ESSENTIALS OF HUMAN RESOURCE

MANAGEMENT BY ANTHONY GERARD

MEANING AND ROLE OF HUMAN RESOURCE MANAGEMENT

Human resource management is an activity in organizations whether they are business or

service-oriented, large or small. A simple definition of an organization is a group of
people who work together to achieve common goals. Thus we see that the concept of
organizations cannot be separated from the need for people.

Organisations cannot exist without people. The purpose of human resource management
is to ensure that people employed by the organization are being used efficiently and
effectively as possible and that they are able to contribute towards achieving the
organizational goals. This is the employers objective in having human resource
specialists. At the same time, these specialists are expected to keep in mind the
importance of satisfying the needs of the employees. Satisfied workers will be more
productive and are an asset to the employer.

THE GROWTH OF THE HUMAN RESOURCE FUNCTION

In the 18th and 19th centuries, a revolution took place in the economic system of Great
Britain first, and then later the other West European nations and the United States. The
development of transport and machinery lead to the growth of a factory system where
workers were grouped together in buildings built exclusively for the purpose of
producing certain goods. No more were workers able to make goods in their own homes
as they had under the cottage industry system.

A number of extremely important consequences result from the factory. First, there
developed a group of people who were employed by the factory owners to manage

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the workers. While owner-managers still continued to exist, the increasing size of
organizations meant that the entrepreneurs had no choice but to recruit a group of
employees whose job was to oversee the work of others. Many of these managers, like
the workers they supervised, soon became specialists in various fields. Through extensive
work experience or through educational qualifications (a very recent development), the
managerial group tended to concentrate on one of the various disciplines needed in
business such as finance, marketing or engineering. This specialization was mirrored in
the way work was organized for the non-managerial employees.

The scientific management approach to organizing manufacturing operations

expounded by F.W. Taylor in the early 20th century advocated certain principles:

1. Managers should ensure the most suitable worker was chosen to do each job.
2. Managers should find the best way to do each particular job for which they
are responsible.
3. Managers should train the workforce on how to implement the best way of
doing the job.

Thus managerial functions and non-managerial tasks were carefully separated.

Furthermore, Taylor devised systems whereby the workers were to be motivated
through financial incentives. He set minimum standards to be achieved by the
individual and he introduced higher rates of pay for those able to work faster than
others.

The combination of the principles of specialization, scientific management and monetary

incentives undoubtedly lead to increased efficiency and profits for the owners of the
organizations.

Unfortunately, effects of industrialization have also had negative effects, which have only
been addressed in the later pat of the 20th century. Excessive specialization led to the
craftsmans pride in his work disappearing, as workers were no longer responsible for a

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product as a whole. A wide gulf appeared between them (the management group) and us
(the operative group).

Boredom caused by over-specialisation leads to an increased rate of absenteeism, higher

turnover and higher levels of worker aggression, which may be channeled into union
activities.

The early years of industrialization also led to exploitation of workers. In order to

achieve maximum output, employers require their employees to work long hours in
dangerous work conditions for low pay. Dissatisfaction with the methods of Taylor
and his management people were a factor in the development of a new approach to
management, which had important consequences for human resource management The
Human Relation Movement.

THE HUMAN RELATIONS APPROACH TO MANAGEMENT

By the 1930s, industrial psychology had become a recognized academic field. Elton
Mayo and his associates carried out a series of studies in the Western Electric
Company in the United States of America. As a result of the research in that company, it
was believed that the social relationship between superior and subordinate and between
worker and worker played a major role in increasing productivity. By this time, the
trade union movement was becoming well established in Europe and the USA.
Employers realised that they needed to improve their management of human
resources if they were to survive in business. Human resource specialists were
employed to be responsible for the general well being of the work force. Many social
clubs and recreation programmes were organized in order to keep the workers happy,
loyal to the company and to discourage them from unionizing.

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POST 1950 DEVELOPMENTS

A number of changes in the last 40 years have led to the human resource function
becoming increasing important in the management of organizations. Most significant of
these changes are:

1) The introduction of legislation to protect workers and their rights.

2) The growth in the size of organizations
3) Changes in the economic and social environment.

