MBA G510 - Chapter 1 Introduction To HRM

Human Resource Management
MBA G510
BITS Pilani Dr. Jayashree Mahesh,
Department of Management, BITS Pilani.
Pilani|Dubai|Goa|Hyderabad
Why You’re Here with Me
• Course title: Human Resource Management (HRM)
• What do you think HRM is?
• How does HRM fit into the organization?
– It’s a department (boring)
– It’s a way of solving problems that affect every aspect of the
organization (interesting!)
• Course mission statement:
– Students will learn the fundamentals of how human
resources are managed so they can:
(A) learn how to succeed in their careers and
(B) help the organizations where they work succeed.
2
BITS Pilani, Deemed to be University under Section 3 of UGC Act, 1956
A Quick Quiz on HR
1. When hiring employees, is it better to hire people who you judge to be
hard working, organized, and dedicated during a traditional interview,
or is an IQ test a better way to pick people?
2. Is it better to hire people based on the fit of their values with the
company’s values, or is an IQ test better?
3. True or false--Asking applicants about stealing or other negative
behavior at work during an interview doesn’t help you find better
employees, because most people who are going to do bad things at
work just lie.
4. True or false--If employees participate in decision making they will be
more motivated than if top management sets performance goals?
5. True or false—Managers may think their employees are really
concerned about compensation, but when it comes down to it, money
doesn’t really matter that much to most people.
3
What Can We Learn?
– A majority of HR managers get most of them

wrong!
– Major problem—most HR managers learn
through following other people’s leads
without a system
4
Learning Outcomes
1. Explain what human resource management is and how it
relates to the management process.
2. Show with examples why human resource management is
important to all managers.
3. Illustrate the human resources responsibilities of line and staff
(HR) managers.
4. Briefly discuss and illustrate each of the important trends
influencing human resource management.
5. List and briefly describe important trends in human resource
management.
6. Define and give an example of evidence-based human
resource management.
7. Outline the plan of this book. 5
Importance of People
»Our Vision and Mission
»At Capgemini, we live and breathe the
philosophy that people matter and results
count
• Our Vision: the business value of technology comes from and
through people
• Capgemini understands that business value cannot be achieved through
technology alone. It starts with people: experts working together to get to
the heart of your individual business objectives and develop the most
adapted solutions to fit these requirements. We believe this human-
centered approach to technology is what makes the difference for your
business.
6
• Our Mission: with you, we create and deliver business and technology
solutions that fit your needs and drive the results you want
• Capgemini enables you to transform your organization and improve
performance. We aim to empower you to respond more quickly and
intuitively to changing market dynamics. By bolstering your ability to
harness the right technology, we help you become more agile and
competitive.
• Collaboration is central to the way we do business. Our experts join forces
with your people to form a cohesive team. More than just a promise, our
capacity to collaborate has become a key client expectation. We call this
approach the Collaborative Business Experience®. It shows in our every
interaction and is our way of forging closer, more effective relationships.
People matter, results count.

7
Adjudged “best employer of the year”
by number of leading HR surveys.
Why??
8
Significance of Human Resources
Infosys' Vision:
"To be a globally respected corporation that provides best-of-breed business

solutions, leveraging technology, delivered by best-in-class people."
Infosys' Mission
"To achieve our objectives in an environment of fairness, honesty, and courtesy

towards our clients, employees, vendors and society
To ensure anywhere and any time banking for the customer with latest state-of-
the-art technology and by developing effective customer centric relationship and
to emerge as a world-class service provider through efficient utilization of Human
Resources and product innovation.
- Allahabad Bank
9
Common Statements
• There is unlimited people potential that is untapped..
• The universal challenge is getting results through

