University of Papua New Guinea School of Business Administration

Executive MBA-2010 MBA 6007 Strategic Human Resource Management Prof.P. Subba Rao Room:209 Arts-II Building

Text book
P. Subba Rao, Essentials of Human

Resource Management &Industrial Relations, Himalaya Publishing House,Mumbai,2010.

Reference Books
Dale Yoder, Personnel Management, McGrawHill, 2000 Edwin B. Flippo,Personnel Management , Mc Graw-Hill, 2001. Michael Armstrong ,Personnel Management , Mc Graw-Hill,1999. Dale S.Beach, ,Personnel Management , Mc Graw-Hill, 2001. Wendell L.French, ,Personnel Management , Hougston Mifflin Co.,1988 Michael Jucius, ,Personnel Management

What is Human Resource?

Knowledge, Skill
Talents, Creative Abilities

Aptitude/Interest
Attitude

Values, Beliefs

What is Total Human Resource?

Impact of Family Members on Employee

Contribution/Mindset Impact of friends and Relatives Impact of Colleagues Nature of HR: Economic,Social and Psychological

What is HRM?
Planning,Organizing,Directing and Controlling the functions of: Procurement. Development,Compensation,Integration Utilization and maintenance of people such that the
Organizational Goals are achieved economically and efficiently, Objectives of all personnel are served and social objectives are duly considered and served.

Significance of HRM
Japan vs. USA
South Korea vs. Ghana General Management Vs. HRM HRM as Central Subsystem HR and Market Economy

Knowledge and Competitive Advantage

Products & HR

Environmental Influence
Social and cultural/Demographic factors
Changing structure of

Employment,Employee roles, values,Level of education,Equity and Justice, Participation over Authority, Personal Convictions over Dogma Employer and Employee Demands

Environmental Influence
Technological:
Economic Customers Political Legal and government

Evolution of HR Concepts
Commodity Approach
Machinery Approach Natural Resource idea Welfare Concept Paternalistic Approach

Personnel Approach
Partnership Approach

Strategic Management
Meaning
Corporate Level Strategies: Stability Strategies: Status-Quo Sustainable Growth

Growth Strategies
Internal Growth:Expansion
Concentration Strategies:Limited Customer

groups,Customer functions, Alternate technologies Mergers Amalgamations Absorptions

Growth Strategies
Takeovers(Friendly/Hostile)
Horizontal Integration/Related

Diversification Conglomerate/Unrelated Diversification Vertical Integration:Backward/Forward Joint Ventures: Permanent/Ad hoc/ Full/Partial

Retrenchment Strategies
Turnaround
Captive company Strategy Divestment Strategy Harvesting Strategy Liquidation Strategy

Combination Strategy

SBU Level Generic Strategies

Generic Strategies:
Low Cost-Leadership Strategy Differentiation Strategy Focus/Niche Strategies

SBU Level Offensive Strategies

Attacking Competitors Strengths
Attacking Competitors Weaknesses Simultaneous Attacks on Many fronts End-run offensives(head-to- head confront) Guerrilla Offensives

Pre-emptive Strategies(Competitor can not

duplicate)

SBU Level Defensive Strategies

Protect competitive Strengths
First Mover Advantages

Functional strategies
Operations Marketing Human Resources Finance Information Superior Product Superior Customer Service Superior Speed Superior Guarantee

Industry-base Strategies
Strategies for Emerging Industries
Mature/Declining industries Fragmented Industries(Many small firms) International Industry Leaders

Runner-up Firms(Weaker market share)

Weak Businesses

Line and Staff concepts

What is Line?
What is Staff? HR- Is it Line or Staff? How it is Line and How it is Staff? Coordination

Collaboration

Job Design
Approaches: Engineering Human Job Characteristic Job Design options: Job Rotation Job Enlargement Job Enrichment

Job Analysis
Task:An action/Related group of Action to

produce a definite outcome Position:Group of Similar tasks Job:group of similar positions as to kind an level of work Occupation:Group of Similar Jobs found throughout the industry

Job Analysis
JA is the process of determining by

observation and study and reporting pertinent information relating to the nature of a specific job. It is the determination of tasks which comprise the job and the skills, knowledge, abilities and responsibilities required of the worker of a successful performance and which differentiate one job from other jobs.

