Human resource management Definition: - Edwin Flippo defies HRM as “planning, organizing, directing, controlling of procurement, development, compensation, integration, maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved.” Features of HRM or characteristics or nature: 1. HRM involves management functions like planning, organizing, directing and controlling 2. It involves procurement, development, maintenance of human resource 3. It helps to achieve individual, organizational and social objectives 4. HRM is a mighty disciplinary subject. It includes the study of management psychology communication, economics and sociology. 5. It involves team spirit and team work. Evolution of HRM The evolution of HRM can be traced back to Kautilya Artha Shastra where he recommends that government must take active interest in public and private enterprise. He says that government must provide a proper procedure for regulating employee and employee relation In the medieval times there were examples of kings like Allaudin Khilji who regulated the market and charged fixed prices and provided fixed salaries to their people. This was done to fight inflation and provide a decent standard of living During the pre independence period of 1920 the trade union emerged. Many authors who have given the history of HRM say that HRM started because of trade union and the First World War. The Royal commission in 1931 recommended the appointment of a labour welfare officer to look into the grievances of workers. The factory act of 1942 made it compulsory to appoint a labour welfare officer if the factory had 500 or more than 500 workers. The international institute of personnel management and national institute of labour management were set up to look into problems faced by workers to provide solutions to them. The Second World War created awareness regarding workers rights and 1940’s to 1960’s saw the introduction of new technology to help workers. The 1960’s extended the scope of human resource beyond welfare. Now it was a combination of welfare, industrial relation, administration together it was called personnel management. With the second 5 year plan, heavy industries started and professional management became important. In the 70’s the focus was on efficiency of labour wile in the 80’s the focus was on new technology, making it necessary for new rules and regulations. In the 90’s the emphasis was on human values and development of people and with liberalization and changing type of working people became more and more important there by leading to HRM which is an advancement of personnel management. Scope of HRM/functions of HRM The scope of HRM refers to all the activities that come under the banner Of HRM. These activities are as follows: 1. Human resources planning :- Human resource planning or HRP refers to a process by which the company to identify the number of jobs vacant, whether the company has excess staff or shortage of staff and to deal with this excess or shortage. 2. Job analysis design :- Another important area of HRM is job analysis. Job analysis gives a detailed explanation about each and every job in the company. Based on this job analysis the company prepares advertisements. 3. Recruitment and selection :- Based on information collected from job analysis the company prepares advertisements and publishes them in the news papers. This is recruitment. A number of applications are received after the advertisement is published, interviews are conducted and the right employee is selected thus recruitment and selection are yet another important area of HRM. 4. Orientation and induction :- Once the employees have been selected an induction or orientation program is conducted. This is another important area of HRM. The employees are informed about the background of the company, explain about the organizational culture and values and work ethics and introduce to the other employees. 5. Training and development :- Every employee goes under training program which helps him to put up a better performance on the job. Training program is also conducted for existing staff that have a lot of experience. This is called refresher training. Training and development is one area were the company spends a huge amount. 6. Performance appraisal :- Once the employee has put in around 1 year of service, performance appraisal is conducted that is the HR department checks the performance of the employee. Based on these appraisal future promotions, incentives, increments in salary are decided. 7. Compensation planning and remuneration :- There are various rules regarding compensation and other benefits. It is the job of the HR department to look into remuneration and compensation planning. 8. Motivation, welfare, health and safety :- Motivation becomes important to sustain the number of employees in the company. It is the job of the HR department to look into the different methods of motivation. Apart from this certain health and safety regulations have to be followed for the benefits of the employees. This is also handled by the HR department. 9. Industrial relations :- Another important area of HRM is maintaining co-ordinal relations with the union members. This will help the organization to prevent strikes lockouts and ensure smooth working in the company. Challenges before the HR manager/before modern personnel management Personnel management which is know as human resource management has adapted itself to the changing work environment, however these changes are still taking place and will continue in the future therefore the challenges before the HR manager are 1. Retention of the employees :- One of the most important challenge the HR manager faces is retention of labour force. Many companies have a very high rate of labour turnover therefore HR manager are required to take some action to reduce the turnover 2. Multicultural work force :- With the number of multi cultural companies are increasing operations in different nations. The work force consists of people from different cultures. Dealing with each of the needs which are different the challenge before the HR manager is integration of multicultural labour work force. 