Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

TABLE OF CONTENTS
LEARNIN OB!ECTI"ES#####################################################################################2 1#1 INTRO$%CTION##############################################################################################2 1#2 &H' ST%$' H%MAN RESO%RCE MANA EMENT(##################################3 1#3 HISTORICAL $E"ELO)MENT OF H%MAN RESO%RCE MANA EMENT #* +HRM,################################################################################################################*
1#3#1 T-e Factor. S.stem##############################################################################################* 1#3#2 T-e Mass )ro/uct0on S.stem##############################################################################* 1#3#3 Contr01ut0ons o2 In/ustr0a3 4 Organ05at0ona3 )s.c-o3og.###################################6 1#3#7 T-e Human Re3at0ons Mo8ement#########################################################################6 1#3#* Contr01ut0ons o2 t-e Be-a80ora3 Sc0ences##########################################################6 1#3#6 Increase/ S9ec0a305at0on o2 HR Funct0ons##########################################################6 1#3#: Increas0ng Em9-as0s on Strateg0c Management################################################:

1#7 THE F%NCTIONS; )ROCESSES; AN$ THEIR INTER<RELATIONSHI)S OF ################################################################################################################################= HRM##################################################################################################################=

1#7#1 Ince9t0on################################################################################################################ = 1#7#2 Ma0ntenance##########################################################################################################> 1#7#3 Mot08at0on############################################################################################################ 1? 1#7#7 $e8e3o9ment########################################################################################################1?

1#* &HO IS RES)ONSIBLE FOR HRM(############################################################12 1#6 FACTORS AFFECTIN THE MANA EMENT OF AN OR ANI@ATIONAS ##############################################################################################################################13 H%MAN RESO%RCES###################################################################################13
1#6#1 Bus0ness Con/0t0on#############################################################################################13 1#6#2 Tec-no3og.########################################################################################################## 17 1#6#3 &orB2orce C-aracter0st0cs##################################################################################17 1#6#7 La1or LaCs########################################################################################################## 17 1#6#* %n0ons an/ %n0on05at0on####################################################################################17 1#6#6 Organ05at0onDs S05e#############################################################################################1* 1#6#: Organ05at0on Cu3ture###########################################################################################1* 1#6#= Organ05at0ona3 Structure####################################################################################1* 1#6#> Organ05at0ona3 Bus0ness Strateg.#####################################################################16

S%MMAR' ##########################################################################################################1: )RACTICE E%ESTIONS ####################################################################################1:

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

LEARNIN

OB!ECTI"ES

At the end o! this chapter# $ou %i&& 'e a'&e to: (e!ine %hat Human Resource Management )HRM* is Understand the importance o! stud$ing HRM ro+ide the historica& de+e&opment o! HRM Identi!$ the !unctions# processes# and their inter,re&ationships in HRM (escri'e the responsi'i&ities and ro&e o! HR Managers and -ine Managers %ith respect to HRM (escri'e the !actors that in!&uence HRM po&icies and practices.

1#1 INTRO$%CTION
/mp&o$ees %or0ing in an organi1ation are considered the most important resource that the organi1ation has 'ecause the$ are the ones that ensure the organi1ation gro%s and 'ecomes success!u&. -i0e an$ other resources in the organi1ation the$ need to 'e managed2 'ut un&i0e an$ other ph$sica& resources# emp&o$ees are human 'eings that has !ee&ings# !reedom o! thoughts and ma0ing choices# &i'ert$ to act# or not to act# in a certain m manner# etc. 3ecause emp&o$ees are considered uni4ue and +ita& organi1ationa& resources# the$ need to 'e managed proper&$. The !ie&d o! management that &oo0s into these aspects and acti+ities o! managing the emp&o$ees is 0no%n as human resource management. Human resource management )HRM*# !or man$ decades# represents the e5tension o! the area that %as 0no%n as personne& management. According to (e Cen1o and Ro''ins# human resource management can 'e de!ined as a process consisting o! inception# de+e&opment# moti+ation# and maintenance o! an organi1ation6s human resources. In a simp&er term# human resource management is the process o! attracting# moti+ating and retaining emp&o$ees. In order !or organi1ations to get emp&o$ees# e!!ort must 'e made to attract the right peop&e to come and %or0 !or them. 7nce the emp&o$ees 8oin the organi1ation# the$ must 'e a'&e to per!orm the re4uired tas0s. Their &e+e&s o! per!ormance depend on their 0no%&edge# s0i&&s and a'i&ities )9:A*# a+ai&a'i&it$ o! organi1ationa& !aci&ities and support as %e&& as their %i&&ingness to e5ert enough e!!ort to do the 8o'. There!ore# the organi1ation must ensure that emp&o$ees are not on&$ capa'&e o! per!orming the assigned tas0s 'ut are a&so moti+ated to do e5ce&&ent&$. Man$ organi1ations are !aced %ith di!!icu&ties in tr$ing to 0eep their emp&o$ees# especia&&$ the good ones. It is the responsi'i&it$ o! human resource management to ensure that emp&o$ees remain %ith the organi1ation !or &onger terms '$ creating conduci+e and satis!$ing %or0ing en+ironment. Retention programs such as emp&o$ee assistance# 4ua&it$ o! %or0 &i!e# emp&o$ee participation as %e&& as emp&o$ee re&ations programs are imp&emented to ena'&e peop&e remain %or0ing in the organi1ation !or as &ong as 'oth the emp&o$er and the emp&o$ee 'ene!it !rom this re&ationship.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#2 &H' ST%$' H%MAN RESO%RCE MANA EMENT(

