Human resource management includes the set of policies, practices, and programmes designed to maximise both the personal and organisational goals.
Human resource management (HRM) is the process of determining human resources needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organisational goals.
Human resource management is more than hiring and firing personnel. All activities are designed to achieve organisational goals within the laws that affect human resource management. (Note that human resource management includes motivation.)
Human Resource Management Systems, such as, performance appraisal, rewards and punishment, training and development, and career and succession planning are important system levers for facilitating strategy implementation.
All these systems influence managerial behaviour and motivation significantly, which in turn have a bearing on both the outcome as well as the process of implementation.
Since strategy implementation essentially involves management of change, the human resource management system should be designed and administered in a manner that would align such systems with the strategy being pursued.
1. Introduction to Human Resource Management 2. Definitions of Human Resource Management 3. Evolutions 4. Scope 5. Objectives 6. Features
7. Components 8. Significance 9. Process 10. Functions. 11. Factors Affecting 12. Ethics 13. Theories
14. HRMS in an Organisation 15. Role and Responsibilities 16. Relevance 17. Human Resource Matrix Management 18. Emerging Trends.
What is HR Management: Definitions, Scope, Objectives, Features, Components, Importance, Functions and Emerging Trends
What is HR Management – Introduction
Organisations that are able to acquire, develop, stimulate and keep outstanding workers will be both effective and efficient, human assets are probably the most critical and difficult to manage. Human Resources are the only active resources at the disposal of every organisation and the effective use of all other resources directly depends on efficient utilization of these resources.
Rensis Likert rightly observes, “all the activities of am enterprises are initiated and determined by the people who make up the institutions, plants, offices, computers, automated equipments and all else that modern firm uses are unproductive except for human efforts and directions. Human beings design or order the equipment, they modernize the technology employed, they secure the capital needed and decide on the accounting and physical procedures to be used. Every aspect of organisational activities is determined by the competence, motivation and general effectiveness of its human organisation.”
Any organisation that wants to be dynamic and growth oriented or to succeed in fast changing environment needs human resource management. Organisations can become dynamic and grow only through the efforts and competencies of their human resources.
Personnel policies can keep the morale and motivation of employees high, but these efforts are not enough to make the organisation dynamic and take it to new directions. Organisation climate and philosophy is not enough to yield the desired results. Planned efforts should be made to develop human skills in managers at all levels helping them to adopt a more balanced approach towards human resource.
An important element of the effective management of business enterprise is its human resource. Managing human resources is the central and most important task of management.
Human resource management has been attracting wide attention of the research scholars, chief executives and line managers for the last few decades. Its scope is so multifarious and vast that explanation of its various avenues would continue for long.
But the keenness and intensity with which its concepts are being probed into, in all their minute and comprehensiveness, seems remarkable. Scholars are agog to trace the very roots of certain concepts with a view to enlarge and deepen the perception of the fascinating subject.
Human Resource Management (HRM) is the planning, organising, directing and controlling the operative functions of procurement, development, compensation, and maintenance of human resources of an organisation’s goals or objectives. It is responsible for getting the best people, training them, and providing mechanism to ensure that these employees maintain their productivity affiliations with the organisations.
What is HR Management – Definition
Human Resource Management are the sum total of those factors, which people bring into an organization such as experience, training, competence and attitude. Human Resources is a paramount importance for the success of any organization.
It is a source of strength and aid. Human Resource Management is concerned with the human beings in an organization, which can help it in achieving its goals. Human Resource Management is concerned with the human beings in an organization and it is a new outlook, which views organization manpower as it resources and assets.
Human resource management includes the set of policies, practices, and programmes designed to maximise both the personal and organisational goals.
According to Flippo, “Human resource management is the planning, organising, directing, and controlling of the procurement, development, compensation, integration, maintenance, and reproduction of the human resources to the end that individual, organisational and societal objectives are accomplished”.
According to Milkowich and Boudreau, “Human resource management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organisations and the employees to achieve their objectives”.
According to French, “Human resource management is the recruitment, selection, development, and utilisation of and accommodation to human resources by organisations. The human resources of an organisation consist of all individuals regardless of their role who are engaged in any of the organisation’s activities”.
According to George, “Human Resource Management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organisations and the employees to achieve their objectives”.
What is HR Management – Evolution
1. Industrial Revolution period:
Industrial Revolution Period (1760-1850) brought far reaching changes in the economic life of people. During this period various inventions took place which changed the entire system of production and distribution. The use of machine made it necessary to use large amount of capital which changed the method of industrial organization and also brought a change from the domestic system to the factory system of production using complex division of labor. It was during this period that appointment of separate person was found necessary to handle the labor problem.
2. Trade Union Movement:
Industrial revolution created awareness among the industrial workers who started forming their union to protect their interest and to improve their conditions. The main reason for forming such a union was to safeguard the workers interest and to force the management to give fair treatment to the workers.
For this purpose various weapons like strike, slowdowns, walkouts, picketing, boycotts, sabotage etc., were used to pressurize the management to accept their demand. All these type of activities carried out by the workers gave birth to personnel practices like collective bargaining, grievance handling system, arbitration, disciplinary practices, employee benefit scheme etc.
Scientific Management Period is also known as Taylor’s period as this approach was developed by Dr F.W.Taylor. Dr. Taylor gave maximum importance to the use of human resources in the industrial work and developed four important principles which are given below –
(a) Development of science and use of scientific methods in the work.
(b) Scientific selection, training and placement of workers.
(c) Division of work and responsibility among workers and management.
(d) Existence of cooperation and harmonious relation with the workers to secure better performance.
In order to introduce scientific ideas in management Taylor introduced several techniques like:
(i) Time study
(ii) Motion study
(iii) Standardization of tools, machinery and equipment
(iv) Differential piece wage system
(v) Introduction of functional organization etc.
The formal growth of HRM in India can be traced back to the year 1931 when the Royal Commission of Labour recommended the abolition of Jobber system and stressed the appointment of Labour Officer in an industrial enterprise to deal with recruitment of labour and to settle their grievances. The main concern of labour officer was recruitment and welfare of workers and to act as a link between workers and management.
In the year 1948 “Factory Act 1948” was passed by Independent India which made it mandatory for the factories employing 500 or more workers to appoint a full time welfare officer with requisite qualification. Thus, HRM started gaining importance in India after passing Factory Act 1948. Trade Union Movement became stronger and industrial relation became important issue.
During 1950s two professional bodies The Indian Institute of Personnel Management (IIPM) Kolkata and National ‘institute of Labour Management (NILM) Mumbai were established. Further in the year 1960 it was observed that personnel function widened beyond welfare aspect and three important aspects like labour welfare, Industrial relation and Human Resource Administration emerged as a compliment to HRM.
Moreover, five year plan period adopted by the Government of India also gave boost to growth of HRM concept. During 1980 a major change was noted in the attitude of industrialists and managers of industries who have realized the need to have a separate department for managing human resources.
Government of India also noted the importance of Human Resources Development (HRD) and created HRD ministry in the central Cabinet in 1990. In July 1991 LPG (Liberalization, Privatization and Globalization) concept adopted by then Central Government opened the eyes of Indian Industrialists who have to face thee competition from global even in recruitment and selection process.
What is HR Management – Scope
In order to attain the various objectives, HRM has to perform certain functions and undertake important activities. Not only all major and important activities in the working life of a worker from the time of his or her entry into an organisation until he or she leaves the organisation comes under the purview of Human Resource Management; but many other activities, topics are also studied in HRM.
Human resource planning, job design, recruitment analysis, selection, training and development, appraisal, placement, assessment, proper motivation to the employees, maintenance of union-management relations, human resource accounting and audit, etc. are some of the important activities. This makes clear the scope of Human Resource Management, which is really very vast. The major topics, aspects are generally included in the scope of HRM from which we also get an idea about the activities and functions of HRM.
The scope of HRM is very wide.
The Indian Institute of personnel management has laid down scope of personnel management/ human resource management as follows:
1. The Welfare Aspect:
Welfare aspect covers working condition and amenities such as – canteens, crèches, housing, rest room, lunch room, recreation, education, medical help, schools, health, safety etc.
