BASIC CONEPTS OF HUMAN RESOURCE MANAGEMENT -

BY – DR. SASI S. NDURE

1.0 DEFINITIONS

 Human Resource Management (HRM) is ‘a strategic and coherent approach to

the Management of an organisation’s most valued assets: the people working
there who individually and collectively contribute to the achievement of its
objectives for sustainable competitive advantage’. (Amstrong, 1997)

 Human Resource Management is the strategic approach to acquiring,

developing, managing, motivating and gaining the commitment of the
organisation’s key resources – the people who work in and for it.

2.0 ORIGIN AND UNDERLYING PRINCIPLES OF HUMAN RESOURCE

MANAGEMENT

 The term Human Resource Management (HRM) originated in the United States
of America (USA) in the late 1970s as a label for the way certain blue-chip
companies such as IBM, Xerox and Hewlett Packard were managing their
people. In order to give themselves a competitive edge over their people, these
companies managed their people according to what David Guest (2002) later
defined as the four underlying principles of HRM;

i. Strategic integration

ii. Commitment

iii. Flexibility

iv. Quality

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i. Strategic Integration

Is concerned with fully integrating HRM into strategic planning, with

developing coherent policies throughout the organization and with
getting HRM practices accepted and used by line managers as part
of their everyday work. For example, by creating a culture and
agreeing performance targets which support what the organization
is trying to achieve.

ii. Commitment

Is concerned with binding employees to the organization and

getting them dedicate their efforts to high performance. For
example, by offering meaningful chances for development and by
rewarding good performance.

iii. Flexibility

Is concerned with developing an organization structure which is

adaptive to and receptive to innovation and offers functional
flexibility. For example, by adding new skills to employees’ lists of
duties and responsibilities and by employing people on flexible
fixed-term contracts.

iv. Quality

Is concerned with obtaining and developing the high quality staff

required to produce the high quality goods and services in the
flexible organization. For example, by responding to customer
needs and by reducing waste and error to a minimum.

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3.0 PERSONNEL POLICIES

A policy is a general statement or understanding which provides guidelines for

management decision-making.

Key areas of personnel policy can include the following:

 Recruitment and Selection

 Pay and Benefits (Pensions etc)
 Relations with Trade Unions or Staff Associations
 Career Development
 Training
 Safety and Health
 Employment Legislation

As in other policy areas, personnel policies are guidelines for behavior stating
what the organization will do, or positively will not do, in relation to its employees
and employee affairs.

Examples of personnel policies are as follows:

 Every job vacancy will be advertised within the organization before any
external advertising takes place;

 The company will encourage employees to pursue training and education

opportunities, where this might qualify them for promotion or career
development moves within the organisation;

 The organization will always negotiate in good faith with the

representatives of recognized independent trade unions;

 The company will always endeavour to obey the spirit as well as the
letter of laws relating to employment; it will actively discourage any
activities which might cause a breach of the law.

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4.0 GOALS OF HUMAN RESOURCE MANAGEMENT (HRM)

The goals of HRM are:

 Attract an effective work force to the organisation

 Develop the work force to its potential
 Maintain the work force over the long term

4.1 Attracting an Effective Work force

The organization’s effort to attract employees is a matching model.

The organization and the individual attempt to match the needs, interests,
and values that they offer each other.

 The organization offers inducements

 The employee offers contributions

A. Human Resource Planning

Meeting current and future human resource needs begins with a plan.

A plan is a ‘blueprint’ for goal-attainment

Human resource planning is the forecasting of human resource needs

and the projected matching of individuals with expected vacancies.

HRM planning begins with several questions:

 What new technologies are emerging and how will they affect the
organization?
 What will be the volume of business in the next few years?
 What is the turnover rate and how much is avoidable?

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By anticipating future HRM needs, the organization can prepare to meet the
competition.

This is much better than reacting to problems as they happen.

HRM planning involves an analysis of the organisation’s goals and strategies, the
needed skills, abilities, positions, and competencies coupled with knowledge of
trends in employment laws and in personnel availability.

Job analysis is the process of obtaining information about jobs through

examination of job content.

Job analysis provides data for personnel forecasting.

From the data, HRM can determine:

 Qualifications to perform the job

 What performance is required
 Worth of the job for compensation

HRM forecasting techniques are classified as short range or long range.

i. Short-range forecasting is based on:

 The demand for the organization’s product or service

 Forecasts of labor market conditions and internal factors such as
turnover

ii. Long-range forecasting includes:

 Intuition
 Extrapolation from past trends
 Group decision making
 Statistical data used to project labor needs

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B. Recruiting

Once human resource needs have been identified, an effort is made to recruit
acceptable candidates.

Recruiting is defining the characteristics of applications to which selection

procedures are applied.

1. Internal recruiting or promote-from-within

 Less costly than an external search

 Generates higher employee commitment
 Offers career advancement

2. External recruiting gains new comers from outside the organization.

Sources include:

 Newspaper ads
 State employment services
 Private employment agencies
 Job fairs
 Employee referrals (the cheapest and most reliable method)

Realistic job previews (RJP) give applicants all pertinent and realistic
information, positive and negative, about the job and the organization.
They also:

 Enhance employee satisfaction

 Reduce turnover

Legal considerations must be followed in recruiting.

