2. Chapter two introduction to Human resource
- 1. Chapter Two: Human Resource Management Environments Chapter outline: – The external environment – The internal environment – Human resource management model 08/27/24 By: Getnet Z. 1-1
- 2. Introduction • Human Resource Management cannot take place in isolation from the external and internal environment. • The functions of Human resources are executed on permeable systems. • These environments affect the human resource functions, These environments affect the human resource functions, and shape the policies and practices of human resource and shape the policies and practices of human resource management management. . • Today HRM is much more integrated into both the management and the strategic planning process of the organization. 08/27/24 By: Getnet Z. 1-2
- 3. I. External Environment • External environment is the environment that exists outside the organization. • They influence the organizational performance but largely beyond management’s control. • It provides opportunities and threats opportunities and threats to the organization and human resource management. • It usually includes the broad external environment, namely, Political /Legal, Economic, Socio-Cultural and Technological (PEST) environments. 08/27/24 By: Getnet Z. 1-3
- 4. 1. Political /Legal Factors • The Political system Political system, such as, democratic or not, nature of the government and favouring the employee over the employer, affects the human resource functions of an organization. • Government through the enforcement of different laws also has direct and immediate impact direct and immediate impact on HRM on HRM function function. • Government made different laws that regulate relationship relationship between employer and employees including issues, such as equal employment opportunity (EEO), employment opportunity (EEO), affirmative action, safety and health, wages and salaries, affirmative action, safety and health, wages and salaries, hours of work, etc. hours of work, etc. 08/27/24 By: Getnet Z. 1-4
- 5. 1. Political /Legal Factors • Equal Employment Opportunity: Government laws require providing applicants an equal opportunity for employment with regard to race, religion, sex, disability, age or national origin. There should not be discrimination during recruitment and selection of candidates employees. • Affirmative Action: Affirmative Action is taken for the purpose of eliminating the present effects of the past discrimination. It is the practice of recruiting, hiring or staffing under-represented groups or minorities, such as women, disability, and the disadvantaged groups of the society. 08/27/24 By: Getnet Z. 1-5
- 6. 1. Political /Legal Factors • Government passes legislations that will enforce the employee’s safety and health. • Government may set minimum level of wages and set minimum level of wages and salaries, equal pay for equal work, hours of work, salaries, equal pay for equal work, hours of work, holiday, leaves, etc holiday, leaves, etc • The surge of government regulations and laws has placed a tremendous burden on human resource managers 08/27/24 By: Getnet Z. . 1-6
- 7. 2. Economic Factors • Economic parameter like GNP, per capital income, an employment rate, inflation rate, etc affects HRM. • If the economy is booming booming and unemployment rate is low, it may be harder to acquire and retain the harder to acquire and retain the staff. staff. • In times of economic decline economic decline, unemployment rate increases and a greater choice of labor is available to the employer 08/27/24 By: Getnet Z. 1-7
- 8. 3. Socio-Cultural Factors • These factors are created by the society on human resource management, such as demographic factors and culture. • Demographic factors describe the composition composition of the workforce, such as age, sex, race age, sex, race, and language. language. • Culture is the belief and custom (religion) of the society. • It affects the attitude and activities of workers. • HR managers need to understand the culture and society need to understand the culture and society from which their employees are recruited. 08/27/24 By: Getnet Z. 1-8
- 9. 4. Technological Factors • The world has never before seen technological changes occur as rapidly as they are today. • Technologies have an impact on HRM by changing the entire working methods and systems. • Technological change will continue to shift shift employment from some occupations to others, employment from some occupations to others, i.e., labor-intensive and clerical jobs will decrease labor-intensive and clerical jobs will decrease while technical, managerial, and professional jobs while technical, managerial, and professional jobs will increase will increase 08/27/24 By: Getnet Z. . 1-9
- 10. II. Internal Environment • An internal environment is the environment that exists inside the organization. • It contributes to the strength and weakness strength and weakness of the organization. • There are a number of internal factors affecting HR Managers work. Some of them are: • HR department as it interact with other HR department as it interact with other departments departments 08/27/24 By: Getnet Z. 1-10
- 11. II. Internal Environment • Strategy of an organization: Organizations have several strategies (goals and objectives), such as growth ), such as growth strategy, survival strategy or exit strategy strategy, survival strategy or exit strategy. . • Leadership style of the organization: Leadership styles practiced by top management and supervisors will affect the relationship relationship between supervisors and subordinates. • The style of leadership might be autocratic, democratic or autocratic, democratic or laissez-faire laissez-faire. • Leadership styles adopted in an organization influences human resource functions. 08/27/24 By: Getnet Z. . 1-11
- 12. II. Internal Environment • Nature of the task: The type of the task to be performed in an organization highly affects human resource management. • This is because some jobs can attract or retain workers, while others might be the causes of high labor turnover. • The elements of the nature of the task include: Degree of physical exertion, Working environment, Physical location, Degree of human interaction 08/27/24 By: Getnet Z. 1-12
- 13. © 2008 by Prentice Hall 1-13 Summary of Human Resource Management Environment EXTERNAL ENVIRONMENT INTERNAL ENVIRONMENT 1 Human Resource Management Other Functional Areas Operations Marketing Finance Legal Considerations Economy Technology Society Shareholders Unions Customers Competition Labor Market Directing C o n r o l l i n g Staffing P l a n n i n g Organizing Unanticipated Events
- 14. The Steps in Dealing Environmental Challenges 08/27/24 By: Getnet Z. . 1-14
- 15. 1. Monitor the environment • Human resource managers must be always informed about new changes in the environment. • They can scan the environment scan the environment through professional associations, attendance of seminars, furthering their formal education, reading newspaper and magazines, and browsing the internet. 08/27/24 By: Getnet Z. 1-15
- 16. 2. Evaluate the impact • After human resource managers acquire new information about changes in the environment, they should analyze and evaluate the impact of the environment on the organization’s human resource management 08/27/24 BY: Getnet Z. 1-16
- 17. 3. Take proactive measures • Once the impacts of environmental changes are evaluated, human resource managers implement approaches that help the organization to reach its goals by the aid of human resources. • Note that, there are two opposite approaches of human resource management, reactive and proactive. 08/27/24 By: Getnet Z. 1-17
- 18. 3. Take proactive measures • Reactive human resource management occurs when decision makers respond to human resource problems, i.e., after the actual problem happens. • Proactive approach of human resource management anticipated human resource problems and correction action begins before the problem arises. • To give effective and efficient solutions to human resource problems, human resource managers should take proactive measures 08/27/24 BY: Getnet Z. 1-18
- 19. 4. Obtain and analyze feedback • The results of proactive measures taken by the HR manager are evaluated to see if the desired outcomes are achieved. 08/27/24 BY; Getnet Z. . 1-19
- 20. The End Thank You! 08/27/24 BY; Getnet Z. 1-20