2. Human Resource Management an
Over View
• The term "human resource management" has
been commonly used for about the last ten to
fifteen years.
• Prior to that, the field was generally known as
"personnel administration." The name change is
not merely cosmetics.
• Yesterday, the company with the access most to
the capital had the best competitive advantage;
• Today, companies that offer products with the
highest quality are the ones with a leg up on the
competition;
• Tomorrow is the caliber of people in the
organization.
3. Definitions of HRM
• Human resources management (HRM) is a
management function concerned with hiring,
motivating and maintaining people in an
organization. It focuses on people in
organizations.
• Human resource management is designing
management systems to ensure that human
talent is used effectively and efficiently to
accomplish organizational goals.
4. Definitions …..
• HRM is the personnel function which is
concerned with procurement, development,
compensation, integration and maintenance
of the personnel of an organization for the
purpose of contributing towards the
accomplishments of the organization’s
objectives.
• Therefore, personnel management is the
planning, organizing, directing, and controlling
of the performance of those operative
functions (Edward B. Philippo).
5. Importance of Human Resource
Management
1. Strategic HR Management: Human resource
planning (HRP) function determine the
number and type of employees needed to
accomplish organizational goals.
2. Equal Employment Opportunity:
Compliance with equal employment
opportunity (EEO) laws and regulations affects
all other HR activities.
3. Staffing: The aim of staffing is to provide a
sufficient supply of qualified individuals to fill
jobs in an organization.
6. Importance…….
4. Talent Management and Development:
– It includes different types of training.
5. Total Rewards:
– Compensation in the form of pay, incentives and
benefits are the rewards given to the employees
for performing organizational work.
6. Risk Management and Worker Protection:
– Ensure protection of workers by meeting legal
requirements and being more responsive to
concerns for workplace health and safety along
with disaster and recovery planning.
7. Importance….
7. Employee and Labor Relations:
• The relationship between managers and their
employees must be handled legally and
effectively.
• Employer and employee rights must be
addressed.
• It is important to develop, communicate, and
update HR policies and procedures so that
managers and employees alike know what is
expected.
8. HRM Objectives
Human capital : assisting the organization in
obtaining the right number and types of
employees.
To create a climate in which employees are
encouraged to develop and utilize their skills to
the fullest and to employ the skills and abilities
of the workforce efficiently
To increase productivity through training and
development.
Helping to establish and maintain a
harmonious employer/employee relationship
Helping to create and maintain a safe and
healthy work environment
9. Objectives…….
• Developing programs to meet the economic,
psychological, and social needs of the employees.
• To help the organization to reach its goals
• To provide organization with well-trained and
well-motivated employees
• To increase the employees satisfaction and self-
actualization
• To develop and maintain the quality of work life
• To communicate HR policies to all employees.
• To help maintain ethical polices and behavior.
11. Objectives…….
1. Societal Objectives: seek to ensure that the
organization becomes socially responsible to
the needs and challenges of the society.
2. Organizational Objectives: it recognizes the
role of HRM in bringing about organizational
effectiveness.
• It makes sure that HRM is not a standalone
department, but rather a means to assist the
organization with its primary objectives.
12. Objectives….
3. Functional Objectives: is to maintain the
department’s contribution at a level
appropriate to the organization’s needs.
4. Personnel Objectives: it is to assist employees in
achieving their personal goals.
• Personal objectives of employees must be met if
they are to be maintained, retained and
motivated.
• Otherwise employee performance and
satisfaction may decline giving rise to employee
turnover.
14. a) Human Resource Planning:
The objective of HR Planning is to ensure that
the organization has
• the right types of persons at the right time at
the right place. It prepares human resources
inventory
• with a view to assess present and future
needs, availability and possible shortages in
human resource.
• Planning develops strategies both long-term
and short-term, to meet the man-power
requirement.
15. b) Design of Organization and Job:
This is the task of laying down organization
structure, authority,
• Relationship and responsibilities- This will
also mean definition of work contents for each
position in the organization. This is done by
“job description”. Another important step is
“Job specification”.
• Job specification identifies the attributes of
persons who will be most suitable for each job
which is defined by job description
16. C) Selection and Staffing:
• This is the process of recruitment and selection of
staff.
This involves
• matching people and their expectations with
which the job specifications and career path
available within the organization.
d) Training and Development:
• This involves an organized attempt to find out
training needs of the individuals to meet the
knowledge and skill which is needed not only to
perform current job but also to fulfil the future
needs of the organization.
