1st unit of HRM MBA

1. HUMAN RESOURCE
MANAGEMENT
CONCEPTS AND CHALLENGES
CHAPTER 1

2. WHY HUMAN FACTOR IS MORE IMPORTANT?
 Human resources are unique in character
 HR alone can produce an output greater
than its input
 HR is the only resource which are animate
 HR is most complex and unpredictable in
its behavior
 This is the only resource which appreciates
in its value with the passage of time.

3. WHAT IS HUMAN RESOURCE MGMT?
 HRM is concerned with the “people” dimension in
management.
 Organizations are managed by the people &
through people. Without people, organizations
can never exist.
 Indeed people who make up the human resources
of the company are unique & they can either
make or break an organizations depending upon
the level of commitment, contributions and co-
operations.
 Human resources have to manage 5 basic
functions most effectively:-
 They are as follows:- Planning, Organizing,
Staffing, Leading, Directing, Controlling.

4. CONT..
 It is concerned with human beings in an
organization. HR management helps bridge the gap
between employees’ performance and the
organization's strategic objectives
 It deals with the process of developing people in
accordance with their aspirations & to suit the
organizational needs.
 Thus the main purpose of HRM is to improve the
productive contributions of people to the
organization in an ethical & socially responsible
way.

5. SCOPE OF HRM
 To look at HRM more specifically, let us have a look
at its 4 main functions:-
Functions
of HRM
ACQUISITION
DEVELOPMENT
MOTIVATION
MAINTENANCE

6. CONT..
 Acquisition Function- It begins with planning. Relative to
HR requirements, we need to know where we are going and
how we are going to get there.
 Development Function- It can be viewed along with 3
dimensions. First is employee training which focuses on
skill development & changing the attitudes among workers.
Second is management development which concerns with
knowledge acquisition & the enhancement of an executive
conceptual abilities. Third is career development which is
the continual efforts to match long term individual &
organizational needs.
 Motivation Function- It begins with the recognition that
individuals are unique & motivation techniques must reflects
the needs of the individuals. It consists of performance
appraisal, rewards, recognition, compensations, benefits etc.
 Maintenance Function- It is concerned with providing those
working conditions that employees believe are necessary in
order to maintain their commitment to the organization.

7. DEFINITIONS:-
 “ It is the process of managing people in the organizations.”
 HRM is planning, organizing, directing and controlling of the
procurement, development, compensation, integration,
maintenance, and separation of human resources to the end
that individual, organizational and social objectives are
accomplished.” - Flippo
 “Human Resource Management is the process of acquiring,
training, appraising and compensating employees and attending
to their labour relations, health and safety and fairness
concerns”. -Prof. Gary Dessler.
 “Human Resources Management is a management function that
helps manager’s recruit, select, train and develop members for
an organization. Obviously, HRM is concerned with people’s
dimension in organization”. Prof. K. Aswathappa

8. OBJECTIVES OF HRM
 To effective utilization of the human resources.
 To establish and maintain an organizational structure.
 To secure integration to the individuals and organization
by reconciling individual group goals.
 To generates maximum development of individuals
groups.
 To recognize and satisfy individual needs and group
goals.
 To maintain high morale and better human relations.
 To develop and maintain a quality of work life.
 To establish and maintain productive self-respecting
working relationships.

9. FUNCTIONS OF HRM:-
 Planning
 Organizing
 Directing
 Controlling
 Procurement
 Development
 Compensation
 Integration
 Maintenance
Managerial Functions Operative Functions

10. FEATURES OF HUMAN RESOURCE MANAGEMENT
 Universal Force
 Decision Oriented
 Focus on Individual needs and objectives
 Employee Oriented
 Development and Growth Oriented
 Employees- An Internal Customers.
 Strategic Implications
 Support Functions
 Multi-disciplinary Nature
 Ongoing and Forward Looking nature

11. ROLE OF HUMAN RESOURCE MANAGEMENT:
The Conscience (Senses of right
and wrong) Role
The Counsellor
The Mediator
The Spokesperson
The Change Agent
Problem Solver

12. IMPORTANCE OF HRM
 HRM helps a company to achieve its objective from time
to time by creating a positive attitude among workers.
Reducing wastage and making maximum use of
resources.
 Due to proper HR policies employees are trained well
and this makes them ready for future promotions. Their
talent can be utilized not only in the company in which
they are currently working but also in other companies
which the employees may join in the future.
 Healthy HRM practices can help the organization to
maintain co-ordinal relationship with the unions. Union
members start realizing that the company is also
interested in the workers and will not go against them
therefore chances of going on strike are greatly
reduced.

