ST.

ANTHONY COLLEGE Module for Human

CALAPAN CITY INC. Resource Management

MODULE DESCRIPTOR

This unit explains the concept of Introduction to Human Resource Management.

The topics are Nature of HRM, Scope of HRM, Objectives of HRM, Functions of HRM,
Role of HRM and HRM in the New Millennium

NOMINAL DURATION
January 31-February 4 (3 hours)

LEARNING OUTCOMES
At the end of this module, you MUST be able to:
1. understand the basic concepts of human resource management (HRM).
2. explain what human resource management is and how it relates to the
management process.
3. provide an overview of functions of HRM.
4. describe how the major roles of HR management are being transformed.
5. explain the role of HRM in the present millennium.
.

LEARNING EXPERIENCES

Learning Activities Special Instructions

1. Read Information Sheet about In the learning outcome, you must define
Introduction to Human Resource understand the basic concepts of human
Management. resource management (HRM), explain
2. Answer Self- Check and compare your what human resource management is
answers with the Answer Keys. and how it relates to the management
3. Perform Task Sheet by following the process, provide an overview of
given instruction. functions of HRM., describe how the
4. Perform Job Sheet by following the major roles of HR management are
given instruction. being transformed and explain the role of
HRM in the present millennium.

To be able to do this you should

understand the following:

1. Introduction to Human Resource

Management
2. Nature of HRM
3. Scope of HRM
4. Objectives of HRM
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5. Functions of HRM
6. Role of HRM
7. HRM in the New Millennium

Go through the information sheets and

answer the self - check to ensure that
knowledge context of Introduction to
Human Resource Management is
acquired.
5. Evaluate your own output using the After doing all these activities, you are
performance criteria. ready to proceed to the next module.

INFORMATION SHEETS 2.1-1

Human beings are social beings and hardly ever live and work in isolation. We always
plan, develop and manage our relations both consciously and unconsciously. The
relations are the outcome of our actions and depend to a great extent upon our ability to
manage our actions. From childhood each and every individual acquire knowledge and
experience on understanding others and how to behave in each and every situation in
life. Later we carry forward this learning and understanding in carrying and managing
relations at our workplace. The whole context of Human Resource Management revolves
around this core matter of managing relations at work place. Since mid-1980’s Human
Resource Management (HRM) has gained acceptance in both academic and commercial
circle. HRM is a multidisciplinary organizational function that draws theories and ideas
from various fields such as management, psychology, sociology and economics. There
is no best way to manage people and no manager has formulated how people can be
managed
effectively, because people are complex beings with complex needs. Effective HRM
depends very much on the causes and conditions that an organizational setting would
provide. Any Organization has three basic components, People, Purpose, and Structure.
In 1994, a noted leader in the human resources (HR) field made the following observation:
Yesterday, the company with the access most to the capital or the latest technology had
the best competitive advantage;
Today, companies that offer products with the highest quality are the ones with a leg up
on the competition; But the only thing that will uphold a company’s advantage tomorrow
is the caliber of people in the organization. That predicted future is today’s reality. Most
managers in public- and private sector firms of all sizes would agree that people truly are
the organization’s most important asset. Having competent staff on the payroll does not
guarantee that a firm’s human resources will be a source of competitive advantage.
However, in order to remain competitive, to grow, and diversify an organization must
ensure that its
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employees are qualified, placed in appropriate positions, properly trained, managed

effectively, and committed to the firm’s success. The goal of HRM is to maximize
employees’ contributions in order to achieve optimal productivity and effectiveness, while
simultaneously attaining individual objectives (such as having a challenging job and
obtaining recognition), and societal objectives (such as legal compliance and
demonstrating social responsibility).

