Strategic HRM Session-16

Session-16
Unit-21
LO-2- Apply Contemporary Theoretical and
Practical knowledge of HR Development
 Apply relevant theories and concepts relating to the
growth and development of Strategic HRM to specific
Organizational examples/s/
 Explain how Human resource theory relates to practice
in a specific Organizational example identifying areas
where this will differ in other organizational
situations.
 Evaluate how Human resource theory relates to
practice in specific Organizational example comparing
and contrasting this with other possible
Organizational contexts.
Apply relevant theories and concepts relating to
the growth and development of Strategic HRM
to specific Organizational examples/s/
 Evolution of SHRM. The History of HRM from IR to
Personnel and HR.
 Victor Vroom’s Expectation Theory: expectancy
instrumentality and valence and Alderfer’s ERG
Theory; Existence (Maslow’s 1-2) Relatedness
(Maslow’s 3)and Growth needs (4-5).
 HR issues in the private, public and third sectors.
Links between organizational strategy and HR
strategy.
 The universalist, contingency and configurational
approaches to HRM.
Explain how Human resource theory relates to practice in a
specific Organizational example identifying areas where this will
differ in other organizational situations.
 Hawthorne Effect: observer effect.
 Concept of Applied HR.
 Organizational Behaviour.
 Types of Organizational Behavior, Micro and Macro.
 Impact of Information Technology on Human
Resource Management.
 Enhancing management, Effective recruiting, Data
management and critical analysis
 Cost-reduction and efficiency, Better Customer Services
 Career Development, Aligning people and processes
(Cloud Technology)
Evaluate how Human resource theory relates to practice in
specific Organizational example comparing and contrasting this
with other possible Organizational contexts.
 Developing Work Flexibility.
 Part Time/Temporary Employees
 Models of Flexibility
 Tele-working, Staggered hours- When its not strictly a 9
to 5 Compressed hours- Could mean four days of 10
hours instead of five of 8.Annualized Hours
 Benefits of Flexibility: Enhanced Recruitment,
Improved Performance and Productivity, Increased
Retention and Reduced Turnover, Positive impact on
employee commitment.
 Better customer coverage and satisfaction, Increased Job
Satisfaction, Increased Cost Saving, Reduction in
Absenteeism.
Evolution of SHRM
 The History of HRM from IR to Personnel and HR.
 The evolution of Strategic human resource
management as a distinct profession dates back to the
industrial revolution when factories established
personnel departments to look into wages and welfare
of workers.
 To understand the evolution of Strategic Human
Resource Management, one must first understand its
basis.
Evolution of SHRM
 The workers in the early factories faced long hours of works
under extremely unhygienic conditions, and mostly lived in
slums.
 This soon resulted in several labor riots, the most famous
being Ludds riots of 1811 in Nottingham, England,
precipitated by reduced wages.
 The government soon intervened to provide basic rights
and protections for workers, and the need to comply with
such statutory regulations forced factory owners to set up a
formal mechanism to look into workers wages and welfare,
and redress other issues concerning labor.
 This led to the emergence of Personnel Management as a
distinct profession.
Evolution of SHRM
 The Personnel Management Approach
 The Personnel Management approach that remained in vogue
for much of the 20th Century remained administrative in nature.
 Arising out of the need to enforce statutory compliance, it
concerned itself primarily with
 employee record keeping
 adherence to the stated policies while implementing functions
such as recruitment, training and wage administration
 taking welfare oriented measures such as providing medical care,
vaccinations, housing facilities and the like
 attempting to increase productivity through wage increases and
training.
Evolution of SHRM
 Dealing with trade unions and trying to solve industrial
disputes through collective bargaining and other industrial
relations approaches.
 conducting performance appraisals or report card of past
performance to determine pay and promotions
 The Personnel Management approach tried to convince
workers of the business interests, and convince
management of workers interest and social obligations.
 It rarely had a direct say in the company’s strategy and did
not involve itself with operations aspects, remaining a
purely staff function.
Evolution of SHRM
 The Traditional Human Resource Approach
 The latter decades of the twentieth century saw the winds of
change starting to affect the personnel management profession.
 Some of the popular theories that struck ground were Douglas
McGregor’s Theory X and Theory Y and Herzberg’s theory
 Abraham Maslow’s hierarchy of needs theory that recognized the
concept of individuals aspiring to reach a state of self
actualization,
 Victor Vroom’s Expectation Theory, Alderfer’s ERG Theory, and
more.
 Government interventions led to the enactment of new
legislations that guaranteed workers more rights.
Evolution of SHRM
 All these changed soon led to the transition from the
administrative and passive Personnel Management approach to a
more dynamic Human Resource Management approach.
 This new approach considered workers as valuable resources, a
marked improvement from the earlier approach of considering
them as mere cogs.
 While Personnel Management was a strictly staff function,
Human Resource management began to become an increasingly
line management function, directly interlinked to the core
business operations.
 The major changes in approach from Personnel Management vs
Human Resource Management manifested in many ways.
Evolution of SHRM
 The recruitment and skill enhancement of the workforce
having a direct bearing on organizational profitability,
efforts began to increase worker’s commitment and loyalty.
 Motivation took the shape of challenging work
environment, free holidays, creating an active social
community within the workforce, fringe benefits and the
like, besides monetary incentives.
 Training acquired a new “Training and Development"
dimension with the focus on behavioral training to change
attitudes and develop basic skills rather than remaining
limited to inculcating work-related skills.
