Introduction to HRM

By Manish Bhalla

Esesence of Human Being as a Resource

According to L.F. Urwick business houses are made or broken in the long-run not by markets or capital, patents, or equipments, but by men. According to Peter F. Drucker, man, of all the resources available to man, can grow and develop. Human resources are heterogeneous in the sense that they differ in personality, perception, emotions, values, attitudes, motives and modes of thoughts. Their behaviour to stimuli is often inconsistent and unpredictable. While other resouces depreciate, human resources appreciate with the passage of time. Better educated, more skilled, better aware of their interest and rights are some distinguishing features of modern human resources. The need of the new perspective is to have right people for right jobs.

The same gives genesis to the concept of HRM in business organisation.

Meaning and Definition

Human Resource means the people. According to Michael J. Jucius human resources as a whole consist of inter-related, inter-dependent and interacting physiological, psychological, sociological and ethical components. According to Sumantra Ghosal human resources are human capital He classifies human capital into three categories
Intellectual Capital (Specialized Knowledge, tacit knowledge and skills, cognitive complexity, and learning capacity) Social Capital (network of relationships, sociability, and trustworthiness) Emotional Capital (self-confidence, ambition and courage, risk-bearing ability, and resilience)

(Resilience means to bounce back and be stronger instead of crumbling and falling apart)

Definition of HRM
HRM is the process of making efficient and effective use of human resources so that the set goals are achieved. According to Flippo PM or HRM is the planning, organising, directing and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual, organisational and social objectives are accomplished. According to The National Institute of Personnel Management (NIPM) of India human resources/personnel management is the part of management which is concerned with people at work and with their relationship within an enterprise.

Its aim is to bring together and develop into and effective organisation of the men and women who make up an enterprise and having regard for the wellbeing of the individuals and of working groups, to enable them to make their best contribution to its success.

Nature of HRM
Pervasive force: HRM in pervasive in nature. It is present in all enterprises. It permeates all levels of management in organizations Action oriented: HRM focuses attention on action, rather than on record keeping written procedures or rules. The problems of employees at work solved through rational policies. Individually oriented: It tries to help employees develop their potential fully. It encourages them to give their best to the organizations. It motivates employees through a systematic process of recruitment, selection, training and development coupled with fair wage policies. People oriented: HRM is all about people at work both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. The resultant gains are used to reward people and motivate them toward further improvements in productivity. Future oriented: Effective HRM helps an organization meet its goals in the future by providing for competent and well motivated employees.

Development oriented: HRM intends to develop the full potential of employees. The reward structure is tuned to the needs of employees. Training is offered to sharpen and improve their skills. Employees are rotated on various jobs so that they gain experience and exposure. Every attempt is made to use their talents fully in the service of organizational.

Integrating mechanism: HRM tries to build and maintain cardinal (of foremost or fundamental importance) relations between people working at various levels in the organization. In short it tries to integrate human assets in the best possible manner the service of an organization. Comprehensive functions: HRM is to some extent concerned with any organizational decision which has an impact on the workforce or the potential workforce. The term workforce signifies people working at various levels, including workers, supervisors, middle and top managers. It is concerned with managing people at work. It covers all types of personnel. Personnel work may take different shapes an forms at each level in the organizational hierarchy but the basic objective of achieving organizational effectiveness through effective ad efficient utilization of human resources remains the same. It is basically a method of developing potentialities of employees so that they get maximum satisfaction out of their work and give their best efforts to the organizations.

Auxiliary service: HR departments exist to assist an advice the line or operating managers to do their personnel work more effectively. HR manager is a specified advisor. It is staff function.

Inter disciplinary function: HRM is a multi disciplinary activity, utilizing knowledge and inputs drawn from psychology, sociology, economics etc. To unravel the mystery surrounding the human brain managers, need to understand and appreciate the contributions of all such soft disciplines.
Continuous functions: HRM is not a one shot deal. It cannot be practiced only one hour each day or one day a week. It requires a constant alertness and awareness of human relations and their importance in every day operations.

