Chapter 1.

Introduction to Operation Research

1.1. What
Human Resource Management was originally known as personnel or people management. HRM is a
formal way of managing people. It is a fundamental part of any organization and its management.

Today, Human Resources Management deals with:

 Anything related to managing people within a company or organization. This means decisions,
strategies, principles, operations, practices, functions, activities, and the methods used to
manage employees.
 The type of relationships people have in their places of employment and anything that affects
those relationships in a positive or negative way.
 Ensuring that employees are satisfied with the conditions of their employment. This leads to
better services and production of goods and helps the company’s success.
When we talk about human resources in a business situation it means the workforce, i.e., the
employees of a company and what skills and energy they bring. This includes any ideas, creativity,
knowledge, and talents that employees bring with them and use to help the organization be successful.
In other words, the resources a person has or the knowledge and experience developed over the years.

HRM focuses on bringing in (recruiting) new employees with new talents for the company and
managing employees. Another function is to guide and help said employees by providing direction
when necessary. In a large organization, with a lot of people, it is important to have a department that
specifically focuses on staff issues. These issues are things like hiring, performance management,
organizational development, training, occupational health and safety, motivation incentives,
communication, workplace culture, and environment.

Human Resource Management is now a vital part of any organization. Every company or organization
is required to have this department. It helps with increasing the morale of workers by working on
relations between employees and their employers and constantly striving to make them better. The HR
department also provides any support employees need to assist them improve their performance.

The HRM function extends to assessing the productivity and/or success of every department in an
organization or business. It assists each department and helps them improve their work. It also
intervenes
when necessary to help solve any problems that might arise with regards to employees’ work. Getting
better results from the company’s workers is another job of HRM.

When a business has valuable, rare, and/or unique human resources it will always have a competitive
advantage over other similar organizations.

Below are the criteria used in Human Resource Management – when using these effectively, a
company can make an impact in its particular field.

– Value Building: People who try hard to decrease costs and to provide a service or product unique to
customers, can increase their own value as employees and that of the company. Organizations also use
empowerment programs, quality initiatives, and strive for continual improvement in order to increase
the value that employees bring to the company.
– Rarity: When the skills, knowledge, and abilities of employees are not equally available to all
companies in the same field, the company that has these people, has a very strong advantage. This is
why top companies endeavor to hire and train the best and the brightest employees. This way they gain
advantage over their competitors. In some cases, companies will even go to court to stop other
organizations from taking away their valued employees. This proves that some companies have clearly
identified the value and the uniqueness of certain employees.
– Incomparability: Employees give their companies competitive advantage when their capabilities
and contributions cannot be reproduced by others. That is, the knowledge and skills that they bring to
the organization are unique and not easily found elsewhere. Certain corporations such as Disney,
Southwest Airlines, and Whole Foods have, over the years, developed very distinctive cultures that get
the most from employees. These cultures are difficult for other organizations to imitate. Southwest
Airlines, for example, rewards the employees who perform well. It is also able to maintain employees’
loyalty through offering free airfares and profit sharing in the company.
– Organized work force: People with unique talents can help a company achieve a competitive
advantage when they can easily be reassigned to work on new projects without much notice. In order
for this to happen teamwork and co-operation are needed and the creation of an organized system.
The criteria above show the importance of people power and also the link between human resources
management and performance management. Many high-functioning organizations now know that their
success depends on the knowledge and skills of their employees, or, their human capital. Human
capital is aligned with the economic value of employees with the right knowledge, skills, and abilities.
Their knowledge and skills have economic value. Managing human capital properly is imperative for
any organization wanting to maintain a competitive advantage. In some ways it is the most important
part of an organization’s human resource function.

The Objectives of HRM

The objectives of HRM are the goals of an organization. Individual or group activities are then
organized in such a way so as to achieve those objectives or goals. Organizations and companies aim
to secure and manage certain resources, including human resources, to achieve the specified goals.

Human resources must therefore be managed in a way that uses their resources to achieve the
organizational objectives/goals. Basically, the objectives of HRM come from and contribute to
achieving organizational objectives.

