Module-1

Strategic role of HRM & subsystems

 Chapter-1

Introduction to Human Resource Management

 Objectives of this Chapter
 Overview of what is HRM

 Why it is important to all Managers

 HRM activities such as hiring, training, Compensating,

appraising & developing employees are part of every
manager’s job.

 Manager’s HRM jobs

 Global & competitive trends affecting HRM

 How managers use modern HRM methods to create high-

performance companies & work system.
 “If you want 10 days of happiness, grow grain.
If you want 10 years of happiness, grow a tree.
If you want 100 years of happiness, grow people.”
 What is human resource management?

 Most experts agree that there are five basic functions all
manager performs

 Planning
 Organizing
 Staffing
 Leading
 Controlling
 In total, these functions represent the Management process.
 Planning:- Establishing goals & standards; developing rules &
procedures; developing plans & forecasting

 Organizing:- Giving each subordinate a specific task;

establishing departments; delegating authority to subordinates;
establishing channel of authority & communication; coordinating
the work of subordinates.

 Staffing:- Determine what type of people should be hired;

recruiting, selecting, setting performance standards,
compensating employees, evaluating performance, counseling
employees, training & developing employees.

 Leading:- Getting others to get the job done, motivating

employees.
 Controlling:- Setting standards such as sales quotas., quality
standards, or production levels, checking to see how actual
performance compares with these standards , taking corrective
action as needed.
 What is human resource management?

 The effective use of people to achieve both

organizational and individual goals

 The effective recruitment, selection,

development, compensation, and utilization
of human resources by organizations
 Definition of HRM

 The Policies & practices involved in carrying out the

“People” or hr aspects of a management position
including recruiting, screening , training, rewarding &
appraising
•Human (Homo-sapiens – Social
Animal)

•Resources (Human, Physical,

Financial, Technical, Informational
etc)

Management (Function of
Planning, Organizing, Leading ,
Controlling of organizational
resources to accomplish goals
efficiently and effectively)
 Human Resource Management: Objectives

 To help the organization reach its goals.

 To ensure effective utilization and maximum development of human

resources.

 To ensure respect for human beings.

 To identify and satisfy the needs of individuals.

 To ensure reconciliation of individual goals with those of the organization.

 To achieve and maintain high morale among employees.

 To provide the organization with well-trained and well-motivated employees.

 To increase to the fullest the employee's job satisfaction and self-

actualization.

 To develop and maintain a quality of work life.

 To be ethically and socially responsive to the needs of society.

 To develop overall personality of each employee in its multidimensional

aspect.

 To enhance employee's capabilities to perform the present job.

 To inculcate the sense of team spirit, team work and inter-team

collaboration
 Functions of HRM

 Basic functions that all managers perform: planning, organizing,

staffing, leading, and controlling.

 HR management involves the policies and practices needed to

carry out the staffing (or people) function of management.

 HRM department regardless of the organization’s size must

perform following human resource management functions…
 Conducting Job Analysis
 Planning labor needs & recruiting job candidates
 Selecting job Candidates
 Orienting & training new employees
 Managing wages & Salaries ( Compensating employees)
 Providing incentives & benefits
 Appraising performance
 Communicating ( interviewing, counseling, disciplining)
 Training & developing
 Building employees commitment
 And what a manager should know about

 Employment Law
 Equal opportunity
 Employee health & Safety
 Handling grievances & labor relations
 Growing Importance of HRM
 The success of organizations increasingly depends on people-embodied
know-how- the knowledge, skill, and abilities imbedded in an organization's
members.

 This knowledge base is the foundation of an organization' core

competencies (integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to customers).

 HRM plays important role in creating organizations and helping them

survive. Our world is an organizational world. We are surrounded by
organizations and we participate in them as members, employees,
customers, and clients.

 Most of our life is spent in organization, and they supply the goods and
services on which we depend to live.

 Organizations on the other hand depend on people, and without people,

they would disappear.
 Why are we concerned with HRM?, Why is HRM
important to all Managers.

1. Helps you get results - through others.

– Different managerial techniques help mangers to direct the

performance of employees in desirable direction in order to achieve
the organizational objectives.

