HEEE BLUEPRINT-BASED SUMMARY NOTE ON THE COURSE HUMAN
RESOURCE MANAGEMENT (HRM)
MAJOR OBJECTIVE
❖ To remind the main concepts of HRM course to the prospective graduatees who will join
the HEEE in 2016 G.C.
CHAPTER TWO: HUMAN RESOURCEMANAGEMENT
2.1.1 The Internal Environment
2.1.2 The External Environment
ENVIRONMENT
2.1 The Environmental Factors Affecting HRM
2.1 The Environmental Factors Affecting HRM
managers are involved in managing people for the purpose of achieving organizational goals and
objectives, they must recognize the rapid and dynamic changes in their environment. The
environment which influences the human resource management activities in an organization is
shown in figure 2-1 (Mondy et al. 1999) below.)
EXTERNAL ENVIRONMENT
TECHNOLOGICAL
FORCES
INTERNAL
ENVIRONMENT
SOCIETAL ECONOMIC
FORCES COMPETITIVE
MISSION FORCES
STRUCTURE
CULTURE
POLITICAL-LEGAL
FORCES
Figure 2-1 The Environments of HRM (Modified)
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2.1.1 The External Environments
What then is external environment? It is force or factor that affects organizations' human
resources from outside of the organizational boundaries.
The external environment includes the macro (general environment) and the task environment.
i). The Macro-Environment
a) The Economic Environment
The general economic conditions include unemployment, inflation, income level, gross domestic
product, and related indicators of the economy.
Economic growth is the most significant variable for human resource management since it
determines the demand for and supply of labor. Unemployment affects human resource
availability and compensation system of employees.
Another challenge to human resources management is employee productivity. Increase or
decrease of outputs has a detrimental effect upon the organization's labor force. As a result, the
organization may recruit new staff or may design a lay-off system.
Inflation also concerns the management of human resources directly because it necessitates
periodic upward adjustments in employee compensation.
b) The Political - Legal Environment
The political - legal forces are the laws and governmental systems within which an organization
has to perform its mission. Governments through policies and their regulatory agencies affect
the operation of human resources functions.
c) The Technological Environment
The introduction of new technology interrupts the workforce unless they keep up with changing
technology. These make it necessary, on the part of the organization to train employees to help
them adapt to the rapidly advancing technology.
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d) The Socio-Cultural Environment
The socio-cultural forces are made up of the attitudes, values, ethics and demographic patterns of
the society in which the organization runs its business. These forces are important because they
determine the types of goods and services an organization should produce that can satisfy the
needs of society.
d) The Physical Environment
The physical environment has considerable influence on people management. Employee hiring,
transfer, compensation and motivation are to be guided by the climate, terrain and other natural
conditions,
ii) The Task Environment
. Important factors common to interact with organizations are:
● Suppliers – these are institutions that provide human resources.
● Competitors – an organization may face competition in the labor market.
● Regulators - government agencies established for the purpose of enforcing laws and
regulations affecting the human resource management.
● Consumers - people or organizations that use the organization’s goods and/or services.
2.1.2 The Internal Environment
The internal environment consists of those factors that affect the human resources from inside
the organization’s boundaries. These factors are under direct control of the organization, i.e.
♦ Mission
♦ Policy
♦ Organizational culture
♦ Leadership and management style, etc.
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CHAPTER THREE: JOB ANALYSIS AND HR PLAN
3.1 Concept of Job Analysis
= Job analysis is systematic recording of activities involved in a job. It
defines:
▪ Duties, responsibilities and accountabilities of a job, and
▪ Qualifications needed to perform the job
= Job analysis is a process of determining that tasks make up the job and
what skills, abilities, and responsibilities that are required of an employee to
perform the job.
Components of job analysis
a) Job description= a written statement of what the jobholder does.
-It describes job content, job environment, and conditions of
employment.
b) Job Specification:
-It states personal characteristics and qualifications needed to
perform the job.
c) Job Performance Standards:
- The statement of attainable as well as acceptable levels of job
achievement.
