Industrial Management

Shahnaz Sharmin
Lecturer as a Guest teacher,
Department of Humanities &
Social Sciences (HSS)
DUET, Gazipur
Basic concepts of Human Resource
Management (HRM)
 Definition of HRM
■ HRM is a subset of the study of management that focuses on how to hire, train,
motivate, and maintain employees.
■ Management is a set of activities (including planning, organizing, leading, and
controlling) directed at an organizations resources (human, financial, physical, and
information) with the aim of achieving organizational goals in an efficient and
effective manner.
 Definition of HRM
The set of organizational activities directed at attracting, developing and maintaining an
effective workforce.
KEY ASSUMPTION
• The quality and effectiveness of the organization is determined by the quality of
the people that are employed.

• Success for most organizations depends on finding the employees with the skills
to successfully perform the tasks required to attain the company’s strategic goals.
HR is multidisciplinary:
■ It applies the disciplines of Economics (wages, markets,
resources), Psychology (motivation, satisfaction), Sociology
(organization structure, culture) and Law (Maternity Benefit
Act, Min. Wage, Act, Factories Act, etc.).
■ HR is embedded within the work of all managers, to get
things done.
Human Capital
■ Capital: Capital is wealth in the form of money or assets.
■ Human Capital Management (HCM): Human capital is not solely the people in
organizations— it is what those people bring and contribute to organizational success.
Human capital is the collective value of the capabilities, knowledge, skills, life
experiences, and motivation of an organizational workforce.
■ Sometimes human capital is called intellectual capital to reflect the thinking, knowledge,
creativity, and decision making that people in organizations contribute.
Personnel Management
Personnel management is a traditional approach, predominantly administrative, record-
keeping function that aims to establish and maintain equitable terms and conditions of
employment. It rarely had a direct say in the company’s strategy and did not involved itself
with operations aspects, remaining a purely staff function.
 Differences Between Personnel Management and Human
Resource Management
Basis for Personnel Management Human Resource Management
Comparison
Meaning It means management of people employed It means management of employees skills,
abilities, knowledge, aptitude, talents etc.
Approach Traditional Modern
Treatment of Machines or tools Assets
manpower
Type of function Routine function Strategic function
Basis of pay Job evaluation Performance evaluation
Management Transactional Transformational
roles
Communication Indirect Direct
Decision making Slow Fast
 Principles of HRM
 Treat people with respect and dignity – motivation and commitment will be increased.
 Treat people as adults-
 Deal with people as complete individuals- an employee’s family life may affect his working life.
 Treat all employees with justice- selection is based on merit and equal opportunity.
 Provide people with opportunities for growth and development – KSA.
 Make people feel that they are important –valuable asset.
 Rewards should be earned, not given -students should earn good grades through hard work.
 Do not underestimate the potentials of people - employees should be empowered to utilize their talents.
 Supply people with all relevant information- such as the mission statement, the values it cherishes, and
trading prospects.
 Importance of HRM
 Recruit & retain talent
 Train people for changing roles
 Improve and enhance the organization
 Maintain a healthy, accepting workplace culture and environment
 Promote team sprit
 Develop loyalty & commitment
 Increase job satisfaction
 Generate employment opportunity
 Bridge the gap between employees’ performance and the organization's strategic objectives
 Objectives of Human Resource Management

Societal Organizational Functional Personal

Objectives Objectives Objectives Objectives
 Objectives of Human Resource Management
Societal Objectives
 To be ethically & socially responsible to the needs & challenges of society
 It includes legal issues such as equal opportunity and equal pay for equal work.
Organizational Objectives
 Actions taken that help to ensure the efficiency of the organization.
 This includes providing training, hiring the right number of employees for a given task or maintaining high
employee retention rates
Functional Objectives
 Guidelines used to keep HR functioning properly within the organization as a whole.
 This includes making sure that all of HR's resources are being allocated to their full potential.
Personal Objectives
 To assist employees in achieving their personal goals in a manner that their personal goals enhance the
individuals contribution to the organization.
 Managerial Functions of HRM
1. Planning –
 To determine the number and type of employees needed to accomplish organizational goals
 Research is an important part of this function
 Information is collected and analyzed to identify current and future human resource needs
 And to forecast changing values, attitude, and behaviour of employees and their impact on organization.
2. Organizing –
 Tasks are allocated among its members, relationships are identified, and activities are integrated towards a
common objective.
 Relationships are established among the employees so that they can collectively contribute to the
attainment of organization goal.
 Continued………………….
3. Directing –
• Activating employees at different level and making them contribute maximum to the organization
• Taping the maximum potentialities of the employees is possible through motivation and direction.

