HUMAN RESOURCE MANAGEMENT

Day to day Human Resource Management is very important for the organization to get more powerful and develop its self to be the standard and success one. So, even nowadays economic recession but it’s not very effected to all companies in the world only seriously in the USA and EU. However, they do not cut all staffs but is still remain the professional, main staffs for running the companies.

In early centuries, when Human Resource Management (HRM) was not prevalent, the staffing and payroll of the employees was taken care of, by the Personnel Management (PM). It was popularly known as Traditional Personnel Management. Human Resource Management emerged as an extension over the Traditional Personnel Management.

In order to reach its objectives an organization needs not only qualified staff but also effective and efficient systems as well as access to and effective allocation of financial resources. Institutional development therefore involves not only putting the right person at the right place at the right time, but also that the organization provides a conducive and effective work environment and systems and that the organization has access to adequate financial resources. Many management students and laymen, believe that the two terms are synonymous but, the fact is that the modern HRM has completely replaced PM.

HUMAN RESOURCE MANAGEMENT DEFINED

The term ‘human resource management’ was used by Peter Drucker and others in North America as early as the 1950s without any special meaning, and usually simply as another label for ‘personnel management’ or ‘personnel administration’. By the 1980s, however, HRM had come to mean a ‘radically different philosophy and approach to the management of people at work’ (Storey,1989; pp4–5) with an emphasis on performance, workers’ commitment, and rewards based on individual or team contribution, differing significantly in all of these from the corresponding aspects of traditional personnel management.

Human Resource Management is that specialized and organized branch of management which is concerned with the acquisition, maintenance, development, utilization and coordination of people at work, in such a manner that they will give their best to the enterprise. It refers to a systematic function of planning for human resource needs and demands, selection, training, compensation and performance appraisal, to meet those requirements.

Human Resource Management is a continuous process of ensuring the availability of eligible and willing workforce i.e. putting the right man at the right job. In a nutshell, it is an art of utilizing human resources of an organization, in the most efficient and effective way. HRM covers a broad spectrum of activities which includes:

i.  Staffing objectives: They are firstly concerned with ‘getting the right people in the right jobs at the right times’ – i.e. the recruitment and selection of staff, but increasingly these days also advising on subcontracting and outsourcing of staff. Staffing also concerns managing the release of employees from the organization by, for example, resignation, retirement, dismissal or redundancy.

ii.  Performance objectives: People managers have a part to play in assisting the organisation to motivate its employees and ensure that they perform well.

Training and development, reward and performance management systems are all important here. Grievance and disciplinary procedures are also necessary, as are welfare support and employee involvement initiatives.

iii.  Change management: These objectives include employee relations/involvement, the recruitment and development of people with the necessary leadership and change management skills, and the construction of rewards systems to underpin the change.

iv.  Administration objectives: These include the maintenance of accurate employee data on, for example, recruitment, contracts and conditions of service; performance; attendance and training; ensuring organizational compliance with legal requirements, for example in employment law and employee relations; and health and safety.

An HR Manager ensures that the company is appropriately staffed, which includes job analysis, planning, recruiting and selection. The HR Manager and his fellow resource managers also develop training and education programs to keep employees up-to-date on the skills and knowledge they need. Human resource management develops compensation plans just like personnel management.

EVOLUTION OF HRM AND TRANSITION FROM PERSONNEL MANAGEMENT TO HRM

There are many different perspectives, among HRM scholars when describing the route the HRM movement has taken from the past to the present. However, it can be said that the main discussions lie in the transition from personnel management to HRM. Schuler and Jackson (1999) claim that the evolution of HRM can be divided into two stages only; the first from personnel management to HRM, and the second from HRM to SHRM.

Baird and Meshoulam (1984) identify the development of HRM by characterizing certain HR activities as representing each stage of the development. These five stages allow for various HR practices, depending on the requirements of the organization. The five stages range from basic HR, functional growth, controlled growth, functional integration, through to cross-functional integration.

