HRM in Context

1. HRM in Context Session 1

2. Concept of HRM • Management is the process of efficiently completing activities with and through other people • Primary functions of management are: • Planning (establishing goals) • Organizing (determining activities) • Leading (motivating subordinates) • Staffing (determining people needed for the organization) • Controlling (setting standards, monitoring activities)

3. Planning Controlling Organizing Staffing Leading The Management Process

4. Our Focus (HRM: We the People) • Staffing, Personnel management or the HRM function • Managing people is an important aspect of managing an organization • Organizational effectiveness depends largely on the performance of people in an organization • People constitute an organization's most vital factor in its success or failure • It is by "men" that the other "m's" are acquired and utilized - money, machines, materials, methods and markets • An organization may start with zero funding but will become financially viable with creativity, resourcefulness, hardworking and honest people • Products and services can be copied by every organization within six months. But, human resources cannot be copied, they are like snowflakes.

5. What is HRM? • People become HR when they combine energy and physical strength with competencies (knowledge, skills, attitudes, potential for growth) • HR are people who are ready, willing and able to contribute to organizational objectives • HR of an organization include all employees engaged in various jobs at different levels • HRM can be seen as an interaction between the human beings and the organization

6. On the one hand, • One has to put the right person on the job: well educated, qualified, well selected & trained • On the other, • you have to create an organization with possibilities for people to develop themselves

7. Defining HRM • The policies and practices involved in carrying out the "people" or human resource aspects of a management position, including recruiting, screening, training, rewarding, and appraising. (Dessler)

8. Defining HRM • “Human Resource Management is concerned with the “people” dimension in management. • Since every organization is made up of people, • acquiring their services, • developing their skills, • motivating them to high levels of performance, and • ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives.” • (Decenzo and Robbins)

9. An Art or A Science? • HRM is the art & science • of acquiring, motivating, maintaining & developing people in their jobs • in the light of their personal, professional & technical knowledge, skills, potentialities, need & values • for the maximum achievement of individual, organization & society's goals.

10. An Art? • Being highly individual process eliciting human behavioural skills • A Science? • It draws from the theories & principles of management & other disciplines A proper mixture of both makes HRM efficient & effective

11. Evolution of HRM • Early Scientific Management Era (beginning of the 18th century) • Industrial Revolution of 1850s • Scientific Management in the late 1800s & early 1900s • Human Relations Movement (1930s to 1950s) • The HRM Era • Behavioral Science Movement (1960s) • The New HRM Era

12. Early Scientific Management Era • (beginning of the 18th century) • Formation of guilds (A guild is an association of craftsmen in a particular trade.) • Forerunners of the modern trade unions • (later part of the 18th century) • “Welfare officers” in the UK business houses • Schemes of unemployment benefits, sick pay • Edward Cadbury and Joseph Rowntree

13. Industrial Revolution of 1850s • Labor a commodity to be bought & sold • Human work substituted by machine power • Mass production • Workers treated as commodities, thus exploitation • Used and abused workers • Widening gap between workers & owners • Alleviation in their pitiable condition • Advent of collective bargaining between labor & management • Laid the foundations of the present HRM concepts

14. Scientific Management (Late 1800s & early 1900s) • Frederick Winslow Taylor • Logic of efficiency to management • Principles of precision (Time & motion study) • Tasks were systematically broken down • Emergence of personnel management (One best method; Specialization; Worker development; Incentive system; Management-Labour harmony) • Laid the foundations of the present HRM concepts

15. Classical Organization Theory (1916) • Henry Fayol • Basic concepts to guide the design, creation & maintenance of large organizations • Identified the basic functions of managing organizations • Management a process • Managerial activities: planning, organizing, commanding, coordinating &controlling

16. Human Relations Movement (1930s to 1950s) • Chester Barnard • Concept of organization as human cooperative systems rather than as mechanical contraception • Cohesive leadership is necessary • Advocated on good communication, participative management, team work, social setting, group dynamics, non-financial rewards etc.

17. Hawthorne Studies (1927 - 1932) • Elton Mayo & Fritz Roethlisberger: General Electric’s Hawthrone plant • Changes in the physical environment could not completely explain changes in productivity • Importance of social factors (morale, interpersonal relationships) • Cooperation & teamwork

18. The HRM Era • End of WW I – personnel management was recognized to fight labor shortage problems • 1920s – Personnel management began being taught at the university level (US) • Between the WWI & Great Depression estd. of personnel depts. • Labor exploitation (1930 – 50s) resulted in labor relations movement, unions, collective bargaining (1935 -60s) • Until the 1960s, the personnel function was considered to be concerned only with the blue-collar employees

19. Management by Objectives (MBO) 1954 • Peter F. Drucker • Objectives must be set in all areas where performance affects the health of the enterprises • Theory X and Theory Y • Douglas McGregor • Theory X: employees dislike work • Theory Y: work is a natural act for employees

20. Behavioral Science Movement (1960s) • Maslow’s hierarchy of needs • Frederick Herzberz’s two factor theory

21. The New HRM Era • Emergence of the new HRM theory & practice (1980s) • Challenges of globalization, technological advances, changing customer etc.

