Introduction to Human

Resource Management

Professor Mohammad Khasro MIAH Ph.D.

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Historical Turning Points in HR
• 1793 Samuel Slater – father of Industrial
Revolution in US
• 1886 American Federation of Labor (AFL)
– 1st union in US
• 1890 Sherman Antitrust Act .- balance
power of Management & labor
• 1907 Immigration Act of 1907 – slowed
labor growth
• 1909 Frederick Winslow Taylor –
scientific Management
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Historical Turning Points in
HR(cont.)
1911 Triangle Shirt Waist Company fire – attention
to employee Safety

• 1913 Henry Ford – 5$ day; systematic MGT; tenure-

based outcomes
• 1914-1918 World War I – systems approach to
Employees testing;

• 1926 Railway Labor Act – 1st govt. policy to

encourage unions
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 Historical Turning Points in
HR(cont.)
 1930s Early HR Research
• Hawthorne Experiments – (1927-1932)
• Maslow’s Need Hierarchy – (1939-1943)
• McGragor’s Theory X & Y – (1960)
• Herzberg’s Motivators and Satisfiers –
(1960)
• Peter, F. Drucker: Management By
Objectives – (1965)

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 Historical Turning Points in
HR(cont.)
• 1935 Social Security Act – beginning of social welfare
• 1935 National Labor Relations Act – prohibits
employer unfair practice, NLRB
• 1938 Fair Labor Standards Act – minimum wage,
exempt/nonexempt, overtime
• 1941-1945 World War II – women in workforce, health
care introduced
• 1946 Numerous labor strikes
• 1947 Taft-Hartley Act – unfair labor practices for
unions/outlaws closed shop
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• 1954 Brown vs. Topeka Board of Education –
integrates schools
• 1964 Civil Right Act of 1964 – creates EEOC
• 1965 Equal Employment Opportunity Commission
(EEOC) – enf EEO
• 1970 Occupational Safety and Health Act (OSHA) –
ERISA (1974), others
• 1977 Human Resources Planning Society (now
SHRM)
• 1979 Office of Personnel Management – personnel
function more visibility

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 Historical HR (cont.)

• 1980s Stock option developed – for high level

execs

• 1981 Professional Air Traffic Controllers

(PATCO) strike – decline of unions

•1987 PeopleSoft Inc – first HR management

software

• 1980s (late) Global competition increases

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•1991 Clarence Thomas-Anita Hill hearings - sexual
harassment
• 1994 Monster Board – online recruiting
• 1999 BP Amoco and Exult – $600M outsourcing arrangement
(1st for HR)
• 2001 World Trade Center attack – security on everyone’s job
• 2001 Fraud at Enron – Govt. reform – SOX (SOX, is a federal law that
is a comprehensive reform of business practices.)
• 2006 IBM permanently stop defined benefit
pensions – decline of benefits
• 2008 Government provides TARP funds to

bankrupt businesses (Troubled Asset Relief Program (TARP)

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 Evolution of HRM

 Human resource management has changed in

name various times throughout history.
 Industrial welfare was the first form of human
resource management (HRM).

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 Evolution of HRM

• In 1833 the factories act stated that there

should be male factory inspectors.
• In 1878 legislation was passed to regulate
the hours of work for children and women
by having a 60 hour week. During this
time trade unions started to be formed.
• In 1868 the 1st trade union conference
was held.
• This was the start of collective bargaining.
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 Evolution of HRM

 In 1916 it became compulsory to have a

welfare worker in explosive factories
and was encouraged in arms factories.

 The armed forces focused on how to

test abilities and IQ along with other
research in human factors at work.

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 Evolution of HRM
1917-18: 1st formal personnel department created to deal with
tight labor market, high turnover, waste and
inefficiency, widespread strikes, union growth,
government intervention, takeovers

1920’s: HR used to “win ” worker cooperation, through

ensuring job security, benefits, etc.

1930’-50’s: “Human Relations” recognizes that there are

psychological and social influences to worker
satisfaction, cooperation, performance; first focus on
groups (not teams).
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 Evolution of HRM
 1960’s: Work design, rather than communication and cooperation in
groups, is the key to increasing worker motivation. Small work group
design leads to greater employee effort, group work provides opportunities
for “self-actualization”; work is more interesting and fulfilling.

 1970’s: Quality of Work Life (QWL): emphasis on the value

of human resources. PM becomes HR.

 1990’s-Present: TQM, reengineering, globalization, strategic HR, new

technologies, diversity, contingency models, holistic approaches to HR.
HRM models include “high involvement”, “high commitment”, “high
performance work system”, “innovative work practices”. HR becomes
HRM.

