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Chapter 1

Introduction to HRM

Maksuda Hossain,FBA,EU

Topic covered

Uniqueness of HRM
HRM vs. personnel management
Line vs. staff authority of HRM
External influencing affecting HRM
Problems of HRM in BD
Means to solve problems of HRM in
Maksuda Hossain,FBA,EU

Related terms
Human resources: Human resources is
the set of individuals who make up the
workforce of an organization, business
sector or an economy.
Human capital: Human capital typically
refers to a more narrow view; i.e., the
knowledge the individuals embody and
can contribute to an organization.

Maksuda Hossain,FBA,EU

Definition of HRM
Human Resource Management is the set of
organizational activities directed at attracting,
developing and maintaining an effective work force.
---- Ricky W. Griffin

The policies and practices one needs to carry out the

people or human resource aspects of a management
position, including recruiting, screening, training,
rewarding and appraising. ---- Gray Dessler

The overall purpose of HRM is to ensure that the organization is

able to achieve success through people.

Maksuda Hossain,FBA,EU

Uniqueness of Human

Only HRs appreciates over a periods, but other physical

resources depreciate. Though the price of a physical resource
reduces after a period of time the value of human resource
increases because the more time spends the more experience a
human resource can achieve.
HRs alone can produce output larger than input. The more
input (knowledge, skill) is injected to an employee he can return
more than the input. Because he has the ability to add more
knowledge, experience with the previous one.
HRs provide utility value to each one of physical resources.
Because no physical resource can work without the help of human
Flexibility of an organization depends more on people than
on any technical factors. Because we can purchase a new
machine for more flexible work but it is people without whom the
result of flexibility cannot be get.
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Basic Functions of HRM





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Basic functions of HRM

Acquisition: to acquire committed and efficient people HR manager

first of make HR planning. Based on the planning employees are
recruited. And at last from the recruited employees selection is
Development: selection of good employees do not ensure that
highest performance. To get better results from the employees
organization needs to deliver training and development activities to
the employees so that they can work efficiently and utilize skills and
efficiency to a large extent.
Motivation: after making human resources skilled and efficient,
organization wants to retain them for a ling time. By applying
motivational means this purpose can be fulfilled. Salary, benefit etc.
are various motivational means.
Maintenance: the last basic function of HRM is to maintain the
people in the organization so that they can devote themselves whole
heartedly keeping good relationship with management. Maintenance
includes maintaining safety and healthy workplace, good
communications between
managers and employees,
and employee
Maksuda Hossain,FBA,EU

HRM vs. Personnel Management


Personnel Management

1. HRM is responsible for managing a

workforce as one primary resource that
contribute to the success of the

1. PM is more administrative (traditional

& routine) in nature and deals with pay
role, employment law and handling
related risks.

2. HRM treats employee as social/

psychological being which is used for the
benefit of an organization, its employees
and the society as a whole.

2. PM treats employees as a tool which is

expendable and replaceable.

3. HRM is Profit centered & considered as 3. PM is Cost centered & considered as a

an asset.
4. It is concerned with all manager &

4. It is concerned primarily with hourly,

operational & clerical employees and

5. Broad in scope.

5. Limited in scope .

6. Makes strategic decisions.

6. Makes operational decisions.

7. Coordinate all human resources

7. Does not coordinate all HR functions.
activities, like training, development,
staffing, equal employment opportunity
Maksuda Hossain,FBA,EU

Line vs. Staff authority of HRM

Authority: Authority is the right to make decisions, to direct the work of others, and to give orders
pertaining to the work; it refers to the rights inherent in a managerial position to give orders and
expect the orders to be obeyed. Authority is related to one's position and ignores personal
characteristics. When a position of authority is vacated, the authority remains with the position.

Line authority:
Empowered to direct work of the people assigned to them. Directly responsible for accomplishing
departmental goals & corporate objectives without consulting anyone. It is the employer-employee
authority relationship that extends from top to bottom.
Line Managers' Human Resource Management Responsibilities are: Placement, Orientation,
Training, Improving job performance, Gaining creative cooperation, Interpreting policies and
procedures, Controlling labor costs, Developing employee abilities, Creating and maintaining
departmental morale, Protecting employees' health and physical condition etc.

