Unit 1- Part II

Human Resource Management

 Personnel Policies
Personnel Policies lay down the
decision making criteria in line with
the overall purpose of the
organisation in the area of Human
Resource Management
Or
Recognised intention of top
management with respect to
efficient management of workforce.
 Characteristics of Sound Personnel Policies

• Clear, precise and easily understandable

• should be in writing
• protect the interests of all parties in the organization
• It should be supplementary to overall policy of the
organization. 
• should be responsive to the prevailing situation and
environment.
• should have the support of all concerned parties
 Advantages
• Helps Managers
• Prompt Action
• Avoids Personnel Bias
• Ensures Long Term Welfare
• Ensures decision made is consistent and in tune with
objectives and interest of enterprise
Formulation of Personnel Policies
1. Preliminary Investigation
a. Labour Legislation
b. Social values and customs
c. Employees’ aspirations

2. Environment Scanning
3. Identification of Policy Areas
4. Analysis of Alternative policies
Formulation of Personnel Policies (contd.)

5. Participation of Lower Levels

6. Approval of Top Management
7. Implementation of Policy
8. Policy Appraisal
Policies in various Personnel Areas
 System Approach to HRM
System ?
A combination of things or parts forming a complex or
unitary whole.
- The parts, elements, things, members, methods, plans
and procedures are sub-systems
An organisation, as a system, possess following
features:
 The system is goal oriented
 A system is engaged in processing or
transforming of inputs into outputs
 Various components of system are
interrelated or interdependent.
 It acts upon its environment and is also acted
upon by its environment.
 Important sub-systems of business firm
1. Human resource system
2. Production system
3. Finance system
4. Marketing system
5. R&D system

Each sub-system has a number of further sub-systems.

HR or personnel system has following sub-systems:
6. Employment
7. T&D
8. Compensation
9. Maintenance or employee welfare and services
10. Personnel records etc.
 Model of HRM
• American society for T&D (ASTD) developed the HRM model.
• It integrates sub-system or areas of HRM:
1. T&D
2. Organisation Development
3. Organisation/ Job Design
4. Human Resource Planning
5. Selection and staffing
6. Personnel Research and Information System
7. Compensation / benefits
8. Employee assistance
9. Union / labour relations
• The nine areas have been termed spokes of
the wheel.
• Each area contributes to HR output:
1. Quality of work life
2. Productivity
3. Readiness to change
 Quality of work life
• It involves implementing policies and procedures that make work more rewarding for the
employee
• Like autonomy, recognition, belonging, development, external rewards etc.
 Productivity
It involves how much and how well as org.
produces.
It also depends on employees motivation

Readiness for change

Through effective communication, Training and
development
 Strategic Management
“It is formulation and implementing of plans and carrying out of
activities relating to the matters which are vital, pervasive or
continuing importance to the total organisation.”
- A. Sharplin
Strategy Formulation Process
 Porter’s Business Unit Strategies and HRM
3 types of business unit strategies that helps firm outperform other firms in industry:
1. Cost leadership strategy
HR Strategies- spelling out work that employee need to do, job specific training,
hiring employees with required qualification and skills, paying employees on the basis
of job held, relying on perf. appraisal as a control tool
2. Differentiation strategy
HR strategies –loose work planning, external recruitment at all levels, emphasis on
what individuals can do (rather than on job title held) as a basis for pay, reliance on
performance appraisal as a developmental tool rather than control device.

3. Focus Strategy
HR strategies- firm may ask employees to work hand in hand with customers to find
their needs and expectations and learn how firm can lower customers’ operating
costs.
 Strategic HRM
It is “linking HRM with strategic goals and objectives in order to
improve business performance and develop organisational culture
that fosters innovation and flexibility.”
 Strategic Role of HRM
1. Providing purposeful
direction
2. Creating competitive
advantage
3. Facilitation of change
4. Managing workforce
diversity
5. Empowerment of HR
6. Total Quality Management
HRM Strategies
Strategies that will be
increasingly used for effective
management of HRs :
a) Empowerment
b) Total quality management
c) Quality circles
d) Business process
reengineering