HUMAN RESOURCES

MANAGEMENT
Chapter One:
Foundations of Human Resource
Management
Human Resource Management an Over View
• The term "human resource management" has been
commonly used for about the last ten to fifteen years.
• Prior to that, the field was generally known as
"personnel administration." The name change is not
merely cosmetics.
• Yesterday, the company with the access most to the
capital had the best competitive advantage;
• Today, companies that offer products with the highest
quality are the ones with a leg up on the competition;
• Tomorrow is the caliber of people in the organization.
Definitions of HRM
• Human resources management (HRM) is a
management function concerned with hiring,
motivating and maintaining people in an
organization. It focuses on people in
organizations.
• Human resource management is designing
management systems to ensure that human
talent is used effectively and efficiently to
accomplish organizational goals.
Definitions …..
• HRM is the personnel function which is
concerned with procurement, development,
compensation, integration and maintenance of
the personnel of an organization for the purpose
of contributing towards the accomplishments of
the organization’s objectives.
• Therefore, personnel management is the
planning, organizing, directing, and controlling of
the performance of those operative functions
(Edward B. Philippo).
 Importance of Human Resource
Management
1. Strategic HR Management: Human resource
planning (HRP) function determine the
number and type of employees needed to
accomplish organizational goals.
2. Equal Employment Opportunity: Compliance
with equal employment opportunity (EEO) laws
and regulations affects all other HR activities.
3. Staffing: The aim of staffing is to provide a
sufficient supply of qualified individuals to fill
jobs in an organization.
Importance…….
4. Talent Management and Development:
– It includes different types of training.
5. Total Rewards:
– Compensation in the form of pay, incentives and
benefits are the rewards given to the employees
for performing organizational work.
6. Risk Management and Worker Protection:
– Ensure protection of workers by meeting legal
requirements and being more responsive to
concerns for workplace health and safety along
with disaster and recovery planning.
Importance….
7. Employee and Labor Relations:
• The relationship between managers and their
employees must be handled legally and
effectively.
• Employer and employee rights must be
addressed.
• It is important to develop, communicate, and
update HR policies and procedures so that
managers and employees alike know what is
expected.
 HRM Objectives
 Human capital : assisting the organization in
obtaining the right number and types of employees.
 To create a climate in which employees are
encouraged to develop and utilize their skills to the
fullest and to employ the skills and abilities of the
workforce efficiently
 To increase productivity through training and
development.
 Helping to establish and maintain a harmonious
employer/employee relationship
 Helping to create and maintain a safe and healthy
work environment
Objectives…….
• Developing programs to meet the economic,
psychological, and social needs of the employees.
• To help the organization to reach its goals
• To provide organization with well-trained and
well-motivated employees
• To increase the employees satisfaction and self-
actualization
• To develop and maintain the quality of work life
• To communicate HR policies to all employees.
• To help maintain ethical polices and behavior.
Objectives…..
The above stated HRM objectives can be
summarized under four specific objectives. i.e.
Objectives…….
1. Societal Objectives: seek to ensure that the
organization becomes socially responsible to
the needs and challenges of the society.
2. Organizational Objectives: it recognizes the
role of HRM in bringing about organizational
effectiveness.
• It makes sure that HRM is not a standalone
department, but rather a means to assist the
organization with its primary objectives.
Objectives….
3. Functional Objectives: is to maintain the
department’s contribution at a level appropriate
to the organization’s needs.
4. Personnel Objectives: it is to assist employees in
achieving their personal goals.
• Personal objectives of employees must be met if
they are to be maintained, retained and
motivated.
• Otherwise employee performance and satisfaction
may decline giving rise to employee turnover.
 HR Principles
There are many principles of Human
Resources.
Here are eight of them to understand and
apply appropriately to make HR practices
transparent and relevant for the future.
 HR Principles
Principle #1: Recruitment to retirement
• HR is all about dealing with employees from
recruitment to retirement.
• It includes manpower planning, selection,
training and development, placement, wage
and salary administration, promotion, transfer,
separation, performance appraisal, grievance
handling, welfare administration, job
evaluation and merit rating, and exit
interview.
 HR Principles
Principle #2: People (men) behind the machine
count.

