UNIT IV

CONTEMPORARY ISSUES IN HR
Strategic Human Resource Management
Changes in the Business Environment
High levels of uncertainty about basic business conditions.
Rising costs
Rapid Technological Change
Changing Demographics
More limited supplies of highly trained labour
Rapidly changing government legislation
Increased Globalization of Industries
Traditional HR Activities
Human Resource planning
Recruiting Staff
Job Analysis
Establishing performance review systems
Wage, Salary and benefits administration
Employee Training
Personnel Record Keeping
Legislative Compliance
Labour Relations
Personnel- The Traditional View
HRM- The Strategic Way
Essential elements of SHRM
1. Internally transforming HR staff and structure
2. Enhancing administrative efficiency
Targeting current processes for improvement.
Development of Centralized HR Services (On Stop Shop)
Create Value
3. Integrating HR into the strategic planning process
1. Strategic Planning Process
Mission
Environmental Threats & Opportunities
Organisational Strengths & Weaknesses
Goals & Objectives
Formulation of Strategies
2. Strategically Integrate HRM Planning Process
4. Linking HR practices to business strategy and to one another
1. Vertical Fit
2. Horizontal Fit
3. External Fit
Dr. Shruti Gupta, Associate Professor, AIMT

5. Developing a partnership with line management

Learn as much about firm business as possible.
Be more responsive
Shift from traditional HR functions
Supportive, collaborative relationships
6. Measuring HRM
Customer Reactions
HR Impact
Rupee Value of HR Programs
Benchmarking HR Practices
International Human Resource Management
Increasing Importance of Global Human Resource Understanding
Managing Across Borders
International corporation
Domestic firm that uses its existing capabilities to move into overseas
markets.
Multinational corporation (MNC)
Firm with independent business units operating in multiple countries.
Global corporation
Firm that has integrated worldwide operations through a centralized home
office.
Transnational corporation
Firm that attempts to balance local responsiveness and global scale via a
network of specialized operating units.
How International Companies Affect the World Economy
Their production and distribution extend beyond national boundaries,
making it easier to transfer technology.
They have direct investments in many countries, affecting the balance of
payments.
They have a political impact that leads to cooperation among countries
and to the breaking down of barriers of nationalism.
Global Staffing
Types of Global Staff Members
Approaches to Global Staffing
Types of Global Staff Members
Expatriate - Employee working in firm who not citizen of country in which firm
is located but citizen of country where organization is headquartered
Host-country national - Employees nationality same as location of subsidiary
Third-country national - Citizen of one country, working in second country, and
employed by organization headquartered in third country

Dr. Shruti Gupta, Associate Professor, AIMT

Approaches to Global Staffing

Ethnocentric staffing - Companies primarily hire expatriates to staff higher-level
foreign positions
Polycentric staffing - When more host-country nationals are used throughout the
organization, from top to bottom
Regiocentric staffing - Regional groups of subsidiaries reflecting organizations
strategy and structure work as a unit
Geocentric staffing - Uses worldwide integrated business strategy
Issues in international HRM in helping employees adapt to a new and different
environment outside their own country:
Relocation
Orientation
Objective
Translation services
Changes in International Staffing over Time
Hiring Host-Country Nationals
Three main advantages:
Hiring local citizens is generally less costly than relocating expatriates.
Since local governments usually want good jobs for their citizens, foreign
employers may be required to hire locally.
Most customers want to do business with companies they perceive to be
local versus foreign.
Recruiting Internationally
Work Permit, or Visa
Government document granting a foreign individual the right to
seek employment.
Guest Workers
Foreign workers invited to perform needed labor.
Apprenticeships
Vocational training programs in skilled trades.
Transnational Teams
Teams composed of members of multiple nationalities working on
projects that span multiple countries.
Selecting Global Managers
Global manager
A manager equipped to run an international business
Skills Categories
Ability to seize strategic opportunities
Ability to manage highly decentralized organizations
Awareness of global issues
Sensitivity to issues of diversity
Competence in interpersonal relations
Skill in building community
Dr. Shruti Gupta, Associate Professor, AIMT


1.
2.
3.
4.

