HRM-Unit-1.docx

**What is Human Resource Management?** HRM is the study of activities regarding people working in an organization. It is a managerial function that tries to match an organization's needs to the skills and abilities of its employees. **Definitions of HRM** Human resources management (HRM) is a man...

**What is Human Resource Management?** HRM is the study of activities regarding people working in an organization. It is a managerial function that tries to match an organization's needs to the skills and abilities of its employees. **Definitions of HRM** Human resources management (HRM) is a management function concerned with hiring, motivating and maintaining people in an organization. It focuses on people in organizations. Human resource management is designing management systems to ensure that human talent is used effectively and efficiently to accomplish organizational goals. HRM is the management of various activities designed to enhance the effectiveness of an organisation's work force in achieving organisational goals." **Nature of HRM** HRM is a management function that helps manager's to recruit, select, train and develop members for an organization. HRM is concerned with people's dimension in organizations. The following constitute the core of HRM 1. **HRM Involves the Application of Management Functions and Principles**. The functions and principles are applied to acquiring, developing, maintaining and providing remuneration to employees in organization. 2. **Decision Relating to Employees must be Integrated**. Decisions on different aspects of employees must be consistent with other human resource (HR) decisions. 3. **Decisions Made Influence the Effectiveness of an Organization.** Effectiveness of an organization will result in betterment of services to customers in the form of high quality products supplied at reasonable costs. 4. **HRM Functions are not Confined to Business Establishments Only** but applicable to non business organizations such as education, health care, recreation and like. **Scope of HRM**  a. Human Resource Planning: The objective of HR Planning is to ensure that the organization has the right types of persons at the right time at the right place. It prepares human resources inventory with a view to assess present and future needs, availability and possible shortages in human resource. Thereupon, HR Planning forecast demand and supplies and identify sources of selection. HR Planning develops strategies both long-term and short-term, to meet the man-power requirement. b. Design of Organization and Job: This is the task of laying down organization structure, authority, relationship and responsibilities. This will also mean definition of work contents for each position in the organization. This is done by "job description". Another important step is "Job specification". Job specification identifies the attributes of persons who will be most suitable for each job which is defined by job description. Personnel Research and Information System Human resource planning Design of the Organization and Job Selection and Staffing Training and Development Organizational Development Employee Assistance Compensation and Benefits Union/Labour Relations Human resource management c. Selection and Staffing: This is the process of recruitment and selection of staff. This involves matching people and their expectations with which the job specifications and career path available within the organization. d. Training and Development: This involves an organized attempt to find out training needs of the individuals to meet the knowledge and skill which is needed not only to perform current job but also to fulfil the future needs of the organization. e. Organizational Development: This is an important aspect whereby "Synergetic effect" is generated in an organization i.e. healthy interpersonal and inter-group relationship within the organization. f. f\) Compensation and Benefits: This is the area of wages and salaries administration where wages and compensations are fixed scientifically to meet fairness and equity criteria. In addition labour welfare measures are involved which include benefits and services. g. g\) Employee Assistance: Each employee is unique in character, personality, expectation and temperament. By and large each one of them faces problems every day. Some are personal some are official. In their case he or she remains worried. Such worries must be removed to make him or her more productive and happy. h. h\) Union-Labour Relations: Healthy Industrial and Labour relations are very important for enhancing peace and productivity in an organization. This is one of the areas of HRM. i. Personnel Research and Information System: Knowledge on behavioral science and industrial psychology throws better insight into the workers expectations, aspirations and behaviour. Advancement of technology of product and production methods have created working environment which are much different from the past. Globalization of economy has increased competition many fold. Science of ergonomics gives better ideas of doing a work more conveniently by an employee. Thus, continuous research in HR areas is an unavoidable requirement. It must also take special care for improving exchange of information through effective communication systems on a continuous basis especially on moral and motivation **FUNCTIONS OF HRM** Human Resource Management functions can be classified in following three categories. 