An Overview of HRM

HRM is the part of the organization concerned with the “people” dimension. HRM can be viewed in one of two ways. First, HRM is a staff or support function in the organization. Its role is to provide assistance in HRM matters to line employees, or those directly involved in producing the organization’s goods and services. Second, HRM is a function of every manager’s job. Whether or not one works in a formal HRM department, the fact remains that to effectively manage employees, all managers must handle the activities

HRM consists of four basic functions:

(1) staffing

(2) training and development

(3) motivation, an

(4) maintenance.

Fig. - Fundamentals of Strategic HRM

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Staffing Function of HRM

Organizations must have a well-defined reason for needing individuals who possess specific skills, knowledge, and abilities directly linked to specific jobs. Specifically, when an organization plans strategically, it determines its goals and objectives for a given period of time. These goals and objectives often lead to structural changes in the organization, requiring changes in job requirements and reporting relationships.

Staffing functions included

Strategic HR Planning Recruiting Selection

Strategic HR Planning

Strategic HR planning is an important component of strategic HR management. It links HR management directly to the strategic plan of your organization. Most mid- to large sized organizations have a strategic plan that guides them in successfully meeting their missions. Organizations routinely complete financial plans to ensure they achieve organizational goals and while workforce plans are not as common, they are just as important.

Human Resource Planning

Fig. - Human Resource Planning

Recruiting

The stages of the recruitment process include job analysis and developing some person specification; the sourcing of candidates by networking, advertising, and other search methods; matching candidates to job requirements and screening individuals using testing

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(skills or personality assessment); assessment of candidates' motivations and their fit with organizational requirements by interviewing and other assessment techniques.

Recruiting Sources

Internal Search Employee Referrals External Search Alternatives

Internal Search

Organizations that promote from within identify current employees for job openings

Selection

The completed selection process ends the staffing function. The goals, then, of the staffing function are to locate competent employees and bring them into the organization. When this goal has been reached, HRM focuses its attention on the employee’s training and development.

– by having individuals bid for jobs– by using their HR management system– by utilizing employee referrals

Employee Referrals

Employee referrals also may receive more accurate information about their potential jobs. The recommender often gives the applicant more realistic information about the job than could be conveyed through employment agencies or newspaper advertisements. This information reduces unrealistic expectations and increases job survival.

External Search

In addition to looking internally for candidates, organizations often open up recruiting efforts to the external community. These efforts include advertisements (including Internet postings), employment agencies, schools, colleges and universities, professional organizations, and unsolicited applicants.

In external search included

– Employment agencies– Schools, colleges, and universities– Professional organizations– Unsolicited applicants– Cyberspace Recruiting

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Employment agencies

Three different types of employment agencies exist to help employers and workers find each other. Public or state agencies, private employment agencies, and management consulting firms all provide valuable employment matching services.

Schools, colleges, and universities

Educational institutions at all levels offer opportunities for recruiting recent graduates. Most educational institutions operate placement services where prospective employers can review credentials and interview graduates. Most also allow employers to see a prospective employee’s performance through cooperative arrangements and internships.

Job Fairs

Job Fairs Once thought to be a little old fashioned and not very cost effective; job fairs are making a comeback as an effective recruiting tool. Often held on or near college campuses in the spring, they’re a good opportunity to build a company’s employment brand.

Professional organizations

Many professional organizations, including labor unions, operate placement services for the benefit of their members. Professional organizations serving such varied occupations as industrial engineering, psychology, accounting, legal, and academics publish rosters of job vacancies and distribute these lists to members.

Unsolicited applicants

Unsolicited applications, whether they reach the employer by letter, e-mail, online application, telephone, or in person, constitute a source of prospective applicants. Although the number of unsolicited applicants depends on economic conditions, the organization’s image, and the job seeker’s perception of the types of jobs that might be available, this source does provide an excellent supply of stockpiled applicants.

Cyberspace Recruiting

Newspaper advertisements and employment agencies may be on their way to extinction as primary sources for conveying information about job openings and finding job candidates, thanks to Internet recruiting. Most companies, both large and small, use Recruiting Sources 143 job fairs Events attended by employer representatives or recruiters with the goal of reaching qualified candidates. Virtual Job Fair online sites provide contact between job seekers and prospective employers in real-time.

