Human Resource Management

Vineeth K

 HRM is basically a search for best practices to generate high levels of employee commitment and performance. Storey has identified two broadly contrasting pictures of HRM
Emphasis on people as costs and resources to be worked to secure maximum efficiency. It is called the Rational or economic view of employment where the basic approach is Control and compliance Emphasis on people as resources to be invested in to generate high commitment and involvement. This is the Social or psychological view of employment and it emphasises on commitment of the people working together as an organisation - Hard and Soft. (Michigan and Harvard Models)

What is HRM?
Human resource management (HRM) is the strategic and coherent approach to the management of an organization's most valued assets - the people working there who individually and collectively contribute to the achievement of the objectives of the business. The terms "human resource management" and "human resources" (HR) have largely replaced the term "personnel management" as a description of the processes involved in managing people in organizations. In simple words, HRM means employing people, developing their capacities, utilizing, maintaining and compensating their services in tune with the job and organizational requirement. In other words, HRM is concerned with getting better results with the collaboration of people. It is an integral but distinctive part of management, concerned with people at work and their relationships within the enterprise. HRM helps in attaining maximum individual development, desirable working relationship between employees and employers, employees and employees, and effective modeling of human resources as contrasted with physical resources. It is the recruitment, selection, development, utilization, compensation and motivation of human resources by the organization.

 A Textbook Definition Bratton and Gold define HRM as: a strategic approach to managing employment relations which emphasizes that leveraging people s capabilities is critical to achieving sustained competitive advantage, this being achieved through a distinctive set of integrated employment policies, programs and practices .

 From this definition, we can easily deduce certain key words which can give us an idea of what the features of HRM are. They are: Strategic i.e. planned, deliberate, seeking to achieve set objectives Capabilities i.e. people or resources with potential (knowledge, skills, attitudes) which can be developed to contribute to organizational success. Competitive advantage by tapping into and developing these capabilities organizations give themselves an edge over their rivals Integrated that the range of things under HRM (recruitment, selection of employees, their training and development, how they are rewarded) is looked at together not as separate things.

Difference between HRM and PM:

Dimension Contracts Rules Guide to management action Managerial Task Behavioral Referent Key Relations Speed of decision Managerial Role Key managers Communication Selection PM Careful delineation of written contracts Clear Rules Procedures Monitoring Norms/ Customs/Practices Labor management Slow Transaction Leadership Personnel/IR Specialist Indirect Separate Managerial task HRM Aimed to go beyond the contract Impatient with the rules Business Need Nurturing Values / missions Customer Fast Transformational Leader ship General/Business Line managers Direct Integrated key task

Dimension Pay Labor management Job categories & grades Job design Treatment of people by management

PM Job evaluation Collective bargaining Contract Many Division of labor People are to be used for the benefit of organization and treated as a tool which is expandable and replaceable

HRM Performance related Towards individual contract Few Team work People are to be used as mutually beneficial for organization and themselves and for the society as a whole Mutuality of interest

Aim of Top Management

Interest to organization

Importance of human factor

The overwhelming importance of human factor among all the other factors of production is due to its unique characteristics. 1)It is the only resource which can produce through motivated creativity an output greater then the sum of its input. 2)This resource is active and living and the human being alone with their ability to think, feel, and conceive and growth shows satisfaction or dissatisfaction, resentment or pleasure, resistance or acceptance for all types of managerial actions

3) A manager can buy an employee s time, its physical

presence at a given place but cannot buy his enthusiasm, initiative, loyalty and devotion and there is no cook book formula to guide a manager how to motivate his worker. 4) Each individual have their own distinct background and therefore all individuals in an organization cannot be treated alike and the manager must follow Tailor made approach in motivating employee based on his understanding of the actions and attitudes and the needs of the workers concerned. 5) This is the only resource which appreciate the value with passage of time because people become more experienced and skilled while the other resource generally depreciate as time goes on.

Stages of Evolution
Industrial Revolution Labor Movements Human Relations Behavioral Sciences Human Resource! People Management

Evolution of HRM in India

Period 1920 -1930 1940 1960 1970 1980 Development Status Beginning Struggling to recognition Achieving Sophistication Emphasis Statutory Welfare and Paternalism Introduction of Technology Regulatory and imposition of standardization of other functions Human Values and Productivity through people One to One People Management Official Designation Clerical Administration Managerial

1990 -2000

Promising

Executive

After 2000

Challenging

Leader Facilitations

Human Resource Management: Nature

Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. The various features of HRM include: Its focus is on results rather than on rules. It tries to help employees develop their potential fully. It encourages employees to give their best to the organization. It is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. It helps an organization meet its goals in the future by providing for competent and well-motivated employees. It tries to build and maintain cordial relations between people working at various levels in the organization. It is a multidisciplinary activity, utilizing knowledge and inputs drawn from psychology, economics, etc.

Human Resource Management: Scope

The scope of HRM is very wide: 1. Personnel aspect-This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion, training and development, layoff and retrenchment, remuneration, incentives, productivity etc. 2. Welfare aspect-It deals with working conditions and amenities such as canteens, crches, rest and lunch rooms, housing, transport, medical assistance, education, health and safety, recreation facilities, etc. 3. Industrial relations aspect-This covers union-management relations, joint consultation, collective bargaining, grievance and disciplinary procedures, settlement of disputes, etc.

