Lecture 02

1

Lesson: 2 HRM functions

Contents: Elements of HRM functions Importance of HRM functions Personnel functions HRM vs. Personnel Functions HRD Instruments HRD Processes HRD Outcomes Appendix: 2 Articles on HRD

Learning Objective this Unit By the end of this Unit, you should be able to:

1. 2. 3.

Give concise definition for HRM functions. Clearly articulate the difference between HRM and Personnel philosophy and functions. Describe the various instruments/functions of HRM. Know the processes resulting from the instruments and the final outcomes.

MS 22B - Eddie Corbin, Lecturer

2

2 Dear students, hope the first lesson gave you a fair idea of what the field of HRM holds for us. Today let us know a little bit more about the same. You all keep hearing about personnel management. You must be wondering what’s the difference between personnel management and HRM and what is HRD?? So in this lesson we are going to tackle the same question. Let us begin by having a systemic view of HRM .Let us understand this with the help of a slide:

Stakeholder Interest •Shareholders •Management •Employees •Government •Community •Unions

HRM Policy

Situational Factors •Workforce Characteristics •Business strategy •Management philosophy •Labour market •Unions •Task environment •Laws/social values

•Employee influence •HR flow •Reward systems •Work systems

HR Outcomes •Commitment •Competence •Congruence •Costeffectiveness

Long-Term Consequences •Individual well-being •Org. effectiveness •Societal well-being

Systemic View of HRM Can anyone come and explain this slide? Now let us proceed by understanding the following: Elements of HR functions Importance of HR functions Personnel functions HRM versus Personnel functions HRD instruments Processes, and finally Outcomes!!! Functions of HRM After the analysis of HRM objectives from the last lesson, it is simple to state the functions of HRM. The functions are performed to realize the objectives of the HRM. Now let us analyze the functions of the HRM to get an greater understanding.

3 HRM as you know by now involves the embracing the dimension of people. It involves selection, motivation, and retention of the employees. The functions are a mixture of behavior analysis, policy formulations and maintenance of good interpersonal relations. In this lesson, we are going to focus on all of these functions: the staffing, personnel management, or (as it's usually called today) human resource (HR) management function. These include: Conducting job analyses (determining the nature of each employee's job) Planning labor needs and recruiting job candidates Selecting job candidates Orienting and training new employees Managing Wages and Salaries (how to compensate employees) Providing incentives and benefits Appraising performance and Communicating (interviewing, counselling, disciplining) Training and developing Building employee commitment Equal opportunity and affirmative action Employee health and safety Grievances and labor relations

Thus if we view it closer we find that human resources management is responsible for the following: 1.Promotion of organisational needs: This is a very crucial function of HRM. The organization needs people human assets. People appreciate day by day with experience and are extremely valuable assets in an organization. HRM functions in this regard refer to planning of human resources, recruitment, placement, motivation, training, assessments, appraisals etc., so that there is an effective contribution from them to the organization. 2.Development of employees: What does an employee brings with himself? He does not come alone. He does bring his abilities, attitudes, personality, and behaviour with himself. An individual aims for development and personal growth in the work sphere. Now what does an organization must do to develop and encourage personal growth? Let us discuss in detail. Firstly, the organization through its HR Department identifies the mechanisms for Growth. This mechanism is known as assessment centre and is very popular procedure. Evaluation of employees is done for manpower purposes and decisions are made .A Variety of techniques is used. The behaviour observation leads to assessment and identification of strengths and weaknesses.

4

Apart from functions of Potential discovery , Training and Development of personnel Assessment centres also lead to increase in information about organization and review of policies.

Point To Ponder: Is Development a one-time activity or is it an ongoing process? 3.Relationship maintenance function: HRM functions include maintenance of effective interpersonal relations. In this context the functions of legal compliance, maintenance and Industrial relations are done by HRM. 4.Empowerment: What do you understand by the term Empowerment? It is the provision of greater freedom and discretion to employees. When employees are given freedom they work effectively as a team and strive for the development and growth of the organization. The function of empowerment leads to the prosperity of the organization.

Activity: Find out the difference between Delegation and Empowerment 5.HRMs crucial function also includes Good and effective communication of policies. Communication when streamlined effectively leads to excellent network building and growth. 6.Equality: Employees need to be treated with fairness and equality. HRM function of equal policies and justice make sure that the employees are protected fully. Equality leads to well trained and well-motivated employees. 7.Functions relating to job: What is a job? It is quite simple to define. It is the duty which one is expected to do. An employee works well when the job matches with his expectations, abilities and talents. Job Satisfaction is vital for all!!! Usually, by Creating Job enlargement, Job enrichment and Job rotation, jobs are made interesting. Job enlargement of HRM leads to increase in the jobs at the same level. Job rotation, as you all know, is giving people different jobs and training them. In this way people become multi skilled. This is most common in banks. Job enrichment leads to enriching the job with more responsibilities. Human needs are many. But the most essential need is the need of self-actualization. This need motivates him to work higher and achieve high goals inlife. Job enrichment is done to create involvement, interest and also satisfy the self-actualization motive of the employee.

5 Job enrichment can be done by enriching the job in relation to variety of skills, Significance of tasks, Development of autonomy and access to Interpersonal relation. With the changes in the economies and work force the functions of HRM are ever increasing. HRM is coping up with economic reforms, diversified work culture, competition and societal changes. Its role is becoming important day by day. WHAT ARE THE HRM ACTIVITIES?

Organizational, work, and job design Planning Recruitment and selection Training and development Performance management Compensation Occupational health and safety Employee and labour relations

Importance of HRM functions: Why are these concepts and techniques important to all managers? This point will very clear to you if you see this example. As managers none of us would like to make the following: mistake. To hire the wrong person for the job To experience high turnover To find our people not doing their best To waste time with countless and useless interviews To have our company sued for our discriminatory actions. To be quoted under bad example of unsafe practices To have some of your employees think their salaries are unfair and inequitable relative to others in the organization To allow a lack of training to undermine your department's effectiveness To commit any unfair labor practices With the help of our knowledge of HRM practices and philosophy we can avoid making these mistakes. More important, it can help ensure that you get results-through others. Remember!! you could do everything else right as a manager-lay brilliant plans, draw clear organization charts, set up modern assembly lines, and use sophisticated accounting controlsbut still fail as a manager (by hiring the wrong people or by not motivating subordinates, for instance). On the other hand, many managers-whether presidents, generals, governors, or supervisors have been successful even with inadequate plans, organization, or controls. They were successful because they had the knack for hiring the right people for the right jobs and motivating,

6 appraising, and developing them. Remember managers versus leaders! Thus, the functions of HRM hold an importance for all members of an organisation.

