Human resources management is how to manage the available resources without letting them destroyed

1. MANAGING HUMAN RESOURCES
Professor O. Oluwasola

2. 1. Introduction:
• The primary goal of firms is to reach and increase profitability.
• Firms can target this goal by growing and improving their competitiveness
through:
- enhancing their economic efficiency,
- increasing their market share or
- creating new markets .
• Hence, firms need to be innovative by developing new products or
services.
• This process known as entrepreneurship while creativity is the initial
inspiration that leads to the creation of a new product or service.
• Although talent, education, and cognitive skills can enhance inspiration,
for inspiration to become a daily driving force and foster continuous
innovation within firms, high levels of creativity are required.
• This can only be attained through intrinsic motivation. When the people’s
competence as well as motivation is called out, human resource
management becomes crucial.

3. 2. What is human resource management?
• Human Resource Management is the formal systems devised for
the management of people within an organization.
• It is the unit responsible for personnel sourcing and hiring, applicant
tracking, skills development and tracking, benefits administration
and compliance with associated government regulations
• The responsibilities of a human resource manager are :
- staffing,
- employee compensation and benefits, and -
- defining/designing work
• HRM is usually used to signal a more business-oriented approach
to the managing of people since it undertakes several activities such
as manpower planning, recruitment, selection, placement,
Induction, training, development, performance appraisal,
remuneration, staffing, discipline,

4. 3. Why is human resource management
important in entrepreneurship?
• Human capital is critical to venture success . People are the source
of the competitive advantage of firms
• Human resource management is a strategic and comprehensive
function of business which: (i) enables employees to contribute
effectively and productively to overall company benefit (ii)
accomplishment of organization's goals and objectives.
• At a time of unparalleled technological development, it is human
resources that spell success or failure for all firms.
• HRM ensures the seamless and effective application of policies and
processes in the business.
• HRM keeps the balance between employee needs and satisfaction
and an organization's profitability and capability to reach its
objectives.

5. 4. How do you manage human resources
for a successful business?
• This is essentially in four areas:
• recruitment,
• compensation,
• Leadership, training and development
• performance management

6. (a) Recruitment
• Integrating HR strategy, business goals and company values is key
• Is your HR strategy fully integrated into your overall business plan?
• Or is it a bit of an afterthought, something you think about
whenever you are short-staffed and looking to hire?
• Human resources may be but one division in your business, but it
affects the entire company and how it performs.
• The people of your company are what drive its success, so it is
critical to have the HR strategies in place to ensure that your hires
fit with your company’s objectives, culture, brand and values.
• Here are seven ways to ensure that your HR strategy is a driving
force behind your company’s success.

7. HR Strategy 1. Create a Culture of Business Success. ...
• In many ways, your human resources website sets the tone and
perception of your business culture.
• This is where prospective employees research your company and
what helps them to decide if it is the type of place where they want
to work.
• Does your HR strategy effectively convey your company’s values?
• Take the time to get to the heart of your business.
• What characterizes the internal culture?
• What does your business and your employees strive for?
• Articulate this to current and future employees and incorporate this
culture into everything you do.

8. HR Strategy 2. Use Clear Job Descriptions.
• With a firm grasp of your business culture, you can
integrate this into each employee’s role.
• Make it part of your HR strategy to have clear job
descriptions that link each position to the greater goals
of your organization.
• Make it clear to your employees how they each
contribute daily to your organizational goals and to
making your business a success.
• There is greater commitment and job satisfaction when
an employee can clearly see where they fit in, how
they can impact the business,.

9. HR Strategy 3. Identify the Right Talent
• A strong HR strategy makes it possible to attract
the right talent and
• to identify these as the job applications pour in.
• With job descriptions that clearly describe both
the individual role and the company culture it is
easier to attract those who support and believe in
the same goals and principles.
• With candidates who already support your vision,
you are a step ahead in achieving them.

10. HR Strategy 4. Manage the Interview Process.
• Your HR strategy should extend beyond the job advertisement
phase and be incorporated into the interview process.
• Plan your interviews and ensure that your questions help you to
assess not only the skills and talents you are seeking
• you also need to assess how a candidate would fit within your
organization.
• Is the candidate’s personality compatible with the organizational
culture?
• Do they believe in company goals, offer new insights and
perspectives?
• Will they fit within their new team?
• Your HR strategy should ensure that each interview process has
questions to help you discern this.

11. HR Strategy 5. Evaluate Based on Company Goals.
• When judging candidates with comparable skills, fit is the
determining factor in the success of a new hire.
• As such, your HR strategy needs to clearly guide hiring
managers in how to assess a candidate’s organizational fit.
• What are the key goals that characterize your company?
• What questions will help hiring managers to assess if
candidates support these goals?
• Provide the resources hiring managers need to ensure they
include this vital component of evaluation in each job
process.

12. HR Strategy 6. Make The Best Possible Decisions
• With a HR strategy that emphasizes company
goals and culture, hiring managers will be well
positioned to make the hires that help your
organization to achieve its objectives.
• By gaining insight into a candidate’s
organizational fit, you are more likely to have a
successful hire who contributes to your overall
business goals and less employee turnover.
• This is better for your company’s bottom line.

13. 7. HR Strategy 7. Hire Quickly
• Finally, it is critical that your HR strategy includes
making smart and quick hires.
• Top candidates are in high demand, so you need
to be able to quickly discern both who is qualified
and who will fit.
• This way you can beat your competition to the
punch when it comes to making your job offer
and hiring the best candidate to support your
business goals.