1\. Managerial Functions 2\. Operative Functions 3\. Advisory Functions Managerial Functions: The **Managerial Functions** of Human Resource Management are as follows: 1. **Human Resource Planning** For a human resource manager, planning means the determination of personnel programs that will contribute to the goals of the enterprise, i.e., anticipating vacancies, planning job requirements, job descriptions and determination of the sources of recruitment. In this function of HRM, the number and type of employees needed to accomplish organisational goals is determined. Research is an important part of this function, information is collected and analysed to identify current and future human resource needs and to forecast changing values, attitude, and behaviour of employees and their impact on organisation. 2. **Organising** In an organisation tasks are allocated among its members, relationships are identified, and activities are integrated towards a common objective. Relationships are established among the employees so that they can collectively contribute to the attainment of organisation goal. 3. **Directing** Activating employees at different level and making them contribute maximum to the organisation is possible through proper direction and motivation. Taping the maximum potentialities of the employees is possible through motivation and command. **4.Controlling** After planning, organising, and directing, the actual performance of employees is checked, verified, and compared with the plans. If the actual performance is found deviated from the plan, control measures are required to be taken. **Operative Functions:** The Operative Functions of Human Resource Management are as follows: **Recruitment and Selection** Recruitment of candidates is the function preceding the selection, which brings the pool of prospective candidates for the organisation so that the management can select the right candidate from this pool. **Job Analysis and Design** Job analysis is the process of describing the nature of a job and specifying the human requirements like qualification, skills, and work experience to perform that job. Job design aims at outlining and organising tasks, duties, and responsibilities into a single unit of work for the achievement of certain objectives. **Performance Appraisal** Human resource professionals are required to perform this function to ensure that the performance of employee is at acceptable level. **Training and Development** This function of human resource management helps the employees to acquire skills and knowledge to perform their jobs effectively. Training and development programs are organised for both new and existing employees. Employees are prepared for higher level responsibilities through training and development. **Wage and Salary Administration** Human resource management determines what is to be paid for different type of jobs. Human resource management decides employees compensation which includes - wage administration, salary administration, incentives, bonuses, fringe benefits, and etc. **Employee Welfare** This function refers to various services, benefits, and facilities that are provided to employees for their well being. **Maintenance** Human resource is considered as asset for the organisation. Employee turnover is not considered good for the organisation. Human resource management always tries to keep their best performing employees with the organisation. **Labour Relations** This function refers to the interaction of human resource management with employees who are represented by a trade union. Employees comes together and forms an union to obtain more voice in decisions affecting wage, benefits, working condition, etc, **Personnel Research** Personnel researches are done by human resource management to gather employees\' opinions on wages and salaries, promotions, working conditions, welfare activities, leadership, etc. Such researches helps in understanding employees satisfaction, employees turnover, employee termination, etc, **Personnel Record** This function involves recording, maintaining, and retrieving employee related information like - application forms, employment history, working hours, earnings, employee absents and presents, employee turnover and other data related to employees. **Advisory Functions:** The Advisory Functions of Human Resource Management are as follows: Human Resource Management is expert in managing human resources and so can give advice on matters related to human resources of the organisation. Human Resource Management can offer advice to: 1\. **To Top Management:** Personnel manager advises the top management in formulation and evaluation of personnel programs, policies, and procedures. He also gives advice for achieving and maintaining good human relations and high employee morale. 