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HUMAN RESOURCE MANAGEMENT BUSN 302 Course Objectives: By the end of the course, each student should be able to: Realize the importance of HRM How HRM can contribute to productivity and organizational performance Recognize methods for staffing the organization. How to train and develop employees Conducting a job analysis Gain an appreciation “appraisal, compensation, development. Course Assessment and Grading First Exam 15% Assignments 25% Midterm Exam 15% Final Exam 40% Participation in and contribution to class discussions 5% Text Book: Introduction to Human Resource Management, OXFORD UNIVERSITY, Ashly Pinnington & Tony Edwards. 2011 Objectives By the end of this Block, you would be able to: Understand why relationships are so important for organizations. Also able to identify which relationships are most important. Identify the main tasks of HRM and MM. Identify central aspects of HRM philosophy of how to manage people. Also understand the role of recruitment and selection in achieving the strategic objectives of the organization. Explain the way the employment relationships are changing and how they are affecting the employees. Understand the process of career development in an organization. HRM Definition of HRM ‘ A distinctive approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce using an array of )cultural(, )structural( and )personnel techniques(’. (Storey, 1995, p.5) The HRM function is responsible for managing relationships with staff and the Marketing function is responsible for managing relationships with customer. Human Resource Management (HRM) • New way thinking about how we can mange people. • Not one theory its set of theory • Employee expect to treated fairly • We can use it in private & public sectors • in private sector fails mean out of business • In public dependent on employees’ motivation, skills, & service orientation. So, Human Resources are the people in the organization Human Resource Management is a series of activities and decisions carried out by all line managers that help employees get the job done and achieve their objectives Human Resource Department consist of specially trained professionals who help managers carry out human resource management responsinsibilities 8 The relationship with employees is a key source of competitive advantage: Half the total populations in the advanced economies are in some form of paid work or employment and are thus directly party to an employment relationship. From the employees' perspective: - the nature of that relationship is important in influencing their standards of living influencing their job interest their job satisfaction their working hours their health and well-being From the employers perspective, the nature and quality of the employment relationship can influence the amount of time spent in conflict with employees the need for direct supervision staff turnover the degree of willing contribution versus resistance the quality of the product or service offered to customers the viability of the Org. What are the differences between personnel Management and HRM? Traditional Personnel department HRM Treated all the activities of the department as separate not coherently interlocked. this is the key difference between them Activities such as Training and appraisal are treated as the responsibility of personnel "specialists" not General Manager - Personal management concentrates on controlled access to courses and formal training interventions that occur off the job. Treat the activities as inter-related aspects of a coherent HRM strategy All managers are involved in the implementation of HRM and it is seen as a key part of an organization's business strategy -HRM is more concerned with creating learning companies. - HRM emphasize managing & developing individuals and the culture -Clear picture of traditional personnel of the organizations. management supportive of the coexistence of management and unions. -Teamwork, managing climate and culture, are all part of the new HRM -Personal management operates under approach. collective bargaining arrangements in which unions have sufficient power that management has to negotiate and work with them. Compare and construct the internal and external recruitment? Internal Recruiting Advantages 1- 2- disadvantages Less expensive and Quicker Increases motivation within organizations Misses the diversity from Misses chances on new ideas of newcomers bring to the organization External Recruiting from Job Markets Advantages ideas disadvantages 1- Brings new organization into 2- Source of increasing number of employees expansion etc. the Expensive consuming the Can reduce for employees organizations and Time moral of within List and briefly discuss at least 5 tasks of the HRM function? 1. 2. 3. 4. 5. 6. 7. 