HRM chapter 1.

1. Compulsory course
Human Resource Management
Introduction to HRM
by
Dr. Sonali Narbariya

2. Introduction to HRM
• It does not matter where you are, each one of us has
to take responsibility about HRM
• Series of strikes by employees in 1997
• Eg: UPS, GM motors
• HRM helps company to be more productive

3. HRM view
• Traditional View
• Record keeping, Payroll, Employment etc.
• Strategic View
• People as critical resource
• Knowledge & experience as capital

4. Definition of HRM
• HRM encompasses all management decisions and
activities that affect or influence people(human
resource) of the organization.
-Gary Dessler

5. HR Functions
• Employment
• Planning & staffing
• Development
• Training & Development
• Reward systems
• Compensation & Benefits
• Support
• Safety & Health, Wellness
• Compliance
• EEO, Affirmative Action, Harassment, Hostile environment, Managing diversity
• Labor management issues
• Labor relations, collective bargaining

6. Strategic HRM
• Productivity
• How to do better with what you have?
• We do not consider HR unit
• Quality of worklife
• How to create environment of trust & collaboration?
• Profits
• How to transform HRM function from cost to profit centre?
• Show how TAD saves money

7. Ethical Issues
• Core values of treating people
– fairly
• Equity issues in employment
– hiring friends/family – being a buddy
• Harassment
• Confidentiality of records

8. Summary
• HRM from static to strategic
• Functions of HRM
• Strategic implications
• Ethical issues

9. What is HRM?
• HRM is concerned with the ‘people’ dimension in
management.
• Since every organization is made up of people, acquiring
their services, developing their skills, motivating them to
high levels of performance, and ensuring that they
continue to maintain their commitment to the
organization are essential to achieving organizational
objectives.

10. What is HRM?
HRM is the process of
• acquisition (recruitment, selection & socialization of employees),
• development (training – both skill development & changing attitude, MDP
and career development),
• Motivation (job satisfaction, performance appraisal, rewards, compensation
and benefits),
• maintenance (providing good working conditions, safety, health, welfare
and social security)
• and integration (grievance handling, discipline, unions, collective bargaining
and industrial relations)
of human resources.

11. Definition
• Gary Dessler defines HRM as the process of acquiring,
training, appraising and compensating employees, and of
attending to their labor relations, health and safety, and
fairness concerns.
• Human Resource Management is the function performed in
organizations that facilitates the most effective use of
employees to achieve organizational and individual goals.

12. History of HRM
• 5000 BC to 1785 AD
- Men at work was characterised by slavery and repression
(Construction of pyramids to the early years of the Industrial Revolution).
• Early 1900s
- The exemplary woks of Douglas McGregor, Abrahm Maslow and others
changed the situation and “welfare officers” and “welfare secretaries” were appointed.
• 1920s to 1930s (World War I)
- Labour Manager and Employment Manager
- Paid holidays and pensions

13. History of HRM
• World War II
- Enhanced the importance of personnel.
- Collective bargaining and industrial relations gained prominence.
- Human relations movement was shaping up.
- Emphasized that employees were motivated by social and psychological factors.
• 1960s to 1970s
- Public sectors employing specialists in personnel.
- Trade unions evolved in public sector.
- Demands on personnel managers grew in legal compliances.
- Motivation and OB, selection testing and management training emerged.

14. History of HRM
• Early 1980s
• HRM born as a field of study.
• Personnel departments are rechristened as Human
Resource Management
• Managements have started realizing that people costs
are very significant part of their budgeting.

15. History of HRM
• 1990s onwards.
• Increasing globalization, disruptive innovations, growth of
internet-enabled services, intense competition.
• Flat organizational structure, downsizing, outsourcing of HR
functions have changed the functioning of the organizations.
• Employers realized the importance of innovative and creative
employees who provide a sustainable competitive advantage by
virtue of their intellectual capital.

16. Evolution of HRM in India
• In India, HRM evolved since 1920s when the interests of
workers had to be protected due to the difficult conditions of
the World War I.
• The Royal Commission recommended the appointment of
Welfare Officers in 1931 to deal with recruitment and selection
and to settle employee grievances.
• The Factories Act, 1948 mandated appointment of welfare
officers in industrial establishments having more than 500
workers.
• IIPM in 1948 and NILM in 1950 were established. They were
merged and became NIPM in 1980.

17. Evolution of HRM in India
• Post independence, workers awareness and expectations
grew.
• The personnel function expanded during the 1960s.
• The growth of public sector spurred the need for
professional, personnel and industrial relations managers
during initial years of independence.
• The 1970s have shifted the focus of personnel
management from welfare to productivity.

