Human Resource Management

This presentation includes:

Introduction
Concept

to HRM & HRD

of HRM Objectives Process HRM vs. Personnel Management HRM vs. HRD Objectives of HRD Focus on HRD System Structure of HRD Role of HRD manpower

This presentation includes:

HRM
Role

Policies & Strategies

Introduction

of HR in strategic management HR Policies & Procedures HR Programme Developing HR policies and strategies Strategic Control Types of Strategic Control Operational Control System Functional & Grand Strategies Strategy Factors

Fundamentals of Human Resource Management

Human Resource Management

A process

of bringing people and organisation together so that the goals of each one is met, effectively and efficiently.

Why is human resource important?

126

Can help in transforming lifeless factors of production into useful products

They can help an org. achieve results quickly efficiently and effectively

They are capable of enlargement i.e. are capable of producing an output that is greater than the 2007 Prentice Hall, Inc. All rights reserved. sum of inputs

Why is HRM Important to an Organization?

The

role of human resource managers has changed. HRM jobs today require a new level of sophistication.
Employment

employers. Jobs have become more technical and skilled. Traditional job boundaries have become blurred with the advent of such things as project teams and telecommuting. Global competition has increased demands for productivity.

legislation has placed new requirements on

Why is HRM Important to an Organization?

The

Strategic Nature HRM must be

a strategic business partner and represent employees. forward-thinking, support the business strategy, and assist the organization in maintaining competitive advantage. concerned with the total cost of its function and for determining value added to the organization.

Why is HRM Important to an Organization?

HRM

is the part of the organization concerned with the people dimension. HRM is both a staff, or support function that assists line employees, and a function of every managers job. HRM Certification

Colleges and universities offer HR programs.

1210

Importance of Effective Human Resource Management in Business

What is Human Resource? Differences from other resources - Human resources have intellect and emotion - Human resources can be developed through development and training
2007 Prentice Hall, Inc. All rights reserved.

Importance of Effective Human Resource Management in Business

What is Human Resource? Human Resource Management handles i) Employment, ii) Relations among Departments, iii) Promotion and Career Path, iv) Salary, v) Job Evaluation and Standards, vi) Performance Measurement, vii) Training, viii) Selection of Human Resources, ix) Dismissal, and, x) Job Description
2007 Prentice Hall, Inc. All rights reserved.

1211

Why is HRM Important to an Organization?

Four basic functions: Staffing Training and Development Motivation Maintenance

How External Influences Affect HRM

Strategic

Environment Governmental Legislation Labor Unions Management Thought

How External Influences Affect HRM

HRM

Strategic Environment includes:

Globalization Technology Work

force diversity Changing skill requirements Continuous improvement Work process engineering Decentralized work sites Teams Employee involvement Ethics

How External Influences Affect HRM

Governmental

Legislation

Laws supporting employer and employee actions

Labor

Unions

Act on behalf of their members by negotiating contracts with management Exist to assist workers Constrain managers Affect non unionized workforce

How External Influences Affect HRM

Management

Thought

Management principles, such as those from scientific management or based on the Hawthorne studies influence the practice of HRM. More recently, continuous improvement programs have had a significant influence on HRM activities.

Staffing Function Activities

Employment

planning

ensures that staffing will contribute to the organizations mission and strategy

Job

analysis

determining the specific skills, knowledge and abilities needed to be successful in a particular job defining the essential functions of the job

Staffing Function Activities

Recruitment
the

process of attracting a pool of qualified applicants that is representative of all groups in the labor market

Selection
the

process of assessing who will be successful on the job, the communication of information to assist job candidates in their decision to accept an offer

Goals of the Training and Development Function

Activities

in HRM concerned with assisting employees to develop up-to-date skills, knowledge, and abilities Orientation and socialization help employees to adapt Four phases of training and development
Employee

training Employee development Organization development Career development

The Motivation Function

Activities

in HRM concerned with helping employees exert at high energy levels. Implications are:
Individual Managerial Organizational

The Motivation Function

Managing

motivation includes:

Job design Setting performance standards Establishing effective compensation and benefits programs Understanding motivational theories

The Motivation Function

Classic

Motivation Theories

Hierarchy of Needs Maslow Theory X Theory Y McGregor Motivation Hygiene Herzberg Achievement, Affiliation, and Power Motives McClelland Equity Theory Adams Expectancy Theory - Vroom

How Important is the Maintenance Function?

