Introduction to Human

Resource Management
www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
Introduction
Look at the questions given below and try answering them.

• Whom do you send your resume to when you see a job opening that
interests you?

• Who gives you the job offer and discusses your pay package with you?

• Who inducts you into the organization when you are a new employee?

• Whom do you contact when you have any doubts regarding your pay
package, perks, benefits, conveyance, leave management etc.?
• Who helps you in the final exit formalities when you leave an
organization?

• Who takes care of your training and development needs?

www.ManagementStudyGuide.com
 Introduction

You must have guessed correctly. It is the Human

Resource Managers and people from the HR
Department who take care of you right from the
time when you apply to a company, you get the
job, you join the company, are working with the
company till the time you leave the company.

Hence, in your entire lifecycle of involvement with

the company, the HR always stands by you and
supports you during your tenure with the company.
Hence, HR managers are also known as ‘People
Managers’, ‘People Enablers’ and the practice as
‘Human Resource or People Management’.

www.ManagementStudyGuide.com
 Introduction

Human Resource Management is an important

function of any organization. It encompasses the
management of people in organizations from a
macro perspective i.e. managing people in the
form of a collective relationship between
management and employees.

Thus, the HR function is concerned with the notions

of people enabling, people development and a
focus on making the ‘employment relationship’
fulfilling for both the management and employees.
Let us learn about Human Resource Management
in detail.

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
What is Human Resource Management (HRM)?

It is a science as well
because of the precision and
rigorous application of
theory that is required.

Human Resource Management

(HRM) is an ‘art and science’.

Thus, HRM is both the art of

managing people by recourse to
creative and innovative
approaches.

www.ManagementStudyGuide.com
 What is Human Resource Management (HRM)?

HRM is all about people in organizations. No wonder that some MNC’s

(Multinationals) call the HR managers as People Managers, People Enablers and
the practice as People Management. In the 21st century organizations, the HR
manager or the people manager is no longer seen as someone who takes care of
the activities described in the traditional way. In fact, most organizations have
different departments dealing with Staffing, Payroll, and Retention etc. Instead,
the HR manager is responsible for managing employee expectations vis-à-vis the
management objectives and reconciling both to ensure employee fulfillment and
realization of management objectives.
www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
Human Resource Management - Definition
The process of defining HRM leads
us to two different definitions.
They are:

• Traditional Definition

• Contemporary Definition

Let us look at each definition.

www.ManagementStudyGuide.com
HRM - Traditional Definition

Traditional Definition:

The first definition of HRM is that it is the

process of managing people in organizations
in a structured and thorough manner. This
covers the fields of staffing (hiring people),
retention of people, pay and perks setting and
management, performance management,
change management and taking care of exits
from the company to round off the activities.
This is the traditional definition of HRM which
leads some experts to define it as a modern
version of the Personnel Management
function that was used earlier.
www.ManagementStudyGuide.com
HRM - Contemporary Definition

Contemporary Definition:

The second definition of HRM encompasses

the management of people in organizations
from a macro perspective i.e. managing
people in the form of a collective relationship
between management and employees. This
approach focuses on the objectives and
outcomes of the HRM function. What this
means is that the HR function in
contemporary organizations is concerned with
the notions of people enabling, people
development and a focus on making the
‘employment relationship’ fulfilling for both
the management and employees.
www.ManagementStudyGuide.com
 Importance of HRM for Organizational Success
There are various reasons for organizations to have a
HRM strategy as well as the business drivers that
make the strategy imperative for organizational
success.
It is a fact that to thrive in the chaotic and turbulent
business environment, firms need to constantly
innovate and be ‘ahead of the curve’ in terms of
business practices and strategies.

It is from this motivation to be at the top of

the pack that HRM becomes a valuable tool
for management to ensure success.
www.ManagementStudyGuide.com
 The following are the various reasons that organizations need to give
importance to HRM:

• The Evolving Business Paradigm

• Strategic Management and HRM

• Need for Adopting a Holistic Approach

Let us look at each in detail.

www.ManagementStudyGuide.com
• The Evolving Business Paradigm

One of the factors behind organizations giving a lot of attention to their

people is the nature of the firms in the current business environment. There
has been a steady movement towards an economy based on services; hence,
it becomes important for firms engaged in the service sector to keep their
employees motivated and productive. Even in the manufacturing and the
traditional sectors, the need to remain competitive has meant that firms in
these sectors deploy strategies that make effective use of their resources. This
changed business landscape resulted due to a paradigm shift in the way
businesses and firms view their employees as more than just resources and
instead adopt a ‘people first’ approach.
www.ManagementStudyGuide.com
• Strategic Management and HRM

Moreover, there is a need to align organizational goals with that of the HR

strategy to ensure that there is alignment of the people policies with that of
the management objectives. This means that the HR department can no
longer be viewed as an appendage of the firm but instead is a vital organ in
ensuring organizational success. The aims of strategic management are to
provide the organization with a sense of direction and a feeling of purpose.
The current HRM practices in many industries are taken as seriously as the
marketing and production functions.
www.ManagementStudyGuide.com
• Need for Adopting a Holistic Approach

The practice of HRM must be applied to the overall strategic goals for the
organization instead of a standalone tint that takes a unit based or a micro
approach. The idea here is to adopt a holistic perspective towards HRM that
ensures that there are no piecemeal strategies and the HRM policy enmeshes
itself fully with those of the organizational goals. The practice of HRM needs
to be integrated with the overall strategy to ensure effective use of people
and provide better returns to the organizations in terms of ROI (Return on
Investment) for every rupee or dollar spent on them. Unless the HRM practice
is designed in this way, the firms stand to lose from not utilizing people fully
and this does not bode well for the success of the organization.
www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 Scope of Human Resource Management

Human resources are undoubtedly the key resources in an organization, the

easiest and the most difficult to manage. The objectives of the HRM span right
from the manpower needs assessment to management and retention of the
same. To fulfill this purpose, Human Resource Management is responsible for
effective designing and implementation of various policies, procedures and
programs. It is all about developing and managing knowledge, skills, creativity,
aptitude and talent and using them optimally.

