1-1

UNIT -1
HUMAN RESOURCE MANAGEMENT
Strategic

importance of HRM. Objectives of HRM. Challenges to HR professionals Role, Responsibilities and competencies of HR Professionals. HR deptt operations. HRP-Objectives and process HRIS

1-2

HRP-Human Resource Planning

Origin

and Evolution: 1890,Alfred Marshall stated, the head of a business must assure himself that his managers, clerks and foremen are the right men for their work and are doing their work well. Early in Industrial Mgmt: Division of labour Specialization Org of mgmt into levels Work simplification

1-3

HRP-Human Resource Planning

20th

century first part: The focus in manpower planning was on hourly production worker. World War II: Focus on employee productivity Availability of competent managerial personnel

Non technology areas and interest in behavioural aspects of work added complexities to manpower planning task.

1-4

HRP-Human Resource Planning

In

60s ,Manpower planning was viewed as the system linking the organization with its environment. Manpower Planning believed at that time that the companies forecasted their needs manpower into the future ,forecasted their internal labour supply for meeting these needs and identified the gap between what was needed and what was available.
During

late 70s, the term human resource came into picture instead of the term manpower ,in order to emphasize the positive view of personnel as a basic corporate resource.

1-5

HRP-Human Resource Planning

Thus HRP became a Staff activity in many organizations.
During

80s: Employee desire for participation in decisions that affected their work became stronger. Employer desire of better control over cost and production also became stronger. Thus companies adopted work and career mgmt practices that resulted in innovations in the field.

1-6

HRP-Human Resource Planning

In

90s,concepts like Job sharing, reduced working hours,felxibility of time, significant reshaping of work and work customs, job dsign,job enrichment,empowerment,TQM and business process reengineering.

1-7

HRP-Definition and Meaning

HRP is a process of analyzing an organizations human resource needs under changing conditions and developing the activities necessary to satisfy those needs. HRP is the process of analyzing and identifying the need for and availability of human resources ,so that the organization can meet its objectives. HRP is not merely a piece of personnel staff function, but it is a mgmt process. Its only after this, that the HRM deptt can initiate the recruitment and selection process.

1-8

HRP-Definition and Meaning

Organizational Planning-managerial activities that define Company Objectives. HRP-Provides the right type and right number of people-helps in realization of org. objectives.

1-9

Importance of HRP
The importance of HRP can be understood by identifying the role HRP plays on the following lines: Future Personnel Needs Part of strategic Planning Creating High talented personnel International strategies Foundation for personnel functions Increasing investment in HR Resistance to change and move

1-10

HRP-Process
HR planning Process
Organizational Objectives and strategies
Scan External Env. For changes affecting labor

supply

Forecasti ng

Analyze Internal Inventory of HR Capabilities

Organization al Need for prople

HR strategies and plans

Survey of people available

1-11

HRP-Process
HRP Process involves: Consider organizational objectives and strategies. Both internal n external assessments of HR needs Identifying supply source Forecasts developed Frame HR strategies Internal HR can be assessed thru HRIS.Once assessment is done forecast can be developed regarding the demand and supply for HR.Finally mgmt can formulate HR strategies to address the imbalance ,both in short as well as long term

1-12

HRP-Process
(A)What is an HR strategy? It is the means by which one can anticipate and manage the supply and demand of human resources.HR strategy provides an overall direction in which the HR activities will be developed and managed. (a)Developing HR Plan: The HR plans are guided by the organizational long term plans. Planning of the HR in any organization should be in for long period of time rather than planning for a month or even the next year. Moreover the HR plans have to be framed in line with the organizational objectives.

1-13

HRP-Process
Thus planning involves: Knowledge of strategic expansion Reduction in operations Technological changes Employee skills and knowledge level Expected vacancies from retirement, transfers and discharge. Its a roadmap for the future regarding shifting employees within organization, cutting existing employees, retaining present employees,training,framing career paths and much more.

1-14

HRP-Process
(b)Evaluating HR planning: After the plan is developed, the next step is to evaluate the plan. A successful HR plan is one that is aligned with the needs of the business over a period of time. Thus HR planning should result in the following benefits Upper mgmt should have a better view of HR dimensions of biz dimensions. HR costs is reduced. There is more time available for talent location. Better opportunities are available for future growth plans. Development of mgrs are better planned.

1-15

HRP-Process
(B)Need Forecasting Scanning of External Environment
Economic, Social and political factors Govt and legislation

Population, Markets and competition

Workforce Composition

Internal Assessment of Organizational Workforce

Auditing jobs and skills Organizational capabilities Inventory

1-16

HRP-Process
Forecasting HR supply and demand.
Forecasting Methods Forecasting Demand for HR

Forecasting Supply for HR

Managing HR surplus or shortage

Scanning of External Environment Environmental Scanning- is the process of studying the environment of the org. to pinpoint opportunities and threats. Thus external environment affects HR planning, because each org draws from the same labour market ,that supplies all other employers.