3. Women in the work force :- The number of women who have joined the work force has drastically increased over a few years. Women employees face totally different problems. They also have responsibility towards the family. The organization needs to consider this aspect also. The challenge before the HR manager lies in creating gender sensitivity and in providing a good working environment to the women employees. 4. Handicapped employees :- This section of the population normally faces a lot of problems on the job, very few organization have jobs and facilities specially designed for handicapped workers. Therefore the challenge before the HR manager lies in creating atmosphere suitable for such employees and encouraging them to work better. 5. Retrenchment for employees :- In many places companies have reduced the work force due to changing economic situations, labourers or workers who are displaced face sever problems. It also leads to a negative atmosphere and attitude among the employees. There is fear and increasing resentment against the management. The challenge before the HR manager lies in implementing the retrenchment policy without hurting the sentiments of the workers, without antagonizing the labour union and by creating positive attitude in the existing employees. 6. Change in demand of government :- Most of the time government rules keep changing. While a lot of freedom is given to companies some strict rules and regulations have also been passed. The government has also undertaken the disinvestment in certain companies due to which there is fear among the employees regarding their job. The challenge before the HR manager lies in convincing employees that their interest will not be sacrificed. 7. Initiating the process of change :- Changing the method of working, changing the attitude of people and changing the perception and values of organization have become necessary today. Although the company may want to change it is actually very difficult to make the workers accept the change. The challenge before the HR manager is to make people accept change. Significance/importance/need of HRM HRM becomes significant for business organization due to the following reasons. 1. Objective :- HRM helps a company to achieve its objective from time to time by creating a positive attitude among workers. Reducing wastage and making maximum use of resources etc. 2. Facilitates professional growth :- Due to proper HR policies employees are trained well and this makes them ready for future promotions. Their talent can be utilized not only in the company in which they are currently working but also in other companies which the employees may join in the future. 3. Better relations between union and management :- Healthy HRM practices can help the organization to maintain co-ordinal relationship with the unions. Union members start realizing that the company is also interested in the workers and will not go against them therefore chances of going on strike are greatly reduced. 4. Helps an individual to work in a team/group :- Effective HR practices teach individuals team work and adjustment. The individuals are now very comfortable while working in team thus team work improves. 5. Identifies person for the future :- Since employees are constantly trained, they are ready to meet the job requirements. The company is also able to identify potential employees who can be promoted in the future for the top level jobs. Thus one of the advantages of HRM is preparing people for the future. 6. Allocating the jobs to the right person :- If proper recruitment and selection methods are followed, the company will be able to select the right people for the right job. When this happens the number of people leaving the job will reduce as the will be satisfied with their job leading to decrease in labour turnover. 7. Improves the economy :- Effective HR practices lead to higher profits and better performance by companies due to this the company achieves a chance to enter into new business and start new ventured thus industrial development increases and the economy improves. Job analysis, job design, job evolution Define job analysis A job is defined as a collection of duties and responsibilities which are given together to an individual employee. Job analysis is the process of studying and collecting information relating to operations and responsibilities of a specific job. It can be explained with the help of the following diagram Job analysis Job description Job specification Job title/ name of the job Qualification Working hours Qualities Duties and responsibilities Experience Working conditions Family background Salary and incentives Training Machines to be handled on the job Interpersonal skills As mentioned in the above table job analysis is divided into 2 parts a) Job description where the details regarding the job are given. b) Job specification where we explain the qualities required by people applying for the job. Need/importance/purpose/benefits of job analysis Def: - A job is defined as a collection of duties and responsibilities which are given together to an individual employee. Job analysis is the process of studying and collecting information relating to operations and responsibilities of a specific job. The following are the benefits of job analysis. 1. Organizational structure and design :- Job analysis helps the organization to make suitable changes in the organizational structure, so that it matches the needs and requirements of the organization. Duties are either added or deleted from the job. 2. Recruitment and selection :- Job analysis helps to plan for the future human resource. It helps to recruit and select the right kind of people. It provides information necessary to select the right person. 3. Performance appraisal and training/development :- Based on the job requirements identified in the job analysis, the company decides a training program. Training is given in those areas which will help to improve the performance on the job. Similarly when appraisal is conducted we check whether the employee is able to work in a manner in which we require him to do the job. 4. Job evaluation :- Job evaluation refers to studying in detail the job performance by all individual. The difficulty levels, skills required and on that basis the salary is fixed. Information regarding qualities required, skilled levels, difficulty levels are obtained from job analysis. 