Unit -1

What is HRM?
HRM is concerned with the peoples dimension in the organization

Facilitating the competencies and retention of skilled force

Developing management systems that promote commitment Developing practices that foster team work Making employees feel valued and rewarded.

Scope of HRM
Prospects of HRM Nature of HRM

Industrial Relations

HR M
Employee Maintenance

Employee Hiring

Employee & Executive Remuner ation Employee Motivation

Very Vast Covers all major activities in the working life of a worker -from time an individual enters into an organization until he or she leaves

The Nature of the Employment Relationship

Functions
Facilitating the retention of skilled and competent employees Building the competencies by facilitating continuous learning and development Developing practices that foster team work and flexibility Making the employees feel that they are valued and rewarded for their contribution Developing management practices that endanger high commitment Facilitating management of work force diversity and availability of equal opportunities to all.

Functions of HR
MANAGERIAL FUNCTIONS Planning Organizing Directing Controlling OPERATIVE FUNCTIONS Staffing Development Compensation Motivation

Maintenance
Integration Emerging Issues

Operative functions of HR
STAFFING
Job analysis, HRP, Recruitment, Selection, Placement, Induction, Internal Mobility Competency profiling, Training and development, Performance & potential management, Career management, 360 degree feedback Job design, Work scheduling, Job evaluation, Compensation administration, Incentives and benefits

DEVELOPMENT

COMPENSATION & MOTIVATION

Operative functions of HR (contd.)

MAINTENANCE
Health, Safety, Welfare, Social security Employment relations, Grievance, Discipline, Trade unions, Participation, Collective bargaining

INTEGRATION

EMERGING ISSUES

HRIS, HR audit, HR scorecard, International HRM, Workforce Diversity

Objectives of HRM

Societal objectives To be ethically & socially responsible to the needs of the society while minimizing the negative impact of such demands upon the organization Organizational objectives To recognize the role of HRM in bringing about organizational effectiveness Functional objectives To maintain the departments contribution at a level appropriate to the organizations needs Personal objectives To assist employees in achieving their personal goals in a manner that their personal goals enhance the individuals contribution to the organization

HRM and 3 Ps
People core strength of an organization

Any resource can be replaced but not HR Processes evolve over a period of time IT enabled environment facilitates engineering effortlessly Performance the pillars of performance are people and IT Organizational performance in terms of value creation and return on investment

Evolution of HRM in India

Welfare (1920s-1930s) Administration (1930s- 1940s) Employee relations (19401960s) Functional expertise (1970s1980s) Business partner / player (1990s)

History of HRM Industrial revolution-18th -19th Century

Robert Owen 1800 -1828

Practiced reduced working hours, housing facilities, education for workers etc. Worked towards British Factory Act, 1819

Charles Babbage: 1828-1839

British Mathematician Worked on work measurement, cost determination and incentives

Daniel McCallum
Initiated JDs merit promotions

Growth of trade unions Scientific Management-F.W. Taylor

Experiment on machinery ,motion study, piece rate system, standardization of tools, working conditions Principles:

Replacement of rule of thumb Scientific selection & training of wkers Cooperation b/w labor & mgmt. Max output Equal division of responsibility

Industrial Psychology Human relations approach-Hawthorne experiments -1932-Elton Mayo

From PM to HRM
Commodity concept Humans were considered as a commodity Factor of production concept-Mechanistic

Factory system Ppl employed against fixed wages Human were other factor of production People had better wkin conditions than commodity concept.

Paternalistic concept

During trade unions Maintenance of health and workers. Appointment of welfare officer Orgn have protective nature towards employees

Humanistic concept ( social system approach)

Focused upon responsibility of employers to provide facilities for social and psychological satisfaction

Human Resource concept

1950s behavioral sciences Motivation, leadership, grp dynamics & teamwork Value of HR being considered Efforts to integrate objective with HR Mgmt practices like-MBO, QCs etc were used

Partnership concept
Modern view ESOPs

HRD concept
Learning organization, OD, QWL, conducive wk place, Potential appraisals Employees development Enabling employee capabilities Work culture and climate

Why Study HRM?

Taking a look at people is a rewarding experience People possess skills, abilities and aptitudes that offer competitive advantage to any firm No computer can substitute human brain, no machines can run without human intervention & no organization can exist if it cannot serve peoples needs. HRM is a study about the people in the organization-how they are hired, trained, compensated, motivated & maintained.

