Human Resource Management BBA, Third Year, Sixth Semester

Course Objectives:

This course aims to familiarize the students with the basic concepts and functions of HRM in the context of Nepal.

Course Contents: 1. HRM in Context 7 hours

Concept, nature, objectives, and functions of Human Resource Management; Personnel Management Vs. Human Resource Management; Human Resource Management system; Importance of Human Resource Management; The changing world of work and the changing role of Human Resource professionals; Human resource strategy-concept and perspectives; Environment of Human Resource Management in Nepalese organization; International perspective of Human Resource Management; Ethical issues in Human Resource Management

2. Meeting Human Resource Requirements 8 hours Human resourcing and Human Resource planning concepts and importance; Human Resource Information System and Human Resource Inventory importance and uses, succession planning; job analysis, job specification, job description; Attracting a high performing workforce-recruitment and selection, internal and external recruitment, Testing and selecting employees-selection tests and tools; Classification and differential placement

3. Developing Human Resources 6 hours

Concept and importance of developing Human Resource; Employee socialization; Determining training needs; Considerations in design of the training programmes-on-the-job vs. off-the-job training; Developing managers-methods of management and leadership development; Mentoring; Empowerment; Evaluating training effectiveness

4. Performance and Effectiveness 4 hours

Role of Human Resource in a firms competitiveness; Concept and methods of evaluating employee performance; Emerging concepts and issues in performance appraisal; Career development

5. Compensation 8 hours Concept; Compensation programmes; job evaluation system-methods and process; The compensation structure; Incentive system-gain sharing incentive plans, employee benefits and services; Retirement programmes; Retirement benefits; Executive compensation; Compensation in Nepal-government regulations, minimum wages, social welfare factors, and incentive compensation; Emerging concepts and issues in compensation management

6. Occupational Health and Safety 3 hours Concepts, importance, legal provisions, practices and emerging issues in OHS 7. Managing Employee Relations, Change and Communication 4 hours

Human Resource Management Communications concept, Human Resource Management Communications communication programme; Employee handbook, Mechanism of effective communications; Organizational culture, change and human resources; job stress factors; Spirituality in the workplace; Participation, partnership and employee involvement

8. Industrial Relations 8 hours

Changing nature of the employment relationship; Industrial relations concept; Trade unions; Employers associations; Labor legislation in Nepal along with important provisions; Collective bargaining-concept and process; Disciplinary actions; Grievance handling; Conflict management unilateral, joint and third party decisions; Dismissal redundancy and outplacement; Current situation of IR in Nepal; Emerging concepts in industrial relations

Text Books:

1. Decenzo. D.A. and Robbins, S.P.: Human Resource Management, Prentice-Hall, India. 2. Dessler, Gary.: Human Resource Management, Prentice-Hall, India

UNIT I

HUMAN RESOURCE MANAGEMENT BBA, Third Year, Sixth Semester Concept of Human Resource Management Definition : Human resource management is concerned with the people dimension in management.

DeCenzo & Robbins Human Resource Management is the process of accomplishing organizational objectives by acquiring, retaining, terminating, developing and properly using the human resources in the organization.

Ivancevich, Donnely Human resource management is the process of acquiring, training, appraising, and compensating employees, and of attending to their labor relations, health and safety, and fairness concerns. The policies and practices involved in carrying out the people or human resource aspects of management position, including recruiting, screening, training, rewarding, and appraising. It is a subject related to human. For simplicity, we can say that it is the management of humans or people. HRM is a managerial function that tries to match an organizations needs to the skills and abilities of its employees. Human Resource Management is responsible for how people are managed in the organizations. It is responsible for bringing people in organization helping them perform their work, compensating them for their work and solving problems that arise. Human Resource Management is a process of bringing people and organizations together so that the goals of each are met. It tries to secure the best from people by winning their wholehearted cooperation. In short, it may be defined as the art of procuring, developing and maintaining competent workforce to achieve the goals of an organization in an effective and efficient manner. NATURE/FEATURES OF HRM 1) Pervasive force: HRM is pervasive in nature. It is present in all enterprises. It permeates all levels of

management in an organization. 2) Action oriented: HRM focuses attention on action, rather than on record keeping, written procedures or rules.

The problems of employees at work are solved through rational policies. 3) Individually oriented: It tries to help employees develop their potential fully. It encourages them to give their

best to the organization. It motivates employees through a systematic process of recruitment, selection, training and development coupled with fair wage policies.

4) People oriented: HRM is all about people at work, both as individuals and groups. It tries to put people on assigned jobs in order to produce good results. The resultant gains are used to reward people and motivate them toward further improvements in productivity.

5) Future-oriented: Effective HRM helps an organization meet its goals in the future by providing for competent and well-motivated employees.

6) Development oriented: HRM intends to develop the full potential of employees. The reward structure is tuned to the needs of employees. Training is offered to sharpen and improve their skills. Employees are rotated on various jobs so that they gain experience and exposure. Every attempt is made to use their talents fully in the service of organizational goals.

7) Integrating mechanism: HRM tries to build and maintain cordial relations between people working at various levels in the organization. In short, it tries to integrate human assets in the best possible manner in the service of an organization.

8) Comprehensive function: HRM is, to some extent, concerned with any organizational decision which has an impact on the workforce or the potential workforce. The term workforce signifies people working at various

levels, including workers, supervisors, middle and top managers. It is concerned with managing people at work. It covers all types of personnel. Personnel work may take different shapes and forms at each level in the organizational hierarchy but the basic objective of achieving organizational effectiveness through effective and efficient utilisation of human resources, remains the same. It is basically a method of developing potentialities of employees so that they get maximum satisfaction out of their work and give their best efforts to the organization.

9) Inter-disciplinary function: HRM is a multi-disciplinary activity, utilizing knowledge and inputs drawn from psychology, sociology, anthropology, economics, etc. unravel (to explain) the mystery surrounding the human brain, managers, need to understand and appreciate the contributions of all such soft disciplines.

10) Continuous function: According to Terry, HRM is not a one shot deal. It cannot be practiced only one hour each day or one day a week. It requires a constant alertness and awareness of human relations and their importance in every day operations.

OBJECTIVES OF HRM 1) Achieve high productivity: The extent to which an organization is able to get productivity goal is

achieved, depends largely on how effectively it uses its human resources. HRM continuously develops employees through training and other opportunities. Better quality of human resources results in improved productivity through team work.

2) To help the organization reach its goals: HR department, like other departments in an organization, exists to achieve the goals of the organization first and if it does not meet this purpose, HR department (or for that matter any other unit) will wither and die.

3) To employ the skills and abilities of the workforce efficiently: The primary purpose of HRM is to make peoples strengths productive and to benefit customers, stockholders and employees.

4) To provide the organization with well-trained and well-motivated employees: HRM requires that employees be motivated to exert their maximum efforts, that their performance be evaluated properly for results and that they be remunerated on the basis of their contributions to the organization.

5) To increase to the fullest the employees job satisfaction and self-actualization: It tries to prompt and stimulate every employee to realize his potential. To this end suitable programmes have to be designed aimed at improving the quality of work life (QWL).

6) To communicate HR policies to all employees: It is the responsibility of HRM to communicate in the fullest possible sense; tapping ideas, opinions and feelings of customers, non-customers, regulators and other external public as well as understanding the views of internal human resources.

7) To develop and maintain a quality of work life: It makes employment in the organization a desirable, personal and social, situation. Without improvement in the quality of work life, it is difficult to improve organizational performance.

8) To be ethically and socially responsive to the needs of society: HRM must ensure that organizations manage human resource in an ethical and socially responsible manner through ensuring compliance with legal and ethical standards.

9) Increase workforce commitment: Increasing level of commitment means people are interested to be involved in work mentally and physically in order to achieve organizational objectives. This is achieved by the people commitment for increase in efficiency and productivity.

