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STRATEGIC HUMAN RESOURCES
MANAGEMENT
Chapter One:
Foundations of Human Resource
Management
Human Resource Management an
Over View
• The term "human resource management" has
been commonly used for about the last ten to
fifteen years.
• Prior to that, the field was generally known as
"personnel administration." The name change is
not merely cosmetics.
• Yesterday, the company with the access most to
the capital had the best competitive advantage;
• Today, companies that offer products with the
highest quality are the ones with a leg up on the
competition;
• Tomorrow is the caliber of people in the
organization.
Definitions of HRM
• Human resources management (HRM) is a
management function concerned with hiring,
motivating and maintaining people in an
organization. It focuses on people in
organizations.
• Human resource management is designing
management systems to ensure that human
talent is used effectively and efficiently to
accomplish organizational goals.
Definitions …..
• HRM is the personnel function which is
concerned with procurement, development,
compensation, integration and maintenance
of the personnel of an organization for the
purpose of contributing towards the
accomplishments of the organization’s
objectives.
• Therefore, personnel management is the
planning, organizing, directing, and controlling
of the performance of those operative
functions (Edward B. Philippo).
Importance of Human Resource
Management
1. Strategic HR Management: Human resource
planning (HRP) function determine the
number and type of employees needed to
accomplish organizational goals.
2. Equal Employment Opportunity:
Compliance with equal employment
opportunity (EEO) laws and regulations affects
all other HR activities.
3. Staffing: The aim of staffing is to provide a
sufficient supply of qualified individuals to fill
jobs in an organization.
Importance…….
4. Talent Management and Development:
– It includes different types of training.
5. Total Rewards:
– Compensation in the form of pay, incentives and
benefits are the rewards given to the employees
for performing organizational work.
6. Risk Management and Worker Protection:
– Ensure protection of workers by meeting legal
requirements and being more responsive to
concerns for workplace health and safety along
with disaster and recovery planning.
Ad

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Chapter One.pptx

  • 1. STRATEGIC HUMAN RESOURCES MANAGEMENT Chapter One: Foundations of Human Resource Management
  • 2. Human Resource Management an Over View • The term "human resource management" has been commonly used for about the last ten to fifteen years. • Prior to that, the field was generally known as "personnel administration." The name change is not merely cosmetics. • Yesterday, the company with the access most to the capital had the best competitive advantage; • Today, companies that offer products with the highest quality are the ones with a leg up on the competition; • Tomorrow is the caliber of people in the organization.
  • 3. Definitions of HRM • Human resources management (HRM) is a management function concerned with hiring, motivating and maintaining people in an organization. It focuses on people in organizations. • Human resource management is designing management systems to ensure that human talent is used effectively and efficiently to accomplish organizational goals.
  • 4. Definitions ….. • HRM is the personnel function which is concerned with procurement, development, compensation, integration and maintenance of the personnel of an organization for the purpose of contributing towards the accomplishments of the organization’s objectives. • Therefore, personnel management is the planning, organizing, directing, and controlling of the performance of those operative functions (Edward B. Philippo).
  • 5. Importance of Human Resource Management 1. Strategic HR Management: Human resource planning (HRP) function determine the number and type of employees needed to accomplish organizational goals. 2. Equal Employment Opportunity: Compliance with equal employment opportunity (EEO) laws and regulations affects all other HR activities. 3. Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals to fill jobs in an organization.
  • 6. Importance……. 4. Talent Management and Development: – It includes different types of training. 5. Total Rewards: – Compensation in the form of pay, incentives and benefits are the rewards given to the employees for performing organizational work. 6. Risk Management and Worker Protection: – Ensure protection of workers by meeting legal requirements and being more responsive to concerns for workplace health and safety along with disaster and recovery planning.
  • 7. Importance…. 7. Employee and Labor Relations: • The relationship between managers and their employees must be handled legally and effectively. • Employer and employee rights must be addressed. • It is important to develop, communicate, and update HR policies and procedures so that managers and employees alike know what is expected.
