1.0. Nature and scope of HRM
In a simple sense, human resources management means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirements with a view to contributing to the goals of the organization, individual and the society
People in any organization manifest themselves, not only through individual sections but also through group interactions. When individuals come to their workplace, they come with not only technical skills, knowledge etc. but also with their personal feelings, motives, attitude, talent-job fit, values etc. Therefore, employee management in an organization does mean management of not only technical skills but also other factors of the human resources: The scope of human resources management in the modern days is vast. In fact, the scope of HRM was limited to employment and maintenance of and payment of wage and salary. The scope gradually enlarged to providing welfare facilities, motivation, performance appraisal, human resources management, maintenance of human relations, strategic human resources and the like. The scope has been continuously enlarging. The scope of Human Resources Management includes: o Objectives of HRM o Organization of HRM o Strategic HRM o Employment o Development o Wage and salary administration/compensation o Maintenance o Motivation o Industrial relations o Participative management and o Recent developments in HRM.
1.1. The function of HRM in contributing to organizational performance:
The functions of HRM can be broadly classified into two categories, a. Managerial functions and b. Operative functions. Managerial Functions Managerial functions of personnel management involve;
o Planning o Organizing o Directing o Controlling
Operative Functions The operative functions of human resources management are related to specific activities of personnel management, such as; A. Employment Employment is concerned with securing and employing the people possessing the required kind and level of human resources necessary to achieve the organizational objectives It covers functions such as o Job analysis o Human resources planning o Recruitment, o Selection, o Placement o Induction and o Internal mobility.
B. Human Resources Development: It is the process of improving, molding and changing the skills, knowledge, creative ability, aptitude, attitude, values, commitment etc., based on present and future job and organizational requirements. This function includes: o Performance Appraisal o Training o Management Development o Career Planning and Development o Internal Mobility
o Transfer o Promotion o Demotion o Retention and Retrenchment Management o Change and Organization Development
C. Compensation It is the process of providing adequate, equitable and fair remuneration to the employees. It includes: o Job evaluation o Wage and salary administration o Incentives o Bonus o Fringe benefits o Social security measures etc.
D. Human Relations It is the process of interaction among human beings. Human relations is an area of management in integrating people into work situations in a way that motivates them to work together productively, cooperatively.
E. Industrial Relations: The terms ‘industrial relations’ refer to the study of relations among employees, employers, government and trade unions.
F. Recent Trends in HRM: Human Resources Management has been advancing at a fast rate. The recent trends in HRM include: o Quality of work life o Total quality in human resources o HR accounting, audit and research and o Recent techniques of HRM
1.2. Distinguish between human resource management and personnel management: Human resource is considered as the backbone of any organization.
Personnel Management is different from Human Resources Management. Personnel means persons employed. Hence, personnel management views the man as the economic man who works for money or salary. Human resources management treats the people as human beings having economic, social and psychological needs. Thus, HRM is broader in scope compared to personnel management. We can distinguish between human resource management and personnel management as follows:
Personnel management is a traditional approach to managing people in the organization. Human resource management is a modern approach to managing peoples and their strengths in the organization.
Personnel management focuses on personnel administration, employee welfare, and labor relation. Human resource management focuses on acquisition, development, motivation, and maintenance of human resources in the organization.
Personnel management assumes people as an input for achieving the desired output. Human resource management assumes people as an important and valuable resource for achieving the desired output.
Under personnel management, personnel function is undertaken for employee’s satisfaction on the other hand under human resource management, administrative function is undertaken for goal achievement.
Under personnel management, job design is done on the basis of the division of labor but under human resource management, job design function is done on the basis of group work/teamwork.
In personnel management, employees are provided with less training and development opportunities but in HRM employees are provided with more training and development opportunities.
In personnel management, decisions are made by the top management as per the rules and regulation of the organization. In human resource
management, decisions are made collectively after considering employee’s participation, authority, decentralization, competitive environment etc.
Personnel management focuses on increased production and satisfied employees, on the other hand, human resource management focuses on effectiveness, culture, productivity and employee’s participation.
Personnel management is concerned with the personnel manager but human resource management is concerned with all level of managers from top to bottom.
