Human Resource Management

Subject Teacher:
Engr. Muhammad Sajid

Department of Engineering Management

University of Engineering and Technology

Taxila

1–1
 Introduction to
Human Resource Management

1–2
1–3
Where HRM stands in the Management
Process?
 Organization
It consists of people with formally assigned rules who work
together to achieve the organization’s goals.
 Manager
A person responsible for accomplishing the organizations
goals, who does so by managing efforts of the organization’s
people.

1–4
Where HRM stands in the Management
Process?
 Management process
There are five basic functions of the Management
Process i.e.
– Planning
– Organizing
Management
– Staffing Process

– Leading
– Controlling

1–5
Where HRM stands in the Management
Process?
 Management process
– Planning (establishing goals and standards, developing rules and
procedures, developing plans and forecasting)
– Organizing (establishing departments, specifying responsibilities,
delegating authorities, establishing communication channels)
– Staffing (who should be hired? how to hire them? policies related to
HRD, performance evaluation, counseling employees, compensating
employees)
– Leading (Getting others to get the job done, maintaining moral,
motivating subordinates)
– controlling (To see that how the practices conforms to the stated
standards)

1–6
What is HRM?

 The policies and practices involved in carrying out

the human resource aspects of a management
position.
 It is the process of acquiring, training, appraising
and compensating employees and of attending to
their labor relations, health, safety and fairness
concerns.

1–7
What is HRM?
 It includes the concepts and techniques you need
to perform the personnel aspects of the
management job.
 Conducting job analysis (determining the nature of
employee's job)
 Planning labor needs and recruiting job candidates
 Selecting job candidates
 Orienting and training new employees
 Managing wages and salaries (compensating
employees)
 Providing incentives and benefits
 Appraising performances
 Communicating ( interviewing, counseling, disciplining)
1–8
What is HRM?
 It includes the concepts and techniques you need
to perform the personnel aspects of the
management job.
 Training and developing managers
 Building employee commitment

And what a manager should know:

– Equal opportunity and positive (affirmative) actions
– Health and safety
– Handling grievances
– Handling labor relations

1–9
 Why HRM is Important?
1. Avoid personal mistakes
It will help to avoid personal mistakes you don’t want to make while
managing: e.g. no manager wants to:
• Hire the wrong persons for the job
• Experience high turnover
• Have your people not doing best
• Waste time with useless interviews
• Have your company taken to court because of your discriminatory actions
• Have your company cited under federal occupational safety laws for unsafe practices
• Have some employees think their salaries are unfair relative to others in the
organizations
• Allow a lack of training to undermine your department’s effectiveness
• Commit any unfair labor practices

1–10
 Why HRM is Important?

2. Improve Profits and Performance

It ensures you get results from people:
We can do every thing else right as a manager e.g.
• Generate great plans
• Draw clear organization charts But still fails:
• By hiring wrong people
• set-up world-class assembly lines • By not motivating
subordinates
• Establishing sophisticated accounting controls

On the other hand: many managers have:

• Inadequate plans But still successful:
• Knack of hiring the right
• Organizations people for the right job
• control

1–11
 Why HRM is Important? (Contd)

3. You can spend some time as an HR Manager

 Suppose you are told by your Firms that you will work as an
HR Manager for a specific timeframe than you have to have
the knowledge of HRM which may boast your career.

 It may give the firms HR efforts a more strategic emphasis,

and the possibility that they are sometimes better equipped
to integrate the firm’s human resource efforts with the rest of
the business.

1–12
 Why HRM is Important? (Contd)

4. HR for Entrepreneurs

Suppose you are going to start your own small business, then:

 you will definitely need some time to work as an HR

Manager.

 You will have to understand the nuts and bolts of HRM

1–13
Line and Staff Aspects of HRM
 HR and Authority
 All managers are HR managers because they all get involved in
recruiting, interviewing, selecting and training.
 How the duties of HR manager and HR department relate to
human aspects of sales, production and other managers?

 Authority
– The right to make decisions, direct others’ work, and give
orders to others. Managers usually distinguish:
– Line authority
• It gives manager the right to issue orders to other managers or
employees (Order giver-Order receiver relationship).
– Staff Authority
• It gives a manager right to advice other managers or
employees (Advisory relationship).

1–14
Line and Staff Aspects of HRM
 Line manager
– A manager who is authorized to direct the work of
subordinates and is responsible for accomplishing
organizational tasks.

 Staff manager
– A manager who assists and advises line managers.

