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INTRODUCTION TO HRM
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CHAPTER 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT
As human resources have become viewed as more critical to organizational success, many
organizations have realized that it is the people in an organization that can provide a competitive
advantage. Throughout the book it will be emphasized that the people as human resources
contribute to and affect the competitive success of the organization.
Human Resource (HR) management deals with the “Design of formal systems in an organization
to ensure the effective and efficient use of human talent to accomplish organizational goals. In an
organization, the management of human resources means that they must be recruited,
compensated, trained, and developed”.
A basic concept of management states that manager works in organizations. Organization has
three basic components, people, purpose, and structure.
As we said that HRM is the management of people working in an organization, it is a subject
related to human. For simplicity, we can say that it is the management of humans or people. it
is a managerial function that tries to match an organization’s needs to the skills and abilities of its
employees.
Human resource management is the process of acquiring, training, appraising, and compensating
employees and of attending to their labor relations, health and safety and fairness concern.
 Let’s see what is meant by the three key term:- human, resource, and management.
• Human (employees working in an organization)
• Resources (Human, Physical, Financial, Technical, Informational etc)
• Management (Function of Planning, Organizing, Leading & Controlling of organizational
Resources to accomplish goals efficiently and effectively)
What is human resource management?
As we said that HRM is the management of people working in an organization, it is a subject
related to human. For simplicity, we can say that it is the management of humans or people. HRM
is a managerial function that tries to match an organization’s needs to the skills and abilities of its
employees. Human Resource Management is responsible for how people are managed in the
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organizations. It is responsible for bringing people in organization helping them perform their
work, compensating them for their work and solving problems that arise.
Growing Importance of HRM
The success of organizations increasingly depends on people-embodied know-how- the
knowledge, skill, Attitude.
Nature of HRM:
 HRM involves management functions like planning, organizing, staffing, directing and
controlling.
 It involves procurement, development, maintenance and management of human resource.
 It helps to achieve individual, organizational and social objectives.
 HRM is a mighty disciplinary subject. It includes the study of management psychology
communication, economics and sociology.
 It involves team spirit and team work.
HRM plays important role in creating organizations and helping them survive. Our world is an
Organizational world. We are surrounded by organizations and we participate in them as
members,Employees, customers, and clients. Most of our life is spent in organization, and they
supply the goods and services on which we depend to live. Organizations on the other hand
depend on people, and without people, they would disappear.
Factors Contributing to the Growing Importance of HRM
a. Accommodation to workers' needs
Workers are demanding that organizations accommodate their personal needs by instituting such
programs as flexible work schedules, parental leave, child-care and elder-care assistance, and job
sharing. The human resource department plays a central role in establishing and implementing
policies designed to reduce the friction between organizational demands and family
responsibilities.
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b. Increased complexity of the Manager’s job
Management has become an increasingly complex and demanding job for many reasons, including
foreign competition, new technology, expanding scientific information, and rapid change.
Therefore, organizations frequently ask human resource managers for assistance in making
strategic business decisions and in matching the distinctive competencies of the firm's human
resources to the mission of the organization. Executives need assistance from the human resource
department in matters of recruitment, performance evaluation, compensation, and discipline.
c. Legislation and litigation
The enactment of state laws has contributed enormously to the proliferation and importance of
human resource functions. The record keeping and reporting requirements of the laws are so
extensive that to comply with them, many human resource departments must work countless
hours and often must hire additional staff. Four areas that have been influenced most by
legislation include equal employment, Compensation, safety, and labor relations. An
organization's failure to comply with laws regulating these areas can result in extremely costly
back-pay awards, class action suits, and penalties.
d. Consistency
Human resource policies help to maintain consistency and equity within an organization.
Consistency is particularly important in compensation and promotion decisions. When managers
make compensation decisions without consulting the human resource department the salary
structure tends to become very uneven and unfair promotion decisions also may be handled
unfairly when the HR department does not coordinate the decision of individual manger.
e. Expertise
Now days there exist sophisticated personnel activities that require special expertise. For example,
researchers have developed complex procedures for making employee-selection decisions;
statistical formulas that combine interviews, test scores, and application-blank information have
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replaced the subjective interviews traditionally used in making selection decisions. Similarly, many
organizations have developed compensation systems with elaborate benefits packages to replace
simple hourly pay or piece rate incentive system
f. Cost of Human Resource
Human resource activities have become increasingly important because of the high cost of
personal problem. The largest single expense in most organizations is labor cost, which is often
considerably higher than the necessary because of such problems as absenteeism tardiness and
discrimination.
Why are we concerned with HRM?
1. Helps you get results - through others.
Different managerial techniques help mangers to direct the performance of employees in
desirable direction in order to achieve the organizational objectives. Through the efforts of others
working in an organization,managers get things done that require effective human resource
management.
2. Helps you avoid common personnel mistakes Qualified HR mangers utilize organization
resources in such a way that helps to avoid common personnel mistakes like the following…
1. Hiring the wrong person for the job
2. Experiencing high turnover
3. Finding employees not doing their best
4. Having your company taken to court because of your discriminatory actions
5. Having your company cited under federal occupational safety laws for unsafe practices
6. Allowing a lack of training to undermine your department’s effectiveness
7. Committing any unfair labor practices
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3. helps you to gain Competitive Advantage
Among all the resources possessed by the organizations it is only Manpower or the Human
resources that create the real difference. Because all organizations can have the same technology,
they can possess same type of financial resources, same sort of raw material can be used to
produce the goods and services but the organizational source that can really create the difference
is work force of the organization. Therefore they are the main sources of innovation creativity in
the organizations that can be used as a competitive advantage. In today’s competitive
environment, these are the people which can create competitive advantageous for the
organizations. The world around us is changing. No longer can we consider our share of the “good
Life” given. If we are to maintain some semblance of that life, we as individual, as organizations,
as society will have to fight actively for it an increasingly competitive global environment. If
organizations are able to mange its work force efficiently/effectively this will be beneficial for all
stakeholders (Organization, Employees and Society).