Activities
Health Safety Communications Employee

in HRM concerned with maintaining employees commitment and loyalty to the organization.

assistance programs

Effective

communications programs provide for 2-way communication to ensure that employees are well informed and that their voices are heard.

Translating HRM Functions into Practice Four Functions:

Employment Training and development Compensation/benefits Employee relations

HRM in a Global Village

HRM

functions are more complex when employees are located around the world. Consideration must be given to such things as foreign language training, relocation and orientation processes, etc. HRM also involves considering the needs of employees families when they are sent overseas.

HR and Corporate Ethics

HRM

must:

Make sure employees know about corporate ethics policies Train employees and supervisors on how to act ethically

History of Personnel/Human Resource Management (P/HRM)

The field of P/HRM as it currently exists, represents a crystallization of a variety of historical and contemporary factors : The industrial revolution : During this period machines were brought in. Technology made rapid progress. Jobs were more fragmented where the worker did only a small portion of the total job. Efficiency but left workers with dull. Boring and monotonous jobs. Workers were treated like glorified machine tools. Employer were keen to meet production targets rather than satisfy workers demands.

7. 2.

Government did very little to protect the interests of workers. Scientific Management : To improve efficiency and speed F. W. Taylor advocated scientific management. Scientific management is nothing but a systematic analysis and breakdown of work into its smallest mechanical elements and rearranging them into their most efficient combination. In addition to the scientific study of the task itself, Taylor argued that individuals selected to perform the tasks should be as perfectly matched, physically and mentally, to the requirement of the task as possible and that overqualified individuals should be excluded. Employees should also be trained carefully by supervisors to ensure that they performed the task exactly specified by prior scientific analysis. A differential piece rate system was also advocated by Taylor to provide an incentive for employees to follow the detailed procedures specified by supervisors.

3.

4.

Trade unionism : Workers joined hands to protect against the exploitative tendencies of employers and the prohibitive, unfair labour practices through unions. Unions tried to improve the lot of workers through collective bargaining , resolving the grievances of workers relating to working conditions, pay and benefits, disciplinary actions, etc. Human relation movement : The famous Hawthorns experiments conducted by Elton Mayo and his Harvard colleagues during 1930s and 1940s demonstrated employee were rewarded economically, but by certain social and psychological factors as well. The human relations movement led to the wide scale implementation of behavioral science techniques in industry for the first time which included supervisory training programmers, emphasizing support and concern of workers, programmes to strengthen the bonds between labour and management and counselling programmes whereby employees were encouraged to discuss

both work and personal problems with trained counselors. The movement was also influenced by the growing strength of unions during the late 1930s and 1940s. The rise of unionism during this period was due to the passage of the Wagner Act. Which gave workers the legal right to bargain collectively with employers over matters concerning wages, job security, benefits and many other conditions of work. 5. Human resources approach : However, during early 60s the pet milk theory, (advocating that happy workers are productive workers or happy cows give more milk) of human religionists had been largely rejected. Recognising the fact that workers are unique in their own way having individual needs. It was recognized that each employee is a unique and highly complex individual with different wants, needs and values. What motivates one employee may not motivate another and being happy or feeling good may have little or no impact on the productivity certain employees.

Slowly but steadily, the trend towards treating employees as resources or assets emerged.

Evolution of the Concept of HRM

The early part of the century saw a concern for improved efficiency through careful design of work. During the middle part of the century emphasis shifted to the availability of managerial personnel and employee productivity. Recent decades have focused on the demand for technical personnel, responses to new legislation and governmental regulations, increased concern for the quality of working life, total quality management and a renewed emphasis on productivity. Growth in India 5 Early phase : Though it is said that P/HRM a discipline is of recent growth, it has had its origin dating back to 1800 B. C. for example : the minimum wages rate and incentive wage plans were included in the Babylonian Code of Hammurabi around

1800 B. C. The Chinese, as early as 1650 B. C. had originated the principle of division of labour and they understood labour turnover even in 400 B. C., Kautilya, in India (in his book Arthashastra) made reference to various concepts like job analysis, selection procedures, executive development, incentive system and performance appraisal. Legal Phase : The early roots of HRM in India could be traced back to the period after 1920. The Royal Commission on labour in 1931 suggested the appointment of labour officer to protect workers interests factories employing 500 or more workers.

