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Human Resource Management

Unit 1

Unit 1

Human Resource Management An Introduction

Structure: 1.1 Introduction Objectives 1.2 Distinction between Personnel Management & Human Resources Management 1.3 Human Resources and its importance 1.4 Evolution of the Human Resource Management 1.5 Human Relations Theory 1.6 Objectives of Human Relation 1.7 Summary 1.8 Caselet 1.9 Terminal Questions 1.10 Answers

1.1 Introduction
As you look around you, you will see that todays organizations is characterised by constant changes. These changes relate to global economic factors as well as shifts in kind of people that are currently employed in organizations. You will agree that the life style of employees has significantly changed as compared to what you saw 8-10 years ago. The economic changes sweeping through all countries are significantly impacting work culture, working procedures, and workplace norms. For example you will find .... that people are changing jobs more often people work longer and even carry work home the hiring process in firms are more elaborate and take longer than it used to, to hire a employee firms today take more care of their employees, lot more facilities and benefits given to employees This Unit focuses on introducing you to the most critical success factor for an organization its human resource.

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Todays corporation constantly moulds itself to meet the business challenges despite economic, political and social patterns in which it exists. The efforts made by organizations to sustain business metrics like revenue, profits and growth, market share is possible only through the people in the organization who work towards making this happen within the enterprise. One of the most useful definition of Human Resources Management (HRM) is provided by Fisher, Schoendfelt and Shaw in their book Human Resources Management, HRM involves all management decisions and practices that directly affect or influence the people or Human resources who work for the organization. And yet another simple definition is provided by Bernardin and Russell in their book Human Resources Management An Experiential Approach, as How people are managed is human resources management. And to add to the external challenges there are internal challenges, the workforce is constantly changing their ideas, attitudes and values. Per Dale Yoder observation, employment relationships in corporate revel the following trends: 1) Increased complexity of organization and employment communication and a distinction between owners, managers and employees. 2) Decreased number of employers and self-employed and enlarged size of workforce. 3) Enhanced need for training in view of increased requirements of specialised skills. 4) Public interventions and legal complication in employer-employee relationships. 5) Enhanced training and development of managers and professionalization of management education. 6) Possibility of employment explosion in view of the ever-increasing size of workforce. 7) Rising formal level of education of rank-and-file employees who are becoming increasingly critical of management malpractices and errors 8) Rank-and-file employees rapidly growing demands in different employment situations. 9) Increased applications of behavioural science by enterprising managers.
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10) Recognition of close relationship between profits and earnings and ability to manage human resources. These trends help an organization to re-engineer itself to ensure that the business metrics are met and the organization remains profitable. Although the changes may provide solution to some problems, they may create several new ones. For example the workforce that constitutes the IT industry is highly educated and ranks high on intellect which proves a boon to the rapid progress that technology has brought about in improving the quality of life for people around the world. This workforce however needs to be managed carefully to deliver the desired results, for example a poor quality software code can jeopardise the reputation of the entire organization with its clients and hamper future contracts and projects. Awareness of these challenges enables the managers as well as the HR teams within the organization to anticipate them and build necessary policies and procedures to meet them. The ability to find the solutions to these problems can play a critical role in the organizations ability to cope with the challenges and be profitable. Herein the HR department plays the role of a consultant advisor while the manager owns the responsibility to decide the best course of action and be responsible for execution. Specifically, the managers responsibility is to lead, guide and direct the efforts of his team to reach the desired goals. Therefore it is a critical competency for every manager in todays organization to be effective human resources professional as well and be responsible and accountable for his people responsibilities as much as for the business results. Objectives: After studying this unit, you will be able to: Distinguish between Personnel Management and Human Resource Management Explain Human resources as a function Debate the importance and evolution of HRM Discuss the Concept of Human Relations and its objectives

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1.2 Distinction between Personnel Management & Human Resources Management