Human Resource Management is not just limited to manage and optimally

exploit human intellect. It also focuses on managing physical and emotional
capital of employees. Thus, the scope of HRM is widening with every passing day,
considering the intricacies involved.
www.ManagementStudyGuide.com
 The scope of HRM covers but is not limited to the following functions:
Training and Development Industrial Relations

Hiring (Recruitment an
Grievance Handling Selection)

HR planning

Payroll Management

Rewards and Recognitions Legal

Procedures
Therefore, HRM is about developing and managing harmonious relationships at
workplace and striking a balancewww.ManagementStudyGuide.com
between organizational goals and individual goals.
The scope of HRM is extensive and
far-reaching. Therefore, it is very
difficult to define it concisely. HRM in
However, we can classify the scope Personnel
of HRM under the following three Management
categories:
HRM in
Employee
Welfare

HRM in
Industrial
Relations

Let’s look at each in detail.

www.ManagementStudyGuide.com
HRM in Personnel Management:
HRM in Personnel Management is typically direct
manpower management that involves manpower
planning, hiring (recruitment and selection), training
and development, induction and orientation, transfer,
promotion, employee productivity, compensation,
layoff and retrenchment.

www.ManagementStudyGuide.com
HRM in Personnel Management:
HRM in Personnel Management is typically direct
manpower management that involves manpower
planning, hiring (recruitment and selection), training
and development, induction and orientation, transfer,
promotion, employee productivity, compensation,
layoff and retrenchment.

The overall objective here is to ascertain individual growth, development and

effectiveness which indirectly contribute to organizational development.

It also includes performance appraisal, developing new skills, disbursement of

wages, incentives, allowances, travelling policies and procedures and other
related courses of actions.
www.ManagementStudyGuide.com
HRM in Employee Welfare
HRM in Employee Welfare is a particular aspect of HRM
which deals with working conditions and amenities at
workplace. This includes a wide array of responsibilities
and services such as safety services, health services,
welfare funds, social security and medical services. It
also covers appointment of safety officers, making the
environment worth working, eliminating workplace
hazards, support by top management, job safety,
safeguarding machinery, cleanliness, proper ventilation
and lighting, medical care, sickness benefits, employee
injury benefits, personal injury benefits, maternity
benefits, unemployment benefits and family benefits.
www.ManagementStudyGuide.com
HRM in Employee Welfare
HRM in Employee Welfare is a particular aspect of HRM
which deals with working conditions and amenities at
workplace. This includes a wide array of responsibilities
and services such as safety services, health services,
welfare funds, social
It also relates security and
to supervision, medicalcounseling,
employee services. It establishing harmonious
also covers appointment
relationships of safety
with employees, officers, making
education the Employee welfare is
and training.
environment worth working,
about determining employees’eliminating
real needsworkplace
and fulfilling them with active
hazards, support
participation of by topmanagement
both management, andjobemployees.
safety, In addition to this, it also
safeguarding
takes care ofmachinery, cleanliness,
canteen facilities, proper
crèches, restventilation
and lunch rooms, housing,
and lighting,medical
transport, medicalassistance,
care, sickness benefits,health
education, employee and safety, recreation
injury benefits,
facilities, etc. personal injury benefits, maternity
benefits, unemployment benefits and family benefits.
www.ManagementStudyGuide.com
HRM in Industrial Relations
HRM in Industrial Relations is a highly sensitive area. It
needs careful interactions with labor or employee
unions, addressing their grievances and settling the
disputes effectively in order to maintain peace and
harmony in the organization.

www.ManagementStudyGuide.com
 Roll your
mouse over
the icon, to
learn more.

It is the art and science of understanding the employment (union-

management) relations, joint consultation, disciplinary procedures, solving
HRM in Industrial
problems Relations
with mutual efforts, understanding human behavior and
HRM in Industrial
maintaining workRelations
relations,is collective
a highly sensitive area.and
bargaining It settlement of disputes.
needs careful interactions with labor or employee
unions,
The main addressing
aim is totheir grievances
safeguard and settling
the interest the
of employees by securing the
disputes
highest effectively in order to maintain
level of understanding peace that
to the extent and does not leave a negative
harmony
impact on in organization.
the organization.
It is about establishing, growing and promoting
industrial democracy to safeguard the interests of both employees and
management.
www.ManagementStudyGuide.com
Did You Know?

Another vital part of the HR planning

process is 'Succession Planning'. Succession
Planning refers to the way in which a
company forms policies for replacing key
members of its organization, shifting
transfer of authority and responsibility
carefully from a leaving member to a new
member. This often entails ensuring that an
arriving employee has the necessary training
and experience to fulfill their functions.

www.ManagementStudyGuide.com
 MCQ

Q. Which of the following is NOT a

scope of HRM?

Click on the
radio button
to select the
correct
answer!
www.ManagementStudyGuide.com
MCQ

Q. Which of the following is NOT a

scope of HRM?
GGoooodd!! TThat
hat''ss RRiigghhtt!!
CCoorrrreecctt Ans
Answweerr::

Q
Quuaallitityy M
Maannaaggeem
meenntt iiss NNOOT a s
T a sccooppee oof HR
f HRM
M..

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
MCQ

Q. Which of the following is NOT a

scope of HRM?
TThhaatt''ss N
Noott Q
Quuiittee RRiigghhtt!
CCoorrrreecctt Ans !
Answweerr::

Q
Quuaallitityy M
Maannaaggeem
meenntt iiss NNOOT a s
T a sccooppee oof HR
f HRM
M..

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
Each organization works towards
the realization of one vision.

The same is achieved by

formulation of certain strategies
and execution of the same, which
is done by the HR department.

At the base of this strategy

formulation lie various processes
and the effectiveness of the
strategy formulation lies in the
meticulous design of these
processes.

www.ManagementStudyGuide.com
 The following are the various HR processes:

The efficient designing of these processes apart from other things depends
upon the degree of correspondence of each of these. This means that each
process is subservient to other. You start from Human Resource Planning and
there is a continual value addition at each step. All processes are integral to
the survival and success of HR strategies and no single process can work in
isolation; there has to be a high level of conformity and cohesiveness
between the same.
Let us look at each process in detail.
www.ManagementStudyGuide.com
 1

Human Resource Planning is generally considered as

the process of people forecasting. This is right but
does not completely define what Human Resource
Planning encompasses. It also involves the processes
of Evaluation, Promotion and Layoff. Human Resource
Planning involves the following functions:
• Recruitment: It aims at attracting applicants that
match a certain Job Criteria.
• Selection: The next level of filtration. This aims at
short listing candidates who are the closest
match in terms qualifications, expertise and
potential for a certain job.
• Hiring: This involves deciding upon the final
candidate who gets the job.
• Training and Development: These processes work
on an onboard employee for up gradation of his
skills and abilities. www.ManagementStudyGuide.com
 2

Employee Remuneration and Benefits

Administration is the process that involves
deciding upon salaries and wages,
Incentives, Fringe Benefits and Perquisites
etc.

This process is very important because

money is the prime motivator in any job.
Performing employees seek raises, better
salaries and bonuses.

www.ManagementStudyGuide.com
 3

Performance Management helps the

organization to train, motivate and reward
workers. It is also meant to ensure that the
organizational goals are met with efficiency.
The process can be conducted for not only
the employees but can also be conducted for
a department, product, service or customer
process; all towards enhancing or adding
value to them.

