Acquiring inputs from environment Conversion Process Exporting to Environment Outputs Organization as Input-Output system Using financial resources by human resources By human resources By human resources
Meaning: It is a process of bringing people and organizations together so that the goals of each are met. According to Invancevich and Glueck : “HRM is concerned with the most effective use of people to achieve organizational and individual goals.” According to Milkovich and Boudreau : “Human Resource Management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organizations and the employees to achieve their objectives.”
Features of Human Resource Management A process Pervasive force Action Oriented Individually Oriented People Oriented Development Oriented Integrating Mechanism Comprehensive Function Auxiliary Service Inter-disciplinary Function Continuous Function
Scope of HRM The scope of HRM is very wide. The Indian Institute of Personnel Management has specified the scope of HRM as follows: Welfare Aspect Personnel Aspect Industrial Relations Aspect
Comparison on HRM and Personnel Management There have been several approaches on the concepts of relationship between HRM and Personnel management: Comparison includes studying Similarity and Differences. Armstrong suggests common features of Personnel management and Human Resource Management: Strategies of both stem from the business strategy. 2. Both these recognize that line managers are responsible for managing people. And the line managers are enabled by the advice and support of the personnel department to carry out their responsibilities.
3. The value of personnel management and those of soft version of human resource management are identical vis-à-vis respect for individual, integration of individual needs and organizational goals, and development of people to accomplish competence to facilitate individual and organizational interests. Both attach importance to the function of matching people to ever-changing business requirements. Both use the same range of selection, competence analysis, performance management, training, management development and reward management techniques. The soft version of human resource management and personnel management stresses the process of communication and participates within the employee relations analysis.
Differences between Personnel Management and HRM Personnel Management is a routine, maintenance-oriented administrative function; human resource management places emphasis on a continuous development of people at work. 2. Personnel Management function is mainly reactive and responds to the demands of an organization whenever they arise, while HRM is proactive function (more future oriented) 3. Personnel Management is seen as independent function and sub-functions without giving due-regard to organizational strategies and processes. HRM is viewed as sub-system of the organization as it takes into account its linkages and interfaces with all other parts of the organization.
4. Personnel Management has a narrow focus it mainly works on improving the efficiency of personnel in isolation without emphasizing the relevance of efficiency in the organizational context, while HRM undertakes a systems view which attempts to create a proper organizational culture. 5. Personnel management emphasizes on economic rewards and traditional job design for better performances, while HRM emphasizes on the satisfaction of higher needs for motivating people, such as autonomous work groups, challenging jobs, creativity. 6. Personnel Management considers job satisfaction and higher moral as a cause of improved performance, while HRM works on the premise that better performance itself is a source of satisfaction and high morale.
Evolution of HRM The evolution to the current state of HRM has passed through several stages: Industrial Revolution Scientific Management Trade Unionism Human Relations Movement Human Resources Approach
HRM in changing environment The job of an HR manager is to balance the demands and expectations of the external groups with the internal needs and achieve the assigned tasks in an efficient ways. So the HRM practices in an organization are influenced by two broad categories of factors– Environmental factors and Organizational factors. I) Environmental factors:- Economic Environment Legal Environment Technological Environment Socio-cultural Environment
Economic Environment Population v/s workforce Workforce market conditions National Income Inflationary pressures Legal Environment Political Stability Technological Environment Reengineering work processes Flexible Manufacturing Systems Socio-Cultural Environment Slashing of jobs Trade Unions Work force diversity
Corporate level Strategy Business level Strategy Functional Level Strategy II) Organizational factors Organization’s Strategy Organizational Culture Organizational Financial Position High Performing Culture Low Performing Culture
III) International Perspective Globalization of industries has led to the considerations of following international factors. Cultural Diversity Individualism and Collectivism Power Orientation Uncertainty Avoidance Masculinity Time Orientation Workforce Diversity Parent-country national Host-country National Third-country National Language Diversity Economic Diversity
Role of HR Practitioner The HR department generally acts in an advisory capacity; it provides information, offer suggestions, counsels and assists all the line managers in the organization. Various roles:- Advisory Role The Conscience Role Counsellors Role Mediator’s Role Representative Role Clerical Role Fire-Fighting / Legal Role Welfare Role Problem solver Change agent Decision Maker Executive
HR Policies After the establishment of objectives of Human Resource Management, HR policies are to be formulated. Definition:- A policy is a plan of action. Brewster and Richbell defined “HR policies as a set of proposals and actions that act as a reference point for managers in their dealings with employees.” They constitute guides to action. They furnish the general standards or bases on which decisions are based. Their genesis lies in an organization’s values, philosophy, concepts and principles
Advantages of HR Policies Policies are useful instructional devices, that offer various advantages to HR working at various levels. Delegation Uniformity Better Control Standards of efficiency Confidence Speedy Decisions Coordinating Devices
Obstacles in Administrating HR Policies:- Managers are reluctant to follow guidelines as it curtails their freedom. Conflict between implied and expressed policy. Not easy to Communicate. Makes managers rigid.