Welfare phase : During the 1960s the scope of personnel function has expanded a bit, covering labour welfare, participative management, industrial harmony, etc. In this period, the human relations movement of the West had also had its impact on Indian organisation. The legalistic preoccupations slowly gave way to harmonious industrial relations and good HR practices. Development Phase : In 1960 and 70s the HR professionals focused more on developmental aspects of human resources. The emphasis was on striking a harmonious balance between employee demands and organisational requirements. HRD has come to occupy a centre stage and a focal point of discussion in seminars, conference and academic meets. The two professional bodies. IIPM and NILM, were merged to form the National Institute of Personnel Management (NIPM) at Kolkatta.

During the 1990s organizational restructuring and cost cutting efforts have stared in a big way-thanks to the pressures of liberalization, privatization and globalisation (LPG era) forcing companies to focus attention on employee capabilities, product/service quality, speedy response, customer satisfaction etc. Changing demographics and increasing shortages of workers with the requisite knowledge, skills and ability have grown in importance demographics and increasing shortages of workers with the requisite knowledge, skills and ability have grown in importance.

Difference b/w HRM & PM

Basis of difference HRM Outlook Big part, includes PM. A part of HRM

PM

Meaning

HRM is management of employees qualities skills, attitude and personality skills It develops as per their aspirations and individual goals and motivate them to help in achieving goals.

Management of people

Philosophy

Concerned with procurement and development of personnel for attainment of organisational goals. It had a narrow view about the man as economic person with unlimited wants It is done by the personnel managers who is supposed to know rules and regulations of personnel practices and he advices top management on personnel policies It manages and control s the cost of personnel in the organisation Employees are like m/c and tools which can be used, purchased and erased Employees are taken only for the achievement of organisational goals.

Views

HRM views man as socio-economic psycho-physical person with motivators and dissatisfies A part of every line function. The primary job of every manager is activating and HRM cannot be isolated from activating

Function

Cost Effect

It takes man as a profit centers. It understands that money expensed on employee is money invested It treats employees as resource. It develops and upgrades employee for better work. Employees work with organisation and achieve personal goals too.

Treatment with Employee Benefits

Evolution of HR Concept

Difference b/w HRD and HRM

HRD

HRM

1. HRD focuses on training and optimizing work performance. 2. HRD is more proactive; it copes with the changing needs of the people as well as anticipate these needs 3. HRD is sub-system of a large system, more organizational oriented 4. HRD is developing the whole organization . 5. HRD is continuous process . 6. HRD is involvement of the entire work force from top to bottom is more and a must in most of the cases

1. HRM focuses on whom you hire, whom you fire and remediation to employees who need discipline and retooling to continue their employment. 2. Mainly a reactive function responding to the demands which may rise. 3. HRM is function more independent with separate roles to play. 4. HRM is concerned with people only. 5. HRM is a routine and administrative function 6. HRM is basically the responsibilities of the HR department.

Human Resource Development

HRD

may be defined as to development of people by providing the right environment where each individual may grow to his fullest potentialities. Human resources are viewed as total knowledge, skills, creative abilities, talents and aptitude of an organization's work force as well as values, attitudes and beliefs if individuals involved. HRD involves

Ways to better adjust the individual to his job and environment The greatest involvement of an employee in various aspects of his work The greatest concern for enhancing the capabilities of the individual

Objectives of HRD
To

provide a comprehensive framework for the all round development of human resources in an organization for the full utilization of their talent and potential. To Develop capabilities of every individual working in the organization for their present and future job. To develop better inter-personal relationship in the organization such as employee-employer relations, customer-seller relations. To develop and secure team-sprit, team-creation system, inter-term relations, motivational levels To develop all round organizational health, culture and climate with the inputs of manpower obsolescence and technological changes To generate systematic information about human resource for the purpose of HR planning, HR audit, recruitment, promotion and work study

