Concept of HRM

The

concept of HRM is concerned with acquisition of human resource, building their capabilities through training and development and motivating them to contribute their resources continuously for the successful functioning of the organization.

Meaning of Human Resources

According to Megginson- Human Resources

are the total knowledge ,skills ,creative abilities ,talents and aptitude of an organizations workforce ,as well as the attitudes beliefs of the individuals involved.

Definition of HRM
Human Resource Management(HRM) can be

defined as managing the functions of employing , developing and compensating human resources resulting in the creation and development of human relations with a view to contribute proportionately to the organizational ,individual and social goals.

Difference b/w PM and HRM

Personnel Management HRM
Wider in scope and Routine function of

recruitment ,selection and salary admin. Employees are treated as resources meant for work Investment in employees is treated as a burden Employees are evaluated by the worth of salary Succession based on seniority

involves in strategic issues apart from operative and routine jobs Employees are treated as skilled and intellectual capital who enhance profitability. Employees are evaluated on their performance and potential.

Nature & Characteristics of HRM

HRM includes both individuals and teams. Concerned with the development of the knowledge ,skills

,capabilities ,etc. of human resources. HRM covers all levels & categories of employees belonging to the top ,middle and bottom line cadre . It also includes skilled ,unskilled ,technical ,managerial ,clerical and professional category of employees. It includes employees of all types of organizations likeindustry ,trade , commerce ,etc. It is a continuous process. It aims at attaining the Individual goals like-job security , job satisfaction ,high salary ,attractive fringe benefits ,challenging work , pride , status , recognition , opportunity for development ,etc.

Nature & Characteristics of HRM(Cont.)

Pervasive in nature Result-orientation rather than rule-orientation. HRM is the responsibility of the line managers and function

of the staff managers.

It is concerned with managing human resources at work HRM is a subsystem of the organization and permeates into

all functional departments like marketing ,finance , etc.

It tries to secure co-operation of employees in order to

attain the predetermined goals .

Objectives of HRM
To establish and maintain sound organizational structure

and desirable relationships among all the members of the organization.

Integrating individual and group goals with those of

organizational goals.
To create facilities and opportunities for the development of

individuals and groups within the organization in order to increase organizational effectiveness.
Effective utilization of human resources to achieve

organizational goals.
To identify and satisfy individual and group needs by

Scope of HRM
The scope of HRM includes the followingObjectives of HRM Organization of HRM Strategic HRM Employment Development Compensation management Maintenance Motivation Industrial Relations Participative Management and Current developments in HRM

Functions of HRM
Managerial Functions
Planning Organizing Directing Controlling

Operative functions
Employment HR Development Compensation Human Relations Industrial Relations QWL TQHRM HR accounting ,audit & R&D Managing recent techniques of HRM

Managerial Functions of HRM

Planning
Planning is pre-determined course of action. HR planning involves planning of human resource requirements , selection ,training , etc . Organizing involves establishing an organization structure and process by which a co-operative group of human beings allocate tasks among its members and identifies relationships and integrates their activities towards common objectives Directing involves securing co-operation of the employees through motivation ,commanding ,leading and activating people. Controlling involves checking ,verifying and comparing actuals with that of the plans ,identifying deviations and correcting them.

Organizing

Directing

Controlling

Operative functions
1.Employment
Job analysis involves collection of data

Job Analysis

Human Resource

Planning(HRP)

Recruitment

related to jobs ,job description , job specification and providing guides and plans for HRP. HRP ensures required supply of labour from time to time to perform jobs by forecasting the future HR requirements based on current inventory of HR ,& determines measures to strengthen the existing human resource in order to meet the future HR requirements of the organization. Recruitment is a process of searching for prospective employees and stimulating them to apply for jobs in the organization.

Operative FunctionsEmployment(cont d.)

Selection
Selection is the process of ascertaining the

qualifications , experiences , skills , knowledge of an applicant to appraise his or her suitability to job . It includes the following-

Placement

Framing and developing application blanks. Devising Testing techniques Devising Interview techniques Checking for references Setting up Medical Examination policy and procedure Line managers decision Sending appointment or rejection letters Employing selected candidates.

Induction and

Placement is a process matching the employee specifications with job requirements . Induction and orientation includes rehabilitating the employee in the changed surrounding and introducing him to the practices , policies , Purposes ,People , etc. of the organization.

Orientation

Operative functions
2. Human Resource
Development (HRD)
Performance
PA is evaluation of individuals on their job by

Appraisal(PA)
Training Management

Development
Career Planning and

Development
Internal Mobility

developing policies, procedures and techniques. Training is a process of imparting technical and operational skills and knowledge to the employees. MD is a process of developing the managerial and human relations skill of the employees. Career planning is done by means of educating ,training , job search and acquisition of work experience internal and external mobility. Internal mobility includes vertical and horizontal movement of employees within an organization through promotions, transfers , demotion,,etc.

Operative functions 2 . HRD (Contd)

Transfer is a process of placing employees

Transfer Promotion Demotion Change and

Organization Development

in same level of jobs to use their potentialities effectively. Promotion is reassignment of employees with higher position ,better status and enhanced salary. Demotion is reassignment of employees with lower level jobs and reduced salary Change and development is a planned process to bring about some modifications in the structure or functioning in the organization and developing employees to adopt to those changes.