22. Nature/Characteristics of HRM • Human focus/related to "people" • Management function • application of management principles & functions • involves planning, implementing & • controlling of acquisition, development, utilization & • maintenance of human resources • Pervasive • concerned with all levels of HR • discharged by all levels of managers

23. Continuous commitment of people • not one time activity • high level of motivation • sense of ownership • "psychological contact-challenges & commitment" • Dynamic/responsive to environmental changes • action-oriented • e.g. performance based reward, union recognition • System • consists of interrelated acquisition, development, utilization & maintenance subsystems • utilizes the potential of the workforce to improve their productive contribution

24. Mutuality oriented • promotes "HRM think" organization-wide • mutual influence, mutual respect, mutual rewards, mutual responsibilities • Closely linked to corporate or business strategy • links HR functions to the broader, longer-term needs of firms • Recognition of the common interests and needs • matching interests of individuals & organization • to achieve career-oriented & organizational goals

25. Recognizes employees as important assets or human capital • investment of huge amount of money in the development of working people • "learning organization" • Includes both lines and staff managers • line authorities are authorized to direct the work of subordinates • staff managers are authorized to assist and advise line managers in accomplishing these basic goals • HR managers are staff managers

26. Objectives of HRM • Employs the skills & abilities of the workforce • Provides well-trained and well-motivated employees • Increases Employees’ job satisfaction and self-actualization • Communicates HRM Policies to all employees • Shoots-up productivity • Achieves Quality of Work Life • Increases employee commitment • Manages organizational culture • Supports employee creativity • Manages change • Maintains ethical policies and socially responsible behaviour • Goal Achievement

27. ObjectiveEmploys the skills & abilities of the workforce • Makes people’s strengths productive • Benefits customers, stockholders and employees

28. ObjectiveProvides well-trained and well-motivated employees • Building & protecting the most valuable asset of the enterprise

29. ObjectiveIncreases Employees’ job satisfaction and self-actualization • Employees must feel that the job is right for their abilities • Job is a major source of personal identity

30. ObjectiveCommunicates HRM Policies to all employees • Everyone in the firm has to be HRM-knowledgeable • Communicating managerial decisions to relevant public in their own language • Representing the organization to the outside: trade union, government etc.

31. ObjectiveShoots-up productivity • Depends upon how effectively it uses its human resources • Continuously develops employees • Invite HR dept. to participate in formulating business strategy • Allows HR staffs to initiate programmes • Allow HR staffs to communicate with line managers etc.

32. ObjectiveAchieves Quality of Work Life • Refers to employee's perception of their physical & psychological well-being at work • Improves quality of relationships between employees • Giving adequate opportunity for participation • Meaningful, challenging, interesting responsibilities • Freedom & autonomy to make decisions on the job • Satisfactory physical surroundings • Job safety etc.

33. ObjectiveIncreases employee commitment • Interest in mental & physical involvement in achieving organizational objectives • Motivation of people for commitment • Adopt desirable HR practices & measures

34. ObjectiveManages organizational culture • Guides behavior of people working in organization • Develops different work rules & guidelines • HRM policies & practices can be implemented only where people are valued

35. ObjectiveSupports employee creativity • Effective management mechanisms like teamwork, MBO, TQM etc.

36. ObjectiveManages change • Workforce must rapidly shift & adjust to new technologies, skills etc. • Trains workforce to adjust in a frequently changing environment

37. ObjectiveMaintains ethical policies and socially responsible behaviour • Any activity engaged by the HRM will be fair, truthful, honourable • People will not be discriminated against

38. ObjectiveGoal Achievement • Helps achieve the following goals: • Personal goals (career advancement, compensation, development etc.) • Functional goals (departmental goals) • Organizational goals (profit, survival, growth etc.) • Societal goals (social responsibility, employment opportunities etc.)

39. Functions / Areas of HRM • Job Analysis • Human Resource Planning • Recruitment and Selection • Training and Development • Performance Appraisal • Compensation and Benefits • Health and Safety • Employee Relations

40. Functions: Job Analysis • Most basic function • Collection of job related information to prepare job description & job specification • Job description (detail information about what a person has to be doing in the specific job) • Job specification (qualification, training, work experience & other personnel requirements to perform a particular job) • Formulates HR planning, recruitment & selection

41. Function: Human Resource Planning • Involves estimation of demand & supply of HR • To fulfil current & future HR requirements of the organization

42. Function: Recruitment and Selection • Recruitment(process of making pool of qualified candidates) • Recruitment (Begins from invitation of application, end with development of list of qualified candidates) • Selection(Required number of employees are selected by the organization) • Selection (Process of reviewing application, interview, tests & informing candidates) • Information from job analysis & HR planning is used for selecting right candidates & rejecting wrong candidates

43. Function: Training and Development • Required to develop skill, ability & motivation of employees • HR dept. assess training needs, types of training & development activities • On-the-job training provides using organizational premises & facilities • Off-the-job training provides outside organizational premises

44. Function: Performance Appraisal • Process of evaluating employees' performance related strengths & weaknesses • Assess how well employees are doing in their jobs • Provides techniques of assessing the performance of employees against agreed targets • Result of evaluation used to determine training needs • Result of evaluation used to provide promotion & other forms of rewards for employees

45. Function: Compensation and Benefits • Compensation rewards people through pay, incentives & benefits against the work done • Benefits reward people with additional compensation • Benefits are indirect forms of compensation (e.g. health care) • Great source of motivating employees at work

46. Function: Health and Safety • Taking care of employees' health & safety • Employees should be made aware of hazardous situations

47. Function: Employee Relations • HR dept. develops mechanisms for developing understanding on different HR related issues between management & employees • Develop mechanism to solve conflict & work related issues at shop floor • E.g. handling grievances, labor-management meetings, and settlement of disputes etc.

48. Personnel Management Versus HRM • HRM has evolved from Personnel Management • But, Personnel Management is not HRM • HRM emerged in 1970s • In 1989, • the American Society for Personnel Administration (ASPA) voted to change its name to • the Society for Human Resource Management (SHRM)

49. Personnel Management Versus HRM

50. Personnel Management Versus HRM