HRM Unit 1 Notes

What is Human Resource?
HRM
Lecture-1
The term human resources means: people who are

resources for the organizations.
It implies that people have capabilities that drive
organizational performance (along with other resources
such as money, materials, and information).
What is Human Resource Management?

What is difference between Human Resource
and other resources?
Other resources are controlled by human resources

Human resources have intellect and emotion

Human resources can be developed through
development and training
Difference between Personnel Management and Human

Resource Management
Personnel management was treated as a routine activity meant to
hire new employees and to maintain records.
It viewed people as a tool, the behaviour of which could be
manipulated.
HRM views people as assets to be used for the benefit of
organization and employees.
It aims at policies that promote mutuality- mutual goals, mutual
respect, mutual rewards and mutual responsibilities.
Human resource (HR) management

refers to the practices and policies one needs to carry out to
deal with the personnel aspects of the management job
Human resource management (HRM) is the effective
management of people at work
The goal: make workers more satisfied and productive
When an organization is concerned about people, its total
philosophy, culture, and orientation reflect it
Every manager must be concerned with people, whether or
not there is a human resources department
Human Capital
The concept of
human resource
management implies
that employees are
resources of the
employer.
Human Capital an
organizations employees
described in terms of their:
training
experience
intelligence
relationships
insight
Human Capital Management

Human Capital
The knowledge, skills, and capabilities of individuals that
have economic value to an organization.

Valuable because capital:
is based on company-specific skills.
is gained through long-term experience.
can be expanded through development.
Competitive Advantage Through People

Viewing the work force as an asset, not an expense
The result:
Harder work, from increased involvement and
commitment
Smarter work, through enhanced skills and competence
High performance work systems
Organizations can achieve sustained competitive advantage

through people if they are able to meet the following criteria:
The resources must be of value
The resource must be rare
The resource must be difficult to imitate
The resources must be organized for synergy
Harvard economist Michael Porter looked at these questions from the

standpoint of national economic performance. Why do German engineers,
Swiss chocolatiers, and Japanese electronics manufacturers enjoy a
competitive advantage over the rest of the world?
Porters research contradicted conventional wisdom that industry leadership is
explainable by geographical advantages such as plentiful natural resources,
cheap labor, and abundant capital. He demonstrated that a nation does not
inherit but instead creates the most important factors of productionsuch as
skilled human resources or a scientific base. Countries develop their elite
industries.
How do you create a superior culture of people development? Michael Porter
discovered that world-class industries share three common traits: Competition,
challenges, and connectivity.
Each quality is transferable to your organization and can help you tap into your
most appreciable asset your people
Source: Pfeffer (1994, 1998)
1) Competition
Top global industries develop in countries with intense domestic competition. For
example, in Italys leather-good fashion industry Gucci continuously must reinvent itself or else Prada and Fendi will steal away its share of the market.
Conversely, when a firm enjoys a national monopoly, it lacks the pressure to
innovate that comes from having local rivals.
For that reason, national industries with a single, dominant business seldom
attain global influence. Theres a reason why athletes swim faster and jump
higher in the Olympics than they do in practice. People perform at their best when
pushed by competitors. Even competing against ourselves motivates us to excel.
2) Challenges
Porter found that industries in countries with noticeable disadvantages often
ascended to global leadership on account of the creative solutions they invented in
order to overcome economic handicaps.
As a case in point, Japanese manufacturers in the 1970s and 1980s were limited
by scarce natural resources and relatively high-cost labor. Yet by pioneering
innovative management techniques (in the areas of quality control and just-in-time
production) Japans automotive and electronics manufacturers attained
international renown.
3) Connectivity
World-class industries sustain global dominance through the cluster effect
having cutting-edge companies in close proximity to one another.
Scope of HRM
For instance, software developers bunched together in Californias Silicon

Valley benefit from rapid information flow and immediate technological
interchange. Companies piggyback on one anothers novel applications to
spur a dizzying pace of innovation in the industry.
SOURCE: http://business.inquirer.net/69659/competitive-advantage-through-people-development
Functions of HRM
Importance of HRM
HRM
train people for challenging

roles
Good HR Practices help
Operative Functions
Managerial
functions:
attract and retain talent
Planning
Procurement
Development:
Job Analysis
Training
HR planning
develop skills and

competencies
Organizing
Recruitment
Selection
promote team spirit
Executive
development
Career
planning
Placement
develop loyalty and

commitment
Directing
Induction
Internal
mobility
increase productivity and

profits
Controlling
improve job satisfaction
Succession
planning
Human
resources
development
strategies
Motivation and
Compensation:
Maintenance:
Job design
Health
Grievances
Discipline
Personnel
audit
Teams and
teamwork
Personnel
research
Welfare
Collective
bargaining
Social security
Participation
Job evaluation
Performance and
potential
appraisal
Emerging
Issues:
Safety
Work scheduling
Motivation
Integration:
Compensation
administration
Incentives
benefits and
services
HR
accounting
HRIS
Mentoring
Empowerment
Trade unions
International
HRM
Employers
associations
Industrial
relations
Line and Staff Aspects of HRM

Line manager
A manager who is authorized to direct the work of
subordinates and is responsible for accomplishing the

organizations tasks.
Staff manager
A manager who assists and advises line managers.
Line Managers HRM Responsibilities

1.
Placing the right person on the right job
2.
Starting new employees in the organization (orientation)
3.
Training employees for jobs new to them
4.
Improving the job performance of each person
5.
Gaining creative cooperation and developing smooth working relationships
6.
Interpreting the firms policies and procedures
7.
Appraising the performance
8.
Developing the abilities of each person
9.
Creating and maintaining department morale
10. Protecting employees health and physical condition
Evolution of the Personnel Function
Hard and Soft HRM

Hard (instrumental) HRM approach:
Concept
employees are viewed as a passive factor of production, an expense

employees can be easily replaced and seen as disposable.
The Commodity
concept
Labour was regarded as a commodity to be bought and sold.

