Human Resource Management

Semester II 203 – Human Resource

Management
3 Credits Compulsory Generic Core
Course
Unit 1. Human Resource Management:

Concept and Challenges - Introduction, Objectives, Scope, Features of HRM,

Role of HRM, Importance of HRM, Policies and Practices of HRM, Functions
of HRM ,Challenges of HRM. Introduction to SHRM: Define SHRM,
importance and nature. HRM Models: Harvard Model, SHRM “matching
model”. (5+2)

Unit2. HR Acquisition & Retention:

Human Resource Planning: Definition, Objective, Need and Importance, HRP

Process, Barriers to HRP. Job Analysis Process – Contents of Job
Description & Job Specification, Job description Vs job specification, Job
design, Factors affecting Job design, Job enrichment Vs job enlargement.
Recruitment Introduction & Sources of Recruitment, Difference between
recruitment and selection-Recruitment, Selection Process, Induction and
Orientation. Career Planning-Process of career planning and development
Succession Planning Process, Transfer and Promotion. Retention of
Employees: Importance of retention, strategies of retention. (8+2)
Unit 3. Managing Employee Performance and Training:

Performance Appraisal & Performance Management – Definition, Objective,

Importance, Appraisal Process and Appraisal Methods. Why to measure
performance and its purpose. Performance Appraisal Vs Performance
Management, Potential Management. Training and Development - Definition –
Scope – Conceptual framework of Training and development of Employees,
Role of Training in Organizations, Objectives, The Training and Development
Process, Training Need Assessment, Types of training, Difference between
training and development, E-Learning. Benefits of training, Evaluation of
Training Effectiveness: Kirkpatrick
model. (8+2)

Unit 4. Compensation Management:

Concept, Objectives, Importance of Compensation Management, Process,

Current Trends in Compensation. Factors in compensation plan. Wage/
Salary differentials, Components of salary. Incentives and Benefits –
Financial & Nonfinancial Incentive, Fringe Benefits. Employees Separation -
Retirement, Termination, VRS, Golden Handshake, Suspension, Concepts &
Methods, Grievance Procedure in Indian Industry. (8+2)
Unit 5. Emerging Trends in HRM:

HRIS- Need, Advantages & Uses of HRIS. HR Accounting- Concepts,

Objective, Advantage, Limitation & Method. HR Audit- Concept, Objective,
Scope & Process. HR Shared Services- Concept,
Objective, Benefits, Issues creating HR Shared Services.(6+2
COURSE OBJECTIVES :

 To understand the role of HRM in an organization.

 To learn to gain competitive advantage through people.

 To learn to study & design HRM system.

INTRODUCTION
 Human Resource are the most important assets of the
company. If they are put to good use, they can deliver
excellent result.

 The real challenge in managing human Resource lies in

motivating them. To get the best out of people, the employer
need to involve them, trust them and encourage them to
come out with winning idea and useful suggestions

 HUMAN RESOURCES are the people & their characteristics

at work are knowledge,skills,creative abilities, talents,
attitudes of the employees.

 Human Resource=Human Capital=Human Potential=Human

Assets.
Becker has defined human capital as “stock of skills & knowledge in
ability to perform work so as to produce economic value”

HRM- Managing people in the organization.

HRM is concerned with recruiting & employing right personnel &

competing on human resources involves developing, retaining &
integrating personnel to achieve competitive advantage. i.e.
employment & utilization of human resources with a view that
organization has right people, at right time and at right place.

Human Resource Management “the art of getting things done

through the people”

 Where Management is defined as “field of human behaviour in

which managers plan ,organize,staff,direct and control human,
physical and financial resources in an organised effort, in order to
achieve desired individual and group objectivities with optimum
efficiency and effectiveness
 Scope of HRM

1 HRM in Personnel Management

2. HRM in Employee Welfare
3. HRM in Industrial Relations

 HRM in Personnel Management:- This is typically direct

manpower management that involves manpower planning, Hiring
(recruitment and selection), training and development, induction
and orientation, transfer, promotion, compensation, layoff and
employee productivity. And Various activities involved in this
aspect are human resource planning, job/role analysis, Recruitment
Selection, Placement, Training & Development, Performance
Appraisal, Compensation, Promotion, Demotion, Transfer &
Separation
 HRM in Employee Welfare :-It deals with working conditions &
amenities such as canteens, creches, rest rooms, housing,
transport, medical assistance, health & safety, education,
recreation facilities, etc

 HRM in Industrial Relations :-It deals with employer-employee

relationships & includes setting-up of industrial relations systems,
consultation & collective bargaining, grievance handling &
disciplinary procedures, settlement of disputes, etc
 OBJECTIVES OF HRM
 The primary objective of HRM is to ensure the availability of
right people for right job so as the organizational goal are
achieved effectively.