There is a need to understand the ro&es and responsi'i&ities o! human resource management !or se+era& reasons. These reasons are as !o&&o%s: 1. 3$ understanding HRM# cost&$ personne& mista0es such as hiring the %rong person !or the 8o'# e5periencing high emp&o$ee turno+er# !inding peop&e not doing their 'est# and %asting time at use&ess inter+ie%s cou&d 'e a+oided. 2. ;or man$ decades such responsi'i&ities as se&ection# training# and compensation %ere considered 'asic !unction o! personne& management. These !unctions %ere per!ormed %ithout much regard !or ho% the$ re&ated to each other. The emergence o! human resource management represents the e5tension rather than the re8ection o! the traditiona& re4uirements !or managing peop&e e!!ecti+e&$. Ho%e+er# rather than restricting each !unction or responsi'i&it$ to 'e independent# HRM recogni1es the d$namic interaction o! personne& !unction %ith each other and %ith the o'8ecti+es o! the organi1ation. It recogni1es that manpo%er p&anning must 'e coordinated c&ose&$ %ith the organi1ation6s strategic and re&ated p&anning !unction. As a resu&t# e!!orts in HRM are 'eing directed to%ard pro+iding more support !or the achie+ement o! the organi1ation6s goa&s# %hether it is a pro!it# not,!or,pro!it# or go+ernmenta& organi1ation. <. eop&e ha+e a&%a$s 'een a centra& issue in organi1ations. And %hat more %ith the ad+ent o! in!ormation techno&og$ era# the rate o! gro%th and the increased in the emp&o$ment o! 0no%&edge,'ased %or0ers gain %ider attention. The success o! organi1ation increasing&$ depends on =peop&e,em'odied 0no%,ho%=# the 0no%&edge# s0i&&s# and a'i&ities em'edded in an organi1ation6s mem'ers. According to e5perts in the !ie&d o! HRM argue that the 0e$ to a !irm6s success is 'ased on esta'&ishing a set o! core com9etenc0es. Core competencies are a set o! integrated 0no%&edge %ithin an organi1ation that distinguish it !rom its competitors and de&i+er +a&ue to customers. Core competencies tend to 'e &imited in num'er# 'ut the$ pro+ide a &ong,term 'asis !or techno&og$ inno+ation# product de+e&opment# and ser+ice de&i+er$. >ith respect to de+e&oping human resources !or &ong,term core competencies and 'e competiti+e# organi1ation must 'e a'&e to meet the !o&&o%ing criteria ):herman# 3oh&ander and :ne&&# 1??"*: 0# T-e resource must 1e o2 8a3ue eop&e are a source o! competiti+e ad+antage %hen the$ impro+e the e!!icienc$ and e!!ecti+eness o! the compan$. @a&ue is increased %hen emp&o$ees !ind %a$s to decrease costs# pro+ide something uni4ue to customers# or some com'ination o! the t%o. /mpo%erment programs and tota& 4ua&it$ initiati+es )TAM* are intentiona&&$ designed to increase the +a&ue that emp&o$ees ha+e on the 'ottom, &ine. T-e resource must 1e rare eop&e are a source o! competiti+e ad+antage %hen their 0no%&edge# s0i&&s# and a'i&ities are e4ua&&$ a+ai&a'&e to competitors. Man$ companies in+est a great dea& to hire and train the 'est and the 'rightest emp&o$ees in order to gain ad+antage o+er their competitors. T-e resource must 1e /0220cu3t to 0m0tate eop&e are a source o! competiti+e ad+antage %hen others cannot cop$ their emp&o$ees6 capa'i&ities and contri'utions. Man$ companies are 0no%n !or creating uni4ue cu&tures that get the most !rom emp&o$ees )e.g.# through team%or0* and are di!!icu&t to imitate.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management 08# T-e resource must 1e organ05e/ eop&e are a source o! competiti+e ad+antage %hen their ta&ents can 'e com'ined and dep&o$ed to %or0 on ne% assignments at a moment6s notice. Team%or0 and co, operation are t%o per+asi+e methods !or ensuring an organi1ed %or0!orce.