Personnel Function Definition of personnel Management: let me narrate below a few standard definitions given by experts of personnel management, which will give an idea of what it means. “ It is that phase of management which deals with the effective control and use of manpower as distinguished from other sources of power.” “ The management of human resources is viewed as a system in which participants seek to attain both individual and group goals”. “ Its objectives is to understand what has happened and is happening and to be prepared for what will happen in the area of working relationships between the managers and the managed.” If an analysis is made of these definitions it will be seen that personnel (or manpower) management involves procedures and practices through which human resources are managed (i.e. organized and directed) towards the attainment of the individual, social and organizational goals. By controlling and effectively using manpower rescues, management tries to produce goods and services for the society. Prof.Jucius has defined personnel administration as “ The field of management which has to do with planning, organising, directing and controlling various operative functions of procuring, developing, maintaining and utilising a labour force, such that the: a) Objectives, for which the company is established are attained economically and effectively; b) objectives of all levels of personnel are served to the highest possible degree; and c) objectives of the community are duly considered and served. Functions of Personnel Management Broadly speaking, experts have generally classified the functions into two major categories, i.e. managerial and operative functions. Others has classified functions as general and specific functions, and yet others as ‘personnel Administration functions and Industrial Relations Functions’. Functions have also been classified on the basis of the capacities; or on the basis of authority. Personnel functions It is necessary to identify the major personnel systems and their concepts in brief, for better understanding of the functions required for managing men effectively.

The operating functions of personnel management are concerned with the activities specifically dealing with procuring, developing, compensating and maintaining an efficient workforce. For example,

7 1. The procurement function- obtaining of a proper kind and number of personnel necessary to accomplish an organization’s goals 2. The development function- personnel development of employees, training 3. The compensating function- securing adequate and equitable remuneration to personnel 4. The integration function- an “integration” of human resources with organisation through job enlargement, jobevaluation, variable compensation plans, disciplinary action programmes. 5. The maintenance function- maintaining the physical conditions of employees (health and safety measures) and employee service programmes What roles do the HR managers perform? Let us view it in the form of a slide:

Role of HRD Manager Personal Role A Advisory: Advising mg. On effective use of HR. B Manpower Planning: Recruitment, selection etc. C Trg. & Development

Welfare Role Clerical Role A Research in Personnel A Time Keeping & Organizational Problems. B Salary & wage B Managing services: admin: incentives canteen, transport, etc. medical etc. C Maintenance of C Group Dynamics: HR records Group counseling, Motivation, leadership, communications, counseling etc.

D Measurement of assessment of individual & group behavior E Performance & Potential appraisal

First-Fighting Legal Role A Grievance handling B Settlement of dispute C Discipline Maintenance

D Collective branding E Workers participations Joint consultation.

Now let us discuss the difference between HRD and Personnel. HR Functions versus Personnel Functions You must have come across these two terms – Human Resource Management and Personnel Management. Some scholars have used them interchangeably.

8 But if you go back to our lesson 1, you will understand that it is through the evolution in the management philosophy that Personnel Management was transformed into Human ‘resources’ management. If we view the term themselves you will understand that the difference does not lie in the scope (that evolved through times and events) only, but the basic orientation has changed. Personnel management which was there before HRM had more of the Management orientation. (Please relate it to the Keith and Davis model of OB); it viewed employees from the owners perspective whereas; HRM views and treats employees as an asset. HRM with time has come a long way in promoting mutuality( we will be dealing that too in later part.) HRM is more strategic in nature, more integrated with the rest of the sub systems of the organisation.

Remember the above diagram. You must have come across this in your earlier courses. The following table will help you understand my point.

9

10

HUMAN RESOURCE DEVELOPMENT “ Human resource development refers to the process whereby the employees are continuously helped in a planned way to Acquire or sharpen capabilities required to perform various tasks associated with their present/future expected roles. Develop their general capabilities as individuals so that they are able to discover and exploit their own inner potential for their own and/or organisational development purpose. Develop an organisational work culture where: superior-subordinate relationships, team work and collaboration among different units are strong and contribute to the professional well-being, motivation and pride.” - Udai Pareek and T.V. Rao Thus, from this definition it is clear that HRD is all the more evolved field than HRM. Human resource management is the subsystem of the total management system. This is the responsibility of all managers, irrespective of their functions, disciplines and levels. HRM is primarily concerned with management of people, individuals or groups at work., as also their inter-relationship. It is not the sole responsibility of personnel specialists. Indeed line managers are equally and directly responsible for managing human resources working with them. They have to lead , guide and counsel people working with them and act as engines of motivation. HRD OD and IR are separate aspects of broader concept of HRM. However, in reality, each of these aspects overlap in practice, into the other and cannot be viewed in isolation. HRM practices, to succeed, must go currently with HRD, OD interventions. Sound IR systems cannot be visualized without good HRD practices. Human resources development is a process to help people to grow. It is an approach to facilitate individual growth i.e. to transform a person a total person. HR is an asset and HRD is a means to attain better organizational effectiveness. Growth means better skill, better adjustment to the environment, ability to solve problems ,ability to take decisions ,self confidence and broad awareness. HRD is to deal both- which prevent growth and lead to growth. In an organization there are six units which are concerned with HRD namely person, role, dyad, team, inter team unity and organization. The effectiveness of one contributes, in , turn, to the effectiveness of others.

Human resource development is an essential prerequisite for any growth or development effort. Research, experimentation and experience in the field of HRD has grown enormously in the last decade. Many organizations have set up new departments known as “HRD Departments” in place of “HRM departments” which symbolise the recognition of importance of people’s competency development. These departments have done remarkable work in attempting to find out new ways of developing employee competencies. Thus HRD is needed by every organization that is interested in:

11 Stability o Growth Review and development • Styles o Dynamic activity Effectiveness, and • Leadership

HRM versus HRD If we view the field carefully, we can easily differentiate the two field in the following manner:

HRD 1. continuous process 2. sub-system of a large system, more organisational oriented 3. more proactive; it copes with the changing needs of the people as well as anticipate these needs. 4.developing the whole organisation, e.g. OD. 5. involvement of the entire work force from top to bottom is more and a must in most of the cases

HRM/Personnel Management 1.a routine and administrative function 2. function more independent with separate roles to play. 3. mainly a reactive function responding to the demands which may arise. 4. concerned with people only. 5. It is basically the responsibilities of the HR department.

