Understanding the approaches towards personnel management

This report is written to produce the approaches of personnel management and Human Resource management that are being practiced in the organization TATA CONSULTANCY SERVICES (TCS). In the first few sessions, philosophy behind Personnel management and Human Resource Management and concepts of Personnel Management and HR Management are given to have a back ground and view to understand what Personnel Management is and what is HR Management and also the contextual differences .How HRM is important and how it is strategic business contributes in the overall strategies of an organization.

This highlights the main functions and HR systems which directly influence the organization structure, employee behaviors and performance, development of human capital and also on the cost effectiveness from the traditional ways to recruit, manage and control the behavior of employees to give a satisfactory and continuous improving performance to achieve the organizational goals.

Later this report illustrates differences of Personnel management and HRM in terms of beliefs and assumptions, strategic aspects, line management and key level performances. For example, diversity in work place, Learning and Development programs, Leadership, EVA model, Incentive Schemes, etc., in relation with other functions of the organization and comparisons with other organization WIPRO.

HRM is now more important than ever. Organizations increasingly compete each other on the basis of effective people management and development by tapping into the ideas of workers and organizing their work in more efficient ways. This relies on line managers in day to day interactions with people who need the support of HR specialists internally or externally to the organization to help them to make sense of what is happing in the field.

HRM is basically the replacement of Personnel Management which was previously in practice to manage and maintain the employees working within the organization to achieve its objectives. Some experts assert that there is no deference between these two terms. They state that the two terms can be used interchangeably with no difference in meaning. In fact the terms are used inter changeably in job descriptions.

For those who recognize a difference, the difference can be described as Philosophical. Personnel Management is more administrative in nature dealing with pay role, compiling with employee law, and handling related tasks. HRM on the other hand is responsible for managing a work force as one of primary resources that contribute to the success of an Organization. When a difference between Personnel Management and HRM is recognized, HR is described much broader in scope than Personnel Management. HR is said to incorporate and develop personnel management tasks, while seeking to create and develop terms of works for the benefit of the Organization.

A primary goal of HRM is to enable employees to work to a maximum level of efficiency. Personnel Management includes administrative tasks that are both traditional and routine. By contrast HRM involves ongoing strategies to mange and develop an Organization’s work force. It is proactive, as it involves the continuous developments of functions and policies for the purpose of improving a company’s work force. Personnel management is often considered an independent function of an Organization. HRM on the other hand tends to be an integral part of overall company’s function. Personnel Management is typically the sole responsibility of an organization’s Personnel Department.

With HR all managers are often involved in some or the other manner, and achieve goal may be to have managers of various departments develop skill necessary to handle personnel related tasks. As far as motivators are concerned Personnel Management is typically seeks to motivate employees with such things as compensation, bonuses, rewards, and the simplification of work responsibility.

From Personnel Management point of view employee satisfaction provides the motivation necessary to improve job performance. The opposite is true of HR. HRM holds that improved performance leads to employee satisfaction. With HR, work groups, effective strategies for meeting challenges, and job creativity are seen as the primary motivators.

According to Bach (2005) for almost two decades analysis of the employment relationship has focused on the many uncertainties surrounding the emergence and consequences of Human Resource management. One approach has been to view HRM as involving particular strategies an approach towards the management of labor, with analysis centering on the breadth and scope of HR policy. HRM has been defined more broadly as a subject of study. This has raise many questions about the differences between HRM and Personnel Management both in terms of the HR practices used and also whether the underlying values and concerns of HRM are distinctive and managerialist in their orientation.

These have been reflected in the evolution of Personnel Management Practice. At the end of 1980s there was a general recognition that competitive pressures were forcing employers to review Personnel practice.

The Institute of Personnel Management has published the definition for Personnel management as ‘Personnel Management is that part of management concerned with people at work and with their relationships within an enterprise. Its aim is to bring together and develop into an effective organization the men and women who make up an enterprise and, having regard for the well being of the individual and of working groups, to enable them to make their best contribution to its success.’

In particular, Graham and Bennett (1995) argued that, Personnel Management is concerned with the development and application of policies governing,

Human resource planning, recruitment, selection, placement, and termination.