These !our criteria high&ight the importance o! managing peop&e )human resources* and sho% the c&oseness o! HRM to strategic management. 3ecause emp&o$ee s0i&&s# 0no%&edge# and a'i&ities are among the most distincti+e and rene%a'&e resources upon %hich a compan$ can dra%# their strategic management is more important. As Thomas B. >atson# !ounder o! I3M# said# =Cou can get capita& and erect 'ui&dings# 'ut it ta0es peop&e to 'ui&d a 'usiness=.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#3 HISTORICAL $E"ELO)MENT OF H%MAN RESO%RCE MANA EMENT +HRM,

Historica&&$# HRM# as %e 0no% toda$# is a resu&t o! se+era& !actors that shaped this !ie&d o! stud$ as %e&& as the pro!ession. This section descri'es the de+e&opment o! human resource management as a discip&ine o! stud$ and as a pro!ession '$ tracing it !rom the era o! industria&i1ation. There are 'asica&&$ se+en historica& !actors that shaped human resource management# %hich are: 1. 2. <. D. 5. F. G. The ;actor$ :$stem The Mass roduction :$stem Contri'utions o! Industria& E 7rgani1ationa& s$cho&og$ The Human Re&ations Mo+ement Contri'utions o! the 3eha+iora& :ciences Increased :pecia&i1ation o! HR ;unctions Increasing /mphasis on :trategic Management

1#3#1 T-e Factor. S.stem

>ith the ad+ent o! the Industria& Re+o&ution in the 1? th Centur$ in /urope and America# the de+e&opment o! po%er,dri+en e4uipment and impro+ed production techni4ues sa% a radica& change !rom %hat had 'een done pre+ious&$ in sma&& shops and in homes. Concentration o! %or0ers in !actories presented man$ pro'&ems# especia&&$ in the area o! sa!et$ and %ea&th and in hours o! %or0 !or %omen and chi&dren. These conditions &ed to go+ernment in!&uence in the %or0 p&ace.

1#3#2 T-e Mass )ro/uct0on S.stem

Mass production# %ith its higher o+erhead cost and higher %age rates# !orced companies to 'e more e!!icient. ;rederic0 >. Ta$&or# o!ten regarded as the !ather o! :cienti!ic Management# de+e&oped a set o! princip&es to enhance %or0er producti+it$. The princip&es pro+ide a 'asis !or: 1. (etermining the 'est %or0 methods to: i. Impro+e e!!icienc$ ii. &ace the right emp&o$ee in the right 8o' iii. Teach emp&o$ee the right methods 2. /sta'&ishing time standards to: i. Appraise per!ormance ii. /&iminate unsatis!actor$ per!ormance iii. Re%ard superior per!ormance

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#3#3 Contr01ut0ons o2 In/ustr0a3 4 Organ05at0ona3 )s.c-o3og.

/ar&$ ps$cho&ogists# such as Hugo Munster'erg )a&so 0no%n as the !ather o! industria& ps$cho&og$*# contri'uted to the !ie&d '$ app&$ing ps$cho&ogica& princip&es to impro+ing emp&o$ee se&ection# training# and per!ormance e+a&uation and 8o' e!!icienc$. Mar$ ar0er ;o&&et# a socia& phi&osopher# ad+ocated peop&e,oriented organi1ations. Her %ritings !ocused on the use o! groups as opposed to a !ocus on the indi+idua& in the organi1ation. Thus# ;o&&et %as one o! the !orerunners o! toda$Hs team%or0 concept# and group cohesi+eness.

1#3#7 T-e Human Re3at0ons Mo8ement

/&ton Ma$o and his associates %ho are in+o&+ed in the Ha%thorne studies pro+ided the impetus !or the de+e&opment o! human re&ations mo+ement in the U:A in the &ate 1?20s. The researchers !ound that in!orma& %or0 groups had a signi!icant a!!ect on %or0er producti+it$. Iroup standards and sentiments %ere more important determinants o! a %or0erHs output than the %age incenti+e p&an. Human Re&ations Mo+ement recogni1ed the impacts o! indi+idua& di!!erences among emp&o$ees# interpersona& re&ations at %or0# in!orma& groups# communication# and attention to !ee&ings# &eadership techni4ues and emp&o$ee participation on %or0er per!ormance.