10) Providing supporting environment for employee for employees creativity: For this purpose HRM focuses on effective management mechanisms such as team work, management by objectives and total quality management.

11) Making organizational system flexible: HRM aims to train and develop workforce in order to adjust in a quickly and frequently changing environment. It follows other flexible HR practices to

motivate workforce to work to keep organization more flexible to respond changing elements of the environment.

12) Management of organizational culture: Organization culture refers to the widely shared beliefs, values and norms of organizational members and other stakeholders. It guides the behavior of people working organization. By knowing these cultures, which also represent unwritten feeling part of the organization, workforce can learn on how to behave, respond, and react in different situations.

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.

1) STAFFING Activities in HRM concerned with seeking and hiring qualified employees. Obtaining such people involves job analysis, human resource planning, recruitment, and selection. a) Job analysis is the systematic process of determining the skills, duties, and knowledge required for

performing specific jobs in an organization. Through JA process, HRM identifies the essential qualifications for a particular job.

b) Human resource planning (HRP) is the process of systematically reviewing human resource requirements to ensure that the required numbers of employees, with the required skills, are available when needed.

c) Recruitment is the process of attracting such individuals in sufficient numbers and encouraging them to apply for jobs with the organization.

d) Selection is the process through which the organization chooses, from a group of applicants, those individuals best suited both for open positions and for the company.

2) TRAINING AND DEVELOPMENT Activities in HRM concerned with assisting employees to develop up-to-date skills, knowledge, and abilities. Activities involves in training and development are as,

a) Training is designed to provide learners with the knowledge and skills needed for their present jobs. It is a continuous process by which employees learn skills, knowledge, abilities and attitudes to further organizational and personal goals. The focus of training is on current job skill requirements.

b) Employment development is designed to help the organization ensure that it has the necessary talent internally for meeting future human resource needs. It is essential because people, technology, jobs, and organizations are always changing.

c) Career development programs are designed to assist employees in advancing their work lives. The focus of career development is to provide the necessary information and assessment in helping employees realize their career goals. (Career: The sequence of positions that a person has held over his or her life).

d) Organization development deals with facilitating system wide changes in the organization. The focus of OD is to change the attitudes and values of employees according to new organizational strategic directions.

3) MOTIVATION Activities in HRM concerned with helping employees exert at high energy levels. Motivation Theories and job design: JD is the way in which job tasks are organized into a unit of work. If job are poorly designed, inadequately or improperly described, employees will perform below their

capabilities. Consequently, HRM must ask has the latest technology been provided to permit maximum work

efficiency. Is the office setting appropriate? Are the necessary tools readily available for employee use? Without such planning, the best intentions of organizational members to motivate employees may be lost or significantly reduced. Must be understand the implication of motivation theories. Performance appraisal system is designed to provide feedback to employee regarding their past

performance, while simultaneously addressing any performance weaknesses the employee may have. A link should be established between employee compensation and performance.

4) MAINTENANCE Activities in HRM concerned with maintaining employees commitment and loyalty to the organization. Help to retain productive employee. v HRM must ensure a safe and healthy working environment; caring for employees well beings has

major effect on their commitment. v HRM must realize that any problem an employee faces in his or her personal life will ultimately

brought into the workplace. This calls for employee wellness program. Such programs that help individuals deals with stressful life situations.

v To protect employee welfare, HRM must operate communication programs (provide information to employees) in the organizations.

v Employee relations programs should ensure that employees are kept well informed through the companys bulletin boards, meetings or teleconferencing and foster an environment where employee voices are heard.

5) HUMAN RESOURCE RESEARCH Although human resource research is not listed as a separate function, it pervades all HRM functional areas, and the researchers laboratory is the entire work environment. 6) INTERRELATIONSHIP OF HRM FUNCTIONS All HRM functional areas are highly interrelated. Management must recognize that decisions in one area will affect other areas. The interrelationships among the five HRM functional areas will become more obvious as we address each topic throughout the book. PERSONNEL MANAGEMENT VS. HUMAN RESOURCE MANAGEMENT v Both terms, however referred to the same thing; the personnel who work for an organization represent that

organizations human resources. v Human Resource Management (HRM) historically known as personal management, deals with formal

system for the management of the people within the organization. v HRM and personnel management are similar in the sense that both are concerned to achieve business

strategy and recognize responsibilities of all managers for managing people in organizations. v The generic functions of personnel and human resource management (recruitment and selection, training

and development, performance evaluation and rewards) are similar. v HRM is a modern term that emerged during the 1970s and won final acceptance in 1989. v HR mangers concern include how to manage layoffs, address reduced employee loyalty, and create a well

trained highly motivated work force that can deliver higher quality and productivity. v In 1970s, the job of the HR manger was to keep their companies out of court and in compliance with the

increasing number of regulations governing the work place. v In the 1980s HR mangers had to address staffing costs related to mergers and acquisitions and downsizing. Personnel management Vs. Human Resource Management DIMENSIONS PERSONNEL MANAGEMENT HUMAN RESOURCE MANAGEMENT Time and planning v Short term focused

v Reacts on the personal problems by providing piece-meal solutions v There will be any problem it plans to solve.

v It follows a long-term approach to work on the problem or change. v Proactive actions v Make system-wide interventions before any problem

Investment It regards investment in people as a variable cost.

It regards investment in people is social capital capable of development.

Main concerns v Concern of personnel department. v Negotiating, administrating and collective agreement. v The more focus is on compliance with rules and regulations.

v Concerns of all level of managers. v Main concerns of HRM is on employees commitment. v Employees involvement and participation are emphasized in work related decisions.

Information & Traditionally, personnel specialists used Communication and information are important

communication communication and information mainly as a source of power and control.

sources of developing trust and commitment among the organizations employees.

Aims To increase the skills of employees through teaching and learning.

To develop the full, longer term potential of individual employees.

Influence It influences the line mangers to implement its roles and responsibility.

It is embedded with the line management responsible for coordinating and directing all resources in the business unit in pursuit of bottom line performance

Outcome v Satisfied employees v Increased production

v Increased productivity v Increased organizational effectiveness. v Development of organizational culture and climate. v Committed and empowered human resources.

Function Main function manpower planning comprises practices, such as employment forecasting and succession planning

HR Planning establish a more explicit linkage between human resource planning and the organizational strategy and business planning of the organization.

HUMAN RESOURCE MANAGEMENT SYSTEM v HRM can be looked upon as a system composed of interrelated and interacting parts to achieve desired

goals. v It is operate within internal and external environment. v It is an integrated guiding map to see the integrated form of HRM comprising input, process, and

output components and their interaction with environmental factors. v While understanding HR System,

it is generally assumed that if organization can have a greater understanding of environmental factors, it allows achieving greater HR outcomes.

FEEDBACK

Internal environment Goal, policies, structure, reward system, org. culture

External environment Technology, politics, law, labor union, cultural

INPUT OF HRM MODEL Input component of HRM model consists of v Human energy and competencies: Energy is represented by physical strength. Competencies are

represented by knowledge, skills, attitudes, experiences and potential for growth. Energy and competencies are the focus of HRM.

v Organizational plan : This states overall organization goals, strategy and targets within which HRM has to function.

v Human Resource Plan: This matches future human resource demand with supply and indicates HR requirements.

v Management inventory: This represents inventory of human resources currently available in the organization.

v Labor Market: this serves as the source of external supply for quality human resources. PROCESSING OF HRM MODEL Processing components of HRM model consists of: Acquisition: this ensures entry of right number of people at the right place at right time in the organization. It consists of following activities:

Recruitment: It consists of identifying prospective candidates and stimulating them to apply for the job.

Selection: It consists of choosing qualified and right persons from among the prospective candidates.

