Importance and Scope Of Human

Resource Management
VRIO Framework
HRD Concept and Process
Strategic HRM

Semester: 2
Section: B
Subject : Human Resource Management
Submited to: Prof. Abid

Submitted By:
RADHIKA GANDOTRA (45-MBA-16)
SAHIL SHARMA (49-MBA-16)
SATYA DEV SINGH (52-MBA-16)
TUSHAR GUPTA (65-MBA-16)
 VIDHU ARORA (68-MBA-16)
HUMAN RESOURCE MANAGEMENT

Definition 1 Integration
HRM is a series of integrated decisions that form the employment relationships; their quality
contributes to the ability of the organizations and the employees to achieve their objectives.

Definition 2 Influencing
HRM is concerned with the people dimensions in management. Since every organization is
made up of people, acquiring their services, developing their skills, motivating them to higher
levels of performance and ensuring that they continue to maintain their commitment to the
organization are essential to achieving organizational objectives. This is true, regardless of the
type of the organization government, business, education, health, recreational, or social
action.

Definition 3 Applicability
HRM planning, organizing, directing and controlling of the procurement, development,
compensation, integration, maintenance and separation of human resources to the end that
individual, organizational and social objectives are accomplished.

MEANING OF HRM: -
HRM is management function that helps managers to recruit, select, train and develop members
for an organization. Obviously HRM is concerned with the peoples dimensions in organizations.
HRM refers to set of programs, functions, and activities designed and carried out

Core elements of HRM

People: Organizations mean people. It is the people who staff and manage organizations.
Management: HRM involves application of management functions and principles for
acquisitioning, developing, maintaining and remunerating employees in organizations.
Integration & Consistency: Decisions regarding people must be integrated and
consistent.
 Influence: Decisions must influence the effectiveness of organization resulting into
betterment of services to customers in the form of high quality products supplied at reasonable
cost.
Applicability: HRM principles are applicable to business as well as non-business
organizations too, such as education, health, recreation and the like.

IMPORTANCE OF HUMAN RESOURCE MANAGEMENT

An organisation cannot build a good team of working professionals without good Human
Resources. The key functions of the Human Resources Management (HRM) team include
recruiting people, training them, performance appraisals, motivating employees as well as
workplace communication, workplace safety, and much more. The beneficial effects of these
functions are discussed here:

Recruitment and Training

This is one of the major responsibilities of the human resource team. The HR managers come up
with plans and strategies for hiring the right kind of people. They design the criteria which is best
suited for a specific job description. Their other tasks related to recruitment include formulating
the obligations of an employee and the scope of tasks assigned to him or her. Based on these two
factors, the contract of an employee with the company is prepared. When needed, they also
provide training to the employees according to the requirements of the organisation. Thus, the
staff members get the opportunity to sharpen their existing skills or develop specialised skills
which in turn, will help them to take up some new roles.

Performance Appraisals

HRM encourages the people working in an organisation, to work according to their potential and
gives them suggestions that can help them to bring about improvement in it. The team
communicates with the staff individually from time to time and provides all the necessary
information regarding their performances and also defines their respective roles. This is
beneficial as it enables them to form an outline of their anticipated goals in much clearer terms
and thereby, helps them execute the goals with best possible efforts. Performance appraisals,
when taken on a regular basis, motivate the employees.

Maintaining Work Atmosphere

This is a vital aspect of HRM because the performance of an individual in an organisation is

largely driven by the work atmosphere or work culture that prevails at the workplace. A good
working condition is one of the benefits that the employees can expect from an efficient human
resource team. A safe, clean and healthy environment can bring out the best in an employee. A
friendly atmosphere gives the staff members job satisfaction as well.

Managing Disputes

In an organisation, there are several issues on which disputes may arise between the employees
and the employers. You can say conflicts are almost inevitable. In such a scenario, it is the
human resource department which acts as a consultant and mediator to sort out those issues in an
effective manner. They first hear the grievances of the employees. Then they come up with
suitable solutions to sort them out. In other words, they take timely action and prevent things
from going out of hands.

Developing Public Relations

The responsibility of establishing good public relations lies with the HRM to a great extent. They
organise business meetings, seminars and various official gatherings on behalf of the company in
order to build up relationships with other business sectors. Sometimes, the HR department plays
an active role in preparing the business and marketing plans for the organisation too.

