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Introduction to Human Resource Management

1.0 Introduction

• Human Resource Management (HRM) treats the organisation’s people as a strategic asset—sometimes called “human capital” or “intellectual assets”.
• Core idea: people supply the ideas, energy, knowledge, relationships, and problem-solving capabilities that determine whether organisational goals are met.
• HRM therefore blends:
– Knowledge (what workers know)
– Expertise (what they can do)
– Resources (the tools they control)
– Skills (the practiced abilities they bring)
– Attitudes (how they feel about the work and the employer).

1.1 Definition of Human Resource Management (HRM)

• “Process of managing human resources—both human capital and intellectual assets—to achieve organisational objectives.”
• Involves a cluster of:
– Philosophy (core beliefs about people & work)
– Policies (formal statements of intent)
– Programmes (co-ordinated initiatives)
– Practices (daily routines)
– Decisions (one-off or strategic choices) regarding employees.
• Classical functional summary: planning, organising, directing, and controlling the procurement, development, compensation, integration, maintenance, and separation of staff so that individual, organisational, and wider social goals are met.
• Contemporary view: design and implementation of systems that attract, develop, and retain a high-performing workforce.

1.2 Background / Historical Evolution

• Industrial Revolution (≈1890 – 1920s)
– Labour treated as a commodity; focus on wage payment, hours & output.
– Emergence of welfare secretaries & “employment clerks” (precursors to HR staff).
• Human Relations Approach (≈1930 – 1950s)
– Influenced by Hawthorne Studies; emphasis on motivation, leadership, morale, social needs.
– Personnel departments born; counselling & employee welfare gain importance.
• Recent Developments (≈1950s – 2020)
– Shift from administrative personnel to strategic partner.
– Concepts: strategic HRM, talent management, analytics, diversity & inclusion, employee experience, HR technology (HRIS, AI).

1.3 Purpose of HRM

• Recruit suitable employees (right person–right job–right time).
• Ensure appropriate training & development so skill sets remain current.
• Design & maintain appraisal/​performance-management schemes.
• Establish equitable compensation & reward systems (e.g., pay, incentives, benefits).
• Safeguard employee safety & health; promote well-being.
• Manage employer–trade-union or employee-representative relationships.
• Ensure full legal compliance with all employment laws & regulations.
• Maintain complete and accurate employee records (HRIS, files, analytics).

1.4 Structure of HRM Departments

• Size determines where HR duties sit:
– Small company → handled by department heads or owner-manager.
– Medium-size → located in an Administration Department.
– Large-size → dedicated Human Resource Department.
– Very large / conglomerate → separate HR, Training, and Industrial Relations Departments.
• Trend: shared-service centres, centres of expertise, HR business-partner model.

1.5 Importance of HRM

• Establish efficient systems by leveraging technology (HRIS, self-service portals).
• Manage & direct employees effectively: clear roles, support, communication.
• Influence and increase employee commitment & engagement (reduces turnover).
• Provide or sustain competitive advantage by virtue of rare, valuable, hard-to-imitate people capabilities.

1.6 Human Resource Management vs. Personnel Management

• Key contrasts (conceptual & practical):

  1. Definition—HRM = strategic; PM = administrative.
  2. Approach—HRM reports to CEO; PM to line manager.
  3. Treatment of manpower—people seen as assets (HRM) vs. cost/burden (PM).
  4. Function—change catalyst (HRM) vs. status-quo maintenance (PM).
  5. Focus—macro/long-term (HRM) vs. micro/short-term (PM).
  6. Activity—proactive (HRM) vs. reactive (PM).
  7. Decision-making—HRM at the table; PM rarely involved.
  8. Initiatives—ongoing strategic workforce development (HRM) vs. administrative processing (PM).
  9. Pay basis—performance evaluation (HRM) vs. job evaluation (PM).
    • Bottom line: HRM integrates business strategy; Personnel Management mainly administers employment contracts.

1.7 HRM, Human Resource Planning (HRP), & Human Resource Development (HRD)

• HRP (Workforce Planning): \text{HRP} = \text{Systematic alignment of supply of people with projected job openings over time}
– Internal supply: existing employees, skill inventories.
– External supply: labour market, graduates, gig workers.
• HRD: umbrella for training, career development, organisational development.
• HRM provides the overarching philosophy & infrastructure; HRP forecasts needs; HRD builds capability to meet needs.

