Fundamental of Human resource management

1. Introduction:
Human resource management (HRM) is the process of managing an organization's employees in
a strategic and efficient manner. It involves recruiting, hiring, training, developing,
compensating, and retaining employees. HRM also deals with issues related to employee
relations, performance management, and compliance with employment laws and regulations’ is
an integral part of the management process because it helps organizations achieve their goals by
effectively utilizing their human capital. By managing employees effectively, organizations can
improve productivity, reduce turnover, and enhance overall performance. HRM also plays a
critical role in creating a positive work culture and fostering employee engagement, which can
lead to higher levels of job satisfaction and better business outcomes.
Definition of HRM:
The process of acquiring, training, and compensating employees, and of attending to their labor
relations, health and safety, and fairness concerns. It is, indeed, the heart of the organizations.
Human resource management is the process of planning, organizing, controlling and directing
in an organization. In this way, it helps an organization to achieve the success by attaining the
advantages in managing.
The Management Process:
Planning:
Planning is the continuous process of making present entrepreneurial decisions systematically
and with best possible knowledge of their futurity, organizing systematically the efforts needed
to carry out these decisions and measuring the results of these decisions against the expectations
through organized and systematic feedback.
Organizing:
Organizing requires a formal structure of authority and the direction and flow of such authority
through which work subdivisions are defined, arranged and coordinated so that each part.
Staffing: Staffing is the function of hiring and retaining a suitable work-force for the enterprise
both at managerial as well as non-managerial levels. It involves the process of recruiting,
training, developing, compensating and evaluating employees and maintaining this workforce
with proper incentives and motivations. Since the human element is the most vital factor in the
process of management, it is important to recruit the right personnel.
Leading/Directing
The directing function is concerned with leadership, communication, motivation, and supervision
so that the employees perform their activities in the most efficient manner possible, in order to

2. achieve the desired goals. The leadership element involves issuing of instructions and guiding
the subordinates about procedures and methods.
Controlling:
Controlling is the measurement & correction of performance activities of subordinates in order to
make sure that the organizational objectives and plans desired to obtain them as being
accomplished”.
Top 11 tasks where the Role of HR is important
The role of Human Resource is important in various tasks and areas within a company. Listed
below are top tasks where role of HR is important in an organization:
1. Recruitment and selection
HR is responsible for recruiting and selecting the right candidates for the right job role in an
organization. It doesn’t end here, HR needs various policies and strategies to manage people
and comply with their organizational needs and requirements. The recruitment and selection or
staffing is about developing the ability of the organization to search the new talent and recruit
new employees and help an organization in improving the quality of the human capital
working in the organization. An effective recruitment process brings the best talent in
company.
1. Training and development
Another important role of human resource is providing training and development to the
employees. The right training as well as behavioral training has seen a trend in the last few
years. Organizations are ready to invest in the training of their employee to meet the technical
and behavioral requirements of the business operations. Training and skill development is a
regular need of the business as the technology is being used not only to build and operate plant
and machinery but it also very much exists and keeps changing day by day to perform any of
the official tasks.
HR Role in company is to conducts various training programs to enhance the skills and
knowledge of employees. They identify training needs design and develop training sessions.
Thus HR plays a crucial role in developing a culture of learning and development within an
organization. Training and development can take different forms such as workshops, seminars,
online courses and on-the-job-training. Thus, training programs provides an opportunity for
employees to acquire new skills and expand their knowledge.
1. Performance Management

3. HR develops and implements the performance management of an organization. Role of HR in
a company is to conduct performance evaluation of an employee and provide feedback to
employees. HR also monitors the performance of an employee who performs below
expectation and provides the employee appropriate training program and thus helps the
employees excel at their work. The process of performance management includes the
following steps:
1. Recognition and rewards
2. Goal setting
3. Performance planning
4. Ongoing communication
5. Performance evaluation
6. Feedback and coaching
7. Performance improvement
1. Compensation and benefits
The simplest meaning of compensation is to pay the worker for his work. The role of HR here
is to see that timely and fair compensation is given to the employees. It includes health
benefits, retirement plans, stock purchase plans, etc. Compensation refers to monetary rewards
such as salaries, wages, bonus and incentives whereas benefits mean the non monetary perks
and programs such as health insurance and retirement plans. The purpose of Compensation
and benefits is to attract, retain and motivate employees and to ensure fair and competitive
compensation practices within the industry. Implementing fair compensation ensures increased
job satisfaction, employee engagement and employee well-being.
1. Employment laws
Every country has its own set of labor and organizational laws that the companies need to
strictly follow. It’s the job of the HR department to see that the organization abides by these
laws. For instance, In India, there are various laws such as the factories act, mines act,
industrial employment act, etc. and as per the industry, the HR role in company is make sure
that all the compliance requirements are fulfilled as per the Govt. guidelines. Nowadays, with
increasing female workforce in the country, the government has also come up with laws to
protect them such as the equal pay act, maternity leave act, whistleblower act, etc.
Employment laws ensure fair treatment, equal opportunities and safe working conditions for
the employees.
1. Grievance Redressal
Another important role of HR is Grievance redressal, which is aimed to resolve employee
concerns and grievance or complaints in the workplace in a fair and timely manner. An
effective grievance redressal is important to maintain healthy and positive workplace
environment and enhance employee job satisfaction. Thus, when grievances are addressed

4. promptly organization can address employee concerns easily and helps in solving conflicts
from escalating. Such a process fosters employee engagement and contributes to the growth of
an organization.
Promotion means moving employees to higher positions enhancing their job responsibilities
and salary increase. Promotion is an important aspect of human resource and helps in
employee development, motivation and organizational growth. The promotion policy does not
just include seniority or higher pay, but also look at many duties and responsibilities
performed by an employee. From the HR perspective, it is the optimum utilization of a
person’s skills and abilities as well as pushing his/her limits for better work performance,
higher outputs and increased knowledge.
HR promotes an employee on the basis of his previous performance charts, organizational
behavior, leadership and other factors. The HR is also equipped with the mechanism of
demotion. It is moving down the position of employee from his current one. These can be due
to his incapability of performing a job or many a times his indecent behavior. Another HR role
in company is to design and implement a fair promotion policy and practices within the
organizations which ultimately help increasing employee motivation, employee engagement
and retention. This will also helps to reduce employee attrition rate.
1. Job rotation
Job rotation refers to shifting employees from one role to another role and responsibilities
within an organization. Job rotation helps the employees develop new skills, broaden their
knowledge and gain a broader perspective of an organization. The sole purpose of Job
Rotation Policy is to make the employee multi-skilled and giving a change to do something
extraordinary or different from the regular normal work. Sometimes such activities help
employees find their talents or work in which they are very good at and motivate them to do
the job more speedily and productively. It also expands their overall knowledge and
experience.
1. Legal Compliance
Legal compliance is adherence of individuals, organizations and businesses to laws,
regulations and standards set by governing authorities. Adhering to rules and regulations is an
important aspect of human resource. The HR department ensures that the company or
organization should follow the employment laws, safety regulations, and other legal
requirements. HR role in company is also handles matters related to employee rights, diversity
and inclusion, and workplace ethics. Failure to comply with legal requirements can result in
severe consequences, including legal penalties, fine, reputational damage, loss of business
licenses, and even criminal charges. Additionally, non-compliance can lead to employee
grievances, customer dissatisfaction, and harm to the environment or public health.
1. Organizational Development