In Malaysia, in the period immediately after the Japanese Occupation, there were only
three major industries Tin mining, plantations and commercial activities.
However, as the pace of industrialization increased, especially from the 1960s
onwards, the government found it necessary to introduce legislation to protect
workers and set minimum labour standards. Thus, the Employment Act of 1955,
the factories and Machinery Act of 1967, the Employees Provident Fund Act of 1951
and other legislations were passed, and have since then been amended when
necessary. Because of the importance of these acts, employers find it necessary to
have officers who are knowledgeable in the area of employment law.

The increasing number of employees in modern organizations is another affecting

the growth and importance of the human resources function. The value of this
resource as compared to materials and machinery cannot be overestimated.
Efficient human resource management systems are the key to organizational
success. Most employers find it prudent to set up human resource departments, which
can relieve the line managers of the task of record keeping and help them use their
people to best advantage.

A number of major changes in the Malaysian economic and social environment can
be discerned in recent years. These have resulted in workers being more vocal and
aware of their rights. At the same time, workers expectations have increased.

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These changes must be seen in the context of rapid industrialization, which has lead
to a labour shortage, especially for skilled labour. Hence, management needs to
focus more on the needs of its workers if organizational goals are to be achieved. The
most obvious change is the rising educational level. In the 1960s and 1970s, primary
education was more than adequate for the purposes of working in a factory at
operative level. In 1980s and 1990s, the minimum requirements have crept up to 9 or
11 years schooling that is Form 3 or 5. The type of jobs for which people are
employed has also changed. Many factories now use sophisticated technology
including automated and computerized systems.

More and more women are entering the work force. Employers need to offer a
benefits package, which will attract this group of workers. Calls for employer-
subsidised childcare services will increase. Certain large employers are already
offering nursery facilities on site

The most important change to emerge in the 1990s is the shortage of skilled labour.
High levels of turnover have caused employers to focus their attention on their
benefits package and the management of personnel, as these is major influences on
the attraction and retention of good workers.

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HISTORICAL BACKGROUND TO HRM

INDUSTRIAL REVOLUTION

1850s Specialisation

1920s Exploitation of Workers

- Workers Alienation

HUMAN RELATIONS APPROACH

1930s Emphasis on Supervisory Training

1950s Recreational Programmes

- Welfare programmes

RECENT DEVELOPMENTS

1960s Increased Labour Legislation

1990s Organisations Getting Bigger

- Rapid Changes

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STRUCTURE AND FUNCTION OF A HUMAN RESOURCE
DEPARTMENT

Not every organization has a specialized human resource department. A number of

factors determine whether or not a company will have such a department. These factors
are:

1) Size of the organization.

The larger the organization in terms of number of employees, the more likely it is to
have a separate human resource department.

Very small companies cannot afford to employ staff that does not bring in an income to
the firm. Absence of a human resource department, however, does not mean that the
human resource management function is not being carried in such organizations. As long
as people are employed, the human resource function will exist.

Who, then, is responsible for the HRM in such organizations? The answer is that every
head of department or line manager is in charge of ensuring that he has the workers he
needs; workers with the right skills and willing to work. In this case, HRM becomes a
part of the managers normal duties, which will also include making or selling a
product or service.

Medium-sized companies may establish an administration department, which will

take on the servicing of the line department, providing them with services such as
correspondence handling, liaison with government departments, legal matters, office
administration and human resource management.

Once an organization grows beyond a certain size, the technical requirements of

recruitment, training and record keeping becomes too heavy for an administration
department to handle. Hence, a separate and specialist human resource department is
established.

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2) Unionization.
While the number of employees is the key criterion in deciding whether or not to have a
human resource department, an overriding factor may be the status of the employees. If
they belong to a trade union, the company would be wise to employ specialists in the
field of industrial relations and personnel staff who are knowledgeable about labour laws.
In a unionized environment, management needs more specialized knowledge in the area
of management of human resources.

3) Ownership of the Company.

Multinational companies and joint ventures with foreign partners can be expected to need
a human resource department to provide input and knowledge in the areas of industrial
relations and labour laws, which unlike production, marketing and finance need local
expertise.