people….
• Acquiring ,developing and maintaining human talent

and building human capital….
• Its people that lend competitive advantage …….
10
Uniqueness of Human Resource
• Only assets that appreciate over a period of time.
• Alone can produce an output larger than the input.
• Provide utility value to each physical assets.
• The flexibility of an organization depends more on
people than on any technical factors.
11
Competitive Advantage through
People
• Core Competencies
– Integrated knowledge sets within an organization that
distinguish it from its competitors and deliver value to
customers.
• Sustained competitive advantage through
people is achieved if these human resources:
– Have value.
– Are rare and unavailable to competitors.
– Are difficult to imitate.
– Are organized for synergy.
12
Human Resource Management at Work
Organization
– People with formally assigned roles who work together to
achieve the organization’s goals.
Manager
– The person responsible for accomplishing the organization’s
goals, and who does so by managing the efforts of the
organization’s people.
What Is Human Resource Management (HRM)?
– The process of acquiring, training, appraising, and compensating
employees, and of attending to their labor relations, health and
safety, and fairness concerns.
– HRM is concerned with policies and practices that ensure the
best use of ‘human resources’ for fulfilling the individual and
organizational goals.
13
The Management Process
Planning
Controlling Organizing
Leading Staffing
14
Meaning of HRM
 HRM is a management function that helps
organisation to recruit, select, train, develop and
manage its members.
 Simply stated, HRM is all about management of
people in the organisation from Recruitment to
Retirement.
 HRM refers to set of programs, functions, and
activities designed and carried out in order to
maximise both employee as well as organisational
effectiveness
15
HRM: Few Definitions
“ Personnel management ,or Human resource management is
the planning, organising, directing and controlling of the
procurement, development, resources to the end that individual
and societal objectives are accomplished.
- Edwin B. Flippo
“HRM is a series of integrated decisions that form the

employment relationship; their quality contributes to the ability
of the organizations and the employees to achieve their
objectives.”
- George T. Milkovich and John W. Boudreau
16
A Basic Mental Map for HR
What HR Do You Need to Make a Company Work?
• Tell me a few things that are typically the

responsibility of the HR department
• Consider how HR would be involved in the following
corporate actions:
– Plans to change strategic focus from being a cost leader to a
quality leader
– Plans to expand into a new market
– Preparing to implement a new software or hardware
computer system
17
Functions of HRM
HRM
Functions
Managerial Functions
Operative Functions
- Planning
- Organizing
- Procurement
- Staffing - Development
- Directing - Compensation
- Controlling - Maintenance & Motivation
- Integration
- Industrial Relations
18
A Glance at HRM
Alignment of HR
People Related policies and practices
Functions (Administrative & with organization’s
Supportive)
strategies
People Management
19
Personnel Aspects of a Manager’s Job
• Conducting job analyses
• Planning labor needs and recruiting job candidates
• Selecting job candidates
• Orienting and training new employees
• Managing wages and salaries
• Providing incentives and benefits
• Appraising performance
• Communicating
• Training and developing managers
• Building employee commitment
20
Personnel Mistakes
• Hire the wrong person for the job
• Experience high turnover
• Have your people not doing their best
• Waste time with useless interviews
• Have your company in court because of discriminatory actions
• Have your company cited by OSHA for unsafe practices
• Have some employees think their salaries are unfair and
inequitable relative to others in the organization
• Allow a lack of training to undermine your department’s
effectiveness
• Commit any unfair labor practices
21
Line and Staff Aspects of HRM
• Line manager: A manager who is authorized to direct
the work of subordinates and is responsible for
accomplishing the departmental goals and corporate
objectives.
- Production Manager
- Purchase Manager
- Sales Manager
• Staff manager :A manager who assists and advises

line managers.
22
Line- Staff Responsibilities of HR Managers
23
Human Resource Managers’ Duties
Line Function
Coordinative Function
Line Authority
Functional Authority
Implied Authority
Functions of
HR Managers
Staff Functions
Staff Authority
Innovator
Employee Advocacy
24
Line Managers’ HRM Responsibilities
1. Placing the right person on the right job
2. Starting new employees in the organization (orientation)
3. Training employees for jobs that are new to them
4. Improving the job performance of each person
5. Gaining creative cooperation and developing smooth working
relationships
6. Interpreting the firm’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
10. Protecting employees’ health and physical condition
25
What does HRM cover?
Co-ordination and responsibility for…
• Recruitment
• Team working
• Participation & Involvement
• Promotion
• Culture change Competent
• Retention and willing
workforce
• Development Support
• Equal Opportunities training
• Discipline
Organizational
• Employee Disputes Goals
26
A Basic Mental Map for HR
What HR Do You Need to Make a Company Work?
Develop an Overarching Strategy
•What does the company do, with whom are they competing, what makes this company unique?
Train and Compensation Performance

