SHRM refers to the human resource mgmt.

in a proac ve manner, and describes the organisa onal objec ves and strategies in
order to make effec ve u lisa on of human resources for a aining the business goals. It integrates strategic aims of the
organisa on with the human resources, for increasing business profits and building up an organisa onal culture, which
promotes crea vity, adaptability, and compe ve advantage. SHRM can be also defined as a planned sequence of human
resource opera ons and ac vi es designed to a ain organisa onal objec ves.
Scope of SHRM : 1 Aligning HR and Business Goals 2 Talent Acquisi on and Management 3 Organiza onal Development and
Culture 4. Workforce Planning and Analy cs 5. Performance Management 6. Learning and Development 7. Diversity, Equity, and
Inclusion (DEI) 8. Compensa on and Benefits Strategy 9. Employee Engagement and Well-being 10. Legal and Ethical Compliance
11. Global HR Management 12. Innova on and Technology Integra on
Features of SHRM : 1) Long-Term Focus 2) Associated with Goal-Se ng 3) Inter-related with Business Strategies 4) Fosters
Corporate Excellence Skills 5) Data-driven Decision Making Components of SHRM :1) Human Resources 2) Ac vi es 3)
Purposeful 4) Pa ern and Plan Objec ves of SHRM : 1) To Develop Strategic Competencies 2) To Give Sense of Direc on
3) To Achieve Integra on 4) To Formulate Business Strategy 5) Enhance organiza onal performance 6) A ract and retain top
talent 7) Improve Decision making through HR Analy cs Challenges/Barriers to Strategic HR : 1) Absence of Long-
Term Orienta on 2) Lack of Strategic Reasoning 3) Lack of Adequate Support from Top Management: 4) Resistance from Labour
Unions 5) Fear of Failure 6) Rigidity of HR Prac ces 7) Fear of A ri on 8) Absence of Measurement Techniques Overcoming
Barriers of SHRM : 1) Perform a Thorough Ini al Analysis ) Formulate Strategy 3) Gain Support 4) Assess Barriers 5) Manage
Change 6) Set-up Ac on Plans 7) Implementa on and Management of Project 8) Follow-up and Evaluate Importance of
SHRM : 1) Helps in Achieving Cost-Effec ve Engagement of Labour 2) Enables to Meet Changing Needs 3) Helps in Exploita on
of Emerging Opportuni es 4) Provides Clear-Cut Goals, Direc on, and Future Focus 5) Helps the Organisa on in Planning and
Execu ng Organisa onal Changes 6) Ensures Op mum U lisa on of Organisa onal Resources 7) Develops, Manages, and
Sustains Skills and Knowledge 8) Enhances Coordina on 9) Develops Base for Measurement 10) Helps to Mo vate Employees
Evolu on/Development of SHRM - 1. Transi on to Strategic HRM (1980s–1990s) - Focus: Aligning HR ac vi es with
organiza onal strategy. Features: i.HR started focusing on long-term organiza onal goals. ii. Development of leadership
programs and talent pipelines. iii. Introduc on of workforce planning and competency models. iv. Use of technology in HR
processes (e.g., HR Informa on Systems). Drivers of Development: i. Globaliza on and the need for a compe ve workforce.
ii. Transi on from industrial to knowledge economies. iii. Increasing focus on innova on and adaptability. 2. Maturity of
SHRM (2000s–Present) : Focus: People as a strategic asset and driver of organiza onal success. Features: i. Proac ve and data-
driven HR strategies. ii. Integra on of HR with business strategy through leadership involvement. iii.Emphasis on employee
engagement, well-being, and inclusion. iv. Use of advanced tools like AI, analy cs, and automa on in decision-making. v.
Workforce agility to adapt to market and technological changes. Drivers of Development: i. Rapid technological advancements.
ii. Shi s toward remote work and hybrid models. iii. Greater emphasis on sustainability and corporate social responsibility.

Aspect Traditional HRM Strategic HRM (SHRM)

Operational and administrative tasks (e.g., payroll,
1. Focus Aligning HR with long-term organizational strategy.
compliance).
A support function with limited involvement in business
2. Role of HR A strategic partner in achieving organizational goals.
planning.
3. Time Horizon Short-term and reactive in nature. Long-term and proactive planning for the future.
4. Approach Transactional and task-oriented. Transformational and strategic.
Employees seen as assets and a source of competitive
5. Workforce Perspective Employees seen as tools or resources to complete tasks.
advantage.
6. Decision-Making Based on traditional practices and immediate needs. Data-driven, analytics-based decision-making.
7. Integration HR functions operate in isolation from business strategy. HR functions are integrated with organizational goals.
Talent management, workforce planning, leadership
8. Key Focus Areas Recruitment, payroll, employee relations, compliance.
development.
9. Metrics of Success Compliance with regulations and administrative Contribution to organizational performance and agility.
10. Training & Focus on continuous learning, innovation, and future
Focus on skill development for current roles.
Development needs.
11. Technology Use Limited use of technology (basic HR systems). Heavy use of analytics, AI, and HR tech platforms.
12. Adaptability Rigid and resistant to change. Flexible and adaptable to market and organizational

Investment perspec ve of Human Resource Management (HRM) : The investment perspec ve of Human Resource
Management (HRM) views employees as assets that require strategic investment to maximize their poten al and contribu ons
to organiza onal success. This perspec ve shi s the focus from trea ng employees as mere costs to recognizing them as key
drivers of compe ve advantage and long-term organiza onal growth.
Aspects of Investment in Human Resource: A. Human Resource Investment Considera on : 1) Management Values 2)
Ability of Risk Taking 3) Nature of Skills 4) U litarianism 5) Availability of Outsourcing B. Investment in Training and
Development: Inves ng in training and development (T&D) is a strategic ini a ve to enhance employee skills, knowledge, and
capabili es, ensuring they align with organiza onal goals and adapt to evolving industry demands. Such investments yield long-
term benefits in terms of produc vity, innova on, employee engagement, and overall organiza onal : performance. 1.
Onboarding Programs2. Technical Training 3. So Skills Training 4. Leadership Development 5. Compliance and Safety Training
6. Reskilling and Upskilling 7. E-Learning and Digital Training 8. Employee Development Plans C. Investment Prac ces for
Improved Reten on : 1) Organisa onal Cultures Emphasising Interpersonal Rela onship Values 2) Effec ve Selec on Procedure
3) Compensa on and Benefits 4) Job Enrichment and Job Sa sfac on 5) Prac ces Providing Work Life Balance: 6) Organisa onal
Direc on Crea ng Confidence in the Future 7) Reten on of Technical Employees 8) Other Prac ces in Facilita ng Reten on D.
