Human Resources Management

in Business
Ch: 6-7
 HUMAN RESOURCE MANAGEMENT (HRM)
• HRM is defined as the function of attracting, developing and
maintaining sufficient number of skilled employees to
perform the activities to achieve organizational goals.
• Definition of Gary Dessler:
‘’The policies and practices one needs to carry out the people or
human resource aspects of management positions including
recruiting, screening, training, rewarding and appraising.’’
EVOLUTION OF HRM
Importance of HRM
Functions of HRM
 ENVIRONMENTAL INFLUENCES
ON HRM

EXTERNAL INTERNAL
ENVIRONMENTAL ENVIRONMENTAL
FACTORS FACTORS

• WORKFORCE DIVERSITY
• PERSONAL FACTORS
• EXTERNAL SOURCES OF HR • JOB CHARACTERISTICS
• COMPETITORS • INTERPERSONAL RELATIONS
• REGULATORS • ORGANIZATIONAL FACTORS
HR Functions
 HR PLANNING
DETERMINING THE RIGHT AMOUNT OF PEOPLE, WITH THE RIGHT
QUALIFICATIONS AT THE RIGHT TIME AND THE RIGHT PLACE

DETERMINING THE RIGHT DETERMINING THE RIGHT

NUMBER QUALIFICATION
• PAST EXPERIENCES • JOB ANALYSIS
• EVALUATING WORK LOADS
• JOB DESCRIPTIONS
• PRODUCTION TECHNOLOGY
• JOB SPECIFICATIONS
• PRACTICES OF OTHER FIRMS
• JOB EVALUATIONS
 JOB ANALYSIS METHODS

• INTERVIEW METHOD
• STRUCTURED QUESTIONNAIRE METHOD
• OBSERVATION METHOD
• DIARY METHOD
 Job Analysis
• Job description
• Job specification
• Job evaluation
HR RECRUITING AND SELECTION
SELECTION PROCESS FROM EXTERIOR SOURCES
 HR RECRUITING AND SELECTION
RECRUITING SELECTION
(CANDIDATE SEARCH AND FIND PROCESS) (SELECT THE QUALIFIED EMPLOYEES AMONG
CANDIDATES)
• INTERIOR SOURCES
• INTERIOR SOURCES
• EXTERIOR SOURCES
• EXTERIOR SOURCES

TESTS AND INTERVIEWS

TESTS
• COGNITIVE ABILITY TESTS
• PHYSICAL ABILITY TESTS
• PERSONALITY AND INTEREST TESTS
• ACHIEVEMENT TESTS
INTERVIEWS
• STRUCTURED INTERVIEW
• INTERVIEW ACCORDING TO THE
PURPOSE
• INTERVIEWS ACCORDING TO THEIR
CONTENT
• INTERVIEWS ACCORDING TO THE
WAY THEY ARE CONDUCTED
Structured Interview Form
HR ORIENTATION AND TRAINING
NON-MANAGERIAL LEVEL TRAINING PROGRAMS
MANAGERIAL LEVEL TRAINING PROGRAMS
 HR PERFORMANCE APPRAISAL
• A performance appraisal (PA) or performance evaluation is a systematic and
periodic process that assesses an individual employee’s job performance and
productivity, in relation to certain pre-established criteria and organizational
objectives.
• A PA is typically conducted annually though the frequency and policies concerning
PAs vary widely between workplaces.
Peter Drucker suggests using S.M.A.R.T Objectives in the appraisal process:
Specific
Measurable
Achievable
Realistic
Time-related
Employee evaluations include:
• An assessment of how well the employee is doing
• Employee goals with deadlines
• Feedback from coworkers and supervisors
• Details about workplace standing, promotions, and pay raises
HR PERFORMANCE APPRAISAL
IDENTIFYING THE EMPLOYEES’ ACTUAL PAST PERFORMANCES IN THEIR JOBS AND THEIR
POTENTIAL IMPROVEMENTS

