Human Resource Management: Shah M Saad Husain

Human Resource Management
HRM 401, Summer 2019
Shah M Saad Husain

CHRO & Head Corporate Planning
HASCOL Petroleum Ltd
1
Shah M Saad Husain
BEngg, MS Engg, MBA, FICS, FIMM, PE
41 years management experience with

multinational, private sector and government
companies in engineering, petroleum, energy
and mineral sectors.
in General Management, HR, Marketing, Project

Management, Engineering Operations,
Business Development, External Affairs,
Corporate Planning, CSR and Customer
Relations.
with PIDC, Habib Group, British Petroleum, BHP

Billiton, Toyota Indus Motor, Pak-Arab Refinery,
HASCOL Petroleum.
32 years teaching experience at IBA, CBM,

PIQC, PIM, NIPA, LUMS in the areas of HR,
Strategic Management, Marketing and Japanese
Management
Course Contents
 The Strategic Role of HRM
 Job Analysis and Job Design
 Staffing
 Employee Development
 Compensation
 Employee Relations
Course Objectives
 Knowledge of HR Management Theory, Concepts, Processes

and Practices.
 Identifying Sources of Information and using them.
 Class Interaction, learning from the Marketplace.
 Practical Application of course, developing Strategies for
Organizations.
 Performance Assessment: Students nTeacher.
4
Course Requirements
 Readings from selected texts, journals
 Theory, Concepts discussed in Class
 Student Projects and Reports
 Real Life Cases
 Examinations
 Presentations and Class Evaluations
 Class Participation, Quizzes, Home Assignments
5
Instructions for Students
 Bring Course File to each class

 Read reading materials before class
 Write notes as slides are explained and discussed
 Keep track of Course Calendar, Class Timings,
Grades, etc., on e-group and with CR
 Maintain contact with CR and SSH
 Meet Attendance and Punctuality requirements
 Discipline is key. Adhere to IBA Rules.
6
Grading
 Midterm = 20
 Final = 40
 Project Report, Presentation = 20
 Assignments, Quizzes = 20
 All Quizzes are open book
 For an overall A grade in the course:

 A in Final
 A in Project Report
 A in Assignments, Class Participation
7
Readings
I. Michael Armstrong, (2007): Kogan Page “Handbook

of Human Resource Management Practice”, 11th
Edition
ii. Beardwell, Holden, Claydon (2004) : Prentice Hall

“Human Resource Management , a Contemporary
Approach” 4th Edition
iii. Wayne F. Cascio (2006): Tata McGraw-Hill

“Managing Human Resources”
8
1 – HR in the 21st Century
2 – The Strategic Role and Outcome of HRM
3 - HR Strategies & Organizational Performance

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HRM and the 21st Century
 Due to Internet technologies, organizations are undergoing a complete

transformation. The 21st century organization must adapt itself to management
via the web.
 Intellectual capital will be critical to success. Advantage of bringing new

technologies to the market will be shorter. Technologies will let competitors
match them almost immediately.
 In such times, it will be critical to attract and retain the best thinkers.
 Retaining and attracting the top talent will require more than just paychecks. It
will require a culture of empowering people, and a reward system that rewards
the best as if they were the owners of the company.
 Intellectual capital will be called on from around the globe. A global corporation
might be based in the US but does its software programming in Sri Lanka,
engineering in Germany, its manufacturing in China, and is linked via the
Internet to allow employees to interact and work in real time.
11
HRM and the 21st Century Corporation
20th Century Corporation 21st Century Corporation
Predicated itself on stability Predicated itself on constant change

Organized around rigid hierarchies Organized around networks and teams
Built on self-sufficiency Built on shifting partnerships and
alliances
Organizational chart defined as a Organizational chart more likely to be a
shrinking pyramid leading to the CEO flat web, intricately woven that links
partners, employees, external
contractors, suppliers, and customers
in various collaborations
Constructed on bricks and mortar Constructed on knowledge and
technological advantages.
12
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Introduction to HRM
 Human Resources Strategy in a firm is a

firm’s deliberate and planned use of human
resources to help it gain a competitive
advantage.
 The HRM strategy of a firm is its grand plan

to ensure that it effectively uses its people to
accomplish its mission.
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HUMAN RESOURCE MANAGEMENT
• Employer/Organizational Objectives
• Organizational Structure
• Job Identification, Analysis & Design
• Job Specification (Before Joining)
•
• Job Description (After Joining)

