1HUMAN RESOURSE MANAGEMENT & STRATEGIC HRM Meaning & definitionNature & scopeSignificanceFunctions & objectivesEvolution of HRMContemporary issuesRole of personnel managerHRM & strategic HRM
2HUMAN RESOURSE MANAGEMENT Managing HR important becauseHR are heterogenousModern employees more educatedHimself determines what he contributesDrucker---Of all the resources available i.e.mgmt. of materials,methods, money machine most imp.is M for MEN
3HR 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
4HRM is concerned with most effective use of people to achieve org 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.
5Human resource: Knowledge, skill sets, expertise of employees, the 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.
6Why Study Human Resources Management 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.
7Competitive Advantage through People Core CompetenciesIntegrated 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.
9FeaturesIndividually oriented---to develop potential,encourage &motivateAction oriented----problems of employees solved, not just record keeping.People oriented---both as individuals & groups.Future orientedPervasive force----+nt in all the org.& at all levelsDevelopment oriented
10Integrating mechanism Comprehensive function—concerned with many org.al decisions which has an impact on workforce\potential workforceAuxiliary service----to assist & advice the line mgrs.Inter-disciplinary function---inputs from psychology,sociology,anthropology, economicsContinuous function
11Objectives of HRMHRM 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 HRMFrom 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
12Importance of HRM attract and retain talent train people for challenging rolesdevelop skills and competenciespromote team spiritdevelop loyalty and commitmentincrease productivity and profitsimprove job satisfactionenhance standard of livinggenerate employment opportunitiesGood HR Practices help
13The industrial revolution Scientific management Trade unionism EVOLUTION OF HRMThe field of HRM evolved both in India and elsewhere over a number of years to present level of sophistication and use of proactive methodsThe industrial revolutionScientific managementTrade unionismHuman relations movementHuman resources approach
14Historical 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.
15SCIENTIFIC 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
16TRADE UNIONHUMAN RELATIONS MOVEMENTHawthorne 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 workersprgms. to strengthen labor –mgmt. relations
17HUMAN RESOURCE APPROACH Each individual is unique & complexPeople 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.
18Functions of HRM P/HRM Operative Functions Managerial functions: ProcurementJob AnalysisHR planningRecruitmentSelectionPlacementInductionInternal mobilityDevelopment:TrainingExecutive developmentCareer planningSuccessionplanningHuman resources development strategiesMotivation and Compensation:Job designWork schedulingMotivationJob evaluationPerformance and potential appraisalCompensation administrationIncentives benefits and servicesMaintenance:HealthSafetyWelfareSocial securityEmerging Issues:Personnel recordsPersonnel auditPersonnel researchHR accountingHRISJob stressMentoringInternational HRM– Planning– Organising– Directing– ControllingIntegration:GrievancesDisciplineTeams and teamworkCollective bargainingParticipationEmpowermentTrade unionsEmployers’ associationsIndustrial relations
19Evolution of the Personnel Function ConceptWhat is it all about?The Commodity conceptLabour 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 conceptLabour is like any other factor of production, viz, money, materials, land, etc. Workers are like machine tools.Welfare measures like safety, first aid, lunch room, rest room will have a positive impact on workers’ productivityThe Goodwill conceptThe Paternalistic concept/ PaternalismManagement 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…
20Evolution of the Personnel Function The Humanitarian conceptTo 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 conceptEmployees 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.
21Personnel mgmt. Vs HRM HRM Aim to go beyond contract Rules Careful delineation of written contractsHRMAim to go beyond contractRulesImportance of devising clear rulesCan outlook with rulesGuide to mgmt. ActionProceduresBusiness needBehavior referentNorms,customs,&practiceValues \missionManagerial tasks vis a vis laborMonitoringNurturingKey relationLabor mgmt.Customer
22Personnel/IR specialists General/business /line mgrs. Communication Speed of decisionSlowFastMgmt. RoleTransactionalTransformationalKey managersPersonnel/IR specialistsGeneral/business /line mgrs.CommunicationIndirect ,Slow & downwardDirect,fast&both upward & downwardSelectionSeparate,marginal taskIntegrated,key taskPayJob evaluation (fixed grades)Performance relatedJob categories& gradesManyFewJob designDivision of labourTeam work
23Conflict handlingReach Temporary trucesManage climate and cultureTrg. & Dev.Controlled access to coursesLearning companiesPhilosophyEmployees are made for rules and regulationsRules and regulations are made for employeesNatureConfined to procurement & trg. Of personnelIntegrated with the Corporate mgmt.
