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Human Resource Management

JSS INSTITUTE OF BANKING FINANCE & INSURANCE

NOIDA

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• “The greatest tragedy in America is not the destruction of our natural resources, though that tragedy is great. The truly great tragedy is the destruction of our human resources by our failure to fully utilize our abilities, which means that most men and women go to their graves with their music still in them.” - Oliver Wendell Holmes.

• “The human mind is our fundamental resource.” - John F. Kennedy

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Human Resource Management

• Is the term used to describe formal systems devised for the management of people within an organization.

• The responsibilities of a human resource manager fall into three major areas: staffing, employee compensation and benefits, and defining/designing work.

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HRM DEFINED

• Edwin Flippo defines- HRM as “planning, organizing, directing, controlling of procurement, development, compensation, integration , maintenance and separation of human resources to the end that individual, organizational and social objectives are achieved.”

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• The National Institute of Personal Management (NIPM) of India has defined human resources – personal management as “that part of management which is concerned with people at work and with their relationship within an enterprise. Its aim is to bring together and develop into an effective organization of the men and women who make up enterprise and having regard for the well – being of the individuals and of working groups, to enable them to make their best contribution to its success”.

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OBJECTIVES OF HRM

• Societal objective. To be socially responsible to the needs and challenges of society while minimizing the negative impact of such demands upon the organization. The failure of organizations to use their resources for society's benefit may result in restrictions. For example, societies may pass laws that limit human resource decisions.

• Organizational objective. To recognize that HRM exists to contribute to organizational effectiveness. HRM is not an end in itself; it is only a means to assist the organization with its primary objectives. Simply stated, the department exists to serve the rest of the organization.

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• Functional objective :-To maintain the department's contribution at a level appropriate to the organisation's needs. Resources are wasted when HRM is more or less sophisticated than the organisation demands. A department's level of service must be appropriate for the organisation it serves.

• Personal objective:- To assist employees in achieving their personal goals, at least insofar as these goals enhance the individual's contribution to the organisation. Personal objectives of employees must be met if workers are to be maintained, retained and motivated. Otherwise, employee performance and satisfaction may decline, and employees may leave the organisation.

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Nature of Human Resource Management

• Human Resource Management involves management functions like planning, organizing, directing and controlling

• It involves procurement, development, maintenance of human resource

• It helps to achieve individual, organizational and social objectives• Human Resource Management is a multidisciplinary subject. It

includes the study of management, psychology, communication, economics and sociology.

• It involves team spirit and team work.• It is a continuous process.

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HUMAN RESOURCE MANAGEMENT

• Human resource management (HRM) is the umbrella under which all other human resource activities are found. Some of the major activities under the umbrella are: benefits and compensation, health safety and security, human resource planning, staffing, equal employment opportunity, and human resource development (HRD)

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Similarities Between HRM and HRD

• Human resource development (HRD) is similar to HRM in that it too is directly related to employee performance and, therefore, organization profitability. Werner and DeSimone describe the activities of HRD as activities that are intended to ensure that employees have the skills and competencies the organization needs to fulfill its goals and objectives in the present and the future. Like HRM, the HRD function is a strategic function that requires specialists to be knowledgeable of the strategic plans of the organization, having the ability to work in concert with line managers, while functioning throughout an organization in a stand-alone capacity, or as a major function in a human resources department

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Differences between HRM and HRD

• While the overall roles of the HRD specialist are complex and strategic like that of human resource managers, many of their functions are more specialized and narrow.

• According to Werner and DeSimone, the HRD professional works with strategic decision-makers to coordinate educational planning and training programs; they work with HR management in the design, development, and implementation of HR programs and intervention strategies. They design and implement change strategies, and advise management on the efficient use of human resources.

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• As a learner program specialist, they identify, design, and develop learning programs, as well as selecting the appropriate learning materials. They also function as learning instructors. They counsel employees regarding competencies and career goals, and coach line managers on interventions to improve individual and group performance. Research is the tool they use to statistically determine the effectiveness of HRD practices and programs

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The HRD Four-Step Process

• The complexity of the HRD role necessitates a systems approach to training and interventions.

• Werner and DeSimone describe a four-point process framework they call “A DImE,” that they believe should be followed when planning all HRD interventions. The “A DImE” sequential process is: needs assessment, design, implementation, and evaluation.

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• The framework proposes that all HRD interventions be developed to address a specific need or gap within an organization. The design phase of the intervention involves selecting the specific objective for the program, and developing a lesson plan based upon that specific objective.

