Chapter 1

Introduction to Human
Resource Management
Reference Books:
Human Resource Management ( Gary Dessler)
Human Resource Management (Mondy)
Human Resources and Personnel Management ( Keith Davis)
Internet

Resource Person: Furqan-ul-haq Siddiqui

The Management
PHYSICAL
RESOURC
ES

Planning

iz

in
g

ORGANIZATIONAL
GOALS
O
rg

an

Co
nt
ro
g lli
n

HUMAN
RESOURCES

INFORMATION
RESOURCES

Leading

FINANCIA
L
RESOURC
ES

Management in Organizations
Planning
and decision
making

Organizing

Inputs from the environment

Human resources
Financial resources
Physical resources
Information resources

Goals attained
Efficiently
Effectively

Controlling

Leading

HRM

Human

Resource

Management

Human Resource Management

Managerial function that

tries to match an
organizations needs to the
skills and abilities of its sible,
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Human Resource Management

Human Resource Management (HRM) is the

approach of Management of an organization's most
valued assets - the people working there who
individually and collectively contribute to the
achievement of the objectives of the business. In
simple sense, HRM means employing people,
developing their resources, utilizing, maintaining
and compensating their services in tune with the job
and organizational requirements to achieve its goals
effectively & efficiently.

Organizational Performance

Efficiency: A measure of how well resources

are used to achieve a goal

Doing Things Right

Effectiveness: A measure of the

appropriateness of the goals chosen (are these
the right goals?), and the degree to which they
are achieved

Doing the Right Things Right

Efficiency versus Effectiveness

Efficiency:
Operating in
such a way
that resources
are not wasted

Effectiveness:
Successful
Managemen
t

Doing the right

things in the
right way at
the right times

Functions of HRM

Determining the nature, functions of each employees job

Planning HR 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 developing managers

Building employee commitment

Staffing

Employee
& Labor
Relations

HUMAN RESOURCE
MANAGEMENT
FUNCTIONS

Safety &
Health

Human
Resource
Development

Compensation
& Benefits

Why Is HRM Important to All Managers?

Some Common Consequences Caused by
Poor HRM Practices

Hire the wrong person for the job

Experience high turnover/dissatisfaction

Have your people not doing their best

Employees will not know that what to do & how to do

Have your company in court because of

discriminatory/unlawful actions

Have some employees think their salaries are unfair and

inequitable internally & externally

Allow a lack of training to undermine your departments

effectiveness

Commit any unfair labor practices

Functions of HRM
1.Staffing
5.Employee
& Labor
Relations

Functions
of HRM

4.Safety &
Health

2.Human
Resource
Development

3.Compensation
& Benefits

1.Staffing
Process through which an organization ensures that it
always has the proper number of employees with the
appropriate skills in the right jobs at the right time to
achieve the organizations objectives.
It includes
Personnel planning
Job Analysis
Recruitment
Selection

2.Human Resource Development

Major Personnel function that consist not only of
T&D but also individual career planning,
developing activities and performance appraisal.
HRD is composed of
Training
Development
Career planning
Career Development
Performance Appraisal

3.Compensation & Benefits

Consist of all direct, indirect, financial & non
financial rewards given to employees in return of
their services.
Pay - Money that a person receives for performing a
job
Benefits Additional Financial rewards in addition
to base pay including paid vocations, sick leave,
insurance etc.
Non financial Rewards
The Job
The Environment

4. Safety & Health

Safety involves protecting employees from injuries
caused by work related accidents. Health refers to
employees freedom from physical or emotional
illness.
5. Employee & Labor Relation
Deals with employee employer relationship &
dealing with labor unions

Successful HRM
Good for
Organization

Employee
Society

Competitive Advantage

Competitive
advantage means
any factors that allow
an organization to
differentiate its
product or service
from those of its
competitors to
increase market
share

HR as
Competitive Advantage

There is greater
recognition that
distinctive competencies
are obtained through
highly developed
employee skills,
distinctive organizational
cultures, management
processes, and
systems.

Effective
Effective
HRM
HRM

Effective
Effective
Organization
Organization

Managing Human Resources

Purpose

of HRM is;

To attract
To Develop
To Motivate and
To Keep talented people
To achieve goals
Challenges?

Legal consideration

EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT

Labor Force

OPS

Mkt

Employee
& Labor
Relations

technology

Safety
& Health

Staffing

HR Management
Functions

Fin.
Customer

downsizing

Compensation
& Benefits
OFA

Turn over
Competition

Share holder

Unions

Brain drain

Budget

Human
Resource
Development

Society

The Economy

Environment (Challenges) of HRM

The External Environment

Components

Labor Force
legislation
Society ( Social
Responsibility)
Unions
Stakeholders

Competition
Customers
Technology
Economy
Brain-drain
Rapid change

Open System- An open system is one that is effected by environments

Firm has little control over external factors

 Legislation

The Government regulation related to

HR & labor force
Employment laws
Laws and Regulations

for safety
Minimum wage rate
EEO
Working hours
Immigrants
Child Labor
Women

Pakistan
Pakistan's first minimum wage was implemented in
1992 and does not apply to agricultural workers and
Newspapers.
The first minimum wage was 1,500PKR
(~US$24.60) per month.
It was raised in 1996 to 1,650PKR (~US$ 27.10),
in 1998 to 1,950PKR (US$ 32)
in 2006 to 4000PKR(US$ $66)
and is currently, as of 2008, at 6000PKR per month.

International Dimension/ Globalization

The extent to which an
organization is involved in
or affected by business with
other countries.
The internationalization of
products and services of a
firm heavily influence
organizational HR decisions.

Economic Environment

The overall strength & vitality of the economic

system in which organization operates. Factors that
affect buying power and spending patterns of
organization & its customers/suppliers.
Trends of interest:

Inflation
Interest Rates
Employment ratios
Per Capital Income
Purchasing power of customers
Stage of Business/Economic Cycle (prosperity, recession,
depression and recovery)

Labor Force- its the pool of individuals who are

willing to work for a company.

This map
shows the global
distribution of labor
force in 2006 as
a percentage of
the top market
(China - 795,300,000).

The Internal Environment

Limited budgets
Trends of Downsizing
Workforce Diversity
High Turn over- is the rate at which an employer gains

and loses employees or the rate of traffic through the

revolving door."

Restructuring-the act of reorganizing the legal,

ownership, operational, or other structures of a company for
the purpose of making it more profitable, or better organized
for its present needs.

Internal Unions

Proactive Versus Reactive

Reactive Response: Action taken in

response to change
Proactive Response: Action taken in
anticipation of change