1.2 Opening Case

On October 3, 2003, Anant Dalvi and Akhtar Khan, who worked as contract workers in
Tata ElectricCompany until they were laid off in 1996, doused themselves with kerosene
and set themselves ablaze even as their co-workers protested before the company’s
offices. While Dalvi died on the spot, Khan died a few days later. The Tata Electric
Company said they were no longer on their payroll and were not permanent workers.
Employees union had taken up their case and filled petition in the Labour Court before
their contracts were terminated. The court directed the company not to terminate their
services without following the due process of law. Despite this their services were
terminated on June 30, 1996.
The company union promised the workers that they would renegotiate. Yet on the night
before they killed themselves when Khan and Dalvi spoke to the union leader Shinde,
they were told that nothing more could be done for them. It is this that led them to take
their lives. Dalvi has been in service as a peon for17
years and Khan had been employed for 19 years. But their services were not regularized.
Such workersdraw salary much less than the permanent employees. This is an example
of the problem that comes under the purview of Human Resource Management- the main
concept elaborated in this chapter.
1.3 What is Human Resource Management?
HRM is the study of activities regarding people working in an organization. It is a
managerial function that tries to match an organization’s needs to the skills and abilities
of its employees.
1.3.1 Definitions of HRM
Human resources management (HRM) is a management function concerned with hiring,
motivating and maintaining people in an organization. It focuses on people in
organizations. Human resource management is designing management systems to
ensure that human talent is used effectively and efficiently to accomplish organizational
goals.
HRM is the personnel function which is concerned with procurement, development,
compensation, integration and maintenance of the personnel of an organization for the
purpose of contributing towards the accomplishments of the organization’s objectives.
Therefore, personnel management is the planning, organizing, directing, and controlling
of the performance of those operative functions (Edward B. Philippo).
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According to the Invancevich and Glueck, “HRM is concerned with the most effective use
of people to achieve organizational and individual goals. It is the way of managing people
at work, so that they give their best to the organization”. According to Dessler (2008) the
policies and practices involved in carrying out the “people” or human resource aspects of
a management position, including recruiting, screening, training, rewarding, and
appraising comprises of HRM.
Generally HRM refers to the management of people in organizations. It comprises of the
activities, policies, and practices involved in obtaining, developing, utilizing, evaluating,
maintaining, and retaining the appropriate number and skill mix of employees to
accomplish the organization’s objectives. The goal of HRM is to maximize employees’
contributions in order to achieve optimal productivity and effectiveness, while
simultaneously attaining individual objectives (such as having a challenging job and
obtaining recognition), and societal objectives (such as legal compliance and
demonstrating social responsibility). In short Human Resource Management (HRM) can
be defined as the art of procuring, developing and maintaining competent workforce to
achieve the goals of an organization in an effective and efficient manner.

1.4 Nature of HRM

HRM is a management function that helps manager’s to recruit, select, train and develop
members for an organization. HRM is concerned with people’s dimension in
organizations. The following constitute the core of HRM
1. HRM Involves the Application of Management Functions and Principles. The functions
and principles are applied to acquiring, developing, maintaining and providing
remuneration to employees in organization.
2. Decision Relating to Employees must be Integrated. Decisions on different aspects of
employees must be consistent with other human resource (HR) decisions.
3. Decisions Made Influence the Effectiveness of an Organization. Effectiveness of an
organization will result in betterment of services to customers in the form of high quality
products supplied at reasonable costs.
4. HRM Functions are not Confined to Business Establishments Only but applicable to
nonbusiness organizations such as education, health care, recreation and like.
HRM refers to a set of programmes, functions and activities designed and carried out in
order to maximize both employee as well as organizational effectiveness.

1.5 Scope of HRM

The scope of HRM is indeed vast. All major activities in the working life of a worker – from
the time of his or her entry into an organization until he or she leaves the organizations
comes under the purview of HRM.
The major HRM activities include HR planning, job analysis, job design, employee hiring,
employee and executive remuneration, employee motivation, employee maintenance,
industrial relations and prospects of HRM.

The scope of Human Resources Management extends to:

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All the decisions, strategies, factors, principles, operations, practices, functions,

activities and methods related to the management of people as employees in any type of
organization.
All the dimensions related to people in their employment relationships, and all the
dynamics that flow from it.

The scope of HRM is really vast. All major activities n the working life of a worker – from
the time of his or her entry into an organization until he or she leaves it comes under the
purview of HRM. American Society for Training and Development (ASTD) conducted
fairly an exhaustive study in this field and
identified nine broad areas of activities of HRM.
These are given below:
Human Resource Planning
Design of the Organization and Job
Selection and Staffing
Training and Development
Organizational Development
Compensation and Benefits
Employee Assistance
Union/Labour Relations
Personnel Research and Information System
a) Human Resource Planning: The objective of HR Planning is to ensure that the
organization has the right types of persons at the right time at the right place. It prepares
human resources inventory with a view to assess present and future needs, availability
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and possible shortages in human resource. Thereupon, HR Planning forecast demand

and supplies and identify sources of selection. HR
Planning develops strategies both long-term and short-term, to meet the man-power
requirement.
b) Design of Organization and Job: This is the task of laying down organization structure,
authority, relationship and responsibilities. This will also mean definition of work contents
for each position in the organization. This is done by “job description”. Another important
step is “Job specification”.
Job specification identifies the attributes of persons who will be most suitable for each job
which is defined by job description.