– Through the efforts of others working in an organization, managers get

things done that require effective human resource management.

2. Helps you avoid common personnel mistakes

– Qualified HR mangers utilize organization resources in such a way

that helps to avoid common personnel mistakes like the following…
 Hiring the wrong person for the job
 Experiencing high turnover
 Finding employees not doing their best
 Having your company taken to court because of your
discriminatory actions
 Having your company cited under federal occupational safety
laws for unsafe practices
 Allowing a lack of training to undermine your department’s
effectiveness
 Committing any unfair labor practices
3. Helps you to gain Competitive Advantage

 Among all the resources possessed by the organizations it is only

Manpower or the Human resources that create the real difference.

 Because all organizations can have the same technology, they can possess
same type of financial resources, same sort of raw material can be used to
produce the goods and services but the organizational source that can really
create the difference is work force of the organization.

 Therefore they are the main sources of innovation creativity in the

organizations that can be used as a competitive advantage.

 In today’s competitive environment, these are the people which can create
competitive advantageous for the organizations.
 PERSONNEL VS HUMAN RESOURCES MANAGEMENT

Personnel Management Human Resources

Management

1) Personnel means persons Human Resources management is

employed. Personnel management the management of employees’
is the management of people, skills knowledge, abilities, talents,
employed aptitudes, creative abilities etc.

2) Employee in personnel Employee in human

management is mostly treated as an resource management is treated not
economic man as his services are only as economic man but also
exchanged for wage / salary. as social and psychological man.
Thus, the complete man is viewed
under this approach.
3) Employee is viewed as a Employee is treated as a resource
commodity or tool or equipment
which can be purchased.
4) Employees are treated as cost 4) Employees are treated as profit
centre and therefore management centre and therefore, invests capital
controls the cost of labour for human resource development
and future utility
5) Employees are used mostly for Employees are used for the multiple
the organizational benefit. benefits of the organisation,
employees and their family
members
6) Personnel function is treated as Human resources management is a
only an Auxiliary function. Strategic Management function
 Scope of HRM

 The scope of HRM is very wide:

1.Personnel aspect- This is concerned with manpower

planning, recruitment, selection, placement, transfer, promotion,
training and development, layoff and remuneration, incentives,
productivity etc.

2. Welfare aspect- It deals with working conditions and

amenities such as canteens, rest and lunch rooms, housing,
transport, medical assistance, education, health and safety,
recreation facilities, etc.

3. Industrial relations aspect- This covers union-management

relations, joint consultation, collective bargaining, grievance and
disciplinary procedures, settlement of disputes, etc.
 What motivates employees?

Rank

 Good wages 1
 Good working conditions 4
 Job security 2
 Full appreciation of work that is done 5
 Tactful disciplining 8
 Employer loyalty to employees 7
 Interesting work 3
 Promotion and growth in the organization 6
(Karl and Sutton, 1996)
 Challenges/Issues of Managing HR in present era

 Following are the main issues that are faced by the

mangers to manage the workforce of today’s
organization for achievement of objectives.

1) To Attract People
People will be interested to join any organization if it is providing
them quality working environment, attractive benefit and
opportunities to excel in future.

Keeping in view the opportunities in the market, the first issues

will be to attract good people for your organization.
2) To Develop People
 Development is related to provide the opportunities for training
and development to match the skills to job in particular areas.

 It requires careful need assessment for training and selecting

effective training methods and tools.

 After attracting/selecting, continuous development of workforce

of the organization leads towards development of the
organization.

 So that they will start playing their important role in the

organization.
3) To Motivate

 Motivation means to influence performance of others and to

redirect the efforts in desirable direction by using different
motivational tools that can help in fulfilling the mission of
organization.

 Third important issues/concern will be to keep your workforce

motivated so that they should keep on delivering effectively.

4) To Keep Talented People

 This is related to retention of workforce in organization and to

take steps that can prevent undesirable detachments of
talented an motivated workers from the organization.
 Line & Staff Aspects of HRM

 All managers are, in a sense, hr managers, since they

get involved in activities likes recruiting, interviewing,
selecting & training.

