Fundamentals of Human Resource Management 6th Edition Chapter 2

This book is on Human Resource Management (HRM), which is one of the most important functional fields of management of organizations today. HRM is a subject that is compulsory for managers irrespective of their fields of specialisation and interest. Also indeed, it is an important field of specialisation for those who wish to establish careers in human resources and personnel management. It is an exciting academic discipline and a practice as well. Sri Lanka is a developing country where industrialisation is pacing ahead considerably. It is my firm belief that many of the problems being faced by Sri Lankan organizations have been caused by mal-human resource management. It is almost impossible to find problems in managing organisations which do not involve in human resource issues. This book is about how to effectively and efficiently utilize human resources in order to achieve goals of an organisation. There are seven reasons for writing this book. 1. Management Education in Sri Lanka has been commenced nearly 50 years ago. Despite the long history of Management Education in Sri Lanka, Sri Lankan literature on fundamentals and functions of HRM in English is nil or negligible, and specially there is no single book on HRM in English Medium written by a Sri Lankan or by anyone relating to Sri Lankan context which can be used by the Sri Lankan student, Sri Lankan university teacher and the Sri Lankan manager. My basic objective of writing this book is to fill this gap to a significant extent. 2. Our students and even teachers find it difficult to understand fully the books written by foreign authors. 3. Many traditional topics in HRM such as job analysis, recruitment, hiring, welfare management, employee movements, health and safety management, employee discipline management, grievance handling and labour-management relations need to be Sri Lankan oriented by taking into account Sri Lankan Labour Laws and other specific cultural conditions. Hence there is an essential need to have learning and teaching materials, which match with Sri Lankan context. Consequently this book will improve quality and relevance of HRM education in Sri Lanka. 4. Many students in Sri Lanka are unable to find even foreign books to buy or read. 5. Current books being used by students and teachers of Management Studies are foreign books. Consequently a considerable amount of foreign exchange goes out of Sri Lanka in every year. To have a Sri Lankan text will have a positive impact on saving foreign exchange to a significant extent and of course I believe in that my book will give an encouragement to Sri Lankan academics to write books in English which is the language of Management Education (except a few programmes) in Sri Lanka. Postgraduate Education of Management in Sri Lanka is conducted in English. 6. This book will definitely increase the images of the Department of HRM, Faculty of Management Studies and Commerce, and the University of Sri Jayewardenepura. 7. The commemoration of 50th Anniversary of the University of Sri Jayewardenepura falls on February 2009. This book can be treated as a special contribution by the USJ to the society. In fact I have dedicated this book to the University. The purpose of this book is to provide a systematic and rational understanding of HRM, both conceptual understanding and job-oriented practical understanding to the reader. It delivers a systematic and scientific approach to the analysis and handling of issues in HRM with special reference to Sri Lankan context. This book is not a mere collection of thoughts of various foreign authorities but a book based on a distinct model developed by my perspective of HRM. It has been written by using Process Perspective and System Perspective containing many original theoretical formulations. I tried to write the book in a way that appeals to the person who has no or little competency of management of human resources. Also an attempt was made to present complex subject matters by simplifying English language with the intention of enhancing readability and ability of understanding of the reader. I believe in that the book has a balanced coverage of both traditional concerns and emerging concerns, and is highly readable and teachable. Key features of the book include the following: 1. Chapter objectives 2. Real-life examples 3. Actual experiences of the author as a Practitioner of HRM 4. Chapter summary 5. Review and discussion questions 6. Cases 7. Critical incidents 8. Skill builders 9. Chapter references 10. Glossary Long – term success of this endeavour made by myself as the pioneer in Sri Lankan literature of HRM depends on the degree of increasing productivity of organizations and human development through the application of the competency acquired from this book. May this book contribute to increase organizational productivity and success and then enhancement of standard of living of people! This is my heart- felt wish.

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Human Resource Management

Prof. (Dr.) Henarath H.D.N.P.Opatha

BSc Bus Adm (Special) (USJ); MSc Bus Adm (HRM) (USJ);

MBA (Birmingham); Dip PM&IR (CTC); Dip Eng (CPM);

PhD (HRM) (UUM); Doc HRM (IIU); HMIPM (SL); CDBA (OXIM-UK);

D.Litt (SUSL)

Litterarum Doctor and Senior Professor

University of Sri Jayewardenepura

Department of Human Resource Management

Faculty of Management Studies and Commerce

University of Sri Jayewardenepura

Nugegoda

Colombo

Sri Lanka

2016 (First published in 2009)

Dedicated to

University of Sri Jayewardenepura

for her constant noble service to higher education and

human development by being one of the leading universities

in Sri Lanka

Human Resource Management

© Senior Prof. (Dr) Henarath H D N P Opatha

I S B N 978-955-95885-9-7

First Print 2009 January

Second Print 2010 July

Third Print (Revised) 2012 January

Fourth Print 2014 January

Fifth Print 2014 August

Sixth Print 2015 June

Seventh Print (Revised) 2016

All rights reserved. This book or any part thereof may not be reproduced, stored

in a retrieval system, or in any form or by any means, electronic, mechanical,

photocopying, recording, or otherwise, without the prior written permission of

the author.

