1 HUMAN RESOURCE MANAGEMENT HRM Introduction 2 Organization

1 HUMAN RESOURCE MANAGEMENT (HRM)

Introduction 2 Organization is a group of people established either formally or informally for the attainment of certain objectives. So, people are the foundation of any organization. In societal context, organization need people and people need organization. It is people who staff, lead and control organizations. Persons involved in an organization are referred as human resource. Simply, the overall management of such personnel in an organization is called human resource management (HRM).

Who are Human Resource? 3 In organizational context, the personnel involved in different activities of an organization are the human resources of that organization. Such type of personnel (referred as human resources) have one thing common i. e. fulfillment of their assigned duties & responsibilities in order to achieve the organizational goal and objectives. People become human resource when they involved in any organization with physical strength, energy and competencies. Competencies consists of knowledge, skill, attitudes and potential for growth. Human resources are effectively mobilized by the organization for the achievement of desired results.

Human Resource Management 4 An essential function of management; and also an important part of every manager’s job. HRM is concerned with managing people in organizations. It is concerned with philosophy, principles, policies and practices related to human aspect of management. It aims at achieving organizational objectives through the efficient and effective mobilization of human resources.

Contd… 5 According to Donnelly and Gibson, HRM is the process of accomplishing organizational objectives by acquiring, retaining, terminating, developing and properly using the human resources in an organization. According to Gary Dessler, HRM refers to the policies and practices involved in carrying out the people or human resource aspects of a management position, including recruiting, screening, training, rewarding and appraising.

6 Human Resource Management (HRM) is a process concerned with the management of personnel along with their energies and competencies for the achievement of organization objectives by the process of acquiring, developing and utilizing such personnel.

Evolution of HRM 7 A number of academics and practitioners in the past have contributed a great deal to the development of HRM. The history of its development goes back to the early management pioneers, Robert Owen (1771 – 1858) and Charles Babbage (1792 – 1871). Similarly, other developments such as the industrial revolution, the principles of scientific management, the classical organization theory and more recently, the behavioral science movement and the organization development movement have influenced the development of personnel management and HRM.

Contd… 8 The trend of the development of HRM in the past can be explained through following periods. Early Scientific Management Scientific Human The Management Relations Movement New HRM Era

Early Scientific Management 9 The history can be traced back to the Origin of Personnel Management. In the beginning of 18 th century, many masons, carpenters, leather workers and people of other crafts organized themselves into guilds. In the later part of 18 th century, the Welfare Concept was developed by some prominent family business houses in the UK. Industrial Revolution started from the late 18 th century. Labor was treated as commodity to be bought or sold. There was strict system of punctuality and rigorous working rules.

Scientific Management 10 F. W. Taylor invented principles of scientific management in the 19 th century. He suggested to plan work and gave methods to maximize productivity and minimize inefficiencies. In his studies, he explained less about humanization of workplaces and focused more on output from the workers.

Human Relations Movement 11 Elton Mayo and Fritz Roethlisberger investigated the causes of low productivity different from Taylor’s perspective. The Hawthorne studies (1927 – 1932) laid the foundation for the human relations movement and explain why human elements are important to rise productivity.

The HRM Era 12 It was by 1920 s, personnel management began to taught at university level in US. At the period of 1920 s, a number of large companies established personnel departments. During 1930 – 1950, many instances of exploitation of labor appeared. Subsequently, a labor relations movement in the form of Labour Unions and collective bargaining emerged and remained successful during 1935 – 1960. Personnel department started to work in collaboration with union representatives.

Contd… 13 The HRM era, began in 1950 s, comprises the work of pioneers, human capital concept, concept the of corporate culture and new HRM.

14 The Work of Pioneers Peter F. Drucker is the main inventor of HRM concept. He had suggested how an effective management contributes to direct all managers towards a common goal. Douglas Mc. Gregor emphasized the strategic importance of personal policies and their integration with business objectives.

15 Human Capital Concept T. Schulz invented human capital theory and cited example of how qualified and committed human resources contributed in the post war economy of Germanny and Japan.

16 Concept of Corporate Culture The book “The art of Japanese Management” by R. Pascale and A. Athos in 1981 stated that shared values of management and workers are the secret of Japanese Management. The book “In search of excellence” written by T. J. Peters and R. Waterman in 1982 named 43 successful companies in the U. S. that were driven by the managers’ values and achieved productivity by paying close attention to the needs of their people.

