Unit 1: Nature & Concept of Human

Resource Management
Introduction to Human Resource Management

PowerPoint Slides by Charlie Cook

Human Resource Management
 Human Resource Management (HRM)
 The comprehensive set of managerial activities
and tasks concerned with developing and
maintaining a qualified workforce–human
resources–in ways that contribute to
organizational effectiveness.
 Effective human resource management is a vital
strategic concern for organizations today.

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Evolution of the Human Resource Function
 Scientific Management
 First serious study of management practice
focused on structuring individual jobs to maximize
the efficiency and productivity of workers.
 Frederick Taylor and Frank and Lillian Gilbreth
used time and motion studies of each job task to
develop “the one best way” (production
standards) to do the job.

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Evolution of the Human Resource Function
 Origins of the Human Resource Function
 Growth in the size and complexity of firms
resulted in the creation of specialized units to hire
new employees and, later on, to manage the
existing workforce as well.
 Managerial time became more devoted to labor
relations and the administration of legal and
regulatory matters.

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The Human Relations Era
 Human Relations Movement
 Became the dominant management approach in the
1930s.
 The results of Roethlisbeger and Mayo’s Hawthorne
studies at Western Electric demonstrated the
importance of understanding human behavior in the
workplace.
 Workers were no longer considered tools but people.
 Important contributors to the human relations
movement:
 Abraham Maslow and his “hierarchy of human needs”
 Douglas McGregor and his “Theory X and Theory Y” framework
 The managerial premise for human relations shifted
from treating workers as output resources to making
workers happier and more satisfied; this change was
intended to make them want to work harder and be
more productive.
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Personnel Management
 Personnel Departments
 By the 1940s, specialized units run by personnel
managers were common in large organizations.
 Primarily responsible for hiring first-line employees
and administering basic HR activities such as pay
and benefits.
 During the 1940s and 50s, personnel management
evolved increasingly toward developing testing
techniques for optimizing the fit between people
and jobs.
 Were generally regarded as a limited, routine-
oriented support function within organizations and
not accorded any strategic importance. Also were
considered a “dumping ground” for superfluous,
poor, and non-promotable managers.

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Contemporary Human Resource Management
 During the 1960s and 1970s, firms began to recognize the
increasing strategic importance of effective HRM
practices to productivity and competitiveness.
 The HRM function–building a motivated and committed
workforce–reached its maturity as firms focused on
maximizing effectiveness and making work more
meaningful and fulfilling.
 The 1980s and 1990s era of mergers, takeovers,
acquisitions, and marketplace globalization led to the
downsizing, rightsizing, or reengineering of firms.
Outsourcing of traditionally internal functions, including
HRM staff activities, by firms became commonplace.

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The Human Resource Management Functions
Strategic
Strategichuman
humanresource
resourceperspective
perspective
The
Thelegal
legal The
Theglobal
global
environment
environment environment
environment
Human
Humanresource
resourceplanning
planning

Recruiting
Recruitinghuman
humanresources
resources

Selecting Basic
Basiccompensation
compensation
Selectingand
andplacing
placinghuman
humanresources
resources and
andbenefits
benefits

Performance
Performancemanagement
management Incentives
Incentives

Training
Trainingand
andDevelopment
Development Career
CareerPlanning
Planningand
andDevelopment
Development

Managing
Managingthe
the Managing
Managing Managing
Managingnew new
Managing
Managinglabor
labor work
work diverse
diverse employment
employment
relations
relations environment
environment workforce
workforce relationships
relationships

Effective
Effectiveand
andefficient
efficienthuman
humanresource
resourcepractices;
practices;human
humanresource
resourcegoal
goalattainment
attainment
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Defining HRM
 HRM is the part of the organization that is
concerned with the people dimension.
 HRM deals with human relations of an
organization starting from recruitment to Labor
relation.
 HRM is concerned with the people dimension of
management.
 It is a process of acquisition, development,
motivation, and maintenance of human resources
of an organization.

