Unit 1

Human Resource Function

Important Definitions

 Organization
o A group consisting of people with formally assigned roles who work together to achieve the
organization’s goals.
 Manager
o Someone who is responsible for accomplishing the organization’s goals, and who does so by managing
the efforts of the organization’s people.
 Managing
o To perform five basic functions: planning, organizing, staffing, leading, and controlling.
 Management Process
o Planning - Establishing goals and standards; developing rules and procedures; developing plans and
forecasts.
o Organizing - Giving each subordinate a specific task; establishing departments; delegating authority to
subordinates; establishing channels of authority and communication; coordinating the work of
subordinates
o Staffing - Determining what type of people should be hired; recruiting prospective employees; selecting
employees; setting performance standards; compensating employees; evaluating performance;
counselling employees; training and developing employees
o Leading - Getting others to get the job done; maintaining morale; motivating subordinates.
o Controlling - Setting standards such as sales quotas, quality standards, or production levels; checking
to see how actual performance compares with these standards; taking corrective action as needed.
 HRM
o The process of acquiring, training, appraising, and compensating employees, and of attending to their
labour relations, health and safety, and fairness concerns.

Personnel Aspect of HRM

 Conducting job analyses (determining the nature of each employee’s job).

 Planning labour needs and recruiting job candidates.
 Selecting job candidates.
 Orienting and training new employees.
 Managing wages and salaries (compensating employees).
 Providing incentives and benefits.
 Appraising performance.
 Communicating (interviewing, counselling, disciplining).
 Training employees, and developing managers.
  Building employee relations and engagement.

What a Manager Should Know About

 Equal opportunity and affirmative action.

 Employee health and safety.
 Handling grievances and labour relations.

Why is Human Resource Management Important to All Managers?

 Avoid Personnel Mistakes

o Having a command of this knowledge will help you avoid the personnel mistakes you don’t want to
make while managing.
 Improving Profits And Performance
o More important, it can help ensure that you get results—through people.
o Human resource management methods can help any line manager/supervisor boost his or her team’s
and company’s levels of engagement, profits and performance.
 You May Spend Some Time as an HR Manager
o You might spend time as a human resource manager.
o Most top human resource executives do have prior human resource experience.
o About 80% of those in one survey worked their way up within HR.
 HR for Small Businesses
o You may well end up as your own human resource manager.
o Small firms generally don’t have the critical mass required for a full-time human resource manager
o The owner and his or her other managers handle tasks such as signing employees on.
o Gaining a command of the techniques should help you to manage a small firm’s human resources more
effectively.

Scope of Human Resource Management

 Personnel aspect
o This is concerned with manpower planning, recruitment, selection, placement, transfer, promotion,
training and development, lay off and retrenchment, remuneration, incentives, productivity, etc.
 Welfare aspect
o It deals with working conditions and amenities such as canteens, creches, rest and lunch rooms, housing,
transport, medical assistance, education, health and safety, recreation facilities, etc.
 Industrial relations aspect
o This covers union-management relations, joint consultation, collective bargaining, grievance and
disciplinary procedures, settlement of disputes, etc.

Objectives of HRM

 To help the organisation reach its goals

 o HR department, like other departments in an organisation, exists to achieve the goals of the organisation
first and if it does not meet this purpose, HR department will wither and die.
 To employ the skills and abilities of the workforce efficiently
o The primary purpose of HRM is to make people’s strengths productive and to benefit customers,
stockholders and employees.
 To provide the organisation with well-trained and well-motivated employees
o HRM requires that employees be motivated to exert their maximum efforts, that their performance be
evaluated properly for results and that they be remunerated on the basis of their contributions to the
organisation.
 To increase to the fullest the employee’s job satisfaction and self-actualisation
o It tries to prompt and stimulate every employee to realise his potential. To this end suitable programmes
have to be designed aimed at improving the quality of work life (QWL).
 To develop and maintain a quality of work life
o It makes employment in the organisation a desirable, personal and social, situation. Without
improvement in the quality of work life, it is difficult to improve organisational performance.
 To communicate HR policies to all employees
o It is the responsibility of HRM to communicate in the fullest possible sense; tapping ideas, opinions
and feelings of customers, non-customers, regulators and other external public as well as understanding
the views of internal human resources.
 To be ethically and socially responsive to the needs of society
o HRM must ensure that organisations manage human resource in an ethical and socially responsible
manner through ensuring compliance with legal and ethical standards.

