Professional Documents
Culture Documents
The human resources of an organization consist of all people who perform its activities. Human resource management (HRM) is concerned with the personnel policies and managerial practices and systems that influence the workforce. In broader terms, all decisions that affect the workforce of the organization concern the HRM function.
The activities involved in HRM function are pervasive throughout the organization. Line managers, typically spend more than 50 percent of their time for human resource activities such hiring, evaluating, disciplining, and scheduling employees. Human resource management specialists in the HRM department help organizations with all activities related to staffing and maintaining an effective workforce. Major HRM responsibilities include work design and job analysis, training and development, recruiting, compensation, team-building, performance management and appraisal, worker health and safety issues, as well as identifying or developing valid methods for selecting staff. HRM department provides the tools, data and processes that are used by line managers in their human resource management component of their job.
High-performance work systems (HPWS) is a term used to describe a collection of HR practices or characteristics of HR systems designed to enhance employees competencies so that employees can be a reliable source of competitive advantage. A summary of the research on HPWS indicated that a one standard deviation of improved assessment on a HPWS measurement tool increased sales per employee in excess of $15,000 per employee, an 8 percent gain in labor productivity.
(1) Organizational design, (2) Staffing, (3) Performance Management and Appraisal, (4) Employee and Organizational Development, and (5) Reward Systems, Benefits and Compliance
Acquiring human resource capability should begin with organizational design and analysis. Organizational design involves the arrangement of work tasks based on the interaction of people, technology and the tasks to be performed in the context of the objectives, goals and the strategic plan of the organization. HRM activities such as human resources planning, job and work analysis, organizational restructuring, job design, team building, computerization, and workermachine interfaces fall under this domain.
Recruitment, employee orientation, selection, promotion, and termination are among the
activities that fit into the staffing domain. The performance management domain includes assessments of individuals and teams to measure, and to improve work performance. Employee training and development programs are concerned with establishing, fostering, and maintaining employee skills based on organizational and employee needs.
Reward systems, benefits and compliance have to do with any type of reward or benefit that may be available to employees. Labor law, health and safety issues and unemployment policy fall under compliance component.
1. Increased globalization of the economy. 2. Technological changes and environmental changes. 3. The need to be flexible in response to business changes. 4. Increase in litigation related to HRM. 5. Changing characteristics of the workforce. The Importance of HRM Measurement
Many HRM systems and activities are not subjected to systematic measurement. Many organizations do not assess either the short- or long-term consequences of their HRM programs or activities. A recurring theme of the book is that measurement and accountability are key components to organizational effectiveness and competitive advantage. Good measurement, allied with business strategies, will help organizations select and improve all of their HRM activities and provide a much stronger connection between HRM activities and organizational effectiveness.
Stanford University professor Jeffrey Pfeiffer considers measurement to be one of the keys to competitive advantage. His book Competitive Advantage through People cites measurement as one of the 16 HRM practices that contribute the most to competitive advantage.
A new book entitled The Workforce Scorecard by Professors Mark Huselid, Brian Becker, and Dick Beatty extends research on the "balanced scorecard" to a comprehensive management and measurement system to maximize workforce potential.
Competitive advantage occurs if customers perceive that they receive more value form their transaction or relationship with an organization than from its competitors. HRM needs to make efforts to ensure that all employees are focused on understanding customer needs and expectations.
The second principle of competitive advantage derives from offering a product or service that your competitor cannot easily imitate or copy.
The status of HRM is improving relative to other potential sources of competitive advantage for an organization. Professor Preifer notes that "traditional sources of success (e.g., speed to market, financial, technological) can still provide competitive leverage, but to a lesser degree now than in the past, leaving organizational culture and capabilities, derived from how people are managed, as comparatively more vital." For success in 21st century, HRM activities must be (1) responsive to a highly competitive marketplace and global business structures, (2) closely linked to business strategic plans, (3) jointly conceived and implemented by line and HR managers, and (4) focused on quality, customer service, productivity, employee involvement, teamwork, and workforce flexibility.
