Module I

THE NATURE AND FUNCTIONS OF HUMAN

RESOURCE MANAGEMENT

Scope of the Module

This module consists of three lessons, namely:
Lesson 1. Views, Concepts and Development of Human Resource
Management
Lesson 2. Functions and Organization of the Human Resource Management
Lesson 3. The Human Resource Management Program, Policies and
Procedures

Overview of the Module

This module is designed to provide you with the views, concepts and development of
Human Resource Management. Likewise, it discusses the functions and organization of
the Human Resource Management as well as its program, policies and procedures.

Objectives of the Module

After studying this module on the nature and functions of human resource
management, you shall be able to:
1. define human resources and human resource management;
2. trace the development of human resource management;
3. cite the functions of the human resource management; and
4. identify the organization, program, policies and procedures of the human
resource management.

Management 3 / BAC 105 – Human Resource Management

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Management 3 / BAC 105
Module I
Lesson 1. VIEWS, CONCEPTS AND DEVELOPMENT OF HUMAN RESOURCE
MANAGEMENT

“The primary objective of any organization is to utilize its human

resources to the optimum extent feasible.”
Tomas D. Andres
Author

Lesson Objectives:
After studying this lesson on the views, concepts and development of human
resource management, you shall be able to:
1. recognize the value of human resources in the organization;
2. define human resources and human resource management; and
3. identify the development of human resource management.

INTRODUCTION

This whole course is about the people who work in an organization and their
relationship with that organization. Different terms are used in describing these people:
employees, associates, personnel, workers, human resources. Often they are used
interchangeably.
In this course, we take the expanded idea of personnel which is human resources.
The use of human resources as a term in lieu of personnel has gained widespread
acceptance over the last decade because it expresses the belief that workers are a
valuable and sometimes irreplaceable resource. Moreover, on the part of the company,
there is a deliberate use of human resources to help gain or maintain an edge against
its competitors in the marketplace.
Human resource practices contribute to the competitiveness of companies in many
ways. For example, they contribute to the delivery of the organization’s products and
services through (1) selecting employees who will be innovative, creative, and
successful in performing their jobs, (2) preparing employees to work with new
manufacturing and service technologies, and (3) rewarding good performance. Effective
Human Resource Management practices also contribute to both customer and
employee satisfaction and retention and the development of a favorable reputation in
the community in which the firm is located.

Management 3 / BAC 105 – Human Resource Management

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 THE NATURE OF HUMAN RESOURCE MANAGEMENT

The following figure illustrates the nature of Human Resource Management as it

relates to man as a human resource, to other resources such as physical, financial and
informational, and to management, in general.

Figure 1.1
Management, Human Resource Management and Other Resources:
A Distinct Relationship

Management is the process of achieving organizational objectives through efficient

and effective utilization of resources. Efficient refers to doing things right, to maximizing
the utilization of resources. Effective refers to doing the right thing in order to attain the
objective. The function of management may be grouped into planning, organizing,
leading and controlling. The resources available to management include human,
financial, physical and informational.
Human resources are people. People are the most valuable resources. Human
resource includes the total knowledge, skills, creative abilities, talents, and aptitudes of
an organization’s workforce, as well as the values, attitudes, and beliefs, of the
individual involved.
No organization can be effective without human resource management. Sadly,
however, it is one of the most misunderstood phases of modern business management.
Many companies do not have a clear idea of what Human Resource Management is
and the role it plays in the organization. Human Resource Management comprises the

Management 3 / BAC 105 – Human Resource Management

3
performance of all functions involved in planning for, recruiting and selecting,
developing, utilizing, and rewarding the human resources of an organization. Likewise, it
is concerned with securing and maintaining the right quantity and quality of people
needed for the firm to accomplish its purposes and objectives. Human Resource
Management aims to bring out the best in people so that both personal and corporate
goals may be achieved.

Development of Human Resource Management

Several changes are influencing the movement from traditional personnel
administration to Human Resource Management. Among these are the following.
1. The management’s changing concept of the individual. Modern management has
come to consider employees as reservoirs of talents and skills.
2. The employees’ changing attitudes and expectations about work. Studies indicate
that employees want to contribute to the organization’s success as they find self-
fulfillment in their jobs and opportunities for personal development.
3. The changing structure of the workforce. The composition of the labor force is such
that knowledgeable workers are joining it because of the changed technology and
the rising level of required education.
4. The external pressures on organizations affecting employment policies. Changes in
labor laws, automated manufacturing in many companies, demand for better
management techniques, and the new breed of human resource managers all
influence the organization resulting in new approaches in managing human
resources.

Definitions of Human Resource Management:

Human Resource Management has been defined as the function or unit in organizations that
facilitates the most effective utilization of human resources to achieve the objectives of both the
organization and the employees.
Ivancevich, J. (2007)
Human Resource Management can be defined as the effective use of human resources in an
organization through the management of people-related activities. It is a central and strategic
organizational activity of increasing complexity and importance.
http://www.extension.harvard.edu/courses/ humanresourcemanagement (2014)
Human Resource Management can be defined as both “an art and a science.” HRM is both
the art of managing people by recourse to creative and innovative approaches; it is a science as
well because of the precision and rigorous application of theory that is required.
http://www.managementstudyguide (2014)
As outlined herein, the process of defining HRM leads us to two different definitions.
The first definition of HRM is the process of managing people in organizations in
Management 3 / BAC 105 – Human Resource Management
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a structured and thorough manner. This covers the fields of staffing (hiring people),
retention of people, pay and perks setting and management, performance management,
change management and taking care of exits from the company to round off the
activities.
The second definition of HRM encompasses the management of people in
organizations from a macro perspective i.e. managing people in the form of a
collective relationship between management and employees. This approach focuses on
the objectives and outcomes of the HRM function. What this means is that the HR
function in contemporary organizations is concerned with the notions of people
enabling, people development and a focus on making the “employment relationship”
fulfilling for both the management and employees.

