Human resource management


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Human resource management

  1. 1. Human Resource Management From the Book Human Resource Management (6th Edition) by- K.Aswathappa
  2. 2. Ch-1 Understanding the Nature & Scope of Human Resource Management• Def-: Functions like Recruitment, Selection, Training & Development (people’s dimension in an organization).• Scope-Entry-Leaving
  3. 3. HRM Functions & ObjectivesFunction-: supply of competent & willing employeesObjectives-: Societal (sensitive to needs & legal Compliance) Organizational (effectiveness, Planning, selection, Training & Development, Appraisal) Personal (employee career, potential, training & development)Outsourcing:72% of Indian companies are outsourcing their HR activities.e.g. Employee hiring, Training & development, Payroll preparation,Benefits administration, Statutory records maintenance.IIPM headquarters at KolkataNational Institute of Labor Management (NILM) at MumbaiMerged to form National Institute of Personnel management in 1980.
  4. 4. Chapter-2: Context of HRM• External – Political, Legal, Economic, Technological• Internal-Org. culture, Cultural, Unions, Professional bodies• Analysis helps in pro-active approach• Political: Article 14: Equality before the law Article 15: Prohibition of discrimination-religion, race, caste, sex or place of birth Article 16: Equality of opportunity in public employment Article 23: Prohibits forced labor Article 24: Prohibits employment of children –factories, mines/hazardous jobs Article 38(d) Equal pay for Equal work Article 38(e) Health & Strength of workers, tender age of children forced to work out of economic necessity- jobs not suitable to their health. Article 42: Just & Humane conditions of work & Maternity leave for women Article 43: Living wages for workers Article 43(a): Participation of workers in management
  5. 5. Economic:Supplier: provides HRCompetitorsCustomersEconomic GrowthIndustrial Labor- diversityGlobalizationTechnological: HRISInternal:Strategy, Task & LeadershipUnionsOrganizational culture & conflictEnacted Environment- own creation e.g. OPEC Knowing theDomain- carves out for itself, Domain Consensus EnvironmentTask Environment- all groups that can influence organization.E.g. range of products, technology, etc.Scanning the Environment: Trends & projections,E.g. labor market, legal environment etc.
  6. 6. Chapter-3 Integrating HR Strategy with Business Strategy• Strategic HRM- HR abilities – anyone who deals with people, regardless of functionality.• Barriers-  Perceived short-term  Inability of HR to think strategically  Senior managers lacks appreciation for HR values  Too much concerned with technicality rather than people values  Difficult to quantify HR outcome  HR other than capital assets is not owned by the company and hence risk in investment.
  7. 7. Corporate level strategies: which business?Growth strategies (horizontal, vertical, conglomerate, related-unrelated, mergers,strategic alliances)Stability strategiesRetrenchment strategiesBusiness level strategies: how to compete in chosen business, SBUFunctional level strategies : HR Identification of key HR activities Pro-reactive Critical thinking Explicit comm. of goals Quality & service Building core competenciesEnvironment scanningSWOT analysisStrategy implementationStrategy evaluation
  8. 8. Chapter-4 Human Resource Planning• The first part of human resource strategy is human resource planning• All other HR activities such as employee hiring, training & development, remuneration, appraisal, & labor relations are derived from HRP.• HRP is a sub-system in total Org. Planning• Importance:  Future personnel needs, succession planning  Part of strategic planning  Creating highly talented personnel  International strategy  Foundation for personnel functions  Investment in HR’s (human assets as compared to physical assets increase in value)  Resistance to change & move
  9. 9. Factors affecting HRP: 1. Type & strategy of Organization. 2. Organizational growth cycles 3. Environment uncertainties 4. Time horizons (short/long term) greater the uncertainty, shorter the time horizon 5. Type & quality of source information (HRIS) 6. Outsourcing
  10. 10. Environment scanning: •Economic •Technological •Demographic •Political & legislative •Social concernsOrganization objectives & policies: •Internal promotion •Training & development •Enrichment of job •Union •RetainingDemand: Quantity & QualityBasis- annual budget and long term corporate plan translated intoactivity levels for each function & department.External: Competition, EconomicInternal: Budget constraints, Employee separation etc.