THE VALUE OF PEOPLE
Manager’s ad economists traditionally have seen human resource management as a necessary
expense, rather than a source of value to their organization. Economic value is usually associated
with capital equipment technology and facilities. However in the changing corporate environment
more and more organizations are awakening to the importance of human capital as the next
competitive advantage. (Competitive advantage is a position of a company in a competitive
landscape that allows the company earning return on investments higher than the cost of
investments. Competitive advantage should be relevant, unique, and sustainable).human capital (
an organizations employees, described in terms of their training experience judgment,
intelligence, relationships and insight)
A barrier to business expansion is not only availability of financial capital but also access to talent-
that is human capital.in summary people are crucial to organizational success and the human and
intellectual capital of an organizations workforce provides and opportunity for substantial
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competitive advantage. “as the resident people experts’ HR leaders are ideally suited to advice
their organization on the best means for realizing their objectives. Decisions such as whom to hire,
what to pay, when training to offer and how to evaluate employee performance directly affects
employee’s motivation, engagement and ability to provide goods and services that customers
value. Companies that attempt to increase their competitiveness by investing in new technology
and promoting quality throughout the organization also invest in state of the art staffing training
and compensation practices these types of practices indicate that employees are viewed as
valuable investments.
The concept of a human resource management implies the employees are resources of the
employer.as a type of resource ,HUMAN CAPITAL meant the organizations employees described in
terms of their training, experience ,judgment ,intelligence and relationship and insight-the
employee characteristics that can add economic value to the organization.in other words whether
it manufactures bicycles or forecast’s the weather, for an org to succeed at what it does, it needs
employees with certain qualities, such as particular kinds of skills and experience. This view means
employees in todays organizations are not interchangeably ,easily replaced parts of a system but
the source of the company success or failure.by influencing who works for the org and how those
people work,HRM therefore contributes to such basic measures of an organizations success as
quality profitability and customer satisfaction fig 1.2 shows this relationship.
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Hrm is critical to the success of an org, because human capital has certain qualities that make it
valuable. interms of business strategy, an org can succeed if it has a sustainable competitive
advantage( is better than competitors something and can hold that advantage over a sustained
period of time) therefore we can conclude that org need the kind of resources that will give them
such an advantage. HR have these necessary qualities:
 HR are valuable. High quality employees provides a needed service as they performance
many critical functions
 HR are rare in the sense that a person with high levels of the needed skills and knowledge
is not common.an org might spend months looking for a talented and experienced
manager or technician
 Hr can’t be imitated.to imitate hr at a high performing competitor, you would have to
figure out which employees are providing the advantage and how. Then you would have to
recruit ppl who can do precisely the same thing and setup the systems that enable those
people to imitate your competitor.
 HR have no good substitute’s. When people are well trained and highly motivated, they
learn, develop their abilities and care about cutomers.it is difficult to imagine another
resource that can match committed and talented employees.
These qualities imply that HR have enormous potential.an org realizes this potential through its
approach to HCM that is how it practices HRM
Effective mgt of HR can form the foundation of a high performance work system- an org in which
technology, organizational structure, people and processes all work together to give an
organization an advantage in the competitive envrionemnt.as technology changes how
organizations manufacture.transport,communicate and keep track of information,hRM must
ensure that the organization s has the right kinds of people to meet the new challenges.maintaing
a high performance work system might include development of training programs, recruitment of
people with new skills sets and establishment of reward for such behaviors as teamwork, flexibility
and learning.
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HR Management Activities
The central focus for HR management must be on contributing to organizational success. As Figure
1—4 depicts, key to enhancing organizational performance is ensuring that human resources
activities support organizational efforts focusing on productivity, service, and quality.
Productivity: As measured by the amount of output per employee, continuous improvement of
productivity has become even more important as global competition has increased. The
productivity of the human resources in an organization is affected significantly by management
efforts, programs, and systems.
The amount of output per unit of input (labor, equipment, and capital). There are many different
ways of measuring productivity. For example, in a factory productivity might be measured based
on the number of hours it takes to produce a good, while in the service sector productivity might
be measured based on the revenue generated by an employee divided by his/her salary.
E.G number of cars over a specified period. example: productivity = (number of cars produced) ÷
(manhours to produce these).
Quality: The quality of products and services delivered significantly affects organizational success
over the long term. If an organization gains a reputation for providing poor-quality products and
services, it reduces its organizational growth and performance. An emphasis on quality requires
continuous changes aimed at improving work processes. That need opens the door for
reengineering the organizational work done by people. Customer value received and satisfaction
become the bases for judging success, along with more traditional HR measures of performance
and efficiency.
Service: Because people frequently produce the products or services offered by an organization,
HR management considerations must be included when identifying service blockages and
redesigning operational processes. Involving all employees, not just managers, in problem solving
often requires changes in corporate culture, leadership styles, and HR policies and practices.
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FIGURE 1—4 Management Activities
Producticity planning,equal employment O,M,S,C,S,O G,E,C,P,S,L,ET
Quality staffing,HRD,C&B,H.S.S
Service Employee & labour R/S
To accomplish these goals, HR management is composed of several groups of
interlinked activities. However, the performance of the HR activities must be done
in the context of the organization, which is represented by the inner rings in Figure
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1—4. Additionally, all managers with HR responsibilities must consider external
Environmental forces—such as legal, political, economic, social, cultural, and technological
Ones—when addressing these activities. These external considerations Are especially important
when HR activities must be managed internationally
The HR activities for which a brief overview follows are:
FUNCTIONS AND RESPONSIBILITIES OF HRM DEPARTMENT
In all but the smallest organizations a HR department is responsible for the functions of HRM. on
average an organization has one HRM staff person for every 100 employees served by the
department however this ratio may vary widely across organizations. Another general guideline is
that a specialized HRM role is often created when an organization has reached the size of approx.
40 employees.table1.1 details the responsibilities of HRM department these responsibilities’
include the practices introduced in fig 1.1 plus two areas of responsibility that support those
practices
1) establishing and administering HRM policies
2) Ensuring compliance with legal r requirements.
Although the HRM dept has responsibility for these areas many of requirement are performed
by supervisors or other inside or outside the organization.no two HRM dept have precisely the
same roles ,because of differences in org sizes and characteristics of the work force, the industry
and managements values.in some companies., the HRM dept handles all the activities listed in
table1.1.in others it may share the roles and duties with managers and supervisor of other depts
such as finance operations or information tech.when managers and supervisor actively perform a
variety of HRM activities the HRM dept usually retains responsibility for consistency and
compliance with all legal requrenment.in some companies the HRM dept actively advises top
mgt.in others the dept responds to top level management decisions and implements staffing
training and compensation activities in light of company strategy and policies.
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Let’s take a look at an overview of the HRM funcitons and some of the options available for
carrying them out.HRM involve both the selection of which options to use and the activities
related to implementations. Later chapters will explore each function in greater details
1. ANALYZING AND DESIGNING JOBS
To produce their given product or service (or set of products or services) companies require that a
number of tasks to be performed. the tasks are grouped in various combination to form jobs,
ideally the tasks should be grouped in a ways that help the organization to operate efficiently and
to obtain people with the right qualifications to do the jobs well. This function involves the
activities of job analysis and job design.
 job analysis is the process of getting detailed information about jobs
 Job design is the process of defining the way work will be performed and the tasks that a
given job requires.
