HUMAN RESOURCE MANAGEMENT

This course addresses the basic concepts of how the human resources industry works as well as how
those principles have been implemented and employed by businesses and HR practitioners around the
world. It aims to meet the needs of both students and experts in the field of human resources. Human
resources must be chosen, developed, trained, and adapted to the workplace. This indicates that HR and
HRD are crucial components of any firm. Entrepreneurs who have treated their employees well have
always enjoyed great success, prosperity, and growth.

Accordingly, the comprehension and coverage of various topics have been structured to enable an
efficient use of the modules, which will greatly benefit from the most recent corporate trends and events.
The module’s layout was also created to better organize the subject matter, particularly in human resource
management.

There will be eleven modules for the entire semester and the discussion in each module is simplified to
help students to better understand Human Resource Management.

COURSE OBJECTIVES

The purpose of this course is to provide an overview of Human Resource Management with particular
emphasis on human resource planning and strategy, personnel selection, equal employment opportunity,
training, performance appraisal, compensation and contemporary issues. This course can help students
to be prepared for careers that will require overseeing personnel in a global setting.

SUMMARY OF LEARNING OUTCOMES

After studying this course, the students are expected to acquire the following competencies:

1. Ability to compare and contrast the new human resource management strategy with the previous
personnel management technique.
2. Understanding on how to review the methods and techniques employed in the selection and
recruitment of qualified individuals.
3. Easily determine the efficiency of the guidelines and processes for employee monitoring and
evaluation.
4. Better understanding about the rights and procedures on exit
5. Have practical experience with the employment techniques, such as job analysis and design,
human resource planning, and employee development, that are required to manage human
resources effectively and efficiently.
6. Create Human Resource Plan for the given company.
 MODULE 1
INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

Lesson 1: Definition, Scope, Nature and Objectives of Human Resource Management

Lesson 2: Evolution and Development of Human Resource Management
Lesson 3: Difference between Personnel Management and Human Resource Management
Lesson 4: Approaches to Human Resource Management
Lesson 5: Human Resource Policies
Lesson 6: The Role of Human Resource Practitioners today

INTRODUCTION

Human resource management can be said to be the responsibility of all those who manage people as well
as a description of persons who are employed as specialists. Planning for human resource requirements,
such as retirement selection, training and development, promotion and transfer, redundancy, and
retirement, falls under this area of management. Additionally, it deals with the majority of industrial
relations issues, pay and salary administration, collective bargaining, and welfare and safety.

Human resource management (HRM) may sometimes be known as Personnel management (PM). Both
expressions are used often interchangeably in practitioner and academic circles.

Personnel and human resource management activities are carried out by all those in a leadership role in
an organization. Every manager or team leader must be concerned about how people are employed as
well as what they should be doing and how well they should be doing it. In most situations such leaders
fulfill their personnel/HR responsibilities within a clear framework of HRM policy. However, the main focus
of the discussion will be on the duties and tasks that professionals in the field of personnel and human
resource management have to perform.

LESSON 1: DEFINITION, SCOPE, NATURE AND OBJECTIVES OF HUMAN RESOURCE

MANAGEMENT

Before we discuss all about Human Resource Management, it is better to have a review of the basic
terminologies in management to better understand HRM. The term Human Resource Management is
composed of two basic terms: Human Resource and Management. Some of you might have an idea
about the definition of Human Resource and some students have already understanding what
Management is all about. Let us check if your idea about Human Resource and Management is correct
by answering these questions:

1. Human resource is referred to as people – is this True or False?

2. Organizations use Management to be effective in achieving the organizational goals by using the
5 Functions of Management – True or False?

Are you done answering the questions given above? Let us now check if your answers are correct.
What is Human Resource?

It may feel a bit weird to refer to people as ‘human resources’. Human Resources are all the people that
in one capacity or another work for or contribute to an organization.

These people make up a company’s workforce. They can be regular employees, for example, but also
contractors. Especially with the rise of the gig economy, more and more people are starting to work for an
organization on a contract basis without having a traditional labor contract.