  • 8. HRM Objectives  Human capital : assisting the organization in obtaining the right number and types of employees.  To create a climate in which employees are encouraged to develop and utilize their skills to the fullest and to employ the skills and abilities of the workforce efficiently  To increase productivity through training and development.  Helping to establish and maintain a harmonious employer/employee relationship  Helping to create and maintain a safe and healthy work environment
  • 9. Objectives……. • Developing programs to meet the economic, psychological, and social needs of the employees. • To help the organization to reach its goals • To provide organization with well-trained and well-motivated employees • To increase the employees satisfaction and self- actualization • To develop and maintain the quality of work life • To communicate HR policies to all employees. • To help maintain ethical polices and behavior.
  • 10. Objectives….. The above stated HRM objectives can be summarized under four specific objectives. i.e.
  • 11. Objectives……. 1. Societal Objectives: seek to ensure that the organization becomes socially responsible to the needs and challenges of the society. 2. Organizational Objectives: it recognizes the role of HRM in bringing about organizational effectiveness. • It makes sure that HRM is not a standalone department, but rather a means to assist the organization with its primary objectives.
  • 12. Objectives…. 3. Functional Objectives: is to maintain the department’s contribution at a level appropriate to the organization’s needs. 4. Personnel Objectives: it is to assist employees in achieving their personal goals. • Personal objectives of employees must be met if they are to be maintained, retained and motivated. • Otherwise employee performance and satisfaction may decline giving rise to employee turnover.
  • 14. a) Human Resource Planning: The objective of HR Planning is to ensure that the organization has • the right types of persons at the right time at the right place. It prepares human resources inventory • with a view to assess present and future needs, availability and possible shortages in human resource. • Planning develops strategies both long-term and short-term, to meet the man-power requirement.
  • 15. b) Design of Organization and Job: This is the task of laying down organization structure, authority, • Relationship and responsibilities- This will also mean definition of work contents for each position in the organization. This is done by “job description”. Another important step is “Job specification”. • Job specification identifies the attributes of persons who will be most suitable for each job which is defined by job description
  • 16. C) Selection and Staffing: • This is the process of recruitment and selection of staff. This involves • matching people and their expectations with which the job specifications and career path available within the organization. d) Training and Development: • This involves an organized attempt to find out training needs of the individuals to meet the knowledge and skill which is needed not only to perform current job but also to fulfil the future needs of the organization.
  • 17. e) Organizational Development: This is an important aspect whereby “Synergetic effect” is generated in an organization i.e. healthy interpersonal and inter-group relationship within the organization. f) Compensation and Benefits: • This is the area of wages and salaries administration where wages and compensations are fixed scientifically to meet fairness and equity criteria. • In addition labour welfare measures are involved which include benefits and services.
  • 18. g) Employee Assistance: Each employee is unique in character, personality, expectation and temperament. By and large each one of them faces problems everyday. Some are personal some are official. In their case he or she remains worried. Such worries must be removed to make him or her more productive and happy. h) Union-Labor Relations: • Healthy Industrial and Labor relations are very important for enhancing peace and productivity in an organization. • This is one of the areas of HRM.
  • 19. i)Personnel Research and Information System: • Globalization of economy has increased competition many fold. • Science of ergonomics gives better ideas of doing a work more conveniently by an employee. • Thus, continuous research in HR areas is an unavoidable requirement. • It must also take special care for improving exchange of information through effective communication systems on a continuous basis especially on moral and motivation.
  • 20. HR Principles There are many principles of Human Resources. Here are eight of them to understand and apply appropriately to make HR practices transparent and relevant for the future.
  • 21. HR Principles Principle #1: Recruitment to retirement • HR is all about dealing with employees from recruitment to retirement. • It includes manpower planning, selection, training and development, placement, wage and salary administration, promotion, transfer, separation, performance appraisal, grievance handling, welfare administration, job evaluation and merit rating, and exit interview.