1–15
Line Managers’ HRM Responsibilities
1. Placing the right person on the right job
2. Starting new employees in the organization (orientation)
3. Training employees for jobs new to them
4. Improving the job performance of each person
5. Gaining creative cooperation and developing smooth working
relationships
6. Interpreting the firm’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
10. Protecting employee’s health and physical condition

1–16
Duties of the HR Manager
 A line function
– The HR manager directs the activities of the
people in his or her own department and in
related service areas (like the plant cafeteria).
 A coordinative function
– HR managers also coordinate personnel activities,
a duty often referred to as functional control.
Here he ensures that Lines Mangers are
implementing the firms HRM policies and practices
 Staff (assist and advise) functions
– Assisting and advising line managers is the heart
of the HR manager’s job.
1–17
Personnel Aspects Of HR Manager’s Job
 Conducting job analyses (determining the nature of each
employee’s job)
 Planning labor needs and recruiting job candidates
 Selecting job candidates
 Orienting and training new employees
 Managing wages and salaries (compensating employees)
 Providing incentives and benefits
 Appraising performance
 Communicating (interviewing, counseling, disciplining)
 Training and development of staff
 Building employee commitment

1–18
Employee Advocacy
 HR must take responsibility for:
– Clearly defining how management should be
treating employees.
– Making sure employees have the mechanisms
required to contest unfair practices.
– Represent the interests of employees within the
framework of its primary obligation to senior
management.

1–19
Cooperative Line and Staff HR Management

1. The line manager’s responsibility is to specify the

qualifications, employees need to fill specific
positions.
2. HR staff then develops sources of qualified
applicants and conduct initial screening
tests/interviews.
3. HR refers the best applicants to the supervisor (line
manager), who interviews and selects the ones he
or she wants.

1–20
 Employment and Recruiting—Who Handles It?
(percentage of all employers)

Note: length of bars represents prevalence of activity among all surveyed employers.
Figure 1–3
1–21
Examples of HR Specialties
 Recruiters
– Search for qualified job applicants.

 Equal employment opportunity (EEO)

coordinators
– Investigate and resolve EEO complaints, examine
organizational practices for potential violations,
and compile and submit EEO reports.
 Job analysts
– Collect and examine information about jobs to
prepare job descriptions.

1–22
 Examples of HR Specialties (cont’d)

 Compensation managers
– Develop compensation plans and handle the
employee benefits program.

 Training specialists
– Plan, organize, and direct training activities.

 Labor relations specialists

– Advise management on all aspects of union–
management relations.

1–23
HR Department Organizational Chart (Large Company)

Figure 1–1
1–24
HR Organizational Chart (Small Company)

Figure 1–2
1–25
Measuring HR’s Contribution
– Top management wants to see, precisely, how the
HR manager’s plans will make the company more
valuable.
– Organizations uses quantitative standards or
“metrics” to measure their HR activities.
– They measures the employee behaviors resulting
from these activities.

1–26
 HR Metrics
 Absence Rate
[(Number of days absent in month) ÷ (Average number of
employees during mo.) × (number of workdays)] × 100
 Cost per Hire
(Advertising + Agency Fees + Employee Referrals + Travel
cost of applicants and staff + Relocation costs + Recruiter
pay and benefits) ÷ Number of Hires
 Health Care Costs per Employee
Total cost of health care ÷ Total Employees
 HR Expense Factor
HR expense ÷ Total operating expense

1–27
 HR Metrics (cont’d)
 Human Capital ROI (return on investment)
Revenue − (Operating Expense − [Compensation cost +
Benefit cost]) ÷ (Compensation cost + Benefit cost)
 Human Capital Value Added
Revenue − (Operating Expense − ([Compensation cost +
Benefit Cost]) ÷ Total Number of FTE
Where as FTE is the Full Time Equivalent and is the ratio of the total number of paid hours during a period (Part time,
full time, contracted) by the number of working hours in that period Mondays through Fridays.

 Revenue Factor
Revenue ÷ Total Number of FTE
 Time to fill
Total days elapsed to fill requisitions ÷ Number hired

1–28
 HR Metrics (cont’d)
 Training Investment Factor
Total training cost ÷ Headcount
 Turnover Costs
Cost to terminate + Cost per hire + Vacancy Cost + Learning
curve loss
 Turnover Rate
[Number of separations during month ÷ Average number of
employees during month] × 100
 Workers’ Compensation Cost per Employee
Total WC cost for Year ÷ Average number of employees