Published By Sharp Graphic House (Pvt) Ltd

Printed in Sri Lanka

Brief Contents

Part 1 Introduction 1

Chapter 1 Human Resource Management 2

Chapter 2 Human Resource Department 34

Part II Emplo yment Planning 66

Chapter 3 Job Design 67

Chapter 4 Job Analysis 111

Chapter 5 Human Resource Planning 139

Part III Staffing 172

Chapter 6 Recruitment 173

Chapter 7 Selection 209

Chapter 8 Hiring 305

Chapter 9 Employee Induction 329

Part IV Human Resource Development 365

Chapter 10 Employee Performance Evaluation 366

Chapter 11 Training and Development 447

Chapter 12 Career Management 526

Part V Rewards Management 565

Chapter 13 Pay Management 566

Chapter 14 Employee Welfare Management 614

Chapter 15 Management of Incentives 645

Part VI Employee and Labour Relations 676

Chapter 16 Employee Movements 677

Chapter 17 Health and Safety Management 727

Chapter 18 Employee Discipline Management 773

Chapter 19 Grievance Handling 815

Chapter 20 Labour-Management Relations 850

Part VII Strategic Aspects of Human Resource

Management 901

Chapter 21 Strategic Human Resource Management 902

Glossary 967

Subject Index 985

Contents

Preface, xvi

Acknowledgement, xix

Part I Introduction, 1

1. Human Resource Management, 2

Organizations, 3

Two central economic challenges, 3

Definite process, 4

Human resource management, 4

A model of human resource management, 7

Responsibility for functions of HRM, 15

Importance of human resource management, 17

Viewpoints of human resource management, 21

Fields of human resource management, 25

Summary, 28

Review and discussion questions, 29

Case: SLT to introduce a new HR Management Culture, 30

Critical incident: National Carrier in Crisis, 31

Skill builder 1, 32

Skill builder 2, 32

References, 33

2. Human Resource Department, 34

Why is a separate department for HRM?, 34

Organization of a human resource department, 35

Bases of departmentalisation, 38

Role of human resource department, 42

Staffing the human resource department, 46

Centralisation and decentralisation in the human resource department, 52

Specific roles of the department of human resources, 56

Summary, 58

Review and discussion questions, 59

Case: Elegant Garments SL Company, 60

Critical incident 1: The Birth of a HR Department, 61

Critical incident 2: HR Decision Making at M Company, 62

Skill builder 1, 63

Skill builder 2, 63

References, 64

Part II Employment Planning, 66

3. Job Design, 67

Definition, 67

Importance of job design, 69

Techniques of job design, 71

Elements of job design, 81

Alternative work schedules, 88

Summary, 100

Review and discussion questions, 101

Case: Setting the Question Paper, 102

Critical incident 1: Hard Work, 107

Critical incident 2: Better Jobs for Whom? 108

Skill builder 1, 109

Skill builder 2, 109

References, 109

4. Job Analysis, 111

Definition, 111

Importance and uses of job analysis, 112

Process of job analysis, 116

Possible behavioural problems at job analysis, 132

Competency approach to job analysis, 134

Summary, 135

Review and discussion questions, 135

Case: The Reluctant Receptionist, 136

Critical incident: What to do? 137

Skill builder, 138

References, 138

5. Human Resource Planning, 139

Definition, 139

Importance of human resource planning, 141

Human resource planning process, 143

Forecasting demand for HR, 144

Estimate HR supply, 153

Compare forecast demand with estimated supply and decide strategies, 159

Assess HRP effort, 161

Principles of HRP, 162

Summary, 163

Review and discussion questions, 164

Case: X Development and Administration Department, 165

Critical incident: Human Resource Planning-What Is That? 167

Skill builder 1, 168

Skill builder 2, 169

Skill builder 3, 170

References, 170

Part III Staffing, 172

6. Recruitment, 173

Definition, 173

Importance of recruitment, 174

Recruitment process, 176

Identify job vacancies, 177

Ascertain job requirements, 177

Consider factors affecting recruitment, 179

Prepare job application form, 183

Select the method (s) of recruitment, 188

Implementation, 195

Evaluate recruitment effort, 196

Increasing job applicants, 198

Recruitment officer, 198

Summary, 199

Review and discussion questions, 200

Case: University Recruitment, 201

Critical incident 1: The Ethics of Headhunting, 202

Critical incident 2: All in One, 204

Skill builder 1, 205

Skill builder 2, 207

Skill builder 3, 208

References, 208

7. Selection, 209

Definition, 209

Importance of selection, 210

Inputs and requirements to selection, 213

Selection methods, 216

Evaluation of employment applications, 216

Employment tests, 219

Types of tests, 221

Intelligence tests, 221

Achievement tests, 229

Aptitude tests, 230

Personality tests, 238

Properties of a good employment test, 241

Interviews, 249

Types of interviews, 249

The interview as an assessment method, 253

Interview process, 261

Conspect reliability and strategies for its improvement, 268

Background investigation, 270

Medical examination, 278

Assessment centres, 280

Selection process, 283

Ideal profile matching model, 285

Summary, 291

Review and discussion questions, 292

Case: Selection at MM Paints (Pvt) Company, 293

Critical incident 1: The Employment Interview, 296

Critical incident 2: The Super Management Trainee, 297

Critical incident 3: Not Qualified Suitably, 298

Skill builder 1, 299

Skill builder 2, 299

Skill builder 3, 301

Skill builder 4, 302

References, 303

8. Hiring, 305

Definition, 305

Importance of hiring, 305

Hiring process, 307

Probationary period, 316

Post-employment vetting, 320

Summary, 321

Review and discussion questions, 321

Case: The Engineer, 322

Critical incident 1: Termination, 326

Critical incident 2: Probationary-Sup Manager, 326

Skill builder, 327

References, 328

9. Employee Induction, 329

Definition, 329

Importance of employee induction, 331

Induction process, 335

Principles of employee induction, 346

Induction and socialisation, 349

Summary, 353

Review and discussion questions, 354

Case: Bullying at Work on the First Day! 355

Critical incident: First Day, 361

Skill builder, 363

References, 364

Part IV Human Resource Development, 365

10. Employee Performance Evaluation, 366

Definition, 366

Importance of EPE, 368

A model of EPE, 372

EPE policies, 375

PE criteria and standards, 381

PE methods, 388

PE form and procedure, 406

Training of evaluators, 409

PE discussion, 413

PE review and renewal, 420

Some issues of PE, 423

Summary, 438

Review and discussion questions, 438

Case: Self Evaluation, 439

Critical incident: The Scheme, 442

Skill builder, 443

References, 444

11. Training and Development, 447

Definition, 447

Education, training and development, 450

Why is T&D necessary? 452

Purposes of training and development, 454

Learning, learning curves & learning principles, 457

Methods of training, 663

Systematic training and training process, 473

Identify training needs, 475

Prioritize training needs, 479

Establish training objectives, 486

Determine training evaluation criteria, 487

Make other-related training decisions, 488

Implementation, 491

Evaluate the success of training, 492

Responsibility for training in an organisation, 499

Development of competencies, 500

HR development through character building, 508

Summary, 517

Review and discussion questions, 518

Case: Supervisory Training Course, 519

Critical incident: The Impatient Trainer, 521

Skill builder 1, 522

Skill builder 2, 522

References, 524

12. Career Management, 526

Definition, 526

Importance of career management, 528

Responsibility of career management, 529

HR department and career management, 531

Career planning and development: an individual approach, 536

Individual issues in career management, 544

Summary, 547

Review and discussion questions, 547

Case 1: What may be the Next? 548

Case 2: An Outstanding Graduate in HRM, 555

Case 3: An Excellent Professional in HRM, 557

Case 4: An Outstanding Professional in HRM, 558

Case 5: Retired on the Job, 560

Critical incident: Developing Careers for Whom, 561

Skill builder 1, 562

Skill builder 2, 562

References, 563

Part V Rewards Management, 565

13. Pay Management, 566

Definition, 566

Objectives of pay management, 568

Importance of pay management, 569

Equity issue in pay management, 570

Factors affecting pay, 573

Pay management process, 575

Job evaluation, 576

Pay survey, 595

Job pricing, 598

Adjustment of individual pays, 601

Challenges of pay management, 603

Summary, 607

Review and discussion questions, 608

Case: Our Sir, 609

Critical incident: Brawn rather than Brain, 611

Skill builder, 612

References, 612

14. Employee Welfare Management, 614

Definition, 614

Importance of employee welfare, 616

Welfare services, 618

Statutory welfare, 625

Managing a welfare programme, 628

Principles of welfare management, 631

Welfare officer, 633

Administration of welfare services, 635

Summary, 638

Review and discussion questions, 639

Case: Welfare of Water Machines Company, 639

Critical incident: Not Everything Goes as We Think It will, 641

Skill builder, 642

References, 643

15. Management of Incentives, 645

Definition, 645

Importance of employee incentives plans, 646

Types of incentives, 648

Individual incentives, 650

Group incentives, 655

Organisational incentives, 660

Requirements of a successful incentive plan, 662

Incentives for professional and senior managerial employees, 667

Summary, 669

Review and discussion questions, 670

Case: The Merit Award, 670

Critical incident: Incentives at Karma Records, 672

Skill builder 1, 673

Skill builder 2, 674

References, 674

Part VI Employee and Labour Relations, 676

16. Employee Movements, 677

Promotions, 677

Definition, 677

Importance of promotions, 678

Methods of promoting employees, 679

Criteria of promotions, 680

Counting seniority, 684

Special problems arising from promotions, 685

Promotion scheme, 687

Transfers, 690

Definition, 690

Are transfers necessary? 691

Types of transfers, 692

Employer‟s right of transfers, 694

Elements of the function of transfers, 695

Layoffs, 697

Definition, 697

Some considerations, 698

Methods of layoffs, 699

Demotions, 701

Definition, 701

Reasons for demotions, 701

Managing demotions, 702

Dismissals, 703

Definition, 703

Cause of dismissal, 704

Principles of managing dismissals, 705

Terminations, 705

Definition, 705

Types and reasons for terminations, 706

Principles of managing terminations, 707

Retrenchments, 709

Definition, 709

Principles of managing retrenchments, 709

Retirements, 713

Definition, 713

Principles of managing retirements, 714

Summary, 715

Review and discussion questions, 716

Case 1: Rupee Corporation, 717

Case 2: Transfers, 719

Critical incident 1: Order of Transfer, 721

Critical incident 2: A Refusal of Transfer, 722

Skill builder 1, 722

Skill builder 2, 724

References, 725

17. Health and Safety Management, 727

Definition, 727

Importance of occupational health and safety, 729

Hazards and factors affecting health and safety, 732

Occupational accidents, 732

Occupational diseases, 738

Law quality of work life, 740

Organisational stress, 741

Strategies for improving health and safety, 742

Managing stress: an individual approach: 5 Ds, 751

Legal provisions of employee health and safety, 759

Responsibility of health and safety, 764

Summary, 764

Review and discussion questions, 765

Case: The Accident, 766

Critical incident 1: Bad Time, 768

Critical incident 2: Change of Ruwan, 768

Critical incident 3: A Burnout, 769

Skill builder 1, 770

Skill builder 2, 771

References, 771

18. Employee Discipline Management, 773

Definition of discipline, 773

Importance of discipline, 774

A framework of EDM, 776

EDM objectives and disciplinary policy, 778

Rules of behaviour, 778

Penalties or sanctions, 782

Communication and monitoring rule violations, 785

Disciplinary investigation, 788

Sanction determination and implementation, 797

Informal talk/counselling, 799

Progressive discipline, 802

Review and renewal, 807

Summary, 810

Review and discussion questions, 810

Case: Disciplinary Action, 811

Critical incident: Angry Driver, 812

Skill builder, 812

References, 813

19. Grievance Handling, 815

Definition, 815

Importance of grievance handling, 817

Causes of grievances, 819

Knowing grievances, 820

Methods of handling grievances, 821

Grievance settlement procedure, 823

Principles of grievance handling, 827

Tactical methods, 830

Grievance handling system, 832

A model of grievance handling programme, 836

Summary, 839

Review and discussion questions, 840

Case: Nilu's Dilemma, 841

Critical incident 1: Permanency, 844

Critical incident 2: From Meter Reader to Billing Officer, 845

Skill builder, 845

References, 847

20. Labour-Management Relations, 850

Definition of labour-management relations, 850

Importance of LMR, 855

LMR framework, 857

Trade unions, 858

Collective bargaining, 860

Definition, 861

Subject matters of collective bargaining, 861

Types of collective bargaining structures, 863

Importance of collective bargaining, 863

Process of collective bargaining, 864

Essentials of successful collective bargaining, 871

Joint consultation, 873

Macro and micro requirements for enhancing LMR in Sri Lanka, 875

Politicalisation and union multiplicity, 880

Managerial attitudes towards labour unions: some suggestions, 885

Summary, 891

Review and discussion questions, 892

Case: Water Machines Company, 892

Critical incident: Labour Tensions, 895

Skill builder, 896

References, 896

Part VII Strategic Aspects of Human Resource Management, 901

21. Strategic Human Resource Management, 902

Definition, 902

Philosophy of HR, 904

HRM and Competitive Advantage, 905

Coherence, 914

Integration with strategy and strategic needs, 915

Strategic management, 916

Role of HRM in strategic management, 932

A strategy-oriented HRM system, 934

Evaluation of the success of HRM and the HR scorecard, 939

Summary, 951

Review and discussion questions, 952

Case: Strategic HRM in Academic Setting, 953

Critical incident: The Impact of HR Department, 964

Skill builder, 964

References, 965

Glossary, 967

Subject index, 985

About the Author, 990

Preface

I believe that Human Resource Management will play a key role in

determining the success and progress of success of our employees,

organizations and Sri Lankan society as a whole during this

millennium.

The Author

This book is on Human Resource Management (HRM), which is one of the most

important functional fields of management of organizations today. HRM is a subject

that is compulsory for managers irrespective of their fields of specialisation and

interest. Also indeed, it is an important field of specialisation for those who wish to

establish careers in human resources and personnel management. It is an exciting

academic discipline and a practice as well.

Sri Lanka is a developing country where industrialisation is pacing ahead

considerably. It is my firm belief that many of the problems being faced by Sri

Lankan organizations have been caused by mal-human resource management. It is

almost impossible to find problems in managing organisations which do not involve

in human resource issues. This book is about how to effectively and efficiently utilize

human resources in order to achieve goals of an organisation.

There are

seven reasons

for writing this book.

1. Management Education in Sri Lanka has been commenced nearly 50 years

ago. Despite the long history of Management Education in Sri Lanka, Sri

Lankan literature on fundamentals and functions of HRM in English is nil or

negligible, and specially there is no single book on HRM in English Medium

written by a Sri Lankan or by anyone relating to Sri Lankan context which can

be used by the Sri Lankan student, Sri Lankan university teacher and the Sri

Lankan manager. My basic objective of writing this book is to fill this gap to a

significant extent.

2. Our students and even teachers find it difficult to understand fully the books

written by foreign authors.

3. Many traditional topics in HRM such as job analysis, recruitment, hiring,

welfare management, employee movements, health and safety management,

employee discipline management, grievance handling and labour-management

relations need to be Sri Lankan oriented by taking into account Sri Lankan

Labour Laws and other specific cultural conditions. Hence there is an essential

need to have learning and teaching materials, which match with Sri Lankan

context. Consequently this book will improve quality and relevance of HRM

education in Sri Lanka.

4. Many students in Sri Lanka are unable to find even foreign books to buy or

read.

5. Current books being used by students and teachers of Management Studies

are foreign books. Consequently a considerable amount of foreign exchange

goes out of Sri Lanka in every year. To have a Sri Lankan text will have a

positive impact on saving foreign exchange to a significant extent and of

course I believe in that my book will give an encouragement to Sri Lankan

academics to write books in English which is the language of Management

Education (except a few programmes) in Sri Lanka. Postgraduate Education

of Management in Sri Lanka is conducted in English.

6. This book will definitely increase the images of the Department of HRM,

Faculty of Management Studies and Commerce, and the University of Sri

Jayewardenepura.

7. The commemoration of 50th Anniversary of the University of Sri

Jayewardenepura falls on February 2009. This book can be treated as a special

contribution by the USJ to the society. In fact I have dedicated this book to

the University.

The purpose of this book is to provide a systematic and rational understanding of

HRM, both conceptual understanding and job-oriented practical understanding to the

reader. It delivers a systematic and scientific approach to the analysis and handling of

issues in HRM with special reference to Sri Lankan context. This book is not a mere

collection of thoughts of various foreign authorities but a book based on a distinct

model developed by my perspective of HRM. It has been written by using Proce ss

Perspective and System Perspective containing many original theoretical

formulations.

Unlike foreign textbooks (specially American) there was no team of developing this

book. In addition to writing this book I had to do the hard work of word processing,

text designing, and editing my self.

I tried to write the book in a way that appeals to the person who has no or little

competency of management of human resources. Also an attempt was made to

present complex subject matters by simplifying English language with the intention

of enhancing readability and ability of understanding of the reader. I believe in that

the book has a balanced coverage of both traditional concerns and emerging

concerns, and is highly readable and teachable. Key features of the book include the

following:

1. Chapter objectives

2. Real-life examples

3. Actual experiences of the author as a Practitioner and a researcher of HRM

4. Chapter summary

5. Review and discussion questions

6. Cases

7. Critical incidents

8. Skill builders

9. Chapter references

10. Glossary

Long – term success of this endeavour made by myself as the pioneer in Sri Lankan

literature of HRM depends on the degree of increasing productivity of organizations

and human development through the application of the competency acquired from

this book. May this book contribute to increase organizational productivity and success and then

enhancement of standard of living of people! This is my heart- felt wish.