Traditional HR vs. Strategic HR

Basis Focus Role of HR Initiatives Time Horizon Control Job Design Traditional HR Employee Relations Transactional change follower and respondent Slow, reactive, fragmented Short Term Bureaucratic-Roles, Polices, Procedures Tight Division of Labour, Independence, Specialization Capital, Products Cost Centre Staff specialist Strategic HR Partnerships with internal & external customers Transformational change leader and initiator Fast, proactive and integrated Short, Medium and Long (as required) Organic-Flexible, Whatever necessary to succeed Board, Flexible, CrossTraining teams People, Knowledge Investment Centre Line Managers

Key Investment Accountability Responsibility of HR

Human Resource Planning and Job Analysis

Introduction
Human
it

resource planning is a process by which an organization ensures that

has the right number and kinds of people at the right place at the right time capable of effectively and efficiently completing those tasks that will help the organization to achieve its overall strategic objectives.

Introduction
Linked

to the organizations overall strategy and planning to compete domestically and globally. Overall plans and objectives must be translated into the number and types of workers needed. Senior HRM staff need to lead top management in planning for HRM issues.

An Organizational Framework

NATURE OF H.R.M

Pervasive process Action oriented Individually oriented People oriented Future oriented Development oriented Integrating mechanism Auxiliary service Interdisciplinary function Continuous function

Objectives of HRM
help the organisation reach its goals To employ the skills and abilities of the workforce efficiently To provide the organisation with well trained and well motivated employees To increase the fullest employees job satisfaction and selfactualisation : To develop and maintain a quality of work life To communicate HR Policies to all employees To be ethically and socially responsive to the needs of society
To

Importance of HRM 1. At the enterprise level

Good human resource practices can help in attracting and retaining the best, people in the organisation. Planning alerts the company to the types of people it will need in the short, medium and long run. It helps in training people for challenging roles, developing right attitudes towards the job and the company, promoting team spirit among employees and developing and commitment through appropriate reward schemes.

2. At the individual level

It promotes team work and team spirit among employees. It offers excellent growth opportunities spirit among employees. It allows people to work with diligence and commitment.

3. At the society level : Society, as a whole, is the major

beneficiary of good human resource practices. Employment opportunities Scarce talents are put to best use. Companies that pay and treat well always race ahead of others and deliver excellent results.

4. At the national level

Effective use of human resources helps in exploitation of natural, physical and financial resources in a better way. People with right skills. Proper attitudes and appropriate values help the nation to get ahead compete with the best in the world leading to better standard of living and better employment.

 It

lies in developing people and providing appropriate environment for effective utilization of their capabilities. This can be done by :

Professional Significance

 HRM

is of vital importance to individual organizations as means for achieving their objectives. It contributes to the achievement of organizational objectives in the following way:

Organizational Significance

 Social

significance of HRM is welfare of society . Social significance of HRM is achieved by:

Social Significance

HRM as a Central Subsystem in an Enterprise

Product Subsystem

Finance Subsystem

HR subsystem Procurement Training Compensation Appraisal Rewards

Marketing Subsystem

Technical Subsystem

Problems in acquiring human power in India

Remedies to avoid the problem

Definitions of HRM:

Acc to Flippopersonnel mgmt or Hrm is the planning, Organising, directing,and controlling of the procurement,development,compensation,integration, maintenance and separation of human resources to the end that individual, organisational and social objectives are accomplished. Acc to Decenzo and Robbinshrm is concerned with the people dimension in management ,since every org is made up of people, acquiring their services, developing their skills, motivating them to higher levels of performance and ensuring that they continue to maintain their commitment to the organisation are essential to achieving organisational objectives this is true regardless of the type of organisation govt, business,education,health,recreation,or social action. Acc to NIPM hrm is that part of the management which is concerned with the people at work and with their relationship within the enterprise, its aim is to bring together and develop into an effective organisation of the men and women who make up an enterprise and having regard for the well being of the individuals and of working groups ,to enable them to make their best contribution to its success