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Goals of Human Resource Management

Facilitating
Facilitating Enhancing
Enhancing
organizational
organizational productivity
productivity
effectiveness
effectiveness and
andquality
quality

The
Thehuman
human
resource
resourcefunction
function
in
incontemporary
contemporary
organizations
organizations
Complying
Complyingwith
with Promoting
Promoting
legal and social
legal and social individual
individualgrowth
growth
obligations
obligations and
anddevelopment
development

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Line vs. Staff Perspectives
 Organizations typically divide managers into two groups:
 Line (now operating) managers in operations, finance,
and marketing functions supervise and direct the
workforce in the creation of goods and services. Their
contributions to the organization can be measured
directly.
 Staff managers in legal, accounting, and HR
departments perform indirect or support functions, which
makes their contributions less easily measured directly.
 HR departments are assigned staff functions and staff
responsibility. HRM activities are distributed throughout
organizations, yet HR departments are responsible for
monitoring and ensuring organizational compliance with
laws, regulations, policies, procedures, and rules.

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Smaller vs. Larger Organization Perspectives
 Smaller organizations make extensive use of
operating managers to carry out HRM functions.
 A single manager may handle all basic HR
functions–hiring, work scheduling, discipline.
 Very small firms are exempt from many legal
regulations.
 Certain HR functions may be subcontracted out.

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Smaller vs. Larger Organization Perspectives
 HRM in large firms is handled by a self-contained
separate organizational unit of HR specialists.
 The HR department may be divided into distinct
subunits that handle specific HR administration
activities and functions such as recruiting and
selection, wage and salary administration, training
and development, and labor relations.

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The HRM Function at Texas Instruments

Vice
VicePresident,
President,
human
humanresources
resources

Director,
Director, Director,
Director, Director,
Director, Director,
Director, Director,
Director,
recruiting
recruiting compensation
compensation training/
training/ employee
employee leadership
leadership
and
andstaffing
staffing and
andbenefits
benefits development
development relations
relations development
development

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Professionalism and HRM
 What it takes to become a successful HRM
professional:
 a solid educational background;
 general management skills and abilities reflecting
conceptual, diagnostic, and analytical skills;
 a fundamental understanding of functional areas of
business;
 knowledge of business and corporate strategy; and
 an understanding of the role and importance of the
human resource function for one’s organization.

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Professionalism and HRM

 Professional associations and certification:

 Society for Human Resource Management (SHRM)
 Human Resource Certification Institute (HRCI)

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Human Resource Management
Angelo S. DeNisi &
Ricky W. Griffin

The Strategic Human Resource

Management

Unit- I

PowerPoint Slides by Charlie Cook

Strategic Human Resource Management
Organizational
Organizationalmission, SWOT Corporate
Corporateand
top
mission, SWOTanalysis
analysis and
top managementteam
management team business strategies
business strategies

Human
Humanresource
resourcestrategy
strategyformulation
formulation
Top
Topmanagement
management Formulation
Formulationof of
oversight
oversightand
and other
otherfunctional
functional
strategic
strategic Staffing Development Compensation
Staffing Development Compensation strategies
strategies
leadership
leadership strategy strategy strategy
strategy strategy strategy

Organization
Organizationdesign
design Organization
Organizationculture
culture

Technology
Technology Work/labor
Work/laborforce
force

Human
Humanresource
resource
strategy implementation Implementation
Implementationof of
strategy implementation other functional
other functional
strategies
strategies

Organizational
Organizational
Individual
Individual Interpersonal/
Interpersonal/
systems
systemsand
and
Process
Process group
groupprocesses
processes
processes
processes

Organizational
Organizationaleffectiveness;
effectiveness;attainment
attainmentof
ofstrategic
strategicgoals
goals
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Organizational Purpose and Mission
 An organization’s purpose is its reason for existence.
 A business’s purpose is to earn profit for its owners.
 A university’s purpose is to educate and pursue
knowledge.
 An organization’s mission statement specifies how its
managers have decided to fulfill its purpose.
 It identifies the unique set of characteristics and
strengths of the organization that are its
competitive advantage and
 It defines the scope of business operations in the
provision of products and services offered and the
markets in which it intends to compete.

