Essentials of HRM

1. ‘Sundaram Ltd’ is an electronics company in Chandigarh. The top management plans to open
new branches pan India so they want to create a dynamic human resource department for
managing employee functions. You have been appointed as their VP -of HR. Explain to the top
management, what will be the scope of your department in thisexpansion. Give some examples
in the context of this company. (10 Marks)

SOLUTION

Introduction

Sundaram Ltd.'s plan to create a dynamic human resource department for managing employee functions
needs to take note of the following aspects of their pan India expansion program.

Planning HR Needs

The planning function of human resource management involves two major activities: short- and medium-
range planning and strategic planning. These twin functionalities include synchronizing HR needs with
the strategic mission and the process of planning the firm. Such strategic objectives may include
increasing revenue growth, service or product diversity, market share, profit margins, planning for
financial obligations, etc. Planning activities are also essential for rightly performing many other critical
Human Resource activities. To exemplify it, HR planning will help the organization better understand
what type of and how many employees the organization will need in the future. HR planning also
addresses how the firm obtains and thereafter trains future human capital.

How to staff the Organizational Needs

After linking human resource needs to the organization's strategy, positions must be filled. Staffing
involves recruiting job applicants and then selecting the most appropriate candidates for the available jobs.
It should be noted that staffing applies both to internal candidates (current employees in the firm) and
external candidates (candidates not currently employed by the firm). While engaging in the process of
recruitment, it is important that the organization cast a wide net to ensure a full and fair search for
potential job candidates. Recruiting is an extraordinarily indispensable HR function, because, if
organizations don't attract a wide range of candidates, they will be lesser successful in filling the actual
needs of the organization. After identifying the candidates, they must be selected for the identified jobs.
Common selection techniques include interviewing candidates, obtaining completed application forms,
formal training verifications, and reviewing education, administering various informal and formal tests to
determine potential and fit with the organization. All selection procedures must comply with various
pieces of state and central/federal human rights legislation. The selection process' goal should be to create
a match between the requirements of the job and a candidate's ability.

Motivating and Compensating Employees

Once employees are on their saddles, it mandates them to determine how well they are performing and
thus accord them their due reward. There are many essential aspects of compensation. To exemplify it,
employees are generally rewarded based on the value of their job responsibilities, their performance, and
their contributions. Undoubtedly, performance-based rewards can increase an employee's motivation to
perform, other forms of compensation are offered simply for being the organizational member. Directly
linked to "performance-based rewards" are often referred to as direct compensation. However,
compensation that is offered simply for being an organizational member, is often referred to as
indirect compensation.

Increasing Human Potential

The HRM field has been experiencing remarkable patronage in both informal and formal training and
developments. Many studies have concluded that many of the millennials, stepping into the workforce
today, are focusing more on their ability to grow and develop personally than they were earlier found to be
engrossed with their direct compensation. In today's chaotic global environment, many firms use training
and development activities to remain focused.
Revamping the Workplace Environment

Many organizations today find it hard to implement productivity improvement programs, improvise the
quality of work-life balance, and also improve health and safety at work. In the past, as experienced, the
primary safety and health focus was on the physical work environment, however, concern about the
psychological work environment is emerging now. Many firms realize that their competitors, as well as a
strategic advantage, are directly impacted when the work environment of employees is below par.
Notably, many organizations like Google are doing all they can to build an open and creative workplace.
Effective Work Relationships Maintenance

After hiring their required employees, organizations need to take good care of them. In addition to a
healthy & safe environment of compensation, firms must bring forth the conditions that will make it
attractive for employees to stay. For symbolizing this function, organizations need not only to establish
but also to maintain effective working relationships with their workforce. Employees, over the last many
decades, have gained considerable rights within the workplace. This has resulted in, employment
decisions such as layoffs, discharges, and demotions that must be made with adequate care, yet
supplemented with good reasons. Management must remain well versed with employee rights and never
violate them. Having explained this, an HR manager is expected to be in a very comfortable position to
inform managers about these rights.