Importance of Study of HRM for Students Specializing in Other Functional Areas of Management
Even as line managers in any functional department, management students are likely to manage people at some point in their career. Research shows that the manner in which one conducts the human resource responsibilities of the management job will be the key for effectiveness and growth in ones career.
HRM is viewed as an all-embracing term describing a number of distinctive approaches to people management. Part 1 helps you to understand and evaluate the different and sometimes ambiguous views of human resource management by investigating its origins, explanatory models, technology and practice This section addresses a number of specific issues:
Where do the fundamental concepts of HRM come from? What distinguishes HRM from other approaches to managing people - particularly personnel management? Is HRM here to stay or is it just another management fad? Is HRM a coherent and integrated approach to managing people? How prevalent is HRM? What is the link between HRM and high performance? HRM and Knowledge Management. How has technology changed the practice and delivery of HRM? Does its use lead to greater organizational effectiveness?
Managing People We introduce you to the concept of human resource management. HRM has evolved from a number of different strands of thought and is best described as a loose philosophy of people management rather than a focused methodology. The Concept of HRM HRM has a variety of definitions but there is general agreement that it has a closer fit with business strategy than previous models, specifically personnel management. HRM and Business Effectiveness In all the debates about the meaning, significance and practice of HRM, nothing seems more certain than the link between HRM and performance.
Organization theory
The study of organizations draws on a number of disciplines:Economics
Classical economics viewed the firm as a single decision-unit engaged in maximizing profits. It ignored the possibility of conflict between owners, managers and employees. The obsession with competition failed to take into account the other goals which may take precedence in organizations. Organization theory partly owes its existence to a reaction against such simplistic ideas. It became necessary to understand behaviour which seemed - in classical terms - to be irrational.
Psychology
Psychology is a wide-ranging subject. Early psychologists provided an insight into individual behaviour within organizations particularly on aspects of motivation and leadership. The Hawthorne studies led to a realization of the importance of social phenomena, such as the informal groups, group norms and conformity. Valuable as these micro-level studies were, they suffered from the problem of reductionism, making it difficult understand the link between the behaviour of individuals and the structure of the organization in which they worked.
Sociology
Organizational sociologists took a wider perspective, setting the organization within its environmental framework - specifically in relation to society and its institutions. Some sociologists have examined formal organizational structures, particularly in relation to technology (for example, Burns and Stalker, 1961). Morgan (1986) provides a (by now) classical interpretation of organizations as a series of metaphors. Dating from Weber's early work on bureaucracy, sociologists have taken a particular interest in non-profit making organizations.
Systems theory
Organizations are not merely physical, they are also social and technological systems: they are multi-dimensional, with aspects which are unmeasurable. Drawn from physical and engineering models, systems theory considers organizations as systems with boundaries which make exchanges with the environment and must adapt to environmental changes in order to survive. Organizations are open systems which interact directly with the environment. They have:
Inputs. For example, taking in raw materials, finance and recruits from the outside world. Outputs. They provide products and services, and pay wages and dividends. Technology and human resources transform inputs into outputs.
The systems approach has become popular with the advance of information technology. Computers and telecommunications are increasingly important, integrating organizations in the same way that the nervous system controls and coordinates the human body. Organizations are
changing in line with new technical possibilities, yet organizations cannot be viewed simply as communications networks - the human dimension cannot be forgotten. Organization theory has attracted critical attention. Thompson and McHugh, for example, have argued that there is a tendency for a narrow 'management plus psychology' perspective which has little to do with real-life enterprises. In an attempt to produce a science of organizations, the main focus has been on identifying generalizations about behaviour in work situations and applying them to all organizations, regardless of their nature. In particular, theorists have paid scant attention to the differences between organizations which are subject to market forces and those which are not. Thompson and McHugh contend that it is not meaningful to treat organizations as diverse as scout troops and transnational companies within the same analytical framework. This has resulted in a massive - but vague and over-theoretical - body of literature with little practical value.
