Human Resource Management

1. Human Resource Management

2. HRM can broadly be defined as a common title given to all aspects of a business related to effective and efficient management of its workforce. HRM is representative of all issues or problems related to people and their management, in a manner that is most beneficial for the business. An introductory overview of Human Resource Management

3. Management as a process involves planning, organizing, staffing, leading and controlling activities that facilitate the achievement of an organization's objectives. All these activities are accomplished through efficient utilization of physical and financial resources by the company’s human resources. Importance of HRM“An organization is only as good as it’s people.”

4. Human resource management is one of the most complex and challenging fields of modern management. It ensures the building up of an effective workforce, the proper handling of employee expectations and makes sure that they perform at their very best… • Human resources is one of the most valuable and unique assets of an organization. The term human resources refers to the total knowledge, skills, creative abilities, talents and aptitudes of an organization’s workforce, as well as the values, attitudes and beliefs of the individuals involved.

5. Sound knowledge of HRM is crucial not just for a HR manager but for all successful managers. • As a Manager or Entrepreneur you could do everything right.. • ->Have great ideas • ->Lay brilliant plans • ->Draw clear organization charts • ->Get state of the art equipment • and so on, but you could still fail by hiring the wrong people or by a having a workforce which is notmotivated or negative.

6. Some Functions of HRM • Human resource planning. • Recruitment and selection. • Training and development. • Performance and potential appraisal. • Internal mobility. • Compensation management. • Quality of working life. • People development and retention. • Employee satisfaction. • Job Enrichment.

7. Emerging HRM Functions • Increasing organizational size and its complexity, transition from traditional to professional management, changing social and cultural norms, globalization of industry and availability of information technology are constantly changing the profile of HRM functions.

8. HRM today plays a much more dynamic role in not only performing the maintenance function but in also creating innovative ways to satisfy human aspirations and to provide a competitive edge to the organization on a sustainable basis.

9. Line Functions: >HR Planning >Job Analysis >Recruitment & selection >Induction >Training >Performance & potential >Appraisal >Internal Mobility >Compensation Management Staff Functions: >Educate employees on humane issues >Conduct surveys (ESAT) >Survey & keep track of market trends >Dealing with human issues >Taking care of company's corporate responsibility >Ensure smooth flow of business activities by taking care employee issues Division of HRM Functions

10. Human Resource Planning “If you fail to plan you are planning to fail”

11. Human Resource Planning Defined • HR planning is the process including forecasting, developing and controlling by which a firm ensures that it has the right number of people and the right kind of people, at the right places at the right time, doing work for which they are economically most useful. • It is the process deciding what positions the firm will have to fill, and how to fill them. It embraces all future positions, from maintenance clerk to CEO.

12. Forecasting future work force requirements, either in terms of mathematical projections of economic trends and industrial development or through judgmental estimates based upon specific future plans of the company. Making an inventory of the existing man power resources, and analyzing the degree to which these resources are employed. Human resource planning can be described as a series of activities, consisting the following:

13. Anticipating workforce problems, by projecting present resources into the future and comparing them with the forecast of requirements, to determine their adequacy, both quantitatively and qualitatively. Planning the necessary programs of recruitment, selection, training, deployment, utilization, transfer, promotion, development, motivation, and compensation so that the future workforce requirements will be met.

14. Significance of Human Resource Planning • A concrete human resource plan helps avoid sudden disruptions in an enterprise’s production run, since it indicates shortages of particular types of personnel, if any, in advance; thus enabling the management to adopt suitable strategies to scope with the situation.

15. All companies irrespective of sector need to plan their human resource requirements in terms of numbers, skills, and occupation groups-to meet increasing demands, either due to business growth or expansion. Besides, even if none of the above happened, within an ongoing enterprise there would be attrition, lay offs or internal mobility (transfers or promotions), leaving gaps which have to be filled in.