Any organisation, without a proper setup for HRM is bound to suffer from serious problems
while managing its regular activities. For this reason, today, companies must put a lot of effort
and energy into setting up a strong and effective HRM.
SCOPE OF HRM :

The scope of HRM is, indeed, very vast and wide. It includes all activities starting from
manpower planning till employee leaves the organisation. Accordingly, the scope of HRM
consists of acquisition, development, maintenance/retention, and control of human resources in
the organisation (see figure 1.1). The same forms the subject matter of HRM.

The National Institute of personnel Management, Calcutta has specified the scope of HRM
as follows:

1. The Labour or Personnel Aspect:

This is concerned with manpower planning, recruitment, selection, placement, transfer,

promotion, training and development, lay-off and retrenchment, remuneration, incentives,
productivity, etc.

2. Welfare Aspect:

It deals with working conditions, and amenities such as canteen, creches, rest and lunch rooms,
housing, transport, medical assistance, education, health and safety, recreation facilities, etc.

3. Industrial Relations Aspects:

This covers union-management relations, joint consultation, collective bargaining, grievance and
disciplinary actions, settlement of disputes, etc.

THE VRIO FRAMEWORK

It is said that the competitive advantage of a company rests on the heterogeneity of its resources,
which should differentiate a company.
VRIO, is an internal tool of analysis in the context of business management.
VRIO is an acronym for the four question framework you ask about a resource or capability to
determine its competitive potential: the question of Value, the question of Rarity, the question of
Imitability (Ease/Difficulty to Imitate), and the question of Organization (ability to exploit the
resource or capability).

Here is what a VRIO resource stands for:

Valuable.- First question to ask if the resource is valuable. If we own something that
nobody wants then probability is that resource is not valuable. They allow new
opportunities in the market?

Rare, unique or scarce - Specific to the company, difficult to buy / obtain in the market.
Rarity provides competitive advantage. E.G. Aircraft engine technology.

Inimitable.- difficult to copy by the competition. E.G. Drug industry patents provide
protection for few years but after that anyone can copy the drug formula and provide the
same drug to the market.
 Inmersed in the Organiztion of the company - Suitable organization is needed to support
a valuable, rare and difficult to immitate resource to ensure maximum benefit utilization
of such resource. They are carried out with other resources.

VRIO analysis stands for four questions that ask if a resource is: valuable? rare? costly to
imitate? And is a firm organized to capture the value of the resources? A resource or capability
that meets all four requirements can bring sustained competitive advantage for the company.

Valuable
The first question of the framework asks if a resource adds value by enabling a firm to exploit
opportunities or defend against threats. If the answer is yes, then a resource is considered
valuable. Resources are also valuable if they help organizations to increase the perceived
customer value. This is done by increasing differentiation or/and decreasing the price of the
product. The resources that cannot meet this condition, lead to competitive disadvantage. It is
important to continually review the value of the resources because constantly changing internal
or external conditions can make them less valuable or useless at all.

Rare
Resources that can only be acquired by one or very few companies are considered rare. Rare and
valuable resources grant temporary competitive advantage. On the other hand, the situation when
more than few companies have the same resource or uses the capability in the similar way, leads
to competitive parity. This is because firms can use identical resources to implement the same
strategies and no organization can achieve superior performance.

Even though competitive parity is not the desired position, a firm should not neglect the
resources that are valuable but common. Losing valuable resources and capabilities would hurt
an organization because they are essential for staying in the market.

Costly to Imitate
A resource is costly to imitate if other organizations that doesnt have it cant imitate, buy or
substitute it at a reasonable price. Imitation can occur in two ways: by directly imitating
(duplicating) the resource or providing the comparable product/service (substituting).

A firm that has valuable, rare and costly to imitate resources can (but not necessarily will)
achieve sustained competitive advantage. Barney has identified three reasons why resources can
be hard to imitate:

Historical conditions. Resources that were developed due to historical events or over a
long period usually are costly to imitate.

Causal ambiguity. Companies cant identify the particular resources that are the cause of
competitive advantage.

Social Complexity. The resources and capabilities that are based on companys culture or
interpersonal relationships.
Organized to Capture Value
The resources itself do not confer any advantage for a company if its not organized to capture
the value from them. A firm must organize its management systems, processes, policies,
organizational structure and culture to be able to fully realize the potential of its valuable, rare
and costly to imitate resources and capabilities. Only then the companies can achieve sustained
competitive advantage.

HUMAN RESOURCE DEVELOPMENT (HRD)

Human Resource Development is a process to help people to acquire competencies and to increase their
knowledge, skills and capabilities for better performance and higher productivity.