Evolution of SHRM
 Wage and Salary Administration became more
complex with the introduction of performance related
pay and the like
 The report-card based performance appraisal systems
become more proactive with new techniques such as
Management by Objectives, 360 degree appraisals and
the like
 emphasis on leadership instead of managing
Evolution of SHRM
 The Strategic Human Resource Approach
 The evolution of Human Resource Management took a new turn
at the end of the century.
 Increased free market competition at global level and the
proliferation of technology and knowledge based industries
raised the importance of human resources, and from an obscure
role a century ago, human resource management rose to become
the most critical function of an enterprise.
 The workforce, hitherto considered as “resources" now became
“assets" and a valuable source of competitive advantage.
 The thrust of human resource management now lies in trying to
align individual goals and objectives with corporate goals and
objectives, and rather than enforce rules or dictate terms, act as a
facilitator and promotes a participative approach.
Evolution of SHRM
 Increased reliance on performance based short term contracts instead
of long term employment
 Direct linkage of compensation to the profitability of the enterprise
and the employee’s contribution towards such profitability
 New dimensions for training and development function by
encouraging and facilitating innovation and creativity
 Motivation through enriching the work experience
 Performance and Talent Management displacing performance
appraisals
 Strategic Human Resource Management blurs the distinction between
a specialized Human Resource Management function and core
operational activity, and very often, Human Resource Management
drives interventions such as Total Quality Management and the like.
The Strategic Human Resource
Approach
 Human Resource Management took a new turn at the
end of the 20th century.
 Increased free market competition at global level and
the proliferation of technology and knowledge based
industries raised the importance of human resources,
and from an obscure role a century ago, human
resource management rose to become the most critical
function of an enterprise.
 The workforce, hitherto considered as “resources" now
became “assets" and a valuable source of competitive
advantage.
Approach
 The thrust of human resource management now lies in
trying to align individual goals and objectives with
corporate goals and objectives, and rather than enforce
rules or dictate terms, act as a facilitator and promotes
a participative approach.
 Increased reliance on performance based short term
contracts instead of long term employment
 Direct linkage of compensation to the profitability of
the enterprise and the employee’s contribution
towards such profitability
Links between organizational
strategy and HR strategy
 Why Link HR Strategy to the Organizational
Strategy?
 Strategic Alignment of HR
 Delivering the Strategy
 Improved Recruitment and Retention
 Effective Training and Development
 HR Drives Strategy
 Why Link HR Strategy to the Organizational Strategy?
 A well-researched and -presented organizational strategy is
a valuable roadmap for how you're going to run your
business.
 An effective strategy sets a clear vision and mission for your
company and
 Identifies the necessary resources requirements to deliver
on it, including your people.
 Linking your HR strategy to your organizational strategy
makes good business sense for a number of reasons.
 HR departments sometimes are left to deal with only
administrative functions, such as recruitment, performance
management, training and compensation.
 These functions are important, but on their own, they form
no part of how an organization plans for the right level of
human resources to deliver on its plans and ambitions.
 Empowering your HR department to add value to your
business strategy ensures it undertakes its functional
activities in a manner that supports growth and success.
 An effective HR strategy with clear links to the business
strategy enables your organization to align its activities
better with its human resources.
 An HR department that understands the demands of your
business strategy can help ensure you have the right people
in place to deliver on your ambitions and support growth.
 HR departments integrated into the senior strategic
management team can work across the organization
ensuring that human resource requirements are considered
equally with other organizational investments.
 Organizations are affected by a huge range of external
and internal factors that together can change the
nature of individual job roles or place new demands on
individuals skill sets.
 An HR strategy linked to the organizational strategy is
better placed to anticipate any such changes and
therefore can put in place a targeted training and
development plan to help the organization more
quickly adapt to new circumstances.
 Employees who feel better supported in their jobs tend to
be happier and more productive.
 Furthermore, organizations with a positive reputation in
the jobs market for taking care of its workforce face fewer
barriers to effective recruitment.
 Taken together, these factors are important elements in
illustrating why HR strategy must link to organizational
strategy.
 With recruitment and retention being two key areas where
monetary value can be assigned, a more stable and better-
trained workforce means improved operating profits.
 Having a clear concept of your employees and their
different skills can help you see where your
organization has potential for development and
growth and help you structure your organization to
take advantage of emerging opportunities.
 Organizations that have reached this point in their
development see HR as a key driver of strategy and
integral to their future success, rather than as a simple
administrative function that ensures everyone gets
paid on time.
Approach
advantage.
Approach
What is Vroom’s Expectancy
Theory?
 In 1964, Canadian professor of psychology Victor
Vroom developed the Expectancy Theory.
 In it, he studied people’s motivation and concluded it
depends on three factors
Expectancy, instrumentality and valence.
 Abraham Maslow and Frederick Herzberg also
researched the relation between people’s needs and
the efforts they make.
 Vroom distinguishes between the effort people put in,
their performance and the final result.
Theory?
 His theory primarily relates to motivation within
a work environment.
 When employees can make choices in their
work, Victor Vroom argues that they will mostly
choose that what motivates them the most.
 Victor Vroom uses a formula to calculate the
motivational force:
 Motivational force = Expectancy x Instrumentality
x Valence
Expectancy
 This is about what employees expect from their own efforts and
the relation to good performance.
 Part of this expectation is the level of difficulty he experiences.
 An organisation can respond to that by finding out which factors
can motivate the employee to deliver his best possible
performance.
 Those factors can be facilities, training or support from a
supervisor who builds his employees’ confidence.
 Victor Vroom indicates that, in general, more effort leads to
better performance.
