HRM Lecture 1

What is Human Resource
Management?
• Two questions:
– Does it matter?
– Why does it matter?
Getting to know HRM!!
• What is Human Resource Management?
• What makes it Unique?
• How did it evolve?
• What is the Philosophy behind HRM?
• What are the Objectives of HRM?
Two broadly contrasting pictures
of HRM
1. Emphasis on people as costs and resources to be worked to
secure maximum efficiency. It is called the “ Rational or
economic view of employment” where the basic approach is
Control and compliance
2. Emphasis on people as resources to be invested in to

generate high commitment and involvement. This is the “
Social or psychological view of employment” and it
emphasizes on commitment of the people working together
as an organization.
Operational view of HRM?
Organization’s methods and procedures for
managing people to enhance skills and
motivation
----
Activities to enhance the organization’s ability to
attract, select, retain and motivate people
Decenzo and Robbins
A process consisting four functions- acquisition,
development, motivation, and maintenance of
human resources.”
Edward Flippo’s
Personnel management is the planning,
organizing, directing and controlling of the
procurement, development, compensation,
integration, maintenance and separation of
human resources to the objectives are
accomplished”
Strategic view of HRM
A strategic approach to managing employment
relations which emphasizes that leveraging
people’s capabilities is critical to achieving
sustained competitive advantage, this being
achieved through a distinctive set of
integrated employment policies, programs
and practices.
HRM
• Strategic
– Planned, deliberate, seeking to achieve set objectives
• Capabilities
– People or resources with potential (knowledge, skills, abilities)
• Sustained Competitive advantage
– By tapping into and developing these capabilities organizations
give themselves an edge over their rivals
• Integrated
– That the range of things under HRM (recruitment, selection of
employees, their training and development, how they are
rewarded) is looked at together not as separate things.
People in organizations
• Economic – pay in exchange for effort
• Legal
• Social
• Psychological
Schools of thought:
• HRM is really personnel management Human resource management is a
modernized form of 'personnel', repackaged to enhance the status of
personnel managers.
• HRM is people management It covers all aspects of managing employees
in its widest sense and emphasizes the role of line managers in overseeing
their own staff. From this perspective, HRM is a new generic label for all
the techniques and tactics available to manage people.
• HRM is a strategic model It employs the techniques of strategic
management for the utilization of human resources. It focuses on senior
managers' concern with achieving objectives and containing costs. HRM
aims for a seamless link between business policy and recruitment,
performance assessment, reward management, development and
dismissal.
What and Where are the Origins of
HRM?
• Ancient examples
• 1776 Adam Smith’s “The Wealth of Nations”
• Industrial revolution of 1990s

Ancient roots of Classical Organization
Theory
• Early organization of Muslims, Hebrews and
Greeks
– Book of Exodus
– Xenophon
– Aristotle
– Ibne – Taymiyyah
• Eighteenth century and birth of Complex
economic organization
Classical Organization Theory
• Production workers with their own tools
• Factory system
• Keep the machines busy and cost under control
• The times were hard: individuals considered as
interchangeable parts of industrial machine
(the parts were made of flesh, only when it was
impractical to made them of steal)
• Best machines : “one best way”
Major Approaches to Management
• Scientific Management (Frederick Taylor,
Frank and Lillian)
• General Administrative Theory (Henri Fayol,
Max Weber)
– Quantitative Management (Whiz kids, Robert,
McNamara)
• Organizational Behavior
Organizational Behavior Approach
• Robert Owen (1700s)
– Working conditions
– Money spent on improving labor is smart
investment
• Hugo Munsterberg (1900s)

– Industrial psychology
– Tests for employees testing
Organizational Behavior Approach
• Mary Parker Follett (1900s)
– Individual and group behavior
– People orientation, group ethics
• Chester Barnard
– Organizations and social systems
– Managers job as simulating employees
The Hawthorne Studies
• A series of productivity experiments conducted at Western
Electric from 1927 to 1932.
• Experimental findings
– Productivity unexpectedly increased under imposed
adverse working conditions.
– The effect of incentive plans was less than expected.
• Research conclusion
– Social norms, group standards and attitudes more strongly
influence individual output and work behavior than do
monetary incentives.
What is strategic HRM?
• An integrated set of processes, programs, and systems
in an organization that focus on the effective
deployment and development of its employees.
• The concept of fit with the strategic thrusts of the
organization
• HR strategies exist to ensure that the culture, values,
structure and processes of the organization, and the
quality, flexibility, motivation and commitment of its
members to contribute fully to the achievement of its
objectives… should match the business strategy
The bridge between operational
and strategic view
The attainment of business objectives through

the contribution it makes to the creation of an
environment in which people commit
themselves to and effectively accomplish the
tasks assigned to them.
Modern view of HRM for Line
Managers
• HRM involve all the management decisions
and action that effect the nature of
relationship between the organization and
employees- human resources
Modern view of HRM for Line
Managers
• Beer and his colleagues defined the important
and link of HRM for the line managers by two
ways.
– Line managers accept the responsibility of
compliance with the strategy and HR policies.
– HR has a mission to set HR policies and strategies
that govern how HR activities are developed and
implemented in a way that make them more
mutually reinforcing.
Underpinning theories of HRM
• Commitment:
– The strength of individual’s identification, and

involvement in a particular organization
• Continues
• Normative
• Affective
• Organization behavior theory
– How individuals act individually and in group

within organizations in terms of their structure ,
process and culture
• Individual
• Group
• Group dynamics (organization)
• Motivation theory
– Two main motivational aspects
• Intrinsic motivation
• Expectancy theory
• AMO theory
– Performance is a function of
Ability X Motivation X Opportunity
• Human Capital theory
– How people in organization contribute their

knowledge, skill and abilities to enhancing
organizational capabilities and how these
contributions can be accumulated by retaining
valuable human resources
• Resource dependence theory
– Organizations and groups gain power over each

other by controlling valued resources
• Resource based theory
– Competitive advantage is achieved if firms

resources are valuable , rare and costly to imitate
– Organization of resources
• Resource based theory
– Valuable
– Rare not essential
– Costly to imitate
• History
• Small vs big decisions
• Socially complex resources
–Organization
• Institutional theory
– Organizations conform to internal and external

environmental pressure in order to gain legitimacy
and acceptance
• Socially constructive environment
• Legitimacy
• survival
• Transactional cost theory
– Businesses develop organizational structure and

systems in order to economize the cost of
transaction
• Establishing
• Monitoring
• Evaluating
• Enforcing

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What is Human Resource

2. Emphasis on people as resources to be invested in to

• 1776 Adam Smith’s “The Wealth of Nations”

• Industrial revolution of 1990s

• Hugo Munsterberg (1900s)

The attainment of business objectives through

– The strength of individual’s identification, and

– How individuals act individually and in group

– Two main motivational aspects

– How people in organization contribute their

– Organizations and groups gain power over each

– Competitive advantage is achieved if firms

– Organizations conform to internal and external

– Businesses develop organizational structure and

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