Acquire Staff Develop and Benefits management
•Who makes a good •Can we help new •How can we match •What are the things
employee? hires feel like part of our pay offers to the that motivate
the company? market? employees at work?
•How do we get
these people to •How do we teach •How do we pay •What prevents
apply? employees the skills people who are employees from
they need? working in different performing
•How are people
screened? •How do we job levels? effectively?
encourage civility? •What types of non- •Are there incentives
•How are people
selected? •How do we measure cash benefits can we that we should be
performance? offer to employees? offering?
27
Organization of HR Department- Part A
Place of HR Department in Organization: Small- Scale Unit
Owner/
Manager
Office Manager- Manager-

Accountant
Manager Production Sales
Personnel
Assistant
28
Organization of HR Department
Place of HR Department in Organization: Large- Scale Unit
Chairman/
Managing Director
Director- Director- Director- Sales Director-

Director- R & D
Personnel/ HR Production & Marketing Finance
29
Organization of HR Department- Part B
Composition of HR/ Personnel Department
Director-
HRM
Manager- Manager-
Manager- Manager-
Industrial
Personnel Administration HRD Relations IRs
- Public Relations
- HR Planning
- Canteen
- Hiring - Appraisal
- Medical
- Handling - Training & Growing Trend
Grievances - Welfare Development
towards-
- Compensation - Transport
Outsourcing/
- Legal
Subcontracting
HR Activities
30
Human Resource Specialties
Recruiters
Employment/
Industrial Human Resource
Relations Development
Specialist Human Specialists
Resource
Specialties
Training
Job Analysts
Specialists
Compensation Employee Welfare

Managers Officers
31
New Approaches to Organizing HR
New HR Services Groups
Transactional HR Corporate Embedded Centers of

group HR group HR unit Expertise
32
Basic HR Concepts
The bottom line of managing:
Getting results
• HR creates value by engaging in activities that produce
the employee behaviors that the organization needs to
achieve its strategic goals.
• Looking ahead: Using evidence-based HRM to measure
the value of HR activities in achieving those goals.
33
Trends Shaping Human Resource
Management
Globalization
and Competition
Trends
Indebtedness
(“Leverage”) and Technological
Deregulation Trends
Trends in HR
Management
Workforce and
Trends in the
Demographic
Nature of Work
Trends
Economic
Challenges and
Trends
34
Trends in the Nature of Work
Changes in How We Work
High-Tech Service Knowledge Work

