Human Resource Management

HUMAN RESOURCE MANAGEMENT

INTRODUCTION

Human Resource Management is An Art for Businesses,

Science for Corporations, and a Subject for Others....

Human Resource Management (HRM) act as a catalyst for

overall development of nation’s economy. HRM is a way of

management that links people-related activities to the strategy of

a business or organisation. HRM is often referred to as "strategic

HRM". It has several goals:

To meet the needs of the business and management (rather

than just serve the interests of employees);

To link human resource strategies / policies to the business

goals and objectives;

To find ways for human resources to "add value" to a

business;

To help a business gain the commitment of employees to its

values, goals and objectives.

It is an approach to the management of people in an

organization. Organizations are made up of people i. e employees

and function through them. It is the human resource which brings

success and prosperity to a business enterprise. Human Resource

Management also called Personnel Management, deals with

various problems relating to manpower employed. Such problems

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include personal planning, recruitment and selection, induction,

performance appraisal, employee training and development,

promotions and transfer of employees, compensation payment,

career planning and participative management. The person who

looks after personnel functions/ problems is called

Personnel/Human Resource Manager. HRM is relatively a new term

for what was earlier called as personnel management. The term

HRM got popularity in the USA by 1970s. This is a management

function which helps managers to plan, recruit, select, train,

develop, remunerate and maintain members for an organization.

HRM is the latest nomenclature use to denote personnel

management. The policies of management relating to personnel

matters/problems are called policies. Human Resource

Management in a Business Context provides an international focus

on the theory and practice of people management. A thorough and

comprehensive overview of all the key aspects of HRM, including

case studies, articles from HRM Guide and other sources, key

concepts, review questions and problems for discussion and

analysis.

The link between Human Resources and Business

Strategy

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All elements of the business strategy have implications for

human resources, as illustrated in the table below. The

challenge for management is to identify and respond to these HR

challenges:

Examples of Key Strategy

Issues

Possible Human Resource

Implications.

What markets should the

business compete in?

What expertise is required in these

markets? Do existing management

and employees theright experience

and skills.

Where the business should be

located to compete optimally?

Where do we need our people? How

many do we need?

How can we achieve

Improvements in our unit

production costs to

remain competitive?

How productive is the workforce

currently? How does this compare

with competitors? What investment

in the workforce (e.g. training,

recruitment) and their equipment is

required to achieve the desired

improvement in productivity?

How can the business effect

cultural change?

What are the current values of the

workforce? How can the prevailing

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culture be influenced/changed to

help implement a change

programmed?

How can the business respond

to rapid technological change

in its markets?

What technological skills does the

business currently possess? What

additional skills are needed to

respond to technological change?

Can these skills be acquired through

training or do they need to be

recruited?

An important part of HRM is the Human Resources Plan. The

purpose of this plan is to analyse the strategic requirements of the

business in terms of manpower - and then to find a way of meeting

the required demand for labour. This is the subject of a separate

revision note.

Human Resource Management, in the sense of getting things

done through people. It's an essential part of every manager's

responsibilities, but many organizations find it advantageous to

establish a specialist division to provide an expert service

dedicated to ensuring that the human resource function is

performed efficiently.

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"People are our most valuable asset" is a cliché which no

member of any senior management team would disagree with. Yet,

the reality for many organizations is that their people remain

under valued

under trained

under utilized

poorly motivated, and consequently

perform well below their true capability

The rate of change facing organizations has never been greater

and organizations must absorb and manage change at a much

faster rate than in the past. In order to implement a successful

business strategy to face this challenge, organizations, large or

small, must ensure that they have the right people capable of

delivering the strategy.

The market place for talented, skilled people is competitive and

expensive. Taking on new staff can be disruptive to existing

employees. Also, it takes time to develop 'cultural awareness',

product/ process/ organization knowledge and experience for new

staff members.

As organizations vary in size, aims, functions, complexity,

construction, the physical nature of their product, and appeal as

employers, so do the contributions of human resource

management. But, in most the ultimate aim of the function is to:

"ensure that at all times the business is correctly staffed by the

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right number of people with the skills relevant to the business

needs", that is, neither overstaffed nor understaffed in total or in

respect of any one discipline or work grade.

DEFINATIONS OF PERSONNEL MANAGEMENT/HRM

1. According to Edwin Flippo:

“Personnel management is the planning, organizing, directing

and controlling of the procurement, development, compensation,

integration, maintenance and separation of human resources to

the end that individual, organizational and social objectives are

accomplished”.

2. According to George R. Terry:

“Personnel management is concerned with the obtaining and

maintaining of a satisfactory and satisfied work force”.

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3. According to Michale Armstrong:

“HRM is strategic approach to the acquisition, motivation,

development and management of the organizations human

resources. It is develop to shaping an appropriate corporate

culture, and introducing programmes which reflects and support

the core values of the enterprise and ensure its success”.

4. “HRM is a process of bringing people and organizations

together so that the goals of each are met. It is a part of

management process which is concerned with the management of

human resources in an organization”.

FEATURES of HRM :

Organizational management

Personnel administration

Manpower management

Industrial management

But these traditional expressions are becoming less common for

the theoretical discipline. Sometimes even employee and industrial

relations are confusingly listed as synonyms, although these

normally refer to the relationship between management and

workers and the behavior of workers in companies.

The theoretical discipline is based primarily on the assumption

that employees are individuals with varying goals and needs, and

as such should not be thought of as basic business resources, such

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as trucks and filing cabinets. The field takes a positive view of

workers, assuming that virtually all wish to contribute to the

enterprise productively, and that the main obstacles to their

endeavors are lack of knowledge, insufficient training, and failures

of process.

HRM is seen by practitioners in the field as a more innovative

view of workplace management than the traditional approach. Its

techniques force the managers of an enterprise to express their

goals with specificity so that they can be understood and

undertaken by the workforce and to provide the resources needed

for them to successfully accomplish their assignments. As such,

HRM techniques, when properly practiced, are expressive of the

goals and operating practices of the enterprise overall. HRM is also

seen by many to have a key role in risk reduction within

organizations.

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OBJECTIVES Of HRM

Objectives are pre-determined goals to which individual or group

activity in an organization is directed. Objectives of personnel

management are influenced by organizational objectives and

individual and social goals. Institutions are instituted to attain

certain specific objectives. The objectives of the economic

institutions are mostly to earn profits, and of the educational

institutions are mostly to impart education and / or conduct

research so on and so forth. However, the fundamental objective of

any organization is survival. Organizations are not just satisfied

with this goal. Further the goal of most of the organizations is

growth and / or profits.

Institutions procure and manage various resources including

human to attain the specified objectives. Thus, human resources

are managed to divert and utilize their resources towards and for

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the accomplishment of organizational objectives. Therefore,

basically the objectives of HRM are drawn from and to contribute to

the accomplishment of the organizational objectives. The other

objectives of HRM are to meet the needs, aspirations, values and

dignity of individual employees and having due concern for the

socio-economic problems of the community and the country.

The objectives of HRM are as follows:

1. To create and utilize an able and motivated workforce, to

accomplish the basic organizational goals.

2. To establish and maintain sound organizational structure and

desirable working relationships among all the members of the

organization.

3. To secure the integration of individual or groups within the

organization by co-ordination of the individual and group goals with

those of the organization.

4. To create facilities and opportunities for individual or group

development so as to match it with the growth of the organization.

5. To attain an effective utilization of human resources in the

achievement of organizational goals.

6. To identify and satisfy individual and group needs by providing

adequate and equitable wages, incentives, employee benefits and

social security and measures for challenging work, prestige,

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recognition, security, status.

7. To maintain high employees morale and sound human relations

by sustaining and improving the various conditions and facilities.

8. To strengthen and appreciate the human assets continuously by

providing training and development programs.

9. To consider and contribute to the minimization of socio-

economic evils such as unemployment, under-employment,

inequalities in the distribution of income and wealth and to improve

the welfare of the society by providing employment opportunities

to women and disadvantaged sections of the society.

10. To provide an opportunity for expression and voice

management.

11. To provide fair, acceptable and efficient leadership.

12. To provide facilities and conditions of work and creation of

favorable atmosphere for maintaining stability of employment.

Management has to create conductive environment and provide

necessary prerequisites for the attainment of the personnel

management objectives after formulating them.

To be socially responsible to the needs and challenges of society

while minimizing the negative impact of such demands upon the

organization. The failure of organizations to use their resources for

society's benefit may result in restrictions. For example, societies

may pass laws that limit human resource decisions.

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Organizational objective. To recognize that HRM exists to

contribute to organizational effectiveness. HRM is not an end in

itself; it is only a means to assist the organization with its primary

objectives. Simply stated, the department exists to serve the rest

of the organization.

Functional objective:

To maintain the department's contribution at a level appropriate

to the organisation's needs. Resources are wasted when HRM is

more or less sophisticated than the organisation demands. A

department's level of service must be appropriate for the

organisation it serves.

