HRMRole122

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MH

Human Resource Human Resource ManagementManagement

Introduction, Introduction, Role and Role and

FunctionsFunctionsWinning companies understand that people provide the real

advantage. However, skilled employees are a prime resource that is becoming increasingly scarce, specially in

Pakistan.

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AgendaAgenda Introduction to HRM and Introduction to HRM and

its functionsits functions The Human CapitalThe Human Capital (understanding the (understanding the

connection between connection between individual behaviour, job individual behaviour, job performance and performance and satisfactionsatisfaction

Functions of HRM and Functions of HRM and Challenges facing Challenges facing Pakistani organizationsPakistani organizations

Strategic HRM / E-HRStrategic HRM / E-HR

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What is Management?What is Management?

People

Processes

Systems

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Management Components Management Components Organizing

Leading

Planning

Controlling

Management

“If you can’t maximize the power of the individual, you haven’t done anything. If you expand the ability of individual members of the organization, you expand the ability of the organization.” Bob Buckman, CEO and Chairman of Buckman

Staffing

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What is Human Resource Management?What is Human Resource Management?H R ManagementH R Management• Organizational function Organizational function establishing and dealing establishing and dealing with issues related to with issues related to people such as:people such as:

Compensation, Compensation, hiring,hiring, Performance management, Performance management, Organization development,Organization development, safety, safety, wellness,wellness, benefits, benefits, employee motivation,employee motivation, communication communication administration,administration, Training & Training & development.development.

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Training & Development

Compensation and Benefits

Staffing

Employee and Labor Relations

Safety and Health

H R Management – Main Components

HRM

Take our 20 best people away, and I will tell you that Microsoft would become an unimportant company Bill Gates

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Basic HR ConceptsBasic HR Concepts

The bottom line of The bottom line of managing: managing: Getting Getting resultsresults HR creates value by engaging HR creates value by engaging

in activities that produce the in activities that produce the employee behaviors that the employee behaviors that the company needs to achieve company needs to achieve its strategic goals.its strategic goals.

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Important termsImportant termsHuman resource: Knowledge, skill sets, expertise of employees, the adaptability, commitment and loyalty of employees.

Skills: The individual abilities of human beings to perform a piece of work.

Resource: The stock of assets and skills that belong to a firm at a point of time

Capability: The ability of a bundle of resources to perform an activity; a way of combining assets, people and processes to transform inputs into outputs.

Core competencies: Activities that the firm performs especially well when compared to its competitors and through which the firm adds value to its goods and services over a long period of time. A unique capability in the organization that creates high value and that differentiates the organization from its competition.Competitive advantage: It comes from a firm's ability to perform activities more distinctively and more effectively than rivals. To attain competitive advantage, firms need to add value to customers and offer a product or service that cannot be easily imitated or copied by rivals (Uniqueness).

Value: Sum total of benefits received and costs paid by the customer in a given situation.

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HRM - Organizational ObjectivesHRM - Organizational Objectives Primary objective of HRM is Primary objective of HRM is

to contribute to to contribute to organizational effectivenessorganizational effectiveness

HRM is not an end in itself HRM is not an end in itself Its role is to help the Its role is to help the

organization achieve its organization achieve its primary objectives byprimary objectives by focusing on peoplefocusing on people e.g., through selection, e.g., through selection,

training, managing, training, managing, release or retention….release or retention….

The only vital value an enterprise has is the experience, skills, innovativeness and insights of its people

Leif Edvinsson, Swedish Intellectual

Capital guru

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Why HRM ?Why HRM ? Market ChangesMarket Changes

Globalisation & CompetitionGlobalisation & CompetitionCorporate StrategiesCorporate StrategiesLabour Market ChangesLabour Market ChangesTechnology DevelopmentTechnology Development

The Japanese and Models of ExcellenceThe Japanese and Models of Excellence The Enterprise CultureThe Enterprise Culture

Keep a continuous watch on HR clusters or competitors will

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Why learn about HRM?Why learn about HRM? HR issues are relevant toHR issues are relevant to everyoneeveryone in in all organizationsall organizations Provide understanding of Provide understanding of systems systems

and processesand processes needed to develop needed to develop and and utilize talents of employeesutilize talents of employees

StaffingStaffing is the top issue for is the top issue for executives, because a recent executives, because a recent survey reveals HR alone adds survey reveals HR alone adds over 80% of value to the over 80% of value to the organizationorganization

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HRM serves 3 primary entities:

• The organization• Society• Individual employees and

What Does HRM Do?

