Unit

1 1

Introduction to Human
Resource Management
To understand the need for human resource
management.
To identify the role of Human Resource Manager in an

organization.
To become familiar with the changing functions of

HRM.
To become familiar with the challenges faced by HR

Managers.
 Introduction 2

 Competitiveness refers to a company’s ability to maintain

and gain market share in its industry. It is related to
company effectiveness
 Human resource management refers to the policies,
practices, and systems that influence employees’ behavior,
attitudes, and performance. Many companies refer to HRM
as involving “people practices"

Chapter 1 – Introduction to HRM

 3

Definition of Personnel Management

Michael J.Jucius defined Personnel

Management as, “the field of
management which has to do with
planning, organizing, directing and
controlling the functions of procuring,
developing, maintaining and utilizing
a labor force”.
Chapter 1 – Introduction to HRM
 4

Objectives of HRM
 Societal Objectives – To be ethically and socially responsible
to the needs and challenges 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, at least insofar as these goals enhance the
individual’s contribution to the organization.
Chapter 1 – Introduction to HRM
 Functions of HRM 5

Managerial Functions Operative Functions

 Planning  Employment & Recruitment

 Organizing  Training & Development

 Directing  Compensation

 Controlling  Benefits

 Human Relations

 Industrial Relations

 Health & Safety

 Evolving challenges of

Chapter 1 – Introduction to HRM

HRM
 6

Models of HRM
 To understand the theoretical concepts in a better
way and its contribution to organizational
effectiveness.
 Provides an analytical framework for studying
HRM.
 There are 4 models of HRM.
1. The Fombrun, Tichy and Devanna Model
2. The Harvard Model
3. The Guest Model and
4. The Warwick Model
Chapter 1 – Introduction to HRM
 1. The Fombrun, Tichy and Devanna 7

Model

2. Human Resource
Development

Organizational
1. Selection 3. Appraisal Effectiveness

4. Rewards

Chapter 1 – Introduction to HRM

 8

Cont’d…

The model focus only on 4 functions of HRM.

It is considered as an incomplete model.

It ignores all environmental factors that have an

impact on the HR functions.
It explains the significance of key HR functions
and their contribution to organizational
performance.
It emphasizes the interrelationship between the 4
functions of HR.
Chapter 1 – Introduction to HRM
 9

2. The Harvard Model

6. Feedback
Loop
1. Stakeholder
Interests

3. Human 4. Human
Resource 5. Long-term
Resource
Management Consequences
Outcomes
Policy Choices

2. Situational
Factors
6. Feedback
Loop

Chapter 1 – Introduction to HRM

 10

3. The Guest Model

1. HRM
2. HRM Practices 3. HR Outcomes
Strategies

6. Financial 5. Performance 4. Behavioral

Outcomes Outcomes Outcomes

Chapter 1 – Introduction to HRM

 11

Cont’d…

The model was developed by David Guest in the

year, 1997.
Considered as a superior model.

It begins with a HR strategy and when

implemented will result in certain outcomes.
It emphasizes the logical sequence of six
components given in the model.
The contribution of HRM to organizational
effectiveness is clearly explained in the model.
Chapter 1 – Introduction to HRM
 12

The Warwick Model of HRM

1. Outer Context

2. Inner Context

3. Business
Strategy Content 4. HRM Context

5. HRM Content

Chapter 1 – Introduction to HRM

 13

Cont’d…

The model was developed by 2 researchers,

Hendry and Pettigrew of University of Warwick.
It focuses on 5 elements of HRM.