Selecting Global Managers

Begin with self-selection.
Create a candidate pool.
Assess core skills.
Assess augmented skills and attributes.
Measured Expatriate Characteristics
Core Skills
Skills that are considered critical to an employees success abroad.
Augmented Skills
Skills that are helpful in facilitating the efforts of
expatriate managers.
Failure rate
Percentage of expatriates who do not perform satisfactorily.
Comparison of Advantages in Sources of Overseas Managers
Expatriate Selection Criteria
Causes of Expatriate Assignment Failure
Background Investigation
Conducting background investigations is equally, or more, important
Differences across cultures and countries often put up barriers to overcome
Each country has own laws, customs and procedures for background screenings

Global Human Resource Development

Expatriate Training & Development
Continual Development: Online Assistance and Training
Repatriation Orientation and Training

Expatriate
Preparation
and
Development Program
Training and Development
Essential training program content to prepare employees for working
internationally:
Language training
Cultural training
Assessing and tracking career development
Managing personal and family life
Repatriation
Culture shock
Perpetual stress experienced by people who settle overseas.
Preparing for an International Assignment
Training Methods
Reviewing available information about the host company: books, magazines,
video tapes.
Conversations with host country natives.
Sensitivity training to become familiar with the customs and overcome prejudices.
Temporary assignments to encourage shared learning.
Returning from an Overseas Assignment
Repatriation
Dr. Shruti Gupta, Associate Professor, AIMT

The process of an employee transitioning home from an international

assignment.
Throw a welcome home party.
Offer counseling to ease the transition.
Arrange conferences and presentations to make certain that
knowledge and skills acquired away from home are identified and
disseminated.
Get feedback from the employee and the family about how well
the organization handled the repatriation process.
Compensation
Different countries have different norms for employee compensation.
Financial (money) incentives versus nonfinancial incentives (prestige,
independence, and influence)
Individual rewards versus collectivist concerns for internal equity and
personal needs
General rule: match the rewards to the values of the local culturecreate
a pay plan that supports the overall strategic intent of the organization but
provides enough flexibility to customize particular policies and programs
to meet the needs of employees in specific locations.

Forces Driving Global Pay

Compensation of Host-Country Employees
Hourly wages vary dramatically from country to country.
Pay periods are different.
Seniority may be an important factor.
High pay rates can upset local compensation practices.
Bonuses, profit-sharing, benefits and paid leave may be more extensive and
legally required.

Compensation of Expatriate Managers

Provide an incentive to leave the United States
Allow for maintaining a U.S. standard of living
Provide for security in countries that are politically unstable or present personal
dangers
Include provisions for good healthcare
Provide for the education of children
Consider foreign taxes the employee is likely to have to pay (in addition to
domestic taxes) and help with tax forms and filing
Allow for maintaining relationships with family, friends, and business associates.
Facilitate reentry home
Be in writing
Expatriate Compensation Systems
Home-Based Pay
Pay based on an expatriates home countrys compensation practices
Balance-Sheet Approach

Dr. Shruti Gupta, Associate Professor, AIMT

A compensation system designed to match the purchasing power in a

persons home country
Calculate base pay
Figure cost-of-living allowance (COLA)
Add incentive premiums
Add assistance programs
Host-Based Pay
Expatriate pay comparable to that earned by employees in a host country
to which the expatriate is assigned.
Localization
Adapting pay and other compensation benefits to match that of a particular
country
Other Issues
Adequacy of medical care
Personal security
Education

Performance Appraisal of International Managers

Who Should Appraise Performance?
Home-country evaluations
Host-country evaluations
Adjusting Performance Criteria
Augmenting job duties
Individual learning
Organizational learning
Providing Feedback
Debriefing interview
Boosting ROI of Expatriates
International Organizations and Labor Relations
International Differences in Unions
The level at which bargaining takes place (national, industry, or
workplace)
The degree of centralization of union-management relations
The scope of bargaining (parties and issues)
The degree to which government intervenes
The degree of unionization and union strength.
Work Life Balance
Four broad categories associated with work life balance
1. Role overload
2. Work-to-family interference
3. Family-to-work interference
4. Caregiver strain

Dr. Shruti Gupta, Associate Professor, AIMT

Work Life Balance Intervention

Simply put, work/life balance initiatives are any benefits, policies, or programs that help
create a better balance between the demands of the job and the healthy management (and
enjoyment) of life outside work.
on-site childcare,
emergency childcare assistance,
seasonal childcare programs
eldercare initiatives
Flexible Working arrangements
Parental leave for adoptive parents,
family leave policies,
other leaves of absence policies such as educational leave, community service
leaves, self funded leave or sabbaticals,
Employee assistance programs
on-site seminars and workshops (on such topics as stress, nutrition, smoking,
communication etc),
internal and/or external educational or training opportunities, or
fitness facilities, or fitness membership assistance (financial).
Benefits of Work Life Balance
Attracts new employees,
Helps to retain staff,
Builds diversity in skills and personnel,
Improves morale,
Reduces sickness and absenteeism,
Enhances working relationships between colleagues,
Encourages employees to show more initiative and teamwork,
Increases levels of production and satisfaction, and
Decreases stress and burn-out.
Some steps to set up the program
1. Assess the workplaces' current situation and objectives.
2. Get buy-in from all levels. participation will be a career-limiting move.
3. Be clear how hours, productivity and deadlines will be monitored.
4. Create a policy or guideline:
5. Initiate a trial period and/or pilot studies.
6. Monitor, re-survey, and make any adjustments that are necessary.
Green HRM
Greening Business Practices
NTPC
Electrostatic Precipitation Technology
Afforestation in and around power plants resulting in bringing down air
temperature
Dr. Shruti Gupta, Associate Professor, AIMT