1#3#* Contr01ut0ons o2 t-e Be-a80ora3 Sc0ences

The %or0s o! McIregor# -i0ert# Arg$ris# Mas&o% and other ear&$ 'eha+iora& scientists contri'uted to the de+e&opment o! HRM. 3eha+iora& :cience is an e5tension o! human re&ations that: i. ii. iii. i+. +. In+o&+es an interdiscip&inar$ approach @ie%s the organi1ation as a d$namic s$stem Is concerned %ith the tota& organi1ationa& c&imate Is oriented to%ard 'oth economic and humanistic o'8ecti+es Retains concern !or emp&o$ee participation# group 'eha+ior# and interpersona& re&ations.

1#3#6 Increase/ S9ec0a305at0on o2 HR Funct0ons

Initia&&$ the management o! HR %as &imited to hiring# !iring# and record 0eeping J !unctions carried out '$ manageria& and super+isor$ personne& assisted '$ their c&erica& sta!!. >e&!are :ecretar$ %as one o! the !irst 8o's in+o&+ing actua& personne& %or0. 3$ 1?D0 the t$pica& personne& department %as organi1ed into specia&i1ed !unctions: sta!!ing# training# e+a&uation# compensation# and emp&o$ee re&ations. More recent&$ the !unctions in HRM 'ecome more specia&i1ed %ith an emphasis on human resource p&anning# recruitment# se&ection# p&acement# per!ormance management# compensation# training and de+e&opment# career de+e&opment# emp&o$er,emp&o$ee re&ations# and hea&th and sa!et$ in the %or0p&ace.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#3#: Increas0ng Em9-as0s on Strateg0c Management

Toda$Hs organi1ations are 'ui&ding their sustained competiti+e ad+antage '$ de+e&oping human resources as their core competencies. This has &ed to the emergence o! the !ie&d 0no%n as strategic human resource management. According to Truss and Iratton# strategic human resource management is de!ined as K. . . . the &in0ing o! HRM %ith strategic goa&s and o'8ecti+es in order to impro+e 'usiness per!ormance and de+e&op organi1ationa& cu&tures that !oster inno+ation and !&e5i'i&it$ . . .L . :trategic HR means accepting the HR !unctions as a strategic partner in the !ormu&ation o! the compan$Hs strategies# as %e&& as in the imp&ementation o! those strategies thorough HR acti+ities such as recruiting# se&ecting# training# and re%arding personne&. To 'e a'&e to per!orm these ne% ro&es and responsi'i&ities HR pro!essiona&s are e5pected to ha+e the !o&&o%ing competencies ):herman# 3oh&ander and :ne&&# 1??"*: 1# Strateg0c 1us0ness ca9a1030t0es The$ need to 0no% the 'usiness o! their organi1ation thorough&$. This re4uires an understanding o! its economic and !inancia& capa'i&ities so the$ can K8oin the teamL o! 'usiness managers. 2# EF9ert0se 0n HR 9ract0ces As the$ are the organi1ationH 'eha+iora& science e5perts# the$ must 'e competent in areas such as sta!!ing# de+e&opment# appraisa&# re%ards# team 'ui&ding# and communication. 3# A1030t. to manage c-ange The$ ha+e to 'e a'&e to manage change process so that HR acti+ities are e!!ecti+e&$ merged %ith the 'usiness needs o! the organi1ation. These re4uire interpersona& and pro'&em,so&+ing s0i&&s# as %e&& as inno+ati+eness and creati+it$. 7# )ersona3 cre/01030t. The$ must esta'&ish persona& credi'i&it$ in the e$es o! their interna& and e5terna& customers. Credi'i&it$ are earned '$ de+e&oping persona& re&ationships %ith customers# '$ demonstrating the +a&ues o! the !irm# '$ standing up !or oneHs o%n 'e&ie!s# '$ 'eing !air,minded in dea&ing %ith others.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#7 THE F%NCTIONS; )ROCESSES; AN$ THEIR INTER<RELATIONSHI)S OF HRM

>e %i&& use the de!inition gi+en '$ (e Cen1o and Ro''ins to descri'e the !unctions and processes in+o&+ed in human resource management. According to (e Cen1o and Ro''ins# there are !our most signi!icant !unctions that ha+e had an e!!ect on HRM. These are the inception# de+e&opment# moti+ation# and maintenance !unctions.

F0gure 1G ;our ;unctions That /!!ect HRM

1#7#1 Ince9t0on
The inception !unction in+o&+es e!!orts to 'ring in the right peop&e to 'ecome emp&o$ees o! the organi1ation. >hi&e recruiting is !re4uent&$ percei+ed as the initia& step in the inception !unction# there are se+era& other se4uences o! acti+ities that too0 p&ace 'e!ore recruitment. The graphic 'e&o% sho%s the se4uence o! acti+ities.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