c) Selection and Staffing: This is the process of recruitment and selection of staff. This
involves matching people and their expectations with which the job specifications and
career path available within the organization.
d) Training and Development: This involves an organized attempt to find out training
needs of the individuals to meet the knowledge and skill which is needed not only to
perform current job but also to fulfil the future needs of the organization.
e) Organizational Development: This is an important aspect whereby “Synergetic effect”
is generated in an organization i.e., healthy interpersonal and inter-group relationship
within the organization.
f) Compensation and Benefits: This is the area of wages and salaries administration
where wages and compensations are fixed scientifically to meet fairness and equity
criteria. In addition, labour welfare measures are involved which include benefits and
services.
g) Employee Assistance: Each employee is unique in character, personality, expectation
and temperament. By and large each one of them faces problems everyday. Some are
personal some are official. In their case he or she remains worried. Such worries must be
removed to make him or her more productive and happier.
h) Union-Labour Relations: Healthy Industrial and Labour relations are very important for
enhancing peace and productivity in an organization. This is one of the areas of HRM.
i) Personnel Research and Information System: Knowledge on behavioral science and
industrial psychology throws better insight into the workers expectations, aspirations and
behaviour.
Advancement of technology of product and production methods have created working
environment which are much different from the past. Globalization of economy has
increased competition
many fold. Science of ergonomics gives better ideas of doing a work more conveniently
by an employee. Thus, continuous research in HR areas is an unavoidable requirement.
It must also take special care for improving exchange of information through effective
communication systems on a continuous basis especially on moral and motivation. HRM
is a broad concept; personnel management (PM) and Human resource development
(HRD) are a part of HRM.
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1.6 Objectives of HRM

The primary objective of HRM is to ensure the availability of competent and willing
workforce to an organization. The specific objectives include the following:
1) Human capital : assisting the organization in obtaining the right number and types of
employees to fulfill its strategic and operational goals
2) Developing organizational climate: helping to create a climate in which employees are
encouraged to develop and utilize their skills to the fullest and to employ the skills and
abilities of the workforce efficiently
3) Helping to maintain performance standards and increase productivity through effective
job design; providing adequate orientation, training and development; providing
performance-related feedback; and ensuring effective two-way communication.
4) Helping to establish and maintain a harmonious employer/employee relationship
5) Helping to create and maintain a safe and healthy work environment

6) Developing programs to meet the economic, psychological, and social needs of the
employees and helping the organization to retain the productive employees
7) Ensuring that the organization is in compliance with provincial/territorial and federal
laws affecting the workplace (such as human rights, employment equity, occupational
health and safety, employment standards, and labour relations legislation). To help the
organization to reach its goals
8) To provide organization with well-trained and well-motivated employees
9) To increase the employees satisfaction and self-actualization
10) To develop and maintain the quality of work life
11) To communicate HR policies to all employees.
12) To help maintain ethical polices and behavior.
The above stated HRM objectives can be summarized under four specific objectives:
societal, organizational, and functional and personnel.
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1) Societal Objectives: seek to ensure that the organization becomes socially responsible
to the needs and challenges of the society while minimizing the negative impact of such
demands upon the organization. The failure of the organizations to use their resources
for the society’s benefit in ethical ways may lead to restriction.
2) Organizational Objectives: it recognizes the role of HRM in bringing about
organizational effectiveness. It makes sure that HRM is not a standalone department, but
rather a means to assist the organization with its primary objectives. The HR department
exists to serve the rest of the
organization.
3) Functional Objectives: is to maintain the department’s contribution at a level
appropriate to the organization’s needs. Human resources are to be adjusted to suit the
organization’s demands. The department’s value should not become too expensive at the
cost of the organization it serves.
4) Personnel Objectives: it is to assist employees in achieving their personal goals, at
least as far as these goals enhance the individual’s contribution to the organization.
Personal objectives of employees must be met if they are to be maintained, retained and
motivated. Otherwise, employee performance and satisfaction may decline giving rise to
employee turnover.
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Functions of HRM
Human Resources management has an important role to play in equipping organizations
to meet the challenges of an expanding and increasingly competitive sector. Increase in
staff numbers, contractual diversification and changes in demographic profile which
compel the HR managers to reconfigure the role and significance of human resources
management. The functions are responsive to current staffing needs, but can be proactive
in reshaping organizational objectives. All the functions of HRM are correlated with the
core objectives of HRM (Table 1.1). For example personal objectives is sought to be
realized through functions like remuneration, assessment etc.
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HR management can be thought of as seven interlinked functions taking place within