Personal objective:

To assist employees in achieving their personal goals, at least

insofar as these goals enhance the individual's contribution to the

organisation. Personal objectives of employees must be met if

workers are to be maintained, retained and motivated. Otherwise,

employee performance and

satisfaction may decline, and employees may leave the

organisation

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THE SCOPE OF HUMAN RESOURCE MANAGEMENT

The scope of human resource management outlined below

includes an outline of transformation and development issues,

tentative generic skills required in performing HRM roles, as well as

the roles of a human resource management practitioner (line

management and HRM professionals). With regard to the latter, the

assumption is made that roles are inter-linked and interdependent,

even though these relationships may not be expressly stated in

each case.

Transformation and development issues

Knowledge management which entails accumulating &

capturing

Knowledge in large organisations for future application & use

(organisation memory)

Reconciliation management

Work creation as opposed to job creation

Manage the transfer of HRM functions and skills to line

management

Marketing of HRM to line management

Development of contextual approaches to HRM

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Multi-skilling and /or multi-tasking

Increased societal responsibility

Managing people in virtual work environments

Focus on deliverables rather than doable

Develop additional means of assessing HRM

Appreciation and assessment of intellectual capital

Take HRM from a business partner to a business itself /

Managing HRM as a business unit

Adviser / consultant to line management

Supportive generic skills

This is not intended to be final outline of human resource skills

but the following have emerged during the process as important

skills for human resource practitioner to possess. These are:

Project management

Consulting skills

Entrepreneurship

Self management

Communication skills

Facilitation skills

Presentation skills

Skills for transforming groups into self-directed mutually

controlled high performing work teams

Trans-cultural skills

Mediation & arbitration skills

Financial skills

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Problem-solving

Diagnostic skills

Core roles in Human Resource Management

The core roles of human resource management are grouped

below into four categories. The titles of the clusters are tentative,

and are open for comment.

PLANNING AND ORGANISING FOR WORK,

PEOPLE AND HRM

Strategic perspective

Organisation design

Change management

Corporate Wellness management

PEOPLE ACQUISITION AND DEVELOPMENT

Staffing the organisation

Training & development

Career Management

Performance Management

Industrial relations

ADMINISTRATION OF POLICIES , PROGRAMMES &

PRACTICES

Compensation management

Information management

Administrative management

Financial management

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HRM vis-à-vis HRD

HRM (Human Resource Management)

HRD (Human Resource Development)

As these two words cannot be one and the same nor synopsis.

They are used in a different contexts and they represent different

concepts. At the same time HRD is at the centre of HRM. HRD is

examined in detail elsewhere.

As a result of the fundamental changes in attitudes,

approaches, outlook, philosophy, perspective and practices

emerged in the personnel area in the form of HRM strategy, it has

become a necessary for every organisation to develop skills, talent,

potentialities, capabilities and active of company’s own people to

meet the emerging challenges. Hence HRD policies have been

adopted by many companies. It is now-a-days spreading to many

others. HRD strategies are suppose to bring fourth necessary

changes in skills, capabilities and attitude of people who are

required to cope with the emerging changes. Thus, HRD has

become an integral part HRM.

The new HRD approach, that stress the need for developing

the company’s own people to suit the update technology,

modernisation of machinery and equipments and changing trends

in attitudes and approaches, necessities to develop individual

employee in accordance with his aspiration and potentialities on

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the one hand, and the company’s requirement on the other. This is

what the HRD does. Quiet often organisation development (OD)

programs are effectively integrated with the HRD programs. O

fcourse, OD programs are the programms which the OD

interventionists prescribed for the effectiveness of the

organisation. It need not be what the individuals members of the

organisation seek. HRD interventionists primarily seek to know

what the individuals seek to have, and then try to match it with the

organisational needs. Training and development programs from

part of OD while training and development are the most decisive

aspects of HRD too.

At present, therefore, the end result of both HRD and OD are

pre-received as synonymous. Of course, no change can be

effectively and totally incorporated nor their result achieved,

overnight. It need constant effort and continuous monitoring for a

considerably long period. This efforts must go on simultaneously

HRM strategy.

HRM has its various tools like appraisal schemes feedback

system, quality circle and organisation development interventions,

Team-grouping, MbO objective setting, consensus in decision

making, and so on. All such tools are useful in HRD also at present,

however training programms seem to dominated the HRD scene.

An effective management information system backed by

information collecting, storing and retrial system and research and

analysis must be the basis for every HRD program. This would

enable the organisation to motivate its own people to strive to be

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develop in accordance with the organisational needs(existing and

expected). This HRM is the integrated approach to actuating and

managing the company’s own people while deals with the process

of developing people in accordance with their aspirations and to

suit the organisational needs. Both are not synonyms; the letter is

at the centre of the former, and both are interdependent and

integrated into one system.

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Functions overview and strategy for HRM

These issues motivate a well thought out human resource

management strategy, with the precision and detail of say a

marketing strategy. Failure in not having a carefully crafted human

resources management strategy, can and probably will lead to

failures in the business process itself.

These sets of resources are offered to promote thought,

stimulate discussion, diagnose the organizational environment and

develop a sound human resource management strategy for your

organization. We begin by looking at the seven distinguishable

functions human resource management provide to secure the

achievement of the objective defined above.

Following on from this overview we look at defining a human

resource strategy.

Finally, some questions are posed in the form of a HRM systems

diagnostic checklist for you to consider, which may prove helpful

for you to think about when planning your development programs

for the human resources in your organization, if they are truly

"your most valuable asset."

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Function 1: Manpower planning

The penalties for not being correctly staffed are costly.

Understaffing loses the business economies of scale and

specialization, orders, customers and profits.

Overstaffing is wasteful and expensive, if sustained, and it

is costly to eliminate because of modern legislation in

respect of redundancy payments, consultation, minimum

periods of notice, etc. Very importantly, overstaffing

reduces the competitive efficiency of the business.

Planning staff levels requires that an assessment of present and

future needs of the organization be compared with present

resources and future predicted resources. Appropriate steps then

be planned to bring demand and supply into balance.

Thus the first step is to take a 'satellite picture' of the existing

workforce profile (numbers, skills, ages, flexibility, gender,

experience, forecast capabilities, character, potential, etc. of

existing employees) and then to adjust this for 1, 3 and 10 years

ahead by amendments for normal turnover, planned staff

movements, retirements, etc, in line with the business plan for the

corresponding time frames.

The result should be a series of crude supply situations as would

be the outcome of present planning if left unmodified. (This,

clearly, requires a great deal of information accretion, classification

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and statistical analysis as a subsidiary aspect of personnel

management.)

What future demands will be is only influenced in part by the

forecast of the personnel manager, whose main task may well be

to scrutinize and modify the crude predictions of other managers.

Future staffing needs will derive from:

Sales and production forecasts

The effects of technological change on task needs

Variations in the efficiency, productivity, flexibility of labor

as a result of training, work study, organizational change,

new motivations, etc.

Changes in employment practices (e.g. use of

subcontractors or agency staffs, hiving-off tasks, buying in,

substitution, etc.)

Variations, which respond to new legislation, e.g. payroll

taxes or their abolition, new health and safety requirements

Changes in Government policies (investment incentives,

regional or trade grants, etc.)

What should emerge from this 'blue sky gazing' is a 'thought out'

and logical staffing demand schedule for varying dates in the

future which can then be compared with the crude supply

schedules. The comparisons will then indicate what steps must be

taken to achieve a balance.

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That, in turn, will involve the further planning of such

recruitment, training, retraining, labor reductions (early

retirement/redundancy) or changes in workforce utilization as will

bring supply and demand into equilibrium, not just as a one–off but

as a continuing workforce planning exercise the inputs to which will

need constant varying to reflect 'actual' as against predicted

experience on the supply side and changes in production actually

achieved as against forecast on the demand side.

Function 2: Recruitment and selection of employees

Recruitment of staff should be preceded by:

An analysis of the job to be done (i.e. an analytical study of the

tasks to be performed to determine their essential factors) written

into a job description so that the selectors know what physical and

mental characteristics applicants must possess, what qualities and

attitudes are desirable and what characteristics are a decided

disadvantage;

In the case of replacement staff a critical questioning of the

need to recruit at all (replacement should rarely be an

automatic process).

Effectively, selection is 'buying' an employee (the price being

the wage or salary multiplied by probable years of service)

hence bad buys can be very expensive. For that reason some

firms (and some firms for particular jobs) use external expert

consultants for recruitment and selection.

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Equally some small organizations exist to 'head hunt', i.e. to

attract staff with high reputations from existing employers to

the recruiting employer. However, the 'cost' of poor selection

is such that, even for the mundane day-to-day jobs, those who

recruit and select should be well trained to judge the

suitability of applicants.

The main sources of recruitment are:

Internal promotion and internal introductions (at times

desirable for morale purposes)

Careers officers (and careers masters at schools)

University appointment boards

Agencies for the unemployed

Advertising (often via agents for specialist posts) or the use of

other local media (e.g. commercial radio)

Where the organization does its own printed advertising it is

useful if it has some identifying logo as its trade mark for rapid

attraction and it must take care not to offend the sex, race, etc.

antidiscrimination legislation either directly or indirectly. The form

on which the applicant is to apply (personal appearance, letter of

application, completion of a form) will vary according to the posts

vacant and numbers to be recruited.

