Organizational Resource

Management

ORM 1: Nov-2012

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Westford School of Management – All rights reserved

SUMMARY OF LEARNING OUTCOMES

1. Understand the role of human resource management in supporting business strategy

2. Know how to develop human resources in organisations

3. Understand the role of marketing in supporting business strategy

4. Understand the role of information systems management in supporting business strategy

Assignments Schedule

22nd Nov 2012 Case Study – Complete Task1 Pertaining to Learning Outcomes 1 and 2.

6th Dec 2012 Case Study – Complete Task 2 Pertaining to Learning Outcomes 3 and 4.

NATURE OF PERSONNEL MANAGEMENT

WHAT DO YOU UNDERSTAND BY PERSONNEL MANAGEMENT?

NATURE OF PERSONNEL MANAGEMENT

• DEFINITION: PERSONNEL MANAGEMENT IS THAT PART OF MANAGEMENT CONCERNED WITH PEOPLE AT WORK & WITH THEIR RELATIONSHIPS WITHIN AN ENTERPRISE.(recruitment, contract, salaries, vacation)

• SOMEONE IN EVERY ORGANIZATION WILL NEED TO BE RESPONSIBLE FOR RECRUITMENT, SELECTION, TRAINING, MOTIVATION, PAYMENT, MOVEMENT OF STAFF, COMPLIANCE WITH LAWS RELATING TO EMPLOYMENT, ETC. WHICH IS TRADITIONALLY THE ROLE OF PERSONNEL FUNCTION.(HRM)

• MORE PROACTIVE & STRATEGIC APPROACH TO PEOPLE MANAGEMENT IS KNOWN AS HRM.

HISTORICAL DEVELOPMENT OF PERSONNEL MANAGEMENT

• THE WELFARE TRADITION.• THE INDUSTRIAL RELATIONS

TRADITION.• THE CONTROL OF LABOUR

TRADITION.• THE PROFESSIONAL

TRADITION.

Personnel Management: Historical Perspective

• Industrial Revolution– Consolidation & Mechanization of

Production• from cottage system to factory system

(rural area )

– Routinization of Work– Workers: greater income, but longer

hours– Conditions: unsafe & unhealthy

Emergence of Personnel Management

• Industrial Welfare Movement– administered by “welfare

secretaries”– point of contact between company &

employees

• Scientific Management– work studies & work standards for

efficiency– training in work standards for

employees– hiring; fitting workers to the work

A Changing Labor Force: 1910s to 1930s

• WWI-- labor shortage• compounding high turnover• who deals with these issues?• Seek people that better fit organization

• Immigration laws tighten• people’s educational level increases• workers demand better treatment

• Hawthorne Study• relationships can make a difference• satisfaction can improve productivity

– grease the wheels• Great Depression

• unemployment compensation/SS

Workforce: WWII & Post-WWII

• WWII– Labor shortage; women in workforce– Training increases

• Post WWII– Demand for production increases– Technology increases– Government regulations

• Civil Rights; Equal Pay Act; OSHA; EEOC

Approaches to Human 'Resource' Management

Control-Based

Commitment-Based

PERSONNEL FUNCTION IN AN ORGANIZATION

BUSINESS STRATEGY & CULTURE

LINE MANAGEMENT

EMPLOYEES

PERSONNEL MANAGEMENT FUNCTION

FUNCTIONAL & PRODUCT-MARKET STRATEGIES

RELATIONSHIP

DIRECT

ADVISORY

EMERGENCE OF HRM

WHAT DO YOU UNDERSTAND BY HUMAN RESOURCE MANAGEMENT?

Implication: Human Resource Management

is now more than Personnel Management

• The HR function is basic to the success of all organizations

• Spans across the organization • Touches most aspects of the organization

• Human Resource Function = HRM + HRD

• ‘Personnel Management’• Organizational & Individual Development

– Integrating the human dimension with the organizational structure Optimization of Human Resource

The Role of HR Professional

People

•Individual Development

•Organizational Development

•Integrating Humans w/ Structure

•Employee Relations

•Employee Benefits

•Information & Reward Systems

•Job Design

•Performance Management

•HR Planning

HRM HRD

HRM x HRD

EMERGENCE OF HRM

DEFINITION: HRM IS A STRATEGIC APPROACH TO MANAGING EMPLOYMENT RELATIONS WHICH EMPHASISES THAT LEVERAGING (developing) PEOPLE’S CAPABILITIES IS CRITICAL TO ACHIEVING SUSTAINABLE COMPETITIVE ADVANTAGE, THIS BEING ACHIEVED THROUGH A DISTINCTIVE SET OF INTEGRATED EMPLOYMENT POLICIES, PROGRAMS & PRACTICES. (BRATTON & GOLD, 2007)

