introduction to human resource management

HRMUNIT –1FUNDAMENTALS-PURPOSE-ROLE OF HRM-EVOLUTION OF HRM, CHALLENGES OF HRM

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Where Managers Work?In an Organization•Organizations are made up of people & function through people. Without people, organizations cannot exist.•An organization is nothing without human resources. What is IBM without its employees? It’s just a lot of factories, expensive equipment , & just impressive bank balances.•Millions of organizations which provide us with so many goods & services actually depend on people to make them operate.• It is only under unusual circumstances such as in case of Maruti Suzuki Manesar plant lockout b’cauz of worker-management riots, that we recognise the important role that employees play in making organizations work.

• Technology, financial & material resources can be purchased & copied but it is impossible to buy & copy human processes such as faster decision making, leadership development, effective negotiation,etc.

• Of all the resources, human resource is the only resource which does not depreciate, with the passage of time.

• The effective utilization of all other resources depends upon the quality of human resources.

• Thus, people are the most important resource of any organization.It is the people/human resources who make an organisation a success or allow it to be handed over to the BIFR.

Thus, human resources represent the people at work. They are the sum-total of the inherent abilities, acquired knowledge & skills of the employees.

So, HRM deals with issues on how to attract employees, retain them, motivate them etc. so that they love coming to work everyday.

Concept of HRM/Definitions: HRM: a process of bringing people and organisation together so that goals of

each one is met effectively and efficiently.

Human resource management (HRM) involves the application of mgt functions & principles. Mgt functions & principles r applied to acqusitioning, developing, maintaining & remunerating employees in organisations.

HRM is defined as“the policies and practices involved in carrying out the “people” or human resource aspects of a management position, including recruiting, screening/selecting, training & development, rewarding, and appraising members for an organisation in order to maximise both employee as well as organisational effectiveness.

Acc. to Flippo, HRM is “the planning, organising, directing & controlling of the procurement, development, compensation, integration, maintenance & utilisation of human resources to the end that individual, organisational & societal objectives are accomplished.”

Concept of HRM/Definitions: Acc. to NIPM of India, “HRM is that part of management concerned with “people”

at work & with their relationships within the organisation. The objective is to attain maximum individual development , desirable working relationsship b/w employers & employees.

CHARACTERISTICS OF HRM (In Handouts)

1. People oriented & individual oriented2. Comprehensive function3. Action oriented 4. Development oriented 5. Pervasive function6. Continuous function7. Future oriented8. Science as well as an art

HR Manager’s Job Conducting job analyses (determining the nature of each employee’s job) Planning labor needs and recruiting job candidates Selecting job candidates Orienting and training new employees Managing wages and salaries (compensating employees) Providing incentives and benefits like insurance, medical benefits, etc Appraising performance Communicating (counseling, personal problem solving,disciplining) Training and developing managers Employees career planning Building employee commitment & conducting attitude surveys Keeping employee records Union/ labour relations Maintaining nice working conditions

Personnel Mistakes Hire the wrong person for the job Experience high turnover Have your people not doing their best Waste time with useless interviews Have your company in court because of discriminatory actions Have your company receive penalties for unsafe practices Have some employees think their salaries are unfair and

inequitable relative to others in the organization Allow a lack of training to undermine your department’s

effectiveness Commit any unfair labor practices

Basic HR ConceptsGetting results

– The bottom line of managingHR creates value by engaging

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

HR Managers Responsibilities1. Placing the right person on the right job through promotions &

transfers.

2. Starting new employees in the organization (Orientation/Induction/Socialization)

3. Training employees for jobs new to them

4. Improving the job performance of each person

5. Gaining creative cooperation and developing smooth working relationships

6. Interpreting the firm’s policies and procedures

7. Controlling labor costs

8. Developing the abilities of each person

9. Creating and maintaining department morale

10. Protecting employees’ health and physical condition

Role of HR Manager

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Purpose/Objectives/Goals of HRM HRM seeks to improve the productive contributions of people

to the organisation in ways that are ethically and socially responsible.

To help organisation reach its goals by providing well-trained & well-motivated employees.

To employ the skills and abilities of the workforce efficiently so as to reconcile individual goals with the organisational goals.

