HUMAN RESOURCE

MANAGEMENT

Introduction
 Concept
□ People are central to attainment of
organizational goals

□ Intellectual capital, the intangible asset

(skill, knowledge, information) ensures
sustainable business success

□ Peter F. Drucker: “Knowledge is the

only meaningful resource today”
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 What is HR?
► People become HR when they combine energy & physical
strength with competencies (knowledge, skills, attitudes,
potential for growth)

► HR are people who are ready, willing and able to contribute

to organizational objectives

► HR of an organization include all employees engaged in

various jobs at different levels

► HRM can be seen as an interaction between the human

beings & the organization

► On the one hand,

► One has to put the right person on the job: well educated,
qualified, well selected & trained

► On the other,
► you have to create an organization with possibilities for people
to develop themselves

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□ “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.“
- Dessler.
□ “H-R-M is concerned with the “people” dimension in
management. Since every organization is made up of
people, acquiring their services, developing their skills,
motivating them to high levels of performance, and
ensuring that they continue to maintain their
commitment to the organization are essential to
achieving organizational objectives.”
- Decenzo and Robbins.
□ Human Resource Management is the
process of acquiring, training,
appraising and compensating
employees, and of attending to their
labour relations, health and safety
and fairness concerns
HRM is a process consisting of four functions

► Acquisition: (getting people)

► Planning, estimating demands & supplies of
labor, recruitment, selection socialization

► Development: (preparing them)

► Training, knowledge acquisition, career devt.

► Motivation: (activating them)

► Need, job satisfaction, performance appraisal,
compensation

► Maintenance: (keeping them)

► Working conditions to maintain employee
commitment
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Evolution of HR
1. Industrial Revolution Stage.
- Human work substituted by machine power.
- Mass production.
- Workers treated as commodities, thus
exploitation.
- Emergence of trade unions, labour laws
enacted, collective bargaining.
- Personnel administration for recruitment,
compensation, training, etc.
2. Scientific Management Stage.
- Emergence of personnel management
3. Human Relations Stage.
- Emphasized on people.
- Foundation of H-R-M.
- Advocated on good communication,
participative management, team work, social
setting, group dynamics, non-financial rewards
etc.
4. Human Behaviour Stage.
- Represents new era of H-R-M.
- Emphasized employee behaviour at work.
- Contributors include Peter Drucker, McGregor,
Maslow, Likert, Hertzberg, etc.
5. Organizational Development Stage.
□ Based on humanistic-democratic values.
□ System-wide approach to manage planned
change for organizational effectiveness
through behavioural interventions.
6. Organizational Culture Stage.
- Personality of an organization.
- Shared norms, beliefs, values and attitudes,
etc.
Importance of HRM
□ Good HRM practices ensure that
organization get results – through
people
□ Good HRM practices ensure that an
organization avoids personnel
mistakes like hiring a wrong peron or
experience high turnover,etc.
Line and staff aspects of HRM
□ Authority is the right to make decisions,direct
others’ work and give orders
□ Line authority gives the managers to issue
orders to other managers/employees
- It creates superior-subordinate relationship
- Line managers have line authority
□ Staff authority gives the manager the right to
advise other managers/employees
- It creates advisory relationship
- Staff managers have staff authority
□ HR Manager’s Duties
- A line function – directs activities of people in
his/her department and in related areas
- A coordinative function – Ensures that line
managers are implementing the firm’s human
resource policies and practices
- Staff Functions:
a. Assists in hiring, training , evaluating,
rewarding, counseling, promoting and firing
employees
b. Administering various benefit programs
c. Helps line managers comply with equal
employment and occupational safety laws
d. Handling grievances and labour relations
e. Innovator role, by providing up-to-date
information on current trends and new
methods for utilizing company’s employees
f. Employee advocacy role,by representing the
interests of employees to senior
management
Nature of HRM
□ People focused
□ Management function
■ Like any other management discipline but
more valuable as involves planning,
implementing, controlling of acquisition,
development, utilization and maintenance
of human resources.
□ Top-to-bottom approach.
■ It is performed by all levels of management
and is difficult to be delegated. All levels of
managers also own it.
□ Continuous.
■ Like all "learning" organizations, H-R-M is a
continuous process that is concerned not
only with present but also the future.
□ Dynamic.
■ It is generally affected by the changes in
the environment and needs to be adapted
according to the changing forces.
□ Systematic goal achievement.
■ Personal goals, functional goals,
organizational goals, societal goals.
□ Promotes multi-partite function.
■ Promotes mutuality between all responsible
actors in the business organization, for
example, government, employers, workers,
non-government organizations and so on.
 Objectives of HRM

► Employs the skills & abilities of the workforce

► Provides well-trained and well-motivated employees
► Increases Employees’ job satisfaction and self-actualization

► Communicating HRM Policies to all employees

► Shoot-up productivity

► Achieving Quality of Work Life

► Increasing employee commitment

► Managing organizational culture

► Supporting employee creativity

► Managing change
► Maintaining ethical policies and socially responsible behaviour