These people include independent contractors, workers provided by contract firms, on-call workers, and
temporary help agency workers.

Going back to the first question given earlier, if your answer is True then you misinterpret the meaning of
Human Resource. The term Human Resource is not just referred to as people, but people that work and
contribute to an organization. Meaning to say, if you are working in a certain company, you are one of the
Human Resources of that company regardless of your status (whether you are a regular, contractual or
part-time employee).

What is Management?
 When we say Management, we are referring to the process of effectively and efficiently achieving
the organizational goals using the four functions of planning, organizing, leading, and controlling.

 Another definition that we can also consider in defining Management is the process of working
with and through others to achieve organizational objectives in a changing environment by
balancing the effectiveness and efficiency and making the most of limited resources.

For the second question given in the early discussion of this module, if your answer is True then you need
to review the basic of Management to clarify what Management is all about. If you take a look at the
definition of Management given above, we can say the organizations use Management to be effective and
efficient in achieving the organizational goals using the four functions. So, what are these four functions?

4 Functions of Management

1. PLANNING (Delivering Strategic Value) – this first function involves choosing tasks that must be
performed to attain organizational goals, outlining how the task must be performed, and indicating
when they should be performed.

2. ORGANIZING (Building a Dynamic Organization) – this function involves assigning the tasks
developed under the planning functions to various individuals or groups within the organization.

3. LEADING (Mobilizing People) – this is the function of manager to stimulate people to be high
performers by motivating and communicating with employees, individually and groups.

4. CONTROLLING (Learning and Changing) – this last function is concerned with supervising
employees’ activities, keeping the organization on right track toward its goals, and making
corrections if necessary.
Figure 1.1 The Process of Management

Figure 1.1 illustrates the process of management. As you can see from the illustration, there are only four
functions in management, and they cannot be carried out without the organizational resources required
for their effective and efficient execution in order to improve organizational performance.

What are the resources needed?

1. Human Resources – these are the employees or people needed to get the job done.
2. Financial Resources – refers to any money used by the company to finish the tasks and accomplish
the goals.
3. Physical Resources – these are the firm’s tangible goods and real estate, including raw materials,
office space, production facilities, office equipment, technology needed and vehicles.
4. Information Resources – refers to the data needed and used to accomplish the job.

After a brief discussion about Human Resource and Management, you are now ready for the full
discussion about Human Resource Management or HRM.

What is Human Resource Management (HRM)?

Let’s start with a brief definition. Human Resource Management, or HRM, is the practice of managing
people in the organization to achieve better performance.

For example, if you hire people into a business, you are looking for people who fit the company culture as
they will be happier, stay longer, and be more productive than people who won’t fit into the company
culture.

Another example is engagement. Engaged employees are more productive, deliver higher quality work
and make customers happier. This means that if we can find ways to make employees more engaged, we
help the company.
Another definition given Invancevich and Glueck is that “HRM is concerned with the most effective use
of people to achieve organizational and individual goals. It is a way of managing people at work, so that
they give their best to the organization.”

HRM can also be defined as:

1. A strategic approach to acquiring, developing, managing, motivating and gaining the commitment
of the organization’s key resource- the people.

2. That part of the process of management that is concerned with the maintenance of human
relationships and ensuring the physical well-being of employees so that they give the maximum
contribution to efficient working.

3. The design of formal systems in an organization to ensure the effective and efficient use of human
talent to accomplish organizational goals

Human resource management is all about having the right people, with the right capabilities, in
the right place, at the right time.

Why HRM is crucial to the organization? It is because the market place for talented, skilled people is
competitive and expensive. Taking on new staff can be disruptive to existing employees. Also, it takes
time to develop cultural awareness, product/ process/organization knowledge and experience for new staff
members.

HRM does not only include hiring and firing of employees, HRM aims to maintain a positive work culture
and fulfil the organizational goals. Human resource management brings people together in an
organization. Why? To make sure both individual and organization goals are fulfilled.

What are the scope, nature and objectives of HRM?