2. The Labour or Personnel Aspects:
It is concerned with man power planning, recruitment, selection, placement, promotion, incentives, remuneration, training and development; lay off, retrenchment of employees etc.
3. The Industrial Relation Aspects:
This aspect covers employer – employee relation and includes trade union negotiations, settlement of industrial disputes, joint consultations collective bargaining, grievance handling, disciplinary actions etc.
Dale Yoder has classified the scope of personnel management/ HRM in terms of the following functions:
(i) Setting general and specific management policy for organizational relationship and establishing and maintaining a suitable organization for leadership and co-operation.
(ii) Collective bargaining, contract negotiation, contract administration and grievance handling.
(iii) Staffing the organization, finding, getting and holding prescribed types and number of workers.
(iv) Aiding in the self-development of employees at all levels, providing opportunities for human resource development and growth as well as for acquiring requisite skill and experience.
(v) Developing and maintaining motivation for workers by providing incentives.
(vi) Reviewing and auditing manpower management in the organization.
(vii) Industrial relations research carrying out studies designed to explain employee behaviour and there by effecting improvement in man power management.
Scope of human resource management is very wide and not limited to industrial or commercial enterprise only. Its importance is seen in every field where human being works irrespective of the fact whether it is commercial, social, religious or political organization.
What is HR Management – 8 Major Objectives
Human resource management aims at achieving the following objectives:
1. Achievement of goals – HRM helps the organization to achieve its goals by providing suitable and well trained employees.
2. Quality of Work Life (QWL) – Development and maintenance of quality of work life to improve organizational performance is another important objective of HRM.
3. Integration of goals – HRM aims at integration of individual goals with those of the organizational goals
5. Identification and satisfaction of needs – HRM also aims at identification and satisfaction of needs of employees by offering various monetary and non-monetary rewards.
6. High morale and good human relation – HRM also aims to maintain high morale and good human relation among employees and employers in an organization.
8. Respect for human beings – HRM also ensures respect for human beings by providing various welfare facilities.
What is HR Management – Top 10 Features
1. Inherent Part of Management:
Human Resource Management is inherent in the process of management. This function is performed by all the managers throughout the organisation rather than by the personnel department only. If a manager is to get the best of his people, he must undertake the basic responsibility of selecting people who will work under him. He must also take interest in training and motivating the employees and appraising their performance of improving their quality.
2. Comprehensive Function:
Human Resource Management is a comprehensive function because it covers all types of people at all level in the organisation. It applies to workers, supervisors, officers, managers and other types of personnel. It is basically a method of developing potentialities of employees so that they get maximum satisfaction out of their work and give their best efforts to the organisation.
3. Continuous Process:
Management of human resource is an on-going on never ending exercise rather than a ‘one shot’ function. It must be performed continuously if the organisational objectives are to be achieved. Smoothly According to TERRY, it cannot be turned on and off like water from a facet, it cannot be practised only one hour each day or one day a week. It requires constant alternatives awareness of human relations and their importance in everyday operations.
HRM is concerned with helping an organisation achieve its objectives in the future by providing for competent and well-motivated employees. Effective human resources and maximum satisfaction of employees gives better results to the organisation in future. Hence, HRM is a future-oriented function.
Human Resource Management is concerned with employees as individuals as well as groups. It is the process of achieving the best fit between individuals, jobs, organisations and the environment. It is the process of bringing people and organisations together so that the goals of each are met.
Human resource management involves application of knowledge drawn from several disciplines like sociology, psychology, economics etc. In order to deal with human problems, effectively, a manager must depend upon such knowledge.
7. Science as Well as Art:
HRM is a science as it contains an organised body of knowledge consisting of principles and techniques. It is also an art because handling people is one of the most creative art. It involves application of theoretical knowledge to the problems of human resource so it is an art.
8. Pervasive Function:
Human resource management is a pervasive function of management. It is performed by all managers at various levels in the organisation. Every manager from managing director to the foreman is required to perform the personnel function on a continuous basis. The authority to take decisions about people lies with the operative executives. Thus, it is not only a staff function but a line responsibility.
9. Basic to All Functional Areas:
Personnel Management permeates all the functional areas of management such as production management, financial management and marketing management. That is, every manager from top to bottom, working in any department has to perform personnel functions. When a human resource department is created, other managers are not relieved of this responsibility.
10. Based on Human Relations:
Human Relation Skills are required in training, performance appraisal, transfer and promotion of subordinates. If the personnel function is performed properly, the human relations in the organisation will cordial. Every person has different needs, perceptions and expectations. The manager should give due attention to these factors.
What is HR Management – 9 Important Components
The following are essential components of HRM:
Component # 1. Human Resource Organisation:
It is concerned with achieving success by organization design development and motivation, the application of effective leadership and the process of getting across the message about what the enterprise is setting out to do and how it proposes to do it. The fundamental objective of human resource organization is to ensure that every aspect of the organisation, employment, motivation and management of employees is integrated with the strategic objectives of the business and contribute to the successful achievement of those objectives.
The human resource organization programme has to take account of cultural issues so that the desired corporate culture can be developed or reinforced. More over organizational development programmes and interventions are needed to achieve integration improve team work, motivate human resources, develop proper leadership, facilitate communication system, manage conflict and change, and obtain commitment.
Component # 2. Human Resource Planning:
HRP sets out to define how many people in the organization wants, the type of people, the organization needs at present and in future, in terms of their expertise and how they fit the corporate culture. It involves the fore casting of both the supply and demand for future labour. It provides the base for recruitment programme and for human resource development plans.
Component # 3. Human Resource Systems:
Human resource systems are the essential programmes needed to recruit, appraise, pay and look after the health, safety, and well-being of the employees in the organization.
The main key programmes are:
(i) Recruitment Management – It is a process of obtaining the required human resource for an organization.
(ii) Information Management – It is a method of ensuring that all policies and practices are well articulated and effectively communicated to the work force.
(iii) Training Management – It is a system of identification of training needs, preparation of a training strategy, and an appropriate training system.
(iv) Performance Management – It is a technique of appraising performance systematically against defined criteria, reviewing progress to date and assessing the potential for advancement. There are three main appraisal systems such as performance appraisal, potential appraisal, and performance coaching or counselling.
(v) Reward Management – This ensures that people are rewarded in accordance with their contribution.
(vi) Career Management – It is a system of charting special career paths for individual employees for advancement in the organization.
(vii) Health and Safety Management – It is a system of maintaining healthy and safe system of work in the organization.
(viii) Discipline Management – It is a system of administering discipline to foster positive employee behaviour that will promote organizational objective.
(ix) Culture Management – It is a system of thinking and behaving shaped by the values, attitudes, rituals and sanctions in an organization.
Component # 4. Human Resource Development:
Lippit (1978) points out that HRD as a system depends on:
(i) Work itself which generates a higher degree of responsibility for the employees;
(ii) The individual’s personal and professional growth;
(iii) The improved quality output as result of increased responsibility; and
(iv) Organisation as an open system.
Rao (1985) defined HRD as a process by which the employees of an organisation are helped in a continuous planned way to:
(i) Acquire or sharpen capabilities required to perform various tasks and functions associated with their present or expected future roles;
(ii) Develop their enabling capabilities as individuals so that they are able to discover and exploit their own inner potentials for their own and/or organisational development purposes; and
(iii) Develop an organisational culture where superior subordinate relationship, teamwork, and collaboration among different sub-units are strong and contribute to the organisational health, dynamism and pride of employees.
Pareek (1970) found the following sub systems necessary for introducing HRD in the organisation:
(i) Planning and administration of human resources. This includes four main aspects, viz.- (a) man power planning, (b) recruitment, (c) promotion and (d) career planning.
(ii) The second HRD system is about job and salary administration like performance appraisal, job analysis and potential appraisal.
(iii) The third aspect of HRD mainly confined to training, performance feedback, counselling and organisational development.
(iv) The last system related to the industrial relations and welfare of workers.
