Micro and Macro HRM

PPT3
 Micro and Macro HR Dimensions
• Knowing which HR practices to adopt and which HR
disciplines to focus on is crucial in resolving macro and
micro HR issues.
• A competent HR professional knows which disciplines
and policies to focus on and understands how the legal
environment affects HR.
• A competent HR professional also knows that effective
HR helps transform business from just a place to work
into an environment which provides employees varied
opportunities for meaningful contributions.
• Meaningful employee contributions lead to decreased
operating costs, innovation and increased profits.
• Implicit in the above explanation is the fact that results
are measurable via means such as before and after
analysis and time and expense audits.
 Micro HR
• Micro HR is the actual execution of duties as
delineated at the macro level.
• These duties include the administration of
policies regarding the selection, hiring,
compensation, placement, performance
management, promotion, conflict resolution,
discipline and discharge of employees.
• Some of the terms commonly associated with
micro HR are operations planning, practices,
procedures and administration.
 Macro HR
• Macro HR is the strategic function of HR in a
particular work environment.
• Macro HR encompasses the understanding of
what HR means to a business. That is, how HR fits
into the organization’s structure, mission and
planning.
• Macro HR further incorporates policy and practice
development and designating who administrates
HR.
• Additionally, collective bargaining and union
avoidance campaigns are generally considered
macro related concerns.
• Some of the vernacular related to macro HR is
strategic planning and organizational design and
development.
 Factors affecting Macro HR policy
• Personnel manager cannot perform his job in a vacuum
as a number of environmental factors affect HRM.
• The environment furnishes the macro context and the
organization is the micro unit.
• Of primary importance here are the external influences of
economic conditions, labour markets, laws and
regulations and labour unions.
• Each of these external factors separately or in
combination can influence the HRM function of any
organization.
• The changes in the external environment of an
enterprise have a profound impact on its personnel.
• These changes include technological obsolescence,
cultural and social changes, policies of the government
etc.
• Technological Innovation: Rapid
technological changes and innovations are
taking place all over the world.
• Economic Factors: Economic conditions
influence financial “health” of the
organization.
• Employee's Organizations
• Labour Markets
• Changing Demand of Employers
• Legal Factors
• Human Resource in the Country
 Factors affecting Micro HR policy
• Policies are the guide maps in the organization.
Policies tell people what they may or may not do.
• These direct the manner in which the objectives of
the organization are to be achieved.
• Objectives show the destination but the route
towards that destination is shown by policies.
• Some of the important policies that influence the
work of an HR manager are listed as follows:
i. To provide safe working conditions for employees.
ii. To encourage the employees to achieve as much
of their potential as possible.
iii. To provide such compensation to employees that
encourages high level of performance.
iv. To provide promotional avenues to employees.
v. Understanding the type of culture that prevails
within a firm is important in order to formulate
appropriate HR policies and strategies. HR
managers have to choose the paths that best
reflect the culture of the firm and the attitudes of
the people.
vi. Most of the modern organizations are technology
based and endowed with capital and highly
educated employees. These organizations tend to
have an organizational structure where the
number of employees at the operating level is
relatively few. In modern organizations, the job of
HR managers is a very challenging and
significant one that calls for appropriate policies.
 How Macro and Micro HR Impact
the Bottom Line
• A business will encounter difficulties when it fails
to account for changes to macro and micro HR
practices and changes to labour and
employment laws.
• Such difficulties include: unsafe workplace,
attendance issues, conflict, misconduct, union
organizing campaigns, high turnover and
litigation.
• Simply stated, when a business encounters
HR related problems, money is lost.
 Human Resource Planning
• Human Resource Planning (HRP) is the
process of forecasting the future human
resource requirements of the organization and
determining as to how the existing human
resource capacity of the organization can be
utilized to fulfill these requirements.
• It, thus, focuses on the basic economic concept
of demand and supply in context to the human
resource capacity of the organization.
• It is the HRP process which helps the
management in meeting the future demand of
human resource in the organization with the
supply of the appropriate people in
appropriate numbers at the appropriate time
and place.
• Further, it is only after proper analysis of the HR
requirements can the process of recruitment
and selection be initiated by the management.
• Also, HRP is essential in successfully achieving
the strategies and objectives of organization.
• In fact, with the element of strategies and long
term objectives of the organization being widely
associated with HR planning these days, it has
now became Strategic HR Planning.
 HRP Significance & Process
• HRP is of primary nature and it precedes all
other HRM functions. Without HRP no other
function can be undertaken in any meaningful
way.
• HRP aims at fulfilling the objectives of manpower
requirement.
• It helps to mobilize the recruited resources for
productive activities.
• HRP is an important process aiming to link
business strategy and its operation.
• The significance of human resource planning are
as follows:
1. Future Manpower Needs
• HRP ensures that people are available to provide the
continued smooth operation of an organization. It
determines the future needs of manpower in terms of
number and kind.

2. Coping With Change

• HRP is important to cope with the change associated with
the external environmental factors. It helps assess the
current human resources through HR inventory and
adapts it to changing technological, political,
socio-cultural, and economic forces.

3. Recruitment Of Talented Personnel

• HRP is about recruiting and selecting the most capable
personnel to fill job vacancies.
4. Development Of Human Resources
• HRP identifies the skill requirements for various levels of
jobs. Then it organizes various training and development
campaigns to impart the ability in employees to perform
the task efficiently and effectively.

5. Proper Utilization Of Human Resources

• HRP works on acquiring and utilizing manpower
effectively to achieve objectives. It focuses on the
optimum utilization of human resource to minimize the
overall cost of production.

6. Uncertainty Reduction
• This is associated with reducing the impact of uncertainty
which are brought by sudden changes in processes and
procedures of human resource management in the
organization.
 Steps to Human Resource
Planning
Analyzing Labour Supply
• The first step of human resource planning is to identify the company's
current human resources supply. In this step, the HR department studies
the strength of the organization based on the number of employees,
their skills, qualifications, positions, benefits, and performance levels.

Forecasting Labour Demand

• The second step requires the company to outline the future of its
workforce. Here, the HR department can consider certain issues like
promotions, retirements, layoffs, and transfers—anything that factors
into the future needs of a company. The HR department can also look at
external conditions impacting labor demand, such as new technology
that might increase or decrease the need for workers.

Balancing Labour Demand With Supply

• The third step in the HRP process is forecasting the employment
demand. HR creates a gap analysis that lays out specific needs to
narrow the supply of the company's labor versus future demand. This
analysis will often generate a series of questions, such as:
• Should employees learn new skills?
• Does the company need more managers?
• Do all employees play to their strengths in their current
roles?

Developing and Implementing a Plan

• The answers to questions from the gap analysis help HR
determine how to proceed, which is the final phase of the
HRP process.
• HR must now take practical steps to integrate its plan
with the rest of the company.
• The department needs a budget, the ability to implement
the plan, and a collaborative effort with all departments
to execute that plan.