17. e) Organizational Development:
This is an important aspect whereby
“Synergetic effect” is generated in an
organization i.e. healthy interpersonal and
inter-group relationship within the
organization.
f) Compensation and Benefits:
• This is the area of wages and salaries
administration where wages and
compensations are fixed scientifically to meet
fairness and equity criteria.
• In addition labour welfare measures are
involved which include benefits and services.
18. g) Employee Assistance:
Each employee is unique in character, personality,
expectation and temperament. By and large each one
of them faces problems everyday.
Some are personal some are official. In their case he
or she remains worried. Such worries must be
removed to make him or her more productive and
happy.
h) Union-Labor Relations:
• Healthy Industrial and Labor relations are very
important for enhancing peace and productivity in
an organization.
• This is one of the areas of HRM.
19. i)Personnel Research and Information
System:
• Globalization of economy has increased
competition many fold.
• Science of ergonomics gives better ideas of doing
a work more conveniently by an employee.
• Thus, continuous research in HR areas is an
unavoidable requirement.
• It must also take special care for improving
exchange of information through effective
communication systems on a continuous basis
especially on moral and motivation.
20. HR Principles
There are many principles of Human
Resources.
Here are eight of them to understand and
apply appropriately to make HR practices
transparent and relevant for the future.
21. HR Principles
Principle #1: Recruitment to retirement
• HR is all about dealing with employees from
recruitment to retirement.
• It includes manpower planning, selection,
training and development, placement, wage
and salary administration, promotion, transfer,
separation, performance appraisal, grievance
handling, welfare administration, job
evaluation and merit rating, and exit
interview.
22. HR Principles
Principle #2: People (men) behind the machine
count.
• Previously, it was the machine behind the
man that counted.
• Today, people are the real power to drive
organizations forward. Machines only assist
people.
• Ultimately, the machine is servant to men, not
the other way around.
23. HR Principles
Principle #3: Hire for attitude, recruit for skills.
• Attitude is the key to employee engagement and
success.
• Hence, HR leaders must emphasize attitude
rather than experience.
• It is better to hire a new job seeker with high
attitude and no experience than one with a
rotten attitude and years of experience.
• If employees possess a good attitude, they will
have the ability absorb the knowledge, skills, and
abilities that are essential to perform their tasks
effectively in the workplace.
24. HR Principles
Principle #4: Appreciate attitude but respect
intelligence.
• It is true that both attitude and intelligence are
essential to improve the organizational bottom
line.
• If HR leaders find it is tough to get both, they
should choose attitude over intelligence as it
helps accomplish organizational goals and
objectives.
25. HR Principles
Principle #5: Hire slow, fire fast.
• HR leaders must be slow in hiring the right
talent for their organizations.
• They must look for the right mindset, skill set,
and tool set in job seekers during recruitment.
• If they find that bad apples entered into their
basket, they must be removed quickly to
contain further damage to their organizations.
26. … Principles
Principle #6: Shed complexity, wed simplicity.
• People today prefer to work in flat
organizations rather than tall ones.
• Tall organizations often have hierarchies with
a bureaucratic mindset that doesn’t work in
the present context.
• Employees are happy to work with partners
rather than with bosses.
• So shed complexity and wed simplicity to
achieve organizational excellence and
effectiveness.
27. … Principles
Principle #7: HR leaders are king and queen
makers.
• They cannot become kings and queens.
• They are perceived as people who become
ladders for others to climb to higher positions.
• They know everything about HR, but they don’t
necessarily know much about other aspects in
the organization. CEOs are masters in their own
domains and jacks of other domains.
• They are masters in their areas and know
something about others areas. Thus, HR leaders
must acquire knowledge about other areas and
acquire technical and business acumen to
become kings and queens—the chief executives.
28. … Principles
Principle #8: To serve is to lead and live.
• Mahatma Gandhi once remarked, “The best
way to find yourself is to lose yourself in the
service of others.”
• HR leaders must serve people with pleasure
without any pressure.
• They must become torchbearers of human
capital and knowledge.
• They must learn, unlearn, and relearn to stay
relevant.
29. Factors that Affect Human Resource
Management
External Factors
1. Government Regulations
• With the introduction of new workplace
compliance standards your human resources
department is constantly under pressure to stay
within the law.
• These types of regulations influence every process
of the HR department, including hiring, training,
compensation, termination, and much more.
• Without adhering to such regulations a company
can be fined extensively which if it was bad enough
could cause the company to shut down.