organizations, as depicted in Figure 1.3 Additionally, external forces—legal, economic,
technological, global, environmental, cultural/geographic, political, and social—
significantly affect how HR functions are designed, managed, and changed. The functions
can be grouped as follows:
Strategic HR Management: As a part of maintaining organizational competitiveness,
strategic planning for HR effectiveness can be increased through the use of HR metrics
and HR technology. Human resource planning (HRP) function determine the number and
type of employees needed to accomplish organizational goals. HRP includes creating
venture teams with a balanced skill-mix, recruiting the right people, and voluntary team
assignment. This function analyzes and determines personnel needs in order to create
effective innovation teams. The basic HRP strategy is staffing and employee
development.
Equal Employment Opportunity: Compliance with equal employment opportunity
(EEO) laws and regulations affects all other HR activities.
Staffing: The aim of staffing is to provide a sufficient supply of qualified individuals
to fill jobs in an organization. Job analysis, recruitment and selection are the main
functions under staffing.
Workers job design and job analysis laid the foundation for staffing by identifying what
diverse people do in their jobs and how they are affected by them. Job analysis is the
process of describing the nature of a job and specifying the human requirements such as
knowledge, skills, and experience needed to perform the job. The end result of job
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analysis is job description. Job description spells out work duties and activities of
employees. Through HR planning, managers anticipate the future supply of and demand
for employees and the nature of workforce issues, including the retention of employees.
So HRP precedes the actual selection of people for organization. These factors are used
when recruiting applicants for job openings. The selection process is concerned with
choosing qualified individuals to fill those jobs. In the selection function, the most qualified
applicants are selected for hiring from among the applicants based on the extent to which
their abilities and skills are matching with the job.
Talent Management and Development: Beginning with the orientation of new
employees, talent management and development includes different types of training.
Orientation is the first step towards helping a new employee to adjust himself to the new
job and the employer. It is a method to acquaint new employees with particular aspects
of their new job, including pay and benefit programmes, working hours and company rules
and expectations. Training and Development programs provide useful means of assuring
that the employees are capable of performing their jobs at acceptable levels and also
more than that. All the organizations provide training for new and in experienced
employee. In addition, organization often provide both on the job and off the job training
programmes for those employees whose jobs are undergoing change.
Likewise, HR development and succession planning of employees and managers is
necessary to prepare for future challenges. Career planning has developed as result of
the desire of many employees to grow in their jobs and to advance in their career. Career
planning activities include assessing an individual employee’s potential for growth and
advancement in the organization. Performance appraisal includes encouraging risk
taking, demanding innovation, generating or adopting new tasks, peer evaluation,
frequent evaluations, and auditing innovation processes.

This function monitors employee performance to ensure that it is at acceptable levels.

This strategy appraises individual and team performance so that there is a link between
individual innovativeness and company profitability. Which tasks should be appraised and
who should assess employees’ performance are also taken into account.
Total Rewards: Compensation in the form of pay, incentives and benefits are the
rewards given to the employees for performing organizational work. Compensation
management is the method for determining how much employees should be paid for
performing certain jobs. Compensation affects staffing in that people are generally
attracted to organizations offering a higher level of pay in exchange for the work
performed. To be competitive, employers develop and refine their basic compensation
systems and may use variable pay programs such as incentive rewards, promotion from
within the team, recognition rewards, balancing team and individual rewards etc. This
function
uses rewards to motivate personnel to achieve an organization’s goals of productivity,
innovation and profitability. Compensation is also related to employee development in
that it provides an important incentive in motivating employees to higher levels of job
performance to higher paying jobs in the organization. Benefits are another form of
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compensation to employees other than direct pay for the work performed. Benefits include
both legally required items and those offered at employer’s discretion. Benefits are
primarily related to the area of employee maintenance as they provide for many basic
employee needs.
Risk Management and Worker Protection: HRM addresses various workplace risks
to ensure protection of workers by meeting legal requirements and being more responsive
to concerns for workplace health and safety along with disaster and recovery planning.
Employee and Labor Relations: The relationship between managers and their
employees must be handled legally and effectively. Employer and employee rights must
be addressed. It is important to develop, communicate, and update HR policies and
procedures so that managers and employees alike know what is expected. In some
organizations, union/management relations must be addressed as well. The term labor
relation refers to the interaction with employees who are represented by a trade union.
Unions are organization of employees who join together to obtain more voice in decisions
affecting wages, benefits, working conditions and other aspects of
employment. With regard to labour relations the major function of HR personnel includes
negotiating with the unions regarding wages, service conditions and resolving disputes
and grievances.

