Human Resource Management (Mgmt 1015) Lecture note

Prepared ByGetnet Hunegnaw Kebede

Lecturer, Management Department, College of Business and Economics, Bahir Dar University, Bahir Dar, Ethiopia

May 2016

Chapter One: Overview of HRM

Outlines of the chapter1.1 Definition of HRM1.2 Evolution of HRM1.3 Importance of HRM1.4 Objectives of HRM

Objectives of the chapterAfter completing this chapter, students should be able to:Define HRMDescribe the importance of HRMIdentify the objectives of HRM

What is Human Resource Management?

No single definition of HRM. Some of the the definitions include:

Human Resource Management emcompasses those activities designed to provide for and coordinate the human resources of an organization.Traditionally know as ”personnel administration” or ”personnel management”

1.1 Definition of HRM

Cont’d…HRM is the process of managing people in a company as well as managing the existing inter-personal relationships

According to Invancevich and Glueck : “HRM is concerned with the most effective use of people to achieve organizational and individual goals.”

Cont’d…According to Milkovich and Boudreau : “HRM is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organizations and the employees to achieve their objectives.”

Thus, HRM is a combination of people-oriented management practices that views employees as assets, not costs

What are the Features of Human Resource Management?

Features of Human Resource Management•A process•Pervasive •Action Oriented•People Oriented•Development Oriented•Integrating Mechanism•Comprehensive Function•Inter-disciplinary Function•Continuous Function

1.2 Evolution of HRMThe history of HR management goes back to the 19th century, when some industrial companies in the US and Europe employed welfare officers to look the wellbeing of workers. Its growth is in the following ways:1917-18: 1st formal personnel department created to deal with tight labor market, high turnover, waste and inefficiency, widespread strikes, union growth, government intervention, etc.

1920’s: HR used to “win” worker cooperation, through ensuring job security, benefits, etc.

Cont’d…

1930’-50’s: “Human Relations” recognizes that there are psychological and social influences to worker satisfaction, cooperation, performance.

1960’s: Work design, rather than communication and cooperation in groups, is the key to increase worker motivation. Small work group design leads to greater employee effort, group work provides opportunities for “self-actualization”; work is more interesting and fulfilling.

cont’d…1970’s: Quality of Work Life (QWL): emphasis on the value of human resources. PM becomes HRM.

1990’s-Present: TQM, reengineering, globalization, strategic HR, new technologies, diversity, holistic approaches to HR, and HRM models emerged.

1.3 Importance of HRMManagers at all levels must concern themselves with HRM because people in an organization is the most important resource.Thus, it is important for analyzing jobs, planning labor needs, selecting employees, orienting and training employees, managing compensation, communicating (which includes counseling and disciplining), maintaining employee commitment to perform organizational goals.

Cont’d…ensuring fair treatment; appraising performance; ensuring employee health and safety; building and maintaining good employee/labor relations; handling complaints and grievances; and ensuring compliance with human rights,

1.4 Objectives of HRMThe primary objective of HRM is to ensure the availability of competent and willing workforce to an organization. Specifically,We can classify the objectives into four major category as:

1) Societal Objectives: seek to ensure that the organization becomes socially responsible to the needs and challenges of the society.

2) Organizational Objectives: it recognizes the role of HRM in bringing about organizational effectiveness. The HR department exists to serve the rest of the organization.

3) Functional Objectives: is to maintain the department’s contribution at a level appropriate to the organization’s needs.

4) Personnel Objectives: it is to assist employees in achieving their personal goals to enhance the individual’s contribution. i.e. to maintain, retain and motivate.

Exercise Define HRM.Describe the importance of HRMExplain the objectives of HRM

CHAPTER TWOHUMAN RESOURCE MANAGEMENT

ENVIRONMENT

Outline of the chapter2.1 External Environment2.2 Internal Environment2.3 Models of HRM

Chapter objectives Up on the completion of this chapter, you are expected to:•Identify the different internal environments of human resource management.•List the different external environments. •Distinguish the different models of human resource management.

