HRM-Course Material.doc - CHAPTER I HUMAN RESOURCE MANAGEMENT\"Human Resource Management is a process consisting of acquisition development motivation

HRM-Course Material.doc - CHAPTER I HUMAN RESOURCE...

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Unformatted text preview: CHAPTER I: HUMAN RESOURCE MANAGEMENT "Human Resource Management is a process consisting of acquisition, development, motivation and maintenance of Human Resource." —David A. Decenzo and Steven P. Robbins LEARNING OBJECTIVES After reading this chapter you should understand: ■ Conceptual clarity of human resource management ■ Definitions of human resource management ■ Role of human factor in management ■ Importance of human resources in industrial enterprise ■ Major activities under human resource management ■ Structure of human resource department 1.1 Introduction: Human Resource Management or HRM is the management of purposeful source, i.e. Human beings. The speedy changes in technology and economy are undergoing. The recent scenario of economic liberalization and process of liberalization increased the importance of human resource management by unifold. The approach is to humanize management. The world over in general of Ethiopia in particular the human resource development and human resource management gained an importance and is viewed as a fundamental aspect of management. The more stress is now given on human resource development. The effective human resource utilization and human resource development become very essential. It is the primary task of any management in the organizations. Human resource development is now viewed as the key to economic development. People are vital elements of any organization. No one can ignore them rather one has to develop them. A visit to such organization, a college, an office, a school, a departmental store, a factory, military cantonment, a hospital, political party's office, or even religious places, a mosque, a church, a temple would realize the importance of people there and the role they play. So it is certain that human resources are all the more important. They are an asset to be drawn upon. The human resource development has become a buzzword for any organization now. 1 What do the human resources mean? Leon C. Megginson has described human resources as, "the total knowledge, skills, creative abilities, talents and attitudes of an organization's workforce, as well as the value, attitudes and beliefs of the individual involved." Human resources are therefore source of strength, ability, competence, skill, creativity, knowledge, attitude, aptitude, values, beliefs, talent, efficiency, decisionmaking prowess, valor, zeal, enthusiasm, etc. If these qualities among human resources are tapped and developed, they can be effectively utilized for accomplishment of organizational, individual, societal and national objectives. Human resources are the assets or wealth of the country whom it can rely upon at any time. The need of the hour is to develop these resources. Human resources development is, therefore, a continuous process of sharpening the skills, knowledge of the people adopted by almost all organizations. Human resources are crucial and most vital elements in any organization. It is, therefore, presumed that the expenses incurred on human resource development and training is investment, the investment, which yields an income. The effective human resources management and their development are very essential for the very growth and development of the organization. 1.2 Meaning of Human Resource Management 1.2.1 Definitions of Terms Following definitions of important terms are given below: (a) Management The term management is defined by: "Management is the creation and control of technological and human environment of an organization in which human skill and capabilities of individual and groups find full scope for their effective use in order to accomplish the objective for which an enterprise has been set up. It is involved in the relationship of individuals, groups, organizations and environment." —Prof. A. Das Gupta "Management is the development of people and not direction of things... management, is personnel administration." —Lawrence A. Appley 2 "Management is simply the process of decision-making and control over the action of human beings for the express purpose of attaining predetermined goals." —Stanley Vance "Management is a distinct process consisting of planning, organizing, actuating and controlling performed to determine and accomplish the objectives by the use of people and resources." —George R. Terry "Management is the method of effectively utilizing available resources for the purpose of delivering goods and services to the maximum satisfaction of maximum number of people." —N.G. Nair In all the above definitions we find a common factor. This is the focus on people. Thus we find management as a science or art cannot exist without people and their participation. Once again, without an exception, all authors have highlighted importance of human resources and their development as the bedrock of all management practices. With this background we shall now discuss some popular definitions. (b) Human Resources Management Simply put, Human Resource Management (HRM) is a management function that helps managers recruit, select, train and develop members for an organization. Obviously, HRM is concerned with the people's dimension in organizations. The core points of HRM are: 1. Organizations are not mere bricks, mortar, machineries or inventories. They are people. It is the people who staff and manage organizations. 2. HRM involves the application of management functions and principles. The functions and principles are applied to acquisitioning, developing, maintaining, and remunerating employees in organizations. 3. Decisions relating to employees must be integrated. Decisions on different aspects of employees must be consistent with other human resource (HR) decisions. 3 4. Decisions made must influence the effectiveness of an organization. Effectiveness of an organization must result in betterment of services to customers in the form of high-quality products supplied at reasonable costs. 5. HRM functions are not confined to business establishments only. They are applicable to non-business organizations, too, such as education, health care, recreation, and the like. The following three definitions collectively cover all the five core points: 1. …….a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organizations and the employees to achieve their objective. 