hUmAn ReSoUrCeS

An Introduction to HRM
 Human Resources
 HRM (policies, practices and systems)
 Staff and Line Managers
 Activities include:
 Organizational restructuring
 Job Design
 Personnel Planning
 Recruitment, hiring, evaluating, training, developing,
promoting, compensating and terminating services of
personnel.
Source of competitive advantage
 Sustained competitive advantage
 Bill Gates
 Sam Walton
 HPWS for enhancing firm’s competitiveness
 Characteristics of HPWS
 Large number of candidates for each strategic position, use
of validated selection and promotion procedures, extensive
T & D of employees, formal appraisal procedure, use of 360
degree feedback, linkage of merit increases to formal
appraisal, above market compensation for key positions,
high differential of pay between high and low performers,
high percentage of personnel in self managed project
teams, high percentage of jobs filled within
ACTIVITIES OF HRM
(1) Organizational Design
(2) Staffing
(3) Performance Management and Appraisal
(4) Employee and Organizational
Development, and
(5) Reward Systems, Benefits, and
Compliance.
Human Resource Policies & Practices

 Selective Hiring
 Extensive Training Programs
 Self-managed teams and decentralised decision
making
 Emphasis on high-quality performance
 Pay for performance rewards
 Employment security
 Transformational leadership
IMPORTANCE OF HRM
 Human resources form strength of an organization
 Need to devise polices, practices and systems to attract,
employee and retain the best available talent
 To meet the challenges, HR need to be given great
importance
 Off shore operations, off shore employment
 Optimal combination of people, software and equipment
to provide higher quality at lower price
 Determining core competencies, outsourcing labor
 Better arrangements for HR needs, managing diversity,
flexible work schedules, better training programs, child
care arrangements
STRATEGIC HR
 HR systems help to determine how people are
recruited, trained, developed and retained.
 An organization in order to meet its strategic
objectives should
(1) view the workforce in terms of contribution rather
than cost;
(2) use measurement as a tool for differentiating
contributions to strategic impact; and
(3) hold line and HR management responsible for
getting the workforce to execute strategy
 Bottom-line criteria: profits or customer satisfaction
 Strong relationship between employee satisfaction and
business outcomes
 Organizations should strive to satisfy their employees
with (a) good pay (b) good supervision and (c)
stimulating work
 South West’s culture: “put your employees first, and
they will take care of the customers”
 Domino’s case
Competitive Advantage
 Competitive advantage can be referred to the organization’s
ability to formulate strategies that place it in a favorable
position in relation to other companies. Customer value
and uniqueness are perceived to be the two most critical
factors for gaining competitive edge over other
organizations.
 Customer Value: products & services valued more than
those of the competitors. Examples Wal-Mart, Domino’s,
McDonald’s, South-West Airlines, Harley Davidson
 Maintaining Uniqueness: Keep products and services
unique, so it becomes hard for others to copy. Examples
Apple Computers, IBM
 Organizations make efforts so that their uniqueness
lasts overtime. The four mechanisms for offering
uniqueness include: financial and economic capability
i.e. gaining advantage related to costs; strategic or
product capability i.e. gaining advantage related to
product or service innovation; technological or
operational ability i.e. gaining advantage related to
distinct way of delivering its products or services; and
organizational capability i.e. gaining advantage related
to manage organizational systems and people to match
customer and strategic needs.
Purposes of HRM
 Develop policies and procedures
 Harmonious relationship with employees
 Compliance with law
 Provide opportunities to employees to develop skills
 Retain and develop staff to increase production
 Meet economic and emotional needs of staff
 Create safe and health environment
 Attract and retain best staff for strategic goals
Benefits of welfare oriented
policies
 Improvement in good will and image of the
company
 Increase in efficiency and productivity of
workers
 More congenial working relationship
 Ability to attract and retain competent and
committed workforce
Benefits of good human relations
 Committed employees result in more customer
satisfaction
 Better team work among all cadres of employees
 Cost savings due to efficiency of employees
 Low absenteeism and minimum employee turnover
 Open communication and sharing of information
 Training and development of staff will be encouraged
Responsibilities of Senior HR
Manager to achieve objectives
 Design appropriate structure
 Communicate objectives and goals to employees
 Should coordinate between functions and divisions
 Make plans to achieve business and operational goals
 Should define roles to employees
 Design an appropriate reward system
 Plan and implement policy decisions related to
training, rotations, career path and planning
 Keep employees motivated all the time.