Personnel management is a routine function but Human resource management is a strategic function
1.3. Evaluate the roles and responsibilities of line managers in human resource management: The roles and responsibilities of line managers in any organization are very important to achieve the ultimate goals of any organization. Since the key functions are supervised by the line managers so line managers should be very sincere, dutiful, knowledgeable and honest. Based on the culture of the line managers in human resource management, there is a strong relationship between the line managers and subordinates. This relationship helps the employees take line managers as their own organization. Some important roles of a line manager are;
Planning and Organizing: The line manager is responsible for planning the aims, objectives, and priorities of their work area in an organization according to the level of responsibility and the grade of the people within the organization.
Managing Resources: A line manager is responsible for deploying the resources within their control (people’s time; money; etc) to achieve organization plans.
The Conscience Role:
The conscience role is that of a humanitarian who reminds the management of its morals and obligations to its employees.
The counselor: Employees who are dissatisfied with the present job approach the HR manager for counseling. In addition, employees facing various problems like marital, health, children education/marriage, mental, physical and career also approach the HR managers. The HR Manager counsels and consults the employees and offers suggestions to solve/overcome the problems.
The Mediator: As a mediator, the HR manager plays the role of a peace-maker. He settles the disputes between employees and the management. He acts as a liaison and communication link between both of them.
The Spokesman: He is a frequent spokesman for or representative of the company. The Problem-solver: He acts as a problem solver with respect to the issues that involve human resources management and overall long-range organizational planning.
The Change Agent: He acts as a change agent and introduces changes in various existing programs.
2.0. The pivotal area of HRM in a range of organizational contexts:
Human resource management plays the most crucial role in the management of an organization. HRM plays a crucial role in the conversion process of inputs into outputs. Product design, quality maintenance, rendering services etc., depend upon the efficiency of human resources. The human resource also plays a significant role in managing finances and managing information systems.
The main objectives of HRM may be as follows:
o To create and utilize an able and motivated workforce to accomplish the basic organizational goals.
o To establish and maintain sound organizational structure and desirable working relationships among
o All the members of the organization.
o To secure the integration of individual and groups within the organization by coordination of the individual and group:
o To create facilities and opportunities for individual or group development so as to match it with the growth of the organization.
o To attain an effective utilization of human resources in the achievement of organizational goals.
o To identify and satisfy individual and group needs by providing adequate and equitable wages, incentives, employee benefits and social security and measures for challenging work, prestige, recognition, security, status etc.
2.1. Evaluate the importance of HR planning in an organization:
Human resource planning can be defined in various ways. For example, it has been explained thus: ”estimating the future supply of and demand for human capital and then figuring out how to close the gaps. Such planning allows companies to think through their workforce alternatives to the high fixed costs of full-time employees”. More broadly, it is a continuing process of analyzing an organization’s human resources needs under changing conditions to ensure that the right numbers of people with the right skills, and at the right costs are available at the right time for the organization. More narrowly, it may simply be described as the complex science (or art) of matching labor demand with labor supply. These definitions suggest that staffing plans should derive from, and be consistent with, both short-term and long-term goals and objectives of the organization, and should, in turn,
inform human resource management functions, such as job design, recruitment and selection, human resource development and performance management. Ideally, human resource planning focuses on both the strategic (and long-term) and operational (short-term) perspectives. The long-term covers up to five years and short-term less than one year, depending on the nature of the organization.
The complexity of human resource planning techniques will vary with organizational size and the dynamic nature of the organization or its industrial environment, and the perception and status of the human resource function.
2.2. The stages involved in planning HR requirements:
The most important stages those are involved in HR planning can be described as flowing:
Determined goals of the organization:
This is the first step of HRP because HR planning must be derived from organizational goals or objective.
Assessment of Present Human Resources:
This step begins with developing a profile of current employees in an organization.
The main motive of this stage generates an effective and details about the current number of employees, their capacity, performance, and potentiality etc.
Forecasting Human Resource (demand and supply):
The human resources required at different positions according to their job profile are to be estimated from internal and external sources to fulfill those requirements. There should be a proper matching of a job description and job specification of one particular work, and the profile of the person should be suitable for it.
Implementing the Action Plan:
In these steps, the HR plan should be converted into action. Implementation of HR plan means the recruitment, selection, placement, performance appraisal, career development, promotion, transfer, layoff, retirement, training and development, motivation and compensation etc
Evaluation, Control, and Feedback:
In this stage, we need to measure progress in order to control and evaluate to identify if the changes in the HR plans are made necessary because of changed conditions or because some of the original planning assumptions have gone wrong.
2.3. The effectiveness of the recruitment and selection techniques.
An organization´s most important asset is their workforce, to developing a strong and capable workforce requires a proper recruitment and selection process/technique that identifies strong candidates both inside and outside the organization.
