Contents

HUMAN RESOURCE MANAGEMENTContentsHRM: Concept & Its DefinitionImportance of HRMFunctions of HRMHRM Department: Organisation & RoleHRM-HRD RelationshipHRD DefinitionHRD FunctionHRD Jobs and RolesHRM vs. HRDChallenges before HRM1Human ResourcesAre an organisations greatest assetsAll other resources get connected through employeesTo make them deliver they need to be Properly selectedProperly trainedProperly motivated2Definitions of HRMByers & Rue: HRM is the function facilitating the most effective use of people to achieve both organisational and individual goals

Michael Jucious: HRM is that field of management which deals with planning, organising & controlling the functions of procuring, developing, maintaining and utilising a labour force such that organisational & individual goals are fulfilled

3HRM isProcess of acquiring, training, appraising and compensating employees such that they are motivated to achieve both the organisational and individual goals4Importance of HRMImportance of human resources can be discussed at four levels:CorporateProfessionalSocialNationalCorporateHRM can help an enterprise in the following ways:Attracting talent through effective human resource policiesDeveloping necessary skills & attitude with trainingSecuring cooperation through motivationRetaining talent through the right policies

ProfessionalHRM helps improve quality of work life and contributes to growth in the following ways:Opportunities for personal developmentMotivating work environmentProper allocation of workHealthy relationships between individuals & groupsSocialSociety benefits from good HRM in many ways:Good employment opportunitiesDevelopment of human capitalGeneration of income & consumptionBetter lifestylesNationalDrivers of development of a countryDeliver economic growthPrimary Functions of HRMThe process of HRM consists of 4 basic functions:Acquisition of human resourcesDevelopment of human resourcesMotivation of human resourcesMaintenance of human resourcesAcquisition FunctionProcess of identifying and employing people possessing required level of skillsJob AnalysisHuman Resource Policies RecruitmentSelection

Development FunctionProcess of improving, moulding and changing the skills, knowledge and ability of an employeeEmployee TrainingManagement DevelopmentCareer DevelopmentMotivation FunctionProcess of integrating people into a work situation in a way that it encourages them to perform / deliver to the best of their abilityUnderstanding needsDesigning motivatorsMonitoringMaintenance FunctionProcess of providing employees the working conditions that help maintain their motivation and commitment to the organisationSatisfaction LevelsRetentionSecondary HRM FunctionsOrganization and job designPerformance management/ performance appraisal systemsResearch and information systems16Human Resource Management ProcessExternal EnvironmentOrganizationHR planningRecruitmentSelectionOrganizational and work designTraining and developmentPerformance reviewCompensationLabour relations17These are the key HR processes in an organization. You will note that these processes do not function in isolation: HR management functions within the culture of the organization .

And of course, the organization is impacted by its environment. By paying careful attention to these facts, an organization can recruit competent, high-performing employees who are capable of sustaining their performance over the long term. You will also see that many factors introduced in Chapter 1 (for example, globalization, technology, and demographics) directly affect all management practices, but their effect is probably greatest in the management of human resources. This is because that whatever happens to an organization ultimately influences what happens to its employees.

Human Resource PlanningAssessing FutureHuman ResourceNeedsAssessing Current Human ResourcesDeveloping aProgram to Meet Needs186Since it is important to have the right people in the right jobs at the right time, human resource planning is the process to achieve that. What the organization will do is make an assessment of the current capabilities of its employees, determine what it will need in the future, and design a program to meet those needs.Depending on the organizations objectives and strategies, demand for human resources is contingent upon demand for the organizations products or services and on the levels of productivity. After estimating total revenue, management can estimate the number and kinds of human resources needed to obtain those revenues.After it has assessed current capabilities and future needs, management can estimate future human resources shortages and over-staffing. Then, it can develop a program to match these estimates with forecasts of future labour supply.RecruitmentProcess of locating, identifying, and attracting capable candidates

197Once managers know their staffing needs, they can begin to look for capable people to fill those needs.The process to do this is called recruitment. It is a process that locates, identifies, and attracts capable candidates for the work. For many organizations, this has become a critical activity. As the business demands change, so do the skills required. And there are some skill sets that are in high demand which means organizations have to have a good plan to locate the people with the unique skills.RecruitmentSourcesInternalSearchesEmployeeReferralsEmployeeLeasingTempServicesEmploymentAgenciesAdvertisementsSchoolPlacement208But where do companies go to recruit employees? Many companies are finding new employees through the Internet. Organizations that are looking for people with a high-level of technological skills may focus their recruitment efforts by using the Internet. The web sites of organizations frequently have a link for enabling the browser to submit a resume.The source that is used should reflect the labour market, the type or level of position, and the size of the organization. Are certain recruiting sources better than others? Recent studies have demonstrated that employee referrals generally produce the best candidates. This is because current employees screen applicants before referring them. Second, current employees believe that their reputations with the firm will be reflected in the candidates that they recommend; so, they refer only those who they believe will not make them look bad. Employee referrals, however, may not generate the diversity and mix of employees that is desirable.

