session - introduction to hrm

Nature and Scope of HRMDr. Rupashree Baral

I. Welcome and introductions

II. Rules and Regulations

III. Course requirements; syllabus

IV. Introduction to human resource management

Meaning & Definition of HRM Scope of HRM Why Study HRM? Importance of HRM as a function Differences between PM & HRM HRM-Functions & Objectives Evolution of HRM in India

What is HRM?• HRM is concerned with the people dimension in the organization

• Facilitating the competencies and retention of skilled force

• Developing management systems that promote commitment

• Developing practices that foster team work

• Making employees feel valued and rewarded

Definitions• HRM refers to acquisition, retention, motivation and maintenance of Human Resources in an organization.

• Organization’s methods and procedures for managing people to enhance skills and motivation.

• The policies and practices involved in carrying out the “people” or human resource aspects of a management function, including recruiting, screening, training, rewarding, and appraising

• HRM is the planning, organising, directing & controlling of the procurement, development, compensation integration, maintenance and separation of human resources to the end that individual, organizational and social objectives are accomplished. (FLIPPO).

Synonymous terms for human resource management:

Personnel management People management

Human capital Human relations management

Human resource development

Why are we studying HRM? Being managers why should we know

HR concepts?

Why Study HRM? Taking a look at people is a rewarding experience

People possess skills, abilities and aptitudes that offer competitive advantage to any firm

No computer can substitute human brain, no machines can run without human intervention & no organization can exist if it cannot serve people’s needs

HRM is a study about the people in the organization-how they are hired, trained, compensated, motivated & maintained

HR aspects of a Manager’s Job Conducting job analyses (determining

the nature of each employee’s job) Planning manpower needs and

recruiting job candidates Selecting job candidates Orienting and training new employees

Contd. Managing wages and salaries

(compensating employees) Providing incentives and benefits Appraising performance Communicating (interviewing,

counseling, disciplining) Building employee commitment

Contd.

Understanding employment laws

Knowing employee health and safety issues

Handle grievances and employment relations

Being managers you have to avoid few mistakes Hire the wrong person for the job Experience high turnover Your people not doing their best Waste time with useless interviews Have your company sued for

discriminatory actions

Contd.

Have your company fined for unsafe practices

Some employees think their salaries are unfair and inequitable relative to others in the organization

Allow a lack of training to undermine your department’s effectiveness

Commit any unfair employment practices

Importance of HRM as a function

Challenges before HR Globalization Work force diversity Legal and ethical issues Advances in technology and communication Shift in employees need for meaningful work

Scope of HRM

Very Vast Covers all major

activities in the working life of a worker from the time an individual enters into an organization until he or she leaves

Prospects of HRM

HRM

Nature of HRM

Industrial Relations

Employee Maintenance

Employee Hiring

Employee &

Executive Remuner

ationEmployee Motivation

Differences between PM & HRM

Dimension Personnel Management Human Resources Management

1. Employment Contract Careful delineation of written contracts

Aim to go beyond contract

2. Rules Importance of guiding with clear rules

Can do outlook, impatience with rule

3. Behaviour referent Norms/customs/practices Values/mission

4. Managerial task Monitoring Nurturing

5. Management Role Transactional Transformational leadership

6. Communication Indirect Direct

7. Conflict handling Reach temporary truce Manage climate & culture

8. Training & Development Controlled access to courses Learning organization

9. Focus of attention for interventions

Personnel procedures Wide ranging cultural, structural & personnel strategies

10. Shared interests Interests of the organisation are uppermost

Mutuality of interests

Carries out 3 distinct functions:-

1. Line function

2. Coordination function

3. Staff function

Functions of the HR Manager

A line function The HR manager directs the activities of the

people in his or her own department and in related service areas (like the plant cafeteria).

Contd.

A coordinative function HR managers also coordinate personnel

activities, a duty often referred to as functional control.


Staff (assist and advise) functions Assisting and advising line managers is

the heart of the HR manager’s job.


FunctionsFunctions of HRM include:

• Facilitating the retention of skilled and competent

employees

• Building the competencies by facilitating continuous

learning and development

• Developing practices that foster team work and flexibility

• Making the employees feel that they are valued and

rewarded for their contribution

• Developing management practices that endanger high

commitment

• Facilitating management of work force diversity and

availability of equal opportunities to all.