Another perspective, Torrington (1989) describes that a major shift of direction in the HRM development is moving away from the traditional of personnel management on conciliation, propitiation, and need to motivate employees as a potentially uncooperative cost, to seeing employees as a benefit. The new direction of HRM is that people need less goading and supervision, but should be given more scope and autonomy; people should not be seen as a cost, but as an asset in which to invest to add their inherent value. Torrington (1989) provides six main stages of evolution from the nineteenth century to the present that track this development. The first stage was the social reformer, next was the acolyte of benevolence, then the humane bureaucrat, followed by the consensus negotiator, the organization man, and the manpower analyst.

a.             HRM provides clearer direction for managing people however, Guest (1987) warns this just a generalization: “Implicit in the contrasting stereotype is an assumption that human resource management is “better”. However this fails to take account of variations in context which might limit its effectiveness. For example in public service bureaucracies’ conventional personnel management might more successfully contribute to the achievement of organizational goals”

b.             Legge (1995) suggests the transition from personnel to HRM falls into three criteria:

i.     A shift of focus from human resource processes and procedures to the development of HR and development skills for managers and their teams.

ii.    HRM operates proactively with a focus on developing core business, not merely supporting it, and

iii.  HRM will generate an emphasis on defining and shaping organizational culture.

NEED OF HRM IN AN ORGANIZATION

Why HRM is important for Organization today to make their HR into a competitive advantage. The three competitive challenges are the challenge of sustainability, the global challenge, and the technology challenge.

I.  The Challenge of Sustainability:

There are many different type of companies/organization to operate in the world and also competed each other to gain competitive advantage and also sustainable so they try to implement many strategic for develop their HR. Among them sustainability is the main part that can be influence and encourage to reach organizational goal. Anyway they also take action immediately to introduce, orientate, prepare guideline, provide high quality products and services and especially use the right person in the right position and on job training many time to gain staff capacity. There are many ways that can bring the organizations to reach goal are:

a.  A learning organization:

This embraces a culture of lifelong learning, enabling all employees to continually acquire & share knowledge.

b. The Balanced Scorecard:

The balanced scorecard gives managers an indication of the perspective for company to satisfy internal and external customers, employees and shareholders & it should link HRM activities to the company’s business strategy. This include being customer - focused, improve quality, emphasizing teamwork and managing for long time. Using the balance scorecard to manage the human resources by communicating the scorecard to employee gives them a framework that helps them to see the company goals and strategies and how they influence the critical indicators. For example, Chase Manhattan bank used the balance scorecard to change the behavior of customer services representative would have simply met the customer’s need.

c. Total Quality Management (TQM):

A cooperative form of doing business that relies on the talents and capabilities of labor and management, the ways people, machines, and systems accomplish work to continually improve quality and productivity. For example, quality expert W. Edwards Deming emphasized how well the product or service meets customer needs. To ensure this TQM need to create an environment that support innovative, creativity, and risk taking to meet customer demands.

d. Changing demographics:

The workforce today is getting more diverse & therefore need to be managed carefully.

e. Legal & ethical issues:

It’s increasingly important to comply with laws and ethics concerning employee health and safety, employee pay and benefits and job security.

f. Increased value placed on intangible assets and human capital:

Today, more and more companies are interested in using intangible assets and human capital as way to gain an advantage over competitors. A company’s value includes 3 types of assets that are critical for the company to provide goods and services.

II.  The Global Challenge:

Increasingly, organizations are finding that to survive they must cooperate with organizations around the world. Companies/organizations must both defends their domestic markets from foreign competitor and broaden their scope to encompass global markets. In order to reach the goal of organizations/companies HRM play the important role to run the business and make the good business environment to create smoothly work and also compete with the other to gain competitive advantage by expansion to the global area/broaden, integration of cultures & values, got and received the feedback from the consumers to develop the product and service, training staff many time and encourage getting high competencies.

