INTRODUCTION

TO
HUMAN RESOURCE MANAGEMENT

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Always recognize that human

individuals are ends, and do not
use them as means to your end.
Immanuel Kant ( 1724 1804),
German Philosopher

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The terms human resources, human

capital, intellectual assets, and talent
management imply that it is people who
drive the performance of their
organizations.

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Evolution of HRM
Owners themselves managed/control employees
Labour welfare officers (1920s & 30s): to protect
interests of workers in the form of govt intervention.
Welfare officers made mandatory under Factories
Act 1948
In 1970s focus shifted from welfare of people to
concern for performance of organizations in the
form of Personnel Management.
In 1980s PM transitioned into HRM with the advent
of new technologies: to manage People & their
performance

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Evolution of HR in India
Period

Development
Status

Emphasis

Status

1920-1940

Beginning

Statutory,welfare,pat Clerical
ernalism

1940-1970

Struggling for
recognition

Introduction of
techniques

Administrative

1970-1990

Achieving
sophistication

Regulatory,
conforming,
imposition of
standard on other
functions

Managerial

1990s

Promising

Human Values,
productivity through
people

Executive

2000

Considered as
business
differentiator

Business Partner,
Emphasis on
measurability

Strategic
5

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Definition of PM & HRM

Definition of PM:
PM aims to achieve both efficiency & justice. It
seeks to bring together and develop into an
effective organization the men & women who
make up the enterprise, enabling each to make
his own best contribution to the success. It seeks
to provide fair terms & conditions of employment,
and satisfying work for those employed
(IPM 1963)
Salient Features of def:
Relates more with old model of organizations
Beauracratic in nature & less flexible
Adherence to rules & regulations
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Definition of PM & HRM

Definition of HRM:
Strategic & coherent approach to the
management of an organizations most valued
assets the people working there, who
individually and collectively contribute to the
achievement of its objectives.

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Differences between PM & HRM

PM

HRM

Reactive, servicing role

Emphasis on adherence to
procedures
Specialist department

Proactive, innovative role

Emphasis on strategy &
outcomes
General/Business
management
Focus on employees
needs & business needs
Employees as investment &
to be nurtured (ROI)
Conflicts dealt with by team
members within their teams

Focus on employees needs

Employees as cost : to be
controlled
Presumption of union
manager conflicts

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Differences between PM & HRM

PM
Collective bargaining of
pay & working conditions
Settling pay in terms of
organizations internal
market.
Serving other
departments/units
Supporting/Resisting?
change

HRM
Management led planning
of people resources &
conditions
Competitive pay &
conditions to stay ahead
of competitors
Contributing added value
to business
Stimulating change

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Differences between PM & HRM

PM
Challenging business
goals in the light of effect
on employees
Less flexible approach to
staff deployments

HRM
Total commitment to
business goals
Completely flexible
approach to staff
deployment

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Managerial functions of HRM

Planning- plan & research about wage trends,labour mkt etc
Organizing- manpower and resources
Staffing- recruitment & selection
Directing- issuance of orders and instructions to follow plan of
action
Controlling to regulate the activities
Operational Functions of HRM
Procurement- planning , Recruitment & Selection , Induction &
Placement
Development T & D, Career Planning & Counseling
Compensation- Wage & Salary administration
Integration
Maintenance improving work conditions, retentions
Separation - caused by resignations, retirement, death, medical
reasons etc

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HRM Functions
Planning: forecasting future HR needs w.r.t.
organizations environment, mission, objectives,
business strategies, culture, technology, etc
Staffing: obtaining people with right KSAs
based on HRP, job analysis, recruitment &
selection.
Developing: analyzing learning needs for
employee competency & organization capability
Motivating: design & administration of reward
systems job evaluation, PA, pay & benefits.

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HRM Functions
Maintaining: administration of workplace
safety, health, and welfare policies & statutory
compliances
Managing relationships: employee
involvement/participation schemes, negotiating
settlements & implementing them.
Managing change: to envision future, setting
clear expectations for performance &
developing the capability, to reorganize people
and reallocate resources.
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HRM Functions
Evaluating: to measure, evaluate &
communicate value added by people .
Doables include routine activities &
competence building pursuits constitutes
deliverables
8 functions above cover doables as well as
deliverables

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Human resource systems

1. HR philosophies (values and guiding
principles adopted in managing people)
2. HR strategies (defining the direction)
3. HR policies (how values, principles should
be applied)
4. HR processes ( formal procedures and
methods put HR plans into effect)
5. HR practices ( informal approaches used)
6. HR programmes (which enable strategies,
policies, practices to be implemented)

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HRM Models

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Fombrun Tichy and Devanna Model

--- dates back to 1984-----

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Fombrun Model (cont..)

