HUMAN RESOURCE

MANAGEMENT- CHAPTER 1

DR. NISHA RANA

 HUMAN RESOURCE MANAGEMENT : AN
INTRODUCTION

o HRM is that part of management process which develops and manages the human
element of the enterprise considering their resourcefulness in terms of total knowledge
, skills , creative abilities , talents , aptitudes and potentialities for effectively
contributing to the organizational objectives .
o Functions of HR :
o Managerial functions : planning , organizing , directing , controlling
o Operative functions – employment , development , compensation , appraisal ,
maintenance motivation , personnel records , industrial relations and separation
 FEATURES OF HRM

 Concerned with human element

 Integral part of management
 Pervasive function
 Wide range of activities
 Development of human resources
 Motivation of human resources
 Continuous function
 Service or staff function
 Multi-disciplinary approach
IMPORTANCE OF HUMAN RESOURCE
MANAGEMENT

 Importance for the organization

 Importance for individuals
 Importance for society
 Importance for the nation
Human Resource Policy
 Policies are broad guidelines as to how the objectives of the business to be achieved.
Its predetermined and accepted course of thought and action to serve as a guide
towards certain accepted objectives.

 HR POLICIES lay down the decision making criteria in line with the overall purpose of the organization in
the area of human resource management .
Characteristics of a policy -
 Policy is an expression of intentions of top management
 Policy stated in broad terms
 Policy is long lasting
 Policy is developed with the active participation of all executives
 Policy is in writing
 Policy is linked with objectives
 NEED AND IMPORTANCE OF HR POLICY

 Facilitates decision making

 Promptness of action
 Consistency of action
 Continuity and stability
 Better control
 Eliminates personal hunch and bias
 Welfare of people
 Confidence in employees
 FORMULATION OF HR POLICY

 Preliminary investigation:
 Labour legislation
 Social values and customs
 Employees' aspirations
 Environment scanning
 Identification of policy areas
 Analysis of alternative policies
 Participation of lower levels
 Approval of top management
 Implementation of policies
 Policy appraisal
 POLICIES IN VARIOUS HR AREAS

 Acquisition Policies
 Minimum hiring qualifications , training and experience
 Preferred source of recruitment
 Reservations for different groups
 Employment of relations of existing personnel
 Reliance on various selection devices such as tests , reference check and interviews
 Placement of new employees
 Orientation of new employees
 POLICIES IN VARIOUS HR AREAS

 Transfer and Promotion policies

 Rationale of transfer
 Periodicity of transfer
 Promotion of existing staff
 Length of service required for promotion
 Qualifications and merit required for promotion
 Weightage to seniority and merit in promotion
 POLICIES IN VARIOUS HR AREAS

 Training and development policies

 Frequency of training and developing programmes
 Basis for training
 Types of training
 Programmes of executive development
 Career advancement
 POLICIES IN VARIOUS HR AREAS

 Compensation policies
 Minimum wages and salaries
 Methods of wage payments
 Individual incentive plans
 Group inventive plans
 Employee stock option plan
 Profit sharing
 Non – monetary rewards
 POLICIES IN VARIOUS HR AREAS

 Maintenance and welfare policies

 Kinds and standards of working conditions
 Number and duration of rest intervals
 Overtime
 Types of leaves
 Safety programmes
 Types of welfare services
 Financing of employee services
 POLICIES IN VARIOUS HR AREAS

 Integration and human relations policies

 Employee discipline
 Handling of grievances
 Recognition of employees’ unions
 Employees’ participation in management
 Suggestion schemes
 ESSENTIALS OF A SOUND HR POLICY

 Understand the policy in proper context

 Consistent with the overall philosophy of organization
 Give due regard to all parties
 Should be broad, general and flexible
 It must be in writing
 Should take care individual differences and situational realities
 Should be reviewed and revised periodically
 Should be just , fair and equitable to internal and external groups
 Should be reasonable and capable of being executed
 Proper participation need to be ensured
 Properly communicated and accepted by the members
 HUMAN RESOURCE MANAGEMENT
VS
PERSONNEL MANAGEMENT
The major point of distinction between the two :
 Philosophy
 Nature of activity
 Management outlook
 Shared interests
 Pervasiveness
 Humanisation
 HUMAN RESOURCE AS A SOURCE OF
COMPETITIVE ADVANTAGE