Thus, the differentiation will give you a feel that again it’s a difference in scope and orientation and nothing else. Thus if we want a composite view we find that they will placed like the following, historically, in scope and in orientation.

People Management HRM .

MODELS PERSONNEL MGMT.

OF MANAGEMENT

WELFARE MGMT.

1900

Industrial Relations

Skill and Competency Mapping

Setting Safety and Health Stndards

1940 PERIOD

1980

Human Resources Planning

Recruitment Job Analysis

Compensation Designing

Job Description

Job Specification

Selection

Training and Development

Performance Appraisal

Setting Performance Standards(KRA/KPAs)

Career planning and Development

Management Development and Succession

HRM Mechanisms or Sub-systems or Instruments

2000

12

13 Human Resource Planning Manpower planning and human resource planning are synonyms. The basic idea of manpower planning is, we look at the numbers we are likely to need because of growth or contraction, promotion and wastages. In other words, it simply means ensuring availability of right numbers of men , right kinds [types in terms of skill], at the right point of time, at the right places for utilising the most economically and effectively and develop their potentials in terms of skills, performance and capacity. Recruitment and Selection Recruitment is the process of generating of applications or attracting applicants for specific positions through four common sources, viz. Advertisement, state employment exchange agencies , present employees and campus recruitment. Having identified the potential applicants the next step is to evaluate their experience and qualification for ascertaining their suitability for a job and make selection. Selection refers to the process of offering job to one or more applicants from the applications. Selection is thus a means of selecting the ”best-fit” for a job by using multiple hurdles such as screening, short listing based on marks, tests, interviewing, and an equal opportunity dispenser. Performance & Potential Appraisal Performance appraisal also called “merit rating” or “employee rating is a means of helping supervisors to evaluate the work of employees. It is the name given to the regular formalised and recorded review of the way in which an individual performs in his or her job. This is normally carried out by the job holder’s immediate boss. Performance appraisal focuses of helping the individual to develop his or her present role capabilities and to assume more responsibility for that role. Potential appraisal focuses primarily identifying the employees future likely roles within the organisation.” Potential appraisal is done for placement as well as for development purposes keeping in mind futuristic requirement of the organisation.

Performance appraisals are becoming highly crucial tools of Modern organizations . Performance Appraisal is very much in demand because; 1. It helps employee in self-appraisal 2. It Reviews his performance in relation to the objectives and other behaviors. 3. It Checks reviews done by the superiors. 4. It sends summary information for central storage and use. 5. It analyses the difficulties of the employees and works to remove them. It helps employees to face challenges and accept responsibilities. It plans Potential Development Exercises 1. It make thorough potential appraisal of the employee .. 2. Appraisal the potential of the employee annually. Counselling “Counselling is helping the employee to recognise his own strengths, weaknesses and potential and potential and helping him to prepare action plans for own development.” Giving feedback in a

14 “threatening way” or correcting the undesirable or unsatisfactory behaviour of employees by pointing it out the deficiencies or other malfunctioning and warning them not to repeat these behaviour are all integral parts of a manager’s role and are not the same as counselling.

1. 2.

They give critical and supporting feedback. They discuss with the employee the difference between his self rating and the rating by the immediate superior. 3. They discuss the steps the employee can take for improvement. 4. They provide support

Career Planning Career planning involves identifying the right potential well in time, for development to take over higher responsibilities. This includes promotion and planned job rotation under various conditions and environments of challenge. In this process, attention is focused on individual’s style of working than his current performance results. Current results can provide reasonable clues of future potential, but they are not the sole criterion; current results only, could be misleading in judging one’s potential. A persons achievement are invariably affected by the forces outside his control. Similarly, a person may be highly successful in one situation, but he may not continue to be a high achiever when transferred to another job or situation. Succession Planning Succession planning entails in identifying the key jobs in an organisation and ensuring that , if anything, planned or unplanned were to remove the present job holder from his post, there would be some one ready to take the place. This benefits the company by ensuring that there are no expensive gaps, or panic measures to fill them. It benefits the individual by providing him with opportunities for advancement. Three broad steps are required in this context (I) to decide which are the key jobs in the organisation; (ii) to identify the potential incumbent who can fit the position; & (iii) to make necessary records in the organisation chart. Therefore, a succession plan to indicate who can succeed whom in the hierarchy. Training Training comprises an integral part of HRD process. The purpose of training is to improve the capabilities of the human resources in order to increase their efficiency and effectiveness on the job. Training is expected to indicate positive changes in knowledge, skill and attitudes. Training is job oriented and fulfills the current needs of an individual to overcome job difficulties. Training won’t solve all problems, not all problems are training problems. As we all know Training aims at

development of the people in an organization. HRD Department analyses and develops various Training programmes. For development of human resources through Training, what does the HR department do? 1. It assesses training needs of different groups of employees. 2. It searches available outside training facilities. 3. It develops in-company training strategy including pre-training and post-training activities. 4. It prepares training packages and modules.

15 5. It organizes specific programmes as well as general development programmes with own and outside resources. 6. It evaluates training efforts. Job Evaluation Job evaluation is concerned with establishing the relative worth of a job compared to other jobs within an organisation. In job evaluation one attempts to consider and measure the inputs required of employees (know-how, accountability and problem solving etc.) for minimum job performance and to translate such measures into specific monetary returns. Transfer, Promotion & d emotion!!! Transfer is a lateral movement within the same grade, from one job to another. A transfer may result in changes in duties and responsibilities, supervisory and working conditions, but not necessarily salary. Promotion is the advancement of an employee from one job level to a higher one, with increase in salary. Demotion is the opposite of promotion. It is a downward movement from one job level to another, leading to a reduction in rank, status, pay and responsibility. Job Analysis Job analysis is the process of studying and collecting department information relating to operations and responsibilities of a specific job. The immediate products of this analysis are job description and job specification. Job description is an organised factual statement of duties and responsibilities of a specific job, whereas, job specification is a statement of the minimum acceptable qualities necessary to perform a job properly. Role Analysis Role analysis is the process of defining a role in the context of its work system., in terms of expectation of important persons, detailing specific tasks under each function, and elaborating the process, standards and critical attributes namely knowledge, attitude, skill, habits (KASH) required for effective role. Role is a position or an office a person occupies as defined by expectations from significant persons in the organisation, including the person himself. Position is the collection of tasks and responsibilities performed by one person.

