RIFT VALLEY UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT, MBA PROGRAM

Well come to the COURSE HUMAN

RESOURCE MANAGMENT

Course manager : Dr. Assefa Balda

Course content
 Tentative Assessment Scheme:

 Project works----------------------------------------------------------------20%
 presentation-------------------------------------------------------------------10%
 Mid exam ……………………………………………………………25%
 Final exam--------------------------------------------------------------------45%
 Total---------------------------------------------------------------------------100%
 MANAGEMENT ESSENTIALS: AN OVERVIEW

What is management?
Management refers to the process of achieving
organizational objectives with and through the
effort of people and other resources.

Management involves setting goals and allocating

scarce resources to achieve them.

Management is the process of efficiently achieving the

objectives of the organization with and through people.
 contd...

Primary Functions of Management

Planning – establishing goals
Organizing – determining what activities need to be
done
Leading – assuring the right people are on the job and
motivated
Controlling – monitoring activities to be sure goals are
met
 contd...

Management implies that:

❖Organizational activities require human effort and
capabilities

❖Organizations depend on performance of people for

achieving its mission and goals

❖Organizations are directed by decisions of one or

more people
 What is Resource management?
 It is the efficient and effective deployment of an organization's
resources when they are needed.
 Such resources may include:
 financial resources
 inventory
 human skills (staff, )
 production resources, or
 information technology (IT).
 physical space,
 equipment, and
 time. …etc
 It is the practice of planning, scheduling, and allocating people,
money, and technology to a project or program.
 In essence, it is the process of allocating resources to  achieve the
greatest organizational values.
 contd...
 Good resource management results in the
right resources being available at the right
time for the right work.
 Resource management allows you to plan at
any level– across the enterprise, portfolios,
departments, and teams.

 Resources are essential to reach your goal.

 The goal of resource management is to use the best

combination of resources to satisfy requirements
 contd...

 Resource management is critical for organizations to ensure

they are optimizing and allocating resources to the right
initiatives

 The initiatives that are aligned to corporate strategy and bring

the most value.

 Regardless of work methodology, leaders seeking to practice

effective resource management must balance demand with
capacity while also understanding the needs of the business to
prioritize, plan, and schedule work with the right teams,
people, and skill sets.
 ORGANIZATION & HUMAN RESOURCE

 Organizations are human associations for achieving

goals.
 Organizational effectiveness largely depends on the
performance of people working in organizations.

 Better people achieve better results.

 People possessing energy and physical strength

alone are NOT human resources.
 Organization …Cont’d

 People become human resources only when

they acquire competencies, such as:
 Knowledge,
 Skills,
 Attitudes,
 Experiences and
 Potential for growth.
 CH I: Nature and scope of HRM

LEARNING OBJECTIVES
After completing this chapter one, you will be able to:
Realize the association of management with HRM
Describe the historical development of HRM
Discuss what is meant by HR management
List the main components of HR management.
Recognize the features of HR management.
Describe the main HR management functions.
Explain the contribution of HRM in achieving
organizational strategic plan.
 Identify how environmental factors impact the
management of human resources.
 w h at
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 1.1 DEVELOPMENT OF HRM CONCEPT

 HRM activities have been performed since ancient

times. The pioneering work of P. Drucker and D.
McGregor in the 1950s laid its formal foundation.
 P. Drucker introduced the concept of “visionary goal-
directed leadership”. This led to the development of
“management by objectives” (MBO) which is
fundamental to HRM.
 D. McGregor advocated “management by integration
and self- control”. HRM strategy was regarded as an
integral part of organizational strategy. Every manager
was made responsible for HRM.
 DEVELOPMENT…CONT’D

Modern Concept of HRM has developed through

the following stages
Stage 1 : The Commodity Concept
Before industrial revolution, the guild system was the
beginning of personnel management.
Guild was a closely knit group concerned with
selecting, training, rewarding and maintaining workers.
Labor began to be considered a commodity to be bought
and sold
Stage 2 : The Factor of Production Concept
Employees were considered a factor of production just
like land, materials, machinery.
 DEVELOPMENT…CONT’D

