Human Resource Management

From the Book Human Resource Management (6th

Edition) by- K.Aswathappa
 Ch-1 Understanding the Nature & Scope of Human
Resource Management

• Def-: Functions like Recruitment, Selection, Training &

Development (people’s dimension in an organization).
• Scope-Entry-Leaving
 HRM Functions & Objectives

Function-: supply of competent & willing employees

Objectives-:
Societal (sensitive to needs & legal Compliance)
Organizational (effectiveness, Planning, selection, Training &
Development, Appraisal)
Personal (employee career, potential, training & development)
Outsourcing:
72% of Indian companies are outsourcing their HR activities.
e.g. Employee hiring, Training & development, Payroll preparation,
Benefits administration, Statutory records maintenance.

IIPM headquarters at Kolkata

National Institute of Labor Management (NILM) at Mumbai
Merged to form National Institute of Personnel management in 1980.
 Chapter-2: Context of HRM
• External – Political, Legal, Economic, Technological
• Internal-Org. culture, Cultural, Unions, Professional bodies
• Analysis helps in pro-active approach
• Political:
 Article 14: Equality before the law
 Article 15: Prohibition of discrimination-religion, race, caste, sex or place
of birth
 Article 16: Equality of opportunity in public employment
 Article 23: Prohibits forced labor
 Article 24: Prohibits employment of children –factories, mines/hazardous
jobs
 Article 38(d) Equal pay for Equal work
 Article 38(e) Health & Strength of workers, tender age of children forced
to work out of economic necessity- jobs not suitable to their health.
 Article 42: Just & Humane conditions of work & Maternity leave for
women
 Article 43: Living wages for workers
 Article 43(a): Participation of workers in management
Economic:
Supplier: provides HR
Competitors
Customers
Economic Growth
Industrial Labor- diversity
Globalization

Technological: HRIS

Internal:
Strategy, Task & Leadership
Unions
Organizational culture & conflict
Enacted Environment- own creation e.g. OPEC Knowing the
Domain- carves out for itself, Domain Consensus
Environment
Task Environment- all groups that can influence organization.
E.g. range of products, technology, etc.

Scanning the Environment: Trends & projections,

E.g. labor market, legal environment etc.
 Chapter-3
Integrating HR Strategy with Business Strategy

• Strategic HRM- HR abilities – anyone who deals with

people, regardless of functionality.
• Barriers-
 Perceived short-term
 Inability of HR to think strategically
 Senior managers lacks appreciation for HR values
 Too much concerned with technicality rather than people
values
 Difficult to quantify HR outcome
 HR other than capital assets is not owned by the
company and hence risk in investment.
Corporate level strategies: which business?
Growth strategies (horizontal, vertical, conglomerate, related-unrelated, mergers,
strategic alliances)
Stability strategies
Retrenchment strategies
Business level strategies: how to compete in chosen business, SBU
Functional level strategies : HR
Identification of key HR activities
Pro-reactive
Critical thinking
Explicit comm. of goals
Quality & service
Building core competencies