Scope of HRM

Human resource management is a pervasive and interdisciplinary activity that, over the years, has become
indispensable in every organization. What are the scope of how human resource and why HRM plays
such an important role in the company?

1. Assessment of company human resources – It means evaluating the current payroll and
whether it is proportional to the work requirement. This gives an idea about whether roles are
missing or more than required in the organization. This whole process can also be called human
resource planning.

2. Reviewing jobs in the organization – Getting a comprehensive detail about each title in the
company and what profile will be needed to fulfill a vacant job title comes under human resource
management. This helps set the base for finding and selecting the right candidates for the company.
Job analysis needs to be done very carefully, considering the company’s financial budget.

3. Interviewing and Selection – The next step in HR scope is the selection of the right candidate.
The right candidate would be the one who, apart from his academic qualification, also fits the
company’s culture. One of the activities of HRM is setting out the requirements for a particular job
 title. Deciding how many steps the interview selection process would have also come under the
scope and functions of HRM.

4. Introduction and Orientation – After the candidate is selected, he is introduced to its work culture,
ethics, and environment. He is oriented with the team he will work with and the supervising
manager. This helps in building the comfort level of the new employee. The objective of the whole
induction process is to acquaint the employee with organizational values. It is an informal process.

5. Remuneration and Benefits – The human resource manager’s role is to clearly describe all the
benefits, including medical, travel, vacation leaves, etc. All these perks help in achieving a superior
work efficiency environment.

6. Employee’s growth prospects – The nature and scope of HRM comprise how to keep the
employee motivated and gain their loyalty. It’s the HR who has all information about employees’
performance and who is better than him to review his past performance and discuss future growth
opportunities with him. A performance appraisal, linked with incentives and increments, motivates
the employees to achieve more and more targets if done from time to time.

7. Training on the job – Human resource management is alternatively known as the employee-
oriented function. Its job is to provide different learning programs to its employees continuously.
One of the main activities of HRM involves the development of its employees. Every organization’s
success depends on how up-to-date an employee is with new ways of doing the job. These training
programs aim is to enhance and build the employee’s skills as per skills from around the world.

8. Employee Satisfaction – The health, wealth, and prosperity of employees are all the responsibility
of HR. Building a healthy work environment and motivating the employees at each step also comes
under the scope of human resource management. This includes non-monetary amenities like
medical, canteen, or other recreational areas. A safe and secure work environment plays a huge
role in the efficiency of employees.

9. Grievance procedure for employees – Human resource managers should employ a mechanism
to address employees’ grievances in a secure environment. This helps in building the trust of
employees in the long run. Feeling their voices are heard also gives the employee a different level
of satisfaction. Ensuring this process is carried out securely and confidentially is one of the crucial
jobs of HRM.

10. Labor and Trade unions – Building strong relations in the industry is one of the key attributes to
the success of any organization. The wide scope of human resource management also involves
building and maintaining healthy, strong relations with different trade unions for the company’s
smooth functioning.

What is the Nature of HRM?

The nature of human resource management is people-centered and relevant in all types of organizations.
It is concerned with every employee from the top to the bottom level. HRM value people both as individuals
and as a group. Furthermore, it encourages people to develop their full potential and fulfil individual and
organizational goals.
The various features of HRM include:

 It is pervasive in nature as it is present in all enterprises.

 Its focus is on results rather than on rules.
 It tries to help employees develop their potential fully.
 It encourages employees to give their best to the organization.
 It is all about people at work, both as individuals and groups.
 It tries to put people on assigned jobs in order to produce good results.
 It helps an organization meet its goals in the future by providing for competent and well-motivated
employees.
 It tries to build and maintain cordial relations between people working at various levels in the
organization.
 It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics,
etc.

Objectives of HRM

1. Organizational Objectives – HRM’s objective is to maintain a competent workforce. How? By

planning, recruiting, selecting, training, and developing the human resources for the organization’s
growth, expansion, and survival. The organizational objectives recognize the role of human
resource management in bringing about organizational effectiveness. Human resource department
exists to serve the rest of the organization.