Definitions of Human Resources

Human Resources (HR) is a term that is used in business to refer to the people who
work for a company or organization. It is also used to refer to the department of a
company that is responsible for managing those resources, such as hiring and training
new employees and overseeing the benefits and compensation packages provided to
all of the company's employees. This term was coined in the United States during the
1960s, when labor relations became a greater concern for U.S. businesses, and has
since spread around the world.
Human Resources (HR) is the department or support systems responsible for personnel
sourcing and hiring, applicant tracking, skills development and tracking, benefits administration
and compliance with associated government regulations.
www.entrepreneur.com (2014)

Activities of Human Resource Management

According to Ivancevich, J. (2007), Human Resource Management (HRM) consists
of numerous activities, including:
1. Equal employment opportunity (EEO) compliance.
2. Job analysis.
3. Human resource planning.
4. Employee recruitment, selection, motivation, & orientation.
5. Performance evaluation and compensation.
6. Training and development.
7. Labor relations.
8. Safety, health and wellness.

Four Descriptions of Human Resource Management

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 The following four descriptions of the Human Resource Management (HRM) unit
should be stressed at the outset.
1. It is action-oriented. Effective Human Resource Management focuses on action
rather than on record keeping, written procedure, or rules. Certainly, HRM uses
rules, records and policies, but it stresses action. HRM emphasizes the solution of
employment problems to help achieve organizational objectives and facilitate
employees’ development and satisfaction.
2. It is people-oriented. Human Resource Management treats each employee as an
individual and offers services and programs to meet the individual’s needs.
McDonald’s, the fast-food chain, has gone so far as to give an executive the title
vice-president of individuality.
3. It is globally-oriented. Human Resource Management is a globally oriented
function or activity. It is being practiced efficiently and continuously in Mexico,
Poland, and Hongkong. Today, human resource management is being practiced
efficiently and continuously in the Philippines. Many organizations globally treat
people fairly, with respect, and with sensitivity.
4. It is future-oriented. Effective Human Resource Management is concerned with
helping an organization achieve its objectives in the future by providing for
competent, well-motivated employees. Therefore, human resources need to be
incorporated into an organization’s long-term strategic plans.

EVOLUTION OF CONCEPTS AND PRACTICES

OF HUMAN RESOURCE MANAGEMENT

As a concept and practice, Human Resource Management has undergone a long

evolution of concepts and practices. It may be traced from the medieval guilds in
Europe to the introduction of machines and equipment during the period of industrial
revolution, recognized in the scientific management period, and given emphasis in the
human relations movement. It is still undergoing improvements with the present type of
organizations today.

Guild System
The guild system was a practice during the medieval time in Europe. Guilds were
established in order to guarantee the members’ exclusive participation in business
activities that they applied for to engage in – whether for manufacturing, selling or
providing service. For one to become a member of the guild, he should undergo
apprenticeship in any field of his interest. For example, in shoemaking, one might spend
ten years of training in the craft before he can graduate in his apprenticeship.
An apprentice is a young person entrusted by his parents to a master craftsman,
who is the owner of a shop and is supposed to be skilled and expert on the trade he is
Management 3 / BAC 105 – Human Resource Management
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venturing in. The master craftsman gives to the apprentice free board and lodging so
that he can concentrate full time in the training sessions. If an apprentice is receptive
enough, and the master craftsman is satisfied with him, he may be able to finish his
apprenticeship in a minimum of four years. After finishing his training, he might put up
his own shop to be another master craftsman, if he has the necessary capital. If he is
not ready to do so, he might stay with his master craftsman for a few more years as an
artisan, where he will be given a fixed salary.
The employer-employee relationship existing in the shop system was very close and
cordial. Since there were only few people to supervise, the owner acted like a father or
a big brother to the artisan and apprentice under him.

Industrial Revolution
The Industrial Revolution brought significant changes to the degree of production
and state of human relations within organizations. With the introduction of machines and
equipment to make work easier came different machines and tools for factories and
offices. The factory system became popular. Employment in the cities attracted the
laborers in the field and farms, and mass production began. Under this set up where
hundreds or even thousands of workers were employed in one factory, labor disputes
arose. Considering that owners and managers of these factories were not yet familiar
with systems and principles, and considering that their primary interest was return on
investment, it was not surprising at all that employees felt discontented on how they
were being treated.
During this period, workers were treated like cogs in machines. They were told what
to do and if their performance was unsatisfactory, they could easily be replaced. They
worked sixteen hours per day without any substantial rest periods, and salaries were
barely enough for subsistence. On top of these, the workers were not treated like
human beings. There were no laws to safeguard the welfare of the working class.