It is rather the first stage towards appointment. Recruitment is the process of:
o Identifying the prospective employees, o Stimulating them, and o Encouraging them to apply for a particular job or jobs in an Organization.
The recruitment process involves: o Advertising among the “sources of suitable persons”, o Giving information about the organization for the organization and the job vacancies, o Providing information regarding the selection process, and o Mentioning the address at which applications are to be sent (and the medium of sending) o And the last date by which applications should be received by the organization.
The basic purpose of ‘recruitment’ is to have applications from sufficient numbers of qualified persons who are inclined to join the organization.
Selection: This is the stage of examining the applications to identify suitable candidates and to make the selection of best-suited persons for the organization. It generally involves following stages: o Examining all applications to identify candidates meeting all the conditions mentioned in the o job advertisement; o Rejecting the applications of candidates not meeting the requirements; o Based on the number of vacancies for job, deciding the candidates who should be called/invited for Interviews; o Arranging for the interviews in terms of (i) deciding place and time of interviews, (ii) deciding names of the Specialists who may interview the candidates, (iii) seek approval from the specialists to know who will be actually coming for interviewing the candidates, (iv) arrange for the room where the invited candidates may be seated to wait for their turn for the Interview. 3.1. The effectiveness of reward management strategies:
A proper rewards approach drives desired behaviors in an organization´s workforce that ensure the organization’s success. To develop an effective total rewards strategy for an organization the following process is essential:
Analyze the business environment and understand the external factors: The business environment should be scanned for economic and legislative factors, among others, that could influence the reward positioning of the organization. The specific analysis that should be performed includes the following: o A thorough understanding of the organization. o Identifying key stakeholders involved in the organization and conducting a needs analysis to understand their priorities, preferences, and needs.
o Understanding the quantitative and qualitative skill requirements of the organization to fulfill its business objectives and the demand and supply factors that play a role in attracting and retaining these skills.
Draft a reward strategy document: The human resource function should develop and maintain the reward policies and ensure that they comply with legislation, support the organization’s strategy and culture and align with the reward philosophy. The strategy itself must provide the organization with directives and should include the following elements:
o Reward strategy objectives: Reward objectives normally relate to the attraction, retention, motivation, and engagement of employees.
o The reward philosophy: What are the reward principles that should underpin the reward framework and that will guide the development of the various reward practices and reward decisions? o The optimal mix of total reward elements: To be optimal, the mix of reward elements is contained in the rewards framework, constructed in terms of the reward model that takes into account the organization’s objectives and is aligned with them.
Elements of the total rewards model must be considered: (a) Remuneration Remuneration consists of both fixed and variable remuneration to promote attracting and retaining talent without promoting undesirable remuneration gaps.
(b) Benefits: Benefits should be cost effective and cost efficient and to enhance the standard of living of the recipient. (c) Work-life balance The organization should draft a specific statement setting out its position with regard to work-life balance and the working environment.
(d) Performance and recognition: Performance and recognition programs should be both monetary and non-monetary and should be cost-effective. The organization should draft a detailed statement of how it intends to provide recognition for performance, recognizing the complexity and sensitivity of this issue.
(e) Development and career development: Development and career opportunities should develop talent and skills and grow the leadership potential of future leaders.
3.2. Methods organizations use to monitor employee performance.
The methods on the basis the performance is measured and reported include the following aspects: o Punctuality in job performance o Attendance and Leaves o Being ‘Late on the Job’ (if any) and ‘waiting time’ involved o Quantity of work output o Quality of the work output o Completeness of work output o Timeliness of the results o Team-spirit (including cooperativeness, commitment to team goals, adhering to team norms, and work relations with team members etc); o Result achieved including achievement of targets set for his/her Job; o Financial aspects of his performance on the job (like efficiency in use of resources, avoiding wastages, saving the costs, enhancing profitability of the work-process of which he/she is a part of) o Pass-rates of being able to do the tasks on ‘first-time-right basis’; and o Contribution towards goals and objectives of the team/group and of the organization, etc
3.3. The process of job evaluation and other factor determining pay.
A proper job-analysis is essential for fixing the level of remuneration. The following types of job-related information constitute the “job evaluation determining pay; o Work activities o Interface with other jobs o Procedure to be followed in the job o Physical movements and allied demands of the job o Machines and equipment required to be operated o Educational qualification level essential for the job o Previous training & experience necessary for the job o Special skills required o Physical working conditions involved o Work schedule and o Importance of the job in the context of organizational business strategies.