Post 70s Features of HRM

The collective bargaining role The implementer of legislation role The bureaucratic role The social conscience of business role. A growing performance improvement role

Personnel Versus Human Resource Management

Sometimes means the same things. HRM can mean a particular philosophy

Traditional HR Functions

Differences between PM & HRM

Dimension 1. Employment Contract 2. Rules 3. Behaviour referent Human Resources Management Careful delineation of written Aim to go beyond contract contracts Importance of guiding clear Can do outlook, impatience rules with rule Norms/customs/practices Values/mission Personnel Management

4.
5.

Managerial task
Management Role

Monitoring
Transactional Indirect Reach temporary truce Controlled access to courses Personnel procedures

Nurturing
Transformational leadership Direct Manage climate & culture Learning organization Wide ranging cultural, structural & personnel strategies Mutuality of interests

6. Communication 7. 8. 9. Conflict handling T&D Focus of attention for interventions

10. Shared interests

Interests of the org. are

Distinguishing Between HRM and PM

Points of Difference between Personnel and IR Practices and HRM Practices

Dimension Beliefs and assumptions 1. Contract Careful delineation of written contracts Importance of devising clear rules/mutuality Aim to go 'beyond contract' Personnel/IR HRM

2. Rules

'Can-do' outlook; impatience with 'rule'

3. Guide to management action

Procedures

'Business need'

4. Behaviour referent

Norms/custom and practice

Values/mission

Managerial task vis a vis labour 6. Nature of relations 7. Conflict

Monitoring

Nurturing

Pluralist Institutionalised

Unitarist De-emphasised

Strategic
Personnel /IR HRM 8. Key relations Labour management Customer

9. Initiatives

Piecemeal

Integrated

10.Corporate plan

Marginal to

Central to

11. Speed of decision

Slow

Fast

Line management
Personnel / IR 12. Management role Transactional HRM Transformational leadership

13. Key managers

Personnel/IR specialists General/business/line managers Indirect High (for example 'parity' an issue) Negotiation Direct Low (for example 'parity' not an issue) Facilitation

14. Communication 15. Standardisation

16. Prized management skills

Key Levers
Personnel / IR
17. Selection 18. Pay 19. Conditions 20. Labour management 21. Thrust of relations with stewards 22. Job categories and grades 23. Communication 24. Job design 25. Conflict handling 26. Training and development 27. Foci of attention for interventions Separate, marginal task Job evaluation (fixed grades) Separately negotiated Collective bargaining contracts Regularised through facilities and training Many Restricted flow Division of labour Reach temporary truces Controlled access to courses Personnel procedures

HRM
Integrated, key task Performance related Harmonisation Towards individual contracts Marginalised (with exception of some bargaining for change models) Few Increased flow Teamwork Manage climate and culture Learning companies Wide ranging cultural, structural and personnel strategies

A Model of the Shift to HRM

Hard HRM

The 'hard' approach rooted in the manpower planning approach is concerned with aligning human resource strategy with business strategy

Soft HRM

The 'soft' approach is rooted in the human relations school, with concern for workers' outcomes and encourages commitment to the organisation by focussing on workers' concerns.

The Human Resource System

Strategic Management and Environmental Pressures

The Human Resource Cycle

The Context of HRM

The HR Functions

Human Resource (Personnel) Management

Resources defined Means of supplying a want or a stock that can be drawn upon. Resources Money, Machines, Materials and Human. To manage is to organise the use of resources towards the objectives of an enterprise.

35

Human Resource (Personnel) Management Contd.

All the resources can be managed through the Human Resource and Human Resource can be managed only through Human Resource. Human Resource is the only resource which has a Will to Do component along with the Ability component.

36

Human Resource Management (HRM) Aims At AIR

Attracting Inspiring and Retaining
effective and efficient employees to develop a highly competent and committed smoothly functioning workforce.

37

Human Resource (Personnel) Management Contd.

Traditional Definition Human resource management is the moulding of the human resources in such a fashion that the goals of the organization are met and at the same time the need satisfaction of all the employees at all the levels is attained to the highest possible degree.

Traditional HRM Functions

1.
2.

