HUMAN RESOURCE MANAGEMENT

Chapter One- An Overview of Advanced HRM

 HUMAN RESOURCE MANAGEMENT

“ You can get capital and erect buildings , but it takes people to build a business .”
Thomas J. Watson
(The founder of IBM)
 Learning objective
- What is HRM
- Nature of HRM
- Objectives of HRM
- Importance of HRM
- Functions Of HRM
- Organisation of HR department
- Models of HRM
- Evolution of HRM
- System approach to HRM
- Strategic HRM
- Traditional HR versus Strategic HR
- Skills for HR professionals
 ‘ Employees are the most important
asset of the organization ’

•The quality and effectiveness of the organization is

determined by the quality of the people that are
employed.

•Success for most organizations depends on finding the

employees with the skills to successfully perform the tasks
required to attain the company’s strategic goals
HRM encompasses all management decisions and
activities that affect or influence the people of the
organisation .
 It is the process of managing people in organisations in

a structured and thorough manner .

HRM is the organisational function , which can also be

performed by Line managers , that deals with issues

related to people like recruitment , compensation ,
performance appraisal , health , safety , training &
development , motivation etc .
According to American Management Association:
Human Resource Management is that field of
management which has to do with planning, organizing
and controlling various operative functions of
procuring, developing, maintaining and utilizing a
work force in order that

(a)the objectives for which the company is established

are attained as efficiently and economically as possible;
(b) the objectives of all levels of personnel are served to
the highest degree; and
(c)the objectives of the community are duly considered
and served.”
 Pervasiv
e
force Action
Continuo oriente
us d
function

Individu
- ally
Interdis oriented
c-
iplinary
function
Nature People
Of oriente
Auxillary d
service HRM

Future
oriente
Compre d
-
hensive
functio Integrati- Develo-
n ng pment
mechanism oriente
d
 Welfare Aspect

Personal Aspect

Industrial Relations
Aspect
 Personal

Functional

Societal

Organisationa

l
 Legal Compliances
Societal Benefits
Union Management Relations

Appraisal
Functional
Placement
Assesment

Training & Development

Personal Appraisal & Placement
Compensation & Assessment

Human Resource Planning

Selection , T& D
Organisational Employee Relations
Appraisal & Placement
Assessment
1 At the enterprise level :
- attract and retain the best people in
the organisation
- train people for challenging roles
- develop right attitude towards job
- develop skills and competencies
- promote team spirit
- develop loyalty and commitment

2 - At the society level :

- enhance standard of living
- generate employment opportunities
3 – At the individual level :
- promotes team work and team spirit
- provide opportunities for growth
- increase productivity and profits
- develop diligence and commitment
towards work
- improve job satisfaction

4 – At the national level :

- enhance standard of living
- provide better employment
- efficient use of natural , physical and
financial
resources
There are two types of functions of HRM as follows :
1- Managerial
2 – Operational

Managerial functions are as follows :

A – Planning
B – Organising
C – Directing
D-
Controlling
Operative functions are as
follows :
A – Procurement:
- Job Analysis
- HR Planning
- Recruitment
- Selection
- Placement
- Induction
- Internal mobility

B – Development :
- Training
- Executive development
- Career planning
- Succession planning
- Human resources
C – Motivation And Compensation :
- Job design
- Work scheduling
- Motivation
- Job evaluation
- Performance and potential appraisal
- Compensation administration
- Incentives benefits and services

D – Maintenance :
- Health
- Safety
- Welfare
- Social Security
 E–
Integration :
- Grievances
- Discipline
- Teams and
team work
- Collective
bargaining
- Participati
on
- Empower
ment
- Trade
 F – Emerging
Issues :
- Personal records
- Personal audit
- Personal
research
- HR accounting
- Human
Resource
Information
System ( HRIS )
- Job stress
- Counselling
 HRM in Small Scale Unit :

Owner /
Manage
r

Productio Sales Office

Accountant
n Manage Manage
manager r r

Personal
Assistan
t
 Chairman /
MD

Director Director Director Director

Director R& D
Finance HRM Marketing
Productio
n
 Director HR

Manager
Manager Admin Manager HRD Manager
Personnel
IR

Training &
Appraisal
Developmen
t

PR Canteen Medical Welfare Transport Legal

Grievance Compen-
HRP Hiring sation
Handling
 - The Commodity Concept ( labour was regarded as commodity to be brought and sold )

- The Factor Of Production Concept ( labour is like any other factor of production )

- The Goodwill Concept ( welfare measures have positive impact on labours )

- The Paternalistic Concept ( fatherly and protective attitude towards employees )

- The Humanitarian Concept ( fulfill physical , social & psychological needs of

employees )

- The Human Resource Concept ( employees are most valuable assets of organisation )

- The Emerging Concept ( employees should be accepted as partners in the progress of

company)
Period Emphasis Status Roles
1920-30 Welfare management Clerical Welfare
Paternalistics practices administrator
Ploliceman
1940-60 Expanding the role to cover Administration Appraiser
labour welfare , industrial Advisor
relation and personnel function Mediator
Legal Advisor
Fire fighting
1970-80 Emphasis on human values, Developmental Change agent
aspirations , dignity , usefulness , Integrator
efficiency and effectiveness Trainer
Educator
1990-2000 Increemental productivity gains Proactive Developer
through human assets Growth oriented Counsellor
Mentor
Problem solver
Post 2000 Aggressive cost cutting in order Fight for survival Compete with the
to compete in a global to live for best and win
 Product
subsystem

HR Subsystem
Procurement Marketing
Finance Training
subsystem Compensation subsystem
Appraisal
Rewards