It is very desirable in many jobs that claim about experience and

statements about qualifications are thoroughly checked and that

applicants unfailingly complete a health questionnaire (the latter is

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not necessarily injurious to the applicant’s chance of being

appointed as firms are required to employ a percentage of disabled

people).

Before letters of appointment are sent any doubts about medical

fitness or capacity (in employments where hygiene considerations

are dominant) should be resolved by requiring applicants to attend

a medical examination. This is especially so where, as for example

in the case of apprentices, the recruitment is for a contractual

period or involves the firm in training costs.

Interviewing can be carried out by individuals (e.g. supervisor or

departmental manager), by panels of interviewers or in the form of

sequential interviews by different experts and can vary from a five

minute 'chat' to a process of several days. Ultimately personal

skills in judgment are probably the most important, but techniques

to aid judgment include selection testing for:

Aptitudes (particularly useful for school leavers)

Attainments

General intelligence

(All of these need skilled testing and assessment.) In more

senior posts other techniques are:

Leaderless groups

Command exercises

Group problem solving

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(These are some common techniques - professional selection

organizations often use other techniques to aid in selection.)

Training in interviewing and in appraising candidates is clearly

essential to good recruitment. Largely the former consists of

teaching interviewers how to draw out the interviewee and the

latter how to xratex the candidates. For consistency (and as an aid

to checking that) rating often consists of scoring candidates for

experience, knowledge, physical/mental capabilities, intellectual

levels, motivation, prospective potential, leadership abilities etc.

(according to the needs of the post). Application of the normal

curve of distribution to scoring eliminates freak judgments.

Function 3: Employee motivation

To retain good staff and to encourage them to give of their best

while at work requires attention to the financial and psychological

and even physiological rewards offered by the organization as a

continuous exercise.

Basic financial rewards and conditions of service (e.g. working

hours per week) are determined externally (by national bargaining

or government minimum wage legislation) in many occupations but

as much as 50 per cent of the gross pay of manual workers is often

the result of local negotiations and details (e.g. which particular

hours shall be worked) of conditions of service are often more

important than the basics. Hence there is scope for financial and

other motivations to be used at local levels.

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As staffing needs will vary with the productivity of the workforce

(and the industrial peace achieved) so good personnel policies are

desirable. The latter can depend upon other factors (like

environment, welfare, employee benefits, etc.) but unless the wage

packet is accepted as 'fair and just' there will be no motivation.

Hence while the technicalities of payment and other systems

may be the concern of others, the outcome of them is a matter of

great concern to human resource management.

Increasingly the influence of behavioral science discoveries are

becoming important not merely because of the widely-

acknowledged limitations of money as a motivator, but because of

the changing mix and nature of tasks (e.g. more service and

professional jobs and far fewer unskilled and repetitive production

jobs).

The former demand better-educated, mobile and multi-skilled

employees much more likely to be influenced by things like job

satisfaction, involvement, participation, etc. than the economically

dependent employees of yesteryear.

Hence human resource management must act as a source of

information about and a source of inspiration for the application of

the findings of behavioral science. It may be a matter of drawing

the attention of senior managers to what is being achieved

elsewhere and the gradual education of middle managers to new

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points of view on job design, work organization and worker

autonomy.

Function 4: Employee evaluation

An organization needs constantly to take stock of its workforce

and to assess its performance in existing jobs for three reasons:

To improve organizational performance via improving the

performance of individual contributors (should be an

automatic process in the case of good managers, but (about

annually) two key questions should be posed:

what has been done to improve the performance of a person

last year?

what can be done to improve his or her performance in the

year to come?).

To identify potential, i.e. to recognize existing talent and to

use that to fill vacancies higher in the organization or to

transfer individuals into jobs where better use can be made of

their abilities or developing skills.

To provide an equitable method of linking payment to

performance where there are no numerical criteria (often this

salary performance review takes place about three months

later and is kept quite separate from 1. and 2. but is based on

the same assessment).

On-the-spot managers and supervisors, not HR staffs, carry out

evaluations. The personnel role is usually that of:

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Advising top management of the principles and objectives of

an evaluation system and designing it for particular

organizations and environments.

Developing systems appropriately in consultation with

managers, supervisors and staff representatives. Securing the

involvement and cooperation of appraisers and those to be

appraised.

Assistance in the setting of objective standards of evaluation /

assessment, for example:

Defining targets for achievement.

Explaining how to quantify and agree objectives.

Introducing self-assessment.

Eliminating complexity and duplication.

Publicizing the purposes of the exercise and explaining to

staff how the system will be used.

Organizing and establishing the necessary training of

managers and supervisors who will carry out the actual

evaluations/ appraisals. Not only training in principles and

procedures but also in the human relations skills necessary.

(Lack of confidence in their own ability to handle situations of

poor performance is the main weakness of assessors.)

Monitoring the scheme - ensuring it does not fall into disuse,

following up on training/job exchange etc. recommendations,

reminding managers of their responsibilities.

Full-scale periodic reviews should be a standard feature of

schemes since resistance to evaluation / appraisal schemes is

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common and the temptation to water down or render schemes

ineffectual is ever present (managers resent the time taken if

nothing else).

Basically an evaluation / appraisal scheme is a formalization of

what is done in a more casual manner anyway (e.g. if there is a

vacancy, discussion about internal moves and internal attempts to

put square pegs into 'squarer holes' are both the results of casual

evaluation). Most managers approve merit payment and that too

calls for evaluation. Made a standard routine task, it aids the

development of talent, warns the inefficient or uncaring and can be

an effective form of motivation.

Developing a HRM strategy

Faced with rapid change organizations need to develop a more

focused and coherent approach to managing people. In just the

same way a business requires a marketing or information

technology strategy it also requires a human resource or people

strategy.

In developing such a strategy two critical questions must be

addressed.

What kinds of people do you need to manage and run your

business to meet your strategic business objectives?

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What people programs and initiatives must be designed

and implemented to attract, develop and retain staff to

compete effectively?

In order to answer these questions four key dimensions of an

organization must be addressed. These are:

Culture: the beliefs, values, norms and management style

of the organization

Organization: the structure, job roles and reporting lines

of the organization

People: the skill levels, staff potential and management

capability

Human resources systems: the people focused mechanisms

which deliver the strategy - employee selection,

communications, training, rewards, career development,

etc.

Frequently in managing the people element of their business

senior managers will only focus on one or two dimensions and

neglect to deal with the others. Typically, companies reorganize

their structures to free managers from bureaucracy and drive for

more entrepreneurial flair but then fail to adjust their training or

reward systems.

When the desired entrepreneurial behavior does not emerge

managers frequently look confused at the apparent failure of the

changes to deliver results. The fact is that seldom can you focus on

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only one area. What is required is a strategic perspective aimed at

identifying the relationship between all four dimensions.

If you require an organization which really values quality and

service you not only have to retrain staff, you must also review the

organization, reward, appraisal and communications systems.

The pay and reward system is a classic problem in this area.

Frequently organizations have payment systems which are

designed around the volume of output produced. If you then seek

to develop a company which emphasizes the product's quality you

must change the pay systems. Otherwise you have a contradiction

between what the chief executive is saying about quality and what

your payment system is encouraging staff to do.

There are seven steps to developing a human resource strategy

and the active involvement of senior line managers should be

sought throughout the approach.

Steps in developing HRM strategy

Step 1: Get the 'big picture'

Understand your business strategy.

Highlight the key driving forces of your business. What are

they? e.g. technology, distribution, competition, the

markets.

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What are the implications of the driving forces for the

people side of your business?

What is the fundamental people contribution to bottom line

business performance?

Step 2: Develop a Mission Statement or Statement of

Intent

That relates to the people side of the business.

Do not be put off by negative reactions to the words or

references to idealistic statements - it is the actual process of

thinking through the issues in a formal and explicit manner that is

important.

What do your people contribute?

Step 3: Conduct a SWOT analysis of the organization

Focus on the internal strengths and weaknesses of the people

side of the business.

Consider the current skill and capability issues.

Vigorously research the external business and market

environment. High light the opportunities and threats relating to

the people side of the business.

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What impact will/ might they have on business

performance?

Consider skill shortages?

The impact of new technology on staffing levels?

From this analysis you then need to review the capability of your

personnel department. Complete a SWOT analysis of the

department - consider in detail the department's current areas of

operation, the service levels and competences of your personnel

staff.

Step 4: Conduct a detailed human resources analysis

Concentrate on the organization's COPS (culture, organization,

people and HR systems)

Consider: Where you are now? Where do you want to be?

What gaps exists between the reality of where you are now

and where you want to be?

Exhaust your analysis of the four dimensions.

Step 5: Determine critical people issues

Go back to the business strategy and examine it against your

SWOT and COPS Analysis

33


Identify the critical people issues namely those people

issues that you must address. Those which have a key

impact on the delivery of your business strategy.

Prioritize the critical people issues. What will happen if you

fail to address them?

Remember you are trying to identify where you should be

focusing your efforts and resources.