 SOCIETAL OBJECTIVES

 ORGANIZATIONAL OBJECTIVES

 FUNCTIONAL OBJECTIVES

 PERSONAL OBJECTIVES
 SOCIETAL OBJECTIVES:- HRM is socially responsible for the need,
demand And challenges of the society. All the resources must be utilized
for the Benefit and in the interest of the society. of the society.

HRM should follow the rules and laws or legal restrictions imposed by the
society It has to develop and maintain healthy relations between union and
management.

 ORGANIZATIONAL OBJECTIVES:- It consist of recognize the role

of HRM in bringing about organizational effectiveness.

HRM has to prepare human resource planning, to recruit, select,

place, train and develop the human resource, to arrange for
performance appraisal and to achieve the organizational objectives
like to earn profit, growth and expansion, survival, diversification etc.
 FUNCTIONAL OBJECTIVES:- To maintain the department’s
contribution at a level appropriate to the organization’s needs.

Resource are wasted when HRM is either more or less involved to

suit the organization’s demand. The department’s level of service
must be tailored to fit the organizational it serves.

 PERSONAL OBJECTIVES :- To assist employees in achieving

their personal goals in a manner that their personal goals enhance
the individual’s contribution to the organization.

Personal objectives of employees must be met if workers are to be

maintained, retained and motivated. Otherwise, employee
performance and satisfaction may decline and employees may leave
the organization.
OBJECTIVES OF ORGANIZATION

Greater Job Satisfaction

Increased Performance

Reduced Absenteeism

Greater Profitability
Functions of HRM Functions for HRM

MANAGERIAL OPERATIVE
FUNCTION FUNCTION

Planning Employment

HRD
Organizing

Compensation
Directing

Human Relations
Controlling
Maintenance &
Separation
Managerial Functions
 Planning-
Pre-determined course of action. Plan and research about wage
trends, labor markets etc.

 Organizing-
“Structure and process by which co-operative group of human beings
allocated its tasks among its members, identifies relationships &
integrates its activities towards the common objective”

 Directing-
After planning & organising is execution of plan. Motivating,
commanding, leading & activating people. Attainment of
organizational goals through proper direction.

 Controlling-
Involves checking, verifying & comparing of the actuals.
Operational Functions –
 Employment

Job-Analysis
-Collection of data, information, facts & ideas relating to various
aspects of jobs
including men, machines & materials.

-Preparation of job-description, job-specification, job requirements

& employee specification which will help in identifying the nature,
levels, quantum of human resources.

-Providing the guides, plans & basis for job-design & for all
operative functions for HRM
 HUMAN RESOURCES DEVELOPMENT

Process of improving, moulding & changing the skills, knowledge, creative

ability, aptitude, values, commitment etc, based on present & future job &
organizational requirements. It includes

 Performance Appraisal

 Training

 Career planning & Development

Transfer
Promotion
Demotion
 Compensation

It is the process of providing adequate, equitable and fair

remuneration to the employees. It includes job evaluation, Wage &
salary administration, incentives, bonus, fringe benefits, social
security measures, etc

 Human Relations

Practicing various human resources policies and programmes like

employment, development and compensation and interaction among
employees create a sense of relationship between the individual
worker and management, among workers & trade unions and
management.

It is the process of interaction among human beings. Human

relations is an area of management in integrating people into work
situation in a way that motivates them to work together
productively, co-operatively & with economic, psychological and
social satisfaction.
 Effectiveness of Human Resources Management

 Organizational Health:
May be studied through the result of employees contribution to the
organization & the employee job-satisfaction. The result of the
employee satisfaction can be understood by Labour turnover,
absenteeism, commitment, etc.

 Human Resource Accounting:

Measurement of cost and value of human resources to the
organization. HRM is to be effective if the value & contribution of
human resources to the organization is more than the cost of human
resources.

 Human Resource Audit:

Refers to examination & evaluation of policies, procedures and
practices to determine the effectiveness of HRM.
Personnel Audit:
a) measures the effectiveness of personnel programmes &
practices.
b) Determines what should or should not be done in future.
 Policies and Practices of HRM

After establishment of objectives of HRM, human resource policies

are to be formulated.

Policies are general statements that guide thinking & action in

decision making.

