HUMAN RESOURCE

MANAGEMENT
CHAPTER ONE
WHY IS HUMAN RESOURCE IMPORTANT?
• Affects the quality of goods and service produced
• Is the driving force in organizational life cycle
• is responsible for managing other resources of an organization
• Prerequisite for organizational learning
• Employees are scarce resources that should be acquired effectively,
utilized, developed and retained.
• Provides an organization with competitive advantage
 DEFINITION OF HUMAN RESOURCE
MANAGEMENT
• Human resource management refers to
The management of an organization’s most valued assets – the people
working there who individually and collectively contribute to the
achievement of its objectives.
It is the process of achieving organizational goal by attracting,
developing, and retaining and properly using talented human
resource.
A strategic, integrated and coherent approach to the employment,
development and well-being of the people working in organizations.
Is about having the best human resources who are best utilized to produce
cheaper and better quality goods and services
The process of managing human talent to achieve an organization’s
objectives
 DEFINITIONS AND MEANINGS OF HUMAN
RESOURCE MANAGEMENT

HRM is the process of planning, organizing, directing and controlling of the

acquisition, development, compensation, integration, maintenance,
emerging issues and separation of workforces to the end that individual,
organizational and societal objectives are accomplished.

Copyright AAUSC 2011 4

 OBJECTIVES OF HRM

 It is concerned with the creation of

conditions in which each employee is
encouraged to make his best possible
contribution to the effective working of
the undertaking.
PERSONAL
 It is also concerned with the
development of the sense of mutual
respect and trust between management
and workers through sound relations.
 It endeavors to increase the productive
efficiency to the workers through
training, guidance and counseling and
 OBJECTIVES OF HRM

• To recognize the role of HRM

in bringing about
organizational effectiveness.
• HRM is not an end itself. It is
ORGANIZATIONAL only a means to assist the
organization with its primary
objectives.
• Simply stated, the
department exists to serve
the rest of the organization.
 OBJECTIVES OF HRM

• To be ethically and socially responsible to the needs

and challenges of the society while minimizing the
negative impact of such demands upon the
organization.
• For example, the society may limit HR decisions
SOCIETAL through laws that enforce reservation in hiring and
laws that address discrimination, safety or other
such areas of social concern.
 Major HRM functions
• Procurement functions (Job analysis, HRP, recruitment & selection, placement & orientation)
– focus on availing the right type and number of employees required for
achieving organizational goals.
• Development functions (career development, training, PE)
– Focus on enhancing knowledge , skill and values of employees to perform their
current and future responsibilities competently.
• Integration functions (Employee discipline and compensation)
– Focuses on reconciling organizational goals with individual goals.
• Maintenance functions (safety, health, conducive environment, smooth
relationship)
– Focuses on maintaining physical and mental health of employees.

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 PROCUREMENT FUNCTIONS

• Job analysis- is the process of obtaining information about jobs by

determining their duties, tasks, or activities, skills and qualifications
needed to perform it successfully
• Human resource planning- is the process by which an organisation
attempts to ensure that it has the right number of qualified people in
the right jobs at the right time.

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 …PROCUREMENT FUNCTIONS
• Employee recruitment and selection
– Recruitment - is the process of seeking and attracting a pool of applicants
from which qualified candidates for job vacancies within an organisation
can be selected.
– Employee selection- involves choosing from the available candidates the
individual predicted to be most likely to perform successfully in the job.
– Placement- on the other hand, is the assignment of an employee to a new or
different job.
– Orientation- is the formal process of familiarizing new employees with the
organization, their jobs, their work units and employees.

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 DEVELOPMENT FUNCTIONS
• Career development – provides employees with an
ongoing mechanism to enhance their skills and knowledge
that can lead to mastery of their current jobs, promotions
and transfers to new or different positions
• Training and development- activities help employees learn
how to perform their jobs, improve their performance and
prepare themselves for more senior positions.
• Performance appraisal- is concerned with determining
how well employees are doing their jobs, communicating
that information to the employees and establishing a plan for
performance improvement.
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 INTEGRATION FUNCTIONS

• Employee disciplining

• Compensation refers to all types of rewards that employees receive in

return for their services.