5. Promotions and transfer :- When we give a promotion to an employee we need to promote him on the basis of the skill and talent required for the future job. Similarly when we transfer an employee to another branch the job must be very similar to what he has done before. To take these decisions we collect information from job analysis. 6. Career path planning :- Many companies have not taken up career planning for their employees. This is done to prevent the employee from leaving the company. When we plan the future career of the employee, information will be collected from job analysis. Hence job analysis becomes important or advantageous. 7. Labour relations :- When companies plan to add extra duties or delete certain duties from a job, they require the help of job analysis, when this activity is systematically done using job analysis the number of problems with union members reduce and labour relations improve. 8. Health and safety :- Most companies prepare their own health and safety, plans and programs based on job analysis. From the job analysis company identifies the risk factor on the job and based on the risk factor safety equipments are provided. 9. Acceptance of job offer :- When a person is given an offer/appointment letter the duties to be performed by him are clearly mentioned in it, this information is collected from job analysis, which is why job analysis becomes important. Methods of job analysis Def: - A job is defined as a collection of duties and responsibilities which are given together to an individual employee. Job analysis is the process of studying and collecting information relating to operations and responsibilities of a specific job. There are different methods used by organization to collect information and conduct the job analysis. These methods are 1. Personal observation :- In this method the observer actually observes the concerned worker. He makes a list of all the duties performed by the worker and the qualities required to perform those duties based on the information collected, job analysis is prepared. 2. Actual performance of the job :- In this method the observer who is in charge of preparing the job analysis actually does the work himself. This gives him an idea of the skill required, the difficulty level of the job, the efforts required etc. 3. Interview method :- In this method an interview of the employee is conducted. A group of experts conduct the interview. They ask questions about the job, skilled levels, and difficulty levels. They question and cross question and collect information and based on this information job analysis is prepared. 4. Critical incident method :- In this method the employee is asked to write one or more critical incident that has taken place on the job. The incident will give an idea about the problem, how it was handled, qualities required and difficulty levels etc. critical incident method gives an idea about the job and its importance. (a critical means important and incident means anything which takes place in the job) 5. Questioner method :- In this method a questioner is provided to the employee and they are asked to answer the questions in it. The questions may be multiple choice questions or open ended questions. The questions decide how exactly the job analysis will be done. The method is effective because people would think twice before putting anything in writing. 6. Log records :- Companies can ask employees to maintain log records and job analysis can be done on the basis of information collected from the log record. A log record is a book in which employees record /write all the activities performed by them on the job. The records are extensive as well as exhausted in nature and provide a fair idea about the duties and responsibilities in any job. 7. HRD records :- Records of every employee are maintained by HR department. The record contain details about educational qualification, name of the job, number of years of experience, duties handled, any mistakes committed in the past and actions taken, number of promotions received, area of work, core competency area, etc. based on these records job analysis can be done. Job design Definitions: - Job design is the process of a) Deciding the contents of the job. b) Deciding methods to carry out the job. c) Deciding the relationship which exists in the organization. Job analysis helps to develop job design and job design matches the requirements of the job with the human qualities required to do the job. Factors affecting job design: - There are various factors which affect job design in the company. They can be explained with the help of diagram. Factors affecting job design Organizational factors Environmental factors Behavioral factors 1. Task characteristics 1. Employee availability and ability 1. Feed back 2. Process or flow of work in organization 2. Social and cultural expectations 2. Autonomy 3. Ergonomics 3. Variety 4. Work practices I] Organizational factors :- Organizational factors to refer to factors inside the organization which affect job design they are a) Task characteristics :- Task characteristics refer to features of the job that is depending on the type of job and the duties involved in it the organization will decide, how the job design must be done. Incase the company is not in a position to appoint many people; a single job may have many duties and vice versa. b) The process or flow of work in the organization :- There is a certain order in which jobs are performed in the company. Incase the company wishes it could combine similar job and give it to one person this can be done if all the jobs come one after the other in a sequence. c) Ergonomics : Ergonomics refers to matching the job with physical ability and characteristics of the individual and in providing an office environment which will help the person to complete the jobs faster and in a comfortable manner. d) Work practices :- Every organization has different work practices. Although the job may be the same the method of doing the job