What is Human Resource?

HRM

Lecture-1

The term human resources means: people who are

resources for the organizations.
It implies that people have capabilities that drive
organizational performance (along with other resources
such as money, materials, and information).

What is Human Resource Management?

What is difference between Human Resource
and other resources?

Other resources are controlled by human resources

Human resources have intellect and emotion

Human resources can be developed through
development and training

Difference between Personnel Management and Human

Resource Management
Personnel management was treated as a routine activity meant to
hire new employees and to maintain records.
It viewed people as a tool, the behaviour of which could be
manipulated.
HRM views people as assets to be used for the benefit of
organization and employees.
It aims at policies that promote mutuality- mutual goals, mutual
respect, mutual rewards and mutual responsibilities.

Human resource (HR) management

refers to the practices and policies one needs to carry out to
deal with the personnel aspects of the management job
Human resource management (HRM) is the effective
management of people at work

The goal: make workers more satisfied and productive

When an organization is concerned about people, its total
philosophy, culture, and orientation reflect it
Every manager must be concerned with people, whether or
not there is a human resources department

Human Capital

The concept of

human resource
management implies
that employees are
resources of the
employer.

Human Capital an

organizations employees
described in terms of their:

training

experience

intelligence

relationships

insight

Human Capital Management

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.

Competitive Advantage Through People

Viewing the work force as an asset, not an expense

The result:

Harder work, from increased involvement and
commitment

Smarter work, through enhanced skills and competence

High performance work systems

Organizations can achieve sustained competitive advantage

through people if they are able to meet the following criteria:
The resources must be of value
The resource must be rare
The resource must be difficult to imitate
The resources must be organized for synergy

Harvard economist Michael Porter looked at these questions from the

standpoint of national economic performance. Why do German engineers,
Swiss chocolatiers, and Japanese electronics manufacturers enjoy a
competitive advantage over the rest of the world?
Porters research contradicted conventional wisdom that industry leadership is
explainable by geographical advantages such as plentiful natural resources,
cheap labor, and abundant capital. He demonstrated that a nation does not
inherit but instead creates the most important factors of productionsuch as
skilled human resources or a scientific base. Countries develop their elite
industries.
How do you create a superior culture of people development? Michael Porter
discovered that world-class industries share three common traits: Competition,
challenges, and connectivity.
Each quality is transferable to your organization and can help you tap into your
most appreciable asset your people

Source: Pfeffer (1994, 1998)

1) Competition
Top global industries develop in countries with intense domestic competition. For
example, in Italys leather-good fashion industry Gucci continuously must reinvent itself or else Prada and Fendi will steal away its share of the market.
Conversely, when a firm enjoys a national monopoly, it lacks the pressure to
innovate that comes from having local rivals.
For that reason, national industries with a single, dominant business seldom
attain global influence. Theres a reason why athletes swim faster and jump
higher in the Olympics than they do in practice. People perform at their best when
pushed by competitors. Even competing against ourselves motivates us to excel.

2) Challenges
Porter found that industries in countries with noticeable disadvantages often
ascended to global leadership on account of the creative solutions they invented in
order to overcome economic handicaps.
As a case in point, Japanese manufacturers in the 1970s and 1980s were limited
by scarce natural resources and relatively high-cost labor. Yet by pioneering
innovative management techniques (in the areas of quality control and just-in-time
production) Japans automotive and electronics manufacturers attained
international renown.

3) Connectivity
World-class industries sustain global dominance through the cluster effect
having cutting-edge companies in close proximity to one another.

Scope of HRM

For instance, software developers bunched together in Californias Silicon

Valley benefit from rapid information flow and immediate technological
interchange. Companies piggyback on one anothers novel applications to
spur a dizzying pace of innovation in the industry.

SOURCE: http://business.inquirer.net/69659/competitive-advantage-through-people-development

Functions of HRM

Importance of HRM

HRM

 train people for challenging

roles
Good HR Practices help

Operative Functions

Managerial
functions:

 attract and retain talent

Planning

Procurement

Development:

Job Analysis

Training

HR planning

 develop skills and

competencies

Organizing

Recruitment
Selection

 promote team spirit

Executive
development
Career
planning

Placement

 develop loyalty and

commitment

Directing

Induction
Internal
mobility

 increase productivity and

profits

Controlling

 improve job satisfaction

Succession
planning
Human
resources
development
strategies

Motivation and
Compensation:

Maintenance:

Job design

Health

Grievances
Discipline

Personnel
audit

Teams and
teamwork

Personnel
research

Welfare

Collective
bargaining

Social security

Participation

Job evaluation
Performance and
potential
appraisal

Emerging
Issues:

Safety

Work scheduling
Motivation

Integration:

Compensation
administration
Incentives
benefits and
services

HR
accounting
HRIS
Mentoring

Empowerment
Trade unions

International
HRM

Employers
associations
Industrial
relations

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

organizations tasks.

Staff manager

A manager who assists and advises line managers.

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 new to them

4.

Improving the job performance of each person

5.

Gaining creative cooperation and developing smooth working relationships

6.

Interpreting the firms policies and procedures

7.

Appraising the performance

8.

Developing the abilities of each person

9.

Creating and maintaining department morale

10. Protecting employees health and physical condition

Evolution of the Personnel Function

Hard and Soft HRM

Hard (instrumental) HRM approach:

Concept

employees are viewed as a passive factor of production, an expense

employees can be easily replaced and seen as disposable.

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.

Soft (humanistic) HRM approach:

stresses active employee participation

gains employee commitment, adaptability and contribution of their

competences to achievement of organizational goals

employees are valued as assets

Emphasizing communication, motivation and leadership

What is it all about?

Cont

Evolution of the Personnel Function

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 organization is a
social system that has both economic and social dimensions.

The Human Resource

concept

Employees are the most valuable assets of an organization.

There should be a conscious effort to realize organizational 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 organization 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.

Quality of work life (QWL) is a general concept that

refers to several aspects of the job, including:

Management and supervisory style

Freedom and autonomy to make decisions on the job

Meaningful tasks
Communicating HRM policies to
all employees:

HRM policies, programs, and procedures must be
communicated fully and effectively

They must be represented to outsiders

Objectives of the HRM Function

HRM contributions to organizational effectiveness:

Employing workforce skills and abilities efficiently

Increasing job satisfaction, self-actualization, and
quality of work life

Increasing employees job satisfaction and selfactualization

Employees must feel that the job is right for their
abilities and that they are being treated equitably

HR Management Challenges

Workforce Availability and Quality

Inadequate supply of workers with needed skills for knowledge

jobs

Education of workers in basic skills

Growth in Contingent Workforce

Increases in temporary workers, independent contractors,

leased employees, and part-timers caused by:

Need for flexibility in staffing levels

Increased difficulty in firing regular employees.

Reduced legal liability from contract employees

HR Management Challenges

Demographics and Diversity Issues

More diversity of race, gender, age, and ethnicity in the

workforce

Balancing Work and Family

Dual-career couples

Single-parent households

Decline in the traditional family

Working mothers and family/childcare

HR Management Challenges

Organizational Restructuring, Mergers, and Acquisitions

Right-sizingeliminating of layers of management, closing

facilities, merging with other organizations, and outplacing

workers

Intended results are flatter organizations, increases in productivity,

quality, service and lower costs.

Costs are survivor mentality, loss of employee loyalty, and turnover of

valuable employees.

HR managers must work toward ensuring cultural compatibility

in mergers.

Different Roles for HR

Management