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 MAINTENANCE FUNCTIONS

Safety- involves protecting employees from injuries caused by

work-related accidents.
Health- devising schemes that enhance employees' physical and
mental well being.
Creating conducive working environment
Promoting smooth working relationship between management
and employees

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 HRM PROCESS

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EVOLUTION OF HUMAN RESOURCE MANAGEMENT
EVOLUTION OF HUMAN RESOURCE
MANAGEMENT
 PERSONNEL MANAGEMENT VERSUS HUMAN
RESOURCE MANAGEMENT

PERSONNEL MANAGEMENT HUMAN RESOURCE

MANAGEMENT
 Employees are treated as economic being  Treated as an economic, social and
and services are exchanged for salary and psychological being.
wages.
 Employees are treated as a profit
 Employees are treated as a cost center.
center
 Employees are mostly used for
 Employees are mostly used for
organizational benefits..
 Actions are based on procedures. multiple benefits..
 It is treated as a secondary function  Actions are based on business
 Decision is slow. needs.
 Communication is indirect.  It is treated as a strategic function
 Behavior is based on norms, policies,  Speedy decision.
customs and practices.  Communication is direct.
 Pay is based on job evaluation.
 Behavior is based on values and
mission.
 Pay is based on performance
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evaluation.
Copyright AAUSC 2011
 HRM ENVIRONMENT

• Environment is the totality of factors that influence an organization and its sub
systems such as HRM.
• External Environment -forces external to a firm that affect the firm’s
performance but are beyond the control of management.
• In order to adopt to the external environment constant monitoring of the
external environment for opportunities and threats is important.
• Internal Environment- are concerns or problems internal to the organization.
 HRM ENVIRONMENT
• External environment: composed of General and Task environment.
1. General environment
 Economic environment: unemployment, demand and supply, inflation,
labour markets…
 Technological environment: reduced number of jobs, training needs…
 Socio-cultural environment: Views, customs, values and demography
of the society
 Political-Legal environment: Governmental laws and regulations
 Physical environment: climate, location…
2. Task environment
Individuals, groups and organizations that directly affect an organization
but not as part of it. Example, customers, suppliers, policy makers, owners,
competitors…
 HRM ENVIRONMENT
Internal Environment: an environment that exists
within an organization.
 Mission: organizational reason for existence
 Policy: guideline to provide direction in decision
making.
 Organizational culture: a system of shared values,
beliefs and habits of an organization
 Organizational structure
THE ENVIRONMENTAL FACTORS AFFECTING
HRM

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THE LEGAL ASPECTS OF HRM
 EQUAL EMPLOYMENT OPPORTUNITY (EEO)

• Is the condition in which all individuals have an

equal chance for employment, regardless of
their race, color, religion, sex, age, disability, or
national origin. (without discrimination)

• The treatment of individuals in all aspects of

employment should be fair and nonbiased
manner.
 D I S PA R AT E T R E AT M E N T

• One sign of discrimination is disparate treatment —

differing treatment of individuals, where the
differences are based on the individuals’ race, color,
religion, sex, national origin, age, or disability status.
(different standards to judge individuals and same
standard not related to the job)
• Example:-
• hiring or promoting one person over an equally
qualified person because of the individual’s race.
• Failing to hire women with school-age children but
hiring men with school-age children.
 TO AVOID DISPARATE TREATMENT

 Standardized evaluating interview

questions and
 Job related decision criteria
 B O N A F I D E O C C U PAT I O N A L Q UA L I F I C AT I O N ( B F O Q )

• A quality or an attribute that employers are allowed to

consider when making hiring decisions of employees,
when considered in other contexts would constitute
discrimination and violation of employment law.
(except race)
Example:
Age limits for bus drivers and airline pilots
Religion of staffs of religious school
 AFFIRMATIVE ACTION

