This document provides an overview of human resource management (HRM). It discusses what HRM is, its importance because people are critical to achieving organizational goals, and its major functions such as planning, recruitment, selection, and development. The document also examines the historical development of HRM from personnel management to its modern strategic focus. Key movements discussed include scientific management, human relations, human behaviorism, and organizational development.

1. HUMAN RESOURCE
MANAGEMENT

2. CHAPTER ONE
INTRODUCTION
TO
HUMAN RESOURCE
MANAGEMENT
(HRM)
2

3.  Management & HRM
 Management refers to the process of achieving
organizational objectives with and through the
effort of people and other resources.
Organization
 Organizational activities require human effort and
capabilities
 Organizations depend on performance of people for
achieving its mission and goals
 Organizations are directed by decisions of one or
more people
3

4. 1.1 What is Human Resource Management
?
 Human resource management
(HRM): can be defined as the
utilization of human resources to
achieve organizational objectives.
 Human resource management (HRM)
is concerned with the process of
planning, organizing, coordinating,
directing and controlling the activities of
human resource in an organization.
4

5. HRM Cont’d
 It is concerned with obtaining,
developing and utilizing the right type
of people within the right quality and
right quantity from the right source at
the right time and right cost in order to
achieve organizational objectives.
 HRM is concerned with the human
side of an organization and employees
relation with their work and work
environment.
5

6. HRM Cont’d
 Its purpose is to ensure that the
employees of the organization are used
in such a way that the employer obtains
the greatest possible benefit and also
 To benefit employees obtain the
maximum possible development and
psychological award from their work and
their organization.
6

7. 1.2 MAJOR FEATURES OF HRM
 HRM is human focus: concerned with the people
dimension of the organizational management.
 HRM is a pervasive activity: inherent in all
organizations & concerns every manager in the
organization
 HRM is a Continuous function, not a one time
activity
 HRM is dynamic: as a dynamic function affected
by internal and external changes
7

8. EXTERNAL ENVIRONMENT
8
INTERNAL
ENVIRONMENT
MISSION
STRUCTURE
CULTURE
RESOURCES
OTHERS
SOCIAL
FORCES
ECONOMIC
FORCES
POLITICAL - LEGAL
FORCES
TECHNOLOGICAL
FORCES

9. MAJOR FEATURES OF HRM cont’d …
 HRM is a System: a system consisting
of interrelated acquisition,
development, motivation, and
maintenance subsystems
◦ The HR is most critical element in an
organization since people make the
decisions concerning all other
organizational resources.
9

10. COMPONENTS OF HUMAN RESOURCE MANAGEMENT
SYSTEM
10
INPUTS PROCESSING OUTPUTS
• Acquisition
• Development
• Motivation
• Maintenance
• Goals
Achievement
(services and
/or products)
Feedback
• Human energy
and competencies
• Organization plan
• HR plan
• Job analysis
• Labor market

11. 1.3. Objectives and Functions of HRM
1.3.1 Objectives of HRM
 Goal achievement
◦ Achieve Social responsibility goal by creating employment
opportunities and meet social needs
 Structure maintenance
◦ Facilitate working relationship among all members of the
organization
 Goal harmony
◦ Creates harmony between organization goals and
employees personal goals.
 Productivity improvement
◦ Develop employees through training and other
opportunities
 Efficiency promotion
◦ Ensures cost effective use of HRs
11

12. 1.3.2 Major HRM Functions
1. Human Resource Planning (HRP)
◦ The process of systematically
reviewing human resource
requirements.
2. Recruitment
◦ The process of attracting individuals in
sufficient numbers and encouraging them
to apply for jobs.
3. Selection
◦ The process of choosing from a group of
applicants the individuals best suited for a
particular position.
12

13. Major HRM Functions cont’d
…
4. Orientation
◦ The formal process of familiarizing
new employees with the organization,
their job, and their work unit.
5. Training and Development
◦ Aim to increase employee's ability to
contribute to organizational
effectiveness.
13