 Employees can be stimulated to make an effort by offering them
a juicy carrot if they complete their task properly and quickly.
Instrumentality
 Each employee is a cog in the machine and an instrument
that contributes to the business results.
 From that perspective, instrumentality isn’t difficult to
grasp.
 It’s about the employee’s performance being good enough
to achieve the desired result.
 An organisation can stimulate this by actually making good
on promises of additional rewards such as bonuses
or promotion.
 The employee has to believe that if he performs well,
appreciation will be shown for the results.
 Transparency throughout the reward process is an
important condition for instrumentality.
Valence
 The final result that employees achieve is valued
differently by each individual.
 This value is based on their own basic needs.
 As such, it’s a good idea for an organisation to find out
what an individual employee values and what his
personal needs are.
 One might value money, while another values more
days off.
 Motivational force = Expectancy x Instrumentality
x Valence
Theory?
 According to Vroom’s Expectancy Theory, you can expect
employees will increase their efforts at work when the
reward has more personal value to them.
 They’ll be more aware of the fact that there is a link
between their effort and the results.
 It means that both the organisation and the employee have
to be aware of the following three processes:
 Increased efforts will improve work performance
 Increased performance will lead to bigger rewards
 The offered reward will be appreciated by the employee
Theory?
 Perception
 Perception is an important factor in Vroom’s Expectancy
Theory.
 An organisation might perceive that it, as an employer,
offers its employees everything they need to sufficiently
motivate them.
 For instance, a salary that’s 10% above industry average, 10
extra days off, training programs, or career opportunities.
 But not all employees will be sufficiently motivated by that;
 each individual has a different perception.
 There might be employees who would appreciate more
support from their supervisor.
ERG motivation theory Alderfer
 Clayton P. Alderfer's ERG theory from 1969 condenses
Maslow's five human needs into three categories:
 Existence, Relatedness and Growth needs.
 Existence Needs
Include all material and physiological desires (e.g., food,
water, air, clothing, safety, physical love and affection).
Maslow's first two levels.
 Relatedness Needs
Encompass social and external esteem; relationships with
significant others like family, friends, co-workers and
employers .
 This also means to be recognized and feel secure as part of
a group or family. Maslow's third and fourth levels.
 Growth Needs
Internal esteem and self actualization;
 these impel a person to make creative or productive
effects on himself and the environment (e.g., to
progress toward one's ideal self).
 Maslow's fourth and fifth levels.
 This includes desires to be creative and productive,
and to complete meaningful tasks.
 Even though the priority of these needs differ from
person to person, Alderfer's ERG theory prioritizes in
terms of the categories' concreteness.
 Existence needs are the most concrete, and easiest to
verify.
 Relatedness needs are less concrete than existence
needs, which depend on a relationship between two or
more people.
 Finally, growth needs are the least concrete in that
their specific objectives depend on the uniqueness of
each person.
HR issues in the private, public
and third sectors
 Public and private sectors as well as third sector
organizations have different goals and motives and are
governed by somewhat different principles, with
unique groups overseeing their actions and
procedures.
 Organizations in the private sector have more freedom
to operate, while public organizations are governed by
laws, rules, traditions, and structural bureaucratic
checks and balances.
 There are five significant distinctions between the
public and private sectors.
Their goals are fundamentally
different
 The public sector is focused on serving the general
public and looking after their interests
 Private sector’s fundamental concern is creating
markets to enable earning profits.
 In the private sector, organizations must answer to
stakeholders and customers.
 In the private sector, companies must answer to their
investors and board of directors.
Their goals are fundamentally
different
 Public sector agencies can survive the inefficient
operation,
 Poorly run private sector firms can go broke and end
up no longer in business.
 While the public sector is focused on addressing
public concerns, these organizations are also being
watched by many interest groups and oversight
agencies.
 This difference in goals and external forces affects the
way organizations in both sectors operate.
Differences in the way employees
are hired
 The ways in which employees are hired differs in both sectors.
 In the private sectors, managers have the ability to hire quickly
depending on the business cycle and the need for more
personnel.
 A longer process is involved in hiring employees in the public
sector because it can take several years to create a new position
and several months for an existing position to be filled.
 Similarly, the firing of employees in both sectors is subject to
different time frames.
 Private sector managers can fire and offer severance packages to
employees at any time while public sector managers encounter a
good deal of bureaucratic red tape, requiring extensive
documentation and making the removal process more complex
and time-consuming.
The Procurement process is
different
 Since public organizations are owned by the government
and are funded by tax revenue, which is generated by the
public or through the issuance of public debt, the
procurement process is something public organizations do
not directly control.
 Adequate funding must be attained and disbursed,
procurement practices need to be approved by several
governing bodies and suppliers often undergo background
checks and other investigations, all of which slows down
the procurement process considerably.
 Companies in the private sector benefit from a quicker
procurement process.
Public organizations face unique
accountability
 Government organizations are subject to a specific kind of
scrutiny.
 This is mainly due to the fact that they are funded by
taxpayers who hold these agencies accountable for how
their money is being spent and who view expenditures not
only for their efficiency and effectiveness but also for the
degree these address questions of social equity and
fairness.
 The activities and accomplishments of these organizations
hold a greater presence in the public eye.
 Leaders of private corporations are not accustomed to this
level of scrutiny because they are accountable primarily to
their board of directors and shareholders.
Public organizations often can’t
choose their goals
 In the private sector, businesses set their own goals and focus
their resources on accomplishing them.
 The goals are set with the aim of achieving profits and capturing
market share and are the result of company strategy.