• Previously, it was the machine behind the

man that counted.
• Today, people are the real power to drive
organizations forward. Machines only assist
people.
• Ultimately, the machine is servant to men, not
the other way around.
 HR Principles
Principle #3: Hire for attitude, recruit for skills.

• Attitude is the key to employee engagement and

success.
• Hence, HR leaders must emphasize attitude rather
than experience.
• It is better to hire a new job seeker with high attitude
and no experience than one with a rotten attitude and
years of experience.
• If employees possess a good attitude, they will have
the ability absorb the knowledge, skills, and abilities
that are essential to perform their tasks effectively in
the workplace.
 HR Principles
Principle #4: Appreciate attitude but respect
intelligence.
• It is true that both attitude and intelligence are
essential to improve the organizational bottom
line.
• If HR leaders find it is tough to get both, they
should choose attitude over intelligence as it
helps accomplish organizational goals and
objectives.
 HR Principles
Principle #5: Hire slow, fire fast.
• HR leaders must be slow in hiring the right
talent for their organizations.
• They must look for the right mindset, skill set,
and tool set in job seekers during recruitment.
• If they find that bad apples entered into their
basket, they must be removed quickly to
contain further damage to their organizations.
 … Principles
Principle #6: Shed complexity, wed simplicity.

• People today prefer to work in flat organizations

rather than tall ones.
• Tall organizations often have hierarchies with a
bureaucratic mindset that doesn’t work in the
present context.
• Employees are happy to work with partners
rather than with bosses.
• So shed complexity and wed simplicity to achieve
organizational excellence and effectiveness.
 … Principles
Principle #7: HR leaders are king and queen makers.
• They cannot become kings and queens.
• They are perceived as people who become ladders for
others to climb to higher positions.
• They know everything about HR, but they don’t
necessarily know much about other aspects in the
organization. CEOs are masters in their own domains
and jacks of other domains.
• They are masters in their areas and know something
about others areas. Thus, HR leaders must acquire
knowledge about other areas and acquire technical
and business acumen to become kings and queens—
the chief executives.
 … Principles
Principle #8: To serve is to lead and live.
• Mahatma Gandhi once remarked, “The best
way to find yourself is to lose yourself in the
service of others.”
• HR leaders must serve people with pleasure
without any pressure.
• They must become torchbearers of human
capital and knowledge.
• They must learn, unlearn, and relearn to stay
relevant.
 Factors that Affect Human Resource
Management
External Factors
1. Government Regulations
• With the introduction of new workplace compliance
standards your human resources department is
constantly under pressure to stay within the law.
• These types of regulations influence every process of
the HR department, including hiring, training,
compensation, termination, and much more.
• Without adhering to such regulations a company can
be fined extensively which if it was bad enough could
cause the company to shut down.
 Factors Affect HRM ….
2. Economic Conditions
• One of the biggest external influences is the
shape of the current economy.
• Not only does it affect the talent pool, but it
might affect your ability to hire anyone at all.
• All companies can make due in a bad economy
if they have a rainy day fund or plan to combat
the harsh environment.
 Factors Affect HRM ….
3. Technological Advancements
• When new technologies are introduced the
HR department can start looking at how to
downsize and look for ways to save money.
• A job that used to take 2-4 people could be
cut to one done by a single person.
• Technology is revolutionizing the way we do
business and not just from a consumer
standpoint, but from an internal cost-savings
way.
 Factors Affect HRM ….
4. Workforce Demographics
• As an older generation retires and a new
generation enters the workforce the human
resources department must look for ways to
attract this new set of candidates.
• They must hire in a different way and
offer different types of compensation
packages that work for this younger generation.
• At the same time, they must offer a work
environment contusive to how this generation
works.
 Factors Affect HRM ….
Internal Factor
1.Level of Growth:
• An internal factor that impacts human resources is the
company's rate of current and projected growth.
• Companies experiencing aggressive growth and rapid expansion
may require its human resources department to focus on
recruitment and staffing.
• More stagnant companies may place a greater focus on efforts
on employee retention and improving the company's culture
and workplace environment through upgrading job descriptions
and enhancing compensation and fringe benefits programs.
• Downsizing companies may have to take the regrettable
decision to lose some of its staff; a message that's often left to
HR to relay.
 Factors Affect HRM ….
2. Use of Technology
• One of the key internal factors affecting human resource
planning is the willingness for the HR department and
company management to use technology to aid in
certain key human resources functions.
• For example, companies that make greater use of tools
such as online benefits management, where employees
can make changes to their benefit plans on their own,
provide human resources workers with more time to
focus on other areas like recruiting or training and
employee development.
• This can free up a considerable amount of time and
resources across the organization.
Changing Environment of Human Resource
Management (HRM)

