Human Resource Management Unit 1 PDF

Human Resource Management – Unit 1 Definition of HRM HRM is the practice of recruiting, hiring, deploying, and managing an organization's employees. It focuses on optimizing employee performance to achieve organizational objectives while ensuring employee satisfacti...

Human Resource Management – Unit 1 Definition of HRM HRM is the practice of recruiting, hiring, deploying, and managing an organization's employees. It focuses on optimizing employee performance to achieve organizational objectives while ensuring employee satisfaction and development. Jack Welch, former CEO of General Electric and management guru, sums up the new role of HRM: “Get out of the parties and birthdays and enrollment forms.… Remember, HR is important in good times, HR is defined in hard times.” 1  Key Functions of HRM Training and Performance Recruitment and Development: Providing Management: Evaluating Selection: Attracting, employees with the skills and and improving employee screening, and selecting knowledge necessary to performance through qualified candidates for job perform their jobs effectively feedback, appraisals, and positions. and preparing them for future goal setting. roles. Employee Relations: Compensation and Managing the relationship Benefits: Designing and between the organization and HR Planning: Forecasting managing employee its employees, including future human resource needs compensation structures, handling grievances, and developing strategies to including salaries, bonuses, fostering a positive work meet those needs. and benefits packages. environment, and ensuring compliance with labor laws. Compliance: Ensuring that the organization adheres to all relevant labor laws and regulations  Industrial Revolution: The need for managing large workforces in factories led to the emergence of personnel departments. Management Focus: Primarily on hiring, firing, Early 20th payroll, and ensuring compliance with Personnel labor laws. Century: Role: Administrative, with a focus on employee record-keeping and basic workforce management. Mid 20th Century: Human Relations Movement Post-War Era: The rise of unions and the importance of worker satisfaction began to be recognized. Focus: Employee welfare, motivation, and productivity. Role: Introduction of training programs, employee benefits, and efforts to improve working conditions. Late 20th Century: Human Resource Management (HRM) Shift from Personnel to HRM: Recognized as a key function in strategic business planning. Focus: Talent acquisition, development, performance management, and aligning HR practices with business goals. Role: Strategic partner, involved in organizational development, culture shaping, and leadership development.  Globalization and Technology: Advances in technology and Early 21st Century: globalization required HR to manage Strategic HR and diverse and dispersed workforces. Focus: Leveraging technology for recruitment (e.g., LinkedIn), employee Integration Technology engagement (e.g., HR software), and data analytics for informed decision- making. Role: Data-driven, with a focus on strategic initiatives like employer branding, diversity and inclusion, and succession planning.  Agility and Adaptability: The COVID-19 pandemic accelerated remote work and flexible working arrangements. Focus: Employee experience, mental health Agile HR and Present Day: and well-being, and fostering an inclusive and engaging workplace culture. Experience Employee Role: Innovator, change agent, and advocate for employee-centric policies. HR managers are now involved in organizational design, digital transformation, and continuous learning initiatives..  Talent Management: Recruiting, onboarding, and retaining top talent. Responsibilities of Employee Development: Implementing training programs and career development plans. Performance Management: Setting performance standards, conducting evaluations, and facilitating feedback. Compliance: Ensuring the organization adheres to Modern HR labor laws and regulations. Managers Compensation and Benefits: Designing competitive compensation packages and benefits programs. Employee Relations: Mediating conflicts, addressing grievances, and maintaining a positive workplace environment. Strategic Planning: Aligning HR strategies with Key organizational goals and driving change initiatives. Technology Utilization: Leveraging HR technology for data analytics, recruitment, and employee engagement  People Analytics: Using data to make informed HR decisions. Remote and Hybrid Work: Managing remote teams and ensuring productivity and engagement. Diversity, Equity, and Inclusion (DEI): Creating inclusive workplaces and promoting diversity. Emerging Employee Well-being: Focusing on mental health, work-life balance, and overall well-being. Trends Sustainability: Integrating sustainable practices into HR policies. The role of the HR Manager continues to evolve, with an increasing emphasis on strategic initiatives and a holistic approach to managing human capital. This evolution reflects broader changes in the business environment, workforce expectations, and technological advancements.  