Distributed Generation
Environmental Monitoring Groups
Introduction
GREEN HUMAN RESOURCE MANAGEMENT is the use of HRM policies to
promote the sustainable use of resources within business organizations and, more
generally, promote the cause of environmentalism.

Green HRM Initiatives

Educating employees about climate change and other environmental issues,
Training in working methods that reduce the use of energy and other resources,
Promoting and incentivizing more sustainable means of travel to work (e.g. car
sharing, cycling, public transport),
Auditing employee benefits to eliminate those that are environmentally damaging
(e.g. unnecessary provision of a high powered company car
Contd.
Make use of employee volunteering to support environmental charities and
projects and to develop green initiatives at work.
Where trade unions are present, green HRM may involve consultation and joint
working with union environmental representatives (i.e. union representatives who
are trained to promote a green agenda at work) to advance sustainable business
practice.
Role of HR
Raise awareness about ecology and the environment, and the need to conserve
them.
Be able o demonstrate that 3R (reduce, reuse, recycle) adds value to the business
and people
GREEN HRM AND RELATION TO OTHER HRM ASPECTS
1. Recruitment and selection
2. Training
3. Performance management
4. Reward system
5. Job description
6. Organizational culture
Recruitment and selection
Green Recruitment means a paper-free recruitment process with a minimal
environmental impact. Applications are invited through online mediums like email, online application forms or the Global Talent Pool. If possible, telephone or
video-based interviews are conducted to minimize any travel-related
environmental impact.
Training
Train front liners to analyze their work areas in environmental management

Dr. Shruti Gupta, Associate Professor, AIMT

Train to increase staff concerns and emotional attachment to environmental

impact.
Integrating environmental training and material use
Training for the generation of eco-values
Development of employee skills, competence building.
Job rotation to train green managers of the future
Using discussion packs, suggestions and interactive material in training and
development
Training skills for the development of renewable sectors and operations
Union involvement in the green awareness
Performance Management
Each department green performance standards and indicators.
Auditing of environment management systems and firm wide dialogue on green
matters.
Managers to have green targets, goals and responsibilities.
Appraisal of employees based on green outcomes.
Penalties for non compliance on targets in environmental management.
Linking of the environmental management to the performance management not to
be taken as a fashion.
Rewards
The formulation of a Green pay/reward system when the employee produces less
waste than the standard.
Tailor packages can be formulated to reward green skills acquisition.
Use of monetary-based Environmental management rewards
Use of non-monetary based EM rewards
Developing negative reinforcements Development of positive rewards
Establish good Public relations processes
Link suggestion scheme to reward system & participation in Green HRM
initiatives to
Job Description
The organization can be advised to introduce specified environmental
management posts
The organization can be advised that where possible job descriptions for highvolume hiring positions should be included, such as, responsibilities for
minimizing negative environmental impacts.
Organisation Culture
The organizational culture has to be molded, projected and developed to highlight
its need, importance and application in the organizations processes. The EM
approach of the organization is reflected by the organizational culture that is
formulated.
The organization culture is formulated by the top management and on the
founders vision. Therefore the strategic teams have to be convinced about the
application of the practices and have to develop means to ensure their compliance.

Dr. Shruti Gupta, Associate Professor, AIMT

BENEFITS OF APPLICATION OF GREEN HRM PRACTICES

ORGANISATIONS:
Reduced energy consumption
Reduced materials usage
Reduced insurance costs
Avoidance of fines for the transgression of environmental legislation
Increased sales
Improvement in operational efficiency