EMERGENCE OF HRM

HRM IS ASSOCIATED WITH:• AN ORIENTATION TOWARDS PERSONNEL

MANAGEMENT, VIEWING ITS ROLE AS PROACTIVE, LINKING HRM WITH STRATEGIC PLANNING

• AN ORIENTATION TOWARDS THE EMPLOYMENT RELATIONSHIP, EMBRACING DISTINCTIVE PEOPLE-CENTRED VALUES SUCH AS TRUST, COMMITMENT, INVOLVEMENT & COLLABORATION.

CHARACTERISTICS OF HRM

o STRATEGIC FIT OR INTEGRATION BETWEEN HR & BUSINESS PLANNING (VERTICAL INTEGRATION).

o DEVELOPMENT OF MUTUALLY-SUPPORTING HR POLICIES & PRACTICES (HORIZONTAL INTEGRATION).

o ORIENTATION TOWARDS COMMITMENT BY SECURING EMPLOYEE IDENTIFICATION WITH ORGANIZATION’S GOALS & VALUES.

o TREATMENT OF PEOPLE AS ASSETS RATHER THAN COSTS BY REGARDING EMPLOYEES AS HUMAN CAPITAL.

CHARACTERISTICS OF HRM

o A UNITARIST APPROACH TO EMPLOYEE RELATIONS, WHICH ASSUMES THAT THERE NEED TO BE NO INHERENT CONFLICT OF INTEREST BETWEEN EMPLOYERS & EMPLOYEES.

o THE RESPONSIBILITY OF LINE MANAGEMENT FOR DELIVERY OF HRM OBJECTIVES.

CHARACTERISTICS OF HRM

FOUR KEY POLICY GOALS OF HRM:o STRATEGIC INTEGRATION: HRM Strategies

shall from the Organizational Strategieso HIGH COMMITMENT:HR needs to bring

positive change in both the Attitudes and Behaviors of the employees

o FLEXIBILITY :people cannot be treated like other organizational resources, they demand attentions, care, empathy, motivation, commitment and better work environment

o HIGH QUALITY : its about taking actions that ensures efficiency and effectiveness

HRM: STRATEGIC INTEGRATION OF PERSONNEL

MANAGEMENT

BUSINESS STRATEGY & CULTURE

LINE MANAGEMENT

EMPLOYEES

FUNCTIONAL & PRODUCT-MARKET STRATEGIES

RELATIONSHIP

DIRECT

ADVISORY

PERSONNEL MANAGEMENT FUNCTION

HRM

ACTIVITY 2THINK OF THE BUSINESS CONTEXT(S) YOU ARE

FAMILIAR WITH IN THE HR/ PERSONNEL FIELD. ACTIVITY TEXT:

1. WHAT LABEL IS GIVEN TO THE PERSONNEL MANAGEMENT FUNCTION IN THE ORGANIZATION?

2. IS THE TERM ’HRM’ USED-AND IF SO WHAT IS IT UNDERSTOOD TO MEAN?

3. IF THE NAME ‘HRM’ WAS ADOPTED IN PLACE OF ‘PERSONNEL MANAGEMENT’, HOW WAS THIS REFLECTED IN CHANGES OF PHILOSOPHY, POLICY & PRACTICE?

From Personnel to Strategic HR• Clarify rules and

procedure for personnel

• Support function• Control & Monitor

labor matters• Not of concern to the

‘real’ business of the organization

• Emphasis on business needs

• Facilitative, Consultative function

• Develop the Individual & the Organization

• Integrated with business strategy

HUMAN RESOURCE PLANNING

• Human resource planning: the development of a comprehensive staffing strategy for meeting the organization’s future human resource needs.

Human Resource PlanningA Strategic Orientation to Optimal Staffing

Organizational Strategyand Structure

HR Strategic Planning

Assess Capabilities

Forecast NeedsEvaluate

Develop HR Plans

LATERAL THINKING

• COAST TO COAST:TRAIN A AND TRAIN B ARE CROSSING THE COUNTRY, FROM COAST TO COAST, OVER 3,000 MILES OF RAILROAD TRACK. TRAIN A IS GOING FROM EAST TO WEST AT 80 MILES PER HOUR, AND TRAIN B IS GOING FROM WEST TO EAST AT 90 MILES PER HOUR. WHICH TRAIN WILL BE CLOSER TO THE WEST COAST WHEN THEY MEET?

