Session 1

Human Resources Management I

Aradhna Malik (PhD)
Assistant Professor
VGSOM, IIT Kharagpur

Sources
Briscoe, D.R., Schuler, R. S. & Claus, L. (2009).
International human resource management:
Policies and practices for multinational enterprises.
NY: Routledge.
Cascio, W. F. (2003). Managing human resources:
Productivity, quality of work life, profits. New Delhi:
Tata McGraw Hill.
Gomez-Mejia, L. R., Balkin, D. B. & Cardy, R. L.
(2012). Managing human resources (7th Ed.). New
Delhi: PHI Ltd.
Pande, S. & Basak, S. (2012). Human resources
management: Text and cases. New Delhi: Pearson.

Basic concepts (Gomez-Mejia, Balkin & Cardy, 2012)

Human resources (HR): People who work in an
organization
Discuss whether the above should be called
personnel or human resources and why?
Manager: A person who is in charge of others
and is responsible for the timely and correct
execution of actions that promote his or her units
success
Line employee: Employee involved directly in
producing the companys good(s) or delivering
the service(s)
Staff employee: An employee who supports line
employees

Evolution of HRM (Pande & Basak, 2012)

1800 BC: Minimum wage rate and incentive wage plan Babylonian
code of Hammurabi.
300 BC: Kautilyas Arthashastra
India:
1920s: interest in management as a discipline
1931: Government intervening to protect the interests of workers through
the appointment of labour welfare officers.
1948: Factories Act: Appointment of labour welfare officers compulsory.
1970s: Shift of focus from concern for the welfare of people to concern
for the performance of organizations.
1980: National Institute of Labour Management & Indian Institute of
Personnel Management merged to form the National Institute of
Personnel Management.
1980s: Personnel management morphed into HR as new technologies
came to be discussed to manage people and their differences.
1990: American Society of Personnel Management renamed itself as
The Society of Human Resource Management.

Defining HRM

(Pande & Basak, 2012)

50 years ago: Personnel management aims to

achieve both efficiency and justice. It seeks to
bring together and develop into an effective
organization the men and women who make up
the enterprise, enabling each to make his own
best contribution to its success. It seeks to
provide fair terms and conditions of
employment and satisfying work for those
employed.

Personnel management & HRM

(Pande & Basak, 2012)

Personnel Management

Human Resource Management

Reactive, servicing role

Proactive, innovative role

Emphasis on implementation of
procedures

Emphasis on strategy

Specialist department

General management activity

Focus on employees need in

their own right

Focus on employees requirements in

the light of business needs

Employees seen as a cost to be

controlled

Employees seen as an investment to be

nurtured as well as a cost to be
controlled

Presumption of union manager

conflicts

Conflicts dealt with by team members

within their teams

Preference for collective

bargaining of pay and working
conditions

Management led planning of people

resources & employment conditions

Personnel management & HRM

(Pande & Basak, 2012)

Personnel Management

Human Resource Management

Emphasis on settling pay more in

terms of the organizations internal
market

Emphasis on competitive pay and

conditions to stay ahead of competitors

Serving other departments/ units

Contributing added value to business

Supporting change

Stimulating change

Challenging business goals in the

light of effect on employees

Total commitment to business goals

Less flexible approach to staff

deployments

Completely flexible approach to staff

deployment

The HRM System (Cascio, 2003)

Staffing

Identifying work requirements within an organization

Determining the numbers of people and the skills mix necessary to do the
work
Recruiting selecting and promoting qualified candidates

Retention
Rewarding employees for performing their jobs effectively
Ensuring harmonious working relations between employees and managers
Maintaining a safe, healthy work environment

Development: To preserve and enhance employees competence in

their jobs by improving their knowledge, skills, abilities, and other
characteristics (Competencies)
Adjustment: Activities intended to maintain compliance with the
organizations HR policies (e.g. discipline) and business strategies)
Managing change: Ongoing process whose objective is to enhance
the ability of an organization to anticipate and respond to
developments in its external and internal environments, and to enable
employees at all levels to cope with the changes

Responsibilities of HR Department
(Cascio, 2003)

Activity

Responsibility of HR Department

Staffing

Job analysis, human resource planning, recruitment, compliance

with civil rights laws and regulations, application blanks, written
tests, performance tests, interviews, background investigations,
reference checks, physical examinations

Retention

Compensation and benefits, employee relations, health and

safety, employee services

Development

Development of legally sound performance management

systems, morale surveys, technical training, management and
organizational development, career planning, counseling, HR
research

Adjustment

Investigation of employee complaints, outplacement services,

retirement counselling

Managing change

Provide expertise to facilitate the overall process of managing

change

Challenges of HRM (Gomez-Mejia, Balkin & Cardy, 2012)

Environmental challenges: Forces external to the

firm

Rapid change

Rise of the Internet

New company townships

Dealing with stress
Necessitating better written communication skills
Dealing with information overflow
Breaking down labor market barriers workers & companies
know where to get what they need
Using online learning
Enabling HR to focus on management

Workforce diversity

Challenges of HRM (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Environmental challenges (Contd.)

Globalization

Worldwide company culture

Worldwide recruiting
Industrial metamorphosis
Global alliances
A virtual workforce
The global enterprise
Wage competition

Legislation
Evolving work and family roles: Dual career families,
changing family structure, etc.
Skill shortages & rise of the service sector
Natural disasters

Challenges of HRM (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Organizational challenges: Concerns or

problems internal to a firm

Competitive position: Cost, quality, or distinctive

capabilities

Controlling costs
Improving quality
Creating distinctive capabilities

Decentralization
Downsizing
Organizational restructuring
Self managed work teams
Growth of small businesses

Challenges of HRM (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Organizational challenges (Contd.):

Organizational culture: Basic assumptions and beliefs

shared by members of an organization

Observed behavioral regularities

Norms
Dominant values espoused by an organization
Philosophy that guides organizations policy
Rules of the game
Feeling or climate

Technology

Rise of telecommuting
Ethics of proper data use
Electronic monitoring
Medical testing
Increase in egalitarianism

Challenges of HRM (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Organizational challenges (Contd.)