Policy and Planning

Procurement /Acquisition / Employment Selection) (Recruitment and

3.

Development
Performance)

(Skill

enhancement

for

appropriate

Work

4.

Compensation (Financial and Non Financial rewards)

5.

Integration (Harmony between individual and organizational

interests) Maintenance (Retention of able and willing employees)

5.

6.

Separation (Parting of ways in the most amicable manner)

Changing Role of HRM

1900s 1940s 1960s -

Employee Advocate
Passive Administrator Reactive Provider / Compliance Monitor

1980s 1990s -

Reactive Partner / Specialist Service Provider

Proactive Partner / Business Manager

2000s -

Change Agent / Internal Consultant

Human Resource (Personnel) Management Contd.

Modern Definition Human Resource (Personnel) Management is the planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance, and separation of human resources to the end that individual, organizational and societal objectives are accomplished. - Edwin B. Flippo

Human Resource Management Contd.

I. II.

Statutory HRM Compliance of Legal Framework Voluntary HRM Guidelines for Carrying Out Management

Human

Resource

42

HRM Today

We must understand that corporations are not in the business of human resource development. They are in their own business, but human resource development is an important tool which, unfortunately, is being used in a limited sense. The corporate mission has not been attached to it. Actually, human resources must become the business of everyone in the organization. - T. V. Rao Equal access to all resources is forcing organisations to rely on their people as the only source of competitive advantage today

43

HRM Today Contd.

Human resource strategy involves a central philosophy of the way the people in the organization would be managed and the translation of this into human resource policies and practices. It requires human resource policies and practices to be integrated so that they make a coherent whole and also that this whole is integrated with the business or organizational strategy.

44

HUMAN CAPITAL MANAGEMENT HCM refers to the task of measuring the cause and effect relationship of various HR programs and policies on the bottom line of the organization. It seeks to obtain additional productivity. What is Human Capital? Think of it as quality of labor Similarity to physical capital It is productive It is produced Investment Role of savings.importance of credit constraints It earns returns to the investment It is subject to depreciation

Elements of human capital

Sumantra Ghoshal has given the following three categories: Intellectual Capital: Stock of knowledge, skills & expertise Social Capital: Structure, quality & flexibility of human relationships Emotional Capital

Intellectual Capital

Social Capital

Emotional Capital

Specialized knowledge

Network of relationships Sociability

Self-confidence

Skills and expertise

Ambition and courage

Cognitive complexity

Trust-worthiness

Risk taking ability

Learning capacity

Resilience

47

Repositioning HRM
Understanding key business drivers
Driving transition by managing change

Aligning HR as a strategic business partner

Envisioning, enabling and encouraging creativity and innovation Leading through personal credibility by value based on time delivery of promises

Competitive instinct and intelligence

48

Competitive Challenges Influencing HRM

Three competitive challenges that companies now face will increase the importance of human resource management practices: 1. The challenge of sustainability 2. The global challenge and 3. Technology challenge

The Sustainability Challenge

Traditionally, sustainability has been viewed as one aspect of corporate social responsibility related to the impact of the business on the environment. However, we take a broader view of sustainability. For our purposes, sustainability refers to the ability of a company to survive and succeed in a dynamic competitive environment. Company success is based on how well the company meets the needs of its stakeholders.

50

The Global Challenge

Companies are finding that to survive they must compete in international markets as well as fend off foreign corporations attempts to gain ground in the United States. To meet these challenges, U.S. businesses must develop global markets, use their practices to improve global competitiveness and better prepare employees for global assignments.

51

The Technology Challenge

The Internet has created a new business modelecommerce, in which business transactions and relationships can be conducted electronically. The Internet is a global collection of computer networks that allow users to exchange data and information.

52

Examples of How HRM Practices Can Help Companies Meet Competitive Challenges Global Challenge Sustainability Challenge

o o o
o o o

HRM Practices HRM strategy is matched to business o Continuous learning environment is strategy. created. Knowledge is shared. o Discipline system is progressive. Work is performed by teams. o Customer satisfaction and quality are Pay systems reward skills and evaluated in the performance accomplishments. management system. Selection system is job related and legal. o Skills and values of a diverse workforce Flexibility in which and when work is are valued and used. performed. o Technology is used to reduce the time Work attitudes of employees are for administrative tasks and to improve monitored. HR efficiency and effectiveness.