HRD as a function consists of various activities related to training and development, and performance appraisal. All aspects of training and appraisal plays a significant role in achieving the individual’s growth and development. In this respect HRD is more a proactive and support function wherein the organisation has to take a lead in helping the person to grow and realise their potential role. HRD programmes help to ensure that the organisation has the employees with the skills and knowledge it needs to achieve its strategic objectives.
The main thrust of HRD is on training and development. Training fills the gap between what someone can do and what he should be able to do. Therefore, HRD is a dynamic process which aims at improving the skills and talents of personnel. Development can be defined as the modification of behaviour through experience. It operates at all level, shop floor level, middle management level, and top management level, covering executives and non- executives.
Development provides for person to do better in the existing jobs and prepares them for greater responsibility in the future. It builds on strength and helps to overcome weaknesses, and ensure that the organisation has the expertise it needs. HR specialists should act as teacher, or coach, or consultant to line manager, providing information about various technique or suggestions about policies and way to implement them.
Component # 5. Human Resource Relationships:
Human resource relationships deal with the handling of employee individually and collectively as a member of trade unions or staff associations.
Their main aim, is to increase cooperation and trust and to involve employees actively in the organization’s affairs. It also deals with problem solving technique, particularly to solve problems relating to disciplinary cases and grievances. There are two side in a dispute in most of the organization management and workers. There is a gap and the means have to be found to bridge the gap.
Whether or not union exist, it is highly desirable for the management to develop methods of dealing with employees collectively. The necessary techniques must be evolved for encouraging mutuality and working together in the interests of all. Unions have to be managed like everything else in an organizations. Management normally gets the union it deserve. It handle union the wrong way, the results for the organization can be disastrous.
An approach to collectively dealing should be:
(i) The recognition of the union,
(ii) The respective role performance of management and union.
(iii) The type of procedure one can adopt to regularize relationships with unions,
(iv) The basic techniques of negotiating with unions,
(v) The mechanism of involvement through participation both in traditional forms of joint consultation as well as the more recent Japanese import of quality circles.
Component # 6. Human Resource Utilization:
According to the Peters Waterman, to achieve productivity through people it is very essential to “treat them adults, treat them as partners, treat them with dignity, and treat them with respect”. These fundamental human relations values provide the base for productivity management programmes, which use techniques such as method study to improve efficiency. Both managers and workers must be persuaded some how to realize that they have a common interest in increasing output.
The following actions are required to improve the use of human resources:
(i) Conduct a productivity drive;
(ii) Improve manpower budgeting and control techniques;
(iii) Introduce work measurement;
(iv) Use appropriate payment method by results, bonus and profit sharing schemes;
(v) Improve motivation;
(vi) Involve employees in improvement programmes;
(vii) Introduce new appropriate technology;
(viii) Negotiate appropriate productivity agreements; and
(ix) Introduce training programmes based on an analysis of productivity needs.
Component # 7. Human Resource Accounting:
Human Resource Accounting (HRA) means accounting for peoples as the organizational resource. It is the measurement of the cost and value of people to organizations and involves measuring the costs incurred on recruiting, selecting, hiring training and developing employees and judging their economic value to organization. HRA can be very useful in managerial decision making.
For instance, whether it is recruitment and selection or replacement of an employee, HRA can provide an estimate of the cost involved in the process. Similarly, it can help management in budgeting for development of human resource.
HRA can also provide data pertaining to turnout costs, the cost of employee’s absence and its impact on performance of others.
Component # 8. Human Resource Audit:
The purpose of human resource audit is to assess the effectiveness of the human resources functions and to ensure regulatory compliance. The audit can be conducted by anyone with sufficient human resources experiences. In auditing the human resource function, firstly the existing data has to be collected, such as, hiring statistics, turnover, compensation practice, exit interview summaries, employee complaints, human resources budget and expenditures, and so on.
Secondly, interview has to be conducted to collect input from the internal customer on their human resources needs and how those needs are being met. It has to begin with top management and then percolate down to line managers. HRA is a very vast subject and covers many delicate aspects of human and organizational interactions. The HR auditor is required to be very systematic in his job and define the task clearly as to which arena he has to cover.
Component # 9. Human Resource Information System (HRIS):
In order to conduct audit, HR professionals need considerable amount of data. HRIS is a method by which an organization collects, analyse and reports information about employees and jobs. It applies to information needs at macro and micro levels. HRIS is basically a data base system that offers important information about employees in the central and accessible location.
A computerize HRIS is designed to monitor, control and influence movement of employees from the time they join an organization) till the time they decide to leave the organisation.
What is HR Management – Significance
Significance of human resource management can be found in corporations, society, and different profession and in the whole nations.
On the basis of objectives and functions, importance or significance of HRM can be described in the following ways:
(i) HRM helps in attracting and retaining result oriented persons – Good human resource management practices help corporations in attracting and retaining qualified, able, and interested and result oriented persons.
(ii) Enables corporations to adopt scientific recruitment policy – Good HRM practice enables corporations to adopt suitable and scientific recruitment policy and to recruit right persons for right job.
(iii) Helps in scientific selection of employees – Scientific selection of employees depends on type of HRM practice adopted by an organization.
(iv) Helps to design a suitable training programme – HRM practice helps to design a suitable training programme for the employees on the basis of nature of job and type of employees selected for the job.
(v) Helps to motivate the employees – A well-developed HRM practice helps to motivate the employees (through financial and non-financial incentives) to work hard and to show better performance.
(vi) Enables to study the needs and wants of employees – As HRM is concerned with human beings working in an organization, it helps to study the needs and wants of persons working in an organization and ensures job satisfaction to them.
(viii) Helps to maintain good human relation – HRM helps to maintain good human relation between employees, employers and general public.
(ix) Helps to improve the quality of work life – Well developed HRM practice helps to improve the quality of work life and creates team spirit among employees by providing a healthy working environment.
(x) Helps to ensure industrial peace – Good human resource management practice helps to prevent labour-turnover, helps to handle grievances of employees and ensures industrial peace in the organization.
What is HR Management – 6 Major Process
Human resource management (HRM) is the process of determining human resources needs and then recruiting, selecting, developing, motivating, evaluating, compensating, and scheduling employees to achieve organisational goals. Human resource management is more than hiring and firing personnel. All activities are designed to achieve organisational goals within the laws that affect human resource management. (Note that human resource management includes motivation.)
Today the job of human resource management has taken on an increased role in the firm since qualified employees are much scarcer, which makes recruiting and retaining people more important and more difficult.
In the future, human resource management may become the firm’s most critical function, responsible for dealing with all aspects of a business’s most critical resource — people. In fact, the human resource function has become so important that it’s no longer the job of just one department; it’s a responsibility of all managers.
The following six steps are involved in the process:
Process # 1. Determining a Firm’s Human Resource Needs:
All management, including human resource management, begins with planning. The procedure used to tie human resource issues to the organisation’s business needs is called human resource planning (or HR planning). HR planning is defined as the “process of identifying and responding to [organisational needs] and charting new policies, systems, and programs that will assure effective human resource management under changing conditions.”
The purposes of HR planning, then, are – (1) to enable organisations to anticipate their future HRM needs and (2) to identify practices that will help them meet those needs. HR planning may be done on both a short- and long-term (three or more years) basis. Its aim is to ensure that people will be available with the appropriate characteristics and skills when and where the organisation needs them.
The use of HR planning enables companies to gain control of their future by preparing for events likely to occur. That is, they can anticipate change and devise appropriate courses of action. When companies learn how to capitalise on future events, their own future improves.
When engaged in human resource planning, a company derives its human resource needs by first forecasting its demand for human resources (i.e., the number and types of people needed to carry out the work of the organisation at some future point in time), and then, its supply (i.e., the positions that are expected to be already filled). The difference between the two forecasts signifies the firm’s HR needs, for example, if a firm estimates that it will demand 12 accountants during the next fiscal year and expects to retain its supply of 9 who are already on staff, its HR need would be to hire 3 additional accountants.
Process# 2. Selecting Employees who will be Productive:
Selection refers to the process of determining the skills, abilities and other attributes a person needs to perform a particular job. Simply put it is the process of gathering information and deciding who should be hired, under legal guidelines, to serve the best interests of the individual of the organisation.
