HUMAN RESOURCE

MANAGEMENT
By
Poonam Jindal
Difference between HRM and Personnel
Management
Evolution of HR
HR Functions
Line Vs Staff
Line manager Staff
• Commanding Assisting

Business strategy and HRM

• Innovation
• Cost saving

HRM in VUCA world

Human Resource Planning
• The process of forecasting the supply and demand for
human resources within an organization and developing
action plans for aligning the two.
HRP
HRP and business strategy
Corporate strategy HRP
• Expansion Same category, more
no.
• Diversification Diff cate, add no.
• M&A Senior positions
• Downsize VRS, Golden
handshake
• Globalization Home, Host, third
party
HRP at different levels
• National
• Sector
• Industry
• Unit
• Department
• Job
Demand Forecast Techniques
• Managerial Judgement
• Statistical techniques

Ratio Analysis
Calculate ratio and take decision:

2017 Present level of production= 2000units

No. of supervisor = 4
Ratio= 1:500

2018 estimated production= 5000 units

Supervisor needed= 1:500
5000=10 supervisors
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reserved.

Ratio Analysis

Number of Ratio [Sales per

Year Sales employees employee]

2011 1230 155 7.94

2012 1720 171 10.06

2013 1908 166 11.49

2014 1727 105 16.44

Example of Ratio Analysis

Forecasting supply
• Inventory check (replacement chart)
• Markov analysis: transition probability matrix
Problems in HRP
• Resistance by employer or employee
• Uncertainties
• Inadequacies of information system

• Recent implication:
over staffing, VRS/ Golden handshake, delayering and
downsizing, out sourcing, project based, part time jobs,
contract labour, contingent hr.
JOB analysis
• Job description
• Job specification
Need for JA and process
• Need for: R&S, Perf appraisal, compensation
management, T&D, HRP etc.

• Process:
1. Collection of background information,
2. Selection of representative position to be analyzed,
3. Collection of JA data,
4. Development of JD,
5. Development of JS.
Sources of Data Collection
• Interview
• Observation
• Questionnaire
• Critical incidents

• Assignment: select a job- use HRP- demand and supply

• Prepare JA- specification and description
Figure 3.6 Example Job Description and Job
Specification

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Recruitment

• The process of developing a pool of qualified applicants who

are interested in working for the organization and from which
the organization might reasonably select the best individual or
individuals to hire for employment.

• Filling up vacancies got by HRP

• Job provider and Job seekers
• Extremely costly affaire for organizations.
• Avoid wrong hiring
Factors governing recruitment
• Internal:
• 1. Company’s size
• 2. Cost
• 3. Outsourcing
• 4. Future plans

• External:
1. Company image
2. Labour market
3. Legal provisions of country
4. Competitors
Objectives
Recruiting sources
• Internal
• External

• Methods:
• References
• Advertising
• Employment agencies
• College placement
• E-recruiting
• Social media recruiting
 Word-of-mouth
Word-of-mouth

Employment
Employment
Advertisements
Advertisements agencies
agencies

College
Collegeplacement
placement Electronic
Electronic
offices
offices recruiting
recruiting
Recruiting metrics
• Keep track on sources and cost of that
• Find best source for best talent at low cost
• ATS (applicant tracking system) to track time and cost
involve in recruiting one person.
Cost of recruitment:

• Source cost = AC+AF+RB+NC

• Hire Total Hire
• 32000+21000+2600+0 = 55,600
119 119
= 467.23 (per hire sourcing cost)
Selections
• identifying the best candidate or candidates for jobs
from among the pool of qualified applicants developed
during the recruiting process.

