Human Resource

Management
Dr. M.Venkatesan
Associate Professor

Human Resource Management

Introductory Session
EPGDIB (2014-2016 Batch)

Compiled by
Dr. M.Venkatesan

Delegation of Work / Mandate Set by the

Management

Dilbert Cartoons on Carbert HR

Manager and others

Employees Perspective on
HR

Reverse Employee
Motivation

(Anti) Catbert HR Person in

Dilbert

Chris was the senior Human Resource Director for a major business unit of a large company.
He was concerned about the team behaviour of his clients: the senior line management of his
organization. He arranged they all go to a weekend off-site meeting with skilled organizational
development (OD) professionals to work more strategically as a team.
On the Monday following the off site, the Senior Leader returned to work full of enthusiasm and
called Chris to his office. He told Chris the weekend had been a fantastic success and the
leadership team had come up with a bunch of new values and behaviours they wanted
everyone in the organization to adhere to. He asked Chris to get with the internal
communications department to deploy the new approach to all 50,000 employees in the
organization within 10 days.
Chris being a person of some courage and integrity, said: Boss, I am not going to do that. I
have a better suggestion: why dont you and the leadership team simply agree to behave in the
new ways, but dont tell anyone what is going on. Now if in the next few weeks, people start
coming up to me and asking: whats going on? Meetings have a different focus and are being
handled better; we are working on the right stuff for a change, we seem to have a strategy etc.
Then I think we know we are on a roll. At that point, I will get my OD people to construct a good
survey process and we can measure and then improve on the progress we find. But I am not
going to get them to design the survey right now, because I doubt we will ever need it. I predict
that you and your team cannot change their leadership style in a way that anyone will notice,
and to announce that you are will merely generate destructive cynicism. There is no downside
to just doing it without fanfare.
The boss was silent and did not repeat his request.
When HR takes stands like that it has moved beyond Catbert and got some guts.

System Model

Organization System

HR System

Non Technical Areas of Organization:

An Analogy

Functions of HRM

Managerial Functions

Planning
Organization
Staffing
Directing
Controlling

Operative Functions

Procurement of personnel
Development of personnel
Compensation to personnel
Maintaining good industrial relation
Record keeping
Personnel planning and evaluation

Human Resource
Management
HRM is a management function that helps managers
recruit, select, train and develop members for an
organization. It is concerned with the peoples dimension in
organizations.
Management is a function of planning, organizing, directing,
and controlling of the procurement, development,
compensation,
integration,
maintenance
and
separation of human resources to the end that individual,
organizational and social objectives are accomplished.

- Edwin B. Flippo

Objectives of HRM

Social 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.

Objectives of HRM

Functional objectives
To maintain the departments contribution at a
level appropriate to the organizations needs.

Personnel Objectives
To assist employees in achieving their
personal goals, at least insofar as these goals
enhance the individuals contribution to the
organization.

Environment of Human Resource Management

Customers

Safety and
Health

Competition

Hu
m
De an
ve Re
lop so
m urc
en e
t

ation

Other
Functional
Areas

Labor Market

Shareholders

Finance

Human
Resource
1
Management

Operations

Com
pens

a
St

g
ff in

Society

Unanticipated Events

Legal Considerations

Marketing

d
e an s
loye
on
Emp Relati
or
Lab

Economy

EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT

Technology

Unions

Importance of HRM
The proper or improper use of the different
factors of production depend on the wishes of
the human resources. Hence, besides other
resources human resources need more
development.
Human resources can increase cooperation
but it needs proper and efficient management
to guide it

Peter F. Drucker

Importance of HRM
1. It helps management in the preparation adoption and
continuing evolution of personnel programmes and policies.
2. It supplies skilled workers through scientific selection process.
3. It ensures maximum benefit out of the expenditure on training
and development and appreciates the human assets.
4. It prepares workers according to the changing needs of industry
and environment.
5. It motivates workers and upgrades them so as to enable them
to accomplish the organisation goals.
6. Through innovation and experimentation in the fields of personnel,
it helps in reducing costs and helps in increasing
productivity.
7. It contributes a lot in restoring the industrial harmony and
healthy employer-employee relations.
8. It establishes mechanism for the administration of personnel
services that are delegated to the personnel department.

Line managers HRM responsibilities

a.
b.
c.
d.

e.
f.
g.