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 Introduction to HR
 The 1980’s and 90’s saw ‘Human Resource
Management’(HRM) replace ‘Personnel Management’
 fashionable term
 re-organisation of work of personnel department
 distinctively different with new management approach

 Long term rather than short term perspective

 Psychological contract of commitment
 Self-control rather than external controls
 Management integration
 Maximum utilisation of resources
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 Human Resource Management

 HRM is the organizational function that deals

with issues related to PEOPLE such as hiring,
training, promotion, performance
management, compensation, organization
development, safety, wellness, benefits,
employee motivation, communication,
administration and Industrial relations.

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 Therefore, human resource management can be defined as a
specific combination of HR practices, work structures, and
processes that maximizes employee knowledge, skill,
commitment, and flexibility.
 It composed of many interrelated parts that complement one
another to reach the goals of an organization, large or small.

Set of activities directed at ATTRACTING, DEVELOPING, and

MAINTAINING of an effective workforce capable of achieving
the firm’s objective.

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 Basic HR Concepts

 The bottom line of managing:

Getting results
 HR creates value by engaging in
activities that produce the
employee behaviors that the
company needs to achieve its
strategic goals.

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 ”Soft” and ”Hard” HRM
 Soft HRM emphasizes the importance of high commitment,
learning, enlightened leadership; human resources are valuable
assets, not variable costs.

Models and theories focus on tapping the human potential,

based on organizational behavior theories (e.g. Maslow,
1954; Herzberg, 1966; McGregor, 1960; Miah and Bird 2007)

• Hard HRM emphasizes the calculative, quantitative and

strategic management aspects ( Strategy, Structure, System)
and of managing the workforce in a rational way (Storey,
1989).

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 1–
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Which in turn lead to the
'four C's' or HR policies that
have to be achieved:

 Commitment
 Congruence
 Competence
 Cost effectiveness

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The main activities of human resource
management

The areas that we would list are as follows:

 recruitment and selection
 learning and talent development
 human resource planning
 provision of contracts
 provision of fair treatment
 provision of equal opportunities
 managing diversity
 motivating workers to achieve improved performance
 employee counseling
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 redundancy
 negotiation
 encouraging involvement and engagement
 adding value
 ethics and corporate responsibility
 knowledge management
 change management
 managing cross-cultural issues or international
HRM.
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 talent management
 employee wellbeing
 payment and reward of employees
 health and safety
 disciplining individuals
 dealing with grievances
 dismissal

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 The Management Process

Planning

Controlling Organizing

Leading Staffing

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Human Resource Management at
Work

Acquisition

Fairness Training

Human
Resource
Management
Health and
(HRM) Appraisal
Safety

Labor Relations Compensating

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 Personnel Aspects of
a Manager’s Job

 Conducting job analyses

 Planning labor needs and recruiting job candidates
 Selecting job candidates
 Orienting and training new employees
 Appraising performance
 Managing wages and salaries
 Providing incentives and benefits
 Communicating
 Building employee commitment

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Line and Staff Aspects of
HRM
 Line manager
 A manager who is authorized to direct the work of
subordinates and is responsible for accomplishing
the organization’s tasks.
 Staff manager
 A manager who assists and advises line managers.

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 Line Managers’ HRM
Responsibilities

1. Placing the right person on 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 creative cooperation and developing smooth working
relationships
6. Interpreting the firm’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
10. Protecting employees’ health and physical condition
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Human Resource Managers’
Duties
Line Function Coordinative
Line Authority Function
Implied Authority Functional Authority

Functions of
HR Managers

Staff Functions
Staff Authority
Innovator
Employee Advocacy

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Human Resource Specialties

Recruiters

Labor Relations EEO

Specialists Coordinators
Human
Resource
Specialties
Training
Job Analysts
Specialists

Compensation
Managers

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 A Systems View of
Human Resource Management

1 - 31 MBA BUS 601 KsM 09/05/21

 Goals of Human Resource
Management

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Human Resource Management
as a Center of Expertise

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 FIGURE 1–1 HR Organization Chart for a Large Organization

Source: www.hr.wayne.edu/orgcharts.php. Accessed May 6, 2007. 1–

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FIGURE 1–2 HR Organizational Chart (Small Company)

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 FIGURE 1–3 Employment and Recruiting—Who Handles It?
(Percentage of All Employers)

Note: Length of bars represents prevalence of activity among all surveyed employers.

Source: HR MAGAZINE, BNA/Society for Human Resource Management, 2002.