IN

COSTS REALTED TO THE APPLICATION OF GREEN HRM

Training costs
Pollution reduction equipment
Inspection and appraisal
Modification of operations
Accounting errors
HRIS
Definition
HRIS is a systematic way of storing data & information for each individual employee
to aid Planning, Decision making & submitting of returns & reports to external agencies.
Objectives of HRIS
Desired Information available.
Reasonable cost.
Efficient method for processing Data.
Security & secrecy for IMP & confidential information.
Information up-to-date.
Functions of HRIS
Applications of HRIS
Personnel Administration.
Salary Administration.
Leave /Absence Recording.
Skills Inventory.
Medical History.
Accident Monitoring.
Applications of HRIS
Performance Appraisal.
Training & Development.
HRP.
Recruitment.
Career Planning.
STEPS IN IMPLEMENTATION OF HRIS
Dr. Shruti Gupta, Associate Professor, AIMT

Inception of ideas.
Feasibility study.
Selecting a project team.
Defining the requirements.
Vendor analysis.
Contract negotiations.
Training.
Tailoring the system.
Collecting data.
Testing the system.
Starting up.
Running in parallel.
Maintenance.
Audit.

BENEFITS
Higher speed of retrieval and processing of data
Reduction in duplication of efforts leads to reduced costs
Eases classification of data
Effective decision making
Higher accuracy of information.
Improved quality of reports.
Better work culture.
Streamlined & systematic procedure.
More transparency in system.
LIMITATIONS
Expensive in terms of finance & manpower requirements.
Inconvenient to use for computer illiterates.
Hris managers do not know the needs of users.
Computers can`t substitute humans.
Response depends upon data accuracy and queries.
Information not updated becomes stale in nature.
Conclusion
Information is a vital ingredient for management. Accurate, timely & relevant
information is necessary for decision making.
HRIS proves to be an effective tool for providing required information within short
period of time & at reduced cost.
HR Audit
Organisations are increasingly finding it imperative to improve returns on investment,
in order to stay competitive.
An HR Audit is like an annual health check. It plays a pivotal role in instilling a sense
of confidence in management and the HR functions of an organisation.
Dr. Shruti Gupta, Associate Professor, AIMT

Reasons for conducting HR Audit

To ensure effective utilization of Human Resources.
To review compliance with tons of laws and regulations.
To instill a sense of confidence in the human resource department that it is wellmanaged and prepared to meet potential challenges and opportunities.
To maintain or enhance the organization's reputation in a community.
Methods of HRD Audit
Individual Interviews
Group Interviews
Workshops
Questionnaires
Observations
Secondary Analysis
HR Audit Process
Pre-Audit Information
Pre-Audit Self-Assessment
On-site Review
Records Review
Audit Report
The Critical Areas
Recruitment practices
Training and development
Compensation and benefits
Employee and union relations
Health, safety and security
Miscellaneous HR policies & practices-welfare
Strategic HR issues, manpower planning/budgeting.
Preparation for an Audit
Auditor engagement
Data gathering
On-site access
Use Audit Findings
As a blueprint or action plan for addressing HR needs.
Contract out those need areas where internal expertise and resources are not
available.
Use of HR Audit Results
Use the HR audit as a blueprint or action plan for addressing HR needs.
Address as many needs as possible using the organization's internal expertise and
resources.
Contract out those need areas where internal expertise and resources are not
available or do not fit in the core competencies of the organisation.
Challenges in HRD Audit
Dr. Shruti Gupta, Associate Professor, AIMT

Building and improving quality consciousness

Striving to recruit and retain competent, creative, and committed employees.
Aligning the business processes with the technology infrastructure.
Nurturing a creative and supportive work culture.
Improving the responsiveness of the organization to environmental demands
Training and developing the people.

Human Resource Accounting

Definition Of HRA
The American Accounting Association has defined HRA as the process of identifying
and measuring data about human resources and communicating information to
interested parties.
According to Woodruff Jr., VP of R.G. Barry Corporation U.S.A, HRA is an attempt
to identify and report investment made in human resources of an organization that
are not accounted for under conventional accounting practice. Its an information
system that tells the management what changes over time are occurring to the human
resources of the business.
Characteristics Of HRA
Its a system of accounting in which identification of human resources is made.
Investment made in human resources is recorded.
Measurement of costs and values are made.
Changes occurring in human resources over a period of time are also recorded.
Communicates information through financial statements to interested parties.
Helps the management to gain knowledge of the various aspects of employees which
is necessary to take vital decisions for the progress of the organization.
HRA is a part of MIS.
Joint efforts of behavioral scientists, accountants and managements are needed for the
working and development of HRA.
Objectives Of HRA
Proper management of human resources
Improvement of human resources.
Depicting the true value of the organization.
Provides quantitative information on human resources which helps the managers and
investors in making decisions.
HRA communicates the worth of human resources to the organization and to the
public.
Dr. Shruti Gupta, Associate Professor, AIMT