Chapter 01

THE STRATEGIC ROLE OF

HUMAN RESOURCES MANAGEMENT

EXCEL BOOKS

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1Chapter

ANNOTATED OUTLINE 1-2

The Strategic Role Of Human Resources Management

IntroductionOrganisations have to provide a healthy work climate in order to get the best out of people. To utilise the capabilities of people fully, you need competent leadership willing to recognise, reward and nurture talent at all levels. This is where human resource managers play a critical role by bridging gaps between employee expectations and organisational requirements by adopting appropriate human resource strategies and practices. HRM, in short, is the art of procuring, developing and maintaining competent workforce to achieve the goals of an organisation in an effective and efficient manner.

Human Resource Management: Features

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Pervasive force

Action oriented

Individually oriented

People oriented

Future oriented

Development oriented

Integrating mechanism

Comprehensive function

Auxiliary service

Inter-disciplinary function

Continuous function

Important terms1-4


Human resource: Knowledge, skill sets, expertise of employees, the adaptability, commitment and loyalty of employees.

Skills: The individual abilities of human beings to perform a piece of work.

Resource: The stock of assets and skills that belong to a firm at a point of time.

Capability: The ability of a bundle of resources to perform an activity; a way of combining assets, people and processes to transform inputs into outputs.

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.

Competitive advantage: It comes from a firm's ability to perform activities more distinctively and more effectively than rivals. To attain competitive

advantage, firms need to add value to customers and offer a product or service that cannot be easily imitated or copied by rivals (Uniqueness).

Value: Sum total of benefits received and costs paid by the customer in a given situation.

Clearing the Fog

Scope of HRM1-5


Personnel aspect

Welfare aspect

Industrial relations aspect

HRM mainly covers three broad areas

Objectives of HRM

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HRM aims at achieving organisational goals, meet the expectations of employees; develop the knowledge, skills and abilities of employees; improve the quality of working life and manage human resources in an ethical and socially responsible manner.

Importance of HRMFrom an organisational standpoint, good HR practices help in attracting and retaining talent, train people for challenging roles, develop their skills and competencies, increase productivity and profits and enhance standard of living

Importance of HRM

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attract and retain talent

train people for challenging roles

develop skills and competencies

promote team spirit

develop loyalty and commitment

increase productivity and profits

improve job satisfaction

enhance standard of living

generate employment opportunities

Good HR Practices help

HRM as a central subsystem in an organisation

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Product Subsystem

HR Subsystem Procurement

Training Compensation

Appraisal Rewards

Marketing Subsystem

Finance Subsystem

Technical Subsystem

Functions of HRM

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– Planning

– Organising

– Directing

– Controlling

Operative Functions

P/HRM

Managerial functions:

Procurement

Job Analysis

HR planning

Recruitment

Selection

Placement

Induction

Internal mobility

Development:

Training

Executive development

Career planning

Succession

planning

Human resources development strategies

Motivation and Compensation:

Job design

Work scheduling

Motivation

Job evaluation

Performance and potential appraisal

Compensation administration

Incentivesbenefits andservices

Maintenance:

Health

Safety

Welfare

Social security

Integration:

Grievances

Discipline

Teams and teamwork

Collective bargaining

Participation

Empowerment

Trade unions

Employers’ associations

Industrial relations

Emerging Issues:

Personnel records

Personnel audit

Personnel research

HR accounting

HRIS

Job stress

Mentoring

International HRM

EVOLUTION OF HRM

The field of HRM evolved both in India and elsewhere over a number of years to present level of sophistication and use of proactive methods

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The industrial revolution Scientific management Trade unionism Human relations movement Human resources approach

Evolution of the Personnel Function

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Concept What is it all about?

The Commodity concept

Labour was regarded as a commodity to be bought and sold. Wages were based on demand and supply. Government did very little to protect workers.

The Factor of Production concept

Labour is like any other factor of production, viz, money, materials, land, etc. Workers are like machine tools.

The Goodwill concept Welfare measures like safety, first aid, lunch room, rest room will have a positive impact on workers’ productivity

The Paternalistic concept/ Paternalism

Management must assume a fatherly and protective attitude towards employees. Paternalism does not mean merely providing benefits but it means satisfying various needs of the employees as parents meet the requirements of the children.

Cont…

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The Humanitarian concept

To improve productivity, physical, social and psychological needs of workers must be met. As Mayo and others stated, money is less a factor in determining output, than group standards, group incentives and security. The organisation is a social system that has both economic and social dimensions.

The Human Resource concept

Employees are the most valuable assets of an organisation. There should be a conscious effort to realise organisational goals by satisfying needs and aspirations of employees.

The Emerging concept Employees should be accepted as partners in the progress of a company. They should have a feeling that the organisation is their own. To this end, managers must offer better quality of working life and offer opportunities to people to exploit their potential fully. The focus should be on Human Resource Development.

