Human Resource Management

Dr. M.VenkatesanAssociate Professor

Human Resource ManagementIntroductory Session

EPGDIB (2014-2016 Batch)

Compiled byDr. M.Venkatesan

Delegation of Work / Mandate Set by the Management

Dilbert Cartoons on Carbert HR Manager and others

Employees Perspective on HR

Reverse Employee Motivation

(Anti) Catbert –HR Person in Dilbert

Chris was the senior Human Resource Director for a major business unit of a large company. He was concerned about the team behaviour of his clients: the senior line management of his organization. He arranged they all go to a weekend off-site meeting with skilled organizational development (OD) professionals to work more strategically as a team.

On the Monday following the off site, the Senior Leader returned to work full of enthusiasm and called Chris to his office. He told Chris the weekend had been a fantastic success and the leadership team had come up with a bunch of new values and behaviours they wanted everyone in the organization to adhere to. He asked Chris to get with the internal communications department to deploy the new approach to all 50,000 employees in the organization within 10 days.

Chris being a person of some courage and integrity, said: ‘Boss, I am not going to do that. I have a better suggestion: why don’t you and the leadership team simply agree to behave in the new ways, but don’t tell anyone what is going on. Now if in the next few weeks, people start coming up to me and asking: ‘what’s going on? Meetings have a different focus and are being handled better; we are working on the right stuff for a change, we seem to have a strategy etc.’ ‘Then I think we know we are on a roll. At that point, I will get my OD people to construct a good survey process and we can measure and then improve on the progress we find. But I am not going to get them to design the survey right now, because I doubt we will ever need it. I predict that you and your team cannot change their leadership style in a way that anyone will notice, and to announce that you are will merely generate destructive cynicism. There is no downside to just doing it without fanfare.’

The boss was silent and did not repeat his request. When HR takes stands like that it has moved beyond Catbert and got some guts.

System Model

Organization System

HR System

Non Technical Areas of Organization: An Analogy

Functions of HRM Managerial Functions

Planning Organization Staffing Directing Controlling

Operative Functions Procurement of personnel Development of personnel Compensation to personnel Maintaining good industrial relation Record keeping Personnel planning and evaluation

Human Resource Management

HRM is a management function that helps managers recruit, select, train and develop members for an organization. It is concerned with the people’s dimension in organizations.

Management is a function of planning, organizing, directing, and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives are accomplished.

- Edwin B. Flippo

Objectives of HRM Social Objectives:

To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization.

Organizational ObjectivesTo recognize the role of HRM in bringing about

organizational effectiveness.

Objectives of HRM

Functional objectivesTo maintain the department’s contribution at a level appropriate to the organization’s needs.

Personnel ObjectivesTo assist employees in achieving their personal goals, at least insofar as these goals enhance the individuals contribution to the organization.

Environment of Human Resource Management

EXTERNAL ENVIRONMENTINTERNAL ENVIRONMENT

1

Human Resource

Management

Other Functional

Areas

OperationsMarketing

Finance

Lega

l Con

side

ratio

ns E

cono

my

Technology

Society

Shareholders

Unions

Customers Competition Labor Market

Human Resource

Development

Com

pens

atio

n

Staffing

Em

ployee and

Labor Relations

Safety and Health

Unanticipated E

vents

Importance of HRM

“The proper or improper use of the different factors of production depend on the wishes of the human resources. Hence, besides other resources human resources need more development. Human resources can increase cooperation but it needs proper and efficient management to guide it”

Peter F. Drucker

Importance of HRM1. It helps management in the preparation adoption and

continuing evolution of personnel programmes and policies.

2. It supplies skilled workers through scientific selection process. 3. It ensures maximum benefit out of the expenditure on training

and development and appreciates the human assets. 4. It prepares workers according to the changing needs of

industry and environment. 5. It motivates workers and upgrades them so as to enable them

to accomplish the organisation goals. 6. Through innovation and experimentation in the fields of

personnel, it helps in reducing costs and helps in increasing productivity.