To increase to the fullest the employee’s job satisfaction and self actualisation by encouraging every employee to realise his full potential.

To establish & maintain productive & satisfying working relationships among organisational members.

To bring max. individual development of employees by providing training opportunities.

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To develop and maintain QWL (i.e. a work environment where work does not become routine/monotonous& becomes more rewarding for the employees).

To communicate HR policies to all employees To be ethically and socially responsible to the needs

of the society

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HRM Components

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HR Planning,Recruitment sources,Selection,Socialization= Competent employees who have adapted to the

organization’s culture. +Employee training & career development=Competent employees with up-to-date skills & knowledge +Motivation, Performance appraisal,Rewarding productive

employees=Competent employees who desire to exert high effort +Compensation & benefits,safe & healthy working conditions=Competent employees who are satisfied with their jobs

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Scope or the dimensions of HRM The scope of HRM is very vast. All d major activities in d working

life of a worker-from d time of his entry into an organization until he leaves –come under the purview of HRM.

1. Personnel/Human resource AspectHR planning, Job analysis & design, Recruitment, Selection,

Training, Development, Performance Appraisal, Compensation

2. Welfare AspectWorking conditions, Amenities, Facilities, Benefits, Motivation,

safety & health i.e. employee maintenance

3.Industrial Relations AspectEmployee-employer relations, Grievance handling, dispute

settlement, discipline, collective bargaining

Importance of HRMThe significance of HRM can be discussed at 4 levels:

1.At the Enterprise Level Good HR practices, policies & HR planning will attract and retain talent.

HR helps in training people for challenging roles, developing right attitudes towards job and company, promoting team spirits, developing commitment .

HR helps in securing willing co-operation of employees through motivation, participation & grievance handling.

Utilising effectively the available human resources.

Ensuring that the enterprise will have in future a pool of competent & dedicated employees.

2. At the Individual Level It promotes team work and team spirit among employees by providing a

healthy working environment. It offers excellent growth opportunities for personal development of each

employee who have potential to rise It allows people to work with diligence and commitment

3. At the society level Employment opportunities multiply that provide social & psychological

satisfaction to people. Scarce talents are put in to use Maintaining a balance between the available jobs and job seekers.

4. At the national level Effective use of HR help in exploitation of natural, physical and financial

resources of the nation in a better way

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SYSTEMS APPROACH OF HRM System is a set of interrelated but separate elements or parts working

together towards a common goal. HRM IS A CENTRAL SUB SYSTEM IN ANY ENTERPRISE that interacts

closely & continuously with all other subsystems of an organisation.

Functions of HRM(Explanation in handouts)

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Evolution of HRM Period of industrial revolution (1750 to 1850) – Industrial

revolution marked the conversion of economy from agriculture based to industry based. Modernization and increased means of communication gave way to industrial setup. A department  was set up to look into workers wages, welfare and other related issues. This led to emergence of personnel management with the major task as Worker’s wages and salaries, Worker’s record maintenance, Worker’s  housing facilities and health care. An important event in industrial revolution was growth of Labour Union/Trade Union (1790)  – The works working in the industries or factories were subjected to long working hours and very less wages. With growing unrest , workers across  the world started protest and this led to the establishment of Labour unions. To deal with labour issues at one end and management at the other, Personnel Management department had to be  capable of politics and diplomacy , thus the industrial relation department emerged. 1–20

Evolution of HRM Post  Industrial revolution – The term HRM saw a major evolution after

1850. Various studies were released and many experiments were conducted during this period which gave HRM altogether a new meaning and importance.

A brief overview of major theories released during this period is presented below:

1. F. W. Taylor gave principles of scientific management (1857 to 1911) led to the evolution of scientific HR management approach which was involved in scientific selection & training of workers, Maintaining wage uniformity, Focus on attaining better productivity but less focus on human factor.

2. Hawthorne studies, conducted by Elton Mayo & his associates(1927 to 1940). – Observations and findings of Hawthrone experiment shifted the focus of Human resource from increasing worker’s productivity to increasing worker’s efficiency through greater work satisfaction. This is also called HUMAN RELATIONS MOVEMENT as it focused attention on the feelings of workers, informal groups & their influence on productivity.