- Indicates quality and quantity of job performance.
⮚ Uses of job standards
=Motivation: They serve as targets for employee efforts.
= Evaluation: facilitate objective performance evaluation of
employees.
=Control: Actual performance is measured against standards.
(Either to reward or take corrective actions or other measures,
i.e. training
for deviations in performance)
⮚ Types of performance standards
▪ Quantity standards for the job.
▪ Quality standards for the job
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▪ Time taken for the job (Time study)
3.2 Human Resource Planning (HR)
Human resource planning is the process of deciding the size of manpower to satisfy the
organizational needs. It is the starting point of Human resource management.
Steps in Human Resource Planning
1. Assessing current human resources: It involves:
⮚ human resource inventory
⮚ skills currently available in the organization
⮚ HR information system (HRIS) serves as the database, etc.
2. Demand Forecasting= This step estimates future human resource needs in
terms of quality and quantity,
3. Revenue forecast
= is expressed in terms of number of people required and the skills needs
4. Supply forecasting
= estimates future sources of supply of human resources from inside and
outside the organization.
● Internal sources that increase supply can be promotion; transfer and employees
returning from study or leave.
Sources that decrease supply can be resignation, retirement, dismissal, prolonged
illness or death.
● External sources can be graduates from schools and colleges, people entering job
market, and other job seekers in the labor market.
5. Matching demand with supply
= matches demand and supply forecasts to determine future shortages or
surpluses of human resources in terms of quality and quantity.
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▪ Additional staff will be required to meet the shortages
Retrenchment will be needed for surplus staff. It can consist of early retirement, lay-offs,
leave of absence, work sharing, reduced working hours, etc.
61 . Action plans
= is concerned with the preparation of action plans to deal with shortages and
surpluses of human resources.
CHAPTER FOUR: RECRUITMENT AND SELECTION
5.1 The purpose recruitment is to attract sufficient and suitable candidates to apply for
vacancies in the organization.
⇒ Methods internal recruiting are:
▪ Job posting
▪ Employee referrals
▪ Human Resource Inventory (Skills inventory)
Both recruitment and selection functions can be affected by factors such as size of the
organization, turnover, organizational growth and image of the organization.
Methods for External Recruitment
The most common methods used are:
▪ Advertising
▪ Employment exchanges
▪ Educational institution placement
▪ Employee referrals
Steps of selection process: This includes;
Completion of a formal application form, interviewing testing, reference checks,
medical examination, and final analysis and management decisions to hire
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In general, making the right recruitment and selection decisions are key in ensuring the
present and future success of an organization. Recruiting and selecting the right people at
the right time is an essential management skill.
CHAPTER FIVE: TRAINING AND DEVELOPMEN
● Training is a process directed toward maintaining and improving employee's
current job performance, while development seeks to develop knowledge and or
skills of managers at various levels for future managerial activities.
● Once the need for change is recognized and the factors that influence intervention
are considered, the process of determining training and development needs begins.
Essentially, two questions must be asked: "What are our needs? And "What do we
want to accomplish through our training & development efforts?"
● Training and development methods include coaching, mentoring business games,
videotapes, in-basket training, internships, etc. These functions take place through
the two main approaches of training. i.e. on-the-job and off-the-job training.
● The major benefits of training and development include achievement of improved
job performance and productivity, improved product quality and service to
customers. There are also benefits to staff, The major ones are: increased job
satisfaction and value of staff in the labor market, and improved prospects of
promotion.
● Orientation is the guided adjustment of new employees to the organization the job,
and the work group. Orientation acquaints employees with the employment
situation, organizational policies and rules, compensation and benefits and
organizational culture.
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CHAPTER SIX: PERFORMANCE APRAISAL
The term “performance appraisal” refers to the regular review of an employee’s job
performance and overall contribution to a company.