2\. **To Departmental Heads**: Personnel manager advises the heads of various departments on matters such as manpower planning, job analysis, job design, recruitment, selection, placement, training, performance appraisal, etc. **The Vital Qualities of an HR Manager** 1. **Leadership Skills** - An HR Manager is the bridge between the employee and the organization. Hence his leadership skills such as the ability to understand employees and their needs, delegate tasks, visualize the bigger picture and remain aligned to the vision of the organization are crucial. It is also important that they possess sound knowledge of the functioning of every department of the organization, such as marketing, finance, sales and so on.  2. **Communication Skills** - Communication should be the middle name of an HR Manager. He is responsible for much of the interpersonal communication with the employees and top bosses of the organization. Hence he must be both a people's person and remain aligned with the organization.  3. **Self-Discipline** - Because the HR manager deals with real people, challenges can crop up at any hour. He is also engaged in delivering multiple tasks throughout the day. Hence he should be adept at prioritizing his tasks and managing any issues that could come up. This requires great mental and intellectual discipline.  4. **Ethics and Integrity** - The HR is aware of confidential company policies pertaining to salary packages, placement criteria, selection processes, etc. He is also the one who receives the smallest to the biggest complaints such as money laundering and sexual misconduct. Hence his sense of fairness and integrity must be in the right place. He must be true to his conscience at all times.  5. **Empathetic Attitude** - The HR should essentially be a people's person. This is a soft skill that can be built with time but it is at the center of the role. He should be able to work towards the satisfaction of all employees while retaining the essence of the organization at the same time. He should take care to not involve himself in personal issues of the employees and restrict himself to professional complaints unless absolutely necessary.  6. **Legally Sound** - The HR makes key decisions pertaining to policy frameworks for the organization. He should ensure he consults the legal team regarding the implications of the same. This will enable him to tackle any loopholes or issues that might crop up. 7. **Problem Solving** Problem solving is a vital aspect of the ideal HR employee's skill-set. In any given day within the company, problems will crop up. Whether it's legal, managerial, or employee related, a HR professional needs to have the ability to drop what they're doing and solve the problem to the best interests of the company and its employees. If an employee needs to leave work to attend an emergency, but the company itself needs that specific employee to stay and take care of some vital work - HR is going to be the department that everyone looks to to formulate a compromise. Which leads us onto our next point. 8. **Time Management** You're going to have a lot of different micro-tasks that may be closely or not-at-all related to each other throughout the day. Sometimes, these tasks are going to fall on your desk out of nowhere with a deadline of yesterday. To be a successful HR professional, it's important to be able to prioritize your time effectively and organize yourself so that you have time to spare. Don't just organize your tasks in accordance with how much time you have, organize with the expectation that more tasks will come your way. 9. **Organizational Skills** This quality slightly overlaps with the 'Time management' skill, but there IS a difference! Whether it's different folders (physical or digital) for different aspects of the business, keeping a clear desk, color-coded binders to differentiate when needing to quickly find a piece of information; organizational skills are going to save you a lot of time. 10. **Desire to learn** HR professionals should constantly be nurturing and building their skill-set in order to stay ahead of the curve and maintain their overall value within the field. Mergers/ acquisitions, new senior leadership, new compliance laws, all of these situations require somebody who is so ahead of their game that they can adapt on-the-fly in order to keep the company they work for relevant. 11. **Patience** He should be extremely patient and not someone who loses his temper easily. While [dealing with employees](https://www.toppr.com/guides/business-management-and-entrepreneurship/human-resource-management/qualities-of-hr-manager/), it is important to be a good listener, especially when an employee is voicing his concerns. And good listening skills require a lot of patience. Further, since employees tend to talk to the HR manager about their problems, they can get agitated and verbally abusive. In such [situations](https://www.toppr.com/guides/reasoning-ability/statements/situation-and-reaction/), it is imperative that the HR manager keeps his cool and controls the situation.  Definition of Strategic Human Resource Management ------------------------------------------------- "Strategic human resource management means formulating and [**executing human resource policies**](https://www.iedunote.com/human-resource-management) and practices that produce the employee competencies and behaviors that the company needs to achieve its strategic aims."