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Human Resource Management

Definition:
According to Invancevich and Glueck et al, Human Resource Management (HRM) is concerned with the most effective use of people to achieve organizational & individual goals. HRM is a strategic approach to the acquisition, motivation, development and management of the organizations human resources (Sharma, A.M.)

Human Resource Management


Features: Human Resource Management has the following features: q q Pervasive Force: HRM is pervasive in nature; it is present in all organizations & permeates at all levels of management in an organization. Action Oriented: HRM focuses attention on action, rather than on record keeping, written procedures or rules. The problems of the employees are solved through rational policies. Individual Oriented: HRM attempts to help the employees develop their potential & thereby encourages them to give their best to the organization. People Oriented: HRM is concerned about people at work, both as individuals, as well as in groups & teams. It aims to put people on assigned jobs in order to achieve desired performance levels. Development Oriented: It intends to develop the full potential of employees. Further the reward & incentive structures are also effectively utilized so as to encourage people for meeting their individual growth & development needs.

q
q q

Human Resource Management


q Integrating Mechanism: HRM tries to build & maintain cordial relations between people working at various levels of the organization & also forms the bridge between the other functional areas like marketing, finance etc. q Comprehensive Function: HRM, to some extent, is concerned with any organizational decision which has an impact on the workforce or the potential workforce (Bernardin et al). It involves a method of developing potentialities of employees so that they get maximum satisfaction out of their work & give their best efforts to the organization (Pigors & Myers). q Auxiliary Service: HR departments exist to assist & advise the line or operating managers to effectively accomplish their personnel work more effectively. q Inter-disciplinary Function: It is a multi-disciplinary activity, utilizing the knowledge & inputs drawn from psychology, sociology, anthropology, economics, etc. q Continuous Function: HRM is an ongoing process.

Human Resource Management


Scope of HRM: Human Resource Management has the following scopes, namely:

Prospect s of HRM

Nature of HRM

Employe e Hiring

Industrial Relations

HRM

Employee & Executive Remuneratio n

Employee Maintenance

Employee Motivation

Objectives of HRM

How are functions related to these objectives?

Human Resource Management


Objectives & Functions of HRM: Human Resource Management has the following objectives & functions, namely: q To enable the organization accomplish its goals & objectives To employ the skills & abilities of the workforce efficiently To provide the organization with well-trained & well-motivated employees. q To increase to the fullest, the employees Job Satisfaction & Selfactualization. To develop & maintain a Quality of Work Life (QWL). q To communicate HR policies to all employees effectively To help maintain ethical policies & behavior at the work place. q To maintain discipline & address employee grievance & dissatisfaction more promptly & effectively. To maintain a cordial relationship in between the employees at various levels with the management of the organization.

Human Resource Management


Human Resource Development (HRD): HRD means developing or trapping hidden qualities in people in order to make them accomplish new functions leading to organizational & individual goals. Objectives of HRD: To acquire or sharpen capabilities required to perform functions associated with the organizations present as well as expected future roles. To develop general capabilities of individuals & exploit their inner potential for their own and / or organizational development purposes. To develop an organizational culture where team work & collaboration contributing to the professional well being & motivation of the employees.

Human Resource Management


Human Resource Development (HRD):

Features of HRD: HRD as a system HRD as a planned process Involves the development competencies HRD is an inter-disciplinary concept
HR Mechanisms / Subsystems: Performance Appraisal & Potential Appraisal Career Planning & Succession Planning Training & development Organization Development Rewards, compensation & benefits Employee Welfare & QWL

Human Resource Management


Personnel Management:

It is defined as a set of programs, functions & activities designed to maximize both personal & organizational goals & objectives.