• A strategy intended to achieve fair employment by

urging employers to hire certain groups of people who
were discriminated against in the past.
• An organization’s active effort to find opportunities to
hire or promote people in a particular group.
• taking extra effort to attract and retain minority
employees.
• Affirmative action measures are temporary
interventions
 A F F I R M AT I V E A C T I O N A N D E T H I O P I A N L AW

• Article 35
• The historical legacy of inequality and discrimination suffered
by women in Ethiopia taken into account, women, in order to
remedy this legacy, are entitled to affirmative measures. The
purpose of such measures shall be to provide special attention
to women so as to enable them to compete and participate on
the basis of equality with men in political, social and economic
life as well as in public and private institutions.
 A F F I R M AT I V E A C T I O N A N D E T H I O P I A N L AW

• Proclamation 1156/2019
In recruitment, promotion and deployment preference
shall be given to:
– female candidates
– candidates with disabilities; and
– members of nationalities comparatively less represented
in the government office, having equal or close scores
to that other candidates.
 REVERSED DISCRIMINATION

• Increasing the proportion of minority or female

candidates hired or promoted, it necessarily reduces
the proportion of majority or male candidates hired or
promoted.
• The act of giving preference to members of protected
classes to the extent that unprotected individuals
believe they are suffering discrimination
 HARASSMENT IN THE WORKPLACE

• Sexual Harassment

• Unwelcome advances, requests for sexual favors, and other

verbal or physical conduct of a sexual nature in the working
environment

• Sexual harassment includes any type of behavior, comments,

gestures, and actions of a sexual nature that create a hostile
work environment for an employee.
 HOW TO DEAL WITH HARASSMENT
• Have clear well communicated harassment prohibiting policy
– Definition of sexual harassment (physical conduct, verbal conduct & non-verbal
conduct)
– Refreshment training programs
– Disciplinary measures (from warning to dismissal)
• In place effective complaint procedure
• Guard against retaliation
• Quickly investigate all claims
• Take remedial action to correct past harassment
• Follow up to prevent continuation of harassment
 CHAPTER THREE

Human Resource Management Tools

Reading Assignment

Copyright AAUSC 2011 42

CHAPTER FOUR

Human Resource Planning (HRP)

 DEFINITION AND MEANING OF HRP

Human resource planning is the process of systematically reviewing

human resource requirements to ensure that the required number of
employees, with the required skills (type), are available when they are needed.
 USES OF HRP

The following are the major uses of human resource planning.

 To find out how much manpower is required.

 To make the list of current manpower.

 To check how much current manpower is being utilized.

 To make manpower procurement plans.

 To make the training programs.

 STEPS IN THE HUMAN RESOURCE PLANNING
PROCESS.

The following are the major steps involved in human resource planning process.
 Consider organizational goals and plans.

 Forecast future human resource needs.

 Supply forecast/ inventory of existing employees.

 Determine the net HR requirement/ reconciliation.

 Develop and implement action plan, and

 Follow up the plan.

 STEP 1: CONSIDER ORGANIZATIONAL
GOALS AND PLANS
Corporate objectives and future plans can be:
 To increase company profits by 10% in the next fiscal year
(profitability)
 To close 25 retail outlets in the next four years (downsizing)

 To bottle 10% more diet pop in the next year (expansion of

production)
 To guarantee one-day delivery of all first-class mail within the
province by 2001 (service level)
 STEP 2: FORECAST FUTURE HUMAN RESOURCE
NEEDS
Demand forecasting is a process of determining future needs for HR in terms of quantity
and quality. It is done to meet the future personnel requirements of the organization to
achieve the desired level of output.
Techniques:
• Qualitative
Delphi method
Expertise opinion method
• Quantitative
Zero base forecasting
Bottom-up approach
Work standard data
key predictive factors
 STEP 3: SUPPLY FORECAST/INVENTORY OF
EXISTING EMPLOYEES

It is important for human resource planners to undertake human resource

inventory and anticipate and pinpoint changes in personnel supply.