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2. Recruiting and hiring employees
On the basis of job analysis and job design an organization can determine the kinds of
employees it needs. With this knowledge it carries out the function of recruiting and hiring
employees. Recruitment is the process through which the org seeks applicants for
potential employment. Selection refers to the process by which the org attempts to
identify applicants with the necessary knowledge skills abilities and other characteristics
that will help the org achieve its goals.an org makes selection decisions in order to add
employees to its workforce, as well as to transfer existing employees to new positions.at
At some organizations the selection process may focus on specific skills such as experience
with a particular programming language or types of eqioments.at others selection may
focus on general abilities such as the ability to work as a part of a team or find creative
solutions. The focus an org favor’s will affect many choices, from the way the org
measures ability ,to the questions it asks in interviews, to the places it recruits. Table 1.2
lists employability skills, attitudes and behavior’s needed to participate and progress in
today’s dynamics world of work.HRM professionals also provide guidance related to
redeploying employees, termination and outplacement. TABLE 1.2
3. TRAINING AND DEVELOPING EMPLOYEES
Although organization base hiring decisions on candidates existing qualifications, most
orgs provide ways for their employees to broaden or deepen their knowledge skills and
abilities.to do this orgs provide for employee training and development. Training is a
planned effort to enable employees to learn job related knowledge, skills,and behviour.for
example any orgs offers safety training to teach employees safe work habits. Development
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involve acquiring knowledge skills and behavior’s that improve employees a ability to meet
the challenges of a variety of new or existing jobs, including the client and customer
demands of those jobs. Development programs often focus on preparing employees for
management responsibility.
4. MANAGING PERFORMANCE
Managing HRM include keeping track of how well employees are performing relative to
objectives such as job descriptions and goals for a particular positions. The process of
ensuring that employee’s activities and output’s match the organizations goals is called
performance m management. The activities of performance management include
specifying the tasks and outcomes of a job that contribute to the organizations success.
Then various measures are used to compare the employee’s performance over some time
period with the desired performance. Often rewards- the topic of the next section are
developed to encourage good performance.
5. COMPENSATION AND REWARDS
Planning pay and benefits involves many decisions often complex and based on knowledge
of a multitude of legal requirement.an important decision is how much to offer in salary or
wages as opposed to bonuses, commissions and other performance related pay. Other
decision involve which benefits to offer from retirement plans to various kinds of
insurance to other more intangible rewards such opportunities for learning and personal
growth. All such decisions have implications for the organizations bottom line, as well as
for employee motivation
Administering pay and benefits is another big responsibility organizations needs systems
for keeping track of each employees earnings and benefits. Employees need information
about their health plans and retirement’s plans and other benefits. Keeping track of this
involves extensive record keeping and reporting to management, employees and others,
while ensuring compliance with all applicable legislation.
6. MAINTAIN POSITIVE EMPLOYEE AND LABOR RELATIONS
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Organizations often depend on HRM professionals to help them identify and perform
many of the tasks related to maintain positive relations with employees. This function
often includes providing for communication’s to employees.
In orgs where employees belong to union, labor relations entails additional
responsibilities. The org periodically conducts collective bargaining to negotiate an
employment contract with union memebers.the HRM dept also maintains communication
with union representatives to ensure that issues are resolved as they arise.
7. ESTABLISHING AND ADMINISTERING HRM POLICIES
All the HRM activities described so far re require fair and consistent decisions and most
require substantial record keeping. Orgs depends on their HRM dept to help establish
policies related to hiring, discipline and promotions and benefits and the other activities of
HRM
All aspects of HRM require HRM professionals to collect and safeguards information. From
the preparing of employee handbooks to processing job applications, performance
appraisals, benefits enrolment and government mandated reports, handling records about
employees requires accuracy as well as sensitivity to employee privacy
8. ENSURING COMPLIANCE WITH FEDERAL AND PROVINCIAL LEGISLATION
Some gov have laws and regulations concerning the treatment of employees. These laws
govern such matters as human rights and employment equity, employee’s safety and
health, employee’s compensation and benefits and employee privacy. Most managers
depend on HRM professional’s to help them keep up to date and on track with these
requirements. Ensuring compliance with laws requires that HRM professionals keep watch
over a rapidly changing legal landscape.
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HR Management in Transition
The field of HR management is undergoing transition because organizations
themselves are changing. As a result, the terminology in the field is in transition.
Traditionally called personnel departments, many of these entities have been renamed
human resource departments. But more than the name has changed as HR
management continues to be the “people” focus in organizations.
HR as Employee Advocate
Traditionally, HR has been viewed as the “employee advocate” in organizations.9 As the voice for
employee concerns, HR professionals traditionally have been seen as “company morale officers”
who do not understand the business realities of the organizations and do not contribute
measurably to the strategic success of the business. Some have even suggested dismantling HR
departments totally because they contribute little to the productivity and growth of
organizations.10 Despite this view, HR plays a valuable role as the “champion” for employees and
employee issues. One example is the stress that many employees feel when balancing work and
family pressures. HR professionals must be the advocate for employees, recognizing that they
have other lives besides work, and ensuring that organizational policies and practices consider
these pressures. Otherwise, in many cases, the organization loses valuable human resources who
do not want to continue working in a “family-unfriendly” environment. Closely related, HR
professionals spend considerable time on HR “crisis management” dealing with employee
problems that are both work and non-work related.11 Another facet of employee advocacy is to
ensure that fair and equitable treatment is given to people regardless of their personal
background or circumstances. 12 Some entity inside the organization must monitor employee
situations and respond to employee complaints about unfair treatment or inappropriate actions.
Otherwise, employers would face even more lawsuits and regulatory complaints than they do
now. As HR management has changed, it has become clear that there is a need for HR to balance
being the advocate for employees and being a business contributor. 13 What this balancing means
is that it is vital for HR professionals to represent employee issues and concerns in the
organization. However, just being an effective employee advocate is not sufficient. Instead, the HR
professionals must be strategic contributors, partners with operating managers, administratively
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efficient, and cost effective. As Figure 1—5 depicts, HR management has three roles in
organizations. The traditional administrative and operational roles of HR management have
broadened to include more strategic facets. It should be emphasized that as HR roles shift to the
right, the previous roles still must be met and the additional ones performed. Also, the continuum
shows that the primary focus of HR as it becomes more strategic, changes to considerations with
longer time horizons and the broader impact of HR decisions.
