HUMAN RESOURCES MANAGEMENT

MBA 1009

INTRODUCTION TO HRM
A company that loses all its equipments but retains the skills and know-how of its workforce could be back in business relatively quickly, but one that loses its workforce, while keeping its equipment, will find it much more difficult to recover.

-Becker,

Huselid, Scorecard

Ulrich

(2001).

The

HR
2

PSM/ DOMS/ UOM/ CH1

Contd
My main job was developing talent. I was a gardener providing water and other nourishments. Ofcourse, I had to pull some weeds too. - Jack Welch, former CEO of GE in an interview with Business Week

PSM/ DOMS/ UOM/ CH1

Contd
The employee at Taj is viewed as an asset and is the real profit center. He or she is the very reason for our survival. The creation of the Taj People Philosophy displays our commitment to and belief in our people. We want an organization with a very clear philosophy, where we can treasure people and build from within. - Bernard Martyris , Senior Vice-President, HR, Indian Hotels Company Ltd.,
PSM/ DOMS/ UOM/ CH1 4

Contd..
Unlike a factory which churns out goods, FedEx as a service company has only people-couriers to pick up and deliver goods and document, customer representatives and sales executives. If we hire the right people, train them, equip them and manage them properly, they will provide service that will satisfy customers and in turn those customers will reward us with business after business that generates profits. - Malcolm Sullivan, MD, FedEx (South Pacific)
PSM/ DOMS/ UOM/ CH1 5

Contd
The most important mission for a Japanese manager is to develop a healthy relationship with his employees, to create a family-like feeling within the corporation, a feeling that employees and managers share the same fate. Those companies that are most successful in Japan are those that have managed to create a shared sense of fate among all employees, what Americans call labor and management, and the shareholders. - Akio Morita, Founder of Sony Corporation in his biography, Made in Japan.
PSM/ DOMS/ UOM/ CH1 6

HUMAN RESOURCE MANAGEMENT

It is a management function concerned with hiring, motivating and maintaining people in an organization. It may be defined as : A strategic approach to managing employment relations which emphasizes that leveraging peoples capabilities is critical to achieving sustainable competitive advantage, this being achieved through a distinctive set of integrated employment policies, programmes and practices. (Bartton & Gold, 2007)
PSM/ DOMS/ UOM/ CH1 7

PM AND HRM
1) Is PM and HRM essentially the same or different concepts? 2) Is there a difference between HRM and HRD?

PSM/ DOMS/ UOM/ CH1

HRM, PM & HRD

HRM is a broad concept, Personnel management (PM) and human resource development (HRD) are a part of HRM. HRM differs from PM both in scope and orientation. PM has limited scope and an inverted orientation. HRD is more concerned with training and development, career planning and development, and OD.
PSM/ DOMS/ UOM/ CH1 9

DIFFERENCES BETWEEN HRM & PM

DIMENSION Employment Contract PERSONNEL MANAGEMENT Careful delineation of written contracts HUMAN RESOURCE MANAGEMENT Aim to go beyond contract

Rules

Importance of devising clear rules

Can do outlook, impatience with rule

Guide to management action

Procedures

Business need

Behaviour referent

Norms/customs and practices

Values/mission

Initiatives

Piecemeal
PSM/ DOMS/ UOM/ CH1

Integrated
10

Contd..
DIMENSION Speed of decision Slow PERSONNEL MANAGEMENT Fast HUMAN RESOURCE MANAGEMENT

Management role

Transactional

Transformational leadership

Communication

Indirect

Direct

Prized management skills

Negotiation

Facilitation

Conditions

Separately negotiated
PSM/ DOMS/ UOM/ CH1

Harmonisation
11

Contd..
DIMENSION Labour management PERSONNEL MANAGEMENT Collective-bargaining contracts HUMAN RESOURCE MANAGEMENT Individual contracts