• Basic Selection Criteria

• Education
• Experience
• Skills and abilities
 Steps in the Selection Process

The
Therecruiting
recruiting
process
process

Gather
Gatherinformation
informationabout
about
pool
poolof
ofqualified
qualifiedapplicants
applicants

Evaluate
Evaluatethe
thequalifications
qualifications
of
ofeach
eachapplicant
applicant

Make
Makedecisions
decisionsabout
about
employment
employmentoffers
offers

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 Sample
Selection
System

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Employment tests
• Employment Tests
• Measure the characteristics of an individual, such as
personality, intelligence, or aptitude:
• Cognitive ability tests
• Psychomotor ability tests
• Personality Tests
• Integrity Tests
• Work Simulations (or Work Samples)
Interviews
• A selection technique that uses a face-to-face conversation
between the job applicant and a representative of the
organization as part of the selection process

• Interviewer and interviewee.

• More psychological and observational skills.

Types of interviews
• Structural and unstructural
• Panel interview
• Phone interview
• Web interview
• Behavioral interview
• Situational interview
• Stress interview
• Computerized interview
Error in interview

Types
Types of
of Interview
Interview Errors
Errors

First
First Contrast
Contrast Similarity
Similarity Non-relevancy
Non-relevancy
impression
impression errors
errors errors
errors errors
errors
errors
errors
Selection errors
• False Positives
• False Negatives
After selection
• Onboarding
• Orientation
• Induction and training (HPCL- Samavesh)

• Placement:
• Probation
Career progression stages
Recognizing career paths

• Transfer
• Promotion
• Relocation services
• Outplacements services
• Dual career paths
• Boundryless career
• Career plan workshops
• Mentoring, networking
• Career counselling
Training and Development
• More than 1000$ per year per employee and 28hrs.
• Aligning strategy with training
• Giving new or current employee a skill they need to
perform their job.
• Improving KSA
Objectives of training
The principal objective of training and development division
is to make sure the availability of a skilled and willing
workforce to an organization. In addition to that, there are
four other objectives: Individual, Organizational,
Functional, and Societal.

• Individual Objectives.

• Organizational Objectives.

• Functional Objectives.

• Societal Objectives.
Principles of training
• Make the learning meaningful (need based)

• Make skills transfer easy- KSA

• Reinforce the learning (feedback)

Process of training

• Four steps:

• Need analysis
• Instructional design
• Implementation
• Evaluation
Training need analysis
• Task analysis

• Competency model

• Individual analysis

• Organizational analysis

• Methods of analyzing
Competency model
• A competency is the capability to apply a set of related
knowledge, skills, and abilities to successfully perform
functions or tasks in a defined work setting.
• Competencies often serve as the basis for skill standards
that specify the level of knowledge, skills, and abilities
needed for success, as well as potential measurement
criteria for assessing competency attainment.
Implementing Training
• Methods:
There are various methods of training, which can be
divided in to
A) cognitive and
B) behavioral methods.
Another method are management development method.
And management development method r divided into two
part
1.On the job training.
2.Off the job training.
Cognitive methods
• 1.Lectures.
2.Demonstration.
3.Discussion.
4.Computer based training(CBT)
Behavioural methods
Games and simulation
1.Behavior-modeling.
2.Business games.
3.Case studies.
4.In basket technique.
5.Role plays.
MDP
• On the job training-

The development of a managers abilities can take place

on the job. The fore techniques for on the job
development are:-
1.Coaching.
2.Mentoring.
3.Job rotation
4.Job instruction technique.
Off the job
• There are many of the job training of management training
programs like.

1.sensivity training.
2.Transactional analysis.
3.Straight lectures.
4.Simulating exercises
Other methods
• EPSS (electronic performance support system)

• LMS: learning management system part of HRIS

Training evaluation
• Before Training: The learner’s skills and knowledge are
assessed before the training program.

• During Training: It is the phase at which instruction is

started. This phase usually consist of short tests at regular
intervals

• After Training: It is the phase when learner’s skills and

knowledge are assessed again to measure the
effectiveness of the training.
Donald Kirkpatrick's Model of Training Effectiveness Evaluation

• Reaction-
• Learning-
• Behaviour-
• Result-

• Time series study to evaluate

• Experiential learning
ROI
• ROI= (Benefits – Costs)/ Costs x 100

• Assignments (calculate cost for your training program)

ROI

• ROI (%) =Benefit per program -- Cost per program

-------------------------------------------------------------------- X 100
• Program Cost

• 200-100
• -------------X100
• 100
•=?
Performance management
• Organizations shift to performance driven culture.