 Sources of inflows: promotion and transfer

 Sources of outflow: resignation, discharges, demotion, retirement,
promotion and transfer.
 STEP 4: DETERMINE THE NET HR
REQUIREMENT/RECONCILATION

Overall HR Net HR
requiremen Inventory of requiremen
ts existing HR ts =(Zero,
(Demand (Supply forecast) Positive or
forecast) Negative)
 STEP 5: DEVELOP AND IMPLEMENT
ACTION PLAN

Planning for Anticipated Labour Surpluses

 Lay off some workers permanently
 Give incentives for early retirement
 Retrain and transfer workers
 Lay off workers temporarily
 Reduce the work week
 Use work sharing
 Cut or freeze pay and/or benefits

4.15
 STEP 5: DEVELOP AND IMPLEMENT ACTION PLAN

Planning for Anticipated Shortages

 Transfer employees to jobs in which shortages exist
 Train employees to move up to jobs in which shortages exist
 Have employees work overtime
 Increase employee productivity
 Hire part-time employees
 Hire temporary full-time employees
 Subcontract work to other firms
 Install equipment to perform some of the tasks that would be done by workers
(capital substitution)
 Hire permanent full-time employees
STEP 6: FOLLOW UP THE PLAN
 CHAPTER FIVE

R E C R U I T M E N T A ND S E L E C T I O N

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RECRUITMENT

Recruitment is the process of finding and attracting a prospect job

applicants on a timely basis, in sufficient numbers and with appropriate
qualifications, and encouraging them to apply for actual, anticipated and
unexpected organizational vacancies.
 the first step in the hiring process
PURPOSES AND IMPORTANCE OF RECRUITMENT

The general purpose of recruitment is to:

 provide a pool of potentially qualified job candidates.

 develop the pool of job candidates at minimum cost on a timely basis.

 Increase the success rate of the selection process by reducing the

number of visibly underqualified or overqualified job applicants.
 Reduce labor turnover in the future.

 Increase organizational and individual effectiveness in the short term

and long term.
 PROCESS OF RECRUITMENT

1. Consider the HRP: to identify job openings

2. Define job duties, responsibilities and requirements using
job description and specification.
3. Choose the source and methods recruitment
SOURCES OF RECRUITMENT

Internal Sources: Internal recruitment seeks applicants for positions

from those who are currently employed. Internal sources include present
employees, employee referrals, former employees, and former
applicants.
There are two important internal sources of recruitment namely:
Promotion and Transfer
Promotion is the transfer of an employee to a job that pays more
money or one that enjoys some preferred status. Promotion involves the
reassignment of an employee to a position having higher pay, increased
responsibilities, more privileges, increased benefits and greater
potential.
Promotion leads to shifting an employee to a higher position carrying
higher responsibilities, facilities, status and pay. The employees can be
informed of such a vacancy by internal advertisement.
Transfers: Another way to recruit from present employees is to
transfer the employee without promotion. Transfers are often
important in providing employees with a broad-based view of the
organization, necessary for future promotions. The transfer
involves the shifting of an employee from one job to another.
Other Options
Family and Friends of Employees: This can be a good source of
internal recruitment. This source is usually one of the most
effective methods of recruiting because many qualified people are
recruited at a very low cost to the company.
Previous employees: Former employees are also an internal
source of applicants.
Demotion
 METHODS FOR INTERNAL RECRUITING

Methods of Internal Recruiting

1. Job posting: this involves announcing job openings to
all current employees. Position, location, pay scale and
qualifications are described. The means used for
announcing the job vacancies can be Bulletin boards,
In-house Newsletters, Circulars/memos, and intranet.
 Job bidding: Procedure that permits individuals in the
organization who believe they are qualified to apply for
posted jobs.
 Employee referrals: Supervisors or current employees
generally recommend best-qualified candidates for the
vacant jobs. 60
ADVANTAGES OF INTERNAL RECRUITMENT

The following are the advantages :

 It promotes greater loyalty and morale among the
employees.
 It improves the probability of a good selection since
information on the individual's performance is readily
available.
 When carefully planned, promoting from within can also
act as a training device for developing middle-level and
top-level managers.
 Those chosen internally are familiar with the
organization.
 It encourages self-development among employees. They
look forward to higher posts.
 It also creates a sense of security, stability and continuity
of employment.
 It eliminates the chances of hasty decisions.