The responsibility for human resource function can be summarized as follows:

Small Company Head of Departments/ All managers

Medium-Sized Administration Department

Companies

Large-Sized Human Resource Department

Companies

Very Large HR Department, Training

Companies Department and I.R.Department

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4) Philosophy of Top Management
Whether or not a company hires personnel specialists and employs them in a special
department will dependent on the philosophy of the top management concerning the
importance of human resources. If the management truly believes that the organisations
successes and profits are dependent on the co-operation and effort of the workers, they
are more likely to perceive a need for a human resource department. There are
managers who will happily agree with this maxim but will not spend any money on
establishing a human resource department.

PERSONNEL MANAGEMENT AND HUMAN RESOURCES

MANAGEMENT

Personnel management is an important element of the broader subject of human

resources management.

Personnel management is practical, utilitarian and instrumental and mostly concerned

with administration and implementation of policies.

HRM is concerned with wider implications of the management of change and not just
with the effects of change on working practices. It seeks proactively to encourage flexible
attitudes and the acceptance of new methods.

Personnel management is reactive and diagnostic. It responds to changes in employment

law, labour market conditions, trade union actions, government codes of practice and
other environmental influences.

HRM is prescriptive and concerned with strategies, initiation of new activities and the
development of fresh ideas.

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Personnel management is primarily concerned with imposing compliance with company
rules and procedures among employees.

HRM determines general policies for employment relationships within the enterprise.
Thus, it needs to establish within the organization a culture that is conducive to employee
commitment and co-operation.

THE HRM MODEL

Environmental Influences
The environmental influences HRM practices. Example Government
regulations and labour unions.
These two forces have a major impact on HRM by constraining the
decision-making discretion of managers. Example payment of wages,
annual leave, sick leave, who can or cannot be employed.

Acquisition Human Resources

Human Resource Planning: (Manpower planning). It is here that
management ensures that it has the right number and kinds of people, at the
right places, at the right time and capable of effectively and efficiently
completing the work that is required for the organization to achieve its overall
objective. Human resource plans evolve out of the overall objectives and
strategies of the organization.
Recruitment. If human resource planning uncovers the need to hire
additional employees, we then have to discover potential applicants. This
requires recruitment.
Selection. Potential applicants must be screened to identify job applicants
who are likely to be successful if hired.
Socialisation. The acquisition function is completed when the selected
employees have been in the organization and have adapted to the culture of

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 the organization and their work environment. The organisations culture
conveys how things are done and what matters.

Development of Human Resources

Training and development. Competent employees will not forever remain
in that state. Many may face obsolescence in their skills over time.
Organisations needs change over time.
Career development. Employees have different needs and aspirations. To
fill the organisations future needs. Matching career needs of employees
with the requirements of the organization.

Motivation of Human Resources

Motivation. High performance depends on both ability and motivation.
Many employees with extraordinary competence do not perform
satisfactorily. Desire to have capable employees who are also highly
motivated
Performance appraisal. The PA process and its outcome will affect an
employees motivation. People expect their work to be objectively
evaluated.
Rewards and punishment. Will follow appraisal and hence influence
motivation.

Maintenance of Human Resources

To keep people who are performing at high levels.
Need to provide satisfactory benefits and services, safe and healthy
working conditions and ensure satisfactory union relations.

Research and Future

Refining HRM practices to changing conditions

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 Research allows the manager to keep abreast of the latest findings in HRM
and provides a framework by, which solutions can be found to unique HRM
problems.

FUNCTIONS OF THE HRM DEPARTMENT.

Human resource management is about dealing with matters relating to employees of an

organization. The HR manager normally acts in an advisory capacity. He works with
other managers regarding human resource matters.

Human resource functions tend to change as firms grow and become more complex. It is
a major function of an organization. Other functions include marketing, production,
finance and administration.

Main functions of the HRM department are as follows:

1) Human resource planning

a) Forecasting future manpower requirements of the organisation.
b) Reviewing current utilization of manpower.
c) Planning a career path for existing employees.

2) Recruitment and selection

a) Examining the vacancies that exist in the organization.
b) Looking into internal and external sources to fill up vacancies.
c) Applying the most suitable selection process to recruit the better
candidate.

3) Training and education

a) On-the-job training programmes.
b) Off-the-job training programmes.

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 c) Planning career paths for employees.

4) Salary and wage administration

a) Terms of employment.
b) Methods and standards of remuneration.
c) Working conditions and employees length of service.