Administrative Role of HR Management
The administrative role of HR management is heavily oriented to processing and record keeping.
Maintaining employee files and HR-related databases, processing employee benefits claims,
answering questions about tuition and/or sick leave policies, and compiling and submitting
required state and federal government reports are all examples of the administrative nature of HR
management. These activities must be performed efficiently and promptly. However, this role
resulted in HR management in some organizations getting the reputation of paper shufflers who
primarily tell managers and employees what cannot be done. If limited to the administrative role,
HR staff are seen primarily as clerical and lower-level administrative contributors to the
organization.
in some organizations these administrative functions are being outsourced to
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external providers, rather than being done inside the HR departments. Also, technology
is being used to automate many of the administrative tasks
Operational Role of HR Management
Operational activities are tactical in nature. Compliance with equal employment opportunity and
other laws must be ensured, employment applications must be processed, current openings must
be filled through interviews, supervisors must be trained, safety problems must be resolved, and
wages and salaries must be administered. In short, a wide variety of the efforts performed
typically are associated with coordinating the management of HR activities with the actions of
managers and supervisors throughout the organization. This operational emphasis still exists in
some organizations, partly because of individual limitations of HR staff members and partly
because of top management’s resistance to an expanded HR role. Typically, the operational role
requires HR professionals to identify and implement Operational programs and policies in the
organization. They are the major implementers of the HR portion of organizational strategic plans
developed by top Management, rather than being deeply involved in developing those strategic
plans.Cost-effective as well
Strategic Role of HR Management
Organizational human resources have grown as a strategic emphasis because effective use of
people in the organization can provide a competitive advantage, both domestically and abroad.
The strategic role of HR management emphasizes that the people in an organization are valuable
resources representing significant organizational investments. For HR to play a strategic role it
must focus on the longer-term implications of HR issues.15 How changing workforce
demographics and workforce shortages will affect the organization, and what means will be used
to address the shortages over time, are illustrations of the strategic role. The importance of this
role has been the subject of extensive discussion recently in the field, and those discussions have
emphasized the need for HR management to become a greater strategic contributor to the
success of organizations
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HR Management Challenges
The environment faced by HR management is a challenging one; changes are occurring rapidly
across a wide range of issues. A study by the Hudson Institute, entitled Workforce 2020, has
highlighted some of the most important workforce issues. From that and other sources, it appears
that the most prevalent challenges facing HR management are as follows:
1. Economic and technological change
2. Globalization of business
3. Workforce availability and quality concerns
4. Demographics and diversity issues
5. Organizational restructuring
The environment faced by human resource is challenging one; changes are occurring rapidly
across a wide range of issues. It appears that the most prevalent challenges facing HR
management are as follows:
1. Economic and technological change:
Several economic changes have occurred that have altered employment and occupational
patterns in the United States. A major change is the shift of jobs from manufacturing and
agriculture to service industries and telecommunications. This shift has meant that some
organizations have had to reduce the number of employees, while others have had to attract and
retain employees with different capabilities than previously were needed. Additionally, pressures
from global competitors have forced many U.S. firms to close facilities, adapt their management
practices, and increase productivity and decrease labor costs in order to become more
competitive. Finally, the explosive growth of information technology, particularly which linked to
the Internet, has forced many changes throughout organizations of all types.
2. GLOBALIZATION
A poor product or service will not survive today because of the nature of globalization. Markets
have been liberalized throughout the world. The European communist block has imploded
providing vast new
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Potential markets. Trading agreements through the World Trade Association have allowed goods
to be marketed in most countries with tariffs and barriers eliminated or vastly reduced. The
Asian/Pacific region has grown at an extraordinary pace, especially China, providing a vast range of
competitive or alternative goods for the world market at lower prices. This competition has led to
organizations taking far more care of their labor costs by either increasing productivity,
eliminating wasteful bureaucracies and jobs which add no value, or outsourcing to cheaper
suppliers. All of these actions affect the way people are employed. Handy (1994) created a new
equation for success _ 1⁄2 workforce, paid twice as much, producing three times as much. With
increased competition, organizations are finding that a good product or service
3. Workforce Availability and Quality
In many parts of the United States today, significant workforce shortages exist due to an
inadequate supply of workers with the skills needed to perform the jobs being added. In the last
several years news reports have regularly described tight labor markets with unemployment rates
in some locales below 3%. Also, continuously there are reports by industries and companies facing
shortages of qualified, experienced workers. Jobs with extreme supply shortages for several years
have included specialized information systems technicians, physical therapists, plumbers, air
conditioning repair technicians, and many others. Consequently, HR professionals have faced
greater pressures to recruit and train workers.
4. Demographics and Diversity
The U.S. workforce has been changing dramatically. It is more diverse racially, women are in the
labor force in much greater numbers than ever before, and the average age of the workforce is
now considerably older than before. As a result of these demographic shifts, HR management in
organizations has had to adapt to a more varied labor force both externally and internally. The
three most prominent dimensions of the demographic shifts affecting organizations are
highlighted next.
5. Organizational Restructuring
Many organizations have restructured in the past few years in order to become more competitive.
Also, mergers and acquisitions of firms in the same industries have been made to ensure global
competitiveness. The “mega-mergers” in the banking, petroleum, and telecommunications
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industries have been very visible, but mergers and acquisitions of firms in many other industries
have increased in recent years. As part of the organizational changes, many organizations have
“rightsized” either by (1) eliminating layers of managers, (2) closing facilities, (3) merging with
other organizations, or (4) outplacing workers. A common transformation has been to flatten
organizations by removing several layers of management and to improve productivity, quality, and
service while also reducing costs. As a result, jobs are redesigned and people affected. One of the
challenges that HR management faces with organizational restructuring is dealing with the human
consequences of change. The human cost associated with downsizing has been much discussed in
the popular press: a survivor’s mentality for those who remain,
unfulfilled cost savings estimates, loss of loyalty, and many people looking for new jobs.
Whereas many large firms have cut jobs by reducing their workforces, many smaller firms have
continued to create jobs. This is particularly true in hightechnology industries, such as software
development. These entrepreneurial firms are faced with growth, while trying to attract sufficient
workers with flexible capabilities and to conserve financial resources. More discussion on HR’s role
in organizational restructurings is found in Chapter 2, focusing on strategic HR planning.
Consequently, in both large and small organizations the management of HR activities is crucial.