It maps the connection between the external and

environmental factors and explores how HRM
adapts to changes in the context.
It describes about aligning the external and
internal context to achieve performance and
growth.
Chapter 1 – Introduction to HRM
 Competitive Challenges 14
Influencing HRM
 Three competitive
challenges that
companies now face will
The Challenge of
increase the importance Sustainability
of HRM practices:
The Global
Challenge

The Technology
Challenge

Chapter 1 – Introduction to HRM

 The Sustainability Challenge 15

 Sustainability refers to the ability of a company to survive and

succeed in a dynamic competitive environment
 Stakeholders refers to shareholders, the community, customers,
and all other parties that have an interest in seeing that the
company succeeds
 Sustainability includes the ability to:
 deal with economic and social changes,
 engage in responsible and ethical business practices,

 provide high quality products and services, and

 put in place methods to determine if the company is meeting

stakeholders’ needs
Chapter 1 – Introduction to HRM
 The Sustainability Challenge 16

The changing structure of the economy

Skill demands for jobs are changing
Knowledge is becoming more valuable
 Intellectual capital refers to the creativity, productivity,
and service provided by employees
 Knowledge workers are employees who contribute to
the company not through manual labor but through a
specialized body of knowledge
 Empowerment means giving employees responsibility
and authority to make decisions regarding all aspects of
product development or customer service
Chapter 1 – Introduction to HRM
 The Sustainability Challenge 17

A learning organization embraces a culture of

lifelong learning, enabling all employees to
continually acquire and share knowledge
The psychological contract describes what an
employee expects to contribute and what the
company will provide to the employee for these
contributions
Alternative work arrangements include
independent contractors, on-call workers,
temporary workers, and contract company workers
Chapter 1 – Introduction to HRM
 The Balanced Scorecard 18

 The balanced scorecard gives managers the opportunity

to look at the company from the perspective of internal
and external customers, employees and shareholders.
 The balanced scorecard should be used to:
 Link human resource management activities to the
company’s business strategy.
 Evaluate the extent to which the human resource function is
helping the company’s meet it’s strategic objectives.
 Measures of human resource practices primarily relate to
productivity, people, and processes.
Chapter 1 – Introduction to HRM
 The Balanced Scorecard 19

Customer How do customers see us? Time, quality, performance,

service, cost.

What must we excel at? Processes that influence customer

Internal
satisfaction, availability of
information on service and/or
manufacturing processes.

Improve operating efficiency,

Innovation Can we continue to improve
launch new products, continuous
and Learning and create value?
improvement, empowering of
workforce, employee satisfaction.
Financial How do we look to Profitability, growth, shareholder
shareholders? value.

Chapter 1 – Introduction to HRM

 Customer Service and 20

Quality Emphasis
 Total Quality Management (TQM) is a company-wide
effort to continuously improve the ways peoples,
machines, and systems accomplish work
 Core values of TQM include:
 designing methods and processes to meet the needs of
internal and external customers
 all employees receive training in quality
 promotion of cooperation with vendors, suppliers, and
customers
 management gives feedback on progress

Chapter 1 – Introduction to HRM

 Customer Service and 21

Quality Emphasis
 Malcolm Baldrige National Quality Award
 established in 1987 to promote quality
awareness, to recognize quality
achievements, and to publicize successful
quality strategies.
 ISO 9000:2000
 quality standards adopted worldwide.
 Six Sigma process
 system of measuring, analyzing,
improving, and controlling processes once
they meet quality standards.

Chapter 1 – Introduction to HRM

 Changing Demographics 22

Diversity of the Workforce

 Internal labor force is the labor force of current
employees.
 External labor market includes persons actively
seeking employment.
 The U.S. workforce is becoming increasingly diverse.
 Women
 Minorities
 Disabledworkers
 Immigrants

Chapter 1 – Introduction to HRM

 23

Managing a Diverse Workforce

 To successfully manage a diverse workforce, managers
must develop a new set of skills, including:
 Communicating effectively with employees from a wide
variety of cultural backgrounds.
 Coaching and developing employees of different ages,
educational backgrounds, ethnicity, physical ability, and
race.
 Providing performance feedback that is based on objective
outcomes.
 Creating a work environment that makes it comfortable for
employees of all backgrounds to be creative and innovative.
Chapter 1 – Introduction to HRM
 Legal and Ethical Issues 24

