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Definition 1 – Integration “HRM is a series of integrated decisions that form the employment relationships; their quality contributes to the ability of the organizations and the employees to achieve their objectives.” Definition 2 – Influencing “HRM is concerned with the people dimensions in management. Since every organization is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organization are essential to achieving organizational objectives. This is true, regardless of the type of the organization – government, business, education, health, recreational, or social action.” Definition 3 – Applicability “HRM planning, organizing, directing and controlling of the procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objective are accomplished.”

MEANING OF HRM: HRM is management function that helps managers to recruit, select, train and develop members for an organization. Obviously HRM is concerned with the people’s dimensions in organizations. HRM refers to set of programs, functions, and activities designed and carried out Core elements of HRM • People: Organizations mean people. It is the people who staff and manage organizations.


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Management: HRM involves application of management functions and principles for acquisitioning, developing, maintaining and remunerating employees in organizations.



Consistency: Decisions regarding people must be

integrated and consistent. • Influence: Decisions must influence the effectiveness of organization resulting into betterment of services to customers in the form of high quality products supplied at reasonable cost. • Applicability: HRM principles are applicable to business as well as nonbusiness organizations too, such as education, health, recreation and the like.

OBJECTIVES OF HRM: 1. Societal Objectives: To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands upon the organization. 2. Organizational Objectives: To recognize the role of HRM in bringing about organizational effectiveness. HRM is only means to achieve to assist the organization with its primary objectives. 3. Functional Objectives: To maintain department’s contribution and level of services at a level appropriate to the organization’s needs. 4. Personal Objectives: To assist employees in achieving their personal goals, at least in so far as these goals enhance the individual’s contribution to the organization. This is necessary to maintain employee performance and satisfaction for the purpose of maintaining, retaining and motivating the employees in the organization.


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SCOPE OF HRM: From Entry to the Exit of an employee in the organization Scope of HRM can be described based on the following activities of HRM. Based on these activities we can summarize the scope of HRM into 7 different categories as mentioned below after the activities. Let’s check out both of them.

HRM Activities –
1. HR Planning 2. Job Analysis 3. Job Design 4. Recruitment & Selection 5. Orientation & Placement 6. Training & Development 7. Performance Appraisals 8. Job Evaluation 9. Employee and Executive Remuneration 10.Motivation 11.Communication 12.Welfare 13.Safety & Health 14.Industrial Relations

7 Categories of Scope of HRM
1. Introduction to HRM 2. Employee Hiring 3. Employee and Executive Remuneration 4. Employee Motivation 5. Employee Maintenance 6. Industrial Relations 7. Prospects of HRM


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Personnel Policies: Organization Structure. industrial relations procedures and health and safety FUNCTIONS OF HRM ALONG WITH OBJECTIVES HRM Objectives Social Objectives Supporting HRM Functions Legal Compliance Benefits Union Management Relations Organizational Objectives Human Resource Planning Employee Relations EMERGING TRENDS IN HR Page 4 . and employment procedures. b. personnel policies and procedures. procedures. Social Responsibility. Personnel procedures. recruitment and selection procedures. appraisal management procedures. which will ensure that agreed policies are implemented. development compensation performance procedures. Career & Promotion. Training & Development and Industrial Relations. 3. Service Role: Personnel function provides services that need to be carried out by full time specialists.ROLE OF HRM 1. a. These services constitute the main activities carried out by personnel departments and involve the implementation of the policies and procedures described above. It provides guidance to managers. Compensation. procedures. Procedures: training Relating to manpower planning procedures. Employment Terms & Conditions. Advisory Role: HRM advises management on the solutions to any problems affecting people. Functional Role: The personnel function interprets and helps to communicate personnel policies. 2.

union demands and other personnel benefits. Staffing: Recruitment & Selection EMERGING TRENDS IN HR Page 5 . Forecasting manpower needs etc. labor market conditions. 3.Recruitment & Selection Training & Development Performance Appraisals Placement & Orientation Employee Assessment Functional Objectives Performance Appraisals Placement & Orientation Employee Assessment Personal Objectives Training & Development Performance Appraisals Placement & Orientation Compensation Employee Assessment Managerial Functions of HRM 1. Organizing: Organizing manpower and material resources by creating authorities and responsibilities for the achievement of organizational goals and objectives. Planning: Plan and research about wage trends. 2.

Induction and Placement 2. Operational Functions of HRM 1. practices. death. HR managers have a challenge to deal with more functions. lay offs. medical sickness etc.Growing internationalization of business has its impact on HRM in terms of problems of unfamiliar laws. terminations. competitions. providing guidance and motivation of employees to follow the path laid-down. work ethics and more. Recruitment and Selection. Development: Training. Globalization: . attitudes. EMERGING TRENDS IN HR Page 6 . 3. management styles. employee communication Separations: Managing separations caused by resignations. 5. CHALLENGES OF HRM IN INDIAN ECONOMY OR CHALLENGES OF MODERN MANAGEMENT 1.4. languages. Directing: Issuance of orders and instructions. Observations and comparisons of deviations 5. Compensation: Wage and Salary determination and administration 4. Controlling: Regulating personnel activities and policies according to plans. Career planning and counselling. Development. Integration: Integration of human resources with organization. 6. Maintenance: Sustaining and improving working conditions. more heterogeneous functions and more involvement in employee’s personal life. retentions. Procurement: Planning.