16

ROLE ANALYSIS

ROLE CONSENSUS

KEY PERFORMANCE AREAS

GOALS

APPRAISALS

CRITICAL ATTRIBUTES

COUNSELLING

Communication Policies HR Department stresses a lot on Communication aspects to be developed. Communication policies do pave way for effective ness and efficiency. Rewards Rewards are the positive reinforcements given by the organization . Rewards act as effective motivators and help people to increase productivity and efficiency. Rewards include: 1. Promotion 2. Salary Review 3. Salary Administration

OD Exercises OD Exercises help in Organisational development and growth with their activities of

17 1. Organisational Diagnosis 2. Team Building 3. Task Force 4. Other structural and process interventions like role development, job enrichment job re-designing etc. You will deal all the mechanisms in the coming lesson in detail one by one.

Outcomes/ objectives of the functions We have already in our lesson 1 discussed about generating “competitive advantage through people”. HRM functions are the best tools to achieve the same.

18 But what are these outcomes we are talking of ? They are: Creation of a Better Image More Profits Higher Productivity More Competent People Better Generation of Internal Resources More Team-work, Synergy and Respect for Each Other More Problem Solving Higher Work-commitment & job Involvement Growth and Diversification More Profits Better Developed Roles Better Utilisation of Human Resources We can understand the relation between the various instruments and the benefits through two means: By seeing the evidence from various researches on the issue. Just one example can help you see this relation. A study by Chris Ryan et.al. evaluated the impact of broad range of HRM practices on shareholders return. They concluded that 15-30 percent of the total value of a company could be attributed to the quality of its HRM practices, especially training, role analysis and talent management (where the poorest of the performers are discharged). Secondly, through a model/ paradigm. We can develop a model where there is a indirect link visible. You all know that it is not only the structure of the certain activity that can directly lead to a desired outcome. It is the processes that are generated from a formation of the structure that can in turn; help us generate a certain kind of climate. These processes, thus helps the above mentioned instruments to generate the desired outcomes. Now we will together tackle the question “How can this be achieved?” HRD and HRM processes But what are these processes?? The processes include:

19 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Generation of Value Creation of more Trust Clarity and role Communications development Positive Re-enforcement Development of Team work & collaboration Employee Development and growth Knowledge of skills required for Effective job performance Group work encouragement Clear norms Maintains of Man power inventory

20

HRD Instruments (Sub Systems) HRD Department Performance Appraisal

Review discussions, feedback counselling

HRD Processes & Climate variable • •

• •

• Role Analysis Potential Development Training Communication Policies Job rotation rewards OD exercises Job enrichment other mechanisms

• • • • • • • •

Role clarity Awareness of competencies required for job performance Practice orientation Trust Collaboration & Teamwork Authenticity Openness Risk taking Value generation Clarification of norms & standards Better communicatio n Fair rewards Generation of unbiased data on employees etc.

HRD Outcome Variables • •

•

• • •

•

• •

More competent people Better developmen t roles

Higher work commitmen t & job involvemen t Problem solving skills Better utilization of HR Higher job satisfaction & work motivation Generation of internal sources Better organizatio nal health Greater team work

Other factors • Personnel policies, Top Mgt. Styles, inv. On HRD, top mgt’s commitmen ts, history, power culture etc.

Organisational Dimensions Electiveness • •

Higher productivity Growth & Diversification

•

Cost reduction

• •

Higher profits Better image

OTHER FACTO

• • • •

Environment Technology Resource availability Nature of business etc.

21 The main issue here is that the HR mechanisms have to be developed with so much care that they lead to these intangible processes which can lead to the desired outcomes. Only then a mechanism fulfills the basic philosophy of HRM.

Pre selection Practices HRM Practices

Outcomes

Employee – Centered

Outcome

Advantage

Organization – Centered Competitive

HR Planning Job analysis

Selection Practices Recruitment Selection Post selection Practices

Competence Motivation Work-related Attitudes

Output Retention L e

Training/development Performance appraisal Compensation Productivity improvement programs

Practices Affected by External Factors Workplace justice Unions Safely and health International

Now, we have already discussed that the various instruments in HRM can have the right impact only if certain processes accompany it. This shows there is an indirect path through which the influence is carried on. The logic behind this assumption is that if you observe the two variable you always can’t decipher how one instrument led to a certain outcome. We can understand the reason behind the phenomenon with the help of a model given by Kleiman.

Cost leadership Product differentiation

22 He states that the influence process follows a path where the mechanisms lead to outcomes (employee-centered and organisational centered), which in turn, can lead to competitive advantage. The path taken is as follows: HRM practices Employee outcomes competitive advantage.

centered

outcomes- organisational

Here the employee centered outcomes refer to the competence level of each employees, employees willingness, and employees attitudes such as job satisfaction level, commitment, and citizenship behavior which result from the right kind and right combinations of the instruments. The organisational outcomes are productivity level (in terms of quantity and quality of the product and the USP of the product), image of the company, legal compliances etc which are result of the employee level outcomes. Naturally, for example if the employees of a firm are highly satisfied and committed then they will communicate a good image of the company. This level outcome will give competitive advantage to the company through the generation of its good will in the market. Thus it the relation among the instruments, processes and the ultimate outcomes are clear to you. Hope the discussion was invigorating and you will have lot of issues to discuss in the class. Hope with the help of this material you will be able to do the following. 1. Study an Indian organization and 2.analyze the various HRD processes used 3.Write about various types of HRD instruments. 4.Understand the relationship between the three variables: Instruments, processes and outcomes. 5. learn the difference among: o HRM o Personnel o HRD

Activities: • •

Find out the difference between Job Enrichment and job Enlargement Explain succession planning with the help of an example of any organisation.