F0gure 2G :e4uence o! Acti+ities In Recruitment

1#7#2 Ma0ntenance
The o'8ecti+e o! this !unction is to put into p&ace acti+ities that %i&& he&p retain producti+e emp&o$ees. There are three HRM !unctions o! maintenance# as discussed 'e&o%: 1# Bene20ts A/m0n0strat0on The acti+ities in+o&+ed in the 'ene!its administration inc&ude those that satis!$ emp&o$ee needs 'esides compensation inc&uding assisting emp&o$ees %hen the$ are sic0# or emp&o$ees need !or some time a%a$ !rom %or0. Caring !or emp&o$eesH %e&& 'eing has a ma8or e!!ect on their commitment. /mp&o$ee assistance programs# such as those that he&p emp&o$ees dea& %ith stress!u& &i!e situations# are needed. 2# Sa2et. an/ Hea3t/mp&o$ers must ensure that the %or0ing en+ironment is sa!e and hea&th$. Iuide&ines !or pro+iding sa!e and hea&th$ %or0 p&ace o!!ered '$ &egis&ation shou&d 'e adhered to. 3# Em93o.ee Re3at0ons-09s /mp&o$ee re&ation programs are designed to ensure that emp&o$ees are 0ept %e&& in!ormed a'out %hat is occurring around them# and to !oster an en+ironment %here emp&o$ee +oices are heard.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#7#3 Mot08at0on
/mp&o$ees not on&$ need to ha+e the appropriate s0i&&s# 0no%&edge# and a'i&ities to ade4uate&$ do the 8o' 'ut the$ a&so need to 'e moti+ated. An understanding o! moti+ation and its sources is important !or HRM pro!essiona&s. 3e&o% are the HRM !unctions o! moti+ation. 1# ReCar/ an/ Com9ensat0on A &in0 'et%een the compensation o!!ered to emp&o$ees and their per!ormance must a&so 'e esta'&ished. There!ore# compensation acti+it$ must 'e adapted to# and coordinated %ith# a pa$,!or,per!ormance p&an. 2# )ro/uct080t. En-ancement )rogram roper 8o' designs must 'e imp&emented to ensure that emp&o$ees are not on&$ moti+ated to do the 8o' 'ut are a&so producti+e. 3# $0sc0930ne an/ Counse30ng o&icies co+ering emp&o$ee discip&ine must 'e !air as it a&so a!!ects 8o' per!ormance. Thus# discip&inar$ and counse&ing s$stems shou&d 'e ade4uate to pro+ide organi1ation,%ide support !or ensuring high producti+it$.

1#7#7 $e8e3o9ment
Ne% emp&o$ees ma$ not tru&$ come into an organi1ation and immediate&$ 'ecome !u&&$ !unctioning. HRM p&a$s an important ro&e in shaping ne% emp&o$ees so that %ithin a short period o! time# the$ are !u&&$ producti+e. HRM em'ar0s !our areas in the de+e&opment phase to accomp&ish this# %hich are as discussed 'e&o%. 1# Em93o.ee Or0entat0on 7rientation is the process o! assisting ne% emp&o$ees in adapting to their ne% surroundings. It 'egins in the &ate stages o! the hiring process and ma$ continue !or man$ months a!ter an indi+idua& 'egins %or0ing. The !ocus o! the orientation is to orient the ne% emp&o$ee to the ru&es# regu&ations# and goa&s o! the organi1ation# department# and %or0 unit. 2# Tra0n0ng an/ $e8e3o9ment /mp&o$ee training is designed to assist emp&o$ees in ac4uiring 'etter s0i&&s !or the current 8o'. The ro&e that HRM p&a$s %i&& +ar$ depending on the si1e o! the organi1ation# the degree o! centra&i1ation in the emp&o$ee training# and the HRM specia&istHs a'i&it$. 7rgani1ations em'ar0 on emp&o$ee de+e&opment programs to ensure an appropriate supp&$ o! interna& candidates !or !uture needs. The !ocus here is to train emp&o$ees !or !uture positions '$ re4uiring them to ac4uire di!!erent sets o! s0i&&s# 0no%&edge# and a'i&ities %hi&e on their present 8o'. 7rgani1ation de+e&opment is the phase o! HRM that dea&s %ith !aci&itating s$stem, %ide change in the organi1ation. This in+o&+es changes in the +a&ues and attitudes o! emp&o$ees# and in some cases# the organi1ation structure# in order to ma0e the organi1ation more adapti+e to the e5terna& in!&uences.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management 3# Career $e8e3o9ment A process designed to he&p %or0ers manage their careers. HRM can assist emp&o$ees '$ guiding them ma0e proper decisions a'out their careers# 'ut must &ea+e the responsi'i&it$ to the indi+idua&s.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#* &HO IS RES)ONSIBLE FOR HRM(