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Evolution of HRM3. Douglas McGregor Theory X and Theory Y

(1960) and Maslow’s Hierarchy of needs ( 1954) – These studies and observations led to the transition from the administrative and passive Personnel Management approach to a more dynamic Human Resource Management approach which considered workers as a valuable resource. This was also called the Behavioural science era & led to development of new techniques of motivation and leadership.

– HRM function like job enrichment, employee participation, communication and MBO came into existence.

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PERSONNEL MANAGEMENT VERSUS HUMAN RESOURCE MANAGEMENT

The term “Personnel Management” has a limited scope. In PM, the focus is more on individualistic i.e. individual interest is more than group interest.

Viewed labour as a tool beneficial to organisation. Can be replaced when the tool is worn out i.e. the relationship between

management and employees is merely on contractual basis where one hires and the others perform.

The nature of leadership was very task-oriented and task accomplishments were put ahead of human factors such as personal bonding, interpersonal relationship, trust, understanding, tolerance and care.

Pay policies in PM were merely based on skills and knowledge required for the specific jobs only as per the employment contract. It does not encourage value-added incentives to be paid out.

Also the functions were more departmentalized in which each job falls into one functional department i.e. division of labour based on job needs and skill possessions and requirement.

PERSONNEL MANAGEMENT VERSUS HUMAN RESOURCE MANAGEMENT Personnel Deptt was as such considered as

non productive PM was considered as a routine activity of

hiring and maintaining personnel records Never considered as part of strategic

management of business Historically, PM preceded HRM.

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PERSONNEL MANAGEMENT VERSUS HUMAN RESOURCE MANAGEMENT

HRM Scope is vast compared to PM i.e. HRM focuses on overall organisation’s performance & not just one individual.

PM is a part of HRM. Not viewed labour as a tool beneficial to organisation, but as a

resource/asset to be nurtured and developed and to be considered as a Human capital.

The HRM’s "flexible approach" encourages employees to choose various ways to keep contributing their skills and knowledge to the organization. HRM, has created flexi-working hours, work from home policies,etc.

HRM creates leaders who are transformational. This leadership style encourages business objectives to be shared by both employees and management. Here, leaders only focus more on shared vision; Corporate culture and missions; Trust and flexibility; and how to integrate individual needs with business needs.

PERSONNEL MANAGEMENT VERSUS HUMAN RESOURCE MANAGEMENT

In HRM, the pay is designed to encourage continuous job performance and improvement which is linked to value-added incentives such as group profit sharing, ESOP’s, individual incentive plans,etc.

The job design is based on teamwork. HRM encourages job rotation which is inter and intra-departmental based and job enlargement which encourages one potential and capable individual to take on more tasks to add value to his/her job and in return enjoy added incentives and benefits.

HRM Deptt is as productive like any other because development of human assets is very important for competitive advantage

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PERSONNEL MANAGEMENT VERSUS HUMAN RESOURCE MANAGEMENT

The activities of HR Deptt vary from planning, job analysis, job design, job evaluation, recruitment and selection, training and development, compensation management, motivation, welfare, safety, health etc

HR policies promote mutuality-mutual/common goals, mutual respect, mutual rewards & mutual responsibilities as mutuality elicit commitment which in turn yields better economic performance.

HRM is now part of strategic management of business & thus the term HRM has replaced PM. Thus the subject has matured from IR to PM to HRM to HCM.

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Personnel Management vs HRMDIMENSIONS PERSONNEL

MANNAGEMENTHUMAN RESOURCE MANAGEMENT

EMPLOYEE CONTRACT Careful delineation of written contracts

Aim to go beyond contracts

RULES Importance of devising clear rules

Impatience with rules

GUIDE TO MANAGEMENT ACTION

Procedures Business need

BEHAVIOUR REFERENT Norms/ customs and practices

Values / Mission

MANAGERIAL TASK Monitoring employees Nurturing employees

KEY RELATIONS Labour Management Customer

Personnel Management vs HRMDIMENSIONS PERSONNEL

MANNAGEMENTHUMAN RESOURCE MANAGEMENT

INITIATIVES Unsystematic, partial initiatives

Integrated initiatives

SPEED OF DECISION Slow Fast

LEADERSHIP ROLE Transactional Transformational leadership

COMMUNICATION Indirect Direct

PRIZED MANAGEMENT SKILLS

Negotiation Facilitation

SELECTION Separate, marginal task Integrated, key task

LOCUS OF CONTROL External Internal(the employee believes they can control their life)