Education and training, career development

Working conditions and employee services

Formal and informal communication and consultation both through representatives of employers and employees and at all levels in the firm.

Negotiation an application of agreements on wages and working conditions.

According to Cole (2003) until 1990s, Personnel Management in practice was much about handling collective relationships with employees and their representatives as about mediating individual employment relationships.

BOARD OF DIRECTORS

SENIOR LINE MANAGERS

JUNIOR LINE MANAGERS

UNIONREPRESENTATIVES

TRADE UNION OFFICIALS

INDIVIDALEMPLOYEES

(Personnel Management’s stakeholders—–an Industrial Relations era)

Cole (2003)

According to Cole (2003) in terms of stake holder relationships, main pressures on a personnel manager came principally from the Managing Director, Trade Union Representatives, and Line Manager colleges. The network of relationships that surrounded a senior Personnel Manager in the mid 20th century as predominantly as shown in the figure above.

The board and especially the chief executive would be looking to the personnel manager to ensure that employee relations were peaceful and predictable. The conditions therefore in which Personnel Management was conducted in those times could usefully be described as highly regulated, dominated by considerations of relative power between management and trade unions, and inflexible in terms of labor mobility.

Personnel manager’s in1970s and 80s were much more concerned with the smooth running of operations than with making proposal for Change. During those same decades the concept of Organizational Development (OD) had emerged. OD means the collection of techniques aimed at improving organizational effectiveness by stimulating collaborative efforts at both strategic and operational levels, thus minimizing conflict and reducing inflexibility in labor force. The introduction of OD was aimed at change, albeit as envisaged by the top management sought and planned on a mutual rather than arbitrary basis.

Cole (2003)

The situation but changed radically in late 1980s when several external factors combined to make a major impact on work place relationships. These factors are,

Trade union power in conservative areas as printing,

Conservative Government began to re structure Employment Legislation,

‘Closed shop’ arrangement,

Collapse of domestic and global markets.

Later the economy improved, and as the effects of new employer friendly legislation began to tae hold, Businesses every where were able to place the customer at the forefront of their stakeholders rather than their employees. Thus developed the concept of customer relations.

1990s came to be seen as the ‘decade of the customer’. Thus brought forth a need to redefine ‘Personnel Management’ so that it better reflected the contemporary focus on customers and their needs, and also the need to adapt to changing conditions in the external market place. Not only customer and their needs are important but also actions of competitors. It is in the new environment that the term ‘Human Resource Management’ sits more comfortably for many people than ‘Personnel Management’.

Foot and Hook (2008)

2.2. Human Resource Management

HRM is a Management function that helps managers Plan, Recruit, Select, Train, Develop, and Remunerate and maintains members of an organization. HRM is the latest nomenclature used to denote Personnel Management.

HRM has four Objectives, Social, Organizational, Functional, and Personal. Two issues arise when one talks about the organization of HR function.

Status of HR department in the overall setup and

Composition of department it self.

Both depend upon the scale of operations and attitude of top management to wards HRM.

The Personnel or HR manager must be fair and firm, tactful and resourceful, sympathetic and considerate, knowledgeable about labor laws, have a broad social out look, and have competency and confidence. Academic qualifications are also desirable. These qualities will make him or her successful in his or her profession.

KAY, R. and BANFIELD, P. 2008

Functions and Objectives of HRM

The primary objective of HRM is to ensure the availability of competent and willing workforce to an organization. Beyond this there are four other objectives too. These are four fold, namely, Social, Organizational, Functional and Personnel Objectives.

Objectives of HRM

Social Objectives To be ethically and socially responsible to the needs and challenges of the society while minimizing the negative impact of such demands on organization. For example, the society may limit HR decisions through laws that enforce reservation in hiring and laws that address discrimination, safety or other such areas of social concern.

Organizational Objectives To recognize the role of HRM in bringing about organizational effectiveness, HRM is not an end in itself. It is only a means to assist the organization with its primary objectives. Simply stated, the department exists to serve the rest of the organization.