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Core HRM ActivitiesCore HRM Activities Human Resource PlanningHuman Resource Planning RecruitmentRecruitment SelectionSelection Performance Management & Performance Management &

AppraisalAppraisal TrainingTraining RewardsRewards Employee RelationsEmployee Relations Employee Communication Employee Communication

and Participation and Participation Personnel RecordsPersonnel Records

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Influences on HRMMany factors:

• Industry characteristics• Organization’s product • Organization’s competitive strategy• Employee attitude, skills, and knowledge etc.

"Look at the means which a man employs, consider his motives, observe

his pleasures. A man simply cannot conceal himself!"

— Confucius

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Overcoming MisconceptionsOvercoming Misconceptions HRHR can – and indeed should – play a can – and indeed should – play a

key role in an organization’s strategykey role in an organization’s strategy

Increasing evidence that HR activities Increasing evidence that HR activities are associated with various indicators are associated with various indicators of of organizational performanceorganizational performance (e.g., (e.g., ROI, profitability, stock prices)ROI, profitability, stock prices)

Money put toward HR systems and Money put toward HR systems and activities should be viewed as activities should be viewed as investment rather than simply costinvestment rather than simply cost

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• Creating an organization that adds value to employees, customers and investors alike. • Effectiveness; strategy; added value; and delivery. These are all central to any dynamic HR professional's approach • HR as a business function rather than a support one

Top of hundred Champions of HRM

Dave Ulrich

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Staffing Staffing (Planning, Recruitment, Selection)(Planning, Recruitment, Selection)

Developing and implementingDeveloping and implementing a plan to meet a plan to meet these requirements.these requirements.

RecruitingRecruiting the human resources to fill specific the human resources to fill specific jobs within the organization.jobs within the organization.

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Staffing Staffing (Planning, Recruitment, Selection)(Planning, Recruitment, Selection)

Conducting job analysesConducting job analyses to establish the to establish the specific requirements of individual jobs within the specific requirements of individual jobs within the organization.organization.

ForecastingForecasting the human resource requirements the human resource requirements the organization needs to achieve its objectives.the organization needs to achieve its objectives.

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TrainingTraining Training:Training:

learning process that involves the learning process that involves the acquisition of acquisition of skills, concepts, rules, or skills, concepts, rules, or attitudes;attitudes; designed to enhance designed to enhance performance performance

OrientationOrientationOn-the job trainingOn-the job training; ; apprenticeships…apprenticeships…

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Development ( HR )Development ( HR )DevelopmentDevelopment - - Involves learning that Involves learning that

goes beyond goes beyond today's jobtoday's job; it has a ; it has a more long-term focusmore long-term focus

CPD

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Career PlanningCareer Planning Career planningCareer planning - An ongoing process - An ongoing process

whereby whereby individualindividual sets career goals sets career goals and identifies means to achieve themand identifies means to achieve them

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Career DevelopmentCareer DevelopmentCareer developmentCareer development - Formal - Formal

approach used by approach used by organizationorganization to to ensure that people with proper ensure that people with proper qualifications and experiences are qualifications and experiences are available when neededavailable when needed

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People often perform at very high levels. Here’s why:

• They can. They have the right abilities.• They want to. They’re motivated.• They have what they need. They’re empowered.• They overcome challenges and adversity. They have strong character.

Performance

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Job Requirements - KSAVJob Requirements - KSAVKnowledgeKnowledge – what the professional already – what the professional already

knowsknowsSkillsSkills – what the professional can do now – what the professional can do nowAbilitiesAbilities – what the professional may be – what the professional may be

able to know or do (e.g., learning ability, able to know or do (e.g., learning ability, creativity)creativity)

ValuesValues (including personality and interests)– (including personality and interests)–The employees’ behavioral tendencies and The employees’ behavioral tendencies and internal values that drive these tendenciesinternal values that drive these tendencies

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Job SatisfactionJob SatisfactionJob satisfactionJob satisfaction

leads to organizational commitmentleads to organizational commitment

Job dissatisfactionJob dissatisfactionmay lead to turnover, absenteeism, may lead to turnover, absenteeism,

tardiness, accidents, strikes, tardiness, accidents, strikes, grievances. grievances.

Job satisfaction is NOT the Job satisfaction is NOT the same as motivation!same as motivation!

