Unit 1

Perceptive in Human Resource Management Introduction

Human Resource Management Human Resource Management is the process of efficiently achieving the objectives of the organization with and through people. It involves all management decisions and practices that directly affect or influence the HR who works for the organizations. It is concerned with the people s dimension in management. It can be defined as a process of procuring, developing, motivating and maintaining competent HR in an organization so that goals can be achieved in an efficient and effective manner. Organization is made up of 4 resources. Men, Material, money & machinery. Only one out of them is living & others are non living. It is the people who make use of non human resources. Hence people are the most significant resources in an organization. For any organization, proper management of human resources is very important for its growth, survival, profitability, competitiveness, and flexibility in adapting to changing conditions. Business houses are made or broken in the long run not by markets or capital, patents or equipments, but by men. - L.F. Urwick Organizations are made and staffed by people. Without people organizations can not exist. Organization is nothing without human resources. On an average 25% of production cost and 40% of selling cost constitute the HR cost in a manufacturing organization. Thus the business success depends on how best they bring right kind of people, develop them and maintain them. Human resources are heterogeneous in the sense that they differ in personality, emotions, values, attitudes motives etc. Their behaviour is unpredictable. While other resources depreciate HR appreciate with time. Better educated, more skilled, better aware of their interest and rights are also some distinguishing features of HR. HRM practices can bring an important practical difference in terms of three key organizational outcomes productivity, quality of work life, and profit. These features make it difficult for managers to use them in efficient and effective manner. Highly complex and competitive business environment makes attracting and retaining qualified and competent employees very difficult and challenging for the managers. The need of the new perspective is to have right people for right jobs. This Mantra offers the organization a competitive edge or core competency to survive and thrive in the competitive world. HRM is an art of managing people at work in such a manner that they give their best to the organization. The Importance of HRM Prior to the mid-60 s personnel department in organizations were perceived as the health and happiness crew . There primary focus was either paper compliance or company picnics. The rapid change in the legal landscape, the workforce, and a emphasis on productivity changed the HR function Today HRM must balance two primary responsibilities: being a strategic partner with business, and a representative of employees.

Four basic function of HRM Staffing (getting people) Training and development (preparing them) Motivation (stimulating them) Maintenance (keeping them) HRM HRM can be viewed in one of two ways. First, HRM is a staff, or support function for the organization. Second, HRM is a function of every Managers job. The Dynamic Environment of HRM Many events have shaped the HRM field. Globalization Work-force Diversity Changing Skills Requirements Corporate Rightsizing Continuous Improvement Reengineering Decentralized work sites Employee Involvement HRM Areas Employment: The main thrust of the employment function is to promote the activities of the staffing function. It is important to note that the employment specialist s roles is not to make the hiring decision, but to coordinate the effort with line management. The Training and Development section of an organization is often responsible for helping employees to maximize their potential. More importantly the training and development members are often better know as the organizations internal change agents. Compensation and Benefits focus on both the staffing side and the maintenance portion of HRM. Offering a competitive wage and benefit package is a moving target. Determining what different position on are worth to the organization is as much a science as an art. Yet often described as the most objective area in a subjective field. Employee Relations deals with maintenance function. Primary function of ensuring open communications permeates the organization. Employee Relations Specialist ensures helps employees understand policies and procedures. Labor Relations function is different than Employee relations in that it is concerned with the negotiation, interpretation, and compliance with the labor contract. The latest trend in Labor relations is interest based bargaining and labor management groups. As we move into the different areas of Human Resource Management we need to understand that it is based on four primary functions; staffing, training and development, motivation, and maintenance. All areas under HRM can be aligned with one of these functions. Objectives Objectives are bench marks against which actions are evaluated. The primary objective of HRM is to ensure the availability of right people for right jobs so as the organizational objectives are achieved.