► Goal Achievement 18
Functions / Areas of HRM

► Job Analysis

► Human Resource Planning

► Recruitment and Selection

► Training and Development

► Performance Appraisal

► Compensation and Benefits

► Health and Safety

► Employee Relations
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New Approaches to Organizing
HR
□ The transactional HR group focuses on
providing specialized support in day-to-day
transactional HR activities
□ The corporate HR group focuses on assisting
top management in top level big picture issues
□ The embedded HR unit assigns HR generalists
to departments to provide localised HRM
assistance
□ The centers of expertise are like specialised
HR consulting firms within organizations
Contemporary Environmental
context of HRM
□ Globalization and Competition Trends
- Globalization refers to the tendency of firms to
extend their sales, ownership, and/or
manufacturing to new markets abroad
- More globalization means more competition and
more competition means more pressure to be
world class
□ Indebtedness and Deregulation
- As economies boomed, more businesses and
consumers went deeply into debt
- The only way country could keep buying more
from abroad than it sold was by borrowing money
□ Technological Trends
- Technology changed what business do and how
they do it
□ Trends in the nature of work
- High tech jobs
- Service jobs
- Knowledge work and human capital
□ Workforce and Demographic Trends
- Generation Y
- Retirees
- Nontraditional workers
□ Economic Challenges and Trends
Important Trends in HRM
□ Focus more on big Picture Issues
- Become firm’s Internal Consultants, identifying
and institutionalizing changes that help
employees better contribute to the company’s
success and helping top management formulate
and execute its long-term plans
□ Finding new ways to provide Transactional
services
□ Create high performance work systems
□ Have new proficiences
□ Manage ethically
□ Take steps to help employer better manage
challenging times
□ Formulate practices and defend its actions based
on credible evidence
Environment of HRM in Nepalese
Organizations

► Mainly concerned with utilizing human energies

► Least concerned with developing human competencies &

potential for growth of employees

► People not considered as a source of competitive

advantage and important assets

► HRM is not given a strategic role

► Human resources are viewed as a cost rather than assets

by management

► Lack of mutual trust between labor and management

► Multiplicity of unions, union rivalries, politicization of

unions, etc.
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 Conti…
► HR aspects are not considered in policy and plan

► Legal framework has remained weak; "Weak

implementation of laws"

► Newly developed concepts & approaches of managing HR

are still not in use

► Managers tend to see organizations in terms of power,

prestige, domination, hierarchical & mechanistic structure
& poor information & communication systems

► Overstaffing in mostly public enterprises while private

lack professionalism being mostly family owned

► Widespread corruption with massive indiscipline

► HRD and HR planning is an area of least priority

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 Conti…

► Job rotation is not linked to career planning of

employees

► Private sector organizations are more aware of

the management of the HR rather than the
public sector undertakings

► Recruitment, selection, placement process is

followed in all organized enterprises

► No 'good fit' between the national HR

development priority & the HRD strategy

► Human Resource Inventory is prepared by

organizations but updating of inventory is
lacking
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 Conti… New Trends

► Globalisation & information technology has

facilitated innovative approaches to HRM

► Pioneer has been the first joint venture bank,

NABIL

► INGOs & other private companies have started

adopting modern practices

► Organizations have started advertising for

vacancies; organizations use external agencies
for recruitment

► Government employees are selected by Public

Service Commission
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 Conti…

► Public enterprises have legally prescribed

performance appraisal system but they
have become rituals practically

► Some organizations offer ‘voluntary

retirement’ schemes

► Professionalism has been gradually

increasing

► Labor unions are powerful in Nepalese

organizations since 1990s

► IT revolution has already arrived

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Environment of HRM in Nepalese
Organizations
Timeline Details Remarks

1935 Industrial Council constituted First of its kind

1936 Biratnagar Jute Mills Industrial revolution

First of its kind

First modern industry

1937 First commercial bank, Nepal Bank Contributed to the growth
Limited of more industries

1947 First politically motivated labour Labour leaders

movement at Biratnagar Jute Mills succeeded in making
some welfare facilities
available to the workers

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1951 Democracy installed,
Ministry of Industry and Commerce
come into existence
1951-196 Formations of trade unions
0 legalized
1957 First Industrial Policy formulated
1959 Nepal Industrial Development
Corporation established
Nepal Factory and Factory
Workers Act enacted
Conti…
Central secretariat for labour
administration
Focus, however more on political
issues rather than on labour & welfare
matters
Part of the first five-year plan that
began a year earlier
Provided financial and technical
assistance to private entrepreneurs
Welfare Officer in factories of over 250
workers
Regulations on leave, pension &
provident fund, compensation for
disability or death, working hours
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 Conti…

1960-1990 Panchayat system Trade unions had to

operate underground as
they were not legally
permitted to function

Only the officially

sponsored and controlled
labour organization, as
one of the six "class
organizations", was
permitted to operate

A potential candidate had

to enrol as member in
one of these six
organizations to run for
election to the national
legislature