 The general concept of the competitive advantage is a reasonably straightforward. Each business tries to gain the
advantage that helps to increase the market share, margins or profits. No firm exists to make employees lucky. They
exist to fund lives of shareholders. No one can complain about the organization building the sustainable internal
environment that brings immediate and long-term benefits compared to competitors on the market. Human Resources
in no exception; it is a strategic business function. It has the HR Strategy, and it can build a significant competitive
advantage for the company.
 A comprehensive HR Strategy makes a difference. A smart organization recognizes that competitive and different
people management techniques can make the business attractive. Such an organization attracts the best talents, and
they want to use their creative minds in the favor of the enterprise. They just develop products and services attractive
to customers and profitable for the organization. They can create a successful business that is widely recognized by
competitors.
 An efficient management of the capital always brings an advantage. The organization does not lose resources in
ineffective investments. It keeps a tight control over the budgeting process. This applies to the management of human
capital, as well. The right allocation of available resources allows the business to speed up the development of new
products, introduce innovations and focus on small market wars with competitors.
 There are several models how to build the
competitive advantage:

 Cost Leadership : The most common is the cost leadership strategy. However, it usually brings worst results for all
competitors. Most organization decrease profit margins and cut profits. It is often followed by several cost cutting
exercises, and the leadership team loses its face in front of employees. The innovative business has to avoid this strategy.
 Innovation Leadership : Innovations can build a very strong basis for the sustainable development of the competitive
advantage. However, such an organization needs to change its processes, procedures, policies and practices significantly.
This strategy is the most demanding. It requires Human Resources to change the way it works.
 Differentiation Leadership: A Differentiation strategy is based on a strategic mix of products and services that is not offered
by competitors. The organization connects services and products to create the unique experience for the customer or client.
This is another approach that can be used in Human Resources. However, it is very difficult to bring a different experience
in Human Resources.
 Operational Effectiveness Strategy : Last, the organization can choose the Operational Effectiveness Strategy. The firm
does not focus externally; it streamlines processes and procedures to be quicker and agiler than competitors. This strategy
brings results but it is very difficult to implement. The leadership team has to cross many obstacles and employees are
required to change their behavior.
 HUMAN RESOURCE AS A SOURCE OF
COMPETITIVE ADVANTAGE

 According to Charles Greer “ In a growing number of organizations , human resources are viewed as a source
of competitive advantage . There is a greater recognition that distinctive competencies are obtained through
highly developed employee skills , distinctive organizational culture , management processes and systems.
 It can be obtained with a high quality workforce that enables the organization to compete on the basis of market
responsiveness , product and service quality , differentiated products and technological innovations.
 To perform this role the HR manager has become as a strategic partner in the formulation of organization’s
strategies. He creates a competitive edge for the organization by giving strategic focus to human resource
planning , employment , training , appraising and rewarding of personnel.
 DEVELOPING CORE COMPETENCE

 According to Gray Hamel and C.K. Prahalad , “ A core competence is a bundle of skills and technologies that
enables a company to provide a particular benefit to the customer.” Many world class companies are famous for
their unique core competence like:
 Sony : miniaturization (tiny products)
 Philips : optical media expertise
 Du Pont : chemical technology
 Honda : engines
 Cannon : optics , imaging , micro-processor controls
 Human resources have a great role to play in developing and utilizing core competence for creating competitive
edge for the organization.
 The HR manager can be instrumental in nurturing core competence through both individual and collective learning
of human resources.
 STRATEGIC MANAGEMENT OF HUMAN
RESOURCES

 Strategic HRM means the linking of HRM with

strategic goals and objectives of the enterprise in order
to improve business performance and develop
organizational culture that fosters innovation and
flexibility.
 ROLE OF HUMAN RESOURCE MANAGER

 Policy formulator
 Advisory role
 Linking pin role
 Representative role
 Fire fighter or mediator role
 Leadership role
 Welfare role
 CHANGING ROLE OF HR MANAGER

Change facilitator or agent

Counsellor
Strategic role
Miscellaneous role :
Management of work force diversity
Employees empowerment
Work-life balance
Voluntary retirement scheme (VRS)
 TRAITS OR COMPETENCIES OF A
SUCCESSFUL HUMAN RESOURCE
MANAGER

 Broad vision
 Technical competence
 Human relation competence
 Organizational competence
 Dynamic personality
 Communication competence
 Emotional stability
 Integrity
 Problem solving competence
 Strategy formulation competence
SAMPLE CODE OF ETHICS FOR HR
MANAGERS