5. Another role of HR is to manage organizational change and development in an organization.
The HR department helps to implement new strategies, technologies or changes within an
organization. Organizational development in HR role in company is to focus on enhancing
people HR practices and processes to support the organizational development efforts.
Organizational development or OD includes intervention and activities aimed at improving
organizational effectiveness. These OD interventions include strategic planning, change
management, leadership development, team building and performance management.
1. Employee Retention
Employee retention is an important aspect in an organizational success. The role of HR is to
develop and implement strategies to increase employee retention. HR department helps in
creating positive work environment fostering employee engagement and job satisfaction. The
HR role in company is to develop employee engagement programs that help in employee
retention and minimize organizational turnover. Retaining employees saves organization costs
associated with recruitment, onboarding process and training new employees. Employee
retention helps in increased productivity and increased job satisfaction and employee well-
being.
Thus, the role of HR is just not limited to become a cost minimizing or cost cutting department
for the organization. Rather it has become an investment department given the important roles to
play. These tasks highlight the multifaceted role of HR in managing the people aspects of an
organization. HR professionals play a vital role in talent acquisition, development, engagement,
compliance, and overall organizational effectiveness.
Functions of HRM
Human Resource Management (HRM) is a strategic approach to managing an organization's
employees, from recruitment to deployment and beyond. The primary functions of HRM are to
ensure that the organization runs smoothly, effectively, and efficiently. HRM plays a critical role
in enhancing employee performance and reducing attrition rates, which in turn helps the
organization achieve its goals.
HRM functions encompass a wide range of activities, including recruitment, selection, training
and development, performance management, compensation and benefits, and employee relations.
The process begins with developing appropriate job descriptions and specifications, followed by
recruiting suitable candidates, and deploying them to their respective roles. The functions of
Human Resource Management also involve managing employee relations and providing
guidance on company policies and procedures.

6. 14 Key HRM Functions used by the organization
Today's organizations are more focused on the needs of their employees than ever before, and
HRM functions help achieve these goals faster and make useful work culture and build a
profitable business. There are many functions of HRM which are highly recommended, here we
are detailing 15 most useful HRM Fuctions:
1. Formulation of HR Policies & Procedures
2. Human Resource Planning
3. Job Design
4. Recruitment and Selection
5. Employee On boarding
6. Compensation & Benefits
7. Payroll Management
8. Training and Development
9. Reward and Recognition
10. Industrial Relations
11. Employee Engagement
12. Health and Safety
13. Compliance Management
14. Succession Planning
One of the critical functions of HRM is to design and develop HR policies and procedures.
Human & Resource Management (HRM) is a vital function in any organization that deals with
the management & of the workforce. HR policies and procedures provide a framework for
managing employee behavior and performance and ensure that the organization complies with
legal and regulatory requirements. A Well-defined policy covers all the aspects of a company
and its operations. HR Policies can control activities like better participation and
communication in an organization. The Formulation of HR policies and procedures involves
several steps such as:
1. Identify the areas where policies and procedures are required
2. Research and gather information such as legal requirements, best practices in the industry, and
the organization's culture and values.
3. Draft the policies and procedures that are clear, concise, and easy to understand.
4. Communicate the policies and procedures to employees through training programs,
employee handbooks, and other communication channels.
5. Regular monitoring and evaluating the policies and procedures ensure that they are up-to-date
and effective.

7. As per Wikipedia “Human resource policies are continuing guidelines on the approach of which
an organization intends to adopt in managing its people. They represent specific guidelines to
HR managers on various matters concerning employment and state the intent of the organization
on different aspects of Human Resource management such as recruitment, promotion,
compensation, training, selections etc.”
HRM functions ensure that all the HR policies and procedures to be in place for people
management and also ensure to play a crucial role in shaping the organizational culture, ensuring
compliance with legal requirements, and creating a positive work environment within the
organization.
2.Human Resource Planning
Effective human resource planning is very important therefore Human Resource Management
functions play a crucial role in Human Resource Planning (HRP) within an organization. HRP is
the process of forecasting an organization's future demand for human resources and developing
plans to meet those needs. Human resource planning is an important function of HRM as it
allows the company to realize its goals, increase productivity and competitiveness of
enterprises. The following are the key roles of HRM Function in Human Resource Planning:
1. Gathering and analyzing information: HRM collects and analyzes information on the
organization's current and future business objectives, workforce demographics, and job
requirements.
2. Forecasting demand and supply: HRM uses the information gathered to forecast future demand
for employees in terms of quantity, quality, and skills.
3. Developing and implementing strategies: HRM develops and implements strategies for
recruitment, retention, and succession planning to meet the future demand for human
resources
4. Monitoring and evaluating outcomes: HRM monitors and evaluates the outcomes of HRP
activities, such as recruitment,training and development.
Overall, HRM plays a pivotal role in HRP by aligning human resources with the organization's
strategic goals and objectives. It ensures that the organization has the necessary workforce to
meet the demands of the future, while also fostering a positive work environment and culture.

8. 3. Job Design
Job Design is one of the important functions of Human Resource Management. HRM plays a
crucial role in job design, which involves the process of creating or redesigning jobs to ensure
that they meet the organizational objectives and employees' needs. HRM is responsible for
designing jobs that are challenging and rewarding, leading to employee satisfaction and
engagement. The following are the roles of HRM in job design:
a. Job Analysis: HRM conducts a job analysis to identify the necessary skills, knowledge, and
abilities required to perform a job effectively. HRM uses the information to create or redesign
jobs that are well-suited to employees' skills and abilities.
b. Job Enrichment: HRM designs jobs that provide opportunities for growth and development,
making employees feel valued and motivated. Job enrichment involves adding more
responsibility, autonomy, and decision-making authority to a job, creating a sense of ownership
and accomplishment.
c. Job Rotation: HRM designs jobs that allow employees to rotate from one job to another, gaining
experience and exposure to different roles and responsibilities. Job rotation helps employees to
develop new skills and knowledge and reduces boredom and monotony in their work.
d. Job Simplification: HRM simplifies complex jobs, breaking them down into smaller tasks that are
easier to perform. Job simplification reduces the cognitive load of employees, leading to
improved productivity and quality of work.
e. Job Flexibility: HRM designs jobs that offer flexibility in terms of work hours, work location, and
work arrangements. Job flexibility helps employees to balance their work and personal life,
reducing stress and burnout.
4. Recruitment and Selection
Recruitment and selection are two key functions of Human Resource Management (HRM). The
purpose of recruitment is to attract potential employees to apply for job openings within an
organization, while selection involves the process of assessing and evaluating candidates to
determine their suitability for the job.
Recruitment involves a range of activities, including identifying job vacancies, advertising job
openings, screening resumes, conducting interviews, and making job offers. The HR department
is responsible for developing recruitment strategies and sourcing channels, such as job boards,
social media, and employee referrals. They must ensure that the recruitment process is fair and
transparent, and that all applicants are considered based on their qualifications and merit.
Selection is the process of evaluating candidates based on their skills, experience, and other
relevant criteria, to determine their suitability for a particular job. It involves various stages,
including screening, interviewing, and conducting assessments, such as psychometric tests, to
determine a candidate's strengths and weaknesses. Releasing job offer letter or appointment letter
and joining confirmation are also comes in the functions of HRM. The HR department must
ensure that the selection process is objective, consistent, and based on job-related criteria.