Sub Objectives To help the organisation to attain its goals effectively and efficiently by providing competent and motivated employees. Davis has classified the objectives of HRM into 4 categories as Societal, Organizational, Personal, labour union objectives. 1. Societal: To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. It includes: To provide more employment opportunities To provide maximum productivity To provide maximum material and mental satisfaction to workforce. To control the wastage of effort To help maintain ethical policies and behaviour inside and outside organization. To establish and maintain cordial relations between employees and management. To reconcile individual and group goals with organizational goals. 2. Organizational objectives: To recognize the role of HRM in bringing about organizational effectiveness. It includes: To help the organization to reach its goals. To efficiently utilize the skills and abilities of the workforce To communicate HRM policies to every one in the organization To develop and maintain quality of work life. To provide well trained and well motivated employees to the organization. Functional objectives: To maintain the department s contribution at a level appropriate to the organization s needs. 3. Personal Objectives: To assist the employees in achieving their personal goals, so that they enhance the individual s contribution to the organization. It includes: To provide adequate compensation to employees To provide job security To provide facilities for training and development To increase employees job satisfaction To provide conducive working environment 4. Labor Union Objectives: It Includes: To recognize the labor unions To establish the personnel policies in consultation with the union To create congenial environment with unions so as to maintain the spirit of self discipline and cooperation with the management To utilize the available HR effectively To increase the employee s job satisfaction and self- actualization To develop and maintain (QWL) which makes employment in the organization a desirable personal and social situation Scope The scope of HRM is very vast. It includes all activities starting from man power planning till employees leave the organization. The scope consists of Acquisition, development,

maintenance & control of human resources in an organization. National institute of personnel management, Calcutta has specified the scope as: The labour or personnel aspect: Manpower planning, recruitment, selection, training, layoff & retrenchment, remuneration, incentives etc. Welfare aspect: It deals with working conditions, and amenities like canteen, cretch, housing transport, education health & safety etc. Industrial relations aspect: union management Relations, collective bargaining, grievances, etc. Functions HRM performs a number of functions and activities for the achievement of the objectives of HRM. They fall in to the following categories: Organizational planning and development Strategic HR planning Job Analysis Training & Development Compensation and benefits Staffing Performance appraisal Health and safety HRIS Union Relations Employee relations Functions of HRM according to Edwin Flippo Managerial: Planning, staffing, organizing, directing, controlling Operative: Procurement, Development, Compensation, Integration, Maintenance Procurement: Job analysis, HR planning, recruitment, selection, placement, induction, transfer, promotion, separation Development: Training, executive development. Career planning, performance management. Compensation: job evaluation, wage & salary administration, Bonus & incentives payroll Integration: Motivation, job satisfaction, grievances handling, collective bargaining, discipline, conflict management Maintenance: safety, social security, welfare schemes, personnel records, personnel research, personnel audit.

Managers Role
Manager It is a role from which some work has to be delegated to the subordinate roles. The occupant of this role is accountable for his subordinates work & must at least have authority to veto the appointment of persons to the sub-ordinates role to insist that they be removed from these roles if they are unsatisfactory & to determine which portions of his own work shall be carried out by each subordinate. This definition reminds us of the changing nature of management the extent of the manager s individual authority over subordinate staff. Tasks and contributions of a manager Sets Objectives Organizes Motivates & communicates Measures Develops people Managing means leading, making things happen through people Attributes & qualities of a manager Technical competence Social & human skill Conceptual ability Qualities Basic knowledge & information is needed by the manager in making decisions and taking actions. It is the foundation level. Command of basic facts Relevant professional understanding Specific skills & attributes directly affect behavior and performance Continuing sensitivity to events Analytical, problem solving, decision & judgment making skills Social skills & abilities Emotional resilience Pro activity Problem solving skills Competence in HR functional areas Creativity Mental agility Balanced learning habits Self knowledge Key Roles for HR Manager Business person Shaper of change in accordance with business Consultant to organization Strategy/ business planner Talent manager HR asset manager/cost controller

Who is responsible for managing HRM In most organizations two groups perform HR activities. HR Managers/Specialists Operating Managers HR Generalists: A person who is responsible for performing a variety of HR activities. He must maintain an adequate knowledge of all HR activities. HR Specialists: Individuals who have in depth knowledge and expertise in a limited area Managerial Roles Interpersonal Figurehead, leader, Liaison Informational role Monitor, disseminator, spokesperson Decisional roles Entrepreneurial Disturbance handler Resource allocator Negotiator Tasks Providing purposeful direction to the firm Managing survival & growth Maintaining firm s efficiency Meeting the challenges of competition Managing for innovation Building human organization Retaining talent & inculcating loyalty. Sustaining leadership effectiveness Maintaining balance between creativity & conformity Postponing managerial obsolescence Meeting the challenge of change Coping with tech. Sophistication Coping with public criticism Coping with high aspiration Maintaining relations with society segments Why organization need managers? To ensure that org. serve its basic purpose. To design & maintain the stability of operations To take charge of strategy making To ensure the organization serves the ends of people who control it To serve as a key information link between org. & environment As formal authority to operate the organization s status system. Significant activities of successful managers Network building 19 % Communication 29 % Traditional management 32% time HRM 20% Manager s of future -- Key strategies Developing Leadership

