Lecture 1 – Introduction

Key definitions
 Agenda

• HRM’s key definition

• Explain What Human Resource Management Is and How It
Relates to the Management Process
• The Important Trends Influencing Human Resource Management
• Six Important Components or Pillars of Human Resource
Management Today
• Important Human Resource Manager Competencies
 1. HRM definition

• Human resource management (HRM) is a comprehensive and coherent approach to the

employment and development of people.
• HRM can be regarded as a philosophy about how people should be managed to improve
organizational effectiveness that is equally concerned with the ethical dimension – how people
should be treated in accordance with a set of moral values.
• HRM can be defined as a strategic, integrated and coherent approach to the employment,
development and well-being of the people working in organizations.
• HRM involves the application of policies and practices in the fields of organization design and
development, employee resourcing, learning and development, performance and reward and
the provision of services that enhance the well-being of employees.
 Development of HRM concepts

1920s: 1940s:
1970s:
Labor Personnel
HRM
management management

1980s:
1990s: Talent Human capital
management management
 2. Philosophy of HRM

“Human resource policies should be:

integrated with strategic business planning

used to reinforce an appropriate organizational culture,

mutually consistent that promote commitment and foster a willingness in

employees to act flexibly in the interests of the ‘adaptive organization’s’
pursuit of excellence.”
 3. Goals of HRM

The goals of HRM are to:

v Support the organization in achieving its objectives by developing and implementing human
resource (HR) strategies that are integrated with the business strategy (strategic HRM);
v Contribute to the development of a high performance culture;
v Ensure that the organization has the talented, skilled and engaged people it needs; create a
positive employment relationship between management and employees and a climate of mutual
trust;
v Encourage the application of an ethical approach to people management.
 3. Goals of HRM

Support the organization in achieving its objectives by developing and

implementing human resource (HR) strategies that are integrated with
the business strategy (strategic HRM);

Contribute to the development of a high performance culture;

Ensure that the organization has the talented, skilled and engaged
people it needs; create a positive employment relationship between
management and employees and a climate of mutual trust;

Encourage the application of an ethical approach to people

management
 4. Main activities of HRM

• Strategic HRM
• Human Capital management
• Knowledge management
• Organization development
• Resourcing (HR planning, Recruitment and Selection, and talent management)
• Learning and development
• Reward management
• Performance management
• Employee relations
• Employee well-being
 5. Underpinned theories of HRM

• Commitment
The significance in HRM theory of organizational commitment (the strength of an individual’s
identification with, and involvement in, a particular organization) was highlighted in a seminal
Harvard Business Review article by Richard Walton (1985).
• Motivation
Motivation theory explains the factors that affect goal-directed behaviour and therefore influences
the approaches used in HRM to enhance engagement (the situation in which people are committed
to their work and the organization and are motivated to achieve high levels of performance).
 5. Underpinned theories of HRM

• The resource-based view

Resource-based theory expressed as ‘the resource-based view’ states that competitive advantage
is achieved if a firm’s resources are valuable, rare and costly to imitate. It is claimed that HRM can
play a major part in ensuring that the firm’s human resources meet these criteria.
• Organizational behaviour theory
Organizational behaviour theory describes how people within their organizations act individually or
in groups and how organizations function in terms of their structure, processes and culture. It
therefore influences HRM approaches to organization design and development and enhancing
organizational capability (the capacity of an organization to function effectively in order to achieve
desired results).
 5. Underpinned theories of HRM

• Contingency theory
- Contingency theory states that HRM practices are dependent on the organization’s environment
and circumstances.
- Contingency theory is associated with the notion of fit – the need to achieve congruence
between an organization’s HR strategies, policies and practices and its business strategies
within the context of its external and internal environment. This is a key concept in strategic
HRM.
• Institutional theory
- Organizations conform to internal and external environmental pressures in order to gain
legitimacy and acceptance
 5. Underpinned theories of HRM

• Human capital theory

- Human capital theory is concerned with how people in an organization contribute their
knowledge, skills and abilities to enhancing organizational capability and the significance of that
contribution.
• Resource dependence theory
- Resource dependence theory states that groups and organizations gain power over each other
by controlling valued resources. HRM activities are assumed to reflect the distribution of power
in the system.
 5. Underpinned theories of HRM

• AMO theory
- The ‘AMO’ formula as set out by Boxall and Purcell (2003) states that performance is a function
of Ability + Motivation + Opportunity to Participate. HRM practices therefore impact on
individual performance if they encourage discretionary effort, develop skills and provide people
with the opportunity to perform. The formula provides the basis for developing HR systems that
attend to employees’ interests, namely their skill requirements, motivations and the quality of
their job.
• Social exchange theory
- Employees will reciprocate their contribution to the organization if they perceive that the
organization has treated them well.
 5. Underpinned theories of HRM

• Transaction costs theory

- Transaction costs economics assumes that businesses develop organizational structures and
systems that economize the costs of the transactions (interrelated exchange activities) that take
place during the course of their operations.
• Agency theory
- Agency theory states that the role of the managers of a business is to act on behalf of the
owners of the business as their agents. But there is a separation between the owners (the
principals) and the agents (the managers) and the principals may not have complete control
over their agents.
 Explain What Human Resource
Management Is and How It Relates to
the Management Process
 What Is Human Resource Management?