Technology Challenge

53

Managing the Human Resource Environment

Managing internal and external environmental factors allows employees to make the greatest possible contribution to company productivity and competitiveness. Creating a positive environment for human resources involves: o Linking HRM practices to the companys business objectives that is, strategic human resource management. o Ensuring that HRM practices comply with federal, state and local laws. o Designing work that motivates and satisfies the employee as well as maximizes customer service, quality and productivity.

54

Acquiring and Preparing Human Resources

Contd.

This area of human resource management deals with: o Identifying human resource requirementsthat is, human resource planning, recruiting employees, and selecting employees. o Training employees to have the skills needed to perform their jobs.
Compensating Human Resources Contd.

This area of human resource management includes: o Creating pay systems. o Rewarding employee contributions. o Providing employees with benefits.

55

Assessment and Development of Human Resources Contd. This area of human resource management addresses: o Measuring employees performance. o Preparing employees for future work roles and identifying employees work interests, goals, values and other career issues. o Creating an employment relationship and work environment that benefits both the company and the employee.

Strategic Role for HR

For HR to play a strategic role it must focus on the longer-term implications of HR issues. How changing workforce demographics and workforce shortages will affect the organization and what means will be used to address the shortages over time, are examples of the strategic role. A strategic role for HR is important, but it requires a high level of professional and business knowledge. The HR Perspective shows that the transition to a strategic role is not without difficulties.

57

Enhancing Organizational Performance

Organizational performance can be seen in how effectively the products or services of the organization are delivered to customers. The human resources in organisations are designers, producers and deliverers of those services. Therefore, one goal of HR management is to establish activities that contribute to superior organizational performance. Only by doing so can HR professionals justify the claim that they contribute to the strategic success of organisations.
58

Involvement in Strategic Planning

Compensation , labor markets HRP Decision making on mergers and acquisitionsLayoffs Redesigning BPR, TQM

59

Strategic HRM
Strategic HRM is the linking of HRM with strategic goals and objectives in order to improve business performance and develop an organizational culture that fosters innovation and flexibility.

60

Organisational Planning Process

Strategic Plan (5 yrs)

Human Resource Development Challenges

Business Plan (2-3 yrs)

Succession Planning
Individual Review (Ideal Case)

Branch Plan (1 yr)

Professional Development And Training

Everybody Needs

Team Plan (1 yr)

Individual Needs

Individual Plan (1 yr)

Review
Key Tasks Development Plan Review

Induction / Orientation

Organisational and Cultural Behaviours

Job-Related Skills and Knowledge

Branch Needs

Team Needs

Recruitment and Selection

Organisational and Cultural Definitions Assessment (Survey?)

Measuring HRs Contribution

The HR Scorecard

Shows the quantitative standards, or metrics the firm uses to measure HR activities.

Measures the employee behaviors resulting from these activities.

Measures the strategically relevant organizational outcomes of those employee behaviors.

162

The New HR Manager

New Proficiencies

HR proficiencies Business proficiencies Leadership proficiencies Learning proficiencies

163

EMOTIONAL INTELLIGENCE

Emotional Intelligence (EQ) The extent to which people are self-aware, can manage their emotions, can motivate themselves, express empathy, and possess social skills Persons with high EQs may perform better on jobs that require interaction and directing others. EQ can be developed and is not biologically based.

The ability of an organization to perform depends on the relationships of the people involved, which ultimately relates to the degree of emotional intelligence of its employees and leaders. Leaders possessing Emotional Intelligence will create an effective work climate that will further develop emotional intelligence at the subordinate level. The higher the level of a jobs complexity and authority, the greater the impact of high Emotional Intelligence.

The ability of an organization to perform depends on the relationships of the people involved, which ultimately relates to the degree of emotional intelligence of its employees and leaders. Egon Zehnder International analyzed 515 senior executives. Those strong in EQ were more likely to succeed than those who were strongest in relevant experience or IQ. EQ is a stronger predictor of success than experience or high IQ. Study included execs from Latin America, Germany, Japan with same results across cultures.