Selection involves advertising or recruiting agency fees, interview time, medical exams, training costs, unproductive time spent learning the job, possible travel and moving expenses, and more. It can cost one and a half times the employee’s annual salary to recruit, process, and train even an entry-level worker, and over six figures’ for a top manager.
A typical selection process has six steps:
i. Obtaining complete application forms – Although equal employment laws limit the kinds of questions that can appear, applications help reveal the applicant’s educational background, work experience, career objectives, and other qualifications directly related to the job.
ii. Conducting initial and follow-up interviews – A staff member from the human resource department often screens applicants in a first interview. If the interviewer considers the applicant a potential hire, the manager who will supervise the new employee may interview the applicant as well.
iii. Giving employment tests – Organisations often use tests to measure basic competency in specific job skills like welding or firefighting, and to help evaluate applicants’ personalities and interests. The tests should always be directly related to the job.
iv. Conducting background investigations – Most organisations now investigate a candidate’s work record, school record, credit history, and references more carefully than in the past to help identify those most likely to succeed. It is simply too costly to hire, train and motivate people only to lose them and have to start the process overall again.
v. Obtaining results from physical exams – There are obvious benefits to hiring physically and mentally healthy people. In some states, physical exams can be given only after an offer of employment has been accepted.
vi. Establishing trial (probationary) periods – Often an organisation will hire an employee conditionally to let the person prove his or her value on the job. After a specified probationary period (perhaps six months or a year), the firm can either permanently hire or discharge that employee on the basis of supervisors’ evaluations.
The selection process is often long and difficult, but it is worth the effort to select new-employees carefully because of the high cost of replacing them. Adequate care helps ensure that new employees meet all requirements, including communication skills, education, technical skills, experience, personality and health.
Process # 3. Training and Developing Employees for Optimum Performance:
As technology and other innovations change the workplace, companies must offer training programmes that often are quite sophisticated. The term training and development includes all attempts to improve productivity by increasing an employee’s ability to perform. A well-designed training programme often leads to higher retention rates, increased productivity, and greater job satisfaction.
Training focuses on short-term skills, whereas development focuses on long-term abilities. Both include three steps – (i) assessing organisation needs and employee skills to determine training needs; (ii) designing training activities to meet identified needs; and (iii) evaluating the training’s effectiveness. Some common training and development activities are employee orientation, on-the-job training, apprenticeships, off-the-job training, vestibule training, job simulation, and management training.
Orientation is the activity which initiates new employees into the organisation; to fellow employees; to their immediate supervisors; and to the policies, practices, and objectives of the firm. Orientation programs range from informal talks to formal activities that last a day or more and often include scheduled visits to various departments and required reading of handbooks.
On-the-job training lets the employee learn by doing, or by watching others for a while and then imitating them, right at the workplace. On-the-job training is the easiest kind of training to implement when the job is relatively simple (such as – clerking in a store) or repetitive (such as – collecting refuse, cleaning carpets, or mowing lawns). Highly demanding or intricate jobs require a more intense training effort.
In-apprentice programme a trainee works alongside an experienced employee to master the skills a procedures of a craft. Some apprentice programmes include classroom training.
Off-the-job training occurs away from the workplace and consists of internal or external programme to develop any of a variety of skills or to foster personal development. Training is becoming more sophisticated as jobs become more sophisticated. Furthermore, training is expanding to include education and personal development.
Online training demonstraties how technology is improving the efficiency of many off-the-job training programs. Most colleges and universities now offer a wide variety of online classes, sometimes called distance, learning, including introductory business courses. Online training’s key advantage is the ability to provide a large number of employees with consistent content tailored to specific training needs at convenient times.
Vestibule training (or near-the-job training) is done in classrooms with equipment similar to that used on the job so that employees learn proper methods and safety procedures before assuming a specific job assignment. Computer and robotics training is often completed in a vestibule classroom.
Job simulation is the use of equipment that duplicates job conditions and tasks so that trainees can learn skills before attempting them on the job. It differs from vestibule training in that it duplicates the exact combination of conditions that occur on the job. This is the kind of training given to astronauts, airline pilots, army tank operators, ship captains, and others who must learn difficult procedures off the job.
Process # 4. Appraising Employee Performance to Get Optimum Results:
Managers must be able to determine whether their workers are doing an effective and efficient job, with a minimum of errors and disruptions. They do so by using a performance appraisal. It is a formal review of an employee’s performance for purposes of training or review of remuneration, using accepted standards, indicators, or a calibrated scale applied without partiality.
In short, performance appraisal is an evaluation that measures employee performance against established standards in order to make decisions about promotions, compensation, training, or termination. It is based on job evaluation. Job evaluation is the assessment of the work, responsibilities, skills and experience of workers on the basis of objective standards, with a view to setting proper and fair remuneration. So that comparable tasks are rewarded comparably.
Process # 5. Compensating Employees – Attracting and Keeping the Best:
Companies don’t just compete for customers; they also compete for employees. Compensation is one of the main tools companies use to attract qualified employees, and one of their largest operating costs. The long-term success of a firm — perhaps even its survival—may depend on how well it can control employee costs and optimise employee efficiency. In fact, determining how best to compensate employees is today’s greatest human resources challenge.
A carefully managed and competitive compensation and benefit programme can accomplish several objectives:
i. Attracting the kinds of people the organisation needs, and in sufficient numbers.
ii. Providing employees with the incentive to work efficiently and productively.
iii. Keeping valued employees from going to competitors or starting competing firms.
iv. Maintaining a competitive position in the marketplace by keeping costs low through high productivity from a satisfied workforce.
v. Providing employees with some sense of financial security through fringe benefits such as insurance and retirement benefits.
The way an organisation chooses to pay its employees can have a dramatic effect on efficiency and productivity. Managers thus look for a system that compensates employees fairly.
Most managers believe in using teams, but team-based pay programmes are not as effective or as fully developed as managers would hope. Measuring and rewarding individual performance on teams, while at the same time rewarding team performance, is tricky — but it can be done.
Skill-based pay rewards the growth of both the individual and the team. Base pay is raised when team members learn and apply new skills. Most gain-sharing systems base bonuses on improvements over previous performance. Nucor Steel, one of the largest U.S. steel producers, calculates bonuses on quality — tons of steel that go out the door with no defects. There are no limits on bonuses a team can earn; they usually average around $20,000 per employee each year.
It is important to reward individual team players also. Outstanding team players—who go beyond what is required and make an outstanding individual contribution — should be separately recognised, with cash or noncash rewards.
Process # 6. Moving Employees up, over, and out:
Employees don’t always stay in the position they were hired to fill. They may excel and move up the corporate ladder or fail and move out the door. Employees can also be reassigned or retire. Of course, some choose to move themselves by going to another company.
Promoting and Reassigning Employees:
Many companies find that promotion from within the company improves employee morale. It’s also cost-effective in that the promoted employees are already familiar with the corporate culture and procedures and don’t need to spend valuable time on basic orientation.
Even if the economy is booming, many companies are hesitant to hire or rehire workers full-time. Why is that the case? One reason is that the cost of terminating employees is prohibitively high in terms of lost training costs and possible damages and legal fees for wrongful discharge suits. That’s why many companies are either using temporary employees or outsourcing certain functions.
Companies looking to downsize sometimes offer early retirement benefits to entice older (and more expensive) workers to retire. Such benefits can include one-time cash payments, known in some companies as golden handshakes. The advantage early retirement benefits have over layoffs or firing is the increased morale of surviving employees. Retiring senior workers earlier also increases promotion opportunities for younger employees.
Losing Valued Employees:
In spite of a company’s efforts to retain them, some talented employees will choose to pursue opportunities elsewhere. Knowing their reasons for leaving can be invaluable in preventing the loss of other good people in the future. One way to learn the reasons is to have an outside expert conduct an exit interview. Outsiders can provide confidentiality and anonymity that earns more honest feedback than employees are comfortable giving in face-to-face interviews with their bosses.
Attracting and retaining the best employees is the key to success in the competitive global business environment. Dealing with controversial issues employees have on the job is challenging and never-ending.