The history of Human Resources Management traces its roots to the erstwhile Personnel Management that was prevalent in the companies of a few decades ago. Though the two terms 'Personnel Management' and 'Human Resources Management' are interchangeably used by most of the authors, there are key differentiators that make Personnel Management (PM) different from Human Resources Management (HRM). HRM is clearly based on the foundation of behavioural science knowledge relating to the handling of employees to motivate organizational goals. The focus is more proactive approach and pays attention to employee satisfaction and delight. Business goals and objectives and the strategies that will enable this to happen are the foundation for HRM. The basic philosophy is driven by the Theory Y approach where the belief is that people like to work and do not prefer to be supervised and made to perform. The employee becomes a champion for the organization and its product/service. PM is that management style that deals with the control and reactive problem solving approach to resolve employee issues in a organizations. The philosophy for the PM approach relied on the Theory X approach that believed that people do not naturally like to work and need to be coerced to work and often need to be driven to work. Is more the stick approach rather than carrot approach. Rigid rules of dos and donts exist and these provide the framework for employees behaviour at the workplace. Employee welfare and formal grievance systems play a significant role here and thereby managing industrial relations with high amount of trade union activity are highlighted. Very few organizations today practice this style to people management, as the benefits and the long term gains from a HRM approach, impact business results far more. HRM emphasizes on training, as an important area of people management, which covers the following aspects: 1. Increasing productivity 2. Improving quality 3. Improving organisational climate 4. Ensuring personnel growth etc.

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Self Assessment Questions 1. Personnel Management is proactive while Human Resources Management is reactive (True / False) 2. Trade unions influence the HRM policies of a company (True / False) 3. PM practices support business results better than HRM practices (True / False) 4. Career planning and employee growth is a initiative of the HRM philosophy (True / False) 5. A grievance management system is a common HRM function. (True / False)

1.3 Human Resources and its Importance


For any country its human resources can be defined as the sum total of the knowledge, skills, creative abilities, talents and aptitudes. Similarly, from the viewpoint of an organization, it represents the sum total of inherent abilities, acquired knowledge and skills, talent and aptitudes of its employees. The human resources have also been designated as human factors. According to Julius, the human factor refers to a whole consisting of inter-related, interdependent and inter-acting physiological, psychological, sociological and ethical components. In order to have healthy human resources there is the need to pay attention to and provide for physiological components, such as food, rest and environmental conditions to satisfy the physiological needs of people at the workplace. Also important is focus on protection against harmful and destructive conditions and attempts to avoid drop in income/benefits or even employment status (e.g. a demotion from a higher level or role to a lower level or role) so as to have physiological security. On the psychological aspects, there is the element of emotions and impulses. These aspects are far more subjective and to add to the challenge are uniquely different for each individual. While something can inspire someone the same things can depress and act as a de-motivator for others. People in the organizational context have numerous psychological needs such as autonomy, achievement, power, acquisitiveness etc. It is natural for employees to look for the satisfaction of these needs within the organization. As a social being, each individual looks to satisfy his/her personal needs
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and aspirations as also the sense of affiliation, status, recognition, prestige etc. Another factor that influences individuals at work are ethical in nature and it addresses the right and wrong-ness of whatever the individual experiences. Conflicts in what the individual perceives as right or wrong vs. what the organization encourages as right or wrong impacts the behaviour of the individual and his/her satisfaction /well-being within the organization. It is not uncommon of people leaving a company because they did not like the policies that they needed to comply with, e.g. corruption in dealing with certain authorities etc. There is no doubt that human resources have been critical in organizations since the very beginning and continue to be critical and significant in todays organizations. The paradox lies in the fact that even today the majority of challenges in organizations pertain to the human and social rather than physical, technical or economic factors. It is a truism that productivity is associated markedly with the nature of human resources and their total environment consisting of inter-related, inter-dependent and interacting economic and non-economic (i.e., political, religious, cultural, sociological and psychological factors. Thus, the significance of human resources can be examined from at least two standpoints-economic and non-economic. While the economic factors are easily identifiable and controllable the noneconomic factors require keen observation and listening skills and will need to be redressed differently and sensitively. Self Assessment Questions 6. According to_____________, the human factor refers to a whole consisting of inter-related, interdependent and inter-acting physiological, psychological, sociological and ethical components. 7. The ______________ elements in managing employees are more challenging as compared to the physiological ones. 8. Psychologically, it is characterised by ____________ and _____________. 9. Majority of the problems in organizational setting are _________ and _______ rather than physical, technical or economic.

