Managing People and Organization

Module 2 – Lecture Sequence 1 and 2

BITS Pilani Dr. Annapoorna Gopal

Pilani | Dubai | Goa | Hyderabad
Nature, Scope and Context of HRM – Learning Outcomes
• After studying this chapter you should be able to:

– Explain what human resource management(HRM) is and its relation

to the management process
– Discuss trends in HRM
– Identify environmental factors that have a bearing on HRM
– Describe each environmental factor and its impact on HR functions
– Identify the environmental factors that have a bearing on HRM
– Describe each environmental factor and its impact on HR functions

MBA ZG 511 Managing People and Organizations BITS Pilani, Pilani Campus
 People lend competitive advantage

1. Human resource management (HRM) is the most happening function as of

now
2. How do people lend competitive advantage? There are several ways.
1. First, people offer skills, capabilities, systems, practices, speed, language,
bonding and behaviours, which help execute firm’s strategies successfully
2. Secondly, by aligning human resources (HR) plans to business plans, HR
managers are becoming strategic partners
3. Third, innovation is the key to competitive advantage
4. Fourth, HR function seeks to convert an adverse situation into an
opportunity
5. Fifth, organisational designs do not remain static over a period of time
6. Sixth, HR executive is becoming an effective change agent

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‘Best fit’ approach to HRM

3 strategies that help an organization gain competitive advantage are

1. Innovation Being an unique producer

2. Quality Delivering high quality goods and services

3. Cost leadership Leveraging on all possible means to save

on cost

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Nature of HRM

1. HRM consists of people-related functions as hiring, training and

development, performance review, compensation, safety and health,
welfare, industrial relations and the like
2. HRM necessitates alignment of HR policies and practices with the
organisation’s strategies
3. HRM involves the application of management principles and functions
4. HRM assumes that it is the people who make the difference
5. HR activities, both doables and deliverables, are not the sole
responsibility of the HR specialists
6. HR functions are not confined to business establishments only

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HRM Functions

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HRM – Functions and Objectives

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HRM - Organization

HRM in a Small-scale Unit

HRM in a Large-scale Unit Factors influencing HR team structure

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HRM – Composition of Team

Composition of HR Department
Can the HR function be outsourced?

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HRM Paradoxes

1. Supporters of HRM claim that the field has grown from IR to PM to HRM
to HCM, claiming that HR manager now plays a strategic role in a firm
unlike in the past when it was purely an administrative function
2. Supporters of HRM claim that the HR manager is a change agent and a
transformational leader, and his or her function is panacea for all
organisational ills and societal evils
3. An Arthur Andersen survey showed that Human Resources (HR)
executives were missing two things that could improve their
effectiveness—support from top management and sufficient financial
resources
4. HRM is not much sought after course in academics. At top IIMs, less than
2 per cent of the students opt for HR subject

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 Personnel Policies

Policies
It is a statement of intention committing the management to a general course of action
without spelling out the detailed procedure by which it has to be implemented. Example are :
– Policy of hiring people with due respect to factors like reservation, sex, marital status, and the like
– Policy with regard to medical assistance
There are five principal sources for determining the content and meaning of policies:
– past practice in the organization
– prevailing practice in rival companies
– attitudes and philosophy of founders of the company as also its directors and the top
management
– attitudes and philosophy of middle and lower management
– the knowledge and experience gained from handling countless personnel problems on a day-to-
day basis
– Policies must be stable. Stability creates a climate of security and removes uncertainty from the
minds of employees

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Personnel Principles

Principles
– If policy is a guide for managerial decisions and actions, principle is the
fundamental truth established by research, investigation and analysis
– Some of the personnel principles are:
• Principle of individual development
• Principle of scientific selection
• Principle of free flow of communication
• Principle of participation
• Principle of fair remuneration
• Principle of incentive
• Principle of dignity of labour
• Principle of labour management co-operation
• Principle of team spirit
• Principle of contribution to national prosperity

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 13
HR Competency Model

POMCL ZC441Human Resource Management

Source: Adapted from Human Resource Management by Christopher Mabey,

et. al., Blackwell Business, p. 31
BITS Pilani, Pilani Campus
Line and Staff Managers

• Authority is the right to make decisions, to direct the work of

others, and to give orders. Managers usually distinguish
between line authority and staff authority
• Line authority gives you the right to issue orders
• Staff authority gives you the right to advise others in the
organization

HR Duties of Line Manager HR Duties of Staff Manager

Line function inside of HR
Job placement
department
Orientation & Training Coordination
Performance Assist and Advice
Labor costs  
Development  
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HRM Models – An analytical framework
for studying HRM
1. Fombrun, Tichy and Devanna Model
2. The Harvard Model
3. The Guest Model
4. The Warwick Model
5. The Ulrich Model

For our study

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Evolution of HRM

Development
Period Outlook Emphasis Status
Status
Statutory,
Pragmatism of
1920s–1930s Beginning welfare, Clerical
capitalists
paternalism
Struggling for Technical, Introduction of
1940s–1960s Administrative
recognition legalistic techniques
Regulatory,
Professional, conforming,
Achieving
1970s–1980s legalistic, imposition of Managerial
sophistication
impersonal standards on
other functions
Human values,
1990s Promising Philosophical productivity Executive
through people

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From PM to HRM to HCM

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Imperatives for HCM

• Not all organisations are ripe to implement HCM. It works best where:
– The organisation is a people-oriented relatively large business
– The environment is not simple and stable
– The bsuiness has investors or stakeholders who are interested in the medium to longer term
– The organisation is focused on growth through differentiation rather than cost leadership
– The organisation is managed strategically
– Planning is bottom-up as well as top-down
– The organisation acknowledges complexity and is based on networks and relationships rather
than structures and hierarchies
– Managers take responsibility for people management
– The culture is relatively sophisticated
– The organisation uses technology effectively

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Context of HRM

External Forces Internal Forces

• Political-Legal
– Legislature • Strategy, Task and Leadership
– Executive
– Judiciary
• Unions
• Economic
– Suppliers
– Competitors • Organisational Culture and
– Customers
– Economic Growth Conflict
– Industrial Labour
– Diversity • Professional Bodies
– Globalisation
• Technological
• Cultural

Discussion : Do you think any factor been left out? Any one (out of
those included) is non-contextual?
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HR and Technology

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