Unit 4

Human Resource Management

• Human resource management (HRM) is the process of acquiring, training,
appraising, and compensating employees, and of attending to their labor
relations, health and safety, and fairness concerns.
• Every manager needs to perform the “people” or personnel aspects of
management. These include:
• 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.
• Appraising performance.
• Communicating (interviewing, counseling, disciplining).
• Training employees and developing managers.
• Building employee relations and engagement.
Nature of HRM
• Important function of HRM is the building of human capital. Human
capital refers to the stock of employee skills, knowledge and
capabilities that may not show up in a balance sheet but have
significant impact on a firm’s performance. Human capital lends
competitive advantage to a firm.
• HRM necessitates alignment of HR policies and practices with the
organization's strategies—both corporate as well as functional.
• HRM assumes that it is the people who make the difference. They
alone are capable of generating value and adding to the competitive
advantage to organizations.
 Importance of Human Resource Management
• The importance of human resource management can be discussed, after Yodder,
Hemerman and other from three standpoints, viz. social, professional and
individual enterprise.
• Social Significance: Proper management of personnel, enhances their dignity by
satisfying their social needs. This it does by
1. Maintaining a balance between the jobs available and the job seekers
according to the qualification and needs,
2. Providing suitable productive employment, which might bring them
psychological satisfaction;
3. Making maximum utilization of the resource in an effective manner and
paying the employee a reasonable compensation in proportion to the
contribution made by him;
4. Eliminating waste or improper use of human resource, through conversation
of their normal energy and health;
5. By helping people make their own decisions, that are in their interests.
Professional Significance: By providing healthy working environment, it promotes
teamwork among the employees. This is done by
1. Maintaining the dignity of the employees as a―human being;
2. Providing maximum opportunities for personal development;
3. Providing healthy relationship between different work groups so that work is
effectively performed;
4. Improving the employees‘ working skill and capacity;
5. Correcting the errors of wrong posting and proper reallocation work.
Significance for Individual Enterprise: It can help the organization in accomplishing its
goals by :
6. Creating right attitude among the employees through effective motivation;
7. Utilizing effectively the available resources and
8. Securing willing co-operation of the employees for achieving goals of the enterprise
and fulfilling their own social and other psychological needs of recognition, love,
affection, belongingness, esteem and self actualization.
Operating and Managerial Functions of HRM
 Manpower Planning/Human Resource Planning

HRP or MPP may be defined as strategy for acquisition, utilization, improvement and
preservation of the human resources of an enterprise.

The objective is to provide right personnel for the right work and optimum utilization of the
existing human resource and meet the future requirements of human resource.

Major activities of HRP

• Forecasting (Future requirements)

• Inventory (present strength)
• Anticipating (Comparison of present and future requirements)
• Planning (Necessary programme to meet future requirements).
When Human Resource Planning is applied properly in the field of Human Resource
Management, it would assist to address the following questions:
1. How much number of staff does the organization have?
2. What types of employees as far as skills and abilities does the organization
have?
3. How should the organization best utilise the available human resources?
4. How can the organization keep its employees?

As per the definition of ILO “Human resources planning is the process by which
management ensures that it has the right personnel, who are capable of completing
those tasks that help the organization reach its objectives. It involves the forecasting
of human resources needs and the projected matching of individuals with expected
vacancies”.
 Objective of Manpower Planning
• To ensure optimum use of existing manpower.
• To forecast future requirements for manpower.
• To provide control measure to ensure that necessary manpower are available as
and when required.
• To link manpower planning with organizational planning.
• To assess the surplus and shortage of manpower.
• To anticipate the impact of technology on jobs and manpower.
• To determine levels of recruitment and training.
• To estimate the cost of manpower and housing needs of employees.
• To provide a basis for management development programmes.
• To facilitate productivity bargaining.
• To meet the needs of expansion and diversification programmes.
 PROCESS OF MANPOWER PLANNING
The following are the major steps involved in Human Resource Planning
1. Analysis of Organizational Plans and Objectives