14. Major HRM Functions cont’d
…
6. Compensation Management
◦ Refers to the administration of every
type of reward that individuals receive
in return for their services.
7. Performance Evaluation
◦ A formal system of periodic review and
evaluation of an individual's job
performance.
14

15. Major HRM Functions cont’d
…
8.Safety and Health
◦ Safety involves protecting employees from
injuries caused by work- related accidents.
◦ Health refers to the employees’ freedom from
illness and their general physical and mental
well-being.
9. Promotions, transfers, demotions
and separations
◦ Promotions, transfers, demotions, and
separations reflect an employee's value to the
organization.
15

16. Major HRM Functions cont’d
…
10. Human Resource Research
◦ A systematic gathering, recording,
analyzing, and interpretation of data
for guiding human resource
management decisions.
11. Other areas such as employee relations,
collective bargaining, employee discipline,
and retirement are also concerns of human
resource management.
16

17. 1. 4. Historical Development: An overview
 For many decades such responsibilities as
selection, training and compensation were
considered basic functions constituting the area
traditionally referred to as personnel.
 HRM, as it is currently perceived, therefore,
represents the extension rather than the
rejection of the traditional requirements for
managing personnel effectively.
17

18. 18
Personnel Management Vs Human Resource Management
Personnel management Human resource management
Advisory and administrative Strategic
Personnel activity in the organization is
marginalized and not seen as central to the
corporate plan
HR activity in the organization is
fundamentally linked to the corporate plan
Personnel as a mediating role between
management and the workforce
HRM as a central management role
Emphasis on written rules and procedures Flexibility is important
Collective rewards and benefits Individual rewards and benefits
People as input in the production process People as valuable resource
A command and control management
hierarchy
A team-based management system

19. Historical Development cont’d …
1.4.1 Understanding Personnel
issues under different schools of
thoughts:
I. Scientific Management (F. W. Taylor)
 Increasing productivity and makes the work
easier by scientifically studying work
methods and establishing standards.
 The guiding principle of this school was
"getting the most out of workers".
 Taylor encouraged employers to pay more
productive workers at a higher rate than
others. (differential rate system) 19

20. Historical Development cont’d …
Taylor rested his philosophy on some basic
principles:
1. The development of a true science of
management,
2. The scientific selection of workers
3. The scientific training (education) of the
worker.
4. A division of responsibility between
management and labor.
20

21. Historical Development cont’d …
 Scientific management basically had a focus on
such areas as:
 techniques of production
 the most efficient method
 rigid rules of performance
 using the shortest time possible
 workers productivity /efficiency
 minimum cost of production hence maximum profit
 highly refined tools and materials
 training and closer supervision, etc.
21

22. Historical Development cont’d …
II. The Human Relations Movement
(Elton Mayo)
 Hawthorne Experiments’ conclusions include:
◦ Work is a group activity
◦ The need for recognition, security, and a
sense of belonging vs. the physical
conditions
◦ The worker is a person whose attitudes and
effectiveness are conditioned by social
demands
◦ Informal groups within the work place
exercise strong social controls 22

23. Historical Development cont’d …
 The human relations movement
also emphasizes that:
◦ Communication is the life blood of an
organization.
◦ Participative decision making has
strong motivating force
23

24. 24
III. Human Behavior Movement
 This movement emphasized employee behavior in
work organizations.
 The main contributors of this movement are:
 Peter Drucker, advocated “visionary goal-directed
leadership” as the basic of management by
objective (MBO).
 Douglas McGregor, advocated management by
integration and self-control.
 Abraham Maslow advocated that needs motivate
employees and there is a hierarchy of needs.
People work in meeting their needs

25. 25
Human Behavior …Cont’d
 Rensis Likert advocated integrative principles
of supportive relationships in which members
share common values, expectations and
goals.
 Chris Argyris advocated integration and
involvement-based organization design and
individual’s self-control over goal-setting.
 Frederic Herzberg advocated that Hygiene
factors do not motivate but motivational factors
do motivate. He emphasized that work is
important for motivation and job enrichment
motivates employees.

