Human Resource Management Unit:1

Human Resource Management_Unit:1

DEPARTMENT OF MANAGEMENT STUDIES (M.B.A)

HUMAN RESOURCE MANAGEMENT

UNIT -1

Meaning

Human resource management is the art of procuring, developing & maintaining competent workforce(knowledge, skill, ability) to achieve the goals of an organization in an effective and efficient manner.

Objectives of HRM

• To help the organization to reach its goals.
• To employ the skills & abilities of the work force efficiently.
• To provide organization with well trained & well motivated employees.
• To increase the fullest employee’s job satisfaction & self actualization.
• To develop & maintain a quality of work life(QWL).
• To communicate HR policies to all employees.
• To be ethically & socially responsible to the needs of the society.

Personnel management renamed as human resource management:

• Earlier they are treated as tools and they can be enhanced (or) enriched only by training & development.
• Loss of security

Now,

• They are treated as human beings- a resource.
• As an asset combination of the company.
• Treated as family members.
• Security is more, productivity increases.

FUNCTIONS OF HRM

• MANAGERIAL FUNCTIONS
• OPERATIVE FUNCTIONS.

MANAGERIAL FUNCTIONS

A. Planning,Organizing, Directing, Controlling related to HR management.

OPERATIVE FUNCTION

B.(i) Procurement

Job analysis

HR planning

Recruitment

Selection

Placement

Induction

Internal mobility

(ii) Development function

Training

Executive development

Career planning

Succession planning

Hrd strategies

(iii) Motivation & compensation

Job design

Work scheduling

Motivation

Job evaluation

Performance& potential appraisal

Compensation administration

Incentives, benefits& other services

(iv) Maintenance

Health

Safety

Welfare

Social security- family welfare.

(v) Integration

Grievances handling

Disciplinary action

Team effort

WPM- Workers Participation in Management: Allowing the workers to take part in decision making process.

Empowerment

Organizing(or) engaging trade union

Employer’s association. Eg: Bus body builders association.

Industrial relations:

• Relationship between employer-employer
• Relationship between employer-employee

EMERGING ISSUES

• Personnel records
• Personnel audit(HR audit) – evaluating& examining the procedures& policies periodically
• Personnel research- checking up whether policies that set up are effective (or) not.
• Hr accounting
• HRIS
• Job stress
• Counseling
• Mentoring
• International HR.

Role of HR Manager / Personnel Manager- (16M)

Administrative Role

Operational Role

Strategic Role

Administrative Role

• Policy maker - Policies basedon acquiring & Retaining HR:

-Helping the management to frame policies on acquisition & retention policies.

-Wages, Salary administration, welfare activities, personal records, working conditions. etc regarding.

Administrative Experts

• Processing & record keeping, maintaining employee files, benefit,

claims etc.

Advisory

• Advising, suggesting, counselling and helping the line executives.
• Regarding grievances redressal, conflict resolution, employee selection & training etc.

Line Function

• Activities involving operational function directly in the organization.

Staff Function

• Advising committee- acts as a legal Advisor
• Do not have decision making powers.

“HR Manager handlesboth Line & staff function “

House Keeper

• Recruiting, pre-employment testing, reference checking, time keeping etc.

Counsellor

• HR Manager discusses Various problems of employees relating to work, carrier, supervisors,colleagues, health, family etc.

Welfare officer

• Monitoring whether the company follows all the acts or not – such as disputes act,Bonus act, wages act etc.

Legal consultant

1. Role of settling disputes
2. Handling disciplinary cases
3. Doing collection bargaining.(Dealing with welfare measures regarding, b/w employee & employer)
4. Filing suits in labour court, industrialtribunals, civil court in behalf of the company.

Operational Role

Recruiter

• Finding the suitable, competent person & encouraging them to apply for the job.
• Trainer, Developer, Motivator.

Coordinator

• Coordinating with all the departments for fulfilling the manpower vacancies

Mediator

• Mediator in case of Friction & conflict b/w2 employees, Group of employees, superior & subordinates

Employee Champion

• Last Resort of the employees.