Job Description/Specification
Job Description: An organized, factual

statement of the duties and responsibilities of a specific job. Job Specification:A statement of the minimum acceptable human qualities necessary to perform a job properly. Employee Specification:A statement of minimum required qualification/Experience

Content of Job Description

Job Title
Organizational Location of the job Supervision Given/Received

Materials, tools, equipment

Salary Levels List of Duties Conditions of Work Training/Promotions

Job Specification
Physical Specifications: Height,Vision,

health,age,Capacity to operate machines Mental Specifications:Ability to perform arithmetical, interpret data, informational blue prints, ability to handle variable factors, judgmental abilities, General intelligence, memory

Job Specification
Emotional and Social Specifications:

Emotional stability,Flexibility, Social Adaptability,Personal Appearance,Posture, Voice required by the job Behavioural Specifications:Judgments, research, creativity, maturity, teaching, Self Reliance, Dominence

Employee Specification
Educational Qualifications
Experience Social background Physical Qualities

Uses of Job Analysis

Employment to Retirement/
Under de-jobbing environment Under Team work Under Empowerment Job Design and QWL

Job Design and MBO

Job Design and Role Analysis

What is Human Resource Planning

Integrated approach to performing

planning aspects of the HR function in order to have sufficient supply of adequately developed and motivated people to perform the duties and tasks required to meet organizational objectives and satisfy individual needs.

Why Human Resource Planning

To Implement strategies
To plan for all HRM Functions To foresee and pro-act towards external

(STEPIN)and Internal (Stakeholders) environmental factors To Prevent possible uncertainties To prepare the motivated HR

Process of H R Planning

Steps in the Process of HRPlan

Analyze organizational Strategies Demand Forecast:HR Component-wise Supply Forecast: HR Component-wise Net HR requirement: Surplus?:Plan for

Redeployment/Retrenchment Shortage: Plan for Employment/Training/Internal Mobility

Strategies and HR Plans

Status-Quo Strategy Sustainable Growth Strategy Expansion Strategy Diversification:Related and Conglomerate Linkages:Forward and backward Alliances:Mergers, Amalgamations,

Absorptions, Joint Ventures, Private and Public sector Alliance

Strategies and HR Plans

Turn-around Strategy
Captive Company Strategy Harvesting Strategy Liquidating Strategy

Monitor, Review and Control HRP

Environmental Shifts
Change in the Companys Mission Modifications in Corporate Strategies Shifts in Competitor's HR Strategies Shifts in Labour Market

Attrition/Job freeze Policy

Development /Motivation Deviations

Other Areas of HRP

Organising HRP
Problems in HRP Cost-Contribution of HRP

Recruitment
Process of Searching for and Stimulating

the Prospective Employees to apply for a right Job. Searching: Sources Stimulating: Techniques Y Recruitment Factors Affecting Recruitment

Recruitment
Centralized vs.Decentralized
Recruitment Sources Internal vs. External Internal: Current Employees Retrenched Employees

Dependents of Retired/

Retrenched/Deceased/Disabled

External Sources
Campus
Employment Agencies: Public,Private Data Banks Casual Applicants Trade unions

Similar/Competitive Organisations

Modern Sources
Walk-in
Consult-in Head-Hunting Body Shopping Outsourcing

Business Alliances
Tele-Recruitment

Recruitment techniques-Internal
Promotions
Transfers Scouting Advertising High Salary/Benefits

Selection
Selecting the Right candidate at right time
Profile Matching Environment Successive Hurdles Multiple Correlation

Y Scientific Selection System?

Selection
Application Blank
Written Examination Preliminary Interview Group Discussion Tests:Reliability, Validity

Types of tests
Aptitude:Intelligence, mechanical Aptitude

Psychomotor,Clerical Aptitude Achievement Tests:Job Knowledge, Work Sample Situational Tests: Group discussion, Inbasket Interest Tests Personality:Objective.Projective

Selection
Final Interview
Medical Examination Reference Checks Line Managers Decision Offer of Appointment

Employment

Placement and Induction

Company
Superiors & Subordinates Colleagues Customers Procedures,Rules

Culture

Human Resource Development

HRD is a process in which employees of an Organization are helped to acquire / develop:
Technical Skills, Knowledge

Managerial Skills , Knowledge

Behavioural Skills, knowledge Mould the Values, Attitudes

To perform present /future roles by realizing highest human potential to contribute positively...

HRD Process
Analysis of Roles as individuals, members

of teams, and Organization Potential Appraisal Performance Appraisal Present Competencies Capabilities to be Acquired Inputs: Skills, Knowledge, Behaviour,Values.