Driving radical change Reshaping culture Dividing to rule Exploiting the organization Keeping the competitive edge Achieving constant renewal Managing the motivators Making team working work Achieving total quality management

Evolution of HRM
Evolution of HRM (Berridge, 1992) 1. Welfare (c1915-1920s) Providing employees with facilities such as canteens and looking after their personal interests Welfare officers first appeared in the munitions factories of World War I. 2. Personnel administration (1930s) In addition to welfare, providing support to management in the form of recruitment, basic training and record keeping. 3. Personnel management, the developing phase (1940s and 50s) Whole range of personnel services provided including, in addition to recruitment and record keeping, craft and supervisory training Welfare officers become staff or labour officers. Labour officers increasingly involved in industrial relations. 4. Personnel management, the mature phase (1960s and 70s) Services provided extended into organisation and management development, systematic training and manpower planning More sophisticated selection, training, salary administration and appraisal (MBO) techniques Under the influence of the behavioural scientists some businesses undertook organisation development programmes and job enrichment Emphasis on industrial relations - saw formal productivity bargaining come and go Directors appearing more frequently on boards - although involvement in strategy limited Increase in employment legislation meant personnel professionals had to become employment law experts Personnel managers adopted more professional role. 5. Human resource management, phase one (1980s) Concept of HRM emerged from the writing of America academics and during the entrepreneurial 1980s was adopted by personnel specialists who were facing the enterprise culture and the market economy Major concerns included how personnel management could make an impact on the bottom line - HRM approaches integrated HR and business strategy Personnel management became more business and management orientated - decade saw the rise of performance-related pay Development of performance management systems

Industrial relations became less significant as trade union power declined Personnel director expected to act as a business partner taking an evenhanded stance on the needs of the organisation and its employees. 6. Human resource management, phase two (1990s) 1990s began with a reaction against the enterprise culture with its emphasis on greed and individualism Virtues of teamwork, empowerment and continuous development in the learning organisation were extolled The role of HR in total quality initiatives became more important Development of more sophisticated approaches to processes such as culture management, performance and reward management, performance-related pay and management development Recession meant leaner, more flexible and delayered organisations and the concept of a job for life was no longer the norm Personnel directors often involved in redundancy or downsizing exercises or managing the results of a business process re-engineering study Importance of being strategic Personnel specialists took on role of internal consultant - concerned with benchmarking in order to identify and emulate best practice More personnel work was outsourced.

Personnel or Human Resource management? Personnel management is workforce centred, directed mainly at the organisation s employees Finding and training staff Arranging for payment Explaining management s expectations Justifying management s actions Satisfying employees work-related needs Dealing with employees problems Seeking to modify management action that could produce unwelcome employee response. Premise is that the people who work in the organisation are an inflexible resource compared to cash and materials Personnel, although a management function, is never totally identified with management interests - always some degree of being in-between management and employees. Human Resource management is Resource-centred, directed mainly at management Needs for human resources (not necessarily Employees) to be provided and deployed Demand rather than supply is emphasised Greater emphasis on planning, monitoring and control, rather than mediation Problem-solving on HR issues is with other members of management rather than with employees or their representatives Totally identified with management interests - top management driven and management-orientated activity Relatively distant from the workforce as a whole as employee interests can only be enhanced through effective overall management Performance and delivery of HRM is a line management responsibility Need for strategic fit - integration of HR and business activities