2. Forecasting Demand for Human Resources

3. Forecasting Supply of Human Resources

4. Estimating Manpower Gaps

5. Matching Demand and Supply

 DETERMINANTS OF HRP (Factors influencing HRP)
There are several factors that affect HRP. These factors or determinants can be
classified into external factors and internal factors.
External Factors
Government Policies
Level of Economic Development
Business Environment
Level of Technology
International Factors
Internal Factors
Company Policies and Strategies
Human Resource Policies
Job Analysis
Time Horizons
HR Demand forecast
• Demand forecasting is the process of estimating the quantity and quality of people
required to meet future needs of the organization.
• There are several good reasons to conduct demand forecasting. It can help:
1. Quantify the jobs necessary for producing a given number of goods, or
offering a given amount of services;
2. Determine what staff-mix is desirable in the future;
3. Assess appropriate staffing levels in different parts of the organization so as
to avoid unnecessary costs;
4. Prevent shortages of people where and when they are needed most; and
5. Monitor compliance with legal requirements with regard to reservation of
jobs.
Forecasting Techniques
The techniques are:
1. Managerial judgement
2. Ratio-trend analysis
3. Regression analysis
4. Work study techniques
5. Delphi technique
Ratio trend analysis involves studying past ratios and forecasting future ratios making some
allowances for changes in the organization or its methods
Regression Analysis This is similar to ratio-trend analysis in that forecast is based on the
relationship between sales volume and employee size. A firm first draws a diagram depicting
the relationship between sales and workforce size. It then calculates regression line—a line
that cuts right through the center of the points on the diagram. By observing the regression
line, one can find out number of employees required at each volume of sales
Work study techniques
the Delphi technique is a method of forecasting personnel needs. It solicits estimates of
personnel needs from a group of experts, usually managers. The HRP experts act as
intermediaries, summarizes the various responses and report the findings back to the
experts. The experts are surveyed again after they receive this feedback. Summaries and
surveys are repeated until the experts’ opinions begin to agree. The agreement reached is
the forecast of the personnel needs.
 HR Supply forecast
Supply forecast determines whether the HR department will be able to procure the
required number of personnel. Specifically, supply forecast measures the number of
people likely to be available from within and outside an organization.

The supply analysis covers:

1. Existing human resources,
2. Internal sources of supply, and
3. External sources of supply.
 Existing Human Resources
Present Employees Analysis of present employees is greatly facilitated by HR
audits. HR audits summarize each employee’s skills and abilities. The audits of
non-managers are called skills inventories and those of the management are called
management inventories. Whatever name is used, an inventory catalogues each
employee’s skills and abilities. This summary gives planners a comprehensive
understanding of the capabilities found in the organization's workforce.
 Internal sources of supply
Armed with HR audits, planners can proceed with the analysis of internal supply. The
techniques generally used for the purpose are:

(i) inflows and outflows,

(ii) turnover rate,
(iii) conditions of work and absenteeism,
(iv) productivity level, and
(v) movement among jobs.
Inflows and Outflows
Labour Turnover Index
•
 Conditions of Work and Absenteeism
Changes in conditions of work such as normal weekly working hours, overtime policies, the
length and timing of holidays, retirement policy, the policy for employing part-timers and
shift systems need to be assessed.
Absenteeism is understood as unauthorized absence from work. Stated differently, it
amounts to absenteeism when an employee is scheduled to work but fails to report for duty.
Productivity Level Any change in productivity would affect the number of persons required
per unit of output. Increase in productivity will reduce the requirement and decrease in it
would have the opposite effect.

Movement among Jobs Some jobs are sources of personnel for other jobs. For example,
secretaries may be obtained by the promotion of word processors, and branch managers are
obtained from a pool of section managers. If, for example, we anticipate a need for five new
branch managers seven years from now, more than five potential branch managers should
have entered the company this year, assuming that seven years is the average development
time. Obviously, some will quit before the seven years are up and others may not qualify for
promotion.
 Recruitment
Recruitment involves attracting and obtaining as many applications as possible from eligible
job-seekers.