This book will be a highly teachable text for teachers of HRM, specially in Sri Lanka.

The book can appropriately be utilized for certificate, diploma, degree, postgraduate

diploma and master‟s degree in HRM. Of course all of the contents of this book are

not appropriate for certificate and diploma programmes in HRM. Based on the book

it may be possible to design five specialised degree courses such as employment

planning, staffing, human resource development, rewards management and employee

and labour relations for degree level. For the master‟s degree, two courses i.e., HRM:

Theory and Practice I (from Chapter 1 to Chapter 10) and HRM: Theory and Practice

II (from Chapter 11 to Chapter 21), may be designed basing on the book. Another

approach to teaching at degree level based on this book is to offer two courses on

HRM. First course is labelled as Human Resource Management while second course is

labelled as Advanced Human Resource Management. First course may be designed so as to

include Chapters from 1 to 20 (excluding Chapter 12, Chapter 15 and Chapter 21).

Final sections and skill aspects of the Chapters are not covered under the first course

as they are to be included under the second course. In addition second course

contains the Chapters excluded from the first course.

Any suggestions for the improvement of the book are welcome.

Prof. (Dr). Henarath Hettiarachchige Desapriya Nandana Pushpakumara Opatha

129/5 Thiththawelgolla

Kirigampamunuwa Dambulla.

Polgasowita.

opatha@sjp.ac.lk

hopatha@yahoo.com

Acknowledgements

 My sincere deep gratitude and appreciation are expressed to all the authors

whose written work and ideas were useful in writing this book. If I had not

utilized their contributions, this book would have not been a reality.

 It is with great respect that I would like to place on record my deep gratitude

to My Father (Late Captain Mr. Ashoka Opatha) and My Mother (Mrs. D.M.

Herath). My mother who converted her red blood into milk to feed me and

did enormous works which are priceless is immensely acknowledged in this

way in this book.

 I am very grateful to my teachers, specially Prof. R.A.A. Perera, Associate

Professor of Business Administration, USJ who taught me A,B,C,D….in

HRM.

 Indeed I am grateful for the support and dedicated assistance of Mr. A. Anton

Arulrajah, Lecturer of Eastern University of Sri Lanka, who is one of my

postgraduate students. He took the pain of proofreading of all the chapters of

this book and his comments were very useful.

 A special thank goes to Dr. N.L. Karunarathna, Vice Chancellor, University of

Sri Jayewardenepura for his statement about me and all other supports

extended to me. Indeed he has been a source of encouragement.

 I sincerely express my thank and appreciation to Dr. Sampath Amaratunge,

Dean of the Faculty of Management Studies and Commerce of USJ for his all

the supports and encouragement.

 Encouragements and supports given by Mr. K.H. Hemantha Kumara, Senior

Lecturer in HRM; Mrs. A. R. Siriwardana, Deputy Registrar (Academic &

Student Services); and Dr. P. Janak Kumarasinghe, Senior Lecturer in Business

Economics are really appreciated.

 I wish to record my sincere thank to Mr. P.D.K. Amitha Kumara, Lecturer,

Department of Information Technology for his IT support.

 I really appreciate the support and encouragement given by Dr. B.J.H.

Arachchige, Senior Lecturer (Grade I); Dr. Aruna S Gamage, Senior Lecturer

(Grade I); and Mr. S.L. Wimalasena, Lecturer of the Department of Human

Resource Management, University of Sri Jayewardenepura.

 And, certainly my deep appreciation is expressed to my wife (Mrs. W.R.

Nilanthi) for her love, understanding, support and patience throughout the

book. She is indeed interested in services which I do for human development

and institutional development. She is truly "a lady of love, understanding and

patience." My appreciation is due to my daughter (Pooja Jayani Opatha) and

my son (Prabath Janath Opatha) for their love and patience. Also a word of

thank should go to my mother-in-law (Mrs. V. Karunarathna) for her support.

In an e-mail received on 18/02/2009 (at 5:18 PM) by the

author from a Human Resource Manager namely Purna

Chandrasoma who is unknown to him (even he does not

know whether this manager is a male or a female) the

following had been written:

"As a HR practitioner first let me convey my heartfelt

congratulations to you for bringing out a very detailed &

a comprehensive book on HR Mgmt to the Sri Lankan

audiences. We can be justifiably proud as a nation for

this unprecedented feat and thank you for undertaking

this mammoth & Herculean task, single handedly. ... "

Part I

Introduction to HRM

1. Human Resource Management

2. Human Resource Department

Chapter 1

Human Resource Management

The first Chapter of this book is for presenting an introduction to Human Resource

Management (HRM) which is critical in running organisations smoothly and

improving them further in order to enhance the standard of living of people.

Chapter Objectives

After studying this Chapter successfully, you should be able to:

1. Define what Human Resource Management is.

2. Analyse generic purpose, strategic goals, objectives and functions of HRM.

3. Know a model of HRM.

4. Understand who are responsible for performance of HRM functions.

5. Explain the importance of HRM.

6. Argue that every manager is a human resource manager.

7. Describe HRM viewpoints and their considerations.

8. Classify HRM functions into five fields of HRM.

Ultimate purpose of an economy or a nation is better standard of living of its

people. Every nation/economy attempts to achieve a better standard of living in the

period of time being considered compared with the past period of time. Generally

standard of living refers to the level of well-being enjoyed by people by fulfilling their

needs (which are legally and morally acceptable). People have a huge number of

various needs including physical needs such as food, drinks, clothes and shelters. You

are aware that these needs of people are unlimited, various, and complex. Most of the

goods and services which are needed to meet these unlimited and various needs of

people are produced by organisations. There are some individuals who produce

goods and services individually, not organisationally. Examples include a farmer who

produces paddy, a doctor who gives medical treatments, and a teacher who teaches a

subject. However, these goods and services too come to the consumers through

organisations. There are some goods and services (e.g. producing a train, producing

an aeroplane, developing a graduate, providing social security, and providing an

insurance), which cannot be produced by one individual at all and therefore,

organisations will be indispensable for the purpose. Current economy in which we

live is extremely complicated. As an economy we face various challenges. Our nation

has to face a number of challenges such as increasing population, production and

distribution of various things including food and drinks, alleviating the gap between

the rich and the poor and eradication of poverty, reducing unemployment rate,

prevention of diseases and recovering patients, controlling inflation, searching new

sources of energy for sources being depreciated, providing safety and security, and

other unknown challenges. A nation faces these challenges through the creation of

organisations. A nation does need organisations which produce goods and services

that are needed by its people to meet their numerous needs.

Organisations

An organisation means a formal group of two or more people who function in an

official structure that was set up purposefully to accomplish a certain goal or goals

(common). An organisation is defined by Stoner, Freeman and Gilbert (1995) as two

or more people who work together in a structured way to achieve a specific goal or

set of goals. From Wright (1973), Werther, Davis, Schwind, Das and Miner (1985)

quote that organisations are the most inventive social arrangements of our age and of

civilization, and it is a marvel to know that tens of thousands of people with highly

individualized backgrounds, skills, and interests are coordinated in various enterprises

to pursue common institutionalized goals. Organisations were created and will be

created for the purpose of meeting needs and challenges of people/nation. Most of

the food people consume, the clothes people wear, beverages people have, the

vehicles people use, computers people use, and books people read are products of

organisations. A person who lives in the modern civilization will become a member

of various organisations (e.g. school, temple, workplace, death donations society etc.)

in order to achieve various purposes throughout his/her life, and also he/she will

have to deal with various organisations (e.g. hospital, police station, railway station,

bank etc.) in order to meet various needs though he/she is not a member of those

organisations. Modern economy/nation is operated by a group of various

organisations that differ in terms of goals, size and complexity. What will happen if

the working of this group of organisations ceases, or is destroyed? Modern

sophisticated society will become destitute, confused, uncivilised, and even paralysed

completely. For example, if organisations engaged in distributing essential food items,

providing electricity, exchanging information, transportation of goods and people,

caring health, and providing education stop their activities for several days,

existence/living of everyone will fall into a terrible plight within a short time.

Two Central Economic Challenges

Success of the nation for a certain period of time (acquiring the expected standard of

living of people by utilising a fair amount of resources with a minimum amount of

wastage) depends on successful workings of organisations. In other words, success of

a nation is dependent upon sound organisations. It is possible to achieve needs of

people through sound organisations. Needs of people will increase constantly in

number and complexity. Hence, the nation expects to achieve needs of people in

better way in the period of time under consideration compared with the past period

of time. The nation expects to achieve needs of people in further better way for the

next period of time. In other words, progress of success (going beyond the success

that is expected for a certain period of time) is expected. At the organisational level

too this state is applicable. Assume an organisation engaged in manufacturing packets

of full cream milk powder. The organisation expects to produce 5000000 packets

annually to meet full cream milk powder need of a selected group of people.

Achieving this amount of production is the success. It is forecast that demand for full

cream milk powder in the next year will increase by 10%. The organisation will have

to increase the amount of production by 10% to meet the forecast increased demand.

Achieving this amount of production, i.e. 55 00000 packets is the progress of success.

While success depends on good organisations progress of success depends on

better organisations. Thus, a nation faces two central economic challenges:

1. to function organisations soundly to achieve expected success. In other

words, how to run organisations smoothly to achieve the expected success?

2. to improve organisations continuously to achieve expected progress of

success. In other words, how to improve the organisations to achieve the

progress of success?

How does a nation face these two central economic challenges? They are faced

through a definite process.

Definite Process

A nation that operates rationally faces the two central economic challenges through a

definite process what is called Management. Management refers to Organisational

Management that is generally defined as the process of efficient and effective

utilisation of resources in order to achieve goals of an organisation. In this process,

organisations should establish goals which are to be achieved, and utilize efficiently

limited resources to achieve the goals established. How to make organisations good

to achieve success? The answer is through Good Management. How to make

organisations better to achieve progress of success? The answer is through Better

Management. Thus, while Good Management is indispensable to run an organisation

soundly to achieve the success Better Management is indispensable to improve an

organisation continuously to achieve progress of success. From traditional

perspective and modern perspective as well with regard to Organisational

Management it consists of several functional fields including Production Management

(new label is Operations Management), Marketing Management, Financial

Management, and Personnel Management (new popular label is Human Resource

Management). Human Resource Management (HRM) is one of the most

important functional fields of Organisational Management.

Human Resource Management

Today Human Resource Management, which is a very significant functional field of

Organizational Management, has evolved a very broad and profound management

branch. It is HRM that deals with management of Human Resources in an

organisation. It is the human side of Organisational Management or Business

Administration. HRM is also called by alternative names such as Personnel

Management (PM), Manpower Management, People Management and Staff

Management. Some studies indicate that PM differs from HRM and that is not

discussed here as it is beyond the objectives of this Chapter. Various specialised

academics and expert institutes have presented various definitions about what HRM

means. Some of them are presented below.

1.

"Personnel is that function of all enterprises which provides for effective

utilization of human resources to achieve both objectives of the enterprise

and the satisfaction and development of the employees." -

Glueck (1979,

p.6)

2.

"Of great importance to organizations today is how to effectively use their

human resources. Effective PM is the recognition of the importance of a

company‟s work force as vital human resources and the utili zation of

several functions and activities to ensure that they are used effectively and

legally for the benefit of the individual, the organization and society."