Staff authority:
advise & assist line managers in accomplishing basic goals. The suggestion given by the staff
advisor to the line managers may or may not be accepted by the latter.
As organizations get larger and more complex, line managers find that they do not have the time,
expertise, or resources to get their jobs done effectively. They create staff authority functions to
support, assist, advice, and generally reduce some of the informational burdens they have.
Some examples of the HR responsibilities of staff managers include assistance in hiring, training,
evaluating, rewarding, counseling, promoting, and firing of employees, and the administering of
various benefits programs.
HR managers are generally staff managers
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External influences affect


Going global
Embracing new technology
Managing change
Managing talent human capital
Containing costs

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In competitive business arena companies & managers
have to maintain a balance between global
organizations as well as managers
Training & development program for understanding foreign cultures
& practices
HR managers must adjust compensation plans of employees
working abroad to ensure that they receive fair & equitable pay
where living costs differ
Retaining the employees in the face of cultural shock

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Organizations are using technology/software

application in recruitment, selection, pretest of
This is called Human Resource Information System
It has following problems need to be addressed while
implementing computerized HRIS:
It can be expensive in terms of finance and manpower
It can be inconvenient and threatening to those who are not
comfortable with computers. It needs a large scale of computer

Following issues are to be considered in applying HRIS:

User friendliness

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2 types of change: proactive change & reactive change

Proactive changes are initiated by managers of fast growing
businesses to take advantages of targeted opportunities.
Reactive changes occur when external environment has already
affected the organization.
Managers need a good leader, training & development program,
communicating vision& removing obstacles to path of vision to
adjust the change.

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When employees leave a company they take
their capital (skill, experiences) with them
They need
Training & development
Opportunities to develop their job (work
freedom, challenging work)
Ensuring the employees that job duties &
requirements are flexible enough to allow growth
& learning

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Sometimes there is an increasing
pressure to lower costs & improve
productivity to maximize
There are some approaches to do

Off shoring
Employee leasing
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Planned elimination of jobs
To meet shareholders expectations
as well as to reduce direct costs
without compromising their quality
of production some jobs/positions
are need to remove

Hiring employees from outside the
organization for doing the tasks
that are not possible by the internal
Companies often hire advertising
firms toMaksuda
law firms

Off shoring/global sourcing:

Off shoring describes the relocation by a
company of a business process from one
country to another for tax or production
or labor purposes
Research identified that 40-60% on labor
costs can be saved by off shoring to the
countries India, Mexico, Russia, Brazil,

Employee leasing:
Temporary leasing
Permanent leasing
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Problems of HRM in

Lack of skilled HR manager: in many organizations in

Bangladesh there is a lack of skilled HR manager with educational
background of HRM. The reason behind it that many of the
managers think that employees with any educational background
can do HR activities though it is not true.
Absence of HR planning: to recruit and select employees
organizations must need a HR planning. But most of the
organizations avoid this because of high cost and availability of
Lack of career planning & program: most of the human
resources in developing country complete their studies without
proper career planning. Lack of employment opportunities make
them to do so. As they have no planning regarding their career it
force them to do tasks whatever they get whether it match their
educational background and personality or not.
Absence of proper evaluation: in the organization as well as in
labor market political influence and bureaucracy limit to evaluate
an employee fairly. Maksuda Hossain,FBA,EU

Problems of HRM in

Lack of motivation: in our country motivation means increased

salary, bonus, incentives, loan facilities etc. But most of time they
fail to motivate employees. Organizations should introduce a
working environment where employees can work with creativity,
environment without inner politics, appreciation letter etc. when
they do better as a tool for motivation.
Absence of good relationship between labor and
management: if we look at our garment sector we easily find
that a suitable relationship is absent between labors and
management. Though it is impossible to earn profit without labors
our management cannot do work with labors in harmony.
Negative political influence: in Bangladeshi HRM negative
political influence is a dangerous issue. To develop HR plan, to
select an employee, to give promotion all these branches of HRM
are influenced by politics negatively and it becomes impossible to
take free and fair decision by a manager.
Maksuda Hossain,FBA,EU


Way to Overcome the

problems of HRM in

Reduce political intervention on

private fields
Reduce political intervention &
bureaucracy in making decision
Implementation of law & regulatory
system properly.
Change mind regarding corruption

Maksuda Hossain,FBA,EU