What are the different factors that affect HRM?

2. Context/ environment of HRMThe HRM practices in an organization are influenced by two broad categories of factors– External/Environmental factors and internal/Organizational factors.2.1 Internal/Organizational factors-emanate from the organization. It includes:1. Organization’s Strategy and objectives:growth rates, new product development, enlargement of market coverage, diversification

Cont’d…

2.Organizational culture and mgt philosophy-High Performing Culture

Low Performing Culture

Mgt philosophy(management assumption about human behavior) and leadership style 3. Organizational size and structurelevel of centralization and decentralization 4. Organizational Financial Positionfinancial strength to pay better and attract qualified employees

Cont’d…5. Work force factors: the demand for human resources is affected by retirements, terminations, death, leaves of absence, lateness, rate of maternity leave, sick leave, etc. Organization of6. The nature of the jobs & tasks: - the simplicity/ complexity of the tasks in the job

2.2 External /Environmental factors-are outside the control of an organization• Economic Environment-Economic conditions affect supply and demand for products and services. i.e. Healthy or downturn economic condition impacts on labor force-employment rate either high or low•Labor Market Conditions-availability of mkt for labor either local or international

Cont’d… •Legal Environment-acts of parliament; and contract law, which governs collective agreements and individual employment contracts, mandatory payments such as workers’ compensation, employment insurance, pension plans.• Technological Environment-robotics and computer-aided design/ computer-aided manufacturing, have eliminated many blue-collar jobs, replacing them with fewer but more highly skilled jobs.•

Cont’d…Socio-cultural Environment/demographic trend and workforce diversity-population growth, age, educational level, values, etc.Labor union-govern wages, benefits, working conditions, and job security.Globalization-integration: numbers of multinational corporations—firms that conduct a business outside the country

2.3 Human Resource Management ModelsThe following are the common school of models/thoughts: 1. Harvard Model: The model outlines four HR policy areas:Human resource flows: recruitment, selection, placement, promotion, appraisal and assessment, promotion, termination, etc. Reward systems: pay systems, motivation, etc.

Cont’d...Employee influence: delegated levels of authority, responsibility, power.Work systems: design of work and alignment of people.These in turn lead to the 'four C's' of HR policies that have to be achieved.•Commitment •Congruence /unity•Competence •Cost effectiveness

2. Guest’s Model: This model is identified by David Guest’s (1997). It has six dimensions:•HRM strategy•HRM practices•HRM outcomes•Behavior outcomes•Performance outcomes•Financial outcomes

3. Best Practice Model This model is based on the assumption that there is a set of best HRM practices that are universal in the sense that they are best in any situation. These are•employment security/safety;•selective hiring;•self-managed teams;•high compensation;• provision of training and motivated workforce;•reduction of status difference;•Sharing of information.

4. Soft and Hard model of HRM

Soft HRM (high commitment and employee oriented) emphasizes the importance of high commitment, learning/training, leadership; human resources are valuable assets, not variable costs.

Hard HRM (low commitment and task oriented model) on the other hand emphasizes with cost control and different strategies, especially in business processes like downsizing, lowering the wages, shortening comfort breaks, etc. (Storey, 1989).

5. Patterson’s Model: According to this model, human resource practice can improve organizational performance by:•Increasing employees skill and ability•Promoting positive attitude and increasing motivation,•Providing employees with expanded responsibilities so that they make full use of their skills and abilities.