30. Factors Affect HRM ….
2. Economic Conditions
• One of the biggest external influences is the
shape of the current economy.
• Not only does it affect the talent pool, but it
might affect your ability to hire anyone at all.
• All companies can make due in a bad economy
if they have a rainy day fund or plan to combat
the harsh environment.
31. Factors Affect HRM ….
3. Technological Advancements
• When new technologies are introduced the
HR department can start looking at how to
downsize and look for ways to save money.
• A job that used to take 2-4 people could be
cut to one done by a single person.
• Technology is revolutionizing the way we do
business and not just from a consumer
standpoint, but from an internal cost-savings
way.
32. Factors Affect HRM ….
4. Workforce Demographics
• As an older generation retires and a new
generation enters the workforce the human
resources department must look for ways to
attract this new set of candidates.
• They must hire in a different way and
offer different types of compensation
packages that work for this younger generation.
• At the same time, they must offer a work
environment contusive to how this generation
works.
33. Factors Affect HRM ….
Internal Factor
1.Level of Growth:
• An internal factor that impacts human resources is the
company's rate of current and projected growth.
• Companies experiencing aggressive growth and rapid
expansion may require its human resources
department to focus on recruitment and staffing.
• More stagnant companies may place a greater focus
on efforts on employee retention and improving the
company's culture and workplace environment through
upgrading job descriptions and enhancing
compensation and fringe benefits programs.
• Downsizing companies may have to take the
regrettable decision to lose some of its staff; a
message that's often left to HR to relay.
34. Factors Affect HRM ….
2. Use of Technology
• One of the key internal factors affecting human
resource planning is the willingness for the HR
department and company management to use
technology to aid in certain key human resources
functions.
• For example, companies that make greater use of tools
such as online benefits management, where
employees can make changes to their benefit plans on
their own, provide human resources workers with
more time to focus on other areas like recruiting or
training and employee development.
• This can free up a considerable amount of time and
resources across the organization.
35. Changing Environment of Human
Resource Management (HRM)
Factors involved in the changing
environment of HRM are as follows
36. 1. Work force Diversity:
• Diversity has been defined as any attribute
that humans are likely to use to tell
themselves, that person is different from me
and, thus, includes such factors as race, sex,
age, values, and cultural norms’.
• Now a days countries’ work force is
characterized by such diversity that is
deepening and spreading day by day.
37. 2. Economic and Technological
Change:
• Along with time, several economic and
technological changes have occurred that
have altered employment and occupational
pattern.
• In many countries, there is a perceptible shift
in occupational structure from agriculture to
industry to services due to technological
change.
38. 3. Globalization:
• Globalization increases competition in the
international business.
• Firms that formerly competed only with local
firms, now have to compete with foreign
firms/competitors.
• Thus, the world has become a global market
where competition is a two-way street.
39. 4. Organizational Restructuring:
• Organizational restructuring is used to make the
organization competitive.
• From this point of view, mergers and acquisitions
of firms have become common forms of
restructuring to ensure organizational
competitiveness.
• The mega-mergers in the banking,
telecommunications and petroleum companies
have been very visible in our country.
• Downsizing is yet another form of organizational
restructuring.
40. Ethical Issues Faced by Human Resource
1. Employment Issues:
HR professionals are likely to face maximum ethical
dilemmas in the areas of hiring of employees.
a. Pressure to hire a friend or relative of a
highly placed executive.
b. Faked credentials submitted by a job
applicant.
c. Discovery that an employee who has been
with the organization for some time, is skilled
and has established a successful record, had
lied about his educational credentials.
41. Ethical Issues…..
2. Cash and Incentive Plans:
Cash and incentive plans include issues like basic
salaries, annual increments or incentives,
executive perquisites and long term incentive
plans:
a. Basic Salaries: HR managers have to justify a
higher level of basic salaries or higher level of
percentage increase than the competitors to
retain some employees.
In some situations, where the increase is
larger than normal they have to elevate some
positions to higher grades.
42. Ethical Issues…..
b. Executive Perquisites:
• It is non-cash benefits provided by many
employers to their executives to: Attract and
retain talent.
• In the name of executive perquisites, sometimes
excesses are often committed, the ethical burden
of which falls on the HR managers.
• Sometimes the costs of these perquisites are out
of proportion to the value added.
• For example, the CEO of a loss making company
buys a Mercedes for his personal use or wants a
swimming pool built at his residence.