Scientific Management
During this period, management, scientists and scholars like Frederick Taylor,
known as the “Father of Scientific Management”, introduced concepts and principles of
management. His book Shop Management opened the eyes of many managers on
applying cost analysis of jobs through time and motion studies. He initiated the bonus
and piece rate system of paying workers, the rest periods, what is considered at that
time as adequate compensation, and the equitable division of work between
management and workers. Above all, he emphasized the use of machines, tools,
equipment and methods to make work easier with the least effort exerted and time
spent. These are characteristics of scientific management.
There are many followers of Taylor like Henry Gantt, Frank and Lilian Gilbreth. One
notable contemporary of Taylor was Henri Fayol, who is known as the “Father of the
Management 3 / BAC 105 – Human Resource Management
7
Modern Classical Management Theory.”
With the introduction of these principles of management, the workers were relieved
of some difficulties of manual labor. But the inhuman treatment of managers was still
practiced and it affected the workers’ morale.

Human Relations Movement

This period is associated with the researches and studies conducted by Elton Mayo,
F. J. Roethlisberger and William Dickson Jr. called the Hawthorne Experiment. This
study influenced the management thinking along lines of human relations. One
emphasis made in this study was, since industrialization removed the personal contact
between management and workers, management should permit or organize small
groups to provide face to face association, as well as to provide a venue for complaints
and grievance. Through seminars and formal studies conducted by the proponents of
this movement, many managers realized the importance of involving employees in the
formulation of policies to be assured of the latter’s wholehearted support in their
implementation.
As an offshoot of the human relations movement, some researches trained in the
social sciences and led by Kurt Lewin, developed the application of the behavioral
sciences to solve management problems. Principles of group dynamics, manpower
development system model, self-development, group interaction skills, transactional
analysis, team building, administrative value analysis, personalized time management
strategy, job enrichment and job enlargement were introduced to bring management
and workers closer to one another in the organizational set up.

Practitioners of Human Resource Management

There is a fundamental change in jobs, careers and the whole experience of
employment in the last ten years. Organizations are becoming smaller and less reliable.
There is de-layering, down-sizing, right-sizing and outplacement, core/periphery
workforces, subcontracting and temporary contracts, a growth in self-employment and
part-time working. The organization as an entity is going out of fashion and the above
terms describe the process of keeping the business as small as possible and the jobs
within the business as flexible, if not as insecure, as possible. Because of this
development, human resource management is experiencing the biggest change in its
history.
Human resource management today has several different aspects within it. As the
function has evolved, it has added new dimensions without ever shedding those
developed in earlier periods like its concern for employee welfare. The concept of
human resource management which took the management world by storm during the
1980s represented a significant change of direction. The difference between Personnel
Management and Human Resource Management remains largely a matter of opinion,
Management 3 / BAC 105 – Human Resource Management
8
as their similarities are much greater than the differences. To put it in one sentence,
personnel management is essentially “workforce” centered whereas human
resource management is “resource” centered. The key difference is HRM in recent
times is about fulfilling management objectives of providing and deploying people and a
greater emphasis on planning, monitoring and control.
Personnel Management is directed mainly at the organization’s employees, finding
and training them, arranging for them to be paid, explaining management’s actions,
satisfying employees’ work-related needs, dealing with their problems and seeking to
modify management action that could produce unwelcome employees’ responses.
Human Resource Management is directed mainly at management needs for human
resources to be provided and deployed. Problem-solving is undertaken with other
members of management on human resource issues rather than directly with
employees or their representatives. In both Personnel Management and Human
Resource Management is the belief that people have a right to proper treatment as
dignified human beings while at work, that they are only effective as employees when
their job-related needs are met within a context of efficient management and a mutually
respectful working relationship. The use of the combined terms, Personnel/Human
Resource Management, is intended to capture their commonalities rather than their
differences.

Management 3 / BAC 105 – Human Resource Management

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Management 3 / BAC 105
Module I, Lesson 1
SELF-PROGRESS CHECK TEST

I. Multiple Choice.
_____ 1. Personnel/Human resource management began at the start of the
a. industrial revolution
b. creation of personnel department
c. medieval guilds
_____ 2. The process of achieving organizational objectives through efficient and
effective utilization of resources is
a. personnel management
b. human resource management
c. management
_____ 3. Human resource management aims to bring out the best people in order
to achieve
a. corporate goals
b. personal & corporate goals
c. personal goals
_____ 4. Human resource includes
a. informational resource
b. financial resource
c. knowledge, skills and abilities
_____ 5. The application of the behavioral sciences to solve management problems
was developed during the
a. human relations movement
b. Industrial revolution
c. Scientific management period

Management 3 / BAC 105 – Human Resource Management

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II. Modified True or False.
On the blank before each number, write True if the statement is correct; if False, change
the underlined word/group of words to make the statement correct.
_____ 1. Human Resource Management has been defined as the function or unit in
organizations that facilitates the most effective utilization of human
resources to achieve the objectives of both the organization and the
employees.
_____ 2. Personnel Management is directed mainly at the organization’s
employees, finding and training them, arranging for them to be paid,
explaining management’s actions, satisfying employees’ work-related
needs, dealing with their problems and seeking to modify management
action that could produce unwelcome employees’ responses.Find
_____ 3. Henry Gantt is known as the “Father of Scientific Management.”
_____ 4. The use of the combined terms, Personnel/Human Resource
Management, is intended to capture their commonalities rather than their
differences.
_____ 5. Human Resource Management is “workforce” centered.

Management 3 / BAC 105 – Human Resource Management

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Management 3 / BAC 105
Module I
Lesson 2. FUNCTIONS AND ORGANIZATION OF THE HUMAN RESOURCE
MANAGEMENT

“Programs don’t make quality products, people do.”

