ADM 551

HUMAN RESOURCE
MANAGEMENT

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 TOPIC 1
HUMAN RESOURCE
MANAGEMENT PERSPECTIVE

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 Learning Outcomes
After studying this chapter, you should be able to:

1. Identify how firms gain sustainable competitive advantage

through people.
2. Explain how globalization is influencing human resources
management.
3. Describe the impact of information technology on managing
people.
4. Identify the importance of change management.
5. State HR’s role in developing intellectual capital.
6. Differentiate how TQM and reengineering influence HR systems.
7. Discuss the impact of cost pressures on HR policies.
8. Discuss the primary demographic and employee concerns
pertaining to HRM.
9. Provide examples of the roles and competencies of today’s HR
managers.

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 Overview
STAFFING

SAFETY
& HRD
HEALTH
HRM

EMPLOYMENT COMPENSATION
& &
LABOR RELATIONS BENEFITS

The HRM System (Mondy & Noe

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 Definition of HRM
The process of managing human talents to
achieve an organization’s objectives (Snell &
Bohlander).
The policies and practices involved in carrying out
the “people” or human resource aspects of a
management position including recruiting, screening,
training, rewarding and appraising (Gary Dessler).
The utilization of a firm’s human resources to
achieve organizational objectives (Mondy & Noe).
Philosophies, policies, procedures and practices
related to the management of people within
organization (French).

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 Definition of HRM
The design of formal systems in an organization to
ensure effective and efficient use of human talent to
accomplish organizational goals (Mathis & Jackson).
Strategic and coherent approach to the
management of an organization’s most valued assets
– the people (Armstrong).
HRM refers to the management of the
organization’s employees.
The purpose of HRM is to foster organizational
policies that enhance the contribution of employees
make to the effectiveness of the organization.”

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 The importance of HRM
1. To gain / sustained competitive advantage through
people by meeting the following criteria:
• The resources must be Value - it increase when
employees find ways to decrease costs, provide
uniqueness of the product/service to the customers or
with the combination of both.
• The resources must be Rare – when their skills,
knowledge, abilities, attitudes (KSA) are not the same
with the competitors.
• The resources must be Difficult to Imitate - each
employees have different KSA’s and cannot be copied
by others.
• The resources must be Organized – when their KSA’s
can be combined and can be rapidly used to improve
the efficiency and effectiveness of the company.

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 The importance of HRM
2. To develop employees for the benefit of organization.
3. To recognize employees as an importance asset.
4. To promote management effectiveness and efficiency.
5. To ensure consistent and fair treatment of employees.
6. To control HR performance.
7. To recommend HR policies.
8. To act as strategic partner to the organization.
9. Proper HR planning in the organization.
10. To deal with HR issues and challenges.
11. Viewed as equivalent to financial management, production
management & marketing management.
12. To ensure the people employed by the organization are
being used as efficiently & effectively.
13. To contribute towards achieving the organizational goals.

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 The Functions of HRM
b. HR Planning is the process of
a. Job analysis is the systematic
comparing human resource
process of determining the skills,
requirements with their availability
duties and knowledge required for
and determining whether the firm has
performing jobs in an organization. It
a shortage or excess of personnel.
consists of job description and job
The data then used for recruitment or
specification.
other HR functions.
1. Staffing
The process through which an organization
ensures that it always has the proper number of
employees with the appropriate skills at the right
jobs at the right time to achieve the organization’s
objectives. Staffing involves job analysis, HR
planning, recruitment and selection.
d. Selection is the process through
c. Recruitment is the process of
which the organization choose those
attracting qualified individuals and
individuals in a group of applicants
encouraging them to apply for work
that best suited the position and the
with the organization.
company.

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 The Functions of HRM
b. Career planning is an ongoing
process whereby employee sets
a. Training is designed to provide
career goals and identifies the means
employees with the knowledge and
to achieve them. Career development
skills needed for their present job.
is a formal approach used by the
Development involves learning that
organization to ensure employees
goes beyond today’s job particularly
with the proper qualifications and
for a long term career development.
experiences are available when
needed.

2. Human Resource Development (HRD)

HRD is a major HRM functions that consist of
training and development, career planning &
development, organization development and
performance appraisal.

c. Organization development is the

planned process of improving an
d. Performance appraisal is formal
organization by developing its
system of review and evaluation of
structures, systems and process to
individual or team task performance.
improve effectiveness and achieving
desired goals.

