Human Resource Management

Resource
•A resource is a source or supply from which benefit
is produced.
• Typically resources are materials, services, staff, or
other assets.
•That are transformed to produce benefit and in the
process may be consumed or made unavailable.
•Benefits of resource utilization may include
•Increased wealth, meeting needs or wants, proper
functioning of a system, or enhanced well being.
 continued
• From the corporate objective, employees are
viewed as assets to the enterprise,
• Whose value is enhanced by development.
• The professional discipline and business
function.
• That oversees an organization's human
resources is called
• Human resource management (HRM)
 Human resources
• Human resources is the set of individuals who make up the
workforce of an organization, business sector, or economy.
• "Human capital" is sometimes used (almost the same) with
human resources,
• Although human capital typically refers to a more narrow
view i.e.,
• The knowledge the individuals represent and can
contribute to an organization.
• Likewise, other terms sometimes used include
"manpower", "talent", "labor", or simply "people".
 Organization
• Organization : group of people (minimum
two)to achieve common goals by coordinated
action
• An effective organization to achieve
organizational goals
• This is achieved through leadership and
motivation
 Management
•The organization and coordination of the activities of a
business in order to achieve defined objectives.
•Management is often included as a factor of production
along with‚ machines, materials, and money.
•The basic task of management includes both marketing
and Innovation (modernization)
•Study of low-efficiency and failures of certain enterprises.
 Management
• In business and organizations
• Means to coordinate the efforts of people to accomplish goals
and objectives.
• Using available resources efficiently and effectively.
• Management comprises planning, organizing, staffing,
leading or directing,
• And controlling an organization or initiative to accomplish a
goal.
• Resourcing include the deployment and manipulation of
human resources, financial resources, technological
resources, and natural resources.
 Manager

• Manager are people who are in charge of

others
• Responsible for the timely and correct
execution of actions
• That promotes their units successful
performance
• The basic concept of personal Management
• Historical development of HRM department in
organization.
• The important factor that shift from Personal
Management to HRM
 Personal &HR Management
• The personal management and HRM refer to
the same processes.
• HRM is a modern term emerged during 1970
and finally accepted in 1990.
• Management of people with in the
organization means
• Transform their workforce into a source of
completive advantage.
 The Strategic Role of Human Resource
Management
• All managers performs certain basic functions
• These are five basic functions of planning,
organizing, staffing, leading, and controlling.
• They are called management process.
 Management process

a. Planning.
b. Organizing.
c. Staffing.
d. Leading.
e. Controlling
- Constitute the core managerial functions of
an organization
-The specific activities performed under each
of these functions are explained as follows
 Planning
• Planning   It is an effective tool to deal with the future.
• In this context, accurate forecasting is vital to the
success of any plan.
• Planning is such a crucial function for an organization
that it is the key to all other managerial functions.
• The steps involved in planning are:
• Establishing goals and standards,
• Developing rules and procedure,
• Developing plans and forecasting.
 Organizing
• Once the plans are formulated, the next step is to organize the men
and material in order to accomplish those plans.
• Organizing is a process through which the firm establishes its
structure and determines
• The authority, responsibility and accountability of each member in
relation to the job.
• Thus, organizing involves:
• Establishing departments,
• Delegating authority to subordinates,
• Assigning specific task to subordinates,
• Coordinating the work of subordinates,
• Establishing channels of authority and communication.
 Staffing
• This function deals with the creation and
maintenance of human resources through
• Employment, compensation, benefits, training and
development,
• It aims to put in place HR policies in order to deal
with wage fixation, working conditions, and
promotional opportunities for prospective employees.
• The steps involved in the staff function are
• Determining type of people should be hired
 Staffing Cont--
• Recruiting prospective employees
• Selecting employees
• Evaluating performance
• Setting performance standards
• Compensating employees
• Counseling employees
• Training and developing employees
 Leading

• It includes the following activities

• Ensuring effective two-way communication for the
exchange of information with the subordinates
• Developing procedure how to get the job done
• Getting work done through subordinates
• Motivating subordinates to strive for better
performance
• Maintaining the morale
 Controlling
• Controlling is the process of checking the
efficiency of the individuals and the groups in
fulfilling the plans and goals through follow-up
measures.
• The processes involved in controlling are
• Establishment of standard performance
• Measurement of actual performance
 Controlling cont-
• Setting standards such as
• i) sales quotas
• Ii)quality standards
• Iii)production levels
• Devise a methods to check performance with
these standards
• Taking corrective action as needed
 Human resource management (HRM)