• Evaluation of performance to improve or correct.

• Setting standards and achieving.

• Continuous process of improving performance of

employee through continuous learning and efforts.
Need for performance appraisal

• Administrative needs

• Developmental needs

• PXP analysis
Background of performance appraisal
1. Setting expectation and standards
• Smart goal
• S- Specific
• M- Measurable
• A- Attainable
• R- Relevant
• T- Timely
2. Future actions
• Pay and benefits
• Training and development
• Promotions and demotions
• Career growth
• Succession planning
• Feedback
• Employee engagement
• Employee commitment
• Role clarity
Performance Appraisal
• Evaluating performance of employees against the targets
set for them.

• Process
Appraisal methods
• Rating scales
• Ranking method
• Forced choice
• Critical incidents
• Essay
• Checklist

• BARS
• 360 degree
• MBO
Performance Appraisal Errors
• Absence of objectivity
• Central tendency
• Lenient Attitude
• Bias
• Recency effects
• Employee resistance
Post appraisal interview
Compensation Management
• Compensation is a systematic approach to provide
monetary & non monetary value to employees in
exchange for work performed or the time and energy they
put into work.

• The term compensation management refers to the

establishment and implementation of sound policies and
practices of employee compensation.
• Related with the financial aspects of motivation, needs
and rewards.
• Employee before doing anything will look for the reward
he is going to get.
Objectives of CM
• To recruit & retain qualified employees.
• To increase or maintain morale.
• To determine basic wage & salary.
• To reward for job performance.
• To keep the labour cost under control
• Comply with all appropriate laws and regulations.
• Develop internal, external and individual equity.
Factors affecting Compensation Structure
1. Organization’s ability to pay
2. Demand and supply of labour
3. Prevailing market rate
4. Cost of living
5. The living wages
6. Productivity (output/ per man hour)
7. Trade union bargaining power
8. Job nature
9. Managerial attitude
10. Skill level available in the market
11. Psychological and social factors.
Principles of CM
• Plan to ensure the differentiation of pay
• Level of wages as per labour market rate
• Plan should distinguish between job and employee
• Equal pay for equal work
• Proper job and performance appraisal
• Procedure for wage related grievances
• Employees or trade union should be infromed about the
procedure and system
• Sufficient to maintain standards of living
• Flexible to adjust with changing conditions
• Prompt and correct payment
• Revision of wages by wage committees
• Try to fulfill wide variety of human needs
Salary and Wage determination process

Job Wage
Analysis survey Preparatio Pay
Job
n of wage Ranges
(JD and Evaluation (Local and structure (pay rates)
JS) national)
Trends in Compensation
• Seniority based
• Merit based

• Modern trends:
• Competency based pay
• Broadbanding
• Market pricing
• Pay for knowledge (innovation in compensation)
Pay Model
Policies Techniques Objectives

Internal Alignment Job evaluation Fairness

External competitiveness Market rate, surveys Competitiveness,

attracting talent,
compliance

Employee contribution Seniority based, Pay for Efficiency

performance

Pay management Cost, commitment, Compliance, labour cost

approach to company
Pay level and Pay mix
Pay levels: refers to the average of the array of rates paid
by an employer
(base+bonuses+benefits+value of stocks)/ number of
employees

Pay forms: are the various types of payments, or may mix,

that make up total compensation.
Pay levels
• Red circle: more than market
• Green circle: less than market
• Pay compressions: Paying high to new hires than the old
senior employees.