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Mission Statement

STARBUCKS MISSION STATEMENT

To establish Starbucks as the premier purveyor of the finest coffee in the

world while maintaining our uncompromising principles as we grow.
The following five guiding principles will help us measure the
appropriateness of our decisions:
• Provide a great work environment and treat each other with
respect and dignity.
• Apply the highest standards of excellence to the purchasing,
roasting and fresh delivery of our coffee.
• Develop enthusiastically satisfied customers all of the time.
• Contribute positively to our communities and our environment.
• Recognize that profitability is essential to our future success.

Courtesy—Starbucks Coffee Company.

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 Influence of the Top Management Team
 The top management team of an organization refers to
the group of senior executives responsible for the
overall strategic operation of a firm:
 Chairperson of the board of directors
 Chief Executive Officer (CEO)
 Chief Operating Officer (COO)
 Chief Financial Officer (CFO)
 President of the firm
 Senior executives responsible for each major
functional area
 Top management’s clear communication of the strategic
vision sets the tone for the organization and plays a
major role in shaping its culture.
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SWOT Analysis

Strengths Internal Analysis Weaknesses

Strategic
Strategic
Actions
Actions

Opportunities External Analysis Threats

Accomplish the strategy by exploiting opportunities with strengths,

correcting weaknesses, and building defenses against threats.

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Strategy Formulation
 Organizations formulate strategy at three basic
levels:
 Corporate strategy
 The set of strategic alternatives that an organization chooses
when managing operations across several industries and
diverse markets.
 Business strategy
 The set of strategic alternatives that an organization selects
from in deciding how to compete in a particular industry.
 Functional strategy
 How a firm has decided to manage each of its major internal
functions such as marketing, finance, distribution, and human
resources.

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 Corporate Strategy and HRM

 A grand strategy is a single overall framework for

action the top management team develops to
compete in one market or a few closely related
markets.

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 Corporate Strategy and HRM
 Growth strategies:
 Niche:
 Identifying a unique niche in a market and then succeeding in
aggressively expanding within the chosen niche.
 External
 Growth through acquisition, mergers, and joint ventures.
 Strategic HRM challenges under growth strategies:
 To successfully recruit and train sufficient numbers of qualified
employees to operate expanding niche operations.
 In external growth, HRM focuses on melding disparate workforces
into a single cohesive and integrated unit.

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Corporate Strategy and HRM
 A retrenchment or turnaround strategy is a grand
strategy utilized when major changes in current
operations are required to make an organization
competitive again.
 Downsizing or “rightsizing”
 Actions taken to reduce costs and scale back operations, thus
freeing up resources for investment in more promising products
and markets.
 Strategic HRM challenges during this “period”:
 To manage the process so that surviving employees feel
attached to and remain committed to the organization.
 To optimize the transition process for displaced workers
through severance packages and outplacement counseling.

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Corporate Strategy and HRM
 A stability strategy focuses on maintaining the status
quo after a period of change in an organization.
 The strategy’s goals are to stay in current markets
(where no growth is anticipated) and to protect
the organization from external threats.
 Strategic HRM challenge of the stability strategy:
 To retain the firm’s existing employees when there are few
chances for advancement, no likelihood of compensation or
salary increases, and other HR negative factors.

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Corporate Strategy and HRM
 Diversification is a widely used strategic approach to
managing a portfolio of businesses competing in several
different markets at once.
 Related diversification:
 The relatedness of the businesses (e.g., internal operations, suppliers,
customers, locations) is used to achieve cost savings or profit
synergies and competitive advantage.
 HR practices focus on cross-organizational training and experiences to
develop overall organizational perspective.
 Unrelated diversification:
 The diversity of the businesses (no overlapping as in a related
diversification) is assumed to offer protection from business cycle
downturns.
 HR functions under unrelated diversification are customized and
decentralized to the particular business units.
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Business Strategy and HRM
 Competitive Strategies
 Differentiation:
 A firm develops an image or reputation for its product or service
that sets it apart or causes it to be perceived as being different
from its competitors.
 HRM activities focus on developing high quality work and
customer service satisfaction capabilities in the workforce.
 Cost Leadership:
 By minimizing costs, a firm can offer the lowest prices and gain
higher revenues. Cost leadership comes from internal
operational efficiencies and external cost controls.
 HR activities focus on developing a highly efficient
workforce and reengineering operations for higher
productivity and lowered labor costs.