7. It contributes a lot in restoring the industrial harmony and healthy employer-employee relations.

8. It establishes mechanism for the administration of personnel services that are delegated to the personnel department.

Line managers’ HRM responsibilitiesLine managers’ HRM responsibilities

a. Job placing.b. Orienting new employees.c. On-job training of employees.d. Interpreting company policies and

procedures.e. Conducting job appraisals.f. Controlling labor costs.g. Labor protection and disciplines.

Staff managers’ HRM responsibilitiesStaff managers’ HRM responsibilities

a. A line function: directing and managing people in the HRM department.

b. A coordinating function: coordinating HRM activities across the organization.

c. Staff functions: Same as the HRM functions plus labor

relations and collective bargaining with the trade unions.

Future Challenges before the Managers

Increasing size of workforce Increase in education level Technological advances Changes in political environment Increasing aspirations of employees Changing psychosocial system Computerized information system Mobility of professional personnel Change in legal environment Management of human relations

International ContextIncludes:International Agreements

Corporate Strategy

National ContextIncludes:culture political/legislative economic social patterns of ownership etc.

HRM StrategyIncludes:integration devolvement to line employment policies involvement policies reward policies work systems etc.

National HRM ContextIncludes:education/training labor markets trade unions industrial relations etc.

HRM PracticeIncludes:selection performance appraisal rewards development industrial relations communication etc.

Environment Organization

Contextual Model of HRM

Employee Champion

Administrative Expert

Operational Focus

Strategic Focus

Change Agent

Strategic Partner

HR Role Framework

Source: Conner J. Ulrich D. (1996). “Human Resource Roles: Creating Value Not Rhetoric” Human Resource Planning September

People

Process

Performance Selection Appraisal

Rewards

Development

The Michigan Matching Model of HRM

StakeholderinterestsShareholdersManagementEmployee groupsGovernmentCommunityUnions

HRM PolicyChoicesEmployee

influenceHuman

Resource flowReward systemsWork systems

HR OutcomesCommitmentCompetenceCongruenceCosteffectiveness

Long-termconsequencesIndividual well

beingOrganizational

effectivenessSocietal well-

beingSituationalfactorsWork force

characteristicsBusiness strategy

and conditionsManagement

philosophyLabor marketUnionsTask technologyLaws and societal

values

The Harvard Model of Human Resource Management

Role of HRM departments

Differing roles in different countries. Some more administrative some more

strategic As some of the administrative work is

outsourced or computerised, there can be more emphasis on strategic role.

Role of HRM department

Is it represented on the board of directors

Is it involved in strategic management

Where was the HR manager recruited

New Role of HRM

A facilitator of change An integrated approach to

management A mediator

Functions of HR Manager

Intellectual Educator Discriminator Executive Leader Humanist Visionary

Traditional Human Resource Functions in a Large Firm

President and CEO

Vice President, Marketing

Vice President, Operations

Vice President, Finance

Vice President, Human

Resources

Manager, Training and Development

Manager, Compensation

Manager, Staffing

Manager, Safety and

Health

Manager, Labor

Relations

A Possible Evolving HR Organization Example

President and CEO

Vice President, Operations

Vice President, Strategic Human

Resources

Vice President, Finance

Director of Safety

and Health

Training & Development (Outsourced)

Compensation (Shared Service

Centers)

Staffing (Line Managers, Use of Applicant Tracking

Systems)

Vice President, Marketing

SHIFTS THAT ARE RE-SHAPING HR ROLES

FROMLocal markets, operations Manufacturing, clerical workHierarchyIntermediaries; face-to-face Obedience to formal authorityStability, efficiency, controlFull time jobCustomer serviceWork done by employeesFixed work locationManagement prerogativeLoyal serviceWhite, male workforceFinancial performance“Get a job”

TOGlobal markets, operationsService, knowledge workNetworksDirect access,virtual relationshipQuestioning of formal authorityChange, creativity, flexibility, orderPart-time and project workShareholder, stakeholder valueWork done by many contributorsDiverse work locationsSocial licenceMarketable knowledge, skillsDiverse workforceTriple bottom line“Get a life”

