CHAPTER 7

HUMAN RESOURCE MANAGEMENT

Human Resource Management
“People are the company’s most important asset. It is
people who make the difference; it is people who work for
the company, who determine whatever a company thrives or
languishes….”

 - Coopers and Lybrand-

Many organizations say the above maxim, or something close
to it, to acknowledge the important role that employees play
in organizational success. These organizations also recognize
that all managers must engage in some human resource
management activities – even if there is a separate HRM
department
WHAT IS HUMAN RESOURCE
MANAGEMENT?
process of attracting, developing and maintaining a
talented and energetic workforce.
strategic process that makes an implacable
contribution to the readiness of any organization to
perform up to expectations
Three major responsibilities in the Human
Resource Management
Attracting a quality workforce – this is the process
of human resource planning, recruitment and selection.

Developing a quality workforce – this is the

responsibility for employee orientation, training and
development and career planning and development.

Maintaining a quality workforce – this involves

management of employee retention and turnover,
performance appraisal and compensation and benefits
Human Resource Process
E N V IR O N M E N T

H um an Id e n tify a n d s e le c t
R e s o u rc e R e c ru itm e n t S e le c tio n c o m p e te n t
P la n n in g e m p lo y e e s

D e c ru itm e n t

P ro v id e e m p lo y e e s
E m p lo y e e ’s w ith u p -to -d a te
T ra in in g
O rie n ta tio n s k ills a n d
k n o w le d g e

R e ta in c o m p e te n t
P e rfo rm a n c e C o m p e n s a tio C a re e r a n d h ig h -
M anagem ent n a n d B e n e fits D e v e lo p m e n t p e r fo rm in g
e m p lo y e e s

E N V IR O N M E N T
ATTRACTING A QUALITY
WORKFORCE
To attract the right people to its workplace, an
organization must first know what it is looking for – it
must have a clear understanding of the jobs to be done
and the talents required to them well. Then it must
have the system in place to excel at employee
recruitment and selection
Human Resource Planning
JOB ANALYSIS
- process of obtaining all
pertinent job facts -

JOB DESCRIPTION JOB SPECIFICATION

- statement containing items such as: - statement of the human
· Job title qualifications necessary to do the job.
· Location Usually contains items such as:
· Job summary · Education
· Duties · Experience
· Machines, tools, equipment · Training
· Materials and forms used · Judgment
· Supervision given or received · Initiative
· Hazards · Physical effort
· Physical skills
· Responsibilities
· Communication skills
· Emotional characteristics
· Unusual sensory demands,
such as sight, smell, hearing
Recruitment
set of activities designed to attract a qualified pool of job
applicants to an organization
External Recruitment – seeks job candidates from outside of
the hiring organization. Newspapers, employment agencies,
colleges, technical training centers, personal contacts, walk-
ins, employee referrals, and even persons from competing
organizations are all sources of external recruitment.

Internal Recruitment – seeks applicants from inside the

organization. This involves notifying existing employees of
job vacancies through job postings and personal
recommendations
 Decruitment
 method for reducing organization’s workforce. It is a
management approach to control labor supply, which is not
pleasant task for any manager
Option Description

Firing Permanent involuntary termination

Layoffs Temporary involuntary termination, may last only a few days or extend to
years
Attrition Not filling openings created by voluntary resignations or normal
retirements
Transfers Moving employees either laterally or downward; usually does not reduce
costs but can reduce intraorganizational supply-demand imbalances
Reduced Having employees work fewer hours per week, share jobs or perform
workweeks their jobs in a part-time basis
Early Providing incentives to older and more senior employees for retiring
Retirements before their normal retirement date.
Job sharing Having employees share one full-time position
Selection
process of choosing from a pool of the best qualified
applicants
SELECTION PROCESS REASONS FOR REJECTION

1. Formal application Deficient qualification

Insufficient ability, ambition or poor

2. Interview or site visit
interpersonal qualitties

3. Testing Poor test scores

4. Reference checks Poor references

5. Physical exam Physically unfit for the job

6. Analysis and decision Overall potential is low

DEVELOPING A QUALITY
WORKFORCE
When people join an organization, they must “learn
the ropes” and become familiar with the way things are
done.
Socialization is the process of influencing the
expectations, behavior and attitudes of a new
employee in a way considered desirable by the
organization. The intent of socialization in the human
resource management process is to help achieve the
best possible fit between the individual, the job, and
the organization
Continuation….
Employee Orientation
Orientation makes new employees familiar with their
jobs, co-workers, and organizational policies, rules,
objectives, and services. Good orientation enhances a
person’s understanding of the organization and adds
purpose to his/her daily job activities. Increased
performance, greater job satisfaction, and greater
commitment to the Job and organizational culture are
the desired results
Training and Development
Training is a set of activities that provides the
opportunities to acquire and improve job-related skills.