13. IMPORTANCE OF HRM
 Effective HR practices teach individuals team work and
adjustment. The individuals are now very comfortable
while working in team thus team work improves.
 Since employees are constantly trained, they are ready
to meet the job requirements. The company is also able
to identify potential employees who can be promoted in
the future for the top level jobs.
 If proper recruitment and selection methods are followed,
the company will be able to select the right people for the
right job.
 Effective HR practices lead to higher profits and better
performance by companies due to this the company
achieves a chance to enter into new business and start
new ventured thus industrial development increases and
the economy improves.

14. POLICIES & PRACTICES IN HRM
 Dictionary meaning of the word Policy is “ Plan of Action”
and Plan is a Policy.
 HRM refers to practices and policies framed for the
management of human resource organization, including
Recruiting, screening, reward in grand appraising.
 Practices of HRM:
 Safe , Healthy and Happy workplace.
 Delight employees with unexpected
 Reward ceremonies
 Open House Discussion Feedback Mechanism
 Highlight Performer
 Knowledge Sharing with employees
 Fair Evaluation System
 Performance - linked Bonuses
 360 Degree Performance Management

15. CONT..
 HR policies are the formal rules and guidelines that
organization put in place to hire, train, access and
reward the members of their workplace.
 HR policies are the system of codified decisions,
established by an organisation,to support administrative
personnel functions, performance management
,employee relations and resource planning.
 Purpose: To be clear with employees on
 the nature of the organization
 What they should expect from the company
 What the company expects from them
 How policies and procedures work at the company
 What is acceptable and unacceptable behavior
 The consequences of the unacceptable behavior

16. CHALLENGES OF HUMAN RESOURCE
MANAGEMENT:
 Challenges due to Globalization
 Skill Shortage
 Knowledge management
 Challenges related to training
 Changing workforce dynamics
 Changed employee expectations.
 Compliance with Laws and Regulation.
 Management Changes.
 Leadership Development.
 Workforce Training and Development.
 Adapting to Innovation.
 Compensation.
 Talent retention

17. STRATEGIC HUMAN RESOURCE MANAGEMENT
 Human resource management (HRM) focuses on
recruiting and hiring the best employees and providing
them with the compensation, benefits, training, and
development they need to be successful within an
organization.
 However, Strategic Human Resource Management
takes these responsibilities one step further by aligning
them with the goals of other departments and overall
organizational goals.
 HR departments that practice strategic management also
ensure that all of their objectives are aligned with the
mission, vision, values, and goals of the organization of
which they are a part.

18. STRATEGIC HUMAN RESOURCE MANAGEMENT
 Strategic human resource management (SHRM) is
about the formulation of HR strategies in alignment
with the overall corporate strategy to achieve the
goals of the organization.
 Strategic HRM is seen as a partner in organizational
success, as opposed to a necessity for legal
compliance or compensation.
 Strategic HRM utilizes the talent and opportunity within
the human resources department to make other
departments stronger and more effective.

19. LET SEE AN EXAMPLE:
 Let's think about this approach in relation to a basketball team,
where Player A is the strategic HR department, and Players B
to E are the other departments within the organization.
 The whole team wants to win the ball game, and they all may
be phenomenal players on their own, but one great player
doesn't always win the game.
 That's not how a basketball team wins, and it's not how an
organization wins either. A team wins when its members
support each other and work together for a common goal.
Player A, our strategic HR department, must work with players
B, C, D and E, our different organizational departments.
 They must run plays that they have planned out beforehand,
assist when necessary to help another player get the basket,
and compensate for the weaknesses of one in order to create a
stronger team as a whole. When a team works together to
reach that common goal, only then can they be truly
successful.

20. EXAMPLE:
 Here are top companies that demonstrate exemplary
strategic human resource management.
 Google:- Google being Google, it’s no surprise that their
approach to HR broke away from tradition.
 We all know about the tons of employee perks and
amazing “Googlified” facilities that set a new trend in office
design. But Google’s strategic approach to human
resources goes beyond that. Like with most tech
companies they’re obsessed with data, and the HR
function is no exception.
 In 2006, co-founders S Brin and L. Page decided to take
an empirical approach to HR founded on feedback and
employee data. A manifestation of this is Project Oxygen
an ongoing study into management practices that
identifies and measures key management behaviors and
helps nurture them.