HR Manager Certification

 Managers have at least two testing processes to achieve certification.

o The oldest is administered by the HR Certification Institute (HRCI), an independent certifying
organization for human resource professionals.
o Starting in 2015, SHRM began offering its own competency and knowledge-based testing and
certifications, for SHRM Certified Professionals, and SHRM Senior Certified Professionals, based on
its own certification exams.
Human Resource Philosophy

A Brief History

 Ancient armies and organized efforts always required attracting, selecting, training, and motivating workers.
 But personnel tasks like these were mostly just part of every manager’s job, something that lasted in most
countries until the late 1800s.
 At that time, labour problems began arising in many of the post–industrial revolution’s new factories.
 Soon employers were setting up welfare offices and welfare secretaries to manage activities like factory
washrooms, and safety bureaus to oversee plant safety.
 By 1900, employers set up the first hiring offices, training programs, and factory schools.
 In these early firms, personnel managers took over hiring and firing from supervisors, ran the payroll
departments, and administered benefits plans.
 As expertise in testing emerged, personnel departments played a greater role in employee selection and training.
 New union laws in the 1930s added Helping the employer deal with unions to personnel’s tasks.
 New equal employment laws in the 1960s made employers more reliant on personnel management to avoid
discrimination claims.
 By the 1970s globalization made gaining a competitive edge through engaged employees—and therefore
personnel management—increasingly important.
 Today economic and demographic make finding, hiring, and motivating employees more challenging, while
higher tech and service jobs means employers must excel at managing employees’ knowledge, skills, and
expertise through aptly renamed human resource management departments.

HR Philosophy

 Pervasive force
o HRM is pervasive in nature. It is present in all enterprises. It permeates all levels of management in an
organisation.
 Action oriented
o HRM focuses attention on action, rather than on record keeping, written procedures or rules. The
problems of employees at work are solved through rational policies.
 Individually oriented
o It tries to help employees develop their potential fully. It encourages them to give their best to the
organisation. It motivates employees through a systematic process of recruitment, selection, training
and development coupled with fair wage policies.
 People oriented
o HRM is all about people at work, both as individuals and groups. It tries to put people on assigned jobs
in order to produce good results. The resultant gains are used to reward people and motivate them
toward further improvements in productivity.
 Future-oriented
o Effective HRM helps an organisation meet its goals in the future by providing for competent and well-
motivated employees.
  Development oriented
o HRM intends to develop the full potential of employees. The reward structure is tuned to the needs of
employees. Training is offered to sharpen and improve their skills. Employees are rotated on various
jobs so that they gain experience and exposure. Every attempt is made to use their talents fully in the
service of organisational goals.
 Integrating mechanism
o HRM tries to build and maintain cordial relations between people working at various levels in the
organisation. In short, it tries to integrate human assets in the best possible manner in the service of an
organisation.
 Comprehensive function
o HRM is, to some extent, concerned with any organisational decision which has an impact on the
workforce or the potential workforce.
 Auxiliary service
o HR departments exist to assist and advise the line or operating managers to do their personnel work
more effectively. HR manager is a specialist advisor. It is a staff function.
 Inter-disciplinary function
o HRM is a multi-disciplinary activity, utilising knowledge and inputs drawn from psychology,
sociology, anthropology, economics, etc.
 Continuous function
o According to Terry, HRM is not a one-shot deal. It cannot be practised only one hour each day or one
day a week. It requires a constant alertness and awareness of human relations and their importance in
every day operations.

HR Philosophy in the Present Day

 Technical expertise is important, but at the end of the day, people’s actions are always based in part on the basic
assumptions they make, and this is especially true in regard to human resource management.
 There’s no doubt that you will bring to your job an initial philosophy based on your experiences, education,
values, assumptions, and background.
 But your philosophy doesn’t have to be set in stone.
 It should evolve as you accumulate knowledge and experiences.
 One of the things moulding your own philosophy is that of your organization’s top management.
 While it may or may not be stated, it is usually communicated by the managers’ actions and permeates every
level and department in the organization.
Changing Environments of HRM

Introduction

 The early part of the century saw a concern for improved efficiency through careful design of work.
 During the middle part of the century emphasis shifted to the availability of managerial personnel and employee
productivity.
 Recent decades have focused on the demand for technical personnel, responses to new legislation and
governmental regulations, increased concern for the quality of working life, total quality management and a
renewed emphasis on productivity.

Growth in India

 Early Phase
o Though it is said that P/HRM a discipline is of recent growth, it has had its origin dating back to 1800
B.C.
o The Chinese, as early as 1650 B.C. had originated the principle of division of labour and they Human
Resource Function understood labour turnover even in 400 B.C.
o The span of management and related concepts of organisation were well understood by Moses around
1250 B.C. and the Chaldeans had incentive wage plans around 400 B.C.
o Kautilya, in India in Arthashastra made reference to various concepts like job analysis, selection
procedures, executive development, incentive system and performance appraisal.
 Legal Phase
o The early roots of HRM in India could be traced back to the period after 1920.
o The Royal commission on labour in 1931 suggested the appointment of labour officer to protect
workers’ interests and act as a spokesperson of labour.
o After Independence, The Factories Act 1948, made it obligatory for factories employing 500 or more
workers.
o Meanwhile two professional bodies, the Indian Institute of Personnel Management (IIPM) Kolkata and
the National Institute of Labour Management (NILM) Mumbai have come into existence in 1950s.
 Welfare Phase
o During the 1960s the scope of personnel function has expanded a bit, covering labour welfare,
participative management, industrial harmony, etc.
o In this period, the human relations movement of the West had also had its impact on Indian
organisations.
o The legalistic preoccupations slowly gave way to harmonious industrial relations and good HR
practices.
 Development Phase
o In 1960s and 70s the HR professionals focused more on developmental aspects of human resources.
o The emphasis was on striking a harmonious balance between employee demands and organisational
requirements.
 o HRD has come to occupy a centre stage and a focal point of discussion in seminars, conferences and
academic meets.
o The two professional bodies, IIPM and NILM, were merged to form the National Institute of Personnel
Management (NIPM) at Kolkata.
 The Onwards Journey
o During the 1990's, organisational restructuring and cost cutting efforts have started in a big way-thanks
to the pressures of liberalisation, privatisation and globalisation (LPG era) forcing companies to focus
attention on employee capabilities product/service quality, speedy response, customer satisfaction etc.
o Changing demographics and increasing shortages of workers with the requisite knowledge, skills and
ability have grown in importance.
o The issue of workforce diversity has assumed greater importance-in view of the cultural, religious
social, regional backgrounds of workers, especially in global sized companies such as Reliance,
Ranbaxy, Asian Paints, TISCO, etc.
Strategic HRM

