8

Managing Human
Resources

Principles of Management
 Learning Outcomes
Follow this Learning Outline as you read and study this chapter.

The Human Resource Management Process

• Explain why the HRM process is important.
• Discuss the environmental factors that most directly affect the HRM process.
• Describe the importance and procedure of human resource planning.
Identifying and Selecting Competent Employees
• Define job analysis, job description and job specification.
• Discuss the major sources of potential job candidates.
• Describe the different selection devices and which works best for different jobs.
• Explain why a realistic job preview is important.

Principles of Management
Learning Outcomes
• Providing Employees with Needed Skills and Knowledge
 Explain why orientation is so important.
 Describe the different types of training and how that training can
be provided.
• Retaining Competent, High Performing Employees
 Describe the different performance appraisal methods.
 Discuss the factors that influence employee compensation and
benefits.
 Describe skill-based and variable pay systems.

Principles of Management
Learning Outcomes
• Contemporary Issues in Managing Human Resources
 Explain how managers can manage downsizing.
 Discuss how managers can manage workforce diversity.
 Explain what sexual harassment is and what managers need
to know about it.
 Describe how organizations are dealing with work-life balance
issues.
 Discuss how organizations are controlling HR costs.

Principles of Management
The Importance of Human Resource
Management (HRM)

• As a significant source of competitive advantage

 People-oriented HR creates superior shareholder
value.
• As an important strategic tool
 Achieve competitive success through people by
treating employees as partners.
• To improve organizational performance
 High performance work practices lead to both high
individual and high organizational performance.

Principles of Management
 Examples of High-Performance Work Practices

• Self-managed teams
• Decentralized decision making
• Training programs to develop knowledge, skills and
abilities
• Flexible job assignments
• Open communication
• Performance-based compensation
• Staffing based on person–job and person–organization
fit
Source: Based on W. R. Evans and W. D. Davis, “High-Performance Work
Systems and Organizational Performance: The Mediating Role of Internal
Social Structure,” Journal of Management, October 2005, p. 760.

Principles of Management
 The HRM Process
• The HRM process is an ongoing procedure that
tries to keep the organization supplied with the
right people in the right positions, when they
are needed.

Principles of Management
The HRM Process: A Traditional View

• Includes seven basic activities

 Human resource planning
 Recruitment
 Selection
 Socialization
 Training and development
 Performance appraisal
 Promotions, transfers, demotions and separations

Principles of Management
Human Resource Management Process

Principles of Management
Environmental Factors Affecting HRM
• Employee Labor Unions
 Organizations that represent workers and seek to
protect their interests through collective bargaining.
 Collective bargaining agreement
– A contractual agreement between a firm and a union
elected to represent a bargaining unit of employees of the
firm in bargaining for wage, hours and working conditions.
• Governmental Laws and Regulations
 Limit managerial discretion in hiring, promoting and
discharging employees.
 Affirmative Action: Organizational programs that enhance the
status of members of protected groups.

Principles of Management
Environmental Factors Affecting HRM
• Demographic Trends
 By 2020, children below 15 years who are 35 percent
of the population would enter the workforce.
 More women and disabled are entering the
workplace.
 The directive principles of the constitution require that
the scheduled caste and scheduled tribe should be
given special treatment.

Principles of Management
Employment of Women–Protective Legal Provisions

Sr Name of Enactment Protective Provisions

no
1. 1 The Beedi & Cigar Provision of creches for the benefit of women worker.
Workers (Condition of
Employment
Act, 1966)
2 The Plantation Labour Women workers to be provided time off for feeding children.
Act, 1951
3 The Contract Labour Not to be required to work beyond 9 hours between 6 a.m. and 7
(Regulation & Abolition) p.m.–with the exception of mid-wives and nurses in plantations.
Act, 1970
The Inter State Migrant Separate toilets and washing facilities to be provided.
4
Workmen (Regulation of
Employment and
Condition of Service) Act,
1979
The Factories Act, 1948 In factories, women not to be engaged for cleaning, lubricating, or
5
adjusting an part of prime or transmission machinery; maternity
leave upto 12 weeks with wages to be provided.