ASSIGNMENT: - 5 marks (group assignment)
1. Functions of management (planning,organizing,staffing,leading,controlling)
2. Types of managers
3. Managerial skills

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HRm

  • 1. INTRODUCTION TO HRM 1 | P a g e CHAPTER 1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT As human resources have become viewed as more critical to organizational success, many organizations have realized that it is the people in an organization that can provide a competitive advantage. Throughout the book it will be emphasized that the people as human resources contribute to and affect the competitive success of the organization. Human Resource (HR) management deals with the “Design of formal systems in an organization to ensure the effective and efficient use of human talent to accomplish organizational goals. In an organization, the management of human resources means that they must be recruited, compensated, trained, and developed”. A basic concept of management states that manager works in organizations. Organization has three basic components, people, purpose, and structure. As we said that HRM is the management of people working in an organization, it is a subject related to human. For simplicity, we can say that it is the management of humans or people. it is a managerial function that tries to match an organization’s needs to the skills and abilities of its employees. Human resource management is the process of acquiring, training, appraising, and compensating employees and of attending to their labor relations, health and safety and fairness concern.  Let’s see what is meant by the three key term:- human, resource, and management. • Human (employees working in an organization) • Resources (Human, Physical, Financial, Technical, Informational etc) • Management (Function of Planning, Organizing, Leading & Controlling of organizational Resources to accomplish goals efficiently and effectively) What is human resource management? As we said that HRM is the management of people working in an organization, it is a subject related to human. For simplicity, we can say that it is the management of humans or people. HRM is a managerial function that tries to match an organization’s needs to the skills and abilities of its employees. Human Resource Management is responsible for how people are managed in the
  • 2. INTRODUCTION TO HRM 2 | P a g e organizations. It is responsible for bringing people in organization helping them perform their work, compensating them for their work and solving problems that arise. Growing Importance of HRM The success of organizations increasingly depends on people-embodied know-how- the knowledge, skill, Attitude. Nature of HRM:  HRM involves management functions like planning, organizing, staffing, directing and controlling.  It involves procurement, development, maintenance and management of human resource.  It helps to achieve individual, organizational and social objectives.  HRM is a mighty disciplinary subject. It includes the study of management psychology communication, economics and sociology.  It involves team spirit and team work. HRM plays important role in creating organizations and helping them survive. Our world is an Organizational world. We are surrounded by organizations and we participate in them as members,Employees, customers, and clients. Most of our life is spent in organization, and they supply the goods and services on which we depend to live. Organizations on the other hand depend on people, and without people, they would disappear. Factors Contributing to the Growing Importance of HRM a. Accommodation to workers' needs Workers are demanding that organizations accommodate their personal needs by instituting such programs as flexible work schedules, parental leave, child-care and elder-care assistance, and job sharing. The human resource department plays a central role in establishing and implementing policies designed to reduce the friction between organizational demands and family responsibilities.
  • 3. INTRODUCTION TO HRM 3 | P a g e b. Increased complexity of the Manager’s job Management has become an increasingly complex and demanding job for many reasons, including foreign competition, new technology, expanding scientific information, and rapid change. Therefore, organizations frequently ask human resource managers for assistance in making strategic business decisions and in matching the distinctive competencies of the firm's human resources to the mission of the organization. Executives need assistance from the human resource department in matters of recruitment, performance evaluation, compensation, and discipline. c. Legislation and litigation The enactment of state laws has contributed enormously to the proliferation and importance of human resource functions. The record keeping and reporting requirements of the laws are so extensive that to comply with them, many human resource departments must work countless hours and often must hire additional staff. Four areas that have been influenced most by legislation include equal employment, Compensation, safety, and labor relations. An organization's failure to comply with laws regulating these areas can result in extremely costly back-pay awards, class action suits, and penalties. d. Consistency Human resource policies help to maintain consistency and equity within an organization. Consistency is particularly important in compensation and promotion decisions. When managers make compensation decisions without consulting the human resource department the salary structure tends to become very uneven and unfair promotion decisions also may be handled unfairly when the HR department does not coordinate the decision of individual manger. e. Expertise Now days there exist sophisticated personnel activities that require special expertise. For example, researchers have developed complex procedures for making employee-selection decisions; statistical formulas that combine interviews, test scores, and application-blank information have
  • 4. INTRODUCTION TO HRM 4 | P a g e replaced the subjective interviews traditionally used in making selection decisions. Similarly, many organizations have developed compensation systems with elaborate benefits packages to replace simple hourly pay or piece rate incentive system f. Cost of Human Resource Human resource activities have become increasingly important because of the high cost of personal problem. The largest single expense in most organizations is labor cost, which is often considerably higher than the necessary because of such problems as absenteeism tardiness and discrimination. Why are we concerned with HRM? 1. Helps you get results - through others. Different managerial techniques help mangers to direct the performance of employees in desirable direction in order to achieve the organizational objectives. Through the efforts of others working in an organization,managers get things done that require effective human resource management. 2. Helps you avoid common personnel mistakes Qualified HR mangers utilize organization resources in such a way that helps to avoid common personnel mistakes like the following… 1. Hiring the wrong person for the job 2. Experiencing high turnover 3. Finding employees not doing their best 4. Having your company taken to court because of your discriminatory actions 5. Having your company cited under federal occupational safety laws for unsafe practices 6. Allowing a lack of training to undermine your department’s effectiveness 7. Committing any unfair labor practices
  • 5. INTRODUCTION TO HRM 5 | P a g e 3. helps you to gain Competitive Advantage Among all the resources possessed by the organizations it is only Manpower or the Human resources that create the real difference. Because all organizations can have the same technology, they can possess same type of financial resources, same sort of raw material can be used to produce the goods and services but the organizational source that can really create the difference is work force of the organization. Therefore they are the main sources of innovation creativity in the organizations that can be used as a competitive advantage. In today’s competitive environment, these are the people which can create competitive advantageous for the organizations. The world around us is changing. No longer can we consider our share of the “good Life” given. If we are to maintain some semblance of that life, we as individual, as organizations, as society will have to fight actively for it an increasingly competitive global environment. If organizations are able to mange its work force efficiently/effectively this will be beneficial for all stakeholders (Organization, Employees and Society). THE VALUE OF PEOPLE Manager’s ad economists traditionally have seen human resource management as a necessary expense, rather than a source of value to their organization. Economic value is usually associated with capital equipment technology and facilities. However in the changing corporate environment more and more organizations are awakening to the importance of human capital as the next competitive advantage. (Competitive advantage is a position of a company in a competitive landscape that allows the company earning return on investments higher than the cost of investments. Competitive advantage should be relevant, unique, and sustainable).human capital ( an organizations employees, described in terms of their training experience judgment, intelligence, relationships and insight) A barrier to business expansion is not only availability of financial capital but also access to talent- that is human capital.in summary people are crucial to organizational success and the human and intellectual capital of an organizations workforce provides and opportunity for substantial
  • 6. INTRODUCTION TO HRM 6 | P a g e competitive advantage. “as the resident people experts’ HR leaders are ideally suited to advice their organization on the best means for realizing their objectives. Decisions such as whom to hire, what to pay, when training to offer and how to evaluate employee performance directly affects employee’s motivation, engagement and ability to provide goods and services that customers value. Companies that attempt to increase their competitiveness by investing in new technology and promoting quality throughout the organization also invest in state of the art staffing training and compensation practices these types of practices indicate that employees are viewed as valuable investments. The concept of a human resource management implies the employees are resources of the employer.as a type of resource ,HUMAN CAPITAL meant the organizations employees described in terms of their training, experience ,judgment ,intelligence and relationship and insight-the employee characteristics that can add economic value to the organization.in other words whether it manufactures bicycles or forecast’s the weather, for an org to succeed at what it does, it needs employees with certain qualities, such as particular kinds of skills and experience. This view means employees in todays organizations are not interchangeably ,easily replaced parts of a system but the source of the company success or failure.by influencing who works for the org and how those people work,HRM therefore contributes to such basic measures of an organizations success as quality profitability and customer satisfaction fig 1.2 shows this relationship.
