7/20/2016

Dr. Thesara Jayawardane

PhD, MPhil, BSc(Eng), LLB (Hons), MA, MCIM, MSLIM, AMA, AMIE(SL), DipM(UK),
Chartered Marketer, Attorney at Law

1
 7/20/2016

Exercise
• As the new manager of your
organisation you have to fire
an old employee and hire
someone new.
• What is the criteria you would
follow.

The Strategic Role of HRM

• Involves three elements;
a. All managers are involved in human resource
management

b. Employees are viewed as assets

c. HRM is a matching process, integrating the

organization’s strategy and goals with the correct
approach to managing human capital

2
 7/20/2016

• In companies that take a strategic approach, HR

managers are key players on the executive team and
play a critical role in driving performances.

• HRM activities and goals take place within the

context of issues and factors affecting the entire
organization such as;
a. Globalization
b. Technology
c. Innovation
d. Shifts of markets and external environment.
e. Societal trends
f. Government regulations
g. Changes in the corporate culture, structure, strategy and goals

Strategic Human Resource Management

Company
Strategy

HRM
Environme
Find the Right nt.
People

Maintain an Manage Talent

Effective
Workforce

3
 7/20/2016

Primary Goals of HRM

1. Find the right people
a. HRM planning
b. Job analysis
c. Forecasting
d. Recruiting
e. Selecting

2. Manage talent
a. Training
b. Development
c. Appraisal

3. Maintain an effective workforce

a. Wages and salary
b. Benefits
c. Labor relations
d. Termination

4
 7/20/2016

Building Human Capital to drive

Performance
• Human capital – the economic value of the combined
knowledge, experience, skills and capabilities of
employees.

• Building human capital requires –

a. developing strategies for finding the best talent,
b. enhancing their skills and knowledge with training
programs and opportunities for personal and professional
development
c. providing compensation and benefits that support the
sharing for knowledge and appropriately rewarding
people for their contributions.

The Significance of Human

Capital for Business
• The role and value of Human Capital investment
develop by Accenture and used by SAP.

5
 7/20/2016

HRM Environment

Legislation, Trends in Society,

International events &
Technology

The Impact of Legislations on

HRM
• HR managers have to understand and apply a
variety of federal laws that prohibit discrimination,
establish safety standards or require organizations to
provide certain benefits.

6
 7/20/2016

Labor Legislations in Sri Lanka

• Industrial Disputes Act I
• Industrial Disputes Act II
• Industrial Disputes (Hearing & Determination of
proceeding)
• Trade Unions Ordinance I
• Trade Unions Ordinance II
• Termination of Employment of Workmen
• Employee’s Councils I
• Employee’s Councils II

• Wages Board Ordinance

• Shop and Office Employee
• Employment of Trainees (private sector)
• Budgetary Relief Allowance of Workers (No.1)
• Budgetary Relief Allowance of Workers (No.2)
• Budgetary Relief Allowance of Workers Act
• Employment of Female in Mines Ordinance
• Maternity Benefits Ordinance I
• Maternity Benefits Ordinance II
• Employment of women, young person and ch I
• Employment of women young person and ch II
• Factories Ordinance I
• Factories Ordinance II

7
 7/20/2016

• Workmen's compensation II
• Workmen's compensation II
• Employees Provident Fund I
• Employees Provident Fund II
• Employee's Provident Fund III
• Employees Provident Fund (Special Provisions)
• Employees Trust fund. I
• Employees Trust Fund II
• Employees Trust Fund (Special Provisions)
• Payment of Gratuity
• Fee-Charging Employment Agencies
• Sri Lanka Bureau of Foreign Employment Act I
• Sri Lanka Bureau of Foreign Employment Act II

• Estate Labor (Indian)

• Medical Wants
• Indian Immigrant Labor
• Minimum Wages
• Trade Union Representatives (Entry into Estates)
• Estates Quarters
• Allowances to Plantation Workers
• Service Contracts

8
 7/20/2016

The Changing Nature of Careers

• Refers to the changing nature of careers and a shift
in the relationship between employers and
employees.
• The changing social contract
• Innovations in HRM

The Changing Social Contract

• The old social contract between organizations and
employees – employees contribute ability, education,
loyalty and commitment and expect wages and
benefits, work, advancements and training from the
company in return.

