MANAGING HUMAN RESOURCES

ARSI UNIVERSITY By: Abebe Shawul (PhD)

E-mail: [email protected]
MBA PROGRAM
COURSE CONTENTS
1. An Overview of Human Resource Management
2. Strategic Human Resource Planning
3. Recruitment, Selection and Induction
4. Training and Development
5. Performance Appraisal, Compensation and Benefits
 MANAGING HUMAN RESOURCES
Chapter One: Definitions and Concepts of Human Resource
Management

Objectives
After completing this unit, you should be able to:
Define human resource management and some basic terms related to it.
Identify the major functions of human resource management.
 DEVELOPMENT OF HRM
Industrial revolution era-19th century (started
1850 in Western Europe and USA)
The factory system replaced the old cottage system
In order to manage people in the factory system of industrial
revolution, three systems of HRM were developed:
Recruitment of workers,
Training of workers
Control of workers.

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Trade union movement era-close to 19th century
Workers started to organize to safeguard their interests.
Trade union started strikes, slowdowns, boycotts etc. for the
acceptance of their demand.
Social responsibility era-beginning of 20th century
It was believed that productivity increases as the work
environment get improved.
Owners started humanistic and paternalistic

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Scientific Management era-1900s-1920s.
Taylor started to find out one best way of doing thing based on time and motion
studies
Main principles:
Replacement of rule of thumb with science
Harmony in group action
Cooperation between management and workers
Maximum output in place of restricted output
Development of workers
Job Analysis
Standardization
Scientific selection and training of workers…physical and technical fitness
Financial incentives...differential piece rate
Mental revolution…from conflict to cooperation
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 HUMAN RELATION ERA-1930S-1950S
Hawthorne study (1924-1932)
Productivity depends on:
 Social factors at the workplace
 Group formation and group influence
 Nature of leadership and supervision
 Communication
It states that happy workers are more productive.
 BEHAVIORAL SCIENCE ERA-1950S-1960S
 People do not dislike work
 Creation of healthy work environment
Major contributions of the behavioral scientists are in the areas of
Motivation
Leadership
Communication
Organizational change and development
Integrating organization and individual
Group dynamics.
 HUMAN RESOURCE MANAGEMENT ERA-1980 ONWARDS
People were treated as socio-psychological beings
People were considered as a prime source of organizational
effectiveness
Large organizations changed the nomenclature of their departments
from personnel management to HRM to reflect the contemporary
view.
 WHAT IS HRM?
HRM is “the planning, organizing, directing and controlling of the
recruitment, selection, development, compensation, integration,
maintenance and separation of human resources with aim to ensure at
the end the individual, organizational, and social objectives are
accomplished.”
DEFINITION OF HUMAN RESOURCES MANAGEMENT
 Human resource management is defined as the performance of all managerial
functions involved in planning, recruiting, selecting, developing, utilizing,
rewarding and maximizing the potential of human resources to the best
achievement of organizational objectives.

It is the management of activities to ensure the effective and efficient use of
human resource to accomplish organizational goals.