Socialization: It is the process of adaptation of new employees to organization culture. Orientation is a part of socialization.

Development: this ensures proper competencies of employees to handle jobs. It consists of following activities; Analyzing development needs: Formulating human resource development plan for employees to

assess needs. Employee training: Skill development of employees to cope with the job. It can be on the job

and off the job. Management development: Programmes to enhance conceptual abilities of managers to develop

their future potential. Career development: It involves tackling career paths of employees to match long term needs of

the individual and the organization. Utilization: This ensures willingness of employees for boosting productivity by doing jobs effectively.

Motivation: Higher output through employee need satisfaction and increased efforts. Performance appraisal: Assessment of employee effectiveness in achieving goals through

performance on the job. Compensation management: Design of the lowest cost pay structure that is perceived as fair by

employees. It is based on the job evaluation. It includes money, fringe benefits, incentive. Maintenance: This ensures retention of competent employees in the organization. It consists of

Labor relation: Employer employee relations and employee discipline to ensure adherence by employees to rules and standards of acceptable behavior. Disciplinary problems arise when some employees do not conform to proper norms of organization behavior. Grievance handling is done to address employees discontent with job and conditions of employment resulting from perception of unfair treatment. It includes unionization and collective bargaining.

Employee welfare : it consists of various activities and programmes that promote employee welfare, such as safety, healthy, social security, sports, recreation, canteen facilities etc

OUTPUT OF HRM MODEL

Output of HRM model consists of v Organization related output

i. Goal achievement : overall and societal ii. Quality of work life (QWL): HRM improves QWL, which is the quality of relationship

between employees and the total working environment of the organization. It is employee perception of physical and mental well being at work.

The mechanisms for improvements in QWL are: v Learning and development: HRM continuously develops employees. v Recognition: employees contribution is valued by other in org. v Autonomy: freedom in doing in their job is provided. v Intrinsic reward: getting satisfaction through interesting and meaningful works. v Extrinsic reward: Salary, benefit, promotion, etc.

iv. Productivity: it is the performance output of HRM. It is the efficiency relationship input and output. It is the result of technology, innovation, performance based rewards and higher motivation.

v. Profit: It is the functional output of HRM. vi. Readiness for change: It is the behavioral output of HRM. Changes should be carefully planned

and managed by organization. HRM system reduces resistance to change. v Employment related output

They consist of 4Cs. i. Commitment: It is related to people. High commitment achieved through better

communication, mutual trust, mutual understanding, with employees, and employee loyalty to organization.

ii. Competence: It is related to people. High competence to adapt to change in the environment and assume new roles.

iii. Congruence: It is related to goals. Higher degree of harmony is achieved between the goals of individual and the organization.

iv. Cost effectiveness: It is related to efficiency. Higher cost effectiveness is achieved in utilization of human resource.

FEEDBACK OF HRM MODEL This component provides information to redesign HRM inputs and processing based on output effectiveness. ENVIRONMENT Internal Environment of HRM Model Focuses in the internal environment are controllable by HRM. They provide strength and weakness of the organization. They are

v Organizational goals: provide frame of reference for conducting HRM. v Policies: Provide guidelines for HRM decisions. v Structure: Limit activities, design of job and relationship v Reward system: ensure attraction and retention of quality HRs. v Organizational culture: It promotes and hinders mutuality of interests between management

and employees. External Environment of HRM Model Forces in the external environment are non controllable by HRM. They provide opportunities and pose threats. They are

v Technology : Skill, methods, system and equipment v Politics/Law: rule of conduct enforced by the state. v Labor union: they affect processing components of HRM system through collective bargaining,

strikes etc. v Economic forces: they affect job market and reward system of employees.

v Socio-cultural forces: Forces related to human relationships. They provide status and value to the firm.

Growing Importance of HRM v The success of organizations increasingly depends on - the knowledge, skill, and abilities imbedded in an

organization's members. v 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). v We are surrounded by organizations and we participate in them as members, employees, customers, and

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

live. v Organizations on the other hand depend on people, and without people, they would disappear.

HRM HAS INCREASED IN IMPORTANCE SINCE THE 1980S. WHY? v Globalization v Government regulation v Stronger knowledge/research base v Changing role for labor unions v Challenge of matching worker expectations with competitive demands

THE IMPORTANCE OF HRM People are the key factor of production. Productivity is the key to measure a nations economic growth

potential, and labor quality is the key to improving productivity. Competition today is the competition for talents. Since man is the most uncontrollable and unpredictable variable of all production variables, organizational success depends on the management of people.

It provides assistance in HRM matters to line managers or those directly involved in producing the organizations goods and services.

Every organization is comprised of people acquiring their services, developing their skills, motivating them to high level of performance, and ensuring that they maintain their commitment to the organization are essential to achieve organizational effectiveness.

Global competition has increased the importance of improving workforce productivity and looking globally for the best qualified workers.

As an important strategic tool v Representation and advocating for the organizations employees. v Assisting the organizations in its strategic directions. v HRM also serve the organization by determining lowest cost strategies to its HRM practices v Being a strategic partners also involves supporting the business strategy v HRM helps to establish an organization's sustainable competitive advantage.

Adds value to the firm High performance work practices lead to both high individual and high organizational performance.

Factors Contributing to the Growing Importance of HRM a) Accommodation to workers' needs v Workers are demanding that organizations accommodate their personal needs by instituting such

programs as flexible work schedules, parental leave, child-care and elder-care assistance, and job sharing. v The human resource department plays a central role in establishing and implementing policies designed

to reduce the friction between organizational demands and family responsibilities. b) Increased complexity of the Managers job v Management has become an increasingly complex and demanding job for many reasons, including

foreign competition, new technology, expanding scientific information, and rapid change. v Therefore, organizations frequently ask human resource managers for assistance in making strategic

business decisions and in matching the distinctive competencies of the firm's human resources to the mission of the organization.

v Executives need assistance from the human resource department in matters of recruitment, performance evaluation, compensation, and discipline.

c) Consistency v Human resource policies help to maintain consistency and equity within an organization. v Consistency is particularly important in compensation and promotion decisions. v When managers make compensation decisions without consulting the human resource department the

salary structure tends to become very uneven and unfair, promotion decisions also may be handled unfairly when the HR department does not coordinate the decision of individual manager.

d) Expertise v Now a days there exist sophisticated personnel activities that require special expertise. v Similarly, many organizations have developed compensation systems with elaborate (complicated)

benefits packages to replace simple hourly pay or piece rate incentive systems. e) Cost of Human Resource v Human resource activities have become increasingly important because of the high cost of personal

problem. v The largest single expense in most organizations is labor cost, which is often considerably higher than

the necessary because of such problems as absenteeism tardiness and discrimination

The Strategic Management Process

Step 1: Define the Business and Its Mission: Step 2: Translate the mission into strategic goals: Step 3: Formulate a strategy to achieve the strategic goals: Step 4: Structure: Step 5: People

STRATEGIC HUMAN RESOURCE MANAGEMENT -CONCEPT AND PERSPECTIVES v Strategy is a long term plan of the organization. v Strategic HRM is concerned with the development and implementation of the HR strategies integrating

with the overall organization strategy. v HR strategy refers for specific course of actions developed for achievement of organizational goal. v It aims at building a committed workforce for the long run survival of the organization. v SHRM refers to improving business performance and developing an organizational culture that fosters

innovation and flexibility by linking HRM with the strategic goals and objectives of the firm. v SHRM is the pattern of planned human resource developments and activities intended to enable an

organization to achieve its goals. v This means accepting the HR function as a strategic partner in both the formulation of the companys

strategic, as well as in the implementation of those activities through HR activities. v While formulating the strategic plan HR management can play a vital role, especially in identifying and

analyzing external threats and opportunities. v HR management can also offer competitive intelligence (like new incentive plans being used by

competitors, data regarding customer complaints etc.) that may be helpful while giving shape to strategic plans.

v HR function can also throw light on company's internal strengths and weaknesses. v Some firms even develop their strategies based on their own HR- based competitive advantage.

