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Transcript of Chapter 01
THE STRATEGIC ROLE OF
HUMAN RESOURCES MANAGEMENT
EXCEL BOOKS
1-1
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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The Strategic Role Of Human Resources Management
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
The Strategic Role Of Human Resources Management
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
The Strategic Role Of Human Resources Management
Personnel aspect
Welfare aspect
Industrial relations aspect
HRM mainly covers three broad areas
Objectives of HRM
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The Strategic Role Of Human Resources Management
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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The Strategic Role Of Human Resources Management
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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The Strategic Role Of Human Resources Management
Product Subsystem
HR Subsystem Procurement
Training Compensation
Appraisal Rewards
Marketing Subsystem
Finance Subsystem
Technical Subsystem
Functions of HRM
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The Strategic Role Of Human Resources Management
– 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 Strategic Role Of Human Resources Management
The industrial revolution Scientific management Trade unionism Human relations movement Human resources approach
Evolution of the Personnel Function
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The Strategic Role Of Human Resources Management
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 Strategic Role Of Human Resources Management
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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The Strategic Role Of Human Resources Management
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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The Strategic Role Of Human Resources Management
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
Cont…
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The Strategic Role Of Human Resources Management
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…
HRM in the new millennium
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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The Strategic Role Of Human Resources Management
Cont…
HRM in the new millennium
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The Strategic Role Of Human Resources Management
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 in the new millennium
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.