HUMAN RESOURCE

MANAGEMENT
INTRODUCTION
HUMAN CAPITAL MANAGEMENT
MANAGING & MEASURING WORKER PRODUCTIVITY

What is the effect of HR on the bottom line of the firm?

Is there a significant relationship between compensation and worker

turnover in our organization?

Does worker training and development enhance retention? …customer

satisfaction? …repeat sales levels?

What value would you attribute to each worker? How much is each
employee “worth?”

Are all employees alike and thus should be managed similarly, or should
each employee be developed and managed uniquely?

What brings out the “best” in each worker? What makes them maximally
productive and valuable to the organization?
Today
 HR Activities- what do HR people do?

 HR Management Challenges- what external and

internal factors influence what HR people do?

 HR Roles- how do HR people do their jobs?

CONCEPTS
 MANAGEMENT – Accomplishment of
organisational objectives by utilizing physical, &
financial resources through the efforts of human
resources.

 RESOURCES - factors of production results in

conversion of raw materials into useful
goods/services.
Challenges faced by organizations

 Global competitiveness
 Work force diversity
 Ethical issues
 Advances in technology and communication
 Sensitive approach to environment
 Shift in employees need for meaningful work
concept of HR
 1. Labour / Manpower – denotes physical abilities
& capacities of employees – commodity-wages
based on demand & supply

 2. Personnel – persons employed in service –

employees as a whole

 3. HR- denotes resources of all the people who

contribute their services to the attainment of
organisational goals
 Human Resources –
 Acc to Leon C. Megission, “HR is the total knowledge,
skills, creative abilities, talents and aptitudes of an
organisation’s workforce as well as the values,
attitudes and beliefs of the individuals involved.”
Human Resource Management
 Defined as the art of procuring, developing and
maintaining competent workforce to achieve goals
of an organisation in an effective and efficient
manner.
HUMAN CAPITAL
 “Our employees are our greatest assets, and the ability to
attract and retain them is the key driver of our future success.”

 The human capital can be defined as "the embodiment of

productive capacity within people. It is the sum of people’s
skills, knowledge, attributes, motivations, and fortitude. It can
be given or rented to others, but only on a temporary basis; its
ownership is non-transferable.”
Importance of HRM

 HR – most important resource

 Put other resources to proper use
 Help transform lifeless factors of production into
useful products
 Capable of enlargement – produce extraordinary
things when inspired
 Can help organisation achieve results quickly,
efficiently & effectively.
 Help the organisation reach its goals
 Employ the skills & abilities of the workforce efficiently
 Provide the organisation with well trained & motivated
employees
 Increase to the fullest the employee's job satisfaction &
self actualization
 Develop & maintain a quality of work life
 Communicate HR policies to all employees.
 Ethically & socially responsive to the needs of society.
Features of HRM
 Concerned with employees, both individuals and as a
group

 Development of HR. covers all levels and all categories

– unskilled/skilled/tech/prof./clerical/managerial

 Applies to all types of organisations

 Continuous process
 Aims at attaining the goals of an organization

 Responsibility of all line managers and a function

performed by staff managers.
ROLE OF PERSONNEL MANAGER
1. Administrative Roles
Policy maker - develop personnel policies
Administrative expert - record keeping, databases, processing benefits/claims, leave,
medical facilities.
Advisor - to line managers , grievance redressal, conflict resolution, selection & training
Housekeeper - recruiting, testing, ref check, employee surveys, salary & wage admin
Counselor - on various personal and professional problems
Welfare officer - provides & maintains canteens, hospitals, clubs, libraries,
transportation, coop societies.
Legal consultant - settling disputes, handling disciplinary cases, collective bargaining.

2. Operational Roles
Recruiter
Trainer, developer, motivator
Coordinator
mediator

3. Strategic Roles
Change Agent - translate vision statements into meaningful format.
Strategic partner - training centre, design centre..
QUALITIES & QUALIFICATIONS OF A PERSONNEL MANAGER

a. Personnel Attributes: Initiative, resourcefulness, perception,

maturity, analytical ability, unbiased, thorough with labour laws,
understanding of human behaviour, Patience, Understanding,
empathy, Perseverance

b. Skills: educational skills, discriminating skills, executing skills,

leadership skills,

c. Experience & training, Professional Attitudes - knowledge of

various disciplines.
 Scope of HRM
Prospects Nature of
of HRM HRM
 Very Vast
 Covers all major

activities in the
Industrial
Relations Employee working life of a
HRM
Hiring
worker
-from time an individual
enters into an
Employee Employee
Maintenance & organization until he
Executive
Remunerat
ion
or she leaves
Employee
Motivation comes under the
purview of HRM
 PERSONNEL MGT HRM

Mgmt of people employed Mgmt of KSA, abilities, attititudes..

