Introduction to Human Resource

Management
Task

You all have now become seniors and would have a junior batch. The class is required to organize
a fresher's party. Determine which all tasks are required to be done in terms of management of the
event.
The Management Process
What is HRM: Human Resource management
Human resource management is the process of acquiring, training, appraising and
compensating employees and of attending to their labor relations, health, safety
and fairness concerns. It includes functions like :

• Conducting Job analysis

• Recruiting candidates

• Selecting candidates

• Orienting and training new employees

• Compensating employees

• Providing incentives

• Appraising performance
Why Is Human Resource Management Important to All Managers?

1. Hire best talent from the industry.

2. Provide best training to employees
3. Improving the job performance of each person
4. To avoid personnel mistakes
5. To improve profits and performance
Line and Staff Aspects of Human Resource Management

Authority is the right to make decisions, to direct the work of others, and to
give orders. Managers usually distinguish between line authority and staff
authority.

➢ Line authority gives you the right to issue orders. It creates a

superior subordinate relationship.
➢ Staff authority gives you the right to advise others in the
organization. It creates an advisory relationship.
Line Manager’s HR Management Responsibilities

➢ Placing the right person in the right job

➢ Starting new employees in the organization (orientation)
➢ Training employees for jobs that are new to them
➢ Improving the job performance of each person
➢ Gaining creative cooperation and developing smooth working
relationships
➢ Interpreting the company policies and procedures
➢ Developing the abilities of each person
HR Manager Duties

1.A Line Function: Directing activities in his or her own department

2.A coordinative function: Coordinating personnel activities. Act as right

arm of the top executive

3.Staff function (assist and advise): Assist or advises the management to

understand the personnel aspects and in hiring, training, evaluating,
compensating employees.

Are the duties of both line and staff managers Individualistic??

Growth of HR

➢ It is a long journey

➢Personnel: treats workers as machines with some initiatives for their development.
Focuses on employee hiring, remunerating , training and harmony.

➢Welfare: canteen, medical, transport, house accommodation etc.

➢HRM: employees are an asset and need to be valued

➢Strategic HR: link people with long term development

➢SIHRM: Strategic International Human resource management

Trends shaping HRM

➢ Globalization Trends: economic integration, single global marketplace

➢ Technology advancement : Real time inventory management

➢ Competition trends

➢ Workforce Demographic Trends

➢ Diversity trends: diverse workforce based on gender, race, age, ethnicity etc.
Changing role of HRM

➢ Strategic human resource management – means formulating and executing

human resource policies and practices that produce those competencies and
behaviors among employees which helps the company to achieve its strategic
aims. It includes partnering with the top management in designing and executing
companies’ strategies.

➢ High Performance work systems- It is an integrated set of human resource

management policies and practices that produce superior employee performance.
Ex. Selective hiring, extensive training, self managed teams etc.
Changing role of HRM

➢ Evidence-based human resource management – is the use of data, facts, analytics, scientific
rigor, critical evaluation, and critically evaluated research/case studies to support human
resource management proposals, decisions, practices, and conclusions.

• Actual measurements

• Existing data

• Research studies

HR scorecard to measure the effectiveness and efficiency of HR function in an organization.

➢ Managing employee engagement

Skills needed for HRM

Four Proficiencies

➢HR proficiency: HR knowledge and skills

➢Business Proficiency : Knowledge of business

➢Leadership Proficiency: ability to lead the change

➢Learning Proficiency
Case: The Ordinary Heroes of the Taj

https://www.youtube.com/watch?v=vQGz1YRqBPw

Q1: What are the main learnings from the case?

Q2: What are the different HR processes adopted by Taj which differentiates it from other
organizations?

Q3: How do you explain the behavior of employees of Taj Hotel?

Q4: Do you think other organizations should emulate such practices?

Human Capital Management
➢ Human capital is the knowledge, skills, abilities and capacity to develop possessed by the
employees so that they can add value to the organization.

➢ It is a strategic approach to managing people that regards them as assets and emphasizes
that a competitive advantage and worthwhile returns are achieved by strategic investment in
those assets.

➢ Human capital management (HCM) transforms the traditional administrative functions of HR

department i.e. recruiting, training, payroll, compensation, and performance management—
into opportunities to drive engagement, productivity, and business value.

➢ It involves measuring the value of human capital which is an intangible asset of an

organization.
Human Capital Management
➢ The idea of HCM was originally proposed by Adam Smith and emphasized by Schultz.

➢ Schultz stated that Attributes that are valuable and can be augmented by appropriate
investment will be treated as human capital.

➢ HCM acts as a bridging concept between HR practices and business performance.

➢ HCM is related to RBV (VIRO) concept

➢ Valuable

➢ Rare

➢ Inimitable

➢ Organized to capture value

AIMS of Human Capital Management

➢ To determine the impact of people on business and their contribution towards

organizational performance.

➢ To demonstrate those HR practices which produce value for money.

➢ To provide guidance on future HR and business strategies.

➢ To provide data that will inform strategies and improve the effectiveness

Major aim is to enhance the value of organization’s human capital so that

business can perform successfully in short and longer term and can achieve
competitive advantage
Constituents of Human Capital
➢ Intellectual Capital: Defined as the stocks and flow of knowledge available to an
organization. These can be regarded as the intangible resources associated with people.
Some examples are talent, experience, intelligence, judgement, wisdom etc.

Intellectual capital together with tangible resources (money and physical assets), comprise the
market or total value of a business.

➢ Social Capital : Knowledge derived from networks of relationships within and outside the
organization. The features of social life – networks, norms and trust – that enable participants
to act together more effectively to pursue shared objectives.
Constituents of Human Capital
➢ Organizational Capital : Unit-level resource that is created from the emergence of
individuals’ knowledge, skills, abilities and other attributes. Example: Knowledge possessed
by an organization stored in databases, manuals etc.
Measuring Human Capital

Human capital management is concerned with measuring the value of people – establishing
their contribution to organizational performance in order to provide insight into the strengths and
weaknesses of the organization’s approach to managing its key resource.

Approaches representing the value of people are:

1. Absolute measures

2. Specific measures
Measuring Human Capital

1. Absolute Measures : indicate the total value of human capital in an organization.

i. A single rater makes an overall assessment using a scale including level of education,
training, skills etc. Example: rating provided by head of HR

ii. Multiple raters: Reduces individual bias but is still largely subjective.

iii. Aggregation of individual measures to a higher level of analysis (team or organization)

Measuring Human Capital

2. Specific measure: The selection and use of specific measures is dependent on the context of
the organization. These specifics could be as a result of data related

i. Recruitment and retention : length of service, cost per hire

ii. Skills, qualifications and competencies: training need analysis and training effectiveness

iii. Performance management: targets set and met; level of customer satisfaction

iv. Compensation: wage bill cost

This data can contribute to the measurement of absolute value of human capital but it also contribute
towards evidence based decisions on the development of HR strategy and systems.
Representing the value of people in different ways

Determining value focuses attention of the organization in enhancing the value of human capital
in order to enhance organizational performance.

➢ Value of people can be measured in financial ( cost per hire; profit per employee) and non financial
terms (skill base and level of capability in the organization)

Analysis of such data helps in providing a basis for HR planning and monitoring the effectiveness of HR
policies and practices.
Questions to be answered in HCM???

➢What do we want to know? ( success of our policies and practices)

➢How can we measure that? ( Engagement index, quality of hire)

➢Value created by our people ( customer satisfaction, effective staff development)