FOUR QUADRANT MODEL FOR EMOTIONAL INTELLIGENCE

Self Aware-ness Quadrant 1 Emotional Self Awareness

Others Quadrant 3 Social Awareness

Actions

Quadrant 2 Emotional Self Control

Quadrant 4 Social Skills

FOUR QUADRANT MODEL (SCHEMATIC)

Self Aware-ness Emotional Self Awareness Emotional awareness Self image Self expression

Others Social Awareness Social awareness Impact Empathy

Actions

Emotional Self Control Resilience Self Control

Social Skills Communication, Active Listening Assertion

Expression
Motivation

Conflict management
Interpersonal skills, trust and intimacy

MENTORING --- DEFINITIONS

Mentoring is a term used to help, advise and guide employees through the complexities of the business.
Mentoring is a mutual learning partnership in which individuals assist each other with personal and career development through coaching, role modeling counseling, sharing knowledge and providing emotional support. Offline help from one person to another in making significant transitions in knowledge, work or thinking.

MENTORING --- DEFINITIONS

Creating possibilities and providing guidance and support to others in a relationship of trust; it includes facilitating, bringing visions to life and enabling people to achieve. A mentor is that person who achieves a one-to-one developmental relationship with a learner; and one whom the learner identifies as having enabled personal growth to take place.

DIMENSIONS OF MENTORING
INFLUENCE

COACH

(Directive) GUARDIAN

INTELLECTUAL NEED

EMOTIONAL NEED

(Challenging)

(Nurturing)

NETWORKER/ FACILITATOR

COUNSELLOR (Non-Directive)
INFLUENCE

A MENTOR & A COACH: THE DIFFERENCE

Coaching earlier seen as a remedial activity; mentoring as positive, developmental intervention Coaching is seen more skill related, with specific capabilitieslinked outcomes Line managers often called upon to coach. Mentoring positioned much more around the whole person and the big picture Line manager, due to performance management responsibility, not seen as appropriate to take a mentoring role. Coaching normally short term; Mentoring is long term. Coaching addresses specific issues; Mentoring --- larger issues Coaching (the How); Mentoring (the Why)

POSSIBLE FORMS OF MENTORING HELP:

A.

Specific learning functions:

- Learning technical skills and knowledge - Learning current jobs

- Learning organizational culture

- Learning organizational policies - Being prepared for future jobs / promotions

POSSIBLE FORMS OF MENTORING HELP:

B.

General Career Development functions:

- Obtaining challenging tasks - Obtaining protection

- Obtaining sponsorship, recommendations

- Obtaining endorsement for acts / views - Making career moves - Getting achievements showcased - Clarifying work / Career goals

POSSIBLE FORMS OF MENTORING HELP:

C. Personal help functions:
- Obtaining counseling - Obtaining moral support / encouragement

- Obtaining a Role Model

- Obtaining praise - Obtaining a confidante - Achieving friendship - Achieving trust

ESOP

An employee stock ownership plan (ESOP) is a way in which employees of a company can own a share of the company they work for. There are different ways in which employees can receive stocks and shares of their company. Employees can receive them as a bonus, buy them directly from the company, or receive them through an ESOP. In the United States, ESOPs are a very common form of employee ownership. They have been growing in strength since about 1974. The main purpose of an ESOP is to reward and motivate employees. They are also used to provide a market for departing owners of successful companies. In most cases, an ESOP is given to an employee, rather than purchased by an employee.

An ESOP is similar to a profit-sharing plan. A trust fund, contributes either new shares of its own stocks or cash to buy existing shares. Another version of the ESOP borrows money in order to buy existing or new shares. repay the loan. Shares in the trust are generally allocated to individual employee accounts. When employees leave the company, they receives their share options, and the company must be able to buy back these options. They must buy them back at their full market value. In private companies, employees are able to vote their shares on major issues such as relocation or closure. In public companies, employees can vote on all issues.

FLEXI-TIME It is a programme that allows flexible entering and leaving times for employees. Advantages are: Increase in productivity Decline the tardiness & absenteeism Reduction in employee turnover Increase in morale and work consciousness rather than time consciousness Improve Quality

KAIZEN TECHNIQUE

Kaizen- defines the managements role in continuously encouraging and implementing small improvements in the individual & organization. Break the complex process into sub-processes and then improve the sub-processes. Continuous improvements in small increments make the process more efficient ,controllable and adaptable. Does not rely on more expense, or sophisticated equipment and techniques.

