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MANAGING HUMAN

RESOURCES

NEHA VERMA

Assistant Professor

Department of management

Amity University

Vayu Education of India2/25, Ansari Road, Darya Ganj, New Delhi-110 002

(An ISO 9001:2008 Certified Company)

Managing Human Resources

Copyright ©VAYU EDUCATION OF INDIA

ISBN: 978-93-82174-93-6

Edition: 2013

Price: 190/-

All rights reserved. No part of this publication may be reproduced, stored in a

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(An ISO 9001:2008 Certified Company)

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Preface

This book is primarily designed to help student in human resource management

(HRM) develop their knowledge and skills in the strategic issues facing them and their

organizations in future. Very high on both lists was the issue of e-HR, the application

of new information and communications technologies to the HR function and the

function of HR. And given the role that technology can play in addressing operational,

service delivery and strategic issues in HR, this came as no surprise.

.The capability of HR managers and the HR function to use new information and

communications technologies (ICT) to change their 'business model' - their ways of

working to deliver strategic advantage. This is sometimes known as the transformational

dimension of e-HR and is only rarely a feature of current applications of technology to

the HR function, but one that is slowly growing in importance.

-Neha Verma

ACKNOWLEDGEMENTS

A lot of effort has gone into this book and my thanks are due to many people with

whom I have been closely associated. I am grateful to all my colleagues, who gave us

valuable guidance in preparing the material. This contribution is gratefully

acknowledged.

I wish to record my sincere appreciation and thanks for the help I received from

my family in the completion of this book. I also thank to the team of my publishers,

who has been instrumental throughout in shaping the fine get up of the book.

I shall consider my efforts to be amply rewarded if the book serves the needs of

the students to the best of their advantage.

-Neha Verma

Contents

Preface .......................................................................................................... (v)

1. Introduction To Human Resource Management...................................... 1

Managing People ............................................................................................12

Summary ........................................................................................................23

Discussion Questions .....................................................................................24

Review Questions ........................................................................................... 24

Case Study .....................................................................................................24


Exercises ........................................................................................................34

2. HRM Functions and Objectives, Evolution HRM of Environment ... 37

Objectives of HRM .........................................................................................43

Industrial Revolution Era ................................................................................46

1945 - 1979 Started Collective Bargaining Power And Industrial Relation

Have Primacy Role To Play. ...........................................................................46

Rising Role of Hrm .........................................................................................47



Company Case: Scottish Power .....................................................................60

Exercises ........................................................................................................67

3. Human Resource Planning ........................................................................ 69

Resourcing Information ................................................................................. 74

Selection Strategies ........................................................................................75

Redundancy ....................................................................................................76



Case Study .....................................................................................................78

4. Human Resource Information System, Accounting and Audit.............. 86

Areas of Human Resources Audit ..................................................................96

Benefits of HR Audit .......................................................................................97

Approaches to HR Audit .................................................................................98

x Managing Human Resources

Management by Objectives (MBO) Approach ...............................................99

Discussion Questions ...................................................................................101

Review Questions .........................................................................................101

Case Study ................................................................................................... 102

5. Recruitment and Selection in Human Resource Management .......... 107

Sources of Recruitment ...............................................................................109

Factors Affecting Recruitment .....................................................................109

Recruitment Policy of a Company ............................................................... 110

Components of The Recruitment Policy ...................................................... 110

Factors Affecting Recruitment Policy .......................................................... 111

Case let ......................................................................................................... 112

CAMO Technologies Recruitment Process ................................................. 112

Resourcing Process ..................................................................................... 114

Selection Procedure ..................................................................................... 115

Review Questions ......................................................................................... 117

6. Training and Development ....................................................................... 119

Training ........................................................................................................120

Education ......................................................................................................120

Development .................................................................................................120

Purpose of Training and Development .........................................................121

The Training Process ...................................................................................122

Identifying Training Needs ...........................................................................123

Selection of Trainees ....................................................................................124

Training Goals .............................................................................................. 124

Training Methods ......................................................................................... 125

Trainers ........................................................................................................ 126

Training Administration ................................................................................127

Evaluation of Training .................................................................................. 128

Process of Training Evaluation ....................................................................129

Models of Training ....................................................................................... 129

The Training System .................................................................................... 130

Issues in Training .........................................................................................136

Case Study ................................................................................................... 141

Conclusion ....................................................................................................147


Review Question .......................................................................................... 147

7. Performance Appraisal .............................................................................. 149

Objectives of Performance Appraisal: ..........................................................150

Process of Performance Appraisal ...............................................................150

Establishing Performance Standards ............................................................150

Communicating the Standards .....................................................................151

Contents xi

Measuring the Actual Performance ..............................................................151

