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Module 3

Objectives of HRM attract and retain talent train people for challenging roles develop skills and competencies promote team spirit develop loyalty and commitment increase productivity and profits improve job satisfaction enhance standard of living generate employment opportunities .

layoff and retrenchment.Scope of HRM Personnel Management: • This is typically direct manpower management that involves manpower planning. allowances. traveling policies and procedures and other related courses of actions. incentives. employee productivity. • It also includes performance appraisal. transfer. induction and orientation. compensation. disbursement of wages. developing new skills. The overall objective here is to ascertain individual growth. hiring (recruitment and selection). training and development. development and effectiveness which indirectly contribute to organizational development. . promotion.

maternity benefits. support by top management. sickness benefits. job safety. Employee welfare is about determining employees’ real needs and fulfilling them with active participation of both management and employees. eliminating workplace hazards. transport. crèches. This includes a wide array of responsibilities and services such as safety services. employee counseling. social security and medical services. recreation facilities. etc. education and training. housing. medical assistance. sanitation. cleanliness. It also covers appointment of safety officers. employment injury benefits.HRM in Employee Welfare: • This particular aspect of HRM deals with working conditions and amenities at workplace. making the environment worth working. proper ventilation and lighting. • It also relates to supervision. rest and lunch rooms. establishing harmonious relationships with employees. it also takes care of canteen facilities. welfare funds. unemployment benefits and family benefits. safeguarding machinery. personal injury benefits. medical care. health and safety. education. health services. . In addition to this.

disciplinary procedures. It is the art and science of understanding the employment (union-management) relations.HRM in Industrial Relations: • Since it is a highly sensitive area. it needs careful interactions with labor or employee unions. growing and promoting industrial democracy to safeguard the interests of both employees and management. collective bargaining and settlement of disputes. joint consultation. It is about establishing. addressing their grievances and settling the disputes effectively in order to maintain peace and harmony in the organization. • The main aim is to safeguarding the interest of employees by securing the highest level of understanding to the extent that does not leave a negative impact on organization. solving problems with mutual efforts. . understanding human behavior and maintaining work relations.

Functions of HRM P/HRM Operative Functions Procurement Job Analysis HR planning – Organising Managerial functions: – Planning Development: Training Executive development Motivation and Compensation: Job design Work scheduling Motivation Job evaluation Performance and potential appraisal Compensation administration Maintenance: Health Safety Welfare Social security Integration: Grievances Discipline Teams and teamwork Collective bargaining Participation Empowerment Emerging Issues: Personnel records Personnel audit Personnel research HR accounting HRIS Job stress Mentoring International HRM Recruitment Selection Placement Career planning Succession planning Human resources development strategies – Directing Induction Internal mobility – Controlling Incentives benefits and services Trade unions Employers’ associations Industrial relations .

and • agency or transaction cost perspective. . • systems perspective. • the critical perspective.Perspectives of HRM Five different perspectives of human resource management (HRM) include the • normative perspective. • behavioral perspective.

. This model considers human capital as “assets” rather than “resources” and lays stress on organizational development. conflict management. This approach works under the assumption that what is good for the organization is also good for the employee. compensation and benefits. • The concept of “Hard HRM” is the basis for the traditional approach toward human resource management. • Soft HRM is synonymous with the Michigan model of human resources and is the bedrock of the modern approach to strategic human resource management. contract negotiations.” on which the foundations of human resource management rest. and labor legislations to corporate strategy. It views the workforce as passive resources that the organization can use and dispose at will. organizational culture. This concept traces its origins to the Harvard model that links workforce management to organizational strategy. This enforces organization interests over the employees' conflicting ambitions and interests. recruitment.The Normative Perspective • The normative perspective of human resource management bases itself on the concepts of “hard HRM” and “soft HRM. leadership development. performance evaluations. job analysis. Hard HRM stresses the linkage of functional areas such as manpower planning. and relationship building as a means of increasing trust and ensuring performance through collaboration.

• This perspective espouses a gap between rhetoric. in reality employers enforce a hard HRM-based strategic control.The Critical Perspective of Human Resource Management • The critical perspective of human resource management is a reaction against the normative perception. and the interests of the organization always take priority over the individual employee. A study by Hope-Hailey et al. (1997) finds that while most organizations claim employees to be their most important assets and make many commitments for their welfare and development. . as organizations claim to follow soft HRM policies when they actually enforce hard HRM. This highlights some inherent contradictions within the normative perspective.

an organization aiming to innovate will require a workforce that demonstrates a high degree of innovative behavior such as long-term focus. . and similar qualities. creativity. • For instance. This theory holds that the purpose of human resource intervention is to control employee attitudes and behaviors to suit the various strategies adopted to attain the desired performance. and abilities. This perspective thus bases itself on the role behavior of employees instead of their skills. cooperation. knowledge. The role of human resource management in such a context is to inculcate and reinforce such behavioral patterns in the workforce.The Behavioral Perspective of Human Resource Management • The behavioral perspective of human resource management has its roots in the contingency theory that considers employee behavior as the mediator between strategy and organizational performance. concern for quality. propensity for risk taking.

• Setting up mechanisms to buffer the technological core from the environment in closed systems. and output. and other methods to ensure job satisfaction. so that employees work according to the organizational strategy. with all these systems involved in transactions with a surrounding environment. • Facilitating interactions with the environment in open systems.• The systems perspective describes an organization in terms of input. the transformation of energies within the system at throughput. • Behavior management through performance evaluation. throughput. A negative feedback loop provides communications on discrepancies. The organized activities of employees constitute the input. The Systems Perspective of Human Resource Management . ultimately boosting productivity. and the resulting product or service the output. • The role of human resource management in the systems perspective is • Competence management to ensure that the workforce has the required competencies such as skills and ability to provide the input needed by the organization. pay systems.

conflicts of interests invariably arise. Agency or Transaction Cost Perspective of Human Resource Management • The human resource department needs to adopt the approach that minimizes transaction cost to the organization. which holds the view that the strong natural inclination of people working in groups is to reduce their performance and rely on the efforts of others in the group. The two major approaches include – Monitoring employee behavior and preventing shrink of work by establishing effective control systems and improving productivity. and job satisfaction to increase their individual performance. – Providing employees with incentives such as rewards. . When one person delegates responsibility to another person. • The major role of human resource management in such a context is to promote alternative ways of controlling behavior to reduce the effects of such conflicts and minimize the cost to the organization.• Among the different perspectives of human resource management is the agency or transaction cost perspective. motivation.

It comes from a firm’s unique ability to perform activities more distinctively and more effectively than rivals. HR can be a source of competitive advantage when the talents of people working in the firm are valuable. difficult to imitate and well organised to deliver efficient and effective results .Strategic Human Resource Management Competitive advantage through people • Competitive advantage allows a firm to gain an edge over its rivals when competing. rare.

procedures Tight division of labour. independence. knowledge Investment centre Line managers . specialisation Capital. reactive. cross-training teams Bureaucratic-roles. medium and long (as required) Organic-flexible. products Key investments Accountability Responsibility for HR Cost centre Staff specialists People. fragmented Short-term Strategic HR Partnerships with internal and external customers Transformational change leader and initiator Fast. whatever is necessary to succeed Broad. flexible. Strategic HR Point of distinction Focus Role of HR Initiatives Time horizon Control Job design Traditional HR Employee Relations Transactional change follower and respondent Slow. proactive and integrated Short.Traditional HR vs. policies.

Model of SHRM .