HR cycle consists of : 4 generic processes;

Selection i.e. matching available human resources

with the jobs

Appraisal i.e. performance management
Rewards i.e. rewarding short long term
achievements of the people.
Development i.e. developing high quality
employees

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The Michigan School Model

The human resource cycle

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Elements of human resource cycle

1. Selection: matching available human
resources to jobs
2. Appraisal: performance management
3. Rewards: focus on organizational performance
(most under-utilized and mishandled tool)
short-term and long-term

4. Development developing high quality

employees

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The Harvard Framework

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Characteristics of HRM in Harvard framework

1) Line managers accept more responsibility
for ensuring the alignment of competitive
strategy and personnel policy
2) Personnel has the mission of setting policies
that govern how personnel activities are
developed and implemented in ways that make
them more mutually reinforcing

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Principles of HRM
1.

Strategic Integration: To treat all labour management

processes from recruitment and training to remuneration
and retrenchment in a strategic fashion by integrating HR
Management with broader business goals.
Organisational flexibility: change ready organization

2.
3.

Commitment, from control to commitment through

changing the organisations culture.

4.

Recruiting the RIGHT FITS in culture.

Quality ensuring culture of quality: Quality work, quality

workers, quality products and services; Total Quality
Management, Quality assurance and zero defects, Internal
customers, Empowering workers via team working.

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Aims of HRM
1. Organizational effectiveness (HRM makes a significant
impact on firm performance)
2. Human capital management (HC is the prime asset the
aim is to develop the inherent capacities of people)
3. Knowledge management (support the development of
firm-specific knowledge)
4. Reward management (enhance motivation, job
engagement)
5. Employee relations (harmonious relationship between
partners)
6. Meeting diverse needs (stakeholders, workforce)
7. Bridging the gap between rhetoric and reality (HRM is
to bridge the gap and to ensure that aspirations are
translated to effective action)
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HRM concepts
People Management

Human Resources
Management

The policies and

practices which govern
how people are
managed and developed
in organizations

The strategic and

coherent approach to the
management of the most
of organizations most
valued assets the people
working there who
individually and
Personnel
collectively contribute to
Management
the achievements of its
Personnel management
objectives
is concerned with
obtaining, organizing

Human Capital
Management
An approach to
obtaining, analyzing and
reporting on data which
informs the direction of
value adding people
management strategic
investment and
operational decisions at
corporate level and at
the level of front line
management
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Hard and Soft HRM

Hard (instrumental) HRM approach:

employees are viewed as a passive factor of production, an

expense
employees can be easily replaced and seen as disposable.
Strategic, quantitative aspects of managing HRM as an
economic factor

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

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Personnel Policies
A policy is a plan of action an expression of
philosophy & principles
Examples of specific personnel policies are;
Policy of hiring people
Policy on terms & conditions of employment
Policy with regard to medical assistance
Policy regarding housing, transport, etc
Policy regarding training & development
Policy regarding industrial relations

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Personnel Policies

Formulation of Personnel policies; depends on;

1. Past practice in the organization
2. Prevailing practices with competitors
3. Attitude & philosophy of top management
4. Knowledge & experience gained in the past.

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Whose Job is HRM?

HRM is integral part of business.
Role of the Line Manager: every one
responsible for the performance of others has an
HR role to fulfill. His role in following activities:
Employee selection
Induction of new employees
T & D ( especially on the job training)
Employee performance appraisals
Job structuring
Managing grievances & discipline
Team motivation

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Whose Job is HRM?

Implementation and control of bonus/incentive

payments
Establishment of adequate communication systems
Planning for the effects of change of staff.

A line manager will meet their Business Goals

more effectively & efficiently if supported &
assisted by specialists from various functions,
including human resources.

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Whose Job is HRM?

Line & Staff Aspects of an HR Managers
Job:
Line authority gives Managers, the formal power
to direct and control immediate subordinates

Staff authority grants staff specialist the right to

advise, recommend and counsel in the staff
specialists area of expertise

Hr manager has line authority over the staff of

HR department & staff authority to support,
assist and advise managers of other
departments in matters related to HR
management
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Whose Job is HRM?

Collaboration between Line Manager & HR

Manager:
People/HR management inside an organization is a

collaborative effort of the Line manager & the HR

manager.
Figure on next slide summarizes a few areas of
collaboration;

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Human Resource Managers Functions

Coordinative
Function

Line Function
Line Authority
Implied Authority

Functional Authority

Functions of
HR Managers

Staff Functions
Staff Authority
Innovator
Employee Advocacy

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Role of the HR Function

Traditional roles:
Line function:
Clear control over people in HR department
Limited (implied) control outside their function. Implied
authority stems from the thinking of Line managers that HR
is a close confidante of senior/top management/leadership.

