The meaning, nature and scope of Human Resource Management

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Why HRM A view

HRM A Function / Skill/ Competency? Every Mgr - an HR Mgr ? HR Mgt - Life Mgt ?

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Nature of HRM

cont

Critical Mgt function concerned with focus on People US Systems, processes and activites to make them effective Performance To develop them appreciating assets Maximize org effectiveness and competitiveness sustainable over long term
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Nature of HRM cont

HRM Competitive advantage thru People A- S- B Core Competencies Differentiation

Value to Customers Real time ( Here and Now & Each time ( Reliability )
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Diff between PM and HRM

How is PM different from HRM?
Employment contract: Rules: Guide to mgt action: Behaviour referent: Mgt task: Key relations Initiatives Management role Critical skills Pay Conditions of work Conflict handling Focus of change Locus of Control Organising principles normative written go beyond devise clear rules Can Do outlook procedures business needs norms custom usage - values mission monitoring - nurturing labour-mgt - customer piecemeal - integrated transactional - transformational negotiation facilitation pay-grades scales - JE/ performance - band negotiation -- harmonising collective bargaining- individual procedural cultural,structural central distributed structure & control performance

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Scope of HRM
Life cycle of an employee
HRP Job Analysis/Evaluation. Recruitment /selection/retention, Trg and development/ competency, PMS Employee remuneration, motivation and communication. And employee relations Welfare and health

separation too
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 Core Competencies People Integrated knowledge sets in Organisation -Distinguish from Competitors and deliver Value
Macdonald - efficiency & training for standardisation, Fedex- packing deliver routing and employee relations, Canon - Fine optics, Toyota Value products and reliability ( Zero Maintenance)

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How Companies acquire Competitive advantage

1. Resources must be of Value- improve process , products or reduce cost, eg. Marriott ,Toyota (Expertise/ Competency / & Freedom to act- High Performance) 2. Resources must be rare ( not available to competitors), eg. Mckinsey hires the best 3. Resources must be difficult to replicate in a short time, eg. Disney ,SWA etc (Employee engagement) 4. Resources must be organised ( Shortest possible time, eg. Tata ACE , Nano ( Talent Mgt and Positioning process)

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USA today and Deloitte

80% Executive surveyed -10 years -HRM Growth has been Substantial 2/3rd view as a strategic Investment than a Cost

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Hence HRM is a CEO agenda

Business case
The Business case for Managing People right (Pfeffer) Strong connection- How firms manage people and economic results achieved Not the sole basis for competitive success but impacts variations in organisational performance

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Business case
Innovative HRP improves economic performance thru- People
- Possess knowledge & skills, - Motivated to apply this using discretionary efforts, - Contribute to the process with such discretionary efforts

High Commitment increased involvement, work smarter ( more competent), Responsibility even at lower level Mark Huselid study 1997 968 responses-3452 firms - significant relationship HPM economic performance

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Business case
Study 1996 702 firms HRM Index-improves Market Value -14% premium NUMMI JV of Toyota and GM also stated that flexible and high involvement work system high performance and reduce costs. Applicable across Germany and other countries etc Across various industries Automobile,steel,apparel, oil and services firms

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Business case
Working in teams, Different roles and style of management, Design of work, Communication & learning , Group awards, Job rotation, Decentralised decision making and Employee wellbeing HRM Practices- creates for differentiation and have an impact on organisational performance

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The Challenges of HRM

HRM is evolving
(Based on the Context- socio - political and economic) 1920- 30s Labour welfare 1940- 50s Legislation
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Context of HRM External

Political/legal
Constitution-Art 14,15,23,2438(e)43, 43(a) reservation for weaker sections-impact manning and Labour laws 51 central Acts, SO, ID Act, MRTU - impact worker/union mgt relations

Economic
- Suppliers of HR,Employment Exch., institutions , contractors etc - Competitors- for skills- demand and supply - Customers skills and qualification quality-six sigma skills etc - Economic growth cycles stage of development-Indias paradox of skills in India-viz a vis growth - Industrial labour- knowledge worker ,trade unions influences, - Diversity -different languages, expatriate workers in the country
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External cont
Technological - Systematic application of knowledge of organised
knowledge to practical tasks - impacts jobs become intellectual or knowledge needs upgradation, training workers and engineers/mgrs,increased productivity and compensation, lays the ground work for human interaction at various levels

