INTRODUCTION OF HRM

“There is no ‘magic’ in the success of companies.

The secret of their success is simply the way that treat their employees”

Dr. Vaneeta Aggarwal

• According to Adi Godrej,

“all corporate strengths are

dependent on people.”
 Human Resource Management
• ‘The real sources of competitive leverage are
the culture and capabilities of your organization
that derive from how you manage your people.’
Human Resource Management
• “HRM is the function performed in
organizations that facilitates the most
effective use of people to achieve
organizational and individual goals.”
– Ivancevich and Glueck
Human Resource Management
Definition 1 – Integration
HRM is a series of integrated decisions that form the
employment relationships; their quality contributes to
the ability of the organizations and the employees to
achieve their objectives
 Human Resource Management

Definition 2- Influencing
• HRM is concerned with the people dimensions
management. Since every organization is made
up of people ,acquiring their services,
developing their skills , motivating them to
higher levels of performance and ensuring that
they continue to maintain their commitment to
the organization are essential to achieving
organizational objectives.
This is true regardless of the type of the
organization- govt, business education , health,
recreational or NGO
Definition 3 Applicability
• HRM is planning, organizing directing and
controlling the procurement , development,
compensation , integration, maintenance, and
separation of human resources to the end that
individual, organizational and social objectives are
accomplished.

Core Elements of HRM

Organizations ------People ------ Management

Meaning of HRM

It is concerned with management of people from Recruitment to

Retirement

To select right person, at the right place for the right job.
 ESSENTIALS IN THE DEFINITION
OF HRM
It is people who staff the organization and manage organizations

HRM involves application of management functions and principals.

Functions and principals are applied to acquisitioning, developing ,
maintaining and remunerating employees

Decisions on different aspects of employees must be consistent with

other decisions on HR

Decisions made must influence the effectiveness of the organization,

i.e. it should result in betterment of services to customers or
productivity
HR HISTORY
• Hiring & Firing
• Unions emerged: Labour relations specialists

• Welfare

• Subspecialties as :
Staffing /Training/Compensation/Appraisal System
• Late 70’s HR professionals mastered the activities of
Staffing, Development, Appraisals & Rewards.

• By 1980’s organizational design and communication, got

added

• Now the concept of learning organization , retention,

downsizing, flexi time, self appraisal, HRA, work-life
ELECTRONIC-HRM

• E-HRM is the (planning, implementation and)

application of information technology for both
networking and supporting at least two individual or
collective actors in their shared performing of HR-
activities.
• E-HRM is the devolution of HR functions to
management and employees.
• They access these functions typically via intranet
or other web-technology channels for HR activities.
 HOW IS PM DIFFERENT FROM HRM
Personnel Management and HRM differ in scope

PM is viewed as a tool. The behavior of which could be manipulated for the

benefit of the organization and replaced when it is worn out. It was a routine
activity meant to hire new employees and to maintain personal records. It
was never considered as a strategic management of business.

HRM would view people as an important source or asset to be used for the
benefit of the organization , employees and society.
Operative Functions of HRM
HUMAN RESOURCE FUNCTIONS
Forecasting the human resource requirements necessary for the organization to
achieve its objective – both in terms of number of employees and skills.

Developing and implementing a plan to meet the manpower requirements.

Carrying out job analysis to establish the specific requirements for individual jobs
within an organization.

Recruiting and selecting personnel to fill specific jobs within an organization.

Designing systems for appraising the performance of individuals.

Orienting and training employees.

Designing and implementing management and organizational development

programmes.
HUMAN RESOURCE FUNCTIONS
Designing and implementing compensation system for all employee and have
systems for promotions and transfer

Assisting employees in developing career plans.

Employee communication , personal counseling, personal research etc

Departmental administration programs – Planning, record keeping, reporting ,policy

formulation , and general administration.

Implement activities to ensure proper health and sanitation and safe work place

Adherence to Government norms and regulations

 STRATEGY

K Ashwathappa defines strategy as:

• It is a future oriented plan for interacting with the competitive
environment to achieve organizational goals.
• Strategy is a framework for managerial decisions

According to Chandler (1962) :

‘The determination of the long-term goals and objectives of an
enterprise, and the adoption of courses of action and the allocation of
resources necessary for carrying out those goals.’

STRATEGY is the direction and scope of an organisation over long term

, matching its resources to its changing environment and in particular
its markets, customers so as to meet stakeholders interests.
STRATEGY HAS THREE FUNDAMENTAL
CHARACTERISTICS:

1.FORWARD LOOKING:
It is concerned with both ends and means.
Strategies define longer-term goals but they also cover how those
goals will be attained.

