Session - Introduction to HRM
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Transcript of 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.
Functions of the HR Manager
Staff (assist and advise) functions Assisting and advising line managers is
the heart of the HR manager’s job.
Functions of the HR Manager
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
The Changing Role Of HR Management
Strategic HRM Formulating HR policies and introducing
practices that produce staff competencies and behaviors that the company needs to achieve its strategic goals.
The Changing Role Of HR Management
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.
The Changing Role Of HR Management
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
The Changing Role Of HR Management
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
The Changing Role Of HR Management
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
The Changing Role Of HR Management
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
The Changing Role Of HR Management
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
The Changing Role Of HR Management
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.
The Changing Role Of HR Management
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
The Changing Role Of HR Management
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
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–58
Measuring HRM Team’s Performance Metrics
○ 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
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–59
Measuring HRM Team’s Performance Metrics
○ 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.
The Changing Role Of HR Management
© 2009 Pearson Education South Asia. All rights reserved. 1–60
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
The Changing Role Of HR Management
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)
The Changing Role Of HR Management
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.