Step 6: Develop consequences and solutions

For each critical issue highlight the options for managerial action

generate, elaborate and create - don't go for the obvious. This is an

important step as frequently people jump for the known rather

than challenge existing assumptions about the way things have

been done in the past. Think about the consequences of taking

various courses of action.

Consider the mix of HR systems needed to address the issues.

Do you need to improve communications, training or pay?

What are the implications for the business and the personnel

function?

Once you have worked through the process it should then be

possible to translate the action plan into broad objectives. These

34


will need to be broken down into the specialist HR Systems areas

of:

employee training and development

management development

organization development

performance appraisal

employee reward

employee selection and recruitment

manpower planning

communication

Develop your action plan around the critical issues. Set targets

and dates for the accomplishment of the key objectives.

Step 7: Implementation and evaluation of the action

plans

The ultimate purpose of developing a human resource strategy

is to ensure that the objectives set are mutually supportive so that

the reward and payment systems are integrated with employee

training and career development plans.

There is very little value or benefit in training people only to

then frustrate them through a failure to provide ample career and

development opportunities.

35


http://www.accel-team.com/job_interviews/index.html



HRD

Employee needs extend beyond the training classroom Includes coaching, group work, and problem solving Need for basic employee development Need for structured career development ASTD changes its name to the American Society for

Training and Development

Relationship Between HRM and HRD

Human resource management (HRM) encompasses many functions

Human resource development (HRD) is just one of the functions within HRM

Primary Functions of HRM

Human resource planning Equal employment opportunity Staffing (recruitment and selection) Compensation and benefits Employee and labor relations Health, safety, and security Human resource development.

Secondary HRM Functions

Organization and job design

36


Performance management/ performance appraisal systems

Research and information systems.

HRD Functions

Training and development (T&D) Organizational development Career development

1. Training and Development (T&D): Training – improving the knowledge, skills and attitudes of

employees for the short-term, particular to a specific job or task – e.g.,

Employee orientation Skills & technical training Coaching Counseling

Development – preparing for future responsibilities, while increasing the capacity to perform at a current job

Management training Supervisor development

2. Organizational Development: The process of improving an organization’s effectiveness

and member’s well-being through the application of behavioral science concepts

Focuses on both macro- and micro-levels HRD plays the role of a change agent

3.Career Development:

37


Ongoing process by which individuals progress through series of changes until they achieve their personal level of maximum achievement.

Career planning Career management

Learning & Performance

38


Critical HRD Issues

39


1. Strategic management and HRD2. The supervisor’s role in HRD3. Organizational structure of HRD

1.Strategic management:It aims to ensure organizational effectiveness for the

foreseeable future – e.g., maximizing profits in the next 3 to 5 years.

HRD aims to get managers and workers ready for new products, procedures, and materials.

2. Supervisor’s Role in HRD: Implements HRD programs and procedures. On-the-job training (OJT). Coaching/mentoring/counseling. Career and employee development. A “front-line participant” in HRD.

3. Organizational Structure of HRD Departments: Depends on company size, industry and maturity. No single structure used. Depends in large part on how well the HRD manager

becomes an institutional part of the company – i.e., a revenue contributor, not just a revenue user.

Challenges for HRD

Changing workforce demographics Competing in global economy Eliminating the skills gap Need for lifelong learning Need for organizational learning

A Framework for the HRD Process

HRD efforts should use the following four phases (or stages):1. Needs assessment2. Design

40


3. Implementation4. Evaluation

Training & HRD Process Model

1.Needs Assessment Phase:

Establishing HRD priorities Defining specific training and objectives Establishing evaluation criteria

2.Design Phase:

Selecting who delivers program Selecting and developing program content Scheduling the training program

3. Implementation Phase:

Implementing or delivering the program

4. Evaluation Phase:

Determining program effectiveness – e.g.,

Keep or change providers? Offer it again? What are the true costs? Can we do it another way?

HRD is too important to be left to amateurs. HRD should be a revenue producer, not a revenue user. HRD should be a central part of company. You need to be able to talk MONEY.

41


Challenges before HR Management

42


In fact in the face of enornous and the rapid changes in the

business environment in India backed by liberalisation of economy,

globalisation of business, modernisation of technology and large

scale employment, a need exist for a fresh look at the human

resources. Multinationals, foreign investors and NRIs entering the

Indian business in a big way communist countris adopting the path

of capitalism and large scale technology transfer, all such factors

necessitate a wider perspective of human resoures in the days to

come.some of the factors,which pose grater challagenes to the

HRM in future are :

1.A larger, faster and greater growth of industrialization is

expected in the next decade.

2.There is a possibility for more takeovers, acquisations and

mergers in future in India.

3.With the presence and influence of more multinational and

tranationals, as well as higher standards and competitions, there is

a possibility for many small indigenous units to be sick

4.There is a possibility for the emergence of many large and giand

enterprises havening economies of scale, leading the units without

the merits of economies of scale and large scale production to wind

up.

43


5.ISO 9000 and other international standardization requirement are

bound to dictate higher quality specification making it difficult for

less quality conscious business enterprises to survive.

6.Large investment and modernization would require highly skilled

and technically trend people who would replace less train, unskilled

and redundant workforce.

7.Increasing number of industrial houses are bound to introduce

scheme for golden handshake.

8.Import of technology may become more common in the days to

come resulting in increasing requirement of highly skill manpower.

9.Greater and greater training needs are bound to be identified for

updating the technological behavior skill.

10.There would arise greater needs for interpersonal skill,

behavioral and counciling skills of executive and hence greater

training needs in his directions are bound to arise.

11.Greater privatization of business and increase of employment in

the private sector may leads to greater training needs in the

private sector.

12.Quality of work life and quality circle programmes may receive

greater acceptance.

44


HRM Challenges faced by Managers

The HR Managers of today may find it difficult because of the

rapidly changing business environment and therefore they should

update their knowledge and skills by looking at the organization's

need and objectives. The HRM challenges are

1. Managing the Vision :

Vision of the organization provides the direction to business

strategy and helps managers to evaluate management practices

and make decisions. So vision management becomes the integral

part of Man management in future.

2. Internal environment :

Creating an environment which is responsive to external changes,

providing satisfaction to the employees and sustaining through

culture and systems is a challenging task.

3. Changing Industrial Relations :

Both the workers and managers has to be managed by the same

HRM Philosophy and this is a daunting task for the managers.

4. Building Organizational capability :

45


Even in the adverse circumstances the employees have to be

made to live in psychological state of readiness to continually

change.

5. Job Design & Organizational structure :

Instead of depending on foreign concepts we need to focus on

understanding the job, technology and the people involved in

carrying out the tasks.

6. Managing the large work force :

Management of large workforce poses the biggest problem as the

workers are conscious of their rights.

7. Psycho-Social environment :

Nowadays employees participation required not only in performing

job but also in democratizing and humanizing the institution.

8. Employee Satisfaction :

Managers should be aware of techniques to motivate their

employees so that their higher level needs can be satisfied.

46


9. Modern technology :

There will be an unemployment due to modern technology and this

could be corrected by assessing manpower needs and finding

alternate employment.

10. Computerized Information System :

This is revolutionary in managerial decision making and is having

impact on coordination in the organization.

11. Legal environment :

To meet the changes in legal environment, adjustments have to be

made to the maximum utilization of human resources.

12. Managing Human Relations :

As the workforce comprises of both educated and uneducated,

managing the relations will be of great challenge.

In spite of all the problems HR Managers are able to overcome

all these problems with the support of management and

employees. In the current business world managing employees are

becoming complex task and this can be handled effectively only by

our great HR Leaders.

47


Limitation of HRM

48


Human resource management has its own limitations also.

Though personnel management has been in practice for quite

sometime now, human resource management is of recent origin.

Some companies have already has their personnel management

departments while some have taken initiative to appoint human

resource managers to look after their personnel function. Such

superficial actions may not bear much fruit. What is actually

needed is the fundamental change in attitudes, approaches and

the very management philosophy. Without such a change,

particularly at the top management level renaming of personnel

department or predestinating the personnel officer may not serve

the people.

At least some HRD people hold the view that HRM people hold

the view that HRM is something very distinct from personnel

management and neglect the importance of personnel

management. This is very dangerous approach. It must be

understood that a balanced and integrated approach is necessary.

Actually speaking the philosophy outlook, attitude, and approach to

the company own people may undergo a change not only of top

management but other levels of management. Then an integrated

approach is to HRM is necessary that is it becomes the part of the

personnel management, while the whole personnel function must

be viewed through the human resource angle.

HRM Philosophy and thrust must come from the top and

accepted by people at all levels. But unfortunately in many

organization top bosses remains passive leaving the HRD functions

49


to be carried out by the personal manager waiting for the result to

come. If good result emerges the credit will go to the magnanimity

of the boss and all the discredit remains with the personal

manager. Hence the personnel manager may look at the HRD

programme with suspicion. This is very serious limitation.

Management must be not satisfied with the few training

programme at it happens in some organization now. HRM

functions must constantly strive to determine the actual needs and

an aspiration of the companies own people and plans to satisfy

them, develop their potentiality and use them. But unfortunately

management’s productivity and profitability approach still remains

undisturbed in many organizations.