8. Recruitment, selection and staffing (ensure that the organization has enough staff with the appropriate qualifications and experience to carry out the work required.) Induction, training and development (will help newcomers understand more quickly what is expected of them) Appraisal and evaluation (to determine how far individuals are meeting individual performance targets) Reward management Staff management and record keeping Employee relations Personnel record keeping Discipline procedures and dismissal The major part of the HRM of function in Org is to ensure that there are enough people available, with the right skills and training, to be able to perform the tasks necessary to keep the organization running and to achieve strategic objectives. Soft HRM Start in 1981 gives more recognition to the needs of employees and the importance of their commitment to the organization (employee oriented). Harvard model Work System (4) Employee Influence (1) H.R. Flow (2) Reword Systems (3) 4 C’s of HRM Policy when making decisions managers should consider the four C’s: Commitment Competence Congruence (Compatibility) Cost effectiveness Guest (UK) Second soft HRM model came from David Guest HRM in UK should be about design policies & practices to achieve four out comes: 1. Strategic integration (planning/implementation) 2. High employee commitment 3. High workforce flexibility 4. High quality workforce HRM: Trade Union and Industrial Relations Industrial Relations (IR): defined as study of the rules governing employment. These are: Written collective agreement (negotiated agreement between employers and employees) Unilateral regulation (those rules that are imposed by an employer) Rules that originate from law (legal regulation). History of British IR Tradition of voluntarism (legal regulation for employment relationship is limited). Employment relationship is by: - voluntary agreement of management and trade union. - through management action only. Features of Voluntarism No right of law for employees to take strike action. Employees can be dismissed in case of strike as it is said to be breaking the contract of employment. Collective agreement as a result of management – trade union negotiation is not legally binding. Either party can ignore parts of agreement if they wish. Absence of any legal provision that forces the employer to consult the employees on employee-related issues. Important development in IR 1. 2. 3. Employers were hostile towards employees in end of 19th century and beginning of 20th century. Employees who tried to organize resistance against management control were punished. After World War II, emphasis on trade unionism increased, duel development: 4. 5. Trade union got favourable legal climate. Growth of trade union membership. Multi-employer bargaining system introduced for private sector wherein negotiations took place between members of group of employers and trade union representatives. Public sector encouraged unionization. 6. 7. 8. 9. Multi-employer bargaining determined the pay and service conditions of majority of employees. Donovan Commission set up in mid 60s to investigate the state of British IR, stressed on doing away with multiemployer bargaining and going for formalization of plant level bargaining. In IR Act 1971, collective agreements were made legally binding and introduction of heavy financial penalties on trade unions responsible for unfair practice. In 1974, this Act was repealed by change of government. Changes in IR in 1980s First important change was weakening of trade unions effect on employers and decline in trade union membership. Decline in collective bargaining process. Fewer issues were taken up for negotiation as compared to earlier. Decentralization of levels of bargaining i.e. from multi-employer to single employer bargaining. Role of joint regulation declined while role of unilateral regulation increased which supplemented growth in practices associated with HRM (performance related pay schemes, quality control, appraisal). Between 1979 and 1997, number of efforts taken by UK government to weaken trade union affect. Several political and economic developments reduced the affect of trade union. Recent developments In 1997, when labour party came to power in the government, the attention was paid to create statutory right for trade union. Minimum Ware Rate was fixed by Low Pay Commission in the UK. British government signed the Social Chapter of EU and passed 2 directives concerning Right to Parental Leave and Creation of European Work Council in MNCs. Main activities of HRM 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. Recruitment, selection and staffing Induction, training and development Appraisal and evaluation Reward management Discipline procedures and dismissal Grievance handling Staff management and record keeping Employee relations Personal record keeping Welfare functions. Employee Resourcing and Careers Employee Resourcing: this process aims at supplying an organization with the right quality and number of people to achieve its strategy. HR Flow: 3 stages: – Inflow: recruitment and selection. – Internal flow: employee’s work roles, promotion, career satisfaction and development. – Outflow: retirement, resignation and retrenchment. HR Flow Management HR Flow Management: determining a pattern of flow that considers effect on employee commitment to the organization, ability of organization to adapt to changing circumstances and the culture of the organization. HR flow has affect on: – Employee commitment – Level of organizational competence – Well being of local community and society HR FLOW Organizational