OUTCOMES OF STRATEGIC HR

USING HRM TO ATTAIN COMPETITIVE ADVANTAGE Competitive advantage refers to the ability of an organization to formulate strategies to exploit rewarding opportunities, thereby maximizing its return on investment. Competitive advantage occurs if customers perceive that they receive value from their transaction with an organization. This requires single-minded focus on customer needs and expectations. To achieve this, the organization needs to tune its policies in line with changing customer's requirements. The second principle of competitive advantage derives from offering a product or service that your competitor cannot easily imitate or copy. An organization should always try to be unique in its industry along dimensions that are widely valued by customers. For example Apple stresses its computers usability, Mercedes Benz stresses reliability and quality; Maruti emphasizes affordability of its lower-end car Maruti 800. In order to enjoy the competitive advantage, the firm should be a cost-leader, delivering value for money. It must have a committed and competent workforce. Workers are most productive if (i) they are loyal to the company, informed about its mission, strategic and current levels of success, (ii) involved in teams which collectively decide how things are to be done and (iii) are trusted to take the right decisions rather than be controlled at every stage by managers above them (Thompson). A good team of competent and committed employees will deliver the goals if they are involved in all important activities and are encouraged to develop goals that they are supposed to achieve. In recent years, a new line of thinking has emerged to support this view-known as strategic human resources management (SHRM). What are the strategic roles of an HR Manager? Strategic Roles An organizations success increasingly depends on the knowledge, skills and abilities of its employees, particularly as they help establish a set of core competencies (activities that the firm performs especially well when compared to its competitors and through which the firm adds value to its goods and services over a long period of time, e.g. ONGC 's oil exploration capabilities and Dell's ability to deliver low cost, high-quality computers at an amazing speed) that distinguish an organization from its competitors. When employees talents are valuable, rare, difficult to imitate and organised, a firm can achieve sustained competitive advantage through its people. The strategic role of HR management focuses attention on how to enable ordinary employees to turn out extraordinary performance, taking care of their ever-changing expectations. The key areas of attention in this era of global competition include effective management of key resources (employees, technology, work processes), while delivering cost effective, value enhancing solutions Change agent: Strategic HR as it is popularly called now aims at building the organizations capacity to embrace and capitalize on change. It makes sure that change initiatives that are focused on creating high-performing teams, reducing cycle time for innovation, or implementing new technology are defined, developed and delivered in a timely manner. The HR manager in his new avtar would help employees translate the vision statements into a meaningful format (Ulrich, 1998). HR's role as a change agent is to replace resistance with resolve, planning with results and fear of change with excitement about its possibilities. HR helps an organization identify the key success factors for change and assess the organizations strengths and weaknesses regarding each factor. It may not decide what changes the organization is going to embrace, but it would certainly lead the process to make them explicit. In helping to bring about a new HR environment there needs to be clarity on issues like who is responsible

for bringing about change? Why do it? What will it look when we are done? Who else needs to be involved? , How will it be measured? How will it be institutionalized? How will it be measured? How will it get initiated, developed and sustained? Strategic partner: HRs role is not just to adapt its activities to the firms business strategy, nor certainly to carry out fire-fighting operations like compensating employees. Instead, it must deliver strategic services cost effectively by building a competent, consumer-oriented work force. It must assume important roles in strategy formulation as well strategy implementation. To this end, it must identify external opportunities from time to time, develop HR based competitive advantages and move in to close the gaps advantageously (like excellent training centre, design centre, automation centre etc. which could be used by others as well). While implementing strategies, HR should develop appropriate ways to restructure work processes smoothly. CHANGING WORLD OF WORK/ The Changing Environment of HRM The world of work as we know it is rapidly changing. Even as little two decades ago, the times were calmer than they are today. As part of an organization, then, human resource management (HRM) must be prepared to deal with the effects of the changing world of work. This means understanding the implications of

a) Globalization, b) Technology changes, c) Workforce diversity, d) Labor shortages, e) Changing skill requirement, f) Continuous improvement initiatives, g) The contingent workforce, h) Employee involvement.

a) Globalization (Discuss how cultural environment affect HRM practices?) Organizations are no longer constrained by national boarders. The world has become a global village producing and marketing goods and services worldwide. To be effective in this boundless world, organizational members need to adapt to cultures, systems, and techniques

different from their own. The rise of multinational corporations places new requirements on human resource managers. HR department must ensure that employees with the appropriate mix of knowledge, skills, and cultural adaptability

are available to handle global assignments. All countries have different values, morals, customs, political and economic systems, and legal systems. HRM need to understand societal issues, such as status, that might affect operations in another country. Flexibility & adaptability are key components for employees going abroad. To make this a reality, human resource managers must have a through understanding of the culture of the areas

around the globe in which they may send employees. HRM must also develop mechanism that will help multicultural individuals work together. HR managers must take cultural values into account when trying to understand the behavior of people from different

countries as well as those in different countries b) Technology changes (The changing world of technology) HRM operates in a technologically changing environment. How technology affects HRM practices Technology has had a positive effect on internal operations for organizations, but it also has changed the way human

resource managers work. HRIS allows HRM professionals to better facilitate human resource plans, make decision faster, clearly define jobs,

evaluate performance, and provide cost effective benefits that employees want. In order to cope with efficient technology and to ensure quality and innovation, organizations require skilled,

innovative and motivated workforce. The role of HRM is to plan for education, training and development of workforce to upgrade their existing level of knowledge, skill, and decision making capacity to adapt to technology changes. Technology helps to strengthen communication with both the external community and employee. How? Lets look at

some specific example. a) Recruiting: Posting jobs on company web sites, or through specific job search web sites such as,

careerbuilder.com and monster.com, helps human resource managers reach a large pool of potential job applicants and assist in determining if an applicants possess some of the basic technological skills.

b) Employee Selection: Many internet tools make background searches of applicants quick and easy. c) Training and Development: The internet has provided HRM opportunities to deliver web based training

and development to employees on demand. Teleconferencing technology allows employees to train and collaborate in groups regardless of their location.

d) Ethics & Employee Rights: The development of increasingly sophisticated surveillance software only adds to the ethical dilemma of how far an organization should go in monitoring the behavior of employees who work on computer.

e) Communication: Employees today can communicate with any individual directly without going through channels. Instantly anytime, with anyone, anywhere. These open communication system break down historical organizational communication pattern flow.

What are knowledge workers? Individuals whose jobs are designed around the acquisition and application of information. Knowledge worker include professional registered nurses, accountants, teachers, lawyers, and engineers. Technology has been an good news/bad news proposition for workers. While technology has reduced the demand for manufacturing jobs through automation and increased competition with

other countries, it has generated an increase in demand for service producing and technology positions. Peter Drucker, the late management scholar and consultant, held that the key to the productivity of knowledge workers

depends on the ability to use computer technology to locate and use information for decision making. c) Workforce diversity: The varied personal characteristics that make the workforce heterogeneous. Todays managers have found that employees do not set aside their cultural values and lifestyle preferences when they

come to work. The challenge therefore, is to make organizations more accommodating to diverse groups of people by addressing

different lifestyle, family needs, and work styles. How diversity affects HRM v As organizations become more diverse, employers have been adapting their human resource practices to reflect those

changes. v Workforce diversity require employers to be more sensitive to the differences that each group brings to the work

setting. v For instance, employers may have to shift their philosophy from treating everyone alike to recognizing individual

differences and responding to those differences in way that will ensure employee retention and greater productivity. v Employers must recognize and deal with the different values, needs, interests, and expectations of employees. v Employers must avoid any practice or action that can be interpreted as being sexist, raciest, or offensive to any

particular group and of course must not illegally discriminate against any employee.

d) Labor shortage The labor shortage problem is compounded by the fact that the later part of the 20th century benefited from a huge

increase in women entering the workforce and providing a new supply of talented and skilled workers. In times of labor shortage, good wages and benefits arent enough to hire and keep skilled employees. Human resource managers need sophisticated recruitment and retention strategies and need to understand human

behavior. In tight labor markets, managers who dont understand human behavior and fail to treat their employees properly, risk

having no one to manage. Issues the Contingent Workforce for HRM HR managers must make sure that contingent workers do not perceives as second class workers. As temporary workers are brought in, HRM will also have the responsibility of quickly adapting them to the

organization. HRM must also give some thought to how it will effectively attract quality temporaries. HRM must reexamine its compensation philosophy. HRM must discover specifically what theses employee want. Finally, HRM must be prepared to deal with potential conflicts between core and contingent workers. e) Continuous improvement initiative:

Organizational commitment to constantly improving quality of products or services or as the Japanese calls it, Kaizen.