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10. Conflicts in perception w.r.t. __________ also impact employee behaviour at work.

1.4 Evolution of the Human Resource Management


The historical background to the management techniques of human resources are in vogue since ancient times. Its only in the past 100 odd years that the techniques and study of human behaviour at work has become formal and structured with certain basic practices established as core and a host of other practices left to each organization to design and implement as per their individual business driven practices. As per Fisher, Schonfeldt and Shaw, in their book titled Human Resources Management, they have characterised the history of HRM as having evolved through four broad phases, the Craft system, the scientific system, the human relations approach and the prevalent organizational science-human resources approach. The Craft system refers to early trends noticed in Egypt and Babylon, where skills based training was provided to people to ensure a steady flow of craftsmen required to build huge monuments. By the 13th century, subsequently the trend was noticed in Europe and later craft guilds evolved to ensure not only the skill acquisition but regulate the conditions of employment, level of skill and improved production techniques. Most relevant in the domestic industry where generations of skilled workers trained and became experts in a particular skill. The Scientific Management approach was a key part of the industrial revolution typical of the nineteenth and early twentieth century. It was instilled in the principles of mass production and organization of work simple work skills and supervisory/managerial skills. This rapidly emerged as the assembly line approach to managing workflow, which later Fredrick Taylor (1856-1915) pioneered based on the philosophy that employees wanted to be used efficiently and money being the primary motivator. Over a period of time this was proved wrong as employee dissent grew and union issues surfaced. It was during this phase that employee welfare as a key HR practice emerged which redressed employee issues like recreational facilities, medical program and employee grievance systems.

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The Human Relations approach was an outcome of the famous studies undertaken by US social scientist Elton Mayo and Fritz Roethlisberger at the Western Electrics Hawthorne plant in Chicago. The Hawthorne Studies: As described in virtually every book written about management, the human relations or behavioral school of management began in 1927 with a group of studies conducted at the Hawthorne plant of Western Electric, an AT&T subsidiary. Curiously, these studies were prompted by an experiment carried out by the company's engineers between 1924 and 1932. Following the scientific management tradition, these engineers were applying research methods to answer job-related problems. Two groups were studied to determine the effects of different levels of illumination on worker performance. One group received increased illumination, while the other did not. A preliminary finding was that, when illumination was increased, the level of performance also increased. Surprisingly to the engineers, productivity also increased when the level of illumination was decreased almost to moonlight levels. One interpretation made of these results was that the employees involved in the experiment enjoyed being the centre of attention; they reacted positively because management cared about them. The reason for the increase in the production was not the physical but the psychological impact of the employees attitude towards the job and towards the company. Such a phenomenon taking place in any research setting is now called the Hawthorne effect. As a result of these preliminary investigations, a team of researchers headed by Elton Mayo and F.J. Roethlisberger from Harvard conducted a lengthy series of experiments extending over a six year period. The conclusions they reached served as the bedrock of later developments in the human relations approach to management. Among their key findings were the following: Economic incentives are less potent than generally believed in influencing employees to achieve high levels of output. Leadership practices and work-group pressures profoundly influence employee satisfaction and performance.

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Any factor influencing employee behaviour is embedded in a social system. For instance, to understand the impact of pay on performance, you also have to understand the climate that exists in the work group and the leadership style of the superior.

Leadership Style and Practices: As a consequence of the Hawthorne Studies, worker attitudes, morale, and group influences became a concern of researchers. A notable development of the nature occurred shortly after World War II at the University of Michigan. A group of social scientists formed an organization, later to be called the Institute for Social Research, to study those principles of leadership that were associated with highest productivity. Based upon work with clerical and production employees, an important conclusion was that supervisors of high-producing units behaved differently from those of low-producing units. Among the differences in style noted were that supervisors of productive groups in comparison to their lower producing counterparts were: More emotionally supportive of subordinates. More likely to pay a differentiated role - plan, regulate, and coordinate the activities of subordinates, but not become directly involved in work tasks. More likely to exercise general rather than close or light supervision. The origin and progress of the human relations movement (particularly in U.S.A.) has been due to certain social and cultural forces working there, such as Recognition of the dignity of the individual and his personality. The individual has a lot of freedom of choice and the idea of decision-making by oneself is deep-rooted in the national tradition. A child is brought up to value independence and encouraged to think on his own and not to be dependent on parents. Virtual disappearance of owner managers and the growth of professional managers capable of managing according to professional code. Strong organizations of labour, at all levels, calling for higher skills in communication and participative behaviour on the part of the management.

