MB0043 - Human Resource Management Semester-I Assignment set -I

MB0043 - Human Resource Management Semester-I

Assignment set -I

Q.1.Write down the difference between personnel management and HRM ?

Answer: Personnel management can be defined as obtaining, using and maintaining a satisfied workforce. It is a significant part of management concerned with employees at work and with their relationship within the organization. “Personnel management is the planning, organizing, compensation, integration and maintenance of people for the purpose of contributing to organizational, individual and societal goals.” “Personnel Management is that part which is primarily concerned with human resource of organization.”

Nature of Personnel Management

1. Personnel management includes the function of employment, development and compensation- These functions are performed primarily by the personnel management in consultation with other departments.
2. Personnel management is an extension to general management. It is concerned with promoting and stimulating competent work force to make their fullest contribution to the concern.
3. Personnel management exists to advice and assists the line managers in personnel matters. Therefore, personnel department is a staff department of an organization.
4. Personnel management lays emphasize on action rather than making lengthy schedules, plans, and work methods. The problems and grievances of people at work can be solved more effectively through rationale personnel policies.
5. It is based on human orientation. It tries to help the workers to develop their potential fully to the concern.
6. It also motivates the employees through its effective incentive plans so that the employees provide fullest co-operation.
7. Personnel management deals with human resources of a concern. In context to human resources, it manages both individual as well as blue- collar worker.

HRM

Human resource management (HRM, HR) is the management of an organization's employees^. This includes employment and arbitration in accord with the law, and with a company's directives.

Features of HRM

• Organizational management
• Personnel administration
• Manpower management
• Industrial management

But these traditional expressions are becoming less common for the theoretical discipline. Sometimes even employee and industrial relations are confusingly listed as synonyms, although these normally refer to the relationship between management and workers and the behavior of workers in companies.

The theoretical discipline is based primarily on the assumption that employees are individuals with varying goals and needs, and as such should not be thought of as basic business resources, such as trucks and filing cabinets.

Human Resource Management (HRM) is seen by practitioners in the field as a more innovative view of workplace management than the traditional approach. Its techniques force the managers of an enterprise to express their goals with specificity so that they can be understood and undertaken by the workforce and to provide the resources needed for them to successfully accomplish their assignments. As such, HRM techniques, when properly practiced, are expressive of the goals and operating practices of the enterprise overall. HRM is also seen by many to have a key role in risk reduction within organizations.

Personnel Management versus Human Resource Management

The view that there are more similarities than differences between personnel and HR management is shared by a number of authors. Legge, for instance, is tempted to say that there are “not a lot” differences between the two approaches, but nevertheless manages to detect some diverging aspects. These however cannot be qualified as substantial differences, but are rather a matter of emphasis and meaning. Torrington regards personnel management as a continuing process of evolution and growth, in which more and more fields of expertise are acquired and assimilated. Within this evolutionary process HRM is only adding “a further dimension to a multi-faceted role”, and is not at all a revolutionary concept. However, the effect of HRM should not be underestimated. Armstrong maintains that although the procedures and techniques strongly resemble those of personnel management, the strategic and philosophical context of HRM makes them appear more purposeful, relevant, and consequently, more effective.

On the other side, authors like Storey regard HRM as a “radically different philosophy and approach to the management of people at work”. In this view, HRM provides a completely new form of managing personnel and can therefore be regarded as a “departure from orthodoxy” of traditional personnel management. As the concept of HRM is not homogeneous but comprises different theoretical and philosophical approaches, the two main versions of HRM, namely the ‘soft’ and the ‘hard’ model, will be sketched in the following

‘Soft’ and ‘Hard’ Models of HRM

he sees personnel management caught in ambiguity as it is torn by managing the tension between organizational demands and needs of employees. The clear strategic orientation of HRM provides an “escape route from ambiguity”, because it has “sharply refocused the attention on the organizational loyalties of the personnel function.” Thus, its full organizational legitimacy may be regained.

1. Personnel management deals with employees, their payroll and employment laws. On the other hand, Human Resources Management deals with the management of the work force, and contributes to an organization’s success.

2. HRM basically deals with developing personnel management skills. It is Human Resources Management that develops a team of employees for an organization.

