Human Resource Human Resource ManagementManagement

Theories,Techniques Theories,Techniques and Applicationsand Applications

Chapter 1Chapter 1 The Strategic The Strategic Role of Human Role of Human Resource ManagementResource Management

Behavioral ObjectivesBehavioral ObjectivesWhen you finish studying this chapter, you When you finish studying this chapter, you should be able to:should be able to:AnswerAnswer the question, the question, ““ What is Human What is Human Resource Management?Resource Management?””DiscussDiscuss the components of the changing the components of the changing environment of Human Resource environment of Human Resource Management.Management.PresentPresent examples of the new management examples of the new management practices that are changing Human Resource practices that are changing Human Resource management.management.GiveGive examples of human Resource examples of human Resource managementmanagement’’ s role as a strategic business s role as a strategic business partner.partner.

Chapter OutlineChapter Outline

Human Resource Management at WorkHuman Resource Management at Work

The Changing Environment of Human The Changing Environment of Human

Resource Management Resource Management

TomorrowTomorrow’’ s HR Todays HR Today

Strategic Planning and HR ManagementStrategic Planning and HR Management

The Plan of This BookThe Plan of This Book

Key Words : Key Words : management processmanagement processThe five basic functions of planning, organizing, The five basic functions of planning, organizing, staffing, leading, and controlling.staffing, leading, and controlling.

human resource managementhuman resource managementThe policies and practices one needs to carry out The policies and practices one needs to carry out the the ““ peoplepeople”” or human resource aspects of a or human resource aspects of a management position, including recruiting, management position, including recruiting, screening, training, rewarding, and appraising.screening, training, rewarding, and appraising.

Key Words :Key Words :

authorityauthorityThe right to make decisions, direct othersThe right to make decisions, direct others’’ work, and give orders. work, and give orders.

line managerline managerA manager who is authorized to direct the A manager who is authorized to direct the work of subordinates and responsible for work of subordinates and responsible for accomplishing the organization’s goals.accomplishing the organization’s goals.

staff managerstaff managerA manager who assists and advises line A manager who assists and advises line managers.managers.

Key Words :Key Words :

line authorityline authorityThe authority exerted by a personnel The authority exerted by a personnel manager by directing the activities of the manager by directing the activities of the people in his or her own department and in people in his or her own department and in service areas (like the plant cafeteria).service areas (like the plant cafeteria).

implied authorityimplied authorityThe authority exerted by a personnel The authority exerted by a personnel manager by virtue of othersmanager by virtue of others’’ knowledge knowledge that he or she has access to top that he or she has access to top management (in areas like testing and management (in areas like testing and affirmative action).affirmative action).

Key Words :Key Words :functional controlfunctional controlThe authority exerted by an HR manager The authority exerted by an HR manager as coordinator of personnel activities.as coordinator of personnel activities.

employee advocacyemployee advocacyHR must take responsibility for clearly HR must take responsibility for clearly defining how management should be defining how management should be treating employees, make sure treating employees, make sure employees have the mechanisms employees have the mechanisms required to contest unfair practices, and required to contest unfair practices, and represent the interests of employees represent the interests of employees within the framework of its primary within the framework of its primary obligation to senior management.obligation to senior management.

Key Words :Key Words :

globalizationglobalizationThe tendency of firms to extend their The tendency of firms to extend their sales or manufacturing to new markets sales or manufacturing to new markets abroad.abroad.

competitive advantagecompetitive advantageAny factors that allow an organization Any factors that allow an organization to differentiate its product or service to differentiate its product or service from those of its competitors to from those of its competitors to increase market share.increase market share.

Key Words :Key Words :

cost leadershipcost leadershipThe enterprise aims to become the The enterprise aims to become the low-cost leader in an industry.low-cost leader in an industry.

differentiationdifferentiationA firm seeks to be unique in its A firm seeks to be unique in its industry along dimensions that are industry along dimensions that are widely valued by buyers.widely valued by buyers.

The Strategic Roles of HRMThe Strategic Roles of HRM

1.1. What is human resource management?What is human resource management?

2.2. Functions and divisions of human resource Functions and divisions of human resource

management.management.

3.3. Evolution of human resource management Evolution of human resource management

in the west.in the west.

4.4. Human resource management in IndiaHuman resource management in India

1. What is human resource 1. What is human resource management?management?

Definition of HRMDefinition of HRM: :

Human resource management is to make the Human resource management is to make the most productive use of human resource to the most productive use of human resource to the greatest benefits of the organization and greatest benefits of the organization and individuals.individuals.