Factors involved in the changing

environment of HRM are as follows
 1. Work force Diversity:
• Diversity has been defined as any attribute
that humans are likely to use to tell
themselves, that person is different from me
and, thus, includes such factors as race, sex,
age, values, and cultural norms’.
• Now a days countries’ work force is
characterized by such diversity that is
deepening and spreading day by day.
2. Economic and Technological Change:

• Along with time, several economic and

technological changes have occurred that
have altered employment and occupational
pattern.
• In many countries, there is a perceptible shift
in occupational structure from agriculture to
industry to services due to technological
change.
 3. Globalization:
• Globalization increases competition in the
international business.
• Firms that formerly competed only with local
firms, now have to compete with foreign
firms/competitors.
• Thus, the world has become a global market
where competition is a two-way street.
 4. Organizational Restructuring:
• Organizational restructuring is used to make the
organization competitive.
• From this point of view, mergers and acquisitions of
firms have become common forms of restructuring to
ensure organizational competitiveness.
• The mega-mergers in the banking, telecommunications
and petroleum companies have been very visible in our
country.
• Downsizing is yet another form of organizational
restructuring.
 Ethical Issues Faced by Human Resource
1. Employment Issues:
HR professionals are likely to face maximum ethical
dilemmas in the areas of hiring of employees.
a. Pressure to hire a friend or relative of a highly
placed executive.
b. Faked credentials submitted by a job
applicant.
c. Discovery that an employee who has been
with the organization for some time, is skilled
and has established a successful record, had
lied about his educational credentials.
 Ethical Issues…..
2. Cash and Incentive Plans:
Cash and incentive plans include issues like basic
salaries, annual increments or incentives, executive
perquisites and long term incentive plans:
a. Basic Salaries: HR managers have to justify a
higher level of basic salaries or higher level of
percentage increase than the competitors to
retain some employees.
In some situations, where the increase is larger
than normal they have to elevate some positions
to higher grades.
 Ethical Issues…..
b. Executive Perquisites:
• It is non-cash benefits provided by many
employers to their executives to: Attract and retain
talent.
• In the name of executive perquisites, sometimes
excesses are often committed, the ethical burden
of which falls on the HR managers.
• Sometimes the costs of these perquisites are out
of proportion to the value added.
• For example, the CEO of a loss making company
buys a Mercedes for his personal use or wants a
swimming pool built at his residence.
 Ethical Issues…..
3. Employees Discriminations:
• A framework of laws and regulations has been
evolved to avoid the practices of treatment of
employees on the basis of their caste, sex,
religion, disability, age etc.
• No organization can openly practice any
discriminatory policies, with regard to
selection, training, development, appraisal
etc.
 Ethical Issues…..
4. Performance Appraisal:
• Ethics should be the basis of performance
evaluation.
• Highly ethical performance appraisal demands that
there should be an honest assessment of the
performance and steps should be taken to improve
the effectiveness of employees.
• However, HR managers, sometimes, face the
dilemma of assigning higher rates to employees who
are not deserving them; based on some unrelated
factors eg. closeness to the top management.
 Ethical Issues…..
5. Privacy:
• The private life of an employee which is not affecting
his professional life should be free from intrusive and
unwarranted actions.
• HR managers face three dilemmas in this aspect:
(i) The first dilemma relates to information technology. Close
circuit cameras, tapping the phones, reading the computer
files of employees etc. breach the privacy of employees.
(ii) The second ethical dilemma relates to the AIDS testing.
AIDS has become a public health problem. HR managers
are faced with two issues: Whether all the new employees
should be subject to AIDS test and what treatment should
be melted out to an employee who is affected with the
disease.
 Ethical Issues…..
(iii) The third ethical dilemma relates to Whistle
Blowing. Whistle blowing refers to a public
disclosure by former or current employees of