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Job Satisfaction..Job Satisfaction..Workplace supportWorkplace support

(flexible schedules, etc)(flexible schedules, etc) autonomyautonomy meaningfulness meaningfulness opportunities for learning & advancement opportunities for learning & advancement job security are highly related to job job security are highly related to job

satisfactionsatisfaction pay and benefits have little effect on job pay and benefits have little effect on job

satisfaction.satisfaction.

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1)  An expressed intention to remain with an organization2)  The variety of skills and competencies their job requires3)  The organization's commitment to satisfying customers 4)  The amount of cooperation within and across functions5)  Consistent communication regarding roles and expectations6)  Training to improve their contributions to the organization7)  Freedom and discretion in their jobs and access to resources and information8)  Competent, expert managers who are open to ideas of their employees

Factors Influencing Employee Satisfaction and Engagement

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An analysis of employee responses to opinion surveys.In Asia

A job security 1B enough help and resources 2C friendly, helpful co-workers 3D interesting work 4E good working conditions 5F enough authority 6G good wages 7H opportunities to development 8I enough information 9J full appreciation of work done 10K competent supervision 11L clearly defined responsibilities 12

Top Themes that Concern Employees Satisfaction Most

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Research-10 effective approaches for improving employee engagement:

1. Rewards and Recognition 2. Human Capital Infrastructure 3. Learning Management 4. Knowledge Management 5. Performance Appraisal 6. Workplace Design 7. Employee Relations 8. Career Development 9. Human capital strategy 10.Recruiting

Approaches to Employee Engagement

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Research • Workforce engagement

characteristics:• Satisfaction• Understanding• Contribution • Alignment• Retention

Workforce Engagement Metrics

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Performance AppraisalPerformance AppraisalPerformance appraisal Performance appraisal

FeedbackFeedback system that involves the direct system that involves the direct evaluation of individual or group performance evaluation of individual or group performance by a supervisor, manager, or peers. by a supervisor, manager, or peers.

Used for Used for performance feedback, pay performance feedback, pay administration, counseling and developing administration, counseling and developing employees, assessing promotability employees, assessing promotability succession planning.succession planning.

Represents an important link between Represents an important link between goal-goal-setting processes and reward systems.setting processes and reward systems.

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Performance Appraisal MethodsPerformance Appraisal Methods Goal setting (MBO)Goal setting (MBO) 360-degree feedback360-degree feedback Work standards approachWork standards approach Critical-incident appraisalCritical-incident appraisal Graphic rating scalesGraphic rating scales Behaviorally Anchored Rating Scale Behaviorally Anchored Rating Scale

(BARS)(BARS)

Evaluate what you want -- because what gets measured, gets produced

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360-degree feedback

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Bell Curve

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Organizational Reward SystemsOrganizational Reward Systems Both Both intrinsic and extrinsicintrinsic and extrinsic rewards employees rewards employees

by the organization.by the organization. Ideally, rewards are linked to performance.Ideally, rewards are linked to performance.

Rewards “cause” Rewards “cause” satisfactionsatisfaction Rewards based on performance “cause” Rewards based on performance “cause” improved improved

performanceperformance Satisfaction does not (necessarily) “cause” better Satisfaction does not (necessarily) “cause” better

performance; performance; performance “causes” satisfaction performance “causes” satisfaction

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Rewards & Performance Cycle

Feeling good about

yourself

Improved Performanc

e

Leads to

Leads to

If all else fails – Refer to Jack Welch

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High Developing High Standards Jack Welch

Can’t Do/Will Do

Can Do/Will Do

Can’t Do/ Can Do/Won’t Do Won’t Do

Low Ability High

MOTIVATION

Value & reward with training, promotions, cash/share options

Train & Develop

Consider separation

Motivate or release

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Cultural (Values) ChallengesCultural (Values) Challenges Attitudes toward workAttitudes toward work

Different Different expectationsexpectations re: work and leisure re: work and leisure People want more flexibility, holiday time, etc.People want more flexibility, holiday time, etc.