differs from company to company. This is called work practice and it affects job design. II] Environmental factors :- Environmental factors which affect job design are as follows a) Employee availability and ability :- Certain countries face the problem of lack of skilled labour. They are not able to get employees with specific education levels for jobs and have to depend on other countries due to this job design gets affected. b) Social and cultural expectations :- The social and cultural conditions of every country is different so when an MNC appoints an Indian it has to take into account like festivals, auspicious time, inauspicious time, etc. to suit the Indian conditions. This applies to every country and therefore job design will change accordingly. III] Behavioral factors :- Job design is affected by behavioral factors also. These factors are a) Feedback :- Job design is normally prepared on the basis of job analysis and job analysis requires employee feedback based on this employee feedback all other activities take place. Many employees are however not interested in providing a true feedback because of fear and insecurity. This in turn affects job deign. b) Autonomy :- Every worker desires a certain level of freedom to his job effectively. This is called autonomy. Thus when we prepare a job design we must see to it that certain amount of autonomy is provided to the worker so that he carries his job effectively. c) Variety :- When the same job is repeated again and again it leads to burden and monotony. This leads to lack of interest and carelessness on the job. Therefore, while preparing job design certain amount of variety must be provided to keep the person interested in the job. Methods of job design There are various methods in which job design can be carried out. These methods help to analysis the job, to design the contents of the and to decide how the job must be carried out .these methods are as follows :- I. Job rotation II. Job enlargement III. Job enrichment I. Job Rotation :- Job rotation involves shifting a person from one job to another, so that he is able to understand and learn what each job involves. The company tracks his performance on every job and decides whether he can perform the job in an ideal manner. Based on this he is finally given a particular posting. Job rotation is done to decide the final posting for the employee e.g. Mr. A is assigned to the marketing department whole he learns all the jobs to be performed for marketing at his level in the organization .after this he is shifted to the sales department and to the finance department and so on. He is finally placed in the department in which he shows the best performance Job rotation gives an idea about the jobs to be performed at every level. Once a person is able to understand this he is in a better understanding of the working of organization Advantages of job rotation 1. Avoids monopoly :- Job rotation helps to avoid monopoly of job and enable the employee to learn new things and therefore enjoy his job 2. Provides an opportunity to broaden one’s knowledge :- Due to job rotation the person is able to learn different job in the organization this broadens his knowledge 3. Avoiding fraudulent practice :- In an organization like bank jobs rotation is undertaken to prevent employees from doing any kind of fraud i.e. if a person is handling a particular job for a very long time he will be able to find loopholes in th system and use them for his benefit and indulge ( participate ) in fraudulent practices job rotation avoids this. Disadvantages of Job Rotation 1. Frequent interruption :- Job rotation results in frequent interruption of work .A person who is doing a particular job and get it comfortable suddenly finds himself shifted to another job or department .this interrupts the work in both the departments 2. Reduces uniformity in quality :- Quality of work done by a trained worker is different from that of a new worker .when a new worker I shifted or rotated in the department, he takes time to learn the new job, makes mistakes in the process and affects the quality of the job. 3. Misunderstanding with the union member :- Sometimes job rotation may lead to misunderstanding with members of the union. The union might think that employees are being harassed and more work is being taken from them. In reality this is not the case. Job enlargement There are various methods in which job design can be carried out. These methods help to analysis the job, to design the contents of the and to decide how the job must be carried out .these methods are as follows :- (5 marks each) I. Job rotation II. Job enlargement III. Job enrichment II. Job enlargement :- Job enlargement is another method of job design when any organization wishes to adopt proper job design it can opt for job enlargement. Job enlargement involves combining various activities at the same level in the organization and adding them to the existing job. It increases the scope of the job. It is also called the horizontal expansion of job activities. Jon enlargement can be explained with the help of the following example - If Mr. A is working as an executive with a company and is currently performing 3 activities on his job after job enlargement or through job enlargement we add 4 more activities to the existing job so now Mr. A performs 7 activities on the job. It must be noted that the new activities which have been added should belong to the same hierarchy level in the organization. By job enlargement we provide a greater variety of activities to the individual so that we are in a position to increase the interest of the job and make maximum use of employee’s skill. Job enlargement is also essential when policies like VRS are implemented in the company. Advantages of job enlargement 1. Variety of skills :- Job enlargement helps the organization to improve and increase the skills of the employee due to organization as well as the individual benefit. 2. Improves earning capacity :- Due to job enlargement the person learns many new activities. When such people apply foe jobs to other companies they can bargain for more salary. 