ROLE & STRUCTURE OF HRM FUNCTION

o ORGANIZATION DESIGN & DEVELOPMENT.

o HR PLANNING & RESOURCING.o PERFORMANCE MANAGEMENT.o REWARD MANAGEMENT.

CONTD………….

ROLE & STRUCTURE OF HRM FUNCTION

o HRD TO INCLUDE LEARNING, PERSONAL DEVELOPMENT & CAREER MANAGEMENT.

o HEALTH, SAFETY & WELFARE TO INCLUDE OCCUPATIONAL HEALTH & SAFETY & WELFARE SERVICES.

o EMPLOYEE RELATIONS TO INCLUDE INDUSTRIAL RELATIONS, EMPLOYEE COMMUNICATION & GRIEVANCE REDRESSAL.

o HR SERVICES TO INCLUDE HR POLICIES & PROCEDURES, HR MIS, COMPLIANCE AS PER LEGAL REGULATIONS.

ROLE OF HR MANAGEMENT

o PLANNING/ ORGANIZING ROLE: Manpower Planning

o STRATEGISTS ROLE. Establishing the HRM strategic plan

o BUSINESS PARTNERS ROLE: The HR Business Partner was a defined as the real partner to the internal clients, the partner understanding the needs of clients and bringing the right solutions to aiming to resolve the issues.

o INTERNAL MANAGEMENT CONSULTANTS: Serving as a change agent, coach, educator or facilitator within a company

ROLE OF HR MANAGEMENT

o GUIDANCE ROLE. Clear policies and practices ,ruleso ADVISORY ROLE. advisors develop innovative HR

solutions to address customer issues and achieve specific business goals (with an eye on those of tomorrow). The seven critical general competencies in this role are: Creative Thinking, Client Engagement/Change Management, Decision Making, Flexibility, Influencing/Negotiating, Project Management, Reasoning

o SERVICE ROLE :Formulating of human resources management policies , Recruiting, placing and promoting 

o CONTROL/ AUDITING ROLE. Performance Apprasial

o Evaluating and measuring the performance

ACTIVITY 3

IF A COMPANY HAS A STRATEGIC OBJECTIVE OF ENHANCING ITS CUSTOMER SATISFACTION LEVELS, WHAT WILL BE THE ROLES PLAYED BY:

1. PERSONNEL MANAGER.2. HR MANAGER.WILL THE OUTCOMES BE THE SAME?

EVALUATING THE HR OUTCOMES

PROBLEMS OF EVALUATION

1. WHILE PERFORMANCE BASED CRITERIA (PROFIABILITY, PRODUCTIVITY, ETC.) CAN BE MEASURED,

2. SUBJECTIVE CRITERIA LIKE QUALITY OF WORKING LIFE, MOTIVATION, TEAM SPIRIT, JOB SATISFACTION, ETC. ARE DIFFICULT TO MEASURE.

2. IT IS DIFFICULT TO ATTRIBUTE BUSINESS PERFORMANCE ON HRM ALONE DUE TO OTHER VARIABLES LIKE TECHNOLOGY, MANAGEMENT EFFECTIVENESS, MARKET CONDITIONS, ETC.

CONTD………….

EVALUATING THE HR OUTCOMES

PROBLEMS OF EVALUATION

3. BENCHMARKING ON BASIS OF BEST PRACTICES IN OTHER ORGANIZATIONS IS DIFFICULT BECAUSE OF DIFFERENCES IN ENVIRONMENTAL & INTERNAL VARIABLES AFFECTING DIFFERENT ORGANIZATIONS.

4. HRM ITSELF IS A WIDE RANGING ACTIVITY, & THEREFORE REQUIRES A WIDE RANGE OF CRITERIA FOR EVALUATION.

EVALUATING THE HR OUTCOMES

COST-BENEFIT ANALYSIS1. WHETHER THE COSTS ARE JUSTIFIED

BY EQUAL OR GREATER BENEFITS.2. WHETHER COSTS AND/ OR BENEFITS

ARE INCREASING OR DECREASING OVER TIME.

3. HOW THE COSTS AND/ OR BENEFITS COMPARE TO COMPETITOR OR BENCHMARK ORGANIZATIONS.

ACTIVITY 4

BRAINSTORM EXAMPLES OF BENEFIT CRITERIA & COST CRITERIA RELEVANT TO HR MANAGEMENT.