 Public organizations continuously find themselves pressed by
legislative mandates, facing outside forces, and often have to try
to accommodate a host of other organizations or interest groups
that can have conflicting goals.
 Public officials and political parties establish agendas on specific
issues that advance their interests and keep them winning
elections and in office.
 In this way, the goals of a public organization can see big changes
driven by electoral politics.
Public and Private Sector
 Public and private organizations face challenges that
are unique to each sector.
 Leadership in both spheres requires specific abilities
for achieving their goals.
 While private sector managers often benefit from
analytical thinking, business savvy and creative
marketing techniques, \
 Public administrators who wish to excel require a deep
understanding of laws and strong communication and
interpersonal skills in addition to the business-
oriented skills of a private sector manager.
HR in the third/charity sector
 Aligning with organisation values is plain sailing for those
working in the third sector.
 For many it is the reason why they choose to work there
and it is easy to see why so many gain job satisfaction from
being part of a team that helps deliver on the objectives of a
worthy cause.
 Yet most are run just like any other business and the role
therefore involves being hands-on and covering the range
of HR duties that would be involved in working for any
private sector business.
 Recruitment is also a key issue and anyone working in the
sector will need to have solid experience in this area.
HR in the third/charity sector
 HR professionals will need to be resourceful in finding
a range of people from volunteers to professional social
workers, operational and support roles.
 Training to front-line charity staff is as essential as it is
for those that work in any other office.
 Whilst staff are often very mission-focused, HR has to
ensure that levels of motivation don’t rely purely on
goodwill and often this has to be done with limited
financial input.
 Volunteers are a hugely important part of the charities’
workforce.
 Why Link HR Strategy to the Organizational
Strategy?
 Why Link HR Strategy to the Organizational Strategy?
 A well-researched and -presented organizational strategy is
a valuable roadmap for how you're going to run your
business.
 An effective strategy sets a clear vision and mission for your
company and
 Identifies the necessary resources requirements to deliver
on it, including your people.
 Linking your HR strategy to your organizational strategy
makes good business sense for a number of reasons.
 HR departments sometimes are left to deal with only
administrative functions, such as recruitment, performance
management, training and compensation.
 These functions are important, but on their own, they form
no part of how an organization plans for the right level of
human resources to deliver on its plans and ambitions.
 Empowering your HR department to add value to your
business strategy ensures it undertakes its functional
activities in a manner that supports growth and success.
 An effective HR strategy with clear links to the business
strategy enables your organization to align its activities
better with its human resources.
 An HR department that understands the demands of your
business strategy can help ensure you have the right people
in place to deliver on your ambitions and support growth.
 HR departments integrated into the senior strategic
management team can work across the organization
ensuring that human resource requirements are considered
equally with other organizational investments.
 Organizations are affected by a huge range of external
and internal factors that together can change the
nature of individual job roles or place new demands on
individuals skill sets.
 An HR strategy linked to the organizational strategy is
better placed to anticipate any such changes and
therefore can put in place a targeted training and
development plan to help the organization more
quickly adapt to new circumstances.
 Employees who feel better supported in their jobs tend to
be happier and more productive.
 Furthermore, organizations with a positive reputation in
the jobs market for taking care of its workforce face fewer
barriers to effective recruitment.
 Taken together, these factors are important elements in
illustrating why HR strategy must link to organizational
strategy.
 With recruitment and retention being two key areas where
monetary value can be assigned, a more stable and better-
trained workforce means improved operating profits.
 Having a clear concept of your employees and their
different skills can help you see where your
organization has potential for development and
growth and help you structure your organization to
take advantage of emerging opportunities.
 Organizations that have reached this point in their
development see HR as a key driver of strategy and
integral to their future success, rather than as a simple
administrative function that ensures everyone gets
paid on time.
Approach
advantage.
Approach
The universalist and contingency
approaches to HRM
 Universalistic or ‘best practice’ approach to HRM
relates to the viewpoint that there is a set of best HRM
practices and their adoption is going to generate
positive results regardless of the circumstances
associated with organizations.
 Contingency or ‘best fit’ approach on the other hand,
disagrees with the presence of universal prescriptions
to HR issues and stresses the need for integration
between HR policies and a wide range of other
organizational policies.
The universalist, contingency and
Configurational approaches to HRM
 Configurational approach to SHRM “stresses the need
for practices that are contingent with organisational
circumstances, but in addition emphasizes the need
for horizontal or internal fit” (Sparrow et al., 2004,
p.158).
 To put it simply, configurational approach recognizes
the validity of ‘best practices’, but at the same time,
accepts the importance of adjustment of HR policies
with the overall organizational strategy. This is what
SHRM is all about.
 Explain how Human resource theory relates to practice
where this will differ in other organizational
situations.
Explain how Human resource theory relates to practice in a
specific Organizational example identifying areas where this will
differ in other organizational situations.
 Hawthorne Effect: observer effect.
 Concept of Applied HR.
 Organizational Behaviour.
 Types of Organizational Behavior, Micro and Macro.
 Impact of Information Technology on Human Resource
Management.
 Enhancing management, Better services to Line Managers
 Effective recruiting, Data management and critical analysis
 Cost-reduction and efficiency, Better Customer Services
 Career Development, Aligning people and processes (Cloud
Technology)
Hawthorne Effect
 The alteration of behaviour by the subjects of a study
due to their awareness of being observed.
 The Hawthorne effect (also referred to as
the observer effect is a type of reactivity in which
individuals modify an aspect of their behavior in
response to their awareness of being observed.
