Human resource management

Human Resource Management

From the Book Human Resource Management (6th Edition) by- K.Aswathappa

Ch-1 Understanding the Nature & Scope of Human Resource Management

• Def-: Functions like Recruitment, Selection, Training & Development (people’s dimension in an organization).

• Scope-Entry-Leaving

HRM Functions & Objectives

Function-: supply of competent & willing employeesObjectives-:

Societal (sensitive to needs & legal Compliance)Organizational (effectiveness, Planning, selection, Training & Development, Appraisal)Personal (employee career, potential, training & development)

Outsourcing:72% of Indian companies are outsourcing their HR activities.e.g. Employee hiring, Training & development, Payroll preparation, Benefits administration, Statutory records maintenance.

IIPM headquarters at KolkataNational Institute of Labor Management (NILM) at MumbaiMerged to form National Institute of Personnel management in 1980.

Chapter-2: Context of HRM

• External – Political, Legal, Economic, Technological• Internal-Org. culture, Cultural, Unions, Professional bodies• Analysis helps in pro-active approach• Political: Article 14: Equality before the law Article 15: Prohibition of discrimination-religion, race, caste, sex or place

of birth Article 16: Equality of opportunity in public employment Article 23: Prohibits forced labor Article 24: Prohibits employment of children –factories, mines/hazardous

jobs Article 38(d) Equal pay for Equal work Article 38(e) Health & Strength of workers, tender age of children forced

to work out of economic necessity- jobs not suitable to their health. Article 42: Just & Humane conditions of work & Maternity leave for

women Article 43: Living wages for workers Article 43(a): Participation of workers in management

Economic:Supplier: provides HRCompetitorsCustomersEconomic GrowthIndustrial Labor- diversityGlobalization

Technological: HRIS

Internal:Strategy, Task & LeadershipUnionsOrganizational culture & conflictEnacted Environment- own creation e.g. OPECDomain- carves out for itself, Domain ConsensusTask Environment- all groups that can influence organization. E.g. range of products, technology, etc.

Scanning the Environment: Trends & projections, E.g. labor market, legal environment etc.

Knowing the Environment

Chapter-3 Integrating HR Strategy with Business Strategy

• Strategic HRM- HR abilities – anyone who deals with people, regardless of functionality.

• Barriers-Perceived short-term Inability of HR to think strategicallySenior managers lacks appreciation for HR valuesToo much concerned with technicality rather than people

valuesDifficult to quantify HR outcomeHR other than capital assets is not owned by the

company and hence risk in investment.

Corporate level strategies: which business?Growth strategies (horizontal, vertical, conglomerate, related-unrelated, mergers, strategic alliances)Stability strategiesRetrenchment strategiesBusiness level strategies: how to compete in chosen business, SBUFunctional level strategies : HR

Identification of key HR activitiesPro-reactiveCritical thinkingExplicit comm. of goalsQuality & serviceBuilding core competencies

Environment scanningSWOT analysisStrategy implementationStrategy evaluation

Chapter-4Human Resource Planning

• The first part of human resource strategy is human resource planning

• All other HR activities such as employee hiring, training & development, remuneration, appraisal, & labor relations are derived from HRP.

• HRP is a sub-system in total Org. Planning• Importance:

Future personnel needs, succession planning Part of strategic planning Creating highly talented personnel International strategy Foundation for personnel functions Investment in HR’s (human assets as compared to physical assets

increase in value) Resistance to change & move

Factors affecting HRP:1. Type & strategy of Organization.2. Organizational growth cycles3. Environment uncertainties4. Time horizons (short/long term) greater the uncertainty, shorter the time

horizon5. Type & quality of source information (HRIS)6. Outsourcing

Environment scanning:•Economic•Technological•Demographic•Political & legislative•Social concerns

Organization objectives & policies:•Internal promotion•Training & development•Enrichment of job•Union•Retaining

Demand: Quantity & QualityBasis- annual budget and long term corporate plan translated into activity levels for each function & department.External: Competition, EconomicInternal: Budget constraints, Employee separation etc.

Forecasting techniques:

Managerial judgment-(bottom up/ top-down)

Ratio trend analysis-(Past ratios, e.g. sales volume -employee size)

Regression analysis

Work supply technique(length of operation-amount of labor reqd.)