HRM is of recent origin as it lacks universally approved academic

base. Different professionals tent to decline the term in different

ways. Until a general definition is accepted and operational frame

work is universally approved, the approach of the practitioner may

continue this is another draw back. However, a generally accepted

approach is expected to emerge in near future because of the

strenuous efforts of HRM professionals and thinkers.

Most of the HRD programmers are limited to the classroom

training in many organizations. This is another drawback of HRD.

On the job training developmental programmers, carrier planning

and counseling are used to develop people. Actually, speaking,

unless a proper learning atmosphere is created no training

programmed would be able to produce expected results.

50


In many organizations adequate information and data base may

be lacking. This is serious threat to accuracy of information without

which HRM practice is difficult. Collection storing and retrieval of

information must therefore be given first priority which many

manager neglect.

In many organizations even the personal professionals

misunderstand HRM as synonymous to HRD. Some classroom

training programmers are generally arranged which are called HRD

programmers. These programmers are understood as Human

Resource Management. Such cursory classrooms are not the

actual HRD programmers even a well-planned and executed HRD

programmed is not HRM. HRD is the only part of HRM, which is

integrated approach to management. Human Resource

Management suffers from such limitation. However, the impact, it

has made on the managerial effectiveness has been spectacular

wherever it was introduce. Actually speaking a real need exists in

every Indian Organization for an HRM approach

Employment & Structural Changes

Human Resources in INDIA

51


India is a vast country with equally vast population, second only

to china. According to official admission about 300 million people in

India are below poverty line. According to planning commission, an

annual income of Rs.7980 for rural and Rs.9120 for urban areas.

Although the life expectancy has increased during the years after

independence, infant mortality is still very high--95 per 1000 births.

Out of every 10 illiterates in the world, three are in India.

Every 7 out of 10 illiterates are women. About 25 % of girls are

illiterate. The drop-out in school ranged between 47 and 77 %

during 1985-86, according to latest information available. During

the 20 years after the adoption of constitution, the number of

illiterate persons in the country had risen from 300 million in 1951

to 387 million in 1971. According to 1981 census, the literacy rate

continues to be only 36%. School dropouts in the case of scheduled

tribes are as much as 87.2% and for scheduled castes 79%.

India has also got one of the largest child labor populations in

the world, some 40 million mostly engaged in hazardous jobs.

HUMAN RESOURCES DEVELOPMENT is not an academic pursuit, nor

isolated from the strategy and pattern of economic development.

The two are interrelated--one subserves the other. It cannot be

gainsaid that despite diversified industrial development during the

planning period, the spectacular growth of public sector in building

up infrastructure, growth in agricultural sector, the vast human

resources, urban and rural go largely wasted and are hardly

utilized.

52


HUMAN RESOURCES DEVELOPMENT

It should not be confined to short-run narrow sectional interests,

but should have wider perspective of social development towards a

progressive direction for the benefits of our people at large. An

efficient and satisfied in organizational effectiveness and

managerial excellence. Dynamic employees are essential for any

organization that would like to be dynamic and growth-oriented.

HUMAN RESOURCES DEVELOPMENT aims at developing such

dynamism in employees along with several other qualities that in

combination make the organization perform well.

The central theme in the HUMAN RESOURCES DEVELOPMENT

approach is the development of the individual and the

development of work groups. The emphasis has shifted from

“Maximization of performances “and "compensation" towards

"employee potential awareness creation" and "employee potential

realization." The Personnel function has reduced human resources

in organization’s history and destiny. The employees are no longer

cogs in the organisational wheels but as the active agents shaping

not only their own futures but also future of the organisation. The

HUMAN RESOURCES DEVELOPMENT approach, therefore,

postulates a proactive rather than a reactive approach.

Human Resources are organic and complex and so is their

development. While education is an instrument for the general

development of the individual, HUMAN RESOURCES DEVELOPMENT

in the context of an organisation refers to the improvement in the

53


capacities and capabilities of the personnel in relation to the needs

of the organisation. It involves the creation of a climate in which

the flower of human knowledge, skill, capabilities and creativity

care bloom. It involves the setting up of systems through which

human capabilities and potential can be identified and topped to

the mutual satisfaction of the individual and the organization.

HUMAN RESOURCES DEVELOPMENT, in the organizational

context, is a process by which employees of an organization are

continuously held in a planned way. Human resources are thought

of as “the total knowledge, skills, creative abilities, talents and

aptitudes of an organisation’s work-force, as well as the values and

attitudes of an individual involved. It is the sum total of inherent

abilities, acquired knowledge and skills represented by the talents

and aptitudes of the employed persons. “The HUMAN RESOURCES

DEVELOPMENT is concerned with the improvement of the above

said attributes of an individual as well as a group of persons. It is

the process of increasing the knowledge, the skills and the

capacities of all the people in an undertaking and a society.

Human resources can be developed by providing formal

education from elementary to the higher level, technical and

professional, on-the-job training, adult education programmes,

correspondence or distance education, improvement in the health

of masses through medical facilities and improvement in nutrition.

The process of economic development tends to be associated

with fundamental structural change in an economy. These

54


structural changes take place in the form of sectoral composition

as wll as occupational structure of the work force. Such a change

emerges as a result of rising productivity in agriculture and the

industrial and the tertiary sectors. The size of a country and its

population has also an influence on the structural changes in the

the economy brought about by the process of economic growth.

HUMAN RESOURCES

Human resources are a term used to refer to how people are

managed by organizations. The field has moved from a traditionally

administrative function to a strategic one that recognizes the link

between talented and engaged people and organizational success.

The field draws upon concepts developed in

Industrial/Organizational Psychology and System Theory. Human

resources have at least two related interpretations depending on

context. The original usage derives from political economy and

economics, where it was traditionally called labor, one of four

factors of production although this perspective is changing as a

function of new and ongoing research into more strategic

approaches at national levels.

This first usage is used more in terms of 'human resources

development', and can go beyond just organizations to the level of

nations. The more traditional usage within corporations and

businesses refers to the individuals within a firm or agency, and to

the portion of the organization that deals with hiring, firing,

55


training, and other personnel issues, typically referred to as

'human resources management'.

MANAGEMENT

Human resource management's objective, on the other hand, is

to maximize the return on investment from the organization's

human capital and minimize financial risk. It is the responsibility of

human resource managers in a corporate context to conduct these

activities in an effective, legal, fair, and consistent manner.

KEY FUNCTIONS

Human resource management serves these key functions:

1. Recruitment & Selection

2. Training and Development (People or Organization)

3. Performance Evaluation and Management

4. Promotions/Transfer

5. Redundancy

6. Industrial and Employee Relations

7. Record keeping of all personal data.

8. Compensation, pensions, bonuses etc in liaison with Payroll

9. Confidential advice to internal 'customers' in relation to

problems at work

10. Career development

11. Competency Mapping

12. Time motion study is related to HR Function

13. Performance Appraisal

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MODERN ANALYSIS

Modern analysis emphasizes that human beings are not

"commodities" or "resources", but are creative and social beings in

a productive enterprise. The 2000 revision of ISO 9001 in contrast

requires identifying the processes, their sequence and interaction,

and to define and communicate responsibilities and authorities. In

general, heavily unionized nations such as France and Germany

have adopted and encouraged such job descriptions especially

within trade unions. The International Labour Organization also in

2001 decided to revisit, and revise its 1975 Recommendation 150

on Human Resources Development.

One view of these trends is that a strong social consensus on

political economy and a good social welfare system facilitates labor

mobility and tends to make the entire economy more productive,

as labor can develop skills and experience in various ways, and

move from one enterprise to another with little controversy or

difficulty in adapting. Another view is that governments should

become more aware of their national role in facilitating human

resources development across all sectors.

EMPLOYMENT TREND

As person 38th round, there were 255.7 million persons

employed in the ‘usual status’ sense, that is employed for major

part of time of 365 days reference period. For the purposes of

57


comparing the 38th round employment estimates with the 32nd

and 27th round employment estimate, an estimate of 31.7 million

marginally employed obtained on the basis of usual subsidiary

status of the non-workers was added to 255.7 million to make it

287.4 million employed.

This number constituted 48.51% of the respective total

population.in 1977-78, as per 32nd round, the total employed

which included marginal workers constituted 42.34% of the

respective total population. This indicated an overall increase of

6.17% in total employment in relation to population during the

period 1977-78 to 1983.

SECTORAL CHANGES IN INDIA

The sectoral composition of the working force, in general,

indicates the type and level of economic development of the

country. One aspect of structural change manifests itself in the

form of a change in the industrial structure involving a greater shift

of the working force to the tertiary sector and that to the

secondary sector from the primary sector of the economy. The

sectoral composition of the working force which had remined

constant till 1971 is now-changing.

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Current status of HRM in India

INTRODUCTION

Over many centuries India has absorbed managerial ideas and

practices from around the world. Early records of trade, from 4500

B.C. to 300 B.C., not only indicate international economic and

political links, but also the ideas of social and public administration.

