Human Resource Management

Delivered at

Taksila Business School

Greater Noida
On
February 02, 2010
Learning Objective
 Understand the meaning, significance and Objectives of
Human Resource Management
 Trace the evolution of Human Resource Management
 Understand the Principles of HRM
 Appreciate the key Functions and Activities associated
with HRM
 Understand the Strategic Human Resource Management
 What is Human Resource
Management?
 Basic Definition
– ‘managing the employment relationship’

 Key Assumption
– Employees are the most important asset of the
organization
 Utilization of individuals to
achieve organizational objectives
 All managers at every level must
concern themselves with human
resource management.
Human Resource Management: Definition

…. A series of integrated decisions that form the employment

relationship.
…Is concerned with the ‘people’ dimension in management.
(acquiring, developing, motivating, etc)

HRM is a management function concerned with hiring,

motivating and maintaining people in any organization. It
focuses on people in any organization.
 Thus,

Human Resource Management is the planning, organizing,

directing, and controlling of the procurement, development,
compensation, integration, maintenance and separation of human
resources to the end that individual, organizational and social
objectives are accomplished.
Evolution of HRM : Welfare Concept

Mentioned in Kautilyas ‘Arthashastra’

Is studied as subject since 1920
The State Intervention was felt to protect the Interests of the
Workers post First World War
The Royal Commission in 1931 recommended the appointment
of Labor Welfare Officers to protect the interests of the
lobourers.
The Factories Act, 1948 ( for industrial units employing 500
or more workers)
Indian Institute of Personnel Management (IIPM), Kolkata
National Institute of Labor Management (NILM), Mumbai
The Road Ahead…

Beyond Just Welfare : “Efficiency”

During 1960s
IR and Personnel Administration integrated to be called as
Personnel Management
Massive thrust on Industrialization in the Second Five Year Plan
resulted in the shift and focus toward the professional
management of human resources.
Shift in Focus

Professionals began talking about new technologies in HRM,

Challenges in HRM
The IIPM and NILM were merged in 1980 to form National
Institute of Personnel Management (NIPM)

In 1990,

Emphasis shifted to Human Values and Productivity through

people and has been adding various dimensions to the function.
 Difference between HRM and PM

Dimension PM HRM
Employment Carefully Written Contracts Goes Beyond Contracts
Contract
Nature of Action Mere Procedures Strategic Function
Behavior Norms, Customs and practices Values, Mission
Managerial Task Monitoring Nurturing
Selection Separate Task Key Task
Pay Fixed Grades Performance Related
Job design Division of Labor Team Work
Respect for Labor is a tool which is People are treated as
employees replaceable assets of organization and
society
Shared Interests Interests of the organization are Mutuality of Interest
the uppermost
 Class Activity 1:
Based on above the differences, discuss the Objectives of HRM
HRM Objectives

1. Societal
To be ethical and socially responsible to the needs and challenges of the society.
Minimizing the negative impact of such demands on the organization.

2. Organizational
To bring organizational effectiveness. It is a means to achieve organizational goals.
The department exists to serve the rest of the organization.

3. Functional
To maintain the department’s contribution at a level appropriate to the organization’s
needs. The department’s level of services must be tailored to fit the organization it
serves.

4. Personal
To assist employees in achieving their personal goals, (so far these goals contribute to
the organization). Necessary to keep them motivated and retained.
Class Activity 2.

Areas of Practical
Lets thinks of some
Application/ Functions for all the four areas
of HRM Objectives.
 HRM Objectives Support Functions
1.Societal Objectives Legal Compliance
Labor Welfare
Union- mgmt. Relations
2.Organizational Objectives Human Resource Planning
Employee Relations (Hierarchy)
Selection
Training and Development
Appraisal
Placement
Assessment
3.Functional Objectives Appraisal
Placement
Assessment
4.Personal Objectives Training and Development
Appraisal
Placement
Compensation
Assessment
Human Resource Policies and Principles

Policies are a plan of action

Policies become benchmark to compare and evaluate performance.