The Role of HRM Keep in mind that many functions of HRM are also tasks other department managers perform, which is what makes this information important, despite the career path taken. Most experts agree on seven main roles that HRM plays in organizations. These are described in the following sections. Staffing You need people to perform tasks and get work done in the organization. Even with the most sophisticated machines, humans are still needed. Because of this, one of the major tasks in HRM is staffing. Staffing involves the entire hiring process from posting a job to negotiating a salary package. Within the staffing function, there are four main steps: 1. Development of a staffing plan. This plan allows HRM to see how many people they should hire based on revenue expectations. 2. Development of policies to encourage multiculturalism at work. Multiculturalism in the workplace is becoming more and more important, as we have many more people from a variety of backgrounds in the workforce. 3. Recruitment. This involves finding people to fill the open positions. 4. Selection. In this stage, people will be interviewed and selected, and a proper compensation package will be negotiated. This step is followed by training, retention, and motivation.  Development of Workplace Policies Every organization has policies to ensure fairness and continuity within the organization. One of the jobs of HRM is to develop the verbiage surrounding these policies. In the development of policies, HRM, management, and executives are involved in the process. For example, the HRM professional will likely recognize the need for a policy or a change of policy, seek opinions on the policy, write the policy, and then communicate that policy to employees. It is key to note here that HR departments do not and cannot work alone. Everything they do needs to involve all other departments in the organization. Some examples of workplace policies might be the following: Discipline process policy Vacation time policy Dress code Ethics policy Internet usage policy Compensation and Benefits Administration HRM professionals need to determine that compensation is fair, meets industry standards, and is high enough to entice people to work for the organization. Compensation includes anything the employee receives for his or her work. In addition, HRM professionals need to Pay 401(k) Health make sure the pay is comparable to what other Benefits (retirement people performing similar jobs are being paid. plans) This involves setting up pay systems that take into consideration the number of years with the organization, years of experience, education, and similar aspects. Examples of employee compensation include the following: Bonuses Stock Tuition purchase Vacation time Sick leave reimburseme plans nt  Retention Human resource people must be aware of all the laws that affect the workplace. An HRM professional might work with some of the HRM Retention involves keeping and motivating employees to stay with the organization. Compensation is a major factor in employee retention, but there are other factors as well. Ninety percent of employees leave a company for the following reasons: 1. The job they are performing 2. Challenges with their manager 3. Poor fit with organizational culture 4. Poor workplace environment Despite this, 90 percent of managers think employees leave as a result of pay. As a result, managers often try to change their compensation packages to keep people from leaving, when compensation isn’t the reason they are leaving at all. Unit 2 HUMAN RESOURCE PLANNING: MEANING It is a process where management ensures the right number and right kind of people, at the right place, at the right time, doing the right things for the achievement of organizational goals.  OBJECTIVES: Stock-taking of current human resources. Ensuring optimum use of current human resources. Reducing imbalance in distribution and allocation of human resources among departments and divisions. Assessing and forecasting future skill required. Ensuring flow of required human resources in the future. Checking the cost of human resources. Providing data for transfer and promotion. IMPORTANCE: Results in decreased labour cost by assessing the shortage or surplus of human resources and correcting the imbalances. Provides a base for planning employee development programs. Identifies the gaps in skills of existing personnel in order to arrange corrective training. Helps with 'succession planning.' Human Resource Management Human Resource Management (HRM) is the strategic approach to managing people within an organization to maximize their performance and align it with the company's goals. It encompasses a variety of functions, including recruiting, training, performance management, employee relations, and compensation and benefits.  