16. A human resource plan that anticipates the need for various types of skill requirements and levels of personnel, well in advance, will be able to give adequate lead time recruitment, selection, and training of such persons. Human resource planning becomes all the more crucial because the lead time for getting personnel is a delaying factor in many cases, and the skills that one may need are not always available. No availability of suitable human resources results in postponement or delays in executing new projects and expansion plans, which eventually leads to inefficiency and lower profitability. Besides, changing job requirements, due to technological change or the growing complexity of business operations, make differing demands on the number and type of manpower required.

17. Main objectives of HR Planning • Searching for and recruiting highly skilled and specially qualified employees. • Getting the best possible employee and assigning him/her to the right work, so that the efficiency and the production can be maximized. • Anticipating the changed requirements of personnel, and be prepared for it organizationally. • A forward looking activity plan that will help the management in identifying organizational needs, in developing people, and in providing them growth opportunities.

18. HR Planning Process • Business Plan • Workload Analysis • Job Analysis • Job Description • Job Specification

19. Business Plan • It is the basic exercise that has to be undertaken in order to arrive at the scale of business activity over a period of time. • It is basically a blue print of the desired objectives. These objectives, stated in economic terms, would incorporate the growth rate of the company, diversification plans, market opportunities, etc. • Involves assessing where the organization is going, it’s objectives and strategies for the future which in turn determines its future human resource needs.

20. Workload Analysis • Can be defined as the studies that are utilized to understand the methods and processes of doing a particular job, and can thus be helpful in work simplification, higher productivity or efficiency, reducing the time and number of people required to do a particular job successfully. • Workload analysis helps in determining the optimum number of human resource required perform the task in hand in the most effective and efficient manner possible. • There are a number of methods that could be used to develop workload norms. They may vary from being as simple as just observation on the job, to highly sophisticated statistical models. • Gives an estimate of the number of employees needed, and the nature and extent of the work to be done by them.

21. Job Analysis • Job analysis is the process by which data, with regard to each job, is systematically observed and noted. It provides information about the nature of the job and the characteristics or qualifications that are desirable in the job holder. It provides information in the following areas: • Job identification • Distinctive or significant characteristics of the job • What the typical worker does • Materials or equipment used • How the job is performed • Required personnel attributes

22. Job Description • Refers to the job contents and the expectations that an organisation has from its employees. Job descriptions usually outline the minimum requirements of jobs. • A job description is a written statement of what the job holder does, how it is done and why it is done. • It should accurately portray job content, environment, and conditions of employment. • It usually includes the following: • The job title • The duties to be performed • Distinguishing characters of the job • The authority and responsibilities of the job holder

23. Job Specification • The job specification states the minimum acceptable qualifications that the employee must possess to perform the job successfully. These may include: • Academic qualifications • Professional qualifications • Age • Years of experience • Relevance and nature of previous experience • Other skills and attitudes • They form the minimum eligibility requirements, which a candidate must have, to be considered for appointment to a job. • A clear indication of specifications helps in generating eligible applications, because of self election. • Lack of clear-cut specifications may generate a large number of applicants, leading to high costs, in terms of man hours, in processing them.

24. Demand Forecasting • Methods of Forecasting • Major Considerations in Forecasting.

25. Methods of Forecasting Bottom up Technique: This method of forecasting starts at the lowest level and progresses upwards, through various levels in the organization, till an aggregate projection for the organization as a whole is ready. The basic idea is that the best person to determine human resource requirement is the manager of the unit or department. Department managers periodically project their workforce requirements, while comparing their present and future needs, keeping in mind productivity levels, market demands, sales forecast; and mobility of staff in the department. Since this exercise is done periodically, it gives sufficient lead time to human resource managers to identify available human resources, both internally and externally.