Comparing the Actual with The Desired Performance ................................ 151

Discussing Results .......................................................................................151

Decision Making ...........................................................................................152

Challenges of Performance Appraisal ...........................................................152

Approaches to Performance Development ..................................................153

Performance Appraisal - Traditional Approach ............................................153

Performance Appraisal - Modern Approach .................................................153

Modern Methods of Performance Appraisal ................................................155

360 Degree Performance Appraisals ............................................................155

Management by Objectives ..........................................................................159

Compensation Administration .......................................................................160

Review Exercises Questions ........................................................................ 161

8. Grievance Procedures and Discipline .................................................... 163

Identifying Grievances .................................................................................169

Grievances Classification .............................................................................170

General Principles .........................................................................................172

Essentials of A Grievance Procedure ...........................................................175

Grievance Procedure In Indian Industry .....................................................176

Chapter Summary ........................................................................................179


Case Study ................................................................................................... 181

Concept of Industrial Relations ....................................................................187

9. Industrial Relations ................................................................................... 187

Theories of Industrial Relations ...................................................................190

Approaches of Industrial Relation ................................................................ 191

Industrial Relations Systems Model .............................................................196

A Conceptual Analysis of Industrial Relations ..............................................197

Promotion, Transfer And Separation Promotion ......................................... 200

Human Resource System .............................................................................201

Webdunia Hrms ............................................................................................ 203



Case Study ................................................................................................... 206

Conclusion .................................................................................................... 211

Practice Question Paper .................................................................... 213-217

Index .................................................................................................... 219-222

Introduction to Human Resource Management 1

Chapter

INTRODUCTION TO HUMAN

RESOURCE MANAGEMENT 1111Learning Objective

• Appreciate why HR has become the new corporate hero.

• List the features of HRM.

• Describe the nature, scope and importance of HRM.

• Outline the systems approach to HRM.

• Explain the importance of HRM.

• Difference between personnel management & HRM.

Human resource management (HRM), also called personnel management, consists

of all the activities undertaken by an enterprise to ensure the effective utilization of

employees toward the attainment of individual, group, and organizational goals. An

organization's HRM function focuses on the people side of management. It consists

of practices that help the organization to deal effectively with its people during the

various phases of the employment cycle, including pre-hire, staffing, and post-hire.

The pre-hire phase involves planning practices. The organization must decide what

types of job openings will exist in the upcoming period and determine the necessary

qualifications for performing these jobs. During the hire phase, the organization selects

its employees. Selection practices include recruiting applicants, assessing their

qualifications, and ultimately selecting those who are deemed to be the most qualified.

Fig.

2 Managing Human Resources

In the post-hire phase, the organization develops HRM practices for effectively

managing people once they have "come through the door." These practices are designed

to maximize the performance and satisfaction levels of employees by providing them

with the necessary knowledge and skills to perform their jobs and by creating conditions

that will energize, direct, and facilitate employees' efforts toward meeting the

organization's objectives.

HRM Development and Implementation Responsibilities: While most firms

have a human resources or personnel department that develops and implements HRM

practices, responsibility lies with both HR professionals and line managers. The interplay

between managers and HR professionals leads to effective HRM practices. For example,

consider performance appraisals. The success of a firm's performance appraisal system

depends on the ability of both parties to do their jobs correctly. HR professionals

develop the system, while managers provide the actual performance evaluations.

The nature of these roles varies from company to company, depending primarily

on the size of the organization. This discussion assumes a large company with a

sizable HRM department. However, in smaller companies without large HRM

departments, line managers must assume an even larger role in effective HRM practices.

HR Professionals Typically Assume the Following Four Areas of

Responsibility: establishing HRM policies and procedures, developing/choosing HRM

methods, monitoring/evaluating HRM practices, and advising/assisting managers on

HRM-related matters. HR professionals typically decide (subject to upper-management

approval) what procedures to follow when implementing an HRM practice. For example,

HR professionals may decide that the selection process should include having all

candidates (1) complete an application, (2) take an employment test, and then (3) be

interviewed by an HR professional and line manager.

Usually the HR professionals develop or choose specific methods to implement a

firm's HRM practices. For instance, in selection the HR professional may construct

the application blank, develop a structured interview guide, or choose an employment

test. HR professionals also must ensure that the firm's HRM practices are properly

implemented. This responsibility involves both evaluating and monitoring. For example,

HR professionals may evaluate the usefulness of employment tests, the success of

training programs, and the cost effectiveness of HRM outcomes such as selection,

turnover, and recruiting. They also may monitor records to ensure that performance

appraisals have been properly completed.

HR professionals also consult with management on an array of HRM-related topics.