Introduction

 Strategic Human Resource Management

o Formulating and executing human resource policies and practices that produce the employee
competencies and behaviours the company needs to achieve its strategic aims.
 SHRM also says human resource managers must have command of the basic knowledge in the functional areas
of HR.
 The functional areas are -
o Talent Acquisition and Retention
o Employee Engagement
o Learning and Development
o Total Rewards
o Structure of HR Function
o Organizational Effectiveness and Development
o Workforce Management
o Employee Relations
o Technology and Data
o HR in the Global Context
o Diversity and Inclusion
o Risk Management
o Corporate Social Responsibility
o US Employment Law and Regulations
o Business and HR Strategy

The Management Planning Process

 The basic management planning process consists of five steps –

o setting objectives
o making basic planning forecasts
o reviewing alternative courses of action
o evaluating which options are best
o choosing and implementing your plan
 A plan shows the course of action for getting from where you are to the goal. Planning is always goal-directed.
 In companies, it is traditional to view the goals from the top of the firm down to front-line employees as a chain
or hierarchy of goals.
o At the top, the president sets long-term or “strategic” goals
o His or her vice presidents then set goals for their units that flow from, and make sense in terms of
accomplishing, the president’s goal
o Then their own subordinates set goals, and so on down the chain.
  Policies and procedures provide day-to-day guidance employees need to do their jobs in a manner that is
consistent with the company’s plans and goals. Policies set broad guidelines delineating how employees should
act.
 Procedures spell out what to do if a specific situation arises.

What is Strategic Planning?

 A strategic plan is the company’s overall plan for how it will match its internal strengths and weaknesses with
its external opportunities and threats in order to maintain a competitive position.
 A strategy is a course of action.
 Strategic management is the process of identifying and executing the organization’s strategic plan by matching
the company’s capabilities with the demands of its environment.

The Strategic Management Process

 Step 1 – Define the current business

o What business are we in?
o Here the manager defines the company’s current business.
o What products do we sell, where do we sell them, and how do our products or services differ from our
competitors’?
 Step 2 – Perform internal and external audits
o Are we in the right business given our strengths and weaknesses and the challenges that we face?
o To answer this, managers audit or study both the firm’s environment and the firm’s internal strengths
and weaknesses.
o The environmental scan worksheet is a guide for compiling information about the company’s
environment.
o The SWOT chart in is widely used.
o This audit may also include analysing the so-called PEST factors.
 Political factors such as government regulations and employment laws
 Economic factors including unemployment and economic growth
 Social factors such as changing demographics and health consciousness trends
 Technological factors such as use of social media and digitalization
 Step 3 – Formulate a new direction
o It is to decide what should our new business be, in terms of what we sell, where we will sell it, and how
our products or services differ from competitors’ products and services?
 o Some managers express the essence of their new business with a vision statement.
o A vision statement is a general statement of the firm’s intended direction
o It shows, in broad terms - what we want to become.
o Whereas the vision statement describes in broad terms what the business should be, the company’s
mission statement summarizes what the company’s main tasks are today.
 Step 4 – Translate mission into strategic goals
o The manager’s next step is to translate the desired new direction into strategic goals.
 Step 5 – Formulate strategies to achieve the strategic goals
o The manager chooses strategies—courses of action—that will enable the company to achieve its
strategic goals.
 Step 6 – Implement the strategies
o Strategy execution, means translating the strategies into action.
o This means actually hiring (or firing) people, building (or closing) plants, and adding (or eliminating)
products and product lines.
 Step 7 – Evaluate performance
o The manager evaluates the results of his or her planning and execution.
o Things don’t always turn out as planned.
o All managers should periodically assess the progress of their strategic decisions.