23

HR Functions: What We’ll Be Looking At Planning Employee and Labor Relations

Legal Compliance

Training and Development

Staffing Reward Systems

Management 412 / Lecture #1 / Page 30

24

Personnel and HRM • Traditional “personnel” function – Record keeping – Perceived as a dumping ground

• The death of HR? • HR’s rebirth

HRM Instruments • • • • • • • • •

HRD Department Performance Appraisal Review discussions, feedback counseling Role Analysis Potential Development Training Communication Policies Job rotation rewards OD exercises Job enrichment other ----

25

HRM Instruments • • • • • • • • •

HRD Department Performance Appraisal Review discussions, feedback counseling Role Analysis Potential Development Training Communication Policies Job rotation rewards OD exercises Job enrichment other ----

Staffing • Strategic issues – Hire vs. train – The best vs. good enough

• Recruitment – Difficult today…..or always difficult – Recruit the the people you’d like to hire

• Selection – The interview – Tests

• Downsizing

26

Training and Development • Training vs. development – Training = skills – Development = long-term

• Training and technology – Technology change makes training even more critical – Technology not the answer to training issues

• Choosing a training method – Match method and content – Practical considerations

Benefits • Some are legally required – Social Security – Workers’ Comp – Unemployment

• Others heavily regulated – Health – Pensions

• Currently popular… – Child care / elder care – Employee services

27

Development

• • •

Training of Employees Management Development Career Development

Motivation • • • • •

Job Design Performance Appraisal Rewards and Compensation Job Evaluation Discipline

28

Maintenance/Retention • • • •

Commitment Employee safety and Health Employee Relations Industrial Relations

HRD Processes…. Generation of Value Creation of more Trust Clarity and role Communications development Positive Re-inforcement Development of Team work & collaboration Employee Development and growth

29

HRD Processes…. Knowledge of skills required for Effective job performance Group work encouragement Clear norms , and Maintains of Man power inventory.

HRD outcomes… More Profits Higher Productivity More Competent People Better Generation of Internal Resources More Team-work, Synergy and Respect for Each Other Creation of a Better Image

30

HRD outcomes… More Problem Solving Higher Work-commitment & job Involvement Growth and Diversification More Profits Better Developed Roles Better Utilisation of Human Resources

31

32

33

34

HR Functions Planning and Job Analysis Legal and EEO Staffing Training and Development Compensation and Benefits Employee and Labor Relations

Lecture #15 Page 3

CBU / MGMT 337 / Summer 2003

Staffing Strategic issues Hire vs. train The best vs. good enough

Recruitment Difficult today…..or always difficult Recruit the the people you’d like to hire

Selection The interview Tests

Downsizing CBU / MGMT 337 / Summer 2003

Lecture #15 Page 7

35

Training and Development Training vs. development Training = skills Development = long-term

Training and technology Technology change makes training even more critical Technology not the answer to training issues

Choosing a training method Match method and content Practical considerations

CBU / MGMT 337 / Summer 2003

Lecture #15 Page 8

Benefits Some are legally required Social Security Workers’ Comp Unemployment

Others heavily regulated Health Pensions

Currently popular… Child care / elder care Employee services

CBU / MGMT 337 / Summer 2003

Lecture #15 Page 10

36

The Death of HR ? • Traditional “personnel” function • Recordkeeping • Perceived as a dumping ground

• The death of HR? • HR’s rebirth

Sources: Caudron (2003); Schuler (1990); Schuler & Walker (1990); Stewart (1996); Sunoo & Laabs (1999); Ulrich (2000); Wells (2003)

Management 412 / Lecture #1 / Page 4

HR Functions: What We’ll Be Looking At Planning Employee and Labor Relations

Legal Compliance

Training and Development

Staffing Reward Systems

Management 412 / Lecture #1 / Page 30

37

Distinguishing HRM from Personnel Management

MS 22B - Eddie Corbin, Lecturer

27

Development Training of Employees Management Development Career Development

MS 22B - Eddie Corbin, Lecturer

19

38

Motivation • Job Design • Performance Appraisal • Rewards and Compensation • Job Evaluation • Discipline

MS 22B - Eddie Corbin, Lecturer

20

Maintenance/Retention Commitment Employee safety and Health Employee Relations Industrial Relations

MS 22B - Eddie Corbin, Lecturer

21

39 Map of the HRM Territory Stakeholder Interest •Shareholders •Management •Employees •Government •Community •Unions

Situational Factors

HRM Policy •Employee influence •HR flow •Reward systems •Work systems

•Workforce Characteristics •Business strategy •Management philosophy •Labour market •Unions •Task environment •Laws/social values

HR Outcomes •Commitment •Competence •Congruence •Costeffectiveness

Long-Term Consequences •Individual well-being •Org. effectiveness •Societal well-being

Beer et al. MS 22B - Eddie Corbin, Lecturer

25

David Guest HRM Process Strategy Integration

High Commitment

ENVIRONMENT OF BUSINESS

High Quality

Flexibility

MS 22B - Eddie Corbin, Lecturer

26

RELEVANCE OF HRD & ITS INTERVENTIONS By Dr. Aloke K Sen*

40

With increasing global competition, organisations are under tremendous pressure to improve their performance through reduction of cost and in quality up-gradation. Indian business organisations too have realised that they are now in a more open, highly competitive, and market-oriented environment. The three challenges for Indian business organisations are - First, how to maximise return on investments. Second, how to be more innovative and customer driven. Third, how to renew and revitalise an organisation? In this context, the most important steps are - effective management; holistic development; and optimum utilisation of human resources (Jha 1987; Sarathi 1987; Maheshwari & Sinha 1991)(1). In the past decade something quite different was happening in many Indian organisations, calling for a second look at traditional personnel functions and their integration with - organisational objectives (Athalai 1987; Singh 1989; Nair & Rao 1990; Silvera 1990)(2). According to Singh & Sen (1992)(3) several steps were taken, such as, conceptualisation of employees as resources; strategic role of personnel functions; greater partnership to line managers in managing human resources; dovetailing of training with other personnel functions; synthesis of different personnel functions, etc. It is difficult to categorise these activities under a single label. Rather, they can be brought under the umbrella of Human Resource Development (HRD). Human resource development in India is of recent origin, and the term gained currency only in the early seventies. In the opinion of Nadler the term "HRD" was first applied in 1968 in George Washington University. It was used in Miami at the conference of American Society for Training and Development in 1969. According to Nadler, the term was gaining more acceptances during the mid-1970's, but many used it as a more alternative term than "Training & Development" (4). In the opinion of some management professionals, Japan is the first country to begin with HRD practices. "Better People", not merely better technology, is the surest way to a "Better Society", is the most popular belief in Japan (5). In the opinion of Prof. Udai Pareek, the term was first used in India in 1972 by the State Bank of India (6). By the late seventies and early eighties this professional outlook on HRD caught on to a few PSUs, namely BHEL, MUL, SAIL, IA, AI & IOC. Larsen & Toubro and TISCO are the first two organisations in the private sector to begin with HRD. Organisations need to be dynamic and growth-oriented to grow in the competitive environment. This is possible only through the competence of human resources. To cope with the fast changing environment, organisations need to review their HRD approaches continuously. HRD is neither a concept nor a tool, but is an approach using different personnel systems, depending upon the needs and priorities of the organisation. The basic assumption is the belief in human potential and its development by providing a suitable and congenial environment. _________________________________________________________________ * Dean - MBA Programme & Professor (HRM), EIILM, Kolkata

