Organization as Input-Output system Acquiring inputs from environment Using financial resources by human resources Conversion Process By human resources Outputs Exporting to Environment By human resources
Meaning: It is a process of bringing people and organizations together so that the goals of each are met. According to Invancevich and Glueck : “HRM is concerned with the most effective use of people to achieve organizational and individual goals.” According to Milkovich and Boudreau : “Human Resource Management is a series of integrated decisions that form the employment relationship; their quality contributes to the ability of the organizations and the employees to achieve their objectives.”
There have been several approaches on the concepts of relationship between HRM and Personnel management:
Comparison includes studying Similarity and Differences.
Armstrong suggests common features of Personnel management and Human Resource Management:
Strategies of both stem from the business strategy.
2. Both these recognize that line managers are responsible for managing people. And the line managers are enabled by the advice and support of the personnel department to carry out their responsibilities.
3. The value of personnel management and those of soft version of human resource management are identical vis-à-vis respect for individual, integration of individual needs and organizational goals, and development of people to accomplish competence to facilitate individual and organizational interests.
Both attach importance to the function of matching people to ever-changing business requirements.
Both use the same range of selection, competence analysis, performance management, training, management development and reward management techniques.
The soft version of human resource management and personnel management stresses the process of communication and participates within the employee relations analysis.
Differences between Personnel Management and HRM
Personnel Management is a routine, maintenance-oriented administrative function; human resource management places emphasis on a continuous development of people at work.
2. Personnel Management function is mainly reactive and responds to the demands of an organization whenever they arise, while HRM is proactive function (more future oriented)
3. Personnel Management is seen as independent function and sub-functions without giving due-regard to organizational strategies and processes. HRM is viewed as sub-system of the organization as it takes into account its linkages and interfaces with all other parts of the organization.
4. Personnel Management has a narrow focus it mainly works on improving the efficiency of personnel in isolation without emphasizing the relevance of efficiency in the organizational context, while HRM undertakes a systems view which attempts to create a proper organizational culture. 5. Personnel management emphasizes on economic rewards and traditional job design for better performances, while HRM emphasizes on the satisfaction of higher needs for motivating people, such as autonomous work groups, challenging jobs, creativity. 6. Personnel Management considers job satisfaction and higher moral as a cause of improved performance, while HRM works on the premise that better performance itself is a source of satisfaction and high morale.
Evolution of HRM The evolution to the current state of HRM has passed through several stages: Industrial Revolution Scientific Management Trade Unionism Human Relations Movement Human Resources Approach
Functions of HRM As HRM is the management of human resources in an organization and is concerned with the creation of harmonious working relationship among its participants and bringing about their utmost individual development. Functions of HRM Managerial functions Operative functions
The operative functions of HRM are concerned with the activities specifically dealing with:
The Procurement Function
The Development Function
The Compensating Function
The Integration Function
The Maintenance Function
HRM and Corporate Objectives HRM is being used to develop competitive advantage and, therefore, its role in strategic management has been well recognized. “Strategic management is the continuous process of relating the organization with its environment by suitable course of action involving strategy formulation and its implementation.” Strategy is course of action through which the organization relates itself with the environment so as to achieve its objectives.
Corporate mission and objectives Environmental opportunities and threats Strategic Alternatives Corporate strengths and weaknesses Personal Values and aspirations of strategists Choice of strategy Strategy Implementation Activating strategy Structural implementation Behavioral implementation Functional implementation Role of HRM Acquiring, Developing, Integrating, and Retaining right personnel Role of HRM in corporate strategic management process
“ Human Resource Planning is the process by which an organization ensures that it has the right number and kind of people, at the right place, at the right time, capable of effectively and efficiently completing those tasks that will help the organization achieve its overall objectives.”