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Alternatives

Much of the previous discussion on recruiting sources implies that these efforts are designed to locate and hire full-time, permanent employees. However, economic realities that include employee layoffs, coupled with management trends such as rightsizing, have created a slightly different focus.

In alternatives included

– Temporary help services– Employee leasing– Independent contractors

Temporary help services

Organizations such as Kelly Services, Manpower, and Accountemps supply temporary employees. Temporary employees are particularly valuable in meeting short-term fluctuations in HRM needs

Employee leasing

Leased employees typically remain with an organization for longer periods than temporary employees. Under a leasing arrangement, individuals work for the leasing firm

Independent contractors

Another means of recruiting is the use of independent contractors. Often referred to as consultants, independent contractors are taking on a new meaning. Companies may hire independent contractors to do specific work at a location on or off the company’s premises.

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Training and Development Function of HRM

Employees often take months to adjust to their new organizations and positions. Although the job description may seem straightforward, employees need to learn the culture of the organization, how information is communicated, and how their position fits the organization structure and strategy. HRM plays an important role in assimilating employees so they can become fully productive.

It’s included

Orientation Employee training & development Career development

Orientation

Employees often take months to adjust to their new organizations and positions. Although the job description may seem straightforward, employees need to learn the culture of the organization, how information is communicated, and how their position fits the organization structure and strategy. HRM plays an important role in assimilating employees so they can become fully productive.

Employee training & development

It is important to note that employee and career development is more employees centered, whereas employee training is designed to promote competency in the new job. Organization development, on the other hand, focuses on organizational changes. While each area has a unique focus, all four are critical to the success of the training and development phase.

Career development

The relationship between career development and human resource planning is obvious. Career developments ensure a supply of abilities and talents, whereas human resource planning projects demand for talents and abilities. The supportive and integrated effort of top-level management of the organization as well as system analyst for effective career development and human resource planning are needed for maximizations of both demand and supply of talents and abilities.

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Motivation Function of HRM

Motivation functions of HRM are the activities concerned with helping employees exert at high energy levels.

To retain good staff and to encourage them to give of their best while at work requires attention to the financial and psychological and even physiological rewards offered by the organization as a continuous exercise.

So in a sort sentence we can say that motivation function of HRM –

Activities in HRM related with helping employees work at high energy levels. Motivation is a function of willingness and ability (skill) to do the job.

Managing motivation includes:

– Job design– Performance appraisal– Establishing effective compensation and benefits programs– Reward management– Understanding motivational theories

1. Job designThe process of job design has been defined as specification of the contents, methods, and relationships of jobs in order to satisfy technological and organizational requirements as well as the social and personal requirements of the job holder.

Aspects of Job Design

Work Organization– Rearranging or replacing work (e.g. automating, teaming, work

groups, division of labor)– Giving the worker additional responsibility/tasks (job enlargement)– Job rotation

Job Structuring– Giving responsibility for different types/levels of work (job

enrichment)– Granting control over work (autonomy)– Self-Organization (time/process management)

Location/Scheduling– Telecommuting (part or full off-site work)– Alternative scheduling – Virtual Office/Virtual Organization

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Significant job characteristics

Variety – removal of repetitiveness– skill variety

Autonomy– removal of no choice of tools or methods– removal of mechanical pacing– decision making

Use of Capacities– removal of minimum skill requirements– removal of surface mental attention– learning time– challenge

Progress/Career Path– achievement– perceived opportunities for advancement– growth in competence– continuous learning– desirable future

Intrinsically Meaningful Work– removal of minute subdivision of product/process– task identity (seeing relationship of task to whole/end product)

Socially Meaningful Work– task significance– need to relate work and social life

Interaction– interaction opportunities– social support and recognition

Knowledge of Results– recognition– feedback

Responsibility– accountability– choice over tools and methods

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Steps of analysis and identification of job design alternatives

Steps of analysis (Hill, 1971; Taylor, 1975 ;) includes following steps: Scanning (initial analysis of system inputs, outputs, organization structure and

workplace layout) Technical Analysis (similar to process mapping...identifies system operations and

key variances. Variances are classified as having an effect on output quality, output quantity, operating costs and social cost)

Internal Systems Analysis (social system analysis; survey of perceptions of work roles; maintenance system analysis; supply and user system analysis).