working mothers. joint ventures. New Organizational forms: . Traditional allurements like job security. remunerating and motivating employees. and discover new methods of hiring. which highly depend upon a regular exchange of people and information. in place of more comfortable hierarchical relationships that existed within the organizations for ages in the past. 3.Changes in workforce are largely reflected by dual career couples. In these situations.Reorganization relates to mergers and acquisitions. These relationships give birth to completely new forms of organizational structure. employee expectations and attitudes have also transformed. It is a challenge to manage employees’ anxiety.With the changes in workforce demographics. Changed employee expectations: . insecurities and fears during these dynamic trends. rather employees are demanding empowerment and equality with management. Hence it is a challenge for HRM to redesign the profile of workers. etc. training. more educated and aware workers etc. and remunerations are not much attractive today. house. 2. take over. large chunk of young blood between age old superannuating employees. it is difficult to imagine circumstances that pose a greater challenge for HRM than reorganizations itself. The competition is not between individual firms but between constellations of firm.Corporate Re-organizations: . These dynamic workforces have their own implications for HR managers and from HRM point of view is a true challenge to handle. EMERGING TRENDS IN HR Page 7 .The basic challenge to HRM comes from the changing character of competitions. internal restructuring of organizations. Changing Demographics of Workforce: . uncertainties. Major companies are operating through a complex web of strategic alliances. The challenge for HRM is to cope with the implications of these newly networked relations more and more. forgings with local suppliers.

The trade union membership has fallen drastically worldwide and the future of labor movement is in danger. It is a challenge of today’s HR managers to see that these weaker sections are neither denied their rightful jobs nor are discriminated against while in service.In today’s dynamic world. and operational freedom. productivity and quality the interests of the society around should not be sacrificed. EMERGING TRENDS IN HR Page 8 .The need of today’s world and business is the people’s approach.Another challenge for HRM is to protect the interest of weaker sections of society. 4. Renewed People Focus: . The structure. However in the post liberalization era. In the name of global competition. bossism. systems approach which worked in post war era is no more relevant in today’s economic environment which is characterized by over capacities and intense competition. practices and values. They demand decision-making. The challenge of HR manager is to focus on people and make them justifiable and sustainable.New Industrial Relations Approach: . The challenge before HRM is to adopt a proactive industrial relations approach which should enable HR specialist to look into challenges unfolding in the future and to be prepared to convert them into opportunities.Managers are unique tribe in any society. strategy. The challenge of HRM is how to manage this tribe? How to make them realize that the freedom given to them is to enable them make quick decisions in the interest of the organization and not to resort to witchhunting. Managing the Managers: . they believe they are class apart. The dramatic increase of women workers. Weaker Society interests: . 5. minorities and other backward communities in the workforce has resulted in the need for organizations to re-examine their policies. even unions have understood that strikes and militancy have lost their relevance and unions are greatly affected by it. freedom given to managers is grossly misused to get rid of talented and hard working juniors.

Change is inevitable as said and that’s what Indian organizations are witnessing in management cultures. This calls for Skill mapping through proper HRM initiative.The biggest challenge to an HR manager is to make all employees contribute to the success of the organization in an ethical and socially responsible way. Contribution to the success of organizations: . systems and working style. Over the years. Emerging trends in HR If we see in practical situation the above definition its just one side of a coin which has limited HRM involvement but HRM today is a different story. Outsourcing & its HR Dimensions EMERGING TRENDS IN HR Page 9 . Managing and attracting the human resource in today’s time is very difficult task.6. Because society’s well being to a large extent depends on its organizations. highly skilled and knowledge based jobs have increased while low skilled jobs are decreasing. it have changed the way we work. The role of HR manager has changed a lot (Dancing differently on changing tunes of life) from being protector and screener to the role of Saviour who acts as planner and change agent affecting bottom of the pyramid where it is blue collar workers & at the Top & Middle level executives. The trends in human resource industry are dynamic in nature which contributes towards to achievement of organization goals. and also it helps an organization to survive in recessionary period. Alignment with global companies has forced Indian organization accept and incorporate change in everyday life which makes role of HRM all more important.

in which partnerships. growth is evident and important for survival of any organization. Companies often hire the services of accounting firms. In contrast procurement generally means that the company has not performed the activity before. line and HR mangers have to work together to define and communicate transition plans. there has been a movement away from vertical growth strategies toward co-operative contractual relationships with suppliers and even with competitors. in which resources are purchased from outside through long-term contracts instead of being made in house (for example Hewlett.. McBer hired most of Kellogg’s secretarial staff. There are several HR concerns with regard to outsourcing. and joint ventures supplement a firm’s capabilities (for example. Outsourcing also has a temporal dimension in that some executives view outsourcing as permanent. W. Siemens. Kellogg Inc. Motorola and Ericsson to become one of the world’s leading electronic companies). to strategic alliances. and help employees identify their . Outsourcing simply means hiring someone from outside the company to perform tasks that could be done internally. EMERGING TRENDS IN HR Page 10 unknowns. For example. According to them outsourcing occurs when a company contracts with a vendor to perform an activity previously performed by the company. to take care of financial services. software firms to develop dataprocessing systems. To minimize problems. Outsourcing should be referred as the performance by outside parties on a recurring basis of HR tasks that would otherwise be performed in house. the outside vendors may actually hire the displaced employees.In to-day’s global village. During the 1990’s. for example. Whereas subcontracted activity is expected to return to the company at some point. minimize the number of employment options. technology licensing agreements. Toshiba has used strategic alliances with GE. not the least of which is that if employees are likely to lose their jobs when the work is outsourced. a temporary employment agency.Packard buys all its laser engines from Canon for HP’s laser jet printers). or law firms to handle legal issues. morale and productivity can drop rapidly. In some cases. the process of outsourcing is different from purchasing. outsourcing is not. They may hire advertising firms to handle promotions. a petroleum services company based in Houston. and subcontracting. recently outsourced its entire clerical staff to the McBer Company. In the views of HR professionals. These relationships range from outsourcing. M. procurement.