 The original research was interpreted by Elton
Mayo and others to mean that paying attention to
overall worker needs would improve productivity.
Hawthorne Effect
 The Hawthorne Works had commissioned a study to
see if its workers would become more productive in
higher or lower levels of light.
 The workers' productivity seemed to improve when
changes were made, and slumped when the study
ended.
 It was suggested that the productivity gain occurred as
a result of the motivational effect on the workers of the
interest being shown in them.
Concept of Applied HR
 The human resources management team suggests to the
management team how to strategically manage people as
business resources.
 This includes managing recruiting and hiring employees,
coordinating employee benefits and suggesting employee
training and development strategies.
 In this way, HR professionals are consultants, not workers
in an isolated business function;
 they advise managers on many issues related to employees
and how they help the organization achieve its goals.
 Working Together
 At all levels of the organization, managers and HR
professionals work together to develop employees'
skills.
 For example, HR professionals advise managers and
supervisors how to assign employees to different roles
in the organization, thereby helping the organization
adapt successfully to its environment.
 In a flexible organization, employees are shifted
around to different business functions based on
business priorities and employee preferences.
 Commitment Building
 HR professionals also suggest strategies for increasing
employee commitment to the organization.
 This begins with using the recruiting process or
matching employees with the right positions according
to their qualifications.
 Once hired, employees must be committed to their
jobs and feel challenged throughout the year by their
manager.
 Building Capacity
 An HRM team helps a business develop a competitive
advantage, which involves building the capacity of the
company so it can offer a unique set of goods or
services to its customers.
 To build an effective human resources, private
companies compete with each other in a "war for
talent."
 It's not just about hiring talent; this game is about
keeping people and helping them grow and stay
committed over the long term.
 Addressing Issues
 Human resource management requires strategic planning
to address not only the changing needs of an employer but
also a constantly shifting competitive job market.
 Employee benefit packages must be continually assessed
for costs to the employer.
 Employee retention through the addition of vacation days,
flexible working arrangements or retirement plan
enhancements.
 For example, in recent years many human resource
professionals have oversaw the addition of preventative
health components to traditional health plans for both
employment recruitment and retention efforts
Explain how Human resource theory relates to practice
where this will differ in other organizational situations.
 Organizational behavior (OB) is the study of the way
people interact within groups.
 Normally this study is applied in an attempt to create
more efficient business organizations.
 The central idea of the study of organizational
behavior is that a scientific approach can be applied to
the management of workers.
 Organizational behavior theories are used for human
resource purposes to maximize the output from
individual group members.
Organizational Behaviour
 There are a variety of different models and
philosophies of organizational behavior.
 Areas of research include improving job performance,
increasing job satisfaction, promoting innovation and
encouraging leadership.
 In order to achieve the desired results, managers may
adopt different tactics, including reorganizing groups,
modifying compensation structures and changing the
way performance is evaluated.
 History
 Organizational behavior as a field of academic study
was not fully recognized by the American
Psychological Association until the 1970s.
 Its roots go back to the late 1920s when the Hawthorne
Electric Company set up a series of experiments
designed to discern how changes in environment and
design changed the productivity of their employees.
 Their various studies, conducted between the years of
1924 and 1933, were broad and meticulously measured
over large periods of time.
 The studies included the effect of various types of
breaks (lots of small breaks, a few long ones, etc.) on
productivity in varying levels of light.
 The most famous finding resulting from the
Hawthorne Studies is what is now called
the Hawthorne Effect.
 The change in behavior of a test subject when they
know they are being observed.
 Organizational behavior studies the impact individuals,
groups, and structures have on human behavior within
organizations.
 It is an interdisciplinary field that includes sociology,
psychology, communication, and management.
 Different Types of Organizational Behavior.
 “Micro” organizational behavior refers to individual and
group dynamics in organizations.
 “Macro” strategic management and organizational theory
studies whole organizations and industries, especially how
they adapt.
Why Study OB
 Many factors come into play whenever people interact
in organizations.
 Modern organizational studies attempt to understand
and model these factors.
 Organizational studies seek to control, predict, and
explain.
 Organizational behavior can play a major role in
organizational development, enhancing overall
organizational performance, as well as also enhancing
individual and group performance, satisfaction, and
commitment.
Importance of OB
 Organizational behavior is particularly relevant in the field
of management due to the fact that it encompasses many
of the issues managers face on a daily basis.
 Concepts such as leadership, decision making, team
building, motivation, and job satisfaction are all facets of
organizational behavior and responsibilities of
management.
 Understanding not only how to delegate tasks and
organize resources but also how to analyze behavior
and motivate productivity is critical for success in
management.
Importance of OB
 Organizational behavior also deals heavily in culture.
 Company or corporate culture is difficult to define but
is extremely relevant to how organizations behave.
 A trading company, for example, will have a
dramatically different work culture than an academic
department at a university.
 Understanding and defining these work cultures and
the behavioral implications they embed
organizationally is also a central topic in
organizational behavior.
Fundamentals of Organizational
Behavior
 Individual Differences.
 Perception.
 A whole Person.
 Motivated Behavior.
 The desire for Involvement.
 The value of the Person.
 Human Dignity.
 Organizations are Social System.
 Mutuality of Interest.
 Holistic Concept.
Individual Differences
 Every individual in the world is different from others.
Science supports this idea.
 Each person is different from all others, probably in a
million ways, just as DNA profile is different.
 The idea of the individual difference comes originally
from psychology.
 From the day of birth, each person is unique, and
personal experiences after birth tend to make people
even more different.