HR PERFORMANCE APPRAISAL METHODS

• METHODS USING ABSOLUTE STANDARTS
• ESSAY METHOD
• CHECKLIST METHOD
• CRITICAL INCIDENT METHOD
• FORCED CHOICE METHOD
• RATING SCALE METHOD

• METHODS USING RELATIVE STANDARTS

• INDIVIDUAL RANKING METHODS
• PAIRED COMPARISON METHOD
• GROUP ORDER RANKING METHOD
(FORCED DISTRIBUTION METHOD)

• METHODS USING OBJECTIVES

METHODS USING ABSOLUTE STANDARTS
METHODS USING RELATIVE STANDARTS
 METHODS USING OBJECTİVES
• Management by objectives (MBO) is the appraisal method where
managers and employees together identify, plan, organize, and
communicate objectives to focus on during a specific appraisal period.
After setting clear goals, managers and subordinates periodically discuss
the progress made to control and debate on the feasibility of achieving
those set objectives.
• This performance appraisal method is used to match the overarching
organizational goals with objectives of employees effectively while
validating objectives using the SMART method to see if the set objective is
specific, measurable, achievable, realistic, and time-sensitive.
• At the end of the review period (quarterly, half-yearly, or annual),
employees are judged by their results. Success is rewarded with
promotion and a salary hike whereas failure is dealt with transfer or
further training.
METHODS USING OBJECTİVES
 METHODS USING OBJECTİVES
• To ensure success, the MBO process needs to be embedded in the
organizational-wide goal setting and appraisal process. By incorporating
MBO into the performance management process, businesses can improve
employee’s commitment, amplify chances for goal accomplishment, and
enable employees to think futuristically.
Steps to implement a successful MBO program:
1. Every manager must have 5-10 goals expressed in specific, measurable terms
2. Manager can propose their goals in writing, which will be finalized after review
3. Each goal needs to include a description and a clear plan (list of tasks) to
accomplish it
4. Determine how progress will be measured and how frequently (minimum
quarterly)
5. List down corrective actions that will be taken if progress is not in accordance with
plans
6. Ensure that goals at each level are related to the organizational objectives and
levels above/below
HR COMPENSATION MANAGEMENT
JOB EVALUATIONS
SYSTEMATIC PROCEDURES TO COMPARE JOBS IN ORDER TO DETERMINE
THE WORTH OF ONE JOB RELATIVE TO OTHER EXISTING JOBS
STEPS OF JOB EVALUATIONS
METHODS OF JOB EVALUATIONS
INCENTIVES
EXTRA ALLOWANCES OFFERED TO AN EMPLOYEE TO ENCOURAGE HIM TO INCREASE HIS
EFFORT IN PERFORMING HIS TASK
TYPES OF INCENTIVE PLANS
• INDIVIDUAL INCENTIVE PLANS
• GROUP-BASED INCENTIVE PLANS
• COMPANY-BASED INCENTIVE PLANS
SOME EXAMPLES OF INCENTIVES
• PIECEWORK PLANS
• TIME-BASED PLANS
• COMMISSION PLANS
• ANNUAL BONUS PLANS
• STOCK OPTION/OWNERSHIP PLANS
• PROFIT SHARING PLAN

FRINGE BENEFITS
NON-FINANCIAL VOLUNTARY OR MANDATORY BENEFITS AND SERVICES OFFERED TO EMPLOYEES
VOLUNTARY FRINGE BENEFITS MANDATORY BENEFITS
OFFERED BY THE EMPLOYER • SECURITY BENEFITS
• PAYMENT FOR TIME NOT WORKED • SAFETY BENEFITS
• PROTECTION AGAINST HAZARDS • HEALTH BENEFITS
• RETIREMENT BENEFITS
• SERVICES AS FRINGE BENEFITS
HR Challenges
Turnover
Turnover is the rate at which
employees leave an organization.
Main causes of turnover
•lower performance
•lack of reward contingencies for performance
•better external job opportunities
Causes of Employee Turnover
The following is a list of the top reasons why people change jobs:
●The downsizing or the restructuring of an organization (54 percent)
●New challenges or opportunities that arise (30 percent)
●Poor or ineffective leadership (25 percent)
●Having a poor relationship with a manager (22 percent)
●For better work-life balance (21 percent)
●Contributions are not being recognized (21 percent)
●For better compensation and benefits (18 percent)
●For better alignment with personal and organizational values (17 percent)
●Personal strengths and capabilities are not a good fit with an organization (16
percent)
●The financial instability of an organization (13 percent)
●An organization relocated (12 percent)
Reducing Employee Turnover
Providing a stimulating workplace environment which fosters happy, motivated
and empowered individuals lowers employee turnover and absentee rates.