Globalisation migration / transnational movement of Executives ,

(Projected 2020 25% global exe will be indians ) labour cost and skill competitiveness , country cultural impacts and labour legislation

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Internal
Strategy,task and leadership

Strategy direction,competitive position and structure Task linked to employee satisfaction and productivity Leadership-alignment , communication and Policy formulation linked to fairness and performance/productivity
Unions Organisational culture

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Competitive Challenges and Human Resources Management

The most pressing competitive issues facing firms:
Going global Embracing technology Managing change Developing human capital Responding to the market Containing costs
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Aligning HR processes to the strategy of the organization

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Session 2

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Strategic HR Management
Strategic Management -process of formulating, implementing and evaluating business strategies to achieve organisational objectives Strategic HRM vs conventional HRM
- Responsibility- staff or line - Focus- employee relations or partnership with customers - Role- transactional or trasnsformational /change leaders - Initiative - reactive or proactive - Control - bureaucratic or organic - Job design - tight division of labour vs flexible, multitasking roles , crossfunctional - Key investment - Capital vs people knowledge - Accountability- Cost centric vs Investment centric

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Barriers to Strategic HRM

1. Short term focus on current,
2. Inadequacy to think strategically 3. Senior mgrs inadequacy to think of HR as a contributor, 4. Think of function rather than people to achieve, 5. Quantification 6. HR capital ownership 7. Change resistance to org architecture
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Strategic Mgt -HR

Environmental scanning internal/external Strategy formulation- Corp, Business,Functional Strategy Implementation Prog, budgets, procedures Control process and Performance P-D-C-A cycle

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Models of HRM Harvard Model The Guest Model Warwick Model Common Features Audit
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Model of Strategic Human Resources Management

Stake Holders
HRM policies Hiring Training Relations PMS Compensation Productivity

HR Outcomes
Commitment Competence Congruence Cost compet

Performance outcome
Productivity Innovation Quality Competitiveness Community well being

HRM strategies Situational Factors

PESTEL Business strategy Mgt philosophy Labour market Technoogy Socio/Politcal/Legal

FIN results

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Overall Framework for Human Resource Management

COMPETITIVE CHALLENGES
Globalization Technology Managing change Human capital Responsiveness Cost containment

HUMAN RESOURCES
Planning Recruitment Staffing Job design Training/development Appraisal Communications Compensation Benefits Labor relations

EMPLOYEE CONCERNS
Background diversity Age distribution Gender issues Educational levels Employee rights Privacy issues Work attitudes Family concerns

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Figure 1.1

26

Strategic HR Mgt Role

Encourage proactive thinking/behaviour Explicit communication of goals Stimulation of critical and innovative thinking Productivity systems , PMS, pay, motivation systems,work systems Quality and service orientation- Customer centric Proficient strategic management-staffing, competency building Process and Value alignment

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Human Resource Competency Model

Business Mastery
Business acumen Customer orientation External Relations

Personal Credibility Trust

Personal relationships Lived values Courage

HR Mastery
Staffing Performance appraisal Rewards system Communication Organization design

Change Mastery
Interpersonal skills and influence Problem-solving skills Rewards system Innovation and creativity

Source: Arthur Yeung, Wayne Brockbank, and Dave Ulrich, Lower Cost, Higher Value: Human Resource Function in Figure 1.9 Transformation. Reprinted with permission from Human Resource Planning, Vol. 17, No. 3 (1994). Copyright 1994 by The Human Presentation Slide 14 Resource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) 490-6387, Fax: (212) 682-6851. 2/11/2013 28

HRM Competencies Business Mastery People Mastery Change Mastery Value orientation Personal Credibility

Does line /owner manager require similar competencies?

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Linking the Processes of HRP and Strategic Planning

Strategic Analysis
Establish the context: Business goals Company strengths/weaknesses External opportunities/threats Source of competitive advantage

Strategy Formulation
Clarify performance expectations and future management method: Values, guiding principles Business mission Objectives and priorities Resource allocations

Strategy Implementation
Implement processes to achieve desired results: Business goals

Company strengths/weaknesses
External opportunities/threats Source of competitive advantage

Identify people-related business issues

Define HR strategies, objectives, and action plans

Implement HR processes, policies, and practices

Source: Adapted from James W. Walker, Integrating the Human Resource Function with the Business, Human Resource Planning 14, no. 2 (1996): 5977. Reprinted with permission.