18. Evolution of HRM in India
• The 1980s - Technology started playing a role.
• The 1990s witnessed the emergence of HRM.
• HRM role expanded to strategic HRM during the 1st
decades of 21st century.
• Since then, HR managers have dawned the roles of
HR Partner, HR Consultant, HR Strategist, HR
Integrator, HR Auditors, etc.

19. Evolution of HRM in India
Legal phase
• Compliance issues
• Firefighting issues
• As a policeman
Welfare phase
• Welfare administrator
• Appraiser, mediator, advisor
Development Phase
• Change agent, trainer, educator, integrator
HR as a source of competitive advantage
• Developer, counsellor, mentor, coach, problem solver
• A strategic partner

23. Line and Staff Functions
• Line functions:
The departments or employees of a firm that perform the core activities and contribute to its business directly.
Ex- Manufacturing and Marketing
• Staff functions:
Departments or employees that perform a support function and contribute indirectly to the business of a firm.
Ex- HRM and Finance
Line and Staff Authority of HR Manager
Authority:
Authority is the right to make decisions, to direct the work of others, and to give orders.
Managers generally distinguish between line authority and staff authority.
Line authority gives the manager the right to issue orders. Ex: Sales and Production.
Staff authority gives the manger the right to advise others in the organization and creates an advisory relationship.
Ex: HR, Finance and Accounting.

24. Line-Staff Conflict
• Complaints of Line Managers
 HR staff take up line authority
 HR function does not provide the right support
 HR staff try to steal the limelight
 HR staff do not see the whole picture
• Complaints of Staff Managers
 Line function is prejudiced and biased
 Line function does not understand the value of contributions of staff
 Line function does not know how to make effective use of HR function
 Line function is averse to experimentation
 HR function is not given enough freedom and power

25. Importance of HRM to all
Managers
• Human resources are an organization’s greatest asset and every
manager discharges some responsibilities for effective implementation
of a range of HR activities. Thus, HRM becomes an essential part of
all managers.
• The range of activities managers get involved in may vary but generally
include:-
Planning for workforce; analysing jobs and contributing to job design; playing an
active role in selecting employees; orienting employees; identifying training needs
and participating in training programs; appraising performance; compensation and
reward management; communication; motivation and employee engagement;
creating a sense of equity; employee health and safety; employee relationship
management; redressing employee grievances; managing diversity; union relations;
and gender sensitization.

27. Competencies for HR Manager
Some of the important competencies of HR Manager are:-
• Decisive thinker
• Personally credible
• Skilled influencer
• Collaborator
• Driven to deliver
• Courage to challenge
• Role model
• Curious

28. HR Compass
Generic Functional
Behaviou
ral
Generic Behavioural
• Strategic thinking and
alignment
• Change orientation
• Network management
Functional Behavioural
• Service orientation
• Personal credibility
• Execution excellence
Technica
l
Generic Technical
• Business Knowledge
• Financial perspective
Functional Technical
• Recruitment and selection
• Performance management
• Talent management
• Compensation and benefits
• Managing culture, design and
change
• Employee relation and
labour laws

29. Ulrich’s New HR Competency Model

30. Interrelation of HRM with other
functions

32. Strategy
Strategy is the determination of the basic long-term
goals and objectives of an organization and the
adoption of the courses of action and the allocation of
resources necessary for pursuing these goals.
Strategy deals with organizational objectives, goals,
action plans, and resources to gain advantage over its
competitors.

33. Levels of Strategy
Organizational theorists have classified strategies into
three levels:-
1) Corporate Strategies
2) Business Strategies
3) Functional Strategies

34. 1. Corporate Strategy
These are company-wide strategies and focus on what the organization intends
to do and which structure would enable it to reach there. The focus of the
strategy is long-term growth and survival and involves decisions related to
growth of the business in areas in which it intends to compete.
Ex: ITC Limited intending to foray into healthcare market through setting up
of corporate hospitals.
Depending on how the organizations intend to reach their goal, corporate
strategies can further be classified into:-
a) Restructuring Strategies
b) Growth Strategies
c) Stability Strategies.

35. a) Restructuring Strategies
Restructuring strategy is a solution to anticipating and managing
change. When an organization is not achieving its intended goals,
restructuring helps in trying to deal with the problem and helps in
managing change.
Restructuring strategies involve:-
i) Turnaround strategy focuses on restoring loss making
businesses profitable or viable. Action plans in this strategy
include retrenchment, eliminating unprofitable products, achieving
higher operational efficiency, repositioning the products, among
others.

36. a) Restructuring Strategies
ii) Divestiture strategy refers to an organization
disposing off some or all of its assets. It may involve
spinning off a business as an independent entity or outright
sale of the business.
iii) Liquidation is the most unpleasant and least
attractive strategy adopted by the organizations as it includes
selling off its assets leading to closure or winding up of the
business.
iv) Bankruptcy is a costly response to financial distress
of an organization.