What is KAIZEN?
(Original Definition)

= KAI = CHANGE = ZEN = GOOD (FOR THE BETTER)

= KAIZEN = CONTINUAL IMPROVEMENT

GEM = Real; BA = Place

What really is KAIZEN?

Extracting money by eliminating waste from process is Kaizen. Kaizen is process improvement: which is significant (large) done in strategically important areas speedily in sustainable manner using Scientific data; not opinion. using Systematic Roadmap, Tools & Techniques under KAIZEN Paradigms resulting in Human Development

QUALITY IS .THE QUALIFIER!

Doing it right first time and all the time. This boosts Customer satisfaction immensely and increases efficiency of the Business operations.

Clearing the bar (ie. Specification or Standard stipulated) Excellence that is better than a minimum standard.

QUALITY - DEFINITIONS

Quality is excellence that is better than a minimum standard. It is conformance to standards and fitness of purpose ISO 9000:2000 definition of qualityIt is the degree to which a set of inherent characteristics fulfills requirements. Quality is fitness for use of the product Joseph Juran. TQM philosophy and guiding principles continuously improve the Organisation processes and result in customer satisfaction.

THE 9 DIMENSIONS OF QUALITY

Performance Features Conformance

---------------------------- Reliability Durability Service ---------------------------- Response- of Dealer/ Mfgr. to Customer Aesthetics of product Reputation- of Mfgr./Dealer
Service Cost Performance

Features

TQM SIX BASIC CONCEPTS

Management commitment to TQM principles and methods & long term Quality plans for the Organisation

Focus on customers internal & external

Quality at all levels of the work force. Continuous improvement of the production/business process. Treating suppliers as partners Establish performance measures for the processes.

EFFECTS OF POOR QUALITY

Low customer satisfaction
Low productivity, sales & profit Low morale of workforce More re-work, material & labor costs High inspection costs Delay in shipping High repair costs Higher inventory costs Greater waste of material

BENEFITS OF QUALITY
Higher customer satisfaction Reliable products/services Better efficiency of operations More productivity & profit

Better morale of work force

Less wastage costs Less Inspection costs Improved process More market share Spread of happiness & prosperity Better quality of life for all.

ROLE OF TQM LEADERS

All are responsible for quality improvement especially the senior management & CEOs Senior management must practice MBWA Ensure that the teams decision is in harmony with the quality statements of the organization Senior TQM leaders must read TQM literature and attend conferences to be aware of TQM tools and methods Senior managers must take part in award and recognition ceremonies for celebrating the quality successes of the organization Coaching others and teaching in TQM seminars Senior managers must liaise with internal ,external and suppliers through visits, focus groups, surveys They must live and communicate TQM.

TQM IMPLEMENTATION
Begins with Sr. Managers and CEOs
Timing of the implementation process Formation of Quality council

Union leaders must be involved with TQM plans implementation

Everyone in the organization needs to be trained in quality awareness and problem solving Quality council decides QIP projects.

 What is Six Sigma?

Sigma is a measure of goodness: the capability of a process to produce perfect work. A defect is any mistake that results in customer dissatisfaction. Sigma indicates how often defects are likely to occur. The higher the sigma level, the lower the defect rate. The lower the defect rate, the higher the quality.

 A metric that indicates how well a process is performing.

Measures the capability of the process to perform defect-free work.

Also known as z, it is based on standard deviation for continuous data.

For discrete data it is calculated from DPMO.

SIX SIGMA METHOD

Six sigma method is a TQM process that uses process capability analysis as a means of measuring progress. The smaller the standard deviation, the lesser the deviation of the product characteristic from its mean value. If the process has a normal distribution, the upper and lower specification limits are +/- 6 sigma from the mean u. The non-conformance is 2ppb and the process capability Cp is 2.0(1.33 Cp is de facto standard.) A normal process with mean shifted +/-1.5 sigma from the target value desired has non-conformance of 3.4ppm and process capability index Cpk= 1.5, with 1.0 being the de facto standard.

Six steps to Six Sigma

Product

Customer

Need

Process

MistakeProof

Ensure

Possible Applications

Manufactur Human Resour ing ce

Customer Service

Engineering Support

Order Fulfillment

Finance

Reengineering
Benchmarking

Problem solving

Team leader/Facilitator

Statistical Tool