1.8 Role of HRM

The role of HRM is to plan, develop and administer policies and programs designed to
make optimum use of an organizations human resources. It is that part of management
which is concerned with the people at work and with their relationship within enterprises.
Its objectives are: (a) effective utilization of human resources, (b) desirable working
relationships among all members of the organizations, and (c) maximum individual
development. Human resources function as primarily administrative and professional. HR
staff
focused on administering benefits and other payroll and operational functions and didn’t
think of themselves as playing a part in the firm’s overall strategy.
HR professionals have an all-encompassing role. They are required to have a thorough
knowledge of the organization and its intricacies and complexities. The ultimate goal of
every HR person should be to develop a linkage between the employee and organization
because employee’s commitment to the organization is crucial.

The first and foremost role of HR personnel is to impart continuous education to the
employees about the changes and challenges facing the country in general and their
organization in particular. The employees should know about the balance sheet of the
company, sales progress, and diversification of plans, share price movements, turnover
and other details about the company. The HR professionals should impart such
knowledge to all employees through small booklets, video films and lectures.
The primary responsibilities of Human Resource managers are:
To develop a thorough knowledge of corporate culture, plans and policies.
To act as an internal change agent and consultant
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To initiate change and act as an expert and facilitator

To actively involve in company’s strategy formulation
To keep communication line open between the HRD function and individuals and
groups both
within and outside the organization\
To identify and evolve HRD strategies in consonance with overall business strategy.
To facilitate the development of various organizational teams and their working
relationship with
other teams and individuals.
To try and relate people and work so that the organization objectives are achieved
efficiently and
effectively.
To diagnose problems and determine appropriate solution particularly in the human
resource
areas.
To provide co-ordination and support services for the delivery of HRD programme and
services
To evaluate the impact of an HRD intervention or to conduct research so as to identify,
develop or
test how HRD In general has improved individual and organizational performance.
Different management gurus have deliberated different roles for the HR manager based
on the major responsibilities that they full fill in the organization. Few of the commonly
accepted models are enumerated
below.
Pat Mc Lagan has suggested nine roles that are played by HR practitioners
1. To bring the issues and trends concerning an organization’s external and internal
people to the attention of strategic decision makers and to recommend long term
strategies to support
organizational excellence and endurance.
2. To design and prepare HR systems and actions for implementation so that they can
produce
maximum impact on organizational performance and development.
3. To facilitate the development and implementation of strategies for transforming one’s
own
organization by pursuing values and visions.
4. To create a positive relationship with the customer’s by providing them with the best
services; to utilize the resources to the maximum and to create commitment among the
people who help the organization to meet the customers’ needs whether directly
connected or indirectly connected to the organization.
5. To identify the learning needs hence to design and develop structured learning
programmes and materials to help accelerate learning for individuals and groups.
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6. To enable the individuals and groups to work in new situations and to expend \and
change their views so that people in power move from authoritarian to participative
models of leadership.
7. To help employees to assess their competencies, values and goals so that they can
identify, plan and implement development plans.
8. He also assists the individual employee to add values in the workplace and to focus on
the interventions and interpersonal skills for helping people change and sustain change.
9. He assesses the HRD practices and programmes and their impact and to communicate
results so that the organization and its people accelerate their change and development.
According to Dave Ulrich HR play’s four key roles.
1. Strategic Partner Role-turning strategy into results by building organizations that create
value;
2. Change Agent Role- making change happen, and in particular, help it happen fast
3. Employees Champion Role—managing the talent or the intellectual capital within a firm
4. Administrative Role—trying to get things to happen better, faster and cheaper.
The role HR in organizations has undergone an extensive change and many
organizations have gradually oriented themselves from the traditional personnel
management to a human resources management approach.
The basic approach of HRM is to perceive the organization as a whole. Its emphasis is
not only on production and productivity but also on the quality of life. It seeks to achieve
the paramount development of human resources and the utmost possible socio-economic
development.