Types of Strategies

 Corporate Strategy
o The corporate-level strategy identifies the portfolio of businesses that, in total, comprise the company
and how these businesses relate to each other.
o With a concentration (single-business) corporate strategy, the company offers one product or product
line, usually in one market.
o A diversification corporate strategy means the firm will expand by adding new product lines.
o A vertical integration strategy means the firm expands by, perhaps, producing its own raw materials, or
selling its products directly.
o With a consolidation strategy, the company reduces its size.
o With geographic expansion, the company grows by entering new territorial markets, for instance, by
taking the business abroad.
 Competitive Strategy
o A competitive strategy identifies how to build and strengthen the business unit’s long-term competitive
position in the marketplace.
o Managers build their competitive strategies around their businesses’ competitive advantages.
o Competitive advantage means any factors that allow a company to differentiate its product or service
from those of its competitors to increase market share.
 Functional Strategy
o A strategy that identifies the broad activities that each department will pursue in order to help the
business accomplish its competitive goals.
Strategic Human Resource Management Tools

 Strategy Map
o The strategy map summarizes how each department’s performance contributes to achieving the
company’s overall strategic goals.
o It helps the manager and each employee visualize and understand the role his or her department plays
in achieving the company’s strategic plan.
 The HR Scorecard
o Many employers quantify and computerize the strategy map’s activities.
o It refers to a process for assigning financial and nonfinancial goals or metrics to the human resource
management–related strategy-map chain of activities required for achieving the company’s strategic
aims.
o Managers use special scorecard software to facilitate this.
o The computerized scorecard process helps the manager quantify the relationships between
 the HR activities (amount of testing, training, and so forth)
 the resulting employee behaviours (customer service, for instance
 the resulting firm-wide strategic outcomes and performance (such as customer satisfaction)
 Digital Dashboard
o A digital dashboard presents the manager with desktop graphs and charts, showing a computerized
picture of how the company is doing on all the metrics from the HR scorecard process.

HR Metrics, Benchmarking, and Data Analytics

 HR Metrics
o The quantitative gauge of a human resource management activity, such as employee turnover, hours of
training per employee, or qualified applicants per position.
 Improving Performance through HRIS
o Many employers do track and analyse such data with the help of computerized applicant tracking
systems (ATS).
o ATS suppliers include Authoria, PeopleFilter, Wonderlic, eContinuum, and PeopleClick
o Analysing recruitment effectiveness using ATS software involves two steps:
 First, decide how to measure the performance of new hires.
 Next, the applicant tracking system enables the employer to track the recruitment sources that
correlate with superior hires.
 Benchmarking
o Just measuring how one is doing is rarely enough for deciding what to change.
o Instead, most managers want to know “How are we doing?” in relation to something.
o Similarly, the manager may want to benchmark the results—compare high-performing companies’
results to your own, to understand what makes them better.
o The Society for Human Resource Management’s (SHRM’s) benchmarking service enables employers
to compare their own HR metrics with those of other companies.
 o The employer can request comparable (benchmark) figures not just by industry, but by employer size,
company revenue, and geographic region.
 Strategy and Strategy-based Metrics
o Metrics that specifically focus on measuring the activities that contribute to achieving a company’s
strategic aims.
 HR Audits
o An analysis by which an organization measures where it currently stands and determines what it has
to accomplish to improve its HR functions.
o HR audits vary in scope. Typical areas audited include:
 Roles and headcount
 Compliance with federal, state, and local employment-related legislation
 Recruitment and selection
 Compensation
 Employee relations
 Mandated benefits
 Group benefits
 Payroll
 Documentation and record keeping
 Training and development
 Employee communications
 Termination and transition policies and practices

High-Performance Working Systems

 One reason to measure, benchmark, and scientifically analyse HR practices is to promote high-performance
work practices.
 A high-performance work system (HPWS) is a set of human resource management policies and practices that
together produce superior employee performance.
 Studies show that high-performance work systems’ policies and practices do differ from less productive ones –
o First, it shows examples of human resource metrics such as hours of training per employee, or qualified
applicants per position.
o Second, it illustrates what employers must do to have high-performance systems.
o Third, shows that high-performance work practices usually aspire to encourage employee involvement
and self-management.

Employee Engagement and Performance

 Employee engagement refers to being psychologically involved in, connected to, and committed to getting one’s
jobs done.
 Employee engagement is important because it drives performance and productivity.
 What can managers do to increase employee engagement?
o One important activity is providing supportive supervision.
o Other steps managers can take to foster engagement include making sure employees –
 understand how their departments contribute to the company’s success
 see how their efforts contribute to achieving the company’s goals
 get a sense of accomplishment from working at the firm
 are highly involved—as when working in self-managing teams.
o Employers should also hold managers responsible for employee engagement.
Using HRM to Attain Competitive Advantage