 Taylor’s scientific management stressed proper selection and

training of employees so as to maximize productivity
Stage 3 : The Paternalistic

 Employees organized together on the basis of their common

interest and formed trade union.
 Employers began to provide schemes to workers.
 Employers assured a fatherly and protective attitude
towards their employees.
Stage 4 : The Humanitarian Concept
 Employees had certain inalienable right as human being, therefore,
employers are expected to protect their right .
 Social and psychological satisfaction of employees are considered
 Concerned with employees problems in the work place.
 DEVELOPMENT…CONT’D

Stage 5 : The Behavioral HR Concept

Focused on analyzing and understanding human behavior in
organizations.
Employees began to be considered as a valuable assets of an
organization.
Focus shifted towards management practices like two ways
communication, MBO, informal groups, quality circle etc.
Stage 6 : The Emerging Concept
Employees are considered as partners in the organization.
HRM is emerging as a discipline.
HR become partner with management in strategic execution.
1.2 WHAT IS HUMAN RESOURCE MANAGEMENT?

 HRM is the process of achieving organizational objectives by

acquiring, developing, retaining, and properly using the HRs in
an organization.

 Human resources are the people and their characteristics at

work place including knowledge, skills, creative abilities,
talents and attitudes
 HRM…CONT’D
HR Management:

is a process of bringing people and organizations together so

that the goals of each are met.
is that part of the management process which is concerned with
the Mgt of HRs in an organization. i.e., It focuses on people in
organizations.
tries to secure the best from people by winning their
wholehearted cooperation.
 is a management function concerned with hiring, motivating
and maintaining people in an organization.
 is designing management systems to ensure that human talent
is used effectively and efficiently to accomplish organizational
goals
 HRM…CONT’D
 HRM is a multidisciplinary organizational function
that draws theories and ideas from various fields such as
management, psychology, sociology, economics and
Law.
Psychology (motivation, satisfaction),
Sociology (organization structure, culture) and
Economics (wages, markets, resources)
Law (min. wage, labor contracts, equal employment
opportunity commission (EEOC))
 There is no best way to manage people and no manager has
formulated how people can be managed effectively, because
people are complex beings with complex needs.
 Effective HRM depends very much on the causes and conditions
that an organizational setting would provide.
 contd...
Therefore, companies like the Four Seasons have
recognized that forces in our business environment
require them to recognize changes in the expectations
of their employees as well as their customers.

HRM is a subset of the study of management that

focuses on how to attract, hire, train, motivate, and
maintain employees.

Strong employees become a source of competitive

advantage in a global environment facing change in
complex ways at a rapid pace
 1.3 PERSONNEL MANAGEMENT
VS
HUMAN RESOURCE MANAGEMENT
1.4 COMPONENTS OF HRM SYSTEM
1.5 MAJOR ESSENTIAL FEATURES OF HRM

Human Resource Management:

Human Focus: Concerned with the management of
employees
Pervasive: Inherent in all organizations & concerns
every manager in the origination
Continuous: A continuous function, not a one time
activity
Dynamic: As a dynamic functions is affected by
internal and external changes
System: A system consisting of interrelated
acquisition, development, motivation, and maintenance
subsystems.
1.6 Why Is HRM Important to an Organization?

 It is important to note that achieving organizational goals cannot

be done without human resources.
 It is People- not buildings, equipment, or brand names make a
company
 Activation of non-human resource

 Means for developing competitive advantages-lower cost of

production, creating special means for marketing etc…

 Source of creative energy- people in the organization are the

only source of creativity
 contd...
 People at work provide pool of knowledge, skills, creative
abilities, talents, and attitudes
 People design, operate and repair the technology,
 people control the finance, and
 people use the material,
 people mange information

Therefore, the basic objectives of HRM are:

To attract human resources into the organization
To develop and motivate people for better performance
To integrate and maintain people in the organization
29
 Key Importance of HRM?
Employee
Concerns
Competitive HRM Background
Planning diversity
challenges Recruitment Age
Staffing distribution
 Globalization Job design Gender Issue
T & D Job security
 Technology
Appraisal Educational
 Managing Change Communication level
 Human Capital Compensation Employee
 Benefits rights
Responsiveness
Industrial Privacy issues
 Cost containment Work attitudes
relations
Family
concerns
30
1.7 SCOPE AND FUNCTIONS OF HRM
 HRM functions
 Comprehensive basic HR functions are: HR acquisition, and HR
development
 Acquisition: this function involves
 HR Planning
 Job and role analysis
 Recruitment
 Selection
 Orientation and Placement

 HR development: this function comprises training to perform

specific job in a better way and management development for
present and future positions
 HRD system
 Career planning and development
 Training and development
 Organization development
32
 1. Job Analysis
 The reason why people are required in an organization is to fill
job vacancies and to do the job.
 This requires human resource management to understand the nature
of the job and the nature of the person required for the job.