Internal security
Data security
Outsourcing
Product integrity

Challenges of HRM (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Individual challenges:

Matching people and organizations

Ethics and social responsibility
Productivity
Employee ability
Motivation
Empowerment
Brain drain
Job insecurity

Responses of firms to the new competitive

realities (Cascio, 2003)

Smaller companies that employ fewer people

The shift from vertically integrated hierarchies to networks of
specialists
Technicians, ranging from computer repair specialists to radiation
therapists, replacing manufacturing operatives as the worker elite.
Pay tied less to a persons position or tenure in an organization
and more to the market value of his or her skills
A change in the paradigm of doing business from making a
product to providing a service, often by part-time or temporary
employees
Outsourcing of activities that are not core competencies of a firm
(e.g. Payroll, or Collections, or downsizing movie Up in the air)
Redefinition of work itself: Constant learning, more higher order
thinking, less nine to five mentality

Responses of firms to the new competitive

realities (Contd.) (Cascio, 2003)

New forms of organization: Virtual, offshoring,

telecommuting
Restructuring, including downsizing
Total quality management
Reengineering: Fundamental rethinking and
radical redesign of business processes to
achieve dramatic improvements in cost, quality
and speed.
Flexibility

Why does effective HRM matter?

(Cascio, 2003)

Personnel selection
Job design
Information sharing
Performance appraisal
Promotion systems
Attitude assessment
Incentive systems
Grievance procedures
Labour management participation

HR managers try to answer the following

questions (Cascio, 2003)

Who specifies the content of each job?

Who decides how many jobs are necessary?
How are the interrelationships among jobs
determined and communicated?
Has anyone looked at the number, design and
content of jobs from the perspective of the entire
organization? What is the big picture?
What should training programs stress?
How should performance on each job be
measured?
How much is each job worth?

Planning and implementing strategic

HR policies (Gomez-Mejia, Balkin & Cardy, 2012)
Strategic HR planning: Process of formulating HR
strategies & establishing programs or tactics to
implement them.

Benefits:

Encouragement of proactive rather than reactive behavior

Explicit communication of company goals
Stimulation of critical thinking and ongoing examination of
assumptions
Identification of gaps between current situation and future
vision
Encouragement of line managers participation
Identification of HR constraints and opportunities
Creation of common bonds

Challenges of strategic HR planning

(Gomez-Mejia, Balkin & Cardy, 2012)

Maintaining a competitive advantage

Reinforcing overall business strategy
Avoiding excessive concentration on day to day
problems
Developing HR strategies suited to unique
organizational features
Coping with the environment
Securing management commitment
Translating the strategic plan into action
Combining intended and emergent strategies
Accommodating change

Strategic HR Choices
(Gomez-Mejia, Balkin & Cardy, 2012)

Strategic HR choices: Options it has available in designing its

HR system
Work flows:

Efficiency/ innovation
Control/ flexibility
Explicit/ broad job descriptions
Detailed/ loose work planning

Staffing:

Promoting from within/ hiring from outside

Empowering immediate supervisors/ centralizing decisions in HR
dept
Emphasizing good fit between applicant/ hiring most
knowledgeable applicant regardless of interpersonal
considerations
Hiring new workers informally/ formal & systematic hiring

Strategic HR Choices (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Employee separations
Voluntary inducements (e.g.VRS)/ layoffs
Hiring freeze/ recruiting as needed
Continued support to separated employees/ leaving them
to fend for themselves
Committing to rehiring laid off employees / fresh unbiased
recruitment if circumstances permit

Performance appraisal
Customised/ standardized appraisal system
Appraisal data as developmental tool/ control mechanism
Designing appraisal system with multiple objectives/
narrow purpose
Appraisal system with active participation/ only inputs from
employees

Strategic HR Choices (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Training and career development

Individual/ group training

Training on the job/ by external agencies
Job specific/ generic training
Hiring external experts at a higher wage/ training own
employees to become experts

Compensation

Fixed salary and benefits/ variable compensation

Compensation based on position/ individual
contribution
Rewarding for length of service/ performance
Centralizing pay decisions/ empowering supervisors
to make pay decisions

Strategic HR Choices (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

Employee & labor relations

Top-down communication/ bottom-up feedback

Avoiding or suppressing/ dealing with unions
Adversarial approach/ responding to employee
needs

Employee rights

Discipline/ proactive encouragement for

appropriate behavior
Employers / employees interest
Informal/ explicit standards and procedures for
ethical behavior

Strategic HR Choices (Contd.)

(Gomez-Mejia, Balkin & Cardy, 2012)

International management

Creating common company culture to reduce

inter-country cultural differences/ expecting
foreign subsidiaries to adapt to local culture
Sending expats to / hiring locals in foreign country
offices
Repatriation agreement with/ no commitment to or
from employees on foreign assignments
Centralized/ decentralized company policies for
multi-country operations

Selecting HR strategies to increase firm

performance (Gomez-Mejia, Balkin & Cardy, 2012)

The better the match between the HR strategy &

the firms overall organizational strategies
The more the HR strategy is attuned to the
environment in which the firm is operating
The more closely the HR strategy is moulded to
unique organizational features
The better the HR strategy enables the firm to
capitalize on its distinctive competencies
The more the HR strategies are mutually
consistent or reinforce one another
And eventually, the better the firm performance

Thank You