Globalization of HRM

As the easy exchange of information becomes commonplace, while at the same time the world becomes
more interdependent, it is of paramount significance that HR managers need to learn from the HR
practices, activities, and policies of other countries. This apart, since organizations have become more
global, mandates that organizations should develop as well as implement HRM policies that can be
applied internationally, and also make them relevant to the workforce from diverse backgrounds and
cultures.

After analyzing these eight distinct HR activities and functions (compensation/motivation, planning,
staffing, performance appraisal, improving the workplace, training, and development, globalization, and
relationship building), it is necessary to view them both independently and together, because many HR
functions directly influence each other.

Conclusion

While concluding, performance in one single activity mostly depends on another performance. It needs to
be noted that all HR functions and activities, in most work environments operate within the constraints of
the external and internal environments. As deliberated, all the above functions should be viewed as a unit
they are interrelated and subject to a multitude of events and forces that help shape an organization's HR
policies. Finally, to help the firm achieve its strategic and organizational goals, human resource (HR)
practices and policies must be congruent with the organization's overall strategy--- Sundaram Ltd.'s plan
can thus be implemented. All of these can be considered to be the strategic nature of human resource
management.

2. An FMCG company wants to focus on improving the structure of the human resource
department. They have hired you as an HR advisor for this purpose. Suggest what should be
the various activities under the new sub-divisions in the HR Department. Elaborate them with
corporate examples. (10 Marks)

SOLUTION

Introduction

As per Gartner research findings revealed that only 35% of HR leaders agree they have the mix of data,
social-creative skills, and technology-based needed to meet their functions' requirements. This is
relevant in small businesses where one employee may shoulder all the needs of the organization's
human resource management, those are compliance, payroll, recruiting, tracking vacation days, and
employee benefits administration.

The antiquated guideline

To answer the question, "how many internal HR employees does your organization need to have on
staff used to follow a decades-long standard of 100 employees?" But, research from the AIHR
(Academy to Innovate HR) shows that this proportion is insufficient, hence, the correct number differs
due to a variety of factors. The earlier studies have found that the average HR-to-employee ratio is 2
HR for every 60 staff, but smaller businesses mostly report higher HR staff ratios. The requirement for
HR staff comes down as the size of employees increases as large organizations tend to have more HR
staff than small businesses mostly follow.

They may necessitate adding HR employees when only the need arises, such as when:
i) · Hitting lengthy and an unexpected growth period
ii) · Facing complex compliance issues
iii) · Lacking necessary systems and processes
iv) · Having single or multiple remote branches or locations
This is often why small businesses operate without an HR team. Notably, HR software systems
automate tasks such as time tracking and payroll runs, while external sources can substitute for
handling outsourced needs like recruiting. As said above, small businesses sometimes may not require a
dedicated HR employee until their employee count goes over 200. Nonetheless, a guideline is never to
be taken as "the hard and fast" rule. Your HR hiring plans should be on your current state of the
business depended. How you can structure your HR department if & when your business starts growing
beyond the 100 mark -- is being discussed below:

What should be the ideal HR hiring timeline in proportion to your number of employees?

The president of HR Strategies & Solutions (a consulting firm), Peter Rosen, offers a more modernized
guideline as per his experience. (See Figure 1)

Figure 1

The founder and CEO of consultancy firm, Reverb, Mikaela Kiner, opines that “If your company is
growing, it is better to bring in a second HR person at the 150 mark. That rate of growth necessitates
additional process and infrastructure.”

Optimization of your structure in the initial stage

If your organization has more than 100 employees and your HR staff/generalist is finding it difficult to
balance everything on their own, you need to hire your second HR employee. Generally, this gives you
two options to structure a swelling HR department.

i) Hiring an HR assistant: The scenario of you becoming the head of HR strategy --- handling
responsibilities like performance management and employee relations should be handled by an HR
assistant. The newly hired HR person has to handle administrative tasks like managing the HRIS,
posting job ads, and filing paperwork.

ii) Hiring a full-time recruiter: The recruit will take over the responsibility of one of the most
challenging HR functions, i.e. staffing. As per the recommendation of Peter Rosen, this structure is
ideal, as it saves a substantial amount of time by using a specialist for recruiting. Undoubtedly,
recruiting demands specialization to hire at a speedy pace during the stages of organizational growth.
(See Appendix 1).