John Peterman
Owner, the J. Peterman Company

Lesson Objectives:
After studying this lesson on the functions and organization of the human resource
management, you shall be able to:
1. identify the cause and effect relationship between human resource utilization
and company productivity;
2. distinguish line authority, staff authority and functional authority;
3. determine the factors that influence the scope and application of human
resource management functions; and
4. enumerate the steps in organizing a human resource management
department.

INTRODUCTION

Human Resource Management, as a corporate challenge, moves from the traditional

through necessary function of maintaining harmonious relationships between
employees and management, into a role that supports organizational goals and also
individual employees aspirations.
Human Resource managers are responsible for the efficient utilization of human
resources. This places them in an important position relative to top management.
The following statements show the cause and effect relationship between the
utilization of human resources and productivity of an organization, and the derived
employee satisfaction.
1. An organization’s performance and resulting productivity are directly proportional to
the quantity and quality of its human resources.
2. While employee performance must be evaluated in economic terms of efficiency and
effectiveness, it can be best achieved through recognizing and enhancing the
human dignity of each employee.
3. The quantity and quality of human resources can be effectively increase through
education, training and personnel development.

Management 3 / BAC 105 – Human Resource Management

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 HUMAN RESOURCE MANAGEMENT IN THE CORPORATE ORGANIZATION

The following diagram (Figure 2) exposes the importance of Human Resource

Management in the corporate organization. That is, as a basis for performing all
personnel functions.

Figure 2.
Human Resource Management and the Corporate Organization

Management 3 / BAC 105 – Human Resource Management

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Defining the Human Resource Management (HRM) Department’s Functions
There are certain basic functions all managers perform: planning, organizing,
directing, and controlling.
Planning involves determination in advance of programs. It makes use of objectives,
policies, rules, procedures, and budget, to assure its accomplishment.
Organizing refers to designing and arranging relationships among jobs, personnel,
and physical factors. It is through organization that objectives or goals can be
accomplished.
Directing refers to getting employees to work willingly and enthusiastically. This
needs a lot of motivation, leadership and communication to get the cooperation of
employees towards efficiency and effectiveness.
Controlling consists of regulating activities in accordance with the plan. It involves
budgeting of time, money and effort to attain the plan. It requires supervision and
guidance in the actual performance of the work and if errors occur, corrective action
must be taken.

Types of Authority in Organizations

There are three types of authority in organizations: line, staff, and functional.
 Line authority consists of the right or power to issue orders to subordinate
personnel and to take disciplinary action against them for the violations of
these orders or for other just cause. It can be exercised only over
subordinates in the chain of command and not horizontally over persons in
other departments of the structure.
 Staff authority actually is not authority at all in the strict sense of the word
because it does not provide any specific right to direct, issue orders, or to
discipline others. Instead, it involves merely the capacity to provide
assistance, advice or service to others.
 Functional authority involves the right to issue orders that pertain to the
performance of a particular function but it is not as binding as line authority
since it does not carry the right to discipline others in order to enforce
compliance. It may be exercised over individuals throughout the
organizational structure.
The Human Resource Manager with his department carries out these three
authorities through these main functions. First, he exerts line authority in his own unit
and implied authority elsewhere in the organization. He exerts functional, coordinative
authority to ensure that the personnel objectives and policies of the organization are
coordinated and carried out. He provides various staff services to line managers such
as assisting them in personnel hiring, training, evaluating, rewarding, promoting and
imposing discipline on employees in all levels.
Management 3 / BAC 105 – Human Resource Management
14
 There are two conceptual approaches to the human resource function. One
approach reflects an attitude that the human resource function must rely on formal
organization authority to be effective. This approach involves heavy administration of
traditional service areas such as salary administration, benefits, policy, etc. The second
approach is based on the concept that authority is derived from competence and the
influence developed through successfully assisting fellow managers. The second
approach reflects the fact that responsibility for human resources is dispersed
throughout the entire organization.
The Human Resource Department’s job is to serve management, not employees. In
turn, employees are served best when managers grasp what they themselves can do to
further their goal of successful operations, perhaps by improving the work place,
communication, job design, and relationships with employees. Human Resource
Management should help managers to incorporate concern for employees into
operating plans, not to do these for them. Human Resource function should invest
heavily in the development of expertise in areas of managerial concern such as benefit
administration, labor law and negotiation, salary surveys and job classification, safety
laws, performance appraisal systems, training needs analysis, employment law,
screening and testing.
In order to make sound contributions to organization decisions, human resource
people need to develop expertise that managers will find useful in achieving worker
motivation and productivity, organization structure, and managerial performance.
Human resource people should deal in trends versus individual cases. Let us say,
human resource people show line managers that a sick leave problem is part of a
bigger pattern, or that the boss’ incompetence at handling a case is just one symptom of
general poor performance. Human resource people should base advice on research
and evaluation, rather than on opinions.

