Human Resource Management

Human Resource Management

Introduction, concept, functions, scope and significance of Human Resource Management; Organization of Human Resource Management; Qualities of Human Resource Manager and his role in industry; Professionalization of Human Resource Management in India

Introduction to HRM

“HRM is a distinctive approach to employment management which seeks to achieve competitive advantage through the strategic development of a highly committed and a capable workforce, using an integrated array of cultural, structural and personnel techniques.”
-J Storey

Human Resource Management is the strategic approach to acquiring, developing, managing, motivating and gaining the commitment of the organization’s key resource- the people who work in it and for it.”
–Michael Armstrong

HRM was a response to the Japanese competition. The Japanese put primacy on shared vision rather than on any centrally imposed rationality such as the Americans have been best known for. The Americans had neglected the pursuit of collective commitment through transformational leadership, which the Japanese paternalism revered. The Japanization inspired emphasis on cultural management through HRM to secure the commitment of employees.

There are two approaches to HRM:
1. Hard HRM
2. Soft HRM
These were based on the Michigan and Harvard models of HRM respectively. The hard model views employees as human resources to promote efficiency. It emphasizes their strategic use in minimizing cost and enhancing quality. This eventually promotes unitary perspectives of employers about employee relations. I does emphasize the need to create a work situation that is free from conflict and promotes commonality of goals of employers and employees. However, commonality is of goals is more a façade than a reality. The resource model views employees just as another resource. This is quite in consonance with the classical economic view that people are no different from just other factors of production and their management should aim at maximization o utility. It stresses the necessity of a “tight fit” between HR strategy an business strategy. The critical task of management is to align the formal structure and the HR systems, i.e., selection, appraisal, rewards and development, so that they can reinforce the realization o organizational objectives.

The soft ‘Harvard’ model an in a way be described as neo-pluralist. It emphasizes industrial pluralism half-heartedly, but nevertheless shows commitment to individual employee interests and goals along with organizational goals. It recognizes the legitimate interests of various stakeholders in the corporation, including the shareholders, groups of employees, government and the community. Although this model also views employees as resources, it differs from the hard model in that it views them as resourceful humans. This model argues for proactive interventions and emphasizes the alignment o HRM with strategic planning and culture change. It views people as social capital that can be developed. It supports the idea that commonality o interest among stakeholders can be developed, and seeks equalization of power for trust and collaboration. It argues for open channels for communication to build trust and commitment, goal orientation, and participation and informed choice.
While the hard model reflects ‘utilitarian instrumentalization’ (most beneficial use of human resource for the organization, the soft model concerns itself with the promotion of individual dignity, involvement and empowerment, i.e., a kind of ‘development humanism’.
The hard HRM underscores the calculative, strategic aspect o ‘managing the head counts’ in a most responsive way. It emphasizes that the top management should exercise control and minimize cost. The soft model focuses on the treatment of employees as proactive trustworthy resource whose competencies can be developed. It presumes that I we can ensure their commitment through motivation and appropriate leadership we can
Achieve not only better economic performance but also a tentative model for workplace justice.

Management academics find the soft model more acceptable than the hard model

Some of the features of soft HRM are
· Empowerment
· Trust
· Learning organization
· Leadership
· Excellence
· Quality circles
· Delayering

Some of the features of hard HRM are
· Downsizing
· Lean production
· Business process re-engineering (BPR)
· Total quality management (TQM)
· Performance related pay (PRP)

Functions of HRM

HRM is a process that consists of four functions:
a. acquisition,
b. development
c. motivation,&
d. maintenance
of human resources

Acquisition Function:
The acquisition function begins with planning. This includes the estimation of demands and supplies of labour. Acquisition also includes the recruitment, selection, and socialization of employees.

Development Function
The development function has three dimensions:
Employee training which emphasizes skills development and changing of attitudes among workers.
Management development, which concerns itself primarily with knowledge acquisition and the enhancement of an executive’s conceptual abilities.
Career Development, which is the continual effort to match long-term individual and organizational needs.

Motivation Function
The motivation function begins with the recognition that individuals are unique and that motivation techniques must reflect the needs of each individual. Within the motivation function,
· Alienation
· Job Satisfaction
· Performance Appraisal
· Behavioral and structural techniques for stimulating worker performance
· The importance of linking rewards to performance
· Compensation and benefits administration,&
· Methods to handle problem
are reviewed.

Maintenance Function
The maintenance function is concerned with providing those working conditions that employees believe are necessary in order to maintain their commitment to the organization.

Qualities of Human Resource Manager and his role in industry

David Ulrich suggests four key HRM competencies:

1. Knowledge of the Business. Human resources professionals must understand how their business or agency operates. This includes the organization’s strategy, how the organization makes money or achieves its primary purpose, its technological processes and organizational capabilities, etc. Therefore, HR professionals should develop their knowledge of such areas as finance, marketing, operations, and general management. Expertise in these areas helps human resources professionals create value by enabling
them to link their actions more effectively to the organization’s strategy.
2. Knowledge of “Best Practices” in HR (HR Delivery). Human resources professionals must continue to develop expertise in their field, knowing the best practices and “state of the art” in staffing, development, reward systems, performance management, and related HR functions. This is the area in which human resources has excelled traditionally and must continue to deliver excellence.
3. Change Management Skills. The rapidly changing environment requires organizations to be adaptable and transform themselves internally to meet new challenges and needs. Since change involves winning the hearts and minds of people, HR professionals must have the skills to help line managers achieve this transformation. Change management requires skills in problem solving, innovation, process improvement, influence, consultation, communication, and leadership. This is a relatively new requirement for human resources and one which demands increased attention.
4. Personal Credibility. Finally, HR professionals need to demonstrate behaviors that convey competence, integrity, accountability, confidentiality, and related ethical qualities to earn the trust and respect of line managers and employees. A record of quality and performance helps earn credibility, but so do the more personal attributes of character cited above.

