HUMAN RESOURCE MANAGEMENT
HRM 2605
TOPIC 1
STUDY UNIT 1:
Chapter 1: The foundation of Human Resources
Introduction
Human Relations
The scientific management approach of the 1930’s and 1940’s shifted to human relations. The Hawthorne
studies demonstrated that employee productivity was affected not only by the way the job was designed and
the manner in which employees were rewarded economically but also by certain social and psychological
factors.
Hawthorne researches discovered that employees’ feelings, emotions and sentiments were strongly affected
by work conditions such as group relationships, leadership styles and support from management and that
those feelings could, in turn have a significant impact on productivity. The Mayo – Roethlisberger research led
to the widespread implementation of behavioural science techniques in industry.
The shift to human relations was also influenced by the rise of unionism word wide and in South Africa, and as
a result of strikes on the mines in South Africa the first Industrial Conciliation Act was passed in 1924. This Act
gave workers the legal right to organise and bargain collectively with employers in disputes about wages, job
security, benefits and other work conditions. Although the Act, did not legislate good human relations it did
compel many employers to improve their personnel programmes (i.e. employee relations) in an effort to keep
unions out.
With unionisation came formal grievance procedures, which provided employees with a measure of protection
against subjective or despotic supervision. The human relations approach was instrumental in improving the
working environment of many workers, but it achieved only minimal success in increasing worker output and
job satisfaction.
The Human Resource Approach
The human relations approach fell out of favour with management during the 1950’s and 1960’s, and
considered passé today. While good human relations are still an important organisational objective, the human
relations approach is no longer guides the leadership style within organisations.
The emerging trend in HR management is clearly toward the adoption of the HR approach, through which
organisations benefit in two significant ways, namely:
• An increase in organisational effectiveness, and the
• Satisfaction of employee needs.
Rather than addressing organisational goals and employee needs as been separate and exclusive, the human
resource approach holds that organisational goals and human needs are mutual and compatible. The HR
1
,approach became popular in the 1970’s as research in the behavioural sciences showed that managing people
as resources rather than as factors of production could result in real benefits to both the organisation and the
employee. A number of principles provide the basis for a HR approach, namely:
• Employees are investments which provide long-term rewards to the organisation in the form of greater
productivity when effectively managed and developed.
• Policies, programmes and practices must be created that satisfy both the economic and emotional
needs of employees.
• A working environment must be created in which employees are encouraged to develop and utilise
their skills to the maximum extent.
• HR programmes and practices must be implemented with the goal of balancing the needs and meeting
the goals of both the organisation and the employee.
Strategic Human Resource Management
With the fast-paced global economy long-term planning in the form of strategic management is becoming ever
more important. Strategic management involves making those decisions that define the overall mission and
objectives of the organisation, determining the most cost effective utilisation of its resources, and crafting and
executing the strategy in ways that produce the intended results.
Strategic Human Resources Management (SHRM) activities address a wide variety of people issues relevant to
the business strategy.
Previously, people issues were the sole function of the personnel department. Today strategic HR problems are
the responsibility of every manager in every department. HR staff members are resources who are called on in
support of operating managers. All managers who are responsible for people are in effect HR managers.
An HR manager needs to acquire the following competencies in order to be successful:
• Business mastery: The HR manager will need to know the business of their organisation thoroughly.
• HR mastery: The HR manager will have to keep abreast of changes relating to issues such as staffing,
development, appraisals, rewards, team building and communication.
• Change mastery: The HR manager will have to be able to manage change processes so that HR
activities are effectively merged with the business needs of the organisation.
• Personal credibility: The HR manager must establish personal credibility; this is done by standing up for
their beliefs and being fair-minded in dealing with others.
Human Resource Functions
Because the human resource function within each organisation is unique to that organisation, the activities of
the HR department will vary from organisation to organisation. The activities that are likely to be assigned
exclusively to the HR department are:
• Compensation and benefit issues, such as insurance administration, wage and salary administration,
unemployment compensation, pension plans, holiday/leave processing and flexible benefits accounts.