Requirements Business objectives And plans HR flow plans Flow Policy systems And practices 1. Inflow Recruitment, selection, Orientation, socialization 2. Internal flow Performance and potential Evaluation Career development Promotion, training 3. Outflow Termination, retirement Social institutions Govt. legislation, unions, public policy, educational institutions Individual needs Personal objectives And life plans Individual career Development plans 3 perspectives on HR flow policies Individual perspective (career) Organizational perspective (4 cultures) Societal perspective (national culture) 1. Individual Perspective Study of how employee resourcing affects individual careers. Careers are short or long or changed due to change of work. Careers are important for all. Factors like privatization and de-regulation have made large organizations flatter with less number of layers resulting into less opportunity for promotion, social advancement and higher status. This leads to either adaptation to whatever available or career dissatisfaction. Career dissatisfaction: when organization is unable to provide new challenging opportunities to ambitious, high performing employees. Career Anchors Ed Schein introduced this concept. These are attributes, motives, attitudes and values that shape individual careers. There are 6 career anchors: 1. 2. 3. 4. 5. 6. ■ Managerial competence Technical-functional competence Security Creativity Autonomy Independence If 6 career anchors are present in employee’s work, leads to career satisfaction and commitment in the organization. Determinants for success of HR flow Success of HR flow is when individual career needs are matched with organizational needs. Employee can be satisfied when he is flexible to change and agrees to different working pratices. 2. Organizational Perspective Organizational culture (OC) sets norms and expectations of how people should be treated and serve the needs of the organization. OC affects employee resourcing. Different cultural differences create 4 OCs (Fons Trompenaars) and these are: – – – – Family Eiffel Tower Guided Missile Incubator Family Supports leadership from top. Expects love and respect from employers. HR flow policies are not clearly mentioned. HR flow policies depend on decisions made by a few top people in the organization. Loyalty demanded from employees and in return employees demand to be treated like members of the family. Eiffel Tower Bureaucratic and mechanistic. People treated as human resources. People expected to follow organizational job description, rules and procedures. Hierarchical. Guided Missile Task centered culture. Structured organization with clearly set goals. Employees have MBO and rewarded with performance related pay. High performers assigned more challenging tasks. Incubator Opportunity for personal growth and change. Emphasis on innovation and creativity. Employees recruited and laid off according to workload. Guided missile and Eiffel Tower have well documented and formulated business strategy. Systematic methods exist in the above 2 OC. 3. Societal Perspective – National Culture Influence of society on HR flow. Employers and managers must understand these influences in order to create and implement HR policy effectively. Employees should understand the influence of culture and society in order to manage their careers and adapt to situations confidently for individual effectiveness. Managing HR Flow Managing Inflow (recruitment and selection) – Recruitment is the process of attracting candidates to apply for vacant jobs (+ve process). – Selection is the process of choosing the right person for the job from among pool of candidates (-ve process). Recruitment ® R is the first stage of a relationship in which both applicant and organization send out signals and make decisions as to whether to go on to the next stage of employment contract. It is a process of mutual exchange and negotiation where both parties try to influence each other’s expectations. It is a communication function. Organization tries to promote image of themselves for attracting potential employees. External recruitment: by media advertisement, employment agencies, placement consultants, career fairs, campus interviews, website opportunities. Internal recruitment: By newsletters, vacancy bulletins. 9.3 Recruitment & Selection: Putting The Right People Into The Right Jobs HOW DO MANAGERS CHOOSE THE BEST PERSON FOR A JOB? The process of locating and attracting qualified applicants for jobs open in the organization is referred to as recruitment There are two types of recruitment: internal and external 9.3 Recruitment & Selection: Putting The Right People Into The Right Jobs 1. Making people already employed by the organization aware of job openings is called internal recruiting Companies use job postings where information about job vacancies and qualifications is posted on bulletin boards, in newsletters, and on the organization’s intranet to find internal personnel 2. Attracting job applicants from outside the organization is external recruiting The most effective source of external employees is referrals Internal Recruiting: Advantages/Disadvantages Advantages: Employees tend to be inspired to greater effort and