Organization: profits and social commitments.Organization: profits and social commitments.

Individuals: development and achievement.Individuals: development and achievement.

The importance of HRMThe importance of HRM

(1)(1) People is the key factor of production.People is the key factor of production.

(2)(2) Productivity is the key to measure a nationProductivity is the key to measure a nation’’ s s economic growth potential, and labor quality is economic growth potential, and labor quality is the key to improving productivity.the key to improving productivity.

(3)(3) Competition today is the competition for Competition today is the competition for talents.talents.

(4)(4) Since man is the most uncontrollable and Since man is the most uncontrollable and unpredictable variable of all production unpredictable variable of all production variables, organizational success depends on variables, organizational success depends on the management of people.the management of people.

Changing Role of HRChanging Role of HR

The Strategic Role: To keep the business The Strategic Role: To keep the business goals of the organization as the determining goals of the organization as the determining factor for the overseeing of the personnel’s factor for the overseeing of the personnel’s role in the respective fields of competence. role in the respective fields of competence. Mainly to build a strategy to have the Mainly to build a strategy to have the personnel move towards meeting the market personnel move towards meeting the market demands, through various modes that demands, through various modes that broadly come under the ‘Compensation plan’.broadly come under the ‘Compensation plan’.

Operational Role: This is the essential day to Operational Role: This is the essential day to day needs of the organization that are day needs of the organization that are fulfilled by the correct and apt personnel’s fulfilled by the correct and apt personnel’s work turnout. HRM, therefore plays the part work turnout. HRM, therefore plays the part of the first step of recruitment to the final of the first step of recruitment to the final step of Human resource delivery in sync with step of Human resource delivery in sync with the business goals.the business goals.

Entire Recruitement process, pre-Entire Recruitement process, pre-employment, performance evaluation, employment, performance evaluation, reference generation or checking etc.reference generation or checking etc.

Administrative role: To ensure that the Administrative role: To ensure that the company policies are equally followed in the company policies are equally followed in the organization. Also to see that the company is organization. Also to see that the company is following the local and central Governmental following the local and central Governmental laws and regulations vis a vis the personnel. laws and regulations vis a vis the personnel.

Payments, age of recuitement, etc which fall Payments, age of recuitement, etc which fall under the Human rights and other under the Human rights and other components. components.

Also the HRM monitors individual Also the HRM monitors individual performances and identifies those who may performances and identifies those who may have difficulties in their job deliveries. Before have difficulties in their job deliveries. Before the times of appraisals , the HRM counsels and the times of appraisals , the HRM counsels and guides those who need guidance to maintain guides those who need guidance to maintain certain standards for retaining their jobs, or certain standards for retaining their jobs, or those who are in the line for promotions etc.those who are in the line for promotions etc.

Human Resource Information Systems (HRIS) Human Resource Information Systems (HRIS) is the main data base that holds all the is the main data base that holds all the information and records.information and records.

Organization and Organization and individualindividual

(1)(1) Organization needs: Profits, productivity Organization needs: Profits, productivity

and markets.and markets.

(2)(2) Individual needs: Maslows Need HierarchyIndividual needs: Maslows Need Hierarchy

Physiological needs, security, belonging, Physiological needs, security, belonging,

self-respect and self-actualization.self-respect and self-actualization.

(3) Coordinating organization and individual (3) Coordinating organization and individual

needs: goal of HRM.needs: goal of HRM.

People and People and productivityproductivity

(1)(1) Productivity: the measurement of economic Productivity: the measurement of economic growth potential.growth potential.

(2)(2) Productivity formula: input : outputProductivity formula: input : output

(3)(3) Measurement of productivity:Measurement of productivity:

a.a. Productivity of worker is the output per hour.Productivity of worker is the output per hour.

b.b. Productivity of equipment is the output per Productivity of equipment is the output per every dollar invested.every dollar invested.

c.c. Productivity of energy is the output per every Productivity of energy is the output per every unit of energy consumed.unit of energy consumed.

Employee quality and productivityEmployee quality and productivity

(1)(1) Employee skill determines productivity.Employee skill determines productivity.

Man and tools.Man and tools.

(1)(1) Employee motivation affects productivity.Employee motivation affects productivity.

Willingness to perform.Willingness to perform.

(1)(1) Employee creativity and initiatives improve Employee creativity and initiatives improve productivity.productivity.

innovation is the key to improvement.innovation is the key to improvement.