Objectives of HRM:
1. To establish and use a workforce that is able and motivated, in order to achieve the goals of an
organization.
2. To create the desirable organizational structure and working relationships among all the
members of the organization.
3. To integrate individuals and/or groups within the company by matching their goals with those
of the company.
4. To ensure individuals and groups have the right opportunities to develop and grow with the
organization.
5. To use what human resources a company has in the most effective way to achieve
organizational goals.
6. To ensure wages are fair and adequate and provide incentives and benefits thereby satisfying
both individuals and groups. Also, to ensure ways of allowing recognition for challenging work,
prestige, security and status.
7. To have continual high employee morale and good human relations by establishing and
improving conditions and facilities within the organization.
8. To improve the human assets by providing appropriate training programs on a continual basis.
9. To try to effect socio-economic change in areas such as unemployment, under-employment and
inequality by distributing income and wealth. This way society can benefit. Added employment
opportunities for women and the disadvantaged will also be impacted in a positive way.
10. To offer opportunities for expression.
 11. To ensure that the organizational leadership works in a fair, acceptable and efficient
manner.
12. To ensure a good working atmosphere and employment stability by having proper
facilities and working conditions.
Functions of Human Resource Management (HRM)
Human resource management must plan, develop, and administer policies and programs that can make
the best use of an organization’s human resources. This is the part of management’s role which deals
with people at work and their relationships within the organization. Its aims are:

1. To use human resources as effectively as possible;

2. To ensure the best possible working relationships among all members of the organization; and
3. To assist individuals to reach their highest potential.

In Human Resource Management, there are four major areas:

1. Planning
2. Staffing
3. Employee development, and
 4. Employee maintenance.
These four areas and any associated functions share a common aim. That is to have enough competent
employees with the skills, abilities, knowledge, and experience needed to achieve further
organizational objectives. Each human resource function (above) can be appointed to one of the four
areas of personnel responsibility but there are also other functions that are designed for different
purposes. For example, performance evaluation processes provide a stimulus and guide employee
development. They are valuable for salary administration purposes also. The purpose of the
compensation function is as a stimulus to keep valuable employees and also to attract potential
employees. Below is a description of the typical human resource functions

Human Resource Planning

The human resource planning function serves to determine the number and type of employees needed
to achieve the company’s goals. Research is performed in this function because planning requires
information to be collected and analyzed for the forecasting of human resource supplies and the
prediction of future human resource needs. Staffing and employee development are key human
resource planning strategies.

Job Analysis
Job analysis is deciding on the job description and the human requirements that are needed for said
job. The job description should include the skills and experience needed to perform the job. A job
description clearly sets out work duties and activities that employees will be expected to perform. Job
descriptions are essential because the information they provide to employees, managers, and personnel
people influences personnel programs and practices.

Staffing
Recruitment and selection of human resources (people) is what staffing is mostly concerned with.
Human resource planning and recruiting is done before selecting people for positions. Recruiting is the
personnel function of finding and hiring the best qualified applicants to fill job vacancies.

The selection function is used to choose the most qualified applicants for hiring from those attracted to
the organization by the recruiting function. During the selection process, human resource staff are
involved in assisting managers to decide which applicants to select for the given jobs and which ones
to reject.

Orientation
Orientation is done in order to introduce a new employee to the new job and the employer. It is a way
for new employees to get to know more intimate aspects of their job, including pay and benefits,
working hours, and company policies and expectations.

Training and Development

Training and development is used as a means of providing employees with the skills and knowledge to
do their jobs well. It must be provided to all employees. In addition to providing training for new or
inexperienced employees, organizations often provide training for experienced employees as well.
This may be because their jobs are undergoing change or the company needs them to work more
effectively. Development programs are also done to equip employees for higher level responsibilities.
Training and development programs are ways of making sure that employees can handle the stresses
of their jobs and perform well.

Performance Appraisal
Performance appraisal is an evaluation of an employee and his/her performance to make sure that said
employee is working well and at acceptable levels. Human resource personnel are usually responsible
for developing appraisal systems. The actual assessment of employee performance is done by
supervisors and managers. Performance appraisal is necessary because the results of the appraisal can
be used to motivate and guide employees’ performance. It also provides a basis for pay, promotions,
and any disciplinary action if necessary.

Career Planning
Career planning is a process where an employee explores his/her interests and abilities and
strategically works towards job goals. It has come about partly because many employees’ feel the need
to grow in their jobs and to advance in their careers.

Compensation
It is the HR department that determines how much employees should be paid for certain jobs using a
system of assessment. Compensation costs companies a lot so it is something that needs serious
attention in the human resource planning stage. Compensation affects staffing because people
generally want to work for an organization that offers more pay in exchange for the work done. It
provides an important motivation for employees to achieve more in their jobs and reach higher levels.
As such, it is related to employee development.