Jobs Jobs and Human Capital
35
Workforce and Demographic Trends
Demographic Trends
Generation “Y”
Trends Affecting
Human Resources
Retirees
Nontraditional Workers
36
Competitive Challenges and
Human Resources Management
• The most pressing competitive issues facing
firms:
1. Going global
2. Embracing new technology
3. Managing change
4. Managing talent, or human capital
5. Responding to the market
6. Containing costs
37
Challenge 1: Going Global
• Globalization
– The trend toward opening up foreign markets to
international trade and investment
• Impact of globalization
– “Anything, anywhere, anytime” markets
– Partnerships with foreign firms
– Lower trade and tariff barriers
• NAFTA, EU, APEC trade agreements
• WTO and GATT
38
Challenge 1: Going Global (cont’d)
• Corporate Social Responsibility
– The responsibility of the firm to act in the best interests
of the people and communities affected by its activities
• Impact on HRM
– Different geographies, cultures, laws, and
business practices
– Issues:
• Identifying capable managers and workers
• Developing foreign culture and work practice training
programs.
• Adjusting compensation plans for overseas work
39
Challenge 2: Embracing New
Technology
• Knowledge Workers
– Workers whose responsibilities extend beyond the
physical execution of work to include planning,
decision making, and problem solving.
• Knowledge-Based Training
• Online instruction
• “Just-in-time” learning via the Internet
on company intranets
40
Influence of Technology in HRM
• Human Resources Information System (HRIS)
– A computerized system that provides current and accurate
data for the purposes of control and decision making.
– Benefits:
• Store and retrieve of large quantities of data.
• Combine and reconfigure data to create new information.
• Institutionalization of organizational knowledge.
• Easier communications.
• Lower administrative costs, increased productivity and
response times.
41
Challenge 3: Managing Change
• Types of Change
– Reactive change
• Change that occurs after external forces have already
affected performance
– Proactive change
• Change initiated to take advantage of targeted
opportunities
• Managing Change through HR
– Formal change management programs help to
keep employees focused on the success of the
business.
42
Challenge 4: Managing Talent, or
Human Capital
• Human Capital
– The knowledge, skills, and capabilities of
individuals that have economic value to an
organization.
– Valuable because capital:
• is based on company-specific skills.
• is gained through long-term experience.
• can be expanded through development.
43
Challenge 5: Responding to the
Market
• Total Quality Management (TQM)
– A set of principles and practices whose core ideas
include understanding customer needs, doing
things right the first time, and striving for
continuous improvement.
• Six Sigma
– A process used to translate customer needs into a
set of optimal tasks that are performed in concert
with one another.
44
Challenge 5: Responding to the
Market (cont’d)
• Reengineering and HRM
– Fundamental rethinking and radical redesign of
business processes to achieve dramatic
improvements in cost, quality, service, and speed.
• Requires that managers create an environment for
change.
• Depends on effective leadership and communication
processes.
• Requires that administrative systems be reviewed and
modified.
45
Challenge 6: Containing Costs
• Downsizing
– The planned elimination of jobs (“head count”).
– Layoffs
• Outsourcing
– Contracting outside the organization to have work
done that formerly was done by internal employees.
• Offshoring
– The business practice of sending jobs to other
countries.
46
FIGURE 1–4 Trends Shaping Human Resource Management
47
Meeting Today’s HRM Challenges
The New Human Resource

Managers
Acquire broader
Find new ways to
Focus more on business
provide
“big picture” knowledge and
transactional
(strategic) issues new HRM
services
proficiencies
48
High-Performance Work Systems
• Increase productivity and performance by:
– Recruiting, screening and hiring more effectively
– Providing more and better training
– Paying higher wages
– Providing a safer work environment
– Linking pay to performance
49
Evidence-Based HRM
Providing Evidence for