1. Determine the present and future requirements of the firm in conjunction with its personnel
planning and job-analysis activities.
2. Increase the pool of job candidates at minimum cost.
3. Help increase the success rate of the selection process by reducing the number of visibly
underqualified or overqualified job applicants.
4. Help reduce the probability that job applicants, once recruited and selected, will leave the
organization only after a short period of time.
5. Meet the organization's legal and social obligations regarding the composition of its
workforce.
6. Begin identifying and preparing potential job applicants who will be appropriate candidates.
7. Increase organizational and individual effectiveness in the short term and long term.
8. Evaluate the effectiveness of various recruiting techniques and sources for all types of job
applicants.
How to Look: It refers to the methods or sources of recruitment. There are several sources
and they may be broadly categorized into (i) internal, and (ii) external.
Motivation
Motivation as the processes
that account for an
individual’s intensity,
direction, and persistence of
effort toward attaining a
goal.
Key Elements
1. Intensity: how hard a person tries
2. Direction: toward beneficial goal
3. Persistence: how long a person tries
The Nature of Motivation
• Intrinsic Motivation
• Behavior that is performed for its own sake.
• The source of the motivation that comes from actually engaging in the
behavior.
• The sense of accomplishment and achievement derived from doing the
work itself
• Extrinsic Motivation
• Behavior that is performed to acquire material or social rewards or to avoid
punishment.
• The source of the motivation is the consequences of the behavior and not
the behavior itself.
Extrinsic vs. Intrinsic Motivation:
What's the Difference?
• A basic principle is that the performance of an individual in an
organization depends on his or her ability backed by motivation stated
algebraically the principle is
Performance = f(ability x motivation)
• Ability alone is not enough. The person’s desire to accomplish the task
is also necessary. Organizations become successful when employees
have abilities & desire to accomplish given tasks.
Maslow's Need-Hierarchy Theory of Motivation
One of the most popular theory of motivation is
Abraham Maslow's hierarchy of needs theory.
Maslow proposed that motivation is the result
of a person's attempt at fulfilling five basic
needs: physiological, safety, social, esteem and
self-actualization. According to Maslow, these
needs can create internal pressures that can
influence a person's behavior.
 Frederick Herzberg's two-factor theory
1. Also called Motivation-Hygiene theory or dual factor theory
2. Frederick Herzberg [Case Western Reserve University]
3. Conducted interview- 200 engineers and accountants
4. He developed the theory that people’s job satisfaction depends on two kinds of factors.
Factors for satisfaction (motivators/satisfiers) and factors for dissatisfaction (hygiene factors/
dissatisfiers).
5. Motivators: A set of job conditions operates primarily to build strong motivation and high
job satisfaction, but their absence rarely proves strongly dissatisfaction.
6. Hygiene factors: There are some job conditions which operate primarily to dissatisfy
employees when the condition are absent, however their presence does not motivate them in a
strong way.
Six Motivational factors or satisfiers: Achievement,
recognition, advancement, work itself, possibility of growth and
responsibility.

Ten Hygiene Factors: Company policy and administration;

technical supervision; interpersonal relationship with supervisor,
peers, subordinates; salary, job security, personal life, working
conditions and status.

Note: These are not intrinsic parts of a job, but they are related to
conditions under which job is performed.

6–35
Frederick Herzberg's two-factor theory
‘Motivators’ can
motivate but lack of
motivators does not
cause dissatisfaction

‘Hygiene factors’ can

cause dissatisfaction
but cannot motivate

6–36
What Is Leadership?
Leadership
The ability to influence a
group toward the
achievement of goals.

Management
Use of authority inherent
in designated formal rank
to obtain compliance from
organizational members.
Key Characteristics: Transactional Leader
Leaders who guide or motivate their followers in the direction of
established goals by clarifying role and task requirements.

Contingent Reward: Contracts exchange of rewards for effort, promises

rewards for good performance, recognizes accomplishments.

Management by Exception (Active): Watches and searches for deviations

from rules and standards, take correct action.

Management by Exception (Passive): Intervenes only if standards are not

met.

Laissez-Faire: Abdicates responsibilities, avoids making decisions.

 Key Characteristics: Transformational Leaders

Leaders who inspire followers to transcend their own self-interest and

who are capable of having a profound and extraordinary effect on
followers.

Idealized influence: Provide vision and sense of mission, instills pride,

gains respect and trust.

Inspirational Motivation: Communication high expectations, uses

symbols to focus efforts, express important purposes in simple ways.

Intellectual Stimulation: Promotes intelligence, rationality, and careful

problem solving.