SelectionPurpose is to hire the person(s) best able to meet the needs of the organization

2110After the completion of the recruitment process, the manager needs to decide who to hire. Selection is essentially both a prediction exercise and a decision-making exercise.In the prediction exercise, the manager is predicting which applicant will be successful on the job is hired.The manager is also undertaking a decision-making exercise--choosing among choices.It is important to always keep in mind that the manager is selecting the person who can best meet the needs of the organization.Familiarization to Organization and its ValuesImproved Success On the JobMinimizes TurnoverOrientationProcess to introduce new employees to organizationFamiliarize new employee to job and work unitHelp employee to understand values, beliefs, and acceptable behaviours

2217Besides having the requisite knowledge, skills, and abilities to perform on the job, new hires must be socialized to the organizations culture (orientation) and trained to do the job (training). Orientation is a process whose major objectives are to reduce the anxiety level that all new employees feel; to familiarize them with the job, the work unit, and the organization; and to embed organizational values, beliefs, and accepted behaviours.Successful orientation maximizes new hire on-the-job success and minimizes turnover. Training and DevelopmentLearning experience that seeks relatively permanent changeInvolves changing skills, knowledge, attitudes or behavioursTraining tends to be done for current jobDevelop usually means acquiring skills for future work23Training and development is important to ensure that people continue to learn skills, etc. to help the company be successful. Employee training is a learning experience that seeks a relatively permanent change in employees such that their ability to perform at their current job improves. This may mean changing what employees know, how they work, or their attitudes toward their jobs, co-workers, managers, and the organization.

Management is responsible for deciding when employees are in need of training and development and what form it should take.Employee TrainingWhat deficiencies, if any,does job holder have in terms of skills, knowledge, abilities, and behaviours?What behaviours are necessary?Is there a need fortraining?What arethe strategicgoals of theorganization?What tasks mustbe completedto achievegoals?2418However, before any training takes place, and organization should determine is training is the appropriate intervention.Managers can be alerted to training needs by numerous signals: for instance, productivity related signals like decreases in output and quality or increases in accidents; and, future elements like jobs that have been redesigned or technological breakthroughs. Most training takes place on the job. Such training is convenient and cost effective. But, on-the-job training can disrupt the workplace, and some skills are too complex to learn on the job. In such cases, training should take place outside of the work setting.

Performance ManagementIntegration of management practices that includes a formal review of employee performanceHow often should this take place? Includes establishing performance standards and reviewing the performanceMeans to ensure organizational goals are being met2520It is important for managers to help their employees achieve the results expected. This is done through managing the performance of the employees the manager is responsible for. In managing performance, the manager identifies and communicates the expected performance standards and then evaluates or measures the performance against the standard.

There are a variety of ways to assess a persons performance which we will review next. MultipersonGraphicRating ScalesCriticalIncidentsWrittenEssayBARSPerformance Review Methods 360-DegreeReviewMBO2621There are several ways in which managers can evaluate or measure the performance of their employees.Written essays that describe an employees performance and suggestions for improvement require no complex forms or extensive training. But a good or bad appraisal may depend as much on the writing skill of a manager as on the actual performance of an employee. With the critical incidents method, the appraiser writes down what an employee did that was especially productive or counterproductive. The key is to cite specific and key behaviours. With graphic rating scales, performance factors are listed such as quantity and quality of work, depth of knowledge, or initiative. The appraiser then rates each factor on an incremental scale. This method cannot provide the depth of information of essays or critical incidents, but it is less time consuming to develop and administer, and yields results that can be quantified. Behaviorally anchored rating scales BARS combine the critical incidents and graphics rating scale approaches. The appraiser rates employees on items along a continuum. The points along the scale are examples of actual on-the-job behaviour rather than general descriptions or traits. Multiperson comparisons are relative measuring devices. Group order ranking requires the rater to place employees into a particular classification, such as the top one-fifth. Individual ranking orders employees from best to worst. Paired comparisons rank each employee with all other employees and rates each as either the weaker or superior member of the pair. MBO, which was discussed in Chapter 5, assesses employees on how well they accomplish a specific set of objectives that have been determined to be critical in the successful completion of their jobs. Because MBO emphasizes ends rather than means, this method allows managers to choose the best path for achieving their goals.A 360-degreereview seeks feedback for the person being rated from a variety of sources: such as peers, supervisors, and customers. Research shows that 360-degree appraisals offer more accurate feedback, empower employees, reduce subjective factors in evaluation, and develop leadership in an organization.Compensation ManagementProcess of determining cost-effective pay structureDesigned to attract and retainProvide an incentive to work hardStructured to ensure that pay levels are perceived as fair

