Human Resource

Management (HRM)

TANUSHREE SANWAL
ASSISTANT PROFESSOR KSOM
Course content
Module 1:

Essentials of HRM: Functions of HRM, HRM vs.

HRD, Strategic HRM: Meaning and Roles in
Strategy formulation and implementation,
Barriers to strategic HRM, Linking HR strategy
with business strategy, Roles of HR Manager,
roles of HR in merger and acquisitions,
Technology & HR and changing roles of HR due to
technology, HRM linkage with TQM & productivity.
Case Studies
Human resources: Meaning

Human resources means the collection of

people and their characteristics at work.
These are distinct and unique to an
organization in several ways.
 Human resources: Definition
Human resources are ”A whole consisting of inter-related,
inter-dependent & interacting psychological, sociological &
ethical components”.

-Michael J. Jucius

“HRM is a management function concerned with hiring,

motivating and maintaining people in an organization. It
focuses on people in the organization” (Aswathappa, 2008)
Human resource
management: Definition
Human resource management is concerned
with policies and practices that ensure the
best use of the human resources for fulfilling
the organizational and individual goals.

-Edwin B. Flippo
Why do we need
Human Resource Management?
COMPETITIVE HUMAN EMPLOYEE
CHALLENGES RESOURCES CONCERNS
• Globalization • Planning • Background diversity
• Technology • Job design • Age distribution
• Managing change • Staffing • Gender issue
• Human capital • Training & • Educational level
• Responsiveness Development • Employee right
• Cost containment • Appraisal • Privacy issue
• Compensation • Work attitude
• Benefits • Family concern
• Labor relations
 Characteristics of HRM
• People oriented
• Action- oriented
• Individual- oriented
• Development – oriented
• Pervasive Function
• Continuous Function
• Future- oriented
• Challenging function
• Science as well as art
• Staff function
• Young discipline
Objectives of HRM

To act as a liaison between the top management

and the employees.
To arrange and maintain adequate manpower
inventory
To devise employee benefit schemes
To ensure and enhance the quality of work life
To offer training
To help keep up ethical values and behaviour
amongst employees both within and outside the
organization.
To maintain high morale and good human relations
within the organization.
Scope of HRM

1. Personnel or Labour Aspect

Planning, recruiting, selection, placement, transfer, promotion, training
and development, Lay-offs, retrenchment, remuneration, incentives
and productivity

2. Welfare Aspect
Housing, transport, medical assistance, canteen,
rest rooms, health and safety, education, etc.
3. Industrial Relation Aspect
Union-management relations, collective
bargaining, grievance and disciplinary
actions, settlement of disputes.
 Difference between HRM and
PM
HRM is proactive in nature while PM is reactive.
HRM is a resource-centered activity whereas PM is an
employee-centered activity.
HRM emphasizes flexible, open-ended contracts but PM
emphasizes the strict observance of defined rules,
procedures, and contracts.
HRM views better performance as a cause of job
satisfaction whereas PM considers job satisfaction as a
source of better performance….
Functions of human resource
management
Operative functions of HRM
Significance of HRM

Significance for an enterprise

Professional significance
Social significance
National significance
 Significance of HRM
Significance for an enterprise
Attracting & retaining the required human
resource, recruitment & selection , placement ,
orientation, compensation & promotion
policies.
Developing the skills & necessary attitude
among the employees by T&D & performance
evaluation
Providing them social & job security by
grievance handling, motivating & participation
in mgt
Utilizing effectively the available human
resources
Ensuring that the enterprise will have in
future a team of competent & dedicated
employees.
 Significance of HRM
Professional significance

 Providing maximum
opportunities for personal
development of each employee.
Maintaining healthy relationships
among individual & different work
groups.
Allocating work properly.
 Significance of HRM
Social Significance

Sound human resources management has a

great significant for the society. It help to enhance
the dignity of labour in the following ways.
Providing suitable employment that provides
social & psychological satisfaction to people.
Maintaining a balance between the job available
& the jobseekers in terms of numbers,
Qualification, needs & aptitudes.
Eliminating waste of human resource through
conservation of physical & metal health
Significance of HRM