Scope and Application of HRM Functions

The scope and application of Human Resource Management functions vary with the:
1. size of the firm
2. nature of the business or industry
3. complexity of operations
4. qualifications of the personnel staff
5. attitude and support of top management
6. the company’s relation with the union
7. state of the labor market
8. prevailing economic conditions in the area
9. presence or absence of competition

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Major Responsibilities of HRD
The following are the Major Responsibilities of Human Resource Department:
1. Developing and administering human resource policies and programs.
2. Assisting line management in measuring the level of morale and taking steps
to improve situations which lead to employee dissatisfaction. The human
resource people provide assistance to line management in dealing with
human resource problems through
a. employment recruitment, selection, hiring and placement
b. determination of skills available in the work group
c. employee counseling
d. employee benefits and services
e. medical and hospitalization facilities
f. safety rules and accident prevention
g. employee suggestion system
h. labor relations problems.
3. Evaluating Human Resource Performance in the following areas:
a. merit rating
b. employee opinion service
c. study and analysis of statistical data related to personnel.
4. Coordinating Personnel Activities. The Human Resource Department
undertakes or shares operational responsibility for interdepartmental
programs in personnel areas where coordination can be best achieved by
some degree of centralized administration. Such areas include:
a. employment-recruitment, selection, hiring, placement and separation
from the service
b. training of supervisors and employees
c. fringe benefits
d. wage and salary administration-setting salaries and wage rates
e. health and safety-including accident prevention and the promotion of
good health among personnel
f. miscellaneous employee services.
5. Job Evaluation and Classification and Salary Administration. The Human
Resource Department evaluates the jobs in the firm through job analysis and
job evaluation. It recommends classifying of jobs and establishing a sound
wage and salary structure. It then administers the firm’s policies governing
wages and salaries. It aids labor relations people in handling wage disputes.
It incorporates such concepts as fringe benefits, commissions, bonuses,
profit-sharing, and other forms of employee remuneration.

Management 3 / BAC 105 – Human Resource Management

16
 6. Forecasting. Forecasting is the use of historic data to determine the direction
of future trends. It is used by companies to determine how to allocate their
budgets for an upcoming period of time.
http://www.investopedia.com/terms/f/forecasting (2014)
This denotes predictions of phenomena which may affect business plans.
Careful forecasting helps executives select the right objectives and chart the
routes of progress.
7. Programming. This is a recent development that consists of detailed planning.
A program is an explicit statement of steps to be taken toward an objective. In
developing a program, the Human Resource Department must anticipate the
what, who, how, and when of action.
8. Scheduling. According to Lansburgh, R. & Spriegel, W., Scheduling involves
establishing the amount of work to be done and the time each element of the
work will start, or the order of work.
http://kalyan-city.blogspot.com/ (2014)
In scheduling, detailed schedules are needed so that objectives will be met at
their proper deadlines.
9. Budgeting. Budgeting is establishing a planned level of expenditures, usually
at a fairly, detailed level. A company may plan and maintain a budget on
either an accrual or a cash basis.
http://www.entrepreneur.com/../budgeting (2014)
Budgeting is the process of preparing a detailed statement of financial results
that are expected for a given time period in the future.
http://www.bizfinance.about.com (2014)
A budget is a device for both planning and controlling the activities within a
business for a given period of time. In order to arrive at the overall total
budget, each unit prepares its particular budget by requesting its subdivisions
to prepare their respective budgets.
10. Procedures. This responsibility of the personnel department means the
prescribed ways of doing something, or a standard method by which work is
performed. They provide a means of checking when expected events do not
occur and constitute an important part of the training of new employees.
11. Making intelligent use of human resources by creating more productive jobs.
More people may be employed by reducing the capital cost per worker, e. g.
rather than have three lines operating one shift, it should be one line
operating three shifts.
12. Proper planning and competent supervision. Vague planning with no clear
objectives, compounded with incompetent supervision will waste human
resources.
13. Training the workers adequately.
Management 3 / BAC 105 – Human Resource Management
17
 14. Being concerned with the health of the workers.
15. Providing recreational facilities and opportunities.
16. Structuring work assignments so that employees will find them at least
interesting and if possible, challenging.
17. Compensating the workers fairly and making certain that the fairness of the
compensation is not merely a unilateral judgment of the management.
18. Giving the workers an adequate sense of security.
Human Resource Management is dedicated to developing ways of bringing out the
best in people in work organizations so that they can contribute their utmost towards
corporate goals and at the same time enhance opportunities to achieve their personal
life goals.
The organization of the Human Resource Management Unit should fit the needs and
conditions within the company it is to serve. The size of the company, the geographic
location of its units, the nature of its operation, the caliber of its work force are some of
the factors in organizing the unit.

Steps in Organizing an HRD

The following steps may be taken in organizing a Human Resource Management
department.
1. Evaluate the present management system and organizational structure. There
are three basic types of structure around which the functions of an enterprise may
be organized. These three types include the functional, the line, and the line-and-
staff structures.
2. Ascertain the top management’s philosophy on human resources. Human
Resource Management philosophy is influenced by prior experiences, education and
background, corporate philosophy, changing environment, basic consumptions
about people and the need to motivate subordinates.
3. Gain top management’s support. It is essential that top management commitment
be obtained very early in the program. The company’s philosophy toward human
resources must be ascertained, and the availability of funds and other resources
required must be determined.
4. Determine functions. Write down the functions aimed at achieving the objectives of
the particular unit. These functions are embodied in the Human Resource
Management Program which must contain the activities of the Human Resource
Management Unit.
5. Prepare a functional chart. The functions of the unit are next grouped into separate
units such as recruitment, employment, etc. Draw the functional organization chart of
the department to show the mutual relationships of the units.
6. Write the job descriptions, job specifications, and job work performance
Management 3 / BAC 105 – Human Resource Management
18
 standards. Clearly define for each function or group of functions the duties to be
performed and the responsibilities of the job, and indicate the corresponding title for
each position. Indicate the duties involved in each position and the time to be spent
for each task to show its relative importance. Determine for each job the
qualifications of personnel needed and list these qualifications in the job
specification. Give titles or other identifying descriptions to each position or job.
7. Select the best qualified applicant for the job. Choose people on the basis of
their qualifications as indicated in the job description, job specification and job work
performance standard.
8. Train and develop the Human Resource staff. The Human Resource staff and
employees must be given orientation on company and department policies and
rules. They should be gradually trained in all Human Resource functions so as to
have a holistic approach to their job.
9. Assess the human resources management needs of the company. Design a
survey-questionnaire to assess the Human Resource Management needs of the
organization and obtain top management approval of the questionnaire, the
distribution procedures and the overall model of the assessment program.
10. Interact with management. The Human Resource Manager and his staff should
begin a series of discussions with top management, functional managers and
division managers. The end result of these joint deliberations is a statement of
human resources needs of each organizational element.
11. Design and formulate a total and comprehensive Human Resource Program
and Policies and prepare its budget. The Human Resource Manager and his staff
then translate the human resources needs into a Human Resource Management
(HRM) program and budget. The peso cost of the HRM program must be translated
into a proposed Human Resource budget.
12. Implement and administer the human resources program and policies.
13. Evaluate the effectiveness of the human resource systems and programs.
14. Undertake improvements based on the evaluation.