Environment scanning
SWOT analysis
Strategy implementation
Strategy evaluation
 Chapter-4
Human Resource Planning
• The first part of human resource strategy is human resource
planning
• All other HR activities such as employee hiring, training &
development, remuneration, appraisal, & labor relations are
derived from HRP.
• HRP is a sub-system in total Org. Planning
• Importance:
 Future personnel needs, succession planning
 Part of strategic planning
 Creating highly talented personnel
 International strategy
 Foundation for personnel functions
 Investment in HR’s (human assets as compared to physical assets
increase in value)
 Resistance to change & move
Factors affecting HRP:
1. Type & strategy of Organization.
2. Organizational growth cycles
3. Environment uncertainties
4. Time horizons (short/long term) greater the uncertainty, shorter the time
horizon
5. Type & quality of source information (HRIS)
6. Outsourcing
Environment scanning:
•Economic
•Technological
•Demographic
•Political & legislative
•Social concerns
Organization objectives & policies:
•Internal promotion
•Training & development
•Enrichment of job
•Union
•Retaining
Demand: Quantity & Quality
Basis- annual budget and long term corporate plan translated into
activity levels for each function & department.
External: Competition, Economic
Internal: Budget constraints, Employee separation etc.
Forecasting techniques:
Managerial judgment-(bottom up/ top-down)
Ratio trend analysis-(Past ratios, e.g. sales volume -employee size)
Regression analysis
Work supply technique(length of operation-amount of labor reqd.)
Delphi technique
Flow models (Markov analysis)
I. Time span (Time to be covered-depends on HR Plan)
II. Mutually exclusive categories of employees -movement in
categories
III. Estimate probability of transition based on past trends
HR supply forecast : External (e.g. colleges & universities)
Internal :
Existing Employees:
from HR audit: Skills inventories (non-managers)
Management inventories (managers)
•Work history
•Strengths
•Weaknesses
•Promotion potential
•Career goals
•Personal data
•No. & types of employees supervised
•Total budget managed
•Previous management duties
Inflow-outflow = No. of current employees
Turnover rate = No. of separations in 1 year
* 100
Avg. no. of employees in 1 year
Absenteeism rate= No. of workers absent*No. of days)*100
Average no. of workers*No. of working days
E.g. 4% means 96 out of 100 are available
Retention plan:
Compensation plan
Performance appraisal
Employee quitting because of conflict or green pastures
The induction crisis(accurate job requirements, realistic job
picture)
Shortages
Unstable recruits- find characteristics
 Chapter-5
Analyzing work & Designing jobs
• Origin civil right movement
• Collecting job related information-Job description &
specification
• Monetary consideration is necessary- deciding whether a
activity is work or not
• Work has two characteristics-
Sociological- Leadership, Politics, Power, Group dynamics
Psychological- Learning, Attitude, Motivation, Satisfaction & Perception.
• Job description – Task & Responsibilities
Importance:
– Lays foundation for HRP
– Employee hiring
– Training & development, Performance appraisal
– Salary & wage fixation, Safety & Health.
 Process
Strategic choices:
Extent of employee involvement,
Level of detail,
Timing & Frequency of analysis,
Past oriented vs. Future oriented
Sources of job data:
Non-human: Human:
*Existing data *job analysis
*Equipment maintenance record *job incumbents
*Equipment blue print *supervisors
*Work area architecture *job experts
*Films of employee working
*Training manuals
*Magazines & news papers
2) Information Gathering:
•Type of data (time & budget constraints)
•Methods of data collection
•Who should collect: trained job analyzers, supervisors, job-incumbents
Methods:
Observation
Interview
Questionnaire
Checklists
Technical conference
Diary methods
Quantitative:
Position analysis questionnaire:194 elements, 6 categories ,degree
of involvement
Manager position development questionnaire
Functional job analysis: Relation to people, data, & things.
Job Analysis Sheet
Job Description Sheet
Purpose of job analysis:
•HRP
•Employee hiring
•Training & development
•Performance appraisal
•HRIS
Job design: conscious effort, organize tasks, duties & responsibilities, follows
after job- analysis
Organization factors: internal structure of each task requires planning,
executing & controlling, completely integrated job.
Work flow, Ergonomics, work practices.
Environment factors: Availability of employees, abilities, social & cultural
expectations.
Behavioral elements:
Feedback,
Autonomy,
Use of abilities,
 Variety
 Job Design Approaches
Job rotation
Job engineering-specialization, time & motion studies
Job enlargement
Job enrichment: adding more motivators (empowerment)
Hertzberg 8 characteristics
1) Direct feedback
2) Personal accountability
3) Direct communication
4) Learning
5) Client relationship
6) Control over resources
7) Scheduling own work
8) Unique experience
Socio-technical systems
Ergonomics
Tele-commuting
Alternative work pattern (scheduling)
 Chapter-6
Recruiting Human resources
• Recruitment represents the first contact that a company makes
with potential employees.
• Recruitment program helps the firm in 4 ways:
1. Attract highly qualified & competent people.
2. Ensure that the selected candidate stay longer with the
company.
3. Make sure that there is match between cost & benefit.
4. Help the firm create more culturally diverse work force.
• Factors governing Recruitment:
External: Internal:
Supply & demand Recruitment Policy
Unemployment rate HRP
Labor market Size of the Firm
Political- legal Cost
Image Growth & Expansion
Recruitment: process of identifying & attracting job seekers so as to
build a pool of qualified job applicants.
5 stages:
2.Planning
3.Strategy development
4.Searching
5.Screening
6.Evaluation & control
(how to distinguish applicants who are unqualified from those
who have a reasonable chance of success)

Planning: No. & Type (yield ratios)

Strategy development:
•Make/Buy,
•Technological sophistication of recruitment & selection devices
Sources of recruitment:

Internal:
Present employees
Employee referrals
Former employees
Previous applicants
External:
E- recruitment
competitors
consultants
walk-in/write-in
Campus recruitment
Employment Exchange (Acc. To act, every
Industrial Establishment ( >25 workers)
should notify vacancies in it.)

When to look: time lapsed data

Searching: source activation-reported by line managers

Selling: realistic job picture + attract as many as possible.

Job compatibility questionnaire: whether an applicant’s preference for
work match the characteristics of the job.
400 item instrument.

Alternatives:
 overtime
Employee leasing-outsourcing of recruitment
Temporary employment.
 Chapter 7
Selecting Human Resources
• Selection is the process of differentiating between
applicants in order to identify & hire those with a greater
likelihood of success in a job.
Choosing tests-reliability, validity, objectivity, & standardization.

