilities for effective human resource
management under these general headings:
1. Placing the right person in the right job
2. Starting new employees in the organization (orientation)
3. Training employees for jobs that are new to them
4. Improving the job performance of each person
5. Gaining cooperation and developing smooth working relationships
6. Interpreting the company s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
Notes-1 Human Resource Management (PU-MCOM) By Dr. Saqib Rehman

10. Protecting employees health and physical condition

In small organizations, line managers may carry out all these personnel tasks unassisted. But as the organization
grows, they need the assistance, specialized knowledge, and advice of a separate human resource staff. The human
resource department provides this specialized assistance.

Human Resource Manager s Duties

In providing this specialized assistance, the human resource manager carries out three distinct functions:
1. A line function. The human resource manager directs the activities of the people in his or her own department, and
perhaps in related areas (like the plant cafeteria).
2. A coordinative function. The human resource manager also coordinates personnel activities, a duty often referred to
as functional authority (or functional control). Here he or she ensures that line managers are implementing the firms
human resource policies and practices (for example, adhering to its sexual harassment policies).
3. Staff (assist and advise) functions. Assisting and advising line managers is the heart of the human resource manager
s job. He or she advises the CEO so the CEO can better understand the personnel aspects of the company s strategic
options. HR assists in hiring, training, evaluating, rewarding, counseling, promoting, and firing employees. It
administers the various benefit programs (health and accident insurance, retirement, vacation, and so on). It helps line
managers comply with equal employment and occupational safety laws, and plays an important role in handling
grievances and labor relations.
The size of the human resource department reflects the size of the employer.
* Recruiters. Search for qualified job applicants.
* Equal employment opportunity (EEO) coordinators. Investigate and resolve EEO grievances; 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.

EVOLUTION OF HUMAN RESOURCE MANAGEMENT

A number of academics and practitioners in the past have contributed a great deal to the development of HRM. The
history of its development goes back to the early management pioneers, Robert Owen (1771 – 1858) and Charles
Babbage (1792 – 1871). Similarly, other developments such as the industrial revolution, the principles of scientific
management, the classical organization theory and more recently, the behavioral science movement and the
organization development movement have influenced the development of personnel management and HRM.

The trend of the development of HRM in the past can be explained through following periods.
Early Scientific Management
Scientific Management
Human Relations Movement
The New HRM Era

Early Scientific Management

The history can be traced back to the Origin of Personnel Management. In the beginning of 18th century, many
masons, carpenters, leather workers and people of other crafts organized themselves into guilds. In the later part of
century, the Welfare Concept was developed by some prominent family business houses in the UK. Industrial
Revolution started from the late 18th century. Labor was treated as commodity to be bought or sold. There was strict
system of punctuality and rigorous working rules.

Scientific Management
F.W. Taylor invented principles of scientific management in the 19th century. He suggested to plan work and gave
methods to maximize productivity and minimize inefficiencies. In his studies, he explained less about humanization
of workplaces and focused more on output from the workers.

Human Relations Movement

Elton Mayo and Fritz Roethlisberger investigated the causes of low productivity different from Taylor’s perspective.
The Hawthorne studies (1927 – 1932) laid the foundation for the human relations movement and explain why human
elements are important to rise productivity.
Notes-1 Human Resource Management (PU-MCOM) By Dr. Saqib Rehman

The HRM Era

It was by 1920s, personnel management began to taught at university level in US. At the period of 1920s, a number of
large companies established personnel departments. During 1930 – 1950, many instances of exploitation of labor
appeared. Subsequently, a labor relations movement in the form of Labour Unions and collective bargaining emerged
and remained successful during 1935 – 1960. Personnel department started to work in collaboration with union
representatives.

The HRM era, began in 1950s, comprises the work of pioneers, human capital concept, concept of corporate culture
and the new HRM. Traditional American personnel management and industrial relation systems were challenged by
the process of globalization, rapid technological advances, shorter product lifecycles and changing customers and
investors demands. Many US industries were facing the under-utilization and unemployment of human resources. The
reasons for such problems were: adverse union-management relations, low employee motivation & trust in
management, hierarchical management and restrictive work practices.