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Business Strategy and HRM
 Competitive Strategies (continued)
 Focus:
 Targeting a differentiated product or service with low cost or
unique features for a specific market segment by geographic
locations, by consumer preference, or by other distinct
customer characteristics.
 HR activities are focused on creating a workforce that
understands the competitive nature of the focal market.

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Functional Strategy and HRM
 The third level of strategy concerns how a company
will decide to conduct its basic functional activities,
such as marketing, finance, operations, research
and development, and human resources.
 HR strategy formulation should be integrated with
corporate, business, and other functional
strategies.

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 Human Resource Strategies

Human
Humanresource
resource
strategy
strategyformulation
formulation

Staffing
Staffingstrategy
strategy Development
Developmentstrategy
strategy Compensation
Compensationstrategy
strategy
••HR
HRPlanning
Planning ••Performance
Performancemanagement
management ••Wage/salary
Wage/salarystructure
structure
••Recruiting
Recruiting ••Training
Training ••Employee benefits
Employee benefits
••Selection
Selection ••Development
Development ••Incentives
Incentives
••Placement
Placement ••Career
Careerplanning
planning

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 Human Resource Strategy Implementation
Human
Humanresource
resource
strategy
strategyimplementation
implementation

Individual
Individual Organizational
Organizational Interpersonal
Interpersonal
processes
processes systems/processes
systems/processes processes
processes
••Psychological
Psychological ••Single-use
Single-useplans
plans ••Group
Groupdynamics
dynamics
Contracts
Contracts ––programs
programs ••Leadership
Leadership
••Personality
Personalitytraits
traits ––projects
projects ••Communications
Communications
••Attitudes
Attitudes ••Standing
Standingplans
plans
••Motivation
Motivation ––policies
policies
Equity
EquityTheory
Theory ––standard
standardoperating
operating
Expectancy
ExpectancyTheory
Theory procedures
procedures
Reinforcement
Reinforcement ––rules
rules
••Stress
Stress

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Human Resource Management
Angelo S. DeNisi &
Ricky W. Griffin

HRM in a dynamic environment

PowerPoint Slides by Charlie Cook

HR Practices in India
1.RECRUITMENT AND SELECTION
(i) Diversity among employees: Ex – army man to school
teacher in the workforce. 
(ii) For recruitment they expect the person has to be
comfortable with technology and be optimistic about the
future. “Like someone who you would find interesting on a
long train journey”.
The company’s recruitment process ensures that it gets the
people edge it needs like written tests, rigorous interviews,
giving detailed feedback on the candidate to an
independent team in charge of hiring.
(iii) Employee referrals by employees which comprises 50%
of all hiring at SAP Labs India, Bangalore.

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HR Practices in India
2.LEARNING AND DEVELOPMENT
SME’s(Subject Matter Experts):
HR team identifies the internal subject matter experts to give
training to the employees
Sending employees for higher studies
EWelcome:
When employees join the company, they have to interact with
functionaries in other regions who assume that the new
person knows the internal systems.
Companies follows a training policy to have specific duration
training every year is mandatory for all employees, even
chairman and the directors.

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HR Practices in India
2.LEARNING AND DEVELOPMENT
GOLD (Godrej Organization for Learning and Development):
Web-based learning tied up with UK – based NetG to distribute
e- learning modules among the workforce.
The company gives equal importance to soft skill training.
“Out of box thinking is more important “, the sponsored the
Edward De Bono certification of lateral thinking for two of its
managerial employees, so they could teach in – house.
This learning creates a leadership pipeline.