HRM Decision Making
Actual Existing Research

measurements data studies
50
Managing Ethics
• Ethics
– Standards that someone uses to decide what
his or her conduct should be
• HRM-related Ethical Issues
– Workplace safety
– Security of employee records
– Employee theft
– Affirmative action
– Comparable work
– Employee privacy rights
51
HR Certification
• HR is becoming more professionalized.
• Society for Human Resource Management
(SHRM)
– SHRM’s Human Resource Certification Institute
(HRCI)
• SPHR (Senior Professional in HR) certificate
• GPHR (Global Professional in HR) certificate
• PHR (Professional in HR) certificate
52
Objectives of HRM
• To act as a liaison between the top management and the
employees
• To arrange and maintain adequate manpower inventory, which, in
turn ensures smooth working of the organization.
• To offer training as a way of developing skills, enhancing
productivity and increasing individual and organizational
performance.
• To devise employee benefit schemes for improving employee
motivation and group morale and enhancing employer- employee
co-operation.
• To ensure and enhance the quality of work- life (employees’
perception of their physical and psychological well- being at work)
• To help kelp up ethical values and behaviour amongst employees
both within and outside the organization.
53
People – A Source of Firm’s Competitive Advantage
1) People offer skills, capabilities, systems, practices and behaviors
which help execute firm’s strategies successfully.
2) By aligning HR plans to business plans, HR managers become
strategic partners.
3) Innovation is the key to competitive advantage and people are
sources of innovation.
4) HR function seeks to convert an adverse situation into an
opportunity (e.g. Performance review- outcome).
5) Changes in organizational structure (designs) due to
environmental changes becomes successful only through
innovative HRM Strategies.
6) HR manager plays a role of an effective ‘change agent’.
54
The Plan of This Book: Basic Themes
• HRM is the responsibility of every manager.
• The workforce is becoming increasingly diverse.
• Current economic challenges require that HR managers
develop new and better skills to effectively and efficiently
deliver and manage HR services.
• The intensely competitive nature of business today means
human resource managers must defend their plans and
contributions in measurable terms.
55
FIGURE 1–10 Strategy and the Basic Human Resource Management Process
56
HRM in India
In the 1970s and 1980s typical HRM functions in organization
included:
• Personnel and administration
• Industrial relations
• Labor welfare
Up to the mid-80s human resource management in Indian
organizations grew through various phases under the
influence of the following factors:
• A philanthropic viewpoint about doing good for workers
• A legislative framework
• Government policies
• Trade unions
• Emerging trends/concepts in management
• Changes in the economy 57
HRM
PERSONNEL
• It precedes HRM. • It is the latest development in the
• Contractual Employment. evolution of Management of men.
• All round development of
Employees.
• Piecemeal initiative. • Integrated initiative.
• Decision making is slow. • Decision making is fast.
• Fixed Remuneration • Performance based remuneration
• Collectivist • Individualist
• Collective negotiation • Direct negotiation from
organization to employee
• People mgt activities viewed as
• All functions integrated into
separate functions
unified strategy
• Administrative Role • Strategic Role
• Cost Minimization • Resource Maximization
58
Management Challenges for Indian
CEOs
A study among Indian CEOs identified the
following challenges:
– Creating a high-performance culture
– Retaining talent
– Recruiting
– Moving from a patriarchic and hierarchical management
style to a more team-based, informal organizational
culture
– Linking training with performance
– Compensating knowledge workers
– Building interpersonal relationships/managing conflict
– Going global
Source: Aneeta Madhok, “Similar Challenges” cited by Robert J. Grossman in “HR’s Rising Star in India,” available at http://www.shrm.org/india.
59
Shift to Human Resource Development
Orientation
– The 1980s saw the large-scale introduction of
the developmental concept in Indian
organizations
– Udai Pareek and T. V. Rao, faculty of IIM
Ahmedabad, introduced the human resource
development (HRD) concept in India
60
Total Human Resource Management
– Opening up of the Indian economy created a demand for
talent and the traditional organizations (both in public and
private sectors) became talent sources.
– Development of the Information Technology sector mobilized
a vast pool of technically trained people.
– Massive staffing requirements saw recruitment evolving as
very specialized function, separate from but closely interlinked
with the other HRM functions.
– Arrival of the “knowledge worker”—well-skilled,
individualistic, and ambitious about career caused attrition to
become common.
61
Total Human Resource Management
(Contd.)
– Introduction of IT-supported solution, particularly ERP-based
human resource information systems
– Introduction of innovative HR practices.
– Rise of IT-enabled services (ITES), gave employment
opportunities to the young English speaking, educated
population.
– HRM function assumed a strategic role in Indian organizations,
responding to business requirements in an appropriate way.
62
KEY TERMS
organization
manager
management process
human resource management (HRM)
authority
line authority
staff authority
line manager
staff manager
functional authority
globalization
human capital
63
Case for Discussion: Jack Nelson's
Problem
1. What do you think was causing some of the problems in
the bank home office and branches?
2. Do you think setting up an HR unit in the main office would
help?
3. What specific functions should it carry out? What HR
functions would then be carried out by supervisors and
other line managers? What role should the Internet play in
the new HR organization?
64

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Human Resource Management

– A majority of HR managers get most of them

People matter, results count.

"To be a globally respected corporation that provides best-of-breed business

"To achieve our objectives in an environment of fairness, honesty, and courtesy

• The universal challenge is getting results through

• Acquiring ,developing and maintaining human talent

• Its people that lend competitive advantage …….

• Alone can produce an output larger than the input.

• Provide utility value to each physical assets.

• The flexibility of an organization depends more on

people than on any technical factors.

“HRM is a series of integrated decisions that form the

• Tell me a few things that are typically the

• Staff manager :A manager who assists and advises

Train and Compensation Performance

Office Manager- Manager-

Director- Director- Director- Sales Director-

Compensation Employee Welfare

New HR Services Groups

Transactional HR Corporate Embedded Centers of

Changes in How We Work

High-Tech Service Knowledge Work

The New Human Resource

Providing Evidence for

Actual Existing Research

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