 Yet most firms also have HR depts. With their own top
managers.

 How do the duties of this HR manager & his or her

staff relate to “line” managers’ hr duties.
 Authority
 Authority is the right to make decisions, to direct the
work of others, and to give orders.

 Authority refers to the rights inherent in a managerial

position to give orders and expect the orders to be
obeyed.
 Line Authority :- gives managers the right to issue orders to
other managers or employees. It creates a superior-subordinate
relationship.

 Staff Authority:- Staff authority gives the manager the right

(authority) to advise other managers or employees.

 Line Manager:- A manager who is authorized to direct the work

of subordinates & is responsible for accomplishing the
organization tasks.

 Staff Manager :- A manager who assists & advises line

managers
 The early management writers distinguished between two forms
of authority.

a. Line Authority
b. Staff Authority
c. Functional Authority

 Let’s have brief view about the different types of authorities.

a. Line Authority
 Line authority entitles a manager to direct the work of an
employee.

 It is the employer-employee authority relationship that extends

from top to bottom.
 A line manager directs the work of employees and makes
certain decisions without consulting anyone.

 Sometimes the term line is used to differentiate line managers

from staff managers.

 Line emphasizes managers whose organizational function

contributes directly to the achievement of organizational
objectives.

b Staff Mangers and Staff Authority

 Staff managers have staff authority. A manager's function is

classified as line or staff based on the organization's objectives.

 As organizations get larger and more complex, line managers

find that they do not have the time, expertise, or resources to
get their jobs done effectively.
 They create staff authority functions to support, assist, advice,
and generally reduce some of the informational burdens they
have.

c. Functional control
 The authority exerted by a personnel manager as a coordinator
of personnel activities.

 Here the manager acts as “the right arm of the top executive.”
 Line versus Staff Authority

1. Line VS Staff Authority – Authority is the right to

make decisions, to direct the work of others, and to
give orders.
Line managers are authorized to direct the work of
subordinates.
Staff managers are authorized to assist and advise
line managers in accomplishing their basic goals. HR
managers are generally staff managers.
 Line Managers’ HRM Responsibilities

1. Placement
2. Orientation
3. Training
4. Improving job performance
5. Gaining creative cooperation
6. Interpreting policies and procedures
7. Controlling labor costs
8. Developing employee abilities
9. Creating and maintaining departmental morale
10. Protecting employees’ health and physical condition
 Responsibilities Of Staff Managers

 Staff managers assist and advise line managers in

accomplishing these basic goals.

 They do, however, need to work in partnership with each other

to be successful.

 Some examples of the HR responsibilities of staff managers

include assistance in hiring, evaluating, rewarding, counseling,
promoting, and firing of employees, and the administering of
various benefits programs.
 Cooperative line and staff hr management:

 In recruiting and hiring, it’s generally the line manager’s

responsibility to specify the qualifications employees need to fill
specific positions.

 Then the HR staff takes over.

 They develop sources of qualified applicants and conduct initial

screening interviews. They administer the appropriate test.

 Then they refer the best applicants to the supervisor (line

manager), who interviews and selects the ones he/she wants.
 The Changing Envt. of HRM

 Changes are occurring today that are requiring HR managers to

play an increasingly central role in managing companies.

 These changes or trends include

 Globalization Trends
 Changes in the nature of work
 Technology
1. Globalization Trends

 The tendency of firms to extend their sales, ownership, and/or

manufacturing to new markets abroad.

 Sony, Apple, Nike & Mercedes Benz are some firms that
market all over the World.

 Indian firms like Infosys, Wipro, TCS & Satyam serve

customers around the world.

 Tata Steel & Mittal Steel have acquired steel plants around
the world

 Companies like GE, Dell & Google have located back office
support operations in India & other countries.
 Companies expand abroad for several reasons

 Sales Expansion is one e.g.:- Google recently expanded in

china.