Human resource refers to the sum total of all the inherent abilities, acquired
knowledge and skills represented by the aptitudes, attitudes and talents of an
organizational work force.
Human resource management is the function performed in organizations that
facilitates the most effective use of people (employees) to achieve
organizational and individual goals.
 CONT…
Human resource management is also defined as a strategic and coherent approach to the management of
an organization’s most valued assets – the people working there who individually and collectively
contribute to the achievement of its objectives.
HUMAN RESOURCE SYSTEM
Human resource management operates through human resource systems that bring together in a coherent
way:
HR philosophies describing the overarching values and guiding principles adopted in managing people.
HR strategies defining the direction in which HRM intends to go.
HR policies, which are the guidelines defining how these values, principles and the strategies should be
applied and implemented in specific areas of HRM.
HR processes consisting of the formal procedures and methods used to put HR strategic plans and
policies into effect.
HR practices comprising the informal approaches used in managing people.
HR programs, which enable HR strategies, policies and practices to be implemented according to plan.
 MODELS OF HRM
A. The matching model of HRM
It is an explicit statement of the HRM concept which was made by the Michigan School
(Fombrun et al, 1984).
It states that HR systems and the organization structure should be managed in a way that is
congruent with organizational strategy.
It explained that there is a human resource cycle which consists of four generic processes or
functions that are performed in all organizations. These are:
1. Selection – matching available human resources to jobs;
2. Appraisal – performance management;
3. Rewards – „the reward system is one of the most under-utilized and mishandled managerial
tools for driving organizational performance‟; it must reward short as well as long-term
achievements, bearing in mind that „business must perform in the present to succeed in the future‟;
4. Development – developing high quality employees.
CONT…
 CONT…
B. The Harvard framework
Beer and his colleagues believed that „Today, many pressures are demanding a broader, more
comprehensive and more strategic perspective with regard to the organization‟s human
resources.
It Suggests „A longer-term perspective in managing people and consideration of people as
potential assets rather than merely a variable cost‟.
It states that Human resource management involves all management decisions and action that
affect the nature of the relationship between the organization and its employees – its human
resources.
The Harvard school suggested that HRM had two characteristic features:
1) Line managers accept more responsibility for ensuring the alignment of competitive strategy
and personnel policies;
2) Personnel has the mission of setting policies that govern how personnel activities are
developed and implemented in ways that make them more mutually reinforcing.
CONT…
STRATEGIC IMPORTANCE OF HRM
The HRM function today is concerned with much more than simple filing, housekeeping, and
record-keeping.
Today it would be difficult to imagine any organization achieving and sustaining
effectiveness without efficient HRM programs and activities.
In a strategic approach the main responsibility for people management rests with any
individual that is in direct contact with them, such as line managers.
The Key strategic HRM Concepts to apply:
Analyzing and solving problems from a profit-oriented, not just a service-oriented, point of
view.
Assessing and interpreting HRM related costs or benefits of such: productivity, salaries and
benefits, recruitment, training, absenteeism, overseas relocation, layoffs, meetings, and attitude
surveys.
Using planning models that include realistic, challenging, specific, and meaningful goals.
CONT…
OBJECTIVES OF THE HRM FUNCTION
The contributions HRM makes to organizational effectiveness include the
following:
Helping the organization reach its goals.
Employing the skills and abilities of the workforce efficiently.
Providing the organization with well-trained and well-motivated employees.
Increasing to the fullest the employee‟s job satisfaction and self-actualization.
Developing and maintaining a quality of work life that makes employment in the
organization
desirable.
Communicating HRM policies to all employees.
Helping maintain ethical policies and socially responsible behavior.
Managing change to the mutual advantage of individuals, groups, the enterprise,
and the public.
Managing increased urgency and faster cycle time.
CHARACTERISTICS OF HRM
• People oriented • Staff function
• Action- oriented • Young discipline
• Individual- oriented
• Development – oriented
• Pervasive Function
• Continuous Function
• Future- oriented
• Challenging function
• Science as well as art
HRM is responsible to:
1. Provide equal opportunities to all its employees.
2. Promote diversity and equality in the workplace.
3. Employees shall be treated with dignity.
4. Maintain a work Environment free of all forms of harassment.
5. Respect for the right to privacy and the right to be heard.
6. Equal opportunity to all eligible.
7. Decisions are based on merit.
SCOPE OF HRM
1. Personnel or Labor Aspect
Planning, recruiting, selection, placement, transfer, promotion, training and
development, Lay-offs, retrenchment, remuneration, incentives and productivity.

2. Welfare Aspect
Housing, transport, medical assistance, canteen, rest rooms, health and
safety, education, etc.
3. Industrial Relation Aspect
Union-management relations, collective bargaining, grievance and
disciplinary actions, settlement of disputes.
SIGNIFICANCE OF HRM
Professional significance

 Providing maximum opportunities for personal

development of each employee.
 Maintaining healthy relationships among individual &
different work groups.
 Allocating work properly.
Social Significance
 Sound HRM has a great significance for the society to enhance the
dignity of labor in the following ways.
 Providing suitable employment that provides social &
psychological satisfaction to people.
 Maintaining a balance between the job available & the
jobseekers in terms of numbers, qualification, needs &
aptitudes.
 Eliminating waste of human resource through conservation of
physical & metal health.
National Significance
HRM plays a vital role in the development of a nation.

The effective exploitation & utilization of a nation‟s natural, physical & financial
resources require a committed manpower.
The wide differences in development between countries are with similar resources
are due to differences in the quality of their people.
Countries are underdeveloped because their people are backward.

The level of development in a country depends primarily on the skills , attitudes &
values of its human resources.

Effective management of HR helps to speed up the process of economic growth

which in turn leads to higher standards of living & fuller employment
TRENDS SHAPING HRM
Globalization
and Competition Trends

Indebtedness (“Leverage”)
and Deregulation Technological Trends

Trends in HR
Management
Workforce and Demographic
Trends in the Nature of Work
Trends

Economic Challenges and

Trends
TRENDS IN THE NATURE OF WORK
Changes in How We Work

High-Tech Service Knowledge Work and

Jobs Jobs Human Capital
Thank You!!