Job categories and grades

Many

Few

Job design

Division of labour

Team work

Conflict handling

Reach temporary truce

Manage climate and culture

Focus of attention for interventions

Personnel procedures

Wide-ranging cultural, structural and personnel strategies

PSM/ DOMS/ UOM/ CH1

12

Contd
DIMENSION PERSONNEL MANAGEMENT HUMAN RESOURCE MANAGEMENT People are treated as assets to be used for the benefit of an organization, its employees and the society as a whole

Respect for employees

Labour is treated as a tool which is expendable and replaceable

Shared Interests

Interests of the organization are uppermost Precedes HRM

Mutuality of interests Latest in the evolution of the subject

Evolution

PSM/ DOMS/ UOM/ CH1

13

OBJECTIVES OF HRM

Personal objectives Functional objectives Organisational objectives Societal objectives

PSM/ DOMS/ UOM/ CH1 14

Societal 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.

PSM/ DOMS/ UOM/ CH1

15

Organizational Objectives
To recognize the role of HRM in bringing about organizational effectiveness. To make sure that HRM is not a standalone department, but rather a means to assist the organization with its primary objectives.
PSM/ DOMS/ UOM/ CH1 16

Functional Objectives
To maintain the departments contribution at a level appropriate to the organizations needs. The departments level of service must be tailored to fit the organization it serves.

PSM/ DOMS/ UOM/ CH1

17

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

PSM/ DOMS/ UOM/ CH1

18

HRM-FUNCTIONS
HRM OBJECTIVES SUPPORTING FUNCTIONS

Societal Objectives

Legal Compliance Benefits Unionmanagement relations

PSM/ DOMS/ UOM/ CH1

19

Contd.
Organizational Objectives Human Resource Planning Employee Relations Selection Training and Development Appraisal Placement Assessment
PSM/ DOMS/ UOM/ CH1 20

Contd
Functional Objectives Appraisal Placement Assessment

PSM/ DOMS/ UOM/ CH1

21

Contd
Personal Objectives
Training and Development Appraisal Placement Compensation Assessment
PSM/ DOMS/ UOM/ CH1 22

QUALITIES OF A GOOD HR MANAGER

Fairness and firmness Communication Skills Tactfulness and resourcefulness Sympathy and consideration Knowledge of labour and other terms Broad social outlook Competence (Creative thinking, analytical thinking, reasoning objectively, Problem Solving and Decision Making Ability) Leadership- Ability to inspire, motivate and persuade Personal Integrity Academic Qualifications
PSM/ DOMS/ UOM/ CH1 23

EVOLUTION OF HRM IN INDIA

PERIOD DEVELOPMENT STATUS OUTLOOK EMPHASIS STATUS 1920s-1930s Beginning Pragmatism of capitalists Statutory, welfare, paternalism Introduction of techniques Regulatory, conforming, imposition of standards on other functions Human values, productivity through people Clerical

1940s-1960s

Struggling for recognition

Technical, legalistic

Administrative

1970s-1980s

Achieving sophistication

Professional, legalistic, impersonal

Managerial

1990s

Promising

Philosophical

Executive

PSM/ DOMS/ UOM/ CH1

24

HRM MODEL
1. 2. 3. 4. 5. 6. 7. 8. 9. Nine HR areas identified by ASTD Training and Development Organization and Development Organization/ Job Design HRP Selection and Staffing Personnel Research and Information Systems Compensation/Benefits Employee Assistance Union/Labour Relations These nine areas have been termed spokes of the wheel in that each area impacts on the HR outputs: QWL, productivity, and readiness for change.
PSM/ DOMS/ UOM/ CH1 25

HRM COMPONENTS
Acquisition  HRP  Recruitmentinternal & external  Employee socialization Maintenance  Safety and health  Employee/Labour relations Development  Employee training  Mgt. Development  Career Development Motivation Job Design Performance Evaluations Rewards Job Evaluations Compensation/Benefits Discipline
26

     