What is HR Management – Top 2 Functions
The functions of human resource management can be broadly classified into the following two categories:
1. Managerial functions
2. Operative or Service functions.
Planning means deciding in advance or thinking before doing. It involves determination of what is to be done, where it is to be done, who is to do it and how the results are to be evaluated. It is the process of deciding the goals and formulating policies and programmes to achieve the goals. It bridges the gap between where we are and where we want to go. It involves planning of human resource requirement, recruitment, selection, training of employees and formulation of human resource policies, programmes etc.
Organizing is mainly concerned with allocating duties and establishing authority-responsibility relationship among the members of an organization and integrating their activities towards the achievement of the common goals of an organization. Organization is the place where management gets its work done through the united efforts of employees.
It is the process of telling and guiding the employees and supervising the working performance to ensure that workers work as per the plans. According to G.R. Terry direction involves issuance of orders and instructions and providing guidance and motivation to subordinates to follow the path laid down in advance. It is through direction that management gets its work done from its employees. Therefore directing involves guiding, motivating, leading and supervising the persons working in an organization.
Controlling means checking or verifying the working performance to ensure that everything occurs as per the plans drawn and instructions issued. It involves the observation of action and its comparison with plans and correction of deviation if any. Some of the means for controlling the personnel management function includes checking training programmes, analysing labour turnover records, directing morale-surveys, conducting separation interviews etc.
The operative or service functions are concerned with specific activities of human resources department.
These functions include procurement, development, compensation, integration and maintenance functions which are described below:
Procurement or employment function is concerned with procuring or obtaining and employing suitable persons possessing required qualities and qualification so as to achieve the goals of the organization.
Procurement function includes the following:
(a) Job analysis – Job analysis involves study of job so as to understand the contents, operations and responsibilities involved in the job. Its objective is to identify the type of persons required to perform the job. Job analysis provides data to prepare job description and job specification.
(b) Human resource planning – It involves estimation of man power requirement for an organization. On the basis of vacancy arising in an organization, present and future man power requirement is estimated which helps in avoiding excess or shortage of employees.
(c) Recruitment – Recruitment involves the process of searching and attracting potential employees towards the organization. Recruitment may be made either from within the organization or outside the organization.
(d) Selection – It is the process of choosing the right candidate and eliminating the un-desired one on the basis of qualification, quality, willingness and capacity of the candidates.
(e) Placement – It is the process of assigning the suitable job to the selected candidates in accordance with their qualification, ability and willingness so as to enable them to discharge their duties properly.
(f) Induction – It is a technique of introducing new employees to the existing employees and also to the policies, rules, regulation and environment of the organization so as to make the new employees familiar to the organization.
This function is concerned with the development or improvement of knowledge, skill, aptitude, attitude, status and morale of employees so as to make them to work with confidence and zeal and includes the following –
(a) Performance appraisal – It refers to systematic and continuous evaluation of employees with respect to their performance on-the-job and their potential for development. It is a process of evaluating an employee’s performance on the job in terms of its requirement.
(b) Training – It is a process by which skill, knowledge, aptitude and capacity of individual employee to perform specific job is increased.
(c) Executive Development – It is the process of developing managerial and human relation skill of employees. It is done by designing suitable executive development programme depending upon the necessity of the program me.
(d) Career planning and development – It involves planning of employees career, designing and implementing plan for development of employees career by means of education, training etc. It may be done through internal and external mobility of employees. Internal mobility of employees may be done through transfer, promotion or demotion of employees from one post to another.
Compensation function involves determination and payment of fair and equitable remuneration in the form of salary and wages to employees and includes the following –
(a) Job evaluation – Job evaluation is an effort to determine the relative value or worth of every job. Its objective is to fix or determine fair wages for a particular job.
(b) Wage and Salary administration – It involves adoption of suitable wage policy which ensures maximum protection to both employers and employees.
(c) Bonus – HRM department has to make an arrangement to pay bonus to its employees as per the payment of Bonus Act of 1965.
(d) Incentives – Along with paying salaries and wages, certain incentives are to be offered as a means of satisfying special needs of employees. For this purpose, organizations have to frame ‘incentive plan’ which will determine the type of incentives to be offered by the organization.
It is concerned with reconciliation of organization interest with the members of organization and society and creating harmonious relation between all. Integration may be made through motivating employees offering different financial and non-financial incentives, understanding the problems of employees and counselling them, handling employee’s grievances and providing job satisfaction through participation and collective bargaining etc.
It is concerned with safety of employees’ health at work. Employees have to maintain good health and hence organizations have to ensure safety of their health by providing social security measures and welfare facilities. Welfare facilities like medical aid, housing and conveyance facilities, education facilities to the children of employees etc., are to be ensured and social security measures like provident fund, pension, gratuity, group insurance etc., are also need to be provided as a safety measure to the employees.
What is HR Management – Factors Affecting HRM
Environment refers to the conditions that affect the behaviour and development of something .HRM is greatly affected by various changes and developments taking place in and outside the organization.
Basically two kinds of environment or forces are affecting HRM which are described below:
i. Political and Legal Factors:
Political and legal factors are considerably affecting on functions and policies of human resource management of various organizations. Change in the nature and attitude of political party like democracy or autocracy, change in the attitude of govt. like liberalization privatization and globalization will have considerable effect on human resources practices.
Important legislation affecting HRM in India are Factories Act, Minimum wages Act, Workman’s Compensation Act, payment of Bonus and Gratuities Act, Employees State Insurance Act, etc. All these factors are affecting on recruitment, selection, training, compensation management practices of Human Resources Management.
ii. Economic Environment:
Economic policy of the ruling government like liberalization, privatization, globalization, growth rate, per capita income, national income, money and capital market, industrial production, inflation rate etc., have significant influence on wage and salary levels of the organizations.
iii. Technological Factors:
Technological advancement like modernization, computerization and automation are also affecting on human resources management practices of the organization. Modernization and automation have made existing employees excess or surplus but requires skilled persons. Computerization have changed manual job in to mechanical.
Thus technology has affected on recruitment and selection policy of the organization. Job contents and method of work are changing. Job holders have become highly professionalized and present employees have to upgrade their skill and knowledge. Network of social relation among employees are affected and technology reduces human interaction at work place. Thus technological environment has made organizational work more mechanical.
iv. Demographic Factors:
Demographic factors like age, sex, literacy, caste and religion of the employees also influence the work culture of the organization. Workers demand “equal pay for equal work” irrespective of their caste, creed religion and sex. Manual work has become mechanical and regular work is divided in to different shifts and workers must be ready to work in both day and night shifts irrespective of their age and sex which may affect on-their health and productivity of the organization.
2. Internal Factors or Forces:
In addition to the external environment, internal environment also affects on human resources management practices of the organization. Internal environment comprises of factors inside or within the boundaries of the organization like organization policy, culture, structure, Trade Union, professional bodies etc., that affect inside or within the boundaries of the organization which are described below –
i. Organization Policy:
Policies guide the organization in achieving its objectives and tell the people about their role and responsibilities in the organization. Some of the important policies that influence the work of HR manager are policies to provide safe working condition to employees, policies to provide promotional avenue to employees, policies to provide compensation to employees, policies to offer standing answer to recurring problem of the employees etc.
ii. Organizational Culture:
Organization culture are sum total of the values, beliefs and habits within an organization which also influence the work of HR manager. It shows the personality of the organization and HR managers have to adjust positively to the culture of the organization. In order to formulate appropriate HR policies, it is necessary to understand the culture of organization and attitude of the people.
iii. Organization Structure:
There are mainly two types of organizational structures – tall and flat which may also affect on HR management practices of the organization. Tall or pyramid type of organization are suitable to labour oriented companies while flat type of organization are suitable to technology oriented companies where authority is decentralized.
iv. Trade Union:
Employees union also influences the work of HR manager. When there is a recognized employees union in the organization, issues relating to employees interest will have to be resolved after discussing with the Union representatives.