6. Best Fit/Contingency Model: The model is also known as Michigan model or the 'matching model'.

The model has a harder, less humanistic edge, holding that employees are resources in the same way as any other resources and have to be managed in a similar manner as equipment and raw materials

Exercise State the different models of HRMExplain the external /environmental factors of HRMList the internal /organizational factors of HRM

CHAPTER THREEJOB ANALYSIS AND HUMAN RESOURCE

PLANNING

Outlines of the chapterDefinition of job analysisSteps of job analysisWays of collecting job analysis informationMeaning of human resource planning Importance of human resource planning Steps in human resource planningFactors affecting human resource planning

Chapter objectives Up on the completion of this chapter, you are expected to:•Define job analysis•Identify the steps of job analysis•Discuss the meaning of human resource planning•Explain the importance of human resource planning •Distinguish factors affecting human resource planning •List human resource planning processes

What is job analysis?

3.1 Definition of Job AnalysisJob Analysis is the procedure through which you determine the duties of the positions to be staffed and the characteristics of people who should be hired for them. The analysis produces information used for developing job descriptions and job specifications.

Cont’d…Job analysis should provide information such as •Job title. • Department. • Supervision required. • Job description•Types of material and equipment used. •Educational qualification and experience requirements. • Mental and physical requirements. • Working conditions (inside, outside, hot, cold, dry, wet, noisy, dirty, etc.).

3.1.1Steps in Job AnalysisAnalyzing a job requires the following six steps. These are: 1.Determine the use of job analysis information2.Collection of background information3.Selection of jobs for analysis4.Collection of job analysis data5.Processing the information6.Develop a job description and job specification

Cont’d…Job description is a written statement/outline that describes the activities and responsibilities of the job. It includesJob identificationJob summaryDuties and responsibilitiesRelation to other jobsmaterials used Working conditionsSocial environment

Cont’d…On the other hand, job specification is a statement of the minimum required human qualities /qualification. It includes:Physical characteristicsPsychological and social characteristicsMental Characteristics Personal Characteristics

3.1.3 Methods of collecting job analysis information The most common methods areInterview-individual, group and supervisoryGuidelines of interviewCooperation between job analyst and supervisorMaking rapport with intervieweeFollow a structured guide/check listPrepare alternative checklist for non regular/not frequent activitiesReview and verify the data

2.Questionnaire- quick and efficient for large respondents3. Observation- useful for observable physical activity and not appropriate for non-measurable mental activity. 4. Participant Diary/Logs-keep a diary/log or list of what they do during the day.

3.1.4 Importance of job analysis informationThe major importance of job analysis information . It is used for:

Performance AppraisalCompensationRecruitment and SelectionTrainingEnsure Complete Assignment of DutiesKnow the gapetc

3.1.5 Potential problems with job analysis The major problems that affect job analysis are:•Lack of top management support.•Only a single way and source are used for gathering data •Supervisor and jobholder do not participate in design of job analysis procedure.•No training or motivation exists for jobholders•Employees are not allowed sufficient time to complete the analysis•Activities may be distorted•Lack of skills, experience•Lack of information•Participants fail to critique the job •etc

3.4 Human Resource PlanningThe process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.- HRP is a process- It involves determination of needs- It also takes into account the manpower availability at a future period.

3.2.2.2 Importance of HRPHRP is important for a nation, organization and employees.1. National importance of HRP-used to adjust different policies such as agriculture, industry, education, population, etc.2. Organizational importance- used to anticipates the required kind and number of employees Anticipate the compensationAvoid disruptionOffset/reduce uncertaintyPromote equal employment opportunityCoordinate different activities such as recruitment, selection, training, etc.

3. Employee importanceCreates more satisfied and better-developed employees through training, development, transfer, promotion,Gain better compensationReduce absenteeism, turn over, lay offs

3.2.3 Steps of HRPThe process of HRP broadly involves the following steps.1. Estimating the demand for human resource2. Estimating the supply of human resource3. Identify the gap/Estimating the net HR requirement4. Developing and implementing action plan to fill the gap between demand and supply.

3.2.4 Factors affecting HRPThe major factors that affect HRP areType and strategy of the organizationOrganizational growth cycles and planning Environmental uncertaintiesTime horizons-short/long term Type and quality of forecasting informationNature of jobs being filledOutsourcing/off loading work

The end!