• The implementation phase means executing the intervention using the best and most appropriate method. The final phase in the HRD process is evaluation, where the agent measures the effectiveness of the intervention (Werner, DeSimone, 2012).

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Present and future Challenges for the HRD Profession

• The expanded role of the HRD professional has developed and expanded as a result of the new competitive landscape created by the global market and economy.

• Organizational success today requires doing more with less resources, which necessitates maximizing the effectiveness of human capital by developing employee skills, using technology effectively, creating new organizational structures that facilitate decision-making at all levels of the organization, and developing a learning culture that encourages learning and innovative thinking

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• Harris and Short describe a major challenge they call a “maze of complexity and changing contexts” in organizations today. They state, “The value of workplace education and training has become a mantra for business survival” (Harris, Short, 2010, 358-359).

• Unfortunately, according to Harris and Short, many HRD programs are considered a lesser important function of HRM, indicating a lack of understanding, most particularly, on the part of upper and middle managers of the importance of true HRD functions. This lack of understanding is portrayed as the greatest challenge to the HRD professional because without commitment from the top, success of HRD programs is unlikely (Short, Harris, 2010) (Rawles, 2013).

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ROLES OF THE HR PROFESSIONAL

All HR professionals should be a technical specialist in one or more technical areas. HR professionals should develop advisor and strategic partner skills in order to become more effective in providing technical guidance and human capital services to their organization. Leaders can be found in any of the roles.

HR professionals can demonstrate leadership skills at every organizational level whether or not they are in a formal leadership roles.

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Conclusion

HRD is a major part of the HRM function that focuses on strategic training and development for the purpose of impacting profitability by increasing productivity and performance.

Effective HRD interventions can be accomplished using a four-phase framework consisting of a needs assessment, program design, implementation, and evaluation.

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Training and development

• It is a subsystem of an organization. It ensures that randomness is reduced and learning or behavioral change takes place in structured format.

• It is a function of human resource management concerned with organizational activity aimed at bettering the performance of individuals and groups in organizational settings. It has been known by several names, including "human resource development", and "learning and development".

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Approaches to training

• Traditional Approach – Most of the organizations before never used to believe in training. They were holding the traditional view that managers are born and not made.

• There were also some views that training is a very costly affair and not worth. Organizations used to believe more in executive pinching. But now the scenario seems to be changing.

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Approaches to training, contd.

• The modern approach of training and development is that Indian Organizations have realized the importance of corporate training. Training is now considered as more of retention tool than a cost. The training system in Indian Industry has been changed to create a smarter workforce and yield the best results

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TRAINING AND DEVELOPMENT OBJECTIVES

• The principal objective of training and development division is to make sure the availability of a skilled and willing workforce to an organization.

• In addition to that, there are four other objectives: Individual, Organizational, Functional, and Societal.

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TRAINING AND DEVELOPMENT OBJECTIVES, contd.

• Individual Objectives – help employees in achieving their personal goals, which in turn, enhances the individual contribution to an organization.

Organizational Objectives – assist the organization with its primary objective by bringing individual effectiveness.

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TRAINING AND DEVELOPMENT OBJECTIVES, contd.

• Functional Objectives – maintain the department’s contribution at a level suitable to the organization’s needs.

Societal Objectives – ensure that an organization is ethically and socially responsible to the needs and challenges of the society.

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CAREER????

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• Career is a sequence of attitudes and behaviours associated with the series of job and work related activities over a person’s lifetime.

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Career, contd.

• Yet in another way, it may be defined as a succession of related jobs, arranged in hierarchical order, through which a person moves in an organization. As the literal definition of career focuses on an individually perceived sequence, to be more accurate, career may be either individual-centred or organizational-centred. Therefore, career is often defined separately as external career and internal career.

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Career, contd.

• External career refers to the objective categories used by society and organizations to describe the progression of steps through a given occupation, while

• Internal career refers to the set of steps or stages which make up the individual’s own concept of career progression within an occupation. For such two different approaches, in organizational context, career can be identified as an integrated pace of vertical lateral movement in an occupation of an individual over his employment span.

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Career management

• Career management is a process by which individuals can guide, direct and influence the course of their careers.

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Career span

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CAREER PLANNING IN AN ORGANIZATION

• Career planning is the process by which one selects career goals and the path to these goals. The major focus of career planning is on assisting the employees achieve a better match between personal goals and the opportunities that are realistically available in the organization. Career programmers should not concentrate only on career growth opportunities. Practically speaking, there may not be enough high level positions to make upward mobility a reality for a large number of employees. Hence, career-planning efforts need to pin-point and highlight those areas that offer psychological success instead of vertical growth.