Importance on gaining commitment to organisation s mission and values Provision of mutually supporting employment policies and practices Importance attached to strong cultures and values Performance-orientated - need for higher levels of achievement to meet new challenges Individual rather than collective approach to employee relations Flexible roles and emphasis on teamwork Strong emphasis on quality and customer satisfaction Rewards are differentiated according to performance, competence or skill Distinction between hard and soft versions of HRM: - Soft HRM emphasises communication, motivation and leadership (Human Relations School) - Hard HRM emphasises the quantitative, calculative and businessstrategic aspects of managing the head count resource. Ideas understanding Personnel management and Human Resource management (Torrington and Hall, 1991) Personnel management: People have a right to proper treatment as dignified human beings while at work and employees are only effective when their job-related needs are met This will not happen without personnel management intervention in the everyday manager/subordinate relationships Personnel managers often involve directly in the relationship between other managers and their subordinates because line managers do not see the personnel aspects of management as central to their role. Human Resource management Management of human resources is the same as any other aspect of management and cannot be separated out for specialists to deal with People have a right to proper treatment as dignified human beings while at work and they will be effective when their personal career and competence needs are met within a context of efficient management and a mutually respectful working relationship Personnel specialist role is concerned with manpower planning, providing specialist support to other managers and contributing to major strategic change. Old wine in new bottles? Just a set of initials? Similarities: Personnel management strategies and HRM strategies flow from the business strategy Both recognize that line managers are responsible for managing people personnel function provides the necessary advice and support services Identical with regard to respect for the individual, balancing organisational and individual needs and developing people both for personal and organisational objectives Both recognise their essential function of matching people to ever-changing business requirements Same range of techniques are used e.g. selection, training, management development, reward management Personnel management and soft version of HRM attach importance to the process of involvement, participation and communication. Differences

Can be seen as a matter of emphasis and approach rather than one of substance Legge (1989) suggests: - Personnel management is aimed primarily at non-managers, whereas HRM is less clearly focused but more concerned with managers. - HRM is more of an integrated line management activity whereas personnel management seeks to influence line management. - HRM emphasises the importance of senior management being involved in the management of culture Strategic nature of HRM - some writers feel that traditional personnel management was never really involved in the strategic areas of business. Inaccurate to suggest that one has taken over from the other or that one is modern and one is old-fashioned Both are usually present in one organisation, sometimes in one person - this can cause tension and ambiguity Perhaps it is best to regard HRM as simply a notion of how people can best be managed in the interests of the organisation. HRM can be seen as an approach to personnel management which is shared between line managers and personnel specialists and which emphasises: - The importance of human resources as assets rather than costs - The strategic nature of personnel management as a process which enables the organisation to achieve its objectives and provide for the needs of its stakeholders. Personnel management Vs Human Resource management There is a tendency for HRM to increase at the expense of personnel management. (Torrington and Hall, 1991:16) Reasons for change: Devolution of personnel duties to line managers Workplace no longer so significant as a source of personal self-esteem and as an arena for achieving personal objectives HRM provides a repositioning of the personnel management to make it more influential Tendency for personnel managers to become deployers of resources and knowledgeable about sources rather than just deployers of skills and knowledgeable about people Reduced assertiveness of trade unions therefore less likelihood of industrial action Avoidance of long-term commitments other than to key staff Emphasis of employment legislation shifted from employee rights towards trade union containment Increasing need for personnel activity to be justified in cost terms.

Human Resource Policies

HR Policies A policy is a plan of action. It is a predetermined, selected, course established as a guide towards accepted goals and objectives. It is a man-made rule of pre-determined course of action that is established to guide the performance of work towards the organizational objectives. Personnel policies are those that individuals have developed to keep them on track towards their personnel objectives. Personnel policies refer to principles and rules of conduct which formulate redefine break into details and decide a no. of actions that govern the relationship of employees in the attainment of organizational objectives. They serve as a road map for HR managers and line managers. Aims and objectives of personnel policies To enable an organization to carry out the main objectives. To ensure that employees are informed of these items of policy and to ensure their cooperation. To provide an adequate competent and trained personnel for all levels and motivate them. To protect the common interests of all the parties and recognize the trade union. To provide for a consultative participation by the employees in the mgt. To provide an efficient consultative service. To establish conditions for mutual confidence and avoid confusion between mgt. & employees. To provide security of employment to workers. To provide an opportunity for growth within the organization to persons who are willing to learn. To provide for payment of fair & adequate wages. To recognize the achievements of employees by offering non monetary incentives. To create a sense of responsibility on the part of those in authority for the claims of employees as human beings. Principles of personnel Policies Put the right man in the right place. Train everyone for the job to be done. Make the organization a coordinated team. Supply the right tools and right conditions of work. Give security with opportunity, incentive recognition. Look ahead, plan ahead for more and better things.