Perception
 Peoples’ perceptions are also different when they see
an object.
 Two people can differently present the same object.
And this is occurring for their experiences.
 A person always organizes and interprets what he sees
according to his lifetime of experience and
accumulated value.
 Employees also see work differently for differ in their
personalities, needs, demographics factors, past
experiences and social surrounding.
A whole Person
 An employee’s personal life is not detached from his
work life.
 As an example, A women who attends the office at 9:00
AM is always anxious for her children’s school time (if
her kids can participate in the school or not).
 As a result, its impact falls on her concentration that
means her working life.
 For this reason, we cannot separate it.
 So manager should treat an employee as a whole
person.
Motivated Behavior
 An employee has so many needs inside him.
 So, they want to fulfill those needs.
 That’s why; they need to/have to perform well in the
organization.
 Some motivations are necessary to enrich the quality
of work.
 A path toward increased need fulfillment is the better
way of enhances the quality of work.
Desire for Involvement
 Every employee is actively seeking opportunities to
work involved in decision-making.
 They hunger for the chance to share what they know
and to learn from the experience.
 So, the organization should provide them a chance to
express their opinions, ideas, and suggestions for
decision-making problem.
 A meaningful involvement can bring mutual benefit
for both parties.
Value of the Person
 An employee wants to be treated separately from
another factor of production, (land, capital, labor).
 They refuse to accept the old idea that they are just
treated as economic tools.
 They are the best of the Creations, indeed.
 For this, reason, they want to be treated with carrying
respect, dignity and other things from their employers
and society.
Human Dignity
 This concept is very philosophical.
 Every person needs to be treated with dignity and
respect, whether it’s the CEO of the company or labor.
 It confirms that people are to be treated differently
from other factors of production because they are of a
higher order in the universe.
Organizations are Social System
 From sociology, we learn that organizations are social
systems;
 Their behavior is influenced by their group as well as
by their drives.
 In fact, two types of social systems exist side by side in
organizations.
 One is a formal system, and the other is the informal
social system.
Mutuality of Interest
 Mutual interest is represented by the statement that
organizations need people and people also need
organizations.
 Organizations have a human purpose.
 People see organizations as a means to help them reach
their goals, while at the same time, organizations need
people to help achieve organizational objectives.
 If mutuality is lacking, it makes no sense to try to assemble
a group and develop cooperation, because there is no
common base on which to build.
 Mutual interest provides a super-ordinate goal that unites
the variety of needs that people bring to organizations.
Objectives of OB
 Organizational Behavior is the study and application
of knowledge about how people, individuals, and
groups act in organizations.
 An organizations in which people work, have an effect
on their thoughts, feelings, and actions.
 These thoughts, feelings, and actions, in turn, affect
the organization itself.
 Organizational behavior studies the mechanisms
governing these interactions, seeking to identify and
foster behaviors conducive to the survival and
effectiveness of the organization.
Objectives of OB
 Job Satisfaction.
 Finding the Right People.
 Organizational Culture.
 Leadership and Conflict Resolution.
 Understanding the Employees Better.
 Understand how to Develop Good Leaders.
 Develop a Good Team.
 Higher Productivity.
Challenges of OB
 Improving Peoples’ Skills.
 Improving Quality and Productivity.
 Managing Workforce Diversity.
 Responding to Globalization.
 Empowering People.
 Coping with Temporariness.
 Stimulating Innovation and Change.
 Emergence of E-Organisation & E-Commerce.
 Improving Ethical Behavior.
 Improving Customer Service.
 Helping Employees Balance Work-Life Conflicts.
Limitations of OB
 Organizational Behavior will not abolish conflict and
frustration; it can only reduce them.
 It is a way to improve, not an absolute answer to problems.
 We can discuss organizational behavior as a separate
subject, but to apply it, we must tie it to the whole reality.
 Organizational Behavior will not make up for our
deficiencies, cannot substitute for poor planning, inept
organizing, or inadequate controls.
 Behavioral Bias.
 Unethical Manipulation of People.
Behavioral Bias
 Behavioral Bias is a condition which is a reflection of
tunnel vision, in which people have narrow viewpoints
as if they were looking through a tunnel.
 They see only the tiny view at the other end of the
tunnel while missing the broader landscape.
 Following the behavioral bias, people who lack system
understanding may develop a behavioral bias, which
leads them to develop a narrow viewpoint.
Behavioral Bias
 It should be clear that the concern for employees can
be so greatly overdone that the original purpose of
bringing people together, which is “productivity” could
be lost.
 An effective organizational behavior should help
accomplish organizational purposes.
 It should not replace them.
 It is a mistake to make an assumption that the
objective of organizational behavior is as simple as to
create a satisfied employee-base
Unethical Manipulation of People
 A significant concern about organizational behavior is
that its knowledge and techniques can be used to
manipulate people unethically as well as to help them
develop their potential.
 People who lack respect for the basic dignity of the
human being could learn organizational behavior
ideas and use them for selfish ends.
 They could use what they know about motivation or
communication in the manipulation of people without
regard for human welfare. People who lack ethical
values could use people in unethical ways.
Explain how Human resource theory relates to practice
where this will differ in other organizational situations
 Impact of Information Technology on Human
Resource Management
 Human Resource Management (HRM) includes
activities such as recruiting, training, developing and
rewarding people in the organization.
 Information and Communication Technology (ICT),
such as the Internet, mobile communication, new
media, and such in HR can greatly contribute to the
fulfillment of HR of the organization.
 The human resources management team suggests to the
management team how to strategically manage people as
business resources.