2. Functional Objectives – Human resource management is responsible for coordination within and
among different functional departments of the organization. It organizes and allocates the resources
to achieve business objectives effectively.

3. Societal Objectives – HRM is responsible for ensuring compliance with society’s legal and ethical
standards at every level of the organization. The activities of HRM should be socially responsible
and fulfil society’s needs, demands, and challenges. Therefore, HR managers must ensure that the
available resources are used for society’s benefit.

4. Personal Objectives – HRM stresses the importance of fulfilling employees’ personal objectives
and increasing their contribution to the organization. Personal objectives of employees must be
met if they are to be maintained, retained and motivated. Otherwise, employee performance and
satisfaction may decline giving rise to employee turnover.

Other objectives of human resource management include the following:

1. Foster a better work culture

2. Adopt tools for team integration
3. Increase employee engagement
4. Define an organizational structure
LESSON 2: EVOLUTION AND DEVELOPMENT OF HUMAN RESOURCE MANAGEMENT

Prior to 1900, reformers prioritized enhancing people's working conditions. For better working conditions,
several employees tried to form unions or go on strike. However, shortly before 1900, HR management
as a specialist job in corporations started to emerge formally.

Before that time, most hiring, firing, training, and pay-adjustment decisions were made by individual
supervisors. Also, the scientific management studies conducted by Frederick W. Taylor and others,
beginning in 1885, helped management identify ways to make work more efficient and less fatiguing, thus
increasing worker productivity.

As businesses became bigger, professionals started to handle various managerial tasks like hiring and
payroll. The first personnel departments were established around 1910 as a result of the expansion of
companies. Work by people like Frank and Lillian Gilbreth focused on task design and efficiency. The
Hawthorne Studies, carried out by Elton Mayo in the middle of the 1920s, showed how work groups
affected particular employees. Ultimately, these studies led to the development and use of employee
counselling and testing in industry.

In the 1930s, in US, the passage of several major labor laws, such as the National Labor Relations Act of
1935, led to the growth of unions. The importance of collective bargaining and union/management
relations following the labor unions rise to power in the 1940s and 1950s expanded the responsibilities of
the personnel area in many organizations, especially those in manufacturing, utilities, and transportation.
Such work as keeping payroll and retirement records, arranging stockholder visits, managing school
relations, and organizing company picnics was often the major role of personnel departments. The role of
the HR department in the organization as a staff function to support operational (line) departments
expanded during this period, and line/staff issues grew to influence HR departments in the following
decades.

The social legislation of the 1960s and 1970s increased the legal requirements and restrictions, which led
to significant changes in the majority of the company's HR departments. The legal implications of policies
and procedures forced HR departments to become considerably more professional and concerned.
Organizations also changed how they looked at employee engagement and the quality of their work as a
result of concerns about how automation and job design will affect worker productivity.

In the 1980s, as businesses cut workers, shut down facilities, or underwent organizational restructuring,
HR management's strategic role became crucial. Outplacement of workers and retraining for the remaining
staff became the HR departments' top priorities. It also became more crucial to keep health care benefit
expenses under control.

During the 1990s, organizational restructuring continued. A study of HR executives involved in

reengineering the HR management in their companies found that the traditional HR function began shifting
its emphases. As Figure 1.2 indicates, the HR managers of the future will need to be more strategic and
proactive.
Figure 1.2: Shifts in HR Management

The significance of shifting demographics and growing skills shortages among workers has increased.
Human resource management has had to deal with the problems and consequences of workplace
diversity as a result of demographic changes. Even in small businesses, emphasis has been paid to the
outsourcing of HR functions as well as the computerization of the administrative aspects of HR activities.
Finally, the management of HR activities is being impacted by the rise in concerns impacting employee
rights, such as drug testing and smoking bans.