Management 3 / BAC 105 – Human Resource Management

19
Management 3 / BAC 105
Module I, Lesson 2
SELF-PROGRESS CHECK TEST

Matching Type.
COLUMN A COLUMN B

_____ 1. They are responsible for the efficient utilization a. Controlling

of human resources. b. Directing
_____ 2. It involves determination in advance of c. Financial Managers
programs. d. Forecasting
_____ 3. This involves establishing the amount of work e. Human Resources
to be done and the time each element of the
f. Human Resource
work will start, or the order of work.
Managers
_____ 4. The use of historic data to determine the
g. Line Authority
direction of future trends. It denotes predictions
h. Marketing Managers
of phenomena which may affect business
plans. i. Planning
_____ 5. The prescribed ways of doing something, or a j. Procedures
standard method by which work is performed. k. Program
_____ 6. An explicit statement of steps to be taken l. Scheduling
toward an objective. m. Staff Authority
_____ 7. It consists of regulating activities in accordance
with the plan.
_____ 8. It is a managerial function of getting employees
to work willingly and enthusiastically.
_____ 9. The authority that involves the capacity to
provide assistance, advice or service to others.
_____ 10. Their quantity and quality can be effectively
increased through education, training and
personal development.

Management 3 / BAC 105 – Human Resource Management

20
Management 3 / BAC 105
Module I
Lesson 3. THE HUMAN RESOURCE MANAGEMENT PROGRAM, POLICIES
AND PROCEDURES

“Employees will be more receptive to formal, organization-wide

programs if they believe that the company really cares about them on a
personal, day-to-day basis.”
Rosalind Jefferies, Rewards and Recognition Consultant

Lesson Objectives:
After studying this lesson on the human resource management program, policies
and procedures, you shall be able to:
1. identify the coverage of a Human Resource Management Program;
2. determine the organization’s Human Resource objectives;
3. explain the important guides for creating effective policies; and
4. recognize the success of a Human Resource Management Program.

Good human resources management depends upon forming and implementing

sound programs. A good Human Resource Management Program should meet the
organization’s human resources needs in order to attain organizational objectives.

INTRODUCTION

A Human Resource Management Program consists of a series of activities intended

to carry out the human resources management policies of the organization in order to
realize the objectives of the company. A Human Resource Management Program
defines (1) the objectives, (2) the policies and procedures, and (3) the means of
carrying out the varied human resources management functions. It prescribes a step-
by-step procedure in carrying out the objectives of the organization.
Since human resource management is utilized on all levels, it permeates the whole
organization. A well-planned human resource program achieves a good employer-
employee relationship and results in a more efficient business operations. It is an
instrument for promoting company-wide harmony in human resource management
relations; hence, its objectives must be preventive rather than curative.

Management 3 / BAC 105 – Human Resource Management

21
Human Resource Objectives
Human Resource objectives for any organization must include five points.
1. Provide stable employment, equitable compensation, desirable working
conditions, and opportunities for advancement of employees in return for their
skill, care, effort, dependability, and teamwork.
2. Provide a climate conducive to the development of each employee in
accordance with his needs, interests, desires, abilities, and willingness to take
on additional responsibility.
3. Manage the human resource to insure continuing vitality and growth of the
company in a while realizing a profit and providing opportunities for public
service.
4. Provide enlightened leadership to insure maximum work satisfaction for each
employee in a decentralized environment.
5. Define clearly for each individual the responsibilities of his position to enable
him to make his best contribution to overall organization goals.