• The Management Process

– Planning
– Organizing
– Staffing
– Leading
– Controlling
 Why Is Human Resource Management
Important to All Managers?

• To avoid personnel mistakes

• To improve profits and performance
• You may spend some time as an H R manager
• You may end up as your own human resource manager
 Line and Staff Aspects of Human
Resource Management

• Authority is the right to make decisions, to direct the work of others, and to
give orders. Managers usually distinguish between line authority and staff
authority.
– Line authority gives you the right to issue orders
– Staff authority gives you the right to advise others in the organization
 Line Manager’s HR Management
Responsibilities
(1 of 2)

• Placing the right person in the right job

• Starting new employees in the organization (orientation)
• Training employees for jobs that are new to them
• Improving the job performance of each person
 Line Manager’s HR Management
Responsibilities (2 of 2)
• Gaining creative cooperation and developing smooth working relationships
• Interpreting the company policies and procedures
• Controlling labor cost
• Developing the abilities of each person
• Creating and maintaining departmental morale
• Protecting employees’ health and physical conditions
 The Human Resource
Department
Figure 1-1 Human Resource
Department Organization Chart
Showing Typical HR Job Titles

Source: “Human Resource Development

Organization Chart Showing Typical HR Job Titles,”
www.co.pinellas.fl.us/persnl/pdf/orgchart.pdf.
Courtesy of Pinellas County Human Resources.
Reprinted with permission.
 New Approaches To Organizing HR

• Reorganizing the H R function of how it is organized and delivers H R

services
– Shared Services (Transactional) H R teams
– Corporate H R teams
– Embedded H R teams
– Centers of expertise
The Important Trends Influencing
Human Resource Management
 Trends in Human Resource Management

• Workforce Demographics and Diversity Trends

• Trends in Jobs People Do
• Globalization Trends
• Economic Trends
• Technology Trends
 More on HR Technology Trends

• There are six main types of digital technologies driving HR professionals to

automation:
– Social Media
– Mobile Applications
– Cloud Computing
– Data Analytics
– Artificial Intelligence
– Augmented Reality
Describe Six Important Components
or Pillars of Human Resource
Management Today
 Today’s New Human Resource Management

• A Brief History of Personnel/Human Resource Management

• Distributed HR and the New Human Resource Management
 A Quick Summary

Figure 1-4 What

Trends Mean for
Human Resource
Management
 Strategic Human Resource
Management

• Strategic human resource management – means formulating and

executing human resource policies and practices that produce the employee
competencies and behaviors that the company needs to achieve its strategic
aims.
 HR and Performance Measurement

The Human Resource Manager is expected to spearhead employee

performance.
Three levers can be applied to do so:

1. Department Lever
2. Employee Cost Lever
3. Strategic Results Lever
 HR and Evidence-Based Management

• Evidence-based human resource management – is the use of data, facts,

analytics, scientific rigor, critical evaluation, and critically evaluated
research/case studies to support human resource management proposals,
decisions, practices, and conclusions.
– Actual measurements
– Existing data
– Research studies
 HR and Adding Value

• Adding value – means helping the firm and its employees improve in a
measurable way as a result of the human resources manager’s actions.
 Sustainability and HRM

• It is about measuring companies in terms of maximizing profits but

also on their environmental and social performance as well.
 Employee Engagement and HRM

• Employee engagement refers to being psychologically involved

in, connected to, and committed to getting one’s job done.
 Ethics and HRM

• Ethics means the standards someone uses to decide what his or

her conduct should be.
List at Least Four Important
Human Resource Manager
Competencies
 The Skills of the New H R Manager

• H R managers can’t just be good at traditional personnel tasks

like hiring and training, but must “speak the CFO’s language” by
defending human resource plans in measurable terms.
 The New Human Resource Manager

The Society of Human Resource Management (S H R M) has a new

“competency model” called the S H R M Body of Competency and Knowledge
that itemizes what a new H R Manager needs
• What should they be able to exhibit?
• Of what basic functional areas of H R should they have command?
 Human Resource Manager
Certification

• H R C I Certifications
– P H R – Professional in Human Resources
– S P H R – Senior Professional in Human Resources
• S H R M now has its own competency and knowledge based testing
 H R and the Manager’s H R
Philosophy

An initial philosophy based on experiences, education,

values, assumptions, and background.
Lecture 1 – The end