26. 26
IV. Organizational Development Movement
 OD aims to improve the effectiveness with which an
organization functions and responds to change.
 It takes a systems approach to manage planned
change.
 OD programs focus on behavioral interventions.
OD aspects which are relevant to HRM are:
 Coordination and integration in a systems approach
 Team building to foster team spirit, cooperation and
commitment
 Training and development programs to improve
knowledge, skills, and attitudes.
 Managing Planned Change
 Managing conflicts
 Quality of work life programs
 Collaborative management consisting of power sharing
with employees (Participative-decision making).

27. Summary
 Human resource management (HRM) is the process of
accomplishing an organization's objectives by
acquiring, developing, retaining, and properly using its
human resources.
 HRM is an important subject.
 It is important because human resources are critical
element to the organization. People make decisions,
determine objectives, and produce and sell goods or
services.
 HRM refers to the management of activities involving
the human resources of an organization.
 The human resource management includes function
such as human resource planning, recruitment, and
selection; human resource development; compensation27

28. CHAPTER TWO
Human Resource Planning
28

29. 2.1 The Concept of HRP
Human resource planning involves forecasting the
organization’s future demand for employees,
forecasting the future supply of employees within the
organization, and designing programs to correct the
discrepancy between the two.
 Human resource planning is the process of
translating over all organizational objectives, plans,
and programs to achieve specific performance of
work force needs.
 It is the systematic and the continuing process of
analyzing an organization’s human resource needs
under changeling conditions and developing
personnel policies, appropriate to the long term
29

30. HRP Cont’d
 In general, the purpose of human resource
planning is to ensure that, in the future, the
organization has enough employees with the
appropriate skill so that it can accomplish its short
and long-term goals.
2.2 Importance of HRP
 Organizations are composed of people. People
represent an important resource in achieving
organizational goals.
 Human resource planning is the starting point of
human resource management.
 Its importance is clear from the following points:
30

31. Importance of HRP Cont’d
A. Uncertainty Reduction
 Human resource planning offsets uncertainty by
predetermining future human resource
requirements.
 It matches demand and supply forecasts to
determine future shortages and surpluses of
human resources in terms of quantity and quality.
 Action plans are developed to deal with the
problems arising from shortages and surpluses.
31

32. Importance of HRP Cont’d
B. Objectives Achievement
 Human resource planning focuses on the overall
achievement of organizational goals/objectives.
 Demand forecasts for human resources are based
on the strategies, goals, objectives, and revenue
plans of the organization.
C. Environmental Adaptation
 Human resource planning assesses current human
resources through human resource inventory and job
analysis.
 Existing human resources can be quickly adapted to
changing technology, markets, competition as well as
political, legal, economic, social and cultural forces. 32

33. Importance of HRP Cont’d
D. Effective and Efficient Utilization of Human
Resources
 Human Resource Planning ensures that the
organization acquires and retains the quality and
quantity of human resources it requires.
 Existing human resources can be properly placed
and deployed to ensure their effective utilization.
 Human resource costs can be controlled to achieve
efficiency through planning.
 Human resource planning ensures the right
number and type of human resources at the right
time performing the right job.
33

34. Importance of HRP Cont’d
E. Control
 Human resource planning sets standards for
control purposes.
 It serves as a standard for controlling the quality
and quantity of human resources actually
deployed.
 Human resource control is not possible without
human resource planning.
F. Human Resource Development
 Human resource planning anticipates knowledge
and/or skills requirements for various levels of
human resources. 34

35. Importance of HRP Cont’d
 This provides adequate lead-time for planning of
training and development programs.
 Training and Development experiences often
lead to greater employee satisfaction, lower
turnover and lower absenteeism.
HRM Mesfin L. 35

