Chapter 1

The Dynamic Environment of Human Resource Management (HRM)

Suggested Level: Chapter 01, HRM, Decenzo & Robins

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Groups working in an organization

Humans are the most important resources of any organization in order to progress towards the organizational goals. Two main groups or parties work inside an organization. Management or employers Workers or employees

Employer

HRM field
Employees

Employer
The definition of employer differs from economy to economy. Employer is normally defined in the industrial relations laws of the country. Generally employer is a person or group of persons that offer employment to individual in an organization OR those who are involved in management process.

Owners, directors, managers and supervisors/controllers are the common examples of employers.

Employee
Employee is a person or group of persons who are directly involved in the operation of a business. They implement the decisions made by the management. They dont have any direct role in the management process. Support staff, clerical staff and factory workers are the common examples of employees.

HRM field
Personnel or HRM field includes activities or interactions of the two groups (employer and employee) in order to maintain a balance. For example; Conflict resolution Increments in salaries Training programmes Transfers and promotions Hiring of new staff Benefits and facilities

Defining HRM
Personnel or Human Resource Management is the organizational function of recruitment & selection, training & development, motivation and retention of effective human resources.

Introduction
HRM is a subset of management. It has five main goals:

attract
employees

retain
employees

Goals of HRM

hire
employees

motivate
employees

train
employees

Strong employees = competitive advantage.

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Understanding Cultural Environments

HRM operates in a global business environment.

Countries have different values morals customs political, economic, and legal systems

HRM helps employees understand other countries political and economic conditions.
Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

The Changing World of Technology

HRM operates in a technologically changing environment. Thomas Friedman:
Globalization 1.0 (1492-1800) Driven by transportation Globalization 2.0 (1800 -2000) Driven by communication Globalization 3.0 (2000 -????) Driven by technology

3.0 fueled by instant communication and the Internet.

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

The Changing World of Technology

HRM information systems help to

facilitate HR plans
make decisions faster clearly define jobs evaluate performance provide desirable, cost-effective benefits

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

The Changing World of Technology

HR managers use technology to:

recruit, hire, and train employees

motivate and monitor workers

research fair compensation packages

communicate throughout the organization evaluate employees performance

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Workforce Diversity

The workforce (human resources) belong to a diverse group of values and lifestyle.

As per the modern research the workforce do not set aside their cultural values and lifestyle preferences when they come to work.

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Continuous Improvement Programme

Organizational commitment to continuously improving the quality of products and services. HRM plays a vital role in CIP by preparing individuals for the change. Changes need to be communicated; Why the change is occurring What is its effect on employees performance

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Continuous Improvement Programs

focus on customer
concern for continuous improvement

empowerment of employees

continuous improvement components

accurate measurement

concern for total quality

HR managers help workers adapt to continuous improvement changes through retraining, providing answers, and monitoring expectations.
Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Employee Involvement
Its all about employee empowerment through involvement, which increases worker productivity and loyalty.

Employee Involvement Concepts delegation participative management work teams goal setting employer training

See http://workhelp.org/joomla/content/view/284/ for managerial tips on empowering employees.

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Important terms

Downsizing: Rightsizing : Outsourcing: Contingent workforce: Core employees: Ethics::

Fundamentals of Human Resource Management, 10/e, DeCenzo/Robbins

Downsizing

What is Downsizing? A downsizing strategy reduces the scale (size) and scope of a business to improve its financial performance (Robbins & Pearce, 1992). A reduction of the workforce is one of only several possible ways of improving profitability or reducing costs.

Rightsizing

What is Rightsizing? Bringing the necessary adjustments in the size of workforce. It may include a small reduction as well. Rightsizing can be achieved by a number of painless means such as: Freezing recruitment Releasing the early retirement Releasing poor performers

Contingent Workforce

The part time, temporary and contract workers used by organizations to fill peak staffing needs or perform work not done by the core employees.

Core Employees

An organizations full time employee population.

Ethics

A set of rules or principles that defines a right and wrong conduct.