DEMERITS OF INTERNAL
RECRUITMENT
Internal sources of recruitment have certain demerits also.
These are listed below :
 When vacancies are filled through internal promotions the scope
for fresh blood entering the organization is reduced. It results in
inbreeding which is not good for the organization.
 The advantage of hiring outsiders who may be better qualified and
skilled is denied.
 The employees may become lethargic if they are sure of time-
bound promotions.
 The spirit of competition among the employees may be hampered.
 There are possibilities that the internal sources may "dry up". It
may be difficult to find the requisite personnel from within an
organization.
 It results in favoritism or nepotism
 SOURCE OF RECRUITMENT

External recruitment refers to attracting qualified

candidates from outside the organization to apply for
job vacancies.

This source is widely used especially to:

 fill entry-level jobs

 Acquire skills not owned by current employees

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SOURCES OF EXTERNAL RECRUITMENT

Educational Institutions: Direct recruitment from educational institutions for jobs that require
technical or professional qualifications has become a common practice. A close liaison between
the company and educational institutions helps in getting suitable candidates to man various
positions. This is also known as `Campus Recruitment’.
Professional or Trade Associations: Many associations provide placement services for their
members. These services may consist of compiling job seeker lists and providing access to
members during regional or national conventions. Further, many associations publish or sponsor
trade journals or magazines for their members. These publications often carry classified
advertisements from employers interested in recruiting their members. Professional or trade
associations are particularly useful for attracting highly educated, experienced or skilled
personnel. Another advantage of these sources is that recruiters can zero in on specific job
seekers, especially for hard-to-fill technical posts.
Management Consultants: Management consultancy firms help organizations to recruit
technical, professional and managerial personnel. They specialize in middle-level and top-level
executive placements. They maintain data bank of persons with different qualifications and skills
and even advertise the jobs on behalf of their clients to recruit right type of personnel.
 Write-ins and walk-ins are those who send written inquiries. These job seekers are
asked to complete application forms for further processing.

Employment agency /headhunters: Employment agencies carry out recruitment

function on behalf of their client organization

Competitors: Rival firms can be a source of recruitment. This is called `poaching'. This
method involves identifying the right people in rival companies, offering them better
terms and luring them away. For instance, several executives of HMT left to join Titan
Watch Company. This is ethically wrong. Clearly, this trend needs to be stopped. This is a
challenge for the HR manager.
 METHODS FOR EXTERNAL RECRUITMENT

Advertising: a means to communicate the

organization employment requirement to the general
public using mass medias (radio, TV, news paper,
Internet, career sites, employer/organization website
and social media)

Employee referrals: current employees refer job

seekers from outside the organization.
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 METHODS FOR EXTERNAL RECRUITMENT

Job Fairs- is used by a single employer or group of employers to

attract a large number of applicants to one location for interviews.
Job fairs are often organized by colleges and universities to assist
their students in obtaining positions.

Internship- involves placing a student in a temporary job with

no obligation either by the company to hire the student
permanently or by the student to accept a permanent position with
the firm.

Employment agency /headhunters.