2723How does management decide who will get paid $12.65 an hour and who will receive $325,000 per year? The answer lies in compensation administration: the process of determining a cost-effective pay structure that attracts and retains competent employees, provides incentives for hard work, and ensures that pay levels will be perceived as fair. The primary determination of pay is the kind of job an employee performs: that is, the higher the skills, knowledge, and abilitiesand the greater the authority and responsibilitythe higher the pay. Other factors which influence employee compensation are the nature of the business, the environment surrounding the job, geographic location, and employee performance levels and seniority. Regardless of these factors, there is one other most critical factor: managements compensation philosophy. Some organizations dont pay employees any more than they have to while other organizations want to pay people above are salary levels.Factors That Influence CompensationUnionizationLevel ofCompensationand BenefitsEmployeestenure andperformanceKind of jobperformedSize ofcompanyManagementphilosophyKind ofbusinessGeographicallocationLabour- orcapital-intensiveCompanyprofitabilityFOM 9.29Robbins et al., Fundamentals of Management, 4th Canadian Edition 2005 Pearson Education Canada, Inc.Source: Management, Seventh Canadian Edition, by Stephen P. Robbins, Mary Coulter, and Robin Stuart-Kotze, page 274. Copyright 2003. Reprinted by permission of Pearson Education Canada Inc. 28There are a number of factors that can influenced compensation levels. This slide (Exhibit 9-7) displays the various factors. For example, private-sector jobs typically provide higher rates of pay than comparable positions in public and not-for-profit jobs. Likewise, employees who have been with an organization for a long time may have had a salary increase each year.

Because skill levels tend to affect work efficiency and effectiveness, many organizations have implemented skill-based or competency-based pay systems. These types of systems reward employees for the job skills and competencies they can demonstrate. These systems also tend to mesh nicely with the changing nature of work and todays work environment.

But the most critical factor is managements compensation philosophy. Employee BenefitsIndirect financial rewardsDesigned to enrich employees lives

2924In addition to the salary or wage an employee receives, the employee will usually have some employee benefits. As indirect financial rewards intended to enrich employees lives, todays employee benefits programs seek to provide something that each employee can value. Some of the benefits are required by legislation such as Canada Pension Plan while others are voluntarily provided such as life insurance coverage. The scope of these benefits varies considerably.Health and SafetyEmployers are responsible for ensuring a healthy and safe work environmentEmployees are required for follow instructions and any legal requirementsWorkplace violence is a growing concern30Both employers and employees have an obligation to follow health and safety legislation.

There is a growing concern for safety on the job because no organization is immune from workplace violence. Companies want to prevent violence from occurring. But because the circumstances of each incident are different, a specific plan of action for companies is difficult to detail. However, several suggestions can be made. First, the organization must develop a plan to deal with the issue. Furthermore, organizations must train managers to identify troubled employees before the problem results in violence. Organizations should also implement stronger security measures.

Labour RelationsRelationship between union and employerUnion functions as the voice of employeesCollective bargaining is a process to negotiate terms and conditions of employmentBargaining produces a written document called a collective agreement31Labour relations refers to the relationship that exists between an organization and a union. It has evolved over time and is governed by legislation.

The role of the union is to be the voice of employees, particularly during collective bargaining. Collective bargaining produces a collective agreement which is a legal document outlining the terms and conditions of employment.

If an employee or union feels that the company is violating the collective agreement, a grievance may be initiated.Organisation of HRM DepartmentRole of HR ManagerJob Design / Job AnalysisHuman Resource PlanningRecruitment & SelectionTraining & DevelopmentPerformance AppraisalCompensation / BenefitsPersonnel Information SystemsEmployee Motivation / AssistanceRelationship Between HRM and HRDHuman resource management (HRM) encompasses many functionsHuman resource development (HRD) is just one of the functions within HRM34Definition of HRDA set of systematic and planned activities designed by an organization to provide its members with the necessary skills to meet current and future job demands.35HRD is too important to be left to amateursHRD should be a revenue producer, not a revenue userHRD should be a central part of companyYou need to be able to talk MONEY

