Chapter 1

The Nature of
Human Resource
Management

PowerPoint Program Pre, Monmouth

University
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Learning Objectives
1. Describe contemporary human resource
management perspectives.
2. Trace the evolution of the human resource
function in organizations.
3. Identify and discuss
the fundamental goals of human resource
management.
4. Describe the job of human resource managers
from the perspectives of professionalism and
careers.
5. Discuss the setting for human resource
management.
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Human Resources (HR)

Human resources are the people an

organization employs to carry out various jobs,
tasks, and functions in exchange for wages,
salaries, and other rewards.

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What Is Human Resource Management (HRM)?

 The comprehensive set of

managerial activities and
tasks concerned with
developing and
maintaining a qualified
workforce - human
resources – in ways
at contribute to
organizational
effectiveness.
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Contemporary Human Resource
Management Perspectives
In most organizations today, the role of human
resource management has become quite
important. This results partly from a growing
realization of the importance of people as a
source of competitive advantage, but there are
more practical reasons, such as:
1. Passage of Title VII of the Civil Rights Act
made it clear that organizations had to find
ways to hire, reward, and manage people
effectively within the limits of the law.
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Title VII of the U.S. Civil Rights Act of 1964

- It prohibits discrimination on the basis of

an individual’s race, color, religious beliefs,
sex or national origin.
 It became the foundation of proper and
fair treatment of manpower regardless of
diversity among people.

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Contemporary Human Resource Management
Perspectives

2. Most firms now use the term human

resource management to better reflect the
strategic role of people management in
companies; however, some firms have
created unique titles for human resource
managers such as chief knowledge officer.

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Contemporary Human Resource Management
Perspectives
3. The 1980s and 1990s brought changes
to the human resource management
function in response to firms’ going out of
business, a wave of mergers and
acquisitions, and an era of downsizing,
rightsizing, and reengineering that caused
worker displacement and increased the use
of outsourcing in human resource
activities.
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Contemporary Human Resource Management
Perspectives

Outsourcing is the process of hiring outside

firms to handle basic human resource
management functions, presumably more
efficiently than the organization.

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Contemporary Human Resource Management
Perspectives
4. The trends that changed the HR function
continue today, such as mergers and
acquisitions, which now are often between
two firms in different countries. The post-
affirmative action legal climate for human
resources is becoming more complex. A rise
in terrorism has made security more difficult
too.

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Evolution of the Human Resource Function

The first serious study of management

practice was based on…. Scientific
Management, which was concerned with
structuring jobs for maximum efficiency and
productivity. It helped augment the concepts
of assembly-line production, division of
labor, and economies of scale.

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Evolution of the Human Resource Function

A. Origins of the Human Resource Function

1. Rapidly expanding companies in the early
1900s created new specialized units to hire new
employees and to help manage the existing
workforce.
2. The work of Darwin in individual differences
and that of Binet and Simon in intelligence testing
(used in WWI) provided new tools to manage
employment processes

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Evolution of the Human Resource Function
3. By 1923, Personnel Management, a book by
Scott and Clothier, was spelling out how to match
a person’s skills and aptitudes with job
requirements.
4. The human relations era emerged following
the Hawthorne studies in the early 1930s.
a) Human behavior was recognized to relate to
worker performance.
b) Maslow’s hierarchy of human needs and
McGregor’s Theory X and Theory Y were
popularized at this time.
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Personnel Management time line:

1. During the 1930s and 1940s, specialized units gradually

became known as personnel departments, which were self-
contained and dealt with basic human resource activities
such as hiring, pay, and benefits.
2. Personnel management became a new type of
management function, mainly concerned with hiring first-line
employees and was directed by the personnel manager.
3. During World War II, psychologists were consulted to
help develop selection tests to assess individual skills,
interests, and abilities in order to optimize the fit between
individuals and jobs.

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Personnel Management time line:

4. Wartime lessons in personnel testing were

adapted for use in private industry in the 1950s,
and companies also began to experiment with
more sophisticated reward and incentive systems.
5. The personnel manager’s job also became
more complex as the power of labor unions
increased and government legislation expanded.
6. As late as the 1970s, personnel management
was seen as a routine clerical and bookkeeping
function.
7. 1990’s it becomes a Human Resource
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Management
 LO 2
Human Resource Management in the
Electronic Age
 Electronic systems:
Enable ease of surveillance and communication
Pose legal concerns regarding ethics and privacy
 Increased need for knowledge workers
Employees whose jobs are concerned with the
acquisition and application of knowledge
Contribute through specialized knowledge and
application of that knowledge

How to deal with computer technology

Emerging Human Resource
Challenges
HR managers face an array of
new challenges including:
financial crises
how stress is becoming a major
factor in people’s lives

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 LO 3

Goals of Human Resource Management

Facilitating organizational competitiveness
Enhancing productivity and quality
Complying with legal and social
obligations
Promoting individual growth and
development – education, skill training and
career development
HRM is viewed as part of a psychological
contract with employees
Overall set of expectancies held by the employee with regard
to what he or she will contribute to the organization and vise
versa.
HR Management as a Staff Versus
Line Function
Line managers: those directly responsible
for creating goods and services.
Staff managers: those responsible for
supporting line management’s efforts to achieve
organizational roles and objectives.
 Many organizations have blurred this distinction.

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Human Resource Management in
Smaller Organizations
 Small organizations still use operating managers
to handle their basic human resource functions.

 Small independent businesses are generally

operated in the same way as small
organizations.

 Very small organizations are exempt from many

legal regulations.

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Human Resource Management in
Larger Organizations
 As the organization grows a separate human
resource unit becomes a necessity.

 When an organization reaches 200 to 250

employees, it generally establishes a self-
contained human resource department.

 As the organization continues to grow the

human resource department grow as well into
specialized departments.
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A Systems-Based Perspective

 The human resource management subsystem

both affects and is affected by other functional
subsystems throughout the organization.

 Utility analysis is the attempt to measure, in

more objective terms, the impact and
effectiveness of human resource management
practices in terms of metrics such as a firm’s
financial performance.

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Careers in Human Resource
Management
Careers in HR continue to grow and are
expected to do so.
How to enter the HR field:
Earn a degree, seek and entry level job, and
becoming a line manager.
Some universities offer a master of science or
MBA in HR.

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