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Chapter 1Introduction to HRM
Dr. Nazrul Islam
East West University
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Early History of HRMKey principles and practices associated
with HRM date back to the beginning ofmankind.
Mechanisms were developed for theselection of tribal leaders, for example,and knowledge was recorded and passedon to youth about safety, health,hunting, and gathering.
More advanced HRM functions weredeveloped as early as 1000 and 2000B.C.
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Early History of HRM Contd.Employee screening tests have been
traced back to 1115 B.C. in China, forinstance .
And the earliest form of industrialeducation, the apprentice system, wasstarted in ancient Greek and Babyloniancivilizations before gaining prominence
during medieval times.
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Inception of Modern MGT Theory Since the inception of modem management
theory, the terminology used to describe therole and function of workers has evolved from"personnel" to "industrial relations" to"employee relations" to "human resources
..
While all of these terms remain in use, "humanresources" most accurately represents theview of workers by contemporary management
theory: as valuable resources managed in thesame manner as other valuable resources.
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Industrial Revolution and HRM Substituted machine power for human labor
Created large organizations and massproduction was started
Formal management was required The need for an organized form of HRM
emerged, as the manufacturing processevolved from a cottage system to factory
production.
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Development of HRM in USAs the United States shifted from an
agricultural economy to an industrialeconomy, companies were forced todevelop and implement effective ways ofrecruiting and keeping skilled workers.
In addition, industrialization helped spur(prompt) immigration, as the countryopened its borders to fill industrialpositions.
Filling these jobs with immigrants,however, created an even greater needfor adequate management of employees.
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Development of HRM in US, Contd., Between the 1880s and the 1940s, immigration
rose significantly and remained robust untilWorld War II. Advertisements circulated throughout the
world depicting the United States as the landof opportunity where good-paying industrial
jobs were plentiful. As a result, low-cost immigrant workers
occupied manufacturing, construction, andmachinery operation positions from othercountries where low-skill workers are available.
Even though these employees performedlargely routine tasks, managers faced seriousobstacles when trying to manage them sincethey spoke different languages.
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Development of HRM in US, Contd.,Early human resource management
techniques included social welfareapproaches aimed at helping immigrantsadjust to their jobs and to life in theUnited States.
These programs assisted immigrants inlearning English and obtaining housingand medical care.
In addition, these techniques promotedsupervisory training in order to increaseproductivity.
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Development of HRM in US, Contd.,While some companies paid attention to
the "human" side of employment,however, others did not.
Therefore, other factors such ashazardous working conditions and
pressure from labor unions alsoincreased the importance of effectiveHRM.
These problems include hazardous tasks,long hours, and unhealthy workingenvironments at workplace.
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Development of HRM in US, Contd.,
The direct cause of employers seekingbetter HRM programs was not poorworking conditions, but rather theprotests and pressures generated by
workers and organized labor unions.Indeed, labor unions, which had existed
as early as 1790 in the United States,became much more powerful during the
late 1800s and early 1900s.
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Other Factors Relating to the Development of HRM There were two other particularly important
contributing factors to the origination ofmodem HRM during that period. The first was the industrial welfare movement,
which represented a shift in the way thatmanagers viewed employeesfrom nonhuman
resources to human beings. That movementresulted in the creation of medical care andeducational facilities.
The second factor was Frederick W. Taylor's(1856-1915) Scientific Management, a landmark
book that outlined management methods forattaining greater productivity from low-levelproduction workers.
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HRM Development: 1930 to Before World War II
During the 1930s and 1940s the general focusof HRM changed from a focus on workerefficiency and skills to employee satisfaction.
That shift became especially pronounced afterWorld War II, when a shortage of skilled labor
forced companies to pay more attention toworkers' needs. Employers, influenced by the famous
Hawthorne productivity studies, began toemphasize personal development and improvedworking conditions as a means of motivatingemployees.
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HRM after World War II
In the 1960s and 1970s the federal government ofUS formulated a law Equal Pay Act of 1963, theCivil Rights Act of 1964, the Employee RetirementIncome Security Act of 1974 (ERISA), and theOccupational Safety and Health Act of 1970 forfair treatment of workers. Because of these acts,
companies began placing greater emphasis on HRMin order to avoid lawsuits for violating thislegislation.
These regulations created an entirely new legal rolefor HRM professionals.
Furthermore, during 1970s, HRM gained status as arecognized profession with the advent of humanresource programs in colleges.
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HRM after World War II, Contd., By the end of the 1970s, virtually all medium-
sized and large companies and institutions hadsome type of HRM program in place to handlerecruitment, training, regulatory compliance,dismissal, and other related issues.
HRM's importance continued to grow duringthe 1980s for several reasons. Changing workforce values, for example,
required the skills of HRM professionals toadapt organizational structures to a new
generation of workers with different attitudes.
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HRM after World War II, Contd.,
Demographic changes also changed the way theworkers hired, fired, and managed.Other factors contributing to the importance
of HRM during the 1980s and 1990s wereincreasing education levels, growth of serviceand white-collar jobs, corporate restructuring(including reductions in middle management),more women in the workforce, slower domesticmarket growth, and greater internationalcompetition.