HRD Techniques
Performance Appraisal
Training Management Development Career Planning& Development Organization Development

Social and Spiritual Development

Employee participation

Performance Management
Performance Measurement
Appraisal Analysis and Development Performance Interview Performance Counseling

Performance Appraisal
PA is a method of evaluating the

employees job performance and behaviour To Fix Salary & benefits To rectify performance deficiencies To Counsel the Employee To develop the employee To create and maintain performance

Who Will Appraise

360 degree Appraisal
Superiors Subordinates Peers Customers

Self
Other Stakeholders

Methods/Techniques-Traditional
Graphic Rating Scales: Compare individual

performance to an absolute standard Also known as liner/simple rating scale Printed performs containing:Characters to be rated like job skill,knowledge, dependability, attitude,leadership skills,emotional stability.. Continuous/Discontinuous scales

Methods/Techniques-Traditional
Graphic Rating Scales: Points for each

character, total points,ranked based on total points Ranking Method:Employees are ranked from Best to Worst: 1,249,50

Paired Comparison Method

Employee is compared with another

employee in the group one at a time Forced Distribution Method:Normal Distribution curve Excellent 10%, good 20%, Average 40%,Below Average20%, Unsatisfactory 10%

Check List Method

Simple Checklist: Yes/No
Weighted check list

Weights are assigned to each of the qualities, Performance ratings, Multiply weights with performance ratings Get the Performance Score

Check List Method (Contd.) Forced Choice Method

Large No.of statements in Groups are

prepared Each group Consists of four descriptive statements concerning employee behaviour Two favourable and two unfavourable statements-Five statements-one is neutral Rater selects on favourable and one unfavourable statements-Decides rating

Critical Incident Method

This is a Continuous Appraisal Method
Superior continuously records critical

incidents of employee performance Critical Incidents: Both Positive and negative

Other Traditional Methods

Essay/Free Form Appraisal: Manager writes a short Essay describing each employees performance-Strengths and Weaknesses of employee
Group Appraisal:Appraised by a Group of Appraisers- group consists of Confidential Reports:Superior writes confidentially about observations, judgments, intitutions

Modern: Behaviourally Anchored rating Scales

Collect Critical Incidents
Identify Performance Dimensions Reclassification of Incidents Assign Scale values to Incidents Produce final Instrument

Modern:Assessment Centres
Not a Technique, But an organization
Group of Experts use Different Techniques Potentialities of Candidates for Promotion,

Training,Salary Hike Team assesses in all areas Consolidate the Scores/observations

Modern-Human Resource Accounting

Cost and Contribution of Employees
Cost:Recruitment to Separation Contribution: Productivity, value Added Money values Contribution- Cost=Surplus/ Deficit

Ratings: Extremely goodExtremely Poor

Modern: Management by Objectives

Superior and Subordinate jointly identify

the common goals Define individuals responsibilities Goals:Tangible, Verifiable and Measurable Appraise Jointly-update the goals Agree on ratings Limitations

Modern:Psychological
To Assess Potentialities
In-depth Interview Psychological Tests Consultations and Discussions with

Employee

System of Performance Appraisal

Establish Performance Standards Communicate them to Employees Measure Actual Performance Adjust actual due to Environmental Compare the Actual With standard Communicate the employee Compare with self appraisal Counsel & Suggest improvements Follow-up

Performance Counseling
Plan for Particular Goal/ Standard
Revise them, if necessary Appraisers rating Self appraisal rating Let the employee defend himself/herself

Post Appraisal Interview

Feed-back information to Employees Opportunity to Employee to Explain Views

and Defend or being Convinced For both Parties:Set New standards, based on realities Let Employees Know, where they standWhat is expected of them-Plan for Growth Strengthen Relations

Performance Appraisals and Rewords

Private&Public Praise
Public Commendation Delighted Job Titles

Performance Bonus
Status Symbols Supplementary Compensation Autonomy/Status Promotions

Ethics in Appraisal
Reliability/Validity
Job Relatedness Standardization Practical Viability Training and Appraisers

Open Communication
Due Process

Y PA?
Performance Improvement
Compensation Adjustments Placement Decisions

Training & Development

Career Planning & Development Job Design Errors- correct them External challenges Feed back to HR

Problems in PA
Rating Biases
Halo Effect( one trait) Central Tendency Leniency/Strictness Personal Prejudice

Recency Effect( Recent Actions)

Training
Act of increasing Skill and Knowledge
Difference: Training& Development Benefits:Employee /Organization/Country Need:Match/Viability / Transformation/