Current Classification of HR roles

According to R.L Mathis and J. H. Jackson (2010) several roles can be fulfilled by HR
management. The nature and extent of these roles depend on both what upper
management wants HR management to do and what competencies the HR staff have
demonstrated. Three roles are typically identified for HR. The focus of each of them, as
shown in Figure 1.is elaborated below:

1. Administrative Role of HR
The administrative role of HR management has been heavily oriented to administration
and recordkeeping including essential legal paperwork and policy implementation. Major
changes have happened in the administrative role of HR during the recent years. Two
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major shifts driving the transformation of the administrative role are: Greater use of
technology and Outsourcing.
Technology has been widely used to improve the administrative efficiency of HR and the
responsiveness of HR to employees and managers, more HR functions are becoming
available electronically or are being done on the Internet using Web-based technology.
Technology is being used in most HR activities, from employment applications and
employee benefits enrollments to e-learning using Internet-based resources.

Increasingly, many HR administrative functions are being outsourced to vendors. This

outsourcing of HR administrative activities has grown dramatically in HR areas such as
employee assistance (counseling), retirement planning, benefits administration, payroll
services, and outplacement services.
2. Operational and Employee Advocate Role for HR
HR managers manage most HR activities in line with the strategies and operations that
have been identified by management and serves as employee “champion” for employee
issues and concerns.
HR often has been viewed as the “employee advocate” in organizations. They act as the
voice for employee concerns, and spend considerable time on HR “crisis management,”
dealing with employee problems that are both work-related and not work-related.
Employee advocacy helps to ensure fair and equitable treatment for employees
regardless of personal background or circumstances.
Sometimes the HR’s advocate role may create conflict with operating managers.
However, without the HR advocate role, employers could face even more lawsuits and
regulatory complaints than they do now.
The operational role requires HR professionals to cooperate with various departmental
and operating managers and supervisors in order to identify and implement needed
programs and policies in the organization. Operational activities are tactical in nature.
Compliance with equal employment opportunity
and other laws is ensured, employment applications are processed, current openings are
filled through interviews, supervisors are trained, safety problems are resolved, and wage
and benefit questions are answered. For carrying out these activities HR manager
matches HR activities with the strategies of the
organization.

