HRM

AN
INTRODUCTION
 Module 1
Management

DEFINITION
 Definition

Management is the art of getting things done

through others effectively and efficiently.

There are different streams of management:

Human Resource Management
Financial management
Marketing Management
Production Management etc.
 Significance of HRM
• ORGANIZATIONS HAVE THEIR OWN GOALS AND
OBJECTIVES.
• RESOURCES ARE REQUIRED TO MEET THEIR GOALS

Non – Human Resources Human Resources

• Material resources
(Land, Raw Mts., Machineries,
Vehicles, stationery etc.)

• Technological resources
(Computers, hardware, software like
ERP, MIS, Tally, CADD-CAM etc.)

• Financial resources
 HRM - Definition

Human Resource – Most important and valuable

asset of an organisation which can make or break an
organization
Human Resources Human resource is the most
important and valuable asset of
an organisation where the
resulting productivity is directly
proportional to the quantity and
quality of human resources.
 HRM Definition

HRM is the process of planning, organizing, staffing,

directing, coordinating and controlling the human
resources in an organization.
HRM is a management function that helps managers
plan manpower requirements, recruit, select, train,
develop, remunerate and maintain members of an
organisation (Aswathappa,2010).
 People lend competitive Advantage

Strategy implementation cannot be done by physical

resources such as technology, buildings, machines and
materials. It is the people who can frame strategies and
implement them effectively.
People offer the unique skills, capabilities, creativity,
networking, bonding, innovative thinking and
behaviours which help a firm to execute its strategies
successfully.
Innovation is the key to competitive advantage. Several
companies such as Google, Bharti Airtel, TCS etc. have
become successful thanks to their employee
innovations. Eg: Google follows the 70/20/10 rule.
Managerial Functions of HRM

THERE ARE 5 FUNCTIONS OF MANAGEMENT

1. PLANNING

2. ORGANISING

3. STAFFING

4. DIRECTING

5. COORDINATING AND CONTROLLING

 Operative functions/ Scope of HRM

• Job design and Job Analysis

• HRP
• Recruitment
• Selection
• Induction
• Placement
• Training & Development
The following • Compensation Management/Employee Remuneration
activities come under • Performance Appraisal
the scope of HRM • Employee Maintenance (Employee welfare, Industrial
Relations, Grievance Management, promotions, transfers,
lay offs, Exit Interview etc.)
 Managerial & Operative
Functions of HRM
FUNCTIONS OF HRM

1. PLANNING – JOB ANALYSIS, HRP [HUMAN RESOURCE

PLANNING]

2. ORGANISING- RECRUITMENT & SELECTION

3. STAFFING- ORIENTATION, PLACEMENT & COMPENSATION

4. DIRECTING- TRAINING & DEVELOPMENT

5. COORDINATING AND CONTROLLING – PERFORMANCE

MANAGEMENT
 Evolution of HRM
Personnel Mgt HRM HCM

Came into existence Came into existence in Came into existence after
in 1960s 1980s 2010
A lot of research on
More importance to
significance of manpower HR cannot be owned nor
Machines &
brought into light imp of exploited. HR treated as
equipment. Clerical/
human values & Strategic partners – imp
Administrative in
productivity. Operational role in strategic decisions
nature
& middle management job
Emphasis is on
routine & mundane
activities such as Hence the organizations Employee are not the
employee hiring, placed emphasis on company's property, they
remunerating , employees as assets to be are only given on rent and
handling employee valued and used as should be treated as capital
grievances, resources. or an investment
maintaining
attendance etc.
 HRM Objectives

There are 5 objectives of HRM

1. Legal - HRM practices should be aligned with the legal

obligations of any country. (labour.gov.in)

2. Societal Objective - HRM practices should be ethically

and socially responsible to the challenges faced by the
society.

3. Organizational Objective - Helps to understand the role

of HRM in the achievement of organisational effectiveness.
 HRM Objectives

There are 5 objectives of HRM

4. Functional Objective - Helps to maintain the HR

department’s contribution at a level suitable to the
organisation’s needs.