To judge the mental capacity of the applicants. These tests TYPES OF SELECTION 1. INTELLIGENCE TEST are used to measure TESTS: (IQ TEST): the ability to understand instructions and to take decisions. ii. Mechanical Test: To i. Cognitive Test: To judge the capacity to test the ability of the learn and perform 2. APTITUDE TESTS: brain to think and mechanical tasks. This reason as opposed to test is used to select feel. mechanics, technicians, etc. iii. Psycho-motor Skills: select workers to To determine mental perform semi-skilled dexterity or motor or repetitive jobs like ability. This test is packing, checking, used to assembly work, etc. 3. TRADE/PROFICIENCY TEST: To judge the skill or knowledge already acquired by the candidate. i. Job Knowledge Test: To evaluate the proficiency in operating, calculating, typing, etc. The test can be either written or oral. This test is used for selecting typists, machine operators, drivers. ii. Work Sample Test: To evaluate the proficiency by assigning a piece of work to the candidate. It’s a practical test. 4. INTEREST TEST: To judge the special concern, involvement or liking of the candidate. This test is used to check the suitability of the candidate for the particular job and whether the job will be satisfying for the candidate. 5. PERSONALITY TEST: To test the personality as a whole including the temperament, value system, emotional reactions, maturity, etc.  To find out the worth of a TYPES OF EMPLOYMENT candidate and to eliminate 1. PRELIMINARY INTERVIEW: INTERVIEW: unsuitable candidates in the initial phase itself Conducted to gather the history of the candidate 2. BACKGROUND 3. PATTERNED/STRUCTURED such as experience, INFORMATION INTERVIEW: INTERVIEW: education, health, likes and dislikes applicant. Standard A series of questions questions are asked and phrased in advance and is compared with critical related to the strategic scores to determine information about the suitability.  Candidate is allowed to talk freely on the 4. subject selected by the UNSTRUCTURED/NON- interviewer. No direct 5. STRESS INTERVIEW: DIRECTED INTERVIEW: questions are asked and interviewer is a passive listener. A stressful environment is created. The applicant is intentionally interrupted, criticized 6. PERSONAL and mocked at. The 7. PANEL INTERVIEW INTERVIEW mental/emotional strength of the applicant is judged for higher level posts. 8. GROUP INTERVIEW 9. VIRTUAL INTERVIEW  1. Interviewer 2. Adequate prior GUIDELINES FOR should be information about EFFECTIVE competent, trained the candidate must INTERVIEWING: and experienced to be gathered. conduct interview. 4. Relevant and 5. No personal 3. Privacy must be well thought out remarks and maintained. questions must be prejudices. asked. 6. Maintaining a proper record of the interview. PLACEMENT: MEANING: Placement is the allocation of right people to the right job. Placement can arise out of promotion, transfer, demotion or assignment of a new employee. Probation → Confirmation  Placement should be organisation centric while keeping the interest of the employee in mind in order to improve the efficiency of the worker and to increase the productivity and performance of the organisation. The selected employee should neither be over qualified nor less qualified for the job. Placement should be subject to review and be flexible in nature.  INDUCTION/ORIENTATION: Orientation programs are designed to provide the new employee with the information about the organisation and the job and people working in the organisation. Orientation results in reduction of anxiety due to fear of unfamiliarity. Hence, orientation is a process of familiarizing the employee with the job and the organisation before the work starts. It is also known as Induction.  PROBLEMS ASSOCIATED WITH ORIENTATION/INDUCTION PROGRAMS: An induction program can go wrong for a number of reasons: 1. When the supervisor is not trained properly to conduct the program. 2. When an employee is overloaded with information. 3. When wrong or incorrect perceptions are developed by an employee. 