3. While Personnel management is considered to be reactive, Human Resources Management is stated to be proactive.

4. Personnel management focuses on administrating people or employees. On the other hand, the prime focus of Human Resources Development is to build a dynamic culture.

5. Personnel management is independent from an organization. On the contrary, Human Resources Management forms an integral part of a company or an organization.

Q.2. Write a note of scope of HR in INDIA?

Answer:

Scope of HR in India:

Contrary to these forces, in India the owner manager/government/public sector manager was an industry icon and a national hero of sorts. The Personnel Management practices were dominant of the ‘brick-and-motor’ industry. Though the approach was largely welfare oriented and reactive in nature it served effectively for the large PSU organizations that built the country’s foundation.

Its only in the past 10-12 years with the immense growth on account of the IT industry that winds of change began to blow. It was largely the advent of the Information Technology era in India that brought with it the western management practices. MNC’s (multinational companies) started up their operations in India. The FDI (foreign direct investment) went up steeply as the world saw the potential in the country’s human resources. India became a preferred location for MNC’s primarily from the USA, followed by other developed countries.

The gave birth to a new generation of management as well as HRM practices. New hiring methods, new ways of paying salaries, new employment terms and most importantly increased focus on individual performance and outcomes. There was emphasis on deliverables and linking individual and team performance to business results and success. Given the highly educated workforce there was a de-emphasis in the role of the trade unions. The era of the trade union dominance gave way to the new order of individual negotiated salaries and terms and clearly performance linked assessment systems. Another transformation that the Indian workplace witnessed was the focus on ethics and ethical practices in doing business. It was only fair to expect that with the weak legal system, it needed the support of the government policies and the corporate policies to beat the corruption that existed. This has significantly contributed to India emerging as a preferred destination for doing business.

All of this has yielded to give way to the birth of the ‘professional manager’ Professional managers today are a critical and essential part of the Indian corporate. The professional manager brought about a shift in the culture from a highly authoritarian approach of getting work done, to a more collaborative and participative approach. The entrepreneurs who earlier operated in a secure, sheltered market and hardly face challenges, were challenged by the globalization that swept in with the liberalization policies and measure brought in by the Indian government late 1995 and onwards. Despite the challenges, the Indian employee and his manager evolved. Together they stepped up to face the challenge head-on and to win not only in India but also globally. The levers of (a) low cost, (b) highly skilled, and (c) English as the medium of education and it being the corporate-language: were the key drivers that enabled the flow of global business to India. There was exponential growth in employment both directly (jobs in the international and domestic companies) as well as indirectly (as support industries like transport, catering and ancillary industries). The simultaneous investment of the government in building the necessary infrastructure did its share of providing impetus towards creating more jobs for the people of the country.

Hence, human relations movement in India has evolved very differently as compared to what we see in the developed economies of the USA and the UK. What is currently acting as a limitation is the enhanced awareness on the need for research based HRM practices. While there is a lot of work happening in the Indian education system to promote this, it is going to take a while before it can create a distinct body of knowledge that is reference able. For now the industry relies on emulating westerns HR practices and customizing on a as-needed basis for the Indian corporation. For the rest the industry forums and consortiums like the NASSCOM act as a hub bringing together organizations on a regular basis to discuss challenges and share best practices and identify ways and means o overcome them together. So far this has been successful and working to the advantage of the Indian corporate. Leading MNC research and consulting firms like Mercer and Hewitt too contribute to the industry through carrying out research and sharing reports on a regular basis. The approach however remains analytical and less prescriptive.

Q.3. Explain the critical steps in human resource planning system?

Answer:

Critical steps in Human resource planning system:

A. Purpose of Human Resource Planning: Human Resource Planning fulfils individual as well as organizational goals. What it essentially amounts to is “striking a balance” between the future human resources needs and the future enterprise needs. And this is done with the clear objective of maximizing the future return on investment in human resources. And this objective may be laid down for a short-term (i.e. for one year).

B. Estimating/Forecasting the future Manpower Requirements: the first step in the process is to arrive at the desired organizational structure at a given point in time. Mapping this structure with the existing structure helps in identifying the gap in resources requirement. The number and type of employees needed have to be determined. In addition to the structure there are a number of external factors that affect this determination. They include business forecasts, competitor strategy, expansion plans, product/skills mix changes, profit/revenue growth projections, in addition to management philosophy and government policies. This step also includes an analysis of the external labor/talent environment, its demographics, demand/supply of the required talent, and cost considerations.