3. Strategic Role for HR

The administrative role traditionally has been the dominant role for HR. However, as
Figure 1.4 indicates that a broader transformation in HR is needed so that significantly
less HR time and fewer HR staffs are used just for clerical work.
Differences between the operational and strategic roles exist in a number of HR areas.
The strategic HR role means that HR professionals are proactive in addressing business
realities and focusing on future business needs, such as strategic planning, compensation
strategies, the performance of HR, and measuring its results. However, in some
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organizations, HR often does not play a key role in formulating the strategies for the
organization as a whole; instead it merely carries them out through HR activities.
Many executives, managers, and HR professionals are increasingly seeing the need for
HR management to become a greater strategic contributor to the “business” success of
organizations. HR should be responsible for knowing what the true cost of human capital
is for an employer. For example, it may cost
two times key employees’ annual salaries to replace them if they leave. Turnover can be
controlled though HR activities, and if it is successful in saving the company money with
good retention and talent management strategies, those may be important contributions
to the bottom line of organizational performance. The role of HR as a strategic business
partner is often described as “having a seat at the table,” and contributing to the strategic
directions and success of the organization. That means HR is involved in devising
strategy in addition to implementing strategy. Part of HR’s contribution is to have financial
expertise and to produce financial results, not just to boost employee morale or
administrative efficiencies.
Therefore, a significant concern for chief financial officers (CFOs) is whether HR
executives are equipped to help them to plan and meet financial requirements.
However, even though this strategic role of HR is recognized, many organizations still
need to make significant progress toward fulfilling it. Some examples of areas where
strategic contributions can be made by HR are:
Evaluating mergers and acquisitions for organizational “compatibility,” structural
changes, and staffing needs
Conducting workforce planning to anticipate the retirement of employees at all levels
and identify workforce expansion in organizational strategic plans
Leading site selection efforts for new facilities or transferring operations to international
outsourcing
locations based on workforce needs
Instituting HR management systems to reduce administrative time, equipment, and
staff by using HR technology
Working with executives to develop a revised sales
compensation and incentives plan as new products
It is the era when for the competitive triumph of the organization there is a need to involve
HRM significantly in an integrated manner, which demands such capabilities from the HR
specialists. The role of HR shifted from a facilitator to a functional peer with competencies
in other functions, and is acknowledged as an equal partner by others. The HR is
motivated to contribute to organizational objectives of profitability and customer
satisfaction, and is seen as a vehicle for realization of quality development. The
department has a responsibility for monitoring employee satisfaction, since it is seen as
substitute to
customer satisfaction.
According to McKinsey’s 7-S framework model HR plays the role of a catalyst for the
organization. According to this framework, effective organizational change is a complex
relationship between seven S’s. HRM is a total matching process between the three Hard
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S’s (Strategy, Structure and Systems) and the four Soft S’s (Style, Staff, Skills and Super-
ordinate Goals). Clearly, all the S’s have to complement each other and have to be
aligned towards a single corporate vision for the organization to be effective. It has to be
realized that most of the S’s are determined directly or indirectly by the way Human
Resources are managed, and therefore, HRM must be a part of the total business
strategy.
1.9 HRM in the New Millennium
Human Resources have never been more indispensable than today. The competitive
forces that we face today will continue to face in the future demanding organizational
excellence. In order to achieve this extended quality, organization’s need to focus on
learning, quality development, teamwork, and
reengineering. These factors are driven by the way organizations implement things and
how employees are treated.
1. HR Can Help in Dispensing Organizational Excellence: To achieve this paradigm shift
in the organization excellence there is a need for organizations to reform the way in which
work is carried out by the Human Resource department. By designing an entirely new
role and agenda that results in enriching the organization’s value to customers, investors
and employees, HR can help in delivering organizational excellence. This can be carried
out by helping line managers and senior managers in moving planning from the
conference room to the market place and by becoming an expert in the way work is
organized and executed. HR should be a representative of the employees and should
help the organization in improving its capacity for change. HR will help the organizations
in facing the competitive challenges such as globalization, profitability through growth,
technology, intellectual capital, and other competitive challenges that the companies are
facing while adjusting to uncontrollably challenging changes in business environment.
The
novel role of HR is to rapidly turn strategy into action; to manage processes intelligently
and efficiently; to maximize employee contribution and commitment and to construct
favorable conditions for flawless change.
2. Human Resource Should be a Strategy Partner: HR should also become a partner in
strategy executions by propelling and directing serious discussions of how the company
should be organized to carry out its strategy.
Creating the conditions for this discussion involves four steps. First HR need to define an
organizational architecture by identifying the company’s way of doing business. Second,
HR must be held responsible for conducting an organizational audit. Third, HR as a
strategic partner needs to identify methods for restoring the parts of the organizational
architecture that need it. Fourth and finally, HR must take stock of its own work and set
clear priorities. In their new role as administrative experts, they will need to shed their
traditional image and still make sure all routine work for the company is done well.
3. HR Accountability Should be Fixed to Ensure Employee Commitment: HR must be held
accountable for ensuring that employees feel committed to the organization and
contribute fully. They must take responsibility for orienting and training line management
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about the importance of high employee morale and how to achieve it. The new HR should
be the voice of employees in management discussions.
The new role for HR might also involve suggesting that more teams be used on some