Personnel / Human Resource Management Functions

Managerial Functions Planning Organising Directing Controlling

OPERATIVE FUNCTION
1.PROCUREMENT FUNCTION

Job analysis Human resource planning Recruitment Selection Placement Induction and orientation Internal mobility Transfer Promotion

Development

Training Executive development Career planning and development Human resource development Performance appraisal

3. Motivation and compensation

Job design Work scheduling Motivation Job evaluation Performance appraisal Compensation administration Bonus, Incentives and benefits Payroll

4. Maintenance (it is concerned with protecting and promoting employees while at work) Health Employee welfare Social security measures Welfare schemes Personnel records Personnel audit Personnel research

5. Integration function Grievance redressal Conflict management Discipline Teams and team work Collective bargaining Employee participation and empowerment Trade unions and employees association Industrial relations Participation of employees

6.Emerging issues : Personnel records Human resource audit Human resources research Human resources accountings (HRA) Human resource information system Stress and counseling International human management

Model of Strategic HR Management

Outcomes Increased Performance Customer Satisfaction Employee Satisfaction

Enhanced Share Holder Value

HR Value Chain

The Five Ps Model of SHRM

Philosophy

Statements of how organization values & treats employees; essentially culture of the organization Expressions of shared values & guidelines for action on employee-related business issues Coordinated & strategized approaches to initiate, disseminate, & sustain strategic organizational change efforts necessitated by strategic business needs

Policies

Programs

The Five Ps Model of SHRM

Practices
HR

practices motivate behaviors that allow individuals to assume roles consistent with organizations strategic objectives

The Five Ps Model of SHRM

Processes
Continuum

of participation by all employees in specific activities to facilitate formulation & implementation of other activities

The Five Ps Model of SHRM

Successful

SHRM efforts begin with identification of strategic needs Employee participation is critical to linking strategy & HR practices Strategic HR depends on systematic & analytical mindset Corporate HR departments can have impact on organizations efforts to launch strategic initiatives

Personnel Policies, Procedures and Programme

POLICY:- is a plan of action
Policy Acc to Flippo is a man made rule of predetermined course of action that is established to guide the performance of work towards organisational objectives.it is a type of standing plan that serves to guide the subordinates in the execution of their tasks. Policies are statements of the organisations overall purposes and its objectives in the various areas wit which its operations are concerned personnel, finance, production, marketing and so on. Management policies are developed by working org. to keep them on course headed and directed towards their org. objectives these define the intentions of the org and serve as guidelines to give consistency and continuity to total operations .

Definition of Personal Policy

Personnel policies guide action. They offer the general standards or parameters based on which decisions are reached. They serve as a road map for managers on a number of issues such as recruitment (the job for physically challenged only), selection (Selection based on merit only), promotion (performance leads to promotion) and compensation. personnel policies constitute guides to action they furnish the general standards or bases on which decisions are reached .their genesis lies in an organisations values, philosophy, concepts and principles.

After the establishment of objectives of personal management, personal policies are to be formulated . Personnel policies refer to the principles and rules of conduct which formulate ,redefine, break into details and decide the number of actions that govern the relationship with employees in the attainment of organisational objectives. Personnel policies are : 1. The key stone in the arch of management and the life blood for the successful functioning of the personnel management because without these policies there cannot be any lasting improvements in the labour management relations. 2. The statements of intention indicating an agreement to a general course of action ,indicating specifically what the organisation proposes to do and thus suggests the values and viewpoints which dominate the organisations action. 3. A positive declaration and a command to an organisation .They translate the goals of an organisation into selected routes and provide general guidelines that prescribe and proscribe programmes which in turn dictate

Test of policy According to Dale Yoder, the following tests can be applied to judge whether a policy is good or otherwise : (a) Is it stated clearly ? (b) Is it consistent with public policy ? (c) Is it uniform throughout the organisation ? (d) Is it having high level of acceptability among the members of the organisation ? (e) Is it having a sound base in appropriate theory ? For example, wages be paid on piece-rate basis. (f) Is it having a sound base in appropriate theory ? For Example, wages may be paid on piece rate basis. (g) The positive answers to the above will mean that the personnel policy is good.