C. Auditing Human Resources: Once the future human resource needs are estimated, the next step is to determine the present supply of manpower resources. This is done through what is called “Skills Inventory”. A skills inventory contains data about each employee’s skills, abilities, work preferences and other items of information which indicate his worth to the company. Skills inventory are also referred to as competency dictionaries. This information is usually retained as part of the performance management system with the HR department. This step in the HRP system helps identify the existing profile of the manpower and its efficiency. It helps highlight where the organization is vs. where it ought to be. The step concludes with identifying clear gaps in the skills/ manpower mix required to meet the upcoming business objectives.

D. Job Analysis: After having decided how many persons would be needed, it is necessary to prepare a job analysis. The recorded details of training, skills, qualification, abilities, experience and responsibilities, etc. as needed for a job are studied. Job analysis includes the preparation of job descriptions and job specifications.

E. Developing a Human Resource Plan: This step refers t the development and implementation of the human resource plan, which consists in finding out the sources of labour supply with a view to making an effective use of these sources. Some important considerations at this point are:

• Specific roles/disciplines being hired for, of them which roles are pivotal for the business

• Competencies and capabilities needed

• Manager vs. employee hiring

• Hire internally vs. External sourcing

• Planning for new skills through training existing staff vs. hiring new teams

• In case of surpluses, planning for redeployment/ reduction in workforce as required

• Succession planning for key positions in the company

Q.4. With reference to the compensation and salary system what are the systems that are helpful to raise the effectiveness of employees.

Answer: Compensation/ salary systems are designed to ensure that employees are rewarded appropriately depending on what they do and the skills and knowledge (intellect)required for doing a specific job. It must therefore provide for the following key factors in order to be effective: The following factors may be helpful to raise the effectivenessemployees:-

• Signal to the employee the major objectives of the organizations- therefore it must link to the overall goals and objectives of the company. For example if doing a quality job is critical for the company its compensation system has to ensure that this is adequately rewarded. On the other hand if a company values productivity and units produces, the compensation system would be designed such that productivity is rewarded.
• Attract and retain the talent an organization needs – the need to benchmark salaries to the prevalent market standard for that job / skill so that the company is able to attract the right talent. If a enterprises pays a salary lower that what the market does for that job/responsibilities, the probability that suitable candidates would take the job offer and join the company. Even if they do join subsequently when they find that the market pays more for that job they would quickly find a more remunerative job and leave the company.

• Motivate employees to perform effectively – as discussed at the outset, money is a key motivator and it often might be the only motivator for most employees, therefore ensuring that compensation is appropriately disbursed need to be taken care of while designing the compensation system. Jobs in the brick and motor, production setups would focus on higher incentive policies that would motivate the employee to produce more while the base-salary would be low.

• Create the type of culture the company seeks to engender – compensation systems play a critical role as sponsors for the organizations culture. A performance driven culture would build compensation policies that clearly and significantly reward performance. A company that rewards loyalty would reward employees who stay longer in the company with significantly better incentive programs.

Hence we see how compensation systems are reflective of the organizations over all philosophy of what its goals and objectives are and how this can be linked to salary payout.

Broad banding versus Competency based pay systems:

Organizations that follow a skill based or competency based pay system frequently use board banding to structure their compensation payments to employees. Broad branding simply compresses many traditional salary grades (say 15 to 20 grades) into a few wide salary bands (three or four grades). By having relatively few job grades, this approach tries to play down to play down the value of promotions. Depending on changing market conditions and organizational needs, employees move from one position to another without raising objectionable questions, (such as when the new grade is available, what pay adjustments are made when duties change etc) As a result movement of employees between departments, divisions and locations becomes smooth. Employees with greater flexibility and broader set of capabilities can always go in search of jobs in other departments, or locations that allow them to use their potential fully. Board banding further helps reduce the emphasis on hierarchy and status. However, broad banding can be a little un-setting to new recruit when he is made to roll on various jobs. Most employees still believe that the existence of many grades helps tem grab promotional opportunities over a period of time. Any organization having fewer grades may be viewed negatively — as having fewer upward promotion opportunities. Moreover a number of individuals may not want to move across the organizations into other areas.