Personnel Management Personnel Aspect: Recruitment & Selection Training & Development Appraisal Compensation & Productivity Welfare Aspect: Working Conditions QWL Amenities & Facilities Benefits Entertainment Industrial Relations Aspect: Trade Union Management Dispute settlement Grievance handling Collective Bargaining

&

Human Resource Management


Features of Personnel Management: Concerned with employees both as individuals and as a group Responsible for the development of human resources Covers all levels & categories of employees It is a continuous process Aims to attain organizational, individual & societal goals. It is a responsibility of all Line managers & function of Staff managers

Human Resource Management


Functions of Personnel Management: A.Managerial: Planning, Organizing, Directing & Controlling B.Operative: Employment : (Job Analysis, HRP, Recruitment, Selection, Placement, Induction & Orientation) HRD: (Performance Appraisal, Training & Development, Career & Succession Planning, Organization Development) C.Compensation: Job Evaluation; Wage & salary Administration, Incentive, Bonus, Fringe Benefits management; Social security measures D.Human Relations: Employee Relations E.Managing effectiveness of HRM: Organization Health Organization Culture & Climate HR Accounting, Audit & Research

Human Resource Management


Personnel Policy (Advantages):
Delegation, Uniformity, better control, Standards of efficiency, confidence, speedy decision making, co-ordination. Characteristics of an effective Personnel Policy: Relatedness to objectives Preciseness Factual Easily understandable Stable & Flexible Appropriateness Just, fair & equitable Reasonable & Reviewable

Characteristics of High-Performance Work Systems


q
q q q Large number of highly qualified applicants for each strategic position. The use of validated selection & promotion models/procedures. Extensive training & development of new employees The use of formal performance appraisal & management

q The use of multi-source (360 degree) performance appraisal & feedback q q Linkage of merit increases to formal appraisal process Above-market compensation for key positions

q High percentage of entire workforce included into the incentive systems

Characteristics of High-Performance Work Systems


q
q q q q q

High differential in pay between high & low performers.


High percentage of Hr activities spent on outsourced activities (eg: recruiting, payroll etc). High percentage of workforce working in self-managed, projectbased work teams. Low percentage of employees covered by union contracts. Relatively low number of employees per HR professional. High percentage of jobs filled from within.

Human Resource Organization


What is Human Resource Organization: Human Resource Organization is concerned with achieving success by organization design & development, motivation, the application of effective leadership, and the process of getting across the message about what the enterprise is setting out to do & how it proposes to do it.
Objectives of the human resource organization: To ensure that every aspect of the organization, employment, motivation & management of people is integrated with the strategic objectives of the business & contribute to the successful achievement of those objectives.

Human Resource Organization

The two most important issues that are relevant for the organization of a HR department involves the following, namely: q Place of the HR department in the overall organizational setup. q Composition of the HR department itself.

Human Resource Organization


a) HRM in a Small-Scale Unit:
Owner/Manager

Production Manager

Sales Manager

Office Manager Personnel Assistant

Accountant Manager

b) HRM in a Large-Scale Unit:


Chairman/MD

Director Production

Director Finance

Director Personnel/HR

Director Marketing

Director R&D

c) Personnel Department in a Divisionalised Organizational Structure:


Chairman/MD

General Manager

Marketing Manager

Finance Manager

Production Manager

R&D Manager

HR Manager

Manager Southern Region

Manager Central Region

Manager Northern Region

Deputy Manager Marketing

Deputy Manager Production

Deputy Manager HR

Branch Manager Nagpur

Branch Manager New Delhi

Branch Manager Kolkata

Officer Marketing

Officer Production

Officer HR

d) Composition of a HR/Personnel Department:


HR DEPARTMENT

Manager Personnel

Manager Admin.

Manager HRD

Manager IR

Appraisal

Training & Development

PR

Canteen

Medical

Welfare

Transport

Legal

HRP

Hiring

Grievance Handling

Compensation

Qualities of a HR / Personnel Manager:


1. Fairness & firmness 2. Tact & resourcefulness 3. Sympathy & consideration 4. Knowledge of labor & other terms 5. Broad social outlook 6. Competence to perform activities relating to personnel better than his/her subordinates. 7. Academic & Professional qualifications

Role of a HR / Personnel Manager:


1 Advisory Role: advising, suggesting, counseling & helping people in discharging their responsibilities relating to grievance redressal, conflict resolution, employee selection, training etc.

