HR practices today
LAVANYA AJESH
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Management institutes face the challenge of reorienting their courses to reflect newer HRM concepts. The department of management studies at IIT-Madras has attempted such changes.
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Photo: K. Murali Kumar.
RELEVANCE OF HR: The challenge of HR managers is to hunt for human talent and make sure the company selects the right person for the right job.
Human Resource Management is much discussed in today's business world. But how well is it understood? In a world where people's competencies and skill sets are described in paragraphs rather than in a few words and where media reports of salaries make us do a double-take to ensure that seeing is indeed believing, it is becoming increasingly challenging to manage this high potential we consider as the country's asset.
Over the past two decades, the world saw a complete makeover in the way Human Resource Management in organisations was defined, but in India, the change has been more prominent in the last decade or so, after liberalisation.
Today, managing the expectations and motivations of a skilled workforce has brought with it attendant complexities in terms of the need for robust HR practices and organisational procedures.
Earlier considered a support function for any business, HRM today is required to take on a more strategic role in order to align itself with the organisation's business strategies. Hence, the HR manager is expected to take on the mantle of a business partner along with managers of other line functions, in driving the firm's strategies.
The shift in focus from traditional HRM to strategic HRM was inevitable. Competitive advantage for an organisation lies not just in differentiating a product or service or in becoming the low cost leader but in also being able to tap the company's special skills or core competencies and rapidly respond to customer's needs and competitor's moves. HR management can play a role in identifying and analysing external opportunities and threats that may be crucial to the company's success. It is in a unique position to supply competitive intelligence that may be useful in the strategic planning process.
Human Resource Accounting
Over the years, some of the traditional HR practices have been revisited and analysed to evaluate their suitability in today's world. One such major practice is the concept of Human Resource Accounting (HRA). Initially, one might hesitate to accept a concept which tries to put a monetary value to human beings. How does one attach a number to a person's capabilities? However, HRA represents a way to gauge how strong and profitable an organisation's workforce is. Organisations have been claiming that their employees are their most valuable assets.
The spate of downsizings and increasing job insecurity notwithstanding, the resurgence of interest in the area of HRA is perhaps testimony to this approach, where investments in human resources are now included as assets in a company's balance sheet, rather than expense heads in their profit and loss statements.
The signals are clear — the employee is an asset who can be groomed to bring in future profitability — an asset which can define the company's image in the market today. HRA also involves accounting for investment in people and their replacement costs, as also the economic value of people in an organisation. A trend yet to catch up in the Indian industry, with a few exceptions such as BHEL, Infosys, SBI and Reliance industries, it has been extensively embraced in the West.
Competency mapping
With the growth of the industries in the `knowledge-verticals', human talent is undoubtedly the most important asset today. To make sure that a company selects the right person for the right job, and manages him/her carefully, processes like competency mapping are gaining ground. Competency mapping is a process of identifying key competencies for a particular position in an organisation, and then using it for job-evaluation, recruitment, training and development, performance management, and succession planning. In conjunction with the balanced scorecard, this can be an extremely robust tool to manage an organisation's performance. Despite the growing level of awareness, however, in India, competency development and mapping still remains in the nascent stages of implementation.
As far as the HR function is concerned, the time has perhaps come where it needs to be treated as a line function with every manager having HR activities as part of his line responsibilities, rather than treating HR as a separate, support-providing activity only. Today's manager is expected to wear multiple hats — that of a leader, internal change agent, coach, counsellor, mentor — in addition to his/her `technical' responsibilities. This would entail that every manager, irrespective of his/her functional area of specialisation, would have to have a thorough grounding in concepts and processes of HR.
At the IIT-Madras Department of Management Studies, the curriculum followed in the HR area of specialisation reflects a response to these changing trends, where, in addition to incorporating the newest trends and best practices in the traditional HR course curriculum, newer courses in cross-cultural management, change management, and international HRM attempt to familiarise the students with new concepts.
It has become fashionable among organisations to use terms such as HRD (Human Resource Development) and HCM (Human Capital Management) as being representative of the changing trends in HR practices. Merely renaming the function is however not going to be sufficient. The need of the hour is for premier institutes such as the IIMs, IITs as well as other professional institutions to rise to the occasion and re-design their curriculum and pedagogical methods in consultation with the industry, in order to train their students to meet the changed expectations of the industry.
The author is MBA student at IIT-M. She acknowledges the inputs from Dr. Sanghamitra Bhattacharyya of the Department of Management Studies, IIT Madras.
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