26. Delphi Technique: The objective of this technique is to predict future developments in a particular area, by integrating the judgments and opinions provided independently by many experts. It is a structured approach for reaching a consensus judgment, among the experts, regarding the number of employees, who will be required in the future. These experts are well versed with the plan of the organization, and the internal and external factors that may influence these planned activities, and hence, the demand for workforce. These experts can come both from within or outside the organization. The basic procedure consists of experts presenting their forecast to other experts without physically meeting them. Once the first forecast is collected and shared, another round of forecasting takes place. This process of sharing and revising goes on till a consensus has emerged,

27. One of the major problems of the Delphi technique is in the integration of varied opinions of experts. As a result, it may drag on for a long time of many reiterations. One of the reasons for this maybe the physical absence of experts at one place to provide timely feedback, or make timely adjustments in their forecast.

28. Trend Analysis: Trend analysis means studying variations in your firm’s employment levels over the last few years. For eg, you might compute the number of employees at the end of each of the last five years, or perhaps the number in each subgroup (like sales, production, admin,etc),. He purpose is to identify trends that might continue into the future. Trend analysis can provide an initial estimate of future staffing needs, but employment rarely depends on the passage of time. Other factors like changes in sales volume and productivity also affect staffing needs.

29. Ratio Analysis: Means making forecasts based on the historical ratio between Some casual factor (like sales volume) The number of employees required (for instance, salespeople). For eg, suppose a salesperson traditionally generates RS.5,00,000/- in sales. If the sales revenue to salespeople ratio remains the same, you would require six new salespeople next year (assuming each of whom produces an extra Rs.5,00,000/-) to produce a hoped-for extra Rs.30,00,000/- in sales.

30. Using Computers to Forecast Personnel Requirements: Computerized forecasts enable the manager to include more variables into his or her personnel projections. These variables may include direct labor hours required to produce one unit of product (measure of productivity), and three sales projections- minimum, maximum, and probable- for the product line in question. Based on such input, a typical program generates average staff levels required to meet product demands, as well as separate computerized forecasts for direct labor( such as assembly workers), indirect staff (such as secretaries), and exempt staff (such as executives). With programs like these, employers can more accurately translate projected productivity and sales levels into forecasted personnel needs. And, they can estimate the affects of various productivity and sales level assumptions on personnel requirements.

31. Major Considerations in Forecasting. Absenteeism: • Is one of the major sources of unforeseen shortage of employees on a given day. Each year organizations seem to loose more work time due to absenteeism than due to strikes or lockouts. Absenteeism is defined as unauthorized absence from work. Such unscheduled absence from work causes tremendous problems in planning and execution of the work. • The annual absentee ratio can be calculated using the following formula: Absentee ratio= Unauthorized absence x 100 Man shift worked • This will give an estimate of the average absenteeism rate, which can be incorporated while projecting the actual number of people required.

32. Retirements: Another factor contributing to accurate planning has to do with the age profile of the employees, particularly close to retirement. Surprisingly, a large number of organizations in India do not have any idea of the profile of the employees in their organizations. Often, the retirement of employees comes as a surprise, leaving vacancies unfilled and causing disruption in the output. Manning tables should be carefully used to get an idea of the number of employees who would be retiring during the plan period, so that their replacements can be found.

33. Succession Planning: Succession Planning has to do with the upward movement of staff in the hierarchy of organizations. It is process that ensures that a qualified person is available to assume the position once it is made vacant. In the process of forecasting, the number of people needed in a planned year, filling up such vacancies has to be considered.

34. Technology Upgrading: Technology is generally conceived in terms of machines and equipment used in converting the input into output. However, technology is not only the hardware, but it also refers to the knowledge and information used in producing goods and services. Technology change has caused obsolescence of human skills, as the growth of technology has outpaced skill development. HR planning has to be done keeping in mind: • Impact of better and more sophisticated technology on the quantity and quality of people. • Would technology upgradation create redundancy in staff. • Effect of technology on the size of the workforce.