 Human resource managers must

satisfy three basic standards for their
practices to be considered ethical:
 HRM practices must result in the
greatest good for the largest number
of people
 Employment practices must respect
basic human rights of privacy.
 Managers must treat employees
equitably and fairly

Chapter 1 – Introduction to HRM

 The Global Challenge 25

 Companies are finding that to survive they must compete in

international markets as well as fend off foreign
corporations’ attempts to gain ground in the U.S.
 Every business must be prepared to deal with the global
economy. This is made easier by technology.
 Off shoring refers to the exporting of jobs from developed
countries to less developed countries.
 Many companies are entering international markets by
exporting their products overseas, building manufacturing
facilities in other countries, entering into alliances with
foreign companies, and engaging in e-commerce
Chapter 1 – Introduction to HRM
 The Technology Challenge 26

Technology has reshaped the way

we play, plan our lives, and where
we work
 The overall impact of the Internet
 The Internet has created a new business
model – e-commerce – in which
business transactions and relationships
can be conducted electronically.

Chapter 1 – Introduction to HRM

 The Technology Challenge 27

 Advances in technology have:

 changed how and where we work,
 resulted in high-performance models of work systems,
 increased the use of teams to improve customer service and product quality,
 changed skill requirements,
 increased working partnerships,
 led to changes in company structure and reporting relationships,
 increased the availability of Human Resource Information Systems
(HRIS), which are used to acquire, store, manipulate, analyze, retrieve, and
distribute HR information,
 increased the availability of e-HRM, which is the processing and
transmission of digitalized information used in HRM,
 increased the competitiveness of high performance work systems.

Chapter 1 – Introduction to HRM

 Meeting Competitive Challenges
Through HRM Practices 28

Chapter 1 – Introduction to HRM

 Meeting Competitive Challenges
Through HRM Practices 29

Chapter 1 – Introduction to HRM

 EVOLUTION
The field of HRM is the crystallization of variety of historical
and contemporary factors:
 The industrial revolution

 Scientific management

 Trade unionism

 Human relations movement

 Human resource approach

Chapter 1 – Introduction to HRM

 I. The industrial revolution
 During this period machines were brought in,technology
made the progress left the workers dull, boring and
monotonous jobs.
 Government did very little to satisfy the workers.

 Workers were considered as machines.

Chapter 1 – Introduction to HRM

 III. Scientific Management
 To improve the efficiency and a speed F W Taylor advocated
scientific management.
 Scientific management is nothing but a systematic analysis and
breakdown of work into smallest elements and rearranging them
into possible efficient combination.
 Taylor argue that the person selected for the job should fit for the

job and not to be overqualified.

 The employees should be trained to meet the pre-specified by the
method.
 A differential piece rate system was also advocated by taylor to

provide an incentive for employees to follow the detailed

procedures specified by the supervisor.
Chapter 1 – Introduction to HRM
 IV. Trade Unionism
 Workers join hands to protect the rights of employees
against the exploitative action of the employers.
 Unions are trying to resolve the problems through the
collective bargaining, pay and benefits, disciplinary actions
etc.

Chapter 1 – Introduction to HRM

 VI. Human relations movement
 The famous Hawthorne experiments conducted by Elton
Mayo demonstrated the employee productivity was affected
by the way the job was designed and the manner in which
the employees were rewarded.
 The human relation movement led to the implementation of
the behavioral science techniques in the company.
 The movement also influence the growth of the trade
unions during late 1930s and 1940s.
 This give the right to the employee to bargain with the
employer.

Chapter 1 – Introduction to HRM

 V. Human resources movement
 During early 60s people are considered as a collection of unique
individuals.
 What motivates one person may not motivate another.

 Being happy may are may not enhance the productivity and thus
slowly employees are considered as the valuable assets.
 The people do not inherently dislike the job and if they are helped they want to achieve
them.
 More people have a great deal of self control, self-direction and creativity than required.
 Manager should encourage to participate fully in all important matters.
 Work satisfaction may improve by using the employees full potential.