Nowadays, there is an automated

Performance Management System (PMS)
that gathers and provides all the information
to help managers evaluate the performance
of the employees and assess them
accordingly on their training and
development needs. www.ManagementStudyGuide.com
 4

Employee relations include Labor Law and

Relations, working environment, employee
health and safety, employee- employee
conflict management, employee- employer
conflict management, quality of work life,
workers compensation, employee wellness
and assistance programs, counseling for
occupational stress. All these are critical to
employee retention apart from the money
or remuneration which is only a hygiene
factor. Employee retention is a nuisance in
organizations, especially in industries that
are hugely competitive in nature. Though
there are myriad factors that motivate an
individual to stick to or leave an
organization, but few such as stated above
are certainly under our control. www.ManagementStudyGuide.com
 MCQ

Q. Which of the following is an aspect

of HRM which deals with working
conditions and amenities at
workplace?

Click on the
radio button
to select the
correct
answer!
www.ManagementStudyGuide.com
MCQ

Q. Which of the following is an aspect

of HRM which deals with working
GGooooconditions and amenities at
dd!! TThhaatt''ss Ri
workplace? Rigghhtt!!
CCoorrrreecctt Ans
Answ weerr::

EEm
mpplo loyyeeee W Weellffaarree isis aan as
ddeeaallss w
witithh w n asppeecctt ooff HRM
woorrkkinin g
g c o n HRM w whhicichh
aatt w
woorrkkppla co nddiitio
ti n s
ons aanndd aam
laccee.. meenniiti
tieess

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
MCQ

Q. Which of the following is an aspect

of HRM which deals with working
TThhaaconditions
tt''ss N
Noott Q
and amenities at
workplace? Quuiittee RRiigghhtt!
CCoorrrreecctt Ans !
Answ
weerr::

EEm
mpplo loyyeeee W Weellffaarree isis aan a
ddeeaallss w
witithh w n assppeecctt ooff HRM
woorrkkinin g
g c o n HRM w whhicichh
aatt w
woorrkkppla co nddiitio
ti n s
ons aanndd aam
laccee.. meenniiti
tieess

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
The various skills of HR professionals are as follows:

HR Dec Le a
Skil Ma is Tec
ls king ion h nica d er
s hi p
Skil l Sk Skil
ls ills ls

Let us look at each in detail.

www.ManagementStudyGuide.com
HR Skills:

HR managers are required to know how people play a role

in the organization, an advantage against the competition
as well as the policies, programs etc. Today’s HR
professional must be skilled at communicating,
negotiating and team development.

www.ManagementStudyGuide.com
Decision Making Skills:

HR managers should take a variety of decisions that affect

whether employees are qualified and motivated and
whether the organization is operating efficiently and
complying with the law. This requires knowledge of the
organization’s line of business and decisions must take
into account social and ethical implication of the
alternatives.
www.ManagementStudyGuide.com
Technical Skills:

These skills are specialized skills. In HRM, professionals

need knowledge of state-of-the-art practices in such areas
as staffing, development, rewards, organizational design
etc.

www.ManagementStudyGuide.com
Leadership Skills:

HR managers need to play a leadership role with regard to

the organization’s HR. In today’s environment, leadership
often requires helping the organization manage change.
HR professional must oversee the changes taking place to
make it a success.

www.ManagementStudyGuide.com
 Emerging HRM Functions
The following are some of the emerging HRM functions: HR managers
contribute to the
development of the
organization,
Roll your mouse realization of business
over the icon, to Business plans and
achievement of
learn more. and objectives.
Change Strategic
Champion Partner

HR managers have to
HR managers have to
be change agents, thus
serve as advocates of
requiring them to
acquire knowledge
Employee the employees. It
Advocate means that they have to
about and the ability to
create a work
execute successful
environment in which
change strategies in
the employees are
the organization.
motivated, contributing
and happy.
www.ManagementStudyGuide.com
Tip!

• Internal scans are used to identify key

movements and patterns within the
organization which may affect HR operations.
• External scans look at outside factors such as
economic conditions and the need for certain
skills which affect employment.

www.ManagementStudyGuide.com
 Difference between Personnel Management & HRM
Personnel Management is essentially ‘workforce’ centered whereas Human
Resource Management is ‘resource’ centered.

Personnel Human Resource

Management Management

Let us understand the various differences between Personnel Management and

Human Resource Management. www.ManagementStudyGuide.com
Personnel Management:

Traditionally the term personnel management

was used to refer to the set of activities
concerning the workforce which included
staffing, payroll, contractual obligations and
other administrative tasks. In this respect,
personnel management encompasses the range
of activities that are to do with managing the
workforce rather than resources. Personnel
Management is more administrative in nature.
The Personnel Manager’s main job is to ensure
that the needs of the workforce as they pertain
to their immediate concerns are taken care of.
Further, personnel managers typically played the
role of mediators between the management and
the employees and hence there was always the
feeling that personnel management was not in
tune with the objectives of the management.
www.ManagementStudyGuide.com
 Human Resource Management:

With the advent of resource centric organizations

in recent decades, it has become imperative to
put ‘people first’ as well as secure management
objectives of maximizing the ROI (Return on
Investment) on the resources. This has led to the
development of the modern HRM function which
is primarily concerned with ensuring the
fulfillment of management objectives and at the
same time ensuring that the needs of the
resources are taken care of. In this way, HRM
differs from personnel management not only in its
broader scope but also in the way in which its
mission is defined. HRM goes beyond the
administrative tasks of personnel management
and encompasses a broad vision of how
management would like the resources to
contribute to the success of the organization.
www.ManagementStudyGuide.com
 HRM Practices – Job Analysis & Job Design
There are a few key concepts involved in defining a job, which is a key role of
HRM, such as follows:

Let us look at each in detail.

www.ManagementStudyGuide.com
 s is: ra tio n,
An a ly e xplo ties,
Jo b ti c
sy st ema ponsibili
l y s is is a t h e res ork
A n a rd in g e s , w o fa
Job n dr e co
n tab ili ti
e me n t s
y a c o u u ir
stud skills, ac b i li t y req
s, a
dutie ment and ela ti ve
n v ir o n
in g t he r ilities,
e job . r min n sib
fic et e p o ob.
spec nvolves d duties, re r a given j ds
i s
i e fo n
It also nce of th onal skills a job dema
rta ti t
impo l and emo ntify wha ssess to
ca de po
physi e factors i yee must
es lo
All th at an emp uctively.
h d
and w a job pro
rm
perfo

www.ManagementStudyGuide.com
 : e d d ata
ip tio n -r ela t
e sc r i c j o b nd
Job D l ude s
b a s
cific j o b a
tion
n i n c a s p e o r m a
sc r iptio ve r tise d e s inf a nd
d e l to a d t in c lu ng t o
Job s e fu e n t . I e p o r ti
su al ,r
that i a pool of t b location ture and
tt ra c t t le , jo a ry , na t o be
a ti m s
c h a s job , job sum and dutie in e s,
su s h
m p l oyee job, tasks ons, mac
of e ves of a g c o n diti
e d b ya it.
c ti k i n u s d in
obje e d , wor nts to be s in v olve
rm e rd
perfo d equipm and haza
an er
tools ctive work
e
prosp