 Competitive advantage refers to the ability of an organisation to formulate strategies to exploit rewarding
opportunities, thereby maximising its return on investment.
 Competitive advantage occurs if customers perceive that they receive value from their transaction with an
organisation.
 This requires single-minded focus on customer needs and expectations.
 To achieve this, the organisation needs to tune its policies in line with changing customer's requirements.
 The second principle of competitive advantage derives from offering a product or service that your competitor
cannot easily imitate or copy.
 An organisation should always try to be unique in its industry along dimensions that are widely valued by
customers.
 For example –
o Apple stresses its computers’ usability
o Mercedes Benz stresses reliability and quality
o Maruti emphasises affordability of its lower-end car Maruti 800.
 In order to enjoy the competitive advantage, the firm should be a cost-leader, delivering value for money.
 It must have a committed and competent workforce.
 Workers are most productive if –
o they are loyal to the company, informed about its mission, strategic and current levels of success
o involved in teams which collectively decide how things are to be done
o are trusted to take the right decisions rather than be controlled at every stage by managers above them
 A good team of competent and committed employees will deliver the goals if they are involved in all important
activities and are encouraged to develop goals that they are supposed to achieve.
 In recent years, a new line of thinking has emerged to support this view-known as strategic human resources
management (SHRM).
Trends in HRM

Workforce Demographics and Dynamics Trends

 The composition of the workforce will continue to change over the next few years; specifically, it will continue
to become more diverse with more women, minority group members, and older workers in the workforce.
 Many employers call “the aging workforce” a big problem,
o The problem is that there aren’t enough younger workers to replace the projected number of baby
boom–era older workers retiring.
o Many employers are bringing retirees back or just trying to keep them from leaving.
 Many firms are shifting to non-traditional workers.
o Non-traditional workers are those who hold multiple jobs, or who are temporary or part-time workers
or those working in alternative arrangements (such as a mother–daughter team sharing one clerical job).
o Others serve as independent contractors for specific projects.
 Millennial Workforce
o Some employers find millennials or generation Y employees a challenge to deal with.
o On the other hand, millennials also bring a vast array of skills.
o They’ve grown up with social media and are expert at collaborating online.
o And, having grown up with Apple and Google, they’re comfortable with innovation.

Trends in How People Work

 On-demand Workers
o Today, in more and more companies like Uber, Elance, and Airbnb, employees aren’t employees at all,
but are freelancers and independent contractors who work when they can on what they want to work
on, when the company needs them.
o Companies that rely on freelancers, consultants, and other such non-traditional employees will need to
create personnel policies on matters like compensation for these nonemployees, and become more
expert as talent brokers in matching specific workers with specific tasks that need to be done.
o Some people who work for on-demand services say the sometimes, menial jobs can make them feel
somewhat disrespected.
o One critic says such work is unpredictable and insecure.
 Human Capital
o One big consequence of such demographic and workforce trends is employers’ growing emphasis on
their workers’ knowledge, education, training, skills, and expertise—in other words on their human
capital.
o Service jobs like consultant and lawyer always emphasized education and knowledge.
o And today’s proliferation of IT-related businesses like Google and Facebook of course demands high
levels of human capital.
o The big change is that even traditional manufacturing jobs like assembler are increasingly high-tech.
o For managers, the challenge here is that they have to manage such workers differently.
 o For example, empowering workers to make more decisions presumes you’ve selected, trained, and
rewarded them to make more decisions themselves.
o Employers therefore need new human resource management practices to select, train, and engage these
employees.

Globalization Trends

 Globalization refers to companies extending their sales, ownership, and/or manufacturing to new markets
abroad.
 Free trade areas—agreements that reduce tariffs and barriers among trading partners—further encourage
international trade.
 Globalization has boomed for the past 50 or so years.
 Globalization vastly increased international competition.
o More globalization meant more competition, and more competition meant more pressure to be world
class to lower costs, to make employees more productive, and to do things better and less expensively.
 As multinational companies jockey for position, many transfer operations abroad, not just to seek cheaper labour
but to tap into new markets.
 Managing the people aspects of globalization is a big task for any company that expands abroad and for its HR
managers.

Economic Trends

 Although globalization supported a growing global economy, the past 10 or so years were difficult
economically.
 Economic trends are pointing up today, and hopefully they will continue to do so.
 Labour force trends –
o Complicating all this is the fact that the labour force in America is growing more slowly than expected.
o Mostly because with baby boomers aging, the labour force participation rate is declining.
 Unbalanced labour force –
o In some occupations (such as high-tech) unemployment rates are low, while in others unemployment
rates are still very high
o Recruiters in many companies can’t find candidates, while in others there’s a wealth of candidates
o Many people working today are in jobs below their expertise
o Slow growth and labour unbalances mean more pressure on employers to get the best efforts from their
employees

Technological Trends

 Five main types of digital technologies are driving this transfer of functionality from HR professionals to
automation.
 Employers increasingly use social media tools such as Twitter, Facebook, and LinkedIn to recruit new
employees.
  Employers use new mobile applications, for instance, to monitor employee location and to provide digital photos
at the facility clock-in location to identify workers.
 The feedback, fun, and objectives inherent in gaming support many new training applications, and websites
such as Knack, Gild, and True Office enable employers to inject gaming features into training, performance
appraisal, and recruiting.
 Cloud computing and more intuitive user interfaces enable employers to monitor and report on things like a
team’s goal attainment and to provide real-time evaluative feedback.
 Finally, data analytics basically means using statistical techniques, algorithms, and problem-solving to identify
relationships among data for the purpose of solving particular problems.