According to Dayal and others (7), concern for development of people, have become important for two compelling business reasons. Firstly, competitions in the business have forced attention of organisations on cost of operations and sensitivity to market demands. These aspects of business cannot be served without full and

41 sympathetic involvement of people at work. Secondly, consideration arises from the impressive developments in science, engineering and technology. The new production technology, automation and application of electronic control systems have changed the ratio of skilled and unskilled jobs. New systems require new skills and certain minimum educational qualifications. They need continuous up-gradation of skills. Thus, development of people, decentralisation of decision making, flatter and different management practices than those followed in the past has become necessary for survival of business. HRD initiatives meet the need of these business imperatives. In the opinion of Nadler and Wiggs (8) the ultimate purpose of HRD activities is "to make a difference" in the real world of costs, quality, quantity, accuracy and timeliness. HRD activities, as such, do not reduce costs, improve quality or quantity, or benefit the enterprise in any way. It is the on-the job applications of learning that ultimately can reduce costs, improve quality, and so forth. It has been rightly observed by Billimoria & Singh (9) that "each human being is born as something new, something that never existed before. Each is born with the capacity to win in life, each has his own unique potentials, capabilities and limitations." In the opinion, of Prof. Ishwar Dayal (10), HRD is an approach founded on the belief that people are capable of growth - given an environment that facilitates individual growth. Growth is, therefore, important for organisation. According to Dayal, HRD is to make a person, a total person in terms of skill, maturity, competence, self-awareness, adjustment to the environment, and confidence. In the view of Dayal, HRD can be seen as a philosophy rather than as a programme. HRD is concerned with two sets of extreme factors - which prevents growth and which leads to growth. In this context, Khan (11) also remarks: "HRD is the process of increasing knowledge, skills, capabilities and positive work attitude and value of all people working at all levels in a business undertaking". According to Rao, Verma, Khandelwal and Abraham (12), HRD is a process by which people in various groups are helped to acquire new competence continuously so as to make them more self-reliant and simultaneously developing a sense of pride in them. HRD is an approach to the systematic expansion of people's work - related abilities, focussed on the attainment of both organisational and personal goals. Nadler observed, "HRD means an organised learning experience, within a time frame, with an objective of producing the possibility of performance change". According to Rao (14), in the organisational context, HRD is a process in which the employees of an organisation are continuously helped in a planned manner to: - Acquire or sharpen their capabilities that are required to perform various functions associated with their present or expected future roles; - Develop their general capabilities as individuals, so as to discover and exploit their inner potentials for their own or organisational development purposes Develop organisation culture in which superior-subordinate relationships, teamwork and, collaboration among sub-units are strong & contribute to the professional well-being, motivation and pride of employees. Further, Rao (15) defines human resource development (HRD) as essentially consisting of these three Cs: competencies, commitment, and culture. All three are needed to make an organisation function well. Without competencies many tasks of the organisation may not be completed cost effectively or with maximum efficiency. Without commitment, they may not be done at all or are done at such a slow pace that

42 they lose relevance. Without an appropriate culture, organisations cannot last long. Culture provides the sustaining force and spirit and spirit for organisations to live. It provides the oxygen needed for them to survive. Its utility comes to the force specially when organisations are in trouble. Many people are not very clear as to the difference between HRD and personnel functions. As a result, personnel managers are automatically being designated as HRD managers performing personnel and industrial relations function. Indian Oil Corp. (IOC), one of the leading public sector undertakings, has successfully implemented its HRD programme and has achieved worthwhile results. The basic principle of HRD philosophy is the belief in - (i) human potential & its development; (ii) Optimum utilisation of human resources; & (iii) a harmonious balance between business strategy and HRD strategy i.e., strategic planning and HRD should go hand in hand. IOC adapted the leading consultant Dr. M.B. Athreya's model (16) of strategic management and organisation development. According to this model, OD & HRD efforts may tend to be wasteful exercise, if there are no opportunities to utilise the development of human capability. Similarly, all strategic options in terms of business plans will remain unfulfilled, if human resources are not made available to implement them. The SM-OD Model, can be shown diagrammatically as follows: STRATEGIC MANAGEMENT [SM] AND ORGANISATION DEVELOPMENT [OD] MODEL

OD ADEQUATE SM OD ADEQUATE STRATEGIC BALANCED OPTION ORGANISATION INADEQUATE WASTEFUL STRATEGIC OPTION

INADEQUATE OD WEAK (VULNERABLE) DECLINING

Aligning HRD strategy with the organisational strategy becomes essential. The strategy of an organisation flows from its vision. Strategy is the responsibility of a company’s executive team of which HR is a member. To be full-fledged strategic partners, HR executive should impel and guide serious discussion of how the company should be organised to carryout its strategy. However, the primary responsibility for transforming the role of HR belongs to the CEO and every line manager who is answerable to shareholders for creating economic value, to customers for creating product or service values and to employees for creating work place values. The line managers should lead the way in fully integrating HR into the company’s real work. HRD is thus the responsibility of both: line managers and HRD /Personnel specialists. It is a co-operative and massive effort in the organisation. Pareek & Rao (17) have identified four basic partners of development viz.: (i) the self (the individual); (ii) the immediate superior (boss); (iii) HRD department and (iv) the organisation. Rao & Pareek observed that there are six units in an organisation which are concerned with HRD. These are: - (i) person; (ii) role; (iii) dyad; (iv) team; (v) inter-team & (vi)

