The document discusses the strategic role of human resource management. It notes that HRM now plays a critical role in bridging gaps between employee expectations and organizational requirements by adopting appropriate strategies and practices. The objectives of HRM are to achieve organizational goals, meet employee expectations, and develop employee skills and abilities while managing human resources ethically. HRM is evolving from an administrative role to a more strategic role.
2. Competing through People
‘You can get capital and erect buildings, but it
takes people to build a business’-Thomas J.
Watson, founder IBM
‘If you are not thinking all the time about
making every person valuable, you don’t
have a chance’-Jack Welch, former head of
GE.
3. 1-2
Introduction
Organisations have to provide a healthy work climate in order to get
the best out of people. To utilise the capabilities of people fully, you
need competent leadership willing to recognise, reward and nurture
talent at all levels. This is where human resource managers play a
critical role by bridging gaps between employee expectations and
organisational requirements by adopting appropriate human resource
strategies and practices. HRM, in short, is the art of procuring,
developing and maintaining competent workforce to achieve the
goals of an organisation in an effective and efficient manner.
The Strategic Role Of Human Resources Management
4. 1-3
Human Resource Management:
Nature & Features
Pervasive force
Action oriented
Individually oriented
People oriented
Future oriented
Development oriented
Integrating mechanism
Comprehensive function
Auxiliary service
Inter-disciplinary function
Continuous function
The Strategic Role Of Human Resources Management
5. 1-4
Important terms
Clearing the Fog
Human resource: Knowledge, skill sets, expertise of employees, the
adaptability, commitment and loyalty of employees.
Skills: The individual abilities of human beings to perform a piece of work.
Resource: The stock of assets and skills that belong to a firm at a point of
time.
Capability: The ability of a bundle of resources to perform an activity; a way of
combining assets, people and processes to transform inputs into outputs.
Core competencies: Activities that the firm performs especially well when
compared to its competitors and through which the firm adds value to its goods
and services over a long period of time.
Competitive advantage: It comes from a firm's ability to perform activities
more distinctively and more effectively than rivals. To attain competitive
advantage, firms need to add value to customers and offer a product or
service that cannot be easily imitated or copied by rivals (Uniqueness).
Value: Sum total of benefits received and costs paid by the customer in a given
situation.
The Strategic Role Of Human Resources Management
6. 1-5
Scope of HRM
HRM mainly covers three broad areas
Personnel aspect
Welfare aspect
Industrial relations aspect
The Strategic Role Of Human Resources Management
7. 1-6
Objectives of HRM
HRM aims at achieving organisational goals, meet the expectations
of employees; develop the knowledge, skills and abilities of
employees; improve the quality of working life and manage human
resources in an ethical and socially responsible manner.
Importance of HRM
From an organisational standpoint, good HR practices help in
attracting and retaining talent, train people for challenging roles,
develop their skills and competencies, increase productivity and
profits and enhance standard of living
The Strategic Role Of Human Resources Management
8. 1-7
Importance of HRM
attract and retain talent
train people for challenging roles
develop skills and competencies
promote team spirit
Good HR Practices help
develop loyalty and commitment
increase productivity and profits
improve job satisfaction
enhance standard of living
generate employment opportunities
The Strategic Role Of Human Resources Management
9. 1-8
HRM as a central subsystem in an
organisation
Product
Subsystem
HR Subsystem
Procurement
Finance Training Marketing
Subsystem Compensation Subsystem
Appraisal
Rewards
Technical
Subsystem
The Strategic Role Of Human Resources Management
10. 1-9
Functions of HRM
P/HRM
Managerial Operative Functions
functions:
Procurement Development: Motivation and Maintenance: Emerging
– Planning Integration:
Compensation: Issues:
Job Analysis Training Grievances
Job design Health Personnel
HR planning Executive records
Work scheduling Discipline
– Organising Recruitment development
Safety Personnel
Motivation Teams and
Selection Career teamwork audit
planning Job evaluation Personnel
Placement Welfare Collective
Succession Performance and research
– Directing bargaining
Induction potential HR
appraisal Social security Participation accounting
Internal planning
mobility Compensation Empowerment HRIS
– Controlling Human administration
resources Trade unions Job stress
development Incentives
benefits and Employers’ Mentoring
strategies
services associations International
HRM
Industrial
relations
The Strategic Role Of Human Resources Management
11. 1-10
Strategic Human Resource
Management
Competitive advantage through people?
Competitive advantage allows a firm to gain an edge over its rivals
when competing. It comes from a firm’s unique ability to perform
activities more distinctively and more effectively than rivals. HR can
be a source of competitive advantage when the talents of people
working in the firm are valuable, rare; difficult to imitate and well
organised to deliver efficient and effective results.