In addition to the above mentioned qualities, HR manager must possess the following three competencies:
1. Knowledge:
•Personnel and Human Resources – Knowledge of principles and procedures for personnel recruitment, selection, training, compensation and benefits, labor relations
and negotiation, and personnel information systems.
•Administration and Management – Knowledge of business and management principles involved in strategic planning, resource allocation, human resources
modeling, leadership technique, production methods, and coordination of people and resources.
•Mathematics – Knowledge of arithmetic, algebra, geometry, calculus, statistics, and their applications.

2. Skill:
•Management of Personnel Resources – Motivating, developing, and directing people as they work, identifying the best people for the job.
•Writing – Communicating effectively in writing as appropriate for the needs of the audience.
•Speaking – Talking to others to convey information effectively.


3. Ability:
•Written Comprehension – The ability to read and understand information and ideas presented in writing.
•Oral Comprehension – The ability to listen to and understand information and ideas presented through spoken words and sentences.
•Oral Expression – The ability to communicate information and ideas in speaking so others will understand.

Human resource management (HRM) is the management function that is concerned with getting, training, motivating, and keeping competent employees. While some large organizations have Human Resources Departments, not only small-business managers but also many managers who work for large companies must make human resource decisions: recruiting candidates, reviewing application forms, interviewing applicants, inducting new employees, appraising employee performance, and providing training.
To hire competent, high-performing employees who can sustain their performance over the long-term, an organization should follow an eight-step human resource management process (see the above slide). The first three steps represent employment planning, adding staff through recruitment and reducing staff by downsizing, and selecting competent employees. These new employees must be adapted to the organization (orientation) and their job skills must be kept current (training and development). The last steps in the HRM process are performance appraisals, compensation and benefits, and safety and health. These elements are used to identify employment goals, correct performance problems, and promote sustained high-level performance.
Human Resource Planning follows three steps: (1) assessing current human resources, (2) assessing future human resource needs, (3) developing a program to meet future human resource needs.
Management should begin by generating a human resource inventory to assess what talents and skills are currently available in the organization. The next step is a job analysis to define the jobs within the organization and on-the-job behaviors that will promote success. Information gathered during job analysis allows management to compose the following: a written job description that states what a jobholder must do, plus how and why it is done; a job specification that states the minimum knowledge, skills, and abilities that a worker must possess to perform the job successfully. These documents can assist managers to recruit and select appropriate new hires.
Depending on the organization’s objectives and strategies, demand for human resources is contingent upon demand for the organization’s products or services and on the levels of productivity. After estimating total revenue, management can estimate the number and kinds of human resources needed to obtain those revenues.
After it has assessed current capabilities and future needs, management can estimate future human resources shortages and over-staffing. Then, it can develop a program to match these estimates with forecasts of future labor supply.
Recruitment is the process of locating, identifying, and attracting capable employees. Many companies are finding new employees on the World Wide Web. The source that is used should reflect the local labor market, the type or level of position, and the size of the organization.
Are certain recruiting sources better than others? Employee referrals can produce the best applicants for two reasons. First, current employees screen applicants before referring them. Second, current employees believe that their reputations with the firm will be reflected in the candidates that they recommend; so, they reflect only those who they believe will not make them look bad. Employee referrals, however, may not generate the diversity of applicants required by EEOC laws.
In the past decade, most large U.S. businesses, as well as many government agencies and small businesses, have been forced to shrink the size of their workforce or restructure their skill composition. Downsizing has become a relevant means of meeting the demands of a dynamic environment. The figure above presents the following major downsizing options:
Firing is permanent involuntary termination.
Layoffs are temporary involuntary termination.
Attrition is not filling openings creating by voluntary resignations or retirement.
Transfers involve moving employees either laterally or downward.
Reduced workweeks require employees to work fewer hours per week, share jobs, or work part time.
Early retirements provide incentives to more senior employees for retiring before their normal retirement date.
Job sharing means that employees share one full-time position.
Once the recruiting effort has developed a pool of candidates, the next step in the employment process is to identify who is “best” qualified for the job. Given performance criteria chosen by management, selection seeks to predict which applicants will be successful if hired. In essence, then, the selection process is a prediction exercise.
Any selection decision can result in four possible outcomes: two correct decisions and two errors. Problems occur when managers either reject candidates who would have performed successfully on-the-job (reject errors) or accept those who perform poorly (accept errors). Therefore, effective selection activity reduces the probability of making accept or reject errors and increases the probability of making correct decisions.
When a selection device measures the same thing consistently, it exhibits reliability. To be effective predictors, selection devices must possess and acceptable level of consistency.
If a selection device contains a proven relationship between the selection device and some relevant criterion it demonstrates validity. The burden is on management to verify that any selection device it uses to differentiate applicants is related to job performance.