Functional objectives To maintain the department’s contribution at a level appropriate to the organization’s needs. HRM has only functional value and should not become too expensive at the cost of the organization it serves

Personnel objectives To assist employees in achieving their personnel goals at least insofar as these goals enhance the individual’s contribution to the organization.

Functions of HRM

In order to realize the objectives stated above HRM must perform certain functions. In general there is co-relation between objectives and functions. This can be seen in the table.

HRM objectives and Functions

HRM Objectives

Supporting Functions

1.social objectives

Legal compliance,

benefits,

Union management relations.

2. Organizational objectives

Human Resource planning,

Employee relations,

selection,

training and development,

appraisal,

placement,

Assessment.

3. Functional objectives

Appraisal,

placement,

assessment

4. Personnel objectives

Training and development,

appraisal,

placement

compensation,

Assessment.

Model of HRM

3. Company profile -TCS

Tata Consultancy Services (TCS) is a part of TATA group, India’s largest conglomerate with diverse business interests. It is a global IT services consulting and outsourcing company. It started its operations in 1968, as a provider of data processing services to the other companies in the Tata Group. In the early 1970s, TCS began providing IT application development and maintenance services to customers in developed markets, such as US. And U.K. It is the first and largest software R&D center in India. It represents high levels of excellence, integrity and ethical values.

Sticking on to the tested and tried procedures does not qualify the existence of a company in the present environment, which is never the same on two consecutive days. It takes timely alterations in its HR practices to keep it abreast with the others in the race. When it comes to TCS, not just being in par is key, but leaping forward at a staggering pace ahead of its competitors holds the key.

(www.tcs.com)

3.1. Diversity in Workplace

The company has adopted the diversified workforce approach in order to create a comfortable environment for clients and employees who work along with it on specific projects. The HR parishioners who make a large hue and cry about bringing out the best using a diverse workforce can really quote TCS as an example.

One of the chief reasons for the diversity drive was the 9/11 disaster. The move was initiated as a risk mitigating mechanism wherein, the company does not have to take the risk of losing its entire workforce due to a single catastrophe.

TCS has operations in 47 countries with 160 offices world wide and employs about 85600 people among them 10% are foreigners.

3.2. HR Policies

TCS gave utmost importance to its Human Resource function. The company is believed in the premise that ”role of HR is to provide the context for energizing and developing people to play effective roles in ensuring that TCS becomes one of the top global consulting firms.”

3.3. Human resource planning

Human resource planning involves getting right people into right places at right times so that organization will meet its goals.

Clients’ needs are collected first at the central level, and then they are considered geography wise, branch wise, and project wise respectively.

3.4. Job analysis

TCS has attempted to create segments solution to fit the needs of different layers of job opportunities with in its environs. This can be achieved on the basis of

Activity to be performed

Skills needed for that position.

3.5. Recruitment and Selection

Internal and external recruitment depends upon

Man power cost,

Effectiveness,

Past data.

External recruitment can be done by on camps or off campus placements. Off campus recruitment includes

Advertisements,

Associate referral process,

TCS job portal,

Consultants.

Selection procedure

It starts with a written test, and ends with HR interview. Those who passed the written test will be forwarded to technical interview and the succeed candidates will undergo HR interview.

For fresher;

For experienced;

3.6. Learning & Development (L&D)

L&D Mission – “To enhance the competency capital of TCS, through co-creation of learning experience continuously and consistently, so as to facilitate delivery of world-class human capability to the customer, enabling the company to achieve its vision.”

TCS invests about 4 per cent of its annual revenues in Learning and Development, to build competency capital within the company in cutting edge technologies, domain and functional areas. Special emphasis is placed on providing necessary learning interventions to associates with potential of being leaders in the company.

Thus, it is evident that focus is divided equally between the regular employees and managerial employees alike. All the learning programs are mapped to competencies and address learning needs at different proficiency levels. Learning and Development managers closely work with business to develop and deliver programs that will make our associates deliver value-for-money to customers.