Equal Employment Opportunity (EEO) laws require that recruiting and

hiring decisions cannot discriminate on the basis of:

 Race
 National origin
 Religion
 Sex

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C. Selection

Selection is the choosing of desired employees from the pool of recruited

applicants.

The employer attempts to determine the fit between the job and the applicant.

Job descriptions list job duties as well as desirable qualifications for a

particular job.

Selection devices frequently include:

i. An application form is used to collect information about the applicant’s

education, experience, and background

ii. Interviews are used to hire persons in almost every job in every
organization.

The interview, as generally practiced, is a poor predictor of later job

performance.

iii. Paper-and-pencil tests are good predictors of later job performance

and include tests such as:

 Intelligence test
 Aptitude and ability tests
 Personality inventories

iv. Assessment centers are used to select individuals with high potential
for management careers.

One technique used is the in-basket simulation, which requires the

applicant to play the role of a manager and respond to a number of
memos in his or her in-basket. Judges assess the applicant’s
interpersonal, communication, and problem-solving skills.

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4.2 Developing an Effective Work Force

Following selection, the major goal of HRM is to develop employees into

an effective work force.

A. Training and Development

1. Training and development is a planned effort by an organization for

employees to learn job-related behaviours.

2. Development refers to teaching managers the skills for both

present and future jobs.

Frequently used training methods include:

a. On-the-job training (OJT), the most common method of training

b. Orientation training, in which newcomers are introduced to the

organization’s culture

c. Classroom training

d. Programmed and computer-assessed instruction

e. Case discussion groups

B. Performance Appraisal

Performance appraisal is observing and assessing employee

performance, recording the assessment, and providing feedback to the
employee.

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 Assessing performance accurately is difficult and the following are
rating problems:

1. Halo error occurs when an employee receives the same rating on all
dimensions of the job even if performance is good on some
dimensions and not good on others.

2. Homogeneity occurs when a rater gives all employees a similar rating

even though their performances are not equal.

The performance appraisal interview provides feedback to the employee.

Suggestions to increase the effectiveness of the interview include:

a. Raters should know the subordinate’s job and performance level.

b. Raters should welcome employee participation during the

interview.

c. A contingency approach to feedback should be used based on the

subordinate, the job, and the performance level.

d. Supervisors should be trained to conduct better interviews.

4.3 Maintaining an Effective Work Force

Since the work force has been recruited and developed, let us turn to how
to maintain the work force.

A. Compensation

Compensation refers to all:

 Monetary payments or wages and /or salaries

 Goods or commodities used in lieu of money to reward employees
or fringe benefits.

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 A company’s compensation strategy should:

 Fit company strategy

 Provide compensation equity

Management’s strategy for the organization should be the determinant

of the pay system.

1. Pay-for-performance systems are useful in both large and small firms.

These systems are usually designed as a form of profit sharing to reward

employees when profitability goals are met.

2. Compensation equity is desired to maintain a sense of fairness and

equity within the pay structure.

The purpose is to maintain employee morale

3. Job evaluation is the process of determining the worth of jobs within

the organization.

The intent is to pay what employees believe is fair.

B. Wage and Salary Structure

Wage and Salary Structure concerns the formal process of job evaluation.

1. The most commonly used job evaluation system is the point system.

Managers select job factors and decide how much each factor will be
weighted in establishing job worth.

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 Typical job factors weighted are:

 Skill
 Effort
 Responsibility

The job evaluation establishes an internal hierarchy of job worth.

2. To determine competitive market pay rates most organizations obtain a pay

survey.

Pay surveys show what other organizations pay incumbents in jobs that match
jobs in the organization.

Pay surveys are available from many sources such as:

 Consulting firms
 U.S. Bureau of Labor Statistics or Gambia Bureau of Statistics (GBOS)
 Trade associations

C. Benefits

Benefits offered by the organization to maintain a productive work force are

equally as important as the wage and salary structure.

Benefits were once called fringe benefits, but this term is no longer accurate.

Benefits are now a central part of the compensation package.

Benefits in general are one-third of labour costs and in some industries nearly
two-thirds.

A major reason benefits are such a large portion of the compensation package
is due to health-care costs.

Cost-effective benefits should be sensitive to changes in employee life styles.

Some firms have cafeteria-style benefit packages that allow employees to

select the benefits of greatest value of them

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 D. Terminations

Terminations are valuable in maintaining an effective work force.

Employees who are poor performers can be dismissed.

Employers can use exit interviews with departing employees to determine why
they are leaving.

An exit interview is an excellent, inexpensive tool to learn about dissatisfaction

within the organization.

Enlightened companies try to find a smooth transition for departing employees.

By showing concern, the company communicates the value of human

resources and helps maintain a positive corporate culture.

5.0. Summary

HRM tries to achieve the following:

Attract an effective work force through:

 Human resource planning

 Recruiting
 Employee selection

Develop an effective work force by:

 Orientation of new comers

 Training programs
 Performance appraisal programs

Maintaining an effective work force with:

 Wage and salary systems

 Benefits packages
 Terminations

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