Boxall (1996) explained: ‘Strategy should be understood as a

framework of critical ends and means.’
2. ORGANIZATIONAL CAPABILITY OF A FIRM (ITS
CAPACITY TO FUNCTION EFFECTIVELY DEPENDS ON
ITS RESOURCE CAPABILITY.
It was expanded by Wernerfelt (1984) who explained that
Strategy ‘is a balance between the exploitation of existing
resources and the development of new ones’.
3. STRATEGIC FIT –
The need when developing HR strategies to achieve congruence
between them and the organization’s business strategies within the
context of its external and internal environment.
HR STRATEGY
Richardson and Thompson (1999) suggest that:
A strategy, whether it is an HR strategy or any other kind of management strategy
must have two key elements: there must be strategic objectives (i.e. things the
strategy is supposed to achieve), and there must be a plan of action (i.e. the
means by which it is proposed that the objectives will be met).

Dyer and Reeves (1995) as ‘internally consistent bundles of human

resource practices’.
According to Deepak kumar Bhattacharya
“HR strategy is a pattern of decisions concerning policies and practices
concerning with the HR system”.
STRATEGIC HUMAN RESOURCE MANAGEMENT (SHRM)
OTHER SOURCES…)

It is a competency based approach for management

of HR.
It focuses on developing HR for sustainable
competitive advantage

It is an approach that defines how the organization’s

goals will be achieved through people by means of HR
strategies and integrated HR policies and practices-
MICHAEL ARMSTRONG
ROLE OF HR STRATEGY IN STRATEGIC
MANAGEMENT

There are number of theories which define the role of HR strategy

1. Behavioural role theory ( Katz and Kahn (1978), Jackson &

Schuler (1995)) :
It considers employee behaviours as key to successful strategy
implementation. By aligning hr policies & practices with
organisation wide strategy , employees can fulfil their role
expectations within the organisation

2. Resource based theory (Barney (1991) , Prahalad & Hamel

(1990)) :
It suggests that HR has the sustainable competitive advantage for the
organisation.
This is because HR is inimitable and non-substitutable source for
achieving competitive advantage.
ROLE OF HR STRATEGY IN STRATEGIC
MANAGEMENT

3. Human capital theory (Becker (1964)) :

It suggests the strategic importance to HR like other economic assets
as knowledge., skills and abilities of the people also have economic
value.

4. Transaction cost theory (Williamson(1981)):

It suggests that strategic HR approach can ensure cost minimisation
as this will enhance periodic monitoring and governance
5. Agency theory (Eisenhardt (1989)):
Strategic approach to HR aligns agents ( employees) and principals
(employers) interests and thereby ensures streamlining of
employment relations and systems within the organisation.

All these theories are grouped under RATIONAL CHOICE

THEORIES OF HR.
 HRM Vs SHRM

BASIS FOR HRM SHRM

COMPARISON
Meaning Human resource SHRM is a managerial
management (HRM) function which implies
implies the governance of framing of HR strategies in
manpower of the such a way to direct
organization in a thorough employees efforts towards
and structured manner. the goals of organization.
Nature Reactive Proactive
Responsibility lies with Staff Specialist Line Manager
Approach Fragmented Integrated
Scope Concerned with employee Concerned with internal
relations and external relations
Time horizon Short term Long term
Basic factor Capital and products People and knowledge
 HRM Vs SHRM

BASIS FOR HRM SHRM

COMPARISON

Change Follows change Initiates change

Accountability Cost center Investment center

Control Stringent control over It exhibits leniency

employees
CRITERIA FOR AN EFFECTIVE HR STRATEGY

• It should satisfy business needs.

• It is founded on detailed analysis and study, not just wishful

thinking.

• It can be turned into actionable programmes that anticipate

implementation requirements and problems.

• It is coherent and integrated, being composed of components that

fit with and support each other.

• It takes account of the needs of line managers and employees

generally as well as those of the organization and its other
stakeholders.
LEVELS OF STRATEGY
CORPORATE LEVEL: This strategy is influenced by the mission of the
organisation
It addresses the issues :
 Overall scope of an organisation
 How to run in structural and financial terms
 How resources are allocated to different operations
COMPETITIVE OR BUSINESS STRATEGY:
This strategy is adopted by an organisation in order to have strong market
position.
It explains:
 How to compete in the market.
 Which products or services should be developed and offered to which markets
 To what extent it meets customers need
 Does it achieve the objectives of the organisations like long term profitability
etc.

OPERATIONAL STRATEGIES:
These are adopted at the functional level or the operational level.
POLICY

 A policy is a pre determined established guidelines towards the attainment of

accepted goals and objectives.
 Such guidelines facilitates properly designed efforts to accomplish the
strategic intent.
 Policy is not a strategy or a tactic

ACCORDING TO MICHAEL ARMSTRONG:

HR policies provide guidelines on how key aspects of people management

should be handled.
The aim is to ensure that any HR issues are dealt with consistently in
accordance with the values of the organization in line with certain defined
principles.
All organizations have HR policies.
POLICY
Policy is different from objectives:

Objectives are specific goals or aims , in quantitative terms and can be considered
as something which an individual or group seeks to accomplish.
Objective is something to accomplish whereas a policy is a guide to accomplish
it.