Distributed HR and New HRM

 More and more human resource management tasks are now being redistributed from a central HR department
to the company’s employees and line managers, thanks to digital technologies like mobile phones and social
media.
 For example, employees at Washington-based LivingSocial use a digital tool called Rypple to comment on each
other’s work. LivingSocial then uses these comments as an input to its formal employee appraisals.
 Some experts say that if current trends continue, many aspects of HR and talent management will become fully
embedded in how work gets done throughout an organization [distributed], thereby becoming an everyday part
of doing business.

HR and Performance

 Employers also expect their human resource manager to spearhead employee performance-improvement efforts.
 Here they can apply three levers.
o The first is the HR department lever. The HR manager ensures that the human resource management
function is delivering services efficiently.
o The second is the employee costs lever.
o The third is the strategic results lever.
 HR and Performance Management
o Improving performance requires measuring what you are doing.
o Human resource managers use performance measures to validate claims like these.
 HR and Evidence Based Management
o Basing decisions on such evidence is the heart of evidence-based human resource management.
o This is the use of data, facts, analytics, scientific rigor, critical evaluation, and critically evaluated
research/case studies to support human resource management proposals, decisions, practices, and
conclusions.
o The evidence may come from –
 Actual measurements
 Existing data
 Published research studies
o High Performance Work Systems
  Sometimes, companies translate their findings into what management gurus call high-
performance work systems, sets of human resource management practices that together produce
superior employee performance.
 HR and Adding Value
o The bottom line is that today’s employers want their human resource managers to add value by boosting
profits and performance.
o Adding value means helping the firm and its employees improve in a measurable way as a result of the
human resource manager’s actions.

HR and Performance and Sustainability

 In a world where sea levels are rising, glaciers are crumbling, and people increasingly view financial inequity
as offensive, more and more people say that businesses can’t just measure performance in terms of maximizing
profits.
 They argue that companies’ efforts should be sustainable, by which they mean judged not just on profits, but on
their environmental and social performance as well.

HR and Employee Engagement

 Employee engagement refers to being psychologically involved in, connected to, and committed to getting one’s
jobs done.
 Engaged employees experience a high level of connectivity with their work tasks, and therefore work hard to
accomplish their task-related goals.
 Employee engagement is important because it drives performance.
Organisation of HR departments: Line and staff functions and Role of HR Managers

Line and Staff Aspects of HRM

 Authority
o The right to make decisions, direct others’ work, and give orders.
 Line Authority
o Traditionally gives managers the right to issue orders to other managers or employees.
o Line authority therefore creates a superior (order giver)–subordinate (order receiver) relationship.
 Staff Authority
o Gives a manager the right to advise other managers or employees.
o It creates an advisory relationship.
 Line Manager
o A manager who is authorized to direct the work of subordinates and is responsible for accomplishing
the organization’s tasks.
o In popular usage, people tend to associate line managers with managing departments (like sales or
production) that are crucial for the company’s survival.
 Staff Manager
o A manager who assists and advises line managers.
o Staff managers generally run departments that are advisory or supportive, like purchasing and human
resource management.

HRM Department in Line Organization

 Line structure is more common in small firms.

 In this structure authority flows in a direct line from supervisors to subordinates.
 Each employee knows who his superior is and who has the authority to issue orders.
 Managers have full authority in their areas of operation and are responsible for final results.
 Line authority implies the right to give orders and to have decisions implemented.

Line Manager’s Human Resource Management Responsibilities

 Placing the right person in the right job

 Starting new employees in the organization (orientation)
 Training employees for jobs that are new to them
 Improving the job performance of each person
 Gaining creative cooperation and developing smooth working relationships
 Interpreting the company’s policies and procedures
 Controlling labour costs
 Developing the abilities of each person
 Creating and maintaining departmental morale
 Protecting employees’ health and physical conditions
The Line and Staff Structure

 The line and staff structure combines the benefits of both line organisation and functional organisation.
 Staff positions are created to assist line managers.
 Thus, the personnel department offers help and advice on personnel issues to all departments without violating
the unity of command principle.

The HR Department

 In small organizations, line managers may carry out all these personnel duties unassisted.
 But as the organization grows, line managers usually need the assistance, specialized knowledge, and advice of
a separate human resource staff.
 In larger firms, the human resource department provides such specialized assistance.

Typical Job Duties of HR Managers

 Recruiters
o Maintain contacts within the community and perhaps travel extensively to search for qualified job
applicants.
 Equal employment opportunity (EEO) representatives or affirmative action coordinators
o Investigate and resolve EEO grievances, examine organizational practices for potential violations, and
compile and submit EEO reports.
 Job analysts
o Collect and examine detailed information about job duties to prepare job descriptions.
 Compensation managers
o Develop compensation plans and handle the employee benefits program.
 Training specialists
o Plan, organize, and direct training activities.
 Labour relations specialists
o Advise management on all aspects of union management relations.