Definition 1:

HRD is a process of enhancing the physical, mental and emotional capacities of individuals for
productive work.

Definition 2:

HRD means to bring about the possibility of performance improvement and individual growth.

PROACTIVE HRD STRATEGIES FOR LONG TERM PLANNING AND GROWTH

Employee retention has become bigger challenge than employee hiring today. With trade unions
breathing their last, and easy job availability, employees have developed propensity to switch jobs for
minor reasons without voicing their protest. Thus, HRD has to take a proactive approach, that is, to seek
preventive care in human relations. By using HRD strategies, maximization of efficiency and
productivity could be achieved through qualitative growth of people.
Long-term growth can also be planned by creating highly inspired groups of employees with high
aspirations to diversify around core competencies and to build new organizational responses for coping
with change.

A proactive HRD strategy can implement plans directed at improving personal competence
and productive potentials of human resources.

Following strategic choices can be considered which would help todays organizations to
survive and grow.

Change Management: Manage change properly and become an effective change agent rather than
being a victim of change itself.

Values: Adopt proactive HRD measures, which encourage values of trust, autonomy, proactive approach
and experimentation.

Maximize Productivity and Efficiency: Maximize productivity and efficiency of the organization by
helping qualitative growth of people.

PROCESS OF HRD STRATEGIC PLANNING FOR LONG TERM GROWTH:

A strategic human resource planning helps the organization in achieving its overall objectives. This
approach involves creating and managing functions like staffing and services, based on the strategic
goals, eliminating any hurdles in the process. The process to be followed is explained in brief:

Understand the specific business objectives and their priorities, based on the overall strategic
objectives.
Understand the internal and external factors that might hinder objective achievement as the
organizational policies and procedures need to be changed accordingly.

Determine the responsibility and accountability for each objective. Also identify the internal
customer.

Identify the alternatives for achieving the business objectives.

Translate these business objectives into specific human resources policies and programs.

Determine the resources required to achieve these business objectives.

Analyze the impact on HR policies and programs, if each business objective is not achieved.

Assess each objective in terms of money and time required.

Identify where efficiencies can be achieved.

Determine the staffing requirements to meet the business objectives, including the level and
timing of staffing; employee competencies; the surplus and demands.
 STRATEGIC HUMAN RESOURCE MANAGEMENT
Strategy:
Strategy is a way of doing something. It includes the formulation of goals and set of action
plans for accomplishment of that goal.
Strategic Management:
A Process of formulating, implementing and evaluating business strategies to achieve
organizational objectives is called Strategic Management
Definition of Strategic Management: -
Strategic Management is that set of managerial decisions and actions that determine the long-
term performance of a corporation. It includes environmental scanning, strategy formulation,
strategy implementation and evaluation and control.
The study of strategic management therefore emphasizes monitoring and evaluating
environmental opportunities and threats in the light of a corporations strengths and weaknesses.

STEPS IN STRATEGIC MANAGEMENT

1. Environmental Scanning: Analyze the Opportunities and Threats in External
Environment
2. Strategy Formulation: Formulate Strategies to match Strengths and Weaknesses. It can
be done at Corporate level, Business Unit Level and Functional Level.
3. Strategy Implementation: Implement the Strategies
4. Evaluation & Control: Ensure the organizational objectives are met.
 IMPORTANCE & BENEFITS OF STRATEGIC MANAGEMENT
Allows identification, prioritization and exploration of opportunities.
Provides an objective view of management problems.
Represents framework for improved co-ordination and control
Minimizes the effects of adverse conditions and changes
Allows major decisions to better support established objectives
Allows more effective allocation of time and resources
Allows fewer resources and lesser time devoted to correcting ad hoc decisions
Creates framework for internal communication
Helps to integrate the individual behaviors
Provides basis for the clarification of responsibilities
Encourages forward thinking
Encourages favorable attitude towards change.
ROLE OF HRM IN STRATEGIC MANAGEMENT
Role in Strategy Formulation: HRM is in a unique position to supply competitive intelligence
that may be useful in strategy formulation. Details regarding advanced incentive plans used by
competitors, opinion survey data from employees, elicit information about customer complaints,
information about pending legislation etc. can be provided by HRM. Unique HR capabilities
serve as a driving force in strategy formulation.
Role in Strategy Implementation: HRM supplies the company with a competent and willing
workforce for executing strategies. It is important to remember that linking strategy and HRM
effectively requires more than selection from a series of practice choices. The challenge is to
develop a configuration of HR practice choices that help implement the organizations strategy
and enhance its competitiveness.