Individualized Consideration: Gives personal attention, treats each

employee individually, coaches, advises.
What is a Group?
A group may be defined as an organized system of two or more individuals,
who are interacting and interdependent, who have common motives, have a set
of role relationships among its members, and have norms that regulate the
behavior of its members.

What is a team?
Teams are special kinds of groups. Members of teams often have
complementary skills and are committed to a common goal or purpose.
Members are mutually accountable for their activities. In teams, there is a
positive synergy attained through the coordinated efforts of the members.
 Team vs. Group
Group Criteria Team
Formal established Leadership Shared Roles
Individual Accountability Shared and Individual
Sum of individual outputs Performance Collective and Synergistic
Diverse Skills Complementary
Common goal Orientation Common Commitment
Group Development
Attitudes
• Attitudes are evaluative statements—either favorable or
unfavorable—about objects, people, or events. They reflect how we
feel about something. When I say, “I like my job,” I am expressing my
attitude about work.
• In psychology, an attitude refers to a set of emotions, beliefs, and
behaviors towards a particular object, persons, thing, or event.
Attitudes are often the result of experience or upbringing, and they can
have a powerful influence over behavior.
• An attitude is “a mental state of readiness, organized through
experience, exerting a specific influence upon a person’s response to
people objects and situations with which it is related”.
Components of Attitudes
Cognitive Component: Cognitive component involves the belief or knowledge of the
person. This base knowledge is usually objective and without any emotional element.
This component includes a beliefs an individual has about a certain person, object or
situation.
Eg: My pay is low
Affective Component: The affective component of an attitude relates to some form of
judgment or evaluation of the object, person, task or brand in positive or negative.
Affective component is the emotional or feeling segment of an attitude. It is related to
the statement which effects another person.
Eg: I am angry over how little I’m paid
Behavioral Component: The third component of an attitude is the behavioral
component. Behavior component of an attitude consists of a person’s tendencies to
behave in a particular way towards an object. It refers to that part of attitude which
reflects the intention of a person in the short-run or long run.
Eg: I’m going to look for another job that pays better
What is Personality?
Personality
Gordon Allport define personality as “ the dynamic
organization within the individual of those psychophysical
systems that determine his unique adjustments to his
environment.”

Personality Traits Personality

Enduring characteristics that Determinants
describe an individual’s behavior. ● Heredity
● Environment
● Situation
 Importance of Personality for
performance
Increase awareness of self and others
Work more effectively with co-workers and customers
Become more effective leaders
Help target the ideal job
Create individual development plans to optimize targeted competencies
Develop trait profiles to use in the selection process that help maximize department
and company performance by improving the accuracy of candidate selection.
Link identifying job competencies with targeted job profiles
Identify traits and behaviors of team members and discuss optimal interactions
(relationships) to improve individual and team performance.
Help managers identify different motivations and belief systems of their staff
members so they can manage to the individual, not the group
 Big Five Personality
The five basic dimensions of the Big Five model underlie all other and encompass most the
significant variations in human personality.
Openness to Experience: A personality dimension that describes someone who is imaginative,
sensitive and curious. Those at the other end of the openness category are conventional
and find comfort in the familiar.
Conscientiousness: A personality dimension that describes someone who is responsible,
dependable, persistent.
Extroversion: A personality dimension describing someone who is sociable, talkative, open to
establishing new relationship and assertive. On the other hand, introverts tend to be
reserved, timid and quiet.
Agreeableness: A personality dimension describing some who is soft-hearted, good-natured,
cooperative and trusting. People who score low on agreeable are cold, disagreeable and
antagonistic.
Neuroticism: A personality dimension describing someone who is calm, self-confident,
secure. Those with high negative scores tend to be nervous, anxious, depressed and insecure.
What Is Perception, and Why Is It Important?
Perception
A process by which •People’s behavior is
individuals organize and based on their
interpret their sensory perception of what
impressions in order to reality is, not on
give meaning to their
environment.
reality itself.
•The world as it is
perceived is the world
that is behaviorally
important.

5–49
PERCEPTUAL PROCESSES
“The process by which we recognise, interpret or give
meaning to the information provided by sense organs is
called perception”.

5–50
Learning
What is Learning?