Evolution of the Personnel Function

Shifts in HR management in India

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Emerging HR practice

Strategic role

Proactive

Key part of organisational

mission

Service focus

Process-based organisation

Cross-functional eams,

teamwork most important

People as key investments/assets

Traditional HR practice

Administrative role

Reactive

Separate, isolated from

company mission

Production focus

Functional organisation

Individuals encouraged,

singled out for praise,

rewards

People as expenses

Personnel Management Vs HRMPoints PM HRM

Philosophy Employees made for rules & Reg.

Rules & Reg. are made for Emp.

Nature Procurement & training of personnel

Integration with Corporate mgt

Communication Slow & downward Fast & both downward & upward

Decision -making

slow fast

Approach Work-oriented People-oriented

Job-Design Revision of labour team-work

Trust- level low high

HRM in the new millennium

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Current thinking in HRM strongly supports the view that when opportunities for growth and enhancement of skills are available in an organisation, people will be stimulated to give their best, leading to greater job satisfaction and organisational effectiveness. To this end, therefore, HR managers in the new millennium are expected to successfully evolve an appropriate corporate culture, take a strategic approach to the acquisition, motivation and development of human resources and introduce programmes that reflect and support the core values of the organisation and its people.

Size of work force

Demands for better pay, benefits, working conditions

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Composition of workforce Equal pay for equal work

Breaking down of glass ceiling

Constitutional protection to minority groups

Importance to factors such as age, sex, religion, region, caste especially while dealing with multifarious, heterogeneous, culturally diverse work groups

Employee expectations

Better educated, more knowledgeable, emotionally strong and demanding workforce

Demand for educated, trained, experienced and knowledgeable workers growing

Understand individual differences and develop appropriate policies to meet their growing expectations.

Cont…


Changes in technology

Modernisation, computerisation, sophistication increasing by the day

Knowledge and skills need to be refined constantly

Training, retraining and mid-career counselling important

Equip employees so as to cope with dramatic challenges brought forward by rapid advances in science and technology

Life style changes

Environmental challenges

Personnel function in futureJob redesignCareer opportunitiesProductivityRecruitment and selectionTraining and developmentRewardsSafety and welfare

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Cont…


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Changes in 21st century affecting HRM

HR as a springboard for success

Talent hunting, developing and retraining

Lean and mean organisations

Labour relations

Health and benefit programmes


HRM Strategies for New Millennium Human Capital:Acc. To sumantra ghoshal of

london business school, HC consists of 3 Parts:

1) Intellectual capital: stock of knowledge, skills and expertise.

2) Social Capital: structure, quality and flexibility of human Relationship both inside & outside the company

3) Emotional capital: Individual need self-cofidence, courage, to convert their knowledge and relationships into effective action.

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EMOTIONAL QUOTIENT

Emotional Quotient states that a manager’s effectiveness in a corporation depends more on his emotional intelligence which means his ability to manage his emotions in he workplace and calmly deal with stressful corporate situations than on his IQ or Technical Skills.

Three elements:

Self-Awareness

Social Skills

Social Awareness

HRM Strategies for New Millennium

HRM Strategies for New MillenniumMENTORING:

It is the process whereby a senior manager acts as friend-philosopher and guide to new recruit through his teachings, coaching, counselling.

Consists of following steps: Initiation Progression Assimilation Integration

HRM Strategies for New Millennium4. 360 degree Appraisal technique:

Process whereby evaluation of manager is done by everyone above, alongside and below him. Each manager is assessed by minimum of 15 colleagues-2 bosses,4 peers,6 subordinates.

Four Components:

Self Appraisal

Superior’s Appraisal

Subordinate’s Appraisal

Peer Appraisal

HRM Strategies for New Millennium5. Employee stock Option plan

Employees are offered the company’s shares at a concessional price. When the market price of shares increases the employees earns considerable capital gains.

HRM Strategies for New Millennium6. Total Quality Management: Means continous process of improvement main

objective is to delight the customers, involves study and understanding of changing customers needs & taking steps to satisfy these needs in a better way.

Features:Customer satisfactionInternal customersContinous processTeam work

HRM Strategies for New MillenniumQuality Circle:

Small group of employees from the same work area which meet regularly to identify, analyse & solve quality and work- related problems

HRM Strategies for New MillenniumKaizen:

Means continous improvement so as to generate value for customers. It stresses upon process oriented thinking.

Steps:

1. Seiri (straighten up)

2. Seiton (put things in order)

3. Seiso (clean up)

4. Seiketsu(Personal cleanliness)

5. Shitsuke (Discipline)

HRM Strategies for New MillenniumFlexitime: A plan whereby employees build their

workday around a core of midday hours say 11am to 2pm.

Six Sigma:business management strategy developed by Motorola, USA in 1981. it seeks to improve the quality of processes output by identifying & removing the causes of defects (errors).

HRM Strategies for New MillenniumFollows two project methodologies:

1) DMAIC(for existing Pdts):- D(Define the problem), M(measure key aspects),A(analyse the data to find cause & effect relationship), I(improve the current process),C (control future process).

2) DMADV(for new Pdts):-Define, measure, analyse, design, verify.

Chapter 01

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