43 organisation. The effectiveness of one unit (foci) will contribute to the effectiveness of others. HRD is an integrated process and cannot be thought of in isolation. According to Rao, major interventions of HRD are: (i) Performance and potential appraisal; (ii) Career Planning; (iii) Training; (iv) Organisation development; & (v) reinforcement. HRD interventions may vary from one organisation to another depending upon their needs, based on diagnostic studies. For example, role analysis was the core of its HRD programme in IOC, whereas SBI started with performance appraisal as the first intervention of HRD. Since the future is going to be much more demanding, the HRD function will have to develop new strategies and technologies to enable their organisations to survive, cope and adapt in the turbulent environment. It is, therefore, essential to grasp the promises that a good HRD philosophy of an organisation must achieve the objectives i.e. more satisfied customers, more empowered employees, more able employees, more unified culture, greater creativity, greater flexibility and better quality. If these are fulfilled, the expectations of employees as well as organisations will be met. However, these are easier said than done. References: 1.J.N. Jha: Quality is directly proportional to human resource development, Personnel Today, 8(2), 1987, p. 28-36 -P. Sarathi: Human Resource OIptimization: An integrated approach. Personnel To-day, 8(2), 1987, p.5-13. -Maheshwari& T.V.. Rao: Eds. Excellence through human resource development: improving productivity and competitiveness. Tata McGraw Hill Publishing Company Ltd., New Delhi, 1990 2. B.N. Athalai: HRD: The state of the art in Indian Telephone Industries Ltd., Indian Jr. Of Training & Development, 17(1), 1987, P. 23-28 -A.K. Singh: Human Resource Development Retrospects and Prospects: In AL Dalal & A K Singh (Eds) Research in Human Development, Gurgaon, Academic Press, 1989 -M.R.R. Nair & T.V. Rao, (Eds): Excellence through Human Resource Development. Improving productivity and competitiveness, New Delhi, Tata McGraw Hill publishing Company Ltd. -D.M. Silvera: Human Resource Development: The Indian Experience (2nd Ed), New Delhi, News India Publications, 1990 3. A K Singh & A K Sen: HRD Culture - A Model, MDI Management Journal, Vol.5, Ist January, 1992, New Delhi, p. 113 4. L. Nadler: "Defining the Field - Is it HRD or OD or" Training & Development Journal, Published by ASTD, 34, No.12 (December 1980), p. 66 Fransisco, 1986, p. 8. 5. C.R. Basu: Human Resource Development, Indian Journal of Commerce, Vol. XI (Jan-June 1987), P. 150-151 6. T.V. Rao & D.F. Pereira: Recent Experiences in Human Resources Development, Oxford & IBH Publishing Company, New Delhi 1986.

44

7. Ishwar Dayal and others : Successful Applications of HRD : Case studies of Indian Organisations, New Concepts, New Delhi, 1996, p 9-10. 8. Nadler (Leonard) & Wiggs (Garland). Managing Human Resource Development : A practical Guide. Jossey -Bass Publishers, San 9. R.P. Billimoria & N.K. Singh: Human Resource Development, Vikas Publishing House Pvt. Ltd, New Delhi, 1985, p.3 .pa 10. Ishwar Dayal: HRD in Indian Organisations: "Current Perspectives and Future Issues". Vikalpa, Vol.14, October-December 1989, P. 9-15Ishwar Dayal, Designing HRD Systems, New Delhi, Concept, 1993 11. M.N. Khan: HRD in Model Technological Structure Indian Journal of Commerce, XL No:150-51, Jan-June, 1987, p. 83

12. T.V. Rao, K.K. Verma, A.K. Khandelwal and S.J. Abraham: Alternative Approaches and Strategies of Human Resource Development ed, Rawat Publication 1988, Jaipur, P. 6- 12. ibid 13. Ibid 13.Op.cit

14.Op.cit

15. T. V. Rao : HRD Audit : Evaluating the Human Resource Function for Business Environment, Response Books, New Delhi, 1999, p 17-18 16. M.B. Athreya: Integrating the Human Resource Profession with Business - The challenges Ahead) HRM 2000: Indian Perspective ed. by K.B. Akhilesh and D.R. Nagaraj. Wiley Eastern Ltd., New Delhi; 1990, P-73. 17. Udai Pareek & T.V. Rao: Designing & Managing Human Resources systems, Oxford & IBH publishing company, New Delhi, 1981, p. 6-7

45

Integrated HRD System Model Selection, induction, placement

appraisal

Man power forecast

Role analysis

Corporate planning

Succession planning

counselling

Data bank

career planning

Self development

Training

Rotation & transfer

46

PERSONNEL FUNCTIONS •General Administration •Manpower Planning (Recruitment only) •Implementation of Transfer, Posting & Promotion •Establishment matters •Implementation of HRM Subsystems •Industrial Relations, Welfare •Maintenance of all personnel records. HRD IN IOC: A CASE STUDY by Dr. Aloke K. Sen The Process of Evolution Indian Oil Corporation Ltd.(IOC) is the largest commercial enterprise in India, and the only Indian presence in the Fortune’s “Global 500” listing of the world’s largest corporation with a ranking of 226 for fiscal 2001 and in the “Forbes International 500” list of the largest companies outside US IOC’S rank is 112. Indian Refineries Ltd. and Indian Oil Company Ltd. were set up in 1958 and 1959 respectively, to build national competence in the oil refining and marketing business. On 1st September 1964, these two companies were merged to form Indian Oil Corporation Ltd. Thus, the corporate entity of IOC came in 1964. About IOC IOC has a large , divisionalised, multi-locational structure, dispersed throughout the country, with its corporate office at New Delhi. It has two major divisions“Marketing” with its head office at Mumbai and “Refineries and Pipelines” with the head office at New Delhi. The R & D division is located at Faridabad (Haryana). There are seven refineries namely: Guwahati, Barauni, Gujarat, Haldia, Mathura, Assam Oil Division and Panipat. The Pipelines set-up functions have two major regions- Eastern Region and Western Region. Similarly Marketing Division operates through its four regions i.e. North, South, East and West. IOC has 359 establishments ( terminals, depots, AFS, LPG bottling plants including refineries) and 1550 retail outlets, 31,675 employees (including officers & staff ), the annual turn over and market share are Rs.1,14,864 crores and 53% respectively as on March 31, 2002.