Human Resource Management: Beliefs

Human resource is the most important asset in the organization and can be developed and increased to an unlimited extent. A healthy climate with values of openness, enthusiasm, trust, mutuality and collaboration is essential for developing human resource. HRM can be planned and monitored in ways that are beneficial both to the individuals and the organization. Employees feel committed to their work and the organization, if the organization perpetuates a feeling of belongingness. Employees feel highly motivated if the organization provides for satisfaction of their basic and higher level needs. Employee commitment is increased with the opportunity to discover and use one's capabilities and potential in one's work. It is every manager's responsibility to ensure the development and utilization of the capabilities of subordinates.

Objectives of HRM in General:

To help the organization reach its goals. To ensure effective utilization and maximum development of human resources. To ensure respect for human beings. To identify and satisfy the needs of individuals. To ensure reconciliation of individual goals with those of the organization. To achieve and maintain high morale among employees. To provide the organization with well-trained and well-motivated employees. To increase to the fullest the employee's job satisfaction and selfactualization. To develop and maintain a quality of work life. To be ethically and socially responsive to the needs of society. To develop overall personality of each employee in its multidimensional aspect. To enhance employee's capabilities to perform the present job. To equip the employees with precision and clarity in transaction of business. To inculcate the sense of team spirit, team work and inter-team collaboration.

Social Objectives: Creation of employment opportunities Maximum productivity Affording material and mental satisfaction to the workforce Avoidance of wastage of effort Promotion of healthy human relations and social welfare Personal Objectives: Provision for adequate remuneration Job security Training and development Job satisfaction Opportunities for development Proper work environment Enterprise Objectives: Recruitment Integration and maintenance of competent and loyal employee Forecasting and balancing demand and supply of labor Placement

Union Objectives:
Recognition of unions Formulation of HR policies in consultation with the unions Inculcating the spirit of self discipline and co-operation

Process of HRM:
1)Acquisition Function:
1.Estimating the demand and supply 2.Recruitment 3.Selection 4.Socialization of employees

2)Development Function:
1.Employee Training: Skill developments Change of attitudes among employees 2.Managerial Development: Knowledge acquisition Enhancement of an executives conceptual skills

3)Motivational Functions: Alienation Performance Appraisal Behavioral and Structural Techniques for stimulating employee performance Linking rewards to performance Compensation and benefit administration 4)Maintenance Functions: Working conditions and working environment Maintenance of commitment among employees towards the organization

Functions of HR managers:
1.Managerial functions: a.Planning
Human resource Requirement/Recruitment Selection Training HR needs Changing Values Attitudes Behavior of employees

b.Forecasting:

c. Directing:
Motivating Communicating Leading Activating People Checking Verifying Compare the actual with the plans Identification of deviation Connecting the identified deviation

d. Controlling:

2.Operative functions:
a.Employment:
1.Job Analysis: Collection of data, information and facts Preparation of Job Description Job Specification Job Requirements Employee Specification Providing the guidance plans and basis for job design 2.HR Planning: Estimation of the present and future requirements of HR Calculation of net HR requirements Taking steps to change, mould and develop the strength of the existing employees Preparation of action programs to get the rest of the HR from outside sources

3.Recruitment:
Identification of the existing sources of applicants Creation / Identification of new sources of applicants Stimulating the candidates to apply for the jobs Striking a balance between the internal and external sources Framing and developing application forms Creating and developing valid and reliable testing techniques Formulating the interview techniques Checking of references Setting up of the medical examination policy and procedure Getting the line managers decisions Sending letters for appointment / rejection Employing the selected candidates who report for duty

4.Selection:

6.Placement: Consulting the functional managers regarding placement Conducting follow up studies Appraising employee performance Determine employee adjustment Correcting misplacements if any 7.Induction and Orientation: Acquaint the employee with the company policies Introduce the employee to the boss, subordinates and peer groups Mould the employee attitude to the new working and social environment

b.Human Resource Development:

1.Performance Appraisal: Developing policies, Procedures and techniques Helping the functional managers Receiving and consolidating the PA reports Evaluating the effectiveness of PA System

2.Training:
Identification of training needs Developing suitable training programs Helping and advising the line management in the conduct of training programs Imparting the requisite job skills and knowledge to the employees Evaluating the effectiveness of the training program Identification of the areas of the managerial development Conducting development programs Motivating the executives Design the special development programs for promotion Using the service of the specialist for managerial development Evaluating the effectiveness

3.Managerial Development:

4.Career planning and development:

Internal Mobility Transfer Promotion Demotion Organization Development

c.Compensation:
Job Evaluation: Wage and salary administration Incentives Bonus Fringe Benefits Social Security Measures Motivating the employees Improving employee morale Developing common skills

d.Human Relations:

Developing leadership skills Redressing employee grievances Handling disciplinary areas Counseling employees Improving the quality of worklife

e.Effectiveness of HRM
Organizational Health: Employee satisfaction Labor turnover Absenteeism Higher rate of employee commitment

Why HRM?
Source of competitive advantage Managing people for competitive advantage
Employment security Selective hiring Self-managed teams, decentralized decision-making Relatively high compensation --contingent on performance Extensive training Reduced status differentials Information sharing

Human Resources and Competitive Advantage

The basic idea: establishing and maintaining competitive advantage through people. Competitive advantage: Valuable, rare, inimitable, nonsubstitutable Achieved not through strategy, but strategy implementation

Competitive Advantage Through People

Viewing the work force as an asset, not an expense The result: Harder work, from increased involvement and commitment Smarter work, through enhanced skills and competence Lower overhead, by pushing responsibility downward High performance work systems