(www.tcs.com)

Assessment centers are also being used by TCS. Inarguably, TCS is one of the real pioneers in the training. The state-of-the-art center in Thiruvanantapuram is by far the best than its adversaries. Several levels of learning are provided in TCS. Each of the levels is unique, aimed with varying objectives. The pro activity of the company comes to light, with the inclusion of newer modules as per the requirement.

Initial Learning Program (ILP)

TCS Initial Learning Program is designed to provide a smooth transition from Campus to Corporate environment. The program is designed to transform graduate engineers into IT Consultants with global mindset. The participants are put through a rigorous 47-day program that has good mix of technical skills and soft skills.

Continuous Learning Program (CLP)

Continuous Learning Program (CLP) is a manifestation of the company’s commitment to the continuous growth of associates, in line with the core value of Learning & Sharing. Programs under the CLP umbrella happen out of business strategies, project needs, technology and business directions and individual ambition, and span across Technologies, Domains, Processes and Soft-skills.

Leadership Development Program (LDP)

The program is to churn out the future leaders for the company. Associates are carefully assessed for leadership potential and then put through rigorous branded programs. TCS also encourages associates to attend various programs at leading B-schools across the globe.

Foreign Language Initiative (FLI)

Foreign Language Initiative is to help the associates to communicate effectively with the customers. Under this initiative, associates are encouraged to learn one or more foreign languages. This initiative also helps associates to use English effectively for business communication. This is highly beneficial in a company with a diverse workforce. The cross-cultural issues are shortened with the proper use of communication.

Workplace Learning

Apart from all these initiatives TCS promote “workplace learning”. Associates are encouraged to learn while at work. To facilitate this, TCS has subscribed a huge library of e-Learning courses and online books. The classroom session and e-Learning materials complement each other.

3.7. EVA & Compensation Management

An extremely competitive compensation scale, is rendered solidarity by a highly effective ‘economic value added’ (EVA) model, first of its kind to adopt the practice in India. It is a basis for measuring performance and bonus, and is measured at the enterprise and department levels. The EVA system calculates profits after considering all costs, including that of capital. If the revenues are in excess of the costs, including operating expenses, costs of developing and investing in the people, products and business, then value has been created.

The EVA Model

In giving shape to the EVA model, an organization needs to keep its focus towards the ultimate goal of aligning its people to the corporate mission, creating an entrepreneurial culture through an empowered work force, and building ownership with accountability.

TCS worked out an EVA framework to align corporate value with the performance of the constituent business units and the individuals who comprised these. It translated to a compensation model, where the employee had a share in the corporate pie with add-ons from the profits of the Business Unit and the Individual Performance Factor. At the individual level, an employee needs to know the drivers to tweak to enhance the EVA of the company, of the business unit, and his own contribution towards all these.

With the implementation of EVA based compensation, salaries of employees comprises of two parts. They are fixed and variable in the ratio of 70:30. Fixed part includes basic plus benefits. And the variable part of salary arrives after considering corporate EVS and business unit EVA and individual performance EVA also there is super argumentation after every 5 years.

3.8. Incentive Scheme

A comprehensive EVA-based Incentive Compensation Plan is designed for the employees. Building the incentive scheme requires a detailed exercise in arriving at the target EVA. The TCS model was defined backed by a market analysis and a study of 24 competitors, largely outside India.

The framework had specifications for target EVA, with carefully defined EVA intervals and provision for the positioning of zero EVA. The gradation continued through incentives corresponding target attainment, the double incentive.

4. Company PROFILE -WIPRO

Global provider of technology and business services. Wipro InfoTech is the first global software company to achieve level 5 SEI-CMM, the first IT Company to practice Six Sigma in India. Wipro believes that the HR processes and systems and the policies and procedures which support them are an integral part of HR strategies and are vital to the success of any organization. Wipro BPO has built substantial capability in ensuring the delivery of HR processes meeting the need of critical stakeholders of the human resource function – employee, CHRO, CTO and the CEO. Wipro offers an enduring partnership aimed at providing an enriching experience for all key customers.

(www.wipro.com)

4.1. Global presence

Currently its presence extends to 9 regional offices in India, and also in UAE, Taiwan, Malaysia, Singapore, Australia, and other regions in Asia Pacific and Middle East.

