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Name Registration Number Learning Center Name || || || MANISH PATIL 511125882 Halo Technologies - Kalyan

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Human Resource Management



1 10th June11

Date of Submission at Learning Center


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Directorate of Distance Learning Sikkim Manipal University II Floor, Syndicate Building Manipal 576 104

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Halo Technologies and Training Pvt. Ltd. || 65260303 || 9870050750 || academics@halo.co.in


Q.1 Write down the difference between Personnel management and Human Resource management. [10 Marks] A. Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It is a significant part of management concerned with employees at work and with their relationship within the organization. Personnel management is the planning, organizing, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and societal goals. Personnel Management is that part which is primarily concerned with human resource of organization. Nature of Personnel Management 1. Personnel management includes the function of employment, development and compensationThese functions are performed primarily by the personnel management in consultation with other departments. 2. Personnel management is an extension to general management. It is concerned with promoting and stimulating competent work force to make their fullest contribution to the concern. 3. Personnel management exists to advice and assists the line managers in personnel matters. Therefore, personnel department is a staff department of an organization. 4. Personnel management lays emphasize on action rather than making lengthy schedules, plans, and work methods. The problems and grievances of people at work can be solved more effectively through rationale personnel policies. 5. It is based on human orientation. It tries to help the workers to develop their potential fully to the concern. 6. It also motivates the employees through its effective incentive plans so that the employees provide fullest co-operation. 7. Personnel management deals with human resources of a concern. In context to human resources, it manages both individual as well as blue- collar worker. HRM Human resource management (HRM, HR) is the management of an organization's employees. This includes employment and arbitration in accord with the law, and with a company's directives. Features of HRM

Organizational management Personnel administration Manpower management 2|Page

Industrial management

But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms, although these normally refer to the relationship between management and workers and the behavior of workers in companies. The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets. Human Resource Management (HRM) is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organizations. Personnel Management versus Human Resource Management The view that there are more similarities than differences between personnel and HR management is shared by a number of authors. Legge, for instance, is tempted to say that there are not a lot differences between the two approaches, but nevertheless manages to detect some diverging aspects. These however cannot be qualified as substantial differences, but are rather a matter of emphasis and meaning. Torrington regards personnel management as a continuing process of evolution and growth, in which more and more fields of expertise are acquired and assimilated. Within this evolutionary process HRM is only adding a further dimension to a multi-faceted role, and is not at all a revolutionary concept. However, the effect of HRM should not be underestimated. Armstrong maintains that although the procedures and techniques strongly resemble those of personnel management, the strategic and philosophical context of HRM makes them appear more purposeful, relevant, and consequently, more effective. On the other side, authors like Storey regard HRM as a radically different philosophy and approach to the management of people at work. In this view, HRM provides a completely new form of managing personnel and can therefore be regarded as a departure from orthodoxy of traditional personnel management. As the concept of HRM is not homogeneous but comprises different theoretical and philosophical approaches, the two main versions of HRM, namely the soft and the hard model, will be sketched in the following


Soft and Hard Models of HRM Personnel management caught in ambiguity as it is torn by managing the tension between organizational demands and needs of employees. The clear strategic orientation of HRM provides an escape route from ambiguity, because it has sharply refocused the attention on the organizational loyalties of the personnel function. Thus, its full organizational legitimacy may be regained. 1. Personnel management deals with employees, their payroll and employment laws. On the other hand, Human Resources Management deals with the management of the work force, and contributes to an organizations success. 2. HRM basically deals with developing personnel management skills. It is Human Resources Management that develops a team of employees for an organization. 3. While Personnel management is considered to be reactive, Human Resources Management is stated to be proactive. 4. Personnel management focuses on administrating people or employees. On the other hand, the prime focus of Human Resources Development is to build a dynamic culture. 5. Personnel management is independent from an organization. On the contrary, Human Resources Management forms an integral part of a company or an organization.