Personnel Management vs HRMDIMENSIONS PERSONNEL

MANNAGEMENTHUMAN RESOURCE MANAGEMENT

PAY Job evaluation Performance related

CONDITIONS Separately negotiated Harmonization

LABOUR MANAGEMENT Collective bargaining contracts

Individual Contracts

JOB CATEGORIES AND GRADES

Many Few

JOB DESIGN Division of Labour Team work

CONFLICT HANDLING Reach temporary agreement

Manage climate and culture

ORGANISING PRINCIPLES

Heirarchial, bureacratic, Top down, Centralised

Flat organization, communications are horizontal, Bottomup, Decentralised

Personnel Management vs HRMDIMENSIONS PERSONNEL

MANNAGEMENTHUMAN RESOURCE MANAGEMENT

TRAINING AND DEVELOPMENT

Controlled access to courses

Learning Organization

SCOPE NARROW WIDER

RESPECT FOR EMPLOYEES

Labour is treated as a tool which is replaceable

People are treated as assets to be used for the benefit of an organisation, its employees and the society as a whole

SHARED INTERESTS Interest of the organisation are uppermost

Mutuality of interests

EVOLUTION Precedes HRM Latest in the evolution of the subject

Examples of HR Job Duties Recruiters

– Search for qualified job applicants. Equal employment opportunity (EEO) coordinators

– Investigate and resolve EEO grievances, examine organizational practices for potential violations, and compile and submit EEO reports.(EEO-Equal opportunity employment refers to the approach of the employers to ensure the practice of being fair and impartial in the employment process & prohibits employers from discriminating against employees on the basis of race, sex, creed, religion, color, marital status, minority status, disability or national origin. With the increasing diversity in workforce, it is the responsibility of the employer to create an equality-based and discrimination-free working environment and practices. EEO principles help to realize and respect the actual worth of the individual on the basis of his knowledge, skills, abilities and merit.) Equal employment opportunity is necessary to ensure:-To give fair access to the people of all development opportunities

– To create a fair organisation, industry and society.– To encourage and give disadvantaged or disabled people a fair chance

to grow with the society

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Examples of HR Job Duties (cont’d) Job analysts

– Collect and examine information about jobs to prepare job descriptions. Compensation managers

– Develop compensation plans and handle the employee benefits program.

Training specialists– Plan, organize, and direct training activities.

Labor relations specialists– Advise management on all aspects of union–management relations.

Employee welfare officers(to handle welfare activities in factories as required by law)

Perf Appraisal: It’s a time bound exercise done by the companies to assess the performance and the potential of the employees towards achieving the set goal/targets as well the mission and vision of the company. It complements the employee in achieving their respective targets.

Cooperative Line and Staff HR Management

1. The line manager’s responsibility is to specify the qualifications employees need to fill specific positions during recruiting & hiring.

2. Then the HR staff takes over.HR staff then develops sources of qualified applicants and conduct initial screening interviews

3. HR administers the appropriate tests and refers the best applicants to the supervisor (line manager), who interviews and selects the ones he or she wants.

4. In training also, the line mgr describes what KSA he expects the employees to possess, then the HR team devises a training program, which the line mgr then administers so that learning is brought back to d workplace.

Thus, HR function is a STAFF FUNCTION wherein HR managers assist & advise line managers in functions such as hiring, training, evaluating, rewarding, counseling employees.

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The Changing Environment Of HRM/HR’s changing role/Challenges of HRM

The HR deptt’s responsibilities have become larger, broader & more strategic since the olden days of personnel management.