– The policies and practices involved in carrying out

the “people” or human resource aspects of a
management position, including recruiting,
screening, training, rewarding, and appraising
 HRM functions/ processes
• HR managers to fulfill the goals and objectives
of the organization.
• They perform two sets of functions,
• i)Managerial functions and
• ii)Operative functions.
 Managerial functions
• These are the basic functions P,O,S,L,C
• Performed by the HR managers in their
capacity as managers or heads of their own
departments.
• In fact, all managers, irrespective of their
departments, perform these functions.
 Operative functions
• These are specialized activities performed
exclusively by the HR managers,
• Usually for all the departments.
 Operative function or HRM function

• It includes, amongst others, the processes of

• hiring,
• training,
• compensating,
• appraising and
• retaining employees,
• and attending to their labor relations,
• health and safety,
 Personnel Aspects Of A Manager’s Job
• Conducting job analyses (determining the nature of each employee’s job)
• Planning labor needs and recruiting job candidates
• Selecting job candidates
• Orienting and training new employees
• Managing wages and salaries (compensating employees)
• Providing incentives and benefits
• Appraising performance
• Communicating (interviewing, counseling, disciplining)
• Training and developing managers
• Building employee commitment
 Manager should also know about
• Equal opportunity and affirmative action
• Employee health and safety
• Handling grievances and labor relations
Why Is Human Resource Management Important to All Managers?

• Why are these concepts and techniques

important to all managers?
• Perhaps it's easier to answer this by listing
some of the personnel mistakes you don't
want to make while managing.
• For example, you don't want to:
• Hire the wrong person for the job
• Experience high turnover
• Have your people not doing their best
• Waste time with useless interviews
• Have your company take to court because of discriminatory
actions
• Have your company cited under federal occupational safety
laws for unsafe practices
• Have some employees think their salaries are unfair and
inequitable relative to others in the organization
• Allow a lack of training to undermine your department's
effectiveness
• Commit any unfair labor practices
 Avoid mistake
• One can do everything else right as a manager—
• lay brilliant plans,
• draw clear organization charts,
• set up modern assembly lines,
• and use sophisticated accounting controls—
• but still fail, Why
• by hiring the wrong people or by not motivating
subordinates.
 
• On the other hand, many managers--presidents,
generals, governors, supervisors—
• Were successful even with inadequate plans,
organizations, or controls.
• They were successful because they had the
ability of hiring the right people for the right jobs
• And motivating, appraising, and developing
them.
 Bottle Neck
• Can capital is the bottle neck for a developing
industry ? or
• It is the workforce and company inability.
• Industries growth can partly stopped or
hampered if they can not maintain an efficient
and enthusiastic labor force.
• A project backed by good ideas , enthusiasm and
even shortage of cash can progress.
• This will remain true in all circumstances.
 What Is a Line Manager?

• Of all activities associated with the activities

occurring on a production line.
• With most company organizations,
• The role of effectively managing a production
line is assigned to an individual
• Whom is called a line manager or supervisor.
 Who are line managers

• Line managers are those managers to whom individual employees

or teams directly report
• and who have responsibility to a higher level of management for
those employees or teams.
• The term ‘front-line managers’ is rather more specific and normally
refers to line managers in the lower layers of the management
hierarchy –
• That is, where the employees who report to them do not
themselves have any managerial or supervisory responsibility.
• Front-line managers are often promoted from within and are
unlikely to have formal management education.
The management responsibilities carried out
by line managers
• Front-line managers might include:
• Day-to-day people management
• Managing operational costs
• Providing technical expertise
• Organization of work allocation
• Monitoring work processes
• Checking quality
• Dealing with customers/clients
• Measuring operational performance.
 Line Manager Role