4. Controlling –
 After planning, organizing, and directing, the actual performance of employees is checked, verified, and
compared with the plans.
 If the actual performance is found deviated from the plan, control measures are required to be taken.
 External Factors Impacting HRM

Social & Political &

Technological Economic
cultural legal
environment environment
environment environment
 Awareness of External Factors
In addition to managing internal factors, the HR manager needs to consider the outside forces at play that may
affect the organization. External factors are things from outside an organization that directly or indirectly
influences it. Oftentimes, these external factors are outside of the control of organization. These influences
include the social and cultural, technological, economic, and political and legal environments. One way to
remember these factors is to link them to the word STEP:
 S for 'social and cultural'
 T for 'technological'
 E for 'economic'
 P for 'political and legal'

1. Social and cultural

 It includes such things as work ethic, attitude towards work, and employee motivations.
 For example, monetary rewards may be valued highly in some cultures, while a greater work-life balance is valued in other cultures.
HRM must assess these cultural factors and match motivators accordingly. If money is king, direct financial compensation in the
form of high wages may suffice. However, if work-life balance is more important, a generous vacation and paid leave package may
be more motivating.
 A society's social and ethical views of the role of business in society will also influence how HRM operates. For example, once upon
a time, child labor was not considered unethical. Now, not only is it considered unethical, but it's also illegal.
2. Technological environment
 Technology also can present opportunities and challenges for human resource management professionals.
 New technologies may require HRM professionals to hire new employees competent in the new
technologies.
 Current employees may need to be retrained or released if their skills are no longer relevant to
organizational needs. Even something as simple as a new version of a word processing program or a new
digital copier may require HR-sponsored training.
3. Economic environment
 Economic conditions are a major external factor that is pretty much outside of the control of HRM but
which can have a huge impact on the company.
 Recessions, economic booms, and the general rate of inflation affect consumer demand , which affect
personnel needs.
 Unemployment rate affects the market rate for wages and salaries
 Globalization also have a dramatic effect on HRM. It creates a more competitive environment requiring
increases in productivity and more efficient employees. Selecting and developing employees for maximize
productivity.
.

4. Political & legal environment

 Governments prescribe policies from time to time related to management of human resources. These
policies have to be adhered by all the organizations which are covered by these policies.
 There cannot be discrimination among employees on the basis of sex, caste, religion, or place of origin.
 In certain sectors, at least prescribed percentage of total employees must be selected from personnel
belonging to backward classes, scheduled castes/tribes, and physically handicapped.
 Employee remuneration, safety, working conditions, and industrial relations systems must conform to
various legal prescriptions.
Operative Functions
1. Recruitment and Selection – Recruitment of candidates is the function preceding
the selection, which brings the pool of prospective candidates for the organization
so that the management can select the right candidate from this pool.
Recruitment & Selection Process:
External recruiting:
Managers look outside the firm for people who have not worked at the firm before.
Managers advertise in newspapers, hold open houses, recruit at universities, and on the
Internet.
– External recruitment is difficult since many new jobs have specific skill needs.
– A multi-prong approach to external recruiting works best.
Internal Recruiting:
Positions filled within the firm.
• Internal recruiting has several benefits:
– Workers know the firm’s culture, may not have new ideas.
– Managers likely already know the candidates.
– Internal advancement can motivate employees.
– Outsourcing:
Managers can decide to contract with outside workers rather than hiring them.
– Outsourcing is more flexible for the firm.
– Outsourcing often provides human capital at a lower cost.
• Outsource problems: Managers lose control over output.
– Outsource contractors are not committed to the firm.
• Unions typically are against outsourcing that has potential to eliminate member’s jobs.
2. Job Analysis and Design – Job analysis is the process of describing the nature of a job
and specifying the human requirements like qualification, skills, and work experience to
perform that job. Job design is the process of deciding on the contents of a job in terms of its
duties and responsibilities, on the methods to be used in carrying out the job, in term of
techniques, systems and procedures and on the relationships that should exist between the
jobholder and his superiors, subordinates and colleagues.
3. Performance Appraisal – performance appraisal is a systematic and periodic process of
measuring an individual's work performance against the established requirements of the job.
4. Training and Development – This function of human resource management helps the
employees to acquire skills and knowledge to perform their jobs effectively. Training and
development programs are organized for both new and existing employees. Employees are
prepared for higher level responsibilities through training and development.
5. Wage and Salary Administration – Human resource management decides employees
compensation which includes – wage administration, salary administration, incentives,
bonuses, fringe benefits etc.

Wage- payment for labor or services usually according to contract. Hourly, daily. Weekly
payment.
Salary- payment, usually paid monthly and usually expressed as an annual amount, made
by employers to employees in return for work done.