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Shortage of labour led to skilled labour being treated as nearly irreplaceable. Hence, much greater care in utilising this scarce and valuable resource had to be thought of in the form of "Human Relations." Higher standards of living of American labour. Since their physical and security needs were generally satisfied, increased participation alone could satisfy their emerging social and ego needs. The possible weakening of work ethics, requiring managers to develop new attitudes towards labour. The changing work environment-greater specialization and a large scope of operations which require a greater degree of managerial effectiveness with and through employees. A significant increase in the general educational level of employees who, as a result, demanded more from their employers.

Concurrent with the growth of human relations in work organizations, has been the burgeoning of techniques and programmes to foster human growth off the job. In the last two decades, millions of people seeking personal growth (or sometimes simply emotional arousal) have participated in programmes such as encounter groups, marriage enrichment groups, seminar training, couples groups, and transactional analysis. During the early 1970s, the human potential (meaning development of one's potential) movement began to appear in work settings. Management awareness training and assertiveness training represent two other techniques related to the development of human potential. Both are designed to deal with the problem of job discrimination against women. In management awareness training, managers are made more sensitive to their sexist attitudes (such as thinking of all engineers are male) and in changing their attitudes. Assertiveness training has been widely used to help women to be more direct in making known their demands for equal opportunity. Career development programmes in industry are more prevalent today than at any time in the past. Although varying widely in content, all these programmes are designed to help the individual make career decisions that will move him or her toward self-fulfillment. In the process, it is assumed that the person will make a better contribution to the organization.
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Finally the Organizational Sciences approach to human resources management has brought the focus to the scientific process within organizations that can impact employee experience, and less on just the individual. Todays organizations focus on building their processes and policies and compete to emerge as preferred employers (best employer). It is not uncommon for competing organizations to woo the employees through advertising more and better employee-friendly initiatives like workfrom-home jobs, careers for married couples, global work assignments and internal job postings and world class workplace infrastructures from incampus cricket grounds to gymnasiums for employee wellbeing. This is the HR that we now see around us. Activity 1: Maintaining a competent and motivated workforce is a difficult task. From your general observations, list out four major challenges, a HR Manager faces in maintaining a competent workforce. Self Assessment Questions 11. Leadership practices and work-group pressures profoundly influence employee __________________________________. 12. Any factor influencing employee behaviour is embedded in a __________. For instance, to understand the impact of pay on performance, you also have to understand the __________that exists in the work group and the ____________ of the superior. 13. The origin and progress of the human relations movement (particularly in U.S.A.) has been due to certain________________________ working there, such as Recognition of the dignity of the individual and his personality. 14. In management awareness training, managers are made more ___________ _____________(such as thinking of all engineers are male) and in ___________ ___________________.