Q.2 Write a note on scope of HR in India. [10 Marks] A. Contrary to these forces, in India the owner manager/government/public sector manager was an industry icon and a national hero of sorts. The Personnel Management practices were dominant of the brick-and-motor industry. Though the approach was largely welfare oriented and reactive in nature it served effectively for the large PSU organizations that built the countrys foundation. Its only in the past 10-12 years with the immense growth on account of the IT industry that winds of change began to blow. It was largely the advent of the Information Technology era in India that brought with it the western management practices. MNCs (multinational companies) started up their operations in India. The FDI (foreign direct investment) went up steeply as the world saw the potential in the countrys human resources. India became a preferred location for MNCs primarily from the USA, followed by other developed countries. This gave birth to a new generation of management as well as HRM practices. New hiring methods, new ways of paying salaries, new employment terms and most importantly increased focus on individual performance and outcomes. There was emphasis on deliverables and linking individual and team performance to business results and success. Given the highly educated workforce there was a deemphasis in the role of the trade unions. The era of the trade union dominance gave way to the new order of individual negotiated salaries and terms and clearly performance linked assessment systems. 4|Page

Another transformation that the Indian workplace witnessed was the focus on ethics and ethical practices in doing business. It was only fair to expect that with the weak legal system, it needed the support of the government policies and the corporate policies to beat the corruption that existed. This has significantly contributed to India emerging as a preferred destination for doing business. All of this has yielded to give way to the birth of the professional manager Professional managers today are a critical and essential part of the Indian corporate. The professional manager brought about a shift in the culture from a highly authoritarian approach of getting work done, to a more collaborative and participative approach. The entrepreneurs who earlier operated in a secure, sheltered market and hardly face challenges, were challenged by the globalization that swept in with the liberalization policies and measure brought in by the Indian government late 1995 and onwards. Despite the challenges, the Indian employee and his manager evolved. Together they stepped up to face the challenge head-on and to win not only in India but also globally. The levers of (a) low cost, (b) highly skilled, and (c) English as the medium of education and it being the corporate-language: were the key drivers that enabled the flow of global business to India. There was exponential growth in employment both directly (jobs in the international and domestic companies) as well as indirectly (as support industries like transport, catering and ancillary industries). The simultaneous investment of the government in building the necessary infrastructure did its share of providing impetus towards creating more jobs for the people of the country. Hence, human relations movement in India has evolved very differently as compared to what we see in the developed economies of the USA and the UK. What is currently acting as a limitation is the enhanced awareness on the need for research based HRM practices. While there is a lot of work happening in the Indian education system to promote this, it is going to take a while before it can create a distinct body of knowledge that is reference able. For now the industry relies on emulating westerns HR practices and customizing on an as-needed basis for the Indian corporation. For the rest the industry forums and consortiums like the NASSCOM act as a hub bringing together organizations on a regular basis to discuss challenges and share best practices and identify ways and means o overcome them together. So far this has been successful and working to the advantage of the Indian corporate. Leading MNC research and consulting firms like Mercer and Hewitt too contribute to the industry through carrying out research and sharing reports on a regular basis. The approach however remains analytical and less prescriptive.

Q.3 Explain the critical steps in Human Resource Planning system. [10 Marks] A. Critical steps in Human resource planning system are: A. Purpose of Human Resource Planning: Human Resource Planning fulfills individual as well as organizational goals. What it essentially amounts to is striking a balance between the future human resources needs and the future enterprise needs. And this is done with the clear objective of maximizing the future return on investment in human resources. And this objective may be laid down for a shortterm (i.e. for one year).