Strategic Role

• Change agent change implementer
• Strategic Partner
• You must analyze the cause & effect of the demands from the workersteam & also represent if is favorable one.

Nature of HRM

HRM – Application of management principles to management of people in an organisation.

1. HRM is a people related function (Hiring, Training & Development, performance appraisal, compensation, safety and health, welfare, industrial relations, etc.

-Building of Human Capital: The stock of employee skills, knowledge and capabilities that have significant impact on a firm’s performance.

1. HRM associates, HR policies and practices with the organisation’s strategies.
2. HRM involves the application of management principles and functions
3. HR functions applicable to both business and non-business organisations (Education, health care, recreation, etc.,)

Human Factors (Ergonomics)

Human factors as 'the environmental, organisational and job factors, and human and individual characteristics which influence behaviour at work’.

Ergonomics (or human factors) is the scientific discipline concerned with the understanding of interactions among humans and other elements of a system, and the profession that applies theory, principles, data and methods to design in order to optimize human well-being and overall system performance.

Ergonomics is concerned with the ‘fit’ between the user, equipment and their environments. It takes account of the user's capabilities and limitations in seeking to ensure that tasks, functions, information and the environment suit each user.

Ergonomics refers to matching the work environment to the employee’s body movements and conveniences. The purposes of ergonomics are to save human resources, protect employee’s health and maximize productivity.

Comfort :

Best fit with human factor, materials & equipment.

Ergonomics :

Convenient work environment along with comfort.

• Creating a comfort infrastructure towards the favorableness of employees.
• Human factor, as the environment, organisationjob factors human individual character which influence human behavior at work.
• It is concerned with the fit b/w the user, equipment & their environments. It takes a/c of the user’s capabilities & Limitations in seeking to ensure that tasks, functions, into & the environment suit each user
• It refers to matching the work environment to the employee’s body movements & conveniences.
• The purpose of ergonomics is to save human resources, protect employee’s health & maximize productivity.

Importance of Human factor: Advantages

• Reduction in employee health problem like back strain, joint pain & lung diseases.
• Increase in productivity due to efficient utilization of HR.

• Reduce in absenteeism
• Reduction in error rates, break down & spoilage
• Saving on time & HR.
• More open communication, social interaction & open consultations among employees due to open space concept.
• Status reduction increase in upward communication
• Increase in Inclination among employees at the work place rather than around.
• Improve levels of employees job satisfaction

Personnel (HR) Policies

-Guides to decision making for the personnel function(s).

-It is a general statement guides for decision making relating to personal functions.

Types of policies

1.Originated Policies

-These are framed at the commencement of the organisation

-Eg. Employee welfare in more important than profit.

2. Appealed Policies

-Based on the experience & legal proceedings the policies are farmed

-They are framed on the request to management & trade unions are called appealed policies.

-Eg. Before 1990’s there is no policy to use mobile phones in the institution (Edu).

3. Imposed Polices

-Framed by the pressure from external environment may be the Government (or) society either.

-Eg. Policies from the government to be amended in company pollution control.

4. General Policies

-Aimed at the growth & development of the organization.

-Eg. Advice from Experts at various fields.

5. Specific Policies :

- Formed for particular reason

- May be continued (or) dropped later.

- Ad -hoc policy

6. Written (or) implied policy :

- Policies that all formed & communicated to all are called written policies.

-Eg. All the above policies in written form.

Implied policy:

-They are not communicated but they are existing in the organization

Advantages of personnel Policies :

Delegation of authority (Power to do anything by the reference of the policy.

Uniformity (same policies & procedures)

Better control (able to avoid conflicts)

Standards of efficiency (No fluctuations & will be standard)

Confidence among the workers (Guide the employees- free of working)

Speedy decisions (Policies Guide)

Coordination with all departments.

Characteristics of sound personnel Policies:

To be an effective policy framed the following points to be observed.

Related to objectives of the company

Easy to understand

Precise

Stable as well as flexible

Based on facts (Reality needed)

Appropriate number of policies

Just fair & equitable grounds.