 This includes managing recruiting and hiring employees,
coordinating employee benefits and suggesting employee
training and development strategies.
 In this way, HR professionals are consultants, not workers
in an isolated business function;
 they advise managers on many issues related to employees
and how they help the organization achieve its goals.
 Working Together
 At all levels of the organization, managers and HR
professionals work together to develop employees'
skills.
 For example, HR professionals advise managers and
supervisors how to assign employees to different roles
in the organization, thereby helping the organization
adapt successfully to its environment.
 In a flexible organization, employees are shifted
around to different business functions based on
business priorities and employee preferences.
 Commitment Building
 HR professionals also suggest strategies for increasing
employee commitment to the organization.
 This begins with using the recruiting process or
matching employees with the right positions according
to their qualifications.
 Once hired, employees must be committed to their
jobs and feel challenged throughout the year by their
manager.
 Building Capacity
 An HRM team helps a business develop a competitive
advantage, which involves building the capacity of the
company so it can offer a unique set of goods or
services to its customers.
 To build an effective human resources, private
companies compete with each other in a "war for
talent."
 It's not just about hiring talent; this game is about
keeping people and helping them grow and stay
committed over the long term.
 Addressing Issues
 Human resource management requires strategic planning
to address not only the changing needs of an employer but
also a constantly shifting competitive job market.
 Employee benefit packages must be continually assessed
for costs to the employer.
 Employee retention through the addition of vacation days,
flexible working arrangements or retirement plan
enhancements.
 For example, in recent years many human resource
professionals have oversaw the addition of preventative
health components to traditional health plans for both
employment recruitment and retention efforts
Impact of Information Technology on
Human Resource Management
 Technological advancement can have a huge impact on
the HR department of an organization as it allows the
company to improve its internal processes, core
competencies, relevant markets and organizational
structure as a whole.
 Human Resource must mainly be focused on the
strategic objectives of the organization.
 These strategies must be led to incorporate an IT
strategic plan for the organization.
 These are activities related to any development in the
technological systems of the entity, such as product
design (research and development) and IT systems.
 Technology development is an important activity for
the innovation process within the business, and
may include acquired knowledge.
 In the context, all activities may have some technical
content, and results in greater technological
advancement.
 Enhancing management
 Better services to Line Managers
 Effective recruiting
 Data management and critical analysis
 Cost-reduction and efficiency
 Better Customer Services
 Career Development
 Aligning people and processes (Cloud
Technology)
Better services to Line Managers
 Both HR and line managers primary interest is the
success of the business.
 The human resource’s main function is to support the
workforce needs of the organization.
 Strategic planning between HR and line managers is
important for reviewing projections concerning future
business demands.
 Training and developing the line managers in IT tools
will, therefore, prepare the line managers for a number
of leadership tasks.
Enhancing management
 Human Resource IT tools that can supplement
management and enhance efficiency and effectiveness,
which can lead to the success of the organization as a
whole.
 For example, Organizations across the world are driving to
improve organizational performance regardless of the size
of the organization or the industry.
 Managers within the organization measure
performance, sometimes by comparing it against
a benchmark.
 They analyze and assess their findings and design their
controls accordingly to advance the organization’s
performance.
Effective recruiting
 Nowadays, organizations have realized that effective
recruiting cannot be done without the use of IT.
 Organizations now use job portals on the internet to search
for the best candidates for the position.
 The process has been made effective with the use of the
internet as many people come to know of the offer and
hence increases the probability of hiring efficient
employees.
 Employers can present all necessary information related to
job, careers and personal development of each employee on
portals online.
 HR IT tools not only help hire the best potential but also to
retain it.
Data management and critical
analysis
 Data management becomes easier when IT is used and it
becomes paper-free.
 Many of the monotonous work is no longer manual.
 This increases the efficiency of the work and the
effectiveness of it.
 Organizational performance can lead to the timely success
of the business whether in a stable or an unstable
environment.
 Jobs that do not offer much variety in their performance
and are of a highly repetitive nature are disliked by
employees and eventually results in low retention or
decreased effectiveness.
Data management and critical
analysis
 Employee’s performance data can be critically analyzed
by the HR IT tools more often if it’s online and
becomes readily accessible to everyone.
 For instance, a company has recently developed an HR
IT tool, which has made Passport completely
paperless.
 The tool is further hierarchy sensitive and pings the
manager for approval once it is submitted.
 Thus letting an individual get rid of the hassle of
filling the paperwork.
Inventory management tools and
 Entrepreneurs with business acumen describe that the
performance of an organization can be made more
effective and efficient by customer intimacy,
operational efficiency, and leading edge.
 Customer needs must be met by customization and by
providing outstanding customer instances.
 For this purpose, organizations use HR IT tools to
provide a universal set of products and diversify the
business by providing improved products and services.
Cost-reduction and efficiency
 Considerable benefit can be obtained as various
reports can be made using IT tools.
 Poor performance might be the result of an
inappropriate configuration for the situation or
inconsistency between structure, processes, and
relationships.
 Organizational performance can be increased by
implementing management by objectives and using a
participative style of management through Human
Resource Information Technology tools.
Customer service and Human
Resource Management
 Value can come from providing a reliable service, so
that the customers know that they will receive the
service on time, at the promised time, to a good
standard of performance.
 As organizational change is inevitable, critical success
factors and key performance indicators should be
revised, and relevant Human Resource IT tool must be
devised for the better quality of work.
 Doing good quality work and providing quality results
will increase organizational performance.