47 The Concept of HRD The concept of HRD in IOC emerged in 1983 for sustaining excellence and not for solving short-term crisis or problem. IOC believes that. - HR is an important resource and has tremendous potential; - It is necessary to provide people with an environment where their potential could be developed; - Development of people’s potential is important to develop the organisation; - Help people to do their self -development. The basic principle of HRD Philosophy is the belief in: - human potential - its development - optimum utilisation HR & - to have a dynamic balance between business and HRD strategy. Objectives of HRD - to gear up people to achieve corporate mission - to prepare people for succession - to get satisfaction and best use of people. Purpose to have HRD in IOC People came from divergent sources in IOC during 60’s. Top management realised in 1966-77 that people inducted in the age group of 30-40 years have no future due to: 1) Many roles got eroded and divided with abrupt induction on project requirement; 2) Lack of career path and advancement opportunities; 3) Size of the organisation grew fast leading to less personal touch amongst the people joined in 60’s; 4) Lack of role clarity; 5) Lack of motivation and commitment; 6) Dissatisfaction on transfer policy; 7) Performance appraisal(adhocism); 8) Sense of alienation with the recruitment of the youngsters; 9) Lack of mission and zeal; 10) Lack of team-work; 11) Many levels of hierarchy; 12) Market share declined from 64% to 57% in 1977 To sustain the growth a need was felt that whatever potentials available within, IOC must harness it and bring improvements. Sub-systems of HRD HRD covers all HRM functions ,that is, recruitment to retirement ( R to R ). The subsystems are : - manpower planning and budgeting; - role analysis - recruitment , selection, induction and placement;

48 - performance appraisal and counselling; - promotion; - training; - career and succession planning; & - human resource data bank. HRD Strategy IOC’S HRD initiative and strategy to achieve corporation’s goal have two dimensions: 1) Examine the existing HRM system and bringing in appropriate changes; 2) Examine the human processes in the organisation and provide appropriate interventions. The HRD activities in IOC were taken up in seven phases, as follows: Phase I 1983-84 Formation of HR Strategy Phase II 1984-85 Action Research Project at Selected Locations Phase III 1985-86 Role Analysis (RA) & Extension Phase IV 1986-87 Implementation of HRD sub-systems Phase V 1987-88 HRD for Collectives Phase VI 1988-90 HRD Innovation & Consolidation Phase VII 1990-91 Integration of HRD & Personnel into a unified HRM structure

The Study This study was undertaken at IOC as part of a larger study on “HRD in Indian organisations”. Basically the study was done to assess evolution, purpose, organisational strategies and effectiveness of HRD programme in IOC. The study would help us to understand: 1. What are the reasons for the particular HRD approach in the organisation, the corporate policies and the way HRD fits into the totality; 2. How has the programme evolved; 3. What are the factors that have contributed to its success; 4. What role have different functionaries played in initiating and operating the programme; 5. What is the impact of the programme on the target population.

49

Methodology The study of HRD interventions in IOC had two phases: Phase I Involved in-depth and extensive interviews and discussions with senior management in the department of HRD, personnel, management services, technical services, coordination and training , and the people involved in the initiation of HRD efforts in IOC. Phase II A sample size of 123+99 i.e. 222 was drawn based on stratified random sampling method, out of which 118+93 i.e. 211 officers were contacted. The first questionnaire was designed to assess the effectiveness of HRD activities in IOC and also the HRD climate ( A to I Grade ) and the second one for E to G Grade (on new performance appraisal ). The sample was drawn keeping in view the following factors: 1. Representation of officers from a cross section of grades , departments, functions; 2. Coverage of the HRD programme of IOC; & 3. Representation of Operational Units like Aviation Depot, LPG Bottling Plant, Terminal and Refinery. The total number of persons involved, fell slightly short of the number identified due to non- availability of respondents. Levels ( Grades) A: Officer B: Sr. Officer C: Dy. Manager D: Manager E: Sr. Manager F: Dy.General Manager

50 G: General Manager H: Chief General Manager I: Executive Director

Scale ( 5- point Likert type ) 5 4

Almost always true] Always Mostly true ] true

3

Sometimes true

] Partially true

2 1

Rarely true Not at all true

] Seldom ] true

For purpose of analysing percentage variation in responses, the 5- point scale has been compressed as above Target Population A. Northern Region Marketing Nos. LPG 36 Terminal Bijwasan) 18 Refinery Co-ordination Office 22 Aviation Fueling Station 31 Remaining NRM 1025 B. Chairman’s Office C. Refineries HQ D. Mathura Refinery E. Pipelines Bijwasan Head Office

73 253 482

Total

52 179 ___________ 2171 ___________

Critical Evaluation of HRD Efforts in IOC The HRD programme in IOC was not an outcome of any grave crisis or turbulence. On the contrary it emerged out of a strong need felt by the top management to sustain high growth and to improve the motivation level of employees. Thus it was more of a renewal process rather than a fire-fighting one. Strengths of the Programme

51 * A need-based programme * Participation is built into the system * Climate creation – an essential pre-requisite * A scientific approach * Top management vision & commitment * HRD as a corporate philosophy * Bringing objectivity in the system * A well-monitored programme * Development of internal change agents * Having an expert (outside consultant) throughout for acceptability in the initial stage Weaknesses of the Programme * The programme has not spread to lower levels of managerial hierarchy. 20% respondents were not aware of role analysis exercise, same percentage of respondents had not been exposed to HRD workshop. * The programme emphasized on the mechanism more than the process. * Certain personnel policies like potential appraisal, manpower planning etc. have been initiated but need to mature. * For a programme that has been in operation for 5-7 years, the lower category of officers remain relatively less involved. * HRD for workers has been taken up in recent past, it appears that considerable work has to be done to conceptualize and translate HRD interventions for workers. References: Ishwar Dayal , Sen & Others (1996) : Successful Applications of HRD: Case Studies of Indian Organisations, New Concepts, New Delhi MDI Management Journal (Focus on HRD), Vol.5 No. 1 ,January 1992, Gurgaon Annual Reports of IOC 1991-92, 1997-98 & 2001-02