43. Ethical Issues…..
3. Employees Discriminations:
• A framework of laws and regulations has been
evolved to avoid the practices of treatment of
employees on the basis of their caste, sex,
religion, disability, age etc.
• No organization can openly practice any
discriminatory policies, with regard to
selection, training, development, appraisal
etc.
44. Ethical Issues…..
4. Performance Appraisal:
• Ethics should be the basis of performance
evaluation.
• Highly ethical performance appraisal demands
that there should be an honest assessment of the
performance and steps should be taken to
improve the effectiveness of employees.
• However, HR managers, sometimes, face the
dilemma of assigning higher rates to employees
who are not deserving them; based on some
unrelated factors eg. closeness to the top
management.
45. Ethical Issues…..
5. Privacy:
• The private life of an employee which is not
affecting his professional life should be free from
intrusive and unwarranted actions.
• HR managers face three dilemmas in this aspect:
(i) The first dilemma relates to information technology.
Close circuit cameras, tapping the phones, reading
the computer files of employees etc. breach the
privacy of employees.
(ii) The second ethical dilemma relates to the AIDS
testing. AIDS has become a public health problem.
HR managers are faced with two issues: Whether all
the new employees should be subject to AIDS test
and what treatment should be melted out to an
employee who is affected with the disease.
46. Ethical Issues…..
(iii) The third ethical dilemma relates to Whistle
Blowing. Whistle blowing refers to a public
disclosure by former or current employees of
any illegal, immoral or illegitimate practices
involving their employers.
Generally, employees are not expected to speak
against their employers, because their first
loyalty in towards the organization for which
they work.
47. Ethical Issues…..
6. Safety and Health:
• Industrial work is often hazardous to the
safety and health of the employees.
• Legislations have been created making it
mandatory on the organizations and managers
to compensate the victims of occupational
hazards.
• Ethical dilemmas of HR managers arise when
the justice is denied to the victims by the
organization.
48. Ethical Issues…..
7. Restructuring and layoffs:
• Restructuring of the organizations often result
in layoffs and retrenchments.
• This is not unethical, if it is conducted in an
atmosphere of fairness and equity and with
the interests of the affected employees in
mind.
• If the restructuring company requires closing
of the plant, the process by which the plant is
chosen, how the news is to be communicated
and the time frame for completing the layoffs
is ethically important.
49. Human Resource Management
Model
• The Human Resource Management model
contains all Human Resource activities.
• What are the Human Resource Activities?
50. Why is the HR Model important?
• The HR Strategy is usually high-level.
• The HR Strategy does not solve the issue of the
HR Process ownership.
• The strategy defines the strategic role of HR in
the organization and initiatives to be done within
the frame of several years.
• The HR Model is the best decision tool for the
ownership of the new HR Processes.
Additionally, it helps to identify gaps in the HR
Organizational Structure and the skills and
competencies of HR employees.
51.
52. Model
1. Human Resource Planning is understood as
the process of forecasting an organizations
future demand for, and supply of, the right
type of people in the right number.
2. Job analysis is the process of studying and
collecting information relating to the
operations and responsibilities of a specific
job.
– The immediate products of this analysis are job
descriptions and job specification.
53. Model….
3. Recruitment is the process of finding and
attracting capable applicants for employment.
4. Selection: is the process of differentiating
between applicants in order to identify (and
hire) those with greater likelihood of success in a
job.
5. Placement: is understood as the allocation of
people to jobs.
• It is the assignment or reassignment of an
employee to a new or different job.
54. Model….
6. Training and development: it is an attempt to
improve current or future employee
performance by increasing an employee’s
ability to perform through learning, usually by
changing the employee’s attitude or increasing
his or her skills and knowledge.
7. Remuneration: is the compensation an
employee receives in return for his or her
contribution to the organization.
55. Model….
8. Motivation: is a process that starts with a
psychological or physiological deficiency or need
that activates behavior or a drive that is aimed
at a goal or an incentive.
9. Participative management: Workers
participation may broadly be taken to cover all
terms of association of workers and their
representatives with the decision making
process.
10.Communication: may be understood as the
process of exchanging information, and
understanding among people.
56. Model….
11. Safety and health: Freedom from the
occurrence or risk of injury or loss.
12. Welfare: include services, facilities, and
amenities as may be established in or in the vicinity
of undertakings to enable the person employed in
them to perform their work in healthy, congenial
surroundings and to provide them with amenities
conducive to good health and high morale.
13. Promotions: means an improvement in pay,
prestige, position and responsibilities of an
employee within his or her organization.