any illegal, immoral or illegitimate practices
involving their employers.
Generally, employees are not expected to speak
against their employers, because their first
loyalty in towards the organization for which
they work.
 Ethical Issues…..
6. Safety and Health:
• Industrial work is often hazardous to the
safety and health of the employees.
• Legislations have been created making it
mandatory on the organizations and managers
to compensate the victims of occupational
hazards.
• Ethical dilemmas of HR managers arise when
the justice is denied to the victims by the
organization.
 Ethical Issues…..
7. Restructuring and layoffs:
• Restructuring of the organizations often result
in layoffs and retrenchments.
• This is not unethical, if it is conducted in an
atmosphere of fairness and equity and with the
interests of the affected employees in mind.
• If the restructuring company requires closing of
the plant, the process by which the plant is
chosen, how the news is to be communicated
and the time frame for completing the layoffs is
ethically important.
 Human Resource Management
Model
• The Human Resource Management model
contains all Human Resource activities.
• What are the Human Resource Activities?
 Why is the HR Model important?
• The HR Strategy is usually high-level.
• The HR Strategy does not solve the issue of the HR
Process ownership.
• The strategy defines the strategic role of HR in the
organization and initiatives to be done within the
frame of several years.
• The HR Model is the best decision tool for the
ownership of the new HR Processes. Additionally,  it
helps to identify gaps in the HR Organizational
Structure and the skills and competencies of HR
employees.
 Model
1. Human Resource Planning is understood as
the process of forecasting an organizations
future demand for, and supply of, the right
type of people in the right number.
2. Job analysis is the process of studying and
collecting information relating to the
operations and responsibilities of a specific
job.
– The immediate products of this analysis are job
descriptions and job specification.
 Model….
3. Recruitment is the process of finding and
attracting capable applicants for employment.
4. Selection: is the process of differentiating
between applicants in order to identify (and
hire) those with greater likelihood of success in a
job.
5. Placement: is understood as the allocation of
people to jobs.
• It is the assignment or reassignment of an
employee to a new or different job.
 Model….
6. Training and development: it is an attempt to
improve current or future employee
performance by increasing an employee’s
ability to perform through learning, usually by
changing the employee’s attitude or increasing
his or her skills and knowledge.
7. Remuneration: is the compensation an
employee receives in return for his or her
contribution to the organization.
 Model….
8. Motivation: is a process that starts with a
psychological or physiological deficiency or need
that activates behavior or a drive that is aimed at
a goal or an incentive.
9. Participative management: Workers participation
may broadly be taken to cover all terms of
association of workers and their representatives
with the decision making process.
10.Communication: may be understood as the
process of exchanging information, and
understanding among people.
 Model….
11. Safety and health: Freedom from the
occurrence or risk of injury or loss.
12. Welfare: include services, facilities, and
amenities as may be established in or in the vicinity
of undertakings to enable the person employed in
them to perform their work in healthy, congenial
surroundings and to provide them with amenities
conducive to good health and high morale.
13. Promotions: means an improvement in pay,
prestige, position and responsibilities of an
employee within his or her organization.
 Model….
14. Transfer: Involves a change of an
employee without a change in the
responsibilities or remuneration.
15. Separations: Lay-offs, resignations and
dismissals separate employees from the
employers.
16.Industrial relations is concerned with the
systems, rules and procedures used by
unions and employers to determine
 Model….
17. Trade unions: are voluntary organizations of
workers or employers formed to promote and
protect their interests through collective action.
18. Disputes and their settlement: Any dispute
or difference between employers and
employers, or between employers and
workmen, or between workmen and workmen,
which is connected with the employment or
non-employment or terms of employment or