Over the past decade. In 1996. Organisations competing in global industries must in particular search worldwide EMERGING TRENDS IN HR Page 11 . The 1997 survey of Human Resource trend in 1700 organization reported that 53 percent planned to outsource more in the future. The market for providers of outsourced service of all types is growing rapidly. retirement. these factors have significantly altered the strategy and structure of many firms. According the Hewitt Associates survey of large employers conducted during 1996 found that 93 percent of respondents outsourced some of their HR functions. This process is known as employee leasing. outsourcing usage grew by 35 percent for the 12 months during the year even though the people were employed by a different company. It was estimated that by 2000. expected to increase to $200 billion. From the review of literature. it has been found that there are five competitive forces that are driving more companies to outsource some or all of their HR activities (1) Downsizing (2) Rapid growth or decline (3) Globalization (4) Increased competition and (5) restructuring. Outsourcing is becoming an increasingly important part of strategic decisionmaking and an important way to increase efficiency and often quality. Another survey conducted by American Management Association (AMA) during 1996 confirms that 77 percent of firms outsourced their HR activities up from 60 percent in 1994. HR Departments are facing the classic make or buy decisions that other functional areas confront when considering the outsourcing of services or products. The value of employee leasing lies in the fact that an organisation can essentially maintain its working relationships but shift the administrative costs of health care. Employee leasing has been growing rapidly. DuPont contracts out project engineering and design to Morrison Knudsen. American firms spent over $100 billion in outsourced business activities. AT & T contracts its credit card processing to Total System Services and Eastman Kodak its computer services to Business land. Globally. and other benefits to the vendors. The Sourcing Decision Where a function should be housed? Should it be integrated within the organisation or purchased from an outside contractor? Outsourcing is purchasing from someone else a product or service that had been previously provided internally. their job and locations stayed the same.

The outsourcing programme is also being practiced in Public & Private Sector enterprises to raise productivity. In a study of 30 organisations. Now because of outsourcing it has come down to between 1. we used to take 1. At the same time. TI Cycles had set itself an ambitious target of becoming the number two bicycle manufacturer by 2000 with sales of 35 lakhs bicycles in the domestic market while at the same time achieving 40% ROI. outsourcing resulted on average in a 9% reduction in costs and 15% increase in capacity and quality. About 60 percent by value of a Bajaj vehicle was outsourced. TI Cycles singled out a few areas of the value chain for special attention and thrust. With these arrangements. for example. In the late 1990’s. Outsourcing lead to reduction in fixed cost.for the most appropriate suppliers. Compared to its competitors. EMERGING TRENDS IN HR Page 12 . This also leads to improved cash flow as the investment in fixed cost on tangible fixed assets is reduced. were outsourced. the level of outsourcing had begun to creep upwards. The company tied up its outsourcing arrangements with Avon Cycles in Punjab and Hamilton Cycles in Mumbai with a view to expanding its reach in the northern and western markets respectively. major repairs work etc) thus saving huge cost on HR. Virtually no components were imported and 70 percent of Bajaj Auto’s requirement was sourced from within the State of Maharashtra.5 man-days. We should now discuss outsourcing in the Indian context. Organisations can benefit from the new concepts of outsourcing by generating maximum return on investment through better productivity. Nowadays many companies have outsourced the car-pooling services. who were more vertically integrated. According to Arvind Gupta of Bajaj Auto. hence a lowering of break – even point on capacity utilisation leading to higher sustainability of the company in recessionary market. Of this reduction. Many leading PSEs have outsourced their maintenance activities (for example annual over hauling. Bajaj Auto’s dependence on vendors was relatively low: over 90% of Hero Honda’s components. 40% is from off loading and 60% from productivity increases. TI reached a stage where its outsourcing was much higher than Hero and Atlas.9 man-days to make a scooter. Philips along with Sony took the outsourcing route.4 & 1.

got a contract for handling consumer’s product major Procter & Gamble’s global IT outsourcing. The last three contracts have not been announced as yet. Power of outsourcing lies not only. this was a large and beautifully structured deal. It is a new coinage of an old decision-making model known as “make or buy”. Contracting is when a company (buyer) purchases goods or services from another company (supplier or vendor). P & G will allot the building and real estate management to another player and employee payroll management and accounts payable to two others. any business will doubtless continue to benefit from outsourcing technical skill. HP Services the software services arm of Hewlett Packard (HP). Making the Outsourcing Decision EMERGING TRENDS IN HR Page 13 . During the year 2002.5 billion and across 160 countries. instant solution to an organisation’s problems but also in its potential to help the organisation to re-think its entire way of doing business. in its capacity to effect a rapid. even its reason for existence. but outsourcing” has enlarged the dimension of make or buy concept. In this situation the buyer has the control over the situation and instructs the vendor to work accordingly but in the case of “outsourcing” the buyer turns over the control (ownership) or the process to the supplier. The buyer asks the supplier what results it wants and the supplier decides how to achieve that. Table-1 provides summary of guidelines for HR Outsourcing using categories that follow a chronology similar to the outsourcing phases identified by Professor Scott Lever. Quality assurance and cost reductions have become the prerogative for the competitive sustenance in an open international market. At $ 3. In outsourcing the supplier has the expertise and the economies of scale.Outsourcing is a fast and flexible approach to cover resource gaps. While HP gets the IT services part of the deal. The two terms “contracting” and “outsourcing” are used interchangeably but they are not same at all. As expectations continue to rise to higher standards.

