HUMAN RESOURCES

Management MODULE ONE

HRM: Its relevance

Every organization, large or small, uses a

variety of resources to make the business
work. Such resources include cash, valuables,
or goods used to generate income for a
business. For example, a retail store uses
registers and inventory, while a consulting firm
may have proprietary software or buildings.
No matter the industry, all companies have one
thing in common: they must have people to
make their capital work for them.
HRM: Its relevance

1. Human resource management operates on the “people”

dimension of an organization
2. Its function comprises anchoring the systems processes and
practices for acquiring, developing, motivating people for
performance and engaging them for achieving the objectives of
the organization. This is valid for all organizations irrespective of
their nature: government, business, education, health,
recreation, or social action
3. One of the reasons why HRM may appear to be a nebulous and
somewhat elusive concept is on account of multiple existing
definitions of the term. HRM is an stretchable term, covering a
range of applications that have wide variance across industries
4. It involves forecasting the organization's future human resource
needs and planning for how those needs will be met
HRM
Definition

HRM is a philosophy of people management based on

the belief that human resources are uniquely important
in sustained business success.
“An organization gains competitive advantage by using
its people effectively, drawing on their expertise and
ingenuity to meet clearly defined objectives. HRM is
aimed at recruiting capable, flexible and committed
people, managing and rewarding their performance and
developing key competencies.( Human Resource
Management “. Cengage. Alan Price. 2011. 4th edition.
• 
THREE KEY FACTORS INFLUENCING HRM
NOW

1. Globalization: Competitiveness, pressure

on quality and cost. Dilemma of
replication of best practices , while
preserving the good local culture.
2. Technology : the impact of digitalization
and access to internet on all HR
processes.
3. Demographic changes in the workforce –
Challenges of diversity, aging workforce in
the west , millenials in the East.
 DEVOLUTION OF HRM TO LINE MANAGERS

 
For many line managers, the shift presents challenges.

1. Investments in human capital are highly uncertain;

2. the returns are less predictable than those from, say, new
machinery.
3. Some talent management activities that worked well for decades
no longer pay off.
4. And acquiring skills in this area can be difficult: Research suggests
that some of the most widely held beliefs about managing people
are misguided.
DEVOLUTION OF HRM TO LINE MANAGERS

 There is a view that in a highly competitive business environment, it is

necessary for line managers to own human resource management processes.
 The devolution of HRM to line managers will enable HR specialists to focus
on strategic roles and thus to align HRM function into the business strategy.
In this condition, the Line Managers take up the primary responsibility for
handling the operational tasks connected with human resource
management activities
 The rationale behind this devolution of human resource management
activities is the belief that the line managers are more tuned in to the local
conditions and the specific needs of the people working in close contact with
them
 The human resources management activities in which the line managers can
play key roles have been identified as the areas of talent management,
performance management , training and development, human resource
planning including recruitment and selection, manpower optimization,
employee relations , compensation and rewards systems , career
management and HSE activities
 DEVUTION OF HRM TO LINE MANAGERS

It’s a worldwide trend that has been under

way for nearly a decade: Responsibility for
talent management is shifting from HR to
frontline executives. The transition is driven
partly by cost cutting—head counts in HR
departments fell sharply during the great
recession , but is also fueled by the awareness
that many aspects of talent management are
best handled by line managers -
DEVOLUTION OF HRM TO LINE MANAGERS

Research by CEB shows that when line managers,

rather than HR, are responsible for recruiting,
performance management, and retention,
companies are 29% more successful at those tasks.
DEVOLUTION OF HRM
TO LINE MANAGEMENT: ISSUES

AREAS LINE MANAGER ROLES ISSUES

Performance •Jointly Set objectives with Ambiguity about role

Management employee. Uncertainty about the depth of
•Monitor performance and their role
provide feedback and resources Limited responsibility and uneven
. devolution of responsibility.
•Assess the need of Weak involvement
employees‟ training and
development through
employees‟ performance
Recruitment and •Projects manpower needs for •Do not bring in the organizational
Selection. future. perspectives in selection
•Participates in selection •Decision making with HR.
•Do not exert great influence on
the Recruitment and selection
process.
ISSUES IN DEVOLUTION OF HRM
TO LINE MANAGEMENT
AREAS LINE MANAGER ROLES ISSUES

Training & Development •Identifies training needs •Uneven involvement.

through PMS process. •Unsure about the efficacy of
•Sometimes involved in training on actual
training design and delivery. performance improvement.
•Evaluates the impact of •Perceives training as an HR
training on job performance function. Refusal in role
taking.