loyalty The whole process of advertising, interviewing, and so on is cheaper There are fewer risks. Internal candidates are already known and are familiar with the organization McGraw-Hill/Irwin Disadvantages: Restricts the competition for positions and limits the pool of fresh talent and viewpoints It may encourage employees to assume that longevity and seniority will automatically result in promotion Whenever a job is filled, it creates a vacancy elsewhere in the organization © 2006 The McGraw-Hill Companies, Inc. All rights reserved. External Recruiting: Advantages/Disadvantages Advantages: Applicants have specialized knowledge and experience Applicants have fresh viewpoints McGraw-Hill/Irwin Disadvantages : The recruitment process is longer and more expensive The risks are higher because the persons hired are less well known © 2006 The McGraw-Hill Companies, Inc. All rights reserved. 9.3 Recruitment & Selection: Putting The Right People Into The Right Jobs Because people are often disillusioned after taking a job, some companies provide realistic job previews where candidates are given both positive and negative features of the jobs and the organization before being hired The process of screening job applicants and hiring the best candidate is the selection process There are three types of selection tools: background information, interviewing, and 9.3 Recruitment & Selection: Putting The Right People Into The Right Jobs 1. Background Information - application forms and resumes are basic sources of information about job applicants 2. Interviewing - can be unstructured (asks probing questions to find out what the applicant is like), or structured (asks each applicant the same questions and compares responses to a standardized set of answers) Important aspects of the case are: Process of recruitment and selection has to be considered in a wider context. They form part of the overall manpower planning process within organization. Recruitment includes projecting positive image of the organization continuously to all parties. There are many things to think about when planning a recruitment drive. Selection Important communication and relationship function within an organization. 2-way function. Main methods of selection are: – Interview – Test (to know about aptitude about literacy, numeracy or personality) – Assessment center (use of a combination of techniques for selection) Induction and Socialization From organizational side, socialization is the process which helps to shape and maintain organizational culture. From employees’ side, it is a means of knowing job and firm. Function of HR dept. to provide induction programmes and other informal means of helping the new employees to understand what is required of them. Induction helps to acquire skills, knowledge and capabilities to carry out their role in an expected standard. Securing Competitive advantage through human resources Please see the fig. 3.1 pg.34 in Block 2 for seeing how HR functions create competitive advantage. Employee Involvement A way of improving employer-employee relationships. Participative activities that make the employees to feel more involved with the organization for which they work. Builds commitment. Ways of involving are: – Two way communication – Involvement of employees in solving work related problems. – Team working – Self managed teams. – Share ownership – Profit sharing e.g. of financial involvement in Scott Bader case. Managing Outflow Early retirement at 50 / 55 age. Lay off (low performers). Outflow affected by national employment legislation. For cost reduction and retaining people who truly have competence and attitude to changing work environment. HR Planning Means of representing the inflow, internal flow and out flow of human resources. Quantitative methods of analyzing an organization’s HR needs under changing conditions and developing personnel policies required for long term effectiveness of organization. Learning and Development Learning and development are indispensable components of strategic HRM. Learning: the process whereby individuals acquire knowledge, skills and attitudes through experience, reflection, study and instruction. Training: a planned and sustained effort to modify or develop knowledge /skill /attitude through learning experience, to achieve effective performance in an activity or range of activities. Education: A process and a series of activities which aim at enabling an individual to assimilate and develop knowledge, skills, value and understanding that are not simply related to a narrow field of activity but allow a broad range of problems to be defined, analyzed and solved. Learning Organization LO: it is an organization that facilitates the learning of all its members and continuously transforms itself. Creating LO is a strategy for sustainable development in which more organizations may take a greater interest in the future, but as yet it is still mainly a vision of what might be. Purpose of Training and Development To assess and address skill deficiencies. To act as a catalyst for change. To give the organization a competitive edge. To encourage a learning climate. Kind of Training 1. 2. 3. 4. 5. On the job training Off the job training Mentoring Coaching Lateral moves/secondments. 