9. Effective recruitment and selection are critical for the success of an organization. By attracting
and selecting the right candidates, organizations can improve their productivity, efficiency, and
overall performance. The HR Functions play a critical role in ensuring that the recruitment and
selection process is fair, transparent, and effective, and that the best candidates are selected for
the job.
5. Employee On boarding
It comes amongst the other critical functions of human resource management (HRM). It is the
process of integrating new employees into an organization and helping them to become
productive members of the team as quickly and efficiently as possible. A successful on boarding
program can have significant positive impacts on an organization, including increased employee
retention, improved job satisfaction, and enhanced productivity and also helps to boost positive
work environment and culture.
The HRM function of employee on boarding involves several steps.
1. HR professionals must ensure that all necessary paperwork and documentation is completed
and submitted on time. This may include employment contracts, tax forms, and benefit
enrollment forms. Additionally, new employees must be introduced to the organization's
culture, values, and policies.
2. Another important aspect of the HRM function of employee onboarding is providing new
employees with the necessary tools and resources to succeed in their new roles. This may
include access to software systems, training materials, or job-specific equipment.
3. HRM function of employee onboarding involves ongoing support and feedback. The role of HR is
to regularly check in with new employees to ensure that they are adjusting well and have
everything they need to be successful. They should also provide constructive feedback and
coaching to help new employees improve their skills and performance.
6. Compensation & Benefits
The function of compensation and benefits is an essential part of HRM functions. It is
responsible for ensuring that employees are rewarded fairly and equitably for their work, and that
their compensation and benefits packages are aligned with the organization's strategic goals and
objectives.
Compensation refers to the payment and rewards that employees receive for their work, while
benefits refer to the non-wage benefits that employees receive, such as health insurance,
retirement plans, and paid time off. Together, compensation and benefits packages form a critical
part of the overall employee value proposition, which plays a significant role in attracting,
retaining, and engaging employees.
The compensation and benefits function of HRM involves several key activities, including job
analysis, salary surveys, job evaluation, and the development of pay and benefits structures. The
function is also responsible for ensuring compliance with legal requirements and regulations

10. related to compensation and benefits, such as minimum wage laws, overtime regulations, and
benefits reporting requirements.
Overall, the function of compensation and benefits is a critical component of HRM, as it plays a
crucial role in attracting, retaining, and engaging employees, and in supporting the achievement
of organizational goals and objectives.
7. Payroll Management
Payroll management is a crucial function of human resource management (HRM). It involves the
administration of employee compensation, which includes salary, wages, bonuses, and benefits.
The primary objective of payroll management is to ensure that employees are paid accurately and
on time, in compliance with legal and regulatory requirements.
HRM oversees payroll management by designing and implementing policies and procedures that
govern employee compensation. This includes determining pay rates, calculating employee
benefits and deductions, maintaining accurate payroll records, and ensuring compliance with tax
laws and other financial regulations. Additionally, HRM is responsible for managing payroll-
related information systems, such as payroll software and databases.
Effective payroll management has several benefits for organizations. It helps to attract and retain
talented employees by offering competitive compensation packages. It also helps to maintain
employee morale and motivation by ensuring that they are paid fairly and on time. Furthermore,
payroll management can improve financial planning and budgeting by providing accurate and
timely data on labor costs.
In summary, payroll management is an important function of HRM that plays a critical role in
ensuring that employees are compensated accurately and fairly. By implementing effective
payroll management practices, organizations can improve their financial performance, attract and
retain talented employees, and maintain a motivated and productive workforce.
Training and development is again one of the most essential functions of HRM that aims to
enhance the skills, knowledge, and abilities of employees. It involves providing learning
opportunities that align with the organization's objectives and individual employees' career goals.
The primary goal of training and development is to improve the performance and productivity of
employees, ultimately benefiting the organization.
HRM plays a critical role in conducting training need analysis to identifying and assessing
employee development needs, designing and delivering training programs, and evaluating the
effectiveness of training initiatives. This process involves identifying the skills gaps, analyzing
training needs, and creating development plans and choosing right training methods to bridge
those gaps.

11. Training and development programs can take various forms, including on-the-job training,
coaching, mentoring, classroom training, e-learning, workshops, and seminars. HRM must
ensure that the training programs are well-designed, engaging, and effective in achieving the
desired outcomes. Effective training and development programs can lead to several benefits for
the organization and employees, such as improved job satisfaction, employee retention, increased
productivity, and better customer service. It can also lead to a more skilled and adaptable
workforce, which is essential in a rapidly changing business environment.
In short, training and development is an integral function of HRM that helps organizations
enhance the skills, knowledge, and abilities of employees to achieve their objectives. Effective
training and development programs can lead to a more productive, engaged, and adaptable
workforce, ultimately benefiting the organization's bottom line.
9. Performance Management
Performance management is one the critical but much needed HRM functions. It involves the
process of assessing and improving employee productivity, effectiveness, and overall
contribution to the organization's goals. The primary goal of performance management is to
ensure that employees are working to their fullest potential and contributing to the success of the
organization.
Effective performance management involves a systematic and objective approach for
performance appraisal to measure and evaluate employee performance. This includes
establishing clear performance standards, providing regular feedback on performance, and
setting goals and objectives that are aligned with the organization's strategic objectives.
Performance management also involves providing employees with opportunities for
development and growth, such as training and career development programs. This helps to
motivate and engage employees, as well as enhance their skills and competencies.
Overall, performance management function in HRM help organizations to optimize their human
capital by ensuring that employees are working to their full potential and contributing to the
organization's success.
10. Reward and Recognition
Recognition and rewards are critical tools that help organizations achieve their goals and
objectives by motivating and retaining employees thus become one of most useful HRM
functions. Recognition refers to acknowledging and appreciating an employee's performance,
while reward refers to offering something of value to an employee in return for their efforts.
Reward and Recognition programs play a vital role in creating a positive work culture,
increasing employee engagement, and improving performance. There are various forms of
recognition and reward that an organization can offer to its employees. Some examples include
bonuses, promotions, salary increases, flexible work schedules, paid time off, and employee
recognition programs. The type of recognition and reward program implemented by an

12. organization depends on its budget, culture, and employee needs. When employees are
recognized and rewarded for their hard work, they feel valued, appreciated, and motivated to
perform better. This, in turn, leads to higher productivity, better quality of work, and increased
job satisfaction.
As per Wikipedia “Employee recognition is the timely, informal or formal acknowledgement of
a person's behavior, effort, or business result that supports the organization's goals and values,
and exceeds their superior's normal expectations”
Implementing a reward and recognition policy is crucial and important functions of HRM that
requires planning, communication, and measurement. HR managers must identify the behaviors
and outcomes that warrant recognition and reward, communicate the about the various kind of
incentives program to employees, and regularly evaluate its effectiveness.
11.Employee Engagement
Creating a positive work environment and fostering a culture of loyalty, commitment, and
productivity among employees is a fundamental functions of Human Resource
Management. The aim of employee engagement function is to develop an emotional connect of
employees towards their work, organization, and colleagues.
HRM is responsible for developing strategies and implementing practices within the organization
that promote employee engagement, such as offering career growth opportunities, providing a
fair and competitive compensation package, recognizing and rewarding employees for their
contributions, and also developing a supportive and inclusive work culture. Taking an effective
employee engagement initiatives is considered to be an important task of HRM functions which
can lead to increased job satisfaction, improved employee morale, and reduced employee
turnover rates. Engaged employees are also more likely to be committed to the company's vision
and goals, resulting in higher productivity, improved customer service, and ultimately, increased
profitability for the organization.
Therefore, HRM must prioritize employee engagement to create a healthy work environment that
fosters growth, collaboration, and success for both the employees and the organization.
12. Industrial Relation
Managing industrial relations within an organization is very critical and Human Resource
Management Department plays a vital role in this. HRM functions are just not limited to
managing the relationship between the organization and its employees, but it is also responsible
for managing the relationship between different employee groups.
One of the main roles of HRM in industrial relations is to create and maintain a positive and
healty work environment. This includes promoting communication and collaboration between
management and employees, as well as addressing any conflicts that arise. HRM also contributes
in managing employee grievances and ensuring that the organization adheres to labor laws and
regulations.

