HRM Session # 1: Summary

Enhancing organizational effectiveness by ensuring that organization has the right people, in right
number, performing the right role to maximum potential is the objective of HRM. Business
challenges like globalization, organizational growth, technology, change, and intellectual capital
have transformed the role of HRM from mere administration and support function to one with
more strategic importance in business organizations. The activities performed by HRM function
include: Pre-joining and joining (HR Planning and job analysis, recruitment and selection,
induction and placement); Performing (training and development, performance management
rewards and compensation, employee welfare, benefits and employee relations, motivation and
retention); Exit (manpower and human capital analysis and accounting). The effectiveness and
efficiency of HRM function will be reflected in a firm’s profitability, growth, (employer)branding,
legal compliance, and CSR.
HR strategy in any organization(s) is derived from its Business strategy (e.g. differentiation, cost
leadership). HR strategy will be translated into HR systems and practices (like hiring policies,
training and development activities, performance management systems and employee retention).
Effective HRM practices will result in positive employee attitudes (satisfaction, commitment etc.,)
and behaviour (OCB); these attitudes and behaviour in turn creates organizational effectiveness.
Hence integrating HR strategy with Business strategy is the key to success in organizations. This
principle of aligning HR policies and practices with business strategy is known as Strategic Human
Resource Management (SHRM).
SHRM essentially involves formulating and executing HR policies and practices that produce
employee behaviour and attitude that enables the organization to meet its strategic aims. External
competitive environment (STEP forces) and internal strengths & weaknesses (SWOT analysis) of
an organization determines its strategic situation. Based on their strategic situation firms’ will
proceed with their strategic plan (e.g. expansion, diversification, cutting cost); to support these
strategic objectives organizations will execute HR policies and practices (recruitment & selection,
training & development, PMS etc.,).
Infosys
The journey of Infosys since its inception in early 80’s to economic downturn in 2002
demonstrates the importance of aligning organization’s strategic situation with strategic plan and
strategic plan with HR strategies. As indicated in the case, Mr. Narayan Murthy, founder of Infosys
was professional, ethical, people focused and believed in wealth creation and its distribution. 1981-
91: during the early years of Infosys, the external environment of was non-conducive for the
company and Infosys strategy essentially revolved around body shopping (consultation).
1991-2001: Economic liberalization resulted into reduced trade restrictions which in turn lead to
demand enhancement; however, at the same time competition crop up both from domestic firms
and MNCs. To meet the growing demand manpower of the company increased tremendously,
people focused practices were adopted. Focus was on improving brand equity. Key strategies
during this period focused on developing Offshore development centers (ODCs) and Global
Delivery Model (GDM). During this period the HR practices focused on enhancing emotional
bonding of employees – world class campus, ESOPs, HALE, C-life, customized training,
challenging and overseas job opportunities etc., are some of the HR practices observed in the
company.
2002-03: these years witnessed economic downturn, SEBI restrictions, intensified competition and
restrictions on US B1 visa; internally company witnessed reduced employee satisfaction, raising
costs, SOP, variable pay system was introduced. These changes lead to change in the business
strategy; consulting, ITES/GDM, BPO operations were started operating as independent firms.
The case is an illustration of the linkages between (1) a firm’s external environment, (2) culture, (3)
business strategy and (4) HR practices.
The case also serves as a useful illustration of the Nadler Tushman model.
Session # 2 : Human Resource Management AY 2018-‘19

Job Analysis

Job analysis is the process of collecting job related information e.g., duties, tasks, job context, key
competencies, preferred traits etc. The information is taken from job incumbents, supervisors or
secondary data sources through a range of methods like surveys, interviews (semi-structured or
structured), observation, etc. The Position Analysis Questionnaire (PAQ) is one such data
collection tool. The data thus collected is classified into

- Job Description : Details of the broad level duties and specific tasks required to be
completed by the job incumbent, and
- Job specification: Knowledge, Skills and Attitudes (KSAs) or competencies required by
the job incumbent.