  • 22. HR Principles Principle #2: People (men) behind the machine count. • Previously, it was the machine behind the man that counted. • Today, people are the real power to drive organizations forward. Machines only assist people. • Ultimately, the machine is servant to men, not the other way around.
  • 23. HR Principles Principle #3: Hire for attitude, recruit for skills. • Attitude is the key to employee engagement and success. • Hence, HR leaders must emphasize attitude rather than experience. • It is better to hire a new job seeker with high attitude and no experience than one with a rotten attitude and years of experience. • If employees possess a good attitude, they will have the ability absorb the knowledge, skills, and abilities that are essential to perform their tasks effectively in the workplace.
  • 24. HR Principles Principle #4: Appreciate attitude but respect intelligence. • It is true that both attitude and intelligence are essential to improve the organizational bottom line. • If HR leaders find it is tough to get both, they should choose attitude over intelligence as it helps accomplish organizational goals and objectives.
  • 25. HR Principles Principle #5: Hire slow, fire fast. • HR leaders must be slow in hiring the right talent for their organizations. • They must look for the right mindset, skill set, and tool set in job seekers during recruitment. • If they find that bad apples entered into their basket, they must be removed quickly to contain further damage to their organizations.
  • 26. … Principles Principle #6: Shed complexity, wed simplicity. • People today prefer to work in flat organizations rather than tall ones. • Tall organizations often have hierarchies with a bureaucratic mindset that doesn’t work in the present context. • Employees are happy to work with partners rather than with bosses. • So shed complexity and wed simplicity to achieve organizational excellence and effectiveness.
  • 27. … Principles Principle #7: HR leaders are king and queen makers. • They cannot become kings and queens. • They are perceived as people who become ladders for others to climb to higher positions. • They know everything about HR, but they don’t necessarily know much about other aspects in the organization. CEOs are masters in their own domains and jacks of other domains. • They are masters in their areas and know something about others areas. Thus, HR leaders must acquire knowledge about other areas and acquire technical and business acumen to become kings and queens—the chief executives.
  • 28. … Principles Principle #8: To serve is to lead and live. • Mahatma Gandhi once remarked, “The best way to find yourself is to lose yourself in the service of others.” • HR leaders must serve people with pleasure without any pressure. • They must become torchbearers of human capital and knowledge. • They must learn, unlearn, and relearn to stay relevant.
  • 29. Factors that Affect Human Resource Management External Factors 1. Government Regulations • With the introduction of new workplace compliance standards your human resources department is constantly under pressure to stay within the law. • These types of regulations influence every process of the HR department, including hiring, training, compensation, termination, and much more. • Without adhering to such regulations a company can be fined extensively which if it was bad enough could cause the company to shut down.
  • 30. Factors Affect HRM …. 2. Economic Conditions • One of the biggest external influences is the shape of the current economy. • Not only does it affect the talent pool, but it might affect your ability to hire anyone at all. • All companies can make due in a bad economy if they have a rainy day fund or plan to combat the harsh environment.
  • 31. Factors Affect HRM …. 3. Technological Advancements • When new technologies are introduced the HR department can start looking at how to downsize and look for ways to save money. • A job that used to take 2-4 people could be cut to one done by a single person. • Technology is revolutionizing the way we do business and not just from a consumer standpoint, but from an internal cost-savings way.
  • 32. Factors Affect HRM …. 4. Workforce Demographics • As an older generation retires and a new generation enters the workforce the human resources department must look for ways to attract this new set of candidates. • They must hire in a different way and offer different types of compensation packages that work for this younger generation. • At the same time, they must offer a work environment contusive to how this generation works.