• Tasks, Activities, Responsibilities, Accountabilities
• Power (Financial/Administrative)
•
• Reporting Structure
• Manpower Planning, Recruitment, Induction
• Training & Development
Employee Objectives JOB Employer Objectives

Work (Scope & Depth) Growth in
Growth in Services
• Goods & Services
• Family & Self
• Customer Satisfaction
• Profession Employee – Employer
EMPLOYER
EMPLOYEE • Revenue Generation
• Career Relationship
• Profits
• Security
Performance • Return on Equity (ROE)
• Social Status Compensation &
Management • Expansion of Business
Rewards
• Corporate Reputation
• Performance Evaluation • Salary

• Increments • Benefits
• Bonus • Facilities and Perks
• Incentives • Allowances
• Career Development • Professional, Career, Societal
• Ultimate Potential Recognition
• Internal + External (Mkt) Equity
15
Performance & Compensation Management by Shah M Saad Husain 16
17
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Outcomes of HRM Practices
 HRM practices make an important practical

difference in three key organizational
outcomes.
1. Productivity
2. Quality of Work Life
3. Profit : Total Revenue minus the Total Cost
20
Outcomes of HRM Practices:
1. Productivity
 A measure of the output of goods and
services relative to the input of labor, capital,
and equipment.
Higher productivity
 Leads to higher wages without boosting inflation.
 Is not working harder, it is working smarter.
 Is about doing more with fewer people, less money, less
time and space, and fewer resources.
21
MORE PRODUCTIVE ORGANIZATIONS GET MORE GOODS AND
SERVICES FROM A GIVEN AMOUNT OF LABOR, CAPITAL, EQUIPMENT.
22
1. Productivity Improvement
 Rebuild employee loyalty.
 Establish a clear link between rewards and

production.
 Say no to ‘Quick Fix’ approach.
 Emphasize on Continuous Improvement.
23
2. Quality of Work Life
 Two ways of looking at Quality of Work Life
(QWL)
• Organizational Conditions and Practices such as
promotion from within, democratic supervision, participative
management, employee involvement, safe working
conditions, mutual trust, team work.
• Employees’ Perceptions that they are respected, relatively

well satisfied, and able to grow and develop as human beings
and professionals.
24
3. Profit
 Management Systems that produce profits through people share the
following dimensions:
1. Employment Security.
2. Selective Hiring.
3. Self-managed teams and decentralization. High Compensation

contingent on organizational performance.
4. Extensive Training, Development and Professional grooming.
5. Reduced differences in status. Respect for competence and

performance.
6. Sharing of information, effective communication systems.
7. Employee Care and Satisfaction.
8. Trust.
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4. Roles of HR Professionals Today
“ The greatness of an Organisation is due to the Greatness of its People”, Eiji Toyoda
1. Strategic Partners: work with multiple stakeholders to achieve business

plans.
2. Innovators: create an environment that supports continuous learning and

improvement.
3. Collaborators: create win-win situations with internal and external

stakeholders.
4. Change facilitators: anticipate the need for change, think, conceptualize,

articulate, execute and energize organization to bring change.
27
HRM and Corporate Strategic Goals
 Human Resource Management is essential to

advance a firm’s strategic goals.
CORPORATE Linking Corporate Strategic Goals

STRATEGIC with
GOALS
HRM
CORPORATE
STRATEGY
HR
STRATEGY
HR
TACTICS
HR
HR
PLANS POLICIES,
SYSTEMS,
SOPs HR
PRACTICES
28
HR’s Strategic Role
 Successful firms align their HR strategies

and tactics with:
1. Environmental Opportunities and Threats.
2. Business Strategies.
3. Organizational Unique Characteristics.
4. Organization’s Competence.
29
Selecting HR Strategies to Increase Firm’s Performances
 HR Strategy’s effect on a firm’s performance

depends on how well it ‘fits’ with other factors
 Fit refers to the consistency and compatibility

between HR strategies and other important
aspects of the organization
30
Fit with Organization Strategies
 Corporate Strategy is referred to as the mix

of businesses a corporation decides to hold
and the flow of resources among those
businesses. e.g., PARCO
 Business Unit Strategies are those that are

formulated and implemented by a firm that is
relatively autonomous, even if it is part of a
larger corporation. eg. PAPCO
31
Effective HR Strategy Formulation and Implementation