13. Developing and implementing policies and procedures that govern employee behavior and
conduct is also a part of HRM functions. This can include policies related to workplace safety,
performance management, and disciplinary procedures. By promoting positive relationships
between management and employees, managing conflicts, and ensuring compliance with labor
laws and regulations, all the functions of HRM ultimately help to create a workplace that is
productive, positive, and supportive for all employees.
Overall, the role of HRM in industrial relations is critical to ensure that an organization operates
smoothly and efficiently.
13. Health & Safety
Human Resource Management (HRM) plays a critical role in ensuring health and safety in an
organization. HRM is responsible for implementing policies and procedures that promote
workplace safety and reduce the risk of accidents and injuries.
HRM can support health and safety initiatives by developing and implementing safety training
programs for employees, ensuring that safety protocols are communicated effectively and
enforced, and conducting regular safety inspections and risk assessments to identify potential
hazards.
HRM can also facilitate the reporting of incidents and accidents and ensure that they are
investigated thoroughly and promptly. They can work with management to address any safety
concerns and take appropriate measures to prevent future incidents.
Additionally, HRM can collaborate with external organizations, such as health and safety
regulators, to ensure compliance with applicable laws and regulations. They can also stay up-to-
date with industry trends and best practices to continuously improve the organization's health and
safety programs.
Overall, HRM plays a critical role in promoting and maintaining a safe and healthy work
environment, which is essential for the mental health and well-being of employees so that it leads
to the success of the organization
14. Compliance Management
Compliance management involves ensuring that an organization's policies and procedures align
with regulatory requirements and industry standards. Compliance management is a procedure of
formulating labour laws, data protection, workplace safety, and anti-discrimination policies and
variety of other factors. It is a crucial and ongoing process of monitoring and evaluating systems
to make sure they comply with corporate and regulatory rules and operating legally and ethically.
HR managers must stay up-to-date with changing laws and regulations to ensure that the
organization's policies remain compliant. HRM Function for compliance management is required
to manage various types of compliance such as:

14.  Statutory compliance
 Regulatory compliance
 Contractual compliance
 Union law compliance
 HR technology compliance
The HR managers must also conduct audits and assessments to identify areas of non-compliance
and take corrective action. This may involve investigating and addressing complaints, ensuring
that the organization's hiring and promotion policy and processes are fair, and ensuring that the
workplace is safe and free from harassment or discrimination. By ensuring compliance, HR
managers can help prevent legal and reputational risks, and maintain a positive workplace culture
that supports employee well-being and productivity.
15. Succession Planning
Succession planning is the process of identifying and developing internal employees who have
the potential to fill key leadership positions within an organization. The functions of Human
Resource Management ensure that the succession planning must be in place and the organization
must have a pipeline of talented employees who can step into leadership roles when the need
arises.
It is an important function of HRM and play a realistic role in identifying key positions in the
organization that require succession planning. This involves analyzing the skills, competencies,
and qualifications required for each position, and identifying the employees who have the
potential to fill these positions in the future. HRM also helps to create development plans for
these employees, which may include coaching, mentoring, training, and job rotations, to prepare
them for future leadership roles.
As per Wikipedia “Succession planning is a process and strategy for replacement planning or
passing on leadership roles. It is used to identify and develop new, potential leaders who can
move into leadership roles when they become vacant. Succession planning in dictatorships,
monarchies, politics, and international relations is used to ensure continuity and prevention of
power struggle.
HRM functions also ensure that the succession planning process is integrated into the overall
talent management strategy of the organization. This involves creating a culture of talent
development, where employees are encouraged to learn, grow, and develop their skills to their
fullest potential.
Overall, HRM plays a critical role in ensuring the long-term success of the organization through
effective succession planning. By identifying and developing internal talent, the organization can
ensure that it has a strong leadership pipeline, which is essential for sustainable growth and
success.

15. To conclude, all the functions of HRM are essential an play critical and important role in the
expansion and overall development of an organization. HRM functions ensure that an
organization's workforce is properly trained, motivated, and compensated well.
Chapter 1
The purpose of this chapter is to explain what human resource management is, and why it's
important to all managers. We’ll see that human resource management activities such as hiring,
training, appraising, compensating, and developing employees are part of every manager’s job.
And we’ll see that human resource management is also a separate function, usually with its own
human resource or “HR ”manager. The main topics we'll cover include the meaning of human
resource management; why human resource management is important to all managers, global
and competitive trends, human resource management trends, and the plan of this book. The
framework above (which introduces each chapter) makes this point: That to formulate and apply
HR practice like testing and training you should understand the strategic and legal context in
which you’re managing.
Furthermore, This chapter explains how to design and develop an HR system that supports the
company’s strategic goals. We cover the strategic management process and how to develop a
strategic plan. We also discuss the HR manager’s role in the process of strategy execution and
formulation. Finally, we explain why metrics are essential for identifying and creating high-
performance human resource policies
At the conclusion of this chapter, you will be able to:
1. Explain why strategic planning is important to all managers.
2. Explain with examples each of the seven steps in the strategic planning process.
3. List with examples the main generic types of corporate strategies and
competitive strategies.
4. Define strategic human resource management and give an example of strategic
human resource management in practice.
5. Briefly describe three important strategic human resource management tools.
6. Explain with examples
LEARNING OBJECTIVES
After studying this chapter, you will be able to:
1. Explain what human resource management is and how it relates to the
management process.
2. Show with examples why human resource management is important to all
managers.
3. Illustrate the human resources responsibilities of line and staff managers.
4. After studying this chapter, you will be able to:
5. Briefly discuss and illustrate each of the important trends influencing human
resource management.

16. 6. List and briefly describe important traits of today’s human resource managers
7. Define and give an example of evidence-based human resource management.
8. Outline the plan of this book
Working for any organization means that you and those around you share common goals among
which include an interest in the growth and continuing development of the organization. Some of
those common goals include how work is accomplished within the organization.
We now begin our study of the elements of the management process and how they relate to
human resource management.
Organizations have been described in various ways. We will focus our early efforts on
understanding an organization as groups of individuals with formally assigned roles. Note that
such individuals generally work together to achieve the common goals of an organization.
Human Resource Management :- is the process of acquiring , training , appraising , and
compensating employees, and attending to their labor relations, health and safety ,and fairness
concerns .
Understanding the five elements of what managers do (planning, organizing, staffing, leading,
and controlling) will assist you in your career. For example, no matter what your job, planning
involves establishing goals, rules and procedures and attempting to forecast the future. Planning
will enhance your ability to manage people and functions.
For our purposes, we will focus our efforts on basic staffing functions. These
include:
• Acquiring talented employees
• Training new hires and existing managers and employees
• Creating and administering effective performance appraisals
• Properly compensating employees.
• Attending to concerns about labor relations, health, safety, and fairness.
The HR function is primarily concerned with the “staffing” component of the five
management processes, namely, planning, organizing, staffing, leading, and controlling.
The key elements of staffing include:
.Job analysis
• Planning labor needs
• Recruiting
• Orienting and training new employees
• Compensation