The job description and job specification then become inputs for all the subsequent
downstream HR processes like recruitment, selection, performance management, training and
development, and compensation strategies.

Human Resource Planning

Human resource planning is the process of estimating the demand and assessing the supply of
personnel.

The drivers of demand are

- Growth (+)
- Diversification (+)
- Voluntary / Involuntary attrition (+)
- Technology (-)

The sources of supply are

- Internal – Promotion, redeployment, extra duties

- External – specific channels (campus) or open market (laterals)

There are several techniques to estimate demand among which the managerial judgement is quite
popular (though not very scientific at times). Trend analysis, regression and work study
techniques are also used. Markov analysis is used to assess internal supply of manpower and map
it against the demand to make recruitment decisions.
 Session # 3 - Summary
Recruitment
• Recruitment is the process of searching and obtaining applicants for a job from among whom
the right people can be selected.
• Selection is the process of ascertaining the suitability of the candidate for the job.
• Hiring / Staffing includes recruitment, selection and the back-end processes of job analysis and
human resourcing planning.
Factors affecting recruitment:
External factors – supply, labour market condition, political and legal frameworks, brand
image of the organization.
Internal factors – organizational policies, size of the firm, growth and expansion
strategies, nature of the job, attitude of current employees.
Sources of Recruitment:
Traditional sources – advertisements, campus recruitment, direct mail, employee
referrals, search agencies, former applicants, government agencies, job fairs, internal job
posting etc.
Modern sources – airplane banners, bill-boards, company sponsored events,
competitions, pre-training etc.
Metrics used for evaluating recruitment process
• Yield Ratio (Yr) – helps to figure out the proportion of successful candidates resulting
from a specific recruiting source that make it to the next stage of the selection process.
• Offer-to-join ratio/ offer drops – ratio of offers made to no. of people joined
• Cost
Cost per hire – total cost incurred to number of people joined
Recruitment cost ratio – in addition to CPH this also includes the salary for which
the hiring has been done and is represented as a percentage
• Turnaround time (TAT) – time taken to complete the process of hiring (from the date
of vacancy to the date of onboarding)
• Fill Rate – percentage of positions in the organization that are occupied
• Early Attrition – attrition within 90-120 days of employee joining
The choice of metrics however depends on demand, supply, and nature of the job.
Moonka Auto: Recruiting Salespersons
The case discusses hiring issues for Moonka Auto - dealership of HMSI in Jamshedpur. The
protagonist Ashok Agarwal has been successfully running one dealership of HMSI for 9 years and
has recently established the second dealership located around 10 kilometres away from the first.
The immediate objective of Agarwal is - growth at SR 2(Show room 2) while maintaining business
at SR 1 (Showroom 1). Agarwal is, however, unable to hire salespeople for SR 2 and has deputed
his top performing salespeople from SR 1 to the second location. This move seems to have
backfired as the two salespeople are dissatisfied at the new location and have threatened to quit
the organization.
Agarwal is faced with the following issues
- Constraints on time available
- Low clarity about the target segment for the job
- Informal process that depended on his own judgement
- Has not been receiving much support through the employee referral channel
- Agency recruits have not stayed long enough with the organization
The key issue is about the choice of recruitment channels that Agarwal should adopt.
Session # 4 - Summary
Selection
(1) Selection is the process of making the employment decision from among the pool of
candidates.
(2) Selection involves two major variables,
- The Criterion also called the KSA / Competency (e.g., Analytical skills,
Communication skills etc.) and
- The Predictor or the Selection Mechanism (e.g., Psychometric test, Interview,
Assessment centre etc.)
(3) The key to making the right employment decision is to have a strong correlation
between the criterion and predictor
(4) The predictor should be reliable, i.e., dependable, stable and consistent
(5) The predictor should also be valid,
a. Content validity – Is the predictor representative of the criterion / construct (e.g.,
while testing for analytical skills does the predictor include numerical, verbal,
logical ability etc.)
b. Construct validity – Does the predictor measure what it is supposed to measure
c. Criterion validity – Is it possible to predict and differentiate candidates based
on the predictor
(6) Structured interviews are known to have higher levels of validity than unstructured
interviews. However unstructured interviews are useful either when the criteria are not
completely defined or the organization seeks “richness of data” through the interview
(e.g., top management positions)
(7) Interviews can be used for various purposes – either to confirm previously measured
KSAs or Measure a new set of KSAs (Incremental validity)
(8) Organizations can also use task based predictors like Assessment centres e.g., In Tray
exercise. Task based assessments are known to have high levels of validity

