Human Resource Management

MBA 509
 HR: The life blood of an organization
For many years it has been said that capital is the
bottleneck for a developing industry. I don’t think this any
longer holds true. I think it’s the workforce and the
company’s inability to recruit and maintain a good
workforce that does constitute the bottleneck for
production. I don’t know of any major project backed by
good ideas, vigor, and enthusiasm that has been stopped
by a shortage of cash. I do know of industries whose
growth has been partly stopped or hampered because
they can’t maintain an efficient and enthusiastic labor
force, and I think this will hold true even more in the
future.
- President of one company
 HRM Defined
• Human Resources Management is the
process of acquiring, training, appraising,
and compensating employees, and
attending to their labor relations, health
and safety, and fairness concerns. – Gery
Dessler, 2005.

• Key Assumption
– Employees are the most important asset of
the organization
 Historical Development of HRM
• Pre Industrial Revolution:
– Formation of Guilds by masons, carpenters, leather workers
and other craftsman to improve their working conditions.
• Industrial Revolution:
- Later part of the 18th Century.
- Factory system of production emerged.
- Management was separated from ownership.
• Scientific management:
- F W Taylor, 1911
- Emphasized harmonious relationship between workers
and managers
- Emphasizes job-person fit
- Introduced work study, piece rate system of payment.
 Historical Development of HRM
 Industrial Psychology:
 Emphasized on psychological test for selection of
employees, motivation of employees etc.
 Human Relations Movement (Hawthorn Studies):
 Focused on group influence and interpersonal
relationships in the workplace.
 Personnel Department & Welfare Secretary:
 In response to the rise of trade unionism at the turn of the
century a few firms, like the H. J. Heinz, Int’l Harvester etc
created the position of “Welfare Secretary” to suggest
workers about working conditions, housing, medical care,
educational facilities, recreation etc.
 B.F. Goodrich Co---Employment Dept. in 1900
 National Cash Register---Labor Dept. in 1902
 Historical Development of HRM
• The Wagner Act: The Magna Carta of Labor:
The Wagner Act was passed in 1935.
After the stock market crash in 1929 and at the time of
great depression, President Franklin Roosevelt
supported the Wagner Act that recognized unions as
the authorized representatives of the workers. In
response to this legislation the companies became
much more open to find ways to handle their
employees.
• Until 1960s:
The personnel functions were concerned only with
blue collar workers or operative employees. According
to Peter F. Drucker, the job of the personnel was,
“partly a file clerk’s job, partly a house keeping job,
partly a social workers job, and partly firefighting,
heading off union trouble.”
 Historical Development of
HRM
• Today’s HRM:
HRM strategies are integrated within the
organization. It is a paradigm shift from viewing
people as resources to control to resources to
develop. Now HRM deals with a number of
functions right from designing jobs, recruitment
and selection of employees to ensure their
development, satisfaction and continuation with
the organization.
 Functions of HRM

Staffing Training &

Getting people development
Preparing People

Motivation Maintenance
Stimulating People Keeping People
 Functions of HRM
• Staffing Function
-         Strategic HR Planning
-         Recruiting
-         Selection
• Training & Development 
-         Orientation
-         Employee training
-         Employee Development
- Career Development
 Functions of HRM
• Motivation
-         Job Design
-         Performance Appraisal
-         Reward & Compensation
-         Employee benefits
• Maintenance
-         Safety and Health
-         Communications
-         Employee relations
Outcomes of HR
 Who Performs HRM Activities?
In most organizations two groups perform HRM
activities:
1. Line Managers: Line managers are authorized to
direct the work of subordinates. They are in charge
of accomplishing the organization’s basic goals.
Every line manager, in one way or the other,
performs some jobs of human resource
management like:
    - Placing the right person on the right job,
- Training employees for jobs that are new to them.
- Developing the abilities of each person
- Creating and maintain departmental morale
- Protecting employee’s health and physical condition etc.
 Who Performs HRM Activities?

2. Staff Managers: Staff managers are

authorized to assist and advise line
managers in accomplishing the basic
goals of the organization. E.g. HR
Managers, Finance & Accounts manager,
Legal manager etc are Staff Managers.
 Functions of HR Manager as a
Staff manager
• A line function: The HR Manager directs the
activities of the people in his or her own
department and in related service areas.
• A coordinative Function: HR managers ensure
that the line managers are implementing the
firm’s HR objectives, policies and procedures.
• Staff (assist and advise) function: Assisting
and advising line managers as well as the
employers (top management) is the core of HR
manager’s job.
 Who Performs HRM Activities?
• HR in small organization:
a. Owner
b. Operating Managers
• HR in Mid Sized organizations:
a.  Operating managers
b.   A Human Resource Generalist
• HR in Large organizations:
a. Operating managers
b.  Human Resource Department
with Human Resource generalists and
specialists
 Who Performs HRM Activities?
• HR in Very Large organizations:
a.   Operating managers
b.   Human Resource Division with a few
departments like:
- Employment Department
- Training and Development
Department
- Employee Relations Department
- Safety, Health and Environment
Department etc.
 HR Department in a large Organization