5. Personal Objective - Provide assistance to the

employees to achieve their personal goals.
 Legal Objectives

Legal:
 There are several laws pertaining to the Labour.
 Laws related to payment of wages (Payment of
wages act 1936, Minimum wages act 1948, the
payment of Bonus act 1965, Payment of gratuity act
1972, (..\Kar - MW - 2016-17 (Full).pdf)
 Laws related to working conditions (Trade Union Act
1926, Factories Act 1948)
 Terms & conditions of employment (No
discrimination in offering employment, Any child
below 14 years cannot be employed).
Factories
Act 1948
 Societal Objective

Not just being concerned about the welfare of

employees, or welfare of organization but also being
socially responsive and thinking about the welfare of
the society as a whole.
CSR – Corporate Social Responsibility - New clause
added in 2013 in Companies Act. Any company with
an annual turnover of 1000 crores, net worth of 500
crores or a net profit of 5 crores have to spend 2% of
their net profit on CSR activities.
..\Dec_2015_2.pdf
 Organizational Objectives

All HR strategies and HR activities should strive to

attain organizational effectiveness.
Hiring people on the basis of the organizational
strategies.
Eg: If a company is facing losses and has less
projects on hand, then hiring more and more
employees can only cause more damage.
 Functional Objectives

The routine HR activities carried out by the

department such as
employee hiring (without discrimination),
employee remunerating (equal pay for equal work),
employee development (upgrading skills & future job
positions),
employee maintenance (reduced grievances) should
be carried out effectively and in line with
organizational strategy.
 Personal Objectives

In today’s business world there is a shortage of talent.

Therefore, now it becomes the responsibility of the HR
department to retain talent in the organizations.
This would be possible only when the HRM helps
employees to achieve their personal goals to get their
commitment.
Creating work-life balance for the employees,
promotional opportunities, on-site projects,
managerial roles, new skills training etc. are personal
objectives.
Composition of HR Department
 Policies and Procedures
In general policies are  Procedures are detailed
clear, simple statements statements describing how a
about business and policy is to be implemented.
people. Eg. Business Procedures describe how each
Policies, HR policies. policy will be put into action in
your organisation. Each
HR policies can be procedure should outline:
Whom is it applicable to?
considered as useful
guidelines which helps Where is it applicable?
the managers in taking What steps they need to take?
right decisions relating Which forms or documents to
to workforce. use?
 Examples of HR Policies – to name a few policies

Attendance Policy
Leave Policy
Training Policy
Performance management policy
Discipline Policy
Work from Home/ Telecommuting Policy
Sexual Harassment Policy
Compensation Policy
Exit Policy
 Infosys: Time & Attendance Policy

Its is the policy of the organization for

employees to report for their scheduled
work in a timely fashion unless
unavailable due to a reason beyond
their control.
 Infosys: Time & Attendance Procedure

 This policy would be applicable to all employees of the

organization at all locations.
 The employees are accountable for reporting to work at 9:00
a.m. and remaining through their scheduled work till 6:00
p.m.
 Employees are accountable for notifying the person to whom
they report to about their unavailability and the reason for
their unavailability.
 If the employee exceeds the allowable number of absences or
fails to notify the manager, then the manager is accountable
to take action against such an employee.
 A employee has to submit a leave application on the day of
reporting back.
 Time & Attendance Procedure

Forms Used:
Employee Attendance Register/ Employee biometric
Employee’s leave application (online or offline)
 Types of Policies

There are 6 types of policies..

Originated Policies (Commitment policy, Work Ethic policies, Equal
employment opportunity)
Appealed Policies (Flexible timings, Sales Discount policy, dress code)
Imposed policies (Trade union – Internal promotions only, Imposed
by Govt. – Diversity policy)
General Policies (Discipline Policy, Dress code, Termination policy,
Career development policy)
Specific Policies (Recruitment policy. Compensation policy, training
policy)
Written/ Implied Policies
(A) On the basis of Sources of Policy—Following are
the types of policies on the basis of sources of policy.

(1) Originated Policy—Such a policy is usually established

formally and deliberately by top management for their
subordinates action as well as their own action. It is
originated in the broad framework of the objectives set and
defined by top management. (general philosophy of an org
which is to be abided by the whole org)

(2) Appealed Policy—Such a policy is one that arises from

the appeal made by subordinate to his superior for
deciding an important case or problem. The need for such
policy arises because the particular case or problem has not
been covered by earlier policies.
(A) On the basis of Sources of Policy—Following are
the types of policies on the basis of sources of policy.
(3) Implied Policy—These are the policies which are
not formally stated. Policies are inferred from the
actions of the superiors. It is not a good policy.

(4) Imposed Policy—Imposed policy is one that

arises from the influence of some outside forces like
government, trade unions, trade associations etc.
(B) On the basis of Scope of policies—Following are
the types of policies on the basis of scope of policies.

(1) General Policies—Such policies are formulated at

the top. They describe the philosophy of top
managers. Such policies are called general because
they do not relate to any specific issue in particular.
(B) On the basis of Scope of policies—Following are
the types of policies on the basis of scope of policies.