SG Cowen: New Recruits

The case discusses campus recruitment process of S G Cowen (SGC). SGC is a boutique
investment bank focusing on the Healthcare and Technology sectors. As part of the annual
hiring exercise the company visits core schools (mainly second tier business schools) to hire a
class of around 15 Associates. To begin with the company conducts a pre-placement talk and
information interviews to gauge the interest of candidates. The campus round conducted by
Associates with around 3-4 years of experience examines subject knowledge, culture fit and
general suitability. This process is quite rigorous as Associates do not want to be seen as
endorsing weak candidates. The final stage is the Super Saturday where shortlisted candidates
go through interviews with 5 senior bankers each. The case ends with the committee of bankers
debating on the two best candidates from a pool of 4. The key issues in this case are (1)
Identifying and prioritising the KSAs / Criteria for selection (the final choice would simply be
an outcome of the priority allotted to the Criteria), and (2) Evaluating the validity of the entire
selection process.
 Summary: Session 5 and 6
Performance Management is a continuous process of identifying, measuring, developing
performance of individuals and teams and aligning it with the strategic goals of the organization.
Performance Management Process essentially involves the following steps:
• Establishing performance standards
• Set mutually acceptable measurable goals
• Measurement of actual performance
• Comparing the actual performance against the set standards
• Providing feedback
• Future course of action
The two key ingredients of job analysis process – job description, job specification provides the
basis for PMS.
The tasks and duties described in JD help in measuring results in terms of KPA (Key
performance areas or broad level duties) and KPI (Key performance indicators or
specific goals).
KSAs / competencies indicated in Job specifications help in measuring behaviour trait
using rating scales.
Two broad categories of systems used in performance measurement are:
Absolute systems – essay appraisal/narratives, critical incident technique, checklists,
Relative/comparative systems – individual ranking, paired comparison, forced ranking
The two major types of rating scales are adjective rating scales (ARS), Behaviourally Anchored
Rating Scales (BARS)
Construction of BARS involves:
• Identification of KSAs from Job specification
• Listing the competencies
• Identifying behavioural indicators for each competency
• Attaching a rating scale to the behavioural indicators
The following biases/errors may hamper PMS
• Leniency error
• Halo effect
• Similarity error
• Central tendency
• Fundamental attribution error
Forced ranking system (Bell Curve)
Forced distribution or stack ranking systems are used with the objective of reducing the errors of
leniency, severity and central tendency. It is assumed that when supervisors are mandated to rank
their team members based on a pre-decided percentage they will be more objective in their
assessment and hence will not commit the afore-mentioned errors. However, perceived
challenges / weaknesses of forced distribution systems include (a) Rigidity in rankings (2) the
apples-to-oranges problem, (3) does not take into account external factors that affect
performance etc.
Case: Vitality Health
The case highlights the significance of performance management systems to the organizational
strategy as the firm slowly shifts focus towards costs and operational efficiency. The case also
reports high attrition among top performers owing to dissatisfaction with the absolute rating
type of performance measurement systems. Forced ranking systems are positioned as the
solution to supervisory biases. However, challenges with forced ranking have already been
enumerated earlier.
Summary: Session 7
Training is the process of enhancing the Knowledge, Skills and Attitude of employees
required to perform the job. It is the outcome of a formal Training Needs Analysis
(TNA). Development refers to the process of enhancing skills required for future
roles.