Below versus above market compensation:

In high tech firms R&D workers might be paid better than their counterparts in the manufacturing division. Blue chip firms such as HLL, Nestle, Procter & Gamble, TCS, Hughes Software Systems might pay above market compensation to certain groups in order to attract (and retain) the cream of the crop. To grow rapidly and to get ahead of others in the race, especially in knowledge based industries most companies prefer to pay above market salaries. Above market wages are typical in well-established manufacturing units operating in a highly competitive environment. Firms paying below market tend to be small young and non-unionized.

Open versus secret pay: In real world the issue of paying compensation openly or in secret way may often become a bone of contention between employees and the employer(s). Current research evidence indicates that pay openness is likely to be more successful in organizations with extensive employee involvement and an egalitarian culture that encourages trust and commitment. Open pay eliminates doubts in the minds of employees regarding equity and fairness — because there is equal pay for equal work. But open pay has a downside. First, managers are forced to defend their compensation decisions publicly. The question of how much pay one should get is more or less decided by the manager, based on his own subjective assessment of various factors. In such decision, it is not easy to please everyone. Second, the cost of making a mistake in a pay decision increase when pay is open. Third, to avoid never ending and time wasting arguments with employees managers may eliminate pay differences among subordinates despite differences in performance levels. This may in the end force talented people to leave the organizations. Pay secrecy involves withholding information from the recruits regarding how much others make, what raises others have received and even what pay grades and ranges exist within an organizations. Pay secrecy gives managers some amount of freedom in compensation management, since pay decisions are not disclosed and there is no need to justify or defend them. Employees who do not know how much others are getting have no objective base for pursuing complaints about their own pay. Secrecy also serves to cover up inequities prevailing within the internal pay structure.

Q.5. What is competency? How it can be linked to the HR system?

Answer: If your organization has chosen this method, it means that it begins at the recruitment stage. The competencies required for the vacant positions are identified. The interview questions are based on the requirements of each job.

By taking these actions, you increase employee value as a very important asset. As described management is defined as 'achieving results through others (people).' This gives emphasis on the jobs in the organization and the employees who carry out these jobs. However, David Dubois and William Rothwell, among other writers, propose the alternative to management of the jobs and the people who perform them. They prefer concentrating on the recruitment activity and managing competencies required to perform the jobs. They believe organizations that implement competency based human resource management can respond quickly to changes. The former method concentrates on people management. The latter gives priority to managing competencies.

Types of Competencies

A competency based human resource system approach requires effective talent management in the following areas:

1. Functional Competencies.

These are the competencies required to perform the duties and responsibilities for each and every position. It is clear that these competencies vary from job to job.

2. Behavioral Competencies.

These are the types of behaviors that employees demonstrate, showing that they have the required skills and knowledge. These competencies enable employees to perform their jobs well.

3. Core Competencies.

These are competencies that run across functions and levels. These competencies are common for all positions. Such competencies can improve the competitive advantage of your organization.

Mike Martin gives examples of behavioral competencies such as:

• communication and motivation abilities;
• leadership skills;
• teamwork;
• decision making ability;
• analytical ability, and
• adaptability

Core competencies are normally selected from the most important functional and behavioral competencies such as:

• leadership
• change management skill
• people-skill development ability
• strategic planning ability
• employee recruitment, motivation and retention skills

It is clear that competency based human resource system is based on the selection and management of the right competencies. And ensuring that employees including new employees possess those competencies.

Employee effectiveness is measured against the standards relevant to the industry in which your organization is engaged in. What is lacking is referred to as a 'competency gap.'

Your objective is to address the competency gap or gaps by providing the right training and development programs.

Competency Based Human Resource System and Competency-Based Training

In competency based human resource management; the emphasis is on behavioral approach and performance.

It is closely connected to HR talent management. Here, 'HR' refers to every member of the entire workforce, not just people in Human Resource departments.