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 Other Functions of HRM

3. Compensation and
benefits 4. Employee and Labor
Compensations are financial Relations 5. Safety and Health
rewards to employees for When employees are Safety involves protecting
performing organizational represented by union, the employees from injuries
work through pay and human resource activity is caused by work related
incentives. Meanwhile often referred to as an accidents. Health refers to
benefits are non financial industrial relations which the employees’ freedom
rewards such as holidays, handles the job of collective from physical or emotional
sick leave and medical bargaining. illness.
coverage.

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 Competencies of HR Manager

Personal
Change credibility –
Business
HR mastery mastery – respect and
mastery –
– involves in able to trust earned
organization,
HR manage through
environment
activities. change relationship
knowledge.
effectively. with
customers.

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 Duties/Roles of HR Manager
• To serve and to assist line managers regarding HRM.
Service • Administer various benefits programs.
Functions
• Dealing with grievances and labor relations.

• To coordinate HR activities to achieve organization goals.

Coordinating
• Act as the right arm to ensure the HR objectives, policies
Functions and procedures are adopted.

Advisory • To offer an expert advise on HR policies, procedures,

Functions rules & regulations, policy formulation & implementation.

Control
• To analyze key operational areas.
Functions

Line • Directing the activities of the people in his / her

Functions department.
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 Strategic: As
business
contributor
Operational:
Manages
most HR
activities

Employee Advocate:
Serve as “morale
officer”
Administrative: Focuses extensively
on clerical administration

Roles of HR Manager: Mathis & Jackson, 2004

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The Structure of HR Department

Not every organization has a specialized human

resource department due to:

Size of Workforce
Organization Unionization

Top
Company
Management
Ownership
Philosophy

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Examples of Job Titles in HRM
Personnel
Officer /
Assistant

Job
Personnel Director
Executive Title in of HR
HRM

Manager
of HR

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 Line Manager vs HR Manager
• Is a manager who is authorized to direct the
work of subordinates and is responsible to
Line accomplish organizational goals / tasks.
Manager eg. Sales Dept Manager, Finance Dept
Manager etc.

• Is a staff manager who assist and advise line

manager to accomplish those goals relating to
HR personnel functions.
Manager • HR Manager also Line Manager.

…..However, whenever relating employees, the duties and

roles between the two are always across the board.

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 Similarities Between
Line Manager vs HR Manager

Advisory Control Coordinating Line

Functions Functions Functions Functions

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 Differences Between
Line Manager vs HR Manager
No Samples of Activity Responsibility
1 Submit requisition for recruitment of staff HoD
2 Check the JD and JS are current HoD
3 Advertise vacancy internally and HR
externally
4 Shortlist applicants HR
5 Call applicants for interview and tests HR
6 Interview applicants HR and HoD
7 Send out letter of offer to successful HR
applicants
8 Orientation/induction for new employees HD and HoD

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 Public VS Private HRM

Similarities
1. Both are helping the organizations to reach their goals
proper functions of HRM system.
2. Both are concern with promoting labor inputs to benefits
the organizations.
Differences
Public Private
Geared towards strengthening Geared towards strengthening
government needs and organization economic growth
effectiveness (social obligation). productivity and efficiently.
Based on the national policy and Based on the performance of the
development. organization.
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 Factors Affecting HRM
1. External Factors
•Factors that affect a firm’s human resources from
outside the organization’s boundaries. These
factors are beyond their control but organization
can take several action to minimize the impact.

2. Internal Factors
•Factors that affect a firm’s human resources from
inside organization. These factors can be
controlled by the organization through certain
strategies and policies.

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 External Factors
Labor Force/Market
• Pool of individuals external to the firm from which the
organization obtains its workers. It always changing and
inevitably cause changes in the workforce of an
organization.

Legal Considerations/Requirements
• Relates to various issues on laws, policies, rules &
regulations imposed by the federal, state and local
government that affect the HR policies.

Economic Conditions
• Recruiting qualified workers are more difficult during
economic booming compared to during economy downturn.

Technological Changes
• Technology changes rapidly and HR must cope up with this
changes to ensure organizational success.
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 External Factors
Customers
• The people who actually use firms goods and services that
offer best quality product and after sales service.
Competition
• Firms may face intense competition in the market. Only
competent employees guaranteed organization success
over its competitors.
Shareholders
• The owners of a corporation that expect high return in
profits and sales revenue for their investment.
Unions
• Comprised of employees who have joined together for the
purpose of dealing with their employer. Any collective
bargaining made will give an impact toward the
organizations directly.
Society
• Society may also exert pressure on HRM by means of
ensuring the organizations to comply on social
responsibility.
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 Internal Factors

Marketing Operation Finance

Organization Organization Internal Labor

Policy Performance SS & DD

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 HRM Challenges
 Today’s HR problems are enormous and appear
to be ever expanding. The HR manager faces a
multitude of challenges, ranging from a
constantly changing workforce to coping with
government regulations. Because of the critical
nature of HR issues, they are receiving
increased attention from upper management.

