MIGRATION FROM HRM TO SHRM: EVOLUTION OF SHRM

Personnel Mgmt Part of mechanistic org Bureaucratic High centralization High formalization Low flexibility

HRM (early 1970s) Part of organic org Cross-hierarchical n cross-functional teams Decentralization Low formalization Flexible

SHRM (early 1980s) Convergence bet HRM n B strategy Proactive HRM Concerned with org effectiveness n performance

MIGRATION FROM HRM TO SHRM: COMPARISON N CONTRAST

Traditional HRM Responsibility for HR programmes Focus of activities Staff personnel in the HR dept Employee relations-ensuring employee motivation n productivity, compliance with laws Reactive n transactional Slow, piecemeal n fragmented not integrated with larger issues Short-term Bureaucratic ctrl thru rules, procedures n policies SHRM Line mgrs; all mgrs responsible for people r HR mgrs Partnerships with int (employees) n ext (customers, stakeholders, pub interest gps) gps Proactive n transformational, change leader Fast, flexible, n systemic, change initiatives implemented in concert with other HR systems Consider various time frames as necessary (short/ medium/ long) Organic ctrl thru flexibility, as few restrictions on employee behaviour

Role of HR Initiative for change Time horizon Control

Job design
Imp investments A/cability

Focus on Sc Mgmt princi-div of labor, independence, n specialization

Capital, products, tech n fin Cost centre

Broad job design, flexibility, teams n gps n cross trng

People n their ASK Investment centre

Adapted from: Mello 2003

DIFFERENCE BETWEEN SHRM & HR STRATEGIES

SHRM H R S T R AT E G I E S

A gnrl approach to strategic mgmt Aligned with org intention about its future direction Focus on long term people issue

Outcome (manifestation)of the gnrl SHRM approach Focus on specific org intentions about what needs 2 b done

Defines the areas in which specific HR strategies need 2 b developed

Focus on culture etc macro concerns-str,

Focus on specific issues that facilitate the achievement of corporate strategy

HR strategy decisions r derived from SHRM

Strategic HR decisions r built into the strategic B plan

Adapted from: Armstrong 2000

PRESENT STATUS AS A RESPONSE TO THE ENVIRONMENTAL CHANGES STRATEGIC HR

Inherent part of mgmt Pervasive function Basic to all functional areas People centered Personnel activities/functions Continuous process Based on Human Relations

ROLES OF SHRM: THE VARIOUS THEORETICAL PERSPECTIVES

SHRM

Fit perspective: HRs should b integrated with the strategic plng process of the firm

Functional : an org performs best whn each dept.al unit maximises its contri ltd 2 its unique area of expertise

Economic: HRs r a unique n distinguishable source of competitive advantage

Typological: there r 3 distinct types of HR strategiesinducement; investment; involvement

By Swiercz (2002)

TYPOLOGICAL PERSPECTIVE
Inducement strategy: For highly competitive B env w.r.t. price/qty. decision making highly centralized. HR strategies focus on cost, expecting high performance in a minimally staffed org Investment strategy: based on differentiation like qlty, features, service rather than price. Ceativity rewarded Involvement strategy: based on innovation n flexibility whn faced with highly competitive price/qlty, decentralized

THE 4 MEANINGS OF SHRM

1. The use of plng in HRM

2. An approach to the design and implementation of HR systems

3. Matching HRM policies and activities with the B strategy of the organization 4. Viewing people as a strategic resource for the achievement of competitive advantage ..Hendry & Pettigrew (1986) Fombrun, Tichy, and Devana were the first to formulate the concept of strategic HRM in 1984

OBJECTIVES OF SHRM
To ensure the availability of a skilled, committed and highly motivated workforce in the organization to achieve sustained competitive advantage To provide direction to the organization so that both the B needs of the org n the individual n collective needs of its workforce r met. This is achieved by developing n implementing HR practices that r strategically aligned.

ECONOMICS OF HRM

From being viewed as a staff function n a cost centre, the HRM function has evolved to being viewed as a line function n a profit centre Cost Benefit Analysis Employee value: employee evaluation Human capital accounting

HRA/CG
(SOURCE: PERSONNEL MGMT BY C B MAMORIA)

A process of identifying n measuring data about HRs n communicating to the interested parties. a/cg for people as an org.al resource. It involves measuring the costs incurred by an org to recruit, select, hire, train n develop human assets n also involves measuring the eco value of people in the org. it is concerned with measurement of cost n value of people in the org .Prof. Flamoltz Basic theories underlying HRA People r valuable resources of an org. Info on investment n value of HR is useful for decision making in the org.

Objections against the treatment of people as Assets:

HR is not owned by the employer No assurance of future benefit as it generally accrues after 1 or more a/cg periods

HRA

HR Cost a/cg

HR value a/cg

Personnel cost a/cg

Human asset a/cg

Assessment n rcrdg the value contri of the HR 2 d production n process

Acquisition cost

Sacrifice incurred to acquire or replace people

Development cost

VARIOUS METHODS OF MEASUREMENT OF COSTS N VALUATION OF HRS

HRs comprise of all those energies, skills, talents and knowledge of people, which are applied or can be applied for the production of goods n rendering of services. As such investment in HRs refers to all forms of investment directed to raise knowledge, skills n aptitudes of the workforce of the org. Economic value of HR over time as it gains exp. Assumptions: 1.Employees will continue in service till their retirement (Lev n Schwatz model) or 2.Probability of expected stay with the org at dif stages of services of each employee (Eric Flamholtz model) or 3.Group as the basis of calculation based on historical data w.r.t. t/o pattern (Jaggi-Laus model). Historical Cost Method (CM)-cost incurred on R & S, T & D etc=acquisition cost.

Replacement CM-cost 2 replace the existing HR (w.r.t. qty n qlty).

Opportunity CM-most profitable alternative use foregone/ competitive bidding process bet 2 depts within an org. Std CM-std cost of R &S, T & D per grade employee dev, established n updtd every yr. Current Purchase Power method-historical cost of investment in HRs converted 2 current purchasing power of money. Eco value method-Present Value of a portion of firms future earnings attributable 2 HRs

Under the constraints of the Co. law in India there is no scope for showing any significant info about HRs in the fin st except remuneration paid to them. The concept of HRA is yet to gain popularity in India even though it benefits in decision making for multiple purposes.

HR AUDIT: WHAT HAPPENED? WHY DID IT OR DID NOT HAPPEN?

(SOURCE: HRM BY ASWATHAPPA)

A process of evaluating the effectiveness of the entire HR function w.r.t. policies, principles, practices, procedures n systems. Gnrly done annually.
Elements Independence from the subject being audited Tech work like systematic gathering n analysis of data Evaluation of HR activities, policies n sys based on evidence Clrly defined object of the process Action in response 2 audit findings Benefits Provides verifiable data on HRM function Clarifies HR functions n duties n responsibilities Identifies critical HR problems Helps align HR strategy with organizational strategy Improves contri, status and image of HR functions n dept, reduces HR costs Helps review n improve HRIS

PROCESS OF HR AUDIT

Scope HR functions Mgrl compliance Employee satisfaction Corporate strategy

Approaches Comparison Outside authority Statistical Compliance MBO

HR Research w.r.t. any area

Evaluation report Cln (per sat)or qualified (gaps)

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