Class Activity 3:
Discuss Some vital areas of Framing Personnel Policies
A few specific personnel policies are:
1.Policy of Hiring People with due respect to factors like reservations, sex, marital
status, etc.
2.Policy on terms and conditions of employment, Compensation policy and method,
hours of work, overtime, promotion, transfer, lay-off, etc.
3.Policy with regard to medical assistance, sickness benefits, ESI and Company
Medical Benefits.
4.Policy regarding Housing, Transport, Uniform and Allowances.
5.Policies regarding Training and Development- need for/ methods of/ frequency of
training and development.
6.Policies regarding industrial relations- trade union recognition, Collective
bargaining, grievance procedure, participative management and communication with
workers.

Class Activity 4:
What are the sources of Determining Such Policies ? Discuss
Sources of Determining HR Policies

1. Past practice in the organization

2. Prevailing practice in the rival company
3. Attitude and philosophy of founders of the company as also
its directors and the top management.
4. Attitude and philosophy of the Middle and Lower
Management.
5. The knowledge and experience gained from handling
countless personnel problems on a day-to-day basis.
HR Principles: The other side of the Coin
1. Principle of individual development to offer full and equal
opportunities to every employee to realize his/her full potential.
2. Principle of Scientific Selection to select the right person for
the right job
3. Principle of free flow of communication to keep all channels
of communication open and encourage upward, downward,
horizontal, formal and informal communication.
4. Principle of Participation to associate employee
representatives at every level of decision making.
5. Principle of fair remuneration to pay fair and equitable wages
and salaries commensurating to jobs.
6. Principle of Incentive to recognize and reward good
performance.
7. Principle of Dignity of Labor to treat every job and every job
holder with dignity and respect.
8. Principle of Labor Management Co-operation to promote
cordial Industrial Relations.
9. Principle of Team Spirit to promote Co-operation and Team
Spirit among employees.
10. Principle of Contribution to National Prosperity to provide a
higher purpose of work to all employees and to contribute to
national prosperity.
Human Resource Management Functions

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 FUNCTIONAL AREAS WITHIN HR

 EMPLOYMENT / STAFFING
– RECRUITMENT
– SELECTION
 TRAINING AND DEVELOPMENT
– APPRAISAL
– EDUCATION AND DEVELOPMENT
 COMPENSATION
– SALARIES, WAGES AND BENEFITS
– INCENTIVE PLANS
 EMPLOYEE RELATIONS
– GRIEVANCE RESOLUTION
– UNION RELATIONS
 HR PLANNING AND RESEARCH
– FORECASTING
– JOB ANALYSIS
 Employment / Staffing
 Staffing - Process through which organization ensures it always
has proper number of employees with appropriate skills in right
jobs at right time to achieve organizational objectives
 Job analysis - Systematic process of determining skills, duties,
and knowledge required for performing jobs in organization
 Human resource planning - Systematic process of matching the
internal and external supply of people with job openings
anticipated in the organization over a specified period of time .
 Recruitment - Process of attracting individuals on a timely
basis, in sufficient numbers, and with appropriate qualifications,
to apply for jobs with an organization
 Selection - Process of choosing from a group of applicants the
individual best suited for a particular position and the
organization.
 Training and Development
 Training - Designed to provide learners with knowledge and skills
needed for their present jobs
 Development - Involves learning that goes beyond today's job; it has
more long-term focus
 Career development - Formal approach used by organization to ensure
that people with proper qualifications and experiences are available
when needed
 Organization development - Planned process of improving
organization by developing its structures, systems, and processes to
improve effectiveness and achieving desired goals
 Performance management - Goal-oriented process directed toward
ensuring organizational processes are in place to maximize
productivity of employees, teams, and ultimately, the organization
 Performance appraisal - Formal system of review and evaluation of
individual or team task performance
 Compensation
 Direct Financial Compensation - Pay that person
receives in form of wages, salaries, bonuses, and
commissions.
 Indirect Financial Compensation (Benefits) - All
financial rewards not included in direct
compensation such as paid vacations, sick leave,
holidays, and medical insurance.
 Nonfinancial Compensation - Satisfaction that
person receives from job itself or from
psychological and/or physical environment in which
person works.
 Safety and Health
 Employees who work in safe environment and
enjoy good health are more likely to be productive
and yield long-term benefits to organization.