  • 7. INTRODUCTION TO HRM 7 | P a g e Hrm is critical to the success of an org, because human capital has certain qualities that make it valuable. interms of business strategy, an org can succeed if it has a sustainable competitive advantage( is better than competitors something and can hold that advantage over a sustained period of time) therefore we can conclude that org need the kind of resources that will give them such an advantage. HR have these necessary qualities:  HR are valuable. High quality employees provides a needed service as they performance many critical functions  HR are rare in the sense that a person with high levels of the needed skills and knowledge is not common.an org might spend months looking for a talented and experienced manager or technician  Hr can’t be imitated.to imitate hr at a high performing competitor, you would have to figure out which employees are providing the advantage and how. Then you would have to recruit ppl who can do precisely the same thing and setup the systems that enable those people to imitate your competitor.  HR have no good substitute’s. When people are well trained and highly motivated, they learn, develop their abilities and care about cutomers.it is difficult to imagine another resource that can match committed and talented employees. These qualities imply that HR have enormous potential.an org realizes this potential through its approach to HCM that is how it practices HRM Effective mgt of HR can form the foundation of a high performance work system- an org in which technology, organizational structure, people and processes all work together to give an organization an advantage in the competitive envrionemnt.as technology changes how organizations manufacture.transport,communicate and keep track of information,hRM must ensure that the organization s has the right kinds of people to meet the new challenges.maintaing a high performance work system might include development of training programs, recruitment of people with new skills sets and establishment of reward for such behaviors as teamwork, flexibility and learning.
  • 8. INTRODUCTION TO HRM 8 | P a g e HR Management Activities The central focus for HR management must be on contributing to organizational success. As Figure 1—4 depicts, key to enhancing organizational performance is ensuring that human resources activities support organizational efforts focusing on productivity, service, and quality. Productivity: As measured by the amount of output per employee, continuous improvement of productivity has become even more important as global competition has increased. The productivity of the human resources in an organization is affected significantly by management efforts, programs, and systems. The amount of output per unit of input (labor, equipment, and capital). There are many different ways of measuring productivity. For example, in a factory productivity might be measured based on the number of hours it takes to produce a good, while in the service sector productivity might be measured based on the revenue generated by an employee divided by his/her salary. E.G number of cars over a specified period. example: productivity = (number of cars produced) ÷ (manhours to produce these). Quality: The quality of products and services delivered significantly affects organizational success over the long term. If an organization gains a reputation for providing poor-quality products and services, it reduces its organizational growth and performance. An emphasis on quality requires continuous changes aimed at improving work processes. That need opens the door for reengineering the organizational work done by people. Customer value received and satisfaction become the bases for judging success, along with more traditional HR measures of performance and efficiency. Service: Because people frequently produce the products or services offered by an organization, HR management considerations must be included when identifying service blockages and redesigning operational processes. Involving all employees, not just managers, in problem solving often requires changes in corporate culture, leadership styles, and HR policies and practices.
  • 9. INTRODUCTION TO HRM 9 | P a g e FIGURE 1—4 Management Activities Producticity planning,equal employment O,M,S,C,S,O G,E,C,P,S,L,ET Quality staffing,HRD,C&B,H.S.S Service Employee & labour R/S To accomplish these goals, HR management is composed of several groups of interlinked activities. However, the performance of the HR activities must be done in the context of the organization, which is represented by the inner rings in Figure
  • 10. INTRODUCTION TO HRM 10 | P a g e 1—4. Additionally, all managers with HR responsibilities must consider external Environmental forces—such as legal, political, economic, social, cultural, and technological Ones—when addressing these activities. These external considerations Are especially important when HR activities must be managed internationally The HR activities for which a brief overview follows are: FUNCTIONS AND RESPONSIBILITIES OF HRM DEPARTMENT In all but the smallest organizations a HR department is responsible for the functions of HRM. on average an organization has one HRM staff person for every 100 employees served by the department however this ratio may vary widely across organizations. Another general guideline is that a specialized HRM role is often created when an organization has reached the size of approx. 40 employees.table1.1 details the responsibilities of HRM department these responsibilities’ include the practices introduced in fig 1.1 plus two areas of responsibility that support those practices 1) establishing and administering HRM policies 2) Ensuring compliance with legal r requirements. Although the HRM dept has responsibility for these areas many of requirement are performed by supervisors or other inside or outside the organization.no two HRM dept have precisely the same roles ,because of differences in org sizes and characteristics of the work force, the industry and managements values.in some companies., the HRM dept handles all the activities listed in table1.1.in others it may share the roles and duties with managers and supervisor of other depts such as finance operations or information tech.when managers and supervisor actively perform a variety of HRM activities the HRM dept usually retains responsibility for consistency and compliance with all legal requrenment.in some companies the HRM dept actively advises top mgt.in others the dept responds to top level management decisions and implements staffing training and compensation activities in light of company strategy and policies.
  • 11. INTRODUCTION TO HRM 11 | P a g e Let’s take a look at an overview of the HRM funcitons and some of the options available for carrying them out.HRM involve both the selection of which options to use and the activities related to implementations. Later chapters will explore each function in greater details 1. ANALYZING AND DESIGNING JOBS To produce their given product or service (or set of products or services) companies require that a number of tasks to be performed. the tasks are grouped in various combination to form jobs, ideally the tasks should be grouped in a ways that help the organization to operate efficiently and to obtain people with the right qualifications to do the jobs well. This function involves the activities of job analysis and job design.  job analysis is the process of getting detailed information about jobs  Job design is the process of defining the way work will be performed and the tasks that a given job requires.