They may assist by providing managers with formal training programs on topics like

selection and the law, how to conduct an employment interview, how to appraise

employee job performance, or how to effectively discipline employees. HR professionals

also provide assistance by giving line managers advice about specific HRM-related

concerns, such as how to deal with problem/employees.

Line managers direct employees' day-to-day tasks. From an HRM perspective,

line managers are mainly responsible for implementing HRM practices and providing

HR professionals with necessary input for developing effective practices. Managers


carry out many procedures and methods devised by HR professionals. For instance,

line managers:

• Interview job applicants.

• Provide orientation, coaching, and on-the-job training.

• Provide and communicate job performance ratings.

• Recommend salary increases.

• Carry out disciplinary procedures.

• Investigate accidents.

• Settle grievance issues.

The development of HRM procedures and methods often requires input from line

managers. For example, when conducting a job analysis, HR professionals often seek

job information from managers and ask managers to review the final written product.

Additionally, when HR professionals determine an organization's training needs, managers

often suggest what types of training are needed and who, in particular, needs the training.

Historical Milestones in HRM Development

To start Human Resource Management with milestones in its development and

how it evolved in full fledged Functional HR department.

Table-1

Milestones in the Development of Human Resource Management

1890-1910 Frederick Taylor develops his ideas on scientific management. Taylor

advocates scientific selection of workers based on qualifications and

also argues for incentive-based compensation systems to motivate

employees.

1910-1930 Many companies establish departments devoted to maintaining the

welfare of workers. The discipline of industrial psychology begins

to develop. Industrial psychology, along with the advent of World

War I, leads to advancements in employment testing and selection.

1930-1945 The interpretation of the Hawthorne Studies' begins to have an impact

on management thought and practice. Greater emphasis is placed on

the social and informal aspects of the workplace affecting worker

productivity. Increasing the job satisfaction of workers is cited as a

means to increase their productivity.

1945-1965 In the U.S., a tremendous surge in union membership between 1935

and 1950 leads to a greater emphasis on collective bargaining and

labor relations within personnel management. Compensation and

benefits administration also increase in importance as unions negotiate

paid vacations, paid holidays, and insurance coverage.

1965-1985 The Civil Rights movement in the U.S. reaches its apex with passage

of the Civil Rights Act of 1964. The personnel function is dramatically


affected by Title VII of the CRA, which prohibits discrimination on

the basis of race, color, sex, religion, and national origin. In the years

following the passage of the CRA, equal employment opportunity

and affirmative action become key human resource management

responsibilities.

1985-present Three trends dramatically impact HRM. The first is the increasing

diversity of the labor force, in terms of age, gender, race, and ethnicity.

HRM concerns evolve from EEO and affirmative action to "managing

diversity." A second trend is the globalization of business and the

accompanying technological revolution. These factors have led to

dramatic changes in transportation, communication, and labor

markets. The third trend, which is related to the first two, is the

focus on HRM as a "strategic" function. HRM concerns and concepts

must be integrated into the overall strategic planning of the firm in

order to cope with rapid change, intense competition, and pressure

for increased efficiency.

Human Resource Management has come to be recognized as an inherent part of

management, which is concerned with the human resources of an organization. Its

objective is the maintenance of better human relations in the organization by the

development, application and evaluation of policies, procedures and programmers

relating to human resources to optimize their contribution towards the realization of

organizational objectives.

In other words, HRM is concerned with getting better results with the collaboration

of people. It is an integral but distinctive part of management, concerned with people

at work and their relationships within the enterprise. HRM helps in attaining maximum

individual development, desirable working relationship between employees and

employers, employees and employees, and effective modeling of human resources as

contrasted with physical resources. It is the recruitment, selection, development,

utilization, compensation and motivation of human resources by the organization.


Human Resources Management (HRM): Meaning, Nature and Scope

Human Resources Management (HRM):

"... all those activities associated with the management of the employment

relationship in the firm. The term 'employee relations' will be used as an equivalent

terms as will the term 'labor management'."

This figure explains what we have to study in HRM and how important it is for an

organization.

Human resource management is also in the process of change with regard to the

nature of the role performed. In the past many functions were performed by HRM

professionals themselves, the role they are taking on, is one of consultant to line

management, where line managers perform many of the functions traditionally handled

by HRM professionals. Similarly there is a trend in which businesses are shedding all

functions that are not directly related to core business, and in the process many HRM

functions are being outsourced. Hence the change in the nature of services provided.

