pgdm 2012 session 1-2 hrm strategy final

7/29/2019 PGDM 2012 Session 1-2 HRM Strategy Final

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The meaning, nature and

scope ofHuman Resource

Management


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Why HRM

A view

HRM A Function / Skill/ Competency?

Every Mgr - an HR Mgr ?

HR Mgt - Life Mgt ?


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Nature of HRM cont

Critical Mgt function concerned with focus on

People US

Systems, processes and activites

to make them effective Performance

To develop them appreciating assets

Maximize org effectiveness and competitivenesssustainable over long term


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Nature of HRM cont

HRM Competitive advantage thru People

A- S- B DifferentiationCore Competencies

Value to Customers

Real time ( Here and Now &

Each time ( Reliability )


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Diff between PM and HRMHow is PM different from HRM?

Employment contract: normative written go beyond

Rules: devise clear rules Can Do outlook

Guide to mgt action: procedures business needs

Behaviour referent: norms custom usage - values mission

Mgt task: monitoring - nurturing

Key relations labour-mgt - customer

Initiatives piecemeal - integrated

Management role transactional - transformational

Critical skills negotiation facilitation

Pay pay-grades scales - JE/ performance - band

Conditions of work negotiation -- harmonising

Conflict handling collective bargaining- individual

Focus of change proceduralcultural,structural

Locus of Control central distributed

Organising principles structure & control performance


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Scope of HRM

Life cycle of an

employee

HRP

Job Analysis/Evaluation.

Recruitment/selection/retention,

Trg and development/competency,

PMS

Employee remuneration,motivation andcommunication.

And employee relations Welfare and health

separation too


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Core Competencies People

Integrated knowledge sets in Organisation

-Distinguish from Competitors and deliverValue

Macdonald - efficiency & training for standardisation,

Fedex- packing deliver routing and employee relations,

Canon - Fine optics,Toyota Value products and reliability ( Zero Maintenance)


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How Companies acquireCompetitive advantage

1. Resources must be of Value- improve process , products orreduce cost, eg. Marriott ,Toyota(Expertise/ Competency / & Freedom to act- High Performance)

2. Resources must be rare ( not available to competitors),

eg. Mckinsey hires the best

3. Resources must be difficult to replicate in a short time, eg.Disney ,SWA etc(Employee engagement)

4. Resources must be organised ( Shortest possible time, eg.Tata ACE , Nano( Talent Mgt and Positioning process)


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USA today and Deloitte

80% Executive surveyed

-10 years -HRM Growth has been Substantial -

2/3

rd

view as a strategic Investment than a Cost

Hence HRM is a CEO agenda


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Business case

The Business case for Managing People right(Pfeffer)

Strong connection- How firms manage people andeconomic results achieved

Not the sole basis for competitive success butimpacts variations in organisational performance


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Business case

Innovative HRP improves economic performancethru- People

- Possess knowledge & skills,- Motivated to apply this using discretionary efforts,

- Contribute to the process with such discretionary efforts High Commitment increased involvement, work

smarter ( more competent), Responsibility evenat lower level

Mark Huselid study 1997 968 responses-3452

firms - significant relationship HPMeconomicperformance


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Business case

Study 1996 702 firms HRM Index-improves MarketValue -14% premium

NUMMI JV of Toyota and GM also stated that flexibleand high involvement work system highperformance and reduce costs.

Applicable across Germany and other countries etc

Across various industries

Automobile,steel,apparel, oil and services firms


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Business case

Working in teams,

Different roles and style of management,

Design of work,

Communication & learning ,

Group awards,

Job rotation,

Decentralised decision making and

Employee wellbeing

HRM Practices- creates for differentiation and have animpact on organisational performance


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The Challenges of HRM

HRM is evolving(Based on the Context- socio - political and economic)

1920- 30s Labour welfare1940- 50s Le islation


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Context of HRM

External Political/legal

Constitution-Art 14,15,23,2438(e)43, 43(a)reservation for weakersections-impact manning andLabour laws 51 central Acts, SO, ID Act, MRTU - impact

worker/union mgt relations

Economic- Suppliers of HR,Employment Exch., institutions , contractors etc

- Competitors- for skills- demand and supply

- Customersskills and qualification quality-six sigma skills etc

- Economic growth cycles stage of development-Indias paradox of skillsin India-viz a vis growth - Industrial labour- knowledge worker ,tradeunions influences,