PSM/ DOMS/ UOM/ CH1

FUNCTIONS OF HRM
FUNCTIONS OF HRM
Procurement Development Motivation

Managerial

Operative

& Compensation Maintenance Integration Emerging issues

PSM/ DOMS/ UOM/ CH1

27

Managerial Function
Planning Organizing Leading Controlling
PSM/ DOMS/ UOM/ CH1 28

Operative Functions 1) Procurement Functions

Job Analysis HR Planning Recruitment Selection Induction & Orientation Internal Mobility

PSM/ DOMS/ UOM/ CH1

29

2)Development Functions
Training Executive Development Career Planning & Development Human Resource Development

PSM/ DOMS/ UOM/ CH1

30

3) Motivation & Compensation

Job Design Work Scheduling Motivation Job Evaluation Performance Appraisal Compensation Administration Incentives & Benefits
PSM/ DOMS/ UOM/ CH1 31

4) Maintenance Functions
Health & Safety Employee Welfare Social Security Measures

PSM/ DOMS/ UOM/ CH1

32

5) Integration Functions
Discipline Teams and Team Works Collective Bargaining Employee Participation & Empowerment Industrial Relations Trade Unions & Employee Associations
PSM/ DOMS/ UOM/ CH1 33

6) Emerging Issues
Personal Records HR Accounting HR Audit HR Research HR Information Systems Stress Management & Counseling International HRM
PSM/ DOMS/ UOM/ CH1 34

IMPORTANCE OF HUMAN RESOURCES MANAGEMENT

The Strategic Nature Every organization is comprised of people Knowledge based economy-People dependent Hiring and keeping good people is critical to the success of every organization (Talent Acquisition and Retention) Harnessing employee commitment and keeping the workforce engaged Changing Roles of HR: HR as a change agent HR as innovator HR as a strategic partner
PSM/ DOMS/ UOM/ CH1 35

Does HR really create value?

Deloitte & Touch (2002) study titled as Creating Shareholder value through People clearly demonstrated that an organizations Human Capital practices represented as much as 43% of the difference between your market value and your competitors. Watson Wyatt (1999) Worldwide study on Human Capital Index involving over 400 companies revealed that superior human resource practices explained up to 30% increase in shareholder value.

PSM/ DOMS/ UOM/ CH1

36

Contd..
Hewitt Associates joint study with Michael Tracey led to their publishing the book entitled Double Digit Growth which again documents how carefully crafted HR practices can contribute to the double digit growth of the corporations. Stanford Professor Jeffrey Peiffers work published in his seminal book titled Competitive Advantage through People is yet another testimony that HR practices can contribute to the top and bottom line of corporations which can be measured and monitored.
PSM/ DOMS/ UOM/ CH1 37

CHALLENGES OF HRM
       

ENVIRONMENTAL CHALLENGES Rapid Change Internet Revolution Workforce Diversity Globalization Legislation Evolving Work and Family Roles Skill shortages and the rise in the Knowledge Sector Changing Demographics of Employees
PSM/ DOMS/ UOM/ CH1 38

Challenges of HRM-Contd
          ORGANIZATIONAL CHALLENGES Competitive Position- Cost, Quality, or Distinctive Capabilities Decentralization Downsizing Organizational Restructuring Self-Managed Work Teams Organizational Culture Technology Outsourcing Data Security Changing Attitude towards Unions
PSM/ DOMS/ UOM/ CH1 39

Challenges of HRM-Contd
       

INDIVIDUAL CHALLENGES Matching people and organizations Ethics and Social Responsibility Productivity Empowerment Brain Drain Job Insecurity Changing Employee Expectations Work Life Balance
PSM/ DOMS/ UOM/ CH1 40

EFFECTIVENESS OF HRM OUTCOMES- Four Cs ModelResearchers at HBS

Commitment Competence Congruence Cost-Effectiveness
PSM/ DOMS/ UOM/ CH1 41

HRM POLICIES
A policy is a plan of action. It is a statement of intention committing the management to a general course of action. HR policies provides guidelines for a wide variety of employment relationships in the organization. These guidelines identify the organizations intentions in recruitment, selection, promotion, development, compensation, organization, motivation and otherwise leading and directing people in the working organization. They serve as road map for employees and management.
PSM/ DOMS/ UOM/ CH1 42