Investment in Job Secure Workforces : 1) Recogni on of the Cost of Downsizing and Layoffs 2) Alterna ves to Layoffs 3)
Employment Guarantee 4) Work Effort and Job Security Rela onship E. Non-Tradi onal Investment Approaches : 1) Investment
in Disabled Employees 2) Investment in Employees Health 3) Flexible work model
SHRM APPROACHES: INDIAN CONTEXT : 1. Integrated systems model (Rao and Pareek) 2. HRD Framework (Athreya) 3. HRD
as an approach (Dayal) : 1. Talent Acquisi on and Reten on: I Focus on Local Talent Pools ii. Reten on through Career
Development 2. Employee Engagement and Mo va on : i. Work-Life Balance Ini a ves ii. Recogni on and Rewards 3.
Diversity and Inclusion : i. Promo ng Gender Diversity ii. Cultural Diversity and Inclusion 4. Learning and Development
(L&D) : i. Skill Development for Growth ii. Use of Technology in Learning 5. Performance Management : i. Goal-Oriented and
Appraisal Systems ii. Employee Development Focused 6. Compensa on and Benefits : i. Compe ve Salary Structures ii.
Benefits Tailored to Local Needs 7. Employee Well-being : i. Focus on Mental Health and Wellness ii. Health and Safety
Ini a ves 8. Labor Law Compliance 9. Technology-Driven HR Prac ces : i.HR Tech Adop on: ii. Data Analy cs for Decision
Making 10. Global HR Integra on

U – 2 HUMAN RESOURCE EVALUATION

HR evalua on is the process of assessing the value of people to an organisa on. It involves measuring the produc vity
(performance) and promotability of people. HRM evalua on assumes significance because of the intensive emphasis on cost
control, need for efficient alloca on of resources, contribu on to the bo om line, and capability of HR to provide a compe ve
advantage to the firm. "HRM evalua on is defined as the procedures and processes that measure, evaluate and communicate
the value added of HRM prac ces to the organisa on".
Purposes of HR Evalua on : 1) To determine whether a Programme is accomplishing its Objec ves 2) To Iden fy the Strengths
and Weaknesses of HR Processes 3) To Calculate the Return on Investment in an HR Programme 4) To Gather Data to Assist in
Marke ng Future Programmes 5) To Determine if the Programme was Appropriate 6) To Establish a Database those can Assist
Management in Making Decisions Benefits of HR Evalua on : 1) Evalua on makes Good Economic Sense 2) Evalua on
Shows Proof of Results 3) Results from Evalua on Encourage the HR Staff to Focus on Important Ac vi es 4) Data Collected for
Evalua on Isolate the Causes of Problems 5) Results from Measurement and Evalua on can Lead to Addi onal Resources 6)
Evalua on Increases Personal Sa sfac on and Posi on Obstacles in HR Evalua on : 1) Evalua on Cost 2) Lack of Top
Management Commitment 3) Lack of Evalua on Knowledge 4) A en on to Evalua on in Programme Design 5) Fear of
Evalua on 6) Lack of Standards
Linkages Performance between HRM and Firm : 1. Strategic Alignment 2. Talent Acquisi on and Reten on 3. Skill
Development and Training 4. Employee Engagement and Mo va on 5. Organiza onal Culture 6. Performance Management 7.
Employee Well-being Theore cal Frameworks Suppor ng the Linkage : 1. Resource-Based View (RBV):
Emphasizes human capital as a key resource that can provide a sustainable compe ve advantage. Effec ve HRM prac ces
enhance the value, rarity, inimitability, and organiza on (VRIO) of human resources. 2. High-Performance Work Systems
(HPWS):A bundle of HR prac ces (e.g., selec ve hiring, training, performance-based rewards) that create synergis c effects,
boos ng produc vity and innova on 3. AMO Model (Ability, Mo va on, Opportunity): Suggests HRM improves firm
performance by enhancing employees' abili es, mo va on, and opportuni es to contribute.
Aspects of HR Evalua on : 1 Scope 2 Strategic Impact 3 Level of Analysis 4 Criteria 5 Level of Cons tuents 6 Ethical Dimensions
Ra onal Approaches to Evalua on of HR : 1) Audit Approach: Audit approach is also known as stakeholder approach. HR
audit is also a systema c formal process, which is designed to examine the strategies policies, procedures, documenta on,
structure, systems and prac ces, with respect to the organisa on's human resource management. It systema cally and
scien fically assesses the strengths, limita ons, and developmental needs of the exis ng HR, from the larger point of view of
enhancing organisa onal performance. 2) Analy cal Approach: analy cal approach relies on cost-benefit analysis, also called
the u lity approach. u lity approach translates quan ta ve measures of HR effec veness into financial indices. This approach
is also called HR financial valua on since it involves a cost benefit analysis and determines the financial u lity of HR services. 3)
Quan ta ve and Qualita ve Measures: A number of quan ta ve and qualita ve measures can be constructed to measure the
effec veness of a company's human resources or the human resource func on 4) Outcome and Process Criteria 5) Balanced
Scorecard: Robert S. Kaplan and David P. Norton have developed a set of measures that they refer to as "a balanced scorecard."
These measures give top managers a fast but comprehensive view of the organisa on's performance and include both process
and results measures. It a empts to measure and provide feedback to organisa ons in order to assist in implemen ng strategies
and objec ves. 6) Benchmarking: Benchmarking involves employees learning and adop ng the so-called "best prac ces" by
comparing their HRM prac ces with those of other (more successful) organisa ons. Benchmarking essen ally involves that
employees study the prac ces followed in compe ng firms and evalua ng own prac ces with those thus collected.
Myths Related to HR Evalua on : 1) Evalua on should not be Undertaken if the HR Staff is not Mo vated to Pursue it 2)
Evalua on is Difficult 3) Least Important HR Ac vi es are Measurable, while the Most Important HR Ac vi es are not 4)
Evalua on is Needed to Jus fy HR Department's Existence 5) There is No Time for Evalua on 6) Evalua on is too Expensive 7)
If Top Management does not require it, Evalua on should not be Pursued 8) Unless a Return on Investment (ROI) is Calculated,
Evalua on will be Useless 9) There are many Variables Affec ng HR Programme Performance to Measure and Evaluate Func on

HR Bundles Approach
The HR Bundles Approach is a strategic method in Human Resource Management that focuses on implemen ng interconnected
sets or "bundles" of HR prac ces rather than isolated individual prac ces. This approach emphasizes the synergy created when
complementary HR prac ces are grouped, leading to improved organiza onal performance.
