Excel Books

1 1
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Chapter
The Strategic Role of
Human Resource Management
Excel Books
1 2
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Hire the best. Pay them fairly. Communicate freely.
Provide challenges and rewards. Get out of their way. Theyll knock your
socks off.
- Mary Ann Allison
Excel Books
1 3
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Nature of HRM
It is the art of procuring, developing and maintaining competent workforce to
achieve the goals of an organisation in an effective and efficient manner.
Excel Books
1 4
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao


HRM Features
Pervasive force
Action oriented
Individually oriented
People oriented
Future oriented
Development oriented
Integrating mechanism
Comprehensive function
Auxiliary service
Interdisciplinary function
Continuous function
Excel Books
1 5
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Scope of HRM
Personnel aspect
Welfare aspect
Industrial relations aspect
Excel Books
1 6
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Objectives of HRM
1. To help the organisation reach its goals
2. To employ the skills and abilities of the workforce efficiently
3. To provide the organisation with well-trained and well-motivated
employees
4. To increase to the fullest the employees job satisfaction and self-
actualization
5. To develop and maintain a quality of work life
6. To communicate HR policies to all employees.
7. To be ethically and socially responsive to the needs of society
Excel Books
1 7
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Importance of HRM
1. At the enterprise level
2. At the individual level
3. At the society level
4. At the national level
Excel Books
1 8
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Competitive Advantage
1. Superiority
2. Inimitability
3. Durability
4. Non-substitutability
5. Appropriability
Excel Books
1 9
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Strategic Human Resources Management (SHRM)
SHRM is built around three important propositions: (M. Armstrong 34-45)
The human resources of a firm are a major source of competitive
advantage; in a way, people can make or break an organisation.
Successful organisational performance depends on a close fit between
business and human resource strategy (vertical fit).
Individual HR strategy should cohere by being linked to each other to
offer mutual support (horizontal fit).
Cont.
Excel Books
1 10
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
External
Environment
Competition
Government Policy
Technology
Market Trends
Economic Factors
Business Strategy
Internal Environment
Culture
Structure
Policies
Skills
Past Strategy
Laws Regulating
Employment
HR Strategy
HR Planning
Design of jobs and
work systems
What workers do
What workers need
How jobs interface
with others
HR Information
Systems
Procurement


Development


Performance
Management


Compensation


Labour relations
Outcomes

Increased
Performance


Customer
Satisfaction


Employee
Satisfaction


Enhanced
Shareholder
Value
Corporate
Strategy
A Model of Strategic Human Resources Management
Cont.
Excel Books
1 11
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Point of Distinction Traditional HR Strategic HR
Traditional HR versus Strategic HR
Focus Employee Relations Partnerships with internal and
external customers
Role of HR Transactional change follower and
respondent
Transformational change leader and
initiator
Initiatives Slow, reactive, fragmented Fast, proactive and integrated
Time horizon Short-term Short, medium and long (as required)
Control Bureaucratic-roles, policies,
procedures
Organic-flexible, whatever is
necessary to succeed
Job design Tight division of labour; independence,
specialization
Broad, flexible, cross-training teams
Key investments Capital, products People, knowledge
Accountability Cost centre Investment centre
Responsibility for HR Staff specialists Line managers
Excel Books
1 12
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
History of Personnel/Human Resource Management
(P/HRM)
1. The industrial revolution
2. Scientific management
3. Trade unionism
4. Human relations movement
5. Human resources approach
Excel Books
1 13
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Concept What is it all about?
The Commodity concept Labour was regarded as a commodity to be bought and sold. Wages were based on
demand and supply. Government did very little to protect workers.
The Factor of Production concept Labour is like any other factor of production, viz, money, 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 concept/ Paternalism Management must assume a fatherly and protective attitude 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.
The Humanitarian concept To improve productivity, physical, social and psychological 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 concept Employees are the most valuable assets of an organisation. 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.
Evolution of the Personnel Function
Excel Books
1 14
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Traditional HR practice Emerging HR practice
Administrative role
Reactive
Separate, isolated from company
mission
Production focus
Functional organisation
Individuals encouraged, singled
out for praise, rewards
People as expenses

Strategic role
Proactive
Key part of organisational mission
Service focus
Process-based organisation
Cross-functional teams, teamwork
most important
People as key investments/assets

Shifts in HR Management in India
Excel Books
1 15
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Case Study
Excel Books
1 16
Copyright 2010, VSP Rao
CH-1
The Strategic Role of Human Resource Management
Human resource Management (3
rd
Edition) V S P Rao
Southwest Airlines:
Wall Streets Cinderella Story