B. Estimating/Forecasting the future Manpower Requirements: the first step in the process is to arrive at the desired organizational structure at a given point in time. Mapping this structure with the existing structure helps in identifying the gap in resources requirement. The number and type of employees needed have to be determined. In addition to the structure there are a number of external factors that affect this determination. They include business forecasts, competitor strategy, expansion plans, and product/skills mix changes, profit/revenue growth projections, in addition to management philosophy and government policies. This step also includes an analysis of the external labor/talent environment, its demographics, demand/supply of the required talent, and cost considerations. C. Auditing Human Resources: Once the future human resource needs are estimated, the next step is to determine the present supply of manpower resources. This is done through what is called Skills Inventory. A skills inventory contains data about each employees skills, abilities, work preferences and other items of information which indicate his worth to the company. Skills inventory are also referred to as competency dictionaries. This information is usually retained as part of the performance management system with the HR department. This step in the HRP system helps identify the existing profile of the manpower and its efficiency. It helps highlight where the organization is vs. where it ought to be. The step concludes with identifying clear gaps in the skills/ manpower mix required to meet the upcoming business objectives. D. Job Analysis: After having decided how many persons would be needed, it is necessary to prepare a job analysis. The recorded details of training, skills, qualification, abilities, experience and responsibilities, etc. as needed for a job are studied. Job analysis includes the preparation of job descriptions and job specifications. E. Developing a Human Resource Plan: This step refers to the development and implementation of the human resource plan, which consists in finding out the sources of labor supply with a view to making an effective use of these sources. Some important considerations at this point are: Specific roles/disciplines being hired for, of them which roles are pivotal for the business Competencies and capabilities needed Manager vs. employee hiring Hire internally vs. External sourcing Planning for new skills through training existing staff vs. hiring new teams In case of surpluses, planning for redeployment/ reduction in workforce as required Succession planning for key positions in the company


Q.4 With reference to the compensation and salary system what are the systems that are helpful to raise the effectiveness of employees. [10 Marks] A. Compensation/ salary systems are designed to ensure that employees are rewarded appropriately depending on what they do and the skills and knowledge (intellect) required for doing a specific job. It must therefore provide for the following key factors in order to be effective: The following factors may be helpful to raise the effectiveness of employees: Signal to the employee the major objectives of the organizations- therefore it must link to the overall goals and objectives of the company. For example if doing a quality job is critical for the company its compensation system has to ensure that this is adequately rewarded. On the other hand if company values productivity and units produces, the compensation system would be designed such that productivity is rewarded. Attract and retain the talent an organization needs the need to benchmark salaries to the prevalent market standard for that job / skill so that the company is able to attract the right talent. If an enterprise pays a salary lower that what the market does for that job/responsibilities, the probability that suitable candidates would take the job offer and join the company. Even if they do join subsequently when they find that the market pays more for that job they would quickly find a more remunerative job and leave the company. Motivate employees to perform effectively as discussed at the outset, money is a key motivator and it often might be the only motivator for most employees, therefore ensuring that compensation is appropriately disbursed need to be taken care of while designing the compensation system. Jobs in the brick and motor, production setups would focus on higher incentive policies that would motivate the employee to produce more while the base-salary would be low. Create the type of culture the company seeks to engender compensation systems play a critical role as sponsors for the organizations culture. A performance driven culture would build compensation policies that clearly and significantly reward performance. A company that rewards loyalty would reward employees who stay longer in the company with significantly better incentive programs.

Hence we see how compensation systems are reflective of the organizations over all philosophy of what its goals and objectives are and how this can be linked to salary payout. Broad banding versus Competency based pay systems: Organizations that follow a skill based or competency based pay system frequently use board banding to structure their compensation payments to employees. Broad branding simply compresses many traditional salary grades (say 15 to 20 grades) into a few wide salary bands (three or four grades). By having relatively few job grades, this approach tries to play down to play down the value of promotions. Depending on changing market conditions and organizational needs, employees move from one position to another without raising objectionable questions, (such as when the new grade is available, what pay adjustments are made when duties change etc.) As a result movement of employees between 7|Page

departments, divisions and locations becomes smooth. Employees with greater flexibility and broader set of capabilities can always go in search of jobs in other departments, or locations that allow them to use their potential fully. Board banding further helps reduce the emphasis on hierarchy and status. However, broad banding can be a little un-setting to new recruit when he is made to roll on various jobs. Most employees still believe that the existence of many grades helps tem grab promotional opportunities over a period of time. Any organization having fewer grades may be viewed negatively as having fewer upward promotion opportunities. Moreover a number of individuals may not want to move across the organizations into other areas.