-

Schuler and Youngblood (1986, p.6)

3.

"Personnel Management is a set of activities focusing on the effective use

of human resources in an organization."

- Mathis and Jackson (1988,

p.11)

4.

"HRM is the effective management of people at work

.

It examines what

can or should be done to make people both more productive and more

satisfied with their working life."

- Ivancevich (1992, p.3) & (2008)

5.

"HRM concerns the human side of the management of enterprises and

employees‟ relations with their firms."

- Graham and Bennett (1992, p.3)

6.

"The term „personnel management‟ is used to encompass those

managerial actions concerned with the acquisition and utilization of

labour services by any organization which pursues an economic purpose.

The terms „labour management‟ or „human resource management‟ are

sometimes used as substitutes, although they may be assigned subtl y

different meanings in some contexts. Nevertheless, the characteristic

which distinguishes this management function from others is that it

focuses squarely on the value of human resources to organizational

activity."

- Thomason (1998, p. 256)

7.

"HRM is the use of several activities to ensure that human resources are

managed effectively for the benefit of the individual, society and the

business."

- Schuler (1998, p.122)

8.

"HRM deals with the design of formal systems in an organization to

ensure the effective and efficient use of human talent to accomplish

organizational goals. In an organization, the management of human

resources means that they must be recruited, compensated, trained and

developed."

- Mathis and Jackson (2000, p.4)

9.

"HRM encompasses those activ ities designed to provide, motivate and

coordinate the human resources of an organization. The human resources

of an organization represent its largest investment."

- Pattanayak (2000,

p.7)

10.

"HRM refers to the policies, practices, and systems that influence

employees‟ behaviour, attitudes, and performance

."-Noe, Hollenbeck,

Gerhart and Wright (2007, p.5)

11.

"Personnel Management is that part of the management function which is

concerned with people at work and with their relationships within an

enterprise. Its aim is to bring together and develop into an effective

organisation the men and women who make up an enterprise and, having

regard to the well-being of an individual and or working groups, to

enable to make their best contribution to its success."

– The British

Institute of Personnel Management (currently The Chartered Institute of

Personnel and Development) (as in Graham and Bennett, 1992)

12.

"Personnel Management is that part of the management function which is

primarily concerned with human relationships within an organisation. Its

objective is the maintenance of those relationships on a basis which, by

consideration of the well-being of the individual, enables all those

engaged in the undertaking to make their maximum personal

contribution in the effectiv e working of the undertaking."-

Indian

Institute of Personnel Management, Calcutta (as in Tripathi, 1992)

Viewing from these definitions, following common characteristics of HRM can be

given:

1. HRM focuses on managing people.

2. It is managing people at work or employees who make up an organisation.

3. It exists within an organisation.

4. It generally attempts to serve for the organisation where it is practiced,

employees working for it and society at large.

5. It is the human side of Business Administration.

6. It is a traditional functional field of Business Management.

7. It was traditionally termed as Personnel or Personnel Management.

8. It has a set of activities that focuses on effective use of employees for the

accomplishment of organisational goals.

9. It is mainly concerned with human relationships within an organisation.

10. It has policies, practices and systems influencing employees.

A Model of Human Resource Management

Definition

HRM is defined as follows:

"HRM is the efficient and effective utilization of human resources to achieve

goals of an organization."

According to the above definition of HRM,

(a) An organization means an economic and social entity composed of a group of

people who interact with each other for the purpose of achieving a common goal.

This organization may be either a profit organization or a non -profit organization.

Also it may belong to public sector or private sector or cooperative sector.

(b) Goals refer to desired targets to be achieved in future. The basic goal of any

organization should ideally be to serve the human society. If not, the existence of the

organization will suffer or vanish after a short period. Basic goal of an organization is

to fulfil human needs and upgrade standard of living of people. The fulfilment of all

human needs is impossible for an organization. Therefore, what human need or

needs to be fulfilled should be defined. Thus, by fulfilling certain human need/ needs

the organization activates to enhance level of well-being enjoyed by people.

Instance: -To upgrade the standard of living of Sri Lankan people through the

production and distribution of high quality dairy products.

In order to achieve the above-mentioned basic goal, the organization establishes

specific goals. An organization may establish one or several or all of the goals

mentioned bellow or other ones not mentioned here:

 To increase net assets of owners.

 To enhance employee development and satisfaction.

 To maximize customer satisfaction.

 To achieve cooperate growth.

 To increase market share.

 To fulfil social responsibility.

 To achieve financial stability.

 To increase quality of the product.

(c) Human Resources (HR) are employees who work for the organization being

concerned. It is not an exaggeration that H uman Resource (HR) is the most

significant resource compared with other resources such as financial resources,

physical resources etc. The overwhelming significance of HR is due to its unique

characteristics, which are:

1. It is animate, active and living.

2. It has the ability to think, feel and react.

3. Its value appreciates with the passage of time (because of experience, training

etc.).

4. It has the ability to influence on determining its cost (pay).

5. It has the ability to organize (as unions, teams etc.).

6. Its behaviour is complex and may be unpredictable.

7. It has the ability of creativity and innovation, which cannot be found in any

other resources.

8. It makes decisions in respect of all other resources.

HR with the above mentioned unique characteristics in an organization could be

divided into two groups such as managerial employees and non-managerial

employees. Managerial employees generally make decisions and implement them

through non-managerial employees.

(d) Efficient utilization of HR means optimum use of employees by eradicating (or

minimizing) wastage. It denotes utilizing the right employees in the right number at

the right cost. It involves fulfilment of activities by minimizing waste of available HR,

as much as possible, in terms of number of employees, their efforts and total

employee cost etc.

(e) Effective utilization refers to use of HR for organizational effectiveness, which

is the extent to which goals of the organization have been realized. It involves

utilization of employees so as to accomplish goals of the organization fully. It is

possible for an organization to achieve efficiency by minimizing employment cost

through reduction of employees in quantity and quality as much as possible.

However, if the relevant activities and functions are not performed successfully and

organizational goals are not attained such an efficiency will be meaningless. Hence

efficiency should be reached so as to attain organizational effectiveness.

The Generic Purpose

The generic purpose of HRM is to generate and retain an appropriate and contented

human/ employee force, which gives the maximum individual contribution to

organizational success. An appropriate employee force includes employees who

possess knowledge, skills and attitudes that are necessary for attaining fully goals of

the organization. The term „Appropriate‟ means competent, motivated,

committed and involved . Contented refers to being satisfied and quite happy

(enjoying higher level of well-being).

Strategic Goals

There are several strategic goals of HRM in order to achieve the above-mentioned

generic purpose. They are:

1. To improve Employee Productivity

Employee productivity is the relationship between employee inputs and outputs. It is

the ratio of employee outputs to employee inputs within a certain period of time. The

following formula can be used to calculate the employee productivity.

Employee outputs (Number of units produced)

Employee productivity = -----------------------------------------------------

Employee inputs (Number of employees)

This implies how many units of production one employee creates for a particular

period of time. Expected employee productivity should be achieved within certain

duration and also employee productivity improvement should be achieved (for the

next period) for the progress of success. Simply productivity improvement means

doing better on tomorrow than today.

2. Employee Development

Employee development denotes a broader meaning. It involves provision of

opportunities as many as possible to accomplish employees‟ personal objectives,

improvement of their career development or career path, and enhancement of their

capabilities through the development of knowledge, skills and attitudes.

3. To increase Quality of Work Life (QWL)

QWL is a wide and abstract concept gross meaning of which is that all the employees

have the opportunity of presenting their ideas, suggestions and opinions before

making decisions which affect them. Schuler and Youngblood (1986,p.455) defines

QWL as a situation in which all members of the organization, through appropriate

channels of communication set up for this purpose, have some say about the design

of their jobs in particular and the work environment in general. It is intended that the

degree of employees‟ participation or involvement in making employment decisions is

increased.

4. To ensure Legal Compliance

HR of the organization should be utilized so as to conform to various laws imposed

by the government in relation to managing people. If legal compliance does not exist

survival of the organization will jeopardize owing to incidences of diverse industrial

conflicts such as strikes. Sri Lankan Government has imposed a set of labour laws

some of which are given below:

* Shop and Office Employees Act

* Employment of Women, Young Persons and Children Act

* Industrial Disputes Act

* Termination of Employment of Workmen (special provision) Act

* Employees‟ Holidays Act

* Workmen‟s Compensation Act

* Wages Boards Ordinance

* Trade Unions Ordinance

HRM in an organization (specially private) should be performed in compliance with

legitimate provisions imposed by the labour laws. For instance, if an organization

requires a worker to work on a Full Moon Poya Day, the worker is to be paid at a rate

not less than one and a half times his/her normal daily rate of payment according to

the Shop and Office Employees Act. Another example, as per the same Act, a person

who has not attained the age of fourteen years shall not be employed in or about the

business of a shop or office.

5. To ensure Customer Compliance

Currently a growing number of organizations will have to comply with various

prescriptions given by their important customers. For example, a very large customer

of a garment manufacturing firm may require the management not to use employees

continuously without giving at least one full day as a holiday per week. The

organization will have to manage its employees so as to comply with this customer

requirement. Firms engaged in security service will have to adhere to a set of special

requirements given by their customers when managing employees.

Objectives

When strategic goals of HRM are fulfilled, the fulfilment of the generic purpose of

HRM occurs. The following objectives have to be accomplished in order to achieve

strategic goals of HRM.

1. To procure right people at the right time to do the right jobs.

Without procuring right people at the right time to do the right jobs, it is not

possible to achieve any of the strategic goals mentioned above successfully. It is

imperative that the organisation procures right people as employees at the right

time to do the right jobs.

2. To retrain the most (or at least more) appropriate employees (who produce

desired performance) within the organization.

All the employees procured at the time of first employment may not be right

performers after a certain time passes. An organisation that wishes to achieve

success and progress of success does not opt to keep poor or wrong job

performers and may have to terminate them. Of course it will have to keep the

most appropriate employees who are excellent job performers within the

organisation until such time that is possible (ideally until they retire).

3. To get and improve Organizational Commitment of the employees.

The organizational commitment refers to the relative strength of an individual‟s

identification and involvement in a particular organization (Keliman, 2000). When

an employee is committed to his/her organization, he/she identifies with the

organization and becomes loyal to it.

4. To generate and enhance Job Involvement and Organizational Citizenship

of the employees.

Job involvement is defined as the degree to which a person: chooses to participate

in a specific job experience, considers the job to be a central life interest, and

considers job central to his/her self-concept (Dunham, 1984). Deciding to

participate in job; physical involvement in job; major satisfaction coming from

job; living, eating and breathing on job; and referring to job in evaluating oneself

are specific characteristics of job involvement. Organizational citizenship refers to

the degree to which employees are willing to engage in non-official behaviours

that help the organisation achieve its goals as they love or wish its success and

progress. It involves a state in which an employee works for the benefit of the

organization in addition to what he/she is supposed to perform on the job.

Examples of such behaviours include helping others to perform their duties,

working overtime willingly when necessary, and coming to work on a holiday for

a special need of the organization by sacrificing a personal trip planned to go with

family members. It is an objective of HRM to generate organizational citizenship

within the employees of the organization and further it.

5. To motivate employees.

Motivation refers to the extent to which employees are willing to exert the

necessary effort to perform their jobs well (Keliman, 2000). Through HRM it is

expected to motivate employees to perform their duties of the jobs in the

expected way.