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HRP and Strategic Planning

Strategic Analysis
What human resources are needed and what are available?

Strategic Formulation
What is required and necessary in support of human resources?

Strategic Implementation
How will the human resources be allocated?
Human Resources Planning
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Strategic Planning
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Human Resources Planning

Process of anticipating and making provision for the movement (flow) of people into, within, and out of an organization and enhance capacity of the organization to act and change in pursuit of sustainable competitive advantage Purpose is the the effective deployment of human resources
Coordination flexibility The ability to rapidly reallocate resources to new or changing needs. Resource flexibility Having human resources who can do many different things in different ways.
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HRP and Environmental Scanning

Environmental Scanning The systematic monitoring of the major external forces influencing the organization. Economic factors: general and regional conditions Competitive trends: new processes, services, and innovations ( eg. Cement Business Market share MNC) Technological changes: robotics and office automation (Material movement , IT Tech-tracking) Political and legislative issues: laws and administrative rulings ( Contract labour/closure/ layoff relocation,transfer gov interference ) Social concerns: child care and educational priorities Demographic trends: age, composition,and literacy Paradox of below 35 years and beyond 55 years
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Scanning the Internal Environment

Cultural Audits
Audits of the culture and quality of work life in an organization. How do employees spend their time? How do they interact with each other? Are employees empowered? What is the predominant leadership style of managers? How do employees advance within the organization? Benchmarking The process of comparing the organizations processes and practices with those of other companies.

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Levels of HRP Information

Strategic Information
Product mix Customer Mix Competitive emphasis Geographic limits ( cement / RMC etc)

Organisational information
Org structure Information flows Operating budgets Functional budget Sales /distribution channels/level of technology

Specific HR information
Job analysis Skill inventories Management inventories Recruitment labour market analysis Retirement plans Turnover data

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Mapping human capital

high

Partner alliance

Knowledge work

Unique

Contract work

Traditional Job employment

Low
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Low

Value

high
36

Mapping Human Capital

Presentation Slide 42
Source: Scott A. Snell, Cornell University.

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Figure 4.2

37

Human Resource Planning Model

FORECASTING DEMAND

Considerations
Product/service demand Technology Financial resources Absenteeism/turnover Organizational growth Management philosophy

Techniques
Trend analysis Managerial estimates Delphi technique

BALANCING SUPPLY AND DEMAND

(Shortage) Recruitment
Full-time Part-time Recalls

Techniques
Staffing tables Markov analysis Skills inventories Management inventories Replacement charts Succession Planning

External Considerations
Demographic changes Education of the workforce Labor Mobility Government policies Unemployment rate

(Surplus) Reductions
Layoffs Terminations Demotions Retirements
Presentation Slide 43 Figure 4.3

FORECASTING SUPPLY 2/11/2013

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Forecasting Demand for Employees

Quantitative Methods

Forecasting Demand
Qualitative Methods

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Quantitative Approach: Trend Analysis

Forecasting labor demand based on an organizational index such as sales: Select a business factor that best predicts human resources needs. Plot the business factor in relation to the number of employees to determine the labor productivity ratio. Compute the productivity ratio for the past five years. Calculate human resources demand by multiplying the business factor by the productivity ratio. Project human resources demand out to the target year(s).

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Qualitative Approaches to Demand Forecasting

Management Forecasts The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organizations future employment needs. Delphi Technique An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals.
The final forecast represents a composite group judgment.
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Forecasting Supply of Employees: Internal Labor Supply

Staffing Tables Markov Analysis Skill Inventories Replacement Charts Succession Planning

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HRP
Demand Quality and quantity of people/skills Competency for future business Managerial judgement Ratio trend analysis Regression analysis Work study/ Job Analysis Supply Quality and quantity of people/skills Present employee- skill sets, performance Internal sources- group External sources- labour market- (Engineers 5 lac- software
1.5 lacs Nos )

Redundancy Succession planning

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Pre requisite for successful HRP

1. Integral part of Corp planning 2 Centralised responsibility interaction between various stakeholders 3. Updated Human Resources Information System 4. Time horizon should enable remedial planning 5. Skill/ Competencies rather than aggregates ( Nos)

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Major Uses For HR Information Systems

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Source: HR and Technology Survey, Deloitte & Touche and Lawson Software, 1998.

HRM 1

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 Renaissance Case Strategic Human Resources Management in a Merger

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