1–29
High Performance Work System (HPWS)
 HPWS is a set of management practices that attempt
to create an environment within an organization
where the employee has greater involvement and
responsibility.
 HPWS is about determining what jobs a company
needs done, designing the jobs, recruiting the type of
employee needed to fill the job, and then evaluating
employee performance and compensating them
appropriately so that they stay with the company.
 Employees should have better skills, more
motivation, and more opportunities to excel when
these high-performance HR practices are aligned and
working in harmony.
1–30
Benefits of a High Performance Work
System (HPWS)
 Generate more job applicants
 Screen candidates more effectively
 Provide more and better training
 Link pay more explicitly to performance
 Provide a safer work environment
 Produce more qualified applicants per position
 More employees are hired based on validated
selection tests
 Provide more hours of training for new employees
 Higher percentages of employees receiving regular
performance appraisals.
1–31
New HR Management
 Yesterday
– Hiring and Firing of Employees
– Running the payroll department
– Managing the benefits plans

Today
– Employee Selection and training
– Helping the employer how to deal with unions
– Equal employment laws/opportunities
– Occupational safety and health laws
1–32
Qualities of New HR Manager
 Focus on Strategic issues
– These days HR Managers emphasis on strategic
issues which means formulating and executing HR
policies and practices that produce the employee
competencies and behaviors.
– HR managers no longer perform their
transactional activities but tries their best to
contribute to the company’s overall success.
– HR managers helps top management in
formulating and executing their long-term plans.

1–33
 Qualities of New HR Manager (Contd)

 New Ways of Providing Transactional Services

HR managers offering transactional services in
innovative ways e.g.
– They use technology, for instance
• company portals that allow employees to self
administer benefits plans
• Use Facebook-recruting to recruit job applicants
• Conduct online testing to prescreen job
applicants
– Manages centralized call centers to answer HR
related inquiries
1–34
 Qualities of New HR Manager (Contd)

 Integrated “Talent Management” Approach to

Manage Human Resources
– Talent Management is an integrated process of
planning, recruiting, developing, managing, and
compensating employees.
– No one want to lose their high-potential
employees and hence want to retain and use them
according to their skills
– Talent Management is related to how you retain
and best utilize your company’s talent.

1–35
 Qualities of New HR Manager (Contd)

 Manage Ethics
– Ethics means the standards someone
uses to decide what his or her conduct
should be
– E.g. Prosecutors file criminal charges
against some HR managers who violate
employment law by hiring children
younger than 16.
– HR managers needs to understand the
ethical implications of his / her employee-
related decision.

1–36
 Qualities of New HR Manager (Contd)

 Manage Employee Engagement

– Engaged employees means those who are
mentally and emotionally involved in their work
and contributing to an employer’s success.

1–37
 Qualities of New HR Manager (Contd)

 Measure HR Performance and Results

– To answers questions like, What skills we have?
And many more which would be discussed in
coming discussion, HR Manager needs performance
based measurements. E.g.
– If HR operating cost is 1 % of the company total
operating cost than there tends to be one HR staff
per hundred employees.

1–38
 Qualities of New HR Manager (Contd)

 Use of Evidence Based HRM

– Basing decisions on evidence is the heart of
Evidence Based HRM.
– The evidence may come from actual
measurements, such as, How the trainees like this
program?
– It may come from the existing data, such as, What
happened to the company profit after we installed
this training program?
– It may also come from published critically
evaluated research studies, such as, what does the
literature concludes about the best way to ensure
that trainees remember what they learn?
1–39
 Qualities of New HR Manager (Contd)

 They Add Value

– HR should add value particularly by boosting the
profitability and performance in measurable ways.
– HR practices improve organizational profitability and
performance e.g. studies suggests that.
• Well-trained employees perform better than
untrained ones.
• Safe workplaces produce fewer lost-time
accidents and accident costs than do unsafe
ones.

1–40
 Qualities of New HR Manager (Contd)

 They have New Competencies

1–41
 Qualities of New HR Manager (Contd)

 Talent Managers
– Master of traditional HRM tasks such as acquiring
and training etc.

 Culture and Change Stewards

– Able to create HR practices that support the
organizational cultural values.

 Strategy Architects
– Needs to have skills related to the development of
company’s overall strategic plan and place HR
practices required to support in the accomplishment
of that plan.
1–42
 Qualities of New HR Manager (Contd)

 Operational Executors
– Anticipate, draft and implement the human
resource practices the company needs to
implements its strategy.

 Business Allies
– Competent to apply business knowledge to enable
others to achieve their objectives.

 Credible Activists
– Have leadership and other competencies to make
them both credible and active.

1–43
The Trends Shaping HRM

• Globalization
• Indebtedness
• Technological Advances
There are some • Trends in the Nature of
factors which have Work
changed the • Workforce and
requirements of HRM Demographics Trends
implementation
strategies • Economic Challenges

1–44
HR Professional Certification
 HR is becoming more professionalized.
 Society for Human Resource
Management (SHRM)
– SHRM’s Human Resource Certification
Institute (HRCI) provides certificate such as
• SPHR (senior professional in HR)
• GPHR (Global Professional in HR)
• PHR (professional in HR)

1–45