Functions of HR

MANAGERIAL FUNCTIONS

Planning

Organising

Directing

Controlling

OPERATIVE FUNCTIONS

Staffing

Development

Compensation

Motivation

Maintenance

Integration

Emerging Issues

HR-Managerial Functions Planning

What should I achieve? Goals and standardsWhat are the binding ties and methods? Rules

and proceduresHow do I see the future? Forecasting

OrganizingWhat work? TasksWhere? DepartmentsWho should do what? DelegationWho decides & How? Authority& communicationWhat are the linkages? Coordinating

StaffingHiringRecruiting Selecting Performance standardsCompensationEvaluating performanceCounseling Training and developing

Leading/DirectingGetting the job done-towards organizational

goalsMoraleMotivation

ControllingSetting standards Comparing actual performance to standardsCorrective action

Operative functions of HR

STAFFING Job analysis, HRP, Recruitment, Selection, Placement, Induction, Internal Mobility

DEVELOPMENTCompetency profiling, Training and development, Performance & potential management, Career management, 360 degree feedback

COMPENSATION & MOTIVATION

Job design, Work scheduling, Job evaluation, Compensation administration, Incentives and benefits

Operative functions of HR (contd.)

MAINTENANCE Health, Safety, Welfare, Social security

INTEGRATIONEmployment relations, Grievance, Discipline, Trade unions, Participation, Collective bargaining

EMERGING ISSUES

HRIS, HR audit, HR scorecard, International HRM, Workforce Diversity, Work-life balance

Line Managers’ HRM Responsibilities

Placing the right person on the right job Starting new employees in the organization (orientation) Training employees for jobs that are new to them Improving the job performance of each person Gaining creative cooperation and developing smooth

working relationships Interpreting the firm’s policies and procedures Controlling labour costs Developing the abilities of each person Creating and maintaining department morale Protecting employees’ health and physical condition

Case Study

Case Questions for Discussion What seems to be the main source of conflict between

supervisors and the HR dept. at Sands Corporation? Explain.

Do you believe that managers should be given more autonomy to make personnel decisions such as hiring, appraising and compensating subordinate? If so, what are some potential drawbacks to granting them this authority?

How should Sand’s top executives deal with complaints expressed by supervisors? How should the director of the HR department deal with this situation?

Line and Staff Aspects of HRM Line manager

A manager who is authorized to direct the work of subordinates and is responsible for accomplishing the organization’s tasks.

Staff managerA manager who assists and advises line

managers.

Cooperative Line and Staff HR Management

Some common practices:

Role of HR Executives

Service Provider (Head hunting, pay rates, labor laws)

Executive (Recruitment, Compensation) Facilitator (Training, and Development activities

within company, Oversee other managers) Consultant (Managers seek advice of HR

specialists) Auditor (Ensure optimum and effective use of

HR)

Objectives of HRM Societal objectives

To be ethically & socially responsible to the needs of the society while minimizing the negative impact of such demands upon the organization

Organizational objectivesTo recognize the role of HRM in bringing about organizational effectiveness

Functional objectivesTo maintain the department’s contribution at a level appropriate to the organization’s needs

Personal objectivesTo assist employees in achieving their personal goals in a manner that their personal goals enhance the individual’s contribution to the organization

Objectives and Scope of HR To ensure effective utilization of the human resources To establish and maintain an organizational structure To secure integration to the individuals and

organization by reconciling individual group goals To generates maximum development of individuals

groups To recognize and satisfy individual needs and group

goals To maintain high morale and better human relations To develop and maintain a quality of work life To establish and maintain productive self-respecting

working relationships

Evolution of HRM in India Welfare (1920s-1930s)

Administration (1930s- 1940s)

IIPM and NILM

Employee relations (1940-1960s)

Functional expertise (1970s-1980s)

Business and Strategic partner

(1990s and onwards)

ASPA to SHRM

Traditional Sources of Competitive Advantage… Product and process technology

Technological innovations make innovation easier and faster Development and manufacturing technology freely available

Protected and regulated markets Move to global economy Deregulation

Access to financial resources Global capital market Venture capital

Economies of scale Fragmented markets Less important with advances in technology

So, what’s left…peopleSource: Pfeffer (1994, 1998)

Competitive Advantage through People Viewing the work force as an asset, not an

expense The result:

Harder work, from increased involvement and commitment

Smarter work, through enhanced skills and competence Lower overhead, by pushing responsibility downward

High performance work systems

Source: Pfeffer (1994, 1998)

External Influences on HRM Economic conditions Legal requirements and constraints Demographics Technology

Economic Conditions Global economy

Lower wage levels vs. quality and productivity Ethical issues and political considerations

Domestic factors Move from manufacturing economy to service /

information economy Mergers duplication of functions layoffs

Supply and demand of labor influences price Supply and demand of company’s product, which

determines available resources

Legal Requirements and Constraints Government now an intermediary in the

relationship between employers and employees

Legal requirements and constraints are usually a reflection of social attitudes and opinions

Demographics Supply of labor (number of people, skills, etc.)

New skills needed, but are they present in workforce? Basic skills availability?