with the conditions of labor of any person.
 Outcomes of the HR Model?
• Clear principle for the design and setting of the HR
Roles and Responsibilities.
• It saves many conflicts in the future.
• Build a stronger and more competitive HR Function in
the organization.
• clearly defines the strategic HR Processes and strategic
HR Areas, which have to be developed further to build
a strong  and competitive position on the market.
• It helps to identify the full responsibility for the
administrative HR processes. The employees are sure
about their goals and the main drivers for their
success in HR.
 Strategic HRM (SHRM)
• The field of strategic HRM is still evolving and
there is little agreement among scholars
regarding an acceptable definition.
• The HR Strategy is usually high-level.
• The HR Strategy defines the strategic role of
HR in the organization and initiatives to be
done within the frame of several years.
 SHRM…
• SHRM is systematically linking people with the
organization; more specifically, it is about the
integration of HRM strategies into corporate
strategies.
• HR strategies focus is on alignment of the
organization’s HR practices, policies and
programmes with corporate and strategic business
unit plans (Greer, 1995).
• Strategic HRM thus links corporate strategy and
HRM, and emphasizes the integration of HR with
the business and its environment.
 Focus of Strategic HRM
• Lengnick-Hall and Lengnick-Hall (1999) summarize the
variety of topics that have been the focus of strategic
HRM writers over the past couple of decades.
These include:
1. HR accounting: which attempts to assign value to
human resources in an effort to quantify organizational
capacity
2. HR planning
3. Responses of HRM to strategic changes in the business
environment;
4. Matching human resources to strategic or
organizational conditions; and
5. The broader scope of HR strategies.
 Core Aspects of SHRM
Two core aspects of SHRM are:
A. The integration of HRM into the business
and corporate strategy
– ‘The degree to which the HRM issues are
considered as part of the formulation of the
business strategy’
B. The devolvement of HRM to line managers
instead of personnel specialists.
– ‘The degree to which HRM practices involve and
give responsibility to line managers rather than
personnel specialists’.
 Linking organizational strategy and HRM
strategy
Many scholars developed many theoretical
models that highlight the nature of linkage
between HRM strategies and organizational
strategies.
Stages of the Evolution of Strategy and HRM
Integration
• Greer (1995) talks about four possible types of
linkages between business strategy and the HRM
function / department of an organization:
1. ‘Administrative linkage’ represents the scenario
where there is no HR department looks after the
HR function of the firm.
The HR unit is relegated here to a paper-processing role. In
such conditions there is no real linkage between business
strategy and HRM.
2. ‘one-way linkage’ where HRM comes into play
only at the implementation stage of the strategy.
 Greer (1995) …..Stages of the Evolution
3. ‘Two-way linkage’ is more of a reciprocal
situation where HRM is not only involved at the
implementation stage but also at the corporate
strategy formation stage.
4. ‘Integrative linkage’, where HRM has equal
involvement with other organizational functional
areas for business development.
 Purcell (1989) …..two-level integration
• Purcell (1989) presents a two-level integration of
HRM into the business strategy.
• First-order decisions, as the name suggests, mainly
address issues at the organizational mission level and
vision statement; these emphasize where the
business is going, what sort of actions are needed to
guide a future course, and broad HR-oriented issues
that will have an impact in the long term.
• Second-order decisions deal with scenario planning at
both strategic and divisional levels for the next 3–5
years. These are also related to hardcore HR policies
linked to each core HR function (such as recruitment,
selection, development, communication).
 Guest (1987) …three levels
Guest (1987) proposes integration at three levels:
1. First he emphasizes a ‘fit’ between HR policies
and business strategy.
2. Second, he talks about the principle of
‘complementary’ (mutuality) of employment
practices aimed at generating employee
commitment, flexibility, improved quality and
internal coherence between HR functions.
3. Third, he propagates ‘internalization’ of the
importance of integration of HRM and business
strategies by the line managers.
Thank You!!!