Core Concepts of HR Bundles Approach : 1. Interdependence of Prac ces: HR prac ces are designed to complement and
reinforce each other.Example: Recruitment, training, and performance management working together to enhance employee
capabili es and mo va on. 2. Systemic Impact: The collec ve effect of HR bundles is greater than the sum of individual
prac ces. Example: A bundle focused on employee engagement might include prac ces like flexible working hours, recogni on
programs, and professional development opportuni es. 3. Customiza on : HR bundles are tailored to align with specific
business strategies and organiza onal needs. Example: A high-performance work system (HPWS) bundle for innova on-focused
firms. Example of HR Bundles : 1. High-Performance Work Systems (HPWS) : Bundles designed to maximize employee
performance and organiza onal outcomes. Includes selec ve hiring, extensive training, performance-based rewards, and
par cipatory decision-making. 2. Commitment-Oriented HR Bundles: Focus on building employee loyalty and organiza onal
commitment. Includes career development, internal promo ons, and long-term incen ves. 3. Flexibility-Oriented HR Bundles :
Designed to promote adaptability in dynamic environments. Includes flexible work arrangements, cross-training, and mul -
skilling. 4. Cost-Reduc on HR Bundles : Aimed at improving efficiency and reducing opera onal costs.Includes lean staffing,
standardized processes, and automated HR systems.
Advantages of the HR Bundles Approach : 1. Enhanced Synergy 2. Alignment with Business Strategy 3. Improved Employee
Outcomes 4. Organiza onal Performance Challenges of the HR Bundles Approach : 1. Complexity in Implementa on 2.
Context Dependency 3. Measurement Issues drawbacks of HR bundles approach : 1) Difficulty in Combining Different
Prac ces 2) Complexity in Achieving Internal Fit

Best Prac ce Approach

The Best Prac ce Approach in Human Resource Management (HRM) is a universalis c model that suggests there are certain HR
prac ces that, when implemented effec vely, lead to superior organiza onal performance regardless of the industry, context,
or strategy. This approach is based on the idea that some HR prac ces are universally beneficial and can op mize employee
performance, engagement, and reten on. Features of the Best Prac ce Approach : 1. Universal Applicability 2. Focus on
High-Performance HR Prac ces 3. Employee-Centric Approach HR Prac ces in the Best Prac ce Approach : 1. Selec ve
Hiring 2. Comprehensive Training and Development 3. Performance-Based Rewards 4. Employee Involvement 5. Job Security 6.
Fair and Transparent Appraisal Systems 7. Work-Life Balance Ini a ves Advantages: 1. Proven Effec veness 2. Simplicity 3.
Employee Engagement 4. Improved Organiza onal Performance Cri cisms : 1. Lack of Contextualiza on 2. Overemphasis on
Universality 3. Implementa on Challenges 4. Poten al Misalignment
HRM PRACTICES
ac vi es of organisa on which are concentrated on the management of the associa on of HR and confirming the deployment
of organisa onal resources in the direc on of achievement of the organisa onal objec ves is known as HRM prac ces.
Factors Affec ng HRM Prac ces : 1) External Factors: i) Economic Changes ii) Technological Changes iii) Na onal Culture iv)
Industry/Sector Characteris cs v) Legisla ons/Regula ons vi) Ac ons of Compe tors 2) Internal Factors: i) Organisa onal Size
ii) Organisa onal Structure iii) Business Strategy iv) Human Resource Strategy v) Top Management vi) Line Management vii)
Power and Poli cs viii) Professional and Academic Influence Importance of HRM Prac ces : 1) A ain Compe ve Edge
2) Improving Employee-Employer Rela onship 3) Develop Organisa onal Trust 4) Effec ve U lisa on of Employees 5) Enhance
Service Quality 6) Employees Produc vity 7) Decrease Turnover Rate
Dis nc ve HR Prac ces : Dis nc ve HR prac ces refer to unique and innova ve human resource management prac ces that
set an organiza on apart from its compe tors. These prac ces are tailored to the organiza on's strategy, culture, and goals, and
are designed to create a sustainable compe ve advantage by enhancing employee engagement, produc vity, and reten on.
Examples of Dis nc ve HR Prac ces : 1. Recruitment, Training and Development 2. Induc on 3. Reten on Strategy 4.
Leadership 5. Outsourcing : term outsourcing means using a vendor company to perform IT, Business Process Outsourcing (BPO),
and Knowledge Process Outsourcing (KPO) related ac vi es. While much of the focus in the past has been on outsourcing call
center and IT support func ons, processes can range in complexity from simple financial services transac ons to high end
market research and analy cal func ons. 6. Offshoring : Offshoring is when companies set up a wholly owned "cap ve site an
perform business processes. The mo va on to offshore rather than outsource may be based on limita ons on the types of
func ons that can be legally or contractually conducted by vendor companies (especially prevalent in the financial services and
insurance industries), lack of realiza on of expected cost savings, or a desire to directly manage employees and the processes
without going through a vendor company project management structure.
Benefits of Dis nc ve HR Prac ces : 1. Talent A rac on and Reten on 2. Increased Employee Engagement 3. Sustainable
Compe ve Advantage 4. Stronger Organiza onal Culture 5. Enhanced Performance Challenges in Implemen ng
Dis nc ve HR Prac ces : 1. Cost and Resource Intensity 2. Scalability Issues 3. Resistance to Change 4. Risk of Imita on
HUMAN RESOURCE PLANNING (HRP
HR planning or manpower planning can be defined as a process of balancing the people's supply including the present and
prospective employees with the potential job openings in the org. in a given period of time. It is the system of the org. to ensure
the availability of right number of people, right type of people, at right time and right place to attain the org.al objectives.
Manpower planning is also known as personal planning or workforce planning. "Humanresource planning is the process of
analysing an org.'s human resource needs under changing conditions and developing activitiesnecessary to satisfy those needs"
Features of HRP : 1) Continuous Activity 2) Clearly Specified Objectives 3) Assessing the Staff Requirements 4) Maintaining
Inventory of Existing Human Resources 5) Balancing Supply and Demand Equation Developing 6) Positive Work Environment 7)
Formulation of Policies Need of HRP: 1) Balancing Employment-Unemployment Situation 2) Technological Upgradations 3)
Changes in Org.al Environment, 4) Diverse Workforce 5) Skill Shortages 6) Government Interference 7) Judicial Regulations 8)
Justified Recruitment 9) Systematic Concept 10) Lead Time Scope of HRP : 1) Projecting Future Human Resource Requirements
2) Maintaining Current Manpower Inventory 3) Predicting Human Resources Issues4) Fulfilling Manpower Need Objectives
of HRP : 1) Assessing Manpower Requirements 2) Evaluation of Current Workforce 3) Efficient Change Management 4)
Achieving Org.al Objectives 5) Furnishing the Accurate Details 6) Optimum Utilisation of Human Resources 7) Analysing
Manpower Gap Factors Affecting HRP : 1) External Factors : i) Legislative Provisions ii) Level of Economic Development iii)
Business Environment iv) Technological Advancements v) Global Influences 2) Internal Factors: i) Firm's Plans and Guidelines ii)
Rules andRegulations for Human Resources iii) Job Analysis iv) Timeframe of planning v) Reliability and Credibility of Information
vi) Policies regarding the Operational and Production System of Firm vii) Trade Unions viii) Phases of Org.al Lifecycle
Process of HRP: Step 1: environmental Scanning :HRP requires scanning of all the factors exis ng in the internal ( technology,
culture, strategy, etc.) as well as external factor( compe tors, regula on etc,) of the firm. Step 2 : Analysing org.al Objec ves
and Policies Step 3 : Demand Forecas ng Step 4 - Supply Forecas ng : next step is to es mate the supply of
manpower andsources for procuring such human resources in the org.. This informa on is collected through supply forecas ng.