Society of Human Resource Management - Manager Functions

 Leadership & Navigation

o The ability to direct and contribute to initiatives and processes within the organization.
 Ethical Practice
o The ability to integrate core values, integrity, and accountability throughout all organizational and
business practices.
 Business Acumen
o The ability to understand and apply information with which to contribute to the Organization’s strategic
plan.
 Relationship Management
o The ability to manage interactions to provide service and to support the organization.
  Consultation
o The ability to provide guidance to organizational stakeholders.
 Critical Evaluation
o The ability to interpret information with which to make business decisions and recommendations.
 Global & Cultural Effectiveness
o The ability to value and consider the perspectives and backgrounds of all parties.
 Communication
o The ability to effectively exchange information with stakeholders.

Roles of HR Managers

 Administrative Roles
o Policy maker
 The human resource manager helps management in the formation of policies governing talent
acquisition and retention, wage and salary administration, welfare activities, personnel records,
working conditions etc.
o Administrative expert
 The administrative role of an HR manager is heavily oriented to processing and record keeping.
o Advisor
 It is said that personnel management is not a line responsibility but a staff function. The
personnel manager performs his functions by advising, suggesting, counselling and helping the
line managers in discharging their responsibilities.
o Housekeeper
 The administrative roles of a personnel manager in managing the show include recruiting, pre-
employment testing, reference checking, employee surveys, etc.
o Counsellor
 The personnel manager discusses various problems of the employees relating to work, career,
their supervisors, colleagues, health, family, financial, social, etc. and advises them on
minimising and overcoming problems, if any.
o Welfare officer
 Personnel manager is expected to be the Welfare Officer of the company.
o Legal consultant
 Personnel manager plays a role of grievance handling, settling Line and Staff Functions of
disputes, handling disciplinary cases, doing collective bargaining, etc.
 Operational Roles
o Recruiter
 HR managers have to use their experience to good effect while laying down lucrative career
paths to new recruits without, increasing the financial burden to the company.
o Trainer developer, motivator
 Apart from talent acquisition, talent retention is also important.
o Coordinator/linking pin
  The HR manager is often deputed to act as a linking pin between various divisions/departments
of an organisation.
o Mediator
 The personnel manager acts as a mediator in case of friction between two employees, groups
of employees, superiors and subordinates and employees and management with the sole
objective of maintaining industrial harmony.
o Employee champion
 HR managers have traditionally been viewed as ‘company morale officers’ or employee
advocates.
 Strategic Roles
o Change agent
 Strategic HR as it is popularly called now aims at building the organisation’s capacity to
embrace and capitalise on change.
o Strategic Partner
 HR’s role is not just to adapt its activities to the firm’s business strategy, nor certainly to carry
out fire-fighting operations like compensating employees.

Operative Functions of HR

 Procurement Functions
o Job analysis
 It is the process of collecting information relating to the operations and responsibilities
pertaining to a specific job.
o Human resources planning
 It is a process of determining and assuring that the organisation will have an adequate number
of qualified persons, available at proper times, performing jobs which would meet their needs
and provide satisfaction for the individuals involved.
o Recruitment
 It is the process of searching for prospective employees and stimulating them to apply for jobs
in the organisation.
o Selection
 It is the process of ascertaining qualifications, experience, skill and knowledge of an applicant
with a view to appraising his/her suitability to, the job in question.
o Placement
 It is the process that ensures a 360º fit, matching the employee’s qualifications, experience,
skills and interest with the job on offer
o Induction and orientation
 Induction and orientation are techniques by which a new employee is rehabilitated in his new
surroundings and introduced to the practices, policies, and people.
o Internal Mobility
  The movement of employees from one job to another through transfers and promotions is called
internal mobility.
 Development
o Training
 Training is a continuous process by which employees learn skills, knowledge, abilities and
attitudes to further organisational and personnel goals.
o Executive development
 It is a systematic process of developing managerial skills and capabilities through appropriate
programmes.
o Career planning and development
 It is the planning of one’s career and implementation of career plans by means of education,
training, job search and acquisition of work experiences.
o Human resource development
 HRD aims at developing the total organisation.
 Motivation and Compensation
o Job design
 Organising tasks, and responsibilities towards having a productive Line and Staff Functions
unit of work is called job design.
o Work scheduling
 Organisations must realise the importance of scheduling work to motivate employees through
job enrichment, shorter work week flexi-time, work sharing and homework assignments.
o Motivation
 Combining forces that allow people to behave in certain ways is an integral aspect of
motivation.
o Job evaluation
 Organisations formally determine the value of jobs through the process of job evaluation.
o Performance appraisal
 After an employee has been selected for a job, has been trained to do it and has worked on it
for a period of time, his performance should be evaluated.
o Compensation administration
 Compensation administration is the process of dividing how much an employee should be paid.
o Incentives and benefits
 In addition to a basic wage structure, most organisations nowadays offer incentive
compensation based on actual performance.
 Maintenance
o Health and safety
 Managers at all levels are expected to know and enforce safety and health standards throughout
the organisation.
o Employee welfare
  Employee welfare includes the services, amenities and facilities offered to employees within or
outside the establishment for their physical, psychological and social wellbeing.
o Social security measures
 Managements provide social security to their employees in addition to fringe benefits.
 Integrative Function
o Grievance redressal
 A grievance is any factor involving wages, hours or conditions of employment that is used as a
complaint against the employer.
o Discipline
 It is the force that prompts an individual or a group to observe the rules, regulations and
procedures, which are deemed necessary for the attainment of an objective.
o Teams and teamwork
 Self-managed teams have emerged as the most important formal groups in today’s
organisations.
o Collective bargaining
 It is the process of agreeing on a satisfactory labour contract between management and union.
o Employee participation and empowerment
 Participation means sharing the decision-making power with the lower ranks of an organisation
in an appropriate manner.
o Trade unions and employees association
 Trade union is an association either of employees or employers or independent workers.
o Industrial relations
 Harmonious industrial relations between labour and management are essential to achieve
industrial growth and higher productivity.
 Emerging Issues
o Personnel records
 Personnel records such as papers, files, cards, cassettes and films are maintained to have
tangible record of what is actually happening in an organisation and to formulate appropriate
HR policies and programmes from time to time.
o Human resource audit
 Human resource audit refers to an examination and evaluation of policies, procedures and
practices to determine the effectiveness of HRM.
o Human resources research
 It is the process of evaluating the effectiveness of human resource policies and practices and
developing more appropriate ones.
o Human resources accounting (HRA)
 It is a measurement of the cost and value of human resources to the organisation.
o Human resource information system
 HRIS is an integrated system designed to improve the efficiency with which HR data is
compiled
 o Stress and counselling
 Stress is the psychological and physical reaction to certain life events or situations.