Why are some recruitment channels more popular than others? What are the most cost-effective recruitment and selection methods? How is candidate information collected? What use is made of that information? Are interviews an effective method of determining the 'best' candidates? How prevalent are more sophisticated or non-traditional selection techniques such as psychometric tests, biodata and assessment centres? How valid are these selection techniques?
Recruitment and selections are core areas of human resource management but are frequently discussed in a prescriptive manner. They are not simply techniques for filling jobs - they are also levers for organizational change, sustaining employee commitment and achieving high performance. In free market countries, the personnel profession has adopted a 'best practice' model which fits the prevailing business ideology. This model prescribes a quest for the 'right (best) person for the job'. The 'bestperson' or psychometric model has achieved the status of orthodoxy in free market countries. But different models of resourcing have been developed with a greater concern for personality and attitude
than presumed ability. Recruits may be sought who will 'fit in' with the culture of the corporation; who will be content to build a career within the organization; who will absorb the goals of the organization.
Recruitment and selection allow management to determine and gradually modify the behavioural characteristics and competences of the workforce. The fashion for teamworking, for example, has focused on people with a preference for working with others as opposed to the individualist 'stars' preferred by recruiters in the 1980's. Attention has switched from rigid lists of skills and abilities to broader-based competences. In general - as we noted in the previous section - there is greater regard for personal flexibility and adaptability - a reorientation from present to future stability.
Evaluate the screening or preselection stage of employee resourcing. Introduce the concepts of validity and reliability in relation to different selection methods. Provide a critical overview of selection methods. Investigate the frequency of use of different selection methods.
In free market countries, the personnel profession has adopted a 'best practice' model which fits the prevailing business ideology. This model prescribes a quest for the 'right (best) person for the job'. To achieve this goal, criteria are used to rate prospective applicants by means of selection techniques, including biographical data, interviews, psychometric tests, group exercises, simulated work samples and even handwriting analysis. The most definitive form of selection is likely to take place within the context of assessment centres, which involve several assessors and a variety of selection techniques. The 'best-person' or psychometric model has achieved the status of orthodoxy in free market countries. Elsewhere different models of resourcing apply. For example, in Japan there is a greater concern with personality and background than presumed ability. Recruits are sought who will 'fit in' with the culture of the corporation; who will be content to build a career within the organization; who will absorb the goals of the organization.
Resourcing decisions
After pre-selection screening, surviving applicants meet the formal decision-making procedure termed selection. Biased selection processes can result in hiring unsuitable people (false positives); or may lead to a failure to hire applicants who would have been suitable for the job (false negatives).
Sophisticated selection methods are not common in small companies, most of which continue to depend on informal methods for selection decisions - typically references and one or two interviews - although more sophisticated methods such as work samples can be effective (Wyatt et al., 2010). In contrast, large organizations have adopted a range of methods to aid decisionmaking.
Face validity - does the method evaluate what it is supposed to evaluate? Construct validity - does it evaluate a construct such as 'commitment'? Predictive validity - does it predict the suitability of a particular candidate?
The chapters on employee selection in Human Resource Management and Fundamentals of Human Resource Management (Price, 2011) go into further detail and compare validities of different selection methods.
Fairness
Fairness is a further requirement: specifically, candidates perceptions of the equity of the process. Good candidates are more likely to accept an offer if they consider that the procedure has been fair, effective and considerate while rejected applicants will continue to have a positive view of an organizations employer brand if they feel they have been fairly treated.
Interviewing Interviewing
The interview is a social ritual which is expected by all participants, including applicants. It is such a 'normal' feature of filling vacancies that candidates for a job would be extremely surprised not to be interviewed at least once.
Informal Interviews
Many employers invite applicants for informal interviews prior to the main selection procedure. These interviews are useful for information exchange, particularly in the case of professionals. They provide an opportunity to discuss the full nature of the job, the working environment, prospects for further development and promotion.