2 The Conscience Role: To inform the management about the humanitarian approach-towards moral & ethical obligations to its employees.
3.Counselor Role: To discuss various problems of employees relating to career, supervisors, colleagues, health, family, financial, social etc & suggest means to minimize & overcome work stress. 4.Mediators Role: Resolving conflicts so as to effectively maintain industrial harmony.

5. Representative Role: To act as a representative of the organization so as to give an overall picture of the organizational operations to the employees particularly in case of industrial disputes or grievance redressal
.

Role of a HR / Personnel Manager:


6. Fire-Fighting/Legal Role: Grievance handling, settlement of disputes, handling disciplinary cases, collective bargaining, joint consultation, interpretation & implementation of various labor laws, contacting lawyers, handling industrial tribunals etc. 7. Welfare Role: To provide & maintain canteens, hospitals, educational institutes, office clubs, libraries, conveyance facilities, co-operative credit societies, consumer stores etc. 8. Problem-solver Role: To effectively handle this role regarding various short range & long range problems of the company involving the interests of human resources. 9. Role of Change Agent: To convince workers & the management & take the lead in implementing changes in technology, organization, production & installing the organization development techniques etc. 10. Decision-Making Role: To play a dominant role in the decision-making process, regarding both major & minor issues of the organization involving human resources. 11.Executive Role: Once decisions are taken HR manager plays a dominant role in executing those decisions & programs.

Human Resource Systems:


What are Human resource Systems: Human Resource Systems are the essential programs needed to recruit, appraise, pay & look after the health, safety & wellbeing of the employees in the organization. Characteristics of Human Resource Systems: Recruitment Management: Process of obtaining the required human resources for an organization. q Information Management: Method of ensuring that all policies & practices are to be well articulated & effectively communicated to the workforce. q Training Management: It is a system of identification of training needs, preparation of a training strategy and an appropriate training system. q

Characteristics of Human Resource Systems:


q Performance Management: It is a technique of appraising performance systematically against defined criteria, reviewing progress to date & assessing the potential for advancement. There are 3 main appraisal systems such as Performance Appraisal, Potential Appraisal & Performance Counseling. Reward Management: It is a method to ensure that people are rewarded in accordance with their contribution. Career Management: It is a system of charting special career paths for individual employees for advancement in the organization. Health & Safety Management: It is a system of maintaining a healthy & safe system of work in an organization. Discipline Management: It is a system of administering discipline so as to foster positive employee behavior that will promote organizational objectives . Culture Management: It is a system of thinking & behaving shaped by the values, attitudes, rituals & sanctions in an organization.

q q

q
q q

Personnel Policies at ABB India


The local unions as natural co-operation partners Planning discussions held at least once a year Internal mobility and employee development

Ethics, equal opportunities and an open and honest exchange of thoughts and ideas
A strategic issue

HRM Model

Evolution of HRM in India


Pragmatism of capitalists 1920s-30s
Technical, legalistic 40s -50s Professional, legalistic, impersonal 70s 80s

Philosophical 1990s

Human Resource Utilization:


q q q q q q q q q To conduct productivity drive in employees To improve manpower budgeting & control To introduce work measurement To use appropriate payment method by results, bonus & profitsharing schemes To improve motivation To involve employees in improvement programs To introduce new technology To negotiate appropriate productivity agreements To introduce training programs based on an analysis of productivity needs.

Effective Human Resource Utilization:


Human Resource Accounting (HRA): HRA means accounting for people as the organizational resource. It is the measurement of the cost & value of people to organizations & involves measuring the costs incurred on recruiting, selecting, hiring, training & developing employees & judging their economic value to the organization. Human Resource Audit: Its purpose is to assess the effectiveness of the human resource function & to ensure regulatory compliances. In auditing the human resource function, 1stly the existing data has to be collected, such as hiring statistics, turnover, compensation practice, exit interview records summaries, employee complaints, HR budgets & expenditures & so on. 2nd ly, interview has to be conducted so as to collect inputs from the internal customers (employees) on their human resource needs & how these needs are being met.