Coordinative function:

Functional authority (control) over other departments for

ensuring adherence to HR policies/processes in orgn.

Staff function:
Assist & advise Line managers to understand & appreciate
HR aspects as strategic options.
Plays role as an innovator & employee champion

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Role of the HR Function (New Roles)

New Roles (process of transformation):
Employee Advocate/Champion:

making sure the employee employer relationship is one of

reciprocal values

Human capital developer/Change Agent :

building future ready workforce

Functional/Administrative expert :

designing & delivering HR practices for ensuring individual ability

& organizational capability.

Strategic Partner:

helping line managers reach their goals.

HR leader:

exhibiting genuine leadership credibility within the HR

organization & to those outside.
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Role of HR in Building a Competitive Organisation

FUTURE/ STRATEGIC FOCUS
Management of
Strategic Human
Resource
Strategic Partner
PROCESSES

Management of
Transformation and
Change
Change Agent
PEOPLE

Management of Firm
Infrastructure

Management of
Employee Contribution

Administrative Expert

Employee Champion

DAY TO DAY
OPERATIONAL FOCUS

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Definition of HR Roles: Dave Ulrich

Role/Cell

Deliverable/
Outcome

Metaphor

Activity

Mgmt of Strategic
HR

Executing strategy Strategic Partner

Aligning with
Business Strategy
Orgnl diagnosis

Mgmt of Firm
Infrastructure

Bldg efficient
infrastructure

Administrative
Expert

Re-engg orgn
processes:
Shared services

Mgmt of
Employee
contribution

Increasing
employee
commitment/capa
bility/competence

Employee
Champion

Listening/respondi
ng to employees :
resources to
employees

Mgmt of
Transformation &
change

Creating a
renewed
organization

Change Agent

Managing
Transformation &
changecreating
capacity to
change
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Role of the HR Function (New Roles)

Employee advocate:
Policies that treat employees fairly & with empathy
Being available & caring
Resolving grievances before they become ugly e.g.

helping spouse get work, school for children, etc

Friendly organizational practices e.g. flexi hours, telecommuting, learning environment, affinity clubs to
pursue non-work related passions, paternity leave, etc
Systematic discussion of employees concerns e.g. fair
policies for health, safety, terms & conditions for work
and discipline, reward & recognition
In nutshell this function includes;

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Role of the HR Function (New Roles)

Conducting regular opinion surveys among employees
Providing feedback from organization to top & line
managements
Providing development opportunities for employees to help them
grow and build value for the organization.
Assisting employees to be change ready & help them in the risk
of the lay off.
Communicating employees of new business initiatives & their
impact on employees
Supporting in building & developing the corporate culture.

Human Capital Developer:

Focus on developing the most superior workforce.

Giving employees menu of Opportunities and options to unlearn

obsolete skills& acquire new ones e.g. banking sector
treating customers
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Role of the HR Function (New Roles)

Opportunities such as employee training, career

development, coaching, mentoring, succession

planning, identification of high-potential employees
To coach leaders by focusing on attitudes &
behaviors to figure out how to motivate desired
behavior among employees.
Responsibility for positive team relations & formal
team building & also informal dialogues to resolve
differences.

Functional Expert:
HR has to advise line managers, must have ability to

do their own job & do it well

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Role of the HR Function (New Roles)

To pick a specific domain and absorb its functional

heritage
To know their limitations and know where to source the
information which they do not have e.g Tower Watson,
Mercer Consulting, etc.

Strategic Partner:
Play the role of strategists, change agents, and internal

consultants and facilitators

Working closely with business leaders on strategy formulation &
execution
To be able to introduce & manage change to ensure the
organizational objectives of change are met.
Best advisors to the leadership team on issues like formation of
teams, deployment of people, succession planning, etc

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Role of the HR Function (New Roles)

HR Leader:
Ability to envision the future & then leads their team
HR leaders must value their function before any one

else does
HRs credibility starts & ends with operational
excellence e.g. paying on time, appraising on time,
training on time, etc

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Competencies of HR Professional
Earlier

New Dynamics

HR proficiencies domain
knowledge
Business proficiencies
strategic role in partnering
business
Leadership proficiencies
driving & leading the
changes
Learning proficiencies
staying abreast & applying
new technologies

Strategic contribution
Personal credibility
HR delivery
Business knowledge
HR technology

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Why We Care About HRM?