1.8 Role of the Malaysian Ministry of Human Resources (MOHR)

• Sets national labour & HR policies.
• Drafts or amends employment legislation (e.g., Employment Act, SOCSO).
• Enforces labour laws via inspections, prosecutions.
• Issues codes of practice & guidelines for employers and employees.
• Promotes skills upgrading (e.g., HRD Corp levies & grants).

1.9 Core Functions of HRM

  1. Staffing
    • Job analysis & design
    • Human resource planning
    • Recruitment & selection
  2. Training & Development
    • Orientation, technical skills, soft skills, leadership.
  3. Performance Appraisal
    • Goal setting, feedback, evaluation, performance improvement plans.
  4. Compensation Management
    • Base pay, variable pay, benefits, equity, compliance with wage orders.
  5. Industrial/Employee Relations
    • Collective bargaining, grievance handling, employee voice.
  6. Safety & Health
    • Workplace safety programmes, OSHA compliance, wellness initiatives.

1.10 Roles Performed by Line & HR Managers

• Planner – anticipates labour demand, succession planning.
• Coordinator – aligns departmental HR needs with corporate HR policies.
• Auditor – reviews HR metrics, ensures standards are met.
• Medium/Communicator – bridges staff concerns to top management and vice-versa.
• Facilitator – supports change, conflict resolution, team building.

1.11 Key Factors Driving Creation of a Formal HR Department

• Size of organisation (≥100 employees usually triggers dedicated HR).
• Level of workforce unionisation (collective bargaining demands specialists).
• Ownership type (MNCs, public-listed firms face stricter regulations).
• Top-management philosophy (people-oriented leaders invest more in HR).

1.12 Environmental Factors Influencing HRM

Internal Factors:
• Mission, organisational strategy, culture, technology, physical resources, internal regulations or policies.
External Factors:
• Labour market conditions, worker unions, economy, society values, government laws & agencies.
• Interaction illustrated by open-systems theory: firm exchanges inputs/outputs with environment.

1.13 Contemporary Challenges for HRM

• Globalisation – cross-border staffing, cultural integration, compliance.
• Technological change – AI, automation, remote work, HR analytics.
• Managing change – mergers, restructuring, agile ways of working.
• HR development – continuous upskilling, learning cultures.
• Market reaction – reacting quickly to competitive moves, customer expectations.
• Cost reduction – balancing lean staffing with service quality.
• Economic climate – recession hiring freezes vs. war-for-talent booms.
• Legal system – evolving labour laws, gig economy regulation.

1.14 Current HRM Issues

• Workforce diversity (age, gender, ethnicity, ability).
• Employee age distribution – multi-generation teams (Gen Z → Baby Boomers).
• Employee rights – privacy, fair treatment, due process.
• Work–life balance – flexible hours, remote work, caregiving responsibilities.
• Personal issues – mental health, substance abuse, financial stress.
• Rising education levels – higher expectations for meaningful work.
• Women & dual-income families – parental leave, childcare support.
• Changing attitudes toward work – purpose, gig/freelance preferences.

1.15 Elements of Diversity in the Hospitality Workplace

• Culture, race, ethnicity.
• Disability (physical, sensory, neurodiversity).
• Religious or spiritual beliefs (dietary, scheduling accommodations).
• Gender (male, female, non-binary).
• Intersex status.
• Generational differences (values, communication styles).

1.16 Importance of Embracing Diversity in Hospitality

• Acceptance of every individual’s differences → inclusive culture.
• Enables all employees to achieve full potential → higher creativity, lower turnover.
• Builds a positive business reputation with diverse customer base.
• Fosters mutual respect among employees → better teamwork.
• Reduces & resolves conflicts rooted in misunderstanding or bias.

Key Take-Away Formulae & Models (Quick Reference)

• Human Capital ROI: \text{HCROI} = \frac{\text{Revenue} - (\text{Operating Expense} - \text{Compensation})}{\text{Compensation}} illustrates financial return on every unit of money spent on employee pay.
• Forecasting Demand (simplified): \text{Projected FTE}{t+1} = \frac{\text{Sales Forecast}{t+1}}{\text{Productivity Ratio}} where Productivity Ratio = Sales ÷ Number of FTE today.
• ADDIE Model for Training: Analysis → Design → Development → Implementation → Evaluation.
• VRIO Framework for HR-based competitive advantage: Valuable, Rare, Inimitable, Organised.

Ethical & Practical Implications Discussed

• Treating people as strategic assets imposes moral duty to provide safe, fair, meaningful work.
• Legal compliance not just to avoid penalties but to uphold dignity & rights.
• Diversity management extends beyond quotas; it is about equitable opportunity and leveraging varied perspectives for service excellence in hospitality.