LEARNING OUTCOMES ▪ Explain the background of human resource management. ▪ Explain the functions of human resource management. ▪ Elaborate environmental factors affecting human resource management activities.
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INTRODUCTION The management of human resource in Malaysia has changed tremendously from the formation of Malaysia to the present. Role of the personnel manager changed from merely hiring, firing and payroll, to become the human resource manager with wide spectrum of duties and responsibilities.
Early years of 20th century, the title of ‘Welfare Manager’ is used to describe the management of the people. Managers were recruited to look into the ‘welfare’ of the workers.
However, by 1950s, the title and responsibilities of such managers had become ‘Personnel Managers’ with a wide spectrum of responsibilities beyond merely looking after workers’ physical wellbeing.
Personnel management also required specialist and professional managers who were able to perform a range of useful staff functions, especially recruitment and training.
In the 1980s, the title given to practitioners in this field changed again to ‘Human Resource Manager’, which now been universally adopted by organizations. The changing title is a reflection of the increased importance given to the human resource management function.
In the 21st century, some companies are even taking another step further by renaming the human resource management function as Human Capital Management and give the title of ‘Human Capital Managers’ to the managers.
This new titles reflect the belief that, employees, like other forms of capital, can appreciate in value if properly managed.
Explain the background of human resource management LEARNING OUTCOMES
Define human resource management.
A strategic management approach that involves the most important element in the organization, the individuals who work and contribute ideas, expertise and energy towards achieving organizational goals and their ability to compete.
R. Wayne Mondy Human resource management refers to the utilization of individuals to achieve organizational objectives.
Maimunah Aminuddin Human resource management is the development and implementation of systems in an organization designed to attract, develop and retain a high-performing workforce.
Dessler Human resource management as a practices and policies needed to manage an individual in pursuing his/her duties.
Ivancevich Human resource management is defined as the functions performed within the organization to help facilitate the effective use of human resources to achieve organizational and individual goals.
Identify the objectives of Human Resource management.
Discuss the factors that determine the establishment of human resource department in organization.
Do I need to establish a human resources department in my organization/company? What factors should I review to determine the establishment of human resources department? • Organization must consider these questions in determining the establishment/formation of HR department. • Employees are the most important asset and must be managed properly in a unit/department like other department: marketing, finance, account, etc. • Human resource department helps organization manage these valuable resource consistently to achieve organizational objectives. • But do all organizations need a human resources department? What determine the establishment/formation of human resource department?
These are the factors that must be considered in establishing/forming human resource department. Discuss all these factors. Not every organization has a specialized HR department. Several factors determine whether a company will have such department or not.
Size of the organization The large organization in terms of number of the employees need to have a separate HR department to comprehensively carry out the HRM function, compared to the small company. A very small companies cannot employ staff who do not bring in an income to the firm. A company without HR department, however, does not mean that the HRM function is not being carried out. As long as people are employed, the HRM function will exist. But who is responsible to carry out HRM in such organization? The answer is, every head of department or line manager is in charge of ensuring that he has the workers he needs. In this case, HRM becomes a part of the manager’s normal duties along with his other tasks which may include making or selling product or service, managing financing or account.
Medium-sized company may establish or form an administration department which provide a support service to line departments including assistance such as correspondence handling, liaison with government departments, legal matters, office administration and HRM function. Once the company grows beyond a certain size, the technical requirements of recruitment, training and record keeping of employee data become too heavy for administration department to handle. Hence, the separate and specialist HR department is established.
Responsibility of HRM Function in Organization Size of the company Responsibility of HRM function Small company Heads of Department/All managers Medium-sized company Administration Department Large-sized company Human Resource Department Very large company HR Department, Training Department, Industrial Relations Department
Unionization of workforce While the number of employees is a key criterion in deciding whether to have a HR department or not, over-riding factor may be the status of the employees. If the company has many employees, it is not impossible if the employees will establish or form a trade union. If the employees belong to a trade union, the company would be wise to employ specialist in the field of industrial relations and HRM staff who are knowledgeable about labour laws. In unionized environment, management needs specialized knowledge in the area of human resource management.
Philosophy of top management Whether or not a company need to have a HR department will depend on the philosophy of top management concerning the importance of HRM. If the top management truly believes that the organization’s successes and profits are dependent on the cooperation and workers’ effort, they are more likely to perceive need for a HR department. There are managers who will happily agree with the above, but not willing to spend any money on establishing of HR department!