While many large firms such as Exxon, Ford, and Procter & Gamble are already multinational corporations that span the globe, many medium-sized and small businesses are becoming increasingly international. To succeed in the global marketplace, the challenge for all business is to understand culture and invest in human resources. For example, Boeing brings workers from India and Poland to the Unites States. They return home with needed knowledge in aircraft design and manufacturing.

III.      The technology Challenge:

This challenge is also very important that organizations/companies should be consider and prepare strategic plan to update it on time and saving the cost also. New technology cause change in basic skill requirements and work roles and often results in combining job. For example, U.S. Company to compete with foreign competitors, they have to learn to better utilize employees’ talents and skills and new technology. Like computer integrated manufacturing uses robots and computer to automate the manufacturing process. The computer allows the creation of different product to meet market demands simply by reprogramming the computer. As a result, laborer, material handler, operator assembler, and maintenance job may be merged into one position.

EMPLOYEE RECRUITMENT AND SELECTION

In the normal recruiting and selecting process, human resource managers focus on references, education, experience and other background information in the face to face interview. Nevertheless, they missed the most important thing - observation. Interviewer always cared about the answer, but they never observed interviewee's behavior, such as eye contact, gesture and so on. Hence, management decided to provide interview training courses to human resource associates, which taught some behavioral instruments and validation processes in the interview.

Bohlander, Snell & Sherman (2001) indicate that it is important for managers to understand the objectives, policies and practices used for selection. In that way, they can be highly involved in the process from the very beginning. Those responsible for making selection decisions should have adequate information upon which to base their decisions.

Recruitment is the Process of finding and attracting capable applicants for employment. The Process begins when new recruits are sought and ends when their applications are submitted. The result is a pool of application from which new employees are selected.”

The Recruitment: The recruitment process begins when you know you need someone new in the Department, either because an existing staff member has left, or because there is new work to be done. It doesn’t finish until after the appointment has been made.

The Selection: Selection is the process of picking up individuals (out of the pool of job applicants) with requisite qualifications and competence to fill jobs in the organization. A formal definition of Selection is as under

Definition of Selection: “Selection is the process of differentiating between applicants in order to identify and hire those with a greater likelihood of success in a job.”

DIFFERENCE BETWEEN RECRUITMENT AND SELECTION:

Recruitment

Selection

1.   Recruitment refers to the process of identifying and encouraging prospective employees to apply for jobs.

2.   Recruitment is said to be positive in its approach as it seeks to attract as many candidates as possible.

1.   Selection is concerned with picking up the right candidates from a pool of applicants.

2.   Selection on the other hand is negative in its application in as much as it seeks to eliminate as many unqualified applicants as possible in order to identify the right candidates.

The Process of Recruitment / selection in Walmart:

Except of internal promotion, Wal-Mart also recruits for associates and high level managers. According to the history of Wal-Mart, company has hired many business owners when it first started. They are important for Wal-Mart because they possessed the entrepreneurial characteristics and cultures, such as penny saving and risky. Furthermore, Wal-Mart recruited external persons who were good at certain field in business management. For example, Clarence Archer was a pharmacist expertise. When he was employed by Wal-Mart, he suggested that Wal-Mart developed pharmacy division to serve customers comprehensively. The idea came true in near future, and since now Wal-Mart has more than 3500 pharmacies and is the fourth of pharmacy business.

From what has been discussed above, human resource strategies are utilized in the Wal-Mart successfully, and it achieved to increase productivity, and working efficiency. However, employee retention becomes an issue. It is because although Wal-Mart has the best benefits, employees would leave if management does not understand how to keep them in the organization. Generally speaking, employee retention is a popular topic which discussed among managers. Enterprises are easy to look for a good employee, but it is difficult to keep them and persuade them loyal to companies all the time.

REMUNERATION AND REWARDS FOR EMPLOYEES

Reward Management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization

The Basic Types of Rewards are:

i.              Extrinsic rewards:

a.             satisfy basic needs: survival, security

b.             Pay, conditions, treatment.

ii.             Intrinsic rewards:

a.             Satisfy higher needs: esteem, and development.