• With the changes taking place in the environment.

Companies are compelled to practice downsizing,
outsourcing, rightsizing, restructuring, etc.

9
 7/20/2016

• These changes have reflected a negative view of the

new employer-employee relationship in most cases
with very few positive aspects.

• Most young people like expectation of responsibility

and mobility embedded in the new social contract.

• In the new social contract, everyone is expected to

be self-motivated workers who are continuously
acquiring new skills and demonstrating values to the
organization.

New Contract Old Contract

Employee •Employability; personal •Job security

responsibility •A cog in the machine
•Partner in business •Knowing
improvement
•Learning; skill development

Employer •Creative development •Standard training programs

opportunities
•Lateral career moves;
incentive compensation
•Challenging assignments
•Information and resources;
decision making authority
•Traditional compensation
package
•Routine jobs
•Limited information

10
 7/20/2016

Innovations in HRM
a. Becoming an employers of choice

b. Addressing the needs of temporary employees and

part-time workers

c. Acknowledging growing employee demands for

work/life balance

a. Becoming an Employer of
Choice
• A company that is highly attractive to potential
employees because of human resources practices
that focus not just on tangible benefits such as pay
and profit sharing, but also on intangibles such as
work/life balance, trust based work climate and
healthy corporate culture, and that embrace a long-
term view to solving problems.

11
 7/20/2016

b. Using Temporary and Part-

time Employees
• Contingent workers – people who work for an
organization, but not on a permanent or full-time
basis.

• Temporary placements, independent contractors,

freelancers and part-time employees.

• Use of temporary teams in organizations.

• Many companies depend on part-time or temporary

employees to maintain flexibility and keep costs low.

• Increase in contingent professionals – accounts,

financial analysts, interim managers, IT specialists,
product mangers and lawyers.

12
 7/20/2016

c. Work/Life Balance
• Companies offer employees with more flexible
schedules and provide them with more control over
their assignments.

• Telecommuting

1. Finding the Right People

Welcome
HR Choose Select the
New
Planning Recruiting Candidates
Employee

13
 7/20/2016

1. HR Planning

• Forecasting of human resource needs and the

projected matching of individuals with expected
vacancies.

2. Recruiting

• Activities or practices that define the characteristics

of applicants to whom selection procedures are
ultimately applied.
• Internal recruiting/promote from within
• External recruiting

• Assessing jobs
a. Job analysis – a systematic process of gathering
and interpreting information about the essential
duties, tasks and responsibilities of a job, as well as
about the context within which the job is performed.

b. Job description – a clear and concise summary of

the specific tasks, duties and responsibilities
pertaining to a job.

c. Job specification – outlines the knowledge, skills,

education, physical abilities and other characteristics
needed to perform the job.

14
 7/20/2016

• Realistic job previews

a. Job analysis enhances recruiting effectiveness by

enabling the creation of realistic job previews.

b. This gives applicants all pertinent and realistic

information (positive/negative) about the job and the
organization.

c. Contribute to greater employee satisfaction and

lower turnover because it facilitates matching
individuals, jobs and organizations.

• Legal considerations

a. Managers must make sure that their recruiting

practices conform to the law.

• E-cruiting

a. Recruiting job applicants online, extends the

organization’s recruiting reach.

b. Commercial recruiting sites

15
 7/20/2016

• Innovations in recruiting

a. E-cruiting
b. Getting referrals from current employers
c. Search among the membership of relevant trade
groups; trade shows, meetings and associations’
web sites.

3. Selection
• The process of assessing the skills, abilities and
other attributes of applicants in an attempt to
determine the fit between the job and each applicants
characteristics.

a. Application forms
b. Interviews (structured, nondirective, panel)
c. Employment tests
d. Assessment centers
e. Online checks

16
 7/20/2016

Selection devices
• Application forms
A device for collecting information about an applicant’s education,
previous job experience and other background characteristics.

• Interviews
It serves a two way communication channel that allows both the
organization and the applicant to collect information that would
otherwise be difficult to obtain.