Attitudes toward business/governmentAttitudes toward business/government Negative attitudes toward Negative attitudes toward customers & those in customers & those in

powerpower – effects employment relationships – effects employment relationships

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Cultural (Values) ChallengesCultural (Values) Challenges

Ethnic diversityEthnic diversity Multi lingual/culture of workforceMulti lingual/culture of workforce Potential for Potential for conflicts of valuesconflicts of values, etc. , etc.

but also opportunity to learn, expandbut also opportunity to learn, expand

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Compensation and BenefitsCompensation and Benefits

CompensationCompensation – – All All rewardsrewards that individuals receive that individuals receive

as a result of their as a result of their employmentemployment

Money

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PayPaySkill-basedSkill-based pay plans pay plans

All salariedAll salaried workforce workforce

Lump-sumLump-sum salary increases salary increases

Performance-based payPerformance-based pay ( (indiv, group, indiv, group, organizationorganization))

Gain SharingGain Sharing

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BenefitsBenefits Legally mandatedLegally mandated

workers’ compensationworkers’ compensation TraditionalTraditional

Health insurance/medical; paid vacationsHealth insurance/medical; paid vacations RecentRecent

Child care; parent leave; education; retirement Child care; parent leave; education; retirement plansplans

Nonfinancial RewardsNonfinancial RewardsThe JobThe JobPleasant working environmentPleasant working environment

Based on position Based on position

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Safety and HealthSafety and Health Employees who work Employees who work

in a in a safe environment safe environment and enjoy good healthand enjoy good health are more likely to be are more likely to be productive and yield productive and yield long-term benefitslong-term benefits to to the organization.the organization.

Isn't it a bit unnerving that doctors call what they do practice?

George Carlin 

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Safety and HealthSafety and HealthSafetySafety - Involves protecting employees - Involves protecting employees

from from injuries caused by work-related injuries caused by work-related accidentsaccidents

HealthHealth - Refers to the employees' freedom - Refers to the employees' freedom from from illness and their general physical and illness and their general physical and mental well beingmental well being

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Employee and Labor RelationsEmployee and Labor Relations

Business by lawBusiness by lawShould recognize Should recognize

unionunion

Bargain with it in Bargain with it in good faithgood faith

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Employee and Labor RelationsEmployee and Labor Relations AdministrationAdministration of discipline and grievance- of discipline and grievance-

handling procedures.handling procedures.

Organizational discipline:Organizational discipline: action taken against action taken against an employee who has violated an organizational an employee who has violated an organizational rule or whose performance is below satisfactory. rule or whose performance is below satisfactory.

““Should be”Should be” viewed as a viewed as a learning opportunitylearning opportunity for the employee and a tool to improve for the employee and a tool to improve productivity and human relationsproductivity and human relations..

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Ethics and HR ManagementEthics and HR Management

Discipline dealingDiscipline dealing

with what is:with what is:

moral duty & obligationmoral duty & obligation according to Corp. valuesaccording to Corp. values

good & bad right & wrong

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““New Trends”New Trends” Fewer and fewer HR departmentsFewer and fewer HR departments have retained have retained

or are limited to traditional, or are limited to traditional, standard HR standard HR functions.functions. Movement towards Movement towards SHRM & E-HRMSHRM & E-HRM

Corporate universitiesCorporate universities are becoming common are becoming common place; HRM supporting the place; HRM supporting the “Learning “Learning Factory”;Factory”; outsourcing often used for benefit outsourcing often used for benefit and training functions; staffing being delegated and training functions; staffing being delegated to line managers and autonomous teams. to line managers and autonomous teams.

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Strategic HRMStrategic HRM ““The process of linking The process of linking HR practices to HR practices to

business strategy”business strategy” ““the process by which organizations seek to link the process by which organizations seek to link

the the human, social, and intellectual capital ofhuman, social, and intellectual capital of their members to the strategic needs of the firm”their members to the strategic needs of the firm”

Affirms the importanceAffirms the importance of the effective of the effective management of people as a source of management of people as a source of competitive advantagecompetitive advantage..

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Outcomes of Strategic HRMOutcomes of Strategic HRM ““When you align HR with organizational When you align HR with organizational

strategy, you’ll see growth in strategy, you’ll see growth in commitment, commitment, improved financial resultsimproved financial results, and find , and find yourself better able to attract and retain yourself better able to attract and retain the right people.”the right people.”

(Paine, 1999)(Paine, 1999)

The intentional use of HR systems to help an organization gain competitive advantage

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Global HRMGlobal HRM GHRMGHRM

Utilization of global Utilization of global human resourceshuman resources to achieve to achieve

organizational organizational objectivesobjectives

without regard to without regard to geographic geographic boundaries.boundaries.