Scope of HRM
Acquisition Human Resource Planning,Recruitment, Selection and Placement

Control Human Resource Audit, Human Resource Accounting, Human Resource Information System

Human Resource Management

Development Training, Career Development, Organization Development and Internal Mobility

Maintenance Remuneration, Motivation, Health & Safety, Social Security, Industrial Relations, Performance Appraisal

Issues and Challenges for Human Resource (HR) in the Knowledge Based Economy
Premise
Change has become ephemeral (lasting for a short period) everywhere be it economy, politics, business, environment and so on. Economy has changed from closed to open to web economy. Business has expended from regional to national to global. Business organisations have altered from brick and mortar to knowledge to virtual organisation. Changing environment is impacting the human resource management to a great deal. Therefore knowledge of changing environment becomes a prerequisite to formulate an appropriate business and HR strategy.

Issues and Challenges

Work force Diversity (such as race, sex, age, values, and cultural norms) Economic and Technological Change (Perceptible shift in occupational structure from agriculture to industry to services, LPG, FDI & FII, Automation and Robotisation, MIS, Advanced Skill Requirement) Globalization (Increases competition, MNCs, International HRM)

Organisational Restructuring (to make organisation competitive, Megers, Acquisitions, Downsizing, Flatten Organisation)
Changing Nature of Work (increased use of temporary or part-time workers in organisation, manual to mental/knowledge work, specialist or SMEs, More use of employees creativity and skill)

Other Issues and Challenges

Employee training is critical to successful knowledge management implementation Employee involvement is critical to successful knowledge management implementation Open and trustworthy spirit of teamwork is critical to successful knowledge management implementation Employee empowerment is critical to successful knowledge management implementation Visible top management leadership and commitment is critical to successful knowledge management implementation Information systems infrastructure is critical to successful knowledge management implementation

Performance measurement is critical to successful knowledge management implementation Knowledge-friendly culture is critical to successful knowledge management implementation Benchmarking is critical to successful knowledge management implementation

Knowledge structure is critical to successful knowledge management implementation

Elimination of organizational constraints is critical to successful knowledge management implementation

S No.
A. B. C.

Dimensions
Nature of relations Perception of conflict Contract Pluralist

PM

HRM
Unitarist or neounitarist Conflict is pathological Beyond contractcommitment

Conflict is institutionalized Emphasis on compliance

D.
E. F. G. H. I. J. K. L. M.

Role of procedures
Planning perspective Acceptability of unions Level of trust Key relation Managements role Basis of job design Key people Skill acquisition Reward management

Rules dominated
Ad hoc, reactive Acceptable Low Labour-management Transactional Division of labour PM/IR specialist Training & Development Standardized job evaluation

Culture and values dominated

Integrated, proactive Not desirable High Customer Transformational Teams Line people and general managers Learning organization Performance related

Strategic Framework of HR

The term strategy is widely used in and presupposes importance.

In the words of the Oxford Concise Dictionary, strategy means generalship

Thus, strategy is associated with the long-term decisions taken at the top of the enterprise.
The original literary meaning of strategy is the art and science of directing military forces. It envisages thinking ahead to survive and grow in a highly competitive environment.

Strategy is concerned with determining which option will provide maximum benefits.
Strategic process has two phases: Strategy formulation and Strategy implementation.

Strategic management is the process of formulating, implementing and evaluating business strategies to achieve organisational objectives. Strategic human resource management is to ensure that human resource management is fully integrated into strategic planning, that HRM policies are connected and consistent both across policy areas and across hierarchies and that HRM policies are accepted and used by line managers as part of their every day work. Strategic management emphasizes monitoring and evaluating environmental opportunities and threats in the light of a corporations strengths and weaknesses. Thus, strategic HRM means a strategic look at HR functions in line with the business functions of an organisation. The success of an organisation depends on the people therein. This means how they are acquired, developed, motivated and retained in the organisation play an important role in the organisational success.

Strategic HRM is therefore concerned with the following: 1. Analyse the opportunities and threats existing in the external environment. 2. Formulate strategies that will match the organisations (internal) strengths and weaknesses with environmental (external) threats and opportunities. In other words, make a SWOT analysis of organisation. 3. Implement the strategies so formulated. 4. Evaluate and control activities to ensure that organisations objectives are duly achieved. Benefits of Strategic Management 1. Allows identification, prioritisation and exploitation of opportunities. 2. Provides an objective view of management problems.

3. Represents a framework for improved co-ordination and control of activities. 4. Minimises the effects of adverse conditions and changes. 5. Allows major decisions to better support established objectives.