Training Needs Analysis includes

- Organizational assessment – an assessment of the KSAs required at different

roles in the organization
- Task Analysis – assessment of KSAs required for specific tasks
- Person analysis – assessment of KSA gaps in individual employees

Evaluation of training programs are done

- Training validity - Linkage between training (content and pedagogy) and

learning / instructional objectives
- Transfer validity – Linkage between learning and application / performance
- Intra-organizational validity – Whether the training is specific to the
organization but generic to jobs within the organization
- Inter-organizational validity – Training is for generic KSAs

Backwoods Mail Order Company

The caselet examines the training program for customer order representatives. The
objective of the exercise is to design a training program in terms of content,
schedules and pedagogy. Groups also had to propose methods to evaluate the
training program.
Session 8 and 9

Compensation and Benefit plans should be tied in with the organization’s strategy.
Organizations attempt to design C&B plans so as to elicit desired behaviour from
employees.

Earnings-as-risk plans indicate the proportion of an employee’s salary that is at risk

or is variable (linked to performance). Higher the proportion of variable pay higher
are the Earnings-at-risk. Factors that influence an organizations compensation mix
include Business strategy, Organizational Life Cycle stage, Nature of the Job,
Hierarchy, Collective bargaining agreements (with the Union), Measurability of
performance (and robustness of performance management systems), and Industry /
Market benchmarks.

Performance linked incentives can be either in the form of base pay increases
(irreversible) or one-time bonuses (reversible). Incentives can also be in the form on
non-financial components like training opportunities, challenging assignments,
recognition etc.

The Point system is a quantitative method for determining the relative worth of
jobs in the organization. The Job Evaluation Committee identifies Compensable
Factors, establishes Point Ranges for each factor and allots Points for each job. The
jobs are then plotted as the wage curve.

Whole Health Management

The case discusses the situation of an MBA participant who has been asked to quote
his compensation during a campus hiring program. The key issue is about the
compensation mix or allocation of base pay (fixed), bonus (variable pay) and ESOPs.
The case also enables participants to design a compensation plan that targets
desired behaviour from employees and is aligned with the business strategy.

WrapItUp

The case discusses the impact of a profit sharing plan. The initial compensation strategy
based on volume-based incentives fails to motivate employees who stop putting in extra
effort once the threshold has been achieved. The profit sharing plan links compensation
directly to the profits generated in respective sub-units (here restaurants). While the plan
seems effective in that restaurant managers strive harder to achieve greater profits, thus
positively impacting the company bottomlines, it also suffers from some problems. To begin,
with it seems evident that to successfully implement profit-sharing plans employees need
greater control over their work and more autonomy to make decisions. This could have a
negative effect on standardization which is an important element of service industries.
Further, in an effort to maximise profits the sub-unit managers could tend to compromise
service quality. The key issues in the case include design of variable pay plans to elicit
desired behavior, elements of variable pay plans, like multiple metrics for measurement,
and link with strategy.
Session 10
Employee Engagement is a desirable attitudinal and behavioural condition amongst employees
connoting focused effort, involvement and commitment towards the job and workplace.
Employee engagement is commonly understood as a positive antithesis to employee burnout and
is characterised by vigour, dedication and absorption (Schaufeli et al., 2002). Advantages of
employee engagement include job satisfaction, reduced intention to quit, organizational
commitment, organization citizenship behavior (reduced anti-social behavior), proactive behavior
etc.