37. b) Growth Strategies
• Growth of an organization is measured in terms of revenues, market
share, sales volume, number of customers serviced, new products added,
new markets, etc.
• Growth strategies are associated with employment creation, recruitment
and selection, raising wages, expanded training budgets, etc. depending on
how organizations pursue their growth options.
• There are two categories of growth:-
i) Inorganic growth: Growth through a partnership is referred to as inorganic growth
and consists of mergers and acquisitions.
ii) Organic growth: A growth strategy through increasing number of customers, revenue,
and overall business development is referred to as organic growth.

38. c) Stability Strategies
Some organizations may pursue stability strategy over
growth for various reasons. Small and medium-sized
enterprises may prefer to work in relatively stable
markets and may wish to maintain status quo due to
many constraints they encounter.
Companies may deliberately embrace this strategy when
they face adverse business environment and wait for
favourable conditions to chart a growth path.

39. 2) Business Strategies
• Business strategy is an action plan to build competitive
focus in single line of business.
• At the business unit level, the strategic issues are more
about developing and sustaining a competitive advantage
for the goods and services produced at the unit and less
about the coordination of various units of the corporate.
• A term that is commonly associated with business strategy
is strategic business unit (SBU), a unit within the
corporate entity having its goods and services for which
external market exists, and is different from another SBU
of the corporate.

40. 3) Functional Strategies
Functional level strategies for functions such as marketing,
production, human resource management, finance, etc.,
support the corporate and business strategies.
Two important roles played by functional strategies are –
- providing support to overall business strategies; and
- set out course of action about how functional
managers will work for enhanced performance in
their respective functional areas.

42. Strategic Planning
Strategic Planning involves establishing organization’s
mission, vision and values; develops desired objectives;
analyses the business environment in which it operates;
identifies its competitive advantage and establishes it
competitive position; implements the strategy
formulated and finally evaluates its attainment of goals.

43. Strategic HRM
Strategic HRM is an approach to manage human
resources for achieving competitive advantage for the
organization’s products and services by aligning HR
philosophies, policies and practices with organizational
philosophies, policies and practices.
Alignment of policies ensures that organization is not
pulled in different directions and there is a
commonality of goal attainment.

44. Need for Alignment
Alignment in principle means that every aspect of an
organization’s activities should be integrated and directed
towards the attainment of goals.
This would mean a state of agreement and cooperation
among individuals and groups with the purpose
philosophies, policies, practices and procedures to achieve
the organizational goals.
Aligning HRM with the business strategy implies
demonstrating the value contributed by HRM to the
organizational goals.

45. Aims of SHRM
Generating strategic capabilities by ensuring that the
organization has adequate, committed, skilled and motivated
workforce needed to achieve sustained competitive
advantage is the main objective of strategic HRM.
The rationale for strategic HRM is developing planned
approaches to employee management for meeting long-term
organizational and individual requirements that would help
in achieving competitive advantage.
The critical success factor related to people are addressed by
strategic HRM.

46. Theories of Strategic HRM
Although strategic HRM is more application oriented, it
is important to understand the theoretical basis that
allows us to predict and understand the effects of HR
practices on organizational functioning.
There are three main kinds of theories:-
1) Universalistic theory
2) Contingency theory
3) Configurational theory

47. 1. Universalistic theory
The universalistic theory is based on the premise that there
exists a relationship between HRM practices and
organizational performance. Its proposition is that when
organizations adopt and implement best practices, it would
contribute positively to organizational performance
regardless of the strategic goals of the organization and the
circumstances in which it is operating.
Further, this theory assumes that the best HRM practices
effect the employee motivation and the organizational
efficiency.
Internal fit is the key to universalistic theory.

48. 2) Contingency theory
The contingency theory proposed that HRM practices
of organization need to be adapted to the
organizational business strategy. The interaction
between the firm strategy and HRM derives higher
organizational performance.
Contingency theory promotes the employee behaviours
consistent with the business strategy.

49. 3) Configurational theory
The configurational theory combines both universal
and contingency which is seen as the basis for
maintaining and increasing organizational as well as
individual performance.

50. Linking Corporate and HR Strategies

51. Competitive Challenges and
Human Resources Management
• Top challenges include:
 Responding Strategically to Changes in the Marketplace
 Competing, Recruiting, and Staffing Globally
 Setting and Achieving Corporate Social Responsibility
and Sustainability Goals
 Advancing HRM with Technology
 Containing Costs While Retaining Top Talent and
Maximizing Productivity
 Responding to the Demographic and Diversity
Challenges of the Workforce
 Adapting to Educational and Cultural Shifts Affecting
the Workforce