  • 33. Factors Affect HRM …. Internal Factor 1.Level of Growth: • An internal factor that impacts human resources is the company's rate of current and projected growth. • Companies experiencing aggressive growth and rapid expansion may require its human resources department to focus on recruitment and staffing. • More stagnant companies may place a greater focus on efforts on employee retention and improving the company's culture and workplace environment through upgrading job descriptions and enhancing compensation and fringe benefits programs. • Downsizing companies may have to take the regrettable decision to lose some of its staff; a message that's often left to HR to relay.
  • 34. Factors Affect HRM …. 2. Use of Technology • One of the key internal factors affecting human resource planning is the willingness for the HR department and company management to use technology to aid in certain key human resources functions. • For example, companies that make greater use of tools such as online benefits management, where employees can make changes to their benefit plans on their own, provide human resources workers with more time to focus on other areas like recruiting or training and employee development. • This can free up a considerable amount of time and resources across the organization.
  • 35. Changing Environment of Human Resource Management (HRM) Factors involved in the changing environment of HRM are as follows
  • 36. 1. Work force Diversity: • Diversity has been defined as any attribute that humans are likely to use to tell themselves, that person is different from me and, thus, includes such factors as race, sex, age, values, and cultural norms’. • Now a days countries’ work force is characterized by such diversity that is deepening and spreading day by day.
  • 37. 2. Economic and Technological Change: • Along with time, several economic and technological changes have occurred that have altered employment and occupational pattern. • In many countries, there is a perceptible shift in occupational structure from agriculture to industry to services due to technological change.
  • 38. 3. Globalization: • Globalization increases competition in the international business. • Firms that formerly competed only with local firms, now have to compete with foreign firms/competitors. • Thus, the world has become a global market where competition is a two-way street.
  • 39. 4. Organizational Restructuring: • Organizational restructuring is used to make the organization competitive. • From this point of view, mergers and acquisitions of firms have become common forms of restructuring to ensure organizational competitiveness. • The mega-mergers in the banking, telecommunications and petroleum companies have been very visible in our country. • Downsizing is yet another form of organizational restructuring.
  • 40. Ethical Issues Faced by Human Resource 1. Employment Issues: HR professionals are likely to face maximum ethical dilemmas in the areas of hiring of employees. a. Pressure to hire a friend or relative of a highly placed executive. b. Faked credentials submitted by a job applicant. c. Discovery that an employee who has been with the organization for some time, is skilled and has established a successful record, had lied about his educational credentials.
  • 41. Ethical Issues….. 2. Cash and Incentive Plans: Cash and incentive plans include issues like basic salaries, annual increments or incentives, executive perquisites and long term incentive plans: a. Basic Salaries: HR managers have to justify a higher level of basic salaries or higher level of percentage increase than the competitors to retain some employees. In some situations, where the increase is larger than normal they have to elevate some positions to higher grades.
  • 42. Ethical Issues….. b. Executive Perquisites: • It is non-cash benefits provided by many employers to their executives to: Attract and retain talent. • In the name of executive perquisites, sometimes excesses are often committed, the ethical burden of which falls on the HR managers. • Sometimes the costs of these perquisites are out of proportion to the value added. • For example, the CEO of a loss making company buys a Mercedes for his personal use or wants a swimming pool built at his residence.
  • 43. Ethical Issues….. 3. Employees Discriminations: • A framework of laws and regulations has been evolved to avoid the practices of treatment of employees on the basis of their caste, sex, religion, disability, age etc. • No organization can openly practice any discriminatory policies, with regard to selection, training, development, appraisal etc.
  • 44. Ethical Issues….. 4. Performance Appraisal: • Ethics should be the basis of performance evaluation. • Highly ethical performance appraisal demands that there should be an honest assessment of the performance and steps should be taken to improve the effectiveness of employees. • However, HR managers, sometimes, face the dilemma of assigning higher rates to employees who are not deserving them; based on some unrelated factors eg. closeness to the top management.