How HRM can support improvement programs HRM must prepared individuals for the change. This requires clear and extensive communication of why the change will occur, what is expected, and its effect on

employees. Improvement efforts may change work patterns, operations, and even reporting relationships. Because change and fear are

often associated, employees may create barriers to change. HRM must be ready to help affected employees overcome their resistance.

f) Employee Involvement Employee involvement concept are delegation, participative management, work teams, goal setting, and employer training-the empowering of employees. Employee Involvement implications for HRM Employees expected to delegate to have decisions made within a group, to work in teams, or to set goals cannot do so

unless they know and understand what they are supposed to do. Empowering employees requires extensive training in all aspects of the job. Employees may need training in interpersonal skills to make participative management and work teams function

properly. g) Changing skill Requirement The vast spreads of technology require employees increased job skill requirement. Workers will need the ability to read and comprehend (understand) software and hardware manuals, technical journals

and detailed reports. Such increased skill provides organizations with the ability to innovate, brings products to market rapidly, and

responds to customer request.

o To facilitate customer demands and fulfill corporate expectations, today's employees must be more involved. o Group decision making gives these employees more inputs into the processes and greater access to needed

information. o Work teams are also an effective way to increase employee involvement. o Involving employees allows them to focus on the job goals. o With greater freedom, employees are in a better position to develop the means to achieve the desired ends.

The Changing role of Human Resource Professionals Since, a number of HR challenges created by the process of globalization, change in technology, need for managing human capital, raise profitability and make continuous change, v The role of HR managers has been rising to meet these challenges and grab opportunities for organization. v Due to an increasing demand of organizational excellence to work with environmental challenges and

opportunities, the role and responsibilities of human resource managers will continue to expand in future too. v Such excellence will increase when HR managers focus on; Strategic HR, creating high performance work system,

management of employees, etc. v Some importance role of HR professionals are;

1) Management of Strategic Human Resource

v Strategic human resource management means formulating and executing human resource policies and practices that produce the employee competencies and behaviors the company needs to achieve its strategic aim.

v In practice, HR managers strategic role means, partnering of HR managers with their top managers in both designing and executing their organizations strategies.

v For this HR managers follow following steps to the management of human resources; a) Defining an organizational architecture: At the time of organizational architecture, HR department has to

architect and define reward system, culture, governing style, work process and leadership to work in organizational strategy.

b) Conducting an organizational audit: organizational audit is done to find weak and strong components of organizations that hinder and support strategy implementation HR expert architect organization in terms of competencies, leadership etc. to implement it.

c) Working as strategic partner: HR experts involved into renovating (repair) the parts of the organization taking initiatives to improve compensation practices, performance evaluation system, team work etc.

d) Taking stock of own and setting clear priorities: HR managers have to find stock of suitable HR initiatives such as, performance based pay, participative management etc. and time to time evaluate effectiveness of these initiatives to gain certain business performance.

2) Creating high performance work system v A high performance work system is an integrated set of human resource management policies and practices that

together produce superior employee performance. v There is no hard and fast rule about what comprises high performance work system, most organizational

psychologists would agree they include these practices. Employment security Selective hiring Extensive training Self managed team and decentralized decision making Reduce status distinctions between managers and employee Information sharing Contingent rewards (pay for performance) Emphasis on high quality works

v In terms of measurable outcomes, high performance work system produce, more qualified applicants per position, more employee hired based on validated selection tests, more hours of training for new employees etc.

v Systems like these produce many benefits for employers. v Study found that high performance work systems produced fewer occupational injuries.

3) Measuring the Human Resource Management Teams performance v In todays performance based environment, employers naturally expect their human resource management teams

to provide measurable evidence of their efficiency and effectiveness, and for that of their proposed program. v E.g. How much will that new testing program save us in reduced employer turnover? v How much more productive will our employees be if we institute that new training program? v How productive is our human resource teams, in terms of HR staff per employee, compared to our

competitors? 4) Managing with the HR scorecard process

v The HR scorecard is a concise measurement system. v It shows the quantitative standards the firm uses to measure human resources activities (such as training,

compensation, safety etc.), and to measure the employee behavior resulting from these activities, and to measure the strategically organizational outcomes of those employee behaviors (such as higher plant performance, and company profit).

5) Management of employees: v The main role of HR managers is to ensure that employees are engaged that they feel committed to the

organization and contribute fully. v HR professionals have to involve in providing training for line management in methods of achieving high

employee morale, discuss employee problems with executive team, offer opportunity to personal and professional growth and provide

6) Becoming a change agent: v Because of globalization, innovation in production and information technology, pace of change is both shaky

(unsteady) and amazing (surprise). v HR professionals can play role on creating high performing teams, reducing cycle time for innovation, or

deploying (use effectively) new technology timely.

v HR professional can work to make broad vision statements (such as we will be global leader in our market), ask employees to work to achieve it.

v In such cases, HR can avoid resistance to change informing employees about benefits of change for them. International perspective of Human Resource Management; DEFINITION The human resource management issues and problems arising from the internationalism of the business, and the human resource strategies, policies and practices which firms pursue in response to the internationalization process.

Scullion v As an effect of the increasing trends of globalization, competition at the global level emerged in many markets and

the number of firms operating worldwide increased. v As a business grows from regional to national, to international size, the human resource management functions

must take on a new and broader perspective. v As a national company expands overseas, the human resource functions must adapt to changing and far more

complex environment. v All domestic functions of HRM become more complex when the organizations employees are located around the

world, and additional human resource management activities often are necessary that would be considered invasions (a persons right) of employee privacy in domestic operations.

v This is because of the increased vulnerability (harmed) and risk of terrorism. v Especially, required additional activities associated with staffing, and training and development. v Not only are organizations concerned about selecting the best employee for the job, they must also be aware of the

entire familys needs. Why? 1) Many individuals who take international assignments fail because their spouse or family cant adjust to the

new environment. 2) Relocation (Locate new place) and orientation process before departure may take month of foreign

language training and should involve not just the employee, but the employees entire family. 3) Detail must be provided for such as work visas, safety, travel, safety, household moving arrangement,

taxes, and family issues as the childrens schooling, medical care and housing. Three approaches to IHRM

Cross-cultural management approach v Examines human behavior within organizations from an international perspective.

Comparative HRM v Seeks to describe, compare and analyze HRM systems in various countries.

HRM in multinational enterprises (MNEs) v Explores the implications of the process of internationalization on HRM activities and policies.

