MANAGEMENT - A DEFINITION

MANAGEMENT IS WORKING WITH AND THROUGH

INDIVIDUALS AND GROUPS TO ACCOMPLISH
ORGANISATIONAL GOALS.

•APPLIES TO ORGANISATIONS OF ALL KINDS, INCLUDING

FAMILIES.
 ENVIRONMENTAL CHANGES

• ECONOMIC AND EMPLOYMENT SHIFTS

- GLOBAL ECONOMY
- SPECIALIZATION
• DEMOGRAPHIC AND WORKFORCE SHIFTS
• CONTINGENT WORK FORCE
• SOCIAL VALUES
• WORK ATTITUDES AND NEED PATTERNS
• ROLE OF TECHNOLOGY
 HRM CHALLENGES

• RECRUITMENT AND SELECTION

• JOB ENRICHMENT
• REWARD MANAGEMENT
• PERFORMANCE MANAGEMENT
• INTEGRATED HR PRACTICES
• UNDERSTAND ALL ASPECTS OF BUSINESS
• LINKED TO BUSINESS STRATEGY
• POTENTIAL DEVELOPMENT/ CAREER MANAGEMENT
• STRESS MANAGEMENT
• WORK/LIFE INTEGRATION
• CULTURE OF CONTINUOUS IMPROVEMENT
• SOCIAL RESPONSIBILITY
 CONTEMPORARY HR

• Right-sizing, downsizing, VRS – familiar concepts

• Attempts by corporate India to trim down in recent past

• Impressive results:
a. corporate earnings;
b. employee earnings.
HUMAN RESOURCE MANAGEMENT

SET OF PROGRAMMES, FUNCTIONS AND

ACTIVITIES DESIGNED TO MAXIMIZE PERSONAL
AND ORGANIZATIONAL GOALS.

ORGANIZATIONAL EFFECTIVENESS AND

INDIVIDUAL EFFICIENCY ARE A FUNCTION OF
MANAGERIAL APPROACH.

MANAGERIAL APPROACH IS BASED ON

PHILOSOPHICAL ORIENTATIONS.
 HRM – DIFFERENT APPROACHES

• RATIONAL SCHOOL

•HUMAN RELATIONS SCHOOL

•HRD APPROACH
SCIENTIFIC MANAGEMENT
(FREDERICK TAYLOR)

1.DETERMINE THE SCIENCE OF EACH JOB

2. SELECT THE RIGHT PERSON FOR THE JOB

3. TRAIN THE PERSON TO PERFORM SCIENTIFICALLY

4. COMPENSATE WITH FINANCIAL INCENTIVE

5. SEPARATE MANAGERIAL FROM NON-MANAGERIAL

FUNCTIONS

-MONEY =BEST MOTIVATOR; DESIGN JOBS

 DIVISION OF LABOUR
(ADAM SMITH)

• SPECIALIZE IN REPETITIVE TASKS

• INCREASE EFFICIENCY AND REDUCE/ ELIMINATE

MISTAKES

• DEPARTMENTALIZATION

• UNITY OF COMMAND
THEORY OF BUREAUCRACY
(MAX WEBER)

• CREATE ORGANIZATIONAL ENVIRONMENT FOR RATIONAL

PURSUIT OF GOALS.

• SEPARATE EMOTION FROM REASON

• SEPARATE PERSONAL FROM OFFICIAL

• ACTIONS GOVERNED BY RULES AND REGULATIONS

• FUNCTIONS OF DEPARTMENTS AND EMPLOYEES

COORDINATED BY A HIERARCHY OF SUPERVISION.
 PRINCIPLES OF BUREAUCRACY

1. DISTRIBUTION OF REGULAR ACTIVITIES AS OFFICIAL DUTIES -

(DIVISION OF LABOUR AND DELEGATION OF RESPONSIBILITY).

2. ORGANIZATION BASED ON HIERARCHY - (ACCOUNTABILITY).

3. ACTIVITIES CONTROLLED BY ABSTRACT RULES - (UNIFORMITY).

4. OFFICE CONDUCTED IN A SPIRIT OF FORMALISTIC

IMPERSONALITY - (OBJECTIVITY AND IMPARTIALITY).