 HRM Policies

Policy is predetermined course of action established to guide the

performance of work towards accepted objectives.

Importance of Policy –

 Clarity of thought
 Uniformity and Consistency in Administration
 Sense of Security
 Control
 Types of HR Policies –

 Originated Policies – These are the policies usually established by

the senior managers in order to guide their subordinates.

 Implicit Policies - These are the policies which are not formally
expressed; they are inferred from the behavior of managers.
They are also known as Implied Policies.

 Appealed Policies – made on request to handle certain situation,

or if certain aspects are missing in the main policy

 Imposed Policies – imposed by Government & Legal authorities

 General Policies – general policies means the overall plan

embracing the general goals and acceptable procedures of the
Association, as amended from time to time by the Board of
Directors of the Association.

 Specific Policy – related to specific issues like Recruitment,

 HRM Practices

HRM Functions HRM Practices

Selection Structured interviews and personality tests to match

the right person into the right job

Training Designing orientation and training workshops for

new employees, job redesign and leadership to
encourage informal learning and change
Rewards Management Pay systems, bonuses & benefit packages to maximize
individual performance

Employment relations Handling individual and group grievances,

communication of policies, negotiating with unions
 IMPORTANCE OF HRM

Human Resource management is a very important function in every

organization. Without HRM, companies would not be able to have
effectively recruit and retain employees, improve and enhance the
organization, and they wouldn’t be able to maintain a healthy,
accepting workplace culture and environment.

 To maintain quality of work life.

 To increase productivity and profit.

 To produce employees who are easily adaptable to change.

 To match demand and supply of human resource.

 To retain employees and motivate them to accomplish company’s

goal.

 To recognize merit and contribution of employee

 CHALLENGES OF HRM

Managing Human Resources in an organization has never been an easy task.

In the past few years, challenges of HRM have only grown with the rapid
growth of technology, the fast-paced software updates and remote
working has made HR management even more challenging. For an effective
HR management system, the challenge of HRM is to make sure that the
time, money, and resources of the organization are well-spent.
Furthermore, they make sure that employees have the required resources
to perform their best and reach their highest productivity levels.

Challenges of HRM:-

 Attracting Top Talent.

 Embracing Change With An Open Mind.

 Developing The Leaders of Tomorrow.

 Building a Culture of Continuous Learning.

 Building a Diverse Team.

 To create a feeling of belongingness and team spirit in the employee.

 To sustain business in the market.

 To resolve conflicts .

 To develop corporate image

 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
people’s needs.

 HRM is a study about the people in the organization-how they are

hired, trained, compensated, motivated & maintained.
 SHRM
Strategic Human Resource management
Strategy is course of action to achieve the goal.

Gluck defined the strategy as, unified, comprehensive & integrated plan
designed to ensure that the basic objectives of the enterprise are achieved.

What is strategy?

The origin of this concept can be traced in its military orientation, going
back to the Greek word ‘strategos’, for a general who organises, leads and
directs his forces to the most advantageous position . In the world of
business it mainly denotes how top management is leading the organisation in
a particular direction in order to achieve its specific goals, objectives, vision
and overall purpose in the society in a given context / environment.

The main emphasis of strategy is thus to enable an organisation to

achieve competitive advantage with its unique capabilities by focusing on
present and future direction of the organisation
Strategy is management’s game plan-

 Running the business

 Strengthening firm’s competitive position
 Satisfying customers
 Achieving performance targets

John & Richard define strategic management as, "set of

decisions & subsequent actions used to formulate & implement
strategies that will optimize the fit between the organization &
its environment in an effort to achieve organizational
objectives”

“A continuous, cross-functional process aimed at keeping an

organization as a whole matched to its environment”
Basic Steps of the Strategic Management process includes:

 Vision, Mission & objectives of the organization

 External & Internal environment analysis

 Revise organizational direction,

 Formulation of alternative strategies

 Strategy implementation

 Selecting the best strategy

 Strategic evaluation & control.

 A ‘classical’ strategic management process consists of a series of steps,
starting from

 establishing a mission statement and key objectives for the organisation;

 analysing the external environment (to identify possible opportunities and

threats);

 conducting an internal organisational analysis (to examine its strengths

and weaknesses and the nature of current management systems,
competencies and capabilities);

 setting specific goals; examining possible strategic choices / alternatives

to achieve organisational objectives and goals;

 adoption / implementation of chosen choices; and regular evaluation of all

the above.