HRP is a process
It involves determination of needs
It also takes into account the manpower availability at
Human Resource Planning Process Organizational Objectives, Plans and policies Human Resource Planning Identification of human resource gap Actions plan for bridging gap Forecasting supply of human resources Shortage of human resources Forecasting needs for human resources Surplus human resources
Steps in HRP 1 Organizational objectives, plans and policies 2. Human Resource Planning Forecasting the demand and supply of human Resources 3. Identification of Human Resource Gap 4. Action Plans
Techniques for Forecasting Human Resource Needs
Improper Linkage between HRP and Corporate Strategy
Inadequate Appreciation of HRP
Rigidity in Attitudes
Conflict between Long-term and short-term HRP
Inappropriate HR Information System
Job Analysis Developing an Organization’s structure results in creating jobs which have to be staffed. Job:- A job may be defined as a “ Collection or aggregation of tasks, duties and responsibilities which as a whole, are regarded as a regular assignment to individual employees” Job Analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. The immediate products of the analysis are job descriptions and job specifications”
Determination of uses of job analysis Strategic Choices in job analysis Information Collection Information Processing Job Description Job Specification JOB ANALYSIS PROCESS
Job Description A job description is an organized, factual statement of duties and responsibilities of a specific job. It is basically descriptive in nature. It provides both organizational information and functional information. 1. Job Identification 2. Job Summary 3. Job duties and responsibilities 4. Relation to other jobs 5. Supervision 6. Machine 7. Working Conditions 8. Hazards
Job Specification Job Specification is a statement of the minimum acceptable human qualities necessary to perform a job properly. It tells what kind of person to recruit and for what qualities that person should be tested. 1. Physical Characteristics 2. Psychological Characteristics 3. Responsibilities 4. Other features of demographic nature
Recruitment Recruitment is the process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applicants from which new employees are selected. ----- Werther and Davis Human Resource Planning Job Analysis Recruitment Selection Placement Linkage of recruitment to human resource Acquisition
Recruitment represents the first contact that a company makes with the personnel having potential to be employed.
It determines the present and future human resource requirements in conjunction with human resource planning.
It helps to increase the pool of potential personnel.
It helps in increasing the success rate of the selection process.
It reduces the rate of initial turnover rate.
It helps in evaluating the effectiveness of various recruitment techniques
It helps to meet the organization’s legal and social obligations regarding composition of its workforce.
Factors affecting recruitment Internal factors: Company’s pay package; Quality of work life; Organizational culture; Career planning and growth; Company’s size; Company’s products and services; Geographical spread of the company’s operations; Company’s growth rate; Role of trade unions; Cost of recruitment; Company’s name and fame.
External factors: Socio economic factors; Supply and demand factors; Employment rate; Labour market conditions; Political, legal and governmental factors; Information systems.
Sources are those where prospective employees are available like employment exchange while techniques are those, which stimulate the prospective employees to apply for jobs like nomination by employees, advertising, promotion etc.
Present Permanent employees
Present temporary and casual employees
Retrenched or retired employees
Dependents of deceased, disabled, retired and present employees
Once the recruitment is through with, the management has to perform the function of selecting the right candidate at right time.
This is done through selection procedure and it a customized one.
It basically depends upon several factors
Financial resources allocated for the same
Company’s past records
Company’s image in the market
Steps in selection procedure : - Development bases for selection Job Analysis Application Blanks Human Resource Plan Written Examination Recruitment Preliminary Interview Business Games Tests Final Interview Assess the fit between Medical Examination The job and the candidate Line Manager’s Decision Employment
Job Analysis:- It is the basis for selecting the right candidate
Recruitment:- It refers to the process of searching for prospective employees and stimulating them to apply for jobs in an organization.
Application Blank:- It is a form through which the data is collected about the candidates and the initial screening is done.
- Personal Background Information
- Educational Attainments
- Work experience
- Personal Details
4. Written Examination:- The candidate qualified through the application blank is required to pass through the written test. - Quantitative knowledge - Aptitude reasoning - General knowledge - English language knowledge 5. Preliminary Interview:- This interview is to solicit necessary information from the prospective candidates and to assess the applicant’s suitability for the job. This is known as stand-up interview. At this level business games are also used as a tool for judging candidates suitability for the job, which mainly includes the techniques used to judge the situation handling and problem solving.
6. Group Discussions:- This technique is used in order to secure further information regarding the candidates suitability for the job.
7. Tests:- It is a most significant stage in the process of selection.
These employment tests are an instrument designed to measure the nature and degree of one’s psychological potentialities, based on psychological factors, essential to perform a job.