3e!ore %e dea& %ith the a'o+e 4uestion# it is he&p!u& to distinguish 'et%een &ine and sta!! !unctions. -ine managers are in charge o! accomp&ishing the organi1ation6s 'asic goa&s# %hi&e sta!! managers are responsi'&e !or assisting and ad+ising &ine managers in accomp&ishing these 'asic goa&s. ;or e5amp&e# in manu!acturing companies# the &ine managers are usua&&$ the production managers %ho are responsi'&e !or the 4uantit$ and 4ua&it$ o! the output. In this case )as is usua&&$ the case*# the HR manager is responsi'&e !or ad+ising production manager in matters re&ating to recruitment# hiring# and compensation. Ho%e+er# this does not mean that &ine managers do not ha+e an$ human resource management responsi'i&ities. According to one e5pert# =the direct hand&ing o! peop&e is# and a&%a$s has 'een an integra& part o! e+er$ &ine manager6s responsi'i&it$# !rom president do%n to the &o%est &e+e& super+isor=. That means &ine managers are responsi'&e in imp&ementing such HRM po&icies as p&acing the right person on the 8o'# orientating ne% emp&o$ees# emp&o$ee training and de+e&opment# and protecting emp&o$ees6 hea&th and ph$sica& condition %ithin their +er$ o%n departments. In sma&& organi1ations# &ine managers ma$ carr$ out a&& HRM duties unassisted. >hat then %ou&d 'e the de!initi+e ro&es o! HRMM In &arge organi1ations# HR departments 'asica&&$ per!orm t%o 'asic !unctions: 1# Coor/0nators o2 HR act080t0es As coordinators# HR departments act as =the right arm o! the top e5ecuti+e to assure him that HRM o'8ecti+es# po&icies# and procedures %hich ha+e 'een appro+ed and adopted are 'eing consistent&$ carried out '$ &ine managers. 2# Ass0st0ng 30ne managers 0n 0m93ement0ng HR 9o30c0es As assistants# HR departments assist &ine managers in the hiring# training# e+a&uating# re%arding# counse&ing# promoting# and !iring o! emp&o$ees. It a&so administers +arious 'ene!it programs )e.g.# pension p&ans# and medica& 'ene!its*. HR department a&so acts as a cata&$st to%ard inno+ati+e organi1ationa& change and de+e&opment programs )such as Tota& Aua&it$ Management*.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#6 FACTORS AFFECTIN THE MANA EMENT OF AN OR ANI@ATIONAS H%MAN RESO%RCES

The !our ma8or !unctions in HRM# as descri'ed 'e!ore# do not e5ist in iso&ation. The$ are# rather# high&$ a!!ected '$ %hat is occurring outside and inside the organi1ation. These !actors shape ho% organi1ations manage their emp&o$ees. As such# organi1ations di!!er in their HRM po&icies and practices. The e5terna& !actors and the !our important interna& !actors a!!ecting HRM po&icies and practices are i&&ustrated in the !igure 'e&o%.

F0gure 3G Interna& and /5terna& ;actors a!!ecting HRM o&icies and ractices

1#6#1 Bus0ness Con/0t0on

(uring periods o! economic gro%th# man$ ne% 8o's are created to ta0e 0eep pace %ith the gro%ing demand !or products and ser+ices pro+ided '$ the companies. As such# companies compete !or &a'or# and to &ure potentia& emp&o$ees +arious t$pes o! incenti+es are o!!ered. This resu&ted in the esca&ation o! &a'or cost in the !orm o! emp&o$ee compensation and 'ene!its. Ho%e+er# during periods o! economic s&o%do%n# companies 'ecome more prudent and se+era& cost,cutting measures are ta0en inc&uding reducing production and austerit$ dri+es %hich resu&t in emp&o$ee retrenchment# and sa&ar$ cuts. (uring this time &a'or mar0et is considered &oose# as oppose to 'eing tight during e5panding economic periods.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#6#2 Tec-no3og.
Techno&ogica& change# %hi&e contri'uting to a rise in producti+it$# %i&& continue to shi!t emp&o$ment !rom some occupations to others. ;or e5amp&e# &a'or,intensi+e '&ue,co&&ar and c&erica& 8o's %i&& decrease %hi&e technica&# manageria&# and pro!essiona& 8o's %i&& increase. Bo's and organi1ationa& structures %i&& ha+e to 'e redesigned# ne% incenti+e and compensation p&ans instituted# ne% 8o' descriptions %ritten# and ne% emp&o$ee se&ection# e+a&uation# and training programs instituted J a&& %ith the he&p o! HR management. In!ormation techno&og$ has a&so hastened %hat e5perts ca&& the K!a&& o! hierarch$2L that is# managers depend &ess and &ess on $esterda$Hs stic0,to,the,chain,o!,command approach to organi1ing. ;or e5amp&e# %ith Kdistri'uted computingL e+er$ emp&o$ee %ith a persona& computer on his her des0 can tap into the !irmHs net%or0 and get needed in!ormation %ithout ha+ing to go up# o+er# and do%n through the organi1ation# and there!ore# 'rea0ing the hierarch$.