Sources of Supply : 1) Internal Supply: It comprises of the existing staff within the org.. It is the major source of employment
for an org.. i) Staffing Tables/Manning Charts: It is basically a pictorial representation of the jobs within the org. which depicts
that how many employees are presently working on those jobs and how many will be required in future. ii) Markov Analysis: It
displays the percentage of the number of employees within the org. in a particular along with details of the employee who are
being promoted or being transfered . iii) Skill Inventories: database is maintained which consists of record of knowledge ,abilities,
experience , skills of employee .using these vacancies are filled iv) Replacement & Succession Planning 2) External Supply:
external sources include the potential human resources existing outside the org.. i) Campus recruitment ii)consultants.
Essentials for Effective HRP : 1) Alignment with Org. Objectives 2) Support of Top Management 3) Suitable Time Period 4) Skill
Inventory 5) HR Information System (HRIS 6) Proper Arrangement and Coordination Importance of HRP : 1) Provide good
employee 2) Allows Easy Expansion and Diversification 3) Helps in Budget Formulation 4) Reduces Uncertainties and Change 5)
Controls Labour Imbalance 6) Helps in Training and Development of Employees Limitations of HRP : 1) Inaccuracyof Forecasts 2
Identity Crisis 3) Requires Active Involvement of Top Mgmt 4) Employee Resistance 5) Technical Issues 6 Weak Info. System 7
Uncertainties 8 Costly and Lengthy Activity 9 Improper Coordination with Other Executive Functions 10 Loss of Balanced Focus
 Business Strategy and HRP
The rela onship between business strategy and human resource planning (HRP) is integral, as HRP ensures that an organiza on
has the right people, with the right skills, in the right roles, at the right me to execute its business strategy effec vely.
Link Between Business Strategy and HRP - 1. Alignment with Organiza onal Goals : HRP ensures the workforce aligns with
the overall business strategy. Example: A firm pursuing a differen a on strategy needs HRP to focus on recrui ng crea ve,
innova ve talent. 2. Workforce Planning : Business strategies define the type and number of employees required. Example:
Cost leadership strategies may priori ze automa on and a lean workforce, whereas differen a on may require highly skilled
and diverse employees. 3. Skill Development and Training : HRP iden fies the skills needed to support strategic goals and
organizes training accordingly. Example: A company transi oning to digital opera ons will priori ze reskilling employees in
digital technologies. 4. Talent Acquisi on and Reten on : HRP plans recruitment strategies based on business needs.
Example: Niche strategies require a rac ng specialists, while cost leadership focuses on opera onal efficiency. 5.
Performance Management : Business strategy influences KPIs and performance metrics. Example: In a customer-focused
strategy, HRP might emphasize training employees in customer service excellence.
Strategic HRP in Ac on : 1.Cost Leadership Strategy - Focus: Efficiency and cost reduc on. HRP Ac ons: i.Hire employees
with generalist skills for flexible roles. ii. Op mize workforce size through lean staffing. iii.Implement standardized training
programs to minimize costs. 2.Differen a on Strategy - Focus: Innova on and uniqueness. HRP Ac ons: i. A ract top- er
talent with specialized skills. ii. Invest in con nuous learning and development. iii. Create a culture of innova on and crea vity.
3.Focus/Niche Strategy- Focus: Specializa on and market segmenta on. HRP Ac ons: i. Recruit specialists in targeted areas. ii.
Offer customized training to address niche market needs. iii. Develop strong employer branding to a ract targeted talent pools.

U- 3 HR SYSTEMS
Human Resource (HR) systems are the electronic tools used to access HR-related informa on and perform HR-related func ons.
The systems also enable HR staff to execute HR-related ac vi es such as job announcements and personnel ac ons. HR systems
are frameworks comprising processes, policies, and tools designed to manage an organiza on's human resources effec vely.
They include components like recruitment, training, performance management, payroll, and employee engagement.
Steps in Developing HR Systems: 1) Determine the Need 2) Iden fy the HR Network to Meet the Needs 3) Determine Major
Players in the System and their Need for Access to the System 4) Select an HR Consultant to Assist in Designing of So ware and
Hardware Systems 5) Iden fy So ware to Accommodate HR Needs 6) Iden fy Hardware to Capably Manage the So ware
Applica ons 7) Prepare Request for Proposals (RFP 8) Consider Confiden ally Requirements
Components of HR Systems: 1 Staffing system 2. Reward and compensa on system 3. Employee and career development
system 4. Performance management system

STAFFING SYSTEMS
Staffing is that part of the process of management which is concerned with obtaining, u lising, and maintaining a sa sfactory
and sa sfied workforce. It is the process of iden fying, assessing, placing, evalua ng, and developing individuals at work.
Staffing is a very important func on of the management. No organisa on can be successful unless it can fill and keep filled the
various posi ons with the right type of employees. Nature of staffing - 1) Managerial Func on 2) Pervasive Ac vity 3)
Con nuous Ac vity 4) Efficient Management of Personnel 5) Appropriate Selec on and Placement 6) Universal Func on 7)
Dynamic Func on Process of Staffing : Step 1: Manpower Planning 2: Job Analysis 3: Recruitment 4: Selec on 5:
Induc on and Orienta on 6: Training and Development 7: Performance Appraisal 8: Employment Decisions 9: Separa on:
Recognising Staffing Systems that Fit the Firms Business Strategy : 1. Analyze Business Goals: Understand the firm's
priori es, whether it’s cost efficiency, growth, or innova on. 2. Iden fy Skills Needs: Map required competencies and roles to
strategic objec ves. 3. Choose Recruitment Channels: Use the right pla orms to target desired talent pools. 4. Adapt Selec on
Methods: Tailor evalua on processes (tests, interviews) to iden fy strategy-aligned candidates. 5. Ensure Cultural Alignment:
Select candidates who fit the organiza onal culture and values.