9.3 Recruitment & Selection: Putting The Right People Into The Right Jobs Employment Tests - legally considered to consist of any procedure used in the employment selection decision process Three common employment tests are: -ability tests - measure physical abilities, strength, stamina, and so on -performance tests - measure performance on actual job tasks -personality tests - measure personality traits like adjustment, energy, sociability, independence, and so on using tests like the Myers-Briggs assessment 9.4 Orientation, Training, & Development HOW DO MANAGERS HELP NEW HIRES BE SUCCESSFUL? Helping newcomers fit smoothly into the job and the organization is referred as orientation Orientation should provide information on: -the job routine -the organization’s mission and operations -the organization’s work rules and employee benefits 9.4 Orientation, Training, & Development Managers can also improve employee performance by providing training and development Training refers to educating technical and operational employees in how to better do their current jobs – Short-Term skills oriented Development refers to educating professionals and managers in the skills they need to do their jobs in the future – Long-Term career oriented 9.4 Orientation, Training, & Development Figure: 9.2: Five Steps in the Training Process 9.4 Orientation, Training, & Development Training that takes place at work is called on-the-job-training Training that takes place using classroom programs, videotapes, and so on is off-thejob training When computers are used to provide additional help or reduce instructional time, there is computer-assisted instruction 9.5 Performance Appraisal HOW SHOULD MANAGERS ASSESS THEIR EMPLOYEE’S PERFORMANCE? Performance appraisal consists of assessing an employee’s performance and providing him or her with feedback This provides employees with an understanding of how they are doing relative to the firm’s objectives and it helps with their development and training 9.5 Performance Appraisal There are two types of appraisals: 1. Objective appraisals are based on facts and are often numerical 2. Subjective appraisals are based on a manager’s perceptions of an employee’s traits (attitudes, initiative, leadership) or behaviors (specific observable aspects of performance) Most performance appraisals are done by managers, but sometimes information comes from other sources like peers and subordinates 9.5 Performance Appraisal There are two types of feedback: 1. Formal appraisals are conducted at specific times throughout the year and are based on performance measures that have been established in advance 2. Informal appraisals are conducted on an unscheduled basis and consist of less rigorous indications of employee performance Performance Appraisals Establish Standards – – – Understandable Measurable Reasonable Communicate Standards 4. Discuss Results 5. Take Action 1. Corrective 2. Reward 6. Use Results to Make Decisions Evaluate Performance McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Major Uses of Performance Appraisals Identify training needs Use as a promotion tool Recognize workers’ achievements McGraw-Hill/Irwin Evaluate hiring process Judge effectiveness of orientation process Use as a basis for terminating workers © 2006 The McGraw-Hill Companies, Inc. All rights reserved. How to Give Employees Feedback: Take a problemsolving approach, avoid criticism, and treat employees with respect Be specific in describing the employee’s present performance and the improvement you desire Get the employee’s input McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. How to Give Employees Feedback: If criticism is warranted, criticize the act, not the employee McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Learning Cycle (LC) Learning organization is about individual and organization change and about creating conditions for better learning. Organization LC: learn collectively. Kolb’s LC: 4 stages process for continuously revising and creating knowledge. – Concrete experience (generating ideas through experience) – Reflective observation (individual integrates and reflects on experience) – Abstract conceptualization (drawing conclusions and formation of concepts) – Testing the concepts or ideas. (Fig. 8.3 pg. 193) Individual learning styles According to Honey and Mumford, individuals have a mixture of four learning styles normally one or two more preferred than other styles. These are: – Activist (open minded, sociable, welcomes changes) – Reflector (Good listener, tolerant, sees different perspective) – Theorist (rational, objective, analytical) – Pragmatist (experimenter, adaptable. Practical). Organizational Learning There are four stages in OL (according to Dixon): – Generate – Integrate – Interpret – Act Employee Development Need for a proactive approach to Employee Development. Employee development is the responsibility of everyone in the LO. Helps in being innovative in organization. Through informal methods and on the job practice. Off the job learning programs are also important. Trainers and HR facilitators act as change agents, bringing about innovation. Components of Innovative Organization according to Galbraith 1. 