• Employment, Affirmative action and employment equity,
• Job analysis programmes,
• Pre-employment testing,
• Attitude surveys (research)
2
,The HR department is also likely to carry out some activities jointly with other departments in the organisation,
including interviewing, productivity/motivation programmes, training and development, career planning,
disciplinary procedures and performance appraisals.
Job analysis and design
For an employee to perform satisfactorily, their skills, abilities and motives to perform the job must match the
job’s requirements. A mismatch may lead to poor performance, absenteeism, turnover and other problems.
Through a process called job analysis, the skills and abilities to perform a specific job are determined. Various
job analysis techniques exist.
Recruitment, selection, induction and internal staffing
To a great degree, the effectiveness of an organisation depends on the effectiveness of its employees. Without
a high-quality labour force, an organisation is destined to have mediocre performance. The recruitment of
human resources is a critical HR function, and involves activities such as the analysis of the labour market, long-
term planning, interviewing and testing.
Once employees are placed in their post it is important that they are introduced to their organisation, tasks,
superiors and co-workers through a process known as socialisation or orientation.
Appraisal, training, development and career management
The growth of an organisation is closely related to the development of its human resources. A strong employee
development programme does not guarantee organisational success, but such a programme is generally found
in successful, expanding organisations.
One important developmental function is the appraisal of employee performance. During an appraisal process,
employees become aware of any performance deficiencies they may have and are informed of what they must
do to improve their performance.
While career management is difficult to implement, advances in recent years have brought about
improvements in the decision making processes that affect employees’ careers.
Compensation and health
The issue of compensation has posed problems for HR managers for a long time. Questions arise such as “how
should, jobs be evaluated to determine their worth?”, “Are wage and salary levels competitive? And are they
fair?”, “Is it possible to create an incentive compensation system tied to performance?”
An increasingly important part of compensation is employee benefits. The cost of benefits for many
organisations averages as much as 40% of total pay roll costs, and because of this employers are trying to
control benefit costs without seriously affecting the overall compensation programme.
A newer area of concern to the employee today is health and safety. Each year, accidents, injuries and
occupational diseases cost billions of Rands in medical expenses, medical insurance, equipment damage and
production problems.
Labour relations
3
, Labour unions exert an influence on employers and help shape the HR policies and programmes. The South
African labour relations system is basically constructed around the Labour Relations Act, no 66 of 1995. The
employee who fails to perform up to expectations can not only be costly to management but can also create
problems such as frustration and tension within the work group. For these reasons, management must
recognise the causes of unsatisfactory performance and be able to bring about a permanent improvement in
job behaviour.
Human resource information systems (HRIS) HR research and problem solving
The HR department has also been transformed in terms of technology. Today all of the activities run by the HR
department can be accomplished with a human resource information system usually on a pc (personal
computer).
HR Department Roles
The primary task of the HR department is to ensure that the organisation’s human resources are utilised and
managed as effectively as possible. HR administrators help design and implement policies and programmes
that enhance human abilities and improve the organisation’s overall effectiveness.
More and more managers of organisations recognise that people are the organisation’s primary resource and
acknowledge the HR department’s role in developing that resource.
Does the HR function affect the success of an organisation?
In today’s ever changing and challenging economic environment the question of whether the HR department
can really affect the financial success of an organisation always surfaces.
Whilst certain important factors are truly attributable to the financial success of an organisation such as the
management and leadership of top management, product development and market advantage to name a few,
does the HR department contribute to the financial successes of an organisation?
Studies and numerous research efforts have revealed that there is a strong relationship between HR practices
and bottom line profits. It was also found that companies of all sizes measured by the number of employees
were all equally affected showing that more successful companies engaged in more HR practices than did less
successful companies.
Successful companies were generally able to use the HR function to solve problems and achieve success in the
following ways:
• Having the HR manager(s) report directly to the General manager(s)
• Placing major emphasis on employee recruitment, selection and training.
• Using team building and creating an environment of rapid decision-making at lower levels.
• Communicating key company performance objectives through all programmes and linking them to
goals at all levels.
• Including HR planning as part of Management’s strategic planning.
HR Policies
4