Many organizations bring in leadership development and company culture experts when their employee
strength reaches between 50 and 80 because these are vital focus areas.But these needs too can be
outsourced, if they're not on your priority list. Kiner informs --- You can outsource that while also
searching for outside sources.

As your HR department grows, you should hire specialists to entrust some specific HR functions, viz
employee relations or employee benefits; the reason being these functions will become more complex
with the growth. (See Appendix 2)

Rosen further adds that in the context of compensation, outsourcing can sometimes either be in the form
of benefits packages or the form of competitive salary structures. But Kiner emphasizes the importance of
early hiring of experts — even for compensation. Kiner adds many of the generalists are not truly
compensation experts. Many times you may hire benefits and compensation people who are also often
good with HR systems, given the finding, you can put these all under one person.
After covering compensation, your needs will likely vary by industry. Here is an example of the pen
picture of a six-person HR department.
Rosen notes that in the case of, say, compensation, outsourcing can occasionally result in competitive
salary structures and benefits packages. As per the scenario, the HR duties are broken down like this (See
Appendix 3):

1) HR director: The HR Director is bestowed with the job of handling the strategic vision of the HR
department, in addition to approving all high-level decisions and s/he also handles communications with
the C-suite.

2) Employee relations manager: S/he looks after the onboarding needs, manages employee disputes, and
coordinates performance management efforts while recommending policy changes for approval.

3) Recruiting manager: S/he coordinates with hiring managers to parse through resumes, creates job
listings, extend offers, and conduct interviews while managing the applicant tracking system (ATS).

4) Training manager: Department managers remain within their domain of activities to effectively
develop training courses that strengthen skills, also take care of any learning management platforms, and
create assessments and materials.

5) Compensation Manager: Develops compensation structures and competitive pay within

predetermined budgets. Other than these, s/he employee benefits administration ensures error-free
payroll runs and manages core HR software systems.

6) Compliance manager: The manager has to ensure that the company is up-to-date with all employee,
health, and safety regulations, while also undertaking the responsibilities of necessary employee
certifications. (See Figure 4)

The format of the HR department makes sure that all strategic and core HR needs have a stakeholder, and
the flat HR structure allows the HR Director at the top to remain well aware of important projects and
discussions around him/her.

Conclusion

Things to keep in mind as you grow

All these above-mentioned five managers (2-6) are under your control, in addition to them, you may add
on many specialists and assistants, as per the requirements. A co-HR director of 'Sundaram Ltd', you could
also have by your side, or decide to break up their workloads by country or office location.

3. Maria, the HR Head of ‘Aztec Tech Solutions Ltd’ assigned the task of assessing the human
resource planning to the HR Department. However, his team informed him that this assessment is
not going well as they had expected. Keeping this context in mind, answer the following:

a. Explain the process of human resource planning. Give some examples also. (5 Marks)

SOLUTION

Introduction

Human resource planning (HRP) allows enterprises to plan in maintaining a steady supply of skilled
manpower. This is the reason it is also known as workforce planning. The process is used to help
companies evaluate their needs, in addition, to planning to meet those needs. We are discussing the case of
Aztec Tech Solutions Ltd here.

HRP has to be flexible enough so that it can meet short-term staffing challenges and at the same time it
can adapt to changing conditions in the business environment over the longer term. HRP starts by
assessing and auditing the current human resources capacity.

Human Resource Planning, and its Challenges

The HRP challenges include forces that are often changing in its status, for example -- employees getting
promoted, getting sick, or going on vacation, etc. Human Resource Planning ensures there is the best fit
between jobs and workers, avoiding both surpluses and shortages in the employee pool.

Intending to satisfy their objectives, HR managers need to plan to accomplish the following:

Find as well as attract skilled employees.

· Deal with conflicts and Cope with absences.
· Select, train, groom and reward the best of the flock.
· Promote employees or if it is so, let some of them go.