Ownership of the company Whether or not a company need to have a HR department also depend to the ownership of the company. Multinational companies and joint ventures with foreign partners can be expected to need a HR department. HR department provide input and knowledge in the areas of industrial relations and labor laws, unlike other departments such as marketing, production or finance, need local expertise.
Explain the functions of human resource management LEARNING OUTCOMES
What human resource department DO? Elaborate the functions of HRM.
KEFI CAKE SDN. BHD MARKETING DEPARTMENT FINANCE DEPARTMENT ACCOUNT DEPARTMENT HUMAN RESOURCE DEPARTMENT • Job analysis • Human resource planning • Recruitment & selection • Training & development • Performance appraisal • Compensation management • Industrial relation • Etc.
Human resource management function Job analysis Human resource planning Recruitment & selection Training & development Performance appraisal Compensation management Industrial relations
HUMAN RESOURCE PLANNING Strategic HR planning is an important component of strategic HR management. It links HR management directly to the strategic plan of your organization. Ensure adequate human resources to meet the strategic goals and operational plans of your organization - the right people with the right skills at the right time.
RECRUITMENT Recruitment is a process to obtain a pool of potential candidates with the desired knowledge, skills and experience to allow an organisation to select the most appropriate people to fill job vacancies against defined position descriptions and specifications.
SELECTION Once a pool of candidates has been identified through the recruitment process the most appropriate candidate, or candidates are identified through a selection process including but not limited to interviewing, reference checking and testing.
TRAINING AND DEVELOPMENT • An educational process which involves the sharpening of skills, concepts, changing of attitude and gaining more knowledge to enhance the performance of employees. • Other names including "Human Resource Development", "Human Capital Development" and "Learning and Development".
PERFORMANCE APPRAISAL The performance appraisal is the process of assessing employee performance by way of comparing present performance with already established standards which have been already communicated to employees, subsequently providing feedback to employees about their performance level for the purpose of improving their performance as needed by the organisation.
COMPENSATION MANAGEMENT Compensation Management is an organized practice that involves balancing the workemployee relation by providing monetary and nonmonetary benefits to employees.
INDUSTRIAL RELATIONS Industrial relations are the relationships between employees and employers within the organizational settings. Industrial relations are basically the interactions between employers, employees and the government, and the institutions and associations through which such interactions are mediated.
LEARNING OUTCOMES Interpret environmental factors affecting/influencing human resource management activities.
Environment in Human Resource Management Environment comprises all those forces which have their bearing/affect/influence on the functioning of various activities including human resource management (HRM) functions and activities. Environment scanning helps HR manager become proactive to the environment which is characterised by change and intense competition. Human resource management is performed in two types of environments - internal and external.
The factors influencing HRM activities aren't static: To maximize recruitment and retention, and to minimize employee issues, small business managers must continually monitor internal and external environmental factors and adjust HRM strategy accordingly. To do that, it's important to know what the internal and external factors can consist of.
Internal environment factors • An organization's internal environment is composed of the elements within the organization • These are the forces internal to an organisational and controllable factor. • Directly influence on HRM functions and activities.
KEFI CAKE SB MARKETING DEPARTMENT ACCOUNT DEPARTMENT FINANCE DEPARTMENT HUMAN RESOURCE DEPARTMENT Other units/department Organizational mission Corporate culture Employees Top management style Organizational policies Informal groups Internal environmental factors
External environment factors • External factors are all those factors which lie outside an organization and affect its working, including human resource management. • External factors directly or indirectly influence HRM functions and activities. • Oftentimes, these external factors are outside of the control of organization.
KEFI CAKE SB MARKETING DEPARTMENT ACCOUNT DEPARTMENT FINANCE DEPARTMENT HUMAN RESOURCE DEPARTMENT Legislation/law/ Labor market government Economy Customers Society Shareholders Technology Trade Union External environmental factors
Internal & external environmental factors that affect/influence HRM functions/activities Internal factors HRM functions/ activities External factors Corporate culture Human resource planning Recruitment & selection Training & development Performance appraisal Compensation management Industrial relations Labor market composition Organizational policies Legislation/ law/ government Organizational vision/mission Economy fluctuation Employees Technology advancement Other units/department Customers Top management style Society Shareholders Informal group Unexpected event Etc. Etc.
Each company choose 1 internal and 1 external environment factor. Interpret the factors. Example: ➢ Corporate culture is ……………….. ➢ Economy fluctuation is …………….. Discuss how those factors affect your HRM functions or activities: ➢ How corporate culture factor affect/influence recruitment and selection function? ➢ How economy factor affect/influence training and development activities?
TUTORIAL Answering the final exam questions from previous semesters. Discuss the answers with your group. Present the answer to the class.