• Labor cost and pay levels

• Attract and retain talent

• Base pay or total compensation competition

Pay Mix
Compensation fit into HR department
• Compensation and R&S
• Compensation and performance appraisal
• Compensation and training
• Compensation and career development
• Compensation and IR
• Compensation and employment termination
• Compensation and legislations
Rewards
Motivational theories

• Equity theory
• Vroom’s model

• E x I x V = Motivation
Equity theory
 Salary Computation
Component Percentage

Basic 30 to 40% of CTC

Dearness Allowance 40% to 100% of Basic

House Rent Allowance 40% of Basic

Conveyance Allowance 10% of Total Basic Salary

Medical Allowance 10% of Basic Salary or 15000(whichever is less)

City compensatory Allowance (fix amount based on the grade)for grade A- 1000Rs

Telephone Bill Actual expenditure incurred for official calls(1000Rs)

PF 12% of (Basic + DA)

Gross Salary Sum of the above

PF (Employer contribution) 12% of the (Basic +DA)

CTC Gross Salary + PF (Employer contribution)

Net Salary CTC – Taxes

Industrial Relations
• Relation between Employer and employee, Employee and
employee, and employer and employer.
• Three actors:
• Employer
• Employee (Labour)
• Government
• IR Approaches:
IR Bodies
• Bipartite
• Tripartite

• Dispute Mechanism:

• Grievance Handling Machinery

• Open door and step ladder policy
• Conciliation
• Arbitration
• Adjudication: Labour court, Tribunals, National Tribunals
Grievance Handling Process
Main Legislations
• ID Act, 1947
• Factories Act, 1948
• Maternity Benefit Act, 1961
• Minimum Wages Act, 1948
• Payment of Wages Act, 1936
• Payment of Bonus Act, 1965
• Equal remuneration Act, 1976
International HRM
Organizations may go through few stages before they emerge as a
transnational organization.
• Stage 1 – Domestic Organization
• Stage 2 – International Organization
• Stage 3 – Multinational Organization
• Stage 4 - Global Organization
• Stage 5 – Transnational Organization
Comparison of Domestic, International, Multinational, Global and Transnational
Organization
 International HRM Strategies

International
International Staffing
Staffing
Considerations
Considerations

Ethnocentric
Ethnocentric Polycentric
Polycentric Geocentric
Geocentric
staffing
staffing staffing
staffing staffing
staffing
model
model model
model model
model
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reserved.

HR Accounting
• Objective of human resource accounting is to provide
valid and reliable assessment of cost and value of people
which will support management and investors to make
decisions.

• Infosys, BHEL, ONGC, National Thermal Power

Corporation, Oil India Ltd, Cochin Refineries Ltd are
examples of Indian companies that have disclosed HRA in
their financial statements.
HR accounting
• Replacement cost models:
1. Acquisition cost
2. Learning cost
3. Separation cost

Present value of future earnings model: organizations

try to measure contributions of employees instead of cost.
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reserved.

Limitations of Human Resource Accounting

1. It brings forth the philosophical question of is it

possible to ascertain the real worth of any individual?
2. The second question comes in who will ascertain such
value – the superior, employee himself or herself, HR
Department?
3. Difficulty of data gathering also makes HR Accounting
limited.
HR metrics
• Human Resource (HR) metrics are measurements used to
determine the value and effectiveness of HR initiatives, typically
including such areas as attritions, training, return on human
capital, costs of labor, and expenses per employee etc.

• Early attrition
• Training man hours
• Cost per hire
• Promotion percentage
• Internal growth and development.

• ROI
• Cost benefit analysis
Suggestions for organizations interested in tracking talent through metrics should consider the
following:

• Percentage of performance goals met or exceeded,

showing if the organization is meeting the performance goal
aligned with its mission
• Percentage of employees' rate at the top performance
appraisal level who are paid above average salary
• Percentage of top performing employees who resign for
compensation related reasons
• Turnover percentages of low-performing managers
• Percentage of employees in performance management
programs that show improvement within a year
• Percentage and rate of involuntary turnover in key positions
Recruitment Metrics