17. • Incentives and benefits
Performance appraisal
• Communicating
• Training and development, and
• Employee commitment.
In addition, HR is responsible for compliance with federal, state and local laws, safety,
and handling grievances and labor relations
Line and staff managers focus their energies in different yet related and complementary
ways. Let’s talk about the two types of managers and what each does for the firm.
If you are a line manager, you will hold responsibilities to issue orders, provide directions and
establish rules and procedures. For example, as a sales manager, you will be responsible for
requiring adherence to your rules relative to sales quotas and goals.
On the other hand, an HR manager is a staff manager and, like all staff managers, is responsible
for influencing and advising others. Within the HR department you may be responsible for
establishing goals and giving orders to those in your department thus serving as a line manager
within HR. Your principal duty to the organization as a whole, however, is that of a staff
function, much the same as a purchasing department. Staff departments may include finance,
accounting, and logistics. Sales, production, and operations departments generally are considered
line functions.
you are a line manager, your duties and responsibilities concern, how well you can successfully
orient and integrate new hires into your unit, maintain their health and safety, supervise and
motivate them, and effectively manage department Cost.
Line managers require support to perform their jobs properly. If you are a line manager, you will
have the help of the people in your HR department. HR professionals ensure adherence to
company policies, provide training, advice on motivating your employees, and other support as
needed. In the continuing development of human resource management, there exist various
trends that will help shape its practice and evolution in the coming years. Human Resource
responsibilities have become broader and more strategic over time in response to a number of
trends. The role of HR has evolved from primarily being responsible for hiring, firing, payroll,
and benefits administration to one that is more strategic.
Many trends are emerging and will continue to change the shape, size, and function of
HR management. Some of these trends we will discuss shortly include:
• Globalization
• Competition
*Increased indebtedness
• Technological innovation
• More high-tech & service jobs

18. In addition, we will discuss other trends such as:
• More knowledge works
• Aging workforce
• Economic downturn
• Slower economic growth
Globalization refers to the tendency of firms to extend their sales, ownership, and/or
manufacturing to new markets abroad. Dell, for example, is planning to supply PCs to
China. China is expected to become the largest market for computers in the world.
Companies such as Toyota, BMW, and Honda build and sell some of their vehicles here
in the U.S. and even ship them to other countries from the US
he reasons for going global are many including: reaching new markets, selling more products or
services, lower labor costs, forming partnerships, and becoming more competitive.
The impact and growth in the use of smart phones and tablet computers, such as the iPad, have
opened doors to people and the workplace in a way that previously has never occurred. The
speed of information exchange has contributed to the growth of social networking sites such as
Facebook and LinkedIn. Facebook, for example, offers Facebook recruiting which provides a
rapid channel between employers and job-seekers.
As you enter the workforce or continue in your jobs, you are more likely to enter commands into
a computer than perform dangerous physical labor. The “brawn to brains” changes have been
fueled by moving manufacturing jobs to low-wage countries. Just-in-time (JIT) manufacturing
processes have connected the customer with the manufacturer and the distributor in real time
resulting in more precise scheduling, production and delivery.
Another trend, human capital, refers to the knowledge, education, training, skills, and expertise
of a firm’s workers. Today’s (and tomorrow’s) best jobs will go to the individuals with the best
reading, math, and communication skills. In other words, the best knowledge workers will be
hired first.
Trends such as the ones just discussed will have an impact on employees and how they are
managed. The New Human Resource Managers require the new knowledge and skills and must
demonstrate expected results for the future.
If you had been working as an HR professional after World War II, your duties would have been
significantly different than they are today. Early in the HR profession, most work was
transactional in nature and involved such things as payroll and benefits administration and hiring
and firing. Today, however, the scope of responsibilities.
is vastly different. New responsibilities include finding new ways to get the job done. Getting the
job done may include outsourcing routine functions including payroll and benefits or installing
the company’s own internal social networking sites. In addition, the new HR managers take an
integrated “talent management” approach to managing HR. Managing talent now includes

19. managing ethics, employee engagement, adding value, having more and varied core
competencies, and measuring HR performance and results.
You may wish to consider what ethics are. Are ethical considerations different for
different people? In what ways should HR be involved in managing ethics?
Talent management is both a goal-oriented and integrated process of planning, recruiting,
developing, managing, and compensating employees. HR managers also manage ethics, the
standards by which individuals judge their own behaviors. Engagement is the extent to which
employees are emotionally and mentally devoted in their work.
Measurement of the impact of human resource practices on the profitability and growth of an
organization can make a significant difference in productivity. For example, knowing that a
company is able to recruit and hire productive employees 50% faster than its competitors can
make a significant difference in efficiency. Using evidence- based HR practices in addition to
actual measurements such as existing data or outside research will help keep HR an effective
strategic planning partner. In both the long and the short run, HR managers must function as
business partners, factors of an effective organizational culture, a business supporter and
strategic partner. As the profession of HR continues to change, new competencies will be added
to the list.
In review, you should now be able to:
1. Explain what human resource management is and how it relates to the
management process.
2. Show with examples why human resource management is important to all
managers.
3. Illustrate the human resources responsibilities of line and staff (HR) managers.
4. Briefly discuss and illustrate each of the important trends influencing human
resource management.
5. List and briefly describe important traits of today’s human resource managers.
6. Define and give an example of evidence-based human resource management
The Human Resource function today continues to play an increasingly visible role in the
strategic planning and management process. The HR function requires a new level of skill and
competency among HR professionals. HR managers must develop measurable strategies that
influentially showcase the impact of HR on business performance. Successful Human Resource
managers have adopted a Perspective that focuses on how their departments can play a central
role in implementing strategy.
Strategic planning is important because in a well-run organization the goals come from the top of
the organization downward. The process forms a hierarchy of goals. These goals, in turn, should
guide everyone in the organization in what they do. A strategic plan is the company’s plan for
how it will match its internal

20. strengths and weaknesses with external opportunities and threats. A successful strategic plan
helps ensure a competitive advantage hierarchy of goals. These goals, in turn, should guide
everyone in the organization in what they do. A strategic plan is the company’s plan for how it
will match its internal strengths and weaknesses with external opportunities and threats. A
successful strategic plan helps ensure a competitive advantage.
The seven steps in the strategic planning process allow you to manage the process in a
systematic manner. Let’s discuss them now.
1. Define the current business and mission
The logical place to start is by defining one’s current business. What products do
we sell and where? How do our products or services differ from our competitors?
2. Perform external and internal audits
The next step is to ask, “Are we heading in the right direction?”
Formulate a new direction
The question now is, what should our new business be? Translate the mission
into goals.
Next, translate the mission into strategic objectives.
3. Formulate strategies to achieve the strategic goal
Next, the manager chooses courses of action that will enable the company to
achieve its strategic goals.
4. Implement the strategy
Strategy execution means translating the strategies into action and trying them
out.
5. Evaluate performance
Things don’t always turn out as planned. At this point, the strategies are tested
against reality. If changes are needed, the entire process may be repeated from
an earlier step.
In practice, managers formulate three strategies. There is corporate-wide strategic planning,
business unit (or competitive) strategic planning, and functional (or departmental) strategic
planning. We’ll look at each.
Corporate-level strategy identifies the portfolio of businesses that comprise the company and the
ways in which these businesses are related to each other. Managers try to achieve competitive
advantages for each of their businesses. Competitive advantages enable a company to
differentiate its product or service from those of its competitors. Such differentiation allows a
company to increase its market share.