Factors/Elements of Engagement

1) Nature of Job/Job Characteristics: Research suggests that employees derive more meaning from
jobs characterised by challenging work, autonomy, opportunities to make contributions,
use of varied skills etc. leading to engagement.
2) Organization and Supervisor Support: A supportive work environment instils psychological
safety amongst employees, thereby increasing the level of their engagement.
3) Perceived levels of justice: Fairness in distribution of rewards (distributive justice) and fairness
in means/procedures to allocate rewards (procedural justice) are identified as elements
which may not directly lead to engagement but significantly reduce disengagement at
workplace.
Additionally, having grievance redressal processes and policies in place, promote
engagement because such avenues allow employees to route their concerns to the decision
makers.
4) Rewards and Recognitions: Employees seek for returns on their investments made towards the
role and job. Though an extrinsic measure, but some research points to the significance of
rewards and recognitions in enhancing engagement

Strategic Human Resource Management (SHRM)

SHRM is the principle of aligning HR policies and practices with business strategy. It shifts from
the traditional objectives of HR i.e. reducing costs and focuses on results. SHRM considers the
implication of business strategy on all HR systems and attempts to translate these into specific
people management policies. SHRM demands a set of operational metrics to capture the
effectiveness and value created by HR as a business function. The objective of SHRM is to
formulate and execute HR policies and practices that produce employee behavior and attitude that
enables the organization to meet its strategic aims.

Nadler and Tushman Model

The Nadler and Tushman’s (1980) Congruence Model of Organizational Analysis identifies the
key drivers of organization performance and the relationship between them. The organization’s
ability to develop congruence between (a) the inputs, which include the environment, resources
like people and history (b) the transformation process, including elements of the formal and
informal organization, and (c) the outputs in terms of individual, group and organizational results,
determines its performance. A lack of fit between any of these elements could lead to lower

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performance, dissatisfied and demotivated workforce. For instance, if poorly qualified employees
are assigned complex tasks they are likely to fail and subsequently leave the organization. Similarly,
if highly qualified employees are assigned simple tasks the resultant dissatisfaction could also lead
to attrition.

Nadler and Tushman’s Congruence Model of Organizational Analysis

Apigee: People Management Practices and the Challenge of Growth

Apigee is a fast-growing technology firm based out of India and the USA. Espoused values of the company
are Passion, Bias for Action, and Respect. The firm is facing competitive pressures with larger and more
established IT companies foraying into the Application Programming Interface (API) domain. This has led
to the consolidation of medium sized companies through mergers. As a response the company is scaling
up rapidly by deepening relationships with existing clients and through strategic acquisitions. As the number
of employees is growing the management feels the need to review its existing people management practice.
The leadership team needs to decide how to retain the Apigee’s espoused core values such as personalized
touch, culture of freedom and high levels of employee empowerment as the company expands in size and
scope.

Nadler and Tushman Model – Apigee

Apigee is currently a hierarchy less, informal organization with high levels of employee
empowerment and individualization. It can face several problems on account of this culture. Firstly,
for scaling up, Apigee needs to hire rigorously however, that may call for a compromise with the
person-culture fit and Grandhi may not be available so often to personally interview the new
recruits as earlier. Moreover, having no formal processes may lead to their misuse (e.g. leave
approval, travel reimbursements) when the company grows as it will be difficult for the
administration team to monitor each case. Similarly, giving freedom to employees assumes their
maturity to handle the freedom and it comes with its own risks. These and many other issues may
lead to a lack of congruence in the the input (type of people) - transformation (tasks they perform)
in Nadler-Tushman Model.

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Similarly, the company may face congruence issues in transformation-output and feedback link.
Owing to these issues, Apigee needs to redesign its People Management Practices and Policies in
a manner which helps it retain its Unique DNA and simultaneously allows the company to scale
in the competitive industry.

References
Nadler, D. A., & Tushman, M. L. (1980). A model for diagnosing organizational
behavior. Organizational Dynamics, 9(2), 35-51.

Schaufeli, W.B., Salanova, M., Gonzalez-Roma, V. and Bakker, A.B. (2002), “The measurement of
engagement and burnout: a two sample confirmatory factor analytic approach”, Journal of
Happiness Studies, Vol. 3, pp. 71-92