5. EMPLOYMENT = CAREER - (LOYALTY)

6. RECRUITMENT ON MERIT - (UNIVERSALITY).

 Human Relations School

Hawthorne Studies
(1929-1936)
• Disproved Impact of physical Environment

• Informal Norms

• Informal control mechanisms

• Rate busters ; rate chiselers

 Human Relations School

• Factory – Social system – communication

• Industry – Human organisation – morale

• Strong informal organisation

• Sense of belongingness

• Need to participate - productivity

 RATIONAL SYSTEM MODEL

• ACHIEVE GOAL THROUGH DISCRETE CHOICE OF

ALTERNATE MEANS

• CHOOSE THE MOST SUITABLE MEANS

• MAXIMUM RETURN FROM MINIMUM INVESTMENT

 FEATURES OF RATIONAL MODEL

1.GOAL SPECIFICITY - ACHIEVE RATIONALITY THROUGH

CLEAR DEFINITION OF GOALS + TASKS.

2. FORMALIZATION - FORMAL ROLE STRUCTURE AND

HIERARCHY OF FUNCTIONS/ ACTIVITIES.

3. ORGANIZATIONAL RATIONALITY - RATIONALITY IN

ORGANIZATION NOT IN PEOPLE.
-SYSTEMATISE ORGANIZATION THROUGH
(a) ROLE DEFINITION
(b) RULES + REGULATIONS
(c) CONTROLS.
 RATIONAL SCHOOL (ctd)

4. HUMAN NATURE - CONTROLLABLE ENTITY

•MOTIVATED BY ECONOMIC NEEDS

•CONFORMITY AND OBEDIENCE = EASY

•MAN = SUBSERVIENT TO MACHINE

•RESPOND TO ROLE-SPECIFIC BEHAVIOUR

•FEELINGS AND ATTITUDES = IRRELEVANT

•RULES-- GREATER CONTROL ON HUMAN BEHAVIOUR--

PREDICTABILITY.
 SOCIAL SYSTEM MODEL

•A CRITIQUE OF RATIONAL SYSTEM

•HUMAN BEHAVIOUR IS NOT PREDICTABLE OR

CONTROLLABLE

•HUMAN RELATIONS MOVEMENT:

ELTON MAYO, FRITZ ROETHLISBERGE, DOUGLAS

McGREGOR, ABRAHAM MASLOW, KURT LEWIN etc.
 FEATURES OF SOCIAL SYSTEM MODEL

1.. GOAL SPECIFICITY- DIFFUSED AND DIFFICULT

2. FORMALIZATION- NOT POSSIBLE

-ESTABLISHMENT OF ROLE STRUCTURE IS IRRATIONAL

-EXCESSIVE PRE-PLANNING LEADS TO TRAINED

INCAPACITY
3. ORGANIZATIONAL RATIONALITY- DIFFICULT TO
OPERATIONALIZE

4. HUMAN NATURE- ENCOMPASES MORE THAN ECONOMIC

REWARDS AND FEAR OF INSECURITY.
-HIGHER ORDER NEEDS.
 HUMAN RESOURCE DEVELOPMENT APPROACH

• RECENT CONCEPT

• HUMAN NEEDS AND ORGANIZATIONAL NEEDS ARE

MUTUAL AND COMPATIBLE

• EMPLOYEES = INVESTMENTS- MANAGED & DEVELOPED

LEAD TO PRODUCTIVITY
 HRD (ctd)
•CREATE POLICIES, PROGRAMMES & PRACTICES TO
SATISFY ECONOMIC & EMOTIONAL NEEDS

•CREATE ENVIRONMENT TO ENCOURAGE EMPLOYEES TO

DEVELOP & UTILIZE FULL POTENTIAL

•MAINTAIN BALANCE BETWEEN EMPLOYEE NEEDS AND

ORGANIZATIONAL OBJECTIVES
 HRD (ctd)

TWO-FOLD CONCERN:

1. IMPROVEMENT OF HUMAN RESOURCES (KNOWLEDGE,

SKILLS AND ATTITUDES)

2. EFFECTIVE UTILIZATION OF HUMAN RESOURCES.

 CONCEPT OF HRD

HRD = A PROCESS BY WHICH MEMBERS OF AN

ORGANISATION ARE HELPED IN A CONTINUOUS WAY TO:

• ACQUIRE & SHARPEN CAPABILITIES TO PERFORM

• DEVELOP INNER POTENTIALS FOR DEVELOPMENT OF

SELF & ORGANISATION;