6. To enhance Job Satisfaction of the employees.

Job satisfaction refers to the degree of enjoyment an employee feels towards

his/her job being performed. If the employee is pleased with his/her job as it

meets his/her needs and wants, he/she will likely experience a high job

satisfaction. HRM attempts to enhance job satisfaction of the employees.

7. To control the cost of employees.

An organization will have to spend a considerable amount of money for the

employments of employees in terms of pays, benefits, incentives etc. The cost of

using employees is a major component of the total business cost of the

organization. Over costing or under costing is to be avoided.

Functions

There is a series of functions to be followed in order to accomplish the goals and the

objectives of HRM. This series of functions includes:

1. Job Design (The function of arranging tasks, duties and responsibilities into an

organizational unit of work.)

2. Job Analysis (The function of investigating systematically jobs and job holder

characteristics in order to create a collection of job information.)

3. Human Power Planning (The process of determining future employee needs and

deciding steps or strategies to achieve those needs.)

4. Recruitment (The process of finding and attracting qualified people to apply for

employment.)

5. Selection (The process of making the choice of the most appropriate persons

from the pool of applicants recruited to fill the relevant job vacancies.)

6. Hiring (The process of appointing the persons selected to the posts/ jobs which

are vacant.)

7. Induction (The function that systematically and formerly introduces the new

employees to the organization.)

8. Performance Evaluation (The function that measures degree of effectiveness and

efficiency of employees in performing their jobs.)

9. Training and Development (The process of improving current and future

employee performance by increasing employees‟ competencies through

acquisition of knowledge, skills and attitudes.)

10. Career Management (The function of planning and developing careers of

employees for the benefits of employees and the organization.)

11. Pay Management (The process of development, implementation and maintenance

of a base pay system which adheres to external equity, internal equity, inputs

equity and absolute equity.)

12. Welfare Management (The group of activities involved in the development,

implementation and on-going maintenance of a fair and effective system of

facilities and comforts to enhance standard of living of employees.)

13. Management of Incentives (the process of development, implementation and

maintenance of a fair and adequate system of incentives.)

14. Employee Movements (The function that deals with promotions, transfers, lay-

offs etc in the right ways at the right times.)

15. Health and Safety Management (The group of activities involved in creating,

improving and maintaining total health and safety of employees.)

16. Discipline Management (The group of activities involved in planning and

controlling behaviour of employees in compliance with established rules and

regulations.)

17. Grievance Handling (The function that identifies and solves discontents arising

from feelings of injustice felt by employees in connection with work

environments.)

18. Labour Relations or Labour-Management Relations (Management of all

interactions which occur between management and trade unions.)

The above functions refer to as HRM functions. These functions are interrelated .

For instance, pay management can be performed successfully by doing job analysis

successfully. That, performance evaluation gives inputs to perform the function of

training and development, is another example showing the interrelated nature. Also

some functions are interdependent. Success of one function has a direct impact on

determining the success of another function. For instance, success of selection

function depends on successful performance of recruitment function. A decision

taken in performing one function may affect performance of another function. For

instance, salary determined for a job according to job evaluation affects recruitment

in respect of that job. It is very imperative to ascertain that there are interrelationship

and interdependency among HRM functions. One function cannot operate in

isolation. A function needs some functions as inputs and it becomes an input for

other functions. For instance, selection function needs functions such as job analysis,

human resource planning, and recruitment as inputs and it becomes an input to

functions such as hiring and induction.

See the Figure 1-1. It depicts the expanded model developed by the author from the

model (Opatha, 1995; and Opatha, 2002) in respect of HRM. There is a sequential

process from job design to induction. It implies that job design has to be done first

and then job analysis and then human resource planning and so on. In respect of

functions from performance evaluation to labour relations, usually a sequential

process does not exist. It implies that these functions can be performed

simultaneously or there are no pre-requisites or post-requisites. If a sort of sequence

is attempted, after induction, performance evaluation can be performed and then pay

management can be done. Then it is training and development. Other functions, i.e.,

discipline management, health and safety management, welfare management, and

grievance handling etc can be performed simultaneously. In fact it can be observed

that all these HRM functions are performed concurrently in a large organisation.

In case of a new organisation there is a clear sequence with regard to some HRM

functions. First there must be jobs to be designed as individual assignments for

employees to perform successfully. Then jobs need to be studied so that official

documents are prepared as profiles of jobs which are available in the organisation and

profiles of people needed as employees to perform jobs successfully. Next human

resource planning has to be done in order to know job vacancies to be filled by right

people. Recruitment is done to attract right people as job applicants from whom the

most appropriate people are chosen by selection function after which new employees

are hired and then inducted to the organisation. Then employee performance needs

to be evaluated for rewards purposes.

Figure 1-1 A Model of HRM

Health & Safety

Management

Objectives

1. procure right people at

the right time to do the

right jobs

2. retain the most

appropriate employees

within the organization

3. get and improve

organizational

commitment of the

employees

4. generate and enhance

job involvement &

organizational

citizenship

5. motivate employees

6. enhance job

satisfaction

7. control the cost of

employees

Strategic Goals

1. improve employee

productivity

2. employee development

3. increase quality of

work life

4. ensure legal compliance

5. ensure customer

compliance

Generic Purpose

Generate and retain an

appropriate and contented

human force, which gives

the maximum individual

contribution to

organizational success &

progress of success

Responsibility for Functions of HRM

Whose responsibility is performance of functions of HRM in an organisation? This is

an important question. Responsibility for HRM functions rests with every manager in an

organisation (Werther et al, 1985; Werther and Davis, 1989). HRM is a

responsibility of every manager in an organisation. Every manager has a certain set

of subordinates who need to be managed. Every manager has to perform functions

of managing these subordinates (human resource planning, induction, performance

evaluation, training, discipline management, grievance handling etc.). If managers

throughout the organisation do not accept their responsibility, then human resource

activities (functions) may be done only partially or not at all (Werther and Davis,

1989). It is not incorrect to mention here that every manager is a human resource

manager from the sense that every manager is responsible for HRM.

After establishing a separate human resource department in the organisation under

the leadership of a human resource manager are other managers freed from the

responsibility of HRM? The answer is clear. That is „NO T ‟. Other managers are not

freed from the performance of HRM functions and it remains unchanged. Werther

and Davis (1989, p.13) write:

"Even when a human resource department is created within the organisation, a

dual

responsibility

exists among operating managers and human resource experts. Individual

managers remain involved with planning, selection, orientation, tr aining, development, compensation,

and other personnel activities, even though they may be done primarily by experts in the human

resource department."

Thus, all the managers in an organisation (line and other staff managers) and the

human resource manager or managers are responsible for successful performance of

HRM functions of that organisation. Human resource experts and other managers are

dually responsible for ensuring that HRM functions of the organisation are

performed properly. Whether there is a human resource department or not an

organisation has employees to be managed so that its goals are accomplished. HRM

exists in every organisation irrespective of the existence of a human resource

department and therefore every manager will have to be involved in performing

HRM functions. HRM is a responsibility of all those who manage people at work as

well as specialists designated as HR/Personnel Managers.

When a human resource manager is in the organisation his/her main work is to

formulate policies, procedures, rules and programmes with regard to HRM functions

and to ensure that they are implemented as planned. A major work of line and other

staff managers is to implement those policies, procedures, rules and programmes

actually relating to employees of their respective departments and units. For example,

let us consider a HRM function namely performance evaluation. Exhibit 1-1 shows

how responsibility of performing sub functions/activities of the function of

performance evaluation has been delegated between the human resource manager

and other managers.

Exhibit 1-1 Responsibility of the Function of Performance Evaluation

1. Establish objectives

of performance

evaluation

2. Formulate policies

of performance

evaluation

3. Set performance

evaluation criteria

and standards

4. Select the

method/s of

performance

evaluation

5. Design evaluation

form and

procedure

6. Train evaluators

7. Evaluate

8. Discuss evaluation

results

9. Make decisions and

store information

10. Review and renewal

Initiates and establishes

Does and recommends

Does with the help of

relevant engineers and

managers

Recommends

Does and recommends

Does

Does only for HR staff

Does only for HR staff

Jointly done

Does

Help and give comments

Accept and comment

Accept and comment

Accept

Comment and accept

Assist

Do

Do

Done jointly

Assist

Certainly how responsibilities for HRM functions are shared between human

resource manager and other managers depends on top management philosophy, top

and middle managers‟ understanding of HRM, competencies of the human resource

manager and size of the organisation. If top managers believe positively in HRM

other managers‟ involvement in HRM is encouraged. When top and middle

managers‟ understanding of HRM is high more involvement of other managers in

HRM occurs. When competencies of the human resource manager are high more

delegation of HRM functions to the HR department occurs. When the size of the

organisation is larger , it is likely that involvement of human resource manager in

HRM gets larger.

Every manager, in whatever job title he/she is identified or in what level he/she is, is

responsible for performance of HRM. For example, if production workers are hired

for the production department in a beverages manufacturing company, the

Production Manager will have an important influence in the matter of determining

the number and the types of workers required. Also the manager will have an

important say in the final selection, induction, training and welfare of workers. Finally

it is possible to emphasize that HRM is not a one-person responsibility nor can it

ever be achieved by one person. It is a corporate, cooperative endeavour that should

stem from a common feeling and concept and should progress in a unified, co-

ordinated manner (Tripathi, 1991). Hence for overall efficiency and effectiveness of

the organisation it is a must that HRM is to be performed by every manager in the

organisation in a significant extent.

Importance of Human Resource Management

It has been described earlier that human resources are a unique resource as viewed

relatively with other resources. Human resources are the most important resource

from all the resources which are used by an organisation to accomplish its goals.

Ability to accomplish the goals of the organisation occurs because of availability of

other resources such as money, machines, materials, methods, time, and information.

However, actual accomplishment of the goals occurs only if human resources are

available. All other resources are collected, combined, and used only by human

resources through making decisions. In fact other resources make things possible

but only human resources make things happen . Happening is more important

than possibility of doing in the context of realisation of the goals of the organisation

(see Figure 1-2). For instance, assume that you have sufficient money, a good vehicle,

time, and a map to go to Dambulla. Possibility of going to Dambulla occurs owing to

other resources. However, until you have a right driver you cannot reach there.

Happening of going to Dambulla occurs owing to a right driver. If you drive you are

the human resource. Hence it is needless to say that HRM is a very important

discipline or subject that focuses on efficient and effective utilisation of human

resources.

It is possible to mention that success of other functional fields of management

(Operation, Marketing, Finance, Management Information System [MIS], Research

and Development [R&D] etc.) depends on success of HRM. Relevant functional

managers make managerial decisions with regard to respective fields. These managers

are to be competent, motivated, contented, committed, and involved. If the

organisations have right functional managers there will be right functional decisions

leading to achievement of functional goals and then overall organisational goals. If

these managers are not right (incompetent, not motivated, discontented, not

committed, and not involved) there will be inefficiencies and ineffectiveness in

functional departments/fields owing to wrong managerial decisions. These managers

become competent, motivated, contented, committed, and involved only if sound

HRM exists within the organisation. It is not inaccurate to state that success of other

functional fields significantly depends on successful HRM (see Figure 1-3). Hence it

is not an exaggeration that HRM is one of the most important functional fields of

management.