21. CONT..
 It all gets quite technical, but essentially Google hired
some smart people to undertake in-depth statistical
analysis into what their employees consider to be good
managers. They discovered eight common behaviors
exhibited by the top-performing managers and then
trained the rest in them.
 As a result, Google saw an overall improvement in
people management and team metrics such as
turnover, satisfaction, and performance over time.
 So there you go, collecting data from your employees
and using it to improve the employee experience does
work. It’s no accident that Google employees are some
of the most productive in the world.

22. EXAMPLE:
 Cisco:- True to their industry, CISCO developed their own HRM
technology to guide strategy and better serve the needs of the business.
 The CISCO Talent Cloud is essentially an internal CRM that gives
managers transparency into the skills and experiences of the company’s
70,000+ employees.
 Further, it gives employees themselves the tools and insights they need
to take the initiative and advance their careers (sounds like an internal
LinkedIn!).
 This approach allows managers to put together the best team needed to
complete a particular project, and employees the opportunity to learn by
working on a project that helps them meet a particular goal.
 Senior managers can also access real-time intelligence on team
performance, how they produce results, execute priorities, and levels of
engagement.
 CISCO is ranked number one in Fortune’s Best 100 Companies To Work
For and is able to attract top talent to help meet business goals.

23. NATURE OF STRATEGIC HRM
 At Organizational Level : Because strategies involve
decisions about key goals, major policies and the
allocation of resources, they tend to be formulated at
the top.
 Strategies are business driven and focus on
organizational effectiveness; thus in this
perspective people are viewed primarily as
resources to be managed toward the
achievement of Strategic business goals.

25. MODELS OF STRATEGIC HRM
1. The Fombrun Model/Matching Model:One of the first explicit
statements of the HRM concept was made by the Michigan
School (Fombrun et al, 1984). They held that HR systems and
the organization structure should be managed in a way that is
congruent with organizational strategy (hence the name
‘matching model’).
2. They further explained that there is a human resource cycle
which consists of four generic processes or functions that are
performed in all organizations.
3. Four generic processes are –
4. Selection – Matching available human resources to jobs;
5. Appraisal - Performance management
6. Rewards – The reward system is one of the most under-
utilized and mishandled managerial tools for driving
organizational performance’; –
7. Development – Developing high-quality employees.

28. CONT..
 It is divided into two parts: first which shows HR-strategy
integration and second which depicts the HR cycle.
 A) Important HR issues to achieve such a match:
 Selection of the most suitable people to meet businessneeds.
 Performance in the pursuit of business, objectives.
 Rewards for appropriate performance.
 Development of skills and knowledge required to meet
businessobjectives.
 B) Managerial Implications of the Model:
 The model is focused on individual and organisational
performance.
 It concentrates on managing human assets to achieve
strategicgoals.
 Contributes to Human Resource Performance

29. CONT..
 Matching model ensures way to achievethe
organizational objectives is the applying of above five
major functions of HRM very effectively.
 The work and contribution of properly selected human
resource has to be evaluated in using appropriate
techniques.
 Some kinds of rewards have to be offered on the basis of
results of appraisal and the performances of employees..

30. HARVARD MODEL OF HRM
 Beer et al (1984) produced what has become known as the
‘Harvard framework’.
 They started with the proposition that: ‘Human resource
management (HRM) involves all management decisions
and actions that affect the nature of the relationship
between the organization and employees – its human
resources.
 They believed that: ‘Today... many pressures are
demanding a broader, more comprehensive and more
strategic perspective with regard to the organization’s
human resources’
 They also stressed that it was necessary to adopt ‘a longer-
term perspective in managing people and consideration of
people as a potential asset rather than merely a variable
cost’

31. CONT.
 Beer and his colleagues were the first to underline the
HRM tenet that it belongs to line managers. They
suggested that HRM had two characteristic features:
 1) line managers accept more responsibility for ensuring
the alignment of competitive strategy and HR policies;
 2) HR has the mission of setting policies that govern how
HR activities are developed and implemented in ways that
make them more mutually reinforcing