5) Employment relations
a) Legal aspects of employment.
b) Collective bargaining and grievance handling.
c) Union management.

6) Health and safety

a) Examination of first aid facilities and safety equipment.
b) Engineering inspection and accident prevention.
c) Accident managementinvestigation, recording and awarding.

7) Human resource research

a) Statistical analysis of records of and reports on employees.
b) Updating employees handbooksystems, procedures and policies.
c) Personnel auditopinion survey.

The human resource research has become increasingly important today. This is due to
increase in labour problems such as excessive absenteeism and too many grievances. The
human resource function does not remain static. It changes as firms grow and become
more complex. Finally, every human resource management function needs effective
research. This is particularly strong today because of the rapid changes taking place in the
HRM field.

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OTHER HRM ROLES

In addition to the organizational functions, HRM has other roles. Roles refer to related,
additional, wider duties that have to be performed for better organizational effectiveness
and efficiency.

HRM concerns with managing employees.

In order to properly manage, HRM has to perform these roles:

Advisory Roles - Specific

A) Social Responsibility

It is to meet the demands and expectations of employees. It is to provide care, concern,

and benefits to the betterment of these employees.

Examples of social responsibilities towards employees are:

Fairness of employment
Care for individual needs
Career stability and advancement
Higher quality of working life

B) Employment

Level (Number), types, grades and timing of labour the organization wishes to employ.

Examples:

Skilled
Semi-skilled
Continue planned recruitment and selection

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C) Compensation

The structure and methods of rewards and benefits to be given to the employees.

Examples:

Basic Salary
Bonus
Overtime
Sales Commission
Meal Allowances
Traveling Allowances

D) Promotion

To advise on the attitude, procedure and methods for promotion of employees.

Examples:

To promote to fill a new vacancy must set basic salary and promotion. Set
experience, years of service, qualification, etc.

E) Training

To advise on the scope and method (s) of training and development of employees.

Examples:

Technical Skills
Conceptual Skills
Human Relations Skills
On the- job training
Off-the-job training

F) Industrial Relations

To advise on union formation and recognition, roles of shop steward and approach to deal
with employees grievances and redundancy.

Examples:

Show Cause letter

Suspension

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 Salary increment
Benefits increments
Agreement between an organization and the trade union.

The HR manager needs to analyse, decide and then persuade top managers to accept
and to implement such policies.

He/she needs to carry out researches to collect information on current labour laws,
behavioural science development and views of the unions and employees.

HRM manager also needs to provide advices on procedures, systems and

implementation of human resource management.

Service Roles

HR manager also provides personnel services to other line managers. Here, he is in

the capacity of a staff specialist. He acts as a central service staff.

Examples:

Employment
Recruitment
Redundancy

Functional Roles

This is in the position of a management function.

HR manager manages all major functions related to HR matters.

HR manager also interprets and communicates top management policies to other

functional managers.

He will also oversee the policy implementation.

Examples:

Oversees / help production manager to employ production workers

Ensuring that the employment is legally done.

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HUMAN RESOURCE MANAGEMENT AS A SHARED FUNCTION

The importance of understanding that HRM is a shared function cannot be

overestimated. In this way, it is different from many other occupations and functions such
as production and marketing. The concept of sharing suggests at least two parties must be
involved.

The reality of HRM is that it is shared between the specialists working in a HR

department and every manager in every department. The workers who are being
managed are not subordinates to the HR manager but work in different
departments of the firm.

The role of the HR manager is thus to advise the line managers on how best to utilize
those subordinates in order to achieve the departments objectives. To prevent
conflict between the HR department and line managers who may resent interference
by the former. Here, it is advisable to have clear agreement on who is responsible for
what.

For each of the various functions in the HR field, it should be clarified whether the
HR executives are expected to take charge or not. For this purpose, clearly written
procedure manuals can be very useful. On recruitment, for example, a guideline, which
lays out the steps to be taken when a manager believes a new employee, needs to be
recruited until that new employee reports for duty could be prepared.

In the manual can be kept samples of the forms necessary at each stage of
recruitment, sample newspaper advertisements (the organization may wish to have a
standard format) and a statement as to who is responsible for each step. Such
document serves a dual purpose. It can also be used to train new human resource
department staff.

Anthony Gerard

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