National Significance

Human resource & their management plays a vital role in the

development of a nation. The effective exploitation & utilisation of a
nation’s natural, physical & financial resources require an efficient &
committed manpower.
There are wide differences in development between countries are
with similar resources due to differences in the quality of their people.
Countries are underdeveloped because their people are backward.
The level of development in a country depends primarily on the skills ,
attitudes & values of its human resources. effective management of
human resources helps to speed up the process of economic growth
which in turn leads to higher standards of living & fuller employment
Human resource Management is the central subsystem of an
organisation.
Evolution of HRM

1. The Industrial Revolution(beyond 1820 to 1840)

2. Trade unionism(1841 to 1909)
3. Scientific Management (1910 evolve & 1920
implementation to 1940)
4. Industrial Psychology (1945 to 1970)
5. Human Relation Movement Era( 1971 to 1980)
6. Behavioural Science (1980 to 1990)
7. The Contemporary HRM Era (1990 onwards)
The Industrial Revolution(beyond 1820 to 1840)

• Usages of the machinery

• Mass level of production
• To satisfied the human need
• Profit maximization form the factor of production like
land , labour, capital, entrepreneur
Trade unionism(1841 to 1909)
•
World have been separated in two type of
economy one is capitalization which has a
motive of profit maximization other other
side labour intensive economy
Labour class reflected their provouge by
strike, slowdown, pen down, boycott &
sabotage of the work for resolution of the
problem where new redressal procedure
had been developed to subside the chaos
like collective bargaining, grievance
handling system, arbitration, disciplinary
practices
Scientific Management (1910 evolve & 1920
implementation to 1940)
• Development of true science • Draw back
• Scientific selection & training
• Man become machine
• Friendly co-operation
between management human factors were
• Development of every completely avoided.
worker to his fullest aspects.
Industrial psychology era (1945
to 1970)
Mainly focused on the part on IQ of the employees through
MMPIT(Minnesotta multiple personality test )or MBTI( Myer
Brigg Jung topology) & assigned them skill & aptitude based
job.
Human relation movement (
1971 to 1980)
Hawthorne experiment
Interaction with the employee increase the productivity
Basic facilities are required for the production
Empathized view towards workes have increased
productivity of worker
Social and Psychological factors play an important role.
Behavioural Science era (1980
to 1990)
Multiple branch discipline like
sociology , anthropology, psychology,
economics & politics
Contributors:- Abraham Maslow,
Douglas mc gregeor, Fredrik Herzberg,
Rensis Likert, Robert black, Robert
Owen, kurt lewin, burke letwin, fidler
contingent theory, victor vroom theory,
grid theory, Aldofer ERG theory, Mclland
N-ach theory
The Contemporary HRM era
(1990 onwards)
More focused on gaining competitive advantage in market
through HR.
Focuses on developing HR strategies, aligning them with
corporate strategy and achieving organizational goals
effectively.
 The Meaning of “Strategy”
A critical factor that affects Firm Performance
A factor that contributes to Competitive Advantage in markets
Having a long-term focus
Plans that involve the top executives and/or board of directors of
the firm
A general framework that provides a perspective for selecting
specific policies and procedures
What is Strategic Management?
Strategic Management is a process for analyzing a company's
competitive situation, developing the company's strategic goals, and
devising a plan of action and allocation of resources that will help a
company achieve its goals.
Strategic HRM
Strategic human resource management can be defined
as the linking of human resources with strategic goals
and objectives in order to improve business
performance and develop organizational culture that
foster innovation, flexibility and competitive advantage.

In an organization shrm means accepting and involving

the hr function as a strategic partner in the formulation
and implementation of the company's strategies through
hr activities such as recruiting, selecting, training and
rewarding personnel.

Strategic human resource management focuses on

human resource programs with long-term objectives.
Instead of focusing on internal human resource issues
1-11

The evolving strategic role of Human Resource

Management

Strategic focus

Strategic partner Change agent

System People

Administrative expert Employee champion

Operational focus

The Strategic Role Of Human Resources Management

The Strategic Management Process includes:

– Determining what needs to be done to achieve corporate

objectives, often over 3 - 5 years

– Examining organization and competitive environment

– Establishing optimal fit between organization and its

environment

– Reviewing and revising strategic plan

Model of Strategic HR Management
SHRM Process
1-13

Traditional HR vs. Strategic HR

Point of distinction Traditional HR Strategic HR
Focus Employee Relations Partnerships with internal and
external customers
Role of HR Transactional change Transformational change leader
follower and respondent and initiator
Initiatives Slow, reactive, fragmented Fast, proactive and integrated
Time horizon Short-term Short, medium and long (as
required)
Control Bureaucratic-roles, policies, Organic-flexible, whatever is
procedures necessary to succeed
Job design Tight division of labour; Broad, flexible, cross-training
independence, teams
specialisation
Key investments Capital, products People, knowledge
Accountability Cost centre Investment centre

The Strategic Role Of Human Resources Management

 Importance of Strategic Human
Resource Management
The primary goal of strategic human resource management is to
solve business objectives or obstacles that may not occur within
the direct purview of HRM.

Cross cultural issues and interaction

Internationalization

Changing ownership due to increased M & A

Rapidly changing business environments

Technological advancements
 Barriers to Strategic Human Resource
Management
 Short term mentality

 Strategic inability

 Lack of appreciation

 Failure understands the role

 Difficulty in quantifying outcomes

 Wrong perception of human assets

 Resistance
LEVELS OF STRATEGY-SRM
 GROWTH LEVEL STRATEGY

A growth strategy is an organization's plan for overcoming

current and future challenges to realize its goals for expansion.
Examples of growth strategy goals include increasing market
share and revenue, acquiring assets, and improving the
organization's products or services.
Four types of Growth Strategy are-
Market Expansion or Development
Product Expansion Strategy
Growth Through Diversification
 BUSINESS LEVEL STRATEGY

Business-level strategy: an integrated and coordinated set of

commitments and actions the firm uses to gain a competitive
advantage by exploiting core competencies in specific product
markets.
Basis of choosing a business level strategy by determining
how well a company can compete –
What customer need will be satisfied?
Who is to be satisfied?
How will the need be satisfied?
 TYPES OF STRATEGIES

Vertical intégration.-Vertical integration allows the firm to

enlarge its scope of operations within the same overall industry.
It takes place when one firm acquires another that is involved
either in an earlier stage of the production process (backward
or upstream) or a later stage of the production process
(forward or downstream).
Diversification-A firm can expand its operations by launching
new products or new lines of business. It can enter new
markets as well.
Divestiture-A divestiture is the partial or full disposal of a
business unit through sale, exchange, closure, or bankruptcy. A
divestiture most commonly results from a management
decision to cease operating a business unit because it is not
part of a company's core competency.
Liquidation-The Liquidation Strategy is the most unpleasant
strategy adopted by the organization that includes selling off
its assets and the final closure or winding up of the business
operations.
 Strategic human resource challenge-CO1
1. Increase the quality of leadership and management

2. Manage the changing business needs for talent and skills

3. Define a forward-looking workforce strategy

4. Foster innovation throughout the organization

5. Use data analytics to improve HR-related decisions

 Types of Strategic Fit
 Vertical Fit- managed by directing human resources toward the
primary initiatives of the organization.

Vertical fit is the main idea of HRS, and is linked to a contingency

based approach and hence creating an overall fit of the various
management strategies (including HRS) in the long term goal.

 Horizontal fit - Horizontal fit is achieved by efficiently allocating

the resources.

The horizontal fit is bothered as to how the processes and

activities planned by the HR department and their management of
the resources available to them, are applied within the organization
and complements the vertical fit.
Qualities of an HR manager

Knowledge
Intelligence
Communication skills
Objectivity and fairness
Leadership and motivational qualities
Emotional maturity and
Empathy
HR Managers Duties
LINE-AND-STAFF AUTHORITY

Authority within a line-and-staff organization can be

differentiated. Three types of authority are present: line,
staff, and functional.
Line authority is the right to carry out assignments and
exact performance from other individuals.
Line authority flows down the chain of command. For
example, line authority gives a production supervisor the
right to direct an employee to operate a particular machine,
and it gives the vice president of finance the right to request
a certain report from a department head. Therefore, line
authority gives an individual a certain degree of power
relating to the performance of an organizational task.
STAFF AUTHORITY

Staff authority is the right to advise or counsel those with

line authority. For example, human resource department
employees help other departments by selecting and
developing a qualified workforce.
A quality control manager aids a production manager by
determining the acceptable quality level of products or
services at a manufacturing company, initiating quality
programs, and carrying out statistical analysis to ensure
compliance with quality standards.
Therefore, staff authority gives staff personnel the right to
offer advice in an effort to improve line operations.
FUNCTIONAL AUTHORITY