Delphi technique

Flow models (Markov analysis)

I. Time span (Time to be covered-depends on HR Plan)

II. Mutually exclusive categories of employees -movement in

categories

III. Estimate probability of transition based on past trends

HR supply forecast : External (e.g. colleges & universities)Internal :

Existing Employees: from HR audit: Skills inventories (non-managers)

Management inventories (managers)•Work history•Strengths•Weaknesses•Promotion potential•Career goals•Personal data•No. & types of employees supervised•Total budget managed•Previous management duties

Inflow-outflow = No. of current employeesTurnover rate = No. of separations in 1 year

Avg. no. of employees in 1 yearAbsenteeism rate= No. of workers absent*No. of days)

Average no. of workers*No. of working daysE.g. 4% means 96 out of 100 are availableRetention plan:

Compensation planPerformance appraisalEmployee quitting because of conflict or green pasturesThe induction crisis(accurate job requirements, realistic job picture)ShortagesUnstable recruits- find characteristics

* 100

*100

Chapter-5Analyzing work & Designing jobs

• Origin civil right movement• Collecting job related information-Job description &

specification• Monetary consideration is necessary- deciding whether a

activity is work or not• Work has two characteristics-

Sociological- Leadership, Politics, Power, Group dynamicsPsychological- Learning, Attitude, Motivation, Satisfaction & Perception.

• Job description – Task & ResponsibilitiesImportance: – Lays foundation for HRP– Employee hiring– Training & development, Performance appraisal– Salary & wage fixation, Safety & Health.

ProcessStrategic choices:

Extent of employee involvement, Level of detail, Timing & Frequency of analysis, Past oriented vs. Future oriented

Sources of job data:Non-human: Human:*Existing data *job analysis*Equipment maintenance record *job incumbents*Equipment blue print *supervisors*Work area architecture *job experts*Films of employee working*Training manuals*Magazines & news papers

2) Information Gathering:•Type of data (time & budget constraints)•Methods of data collection•Who should collect: trained job analyzers, supervisors, job-incumbents

Methods:ObservationInterviewQuestionnaireChecklistsTechnical conferenceDiary methodsQuantitative:

Position analysis questionnaire:194 elements, 6 categories ,degree of involvementManager position development questionnaireFunctional job analysis: Relation to people, data, & things.

Job Analysis Sheet

Job Description Sheet

Purpose of job analysis:•HRP•Employee hiring •Training & development •Performance appraisal•HRIS

Job design: conscious effort, organize tasks, duties & responsibilities, follows after job- analysisOrganization factors: internal structure of each task requires planning, executing & controlling, completely integrated job. Work flow, Ergonomics, work practices.Environment factors: Availability of employees, abilities, social & cultural expectations.Behavioral elements:Feedback, Autonomy, Use of abilities, Variety

Job Design ApproachesJob rotationJob engineering-specialization, time & motion studiesJob enlargementJob enrichment: adding more motivators (empowerment)

Hertzberg 8 characteristics1) Direct feedback2) Personal accountability3) Direct communication4) Learning5) Client relationship6) Control over resources7) Scheduling own work8) Unique experience

Socio-technical systemsErgonomicsTele-commutingAlternative work pattern (scheduling)

Chapter-6 Recruiting Human resources

• Recruitment represents the first contact that a company makes with potential employees.

• Recruitment program helps the firm in 4 ways:1. Attract highly qualified & competent people.2. Ensure that the selected candidate stay longer with the

company.3. Make sure that there is match between cost & benefit.4. Help the firm create more culturally diverse work force.

• Factors governing Recruitment:External: Internal:Supply & demand Recruitment PolicyUnemployment rate HRPLabor market Size of the FirmPolitical- legal CostImage Growth & Expansion

Recruitment: process of identifying & attracting job seekers so as to build a pool of qualified job applicants.

5 stages:1.Planning2.Strategy development3.Searching4.Screening5.Evaluation & control

(how to distinguish applicants who are unqualified from those who have a reasonable chance of success)

Planning: No. & Type (yield ratios)

Strategy development: •Make/Buy, •Technological sophistication of recruitment & selection devices

Sources of recruitment:

Internal: External:Present employees E- recruitmentEmployee referrals competitorsFormer employees consultantsPrevious applicants walk-in/write-in

Campus recruitmentEmployment Exchange (Acc. To act, every Industrial Establishment ( >25 workers) should notify vacancies in it.)

When to look: time lapsed data

Searching: source activation-reported by line managers

Selling: realistic job picture + attract as many as possible.

Job compatibility questionnaire: whether an applicant’s preference for work match the characteristics of the job.400 item instrument.

Alternatives: overtimeEmployee leasing-outsourcing of recruitmentTemporary employment.

Chapter 7 Selecting Human Resources

• Selection is the process of differentiating between applicants in order to identify & hire those with a greater likelihood of success in a job.