 Firms also go abroad for other reasons

 Some manufacturers seek new foreign products & service to

sell, & to cut labour costs

 Globalization’s Implications

 More globalization means more competition, & more

competition means more pressure to be “world class”- to lower
costs to make emps more productive, & to do things better &
less expensively.
 Because of this, globalization brings benefits & threats. For
consumer it means lower prices & higher quality, but for emps
to work harder, & perhaps having less secure jobs

 Job Outsourcing

 Both workers & companies therefore have to work harder &

smarter than they did without globalization.
2. Technological Trends

 Eg:- Indian Railways, the largest railway system in the world

has provided computerized ticket booking facility to
passengers.

 Eg:- Air Deccan, Kingfisher

3. Trends in the Nature of Work

 High-Tech Jobs
 Service Jobs
 Knowledge Work & Human Capital
 The Changing Role of HRM

 With these trends, the hr manager’s job has grown broader &
more strategic overtimes.

 In the earliest firms, “Personnel” first took over hiring & firing
from supervisors, ran the payroll dept, & administered benefits
plans.

 As technology in areas like testing & interviewing began to

emerge, the personnel dept began to play an expanded role in
emp selection, training & promotion.

 Today Globalization, technological & nature of wok trends mean

that hr managers have taken on several new responsibilities.
 The first is that employers expect their hr functions to be more
strategic.

 Initially, the personnel depts. Were involved more in welfare

activities, & maintaining Industrial Peace.

 The focus on HRD emerged during 1985-1995, after IIM amd,

professors popularized the HRD concept in the Indian Industry.

 With the development of the knowledge industry & the resulting

high demand for people, the HR function started to take a
strategic focus.
1. Strategic HRM

 SHRM is part of strategic planning.

 Strategy is the company’s long term plan for how it will

balance its internal strengths & weaknesses with its external
opportunities & threats to maintain a competitive advantage.

 Strategic plan is the company’s plan for how it will match its
internal strengths & weaknesses with external opportunities &
threats in order to maintain a competitive advantage.

 SHRM means formulating & executing hr policies & practices

that produce the emp competencies & the behaviors the
company needs to achieve its strategic aims.
2. Creating High Performance Work Systems

 It focus on Productivity & Performance

 They have to focus on Performance

1. Managing with Technology

2. Effective HR Practices
3. High Performance Work System
1. Managing with Technology

1. Self Service e.g.:- Dell

2. Call Centers
3. Productivity Improvement
4. Outsourcing e.g.:- ma Foi Management Consultant

2. Effective HR Practices

1. Well trained emps perform better than untrained ones

2. Safe work place produce fewer lost-time accidents
e.g. – Toyota they are having world class training & plant safety programs
3. High Performance Work System

A high Performance work system is an integrated set of hrm policies & practices
that together produce superior emp performance.
– Employment security
– Selective hiring
– Extensive training
– Self-managed teams/decentralized decision making
– Information sharing
– Contingent (pay-for-performance) rewards
– Measurement of management practices
– Emphasis on high-quality work

– Benefits of a High-Performance Work System (HPWS)

 Generate more job applicants

 Screen candidates more effectively
 Provide more and better training
 Link pay more explicitly to performance
 Provide a safer work environment
 Produce more qualified applicants per position
 Hiring based on validated selection tests
 Provide more hours of training for new employees
 Conduct more performance appraisals
 THE HR MANAGER’S PROFICIENCIES

 New Proficiencies

– HR proficiencies
– Business proficiencies
– Leadership proficiencies
– Learning proficiencies
 HR Proficiencies:- represent traditional knowledge & skills in
areas such as employee selection, training & compensation

 Business Proficiencies:- reflect hr professionals new

strategic role

 Leadership Proficiencies:- They need ability to work with &

lead management groups, & to drive the changes required.

 Learning Proficiencies:- He or she must have the ability to

learn new technology & apply it
 Managing within the Law
– Equal employment laws
– Occupational safety and health laws
– Labor laws

 Managing Ethics
– Ethical Things
 Questions

1. Define HRM. Objectives & Functions & Scope of HRM

2. Difference between Personnel Mgmt & HRM
3. Explain the growing importance of HRM in today’s envt.
4. Illustrate the HR Management responsibilities of line & staff
managers
5. Why it is imp for companies today to make their hr into a
competitive advantage? Explain how HR can contribute to
doing this.
6. Explain the changing role of HRM in today’s envt.