17 The New HRM Traditional American personnel management and industrial relation systems were challenged by the process of globalization, rapid technological advances, shorter product lifecycles and changing customers and investors demands. Many US industries were facing the underutilization and unemployment of human resources. The reasons for such problems were: adverse unionmanagement relations, low employee motivation & trust in management, hierarchical management, restrictive work practices and, finally, resistance of

18 Promoted by this challenges, American business has begun to place greater emphasis on the management of human resources to improve productivity and quality and thus to be competitive internally and externally. In academic literature, at least, the terms ‘personnel management’ and ‘personnel administration’ have been virtually replaced by the term ‘HRM’. In UK, the concept of HRM arrived around 1985 – 86, when the British industry was suffering from restructuring effects due to recession & loss of competitiveness. Anti-union legislation of the Thatcher government encouraged firms to introduce new labor practices and re-order their collective bargaining arrangements.

Nature of HRM 19 Human Focus People concern, develops & utilize human potential, regard people as an important asset of organization Management Function Applies mgmt principles & functions, perform by all level of managers Dynamic Affected by changes in envn (political-legal, economic, socio-cultural & technological) Mutually oriented Mutuality between employer and employees. Continuous-ongoing activity

Components of HRM 20 Human Resource Planning Recruitment & Selection Performance Management Training and Development Employee – Management Relation Management Information System

HRM Process 21 The process of HRM involves attracting, developing and maintaining a talented and energetic workforce. The basic goal of HRM is to build organizational performance capacity by raising human capital, to ensure that highly capable and enthusiastic people are always available. The 3 major responsibilities of HRM are A. Attracting a quality workforce B. Developing a quality workforce C. Maintaining a quality workforce

Contd… 22 Attracting a quality workforce Involves human resource planning, employee recruitment and selection. Developing a quality workforce Involves employee orientation, training & development and performance appraisal Maintaining a quality workforce Involves career development, work life balance, compensation and benefits, retention and turnover, and labor-management relations.

Attracting a quality workforce 23 Human Resource Planning Recruitment Selection.

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Developing a quality workforce 25 Induction/orientation Training and Development Performance Appraisal

Maintaining a quality workforce 26 Career Development Work-life Balance Compensation and Benefits Retention and turnover Labor-management Relations

Elements & Model of HRM 27 Means Acquisition Development Focus People as Human Resources Ends Organizational Objectives Productivity Utilization Profits Maintenance Readiness to change Employee commitment Quality of work life

Functions of HRM 28 Human Resource Planning Acquisition of Human Resources Utilization of Human Resources Development of Human Resources Maintenance of Human Resources Control of Human Resources Harmonious Employer-Employee Relationship Attainment of organizational objectives

System Model of HRM 29 Input • Human energy & competencies • Organizational Plan • HR Inventory • Job Analysis Process • Acquisition • Development • Utilization • Maintenance Feedback Output Organizational • Goals achievement • Quality of work life • Productivity • Readiness for change Personal • Commitment • Competence • Congruence

Challenges to HRM 30 Globalization Technological Advances Nature of work Size & composition of the workforce. Rising employees' expectations Life-style changes Less attached/temporary employees New HRM concerns Learning organizations Impact of new economic policy. Political ideology of the Government.

Trends and Issues of HRM 31 Issues of HRM in Nepal Corporate Planning and Objectives Human Resource Planning Recruitment, Selection and Placement Employee training and development Performance Evaluation Salary and other benefits Job Design Employee Relations

Barriers to Development of HRM in Nepal 32 HRM in Nepal is mainly concerned with utilizing human energies. It is least concerned with developing human competencies and potential for growth of employees. Its focus is on achieving organizational goals without much regard to personal goals of employees. HRM has not assumed a strategic role in Nepalese management. People are not considered as a source of competitive advantage and important assets.

Contd… 33 HRM is not given a strategic role. It lacks clear cut vision, mission and goals. The attitudes of top management are not favorable towards HRM. Human resources are viewed as a cost rather than assets by management. HRM is considered as a firefighting job to deal with labor grievance and indiscipline. Line managers do not feel ownership for HRM. Lack of mutual trust between labor and management. Multiplicity of unions, union challenges, politicialization of unions and negative attitude of management towards labor unions.

Contd… 34 HR aspects are not considered in policy and plan formulation. Human resource development has remained an area of low priority. This has retarded professionalism in HRM. Performance based HRM practices are lacking. Legal framework has remained weak and largely welfare oriented. HRM is short range oriented. It is least concerned with future potential development of employees.