What is HR Management – Ethics (With Ethical Activities)
Human resource management is concerned with various ethical issues on the part of upper-level management, in its business decisions and lower-level management in the treatment of individual employees. In making decisions related to people, the human resource manager should consider alternatives that look after the needs of the business as well as employees. Human resource manager is given instructions from higher-level management to take actions which may be oppressive to the employees.
The manager must present alternate solutions to higher management which will have less impact on employee morale or find out the best method for implementing the instructions which have been given. One of the challenging aspects of human relations management is that human relations manager should maintain objectivity in hiring, promotion and compensation.
Sometimes, ethical human resource practices are not followed when organizations do not have a solid value-based culture from top to bottom levels. Issues such as sexual harassment, knowingly hiring illegal immigrants, biased performance reviews, wage and hour violations for the sake of saving overtime wages, terminating whistle-blowers for reasons unrelated to performance, lying for the sake of personal, corporate and shareholder gain etc. are the HR-invoIved workplace issues that promote ethical ignorance.
It is logical that compensation should be based on performance and ethical considerations should be considered in performance appraisal.
Employee evaluation is based on multiple factors such as punctuality, attitude, personal grooming, language, neatness, congeniality, performance output etc. The ethical challenge arises when decisions are made on the basis of factors other than those by which employees should be evaluated. For example, it is unethical for a supervisor to promote or increase compensation of an attractive woman who pays undue attention to him, but who consistently arrives late for her job and whose work is also not satisfactory.
Ethical violations within an organisation can result in:
(a) Loss of energy levels at work place,
(b) Gossips and rumors at the work place, increase in the rate of labour turnover, loss of trust amongst clients and in extreme cases, decrease in profits resulting in liquidation of the company,
(c) Decrease profits to the point of extinction.
Ethical Activities Related to Human Resource Management:
The values of Human Resource Management (HRM) cover issues arising around the employer-employee relationships such as rights and duties between employers and employees.
Discrimination means to distinguish between one person and another, not on the basis of merit or achievement but on the basis of non-job factors like- race, sex, age, colour, religion, national origin etc. It is a wrongful act as it is influenced on the basis of prejudice and immoral attitude.
2. Whistle Blowing:
“Whistle blowing means an employee’s disclosure to the public of alleged organisation misconduct, often after futile attempt to convince organisational authorities to take action against the alleged abuse.” The person who exposes the wrong doings to any interest groups is called a whistle blower.
Generally, whistle blower protection rights are designed to encourage employees to halt, report or testify about employer acts that are illegal or unhealthy, without fear of employer retaliation. If employers retaliate despite the fact that it is illegal, whistle blower protection provides avenues of relief for victims.
3. Occupational Health Care:
Safe work environment provides the basis for a person to enjoy his work. The work should not pose health hazards for the person.
4. Suitable Working Time:
State has fixed the number of working hours and the standard limits on overtime, time of vacation and taking free days before national holidays. It should be observed by organisations while framing human resource policies.
5. Appropriate Salary:
The employee and the employer agree upon the appropriate salary. The Government establishes each year the rate of minimum salary; the employer should not pay less than that to the employee.
6. Recognition of Work Life Issues:
All the issues related to work life should be addressed by the board and other important officials of the company like why observation is increasing, why people are not happy, do they need training, why employee morale is poor and numerous other issues. If these are addressed properly, they will be able to build, “People-Centred Organisations”.
7. Commitment to Improvement:
Quality of Work Life (QWL) can be improved if the staff is committed to improvement in productivity and performance. This issue can be taken by the board through staff recognition and support programmes. Board should prepare QWL reports on weekly basis to give boost to the system. They can also introduce reward system which will be of immense help to them.
8. Formation of Quality of Work Life Teams:
Board members must initiate to form the combined team of managers and workers and all the issues and common themes must be identified-
Work Life Teams = “Managers + Staff”
All issues must be addressed to these teams like loss of morale, lack of trust, increased intensity of work, reward, recognition etc. and they can commonly arrive at solutions.
9. Training to Facilitators:
Both the leader and staff can assess the job requirement and decide jointly what type of training is required to improve the quality of work life.
10. Conduct Focus Groups:
Formation of focus groups can affect the QWL and discus the questions in a positive way like:
(a) What brought you here today?
(b) What do you feel are the top three issues that affect your quality of work life?
(c) What do you want the organisation should do for you?
(d) Do you want company to increase the salary, etc.
11. Analyse Information from Focus Group:
After the formation of focus groups and their discussions on different issues and collection of information, the next factor which affects the QWL is the analysis of information which will give the right direction to employees’ work activities.
12. Identify and Implement Improvement Opportunities:
It is important to identify and implement improvement opportunities like communication has to be improved. Recognition and non-monetary compensation are highly beneficial to improve QWL. Improving support structure, constant review of reward and recognition system etc. help in formulating communication strategies, focusing on linkages between manager and staff.
What is HR Management – 3 Important Theories
The root of Maslow’s theory propounded in 1943 is that human needs are arranged in a hierarchy composed of five categories. The lowest level needs are physiological and the highest levels are self- actualization needs. Maslow started with the formulation that man is a needy animal with a hierarchy of needs, out of which some are lower in scale and some very high. As the lower needs are satisfied, higher needs emerge. Higher needs cannot be satisfied unless lower needs are fulfilled.
This resembles the standard economic theory of diminishing returns. The hierarchy of needs at work in the individual is a routine tool of the personnel trade, and when these needs are active, they act as powerful conditioners of behaviour—as motivators. The needs, from lowest level to the highest level, are physiological or body needs, safety and security, social or affiliation needs, ego or esteem needs, and self- realization or self-actualization needs.
These needs are briefly discussed below:
(a) Physiological or Body Needs:
This is the lowest level need which should be fulfilled before an individual craves for any of the other needs. An individual moves up the ladder responding first to the physiological needs for nourishment, clothing, and shelter. These physical needs must be equated with pay rate, pay practices, and to an extent with the physical conditions of the job.
(b) Safety and Security:
The next in order are safety needs. This is the need to be free from danger, either from other people or from environment. An individual wants to be assured that he is secure once his bodily needs are satisfied. The safety needs may also take the form of job security, security against disease, misfortune, old age, etc. as also against industrial injury. Such needs are generally met by safety laws, measures of social security, protective labour laws, and collective agreements.
(c) Social or Affiliation Needs:
Going up the scale of needs, an individual feels the desire to work in a cohesive group and develop a sense of belonging and identification with a group. He feels the need to love and be loved, and the need to belong and be identified with a group. In a large organization, it is not easy to build up social relations.
However, close relations can be built up with at least some fellow workers. Every employee wants to feel that he is wanted or accepted and that he is not an alien facing a hostile group.
(d) Ego or Esteem Needs:
These needs are reflected in our desire for status and recognition, respect and prestige in the workgroup or workplace, such as conferred by the recognition of one’s merit by promotion, by participation in management, and by the fulfilment of a worker’s urge for self- expression.
Some of these needs relate to one’s self-esteem, For example- need for achievement, self-confidence, knowledge, competence, etc. On the job, this means appreciation for a job. However, more importantly, it means a feeling that at all times he has the respect of his supervisor as a person and as a contributor to the organization’s goal.
(e) Self-Realization or Self-Actualization Needs:
By this time, the employee becomes growth-oriented, self-directed, and creative. This need reflects a state defined in terms of the extent to which an individual attains his personal goal. This is the need which totally lies within oneself and there is no demand from any external person.
To quote Maslow, A musician must make music, an artist must paint, a poet must write, if he is to be ultimately happy. What a man wants to be, he must be This need we may call self-actualization’.
The creativity of a man in producing new and practical ideas, and in bringing about productivity, innovation, and reducing costs might satisfy some of these needs.
Taking Maslow’s theory as the starting point, Clayton Alderfer (1969) built up a theory which he claims has realistic application to a work organization. According to him, Maslow’s five levels of needs can be amalgamated into three, that is, ‘existence, relatedness, and growth’, resulting in his approach being termed as the ‘ERG’ Theory-
i. ‘Existence Needs’ include all forms of physiological and safety needs or the first two level needs of Maslow.
ii. ‘Related Needs’ include relationship with other people (Social Needs of Maslow’s third level) and need for recognition and respect that forms the part of Maslow’s fourth level (Esteem Needs).
iii. ‘Growth Needs’, like Maslow’s notion of self-actualization, is concerned with the desire to be creative and to achieve full potential in the existing environment.