14. • By integrating your HR strategy, business goals
and company values into everything you do,
- you create a business culture of success.
- your employees are clear on the ultimate
objectives of your business and its values,
- you have a dedicated team ready to take
you there

15. (b). Compensation
• This is another crucial area for firms’ survival and growth.
• Appropriate compensation is extremely important for
emerging firms to acquire core talents.
• Entrepreneurial firms are willing to reward creativity,
innovation, willingness to take risks, cooperation,
interactive behaviour and tolerance for ambiguity and
uncertainty.
• Reward systems are usually based on bonuses which may
include both profit and stock sharing.
• By creating the feeling of ownership interest in the firm,
such systems allow emerging firms to retain core talents.

16. • Providing personnel with modest salaries and generous bonuses if the firm
performs well, allows rapidly growing firms to shift a portion of business
risk to the employees.
• As entrepreneurial firms often tend to have a flat organisational structure,
their employees are often treated in an egalitarian fashion as far as
compensation is concerned.
• In such firms’ financial rewards are not indicative of an employee’s status,
as traditional hierarchical distinctions are kept to a minimum.
• Instead, entrepreneurial firms provide a multidimensional reward based
on the payoff from acting in uncertain environments including
innovations.
• The satisfaction and responsibility of having a stake in the business adds
up to the perceived feelings of reward.
• Geverally, compensation is often negotiated on an individual basis
depending on the needs and resource constraints of the firm and, on the
other hand, on the skills and experience of the employees

17. (c). Leadership, Training and
Development
• Entrepreneurs usually lead a process that creates value for
stakeholders by bringing together a package of resources in
order to exploit a recognised opportunity.
• To achieve this, take risks, act proactively and search for
creative solutions to operational problems or needs.
• Successful innovation requires an act of will and not of
intellect, therefore innovation depends on leadership and
not only on intelligence.
• The entrepreneur typically identifies an opportunity, and
then surrounds herself/himself with individuals to help
pursue it, while providing the necessary leadership to
develop and motivate these individuals.

18. • Entrepreneurial management leadership is all about breaking new
ground and going beyond the known.
• It is also about helping people to engage in new opportunities.
• Therefore, it is the entrepreneur’s ability to effectively deal with
opportunities through the dynamics or an organizational setting
which determines the success of a firm.
• An entrepreneurial leader inspires sufficient competence to
influence a group or individuals to become willing participants in
the fulfilment of innovative goals.
• For this purpose, entrepreneurial leaders must have first of all an
exciting and contagious vision to encourage others to commit to
organizational achievement.
• Second, this vision has to be communicated.

19. • Openness and dynamic within an organization facilitate the acceptance of
new perspectives and represent relevant traits of organizational cultures
able to stimulate creativity and innovation.
• Open communication is fostered by team work which provide the
conditions for a dynamic mixture of ideas and competencies.
• By delegating some decisions entrepreneurs can give responsibility to the
employees
• Assigning stimulating tasks create the preconditions for the development
of their internalized motivation.
• Acting in this way entrepreneurs reflect the characteristics of both
transformational and charismatic leadership.
• Transformational leaders pay attention to the developmental needs of
the followers by helping them to look at problems in new ways; as a result,
followers tend to increase their level of trust in the entrepreneur and
therefore be motivated to put extra effort to achieve group goals.

20. • Charismatic leaders have a vision of how things could be, clearly
communicate it to their followers and, through their excitement,
motivate them to support this vision.
• Both leadership styles contribute to build up an organizational
culture based on learning, tolerance and trust.
• However, entrepreneurs tend to be authoritarian and to take all
decisions themselves. This behavior discourages in particular highly
skilled employees.
• Small companies do abstain from formalized training programmers,
mostly due to their cost in terms of money paid and the loss of
employees’ immediate working time.
• Training and learning exist in small firms, but are at times
unstructured and supplemented by organizational socialization.

21. (d). Performance Appraisal
• Firms’ employees’ performance is mostly
evaluated and apprised through financial
incentives and stock options
• Intensive employee turnover can be detrimental
for companies aiming at fast growth , especially
in knowledge-intensive industries, if the
companies do not possess practices for capturing
and retaining organizational knowledge.

22. 5. Challenges of Human Resources
Management
• New entrepreneurs often lack human resource
management competences
• As the company grows, the size of the entrepreneurial
team makes the need for HRM competence more
pronounced
• There are several ways to generate HRM competence and
to lower the probability of mistakes:
- external consultants can be asked,
- entrepreneurs can attend courses and/or seminars or
- the HRM function can be outsourced or
- HRM tasks can be shared among all members of a start-up
firm; in this case they take on the tasks as a part-time job

23. • In small firms with scarce resources, there may be a very small
number of formal HR departments or professionals, increased
difficulty in recruiting and retaining employees due to lack of
financial resources, and an increased reluctance to engage in costly
or restrictive practices
• There may also be a reduced reliance on formalized training,
difficulty recruiting due to lack of legitimacy, and more informal and
potentially haphazard employee management systems.
• Small firms face many unique HR challenges including an often
ambiguous firm identity that is easily impacted by new employees,
difficulty in attracting and retaining key talent and skills, lack of
legitimacy as an employer organization , maintaining flexibility in
staffing, and developing sustainable human resource policies.