  11. 11. Forecasting techniques: Managerial judgment-(bottom up/ top-down) Ratio trend analysis-(Past ratios, e.g. sales volume -employee size) Regression analysis Work supply technique(length of operation-amount of labor reqd.) Delphi technique Flow models (Markov analysis) I. Time span (Time to be covered-depends on HR Plan) II. Mutually exclusive categories of employees -movement in categories III. Estimate probability of transition based on past trends
  12. 12. HR supply forecast : External (e.g. colleges & universities)Internal : Existing Employees: from HR audit: Skills inventories (non-managers) Management inventories (managers) •Work history •Strengths •Weaknesses •Promotion potential •Career goals •Personal data •No. & types of employees supervised •Total budget managed •Previous management duties
  13. 13. Inflow-outflow = No. of current employeesTurnover rate = No. of separations in 1 year * 100 Avg. no. of employees in 1 yearAbsenteeism rate= No. of workers absent*No. of days)*100 Average no. of workers*No. of working daysE.g. 4% means 96 out of 100 are availableRetention plan: Compensation plan Performance appraisal Employee quitting because of conflict or green pastures The induction crisis(accurate job requirements, realistic job picture) Shortages Unstable recruits- find characteristics
  14. 14. Chapter-5 Analyzing work & Designing jobs• Origin civil right movement• Collecting job related information-Job description & specification• Monetary consideration is necessary- deciding whether a activity is work or not• Work has two characteristics- Sociological- Leadership, Politics, Power, Group dynamics Psychological- Learning, Attitude, Motivation, Satisfaction & Perception.• Job description – Task & Responsibilities Importance: – Lays foundation for HRP – Employee hiring – Training & development, Performance appraisal – Salary & wage fixation, Safety & Health.
  15. 15. ProcessStrategic choices: Extent of employee involvement, Level of detail, Timing & Frequency of analysis, Past oriented vs. Future orientedSources of job data:Non-human: Human:*Existing data *job analysis*Equipment maintenance record *job incumbents*Equipment blue print *supervisors*Work area architecture *job experts*Films of employee working*Training manuals*Magazines & news papers
  16. 16. 2) Information Gathering: •Type of data (time & budget constraints) •Methods of data collection •Who should collect: trained job analyzers, supervisors, job-incumbentsMethods: Observation Interview Questionnaire Checklists Technical conference Diary methods Quantitative: Position analysis questionnaire:194 elements, 6 categories ,degree of involvement Manager position development questionnaire Functional job analysis: Relation to people, data, & things.
  17. 17. Job Analysis Sheet
  18. 18. Job Description Sheet
  19. 19. Purpose of job analysis: •HRP •Employee hiring •Training & development •Performance appraisal •HRISJob design: conscious effort, organize tasks, duties & responsibilities, followsafter job- analysisOrganization factors: internal structure of each task requires planning,executing & controlling, completely integrated job.Work flow, Ergonomics, work practices.Environment factors: Availability of employees, abilities, social & culturalexpectations.Behavioral elements:Feedback,Autonomy,Use of abilities, Variety
  20. 20. Job Design ApproachesJob rotationJob engineering-specialization, time & motion studiesJob enlargementJob enrichment: adding more motivators (empowerment) Hertzberg 8 characteristics 1) Direct feedback 2) Personal accountability 3) Direct communication 4) Learning 5) Client relationship 6) Control over resources 7) Scheduling own work 8) Unique experienceSocio-technical systemsErgonomicsTele-commutingAlternative work pattern (scheduling)
  21. 21. Chapter-6 Recruiting Human resources• Recruitment represents the first contact that a company makes with potential employees.• Recruitment program helps the firm in 4 ways: 1. Attract highly qualified & competent people. 2. Ensure that the selected candidate stay longer with the company. 3. Make sure that there is match between cost & benefit. 4. Help the firm create more culturally diverse work force.• Factors governing Recruitment: External: Internal: Supply & demand Recruitment Policy Unemployment rate HRP Labor market Size of the Firm Political- legal Cost Image Growth & Expansion
  22. 22. Recruitment: process of identifying & attracting job seekers so as tobuild a pool of qualified job applicants. 5 stages: 2.Planning 3.Strategy development 4.Searching 5.Screening 6.Evaluation & control (how to distinguish applicants who are unqualified from thosewho have a reasonable chance of success)Planning: No. & Type (yield ratios)Strategy development: •Make/Buy, •Technological sophistication of recruitment & selection devices
  23. 23. Sources of recruitment:Internal: External:Present employees E- recruitmentEmployee referrals competitorsFormer employees consultantsPrevious applicants walk-in/write-in Campus recruitment Employment Exchange (Acc. To act, every Industrial Establishment ( >25 workers) should notify vacancies in it.)When to look: time lapsed dataSearching: source activation-reported by line managersSelling: realistic job picture + attract as many as possible.
  24. 24. Job compatibility questionnaire: whether an applicant’s preference forwork match the characteristics of the job.400 item instrument.Alternatives: overtimeEmployee leasing-outsourcing of recruitmentTemporary employment.
  25. 25. Chapter 7 Selecting Human Resources• Selection is the process of differentiating between applicants in order to identify & hire those with a greater likelihood of success in a job.
