HUMAN RESOURSE MANAGEMENT & STRATEGIC HRM Meaning & definition Nature & scope Significance Functions & objectives Evolution of HRM Contemporary issues Role of personnel manager HRM & strategic HRM
HUMAN RESOURSE MANAGEMENT Managing HR important because HR are heterogenous Modern employees more educated Himself determines what he contributes Drucker---Of all the resources available i.e.mgmt. of materials,methods, money machine most imp.is M for MEN
HR is the total knowledge, skills, creative abilities, talents & aptitudes of an org’s workforce,as well as value, attitudes &beliefs of the individuals involved. Flippo “Personnel management is the planning, organizing,directing,controlling of the procurement, dev.,compensation.integration,maintenance &separation of human resources to the end that individual,organizational & societal objectives are achieved
HRM is concerned with most effective use of people to achieve org.al & individual goals. Acc. To National Institute Of personnel mgmt. in India “it is that part of mgmt which is concerned with people at work & their relationships in the org. It seeks to bring together men & women who make up an enterprise, enabling each to make its own best contribution to its success both as individual & as a member of working group.
Human resource: Knowledge, skill sets, expertise of employees, the adaptability, commitment and loyalty of employees. Skills: The individual abilities of human beings to perform a piece of work. Resource: The stock of assets and skills that belong to a firm at a point of time. Capability: The ability of a bundle of resources to perform an activity; a way of combining assets, people and processes to transform inputs into outputs. Core competencies: Activities that the firm performs especially well when compared to its competitors and through which the firm adds value to its goods and services over a long period of time. Competitive advantage: It comes from a firm's ability to perform activities more distinctively and more effectively than rivals. To attain competitive advantage, firms need to add value to customers and offer a product or service that cannot be easily imitated or copied by rivals (Uniqueness). Value: Sum total of benefits received and costs paid by the customer in a given situation.
Human Resources Management (HRM) The process of managing human resources (human capital and intellectual assets) to achieve an organization’s objectives. “Why Study HRM?” Staffing the organization, designing jobs and teams, developing skillful employees, identifying approaches for improving their performance, and rewarding employee successes—all typically labeled HRM issues— are as relevant to line managers as they are to managers in the HR department.
Core Competencies Integrated knowledge sets within an organization that distinguish it from its competitors and deliver value to customers. Sustained competitive advantage through people is achieved if these human resources: Have value. Are rare and unavailable to competitors. Are difficult to imitate. Are organized for synergy.
OVERALL FRAMEWORK FOR HUMAN RESOURCE MANAGEMENT
Features Individually oriented---to develop potential,encourage &motivate Action oriented----problems of employees solved, not just record keeping. People oriented---both as individuals & groups. Future oriented Pervasive force----+nt in all the org.& at all levels Development oriented
Integrating mechanism Comprehensive function—concerned with many org.al decisions which has an impact on workforce\potential workforce Auxiliary service----to assist & advice the line mgrs. Inter-disciplinary function---inputs from psychology,sociology,anthropology, economics Continuous function
HRM aims at achieving organisational goals, meet the expectations of employees; develop the knowledge, skills and abilities of employees; improve the quality of working life and manage human resources in an ethical and socially responsible manner. Importance of HRM From an organisational standpoint, good HR practices help in attracting and retaining talent, train people for challenging roles, develop their skills and competencies, increase productivity and profits and enhance standard of living
attract and retain talent train people for challenging roles develop skills and competencies promote team spirit develop loyalty and commitment increase productivity and profits improve job satisfaction enhance standard of living generate employment opportunities Good HR Practices help
The field of HRM evolved both in India and elsewhere over a number of years to present level of sophistication and use of proactive methods The industrial revolution Scientific management Trade unionism Human relations movement Human resources approach
Historical Context INDUSTRIAL REVOLUTION New machine brought in, new technology. Worker to a small portion of total job. Specialization increase speed and efficiency. Left workers with dull, boring and monotonous jobs. Employees more keen to meet production target. Government did little to protect interest of workers.