Reproduced with permission via Copyright Clearance Center. 1–
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 The Changing Environment of
Human Resource Management

Globalization Trends

Technological Trends
Changes and Trends
in Human Resource
Management
Trends in the Nature of Work

Workforce Demographic Trends

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FIGURE 1–4 Employment migration: Projected Loss of Jobs and Wages

Source: Michael Schroeder, “States Fight Exodus of Jobs,” Wall Street Journal, June 3,
2003, p. 84. Reproduced with permission of Dow Jones & Co. Inc. via Copyright Clearance 1–
Center.
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 The Changing Role of
Human Resource Management
Strategic Human
Resource
Management

Managing with the New Creating High-

HR Scorecard Responsibilities Performance Work
Process for HR Managers Systems

Measuring the HRM

Team’s Performance

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TABLE 1–1 Technological Applications for HR

Application Service Providers (ASPs) and technology outsourcing

Web portals
PCs and high-speed access
Streaming desktop video
The mobile Web and wireless net access
E-procurement
Internet- and network-monitoring software
Bluetooth
Electronic signatures
Electronic bill presentment and payment
Data warehouses and computerized analytical programs

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 High-Performance Work System
Practices
Employment security
Selective hiring
Extensive training
Self-managed teams/decentralized decision making
Reduced status distinctions
Information sharing
Contingent (pay-for-performance) rewards
Transformational leadership
Measurement of management practices
Emphasis on high-quality work

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Benefits of a High-Performance
Work System (HPWS)
 Generate more job applicants
 Screen candidates more effectively
 Provide more and better training
 Link pay more explicitly to performance
 Provide a safer work environment
 Produce more qualified applicants per position
 Hiring based on validated selection tests
 Provide more hours of training for new employees
 Conduct more performance appraisals

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FIGURE 1–5 Five Sample HR Metrics
HR Metric* How to Calculate It

Absence rate # of days absent in month

× 100
Average # of employees during month × # of workdays

Cost per hire Advertising + agency fees + employee referrals + travel cost of
applicants and staff + relocation costs + recruiter pay and benefits
Number of hires

HR expense HR expense
factor Total operating expense

Time to fill Total days elapsed to fill job requisitions

Number hired

Turnover rate Number of separations during month

× 100
Average number of employees during month
Sources: Robert Grossman, “Measuring Up,” HR Magazine, January 2000, pp. 29–35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, “Improving the Return on Human Capital: New Metrics,”
Compensation and Benefits Review, January/February 2000, pp. 13–20; Thomas E. Murphy and Sourushe Zandvakili, “Data and Metrics-Driven Approach to Human Resource Practices: Using
Customers, Employees, and Financial Metrics,” Human Resource Management 39, no. 1 (Spring 2000), pp. 93–105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/BNA
2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org. See also, SHRM Research “2006 Strategic HR Management Survey Report,” Society for Human Resource Management.. 1–
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Measuring HR’s Contribution
 The HR Scorecard
 Shows the quantitative standards,
or “metrics” the firm uses to
measure HR activities.
 Measures the employee behaviors
resulting from these activities.
 Measures the strategically relevant
organizational outcomes of those
employee behaviors.

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 The Human Resource Manager’s
Proficiencies
 New Proficiencies
 HR proficiencies

 Business proficiencies

 Leadership proficiencies

 Learning proficiencies

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FIGURE 1–6 Effects CFOs Believe Human Capital Has on Business Outcomes

Source: Steven H. Bates, “Business Partners,” HR Magazine, September 2003, p. 49. Reproduced
with permission of the Society for Human Resource Management via Copyright Clearance Center. 1–
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 HR Certification
 HR is becoming more professionalized.
 Society for Human Resource Management
(SHRM)
 SHRM’s Human Resource Certification
Institute (HRCI)
 SPHR (senior professional in HR)
certificate
 PHR (professional in HR)
certificate

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FIGURE 1–7
2004 SHRM®
Learning
System
Module
Descriptions

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The Human Resource Manager’s
Proficiencies (cont’d)
 Managing within the Law
 Equal employment laws

 Occupational safety and health laws

 Labor laws

 Managing Ethics
 Ethical lapses

 Sarbanes-Oxley in 2003

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An integrated approach to people resourcing

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HR strategy: the integration of HR activities to
manage performance

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HRM in the twenty-first century?

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management process globalization
human resource management human capital
(HRM) strategy
authority strategic plan
line manager metrics
staff manager HR Scorecard
line authority outsourcing
staff authority ethics
implied authority strategic human resource
functional control management
employee advocacy high-performance work system

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