Recognising High-Quality Prac ces When Selec ng for Achievement : 1) Work Sample Tests 2) Structured Situa onal
Interviews 3) Managerial Assessment Centres: Recognising High-Quality Prac ces When Selec ng for Poten al : 1)
Cogni ve Ability Tests 2) Educa onal A ainment and Elite College and Universi es
Importance of Staffing : 1) Key to Other Managerial Func ons 2) Building Healthy Human Rela onships 3) Human Resource
Development 4) Long-Term Effect 5) Poten al Contribu on
 REWARD AND COMPENSATION SYSTEMS
Reward system: procedures, rules, and standards associated with alloca on of benefits and compensa on to employees.. An
employee reward system consists of organisa on's integrated policies, processes and prac ces for rewarding its employees in
accordance with their contribu on, skill and competence & their market worth. "A reward can be defined as any posi vely
perceived physical, economic or social consequence". Aim of Reward System: 1A rac on 2Great Performance 3 Commitment
Components of a Reward System : 1) Financial Reward 2) Non-Financial Reward 3) Reward Policies : i) Level of Rewards ii)
External Compe veness versus Internal Equity iii) Assimila on Policies iv) Protec on Policies v) Transparency 4) Psychological
Sa sfac on: This form of reward includes opportuni es to perform meaningful work, social interac ons with others in the
workplace, job training, career advancement opportuni es, recogni on, employer brand, and a host of similar factors 5) Pay
Structures 6 Base Pay 7 Job Evalua on 8 Con ngent Pay 9 Allowances 10) Total Earnings 11 Total Remunera on 12) Total Reward
COMPENSATION : the sum of money that an employer pays to an employee for providing his services to the organisa on.
Compensa on determines the lifestyle of employee in the society, his dedica on towards the organisa on, and his level of
mo va on "Compensa on means all forms of pay of going to employees and arising from their employment".
Compensa on system/Components of Compensa on - 1) Basic Salary: It is the major por on of the employee's
compensa on. Different components of the wages such as bonuses, premiums, allowances, etc. are determined with the help
of basic salary. Seniority and rank are the two factors, which are considered for determining the basic salary. 2) Incen ves:
An incen ve is a very important component of pay structure. It is given in addi on to the regular wages. Incen ves a ract the
employees and mo vate them to perform be er. 3) Bonus: Bonus is the payment which is given to workers as a share of
the organisa on's profits in a par cular year. The profit is expected to be made due to contribu on of employer and hard work
of the workers. 5) Provident Fund: Provident fund is the payment which an employee receives a er his re rement or when
he resigns from the organisa on. Both employee and employer contribute equally in the provident fund. 6) Over me Pay
7) Allowances: Allowances can be defined as the payment given to an employee by an employer in monetary terms : I Dearness
Allowance ii House Rent Allowance (HRA iii Conveyance Allowance. iv Leave Travel Allowance (LTA v Fixed Medical Allowance
Factors Influencing Compensa on : 1) Ra o of Demand and Supply 2) Ability to Bargain 3) Cost of Living 4) Type of Market
5 Compara ve Wages 6 Ability to Pay 7 Labour Efficiency 8) Employment Skills 9 Govt. Regula ons 10 Image of the Organisa on
Importance of Compensa on : 1) Helps in A rac ng High Skilled People 2) Improves Efficiency of Organisa on 3) Acts as a
acquiring good talent. Link between Employer and Employee 5) Mo vates Employees for Be er Performance 6) Encourages
Healthy Compe on and Collabora on 7) Helps to Differen ate between Good and Poor Performers 8) S mulates Employee
Involvement: 9) Strengthens Organisa onal Compe veness 10) Maintains Organisa onal Harmony
Aligning Reward and Strategy with Firm's Business Strategy Compensa on : 1. Understand the Firm's Business Strategy
2. Define the Objec ves of the Reward Strategy 3. Tailor the Components of Compensa on 4. Align with Organiza onal
Culture5. Incorporate Metrics for Performance Alignment 6. Consider Employee Perspec ves 7. Regular Review and Adjustment
Pay Level: Maintaining Compe veness in Compensa on External : 1 Lead Policy: A lead policy maximises the ability to
a ract and retain quality employees and minimises employee dissa sfac on with pay. 2 Meet Policy: This is the most common
compensa on strategy. This level of compe veness occurs when an organisa on's compensa on strategy is equal to the
labour market for the same posi on 3 Lag Policy: A policy of paying below-market rates may hinder a firm's ability to a ract
poten al employees. But if a lagged pay level is coupled with the promise of higher future returns (e.g, stock ownership in a
high-tech start-up firm), this combina on increase employee commitment and foster teamwork, which increase produc vity.
Use of Pay Surveys for Compe ve Market Data: 1. Establishing Compe ve Pay Structures 2. Iden fying Market Trends
3. Suppor ng Pay Equity 4 Informing Budget Planning 5 Enhancing Recruitment Strategies 6. Retaining Top Talent 7 Customizing
Incen ve Plans Sources of Data for Pay Surveys : 1) Published Data 2) Pay Clubs 3) Special Surveys 4)
Consultants' Pay Databases 5) Government Surveys 6) Internet Surveys 7) Professional Organisa on Surveys 8) Employer Group
Surveys 9) Compensa on Consultants Surveys
Employee /fringe Benefits: Employee benefits are also popularly known as fringe benefits. This is a supplemental
compensa on which is paid by an employer to his employee, apart from his direct wages and incen ves. These are granted as
assistance or addi onal facili es to the employees by the employer either: (a) voluntarily or (b) as a legal requirement or (c) as
a part of collec ve nego ated agreement Types of Fringe Benefits : 1) Payment for Time not Worked : i) Paid Holidays ii)
Shi Premium: iii) Holiday Pay: 2) Employee Security: i) Lay-Off Compensa on ii) Retrenchment Compensa on 3) Safety and
Health Provisions 4) Welfare and Recrea onal Facili es : i) Housing ii) Canteen iii) Consumer Socie es iv) Credit Socie es V)
Employee Counselling vi) Legal Assistance vii) Educa onal Facili es viii) Transporta on Facili es: ix) Welfare Sec ons X) Holiday
Homes: xi) Picnics and Par es: 5) Old Age and Re rement Benefits: i) Employees' Provident Funds (EPFs ii) Deposit-Linked
Insurance iii) Gratuity iv) Medical Benefits Importance of Employee Benefits : 1) Financial Security for Workers 2)
Reduc on in A ri on Rate 3) Enhancement of : Produc vity 4) Create Trust and Warmth in Employer-Employee Rela onship
 EMPLOYEE AND DEVELOPMENT SYSTEMS CAREER
Employee and career development systems are structured frameworks organiza ons use to support employee growth and align
individual career goals with organiza onal objec ves. These systems include training programs, mentoring, performance
appraisals, and career planning tools. They aim to enhance skills, increase engagement, and prepare employees for future roles.