Guidelines for Effective Human Resource Policy Formulation

A policy is a principle or protocol to guide decisions and achieve rational outcomes. It is a
statement or intent, and is implemented as a procedure.
http://en.wikipedia.org/wiki/Policy (2014)
Furthermore, policies are general guidelines that express limits within which action
should occur. A vital part of the human resources manager’s responsibility is to set
guideposts for line management in managing the human asset to issue consistency of
action by on managers relative to policies decided upon. They are formulated and
recommended for approval by the executive office so as to provide for equitable
treatment of all employees and to communicate top management’s major philosophy
value attitudes.
Among the most relevant human resource management policies are those relating to
compensation, vacations, holidays, fringe, benefits, severance, pay, promotions, and
education assistance.
Human resource policies are valuable in fixing definite objectives organization and in
providing strong coordinating influences that tend to hold the organization together
carefully developed policies are vital to the management of human resources because
each person is sensitive to any difference in the treatment as compared with others no
matter how slight. Policies promote uniformity of action and prevent conflicting
decisions. They tend to eliminate errors, red tape, and inconsistencies in action and
prevent unfairness in handling individual cases. Human resource policies give
employees a greater sense of security by enabling them to know what treatment to
Management 3 / BAC 105 – Human Resource Management
22
expect. Managers also can act with a greater degree of confidence in revolving
problems since they have a basis upon which to make and to defend their decisions.
Company policies are based on historical events, the present situation, or
anticipated future needs. They must be issued by top management, which is
responsible for making major policies that are by their nature company-wide in
application. Minor policies, better known as rules and procedures, are usually
formulated by minor executives or department managers and upon the professional
competency of its human resource staff to formulate and enforce policies that it may
approve. In formulating human resource policies, the personnel. Human Resource
Manager and his staff must ensure that this policies are compatible with current
business conditions, collective bargaining trends, and government regulations.
A policy may be formulated thus:
1. Top management may formulate and issue it. When the top executive is
presented with a problem, his decision becomes a policy.
2. Policy may also be formulated by a committee, the board of directors, or the
key men in the organization. When a problem calling for a policy decision
arises, the group meets to analyze the problem against criteria, values,
objectives, or other expected outcomes. The views of those at the meeting
are presented as clarifications, amendments, or possible solutions. They then
decide on what seems to be the best solution. If their decision is signed and
promulgated by the top executive, the statement automatically becomes a
policy which the subordinates are expected to follow.
3. Certain practices, procedures, actions, and precedents that have been
consistently followed for some time, crystallize into policies.
4. Memoranda with which the top executive issues for the guidance of his
subordinates on certain matters can be sources of policy.
5. Administrative orders and procedures or contract specifications are called
imposed policy.
Human resource policies are usually formulated by the Human Resource managers,
and then submitted to top management for approval and release. The Human Resource
manager may, however, issue rules and procedures for implementing human resource
policies.
Policies put into formalized written statements are called policy statements. Human
Resource policy statements can be announced through Employee Handbooks,
Company Magazines or publications, memoranda and circulars, company bulletin
boards and meetings or conferences.
The following are important guides for creating effective policies.
1. Flexibility. A policy must strike a reasonable balance between stability and
flexibility. Conditions change and policies must change accordingly.

Management 3 / BAC 105 – Human Resource Management

23
 2. Comprehensiveness. A policy must be comprehensive enough to cover any
contingency. The degree of comprehensiveness depends upon the scope of
action controlled by the policy itself.
3. Coordinative. A policy must provide for coordination of the various sub-unit
whose actions may not be interrelated without exact coordinative direction
being provided.
4. Ethical. A policy must conform to ethical behavior which prevails in society.
5. Clarity. A policy must be written clearly and also logically. It must specify the
intended aim, define appropriate methods and delineate the limits of freedom
of action permitted to those who are to be guided by it.
The ultimate test of a policy is whether the intended objective is attained. If the policy
does not lead to the goal, it should be revised; thus policies must be subject to continual
reexamination.

Characteristics of Good Human Resource Policies

1. Policies should reflect objectives and plans or make objectives more attainable, it
has not done its job.
2. Policies should be consistent. An ineffective human resource program would surely
result if the wage and salary program is based upon both a policy of human resource
maximization and one of compensation’s minimization.
3. Policies should be flexible. If goals, premises, or major plans change, policies can
likewise be expected to changed to meet the new situations.
4. Policies should be distinguished from rules and procedures. The correct separation
of this three types of guidelines is admittedly difficult, but it is important to good
planning, workable delegation of authority, and even good human relations.
5. Policies should be in writing. The difficult of communicating intentions and desires is
reduced by precise communication in writing.
6. Policies should be taught. Written policies must be explained, interpreted, and
taught. Questions regarding policies must be answered and subordinates must
comprehend its goals and why they where developed.
7. Policies should be controlled. There should be a regular and careful review of
company policies to see whether they are up-to date, reflect goals and plans , are
consistent and flexible, and are understood.
8. Policies should be stable. If policies are to serve as guides to action, they should not
be changed frequently and careful study should go into formulating them.
9. Policies should be consistent within the company at all levels and departments.
10. Policies must be sincere. Policies are public announcements of the philosophy of the
company, thus, their wording should include real intentions.
11. Policies must be realistic. Present conditions must be considered if policy

Management 3 / BAC 105 – Human Resource Management

24
 statements are to be implemented.

Procedures
A procedure is a fixed, step-by-step sequence of activities or course of action with definite
start and end.
http://www.businessdictionary.com (2014)
A procedure is a series of actions that are done in certain way or order: an established or
accepted way of doing something.
http://www.merriam-webster.com/./procedure (2014)
Workable procedures must be established by the human resources manager in
order to ensure consistency. Each manager in the organization must learn all the
human resource procedures such as those regarding grievances, promotions, transfer,
or wage adjustments, in order to prevent oversights that might be detrimental to the best
interests of either the employee or the organization. However, procedures must not be
viewed as ends in themselves nor as excuses for failure to take leaded action. They
must be treated as means to an end.

Successful Human Resource Management Program

The success of the Human Resource Management Program can be measured by
the degree of employee satisfaction with their jobs, by their improve performance, by
the employees’ friendly attitude and respect for their employee and by the increase
competence and motivation of the worker.