Types of tests
8. Final Interview:- In this the interviewer matches the information obtained about the candidates through various means, to the job requirements and to the information obtained through his own observation. Types of interview Preliminary Interview Core Interview Decision-Making Interview
9. Medical examination:- Certain jobs require certain physical qualities like clear vision, perfect hearing, unusual stamina, tolerance of hard working conditions. 10. Reference Checks:- After the completion of the final interview and medical examination, the personal departments checks the references with the candidates. 11. Final decision by line managers:- The final decision has to be made by the line manager, under whom the candidate has to actually perform. 12. Employment:- The successful and the unsuccessful candidates have to be informed and the appointment letter must be sent.
When once the candidate reports for duty, the organization has to place him initially in that job for which he is selected.
Employees are trained for the job and also in relation to related jobs.
Employee is placed on the actual position, only when the probation period is over.
if the performance is satisfactory then only the candidates are regularized.
INDUCTION “ Induction is the process of receiving and welcoming an employee when he first joins a company and giving him the basic information he needs to settle down quickly and happily and start work.” This process is having lot of significance, as the rate of turnover among new employees is very high in comparison to senior executives. (Lectures, handbooks, films, group seminars are used to impart the information to new employees about the environment of the job)
Providing basic information about working arrangements
Indicating the standards of performance and behaviour
Informing them about training facilities
Creating the feeling of social security
Minimizing the reality shock which would be caused due to incompatibility.
Internal Mobility The lateral or vertical movement (promotion, transfer, demotion or separation) of an employee within an organization is called internal mobility. It may take place between jobs in various departments or divisions. Some employees may leave the organization for reasons such as better prospects, retirement, terminations etc. Such movements are known as external mobility.
Transfers A transfer is a change in job assignment. It may involve a promotion or demotion or no change at all in status and responsibility.
Promotion refer to upward movement of an employee from current from current job to another that is higher in pay, responsibility and/or organizational level. promotion brings enhanced status, better pay, increased responsibility, better working condition to the promote.
Career is all the jobs that are held during one’s working life.
Career Path is the sequential pattern of jobs that form a career.
Career Planning is the process by which one selects career goals and the path to these goals
Career Development is those personal improvements one undertakes to achieve a personal career plan.
Career Management is the process of designing and implementing goals, plans and strategies to enable the organization to satisfy employee needs while allowing individuals to achieve their career goals.
P E R F O R M A N C E AGE Stages in Career Development Exploration Establish -ment Transition from college to work Getting first job and being accepted Mid- career Performance increaseor decrease or maintain Late Career The elder states person Decline Retirement
From an organization’s point of view, career planning has a long-term orientation for filling various positions from internal sources. When this practice is followed, the organization derives the following benefits from career planning:
Assured availability of talent
Attracting and retaining talent
Promoting organizational image
Protecting Interests of Special Groups of Employees
Organizations exist as on-going concerns while personnel come in and go out on regular basis. Therefore, the continued existence of an organization over time requires a succession of personnel to key positions.
So, this basically requires the succession planning:-
Signal to employees the major objectives of the organizations, such as quality, customer focus etc;
Attract and retain the talent, an organization needs;
Encourage employees to develop the skills and abilities they need;
Motivate employees to perform effectively;
Create the type of culture the company seeks to engender.
Compensation Management Process Organization’s Strategy Compensation Policy Job Analysis & Evaluation Analysis of contingent factors Design and implementation of compensation plan Evaluation and Review
Job evaluation deals with money and work. It determines the relative worth or money value of jobs.
Wendell l. French defined job evaluation as, “a process of determining the relative worth of the various jobs within the organisation, so that differential wages may be paid to jobs of different worth .
Thus, job evaluation may be defined as a process of determining the relative worth of jobs, ranking and grading them by comparing the duties and responsibilities like skill, knowledge of a job with other jobs with a view to fix compensation.
The worker is guaranteed an hourly or a day-rate with an alternative piece rate.
If the earnings of a worker at piece rate>Amount through time basis = he gets credit for the balance
If the earnings through piece rate = time basis = question of excess payment do not arises.