3. Wide range of activities :- Job enlargement provides wide range of activities for employees. Since a single employee handles multiple activities the company can try and reduce the number of employee’s. This reduces the salary bill for the company. Disadvantages of job enlargement 1. Increases work burden :- Job enlargement increases the work of the employee and not every company provides incentives and extra salary for extra work. Therefore the efforts of the individual may remain unrecognized. 2. Increasing frustration of the employee :- In many cases employees end up being frustrated because increased activities do not result in increased salaries. 3. Problem with union members :- Many union members may misunderstand job enlargement as exploitation of worker and may take objection to it. Job enrichment There are various methods in which job design can be carried out. These methods help to analysis the job, to design the contents of the and to decide how the job must be carried out .these methods are as follows :- (5 marks each) I. Job rotation II. Job enlargement III. Job enrichment III. Job enrichment :- Job enrichment is a term given by Fedric herzberg. According to him a few motivators are added to a job to make it more rewarding, challenging and interesting. According to Herzberg the motivating factors enrich the job and improve performance. In other words we can say that job enrichment is a method of adding some motivating factors to an existing job to make it more interesting. The motivating factors can be a) Giving more freedom. b) Encouraging participation. c) Giving employees the freedom to select the method of working. d) Allowing employees to select the place at which they would like to work. e) Allowing workers to select the tools that they require on the job. f) Allowing workers to decide the layout of plant or office. Job enrichment gives lot of freedom to the employee but at the same time increases the responsibility. Some workers are power and responsibility hungry. Job enrichment satisfies the needs of the employees. Advantages of job enrichment 1. Interesting and challenging job :- When a certain amount of power is given to employees it makes the job more challenging for them, we can say that job enrichment is a method of employee empowerment. 2. Improves decision making :- Through job enrichment we can improve the decision making ability of the employee by asking him to decide on factory layout, method and style of working. 3. Identifies future managerial caliber :- When we provide decision making opportunities to employees, we can identify which employee is better that other in decision making and mark employees for future promotion. 4. Identifies higher order needs of employees :- This method identifies higher order needs of the employee. Abraham maslow’s theory of motivation speaks of these higher order needs e.g. ego and esteemed needs, self actualization etc. These needs can be achieved through job enrichment. 5. Reduces work load of superiors :- Job enrichment reduces the work load of senior staff. When decisions are taken by juniors the seniors work load is reduced. Disadvantages of job enrichment 1. Job enrichment is based on the assumptions that workers have complete knowledge to take decisions and they have the right attitude. In reality this might not be the case due to which there can be problems in working. 2. Job enrichment has negative implications ie. Along with usual work decision making work is also given to the employees and not many may be comfortable with this. 3. Superiors may feel that power is being taken away from them and given to the junior’s. This might lead to ego problems. 4. This method will only work in certain situations. Some jobs already give a lot of freedom and responsibility; this method will not work for such jobs. 5. Some people are internally dissatisfied with the organization. For such people no amount of job enrichment can solve the problem. Human resource planning/manpower planning Def. of human resource planning:- Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management. From human resource planning the organization identifies how many people it has currently and how many people will be required in future. Based on this information major human resource decisions are taken. Process of HRP/MP//steps in HRP/MP Human resource planning can be defined as the process of identifying the number of people required by an organization in terms of quantity and quality. All human resource management activities start with human resource planning. So we can say that human resource planning is the principle/primary activity of human resource management. The process of HRP involves various steps they can be explained with the help of the following diagram. Human resource planning Personal requirement Personal supply Forecast Forecast Yes No Personal Personal Surplus Shortage (100=125) (100=75) Layoff Overtime Termination Recruitment/hiring VRS Subcontracting 1. Personnel requirement forecast :- This is the very first step in HRP process. Here the HRP department finds out department wise requirements of people for the company. The requirement consists of number of people required as well as qualification they must posses. 1. Personnel supply forecast :- In this step, HR department finds out how many people are actually available in the departments of the company. The supply involves/includes number of people along with their qualification. 2. Comparison:- Based on the information collected in the 1st and 2nd step, the HR department makes a comparison and finds out the difference. Two possibilities arise from this comparison a. No difference :- It is possible that personnel requirement = personnel supplied. In this case there is no difference. Hence no change is required. b. Yes, there is a difference :- There may be difference between supply and requirement. The difference may be i. Personnel surplus ii. Personnel shortage 3. Personnel surplus :- When the supply of personnel is more than the requirement, we have personnel surplus. We require 100 people, but have 125 people. That is we have a surplus of 25 people. Since extra employees increase expenditure of company the company must try to remove excess staff by methods of i. Layoff ii. Termi