Important of an effective personal policy can be broadly outlined as :

(i) It is generally derived from the personnel objectives of an organisation. (ii) It summaries past experience in the form of useful guidelines that help managers to speed-up the decision making process. It helps managers as well subordinates to dispose of repetitive problems in a consistent manner without getting into trouble. It serves as a standing plan that can be put to use repeatedly while solving problems of a recurring nature (iii) As a guide to executive thinking it permits managers to transfer some of the recurring problems to subordinates. In a way, a personal policy is an important management tool that facilitates some transfer of decision making to lower levels of organisation. (iv) It helps in achieving coordination of organisational members and help predict more accurately the actions and decisions of others

Types of Personal Policies

Advantage of Personnel Policies

Delegation Uniformity Better

control Standards of efficiency Confidence Speedy decisions Coordinating devices Facilitate decision making Confidence in employees. Consistency of Action Continuity and stability Promptness of action

Policies in various personnel areas

Personal policies must cover all areas of manpower management. Usually personnel policies are framed with regard to : Recruitment and Selection (Employment Policy) (i) Minimum qualification required in prospective employees. (ii) The sources from where labour supply could be tapped. (iii)Selection tests. Promotion and Transfer Policy (i) Relevance of seniority (ii) Relevance of merit. (iii)Bases of transfer

Personal policies must cover all areas of manpower management. Usually personnel policies are framed with regard to : Training Policy (i) Induction (ii) Type of training (iii) Training of executives and operative employees Compensation Policy (i) Minimum wages (ii) Non financial incentives. (iii) Incentive plans. (iv) Bonus, Profit-sharing, etc. (v) Employee Stock Option Plan (ESOP)

Employee Services Policy (i) Types of employee services (ii) Financing of employee services. (iii)Welfare measures (iv) Safety measures. Human Relations Policy (i) Handling of grievances. (ii) Recognition of labour unions. (iii)Workers participation in management (iv) Discipline and conflict rule (v) Suggestion system.

Obstacles in Administering Personnel Policies

The factors which obstruct the implementation of personnel policies are : Many times managers are reluctant /unenthusiastic to follow policy guidelines, for they restrict the scope of managerial work and curtail executive freedom. Often conflicts erupt/blow up between implied and expressed policy statements especially on employment matters. For example, a policy of promoting employees on the basis of merit only (expressed) may be sabotaged/interrupted by dishonest managers by promoting yes men (implied). Personnel policies demand constant revision, modification and restructuring. However, they are characterized by considerable inertia/inactive. Once established, they persist and become unalterable. In the absence of review and appraisal, it would be difficult to break the cycle and effect a desirable policy change.

Personnel policies are not easy to communicate. From the time policies are initiated to the time they are used, there is always the danger of falling into generalities and pleasantries.

In order to overcome these obstacles, it is necessary to understand the basics in policy formulation and revision. It would be pertinent to look into the essentials of a sound personnel policy at this stage.

Characteristics of a Sound Personnel Policy

While developing sound personnel policies, management should pay attention to the following : 1. 2. 3. 4. 5. 6. 7. Related to objectives Easy to understand Precise Stable as well as flexible Based on facts Just, fair and equitable Reasonable

PERSONNEL POLICIES
PUT THE

RIGHT MAN AT THE RIGHT PLACE TRAIN EVERYONE FOR THE JOB TO BE DONE MAKE THE ORGANISATION A COCORDINATED TEAM SUPPLY THE RIGHT TOOLS AND THE RIGHT CONDITIONS OF WORK GIVE SECURITY WITH OPPORTUNITY, INCENTIVE, RECOGNITION LOOK AHEAD,PLAN AHEAD FOR MORE AND BETER THINGS

Coverage of Personnel Policies

The coverage of Personal policies has been classified on the basis of functions of HRM by Michael Armstrong and is outlined as : 1. Social responsibility Equity : Treating employees fairly and justly by adopting an evenhanded approach. Consideration : Considering individual circumstances when decisions affect the employees prospects, seniority or self-respect. Quality of Work life : 2. Employment policies 3. Promotion policies 4. Development policies 5. Relations policies