Novelty of Alderfer’s theory lies not in the regrouping of needs but in Maslow’s hierarchy of human needs. He conceived the ERG theory avoiding the implication that higher an individual is in the hierarchy, the better he is.
According to him, different types of needs can operate simultaneously, and if a particular path towards the satisfaction is blocked, the individual will both persist along that path and at the same time regress towards more easily satisfied needs. In this way, he distinguishes between chronic needs which persist over a period and the episode needs which are situational and can change according to the environment.
According to Herzberg (1968), every human has two different categories of needs, which are essentially independent of each other and affect his behaviour in different ways. When people are dissatisfied with their jobs, they are concerned about the environment in which they are working. On the other hand, when people feel good about their job, this has to do with the work itself.
Herzberg calls the first category of needs ‘hygiene factors’ because they describe a man’s environment and serve the primary purpose of job dissatisfaction. Hygiene factors include company policies, administration, supervision, working conditions, interpersonal relations, wages and allowances, status, and security.
He calls the second category of needs as motivators since they seem to be effective in motivating people to superior performance. Motivators or job content factors include achievement, recognition, and increased responsibility, challenging work, growth and development.
According to Herzberg, both the sets of factors work in only one direction. Absence of hygiene factors may dissatisfy the workers but will not demotivate them. Similarly, in the absence of motivator factors, workers may remain motivated, but their absence does not make them dissatisfied.
What is HR Management – Human Resource Management System (HRMS)
Human Resource Management Systems, such as, performance appraisal, rewards and punishment, training and development, and career and succession planning are important system levers for facilitating strategy implementation. All these systems influence managerial behaviour and motivation significantly, which in turn have a bearing on both the outcome as well as the process of implementation. Since strategy implementation essentially involves management of change, the human resource management system should be designed and administered in a manner that would align such systems with the strategy being pursued.
Of all the human resource management systems, the one which has a profound impact on implementation is the way people are evaluated and rewarded. The importance of people in creating and sustaining a competitive advantage cannot be overemphasised and hence the need for the utmost care in installing the right performance appraisal and rewards system.
The rewards system influences individual behaviour significantly in the way people conform to organisational strategies, achieve targets and reduce the gap between organisational and individual goals, and thus affect the quality of implementation. Unfortunately, managers in many organisations, more often than not, fail to align the evaluation and rewards system with the strategic changes they are contemplating.
Matching company and individual interests is a critical requisite for designing the reward system since any mismatch may encourage divergent behaviour and undermine overall effectiveness in implementation. An inappropriately designed reward system produces low morale and dissatisfaction and can encourage behaviours that are detrimental to a company’s interest.
While the right evaluation and reward system should be in place for all the employees of an organisation, special attention needs to be paid to the management staff since it has an overbearing influence on the implementation process. No wonder, several approaches are now available to evaluate and reward managerial performance. It is now possible to design a reward system in which risk and returns are shared with employees through profit sharing or gain sharing plans. The rewards can be financial or non-financial and can also be immediate or deferred (such as deferred stock option plans).
One of the cardinal principles for effective implementation is to ensure that the human resource management systems-including rewards and punishment-are closely aligned to the company strategy and organisational context. The need for such an alignment between the organisational context and strategy on one hand and human resource management systems on the other cannot be overemphasised.
What is HR Management – Role and Responsibilities of HR Manager
Role of HR Manager:
In the context of changing corporate environment, the role of HR manager has also changed.
He has to work in different capacities like a specialist, change agent, controller etc., which are described below:
1. Expert or Specialist:
HR manager is considered as an expert or specialist in the matters relating to HR functions like human resource planning, recruitment, selection, and training, promotion, transfer and compensation management. Therefore, he has to guide and advise all the functional heads in this matter.
He has to provide the required information to all the concerned staff and act as a source of help and inspiration. He has to attend all the HR problems faced by functional heads as if it was his own problem and give valuable suggestions in tackling such problems.
2. Pro-Active Actions:
HR manager is expected to take actions on proactive basis rather than on reactive basis. Proactive action involves identification of changes in factors affecting HR practices, designing actions to meet the requirement of the new scenario and implementing the actions in practice before any issue becomes a problem for an organisation.
Reactive actions are taken on the basis of change in factors affecting HR practices. Change takes place in a factor which becomes a problem for organization and HR manager has to tackle the problem and give a solution.
3. Change Agent:
HR manager must also act as a change agent in the organization. Because of changing environment, organizational change has also become most important issue. Such changes may be minor or major and may be related to internal or external problems of the organization.
He has to provide the infrastructure required depending upon the changing needs of the organization. Minor organizational change can be managed with the support of organizational internal staff whereas major change requires the help of external consultant. Thus, HR manager has to diagnose the problem, analyse its root cause and suggest suitable solution.
As a controller, HR manager has to assist all the line managers in effective implementation of HR policies and programmes. He has to monitor and control the progress of the organization and advice the staff in all the aspect of HR management. He should see that policies and procedures relating to HR are approved in the top level management and should ensure that those policies and procedures are being carried out in all the department of the organization.
5. Liaison Officer:
Sometimes HR manager also acts as a liaison officer and creates link and connectivity between all the departments of the organization. As a liaison officer he maintains good harmony between all the departmental managers and any dispute or friction between the department is ironed out by the HR manager. He also looks after the safety, health and welfare of all the employees working in the organization. Thus, HR manager plays different role and helps, advises and guides the organization in achieving its goals.
HR manager has no control over the management’s decision to reduce the size and strength of workforce. However, he can focus on retention of existing workforce.
Following are some of the responsibilities of HR manager:
Remuneration plays an important role in motivating employees to stay committed to the organization. Designing competitive salary is one of the major functions of HR manager. He also has to design other benefits such as bonus, group insurance, medical reimbursement, creche facilities, flexible working hours and so on. The aim is to retain competent workforce in the organization by meeting their expectations and needs.
The jobs assigned to employees must be according to their skills and potential. This requires assessment of employees’ capabilities so as to assign the jobs which suits their skill. Proper placement increases job satisfaction and helps in reducing attrition rate to a certain extent.
Certain percentage of vacancies arising in the organization can be filled by existing employees. It encourages employees to work harder and stay committed to the organization with hope of gaining promotion and higher pay.
HR team can invest in developing skills and abilities of employees through training. Training also facilitates further growth opportunities within the organization. Usually, employees stay loyal to the organization when the organization is also interested in their growth and development.
Employees undergo lot of stress due to work overload, deadlines, internal conflicts, personal problems etc. HR team can help employees to better deal with their problems through counselling. Counselling can help employees to handle the stress efficiently.
Employees must be made part of the decision making process. Especially, in the matters related to well-being of employees. It helps in gaining better co-operation from them while introducing new policies. They feel valuable and important as their needs and opinions are considered, which helps in reducing the attrition rate.
HR team can design policies which helps employees to balance their work and social life. Benefits such as flexible work timing, religious holidays, medical leaves, creche facilities, paid vacation plans etc. helps employees to stay committed to the organization.
Retaining and accumulating bonus of employees and giving it to them only after completing certain years of service helps to reduce attrition. In such case, employees stay loyal to the organization for long time in order to reclaim their bonus.
HR managers can use their managerial and communication skills to understand the reason for resignation and counsel them against quitting the organization.
What is HR Management – Relevance
The state of business in our world is such that we have to go beyond national boundaries. The rise of multinationals and transnational corporations places new requirements for the human resource management. Today the HRM must ensure that a perfect mix of knowledge, skills and cultural adaptability is available to handle international assignments.
Human Resource Management is essentially concerned with human element of the organization in a way that every goal of the organization is accomplished along with the growth and advancement of its human resource.
HRM contributes to organizations in the following ways:
(a) Helps organization in attracting and recruiting the best of the available manpower in the market.
(b) Helps to maintain the selected talent by adequately motivating, training and compensating them.