The 21st century would see the following inter-related phenomena emerging, posing challenges to the
corporate world and culminating in Olympian competition:

 Borderless world
 Diversity
 Knowledge Power

One of the important duties of the modern HR manager is to get things done through people. He has to
bring employees into contact with the organization in such a way that the objectives of both groups are
achieved. He must be interested in the people, the work and the achievement of assigned objectives. To
be effective, he must balance his concerns for people and work. In other words, he must know how to
utilize human as well as non-human resources while translating goals into action.
It is in managing human assets that the manager’s capabilities are tested fully, because of the following
reasons:

1. Human resources are heterogeneous. They consist of many different individuals, each of whom
has a unique personality, a combination of different emotional responses to different stimuli and
different values, attitudes, motives and modes of thought.
2. Human beings behave in widely different and complicated ways. Their reactions to promises, praise
or criticism, for example, can be quite different. It is very difficult to predict their behavior especially
in an organization where they work in-groups. Their behavior is neither consistent nor readily
predictable.
3. Modern employees are better educated, possess greater skills, have more sophisticated
technology available for their use and enjoy higher standards of living than previous generations.
4. A human being himself determines what he contributes. If he is motivated, he will work for an
organization more efficiently and effectively.

Therefore, the manager must acknowledge that individuals, not institutions, produce excellence. Peter F.
Drucker had stated that “man, of all the resources available to man, can grow and develop” in recognition
of the significance of the human element in the production process. The problem of establishing the right
climate to maximize employee motivation and commitment is still with us.

LESSON 3: DIFFERENCE BETWEEN PERSONNEL MANAGEMENT AND HUMAN RESOURCE

MANAGEMENT

The 1990s came to be seen as the “decade of the consumer” (customer, client, patient or other end-user
of goods and services); this situation brought forth a need to redefine “Personnel management” so that it
better reflected the contemporary focus on (a) customers and their needs, and (b) the need to adapt to
changing conditions in the external marketplace; there was now less focus on either the concerns of
employees or the need for formal communication structures within the organization. The 1990 s was also
the decade that saw a major attack on organizational hierarchies, leading to considerable de-layering of
structures and a greater delegation of accountability to work-team leaders.

The last decade of the twentieth century has sought to change the emphasis of “personnel management',
so as to be more concerned with primary business goals, and less with the implications for employees of
the consequences of pursuing those goals. The work environment today has changed from the
confrontational mixture of mid-century employee relations, with its emphasis on highly regulated personnel
procedures, to collaborative approaches based on small work-teams dedicated to customer satisfaction,
where workplace learning is paramount and the need for centralized procedures less relevant. At the same
time the external environment for all of the private sector, and parts of the public sector, has become much
more competitive. Not only are customers and their requirements important, but so too are the actions of
competitors. It is in this new environment that the term “Human Resource Management” sits more
comfortably for many people than “Personnel Management”.

Much of the debate about whether there are significant differences between these two concepts is of
interest only to academics. Nevertheless, given that significant numbers of business and government
organizations have taken the step of renaming their personnel function as the HRM function, it is fair to
assume that they are making some kind of statement about how they view people management. It could
be argued that it has become fashionable to speak of HRM, and that this is why many organizations have
adopted the expression.
What are the principal primary distinctions between “personnel” activities and “human resource” activities?
There are no pat answers to this question, but the following points have been made in recent debates on
this topic:

Personnel Management implies HRM implies

Reactive, servicing role Proactive, innovative role

Emphasis on implementation of procedures Emphasis on strategy
Specialist department General management activity
Focus on employees’ needs in their own Focus on employee requirements in the
right light of business needs
Employees seen as a cost to be controlled Employees seen as investment to be
nurtured as well as cost to be controlled
Presumption of union-management Conflicts dealt with by team leaders within
conflicts their teams
Preference for collective bargaining of pay Management-led planning of people
and conditions resources and employment conditions
Emphasis in settling pay more in terms of Emphasis on competitive pay and
the organization’s internal market conditions to stay ahead of competitors
Serving other departments/units Contributing ‘added value’ to business
Supporting change Stimulating change
Challenging business goals in light of Total commitment to business goals
effects on employees
Less flexible approach to staff deployments Completely flexible approach to staff
deployments
LESSON 4: APPROACHES TO HUMAN RESOURCE MANAGEMENT (HARD AND SOFT)

Some scholars have made a distinction between the hard and soft versions of HRM.