EVALUATING THE HR OUTCOMES

QUANTITATIVE MEASURESo STAFF TURNOVER/ LABOUR WASTAGE RATIOS.o ABSENTEEISM RATES.o INCIDENCES OF GRIEVANCE PROCEDURES,

DISCIPLINARY PROCEDURES, APPEALS TO INDUSTRIAL TRIBUNALS, COMPENSATION CLAIMS, PROCEEDINGS FOR NON-COMPLIANCE, ETC.(internally or externally Problems)

o NUMBER OF DAYS OF PRODUCTION LOSS & ASSOCIATED COSTS THROUGH ACCIDENTS, SICKNESS, INDUSTRIAL DISPUTES, ETC.

CONTD……….

EVALUATING THE HR OUTCOMES

QUANTITATIVE MEASURESo LEAD TIME TO RECRUIT AN EMPLOYEE.o NUMBER OF STAFF UNDERTAKING TRAINING

PROGRAMMES & TRAINING PROGRAMMES SUCCESS.

o NUMBER OF REQUESTS FOR INFORMATION HANDLED BY HR DEPT., LEAD TIME IN RESPONDING TO REQUESTS, ABILITY TO ANSWER TECHNICAL & OTHER QUESTIONS.

o THE COST OF ANY AND ALL OF THE ABOVE.

EVALUATING THE HR OUTCOMES

QUALITATIVE MEASURESo EMPLOYEE MOTIVATION, TEAM SPIRIT, JOB

SATISFACTION, ACCEPTANCE OF CHANGE, ETC. – AS GAUGED BY ATTITUDE SURVEYS, INTERVIEWS, PSYCHOLOGICAL TESTING & OTHER TOOLS OF BEHAVIOURAL SCIENCE.

o THE EXTENT TO WHICH HR PROPOSALS, POLICIES, DOCUMENTATION, ETC. ARE ACCEPTED BY LINE MANAGERS – AS SUGGESTED BY IMPLEMENTATION RATES, QUESTIONS & OBJECTIONS.

o THE PERCEPTION OF HR FUNCTION’S VALUE, SERVICE, EXPERTISE, QUALITY OF ADVICE, PROFESSIONALISM, ETC. BY ITS INTERNAL CUSTOMERS: SENIOR MANAGEMENT, LINE MANAGERS & EMPLOYEES.

EVALUATING THE HR OUTCOMES

THE FOUR Cs: DEVELOPED BY HARVARD BUSINESS SCHOOL. IT SUGGESTS THAT THE EFFECTIVENESS OF THE OUTCOMES OF HRM SHOULD BE EVALUATED UNDER THE FOUR HEADINGS.

o COMMITMENT – EMPLOYEES IDENTIFICATION WITH THE ORGANIZATION, LOYALTY & PERSONAL MOTIVATION IN THEIR WORK. LIKE QUALITATIVE CRITERIA, MAY BE ASSESSED THROUGH ATTITUDE SURVEYS, EXIT INTERVIEWS & ANALYSIS OF EFFECTS SUCH AS ABSENTEEISM & LABOUR TURNOVER.

o COMPETENCE – EMPLOYEES’ SKILLS & ABILITIES, TRAINING NEEDS & POTENTIAL FOR PERFORMANCE IMPROVEMENT & CAREER DEVELOPMENT. MAY BE MEASURED THROUGH SKILL AUDITS, COMPETENCY TESTING & PERFORMANCE MANAGEMENT SYSTEMS.

EVALUATING THE HR OUTCOMES

THE FOUR Cs: DEVELOPED BY HARVARD BUSINESS SCHOOL. IT SUGGESTS THAT THE EFFECTIVENESS OF THE OUTCOMES OF HRM SHOULD BE EVALUATED UNDER THE FOUR HEADINGS.

o CONGRUENCE – HARMONISATION OF THE GOALS, VALUES

& EFFORTS OF MANAGEMENT, & EMPLOYEES. MAY BE ESTIMATED BY THE QUALITY OF EMPLOYEE/ INDUSTRIAL RELATIONS, INCIDENCE OF GRIEVANCE & DISCIPLINARY ACTION, CONFLICTS, COMMUNICATION, ETC.

o COST-EFFECTIVENESS – EFFICIENCY, WHEREBY HRM OBJECTIVES ARE MET & BENEFITS OBTAINED AT THE LOWEST INPUT COST.

ACTIVITY 5

IN YOUR OWN ORGANIZATION, OR AN ORGANIZATION YOU KNOW WELL, HOW WOULD YOU ASSESS THE EFFECTIVENESS OF ITS HRM, ACCORDING TO THE FOUR Cs MODEL.

Thanks