Effec ve systems iden fy development needs, provide opportuni es for learning and advancement, and foster a culture of
con nuous improvement.
Training and Development System : A training and development system is a structured approach used by organiza ons to
enhance employees' skills, knowledge, and competencies to meet current and future business needs. It includes iden fying
training needs, designing and delivering programs (e.g., workshops, e-learning, on-the-job training), and evalua ng their
effec veness.
Systema c Approach to Training : A. Training Needs Assessment : 1) Organisa onal Analysis 2) Task Analysis 3) Individual
Analysis B. Training Design and Delivery : 1) Goal Statements 2) Instruc onal Objec ves 3) Instruc onal Strategies 4) Evalua on
Methods 5) Types Materials 6) Media Selec on 7) Design Document C. Training Evalua on :1) Evalua on Criteria 2) Evalua on
Design
Measures for Making Employee Development System Effec ve : 1) Make Sure the Curriculum is Comprehensive and
Relevant to the Employees' Jobs and Career Aspira ons 2) Structure Employee Development System by Using Formal Curriculum
with Course Descrip ons 3) Set-up System to Track Training and Get Feedback
Role of Training in Career Development : 1) Increase Employee Value 2) Reduce A ri on Rates 3) Enhance Opera onal
Efficiency
CAREER DEVELOPMENT SYSTEM - career development system is a formal, organised, planned effort to achieve a balance
between individual career needs and organisa onal workforce requirements. For example, the organisa on has certain needs
for staffing and employees have needs to effec vely u lise their personal skills. Career development systems are based upon
an organisa on's unique core competencies or a developable skill set. Designing Effec ve Career Development Systems
: 1. Define Organiza onal Goals and Needs 2. Assess Employee Needs and Aspira ons 3. Establish a Clear Framework 4. Develop
Programs and Resources 5. Personalize Development Plans 6. Integrate Technology 7. Foster a Culture of Growth 8. Measure
Success Benefits of a Career Development System : Benefits for Employees : 1. Enhanced Skill Development 2. Clear
Career Pathways 3. Increased Job Sa sfac on 4. Higher Earning Poten al 5. Improved Confidence and Mo va on 6. Work-Life
Balance 7. Adaptability to Change Benefits for Organiza ons : 1. Improved Employee Reten on 2. Stronger Talent Pipeline 3.
Increased Produc vity 4. Enhanced Employer Brand 5. Alignment with Business Goals 6. Reduced Recruitment Costs 7.
Encourages Innova on Career Development as Mo va onal Tool for Employee : 1) Evaluates Capabili es Cri cally 2)
Creates a Pool of Talent 3) Talent-reten on 4) Enhances Employee Aspira ons 5) Work Life Balance 6) Meets Legisla ve Criteria
7) Enhances Organisa onal Compe veness 8) Keeps Employees Updated 9) Establishes Goal-Congruence
PERFORMANCE SYSTEMS (PMS) MANAGEMENT
The systema c process which can be employed for the improvement of overall performance of an organisa on by enhancing
individual performance within the framework of a team is called Performance Management (PM). A Performance Management
System (PMS) is a structured approach to managing and improving employee performance. It involves se ng clear goals,
providing regular feedback, assessing progress, and aligning individual performance with organiza onal objec ves. PMS
includes performance appraisals, employee development, and recogni on, aiming to enhance produc vity, employee
engagement, and overall organiza onal success through con nuous performance monitoring and improvement.
Purposes and Uses of PMS : 1) Human Resource Planning (HRP 2) Recruitment and Selec on 3) Personnel Decisions 4)
Training and Development 5) Feedback, Mo va on and Personal Development 6) Career Planning and Development 7)
Compensa on and Reward 8) Internal Employee Rela ons
Components of PMS : 1) Performance Planning 2) Performance Appraisal and Reviewing 3) Performance Feedback and
Counselling 4) Rewarding Good Performance 5) Performance Improvement Plans 6) Poten al Appraisal
Prerequisites for an Effec ve PMS : 1) Achieving the Business Strategy 2) Fulfilling Organisa onal Responsibili es 3) Enabling
Employees to Manage their Own Performance and Development 5) Role of HR Func on 6) Importance of Objec ves 7) Input,
Process, Output, Outcome Model
Aligning Performance Management Systems with Firm's Strategy : 1. Understand the Firm’s Strategy 2. Translate Strategy
into Organiza onal Goals 3. Design the Performance Management System 4. Foster a Culture of Con nuous Feedback 5.
Integrate Learning and Development 6. Leverage Technology 7. Reward and Recognize Aligned Performance 8. Evaluate and
Refine the System
Performance Appraisal as a Tool of Performance Management : Performance appraisal is a tool which is used to evaluate
the employees' performance at the workplace. It generally includes qualita ve and quan ta ve dimensions of employees' job
performance. In this context, performance is defined as the level of work achievement. It generally represents how successfully
an individual sa sfies the job requirements. Performance is constantly evaluated on the basis of outcomes.
Techniques of Performance Appraisal
1) Tradi onal/Past-Oriented Methods of Appraisal: Tradi onal methods of performance appraisal focus on past performance.
They aim at giving feedback to the employees pertaining to their ac vi es which can be u lised for a aining bigger victory in
the near future. Tradi onal appraisal methods : i) Graphic Ra ng Scales (GRS) : Employees are rated on a scale for specific
traits such as teamwork, punctuality, and produc vity. ii) Straight Ranking Method : Employees are ranked in order of their
performance, from highest to lowest iii) Paired Comparison Method: Each employee is compared with every other employee
in pairs, and the be er performer is noted. iv) Cri cal Incident Method: Managers document specific instances of effec ve or
ineffec ve behavior during the appraisal period. v) Group Appraisal Method: vi) Checklist Method: Supervisors check off
predefined performance criteria that an employee meets. vii) Forced Distribu on Method (Forced Ranking Method):
Employees are categorized into predetermined performance levels (e.g., top 10%, middle 70%, bo om 20%).
2) Modern/Future-Oriented Methods of Appraisal: Modern methods of performance appraisal focus on future performance.