• DEVELOP AN ORGANISATION CULTURE IN WHICH

SUPERIOR-SUBORDINATE RELATIONSHIPS, TEAM WORK
AND COLLABORATIO ARE STRONG TO CONT- RIBUTE TO
THE PROFESSIONAL WELL BEING, MOTI- VATION & PRIDE OF
THE MEMBERS.
 HRM: A Changing Function

Dual Roles
• Administrative Role
• Strategic Role

Partnership of HR and Line Managers

• Devolution- transfer of some responsibilities and activities from the
HRM function to the line managers (recruitment and selection)
• Decentralization- structuring of HR department; coaching of line
managers

From ‘deliverer of services’ to ‘deliverer of HR competencies’

 21st Century: Multiple Roles of HR Managers

• Administrative Expert: not only an administrator; focus on efficiency of

HR function
• Operational role: cooperating with line managers to identify and
implement HR practices needed in the firm
• Employee Champion: be the ‘voice’ for employee concerns and ensure
employee commitment
• Partner in Business Strategy: focus on strategic implications of HR
issues; participating in organizational strategic planning
• Change Agent: build organizational capacity to accept and capitalize on
change (e.g. implementing new technology); facilitate culture change
• Customer Orientation:
 Changing Function

• from Personnel Management to HRM (early 1970s)

remained largely a more modern term for personnel management

• from HRM to SHRM (early 1980s)

late 1980s and early 1990s saw a visible convergence between HRM
and business strategy
Strategy
“determination of long term goals and objectives of an organization, and
the allocation of resources necessary for carrying out these goals”

HR Strategy
“planned and effective use of HRs by an organization to help it to gain or
maintain an edge over its competitors”

Is concerned with:
• determining strategic objectives (what goals is the strategy supposed to
achieve)
• developing a plan of action (how will the human resources be organizaed and
allocated to accomplish these goals)
Strategic Human Resource Management (SHRM)

Concerned with the relationship between HRM and strategic

management of the firm

• HRs are the primary source of competitive advantage

• HR practices can be deployed to gain competitive advantage
• there is a fit between HR strategy and business strategy of the firm, and
between all of HR activities
• HRs, HR practices, and linkages are all directed towards the
achievement of goals of the organization
 LINKAGES

1. Vertical: business strategy and HR Policies and

Practices
2. Horizontal: between HR processes- synergy
3. Temporal: business and HR strategy linkage is
dynamic- HR must be long-term oriented
 HRs are an Asset and a Source of Competitive
Advantage

Asset: something that is owned and has exchange value

HRs are different from other assets:

• can ‘walk’ and not owned
• appreciate in value over time

Resource Based View of Human Resources (RBV) – Barney (1991) helps

understand how HRs contribute to sustained competitive advantage
 ROLE OF HR FUCTION IN MANAGING HRs
TO ACHIEVE COMPETITIVE ADVANTAGE

VRIO FRAMEWORK (Barney, 1995)

1. V = VALUE CREATION
(by decreasing product/service cost or differentiating product/
service to increase revenue)
2. R = RARENESS OF HRs
(develop & exploit rare characteristics of the firm’s HRs in a
homogeneous environment)
3. I = IMITABILITY (non)
(firm’s HR characteristics should not be easily imitable by
competitors- unique culture)
4. O = ORGANIZATION
(firm must be organized to exploit HRs)
Valuable? Rare? Difficult to Support by Competitive Perform
Imitate? Oranization? Implications -ance

No - - - Competitive Below
Dis - Normal
Advantage

Yes No - - Competitive Normal

Parity

Yes Yes No - Temporary Above

Comp. Normal
Advantage

Yes Yes Yes - Sustained Above

Comp. Normal
Advantage
 Investment Perspective of Human Resources

Cost Versus Investment!

• Traditional View = ‘cost’ (HR related budget accounted as ‘expenses’ in

the balance sheet)

• Contemporary View = ‘Investments’ (linked to viewing HRs as assets)

 Factors Determining the Investment Orientation of
an Organization

• extent to which management values its people – central to the

mission of the firm?
• attitude towards risks
- risk aversive = less likely to invest in human assets
- risk taking = willing to invest more in people (& develop strategies to
minimize risks)
• Are the skills required by the organization easily transferable to other
organizations? – retention strategies
• whether the organization adopts a bottom-line perspective
(cost/benefit analysis)