21. Important Traits /Characteristics of new/Today's HR
manager
Sympathetic Attitude
A good personnel manager must have a humane approach to human resource problems.
Regardless of the problems faced by the employees, he must have a sympathetic attitude while
dealing with them.
Quick Decisions
He should display the ability to make quick decisions. Let’s assume that there is a conflict
between a superior and an employee in the organization. When the HR manager tries to mediate
and put an end to the conflict, he might have to make some quick decisions. He should be
mentally alert and therefore not get caught unawares.
Integrity
Being the head of the personnel or human resource department, an HR manager should display
integrity. Honesty and frankness are the hallmarks of a good human resource manager. At no
time can the employees doubt the integrity of the personnel manager.
Patience
He should be extremely patient and not someone who loses his temper easily. While dealing with
employees, it is important to be a good listener, especially when an employee is voicing his
concerns. And good listening skills require a lot of patience.
Formal Authority
He should depend on his formal authority alone. In fact, an effective HR manager earns his
informal authority of influencing people through his interpersonal skills.
Leadership
Good leadership skills are essential to guide the employees towards achieving the organization’s
objectives. He should also keep people motivated and encourage them to use their skills for the
overall good of the enterprise.

22. Social Responsibility
He should have a sense of social responsibility. Further, he must encourage employees to
discharge their social obligations to different segments of society. After all, a good human
resource manager isn’t only about the organization. He also needs to look at the broader human
resource element.
Good Communication Skills
Another essential quality of a human resource manager is that he must possess good
communication skills. In fact, since a major part of his role involves interacting with employees,
unions, and management, being a good communicator is a must.
 Industry awareness
 Technical awareness
 Relevant Experience
Four Important Competences of HR Manager
1. Communication
In any work place or mission-oriented environment, communication is key to successful
influence and execution. An HR manager must be able to communicate at all levels of an
organization, from the top executive to the lowest HR Admin. They must be able to interact
effectively with outsourcing providers, union leaders, public officials, prospective employees,
and colleagues alike. A strategic HR Professional knows how and when to adapt their
communication skills to the audience and the situation. For example, HR managers must be able
to convey the importance of fair employment practices to the company's executive team with the
same genuineness and passion as they would to hourly employees.
2. Analytical and Critical Thinking
Successful business operations are based on the evaluation and strategic execution solely based
on factual data. Inputs, Outputs, consistencies, variables, P&Ls, attrition, retention, etc. When it
comes to the management of human capital, market trends, and unemployment ratios, an HR
manager has to be able to exercise sound judgment and engage in high-impact decision-making.
The ability to analyze situations and data and view the implications of certain decisions from a
critical and strategic perspective is particularly useful for strategic HR leaders. For example, the
decision whether to outsource one or several HR functions isn't something that happens without
considering the impact outsourcing has on individual employees as well as the organization
overall. HR managers also are involved in representing the company in matters involving

23. employment litigation, which requires that they be able to justify the company's actions related to
employment decisions such as hiring and firing.
3. Relationship-Building
Creating a cohesive HR department that works collaboratively to achieve the goals of the
department as well as help the organization reach its goals related to workforce development is a
competency that HR managers must have. Relationship-building and interpersonal relationship
skills are fundamental to an HR manager's success. One of the challenges HR faces is
establishing credibility with employees, many see HR as more of a high school principal, which
suggests a level of intimidation and trepidation associated with their view of HR's purpose. That
being said, an HR manager must have the ability to establish credibility and trust as well as
balance the obligation to be an advocate for both the organization and its employees. An HR
Professional who has mastered the art of building rapport is able to befriend employees and
managers and in return gain insight on the happenings within the working force of the
organization.
4. Leadership
Leadership skills are an essential competency for any business leader and manager, for HR
managers it is no different. HR managers are responsible for creating strategic plans for the HR
department as well as the overall workforce. Therefore, leadership skills are critical, particularly
in the process of justifying the functional elements of a strategic plan to the company's
management team. In addition, HR managers have to direct the activities of the HR department,
and in doing so, they need the type of leadership skills that influence HR generalists' and HR
specialists' commitment to the HR department goals. Do not be misled, leadership is the art of
influencing and encouraging others to follow and execute on a grand vision that leads to overall
success. As organizational change agents, effective leadership ability is imperative to being an
effective HR Leader.
These are just four competencies that make up a good HR professional. Consider them as a
foundation that allows an individual to stretch and build upon. Of course there are many other
competencies and traits that make up an effective HR professional and leader, so do not limit
yourself to the corner stones of effective management.
Important Trends that influencing Human resources:
1. Globalization and its implications
The rise of multinational corporations places new requirements on human resource managers.
The HR department needs to ensure that the appropriate mix of employees in terms of
knowledge, skills and cultural adaptability is available to handle global assignments.In order to
meet this goal, the organizations must train individuals to meet the challenges of globalization.

24. The employees must have working knowledge of the language and culture ( in terms of values,
morals, customs and laws) of the host country.
2. Workforce Diversity
In the past HRM was considerably simpler because our work force was strikingly homogeneous.
Today’s work force comprises of people of different gender, age, social class sexual orientation,
values, personality characteristics, ethnicity, religion, education, language, physical appearance,
martial status, lifestyle, beliefs, ideologies and background characteristics such as geographic
origin, tenure with the organization, and economic status and the list could go on. Diversity is
critically linked to the organization’s strategic direction. Where diversity flourishes, the potential
benefits from better creativity and decision making and greater innovation can be accrued to help
increase organization’s competitiveness. One means of achieving that is through the
organization’s benefits package. This includes HRM offerings that fall under the heading of the
family friendly organization. A family friendly organization is one that has flexible work
schedules and provides such employee benefits such as child care. In addition to the diversity
brought by gender and nationality, HRM must be aware of the age differences that exist in
today’s work force. HRM must train people of different age groups to effectively mange and to
deal with each other and to respect the diversity of views that each offers. In situations like these
a participative approach seems to work better.
. Changing skill requirements
Recruiting and developing skilled labor is important for any company concerned about
competitiveness, productivity, quality and managing a diverse work force effectively.
Skill deficiencies translate into significant losses for the organization in terms of poor-quality
work and lower productivity, increase in employee accidents and customer complaints. Since a
growing number of jobs will require more education and higher levels of language than current
ones , HRM practitioners and specialists will have to communicate this to educators and
community leaders etc. Strategic human resource planning will have to carefully weigh the skill
deficiencies and shortages. HRM department will have to devise suitable training and short term
programmes to bridge the skill gaps & deficiencies.
4. Corporate downsizing
Whenever an organization attempts to delayer, it is attempting to create greater efficiency. The
premise of downsizing is to reduce the number of workers employed by the organization. HRM
department has a very important role to play in downsizing. HRM people must ensure that proper
communication must take place during this time. They must minimize the negative effects of
rumors and ensure that individuals are kept informed with factual data. HRM must also deal with
actual layoff. HRM dept is key to the downsizing discussions that have to take place.
5. Continuous improvement programs
Continuous improvement programs focus on the long term well being of the organization. It is a
process whereby an organization focuses on quality and builds a better foundation to serve its