Managing Discipline •Increasing involvement in •HR specialist authority and

taking decisions. technical expertise
outweighs LM influence.
•Perception of limited
authority and tendency to
refer complex ones to higher
authorities.
ISSUES IN DEVOLUTION OF HRM
TO LINE MANAGEMENT
AREAS LINE MANAGER ROLES ISSUES

•Compensation •Although LMs role tends to •Lacks the helicopter view.

vary, they play an important Depends on the HR expertise
„link pin‟ role between for basic pay fixation.
operational and strategic
level activity regardless of the
situation facing the
organisation.
•Career Development •Jointly responsible with HR •Lacks basic skills in planning
for career development of career development
employees. activities.
•Dependent on HR for
providing direction.
CLASSIFICATION OF HRM

1. 'Hard' HRM : Highlights the resource side,

where the management controls the head
counts, monitors the numbers, and
ensures that the numbers as well as the
performances match the requirements of
the organization.
2. 'Soft' HRM : represents the 'human' face of
HRM ,aimed at eliciting a commitment so
that behaviour is primarily self-regulated. It
lays stress on achieving the strategic
objectives by taking people along, leading
them through communication and
motivation.
SOFT/ HARD HRM

Hard HRM: The primacy of business needs means that human

resources will be acquired, deployed and dispensed with as
corporate plans demand. Little regard is paid to the needs of
these resources and the emphasis is purely on quantitative
aspects.

Soft HRM: In order to gain a competitive advantage through the

workforce, regardless of whether they are full-time or part-time,
temporary or contract staff, all potential must be nurtured and
developed, and programmes that pay attention to the
behavioural aspects of people at work are developed.
SOFT/ HARD HRM

In hard HRM, managers focus on the profits and treat

employees as sources of business, no different from
machine and tools. While in soft HRM, employees are
considered as valuable assets and sources of
competitive advantage for the organization (Collings &
Wood, 2009). Employers treat employees as individuals
and concentrate on the employees’ needs and
development accordingly. Hard HRM can contain
elements of soft HRM
MODELS OF HRM
:THE HARVARD MODEL
 Employees considered as resources, although unlike
machines, the human resource cannot be managed
similarly
 The HR policy areas are: (1) Human resource
flows covering recruitment, selection, placement,
promotion, appraisal and assessment, promotion,
termination, (2) Reward systems  which cover
compensation , incentives etc, ( 3) Employee influence –
delegation of authority responsibility, and power, and (4)
Work systems - work design and employee alignment
 The outcomes of the policy choices are the four Cs:
Commitment, Congruence, Competence, and Cost
effectiveness.
MODELS OF HRM
MICHIGAN BUSINESS SCHOOL:

1. Hard approach about resources, and does not differentiate

human resources from other resources
2. People should be acquired cheap, and be managed for
maximum yield, to be used efficiently and developed, to have
better values
3. Human resource strategies should aim at matching the
business strategies
4. The HR role is non-strategic. The role of environmental
factors in shaping human resource management is largely
underplayed.
5. There are only four common HR processes: Selection:
matching people to jobs; Appraisal of performance; Rewards-
emphasizing the real importance of pay and other forms of
compensation in achieving results; and Development of
skilled individuals
MODELS OF HRM
GUEST MODEL

• David Guest’s model of HRM flows in six sequential elements

building up to a variety of outcomes:
1. HRM strategy
2. HRM practices( hiring , training , appraisal, compensation,
relations)
3. HRM outcomes( commitment, quality , flexibility)
4. Behaviour outcomes( motivation, cooperation, organizational
citizenship)
5. Performance outcomes( Positive -productivity, innovation, quality ,
Negative - low productivity , absenteeism, turnover)
6. Financial outcomes( Profit, ROI)
The model has been criticized as prescriptive and idealistic in its
basic assumptions. It links intangible factors like flexibility and
motivation with profit and ROI in a causal relationship. Guest,
nonetheless admitted to the uncertain relationship between
commitment and performance outcomes
• 
MODELS OF HRM
THE WARWICK MODEL

 This model introduced an outer

context( socio - economic, technical, politico
legal and competitive) an inner context
( culture, structure, politics/ leadership, task
technology and business output 
 Contexts interact to lead to HRM contents
( HR flows, work systems, reward systems
and employee relations) . The Warwick
model thus emphasized the influence of
both external and internal dynamics to
shape HRM and in this way it is an
improvement on the Guest Model
FLAXO EXORTS CASE
QUESTIONS

1. Identify the factors that prevent professionalizing the HR

processes in Flaxo Exports.
2. Make a case for professionalizing HRM in Flaxo, by
highlighting the benefits.
3. What change management challenges would you visualize n
professionalizing HRM in Flaxo?