Hard HRM

The hard version of HRM is based on the classic models of management. It reflects a long-standing capitalist
tradition in which the worker is regarded as a commodity. It regards people as human capital from which a
return can be obtained by investing judicially in their development. HR are another key resource for
managers to do finance and other materials resources.

Emphasis is on:

 Interests of management
 Adopting a strategic approach that is closely integrated with business strategy
 Obtaining added value from people by the processes of human resource development and
performance management
 The need for a strong corporate culture expressed in mission and value statements and reinforced
by communications, training and performance management processes

Soft HRM

The soft model for HRM traces its roots to the Human Relations School. It emphasizes on:

 Communication
 Motivation
 Leadership

LESSON 5: HUMAN RESOURCE POLICIES

Policy making is a key part of strategic planning in an organization. It is especially important when developing
responses to key Human Resources management issues.

What is a policy?

A policy is an expression of the organization’s values and beliefs concerning all major functions of the
enterprise. It is a guideline for doing something. A policy states not what the organization intends to do, (i.e.
goals), but the manner in which the organization intends to achieve these goals. Policies are not objectives.
They define the approach or philosophical values the organization intends to adopt in managing its human
resources. They are principles or reference points upon which managers are expected to act when dealing
with human resource issues.

The cooperation of workers must be obtained if the business is to run smoothly. The workers must have
confidence in the firm and this may not be easy when technical advances produce a fear of unemployment
and unrest.
Policy must be determined by the board and must be clearly defined, and those employees who have to
administer the policy should be given an opportunity to contribute. This may be done in joint consultative
committees. In order to have a good policy, a knowledge of those factors an employee regards as important
is essential. This involves knowledge of the industrial application of sociological and psychological theory,
and the forces generated should be known and controlled in order to ensure effective collaboration of
individuals and groups to that company and individual goals can be reached. “Harmony of objectives” must
be the goal.

Human resource policies are concerned with providing an effective organizational structure, manning it with
appropriate personnel and securing optimum working conditions; the object being to create and maintain a
level of morale which evokes the full contribution of all employees in ensuring that the company operates at
maximum efficiency.

The following factors may be regarded as important and necessary in a human resources policy:

1. Remuneration – this must be at least the market rate for the job and give the employee a reasonable
standard of living.
2. Security – this is vital to the average worker; it is not so important to the young, or where there is full
employment, but stability of employment is essential and there must be guarantees against unfair
dismissal.
3. Opportunity – if this is not available, a worker may look elsewhere. Vacancies should therefore be
filled within a firm whenever possible or practicable. This does emphasize the need for good
education and training policies so that existing staff can be trained to fill vacancies.
4. Status – a person's feeling that he “counts” or “matters” and that he is a respected member of a
group can influence output and lead to the retention of workers.
5. Justice – this can be simply defined as confidence in being treated fairly. The security of the worker
must not be threatened and specific rules regarding punishment, judgment and appeals procedure
must be invoked. These should include guarantees of confidential access to the human resources
manager.
6. Democracy – in a capitalist structure it may not be easy to invoke the idea that a man has the right
to a voice in the way he is governed, and by whom he is governed. Attempts along these lines are
the formation of joint consultative committees and the establishment of procedures for regular
consultation between managers and employees.
7. General – to assist employees in developing social, educational and recreational amenities and to
maintain policies without discrimination between employees.

Why there is a need for policies?

1. They develop a coherent approach to managing people which binds together the various human
resource strategies of the organization
2. They are the framework within which actions take place
3. They promote consistency and equity in the way in which people are treated
4. They facilitate decentralization and delegation because they provide guidance on what managers
should do in particular circumstances

Human resource policies can be implied (unwritten) or explicit (written). The latter are more advantageous
as they offer something concrete upon which managers can base their decisions. In addition, policies should
not be seen as permanent. They should be reviewed and changed to adapt to changing situations.
LESSON 6: THE ROLE OF HUMAN RESOURCE PRACTITIONERS TODAY

Today the prime role of personnel/HR practitioners is that of developing the organization’s staff resources
so as to enable people to make a flexible, multi-skilled contribution to the overall aims of the organization,
be it a business or in the public sector. In earlier decades it was the customer or supplier who often had to
suffer in order to meet the requirements of the workforce. Rigidity in job and employment structures meant
that line managers could not deploy employees to the best production advantage.