- Diversity -different languages, expatriate workers in the country


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External cont

Technological - Systematic application of knowledge of organisedknowledge to practical tasks - impacts jobs become intellectual or

knowledge needs upgradation, training workers and

engineers/mgrs,increased productivity and compensation, lays the ground

work for human interaction at various levels

Globalisationmigration / transnational movement of Executives ,(Projected 2020 25% global exe will be indians )

labour cost and skill competitiveness , country cultural

impacts and labour legislation


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Internal

Strategy,task and leadership

Strategydirection,competitive position and structure

Task linked to employee satisfaction and productivity

Leadership-alignment , communication

and Policy formulation linked to fairness and

performance/productivity

Unions

Organisational culture


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Competitive Challenges and Human

Resources Management

The most pressing competitive issues

facing firms:

Going global

Embracing technology

Managing change

Developing human capital

Responding to the market

Containing costs


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Aligning HR processes to the

strategy of the organization


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Session 2


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Strategic HR Management

Strategic Management -process of formulating,implementing and evaluating business strategiesto achieve organisational objectives

- Responsibility- staff or line- Focus- employee relations or partnership with customers- Role- transactional or trasnsformational /change leaders- Initiative - reactive or proactive- Control - bureaucratic or organic- Job design - tight division of labour vs flexible, multitasking roles ,

crossfunctional- Key investment - Capital vs people knowledge- Accountability- Cost centric vs Investment centric


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Barriers to Strategic HRM

1. Short term focus on current,2. Inadequacy to think strategically

3. Senior mgrs inadequacy to think

of HR as a contributor,

4. Think of function rather than

people to achieve,

5. Quantification6. HR capital ownership

7. Change resistance to org architecture


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Strategic Mgt -HR

Environmental scanning internal/external

Strategy formulation- Corp, Business,Functional

Strategy Implementation Prog, budgets,

procedures

Control process and Performance

P-D-C-A cycle


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Models of HRM

Harvard Model

The Guest ModelWarwick Model

Common Features

Audit


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Model of Strategic Human Resources Management

Stake

Holders

Situational

FactorsPESTEL

Business strategy

Mgt philosophy

Labour market

Technoogy

Socio/Politcal/Legal

HRM strategies

HRM policies

Hiring

Training

Relations

PMS

Compensation

Productivity

HR OutcomesCommitment

Competence

Congruence

Cost compet

Performance

outcomeProductivity

Innovation

Quality

Competitiveness

Community well being

FIN

results


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Overall Framework forHuman Resource Management

COMPETITIVECHALLENGES

Globalization

Technology

Managing change

Human capital

Responsiveness

Cost containment

HUMANRESOURCES

Planning Recruitment

Staffing

Job design

Training/development

Appraisal

Communications

Compensation

Benefits

Labor relations

EMPLOYEECONCERNS

Background diversity Age distribution

Gender issues

Educational levels

Employee rights

Privacy issues

Work attitudes

Family concerns

Figure 1.1


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Strategic HR Mgt Role

Encourage proactive thinking/behaviour Explicit communication of goals

Stimulation of critical and innovative thinking Productivity systems, PMS, pay, motivation

systems,work systems Quality and service orientation- Customer centric Proficient strategic management-staffing,

competency building Process and Value alignment


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Human

Resource

CompetencyModel

Source:Arthur Yeung, Wayne Brockbank, and Dave Ulrich, Lower Cost, Higher Value: Human Resource Function inTransformation. Reprinted with permission from Human Resource Planning, Vol. 17, No. 3 (1994). Copyright 1994 by The HumanResource Planning Society, 317 Madison Avenue, Suite 1509, New York, NY 10017, Phone: (212) 490-6387, Fax: (212) 682-6851.

Figure 1.9Presentation Slide 14

BusinessMastery

Business acumen Customer orientation

External Relations

HRMastery Staffing

Performance appraisal Rewards system Communication

Organization design

ChangeMastery

Interpersonal skillsand influence

Problem-solving skills Rewards system

Innovation and creativity

PersonalCredibility

Trust Personal

relationships Lived values

Courage


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HRM Competencies

Business Mastery

People Mastery

Change Mastery

Value orientation

Personal Credibility

Does line /owner manager require similarcompetencies?


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Linking the Processes of HRP and

Strategic Planning

Source:Adapted from James W. Walker, Integrating the Human Resource Function with theBusiness, Human Resource Planning14, no. 2 (1996): 5977. Reprinted with permission.

StrategicAnalysis

Establish the context:

Business goals

Companystrengths/weaknesses

Externalopportunities/threats

Source of competitiveadvantage

StrategyFormulation

Clarify performanceexpectations and future

management method:

Values, guidingprinciples

Business mission

Objectives and priorities

Resource allocations

StrategyImplementation

Implement processes toachieve desired results:

Business goals

Companystrengths/weaknesses

Externalopportunities/threats

Source of competitiveadvantage

Identify people-relatedbusiness issues

Define HR strategies,objectives, and action plans

Implement HR processes,policies, and practices


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HRP and Strategic Planning

Strategic Analysis What human resources are needed and what are

available?