These methods evaluate employees' capabili es for achievement and define standards for both short and long-term
performance. : i) Behaviourally Anchored Ra ng Scales (BARS): Combines quan ta ve and qualita ve evalua on by linking
ra ngs to specific behaviors or outcomes. ii) Management by Objec ves (MBO : Employees and managers collabora vely set
measurable goals, and performance is evaluated based on goal achievement. iii) Psychological Appraisals: Focuses on assessing
an employee’s poten al through psychological tests and evalua ons. iv HR Accoun ng: Measures the monetary value of an
employee’s contribu on to the organiza on. v 360-Degree Performance Appraisal: Performance feedback is collected from
mul ple sources, including peers, subordinates, supervisors, and some mes clients. vi Assessment Centres: Employees
par cipate in simula ons, role plays, case studies, and group exercises to evaluate performance in real-world scenarios.
Ra ng Errors in Performance Appraisal : 1) First Impression Error 2) Halo Effect 3) Strictness or Leniency 4) Central Tendency
Bias 5) Recency Bias 6) Stereotyping 7) Contrast Effect 8) Personal Bias 9) Spillover/Past Performance Effect 10) Similar-to-Me
Effect 11) A ribu on Error
Guidelines to Overcome Performance Appraisal Problems : 1) Know the Problem 2) Use the Right Appraisal Tool 3) Keep
a Diary 4) Get Agreement on a Plan 5) Develop Clear Policies 6) Improve Rater's Skills 7) Be Fair 8) Refinements in the Design of
Appraisal Methods Contribu on of Performance Appraisal in Organisa onal Growth : 1) Improving Communica on 2)
Encouraging Good Work and Improvement 3) Improving Decision-Making Ability 4) Elimina ng Informa onal Inaccuracies 5)
helps to compare 6) Providing Assistance to Organisa on Advantages of PMS : 1) Enables Goal Alignment 2) Facilitates
Employee Development Plan 3) Creates Consistency in Performance Guidelines 4) Generates Data and Informa on for Be er
Results 5) Fosters Proac ve Communica on 6) Retains Talent Disadvantages of PMS : 1) Risk of Internal Compe on 2)
Favouri sm 3) Expensive and Time-Consuming 4) Manager's Dilemma 5) convoluted and bureaucracy

U- 4 STRATEGIC OPTIONS AND HR DECISIONS

Strategic op ons are defined as key decisions or choices between alterna ve courses of ac on that are irreversible in the short-
run and have important implica ons for the compe veness of the enterprise. The process of developing HR strategies involves
genera ng strategic HRM op ons and then making appropriate HR decisions. "The choice of prac ces that an employer pursues
is heavily con ngent on a number of factors at the organisa onal level, including their own business and produc on strategies,
support of HR policies, and co-opera ve labour rela ons".
Strategic Op ons and HR Decisions : 1.Downsizing and Re-Structuring 2.Labour Market 3.Mergers and Acquisi ons
4.Outsourcing 5.Offshoring
 1. DOWNSIZING AND RESTRUCTURING
Downsizing/rightsizing theore cally means reducing the size of workforce or increasing it to maintain the employee strength at
the most desired level. It is also known as re-structuring. In the context of human resource management, downsizing involves
elimina on of certain jobs with a view to improve work efficiency. "Downsizing is referred to as a mgmt. ac on taken to
dras cally reduce the size of a company's workforce, which usually takes the form of massive layoff".
Characteris cs of Downsizing : 1) Intent: 2) Personnel 3) Efficiency 4) Work Processes: Reasons for Downsizing : 1)
Employee Surplus 2) Technological Upgrada ons 3) Cost Saving: 4) Outsourcing Types of Downsizing Strategies : 1)
Workforce Reduc on 2) Work Re-Design 3) Systemic Approach Benefits of Downsizing : 1) Cost Reduc on 2) Improvement
in Management 3) Speedy Decision-Making 4) Improved Customer Service 5) Less Bureaucracy 6) Increased Profitability
Consequences of Downsizing : 1) Lower Morale 2) Emo onal Effects 3) Fall in Value of Firm's Share 4) Rise in Cost:
Precau ons to be Taken While Downsizing : 1) Proper Workforce Analysis 2) Understanding Business Objec ves 3) Strategy
Development 4) Ac on Planning 5) Implementa on and Review
2. LABOUR MARKETS
The labor market refers to the supply and demand for labor, where workers offer their skills and services, and employers seek
to hire individuals to fulfill job roles. It involves various factors, including wages, employment rates, job vacancies, and the
availability of skills in the workforce. The labor market can be influenced by economic condi ons, educa on levels, government
policies, and demographic trends, shaping how labor is allocated across industries and regions.
Characteris cs of Labour Market : 1) Mul plicity of Markets 2) No Central Clearing House Exists 3) Workers are not
Standardised 4) Temporary Nature of the Employment Rela onship 5) Complexity of the Employment Package
Components of Labour Market : 1) Popula on of Labour Force 2) Applicant Popula on 3) Applicant 4) Demand and supply
of labour 5) Wages 6) Skill and educa on
Types of Labour Markets - 1. Geographic Labour : A geographic labor market refers to the labor market that exists within a
specific geographical area or region. It is shaped by factors such as local demand for labor, popula on size, industry presence,
and regional economic condi ons. 2. Global Labour Markets : refers to the interconnected job markets across the world, driven
by globaliza on. It allows for workers to seek employment opportuni es beyond their home countries, and employers to hire
talent from anywhere in the world. 3. Industry and Occupa onal Labour Markets : industrial labor market classifies workers
according to the industry they work in. Industries can include sectors such as manufacturing, healthcare, finance, educa on,
construc on, agriculture, and technology. occupa onal labor market refers to the labor market segmented by occupa ons or
the types of tasks and responsibili es that workers perform, regardless of the industry in which they are employed. This market
focuses on the specific skills, qualifica ons, and job func ons. 4. Educa onal and Technical Labour Markets : educa onal
labor market refers to the sector of the labor market that is centered around jobs that require specific educa onal qualifica ons..
technical labor market focuses on jobs that require technical skills or voca onal training. It is primarily concerned with workers
who have specialized knowledge or competencies related to a par cular trade, cra , or technical field.
3. OUTSOURCING HR FUNCTIONS
When a certain company is approached for getting a certain work or activity done, it is regarded as outsourcing. outsourcing
isimplemented by almost every org.. The core activities are not outsourced by the organizations. For example, some of the
operations of a telecom company which are not connected insurance or have strategic significance to the business can be
outsourced to specialised org.Service providers or third party providers are the common names used for the first providing
thefacility of outsourcing.