Fit with the Environment
 HR strategies should help the organization better exploit
environmental opportunities or cope with the unique
environmental forces that affect it
 The relevant environment can be measured in terms of four

dimensions:
1. Degree of uncertainty: how much accurate information is

available to make appropriate business decisions
2. Volatility: how often does the environment change
3. Magnitude of change: how drastic the changes are
4. Complexity: how many different elements in the environment

affect the firm either individually or together
33
HR Strategies for Firms with Different Environmental Characteristics

Fit with Organizational Characteristics
1. The production process for converting inputs into

outputs
 Routine production process benefits from HR strategies that

emphasize control
example: Specific job description and job specific trainings
 Firms with non-routine production processes such as

advertising firms, custom printers, and biotechnology
companies, benefit from flexible HR strategies that support
organizational adaptability, quick response to change and
creative decision making
example: Broad job classes, loose work planning, and generic training
35
2. The Firm’s Market Posture
 Firms that experience high sales growth and engage in product

innovation for a wide market segment benefit from HR
Strategies that support growth and entrepreneurial activities
example: External recruitment or buying skills, decentralized pay
decisions, customized appraisal
 Firms with low rates of sales growth and limited product

innovation for a narrow market segment benefit from HR
strategies that emphasize efficiency, control, and firm specific
knowledge
example: Internal recruitment or ‘making skills’. On-the-job training,
and high dependence on superiors
36
3. The firm’s overall managerial philosophy
 Companies whose top executives are risk-averse and operate

with an autocratic leadership style, and are inwardly focused
use HR strategies that match this outlook
example: Seniority based pay, formal hiring and socializing of new employees,
selection decisions made by the HR department and use of top-down
communication channels.
 Management characterized by high risk taking, participation,

egalitarianism, and external, proactive environmental orientation
use HR strategies that fits this outlook
example: include variable pay, giving supervisors a major role in hiring
decisions, up-and-down communication channels, and multiple inputs for
performance appraisals
37
4. The firm’s organizational structure
 Highly formal organizations that are divided into functional

areas like marketing, finance, production, etc, and
concentrate decision making on top: HR strategies for
such organizations include a control emphasis,
centralized pay decisions, explicit job descriptions, and
job-based pay.
 Firms whose structures are less regimented benefit from

HR strategies that include informal hiring and socializing
of new employees, decentralized pay decisions, broad job
classes and individual-based pay.
38
5. The firm’s organizational culture
 Companies that foster an entrepreneurial climate have loose work

planning, informal hiring and socializing of new employees and
variable pay.
 Firms that discourage entrepreneurship generally prefer a control

emphasis, detailed work planning, formal hiring and socializing of
new employees, and fixed pay.
 Firms with emphasis on moral commitment- the extent to which a

firm tries to foster a long-term emotional attachment between the
firm and the employees have emphasis on preventive vs. remedial
disciplinary action to handle employee mistakes, and explicit ethical
codes to monitor and guide behavior.
 Firms that are low on moral commitment rely on authoritarian

relationship between employee and company.
39
Fit with Organizational Capabilities
 Distinctive competencies of a firm are its

capabilities such as technology,
management systems, reputation, etc, that
give it a Competitive Edge
 HR strategies should enhance a firm’s

performance by:
1 . helping the company exploit its specific advantages or strengths
while avoiding weaknesses
2. assisting the firm in better utilizing its unique blend of human

resource skills and assets
40
HR Strategies to Fit Three Major Types of Business Strategies

HR Strategies That Fit Two Major Types of Business Strategies

Choosing consistent and appropriate HR tactics to implement
HR strategies
 The best-laid HR strategies may fail when specific HR programs are

poorly chosen or implemented
 In addition to fitting with each of the four organizational

characteristics; organizational strategy, environment, organizational
capabilities and characteristics, a firm’s HR strategies should be
mutually consistent
 HR strategies are likely to be successful if they reinforce one

another rather than work at cross-purposes.
example: Working in teams, but traditional individual based
performance appraisals
43
Choosing Consistent and Appropriate HR Tactics to Implement
HR Strategies

Competencies Required of HR Department to Become a Full Strategic Partner

PARCO`s Growth and HR Strategy • Projects
• Engineering
• Operations
• Projects • Managerial
• Engineering • Marketing
• Operations • Business Diversification
• Managerial
• Marketing
• Projects
• Engineering
Talent
HR Management Management
• Linking HR & Corporate Goals  Sourcing & Recruitment
• Performance Management
 Performance
Personnel • Training and Development
Management
• Job Evaluation
 Payroll • Rightsizing  Learning & Development
 Benefits • Salary Restructuring  Succession Planning

