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HRM - Introduction

The Changing Nature of Organization

MANAGEMENT Accomplishment of
organizational objectives by utilizing
physical, & financial resources
through the efforts of human

RESOURCES - factors of production

results in conversion of raw materials
into useful goods/services. (Man,
Money, Machine, Material & Methods)
Evolution of HR Concept
Labor / Manpower
Viewed men as just physical abilities &
capacities to complete the job/task
Were treated as Commodity and exploited
wages based on demand & supply
Evolution of HR Concept
In 19th century with the boom in industrialization
resulting in
increase in working rules and regulation
increase in the hierarchical structure
increased in working hours but decrease in pay
bad working condition,
Increased social distance between employee and
increased bureaucratization
all these factor results in increasing monotony,
boredom, job displacement, impersonality and
called for better industrial condition
Personnel department and welfare officers came
into existence for collective bargaining,
performance improvement, legislative
implementation, social conscience of business
Evolution of HR Concept
HR (post 1980)
Studies of the success of Japanese automobile
companies revealed that the success of the
organization largely depends on effective
and efficient management of people who
are now viewed as valuable resources capable
of thinking and feeling.
Such effective management includes all the
activities including right selection, training,
team building, multitasking, effective
communication, motivation, innovation,
worker participation, effective
performance and potential appraisals etc.
Now HR is considered as resources of all the
people who contribute their services to the
attainment of organizational goals
The focus is to create an organization
Personnel Management Vs
Dimension PM
Focus Profit Maximization & Development
control oriented, attempt to
fulfill their needs and
Philosophy Functional duty Developmental
Function Staff Function Line function
Pervasiveness Personnel Manager All Managers
Motivation Personal gains, Morale boosting,
appraisals development
Orientation Administration, Synergy, Team
Individual building & Team
Performance Performance
Tools & Technique Rules, Processes, Integration,
coercive measures, participation
Evolution of HR Concept
Going further SHRM
SHRM means combination of strategy
and HRM.
It also refers to linking of human
resources with strategic goals and
objectives to achieve goals of an
It is accepting and involving the HR
function as a strategic partner in the
formulation and implementation of the
company's strategies through HR
Human Resources
According to Leon C. Megission, HR is
the total knowledge, skills, creative
abilities, talents and aptitudes of an
organization's workforce as well as the
values, attitudes and beliefs of the
individuals involved.
Characteristics of Human
HR is a product of their qualities,
Heterogeneous. They have unique
personality, needs, aspirations, values,
Dynamic capable of changing
They react to situations
They control and utilize other resources
Potential to develop and grow
Have emotions
They themselves determines what they
want to deliver
They can think
Human Resource
A firms deliberate creation and use of
human resources strategy to help gain
and maintain competitive advantage to its
competitors in the marketplace.
Refers to the policies, practices and
systems that influence and align
employees behavior, attitude and
performance towards the effective and
efficient achievement of organizational
Where does it fit??
Objectives, What business
strategic should we be
Plans, Vision in? Compensation
& Values How do we gain Systems

Business Unit
strategies advantage in that?

How should HR help HR Planing

us achieve that? Recruitment &
HR Strategies Selection

Appraisal and

Training and
International Industrial
& cross Relations and
cultural Grievance
Management Handling
Aims and Objectives
Sustainable Organizational
effectiveness & growth
Human capital development
Effective Employee relations
Meeting diverse needs
Procurement, development,
utilization of human resource
Goal Alignment
Strategic Alignment
High morale of employees
Organizational climate and value
HRM Role in Building Competitive


Management of Management of
Strategic Human Transformation and
Resources Change
Processes People

Management of
Management of
Firms Infrastructure

Training & development
Personnel and organizational
HR planning, selection and staffing
Personnel research
Compensation and benefits
Assistance and motivation
Conflict management
Union management relations
Separation handling
Changing Roles of HR Management

Example percentages are based on various surveys.
2005 Figure 15
Thomson Business &
Professional Publishing.
The HR Environment & Functions
Role of HR Manager
Strategic Partner
Aligning HRM strategies to business strategies
Administrative Expert
Designing and delivering effective & efficient
HRM systems, processes and Practices
Employee Advocate
Managing the commitment, contribution &
high morale
Change Agent
Build capacity and Transforming organization
to meet the new competitive and
environmental conditions
HRM Process
Consists of Planning, attracting, developing, and
retaining competent human recourses for the
Michigan Model
Michigan Model
It holds that people should be managed like
any other resources and so obtained
cheaply, used sparingly, developed and
exploited fully.
It also emphasized the interrelatedness of
HRM activities. According to this model,
selection, appraisal, development and
rewards were geared towards
organizational performance.
However, The notion of the environment,
situational factors, stakeholder interests
and the notion of strategic choice were
Michigan Model
The advantage
attachment to market performance and
organizational growth.
cost minimization as employees were
regarded as any other resources to be
obtained cheaply.
possibility of market failures due to
ignorance of environments.
Failed to express the importance alignment
of internal HRM policies and external
business strategy.
HRM planning was not given importance
The Harvard Model
Harvard Model
It strives at employee commitment not control.
The advantages of such a system lay on the
premise that high employee commitment led to
better job performance
Using the best employees fit for certain jobs led to
Also, a reward system aimed to attract and
motivate held performance appraisal not evaluation
as its tool.
However this system could be criticized by resource
based perspective of labor and the argument that it
may conflict with business focus of the organization
and also distort cost minimization and profit
Guest Model
Guest model
works on the premise that a set of
integrated HRM practices will result to
superior individual and organizational
It holds that HRM strategies will lead to
practices leading to more desired
outcomes; Quality, commitment and
It will then affect performance in that
productivity will increase; innovation will
be achieved as well as limited absences,
labor turnover, conflict or customer
Strategic challenges For
Current Industrial Scenario
Multinational and Transnational Organization
Technological Advancements
Rapidly changing environment
Both Internal and External
Highly volatile speed and extent of change
Changing Preferences of People
Increased Complexity
Business Structures
Strategic Challenges
Environmental/External Challenges
Rapid Change
Work Life balance
Dealing with stress
Internet Revolution
Workforce Diversity
Evolving work and family roles
Skill shortages and rise of service sector
Strategic Challenges
Organizational/internal Challenges
Competitive position: Cost, quality and
creating distinctive capabilities
Organizational Restructuring
Developing self managed work teams
Organizational culture
Extent of Use of Technology
Outsourcing and off-shoring
Learning Organization
Changes in Employment Relationships
Strategic Challenges
Individual Challenges
Matching people with organization
Ethics and social responsibility
Creativity and Commitment
Brain Drain and Retention
Job Insecurity