 Strategic Importance of HRM

 Attracting HR
○ HRP
○ Selecting HR

 Developing HR
○ T&D
○ Performance Appraisal

 Maintaining HR
○ Determining Compensation
○ Career Planning
Strategic Importance of HRM
 HRM – the set of organizational activities directed at :
 attracting,
 developing and
 maintaining ……..an effective workforce.
 Its importance stems from –
 increased legal complexities,
 the recognition that HR are valuable means for improving
productivity, and
 the awareness today of the costs associated with poor HRM.
 HRM is imp because mgt has realized:
 Effective HR function has g8 impact on bottom-line
performance of the firm.
 Poor HRP results into hiring followed by lay-offs.
 Vacancy in HR due to any reason is a loss for the firm.
 Haphazard compensation do not attract, keep & motivate good
Y.
Attracting HR
 Attracting qualified HR demands attention in 3 areas:
 HRP
 Recruiting HR
 Selecting HR
1.

 Starting point in attracting HR.

 Involves Job Analysis, Forecasting the Demand &
Supply of labor.
 Job Analysis:
 J/A is the systematic process of collecting information that
identifies similarities & differences in the work.” – Milkovich & Newman.
 Job Description – is the summary of J/A
 Job Specification – lists the KSA needed to do the job.
 Forecasting HR Demand & Supply:
 Mgrs need to plan the future HR needs.
 First the start with trend analysis of past HR usage, future org
plan & general economic trend.
 Trend Analysis can be done by using Index (sales, work hr etc).
 Forecasting supply involves two tasks:
 Forecasting Internal Supply
 Forecasting External Supply
 Use two instrument for Supply Analysis:
 Replacement Chart
 Employee Information System (Skill Inventory)
 Once co identifies the HR needs – next phase is recruiting new Y.
 Recruiting – is the process of attracting qualified persons to apply
for the jobs that are open.
 From where the recruits come from?
 Internal Recruit – considering present Y as candidate. (Promotion)
 Adv – improves Y morale, ensure Y sustainability
 Dis adv – ripple effect
 External Recruit- attracting persons outside of the org
 IT is the decision – “Whom to hire?”
 It is – to gather from applicants info that will predict their job
success & then to hire the candidates likely to be most successful.
 Application Blanks –
 the first step of selection
 It is asking the applicant to fill up an application blank.
 This application comprises of info regarding Y’s background, education,
hobby, job related demography.

 Test–
 Test of ability, skill, aptitude or knowledge
 Interviews:–
 Although popular…but interviews are sometimes poor predictor of job
success – as biasness may occur.

 Assessment Centers–
 Are a popular method used to select managers.
 Effective in selecting current Y for promotion.
 Assessment-center is a content valid simulation for major parts of
managerial jobs
 Typical canter lasts for 2-3 days with groups of 6-12 persons.
 Candidates are assessed by several trained observers.

 Other Techniques–
 Org also uses other techniques depending on the circumstances,
polygraph test, physical exam etc,
Developing HR
 Regardless of how effective a selection system is most Y need
additional training if they are to grow and dev in their job.
 Performance evaluation and feedback is also necessary.

 Training refers to teaching operational or technical Y how to

do the job for which they were hired,
 Development refers to teaching managers & professionals the
skills needed for both present & future jobs.
 Most org provides regular T&D prog for Y.
 Assessing Training Needs:
 Who needs to be trained?
 What do they need to know?
 What do they already know?
 Common Training Method:
 T method depends on situation. Like
 If T contents are factual – assign reading, programmed learning, lecture
work well
 If T contents are interpersonal, form sd take methods that allows
interpersonal activity, group discussion– case study, role playing.
 Evaluation of Training:
 Did Trainees Like the training?
 Can they meet the training objectives?
 Do they perform better on the job?
 It is a formal assessment of how well an Y is doing his/her job.
 Evaluation should be conducted at least once in a year.
 Adv:
 Motivates
 Evaluates training program
 Helps in decision making regarding pay raise, promotion &
training.

 It is giving feedback to subordinates about their performance.

 Usually done in a private meeting with immediate Boss.
 Discussion is about how & where they have been assessed.
Maintaining HR
 After org have attracted & developed an effective work-
force they must also make every effort to maintain them.
 To do so they need to do two things:
 Ensure effective compensation
 Proper Career Plan

 Compensation is financial remuneration given by the org to

its employees in exchange for their work.
 There are 3 basic forms of compensation:
 Wage – are hourly compensation paid to operating Y

 Salary – compensation paid total contribution as opposed to being based on

hours worked

 Incentives – special compensation opportunities that are usually tied to

performance.

 Few people work in the same jobs their entire career.

 Some people change jobs within one org, other changes org

 Due to these movement both Y, Yer suffers.

 Thus planning career progression in advance is in evry1’s best interest