Multinational corporations (MNCs) v Operations in many nations, but each is a separate enterprise v Each enterprise adapts products to the local culture v Most control remains with the home office v Most employees and managers are from the home country (polycentric staffing). Global corporations (GC) are structured so that national boundaries disappear v The best people are hired, regardless of national origin (geocentric staffing) v The national affiliation of an employee becomes less important than his/her area of expertise Categories of employees in an MNE

Parent-country nationals (PCNs) v Employees who were born and live in a parent country.

A parent (or home) country: the country in which a companys corporate headquarters is located. Host-country nationals (HCNs) v Employees born and raised in a host country.

Host country: a country in which the MNE seeks to locate or has already located a facility. Third-country nationals (TCNs) v Employees born in a country other than a parent or host country. Types of international work

1. Expatriates v An employee sent by his/her company in one country to work in a different country. 2. Global team project

v Bringing together employees from different locations to complete a specific team project.

3. Short-term assignments v Sending employees on assignments, such as a three-month assignment, to a foreign location. 4. Virtual assignment v Assignments requiring employees in different locations

to use information technology to communicate on job projects and tasks. MANAGEMENT OF EXPATRIATES What is an expatriate? v An employee sent by his/her company in one country to work in a different country. v An employee who is working and temporarily residing in a foreign country

Some firms prefer to use the term international assignees Expatriates are PCNs from the parent country operations, TCNs transferred to either HQ or another

subsidiary, and HCNs transferred into the parent country v Global flow of human resources

Factors associated with expatriate failure: v Uncertain technical competency v Weak language skills v Unsure about going overseas v Family problems v Low spouse support v Behavioral rigidity v Inability to adapt v Poor relational ability v Weak stress management skills

Factors associated with expatriate success: v Good technical and language skills v Strong desire to work overseas v Specific knowledge of overseas culture v Well-adjusted family situation v Complete support of spouse v Behavioral flexibility v Adaptability and open-mindedness v Good relational ability v Good stress management skills

Factors which differentiate international from domestic HRM v More HR activities v The need for a broader perspective v More involvement in employees personal lives v Changes in emphasis with variable mix of expatriates and locals in workforce v Risk exposure v Broader external influences

IMPORTANCE OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT v An increasing number of MNCs are in operations in many countries in recent years; v There is growing need for effective management of HR in these organizations. v To implement international business strategies by developing appropriate HR strategies for the recruitment and

development of international managers. v To minimize financial and human costs of failure in overseas appropriate.

RISING INTEREST IN HRM: In the recent years, since 1990s, the HRM is getting more importance. The every organization is giving importance to HRM and is a must also. The various factors responsible for raising the interest in HRM are:

1) Increasing Competition: internal and external competition. v To face the challenges created by rivalry actions the work force must be effective and committed. v For this the interest is rising in innovative human resource management policies and practices to face the growing

challenges of competition. 2) Pressure of Globalization v Globalization facilitated business activities without boarders, will have influence on the HR policies as well as

practices.

v To meet global requirements, HRM has to think over its policies as well as practices. v Issues like selection of qualified employees with language fluency to work in other countries, their training to work

are pertinent to HRM. v Working in cross cultural and cross country situations, employees have to be familiar with the country and its culture,

such as, the way people think, believe, and respect each other and talk. 3) Work force diversity v Workforce from different countries with different values and culture, education and training background and

representing different races and religions are participating in the same workplace. v It is getting bimodal educated professionals at one extreme and low skilled service workers at another extreme. v The HR managers can help line managers to minimize differences created by language, education, and age by

developing training and development policies. 4) Change in Technology v Today, technology is changing very rapidly, especially with innovation in information and production technology,

work efficiency and quality of product and services are expected to improve. v So, in order to cope with efficient technology and to ensure quality and innovation, organizations require skilled,

innovative and motivated workforce. 5) Increasing size and complexities of the organization v Modern organization are growing larger and larger, their size and expansion of business activities at the domestic and

international levels. v With the increase in size, complexities of managing them are also increasing. v Committed and competent human resources are needed to cope with the challenges of size and complexities. v This has led to rising interest in HRM. 6) Change management v In general every employee resists the change because of the uncertainty of their future. v So HR should be developed in well manner so that the committed employees can be produced which are essential to

manage the change. 7) Organizational effectiveness v It is the degree to which an organization achieves its goals through acquisition and efficient utilization of resource

with environmental adaptation. v This also needs the excellent HR which is possible through effective HRM. 8) Mistake avoidance v In the deficiency of effective HRM the organization may commit various serious mistakes on this ground. Like hiring

wrong person, following unnecessary times and cost consuming steps while recruiting, high labor turnover, poor motivation, etc. the interest in HRM is rising because managers like to avoid HRM related mistakes.

9) Human asset accounting v These days the big organizations are computing the value of their human assets along with financial assets for

accounting purposes. This has also added in the interest in HRM. 10) The contingent workers v Due to the increasing effects of globalization, downsizing, corporate restructuring and total quality management, have

an impact in the employment practices of the labor force. v There is increasing trends to employ contingent workers and decreasing trends to use lifetime employees. v The employment of contingent workforce does not only fulfill the peak time business needs of an organization but

also minimize the labor cost. v Similarly employees of this nature can work to maintain a balance between family and work and to earn an extra

income form part time jobs. v With a view to managing HR in the organization, contingent employees should be treated as strategic employees to

fulfill the just in time requirement in the increasingly competitive market situation. v If a HR department can recruit a quality contingent workforce, the firm can maintain in economy in the employment

process.

UNIT: 2 Human Resource Planning (HRP) concepts What is planning? v Planning is the process of establishing objectives and courses of action prior to taking action. v Planning also helps identify potential opportunities and threats, and facilitates control

Human Resource Planning (HRP) HRP is the process of systematically reviewing human resource requirements to ensure that the required number of employees, with the required skills, is available when they are needed. HRP is the process of predetermining future human resource needs and choosing courses of action needed to satisfy those needs. It involves the estimation of future size and composition of workforce of an organization the future human resource demand and the supply are examined under HRP. Human resource planning must be integrated within the organizations strategic plans. Human resource planning is the process of determining an organizations human resource needs. Decenzo and Robbins HRP ensures that the organization knows and gets what it wants in the way of the people needed to run the business now and in the future.

Michael Armstrong HRP systematically forecasts an organizations future supply of, and demand for, employee.

Wretner and Davis v The basic purpose of human resource planning is to have an accurate estimate of the number of employees required, with

matching skill requirements to meet organizational objectives. v It provides information about the manner in which existing personnel are employed, the kind of skills required for different

categories of jobs and human resource requirements over a period of time in relation to organizational objectives. v It would also give an indication of the lead time that is available to select and train the required number of additional

manpower. v Human resource planning has two components:

v requirements and v availability

v Forecasting human resource requirements involves determining the number and type of employees needed by skill level and location.

v In order to forecast availability, the human resource manager looks to both internal sources (presently employed employees) and external sources (the labor market).

v When employee requirements and availability have been analyzed, the firm can determine whether it will have a surplus or shortage of employees.

v Ways must be found to reduce the number of employees if a surplus is projected. v Some of these methods include restricted hiring, reduced hours, early retirements, and layoffs.

Restricted Hiring: When a firm implements a restricted hiring policy, it reduces the workforce by not replacing employees who leave. Reduced Hours: Reaction to a declining demand can also be made by reducing the total number of hours worked. Instead of continuing a 40-hour week, management may decide to cut each employees time to 30 hours. Early Retirement : Early retirement of some present employees is another means of reducing the supply of workers. Layoffs : At times, the firm has no choice but to actually lay off part of its workforce. If a shortage is forecasted v the firm must obtain the proper quantity and quality of workers from outside the organization. v In this case, external recruitment and selection is required.