projects or that employees be given more control over their own work schedules.
4. The New HR Must Become a Change Agent: The new HR must become a change
agent, which is building the organization’s capacity to embrace and capitalize on change.
Even though they are not primarily responsible for executing change it is the duty of the
HR manager to make sure that the organization carries out the changes framed for
implementation.
5. Improving the Quality of HR: The most important thing that managers can do to drive
the new mandate for HR is to improve the quality of the HR staff itself. Senior executives
must get beyond the stereotypes of HR professionals as incompetent support staff and
unleash HR’s full potential
6. Change in Employment Practices: The balance sheet of an organization shows human
resource as an expense and not as a Capital. In the information age, it is perceived that
the machines can do the work more efficiently than most people however; technology to
work is dependent on people.
The challenges for Employment Practice in the New Millennium will require that there
should be strategic involvement of the people and labour-management partnerships as
they both have to take organization
ahead.
7. Benchmarking Tool Must be Mastered by HR Professionals: HR professionals must
master benchmarking, which is a tool for continuous improvement- directing the human
side associated with the strategic path adopted by the organization. Through this, HR
department will start appreciating the changes happening within and outside the
environment while expanding the knowledge about how to add value to decision making
at the highest level of the organization.
8. Aligning Human Resources to Better Meet Strategic Objectives: Too often
organizations craft their strategy in a vacuum. Some organizations don’t even include key
people during strategy formulation resulting in lacunae between the actual problems and
the solutions implemented- as critical inputs are not sought from those individuals who
are supposed to implement the new strategies.
A past CEO of Sony once said that organizations have access to the same technology
and the same information. The difference between any two organizations is the “people”-
the human resource. Empowering the workforce is an essential tool for aligning human
resources with the achievement of corporate objectives. It is the duty of HR manager to
hire talented human resource and to provide them with a positive environment where they
will be able to utilize their skills and potentials and to create an environment in which
these individuals are comfortable taking risks.
9. Promote from Within and Invest in Employees: Promoting employees from within sends
a powerful message that the organization’s employees are valued. New blood and fresh
ideas often come from newcomers to the organization. To avoid stagnation of the firm,
new ideas and approaches are critical. Yet to improve employee morale, promoting
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individuals from within the organization is essential. This communicates that the
organization values their employees and invests in their human resources.
10. Review the Recruitment and Selection Process: A key element of human resource
planning is ensuring that the supply of appropriate employees (with the right skill mix) is
on board when needed. This requires a proactive approach whereby the organization
anticipates its needs well in advance. It is important
to identify the competencies being sought. That is, the criteria upon which selection
decisions are to be made should be decided in advance. A firm must identify those skill
sets required by employees to be successful. Charles O’Reilly suggests that companies
should hire for attitude (perhaps even more so than technical skills). That is, the fit of the
individual with the values of the organization and the culture of the firm should also be
considered when selecting employees. This has been referred to as the person-
organization fit.
It is no longer enough to simply consider the person’s fit (and technical skill set) with the
job. Part of the employee’s fit with the organization should focus on the core values and
beliefs of the organization. This will increase employees’ contributions to the overall
success of the organization if they already embrace
the core values of the organization prior to their selection
11. Communicate Mission and Vision: If employees are expected to contribute to the
attainment of the organization’s strategic objectives, they must understand what their role
is. This can be achieved in part by clearly communicating the mission and vision
statements of the firm. The old adage is certainly true. If a person does not know where
he or she is going, any road will get him or her there.
The mission communicates the identity and purpose of the organization. It provides a
statement of who the firm is and what their business is. Only those employees who
understand this purpose can contribute to the fullest extent possible. The vision statement
provides a picture of the future state of the firm. It should be a stretch to attain. This keeps
all the organization’s employees pulling in the same direction with a common end point.
It is much easier to align human resources with corporate objectives when these
employees are familiar with the mission and vision of the firm.
As the mission and vision statements are articulated, organizational members begin to
more closely embrace they’re very meaning on an individual level. These statements
provide a road map leading employee down the road to achieve organizational objectives.
Employees then identify how they can contribute their unique talents toward the
attainment of these goals.
12. Use Teams to Achieve Synergy: Synergy can be concisely defined as “two plus two
equals five”. In other words, the whole is greater than the sum of the parts. So much more
can be achieved as people work together. Through the effective use of teams,
organizations can often achieve synergy. Team goals, however, must be aligned with the
organization’s strategic objectives. Aligning team objectives with overall corporate
objectives ensures that people are working toward the same goal.

Summary
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It is critical that today’s organizations align their human resources to better meet strategic
objectives. A failure to do so results in wasted time, energy, and resources. Organizations
are more likely to achieve this alignment with their corporate objectives when they review
their recruitment and selection processes for fit, communicate the mission and vision
statements, use joint goal setting, design an appropriate reward system, empower the
workforce, promote and develop from within, and use teams to achieve synergy.
Human Resource Management is the management function that helps the managers to
plan, recruit, select, train, develop, remunerate and maintain members for an
organization. HRM has four objectives of societal, organizational, functional and personal
development. An organization must have set policies; definite procedures and well-
defined principles relating to its personnel and these contribute to the effectiveness,
continuity and stability of the organization.