1.5 Human Relations Concept


To understand the nature of human relations, we begin with a concise and operational definition that acts as guidance to what people expect at work.
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Human Relations in Management is a process that brings employees into contact with and causes them to be influenced by their leaders, their jobs, and other aspects of the organizations which they work in. It includes everything at the workplace that influences the behavior of employees: their relationships with their mangers, with other employees, the kind of work they do, and the impact on them of the practices of the organization as a whole. As discussed earlier this knowledge of the employees expectations are critical for the achievement of the business results of revenue, profit, growth, market share. In the best possible way, "human relations refer to the interaction of people in all walks of life-in schools, homes, business and government." Huneryager' and Heckmann define the expression thus: ... Human relations are a systematic, developing body of knowledge devoted to explaining the behavior of individuals in the working organization." In the opinion of McFarland, "Human Relations is the study and practice of utilizing human resources through knowledge and through an understanding of the activities, attitudes, sentiments, and inter-relationships of people at work." When applied to a business or an industry, it refers to every dimension of interaction that happens between employee and employee, employee and manager, teams and managers, employee and customer and employee and vendor (one who provides a support or a service). It is therefore a key objective of every organization to ensure that all dimensions of the human relations are redressed appropriately to ensure positive human relations. When a relationship exists in an organization, it is referred to as 'employeehuman relations'; and when it exists outside it, it is known as 'public human relations'. Organizations need to pay due attention to not just the way it treats employees but also the methods and processes in place to recognize and reward teams of employees depending on what they achieve and deliver for the organization. This calls for another dimension in managing human relations that focus on the employee as a social animal. To place it in perspective, the human relations focus of an organization needs to have programs in place to take care of: a) Employee needs b) Team needs c) Customer/vendor needs
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The challenges in front of the modern organization are therefore many and varied, but have to be met in order for survival. Self Assessment Questions 15. ______________________________ is a process that brings employees into contact with and causes them to be influenced by their leaders, their jobs, and other aspects of the organizations which they work. 16. The decline in popularity of the term human relations" stems in part from the frustrations experienced by managers of the fifties and sixties who attempted to use a human relations concept which was unrealistically limited to ___________________________. 17. In the broadest sense, human relations refer to the _______________ of people in all walks of life-in schools, homes, business and government.

1.6 Objectives of Human Relations


A human Relations Programme thereby attempts at enhancing employee motivation and workplace morale through an improved three-way communications and through employee participation in the decision making processes. Human relations seek to emphasise 'employee' aspects of work rather than technical or economic aspects. For example while it might be in the best interest of an organization to have a employee skilled and completely proficient in one job/ set or responsibilities, todays organization provides opportunities for employees to multi-skill and acquire knowledge of new yet related jobs/responsibilities. These acts as a motivator for employees as they benefit by learning new skills / jobs and given an opportunity can perform and excel in another job. It also seeks to make employment and working conditions less impersonal. The human relations approach emphasises policies and techniques designed to improve employee morale and job satisfaction. For example it is common place in organizations to provide for / encourage employee empowerment where-in the team brings about creative measures to reduce cost/ improve customer satisfaction. Such teams design and implement self-driven initiatives to bring

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about the business result. It is believed that this is accompanied by increased employee efficiency and reduction in employee dissatisfaction. An understanding of emerging workplace human behaviour can be summarised as: i) Assist the manager to develop a better realization of how his own attitudes and behaviour play a part in everyday affairs of the team and its morale; ii) Assist the manager to develop a keener sensitivity towards the team members and interpersonal dynamics iii) Partner with the managers in helping him drive the business goals and take part ownership of work challenges and how best to resolve them iv) Enable him to anticipate and prevent problems, or at least to resolve more effectively those that he cannot avoid; and v) Network with other teams with related dependencies and help resolve inter-team business impacting challenges This Scope of Human Relations springs up from the problems which have many different causes and perspectives. Halloran has stated these as: Every person brings a unique set of talents, ambitions and work experience to a job. These personal attributes change over time, often as a result of the degree of success or failure the person experiences in the work world. Matching so many unique sets of personal qualities to a standardized technology can create problems. The organizational aspects of a company, such as its size, geographic location, economic health, and degree of automation, define the scope of work and the activity in each work division. These frequently arbitrary, structural definitions often cause difficulties in human relations. Innovations in technology and production methods generally require the restructuring of job roles and responsibilities. Radical changes in basic organizational structure can cause severe strains between employees and management and create intense problems in human relations. Promotion of individuals to positions of greater responsibility and authority generally creates a need for changed behaviour patterns between the new supervisors and their former peers, which in time, can create human relations problems.

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Inexperienced employees may not be able to perform their roles or tasks in work groups in a competent manner. The time they take to adjust can not only create problems with production schedules, but can also create particular kinds of human relations problems between them and their coemployees and supervisors.