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Competitive Challenges & HRM
Going
Global
Embracing
Government New
Laws & Technology
Policies

Demographic &
Employee
Managing
Concerns Change

Containing Developing
Human
Costs Capital

Responding
to Market

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1. Globalization
Borderless economy, free movement of means of
production (foreign workers), international actors
(NAFTA, EU, APEC, WTO) that regulates how
business operates worldwide become the challenges
in managing HR.
HRM challenges includes:
Identifying capable expatriate managers.
Designing training & development program.
Adjusting compensation plans (fair & equitable).

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2. Embracing New Technology
To shift from “touch labor” to “knowledge workers”,
employees need to be trained and re-trained to adapt
with rapid changes in technology.
Therefore, it is crucial to have trained employees and
this human capital must be trained from time to time to
ensure the competencies is standard with the current
technologies used.
HRM must alert and knowing the current technologies
and manage the training schedule for the staff.

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3. Managing Change
Change in business environment forcing organization
to change in terms of responsibilities, job
assignments, work processes etc.
Organization should manage change effectively by
focusing on proactive change and not reactive change
– envision the future, communicate the vision, set
clear expectations for performance and develop the
capability.
The challenge is, most organizational members are
trapped in comfort zone (complacent) whereby they
are afraid to change for a better (resist to change).

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4. Developing Human Capital
To gain competitive advantage from human capital,
organization must focus in developing employee KSA
because all staffs have unique skills and potential.
Plus, continuous training will enhance their
performance.
However, the challenge is employees own their KSA.
When they leave a company, they take their KSA with
them and any investment the company has made is
lost.

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5. Responding to the Market
Customers demand becoming complex and
sophisticated to please. With thousands of choices
that customer can choose from, makes the standard
is raised higher. Aspects such as quality, innovation
and responsiveness will put at stake.
HRM facing problem on how to cope with the market
demand. This situation challenged HRM on how to
produce staff that have innovative and ‘X’ factor to
adapt this situation.

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6. Containing Cost
Organization need to achieve cost effectiveness by
reducing costs and improve productivity to maximize
efficiency.
Some of the efforts includes downsizing, outsourcing
and leasing in order to keep up with productivity and
quality.
However, such efforts have greater impact towards
HRM such as losing the most valuable employees,
lost of confidence and job security among employees
etc.

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7. Demographic & Employee Concerns

Demographic changes:
The diversity challenge.
Age distribution.
Gender distribution.
Rising levels of education.
Cultural changes and differences:
Changing attitudes toward work.
Balancing work and family.
Differences amongst races in the organization.

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8. Government Laws and
Policies
 Various issues on laws, policies, rules &
regulations imposed by the government affecting
HRM.
 They have to follow certain restrictions such as
embargo on foreign workers, high levy imposed on
foreign workers etc.

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THE DEVELOPMENT
OF HUMAN CAPITAL
IN MALAYSIA

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 Functions / Roles of
Ministry of Human Resources
To restructure and promote the balanced distribution
of manpower in accordance with the New Economic
Policy.
To preserve, develop and improve the welfare and
wellbeing of workers.
To preserve the safety and health of workers with
emphasis on pollution control in factories and places
where machinery is used.
Set policies.
Prepares draft legislation.
Enforces the legislation.

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 Departments under
Ministry of Human Resources
Manpower Department
Labour Department (Peninsular Malaysia)
Labour Department (Sabah)
Labour Department (Sarawak)
Industrial Court
Industrial Relations Department
Trade Union Affairs Department
Occupational Safety and Helath Department
National Vocational Department

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 END OF
PRESENTATION

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 TUTORIAL QUESTIONS
1. What are the challenges faced by personnel administration
(PA)?.
2. Identify how globalization is influencing PA.
3. Describe the impact of IT on PA.
4. Discuss the role of Personnel Manager.
5. Describe the criteria necessary for firms to achieve
sustained competitive advantage through people.
6. Justify the statement “All managers are involved in HRM”.
7. What HRM functions that must be performed regardless of
the size of organization?.
8. How can human resource management contribute to a
company’s success?.
9. What skills are important for success in human resource
management? Which of these skills are already strengths
of yours? Which would you like to develop?.
10. Will technology eliminate the need for human resources
managers?.
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