(...) There seems to be some ambiguity as to whether informal interviews should be used as part of the pre-selection process by the employer rather than self-selection by the candidate. The crux of the issue depends on what interviewees have been told. If they have been led to believe that it is a truly informal information session they will not consider the process to be fair if they are subsequently told that they have not been shortlisted as a result.
Formal Interviews
Despite the existence of alternative methods of selection most employers regard the formal selection interview as the most important source of evidence in making the final decision. A selection interview can be neatly defined as a conversation with a purpose, but not infrequently the purpose is obscure to the point of invisibility. More often than not, pointless chat would be nearer the mark. (...) the interview has attracted severe criticism for a very long time - being attacked on the grounds of its subjective nature, questionable validity and unreliability.
history, products or services and its reported strategy. Knowledge of the industry or sector in which it operates is also valuable. (...)
There are significant variations in the way employers conduct interviews. The most common method is the singleton interview when the candidates fate is determined by one session with a single interviewer. For obvious reasons, this method is likely to be regarded as unfair by interviewees who are not selected. There is no check or record of bias on the part of the interviewer who may have made a judgement on a complete whim. A long-standing method which attempts to overcome this problem is the panel or board interview (...)
Interviewing Methods
As with many other aspects of selection, interviewing has been formalized and packaged into training programmes available for both selectors and candidates. Untrained assessors are likely to conduct interviews in an unstructured way. Interview training is a useful component of management training. The best training programmes encourage people to become aware of their body language and questioning styles, helping them to develop interview techniques that open up fresh areas of evidence. Many junior managers and job club participants have had the opportunity to see themselves in action on video, taking part in mock interviews. Initially demoralizing (for most), it is an invaluable method of feedback. Packaged training methods have led to a certain sameness, however, and seasoned job (...) (See Human Resource Management [Price, 2011] for a full discussion.)
the goals of the organization are closely aligned with his own goals. This, in short, is the greatest challenge for all HRM experts, and in every organization, the need is to go about it in a way which is unique and specific for that organization.
Evolution of Human Resource Management Literature on Human resources management is fairly rich in terms of academic theories. Success of Henry Ford and his Ford Motors in early twentieth century gave rise to the term 'Fordism' consisting of the theory that high corporate profitability can be achieved by high wages to the employees. Even before Ford, Fredrick Winslow Taylor had propagated the 'scientific management theory' or 'Taylorism' wherein scientific studies of processes were believed to lead to optimum human resource utilization. These 'modernistic' theories suffered from one grave drawback - they treated human beings as homogeneous, ignoring the individual differences in them. Later academic theories, often referred to as 'post-modernism' attempted to correct this folly by admitting that human beings are complex and solutions to their problems cannot be obtained by simple thumb rules. In recent times, the academic theory has given place to practical applications and HRM experts today specialize in resolving individual problems of the organization in a step-by-step pattern. This means focusing on one of the several human resource management processes enumerated above, beginning from recruitment and ending with performance appraisal. These days, one of their greatest challenges is managing the process of collective bargaining, or the 'contract' between employee and the organization in a way that ensures commitment of the individual towards organizational goals. Another focus of modern HRM practices is to provide the employees a clear understanding of these organizational goals. Science Vs Art While technology threatens to take over most functions of business management away from the experts, HRM is one field which is unlikely to be faced with this threat. It was, is and will always be an expertise that is as much of a skill as an art, and hence beyond the intelligence that our computers possess.
Understanding and relating to employees as individuals, thus identifying individual needs and career goals. Developing positive interactions between workers, to ensure collated and constructive enterprise productivity and development of a uniform organizational culture. Identify areas that suffer lack of knowledge and insufficient training, and accordingly provide remedial measures in the form of workshops and seminars. Generate a rostrum for all employees to express their goals and provide the necessary resources to accomplish professional and personal agendas, essentially in that order. Innovate new operating practices to minimize risk and generate an overall sense of belonging and accountability.