Formulation of Personnel Policies

PROCEDURES AND PROGRAMMES

PROCEDURES

INDICATE HOW A POLICY IS CARRIED

OUT It spells out in detail the method, processes, movements and specific rules and regulations and indicates the steps, time place and personnel responsible for implementing it .it tells us that the where an action is to take and at what stage Procedures go further than policies in helping to clarify what is to be done in particular circumstances

The Importance of Human Resource Management (HRM)

As

a necessary part of the organizing function of management

Selecting,

training, and evaluating the work force

As

an important strategic tool

HRM

helps establish an organizations sustainable competitive advantage.

Adds

value to the firm

High

performance work practices lead to both high individual and high organizational performance.

Human Resource Management Process

ENVIRORNMENT OF HRM

INTERNAL ENVIRONMENT UNIONS ORGINSATIONAL CULTURE AND CONFLICT PROFESSIONAL BODIES-eg NIPM

EXTERNAL ENVIRORNMENT ECONOMIC-growth rate &strategy Ind. production National percapita income Money and capital mkts Competitions Ind labour Globlisation POLITICAL-impact of pol.system It includes: Legislature Executive Judiciary TECHNOLOGICAL DEMOGRAPHIC

Environmental Factors Affecting HRM

Employee Labor Unions Organizations that represent workers and seek to protect their interests through collective bargaining. Collective bargaining agreement A contractual agreement between a firm and a union elected to represent a bargaining unit of employees of the firm in bargaining for wage, hours, and working conditions. Governmental Laws and Regulations Limit managerial discretion in hiring, promoting, and discharging employees. Affirmative Action: the requirement that organizations take proactive steps to ensure the full participation of protected groups in its workforce.

Human

Managing Human Resources

Resource (HR) Planning
The process by which managers ensure that they have the right number and kinds of people in the right places, and at the right times, who are capable of effectively and efficiently performing their tasks. Helps avoid sudden talent shortages and surpluses. Steps in HR planning:
Assessing Assessing

current human resources future needs for human resources a program to meet those future needs

Developing

Linking Organizational Strategy to Human Resource Planning

Ensures

that people are available to meet the requirements set during strategic planning. Assessing current human resources A human resources inventory report summarizes information on current workers and their skills. Human Resource Information Systems HRIS are increasingly popular computerized databases that contain important information about employees.

Objectives of HRP

Human Resource Planning Model

FORECASTING FORECASTINGDEMAND DEMAND Technology Trend Technology Trendanalysis analysis Financial Financialresources resources Managerial Managerial estimates Organizational Organizationalgrowth growth estimates Delphi Mgmt. philosophy Delphitechnique technique Mgmt. philosophy HR HRinventories inventories Markov Markovanalysis analysis Skill Skillinventories inventories Replacement Replacementcharts charts Succession SuccessionPlanning Planning

Considerations Considerations

Techniques Techniques

BALANCING BALANCING SUPPLY SUPPLYAND AND DEMAND DEMAND

Full-time Full-time//Part-time Part-time

(Shortage) (Shortage) Recruitment Recruitment (Surplus) (Surplus) Reductions Reductions

Techniques Techniques

Wkforce Wkforcechanges changes Mobility Mobility Govt Govtpolicies policies Unemployment Unemployment

External External Considerations Considerations

Layoffs Layoffs Terminations Terminations Demotions Demotions Retirements Retirements

FORECASTING FORECASTINGSUPPLY SUPPLY

Quantitative Approach: Trend Analysis

Forecasting

labor demand based on an organizational index:

Select a business factor, e.g. sales, that best predicts human resources needs. Plot the business factor in relation to the number of employees to determine average labor productivity. Compute labor productivity for the past five years. Project human resources demand out to the target year(s).

