1.

Definition and Purpose of Human Resource Management (HRM)

●​ HRM Defined: Human Resource Management (HRM) involves managing the people in an
organization in a way that maximizes their productivity and aligns with the company's goals.
●​ Why is HRM Important?
○​ A company’s success depends largely on its workforce. HRM ensures the right people
are hired, trained, and motivated.
○​ For example, in a tech company like Google, HRM helps identify top programmers and
data scientists who can contribute to innovation.
●​ Key HRM Responsibilities:
○​ Recruitment & Selection: Finding the right candidates.
○​ Training & Development: Improving employee skills.
○​ Compensation & Benefits: Designing pay structures and incentives.
○​ Performance Management: Evaluating employee contributions.
○​ Legal Compliance: Ensuring adherence to labor laws.

Example: A large retail chain like Walmart uses HRM strategies to ensure stores are adequately
staffed with trained employees to handle customer service and sales.

2. The Ultimate Resource – Human Capital Management

●​ Why People Matter:

○​ In modern industries, such as technology and services, skilled employees are the most
critical assets.
○​ Employees bring creativity, innovation, and productivity—essential for a company’s
success.
●​ Why is Human Capital Management Important?
○​ Shift from manual labor to technical roles in industries like IT, green technology, and
healthcare.
○​ Skilled workers are harder to find due to demand for specialized expertise.
●​ Challenges Faced in Managing Human Capital:
○​ Skill Shortages: Lack of expertise in emerging fields like AI and biotechnology.
○​ Underemployment: Qualified individuals working jobs below their skill levels.
○​ Aging Workforce: As experienced professionals retire, there is a gap in talent
availability.

Example: Tesla focuses on hiring specialized engineers and technicians who can innovate in electric
vehicle technology and battery development.
ROLES OF AN HRM MANAGER:

●​ Developing & Implementing Staffing plan (Recruitment & Selection)

●​ Developing Workplace Policies
●​ Compensating the employees-working as the Benefactor for the company
●​ Making Retention Policies
●​ Providing Training and Development
●​ Dealing with Laws , Regulations………affecting Employment
●​ Providing Worker Protection
●​ Establishing Communication
●​ Creating Awareness about External Factors

3. Human Resource Planning Process (Five Steps Explained)

Human Resource Planning (HRP) ensures that a company has the right people, in the right roles, at
the right time.

Steps:

1.​ Human Resource Inventory:

○​ Creating a database listing employees' skills, education, work experience, and
certifications.
○​ Example: IBM maintains a global talent pool where employee skills are tracked for
project assignments.
2.​ Job Analysis:
○​ Defining the tasks and responsibilities for each job role.
○​ Job Description: Outlines duties and responsibilities.
○​ Job Specification: Lists the skills, qualifications, and experience required for the job.
○​ Example: A job description for a software engineer at Microsoft might specify
knowledge of Python, Java, and cloud technologies.
3.​ Assessing Future Demand:
○​ Predicting the need for certain skills based on market trends.
○​ Example: A cybersecurity firm might foresee a rising demand for penetration testers
due to increasing cyber threats.
4.​ Assessing Labor Supply:
○​ Determining if there is enough talent available internally and externally.
○​ Example: If a pharmaceutical company struggles to find local chemists, they may
explore remote work options.
5.​ Strategic HR Planning:
○​ Developing a comprehensive plan for recruiting, training, and retaining employees.
○​ Example: Google creates leadership development programs to prepare high-potential
employees for management roles.
4. Recruitment and Selection Process (Finding and Hiring the Right Talent)

Recruitment: Attracting and identifying potential candidates for a job.​

Selection: Choosing the most suitable candidate from the pool of applicants.

Steps in the Recruitment Process:

1.​ Job Posting: Announcing job openings internally and externally.

2.​ Application Screening: Reviewing applications for basic qualifications.
3.​ Interviews: Conducting multiple rounds of interviews to assess skills and cultural fit.
4.​ Skills Testing: Using tests to evaluate technical and soft skills.
5.​ Background Checks: Verifying past employment, education, and criminal history.
6.​ Probation Period: Temporary hiring for final assessment.

Types of Recruitment:

●​ Internal: Promotions or lateral moves.

●​ External: College job fairs, recruitment agencies, and online platforms like LinkedIn.
●​ HIRING CONTINGENT WORKER (part-time workers, temporary workers, seasonal workers,
interns, and co-op students.)

Example: Google’s hiring process involves coding challenges, group discussions, and behavioral
interviews to ensure both technical skill and cultural alignment.

5. Employee Training and Development

Purpose: Enhancing employee skills and knowledge to improve productivity and job satisfaction.

●​ Training focuses on short-term skills.

●​ Development focuses on long-term abilities.