Chapter 1 – Introduction to HRM

 Evolution of concepts of HRM
 Earlier- The more concern is given to work design.
 Middle part of century- Emphasis is based on the
availability of managerial professional and employee
productivity.
 Recent part- Demand for technical professional, increased
concern to TQM and renewed emphasis on productivity.

Chapter 1 – Introduction to HRM

Commodity concept -
Labor is regarded as the commodity. Wages were
decided based on the demand and supply.
Factor of production concept - Workers are like machine tools.

Goodwill concept - Workers safety will have a positive impact on

productivity
Paternalism

The Humanitarian concept - To improve productivity through meeting physical,

social and psychological needs of the worker must
be met.
The Human resource concept - Employees are considered as the assets. There
should be cautious effort to realize organizational
goals through satisfying individual need.
The emerging concept - Employees should be considered as a partner of the
company. They should feel that they are in family.

Chapter 1 – Introduction to HRM

 Evolution in India
Early phase
 It had its origin at 1800 B.C.
 Kautilya in India made reference to various HRM
concepts.
Legal phase
 After 1920 India had its earliest root of HRM.
 The royal commission of 1931 insists for the appointment
of the labor officer to protect workers interests. It was made
compulsory by the Factories act 1948.
 In 1950 IIPM and National institute of labour management
came into existence,
Chapter 1 – Introduction to HRM
 Welfare phase
 During 1960s the scope of personnel management is expanded.
 In this period the human relation of west had a considerable influence over
the Indian organization.
Development phase
 In 1960s and 1970s the HR professional focused more on the development
aspects of human resource.
 HRD comes to existence.
 During 90s organizational restructuring and cost cutting effort have
started in a big way which force companies to focus on service quality,
customer satisfaction etc.
 Issue of managing workforce diversity is seemed to be a great challenge.

Chapter 1 – Introduction to HRM

 Nature
 Pervasive force-Present at all levels of management
 Action oriented- It will focuses attention on solving people problem.
 Individual oriented-It helps to encourage and motivate people.
 People oriented- To help to achieve good results in present and enhance people in
future.
 Future oriented- To achieve future goals a with competent and well motivated
work force.
 Development oriented-To enhance productivity by training process.
 Integrating mechanism-It will tries to build relationship between people across
various department.
 Comprehensive function-The impact of decisions on people.
 Auxiliary service-It will assist and advice people to perform effectively.
 Multi-disciplinary function and Continuous function.

Chapter 1 – Introduction to HRM

 Scope
 Personnel aspect-Recruitment, selection, Training,
Motivation, Compensation, Productivity etc..
 Welfare aspect- Working condition, Health and safety,
education, Recreation facilities etc.
 Industrial relation aspect- Trade union, Settlement of
disputes etc..

Chapter 1 – Introduction to HRM

 HRIS
 In order to conduct audit concrete information is needed
which will helps to forecast the future.
 Manpower planning needs a lot of information.

Definition:-
 A Human Resource Management System (HRMS,
EHRMS), Human Resource Information System (HRIS), HR
Technology or also called HR modules, or simply "Payroll",
refers to the systems and processes at the intersection
between human resource management (HRM)
and information technology.

Chapter 1 – Introduction to HRM

 Objective:-
 To offer an adequate, comprehensive and ongoing
information system.
 To supply up to date information

 To offer data security and personal privacy.

Need:-
 Cost of manual work.

 Chance of errors.

 Fragmentation.

 Difficult to analyse.
Chapter 1 – Introduction to HRM
 Setting up HRIS:
 Plan

 Design

 Implement

 Evaluate

Computerized HRIS:-
Data collection:
 Payroll & benefits

 Performance appraisal

 Training & development

 Recruitment & selection

 Employment & job data

 Report generation

Chapter 1 – Introduction to HRM