www.ManagementStudyGuide.com
 atio n :
m p loyee
b S p ecific o w n a se
w ritt en
Jo n
lso k ation is a ,
is a
i fica tion s p e c ific c ati o ns
ca l,
p e c jo b a lifi y si
Job s ations. A tio n a l qu
ie n c e , ph
k i lls
i fi c u c a p e r n s
spec ent of ed v e l o f ex u n i c atio
le m s
statem qualities, al and com onsibilitie y
fic ic esp sor
speci nal, techn aj o b , r
su a l s e n
o ti o e rfo rm r u n u lt h,
em d to p d o t h e
ra lh e a
o ry,
ir e a n n e m
requ d in a job cludes ge t u d e , me y,
e in pti ilit
involv ds. It also lligence, a otional ab
n te m
dema health, in ip skills, e nd ethics,
al sh a
ment nt, leader lity, values
e bi
judgm bility, flexi vity, etc.
a ti
adapt rs and crea
e
m an n
www.ManagementStudyGuide.com
 n: d is t he
o b De si g
a l y s i s an t
J
s jo b an It aims a
fo ll o w ly s i s. e s a nd
d e sign jo b a na s k s , duti r k for
J ob aft e r ing t a o
of w t also
s t e p g a n iz u n i t
next g a n d or a s i ngle jectives. I
t l in i n s in to i n o b p s t h at
ou si b ilitie f c e rta o n shi b.
s p o n e n t o re l a ti a in jo
re
c h i e vem hods and of a cert
the a s the met e success a t , h ow
lin e r t h t h e wh t a sks
o u t tial f o t o f th e
s s e n it re fers d e r o
are e ler terms nd the or
p a
In sim how many
,
much b/s.
jo
for a

www.ManagementStudyGuide.com
 HRM Practices – Training and Development

Training is a planned effort to

facilitate the learning of job-
related skills, knowledge and
behavior by employees.

Development is the
acquisition of knowledge,
skills and behaviors that
improve an employee’s ability
to meet changes in job
requirements.

www.ManagementStudyGuide.com
 The following considerations need to be taken into account when an HR
professional tries to assess the training and development needs of the
employees of an organization:

Spontaneous, unplanned
training or Systematic,
planned training Focus on current job
skills or future job skills

Train few employees or

Train all employees Individual orientation or
Group orientation
www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
HRM and Performance Management

• Performance Management is the

process of reviewing an employee’s
performance during the preceding
year or cycle and deciding where he
or she stands as far as their peers in
the same band are concerned.

www.ManagementStudyGuide.com
• Hence, Performance Management is
all about the process of reviewing
results, arriving at a rating and then
deciding upon the bonus or salary
hike.

www.ManagementStudyGuide.com
 Typically, the process of The appraisal cycle
performance management can be half-yearly
starts a month or two or yearly
before the appraisal cycle depending upon
ends. the policies of
the
organization.

In the same
vein, it can
be half-
yearly as
Further, the appraisal cycle can be based
well.
on the calendar year or the financial year i.e.
it can run from January to December of the same
year or April to March of the following year.
www.ManagementStudyGuide.com
Appraisal Process
There are different rounds to the appraisal process.

Let us look at each round in detail.

www.ManagementStudyGuide.com
In the first round, the people who participate in an employee’s appraisal
are the employee and his manager. In this round, the manager gives a
frank assessment of the employee’s performance after giving a chance to
the employee to self-assess himself.

www.ManagementStudyGuide.com
The second round consists of the ratings from the manager and the
manager’s manager. This round is mostly about deciding the band in
which the employee falls post the rating and in comparison with his or
her peers. This process of rationalizing the employee’s performance with
others is called ‘normalization’.

www.ManagementStudyGuide.com
 Roll your mouse
over the icon, to
learn more.

In some organizations, this takes place in the third round where the HR
manager is involved as well. In any case, the ratings cannot be decided
without the HR manager’s assent to the same. Once these rounds are
over, the bonus level or the salary hike are decided.

www.ManagementStudyGuide.com
Did You Know?

It has been found that the performance

management process as it exists in many
organizations leaves a lot to be desired. In fact,
surveys and studies have found that the majority
of employee’s who quit organizations do so
because of differences over their ratings. In other
words, attrition is in many cases a direct
consequence of the way in which the
performance management process is managed.
This happens because personal biases and
prejudices affect the process, in many cases, if
the manager and the employee do not see eye to
eye on many issues, the appraisal and the ratings
are the place where this difference of opinion
comes out into the open.
www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 o f any
e b l o o d e d s to
h e li f o nn e
a r e t n iz a ti a nd
o p le o r g a b e r
Pe
n. E v ery l e o f cali h a t an
o
izati with peo p t
ople cess.
rga n f p e
o
sta ff ed e k i n do it s suc
be c e, th critical t o ies
. H e n is t ra t e g
e
mettl ation hires he hiring s ake on
iz ,t t
organ is respect anizations petitive
In th ed by org ay ’s com
follow nce in tod ronment.
i ne vi
prom usiness en
b

www.ManagementStudyGuide.com
 Hiring can take place in many ways and at many levels such as follows:
Hiring can be for entry level positions or ‘lateral’ hiring where people with
experience are taken on board.

Further, hiring people can be based on competitive exams (entry level) and
the personal approach favored by HR managers for senior level positions.
In recent times, hiring for the entry level has taken on an entirely new
dimension with the campus recruitment procedures that rely on getting the
best talent available from the campuses.
The other way of hiring is through selective approach where the Staffing
department entrusts the placement consultants with the task of identifying
potential employees by picking ‘profiles’ from employee databases and the
consultants own database as well.
The most niche hiring takes place at senior levels where the essence is
discreetness and hence dedicated consultants or HR professionals approach
people at higher levels on a one-one basis.

Hence, different hiring strategies are used for different levels in the organization.
www.ManagementStudyGuide.com
 Components of Hiring Process

INTERVI
EW
Whatever is the hiring strategy deployed, the essential components of the
process remain more or less the same. These include choosing from the
available candidates, taking a decision as to the pay and perks, making an
offer and finally, getting them ‘on board’. The hiring process ranges from
less than a month or so to drawn out affairs for niche placement. The
strategic imperatives that underpin hiring depend on the ability of the
organization to effectively leverage its reputation, flexibility in the roles
that are available, availability of skilled resources and finally, the package
that the organization is willing to offer.
www.ManagementStudyGuide.com
The term ‘fitment’ is often used as HR jargon which is all
about whether a particular person is suitable for the role
HIRED
that is being filled and how well he or she ‘fits’ the job
profile. One of the reasons for attrition in organizations is
the fact that many employees join an organization with a
set of assumptions about their role only to have their hopes
dashed in reality. Hence, in recent times, industry experts
have focused on this aspect of ensuring that people are
hired only if they are of the right fit. Therefore, hiring
people is a key component of a company’s internal strategy
and hence something that needs detailed attention and
focus.