HR EXECUTIVES’ VIEW OF THE FUTURE

TOP 5 BUSINESS CHALLENGES

Developing new markets

Improving profitability

Market share growth

Becoming the recognised global market leader

Building shareholder value

TOP 3 HR CHALLENGES

Attracting and retaining talented people

Improving organisational capabilities

Developing leadership skills

Source: Arthur Andersen survey of HR Executives in almost 70 Australian-based firmsReported in HR Monthly, August 2001, p.17

Traditional HR versus Strategic HR

HR Factors in the SWOT Analysis

Key HR Metrics

The Role of HR

PeopleProcesses

Future / Strategic Focus

Day to Day Operational Focus

Strategic Partner• Strategic HR Planning• HR as Business Partner• Culture and Image

Change Agent• Staffing• Organizational design• Survey action planning• Performance measurement• Training and development

Employee Relations Expert• Employee relations• Labor relations• Safety & workers’ compensation• Diversity and EEO

Administrative Expert• Compensation• Benefits• HR information systems• Compliance

Administrative Expert

Compensation Payroll as %--total operating costs (benchmarked); compensation targets benchmarked against peer companies; turnover rates; quality of management review and Board material.

BenefitsMedical cost per participant; dental cost per participant; 401K employee participation rate; $ saved in union negotiations.

HRIS Systems Support HRIS implementation on time and within budget; customer satisfaction.

Compliance# New EEO Charges; # Old EEO Charges Closed; Progress on AA Goals; Outcomes of Inspections and Audits.

Employee RelationsTurnover rates, “Best Place to Work” rankings, legal compliance, efficiency, union activity (or lack thereof).

Labor RelationsAbsence of the extreme negative (strikes, slowdowns, sit-downs, boycotts); $ outcome of new contracts, both immediate & longer term; timeliness & quality of new contracts; productivity per employee; safety & quality measures.

Safety and Workers’ Compensation

Employee Relations Expert

# Incidents & $ value of accidents; # employees trained; % required training & certifications completed; audit results.

Diversity & EEOAttitude survey measures of perceived fairness; # people trained in Diversity Awareness and Diversity Leadership programs; perceived tolerance.

StaffingRs to Fill; Days to Fill; # Filled; Quality of Hires; Retention of Hires.

Organizational DesignBenchmarking headcount; effectiveness of communications & key processes (no bottlenecks); spans and layers; management ratios.

Survey Action Planning Employee satisfaction results at the work group level; rolled up to Business Unit level; norms available for Business Unit analysis.

Performance ManagementPerformance Reviews: Timeliness and Quality; #/ % Positions with written accountabilities and measures; other measures vary with the position.

Training & Development# Programs; # Days/Person Training; Impact of Training; effectiveness measures within new groups.

Change Agent

Strategic HR Planning

Quality of succession management program assessment. Quality of Bench Strength. Quality of Succession Plan Follow-up (% Actions Completed).

HR as Business Partner

Any business measure of effectiveness. 360-Degree Feedback on the extent to which HR is considered a partner by those they support.

Culture and Image

Employee Satisfaction data; quality of the description and utilization of culture & image understanding; standing on the Fortune 100 Greatest Places to Work.

Strategic Partner

The role of HR

Moving from a centralised to decentralised HR model

Trend towards management through cost-centre profit-centre based approach

Line managers are more in contact with employees. They have the main responsibility for performance.

Issue of responsiveness to customers. A move towards reducing overhead and

realtime staffing.

Pressures slowing the devolvement to line managers

Line managers not enthusiastic to take on HR activities

Line managers may regard HR activities as a lower priority

Not enough training and support to line managers in HR duties

Literature Review On EI, Fenton-O’Creevy’s (1998) survey of HR

directors/ MDs/ and equivalents found that “positive outcomes of employee involvement were lower in organizations that experienced middle management resistance”

Fenton-O’Creevy’s later (2001) study of managers’ attitudes to EI found their attitudes “to be no more negative than those of senior managers”, and concluded that where EI schemes fail “senior managers may simply be scapegoating middle managers”, and that middle manager resistance to change “may be seen by the middle manager concerned as pragmatic adaptation”

Line Manager’s Perspective

Line manager involvement in grievance and discipline cases includes work on supervisor and managerial preferred handling styles. This research found that most organisations had tended to ask HR managers to “sit in” in these meetings, to “police” line managers and to ensure that good outcomes prevailed (Rollinson et al., 1996).