Functional authority is referred to as limited line authority. It

gives a staff person power over a particular function, such
as safety or accounting.
Usually, functional authority is given to specific staff
personnel with expertise in a certain area. For example,
members of an accounting department might have
authority to request documents they need to prepare
financial reports, or a human resource manager might have
authority to ensure that all departments are complying with
equal employment opportunity laws.
Functional authority is a special type of authority for staff
personnel, which must be designated by top management.
Changing roles of HR
Changing roles of HR
Managing Challenges Affecting a Human
Resource Manager
The dynamic role of HR in Merger
& Acquisitions

The Human Resource (HR) department plays a pivotal role

in the process of merger and acquisition between two
companies.
HR plays a key role in managing all crises as well as
disputes that may crop up in an organization, as and when
the process of merger and acquisition sets off.
The Human Resource department acts as a trusted adviser
to the employees of an organization along with the
management who intend to enter to an M&A deal.
In fact, the Human Resource team of an organization plays
a dynamic role in leadership during any merger and
acquisition.
Analyzing Organizational
Cultures
• Management trend of the two organizations
• How the employees of two organizations think?
• Growth rate of the merging companies
• Cultural differences between the two organizations
• How the two organizations view each other?
• Selectivity in hiring
• Benefits enjoyed by the employees, such as insurance and perks
• Rates of employee turnover
• Level of estrangement experienced by employees.
• Readiness or attitude of employees to embrace new corporate
culture
 Boosting the Morale of Anxious
Employees
Boosting the confidence of employees
Offering adequate training to managers so that they can
acclimatize themselves to the nature of change and new
organizational culture
Brushing away the fears and doubts of employees, so as to retain
productivity
Ensuring job security

Explaining news roles to each employee

Expounding the hierarchy structure of the organization post-merger

Elucidating how the joint venture will affect each employee in

person
Upholding efficiency by identifying leaders from both
organizations
Enhancing innovation by placing the right employee at the
right position
Complying with labour laws
Supervising personal records
Keeping the communication channel open through constant
communication with the employees and conveying their
concerns to the management.
Providing timely input throughout the M&A process
Conducting orientation programs on welfare schemes,
compensations, benefits, and company policies
Solving Employee Benefits
Issues
The objective of due diligence process in M&A is the
verification of Seller’s financials by the Buyer Company,
along with the confirmation of all deals, customers and
other relevant information.
This is done by the buyer to assess if the M&A deal make
any financial or strategic sense. HR department of the
buyer company particularly evaluates the benefit structure
of the seller company to discover the likelihood of any
imminent problem such as inadequate funds for pension
plan or continuation of any medical insurance plan that may
cost an arm and a leg to the organization in the long run.
HR Plays a Substantial Role in
Merger & Acquisitions

Before the merger or acquisition takes place, the HR

managers of both the firms should advise the management
to map out a roadmap in advance so that the merging
companies can stick to it as soon as the M&A procedure
gets going.
The strategy should stress on the organizational
communication structure, layoffs (if any), and
amalgamation of corporate cultures. This initiative by HR
leaders helps the management to conform to a specific set
of objectives, thus driving away all misunderstandings and
differences that may come up in the future.
How technology has changed human resource
management

• Smart recruitment is one of the changes in HR due to

technology
• Better performance management is technology influence
on human resource
• Better diversity and inclusion is a change due to technology
in HR
• HR has become more strategic due to HR Technology
• Better Communication and Collaboration is an impact of
technology in HR
MODELS OF HRM
THE HARVARD MODEL
THE WARWICK MODEL
THE 5 P’s MODEL
3-8

Total Quality Management Programmes

TQM is a way of creating an organisational

culture committed to the continuous
improvement of skills, teamwork,
processes, product and service quality and
customer satisfaction.

Eg: Bharat Heavy Electricals Ltd First to get ISO 9001

certification
TQM CYCLE
3-9

TQM: The main ideas

 Do it right the first time

 Be customer oriented
 Make continuous improvement a way of life
 Build teamwork
 Empower people
 Create a climate of trust, an atmosphere for
innovation
ROLE OF HRM FOR TQM
THANK YOU