• Line managers are responsible for attaining an

organization's performance goals,
• Such as those for earnings, market share and
operational excellence.
• A line manager's department works with other
line management departments to develop
targets or
• Goals for achieving performance objectives, and
then works to meet them.
• A line manager sets targets, in other words,
• And leads herself and her employees in hitting
them.
• Line managers also have many administrative
responsibilities,
• Including performance of various human
resources-related functions.
 Line and Staff Aspects of HRM
• Line manager
– A manager who is authorized to direct the work of
subordinates and is responsible for accomplishing
the organization’s tasks.
• Staff manager
– A manager who assists and advises line managers
 Line Managers’ HRM Responsibilities
1. Placing the right person on the right job
2. Starting new employees in the organization (orientation)
3. Training employees for jobs new to them
4. Improving the job performance of each person
5. Gaining creative cooperation and developing smooth working
relationships
6. Interpreting the firm’s policies and procedures
7. Controlling labor costs
8. Developing the abilities of each person
9. Creating and maintaining department morale
10.Protecting employees’ health and physical condition
 Functions of the HR Manager
• A line function
– The HR manager directs the activities of the people in
his or her own department and in related service areas
(like the plant cafeteria).
• A coordinative function
– HR managers also coordinate personnel activities, a
duty often referred to as functional control.
• Staff (assist and advise) functions
– Assisting and advising line managers is the heart of the
HR manager’s job
 HR and Authority
• Authority
– The right to make decisions, direct others’ work, and give
orders.
• Implied authority (indirect)
– The authority exerted by an HR manager by virtue of others’
knowledge that he or she has access to top management.
• Line authority (related to line function)
– The authority exerted by an HR manager by directing the
activities of the people in his or her own department and in
service areas.
 Employee Advocacy
• HR must take responsibility for:
– Clearly defining how management should be
treating employees.
– Making sure employees have the mechanisms
required to contest unfair practices.
– Represent the interests of employees within the
framework of its primary obligation to senior
management.
 Examples of HR Job Duties
• Recruiters
– Search for qualified job applicants.
• Equal employment opportunity (EEO) coordinators
– Investigate and resolve EEO grievances, examine
organizational practices for potential violations, and
compile and submit EEO reports.
• Job analysts
– Collect and examine information about jobs to prepare
job descriptions.
Examples of HR Job Duties (cont’d)
• Compensation managers
– Develop compensation plans and handle the
employee benefits program.
• Training specialists
– Plan, organize, and direct training activities.
• Labor relations specialists
– Advise management on all aspects of union–
management relations.
HR Organizational Chart (Small Company)
HR Department Organizational Chart (Large
Company)
Cooperative Line and Staff HR Management

1. The line manager’s responsibility is to specify the

qualifications employees need to fill specific
positions.
2. HR staff then develops sources of qualified
applicants and conduct initial screening interviews
3. HR administers the appropriate tests and refers
the best applicants to the supervisor (line
manager), who interviews and selects the ones he
or she wants.
 Employment and Recruiting—Who
Handles It? (percentage of all employers)
 The Changing Environment Of
HR Management
• HR’s changing role:
“ Personnel departments”
– Took over hiring and firing from supervisors,
payroll, and benefit plans administration.
– (Union legislation)In the 1930s added “protecting
the firm in its interaction with unions”
responsibilities (labor relations).
– Assumed organizational responsibilities for equal
employment and affirmative action.
 A Changing HR Environment
• Globalization
• Technological Advances
• Exporting Jobs
• The Nature of Work
• Workforce Demographics
 Globalization

• Tendency of a firm to extend their sales and

manufacturing abroad
• More globalization means more competition
and
• More competition means more pressure to be
“world class”
• Lower cost, to make employee more
productive, better product.
 Technological Advances
• Uses of Internet for sale product all over the
world
• Channel partner over the web
 Exporting Jobs
• Competitive pressure and the search for
greater efficiencies are
• Prompting more employers to export the job
abroad
• Figure 1.4 summarizes the situation.
Employment Exodus(migration):
Projected Loss of Jobs and Wages