Promoted by this challenges, American business has begun to place greater emphasis on the management of human
resources to improve productivity and quality and thus to be competitive internally and externally. In academic
literature, at least, the terms ‘personnel management’ and ‘personnel administration’ have been virtually replaced by
the term ‘HRM’. In UK, the concept of HRM arrived around 1985 – 86, when the British industry was suffering from
restructuring effects due to recession & loss of competitiveness. Anti-union legislation of the Thatcher government
encouraged firms to introduce new labor practices and re-order their collective bargaining arrangements.

TRENDS IN HUMAN RESOURCE MANAGEMENT

Globalization and Competition Trends

Globalization refers to the tendency of firms to extend their sales, ownership, and/or manufacturing to new markets
abroad. Examples surround us. Toyota produces the Camry in Kentucky, while Dell produces PCs in China. Free
trade areas agreements that reduce tariffs and barriers among trading partners further encourage international trade.
NAFTA (the North American Free Trade Agreement) and the EU (European Union) are examples.

Companies expand abroad for several reasons. Sales expansion is one. Walmart is opening stores in South America.
Dell, knowing that China will soon be the world’s biggest market for PCs, is aggressively selling there. Firms go
abroad for other reasons. Some manufacturers seek new foreign products and services to sell, and to cut labor costs.
Thus, some apparel manufacturers design and cut fabrics in Miami, and then assemble the actual products in Central
America, where labor costs are relatively low. Sometimes, its the prospect of forming partnerships that drives firms
to do business abroad. When IBM sold its PC division to the Chinese firm Lenovo, it did so partly to cement firmer
ties with the booming China market.

For business people, globalization means more competition, and more competition means more pressure to be world-
class to lower costs, to make employees more productive, and to do things better and less expensively. As one expert
puts it, the bottom line is that the growing integration of the world economy into a single, huge marketplace is
increasing the intensity of competition in a wide range of manufacturing and service industries. Both workers and
companies have to work harder and smarter than they did without globalization. Globalization therefore brings both
benefits and threats. For consumers it means lower prices and higher quality on products from computers to cars, but
for workers it means the prospect of working harder, and perhaps less secure jobs.

Job offshoring having employees abroad do jobs that Americans formerly did illustrates this threat. For example, in
the next few years, many employers plan to offshore even highly skilled jobs such as sales managers, general
managers and HR managers.

Indebtedness (Leverage) and Deregulation

Other trends contributed to this economic growth. Deregulation was one. In many countries, governments stripped
away regulations. In the United States and Europe, for instance, the rules that prevented commercial banks from
expanding into stock brokering were relaxed. Giant, multinational financial supermarkets such as Citibank quickly
emerged. As economies boomed, more businesses and consumers went deeply into debt. Homebuyers bought homes,
often with little money down. Banks freely lent money to developers to build more homes.
Notes-1 Human Resource Management (PU-MCOM) By Dr. Saqib Rehman

Technological Trends

Everyone knows that technology changed almost everything we do. We use smartphones and iPads to communicate
with the office, and to plan trips, manage money, and look for local eateries. We also increasingly use technology for
many human resource management type applications, such as looking for jobs. Facebook recruiting is one example.
According to Facebooks Facebook recruiting site, employers start the process by installing the Careers Tab on their
Facebook page. Once installed, companies have a seamless way to recruit and promote job listings from directly
within Facebook. Then, after creating a job listing, the employer can advertise its job link using Facebook
Advertisements.

Technology has also had a huge impact on how people work, and therefore on the skills and training today s workers
need. High-tech jobs: For example, skilled machinist Chad Toulouse illustrates the modern blue-collar worker. After
an 18-week training course, this former college student works as a team leader in a plant where about 40% of the
machines are automated. In older plants, machinists would manually control machines that cut chunks of metal into
things like engine parts. Today, Chad and his team spend much of their time keying commands into computerized
machines that create precision parts for products, including water pumps. Service Jobs: Technology is not the only
trend driving the change from brawn to brains. Today over two-thirds of the U.S. workforce is producing and
delivering services, not products. Between 2004 and 2014, almost all of the 19 million new jobs added in the United
States will be in services, not in goods producing industries.