Strategic Formulation What is required and necessary in support of humanresources?

Strategic Implementation

How will the human resources be allocated?

Human Resources

Planning

Strategic

Planning


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Human Resources Planning

Process of anticipating and making provision for themovement (flow) of people into, within, and out of an

organization and enhance capacity of the

organization to act and change in pursuit of

sustainable competitive advantage

Purpose is the the effective deployment of human

resources

Coordination flexibility

The ability to rapidly reallocate resources to new or

changing needs.

Resource flexibility

Having human resources who can do many different things

in different ways.


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HRP and Environmental

Scanning Environmental Scanning

The systematic monitoring of the major external forcesinfluencing the organization.

Economic factors: general and regional conditions

Competitive trends: new processes, services, and

innovations ( eg. Cement Business Market share MNC) Technological changes: robotics and office automation

(Material movement , IT Tech-tracking)

Political and legislative issues: laws and administrativerulings ( Contract labour/closure/ layoff relocation,transfer

gov interference ) Social concerns: child care and educational priorities

Demographic trends: age, composition,and literacy

Paradox of below 35 years and beyond 55 years


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Scanning the Internal

Environment

Cultural Audits Audits of the culture and quality of work life in an organization.

How do employees spend their time?

How do they interact with each other? Are employees empowered?

What is the predominant leadership style of managers?

How do employees advance within the organization?

Benchmarking

The process of comparing the organizations processes and

practices with those of other companies.


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Levels of HRP Information

Strategic

Information

Product mix

Customer Mix

Competitive emphasis

Geographic limits

( cement / RMC etc)

Organisational

information

Org structure

Information flows

Operating budgets

Functional budget

Sales /distributionchannels/level of technology

Specific HR

information

Job analysis

Skill inventories

Management inventories

Recruitment labour market

analysis

Retirement plans

Turnover data


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Mapping human capital

Partner alliance Knowledge work

Contract work Traditional Job

employment

Low

high

highLow Value

Unique


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Mapping Human Capital

Figure 4.2Source: Scott A. Snell, Cornell University.

Presentation Slide 42


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FORECASTING DEMAND

Human Resource Planning Model

Figure 4.3Presentation Slide 43

Considerations

Product/service demand

Technology

Financial resources

Absenteeism/turnover

Organizational growth

Management philosophy

Techniques

Trend analysis

Managerial estimates

Delphi technique

Techniques

Staffing tables

Markov analysis

Skills inventories Management inventories

Replacement charts

Succession Planning

External Considerations

Demographic changes

Education of the workforce

Labor Mobility Government policies

Unemployment rate

FORECASTING SUPPLY

BALANCINGSUPPLY AND

DEMAND

(Shortage)Recruitment

Full-time

Part-time

Recalls

(Surplus)Reductions

Layoffs Terminations

Demotions

Retirements


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Forecasting Demand for

Employees

Quantitative Methods

Qualitative Methods

Forecasting Demand


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Quantitative Approach: Trend Analysis

Forecasting labor demand based on an organizational index such as

sales:

Select a business factor that best predicts human resources

needs.

Plot the business factor in relation to the number of employees to

determine the labor productivity ratio.

Compute the productivity ratio for the past five years.

Calculate human resources demand by multiplying the business

factor by the productivity ratio.

Project human resources demand out to the target year(s).


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Qualitative Approaches to Demand Forecasting

Management Forecasts

The opinions (judgments) of supervisors, departmentmanagers, experts, or others knowledgeable aboutthe organizations future employment needs.

Delphi Technique

An attempt to decrease the subjectivity of forecasts bysoliciting and summarizing the judgments of apreselected group of individuals.

The final forecast represents a composite groupjudgment.


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Forecasting Supply of Employees: Internal Labor Supply

Staffing Tables

Markov Analysis

Skill Inventories

Replacement Charts

Succession Planning


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HRPDemand Quality and

quantity of people/skills

Competency for future

business

Managerial judgement

Ratio trend analysis

Regression analysis

Work study/ JobAnalysis

Supply Quality andquantity of people/skills

Present employee- skillsets, performance

Internal sources- group External sources- labour

market- (Engineers 5 lac- software1.5 lacs Nos )

Redundancy

Succession planning


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Pre requisite for

successful HRP

1. Integral part of Corp planning

2 Centralised responsibility interaction between

various stakeholders

3. Updated Human Resources Information System

4. Time horizon should enable remedial planning

5. Skill/ Competencies rather than aggregates ( Nos)


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Major UsesFor

HR

Information

SystemsSource: HR and Technology Survey, Deloitte &Touche and Lawson Software, 1998.

HRM 1


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Renaissance Case

Strategic Human Resources Management

in a Merger

pgdm 2012 session 1-2 hrm strategy final

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