Careers in Human Resource Management:


HR Specialists: These are entry level positions for HR careers. Included roles would involve roles like those of interviewer, compensation analysts, benefit-coordinators, job analysts & trainers. q HR Manager: The HR manager is a generalist who administers & coordinates programs cutting across functional areas. The HR manager is usually a top-ranking person at a plant or facility & is expected to know about all areas of HRM. q HR Executives: The top level HR executive, usually the VicePresident HR (VP-HR) of an organization, has the responsibility of linking the firms corporate policy & strategy with HRM. q

Environment of Human Resource Management:


External
Cultural Technological Unions

Economic

HRM

Organizationa l Culture & Conflicts

Politico-Legal

Professionalism

Internal:

HRM & Environment Scanning:


The HR department is in the best position to scan the environment for human-resources & labor-market issues. A HR department obtains environmental information & feeds it to key decision makers. Further it also has the responsibility of obtaining internal organizational information for consideration by the strategic decision makers.

HRM & Environment Scanning:


General Outside Environment Organization Domain Consensus is Established Defines its task environment (outside Env) Establishes Its domain In this Environment Enacts & Scans (ways of limited & knowing Environment)

General Outside Environment

Strategic HRM
What is Strategic Management? Strategic management is the process of formulating, implementing & evaluating business strategies to achieve organizational objectives. Strategic management involves those sets of managerial decisions & actions which determine the long-term performance of a business organization. It includes environmental scanning, strategy formulation, strategy implementation, evaluation & control. Steps of Strategic Management: To analyze the opportunities & threats or constraints that exist in the external environment of business To formulate strategies that will match the organizations strengths & weaknesses with the environmental threats & opportunities. To implement the business strategies effectively. To evaluate & control activities so as to ensure that the organizations objectives are being achieved.

q q q q

Strategic HRM
Process of Strategic Management:

Environmental Scanning External

Strategy Formulation Corporate Strategy Formulation Business Unit Strategy Formulation Functional Strategy Formulation

Strategy Implementation

Evaluation & Control

Programs Budgets Procedures

Programs Budgets Procedures

Internal

Strategic HRM
What is Strategic Human Resource Management? The role of SHRM is to effectively incorporate universally effective HR practices in their organizations. It also involves a process of matching specific HR practices to particular aspects of the organizations overall business strategy. Thus various theoretical perspectives suggest that SHRM is a process that involves: q q q Integrating HR into the Strategic Planning Process of the organization. Linking HR practices to business strategy & to one another. Developing a partnership with line management so that HR programs meet real-life business needs. q Internally transforming of HR structure & staff. q Enhancing HR administrative efficiency. q Measuring the bottom-line impact of HR activities.

Strategic HRM
Major Criteria of Interest for evaluation in HRM for strategic perspectives:

q q q q q q q q q q q q q q q

Performance (Individual, team, unit) Quantity, quality, timeliness, cost-effectiveness, effect on others Productivity Customer (Internal/External) Satisfaction Absenteeism Turnover/Retention/Tenure/Intentions to stay/Leaves Employee theft Violence at the workplace Job Stress (Role Conflict, ambiguity) Job satisfaction/Motivation/Attitudes/Commitment Creativity & Innovation Perceived Fairness (Procedural, Interactional) Error rates Accidents, health-related variables (work stress, injuries) Organizational Citizenship behavior

Trends enhancing the importance of HRM:


q
q q q Trend 1: The Increased Globalization of the Economy Trend 2: Technological Changes, Challenges & opportunities Trend 3: The need to be flexible in response to changing business environments Trend 4: Increase in litigation related to HRM (proliferation of regulations & lawsuits related to personnel decisions) Trend 5: Changing characteristics of the workforce (workforce diversity)

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