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 Conti…

1965 Establishment of An umbrella body of

Federation of Nepalese employers
Chamber of Commerce
and Industries (FNCCI) First of its kind

Establishment of public HRM still confined to

sector manufacturing personnel administration
enterprises & labor relations
functions
Minimum wage fixed

1966 Nepal joins the Human resource

International Labour assessment & planning
Organization (ILO) as a program begins
member state
Process of establishing
First regional labour regional labour offices
office established in begins
Biratnagar

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1967 Central Bureau of Labour Conti…
Recommended Ministry
Affairs established of Planning (now National
Planning Commission)

1974 Bonus Act, 1974 Bonus must not exceed

10% of net profit & six
months wages & salaries

1990 Restoration of democracy Multi party democratic

system boosts labour
movement

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 Conti…
1992 Labour Act replaces Labour relations become
Nepal Factory and an important function of
Factory Workers Act HRM

Deals with employment &

job security, working
hours, remuneration,
health, safety & welfare
measures, workers’
participation, code of
conduct, punishment &
dispute settlement

Amendment was made in

1998

1993 Trade Union Act enacted Now three national-level

trade unions registered:
DECONT, GEFONT, NTUC

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1995 Nepal ratifies Tripartite Conti…
Provides labor courts to
Consultation deal with labor disputes
(International Labour
Standards) Convention,
1976 (No. 144)

Labour Court Regulation

Act, 1995
2000 Child Labour Act enacted Deals with child’s
definition, employment,
hours of work, wage
payment & punishment

Below 16 years are child

and below 14 years must
not be employed

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⚫ Organic
Manufacturing
⚫ Modular Services
⚫ Flat IT
ITES
⚫ Lean Hospitality
Banking &
⚫ Long Financial
Services
Organisation
Structures
CULTURE
What are we missing?

Local Markets
Regional
National
International
World Zones – Asia, Europe
etc
Integrating HR with Business

Business
Adequat Inadequate
H e
R

Adequate Balanced Wastefu

l

Inadequate Vulnerable Declining

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□ Strategy
- The pattern of decisions that integrates
goals and actions into a cohesive whole,
directing the allocation of organizational
resources toward the development of a
distinctive competence
□ Strategic management
- The process of identifying and executing the
organization’s strategic plan, by matching
the company’s capabilities with the demands
of its environment
 What is Strategic HRM?
□ Two step definition:
□ The HR System is the set of policies and
practices that mediate the relationship
between employer and employee.

□ Strategic HRM is directed at the

development and implementation of an
HR ( Eco)System contributing to the
creation of a sustainable competitive
advantage.
Strategic Human Resource Leadership

A philosophy and style of

leadership that recognizes and
exploits Human Resource
System design as a key
source of sustainable
competitive advantage.
□ Employment Relationship:
The firm specific set of policies and
practices that mediate the relationship
between organization and the
employee.
□ Three forms:
- Inducement
- Investment
- Involvement
Some of the Outcomes of SHRM
⚫ Enhanced Shareholder value
⚫ Increase Performance and ROI
⚫ Significant Positive impact Customer and
Employee Satisfaction
⚫ Effective management HR Practice
⚫ Effective Cost management
⚫ A environment of Change and
Transformation
⚫ Tighter focus on customer needs, key &
emerging markets
HR value proposition – the road map

Business & Environmental Context HR Operating Model

Sourcing
• What to do
• What to
outsource
Human HR HR
Business • Infrastructure
Talent
Capital Function Value
Strategy Proposition • Process
Strateg Strategy • Technology
y • Organization
Governance
• How will we
lead the
function

Performance Monitoring & Renewal

Source : Mercer “Point of View”

 Traditional Strategic HR
Responsibility Staff specialist Line managers

Focus Employee Rel. Partnerships with

internal/ external
customers
Role Transaction Transformational

Initiatives Slow, Reactive, Fast, Proactive,

fragmented Integrated
Time horizon Short term Long

Control Bureaucratic Organic

Job Design Div. Of labor, Team, flexible

specialization
Key investment Capital, Products People,
knowledge
Accountability Cost centre Investment
HR Roles & Deliverables

Role Deliverable

Strategic Strategy Execution

Partner
Business Partner

Administrative Operational Excellence

Expert

Change Agent Capacity for Change

Employee Champion Intellectual

Capital

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 Evolution of HR Roles
Mid 1990s Mid 2000s
Employee Champion Employee Advocate,
Human Capital Developer
Administrative Expert Functional Expert

Strategic Partner Strategic Partner

Change Agent Leader

Prof Dave Ulrich: A New Mandate for HR

 The HR Roles

Future/
Strategic
focus

Strategic Strategic
partner Partner
(Change
Process agent) Peopl
es e

Functional Employee Advocate

expert and
Human Capital
Day to day/developer
Operational
Focus
The cost of doing business
Challenge to HR Managers to Adopt
New HRM System

□ HR Theory
□ HR Competencies
□ HR Value Proposition
□ HR Governance
□ Organizational Culture and System
□ Changing Political Scenario
□ Relevant Laws
□ Corporate Culture