- Gary Dessler. Strategic human resource management (SHRM) is defined as "the pattern of planned human resource deployments and activities intended to enable an organization to achieve its goals". -- Wright & McMahan Strategic human resource management is an approach that relates to decisions about the nature of employment relationship, recruitment, training, development, performance management, reward, and employee relations. Wright and McMahan (1992) defined SHRM as 'the pattern of planned human resource deployment and activities intended to enable the firm to achieve its goals'. Components of Strategic Human Resource Management ------------------------------------------------- This definition implies the following four components of SHRM: 1\. It focuses on an organization's human resources (people) as the primary source of the organization's competitive advantage. 2\. The activities highlight the HR programs, policies, and practices as the means through which the organization's people can be deployed to gain a competitive advantage. 3\. The pattern and plan imply a fit between HR strategy and the organization's business strategy (vertical fit) and between all HR activities (horizontal fit). 4\. The people, practices, and planned patterns are all purposeful, directed towards the achievement of the organization's goals. **Characteristics of Strategic Human Resource Management(SHRM)** 1. **Recognition of the outside Environment**: Outside environment presents some opportunities and threats to the organization in the form of- Laws Economic conditions Social and demographic change Domestic and international political forces Technology and so on. Strategic human resource strategy explicitly recognizes the threats and opportunities in each area and attempts to capitalize on the opportunities while minimizing or deflecting the effect of threats. **2. The impact of Competition:** The forces of competition in attracting, rewarding, and using employees have a major effect on corporate human resource strategy. Forces play out in local, regional and national labor markets. Labor market dynamics of wage rates, unemployment rates, working conditions, benefits levels minimum wages legislation and competition reputation all have an impact on and are affected by strategic human resource decisions. **3. Long-Range Focus:** A strategic human resource management should be long-range focus cause this is not easy to change the strategic human resource policy. 4\. Choice and Decision-making focus: In other words, the strategy has a problem solving or problem preventing focus. Strategy concentrates on the question, "what should the organization do and why?" this action orientation requires that decisions be made and carried out. **5. Consideration of all Personnel**: A strategic approach to human resources is concerned with all of the firm's employees, not just its hourly or operational personnel. Traditionally, human resource management focuses on hourly employees, with most clerical exempt employees also included. 6. Integration with the Corporate Strategy: Human resource strategy adopted by a firm should be integrated with the firm's corporate strategy. **Objectives of SHRM:** 1\. To focus the HR policies, programmes and practices as the means through which the people can be deployed to gain better and competitive advantages; 2\. To manage and maintain human capital resources, skill, knowledge, efficiency and intelligence of the employees; 3\. To find out the ways and means for effective and efficient utilisation of human resources; 4\. To emphasise that human resources treated as the primary source of competitive advantages of the organisation; 5\. To integrate the HR strategies with the Business strategies for the betterment of organisation; 6. To make an appropriate direction for people, practices and performance towards the achievements of the goals of the organisation; 7\. To develop stable employee relations by way of effective resource utilisation, optimizing remuneration, better productivity and better work culture; etc. 8\. To recognise the needs and customised services of different market segments and try to fulfil them properly; 9\. To make an appropriate 'cost optimisation' with increase the efficiency of resources; and 10\. To make an appropriate and feasible plan for change environment.   What are HR strategies? HR strategies set out what the organization intends to do about its human resource manage- ment policies and practices and how they should be integrated with the business strategy and each other. They are described by Dyer and Reeves (1995) as 'internally consistent bundles of human resource practices'. Richardson and Thompson (1999) suggest that: A strategy, whether it is an HR strategy or any other kind of management strategy must have two key elements: there must be strategic objectives (ie things the strategy is sup- posed to achieve), and there must be a plan of action (ie the means by which it is pro- posed that the objectives will be met) What are HR strategies? HR strategies set out what the organization intends to do about its human resource manage- ment policies and practices and how they should be integrated with the business strategy and each other. They are described by Dyer and Reeves (1995) as 'internally consistent bundles of human resource practices'. Richardson and Thompson (1999) suggest that: A strategy, whether it is an HR strategy or any other kind of management