6. Functions and divisions of 6. Functions and divisions of HRMHRM

(1)(1)Management processManagement process

a.a. Planning.Planning.

b.b. Organizing.Organizing.

c.c. Staffing.Staffing.

d.d. Leading.Leading.

e.e. Controlling.Controlling.

(2) Functions of HRM(2) Functions of HRMa.a. Conducting job analysis.Conducting job analysis.

b.b. Planning future needs and supplies.Planning future needs and supplies.

c.c. Recruiting and selecting employees.Recruiting and selecting employees.

d.d. Orienting and training employees.Orienting and training employees.

e.e. Managing wages and benefits.Managing wages and benefits.

f.f. Performance appraisal.Performance appraisal.

g.g. Communicating (discipline and services).Communicating (discipline and services).

h.h. Building employee commitment (incentives).Building employee commitment (incentives).

(3) Line managers(3) Line managers’’ HRM responsibilities HRM responsibilities

a.a. Job placing.Job placing.

b.b. Orienting new employees.Orienting new employees.

c.c. On-job training of employees.On-job training of employees.

d.d. Interpreting company policies and Interpreting company policies and procedures.procedures.

e.e. Conducting job appraisals.Conducting job appraisals.

f.f. Controlling labor costs.Controlling labor costs.

g.g. Labor protection and disciplines.Labor protection and disciplines.

(4) Staff managers(4) Staff managers’’ HRM responsibilities HRM responsibilities

a.a. A line function: directing and managing A line function: directing and managing people in the HRM department.people in the HRM department.

b.b. A coordinating function: coordinating A coordinating function: coordinating HRM activities across the organization.HRM activities across the organization.

c.c. Staff functions:Staff functions:

Same as the HRM functions plus labor Same as the HRM functions plus labor relations and collective bargaining with relations and collective bargaining with the trade unions.the trade unions.

3. Evolution of HRM in the west3. Evolution of HRM in the west

(1)(1) Industrial Revolution: Industrial Revolution:

a.a. Adam Smith: specialization and Adam Smith: specialization and division of labor.division of labor.

b.b. Robert Owens: Pioneer of HRM, Robert Owens: Pioneer of HRM, performance appraisal and pay for performance appraisal and pay for performance (fair treatment of performance (fair treatment of employees)employees)

(2) Scientific management(2) Scientific management

Frederic Taylor: Father of scientific Frederic Taylor: Father of scientific managementmanagement

a. Definition: a. Definition:

Systematic analysis and breakdown of work Systematic analysis and breakdown of work into the smallest mechanical components into the smallest mechanical components and rearranging them into the most and rearranging them into the most efficient combination.efficient combination.

b. Steps: b. Steps:

Job analysis—selection—training—rewards.Job analysis—selection—training—rewards.

(3) Industrial psychology(3) Industrial psychology

a.a. Hneri FayolHneri Fayol’’ s management functions:s management functions:

Planning, organizing, communicating, Planning, organizing, communicating, coordina- ting and controlling.coordina- ting and controlling.

b.b. F. & L. GilbrethF. & L. Gilbreth’’ s principles of work s principles of work simplification (time and motion studies).simplification (time and motion studies).

c.c. Henry GanttHenry Gantt’’ s principles of work s principles of work scheduling.scheduling.

d. Continuation of scientific management.d. Continuation of scientific management.

(4) Human behavior and relations(4) Human behavior and relations

a.a. The Hawthorne Studies by Westing The Hawthorne Studies by Westing HouseHouse

The happy workers are the most The happy workers are the most productive workers. (The Pet Milk theory)productive workers. (The Pet Milk theory)

b.b. Max Weber: the Ideal Bureaucracy.Max Weber: the Ideal Bureaucracy.

c.c. Chris Argyris: Individual and organizationChris Argyris: Individual and organization—mutual adjustment.—mutual adjustment.

d.d. Affected by the theories of behavioral Affected by the theories of behavioral science and system theory.science and system theory.

(5) Three stages of growth of HRM(5) Three stages of growth of HRM

a.a. File Management : collecting and File Management : collecting and storing data of each employee.storing data of each employee.

b.b. Government Accountability : Government Accountability : Compliance to government regulations.Compliance to government regulations.

c.c. Human Resource Management: Human Resource Management:

Treating human resource as an asset.Treating human resource as an asset.

Emphasizing joint responsibilities of line Emphasizing joint responsibilities of line managers and staff managers.managers and staff managers.

Human Resource Management therefore acts Human Resource Management therefore acts as the “sensitive bridge that balances and as the “sensitive bridge that balances and connects the Business goals and the Human connects the Business goals and the Human factors in the organization” factors in the organization”