Man is an economic resource/service

exchanged for wage / salary Man is an economic, social & psychological

Commodity that can be purchased & Treated as a valuable resource

used

Employees are cost centers, mgmt Profit centre- invest capital for
controls cost development & future use

Used organisational benefit Used for organisation, individual & family

benefit

Auxiliary function Strategic mgmt function

 Differences between PM & HRM
Dimension Personnel Management Human Resources Management

1. Employment Contract Careful delineation of written Aim to go beyond contract

contracts
2. Rules Importance of guiding clear rules Can do outlook, impatience with
rule
3. Behaviour referent Norms/customs/practices Values/mission

4. Managerial task Monitoring Nurturing

5. Management Role Transactional Transformational leadership

6. Communication Indirect Direct

7. Conflict handling Reach temporary truce Manage climate & culture

8. T&D Controlled access to courses Learning organization

9. Focus of attention for Personnel procedures Wide ranging cultural, structural

interventions & personnel strategies
10. Shared interests Interests of the org. are Mutuality of interests
uppermost
Prof.Sujeesha Rao
The Nature of the Employment
Relationship
Objectives of HRM
 Societal objectives
To be ethically & socially responsible to the needs of the society
while minimizing the negative impact of such demands upon the
organization
 Organizational objectives
To recognize the role of HRM in bringing about organizational
effectiveness
 Functional objectives
To maintain the department’s contribution at a level appropriate to
the organization’s needs
 Personal objectives
To assist employees in achieving their personal goals in a manner
that their personal goals enhance the individual’s contribution to
the organization
HRM and 3 P’s
• People – core strength of an organization
Any resource can be replaced but not HR
• Processes – evolve over a period of time
IT enabled environment facilitates engineering
effortlessly
• Performance – the pillars of performance are people
and IT
Organizational performance in terms of value creation
and return on investment
 Evolution of HRM in India
 Welfare (1920s-1930s)

 Administration (1930s- 1940s)

 Employee relations (1940-1960s)

 Functional expertise (1970s-

1980s)

 Business partner / player

(1990s)
Why Study HRM?
 Taking a look at people is a rewarding experience
 People possess skills, abilities and aptitudes that offer
competitive advantage to any firm
 No computer can substitute human brain, no
machines can run without human intervention & no
organization can exist if it cannot serve people’s
needs.
 HRM is a study about the people in the organization-
how they are hired, trained, compensated, motivated
& maintained.
HR
Management
Activities

Source: HR Department Benchmarks

and Analysis Survey 2004 (Washington,
DC: Bureau of National Affairs, 2004),
 FUNCTIONAL AREAS WITHIN HR
 EMPLOYMENT / STAFFING
 RECRUITMENT
 SELECTION
 TRAINING AND DEVELOPMENT
 APPRAISAL
 EDUCATION AND DEVELOPMENT
 COMPENSATION
 SALARIES, WAGES AND BENEFITS
 INCENTIVE PLANS
 EMPLOYEE RELATIONS
 GRIEVANCE RESOLUTION
 UNION RELATIONS
 HR PLANNING AND RESEARCH
 FORECASTING
 JOB ANALYSIS
 ATTITUDE SURVEYS
 VALIDATION STUDIES
Employment / Staffing
 Staffing - Process through which organization ensures it always
has proper number of employees with appropriate skills in right
jobs at right time to achieve organizational objectives
 Job analysis - Systematic process of determining skills, duties,
and knowledge required for performing jobs in organization
 Human resource planning - Systematic process of matching the
internal and external supply of people with job openings
anticipated in the organization over a specified period of time .
 Recruitment - Process of attracting individuals on a timely
basis, in sufficient numbers, and with appropriate qualifications,
to apply for jobs with an organization
 Selection - Process of choosing from a group of applicants the
individual best suited for a particular position and the
organization
Training and Development
 Training - Designed to provide learners with knowledge and skills
needed for their present jobs
 Development - Involves learning that goes beyond today's job; it has
more long-term focus
 Career development - Formal approach used by organization to ensure
that people with proper qualifications and experiences are available
when needed
 Organization development - Planned process of improving
organization by developing its structures, systems, and processes to
improve effectiveness and achieving desired goals
 Performance management - Goal-oriented process directed toward
ensuring organizational processes are in place to maximize
productivity of employees, teams, and ultimately, the organization
 Performance appraisal - Formal system of review and evaluation of
individual or team task performance
Compensation
 Direct Financial Compensation - Pay that person
receives in form of wages, salaries, bonuses, and
commissions.
 Indirect Financial Compensation (Benefits) - All
financial rewards not included in direct
compensation such as paid vacations, sick leave,
holidays, and medical insurance.
 Nonfinancial Compensation - Satisfaction that
person receives from job itself or from psychological
and/or physical environment in which person works.
Safety and Health
 Employees who work in safe environment and
enjoy good health are more likely to be productive
and yield long-term benefits to organization.