Elements of personnel Policies History of company s growth Employment practices and conditions of employment Grievances redressal procedure Safety rules General practices Communication media Employee financial aid Educational opportunities

Vacation with pay Public relations Characteristics of a sound personnel policy It should be definite, clear, positive and easily understood by everyone. It should be written in order to preserve it against loss. It must be reasonably stable but not rigid. It must be periodically revised, evaluated, assessed and revised. It must be supplementary to the overall policy of the organization. It should recognize the desire of workers. It should be formulated with due regard to the interests of all the concerned parties. It should be the result of careful analysis of all facts. It must provide a 2 way communication system between mgt. and employees. It must be progressive and enlightened. It should be uniform through out the organization. It should be consistent with the public policy. Origin & sources of personnel policies The past and present practice of the organization. The prevailing practices among sister organizations. The attitudes ideals and philosophy of the top mgt. The knowledge gained from handling previous personnel problems. Employees suggestions and complaints. Collective bargaining programmes. Changes in country s economy. The goals of the organization. Types of policies Functional policies: Those policies which are grouped for different categories of personnel e.g. for the management dealing with personnel planning, organizing controlling or for management dealing with procurement development and utilization of manpower. Centralized policies: Framed for companies with several locations. They are formulated at the head office and apply through out the organisation.

Computer Applications in HRM

Computer Applications in HRM Managing Human resources effectively requires a great deal of information. The success of HRM depends largely on its ability to collect, store and evaluate large amount of information about its human resources. Mechanical techniques of dealing with these large amount of information are inadequate. Organizations have very sophisticated computerized systems to successfully cope with these information demands. Computer technology enables organizations to combine HR information into a single database called as HRIS. Human Resource Information System (HRIS) Human Resource Information System can be defined as the system used to acquire, store manipulate, analyze retrieve, and distribute pertinent information regarding an organization s human resource. It is an integrated system designed to provide information used in HR decision making. It is also used for tracking almost every area of HRM. Why organizations need HRIS? As organizations grow in size, maintenances and use of employee information becomes more difficult. HRIS helps in managing information efficiently. It helps in reducing the cost of computing. It helps in maintaining accurate and timely information on employees a required by the legislation HRIS assists top management in moving beyond simple administrative HRM to a thoughtful and planned HRM. Objectives of HRIS To acquire, store manipulate, analyze retrieve, and distribute pertinent information regarding an organization s human resource. To facilitate HR decision making in following areas: man power planning, Recruitment & selection, job change, training, compensation, labor relations etc. To provide relevant information on employees to government agencies as part of the legal requirement. Information Requirements May Include: Duties and responsibilities of every job in the organization Skills possessed by every employee Organization s future human resource needs Current productivity of human resources Identification of training needs HRIS is utilized basically for the following purposes: Storing information and data for each individual employee for future reference Providing a basis for planning, organizing, decision making, controlling, and a host of other human resource functions Meeting daily transactional requirements such as marking present/absent, and granting leave

Supplying data and submitting returns to government and other statutory agencies Applications Personnel administration Salary administration Leave /absence recording Skill inventory Medical history Accident monitoring Performance appraisal Training and development Manpower planning Recruitment Career planning Collective bargaining Components of HRIS Hardware is the actual equipment used like computers, monitors, printers LAN Software: It contains the program instructions that tell the computer how to process the data. E.g. HR PRO-I, Registrar, AAP, Org Plus Data Base: The heart of any HRIS is its database. Database is stored data used by the computer. The typical data elements in an HRIS are: Personal data, recruitment & selection data, work experience data, compensation data, performance appraisal data, attitude data( absence record grievance filed), health data, benefit data System Functions Computerized environment Networked-PC environment-security groups-super user User-driven ad hoc enquiries-database HRIS should be part of MIS Steps in Implementing an HRIS Inception of idea Feasibility study Selecting a project team Defining the requirements Vendor analysis Contract negotiations Training Tailoring the system Collecting data Testing the system Starting up Running in parallel Maintenance Audit Benefits of HRIS Higher speed of retrieval and processing of data Reduction in duplication of efforts leading to reduced cost Ease in classifying and reclassifying data

Better analysis leading to more effective decision making Higher accuracy of information /report generated Fast response to answer queries Improved quality of reports Better work culture Establishing of streamlined and systematic procedures More transparency in the system Limitations of HRIS It can be expensive in terms of finance and manpower requirements Lack of quality information Threatening and inconvenient to those who are not comfortable with computers Lack of intelligence (GIGO) Employee privacy may be at threat Lack of proper training to users

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