• Employment tests
A written or computer based test designed to measure a particular
attribute such as intelligence or ability.

• Assessment centers
Present a series of managerial situations to groups of applicants and
they are being observed by judges.

2. Managing Talent
• Training & Development programs– planned effort by
organizations to facilitate employees’ learning of job-
related skills and behaviors.

• Training – teaching people how to perform tasks

related to their present jobs

• Development - teaching people broader skills that

are not only useful in their present jobs but also
prepare them for greater responsibilities in future
jobs.

17
 7/20/2016

Training Methods
• On-the-job training
A type of training in which an experienced employee adopts a new
employee to teach him or her how to perform the job duties.
• Orientation training
New comers are introduced to the organization’s structure, culture,
standards and goals.
• Class room training
Including lectures, films, audio visuals techniques.
• Self directed learning/Programmed instructions
Involves the sue of books, manuals or computers to provide subject
matter in highly organized and logical sequences that require employee
to answer a series of questions about the material.
• E training
Web based training.

• Performance appraisal - steps of observing and

assessing employee performance, recording the
assessment, and providing feedback to the
employee.

• HR managers concentrate on two things to make

performance appraisals a positive force in the
organization.
a. The accurate assessment of performance via the
development and application of assessment
systems such as rating scales
b. Training managers to effectively use the
performance appraisal interview, so managers can
provide feedback that will reinforce good
performance and motivate employee development

18
 7/20/2016

• Assessing performance accurately

a. 360-degree feedback – a process that uses multiple
raters, including self-rating, as a way to increase
awareness of strengths and weaknesses and guide
employee development.

b. Performance review ranking system

• Performance evaluation errors

a. Stereotyping
b. Halo effect

• Overcoming errors
a. BARS – behaviorally anchored rating scale - a
performance evaluation technique that relates an
employee’s performance to specific job-related
incidents.

19
 7/20/2016

3. Maintaining an Effective
Workforce
• Compensation
a. All monetary payments
b. All goods or commodities used in lieu of money to
reward employees

An organization’s compensation structure includes

wages and salaries and benefits (health insurance,
paid vacations, employee fitness centers, etc.)

• Wage and salary system

a. Job based pay – linking compensation to the specific
tasks an employee performs.

b. Skill based pay

20
 7/20/2016

• Compensation equity
a. Maintaining fairness and equity within the pay
structure and boosting employees morale.

b. Job evaluation – the process of determining the

value or worth of jobs within an organization through
an examination of job content.

• Pay for performance

a. Tying at least part of compensation to employee
effort and performance, whether it be through merit-
based pay, bonuses, team incentives or various
gain-sharing or profit-sharing plans.

• Benefits
a. Benefits required by law – social security,
unemployment compensation, workers’
compensation
b. Other - health insurance, vacations, on-site day
care, educational reimbursement
c. Cafeteria-plan benefit packages

21
 7/20/2016

• Rightsizing the organization

a. Intentionally reducing the company’s workforce to
the point where the number of employees is deemed
to be right for the company's current situation.

b. The goal is to make the company more stronger and

more competitive by aligning the size of the
workforce with the company’s current needs.

• Termination
a. Retire, departing voluntarily, forced to leave, cut
back for poor performance, etc.
b. Employees who are poor performers can be
dismissed.
c. Managers can use exit interviews - an interview
conducted with departing employees to determine
reasons for their departure and learn about potential
problems in the organization.

22
 7/20/2016

Societal trends influencing HRM

• Federal legislation
Over the past 40 years several federal laws have been passed to
ensure equal employment opportunity (EEO)
• Unionization
In companies where unions represent workers, union officials research
the needs of members, the elements of the pay package and the
employer’s financial condition.
• Globalization
As companies enter the global market place HRM must deal with such
staffing concerns as whether or not to send expatriate managers or hire
local managers for foreign operations.
• Information Technology
IT is transforming HRM and helping to meet the challenges of today’s
environment.
eg: Human Resource information system

23
 7/20/2016

Chapter Questions – Home Work

Discuss four (4) training methods used to

develop an effective workforce.

Discuss three (3) frequently used

Selection devices.

Describe three (3) societal trends that

influence human resource management

24