 The above mentioned first five steps form part of strategic planning and
the last two steps deal with the implementation of an ideal strategic
management process.
Strategic HRM Define as

Strategic HRM is an approach to making decisions on the intentions and

plans of the organization concerning the employment relationship and its
recruitment, training, development, performance management, reward and
employee relations strategies, policies and practices. The key
characteristic of strategic HRM is that it is integrated. HRM strategies
are generally integrated vertically with the business strategy and
horizontally with one another.

SHRM refers to proactive & systematic alignment of human resource

systems, Processes, Policies & Practices with the mission & strategic
objectives of the larger organization.

The primary objective of SHRM is to enhance employee, managerial &

organizational effectiveness & performance.
Nature of SHRM:-

SHRM is about systematically linking people with the organisation; more

specifically, it is about the integration of HRM strategies into corporate
strategies. HR strategies are essentially plans and programmes that address
and solve fundamental strategic issues related to the management of human
resources in an organisation .Their focus is on alignment of the organisation’s
HR practices, policies and programmes with corporate and strategic business
unit plans.

Strategic HRM thus links corporate strategy and HRM, and emphasises the
integration of HR with the business and its environment. It is believed that
integration between HRM and business strategy contributes to effective
management of human resources, improvement in organisational
performance and finally the success of a particular business
 Concerns of strategic HRM

 Strategic HRM is concerned with the relationship between HRM

and strategic management in the firm.

 Strategic HRM refers to the overall direction the organization

wishes to pursue in order to achieve its goals through people.

 It is argued that, because intellectual capital is a major source

of competitive advantage, and in the last analysis it is people
who implement the strategic plan, top management must take
these key considerations fully into account in developing its
corporate strategies. Strategic HRM is an integral part of those
strategies.
The meaning of strategic HRM

Strategic HRM has four meanings:

 the use of planning;

 a coherent approach to the design and management of personnel

systems, based on an employment policy and manpower strategy, and
often underpinned by a 'philosophy‘

 matching HRM activities and policies to some explicit business strategy;

 seeing the people of the organization as a 'strategic resource' for the

achievement of 'competitive advantage'.
Importance of Strategic Human Resource Management

 Communication of Goals and Objectives

The goals and objective are very important for an organization. These goals
are not communicated without the help of strategic human resource. If the
goals are not properly translated and communicated, then the people who are
employed for those will not be able to perform well in the business
operation. As a result, the goals may not be achieved in the given time. In
this place, strategic HR plays an important role

 Setting Efficient People to Achieve Specific Goals

The human resource department is responsible for the recruitment of the
employees for an organization. They always hire people for different
departments of the organization. As a result, they become very
knowledgeable about the people they are hiring. So, they also know the
capabilities of the people. Specific goals are given to the capable employees
with the help of strategic human resource.
 Forecasting Future Human Needs
As per corporate, competitive, and functional needs, the strategic human
resource forecasts the future human needs for the organization. By this,
strategic HRM reduces manages the chance of shortage of future human
supply. It helps the organization to be consistent in the way of their
operation.

 Selecting and Utilizing Motivational Tools

A person in an organization may not be motivated by the tool used to
motivate others. That means, different type persons required different
types of motivational tools. Some people may be motivated by permanent
salary increment and some are motivated by a small incentive periodically.
For some people, money are not motivating factors anymore. They perhaps
need promotion and social recognition to become more motivated. Strategic
HR finds out what person needs what to remain motivated that helps
organization achieve its goals.
 Measuring Performance by the help of SHRM
HRM is responsible to measure the performance of employees. The
employees are given rewards according to the result of output an employee
has given. Strategic human resource selects the right methods of
performance measurement. The performance is compared with the
expected performance. If any further training or education needed, HR
executes that. Without efficient strategic HR, the selection of training or
the measurement cannot be determined.
 Matching model
 Less humanistic view
 1984
 Michigan Business School USA
 BY Fomburn, Tichy and Devanna
 Also known as Michigan Model
 Tight fit, Best fit approach

 Hard approach to HRM

 Less Humanistic edge/ important to Business
 Employees as Resources
 Limit HRM to organizational function ignoring societal and
external factors
 A triangle, firm is the center

 Triangle represent external and internal factor influencing

business

 Firm is central to all activities, other factor are secondary

 Each factor is interlinked and have influence.

THE MATCHING MODEL, MICHIGAN MODEL 1984

POLITICAL
FORCES

ECONOMIC STRATE
CULTURAL
FORCES GY
FORCES

ORGANIZAT
ION HRM
STRUCTURE
The model also explained that there is human resource cycle which
consists 4 functions:

REWARDS

PERFORMANCE
SELECTION PERFORMANCE
MGMT.