1-17

HRP-Process
1.Govt. and Legislation: Govt. rules and regulations affect HR planning.HR planning must be done by individuals who understand the legal requirements of various govt regulations, particularly the global firms. Examples: Tax legislation at local, state and federal also affect HRP.Pension provision, social security legislation may change retirement patterns and funding options. Tax structures in the country regarding employee benefits might affect HR planning. 2. Economic, Social and political factors: Recession, economic boom affect HR planning.

1-18

HRP-Process
Factors like Interest rates,inflation,economic growth affect availability of workers. Decisions on wages ,overtime,hiring.laying off workers may be affected by economic conditions. 3. Population , Markets and Competition: Other employers and competition(national/international) in the industry Employee resistance to geographical relocation. Direct competitors-underpaying and under competing. International competition.

1-19

HRP-Process
4.Workforce composition: Changes in composition of workforce, different work patterns affect HR planning. Many organizations face problems regarding expansion and contraction of workforce. Therefore the concept of flexi staffing has come up.(temporary workers, independent contractors, part time, job sharing, outsourcing) As a result ,HR can plan according, if a particular candidate can be consumed for a full time job. Thus all this issues need HR planning.

1-20

HRP-Process
Internal Assessment of Organizational Workforce The job that needs to be done and the skills required to perform that job is the next part of HR Planning. So in the internal assessment of workforce, the following points should be taken into consideration. 1.Auditing jobs and skills: The starting point for evaluation of internal strengths and weaknesses is an audit of the job currently being done in the org.On the basis of this ,it can be analyzed as to what job needs to be done in the future. The following questions can provide this data. What jobs exist now?

1-21

HRP-Process
How

many individuals are performing each job? What are the reporting relationships of jobs? How essential is each job? What are the features of anticipated job? 2.Organizational Capabilities Inventory: As HR planners get an insight of the current and future jobs, they can utilize the different databases in an org (through HRIS),that helps in identification of employee skills, knowledge and abilities. Thus can identify long term needs for recruitment, selection and HR development. It also helps in determining the additional capabilities reqd in future workforce.

1-22

HRP-Process
Components of Organizational Capabilities Inventory include individual employee demographics(age,length of service in the job),individual career progression(job held,promotion,pay rates),individual performance data(work accomplishment, growth skills) HR planners can use this data on individual employees in order to create a profile of current organizational workforce in total. It can also be useful in creating a chart ,that depicts the employee position in each deptt of the org.

1-23

HRP-Process
Forecasting HR supply and demand. On the basis of external environmental scanning and assessment of internal strengths and weaknesses,HR planner can forecast HR supply and demand in light of organizational objectives and strategies. 1.Forecasting: uses information from the past and present to identify expected future conditions. Methods for forecasting: Forecasting HR can range from Mgrs best guess to a rigorous and complex computer simulation. Forecasting is a combination of quantitative method and subjective judgment. There are numerous methods of forecasting ,

1-24

HRP-Process
Judgmental methods are as follows: Estimates-can to top-bottom or bottom to top. Simple question "how many ppl will you need next yr Rules of Thumb-rely on general guidelines applied to a specific situation within the organization. The Delphi Technique-uses input from a grp of experts whose opinions of forecasted situations are sought. These experts are then combined and returned to experts for second opinion. This process is repeated until the experts agree on a judgment. Nominal groups-It requires experts to meet face to face. Their ideas are generated independently, then discussed in grps n finally compiled in a report.

1-25

HRP-Process
Various mathematical methods that can also be used are Statistical regression analysis Simulation models Productivity ratios Staffing ratios 2. Forecasting Demand for HR: The demand for employees can be calculated on an organization-wide basis. Suppose 125 employees reqd. Then break up Marketting-45 Sales-60 HR-20

1-26

HRP-Process
So after this break up ,it becomes easy for the HR planner to forecast the demand. Vacancies that are likely to be generated coz of retirement,promotion,termination can also act as a basis for forecasting. Thus planners should study the chain effect that occurs due to these changes, which will help decide the number and type of resources reqd in future. 3.Forecasting Supply for HR: After forecasting the HR needs is done, the next step is to analyze the availability of the same. It includes both EXTERNAL SUPPLY INTERNAL SUPPLY

1-27

HRP-Process
EXTERNAL SUPPLY: Individuals entering and leaving the workforce Individuals graduating from schools and colleges Changing workforce composition Economic forecasts for next few years Govt regulations Competing employers behavior. INTERNAL SUPPLY: Employees moving coz of promotion,demotion,lateral moves,transfers,training,retirement. Succession plans, replacement charts-identify back ups