Technological Advancements/Complexity/ Human Relations/ Change in Jobs/ Mobility

Assess Training Needs

Organizational Analysis
Department/Unit Analysis Job /Role Analysis HR Analysis Opportunity/Threat Analysis

Strengths/Weaknesses Analysis

Assessment Methods
Requirements:Organization/Department/

Job Current/Future Problems Managements Requests Observations Performance Deficiencies Survey

Training Content
Supervisory
Marketing Clerical Information Technology Junior Management

Middle Management
Senior Management

Learning Principles
Learning is Cumulative
Ego involvement in Learning Process of Whole Individual

Learning :Stimulation through Senses

Logical Simple to Complex With Pauses Learning Climate

Identification of Training Needs

Job Description-Employee Skills
Job Description: Fixed or Variable? Employee Skills: Technical, Behavioural,

Social

Training Needs:Performance
Performance Appraisal Measures

employee skills, knowledge, abilities, talents Compare them with the job descriptionItem by item Find the deviations Surplus or deficit?

Training Needs: Observation

Observation
Employee Performance is observed by: Superior Colleagues Subordinates

Customers
Identify the Skills that the Employee has

Training Needs:Output Record

Observe the Output
Output levels Over the Period Output Fluctuations Quality Coordination with next stages in Supply

Chain

Training Needs:Other Methods

Productivity
Scrap/ Wastage level Breakage/Spoilage Level Absenteeism Late Coming/ Early Going

Training Methods:ON-the-Job
Job Rotation
Coaching Job Instruction/Step by Step Committee Assignments

Training Methods:Off-the-Job
Vestibule Training
Role Play Lecture Methods Conference /Discussion Programmed Instruction: Planned

sequential units,Simple to Complex

Training:Principles
Motivation
Progress Information Reinforcement Practice Full vs. part

Individual differences

Training Procedure
Preparing the Instructor
Preparing the Trainee Getting Ready to teach Presenting the Operation Try-Out the trainee's Performance

Evaluation of Training
Reaction of the Trainees
Learning Job Behaviour Organizational Change Ultimate value

Production factors
General Observations

Evaluation of Training
Human Resource Factors
Performance tests Cost-value relationship Feed-back

Management Development
Who is a Manager?
What does he do? What is MDP? Areas of MDP:General

Management,Marketing and Sales, Operations,Human Resources, Finance, Strategic,Purchasing , Materials

MDP Techniques:On-the-Job
Coaching
Job rotation Under Study Multiple Management

MDP Techniques:Off-the-Job
The Case Method Incident Method Role Play In-basket Method Business Game Sensitivity training Simulation Grid Training Conferences Lectures

Career Planning
Career:A sequence of separate but related

work activities that provides continuity, order and meaning in a persons life Career path: A Sequential pattern of jobs that form a career. Career goals:Future Positions one strives a part of a career

Career Planning
Career Planning:Process by which one

selects career goals and path to these goals Career Development:Personal improvements one undertakes to achieve career plan Career Management:Process of designing and implementing goals

Career Stages
Exploration
Establishment Mid-career stages Late career Second career

Decline

Process of Career Planning& Development

Analyze individual Skills Analyze career opportunities Analyze demands on individual..Skills.. Relate Jobs and opportunities,Individuals Establish goals Formulate career Strategy Implement it..training,Development, Individual efforts, Education, Coaching Succession Planning

Limitations of CP&D
Lower Ceiling careers
Dual Career Families Declining Career Opportunities Downsizing/De-layering Dynamic Environment

Effective Career Development

Information
Challenging first Careers Assessment Centres Management Simulation Mentor-Protg Relationship

Career Counseling
Continuing Education and Training

Mobility
Promotion vs. Up-gradation
Seniority vs. Merit Transfer: Basis, Purpose Demotion: Basis, Purpose Absenteeism

External Mobilty

Organizational Change
Types of Change Reasons for Change Response to Change Resistance to Change: Economic

Reasons,Fear of Reduction in Employment,demotion,Workload, Personal Reasons Social Reasons:Social adjustment

Approaches to Change
Participation of Employees
Planning for Change Protect Employees Interest

Group Dynamics
Prepare the Employees- Multi-skills Sharing the Benefits, Motivation Development Organization Development

Organization Development
A complex educational strategy intended

to change the beliefs, attitudes, values and structure of organizations so that they can better adapt to new technologies, markets and challenges and the dizzying rate of change itself.