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HR Practices in India
3. REWARDS AND RECOGNITION
1. MAD (Mutual Admiration):
Is an event where every employee is given green cardboard
leaves on which they scribble messages of appreciation and
pin them onto the MAD tree in the cafeteria.
2. Smart Work and Smart Reward:
It directed towards improving employees productivity.
It rewards those who complete tasks in fewer working hours
than stipulated.
3. Promotion within

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HR Practices in India
4. CAREER PLANNING
1. Career Success Centre:
An online portal and a one – stop shop for all career related
resources. The portal helps employees plan and develop
their careers according to business needs.
5. COMPENSATION AND BENEFITS
1. Paternity leave
2. Extra three months maternity leave at half the salary
leave
3. No attendance monitoring
4. unlimited sick leave
5. equal privileges for employees across levels: employees
at all levels travel in the same class, stay in similar hotels,
work out of standard cubicles, log in their own leave.

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HR Practices in India
6. PERFORMANCE MANAGEMENT
1. 360 degree feedback system
2. “Performance Task Force”: A cross functional team
constitutes 20 members and this force keeps track of what
needs to be plugged, and what seems to be working. It goes
back to HR every six months to deliver feedback.
7. LEADERSHIP AND DEVELOPMENT
1. Food for thought:
Inviting employees in groups to chat with Managing director
over lunch in an informal environment on various issues and
topics.
2. Succession planning
3. Employee empowerment
4. Reach out: An initiative to keep a direct link of
communication to its employees, the president of the company
meets the employees.

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HR Practices in India
8. ORGANIZATION STRUCTURE
1. Flexi and Part – time
2. The companies allow the employees to shift jobs if they
wish to, across its different functions.
3. The company created new position called “Employee
Engagement Manager”: the major task of the manager is to
energize the workplace with fun – filled events and effective
communication.
4. “People Champions”: Every project team has one
facilitator from the HR department. The people champion
takes care of any administrative need a project might have,
leaving the project members free to concentrate on their
work.

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HR Practices in India
8. ORGANIZATION STRUCTURE
5. Orientation along with parents: The Company invites the
parents of new recruits for orientation, its good for the
parents to know the kind of organization their children work
for, this insight came from campus recruitment, where
parents would stay with their children right till results were
parents would stay with their children right till results were
announced.

6. “People Movement Management Review Committee”: it

ensures talented employees were retained by reassigning
them to other groups. The company also hired consultants
to assist those who were asked to leave to find jobs in other
organizations.

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Global Human Resource Management
  Global human resource management,
sometimes referred to as global HRM, is an
umbrella term that includes all aspects of an
organization's HR, payroll, and
talent management processes operating on
a global scale. (IHRM)

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Contemporary issues in HR

 Human Resource Information System (HRIS)

 HR Audit
 Cross Cultural and diversity management
 Work Life integration
 Human Resource Outsourcing
Human Resource Information System
 HRIS can be briefly defined as integrated systems used to
gather, store and analyze information regarding an
organization’s human resources.
 Large and small businesses are utilizing HRIS
 Personal computers have made HRIS available and
affordable for any sized firm
 HRIS has evolved from simple record-keeping to complex
analytical tools to assist management decision making
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Who uses HRIS & How?
 HR Professionals
 Reporting and compliance
 Payroll and compensation
analysis
 Benefits administration
 Applicant tracking, skills
inventory
 Individual Employees
 Self-service benefit options
 Career planning
 Training and development
 Functional Managers
 Performance management
and appraisal
 Recruitment and resume
processing
 Team and project
management
 Training and skills testing
 Management development
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HR Audit

Human Resource Audit or HR Audit is the process

of examining policies, procedures, documentation,
systems, and practices with respect to an
organization's HR functions.
Purpose of HR Audit
 To assess the effectiveness of the Human Resources
function to ensure regulatory compliance.
 To look for potentially serious problems.
 To find areas needing improvement .
 To document processes for use in merger, reorganization
or inspection.
 To address compliance issues .
 Sample HR Audit
Common HR Audits Report
 Policy or handbook audit
 Compliance audit
 Functional audit
 Wage and hour practices audit
 Exemption audit
 Job description audit
 Safety audit
 Hiring process audit
 Training and development audit
 Compensation and benefits audit

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 Cross Cultural & diversity management
Culture is relative that guide the behavior of people in a
society or community and that are passed on from one
generation to the next (Globalization & HRM)