Creating a work environment that supports personal and professional growth

promotes harmony and encouragement on all levels.

Continual training and reinforcement also help to develop a workforce that is

•competent
•consistent
•competitive
•efficient
New Challenges in HR Management
An aging workforce, globalization, increased diversity,
working from home, and advances in technology all
create an environment that brings new challenges to
human resources.
New Challenges Facing HR Managers
Today
Workforce diversity: Similarities and differences among employees in
terms of age, cultural background, physical abilities and disabilities, race,
religion, gender, and sexual orientation.
No two humans are alike. People are different in not only gender,
culture, race, social and psychological characteristics but also in their
perspectives and prejudices. Society had discriminated on these
aspects for centuries. Diversity makes the work force heterogeneous. In
current scenario, employing diversified workforce is a necessity for every
organization but to manage such diversified workforce is also a big
challenge for management
Organizations are recognizing that diversity can be a competitive
advantage.
New Challenges Facing HR Managers
Today
Contingent Workers: – A person who works for an organization on something
other than a permanent or full-time basis.
• Independent contractors
• On-call workers
• Temporary employees
• Contract and leased employees
• Part-time workers
Contingent workers are not considered employees of a company. They work as
freelancers under a contract or on a temporary basis. Unlike permanent
employees, their retention depends on the continued existence of the job at hand.
Contingent workers do not receive salaries. Instead, they receive payments or
commissions for the work done. They are not liable for benefits like contracted
employees and are responsible for their own taxes. Contingent workers cannot be
told how to complete a project, as they work for themselves. The company’s main
focus when dealing with them is on the results of the project, not how it is being
done.
New Challenges Facing HR Managers
Today
Workplace violence: Workplace violence is violence or the threat of
violence against workers. It can occur at or outside the workplace and can
range from threats and verbal abuse to physical assaults and homicide,
one of the leading causes of job-related deaths. However it manifests
itself, workplace violence is a growing concern for employers and
employees nationwide.
If HR did more to provide training, counseling, financial advice and other
benefits to employees, it could save lives.
New Challenges Facing HR Managers
Today
Technological challenges: Technology is no longer siloed in the IT
department. Now, it's an integral concern for every team throughout an
organization — especially human resources.
By developing a cohesive, strategy-based relationship with your IT
department, together your teams can tackle one of the most important
challenges of human resource management and one that affects the
entire organization: digital transformation.
HR leaders understand that their work revolves around personal matters,
and new HR technologies can help solve problems without removing the
human element.
New Challenges Facing HR Managers
Today
Exponential Growth in knowledge : trade in knowledge-intensive goods and services such as
biomedicine, robotics, and engineering- AI, ML, VR,AR
Shift in human competencies: knowledge workers.
Global market connection: Technology is dissolving borders and creating an interconnected
marketplace.
Business & IT: Easy to use communication as whatsapp, e-mail, electronic conferencing, and
databases for better decisions to geographically dispersed workers.
Innovation: Teams of marketing, engineering, and production personnel working in parallel with
computerized files, data, information develop products faster. Eg Simulations
Quality improvement: The entire process of production, marketing, and servicing is enhanced by
computer monitoring systems and through robotics
Artificial Intelligence: The expert systems - computerized programs- capture the knowledge
processing & decision making process as in analytics
Rapid response: Technology permits quicker communications, which allows faster decision-
making.
Automated services: Routine process, services, IVR, guided demos, kiosks, vending machines
Easy Payment services: internet, plastic money, m- banking, cardless cash, UPI
Advanced logistic services : tracking, video monitoring