The Strategic Role Of Human Resources Management
12. 1-11
The evolving strategic role of
Human Resource Management
Strategic focus
Strategic partner Change agent
System People
Administrative expert Employee champion
Operational focus
The Strategic Role Of Human Resources Management
13. 1-12
Strategic Human Resource
Management
Realising the growing importance of HR, a new line of thinking
emerged elevating the status of HR to that of a strategic partner both
in the formulation of a firm’s strategic as well as in the implementation
of business activities. SHRM, simply stated, is the linkage of HRM
with strategic goals and objectives with a view to improve business
performance and develop organisational cultures that foster
innovation and flexibility. Strategic HR differs radically from traditional
HR in a number of ways:
The Strategic Role Of Human Resources Management
14. 1-13
Traditional HR vs. Strategic HR
Point of distinction Traditional HR Strategic HR
Focus Employee Relations Partnerships with internal and
external customers
Role of HR Transactional change Transformational change leader
follower and respondent and initiator
Initiatives Slow, reactive, fragmented Fast, proactive and integrated
Time horizon Short-term Short, medium and long (as
required)
Control Bureaucratic-roles, policies, Organic-flexible, whatever is
procedures necessary to succeed
Job design Tight division of labour; Broad, flexible, cross-training
independence, teams
specialisation
Key investments Capital, products People, knowledge
Accountability Cost centre Investment centre
Responsibility for HR Staff specialists Line managers
The Strategic Role Of Human Resources Management
15. 1-14
EVOLUTION OF HRM
The field of HRM evolved both in India and elsewhere over a
number of years to present level of sophistication and use of
proactive methods
The industrial revolution
Scientific management
Trade unionism
Human relations movement
Human resources approach
The Strategic Role Of Human Resources Management
16. 1-15
Evolution of the Personnel Function
Concept What is it all about?
The Commodity Labour was regarded as a commodity to be bought and sold.
concept Wages were based on demand and supply. Government did
very little to protect workers.
The Factor of Labour is like any other factor of production, viz, money,
Production concept materials, land, etc. Workers are like machine tools.
The Goodwill concept Welfare measures like safety, first aid, lunch room, rest room
will have a positive impact on workers’ productivity
The Paternalistic Management must assume a fatherly and protective attitude
concept/ Paternalism towards employees. Paternalism does not mean merely
providing benefits but it means satisfying various needs of the
employees as parents meet the requirements of the children.
Cont…
The Strategic Role Of Human Resources Management
17. 1-16
Evolution of the Personnel Function
The Humanitarian To improve productivity, physical, social and psychological
concept needs of workers must be met. As Mayo and others stated,
money is less a factor in determining output, than group
standards, group incentives and security. The organisation is a
social system that has both economic and social dimensions.
The Human Resource Employees are the most valuable assets of an organisation.
concept There should be a conscious effort to realise organisational goals
by satisfying needs and aspirations of employees.
The Emerging concept Employees should be accepted as partners in the progress of a
company. They should have a feeling that the organisation is
their own. To this end, managers must offer better quality of
working life and offer opportunities to people to exploit their
potential fully. The focus should be on Human Resource
Development.
The Strategic Role Of Human Resources Management
18. 1-17
Growth in India
Legal phase
Welfare phase
Development phase
The Strategic Role Of Human Resources Management
19. 1-18
Personnel Function in India;
Changing Scenario
Period Emphasis Status Roles
1920 – 30 Welfare management Clerical Welfare
Paternalistic practices administrator
1940 – 60 Expanding the role to cover Administrative Appraiser
Labour, Welfare, Industrial Advisor
Relations and Personnel Mediator
Administration Legal advisor
Fire fighting
1970 – 80 Efficiency, effectiveness Developmental Change agent
dimensions added Integrator
Emphasis on human Trainer
values, aspirations, Educator
1990s – Incremental productivity Proactive, Developer
onwards gains through human growth-oriented Counsellor
assets Coach
Mentor
Problem solver
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20. 1-19
Shifts in HR management in India
Traditional HR practice Emerging HR practice
Administrative role Strategic role
Reactive Proactive
Separate, isolated from Key part of organisational
company mission mission
Production focus Service focus
Functional organisation Process-based organisation
Individuals encouraged, Cross-functional eams,
singled out for praise, teamwork most important
rewards
People as expenses People as key
investments/assets
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21. 1-21
HRM in the new millennium
Current thinking in HRM strongly supports the view that when
opportunities for growth and enhancement of skills are available in an
organisation, people will be stimulated to give their best, leading to
greater job satisfaction and organisational effectiveness. To this end,
therefore, HR managers in the new millennium are expected to
successfully evolve an appropriate corporate culture, take a strategic
approach to the acquisition, motivation and development of human
resources and introduce programmes that reflect and support the
core values of the organisation and its people.
Size of work force
Demands for better pay, benefits, working conditions
Cont…
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22. 1-21
HRM in the new millennium
Composition of workforce
Equal pay for equal work
Breaking down of glass ceiling
Constitutional protection to minority groups
Importance to factors such as age, sex, religion, region, caste especially while
dealing with multifarious, heterogeneous, culturally diverse work groups
Employee expectations
Better educated, more knowledgeable, emotionally strong and demanding
workforce
Demand for educated, trained, experienced and knowledgeable workers growing
Understand individual differences and develop appropriate policies to meet their
growing expectations.
Cont…
The Strategic Role Of Human Resources Management
23. 1-23
HRM in the new millennium
Changes in technology
Modernisation, computerisation, sophistication increasing by the day
Knowledge and skills need to be refined constantly
Training, retraining and mid-career counselling important
Equip employees so as to cope with dramatic challenges brought forward by rapid
advances in science and technology
Life style changes
Environmental challenges
Personnel function in future
Job redesign
Career opportunities
Productivity
Recruitment and selection
Training and development
Rewards
Safety and welfare Cont…
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24. 1-23
HRM in the new millennium
Changes in 21st century affecting HRM
HR as a springboard for success
Talent hunting, developing and retraining
Lean and mean organisations
Labour relations
Health and benefit programmes
The Strategic Role Of Human Resources Management