Figure 1.4
 The Nature of Work
• The dramatic increase in productivity that lets
manufacturers produces more with few worker
• When a customer order a product(computer)
on internet.
• The same message go to all the person
producing the parts for that product.
• Therefore the manufacturing jobs require more
education and skills.
 Measuring HR’s Contribution
• Strategy
– The company’s long-term plan for how it will balance
its internal strengths and weaknesses with its external
opportunities and threats to maintain a competitive
advantage.
• HR managers today are more involved in partnering with
their top managers in both designing and implementing their
companies’ strategies.
– Top management wants to see, precisely, how the HR
manager’s plans will make the company more valuable.
 Metric
• A performance metric is that which determines
an organization's behavior and performance.
• Performance metrics measure of an
organization's activities and performance.
• Parameters or measures of quantitative
assessment
• Used for measurement, comparison or to track
performance or production.
 HR Metrics
• HR manager s need a set of quantities
performance measure (metrics)
• The can use to asses their operation
• CEO may ask how new incentive plan help in
improving :
• Customer services, customer satisfaction and
profitability of each of our sales,
 HR Metrics
• Absence Rate
[(Number of days absent in month) ÷ (Average number of employees
during mo.) × (number of workdays)] × 100
• Cost per Hire
(Advertising + Agency Fees + Employee Referrals + Travel cost of
applicants and staff + Relocation costs + Recruiter pay and benefits) ÷
Number of Hires
• Health Care Costs per Employee
Total cost of health care ÷ Total Employees
• HR Expense Factor
HR expense ÷ Total operating expense
 HR Metrics (cont’d)
• Human Capital -Return on investment( ROI)
Revenue − (Operating Expense − [Compensation cost + Benefit cost]) ÷
(Compensation cost + Benefit cost)
Full-time equivalent (FTE) is a unit that indicates the workload of an
employed person (or student) in a way that makes workloads
comparable across various contexts.
FTE is often used to measure a worker's involvement in a project, or to
track cost reductions in an organization.
An FTE of 1.0 means that the person is equivalent to a full-time worker,
while an FTE of 0.5 signals that the worker is only half-time
 HR Metrics (cont’d)
• Human Capital Value Added
Revenue − (Operating Expense − ([Compensation cost + Benefit Cost]) ÷
Total Number of FTE
• Revenue Factor
Revenue ÷ Total Number of FTE
• Time to fill
Total days elapsed to fill requisitions ÷ Number hired
 HR Metrics (cont’d)
• Training Investment Factor
Total training cost ÷ Headcount
• Turnover Costs
Cost to terminate + Cost per hire + Vacancy Cost + Learning curve loss*
• Turnover Rate
[Number of separations during month ÷ Average number of employees
during month] × 100
• Workers’ Compensation Cost per Employee
Total WC cost for Year ÷ Average number of employees
 Learning curves cost*
• Learning Curves denote the relationship between unit cost
and cumulative(collective) output in stable processes.
• All about ongoing improvement.
• Managers and researchers noticed from,
• Mining to manufacturing etc,
• How fast can you improve to a productivity
• What are the limitations to improvement?
• Are aggressive goals achievable?
• They also denote the relationship between unit defect
rates and cumulative output in stable processes.
 Measuring HR’s Contribution
• The HR Scorecard
– Shows the quantitative standards, or “metrics”
the firm uses to measure HR activities.
– Measures the employee behaviors resulting from
these activities.
– Measures the strategically relevant organizational
outcomes of those employee behaviors.
 What Is an HR Score Card
 

• An HR scorecard is a visual representation of

key measures of human resource department
• Achievements, productivity and other factors
important to the organization.
• Factors measured include costs, hiring,
turnover, training,
• Performance management and alignment
with corporate(business/commercial) goals.
 HR score card Cont--
• Most HR scorecards are tied to corporate goals or
strategic plans
• They are designed to track and measure the efficacy
(usefulness)of human resource activities
• To enable managers to make targeted investments in HR
and organizational structures.
• Scorecards include current data and comparisons to
previous time periods,
• Such as the previous quarter or year, and
• Historical data to show improvements toward goals.
Benefits of a High Performance Work System
(HPWS)
• Generate more job applicants
• Screen candidates more effectively
• Provide more and better training
• Link pay more explicitly to performance
• Provide a safer work environment
• Produce more qualified applicants per position
• More employees are hired based on validated selection tests
• Provide more hours of training for new employees
• Higher percentages of employees receiving regular
performance appraisals(employee evaluation).
 The New HR Manager
• New Proficiencies
– HR proficiencies :
– Business proficiencies:
– Leadership proficiencies
– Learning proficiencies
 HR proficiencies

• Traditional knowledge and skills in areas, such

as
• Employee selection ,
• Training and
• Compensation
 Business proficiencies

• New role of HR professional in creating

profitable enterprise(project) that serve
customer effectively.
• HR managers need to familiar with how
companies operate including strategic
planning, marketing, production and finance.
• HR managers speaks the language of CEO
 Leadership & Learning proficiencies