New Approaches in Organizing HR

 One survey found that 44% of the large firms surveyed planned to change how they organize and deliver HR
services.
 Most plan to use technology to institute more “shared services” arrangements.
o These establish centralized HR units whose employees are shared by all the companies’ departments to
assist the departments’ line managers in human resource matters.
o These shared services HR teams generally offer their services through intranets or centralized call
centres.
o They aim to provide managers and employees with specialized support in day-to-day HR activities.
 You may also find specialized corporate HR teams within a company.
o These assist top management in top-level issues such as developing the personnel aspects of the
company’s long-term strategic plan.
o Embedded HR teams have HR generalists (aka “relationship managers” or “HR business partners”)
assigned to functional departments like sales and production.
o They provide the selection and other assistance the departments need.
o Centres of expertise are basically specialized HR consulting firms within the company.
Equal Opportunity Laws Enacted from 1964 to 1991

Title VII of the 1964 Civil Rights Act

 Title VII of the 1964 Civil Rights Act - The section of the act that says an employer cannot discriminate on the
basis of race, colour, religion, sex, or national origin with respect to employment.
 Title VII established the Equal Employment Opportunity Commission (EEOC) to administer and enforce the
Civil Rights Act at work.
 It consists of five members appointed by the president with the advice and consent of the Senate. Each member
serves a 5-year term.

Executive Orders

 Various U.S. presidents signed executive orders expanding equal employment in federal agencies.
 These required that government contractors with contracts of more than $50,000 and 50 or more employees take
affirmative action to ensure employment opportunities for those who may have suffered past discrimination.
 They also established the Office of Federal Contract Compliance Programs (OFCCP).
 It implements the orders and ensures compliance.

Equal Pay Act of 1963

 Under the Equal Pay Act of 1963 (amended in 1972), it is unlawful to discriminate in pay on the basis of sex
when jobs involve equal work; require equivalent skills, effort, and responsibility; and are performed under
similar working conditions.

Age Discrimination in Employment Act of 1967

 The Age Discrimination in Employment Act of 1967 (ADEA) made it unlawful to discriminate against
employees or applicants who are between 40 and 65 years of age.
 Subsequent amendments effectively ended most mandatory retirement at age 65.
 Most states and local agencies, when acting as employers, must also adhere to the ADEA.

Vocational Rehabilitation Act of 1973

 The Vocational Rehabilitation Act of 1973 requires employers with federal contracts of more than $2,500 to
take affirmative action in employing handicapped persons.

Pregnancy Discrimination Act of 1978

 The Pregnancy Discrimination Act of 1978 prohibits using pregnancy, childbirth, or related medical conditions
to discriminate in hiring, promotion, suspension, or discharge, or in any term or condition of employment.

Federal Agency Guidelines

 The EEOC, Civil Service Commission, Department of Labour, and Department of Justice together issued
Uniform Guidelines.
  These set forth highly recommended procedures for things like employee selection and record keeping.

Early Court Decisions Regarding Equal Employment Opportunity

 First, the Court ruled that the discrimination does not have to be overt to be illegal. The plaintiff does not have
to show that the employer intentionally discriminated against the employee or applicant. Instead, the plaintiff
just has to show that discrimination took place.
 Second, the Court held that an employment practice must be job related if it has an unequal impact on members
of a protected class.
 Third, Chief Justice Burger’s opinion placed the burden of proof on the employer to show that the hiring practice
is job related. Thus, the employer must show that the employment practice is necessary for satisfactory job
performance if the practice discriminates against members of a protected class.