Avoid excessive reliance on vendors. Perform reference checks of potential vendors. all other HR activities should be considered as candidates for outsourcing. Except for core competencies. or poor management of the activity. eliminate obsolete functions and reduce overstaffed areas. Recognize that performance is more important than low HR department head counts or lower costs. Anticipate conflict and develop a plan for resolving it in a manner that supports the relationship with the vendor. Understand the costs involved in switching vendors for outsourced services. influences from the external environment. Identify critical personal benefits of outsourcing. Selecting and Negotiating with Outsourcing Vendors Assign a high weighting to vendors’ knowledge of the industry. HUMAN RESOURCES PLANNING & DOWNSIZING Over the past decade downsizing has been in full swing and reductions in the work force became a fact of life in the world of work. these actions were necessary to improve profitability. As organizations move to-wards more EMERGING TRENDS IN HR Page 14 . Managing the outsourcing Transition Expect the internal HR team to resist outsourcing and develop ways of managing this resistance. Beware of vendors that supply off-the shelf solutions that do not fit the company’s needs.Don’t allow sacred cows. Determine whether the desire to outsource an activity is driven by its low contribution to core competencies. Decide how much control is needed for various HR activities and whether control can be retained with outsourcing. Anticipate changes to HR culture and careers. For many organizations.

Downsizing can be used as a strategic option that management can exercise in order to boost equity value. Voluntary Redundancy & ways of downsizing Voluntary Redundancy (VR) Voluntary redundancy (VR) has become widely used as a method of dealing with redundant employees. A good retrenchment strategy can thus be implemented well in terms of re-organizing but poorly in terms of staffing. major contributors to the cost of production are basic raw materials and consumables. Except for highly labour intensive manufacturing or process units. In many large size organizations. but what are the advantages of adopting it and under what conditions it will be effective? Does it have any disadvantages of adopting. and what can be done to increase the supply of volunteers if there is a shortfall? The starting point is an investigation into what is meant by voluntary redundancy: neither law nor practice has defined the term precisely (1). but soon strong firms looking to boost shareholder value also adopted the policy. This programme is often used to implement retrenchment strategies. Downsizing began as the strategy of sickly companies shedding workers in the face of weak demand. but the catalyst for it will change. There was a time when voluntary retirement used to be the last resort for organizations facing compelling business conditions. Companies have been downsizing through the process of a compensation EMERGING TRENDS IN HR Page 15 . operations or jobs. The ultimate objective is to reduce the total manpower for savings in wage cost to bring down the cost of product or services. power and fuel. But to-day voluntary retirement schemes (VRS) have become an in-thing for surviving in the fiercely competitive market. Downsizing sometimes called “rightsizing” refers to the planned elimination of positions. If this is the ultimate objective.strategic workforce management. maintenance and spares. one has to examine how much the wage cost constitutes as a percentage of the total cost and how much the other factors of production contribute to the total cost of production. downsizing will remain part of the work force landscape. there is no more lifetime employment. the depreciation charges for plant and machinery and of course the cost of servicing the loans from the banks or servicing the debentures.

loss of monopoly. a leading manufacturer of automobiles. Hindustan Motors. A well-known manufacturer of textiles. Ashok Leyland. reduction of market shares. in India and abroad.package based on Voluntary Retirement Schemes (VRS). The symptoms of such decline are seen in gradual decline in profits. The reasons under which employers can lay-off workers are very specific and limited in number. The issue is still pending before Calcutta High Court. weaving and grey-folding departments which would have affected 1. accumulation of raw material and finished stock due to recession. shortage of working capital. The major ways of downsizing are as follows: • Lay-off • Retrenchment • Closure • Voluntary Retirement Lay-off It is a temporary measure to reduce workforce in case the organisation faces problems like shortage of fuel or power. Mafatlal Industries had declared a 35 days lay-off in its spinning. According to Section 25-m of the Industrial Disputes Act. decided to shut down its Ennore plant for 12 days EMERGING TRENDS IN HR Page 16 . in case the number of workers exceeds 100. breakdown of machinery or natural calamity. fast emergence of new technology. The lay-off was declared illegal by the Labour Department.200 workers. When these symptoms are round the corner. 1947 unless the lay-off is due to shortage of Power or natural calamity no worker can be laid off without the prior permission of the Appropriate Government. in the recent past entered into a legal course against the order of refusal of permission of lay-off. etc. one of the key players in Automobiles. management must initiate action through strategic planning. It was aimed at cutting production due to recession in the textile industry and cutting costs. Another Company. VRS is viewed as one of the methods for the turnaround of the company when business cycle is on a declining curve.

At HCL there are no softoptions. The employer can prune the workforce using this method and pay them the retrenchment compensation as stipulated in the Act. 1998 when stock piled up due to recession. HCL managed the downsizing by identifying three clusters of people whom they call EMERGING TRENDS IN HR Page 17 . 1947. an organization can retrench employees for any reason other than termination of employment due to disciplinary action. Paul and Thomas (1994) to track their lay-off announcement Motorola and Texas Instruments. Retrenchment is not just a simple means to downsize workforce. 199). Such cases of Government approvals in case of large companies are few and far between. But the employer has to retrench the junior. Managers are ruthlessly performance-oriented. Motorola adopted a different strategy.’ Retrenchment Under the Industrial Dispute Act. It does not mean retrenching all the employees due to closure. retrain. It involves a tricky and complex process for identifying the non-performers. The Philosophy behind this was ‘We are in the boat together. The employees were required to work one day less in every two weeks during the recession period. both US-based companies adopted different strategies to cope up with recession. in the commercial vehicle sector. Texas Instrument terminated the jobs of several thousand employees and had to rehire. That period was not treated as lay-off technically and workers were entitled to full wages and allowances except incentives. According to a study of the top 100 Fortune –500 companies by Kenneth. It was done with the cooperation and approval of the union. who are required to be separated from the organization June. Every employee is ranked on the merit list. and motivate the employees when things improved. With a single –minded focus on performance the company firmly believes that what is good for it is the best for its people.most employees even if they are competent based on the LIF (Last in First out) principle.25 lakhs on idle wages (Human capital Oct. In February 1994 113-crore Modern Food Industries was allowed to close down its Ujjain factory and retrenched 126 employees. Very recently the Union Cabinet has approved the retrenchment of 218 workers in Hindustan Vegetable Oils Corporation a public unit based in Delhi. The unit was ordered to shut down by the High Court a few years back and it had been incurring a monthly expenditure of Rs.