Operative Functions- 3. Compensation Management

Job Evaluation Wage and Salary Incentives Bonus Fringe Benefits Social security
Job evaluation is determining the worth of jobs

under various categories.

Measures(SSM)

Wage and salary administration is a process of developing and operating a suitable wage and salary programme by conducting survey ,considering various factors and evaluating effectiveness. Incentives are the financial benefits given in addition to salary and wages. Bonus is a statutory payment given according to the Payment of Bonus Act of 1965. Fringe benefits include-Housing , disablement, educational facilities to workers 'children , canteen , recreational ,conveyance , credit ,medical and other facilities and benefits. , SSM includes maternity benefits , sickness benefits ,disablement benefits , dependent benefits , retirement benefits , Workmens compensation for those who meet with accidents at workplace.

Operative Functions- 4. Human Relations

Human Relations includes the following Understanding intra personal and inter personal behaviour of

employees.
Motivating Developing communication and Leader ship skills Grievance Procedure Disciplinary Procedure Counselling Quality of Work Life (QWL) Good Working Conditions

Operative Functions- 5 . Industrial Relations

Industrial Relations includes the following Indian Labour Market Trade Unionism Collective Bargaining Grievance Handling Industrial Disputes Workers Participation in Management and Quality Circles

Operative Functions 6. Recent Trends in HRM

Quality of Work Life QWL refers to the favourableness or

(QWL)
Total Quality in Human

Resources
HR accounting, Audit

and Research and

Recent techniques in

HRM

unfavourableness of working conditions to the workers based on several indices. TQM of HR refers to training the employees to work with excellence . HR accounting and auditing refers to assigning, budgeting, and reporting the cost of human resources incurred in an organization including wages and salaries and training expenses. Current trends in HRM include- application of Six sigma concept , retention of star performers, out sourcing, team design and team analysis, etc.

Significance of HRM

To align employees towards organizational objectives/strategies. To improve organizational effectiveness & efficiency To increase productivity and profitability To manage career planning and development To manage organizational change To administer effective market oriented compensation and benefits to employees To develop organizations core competencies For effective Performance management For leading effective change management To design Training and Developmental programmes To devise suitable retention strategies To plan for man power requirements To promote harmonious industrial and human relations within the organizations
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Perspectives/dimensions of HR
HR values the attitudes and emotions of human beings Organizations view human beings as economic ,social ,physiological , psychological and ethical beings. HRM attributes the behaviour of individuals to their personality traits like extraversion , agreeableness ,conscientiousness , emotional stability & openness to experience & hence uses knowledge of OB to choose right candidates for right jobs. HRM increases employment opportunities ,facilitates better compensation and benefits to employees ,eliminates waste and improper use of HR and maximizes efficient utilization of HR. HRM is professionally significant since it provides healthy work environment, improves QWL of employees, promotes cordial relations between employees and management. HRM is a Central system which has under it various subsystems like recruitment, development, compensation , social security measures , industrial relations ,etc.

Linking Corporate Strategies and Policies With HRM

Companies strategies should be formulated by considering the Human

Resources.
Strategy is a unified course of action to achieve the basic objectives of the

enterprise.
Strategic Management process involves a series of steps like external and

internal environmental analysis, formulation of strategies based on the environmental scanning.

Basic steps of the strategic management processVision, Mission and objectives of the company External environmental scanning Internal environmental analysis Revise organizational direction through SWOT Formulation of alternative strategies Selecting best strategy Strategy implementation Strategy evaluation and control

Two classical models of HRM

Hard and soft variants of HRM, respectively.
Hard variant: Employees one of the key resources

of organizations - should be used effectively in order to achieve organizational goals.

Soft variant: Employees first and foremost human

beings who contribute to the organization

1.The Harvard Model

1.

THE HARVARD MODEL: HRM is based on central philosophy and strategic vision HRM involves all management decisions and actions that affect the nature of the relationships between the organisation and its employees.

People are considered as potential assets rather than variable costs.

The Harvard Model of Human Resource Management

2. Guests Model of HRM

According to this model HR manager has

specific strategies which demand certain practices and when executed will result in outcomes in the form of behavioral ,individual performance related and organizational outcomes.

Guests Model of HRM

HRM Practic es
Hiring Training Appraisal Compensatio n Relations

HRM Strategi es

HR Outcom es
Commitmen t Quality Flexibility

Behavioral Outcomes
Motivation Co-operation Organizationa l citizenship

Performan ce Outcomes Positive Productivity Innovation Quality Negative Low Productivity Absenteeis m Turnover

Financial Outcome s

3 .The Fombrun ,Tichy and Devanna Model of HRM

This is the first model and explains that the

contributions of four components of HR namely-selection ,HRD, appraisal and rewards leads to organizational effectiveness.

The Fombrun ,Tichy and Devanna Model of HRM

Selection

Organizational effectiveness

4. Warwick Model
This model was developed by two researchers Henry and Pettigrew of university of Warwick. This model centers around five elements Inner context(firm specific or micro forces) Business Strategy content HRM context HRM Content Outer context(macro environment forces)

The Warwick model of HRM

Outer Context Socio-Economic Technical Competitive Politico-Legal Inner Context Culture
Structure Politics/Leadership Task Technology Business output

Business Strategy Content

Objectives Product Market Strategy & tactics

HRM Context Role Definition Organization HR Outputs

HRM Content
HR Flows Work systems Reward Systems Employee relations