4. When emphasis is given on the work aspect rather than the humane side of the organisation. SOCIALISING It is a process through which employees are familiarised with organisational realities, which in turn brings them closer to the existing surroundings of their work place. It helps in bringing a change in the attitude and behaviour of an employee which will be in sync with the organisational culture. It is also necessary to help people feel at ease in their new job and to bring about psychological adjustments in their new surroundings. Socialisation results in cordial relationships. Socialisation is a broader term which is practiced at different stages. Induction is a part of socialisation as it is confined to new recruits only. EMPLOYEE RETENTION While having talented people is essential, retaining them is a great challenge. REASONS FOR EMPLOYEE TURNOVER: 1. Out of frustration and job dissatisfaction. 2. Constant conflicts with superiors. 3. Lack of growth prospects in terms of money and position. 4. Rude behaviour by managers. IMPORTANCE OF EMPLOYEE RETENTION: 1. Hiring is not easy, a lengthy process, often costly and time consuming. 2. Organisations invest a lot of money in training their employees. 3. Employees staying longer at the organisation results in better adjustment of the employees and an increase in their loyalty and integrity. 4. Lower employee turnover rate results in better organisations than where employee turnover rate is higher.  MEASURES OF EMPLOYEE RETENTION Acquiring the right talent. Offering an attractive package. Promotion engagement. Meaningful work assignment. Praise and recognition. Career development. Job security. Positive work environment. TRAINING: MEANING OF TRAINING: A systematic procedure for transferring technical know-how to the employees so as to increase their knowledge and skills for doing a particular job. IMPORTANCE OF TRAINING: 1. Systematic Learning – decreases time and increases performance rather than hit and trial. 2. Better Performance – increases productivity as well as quality. 3. Recruitment (Internal) – good to select and train internally. 4. Reduction in Cost – due to better handling of machines, equipment and materials. 5. Efficient and Economical Supervision 6. Standardised Performance 7. Less Accidents 8. Increased Morale 9. Better Work Environment 10. Increased Mobility  DEVELOPMENT MEANING OF DEVELOPMENT: Development is a systematic process of training and growth by which individuals gain and apply knowledge, skills, insights and attitudes to manage work organisations effectively. PROCESS OF DESIGNING A TRAINING PROGRAM: 1. ASSESSMENT/IDENTIFICATION OF TRAINING NEEDS: With the help of a thorough analysis of objectives, resources, environment and climate of the organisation. Finding gaps and issues in the organisation that need to be addressed. 2. SETTING OF TRAINING GOALS: Translating the training needs identified in the first step into specific training goals. Such as individual-specific training or general training. 3. SELECTION OF TRAINERS (BASED ON): Employees’ needs. Outdated skills. Need for multiple skills. Need to keep pace with the industry. 4. ORGANISATION OF TRAINING PROGRAMME: Choosing the right training method and developing content based on training goals, selecting trainer (in-house or outsource), course content, duration and coverage to maintain uniformity. 5. PREPARATION OF BUDGET (FOR MATERIAL AND METHODS): Training incurs costs such as cost of instruments and infrastructure. Hence, trainers should be trained suitably.  In this method, a superior gives training to a subordinate who he hopes will be his heir-apparent. The UNDERSTUDY: subordinate learns through experience and observation by participating in handling day to day problems. This is practiced as both lower as well as higher levels of management. For example, a potential future CEO works as the assistant to the current CEO. JOB ROTATION: It is the process of training employees by rotating them through a series of related jobs. Rotation not only makes a person well acquainted with different jobs, but it also alleviates boredom and allows to develop rapport with a number of people. This helps to develop a versatile and multi-skilled workforce. APPRENTICESHIP: A structured process by which the trainee becomes a skilled worker through a mix of classroom teaching and on-the-job training. Suitable for craftsmen, electricians, plumbers, masons, mechanics, printers, etc. VESTIBULE/SIMULATED TRAINING: Vestibule is a passage between the outer door and interior of a building; a lobby or a foyer. This is a computer-based training method and is provided by special instructors, away from the shop floor. It consists of simulators that help to train by creating a miniature version of the actual situation. CASE STUDY: Study of some real-life problems that happened in the past. Trainees are asked to resolve these past problems through alternative solutions. This teaches the trainees that there is no single solution to a problem and ways to explore the different approaches to solve any given problem. ROLE PLAYING: To understand interpersonal problems and attitude change, different roles are assigned to trainees to enact on the basis of a given situation. For