  • 45. Ethical Issues….. 5. Privacy: • The private life of an employee which is not affecting his professional life should be free from intrusive and unwarranted actions. • HR managers face three dilemmas in this aspect: (i) The first dilemma relates to information technology. Close circuit cameras, tapping the phones, reading the computer files of employees etc. breach the privacy of employees. (ii) The second ethical dilemma relates to the AIDS testing. AIDS has become a public health problem. HR managers are faced with two issues: Whether all the new employees should be subject to AIDS test and what treatment should be melted out to an employee who is affected with the disease.
  • 46. Ethical Issues….. (iii) The third ethical dilemma relates to Whistle Blowing. Whistle blowing refers to a public disclosure by former or current employees of any illegal, immoral or illegitimate practices involving their employers. Generally, employees are not expected to speak against their employers, because their first loyalty in towards the organization for which they work.
  • 47. Ethical Issues….. 6. Safety and Health: • Industrial work is often hazardous to the safety and health of the employees. • Legislations have been created making it mandatory on the organizations and managers to compensate the victims of occupational hazards. • Ethical dilemmas of HR managers arise when the justice is denied to the victims by the organization.
  • 48. Ethical Issues….. 7. Restructuring and layoffs: • Restructuring of the organizations often result in layoffs and retrenchments. • This is not unethical, if it is conducted in an atmosphere of fairness and equity and with the interests of the affected employees in mind. • If the restructuring company requires closing of the plant, the process by which the plant is chosen, how the news is to be communicated and the time frame for completing the layoffs is ethically important.
  • 49. Human Resource Management Model • The Human Resource Management model contains all Human Resource activities. • What are the Human Resource Activities?
  • 50. Why is the HR Model important? • The HR Strategy is usually high-level. • The HR Strategy does not solve the issue of the HR Process ownership. • The strategy defines the strategic role of HR in the organization and initiatives to be done within the frame of several years. • The HR Model is the best decision tool for the ownership of the new HR Processes. Additionally, it helps to identify gaps in the HR Organizational Structure and the skills and competencies of HR employees.
  • 52. Model 1. Human Resource Planning is understood as the process of forecasting an organizations future demand for, and supply of, the right type of people in the right number. 2. Job analysis is the process of studying and collecting information relating to the operations and responsibilities of a specific job. – The immediate products of this analysis are job descriptions and job specification.
  • 53. Model…. 3. Recruitment is the process of finding and attracting capable applicants for employment. 4. Selection: is the process of differentiating between applicants in order to identify (and hire) those with greater likelihood of success in a job. 5. Placement: is understood as the allocation of people to jobs. • It is the assignment or reassignment of an employee to a new or different job.
  • 54. Model…. 6. Training and development: it is an attempt to improve current or future employee performance by increasing an employee’s ability to perform through learning, usually by changing the employee’s attitude or increasing his or her skills and knowledge. 7. Remuneration: is the compensation an employee receives in return for his or her contribution to the organization.
  • 55. Model…. 8. Motivation: is a process that starts with a psychological or physiological deficiency or need that activates behavior or a drive that is aimed at a goal or an incentive. 9. Participative management: Workers participation may broadly be taken to cover all terms of association of workers and their representatives with the decision making process. 10.Communication: may be understood as the process of exchanging information, and understanding among people.
  • 56. Model…. 11. Safety and health: Freedom from the occurrence or risk of injury or loss. 12. Welfare: include services, facilities, and amenities as may be established in or in the vicinity of undertakings to enable the person employed in them to perform their work in healthy, congenial surroundings and to provide them with amenities conducive to good health and high morale. 13. Promotions: means an improvement in pay, prestige, position and responsibilities of an employee within his or her organization.
  • 57. Model…. 14. Transfer: Involves a change of an employee without a change in the responsibilities or remuneration. 15. Separations: Lay-offs, resignations and dismissals separate employees from the employers. 16.Industrial relations is concerned with the systems, rules and procedures used by unions and employers to determine
  • 58. Model…. 17. Trade unions: are voluntary organizations of workers or employers formed to promote and protect their interests through collective action. 18. Disputes and their settlement: Any dispute or difference between employers and employers, or between employers and workmen, or between workmen and workmen, which is connected with the employment or non-employment or terms of employment or with the conditions of labor of any person.