1#6#3 &orB2orce C-aracter0st0cs

The composition o! the %or0 !orce %i&& a&so impact human resource management. HR practices in a de+e&oping countr$ such as Ma&a$sia %ith mu&ti,cu&ture and re&ati+e&$ $oung %or0!orce tend 'e di!!erent !rom those in de+e&oped countries that ha+e a homogeneous %or0!orce. The Ma&a$sian &a'or !orce are represented '$ di!!erent ethnic groups %ith 55N 3umiputera# 2?N Chinese# 11N Indian# and a'out 5N !rom other ethnic groups. Companies# there!ore# need to recogni1e the di!!erent cu&tura& +a&ues and customs the$ 'ring to the p&ace o! %or0. Increasing&$# more %omen# and some are high&$ educated# has 'ecome a !ormida'&e group in the Ma&a$sian %or0 !orce. The need to accommodate their needs# !or e5amp&e# in chi&dcare and !&e5i'&e %or0 schedu&ing options# and greater attention to 8o' promotiona& opportunities ha+e to 'e addressed '$ HRM.

1#6#7 La1or LaCs

-a'or &a%s do shape the HRM po&icies and practices adopted '$ companies. There are a num'er o! &a%s that ha+e had a tremendous e!!ect on HRM in Ma&a$siaHs organi1ations. >e %i&& e5p&ore this critica& area in depth in the ne5t chapter.

1#6#* %n0ons an/ %n0on05at0on

-a'or unions e5ist toda$ to assist %or0ers in dea&ing %ith the management o! an organi1ation. As the certi!ied third part$ representati+e# the union acts on 'eha&! o! its mem'ers to secure %ages# hours# and other terms o! conditions o! emp&o$ment. Another critica& aspect o! unions is that the$ promote and !oster the Kgrie+ance procedure#L that is# a speci!ied process !or reso&+ing di!!erences 'et%een %or0ers and management. In man$ instances# this processes a&one constraint management !rom ma0ing uni&atera& decisions. ;or e5amp&e# emp&o$ers can not terminate emp&o$ees %hene+er the$ %ant. >hen a union is present and HRM practices are spe&&ed out in the negotiated agreement# emp&o$ers cannot !ir !or un8usti!ied reasons. 3ecause o! the comp&e5ities in+o&+ed in operating under the rea&m o! unioni1ation# a chapter on -a'or Unions in Ma&a$sia is de+oted to it.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#6#6 Organ05at0onDs S05e

Compared to &arge organi1ations )e.g.# those %ith more than 1#000 emp&o$ees*# sma&& companies ma$ not ha+e %e&& esta'&ished HRM po&icies# procedures and practices. Ne+erthe&ess# sma&&er companies do imp&ement a&& HRM !unctions 'ut %ith &esser !orma&it$ and the$ ma$ not e+en ha+e a separate department to hand&e HRM matters. In 'ig corporations# a specia&i1ed department ma$ hand&e each o! the HRM !unctions and a&& o! these departments report to a top management responsi'&e !or HR.

1#6#: Organ05at0on Cu3ture

The term organi1ationa& cu&ture re!ers to the 'asic assumptions and 'e&ie!s '$ mem'ers o! an organi1ation. These 'e&ie!s operate unconscious&$ and de!ine in a 'asic Kta0en !or grantedL !ashion an organi1ationHs +ie% o! itse&! and its en+ironment. The 0e$ e&ements o! organi1ationa& cu&ture are: 7'ser+ed 'eha+iora& regu&arities %hen peop&e interact# such as the &anguage used and the ritua&s surrounding de!erence and demeanor. The norms that e+o&+e in %or0ing groups# such as the norm !or a !air da$Hs %or0 !or a !air da$Hs pa$. The dominant +a&ues espoused '$ an organi1ation# such as product 4ua&it$ or &o% prices. The phi&osoph$ that guides an organi1ationHs po&ic$ to%ard emp&o$ees andEor customer. The ru&es o! the game !or getting a&ong in the organi1ation J Kthe ropesL that a ne%comer must &earn to 'ecome an accepted mem'er. The !ee&ing or c&imate that is con+e$ed in an organi1ation '$ the ph$sica& &a$out and the %a$ in %hich mem'ers o! the organi1ation %ith one another# customers and outsiders.