 Safety - Involves protecting employees from

injuries caused by work-related accidents
 Health - Refers to employees' freedom from illness
and their general physical and mental well being
Procurement Development Motivation & Integration Maintenance Separation
Compensati
on

Job Analysis Training Job design Grievance redressal Health & safety Retirement

HR Planning Executive Work scheduling Discipline Employee welfare Layoff

development

Recruitment Career planning & Motivation Teams & teamwork Social security Outsourcing
development measures

Selection Human Resource Job evaluation Collective Discharge

development bargaining

Placement Performance Employee

appraisal participation
&
empowerment

Induction & Compensation Trade unions &

orientation administration associations

Internal Mobility Incentives & Industrial relations

benefits.
 HR Management Challenges
 Workforce Availability and Quality Concerns
 Inadequate supply of workers with needed skills for “knowledge jobs”
 80% of manufacturing jobs report shortage of qualified workers
 Education of workers in basic skills
 Not enough specific skills, not enough technology skills
 Growth in Contingent Workforce
 Represents 20% of the workforce
 Increases in temporary workers, independent contractors, leased
employees, and part-timers caused by:
 Need for flexibility in staffing levels
 Increased difficulty in firing regular employees.
 Reduced legal liability from contract employees
 Boeing Strategy- manage employment cycles in suppliers and partners
 HR Management Challenges

 Workforce Demographics and

Diversity
 Increasing Racial/Ethnic
Diversity
 From the Melting Pot to the Salad
Bowl
 More Women in the Workforce
 Single-parent households
 Dual-career couples
 Domestic partners
 Working mothers and
family/childcare
 Significantly Aging Workforce
 Age discrimination
 HR Management Challenges
 Organizational Cost Pressures and Restructuring
 Mergers and Acquisitions
 “Right-sizing”—eliminating of layers of management,
closing facilities, merging with other organizations, and
outplacing workers
 Intended results are flatter organizations, increases in
productivity, quality, service and lower costs.
 Costs are “survivor mentality”, loss of employee loyalty, and
turnover of valuable employees.
 HR managers must work toward ensuring cultural
compatibility in mergers.
 HR Management Roles
 Administrative Role
 Clerical and administrative support operations (e.g.,
payroll and benefits work)
 Technology is transforming how HR services are delivered.
 Outsourcing HR services to reduce HR staffing costs

 Operational and Employee Advocate Role

 “Champion” for employee concerns
 Employee crisis management
 Responding to employee complaints
Changing Roles of HR Management

Note: Example percentages are based on various surveys.

 Strategic Role for HR
 Administrative Role
 Operational Role
 Employee Advocate Role
 Strategic Role
 “Contributing at the Table” to organizational results
 HR becomes a strategic business partner by:
 Focusing on developing HR programs that enhance organizational
performance.
 Involving HR in strategic planning at the onset.
 Participating in decision making on mergers, acquisitions, and downsizing.
 Redesigning organizations and work processes
 Accounting and documenting the financial results of HR activities.
 Some HR people get this, some don’t…CEOs want those that
do and oust those that don’t
Operational to Strategic Transformation of HR
 HR Technology
 Human Resource Management System (HRMS)
 An integrated system providing information used by HR
management in decision making.
 Purposes (Benefits) of HRMS
 Administrative and operational efficiency in compiling HR
data
 Availability of data for effective HR strategic planning
 Uses of HRMS
 Automation of payroll and benefit activities
 EEO/affirmative action tracking
 HR Workflow: increased access to HR information
 Employee self-service reduces HR costs.
 Uses of an HRMS
 HRMS
 Bulletin boards
 What information will be available and what is information
needed?
 Data access
 To what uses will the information be put?
 Employee self-service
 Who will be allowed to access to what information?
 Web-based services and access

 Extended linkage
 When, where, and how often will the information be needed?
 Ethics and HR Management
 Firms with High Ethical Standards
 Are more likely to reach strategic goals.
 Are viewed more positively by stakeholders

 Are better able to attract and retain human resources.

 Ethics and Global Differences

 Different legal, political, and cultural factors in other
countries can lead to ethical conflicts for global managers.
 Foreign Corrupt Practices Act (FCPA)
 Prohibits U.S. firms from engaging in bribery and other
practices in other countries.
HR’s Role in Organizational Ethics
 HR management plays a key role as the “keeper and
voice” of organizational ethics.
 What is Ethical Behavior?