Career Development and Human
Capital Management
 The career planning tool is a learning and knowledge-
based system that helps successful businessman around
the world to manage their personal development and
career paths along with those of their employees.
 Performance evaluation and career progression can be a
key motivating factor for the employees to work effectively
and efficiently.
 Performance measurement and reward systems in an
organization establish views of priority i.e. what is
important and what is not so important.
 Thus sound performance evaluation systems HR IT tool is
crucial for the organization.
Capital Management
 The system must be a sound one so that people can rely on
it.
 Rewards systems should be amended so that the rewards to
managers and other employees are based on performance
targets as stored in the HR IT tools.
 Employees should be rewarded for performance based on
the desired behavior and results as per the HR IT tool
database.
 Managers must keep their promises that they have given of
rewards for performance and try to make sure that the
employees believe that the management will keep its
promises.
Capital Management
 One of the major processes of HR is the Human
Resource Development core process.
 This HR tool provides all information about the
employee’s succession planning, evaluation of overall
performance and the review of individual potential
including the employee’s detailed profile.
 It also includes an agreement between the individual
and the supervisor on business targets over a period of
time periodically.
 Thus leading to a continuous development of the
employee’s career.
Capital Management
 The great advantage of this tool is that data once
entered into the system is stored in the database and
can be attained in the future.
 This leads to considerable cost saving as well.
 Recently, Standard Life Group provided HR resource
cost optimization tool to Oracle Human Capital
Management Solutions.
 It is further contributing to the strategic
transformation of the company by building the
empowered workforce.
Capital Management
 Employees need feedback about their performance.
 Employees need to be communicated about their
actual performance and their expected performance.
 In this way, they will know their own performance
level within the organization.
 Bonus must be kept for employees who work overtime
and provide efficient results.
 This HR IT management tool incorporates all such
data.
Capital Management
 According to the survey of 37 companies in Turkey applying IT in
HRM, the employees expressed that their business environment
satisfies them and they work efficiently.
 The survey confirms that these companies use HR IT tools and
should contain all HR processes which will sustain all parts of
HR it means from ”Recruit to Retire” functions within the
company.
 Human Resource IT tools have great organizational effects;
provide better services to line managers, serve as a pipeline
connecting a personal policy and personal processes in all
organization, facilitate personnel management in the company,
provide important data for a strategic personal decision-making
and enable a quick acquiring and analysis of information for HR
assistants and reduce cost labors at performance of personal
activities.
Capital Management
 Globalization makes us realize how IT can contribute to the
fulfillment of business strategy in the frame of Human
Resources management in order to direct the business
towards quality and to reach the competitiveness in the
market.
 Research reveals that information technology sustains
reaching the HR goals moderately and the precise plan of
implementation of HR information system can
significantly support HR strategy in the company to attain
defined key performance indicators (KPI).
 This should mainly contain what has to be achieved. It
means how he HR IT tools can support the KPI and which
kind of HR IT tools should sustain.
 Evaluate how Human resource theory relates to
practice in specific Organizational example comparing
and contrasting this with other possible
Organizational contexts.
Developing Flexibility
at Work-Place (Job Diagnosis)
 Not all jobs are conducive to time or place flexibility.
 However, there can be certain duties that can be done
at alternate times and/or places other than the office.
 Looking at the jobs and breaking them into their
component parts may identify some such jobs that can
be done with time and place flexibility.
 Just like all jobs are not equally conducive to flexibility,
some employees are better candidates for flexibility
than others.
Developing Work Flexibility
 Information technology can enable employees to
remain connected when working remotely and help
teams coordinate actions.
 Home-based Internet, smart phones, project
management software, etc can allow employees to
remain accessible to clients/management and to share
work.
 Before expanding workplace flexibility, you need to
have the proper support systems in place.
Flexible Working
 Tele-working- Or working from home/remotely.
 Job Sharing- Two employees voluntarily sharing
responsibilities of one fulltime job. It could be half days,
alternative days/weeks, etc.
 Staggered hours- When its not strictly a 9 to 5
requirement and some can start at 7, some at 8, some at 9,
etc similarly ending each day accordingly.
 Compressed hours- Could mean four days of 10 hours
instead of five of 8.
 Annualized Hours- When fixed number of working hours
can be completed in any way over an year.
Part-Time &
Temporary Employees
 Temporary employees are hired to assist employers to meet
business demands yet allow the employer to avoid the cost of
hiring a regular employee.
 Sometimes, it is the expectation of the employer that if the
temporary employee is successful, the employer will hire the
temporary employee.
 A temporary employee who demonstrates a good work
ethic, learns quickly, fits the Company culture, regularly lends a
helping hand, and doesn't need a manager to tell her what to do
next, may receive an offer of employment.
 Temporary employees may work part or full-time.
 Such employees are also sometimes referred to as contingent
workers, contract employees, consultants, seasonal workers, etc.
SOME REASONS FOR
IMPLEMENTING “FLEXIBILITY”
 Enhanced Recruitment.
 Improved Performance and Productivity.
 Increased Retention and Reduced Turnover.
 Positive impact on employee commitment.
 Better customer coverage and satisfaction.
 Increased Job Satisfaction.
 Increased Cost Saving.
 Reduction in Absenteeism.
SOME BENEFITS OF HAVING
FLEXIBILITY
 REDUCING STRESS.
 REDUCING NEGATIVE SPILLOVER
 IMPROVED WORK-FAMILY BALANCE
 IMPROVED WORK-LIFE BALANCE
 BETTER PHYSICAL AND MENTAL WELL-BEING

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