Contract of employment:
Job title
Duties
Date when continuous employment starts
Rate of pay, allowances, overtime, hours of work including lunch break &
shift arrangements
Sickness,
Length of notice,
Grievance procedure
Disciplinary procedure
Work rule
Arrangements (terminating, union membership),
Rights to patents,
Employee rights to vary terms of contract subject to proper notification.

Audit of selection program

Feedback,
 how well selected candidate perform,
 turnover
 Chapter-9
Training, Development & Career Management
• Training & Development need ₌ standard Performance-Actual Performance.
• Training:-Specific Skills
• Development:- Learning opportunities for employees to grow
• Source of competitive advantage
 Chapter-10
Appraising & Managing Performance
Design of Appraisal Program
Problems of Rating:
Leniency or Severity
Central Tendency
Rater Effect
Halo Error
Primacy & Recency Effects
Perceptual Set (previously held beliefs)
Performance Dimension order
Spill-over Effect (Past Performance)
Status Effect
Solving Rater’s problems:-Training to Raters
What should be rated:
Quality
Quantity
 Timeliness
Cost effectiveness
Need for supervision
Interpersonal impact
Community service
 Potential Appraisal

Conceptual effectiveness
Operational effectiveness
Interpersonal effectiveness
Achievement motivation
Appraisal Methods
 Methods of Job-evaluation
Non-analytical:
Analytical:
• Factor comparison: factors • Ranking: no yardstick
compared, e.g.- mental • Job grading-yardstick for
requirements, skills, classification
physical, etc.
• Point- ranking method:
selection of job factors
( skills, education,
responsibility, job
conditions, etc.)- given
points.
 Chapter-11
Managing Basic Remuneration
 Theories of Remuneration

Reinforcement & Expectancy Theory

Behavior which has rewarding experience is likely to be repeated.
Vroom’s Expectancy theory focuses on link between rewards &
behavior.

Equity Theory:
Internal Equity: different jobs in the Organization
External Equity: relative to outside similar job
Individual Equity

Agency Theory: To align with organizational goals

•Demand & Supply-going rate system
•Legislation:
Payment of wages act, 1936 (regulate irregularity & unauthorized
deduction, payment in particular form & at regular interval)
Minimum wages act, 1948
Payment of Bonus act, 1965
Payment of Gratuity act, 1972
Equal remuneration act, 1976
Wage Boards, tribunals, & fair wage committees.

•Managerial Remuneration: Company’s Act, 1956.

•Business strategy:
Invest to grow:----------→Entrepreneurial Skills
Manage Earnings:-------→Management Effectiveness
Harvest:--------------------→Cost control

Minimum wage-----------→ Fair Wage---------------→Living Wage(frugal

comforts)
 Chapter-13
Managing Employee Benefits & Services
• Why Benefits & services?
 Mitigate fatigue
 Discourage labor unrest
 Satisfy employee objectives
 Aid recruitment
 Reduce turnover, and
 Minimize overtime costs
• E.g. Legally required: old age pension, health insurance,
worker’s compensation, unemployment compensation
Contingent & deferred benefits:
Pension plans
Group life insurance
Group health insurance
Annual wage
Maternity leave
Child care leave
Sick leave
Dental benefits
Suggestion awards
Other benefits:
Travel allowances
Company car & subsidies
Moving expenses
Uniform & tool expense
Employee meal allowances
Child-care facilities
3 conditions:
Monetary calculable
Not specific amount
Not specific time for payment
 Chapter-14
Motivation Perspectives
Intrinsic factors:
Work itself
Responsibility
Advancement

Vroom’s Expectancy Model :

Expectancy: expectancy-performance

Effort Performance Goal

Valence(desire-likeability for goal)
Expectancy*Instrumentality*Valence
Probability-0-1 1st level outcome-2nd (-1-----+1)
level outcome (0(indifferent)/1/-1(hatred))

Not tested empirically

Equity theory-To be treated equitably at work place
Criticism (judgment of fair treatment)

Porter & Lawler performance-satisfaction Model:

Place the right person in the right job (abilities & traits)
Carefully explain their role
Explain in concrete terms performance level expected
Rewards preferred
 Chapter-16
Motivation in action
 Performance based rewards

Organization: profit sharing, stock options

Team: gain sharing, special bonuses
Individual: piece rate, commission

Skill Variety Experienced High internal

Task identity meaningfulness of job Work
Task significance Motivation,
Experience Low
Autonomy responsibility absenteeism &
Feedback Knowledge of actual Turnover
results
Contemporary Job Design:
Telecommuting
Flexi-work
Task revision
Skill development
Participation at the board level
Participation through share ownership
Through joint councils, committees, & work councils
Through job enlargement, & job enrichment
Through quality circles
Through empowered teams