The variety of causes of human relations problems lead to the conclusion that no one programme or single approach can create conditions for good human relations. Therefore, as shared earlier it in common for organizations and individuals in organization to constantly innovate and resolve challenges that will benefit both the organization as well as the employee. This helps understand the key HR objectives which can be best illustrated by understanding the functions that HR attempts to fulfil in any organization: i) Human Resource Planning estimating the need for resources in order achieve the desired business results. HR plans can be both short term/immediate as well as long term / strategic. The HR team partners with the line managers to understand the business goals and targets for the year and then together plan the HR needs in order to meet the goals. Acquisition of human resources staffing the organizations with the right mix of skills and competencies at the right time. It also includes HR initiatives like promotions and internal job posting to fulfil this requirement for human resources. Staffing teams in organizations are usually a separate group of specialists who work closely with the line managers to understand the skills and competencies needed for the job and engage together to select the best talent for the open positions. Training and employee development focuses on managing training activities to upgrade skills and knowledge as well as soft skills like team building and leadership. The training team is again a group of HR specialists who propose the training program and consult with the line managers to ensure that the program achieves the desired outcomes. Building performance management systems focuses on the right processes to set goals for performance as individuals/teams and related measurement methods. This is a core HR activity and is supported by the HR generalist.

ii)

iii)

iv)

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v)

Reward systems establishing appropriate compensation systems and reward mechanisms that would reward the desired outcome and results in accordance with the corporate values. This again forms a part of the HR generalists tasks. How employees progress in a organization how they are paid w.r.t. internal and external market factors, what employee benefits are offered, are some aspect that this function redresses. Human Resources Information Systems that would take care of the operational transactions from the time an employee joins till the time the employee exits, like personnel files, compensation administration, payroll, benefits administration and issuing letters and testimonials. This task is supported by as separate HR operations team who act as a HR helpdesk and provide information to the employees/managers.

vi)

Activity 2 Read 2-3 articles and list out few welfare measures e.g. pensions plans etc, which companies are offering to their employees. Then against each, mention the reason, why you think the company has provided this benefit.

Self Assessment Questions 18. 19. Human relations seek to emphasise '_________' aspects of work rather than technical or economic aspects. Every person brings a unique set of talents, ambitions and work experience to a job. Innovations in technology and production methods generally require the restructuring of __________________________. ____________________may not be able to perform their roles or tasks in work groups in a competent manner. ___________________________ help determine the correct processes for setting goals and measuring achievements.

20. 21.

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1.7 Summary
Management of human resources is the essence of being a manager who has to get things done through others. And in this activity the manager is supported by the HR professionals who act as the expert providing the right guidance within the framework of the organizations policies and practices. The human resources have also been designated as human factors that need to be managed at the workplace in order to ensure that the business objectives are met. According to Julius, the human factor refers to a whole consisting of inter-related, interdependent and inter-acting physiological, psychological, sociological and ethical components. Majority of the problems in organizational setting are human and social rather than physical, technical or economic. The physical resources will not give results unless the human resources are applied to them. Management of human resources is being regarded as a specialised profession such as that of medicine and law. The Human Resources Department is responsible for many varied functions including employment, safety, training, wage and salary administration and research and development. The Head of the Human Resources Department is associated with top management and helps it in the formulation of Human Resources policies for the company. Human Relations in Management is a process that brings employees into contact with and causes them to be influenced by their leaders, their jobs, and other aspects of the organizations which they work. It includes everything in the work environment that influences the behaviour of employees: A human relations programme represents an attempt at improving employee morale and motivation. As a consequence of the Hawthorne Studies, worker attitudes, morale, and group influences became a concern of researchers.
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The terms Personnel Management' and 'Human Resources Management' are interchangeably used by most of the authors, though there are some differences between them. HRM is a broad concept which covers many personnel aspects and includes social, professional and individual enterprise aspects, whereas Personnel Management focuses only on personnel aspects such as leadership, justice determination, task specialisation, staffing, performance appraisal, etc. HRM is more growth-oriented whereas Personnel Management is slightly narrow.