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• Career planning is not an event or end in itself, but a continuous process of developing

• human resources for achieving optimum results. It must, however, be noted that individual and organizational careers are not separate and distinct. A person who is not able to translate his career plan into action within the organization may probably quit the job, if he has a choice. Organizations, therefore, should help employees in career planning so that both can satisfy each other’s needs.

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MOTIVATION

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Why is Motivation Important?

• Under optimal conditions, effort can often be increased and sustained

• Delegation without constant supervision is always necessary

• Employees can become self-motivated• Motivated employees can provide competitive

advantage by offering suggestions & working to satisfy customers

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MAJOR THEORIES OF MOTIVATION

• I. Need Approaches:• - Maslow’s Hierarchy of Needs• - Alderfer’s ERG Theory• - Herzberg’s Two Factor Theory• - McClelland’s Learned Needs Theory• II. Cognitive Approaches:• - Expectancy Theory• - Equity Theory/ Social Comparison• - Goal Setting Theory

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SELF- ACTUALIZATION(using all of one’s abilities)

ESTEEM (self and from others)

SOCIAL/AFFILIATION

SAFETY/SECURITY

PHYSIOLOGICALMaslow’s Hierarchy of Needs Model

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Alderfer’s ERG Theory

Need Growth Needs NeedProgression Regression

Relatedness Needs

Existence Needs

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Herzberg’s Theory Rests on 2 Assumptions

1.) Being satisfied with one’s job is equivalent to being motivated; “a satisfied worker is a motivated worker”

2.) Job satisfaction and dissatisfaction are separate concepts with unique determinants based on work with accountants and engineers

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Herzberg’s 2-Factor TheoryDeterminants of Job

Dissatisfaction are Hygiene* Factors:

• Pay, fringe benefits• Working conditions• Quality of supervision• Interpersonal relations

Job Environment Factors

* Poor hygiene can make you, sick, but good hygiene won’t necessarily make you healthy

Determinants of Job Satisfaction are Motivator Factors:

• Work itself, responsibility

• Advancement• Recognition

Job Content Factors

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A Comparison of Internal Need Theories of Motivation

Maslow’s Alderfer’s Herzberg’s McClelland’s Hierarchy ERG Two Factor Acquiredof Needs Theory Theory Needs Theory

Self- AchievementActualization Growth Motivator

Esteem Power RelatednessBelonging Affiliation HygieneSecurity ExistencePhysiological

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Expectancy Theory

Involves 3 cognitions/perceptions:

1. Expectancy - the perceived probability that effort will lead to task performance. E link

2. Instrumentality - the perceived probability that performance will lead to rewards. I link

3. Valence - the anticipated value of a particular outcome to an individual.

Effort Performance Rewards or Outcomes

E link I link

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Performance appraisal

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• A performance appraisal (PA), also referred to as a performance review, performance evaluation, (career) development discussion, or employee appraisal is a method by which the job performance of an employee is documented and evaluated.

• Performance appraisals are a part of career development and consist of regular reviews of employee performance within organizations.

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• A performance appraisal is a systematic and periodic process that assesses an individual employee’s job performance and productivity in relation to certain pre-established criteria and organizational objectives.

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• Performance management systems are employed “to manage and align" all of an organization's resources in order to achieve highest possible performance

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• Some applications of PA are compensation, performance improvement, promotions, termination, test validation, and more.

• While there are many potential benefits of PA, there are also some potential drawbacks. For example, PA can help facilitate management-employee communication;

• However, PA may result in legal issues if not executed appropriately, as many employees tend to be unsatisfied with the PA process.

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Other potential benefits include

• Facilitation of communication: communication in organizations is considered an essential function of worker motivation.

• Enhancement of employee focus through promoting trust: behaviors, thoughts, and/or issues may distract employees from their work, and trust issues may be among these distracting factors.

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• Goal setting and desired performance reinforcement: organizations find it efficient to match individual worker’s goals and performance with organizational goals.

• Performance improvement: well constructed PAs can be valuable tools for communication with employees as pertaining to how their job performance stands with organizational expectations.

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• Determination of training needs: Employee training and development are crucial components in helping an organization achieve strategic initiatives.

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When are performance appraisals conducted

• Performance appraisals (PAs) are conducted at least annually, and annual employee performance reviews appear to be the standard in most organizations.

• However they can be conducted biannually or quarterly.