24ApproachWork orientedPeople orientedLevel of trustLowHighOrientationMaintenanceDevelopmentStructureIndependent function with independent sub functionsConsist of interdependent partsPhilosophyReactiveProactiveMotivatorsOn monetary rewardsOn higher order needsAimTries to improve the efficiency of people and admin.Tries to develop the organization as a whole and its culture
25Shifts in HR management in India Emerging HR practiceStrategic roleProactiveKey part of organisational missionService focusProcess-based organisationCross-functional eams, teamwork most importantPeople as key investments/assetsTraditional HR practiceAdministrative roleReactiveSeparate, isolated from company missionProduction focusFunctional organisationIndividuals encouraged, singled out for praise, rewardsPeople as expenses
26Strategic Human Resource Management 1-10Strategic Human Resource ManagementCompetitive 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.
27Strategic Human Resource Management 1-12Strategic Human Resource ManagementRealising 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:
28Traditional HR vs. Strategic HR 1-13Traditional HR vs. Strategic HRPoint of distinctionFocusRole of HRInitiativesTime horizonControlJob designKey investmentsAccountabilityResponsibility for HRTraditional HREmployee RelationsTransactional change follower and respondentSlow, reactive, fragmentedShort-termBureaucratic-roles, policies, proceduresTight division of labour; independence, specialisationCapital, productsCost centreStaff specialistsStrategic HRPartnerships with internal and external customersTransformational change leader and initiatorFast, proactive and integratedShort, medium and long (as required)Organic-flexible, whatever is necessary to succeedBroad, flexible, cross-training teamsPeople, knowledgeInvestment centreLine managers
29Competitive Challenges and Human Resources Management The most pressing competitive issues facing firms:Going globalEmbracing new technologyManaging changeManaging talent, or human capitalResponding to the marketContaining costs
30Challenge 1: Going Global GlobalizationThe trend toward opening up foreign markets to international trade and investmentImpact of globalization“Anything, anywhere, anytime” marketsPartnerships with foreign firmsLower trade and tariff barriersWTO and GATT
31Challenge 1: Going Global Corporate Social ResponsibilityThe responsibility of the firm to act in the best interests of the people and communities affected by its activitiesImpact on HRMDifferent geographies, cultures, laws, and business practicesIssues:Identifying capable managers and workersDeveloping foreign culture and work practice training programs.Adjusting compensation plans for overseas work
32Challenge 2: Embracing New Technology Knowledge WorkersWorkers whose responsibilities extend beyond the physical execution of work to include planning, decision making, and problem solving.Knowledge-Based TrainingOnline instruction“Just-in-time” learning via the Internet on company intranets
33Influence of Technology in HRM 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.
34HRM IT Investment Factors Fit of the application to the firm’s employee base.Ability to upgrade Increased efficiency and time savingsCompatibility with current systemsAvailability of technical supportTime required to implement and train staff members to use HRISInitial and annual maintenance costsTraining time required for HR and payroll
35Challenge 3: Managing Change Types of ChangeReactive changeChange that occurs after external forces have already affected performanceProactive changeChange initiated to take advantage of targeted opportunitiesManaging Change through HRFormal change management programs help to keep employees focused on the success of the business.
36Challenge 3: Managing Change Why Change Efforts Fail:Not establishing a sense of urgency.Not creating a powerful coalition to guide the effort.Lacking leaders who have a vision.Lacking leaders who communicate the vision.Not removing obstacles to the new vision.Not systematically planning for and creating short-term “wins.”Declaring victory too soon.Not anchoring changes in the corporate culture.
37Challenge 4: Managing Talent, or 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.
38Challenge 5: Responding to the Market 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
39Challenge 5: Responding to the Market Reengineering and HRMFundamental 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.
40Challenge 6: Containing Costs DownsizingThe planned elimination of jobs (“head count”).LayoffsOutsourcingContracting outside the organization to have work done that formerly was done by internal employees.OffshoringThe business practice of sending jobs to other countries.
41Challenge 6: Containing Costs (cont’d) Employee LeasingEmployees are hired by a leasing company (which handles all HR-related activities) and contractis with a company to lease the employees.
42Challenge 6: Containing Costs Hidden Costs of Layoffrehiring costsPension and benefit payoffsPotential lawsuits from aggrieved workersLoss of institutional memory and trust in managementLack of staffers when the economy rebounds
43Challenge 6: Containing Costs Benefits of a No-Layoff PolicyA fiercely loyal,more productive workforceHigher customer satisfactionReadiness to snap back with the economyA recruiting edgeWorkers who aren’t afraid to innovate, knowing their jobs are safe.
48Attitudes towards Work Balancing Work and Family Cultural ChangesEmployee RightsConcern for PrivacyAttitudes towards WorkBalancing Work and FamilyCultural Changes
49Qualities of Human Resources Managers ResponsibilitiesAdvice and counselServicePolicy formulation and implementationEmployee advocacyCompetenciesBusiness masteryHR masteryChange masteryPersonal credibility