Managers' relations with their workforce were based as much upon fear of upsetting them as upon respect
for their skills and know-how. Nowadays this situation has changed. The customer's needs are the focus of
attention today. The external market place – be it a competitive market or a public service market – is the
battlefield, rather than the internal one of workplace relations. This shift of focus calls for a different role for
and HR practitioners, but always one which endeavors to procure, deploy, train and motivate people in the
service of their organization.

The relative influence on the HR practitioner can be analyzed under two broad categories:
1. those that exert a direct influence on the job-holder
2. those exerting indirect pressure.

The directly influential are as follows:

1. Top management – there is pressure on the HR practitioner to devise and implement effective
human resource policies that will contribute to corporate goals.
2. Line managers – expectations will be for HR support for recruitment, staff training, competitive
salaries, advice on employment and effective personal administration.
3. HR colleagues – the senior person's own staff will have expectations of clear direction and effective
leadership of the HR function, including having an interesting and demanding job, opportunities for
learning and promotion, and adequate backup arrangements.
4. Existing workforce – the chief expectation of the organization’s employees is likely to focus on fair
treatment at work, opportunities for training and development, and the effective administration of pay
and conditions.

Those stakeholders who do not have a direct relationship with the HR director but who nevertheless affect
what the jobholder may or may not do, include:

1. Customers/end-users
In service industries, in particular, where employees come face to face with their customers, there are ample
opportunities for the latter to experience poor levels of service; their reactions can bring great pressures to
bear on those responsible for staff training and competence; customers can affirm a business's reputation,
or they can destroy it; if customers go elsewhere, the very existence of the business could be in doubt; most
end-users want an effective and reliable service (or product) at an attractive price, and the HR function has
a key role to play in making this happen.

2. Shareholders/the community
In a business the shareholders will expect to see competitive outcomes from the management: a healthy
balance sheet, growing revenues from sales, stable or even reducing costs, adequate profits and dividends,
and a rising share value; where public services, such as health and education, are concerned the community
will expect adequate public funding to ensure access to facilities and a fully satisfactory outcome.
 3. Government/state bodies
Such bodies are expected to reflect public priorities for key services, including providing adequate
information about choices and performance; they may press for performance standards.

4. Trade unions
External trade union officers have an ever-present interest in the employment conditions of organizations;
they can exert pressure for the recognition of a union, where there is no independent representation of
employees; they have more direct involvement in the affairs of an organization if they have representation
rights for one or more groups of employees.

5. Potential employees
These as yet non-members of the organization will have expectations of relevant information about the
organization, the jobs on offer, the training and promotion opportunities, available, and fair treatment at
interview.

6. Competitors for labor

This group has a close interest in the recruitment activities of other, watching for changes in pay levels,
employee benefits and recruitment techniques; in a tight labor market, a competitor's actions in poaching
staff from another employer, or offering extra inducements to reduce staff turnover, can challenge a HR
manager to improve existing arrangements, with the inevitable knock-on effect on costs.

References:

Organization and Management by Dubrin

https://u-next.com/blogs/hr-analytics/scope-of-human-resource-management/
https://www.edureka.co/blog/nature-of-human-resource-
management/#:~:text=The%20nature%20of%20human%20resource%20management%20is%20people
%2Dcentred%20and,individuals%20and%20as%20a%20group.
Dr. Rakesh D., et al (2021). *Human Resource Management First Edition*. Archers and Elevators
Publishing House Inc.
https://www.academia.edu/15361919/BBA_Human_Resource_Management_Module

Prepared by:

Prof. Rachelle E. Esperanza