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Global HRMGlobal HRM ““Going Global” - Major impact on all HR Going Global” - Major impact on all HR

functionsfunctionsPlanning, recruitment, and selection to Planning, recruitment, and selection to

compensation and benefitscompensation and benefitsHuman resource development, to safety Human resource development, to safety

and health issues, to employee and labor and health issues, to employee and labor relations relations

Additional challenges include:Additional challenges include: Political and legal factorsPolitical and legal factorsCultural/language issuesCultural/language issuesMaintaining corporate identity/culture, Maintaining corporate identity/culture,

economic factors economic factors

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E-HRE-HR E.HR:E.HR: the application of conventional, web, voice and the application of conventional, web, voice and

m-technologies to improve HR administration, m-technologies to improve HR administration, transactions and process performance. transactions and process performance. “Speed” and “Speed” and “agility” have become key words for HRM.“agility” have become key words for HRM.

E-HR surveyE-HR survey 76% of 91 global organizations have 76% of 91 global organizations have redesigned or introduced new HR technologies/ redesigned or introduced new HR technologies/ systems in the past year and 90% of the remaining systems in the past year and 90% of the remaining expect to do so within the coming year.expect to do so within the coming year.

While very While very cutting edge, total e-HR is expensivecutting edge, total e-HR is expensive and and time consuming. Many companies focus on time consuming. Many companies focus on recruitment, web training and web approaches video recruitment, web training and web approaches video interviews to reporting and appraisal. interviews to reporting and appraisal.

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Growth

CompetitionCompetition

Prosperity

Success

Competent Employees

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Economic ChallengesEconomic Challenges Two related challengesTwo related challenges::

Global tradeGlobal trade – international trade and – international trade and competition with other marketscompetition with other markets

Need for productivity ImprovementNeed for productivity Improvement More output with equal (or less) inputMore output with equal (or less) input

HR ImplicationsHR Implications Need to contribute to international Need to contribute to international

competencecompetence of workers (via training, etc.) of workers (via training, etc.) Potential workforce reductionsPotential workforce reductions – can result in – can result in

job insecurity and negative effects on workersjob insecurity and negative effects on workers

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Technological ChallengesTechnological Challenges Technology affects how work Technology affects how work

gets donegets done ComputerizationComputerization – increased – increased

flexibilityflexibility AutomationAutomation – some hazardous/ – some hazardous/

repetitive jobs being automatedrepetitive jobs being automated HR ImplicationsHR Implications

Workers need to possess Workers need to possess competencies related to competencies related to technologytechnology

Job losses (layoffs, etc.) due to Job losses (layoffs, etc.) due to technologytechnology

ChangesChanges in how HR activities get in how HR activities get donedonee.g., internet recruitinge.g., internet recruiting

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Summary -The HRM Summary -The HRM ProfessionalProfessional

Major competencies:Major competencies:Business masteryBusiness mastery

Strategy, financial realities, customer Strategy, financial realities, customer orientationorientation

Mastery of HRM toolsMastery of HRM toolsStaffing, training, compensation, etc.Staffing, training, compensation, etc.

Change masteryChange masteryPersonal credibilityPersonal credibility

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New way of viewing, treating and managing employees.

Framework of change components soft components: 1. customer satisfaction (internal and external); 2. leadership style; 3. communication; 4. people management and satisfaction; 5. training and coaching; and 6. empowerment. hard skills:• process improvement; • measurement and steering; • safety and environment

Summary of Managing HR/Business

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Slow shift in HR Practices in Pakistan

Strategic role Proactive Key part of

organizational Vision/mission

Service focus Process-based

organization Cross-functional teams,

teamwork most important

People as key investments/assets

Administrative role

Reactive

Separate, isolated from

company vision/mission

Production focus

Functional organization

Individuals encouraged,

singled out for praise,

rewards

People as expenses

Traditional HR Emerging HR

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01 DAVE ULRICH08. HENRY MINTZBERG 03. CHARLES HANDY 17. STEPHEN COVEY 18. CHRIS ARGYRIS 19. JOHN KOTTER 22. TOM PETERS 23. DANIEL GOLEMAN

Some of Top 100 HRM Gurus"The two greatest corporate leaders of this century are Alfred Sloan of General Motors and Jack Welch of GE. And Welch would be the greater of the two because he set a new, contemporary paradigm for the corporation that is the model of the 21st Century."

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““Learning is not compulsory – Learning is not compulsory – neither is survival!”neither is survival!”

W Edward DemingW Edward Deming

Competitive edge will largely depend on ‘knowledge workers’

ability to perform