example, Student I is the CEO, Student II is the HR Manager, Student III is the trade union leader, Student IV is a worker and Student V a consultant. Given these roles, students may be asked to try and enter into a Wage Agreement. SENSITIVITY TRAINING: In a formal and unstructured set-up, trainees sit around a table and discuss various issues, express their opinions on said issues and favour or criticise the opinions expressed by others. This type of training leads to: i. Awareness about own behaviour and how others perceive it. ii. Increased sensitivity to the behaviour of others. iii. Better interpretation of body language. iv. Insight into group functioning and inter-group interactions. MANAGEMENT GAMES Trainees are divided into teams to compete against each other in a simulated marketplace. As a team, they have to take decisions regarding the quantity of production, quantity of inventory, advertising budget, etc. They also learn to face the effects of decisions taken by competitors, on their own sales. This helps to develop problem-solving skills, planning skills, decision-making and leadership skills as well as teamwork. MANAGEMENT DEVELOPMENT PROGRAMME (MDP): A systematic process to facilitate the overall growth of human resources, where knowledge is not only gained but applied as well. IMPORTANCE OF MDPS: 1. Development of executive talent. 2. Improvement in human capital quality helps the organisation to grow in size and attain the longterm goals. 3. A low-cost investment that results in higher returns. 4. Results in in-house trained and developed suitable managers. PROCESS OF MDP: Step 1 – Calculating organisational and individual needs. Step 2 – Measuring availability of human capital. Step 3 – Identifying the gap and hence, the training needs. Step 4 – Designing an effective MDP. Step 5 – Arranging appropriate resource persons. Step 6 – Implementing the MDP. Step 7 – Gathering review and feedback (for future planning). LIMITATIONS OF MDP: Results in wastage of resources if programme is not planned and implemented properly. Results in wastage if expected results are not achieved. Results in wastage if workers are unwilling to participate and learn. Results in heavy cost if trained workers leave the organisation.  TRAINING METHODS (FOR MANAGERS ONLY) ROLE SPECIFIC/SKILL-BASED TRAINING: It is the training of executives to impart skills to enable them to play various roles. It is also known as Task-based Training. It depends on the functions that the company has to perform. As customised training, unique roles of workers are identified and then, they are trained to perform those specific roles. After training, the employees become able to perform those skills that are relevant to their jobs. 1. Decision-making skills 2. Planning skills 3. Organising skills 4. Leadership skills 5. Controlling skills COMPETENCY-BASED TRAINING It is the training of executives to bring observable and measurable behaviour and attitude change. A worker’s position and roles are compared with her/his strengths and weaknesses. A specific programme is designed to enhance her/his competence or capability to perform the particular job. Once the desired skills are imparted, the competency level of the worker is improved. 1. Personal Training – Helps to develop: I. VISION II. RESULT- III. CONSTANT IV. COMMITTED, ORIENTED LEARNER HONEST WORKER 2. Leadership and Management Training – Helps to develop: I. STRATEGIC II. GOAL III. IV. THINKING. SETTING. TEAMWORK. COORDINATIO N. HR Role Specific Training – Helps to develop: I. BUSINESS II. CHANGE III. STAFFING. IV. TRAINING ACUMEN. MANAGER. AND DEVELOPMENT. HR Core Training – Helps to develop: I. II. III. TALENT IV. RESPONSIBLE STEWARDSHIP MANAGEMEN COUNSELLIN PLANNING.. T. G MEANING OF PERFORMANCE APPRAISAL Evaluating an employee’s current and past performances relative to his/her ‘performance standards’. (SMART – Specific, Measurable, Attainable, Relevant and Timely). It is assumed that the employee knows what the performance standards were, and the supervisor provides feedback and incentives to help the employee reduce their performance deficiencies. The aim is to improve performance. NATURE OF PERFORMANCE APPRAISAL 1. A systematic examination of workers’ strengths and weaknesses. 2. A continuous process. 3. A well-defined criterion is set, such as Knowledge and ability to do the work Quality and quantity of output Relations within the organisation Personal qualities. RATIONALE BEHIND PERFORMANCE APPRAISAL Answers of certain questions are to be found, such as: 1. WHAT SHOULD BE EVALUATED? The criteria must be: 2. Relevant 3. Significant 4. Practical 5. Unbiased 2. WHO SHOULD BE EVALUATED? In general, all workers must be evaluated on a routine and objective basis. But, new workers with doubtful work records must be evaluated more thoroughly.