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Chapter 1

HRM200 Chapter 1: HRM 200 - Chp1

Human Resources Management
Course Code
Will Peckham

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HRM 200 – Chapter 1:
Human Resources management: the management of people in organizations
· The role of HRM is to ensure that organizations attract, retain, and engage the diverse
talent required to meet operational and performance commitments made to customers and
· They have the primary responsibility for managing the workforce that drives organizational
performance and achieves the organization’s strategic goals
· They formulate and implement HRM systems like recruitment, performance appraisal, and
· It is crucial that the HR strategy be aligned with the company’s strategic plan
· Human capital: the knowledge, education, training, skills, and expertise of an
organization’s workforce
· The resource-based view of the firm suggests that human resource practices contribute
to the development of embedded knowledge of a firm’s culture, history, processes, and
context, which are non-imitable
These 3 HR practices
o Profit sharing
o Results-oriented performance appraisal
o Employment security
· Have strong relationships with important accounting measures of performance (return on
assets and return on equity)
· High performance HR practices (comprehensive employee recruitment and selection
procedures, incentive compensation and performance management systems, and employee
training) have a positive relationship with turnover, productivity, and corporate financial
performance (gross rate of return on capital)
Why is HRM important to all managers?
· Because no manager wants to hire the wrong person for the job, experience high turnover,
or waste time with useless interviews
· About 1/3 of the top HR managers in Fortune 100 companies moved to HR from other
functional areas.

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· HR exists in big and small businesses
HRM practice have been shaped by society’s prevailing beliefs and attitudes about workers and
their rights, which have evolved in 3 stages.
Scientific Management: Concern for Production
· Frederick Taylor was the driving force behind Scientific Management
o The process of scientifically analysing manufacturing processes, reducing
production costs, and compensating employees based on their performance
· In the late 1800s and early 1900s, management practices emphasized task simplification
and performance-based pay.
o Such incentives were expected to lead to higher wages for workers,
increased profits for the organization and workplace harmony.
· Mary Parker Follett, a writer ahead of her time,
o Advocated the use of self-management, cross functional cooperation,
empowerment, and managers as leaders, not dictators.
Human Resources Movement: Concern for People and Productivity
· HRM is currently based on the theoretical assumptions of the Human Resources
· Arriving at the joint focus on people and productivity involved 4 evolutionary phases.
Phase 1
· In the early 1900s HRM/ Personnel administration (which was called back then), played a
very minor to non-existent role.
· In this era, Personnel administration assumed responsibility for hiring and firing (a duty
formerly looked after by first time supervisors), ran the payroll department, and administered
· Job consisted largely of ensuring that procedures were followed.
Phase 2
· And HR movement gained momentum, operational efficiency increased but wage
increases did not keep up, causing workers to distrust management.
· Personnel departments became the ones who were the primary contact for union
· Legal compliance was subsequently added to the responsibilities of personnel managers.
· Orientation, performance appraisal, and employee relations responsibilities were added to
their job

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Phase 3
· The government legislation passed during the 1960s, 1970s and 1980s that affected
employees’ human rights, wages and benefits, working conditions, health and safety, and
established penalties for failure to meet them.
· The role of personnel departments expanded dramatically
· Outsourcing: the practice of contracting with outside vendors to handle specified business
functions on a permanent basis
Phase 4
The current phase, where the role of HR has evolved to that of helping their organization
achieve its strategic objectives
Mostly every department and line manager has responsibilities related to employees as
they move through the stages of the Human-capital life cycle:
Selection and assimilation into the organization
Development of capabilities while working in the organization
Transition out of the organization
Authority: the right to make decisions, to direct the work of others, and to give orders.
Managers usually distinguish between line authority and staff authority
Line authority traditionally gives managers the right to issue orders to other managers or
Line authority: the authority exerted by an HR manager by directing the activities
of the people in his or her own business unit, department, or service area.
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