  26. 26. Choosing tests-reliability, validity, objectivity, & standardization.Contract of employment: Job title Duties Date when continuous employment starts Rate of pay, allowances, overtime, hours of work including lunch break & shift arrangements Sickness, Length of notice, Grievance procedure Disciplinary procedure Work rule Arrangements (terminating, union membership), Rights to patents, Employee rights to vary terms of contract subject to proper notification.Audit of selection program Feedback,  how well selected candidate perform,  turnover
  27. 27. Chapter-9 Training, Development & Career Management• Training & Development need ₌ standard Performance-Actual Performance.• Training:-Specific Skills• Development:- Learning opportunities for employees to grow• Source of competitive advantage
  28. 28. Chapter-10Appraising & Managing Performance
  29. 29. Design of Appraisal Program
  30. 30. Problems of Rating: Leniency or Severity Central Tendency Rater Effect Halo Error Primacy & Recency Effects Perceptual Set (previously held beliefs) Performance Dimension order Spill-over Effect (Past Performance) Status EffectSolving Rater’s problems:-Training to Raters
  31. 31. What should be rated: Quality Quantity  Timeliness Cost effectiveness Need for supervision Interpersonal impact Community service
  32. 32. Potential AppraisalConceptual effectivenessOperational effectivenessInterpersonal effectivenessAchievement motivation
  33. 33. Appraisal Methods
  34. 34. Methods of Job-evaluation Non-analytical:Analytical:• Factor comparison: factors • Ranking: no yardstick compared, e.g.- mental • Job grading-yardstick for requirements, skills, classification physical, etc.• Point- ranking method: selection of job factors ( skills, education, responsibility, job conditions, etc.)- given points.
  35. 35. Chapter-11Managing Basic Remuneration
  36. 36. Theories of RemunerationReinforcement & Expectancy TheoryBehavior which has rewarding experience is likely to be repeated.Vroom’s Expectancy theory focuses on link between rewards &behavior.Equity Theory:Internal Equity: different jobs in the OrganizationExternal Equity: relative to outside similar jobIndividual EquityAgency Theory: To align with organizational goals
  37. 37. •Demand & Supply-going rate system•Legislation: Payment of wages act, 1936 (regulate irregularity & unauthorized deduction, payment in particular form & at regular interval) Minimum wages act, 1948 Payment of Bonus act, 1965 Payment of Gratuity act, 1972 Equal remuneration act, 1976 Wage Boards, tribunals, & fair wage committees.•Managerial Remuneration: Company’s Act, 1956.•Business strategy:Invest to grow:----------→Entrepreneurial SkillsManage Earnings:-------→Management EffectivenessHarvest:--------------------→Cost controlMinimum wage-----------→ Fair Wage---------------→Living Wage(frugalcomforts)
  38. 38. Chapter-13 Managing Employee Benefits & Services• Why Benefits & services?  Mitigate fatigue  Discourage labor unrest  Satisfy employee objectives  Aid recruitment  Reduce turnover, and  Minimize overtime costs• E.g. Legally required: old age pension, health insurance, worker’s compensation, unemployment compensation
  39. 39. Contingent & deferred benefits: Pension plans Group life insurance Group health insurance Annual wage Maternity leave Child care leave Sick leave Dental benefits Suggestion awardsOther benefits: Travel allowances Company car & subsidies Moving expenses Uniform & tool expense Employee meal allowances Child-care facilities
  40. 40. 3 conditions: Monetary calculable Not specific amount Not specific time for payment
  41. 41. Chapter-14Motivation Perspectives
  42. 42. Intrinsic factors: Work itself Responsibility AdvancementVroom’s Expectancy Model : Expectancy: expectancy-performance Effort Performance Goal Valence(desire-likeability for goal) Expectancy*Instrumentality*Valence Probability-0-1 1st level outcome-2nd (-1-----+1) level outcome (0(indifferent)/1/-1(hatred)) Not tested empirically
  43. 43. Equity theory-To be treated equitably at work place Criticism (judgment of fair treatment)Porter & Lawler performance-satisfaction Model: Place the right person in the right job (abilities & traits) Carefully explain their role Explain in concrete terms performance level expected Rewards preferred
  44. 44. Chapter-16Motivation in action
  45. 45. Performance based rewardsOrganization: profit sharing, stock optionsTeam: gain sharing, special bonusesIndividual: piece rate, commissionSkill Variety Experienced High internalTask identity meaningfulness of job WorkTask significance Motivation, Experience LowAutonomy responsibility absenteeism &Feedback Knowledge of actual Turnover results
  46. 46. Contemporary Job Design: Telecommuting Flexi-work Task revision Skill development
  47. 47. Participation at the board levelParticipation through share ownershipThrough joint councils, committees, & work councilsThrough job enlargement, & job enrichmentThrough quality circlesThrough empowered teamsQuality of Work Life:Ensured when members of an organization are able to satisfy theirimportant personal needs through their experiences in organization.