57. Model….
14. Transfer: Involves a change of an
employee without a change in the
responsibilities or remuneration.
15. Separations: Lay-offs, resignations and
dismissals separate employees from the
employers.
16.Industrial relations is concerned with the
systems, rules and procedures used by
unions and employers to determine
58. Model….
17. Trade unions: are voluntary organizations of
workers or employers formed to promote and
protect their interests through collective action.
18. Disputes and their settlement: Any dispute
or difference between employers and
employers, or between employers and
workmen, or between workmen and workmen,
which is connected with the employment or
non-employment or terms of employment or
with the conditions of labor of any person.
59. Outcomes of the HR Model?
• Clear principle for the design and setting of the
HR Roles and Responsibilities.
• It saves many conflicts in the future.
• Build a stronger and more competitive HR
Function in the organization.
• clearly defines the strategic HR Processes and
strategic HR Areas, which have to be developed
further to build a strong and competitive position
on the market.
• It helps to identify the full responsibility for the
administrative HR processes. The employees are
sure about their goals and the main drivers for
their success in HR.
60. Strategic HRM (SHRM)
• The field of strategic HRM is still evolving and
there is little agreement among scholars
regarding an acceptable definition.
• The HR Strategy is usually high-level.
• The HR Strategy defines the strategic role of
HR in the organization and initiatives to be
done within the frame of several years.
61. SHRM…
• SHRM is systematically linking people with the
organization; more specifically, it is about the
integration of HRM strategies into corporate
strategies.
• HR strategies focus is on alignment of the
organization’s HR practices, policies and
programmes with corporate and strategic
business unit plans (Greer, 1995).
• Strategic HRM thus links corporate strategy and
HRM, and emphasizes the integration of HR with
the business and its environment.
62. Focus of Strategic HRM
• Lengnick-Hall and Lengnick-Hall (1999)
summarize the variety of topics that have been
the focus of strategic HRM writers over the past
couple of decades.
These include:
1. HR accounting: which attempts to assign value
to human resources in an effort to quantify
organizational capacity
2. HR planning
3. Responses of HRM to strategic changes in the
business environment;
4. Matching human resources to strategic or
organizational conditions; and
5. The broader scope of HR strategies.
63. Core Aspects of SHRM
Two core aspects of SHRM are:
A. The integration of HRM into the business
and corporate strategy
– ‘The degree to which the HRM issues are
considered as part of the formulation of the
business strategy’
B. The devolvement of HRM to line managers
instead of personnel specialists.
– ‘The degree to which HRM practices involve and
give responsibility to line managers rather than
personnel specialists’.
64. Linking organizational strategy and
HRM strategy
Many scholars developed many theoretical
models that highlight the nature of linkage
between HRM strategies and organizational
strategies.
65. Stages of the Evolution of Strategy
and HRM Integration
• Greer (1995) talks about four possible types of
linkages between business strategy and the HRM
function / department of an organization:
1. ‘Administrative linkage’ represents the scenario
where there is no HR department looks after the
HR function of the firm.
The HR unit is relegated here to a paper-processing role.
In such conditions there is no real linkage between
business strategy and HRM.
2. ‘one-way linkage’ where HRM comes into play
only at the implementation stage of the strategy.
66. Greer (1995) …..Stages of the Evolution
3. ‘Two-way linkage’ is more of a reciprocal
situation where HRM is not only involved at the
implementation stage but also at the corporate
strategy formation stage.
4. ‘Integrative linkage’, where HRM has equal
involvement with other organizational functional
areas for business development.
67. Purcell (1989) …..two-level integration
• Purcell (1989) presents a two-level integration of
HRM into the business strategy.
• First-order decisions, as the name suggests,
mainly address issues at the organizational
mission level and vision statement; these
emphasize where the business is going, what sort
of actions are needed to guide a future course,
and broad HR-oriented issues that will have an
impact in the long term.
• Second-order decisions deal with scenario
planning at both strategic and divisional levels
for the next 3–5 years. These are also related to
hardcore HR policies linked to each core HR
function (such as recruitment, selection,
development, communication).
68. Guest (1987) …three levels
Guest (1987) proposes integration at three levels:
1. First he emphasizes a ‘fit’ between HR policies
and business strategy.
2. Second, he talks about the principle of
‘complementary’ (mutuality) of employment
practices aimed at generating employee
commitment, flexibility, improved quality and
internal coherence between HR functions.
3. Third, he propagates ‘internalization’ of the
importance of integration of HRM and business
strategies by the line managers.