• Leadership proficiencies
HR managers need the ability to work with and lead
management group
• Drive the change required to implement
employee screening and training systems
• Learning proficiencies:
• He or She must have the ability to stay abreast
(side by side) of and apply all new technological
and practices affecting the profession
 The New HR Manager (cont’d)
• The Need to “Know Your Employment Law”
– Equal employment laws
– Occupational safety and health laws
– Labor laws
Effects CFOs (Financial) Believe Human Capital
Has on Business Outcomes
 The New HR Manager
• Ethics and HR
– Ethical lapses (e.g., Enron, Martha Stewart)
• Sarbanes-Oxley Act in 2003
– Intended to control erroneous corporate financial
reporting:
• Requires CEOs and CFOs to certify their companies’ periodic
financial reports.
• Prohibits personal loans to executive officers and directors.
• Requires CEOs and CFOs to reimburse their firms for bonuses and
stock option profits if corporate financial statements subsequently
require restating.
 HR Professional Certification
• HR is becoming more professionalized.
• Society for Human Resource Management
(SHRM)
– SHRM’s Human Resource Certification Institute
(HRCI)
• SPHR (senior professional in HR)
• PHR (professional in HR)
certificate
 HR and Technology
• Benefits of technological applications for HR
– Intranet-based employee portals through which
employees can self-service HR transactions.
– The availability of centralized call centers staffed with HR
specialists.
– Increased efficiency of HR operations.
– The development of data warehouses of HR-related
information.
– The ability to outsource HR activities to specialist service
providers.
Strategy and the Basic HR Process
• Job analysis refers to both the determination of specific
tasks and responsibilities connected to a job and
• Identifying the skills, knowledge and abilities required for
the job holder.
• HR planning involves choosing and placing the right person
at the right job and at the right time.
• Recruitment involves gathering a pool of applicants from
which suitable employees may be selected.
• Lastly, selection involves screening, testing, interviewing and
hiring the most suitable employees for the organization.
 Procurement 
• Series of activities undertaken by the HR
managers for filling the present and future
vacancies of the organization.
• The activities include
• job analysis and designing,
• HR planning,
• Recruitment and, finally, the selection of
suitable employees.
 Development 
•  Refers to both employees’ training and
management development.
• HR managers are responsible for conducting
and supervising training and development
programmes for employees.
• The purpose of a training and development
programme is to increase the employees’
competencies in their job by improving their
knowledge, skills and abilities.
• Training and development is widely accepted
as a method for enhancing the employee
• skills,
• increasing the individual and organizational
performance,
• improving the employee morale,
• and achieving the business growth and
success.
 Compensation  
•  This refers to the determination of the pay scale and other
benefits for the employees.
• Establishing and maintaining the pay system of an
organization is one of the principal jobs of the HR managers.
• They must devise ways to ensure fair and equitable pay
rates.
• In addition, HR managers should regularly manage the
performance evaluation system of the organization, and
continuously design reward systems such as performance-
linked incentive plans and bonus and flexible work
schedules. 
 Maintenance 
• The maintenance function aims at retaining efficient and experienced
employees in the organization.
• In this regard, HR managers are responsible for offering a wide range
of HR programmes
• covering occupational safety,
• health promotion and physical fitness,
• canteen facilities,
• recreation activities,
• transportation programmes,
• employee suggestion schemes,
• career counselling and growth for creating a positive work
environment. 
 Integration  
•  It consists mainly of industrial relations and aims at ensuring
good relations between the management and the employees.
• HR managers have to implement industrial relations
programmes
• that would ensure ethical and fair treatment in disciplinary
action, grievance redressal, and career management
processes.
• They should also counsel the employees and the
management to prevent and, when necessary, resolve
disputes over labour agreements or other labour relation
issues.
• It is to be understood here that the functions of HRM can
vary widely from one organization to another, depending
upon its nature, size, and objectives.
• For instance, a smaller organization may follow a shorter
HRM process with a greater emphasis on functions like
procurement and compensation and little or no priority for
activities like training and development and industrial
relations maintenance.
• On the contrary, large organizations may pursue a longer
and more comprehensive HRM process to meet the
requirements of both the management and the workforce.