Characteristics of sound HR Policy. While developing a HR Policy, management must pay attention to:- Relation of policies with objectives Easy to understand Precise Stable as well as flexible Based on facts Appropriate number Just, fair and equitable Reasonable Based on Reviews.
Coverage of HR Policies:- Equity Quality of Work Life b) Employment Practices c) Promotion Policies d) Development Policies e) Relations Policies a) Social responsibility
Sources of content for formulating policies Past experiences of the organization. Existing practices and experiences in other organizations Attitudes and philosophies of management Knowledge and experience gained by all line managers and personnel managers in handling personnel issues. Organizational policies.
Functions of HRM As HRM is the management of human resources in an organization and is concerned with the creation of harmonious working relationship among its participants and bringing about their utmost individual development. Functions of HRM Managerial functions Operative functions
Managerial Functions Management is a multi-purpose organ which has three jobs, two of which are directly related to personnel managing a business – “managing employees” and the “work” Planning Organising Directing Coordinating and Controlling
Operative Functions The operative functions of HRM are concerned with the activities specifically dealing with: The Procurement Function The Development Function The Compensating Function The Integration Function The Maintenance Function
HRM and Corporate Objectives HRM is being used to develop competitive advantage and, therefore, its role in strategic management has been well recognized. “Strategic management is the continuous process of relating the organization with its environment by suitable course of action involving strategy formulation and its implementation.” Strategy is course of action through which the organization relates itself with the environment so as to achieve its objectives.
Environmental opportunities and threats Activating strategy Structural implementation Behavioral implementation Functional implementation Choice of strategy Corporate mission and objectives Strategic Alternatives Strategy Implementation Corporate strengths and weaknesses Personal Values and aspirations of strategists Role of HRM Acquiring, Developing, Integrating, and Retaining right personnel Role of HRM in corporate strategic management process
Human Resource Planning “Human Resource Planning is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.” HRP is a process It involves determination of needs It also takes into account the manpower availability at a future period.
Importance of Human Resource Planning Reservoir of Talent Prepare People for Future Expand or Contract Cut Costs Succession Planning
Human Resource Planning Process Organizational Objectives, Plans and policies Forecasting needs for human resources Forecasting supply of human resources Human Resource Planning Identification of human resource gap Shortage of human resources Surplus human resources Actions plan for bridging gap
Steps in HRP 1 Organizational objectives, plans and policies 2. Human Resource Planning Forecasting the demand and supply of human Resources 3. Identification of Human Resource Gap 4. Action Plans
Techniques for Forecasting Human Resource Needs Managerial judgement Method Delphi Technique Work-Study Technique Ratio-Trend Analysis Statistical and Mathematical Models
Forecasting of Human Resource Supply Human Resource Flow Model Human Resource Inventory Skills Inventory Management Inventory
Barriers to effective Human resource Planning Improper Linkage between HRP and Corporate Strategy Inadequate Appreciation of HRP Rigidity in Attitudes Environmental Uncertainty Conflict between Long-term and short-term HRP Inappropriate HR Information System
Job Analysis Developing an Organization’s structure results in creating jobs which have to be staffed. Job:- A job may be defined as a “ Collection or aggregation of tasks, duties and responsibilities which as a whole, are regarded as a regular assignment to individual employees” Job Analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of the analysis are job descriptions and job specifications”
Uses of Job analysis Organizational Design Acquisition of personnel Human resource Development Job evaluation and compensation Performance Appraisal Safety and Health Employee counselling
Determination of uses of job analysis Strategic Choices in job analysis Information Collection Information Processing Job Description Job Specification JOB ANALYSIS PROCESS
Job Description A job description is an organized, factual statement of duties and responsibilities of a specific job. It is basically descriptive in nature. It provides both organizational information and functional information. 1. Job Identification 2. Job Summary 3. Job duties and responsibilities 4. Relation to other jobs 5. Supervision 6. Machine 7. Working Conditions 8. Hazards