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 Retention Strategies

Any employee retention strategy would necessarily include a plan for

redressing employee grievances and ways and means to address employee
issues. This would mean that the employees are able to convey their issues
regarding pay, their work, their role etc. to the HR manager for each
division and expect to get a fair hearing in the process. There should be a
plan where the HR manager works in conjunction with the grieved
employee’s manager towards resolving the issue.
www.ManagementStudyGuide.com
 Components of a Retention Strategy
There are various components that make up a retention strategy such as
follows:

Job Rotation

Grievance Redressal

Mitigating Job Dissatisfaction

Let us look at each element.

www.ManagementStudyGuide.com
Job One of the most common retention
Job Rotation
Rotation
strategies is ‘job rotation’. Job rotation is the
practice of moving the employees around
different functions of the organization with a
clear emphasis on making sure that they
Grievance Redressal operate in domains other than the ones
assigned to them initially. This ensures that
the employees get trained on competencies
Mitigating Job beyond that of their assigned role and this
Dissatisfaction would lead to greater motivation to pick up
additional skills and motivate them to
perform better.

www.ManagementStudyGuide.com
Job Rotation

Grievance Redressal
Redressal Grievance redressal is the most critical and
Grievance crucial component of the HRM plan as
research has shown that an employee with
pending issues awaiting resolution is twice
Mitigating Job more likely to quit the company than the
Dissatisfaction other employees. Hence, all efforts must be
made to redress the grievances of the
employees.

www.ManagementStudyGuide.com
 Job Rotation
Therefore, an effective retention strategy would focus on preventing as well as
addressing grievances. Though it is not the contention that all grievances can be
prevented, they can be ‘pre-empted’Grievance
by activelyredressal
listeningistothe
themost
employees from
critical and
Grievance Redressal
timeGrievance Redressal
to time. This strategy of ‘listening’ to the
crucial employees
component of would
the HRM revolve around
plan as
a concept of ‘one-one’ meetings between thehas
research employees
shown thatandan theemployee
manager withand
employees and the HR representative for theissues
pending unit orawaiting
division.resolution
The aim ofis such
twice
regular ‘one-one’
Mitigating Job meetings would bemore to identify potential
likely to quit thecauses
company of friction
than the
among the employees and any issuesother
Dissatisfaction theyemployees.
may have vis-à-vis
Hence, their job and
all efforts must be
benefits. These issues need to be brought
made out into thethe
to redress open before they
grievances of thebecome
contentious which may cause the employee to feel frustrated and quit the job.
employees.
Hence, all efforts must be made to identify sources of employee dissatisfaction
and ‘hygiene factors’ that must be taken care of for proper functioning of the
employees.
www.ManagementStudyGuide.com
 Management theorists often emphasize the
fact that one of the reasons for low employee
morale in organizations is the fact that
Job Rotation employees often feel alienated and cut off
from the larger purpose. Employees feel that
they are a part of an impersonal setup and
perceive themselves to be unable to make a
Grievance Redressal difference to the whole unit. Hence, there is a
need to involve the employees in the larger
picture and provide them with perspective on
the bigger picture. Hence, there should be
Mitigating Job
effective strategies like job rotation,
Dissatisfaction
interaction with other units, timely
promotions and cross functional teams
wherein the employees would feel themselves
to be contributing to the larger goal of the
company.
www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
Human Resource Planning
• Human Resource Planning is the process including forecasting,
developing and controlling by which a firm ensures that it has the
right number of people, at the right place, at the right time doing
work for which they are economically most useful.
• Forecasting future workforce requirements, either in terms of
mathematical projections of economic trends and industrial
development or through judgmental estimates based upon specific
future plans of the company.

• Making an inventory of the existing man power resources and

analyzing the degree to which these resources are employed.

• Anticipating workforce problems by projecting present resources into

the future and comparing them with the forecast of requirements, to
determine their adequacy, both quantitatively and qualitatively
• Planning the necessary programs of recruitment, selection, training,
deployment, utilization, transfer, promotion, development,
motivation and compensation so that future workforce requirements
will be met.
www.ManagementStudyGuide.com
 HR Planning Process

Forecasts of Labor Demand Forecasts of Labor Supply

Forecasts of Labor Surplus

or Shortage

Goal Setting and Strategic

Planning

Program Implementation
and Evaluation
www.ManagementStudyGuide.com
 MCQ

Q. Which of the following is NOT a

part of 'Human Resource
Planning‘?

Click on the
radio button
to select the
correct
answer!
www.ManagementStudyGuide.com
MCQ

Q. Which of the following is NOT a

part of 'Human Resource
Planning‘?
GGoooodd!! TThat
hat''ss RRiigghhtt!!
CCoorrrreecctt Ans
Answweerr::

RReem
muunneerraatitioonn and
NNOOTT aa ppart and BBeenneefifitts Ad
s Admmin ist
art ooff 'H man RReessoouurce Pinistrraatitioonn iiss
'Huum a n
rce Pllaannnniinng'.
g'.

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
MCQ

Q. Which of the following is NOT a

part of 'Human Resource
Planning‘?
TThhaatt''ss N
Noott Q
Quuiittee RRiigghhtt!
CCoorrrreecctt Ans !
Answweerr::

RReem
muunneerraatitioonn and
NNOOTT aa ppart and BBeenneefifitts Ad
s Admmin ist
art ooff 'H man RReessoouurce Pinistrraatitioonn iiss
'Huum a n
rce Pllaannnniinng'.
g'.

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
 Training Administration
The following are the various kinds of training provided to employees:

1 Induction Training

2 Supervisory Training

3 Technical Training

4 Management Development

Let us look at each in detail.

www.ManagementStudyGuide.com
 1 Induction
InductionTraining
Training
Induction Training is where
Supervisory Training the new recruit is
2
introduced to the
3 Technical Training organization, condition of
services, rules of behavior
4 Management Development etc. In addition, it is also
given to familiarize a new
entrant with the job.

Let us look at each in detail.

www.ManagementStudyGuide.com
 1 Induction Training

2 SupervisoryTraining
Supervisory Training In Supervisory Training,
2
supervisors are trained for
3 Technical Training technical skills, leadership
qualities, for handling
4 Management Development machines and men.