Wages were based on demand and supply. Government did
very little to protect workers.
The Factor of
Production concept
Labour is like any other factor of production, viz, money,

materials, land, etc. Workers are like machine tools.
The Goodwill concept
Welfare measures like safety, first aid, lunch room, rest room will
have a positive impact on workers productivity
The Paternalistic
concept/ Paternalism
Management must assume a fatherly and protective attitude

towards employees. Paternalism does not mean merely
providing benefits but it means satisfying various needs of the
employees as parents meet the requirements of the children.
Soft (humanistic) HRM approach:

stresses active employee participation
gains employee commitment, adaptability and contribution of their
competences to achievement of organizational goals
employees are valued as assets

Emphasizing communication, motivation and leadership
What is it all about?
Cont
Evolution of the Personnel Function

The Humanitarian
concept
To improve productivity, physical, social and psychological

needs of workers must be met. As Mayo and others stated,
money is less a factor in determining output, than group
standards, group incentives and security. The organization is a
social system that has both economic and social dimensions.
The Human Resource

concept
Employees are the most valuable assets of an organization.

There should be a conscious effort to realize organizational goals
by satisfying needs and aspirations of employees.
The Emerging concept Employees should be accepted as partners in the progress of a

company. They should have a feeling that the organization is
their own. To this end, managers must offer better quality of
working life and offer opportunities to people to exploit their
potential fully. The focus should be on Human Resource
Development.
Quality of work life (QWL) is a general concept that

refers to several aspects of the job, including:
Management and supervisory style
Freedom and autonomy to make decisions on the job
Meaningful tasks
Communicating HRM policies to
all employees:
HRM policies, programs, and procedures must be
communicated fully and effectively
They must be represented to outsiders
Objectives of the HRM Function

HRM contributions to organizational effectiveness:

Employing workforce skills and abilities efficiently
Increasing job satisfaction, self-actualization, and
quality of work life
Increasing employees job satisfaction and selfactualization

Employees must feel that the job is right for their
abilities and that they are being treated equitably
HR Management Challenges
Workforce Availability and Quality
Inadequate supply of workers with needed skills for knowledge
jobs
Education of workers in basic skills
Growth in Contingent Workforce

Increases in temporary workers, independent contractors,
leased employees, and part-timers caused by:

Need for flexibility in staffing levels
Increased difficulty in firing regular employees.
Reduced legal liability from contract employees
Demographics and Diversity Issues
More diversity of race, gender, age, and ethnicity in the
workforce
Balancing Work and Family
Dual-career couples
Single-parent households
Decline in the traditional family
Working mothers and family/childcare
Organizational Restructuring, Mergers, and Acquisitions
Right-sizingeliminating of layers of management, closing
facilities, merging with other organizations, and outplacing

workers
Intended results are flatter organizations, increases in productivity,
quality, service and lower costs.

Costs are survivor mentality, loss of employee loyalty, and turnover of
valuable employees.
HR managers must work toward ensuring cultural compatibility
in mergers.
Different Roles for HR

Management

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What is Human Resource?

The term human resources means: people who are

What is Human Resource Management?

Other resources are controlled by human resources

Human resources have intellect and emotion

Difference between Personnel Management and Human

Human resource (HR) management

Human Capital Management

have economic value to an organization.

Competitive Advantage Through People

Organizations can achieve sustained competitive advantage

Harvard economist Michael Porter looked at these questions from the

Source: Pfeffer (1994, 1998)

For instance, software developers bunched together in Californias Silicon

train people for challenging

attract and retain talent

develop skills and

promote team spirit

develop loyalty and

increase productivity and

improve job satisfaction

Line and Staff Aspects of HRM

subordinates and is responsible for accomplishing the

Line Managers HRM Responsibilities

Placing the right person on the right job

Starting new employees in the organization (orientation)

Training employees for jobs new to them

Improving the job performance of each person

Gaining creative cooperation and developing smooth working relationships

Interpreting the firms policies and procedures

Appraising the performance

Developing the abilities of each person

Creating and maintaining department morale

10. Protecting employees health and physical condition

Evolution of the Personnel Function

Hard and Soft HRM

employees are viewed as a passive factor of production, an expense

Labour was regarded as a commodity to be bought and sold.

Labour is like any other factor of production, viz, money,

The Goodwill concept

Management must assume a fatherly and protective attitude

Soft (humanistic) HRM approach:

competences to achievement of organizational goals

employees are valued as assets

What is it all about?

Evolution of the Personnel Function

To improve productivity, physical, social and psychological

The Human Resource

Employees are the most valuable assets of an organization.

The Emerging concept Employees should be accepted as partners in the progress of a

Quality of work life (QWL) is a general concept that

Objectives of the HRM Function

HRM contributions to organizational effectiveness:

Increasing employees job satisfaction and selfactualization

Growth in Contingent Workforce

leased employees, and part-timers caused by:

facilities, merging with other organizations, and outplacing

quality, service and lower costs.

HR managers must work toward ensuring cultural compatibility