This treatise presented notions of the financial administration of

the state, guiding principles for trade and commerce, as well as the

management of people. Increasing trade, that included

engagement with the Romans, led to widespread and systematic

governance methods by 250 A.D. During the next 300 years, the

59


first Indian empire, the Gupta Dynasty, encouraged the

establishment of rules and regulations for managerial systems, and

later from about 1000 A.D. Islam influenced many areas of trade

and commerce. A further powerful effect on the managerial history

of India was to be provided by the British system of corporate

organisation for 200 years. Clearly, the socio cultural roots of

Indian heritage are diverse and have been drawn from multiple

sources including ideas brought from other parts of the old world.

Interestingly, these ideas were essentially secular even when they

originated from religious bases.

In the contemporary context, the Indian management

mindscape continues to be influenced by the residual traces of

ancient wisdom as it faces the complexities of global realities. One

stream of holistic wisdom, identified as the Vedantic philosophy,

pervades managerial behaviour at all levels of work organisations.

This philosophical tradition has its roots in sacred texts from 2000

B.C. and it holds that human nature has a capacity for self

transformation and attaining spiritual high ground while facing

realities of day to day challenges (Lannoy 1971). Such cultural

based tradition and heritage can have a substantial impact on

current managerial mindsets in terms of family bonding and

mutuality of obligations. The caste system, which was recorded in

the writings of the Greek Ambassador Megasthenes in the third

century B.C., is another significant feature of Indian social heritage

that for centuries had impacted organisational architecture and

60


managerial practices, and has now become the focus of critical

attention in the social, political and legal agenda of the nation.

One of the most significant areas of values and cultural practices

has been the caste system. Traditionally, the caste system

maintained social or organisational balance. Brahmins (priests and

teachers) were at the apex, Kshatriya (rulers and warriors), Vaishya

(merchants and managers) and Shwdra (artisans and workers)

occupied the lower levels. Those outside the caste hierarchy were

called ‘untouchables’. Even decades ago, a typical public

enterprise department could be dominated by people belonging to

a particular caste. Feelings associated with caste affairs influenced

managers in areas like recruitment, promotion and work allocation

(Venkatranam & Chandra 1996). Indian institutions codified a list of

lower castes and tribal communities called ‘scheduled castes and

scheduled tribes’. A strict quota system called, ‘reservation’ in

achieving affirmative equity of castes, has been the eye of political

storm in India in recent years. The central government has decreed

15 per cent of recruitment is to be reserved for scheduled castes,

and a further seven and half per cent for scheduled tribes. In

addition, a further 27 per cent has been decreed for other

backward castes. However, the liberalisation of markets and global

linkages have created transformation of attitudes towards human

resource (HR) policies and practices (Khalilzadeh-Shirazi & Zagha

1994, Gopalan & Rivera 1997). Faced with the challenge of

responding to the rationale of Western ideas of organisation in the

changing social and economic scenario of Indian organisation,

61


practitioners are increasingly taking a broader and reflective

perspective of human resource management (HRM) in India.

This manuscript has three main parts. In the first part is

provided an overview of important historical events and activity

that has influenced contemporary managerial tenets, the second

part of the manuscript describes the emerging contemporary

Indian HRM practices and indicates some interesting challenges.

Much of the second part is also summarised on four informative

Figures. The concluding section, the third part of the manuscript,

succinctly integrates the two preceding parts.

VALUE OF CONTEXT OF HRM IN INDIA

The managerial ideologies in Indian dates back at least four

centuries. Arthãshastra written by the celebrated Indian scholar-

practitioner Chanakya had three key areas of exploration, 1) public

policy, 2) administration and utilisation of people, and 3) taxation

and accounting principles (Chatterjee 2006). Parallel to such

pragmatic formulations, a deep rooted value system, drawn from

the early Aryan thinking, called vedanta, deeply influenced the

societal and institutional values in India. Overall, Indian collective

culture had an interesting individualistic core while the

civilisational values of duty to family, group and society was always

very important while vedantic ideas nurtured an inner private

sphere of individualism.

There has been considerable interest in the notion that

managerial values are a function of the behaviours of managers.

62


England, Dhingra and Agarwal (1974) were early scholars who

contended that managerial values were critical forces that shape

organisational architecture. The relevance of managerial values in

shaping modern organisational life is reflected in scholarly

literature linking them to corporate culture (Deal & Kennedy 1982),

organisational commitment and job satisfaction (O’Reilly, Chatham

& Caldwell 1991), as well as institutional governance (Mowday,

Porter & Steers 1982). Thus, understanding the source of these

values and in particular societal work values (which link the macro-

micro relationships and in turn organisational practices) had

become a popular line of enquiry, and a great deal of evidence has

been presented to support the importance of national culture in

shaping managerial values. One of the most widely read

formulations of this literature is the seminal work of Hofstede

(1980) who popularised the notion of clustering culture in generic

dimensions such as power distribution, structuring, social

orientation, and time horizons. In turn, these dimensions could be

employed to explain relevant work attitudes, job incumbent

behaviors and the working arrangements within organisational

structures. Two of these dimensions were individualism and

collectivism.

The traditional social ethos from the ancient roots, which was

developed over centuries, underwent profound transformation

during the British rule. Consequently, in the contemporary context

multiple layers of values (core traditional values, individual

managerial values, and situational values) have emerged

63


(Chatterjee & Pearson 2000). Though the societal values largely

remain very much anchored in the ancient traditions they are

increasingly reflecting corporate priorities and values of global

linkages. But in the arena of globalisation where priorities of

consumerism, technological education, mass media, foreign

investment and trade union culture predominate, newer tensions

are becoming evident. For instance, contemporary Indian multi

national companies and global firms in India have started shifting

their emphasis to human resources with their knowledge and

experience as the central area of attention in extending new

performance boundaries (Khandekar & Sharma 2005).

Considerable research evidence attests to this trend with particular

relevance to greenfield organisations with little or no historical

baggages in their organisational culture (Settt 2004, Roy 2006).

Within Indian traditions the choice of individualistic or

collectivistic behavior depends on a number of culturally defined

variables. The dynamics of these variables are underpinned

through three key elements guiding Indian managerial mindscapes.

These three constructs are Desh (the location), Kaal (the timing),

and Patra (the specific personalities involved). Sinha and Kunungo

(1997) claim that the interaction of these three variables

determines the guidelines for decisional cues. This managing or

nurturing of the outer layer of collectivism in an inner private

sphere of individualism is expressed in Figure 1 which

demonstrates the behavioural anchors in Indian organisational life.

Figure 1

64


Behavioral Anchors in Indian Organisational Life

DECISIONAL

CUES

Desh

(place)

Kaal

(Timing)

Patra

(Actors)

SPIRITUAL

ORIENTATION

Sattava guna

(Virtue focus)

Tamas guna

(Negative

focus)

Rajas

guna

(Action

focus)

INTERPERSONAL

RELATIONS

Sradha

(Upward respect /

Loyalty)

Sneha

(Downward

affection)

Bandhan

(Bonding)

Figure 1 also presents another powerful insight of the Indian

tradition of the notion of ‘Guna’ dynamics. According to Sharma

(1996), this culture based framework, which has three types of

gunas (attraction), is being increasingly used in employee

assessment and organisational team building strategies. The

contention is that each guna is a separate contribution to the core

of human personalities. The Sattava (or truth orientation) is the

sentiment of exalted values in people, organisations or society.

Alternatively, the Tamasik guna depicts a negative orientation

which can be expressed behaviourally as ignorance, greed or

corruption. Those individuals with a Rajasik guna are inherently

driven by a desire to make a worthwhile contribution to their

surroundings. Collectively, these spiritual orientations, which

65


manifest as Sattava, Tamas or Rajas gunas, articulate as positive

or negative HRM functions such as leadership, motivation or other

institutional behavioural activity. The third row of Figure 1

highlights the linking of HRM trends to socio cultural roots. The

culture of Sradha (upward loyalty) and Sneha (mentoring with

affection) outline the behavioural anchors derived from the

civilisational roots. The acceptance of ‘Sradha’ by youngers and

the display of ‘Sneha’ by the seniors have been the root of

sustainability of all types of Indian oragnisations. This has a striking

similarity to the concepts of ‘oyabun’ and ‘kobun’ in the Japanese

cultural context.

CONTEMPORARY INDIA

In a recent survey of Indian CEO’s, it was suggested that Indian

managerial leaders were less dependent on their personal

charisma, but they emphasised logical and step by step

implementation processes. Indian leaders focused on

empowerment and accountability in cases of critical turnaround

challenges, innovative challenges, innovative technology, product

planning and marketing or when other similar challenges were

encountered (Spencer, Rajah, Narayan, Mohan & Latiri 2007).

These social scientists contend.

Leaders in other countries often tell about why they chose a

peculiar person for a certain role per task, detailing the personal

characteristics that made that person right for that situation. They

may also consider, in detail, how an assignment would help

66


someone grow and develop their abilities. In general, Indian

leaders simply did not discuss how they matched particular people

to certain roles or tasks, nor did they usually consider in detail how

the personal characteristics of individuals might shape or inform

the best way to influence that person.