Example of Trend Analysis of HR Demand

BUSINESS FACTOR
YEAR
(SALES IN 000)

LABOR PRODTY 8.34 10.02 11.12 11.12 12.52 12.52 12.52 12.52

HR DEMAND
(NO. OF EMPLOYEES)

(SALES/EMPLOYEE)

1999 Rs. 2,935 2000 Rs. 3,306 2001 Rs. 3,613 2002 Rs. 3,748 2003 Rs. 3,880 2004 Rs. 4,095 2005* Rs. 4,283 2006* Rs. 4,446

352 330 325 337 310 327 342 355

*Projected figures

Qualitative Approaches to Demand Forecasting

Management Forecasts

The opinions (judgments) of supervisors, department managers, experts, or others knowledgeable about the organizations future employment needs. A forecasting method based on the results of questionnaires sent to a panel of experts. Several rounds of questionnaires are sent out, and the anonymous responses are aggregated and shared with the group after each round. The experts are allowed to adjust their answers in subsequent rounds. Because multiple rounds of questions are asked and because each member of the panel is told what the group thinks as a whole, the Delphi Method seeks to reach the "correct" response through consensus. An attempt to decrease the subjectivity of forecasts by soliciting and summarizing the judgments of a preselected group of individuals. The final forecast represents a composite group judgment.

Delphi Technique

Forecasting Supply of Employees: Internal Labor Supply

Staffing

Tables Markov Analysis Skill Inventories Replacement Charts Succession Planning

Forecasting Internal Labor Supply

Staffing

Tables

It shows the number of employees in each job. It tries to classify employees on the basis of age, sex, position, category, experience, qualifications, skills etc. A study of table indicates whether current employees are properly utilized or not. Graphic representations of all organizational jobs, along with the numbers of employees currently occupying those jobs and future (monthly or yearly) employment requirements. A method for tracking the pattern of employee movements through various jobs. This technique uses historical rates of promotions, transfers and turnover to estimate future availabilities in the workforce. Based on past probabilities, one can estimate the number of employees who will be in various positions with the organization in the future

Markov Analysis

Hypothetical Markov Analysis for a Retail Company

Internal Supply Forecasting Tools

Skill

Inventories

Files of personnel education, experience, interests, skills, etc., that allow managers to quickly match job openings with employee backgrounds.

Replacement

Charts

Listings of current jobholders and persons who are potential replacements if an opening occurs. It shows the profile of job holders department-wise and offers a snapshot of who will replace whom if there is a job opening.

An Executive Replacement Chart

Linking Organizational Strategy to Human Resource Planning

Assessing

current human resources Aggregate Planning Anticipating the needs for groups of employees in specific, usually lower level jobs and the general skills employees will need to ensure sustained high performance. Succession planning
includes

the development of replacement charts portray middle-to-upper level management positions that may become vacant in the near future lists information about individuals who might qualify to fill the positions

Linking Organizational Strategy to Human Resource Planning

Determining

the Demand for Labor

A human resource inventory can be developed to project year-by-year estimates of future HRM needs for every significant job level and type. Forecasts must be made of the need for specific knowledge, skills and abilities.

Linking Organizational Strategy to Human Resource Planning

Predicting

new

the Future Labor Supply

A units supply of human resources comes from:

hires contingent workers transfers-in individuals returning from leaves

Predicting these can range from simple to complex.

Linking Organizational Strategy to Human Resource Planning

Predicting

the Future Labor Supply

Decreases in internal supply come about through:

Retirements Dismissals Transfers-out Lay-offs Voluntary

quits Sabbaticals Prolonged illnesses Deaths

Linking Organizational Strategy to Human Resource Planning

Where

Will We Find Workers

migration

into a community recent graduates individuals returning from military service increases in the number of unemployed and employed individuals seeking other opportunities, either part-time or full-time
The

potential labor supply can be expanded by formal or on-the-job training.

Linking Organizational Strategy to Human Resource Planning

Matching

Labor Demand and Supply Employment planning compares forecasts for demand and supply of workers. Special attention should be paid to current and future shortages and overstaffing. Recruitment or downsizing may be used to reduce supply and balance demand. Rightsizing involves linking staffing levels to organizational goals.

Linking Organizational Strategy to Human Resource Planning

Employment Planning and the Strategic Planning Process