Job placing.
Orienting new employees.
On-job training of employees.
Interpreting company policies and
procedures.
Conducting job appraisals.
Controlling labor costs.
Labor protection and disciplines.

Staff managers HRM responsibilities

a.

b.

c.

A line function: directing and managing

people in the HRM department.
A coordinating function: coordinating HRM
activities across the organization.
Staff functions:
Same as the HRM functions plus labor
relations and collective bargaining with the
trade unions.

Future Challenges before the

Managers

Increasing size of workforce

Increase in education level
Technological advances
Changes in political environment
Increasing aspirations of employees
Changing psychosocial system
Computerized information system
Mobility of professional personnel
Change in legal environment
Management of human relations

Environment

Organization

International Context
Includes:
International Agreements

Corporate Strategy

National Context
Includes:
culture
political/legislative
economic
social
patterns of ownership
etc.

HRM Strategy
Includes:
integration
devolvement to line
employment policies
involvement policies
reward policies
work systems etc.

National HRM Context

Includes:
education/training
labor markets
trade unions
industrial relations
etc.

HRM Practice
Includes:
selection
performance
appraisal
rewards
development
industrial relations
communication etc.

Contextual Model of HRM

People

Employee
Champion

Operational
Focus

Administrati
ve Expert

Change
Agent
Strategic
Partner

Strategic
Focus

Process
HR Role Framework
Source: Conner J. Ulrich D. (1996). Human Resource Roles:
Creating Value Not Rhetoric Human Resource Planning September

Development
Selection

Performance

Appraisal
Rewards

The Michigan Matching Model of HRM

Stakeholder
interests
Shareholders
Management
Employee groups
Government
Community
Unions

Situational
factors
Work force
characteristics
Business strategy
and conditions
Management
philosophy
Labor market
Unions
Task technology
Laws and societal
values

HRM Policy
Choices
Employee
influence
Human
Resource flow
Reward systems
Work systems

HR Outcomes
Commitment
Competence
Congruence
Cost
effectiveness

Long-term
consequences
Individual well
being
Organizational
effectiveness
Societal wellbeing

The Harvard Model of Human Resource Management

Role of HRM departments

Differing roles in different countries.

Some more administrative some more
strategic
As some of the administrative work is
outsourced or computerised, there can
be more emphasis on strategic role.

Role of HRM department

Is it represented on the board of

directors
Is it involved in strategic
management
Where was the HR manager
recruited

New Role of HRM

A facilitator of change
An integrated approach to
management
A mediator

Functions of HR Manager

Intellectual
Educator
Discriminator
Executive
Leader
Humanist
Visionary

Traditional Human Resource

Functions in a Large Firm
President and CEO
Vice President,
Marketing

Manager,
Training and
Development

Vice President,
Operations

Manager,
Compensation

Vice President,
Finance

Manager,
Staffing

Manager,
Safety and
Health

Vice President,
Human
Resources

Manager,
Labor
Relations

A Possible Evolving HR Organization

Example
President and CEO

Vice
President,
Operations

Vice
President,
Strategic
Human
Resources

Training &
Development
(Outsourced)

Vice
President,
Finance

Compensation
(Shared Service
Centers)

Vice
President,
Marketing

Staffing (Line
Managers, Use of
Applicant Tracking
Systems)

Director
of Safety
and
Health

SHIFTS THAT ARE RE-SHAPING HR ROLES

TO

FROM
Local markets, operations
Manufacturing, clerical work
Hierarchy
Intermediaries; face-to-face
Obedience to formal authority
Stability, efficiency, control
Full time job
Customer service
Work done by employees
Fixed work location
Management prerogative
Loyal service
White, male workforce
Financial performance
Get a job

Global markets, operations

Service, knowledge work
Networks
Direct access,virtual relationship
Questioning of formal authority
Change, creativity, flexibility, order
Part-time and project work
Shareholder, stakeholder value
Work done by many contributors
Diverse work locations
Social licence
Marketable knowledge, skills
Diverse workforce
Triple bottom line
Get a life

HR EXECUTIVES VIEW OF THE

FUTURE
TOP 5 BUSINESS CHALLENGES

Developing new markets

TOP 3 HR CHALLENGES

Attracting and retaining

talented people

Improving organisational
capabilities

Developing leadership skills

Improving profitability

Market share growth

Becoming the recognised

global market leader

Building shareholder value

Source: Arthur Andersen survey of HR Executives in almost 70 Australian-based firms