(2) Specific Policies—Specific policies relate to

specific issues. Thus, there may be separate specific
policies on staffing, compensation, training,
promotion. These policies may be formulated by the
personnel manager himself although others may also
exert a great deal of influence in shaping them.
 Lessons for HR

 Have a vision. And to achieve it – be hungry, be

foolish.
 All It takes is one person to step forward to make a
difference…
 Relationships last a lifetime, stay in touch!
 Everyone can use a hug.
 Support your team – and when you get your chance
off the bench, go for it!
 Nuggets in Life
 Failure is very important, because it allows you to
succeed!
 Module 2
HRP

HUMAN RESOURCE PLANNING

 Definition

HRP is a process of forecasting an organization’s

future demand for and supply of right type of human
resources in the right number.
 3 parts of the Definition

1. Estimating the demand for manpower. Estimating

the number of employees needed.
(shortage of employees in your organization)

2. Estimating the supply of manpower

(Internal and external supply of manpower)

3. Estimating the type of employees needed

 Objectives/ Importance of HRP

To ensure optimum use of existing human resources

in the organisation.(no understaffing/over staffing)
To forecast future requirements for human resources
(demand).
To assess the surplus and availability of human
resources (supply).
HRP Process
 Environmental Scanning

There are various forces that affect the functioning of

HR Department.
External Forces
 Political & Legal
 Economic Forces
 Technological Forces
 Cultural Forces
Internal Forces
 Organization Strategy
 HR Demand Forecast

HR Demand Forecasting is estimating the quantity

and quality of manpower required to meet the future
needs of the organization.
 HR Demand Forecasting Techniques

1. Managerial Judgment

2. Ratio – Trend Analysis
3. Regression Analysis
4. Work Study Techniques
 Managerial Judgment

There are 2 approaches CEO

Top – down approach
Production
Bottom – up approach Manager
Asst. Production
Manager

Engineers

Supervisors

Workers
 Ratio Trend Analysis

It deals with studying the past ratios and forecasting

the future ratios.
Years No. of Production Ratio
Engineers
-2 150 1500 1:10
Last Year 180 1800 1:10
Present year ? 2000 1:10
Next Year ? 2500 1:10
+2 ? 6000 1:10
Regression Analysis
 Work Study Techniques

Planned output for next year = 20, 000 units

Standard hours per unit = 5 hrs.
Planned hours for the year = 1,00,000 hrs.
Productive hours per man/ year = 2,000hrs.
No. of workers required = 50
 Which method of demand forecasting is used in each of the
following cases

The departmental heads of an insurance

company participate in a meeting and together
based on their vast experiences, predict that the
number of Insurance agents needed in the year
2021 will be 20% higher than 2020.
 Which method of demand forecasting is used in each of the
following cases

Estimated total annual production = 300000 units

Standard man-hours needed to produce each unit =
2 hrs
Estimated man-hours needed to meet estimated
annual production = ?
Productive hours per man/ year = 1500 hrs.
Estimated no. of workers needed = ?
 Which method of demand forecasting is used in each of the
following cases

Estimated production for next year = 1,40,000 units 

The company has ratio-trend of 1: 200
(workers : production)
Estimated no. of workers needed = ?
The company has ratio-trend of 1: 50
(supervisors : workers)
Estimated no. of supervisors needed = ?
 Which method of demand forecasting is used in each of the
following cases

The sales revenue generated by the company for the

last 5 years is as below:
Year Sales volume (in Size of
thousands) workforce
2017 50 50
2018 60 100
2019 75 120
2020 90 150
2021 115 ?
 HR Supply Forecast

HR Supply Forecasting is estimating the quantity

and quality of manpower available to meet the future
demand of the organization.

There are 2 sources of HR Supply

Internal supply
External supply
 HR Supply Forecasting Techniques

Skill Inventories
Staffing Tables
Markov Analysis
Replacement Chart (Succession Plan)
 Skill Inventories

 Skills
 Personal data
 Special
qualifications
 Salary and job
history
 Company data
 Capacity of
individual
 Special
preference of
individual
Staffing Table
 Markov Analysis (Transition probability matrix)

2021

2022
 Markov Analysis (Transition probability matrix)

In (2021) Manager Supervisor Line Exit

Worker
Manager (40) 0.85 0.15
Supervisor(100) 0.15 0.70 0.05 0.10

Line Worker 0.15 0.65 0.20

(160)
Forecasted supply
(2022)
Forecasted 45 90 135
Demand (2022)
 Markov Analysis (Transition probability matrix)

In (2021) Manager Supervisor Line Exit

Worker
Manager (40) 0.85 (34) 0.00 0.00 0.15 (6)
Supervisor(100) 0.15 (15) 0.70 (70) 0.05 (5) 0.10
(10)
Line Worker 0.00 0.15 (24) 0.65 (104) 0.20
(160) (32)
Forecasted supply 49 94 109 48
(2022)
Forecasted 45 90 135
Replacement Chart
HRP process with Action plans