Values of OD
People are basically Good
Need for Confirmation& Support Accept Differences among People

Expressing Feelings&Emotions
Authenticity,Openness,and Directness Fostering Cooperation Giving Attention Confronting Conflict

OD-Objectives
Openness in Communication
Self commitment, Direction Involve members in Planning&

Implementation Trust and Support Group Responsibility

OD Interventions
Survey Feedback
Process Consultation Goal Setting & Planning

Managerial Grid
MBO Sensitivity Training Team building Organization Re-structure

Job Evaluation
Process of determining relative worth of

the various jobs within the organization, so that differential wages may be paid to jobs of different worth. Procedure:Job Analysis,Select jobs, classify jobs,Install the program,maintain the program

JE Techniques:Non-Quantitative
Points-Rating Method:

Simple-Ranking Ranking the key Jobs Paired Comparison Method Single-Factor Ranking method Job Classification/Grading Method

JE Techniques:Quantitative
Points Rating Method
Point factor or Factor Comparison

Salary Administration-Concepts
Salary
Wage Minimum Wage/Statutory Minimum Wage Need-Based Minimum Wage Money Wage/Real Wage

Take-Home Salary/Living Wage

Earnings

Salary-Objectives
Acquire Capable
Retain the Best Performers Internal/External Equity? Desired Behaviour HR Costs- Benefits Analysis

Employee Satisfaction
Reduce conflicts

Salary-Objectives
Progressive Employer
Pay according the content of the job To control salary costs

Simplify collective bargaining

To promote organization Feasibility Comply with legal requirements Easy understanding of Salary administrative system

Salary Differentials
Intrapersonal Interpersonal Inter-Organizational Inter-Industry Inter-sectoral Advantages of Differentials: Increase in Value Addition Increase in Productivity/ Performance Increase in Skills etc.

Factors Affecting
Job Evaluation
Comparable Organizations Productivity/Performance Cost of Living Ability to Pay

Union/Political pressures
Legislations/ Government

Fringe BenefitsWhy?
Demands-Employees & Trade Unions
Employers Preferences Social Security Human Relations Higher Living Standards With Less cost

Higher Cost of Living

Sense of Belongingness

Fringe benefits-Types
For Time Not Worked:Hours of work,Paid

holidays,Shift premium, Paid vacation Employee Security:Retrenchment Compensation,Lay-off Compensation Safety & Health: Workmens Compensation, Health benefits,Sickness Benefits,Maternity benefits,Dependents benefits,medical benefits, voluntary

Fringe benefits-Types (Contd.)>

Welfare&Recreational facilities: Canteen,

Consumer Societies, Credit Societies, housing,Legal Aid, Employee Counseling,welfare Organizations,Holiday homes, Educational facilities, Transportation, Facilities

Fringe benefits-Types (Contd.)>

Old Age Benefits:Provident

Fund,Pension,Insurance, Gratuity, Medical Modern:Profit-Sharing, Stock-Option, Treats, Awards,Knick-Knacks( Company Watches, T Shirts..), Tokens (vacation trips..),Social gatherings

Industrial Relations
Dale Yoder:Whole field of relationship

that exists because of the necessary collaboration of men and women in the employment process of an industry. ILO: Relationship between the state and the employers and workers organizations or the relations between the occupational organizations themselves.

Three Actors of HR
Employees and their Organizations
Employers and their Organizations Government

HRM vs. IR
Parties
Objectives-strategies Individual vs. Collective Grievances vs. Collective Bargaining Interdependency

Objectives of IR
Congenial Labour-Management Relations
Enhance Economic Status of Employees Reduce Industrial Conflicts Socialize Industries Participative Decision-Making

Solve Problems through Negotiations

Industrial Democracy

Approaches to IR
Psychological Approach
Sociological Approach Human Relations Approach Non-Violence,Truth and Trusteeship

Why Trade Unions?

To Provide Economic Security
To Improve Bargaining Power To Ventilate workers Grievances To Satisfy Workers Social needs To Secure Power to Employees

Trade Union : Functions

Militant/Intra-Mural Functions:Protecting Workers Interest-Wage, Benefits, Job
Fraternal/Extra-Mural:Financial and non-

financial assistance during strikes, medical, sickness, educational, housing. Political Functions:Affiliation to a Political Party, helping Political Party,Collecting donations Ancillary:Education, journal, Research..

Change, before change changes you !!

Rich Human Resource Turns the Poor

Country into Rich Country, but not viceversa HR creates a distinctive competency to an Organization Be part of It. Competition! Competition!! Meet it Through Enriching Your HR !! , Not by any other Means!!!