Reported in HR Monthly, August 2001, p.17

Traditional HR versus Strategic HR

HR Factors in the SWOT Analysis

Key HR Metrics

The Role of HR
Future / Strategic Focus

Strategic
Partner
Strategic HR Planning
HR as Business
Partner
Culture and Image

Processes

Administrative
Expert

Compensation
Benefits
HR information systems
Compliance

Change Agent
Staffing
Organizational design
Survey action planning
Performance
measurement
Training and
development

People

Employee Relations
Expert

Employee relations
Labor relations
Safety & workers compensation
Diversity and EEO

Day to Day Operational Focus

Administrative Expert

Compensation
Payroll as %--total operating costs (benchmarked); compensation targets
benchmarked against peer companies; turnover rates; quality of
management review and Board material.

Benefits
Medical cost per participant; dental cost per participant; 401K employee
participation rate; $ saved in union negotiations.

HRIS Systems Support

HRIS implementation on time and within budget; customer satisfaction.

Compliance
# New EEO Charges; # Old EEO Charges Closed; Progress on AA Goals;
Outcomes of Inspections and Audits.

Employee Relations Expert

Employee Relations
Turnover rates, Best Place to Work rankings, legal compliance,
efficiency, union activity (or lack thereof).

Labor Relations
Absence of the extreme negative (strikes, slowdowns, sit-downs, boycotts); $
outcome of new contracts, both immediate & longer term; timeliness & quality
of new contracts; productivity per employee; safety & quality measures.
Safety and Workers Compensation

# Incidents & $ value of accidents; # employees trained; % required

training & certifications completed; audit results.

Diversity & EEO

Attitude survey measures of perceived fairness; # people trained in Diversity
Awareness and Diversity Leadership programs; perceived tolerance.

Change Agent

Staffing
Rs to Fill; Days to Fill; # Filled; Quality of Hires; Retention of Hires.

Organizational Design
Benchmarking headcount; effectiveness of communications & key
processes (no bottlenecks); spans and layers; management ratios.

Survey Action Planning

Employee satisfaction results at the work group level; rolled up to Business
Unit level; norms available for Business Unit analysis.

Performance Management
Performance Reviews: Timeliness and Quality; #/ % Positions with written
accountabilities and measures; other measures vary with the position.

Training & Development

# Programs; # Days/Person Training; Impact of Training; effectiveness
measures within new groups.

Strategic Partner
Strategic HR Planning
Quality of succession management program assessment. Quality of Bench
Strength. Quality of Succession Plan Follow-up (% Actions Completed).
HR as Business Partner

Any business measure of effectiveness. 360-Degree Feedback on the

extent to which HR is considered a partner by those they support.
Culture and Image

Employee Satisfaction data; quality of the description and utilization of

culture & image understanding; standing on the Fortune 100 Greatest Places
to Work.

The role of HR

Moving from a centralised to

decentralised HR model

Trend towards management through costcentre profit-centre based approach

Line managers are more in contact with
employees. They have the main
responsibility for performance.
Issue of responsiveness to customers.
A move towards reducing overhead and
realtime staffing.

Pressures slowing the

devolvement to line managers

Line managers not enthusiastic to take

on HR activities
Line managers may regard HR
activities as a lower priority
Not enough training and support to
line managers in HR duties

Literature Review

On EI, Fenton-OCreevys (1998) survey of HR

directors/ MDs/ and equivalents found that
positive outcomes of employee involvement
were lower in organizations that experienced
middle management resistance
Fenton-OCreevys later (2001) study of
managers attitudes to EI found their
attitudes to be no more negative than those
of senior managers, and concluded that
where EI schemes fail senior managers may
simply be scapegoating middle managers,
and that middle manager resistance to
change may be seen by the middle manager
concerned as pragmatic adaptation

Line Managers
Perspective

Line manager involvement in grievance and

discipline cases includes work on supervisor
and managerial preferred handling styles.
This research found that most organisations
had tended to ask HR managers to sit in
in these meetings, to police line
managers and to ensure that good
outcomes prevailed (Rollinson et al., 1996).