1-28

HRP-Process
Managing HR surplus or shortage: Planning is of little value if no subsequent action is taken. The action taken totally depends on the HR surplus or shortage. Work reduction and WARN ACT: Workers are laid off due to mergers,acquisitions,downsizing.A law called Worker Adjustment and Retraining Notification(WARN act) has come up that sets guidelines for employee benefits.(example-provide employee with 60 days notice before layoff).This act also imposes a fin on employers who do not follow reqd process of giving notice

1-29

HRP-Process
Workforce Realignment: Downsizing or rightsizing involves job reductions based on a desire to operate more efficiently even when demand is strong. Lay off is generally in terms of shortage of demand of products. Downsizing generates lower costs in shorter times. But it can lead to demoralized people, law suits and need for more security. Effect of mergers and acquisitions

1-30

HRP-Process
Downsizing Approaches: Attrition and hiring freezes: Early Retirement Buyouts Layoffs

1-31

HR Evaluation-Process
ORGANIZATIONAL GOALS

HR GOALS

HR EFEORTS TO MEET GOALS

OUTCOME MEASUREMENT COMPARE performance to Measurable standards

1-32

HR Evaluation-Process
HR EFFICIENCY

ORGANIZATIONAL EFFECTIVENESS

1-33

HRIS-Human Resource Information system

What

is HRIS? Purpose of HRIS? Applications of HRIS Functional components of HRIS Steps in maintaining in HRIS Benefits Limitations

1-34

HRIS-Human Resource Information system What is HRIS? Human resource Depts. require large amount of detailed information. The quality of PM deptt depends on the quality of information held by it. Information requirements may include: Duties and responsibilities of every job in the organization Skills possessed by every employee Organizations future HR needs Current productivity of HR Identification of training needs.

1-35

HRIS-Human Resource Information system Acquisition ,storage and retrieval of information present a significant challenge to the mgmt.Infact maintenance of such data is comparatively a simpler job. HRIS is a systematic way of storing data and information for each individual employee to aid planning, decision making, submitting of returns and reports to external agencies

4 broad purposes of HRIS are

(a)

(b)

Storing information and data for each individual employee for future ref. Providing a basis for planning,organizing,controlling e

1-36

HRIS-Human Resource Information system (c)Meeting daily transactional reqs ,such as marking present/absent, granting leave. (d) Supplying data and submitting returns to government and other statutory agencies. Purpose of HRIS 2 major purposes: Administrative purpose-is to improve the efficiency with which data on employees and HR activities are compiled. Efficiency purpose-is strategic and related to HR planning.

1-37

HRIS-Human Resource Information system

Applications of HRIS: Personnel administration Salary administration Leave/absence recording Skill inventory Medical history Accident monitoring Performance appraisal Training and development HRP Recruitment

1-38

HRIS-Human Resource Information system

Career

planning Collective bargaining 3 Functional components of HRIS: (a) Inputs (b) Data maintenance (c) Outputs

1-39

HRIS-Human Resource Information system

Input Function Provides capabilities need to get the HR Info to HRIS Where, when and how the data shall be collected? After collection data is entered into systems after codifications Validate it to know if its correct(use a validation table) Later update, change the validation table Data maintenance Function Actual updating the data stored in the storage devices. Changes occur in HR info, that has to be updated

1-40

HRIS-Human Resource Information system

Output Function Majority of HRIS users are not involved with collecting, editing ,validating data but are the users of information . Select a segment of population Perform some type of calculation Provide a report consisting specific info regarding selected population or the calculation of results.

1-41

HRIS-Human Resource Information system

Steps in implementing an HRIS: Inception of idea Feasibility study Selecting a project team Defining the requirements Vendors analysis Contract negotiation Training Tailoring the system Collecting data Testing the system

1-42

HRIS-Human Resource Information system

Starting up Running in parallel Maintenance Audit Benefits: Higher speed of retrieval and processing of data Reduction in duplication of efforts leading to cost reduction Ease in classifying and reclassifying data Faster response to answer queries

1-43

HRIS-Human Resource Information system

Better

work culture Establishing of streamlined and systematic procedures More transparency in the system Higher accuracy of information Better analysis leading to more effective decision making. Improved quality of report

1-44

HRIS-Human Resource Information system

Limitations: Expensive in terms of finance and manpower requirements. Inconvenient and threatening for those not convenient with computers, so computer literacy reqd. Quality report is not available.ppl who build HRIS are not aware as to what is quality information for users. Computers cannot substitute human beings, Human Intervention will always be necessary(Ex-ppl who feed data)