AIMS OF HRM POLICIES

To enable an organization to fulfill or carry out the main objectives of general employment policy. To ensure employees are informed of these policies and secure their co-operation in their attainment. To provide such conditions of employment and procedures as will enable all the employees to develop a sincere sense of unity with the enterprise and to carry out their duties in the most willing and effective manner.
PSM/ DOMS/ UOM/ CH1 43

Contd..
To provide an adequate, competent and trained employees for all levels. To protect the common interests of all the parties and work in synergy. To encourage consultative participation of employees. To create mutual faith among the employees and management through leadership. To ensure training and development of employees. To ensure organizational justice both procedural and distributive. To harness employee commitment (organizational commitment as well as job commitment) and involvement. To keep the work force motivated through various efforts.
PSM/ DOMS/ UOM/ CH1 44

OBJECTIVES OF HRM POLICIES

General Objectives- Expresses the top managements basic philosophy of Human Resources. Specific Objectives- Refers to the various activities of HR like staffing, training, development, salary administration, motivation, employee services and benefits, employee records, labour relations, HR research etc., PSM/ DOMS/ UOM/ CH1 45

NEED FOR HR POLICY

The management is required to examine its basic convictions in the wake of policies of other organizations. Healthy HR policies help in creating a brand image of the business enterprise in the eyes of its stakeholders and benchmark it. Can help an organization become an employer of choice. Established policies ensure consistent treatment of all employees. Favouritism and discrimination can be eliminated or minimized.
PSM/ DOMS/ UOM/ CH1 46

Contd
Promotes organizational stability.
Act as control guides for delegated decision-making. Encourages definite individual decisions. Policies serve as standards or measuring yards for evaluating employee performance. Healthy policies promotes employee engagement, commitment, loyalty and involvement.
PSM/ DOMS/ UOM/ CH1 47

PRINCIPLES OF HR POLICIES
Principle of Principle of Principle of Principle of Principle of Principle of Principle of operation Principle of Principle of prosperity individual development scientific selection free flow of communication participation fair remuneration dignity of labour labour-management coteam spirit contribution to national
PSM/ DOMS/ UOM/ CH1 48

ESSENTIAL CHARACTERISTICS OF A HEALTHY HR POLICY

The policies should be definite, positive, clear and simple to comprehend. Policies should be stable, but not rigid. Policies should be in written form. Policies should be in sync with the objectives, philosophies and values that the organization wants to build.
PSM/ DOMS/ UOM/ CH1 49

Contd.
Consider the interest of all its stakeholders. Policies should encourage a two-way communication process. It should be progressive and consistent with professional practice and philosophy. It must make a measurable impact which can be evaluated. It has to be uniform in perspective.
PSM/ DOMS/ UOM/ CH1 50

WHY SHOULD HR POLICIES BE IN WRITING?

Writing policies makes a commitment on the part of an organization to adhere to it. It ensures uniformity of application. Minimizes favoritism and discrimination. Earns the loyalty and enthusiasm of employees as they are assured of organizational fair play and justice.
PSM/ DOMS/ UOM/ CH1 51

Contd.
It brings accountability on part of the management as well the employees. Writing helps to improve the corporate brand image. Provides something concrete on which to base an appeal in case of a dispute or conflict.