Job Specification Job Specification is a statement of the minimum acceptable human qualities necessary to perform a job properly. It tells what kind of person to recruit and for what qualities that person should be tested. 1. Physical Characteristics 2. Psychological Characteristics 3. Responsibilities 4. Other features of demographic nature
Recruitment Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new employees are selected. ----- Werther and Davis Human Resource Planning Recruitment Selection Placement Job Analysis Linkage of recruitment to human resource Acquisition
Purpose and Importance of Recruitment Recruitment represents the first contact that a company makes with the personnel having potential to be employed. It determines the present and future human resource requirements in conjunction with human resource planning. It helps to increase the pool of potential personnel. It helps in increasing the success rate of the selection process. It reduces the rate of initial turnover rate. It helps in evaluating the effectiveness of various recruitment techniques It helps to meet the organization’s legal and social obligations regarding composition of its workforce.
Factors affecting recruitment Internal factors: vCompany’s pay package; vQuality of work life; vOrganizational culture; vCareer planning and growth; vCompany’s size; vCompany’s products and services; vGeographical spread of the company’s operations; vCompany’s growth rate; vRole of trade unions; vCost of recruitment; vCompany’s name and fame.
External factors: vSocio economic factors; vSupply and demand factors; vEmployment rate; vLabour market conditions; vPolitical, legal and governmental factors; vInformation systems.
Sources of Recruitment Sources are those where prospective employees are available like employment exchange while techniques are those, which stimulate the prospective employees to apply for jobs like nomination by employees, advertising, promotion etc. Internal sources Present Permanent employees Present temporary and casual employees Retrenched or retired employees Dependents of deceased, disabled, retired and present employees Promotions Transfers
External Sources External sources are those, which are outside the organizational pursuits. These include:- Campus recruitment Private Employment agencies Public Employment exchanges Professional Associations Data Banks Casual Applications Trade Unions Advertisements Employee Referrals
Selection Once the recruitment is through with, the management has to perform the function of selecting the right candidate at right time. This is done through selection procedure and it a customized one. It basically depends upon several factors Company’s Requirement Financial resources allocated for the same Company’s past records Company’s image in the market
Steps in selection procedure : - Development bases for selection Job Analysis Application Blanks Human Resource Plan Written Examination Recruitment Preliminary Interview Business Games Tests Final Interview Assess the fit between Medical Examination The job and the candidate Line Manager’s Decision Employment
Selection Procedure Job Analysis:- It is the basis for selecting the right candidate Job description Job specification Employee specification Recruitment:- It refers to the process of searching for prospective employees and stimulating them to apply for jobs in an organization. Application Blank:- It is a form through which the data is collected about the candidates and the initial screening is done. - Personal Background Information - Educational Attainments - Work experience - Salary - Personal Details - References
4. Written Examination:- The candidate qualified through the application blank is required to pass through the written test. - Quantitative knowledge - Aptitude reasoning - General knowledge - English language knowledge 5. Preliminary Interview:- This interview is to solicit necessary information from the prospective candidates and to assess the applicant’s suitability for the job. This is known as stand-up interview. At this level business games are also used as a tool for judging candidates suitability for the job, which mainly includes the techniques used to judge the situation handling and problem solving.
6. Group Discussions:- This technique is used in order to secure further information regarding the candidates suitability for the job. 7. Tests:- It is a most significant stage in the process of selection. These employment tests are an instrument designed to measure the nature and degree of one’s psychological potentialities, based on psychological factors, essential to perform a job. Types of tests Aptitude tests Achievement tests Situational tests Interest tests Personality tests
Preliminary Interview Core Interview Decision-Making Interview 8. Final Interview:- In this the interviewer matches the information obtained about the candidates through various means, to the job requirements and to the information obtained through his own observation. Types of interview