• Employee Surveys
 Leave  Leadership Development
• HR Processes
 Recruitment • SAP & HR Data Management
 Compensation
 Industrial Relations • Talent Inventory  Work Life Balance
1981 2008 2012 2014

Single Product Multi Product Multi Business
Local National Multinational
Talent Management and Corporate Strategy at HASCOL
• VITOL increases shareholding to 25%
• HPL largest private OMC in Pakistan
• 2001 – Company incorporated • VITOL acquires 15% shareholding • Lubricant Plant construction starts
• 2005 – Oil Marketing Licence obtained • Joint Venture with Vitol (HTL) • Largest Petroleum Terminal
• 2014 – listed on Pakistan Stock Exchange • Other JVs, Terminals and Projects
2001 – 2015 2016 2017

Profits (PKR Million) 1,133 1,216 To be announced
Sales (Million MT) 1.26 1.85 (Target) 2.25
Market Share 5.4% 7.2% (Jan-Jun) 9.8%
Retail Outlets 300 400 (Target) 500
Terminals/Depots 6 8 (Jan-Jun) 10
Talent Management
HR Management
Personnel • Corporate Planning drives HR
• Linking HR & Corporate Goals Planning
• Payroll • Performance Appraisal • Manpower Planning + Staffing
• Benefits • Training and Development
• Performance Management
• Administrative Services • Job Evaluation
• Learning + Development
• Rightsizing
• Leave • Career + Succession Planning
• Salary Restructuring
• Time Management • Employee Surveys
• HR Processes + Policy Manual
• Recruitment • Leadership Development
• HR Data Management
• Talent Inventory • Equitable Compensation
• Work Life Balance
Local National Multinational

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Human Resource Management

HRM 401, Summer 2019

Shah M Saad Husain

41 years management experience with

in General Management, HR, Marketing, Project

with PIDC, Habib Group, British Petroleum, BHP

32 years teaching experience at IBA, CBM,

 Knowledge of HR Management Theory, Concepts, Processes

Instructions for Students

 Bring Course File to each class

 All Quizzes are open book

 For an overall A grade in the course:

I. Michael Armstrong, (2007): Kogan Page “Handbook

ii. Beardwell, Holden, Claydon (2004) : Prentice Hall

iii. Wayne F. Cascio (2006): Tata McGraw-Hill

2 – The Strategic Role and Outcome of HRM

3 - HR Strategies & Organizational Performance

 Due to Internet technologies, organizations are undergoing a complete

 Intellectual capital will be critical to success. Advantage of bringing new

20th Century Corporation 21st Century Corporation

Predicated itself on stability Predicated itself on constant change

 Human Resources Strategy in a firm is a

 The HRM strategy of a firm is its grand plan

• Job Description (After Joining)

Employee Objectives JOB Employer Objectives

• Performance Evaluation • Salary

 HRM practices make an important practical

2. Quality of Work Life

3. Profit : Total Revenue minus the Total Cost

 Establish a clear link between rewards and

 Say no to ‘Quick Fix’ approach.

 Emphasize on Continuous Improvement.

• Employees’ Perceptions that they are respected, relatively

3. Self-managed teams and decentralization. High Compensation

4. Extensive Training, Development and Professional grooming.

5. Reduced differences in status. Respect for competence and

6. Sharing of information, effective communication systems.

7. Employee Care and Satisfaction.

1. Strategic Partners: work with multiple stakeholders to achieve business

2. Innovators: create an environment that supports continuous learning and

3. Collaborators: create win-win situations with internal and external

4. Change facilitators: anticipate the need for change, think, conceptualize,

 Human Resource Management is essential to

CORPORATE Linking Corporate Strategic Goals

 Successful firms align their HR strategies

1. Environmental Opportunities and Threats.

3. Organizational Unique Characteristics.

 HR Strategy’s effect on a firm’s performance

 Fit refers to the consistency and compatibility

 Corporate Strategy is referred to as the mix

 Business Unit Strategies are those that are

Performance & Compensation Management by Shah M Saad Husain 32

 The relevant environment can be measured in terms of four

1. Degree of uncertainty: how much accurate information is

2. Volatility: how often does the environment change

3. Magnitude of change: how drastic the changes are

4. Complexity: how many different elements in the environment

Performance & Compensation Management by Shah M Saad Husain 34

1. The production process for converting inputs into

 Routine production process benefits from HR strategies that

 Firms with non-routine production processes such as

 Firms that experience high sales growth and engage in product

 Firms with low rates of sales growth and limited product