36. 2.3 The Process of HRP
The following are the main procedures in HRP:
1.Conducting external and internal environmental
scanning.
2. Determining future HR requirements.
3. Determining future HR availabilities.
4 Determining net man power requirement (NMPR)
5. Developing action plan.
36

37. The Process of HRP Cont’d
37
1.Conducting External and Internal Environmental
Scanning
 A number of external influences affect the conduct of
HR management.
 These include economic conditions, labor market,
laws and regulations, and labor union. Accordingly,
these factors are also focus area for HR planning.
 Of the various areas mentioned through
environmental scanning, the labor market is most
directly relevant to HR planning.

38. The Process of HRP Cont’d
 If tight labor market is expected, the organization
must plan to put considerable time and money in
to attracting and retaining the needed talent.
 It is also important for an organization to scan its
internal environment.
 The monitoring of key indexes such as employee
performance, absenteeism, turnover, and
accident rates help to learn what is going on in
the organization.
38

39. The Process of HRP Cont’d
2.Determining Future Human Resource
Requirement
 This step involves considering what the
organization’s HR needs will be in the future.
 This includes the number of employees that will be
needed, the type of skills that will be required,
productivity levels needed to complete successfully,
and so forth.
 The logical place to begin this process is with an
organization’s business plan (long-term and
operational plan).
 These plans usually indicate major sales,
production, and financial goals. 39

40. The Process of HRP Cont’d
 This information tells the human resource
planner whether volumes will be going up,
staying the same, or going down.
 From organizational plan we can infer whether or
not there will be any change in the basic
technologies the organization uses to make, and
distribute its products /services.
 Such changes typically are introduced as a
means of increasing employee productivity and
thus reducing future human resource
requirements.
40

41. The Process of HRP Cont’d
3.Determining Future Human Resource
Availabilities
 The task here is to estimate the number and types
of employees that will be available in various job
categories at the end of planning period.
 This phase of HR planning is designed to answer
the question, “how many and what kinds of
employees do I currently have in terms of the skills
and training necessary for the future?”
 It all begins with an inventory of employees
expected to be available in various job categories
at the start of planning period.
41

42. The Process of HRP Cont’d
 From these figures, anticipated losses during
planning period due to retirements, voluntary
turnover, promotions, transfers, death, quits,
resignation and others are subtracted .
4. Determining Net Manpower Requirements
 This requires comparing over all personnel
requirement with personnel inventory where the
difference is net requirement.
42

43. The Process of HRP Cont’d
5. Developing Action Plans
 Once the supply and demand of human resource
are estimated, adjustments may be needed.
 When the internal supply of workers exceeds the
firms demand, a human resource surplus exists.
 The alternative solutions include: early retirements,
demotions, layoffs, terminations, attrition, voluntary
resignation, transfer, work sharing and hire freezing.
 Decisions in surplus conditions are some of the
most difficult that managers must make, because
the employees who are considered surplus are
seldom responsible for the condition leading to
surplus. 43

44. The Process of HRP Cont’d
 A shortage of raw materials such as fuel or a
poorly designed or poorly marketed product can
cause an organization to have a surplus of
employees.
 As a first approach to dealing with a surplus, most
organizations avoid layoffs by relying on attrition,
early retirements, and creation of work and the like.
 Many organizations can reduce their work force
simply by not replacing those who retire or quit.
 When the internal supply can not fulfill the
organization’s needs, a human resource shortage
exists.
44

45. The Process of HRP Cont’d
 If the shortage is small and employees are willing to
work over time, it can be filled with present
employees.
 If there is a shortage of highly skilled employees,
transfer, training and promotions of present
employees, together with the recruitment of
employees, are possibilities.
 This decision can also include recalling employees
who were previously laid off.
 Nowadays many organizations make use of part
time workers, subcontractors, and independent
professionals in response to changing demands.
 Using these kinds of employees give an
45

46. Thank you!
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