■ Fringe Benefit: Compensation in addition to direct wages or salaries, such as company

car, house allowance, medical insurance, paid holidays, pension schemes, subsidized
meals.
Pay
Base Wage
– minimum fixed amount of money which a worker is entitled to be paid by his employer
(Basic pay).
– Competency Based Pay-pay is linked to job-relevant skills, knowledge, and experience
(Qualification pay)
• Incentive Pay-linked to job performance
– Incentive pay refers to giving employees bonuses or other forms of compensation in
exchange for going above and beyond their normal duties.
– can increase motivation (Good conduct pay)
– also known as pay-for-performance.
6. Employee Welfare – This function refers to various services, benefits, and facilities that
are provided to employees for their well being.
7. Maintenance – Human resource is considered as asset for the organization. Human
resource management always try to keep their best performing employees with the
organization.
8. Labour Relations – This function refers to the interaction of human resource
management with employees who are represented by a trade union. Employees comes
together and forms an union to obtain more voice in decisions affecting wage, benefits,
working condition, etc,.
HR Planning
Human Resource Planning (HRP) is the process of forecasting the future human resource
requirements of the organization.
HRP involves the following steps
A. Analysis of Organizational Plans and Objectives :
Human resource planning is a part of overall plan of organization. Plans concerning
technology, production, marketing, finance, expansion and diversification give an idea about
the volume of future work activity. Each plan can further be analyzed into subplans and
detailed programs. It is also necessary to decide the time horizon for which human resource
plans are to be prepared.
B. Forecasting Demand for Human Resources :
Human resource planning starts with the estimation of the number and type of personnel
required at different levels and in different departments.
C. Forecasting Supply of Human Resources :
One of the important areas of human resources planning is to deal with allocation of persons
to different departments depending upon the work-load and requirements of the
departments. While allocating manpower to different departments, care has to be taken to
consider appointments based on promotions and transfers. Allocation of human resource
should be so planned that available manpower is put to full use to ensure smooth functioning
of all departments.
D. Estimating Manpower Gaps :
Net human resource requirements or manpower gaps can be identified by comparing
demand and supply forecasts. Such comparison will reveal either deficit or surplus of human
resources in future. Deficits suggest the number of persons to be recruited from outside,
whereas surplus implies redundant to be redeployed or terminated. Similarly, gaps may
occur in terms of knowledge, skills and aptitudes. Employees deficient in qualifications can
be trained whereas employees with higher skills may be given more enriched jobs.
E. Matching Demand and Supply (Gap) :
Once the manpower gaps are identified, plans are prepared to bridge these gaps. Plans to
meet the surplus manpower may be redeployment in other departments and retrenchment in
consultation, with the trade unions. People may be persuaded to quit through voluntarily
retirement. Deficit can be met through recruitment, selection, transfer, promotion, and
training plans.
F. Evaluate and Revise the strategy.
HRM challenges
 FUTURE CHALLENGES BEFORE THE MANAGERS

a. Increasing Size of Workforce : The size of organizations is increasing. A large number

of multinational organizations have grown over the years. The number of people working in
the organization has also increased. The management of increased workforce might create
new problems and challenges as the workers are becoming more conscious of their rights.
b. Increase in Education Level : The governments of various countries are taking steps to
eradicate illiteracy and increase the education level of their citizens. Educated consumers
and workers will create very tough task for the future managers.
c. Increasing Aspirations of Employees : Considerable changes have been noted in the
worker of today in comparison to his counterpart of 1950s. The workers are becoming more
aware of their higher level needs and this awareness would intensify further in the future
workers.

d. Changing Psychosocial System : The future management would be required to ensure

effective participation of lower levels in the management of the organization system. An
organizational model will have to be designed whose roots are deeply entrenched in
democratic humanistic system.
e. Computerized Information System : In the past, the automation of manufacturing
processes had a major effect upon the systems of production, storage, handling and
packaging, etc. More recently, there has been and in the future there will be the impact of
revolutionary computerized information system on management.

f. Mobility of Professional Personnel : One interesting fact will be an increase in the

mobility of various managerial and professional personnel between organizations. As
individuals develop greater technical and professional expertise, their services will be in
greater demand by other organizations.
g. Changes in Legal Environment : Many changes are taking place in the legal framework
within which the industrial relation systems in the country are now functioning. It is the duty
of the human resource or personnel executive to be aware of these changes and to bring
about necessary adjustments within the organizations.

h. Management of Human Relations : On the ‘Industrial Relations‘ front, things are not
showing much improvement. Though a large number of factors are responsible for industrial
unrest but a very significant cause is the growth of multi-unions in industrial complexes
having different political affiliations.
Thank you…..