The activity of generating unit standards and designing qualifications can be used

as an opportunity to catapult HRM practices into the future. To do this, those issues

which are going to shape the future for HRM practices (termed transformation and

development issues) need to be identified and analyzed, especially in relation to current

roles that will still be required of HRM practitioners. These issues are central to the

activity of generating unit standards (e.g. outsourcing, societal responsibility) and

their impact on HRM roles (e.g. staffing, performance management). In addition,

supportive roles or functions required by HRM practitioners will also have to be identified

in order to complete the HRM practitioners qualifications design package.

'A philosophy of people management based on the belief that human resources are

uniquely important in sustained business success. An organization gains competitive

advantage by using its people effectively, drawing on their expertise and ingenuity to

meet clearly defined objectives. HRM is aimed at recruiting capable, flexible and

committed people, managing and rewarding their performance and developing key

competencies.'

Human Resource Management (HRM) is the function within an organization that

focuses on recruitment of, management of, and providing direction for the people


who work in the organization. Human Resource Management can also be performed

by line managers.

Human Resource Management is the organizational function that deals with issues

related to people such as compensation, hiring, performance management, organization

development, safety, wellness, benefits, employee motivation, communication,

administration, and training.

Human resource implies human capital that operates an organization. The word

planning suggests a course of action. And lastly, process is the method of operation.

Thus, the human resource planning process is defined as, 'a course of action that the

human capital takes up for a methodical achievement of predetermined goals'. The

definition of human resource does not end here. The term includes, its management,

which primarily involves issues related to the workforce. Human resource management

(HRM) is the strategic and coherent approach to the management of an organization's

most valued assets - the people working there who individually and collectively

contribute to the achievement of the objectives of the business.

A company may have all the financial resources, it may need. But what if the

manpower employed to manage the finances isn't well trained? Well, nothing more

than your finances going down the drain. The recent 'Satyam' fraud was due to poor

control of the management board. Improper human capital may gain the output, but

not the desired one in terms of quality. As the earlier mentioned definition suggests,

the human resource management means managing your valued assets.


Fig. The human resource wheel developed by McLagn (1989) shows the primary

HRM and HRD fuction

In McLagan's model, primary HRM functions include HR research and information

systems, union/labor relations, employee assistance, and compensation/benefits. HRD

functions focus on improving and developing individual employees and the organization

as a whole through training and development, organization development, and career

development. Functions that support both HRM and HRD are selection and staffing,

performance management systems, and human resource planning.

When combined, the focus is on finding, keeping and supporting qualified, satisfied

employees. Using McLagan's framework, it's possible to illustrate the central role

marketing plays in relation to both HRM and HRD functions (see Fig. 2). For example,

externally, effective marketing efforts can help attract better qualified job applicants.

Internally, effective marketing strategies can help increase awareness of and

participation in training and development and career development activities.

Fig.: HRD marketing functions can be related to the human resource wheel

developed by McLagan (1989) and divided into areas of internal and external focus


Internal vs. External Marketing

The model in Fig. 2 also illustrates the distinction between the internal and external

marketing functions associated with HR marketing and emphasizes its holistic qualities.

The function categories defined by McLagan (1989), can be divided into outwardly

(i.e., external) and inwardly (i.e., internal) focused marketing activities. External

marketing focuses on obtaining, maintaining, and supporting employees through such

efforts as writing recruitment ads, providing information packets to prospective

employees, and promoting employee benefits. An organization will be better able to

recruit highly qualified employees if it offers a wellrounded benefits package and

employee assistance programs. Effective marketing ensures that potential employees

are aware of these perks. Internal marketing, which is the primary focus of this guide,

is equally valuable and necessary to an organization's effectiveness.

The term human resource management has replaced personnel management.

However, the meaning is still the same. It involves, employing, developing, utilizing,

managing and understanding the staff in an organization.

Right number of people with right skills at right place at right time to implement

organizational strategies in order to achieve organizational objectives.

• In light of the organization's objectives, corporate and business level strategies,

HRP is the process of analyzing an organization's human resource needs and

developing plans, policies, and systems to satisfy those needs.

• Setting human resource objectives and deciding how to meet them.

• Ensuring HR resource supply meets human resource demands.

Importance of Human Resource Management

Since the industrial revolution, the world has progressed tremendously. Be it the

steel industry, IT, fashion houses or housing sectors, development in all of these is

evident. However, over the ages man has indiscriminately used and abused the natural

resources available to him. It has resulted in a global energy crises and depletion of

resources in general.

In this backdrop, what remains is an abundance of human resource, or let's say

human capital. To achieve any more goals, tapping the right kind of human resource

is the key. You may have a business house worth millions of dollars. But what if there

isn't the manpower that suits the nature of the business? Hence, developing the

manpower is of utmost importance.

Designing the Human Resource Management System

Managing Human Resources By NehaVerma

Publisher : Vayu Education ISBN : 9789382174936 Author : Neha Verma

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