Both include 3 steps:

(i) Assessing organization needs and employee skills to determine training needs;

(ii) Designing training activities to meet identified needs;

(iii) Evaluating the training effectiveness.

Key Types of Training:

1.​ Orientation: Introducing new employees to company policies and culture.

2.​ On-the-Job Training: Hands-on learning while performing job tasks.
3.​ Apprenticeship Programs: Working under an experienced mentor for specialized skills.
4.​ Online Training: E-learning modules for flexible training.
5.​ Job Simulation: Simulated job tasks for hands-on experience (e.g., pilot simulators).
 6.​ Vestibule Training: This type of training is often known as 'near the job training' because it
involves the creation of a simulated work environment near the primary production plant.
7.​ Off-the-Job Training

Example: Tesla trains its factory workers through job simulation programs to ensure they can handle
complex machinery efficiently.

6. Compensation and Benefits Management

Compensation: The financial and non-financial rewards given to employees for their work.​
Benefits: Additional perks provided beyond salary to improve job satisfaction.

Objectives of Compensation Policies:

●​ Attract Talent: Offer competitive pay to hire skilled workers.

●​ Retain Talent: Provide long-term benefits to reduce turnover.
●​ Motivate Performance: Link pay with performance to encourage productivity.

Types of Compensation:

1.​ Direct Compensation: Salaries, hourly wages, commissions, bonuses.

2.​ Indirect Compensation: Health insurance, paid leaves, wellness programs.

Common Pay Structures:

●​ Salary: Fixed monthly or annual payment.

●​ Hourly Wage: Pay based on the number of hours worked.
●​ Piecework: Pay based on the output produced.
●​ Commission Plans: Pay based on sales performance.
●​ Bonus Plans-monetary
●​ Profit Sharing Plans/Performance-based pay (annual)
●​ Gain-Sharing Plans (annual)
●​ Stock Options: Allow employees to purchase company shares at a lower price.

Example: Microsoft provides stock options and health insurance as part of its compensation
package to attract high-caliber talent.

FRINGE BENEFITS: FRINGE BENEFITS include sick-leave pay, vacation pay, pension plans, and
health plans that represent additional compensation to employees beyond base wages.

A.​ In recent years benefit programs grew faster than wages.

 B.​ Benefits account for about 30% OF PAYROLLS today.
C.​ Many employees want more fringe benefits instead of more salary to avoid higher taxes.

7. Performance Appraisal and Management

Performance Appraisal: A structured evaluation of an employee's work performance against pre-set

standards.

Steps in the Appraisal Process:

1.​ Setting Performance Standards: Defining measurable goals.

2.​ Communicating Standards: Informing employees about expectations.
3.​ Evaluating Performance: Measuring results against set benchmarks.
4.​ Providing Feedback: Discussing strengths and areas for improvement.
5.​ Corrective Actions: Offering additional training or support if needed.
6.​ Decision Making: Using performance data for promotions or terminations.

360-Degree Feedback: Collecting feedback from peers, supervisors, and subordinates for a holistic
review.

Example: General Electric uses a 360-degree feedback model where managers receive input from
multiple stakeholders to assess leadership performance.

8. Legal and Ethical Considerations in HRM

HRM is guided by laws to ensure fairness and equality in the workplace.

Ethical HR Practices:

1.​ Know the laws

2.​ Prioritize professional development
3.​ Be an ethical HR leader
○​ Commitment: “The desire to do the right thing regardless of the cost.”
○​ Consciousness: “The awareness to act consistently and apply moral convictions to daily
behavior.”
○​ Competency: “The ability to collect and evaluate information, develop alternatives, and
foresee potential consequences and risks.”
4.​ Confidentiality
5.​ Understand conflicts of interest
6.​ Implement diversity and inclusion practices

Example: A company implementing diversity quotas must ensure it does not compromise
merit-based hiring, avoiding reverse discrimination.
9. Diversity and Inclusion in HRM

●​ Why Diversity Matters:

○​ Diverse teams bring varied perspectives and drive innovation.
○​ Companies with diverse leadership perform better financially.

Diversity Strategies:

●​ Inclusive hiring practices.

●​ Equal growth opportunities for women and minorities.
●​ Anti-discrimination policies and sensitivity training.

Example: Procter & Gamble offers mentorship programs specifically designed to support female and
minority leadership.

10. HRM Challenges and Emerging Trends

●​ Challenges:
○​ Global talent shortages.
○​ Cost(Health care, Training, Hiring process)
○​ Remote work management.
○​ Rising employee expectations for work-life balance.
○​ Changing and Diverse Workforce
○​ Ethics(A decreased sense of employee loyalty)
●​ Emerging Trends:
○​ Hybrid work models.
○​ AI-driven recruitment tools.
○​ Focus on employee well-being and mental health.