Human Resource Management

HRM 401, Fall 2017

Shah M Saad Husain

CHRO & Head Corporate Planning
HASCOL Petroleum Ltd

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 Shah M Saad Husain
BEngg, MS Engg, MBA, FICS, FIMM, PE

39 years management experience with

multinational, private sector and government
companies in engineering, petroleum, energy
and mineral sectors.

in General Management, HR, Marketing, Project

Management, Engineering Operations,
Business Development, External Affairs,
Corporate Planning, CSR and Customer
Relations.

with PIDC, Habib Group, British Petroleum, BHP

Billiton, Toyota Indus Motor, Pak-Arab Refinery,
HASCOL Petroleum.

30 years teaching experience at IBA, CBM,

PIQC, PIM, NIPA, LUMS in the areas of HR,
Strategic Management, Marketing and Japanese
Management
Human Resource Management

Course Contents
The Strategic Role of HRM
Job Analysis and Job Design
Staffing
Employee Development
Compensation
Employee Relations
Human Resource Management

Course Objectives

Knowledge of HR Management Theory, Concepts, Processes

and Practices.
Identifying Sources of Information and using them.
Class Interaction, learning from the Marketplace.
Practical Application of course, developing Strategies for
Organizations.
Performance Assessment: Students nTeacher.

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Human Resource Management

Course Requirements
Readings from selected texts, journals
Theory, Concepts discussed in Class
Student Projects and Reports
Real Life Cases
Examinations
Presentations and Class Evaluations
Class Participation, Quizzes, Home Assignments

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Human Resource Management

Instructions for Students

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 IBA Rules.

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Grading

Midterm = 20
Final = 30
Project Report, Presentation = 25
Assignments, Quizzes = 25

All Quizzes are open book

For an overall A grade in the course:

A in Final
A in Project Report
A in Assignments, Class Participation

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 Readings

I. Luis R. Gomez Mejia, David B. Balkin,

Robert L. Cardy (2008) : Prentice Hall
Managing Human Resources

ii. Beardwell, Holden, Claydon (2004) : Prentice Hall

Human Resource Management , a Contemporary
Approach 4th Edition

iii. Wayne F. Cascio (2006): Tata McGraw-Hill

Managing Human Resources

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1 HR in the 21st Century

2 The Strategic Role and Outcome of HRM

3 - HR Strategies & Organizational Performance

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 HRM and the 21st Century

Due to Internet technologies, organizations are undergoing a complete

transformation. The 21st century organization must adapt itself to management
via the web.

Intellectual capital will be critical to success. Advantage of bringing new

technologies to the market will be shorter. Technologies will let competitors
match 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. It
will require a culture of empowering people, and a reward system that rewards
the best as if they were the owners of the company.

Intellectual capital will be called on from around the globe. A global corporation
might be based in the US but does its software programming in Sri Lanka,
engineering in Germany, its manufacturing in China, and is linked via the
Internet 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 Organizational chart more likely to be a
shrinking pyramid leading to the CEO flat web, intricately woven that links
partners, employees, external
contractors, suppliers, and customers
in various collaborations
Constructed on bricks and mortar Constructed on knowledge and
technological advantages.

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Introduction to HRM

Human Resources Strategy in a firm is a

firms 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 to
accomplish its mission.

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 HUMAN RESOURCE MANAGEMENT
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 Objectives JOB Employer Objectives

Work (Scope & Depth) Growth in
Growth in Services
Goods & Services
Family & Self
Customer Satisfaction
Profession Employee Employer
EMPLOYER
EMPLOYEE Revenue Generation
Career Relationship
Profits
Security
Performance Return on Equity (ROE)
Social Status Compensation &
Management Expansion of Business
Rewards
Corporate Reputation

Performance Evaluation Salary

Increments Benefits
Bonus Facilities and Perks
Incentives Allowances
Career Development Professional, Career, Societal
Ultimate Potential Recognition
Internal + External (Mkt) Equity

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Performance & Compensation Management by Shah M Saad Husain 16
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Performance & Compensation Management by Shah M Saad Husain 19
 Outcomes of HRM Practices

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

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Outcomes of HRM Practices:

1. Productivity
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, less
time and space, and fewer resources.

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 MORE PRODUCTIVE ORGANIZATIONS GET MORE GOODS AND
SERVICES FROM A GIVEN AMOUNT OF LABOR, CAPITAL, EQUIPMENT.