Indian HRM in Transition

One of the noteworthy features of the Indian workplace is

demographic uniqueness. It is estimated that both China and India

will have a population of 1.45 billion people by 2030, however,

India will have a larger workforce than China. Indeed, it is likely

India will have 986 million people of working age in 2030, which

well probably are about 300 million more than in 2007. And by

2050, it is expected India will have 230 million more workers than

China and about 500 million more than the United States of

America (U.S.). It may be noted that half of India’s current

population of 1.1 billion people are under of 25 years of age. While

this fact is a demographic dividend for the economy, it is also a

danger sign for the country’s ability to create new jobs at an

unprecedented rate. As has been pointed out by Meredith (2007).

When India’s young demographic bubble begins to reach

working age, India will need far more jobs than currently exist to

keep living standards from declining. India today doesn’t have

enough good jobs for its existing workers, much less for millions of

new ones. If it cannot better educate its children and create jobs

for then once they reach working age, India faces a population time

67


bomb: The nation will grow poorer and not richer, with hundred of

millions of people stuck in poverty.

With the retirement age being 55 to 58 years of age in most

public sector organisations, Indian workplaces are dominated by

youth. Increasing the retirement age in critical areas like

universities, schools, hospitals, research institutions and public

service is a topic of considerable current debate and agenda of

political parties.

The divergent view, that each society has an unique set of

national nuances, which guide particular managerial beliefs and

actions, is being challenged in Indian society. An emerging

dominant perspective is the influence of globalisation on

technological advancements, business management, and

education and communication infrastructures are leading to a

converging effect on managerial mindsets and business

behaviours. And when India embraced liberalisation and economic

reform in the early 1990s, dramatic changes were set in motion in

terms of corporate mindsets and HRM practices as a result of

global imperatives and accompanying changes in societal

priorities. Indeed, the onset of a burgeoning competitive service

sector compelled a demographic shift in worker educational status

and heightened the demand for job relevant skills as well as

regional diversity. Expectedly, there has been a marked shift

towards valuing human resources (HR) in Indian organisations as

they become increasingly strategy driven as opposed to the culture

of the status quo. Accordingly, competitive advantage in industries

68


like software services, pharmaceuticals, and biotechnology (where

India is seeking to assert global dominance), the significance of

HRs is being emphasised. These relativities were demonstrated in

a recent study of three global Indian companies with (235

managers) when evidence was presented that positively linked

the HRM practices with organisational performance. In spite of this

trend of convergence, a deep sense of locality exists creating more

robust ‘cross vergence’ in the conceptual as well as practical

domain.

Figure 2

Drivers of Contemporary Indian HRM Trends

69


Figure 2 presents the key drivers for contemporary

Indian HRM trends. In Figure 2 there are four external spheres of

intervention for HRM professionals and these spheres are

integrated in a complex array within organisational settings. The

intellectual sphere, which emphasis’s the mindset transaction in

work organisations, has been significantly impacted by the forces

of globalisation. Indeed, Chatterjee and Pearson (2000) argued,

with supporting empirical evidence from 421 senior level Indian

managers, that many of the traditional Indian values (respect for

seniority, status and group affiliation) have been complemented by

newer areas of attention that are more usually linked to

globalisation, such as work quality, customer service and

innovation. The most important work related attribute of the study

was the opportunity to learn new things at work. Such cross

verging trends need to be understood more widely as practitioners

face a new reality of human resource development of post

industrial economic organisations.

The other three spheres, of Figure 2, namely the emotional, the

socio cultural and the managerial domains are undergoing, similar

profound changes. For instance, the socio cultural sphere confronts

the dialects of the national macro level reform agenda as well as

the challenge of innovating by addressing the hygiene and

motivational features of the work place. Consequently, this sphere,

which is underpinned by the anchors of Sradha and Sneha, has the

opportunity to leverage work setting creativity in dimensions of

autonomy, empowerment, multiskilling and various types of job

70


design. And the emotional sphere, which focuses on creativity and

innovation to encapsulate the notions of workplace commitment

and collaboration as well as favorable teamwork, brings desirable

behavioral elements of transparency and integrity into

organisational procedures and practices. The managerial sphere

provides the mechanisms for shifting mindsets, for in Indian

organizations. HRM is viewed to be closely aligned with managerial

technical competency. Thus, understanding of the relativity

of HRM to strategic intended organisational performance is less

well articulated in Indian firms. The current emphasis of

reconfiguring cadres (voluntary and nonvoluntary redundancy

schemes), downsizing, delayering and similar arrangements will

become less relevant as holistic perspectives gain ground. A

hallmark of future Indian workplaces is likely to be a dominant

emphasis on managerial training, structural redesign and

reframing of institutional architectures to achieve enterprise

excellence. Thus, a primary role of Indian managers will be to forge

new employment and industrial relationships through

purposeful HRM policies and practices. In Figure 3 is presented a

variety of HRM practices that are being employed in Indian

organisations.

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Progress of personnel management in India

Personnel management - The renewed emphasis on the

importance of human resources in the 1980s and 90s drew

attention to the way in which people management was organized.

Specifically, this meant a critical review of the functions of

personnel management.

Personnel management has been a recognized function in the

USA since NCR opened a personnel office in the 1890s. In other

countries the function arrived more slowly and came through a

variety of routes. This excerpt from Human Resource Management

in a Business Context looks at Personnel Management from a

historical perspective.

Specialist Personnel Functions:

Recruitment - advertising for new employees and liaising

with employment agencies.

Selection - determining the best candidates from those who

apply, arranging interviews, tests and references.

Promotion - running similar selection procedures to

determine progression within the organization.

Pay - a minor or major role in pay negotiation,

determination and administration.

72

http://www.hrmguide.net/hrm/chap1/ch1-3.html


Performance assessment - coordinating staff appraisal and

counseling systems to evaluate individual employee

performance.

Grading structures - as a basis for pay or development,

comparing the relative difficulty and importance of

functions.

Training and development - coordinating or delivering

programmes to fit people for the roles required by the

organisation now and in the future.

Welfare - providing or liaising with specialists in a staff care

or counseling role for people with personal or domestic

problems affecting their work.

Communication - providing an internal information service,

perhaps in the form of staff newspapers or magazines,

handouts, booklets, videos.

Employee Relations - handling disputes, grievances and

industrial action, often dealing with unions or staff

representatives.

Dismissal - on an individual basis as a result of failure to

meet requirements or as part of a redundancy, downsizing

or closure exercise, perhaps involving large numbers of

people.

Personnel administration - record-keeping and monitoring of legislative requirements

related to equal opportunities and possibly pensions and tax.

73


Management theory

The human relations and human factors approaches were

absorbed into a broad behavioral science movement in the 1950's

and 1960's. This period produced some influential theories on the

motivation of human performance. For example, Maslow's

hierarchy of needs provided an individual focus on the reasons why

people work. He argued that people satisfied an ascending series

of needs from survival, through security to eventual 'self-

actualization'.

In the same period, concepts of job design such as job

enrichment and job enlargement were investigated. It was felt that

people would give more to an organization if they gained

satisfaction from their jobs. Jobs should be designed to be

interesting and challenging to gain the commitment of workers - a

central theme of HRM.

By the 1970s most managers participating in formal

management training were aware of: Theory X and Theory Y

(McGregor, 1960); of Maslow and Herzberg's motivation theories;

and knew where they should be in terms of the managerial grid

(Blake and Mouton, 1964). These theorists advocated participative,

'soft' approaches to management. However, only a minority of

managers in the USA received such training, with even fewer in

other countries. Most operational managers - concerned with

production, engineering, or distribution - had worked their way up

from low-level jobs: they were probably closer in spirit to F.W.

74


Taylor than the theorists of the 1950s and 1960s. This contrasted

with personnel departments with a higher proportion of people who

had received academic training; additionally, 'personnel' was an

area where women were prevalent - as opposed to production

which was male dominated. Were women naturally more open to

human relations concepts than men?

Development of the personnel specialism

Personnel management has been a recognized function in the

USA since NCR opened a personnel office in the 1890s. American

personnel managers worked within a unitarist tradition, identifying

closely with the objectives of their organization. It was natural for

HRM to emerge comparatively smoothly from this perspective.

In other countries the personnel management function arrived

more slowly and came from a number of routes. Moreover, its

orientation was not entirely managerial. In Britain its origins can be

traced to the 'welfare officers' employed by Quaker-owned

companies such as Cadburys. At an early stage it became evident

that there was an inherent conflict between their activities and

those of line managers. They were not seen to have a philosophy

compatible with the worldview of senior managers. The welfare

officer orientation placed personnel management as a buffer

between the business and its employees. In terms of

'organizational politics' this was not a politically viable position for

individuals wishing to further their careers, increase their status

and earn high salaries.

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Management thinking

Like fashions in hairstyle and clothing, management ideas come

and go. Today's best-selling management concept will not survive

long before being overtaken by the next 'big idea'. Significantly,

however, a consistent theme has prevailed for more than two

decades: the most successful organizations make the most

effective use of their people - their human resources.