Choosing tests-reliability, validity, objectivity, & standardization.

Contract of employment:Job titleDutiesDate when continuous employment startsRate of pay, allowances, overtime, hours of work including lunch break & shift arrangementsSickness,Length of notice,Grievance procedureDisciplinary procedureWork ruleArrangements (terminating, union membership),Rights to patents,Employee rights to vary terms of contract subject to proper notification.

Audit of selection programFeedback, how well selected candidate perform, turnover

Chapter-9 Training, Development & Career Management

• Training & Development need ₌ standard Performance-Actual Performance.• Training:-Specific Skills• Development:- Learning opportunities for employees to grow• Source of competitive advantage

Chapter-10Appraising & Managing Performance

Design of Appraisal Program

Problems of Rating:

Leniency or Severity

Central Tendency

Rater Effect

Halo Error

Primacy & Recency Effects

Perceptual Set (previously held beliefs)

Performance Dimension order

Spill-over Effect (Past Performance)

Status Effect

Solving Rater’s problems:-Training to Raters

What should be rated:

Quality

Quantity

Timeliness

Cost effectiveness

Need for supervision

Interpersonal impact

Community service

Potential Appraisal

Conceptual effectivenessOperational effectivenessInterpersonal effectivenessAchievement motivation

Appraisal Methods

Methods of Job-evaluation

Analytical:• Factor comparison: factors compared, e.g.- mental requirements, skills, physical, etc.

• Point- ranking method: selection of job factors ( skills, education, responsibility, job conditions, etc.)- given points.

Non-analytical:• Ranking: no yardstick• Job grading-yardstick for

classification

Chapter-11Managing Basic Remuneration

Theories of Remuneration

Reinforcement & Expectancy TheoryBehavior which has rewarding experience is likely to be repeated.Vroom’s Expectancy theory focuses on link between rewards & behavior.

Equity Theory:Internal Equity: different jobs in the OrganizationExternal Equity: relative to outside similar jobIndividual Equity

Agency Theory: To align with organizational goals

•Demand & Supply-going rate system•Legislation:

Payment of wages act, 1936 (regulate irregularity & unauthorized deduction, payment in particular form & at regular interval)Minimum wages act, 1948Payment of Bonus act, 1965Payment of Gratuity act, 1972Equal remuneration act, 1976Wage Boards, tribunals, & fair wage committees.

•Managerial Remuneration: Company’s Act, 1956.

•Business strategy:Invest to grow:----------→Entrepreneurial Skills Manage Earnings:-------→Management EffectivenessHarvest:--------------------→Cost control

Minimum wage-----------→ Fair Wage---------------→Living Wage(frugal comforts)

Chapter-13Managing Employee Benefits & Services

• Why Benefits & services? Mitigate fatigue Discourage labor unrest Satisfy employee objectives Aid recruitment Reduce turnover, and Minimize overtime costs

• E.g. Legally required: old age pension, health insurance, worker’s compensation, unemployment compensation

Contingent & deferred benefits:Pension plansGroup life insuranceGroup health insuranceAnnual wageMaternity leaveChild care leaveSick leaveDental benefitsSuggestion awards

Other benefits:Travel allowancesCompany car & subsidiesMoving expensesUniform & tool expenseEmployee meal allowancesChild-care facilities

3 conditions:Monetary calculableNot specific amountNot specific time for payment

Chapter-14Motivation Perspectives

Intrinsic factors:Work itselfResponsibilityAdvancement

Vroom’s Expectancy Model :Expectancy: expectancy-performance

Effort Performance GoalValence(desire-likeability for goal)Expectancy*Instrumentality*Valence

Not tested empirically

Probability-0-1 1st level outcome-2nd level outcome

(-1-----+1)(0(indifferent)/1/-1(hatred))

Equity theory-To be treated equitably at work placeCriticism (judgment of fair treatment)

Porter & Lawler performance-satisfaction Model:

Place the right person in the right job (abilities & traits)

Carefully explain their role

Explain in concrete terms performance level expected

Rewards preferred

Chapter-16Motivation in action

Performance based rewards

Organization: profit sharing, stock options

Team: gain sharing, special bonuses

Individual: piece rate, commission

Skill VarietyTask identityTask significance

AutonomyFeedback

Experienced meaningfulness of job

Experience responsibilityKnowledge of actual results

High internal Work Motivation,Low absenteeism & Turnover

Contemporary Job Design:TelecommutingFlexi-workTask revisionSkill development

Participation at the board level

Participation through share ownership

Through joint councils, committees, & work councils

Through job enlargement, & job enrichment

Through quality circles

Through empowered teams

Quality of Work Life:Ensured when members of an organization are able to satisfy their important personal needs through their experiences in organization.

