Chapter 1

Introduction to Human
Resource Management
Reference Books:
Human Resource Management ( Gary Dessler)
Human Resource Management (Mondy)
Human Resources and Personnel Management ( Keith Davis)
 Internet

Resource Person: Muhammad Faisal

 What is Management?

A set of activities (Planning,

organizing, leading, and controlling)
directed at an organization’s resources
(human, financial, physical, and
information) with the aim of achieving
organizational goals in an efficient and
effective manner.
 The Management

HUMAN Planning PHYSICAL

RESOURCES RESOURCE
S
ng
ll i
ro

ORGANIZATIONAL
nt
Co

g
GOALS

zin
ni
ga
Or
INFORMATION Leading FINANCIA
RESOURCES L
RESOURCE
S
 Management in Organizations

Planning
and decision Organizing
making
Inputs from the environment
• Human resources Goals attained
• Financial resources • Efficiently
• Physical resources • Effectively
• Information resources

Controlling Leading
 HRM
Human
Resource
Management
 Human Resource Management
Managerial function that
tries to match an
organization’s needs to the
skills and abilities of its ssible,
s po ”.
employees. a k e th in g
s h ap pe n
ts m hi n g
s e e t
“As le mak
peo p
 Human Resource Management
 Human Resource Management (HRM) is the
approach of Management of an organization's most
valued assets - the people working there who
individually and collectively contribute to the
achievement of the objectives of the business. In
simple sense, HRM means employing people,
developing their resources, utilizing, maintaining
and compensating their services in tune with the job
and organizational requirements to achieve its goals
effectively & efficiently.
Organizational Performance

 Efficiency: A measure of how well resources

are used to achieve a goal
“Doing Things Right”

 Effectiveness: A measure of the

appropriateness of the goals chosen (are these
the right goals?), and the degree to which they
are achieved
“Doing the Right Things Right”
Efficiency versus Effectiveness

Efficiency: Effectiveness:
Operating in Doing the right
such a way Successful things in the
that resources Management right way at
are not wasted the right times
 Functions of HRM
 Determining the nature, functions of each employee’s job
 Planning HR 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
 Why Is HRM Important to All Managers?
Some Common Consequences Caused by
Poor HRM Practices
 Hire the wrong person for the job
 Experience high turnover/dissatisfaction
 Have your people not doing their best
 Employees will not know that what to do & how to do
 Have your company in court because of
discriminatory/unlawful actions
 Have some employees think their salaries are unfair and
inequitable internally & externally
 Allow a lack of training to undermine your department’s
effectiveness
 Commit any unfair labor practices
Successful HRM
Good for…
Organization
Employee
Society
 HR as
Competitive Advantage Competitive Advantage

 Competitive  There is greater

advantage means recognition that
“any factors that allow distinctive competencies
an organization to are obtained through
differentiate its highly developed
product or service employee skills,
from those of its distinctive organizational
competitors to cultures, management
increase market processes, and systems.
share”
Effective Effective
HRM Organization
 Functions of HRM

1.Staffing

5.Employee 2.Human
& Labor Resource
Relations Functions Development
of HRM

4.Safety & 3.Compensation

Health & Benefits
 1. Staffing
 Process through which an organization ensures that it
always has the proper number of employees with the
appropriate skills in the right jobs at the right time to
achieve the organization’s objectives.
 It includes
• Personnel planning
• Job Analysis
• Recruitment
• Selection
 2.Human Resource Development
 Major Personnel function that consist not only of
T&D but also individual career planning,
developing activities and performance appraisal.
 HRD is composed of
• Training
• Development
• Career planning
• Career Development
• Performance Appraisal
 3.Compensation & Benefits
 Consist of all direct, indirect, financial & non
financial rewards given to employees in return of
their services.
• Pay - Money that a person receives for performing a
job
• Benefits – Additional Financial rewards in addition
to base pay including paid vocations, sick leave,
insurance etc.
• Non financial Rewards
 The Job
 The Environment
 4. Safety & Health
 Safety involves protecting employees from injuries
caused by work related accidents. Health refers to
employee’s freedom from physical or emotional
illness.
5. Employee & Labor Relation
 Deals with employee employer relationship &
dealing with labor unions
 Managing Human Resources
 Purpose of HRM is;
To attract
 To Develop
 To Motivate and
 To Keep talented people
To achieve goals
Challenges?
 Environment (Challenges) of HRM
EXTERNAL ENVIRONMENT Labor Force
Legal consideration
INTERNAL ENVIRONMENT
Mkt OPS
The Economy

Society
Employee Human
& Labor Staffing
Resource
Relations Development

Budget downsizing
HR Management

Brain drain
Functions
technology

Safety Compensation
& Benefits
& Health
Fin. Turn over OFA

Customer Competition Share holder Unions

 The External Environment
Components
 Labor Force  Competition
 legislation  Customers
 Society ( Social  Technology
Responsibility)  Economy
 Unions  Brain-drain
 Stakeholders  Rapid change

Open System- An open system is one that is effected by environments

Firm has little control over external factors
 •Labor Force- it’s the pool of individuals who are
willing to work for a company.

This map
shows the global
distribution of labor
force in 2006 as
a percentage of
the top market
(China - 795,300,000).
 Legislation
• The Government regulation related to
HR & labor force
• Employment laws
 Laws and Regulations
• for safety
• Minimum wage rate
• EEO
• Working hours
• Immigrants
• Child Labor
• Women
 International Dimension/ Globalization
 The extent to which an
organization is involved in
or affected by business with
other countries.
 The internationalization of
products and services of a
firm heavily influence
organizational HR decisions.
 Economic Environment
 The overall strength & vitality of the
economic system in which organization
operates. Factors that affect buying power
and spending patterns of organization &
its customers/suppliers.
 Trends of interest:
 Inflation
 Interest Rates (12.5 %)
 Employment ratios (estimated: 15.20 % in 2010)
 Per Capital Income
 Purchasing power of customers
 Stage of Business/Economic Cycle (prosperity,
recession, depression and recovery)
 The Internal Environment
 Limited budgets
 Trends of Downsizing
 Workforce Diversity
 High Turn over- is the rate at which an employer gains
and loses employees or the rate of traffic through the
revolving door."
 Restructuring-the act of reorganizing the legal,
ownership, operational, or other structures of a company for
the purpose of making it more profitable, or better
organized for its present needs.
 Internal Unions
 Proactive Versus Reactive

 Reactive Response: Action taken in

response to change
 Proactive Response: Action taken in
anticipation of change