(c) Helps to give competitive edge to the organization by keeping the organizational climate very healthy. It helps to keep the atmosphere congenial for peaceful functioning of operations. Employees in such a climate perceive organization as their major goal satisfier. This becomes a boom for the organization.
(d) HR manager acts as a leader for preparing people in the organization to accept and adapt to the changes in the existing systems.
HRM department picks up employees from the society, therefore, an effective human resource department has a great significance for society.
It helps society in the following ways:
(a) By providing jobs to people which are in congruence with their qualifications.
(b) By providing employees with physiological, safety, social and psychological satisfaction through jobs.
(c) By maintaining welfare of society through creation of ways and means which would develop people in the long run e.g. through training and development programs.
(d) In its endeavour to achieve excellence it makes the best use of talent in the society.
HRM deals with individuals who populate positions in organizations.
They help individual employees in the following manner:
(a) By recruiting and selecting the suitable employees and developing them with different skill development, training programs.
(b) By looking after their compensation packages which are in accordance with their skills and talents.
(c) By motivating them to work with diligence in the organization.
(d) By looking after their post retirement welfare facilities.
HRM plays an important role in the development of the nation by effective utilization of nation’s natural, financial and physical resource. It enables to make the manpower improve its skills and talents. Skilful manpower improves all sub-systems of the economy and thus development takes off. Effective, committed and work sensitive manpower speeds up the process of economic growth leading to improvement in stands of living of people in the country.
What is HR Management – Implementing the Human Resource Matrix Management
Different departments in an organization can’t function in isolation. They have to interact and integrate their activities with other departments. In fact strategic management approach of performing needs various departments to integrate their activities with all other departments of the organization. Matrix management provides for an integrated version of management.
Organizations have been integrating their departmental activities since 1970 by means of cross- functional as well as horizontally and vertically in order to align with all other units of the organizations. In fact matrix organization structures are created with dual reporting systems to have close coordination and collaboration among all operating units of an organization.
Competition consequent upon globalization and strides in information technology placed the customer first and all organizational activities are aligned around the customer in order to serve the customer efficiently. As such matrix management is developed in order to align the activities and manage in multiple dimensions- horizontally where organizations align and optimize business processes and projects that serve the customer, and vertically, where we manage the resources that are then deployed to the horizontal arena.
Organizations also learned that employees do not need authority alone in order to get work done, but they should possess the skills of aligning the activities with other units vertically and horizontally. These are two of the key principles of the new matrix management.
In order to be successful, the HR matrix management requires the implementation of the elements of HR matrix management:
1. Horizontal Maps:
Horizontal maps represent the crucial pieces of the organization, the “how we do the job”, “who is accountable?” and the “support required and provided to manage each process from start to finish.” These are needed for each business process and need to include the customer/supplier relationships both within the process and between processes, the products produced, the owner of each process and the composition of the steering council that oversees the process.
2. Steering Councils:
Horizontal councils are created to govern the process at each level from the top to the bottom to oversee each cross-functional horizontal segment. Each council is led by a segment owner and is comprised of the leaders who participate in that segment.
3. Shared and Individual Goals:
All the members of each council work together and are accountable for the results jointly. In addition, these shared goals are decomposed into individual goals which members are also held accountable for.
4. Proactive Accountability:
Members of the council are interested in the action rather than the procedures and rules. Therefore, members act in the right time rather than waiting for the right person holding the authority. In other words every member is embowered to carry-out the tasks. This results in proactive accountability rather than waiting for the right person, and gets the thing spoiled and blame the person through reactive accountability.
5. A Project System:
There are only two ways that work gets done-through projects or business processes. Therefore, the strategic plan is no more than a portfolio of projects and it needs to be managed as such.
6. Business Process Management:
Business processes must be managed, otherwise they degrade. Like the project steering council, a business process council is led by an owner and is comprised of the business process leaders who oversee functions.
7. Team Based Methods:
Most management is done by teams. Because of this, teams need common methodologies they can use to get the work done, together.
What is HR Management – Emerging Trends
Following trends which are emerging at the global level as well as in India, have far reaching impact on human resource management practices:
1. Globalisation of Economy:
Today’s economy is globalised and the geographical boundaries of the country have only political relevance and the economic relevance has gained the significance. Today the market classification does not take in account only national parameters but it also adopts and adjusts to the global parameters.
Casico has emphasized that HR managers are required to know that international operations have:
(i) More functions, such as taxation and coordination of departments
(ii) More heterogeneous functions, such as coordination of multiple salary currencies.
(iii) More involvement in the employees’ personal life, such as housing, health, recreation and education.
2. Corporate Restructuring:
For achieving the faster growth rate, the corporate restructuring is comparatively a new technique. It involves restructuring the entire business around the organization’s core competencies. In restructuring there are additional dimensions of problems relating to managing human resources.
This process has following implications for managing human resources:
(i) Fear of loss of jobs
(ii) Anxiety and stress in the minds of employees
(iii) Transfer to new job locations
(iv) Job changes including new roles and assignments
(v) Problems of adjustment with new corporate culture and practices.
(vi) Changes in remuneration and benefits
(vii) Changes in career growth path
The role of HR department in managing such vulnerability is quite important as it is primarily responsible for integrating the individuals and the organisation.
3. Newer Organisational Designs:
Organisational designs have moved from the bureaucratic to adaptive structure, from mechanistic to organic structure, from tall to flat structure. In the light of changes taking place, the challenges before HR managers Human Resource Management in Globally Competitive Environment are enormous. Their contribution in facing these challenges will be in facilitating the processes which support the development of the company, rather than administering the system for controlling people.
4. Emphasis on Total Quality Management:
In the globalised economy there is very high emphasis on quality of both product and services. This emphasis has generated a new concept known as ‘Total Quality Management’ (TQM). TQM is a people oriented process. HR department is actively involved in this.
There are two problems in the application of the TQM:
(i) There may be some organisational barriers in the form of lack of support for TQM.
(ii) There may be some attitudinal barriers which provide impediments to TQM.
Both these problems can be overcome by developing proper climate for improving quality, systematic training and participation and empowerment of employees.
5. Emphasis on Kaizen:
Kaizen is a Japanese term which means continuous improvement or the improvement over improvement. It is a never ending process which is based on the assumption that there is always a scope of improvement. Kaizen involves personnel at all levels of the organisation i.e. top, middle, and lower level. The role of HR department is to prepare the personnel at various levels to participate in Kaizen by providing them the relevant training.
6. Changing Job Profile:
Nature of the jobs has changed over the period of time and this process is still continued. The major reason for these changes is the fast changing technology. The jobs of the employees are becoming more about thinking and collaborating rather than only doing.
Changing job profile is putting the greater pressure on the HR department for human resource planning, job descriptions and specifications for dynamic jobs and matching the job requirements with the characteristics of the job holders. Due to these reasons many researchers have suggested that the responsibility of recruitment should be assigned to outside agencies as it demands greater expertise.
7. Changing Workforce Profile:
With the change in the job profile, there is also a change in the profile of workforce. Today the workforce is more educated, skill oriented comparatively younger and have high job expectations. Therefore, there are challenges for the HR department to have realistic job preview so as to avoid unrealistic job expectations from the jobs which may not be fulfilled later, design of suitable retention strategies and quality of work life.
8. Increasing Role of Women Employees:
Throughout the World there is increasing role of women employees both in managerial cadre and in non-managerial cadre. The various companies in India launch time to time various recruitment programmes for women. Employment of women presents several challenges which HR department has to face. These are in the form of balancing career and family life, prevention of sexual harassment, and prejudices against women.
9. Emphasis on Knowledge Management:
Many companies have changed the nomenclature of human resource management to knowledge management. Knowledge management treats intellectual capital as a managed asset. Organisational dynamics, process engineering, and technology are the primary tools applied in the practice of knowledge management. In practicing knowledge management, there are many challenges before HR department.
HR manager has to function as strategic partner, an organisation builder, a change agent and an employee champion. Proactive strategies are required for facing the various emerging challenges in the field of human resource management. The organisation as a whole should be geared for the management of human resources and in which the human resource department will play the role of facilitator and enabler.