4.0 Assess contemporary issues affecting strategic HRM
Human resources managers face a myriad challenge in today’s workforce. There are issues concerning the diverse workforce, legislation affecting the workplace and technology matters that rise to the top of the list of challenges. Human resources managers who encounter these challenges use their leadership skills and expertise to avert issues that might arise from these challenges HR professional can’t ignore these challenges rather they ought to be the line to design and execute innovative mechanisms of developing skills and competencies of human resources to prepare them to accept the emerging challenges.
4.1. Contemporary issues affecting strategic HRM Contemporary business environment brings new challenges affecting many aspects of management including one of its crucial facets of HRM. Most frequently mentioned challenges of modern HRM are globalization, economic and legal environment, and workforce diversity resulting from both of the globalization and demographic change, technological development, changes in educational background of employees and in their expectations regarding working
conditions. These factors, directly and indirectly, determine human resource management strategies and the possibility of their implementation.
4.2. Analyze contemporary issues affecting strategic HRM Workforce diversity: Now-a-day the lifestyles and the requirements are changing day by day. Employees want a balance between work life and family life. Some want to earn more money by working hard even by overtime, on the other hand, some employees are less willing to work for a long period of time, or on overtime or on weekend days.
The quality of work Life: Now employees and managers are more concerned about the quality of work life where they are performing every day.
Management system: A proper management system is the framework of processes and procedures used to ensure an organization´s required achievement and its objectives. An improper management system decreases customer satisfaction as services and productions and fails to deliver what they promise.
Organizational culture: It is an invisible but powerful force; it refers behavior of humans within an organization and the meaning that people attach to those behaviors. It is the collection of values, beliefs, assumptions, myths, norms, goals, mission, vision etc.
Leadership development: HR professionals are faced with being expected to provide the essential structures, processes, tools, and points of view to make the best selection and develop the future leaders of the organization.
Managing change: Change management represents a particular challenge for HRM.
New trends and changes have occurred in telecommunicating, outsourcing HRM practices, family medical leave, child care, spouse relocation assistance, pay for skills, benefit cost-sharing, union-management negotiations, testing, and many other HRM areas of interest.
Decentralized work-sites: Organizations use decentralized work sites because telecommunicating arrangements enable organizations to find and use qualified employees without having to relocate business facilities.
Environmental challenges: Environment is the sum total of conditions that surround us at a given point in time and space. It is comprised of the interacting systems of physical, biological and cultural elements which are interlinked both individually and collectively.
Social issues: In some companies, employees are represented by a labor union. Managing human resources in a union-management requires knowledge of specific laws, contract administration, and the collective bargaining process.
Innovations in technology: Technological innovations that can either benefit or hurt the business. Some technological innovations can increase the productivity and profit margins, if the organization cannot cope with the changes, then the performance will be decreased.
Economic and politics: The economic and political condition, both at home and abroad have a major impact on human resource management.
Different laws of the country: Every government has its own designed rules and regulation such as labor laws, women’s rights, rights of the disable persons, laws for tax administration, labor relations, etc, so this is a challenge for an organization.
Globalization: Global business environment can be defined as the societal and task environment of an organization which is influenced by the global forces. These global forces include the global labor market, economic, technological force, and global competition, legal and political forces etc. Other Challenges: The other challenges may include the following: o Changing demographics of the workforce o Layoffs and downsizing o Information and communication system o Increased use of social networking to distribute information to employees o Design a handsome compensation package for the employees. o Identify the appropriate source of recruiting and selecting employees. o Develop financial management and budgetary skills so that an organization can reduce the extra cost of managing the organization. o Assess and interpret costs or benefits of HRM issues like productivity, salaries, and benefits, recruitment, training, absenteeism, overseas relocation, layoffs etc. o The HR managers must be updated with the new technologies. Hence they must be adopted as and when required and employees should be motivated to adopt these.
4.3. The impact of the legal and regulatory framework on HRM
Most countries have their legislation and regulations that guide the termination of services of employees. Termination of employment results in an employee’s departure from the job. It may be voluntary on part of the employee called as resignation, or it may be a punishment at the instance of employers which is called as dismissal. Dismissal is generally due to a fault of the employee. The layoff is generally for the fault of the organization due to a bad time for the business.
1.0. Nature and scope of HRM