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Outcomes of HRM Practices:
1. Productivity Improvement
Rebuild employee loyalty.

Establish a clear link between rewards and

production.

Say no to Quick Fix approach.

Emphasize on Continuous Improvement.

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Outcomes of HRM Practices:
2. Quality of Work Life
Two ways of looking at Quality of Work Life
(QWL)
Organizational Conditions and Practices such as
promotion from within, democratic supervision, participative
management, employee involvement, safe working
conditions, mutual trust, team work.

Employees Perceptions that they are respected, relatively

well satisfied, and able to grow and develop as human beings
and professionals.

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Performance & Compensation Management by Shah M Saad Husain 25
Outcomes of HRM Practices:
3. Profit
Management Systems that produce profits through people share the
following dimensions:

1. Employment Security.

2. Selective Hiring.

3. Self-managed teams and decentralization. High Compensation

contingent on organizational performance.

4. Extensive Training, Development and Professional grooming.

5. Reduced differences in status. Respect for competence and

performance.

6. Sharing of information, effective communication systems.

7. Employee Care and Satisfaction.

8. Trust.

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Outcomes of HRM Practices:
4. Roles of HR Professionals Today
The greatness of an Organisation is due to the Greatness of its People, Eiji Toyoda

1. Strategic Partners: work with multiple stakeholders to achieve business

plans.

2. Innovators: create an environment that supports continuous learning and

improvement.

3. Collaborators: create win-win situations with internal and external

stakeholders.

4. Change facilitators: anticipate the need for change, think, conceptualize,

articulate, execute and energize organization to bring change.

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HRM and Corporate Strategic Goals

Human Resource Management is essential to

advance a firms strategic goals.

CORPORATE Linking Corporate Strategic Goals

STRATEGIC with
GOALS
HRM
CORPORATE
STRATEGY
HR
STRATEGY

HR
TACTICS

HR
HR
PLANS POLICIES,
SYSTEMS,
SOPs HR
PRACTICES

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HRs Strategic Role

Successful firms align their HR strategies

and tactics with:

1. Environmental Opportunities and Threats.

2. Business Strategies.

3. Organizational Unique Characteristics.

4. Organizations Competence.

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Selecting HR Strategies to Increase Firms Performances

HR Strategys effect on a firms 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 is
relatively autonomous, even if it is part of a
larger corporation. eg. PAPCO
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Effective HR Strategy Formulation and Implementation

Performance & Compensation Management by Shah M Saad Husain 32

Fit with the Environment
HR strategies should help the organization better exploit
environmental opportunities or cope with the unique
environmental forces that affect it

The relevant environment can be measured in terms of four

dimensions:

1. Degree of uncertainty: how much accurate information is

available to make appropriate business decisions

2. Volatility: how often does the environment change

3. Magnitude of change: how drastic the changes are

4. Complexity: how many different elements in the environment

affect the firm either individually or together

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HR Strategies for Firms with Different Environmental Characteristics

Performance & Compensation Management by Shah M Saad Husain 34

Fit with Organizational Characteristics

1. The production process for converting inputs into

outputs

Routine production process benefits from HR strategies that

emphasize control
example: Specific job description and job specific trainings

Firms with non-routine production processes such as

advertising firms, custom printers, and biotechnology
companies, benefit from flexible HR strategies that support
organizational adaptability, quick response to change and
creative decision making
example: Broad job classes, loose work planning, and generic training

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Fit with Organizational Characteristics
2. The Firms 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 firms 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-down
communication channels.