(i!!erent organi1ations do ha+e di!!erent cu&tures. :ome !irms# especia&&$ &arge ones# ha+e 'ureaucratic,t$pe o! cu&ture %here its emphasis is on hierarch$# centra&i1ation o! decisions# permanent emp&o$ment# and strict promotion,!rom,%ithin. This t$pe o! cu&ture is +er$ rigid and unresponsi+e to e5terna& e&ements. It is e5pected that organi1ations %ith this t$pe o! cu&ture ha+e +er$ c&ear and speci!ic po&icies and procedures go+erning e+er$ detai& aspects o! HRM. 7n the other e5treme o! the cu&ture continuum# organi1ations %ith an organic,t$pe o! cu&ture tend to 'e +er$ open and their emphasis is on harmon$# decentra&i1ation o! decisions and peop&e minded, st$&e# %ith 4ua&it$ o! products and ser+ices as their !ocus. HRM po&icies and practices in these t$pes o! organi1ations %ou&d 'e p&a$ing more o! the integrati+e and supporti+e ro&es rather than the K$ou,shou&d,!o&&o%,the,ru&es.L

1#6#= Organ05at0ona3 Structure

:ome HR po&icies and practices !it +er$ %e&& %ith high&$ !orma&i1ed organi1ations that are di+ided into !unctiona& areas )!or e5amp&e# mar0eting# !inance# production# and so on* and that concentrate decision ma0ing at the top. The HR po&icies appropriate !or this t$pe o! !irm inc&ude a contro& emphasis# centra&i1ed pa$ decisions# e5p&icit 8o' descriptions# and 8o','ased pa$. ;irms %hose organi1ationa& structures are &ess regimented %i&& 'ene!it !rom a di!!erent set o! HR po&icies# inc&uding in!orma& hiring and socia&i1ing o! ne% emp&o$ees# decentra&i1ed pa$ decisions# 'road 8o' c&asses# and indi+idua&,'ased pa$.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

1#6#> Organ05at0ona3 Bus0ness Strateg.

orter# and Mi&es and :no% !ormu&ated t%o %e&&,0no%n generic 'usiness strategies. orterHs Ieneric :trateg$ has identi!ied three t$pes o! 'usiness unit strategies# %hich are cost &eadership# di!!erentiation# and !ocus# that he&p a !irm cope %ith competiti+e !orces and outper!orm other !irms in the industr$. The !igure 'e&o% sho%s the orterHs Ieneric :trateg$.

F0gure 7G orterHs Ieneric :trateg$

Mi&es and :no% produce the other generic strateg$# %hich in+o&+e !our strategic t$pes: de!enders# prospectors# ana&$1ers# and reactors. 3oth o! these strategies ma$ 'e used to ana&$1e %hich HR po&icies and practices represent the 'est !it %ith a !irmHs 'usiness strateg$.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

F0gure *G Mi&es and :no%Hs Ieneric :trateg$

S%MMAR'
1. Human Resource Management )HRM* is the process o! attracting# moti+ating and retaining emp&o$ees. :peci!ica&&$# the process inc&udes sta!!ing# training and de+e&opment# appraisa&# compensation# emp&o$ee rights and discip&ine# industria& re&ations and hand&ing &ega& issues. 2. :tud$ing HRM is important 'ecause it is a'out managing the most important asset in organi1ations that ma0e the ma8or contri'utions to emp&o$ers. Improper HR management %ou&d &ead to &ega& imp&ications and ad+ersaria& emp&o$er,emp&o$ee re&ationships. <. HRM is 'asica&&$ shaped '$ se+en historica& !actors that 'egan %ith the ;actor$ :$stem# the Mass roduction :$stem# contri'utions o! Industria& E 7rgani1ationa& s$cho&og$# the Human Re&ations Mo+ement# contri'utions o! the 3eha+iora& :ciences# increased specia&i1ation o! HR !unctions and increasing emphasis on :trategic Management. D. HRM is made up o! D 'asic !unctions2 the inception# de+e&opment# moti+ation# and maintenance !unctions. /ach o! these !unctions has their o%n respecti+e processes. 5. HR Managers coordinate a&& HR acti+ities and the$ act as the right arm o! the top e5ecuti+e to assure him that a&& HRM po&icies are imp&emented and the$ are a&so responsi'&e to a ssist &ine managers in imp&ementing HR po&icies. F. HRM po&icies and procedures are in!&uenced '$ 'oth interna& )cu&ture# si1e# structure and 'usiness strateg$* and e5terna& )'usiness conditions# techno&og$# unionism# &a'or &a%s and %or0!orce characteristics* en+ironments o! the organi1ations.

)RACTICE E%ESTIONS
1. 2. <. D. /5p&ain the cha&&enges o! managing HR in organi1ations. (escri'e the imp&ications o! poor HR management in genera&. (iscuss ho% the di!!erent !unctions in HR are re&ated to each other. >hat are the !actors that in!&uence HRM.

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Course Name: Human Resource Management [BMB2113] Chapter 1: Introduction to Human Resource Management

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