Below versus above market compensation: In high tech firms R&D workers might be paid better than their counterparts in the manufacturing division. Blue chip firms such as HLL, Nestle, Procter & Gamble, TCS, Hughes Software Systems might pay above market compensation to certain groups in order to attract (and retain) the cream of the crop. To grow rapidly and to get ahead of others in the race, especially in knowledge based industries most companies prefer to pay above market salaries. Above market wages are typical in well-established manufacturing units operating in a highly competitive environment. Firms paying below market tend to be small young and non-unionized. Open versus secret pay: In real world the issue of paying compensation openly or in secret way may often become a bone of contention between employees and the employer(s). Current research evidence indicates that pay openness is likely to be more successful in organizations with extensive employee involvement and an egalitarian culture that encourages trust and commitment. Open pay eliminates doubts in the minds of employees regarding equity and fairness because there is equal pay for equal work. But open pay has a downside. First, managers are forced to defend their compensation decisions publicly. The question of how much pay one should get is more or less decided by the manager, based on his own subjective assessment of various factors. In such decision, it is not easy to please everyone. Second, the cost of making a mistake in a pay decision increase when pay is open. Third, to avoid never ending and time wasting arguments with employees managers may eliminate pay differences among subordinates despite differences in performance levels. This may in the end force talented people to leave the organizations. Pay secrecy involves withholding information from the recruits regarding how much others make, what raises others have received and even what pay grades and ranges exist within an organizations. Pay secrecy gives managers some amount of freedom in compensation management, since pay decisions are not disclosed and there is no need to justify or defend them. Employees who do not know how much others are getting have no objective base for pursuing complaints about their own pay. Secrecy also serves to cover up inequities prevailing within the internal pay structure.

Q.5 What is competency? How it can be linked to the HR system? [10 Marks] A. Competency is defined as A capacity that exists in a person that leads to a behavior that meets the job demands within parameters of organizational and that in -turn bring about the desired results. An underlying characteristic of a person results in effective and/or superior performance of the job. It was 8|Page

first popularized by Boyatiz. Competency is a tool that can be used to map best-in-class performance. Competencies are based on: o o o o Knowledge: Information accumulated in a particular area of expertise. Skills: The demonstration of the expertise. Motive: The recurrent thought that drives behavior. Traits: A general disposition to behave in a particular way.

There are two sets of competencies: Threshold competencies: They are the characteristics that any job holder needs to have to do the job effectively, but does not differentiate between average and superior performer. Differentiating competencies: They are characteristics which superior performers have but are not present in average performers. This thinking holds the key to differentiate employees based on competencies they possess and there compensation and growth within the modern companies.

Competency Frameworks define the competency requirements that cover all jobs in an organization. These consist of the both work specific as well as behavioral competencies. Each job is profiled for the competencies needed and these are then placed on to a common framework. Depending on the value of the competency, the number of competencies, the proficiency level of competency and the competencys uniqueness, the job worth can be assessed in a comparative manner. Organizations need to invest significantly and usually outsource the activity of competency mapping. But once done, it remains relevant for next 4-5 years unless there is a significant change in the way the company conducts its business. Competency Framework helps in following: 1. 2. 3. 4. 5. One universal set of competencies for all positions and employees in these positions. Builds a common language and frame of reference for everyone Merit of each positions/individual Makes it easier to compare positions and employees across the job functions. It helps align everyone towards a common culture and can support and culture change process.