Figure 1-2 Other Resources and Human Resources

Figure 1-3 Other Functional Fields and HRM

Depend on

A Doctor of Philosophy in Management, namely Davar (1991) analyses the term

MANAGEMENT as "MANAGE MEN TACTFULLY". He argues that

Management is not anything else other than HRM . The purpose of this analysis is to

highlight the overwhelming importance of HRM and not to underestimate other

Other

Functional

Fields (MIS,

R&D etc)

Human Resource Management

Other resources

(Money, machines,

materials, methods,

information, time etc.)

aspects of Management. HRM is the human aspect of Management. „Tactfully‟ means

utilizing carefully without hurting feelings and expectations. Thus, the term

Management itself implies that the most important aspect of management is HRM.

Another fact highlighting the importance of HRM is that HRM is a very important

responsibility of every manager. This point is further justified by the arguments given

in Exhibit 1-2. As responsibility of HRM rests with every manager, it is vital for every

manager to acquire a sufficient degree of competence in HRM. Every manager must

possess a competency of HRM irrespective of the field of interest and the field of

specialization. Otherwise it has to be acquired by every manager. This does not mean

that every manager must be an expert in HRM or a specialist in HRM. This does

mean that every manager should be sufficiently competent in managing his/her

staff efficiently and effectively.

HRM contributes to organizational success and then societal success. See Figure 1-4.

It depicts that successful performance of HRM functions leads to result in efficient

and effective utilization of human resources which leads to result in efficient and

effective utilization of limited resources and then realization of organizational goals.

Achievement of organizational goals leads to improve societal success (by enhancing

standard of living of people). Looking from social perspective, HRM is important.

HRM contributes to achieve organizational goals which will contribute to meet basic

needs and wants of the people and enhance their well-being. Particularly, functions

such as pay management that ensures a fair system of pays, appropriate job design,

welfare management, health and safety management, grievance handling, discipline

management and labour relations may contribute to reduction of class struggles,

improvement of life satisfaction, and helping people to face cost of living

successfully. Training and development, an important HRM function, will contribute

to increase human capital (competencies of generating economic and social benefits)

of the country. When you learn each HRM function in detail you will be able to

ascertain how HRM contributes to the society specifically.

As employees have different personalities, different expectations, and different

abilities, it is difficult to manage them. Employees may act or react in an unexpected

way. They may sabotage the business plans. In fact management of employees is

more difficult than management of any other resource. HRM is a strategic source of

competitive advantage that is more sustainable. The linkage between HRM and

competitive advantage will be discussed in Chapter 21. Then, you will be able to

understand the importance of HRM further. The above discussion indicates five

reasons of why HRM is of very importance for an organization.

1. Human resources are the most important resource that managers utilize to

achieve goals of an organization.

2. Quality of other functional fields of management heavily depends on quality

of HRM in an organization.

3. HRM is a vital responsibility of every manager in an organization.

4. HRM contributes to organizational success and then societal success.

5. Management of employees is more difficult than managing other resources.

Exhibit 1-2 Arguments Justifying Every Manager as a Human Resource

Manager

From the point of definition of Manager

Manager is an employee who performs management that refers to efficient and effective utiliz ation

of resources to achieve goals and objectives of an organization. Resources include men & women,

machines, materials, money and methods (also information, time, intangible assets etc.). Manager

will have to utilize efficiently and effectively men and women (people at work) in order to achieve

goals of the organization.

Thus, every manager becomes a manager of human resources.

From the point of definition of Management

Management is the art and science of getting things done through and with other people. If a

manager has to get things done through his/her people (subordinates) and with subordinates, he/she

has to manage subordinates. Every manager has subordinates to be managed.

Thus, every manager becomes a Human Resource Manager.

From the point of functions of Management

Typically a manager has to perform several functions such as planning, organizing, staffing, directing

and controlling. Staffing involves recruitment, selection, hiring and induction. Directing involves

motivation, leadership, and communication. These are under the sphere of HRM.

Thus, every manager becomes a Human Resource Manager.

From the point of analysis of the word of 'Management'

The term 'Management' can be analyzed as follows:

Manage……………men………….t (tactfully) from Dr. Davar

Manage…..men and women tactfully and strategically.

The analysis indicates that management is not anything else other than HRM.

Thus, every manager becomes a Human Resource Manager.

From the point of Managerial Skills

Generally there are three types of managerial skills, i.e., conceptual skills, human skills and technical

skills. Human skills include understanding people at work and being able to work well with them. It

refers to the ability to communicate, motivate, and lead employees individually and c ollectively.

Soft HRM is applied here.

Thus, every manager becomes a Human Resource Manager.

From the point of Management Roles (Henry Mintzberg, 1975, as in Chandan, 1997)

There are 10 managerial roles under three categories.

Interpersonal roles: 1. Figurehead, 2. Liaison, 3. Leader

Informational roles: 4. Monitor, 5. Disseminator, 6. Spokesperson

Decisional roles: 7. Entrepreneur, 8. Disturbance Handler, 9. Resource Allocator, 10. Negotiator .

Apparently 6 roles are in the field of HRM. Thus, every manager becomes a Human Resource

Manager.

Figure 1-4 Contributions of HRM

Viewpoints of Human Resource Management

A viewpoint is a standpoint that refers to the way of thinking about a thing in

particular. In this context, a viewpoint is a way of thinking about HRM. There are

several viewpoints (alternatively called approaches) of HRM. Four viewpoints were

presented by Werther and Davis (1989) and Werther et al (1985) and they are human

resource approach, management approach, systems approach, and proactive

approach. Strategic, soft and hard approaches are added.

Human Resource Approach

HRM is the management of people at work in an organisation. Human resources are

not a mere factor of production or a resource just like other resources such as money,

materials, machines and methods. Human resources are unique as they have

exceptional characteristics which are missing from all other resources. They are

animate, active and living; possess the ability to think, feel and react ; possess the

ability to influence on determining their cost (wage/salary); possess the ability to

organize (as unions, teams etc.); their behaviour is complex and may be

unpredictable; ha ve the ability of creativity and innovation; and make decisions in

HRM objectives,

strategic goals &

generic purpose

Efficient and

effective utilization

of employees

Efficient and

effective

utilization of

limited resources

Achievement of

Organizational

Goals

Meeting

societal needs

and wants

respect of all other resources. Thus human resources have to be managed

professionally, legally, and ethically. The importance and dignity of human beings

should not be ignored for the sake of expediency (Werther and Davis, 1989). Human

beings should not be used to achieve employer‟s objectives only. Each human being

has a personal life that has personal goals and tries to endeavour to accomplish them.

Major way of accomplishing personal goals is the employment-doing a good job.

Only through careful attention to the needs of employees do successful organisations

grow and prosper (Werther and Davis, 1989).

Management Approach

As discussed previously, HRM is a responsibility of every manager irrespective of

his/her field of interest and specialisation. If the organisation has a human resource

department led by a human resource manager, it has to serve all managers, non-

managers and departments through its expertise. Every manager has to do HRM

functions relating to management of his/her subordinates. In the final analysis, the

performance and well-being of each employee is the dual responsibility of that

employee‟s immediate supervisor and the human resource department (Werther and

Davis, 1989).

Systems Approach

HRM is viewed as a system of interrelated functions. Each HRM function affects

some other HRM functions. For instance, job analysis affects recruitment, selection

and pay management. When human resource activities are involved as a whole, they

form an organisation‟s human resource management system (Werther and Davis,

1989). A system of HRM exists when all the HRM functions are related. Whether and

Davis (1989) present two purposes of systems thinking. One purpose of system view

is to influence the decision maker to recognize the interrelationship among HRM

functions. When a decision is made its implications or influences on other HRM

functions will have to be examined. This will enable the decision maker to make a

good decision that has no or least negative impact on other HRM functions.

Also another purpose of systems thinking is to require the decision maker to

recognise the system‟s boundaries which make the beginning of its external

environment. HRM is an open system that is affected by the external environment

that is composed of various forces which have direct or indirect influences on th e

organisation and its HRM. Forces, i.e. labour law, trade unions, education systems,

training systems, employee markets etc affect HRM.

Proactive Approach

Being proactive means acting before a problem occurs. Being reactive means acting

after a problem occurred. If relevant actions are taken in order to fill a job vacancy in

anticipation of that it will occur by the beginning of next July, it is proactive. If

relevant actions are taken in order to fill a job vacancy after it really occurred it is

reactive. By quoting from Westbrook (1980), Werther and Davis (1989, p. 25) write:

"Reactive human resource management occurs when decision makers respond to human resource

problems. Proactive human resource management occurs when human resource problems are

anticipated and corrective action begins before the problem exists. ….This proactive approach

improves productivity by minimizing the resources needed to produce the organisation's goods or

services."

Proactive HRM is recommended to follow whenever it is possible. Of course there

may be situations where problems arise suddenly and no time is available to anticipate

(examples: sudden resignations, sudden accidents, unexpected diseases etc.). These

situations require the reactive approach to HRM be used.

Strategic Approach

Strategic approach to HRM is a recent development in the discipline of HRM. It has

four features which are (1) HRM is a broad approach to managing people at work

based on a philosophy of HR; (2) HRM is a major source of competitive advantage.

It links to competitive advantage of the organization significantly; (3) HRM

policies/functions cohere within themselves and with other functional fields of

organisational management; and (4) HRM is fully integrated with the strategy and

strategic needs of the organisation. HRM is called strategic HRM from this viewpoint

and the purpose is to generate or enhance competitive advantage or support

achievement of strategic business needs/goals. This aspect will be discussed in

Chapter 21 in detail.

Soft Approach

Soft approach involves managing people at work with kindness and care of their

feelings and expectations. Employees are to be managed humanely. Superior is to be

gentle and should not have force or violence over his/her subordinates. Managing

employees through positive attitudes and good character (excellence in morality)

occurs in this approach.

Hard Approach

Hard approach involves managing people at work with personnel schemes. Superior

is to be objective and should not have personal preferences or relationships over

his/her subordinates. Managing employees through personnel policies, procedures,

rules, and budgets occurs in this approach. There are HRM schemes with regard to

almost all HRM functions formulated within the organisation and all HRM decisions

are made as per these schemes. In other words these schemes are implemented in

order to make decisions with regard to managing employees.

These approaches are useful for managing people at work. They provide

complementary themes to be pursued. Each approach stresses an important

consideration that can be applied in HRM. Though the approaches are different but

together they form a complete or better whole. See Figure 1-5.

Figure 1-5 Seven Viewpoints of HRM

Consideration: As human

resources are unique they have

to be managed professionally,

legally & et hically.

Consideration: HRM is a

responsibility of every

manager.

Consideration: HRM is an open

system of interrelated functions,

each of which affects others

directly or indirectly and is

influenced by the external

environment.

Consideration: HRM

decisions are to be made

proactively.

Consideration: HRM is to

be linked with business

needs.

Consideration: Manage

people at work with

kindness and care.

Consideration: Manage

people at work objectively

through personnel schemes.

Fields of Human Resource Management

Fields of HRM refer to areas of HRM or major systems of HRM. Under functions of

HRM 18 functions have been mentioned. An area consists of several functions and a

major work for which a separate HRM specialist can be employed.