Chapter-17Empowering Employees

• Participative Management also called Employee Empowerment• Staff/Work councils-representation entirely of workers/employees• Joint councils/committees-both employee & employer • Article 43 A (42nd amendment) state through suitable legislation

– Human welfare– Human as thinking & independent free being– Mental & physical health– Enhancing self-belief & self-efficacy

• Negative consequences of hierarchy & authority

– 1975-1977 Emergency– 1977- Janta– 1979- congress– Bill- may 30, 1990 in Rajya Sabha-----------making it statutory

• Shop floor council & Establishment Council

20 points program for worker’s participation

Chapter-18Communicating with Employees

• Exchange & understanding of information• Play’s a major role in changing people’s attitude• Mould by supply of information e.g. company’s news letter• Decision maker’s need information from many people to

perceive problems etc.• Originate Channel Receive

Sender-Clarity of thought

Verbal,Non-verbalTone,Facial,Body-language

Selective Listening,Perceptions (stereotyping, projection-reflecting of one’s own thoughts on others, halo-effect)

Meta communication- interpretation (add our own interpretation) Remedy-Active listening

Organization Communication : Authority

Communication Roles: Gate keepers, Liaisons (not members of any group), Isolates, cosmopolites-external world

Chapter-19Managing Betterment at work

• The Factories Act, 1948

a) Washing Facilities

b) Facilities for storing & drying Clothes

c) Sitting facilities for occasional rest for workers who are obliged to

work standing

d) First aid boxes, one for every 150 workers & ambulance facilities, if

there are more than 500 workers

e) Canteen, if employing more than 250 workers

f) Shelters, rest rooms, lunch rooms, if employing more than 150

workers

g) Crèche, if employing more than 30 women

h) Welfare officer, if employing more than 500 workers

i) Not more than 48 hours per week

j) Not more than 9 hours per day

k) No worker has to remain in factory for more than 10 ½ hours

l) Rest interval of ½ hour, after 5 hours of work

m) Weekly one holiday

n) If worker puts more than 48 hours per week-overtime wages

o) No overlapping of shift

p) Women workers are not to be employed between 7 p.m. & 6 a.m.

(exception allowed)

q) No child below 14 years of age to be employed

Chapter-20A safe & Healthy Environment

Strategic choices- level of protection Formal/informalProactive/reactive(as marketing tool)

Safety Policy: goals, responsibility, & authority

Organization for safety -Safety committees

Risk managementAssessing risks (frequency, probability, & severity), steps to reduce

Incidence rate: no. of recordable injuries * 1 million no. of employee exposure hours

Severity rate= no. of work hours lost * 1 million total no. of worked hours

Remedies:

Engineering revision,

Persuasion & appeal,

Personal adjustment & discipline

Training,

Safety posters & film shows,

Safety week & awards

Effectiveness: organic- how well designed, change in behavior, safety inspection, audit

Health: Physical & Mental

Factories Act, 1948

Factories to be kept clean & free from effluvia & dirt

Arrangements to be made for disposal of wastes & effluents

Adequate ventilation & temperature to be maintained

Measures to be taken for prevention of inhalation or accumulation

of dust & fumes

Standards for artificial humidification to be fixed

Overcrowded related injuries to health of workers to be avoided

(9.9/14.2 cubic meters of space must be provided for each worker)

Sufficient & suitable lightening must be provided in every part of

factory

Glazed windows to be kept clean, measures for prevention of glare

& shadows

Suitable points for wholesome drinking water- legibly marked &

away from urinals. Water needs to be cooled, if no. of workers 250 or

more

Latrines & urinals separately for males & females, well lighted &

ventilated

Sufficient no. of spittoons

Stress: individual response to disturbing factor in the environment.Eustress-positive stress

Remedies:

Meditation

Cognitive restructuring: replacement of thoughts- reasons

applied

Time management: Delegate as much as possible minor work to

subordinates

Chapter-26Evaluating HRM Effectiveness

HR Research

Wage surveys

Effectiveness of various recruitment sources

Effectiveness of training efforts

Survey of supervisor’s effectiveness

Job analysis

Survey of employee needs etc.

Analytical approach:

Cost-benefit analysis (utility analysis)

(excessive reliance on quantitative)- dysfunctional

Qualitative – (loyalty, commitment, attitude etc.)

Balanced Score Card: 4 dimensions

1.Financial Performance

2.Customer Service

3.Internal Business Processes

4.Capacity to learn & achieve growth