SCIENTIFIC MGMT.-----F.W.TAYLOR systematic analysis & breakdown of work into its smallest mechanical elements & rearranging them into most efficient combination. There should be match between task & person. Employees should be trained. Differential piece rate system for incentives
TRADE UNION HUMAN RELATIONS MOVEMENT Hawthorne experiments demonstrated that productivity was affected not only by the way the jobs were designed & employees rewarded economically but by certain social & psychological factors also. led to supervisory trg. Prgms. support & concern for workers prgms. to strengthen labor –mgmt. relations
HUMAN RESOURCE APPROACH Each individual is unique & complex People do not inherently dislike work if they have established objectives they want to achieve. People can exercise great deal of self direction,self control & creativity. Mgr’s job is to use untapped human potential. Mgr should create a healthy environment. Should encourage.
– Planning – Organising – Directing – Controlling Operative Functions P/HRM Managerial functions: Procurement Job Analysis HR planning Recruitment Selection Placement Induction Internal mobility Development: Training Executive development Career planning Succession planning Human resources development strategies Motivation and Compensation: Job design Work scheduling Motivation Job evaluation Performance and potential appraisal Compensation administration Incentives benefits and services Maintenance: Health Safety Welfare Social security Integration: Grievances Discipline Teams and teamwork Collective bargaining Participation Empowerment Trade unions Employers’ associations Industrial relations Emerging Issues: Personnel records Personnel audit Personnel research HR accounting HRIS Job stress Mentoring International HRM
Concept What is it all about? The Commodity concept Labour was regarded as a commodity to be bought and sold. Wages were based on demand and supply. Government did very little to protect workers. The Factor of Production concept Labour is like any other factor of production, viz, money, materials, land, etc. Workers are like machine tools. The Goodwill concept Welfare measures like safety, first aid, lunch room, rest room will have a positive impact on workers’ productivity The Paternalistic concept/ Paternalism Management must assume a fatherly and protective attitude towards employees. Paternalism does not mean merely providing benefits but it means satisfying various needs of the employees as parents meet the requirements of the children. Cont…
The Humanitarian concept To improve productivity, physical, social and psychological needs of workers must be met. As Mayo and others stated, money is less a factor in determining output, than group standards, group incentives and security. The organisation is a social system that has both economic and social dimensions. The Human Resource concept Employees are the most valuable assets of an organisation. There should be a conscious effort to realise organisational goals by satisfying needs and aspirations of employees. The Emerging conceptEmployees should be accepted as partners in the progress of a company. They should have a feeling that the organisation is their own. To this end, managers must offer better quality of working life and offer opportunities to people to exploit their potential fully. The focus should be on Human Resource Development.
Contract Personnel mgmt. Careful delineation of written contracts HRM Aim to go beyond contract Rules Importance of devising clear rules Can outlook with rules Guide to mgmt. Action ProceduresBusiness need Behavior referentNorms,customs,& practice Values \mission Managerial tasks vis a vis labor MonitoringNurturing Key relationLabor mgmt.Customer
Speed of decision SlowFast Mgmt. RoleTransactionalTransformational Key managersPersonnel/IR specialists General/business /line mgrs. CommunicationIndirect,Slow & downward Direct,fast&both upward & downward SelectionSeparate,margin al task Integrated,key task PayJob evaluation (fixed grades) Performance related Job categories& grades ManyFew Job designDivision of labourTeam work
Conflict handlingReach Temporary truces Manage climate and culture Trg. & Dev.Controlled access to courses Learning companies PhilosophyEmployees are made for rules and regulations Rules and regulations are made for employees NatureConfined to procurement & trg. Of personnel Integrated with the Corporate mgmt.
ApproachWork orientedPeople oriented Level of trustLowHigh OrientationMaintenanceDevelopment StructureIndependent function with independent sub functions Consist of interdependent parts PhilosophyReactiveProactive MotivatorsOn monetary rewards On higher order needs AimTries to improve the efficiency of people and admin. Tries to develop the organization as a whole and its culture
Emerging HR practice Strategic role Proactive Key part of organisational mission Service focus Process-based organisation Cross-functional eams, teamwork most important People as key investments/assets Traditional HR practice Administrative role Reactive Separate, isolated from company mission Production focus Functional organisation Individuals encouraged, singled out for praise, rewards People as expenses
1-10 Competitive advantage through people? Competitive advantage allows a firm to gain an edge over its rivals when competing. It comes from a firm’s unique ability to perform activities more distinctively and more effectively than rivals. HR can be a source of competitive advantage when the talents of people working in the firm are valuable, rare; difficult to imitate and well organised to deliver efficient and effective results.