 What“ought” to be done.
 Dimensions of decisions about ethical issues in management:
 Extended consequences
 Multiple alternatives
 Mixed outcomes
 Uncertain consequences
 Personal effects
Examples of Ethical Misconduct in HR Activities
 HR Management Competencies
and Careers
 Important HR Competencies
 Strategic contribution to organizational success
 Business knowledge of organization and its strategies
 Effective and effective delivery of HR services
 Familiarity with HRMS technology
 Personal credibility

 SPEAK THE LANGUAGE OF THE BUSINESS

HR Management as a Career Field
 HR Generalist
 A person with responsibility for performing a variety
of HR activities.
 HR Specialist
 A person with in-depth knowledge and expertise in a
limited area of HR.
 HR Manager
 A person who is a line manager for HR Generalists and
Specialists
 Human Resource Executives, Generalists, and
Specialists

Vice President, Vice President,

Human Industrial
Resources Relations

Manager,
Manager, Manager,
Training and
Compensation Staffing
Development
Executive:
Benefits Analyst Generalist:
Specialist:
 Traditional Human Resource Functions
in a Large Firm

President
and CEO

Vice President,
Vice President, Vice President, Vice President,
Human
Marketing Operations Finance
Resources

Manager, Manager, Manager,

Manager, Manager,
Training and Safety and Labor
Compensation Staffing
Development Health Relations
 A Possible Evolving HR
Organization Example

President
and CEO

Vice
Director
Vice President, Vice Vice
of Safety
President, Strategic President, President,
and
Operations Human Finance Marketing
Health
Resources

Training & Compensation Staffing (more

Development (Shared Service involvement of Line
(Outsourced) Centers) Managers, etc)
 CURRENT TRENDS IN HR
 EMPHASIS ON STRATEGIC PLANNING & SUCCESSION
 VP of HR is a Strategic Manager, Management Succession Planning

 EMPHASIS ON COST-RELATED ISSUES / COST CONTROL

 Global Competition, Outsourcing and Downsizing

 NEW SPECIALTIES EMERGING IN HR

 HR Planning, International HR, Employee Assistance Programs

 GROWTH OF GOVERNMENTAL REGULATIONS

 Wages (1930s), Unionization (1940s), Employment (1960s)

 PROFESSIONALIZATION OF HR MANAGEMENT
 Professional HR Societies & HRCI (Certification Institute)

 THE INTERNET REVOLUTION

 Electronic Recruiting, Records Management, and HRIS
 PROFESSIONAL HR ORGANIZATIONS
 SOCIETY FOR HUMAN RESOURCE MANAGEMENT
 (SHRM) 185,000+ members
 JNLS: HR Magazine, HR News
 AMERICAN SOCIETY FOR TRAINING & DEVELOPMENT
 (ASTD) 60,000+ members
 JNL: Training & Development Journal
 WORLD-AT-WORK (formerly the American Compensation Association)
 (WAW) 23,000+ members
 JNL: WAW/ACA Journal (formerly Compensation Review)
 INTERNATIONAL PERSONNEL MANAGEMENT ASSOCIATION
 (IPMA) 6500+ members
 JNL: Public Personnel Management
 NATIONAL HUMAN RESOURCE ASSOCIATION (formerly the Intl Assn for
Personnel Women)
 (NHRA) 1500+ members
 JNL: Human Resources: Jnl of the International Assn for Personnel Women

 NATIONAL HRD NETWORK, DELHI

EXTERNAL ENVIRONMENTAL FACTORS THAT
IMPACT HRM
 GOVERNMENT REGULATIONS
 Federal, State and Local
 LABOR FORCE DEMOGRAPHICS
 Women with Children
 Workforce Diversity and Immigrants
 Older Workers
 People with Disabilities
 Young Persons with Limited Skills
 TECHNOLOGICAL ADVANCEMENT
 Automation, Obsolescence and Renewal
 GLOBAL COMPETITION AND CUSTOMER EXPECTATIONS
 ECONOMIC CONDITIONS AND CYCLES
 OTHER PUBLICS
 Unions, Communities, Shareholders, etc.
Cyberwork

 Possibility of never-ending workday

 BlackBerrys, cell phones, text messaging,
and e-mail create endless possibilities for
communication
 Some workers believe their employer wants
them available 24/7
Best Companies to Work For in India
 Infosys Technologies Limited (IT industry).
 MindTree Consulting (IT industry).
 Satyam Computer Services Limited (IT industry).
 Dr. Reddy’s Laboratories Limited (pharmaceutical company).
 Sapient Corporation (business and technology consulting).
 Agilent Technologies (IT industry).
 Johnson & Johnson (consumer health care company).
 Covansys India (IT industry).
 HCL Comnet (IT industry).
 HSBC; Hongkong and Banking Corporation (banking services).
Class Presentation Exercise
 Divide students into groups based on class size.

 The instructor will assign each group one of the best

companies identified in the previous slide.

 As a homework assignment, each group will research two

best HR practices from their assigned company using the
Internet, academic or practitioner journals.

 Each group will have 8-10 minutes during the next class
session to present their best HR practices.