Let us look at each in detail.

www.ManagementStudyGuide.com
 1 Induction Training

2 Supervisory Training This type of training program

helps in inducting new
3 Technical
TechnicalTraining
Training entrants to the operational
requirements of the unit and
4 Management Development in improving the skills of
existing employees for
promotions etc.

Let us look at each in detail.

www.ManagementStudyGuide.com
1 Induction Training

This type of training is for

2 Supervisory Training
existing and future
managers. These training
3 Technical Training
programs emphasize
attitude and values,
44 ManagementDevelopment
Management Development
conceptual knowledge,
analytical abilities and
decision-making skills. The
purpose is to equip
personnel for management
roles.

www.ManagementStudyGuide.com
Direct Compensation

Basic Salary

House Rent Medical

Allowance Reimbursement

Special
Conveyance
Allowances

Leave Travel
Bonus
Allowance
www.ManagementStudyGuide.com
Indirect Compensation

Leave Policy

Flexible Timings Overtime Policy

Retirement
Hospitalization
Benefits

Holiday Homes Insurance

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 Managing Employee’s Performance
Solid Performers Misdirected Effort
• Reward good performance • Coaching
HIGH

• Identify development • Performance feedback

opportunities • Goal setting
• Provide honest, direct • Training and assignment
feedback for skill development
MOTIVATION

• Restructured job assignment

Under-utilizers Deadwood
• Give honest, direct feedback • Withholding pay increases
• Provide counseling • Demotion
• Use team building and • Outplacement
conflict resolution • Firing
LOW

• Link rewards to performance • Specific, direct feedback on

outcomes performance

HIGH LOW
ABILITY
www.ManagementStudyGuide.com
Job Enrichment
Work is often seen as a means to gratify the inner desires of actualization and
satisfaction. Job Enrichment (JE) is an attempt in this direction. The characteristics
identified as constituting Job Enrichment are:

The degree to which a job

has an impact on the lives
and work of other people
Task
Significance

Skill Variety Task Identity

The degree to which a job The degree to which a job

involves a number of skills requires completion of a
in carrying it out ‘whole’ and ‘identifiable’
www.ManagementStudyGuide.com piece of work
 Job Enrichment

The degree to which a work requires

working closely with other people The degree to which a job
provides freedom,
Autonomy independence and
discretion to the
employees
in scheduling and
determining the work
Dealing with Feedback
Others from Job

The degree to which the

Feedback
employee receives clear
from Others
feedback from
supervisors and co- The degree to which the job itself
workers provides direct information of how
effective the performance is
www.ManagementStudyGuide.com
 Inputs Required for HRM
HRM requires large amounts of detailed information and much of the efforts of
human resource professionals are devoted to obtaining this information. This
information includes the following:

1 5
Duties and
2 4 Current
responsibilities productivity of

3
of every job in human
the resources
organization Skills possessed Future human
by each resource needs
employee of the
organization
Identification of
training needs

www.ManagementStudyGuide.com
Job Satisfaction and Organizational Objectives
The following are the job factors that result in successful performance of jobs by
employees:
• Sense of challenge and worthwhile accomplishment

• Opportunity for personal growth and development

• Opportunity for taking initiative

• Superior’s appreciation for good work

• Decision making authority

• Opportunity for promotion

• Job freedom
www.ManagementStudyGuide.com
• Opportunity to influence superior’s decisions

• Social prestige of organization

• Considerate and helpful boss

• Congenial colleagues

• Opportunity to serve society

• Job security

• Pay, allowances and other perquisites

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 Management of Contractors

• In recent times, there has been a marked

movement towards outsourcing positions
within the organization to vendors who
would supply resources for the required
jobs.
• These positions and roles are deemed to be
those that can be performed by external
resources.
• The contractors step in to do the job that
has been outsourced.
• The phenomenon of using contractors for
regular positions is becoming popular and it
is common to see many of these temporary
workers doing the work that would have
otherwise been done by full time
employees of the organization.

www.ManagementStudyGuide.com
 Managing the Vendors

Some issues that need to be considered before hiring contractors pertain to the
way in which the liability arising out of non-performance of the contractors is
handled, the extent of control that the managers have over vendors and the
payment terms and conditions that organizations have with the vendors. It has
been found in studies and surveys that contractors and vendors operate in the
‘grey’ areas of the employer-employee relationship and hence managers need
to be on their guard when dealing with vendors. Liabilities and punitive actions
aimed at vendors usually end up being unresolved because of the way in which
the contracts are worded. Hence, it becomes imperative for the organizations
to be diligent before hiring vendors.
www.ManagementStudyGuide.com
The practice of hiring vendors has
greatly increased and hence there
is a need for both sides to sit
down and discuss the modalities
of the contractual relationship
before committing themselves to
the same.

In this way, disputes over

responsibility and accountability
can be amicably resolved if the
contracts are worded in such a
way that there is little room for
ambiguity.

www.ManagementStudyGuide.com
Benefits of Hiring Contractors

• Till recently, the practice

of hiring contractors or
‘temps’ was restricted to
the administrative and
support functions like
HR and infrastructure
management.

• However, due to its

various benefits, it now
encompasses the areas
of regular work like
project delivery and
execution.
www.ManagementStudyGuide.com
There are various benefits of using contractors such as follows:
Less overheads to filling a temporary demand
that does not need hiring permanent
employees

The organization need not provide

health benefits and pension benefits to
the contractors and hence these costs
can be saved.
On completion of the project, the
contractors can be reverted to their parent
organization or the vendor or relieved in
case of independent contractors.

The organization hiring the contractor is

not burdened with excess staff once the
www.ManagementStudyGuide.com
project is completed
 Issues with Hiring Contractors
• There are several issues that pertain to hiring and management of contractors.

• Many IT companies hold significant ‘bench’ strength as a means of having a

buffer when new projects come their way.
• These ‘bench’ employees are reserve employees who have been hired for
upcoming projects and are kept on ‘bench’ or kept idle till they can be placed in
a project.

• However, for many mid-sized and small-sized organizations, maintaining bench

strength is often a luxury.

• So, if they anticipate new projects coming their way, they immediately ask the
vendor to supply them with the resources that are needed for the new
projects.
• Of course, in reality, there is often a lag between the request for new
resources and the resources actually coming on board because of the time
taken to screen the contractors and time taken to bring them up to speed
regarding the work that needs to be done.
www.ManagementStudyGuide.com
Real Life Example

Let us now look at an

example to
understand the
relevance of hiring
contractors.

www.ManagementStudyGuide.com
 Globus Inc. is a leading
software giant.

The Human
Resource
department has
noticed that
majority of its
projects are about
It handles several two to three
projects in a year months long.
while catering to its
numerous clients
spread across the
Also, they receive projects
globe.
which require resources of
different skills from one
project to another.
www.ManagementStudyGuide.com
 Globus has recently acquired two
different projects, one for developing
a Java based software and another
for developing and installation of a
SAP based system.