It is also known as an annual review, employee appraisal, performance review or
evaluation, a performance appraisal evaluates an employee’s skills, achievements, and
growth, or lack thereof.
Companies use performance appraisals to give employees:
● big-picture,
● feedback on their work
● justify pay increases and bonuses,
● termination decisions. .
Performance appraisals enable superiors to know what their team members are up to, evaluate their
performances and also give them correct feedbacks so that they know where they are lacking and work on their
shortcomings.
The term “Performance Appraisal” generally causes anxiety among employees, which definitely should
not be the case. You really do not have to worry about your appraisal if you have worked hard throughout the
year.
CHAPTER SEVEN: COMPENSATION
● Compensations the HRM activity that deals with every type of reward that individual
receives for performing organizations tasks. Benefits, on the other hand, are all financial
rewards that generally are not paid directly to an employee.
- Compensation and benefit objectives
- To remain competitive in the labor market
- To motivate employees' job performance
- To attract new employees
● Internal compensation equity refers to payment of employees' according to the relative
values of their jobs within the organization, while external equity refers to payment of
employees' at rates comparable to those paid for similar jobs in other organization.
● Factors that affect job pricing and determinant of employee financial compensation
include Labor market conditions, Government policy, Organization's ability to pay, Cost
of living, and etc.
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● Pay de-satisfaction may lower the performance; causes strikes increase grievance and
lead to forms of physical or psychological withdrawal ranging from absenteeism and
turnover to increase visits to the dispensary and poor mental health.
CHAPTER EEIGHT: INTEGRATION AND MAINTENANCE
● In modern days, organizational success largely depends on the successful integration of
HRM and business strategy. It is a tough task to coordinate between the development and
control system. But the coordination gives a competitive advantage for the enterprise.
● The Integration Function of HRM= The integration function of HRM is the
process of reconciling organizational goals. It combines all the activities related to
managing employees within a company. i.e. hiring, performance appraisal, training and
development, etc.
● The HR department is the center point of any organization. It ties all the departments on
one common platform. The core responsibility of the professionals from the HR
department is to ensure smooth communication in the organization.
● An HR manager performs various functions to ensure the best working atmosphere.
Typically HR management functions can be classified into the following three categories:
1. Managerial Functions
2. Operative Functions
3. Strategic & Advisory Function
● HR maintenance includes certain actions that focus on adjustment and filling gaps such
as ;
⮚ Training
⮚ Compensation
⮚ Maintenance
⮚ Labor Relations (the interaction of the HR department with the employees
who represent a trade union body. Employees come together and form a union.
So, they can make their points in decisions like wage, benefits, work conditions,
etc.
CHAPTER NINE: PROMOTION, TRANSFER, AND SEPARATION
9.1 Promotions: means an improvement in pay, prestige, position and
responsibilities of an employee within his or her organization.
Types of promotion
● Promotion by seniority
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● Promotion by Merit
9.2 Transfer: involves a change in the job (accompanied by a change in
the
place of the job) of an employee without a change in the
responsibilities or
remuneration.
● Demotion: The permanent movement of a staff member from one
position to lower position and decreased salary.
● Job rotation = to maintain the limitations of an employee
Separations: includes retirement, lay-offs, resignations and dismiss
9.1. Types of transfer
9.2 Types of separation
9.3. Reason for transfer
Review Questions
1. Discuss the difference between, training and development.
2. What is the primary purpose of:
3. a) training
b) development
4. How do organizations identify their training needs?
5. Mention the major benefits training for:
a) An employee
b) An organization
c) A customer
d) The society
6. Mention the main disadvantages of off-the-job training.
6. Why do organizations conduct performance appraisal?
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7. Describe the major types of environments that directly or
indirectly affect the HRM performance.
8. Mention the major objectives of employee compensation.
9. What does it mean when we say ‘integration and maintenance’ in
HRM?
10. Discuss why organizations are considered as ‘open systems’?
11. What mechanism does a manager use in the situation where the
number of employees becomes excess due to certain reason(s).
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9.3
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