Recruiting the required workforce and making provisions for expressed and promised payroll and benefits. Implementing resource strategies to subsequently create and sustain competitive advantage. Empowerment of the organization, to successfully meet strategic goals by managing staff effectively. The human resource department also maintains an open demeanor to employee grievances. Employees are free to approach the human resource team for any conceived query or any form of on-the-job stress that is bothering them. Performance of employees is also actively evaluated on a regular basis. These are checks conducted by the HR to verify and thereby confirm the validity of the employees actual performance matching the expected performance. Promotions, Transfers or expulsion of services provided by the employee are some duties that are enforced by the human resource department. Promotions are conducted and are predominantly based on the overall performance of the individual, accompanied by the span or tenure he has served the organization. The Human resource department also looks at the possibilities of the employee migrating from one job to another, maintaining the hierarchy in the company and considering the stability of post and the salary obtained over a period of time.
Ideally, a Human Resource Management Department is responsible for an interdisciplinary examination of all staff members in the workplace. This strategy calls for applications from diverse fields such as psychology, paralegal studies, industrial engineering, sociology, and a critical understanding of theories pertaining to post-modernism and industrial structuralism. The department bears the onus of converting the available task-force or hired individuals into strategic business partners. This is achieved via dedicated Change Management and focused Employee Administration. The HR functions with the sole goal of motivating and encouraging the employees to prove their mettle and add value to the company. This is achieved via various management processes like workforce planning and recruitment, induction and orientation of hired task-force and employee training, administration and appraisals.
Human resource management is a wide term and is based on the effective usage of workers and employees to accomplish the objectives of a company. It is present in each and every organization. There is no company or firm which does not have a human resource department. Its primary functions are to efficaciously utilize the talents and capabilities of employees to reach the planned operational goals of the company, and ensure that the employee is comfortable working with the company; and satisfied with the working conditions, and different policies regarding compensation and benefits which are offered to him. What is Human Resource Management HRM plays a very important role in managing, controlling, developing, and maintaining workforce which significantly contributes to the existence and profitability of the organization. They are in continuous contact with the top-level management of the establishment and are responsible for assisting the management for running the processes efficiently. They are also responsible for attracting skilled workforce, and carrying out recruitment and induction procedures, training and development, and settlement of the employee in a particular work environment he is comfortable in. Sections of Human Resource Management In most of the companies, there is a human resource department, which is further divided into two main sections depending on the type of functions and responsibilities they carry out. The first one is the HR administration section, which is responsible for taking care of employees' general work-related problems such as working conditions, extra work pressure, and conflicts between employees, bosses and the top management. Whereas, the other section is responsible for handling recruitment functions, training employees according to corporate policies, providing information about the company in induction sessions, corporate education, etc. In this way, they handle most of the functions in an establishment; as a result, the top management highly depends on them. There are some cases wherein the obligations of the HR department come into contrast with each other. There are few incidents where it is not possible to conclude an appropriate resolution which is suitable for both, the objectives of the organization and the wants or needs of employees. At this stage, the human resource department needs to be very careful on what decision it takes as it may have an adverse effect on either the management or the company's workforce. This is where the skills, talents
and abilities of the HR personnel come into act, who eventually satisfies the top management along with employees, maintaining a healthy corporate relationship between them. Whenever versatile departments in a company require qualified employees for working on projects, they approach the HR recruitment section who then starts their recruitment processes by calling potential candidates, sorting eligible candidates, conducting HR and functional interviews, and selecting candidates and introducing them as new joiner of the company. In this way, they provide the company with efficient workforce who can increase and maintain the quality of employee performance in the organization. They also handle disciplinary procedures; and employee motivational factors, health insurance, and retirement and profit sharing processes. As a part of the company, the HR department ensures that the decisions taken by them are according to the organization's rules and regulations included in the company information texts and handbooks. The HR personnel assist and guide employees in doubts regarding company processes such as leaves, holidays, insurance, income tax, etc. In this way the human resource management is very crucial in any organization, be it from the IT or manufacturing arena. However, there are many more functions and operations this department carries out and are important for smooth running of the company.