Benefits
Work benefits are also referred to as fringe benefits. They are non-wage compensation that employees
get in addition to their usual wages. Benefits are legally required items but employers can also more at
their discretion. The cost of benefits is so high that they have become a huge consideration in human

resources planning. Benefits are mostly related to the maintenance area because they provide for many
basic employee needs.

Labor Relations
Labor relations relates to the practice of managing employees who are members of a union. Unions
provide employees with strength in numbers and have representatives who can advocate on their
behalf if necessary, to deal with any discrepancies in pay, benefits, working conditions, and other work
aspects. HR personnel are responsible for negotiating with unions and resolving any disputes.

Record-keeping
Record-keeping is essential and the most basic function of HR. Recording, maintaining and retrieving
employee information when needed is done by the HR personnel. The type of records kept are related
to the employees and include employment history, resumes, medical records, promotions, transfers,
working hours, and lateness, etc. Keeping records up-to-date is a vital HR function. Employees today
want to know what is in their personnel records and why certain things are there or not there.

Personnel records provide the following:

a) Up-to-date information about employees.

b) Procedures for comparing employees and their work to other employees.

c) Procedures for recruiting new employees, e.g. by showing the rates of pay.

d) Record of previous action taken regarding employees.

e) Statistics which check and guide personnel policies.

f) Information regarding legal requirements and how to comply with them.

Personnel Research
Research activities are an essential function of HR personnel. Research is done with the aim of
obtaining personnel specific information in order to develop programs that work for an organization.
Planning and reviewing are vital. Areas, such as recruitment, employee turnover, training, and
terminations are all important areas to be researched. Employee opinions are also very important and
can be obtained through surveys about wages, promotions, welfare services, conditions, job security
and the like.

Even though research is so important, many companies neglect it because personnel people are too
busy dealing with other more immediate problems.

Research is not done to deal with problems but to prevent them from occurring in the first place. The
responsibility for research lies initially with the HR department but line supervisors and executives at
all levels of management should assist. Trade unions and other organizations can give some assistance
also and it should be made use of.

HR functions also include managing change, introducing new technology, innovation and diversity.
Regular social audits of HR functions are necessary because of the large role HR plays within any
organization. HR’s ultimate goal is to provide a link between the organization and the employees
because the organization needs employees’ commitment. Employees need to be made aware of things
like sales growth, restructuring plans, sharp price movements and any challenges facing the country
and their organization in particular. This can be done by videos, films, lectures and booklets.

The main responsibilities of a human resource manager are:

– To fully develop knowledge of corporate culture, plans and policies.

– To initiate change where necessary and act as a facilitator.

– To actively participate in formulating company strategy.

– To be a consultant to change.

– To ensure communication remains open between the HR department and individuals and groups
inside and outside the organization.

– To identify and advance HR strategies that match the company’s business strategy.

– To develop particular organizational teams and assist in the effective working relationships between
the teams and individuals.

– To ensure the organization’s goals are achieved by effective co-operation of employees.

– To identify any problems, particularly in the HR area, and to find effective solutions.

– To contribute to the co-ordination and support services for HRD programs.

– To assess the effectiveness of HRD programs and to do research in order to find out how the HRD
has affected (improved or otherwise) individual or organizational performance.

Pat McLagan is an award-winning author, speaker and coach of leadership development and
management. She has identified nine new roles of HR.

1. To bring the issues and trends concerning an organization’s external and internal people to the
attention of decision-makers, and to recommend long-term strategies to support organizational
excellence and endurance.
2. To design and prepare HR systems and actions for implementation so that they can produce
maximum impact on organizational performance and development.
3. To facilitate the development and implementation of strategies for transforming one’s own
organization by pursuing values and visions.
4. To create the smoothest flow of products and services to customers; to ensure the best and
most flexible use of resources and competencies; and to create commitment among the people
who help us to meet customers’ needs whether those people work directly for the organization or
not.
5. To identify learning needs and then design and develop structured learning programs and
materials to help accelerate learning for individuals and groups.
6. To help individuals and groups work in new situations and to expand and change their views so
that people in power can participate in leadership.
7. To help people assess their competencies, values, and goals so that they can identify, plan, and
implement development actions.
8. To assist individuals to add value in the workplace and to focus on the interventions and
interpersonal skills for helping people change and sustain change.
9. To assess HRD practices and programs and their impact and to communicate results so that the
organization and its people accelerate their change and development.
In recent years, Human Resource Management has received increasing attention. Its importance has
been recognized and its role has changed from the traditional personnel management role to a more
human resource management role.