Earlier it was thought that shortage of capital is the bottleneck for a developing Company. But dis no longer holds true. Rather, it’s the workforce & d Co’s inability to recruit & maintain a good workforce dat does constitute d bottleneck for production. The growth of many Co’s gets hampered or partly stopped if they can’t maintain an efficient & enthusiastic labour force.

The following are the various challenges in modern HRM:

Globalization: Globalized production & sales(Eg: Dell produces & sells PC’s in China, Toyota produces its cars in US & Mexico) are possible because of growing integration of the World economy & agreements/FTA’s between countries. So, the HR deptt of these huge Companies help to integrate its global operations. Eg: HR operations deptt. maintains a database of production managers who can move among its factories in different countries. Also, HR needs to formulate selection, training & compensation policies for the expatriate employees.

Globalization means more competition from foreign players & more competition means more pressure to be “World class”-to lower costs, to make workers more productive, & to do things less expensively. Thus, HR function is a key player in helping Company achieve these strategic/long term aims.

Eg. MNC’s have intranet enabled processes that let employees serve their own HR needs like changing the insurance policy beneficiaries name, or applying for leave in the calendar,etc. This also cuts global HR communication costs.

Thus, managing GLOBALIZATION in World-class firms is a major HR challenge.

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Challenges of HRM Changed employee expectations: Employees today demand

empowerment/involvement from the management along with upward communication. Eg: the worker’s union at Companies like OTIS,HUL have an equal say in the management policies.

Technological Advances: The improvements in technology that make firms WORLD-CLASS involve technology.

Eg: Carrier Corporation saves a huge amount of money by using internet to handle all its business transactions with the retailers & distributors as they r able to enter & confirm an order in minutes. So, the HR faces the challenge of quickly applying technology to the task of improving its own operations.

Also, technology is changing the nature of work. Even factory jobs r more demanding. They need to manufacture more items per day according to customer demand, say in manufacturing apparels. Also, JIT reduces inventory costs & customer ordering happens simultaneously with manufacturing.

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Eg: When a customer orders a Dell computer, the same internet message that informs Dell’s assembly line to produce the order also signals the keyboard & UPS manufacturers to pick up their parts at a particular time. Thus, the waste time/slack time is reduced & Co’s r able to manage with less workforce

Workforce Demographics-the workforce is becoming more & more diverse as women, minority group members & older workers, contract workers enter the workforce.

Exporting jobs: This means more & more jobs are being outsourced to low cost countries where cheap labour is available. Eg: US MNC’s like IBM, Dell have their call centres in India & China.

With these trends the HR mgr’s job has grown broader & more strategic over time. With the development of knowledge industry & the resulting high demand for people, the HR function started to take a strategic focus.

HRM/HR’s changing role/Challenges of HRM

Strategic partner role(partnering with top mgt in designing and executing the Co’s strategies:

Eg: If a Co. decides to transform its existing plant to a new, computerized, automated technology plant, then this new automated technology requires a new kind of working environment with employees who possess the KSA’s & motivation to run the new automated plant, who can work in teams, manage their own work & trng to run d plant’s computerized equipments.

So, the HR mgr is entrusted to select, train & organise the tech-friendly workforce the new plant required through its personnel policies. Thus, the HR must significantly support the Co‘s changing strategies(the Co’s strategy is to close d old plant & replace it with a new,highly automated one) & this role of HR is known as STRATEGIC HRM.

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Managing diversity and Change agent role

Carrying out Value Chain Analysis –Balancing internal and outsourcing-working for lean organisation with focus on productivity & performance(most orgns ourtsource activities like payroll, benefits, applicant testing & screening, reference checks, exit interviews, employee trng,etc. to firms like Manpower Inc, Kelly Services, Team Lease, Ma Foi Mgt consultants, Hewitt Associates, etc who provide temporary staffing services in India

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HRM/HR’s changing role/Challenges of HRM

Managing and adopting changes in technology(Eg: the intranet enable employees to sign up for, manage their own benefits packages or change their benefits allocations as they like & update their personal information; technology is used to facilitate distance learning & provide training to employees quickly & inexpensively; new technologies like network monitoring software used to track employee’s internet/e-mail activities,etc)

Job re-designing

Talent hunting, developing and retaining-global context

Taking care of health care benefits

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