  • 12. INTRODUCTION TO HRM 12 | P a g e 2. Recruiting and hiring employees On the basis of job analysis and job design an organization can determine the kinds of employees it needs. With this knowledge it carries out the function of recruiting and hiring employees. Recruitment is the process through which the org seeks applicants for potential employment. Selection refers to the process by which the org attempts to identify applicants with the necessary knowledge skills abilities and other characteristics that will help the org achieve its goals.an org makes selection decisions in order to add employees to its workforce, as well as to transfer existing employees to new positions.at At some organizations the selection process may focus on specific skills such as experience with a particular programming language or types of eqioments.at others selection may focus on general abilities such as the ability to work as a part of a team or find creative solutions. The focus an org favor’s will affect many choices, from the way the org measures ability ,to the questions it asks in interviews, to the places it recruits. Table 1.2 lists employability skills, attitudes and behavior’s needed to participate and progress in today’s dynamics world of work.HRM professionals also provide guidance related to redeploying employees, termination and outplacement. TABLE 1.2 3. TRAINING AND DEVELOPING EMPLOYEES Although organization base hiring decisions on candidates existing qualifications, most orgs provide ways for their employees to broaden or deepen their knowledge skills and abilities.to do this orgs provide for employee training and development. Training is a planned effort to enable employees to learn job related knowledge, skills,and behviour.for example any orgs offers safety training to teach employees safe work habits. Development
  • 13. INTRODUCTION TO HRM 13 | P a g e involve acquiring knowledge skills and behavior’s that improve employees a ability to meet the challenges of a variety of new or existing jobs, including the client and customer demands of those jobs. Development programs often focus on preparing employees for management responsibility. 4. MANAGING PERFORMANCE Managing HRM include keeping track of how well employees are performing relative to objectives such as job descriptions and goals for a particular positions. The process of ensuring that employee’s activities and output’s match the organizations goals is called performance m management. The activities of performance management include specifying the tasks and outcomes of a job that contribute to the organizations success. Then various measures are used to compare the employee’s performance over some time period with the desired performance. Often rewards- the topic of the next section are developed to encourage good performance. 5. COMPENSATION AND REWARDS Planning pay and benefits involves many decisions often complex and based on knowledge of a multitude of legal requirement.an important decision is how much to offer in salary or wages as opposed to bonuses, commissions and other performance related pay. Other decision involve which benefits to offer from retirement plans to various kinds of insurance to other more intangible rewards such opportunities for learning and personal growth. All such decisions have implications for the organizations bottom line, as well as for employee motivation Administering pay and benefits is another big responsibility organizations needs systems for keeping track of each employees earnings and benefits. Employees need information about their health plans and retirement’s plans and other benefits. Keeping track of this involves extensive record keeping and reporting to management, employees and others, while ensuring compliance with all applicable legislation. 6. MAINTAIN POSITIVE EMPLOYEE AND LABOR RELATIONS
  • 14. INTRODUCTION TO HRM 14 | P a g e Organizations often depend on HRM professionals to help them identify and perform many of the tasks related to maintain positive relations with employees. This function often includes providing for communication’s to employees. In orgs where employees belong to union, labor relations entails additional responsibilities. The org periodically conducts collective bargaining to negotiate an employment contract with union memebers.the HRM dept also maintains communication with union representatives to ensure that issues are resolved as they arise. 7. ESTABLISHING AND ADMINISTERING HRM POLICIES All the HRM activities described so far re require fair and consistent decisions and most require substantial record keeping. Orgs depends on their HRM dept to help establish policies related to hiring, discipline and promotions and benefits and the other activities of HRM All aspects of HRM require HRM professionals to collect and safeguards information. From the preparing of employee handbooks to processing job applications, performance appraisals, benefits enrolment and government mandated reports, handling records about employees requires accuracy as well as sensitivity to employee privacy 8. ENSURING COMPLIANCE WITH FEDERAL AND PROVINCIAL LEGISLATION Some gov have laws and regulations concerning the treatment of employees. These laws govern such matters as human rights and employment equity, employee’s safety and health, employee’s compensation and benefits and employee privacy. Most managers depend on HRM professional’s to help them keep up to date and on track with these requirements. Ensuring compliance with laws requires that HRM professionals keep watch over a rapidly changing legal landscape.
  • 15. INTRODUCTION TO HRM 15 | P a g e HR Management in Transition The field of HR management is undergoing transition because organizations themselves are changing. As a result, the terminology in the field is in transition. Traditionally called personnel departments, many of these entities have been renamed human resource departments. But more than the name has changed as HR management continues to be the “people” focus in organizations. HR as Employee Advocate Traditionally, HR has been viewed as the “employee advocate” in organizations.9 As the voice for employee concerns, HR professionals traditionally have been seen as “company morale officers” who do not understand the business realities of the organizations and do not contribute measurably to the strategic success of the business. Some have even suggested dismantling HR departments totally because they contribute little to the productivity and growth of organizations.10 Despite this view, HR plays a valuable role as the “champion” for employees and employee issues. One example is the stress that many employees feel when balancing work and family pressures. HR professionals must be the advocate for employees, recognizing that they have other lives besides work, and ensuring that organizational policies and practices consider these pressures. Otherwise, in many cases, the organization loses valuable human resources who do not want to continue working in a “family-unfriendly” environment. Closely related, HR professionals spend considerable time on HR “crisis management” dealing with employee problems that are both work and non-work related.11 Another facet of employee advocacy is to ensure that fair and equitable treatment is given to people regardless of their personal background or circumstances. 12 Some entity inside the organization must monitor employee situations and respond to employee complaints about unfair treatment or inappropriate actions. Otherwise, employers would face even more lawsuits and regulatory complaints than they do now. As HR management has changed, it has become clear that there is a need for HR to balance being the advocate for employees and being a business contributor. 13 What this balancing means is that it is vital for HR professionals to represent employee issues and concerns in the organization. However, just being an effective employee advocate is not sufficient. Instead, the HR professionals must be strategic contributors, partners with operating managers, administratively
  • 16. INTRODUCTION TO HRM 16 | P a g e efficient, and cost effective. As Figure 1—5 depicts, HR management has three roles in organizations. The traditional administrative and operational roles of HR management have broadened to include more strategic facets. It should be emphasized that as HR roles shift to the right, the previous roles still must be met and the additional ones performed. Also, the continuum shows that the primary focus of HR as it becomes more strategic, changes to considerations with longer time horizons and the broader impact of HR decisions. Administrative Role of HR Management The administrative role of HR management is heavily oriented to processing and record keeping. Maintaining employee files and HR-related databases, processing employee benefits claims, answering questions about tuition and/or sick leave policies, and compiling and submitting required state and federal government reports are all examples of the administrative nature of HR management. These activities must be performed efficiently and promptly. However, this role resulted in HR management in some organizations getting the reputation of paper shufflers who primarily tell managers and employees what cannot be done. If limited to the administrative role, HR staff are seen primarily as clerical and lower-level administrative contributors to the organization. in some organizations these administrative functions are being outsourced to