Reasons for Inves ng in Outsourcing HR Func ons : 1) Improved Profit and Produc vity 2) Controlling Labour Costs 3)
Limited Risks and Liabili es 4) Get "Big" Company Benefits Stages of Outsourcing HR Func ons : 1) Planning for
Outsourcing 2 Determina on of Contract 3) Analysis 4) Selec on 5) Nego a on 6) Transi on of Resources 7) Managing the
Rela onships Basic HR Func ons Outsourced :1) Employee Assistance or counseling Programmes 2) Drug Tes ng 3)
Background Checks 4) Payroll 5) Benefits Administra on 6) Recruitment 7) Compensa on Consul ng 8) Employee Re-Loca on
9) Exit Interviews Advantages of Outsourcing HR Func ons : 1) Facilitates Be er Manpower 2) Boosts Employee Morale 3)
Minimises Risk 4) Cost Savings Disadvantages of Outsourcing HR Func ons : 1) Loss of Control 2) Loss of Opportunity to
acquire Knowledge 3) Threat to Confiden ality 4) Affects Company Goodwill Challenges in HR Outsourcing : 1) Managing
Rela onship 2) Managing Process 3) Self-Iden ty 4) Vendor Selec on 5) Change Management 6) Structuring of Contract
4. OFFSHORING
Offshoring simply means having the outsourced business func ons done in another country. Offshoring is the prac ce of
reloca ng a company’s business processes or opera ons to a foreign country to reduce costs or access specialized skills.
Companies o en offshore manufacturing, customer support, or IT services to take advantage of lower labor costs, favorable
regula ons, or proximity to emerging markets.
Characteris cs of Offshoring : 1) It includes both manufacturing and service jobs outsourced overseas 2) It includes transfer
of jobs by companies to their own overseas affiliates managed by their own staff. 3) It includes offshore work offered to joint
ventures, where the company owns an affiliate in partnership with a local vendor.
Types of Offshoring : 1) Onshoring: When the service provider is also located within the same country, then it is called
onshoring. A good example is if a German company shi s his produc on process to the Eastern part of Germany as there s ll
exists wage differences. 2) Nearshoring: It describes the outsourcing to neighbour countries, e.g., a German company shi s
his IT-department to a neighbour country such as Hungary or Czech Republic or in the case of an American company who shi s
his produc on process to Mexico. 3) Farshoring: farshoring describes the outsourcing to far low-wage country, such as a
shi ing processes from U.S.A. to Asia. In the media the word Farshoring is not used much, instead the terminology of Offshoring
is used, as the idea of offshoring is also associated with far distance.
Reasons/Objec ves for Offshoring : 1) Lower Costs 2) Access to Talent 3) Flexibility 4) Market Penetra on Advantages
of Offshoring : 1) Cost Saving 2) Creates New Service Lines 3) Access to talent 4) Elimina on of Recrui ng Costs 5) Time Saving
6) Reduc on of Legal Exposure 7) Flexibility 8) Reten on and Loyalty Disadvantages of Offshoring : 1) Cultural and
Language Barriers Between Companies 2) Loss of Customer Focus, from the Offshore Company 3) me difference 4 heavy
reliance on Onsite resources
5. HR IN MERGERS AND ACQUISITIONS (M&AS)
merger - a situa on in which two or more companies are combined either because of mutual cost and combined accounts, or
buying where the amount paid is more than the book value of the acquired fem and in recorded in the books of the buying
firm in the form of 'goodwill" or a consolida on in which in order to acquire the net assets of the combining firms, a new
company is cons tuted. acquisi on.: When one firm takes control of other firm, it is known as acquisi on. The buyer firm
purchases the stock or assets of the seller firm for cash or/and stock. In every kind of acquisi on ac vi es, the power of buying
firm is always significant. Reasons for Mergers and Acquisi ons : 1 Avoiding Compe on 2 Cost-Saving 3) Preven ng
Being a Takeover Target 4) Enhancing Revenues and Controlling Sales Varia ons 5) Market and Product Line Issues 6) Acquire
Resources 7) Synergy 8) Tax Savings 9) Cashing Out
Types of Mergers : 1) Horizontal Mergers: When two or more firms of same business or opera ng in a specific aspect of the
produc on or marke ng processes join hands, this is termed as horizontal merger. 2) Ver cal Mergers: When two or more
firms which are not opera ng primarily in the same busines and a suppor ng combina on are developed either in terms of
marke ng of products and services or supply of raw material, is known as ver cal mergers. 3) Concentric Mergers: When two
or more org.having similar ac vi es either in case of costumer func ons, alterna ve technologies or customer groups are
combined, it is known as concentric mergers 4) Conglomerate Mergers: When two or more org.which are completely unrelated
to each other in terms of func ons, alterna ve technologies, or customer groups are combined with each other, it is regarded
as conglomerate mergers. 5) Reverse Mergers: Reverse merger is also known as backdoor lis ng. It is a financial ac vity in
which a private firm gets converted into a public firm without using the formal ways of filing prospectus and issuing an ini al
public offering (IPO).
Types of acquisi ons : 1) Friendly Acquisi on: When there is a friendly approval of acquisi on terms by both the firms, it is
considered as friendly acquisi ons. The whole process is done in a very friendly environment and no pressure is exerted on
either party. 2) Reverse Acquisi on: The firm can become a public company when it acquires a public firm, ins tu ng its own
management in it, and changing the name of the acquired firm 3) Back Flip Acquisi on: In this, the buying firm gets converted
into a subsidiary firm of the bought firm. 4) Hos le Acquisi on:. In this, smaller firm may be driven by condi ons which it
cannot refuse in order to save it from the bigger firm or the bigger firm can buy all the shares of the smaller firm which will
create the majority of the bigger firms, and thus acquisi on can be ini ated.
Role of HR Professionals in Mergers and Acquisitions : 1) New Board Formulation 2) Filling Vacant Positions 3) Culture
Evaluation 4) Conducting Human Capital Audit 5) Effective Communication 6) Retaining Talent 7) Balancing Performance
Appraisal and Reward Systems 8) Transition Management Advantages of Mergers and Acquisitions : 1)
Expansion of business in those fields which have barriers to entry. 2) Avoiding various risk associated with penetrating into
new products, businesses, or regions 3) Efficiency in distribution channel. 4 ) Greater growth rate. 5) Dominance in a
fragmented industrial sector. 6) Avoiding the competition, subject to anti-competition laws 7) Minimising capital cost of
growth 5) Having greater access to cash reserves and other vital financial resources including tax deductions. 9) Gaming the
access to managerial talent and other organizational capabilities Mistakes in Mergers and Acquisitions
: 1) Not being able to determine a corporate strategy which aligns with the merger and Acquisitions process. 2) Poor planning
resulting in the poor integration of the merging firm 3) Selection of incorrect Acquisitions target. 4) Failing in executing the
review from the conceptualization stage to post-purchase stage 5) Not being able to manage the expectations in either firm
after the merger. 6) Failure to take steps regarding establishment of synergies 7) Having the notion that the activities of
targeted firm are inferior to the buying firm 8) Treating the merger and acquisition activity, completely as a financial.