The emergence of HRM was part of a major shift in the nature

and meaning of management towards the end of the twentieth

century. This happened for a number of reasons. Perhaps most

significantly, as we will see in Part 2 of this book, major

developments in the structure and intensity of international

competition forced companies to make radical changes in their

working practices .

From the 1970s onwards, managers in the industrialized

countries felt themselves to be on a roller-coaster of change,

expected to deliver improved business performance by whatever

means they could muster. Their own careers and rewards were

increasingly tied to those improvements and many were

dispatched to the ranks of the unemployed for not acting quickly

and imaginatively enough. Caught between the need to manage

decisively and fear of failure, managers sought credible new ideas

as a potential route for survival.

76


CONCLUSION

The World Competitiveness Report rated India’s human resource

capabilities as being comparatively weaker than most Asian

nations. The recognition of world class human resource capability

77


as being pivotal to global success has changed Indian HRM cultures

in recent years. While the historical and traditional roots remain

deeply embedded in the subjective world of managers, emphasis

on objective global concepts and practices are becoming more

common. Three very different perspectives in HRM are evident.

Firstly, Indian firms with a global outlook; secondly, global firms

seeking to adapt to the Indian context; and thirdly,

the HRM practice in public sectors undertakings (PSV’S). As the

Indian economy becomes more globally linked, all three

perspectives will move increasingly towards a cross verging

strengthening. Interestingly, within the national context, India itself

is not a homogenous entity. Regional variations in terms of

industry size, provincial business culture, and political issues play

very relevant roles. The nature of hierarchy, status, authority,

responsibility and similar other concepts vary widely across the

nations synerging system maintenance. Indeed, organisational

performance and personal success are critical in the new era.

CASE STUDY:-

Rajasthan steel manufacturing company is a well established

company manufacturing and marketing steel furniture items. The

head office of the company is at Jaipur and the plant is also located

near Jaipur. Nearly 140employee are working in the plant.

78


The foundry of the plant provides employment to 24 workers

and use high technical equipment. However foundry has always

been regarded as one of the worst places to work in steel

manufacturing units. The same is the position in Rajasthan steel

manufacturing company. The atmosphere of the foundry is hot,

dirty and tense. Physical fitness is the basic requirement of the

workers for working in the foundry. Technical education,

intelligence, skill, etc. are secondary job requirement. However as

per the job evaluation plan of the company. “Physical ability” and

“working condition” are weighted relatively lower than “training”,

“skill” and “responsibility”. As a result, most of the job in the

foundry rated at the bottom of the wage scales of the company.

The people working in the foundry are low paid and have low

status among the total labour force of the company.

In the course of the last two years, the company finds it difficult

to get workers for foundry work. Unsuitable person are appointed

because of the non-availability of suitable person such unsuitable

person work for one or two months and leave the job due to hard

work, unsuitable work atmosphere and low wage rate. The labour

turnover is also high in the case of foundry workers, which reduce

the sale. Vacancies are always available but job seekers rarely

accept foundry jobs. In the same months, out of 24 workers

required, only 5 to 10 workers working and 15 to 20 posts are

vacant. In spite of all efforts, the personal manager finds it’s

79


difficult to appoint adequate staff for the foundry. People not

getting job elsewhere accept foundry jobs but are eager to leave

foundry jobs immediately when any other job are available. This

situation affects the foundry work. The unit works slowly creating

inconvenience to other departments. The quality of production is

inferior and minor accidents are also common. Now recruitment for

foundry is a continuous problem before the personnel manager.

In June 2002, the situation in the foundry was extremely bad.

Out of 25 workers required, only seven workers were working. The

pending work was substantial and other departments were

complaining due to limited supply of material from the foundry.

One new worker from the foundry was caught in an accident on

10th June 2002. He died in the hospital after five days. The

company is mew facing police case in this regard. All efforts for

appointment of new workers are ineffective due to low wage rate

offered to foundry jobs.

The general manager of the company has noted the seriousness

of the problem. He instructed personnel manager to give

immediate attention to this urgent problem. He also assured that

the management is willing to take all necessary steps to solve this

problem of foundry department. The personal manager was asked

to make his recommendation within ten days. The personal

manager Mr. Samant has difficult task. However he can now make

80


suitable recommendation to solve the problem on permanent

basis.

Mr. Samant studied the whole issue once again and submitted

his concrete recommendation to the general manager.

{1} Which policy of the company increases the labour turnover

ratio?

{2} How the high labor turnover ratio increases the cost and

reduces the sale?

{3} Which, of the following, is the appropriate measure for

solving the present problem?

{1} Which policy of the company increases the labor

turnover ratio?

Ans: There are various polices of the company which increases

the worker turnover ratio are as :

[1] They use high technical equipment but weighted on

“Physical ability” and “working condition” and not on

“training”, “skill” and “responsibility”.

81


[2] Low wages scales

[3] Low status among the total labor force of the company.

[4] Unsuitable work atmosphere for worker

Due to these polices of the company, workers leave the jobs

with in two to three month; this is the main reason for high labor

turnover ratio.

{2} How will the high labour turnover ratio increases the

cost and reduces the sale?

Ans: This can be explained with the help of triangle diagram:

82

COMPANY

External MarketingInternal Marketing


The right side of the triangle shows the external marketing i.e.

setting promises. It is the normal activity of the firm to develop

price, promotion and distribute the service offering to the

customers. Anything that is communicated to the customers before

service delivery is seen as a part of external marketing.

In the figure at the bottom of the triangle is Interactive

marketing or real-time marketing, where the focus is on the skills

of the employees in handling customers contact. Here the actual

service delivery takes place and the firms employees interact

directly with the customers. Customer judges the service quality

not only on the basis of the technical quality of the product-service

package, but also by its functional quality. Hence, having a positive

link between what is delivered through external marketing and

what is delivered through internal marketing is useless if promises

cannot be kept.

The left side of the triangle shows the internal marketing i.e.

enabling the promise. The internal marketing activities of the firm

are to train and motivate its employees to work as a team in order

to deliver the service. It emphasizes on the critical role that

83

Interactive MarketingEMPLOYEES CUSTOMERS


enables the employee to keep the promises made to the customer.

In an organization every single individual plays some role in

marketing, a product or service, and therefore any effort by the

organization by way of training in product handling, customer

knowledge, product knowledge etc. Motivation is an internal

marketing tool. Employee satisfaction and customer satisfaction

are closely linked. Therefore, services marketing Triangle will

collapse, if service employs are unable to deliver the promises

made, which in turn would adversely affect customer satisfaction

and expectations.

But in the case of the Rajasthan steel manufacturing company,

they not motivated the employee by providing the good working

environment; training facilities, fair wages rate.

Person work for one or two months and leave the job due to hard

work, unsuitable work atmosphere and low wage rate and for a

new appointed worker company not provide any training facilities

so that the new appointed worker not liable to complete his job and

supply the raw-material to his internal customer with in a sate time

period which increase the cost of production and reduce the sale

because when we marketing the our product that time we promise

the customer to supply good quality of product with in a time

period, if we not supply the product

with in a fixed period that time customer canceling the order.

Due to cancellation of the order sale of the company is decline.

84


{3} As a human resource manager what appropriate

measure will you follow for solving the present problem?

Ans: The appropriate measures for solving the present problem

are

{A} Improvement in the working condition of factory.

{B} Increase in the wages rate of factory workers.

{C} Appointing the right worker for right job.

{D} Provide training facilities.

{E} Motivate the employee by delegation of authority.

85


Bibliography

Human Resource Management

- Vipul Prakashan


- Fisher, Schoenfeldt, Shaw

Human Resource Development

- P. P. Arya, B. B. Tandon

Management Paradise Publication.

Wikipedia.

Human Resource Management & Human Relation

86


- Dr. V. P. Michael

Himalaya Publications


- Mirza S. Saiyadain

Meeting Details

1) DATE- 28/07/2009 Day : Tuesday

Time : 2.15-2.40pm Venu- Library

Topic : A brief discussion about topic

Roll No. Group Members SIGN

04 Sheshnath Barai (Leader)

03 Renu Bajaj

14 Pratiksha Gaikwad

34 Vaibhav Parmar

44 Aniket Satam

54 Pratik Waghmare

2) DATE- 30/07/2009 Day : Thursday

87



Topic : Reffered different books



03 Renu Bajaj


34 Vaibhav Parmar

44 Aniket Satam

54 Pratik Waghmare

3) DATE- 11/08/2009 Day : Tuesday


Topic : Topics were distributed to each member



03 Renu Bajaj


34 Vaibhav Parmar

44 Aniket Satam

54 Pratik Waghmare

4) Date- 07/09/2009 Day : Monday


Topic : Case Study discussed


88



03 Renu Bajaj


34 Vaibhav Parmar

44 Aniket Satam

54 Pratik Waghmare

5) Date- 15/09/2009 Day : Tuesday


Topic : Complete Topic Study discussed



03 Renu Bajaj


34 Vaibhav Parmar

44 Aniket Satam

54 Pratik Waghmare

89