Technical
subsystem
 Comprehensiveness

Credibility Communication

Change
Control Cost-
Commitment effectiveness

Competence Creativity

Coherence
1. The Fombrum Model
Human resource
development

Organisational
Selection Appraisal
effectiveness

Rewards
2. The Harvard Model

Stakeholder
interest
-
Manageme
nt
-Employee HRM policy Long term
groups Human
choices consequences
- Resource
- -Individual
Governmen Outcomes
Employe well –
t -
e being
- Situational factors Commitm
influence -
Community ent
-Workforce -HR flow Organisationa
-Unions -
characteristics -Reward l
Competen
-Business system effectivenes
ce
strategy -Work s
-
- system -Social well –
Congruen
Managemen being
ce
t -Cost –
philosophy effectiveness
-Labour
market
1. The Guest Model

Perform
Behavio a nce
- ural Outcom
HRM Outcom e s
Practices - es Positive
Hiring HR
Motivat- Producti- Financia
HRM Training Outcome
ion vity l
Strateg- Appraisal s Commit-
Co- Innova- Outcome
ies ment
ope- tion- s
Compens Quality
ration Quality Profit
ation Flexibility
Organi- Negative ROI
Industrial
Absent-
relations
sational eeism
citizen- Turnover
ship
1. The Warwick Model
Outer context
Socio-
economic
Technical
Political-legal
Competitive
Inner Context
Structure

Politics/leadership
Task technology
Business outputs HRM Context
Business Strategy
Content Role
Objectives Definition
Product market Organisation
Strategy & tactics HR outputs

HRM Content
HR flows
Work system
Reward system
Employee
Benchmarks Personnel Management Human Resource
Management
Evolutionary Succeeded IR but Succeeded PM and ruled
preceded HRM for a long time . Started
during 1980s and carried
acceptance today

Emphasis Emphasis on mundane Treat human being as

activities like hiring , valued assets to be valued
remunerating, training & , used and preserved .
harmony

Outcome of people Value for money Added value

management

Reporting Regulators Investors and

stakeholders
Benchmarks Personnel Management Human Resource
Management
People management Focused on service Numerous small & tactical
activities delivery , not project projects , projects often
management annual events within
service delivery
Measurement Efficiency of HR activities Effectiveness of HR
, compliance outputs against business
plan
Assumptions about Cause & effect , simple & Dynamic system , core
environment , stable , people seen as a competencies , strategy-fit
organisations and people cost/ an expense , , people seen as assets ,
management behavioural psychology , hard & soft HRM ,
financial reward cognitive & humanistic
psychology , learning
organisations
 SHRM is built around three important propositions :

1.The human resources are major source of competitive

advantage , people can make or break organisation .

2.Successful organisational performance depends on a close fit

between business and human resource strategy

3.Individual HR strategy should cohere by being linked to each

other to offer mutual support .
Points of distinction Traditional HR Strategic HR
Focus Employee relations Partnership with internal
and external customers

Role of HR Transactional change Transformational change

follower & respondent leader & initiator

Initiatives Slow , reactive fragmented, Fast, proactive &

short term integrated

Time horizon Short term Short, medium & long

Control Bureaucratic roles , Organic flexible
policies & procedures

Job Design Tight division of labour Broad , flexible

Key Investments Capital , products People , knowledge
Accountability Cost centre Investment centre
Responsibility for HR Staff specialists Line managers
 A Model Of Strategic Human Resource Management
External
Environment
Laws
Competition
regulating
Government policy Outcomes
environment
Technology
Market trends Procurement Increased
Economic factors HR performanc
HR Planning
Strategy Development e
Design of jobs &
work systems Performance Customer
Corpor- What workers Management satisfactio
ate Business do n
Strategy Strategy What workers Compen-
need sation Employee
How jobs satisfactio
Internal interface with Labour n
Environmen others Relations
t Culture Enhanced
Structure share
Policies HRI holder
Skills S values
“Human resource managers , nowdays , wear
many hats . They perform mainly three
different types of roles while meeting the
requirement of employees and customers
, namely administrative , operational and
strategic .”
- Mathis and Jackson , Ulrich
1. Administrative Roles
–
 Policy maker
 Administrative expert
 Advisor
 Housekeeper
 Counsellor
 Welfare officer
 Legal consultant
2. Operational Roles –
 Recruiter
 Trainer , developer and motivator
 Co-ordinator / linking pin
 Mediator
 Employee champion
3. Strategic Role –
 The strategic role of HR management focuses
attention on how to enable ordinary employees
to turn out extra ordinary performance , taking
care of their ever-changing expectations .
 The key areas of attention include effective
management of key resources
( employees
, technology , work process ) while delivering
cost effective , value enhancing solutions .
 Change agent

 Strategic partner
 Matching process,
All managers Employees are integrating the
are resource viewed as organization’s
managers assets goals with
employees’ needs

How a company manages its workforce may be single

more important factor in sustained competitive success

38
 Company Strategy

Attract an Effective Workforce

HRM planning
Job analysis
Forecasting
Recruiting
Selecting
Maintain an Effective Workforce
Develop an Effective Workforce
Wage and salary
Benefits Training
Labor relations Developmen
Terminations t Appraisal

39
 Focus on building human
capital
1
Development of
2
global
HR strategies IHRM

3
The using of
information
technology

40
 Business

Mastery

Personal
Credibility

HR Change
Mastery
Mastery
Business Mastery Business acumen
– Customer orientation
Knowledge in all functional
areas
External relations

Personal Credibility – Competence

Sound academic credentials
Trust
Ethical conduct
Courage
 HR Mastery
Staffing
–
Performance appraisal
Reward system
Communication
Organisation design

Change Mastery Interpersonal skills

- Problem solving skills
Reward system
Innovativeness & creativity
 References :
1. Managing Human Resources by Aswathapa
2. Human Resource Management by V.S.P. Rao