Any relatively permanent change in behavior that occurs as a

result of experience

Types of Learning

Procedural Learning: Repeating a complex activity over and over

again until all of the relevant neural systems work together to
automatically produce the activity.

Declarative Learning: Declarative learning is acquiring

information that one can speak about.
Principles of Learning
Principles of learning
• Motivation
• Reinforcement, Punishment, and Extinction
• Whole vs Part learning
• Meaningfulness of material
• Participation
• Feedback
• Learning Style
• Learning Curves
Motivation
The concept of motivation is basic because, without motivation learning

does not take place or, at least, is not discernible.

Reinforcement, Punishment and Extinction
• Positive reinforcement
• Providing a reward for a desired behavior.
• Negative reinforcement
• Removing an unpleasant consequence when the desired behavior occurs.
• Punishment
• Applying an undesirable condition to eliminate an undesirable behavior.
• Extinction
• Withholding reinforcement of a behavior to cause its cessation.
 Reinforcement, Punishment and Extinction
Reinforcement: Reinforcement is the attempt to develop or strengthen desirable behavior.
There are two type of reinforcement: Positive and negative reinforcement.
Positive Reinforcement: It strengthens and enhances behavior by the presentation of
positive reinforces. There are primary reinforcers and secondary reinforcers.
Primary reinforcers: Basic biological needs
Secondary reinforcers (Conditioned reinforcers): money, status, grades, trophies etc.
Note: It should be noted that an event that functions as a positive reinforcer at one time or
in one context may have a different effect at another time or in another place.
Reinforcement
Negative Reinforcement: In negative reinforcement, an unpleasant event that
precedes a behavior is removed when the desired behavior occurs.
Note:
Positive reinforcement strengthens and increases behavior by the presentation of
desirable consequences. Negative reinforcement strengthens and increases behavior
by the threat of and the use of an undesirable consequences or the termination or
withdrawal of an undesirable performance.
Negative reinforcement is sometimes confused with punishment, because both are
unpleasant stimuli to influence behavior. However, negative reinforcement is used
to increase the frequency of a desired behavior and punishment is used to decrease
the frequency of an undesired behavior.
Schedules of Reinforcement
Continuous Reinforcement
A desired behavior is reinforced
each time it is demonstrated.

Intermittent Reinforcement
A desired behavior is reinforced
often enough to make the
behavior worth repeating but not
every time it is demonstrated.
Schedules of Reinforcement (cont’d)
Fixed-Interval Schedule
Rewards are spaced at
uniform time intervals.

Variable-Interval Schedule
Rewards are initiated after a
fixed or constant number of
responses.
Whole vs Part Learning: Breaking the job into parts and learning the parts. In part learning
the individual is not only required to learn each individual part but must be able to combine
the separate parts so that the whole performance can be accomplished.
Meaningfulness of Material: A definite relationship has been established between learning
and meaningfulness of the subject learnt. The more meaningful the material, the better does
learning proceed.
Participation: Involving learner in the process facilitates quick learning and what has been
learnt stays longer with them.
Feedback: The most basic principle of learning is feedback. Feedback provides information
about the effectives of learning improvements that may be needed.
Learning Styles: Learning style refers to the ability of an individual to learn. There are four
styles people use when learning:
1. Accommodator
2. Diverger
3. Assimilator
4. Converger
 Learning Styles
1. Accommodator: An accommodator learns by doing and feeling. He/she tends to learn
primarily from hands-on experience. He or she tends to act on gut feeling rather than on
logical analysis. Example: Marketing, politics, public relations and management.
2. Diverger: A diverger learns by observing and feeling. The diverger has the ability to
view concrete situations from different angles. When solving problems, diverger enjoys
brainstorming. He or she takes time and analyses many alternatives. Diverger is
imaginative and sensitive to the needs of the other people. Example: Arts and services
sector.
3. Converger: A Converger learns by doing and thinking. The converger seeks practical
use for information. When presented with problems and making decisions, the
converger tends to focus on solutions. Example: Engineer, IT and managerial jobs.
4. Assimilator: An assimilator learns by observing and thinking. The assimilator is
effective at understanding a wide range of information and putting into concise and
logical form. It is more important for the assimilator that an idea or theory is logical
than practical. Example: Education, information and science.