25. customers. This often involves a company wide initiative to improve quality and productivity.
The company changes its operations to focus on the customer and to involve workers in matters
affecting them. Companies strive to improve everything that they do, from hiring quality people,
to administrative paper processing, to meeting customer needs.
Role or Function of modern HR
Talent Acquisition and Retention
Every organization needs people. The talent acquisition and retention role of HR is the
mechanism that organizations use to recruit and keep good talent. HR performs tasks such as
job analysis which entails understanding the skills and characteristics needed for each role. They
then design the job around those skill sets and begin the process of recruiting. Understanding
the labor needs of the organization also requires HR to conduct a personnel plan which
communicates how many current and future employees are needed. If there are more jobs
required in the future, HR creates a recruitment plan to fill those needs. If the organization
projects a surplus in labor, they have several options. This means they could need to lay workers
off, or redesign jobs to retain employees. These tasks are important in attracting talent to the
organization. They are the logistical execution of the talent acquisition role of HR. However,
more important to the success of talent acquisition is corporate culture. A culture where
employees find fulfillment and engagement will attract the right talent, and improve the retention
numbers. For this reason, may suggest that HR is a builder and protector of culture. In the
search process they have the duel task of attracting talented employees, but also finding people
who are a positive contribution to the company’s culture.
Employee Engagement
Employee engagement is the task of getting the most out of employees. This means that the
organization has to find ways to motivate their team in an attempt to improve employee’s
feelings and emotional connection to the organization.HR understands that by focusing on
engagement, productivity and culture will improve.There are several tactics that HR can use to
engagement employees. HR should leverage the executive leadership team to take an active role
in investing their time and resources in employees. This means being visible, transparent,
available, and charismatic. Many organizations get their culture from the personal identity of the
leader. Most notably the entrepreneurial spirit of Elon Musk or the commitment to the
environment demonstrated by Patagonia founder Yvon Chouinard. HR plays a role in training
managers how they can engage their employees as well. HR can most easily facilitate
engagement through a series of organizational activities such as team building exercises, retreats,
corporate competitions, and charitable events. Finally, HR should take measures to measure
employee engagement so that they can see the effectiveness of their efforts.
Learning and Development
Learning and development is the element of HR that focuses on the skill improvement of
organizational members.This can entail acquiring knowledge or improving a skillset.Training
focuses on the short-term application of new skills, knowledge, attitudes or perspective. This

26. translates into more immediate, short term performance improvement. Development is focused
on the long-term career orientation of the individual. This involves broadening and deepening
knowledge and skills as it aligns with the career aspirations of the individual. Education is a
more formal component of learning and development as it allows members of organizations to
acquire degrees and certificates that allow them to advance in the organization.
Total rewards
The function of HR as it relates to total rewards is to design compensation packages that provide
comprehensive security and benefits to employees. Salary and wages are the most reviewed and
scrutinized by employees and organizations alike. HR departments regularly report their salaries
to agencies that collect this information for the benefit of the industry. HR departments then use
the collective information provided by the agency to garner an understanding of competitive
wages and salaries. In addition to salary and wages, organizations pay a long list of benefits in
most cases. Bonuses are designed to align the interests of the organization with those of the
individual. Its important to note that some bonuses are paid out as a calculated sum of the
employee’s efforts, such as sales volume * commission %. Other bonuses are considered “black
box” bonuses whereby there is not an agreed upon commission rate, but rather the managers
decide based on a balanced scorecard and intuition. Many companies are going towards this
model because they can incentivize cultural elements as well as performance factors. For
example, a salesman who reaches outstanding volume but is hated by everyone in the office
serves as a detriment to culture.
HR structuring
Like any department or unity within an organization, the HR function must spend time
organizing its own resources and managing the efficiency of its own performance. For this
reason, one of the HR functions is self-management. In practice this means that HR must decide
which types of HR specialists they should employ and which HR generalists fit the
organizational needs. HR specialists navigate a specific role within HR. For example, some
specialists focus on training and development, others analyze compensation, some manage the
benefits packages of employees, while others might negotiate with labor unions and ensure
compliance with government labor regulations. HR structuring also entails deciding which
elements of HR can (or should) be handled internally, and which functions can be
outsourced. Essentially, this function of HR translates into dedicated time to ensure HR is
working properly and managing itself as an entity which aligns with corporate strategy and
values.

27. Organizational Effectiveness and Development
Organizational effectiveness and development is an intentional approach to intervening with the
workforce to enhance performance. This may include team performance, individual employee
development or overall operational excellence. This function of HR focuses on the policies,
practices, culture, and structure of the organization in a way that enhances commitment and
performance. An example of the organizational effectiveness and development role of HR is
the decision to allow sales team members to work from home and reside in their sales territory
while simultaneously allowing them more autonomy around their work – making personal work
hour decisions, expanding sales authorities, and travel expenses. HR would be critical in this
situation to analyzing and understanding what such a decision would do to the output of these
field employees. Organizational effectiveness also is an opportunity to review the decision
rights, authorities, and reporting mechanisms of employees in a way that motivates employees to
do well.
Workforce Management
Workforce management is the logistical components of HR that allows them to forecast and plan
for staffing needs.This entails projecting labor needs, creating budgets, and scheduling hourly
earners for shifts or locations. This function is also serves as the interactive arm of HR as it
conducts payroll, time and attendance, performance management systems, compliance,
administration of benefits, and vacation and sick day tracking. By housing the administrative
function of the organization in one location, organizations can realize economies of scale, lower
operational costs, and an increased learning curve by the HR function as it specializes in these
tasks.
Employee Relations
The basic premise behind employee relations as a function of HR is to serve as the intermediary
between the organization and the employees of the organization.The goal is to maintain a
positive relationship between the workforce and management. This is achieved in several
ways. First, the HR department focuses on policies the promote fairness in the work place. This
includes compensation practices and precedent from disciplinary action. Second, HR serves in
an advisory role to managers as questions arise about benefits, work-life balance, and
scheduling. Within employee relations, the HR department handles disputes between labor and
management. For example, this may include disputes that arise out of poor performance,
workplace behavior, or sexual harassment.
Technology and Data
The HR department now has access to a wide variety of technologies, data, and digital tools to
help them enhance employee performance. This includes how employees communicate with
each other, store files or records, monitor performance, and equip employees in their specific
roles. For example, HR uses candidate tracking systems to manage the larger number of
applicants for open positions. This allows them to categorize, quickly review, and process
candidates as they go through the hiring process. Training and development can focus on the

28. digital resources such as video and audio that engage the employee in ways they are used to
learning. Performance tracking metrics in call centers for example show employees how
efficient they are with their calls, and how effective they are at resolving issues. These sorts of
technologies can tell the organization which tasks employees are performing well and where the
gaps are. By understanding performance through enhanced tracking, HR departments can
allocate resources to address these issues.
Global Contextualization
Whether an organization is international or not, the HR department will need to address the
increasing influence of globalization on its organization. Domestic organizations can source
labor using immigrant labor with work authorization in the domestic company. International
organizations will need to understand the labor laws of foreign countries to ensure
compliance. HR serves as an even more critical role for employees who serve as international
expatriates (living and working abroad, but employed by the home country). The HR department
will create a transition plan for moving abroad, and arrange needed services such as housing,
schooling, transportation, personal security. In most cases, the HR department will provide
cultural training or language training for the employee and family and do the taxes for the
employee in situations where being an expatriate complicates the tax situation of the employee.
Diversity Management
HR departments promote diversity (different types of people) and inclusion (everyone having a
voice). This is the result of intentional recruiting efforts and promoting of cultural and personal
values of employees. Most diversity management programs focus on categorical differences in
employees such as race, ethnicity, gender, and sexual orientation. However, more effective HR
managers also focus on diversity of thought. They look for people from different backgrounds
within these categories because unique backgrounds means unique thinking. Research suggests
that focusing on the simple categories of race, ethnicity, gender and sexual orientation has a
marginal benefit to the performance of the organization. Diversity of thought yields much more
substantial payback. Having employees from small towns and big cities, Midwest and Northeast,
large state schools and small private institution, born and raised in the local area and outside the
state, industry experience in the organization’s industry and competing or complimentary
industries, introverts and extroverts, diverse personal interests and collective ideals, and the list
goes on. Ultimately the role of the HR department is to manage the performance of employees,
and encouraging diversity is a means to do that.