1-12 Realising the growing importance of HR, a new line of thinking emerged elevating the status of HR to that of a strategic partner both in the formulation of a firm’s strategic as well as in the implementation of business activities. SHRM, simply stated, is the linkage of HRM with strategic goals and objectives with a view to improve business performance and develop organisational cultures that foster innovation and flexibility. Strategic HR differs radically from traditional HR in a number of ways:
1-13 Point of distinction Focus Role of HR Initiatives Time horizon Control Job design Key investments Accountability Responsibility for HR Traditional HR Employee Relations Transactional change follower and respondent Slow, reactive, fragmented Short-term Bureaucratic-roles, policies, procedures Tight division of labour; independence, specialisation Capital, products Cost centre Staff specialists Strategic HR Partnerships with internal and external customers Transformational change leader and initiator Fast, proactive and integrated Short, medium and long (as required) Organic-flexible, whatever is necessary to succeed Broad, flexible, cross-training teams People, knowledge Investment centre Line managers
The most pressing competitive issues facing firms: 1. Going global 2. Embracing new technology 3. Managing change 4. Managing talent, or human capital 5. Responding to the market 6. Containing costs
Globalization The trend toward opening up foreign markets to international trade and investment Impact of globalization “Anything, anywhere, anytime” markets Partnerships with foreign firms Lower trade and tariff barriers WTO and GATT
Corporate Social Responsibility The responsibility of the firm to act in the best interests of the people and communities affected by its activities Impact on HRM Different geographies, cultures, laws, and business practices Issues: Identifying capable managers and workers Developing foreign culture and work practice training programs. Adjusting compensation plans for overseas work
Knowledge Workers Workers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving. Knowledge-Based Training Online instruction “Just-in-time” learning via the Internet on company intranets
Human Resources Information System (HRIS) A computerized system that provides current and accurate data for the purposes of control and decision making. Benefits: Store and retrieve of large quantities of data. Combine and reconfigure data to create new information. Institutionalization of organizational knowledge. Easier communications. Lower administrative costs, increased productivity and response times.
Fit of the application to the firm’s employee base. Ability to upgrade Increased efficiency and time savings Compatibility with current systems Availability of technical support Time required to implement and train staff members to use HRIS Initial and annual maintenance costs Training time required for HR and payroll
Types of Change Reactive change Change that occurs after external forces have already affected performance Proactive change Change initiated to take advantage of targeted opportunities Managing Change through HR Formal change management programs help to keep employees focused on the success of the business.
Why Change Efforts Fail: 1. Not establishing a sense of urgency. 2. Not creating a powerful coalition to guide the effort. 3. Lacking leaders who have a vision. 4. Lacking leaders who communicate the vision. 5. Not removing obstacles to the new vision. 6. Not systematically planning for and creating short- term “wins.” 7. Declaring victory too soon. 8. Not anchoring changes in the corporate culture.
Human Capital The knowledge, skills, and capabilities of individuals that have economic value to an organization. Valuable because capital: is based on company-specific skills. is gained through long-term experience. can be expanded through development.
Total Quality Management (TQM) A set of principles and practices whose core ideas include understanding customer needs, doing things right the first time, and striving for continuous improvement. Six Sigma
Reengineering and HRM Fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in cost, quality, service, and speed. Requires that managers create an environment for change. Depends on effective leadership and communication processes. Requires that administrative systems be reviewed and modified.
Downsizing The planned elimination of jobs (“head count”). Layoffs Outsourcing Contracting outside the organization to have work done that formerly was done by internal employees. Offshoring The business practice of sending jobs to other countries.
Employee Leasing Employees are hired by a leasing company (which handles all HR-related activities) and contractis with a company to lease the employees.
Hidden Costs of Layoff rehiring costs Pension and benefit payoffs Potential lawsuits from aggrieved workers Loss of institutional memory and trust in management Lack of staffers when the economy rebounds
Benefits of a No-Layoff Policy A fiercely loyal,more productive workforce Higher customer satisfaction Readiness to snap back with the economy A recruiting edge Workers who aren’t afraid to innovate, knowing their jobs are safe.
MODEL OF DIVERSITY MANAGEMENT STRATEGY
Cultural Changes Employee Rights Concern for Privacy Attitudes towards Work Balancing Work and Family
Responsibilities 1. Advice and counsel 2. Service 3. Policy formulation and implementation 4. Employee advocacy Competencies 1. Business mastery 2. HR mastery 3. Change mastery 4. Personal credibility