Characteristics of Human Resource Planning (HRP) v Future oriented: it estimates the size and composition of future workforce. v Quantitative and qualitative: it estimates both numbers of employees and skills and competencies. v System oriented: it matches demand and supply forecasts to determine future shortages or surpluses; the need of

action plans are prepared. It looks at the unified whole of human resource management. v Either short term or long term v Integral part of corporate planning, it can be formulated at national, sectoral, industry and unit levels. v Concern with the acquisition function of the HRM.

Objectives of Human Resource Planning The goal of HRP is to keep a stable workforce that meets needs of the organization.

More specifically, HRP is required to meet the following objectives: 1) Forecast personnel requirements:

HR planning is essential to determine the future manpower needs in an organization. In the absence of such a plan, it would be difficult to have the services of right kind of people at the right time.

2) Cope with changes: HR planning is required to cope with changes in market conditions, technology, products and government regulations in an effective way. These changes may often require the services of people with the requisite technical knowledge and training. In the absence of an HR plan, we may not be in a position to enlist their services in time.

3) Use existing manpower productively: By keeping an inventory of existing personnel in an enterprise by skill, level, training, educational qualifications, work experience, it will be possible to utilize the existing resources more usefully in relation to the job requirements. This also helps in decreasing wage and salary costs in the long run.

4) Promote employees in a systematic manner: HR planning provides useful information on the basis of which management decides on the promotion of eligible personnel in the organization. In the absence of an HR plan, it may be difficult to ensure regular promotions to competent people on a justifiable basis.

Importance of Human Resource Planning Human Resource Planning is a highly important and useful activity. If used properly, it offers a number of benefits:

1) Reservoir of talent: The organization can have a reservoir of talent at any point of time. People with requisite skills are readily available to carry out the assigned tasks.

2) Prepare people for future: People can be trained, motivated and developed in advance and this helps in meeting future needs for high-quality employees quite easily. Likewise, human resource shortages can also be met comfortably (when people quit the organization for various reasons) through proper human resource planning.

3) Expand or contract: If the organization wants to expand its scale of operations, it can go ahead easily. Advance human resource planning ensures a continuous supply of people with requisite skills who can handle challenging jobs easily.

4) Cut costs/control: Planning facilitates the preparation of an appropriate HR budget for each department or division. This, in turn, helps in controlling manpower costs by avoiding shortages/excesses in manpower supply. It facilitates control mechanism by setting standards. The physical facilities such as canteen, quarters, school, medical help, etc., can also be planned in advance.

5) Acquisition of Human Resource It facilitates requirement and selection of employees to fill job vacancies. It also facilitates Succession planning; HRP, as pointed out previously, prepares people for future challenges. The stars can be picked up and kept ready for further promotions whenever they arise. When the time comes, such people switch hats quickly and replace their respective bosses without any problem. It also helps to make outsourcing decisions for human resources. It provides lead time for recruitment and selection.

6) Improved labor relations: HRP promotes awareness about the importance of human resources at all levels of organization. This ensures commitment of all levels of managers to human resource goals. It also assists in collective bargaining with labor unions.

7) Helps in planning job assignments Steps in Human Resource Planning (HRP)

1) Analysis of organizational plan and objective and setting HRM objectives: It is the most major aspect of every HRP. HRP begins with the analysis of the overall plan of the organization and departmental, sectional, and functional plans. Likewise the objectives are also analyzed if the objective is to grow and expand it requires more HR. In accordance with the companys long term and short term objectives the HRM sets its objectives.

2) Assessing current HR: The HRP starts with the assessment of current status of HR that the organization possesses. It is on the basis of the current capabilities and future needs that we make HRP for future. What type of people do we have? Their skill level, potentially, productivity, special characters and lot of other features of the HR, this is done with the help of HR inventory. This step is also known as the HR audit.

3) Forecasting HR: this means the demands forecasting. In this steps HR department has to find what quality and quantity of HR to the organization needs in future. It is done with the reference of future plan, policy, programme and projects of the organization. Every company must determine its specific need in its situation (exact number and skill required). No company can afford to maintain any idle human capital, idle inventory of human capital will not only results in unnecessary inventory carrying cost, but lead to serious consequences in terms of industrial unrest, low morale, industrial dispute and so on since an idle brain creates many idle brains. It is more dangerous to keep idle manpower in an organization than keeping other resources.

4) Supply Forecasting: Under a forecasting of supply, the HR department has to look after two sources; Internal sources; promotion, transfer, etc. Eternal sources; schools, college, job markets, and all the job seeker in the labor markets. Firstly, in general the internal sources are assess then if not sufficient then the organization approaches for the external sources

5) Matching the demand and supply: Now, in the step of HRP demands and supply forecast are matched to determine future shortage or surpluses of HR in terms of quality and quantity. If the shortage is found, then the additional staffs

are approached. If there is surplus of staffs then retrenchment is necessary. The early retirement, layoff, leaves, reduced work hours are the general strategies so as to overcome the problem of over staffing.

6) Preparation of action plan: This step is concerned with the preparation of action plans to deal with shortage and surpluses of human resources. Action plan if prepared for recruitment, redeployment, promotion, transfers, retention, succession etc.

Requirements of effective HRP: a) Strategic: HRP should be recognized as an equal partner of overall organization strategic plan and

its implementation. There should be close relation between strategic corporate planning and HRP. b) Top management support: For the effectiveness of the HRP, top management should extend

total support to HRP. Personnel philosophy as well as managerial philosophy of top management should support the HRP; otherwise it cant be implemented effectively.

c) Employee participation : HRP is concerned with the entire HR of the organization, when some representatives are involved in planning process then its implementation becomes very easy due to the feeling of ownership.

d) Coordination of all functional areas: The other areas besides HR department are also concerned with HRM, their needs, their demands, should also be considered while planning. The coordinated activities will help to plan the HR.

e) Information system: Planning needs a lot of information, human resource information system should be established to provide up to date information about employees and jobs. In general the information system of HR includes personal data, skills data, position, compensation data, and job data.

f) Long term Horizon: HRP should provide long term directions (about 10 20years) for his strategic HRP should prepare. But, it should be revised in the light of actual scenarios and implementation experiences.

g) Capability: HRP is professional job; people responsible for HRP should be capable and should possess planning skills.

Human Resource Information system (HRIS) What is Human resource Information System (HRIS)? v The HRIS is a database system that keeps important information about employees in a central and accessible location. v When such information is required, the data can be retrieved and used to facilitate employment planning decisions. v The application of computers to employee-related record keeping and reporting, and management decision making. v HRISs are systems used to collect, record, and store, analyze, and retrieve data concerning an organization's human

resources. v Basically, HRIS is a computer based system developed for the storage and analysis of the records about employee.

It gives accurate information It does fast processing of data It works as a valuable tool to strategic planning and its implementation It gives instant information relating to existing HR Act as a decision support system It is time efficient and provide reliable information It establish strong management control

Information categories of Human resource Management System Group 1 Basic non confidential information v Employee name v Organization name v Work location v Work phone number

Group 2 General non confidential information v Information in the previous category plus; v Social security number v Other organization information (code effective date) v Position related information (code, title, effective date)

Group 3 General information with salary v Information in the previous category plus; v Current salary, effective date, amount of last change, type of last change, and reason for last change.

Group 4 Confidential information with salary v Information in the previous category plus;

v Other position information (EEO code, position ranking etc.) v Education data

Group 5 Extended confidential information with salary v Information in the previous category plus; v Bonus information, projected salary increase information, performance evaluation information

Nature and benefits of HRIS v Modern human resource information systems are comprehensive, accurate and accessible systems for recording

employee and work data relevant to HRM, HR and organizational planning. v HRIS is:

The system used to acquire, store, manipulate, analyze, retrieve and distribute pertinent information regarding an organizations human resources.

Its purpose is to facilitate, or support, straight, tactical and operational decision making, to avoid litigation (a judicial contest), to evaluate programs, policies, or practice and daily operations.