1982 defines “closure” to mean “the permanent closing down of a place of employment or part thereof”. In1994. the maximum compensation payable to a workman is his three months’ salary. EMERGING TRENDS IN HR Page 18 . Section 2 (cc) of the Industrial Disputes (Amendment) Act. The Government has to be notified at least 90 days before the intended closure. The losses were to the tune of Rs. Today’s and Tomorrow’s people [YTT]. Closure An employer can close down the whole or part of a unit if the circumstances that lead to closure are beyond the control of the employer. In case of closure on account of unavoidable circumstances beyond the control of employer. Levi Strauss & Co. where unemployment is a big problem. The Ghatkapor (Maharashtra) unit of BOC has been given permission by the Maharashtra Government shut down on grounds of continuing losses and poor productivity. 1999). Therefore they are the first to go. to give one month’s and pay compensation equal to days’ average pay for every completed year of continuous service or any part thereof in excess of six months. Approval of the Government before lay-off. This technique is applied through the monthly performance reviews for each business unit. retrenchment and closure is compulsory. the renowned manufacturer of Jeans has planned to shut down around 11 of the North American facilities and cut 5900 Jobs by shifting most of its production activities overseas to reduce labour costs (Human Capital March. Tomorrow’s people are the super-achievers at whom the organization throws stretch targets and plum rewards. 1999). The Bhandup plant of Hindustan CibaGeigy in Maharashtra was closed down and the employees were offered VRS. citing reasons there for. Today’s people are those who have maintained consistent performance and are recommended for further training to tap their potential.Yesterday’s. March. Section 25 (FFF) imposes a liability on the employer who closes down his business.. One of the most important drawbacks of these methods of downsizing is that they cannot be used at the discretion of the employer in case of large organisations (where the number of employees exceed100). 8 crores in the past seven years (Human Capital. Yesterday’s people are those who are characterised by inflexible attitudes and declining performance. the Government is very reluctant to give permission for cutting jobs even if the reasons are genuine. In a country like India.

VRS is considered to be a softer option compared to retrenchment because of legal EMERGING TRENDS IN HR Page 19 . Trade Unions also offer stiff resistance. is virtually corporate India’s only option today for shedding manpower. past service. Synthetics had closed down its fibre plant in Kota. The Supreme Court eventually declared the closure illegal and ordered the reinstatement of 1.Very often. In addition to this another datum may be on value added per employee and value added per rupee of wages. the company must compare its vital data for all the factors with the best company in the same or similar trade. J.100 workers with full compensation. long battles are fought in the court of law where the balance may tilt in favour of any one of the parties. It gives people choice and discretion rather than making them the victims of management decisions. as it is often called. A case was filed against the company and the legal battle continued for 14 years. Voluntary separations cause less pain and agony. The most human technique for downsizing the workforce in an organization is the VRS. types of compensation packages being offered in the industry / region and also the financial situation of the existing company. This single datum may decisively go in favour of introducing VRS.K. By and large. The method offers employees a lucrative severance package: they cannot refuse particularly since law makes it tax-free so that they retire of their own volition. future service. Such benchmarking helps in understanding the level of efficiency at which the company is presently working. For the purpose of preparing VRS. The compensation package normally determined on existing salary. The golden handshake. Benchmarking Management VRS practices and Compensation Having identified the reasons for the present downtrend of the organization and also having decided the probable actions required for rectification. the payback period of the compensation package in companies is less than three years. data on inter-firm comparison of wage bill including welfare expenses. particularly with reference to the nearest competitor could be an eye an eye opener for management and collectives. Voluntary retirement is the golden route to retirement and has become one of the more favoured ways of dealing with the redundant workforce in an organization.

In the year the smelter was losing Rs. success and failures of the different VR schemes. INDAL handled the situation in a very human and compassionate manner. designing and implementing their own scheme. with a view to collect their VR schemes. The VRS is also commonly referred to as voluntary separation Scheme (VSP) or the Golden Handshake Programme (GHP). etc. It provided adequate medical and insurance coverage for the employees in the post. some fringe benefits like medical reimbursement/insurance are offered even after voluntary retirement. the company built in additional incentives based on age-like medical insurance. Before designing and introducing scheme the company did a lot of preparatory work. If this is not adequate. Reflecting its old value system and respect for its people. Thus. in most cases. This was the sharp escalation in power costs imposed by KSEB. As the name implies. It is worthwhile to mention that the VRS that the company designed and implemented was unique. 6 lakhs. Hindustan Lever. Voluntary Retirement Scheme (VRS) has become one of the ways of dealing with redundant human resources in an organization. This covered EMERGING TRENDS IN HR Page 20 .difficulties. The decision to implement the VRS though painful was carried out as the last available alternative to reduce surplus manpower. Ciba-Geigy. trade union opposition. and obligations under the existing collective agreements and considerations of good industrial relations. Power is an important input in aluminium smelting and is considered almost a raw material for the production of the metal world over. In this context. The team also studied the strengths and weaknesses. some allowance for settlement at native place or any place of the person’s choice if such settlement/resettlement occurs within a stipulated time. higher compensation than is paid under retrenchment /normal retirement is paid along with. before developing. What was unique about VRS (policy) adopted by the company was that over the benefits payable as per public sector enterprises. As an inducement. Premiere Automobiles.retirement years. A team of senior officers was sent to Bombay to visit some of the well-known companies. etc. opportunity is given to employees to retire voluntarily. namely. Entrepreneurial Development Programmes were developed for employees accepting VRS. The company also granted education scholarships to the children of retired employees. The scheme was designed to enable the retired employees to identify with the company. INDAL’S Belgaum Smelter case is a unique success story of dealing with 472 redundant workers when 187 operating pots at Belgaum were de-energised and went off production during 1992.

