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Human Resource Management
Shah M Saad HusainB Engg, MS Engg, PE, MBA, FICS, FIMM
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Shah M Saad HusainBEngg, MS Engg, MBA, FICS, FIMM, PE
35 years management experience withmultinational, private sector and governmentcompanies in engineering, petroleum, energyand mineral sectors.
in General Management, Marketing, HR, Project
Management, Engineering Operations,Business Development, External Affairs,Corporate Planning, CSR and Customer Relations.
with PIDC, Habib Group, British Petroleum, BHPBilliton, Toyota Indus Motor, Pak-Arab Refinery.
26 years teaching experience at IBA, CBM,PIQC, PIM, NIPA, LUMS. Subjects: IndustrialMarketing, Customer Ascendancy, B to BMarketing, Marketing Management, StrategicManagement, HRM, Performance &Compensation Management, ProjectManagement, Japanese Management, CSR.
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Human Resource Management
The Strategic Role of HRM
Job Analysis and Job Design
Staffing
Employee Development
Compensation
Employee Relations
Course Contents
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Course Objectives
Knowledge of HRM Theory Concepts Processes and
Practices
Identifying Sources of Information and using them
Class Interaction learning from the Marketplace
Practical Application of course developing HRM
Strategies for Organizations
Performance Assessment: Students Teacher
Human Resource Management
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Course Requirements
Readings from selected texts, journals
Theory, Concepts discussed in Class
Student Projects and Reports
Guest Speakers, Real Life Cases
Examinations
Presentations and Class Evaluations
Class Participation, Quizzes, Home Assignments
Human Resource Management
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Bring Course File to each class
Read reading materials before class
Write notes as slides are explained and discussed
Keep track of Course Calendar, Class Timings,
Grades, etc., on E-group and with CR
Maintain contact with CR and SSH
Meet Attendance and Punctuality requirements
Discipline is key. Adhere to Class Rules.
Instructions for Students
Strategic Human Resource Management
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Human Resource Management - Grading
Midterms ( 2 x 20 ) = 40
Final = 30
Project Report, Presentation = 20
Home Assignments, Quizzes = 10
All Quizzes are open book
For an overall A grade in the course: A in Final
A in Project Report
Active Class Participation
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Human Resource Management by Shah M Saad Husain
I. Luis R. Gomez – Mejia, David B. Balkin,
Robert L. Cardy (2008) : Prentice Hall
“Managing Human Resources”
II. Lloyd L. Byars, Leslie W. Rue (1997) : Irwin
McGraw-Hill
“Human Resource Management”
III. Wayne F. Cascio (2005), Tata McGraw-Hill
“Managing Human Resources”
Human Resource Management - Readings
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Performance & Compensation Management by Shah M Saad Husain 9
Introduction to HRM
Human Resources Strategy in a firm is a
firm’s deliberate and planned use of human
resources to help it gain a competitive
advantage.
The HRM strategy of a firm is its grand plan
to ensure that it effectively uses its people toaccomplish its mission.
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JOB
(Scope & Depth)
EMPLOYER
Growth in• Goods & Services
• Customer Satisfaction
• Revenue Generation
• Profits
• Return on Equity (ROE)
• Expansion of Business
• Corporate Reputation
Employer Objectives
Growth in• Family & Self
• Profession
• Career
• Security
• Social Status
Employee Objectives
ServicesWork
Employee – Employer
Relationship
• Employer/Organizational Objectives
• Organizational Structure
• Job Identification, Analysis & Design
• Job Specification (Before Joining)•
• Job Description (After Joining)
• Tasks, Activities, Responsibilities, Accountabilities
• Power (Financial/Administrative)•
• Reporting Structure
• Manpower Planning, Recruitment, Induction
• Training & Development
EMPLOYEE
Performance
ManagementCompensation &
Rewards
• Salary
• Benefits
• Facilities and Perks
• Allowances
• Professional, Career, Societal
Recognition
• Internal + External (Mkt) Equity
• Performance Evaluation
• Increments
• Bonus
• Incentives
• Career Development
• Ultimate Potential
HUMAN RESOURCE MANAGEMENT
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HRM and the 21st Century
Due to Internet technologies, organizations are undergoing a completetransformation. The 21st century organization must adapt itself to managementvia the web.
Intellectual capital will be critical to success. Advantage of bringing newtechnologies to the market will be shorter. Technologies will let competitorsmatch them almost immediately.
In such times, it will be critical to attract and retain the best thinkers.