Marks & Spencer

Introduction of new technologies like HR

shared services and e-HR to deliver HR
advice and services to the line has brought
problems, notably a questioning of the
impact that such changes would have on
line manager workload, seen at British
Nuclear Fuels, and the willingness of line
managers to take on more HR work, seen
at Marks & Spencer (Deeks, 2000).

Integration and
devolvement

Degree of integration of HRM into business

strategy
Degree of devolvement: the degree to which
HRM practive involves and gives responsibility
to line managers rather than personnel
specialists

Mechanics (low integration

and low devolvement)

Specialist, but limited skills and interests

of HRM practitioners.

Professional personnel manager with higher

imperatives than the organization. Belief that
specialist knowledge is beyond the scope of
untrained people.
Focus on the mechanical requirements of the
function.
Increasing isolation from strategic interests of the
organization.

wild west (low integration and

high devolvement)

Individual manager free to develop

his/her own employee relationship.
lncreased power to hire and fire,
reward and develop employees.
Potential for incoherence, inconsistency
and strong employee reactions.

Guarded strategists (high integration but

low devolvement)

Specialists powerful figures in the

organization.
Close liaison with senior managers to
develop strategy.
Large and influential departments with
centralized control of policies.
Better line managers frustrated with lack
of control, poor managers welcome lack of
responsibility.

Pivotal (high integration and high

devolvement)

Senior personnel managers act as catalysts,

facilitators
and co-ordinators.
Small, but powerful departments.
Monitoring of and internal consulting on HRM
developments.
Responsibility and authority devolved to the
line.
Problems with resourcing high-calibre businessorientated HRM managers.

HR Continues to Evolve
Labour
Relations

Employee
Relations

Personnel

Human
Resource
s

Organization
al
Effectiveness

Safety &
Workers
Compensatio
n

Compliance

Compensation

Performanc HR Information
e
Systems (HRIS)
Managemen
t

Labour
Relations

Benefits

Training &
Development

EEO / AA

Performance
Management

Employee
Relations

Survey Action
Planning

Organizatio
nal Design

HR as Business
Partner

Strategic
HR Planning

Culture & Image

Measuring HRs
Contribution

Strategy

The companys long-term plan for how it will balance

its internal strengths and weaknesses with its external
opportunities and threats to maintain a competitive
advantage.

HR managers today are more involved in partnering with their

top managers in both designing and implementing their
companies strategies.

Top management wants to see, precisely, how the HR

managers plans will make the company more
valuable.
155

Balance Scorecard

HR Metrics

Absence Rate
[(Number of days absent in month) (Average number of
employees during mo.) (number of workdays)] 100

Cost per Hire

(Advertising + Agency Fees + Employee Referrals + Travel cost of
applicants and staff + Relocation costs + Recruiter pay and
benefits) Number of Hires

Health Care Costs per Employee

Total cost of health care Total Employees

HR Expense Factor
HR expense Total operating expense

157

HR Metrics (contd)

Human Capital ROI

Revenue (Operating Expense [Compensation cost + Benefit
cost]) (Compensation cost + Benefit cost)

Human Capital Value Added

Revenue (Operating Expense ([Compensation cost + Benefit
Cost]) Total Number of FTE

Revenue Factor
Revenue Total Number of FTE

Time to fill
Total days elapsed to fill requisitions Number hired

158

HR Metrics (contd)

Training Investment Factor

Total training cost Headcount

Turnover Costs
Cost to terminate + Cost per hire + Vacancy Cost + Learning
curve loss

Turnover Rate
[Number of separations during month Average number of
employees during month] 100

Workers Compensation Cost per Employee

Total WC cost for Year Average number of employees

159

Measuring HRs
Contribution

The HR Scorecard

Shows the quantitative standards,

or metrics the firm uses to
measure HR activities.

Measures the employee behaviors

resulting from these activities.

Measures the strategically

relevant organizational outcomes
of those employee behaviors.

160

Benefits of a High Performance Work

System (HPWS)

Generate more job applicants

Screen candidates more effectively
Provide more and better training
Link pay more explicitly to performance
Provide a safer work environment
Produce more qualified applicants per position
More employees are hired based on validated selection
tests
Provide more hours of training for new employees
Higher percentages of employees receiving regular
performance appraisals.

161

Thank you