 Safety - Involves protecting employees from

injuries caused by work-related accidents
 Health - Refers to employees' freedom from
illness and their general physical and mental well
being
 Employee and Labor
Relations
 Private-sector union membership has fallen from 39
percent in 1958 to 7.8 percent in 2005.
 Business is required by law to recognize a union and
bargain with it in good faith if the firm’s employees
want the union to represent them
 Is the function of HR to control workers, or to help
them and act as their advocate?
 Resolving personnel grievances and disagreements
fairly in both union and union-free environments
Human Resource Research

 Human resource research

pervades all HR functional
areas.

 Forecasting and Planning

 Job Analysis
 Attitude Surveys
 Validation Studies
 Compensation Surveys
 Class Activity 5:
Design a Typical HR Department of a Large Organization.
 Strategic HRM

Describes what the word Strategy means and shifts its

focus on HRM at a strategic level highlighting its
importance in the present day organizations.

Highlights what best practices (as a result of strategic

planning) the organizations can adopt that would ensure
them of success.
What are Strategies?

Strategies are broad statements that set a direction.

Strategies are a specific, measurable, obtainable set of plans

carefully developed with involvement by an institution's
stakeholders.

These action statements are linked to an individual or

individuals who are accountable and empowered to achieve
the stated result in a specific desired timeframe.

They are patterns of action, decisions, and policies that guide

a group toward a vision or goals.
Strategic human resource management (SHRM)

'a human resource system that is tailored to the

demands of the business strategy'

'the pattern of planned human resource activities

intended to enable an organization to achieve its
goals'
Strategic human resource management (SHRM) is
a concept that integrates traditional human
resource management activities within a firm's
overall strategic planning and implementation.

SHRM integrates human resource considerations

with other physical, financial, and technological
resources in the setting of goals and solving
complex organizational problems.

It is concerned with longer-term people issues

and macro-concerns about structure, quality,
culture, values, commitment and matching
resources to future need.
It has been defined as:

All those activities affecting the behavior of

individuals in their efforts to formulate and
implement the strategic needs of business.
(SCHULER, R.S., 1992)

The pattern of planned human resource

deployments and activities intended to enable
the forms to achieve its goals. (WRIGHT, P.M.
and MCMAHAN, G.C. (1992)
Approaches of the SHRM,

•attempts to link Human Resource activities with

competency based performance measures.
•attempts  to link Human Resource activities with
business surpluses or profit.
Benefits of SHRM

1. Identifying and analyzing external opportunities and

threats that may be crucial to the company's success.
2. Provides a clear business strategy and vision for the
future.
3. To supply competitive intelligence that may be useful in
the strategic planning process.
4. To recruit, retain and motivate people.
5. To develop and retain of highly competent people.
6. To ensure that people development issues are
addressed systematically.
7. To supply information regarding the company's internal
strengths and weaknesses.
8. To meet the expectations of the customers effectively.
9. To ensure high productivity.
10. To ensure business surplus through competency.
Barriers of SHRM
1. High resistance due to lack of cooperation from the bottom line.
2. Interdepartmental conflict.
3. The commitment of the entire senior management team.
4. Plans that integrate internal resource with external requirements.
5. Limited time, money and the resources.
6. The status-quo approach of employees.
7. Fear of incompetence of senior level managers to take up 8trategic steps.
9. Diverse work-force with competitive skill sets.
10. Fear towards victimization in the wake of failtures.
11. Improper strategic assignments and leadership conflict over authority.
12. Effects for power relations.
13. Vulnerability to legislative changes.
14. Resistance that comes through the legitimate labour institutions.
15. Presence of an active labour union.
16. Rapid structural changes.
17. Economic and market pressures influenced the adoption of strategic HRM.