Different needs of different groups in the population Increasing number of women in paid workforce Dual-earner families Family-friendly benefits Aging population

Technology

Knowledge intensive jobs in industries such as aerospace, computers, telecommunications, and biotechnology are replacing factory jobs in steel, auto, rubber and textiles

New jobs, Need for new skills Need for continuous skills development Managing the HR function

Data managementEmployee communications

HR’s Changing Role

Protector

and

Screener

Change Agent

Strategic Partner

Changes in environment HR managers to take on new responsibilities

HR functions more strategic

The Changing Role Of HR Management

Strategic Planning The company’s long-term plan for how it

will balance its internal strengths and weaknesses with its external opportunities and threats to maintain a competitive advantage.

3 questions in strategic planning○ Current business position○ Future business position expected to be○ How to get to expected future business

position


Strategic HRM Formulating HR policies and introducing

practices that produce staff competencies and behaviors that the company needs to achieve its strategic goals.


Strategic HRM HR managers today are more involved in

partnering with their top managers in both designing and implementing their companies’ strategies

Top management wants to see, precisely, how the HR manager’s plans will make the company more valuable.


Outsourcing HR Activities Computer-based systems easy to

outsource HR activities by providing access to service providers to the company’s HR information database

E.g. Payroll, Benefits, Wellness Programs and Employee Training


High Performance Work Systems (HPWS) Integrated set of HRM policies and

practices that together produce superior staff performance

Need to focus on performance

No fixed rule of items that comprises HPWS but should include:

○ Employment security


High Performance Work Systems (HPWS) No fixed rule of items that comprises

HPWS but should include (cont):

○ Selective hiring

○ Extensive training

○ Self managed teams and decentralized decision making


High Performance Work Systems (HPWS) No fixed rule of items that comprises

HPWS but should include (cont):

○ Reduced status distinctions among managers and workers

○ Information sharing among managers

○ Pay-for-performance rewards

○ Emphasis on high quality work


High Performance Work Systems (HPWS) Benefits of HPWS

○ Generate more job applicants

○ Screen candidates more effectively

○ Provide more and better training

○ Link pay more explicitly to performance

○ Provide a safer work environment


High Performance Work Systems (HPWS) Benefits of HPWS (cont)

○ Produce more qualified applicants per position

○ More employees are hired based on validated selection tests

○ Provide more hours of training for new employees

○ Higher percentages of employees receiving regular performance appraisals.


Measuring HRM Team’s Performance Employees expect HR teams to provide

measurable proof of the effectiveness of their programs

Require quantitative measures Metrics and HR Scorecard are used


Measuring HRM Team’s Performance Metrics

○ A set of quantitative performance measures that HR managers use to assess their operations

○ E.g. of HR Metrics Absence Rate

[(Number of days absent in month) ÷ (Average number of employees during mo.) × (number of workdays)] × 100


© 2009 Pearson Education South Asia. All rights reserved. 1–58


○ E.g. of HR Metrics (cont) Cost per Hire

(Advertising + Agency Fees + Employee Referrals + Travel cost of applicants and staff + Relocation costs + Recruiter pay and benefits) ÷ Number of Hires




○ E.g. of HR Metrics (cont) Health Care Costs per Employee

Total cost of health care ÷ Total Employees

HR Expense Factor

HR expense ÷ Total operating expense

Sources: Robert Grossman, “Measuring Up,” HR Magazine, January 2000, pp. 29–35; Peter V. Le Blanc, Paul Mulvey, and Jude T. Rich, “Improving the Return on Human Capital: New Metrics,” Compensation and Benefits Review, January/February 2000, pp. 13–20;Thomas E. Murphy and Sourushe Zandvakili, “Data and Metrics-Driven Approach to Human Resource Practices: Using Customers, Employees, and Financial Metrics,” Human Resource Management 39, no. 1 (Spring 2000), pp. 93–105; [HR Planning, Commerce Clearing House Incorporated, July 17, 1996;] SHRM/EMA 2000 Cost Per Hire and Staffing Metrics Survey; www.shrm.org.



Measuring HRM Team’s Performance HR Scorecard

○ Measures the HR function’s effectiveness and efficiency in producing employee behaviors needed to achieve the company’s strategic goals

○ Concise and simple measurement system


Measuring HRM Team’s Performance HR Scorecard

○ Use to measure: HR activities (testing, training, compensation

and safety) Employee behaviors resulting from such

activities Organizational outcomes of those employee

behaviors (higher performance, and company profit)


Hard and Soft aspects of HR Hard HRM:-

A very instrumental, practical approach People seen as a passive resources to be used, deployed and if

necessary disposed of HR planning is seen as a factor of production Incompatible with trade unions-may necessitate confrontation to

implement concepts

Hard HR strategies: Organisational Design Organisational Development Resourcing and Talent Planning Performance Management

Contd. Soft HRM:-

sometimes known as development humanism stresses human side entails trust, collaboration, skill development place for unions in this model where unions are marginalized and

by passed on many issues or alternative forms of employee representation are initiated

above all, about commitment and partnership

Soft HR strategies Reward and Recognition Employee Relations Learning and Talent Development Employee Engagement Employee Relations (including Diversity, Equality, Health and

Safety)

In very simple terms, those areas that are concerned with HR systems and frameworks are best described as hard, and those that are concerned with people and individuals are more accurately described as soft.