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Methods of performance appraisals

• Self-assessments: for self-assessments, individuals assess and evaluate their own behavior and job performance

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• Peer assessments: members of a group evaluate and appraise the performance of their fellow group members

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• 360-degree feedback: 360-degree feedback is multiple evaluations of employees which often include assessments from superior(s), peers, and one’s self.

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HRM in Banks

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• Human Resource Management is important for banks because banking is a service industry.

• Management of people and management of risk are two key challenges facing banks.

• How you manage the people and how you manage the risks determines your success in the banking business. Efficient risk management may not be possible without efficient and skilled manpower.

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Banking has been and will always be a "People Business".

• In coming times, the very survival of the banks would depend on customer satisfaction. Those who do not meet the customer expectations will find survival difficult. Banks must articulate and emphasize the core values to attract and retain certain customer segments. Values such as "sound", "reliable", "innovative", "international", "close", "socially responsible", "Indian", etc. need to be emphasized through concrete actions on the ground and it would be the bank’s human resource that would deliver this.

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Importance of HR in banks

• It is a common complaint among bank executives that skilled manpower is in short supply.

• No two arguments on this, HR resources are becoming scarce – both in quality and quantity.

• And, it is quite elementary that any resource that is in short supply needs to be properly managed for the benefit of society

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How to Manage Human Resources

• Acquiring the right people• Retaining/ Developing the people• Managing people separation / exit

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Planning• As the economy grows at a steady rate of around 7–8%,

incomes rise and demographic dividends start accruing, the Banking industry is expected to take a quantum leap forward.

• But this growth will need a large number of people and considering that there are retirements in lakhs, a defining moment is being presented before the Nationalized Banks to transform.

• Are the banks ready to handle the new bunch of employees who will be culturally so different from their predecessors of the post nationalization era?

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• It all begins with having a manpower plan. How many banks can claim to have a proper manpower plan that captures the type of people it requires, the level at which they are required, clearly defined roles for everyone, etc.

• Manpower plans should follow a lifecycle approach, that is, from the time of recruitment of an employee to his retirement. Further, this needs to be integrated with the Business Plan and strategy of the bank.

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Acquiring the right people

• How do we get to acquiring people with the right kind of talent? Unfortunately, it is the same limited talent pool that will be targeted by Banks, Financial Institutions, Insurance, Telecom and other industries which are on fast growth track and in need of talented manpower.

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• Banks need to seriously look at lateral recruitment as an option to induct specialists at various levels with specific skill sets and experience pool. While we have often heard of people leaving banks to join finance, legal, accounting firms, etc. seldom have we heard of people leaving these professions to join banks.

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Retaining/ Developing the People:

• Training / Re-skilling: The nature of business requires massive re-skilling of the existing workforce and continuous skill up-gradation.

• Khandelwal Committee has recommended major up-gradation of in-house training facilities of banks.

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• Performance Management: This is the most important area of Human Resource Management, the foundation of which is discrimination. Unfortunately, current systems are unable to discriminate and differentiate between performers and non-performers. In fact, it is impossible to identify who are the performers and who are the non-performers.

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• A fair, transparent and objective mechanism for performance management is a must for all banks because an effective Performance Management System is the key to talent management and succession planning.

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Is it the right time?• During the 2010 to 2020 decade, Nationalized Banks are

at the cusp of a unique opportunity – with people retiring in lakhs making it a “retirement decade”, it is the best time to transform the HR processes and implement some new age concepts. This kind of opportunity to transform HR processes is once-in-a-lifetime window which, if properly utilized, could help our banks take giant strides. On the other hand, those who miss the bus would lag behind. The kind of HR changes required are a tremendous challenge and opportunity at the same time.

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FEW QUESTIONS

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• Which is the most important resources according to the author?

• Natural Resource c) Financial reserves

• Human Mind d) Technology

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• Human Resource management includes:• Staffing c)Employee

compensation and benefits• Defining and designing work d) all of them

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• The objectives of Human resource management are:-

a)Societal Objective c) Organizational Objective

b)Functional objective d) Personal objective

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• Societal objective of HRM includes:-a)Social workb) community servicec)Skill development and HRDd) Religious services

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• Human resource management is a multidisciplinary subject. It includes the:-

a)Management c)Philosophyb) Anthropology d) Decision

sciences

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• Human resource development involvesa)Counseling and employee benefitsc) coachingb)Training programmed) All of the above

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DIME follows :-

• Need assessment c) Design• Implementation d)Evaluation

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State True or False

• HRD is the umbrella under which all other human resource activities are found

• DIME is a sequential process• The framework of HRD interventions are need

based• Training was wasteful activity under traditional

approach• Motivation is essential because it affects work

performance.

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