Proposals for Change and Implementation

What job design changes are to be implemented?

Conclusions of research show that at the individual level, design jobs with (1) optimum variety (2) a meaningful whole task (3) optimum work cycle (4) control over work standards and feedback of results (5) preparation and auxiliary tasks (6) use of valued skill, knowledge and effort (7) perceivable contribution to end product.

At group level, work organization should provide (1) job rotation or physical proximity where individual jobs are interdependent or are stressful or make no perceivable contribution to the end product and (2) grouping of interdependent jobs to provide a whole task that contributes to the end product or control over standards and feedback of results and control over boundary tasks (3) communication channels (4) promotion channels.

2. Performance Appraisal

The performance appraisal is the process of assessing employee performance by way of comparing present performance with already established standards which have been already communicated to employees, subsequently providing feedback to employees about their performance level for the purpose of improving their performance as needed by the organization.

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The Appraisal Process

3. Appraisal MethodsThree approaches of performance appraisal:1. Absolute standards2. Relative standards3. Objectives

a) Evaluating absolute standards:

An employee’s performance is measured against established standards.

Evaluation is independent of any other employee.

• Essay Appraisal: Appraiser writes narrative describing employee performance & suggestions.

• Critical Incident Appraisal: Based on key behavior anecdotes illustrating effective or ineffective job performance.

• Checklist Appraisal: Appraiser checks off behaviors that apply to the employee.

• Adjective Rating Scale Appraisal: Appraiser rates employee on a number of job-related factors.

• Forced-Choice Appraisal: Appraisers choose from sets of statements which appear to be equally favorable, the statement which best describes the employee.

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• Behaviorally Anchored Rating Scales (BARS): Appraiser rates employee on factors which are defined by behavioral descriptions illustrating various dimensions along each rating scale.

b) Relative standards:Employees are evaluated by comparing their performance to the performance of other employees.

• Group Order Ranking: Employees are placed in a classification reflecting their relative performance, such as “top one-fifth.”

• Individual Ranking: Employees are ranked from highest to lowest.• Paired Comparison:

Each individual is compared to every other. Final ranking is based on number of times the individual is

preferred member in a pair.

c) Using Achieved Outcomes to Evaluate Employees

Creating More Effective Performance Management Systems

4. Reward management

Reward management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably, and consistently in accordance with their value to the organization.

The most obvious reward is pay, but there are many others, including-

– Promotion

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– Desirable work assignment– Peer recognition – Work freedom

However there are 2 types of rewards–

i. Intrinsic rewards: Intrinsic rewards are personal satisfactions come from the job itself, such as:

– Pride in one’s work– Feelings of accomplishment– Being part of a work team

ii. Extrinsic rewards: Extrinsic rewards come from a source outside the job include-– Rewards offered mainly by management– Money – Promotions– Benefits

Extrinsic rewards are two types, these are following-

Financial rewards: financial rewards include wages, bonuses, profit sharing, pension plan, paid leave, purchase discounts etc.Financial rewards are also 3 types-

Performance based Implied membership based and Explicit membership based.

Nonfinancial rewards: Nonfinancial rewards emphasize making life on the job more attractive; employees vary greatly on what types they find desirable.

Employee benefits program

• Have grown in importance and variety • Typically membership-based rewards offered to attract and keep employees• Do not directly affect a worker’s performance, but inadequate benefits lead to

employee dissatisfaction.

Top benefits are-

1. Additional fixed pay2. Higher incentives3. Flexible work arrangement4. Retirement benefit5. Professional development support6. Training opportunities7. Insurance benefit8. Healthcare assistance

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Contemporary Benefits Offerings

– Benefits today reflect the diversity of the work force. – Challenge -- designing a benefits package which is attractive to applicants

and current workers, and provides all the legally required benefits.