If the earnings of a worker at piece rate<Amount through time basis = he is paid on the basis of time rate.
Pay for Performance An incentive or reward can be anything that attracts an employee’s attention and stimulates him to work. According to BURACK and SMITH – ” An incentive scheme is a plan or programme to motivate individuals or group performance. An incentive programme is most frequently built on monetary rewards but may also include a variety of non-monetary rewards.”
Classification or types of incentives:- Incentives can be classified into:- DIRECT COMPENSATION INDIRECT COMPENSATION Direct Compensation :- It includes the basic salary or wage that the individual is entitled to for his job, over-time work and holiday premium, bonuses based on performance. Indirect Compensation :- It includes protection programmes (insurance plans, pensions), pay for time not worked, services and perquisites. ---These are maintenance factors.
Determinants of incentives The individuals Work situation -Technology - Satisfying job assignment - Feedback - equity Incentive plan
In many organizations, the managers are paid BONUS.
There are two types of bonus.
Determined by formula , like as increase in sales
Determined by some discretion used in the allocation of bonus
For top level management bonuses are generally tied to overall corporate results.
Incentives for managerial personnel
Non-monetary incentives While monetary incentives often appear as important motivators, many factors unrelated to money can also serve as “attention-getters” and “encouragers of action”. Examples:- - A person with strong need for affiliation may respond readily to job assignments. -The opportunity to communicate with and relate to others is a factor many workers emphasize. -An employee with high-level desires for power may respond easily to opportunity, where he can gain leadership. -Persons interested in enhancing their reputations and receiving recognition in the eyes of others, respond to verbal praise.
Services & Benefits Besides base compensation and incentives, employees are provided various types of benefits and services by the organizations. These are called by various names such as fringe benefits, employee welfare, wage supplements, sub wages, supplementary compensation, social security etc.
Definition:- “ Fringe benefits are supplements to wages received by workers at a cost to the employers. The term encompasses a number of benefits-paid vacation, pension, health and insurance plans, etc.—which usually add up to something more than a fringe and is sometimes applied to a practice that may constitute dubious benefits for workers.”
Performance appraisal is the method of evaluating the behaviour of employees in the work spot, normally including both the quantitative and qualitative aspects of job performance. So, performance appraisal is a systematic and objective way of evaluating both work related behaviour and potential of employees.
Informal appraisals are conducted whenever the supervisor or personnel managers feel it is necessary. However, systematic appraisals are conducted on a regular basis, say, for ext; every six months or annually.
This is an attempt to the updation of the traditional employee appraisal process & is one of the fashionable techniques of the mid 1990s, fitting in with other news tools called team mgt, employee empowerment and total quality management.
360 - feedback, as the term implies, brings together formal appraisals from everybody that the person being assessed comes into contact with line mangers, subordinates, colleagues, peers, and even outsiders such as clients.
Another name for it is multi – source feedback and a variant is upward feedback, in which subordinates appraise their supervisor’s performance.
The standard checkpoint survey has to items and takes approx. 15 minutes to complete it covers competencies in the areas of communications, leadership, adaptability, Relationships, task Management, Production, Development of others.
Results from all these surveys are compiled in a confidential feed back report.
Graphs and charts relate the data in a detailed, easy – to – understand format.
3) Participants use the information from the feedback report to establish goals and ongoing action plans, aimed at better utilizing their strong points and improving their weaker skills.
Evaluating what a person can perform or do is called ‘potential appraisal or evaluation’.
Potential refers to the abilities present but not currently utilized. It is a latent capacity in a person to discharge a responsibility.
“ people are like icebergs. What you see above the surface is only a small part. A large part of the attributes needed to perform excellently in future job, which I call potential is not immediately visible. It is hidden below surface”.
“ Industrial relation is concerned with the system and procedures used by unions and employers to determine the reward for effort and other conditions of employment, to protect the interest of the employed and their employers, and to regulate the ways in which employers treat their employees.”
According to Industrial Labour Organization (ILO)-
“ Industrial relation deal with either the relationship between the state and employers and workers organization or the relation between the occupational organizational themselves.”