If that’s clear, let’s play a game!

1. Read the statements in the document which contains a number of everyday scenarios from a typical business.

2. Decide whether the scenario is one that is likely to have come about or been influenced by either a hard or a soft HR strategy

3. See if the rest of the class agree with the verdict

A typical organization structure of HR department

HRM in Large v. Small Firms

Large Designated HR

professional or HR department

Formal HR policies; HR manual; job descriptions

Small HR duties combined

with other administrative functions (e.g., accounting) or performed by line mgrs.

Less formal HR policies, less likely to have HR manual, job descriptions

Organizational Life-Cycle Stages and HR Activities

LIFE-CYCLE STAGE

STAFFING COMPENSATIONTRAINING

AND DEVELOPME

NT

LABOR / EMPLOYEE RELATIONS

Introduction

Attract best technical and professional talent.

Meet or exceed labor market rates to attract needed talent.

Define future skill requirements and begin establishing career ladders.

Set basic employee-relations philosophy of organization.

Growth Recruit adequate numbers and mix of qualifies workers. Plan management succession. Mange rapid internal labor market movements

Meet external market but consider internal equity effects. Establish formal compensation structures.

Mold effective management team through management development and organizational development.

Maintain labor peace, employee motivation, and morale.

Organizational Life-Cycle Stages and HR Activities (cont’d)

LIFE-CYCLE STAGE

STAFFING COMPENSATION

TRAINING AND DEVELOPMENT

LABOR / EMPLOYEE RELATIONS

Maturity Encourage sufficient turnover to minimize layoffs and provide new openings. Encourage mobility as reorganizations shift jobs around.

Control compensation costs.

Maintain flexibility and skills of an aging workforce.

Control labor costs and maintain labor peace. Improve productivity.

Decline Plan and implement workforce reductions and reallocations, downsizing and outplacement may occur during this stage.

Implement tighter cost control.

Implement retraining and career consulting services.

Improve productivity and achieve flexibility in work rules. Negotiate job security and employment-adjustment policies

HR and IT

HR managers have to work in close coordination with the IT head/in-charge for creating awareness about the IT management practices and behaviors

The key challenge is to define and communicate the information behaviors and values expected from the employees

HR and Productivity

How does HR impact performance/productivity of any organization?

How do you prove the CEO that HR is a profit center?

Consider these two statements

“I'm committed to providing the latest ideas on staffing and training, including the rigorous use of competency models, 360-degree performance appraisals and personal coaching. I will also advocate pay for performance, flexible benefits and open communication.”

" When we look at our (not "your") company strategy, I see where HR can help. If I'm hired, I assure you that we will build a more responsive organization with a competent and committed workforce. We will create a leadership brand that connects our desired firm identity to employee behavior. I'll hold myself accountable to help you make this happen"

Both know HR tools, but the second one wants to focus on how the HR practices will deliver speed, talent and leadership – three capabilities for the firm’s strategies to succeed.

INTERNAL PROCESSES & SYSTEMS(Evolving HR Processes)

KEY METRICS REVIEW & PLANNING (Staffing, Attrition, Performance, EVA)

EMPLOYEE ENGAGEMENT (Satisfaction, Career Aspirations & Celebrations)

SUPPORTING BUSINESS NEEDS (HR Structure, Recruitment, & Allocation)

CUSTOMER SATISFACTION (Competent Workforce, delivering quality)

NEW HR MANDATENEW HR MANDATE

DEVELOPMENT OF HR WORKFORCE(Competency Planning, & Development )

Need for HR Value – Changing Dynamics

Change in internal environment

Change in external environment

Company focus Nature of work Employee profile Employee aspiration

Competition

Technology

Globalization

Local & foreign

regulations

Role of HR Professionals

The Past The Future

Operational Monitor Short term Administrative Reactive Activity focus

• StrategicStrategic• PartnerPartner• Long termLong term• ConsultativeConsultative• ProactiveProactive• Solution focusSolution focus

Emerging Roles for HR Professionals

Human Capital Developer

Functional Expert

Employee Advocate

Strategic Partner

HR Leader

Measuring HR’s Contribution

The HR Scorecard

Shows the quantitative standards, or “metrics” the firm uses to measure HR activities.

Measures the employee behaviors resulting from these activities.

Measures the strategically relevant organizational outcomes of those employee behaviors.

session - introduction to hrm

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