Linking Competency to HR systems: The Key benefits of the competency based management approach are its usage to build all the other HR systems such as recruitment, performance management, training and development, career development, compensation management and succession planning. Recruitment and Selection: The competency profile for a job serves as the reference for the candidate hunt for the position. It is used at multiple stages in the recruitment and selection process Job description and competency profile shared with recruitment consultants as well as hosted on the company intranet and internet site for prospective applicants to view. 9|Page

Use the competencies to design the appropriate selections tests and other methods. Assessment forms for interviewers to contain the competency list and specify the desired proficiency levels

Performance Management: Most organizations using competency frameworks are focused to build competency based performance assessment processes. Employees performance is assessed on the core tasks and results as well as on the competencies required for the job. If there is a gap between the desired proficiency and the current proficiency, the employee is reviewed for development initiatives to improve the competency. If the employee has competencies above the desired proficiency he is a potential talent and needs to be nurtured for other roles and higher responsibilities. Training Needs: The information on gaps in competencies is collated for employees across the organizations and suitable training interventions are designed. The methodology used for competency improvement is usually action learning based. Focus I on internalizing the learning by ensuring workplace application project and activities. Manger support in making competency training useful is important. Career Planning: Competency assessments are popularly used for helping and employee discover his strength competencies and service as effective means for the employee to identify what roles/job can be best for the employee. Most career planning assessment and activities are built on enhancing the employees strength areas and identifying jobs that match those strengths. Compensation philosophy: The practical application of competency based compensation system is not easy. The competency framework provides a common benchmarking of all jobs across the organization on the competencies required and the proficiency level for the competency. This framework is then mapped to levels or grades that create job to level mapping. The levels have ranges of compensation that can be paid for any job at a specific level. New Employees should not be paid less than the minimum compensation specified for the job. Succession Planning: Competency based management is most effective in succession planning initiatives. Competency assessment is widely used to identify and nurture talent in organizations. Most succession planning decisions use the competency assessment data for the employee and this along with the career planning data are used to ascertain employee readiness and inclination for new roles and responsibilities in the critical roles identified for succession planning.

Q.6 Dynamic Learning is an organization that wants to revise the HR policies. It has conducted a survey and the results of survey indicated that there is employee unrest, tardiness, absenteeism, more grievances. This all clearly indicates low morale. Suggest the measures that can be taken to improve employee morale. [10 Marks]

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A. There are number of measures which can be used to improve employee morale. Following are the positive measures to be taken to bring job satisfaction to employees and reconcile individual interests with interests of the organization 1. Creation of whole Jobs: Under this method, complete jobs are assigned to the employees. The complexity of a job should be increased so that it may appeal to their higher needs. 2. Job Enrichment: Job enrichment tries to deal with dissatisfaction by increasing job depth. Under this, individual employees may be given responsibility for setting their own work pace, for concerning their own errors, and for deciding on the best way to perform a particular task. 3. Building responsibility into a job: Employees should be encouraged to participate and if possible be held responsible for taking decisions. Some delegation of responsibility from the manager to the employee could be useful in improving employee ownership. 4. Managerial Effectiveness: This can be achieved by: a. Developing work groups b. Improving social contact of the employees. c. Managerial coaching to be provided d. Employee stress management activities 5. Flexing work hours: Flex time/work from home provisions allow employees to arrange their work hours to suit their personal needs and life-styles. This is particularly suited to situations with fluctuating workloads. Flex time employees are responsible for coordinating their functions with other employees and thereby have more responsibilities and autonomy 6. Rotation of jobs: This reduces employees boredom which arises out of the monotonous nature of work. 7. Incentive and Profit-sharing plans: Morale can be improved by effective incentive and profit-sharing schemes. Incentive schemes are effective in improving work place morale. They need to be carefully designed, well communicated and implemented to be effected. In addition to the economic aspects, profit-sharing has psychological implications. Morale can also be improved by adapting several other measures such as Employee contest, special recognition and awards for long service employees and training to managers in how to manage people.

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