Spirit of Wipro

Intensity to win

Make customers successful,

Team, Innovate, Excel

Act with sensitivity

Respect for individual,

Thoughtful and responsible

Unyielding integrity

Delivering on commitments, Honesty and fairness in action

(Wipro -annual report 05-06)

4.2. Recruitment and selection

Sources of recruitment

Campus placements

Consulting firms

Internet

Advertisements

Associate referral process

Stage process

Sales and marketing people may work from home.

Wipro InfoTech has adopted a just in time approach to recruitment which would enable the company to optimize resourcing costs and at the same time make resources available ‘on demand’. Just-in-time recruitment is achieved through the funnel creation of qualified candidates required for the future projects.

(Financial Express.com)

4.3. Compensation and management system

Packages are designed in a way to accommodate for both basic and incentive components.

Packages are designed on the basis of recruitment and the experience

Employees on services side are given the option to take the full time job or part time. Pay packages are on the basis of the option chosen.

Training and development

In general two training programs a year.

Training stages

Additional training is also provided on

Ethics and values

Session and handling media

Standard responses

4.4. Performance appraisal

Wipro offers an integrated end to end performance management solution. This is based on global people processes drawn from best practices and helps organizations streamline their performance and evolution processes.

Wipro’s e-performance management solution not only helps establishing best practices in performance management, like 300 degree appraisal, MBO, but enables reduced performance management cycle time without compromising on sub process which are so critical to HR values, like work planning conference, work plan establishment, development plans and objective setting, interim review, overall evolution detecting performance, tracking, documentation and archiving.

Wipro solution aims at strategic value delivery in the least possible time incorporating rich functional features, aided by smooth work flow, notification, authorization, etc.

Appraisal at Wipro happens on half yearly basis for both services and managerial employees.

Half yearly appraisal is more from the point of view of identifying training and development needs, where as the year end appraisals for measuring the performance vis-à-vis targets.

5. Comparisons

TCS adopted a unique system of hiring people. It starts its Human Resourcing right at college level. TCS sends senior executives to interact with Academic Institutions. At these institutions, TCS funds many events like conferences, seminars, gets involved in improving curricula, establishes fellowships, exchanges expertise through visiting faculty programmers.

Incase of Wipro each client has a unique structure and a different set of challenges. Wipro aims at a client-centric delivery model to provide the most suitable solution for each client. Wipro consultants and practitioners will work with clients to design a customized, flexible solution that will enable to achieve the HR strategy that best blends with organizational culture.

The practices at both the organizations are more or less same in nature. On the other hand some policies are differing technically, like using EVA model. TCS uses EVA model for giving incentives where as Wipro uses integrated performance solution. On the whole overall practices on recruitment and selection, training and development, retention strategies, are similar almost.

6. Conclusion & Recommendations

From the above information on Personnel Management and HRM on two organizations the following conclusions can be made.

TCS and Wipro have set policies, definite procedures and well defined principles relating to its personnel. These contribute to the effectiveness, continuity, and stability of the organizations.

TCS seemed to have done everything right till now. Their HR practices are so unique and they do rely on the buzz word of the era “knowledge capital”. They ascribe such importance to training and learning to tap the potentials embedded in their workforce. EVA seems to be a concept that is well-implemented that extracts optimum performance. Synergy is brought to the fore by the interplay of workforce across the globe. They are providing different kinds of benefits to its employees to keep them intact. Above all, they were able to rightly mould their procedures in a way it matched with the changing requirements of the environment.

Too many cooks spoil the broth is an old saying that has its complete essence in the context of TCS and Wipro. The companies are widely practicing the concept of diversity and believe to generate the best out of it. So far so good, but how long it can be sustained? An unprecedented rise in the number of foreign nationals to increase the diversity in all probability will froth the cross-cultural issues and will start to be dysfunctional. Incidents related to diversity problems are being reported. A diverse organization is shaped or influenced by the basic corporate culture, geographical culture and personal culture of the people at various levels in the organization, which in turn is affected by the client culture.