Marks & Spencer Introduction of new technologies like HR

shared services and e-HR to deliver HR advice and services to the line has brought problems, notably a questioning of the impact that such changes would have on line manager workload, seen at British Nuclear Fuels, and the willingness of line managers to take on more HR work, seen at Marks & Spencer (Deeks, 2000).

Integration and devolvement

Degree of integration of HRM into business strategy

Degree of devolvement: the degree to which HRM practive involves and gives responsibility to line managers rather than personnel specialists

Mechanics (low integration and low devolvement)

Specialist, but limited skills and interests of HRM practitioners. Professional personnel manager with higher’

imperatives than the organization. Belief that specialist knowledge is beyond the scope of untrained people.

Focus on the mechanical requirements of the function.

Increasing isolation from strategic interests of the organization.

wild west (low integration and high devolvement)

Individual manager free to develop his/her own employee relationship.

lncreased power to hire and fire, reward and develop employees.

Potential for incoherence, inconsistency and strong employee reactions.

Guarded strategists (high integration but low devolvement)

Specialists powerful figures in the organization.

Close liaison with senior managers to develop strategy.

Large and influential departments with centralized control of policies.

Better line managers frustrated with lack of control, poor managers welcome lack of responsibility.

Pivotal (high integration and high devolvement)

Senior personnel managers act as catalysts, facilitators and co-ordinators.

Small, but powerful departments. Monitoring of and internal consulting on HRM

developments. Responsibility and authority devolved to the

line. Problems with resourcing high-calibre

business- orientated HRM managers.

HR Continues to Evolve

Labour Relations

Employee Relations

Personnel Human Resources

Organizational Effectiveness

Safety & Workers’ Compensation

Compliance Compensation Performance Management

HR Information Systems (HRIS)

Labour Relations

Benefits Training & Development

EEO / AA Performance Management

Employee Relations

Survey Action Planning

Organizational Design

HR as Business Partner

Strategic HR Planning

Culture & Image

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Measuring HR’s Contribution

Strategy The company’s long-term plan for how it will balance

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

HR managers today are more involved in partnering with their top managers in both designing and implementing their companies’ strategies.

Top management wants to see, precisely, how the HR manager’s plans will make the company more valuable.

Balance Scorecard

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HR Metrics Absence Rate

[(Number of days absent in month) ÷ (Average number of employees during mo.) × (number of workdays)] × 100

Cost per Hire(Advertising + Agency Fees + Employee Referrals + Travel cost

of applicants and staff + Relocation costs + Recruiter pay and benefits) ÷ Number of Hires

Health Care Costs per Employee Total cost of health care ÷ Total Employees

HR Expense FactorHR expense ÷ Total operating expense

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HR Metrics (cont’d) Human Capital ROI

Revenue − (Operating Expense − [Compensation cost + Benefit cost]) ÷ (Compensation cost + Benefit cost)

Human Capital Value Added Revenue − (Operating Expense − ([Compensation cost + Benefit

Cost]) ÷ Total Number of FTE

Revenue FactorRevenue ÷ Total Number of FTE

Time to fillTotal days elapsed to fill requisitions ÷ Number hired

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HR Metrics (cont’d) Training Investment Factor

Total training cost ÷ Headcount

Turnover CostsCost to terminate + Cost per hire + Vacancy Cost +

Learning curve loss

Turnover Rate[Number of separations during month ÷ Average number of

employees during month] × 100

Workers’ Compensation Cost per EmployeeTotal WC cost for Year ÷ Average number of employees

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Measuring HR’s Contribution

The HR Scorecard Shows the quantitative standards,

or “metrics” the firm uses to measure HR activities.

Measures the employee behaviors resulting from these activities.

Measures the strategically relevant organizational outcomes of those employee behaviors.

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Benefits of a High Performance Work System (HPWS)

Generate more job applicants Screen candidates more effectively Provide more and better training Link pay more explicitly to performance Provide a safer work environment Produce more qualified applicants per position More employees are hired based on validated selection

tests Provide more hours of training for new employees Higher percentages of employees receiving regular

performance appraisals.

Thank you