  • 59. Outcomes of the HR Model? • Clear principle for the design and setting of the HR Roles and Responsibilities. • It saves many conflicts in the future. • Build a stronger and more competitive HR Function in the organization. • clearly defines the strategic HR Processes and strategic HR Areas, which have to be developed further to build a strong and competitive position on the market. • It helps to identify the full responsibility for the administrative HR processes. The employees are sure about their goals and the main drivers for their success in HR.
  • 60. Strategic HRM (SHRM) • The field of strategic HRM is still evolving and there is little agreement among scholars regarding an acceptable definition. • The HR Strategy is usually high-level. • The HR Strategy defines the strategic role of HR in the organization and initiatives to be done within the frame of several years.
  • 61. SHRM… • SHRM is systematically linking people with the organization; more specifically, it is about the integration of HRM strategies into corporate strategies. • HR strategies focus is on alignment of the organization’s HR practices, policies and programmes with corporate and strategic business unit plans (Greer, 1995). • Strategic HRM thus links corporate strategy and HRM, and emphasizes the integration of HR with the business and its environment.
  • 62. Focus of Strategic HRM • Lengnick-Hall and Lengnick-Hall (1999) summarize the variety of topics that have been the focus of strategic HRM writers over the past couple of decades. These include: 1. HR accounting: which attempts to assign value to human resources in an effort to quantify organizational capacity 2. HR planning 3. Responses of HRM to strategic changes in the business environment; 4. Matching human resources to strategic or organizational conditions; and 5. The broader scope of HR strategies.
  • 63. Core Aspects of SHRM Two core aspects of SHRM are: A. The integration of HRM into the business and corporate strategy – ‘The degree to which the HRM issues are considered as part of the formulation of the business strategy’ B. The devolvement of HRM to line managers instead of personnel specialists. – ‘The degree to which HRM practices involve and give responsibility to line managers rather than personnel specialists’.
  • 64. Linking organizational strategy and HRM strategy Many scholars developed many theoretical models that highlight the nature of linkage between HRM strategies and organizational strategies.
  • 65. Stages of the Evolution of Strategy and HRM Integration • Greer (1995) talks about four possible types of linkages between business strategy and the HRM function / department of an organization: 1. ‘Administrative linkage’ represents the scenario where there is no HR department looks after the HR function of the firm. The HR unit is relegated here to a paper-processing role. In such conditions there is no real linkage between business strategy and HRM. 2. ‘one-way linkage’ where HRM comes into play only at the implementation stage of the strategy.
  • 66. Greer (1995) …..Stages of the Evolution 3. ‘Two-way linkage’ is more of a reciprocal situation where HRM is not only involved at the implementation stage but also at the corporate strategy formation stage. 4. ‘Integrative linkage’, where HRM has equal involvement with other organizational functional areas for business development.
  • 67. Purcell (1989) …..two-level integration • Purcell (1989) presents a two-level integration of HRM into the business strategy. • First-order decisions, as the name suggests, mainly address issues at the organizational mission level and vision statement; these emphasize where the business is going, what sort of actions are needed to guide a future course, and broad HR-oriented issues that will have an impact in the long term. • Second-order decisions deal with scenario planning at both strategic and divisional levels for the next 3–5 years. These are also related to hardcore HR policies linked to each core HR function (such as recruitment, selection, development, communication).
  • 68. Guest (1987) …three levels Guest (1987) proposes integration at three levels: 1. First he emphasizes a ‘fit’ between HR policies and business strategy. 2. Second, he talks about the principle of ‘complementary’ (mutuality) of employment practices aimed at generating employee commitment, flexibility, improved quality and internal coherence between HR functions. 3. Third, he propagates ‘internalization’ of the importance of integration of HRM and business strategies by the line managers.