Management 3 / BAC 105 – Human Resource Management

25
Management 3 / BAC 105
Module I, Lesson 3
SELF-PROGRESS CHECK TEST

I. Multiple Choice.
_____ 1. It is a principle or protocol to guide decisions and achieve rational
outcomes. It is a statement or intent, and is implemented as a procedure.
a. Policy
b. Procedure
c. Program
_____ 2. It is a fixed, step-by-step sequence of activities or course of action with
definite start and end.
a. Policy
b. Procedure
c. Program
_____ 3. A policy must conform to ethical behavior which prevails in society.
a. Clarity
b. Coordinative
c. Ethical
_____ 4. A policy must provide for coordination of the various sub-unit whose
actions may not be interrelated without exact coordinative direction being
provided.
a. Clarity
b. Coordinative
c. Ethical
_____ 5. A policy must be written clearly and also logically. It must specify the
intended aim, define appropriate methods and delineate the limits of
freedom of action permitted to those who are to be guided by it.
a. Clarity
b. Coordinative
c. Ethical

Management 3 / BAC 105 – Human Resource Management

26
II. Modified True or False.
On the blank before each number, write True if the statement is correct; if False, change
the underlined word/group of words to make the statement correct.
_____ 1. Company policies are based on historical events, the present situation, or
anticipated future needs. They must be issued by top management, which
is responsible for making major policies that are by their nature company-
wide in application.
_____ 2. Workable procedures must be established by the human resources
manager in order to ensure consistency.
_____ 3. A policy must strike a reasonable balance between stability and
comprehensiveness. Conditions change and policies must change
accordingly.
_____ 4. A policy must be comprehensive enough to cover any contingency. The
degree of flexibility depends upon the scope of action controlled by the
policy itself.
_____ 5. A Human Resource Management Program consists of a series of activities
intended to carry out the human resources management policies of the
organization in order to realize the objectives of the company.

Management 3 / BAC 105 – Human Resource Management

27
Management 3 / BAC 105
Module I
ANSWER KEYS TO THE SELF-PROGRESS CHECK TESTS

LESSON 1

A.
1. c 2. c 3. b 4. c 5. a
B.
1. True
2. True
3. False-Frederick Taylor
4. True
5. False- resource centered

LESSON 2

1. F 2. I 3. L 4. D 5. J 6. K 7. A 8. B 9. M 10. E

LESSON 3

A.
1. a 2. b 3. c 4b 5. a
B.
1. True
2. True
3. False-flexibility
4. False-degree of comprehensiveness
5. True

Management 3 / BAC 105 – Human Resource Management

28
 MANAGEMENT 3 / BAC 105:
Human Resource Management
Module Test I
Name: DLC: Score:

I. Multiple Choice. (10 points)

_____ 1. Personnel/Human resource management began at the start of the
a. industrial revolution
b. creation of personnel department
c. medieval guilds
d. scientific management period
_____ 2. The process of achieving organizational objectives through efficient and
effective utilization of resources is
a. personnel management
b. human resource management
c. career management
d. management
_____ 3. Human resource management aims to bring out the best people in order
to achieve
a. corporate goals
b. personal & corporate goals
c. personal goals
d. organizational goals
_____ 4. Human resource includes
a. attitudes
b. informational resource
c. financial resource
d. knowledge, skills and abilities
_____ 5. The application of the behavioral sciences to solve management problems
was developed during the
a. human relations movement
b. industrial revolution
c. scientific management period
d. medieval guilds

Management 3 / BAC 105 – Human Resource Management

29
_____ 6. It is a managerial function of getting employees to work willingly and
enthusiastically.
a. Planning
b. Organizing
c. Directing
d. Staffing
_____ 7. The use of historic data to determine the direction of future trends. It
denotes predictions of phenomena which may affect business plans.
a. Budgeting
b. Forecasting
c. Programming
d. Scheduling
_____ 8. This is a recent development that consists of detailed planning.
a. Budgeting
b. Forecasting
c. Programming
d. Scheduling
_____ 9. It is a principle or protocol to guide decisions and achieve rational
outcomes. It is a statement or intent, and is implemented as a procedure.
a. Policy
b. Procedure
c. Program
d. Rules
_____ 10. It is a fixed, step-by-step sequence of activities or course of action with
definite start and end.
a. Policy
b. Procedure
c. Program
d. Rules

Management 3 / BAC 105 – Human Resource Management

30
II. Matching Type. (20 points)
COLUMN A COLUMN B
_____ 1. A policy must be written clearly and also a. Budget
logically. It must specify the intended aim, b. Clarity
define appropriate methods and delineate the c. Coordinative
limits of freedom of action permitted to those
d. Degree of
who are to be guided by it.
Comprehensiveness
_____ 2. A policy must be comprehensive enough to
e. Ethical
cover any contingency.
f. Flexibility
_____ 3. A policy must strike a reasonable balance
g. Frederick Taylor
between stability and (___). Conditions change
and policies must change accordingly. h. Human Resource
Management
_____ 4. He was known as the “Father of Scientific
Management.” i. HRM Program
_____ 5. This involves the capacity to provide j. Organizing
assistance, advice or service to others. k. Size of the firm
_____ 6. It is a managerial function which refers to l. Staff authority
designing and arranging relationships among
jobs, personnel, and physical factors.
_____ 7. No organization can be effective without this.
_____ 8. This influences the scope and application of
the Human Resource Management functions.
_____ 9. It is a device for both planning and controlling
the activities within a business for a given
period of time.
_____ 10. It prescribes a step-by-step procedure in
carrying out the human resource objectives of
the organization.

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