2. 3. 4. Structure: structure must encourage idea generators, sponsors and orchestrators. Processes: planning ahead for innovation, idea generating, blending ideas and managing innovative products. Reward System: Should provide opportunities, autonomy, promotion and recognition for successful employees who are innovators. People: Must be selected and encouraged to self select and then must be provided training and development. Kinds of Employee Development 1. Outdoor development (learning activities aim to motivate employees to improve their leadership, teamwork, problem solving, decision making and creativity skills). – 2. 3. Pre-course briefing, post course feedback and organize follow up activities to ensure the maximum transfer of learning into work place. Technology based learning and OL: use of computers, IT methods, A/V aids for training and development. Management Development: aim is to make managers more innovative, risk taking and proactive. Internationalization Growth of international trade. Growth of MNC has its impact on HRM. Activities of MNCs have grown. Intra-enterprise trade within MNCs. Increased speed of international communication. Finances raised from different parts of world. Senior management being represented by people of different countries. MNCs have national characteristics of the country of their own. Implications of national identity in MNCs for HRM MNCs are good channel through which HRM policies move across the globe. MNC is medium for transferring knowledge. Employment practices of parent company extends to subsidiaries overseas. US/Japanese HRM practices being used across border. Decisions on whose career should be given prominence and who should occupy senior positions in international organizations Ethnocentric: all key positions at headquarters and subsidiaries are filled by parent country nationals. Polycentric: host country nationals are recruited to manage subsidiaries in their own country and parent country nationals occupy key positions in corporate headquarters. Geocentric: the best people are sought for key jobs, regardless of their nationality. Regiocentric: People’s careers are limited to a particular geographical region and within this region, the best people are sought for key jobs, regardless of their nationality. Constraints from Host Country Differences in business systems of different countries act as constraints for MNCs. Open economy will accept the new firmmarket relationships. In cohesive, integrated business systems, MNCs will have to adapt their mode of operation to the host country. Legal framework of host country has affect on MNCs (constraint their freedom). Cultural differences between countries. Requires functional flexibility. 9.6 Managing Promotions, Transfers, Disciplining, & Dismissals WHO SHOULD BE PROMOTED, WHO SHOULD BE DISMISSED? Deciding who to promote, transfer, or dismiss are all part of the manager’s responsibilities Managers can recognize an employee’s superior performance by giving the individual a promotion When an employee is moved to a different job with similar responsibility, the employee has been transferred 9.6 Managing Promotions, Transfers, Disciplining, & Dismissals Employees that are not meeting expectations may be warned or reprimanded, and then disciplined There are three types of dismissals: -layoffs imply that the dismissal is temporary -downsizing is a permanent dismissal -firing implies that the dismissal is permanent and that there was cause for the dismissal Employee Replacement Promotion: moving an employee to a higher level position. Transfer: movement of an employee to a different job with similar responsibility. Disciplining & Demotion: poorly performing employees may be given a warning or reprimand and then disciplined. May be temporarily removed from his or her regular job or demoted—having his or her position, pay, and prerequisites taken away. Dismissal: Layoffs Downsizing Firings McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Reasons Why Employees are Transferred Solve organizational problems Broaden managers’ experience Retain manager’s interest and motivation Solve some employee problems McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Practical Action: The Right Way to Handle a Dismissal Give the employee a chance first Don’t delay the dismissal, and make sure it’s completely defensible Be aware how devastating a dismissal can be—both for the individual and to those remaining Offer assistance in finding another job McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Sexual Harassment Sexual Harassment: consists of unwanted sexual attention that creates an adverse work environment. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved. Sexual Harassment Guidelines for preventing sexual harassment: Don’t do uninvited touching, hugging, or patting of someone’s body. Don’t request or suggest sexual favors for rewards related to work or promotion. Don’t make suggestive jokes of a sexual nature, demeaning remarks, slurs, or obscene gestures. Don’t create sexual pictures or displays or written notes of a sexual nature. Don’t laugh at others’ sexually harassing words or behaviors. McGraw-Hill/Irwin © 2006 The McGraw-Hill Companies, Inc. All rights reserved.