PSM/ DOMS/ UOM/ CH1

52

HR POLICY-TYPES/CATEGORIES
General Policies Equal Opportunity & Employment Practices Compensation Benefits Management Management Development and Training Disclosure
PSM/ DOMS/ UOM/ CH1 53

General Policies
Equal treatment specifically prohibit discrimination on the basis of race, sex, colour, national origin, religion, age, political affiliations, veteran status, disability etc.. Alcohol and other drugs- Not allowed to drink or take other drugs while working
PSM/ DOMS/ UOM/ CH1 54

Equal Opportunity & Employment Practices

Hiring Workplace harassment Types of employment and working hours Retention of employees
PSM/ DOMS/ UOM/ CH1 55

Compensation
Pay norms Absence Variable and base pay

PSM/ DOMS/ UOM/ CH1

56

Benefits Management
Perks Medical Claims Profit Sharing Holiday Packages etc.,
PSM/ DOMS/ UOM/ CH1 57

Management Development & Training

Training to develop new skills & adapt new technology Educational Programme Career Development Programme

PSM/ DOMS/ UOM/ CH1

58

Disclosure
Data Security Maintain each employee personal record

PSM/ DOMS/ UOM/ CH1

59

HUMAN RESOURCE PLANNING

HRP is the process by which an organization ensures that it has the right number and kinds of people, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.

PSM/ DOMS/ UOM/ CH1

60

IMPORTANCE OF HRP
Future personnel needs Part of Strategic planning Creating highly talented personnel International Strategies Foundation of Personnel functions Increasing investments in human resources Resistance to change and move Other benefits
PSM/ DOMS/ UOM/ CH1 61

Factors affecting HRP

Org. growth cycle and planning Types and Strategy of org. HRP Time horizons Type and quality of forecasting information Environmental Uncertainties

outsourcing Nature of jobs being filled

PSM/ DOMS/ UOM/ CH1

62

Steps involved in HRP process

Mission formulating Establishing Corporate Goals and Objectives Assessing current human resources Estimating supplies and demand for labour Matching demand with current in supplies of labour-Results rightsizing and outsourcing decisions
PSM/ DOMS/ UOM/ CH1 63

Human Resource Inventory

HRIS- A computerized system that assists in the processing of HRM information. Succession Planning- Replacement chart- Individual managers skills inventory

PSM/ DOMS/ UOM/ CH1

64

Special case in HRP: Retrenchment

Outplacement Layoffs Leaves of Absence without pay Loaning Work sharing Reduced work hours Early Retirement Attrition
PSM/ DOMS/ UOM/ CH1 65

JOB ANALYSIS
It is a systematic exploration of the activities within a job. It is a technical procedure used to define a jobs duties, responsibilities and accountabilities. This analysis involves the identification and description of what is happening on the job, the knowledge and skills necessary for performing them and the conditions under which they must be performed.
PSM/ DOMS/ UOM/ CH1 66

Job Analysis Methods

Observation Method Individual Interview Method Group Interview Method Structured Questionnaire Method Technical Conference Method Diary Method Position Analysis Questionnaire
PSM/ DOMS/ UOM/ CH1 67

Purpose of Job Analysis

Job Description- States what the job holder does Job Specification- States minimum acceptable qualifications that the incumbent must possess to perform job successfully Job Evaluation-Specifies the relative value of each job in the organization
PSM/ DOMS/ UOM/ CH1 68

The job analysis information hierarchy

Element Task Duty Position Job Job Family Occupation Career
PSM/ DOMS/ UOM/ CH1 69

Two specific job analysis procedures

Functional Job Analysis- Department of Labour- This procedure describes what a worker does by having someone observe and interview the employee. This information is then cataloged into three general functions that exist in all jobs- data, people and things- Codings available for over thirty thousand job titles listed in the Dictionary of Occupational Titles.
PSM/ DOMS/ UOM/ CH1 70

Contd
Position Analysis Questionnaire- Developed by researchers at Purdue University- Involves 194 elements within 27 division job dimensions and five overall job dimensions. Dimensions1) Having decision-making/communication/social responsibilities 2) Performing skilled activities 3) Being physically active/related environmental conditions. 4) Operating vehicles/equipment. 5) Processing information.
PSM/ DOMS/ UOM/ CH1 71

Contd..
CATEGORY 1. Information Input 2. Mental Processes 3. Work output 4. Relationships with other persons 5. Job context 6. Other job characteristics NO. OF JOB ELEMENTS 35 14 49 36 19 41
72

PSM/ DOMS/ UOM/ CH1