Retaining and attracting the top talent will require more than just paychecks. Itwill require a culture of empowering people, and a reward system that rewardsthe best as if they were the owners of the company.
Intellectual capital will be called on from around the globe. A global corporationmight be based in the US but does its software programming in Sri Lanka,engineering in Germany, its manufacturing in China, and is linked via theInternet to allow employees to interact and work in real time.
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HRM and the 21st Century Corporation
20th Century Corporation 21st Century Corporation
Predicated itself on stability Predicated itself on constant change
Organized around rigid hierarchies Organized around networks and teams
Built on self-sufficiency Built on shifting partnerships and
alliances
Organizational chart defined as a
shrinking pyramid leading to the CEO
Organizational chart more likely to be a
flat web, intricately woven that links
partners, employees, external
contractors, suppliers, and customers
in various collaborations
Constructed on bricks and mortar Constructed on knowledge andtechnological advantages.
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HRM practices make an important practical
difference in three key organizational
outcomes.
1. Productivity
2. Quality of Work Life
3. Profit : Total Revenue minus the Total Cost
4. Role of HR Professionals Today
Outcomes of HRM Practices
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A measure of the output of goods and
services relative to the input of labor, capital,
and equipment.Higher productivity
Leads to higher wages without boosting inflation.
Is not working harder, it is working smarter.
Is about doing more with fewer people, less money, lesstime and space, and fewer resources.
Outcomes of HRM Practices:
1. Productivity
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MORE PRODUCTIVE ORGANIZATIONS GET MORE GOODS AND
SERVICES FROM A GIVEN AMOUNT OF LABOR, CAPITAL, EQUIPMENT.
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Rebuild employee loyalty.
Establish a clear link between rewards andproduction.
Say no to ‘Quick Fix’ approach.
Emphasize on Continuous Improvement.
Outcomes of HRM Practices:
1. Productivity Improvement
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Two ways of looking at Quality of Work Life
(QWL)
• Organizational Conditions and Practices such aspromotion from within, democratic supervision, participative
management, employee involvement, safe working
conditions, mutual trust, team work.
• Employees’ Perceptions that they are respected, relativelywell satisfied, and able to grow and develop as human beings
and professionals.
Outcomes of HRM Practices:
2. Quality of Work Life
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Management Systems that produce prof i ts through p eople share thefollowing dimensions:
1. Employment Security.
2. Selective Hiring.
3. Self-managed teams and decentralization.
4. High Compensation contingent on organizational performance.
5. Extensive Training, Development and Professional grooming.
6. Reduced differences in status. Respect for competence and
performance.
7. Sharing of information, effective communication systems.
8. Employee Care and Satisfaction.
9. Trust.
Outcomes of HRM Practices:
3. Profit
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HRM and Corporate Strategic Goals
Human Resource Management is essential toadvance a firm’s strategic goals.
HR
PRACTICES
HR
STRATEGY
HR
TACTICS
HR
PLANS HR
POLICIES,SYSTEMS,
SOPs
CORPORATE
STRATEGY
CORPORATE
STRATEGIC
GOALS
Linking Corporate Strategic Goals
with
HRM
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The Benefits of HR Planning
1. Encouragement of proactive rather than reactive behavior
2. Explicit communication of Company Goals
3. Stimulation of critical thinking and ongoing examination ofassumptions
4. Identification of gaps between Current Situation and FutureVision
5. Encouragement of Line Manager’s Participation
6. Identification of HR constraints and opportunities
7. Teamwork and creation of common bonds
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HR’s Strategic Role
Successful firms align their HR strategiesand tactics with:
1. Environmental Opportunities and Threats.
2. Business Strategies.
3. Organizational Unique Characteristics.
4. Organization’s Competence.
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Selecting HR Strategies to Increase Firm’s Performances
HR Strategy’s effect on a firm’s performance
depends on how well it ‘fits’ with other factors
Fit refers to the consistency and compatibility
between HR strategies and other important
aspects of the organization
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Fit with Organization Strategies
Corporate Strategy is referred to as the mix
of businesses a corporation decides to hold
and the flow of resources among those
businesses. e.g., PARCO
Business Unit Strategies are those that are
formulated and implemented by a firm that isrelatively autonomous, even if it is part of a
larger corporation. eg. PAPCO
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Effective HR Strategy Formulation and Implementation
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Selected HR Strategies That Fit Miles and Snow’s Two Major Types of
Business Strategies
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Selected HR Strategies for Firms Low and High on Different
Environmental Characteristics
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Fit with Organizational Characteristics
1. The production process for converting inputs into
outputs
Routine production process benefits from HR strategies thatemphasize control
example: Specific job description and job specific trainings
Firms with non-routine production processes such asadvertising firms, custom printers, and biotechnologycompanies, benefit from flexible HR strategies that supportorganizational adaptability, quick response to change andcreative decision making
example: Broad job classes, loose work planning, and generic training
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Fit with Organizational Characteristics
2. The Firm’s Market Posture
Firms that experience high sales growth and engage in product
innovation for a wide market segment benefit from HR
Strategies that support growth and entrepreneurial activities
example: External recruitment or buying skills, decentralized pay
decisions, customized appraisal
Firms with low rates of sales growth and limited product
innovation for a narrow market segment benefit from HR
strategies that emphasize efficiency, control, and firm specific
knowledge
example: Internal recruitment or ‘making skills’. On-the-job training,
and high dependence on superiors
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Fit with Organizational Characteristics
3. The firm’s overall managerial philosophy
Companies whose top executives are risk-averse and operate
with an autocratic leadership style, and are inwardly focused
use HR strategies that match this outlook
example: Seniority based pay, formal hiring and socializing of new employees,
selection decisions made by the HR department and use of top-downcommunication channels.
Management characterized by high risk taking, participation,
egalitarianism, and external, proactive environmental orientation
use HR strategies that fits this outlookexample: include variable pay, giving supervisors a major role in hiring
decisions, up-and-down communication channels, and multiple inputs for
performance appraisals
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Fit with Organizational Characteristics
4. The firm’s organizational structure
Highly formal organizations that are divided into functional
areas like marketing, finance, production, etc, and
concentrate decision making on top: HR strategies for
such organizations include a control emphasis,centralized pay decisions, explicit job descriptions, and
job-based pay.
Firms whose structures are less regimented benefit from
HR strategies that include informal hiring and socializingof new employees, decentralized pay decisions, broad job
classes and individual-based pay.
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Fit with Organizational Characteristics
5. The firm’s organizational culture
Companies that foster an entrepreneurial climate have loose workplanning, informal hiring and socializing of new employees andvariable pay.
Firms that discourage entrepreneurship generally prefer a control
emphasis, detailed work planning, formal hiring and socializing of new employees, and fixed pay.
Firms with emphasis on moral commitment- the extent to which afirm tries to foster a long-term emotional attachment between thefirm and the employees have emphasis on preventive vs. remedial
disciplinary action to handle employee mistakes, and explicit ethicalcodes to monitor and guide behavior.
Firms that are low on moral commitment rely on authoritarianrelationship between employee and company.
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Fit with Organizational Capabilities
Distinctive competencies of a firm are its
capabilities such as technology,management systems, reputation, etc, thatgive it a Competitive Edge
HR strategies should enhance a firm’sperformance by:
1. helping the company exploit its specific advantages or strengths
while avoiding weaknesses
2. assisting the firm in better utilizing its unique blend of humanresource skills and assets
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Choosing consistent and appropriate HR tactics to implement
HR strategies
The best-laid HR strategies may fail when specific HR programs arepoorly chosen or implemented
In addition to fitting with each of the four organizationalcharacteristics; organizational strategy, environment, organizationalcapabilities and characteristics, a firm’s HR strategies should be
mutually consistent
HR strategies are likely to be successful if they reinforce oneanother rather than work at cross-purposes.
example: Working in teams, but traditional individual basedperformance appraisals
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Choosing Consistent and Appropriate HR Tactics to Implement
HR Strategies
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Competencies Required of HR Department to Become a Full Strategic Partner
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PARCO`s Growth and HR Strategy
• Projects
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• Projects• Engineering
PARCO s Growth and HR Strategy
Personnel
Payroll
Benefits
Leave
Recruitment
Industrial Relations
1981 2008 2012 2014
Single Product Multi Product Multi Business
• Projects
• Engineering
• Operations
• Managerial
• Marketing
• Business Diversification
• Projects• Engineering
• Operations
• Managerial
• Marketing
Talent
Management
Sourcing & Recruitment
Performance
Management
Learning & Development
Succession Planning
Leadership Development
Compensation
Work Life Balance
HR Management• Linking HR & Corporate Goals
• Performance Management
• Training and Development
• Job Evaluation
• Rightsizing
• Salary Restructuring
• Employee Surveys
• HR Processes
• SAP & HR Data Management
• Talent Inventory