Let us see how the

HR department
handles such
staffing pressures.
How can the HR
cater to the varying
needs of different
projects while keeping
the recruitment and
overhead costs low? The HR department has used a policy
of hiring independent contractors to
fulfill such short term projects.
www.ManagementStudyGuide.com
 Such independent contractors
are chosen as per the skill sets
required for each project.

By using
contractors instead
of full-time
employees, the HR
is able to cater to
the requirement of
different skilled
resources for each
Also, when the project.
project is completed,
the contract with the
contractor is
terminated.
The cost of recruitment and overhead
costs such as, conveyance, perks, PF,
Gratuity etc. are saved by using
contractors to complete the projects.
www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 Strategic Human Resource Management

The aim of Strategic

Human Resource
Strategic Human Resource
Management (SHRM) is to
Management is the practice of
ensure that HR strategy is
aligning business strategy with
not a means but an end in
that of HR practices to achieve
itself as far as business
the strategic goals of the
objectives are concerned.
organization.

The idea behind SHRM is that companies

must ‘fit’ their HR strategy within the
framework of overall business objectives
and hence ensure that there is alignment
between the HR practices and the
strategic objectives of the organization.

www.ManagementStudyGuide.com
• With the advent of new economy industries
like IT and the mushrooming of the service
sector, organizations all over the world
realized that human resources must be
viewed as a source of competitive advantage
as opposed to treating it much the same way
in access to technology or capital is
concerned.
• What this means is that the practice of HRM
is being viewed as something that promotes
the business objectives of the firms and not
merely another factor in the way the firm is
managed.
• The fact that organizations derive their
strategy from employees instead of imposing
strategy upon them is the essence of SHRM.

www.ManagementStudyGuide.com
With the advent of today’s economy where services account for a major
share of the GDP and the fact that the service sector is essentially people
centric, it is imperative that the people first approach be embraced by the
organizations for sustainable business strategy. The practice of SHRM
demands a proactive and hands on approach by the management as well
as the HR department with regards to the entire gamut of activities
ranging from staffing and training and development to mentoring and pay
and performance management.
www.ManagementStudyGuide.com
 How SHRM Works?
s in r e c e nt times
a n y o rg anization e m a n agers’
M ted peo p l
hav e ‘d e d ic a
s t o l o o k after
e s ol e fu nction i of t h e
whos f ul fi llin g
he e n a b l ing and rces.
t t h e re s o u
n e e d s of

For instan
ce, Infosys
are its ass states tha k e d ch a n ge from
t people ar
statement
ets and th
e famous This is a m eople as just
one of the
by Mr. Nar
aya treating p n g p e ople as
founders o na Murthy, to tre ati
f the comp resources
that the ca
pital of Inf any assets.
every mor o s
ning and w ys walks in
evening h alks out ev
as to be ta ery
ken in this
context.
www.ManagementStudyGuide.com
 •

Hence, it is crucial that an This translates into a dedicated HR

organization should leverage department and people managers
upon the capabilities of its in every group dealing exclusively
employed people and ensure with employee issues as opposed
that the ‘human capital’ is to treating this as a line
nourished and nurtured as a management function.
source of competitive
advantage.

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 What is Global Human Resource Management?
With the advent of globalization, organizations - big or small have ceased
to be local; they have become global. This has increased the workforce
diversity and given rise to cultural sensitivities. This globalization of
organizations and its workforce led to the development of Global Human
Resource Management.

www.ManagementStudyGuide.com
Even those organizations who consider
themselves immune to transactions across
geographical boundaries are connected to
the wider network globally. There is
interdependence between organizations in
various areas and functions.

The preliminary function of ‘Global

Human Resource Management’ is that the
organization carries a local appeal in the
host country despite maintaining an
international feel. To exemplify, any
multinational / international company
would not like to be called as local,
however, the same wants to have a
domestic touch for the people in the host
country and therein lays the challenge.
www.ManagementStudyGuide.com
 Objectives of Global Human Resource Management
The objectives of global HRM are as follows:

Generating awareness of
cross cultural sensitivities
among managers globally
and hiring of staff across
Create a local geographic boundaries. Training upon cultures
appeal without and sensitivities of the
compromising upon host country.
the global identity.

www.ManagementStudyGuide.com
 Global Human Resource Management

The strategic role of Human Resources Management in a global

scenario is to ensure that HRM policies are in tandem with and in
support of the firm’s strategy, structure and controls. Specifically,
when we talk of structures and controls the following become worth
mentioning in the context of Global HRM.
www.ManagementStudyGuide.com
 Global Human Resource Management

Many integrating
mechanisms operate Integrating
simultaneously.
Mechanisms

There is a certain A high degree

degree of Co-ordination of coordination
centralization of is required in
operating decision wake of the
making. Compare cross cultural
this to the sensitivities. In
International addition, there
strategy, the core is also a high
Decision
competencies are need for
centralized and the
Making
cultural control.
rest are
decentralized. www.ManagementStudyGuide.com
Real Life Example

Let us now look at an

example to
understand global
human resource
management.

www.ManagementStudyGuide.com
• Burger giant McDonald’s Corp. is one of the largest
restaurant chains in the world.

• It has a widespread presence across the globe

including India.

• McDonald’s is well-known for its hamburgers made

with ground beef, French fries, and milk shakes.

www.ManagementStudyGuide.com
• However, in markets across the world, McDonald’s
respects local cultures and has adopted its menu and
dining experience to local preferences.

Men • So, McDonald’s has varied its menu to accommodate

the tastes and cultural sensibilities of residents in
u countries around the world.

• In India, McDonald’s restaurants have dropped beef

and pork from their menu in keeping with the
sentiments and religious practices of Hindus and
Muslims.

• Also, the kitchens of McDonald’s in India are divided

into separate sections for cooking vegetarian and non-
vegetarian food.
www.ManagementStudyGuide.com
• McDonald’s has always maintained a strong
localization policy while at the same time maintaining
its international brand image and flavor across the
globe.

• McDonald’s has also embraced a policy of hiring local

talent at various levels to promote localization of its
presence.

• The large success of McDonald’s is attributed to its

ability to cater to local tastes without losing its brand
image.

• In India, some of its American classics have been

introduced in numerous vegetarian versions like the
McVeggie burger and McSpicy Paneer, as well as
chicken offerings.
www.ManagementStudyGuide.com
 Global HRM and the Staffing Policy

The role of staffing is still the same here, that is, hiring individuals with
requisite skills to do a particular job. The challenge here is developing
tools to promote a corporate culture that is almost the same everywhere
except that the local sensitivities are taken care of.