Reasonable (Purpose must exist)

Review (can be updated)

Coverage of personal policies:

Social Responsibility

• Equity (Equality)
• Consideration (considering individual worker Prospects, Seniority & self respect)
• Quality of work life
• Employment policies
• Promotion policies
• Development policies -Relating to training, reward & award system, time span of training programme etc.
• Relations policies -Regarding motivation, communication, morale (loyalty)
• Leadership style, grievances procedure, disciplinary procedure, employee counseling etc.

Principle sources for determining the content or meaning of policies

1. Past practice in the organisation
2. Prevailing practice in rival company
3. Attitude and Philosophy of founders of the company/ Directors/ Top management
4. Attitudes & Philosophy of middle and lower level management
5. The knowledge and experience gained from handled HR problems

Few Personnel Policies

• Policy of hiring people based on reservation, gender, marital status and the like
• Policy on terms and conditions of employment – compensation policy, Hrs. of work, overtime, promotions, transfer, lay-off, etc.
• Policy regarding medical benefits – Sickness benefits, ESI and other medical benefits
• Policy regarding Housing, transport, uniform and allowance
• Policy regarding training and development – Need, method and frequency
• Policy regarding IR – Trade union, recognition, collective bargaining, WPM, grievance procedure and communication with workers.

EVOLUTION OF HRM

-Though the importance of labour officer/ HRM was recognized as early as 1929 the appointment of officers to solve labour & welfare problems gained only after the enactment of “THE FACTORIES ACT 1948”.

Growth in India

Early Phase:

HRM has had its origin dating lack to 1800 B.C.

Eg. The minimum wage rate and incentive wage plan was included in the babylonian code of Hemmurabi.

In China 1650 B.C. had originated the principle of division of labour and they understood labour turnover even in 400 B.C

The span of management were well understood by Moses around 1250 B.C. (wide/narrow span) and

In India Kautilya (Chanakkiyar) 400 B.C. in his Arthashastra made reference to various concepts like job analysis, selection procedure executive development, and incentive system and performance appraisal.

Legal Phase:

The Royal commission on labour in 1931 suggested the appointment of labour officer to protect workers interest.

After independence the Factories Act 1948 made it obligatory for factories employing 500 or more employees.

Welfare Phase:

During the 1960’s the scope of personnel function has expanded bit, covering labour welfare, participative management, industrial harmony etc.

Development phase:

In 1960’s & 70’s the HR professionals focused more on development aspects of Human Resources.

The emphasis was on treating a harmonious balance between employee’s demand and organizational requirements.

The two professional bodies IIPM and NILM (India Institute of personnel Management, Kolkata; National Institute of labour Management, Mumbai) were merged to form the National Institute of personnel Management at Kolkata (NIPM).

Evolution of HR Function:

Concept-Particulars (What is it all about)

1 / The commodity concept / Labour was regarded as a commodity to be bought & sold
2 / Factors of Production / It was considered as like any other factor of production such as money, material.
3 / Goodwill concept / Welfare measures have a positive impact on productivity
4 / Paternalistic concept
(Parental Approach) / Mgmt protective attitude like parents & satisfy the needs of the employees
5 / Humanitarian concept / To improve productivity - Physical, social, Psychological needs of workers must be satisfied
6. / HR Concept / Employees are the most Valuable asset of the organization
7. / Emerging concept / Employees should be accepted as partners in the progress of the company

Phases

Period / Development / Outlook / Emphasis / Status
1920s – 1930s / Beginning / Pragmatism of Capitalists / Statutory, welfare, paternalism / Clerical
1940s – 1960s / Struggling for recognition / Technical, legalistic / Introduction of techniques / Administrative
1970s – 1980s / Impressing with sophistication / Professional, Legalistic impersonal / Regulatory conformance, imposition of standards on other functions / Managerial
1990s / Promising (Gifted) / Philosophical / Human values, productivity through people / Executive

COMPUTER APPLICATION IN HRM

Computer is occupied in all the areas of HRM were there is transformation of information from 1employee to another & from 1 client to another both internally & in the processed form about the activities of HRM.