Jobs are created as individual assignments so as to perform the main work of the

organisation. Sometimes designed jobs need to be redesigned so as to adjust to new

changes. Jobs should be meaningful from the point of productivity and employee

satisfaction. Activities concerned with systematically arranging and rearranging tasks,

duties and responsibilities into jobs are called under the label

Job Design

. These jobs

and ideal job holders need to be studied in order to ascertain job requirements. The

systematic attempt of collecting, organizing and recording information with regard to

jobs available within the organisation and ideal persons needed to perform those jobs

successfully is called

Job Analysis

. The organization has to determine systematically

future human resource needs and then steps to achieve those needs. Activities

involved in determining the types and numbers of employees needed for a certain

future time to achieve business goals and deciding the means of meeting the future

demand for employees are called

Human Resource Planning

. Job design, job

analysis and human resource planning are grouped and named as Employment

Planning.

Another area of HRM is Staffing . This area consists of

Recruitment, Selection,

Hiring

and

Induction

. The organization has to find suitably qualified and motivated

job seekers and attract them as job applicants to apply for the job vacancies. Then it

has to choose more appropriate job candidates to fill the job vacancies. Then it has to

appoint those selected job candidates to the posts and enter them into employment

contract. New employees will have to be introduced to the job, job environment,

organization and relevant personnel.

For a particular period of time, a need of evaluation of how well and how far

employees have worked their jobs arises for making various decisions relating to

them. This function is called

Performance Evaluation

. Based on performance

evaluation, employees will need to be given job-related new knowledge, skills and

right attitudes in order to perform current jobs properly and prepare them for future

jobs of greater responsibilities. This function is

Training and Development

. New

career goals, opportunities and paths will have to be designed and implemented for

motivating and developing employees, increasing their commitment and job

involvement, and also improving employee productivity. This function is referred to

as

Career Management

. These three functions are taken together to be called as

Human Resource Development.

Another area of HRM is Rewards Management that is composed of

Pay

Management, Welfare Management,

and

Incentives Management

. The

organization has to develop, implement and maintain a base pay system that is fair.

Also it has to perform activities involved in the development, implementation and

on-going maintenance of a fair and effective system of facilities and comforts to

enhance standard of living of employees. In addition, a fair and adequate system of

incentives will have to be developed, implemented and maintained continuously.

Other HRM functions are

Employee Movements

(managing promotions, transfers,

lay-offs etc. in the right ways at the right times);

Health and Safety Management

(management of activities involved in creating, improving and maintaining total

health and safety of employees);

Discipline Management

(managing activities

involved in planning and controlling behaviour of employees in compliance with

established rules and regulations);

Grievance Handling

(identifying and solving

discontents arising from feelings of injustice felt by employees in connection with

work environments and personal life aspects) and

Labour Relations/Labour-

Management Relations

(managing all interactions between management and trade

unions). These functions are viewed together as another area of HRM which is called

Employee and Labour Relations.

Thus, HRM is viewed as a system consisting of sub systems which are called areas or

fields. The model of HRM presented in this book gives eighteen HRM functions

which have been classified as five areas. A separate Chapter has been devoted to

discussion of each function of HRM. See Figure 1-6 for relevant Chapters of HRM

functions. Five areas of HRM will become five parts of this book. Se e Figure 1-7 for

fields and relevant functions of HRM.

This book is mainly based on this model of HRM. The book has 21 Chapters. First

Chapter and second Chapter are about the introduction to HRM and organizing and

staffing of HR Department respectively. These two Chapters will be the first part of

the book. Final Chapter, i.e. 21st Chapter is about Strategic HRM which will be the

seventh part of the book.

Figure 1-6 Functions of HRM and Respective Chapters

Human Resource

Planning

Chapter 5

Training & Development

Chapter 11

Performance Evaluation

Chapter 10

Career Management

Chapter 12

Welfare Management

Chapter 14

Pay Management

Chapter 13

Health & Safety Mgt

Chapter 17

Management of Incentives

Chapter 15

Employee Movements

Chapter 16

Labour Relations

Chapter 20

Discipline Management

Chapter 18

Grievance Handling

Chapter 19

Figure 1-7 Fields of HRM and Respective Functions of HRM

Summary

HRM is defined as the efficient and effective utilization of human resources to

achieve goals of an organisation. Its generic purpose is to generate and retain an

appropriate and contented human force, which gives the maximum individual

Employment

Planning



Job Design



Job Analysis



Human

Resource

Planning

Staffing



Recruitment



Selection



Hiring



Induction

Human Resource

Development



Performance

Evaluation



Training &

Development



Career

Management

Rewards

Management



Pay

Management



Welfare

Management



Incentives

Management

Employee &

Labour

Relations



Employee

Movements



Health & Safety

Management



Discipline

Management



Grievance

Handling



Labour Relations

contribution to organisational success. Improving employee productivity, employee

development, increasing quality of work life, ensuring legal compliance, and ensuring

customer compliance are strategic goals of HRM. It attempts to achieve seven

objectives, i.e., procuring right people at the right time to do the right jobs;

retaining the most appropriate employees within the organisation; getting and

improving organisational commitment of the employees; generating and enhancing

job involvement and organisational citizenship of the employees; motivating

employees; enhancing job satisfaction of the employees; and controlling the cost of

employees. There is a series of functions to be followed in order to accomplish the

goals and the objectives of HRM. These functions include job design, job analysis,

human power planning, recruitment, selection, hiring, induction, performance

evaluation, training and development, career management, pay management, welfare

management, management of incentives, employee movements, health and safety

management, discipline management, grievance handling, and labour relations. A

model of HRM has been developed and presented showing interrelatedness and

interdependence among the HRM functions.

Responsibility of HRM rests with every manager of the organisation. When the

organisation employs an expert in HRM there will be dual responsibility existing

between other managers and the human resource manager. Five reasons of why

HRM is of very importance for an organization are: (1) Human resources are the

most important resource that managers utilize to achieve goals of an organization; (2)

Quality of other functional fields of management heavily depends on quality of HRM

in an organization; (3) HRM is a vital responsibility of every manager in an

organization; (4) HRM contributes to organizational success and then societal

success; and (5) Managing employees is more difficult than managing other resources.

Human resources, management, systems, proactive, strategic, soft, and hard are

viewpoints or approaches of HRM providing complementary themes to be pursued.

There are five fields of HRM and they include employment planning, staffing, human

resource development, rewards management and employee & labour relations.

Review and Discussion Questions

1. Define what Human Resource Management is. Discuss the importance of

HRM for an organisation.

2. "HRM has been defined in different ways. However there are several

common characteristics of HRM." Do you agree or not? Why?

3. (a) What is the Generic Purpose of HRM?

(b) What are the Strategic Goals and Objectives of HRM?

4. Present a model of HRM and describe and explain it.

5. "Responsibility of HRM rests with every manager in an organisation ."

Elaborate this statement.

6. "Though every manager in an organization cannot be considered as an

expert in HRM, every manager is treated as a manager of people at work."

Discuss.

7. "Viewpoints of HRM or HRM approaches are useful for managing people

at work. They provide complementary themes to be pursued. Each

approach stresses an important consideration that can be applied in

HRM." Discuss.

8. What is a field of HRM? Describe fields of HRM.

9. Explain the difference between Proactive HRM and Reactive HRM.

10. " Sri Lanka is a country where there is a highly felt need of developing

HRM." Do you agree or not? Why?

Case

SLT to introduce a New HR Management Culture

Sri Lanka Telecom (SLT) is to introduce a new Human Resource Development and

Management culture to make the 7,000-strong work force more efficient and to

harness maximum productivity from them. SLT‟s Chief Officer HR and Legal, I.C.L.

Bertus in an interview with The Sunday Times FT said that the restructuring of the

organization was made with the aim of transforming the SLT to a modern and profit

making telecom giant in the island successfully facing the challenges of other

competitors.

He added that the new structure comprising of 11 Chief Officers and 57 heads of

divisions equivalent to General Managers has been approved to streamline the

functions of SLT and competent, efficient and qualified persons have been appointed

with the approval of the Board of Directors.

He said that the new organisation structure was devised in December last year

following the models of world telecom organizations. It will help to enhance the

work of the SLT and fast track the services in accordance with the company‟s plan to

shift its focus from voice service to modern value added services like Internet,

Broadband, CDMA and WIFI wireless technology used in home networks, mobile

phones, video games and more.

Bertus said that employees should understand the needs of the institution and they

need to have the necessary technical training and support in order to reach the next

phase technological development planned by the SLT. He noted that work-related

skills of all employees should be improved and updated to meet new developments in

the telecommunication field. Therefore, he said, a new technology and e-learning

initiative has been launched for SLT employees to understand the soft and hard skills

that they need to develop in order to climb up the career ladder. Bertus added that

promotions of officers will be made on merit, qualifications and experience in a

transparent manner. He pointed out that action will be taken to ensure fairness in the

promotions process as well as to provide senior management of SLT with wide

information about performance of the business at the individual level. A new policy

will be introduced to select officers for foreign training as a priority and that both the

employee and the company will be benefited as each individual develops work-related

skills.

Referring to outsourcing of core services at SLT like drivers, and technical support

services, he said that it is purely a business decision and it will not affect the jobs of

SLT employees who are technical personnel and their work cannot be outsourced.

Over 4,000 technical staff is currently engaged in service at SLT and they are a

valuable asset, he said. Bertus revealed that the institution has taken a decision to

amicably settle at least 29 human right cases filed against the SLT by its employees as

the management is ready to look into this matter in a humanitarian angle.

Questions:

1. What are HRM functions being referred in this article?

2. Why is it not possible to do outsourcing technical personnel?

3. Why are there human right cases filed against the SLT by its employees?

4. What viewpoints of HRM is it possible to notice?

Source: This is an article written by Mr. Bandula Sirimanna published on Financial Times on Sunday,

March 30, 2008.

Critical Incident

National Carrier in Crisis: 30 Pilots leave Sri Lankan Airlines

Sri Lankan Airlines is facing a major crisis after 30 out of about 300 pilots have joined

other airlines, making the national carrier‟s task to operate its daily flights difficult. Sri

Lankan Airlines‟ Corporate Management Head Chandana de Silva told the Sunday

Times yesterday the national carrier found it difficult to run long hold flights given

the shortage of pilots, but the pilot exodus had not affected flights to close

destinations.

The crisis, which is likely to continue for a few more weeks, has forced Sri Lankan

Airlines to cancel two London-bound flights on Thursday and Friday. Mr. de Silva

said they took steps to reroute the passengers of the two flights in other carriers. He

said that the airlines was making all efforts to maintain the normal schedule despite

the pilot shortage. He said that they are in the process of recruiting new pilots but

added that it would take some time for the situation to return to normalcy. Mr. de

Silva said that it was not unusual for pilots to leave for other airlines seeking better

prospects.

The Sunday Times learns that pilots have been leaving at regular intervals with a few

more due to leave in the next few months. Among some of the senior pilots to leave

was Captain Ramesh Jayasinghe who left after citing reasons of harassment. Mr.

Jayasinghe with 15 years of experience was an instructor as well.

Questions:

1. What is the main reason for the crisis of the national carrier?

2. What is your course of solutions for the crisis?

Source: Adapted from the main news appeared in the Sunday Times, February 26, 2006

Skill Builder 1

Select any organization to which you have an access. Discuss with the Genera l

Manager or HR Manager with regard to the following:

(a) Purpose of HRM

(b) Goals and Objectives of HRM

(c) Functions of HRM

(d) Importance of HRM

Compare what you gathered from the discussion with what you had learnt from the

book. If there are significant differences, can you explain why? Prepare a report.

Skill Builder 2

Your boss comes to you and tells:

"I can‟t understand why these people can‟t understand the importance of HRM."

