HR

• Human Resource Management (HRM)

  The process of acquiring, training, appraising and compensating employees such that they are motivated to achieve both the organisational and individual goals
• Responsibilities of HRM


  • Selection
  • Training
  • Mentoring
  • Rewarding the workforce
  • Job instruction
  • Performance management
  • Counselling
  • Disciplining the workforce
• Organisation


  • An arrangement of people in a systematic structure of jobs and authority, guided by processes, systems, policies, and procedures to accomplish some specific purpose over time
• Success criteria for organisations

  • Efficiency
  • Effectiveness
  • Adaptability
  • Congruence or fit
  • Responsibility or sustainability
• Doing the right thing

  Your people are doing the right job, having one purpose
• Doing the thing right

  No mistakes
• Adaptability


  Being flexible and knowing what is changing in the business environment
• Congruence or fit


  An organisation fitting in its environment, giving the right service or product
• Responsibility or sustainability


  Providing what is needed, making sure the business is sustainable, making sure it will be around for the long-run
• Increased competition in a service and knowledge based economy compels organisations to develop a unique competitive advantage that resides in its people
• HR is responsible for


  • Ensuring the people are effective and efficient
• The Service Profit Chain

  1. Organisational success

  2. Internal work environment

  3. Employee satisfaction

  4. Service quality

  5. Customer loyalty

  6. Employee Loyalty & Productivity

  7. Customer satisfaction

  8. Service encounter between employee & customer
• Intellectual capital


  The ability of employees to apply and transform their knowledge and understanding into something of value to their jobs and the organisation, creating wealth for the organisation that is not explained by the book value of its physical assets
• Elements of intellectual capital

  • Human capital
  • Relational capital
  • Structural capital
• Human capital


  An individual-level construct consisting of employee capability, satisfaction and sustainability
• Relational capital


  The capabilities that arise in an organisation through the network of relationships between employees, customers and the community
• Structural capital


  Formal organisational arrangements that an organisation adopts to facilitate human and relational capital, including the culture that is created, organisation processes and information systems, and the management of intellectual property
• HRM


  The productive use of people in achieving the organisation's strategic objectives and the satisfaction of individual employee needs
• Employees are an organisation's greatest assets and all other resources get connected through people
• To make employees deliver, they need to be

  • Properly selected
  • Properly trained
  • Properly motivated
• HRM


  The system of philosophies, policies, programmes, practices, and decisions that affect the attitudes, behaviour, and performance of the people of an organisation so that people are satisfied, perform, and contribute to the organisation, achieving its strategic objectives
• HR architecture as a strategic asset

  • Consists of the HR function, the HR system and the employee behaviours
• Inputs to the HR architecture

  • Organisation strategy
  • Organisation structural arrangements
  • Systems and processes
  • Organisation culture & climate
  • Managers
  • Employees
  • Information
  • Finance
  • Other resources
• Outputs of the HR architecture

  • Individual-level: Performance, Commitment, Creativity, Satisfaction
  • Group-level: Synergy, Co-operation, Good relations
  • Organisation-level: Staff retention, Low absenteeism, Cost effectiveness, Legal compliance, Sustainability
• Components of the HRM System

  • HRM Strategy & Planning
  • Staffing
  • Performance Management
  • Compensation & Rewards
  • Individual & Collective Labour Relations
  • Learning & Development
  • Monitoring & Control
• The HRM department in a large organisation is typically structured with a Chief Executive Officer, Finance, Marketing, Production, and the HR functions of Staffing, Human Resource Development, Labour Relations, and Compensation & Benefits
• Multiple roles of the HR function

  • People constitute social capital rather than variable costs
  • People are capable of growth
  • People are capable of productive work
  • Manage with the goal of balancing the needs of people and the organisation
  • People who participate in defining problems and their solutions will become committed to the new results
  • Open two-way communication builds trust and commitment
  • Power equalisation is a key factor in encouraging openness and collaboration among stakeholders
  • Employees will be motivated, and the organisation more effective, if they work towards organisational goals that they accept as legitimate
• Macroeconomics

  The study of the economy as a whole, including topics such as economic growth, inflation, unemployment, and the role of government policies
• Production


  The process of creating goods and services
• Income


  Money received, especially on a regular basis, for work or through investments
• Spending


  The act of using money to pay for goods or services
• Production creates income


  Income is then spent to purchase goods and services
• Circular flow of income and spending


  • Households, firms, goods market and factor market
  • Circular flow of goods and services
  • Circular flow of income and spending
  • Introducing the government sector
  • Introducing the financial sector
  • The overall picture
• Factors of production


  Natural resources, Labour, Capital, Entrepreneurship
• Household


  All the people who live together and make joint economic decisions
• Firm


  The unit that employs factors of production to produce goods and services that are sold in the goods market
• Goods market


  The market in which goods and services are bought and sold
• Factor market


  The market in which factors of production are bought and sold, including the labour and capital market
• Circular flow of goods and services

  Households sell factors of production to firms in factor market. Firms transform these into goods and services which are then sold to households in the goods market.
• Circular flow of income and spending

  Firms purchase factors of production in factor market. Their spending represents income of households. Households then spend this income in the goods market to purchase goods and services. Their spending represents income of firms.