What managers are expected to do ?

• Remain profitable, competitive – Adapt to changing environments,

requirements/demands of customers/clients• Deliver Services

– Provide high quality services to the satisfaction of clients efficiently and effectively

What are the changing trends in environmental factors of organisations

and what are the implications for

managers?

External factors

• Political• Economic• Socio-cultural• Technological• Labour Market• Industry Characteristics

Political changes • Democratic Governance-people’s rights,services• GNH-State; Integrity, Transparency, Efficiency, Effectiveness,

Quality Customer service • Values: (Tsa-wa-sum, Lay Jum Dey,Tha Damtshig)

– Integrity, trust, responsibility, discipline, dedication, deligence and cooperation

– Customer care, courtesy, patience, politeness, fairness and friendliness

– Professional Knowledge, skill, creativity, innovativeness, accountability and impartiality

– Leadership values as visionary, dynamism, receptiveness and approachability

• Commercial Culture(DHI)– (GG +, 2005)

Legal Changes– BCSR- Act – Labour and Employment Act

• Forced labour• Child labour• Discrimination of employees

– Job applicant and transfer, promotion, demotion, pay working conditions• Sexual harassment• Employment contract• Wages• Hrs of work• Health and safety• Workers association• Disputes resolution

Economic Changes

• Liberalisation- FDI• Membership of WTO• Economic Dev Policy- Private Sector

Development– Service Hub

Socio-Cultural Changes• Change in labour force structure

– Increasing Women in the work-force– Increasing “Educated lot”

• Concept of work– Varying motives to work– Varying nature of work

• Values:– Work and life-balance– Oppose intolerance– Tendency to question tight system of control

• Attitude towards work– Life-long emp Vs enjoyable, challenging, paying jobs (psychological contract)

Technological Changes

• Advent of ICT-info access• E-business• Changed nature of work

– Flexible orgaisations– Virtual Organisations– (tele-commuting)

Managerial challenge?

• Serve Interests and objectives of the organisations

• Meet interests and needs of employees

• Managerial perspective– Ensure supply and demand

of labour– Utilize people– Develop and train– Order and control– Generate commitment

• Employee perspective– Treated as human being – Safety and security– Growth and development– Fair Payments and rewards

The Challenge in Managing people

• What motivates people?• What people want from work and what is the best

way to reward?• How to source and retain competent people?• What encourages discretionary effort?• How to treat employees fairly without

compromising organisational goals?• How to eliminate conflict and build commitment?

• Adapted from Banfield and Kay (2008)

Internal factors

• Technology• Structure• Size• Organisational life-cycle stage

– Start-up, growth, maturity, decline, revival• Business strategy

– Prospectors, defenders

Impact of Env changes

• Structural Change– Growth of Service Sectors, Knowledge economy,

• Organisational Change– Cost Reduction-profitability, doing more with less– De-bureaucratisation– Responsiveness- – Flexible firm-nature of jobs

Defining HRM

• The policies, practices, and systems that influence employees’ behavior, attitudes, and performance. (Prof C W Fontaine)

• Productive use of people in achieving organizations strategic objectives and satisfying individual employee needs (R J Stone)

Defining HRM

• “…strategic and coherent approach to the management of an organisation’s most valued assets- the people working there who individually and collectively contribute to the achievement of its objectives.”

• (Armstrong and Baron, 2008)Handbook of Strategic HRM

Summary• HRM comprises of:

– Specific practices– Formal HR policies which directly and partially

constrain such practices– Overarching HR philosophy which specify values that

inform policies and practiceThis affect attraction, development, motivation and

retention of employees who ensure effective functioning and survival of organisations and its members

Jackson & Schuler

…….Summary

• HRM involves management decisions related to policies and practices which together shape the employment relationship and are aimed at achieving individual, organisational and societal goals

• HRM in organisation is more than simply a bundle of HR practices. It includes roles of HR Professionals , CEO people centered vision, front-line managers belief in HRM etc– Boselie, P

Versions of HRM

• “Hard HRM”– Emphasizes that people are important resource

through which organisations achieve competetive advantage

– Regards people as human capital from which return can be obtained by investing judiciously in their development

Versions of HRM

• Soft HRM• “treats employees as valued assets, a source

of competitive advantage through their commitment, adaptability and high quality skills etc

• Stresses need to gain “ hearts and minds’ of employees –involvement, commn, etc.

Models of HRM

• Matching Model• Harvard Model • Commitment Model

Matching Model

• “ HR system and organisation structure should be managed in a way that is congruent with organizational strategy.”– “there is a human resource cycle which consists of

four generic processes that are performed in all organisations”

Fomburn et al –Michigan School (1984)

The HRM Cycle

Selection Appraisal Performance

Rewards

Development

Harvard Framework of HRM

Stakeholders Interests:

ShareholdersManagementEmployee GroupsGovernmentCommunityUnions

Situational Factors:Work Force CharacteristicsBusiness strategy and conditionsManagement PhilosophyLabour MarketUnionsTask TechnologyLaws and societal values

HRM Policy Choices:

Employee InfluenceHR FlowsRewards systemsWork systems

HR Outcomes:

CommitmentCompetenceCongruenceCost effectiveness

Long-Term Consequences

Individual well beingOrganizational effectivenessSocietal well-being

Beer et al 1984 in Armstrong and Baron (2008)

Commitment Model of HRM

• “policies of mutuality will elicit commitment which in turn will yield both better economic performance and greater human development”.

• Walton (1985)

How does people management link to performance?

What is Performance?

• Performance:– Financial Performance (Corporate profitability

&market Performance )• Net profit, RoI, RoA, Profit margin, asset turnover,

return on equity, economic value added• Sales volume, market share

– Non-Financial Performance (operational measures)

• Unit cost, quality, delivery, flexibility and speed• Theriou & Chatzoglou (2008)

How HR Practice links with organizational performance

Business Strategy

HR Strategy

HR Outcomes•Competence•Commitment•Flexibility

Quality of goods and

services

Productivity

Financial Performance

HR Effectiveness

HR Practices

Source: Guest, Michie, Sheehan, Conway and Metochi, (2000), CIPD

The People and Performance Model;(Prucell, Kinnie, Hutchinson, Rayton and Swart (2003); Understanding the people and Performance Link: Unlocking the Black Box, CIPD Research Report, London)

Questions?