Principles of Management
Employment of Women–Protective Legal Provisions

6 The Mines Act, Employment in mines below ground

1952 prohibited.
Maternity Benefit Act, Maternity benefits to be provided on completion of 80 days
7
1961 working.
Not required to work during six weeks immediately
following the day of delivery or miscarriage.
No work of arduous nature; long hours of standing likely to
interfere with pregnancy/normal development of foetus; or
which may cause miscarriage or is likely to affect health to
be given for a period of one month immediately preceding
the period of six weeks before delivery.
On medical certificate, advance maternity benefit to be
allowed.
Rs. 250/- as medical bonus to be given when no pre-natal
confinement and post -natal care is provided free of
charge

Principles of Management
Employment of Women–Protective Legal Provisions

Equal Remuneration Act, 1976 Payment of equal

8
remuneration to men and
women workers for
same or similar nature of
work protected under the act.
No discrimination permissible
in recruitment and service
conditions except where
employment of women is
prohibited or restricted by or
under any law.
Employees’ State Insurance (General) Regulation, Claim for maternity benefit
9
1950 becomes due on the date the
medical certificate is issued for
miscarriage, sickness arriving
out of pregnancy, confinement,
or premature birth of child.

Principles of Management
Employment of Women–Protective Legal Provisions
10 Lime Stone and Dolomite Mines Labour
Welfare Fund Act,1972
11 The Protection of Women Against Sexual
Harassment at Workplace Bill, 2007
12 Beedi Workers Welfare Fund Act, 1976
13 Iron Ore Mines, Manganese Ore Mines and
Chrome
Ore Mines Labour Welfare Fund Act, 1976
14 Mica Mines Labour Welfare Fund Act, 1946
Appointment of a women
member in Advisory
Committee and
Central Advisory Committee
is mandatory under these
acts.
To provide for prevention and
redressal of sexual harassment
of women at workplace and for
matters connected therewith or
incidental thereto.
Principles of Management
Managing Human Resources
• Human Resource (HR) Planning
 Planning for the future personnel needs of an
organization, taking into account both internal
activities and factors in external environment.
 Basic aspects in HR planning:
 Planning for future needs
 Planning for future balance
 Planning for recruiting or laying off employees
 Planning for the development of employees

Principles of Management
 Recruitment
• Recruitment: The purpose of recruitment is to
provide a group of candidates that is large
enough to let managers select the qualified
employees they need.
• Steps before recruitment
• Job Description
• A written description of a non management job,
covering title, duties and responsibilities, and including
its location on the organization chart.

Principles of Management
 Recruitment
• Job Specification
 A written description of a management position,
covering title, duties, and responsibilities, and
including its location on the organization chart.
• Hiring specification:
 A written description of the education, experience and
skills needed to perform a job or fill a position
effectively.

Principles of Management
 Sources of Recruitment
• Outside Recruitment for Managers and
Professionals
• Major sources for entry level jobs: College
and graduate school campuses are a major
source of entry-level jobs.
• For middle level positions: Placement
agencies or the purchase of expensive ads
• For top level positions: Executive search firms

Principles of Management
 Recruitment from Within
• Major advantages
• Individuals are familiar with the organization and its
members.
• Promotion-from-within policy fosters loyalty and inspires
greater effort among organization members.
• Less expensive.
• Disadvantages
• Limits the pool of available talent.
• Reduces the chance that fresh viewpoints will enter the
organization.
• May encourage complacency among employees who
assume seniority ensures promotion.

Principles of Management
 Selection
• The organization decides whether to make a job
offer and how attractive the offer should be, and
the job candidate decides whether the
organization and the job offer fit his or her needs
and goals.

Principles of Management
Steps in the Selection Process
Sr Procedures Purposes Actions and
no Trends
1 Completed job Indicates applicant’s desired Requests only
application position; provides information information that
for interviews. predicts success in the
job.*
2 Initial screening Provides a quick evaluation of Asks questions on
interview applicant’s suitability. experience,
salary expectation,
willingness to
relocate, etc.
3 Testing Measures applicant’s job skills and May include computer
the ability to learn on the job. testing
software, handwriting
analysis,
medical and physical
ability.

Principles of Management
 Steps in the Selection Process
Sr Procedures Purposes
no
4 Background Checks truthfulness of
investigation applicant’s resume or application
form.
5 In-depth selection Finds out more about the
interview applicant as an individual.
6 Physical Ensures effective performance
examination by applicant; protects other
employees against diseases;
establishes health record on
applicant; protects firm against
unjust worker’s compensation
claims.
7 Job offer Fills a job vacancy or position.
Actions and Trends
Calls the applicant’s previous
supervisor (with permission)
and confirms information from
applicant.
Conducted by the manager to
whom the applicant will report.
Often performed by company’s
medical doctor.
Offers a salary plus benefit
package.
Principles of Management
Other Selection Approaches (cont.)
• Realistic Job Preview (RJP)
 The process of relating to an applicant both the
positive and the negative aspects of the job.
 Encourages mismatched applicants to withdraw.
 Aligns successful applicants’ expectations with actual job
conditions, reducing turnover.

Principles of Management
Orientation or Socialization

• Orientation or Socialization is designed to provide new

employees with the information needed to function
organization comfortably and effectively.
• It basically conveys.
 General information about the daily work routine
 A review of the organization’s history, purpose, operations and
products or services.
 A detailed presentation of the organization’s policies, work rules
and employee benefits.