 Job Analysis is the process of studying and collecting

information relating to the operation and responsibilities
of a specific job.
 Job Analysis holds job description, job specification and
job evaluation-a process of determining a relative worth
of a job
 The products of job analysis are: job description, job
specification
33
 2. Human Resource Planning (HRP)

 It is the process by which an organization ensures that, it

has the right number and kinds of people. (i.e.,
ensure that the required number of employees,
with the required skills & knowledge are available
when they are needed.)
 It is the process of assessing the future supply of and
demand for human resources.
 It also provides mechanisms to eliminate any gaps that
may exist between supply and demand
 It precedes all other HRM functions
34
 3. Recruitment

Recruitment:
It is the process of finding and attracting capable
applicants for employment.
It can be also stated as the process of attracting
potential job applicants (people) from the available
labor forces and encouraging them to apply for
vacant jobs with the organization.
Recruitment process begins when new recruits are
sought and ends when the applicants are registered

35
 4. Selection

It is a process conceptualized as choosing the fit

candidates to the organization (i.e., choosing and
hiring from a group of applicants the individuals
best suited for the vacant job.)

Difference between recruitment and selection

 Objective- to attract vs. to choose
 Process- positive vs. Negative
 Techniques- less specialized vs. Specialized
 Outcome- applicant pool vs. Few selected

36
 5. Orientation
It is the process of familiarizing new employees with:
The organization’s vision & mission
Their jobs, and
Their work unit

6. Placement
 Placement is the process of assigning a selected
applicant to the job for which he/she applied for.
 It should take place as per the principle of Person-Job fit
(match) approach.
 7. Training & Development
 Employee Training: The process of improving the
performance of employees in their present jobs.

 Management Development: The growth of managers ability

through the provision of learning.

8. Compensation: The management of every type of reward that

employees receive in return for their services.

9. Performance Evaluation: A formal system of periodic review

and evaluation of employees job performance

38
10.Safety and Health:
 Safety: Protecting employees from injuries caused by
work related accident
 Health: The employees freedom from illness and their
general physical and mental well-being

11. Promotion, transfer, demotion,& separation

 High performers may be promoted or transferred to help
them develop their skills, while low performers may be
demoted, transferred to less important positions, or even
separated
 contd...

12. Human Resource Research

HR research is a systematic way of gathering

recording, analyzing and interpreting data for HRM
decisions.
 1.8 OBJECTIVES OF HRM

 Goal achievement: Achieve Social responsibility goal by

creating employment opportunities and meet social needs
 Structure maintenance: Facilitate working relationship among
all members of the organization

 Goal harmony: Creates harmony between organization goals

and employees personal goals.
 Productivity improvement: Develop employees through
training and other opportunities

 Efficiency promotion: Ensures cost effective use of HRs

1.9 Environment of HRM
 THE ENVIRONMENT---CONT’D
1. Internal Environment
Forces in the internal environment are controllable by management.
Major internal environment:

Organizational goals: Desired outcomes which provide frame of

reference for conducting HRM.
HRM Policies: Provide guidelines for making HRM decisions.

Structure: Organization structure provides boundary for HRM.

Reward system: Ensures attraction and retention of quality
human resources.

Organization climate: Promotes or hinders mutuality of interests

between management and employees
 2. EXTERNAL ENVIRONMENT

Forces in the external environment are non-controllable by

management.
Major external environment are:
Technology: Level of technology and pace of technological
change impact HRM.
Laws: Restrain or encourage HRM activities. HRM must conform
to laws.
Labor unions: Mainly affect processing component of HRM
system through collective bargaining; strikes etc.
Economic forces: Affect job market and reward system of
employees.
Socio-cultural forces: Provide status and value to jobs. They also
affect the practice and ways of doing jobs.