VP HR

Administrative
Assistant

Director Recruitment Manager Director Manager

Wage/Salary Director
Employee & Employee Benefit Labor
Administration Training
Health Placement Relations Services Relations

Workers Employment Benefit

Performance Employee
STD/LTD
Management
Agency Orientation Payroll
Case mgt coordinator Counseling Processing

Employee Employee
Wellness Employee
Program
Retention Training Recognition
benefits
Program Programs

Personnel Employee
Safety Management Benefit
records Special
Manager Development HRIS
HRIS Events
 External Influences on HRM

The activities of HRM are affected by

the following four external forces:

• The Dynamic Environment of HRM

• Government Legislation
• Labor Union
• Management Thought
The Dynamic Environment of HRM
• Globalization
• Workforce diversity
• Technological Trend
• Trends in the nature of work
 Globalization
• The concept of globalization means that the whole
world is moving toward an integrated global system
characterized by increased interdependence.
• Two important aspects of globalization:
– Globalization of market: It refers to the fact that the demand
pattern of people around the world is becoming more similar
leading to one huge global marketplace. and
– Globalization of production: It refers to the tendency among
firms to source goods and services from different locations
around the world to take advantages of national differences
in the cost and qualities of factors of production
• “The bottom line is that the growing integration of the
world economy into a single, huge market place is
increasing the intensity of competition in a wide range
of manufacturing and service industries.”
 Opportunity

Vulnerability Compliance

Globalization

Competition Quality of Life

 HR Planning

SHE Staffing

HRM
&
Globalization

Training
Compensation &
Development

Performance
Appraisal
 Workforce diversity
• Diversity has been defined as “any attribute
that humans are likely to use to tell
themselves, ‘that person is different from me’
and thus includes such factors as race, sex,
age, values and cultural norms.”
• What sort of diversity?
o More women in the workplace
o Diversity based on religion, region and nationality
o Age composition
o Duel Career
 Technological Trend:
o Robotics
o CAD,CAM, MIS
o PC, Office automation, Internet etc.
• “In the seventies we went to the post office to
pick up our orders. In early 80s we put in an
800 number. In late 80s we got a fax machine.
In 1991, pressured by target stores, we added
electronic data interchange. Now just two years
later, more than half of our orders arrive via
modem, straight into company computers.
Errors in order entry and shipping have all but
disappeared.”
- The CEO of Inter-Design, Ohio
 Trends in the nature of work
• Main drivers: technology and globalization
• Effects:
 Relocation of plants,
 Part time, temporary jobs
 A service Society
 Demand for increase in productivity: Just-in–time
manufacturing and integrated supply chain.
 Knowledge Work and Human Capital
 Human Capital refers to the knowledge, education, training,
skills and expertise of a firm’s workers. Today the center of
gravity in employment is moving fast from manual and clerical
workers to knowledge workers, who resist the command and
control model that business took from the military 100 years
ago.
 Government Legislation

• Bangladesh Labor Code, 2006

 Labor Unions
• Labor unions are founded and exist today to
assist workers in dealing with the
management of an organization. As the
certified third-party representative, the union
acts on behalf of its members to secure
wages, hours, and other terms and conditions
of employment. It also has tremendous
influence on grievance procedure.
 Management Thought
• Over the years management has
developed as a full-fledged filed of study
and many scholars had contributed to this
area. The accumulated contributions of the
scholars also has its bearing on HRM.
• Four major scholars are said to have
significant influence on today’s HRM. They
are: Frederick Taylor, Hugo Munsterberg,
Mary Parker Follet and Elton Mayo.
Competencies Needed by HR
Professionals:
Knowledge
about
Management HRM People Skill
& HRM
Literature

Government
Legislations
affecting HR
Knowledge about Management
& HRM Literature

• Principles of management and

organizational behavior
• HRM literature
• Labor Economics and Compensation
theories
• Basics of Training and learning
 People Skill
• Negotiation skill
• Leadership skill
• Communication skill
• Problem solving or diagnostic skill
• Organizing skill
 HR Metrics
• HR metrics are a set of quantitative
performance measures HR managers use to
assess their operations. For example:
o Absence rate
o Cost per hire
o Healthcare costs per employee
o HR Expense factor
o Human capital ROI
o Human capital Value added
o Revenue factor
o Time to fill
o Training Investment factor
o Turnover costs
o Turnover rate
o Worker’s Compensation Cost per employee