Knowledge Work and Human Capital: In general, the best jobs that remain require more education and more skills.
For example, we saw that automation and just-in-time manufacturing mean that even manufacturing jobs require more
reading, math, and communication skills. Human capital refers to the knowledge, education, training, skills, and
expertise of firm workers. Today, as management guru Peter Drucker predicted years ago, the center of gravity in
employment is moving fast from manual and clerical workers to knowledge workers. Human resource managers now
list critical thinking/problem-solving and information technology application as the two skills most likely to increase
in importance over the next few years.

Workforce and Demographic Trends

All of this is occurring along with big changes in workforce and demographic trends, and at the same time,
demographic trends are making finding and hiring employees more challenging. GENERATION Y, Also called
Millennials, Gen Y employees are roughly those born 1977-2002. They take the place of the labor forces previous
new entrants, Generation X, those born roughly 1965-1976 (and who themselves were the children of, and followed
into the labor force, the Baby Boomers, born just after the Second World War, roughly 1944-1960). Although every
generation obviously has its own labor force entrants, Gen Y employees are different. For one thing, says one expert,
they have been pampered, nurtured, and programmed with a slew of activities since they were toddlers, meaning they
are both high-performance and high-maintenance. As a result:
1. They want fair and direct supervisors who are highly engaged in their professional development.
2. They seek out creative challenges and view colleagues as vast resources from whom to gain knowledge.
3. They want to make an important impact on Day 1.
4. They want small goals with tight deadlines so they can build up ownership of tasks.
5. They aim to work faster and better than other workers.

Retirees: Many human resource professionals call the aging workforce the biggest demographic trend affecting
employers. The basic problem is that there are not enough younger workers to replace the projected number of baby
boom era older-worker retirees.
Nontraditional Workers: At the same time, there has been a shift to nontraditional workers. Nontraditional workers
include those who hold multiple jobs, or who are contingent or part-time workers, or who are working in alternative
work arrangements (such as a mother daughter team sharing one clerical job).
Workers From Abroad: With retirements triggering projected workforce shortfalls, many employers are hiring
foreign workers for U.S. jobs. The country s H-1B visa program allows U.S. employers to recruit skilled foreign
professionals to work in the United States when they cannot find qualified U.S. workers.
Notes-1 Human Resource Management (PU-MCOM) By Dr. Saqib Rehman

Economic Challenges and Trends

Banks and other financial institutions (such as hedge funds) found themselves with trillions of dollars of worthless
loans on their books. Governments stepped in to try to prevent their collapse. Lending dried up. Many businesses and
consumers simply stopped buying. The economy tanked. Economic trends will undoubtedly turn positive again,
perhaps even as you read these pages. However, they have certainly grabbed employers’ attention. After what the
world went through starting in 2007-2008, it’s doubtful that the deregulation, leveraging, and globalization that drove
economic growth for the previous 50 years will continue unabated. That may mean slower growth for many countries,
perhaps for years. This means challenging times ahead for employers. The challenging times mean that for the
foreseeable future and even well after things turn positive employers will have to be more frugal and creative in
managing their human resources than perhaps they have been in the past.

NEW APPROACHES TO ORGANIZING

Employers are also offering human resource services in new ways. For example, some organize their HR services
around four groups: transactional, corporate, embedded, and centers of expertise.
The transactional HR group uses centralized call centers and outsourcing arrangements (such as with benefits
advisors) to provide support for day-to-day transactional activities (such as changing benefits plans and employee
assistance and counseling). In one survey, about 75% of respondents said their firms were providing transactional,
administrative human resource services through such arrangements.
The corporate HR group focuses on assisting top management in top level big picture issues such as developing and
explaining the personnel aspects of the company s long-term strategic plan.
The embedded HR unit assigns HR generalists (also known as relationship managers or HR business partners)
directly to departments like sales and production. They provide the localized human resource management assistance
the departments need.
The centers of expertise are like specialized HR consulting firms within the company for instance, they provide
specialized assistance in areas such as organizational change.