Compensation and Reward system plays vital role in a business organization. Since, among four M’s, i.e. Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Every factor contributes to the process of production/business. It expects return from the business process such as Rent is the return expected by the Landlord. Similarly Capitalist expects Interest and Organizers i.e. Entrepreneur expects profits. The labour expects wages from the process.

REWARDS FOR EMPLOYEES AT WALMART:

a. Internal Promotion

Because Wal-Mart aimed at peoples' involvement for all levels of association, it had developed many learning program to prepare associated to be a leader. According to Archive (2007), more than three quarters of the stores managers had started as an hourly association. Larry English is the best example with regard to internal promotion. He started at one of Wal-Mart stores in Harrison as a stock associate, and then he became an assistant manager in Rogers, Arkansas. In 1970, he had become a manager in Newport, Arkansas. After financial management training, Larry became a field manager that operating many giant stores. Internal promotion instance happened frequently, and associates achieve self-value added, as well as they can loyal to Wal-Mart.

b.  Other rewards:

The management is more emphasis on the spirit of encouragement. For instance, wherever and whenever any of associates have ideas, suggestion or complaints, and they can report to management via oral or written form. Wal-Mart has a special relationship between people engaged in the work of employees, solve complaints, and listen to the views of the staff and so on, so that each of associates feels the warmth of the family of Wal-Mart. Moreover, in each of stores, there are windows to paste advanced staff photo in order to encourage and motivate them psychologically.

PERFORMANCE APPRAISAL

“It is a systematic evaluation of an individual with respect to performance on the job and individual’s potential for development.” It is formal, structured system of measuring, evaluating job related behaviors and outcomes to discover reasons of performance and how to perform effectively in future so that employee, organization and society all benefits.

Performance Appraisals is the assessment of individual’s performance in a systematic way. It is a developmental tool used for all round development of the employee and the organization. The performance is measured against such factors as job knowledge, quality and quantity of output, initiative, leadership abilities, supervision, dependability, co-operation, judgment, versatility and health. Assessment should be confined to past as well as potential performance also. The second definition is more focused on behaviors as a part of assessment because behaviors do affect job results.

Objectives of Performance Appraisals

i.              Promotions

ii.             Confirmations

iii.           Training and Development

iv.           Compensation reviews

v.             Competency building

vi.           Improve communication

vii.          Evaluation of HR Programs

viii.        Feedback & Grievances

PERFORMANCE ANALYSIS AND APRAISAL IN WALMART:

Absolutely, Wal-Mart is a company with strong cultures. It is the key successful strategy that those cultures infiltrate into management. Moreover, Wal-Mart's human resource division is to incorporate Walton's culture and philosophy into a human resource management strategy effectively.

Walmart has different standards for different types of jobs and at different levels of the organizational structure. For instance, the company has productivity standards emphasized for warehouse personnel. Decision-making and financial performance standards are usually emphasized in managerial positions. For frontline hourly sales employees, Walmart’s human resource management puts more emphasis on salesmanship. In contrast, standards for problem solving and planning have more weight in managerial and supervisory positions. Many research conducted the topic "Why people leave?" One of Wal-Mart's retention strategies called for mandatory participation of the location manager in new-employee orientation meetings, because it is a good opportunity that let associates know their leaders from the beginning.

Sam Walton had said: "treat the staff like the garden of flowers and trees, need spiritual encouragement, job promotion and better treatment to watering them, so as to ensure timely transplant with the best and, if necessary also carefully remove the weeds the garden in order to facilitate their growth." "We care about our employees" indicated that managers pay more attention to listen to the views of the staff. The founder of Wal-Mart believed that if the company shares profits with employees, such as salary, bonus or dividend, stock, etc. Then the profit still can flow into the company's account. It is because the staff will treat with customers better based on the monetary system. Nowadays, Wal-Mart has more than 80% of the associates who enjoy with profit sharing plan, employee stock plan or direct ownership of the company's stock, so that associates are able to treat the company as their own, and the brand awareness enhances more and more.