Human Resource Management

Chapter 1

The Strategic Role of

Human Resource

Management

1. What is human resource management?

Definition of HRM:

Human resource management is to make the most

productive use of human resource to the greatest

benefits of the organization and individuals.

Organization: profits and social commitments.

Individuals: development and achievement.

Organization and individual

(1) Organization needs: Profits, productivity and markets.

(2) Individual needs: Maslows Need Hierarchy

Physiological needs, security, belonging, self-respect

and self-actualization.

(3) Coordinating organization and individual needs: goal of

HRM.

The importance of HRM

(1) People is the key factor of production.

(2) Productivity is the key to measure a nation’s economic

growth potential, and labor quality is the key to

improving productivity.

(3) Competition today is the competition for talents.

(4) Since man is the most uncontrollable and unpredictable

variable of all production variables, organizational

success depends on the management of people.

People and productivity

(1) Productivity: the measurement of economic growth

potential.

(2) Productivity formula: input : output

(3) Measurement of productivity:

a. Productivity of worker is the output per hour.

b. Productivity of equipment is the output per every dollar invested.

c. Productivity of energy is the output per every unit of energy

consumed.

Employee quality and productivity

Employee skill determines productivity.

Man and tools.

Employee motivation affects productivity.

Willingness to perform.

Employee creativity and initiatives improve productivity.

innovation is the key to improvement.

Functions and divisions of HRM

(1) Management process

a. Planning.

b. Organizing.

c. Staffing.

d. Leading.

e. Controlling.

(2) Functions of HRM

a. Conducting job analysis.

b. Planning future needs and supplies.

c. Recruiting and selecting employees.

d. Orienting and training employees.

e. Managing wages and benefits.

f. Performance appraisal.

g. Communicating (discipline and services).

h. Building employee commitment (incentives).

(3) Line managers’ HRM responsibilities

a. Job placing.

b. Orienting new employees.

c. On-job training of employees.

d. Interpreting company policies and

procedures.

e. Conducting job appraisals.

f. Controlling labor costs.

g. Labor protection and disciplines.

(4) Staff managers’ HRM responsibilities

a. A line function: directing and managing people in the

HRM department.

b. A coordinating function: coordinating HRM activities

across the organization.

c. Staff functions:

Same as the HRM functions plus labor relations and

collective bargaining with the trade unions.

3. Evolution of HRM

(1) Industrial Revolution:

a. Adam Smith: specialization and division of labor.

b. Robert Owens: Pioneer of HRM, performance appraisal

and pay for performance (fair treatment of employees)

(2) Scientific management

Frederic Taylor: Father of scientific management

a. Definition:

Systematic analysis and breakdown of work into the smallest mechanical components and rearranging them into the most efficient combination.

b. Steps:

Job analysis—selection—training—rewards.

(4) Human behavior and relations

a. The Hawthorne Studies by Westing House

The happy workers are the most productive workers. (The Pet Milk theory)

b. Max Weber: the Ideal Bureaucracy.

c. Chris Argyris: Individual and organization—mutual adjustment.

d. Affected by the theories of behavioral science and system theory.

File Management (1900-1964):collecting and storing data of each employee.

Government Accountability (1964-1980): Compliance to government regulations.

Human Resource Management:

Treating human resource as an asset.

Emphasizing joint responsibilities of line managers and staff managers.

Key Words :

management process

The five basic functions of planning, organizing, staffing,

leading, and controlling.

human resource management

The policies and practices one needs to carry out the

“people” or human resource aspects of a management

position, including recruiting, screening, training, rewarding,

and appraising.

authority

The right to make decisions, direct others’ work, and give

orders.

ling manager

A manager who is authorized to direct the work of

subordinates and responsible for accomplishing the

organization’s goals.

staff manager

A manager who assists and advises line managers.

line authorityThe authority exerted by a personnel manager by directing

the activities of the people in his or her own department

and in service areas (like the plant cafeteria).

implied authorityThe authority exerted by a personnel manager by virtue of

others’ knowledge that he or she has access to top

management (in areas like testing and affirmative action).

functional controlThe authority exerted by an HR manager as coordinator of

personnel activities.

employee advocacyHR must take responsibility for clearly defining how managementshould be treating employees, make sure employees have themechanisms required to contest unfair practices, and representthe interests of employees within the framework of its primaryobligation to senior management.

globalizationThe tendency of firms to extend their sales or manufacturing tonew markets abroad.

competitive advantageAny factors that allow an organization to differentiate its productor service from those of its competitors to increase market share.

cost leadership

The enterprise aims to become the low-cost leader in an

industry.

differentiation

A firm seeks to be unique in its industry along dimensions

that are widely valued by buyers.