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7 Assumptions for HRMR. Wayne Pace, writing in Human ResourceDevelopment, identifies seven underlying assumptionsthat provide a foundation and direction for HRM.
1. First is the acknowledgment of individual worth,suggesting that companies recognize and valueindividual contributions.
2. Second is that employees are resourceswho canlearn new skills and ideas and can be trained tooccupy new positions in the organization.
3. Third is that quality of work life is a legitimateconcern, and that employees have a right to safe,clean, and pleasant surroundings.
4. A fourth assumption is the need for continuouslearning; talents and skills must be continually refinedin the long-term interests of the organization.
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7 Assumptions for HRM, Contd.,5. A fifth assumption supporting the existence of an
organized HRMwithin a company or institution isthat opportunities are constantly changing andcompanies need methods to facilitate continualworker adaptation.
6. Sixth is employee satisfaction, which implies that
humans have a right to be satisfied by their workand that employers have a responsibility and profitmotivation to try to match a worker's skills withhis or her job.
7. The seventh and final assumption is that HRMencompasses a much broader scope than
technical training. Employees need to know morethan the requirements of a specific task in orderto make their maximum contribution.
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Definition of HRM In its broadest sense, HRM refers to the
management of all decisions within anorganization that are related to people.
In practice, however, HRM is a tool used to try
to make optimum use of human resources, tofoster individual development, and to complywith government mandates.
Larger organizations typically have an HRMdepartment and its primary objective is making
company goals compatible with employeegoals.
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Three Major Resources of Business Physical resources, such as materials and
equipment; Financial resources, including cash,
credit, and debt; and Human resourcesor workers.
Among all these, the factor that is most
likely to provide potential competitiveadvantage is Human Resource.
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Major HRM FunctionsHRM implementation activities fall intofour functional groups, each of whichincludes related legal responsibilities:
Acquisition Development Compensation, and Maintenance.
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Human ResourceFunctions
Compensation
Acquisition
Maintenance Development
Functions of Human Resources management
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AcquisitionAcquisition duties consist of humanresource planning for employees, whichincludes activities related to:
analyzing employment needs,
determining the necessary skills forpositions, identifying job and industry trends, and forecasting future employment levels and
skill requirements.
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Acquisition..Contd.,Four specific goals of effective human resource
planning are:
1. Sustaining stable workforce levels during ups anddowns in output, which can reduce unnecessaryemployment costs and liabilities and increase
employee morale that would otherwise suffer inthe event of lay-offs.2. Preventing a high turnover rate among younger
recruits.3. Reducing problems associated with replacing key
decision makers in the event of an unexpected
absence.4. Making it possible for financial resource managers
to efficiently plan departmental budgets.
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DevelopmentThe second major HRM function, human
resource development, refers to performanceappraisal,training and development activities.
The basic goal of appraisal is to providefeedback to employees concerning their
performance. This feedback allows them toevaluate the appropriateness of their behaviorin the eyes of their coworkers and managers,correct weaknesses, and improve theircontribution.
They must also tie the appraisal process intocompensation and incentive strategies, and workto ensure that government regulations areobserved.
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CompensationCompensation refers to HRM duties related to
paying employees and providing incentives for them.
HRM professionals are typically charged withdeveloping wage and salary systems that accomplishspecific organizational objectives, such as employeeretention, quality, satisfaction, and motivation.
In particular, HRM managers must learn how todevelop compensation system within the organizationthat doesn't hamper morale and that providessufficient financial motivation.
Besides financial compensation and fringe benefits,
effective HRM managers also design programs thatreward employees by meeting their emotional needs,such as recognition for good work.
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MaintenanceMaintenance of human resources encompasses HRM
activities related to employee benefits,safety andhealth, and worker-management relations.
Employee benefits such as health insurance and freeparking, and are often used to transfer non-taxedcompensation to employees.
The three major categories of benefits managed by HRMmanagers are: employee services, such as recreationalactivities, and legal services; vacations, holidays, andother allowed absences; and services related to benefitssuch as insurance, retirement, health benefits etc.
To successfully administer a benefits program, HRMprofessionals need to understand tax incentives,retirement investment plans, and other benefit packages.
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Line and Staff Aspects of HRMAre all managers HR Managers?
First, need to define authority: The right tomake decisions, to direct others is authority.
1. Line managerA manager who is authorized to direct the
work of subordinates and is responsible foraccomplishing the organizations tasks.2. Staff manager
A manager who assists and advises linemanagers.
HR Managers can be considered staff managers.
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Roles of HR Manager A line function
The HR manager directs the activities of the people inhis or her own department. Also have implied authorityhas the ear of top
management.
A coordinative function
HR managers also coordinate personnel activities, aduty often referred to as functional control.
Right arm of the top executive
Staff (assist and advise) functions
Assisting and advising line managers is the heart ofthe HR managers job. Employee advocacy.
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Employment and RecruitingWho Handles It?(percentage of all employers)
Source: HR Department Benchmarks and Analysis, BNA/Society for Human Resource Management, 2002.
Note: length of bars represents prevalence of activity among all surveyed employers.
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How HR Spends Its Time
Source: Adapted from How Much Time Should Your HR staff Spend on Recruiting?
Human Resources Department Management Report, June 2000, p. 6.
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QUESTIONS&
ANSWER