Legally Required Benefits

Social Security – Financed by equal employee and employer contributions, based on a

percentage of earnings. – Provides income for retirees, disabled workers and surviving dependents. – Provides some health insurance coverage through Medicare.

Unemployment Compensation – Funded by employers who pay combined federal and state tax imposed on

taxable wage base– Tax varies based on organization’s unemployment experience. – Provides employees with some income continuation during periods of

involuntary unemployment– Typical coverage is for 26 weeks.

Workers’ Compensation – Paid for by the organization– Rates based on likelihood of accidents, past history, and the type of

industry. – Benefits pay expenses and/or compensate for losses resulting from work-

related accidents or illness, regardless of fault.

Family and Medical Leave – 1993 Act requires employers with 50 or more employees to allow up to 12

weeks of unpaid leave for family or medical reasons. – Specifies record-keeping and communication requirements

Others benefits provide to employees

Voluntary BenefitsRetirement BenefitsPaid Time OffSurvivor BenefitsAn Integrative Perspective on Employee BenefitsFlexible benefits

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Compensation

Compensation is rewarding the employee for the services rendered by them for the benefit of the organization. It is set of program aimed at achieving the following objectives:

Aids in attracting capable employees to the organization. Motivate employees toward superior performance. Retaining employees and their services over an extended period of time.

Types of compensation

There are three types of compensation-1. Base compensation: It refers to the basic salaries and wages given to

the employees. It is normally constant at a given amount irrespective of the difference in work performance.

2. Variable compensation: Variable compensation means that one gets compensation as per the work done. If one does a remarkable job then he or she deserves a higher compensation package than one whose work is of poor quality.

3. Supplementary compensation: compensation given by an employer when he wishes to. It is not compulsory or a routine once one is given the compensation that one will be awarded another time.

Understanding motivational theories

Basic step of motivation process is to understand the implications of motivational theories. The motivational theories are:

– Hierarchy of Needs –Maslow– Theory X – Theory Y –McGregor– Motivation – Hygiene – Herzberg– Achievement, Affiliation, and Power Motives – McClelland– Equity Theory – Adams– Expectancy Theory – Vroom

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Maintenance function of HRM

Human Resource department have to maintain following for maintenance function-

Safety and Health Communication and Employee Relation.

This are briefly describe below

1. Safety and Health

Human Resource department have a legal responsibility to ensure that the workplace is free from unnecessary hazards and that condition surrounding the workplace are safe for employee’s physical and mental health. If workers cannot function properly at their jobs. Some suggestion for keeping the workplace healthy include-

Make sure workers have enough fresh air. Avoid suspect building materials and furnishing. Test new buildings for toxins before occupancy. Provide a smoke-free environment. Keeping air ducts clean and dry. Paying attention to workers’ complaints.

2. Communication

Communication is the transfer of information from sender to a receiver, with the information being understood by the receiver. It ensures smooth running of activities of an enterprise. Human Resource Manager have to keep employees well informed and updated for following points-

Helps in minimizing cost and conflict among employees. Help in planning and coordination of different activities in an organaization. When there is an effective system of communication, employees will have the

opportunity present their ideas, suggestions and complaints. Democratic management is possible only when there is an effective

communication system. Communication acts as a lubricant and keeps all the individuals working in line

with expectation of top management. Help management in making and implementing decisions in time.

So manager should maintain a healthy communication system by removing various communication barriers.

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3. Employee Relation

The term ‘employee relation’ usually refers to a relationship between labor and management that grow up out of employment. Both two parties need to work in a spirit of cooperation, adjustment, and accommodation. The fundamental objective of employee relation is to maintain sound relations between employees and employers. Some other objectives can also be drawn from these basic objectives. These are:

To enhance the economic status of the workers. To regulate production by minimizing conflicts through state control. To provide an opportunity to the workers to have a say in the management and

decision-making. To extend and maintain democracy. Improving Productivity. Improve quality and reduces price of products.

Employee relation is the process by which human being and their organizations interact at the work place to established term and condition ofemployment.HR managers should maintain cordial relations by efficient management, maintaining proper democratic environment across the organization.

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