DEVELOPMEN
T
1) Selection: Matching available human resources on job.

2) Appraisal: Performance Management

3) Rewards: Reward system for short and long-term for driving

organizational performance to succeed in future.

4) Development: Developing high qualities employees.

Matching Model – AREAS

 Performance

 Choosing suitable individuals (right person for the right job)

 Performance appraisals

 Training staffs
Matching Model – Advantages

 Cost effective Cheap HR

 Organizational growth
 Fast decision making
 One way communication
 Decision making at senior management level
 Employees have no contribution in decision making

Matching Model – Disadvantages

 Ignores situational factors

 Demotivating employees
 High staff absenteeism and turnover
 The Harvard Model

 One of the most significant and most influential models of HRM,

the Harvard model, was initially developed by several experts lead
by Michael Beer in 1984 at Harvard University.

 Back in 1984, Beer et al developed the Harvard model of the HRM.

Beer et al believe that the human resource is passes many of
pressures nowadays, therefore, eliminating the pressures is
required.

 This model of HRM is considered to be a 'soft' approach to

HRM practices and therefor the employees are treated as assets
of the organisation. Edgar and Geare (2005) stated that the
Harvard concept stresses on the employee commitment.
The Harvard model claims to be comprehensive in as much as it seeks to
comprise six critical components of HRM.
1. Stakeholders interests
2. Situational factors
3. HRM policy choices
4. HR outcomes
5. Long-term consequences
6. Feedback loop

Through which the outputs flow directly into the organisation and the
stakeholders.
 Stakeholder’s
interests
Shareholders,
Management
Employee groups,
Government
Human Resource Human Resource Long Term
Community, Unions
Management Policy Outcomes Consequences

Choices Employee Commitment Individual well-being

influence human Competence Organisational

resource flow Congruence effectiveness

Reward system, Cost-effectiveness Societal well being

Situational Factors,
Workforce Characteristics, Work System  
Business
Strategy and conditions,
Management Philosophy,
Labour Market, Unions
Task Technology,
Laws and social values The Harvard Model
 
 The stakeholders

 Their interests recognise the importance of ‘trade offs’ between the

interests of the owners and those of employees.
 Trade offs also exists among other interest groups.
 But this is the challenge of HR manager.
 He or she needs to balance the interests of all stakeholders.

 The situational factors

 It influence management’s choice of HR strategy.

 The contingent factors included in the model include workforce
characteristics, management philosophy, labour market, task, technology,
and laws and social values.
 These situational factors do influence HR strategy and their inclusion in
the model is a welcome thing.
 The situational factors

 It influence management’s choice of HR strategy.

 The contingent factors included in the model include workforce
characteristics, management philosophy, labour market, task, technology,
and laws and social values.
 These situational factors do influence HR strategy and their inclusion in
the model is a welcome thing.

 HRM outcomes

 It constitute of Organisational commitment, employee competence,

congruence and cost effectiveness.
 The assumption here is that employees have talents which are rarely
exploited for organisational growth and that they are willing to grow
with the organisation if a participative environment is available.
 The 4C Harvard model was developed by researcher in Harvard Business
School during 1984.It means that investigating the HRM issues and
their solutions. It suggested that the effectiveness of outcome of HRM
should be evaluated in following four aspects.

The four human resource outcomes in the Harvard version of HRM:

1. Commitment
2. Competence
3. Congruence
4. Cost-effectiveness.

COMMITMENT:-

COMMITMENT that is employees’ identification with the organization,

integrity and personal motivation in their work. It can be measured by exit
interviews or surveys.

COMPETENCE:-

COMPETENCE that is employees Knowledge, skill and abilities(KSA),

training and development can foster the employee to perform well.
CONGRUENCE:-

CONGRUENCE that refers to uniformity between objects and individuals

where as every employees are different from each other.

COST EFFECTIVENESS:-

COST EFFECTIVENESS refers to cost efficiency where by HRM we can

attain and meet benefit obtained at the lowest input cost.

 The long-term consequences

It include societal well-being, organisational effectiveness, and individual

welfare. There is obvious linkage among the three. Employee welfare leads
to organisational effectiveness and efficacy of all organisations contributes
to societal well-being.
 The feedback loop

It is the sixth component of the Harvard model. As was stated above,

situational factors influence HRM policy and choices, and are influenced by
long-term consequences. Similarly, stakeholders’ interests influence HRM
policy choices, and in turn, are impacted by long-term outcomes