A key challenge faced in hiring is deciding upon the top management or

key positions. Whether to choose a local from the host country for a key
position or deploy one from the headquarters assumes importance; and
finally whether or not to have a uniform hiring policy globally remains a
big challenge.
www.ManagementStudyGuide.com
 An organization can choose to hire according to any of the staffing policies
mentioned below: Roll your mouse over
the icon, to learn more.

Ethnocentric: Polycentric: Geocentric:

In ethnocentric In polycentric staffing In this staffing policy,
staffing policy, the policy, the host the best and the
‘Key’ management country nationals most competent
positions are filled by manage subsidiaries individuals hold key
the parent country whereas the positions irrespective
individuals. headquarter positions of the nationalities.
are held by the parent
company nationals.
www.ManagementStudyGuide.com
Tip!

Geocentric staffing policy seems to be the best

when it comes to Global HRM. The human
resources are deployed productively and it also
helps build a strong cultural and informal
management network. The flip side is that human
resources become a bit expensive when hired on a
geocentric basis. Besides the national immigration
policies may limit implementation.

www.ManagementStudyGuide.com
 MCQ

Q. In which of the following staffing

policies do the host country
nationals manage subsidiaries
whereas the headquarter positions
are held by the parent company
nationals?

Click on the
radio button
to select the
correct
answer!
www.ManagementStudyGuide.com
MCQ

Q. In which of the following staffing

policies do the host country
nationals manage subsidiaries
GG oooodd!! TThhaat's
whereas 's RRiigghhtt!! positions
the theadquarter
CCare
oorrrreeheld
cctt AAnby the parent company
nssw
weerr::
nationals?

In
In ppoolylycceennttrricic ssttaaffin
nnaatitioonnaals m ffingg ppoollicicyy,, the
ls maannaaggee ssubs the hhoosstt ccoountr
hheeaaddqquuarte ubsiiddiaia rriie
e untryy
arterr ppoossiti ss w h e
wherreeaass tthhe
ccoom itioonnss a re
are hheeld e
mppaannyy nnaatitiona ld bbyy tthhee ppare
onalsls.. arenntt

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
MCQ

Q. In which of the following staffing

policies do the host country
TTnationals
hhaatt''ss N manage subsidiaries
oott Q
whereasNthe Quuiittee RRiigghhttpositions
headquarter
!!
CCare
oorrrreeheld by
cctt AAnnsswthe parent company
wer:
nationals? er:

In
In ppoolylycceennttrricic ssttaaffin
nnaatitioonnaals m ffingg ppoollicicyy,, the
ls maannaaggee ssubs the hhoosstt ccoountr
hheeaaddqquuarte ubsiiddiia
arriieess w untryy
arterr ppoossiti h e
wherreeaass tthhe
ccoom itioonnss a re
are hheeld e
mppaannyy nnaatitiona ld bbyy tthhee ppare
onalsls.. arenntt

l ic k h ere to
C
!
continue

www.ManagementStudyGuide.com
 Issues affecting HRM
The following are some of the key issues faced during HRM:

Mergers
International
& Reengineering
Expansion
Acquisitions

Total Quality
Down-sizing Outsourcing Management

www.ManagementStudyGuide.com
 Improving HRM
Once a strategic decision has been established and HRM’s effectiveness
evaluated, leaders of HRM function can explore how to improve its effectiveness
in contributing to the firm’s competitiveness
Transformational (5-15%)
• Strategic Redirection and Renewal
• Cultural Change
• Management Development

Traditional (15-30%)
• Recruitment, Selection, Training & Employee Relation
• Performance Management and Compensation
Transactional (65-75%)
• Benefits Administration & Employee Services
• Record Keeping

Process Redesign, Information Technology

Outsourcing

www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 Human Resource Information System (HRIS)
One of the significant and emerging
areas in Human Resource
Management is the Human Resource
Information System (HRIS). Today,
organizations need accurate and
timely information to take human
resource decisions. The speed, with
which information is retrieved,
procured and analyzed for decision
making accounts for the efficiency of
an organization. HRIS is a systematic
way of sorting data and information
for each individual employee, to aid
in planning, decision making and
submitting reports to other
departments. HRIS is defined as
composite database, computer
applications and hardware and
software that are used to collect,
record, store, manage, deliver and
manipulate data for Human Resource
Management. www.ManagementStudyGuide.com
Objective
Explain What is Human Resource Management (HRM)
Define Human Resource Management
Explain the Scope of Human Resource Management
Describe the Processes in Human Resource Management
Explain the Skills of HR Professionals
Explain Role of HRM in Performance Management
Explain the Hiring Strategies followed by Organizations
Describe the Various Retention Strategies
Explain Human Resource Planning
Explain How HRM Manages Employee’s Performance
Explain the Management of Contractors
Explain What is Strategic Human Resource Management
Explain What is Global Human Resource Management
Explain What is Human Resource Information System
List the Tips for Effective HRM
www.ManagementStudyGuide.com
 Tips for Effective HRM

Change management
Top leader sponsorship Correspondence with and communication
and buy-in stakeholder strategy

Stay focused on the Comply with Employees and top Address

needs of the company strategy management’s issues and
business involvement in issues
company’s relating to
development resistance to
change

www.ManagementStudyGuide.com
Practice

Let us now practice all

that you have learned
about introduction to
human resource
management.

www.ManagementStudyGuide.com
Practice

Observe the Human Resource

people of your organization. Note
down the following observations:

• What are the different roles

that the HR people of your
organization perform?
• What are the characteristics
of HR people that make them
effective in their jobs?
• How has the presence of an
HR department helped you in
your employment?

www.ManagementStudyGuide.com
Case Study

Keith
Keith Jones
Jones isis aa Human
Human
Resource
Resource Manager.
Manager. He He has
has
noticed
noticed that
that many
many teamteam 1.
1. What
What do
do you
you think
think Keith
Keith
members
members under
under the the leadership
leadership should
should do
do to
to help
help
of
of David
David Schindler
Schindler areare facing
facing David’s
David’s team
team members?
members?
problems
problems regarding
regarding his his
dominant
dominant attitude,
attitude, rudeness
rudeness 2.
2. How
How can
can Keith
Keith help
help
and
and authoritarian
authoritarian approach.
approach. David
David get
get close
close with
with his
his
Some
Some of of David’s
David’s team
team members
members team
team and
and resolve
resolve the
the
have
have even
even approached
approached Keith Keith issue?
issue?
with
with aa request
request to to change
change their
their
teams.
teams.

www.ManagementStudyGuide.com
ManagementStudyGuide.co
m Congratulations, you have completed the course on – Human
Congratulations, you have completed the course on – Human
Resource
Resource Management.
Management.
Become
Become aa Management
Management Study
Study Guide
Guide Premium
Premium Member
Member and
and
Get
Get Access
Access toto more
more than
than 180
180 courses.
courses.
New
New Courses
Courses Added
Added Every
Every Week.
Week.

www.ManagementStudyGuide.com