A good counselling session must include practical advice about how to use or invest the sum received as compensation under VRS. Counselling should be used as a process to communicate effectively with the organisational members so that they realise that the VRS is last resort for the revival and survival of the organisation. arranging loans.(for details please see the enclosed case on Belgaum Smelter. Age profiles.counselling. it is to be realised that for making the scheme successful. An age profile of employees with a high proportion of people in the early retirement age EMERGING TRENDS IN HR Page 21 . a good amount of planning and preparation is essential. employment pattern and earnings levels may be relevant to the effective use of VR. 1993) . length of experience. but certain conditions encourage or perhaps are necessary for its deployment (Paul Lewis. Transparency in the management actions and fairness in its dealings are extremely necessary. efforts to be made to build a good deal of counselling services. All the issues pertaining to it must be considered concurrently in tandem. Conditions Favouring the Effective Use of VR The fact that management to use or willing to use VRS is a prerequisite for introduction of the technique. etc. According to him the facilitating factors comprise: • Availability of sufficient finance • Favourable workforce characteristics • Absence of union opposition of control. The retained employees shall also need advice not only on investment but also on income tax implications. and • Availability of work for non-volunteers It seems clear that more money is needed if an individual is to be persuaded rather than forced to leave. It is evident that if a decision is taken for downsizing the organisation. Counselling Services From the very beginning initiation of VRS. organising relevant training. helping them with project profiles. tax and investment planning.

VR assumes that work is available for those who want to stay. a relatively old workforce. with substantial length of service in individual cases will increase the size of retirement packages because the statutory formula is based on partly upon age and length of service. this may prove successful. On the other hand. VR should be applicable to any company for slimming exercise rather than closure. The initiative for VR may come from the union rather than the employer. If the union has little control over its members. The question of union attitude towards VR and the extant which a union can prevent its members volunteering it thinks it is necessary to communicate directly to employees in the hope of bringing forth volunteers. New trends of HR EMERGING TRENDS IN HR Page 22 .group means that what is typically the best financial deal is available to a relatively large proportion of workforce.

Polycentric approach 3. Ethnocentric approach 2. (B) Human Resource Outsourcing: It consists of three types: 1. Transformational HRIS 3. Tactical HRIS (D) Use of SIX SIGMA in HR THE ROLE OF HR IN ORGANIZATIONS • • • • Boosting Productivity Preparing the Organization for Change Building Employee Commitment and Morale Involvement in Determining and Implementing the Strategic Direction of the Organization EMERGING TRENDS IN HR Page 23 . Business Process Outsourcing 3. Application Service Provider 2.(A) International Human Resource Management (IHRM) 1. Geocentric approach. Strategic HRIS 2. Total HR Outsourcing (C)Human Resource Information System (HRIS) has three types 1.

• With the increase of global job mobility. recruiting competent people is also Increasingly becoming difficult.HR IN THE 21ST CENTURY • • • • • • • • • • Becoming the employer of choice Winning the war for talent Contributing to the organization as a strategic business partner Cultivating leadership through e-learning and development Recognizing the workforce as a profit centre Thinking globally while complying locally Incorporating flexibility and adaptability into the organization Embracing technology as the underlying facilitator The policies of many companies have become people centric Attracting and retaining of human resource has become difficult as loyalty factor is losing its shine. especially in India. COMPETENCIES FOR 21ST CENTURY HR PROFESSIONALS EMERGING TRENDS IN HR Page 24 . • Human Resource Outsourcing is the new name in the industry to replace the redundant traditional HR department.

and Decision-making Creating the "Learning" Organization Designing Organizations. initiative and enthusiasm. openness. b) Motivation. equity and consensus.HR policies based on trust.• • • • • • • • • • • • Developing Effective Reward and Recognition Systems Creating and Becoming Transformational Leaders Engaging the Workforce in Continuous Change and Innovation Collaborating in Resolving of Strategic Problems Partnering with Community Groups and Business Organizations Encouraging Real Employee Involvement Coaching and Counselling Individuals and High Performance Teams Empowering and Facilitating Learning. c) Relations. make people feel like winners.Fair treatment of people and prompt redress of grievances would pave EMERGING TRENDS IN HR Page 25 .Create conditions in which people are willing to work with zeal. Change. Processes. and Performance Systems Keeping Up-to-Date on Technological Advances in HR Applications Maintaining a Global Business Perspective HR Managers today are focusing attention on the following a) Policies.

A local employee heads a subsidiary because headquarters’ managers are not considered to have adequate local knowledge.Commitment to quality in all aspects of personnel administration will ensure success. d) Change agent. For example. Polycentric. The home country practice prevails with this approach. These people constitute a mobile base of managers who are used in a variety of facilities as the need arises. 2. Electrolux (the vacuum cleaner company) has for many years attempted to recruit and develop a group of international managers from diverse countries. Headquarters from the home country makes key decisions. the cultural values and business practices of the home country are predominant. Subsidiaries usually develop human resource management practices locally. Geocentric or global. The company that applies the global integrated business strategy manages and staffs employees on a global basis. 3.the way for healthy work-place relations. HUMAN RESOURCE MANAGEMENT IN A CENTURY OF GLOBALIZATION (IHRM) APPROACHES TO MANAGING AND STAFFING SUBSIDIARIES 1.Prepare workers to accept technological changes by clarifying doubts. In the ethnocentric approach. Ethnocentric. e) Quality Consciousness. and the subsidiaries follow the home country resource management practice. Each subsidiary manages on a local basis. Companies following EMERGING TRENDS IN HR Page 26 . Headquarters develops a managing and staffing approach and consistently applies it throughout the world. employees from the home country hold important jobs.