On-the-job training takes place in the work setting

while someone is doing a job.

Job rotation allows people to spend time working in

different jobs and thus expand the range of their job
capabilities.

Coaching occurs when an experienced person gives

specific technical advice to someone else.
 Continuation…

Apprenticeship involves a work assignment wherein a

person serves as understudy or assistant to someone who
already has the desired job skills.
 
Modeling is the process by which someone demonstrates
through personal behavior what is expected of others.

Mentoring is the sharing of experiences and insights

between an experienced and inexperienced person.

Off- the-job training is accomplished outside the work

setting. It may be done within the organization at a
separate training room or facility or at an off-site location
 Performance Management
The process of formally assessing someone’s work
accomplishments and providing feedback is referred to as
performance appraisal. It serves two basic purposes in the
maintenance of a quality workforce.

Evaluation purpose is intended to let people know where

they stand relative to performance objectives and
standards.

Development purpose is intended to assist in their training

and continued personal development
  
Performance appraisal methods
Graphic Rating Scale - uses a checklist of traits or characteristics to
evaluate performance. A manager rates the individual on each trait using a
numerical score.

Narrative Technique - uses a written essay approach to describe a

person’s performance.

Behaviorally Anchored Rating Scales (BARS) - uses specific

descriptions of actual behaviors to rate various levels of performance.

Critical Incident Technique - involves keeping a running log of effective

and ineffective job behaviors.

Multi-person Comparison - compares one person’s performance with that

of others,
MAINTAINING A QUALITY WORKFORCE
It is not enough to attract and develop a qualified
workforce; it must be successfully nurtured and managed
for long-term effectiveness
Career Development
- Career planning is the process of systematically
matching career goals and individual capabilities with
opportunities for their fulfillment. Sooner or later,
most people’s careers level off
- Career plateau is a position from which someone is
unlikely to move a higher level of work
responsibility. Three common reasons for career
plateaus are personal choice, limited abilities, and
limited opportunities
 Continuation….
Retention and Turnover
Replacement refers to the management of promotions,
transfers, terminations, layoffs, and retirements.

Promotion is the advancement of an employee to a better

job - better in terms of greater responsibilities, more prestige
or status, greater skill, and especially increased rate of pay or
salary.
Transfer is the movement of an employee from one job to
another on the same occupational level and on about the
same level of wages or salary. Some types of transfer are:
Production Transfer - is intended to avoid layoffs on one
job while workers are being hired for a similar type of work
elsewhere.
 continuation
Replacement Transfer - is similar to that of production
transfer however, an employee with longer service is
transferred to a similar job in another department where he
replaces another with shorter service.
Versatility Transfer - is intended to train workers to
handle a variety of jobs in preparation for production or
replacement transfers or for small companies.
Shift Transfer happens when shift assignments are not
rotating; transfers are made from a less favorable shift to a
more favorable shift.
 Remedial Transfer - is intended to correct faulty
selection or placement of an employee.
Termination is the involuntary and permanent dismissal
of an employee.
 Continuation….
Compensation and Benefits
When properly designed and implemented, compensation
and benefit systems help attract qualified people to the
organization and retain them
Base Compensation - is the salary or hourly wage paid to
an individual. The wage or salary rate that an organization
has to compensate personnel at various levels varies,
depending upon:
1. The financial condition of the company
2. The wage and salary paid by other companies or
organizations.
4. The demand for and supply of labor
5. The strength of labor
6. Governmental regulation
 Continuation…
Fringe Benefits the additional nonwage or nonsalary
form of compensation. Some examples of benefits
include:
1. Vacation and sick leaves with pay.
2. Hospitalization benefits.
3. Medical care.
4. Educational benefits.
5. Financial assistance in the form of loans for home
construction and emergency needs.
7. Retirement benefits.
8. Profit sharing.
9. Christmas and production bonuses