6. Allows more effective allocation of time and resources to identified opportunities.

7. Creates a framework for internal communication among personnel.

8. Helps to integrate the behaviours of individuals into a total

effort.
9. Provides a basis for the clarification of individual responsibilities. 10. Gives encouragement to forward thinking. 11. Encourages a favourable attitude towards change. 12. Gives a degree of discipline and formality to the management

of a business.

Strategic HRM in Essar Steel Limited

Human resource plays an expanded role under the strategic human resource approach.

No longer is human resource strategy a simply personnel management strategy with operative employees driven by the overall corporate strategy. By involving the HRD consideration when an overall strategy is formulated, HRD can help achieve a strategic advantage. More than 50% training programmes are designed and implemented primarily taking a strategic perspective.
The Vision-mission statement is the evolution of people in the organisation from the various levels of participation.

The organisation implemented the following HR strategies:

1. Right Sizing Human Resources(manpower audit basis competency mapping)
2. Developing a learning culture through continuous learning (workshops, etc.) 3. Web Based Customer Relationship Management 4. Introduction of Open House (where employees ventilate their problems in forum) 5. Organisation of Executive Leadership Camp to Develop Corporate Pride among the Employees 6. Introduction of Willy Korf Innovation Award Scheme (to encourage employee participation through sharing of ideas to improve productivity) 7. Regular Training with a Target of Seven Mandays per Employee

8. Training programmes on Areas of Concern

STRUCTURE OF THE NEW PEOPLE MANAGEMENT:

The old Human Resource Development is being replaced by the New People management. It would play a role much broader in scope, much stronger in impact and much more permanent in effect. The NPM makes the entire organisation its area of operation. 1. RECRUITMENT: This involves long-term vacancy filling measures. It translates strategies into

People with the right combination of knowledge, experience, values , skills and behaviour are absorbed to meet the corporate objectives.
a manpower plan and develops a hiring programme accordingly. 2. PERFORMANCE MANAGEMENT: To ensure that the talent they have attracted achieve their goals, companies use NPM to create appropriate working conditions. Jobs

are evaluated so that the individuals best suited to carry them out are assigned to it. Corporate and employee interests
are balanced by designing individual careers.

3. TRAINING AND DEVELOPMENT: As change overtakes the stable environment, organisational goals are changing rapidly. Naturally tasks that people perform are also changing.

The function of the NPM is to bridge the gap between the abilities the individuals possess and those, which they need to fulfil those tasks, by training and development.
4. APPRAISAL AND REWARD: Evaluation and compensation are being used to directly link organisational objectives to individual performance. By

ensuring that individual rewards are available only when corporate goals are met, the NPM successfully prevents people from expanding their energies on activities that bear no relationship to the organisation.
5. ORGANISATIONAL EXIT: A planned separation from employees whose contribution is no longer adds value to the organisation is becoming important either because bloated wage bills have to be rationalised or because the company has moved into a different stage of existence where a new set of skill is necessary.

EFFECTIVE BUSINESS STRATEGY:

In any business strategy, people are becoming more crucial that plans.

Effective implementation of the companys business strategy is possible only with self-motivated people working in small self-managed teams. The winning
corporation dominates the market by offering their customers one of the three competitive benefits: 1. BEST PRODUCT AND THE NPM: Offering the best product involves continuous innovation within the

People with originality will be recruited. Working conditions with few controls will be created. Resources are provided for experimentation. Risk taking and failure must be provided for; training and development also need to be ensured. Appraisal and rewards will be tied to long term gains and the market rather than short-term achievements.
company, using knowledge and abilities of individuals.

2. BEST PRICE AND NPM: In ensuring the lowest price for their products, companies have to tailor their process as well. No compromise of value for price is acceptable. However lowest cost can be ensured. Best

man planning ensures minimum wage bill. People who suit the organisation must be recruited. Cost cutting technologies can be incorporated. A special mandate will be to link organisational cost cutting to individual cost cutting goals and reward employees accordingly.
3. BEST SERVICE AND NPM: Individuals with the right mix of creativity, initiative, values and skills will be
able to provide world-class service to the customers. The

employees of a service leader will have to stay at the forefront of new models and techniques that affect their clients business. A company can assist its people to solve customers problems. The NPM binds the level of customer satisfaction and delight achieved directly by appraisal and reward.

Thank u !!!