MAJOR FUNCTIONS OF INTERNATIONAL HUMAN RESOURCE MANAGEMENT  RECRUITMENT AND SELECTION Recruitment and selection are the processes through which an organization takes in new members. Traditionally. Centralized: . Recruitment involves attracting a pool of qualified applicants for the positions available. 3. In companies that function in a global environment we have to distinguish different types of employees. Third country national. Selection requires choosing from this pool the candidate whose qualifications most closely match the job requirements. they are classified as three types: 1. training originates at the EMERGING TRENDS IN HR Page 27 . The employee’s nationality is neither that of the organization nor that of the location of the subsidiary.With a centralized approach. 2.the ethnocentric approach assume the home country approach is best and that employees from other parts of the world can and should follow it.  DEVELOPMENT AND TRAINING The overall aim of the development function is to provide that adequately trained personnel in a company are capable to fulfil their goals. Host country national. The employee’s nationality is the same as the location of the subsidiary. as well as to contribute to better performance and growth with their work Creation and transfer of international human resource development programs may be carried out in two ways: 1. Parent country national. The employee’s nationality is the same as the organizations.

Local people develop training materials and techniques for use in their own area. often adapting to local situations. but the training develops through input from both headquarters and subsidiaries staff. In Japan. following a polycentric model. the failure of U.headquarters and corporate trainers travel to subsidiaries. The statistics showing their efficiency on that matter are not encouraging. A geocentric approach is also centralized.S. For example.  PERFORMANCE EVALUATION In companies. training is on a local basis. This fits the ethnocentric model. One EMERGING TRENDS IN HR Page 28 . the possibility of spending holidays in the company’s holiday facilities at a favourable price and also other advantages MANAGEMENT OF EXPATRIATES One of the most challenging tasks for any company operating internationally is to manage its expatriates. Decentralized In a decentralized approach. the failure rate is less than 5% for their expatriates. the cultural backgrounds of the trainers and trainees are usually similar. expatriates (the percentage who return prematurely. Trainers could be sent from various positions. the performance evaluation is most frequently carried out for administration or development intentions  REMUNERATION AND BENEFITS Remuneration of employees has a key role in acquiring new employees and is important for employees as well as for the employers. without completing their assignment) is to be in the 20 – 40% range. 2. When training is decentralized. while benefits cover better health care. Pay is the basic resource of living of the employees.

2. a tendency to use international assignments as a way to get rid of problem employees. lack of cross-cultural training.S. he must adjust in the same way as when going abroad. management should: Emphasize cultural sensivity as a selection criterion Establish a selection board of expatriates Required previous international experience Explore the possibility of hiring foreign-born employees who can serve as “expatriates” at a future date Screen candidates’ spouses and families      EMERGING TRENDS IN HR Page 29 . and family problems.These are: career blockage. an overemphasis on technical qualifications. culture shock. Selection of expatriates To choose the best employee for the job. it is important to understand the reasons behind expatriates’ high failure rates so that preventive measures can be taken. expatriates do. Six factors account for most failures. Cross-cultural adjustment Expatriates and their families need time to become familiar with their new environment and to become comfortable living there 3..of the reasons for the difference is that Japanese expatriates receive far more orientation and language instruction than U. The reasons for expatriate failure In international companies. 1. 4. although their relative importance varies by firm. The disorientation experienced by a returning expatriate is known as reverse culture shock. Expatriate reentry After the expatriate completes his assignment and returns home.

in addition to his assigned job responsibilities. 6. troubleshooter. Three common approaches are: a home-based policy. An organization’s general policy influences expatriate remuneration.Expatriate evaluation and remuneration The performance evaluation of expatriate managers is particularly difficult. with benefits usually tied to the home country. trainer.5. HUMAN RESOURCE MANAGEMENT OUTSOURCING The use of outside bussiness to perform necessary business activities and process in lieu of internal capabilities. and often a new language. but should not to be considered in isolation from other costs/ benefits. a host-based policy and a regionbased policy. The host-based policy sets salaries at the level of the host country. or diplomat. A manager often steps into the role of counselor. Lack of training is a major cause of expatriate failure. With the need for adapting to a new culture. The job a person does abroad can include much more than what he does at home. EMERGING TRENDS IN HR Page 30 . Remuneration for employees working outside their home countries reflects whether their relocation is within their home region or in another region. many factors influence expatriate performance.With a home-based policy. Expatriate training expatriates are more successful when their organizations train them to prepare for their life and work abroad. Finally. emloyees’ remuneration follows the scale of their home countries. region determines the third approach. Advantages of outsourcing Reducing costs: Key determinator in many outsourcing decisions. Outsourcing basic human resource services can be the key to achieving a more influential and strategic role for the HR function. a different way of doing business.