Investing in HRP is one of the most critical decisions an enterprise can make. Precisely speaking, a
company is only as good as its employees, hence a qualitative level of employee engagement is desirable
for a company's success. If an enterprise has the best practices in place, and the best employees, it can
mean the difference between productivity and sluggishness, which help in leading a company.
profitability.

Steps to HRP

There are four broad and general steps involved in the HRP process. In order to arrive at the end goal,
each step needs to be taken in order, which is developing a strategy, enabling the company to successfully
not only find but also retain enough qualified employees to meet the needs of the company.

Analyzing Labor Supply

The first step of HRP is to identify the company's human resources supply at present. In this stage, the
department of human resources studies the strength of the organization based on the number of workers,
their positions, benefits, skills, qualifications, and performance levels.

Forecasting Demand of Labor

In this second step, the company requires to outline the future of its employee strength. Here, the Human
Resource Department can consider certain issues like promotions, layoffs, transfers, and retirements —
anything that is connected with the future needs of a company. The Human Resource Department can also
see to the external conditions that may impact labor demand. The examples are new technology that might
either decrease or increase the need for a workforce.

Balancing Labor Supply & Demand

The third step in the Human Resource Planning process is forecasting the employment demand. HRD
creates an important gap analysis that brings forward the specific needs to narrow the company's labor
demand versus labor supply for the future.
Conclusion
In most of the cases, this analysis having been generated here does help Aztec Tech Solutions Ltd. in
assessing their HRP.

b. Discuss the qualitative methods for Human Resource Demand forecasting, that the company
can utilize. Which one do you think is best suited for this company?(5 Marks)

SOLUTION

Introduction

The process of estimating the future quantity and quality of people required is what is known as HR
(Human Resource) demand forecasting. The basis of the forecast must be the long-term corporate plan,
and annual budget, translated into activity levels for each department and function.

Let us talk about a few of the core factors, which are helpful to forecast the human resource demand in
an organization. These factors can be easily classified into 3: different sources -- they are as follows:

1. Organizational Decisions
2. Challenges from external environmental
3. Workforce Factors

Challenges from the external environment -- These challenges arise from various sources like legal,
social, political, and technical changes, economic developments, and competition.

To exemplify it, at the time of liberalization (during 1990-1995), the opening up of the capital market,
banking sector reforms, and online trading systems brought in a massive demand for finance
professionals in India. The demand for certain categories of skills and some specialized manpower is
also influenced by changes in political, social, and legal structure in an economy from time to time.

In the same breadth, firms are adopting the latest technology in automobiles, software, construction,
power, etc., and have greatly boosted the worth of engineers and technicians during the last couple of
years.
Nevertheless, technology is a double-edged weapon and thus its impact on HR plans is very hard to
predict and will surely impact the HRP.

To exemplify it, IT harnessing in Banks, Post and Telegraph Departments, and Railways may reduce
demand in one department (bookkeeping, for instance) while boosting its applications in another (viz.
computer operations) which was always a major change.

High IT applications with all their resulting benefits may compel organizations to go lean while also
suddenly downsizing their workforce as per the market. HRP and Employment planning under such
situations become complex.

Forecasting, most of the time, is more an art than a science, as it can provide exact approximations and
not absolute results and supplements the ever-changing environment in which a company operates,
resulting in this problem.

Decisions of the Organization

HRP has to consider the rest of the organizational sales and production forecasts, strategic plans, and to
be more accurate, new ventures.

To exemplify it, estimating changes in service or product demand, is a basic forecasting concern, as
anticipated changes in the regional or national economy, qualify the planning expert to forecast the
requisite production schedules, and thus they can estimate whether any extra work is required in the
long run.

A community hospital can predict internal changes in organization or administration or technology, to

forecast staffing needs like Max health care is right now into the situation, as they are setting up
operations at Gurgaon close by area to Delhi but remarkably notable is, these are workable only if they
are within the setup's financial resources.
Conclusion

Proposed contraction, diversification, or expansion of the organization's activities will affect the labor
demand in general, or for particular skills. This information may be estimated by competitive analysis,
market research, trends in advancements in technology and so on.
Appendix 1

Appendix 2

Appendix 3