  • 17. INTRODUCTION TO HRM 17 | P a g e external providers, rather than being done inside the HR departments. Also, technology is being used to automate many of the administrative tasks Operational Role of HR Management Operational activities are tactical in nature. Compliance with equal employment opportunity and other laws must be ensured, employment applications must be processed, current openings must be filled through interviews, supervisors must be trained, safety problems must be resolved, and wages and salaries must be administered. In short, a wide variety of the efforts performed typically are associated with coordinating the management of HR activities with the actions of managers and supervisors throughout the organization. This operational emphasis still exists in some organizations, partly because of individual limitations of HR staff members and partly because of top management’s resistance to an expanded HR role. Typically, the operational role requires HR professionals to identify and implement Operational programs and policies in the organization. They are the major implementers of the HR portion of organizational strategic plans developed by top Management, rather than being deeply involved in developing those strategic plans.Cost-effective as well Strategic Role of HR Management Organizational human resources have grown as a strategic emphasis because effective use of people in the organization can provide a competitive advantage, both domestically and abroad. The strategic role of HR management emphasizes that the people in an organization are valuable resources representing significant organizational investments. For HR to play a strategic role it must focus on the longer-term implications of HR issues.15 How changing workforce demographics and workforce shortages will affect the organization, and what means will be used to address the shortages over time, are illustrations of the strategic role. The importance of this role has been the subject of extensive discussion recently in the field, and those discussions have emphasized the need for HR management to become a greater strategic contributor to the success of organizations
  • 18. INTRODUCTION TO HRM 18 | P a g e HR Management Challenges The environment faced by HR management is a challenging one; changes are occurring rapidly across a wide range of issues. A study by the Hudson Institute, entitled Workforce 2020, has highlighted some of the most important workforce issues. From that and other sources, it appears that the most prevalent challenges facing HR management are as follows: 1. Economic and technological change 2. Globalization of business 3. Workforce availability and quality concerns 4. Demographics and diversity issues 5. Organizational restructuring The environment faced by human resource is challenging one; changes are occurring rapidly across a wide range of issues. It appears that the most prevalent challenges facing HR management are as follows: 1. Economic and technological change: Several economic changes have occurred that have altered employment and occupational patterns in the United States. A major change is the shift of jobs from manufacturing and agriculture to service industries and telecommunications. This shift has meant that some organizations have had to reduce the number of employees, while others have had to attract and retain employees with different capabilities than previously were needed. Additionally, pressures from global competitors have forced many U.S. firms to close facilities, adapt their management practices, and increase productivity and decrease labor costs in order to become more competitive. Finally, the explosive growth of information technology, particularly which linked to the Internet, has forced many changes throughout organizations of all types. 2. GLOBALIZATION A poor product or service will not survive today because of the nature of globalization. Markets have been liberalized throughout the world. The European communist block has imploded providing vast new
  • 19. INTRODUCTION TO HRM 19 | P a g e Potential markets. Trading agreements through the World Trade Association have allowed goods to be marketed in most countries with tariffs and barriers eliminated or vastly reduced. The Asian/Pacific region has grown at an extraordinary pace, especially China, providing a vast range of competitive or alternative goods for the world market at lower prices. This competition has led to organizations taking far more care of their labor costs by either increasing productivity, eliminating wasteful bureaucracies and jobs which add no value, or outsourcing to cheaper suppliers. All of these actions affect the way people are employed. Handy (1994) created a new equation for success _ 1⁄2 workforce, paid twice as much, producing three times as much. With increased competition, organizations are finding that a good product or service 3. Workforce Availability and Quality In many parts of the United States today, significant workforce shortages exist due to an inadequate supply of workers with the skills needed to perform the jobs being added. In the last several years news reports have regularly described tight labor markets with unemployment rates in some locales below 3%. Also, continuously there are reports by industries and companies facing shortages of qualified, experienced workers. Jobs with extreme supply shortages for several years have included specialized information systems technicians, physical therapists, plumbers, air conditioning repair technicians, and many others. Consequently, HR professionals have faced greater pressures to recruit and train workers. 4. Demographics and Diversity The U.S. workforce has been changing dramatically. It is more diverse racially, women are in the labor force in much greater numbers than ever before, and the average age of the workforce is now considerably older than before. As a result of these demographic shifts, HR management in organizations has had to adapt to a more varied labor force both externally and internally. The three most prominent dimensions of the demographic shifts affecting organizations are highlighted next. 5. Organizational Restructuring Many organizations have restructured in the past few years in order to become more competitive. Also, mergers and acquisitions of firms in the same industries have been made to ensure global competitiveness. The “mega-mergers” in the banking, petroleum, and telecommunications
  • 20. INTRODUCTION TO HRM 20 | P a g e industries have been very visible, but mergers and acquisitions of firms in many other industries have increased in recent years. As part of the organizational changes, many organizations have “rightsized” either by (1) eliminating layers of managers, (2) closing facilities, (3) merging with other organizations, or (4) outplacing workers. A common transformation has been to flatten organizations by removing several layers of management and to improve productivity, quality, and service while also reducing costs. As a result, jobs are redesigned and people affected. One of the challenges that HR management faces with organizational restructuring is dealing with the human consequences of change. The human cost associated with downsizing has been much discussed in the popular press: a survivor’s mentality for those who remain, unfulfilled cost savings estimates, loss of loyalty, and many people looking for new jobs. Whereas many large firms have cut jobs by reducing their workforces, many smaller firms have continued to create jobs. This is particularly true in hightechnology industries, such as software development. These entrepreneurial firms are faced with growth, while trying to attract sufficient workers with flexible capabilities and to conserve financial resources. More discussion on HR’s role in organizational restructurings is found in Chapter 2, focusing on strategic HR planning. Consequently, in both large and small organizations the management of HR activities is crucial. ASSIGNMENT: - 5 marks (group assignment) 1. Functions of management (planning,organizing,staffing,leading,controlling) 2. Types of managers 3. Managerial skills