Management characterized by high risk taking, participation,

egalitarianism, and external, proactive environmental orientation
use HR strategies that fits this outlook
example: 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 firms 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 socializing
of new employees, decentralized pay decisions, broad job
classes and individual-based pay.

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 Fit with Organizational Characteristics
5. The firms organizational culture

Companies that foster an entrepreneurial climate have loose work

planning, informal hiring and socializing of new employees and
variable 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 a

firm tries to foster a long-term emotional attachment between the
firm and the employees have emphasis on preventive vs. remedial
disciplinary action to handle employee mistakes, and explicit ethical
codes to monitor and guide behavior.

Firms that are low on moral commitment rely on authoritarian

relationship 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, that
give it a Competitive Edge

HR strategies should enhance a firms

performance 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 human

resource skills and assets

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 HR Strategies to Fit Three Major Types of Business Strategies

Performance & Compensation Management by Shah M Saad Husain 41

 HR Strategies That Fit Two Major Types of Business Strategies

Performance & Compensation Management by Shah M Saad Husain 42

Choosing consistent and appropriate HR tactics to implement
HR strategies

The best-laid HR strategies may fail when specific HR programs are

poorly chosen or implemented

In addition to fitting with each of the four organizational

characteristics; organizational strategy, environment, organizational
capabilities and characteristics, a firms HR strategies should be
mutually consistent

HR strategies are likely to be successful if they reinforce one

another rather than work at cross-purposes.
example: Working in teams, but traditional individual based
performance appraisals

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 Choosing Consistent and Appropriate HR Tactics to Implement
HR Strategies

Performance & Compensation Management by Shah M Saad Husain 44

Competencies Required of HR Department to Become a Full Strategic Partner

Performance & Compensation Management by Shah M Saad Husain 45

Performance & Compensation Management by Shah M Saad Husain 46
 PARCO`s Growth and HR Strategy Projects
Engineering
Operations
Projects Managerial
Engineering Marketing
Operations Business Diversification
Managerial
Marketing

Projects
Engineering

Talent

HR Management Management
Linking HR & Corporate Goals Sourcing & Recruitment
Performance Management
Performance
Personnel Training and Development
Management
Job Evaluation
Payroll Rightsizing Learning & Development

Benefits Salary Restructuring Succession Planning

Employee Surveys
Leave Leadership Development
HR Processes
Recruitment SAP & HR Data Management
Compensation

Industrial Relations Talent Inventory Work Life Balance

1981 2008 2012 2014

Single Product Multi Product Multi Business
Local National Multinational
 Talent Management and Corporate Strategy at HASCOL
VITOL increases shareholding to 25%
HPL largest private OMC in Pakistan
2001 Company incorporated VITOL acquires 15% shareholding Lubricant Plant construction starts
2005 Oil Marketing Licence obtained Joint Venture with Vitol (HTL) Largest Petroleum Terminal
2014 listed on Pakistan Stock Exchange Other JVs, Terminals and Projects

2001 2015 2016 2017

Profits (PKR Million) 1,133 1,216 To be announced
Sales (Million MT) 1.26 1.85 (Target) 2.25
Market Share 5.4% 7.2% (Jan-Jun) 9.8%
Retail Outlets 300 400 (Target) 500
Terminals/Depots 6 8 (Jan-Jun) 10

Talent Management
HR Management
Personnel Corporate Planning drives HR
Linking HR & Corporate Goals Planning
Payroll Performance Appraisal Manpower Planning + Staffing
Benefits Training and Development
Performance Management
Administrative Services Job Evaluation
Learning + Development
Rightsizing
Leave Career + Succession Planning
Salary Restructuring
Time Management Employee Surveys
HR Processes + Policy Manual
Recruitment Leadership Development
HR Data Management
Talent Inventory Equitable Compensation

Work Life Balance

Local National Multinational