1. Impact on you as employees
2. Impact on you as managers
3. Potential future roles as HR professionals
4. Impact of HRM on organizations

151

Line Managers HRM Responsibilities

Though HR managers assist & advise line managers in areas like

recruiting, hiring, & compensation, the line managers still have
their HR duties:
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

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Line Managers HRM Responsibilities

5. Gaining creative cooperation and developing
smooth working relationships
6. Interpreting the firms 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
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Cooperative Line & Staff HR Management

HRM is part of every managers job: Cooperative relationship
(interdependent) between the line & staff managers:
1. The line managers responsibility is to specify the

qualifications employees need to fill specific positions.

2. HR staff then develops sources of qualified applicants

and conduct initial screening interviews

3. HR administers the appropriate tests and refers the

best applicants to the line manager, who interviews and

selects the ones he or she wants.

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The HR Organization

HR Functional Organization
HR Shared Services
Embedded HR

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The HR Organization
1. HR Functional Organization:
Will have specialists in each domain of HR
Head of the function & specialists reporting to head.

Specialists e.g. compensation & benefits, learning &

development, performance management and recruitment

A) Small company with 50-75 people;

No full time HR
Line managers able to do HR activities

B) Company size goes up (single business)

Functional HR structure at top;

Specialists design all policies/processes as per business

needs

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The HR Organization
Known

as Corporate HR department

C) If organization is very large with wide

geographical spread;
Each centre has local HR generalists who implement
policies

Common problems in this structure;

1. HR becomes far removed from realities of
business/not responsive to business.
2. Tussle between Corporate HR specialists &
implementing HR generalists : dysfunctional
conflict
3. Too many specialists not be able to deliver
unified HR strategy
157

The HR Organization

D) Large company with diverse

businesses: Functional structure with a
difference;
All policies cant be made at corporate level
each business have own strategy needing Tailor
made policy e.g. Tata Companies
Dedicated HR in each business

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The HR Organization

Corporate

HR restricts to crafting General HR

value framework, setting minimum standards &
spearheading specific HR interventions required
for entire Group
Corporate HR takes the mantle of Guides &
Thought leaders
Example of Tata group: TAS , succession
planning, leadership development, etc

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The HR Organization
2. HR Shared Services:
Most large companies with diverse businesses
create separate units/businesses to compete & at
same time want synergy among units
one group in organization designs superior way of providing
services to employees & is shared with rest of the Group
(Internal Service Provider)
Repetitive, rule driven, legal compliances, leave management,
pay roll function, etc
Realization to cut cost & increase process efficiency
specialized in doing just that .
Earlier HR used to spend much time in Transactional HR
Now HR spends more time in Transformational HR (devising
& implementing strategies) Figure next slide

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Angled line shows the change

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The HR Organization

From Shared services concept came the concept of;

Service Centres,
Outsourcing - handing over to outside vendor, e.g.
Pay roll, benefits administration, etc
Technology & Employee- e.g. ESS( Employee Self
Service)

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The HR Organization

Service Centres:
Where similar transactional HR jobs done by a Unit for
multiple units.
Economies of scale enabling employee concerns to be
resolved by fewer dedicated resources. decreased
processing time.
Standardized HR processes increases processing efficiency
& decreases processing time.
Flip side: dehumanize transactions

163

The HR Organization

Outsourcing:
Handing over a process to an outside party or vendor to
deliver as per requirements of customer company.
India started as vendor for supplying HR outsourcing to
companies in US & Europe
Now Indian companies are choosing this outsourcing route
e.g. payroll, employee benefits, training & development, etc
Saves costs, drive process standardization, increase speed
& quality of service
Flip side: a wrong vendor, an unbalanced contract & loss of
control to the vendor are some risks

164

The HR Organization

Technology and Employee Self-reliance:

Most of employee services can be met with the help of

technology & minimal human intervention e.g. leave
balance, applying for leave, holiday calendar, PF balance,
etc (Employee Self Service)

Flip side; technology driven environment undermines

importance of relationships at work ( which increases
employee engagement), privacy of data & lack of touch &
feel.

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The HR Organization
3. Embedded HR:
In organizations where transactional HR relegated to

Shared Services, HR professionals work inside the

business units as Business HR, HR Generalists,
Engagement managers, HR coordinators, etc
They work directly with line managers/business unit
leader to clarify business strategy, develop HR
strategy and lead a supportive HR Unit for business

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Organizational Structure
Personnel Department

167

Personnel Department

168

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Organizational Structure Personnel

Department

170

The link between HRM and firm

performance

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Summary
HRM is a tool that helps managers to plan, recruit,
select, train, develop, remunerate, motivate and make
maximum utilization of human and non human
resources for the organization and society at large.

One machine can do the work of fifty

ordinary men. No machine can do the work
of one extraordinary man.- Elbert Hubbard

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Thanks.

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