35. Supply Sources • Internal Supply • External Supply

36. Internal Supply • Before going out for the external supply of human resources, organizations usually look for what is internally available, and can be used. • To be able to effectively use the internal supply, organizations must conduct a total audit of the existing human resources. • From the information that is gathered, a personnel inventory and manning table or skill inventory can be prepared.

37. External Supply • Employment Exchange. • Employment Agencies. • Professional Association. • Campus Recruitment. • Employee referral program. • Advertisements (print, radio and electronic media)

38. Recruitment and Selection

39. Meaning Of Recruitment • According to Edwin B. Flippo, recruitment is the process of searching the candidates for employment and stimulating them to apply for jobs in the organization”. Recruitment is the activity that links the employers and the job seekers. A few definitions of recruitment are: • A process of finding and attracting capable applicants for employment. The process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of applications from which new employees are selected. • It is the process to discover sources of manpower to meet the requirement of staffing schedule and to employ effective measures for attracting that manpower in adequate numbers to facilitate effective selection of an efficient working force.(continued)

40. Recruitment of candidates is the function preceding the selection, which helps create a pool of prospective employees for the organization so that the management can select the right candidate for the right job from this pool. The main objective of the recruitment process is to expedite the selection process. Recruitment is a continuous process whereby the firm attempts to develop a pool of qualified applicants for the future human resources needs even though specific vacancies do not exist. Usually, the recruitment process starts when a manager initiates an employee requisition for a specific vacancy or an anticipated vacancy.

41. RECRUITMENT NEEDS ARE OF THREETYPES • PLANNEDi.e. the needs arising from changes in organization and retirement policy. • ANTICIPATEDAnticipated needs are those movements in personnel, which an organization can predict by studying trends in internal and external environment. • UNEXPECTEDResignation, deaths, accidents, illness give rise to unexpected needs.

42. The Purpose and Importance of Recruitment • Attract and encourage more and more candidates to apply in the organization. • Create a talent pool of candidates to enable the selection of best candidates for the organization. • Determine present and future requirements of the organization in conjunction with its personnel planning and job analysis activities. • Recruitment is the process which links the employers with the employees. • Increase the pool of job candidates at minimum cost.(continued)

43. Help increase the success rate of selection process by decreasing number • of visibly under qualified or overqualified job applicants. • Help reduce the probability that job applicants once recruited and selected • Will leave the organization only after a short period of time. • Meet the organizations legal and social obligations regarding the composition • of its workforce. • Begin identifying and preparing potential job applicants who will be appropriate • candidates. • Increase organization and individual effectiveness of various recruiting • techniques and sources for all types of job applicants.

44. Recruitment Process • The recruitment and selection is the major function of the human resource department and recruitment process is the first step towards creating the competitive strength and the recruitment strategic advantage for the organizations. Recruitment process involves a systematic procedure from sourcing the candidates to arranging and conducting the interviews and requires many resources and time.

45. A general recruitment process is as follows: • Identifying the vacancy:The recruitment process begins with the human resource department receiving requisitions for recruitment from any department of the company. These contain: • Posts to be filled• Number of persons• Duties to be performed• Qualifications required (continued)

46. Preparing the job description and person specification. • Locating and developing the sources of required number and • type of employees (Advertising etc). • Short-listing and identifying the prospective employee with required • characteristics. • Arranging the interviews with the selected candidates. • Conducting the interview and decision making

48. Sources Of Recruitment • Every organization has the option of choosing the candidates for its recruitment processes from two kinds of sources: internal and external sources. The sources within the organization itself (like transfer of employees from one department to other, promotions) to fill a position are known as the internal sources of recruitment. Recruitment candidates from all the other sources (like outsourcing agencies etc.) are known as the external sources of the recruitment.

49. SOURCES OF RECRUITMENT

50. Factors Affecting Recruitment • The recruitment function of the organizations is affected and governed by a mix of various internal and external forces. The internal forces or factors are the factors that can be controlled by the organization. And the external factors are those factors which cannot be controlled by the organization.