Applications :

E-job design & Analysis :

• Such as introducing alternative work schedules, Flexi work arrangements(FWA) ,employeeempowerment, multi skilling etc.
• The information of listing skills & competency mapping are placing on the net then the system matches the distinct skills & competency mapping & produces the output of identifying the employee suitable for a particular task.

E-HR Planning:

• Computer programs indicate the number of employees required for each level for each category of job based on sales and production forecasts.

E- Recruitment:

• As (Reg- job vacancies ) through internet & sending information directly to applicant through E – mail.

E-Selection:

• Selection tests through online,interviews through video conferencing and getting references letter from reference through E-mail.

E- Performance Appraisal / Management:

• Several software packages are developed to measure employee performance & offer suggestions for improvement of employee performance Eg. ICICI Bank.
• The Software on employees performance appraisal provides number of statements & sub statements on each of the performance categories.

E-Training & Development :

• Online training to workers &online executive development to staff is provided through computer.

E-HRM :

• Doing all HR related function through electronic medium.

E-Compensation Management :

• Computer for salary fixation, salary payment, salary calculations and allowances, various employee benefits etc.

E-HR Records:

• HR records are created maintained and updated with the help of computer easily and at a faster rate .

E-HR Information:

• HR Information is generated, maintained, processed at the appropriate places or clients with the help of a software with high speed & accuracy.

E-HR Audit:

• The software automatically completes the HR audit & produces the audit report, HR manager then modifying the report by deleting or adding any points.

Personnel/ HR Audit

HR Audit refers to an examination & evaluation of policies, procedures & practices to determine the effectiveness of personnel management.

It covers basically 3 things :

1. Measurement & evaluation personnel programs, policies & procedures.
2. Identification of gap between objectives & resources (output)
3. Determination of what should and what should not be done in future.

Need for HR Audit :

1. Increasing size of organization & several organizations.
2. Change in flexibility of management towards human resources.
3. Increasing strength & influences of traced unit.
4. Changing HR Management philosophy there by personnel policy & practice throughout the world.
5. Increasing dependence of an organization on the human resource system & its effective functioning.

Benefits of HR Audit :

1. Identifies the contributions of HR department
2. Improve the professional image of HR department
3. Encourages greater responsibility & professionalization among members of HR dept.
4. Classifies the HR department duties and responsibilities.
5. Stimulates uniformity of personnel policies & practices
6. Find critical personnel problems.
7. Ensures timely complaints with legal requirements.
8. Reduce HR Causes.

Records Used in the process of HR Audit:

1. Payroll
2. Total and unit labour cost
3. Interview Reports.
4. Test scores
5. Training Records
6. Labour productivity
7. Work stoppage due to strike
8. Lock- out, Lay off, Accident Reports, turnover reports
9. Absenteeism Reports etc

HR Accounting (HRA)

According to American Association of Accounts (AAA), “HRA is a process of identifying & measuring data about Human Resources and communicating this information to interested parties”.

Flamhoitz defines HRA as “Accounting for people as an organization Resources. It involves measuring the cost incurred by the organisation to recruit, select, train & develop human assets. It also involves measuring the economic value of the people to the organization.

Objectives:

1. Provide cost value information about acquiring, developing, allocating and maintaining HR so as to meet organizational goals.
2. Enable management to effectively monitor the use of HR.
3. Find whether human resource assets are appreciating or depreciating over a period of time.
4. Assist in the development of effective Management practices by classifying the financial consequences of various practices.

Advantages :

1.It finds the strengths & weaknesses of existing work force for Recruitment planning whether to hire or not.

2.It provides valuable feedback to the managers regarding the effeteness of HR policies & Practices.Eg. Motivation to employees

3.It helps potential investors judge a company better on the strength of the human assets.Eg.MICO BOSCH – Quality judgment

4.It helps management in taking appropriate decision regarding the use of human assets in an organization like or new recruitment regarding internal promotion, idea of automation etc.

Limitations of HRA:

1. It is not easy to value human assets in an organization
2. HRA involves full measurement problem
3. Employees and unions may not like the idea.
4. There is no empirical evidence.

Dr.P.Mohanraj, Associate Professor & Head/MBA, Chettinad College of Engg. & Tech., KarurPage 1