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STRENGTHS AND WEAKNESSES OF
EXTERNAL RECRUITMENT
Strengths of External recruitment
 External sources provide a large number of applicants. This permits the enterprise
to have a free hand in making the right choice of candidates.
 The enterprise can expect to get fresh, talented candidates from outside. This
means introduction of new blood and new ideas, into the enterprise.
 Internal candidates have to compete with external candidates for the higher jobs. It
serves as inducement for the existing employees to show better performance.
Limitations of External Recruitment :
 Recruitment from outside may cause dissatisfaction and frustration among the
existing employees who aspire for promotion.
 External recruitment, takes more time than the internal recruitment since the
enterprise has to publicize the vacancies and wait for response of prospective
candidates.
 The prospective candidates from outside may or may not be good for the
enterprise. There is no guarantee that the enterprise will be able to attract suitable
applicants even after advertisement.
 It is very costly to recruit staff from external sources.
4. Advertise the vacant position for job seekers
 FEATURES OF JOB
ADVERTISEMENT
• There are 5 features to base an advertisement
strategy on
– Job duties: what will the person do?
– Work experience: what background is required?
– Skills: what unique skills are required?
– Style: how will the person get the job done?
– Temperament: what kind of personality?
 • Meeting with engineers, architects and contractors on an
• Project Director ongoing basis regarding project objectives and progress.
• Job by Boston Partners PLC / Kuriftu Resorts • Monitoring build progress, overseeing finance and
• (Job Id: 394543 | 2601 Views)Posted27May ensuring project quality
• Category: • Managing and motivating site engineers and formans
• Consultancy and Training, Engineering • Working closely with new business development team
• Location: • Job Requirements
• Field visit is applicable, Addis Ababa • Education
• Career Level: • BSC or MSC Degree in Civil Engineering or related field
• Managerial Level (Manager, Supervisor, Director) • Skills
• Salary: • Excellent project management skill
• Negotiable • Managing multi sector projects
• View Jobs by this company • Excellent negotiation skills
• Job Description • Leadership and business management skills
• Boston Partners PLC would like to invite qualified • Knowledge of computer operating systems, hardware
candidates for the Project Director position. and software (ex. Autocad, excel)
• Position Summary: • Experience
• As a project director he/she will be responsible for • Proven 10 years experience in project management,
overseeing all aspects of a project to ensure the quality ability to lead project teams of various sizes and see
is of a high standard, and that it is running to the them through to completion, experience overseeing a
timescales allowed. construction project & budget management experience.

• Job Role
5. Receive applications from job applicants to create a pool of
potential job candidates.
 FACTORS GOVERNING
RECRUITMENT
Internal Factors External Factors
Size (expansion, downsizing) Demographic factors

Recruitment policy Labor market (demand and

(internal/external) supply)

Image of the Unemployment situation

organization

Image of the job (payment, Labor laws, Legal

advancement, environment…) considerations
(compensation, working
 SELECTION

Effective selection process requires:

 Clearly spelled out job description and job
specification
 Sufficiently large pool of prospective
applicants
 Series of steps through which applicants
pass
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 Selection
RIGHT SELECTION
IMPROVES
POOR SELECTI ON LEADS T O

 Human capital of the  Increased employee turnover,

organization  Absenteeism,
 Employer-employee relations
 Job related Accidents
 Productivity and commitment  Job dissatisfaction
of employees  High costs of training and
Productivity losses.

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 ORIENTATION AND INDUCTION

• Induction- is the process of receiving and welcoming

employees when they first join a company.
• Orientation- A procedure for providing new
employees with basic background information about
the firm.
 INDUCTION AND ORIENTATION

• Induction- is the process of receiving and welcoming

employees when they first join a company. Includes Company
overview:
 Mission, Vision, Values
 History and clients
 hierarchy
 Policies
 Company rules (dress code, Business conduct guideline)
AIM OF INDUCTION AND ORIENTATION

 It helps a new employ to know the people with whom he is

supposed to interact, the job, its content, policies, rules ,
regulations and some additional information related to the job
context.
 Enhance adjustment to work group and norms.
 The idea is to make the new employees feel ‘at home’ in the
new environment
 To reduce anxiety which results in less start up costs
(associated with job learning)
 To Develop Realistic Job Expectations and Job Satisfaction
 To reduce employee turnover