2. …….is concerned with the people dimension in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true, regardless of the type of organization-government, business, education, health, recreation, or social action. 3. …….management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational, and Social objectives are accomplished. Thus, HRM refers to a set of programmes, functions and activities designed and carried out in order to maximize both employee as well as organizational effectiveness. Perusal of these definitions highlights the following elements in human resources management: Scope is confined to managing people at work in an organization. Well-being of individuals and groups are attempted. Development of individuals and their satisfaction. 4 Organizational development and contribution to the organizational objectives. Attempting management functions such as planning, organizing, directing, coordinating and control as applicable to staff (personnel) management. Attending to staffing functions such as recruitment, selection, placement, etc. Look after industrial relations, union-management interactions and collective bargaining. Emancipation leading to empowerment of employees. Human resource management means managing people. It is people, if not properly managed it creates problem. Top managements of the organizations are now paying more attention towards the human resource management because they have now realized that human resources need to be closely integrated with planning and decision-making. Human resource management, therefore, involves all managerial decisions, policies and practices that influence human resource directly. According to Wendell L. French, the human resource management, "refer to the philosophy, policies, procedures, and practices related to the management of people within an organization." To David A. Decenzo and Steven P. Robbins, Human Resource Management is, "a process consisting of the acquisition, development, motivation, and maintenance of human resources." Human resource management includes human resource planning, job design acquisition, training and development, compensation, benefit and rewards, safety and health, motivation, employee participation in management, organization development, performance appraisal, job evaluation, human relations, employee counselling, personnel research and human resource information system (HRIS), etc. Human resources are the valuable assets of any organization. They are their strength. To face the new challenges on the fronts of knowledge, technology and changing trends in global economy needs effective human resource management. 1.3 Scope of Human Resource Management The scope of HRM is indeed vast. All major activities in the working life of a workerfrom the time of his or her entry into an organization until he or she leaves come under 5 the purview of HRM. Specifically, the activities included are - HR planning, job analysis and design, recruitment and selection, orientation and placement, Training and development, performance appraisal and job evaluation, employee and executive enumeration, motivation and communication, welfare, safety and health, industrial relations (IR) and like. For the sake of convenience, we can categorize all these functions into seven sections. (i) Introduction - HRM, (ii) Employee hiring, (iii) Employee and executive remuneration, (iv) Employee motivation, (v) Employee maintenance, (vi) Industrial relations (IR), and (vii) Prospects of HRM (see Fig. 1.1). Nature of HRM Prospect s of HRM Employee Hiring HR M Industria l Relation s Employ ee Mainten a Employee & Executive Remunera tion Employ ee Motivati o Fig 1.1 Scope of HRM As the subsequent pages in this module unfold, all these functions are explained in a greater detail. 1.4 Major Activities under HRM A potentially large number of activities are involved in human resources management. This number varies according to the size and needs of the organization. These HRM activities affect the organization internally as they are meant for organization's development and prosperity. These activities are directly related with the human 6 resources of the organization job structures and job performance of the employees, job results, health and safety, salary structure, productivity, quality, competitiveness, objectives of the organization, policies, procedures, strategy of the organization, i.e., overall planning, etc. The human resource management activities are affected by the external environment, business environment, competition, population, etc. The major Human Resource management activities are as under: 1.5 Structure of Human Resources Department In every organization big or small there is a human resource development now, and personnel department then headed by a manager. In large organizations more specialists are employed while in small organizations one person has to perform many specialized jobs. The word manager is equivalent here to the chairman or director. Many organizations use to nomenclature as ‘chairman human resources’, ‘director human resources’ or ‘president human resources’. Nomenclatures differ from organization to organization, in its size and sophistications. We use a common term ‘manager.’ The following diagram illustrates the structure of human resource department. HR Planning Job Analysis Acquisition of HR Organizatio n Developme nt Human Resource Training & Developme nt Safety & Health Provision Compensati on & Other Benefits Performanc e Evaluation & Review Fig 1.2: Major Activities in HRM 1.6 1.6 HRM Model We follow the model (shown in Fig. 1.5) for discussing the subject HRM in this module. As seen from the figure, the model contains all HR activities. When these activities are discharged effectively, they will result in a competent and willing workforce who will help realize organizational goals. 7 Nature of HRM HR Planning Job Analysis Recruitment Selection Placement Training & Develop Remuneration E N V I R O N M E N T Motivation Participative Mgt Comp etent and willin g workf orce Communication Safety & Health Organizational Goals Welfare Promotions Industrial Relations Trade Unionism Disputes & Settle Future of HRM International HRM Fig:1.3 HRM Model There is another variable in the model—environment. It may be stated that the HR function does not operate in vacuum. It is influenced by several external and internal forces like economic, technological, political, legal, organizational and professional conditions. 