strategy must have two key elements: there must be strategic objectives (ie things the strategy is sup- posed to achieve), and there must be a plan of action (ie the means by which it is pro- posed that the objectives will be met) What are HR strategies? HR strategies set out what the organization intends to do about its human resource manage- ment policies and practices and how they should be integrated with the business strategy and each other. They are described by Dyer and Reeves (1995) as 'internally consistent bundles of human resource practices'. Richardson and Thompson (1999) suggest that: A strategy, whether it is an HR strategy or any other kind of management strategy must have two key elements: there must be strategic objectives (ie things the strategy is sup- posed to achieve), and there must be a plan of action (ie the means by which it is pro- posed that the objectives will be met) Meaning of Strategic Management: Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its industry. Strategic management is the continuous planning, monitoring, analysis and assessment of all that is necessary for an organization to meet its goals and objectives. Strategic management is the comprehensive collection of ongoing activities and processes that organizations use to systematically coordinate and align resources and actions with mission, vision and strategy throughout an organization. Strategic management activities transform the static plan into a system that provides strategic performance feedback to decision making and enables the plan to evolve and grow as requirements and other circumstances change. **The characteristics o\$ Strategic Management** The characteristics of strategic management demonstrate that it is an extremely complex pursuit. Strategic managers are not only concerned with analyzing the environment, or choosing and implementing strategies, but are also concerned with: - Motivate people to participate in the process - Seeking out and balancing viewpoints - creating a cohesive set of organizational values to guide behavior  - fostering ideas - Managing risk profiles - applying figurehead, innovation and interpersonal skills to act as dynamic leaders rather than mechanistic managers  Corporate-Level Strategy Definition: Corporate-Level Strategy refers to the top management's approach or game plan for administering and directing the entire concern. These are based on the company's business environment and internal capabilities. It also called as Grand Strategy. It reflects the combination and pattern of business moves, actions and hidden goals, in the strategic interest of the concern, considering various business divisions, product lines, customer groups, technologies and so forth.  **Stability Strategy** - Strategy to maintain the current market share and position by continuing to serve in the same industry with the same [**product line**](https://www.wallstreetmojo.com/product-line/) and services. - It occurs when a company performs fairly and reasonably well in its sector and chooses to gain stability. - The main objective of organizations through such strategies is to gain perpetual growth and improved performance in the long run. - It is common because it is less risky and inexpensive as no new or out-of-box planning needs to be executed. - It gives importance to sustainable and modest growth.  **Expansion Strategy** - The strategies focus on entering new markets, innovating and introducing new products and services, etc. - Methods include expansion through concentration, diversification, integration, cooperation, and internationalization. - It aims to expand [**market share**](https://www.wallstreetmojo.com/market-share-formula/), obtain increased [**profit**](https://www.wallstreetmojo.com/profit/), and achieve faster growth. - It helps companies dominate the market, withstand competition, gain [**competitive advantages**](https://www.wallstreetmojo.com/competitive-advantage/), and in certain market conditions, expansion strategies help companies survive. - It benefits society through innovation. - It is highly rewarding and adds value to the company. **Retrenchment Strategy** - It is the opposite of an expansion strategy. It helps reduce the loss made by [**restructuring**](https://www.wallstreetmojo.com/restructuring/) the strategies, cutting off loss-making divisions or businesses, etc. - The main types of retrenchment strategies are turnaround, divestment, and liquidation. - It is formulated when companies observe that they must revamp their business model, sell certain assets to generate [**cash flow**](https://www.wallstreetmojo.com/cash-flow/), etc. Enterprises may stop a product line due to low demand and high-cost manufacturing. - It is the least utilized strategy as it is only regulated as protective measures in a survival mode when the company faces a strong market crisis and seeks to regain profitability. **Combination Strategy** - Another important type of corporate strategy is the combination strategy. It occurs when a company combines other strategies instead of focusing on a single strategy. - It is common with entities like MNCs and other large organizations. When the different business units or divisions perform different activities, the parent entity will utilize different strategies for the units.