Applications of HRIS The efficiency of HRIS. Moving HR up the value chain: Outsourcing human resource administration can lead to a shift in HR focus towards policy and decision making. Human resource information systems (HRIS) have increasingly transformed since it was first introduced at General Electric in the 1950s. self-contained HRIS.Increasing effectiveness of HR delivery: Experienced outsourcing providers can often deal with HR processes more effectively. Some of the many applications of HRIS are\ Clerical applications. HRIS has gone from a basic process to convert manual information keeping systems into computerized systems. The third generation took systems far beyond being mere data repositories and created tools with which human resource professionals could do much more. HUMAN RESOURCE INFORMATION SYSTEMS With the changing world and constant new technology that is available. EMERGING TRENDS IN HR Page 31 . the systems are able to produce more effective and faster outcomes than can be done on paper. The idea was to integrate many of the different human resource functions. reducing employee turnover costs and speeding up the pace of growth. to the HRIS systems that are used today. Providing greater expertise: External providers may offer greater levels of specialist knowledge or experience than affordably available in-house. broad-based. For example. risk management. managers need to be aware of the technology that will increase effectiveness in their company. Human resource professionals began to see the possibility of new applications for the computer. recruitment may be undertaken more quickly. To aid organizational growth: Fast-growing organizations can lack the HR capacity to deliver business objectives. applicant search expenditures. making HR outsourcing an attractive solution. a feature-rich. The result was the third generation of the computerized HRIS.

analyze. attendance reporting and analysis. and distribute pertinent information regarding an organization's human resources. The HRIS system is usually a part of the organization's larger management information system (MIS) HRIS can be applied in the following areas of HRM • • • • • • • • • • • • • • • • • HR planning Succession planning Work force planning Work force dynamics analysis Staffing Applicant recruitment and tracking Employee data base development Performance management Learning and development Compensation and benefits Pay roll Job evaluation Salary survey International compensation Benefits management Develop innovative management. Human Resources Information Systems (HRIS) is an integration of HRM and Information Systems (IS). compliance with government regulations. financial planning. manipulate. training experiences. Structure Develop IT EMERGING TRENDS IN HR Page 32 . store. turnover analysis. HRIS or Human resource Information system helps HR managers perform HR functions in a more effective and systematic way using technology. retrieve. accident reporting and prevention and strategic planning. flexible-benefits administration. With the many different applications of HRIS. succession planning. human resource planning. It is the system used to acquire. it is difficult to understand how the programs benefit companies without looking at companies that have already benefited from such programs.

This process improvement methodology was developed in the 1980s in Motorola's high-volume manufacturing environment. EMERGING TRENDS IN HR Page 33 . The Six Sigma HR team was established.and low-volume production environments. Actually. facilitator (Six Sigma Black Belt) and mentor (HR Director). manufacturing processes. involving HR process owners.Barriers to the success of an HRIS: • • • • • • • • • Lack of management commitment Satisfaction with the status quo No or poorly done needs analysis Failure to include key people Failure to keep project team intact Politics / hidden agendas Failure to involve / consult significant groups Lack of communication Bad timing (time of year and duration SIX SIGMA IN HRM Six Sigma is a logical and methodical approach to achieving continuous improvements in areas critical to the success of any manufacturing or serviceoriented business. Internal customers were identified as critical stakeholders and their participation was secured through their direct/indirect representation or through feedback communication. and to both high. Six Sigma is applicable to both manufacturing and service industries. This has contributed to the creation of the general opinion that Six Sigma is only applicable to high-volume.

The focus has gradually shifted from monitoring MOPs to measuring and controlling inputs that control MOPs and reporting MPOs Trends. Monitoring of improvement actions is realized through implemented HR database. trends and other monitoring charts). observations and improvement actions to be completed by the next review and a Six Sigma score chart. Vital process inputs and process results were monitored and correlation verified. which effectively revealed shortcomings in the processes with immediate remedies and benefits. Communication. Control The key control objective is to sustain and get a continuous improvement process embedded into HR processes. conclusions. histograms. Use of SIX SIGMA Improve Development and implementation of improvement solutions followed identification of vital input parameters that affect selected process measures of performance (MOPs). rewarding and development were selected as the first process. It contained process analysis results (control charts.The analysis started with the development of HR process maps. A quarterly HR review report is developed and issued and presented by HR. resourcing. EMERGING TRENDS IN HR Page 34 .

• Managers need to be protected from career development risks.FINDINGS OF PAPER The Emerging trends could play a crucial role in • Selection of employees requires careful evaluation of the personal characteristics of the candidate and his/her spouse. re-entry problems and culture shock. EMERGING TRENDS IN HR Page 35 . • Training and development extends beyond information and orientation training to include sensitivity training and field experiences that will enable the manager to understand cultural differences better.

performance evaluations should combine the two sources of appraisal information. • Human resource outsourcing is a new accession that makes a traditional HR department redundant in an organization. development. • Outsourcing results into cost effective Human Resource activities and utilization of people with distinctive capabilities to create unsurpassed competence in an area. EMERGING TRENDS IN HR Page 36 .sigma uses rigorous analytical tools with leadership from the top and develops a method for sustainable improvement. • Six.• To balance the pros and cons of home country and host country evaluations. • Compensation systems should support the overall strategic intent of the organization but should be customized for local conditions. RECCOMENDATION • IHRM could be used to improve workforce skills and abilities in order to exploit environmental opportunities and neutralize threats. etc with the use of SIX-SIGMA . counselling. • Indulge in continuous quality improvement through TQM and HR contributions like training.

It has quickly commercialized ideas from its research labs. Motorola is famous for short product development cycles. HRM technology solutions can help savvy human resources (HR) professionals strategically manage through the crisis and prepare as the climate shifts to the EMERGING TRENDS IN HR Page 37 . workers and other affected groups.• HRIS is used to decentralize operations and rely on self-managed teams to deliver goods in difficult times e. and workforce reductions in the hardest-hit segments. benefits and compensation cost management. • Lay off and retrenchment of workers in a smooth way explaining facts to unions. rather than technical. CONCLUSION Human resource management (HRM) will be a key area of focus in 21ST century as companies and government organizations put in place strategies to cope with the economic crisis and recovery.g. The so called "war for talent" is on the backburner as the focus shifts to hiring freezes. • The most important skills for 21st century HR managers are conceptual and interpersonal.

upside. Trends that we will follow in 21st include managing and developing talent. EMERGING TRENDS IN HR Page 38 . embracing HRM analytics. Web 2.0 adoption. and HR technology strategy.