Elements
Language  Social class
Nationality  Corporate
Sex culture
Education  Family
Profession  Values
Ethnic group  Norms
Religion  Attitudes
Customs
Cross Cultural Management
“Cross culture management involves managing work teams
in way that considers the differences in cultures, practices
and preferences of consumers in a global or international
business context”. CCM is a fairly new field that is based on
theories and research from:
Cross Culture Psychology
International Business
Organizational Behaviour
Human Resources
Anthropology(study of human’s aspect of society)
Toyota’s Efforts…....
 Language- Communication
 Inviting interpreters to the work floor, even in
every interview to assure that no
misunderstanding happen
 Power Distance Index
 Encourage a flatter organizational structure
 Enhance internal communication
 Inspire young workers to participate in the group
discussion and to speak up their opinions
 Creating green fields
 Recruiting unskilled young people

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 Work-life Integration
Work-life integration is an outcome of people
exercising control & choice in their life to meet life’s
challenges
This can be managing work responsibilities alongside
their personal & family needs.
The areas of a person’s life which require integration
will change based on the individual’s life stages
A person in his or her 20s may be balancing career
development and social activities
In 30s, when a person gets married & starts a family, family &
job responsibilities become competing challenges
Work/Life Integration at Munger, Tolles & Olson
 Hope Street Friends:  is state-of-the-art childcare
facility and early education center next door to
the firm’s offices in downtown Los Angeles.
 Subsidized Back-Up Care:  The firm provides all
employees with subsidized back-up child care
through in-home care nationwide for children and
adult relatives.
 Reduced-Hours Policy:  The firm’s reduced-hours
policy allows lawyers who work reduced hours to
remain on track toward partnership.

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Work/Life Integration at Munger, Tolles & Olson
 Generous Parental Leave:  Lawyers serving as the primary
caregiver may take up to 18 weeks of fully paid leave after
the birth or adoption of a child, and non-primary caregivers
may take up to six weeks. Both have the option of taking
additional unpaid leave as well.
 On-Ramp/Off-Ramp Mentoring:  The firm offers additional
mentoring to help Lawyers transition to and from leaves of
absence.
 Flexible Work Arrangements:  Outside commitments often
require attorneys to be away from the office, The company
provide significant resources to help attorneys work
remotely, from home or elsewhere.

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Importance of Work-life Integration
Work & life stressors will continue to increase, as
expectations & choices compel us to seek for what is a
“good life’’.
 Our core values & life goals become the skill-set that
enables us in work-life balancing and in living & work
efficiently and effectively.
 When organization take cognizance of this work-life
imperative and designs a conducive work environment it
motivates the employees to work more efficiently and
productively.
4-steps to successful work-life integration
1
4 Establish the
need to
Evaluate work-
implement/
life
modify work-
programmes
life strategy

2
3
Assess
Implement
business
work-life
needs and
programm
employee’s
es
work-life
needs
Dual-Career Couples
 Provide supportive managers and ensure
equitable growth opportunities
 Encourage ambition by making top positions
seem feasible
 Ensure consistent access to sustainable
sponsorship

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 Outsourcing
The performance by outside parties, on a recurring
basis, of tasks that would otherwise be performed in-
house.

 58% of companies outsource some HR

function
 91% of companies with $1 billion+
annual revenues are now considering
HRO
Why Outsourcing

 Allow HR to focus on core competencies

 Creates strategic opportunities for HR professionals
 Improve quality, efficiency, and effectiveness
 Relief from administrative burdens
 Reduce operating costs
Golden Handshake
 A golden handshake is a stipulation in
an employment agreement which states that
the employer will provide a significant
severance package if the employee loses
their job. It is usually provided to top
executives for loss of employment through
retirement, layoffs or even firing for
negligence.

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HRM Linkage with TQM & Productivity
 Link is very much clear when Human
resources of the company are satisfy they
work with their full extent through this
the productivity of the company rises and
reaches to a higher point and if Human
resources are dissatisfy,
the productivity decreases

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Opening Case 1: Jack Nelson’s Problem

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Opening Case 1: Jack Nelson’s Problem

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