8 Activity1.1: Based on above HRM Model draw similar diagram indicating the components of HRM in relation to your TVET 1.7 The Semantics As in any other discipline, there is the problem of semantics in HRM, too. First, we have two terms, namely, personnel management (PM) and HRM. Between these two terms there is a basic difference, and it is useful to understand as to what it is. HRM differs from PM both in scope and orientation. HRM views people as an important source or asset to be used for the benefit of organizations, employees and the society. It is emerging as a distinct philosophy of management aiming at policies that promote mutuality—mutual goals, mutual respect, mutual rewards and mutual responsibilities. The belief is that policies of mutuality will elicit commitment which, in turn, will yield both better economic performance and greater human resource development (HRD). The year 1990 was a turning point in the evolution of HRM. The American Society for Personnel Administration (ASPA) the largest professional association in this field of management changed its name to the Society for Human Resource Management (SHRM). Since then, the expression is gradually replacing the worn-out term - personnel management (PM). PM views labour as a tool, the behaviour of which could be manipulated for the benefit of the organization and replaced when it was worn - out. The personnel department itself was not treated with respect. It was filled with not-very-productive employees whose services could be spared with minimal damage to the organization's ongoing operations. Personnel function was treated as a routine activity meant to hire new employees and to maintain personnel records. It was never considered a part of the strategic management of businesses. Historically, PM preceded HRM. Another term widely used these days is HRD. For many people, HRD and HRM convey the same meaning. This may not be true. Essentially, HRD is a function more concerned with training and development, career planning and development, performance and potential appraisal, counselling, succession planning, and welfare. HRD, therefore, is a part of HRM (see fig 1.3). 9 Table 1.1 Differences between HRM and PM SNo Dimension Personnel Management Human Management 1 Employment contract Aim to go beyond contract 2 Rules Careful delineation of written contracts Importance of devising clear rules 3 4 5 Guide to management action Behaviour referent Managerial task vis-à-vis labour Key relations Initiatives Speed of decision Management role Communication Prized management skills Selection Pay Conditions Labour management Job categories and grades Procedures Norms/customs and practices Monitoring Can do outlook, impatience with rule Business need Values/mission Nurturing Labour management Piecemeal Slow Transactional Indirect Negotiation Separate, marginal task Job evaluation (fixed grades) Separately negotiated Collective-bargaining contracts Many Customer Integrated Fast Transformational leadership Direct Facilitation Integrated, key task Performance related Harmonization Individual contracts Few Division of labour Reach temporary truce Controlled access to courses Personnel procedures 21 Job design Conflict handling Training and development Focus of attention for interventions Respect for employees 22 Shared interests 23 Evolution Interests of the organization are uppermost Precedes HRM Team work Manage climate and culture Learning companies Wide-ranging cultural, structural and personnel strategies People are treated as assets to be used for the benefit of an organization, its employees and the society as a whole Mutuality of interests 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Labour is treated as a tool which is expendable and replaceable Resource Latest in the evolution of the subject Industrial Relations Management (IRM) is yet another term which adds to the problem of semantics. Industrial relations, as the term implies, is merely concerned with employee grievances and their settlement unionization, and the like. Obviously, IRM is one wing of HRM (see Fig. 1.3). 1.8. Objectives of HRM: The primary objective of HRM is to ensure the availability of a competent and willing workforce to an organization. Beyond this, there are other objectives, too. Specifically, 10 HRM objectives are four fold - societal, organizational, functional and personal (see Fig. 1.3). a. Societal Objectives: To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. The failure of organizations to use their resources for the society's benefit in ethical ways may lead to restrictions. For example, the society may limit HR decisions through laws that Personal Objective s enforce reservation in hiring and laws that address discrimination, safety or other such areas of societal concern. Functional Objectives b. Functional maintain Objectives: the contribution Organizational Objectives appropriate To department's at a to level the organizational needs. Resources Societal Objectives are wasted when HRM is either more or less sophisticated to suit Fig 1.4 Objectives of the HRM organization's demands. The department's level of service must be tailored to fit the organization it serves. c. Organizational Objectives: To recognize the role of HRM in beginning about organizational effectiveness. HRM is not an end Organizational Objectives in itself. It is only a means to 11 assist the organization with its primary objectives. Simply stated, the department exists to serve the rest of the organization. d. Personal Objectives: To assist employees in achieving their personal goals, at least insofar as these goals enhance the individual's contribution to the organization. Personal objectives of employees must be met if workers are to be maintained, retained and motivated. Otherwise, employee performance and satisfaction may decline and employees may leave the organization. 1.9. HRM: Functions and Objectives In order to realize the objectives stated above, HRM must perform certain functions. These functions have been stated while outlining the scope of HRM. Generally, it may be stated that there is a correlation between the objectives and the functions. In other words, some functions help realize specific objectives. For example, the organizational objective is sought to be met by discharging such functions as HR planning, recruitment and selection, training and development, and performance appraisal. Similarly, the personal objective is sought to be realized through such functions as remuneration, assessment, and the like. Table 1.2...
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