29. Risk Management
HR plays a unique role in identifying risks and formulating strategies to mitigate them. They
focus not on the risks of the business per (like market volatility and systematic risks), but rather
they focus on the risks that could impede the safety or performance of employees. This could
entail risks around poor management practices, employee behaviors which are inappropriate, or
risks around hiring and losing employees. Within the realm of compliance, HR needs to stay
current with legal news which they typically do through industry agencies such as SHRM or
conferences they attend. Within the talent acquisition realm, HR can minimize risks by building
a sustainable recruiting program, and revamping the onboarding process. Mitigation measures
for organizational leadership means holding managers accountable where appropriate and
training managers as they begin to supervise employees. In the operational realm, HR managers
can implement emergency drills for fire, tornado, hurricanes, earthquake, and active shooter.
Corporate Social Responsibility (CSR)
Organizations that are committed to corporate social responsibility consider the impact of their
decisions on all stakeholders – customers, shareholders, communities, management, the
environment, shareholders, and yes, employees. CSR is a commitment to both profitability, but
also being a good global citizen. HR plays a key role in engaging the CSR efforts of
employees. They achieve this by involving employees in decision making processes, pushing
for CSR to be a part of the brand of the company, coordinating manager training with elements
of CSR initiatives, and most of all promoting an authentic culture of CSR.
HRM Practices That enhance Competitive Advantage
1. Employment security: A guarantee of employment stating that no employee will be laid off for
lack of work; provides a signal to the employees of long-term commitment by the organization to
the workforce. This practice generates employee loyalty, commitment, and a willingness to
expend extra effort for the organization’s benefit.
2. Selectivity in recruiting: Carefully selecting the right employees in the right way. On average,
a highly qualified employee produces twice as much as a poorly qualifi ed one. Moreover, by
being selective in its recruitment practices, the organization sends the message to applicants that
they are joining an elite organization that has high expectations regarding employee
performance.
3. High wages: Wages that are higher than that required by the market (i.e., higher than that paid
by competitors). High wages tend to attract better-qualified applicants, make turnover less likely,
and send a message that the fi rm values its employees.
4. Incentive pay: Allowing employees who are responsible for enhanced levels of performance
and profitability to share in the benefits. Employees consider such a practice to be fair and just. If

30. all the gains generated from the employees’ ingenuity and efforts go to top management, people
will view the situation as unfair, become discouraged, and abandon their efforts.
5. Employee ownership: Giving the employees ownership interests in the organization by
providing them with such things as shares of company stock and profi t- sharing programs.
Employee ownership, if properly implemented, can align the interests of employees with those of
other shareholders. Such employees will likely take a long-term view of the organization, its
strategy, and its investment policies.
6. Information sharing: Providing employees with information about operations, productivity,
and profit-ability. Information sharing provides an informed basis for employees to appreciate
how their own interests and those of the company are related, and thus provides them with the
information they need in order to do what is required for success.
7. Participation and empowerment:
Encouraging the decentralization of decision making and broader worker participation and
empowerment in controlling their own work process. Organizations should move from a system
of hierarchical control and coordination of activity to one in which lower-level employees are
permitted to do things to enhance performance. increases both employee satisfaction and
productivity.
8. Teams and job redesign: The use of interdisciplinary teams that coordinate and monitor their
own work. Teams exert a powerful influence on individuals by setting norms regarding
appropriate work quantity and quality. Positive results from group influences are more likely
when there are rewards for group efforts, when groups have some autonomy and control over the
work environment, and when groups are taken seriously by the organization.
9. Training and skill development: Providing workers with the skills necessary to do their jobs.
Training not only ensures that employees and managers can perform their jobs competently, but
it also demonstrates the fi rm’s commitment to its employees.
10. Cross-utilization and cross-training: Train
people to perform several different tasks. Having people do several jobs can make work more
interesting and provide management with greater flexibility in scheduling work. For instance, it
can replace an absent worker with one who has been trained to perform those duties.
11. Symbolic egalitarianism: Equality of treatment among employees established by such actions
as eliminating executive dining rooms and reserved parking spaces. The reduction in the number
of social categories tends to diminish the “us” versus “them” thinking and provides a sense of
everyone working toward a common goal.

31. 12. Wage compression: Reducing the size of the pay differences among employees. When tasks
are somewhat interdependent and cooperation is needed to accomplish the work, pay
compression can lead to productivity gains by reducing interpersonal competition and enhancing
cooperation.
13. Promotion from within: Filling job vacancies by promoting employees from jobs at a lower
organizational level. Promotion increases training and skill development, offers employees an
incentive for doing well, and can provide a sense of fairness and justice in the workplace.
14. Long-term perspective: The organization must realize that achieving competitive advantage
through the workforce takes time to accomplish, and thus a long- term perspective is needed. In
the short run, laying off people is probably more profitable than trying to maintain employment
security, and cutting
training is a quick way to maintain short-term profits. But once achieved, competitive advantage
brought about by the use of these HRM practices (i.e., employment security and training is likely
to be substantially more enduring.
15. Measurement of practices: Organizations should measure such things as employee attitudes,
the success of various programs and initiatives, and employee performance levels. Measurement
can guide behavior by indicating “what counts,” and it can provide the company and its
employees with feedback as to how well they are performing relative to measurement standards.
16. Overarching philosophy: Having an underlying management philosophy that connects the
various individual practices into a coherent whole. The success of the separate practices listed in
items 1 through 15 is somewhat dependent on having a system of values and beliefs about the
basis of success and how to manage people. For instance, the overarching philosophy at
Advanced Micro Devices is “continuous rapid improvement; empowerment; seamless
organizational boundaries; high expectations; and technical excellence.”

32. Nine Grid Box
The 9-box grid is an individual assessment tool that evaluates an employee's current and
potential level of contribution to the organization. The vertical columns of the grid indicate
growth potential, and the horizontal rows identify whether the employee is currently below,
meeting or exceeding performance expectations. The intersection of the two determines the
employee's current standing and where development may be needed.
A ‘nine-box grid’ is a matrix tool used to evaluate and plot a company’s talent pool based on two
factors, which most commonly are performance and potential. Typically on the horizontal axis is
‘performance’ measured by performance reviews. On the vertical axis is ‘potential’ referring to
an individual’s potential to grow one or more levels in a managerial or professional capacity.
Nine-box grids are actively used during the talent review process. During this process, a group of
managers/leaders work together to manually place individuals on the X-Y axis to help identify
the highest potential individuals, who needs development, and who needs coaching on
performance improvement.
What 9 ‘boxes’ make up the 9 box grid?
The 9 box grid consists of the following groups, segments or boxes…
Low Moderate High
.Low performer with high
potential
Low performer with high potential
High performer with high
potential
Low performer with moderate
potential
Moderate performer with high
potential
High performer with moderate
potential
Low performer with low
potential
Moderate performer with moderate
potential.
High performer with low
potential

33. The remaining boxes can be used to identify when coaching or a change in job or responsibilities
may be needed. It may not be valuable to the organization to spend time and effort attempting to
salvage an individual with low potential and poor performance; however, an individual with low
potential but effective performance may need to be engaged or motivated in his or her current
job.
When used correctly, the 9-box grid can be both a versatile and a valuable tool for an
organization, but HR professionals are advised to become thoroughly familiar it before
attempting to use it. Like any tool, it can be damaging to the organization if used incorrectly.