Principles of Management
Training and Development

• Training programs are directed toward maintaining and

improving current job performance while development
programs seek to develop skills for future jobs.
• Employee Training
 Types of training
 Training Method

Principles of Management
 Training Methods

• On-the-job Training • Off-the-job Training

Methods Methods
 Coaching  Vestibule training
 Job rotation  Behaviorally experienced
training
 Training positions
 Role play
 Planned work activities
 Computer assisted
instruction
 Management development
programmes

Principles of Management
Employee Performance Management

• Performance Management System

 A process of establishing performance standards and
appraising employee performance.

Principles of Management
 Advantages and Disadvantages of
Performance Appraisal Methods

Method Advantage Disadvantage

Written essays Simple to use More a measure of evaluator’s writing
ability than of employee’s actual
performance
Critical Rich examples; behaviorally Time-consuming; lack quantification
incidents based
Graphic rating Provide quantitative data; less Do not provide depth of job behavior
scales time-consuming than others assessed
BARS Focus on specific and Time-consuming; difficult to develop
measurable job behaviors
Multiperson Compares employees with one Unwieldy with large number of employees;
comparisons another legal concerns
MBO Focuses on end goals; results Time-consuming
oriented
360-degree Thorough Time-consuming
appraisals

Principles of Management
 Compensation and Benefits
• Benefits of a Fair, Effective and Appropriate
Compensation System
 Helps attract and retain high-performance employees.
 Impacts the strategic performance of the firm.
• Types of Compensation
 Base wage or salary
 Wage and salary add-ons
 Incentive payments
 Skill-based pay
 Variable pay

Principles of Management
 Factors That Influence Compensation and Benefits

Sources: Based on R.I. Henderson, Compensation Management, 6 th ed. (Upper Saddle River, NJ: Prentice Hall, 1994),
pp. 3–24; and A. Murray, “Mom, Apple Pie, and Small Business,” Wall Street Journal, August 15, 1994, p. A1

Principles of Management
Contemporary Issues in
Managing Human Resources
• Managing Downsizing
 The planned elimination of jobs in an organization
 Provide open and honest communication.
 Provide assistance to employees being downsized.
 Reassure and counseling to surviving employees.

• Managing Workforce Diversity

 Widen the recruitment net for diversity.
 Ensure selection without discrimination.
 Provide orientation and training that is effective.

Principles of Management
Exhibit 10–12 Tips for Managing Downsizing

• Communicate openly and honestly:

 Inform those being let go as soon as possible.
 Tell surviving employees the new goals and expectations.
 Explain impact of layoffs.
• Follow any laws regulating severance pay or benefits.
• Provide support/counseling for surviving employees.
• Reassign roles according to individuals’ talents and
backgrounds.
• Focus on boosting morale:
 Offer individualized reassurance.
 Continue to communicate, especially one-on-one.
 Remain involved and available.

Principles of Management
Current Issues in HRM (cont.)
• Sexual Harassment
 An unwanted activity of a sexual nature that affects an
individual’s employment.
 Unwanted sexual advances, requests for sexual favors and
other verbal or physical conduct of a sexual nature when
submission or rejection of this conduct explicitly or implicitly
affects an individual’s employment.
 An offensive or hostile environment
 An environment in which a person is affected by elements of a
sexual nature.
• Workplace Romances
 Potential liability for harassment

Principles of Management
Current Issues in HRM (cont.)
• Work-Life Balance
 Employees have personal lives that they don’t leave
behind when they come to work.
 Organizations have become more attuned to their
employees by offering family-friendly benefits:
 On-site child care
 Summer day camps
 Flextime
 Job sharing
 Leave for personal matters
 Flexible job hours

Principles of Management
 Current Issues in HRM (cont.)
• Controlling HR Costs
 Employee health care
 Encouraging healthy lifestyles
– Financial incentives
– Wellness programs
– Charging employees with poor health habits more for benefits
 Employee pension plans
 Reducing pension benefits
 No longer providing pension plans

Principles of Management
 Terms to Know
• high-performance work • selection
practices • validity
• human resource • reliability
management process • work sampling
• labor union • assessment centers
• affirmative action • realistic job preview (RJP)
• human resource planning • orientation
• job analysis • performance
• job description management system
• job specification • written essay
• recruitment • critical incidents
• decruitment • graphic rating scales
Principles of Management
 Terms to Know (cont.)
• behaviorally anchored
rating scales (BARS)
• multiperson comparisons
• 360 degree feedback
• skill-based pay
• variable pay
• career
• downsizing
• sexual harassment
• family-friendly benefits

Principles of Management