  48. 48. Chapter-17 Empowering Employees• Participative Management also called Employee Empowerment• Staff/Work councils-representation entirely of workers/employees• Joint councils/committees-both employee & employer• Article 43 A (42nd amendment) state through suitable legislation – Human welfare – Human as thinking & independent free being – Mental & physical health – Enhancing self-belief & self-efficacy• Negative consequences of hierarchy & authority – 1975-1977 Emergency 20 points program for – 1977- Janta worker’s participation – 1979- congress – Bill- may 30, 1990 in Rajya Sabha-----------making it statutory• Shop floor council & Establishment Council
  49. 49. Chapter-18 Communicating with Employees• Exchange & understanding of information• Play’s a major role in changing people’s attitude• Mould by supply of information e.g. company’s news letter• Decision maker’s need information from many people to perceive problems etc.• Originate Channel Receive Sender- Verbal, Selective Listening, Clarity of Non- Perceptions (stereotyping, thought verbal projection-reflecting of one’s Tone, own thoughts on others, halo- Facial, effect) Body- language
  50. 50. Meta communication- interpretation (add our own interpretation)Remedy-Active listeningOrganization Communication : AuthorityCommunication Roles: Gate keepers, Liaisons (not members of anygroup), Isolates, cosmopolites-external world
  51. 51. Chapter-19 Managing Betterment at work• The Factories Act, 1948 a) Washing Facilities b) Facilities for storing & drying Clothes c) Sitting facilities for occasional rest for workers who are obliged to work standing d) First aid boxes, one for every 150 workers & ambulance facilities, if there are more than 500 workers e) Canteen, if employing more than 250 workers f) Shelters, rest rooms, lunch rooms, if employing more than 150 workers g) Crèche, if employing more than 30 women h) Welfare officer, if employing more than 500 workers
  52. 52. a) Not more than 48 hours per weekb) Not more than 9 hours per dayc) No worker has to remain in factory for more than 10 ½ hoursd) Rest interval of ½ hour, after 5 hours of worke) Weekly one holidayf) If worker puts more than 48 hours per week-overtime wagesg) No overlapping of shifth) Women workers are not to be employed between 7 p.m. & 6 a.m. (exception allowed)i) No child below 14 years of age to be employed
  53. 53. Chapter-20A safe & Healthy Environment
  54. 54. Strategic choices- level of protection Formal/informal Proactive/reactive(as marketing tool)Safety Policy: goals, responsibility, & authorityOrganization for safety -Safety committeesRisk managementAssessing risks (frequency, probability, & severity), steps to reduceIncidence rate: no. of recordable injuries * 1 million no. of employee exposure hoursSeverity rate= no. of work hours lost * 1 million total no. of worked hours
  55. 55. Remedies: Engineering revision, Persuasion & appeal, Personal adjustment & discipline Training, Safety posters & film shows, Safety week & awardsEffectiveness: organic- how well designed, change in behavior, safety inspection, auditHealth: Physical & Mental
  56. 56. Factories Act, 1948Factories to be kept clean & free from effluvia & dirtArrangements to be made for disposal of wastes & effluentsAdequate ventilation & temperature to be maintainedMeasures to be taken for prevention of inhalation or accumulationof dust & fumesStandards for artificial humidification to be fixedOvercrowded related injuries to health of workers to be avoided(9.9/14.2 cubic meters of space must be provided for each worker)
  57. 57. Sufficient & suitable lightening must be provided in every part offactoryGlazed windows to be kept clean, measures for prevention of glare& shadowsSuitable points for wholesome drinking water- legibly marked &away from urinals. Water needs to be cooled, if no. of workers 250 ormoreLatrines & urinals separately for males & females, well lighted &ventilatedSufficient no. of spittoons
  58. 58. Stress: individual response to disturbing factor in the environment.Eustress-positive stress
  59. 59. Remedies: Meditation Cognitive restructuring: replacement of thoughts- reasons applied Time management: Delegate as much as possible minor work to subordinates
  60. 60. Chapter-26Evaluating HRM Effectiveness
  61. 61. HR Research Wage surveys Effectiveness of various recruitment sources Effectiveness of training efforts Survey of supervisor’s effectiveness Job analysis Survey of employee needs etc.
  62. 62. Analytical approach:Cost-benefit analysis (utility analysis)(excessive reliance on quantitative)- dysfunctionalQualitative – (loyalty, commitment, attitude etc.)Balanced Score Card: 4 dimensions 2.Financial Performance 3.Customer Service 4.Internal Business Processes 5.Capacity to learn & achieve growth