Quality of Work Life:

Ensured when members of an organization are able to satisfy their
important personal needs through their experiences in organization.
 Chapter-17
Empowering Employees
• Participative Management also called Employee Empowerment
• Staff/Work councils-representation entirely of workers/employees
• Joint councils/committees-both employee & employer
• Article 43 A (42nd amendment) state through suitable legislation
– Human welfare
– Human as thinking & independent free being
– Mental & physical health
– Enhancing self-belief & self-efficacy
• Negative consequences of hierarchy & authority

– 1975-1977 Emergency
20 points program for
– 1977- Janta
worker’s participation
– 1979- congress
– Bill- may 30, 1990 in Rajya Sabha-----------making it statutory

• Shop floor council & Establishment Council

 Chapter-18
Communicating with Employees
• Exchange & understanding of information
• Play’s a major role in changing people’s attitude
• Mould by supply of information e.g. company’s news letter
• Decision maker’s need information from many people to
perceive problems etc.
• Originate Channel Receive
Sender- Verbal, Selective Listening,
Clarity of Non- Perceptions (stereotyping,
thought verbal projection-reflecting of one’s
Tone, own thoughts on others, halo-
Facial, effect)
Body-
language
Meta communication- interpretation (add our own interpretation)
Remedy-Active listening

Organization Communication : Authority

Communication Roles: Gate keepers, Liaisons (not members of any

group), Isolates, cosmopolites-external world
 Chapter-19
Managing Betterment at work
• The Factories Act, 1948
a) Washing Facilities
b) Facilities for storing & drying Clothes
c) Sitting facilities for occasional rest for workers who are obliged to
work standing
d) First aid boxes, one for every 150 workers & ambulance facilities, if
there are more than 500 workers
e) Canteen, if employing more than 250 workers
f) Shelters, rest rooms, lunch rooms, if employing more than 150
workers
g) Crèche, if employing more than 30 women
h) Welfare officer, if employing more than 500 workers
a) Not more than 48 hours per week
b) Not more than 9 hours per day
c) No worker has to remain in factory for more than 10 ½ hours
d) Rest interval of ½ hour, after 5 hours of work
e) Weekly one holiday
f) If worker puts more than 48 hours per week-overtime wages
g) No overlapping of shift
h) Women workers are not to be employed between 7 p.m. & 6 a.m.
(exception allowed)
i) No child below 14 years of age to be employed
 Chapter-20
A safe & Healthy Environment
Strategic choices-
level of protection
Formal/informal
Proactive/reactive(as marketing tool)

Safety Policy: goals, responsibility, & authority

Organization for safety -Safety committees

Risk management
Assessing risks (frequency, probability, & severity), steps to reduce

Incidence rate: no. of recordable injuries * 1 million

no. of employee exposure hours
Severity rate= no. of work hours lost * 1 million
total no. of worked hours
Remedies:
Engineering revision,
Persuasion & appeal,
Personal adjustment & discipline
Training,
Safety posters & film shows,
Safety week & awards
Effectiveness: organic-
how well designed,
change in behavior,
safety inspection,
audit

Health: Physical & Mental

 Factories Act, 1948

Factories to be kept clean & free from effluvia & dirt

Arrangements to be made for disposal of wastes & effluents
Adequate ventilation & temperature to be maintained
Measures to be taken for prevention of inhalation or accumulation
of dust & fumes
Standards for artificial humidification to be fixed
Overcrowded related injuries to health of workers to be avoided
(9.9/14.2 cubic meters of space must be provided for each worker)
Sufficient & suitable lightening must be provided in every part of
factory
Glazed windows to be kept clean, measures for prevention of glare
& shadows
Suitable points for wholesome drinking water- legibly marked &
away from urinals. Water needs to be cooled, if no. of workers 250 or
more
Latrines & urinals separately for males & females, well lighted &
ventilated
Sufficient no. of spittoons
Stress: individual response to disturbing factor in the environment.
Eustress-positive stress
Remedies:

Meditation

Cognitive restructuring: replacement of thoughts- reasons

applied

Time management: Delegate as much as possible minor work to

subordinates
 Chapter-26
Evaluating HRM Effectiveness
HR Research
Wage surveys
Effectiveness of various recruitment sources
Effectiveness of training efforts
Survey of supervisor’s effectiveness
Job analysis
Survey of employee needs etc.
Analytical approach:
Cost-benefit analysis (utility analysis)
(excessive reliance on quantitative)- dysfunctional
Qualitative – (loyalty, commitment, attitude etc.)

Balanced Score Card:

4 dimensions
2.Financial Performance
3.Customer Service
4.Internal Business Processes
5.Capacity to learn & achieve growth