Policy is different from procedure:

Procedure defines the manner or way of accomplishing something i.e. it is a

process and method. While policy forms part of a framework of general
principles.

Policy is different from programmes:

Programmes are developed on the basis of policies with a view to implement them
and accordingly programmes involve one additional step beyond policy to simplify
the decisions.
The execution of programmes lead to specific actions including practices and
 HR POLICIES AND
PROCEDURES
A comprehensive coverage of policies embrace any action or decision, taken by
management or employees in relation to the working environment.

It includes the rights, responsibilities and actions.

Policy may be statement of :

 Standards for employee attendance
 Management obligations in grievance administration
 Conditions under which loans will be granted
 Conditions under which an employee is suspended or terminated

PROCEDURES
Procedures prescribe the details for carrying out the policies.
It tells about the specific rules and regulations, the steps, time, place and
personnel responsible for implementing policies.
It also clarifies what is to be done in particular circumstances.
Need for policies

• Ensure consistent treatment

• Continuity of action
• Standard of performance
• Help build employee motivation and loyalty
• Help resolve intrapersonal, interpersonal and
intergroup conflicts.
ADMINISTERING POLICIES

• Uniformity in administration is desirable when circumstances are

similar among the various individuals and groups concerned.
Customs amongst various groups and parties that have been in
operation for sometime and needs of different groups of employees, etc.,
influences decisions in regard to degree and extent of uniformity.

• Questions of rigidity of administration and consistency or flexibility

of interpretation must also be faced. In weighing special consideration
to an employee or penalty for a violation, many factors must be
taken into account: work record; demonstrated capability; history of
relationships ; impact on other and on further situations; knowledge at
the individual’s disposal; reasons; obligations to the organisation;
respective values etc.
Sources for determining the
content of policies

• Past practices
• Prevailing practices
• Attitude and philosophy of the founder and
management
• Knowledge and experience gained from
countless HR problems on a day to day basis
GUIDELINES FOR POLICY FORMULATION

A number of guidelines for policy writing have been well established and are
worth enumerating:

1. Purpose: A statement of purpose or rationale helps to understand the policy and

ensure acceptance of it.

2. Semantics: choice of words should be understandable. Wording should avoid

irritating expressions that denote inferiority e.g., ‘You are forbidden.’

3. Tone: A warm, understanding tone will help to show the interest and concern of
management. This means avoidance of legalistic language as much as possible.

4. Form: An outline form may be useful for management references and

application. But outlines are difficult for employees to follow. Relatively short
paragraphs, some use of underlining , and adequate spacing(double rather than
single) encourage reading.
5. Clarity: Short sentences are better than long ones and simple sentences are
easier to read and comprehend than complex or compound sentences.
COMMUNICATING THE POLICIES

Management has a definite responsibility to see that

employees become familiar with all policies that affect them.

WAYS OF COMMUNICATION

WRITTEN MEDIA - employee handbooks, bulletin boards,

company periodicals, etc.
In orientation sessions for new and old employees:
ORAL EXPLANATION - can be accompanied by visual aids
such as film strips, placards and funnel boards.
Organization of HR Department

1. Its concerned with the relationships of management to employees

2. Its concerned with the relationships of employees to employees in all
matter
3. HR department is staff department and has a structure of line type
4. Organization of HR function depends on the size, structure, range and
depth of actions, needs, capacities, nature and location of
organization.
5. The degree to which the organization takes HR function seriously
Organizational Structure Personnel
Department
 The Role of Human
Resources Department

As a specialist

As a facilitator

As a change agent

As a controller
 CHALLENGES OF HRM IN INDIAN ECONOMY

World becoming a Global Village

Corporate Re-organizations
New Organizational Structures- Virtual , boundary less , flat ,
Diverse workforce- e.g. Teenagers, Nuclear families, working mothers
Gen Y
Change in Employee Expectations- more of benefits
 People Focus – concept of flexi time

Employee Engagement
Attrition
 CONCLUSION

Organizations are now defined as :

• The core competencies within the organization

• The people within the organization
• The organizational culture or shared values and knowledge or learning.

The HR systems needs to be retained and constantly upgraded and changed:

People will always need to be hired and trained

Process will always need to be created and upgraded
Cultures will always need to be established and transformed.

HR practices must

Be aligned to business realities, meeting deadlines , making profits, leveraging

technology, satisfying investors and to serving customers ,.

HRM is to create organizational capabilities that will lead to competitiveness