36HRD FunctionsTraining and development (T&D)Organizational developmentCareer development

37Training and Development (T&D)Training improving the knowledge, skills and attitudes of employees for the short-term, particular to a specific job or task e.g.,Employee orientationSkills & technical trainingCoachingCounseling38Training and Development (T&D)Development preparing for future responsibilities, while increasing the capacity to perform at a current jobManagement trainingSupervisor development39Organizational DevelopmentThe process of improving an organizations effectiveness and members well-being through the application of behavioral science conceptsFocuses on both macro- and micro-levelsHRD plays the role of a change agent40Career DevelopmentOngoing process by which individuals progress through series of changes until they achieve their personal level of maximum achievement.Career planningCareer management41Critical HRD IssuesStrategic management and HRDThe supervisors role in HRDOrganizational structure of HRD42Strategic Management & HRDStrategic management aims to ensure organizational effectiveness for the foreseeable future e.g., maximizing profits in the next 3 to 5 yearsHRD aims to get managers and workers ready for new products, procedures, and materials43Supervisors Role in HRDImplements HRD programs and proceduresOn-the-job training (OJT)Coaching/mentoring/counselingCareer and employee developmentA front-line participant in HRD44Organizational Structure of HRD DepartmentsDepends on company size, industry and maturityNo single structure usedDepends in large part on how well the HRD manager becomes an institutional part of the company i.e., a revenue contributor, not just a revenue user45HRD Organization in a Large Company

46Sample HRD Jobs/RolesExecutive/ManagerHR Strategic AdvisorHR Systems Designer/DeveloperOrganization Change AgentOrganization Design ConsultantLearning Program Specialist47Instructor/FacilitatorIndividual Development and Career CounselorPerformance Consultant (Coach)ResearcherContd48HR Manager RoleIntegrates HRD with organizational goals and strategiesPromotes HRD as a profit enhancerTailors HRD to corporate needs and budgetInstitutionalizes performance enhancement49HR Strategic Advisor RoleConsults with corporate strategic thinkersHelps to articulate goals and strategiesDevelops HR plansDevelops strategic planning education and training programs50HR Systems Designer/DeveloperAssists HR manager in the design and development of HR systemsDesigns HR programsDevelops intervention strategiesPlans HR implementation actions51Organization Change AgentDevelops more efficient work teamsImproves quality managementImplements intervention strategiesDevelops change reports

52Organization Design ConsultantDesigns work systemsDevelops effective alternative work designsImplements changed systems53Learning Program SpecialistIdentifies needs of learnersDevelops and designs learning programsPrepares learning materials and learning aidsDevelops program objectives, lesson plans, and strategies54Instructor/FacilitatorPresents learning materialsLeads and facilitates structured learning experiencesSelects appropriate instructional methods and techniquesDelivers instruction55Individual Development and Career CounselorAssists individuals in career planningDevelops individual assessmentsFacilitates career workshopsProvides career guidance56Performance Consultant (Coach)Advises line management on appropriate interventions to improve individual and group performanceProvides intervention strategiesDevelops and provides coaching designsImplements coaching activities57ResearcherAssesses HRD practices and programsDetermines HRD program effectiveness Develops requirements for changing HRD programs to address current and future problems

58Challenges for HRDChanging workforce demographicsCompeting in global economyEliminating the skills gapNeed for lifelong learningNeed for organizational learning59Competing in the Global EconomyNew technologiesNeed for more skilled and educated workersCultural sensitivity requiredTeam involvementProblem solvingBetter communications skills60Need for Lifelong LearningOrganizations changeTechnologies changeProducts changeProcesses changePEOPLE must change!!61A Framework for the HRD ProcessHRD efforts should use the following four phases (or stages):Needs assessmentDesignImplementationEvaluation62Training & HRD Process Model

63Needs Assessment PhaseEstablishing HRD prioritiesDefining specific training and objectivesEstablishing evaluation criteria64Design PhaseSelecting who delivers programSelecting and developing program contentScheduling the training program65Implementation PhaseImplementing or delivering the program66Evaluation PhaseDetermining program effectiveness e.g.,Keep or change providers?Offer it again?What are the true costs?Can we do it another way?

67HRM vs. HRDHRM is the process of effectively employing people in an organisationHRD is the process of training & development of employees to make them effectiveHRD is an important subset of HRMChallenges before HRMGlobalisation (More productivity)Technological Trends (New skill set)Increasing Service Sector (Customer Interface)Working Trends (9 to 9!)Demographic Trends (Young India!)