1.8 Caselet Talent management: How to invest in your workforce


By Douglas MacMillan The war for talent. - The coming brain drain.- Mismanaged succession. In recent years, judging by steady increases in spending on talent management, workforce challenges like these have become top of mind for most companies, large and small. But what is the most productive way to invest in your workforce, and what are the chances you will see a tangible return? A new study conducted jointly by IBM's Institute for Business Value and Washington-based think tank Human Capital Institute (HCI), and shared exclusively with BusinessWeek.com, has yielded promising answers to those questions. Last spring, researchers from IBM and HCI surveyed 1,900 professionals in over 1,000 public- and private-sector companies, from a range of industries, geographies and organizational sizes. Respondents scored their companies in 30 specific competencies, which fell into six key practices of talent management: strategy development, attracting and retaining, motivating and developing, deploying and managing, connecting and enabling, and transforming and sustaining. Companies with high scores across the board were more likely to have strong financial performance, based on reported change in operating profits
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between 2003 and 2006. "It's not the first research to show a correlation between talent management and financial results," admits Allan Schweyer, executive director of HCI and one of the authors of the report, "but it's one in a handful, and I think it really adds to that body of evidence that is helping organizations to build a solid business case for investments in talent management." Planning ahead Organizational size was a main difference-maker between companies that did well on the survey and those that did poorly. Researchers found that large companies defined as having 10,000 to 50,000 employees do not only manage their existing employees more efficiently, but they are better equipped to plan ahead for the number of people and types of skills they will need to bring into their organization in the future. "Smaller competitors who haven't done this work really scramble in a lot of cases when it comes to filling holes in their workforce," says Schweyer. Large companies outperformed the total sample by 4 percent in linking workforce-management strategy to business strategy, and by 7 percent in having metrics that provide input into strategic workforce planning decisions. Yet small companies do have the advantage of being nimble and able to manage their workforce on an intimate, informal level. Organizations with fewer than 1,000 employees were 4 percent better than the total sample at collaboration and sharing knowledge, 6 percent better at promoting virtual working, and 4 percent better at identifying relevant skills. Surprisingly, medium-size companies between 1,000 and 10,000 employees were less likely to have implemented five out of the six talent management practices in the study. At that size, says IBM associate partner Eric Lesser, "you're too small to do it by yourself but perhaps haven't built the infrastructure or managerial focus" that larger companies have. Lesser and the other authors of the report termed these companies "organizational adolescents" that have growing pains because they are unable both to diagnose issues and keep a long-term perspective. Major differences between industries also emerged in the report: Knowledge-intensive businesses tended to focus on development and collaboration, while service-intensive ones emphasized employee attraction and retention. All nonprofit industries studied government, education, and
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health care lagged behind the private sector in virtually all areas of talent management. The best way to invest in talent management depends greatly on the size and industry of a company. And there is no easy fix for the human resources woes that are becoming more common in all business. But for those looking to link talent to profits, there were two competencies that a majority of the best-performing companies had in common: understanding and addressing workforce attitudes and engagement levels; and aligning employee incentives with appropriate business goals. Source : BusinessWeek; Thursday, August 14, 2008

1.9 Terminal Questions


1. What is Human Resources Management? What is its importance in the Modern world? 2. Bring out with examples the interaction between Economic and Noneconomic factors in Human Resources Management. 3. Enumerate the growth of Human Resources Management in India and its impact on India's ethos. 4. Explain the factors responsible for growth of Human Relations. 5. Distinguish between Personnel Management & Human Resources Management.

1.10 Answers
Answers to Self Assessment Questions 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. False False False True False Jucius, psychological, Emotions and impulses, Human and social, Ethics
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11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21.

Satisfaction and performance, Social system, climate, leadership style, Social and cultural forces, Sensitive to their attitudes, changing their attitudes Human Relations Management, people-people relationships, Interaction Employee Job roles and responsibilities Inexperienced employees Performance management systems

Answers to Terminal Questions: 1. 2. 3. 4. 5. Refer to 1.3 Refer to 1.4 Refer to 1.5 Refer to 1.5 Refer to 1.6

References 1. Human Resources Management by Fisher, Schoenfeldt and Shaw 2. Managing Human Resources Productivity, Quality of Work Life, Profits by Wayne F. Cascio 3. International Human Resources Management : Text and Cases by K Aswathappa and Sadhna Dash 4. Human Resources Management by K Aswathappa

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