You respond:

"Why? Sir what happened? "

"They expect every thing from us. Several times I told them. We alone can‟t do this

HRM. Every manger has to support. We have prepared several good systems of

HRM. But they are not being carried out properly. You know why they are not being

carried out properly. Many managers don‟t support. They are not serious about our

HRM systems."

"Sir. I think we have to change the attitude of our managers, specially senior

managers about HRM."

"OK. Let us try. You are a recently passed out HRM graduate. Give me a report

telling what to do and why. I need it tomorrow. Can you make it tomorrow?"

"OK Sir, I can. "

"Good. I believe you can do it."

You are required to prepare the report.

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... An organization is a formal group of people with a common goal and the lifeblood of an organization is its employees who are right and therefore unique because they are animate, active and living; have the ability to think, feel and react; their value appreciates with the passage of time owing to new learning through education, training, and experience; they have the ability to influence on determining their costs such as pay, incentives, and benefits; they have the ability to organize as unions, teams etc.; their behaviour is complex and may be unpredictable; they have the ability of creativity and innovation, which cannot be found in any other resources; and most importantly they make decisions in respect of all other resources (Opatha, 2009). It is the HRM that deals with effective and efficient utilization of personnel through a set of functions (Opatha, 2015) and indeed it is about managing employees of an organization in order to achieve its objectives. ...

... Goals refer to desired targets to be achieved in future and they may include increasing net assets of owners, enhancing employee development and satisfaction, maximizing customer satisfaction, achieving cooperative growth, increasing market share, fulfilling social responsibility, achieving financial stability, and increasing quality of the product. It was mentioned in the analysis of the definition (Opatha, 2009) that an organization may establish one or several or all of these goals or other ones not mentioned here. The word 'goals' can include any goal which is established by an organization. ...

... Effective utilization of HR, as mentioned in the original definition analysis (Opatha, 2009), means use of HR for organizational effectiveness, which is the extent to which goals of the organization have been realized. Today too I confirm and emphasize that every employee of the organization is to be utilized in order to achieve a certain organizational goal or relevant organizational goals. ...

• Henarath H. D. N. P Opatha

For the purpose of achieving three research objectives: (1) to present definitions of Human Resource Management (HRM) given by various appropriately qualified authors and make a brief descriptive analysis about the definitions; (2) to revisit and review the definition of HRM developed by me in 2009; and (3) to introduce a definition of HRM which is inclusive, this theoretical research paper was written. The desk research strategy was adopted and the study was carried out by the use of two non-scientific methods, i.e., authority to a greater extent and intuition to a lesser extent. 34 definitions directly mentioned and implied from 34 textbooks were presented. The findings of the descriptive analysis of the definitions were that the most of the definitions have similarity and no salient contradictory differences exist in their meanings implying that the nature of the subject of HRM is not controversial but is generally agreeable or nondebatable. Further the descriptive analysis yielded a list of 20 characteristics of HRM. The revisit to the definition of HRM given by the author of this paper in 2009 resulted in an assertion that it is valid at present and the future too. However, in view of the possibility of criticizing the definition owing to lack of inclusion of strategic, partnership, and sustainable perspectives, an inclusive definition was formulated and presented.

... For that, organizations have to consider employees' expectation and requirements in order to full fill it, the overall responsibility of this task of any organization comes under the Human Resource Management. According to Opatha (2009) "Employee welfare management is one of the most important human resource management functions". Organizations are concerned about introducing and carrying out various welfare programs now or in the future, not only with past and current experience, but also with developing trends. ...

... According to Opatha (2009): "Always welfare is not because it improves productivity. However, it is arranged in a way that it leads to improve JS of the employees, through loyalty of the employees, and then to reduce employee absenteeism and turnover that will result in improving employee welfare, improves employee productivity". ...

... To enhance job satisfaction of employees is one of the objectives of HRM (Opatha, 2009). Job satisfaction refers to the degree of enjoyment an employee feels towards his/her job being performed. ...

... Generation and enhancement of job involvement and organizational citizenship behaviour is also an objective of HRM (Opatha, 2009). Opatha 2009, p.11) writes: ...

• Henarath H. D. N. P Opatha

This is the seventh Chapter of the book titled Sustainable Human Resource Management: Expanding Horizons of HRM written by Prof. Dr. H.H.D.N.P. Opatha, Senior Professor and Chair of HRM, Department of HRM, University of Sri Jayewardenepura, Sri Lanka. Published in 2019 ISBN: 978-955-52907-1-5

... A major reason for low productivity in organizations operating in Sri Lanka is bad or poor Management (Akuratiyagamage and Opatha, 2004). Quality of other functional fields of Management depends heavily on quality of HRM being practiced in the organization (Opatha, 2009). Human Resource Management (HRM) refers to the functional field of Management, Business Administration or Organizational Management which is concerned with managing employees in an organization in order to achieve organizational vision, mission, and goals. ...

... As the textbook numbered 19 the book written by Opatha (2009), the author of this nonconventional research paper was utilized. 21 chapters are in the textbooks and in fact the chapters are comprehensive in order to give concepts, principles, processes, theoretical formulations, and examples. ...

• Henarath H. D. N. P Opatha

For the purpose of achieving four research objectives: (1) to describe general meaning, types, and utility of applications in Human Resource Management (HRM) useful for teaching and learning purpose; (2) to explore, record, and classify applications in HRM presented in the textbooks on HRM selected for the study; (3) to determine the importance of the classified applications in HRM as per the intensity of usage; and (4) to propose some implications of the findings in the way that will contribute theoretically and practically. The adopted research strategy was the desk research strategy and the study was carried out by using two non-scientific methods, i.e., authority to a greater extent and logical beliefs to a certain extent. By adopting seven conditions 29 authoritative textbooks were utilized and from which a considerable number of applications were explored and recorded. They were logically classified into 15 applications which were arranged in the order of importance in terms of the intensity of usage. Finally, implications were given briefly.

... Human Resource Management is about managing employees efficiently and effectively to achieve organizational goals and objectives (Opatha, 2009). Sharma and Sharma (2017) have indicated that employees in any organization are significant investment for organizations as they have the power to impact organizational effectiveness. ...

• H.H.D. Pooja Jayani Opatha

This paper aims to explain that big data in HR analytics which refers to datasets that are not only big, but also high in variety and velocity might not derive the best HR solutions at all the time due to some other considerable factors. Further it describes some important aspects in the literature of HR analytics. Qualitative approach has been utilized to present the facts regarding HR analytics based on the evidences prevailing in the existing literature. Arguments and the conceptual model were developed incorporating author intuition as well in addition to the secondary data sources. Data driven conclusions yielding out of the HR analytics process i.e., identify the objectives/questions, decide metrics, collect data, analyze data and make the final decision, are indispensable to make strategic decisions especially relating to HR issues. However, most of the times, derived solutions/conclusions need to be adjusted considering the factors i.e., financial stability of the organization, current business environment factors, competitive organizations' behavior, business strategy, capabilities of employees/managers etc. rather accepting the data driven HR solutions as it is. Originality of this paper is high as there is a lack of research papers in the literature supporting this nature of topic "Can Organizations Solely Depend on HR Big Data Driven Conclusions in Making HR Strategic Decisions all the Time?"

... Previous researchers revealed that job satisfaction always linked with positive work outcomes such as productivity, organizational commitment, and reduced absenteeism, and turnover, customer satisfaction, and organizational performance (Opatha, 2009 [50]). In other words, the absence of job satisfaction will result to deeper consequences such as low job performance and failure to achieve organizational goals (Rast and Tourani, 2012) [51]. ...

An empirical knowledge gap has been observed regarding the relationship between employee happiness and job satisfaction in higher education sector of Sri Lanka. Hence, in order to fill this empirical knowledge gap, this study was carried out with the objectives of find out the levels of employee happiness and job satisfaction among the academic staff and explores the relationship between employee happiness and job satisfaction of academic staff in selected state university in Sri Lanka. The data of this study have been collected from 57 academic staff in selected state university in Sri Lanka through the structured questionnaire. The data were analyzed with univariate and bivariate analyses. The findings of the study revealed that happiness and job satisfaction are in high level among the academic staff in surveyed university. And also, findings of the study stated that there is a significant and positive relationship between employee happiness and job satisfaction. This study suggested that degree of employee happiness can improve the job satisfaction.

... The key capital of HRM is human capital. According to Opatha (2009), HRM is mainly focused on efficient and effective application of human resources in order to achieve organizational goals and objectives. The current pandemic situations due to COVID-19 have created many problems for the entire world especially for all organizations (public and private). ...

• Anthonypillai Anton Arulrajah

The main objective of this paper is to explore the role of Professionals of Human Resource Management (HRM) in preventing and controlling of COVID-19 in the workplaces. In order to achieve the objective of the review, a literature review was conducted by using available literature. The finding of this review revealed that the Human Resource Professional (HRP) in the organization can play four main roles, such as informational, resource facilitation, advisory and change agent in preventing and controlling of COVID-19 in the work places. The degree and intensity of performing these roles by HRM departments or HR professionals of the organizations may contribute to reduce and eliminate the 15 types of fears and stress by corona (SBC) identified by Opatha (2020) among the employees of the organizations.

This research was conducted to assess how the use of human resource information system (HRIS) affects HR functions of the organization. HRIS research is very limited in Fiji and the Pacific as a whole therefore there was a need for this study. This chapter uses the DeLone and McLean HRIS success model integrated with some incumbent HRIS factors providing a comprehensive view into vital factors affecting HRIS in the HR department. A standardized questionnaire was used to collect quantitative data. The results from this research showed there were a total of six different factors that affect the use of HRIS in the HR divisions of government organizations. These factors are: usefulness, a faster decision making process, system quality, ease of use, subjective norms such as social and peer pressures, and system unification. The effect of these factors was measured which showed that system quality, service quality, and the ease of use has a positive impact.

• W Clarke

Human resource management (HRM) demands effective coordination and control over a wide range of activities by management committed to the pursuit of sound human and industrial relations policies. The paper includes a brief comment on the contribution of behavioural and social systems studies, and the practical application of HRM is discussed in broad outline. Finally, a plea is made to the DP manager that whilst carrying the full burden of technological development, he/she should not neglect those other aspects of the management task that contribute to the overall performance of a DP unit.

• George F. Thomason

Examines the broad approaches to the acquisition and utilization of human resources at different phases in the growth of industry. Concludes that at each stage some relationship exists between business strategy and human resourcing responses made to external labour market conditions, even if the human resource strategy is not always fully integrated with the business strategy. Suggests a four-fold classification of approaches to managing human resources as a device for organizing thinking about these phenomena.

Canadian Personnel Management and Human Resources

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Chandan, J.S. (1997), Management Theory and Practice, New Delhi: Vikas Publishing House PVT Ltd.

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Davar, R.S. (1991), Personnel Management and Industrial Relations, New Delhi: Vikas Publishing House PVT Ltd.

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Dunham, R.D. (1984), Organizational Behavior, Homewood, Illinois: Richard D. Irwin, Inc.

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Ivancevich, J. M. (1992), Human Resource Management, Homewood: IRWIN.

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Ivancevich, J. M. (2008), Human Resource Management, New Delhi: Tata McGraw-Hill Publishing Company Limited.

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Mathis, R.L. and Jackson, J.H. (2000), Human Resource Management, New York: South-Western College Publishing.

Fundamentals of Human Resource Management 6th Edition Chapter 2

Source: https://www.researchgate.net/publication/281935453_Human_Resource_Management_Personnel