Specific benefits of HRIS Improved planning and program development using decision support software. Faster information processing and improved response times Decreased administrative and HR costs Enhanced Communication at all levels. It gives accurate information It does fast processing of data It works as a valuable tool to strategic planning and its implementation It gives instant information relating to existing HR Act as a decision support system It is time efficient and provide reliable information It establish strong management control Better safety Competitive Advantage Fewer Errors Higher Quality Products Improved Health Care Increased Efficiency

Uses of HRIS v Comprehensive and integrated information systems can be used widely -in administrative, operational and

strategic fields by HR and other managers. v On the operational level HRIS data can be used

to identify potential internal applicants for job vacancies, saying external recruitment costs and Assuring employees of career opportunities.

v Strategically, such information may be used to gauge the effectiveness of current recruitment or promotional systems, their costs and/ or benefits, and enable subsequent changes of direction in line with proposed organizational strategies.

Common HRIS Functions Mainly following functions are performed by the HRIS in different organizations.

Job analysis information can be placed in the HRIS. The program can write job descriptions and job specifications. Constant monitoring of compliance with EEO legislation. Saves money and time in compiling reports. Ensure that women and minorities or not be adversely affected. Track minority hiring, recruitment, and advancement. Forecast supply and demand of labor from both the internal and external labor markets. Useful for internal recruiting. Can search for match between job specifications and applicant qualification. Scanning resumes submitted online (web based or e-mail) or in person (or mail). Matching qualifications with open positions (finding a good fit). Help with registration, tracking training, monitor training costs, and schedule training. Used to deliver training. Career and managerial succession planning. Used to provide assessment tests to help employees plan their own career.

Predict career paths. Monitor attendance. Monitor compliance with Labor Standards. Individual sale data can be accessed (tracking commissions). Benefits can be managed and administered by computers. Planned raises and wage histories. Provides reports for Occupational Safety and Health Administration (OSHA).

Strategic HR planning and HR information systems Proactive HR managers ensure that their HRIS contributes to organizational performance. A recent development in the uses of HRIS in many has been the linking of 'benchmarking' practices to the design, choice and implementation of such systems as a directly strategic initiative. Integration with organizational strategic objectives is achieved by the subsequent establishment of performance targets and quantitative measures. As a strategic 'tool', HRIS can be used to contribute to the development and modification of HR plans, on both quantitative and qualitative bases, and to feed into specific HRM functions. HR data, if collected effectively and contained within computerized, accessible systems, can both compare organizational HR 'bottom line' outcomes by HRM function, between functions and with national or international performance benchmark Human Resource Inventory HR inventory is the statement that shows the current HR strength of an organization in terms of number, skills, knowledge, exposure, experience and ability etc. v Human Resources Inventory is an inventory of skills of human resources currently employed in the organization. v It tells management what individual employees can do. v The profile of the human resource inventory can provide information for identifying current or future threats to the

organization's ability to perform. The basic purpose of preparing manpower inventory is v to find out the size and quality of personnel available within the organization. v Every organization will have two major sources of supply of manpower: internal and external.

Contents of HR inventory Personal detail

Name of the employee: Date of Birth and Age Gender

Capability Academic qualification In house training External training Domestic and international

Management Development programmes Professional details Joined as

Current position Career progression Last promotion 1 Last promotion .2

Rewards Disciplinary actions

1. 2. .. 3. .

Benefits of HR inventory v Enables the management of know what capabilities it management has v Useful for planning, selection, training, promotion and transfer planning. v Makes easy to take transfer, deployment decision v Makes easy to diversify the strength v Provides information for career succession plans. SUCCESSION PLANNING

v In addition to the computerized HRIS, some organizations also generate a separate management inventory report which is also called a replacement chart, covers individuals in middle to upper-level management positions.

v Forecasting the availability of inside executive candidates. Definition v The ongoing process of systematically identifying, assessing and developing organizational leadership to enhance

performance. v The process of ensuring that a qualified person is available to assume a managerial position once the position is

vacant. v To facilitate succession planning ensuring that another individual is ready to move into a position of higher

responsibility- the replacement chart highlights those positions that may become vacant in the near future due to retirement, promotion, transfers, resignations, or death of the incumbent.

The succession planning aims; v To identify and develop employees to fill specific slots, talent management v Talent management involves identifying, recruiting, hiring and developing high potential employees.

Succession Planning entails in three steps; Step -1 Identifying and analyzing jobs: based on firms strategic goals, top management and HR director identify what the companys future key position needs will be, and formulate job descriptions and specification for them. Step -2 v After identifying future key position needs, management turns to the jobs of creating and assessing candidates for these

jobs. v Creating means identifying potential internal and external candidates for future key positions, and then providing them

with the developmental experience they require to be viable candidates when its time to fill the position. v Organizations develop high potential employees through a variety of means. Most use: internal training and cross

functional experiences they also use job rotation, external training and global regional assignments. Step 3 Succession planning assessing these candidates and selecting those who will actually the key positions.

Benefits of succession planning A survey shows that succession planning programs were perceived to have a positive impact on an organizations profitability, organizational culture, and organizational efficiency. Some of the general benefits of the succession planning are listed below 1 Provide a specific connection to business and strategic planning. 2 Provides a more systematic basis to judge the risks of making particular succession and development moves. 3 Reduce randomness of managerial development movements. 4 Helps to anticipate problems before they get started. 5 Increase managerial depth which can be called on as needed. 6 Improve the identification of high potential and future leader. 7 Broadens the use of cross functional development techniques to improve competencies and quality of decision making. 8 Improves internal promotion opportunities. 9 Overcome the limitations of reactive management approaches and goes to planned management of managerial positions. 10 Establishes a logical basis for choices among qualified candidates. 11 Improves fulfillment of EEO objectives. Replacement chart v HRM organizational charts indicating positions that may become vacant in the near future and the individuals who may

fill the vacancies. v This readiness chart gives management an indication of time frames for succession, as well as helping to spot any skill

shortages. v If skill shortages exist, HRM can either recruit new employees or intensify employee development efforts. v Through replacement charts or succession plans, the organization can even find out the approximate date(s) by which

important positions may fall vacant. FIG: Management Replacement Chart showing development Needs of Potential Future divisional Vice presidents

DIVISION VICE PRESIDENTS

PRESEENT PERFORMANCE PROMOTION POTENTIAL Outstanding Ready now Satisfactory Need for training

Need improvement Questionable JOB ANALYSIS v A job analysis is a systematic exploration (examine in detail) of activities within a job.

Decenzo and Robbins v Job Analysis is the systematic process of collecting and making judgments about all the important information related to a

job. Result of job analysis serve as an input for many human resource activities. E.I. Mcormick

v It is technical procedure used to define a jobs duties, responsibilities, and accountabilities. v Job analysis is a formal and detailed examination of jobs. v It is a systematic investigation of the tasks, duties and responsibilities necessary to do a job.

v A task is an identifiable work activity carried out for a specific purpose, for example, E.g. a telephone operator receives the incoming calls.

v A duty is a larger work segment consisting of several tasks (which are related by some sequence of events) that are performed by an individual, for example, pick up, sort out and deliver incoming mail.

v Job responsibilities are obligations to perform certain tasks and duties. v Position: It consist of a group of task performed by one person. All task performed by telephone operator consist of

his/her position. v Responsibility: An obligation to perform certain tasks and duties. v Job: A group of tasks that must be performed if an organization is to achieve its goals. There will be several people

performing them. v This analysis involves the identification and description of what is happening on the job. Accurately and precisely

identifying the required tasks, the knowledge, and the skills necessary for performing them, and the conditions under which they must be performed.

Job analysis is the procedure through which you determine the duties and nature of the jobs and the kinds of people who should be hired for them.

Job analysis is an important personnel activity beca