Competency based training is training intended to improve employee competence or to equip them with new competencies required in the effective performance of jobs. This includes the needs of the organization as it responds to changes in a dynamic environment. It is a continuous activity. This is vital in maintaining your organization's competitive edge. Training can improve competence required by people at the various levels in the organization's hierarchy and every area of tactical and operational activities, such as:

1. individual employees in their personal mastery of their time, their jobs and relationships
2. heads of Unit especially in intra-group management
3. team leaders in inter-group management
4. departmental and business unit heads in the functional management of their respective area of operations
5. senior management especially the CEO in the industry's management especially effective leadership skills
6. heads of global organizations in global and diversity management

Competence and Service Excellence

Competent people assist your organization in attaining service excellence. Excellent service is a pre-condition for organizational success. And success means positive financial outcomes and / or organizational survival. A competency based human resource system is considered as one of the approaches in human resource management. Ensure that this strategy is aligned to your organization's objectives.

Other Areas of Application

Apart from recruitment and the selection process, a competency based human resource system will require the same approach in rewards management, succession planning and employee transfer. There are institutions of learning that offer courses in competency-based human resource management.

Q.7. “Dynamic Learning” is an organization that wants to revise the HR policies. It has conducted a survey and the results of survey indicated that there is employee unrest, tardiness, absenteeism, more grievances. This all clearly indicates low morale. Suggest the measures that can be taken to improve employee morale.

Answer: Morale boosters can take the form of recognition, compensation, special perks or simply terminating employees. Here are 11 low cost morale boosters. Employee morale improves when staff feel they are valued. Share and implement their innovations and ideas.

Keep Score: Mount a large score board in the office to recognize top performers and to motivate those on the bottom of the list.

Inspect: The old management adage, inspect what you expect is true. Companies with a lack of focus can confuse staff and lead to less morale.

Thank You Notes: Send a special thank you letter to you staff’s family or spouse, praising their good work and efforts.

Huddle: Have a daily morning huddle to highlights tasks for the day and to cheer yesterday’s wins.

Open Up: Provide an open forum or one-on-one time to allow employees to express their concerns and feelings can be an easy means to boost morale.

Have Fun: Special events and outside work activities can take the pressure off the day-to-day grind in the office.

Show Charity: Get your staff involved in a bigger cause to help them see there is more to life than work.

Add Perks: Use low cost perks such as a Foosball table in the lunch room.

Fire Staff: Sometimes the root cause of low employee morale can be a staff member whose negativity brings down the group. Even a top performer can bring down staff behind your back.

Measure it: Keep tabs on the levels of morale in your business by regularly measuring employee satisfaction. the backbone of business success resides in the productivity and output of your employees. Those companies who remain vigilant to the signs of low morale and who focus on improving morale can thwart off the impact of a low morale workplace.Compensation/ salary systems are designed to ensure that employees are rewarded appropriately depending on what they do and the skills and knowledge (intellect) required for doing a specific job. It must therefore provide for the following key factors in order to be effective:

The following factors may be helpful to raise the effectiveness employees:-

• Signal to the employee the major objectives of the organizations- therefore it must link to the overall goals and objectives of the company. For example if doing a quality job is critical for the company its compensation system has to ensure that this is adequately rewarded. On the other hand if company values productivity and units produces, the compensation system would be designed such that productivity is rewarded.

• Attract and retain the talent an organization needs – the need to benchmark salaries to the prevalent market standard for that job / skill so that the company is able to attract the right talent. If a enterprises pays a salary lower that what the market does for that job/responsibilities, the probability that suitable candidates would take the job offer and join the company. Even if they do join subsequently when they find that the market pays more for that job they would quickly find a more remunerative job and leave the company.

• Motivate employees to perform effectively – as discussed at the outset, money is a key motivator and it often might be the only motivator for most employees, therefore ensuring that compensation is appropriately disbursed need to be taken care of while designing the compensation system. Jobs in the brick and motor, production setups would focus on higher incentive policies that would motivate the employee to produce more while the base-salary would be low.

• Create the type of culture the company seeks to engender – compensation systems play a critical role as sponsors for the organizations culture. A performance driven culture would build compensation policies that clearly and significantly reward performance. A company that rewards loyalty would reward employees who stay longer in the company with significantly better incentive programs.

Hence we see how compensation systems are reflective of the organizations over all philosophy of what its goals and objectives are and how this can be linked to salary payout.